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Ninth Circuit rejects Oakland lawsuit over Raiders’ move to Las Vegas

Oakland argued NFL rules unfairly limit the number of teams to drive up the amount of taxpayer money cities must contribute to build athletic stadiums for teams that make hundreds of millions of dollars in profit each year.

SAN FRANCISCO (CN) — A Ninth Circuit panel on Thursday upheld the dismissal of Oakland’s lawsuit over the Raiders’ 2017 move to Las Vegas, finding the city’s theories about the National Football League’s “anticompetitive” rules were too speculative.

Oakland sued the NFL and the Raiders in December 2018, arguing the league and its teams act as a “cartel” that bully local governments into paying exorbitant costs for sports stadiums that would never occur in a truly competitive market.

In a 34-page opinion published Thursday, a three-judge Ninth Circuit panel endorsed a lower court’s ruling that the city failed to show the league’s relocation rules and 32-team structure are anticompetitive.

The panel spelled out multiple problems with the city’s lawsuit. It rejected Oakland’s group-boycott theory after surmising that only one team, the Raiders, actually refused to deal with the city. Oakland had argued that nearly all teams supported the boycott when they voted 31-1 to approve Raiders’ move to Las Vegas in 2017, but the panel drew a distinction between voting to support a boycott and actually engaging in one.

“Collective action in support of an individual boycott is not the same as a group boycott,” Senior U.S. Circuit Judge Wallace Tashima, a Bill Clinton appointee, wrote for the panel.

Because Oakland did not suffer a direct injury, such as paying an artificially inflated price to keep the Raiders in town, Tashima said the city would have a harder time showing the league’s rules and structure caused it harm. A city like Las Vegas that, according to Oakland's theory, paid an artificially higher price to attract the team could more easily demonstrate injury, he said.

Unable to show a direct injury from overpaying, Oakland instead relied on speculation of what may have occurred in a theoretical and undefined “competitive marketplace" with different NFL rules, Tashima wrote.

“We do not know whether the city would have retained an NFL team, whether that team would have been the Raiders or another team, where that team would have played, or what price the city would have paid for the privilege of having an NFL team,” Tashima wrote. “Because we do not know whether the city would have retained the Raiders, we cannot know whether it would have avoided the harm it alleges.”

Even if the city could establish harm, Tashima agreed with the lower court’s finding that calculating damages from lost investment value, tax revenues and devaluation of the Oakland Coliseum would be “exceedingly difficult.”

“In light of the indirectness of the city’s injuries, the existence of more direct victims, the speculative measure of harm, and the difficulty in calculating damages, we are persuaded that the city lacks antitrust standing to pursue its horizontal price-fixing theory,” Tashima wrote.

U.S. District Judge Douglas Rayes, a Barack Obama appointee sitting on the panel by designation from the District of Arizona, joined Tashima in the majority opinion.

In a partly concurring opinion, U.S. Circuit Judge Patrick Bumatay, a Donald Trump appointee, agreed with his colleagues on the group-boycott issue, but he argued the price-fixing claim premised on the NFL’s relocation and team-entry rules should have been dismissed for lack of standing.

He wrote that the city’s loss of the Raiders was “too remote and conjectural” to be traced to the league’s rules, and that the city failed to explain how another set of hypothetical rules would have led to a different outcome.

“The majority fumbles the standing analysis on the price-fixing claim,” Bumatay wrote. “I would hold that this claim is too speculative to satisfy the threshold of constitutional standing and so must be benched even before kickoff.”

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 Davis announced the team would move to Las Vegas, where the state of Nevada committed $750 million toward the construction of a new stadium. Construction of the $1.9 billion, 65,000-seat Allegiant Stadium was completed in July 2020. The first regular-season home game with fans was held at Allegiant Stadium on Sept. 14 this year.

Oakland is currently in negotiations to build a $12 billion waterfront ballpark and mixed-use development for the Oakland A’s baseball team, which is currently considering a move to Las Vegas. City leaders, including Oakland Mayor Libby Schaaf, have expressed their desire to keep the A’s in town after the city lost its football team and its basketball team, the Golden State Warriors, which moved to San Francisco in 2019.

In an emailed statement, Oakland City Attorney Barbara Parker said her office was not happy with the ruling and would continue to review it before deciding its next steps.

"We are disappointed with the Ninth Circuit’s decision," Parker said. "Nevertheless, we will continue to fight to protect the rights of the city of Oakland and of all Oaklanders in every context, including a thorough evaluation of the ruling on the issues and assessing our options in the lawsuit.”

The Las Vegas Raiders, the NFL and the league’s attorney Daniel Asimow, of Arnold & Porter in San Francisco, did not immediately return emails requesting comment Thursday.

Categories:Appeals, Sports

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