Posted by Social Science Research Network
How Not to Apply the Rule of Reason: The O’Bannon Case Michael A. Carrier (Rutgers University)
Abstract: The case of NCAA v. O’Bannon has received significant attention. Straddling the intersection of antitrust, intellectual property, and sports law, the case presents engaging and complex issues. Much of the complexity, however, is unnecessary. For it stems from a Ninth Circuit ruling that misconstrued antitrust law. In particular, the court applied a version of the Rule of Reason that short-circuited the analysis and insufficiently deferred to a district court judge who presided over an exhaustive trial on amateurism.
Based on my review of more than 700 Rule-of-Reason cases in the modern era, the first section of this essay highlights courts’ analyses based on “less restrictive alternatives” and a four-stage burden-shifting framework. Second, it highlights three errors with the Ninth Circuit’s application of the Rule of Reason: inappropriately holding that the plaintiff’s failure to prove a less restrictive alternative resulted in the plaintiff losing the case, misconstruing the scope of the justification to which the alternative would be applied, and eliminating the balancing stage of the analysis. The final section emphasizes the court’s error in substituting its conception of amateurism for that of the lower court.
The essay concludes that the Ninth Circuit’s ruling striking down the $5,000 payment for the use of student-athletes’ names, images, and likenesses should be overturned for a fuller balancing of anticompetitive and procompetitive effects.
