Tuesday, April 26, 2011

NFL Lockout Lifted; What's next?

As is pretty well known by this point, U.S. District Judge Susan Nelson ruled for the plaintiffs in Brady v. NFL, the antitrust lawsuit brought by current and prospective NFL players against the National Football League. What is clear is that the ruling granted the relief sought by the plaintiffs, namely, a preliminary injunction. What is less clear is what this means as a practical matter, particularly because the NFL has asked for a stay (meaning that Judge Nelson's decision would not go into effect pending expedited review by the appeals court). Judge Nelson has ordered the plaintiffs to respond to the request by Wednesday, which means that we will have to wait at least 24 hours to get some clarity on the situation.

Legal commentary on the decision is quickly proliferating through the blogosphere. Michael McCann has a great post up on Sports Illustrated breaking down the key practical and legal issues. (Disclosure: he has also blogged at The Situationist, where I have blogged in the past).

As McCann alludes to in his post (and as my friend Jason Reimer pointed out on twitter), the owners are in a bit of a bind. If the owners get together and decide how to respond to the ruling -- for example, by not engaging in any trades until the Eighth Circuit rules, a process that could take weeks -- they might face the risk of further antitrust violations (for colluding to restrict player movement, for example). On the other hand, the NFL raises a valid point in its motion for a stay, arguing that the league will suffer irreparable harm if it opens for business today, only to have Judge Nelson (or the Eighth Circuit) stay her decision a few days (or weeks) later.

One hurdle for the owners is that preliminary injunctions are reviewed very deferentially. Just a few months ago, the Eighth Circuit wrote,

“We review the district court's grant of a preliminary injunction for abuse of discretion, giving deference to the discretion of the district court.” . . . "An abuse of discretion occurs if the district court rests its conclusion on clearly erroneous factual findings or if its decision relies on erroneous legal conclusions.”
Rogers Group, Inc. v. City of Fayetteville, 629 F.3d 784, 787 (8th Cir. 2010) (citation omitted).

What does this mean as a practical matter? "Abuse of discretion" is a very hard standard to meet. To be reversed, Judge Nelson's decision would have to be so obviously wrong ("clearly erroneous") that it is implausible. Generally, appeals courts do not like to tell district courts that they have blatantly screwed up. This makes the climb that much steeper for the owners.

I continue to be optimistic that we'll have a football season this fall. Indeed, I never really thought we wouldn't have football this fall. The real question is, when a deal gets done that brings us the 2011-12 season, what will that deal look like? Last night's decision tilts the scales in favor of the plaintiffs, so that they have a little more leverage in the negotiations. About 20 years ago, in the context of divorce law, Robert Mnookin and Lewis Kornhauser wrote that parties "bargain in the shadow of the law". That is, the law does not "impos[e] from above, but rather . . . provid[es] a framework within which [parties] can themselves determine their . . . rights and responsibilities.”

Something similar is happening here. Last night's decision ended the owners' lockout, at least temporarily. But more important, it changed the negotiating context for owners and players. A reversal from the Court of Appeals would change that context once more.

Notably, Judge Nelson's decision was made at the preliminary injunction stage. In theory, this is a temporary decision -- in place only until the underlying lawsuit is finally resolved. That means, even if the Eighth Circuit does not immediately reverse the decision, Judge Nelson herself could ultimately rule in the owners' favor at some later stage in the case. By its terms, this decision is "preliminary".

In practice, the case will probably resolve itself long before any major further proceedings. But because the case has so many moving parts -- the owners' appeal, potential further proceedings before Judge Nelson, the owners' NLRB complaint against the players, the players complaint against the owners regarding TV revenue, and (lest we forget!) the actual terms of a future collective bargaining agreement -- the dispute is far from over.

6 comments:

  1. I hope that you're right. Otherwise the league is going to suffer the fate of the NHL: vastly lower audiences, and significantly reduced interest.

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  2. Does abuse of discretion really mean clearly erroneous?

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  3. I do think the situation was a little different with the NHL -- the teams were losing hundreds of millions of dollars at the time -- but your point is valid. Even after the 1994 MLB strike, it took a while for fans to come back. Maybe I'm unreasonably optimistic, but I don't think owners and players will actually kill the goose that lays the golden eggs.

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  4. As a practical matter, "abuse of discretion" is a high hurdle. As a legal matter, yes, at least in the Eighth Circuit, "abuse of discretion" means clearly erroneous factual findings (as noted above), or clearly erroneous legal conclusions. Now I don't know if "erroneous legal conclusions" and means the same thing as "clearly erroneous", but if not, it's got to be pretty close.

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