Sullivan v. Tagliabue

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 93-2153

CHARLES W. SULLIVAN,

Plaintiff, Appellant,

v.

PAUL TAGLIABUE, ET AL.,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Edward F. Harrington, U.S. District Judge]

Before

Breyer,* Chief Judge,

Coffin, Senior Circuit Judge,

and Torruella, Circuit Judge.

Joseph L. Alioto with whom Angela M. Alioto, Frederick P. Furth,

Bruce J. Wecker, Michael P. Lehmann and Alan R. Hoffman were on brief

for appellant.
John Vanderstar with whom Sonya D. Winner, Ethan M. Posner,

Jeremiah T. O'Sullivan, Sarah Chapin Columbia, Joseph W. Cotchett and

Susan Illston were on brief for appellees.

June 6, 1994

*Chief Judge Stephen Breyer heard oral argument in this matter but did
not participate in the drafting or the issuance of the panel's
opinion. The remaining two panelists therefore issue this opinion
pursuant to 28 U.S.C. 46(d).

COFFIN, Senior Circuit Judge. Plaintiff Charles Sullivan

brought this action individually and as assignee of the assets of

Stadium Management Corporation (SMC) challenging, as an illegal

restraint in trade, a National Football League (NFL) Rule

prohibiting the sale of shares in an NFL franchise to any company

not engaged in the business of professional football, in

violation of Sections 1 and 2 of the Sherman Act.1 See 15

U.S.C. 1, 2. The district court held that plaintiff lacked

standing to bring this claim and granted summary judgment for

defendants.2 After a review of the record, we affirm.

1Sullivan also alleged supplemental state law claims of breach of
fiduciary obligations, interference with prospective advantageous
contract, unfair trade practices, and intentional infliction of
emotional distress. When the district court granted summary
judgment on the federal antitrust claims, it declined to exercise
supplemental jurisdiction over the state law claims. See

Sullivan v. Tagliabue, 828 F. Supp. 114, 120 n.6 (D. Mass. 1993).

2Defendants named in this action are the NFL, current NFL
Commissioner Paul Tagliabue and his predecessor Pete Rozelle.
Paragraph 7 of the complaint also names the following 21
organizations owning NFL franchises: The Five Smiths, Inc.:
Indianapolis Colts, Inc.; Buffalo Bills, Inc.; Chicago Bears
Football Club, Inc.; Cincinnati Bengals, Inc.; Cleveland Browns,
Inc.; Dallas Cowboys Football Club, Ltd.; PDB Sports, Ltd.; The
Detroit Lions, Inc.; Green Bay Packers, Inc.; Houston Oilers,
Inc.; Los Angeles Rams Football Co.; Minnesota Vikings Football
Club, Inc.; New Orleans Saints LP; New York Jets Football Club,
Inc.; B & B Holdings, Inc.; Pittsburgh Steelers, Inc.; Tampa Bay
Area NFL Football, Inc.; Pro-Football, Inc.; Chargers Football
Co.; and Seattle Professional Football Club, Inc.
The caption of plaintiff's complaint names a slightly
different set of defendants. It fails to include either the Los
Angeles Rams Football Co. or the Charges Football Co. as
defendants, and adds the New York Football Giants, Inc. to the
list.

-2-

I. Factual Background.

Charles Sullivan (plaintiff or Sullivan) is the former

owner and sole stockholder of SMC, which owned the stadium where

the New England Patriots play their games. His father, William

Sullivan, was the Patriots' owner at all relevant times.

In 1987, William Sullivan sought to sell a 49% interest in

the Patriots to an investment banking firm not in the business of

football, which, in turn, was to sell the shares to the public.

Through this transaction, plaintiff, through SMC, expected to

obtain financing for his stadium.

Under the terms of the NFL Constitution and By-Laws, member

teams are not permitted to sell shares to the public unless

three-fourths of the members approve. William Sullivan was

unable to persuade the other NFL owners to allow his proposed

deal, and in October 1988, he instead sold the team to a private

buyer. In February 1988, SMC filed a Chapter 11 petition in

bankruptcy, and the stadium subsequently was sold for the

"bargain basement price" of $25 million.

In May 1991, William Sullivan sued the NFL, alleging that

its policy against public ownership violated the federal

antitrust laws because it unreasonably restrained trade in

ownership interests in NFL teams.3 Charles Sullivan filed this

lawsuit several months later against the NFL and other parties

3On October 22, 1993, a jury awarded William Sullivan $38
million, which was reduced by the district court upon motion by
the defendants to $17 million, before trebling. The NFL
defendants have appealed this verdict.

-3-

allegedly responsible for enforcing the challenged rule. He

claims that, had the public offering of Patriots' stock been

permitted, SMC would have received a $40 million dollar loan from

the investment banking firm that would have been used to pay off

debts and to make significant renovations to the stadium. In

addition, in 1987, the stadium held a lease with the Patriots

which extended until 2002, which Sullivan alleges would have been

extended for 20 years had the sale of the Patriots stock gone

through. Finally, he claims, the NFL policy prevented the

Patriots from making their own investment in the maintenance of

the stadium, thus undermining SMC's ability to keep the Patriots

from breaking their lease with SMC and moving to another

location.4

As damages, plaintiff claims the amount of the enhanced

market value of the stadium that would have resulted from the

planned renovations and the lease extension.

4During the bankruptcy proceedings, plaintiff received an
assignment of all SMC's causes of action in consideration of the
release of claims against SMC by plaintiff.
The NFL argues that Sullivan, as SMC's assignee, is
precluded from pursuing its antitrust claims against the NFL
defendants because SMC did not disclose these claims during the
course of the bankruptcy proceedings. They contend that, at
least by October, 1990, when he entered into a stipulation with
the bankruptcy trustee resolving claims by and against him,
Sullivan was fully aware of all of the facts upon which his
complaint is based and that his antitrust claims should have been
raised in the bankruptcy proceedings. In their view, SMC is
therefore estopped from bringing a legal action to enforce the
claims against the NFL defendants.
For the purposes of this decision, we assume, without
deciding, that SMC is not estopped from bringing a legal action
to enforce these claims.

-4-

The district court granted summary judgment for defendants,

holding that Sullivan lacked antitrust standing. The court

reached this conclusion by determining that the materials

submitted indisputably showed that the injury plaintiff suffered

was not within the type contemplated by the antitrust laws; that

its impact was too indirect; and that the damages claimed were

too speculative. Plaintiff now appeals.

Our review of a grant of summary judgment is plenary.

Mendes v. Medtronic, Inc., 18 F.3d 13, 15 (1st Cir. 1994).

II. General Principles of Antitrust Standing

Sullivan asserts that under Section 4 of the Clayton Act, 15

U.S.C. 15(a) (1994), he has standing both individually and on

behalf of SMC to maintain a private damage action against the

NFL. Under Section 4, "[A]ny person who shall be injured in his

business or property by reason of anything forbidden in the

antitrust laws may sue therefor in any district court of the

United States in the district in which the defendant resides or

is found . . . without respect to the amount in controversy, and

shall recover threefold the damages by him sustained, and the

cost of the suit, including a reasonable attorney's fee."5

This statutory language is broad, conferring the right to

sue on "any person" claiming an injury causally related to an

5It is unquestioned that the requirements of antitrust standing
exceed those of standing in a constitutional sense. See

Associated General Contractors, Inc. v. California State Council

of Carpenters, 459 U.S. 519, 535 n.31 (1977); see also Daniel

Berger & Roger Bernstein, An Analytical Framework for Antitrust

Standing, 86 Yale L.J. 809, 813 n.11 (1977).

-5-

antitrust injury. However, the class of persons entitled to

recover damages under Section 4 has been limited by caselaw

through the doctrine of "antitrust standing." See Associated

General Contractors of California, Inc. v. California State

Council of Carpenters, 459 U.S. 519, 529-35 (1983); Blue Shield

of Virginia v. McCready, 457 U.S. 465, 472-73 (1982).

In Associated General Contractors, the Supreme Court

outlined a series of factors to be evaluated on a case-by-case

basis to determine whether a plaintiff has standing to bring an

antitrust action.6 These factors are: (1) the causal connection

between the alleged antitrust violation and harm to the

plaintiff; (2) an improper motive; (3) the nature of the

plaintiff's alleged injury and whether the injury was of a type

that Congress sought to redress with the antitrust laws

("antitrust injury"); (4) the directness with which the alleged

market restraint caused the asserted injury; (5) the speculative

6Prior to Associated General Contractors, circuit courts had

crafted a variety of tests to determine whether a party injured
by an antitrust violation had standing to bring an action for
treble damages under Section 4 of the Clayton Act. The two most
commonly stated tests focused on the "directness of the injury"
to the alleged antitrust violation, and whether a plaintiff was
in the "target area" of the antitrust conspiracy. See Associated

General Contractors, 459 U.S. at 535-36 & n.33 (citations

omitted); Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law,

334.1 (1993 Supp.). A third test considered whether the injury
was "`arguably within the zone of interests protected by the
antitrust laws.'" Associated General Contractors, 459 U.S. at

536 n.33 (citation omitted). In Associated General Contractors,

the Court, noting that it was "virtually impossible to announce a
black-letter rule that will dictate the result in every case,"
459 U.S. at 536, drew on these tests to outline a series of
factors to guide courts in deciding whether a private plaintiff
should have standing to pursue an antitrust action in a
particular case. See id. at 536-46.

-6-

nature of the damages; and (6) the risk of duplicative recovery

or complex apportionment of damages. 459 U.S. at 537-45; See

also Lovett v. General Motors Corp., 975 F.2d 518, 520 (8th Cir.

1992) (listing factors).

Though Associated General Contractors outlined a

comprehensive approach to the question of antitrust standing, it

gives little guidance as to how to weigh the various factors, and

whether the absence of a particular factor would be fatal to

standing in every instance. In Associated General Contractors

itself, the Court found that two factors, the causal connection

between the Union's alleged injuries and the violation of the

antitrust laws, and the allegation of improper motive, supported

a grant of standing, 459 U.S. at 537, but that a consideration of

the remaining relevant factors weighed heavily against standing,

id. at 545. The Court concluded that, in the circumstances of

that case, these latter factors were controlling, and denied

standing to the plaintiffs. Id. at 545-46.

We draw from the Court's discussion in Associated General

Contractors the requirement that courts consider the balance of

factors in each case in an effort to guard against "engraft[ing]

artificial limitations on the 4 remedy." McCready, 457 U.S. at

472. See also Los Angeles Memorial Coliseum v. NFL, 791 F.2d,

1356, 1363 (9th Cir. 1986) ("Most cases will find some factors

tending in favor of standing . . . , and some against . . . , and

a court may find standing if the balance of factors so

instructs."); accord Southaven Land Co. v. Malone & Hyde, Inc.,

-7-

715 F.2d 1079, 1085-86 (6th Cir. 1983); Ashmore v. Northeast

Petroleum Corp. of Cape Cod, 843 F. Supp. 759, 765 (D. Me. 1994).

III. Application to Claims Brought on Behalf of SMC

A. Factors Supporting Standing

Sullivan argues that the district court was correct when,

evaluating the relevant factors as they applied to claims brought

on behalf of SMC, it found that plaintiff had alleged, and

presented evidence of, a causal connection between the alleged

antitrust violation and the harm to the plaintiff, and an

improper motive on the part of defendants; and when it found no

significant risk of duplicate recoveries or danger of complex

apportionment in this case. He maintains, however, that the

court erred in its determination that the absence of the

remaining Associated General Contractors factors required the

court to deny standing. He contends that he has satisfied the

remaining factors, and that the court should have granted him

standing to press his antitrust suit, both individually and on

behalf of SMC.

We agree that the district court correctly found that

Sullivan's complaint met three of the Associated General

Contractors factors. Sullivan alleged, and presented evidence,

of a causal connection between the application of the NFL Rule

and SMC's inability to refinance the stadium because the sale of

Patriots' stock to the public was prohibited. Sullivan also

alleged an improper motive on the part of defendants in that they

"sought to restrain and monopolize interstate commerce in

-8-

professional football" and took the actions they did in

furtherance of that goal. In addition, Sullivan indicated that

defendants intended to block the refinancing of the stadium by

their actions, or, at the very least, that such a harm was a

foreseeable consequence of the application of the Rule to the

Patriots.7 Nor does there appear to be a significant risk of

duplicate recovery or danger of complex apportionment in this

case, as the injuries of which Sullivan complains are

sufficiently distinct from those alleged by William Sullivan, the

only other plausible litigant in this case.8

B. Factors Defeating Standing

We are not persuaded, however, by Sullivan's argument that

he satisfies the remaining Associated General Contractors'

factors. The existence of antitrust injury is a central factor

in the standing calculus.9 In this case, its absence, together

7Of course, as the Supreme Court has noted, the presence of an
improper motive on the part of the defendants is not, by itself,
determinative of antitrust standing. See Associated General

Contractors, 519 U.S. at 537 & n.37 (noting that "[t]he

availability of the 4 remedy to some person who claims its
benefit is not a question of the specific intent of the
conspirators") (quoting McCready, 457 U.S. at 479).

8We recognize that there is a risk of duplicate recovery and
complex apportionment of damages as between Sullivan, in his
individual capacity, and SMC, in light of their seemingly
overlapping injuries. We think that this can be avoided,
however, given that plaintiff brings this single action for
damages suffered by both.

9Some courts have concluded that a consideration of antitrust
injury is of threshold significance in the Section 4 standing
inquiry. See, e.g., Balaklaw v. Lovell, 14 F.3d 793, 797-98 &

n.9 (2d Cir. 1994); Todorov v. DCH Healthcare Authority, 921 F.2d

1438, 1449 (11th Cir. 1991); see also State of South Dakota v.

-9-

with the indirectness of the injury to Sullivan, and the

speculative nature of the claimed damages, outweighs the

remaining factors. We therefore conclude that plaintiff lacks

standing to pursue the claims brought on behalf of SMC.

1. The Nature of the Injury: Is it Antitrust Injury?

Sullivan contends that he has suffered "antitrust injury,"

that is, the type of injury that the antitrust laws were designed

to prevent. He relies principally on McCready, 457 U.S. at 465,

and Los Angeles Coliseum, 791 F.2d at 1356, to support this

claim.

The Supreme Court first articulated the concept of

"antitrust injury" in Brunswick Corp. v. Pueblo Bowl-O-Mat, 429

U.S. 477 (1977). In Brunswick, several small bowling centers

brought suit, challenging the acquisition of several of their

competitors by the much larger Brunswick Corporation as an

anticompetitive merger under Section 7 of the Clayton Act, 15

U.S.C. 18, and seeking treble damages under Section 4 for

Kansas City Southern Industries, 880 F.2d 40, 46 (8th Cir. 1989)

(noting primacy of antitrust injury requirement). Cf. Cargill,

Inc. v. Montfort of Colorado, Inc., 479 U.S. 104, 110, n.5 (1986)

(pointing out, in the course of considering antitrust injury
requirement for private plaintiffs seeking an injunction under
Section 16 of the Clayton Act, that a showing of antitrust injury
was a necessary (though not always sufficient) element of
standing to sue for damages under Section 4).
We agree that the absence of antitrust injury weighs heavily
against a grant of standing. We need not consider, however,
whether this should be fatal to standing in every instance,
because in the circumstances of this case, we conclude that the
balance of factors as a whole weighs against a grant of standing.

-10-

profits they would have made had the acquired centers gone out of

business. Id. at 480-81.

Although plaintiffs had alleged that Brunswick had engaged

in predatory practices designed to lessen competition in the

markets it had entered, they could prove only that Brunswick's

acquisitions had deprived them of profits they would have made

had the acquired firms closed. Id. at 488, 490 & nn.15, 16. The

Court noted that, in essence, plaintiffs were not complaining

that Brunswick's actions had reduced competition, but preserved

it, thereby depriving plaintiffs of the benefits of increased

concentration. Id. at 488. Rejecting the lower court's holding

that any loss "causally linked" to "the mere presence of the

violator in the market" was compensable, id. at 486-87, the Court

found that plaintiffs' injury was not of "`the type the

[antitrust laws] were intended to forestall,'" 429 U.S. at 487-88

(citation omitted). The Court held that to recover treble

damages under Section 4, a plaintiff must prove "antitrust

injury, which is to say injury of the type the antitrust laws

were intended to prevent and that flows from that which makes

defendants' acts unlawful." Id. at 489 (emphasis in original).

In Blue Shield of Virginia v. McCready, 457 U.S. 465 (1982),

the first case explicitly to address antitrust standing, the

Court incorporated a focus on "antitrust injury" into its Section

4 standing inquiry. The plaintiff in McCready was a subscriber

of Blue Shield, a health insurance plan that did not provide

reimbursement for psychotherapy treatment rendered by

-11-

psychologists (unless "prescribed" by and billed through a

medical doctor), while providing reimbursement for the same

treatment if given by a psychiatrist. McCready was treated by a

psychologist, and Blue Shield refused to reimburse her for this

treatment. McCready brought suit, alleging that Blue Shield and

an association of psychiatrists had engaged in an unlawful

conspiracy "`to exclude and boycott clinical psychologists from

receiving compensation under'" the Blue Shield plans, and that

Blue Shield's failure to reimburse was in furtherance of this

conspiracy. McCready, 457 U.S. at 470.

The defendants argued that McCready had not suffered

"antitrust injury" because her injury did not reflect the anti-

competitive effect of the alleged antitrust violation. Id. at

481-82. McCready had not paid inflated fees for psychotherapy to

psychiatrists, the supposed beneficiaries of the conspiracy; nor

had she alleged that her psychologists' bills were higher than

they would have been had the conspiracy not existed. Id. at 481.

The Court, however, refused to so limit recovery. While not

a competitor of the conspirators, the injury McCready suffered --

sanction in the form of the unreimbursed psychologists' services

-- "was inextricably intertwined with the injury the conspirators

sought to inflict" on the market. Id. at 483-84. McCready

suffered injury by virtue of the role she played in Blue Shield's

anticompetitive scheme. Denying reimbursement to patients of

psychologists was the "very means" by which Blue Shield coerced

-12-

her to choose between becoming an unwilling participant in its

illegal campaign to boycott the services of psychologists, or to

pay the costs of treatment for the therapist of her choice from

her own pocket. The harm to McCready was thus a "necessary step

in effecting the ends of the alleged illegal conspiracy." Id. at

479. The Court therefore found that McCready's injury "`flow[ed]

from that which makes defendants' acts unlawful,' within the

meaning of Brunswick," falling "squarely within the area of

congressional concern." Id. at 484.

Sullivan argues that the logic of McCready supports his

standing. In Sullivan's view, the NFL rule at issue affected

competition in the market for football stadia by preventing SMC

from obtaining refinancing to pay for renovations that would have

led the Patriots to extend their lease, and by interfering with

the Patriots' capacity to invest money in the maintenance of

their stadium, thus undermining SMC's ability to keep the

Patriots from breaking their lease with SMC and moving to another

location. Further, the injury to SMC was "inextricably

intertwined" with that to the owner of the New England Patriots,

since SMC expected to benefit from a joint proposal to conduct a

public offering of a minority ownership in the team; and was an

"integral aspect" of the conspiracy against the owner of the

Patriots and was likely to result from the implementation of that

conspiracy.

Like McCready, Sullivan claims, neither the fact that SMC

stood in a vertical relationship to the intended victim of the

-13-

alleged antitrust violation (purchasers of NFL franchises), nor

the fact that SMC's injuries might be characterized as "indirect"

deprive SMC of standing. Likewise, Sullivan's failure to show an

increase in price or a lessening of supply in the stadia market,

and the fact that Sullivan's personal losses might be derivative

of those suffered by SMC are not dispositive. Sullivan points

out that McCready's losses, for example, were at least in part

derivative of those suffered by her employer, who as the direct

purchaser of the group health insurance from Blue Shield,

presumably did not get the benefit of its bargain with Blue

Shield.

We disagree that McCready favors Sullivan's right to sue.

Sullivan is correct that McCready did stand, in part, for the

Court's refusal to limit recovery to those whose injuries result

from the anti-competitive effect of the violation, and to extend

available recovery at least to some parties who stand in vertical

relationship (such as customers) to the direct victim of an

antitrust violation.10 Thus, the fact that SMC was not a

competitor in the market for professional football teams, the

direct victim of the alleged antitrust violation, but in the

related market for football stadia, does not by itself mean that

10In this respect, we disagree with defendants' argument that
SMC, merely by virtue of its status as the Patriots' landlord, is
necessarily barred from bringing suit for injury to its tenant.
Whether a landlord has standing to sue for injury to its tenant
depends, in part, on the relationship of the landlord to the
relevant market and to the antitrust violation. For example, a
landlord may have standing to sue for injuries to a tenant based
on its status as a competitor in an adjacent market, see Los

Angeles Coliseum, 791 F.2d at 1363-65.

-14-

he lacks standing here. See McCready at 472 (refusing to engraft

artificial constraints on Section 4, stating that "`the statute

does not confine its protection to consumers, or to purchasers,

or to competitors, or to sellers'") (internal citation omitted).

The circuits are split, however, over the question of

whether a plaintiff must be either a consumer or competitor in

the market harmed by the antitrust violation at issue in order to

establish antitrust injury. Some courts have held that a

plaintiff may establish antitrust injury by proof that he was a

consumer or competitor in the relevant market, or by showing that

his injury was "inextricably intertwined" with the injury to

competition, in that the plaintiff was "`manipulated or utilized

by [d]efendant as a fulcrum, conduit or market force to injure

competitors or participants in the relevant product and

geographic market.'" Province v. Cleveland Press Pub. Co., 787

F.2d 1047, 1052 (6th Cir. 1986) (quoting Southaven, 715 F.2d at

1086); see Ostrofe v. H.S. Crocker Co., Inc., 740 F.2d 739, 745-

46 (9th Cir. 1984) (though neither a consumer nor competitor in

the relevant market, fact that injury to plaintiff was a

necessary means to achieve the conspirators' illegal end

sufficient to establish antitrust injury); Ashmore v. Northeast

Petroleum Division of Cargill, 843 F. Supp. 759, 769-70 (same);

-15-

Donahue v. Pendleton Woolen Mills, 633 F. Supp. 1423, 1435-39

(S.D.N.Y. 1986) (following Ostrofe).11

Other courts have interpreted Supreme Court caselaw and the

antitrust laws more narrowly, holding that a plaintiff must be a

market participant in order to establish antitrust injury. See

Bichan v. Chemetron Corp., 681 F.2d 514, 519 (7th Cir. 1982)

(Section 4 protects only parties injured as customers or

competitors in a defined market, or in a discrete area of the

economy); see also Winther v. DEC International, Inc., 625 F.

Supp. 100, 102-03 (D. Colo. 1985). We need not resolve this

conflict, because even under a broad reading of McCready, SMC

cannot support its claim of antitrust injury.

Read broadly, McCready extends antitrust standing to parties

who can establish that their injury was a "necessary step" and

the "means" employed by the conspirators to achieve their illegal

ends, regardless of the parties' direct market participation.

See McCready, 457 U.S. at 479, 484 n.21; Ostrofe, 740 F.2d at

745-46; Ashmore, 843 F. Supp. at 768-70 & nn.16, 18. Unlike

McCready and her co-plaintiffs, neither Sullivan nor SMC were

"necessary" instruments to effectuate the alleged conspiracy.

Denying stadium refinancing was not a "necessary step" in

11These courts reason that the injury suffered by a plaintiff
used as a means to effect an antitrust violation is within the
core of Congressional concern underlying the antitrust laws,
which is "to create a private enforcement mechanism that would
deter violators and deprive them of the fruits of their illegal
actions and would provide ample compensation to the victims of
antitrust violations." Ashmore, 843 F. Supp. at 770 (quoting

McCready, 457 U.S. at 472); see also Ostrofe, 740 F.2d at 746-47.

-16-

restraining competition in the market for professional football

franchises, nor the "very means" by which the defendants sought

to do so. Indeed, according to plaintiff's own complaint, the

purpose of the NFL policy was to "exclude competitive entry into

the business of professional football by . . . television

companies, motion picture producers, investment bankers, owners

of other professional sports teams, home entertainment companies,

and entertainment companies generally." The policy is not

alleged to have a similar anticompetitive effect on stadia.

Moreover, the instruments of the alleged conspiracy were the NFL

and member club owners, not Sullivan or SMC.

Nor does the Ninth Circuit's holding in Los Angeles Coliseum

bolster Sullivan's claim that he suffered antitrust injury. In

that case, the Los Angeles Coliseum and the Oakland Raiders

attempted to negotiate a deal to relocate the Raiders to Los

Angeles to play in the Coliseum (the Rams' old home field),

following the Rams' move to Anaheim. In its effort to block this

move, the NFL invoked a league rule requiring three-fourths of

the member teams to approve a team's relocation into another

team's league territory. The Coliseum and the Raiders brought

suit, claiming that this was an unlawful restraint of trade, in

violation of Section 1 of the Sherman Act, 15 U.S.C. 1. A jury

found that the NFL rule violated the antitrust laws, and awarded

damages to both the Coliseum and the Raiders.

In holding that the Coliseum had standing to bring this

antitrust action, the court found that the Coliseum had suffered

-17-

"antitrust injury," because the NFL had "restrained competition .

. . among football stadia by restraining the Raiders['] attempt

to move and operate in Los Angeles." 791 F.2d at 1364 (emphasis

in original). Had the Raiders been permitted to move to Los

Angeles, the Coliseum would have been able to bid effectively to

have them as a tenant. The rule restraining such a move, the

court held, was precisely of the type that the antitrust laws

were designed to prevent. Id.

The rule at issue here posed no similar restraint on SMC's

capacity to compete for a pro football team's tenancy. In fact,

in 1987, the year of the attempted sale, SMC and the Patriots had

a lease that ran until the year 2002, regardless of the team's

ownership.

-18-

2. Directness of the Injury

Sullivan argues that SMC suffered direct harm as a result of

the NFL's restraints on the stadia market. He maintains that Los

Angeles Coliseum supports this claim, and compares SMC's status

to that of the Coliseum.

In Los Angeles Coliseum, the Coliseum had been engaged in a

bidding struggle with a rival stadium for the tenancy of the

Oakland Raiders when the NFL's invocation of its restrictive

relocation rule foreclosed further negotiations, thus depriving

the Coliseum of expected revenue for leasing the facility to the

Raiders for their games. 791 F.2d at 1365. The Ninth Circuit

concluded that the NFL's illegal territorial restraints directly

and foreseeably restrained competition in the stadia market, in

which the Coliseum participated, and that the harm it suffered

was a direct result of the NFL's illegal territorial restraints.

Id.

In an attempt to limit the reach of this holding, the court

stated that it was "confident that [this] ruling will not be

misinterpreted as being a broad endorsement of antitrust standing

for all parties who might have contracted with the Raiders had

they not been restrained in their relocation plans. Football

stadia constitute a special market distinguished from those

comprised by, say, hotels, laundering establishments, or

limousine services, by their indispensable and intimate

connection with professional football and football teams. An

injury such as that suffered by the Coliseum in the present case

-19-

cannot be characterized fairly as an indirect `ripple effect.'"

Id. at 1365.

Sullivan seems to argue that since SMC, like the Coliseum,

is a participant in the market for football stadia, it enjoys

similar distinguished status by virtue of its "indispensable and

intimate connection with professional football and football

teams," and should be able likewise to recover. The injury to

SMC, and its relation to the rule at issue in this case, are,

however, clearly distinguishable.

The rule at issue in Los Angeles Coliseum affected where a

team could be located. In precluding a team from relocating in a

particular area, the rule necessarily restrained competition in

the related market for football stadia. Once the NFL invoked its

rule to block the Raiders from moving into the Rams' territory,

the Coliseum (and, indeed, all other stadia in that location) was

barred from competing with other stadia for the Raiders' tenancy.

The rule at issue in this case had no similar direct effect

on SMC, nor on the market in which it was a participant.

Plaintiff claims that the NFL rule restricting public ownership

of NFL teams was the "but for" cause of the loss of his stadium,

injuring SMC as follows: the NFL rejected William Sullivan's plan

to sell 49% of his stock to an investment bank, which, in turn,

would sell the stock to the public; as a result, SMC did not get

refinancing; SMC therefore could not pay its debts, nor complete

renovations; SMC could not get an extension on its lease (which

was contingent on the sale of Patriots' stock), and was forced to

-20-

file for bankruptcy. We think that any injury suffered by SMC as

a result of the NFL rule was indirect, and a consequence of the

direct injury inflicted on the Patriots' owner.

In addition, the fact that William Sullivan, the party most

directly harmed by the alleged violation, has pursued (and

indeed, obtained a verdict in) his own antitrust action

diminishes another possible rationale for allowing Sullivan to

proceed in this case. See Associated General Contractors, 459

U.S. at 542 (existence of an identifiable class of persons whose

self-interest likely to motivate them to vindicate the public

interest in antitrust enforcement diminishes the justification

for allowing a more remote party to sue).12

3. Speculative Nature of the Damages

12Contrary to plaintiff's assertion, the district court's finding
that there was no significant risk of duplicative recoveries or
danger of complex apportionment of damages is not at odds with
its determination that the fact that William Sullivan was
pursuing his own antitrust action weighed against a grant of
standing. In considering the risk of duplicativeness and complex
apportionment of damages, courts are concerned with keeping
antitrust actions within judicially manageable limits by
curtailing litigation involving apportionment of damages among an
array of parties claiming injury. See Associated General

Contractors, 459 U.S. at 543-45 & nn.50-51; see also Southaven,

715 F.2d at 1087. In considering directness, courts are
concerned with the question of which among the affected parties
are most likely to be motivated to pursue an antitrust action.
While in the usual case, this would be those most directly
affected by the antitrust violation, in some cases, more remote
parties might be more likely to detect and pursue an antitrust
action. See Associated General Contractors, 459 U.S. at 542; see

also Ashmore, 843 F. Supp. at 766-67 (appropriate to grant

standing to employees discharged for refusal to implement
discriminatory pricing system, because purchasers, though
directly damaged by anticompetitive effect of violation, are
least likely to discover it).

-21-

The district court found that "[g]iven that an extended

chain of independent events would have had to have occurred to

give credence to the Plaintiff's damages claim on behalf of SMC,"

the damages claims were "at best, highly speculative." 828 F.

Supp. at 118. Sullivan claims that damages to SMC are measurable

in terms of the enhanced market value of the stadium which would

have resulted from the planned renovations, the extension of the

lease with the Patriots, and the potential for deals with

promoters for other entertainment and sports events. We think

that calculating these damages would "necessitate wide ranging

speculation," Southaven Land Co., 715 F.2d at 1088, about the

future value of a refinanced, renovated, debt-free stadium with a

new lease. Because the harm to SMC was indirect, and was caused,

in part, by independent intervening factors (notably, its prior

serious indebtedness, as well as its failure to secure additional

sources of commercial financing), we agree with the district

court that SMC's damages claims are "highly speculative," and are

an additional factor weighing against a grant of standing in this

case. See Associated General Contractors, 459 U.S. at 542

(finding that damages were speculative because injury was

indirect, and because it may have been produced by independent

intervening factors).

The Ninth Circuit's holding in Los Angeles Coliseum is not

to the contrary. In that case, the estimated damages claimed by

the Coliseum included claims for lost profits that would have

been earned had luxury stadium boxes been built in the Coliseum

-22-

and rented for the 1980 football season. 791 F.2d at 1366. The

court noted these estimates may have been unfounded due to lack

of proof of causation. Id. Nonetheless, the court upheld the

damages award, holding that even without considering the elements

in question (lost profits from would-have-been luxury boxes),

there was sufficient evidence, including attendance and seat

price estimates offered by the Raiders, to uphold the total award

of damages. Id.

Los Angeles Coliseum is distinguishable in several important

respects. As the Ninth Circuit found, the Coliseum suffered

direct harm as a result of the NFL's antitrust violation: but for

the NFL's interference in its negotiations with the Raiders, the

Coliseum likely would have secured their tenancy. Id. at 1365.

The damages suffered were therefore intimately connected with the

antitrust violation. Moreover, losses based on attendance and

ticket price estimates were the foreseeable result of these

damages, and are precisely the type of damages courts can

calculate easily. By contrast, the asserted harm here is

indirect, and likely the result, at least in part, of independent

intervening factors; nor is the enhanced market value of a

refinanced, renovated, debt-free stadium with a new lease easy to

calculate. It is the combination of these factors that leads us

to conclude that any damages to SMC as a result of the alleged

antitrust violation are highly speculative. See Associated

General Contractors, 459 U.S. at 542.

-23-

Having considered the relevant Associated General

Contractors' factors, we conclude that the balance in this case

weighs against a grant of standing. We therefore conclude that

Sullivan may not pursue an antitrust action on behalf of SMC.

IV. Application to Sullivan's Personal Damages Claims

Sullivan also claims that the NFL's restrictive rule

directly damaged him in his individual capacity, by charging him

with an array of expenses arising out of the SMC bankruptcy,

including the payment of legal and other professional fees

associated with the bankruptcy proceeding itself, lost

opportunity to purchase debt at a discounted rate, lost

compensation and benefits, and anguish and emotional distress.

In that, as the district court found, these damages "merely flow

from the alleged injuries to SMC," 828 F. Supp. at 120, they are

that much further removed from the injuries claimed on behalf of

SMC. We therefore conclude, consistent with our conclusion that

SMC did not suffer "antitrust injury," and that any damages

suffered were too indirect and speculative to sustain an action

on its behalf, that Sullivan likewise lacks standing to pursue an

antitrust action for damages suffered in his individual capacity.

The decision of the district court is AFFIRMED.

-24-