New judge hints Sunday Ticket lawsuit may not be dead yet

Just over a year ago, a federal court judge shockingly overturned a $4.7 billion jury verdict against the NFL, which could have been tripled under antitrust law. The jury found that the NFL had illegally colluded to restrain the distribution of its Sunday Ticket package. However, the judge ruled that the plaintiffs’ expert witnesses had improperly testified, and the jury had been confused in calculating the damages.

However, the case, now on appeal at the Ninth Circuit, received a significant boost today when the new judge overseeing it suggested that the plaintiffs had made a strong case that his predecessor, who retired shortly after the ruling, had overlooked a key line of argument.

The new judge, George H. Wu, might never get to the meat and potatoes of the case if the Ninth Circuit does not overturn Judge Philip Gutierrez’s original jury overrule.  

But if it does come back, the NFL will be on new terrain. Wu was ruling on a fairly minor matter: whether the plaintiffs, a collection of individuals and bars, had to pay the NFL $321,308.806 in court costs as the losing party (he stayed an earlier clerk’s order to pay the bill).

Because his ruling is based on the standard that such costs should be stayed if the appealing party has a “fair prospect” of success, he offered a strong opinion that the Sunday Ticket plaintiffs do. Whether it’s a message to the appeals court or not is unclear, but Judge Wu made his opinion known in the seven-page order.

“The undersigned judicial officer readily admits that he is coming into this matter quite late in the game and is nowhere near as familiar as counsel with the issues presented,” Judge Wu wrote in a footnote. “Consequently, a complete evaluation of the many matters in dispute was not attempted. However, one major issue in which the Court feels the Plaintiffs/Appellants have a `fair prospect’ of success is their contention that Judge Gutierrez erred by dismissing Plaintiffs’ injunctive relief claims without ever considering whether Plaintiffs could show `threatened loss or damage’ … In particular, this Court found particularly interesting the Amicus Brief on that topic filed by the United States.”

In his original overruling of the jury decision, Judge Gutierrez never entertained the plaintiffs’ request for injunctive relief. He ruled largely on the inadequacy of the expert witnesses and the alleged confusion of the jury. The plaintiffs argued they are continuing to be harmed by the NFL’s collusive practices (the jury’s damages were for past actions). It was on this issue that the Department of Justice, in the last days of the Biden administration, filed an amicus brief with the Ninth Circuit expressing concern that the plaintiff’s claims for injunctive relief were ignored. 

The plaintiffs never outlined what form the injunctive relief would take, but presumably it would bar the NFL from selling the out-of-market media rights for the 32 teams collectively. This has been the NFL’s approach since Sunday Ticket’s inception in 1994, and continues in the current deal with YouTube TV.

“In this case, a jury found—and the district court found sufficient evidence of—the primary elements of liability under Section 1 of the Sherman Act: concerted action that unreasonably restrained trade,” the DOJ amicus filing reads. “But the district court then applied an incorrect standard in dismissing Plaintiffs’ claims for injunctive relief, improperly curtailing access to an important tool for redressing anticompetitive harm and restoring competition.”

It’s unclear what the current DOJ thinks of the case. There is no filing on the docket from the Trump DOJ taking back the Biden amicus filing. And the antitrust space is one of the few areas in which the two administrations have not sharply diverged, so a new approach to the case may not be forthcoming.

Judge Wu’s role at the moment seems rather limited now that he has issued a stay on billing the plaintiffs for the NFL’s court costs. The sides are in briefing mode at the Ninth Circuit, which has not set an oral argument date. So it would be at the earliest, the middle of next year, that the case could get returned to Judge Wu, if that is how the appeals court rules. If that does happen, the NFL may once again face a major antitrust threat in the Sunday Ticket lawsuit.

Judge Gutierrez was nominated by George W. Bush, who also nominated Judge Wu. The case was briefly assigned to a different judge after Gutierrez retired, but it was weeks later transferred to Judge Wu.