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Cardozo Journal of Conflict Resolution

Abstract

During his seventeen-year tenure as Commissioner of the National Football League (NFL), Roger Goodell never testified at trial. However, that changed when a class of plaintiffs sued the NFL for antitrust violations, alleging the League artificially inflated the cost of its viewership package—NFL Sunday Ticket—and thereby harmed consumers. NFL Sunday Ticket is described as a “premium sports package” that allows fans to watch out-of-market games they otherwise would not be able to view in their current market. This David and Goliath moment was a chance to discipline the pricing of one of the most popular television products in the United States.

At first, the beast was slain when the jury found for the plaintiffs, but their success was short-lived as Judge Philip Gutierrez overturned the $4.7 billion verdict. While the plaintiffs’ appeal advances through the Ninth Circuit, the NFL made sure not to fall victim to fans who contest paying up to $739.99 annually to watch their team on television. Prudently, the League guarded against future consumer class action lawsuits by amending its terms of service to include class action waivers and mandatory arbitration agreements. So today, if the same class of plaintiffs wanted to sue the NFL for violations of the same antitrust laws, they would be forced into arbitration and barred from forming a class.

This shrewd business maneuver is not only legal but highlights an area of law desperately needing reform. Contemporary antitrust enforcement strives for aggressive and reaching policies to protect consumers, but class waivers within arbitration agreements force putative plaintiffs to make pursuit of their claims a “fool’s errand.” Thus, these practices by corporations further insulate defendants from liability and complicate mechanisms of plaintiff redress. The tensions animating this issue are borne out in AT&T Mobility LLC v. Concepcion and American Express Co. v. Italian Colors Restaurant. In Concepcion, the Court refused to let a state law barring class action waivers within arbitration agreements preempt the Federal Arbitration Act (FAA). Meaning, the FAA beats any state laws preventing class action waivers within arbitration agreements. Similarly, the dissent in Italian Colors characterized the majority’s holding as further whittling away plaintiffs’ rights by holding that a lack of economic feasibility is insufficient to invalidate an arbitration agreement under the effective vindication doctrine. Put together, these holdings offer little respite for future plaintiffs who would wish to sue the NFL in court as a class. This Note intends to help with that problem.

I first describe the Sunday Ticket saga. My account of Sunday Ticket is designed to ground readers’ understanding of the stakes of this issue. Too often, bad policy is neglected out of boredom or disinterest; I hope to change that. Then, I offer a brief discussion of contemporary antitrust objectives, and how former Federal Trade Commission chair Lina Khan understands arbitration agreements and class waivers to be detrimental to wealth distribution. After that, I outline the caselaw which colors the landscape of arbitration agreements and class actions waivers in antitrust law. I then discuss how class plaintiffs have crafted offensive maneuvers to defeat companies’ ploy to evade liability, and defendants’ response to this tactic, colloquially known as a “Reverse Default Judgment.” The final portion of the Note details a solution to the Reverse Default Judgment issue.

Disciplines

Antitrust and Trade Regulation | Consumer Protection Law | Dispute Resolution and Arbitration | Entertainment, Arts, and Sports Law | Law

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