Among other deficiencies in the city of Oakland’s suit, the judge found a $378 million relocation fee the Raiders paid could be seen as an obstacle to moving that favors existing host cities.
SAN FRANCISCO (CN) — The National Football League defeated an antitrust suit Thursday brought by the city of Oakland over the Raiders’ 2017 decision to move from Oakland to Las Vegas.
U.S. Magistrate Judge Joseph Spero found the city failed to show the NFL’s relocation rules and 32-team structure are anticompetitive. He dismissed the antitrust claims with prejudice.
Oakland sued the NFL and the Raiders in December 2018, arguing the league and its teams act as a “cartel” that bullies local governments into paying exorbitant costs for sports stadiums that would never occur in a truly competitive market.
The judge rejected Oakland’s claim that an NFL-required relocation fee benefits the league and its teams as part of a “classic price-fixing scheme.” The Raiders paid a $378 million relocation fee to move to Las Vegas in 2017. Spero found the fee actually serves as an obstacle to relocation that favors existing host cities.
“The relocation fee tended to protect Oakland’s interests against other cities that might seek to attract the Raiders away,” Spero wrote.
He also refused to accept claims that the league’s 32-team limit is anticompetitive. He found the city failed to explain what a truly competitive structure would look like and whether that preferred system would have deterred the Raiders from leaving Oakland.
“In that hypothetical world, what would prevent Las Vegas from offering a more attractive deal, as in fact occurred,” Spero asked.
Based on Oakland’s arguments, Spero concluded the city does not appear to have a problem with the league’s 32-team structure but rather with the NFL’s decision to approve the Raiders’ move to Las Vegas.
“It would seem that Oakland simply wishes it could have kept one of those teams for itself, and benefited from the prestige and economic windfall that derive from that scarcity, without paying the supracompetitive price that also arises from it,” Spero wrote.
Even if Oakland could advance its antitrust claim, Spero found it would not be entitled to damages because no losses alleged in its lawsuit are recoverable under antitrust law.
The city claimed it lost investment value, tax revenue and rental income from the Raiders’ sublease of the Oakland Coliseum, as well as devaluation of the Coliseum property. Spero concluded antitrust law only permits damages based on “commercial interests,” not taxes derived from economic activity.
He also found Oakland’s status as an “indirect landlord” sharing the Coliseum with Alameda County bars it from suing over lost stadium revenue.
With the antitrust claims tossed, Spero found he no longer has jurisdiction to review Oakland’s state law claims of breach of contract and unjust enrichment. He dismissed those claims without prejudice, allowing Oakland to potentially refile litigation on those claims in state court.
The Raiders were based in Oakland, where the franchise started, from 1960 to 1982 and returned to Oakland in 1994 after a 12-year stint in Los Angeles.
The Raiders had been pushing for a new stadium in Oakland since 2008 to replace the Coliseum, which was built in 1966. In December 2016, the city pledged $350 million toward a new $1.3 billion stadium, along with $400 million coming from an investor group and $500 million from the Raiders.
In January 2017, Raiders owner Mark Davies announced the team would move to Las Vegas, where the state of Nevada committed $750 million toward the construction of a new stadium. The $1.9 billion, 65,000-seat stadium in Las Vegas is still under construction.
Erin Bernstein, a supervising deputy city attorney for the city of Oakland, said the city has no comment at this time.
NFL attorney Daniel Asimow, of Arnold & Porter in San Francisco, did not immediately return an email requesting comment.