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Covington Secures Victory for NFL in Seventh Circuit

8/19/2008

WASHINGTON, DC, August 19, 2008 — The U.S. Court of Appeals for the Seventh Circuit on August 18 affirmed an unprecedented antitrust ruling granting the NFL member clubs summary judgment on the ground that they constitute a “single entity” whose decisions are essentially immune from challenge under Section 1 of the Sherman Antitrust Act.

Covington & Burling LLP represented the NFL and its member clubs throughout the case, American Needle, Inc., v. National Football League, which involves the collective licensing of the NFL clubs’ intellectual property.

Section 1 of the Sherman Act bars unreasonable agreements in restraint. For decades, professional sports leagues have sought to defend antitrust claims brought under Section 1 on the ground that their member clubs function as a single entity incapable of making an agreement under the statutory standard. The district court decision in American Needle marked the first time that a sports league had successfully defended an antitrust case by securing a single entity ruling.

The unanimous affirmance from the Seventh Circuit held that “nothing in § 1 prohibits the NFL teams from cooperating so the league can compete against other entertainment providers. Indeed, antitrust law encourages cooperation inside a business organization -- such as, in this case, a professional sports league -- to foster competition between that organization and its competitors.”

Covington’s litigation group chair Gregg Levy argued the case before the Seventh Circuit. He was assisted on the briefs by associates Derek Ludwin and Leah Pogoriler. All are resident in the firm’s Washington office.

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