NBA files federal lawsuit against players

[DBoys]

That, of course, is limited to the context of a non-labor/management system where the court is applying the rule of reason to see if the Sherman Act has been violated. If we're talking about temporary rules imposed after an impasse, while the labor-management structure is still intact, maybe the court would weigh in on what specifically the league can do before it has gone too far. A special master might be appointed, or if it's something as simple as a reasonable cap figure, the court could consider expert testimony from both sides and reach its own conclusion.

This ^^ is exactly what I'm positing. The idea that the NBA would certainly run afoul of antitrust law if they set rules after an impasse, uses the assumption that they would blindly set arbitrary rules with no thought to meeting the standard of reasonability or attempting to determine what it is. That of course just makes no sense; lest we forget, it's a league of lawyers - and they know how to cross i's and dot t's to satisfy the law whenever it's needed.

[DBoys]

I don't think Killbuckner was saying that a reasonability standard would not be applied by a court. My reading was that he believed courts would prefer to not get into dictating specific numbers. Rather, they'd simply weigh in on whether the concept of having a salary cap is a reasonable restraint on trade, rather than whether the specific figures outlined in the cap are reasonable. If that is what he was saying, then I agree on that point.

I did (and do) think he was saying explicitly that a court would only say one of two things:
a - Absent a union or CBA, you can still have a cap of any sort at any level.
b - Absent a union or CBA, you can not have a cap at all.
[KB: "I'd think the courts would have to either grant the league the ability to set whatever number they want (20 million or even lower) or say that the ability to arbitrarily set a salary cap is an unreasonable restraint on trade and take the ability away."]

And that extreme dichotomy was what I was replying to, because I think there is a clear 3rd choice, and one that the court's prior rulings would indicate: absent a union or CBA (as a result of an impasse or breakdown), you can still have a cap if it's reasonable. And my thought is that the court would then be petitioned and would create some mechanism for advance rulings on "reasonableness" as the league decided to unilaterally implement needed rules.

[NOOOB]

They are INTERNATIONAL players with an INTERNATIONAL market. For the normal person in a different industry, I think different rules would apply because they do not operate internationally.

The court will certainly consider the nature of the particular industry, and professional sports are a special case. Add to that the fact that basketball happens to be doing particularly well as an international game and you've got a pretty good case, Dboys. But closing off a major and highly successful portion of that international market (North America) may go too far. I think it does, you think it doesn't. What matters is what a neutral fact-finder would think if the union decertified and this issue became ripe for consideration. I'm sure your argument about the international nature of the game would weigh heavily on their determination.

As clarification, I think the barrier we're discussing applies to international, as well as American players. The impact is obviously felt by American players to a greater degree, but I still don't think Nic Batum should be forced to swallow unacceptable terms in order to be allowed to play professionally in the U.S.

the idea that the marketplace for employment in a certain sport can be international and therefore preclude a singular league in the US from actually being a monopoly that has to run scared of antitrust issues.

Well, in my view the NBA is a monopoly that is the sole provider of professional basketball entertainment for me here in the U.S. I don't get Euro-league as part of my cable package and if I want to see live pro basketball in my town, I've got only one option.

But even accepting that it does not monopolize the international market, that's actually not what's at issue. Section 2 of the Sherman Act regulates monopolies, Section 1 regulates collusion between industry members that restrains trade/commerce. That's what we're talking about. No monopoly needed. As few as two members of an industry can run afoul of Section 1 if the result of their collusion unreasonably restrains trade.

[NOOOB]

I don't think Killbuckner was saying that a reasonability standard would not be applied by a court. My reading was that he believed courts would prefer to not get into dictating specific numbers. Rather, they'd simply weigh in on whether the concept of having a salary cap is a reasonable restraint on trade, rather than whether the specific figures outlined in the cap are reasonable. If that is what he was saying, then I agree on that point.

I did (and do) think he was saying explicitly that a court would only say one of two things:
a - Absent a union or CBA, you can still have a cap of any sort at any level.
b - Absent a union or CBA, you can not have a cap at all.
[KB: "I'd think the courts would have to either grant the league the ability to set whatever number they want (20 million or even lower) or say that the ability to arbitrarily set a salary cap is an unreasonable restraint on trade and take the ability away."]

And that extreme dichotomy was what I was replying to, because I think there is a clear 3rd choice, and one that the court's prior rulings would indicate: absent a union or CBA (as a result of an impasse or breakdown), you can still have a cap if it's reasonable. And my thought is that the court would then be petitioned and would create some mechanism for advance rulings on "reasonableness" as the league decided to unilaterally implement needed rules.

Okay, so KB is arguing based on the assumption that either the union exists, and the labor exemption applies, or it doesn't, and a court would have to weigh in on the legality of the cap, etc. under the Sherman Act. You, on the other hand, are saying that there's a third option where the league can continue to operate in absence of a union and impose a new cap, but without consideration of the legality of the cap under the Sherman Act. They'd use a similar reasonableness analysis, but it wouldn't be an application of the rule of reason applied in Sherman Act related case-law. Is that correct?

Turning back to my prior posts on Williams, I sort of agree with you, but with a fairly substantial caveat. Judge Duffy indicated that the league could continue to operate under the protection of the labor exemption, but strongly implied that it could only do so if the union continued to exist:

Accordingly, the NBA is granted the declaration it seeks -- the continued implementation of these challenged measures by the NBA do not violate the antitrust laws as long as the collective bargaining relationship exists.

This does not mean that the Players are "stuck" with these provisions forever. Certainly, they can attempt to bargain these provisions away -- including exerting economic pressure by means of a strike. Or, the Players may request decertification of the NBPA as a collective bargaining agent. I do not mean by this ruling to encourage the Players to decertify their union so that they may bring an antitrust claim. But, decertification is certainly an option the Players have.

http://ny.findacase.com/research/wfrmDo ... SNY.htm/qx

So I see the middle ground you reference as only a temporary fix, while the labor-management relationship still exists, albeit at a stalled point in negotiations. And this makes sense from a fairness standpoint. To allow the league to unilaterally impose restrictions in perpetuity free from the coverage of the Sherman Act, just because a labor-management relationship once existed would penalize the players for having ever unionized. From a policy standpoint, no court would ever want to open that door.

Edit: ^Or they might have cracked that door open in the 8th Circuit. We still gotta find that recent NFL decision!

[DBoys]

"Or they might have cracked that door open in the 8th Circuit. We still gotta find that recent NFL decision!"

Yep, that was my point.
a - Williams took it to a certain point by saying you can set reasonable rules and go back to work if you reach an impasse vs a union.
b - Then the 8th took it a bit farther by saying that decertification is NOT the trump card anymore - ie, once players have started negotiating a contract using a union, then what happens thereafter is still considered to be a part of those collective negotiations even if they decertify.
c - The next court can feasibly decide that a and b both apply to an impasse, and thereby allow a league to impose reasonable rules and start back to work even if the union tries to pull the decertification ploy.
....In fact, isn't the NBA already going to court to set the groundwork for that argument?

PS - I think the issue is limited to a certain negotiation. The players are represented by a union for that negotiation, and vice versa. Once in, all in - for that negotiation. Let's be real here, in the NFL case, the union was right in the middle of everything even though SUPPOSEDLY they no longer represented anyone. And when a deal was made, it was the union that negotiated it. Everyone in the world could see the union was still acting for the players, despite the "in name only" decertification ...and judges can see it too, and they seem to be ruling accordingly.

[NOOOB]

"Or they might have cracked that door open in the 8th Circuit. We still gotta find that recent NFL decision!"

Yep, that was my point.
a - Williams took it to a certain point by saying you can set reasonable rules and go back to work if you reach an impasse vs a union.
b - Then the 8th took it a bit farther by saying that decertification is NOT the trump card anymore - ie, once players have started negotiating a contract using a union, then what happens thereafter is still considered to be a part of those collective negotiations even if they decertify.
c - The next court can feasibly decide that a and b both apply to an impasse, and thereby allow a league to impose reasonable rules and start back to work even if the union tries to pull the decertification ploy.
....In fact, isn't the NBA already going to court to set the groundwork for that argument?

Although the 8th Circuit case is more recent and can certainly be considered, it is not controlling. It can be cited as persuasive authority in courts within the 2nd Circuit, but if it butts up against any 2nd Circuit rulings, it loses out. Similarly, Judge Duffy's decision is not controlling on other district court judges, since he's only a district court judge himself. But if the judge in the pending case is weighing 8th Circuit caselaw against that of a fellow member of the Southern District of NY, they'll probably defer to the local ruling.

Having said all that, recall that on appeal of Judge Duffy's decision in Williams, the 2nd Circuit was silent on the impact decertification could have on the continuation of the labor exemption's coverage. So there is no controlling authority in the 2nd Circuit that I know of. As a result, the court presiding over the current suit would have to weigh the 8th Circuit's approach you've described against Judge Duffy's approach. I'm not commenting on whom they choose to go with, just laying the situation out.

Turning to the NBA's gameplan, they could be thinking that far ahead. But I think they're simply trying to prevent the union from decertifying. If they accomplish this, then they've effectively neutered the union. Plus they're free to proceed under Judge Duffy's approach if they want.

To be honest with you, I don't think anyone involved believes they could impose rules unilaterally for any extended period of time after the union decertifies. How long could they do this for? Once the union disbands, can they wield the hammer of that 8th Circuit decision in perpetuity, permanently imposing their own rules without consideration of the Sherman Act? That's why we've got to find that thing before we can discuss it from an informed standpoint. There must be some temporal limit even in that case.

[DBoys]

"I don't think anyone involved believes they could impose rules unilaterally for any extended period of time after the [union] decertifies."

Let's first recognize that all of this is supposition - we're not in that situation, and no court has actually endorsed such a plan.

But if we assume a and b led to c and non-negotiated rules got rolling ....

If they are deemed reasonable rules by a court, and as long as nothing changes, why would there necessarily be a cutoff? The courts' legal concept (Williams) is that a business has the right to get to work, and doesn't have to be held hostage. In addition, it's hard to argue that things like caps and drafts are unreasonable when players, represented by a union, were quite willing to accept them.

If absent a union (due to decertification) the league implemented a similar setup as exists now, with the numbers merely tweaked to permit profitability and thereby help solidify jobs, and a special master agreed that it was reasonable, why would it have to change until there's a union to negotiate something different or until the marketplace and economics shifted considerably ?

[NOOOB]

One important note to add: With all this discussion of Williams we've been having as if it's the gospel, there's a chance that some other more recent 2nd Circuit decision may have altered or clarified it. There's really no way of being sure when all we've got to work with is google for hunting down cases. If there's something else out there though, the NBA/NBPA will surely find it with Lexis/Westlaw at their disposal.

[NOOOB]

"I don't think anyone involved believes they could impose rules unilaterally for any extended period of time after the [union] decertifies."

Let's first recognize that all of this is supposition - we're not in that situation, and no court has actually endorsed such a plan.

But if we assume a and b led to c and non-negotiated rules got rolling ....

If they are deemed reasonable rules by a court, and as long as nothing changes, why would there necessarily be a cutoff? The courts' legal concept (Williams) is that a business has the right to get to work, and doesn't have to be held hostage. In addition, it's hard to argue that things like caps and drafts are unreasonable when players, represented by a union, were quite willing to accept them.

If absent a union (due to decertification) the league implemented a similar setup as exists now, with the numbers merely tweaked to permit profitability and thereby help solidify jobs, and a special master agreed that it was reasonable, why would it have to change until there's a union to negotiate something different or until the marketplace and economics shifted considerably ?

Yes, we're absolutely posing suppositions that are well ahead of the situation that's actually at hand.

My concern with continuing under our "3rd option" over the long term is that it circumvents well established anti-trust and labor law to create a brand new "reasonableness" standard by judicial fiat. Notably, no judge has actually mentioned the reasonableness standard you're applying under the 3d option, but we both seem to agree that it would quickly be read into it. As practical as your 3rd option may be for the short term in getting the NBA back to work, eventually you need to circle back to the statutory standard.

[DBoys]

"eventually you need to circle back to the statutory standard"

But assuming an impasse and/or decertification, what would the "statutory standard" be?

You assume that there can be no draft or cap ... but given that those are clearly 'industry standards" for this type of industry, I'm not sure there'd be any "circling back" needed if the rules changes were crafted with care and followed a "reasonable' standard. The fact that the NBA has had caps and drafts as a RESULT of collective bargaining would seem to point to that sort of league framework as perfectly normal and thus allowable.

In addition, unilateral rules changes tend to undergo tons of scrutiny, so I'd expect any unilateral rules changes to be implemented under lots of care and review in advance, with the expectation they might be in place for quite a while.

If you look at the history of unilateral changes made by employers after an impasse, the changes are implemented in a permanent-until-something-major-is-changed-in-the-landscape fashion, as far as I can tell. Can you find instances where that was not the case?

[NOOOB]

"eventually you need to circle back to the statutory standard"

But assuming an impasse and/or decertification, what would the "statutory standard" be?

You assume that there can be no draft or cap ... but given that those are clearly 'industry standards" for this type of industry, I'm not sure there'd be any "circling back" needed if the rules changes were crafted with care and followed a "reasonable' standard. The fact that the NBA has had caps and drafts as a RESULT of collective bargaining would seem to point to that sort of league framework as perfectly normal and thus allowable.

In addition, unilateral rules changes tend to undergo tons of scrutiny, so I'd expect any unilateral rules changes to be implemented under lots of care and review in advance, with the expectation they might be in place for quite a while.

If you look at the history of unilateral changes made by employers after an impasse, the changes are implemented in a permanent-until-something-major-is-changed-in-the-landscape fashion, as far as I can tell. Can you find instances where that was not the case?

Post-decertification, the statutory standard would be the Sherman Act, without the shelter of the labor exemption. So you're back into KB's framework. I'm trying not to stray too far away from basketball talk, but basic principles of Constitutional law get in the way when you get the courts involved. When a judge sets up a new rule that permanently side-steps the two controlling statutes (Sherman and Clayton Act), he/she is legislating from the bench. In which case, their ruling will be shot down from a separation of powers standpoint. No matter how carefully crafted and consistent with prior industry practice their solution may be, a judge technically can't do anything more than interpret and apply the laws enacted by Congress. The standard you're positing sounds similar to the rule of reason, which applies the Sherman Act, but if I'm understanding you correctly your approach would exist outside of the Sherman/Clayton Act. Unfortunately a judge can't do that.

[DBoys]

I agree that in theory, judges don't make law. But let's be real here, we know that judicial restraint is a very relative term that tends to be in the eye of the beholder.

In addition, Sherman/Clayton was written by 1914, but it's been revised and modified numerous times over the years, by the courts. Those revisions use a judge (or judges) personal "rule of reason" to tweak the law's mandates in various ways. So when you say that we shouldn't expect the rule of reason to mean anything, I can't buy that.

That's always the bottom line in the courts ... they'll slide that law one way or another, if they think it's off base, rather than adhere to the strict tenets of the act itself ... they use the reasoning of prior courts as well as their own .... and I can't see this situation as portending anything different.

It sounds to me like you're saying the courts would never allow a cap and/or a draft in such a situation. But I think prior rulings clearly have paved the way for them to do so, provided there's reasonability in the setup, and their analyses in prior cases seems to have left the door wide open for such a ruling ahead imo.

[NOOOB]

I agree that in theory, judges don't make law. But let's be real here, we know that judicial restraint is a very relative term that tends to be in the eye of the beholder.

In addition, Sherman/Clayton was written by 1914, but it's been revised and modified numerous times over the years, by the courts. Those revisions use a judge (or judges) personal "rule of reason" to tweak the law's mandates in various ways. So when you say that we shouldn't expect the rule of reason to mean anything, I can't buy that.

That's always the bottom line in the courts ... they'll slide that law one way or another, if they think it's off base, rather than adhere to the strict tenets of the act itself ... they use the reasoning of prior courts as well as their own .... and I can't see this situation as portending anything different.

It sounds to me like you're saying the courts would never allow a cap and/or a draft in such a situation. But I think prior rulings clearly have paved the way for them to do so, provided there's reasonability in the setup, and their analyses in prior cases seems to have left the door wide open for such a ruling ahead imo.

Sure, an activist judge can stretch the literal language of the Sherman Act and come up with an easily manipulated standard like the "rule of reason." Then the next one can come up with new rules "interpreting" the rule of reason to bend it into fitting whatever agenda they've got. Another judge can stretch the literal language of the Clayton Act and come up with the non-statutory labor exemption. Then they can stretch that out. But what they can't do is overtly abandon both laws and arbitrarily introduce a new "3rd approach" that is rooted in no law. Even if it's a great solution.

I've suggested they could get away with it for a short period while talks are stalled, but the labor-management relationship still exists. I think that's okay because I view it as an application of the Clayton Act, although it's stretching it pretty thin. But if you get rid of the labor-management relationship and put it far enough behind you, what law are you basing your rule on?

I'm generally pretty lax about raising the judicial activism flag. What's ironic is that a guy like Scalia would have a field day with what you're suggesting a judge could do. Between the judge and his special master, they're performing all three roles of government.

[ranger001]

I agree that in theory they can't abandon the law and make it say something different but a lot of laws have been stretched way beyond their original intent and in ways that the original lawmakers did not envision.

[NOOOB]

Not to stir the hornets' nest back up, but I found the 8th Circuit decision in Brady that DBoys was talking about. Basically, the district court judge (Nelson) ruled that the Norris-LaGuardia Act, which prevents courts from issuing injunctions in labor disputes, no longer applied after the NFLPA decertified. Accordingly, Judge Nelson found that she was free to enjoin the NFL's lockout, and she did so.

The 8th Circuit then overturned her ruling because it held that the Norris-LaGuardia Act applies so long as there is a labor dispute, even after the union decertifies. Therefore, the injunction was lifted as a violation of Norris-LaGuardia, and the lockout was back on.

Assuming that decision is applied in the 2nd Circuit (which it doesn't have to be), all it says is that the district court can't issue injunctions, even after decertification. Thus, in the NBA's case, the players' assn. couldn't ask the court to stop the lockout, even after they've decertified. Presumably, nor could they seek an injunction asking the court to exercise its equitable powers to bar other unilateral actions taken by the league.

Here's what's important: While the 8th Circuit said that Norris-LaGuardia continued to apply, they did not say that the non-statutory exemption would continue to protect the NFL from anti-trust liability post-decertification. Therefore, if you apply that case to a hypothetical NBPA decertification, the players could not seek injunctions, but they could still sue under Section 1 of the Sherman Act and still seek treble damages. So basically the players can't ask the court to undo, say, a unilaterally imposed $40M hardcap, but they can still sue for hefty damages after the fact.

The link below has the original text of the decision embedded, but here's a quote from the commentary that sums it up:

Critically, Colloton did not rule on whether the traditional antitrust exemption extended by the courts to labor-management negotiations extended past the date of the union’s disclaimer. This means the league’s franchise operators may still be liable for antitrust damages arising from the lockout.

http://www.antitrusthall.com/?p=260

So... why not take the reasoning applied for extending Norris-LaGuardia post-decertification and use it to extend coverage of the labor exemption as well? The 8th Circuit went through extensive analysis demonstrating that a "labor dispute" is what matters for coverage under Norris-LaGuardia, and that a labor dispute can exist even without a union. On the other hand, a labor-management relationship (which requires a labor union), is what triggers protection under the labor exemption. So it's apples to oranges. Here's what they said about it:

Given our conclusion that the preliminary injunction did not conform to the provisions of the Norris-LaGuardia Act, we need not reach the other points raised by the League on appeal. In particular, we express no view on whether the League's nonstatutory labor exemption from the anti-trust laws continues after the union's disclaimer. The parties agree that the [Norris LaGuardia] Act's restrictions on equitable relief are not necessarily coextensive with the substantive rules of antitrust law, and we reach our decision on that understanding.

[NOOOB]

I agree that in theory they can't abandon the law and make it say something different but a lot of laws have been stretched way beyond their original intent and in ways that the original lawmakers did not envision.

I totally agree with you. A court can claim to rely on the "penumbras and emanations" of the 14th Amendment to come up with all sorts of new ideas that the original drafters never would have dreamt of. But all judges recognize that they can't simply say "I've got my own new way" without referring to some law, even if they're drastically altering its meaning. So that's why I'm suggesting that a court can't introduce a brand new standard that is not based on either of the applicable laws (Sherman/Clayton Act). Sorry to keep harping on the point, though.

[DBoys]

NOOOB

You found the text, but it looks like you want to miss what i think is the key. Let me outline it again.

What the 8th said/did that I think is ground-breaking is not the specific ruling, but rather the underlying principle they used. They said that rules (at least some of them) pertaining to an owner-union dispute can still be completely in existence and applicable after a union decertifies. That can be a game-changing principle - and it could easily be extended further.

The fact that it can be extended isn't me hypothesizing some "who knows" thesis, but it's derived from the further reasoning that the 8th laid out, and that you noted above. While you have (accurately) noted that they did not specifically apply that to the labor exemption, they took pains to point out that they were NOT ruling out such application either! In past years, they probably would have slammed that door shut while making a narrow ruling - but this time, they instead walked away from the issue and left a neon question mark.

And as I see it, the parties playing the game have noticed. The NFLPA basically folded their hand after that ruling, and the NBA looks like they see the same "open(?)" door and are trying to walk through it with their lawsuit, and get a ruling on whether that ace in the hole exists or not for the players anymore.

Yes, I understand the nuances of the court system - it's the 8th, we're now looking at a case under the umbrella of the 2nd, and ultimately any conflicts might get kicked up the ladder to the top to resolve etc etc etc. But in light of these recent rulings having been made in the way they were, I think it's folly to assume the endgame is going to necessarily play out the same as it used to.

[killbuckner]

What the 8th said/did that I think is ground-breaking is not the specific ruling, but rather the underlying principle they used. They said that rules (at least some of them) pertaining to an owner-union dispute can still be completely in existence and applicable after a union decertifies. That can be a game-changing principle - and it could easily be extended further.

Dboys- Do you understand that the COURTS are who told the NFL players that if they wanted to challenge provisions of a now expired CBA that they way that they could do so would be through decertifying the Union? The 8th circuit said that they were not allowed to grant an injunction because the NLGA says that it is prohibited in any dispute that "grows out" of a labor dispute. But thats as far as it goes- explicitly decertifying the union is what allows the players to sue for treble damages on thinings that were previously collectively bargained.

[killbuckner]

And as I see it, the parties playing the game have noticed. The NFLPA basically folded their hand after that ruling.

What the hell are you talking about? The owners weren't offering anything CLOSE to this deal before the union decertified. The owners wanted to take 2 billion in profits off the top before decertification- now they don't get anything off the top. Teams are required to spend pretty much 100% of the salary cap every season. The players are all granted unrestricted free agency 4 years after being drafted which the NBA players would kill for.

[DBoys]

What the 8th said/did that I think is ground-breaking is not the specific ruling, but rather the underlying principle they used. They said that rules (at least some of them) pertaining to an owner-union dispute can still be completely in existence and applicable after a union decertifies. That can be a game-changing principle - and it could easily be extended further.

Dboys- Do you understand that the COURTS are who told the NFL players that if they wanted to challenge provisions of a now expired CBA that they way that they could do so would be through decertifying the Union? The 8th circuit said that they were not allowed to grant an injunction because the NLGA says that it is prohibited in any dispute that "grows out" of a labor dispute. But thats as far as it goes- explicitly decertifying the union is what allows the players to sue for treble damages on thinings that were previously collectively bargained.

Kill, I'll answer you in the same pedantic phrasing. Do you understand that (a) the courts have been eroding that decertification game plan from one ruling to another, (b) the 8th did NOT validate the decertify-and-sue strategy even though they could have, and (c) the NBA right now is asserting based on the evolution of the law - and asking the 2nd to agree preemptively - that decertification should have no teeth (aka, no treble damages!) when being used in such a fashion?