4 Reasons Why Gov. Corbett’s Antitrust Lawsuit Against The NCAA Is On Shaky Ground

[Third Update, June 6, 2013: Judge Kane has dismissed the lawsuit. Here's the order, concluding:

The Governor’s complaint implicates the extraordinary power of a non-governmental entity to dictate the course of an iconic public institution, and raises serious questions about the indirect economic impact of NCAA sanctions on innocent parties. These are important questions deserving of public debate, but they are not antitrust questions. In another forum the complaint’s appeal to equity and common sense may win the day, but in the antitrust world these arguments fail to advance the ball. Plaintiff’s complaint fails on all prongs: it fails to allege commercial activity subject to the Sherman Act; it fails to allege that Defendant’s activity constituted a violation of Section 1 of the Sherman Act; and, it fails to allege that Plaintiff suffered an antitrust injury. On thorough review, this Court can find no basis in antitrust law for concluding that the harms alleged entitle Plaintiff to relief.

The Court thus dismissed the claims on standing, on their merits, and on even the factual predicate that antitrust law was implicated. Like I had said before, "Pennsylvania still has problems showing a nexus between that antitrust violation and a viable claim, regardless of whether we phrase it as a matter of standing, pleading, or causation," and that's essentially what the Court held.]

 

[Second Update, February 8, 2013: The NCAA has filed its brief arguing that the NCAA's enforcement action was not subject to antitrust law, that it was procompetitive, that the complaint fails to allege anticompetitive effects in a relevant market, and that the plaintiff lacks standing.]

 

[Update: Obviously, there's been plenty of coverage. See this post at SB Nation, this report at Reuters, and this story at Morning Call, the latter two of which quote me. Others differ on the standing issue (in essence, they assume a State always has standing to challenge any alleged antitrust violation), but most everyone agrees the case is a tough sell. See my comment at SB Nation — even if we begin by assuming the NCAA violated antitrust laws, given the indirect nature of the claim here, Pennsylvania still has problems showing a nexus between that antitrust violation and a viable claim, regardless of whether we phrase it as a matter of standing, pleading, or causation.]

 

I spent plenty of time on this blog discussing Penn State’s civil liability following the Jerry Sandusky abuse scandal, with most of my thoughts in this post. At this point, the Freeh report was rightly damning, and PSU has, as I hoped they would, brought in outside help (Ken Feinberg, the most prominent mediator in the country) to try to resolve the claims.

 

I didn’t dwell on the consent decree Penn State entered into with the NCAA sanctions — as they say, a deal is a deal, and that’s just as true for a university and an athletic association, except to point out that there was no reason for the NCAA to care that a minority of the Penn State’s Board of Trustees disagreed with the decision to enter into the consent decree. Corporations act through their management, chosen by their Board of Trustees; the thoughts and feelings of a minority of trustees aren’t relevant to anyone dealing with the party.

 

Earlier today, the issue returned with a vengeance, as Governor Corbett announced his intention to file, on behalf of the Commonwealth of Pennsylvania, an antitrust lawsuit against the NCAA. When a reporter at the press conference asked how the Governor could have standing, his chief counsel responded they were using parens patriae standing. Here’s a PDF copy of the complaint. In essence, Corbett, claiming to act on behalf of Commonwealth of Pennsylvania (I write “claiming” because, as described below, federal law authorizes the attorney general, not the governor, to act) alleges the NCAA’s sanctions against Penn State violate federal antitrust law. The real meat of the lawsuit starts on page 30. The claim is, in essence:

[T]he sanctions against Penn State do not even ostensibly serve the NCAA’s stated goal of protecting the fairness of intercollegiate athletic competition. Rather, they were taken for the purposes of debilitating a once-powerful football program, enhancing the NCAA’s own reputation, and boosting the competing football programs of cetrain member colleges and universities by removing from competition one of the leading competitors.

 

Grab a cup of coffee, we have a lot to talk about here.

 

First, there’s the issue of standing. At the core of every lawsuit is not just a gripe someone has about the world, but the legal standing of the plaintiff. As the Pennsylvania Supreme Court has explained, “the core concept of standing is that a person who is not adversely affected in any way by the matter he seeks to challenge is not aggrieved thereby and has no standing to obtain a judicial resolution of his challenge.” Fumo v. City of Philadelphia, 972 A. 2d 487, 496 (Pa. 2009).

 

Prior to the filing, some pundits had speculated Corbett was going to rely on the fact that Penn State was a state school to claim standing, but Corbett thankfully didn’t even try that. As I explained in depth in this post, Penn State is not a state school. Pennsylvania has state schools in its Pennsylvania State System of Higher Education (PASSHE), but Pennsylvania State University, like Temple University, Lincoln University, and the University of Pittsburgh are not part of PASSHE, they are “state-related universities.” As the Pennsylvania Supreme Court has held, just because a school receives some state funds does not mean they are part of the state. Mooney v. Temple Univ. Bd. of Trustees, 448 Pa. 424, 429-30 (1972)(The mere funding of an institution does not, however, make it an agency or instrumentality of the state.).

 

Parens patriae means literally “parent of the country,” and it’s a traditional common law power that dates back to royal times. As the United States Supreme Court explained thirty years ago, parens patriae is a messy, complicated doctrine:

 

This common-law approach, however, has relatively little to do with the concept of parens patriae standing that has developed in American law. That concept does not involve the State’s stepping in to represent the interests of particular citizens who, for whatever reason, cannot represent themselves. In fact, if nothing more than this is involved (i. e., if the State is only a nominal party without a real interest of its own) then it will not have standing under the parens patriae doctrine. Rather, to have such standing the State must assert an injury to what has been characterized as a “quasi-sovereign” interest, which is a judicial construct that does not lend itself to a simple or exact definition.

 

Alfred L. Snapp & Son, Inc. v. Puerto Rico ex rel. Barez, 458 U.S. 592 (1982). The Clayton Act, one of the federal anti-trust laws, specifically permits parens patriae lawsuits by “Any attorney general of a State may bring a civil action in the name of such State, as parens patriae on behalf of natural persons residing in such State,” if they’re seeking monetary damages under Section 4, and, separately, permits any “private person” to seek injunctive relief under Section 16, including states. (More about that below in the comments.)

 

And there’s our first problem: Governor Corbett isn’t the “attorney general” of Pennsylvania, and the incoming Attorney General, Kathleen Kane, is a member of the opposite political party. At the press conference, Corbett’s counsel brushed this aside, saying the departing Attorney General delegated this function to the Governor, and so the new AG Kane is powerless to stop it. This is a problem both under the Clayton Act (assuming the court looks at the claim as a Section 4, rather than Section 16, claim; see the discussion in the comments with Rob for more), but, moreso, under Pennsylvania’s own separation of powers between the Attorney General and the Governor.

 

That argument strikes me as meritless. The Pennsylvania Constitution plainly says the Attorney General “shall be the chief law officer of the Commonwealth and shall exercise such powers and perform such duties as may be imposed by law.” Pa. Const. art. IV, section 4.1. The AG shall exercise their own powers and their duties, and there is no provision for delegating those powers to the Governor. Moreover, as a basic matter of executive authority, what can be done can be undone, and the Pennsylvania does not have a no take backsies provision. If AG Kane wants to pull the plug, I have no doubt she can and that she would be affirmed by the Pennsylvania Supreme Court for doing so. Whether she considers that prudent is up to her.

 

But let’s go to the second problem: Pennsylvania may not have parens patriae standing.

[Update: A couple folks have asked me to sum the standing issue up succinctly. Here goes: even if we assume PSU itself could have an antitrust claim against the NCAA, the Pennsylvania citizens the lawsuit claims to be on behalf of identified by the lawsuit — e.g., "citizens who earn income by working in the stadium on game days [and] the shop owners whose small businesses generate significant revenue from the sale of Penn State memorabilia” — do not, because they have “indirect” claims, and the Supreme Court rejected those in the Illinois Brick opinion. That’s a problem for the lawsuit, because parens patriae standing usually requires a state show both a “quasi-sovereign” interest in the lawsuit and a legally cognizable harm to its citizens directly, and it seems Pennsylvania might not have either. Read on for details.]

 

Corbett said at the press conference he was suing on behalf of the students, as well as “the citizens of Pennsylvania, the business in State College and across Pennsylvania who are being harmed by this. Parens patriae standing is quite broad, but most federal appellate courts have taken a dim view of states bringing parens patriae lawsuits where the state can’t prove a direct damage to itself, as compared to economic harms to its citizens. See, e.g., In re Baldwin-United Corp., 770 F.2d 328, 341 (2d Cir. 1985) (“[W]hen the state merely asserts the personal claims of its citizens, it is not the real party in interest and cannot claim parens patriae standing.”); accord Louisiana ex rel. Caldwell v. Allstate Ins. Co., 536 F.3d 418 (5th Cir.2008)(Two non-sovereign interests, which would not provide a state with standing for a parens patriae action, are proprietary interests and private interests pursued by the state, where the state is only acting as a nominal party.); compare Com. of Pa. v. Mid-Atlantic Toyota Distributors, 704 F.2d 125 (4th Cir. 1983)(a state can have a legitimate public interest in ensuring the economic well-being of its citizens and in indirectly promoting a smoothly functioning economy freed of antitrust violations even though the most obvious beneficiaries may be individual consumers who ultimately recoup money damages).

 

Read how the complaint describes the damage inflicted:

 This suit arises out of the NCAA and its member institutions’ arbitrary and capricious application of their enforcement power for the purpose of crippling Penn State football, thereby harming citizens of the Commonwealth who benefit from a successful football program at Penn State, among them citizens who earn income by working in the stadium on game days; the shop owners whose small businesses generate significant revenue from the sale of Penn State memorabilia; the students who help pay tuition by waiting tables filled with alumni and fans who patronize restaurants and bars before and after games; the hotel owners and employees whose jobs depend on the continued influx of tourists to central Pennsylvania; and the Penn State swimmers and other athletes whose programs are largely funded by football revenue.

Those are not, to my mind, quasi-governmental claims. They are merely the claims of the citizens of Pennsylvania and, worse, they’re all third-party claims.

 

Third, there’s the problem of the antitrust claim itself: courts rarely allow third-parties can bring antitrust claims. The Commonwealth of Pennsylvania and its citizens are, at best, third parties to the agreement between the NCAA and PSU, and the Supreme Court made clear that third parties usually don’t have standing to bring antitrust claims. In Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), the Supreme Court held that only direct purchasers have standing under Section 4 of the Clayton Act. That rule is frequently enforced. In 2011, for example, the Third Circuit (the federal appellate court with jurisdiction over Pennsylvania) held that a hospital that purchases certain pharmaceutical products from a wholesaler middleman doesn’t have standing to bring an illegal tying claim under federal law against the manufacturer of the pharmaceutical drugs. Warren Gen. Hosp. v. Amgen Inc., 643 F. 3d 77 (3d Cir., 2011).

 

Fourth, antitrust cases are increasingly difficult to win, and courts have generally sided with the NCAA on issues relating to sanctions. Assuming there’s standing, the merits of antitrust claims are open to debate, and if Penn State had not agreed to the sanctions, then Penn State might have a viable antitrust claim. Deadspin analyzed the issue thoroughly back in July, and thought it was possible. That case would by no means be easy. Sure, in NCAA v. Bd. of Regents, 468 U.S. 85 (1984), the Supreme Court held the NCAA was subject to antitrust laws when it came to television broadcast rights, and right now there’s a on-going antitrust suit against the NCAA for prohibiting student athletes from licensing their own likenesses, but there’s a huge difference between the broadcast/licensing issues in those cases and the sanctions at issue here.

 

Initially, in Nat’l Collegiate Athletic Ass’n v. Tarkanian, 488, U.S. 179 (1988), the Court held that the NCAA did not have to comply with due process when issuing sanctions. Moreover, thanks to big shifts in the political composition of the federal courts, courts are far more hostile to antitrust claims today than they were in the past; Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), for example, encouraged District Courts to speculate about detailed economics issues to find a way to dismiss antitrust cases. Antitrust cases including many that I believe are meritorious are routinely dashed against the shoals of Twombly, and Corbett’s case may suffer the same fate, i.e., dismissal before any discovery takes place.

 

Just a few months ago in Agnew v. NCAA, 683 F.3d 328, 347 (7th Cir. 2012) the Seventh Circuit dismissed a case brought by college football players alleging the NCAA’s restrictions on scholarships violated antitrust laws. Indeed, as the Seventh Circuit said about the NCAA v. Board of Regents case:

 

Board of Regents implies that the Sherman Act does apply to NCAA regulations, but most regulations will be a “justifiable means of fostering competition among amateur athletic teams,” and are therefore procompetitive. 468 U.S. at 117, 104 S.Ct. 2948. In fact, the Supreme Court seemed to create a presumption in favor of certain NCAA rules …

 

So the odds would be against PSU, but they could give it the old college try. The problem for Corbett, though, is that he’s not PSU, and he’s not even the Attorney General.

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  • MB

    Interesting, thorough analysis in this post. I’ll have to think about it more, but this feels like a political ploy (using taxpayer money) to improve the governor’s low approval ratings.

    • http://www.litigationandtrial.com/ Max Kennerly

      Probably.

      • http://www.facebook.com/john.bluto.7 John Bluto

        Whether Tom Corbett is doing this for personal political reasons or not is irrelevant. The majority of the points outlined in the lawsuit have merit. The fact is that the NCAA issued severe punishments not consistant with their own policies and by-laws. They used an extremely flawed document (Freeh Report) as justification of their penalties and (allegedly) threatened more severe penalties if Penn State tried to have the NCAA follow its normal processes. They also did not wait for all criminal trials to be completed to see if the speculation contained in the Freeh Report was even close to being correct and if Gary Schultz, Tim Curley, and Graham Spanier were guilty of the charges against them. How can anyone reasonably argue that the NCAA’s actions are not WRONG and HARMFUL to many people in Pennsylvania? In the interest of fairness, truth, and justice (I know that these have little meaning to most lawyers), this case needs to be heard in a court of law, not decided by the big-story-driven media and the mis-informed general public.

        • http://www.litigationandtrial.com/ Max Kennerly

          You might be entirely right as a factual matter – but under the law, the only party with a viable antitrust claim is PSU, and it has agreed with the punishment. The case is unlikely to do anything to benefit anyone except Governor Corbett.

        • MB

          I’m in PA, and I don’t think the NCAA’s actions were particularly “wrong” or “harmful” in light of the injustice they were trying to address. PSU’s actions were extremely harmful to many people (or have you forgotten that?) by covering up Sandusky’s actions–a cover-up that was tied directly to the pernicious influence of football culture. PSU’s football team will bounce back much sooner than any of Sandusky’s victims will recover.

          Corbett’s case is weak, even if there are reasonable arguments to make, and I question whether it’s worth taxpayer money to fuel what is more likely a political stunt than a legitimate case.

  • http://morgandrexen.com/ Jennifer Hamlin

    Mark Scolforo from the the Huffinton Post also questions Tom Corbett motives for persuing this case against the NCAA he reports “The deal with the NCAA has been unpopular with many fans, students and alumni (of Penn State). Corbett, who is up for re-election next year, deflected a question about whether his response has helped or hurt him politically….”We’re not going to get into the politics of this,” he said.”
    Later in the article Mark Scolforo begins to make another excellent point; “Michael Boni, a lawyer for one of Sandusky’s accusers, said he does not consider the lawsuit an affront. But he said he hopes Corbett takes a leading role in pushing for changes to state child-abuse laws….”I really question who he’s concerned about in this state,” Boni said. Michael Desmond, a businessman who appeared with Corbett at the news conference, said business at his five State College eating establishments was down about 10 percent during Penn State home game weekends this year….”The governor’s actions are going to be immensely popular with all Penn State alumni,” Desmond said.”

    It does seem that Tom Corbett is awfully consumed in the unjustice that occured at a monetary level and does not seemed concerned with the injustice that occured on an emotional level.
    http://www.huffingtonpost.com/2013/01/02/tom-corbett-ncaa_n_2397486.html

    • http://www.litigationandtrial.com/ Max Kennerly

      Indeed, and it’s curious what he considers the greatest injustice — not that children were abused, and not even that one of his state’s largest school has had its reputation tarnished on a national level, but that Penn State has temporarily lost some money. I’m sure he’ll be happy to help PSU fight the size of the payments to the victims, too. It’s all about priorities.

    • http://twitter.com/wensilver wendy silverwood

      To piggyback on this..Corbett’s presser on campus was rather strange. He immediately left the room without taking questions to the ire of the reporters. This entire saga still begs the overarching issue of our Commonwealth approving a child molester as an adoptive & foster parent. It does not answer how our Commonwealth continued to license & audit a children’s charity that allowed a child molester unfettered, unauthorized, individual access to minors from that charity. That’s a crime that needs to be addressed – and now!

  • Rob

    Nice to see someone do some actual legal analysis on this issue. However, the suit was filed under §16 of the Clayton Act rather §4 . The distinction makes a difference.

    Per 23 A.L.R. Fed. 878: “A parens patriae action under § 16 of the Clayton Act (15 U.S.C.A. § 26 ), which provides for injunctive relief against antitrust violations, can be maintained by a state on the basis of injury to the state’s general economy. It has been pointed out that § 16 of the Clayton Act is notably different from § 4 of the Clayton Act, and does not include the “business or property” requirement found in § 4 . Unlike standing under § 4, standing under § 16 does not require an injury to commercial interests, but requires only an injury cognizable in equity. Recognizing the striking contrast between the potential impact of suits for injunctive relief and that of suits for damages, courts have not exercised the same pronounced restraint in granting standing under § 16 as they have in granting standing under § 4.”

    I think the state can show an injury to its general economy which is a quasi-sovereign issue. I’m not sure whether the incoming attorney general could pull the plug, but the statute you cite relates to § 4 and monetary damages. Most § 16 cases simply refer to the “the State.”

    • http://www.litigationandtrial.com/ Max Kennerly

      Darn, somebody asked the question. I debated going into the injunctive relief issue, but declined given the length of the post. I still think this is better viewed as a stealth Section 4 claim rather than a Section 16 claim, and I think a court will see it similarly. (Also, the AG issue still matters here for PA-specific issues.)
      You are correct they went under Section 16, rather than Section 4. Section 16 doesn’t require the attorney general (then again, Section 16 is also nominally limited to “private parties,” but we’ll put that aside), but an analysis of Section 16’s limits requires looking to Section 4. Let me block quote a case from the D.C. District:

      “The Illinois Brick holding that indirect purchasers do not have standing under the Clayton Act rested on two considerations: first, that the addition of indirect purchasers to the litany of possible antitrust plaintiffs threatened to mire courts in unduly complicated and speculative damages proceedings; and second, that permitting indirect purchasers to sue creates a ‘serious risk of multiple liability for defendants.’ Illinois Brick, 431 U.S. at 730. Although the Court’s concern for the complexity of the damages proceeding is not implicated by a disgorgement action, permitting disgorgement does raise the specter of duplicative recoveries. Under the Clayton Act, private parties (including the States) can already pursue direct purchaser actions for treble damages under § 4. 15 U.S.C. § 15. In addition, the States have a cause of action for treble damages under § 4c of the Clayton Act as parens patriae on behalf of natural persons. Id. § 15c. Permitting disgorgement under § 16 would provide yet another route to defendants’ allegedly ill-gotten gains, and would therefore heighten the possibility that defendants in antitrust actions could be exposed to multiple liability. While disgorgement would have the additional benefit of permitting the States to compensate indirect purchasers who are excluded from recovery under current law, the Supreme Court weighed this interest against the threat of duplicative recovery and determined that only direct purchasers have standing under the Clayton Act. See Illinois Brick, 431 U.S. at 741; see also Hawaii v. Standard Oil, 405 U.S. 251, 264, 31 L. Ed. 2d 184, 92 S. Ct. 885 (1972) (expressing unwillingness to ‘open the door to duplicative recoveries’). The States should not be allowed to circumvent Illinois Brick through a novel interpretation of § 16. Accordingly, the Court will grant defendants’ motion to dismiss insofar as the States seek disgorgement and/or restitution under § 16.”

      FTC v. Mylan Labs., Inc., 62 F. Supp. 2d 25, 41–42 (D.D.C. 1999).

      The key line is “The States should not be allowed to circumvent Illinois Brick through a novel interpretation of § 16.” Here, that’s part of what the Corbett administration is trying to do with a vague claim of economic injury: shoe-horn PSU’s antitrust claim into claims by indirectly injured third-parties, which claims are themselves shoe-horned into a claimed quasi-sovereign interest. The Corbett suit is thus nothing more than a third-party private damages claim on behalf of third parties — the very thing Section 4 would cover, and which has been held to not permit them to do. You can’t backdoor a losing Section 4 damages claim by dressing it up as a Section 16 injunction.
      Thus, I think that, even under Section 16, Pennsylvania still has a major quasi-sovereignty problem given the limited impact of the NCAA sanctions; the complaint itself is stuck conceding that the impact is not state wide, and is largely restricted to third parties that arguably benefit from a robust PSU football program. Further, the nature of the injunctive itself is not quasi-sovereign, and frankly isn’t even within the realm of normal equity: they want to stop a single agreed-upon transaction between private parties, rather than a continuing practice in the state.

      • rob

        There’s no need to look at § 4 in this case. The key is monetary damages vs. injunctive relief. Corbett requested injunctive relief to stop an ongoing action that is harming third parties (citizens). Corbett didn’t make a monetary claim for damages, disgorgement, or anything else. The rationale for why the courts treat § 4 and § 16 differently is that with monetary claims, there is the potential risk that defendants in antitrust suits could be exposed to paying monetary damages twice (i.e., once to the state and once to private parties) and the amounts of those monetary damages are speculative once you start getting indirect parties. There is no such risk here given that Corbet is not attempting to recover monetary damages. Without some money grab there’s no backdoor of § 4.

        As to the relief, the University’s and its football program is a major economic engine for central PA. While it is impact not state wide, it is certainly not limited to small number of business. Stopping a transaction between private parties that serves to unreasonably harm a sizable portion of the general public is exactly the type of equitable remedy that is envisioned by anti-trust laws.

        • http://www.litigationandtrial.com/ Max Kennerly

          Here, the complaint alleges in the preamble a “violation of Section 1 of the Sherman Act, 15 U.S.C. § 1.” That’s, of course, a combination / restraint of trade claim, not a monopoly claim, and it puts us squarely within the rationale of Illinois Brick, a Section 1 claim. Illinois Brick rejects indirect injury claims.
          According to the Complaint, paragraph 63, “The actions by the NCAA, its member institutions, and specifically the institutions represented on the NCAA’s executive committee and board of directors, in threatening Penn State with the football ‘death penalty’ and forcing Penn State into accepting the consent decree, constitute concerted action within the meaning of Section 1 of the Sherman Act, 15 U.S.C. § 1.”
          Based on those allegations, would Penn State have a claim? Perhaps — but Penn State isn’t the plaintiff, and Penn State agreed to the supposed harm. Everyone else in Pennsylvania is, at the very most, an indirectly injured third-party, the very sort of people who do not have any claims under Section 1 of the Sherman Act.
          As a general matter, you are right that “Stopping a transaction between private parties that serves to unreasonably harm a sizable portion of the general public is exactly the type of equitable remedy that is envisioned by anti-trust laws” — but only where the private parties are the alleged violators of antitrust laws. Here, the only party with a cognizable Section 1 of the Sherman Act claim (PSU) has agreed to the transaction. Under Illinois Brick, no one else has a claim.
          Whether you use Section 4 or Section 16 of the Clayton Act is not the issue: the claim still has to show a violation of Section 1 of the Sherman Act, which these plaintiffs cannot. Even the individuals could not sustain their claim, and the state is one stepped removed from them.

        • Rob

          How does this case fall squarely into Illinois Brick’s rationale? The rationale of Illinois Brick was that they would not allow indirect purchasers to recover monetary damages from the offending party because 1) the offending party may have to pay twice (e.g.,once to direct purchaser and once to indirect) and 2) its hard to calculate such damages (i.e., how can you tell how much of the damage was passed on). Here the state is not attempting to recovery any funds so neither rationale of Illinois Brick applies.

          There’s no case law that says Illinois Brick applies to actions that only seek injunctions. Under your interpretation, If farmers conspire to artificially increase the price of eggs in PA, the state couldn’t bring suit to to stop the illegal action if the grocery stores voluntarily agreed to the price? The general public just has to get screwed indefinitely because they are an indirect purchaser? I don’t think that’s what the law is.

          The state certainly has cognizable claim, so long as the it can prove that NCAA violated Section 1 of the Sherman Act through its sanctions against Penn State and the sanctions are impacting the state economy.

          It’s been a good debate. I doubt we’ll see the answer to this since I think it will survive a preliminary MTD for lack of standing and will then settle. Since this is your home turf, I’ll leave you with the last word.

        • http://www.litigationandtrial.com/ Max Kennerly

          We agree to disagree. Under your rationale, there’s no limits whatsoever to what a private party may enjoin under the veil of antitrust law — bear in mind, while Section 4 is specific to states, Section 16 is not. Under your reading, anyone, from the hotdog vendors outside the PSU stadium to hotels miles away, can object every time the think a deal was the result of improper bargaining power. Considering that the federal courts have been on the warpath against antitrust law for decades, and considering that the courts have repeatedly rejected third-party claims by anyone (including by governmental entities, like in the FTC case I cited in a prior comment), I don’t think that’s correct.
          It’s been fun. I’ve revised the post a little bit to avoid the Section 4 issue in the main text, and leave it to anyone venturing down here.

  • John

    A deal is only a deal when it is a deal. There are a lot of legal questions surrounding the consent decree.

    1. Did Rod Erickson have the legal authority to sign it? The University Charter, By-Laws and the Boards standing orders indicate he didn’t.

    2. Did the Board of Trustees violate their legal obligation to review and challenge Freeh’s conclusions and the NCAA’s sanctions? Absolutely not.

    As for the sanctions, the courts have not generally sided with the plaintiffs. In fact, the only precedent that I know of favors the plaintiffs, assuming they have standing.

    • http://www.litigationandtrial.com/ Max Kennerly

      I think you made a couple word choice errors. If not, then I am very confused.