Ninth Inning, Inc. v. DirecTV, No. 17-56119 (9th Cir. 2019)Annotate this Case
The Ninth Circuit reversed the district court's dismissal of an antitrust action brought by a putative class of residential and commercial subscribers to DirecTV's NFL Sunday Ticket. NFL Sunday Ticket is a bundled package of all NFL games available exclusively to subscribers of DirecTV's satellite television service. Plaintiffs claimed that DirecTV's arrangement harms NFL fans because it eliminates competition in the market for live telecasts of NFL games.
The panel held 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 this case, the complaint adequately alleged that DirecTV conspired with the NFL and the NFL Teams to limit the production of telecasts to one per game, and that plaintiffs suffered antitrust injury due to this conspiracy to limit output. The complaint also alleged that defendants conspired to monopolize the market for professional football telecasts and have monopolized it.
Court Description: Antitrust. The panel reversed the district court’s dismissal for failure to state a claim of an antitrust action brought by a putative class of residential and commercial subscribers to DirecTV’s NFL Sunday Ticket, a bundled package of all NFL games available exclusively to subscribers of DirecTV’s satellite television service. Each NFL team entered into a “Teams-NFL Agreement” with the NFL to pool their telecasting rights and give the NFL the authority to exercise those rights. Acting on behalf of its teams, the NFL entered into two additional agreements licensing the teams’ telecast rights. Under the “NFL- Network Agreement,” CBS and Fox coordinate to create a single telecast for every Sunday-afternoon NFL game, and * The Honorable George Caram Steeh III, United States District Judge for the Eastern District of Michigan, sitting by designation. 4 IN RE NFL SUNDAY TICKET ANTITRUST LITIG. the NFL permits CBS and Fox to broadcast a limited number of what are known as local games through free, over-the-air television. Under the “NFL-DirecTV Agreement,” the NFL allows DirecTV to obtain all of the live telecasts produced by CBS and Fox, package those telecasts, and deliver the bundled feeds to NFL Sunday Ticket subscribers. Plaintiffs alleged that defendants’ interlocking agreements work together to suppress competition for the sale of professional football game telecasts in violation of §§ 1 and 2 of the Sherman Act. The panel held that plaintiffs stated a § 1 claim under the rule of reason because they adequately alleged (1) a contract, combination, or conspiracy among two or more persons or business entities; (2) by which the persons or entities intended to harm or restrain trade; (3) and which actually injured competition; and (4) antitrust standing. The first and second elements were undisputed. As to the third element, the panel held that, under Nat’l Collegiate Athletic Ass’n v. Bd. of Regents of Univ. of Oklahoma, 468 U.S. 85 (1984), plaintiffs plausibly alleged that the interlocking agreements caused injury to competition. As to the fourth element, it was undisputed that plaintiffs had standing to challenge the Teams-NFL Agreement and the NFL-DirecTV Agreement. The panel held that plaintiffs also had standing to challenge the Teams-NFL Agreement because they alleged that their injury was caused by a single conspiracy. The panel concluded that Illinois Brick, limiting the standing of indirect purchasers, did not apply. The panel held that the plaintiffs stated a claim under § 2 of the Sherman Act in alleging that, by entering into interlocking agreements, the defendants conspired to IN RE NFL SUNDAY TICKET ANTITRUST LITIG. 5 monopolize the market for professional football telecasts and have monopolized it. Judge N.R. Smith dissented from Part III(C) of the majority’s opinion, addressing antitrust standing. Judge Smith disagreed with the majority’s conclusion that, because plaintiffs alleged a conspiracy among defendants to limit output, the direct purchaser rule of Illinois Brick did not apply to plaintiffs’ damages claim related to the Teams-NFL Agreement.