University of Miami Law School Institutional Repository University of Miami Business Law Review 7-1-2004 With the First Pick in the 2004 NFL Draft, the San Diego Chargers Select... ?: A Rule of Reason Analysis of What the National Football League Should Have Argued in Regards to a Challenge of Its Special Draft liE gibility Rules under Section 1 of the Sherman Act Justin Mann Ganderson Follow this and additional works at: http://repository.law.miami.edu/umblr Part of the Law Commons Recommended Citation Justin Mann Ganderson, With the First Pick in the 2004 NFL Draft, ht e San Diego Chargers Select... ?: A Rule of Reason Analysis of What the National Football League Should Have Argued in Regards to a Challenge of Its Special Draft lE igibility Rules under Section 1 of the Sherman Act, 12 U. Miami Bus. L. Rev. 1 (2004) Available at: http://repository.law.miami.edu/umblr/vol12/iss1/2 This Article is brought to you for free and open access by Institutional Repository. It has been accepted for inclusion in University of Miami Business Law Review by an authorized administrator of Institutional Repository. For more information, please contact [email protected]. WITH THE FIRST PICK IN THE 2004 NFL DRAFT, THE SAN DIEGO CHARGERS SELECT... ?: A RULE OF REASON ANALYSIS OF WHAT THE NATIONAL FOOTBALL LEAGUE SHOULD HAVE ARGUED IN REGARDS TO A CHALLENGE OF ITS SPECIAL DRAFT ELIGIBILITY RULES UNDER SECTION 1 OF THE SHERMAN ACT JUSTIN MANN GANDERSON* I. FIRST ROUND-INTRODUCTION ................ 2 II. SECOND ROUND-HISTORY AND BACKGROUND OF THE NFL AND THE NFL DRAFT ................. 4 A. A Brief Overview of the NFL ................... 4 B. A Brief Overview of the NFL Draft .............. 7 III. THIRD ROUND-BACKGROUND OF SECTION 1 OF THE SHERMAN ACT ................................ 9 IV. FOURTH ROUND-SECTION 1 OF THE SHERMAN ACT AND THE NFL's SPECIAL DRAFT ELIGIBILITY R U LES ....................................... 12 A. PriorApplication of the Rule of Reason and the Per Se Rule in Sports Leagues' Antitrust Lawsuits .... 12 B. Rule ofReason Analysis of the NFL's Best Argumentsfor Upholding Its Special Draft Eligibility Rules ........ 13 1. PRIOR DRAFT ANALYSIS-SMITH V. PRO FOOTBALL, INC.......................... 14 2. CURTAILING ANALOGIES TO SMITH V. PRO FOOTBALL, INC.......................... 16 3. THE EFFICIENCY REVIEW FRAMEWORK FOR THE RULE OF REASON ....................... 18 4. THE EFFICIENCY ARGUMENTS FOR THE NFL's SPECIAL DRAFT ELIGIBILITY RULES ......... 19 5. THREE-YEAR THRESHOLD AS NON-ARBITRARY 30 V. FIFTH ROUND-CONCLUSIONS ................. 32 CandidateJ.D., University of Miami School of Law, 2005; A.B., American Studies, Cornell University. The author would like to thank the following people for aid, guidance, and support (in no particular order): my Dad (Martin J. Ganderson, Esq.), my Mom, Matt, my Grandparents, Amy, Alan C. Swan, Professor of Law, University of Miami School of Law, The UNIVERSITYOF MIAMI BUSINESS LAW REVIEW Executive and Editorial Boards (especially Deborah A. Ciuffreda and Alice Meyer), Erna Stoddart, Bill Arnsparger, Rich Mercier, Rob Chudzinski, DougWalker, Tom Howley, Bernie DePalma, my former head football coaches Gene Boley (Maury High School) and Peter Mangurian (Cornell University) and their respective coachingstaffs, members ofthe University of Miami (Fla.) football team who were interviewed during the writing of this article, various National Football League clubs, the National Football League Players' Association, and the National Football League. Go 'Canes! 2 UNIVERSITY OF MIAMI BUSINESS LAW REVIEW [Vol. 12:1 This article was completed before the United States Court of Appeals for the Second Circuit rendered its decision in Clarett v. National Football League.1 At the time that this article was completed, the United States Court of Appeals had not reached a decision regarding the Clarett case. Accord- ingly, this article does not comment on any of the court proceedings that occurred after the initial United States District Court decision in Clarett,or any possible future decisions regarding this case.2 This article only uses the framework of the United States District Court decision in Clarett to comment on what the National Football League should have argued so that its Special Draft Eligibility Rules could pass antitrust scrutiny. I. FIRST ROUND-INTRODUCTION Maurice Clarett was one of the best National Collegiate Athletic Association (NCAA) Division I-A college football players in the country during the 2002 season. As a true freshman3 at Ohio State University, Clarett led his team to the 2002 NCAA Division I-A National Football Championship, and rushed for 1237 yards and sixteen touchdowns during the regular season.4 In fact, Clarett had better statistics in his freshman year than former Ohio State and NFL star running backs Archie Griffin, Robert Smith, and Eddie George." Accordingly, Clarett may be destined for stardom in the National Football League (NFL), despite not playing college football during his sophomore year due to NCAA violations. 1 No. 03-CV-7441, 2004 U.S. Dist. LEXIS 1396 (S.D.N.Y Feb. 5,2004), stay denied, 2004 U.S. Dist. LEXIS 1768 (S.D.N.Y. Feb. 11, 2004), application denied, 2004 U.S. LEXIS 3231 (Apr. 22, 2004). 2 See id. 3 Acollege student athlete is a true freshman when he or she plays in varsity level athletic games during his or her first year at the college. Clarett's performance as a true freshman is significant because many football players are redshirted their freshman years to allow for further development. Generally, when a player is redshirted, he or she is allowed to practice with the team, but is not allowed to play in any games during the season. 4 See ESPN.com News Services, Larry Fitzgerald, available at http://sports.espn.go.comncf/player/profile?playerld= 134936 (last visited Apr. 4,2004). Followingthe 2002 college football season, Clarctt was "named to several 2003 preseason All-America teams, voted the [number one] running back in college football by the Sporting News, named a first-team All-Big Ten pick, and was named Big Ten Freshman of the Year." Complaint at 23, Clarett v. Nat'l Football League, Inc., 2004 U.S. Dist. LEXIS 1396 (S.D.N.Y 2003) (No. 03-CV-7441). 5 See Bruce Feldman, Clarett's Debut One of the Best in Buckeye History (Aug. 24, 2003), available at http.//espn.go.com/ncf/s/2002/0824/1422378.html. 2004] WITH THE FIRST PICK IN THE 2004 NFL DRAFT 3 Although Clarett, weighing 230 pounds and standing six feet tall,6 seems to be the prototypical player that the NFL desires,7 this student-athlete will not have the opportunity to participate in the NFL during the 2004 season per the NFL's Special Draft Eligibility Rules.8 The Special Draft Eligibility Rules allow players to enter the draft only after "three full college seasons have elapsed since their high school graduations." 9 As a result of this rule, Clarett filed a Complaint against the NFL in the United States District Court for the Southern District of New York.'0 Among his many claims, Clarett alleges that the NFL's Special Draft Eligibility Rules violate Section 1 of the Sherman Act" because the Rules constitute an unlawful restraint of competition. On February 5, 2004, United States District Court Judge Shira A. Scheindlin agreed with Clarett that the Special Draft Eligibility Rules violate "the antitrust laws... [and] cannot preclude Clarett's eligibility for the 2004 NFL draft." 12 In holding that Clarett is now eligible for the draft, Judge Scheindlin rejected the NFL's four arguments in favor of its Special Draft Eligibility Rules under the Rule of Reason. 3 This article will not examine 6 Clarett, 2004 U.S. Dist. LEXIS 1396, stay denied, 2004 U.S. Dist. LEXIS 1768 (S.D.N.Y. Feb. 11, 2004), application denied, 2004 U.S. LEXIS 3231 (Apr. 22, 2004). 7 See id. (noting that Clarett "is taller and heavier than some of the NFL's all-time greatest running backs, includingWalter Payton (5'10", 200), Barry Sanders (5'8", 203) and Emmitt Smith (5'9", 207)"). 8 Note that the author refers to the draft rules found in CONST. AND BYLAWS FOR THE NAT'L FOOTBALL LEAGUE app. 1990-4 (2003) as the Special Draft Eligibility Rules. 9 CONST. AND BYLAWS FOR THE NAT'L FOOTBALL LEAGUE app. 1990-4 (1) (2003). See also CONST. AND BYLAWS FOR THE NAT'L FOOTBALL LEAGUE art. XII, §12.1(A) (2003). The player must petition the NFL by completing the NFL's Special Draft Eligibility form. This form is not difficult to complete. In fact, the author completed the form and successfully petitioned the NFL in 2001 to enter the 2001 draft after his junior season at Cornell University where he was a punter. Furthermore, it should be noted college players who choose to enter the NFL draft early pursuant to the Special Draft Eligibility Rules "must include in his application an irrevocable renunciation of any further college football eligibility." CONST. AND BYLAWS FOR THE NAT'L FOOTBALL LEAGUE app. 1990-4(3) (2003). This renouncement of eligibility rule is necessary for the NFL to run efficiently, as it ensures that the Draft will continue to function. For example, ifa player was allowed to enter the Draft each season and then return to college if he did not like the club which drafted him, then he would eventually become an undrafted rookie free agent. NFL COLLECTIVE BARGAINING AGREEMENT art. XVI, SS 9, 11 (2002) (note that this CBA is in effect from 2002-2008). If every player did this process, then the draft would be obsolete, as most players would desire to be free agents. This would then create a chaotic and inefficient bidding market for player services.