Raiders Prevail in Lawsuit Against City of Oakland
U.S. Magistrate Judge Joseph C. Spero granted the Oakland Raiders, the NFL, and 31 other NFL teams their motion to dismiss a lawsuit from the City of Oakland on Thursday. In a 30-page order, Judge Spero found that a city cannot recover damages based on tax revenue from the “broad scope of economic activity associated with the presence of a professional football team.” The Raiders previously claimed the City of Oakland could “lose significant tax and other income” associated with the Raiders’ pending move to Las Vegas. The Raiders claimed the NFL and its teams violated the league’s collectively bargained policies as well as antitrust laws.
“As an additional complicating factor, neither Oakland’s complaint nor its opposition brief address what sort of structure Oakland believes would be permissible if the current limitation on the number of teams is not,” he said. “Do the antitrust laws require the NFL to admit any team interested in joining? If not, what number would be an allowable limit, and would Oakland have fared differently if the limit had been set at that number?”
On July 19, 2019, the U.S. government intervened with the lawsuit when the Assistant Attorney General, Makam Delrahim, head of the U.S. Department of Justice Antitrust Division, and David L. Anderson, the U.S. attorney for the Northern District of California, filed a statement of interest urging the California federal court to toss any claims seeking damages for lost tax revenue. Specifically, they argued that “. . . tax injuries are not cognizable . . .” under federal antitrust laws.
“To find otherwise would entitle a government entity to threefold recovery rights for lost tax revenues, on top of the private damages incurred by the market participants, any time anticompetitive effects occurred in its jurisdiction,” the government argued. “The threat of such liability will have the effect of over-deterring, inducing entities to minimize risk by curtailing otherwise pro-competitive behavior.”
The statement by the federal government relied on 28 U.S. Code Section 517, which states that, “[t]he Solicitor General, or any officer of the Department of Justice, may be sent by the Attorney General to any State or district in the United States to attend the interests of the United States in a suit pending in a court of the United States, or in a court of a state . . . .”
The City of Oakland stated that the California federal court “should ignore the U.S. government’s contention that the City of Oakland (“City”) should not be allowed to base its antitrust claims contesting the Oakland Raiders’ pending relocation to Las Vegas on lost tax revenue,” according to its objection and response to the interest. The federal government has no legal connection to Oakland’s suit against the Raiders and the NFL. The city also added that the Statement of Interest signed by Delrahim and Anderson came late, was irrelevant, and said nothing new, according to Law360.
However, attorneys for the federal government stated in response, “under the DOJ’s theory, the United States could appear and express an ‘interest’ in any case pending in any court in this country so long as a single issue about federal law was involved.”
The Raiders are in the process of building a new stadium near the famous Las Vegas Strip, which they intend to open by the beginning of the 2020 NFL season.