## Facts

- The Los Angeles Memorial Coliseum Commission (LAMCC) operated the Los Angeles Memorial Coliseum and sought an NFL tenant after the Los Angeles Rams moved their home games from the Coliseum to Anaheim in 1978.
- LAMCC pursued an expansion team but was told by the NFL Commissioner that expansion was not then available, and it then pursued relocation of an existing team to Los Angeles.
- The NFL Constitution’s Article IV, Rule 4.3 required league approval (unanimous at the relevant time) for a club to relocate into another club’s “home territory,” defined to include a 75-mile radius from the incumbent club’s city.
- Because Los Angeles remained within the Rams’ home territory, Rule 4.3 effectively gave existing owners a veto over any club’s move to Los Angeles.
- The Oakland Raiders’ lease in Oakland expired, and the Raiders negotiated to relocate to Los Angeles and play at the Coliseum.
- NFL owners voted to deny the Raiders’ proposed relocation, and the Raiders joined LAMCC’s suit as a cross-claimant alleging an unlawful restraint of trade under Sherman Act § 1.
- After a bifurcated jury trial on liability and damages, the liability jury found that the NFL and its member clubs could conspire under § 1 and that Rule 4.3, as applied, unreasonably restrained trade under the rule of reason.

## Issues

1. Whether the NFL and its separately owned member clubs constitute a “single entity” incapable of conspiring under Sherman Act § 1.
2. Whether the league’s franchise relocation approval rule should be evaluated under per se rules or under the rule of reason.
3. Whether the evidence supported the jury’s findings on relevant market, market power, and anticompetitive effects from enforcing Rule 4.3 against relocation to Los Angeles.
4. Whether the NFL’s asserted business justifications rendered Rule 4.3 reasonable as applied.

## Decision

- The Ninth Circuit affirmed the district court’s liability judgment for LAMCC and the Raiders.
- The court held the NFL was not a single entity for § 1 purposes; independently owned clubs with distinct economic interests are capable of concerted action.
- The court held Rule 4.3 was properly analyzed under the rule of reason and upheld the jury’s determination that the rule, as enforced, was an unreasonable restraint of trade.
- The court concluded the record permitted findings of a relevant market and substantial anticompetitive effects and that the NFL’s justifications did not require reversal of the jury’s unreasonableness finding.

## Legal Principles

- Separately owned professional sports teams that do not generally pool profits and may have divergent economic interests can constitute a “combination” capable of conspiring under Sherman Act § 1.
- League rules restricting franchise relocation are not categorically exempt from antitrust scrutiny; their legality turns on rule-of-reason analysis focused on competitive effects and justifications.
- Under the rule of reason, a restraint is unlawful when its anticompetitive effects outweigh legitimate, competitively beneficial purposes, considering the restraint’s scope and application.
- Evidence of league control over the supply and placement of major-league teams, coupled with territorial exclusivity and relocation veto mechanisms, can support findings of market power and anticompetitive foreclosure in markets for major-league professional football and team location.

## Conclusion

The Ninth Circuit affirmed Sherman Act § 1 liability, holding that the NFL’s member clubs could conspire and that the league’s relocation approval rule, as applied to block the Raiders’ move to Los Angeles, could reasonably be found by the jury to impose an unreasonable restraint of trade under the rule of reason.


Los Angeles Mem’l Coliseum Comm’n v. Nat’l Football League, 726 F.2d 1381 (9th Cir. 1984)