In re: NFL Sunday Ticket Antitrust Litigation

Antitrust class action

9th U.S. Circuit Court of Appeals

Judge Sandra S. Ikuta

Appellants' attorneys: Susman Godfrey LLP, Marc M. Seltzer, Bill Carmody, Arun Subramanian, Seth Ard, Ian Gore; Langer Grogan & Diver PC, Howard Langer, Peter E. Leckman; Hausfeld LLP, Scott Martin

Appellee's attorneys: Covington & Burling LLP, Greg H. Levy, Derek Ludwin, John S. Playforth, Sonia Lahr-Pastor; Wilkinson Walsh & Eskovitz LLP, Beth A. Wilkinson, Sean Eskovitz

A group of subscribers to the popular "NFL Sunday Ticket" package on DirecTV sued the NFL and DirecTV on claims the arrangement precludes individual NFL teams from competing with one another in the broadcasting of games to out-of-town markets. The ticket allows fans to view games outside their local broadcast area by signing up for DirecTV.

The cost--about $250 per year for residential customers and up to $120,000 per year for commercial businesses like restaurants and sports bars--are excessive, the subscribers' complaint alleged. U.S. District Judge Beverly Reid O'Connell of Los Angeles dismissed the case in 2017; she died later that year. Her analysis found two agreements at issue: a horizontal agreement among the NFL teams to pool their broadcasting rights and a vertical agreement between the NFL and DirecTV to sell the rights; both survived judicial scrutiny, she ruled.

Marc M. Seltzer, the veteran Susman Godfrey LLP partner who persuaded a 9th U.S. Circuit Court of Appeals panel to reverse O'Connell, said in an email that he emphasized several points at oral argument, but one stood out. "I think focusing on how the agreements among the NFL teams, the NFL and DirecTV operate to limit the number of football fans who can view broadcasts of out-of-market games was a key point."

Wrote Circuit Judge Sandra S. Ikuta, "We conclude that at this preliminary stage, plaintiffs have stated a cause of action for a violation of Sections 1 and 2 of the Sherman Act that survives a motion to dismiss." In re: NFL Sunday Ticket Antitrust Litigation, 2019 DJDAR 7581 (9th Cir., decision filed Aug. 13, 2019).

If the plaintiffs eventually prevail, the arrangement in question will likely undergo significant modification and the class may be able to recover damages, lawyers said.

Seltzer added: "The 9th Circuit's decision is an important reaffirmation of the fundamental principle of the antitrust laws--that interrelated agreements must be viewed together, and not divided into their component parts and analyzed separately, to determine whether they restrain competition."

The defendants have said they plan to petition the U.S. Supreme Court to review the opinion. Gregg H. Levy of Covington & Burling LLP, the principal outside counsel for the NFL, argued at the circuit for the defendants. He did not return a message seeking comment.

--John Roemer