Sixth Circuit Affirms Dismissal Of Aspiring NBA Player Agent’s Suit Alleging NBPA And NBA Conspired To Prevent Him From Becoming An Agent
01/18/2023On December 30, 2022, the United States Court of Appeals for the Sixth Circuit unanimously affirmed the district court’s dismissal of an aspiring National Basketball Association (NBA) player agent’s suit against the National Basketball Players Association (NBPA) and the NBA. Rosel C. Hurley III v. National Basketball Players Association, et al., No. 22-3038 (6th Cir. Dec. 30, 2022). Plaintiff alleged that the NBPA and NBA conspired to exclude him from the marketplace for NBA player agents. The Sixth Circuit affirmed the district court’s dismissal, because it viewed the NBPA and NBA’s alleged actions as exempt from antitrust scrutiny under both the statutory and non-statutory labor exemptions to the Sherman Act.
Plaintiff alleged that the NBPA and the NBA engaged in conspiratorial conduct when they rescinded their approval for plaintiff to take an online exam that he was required to pass to become a certified player agent. In his application to take the exam, plaintiff disclosed that he had his law license suspended by the Ohio Supreme Court. Although the NBPA initially permitted him to take the exam, it allegedly rescinded the approval citing plaintiff’s disciplinary history. Plaintiff sued arguing “[d]efendants’ actions … would cause a reasonable person to believe that the [NBPA was] acting in concert with and at the behest of a non-labor member or group, [the NBA,] in order to ensure [plaintiff’s] exclusion from the marketplace the [d]efendants completely control.” The district court dismissed this complaint as “[i]t viewed the NBPA’s alleged actions as statutorily exempted from the Sherman Act, and the NBA’s purported actions as nonstatutorily exempted from the same.”
The Sixth Circuit agreed with the district court and unanimously affirmed. Writing for the panel, Judge Chad A. Readler wrote that the case “boil[ed] down to one issue: whether [plaintiff] proffered viable Sherman Act claims.” Accepting all plaintiff’s well-pleaded allegations as true, the panel held that “[b]asic principles of antitrust law foreclose [plaintiff’s] claims.” The panel noted that although the Sherman Act prohibits monopolizing or unreasonably restraining trade, the Act does have exceptions. One actor broadly exempted from the Act’s prohibitions are labor unions, and, as an extension of that, collective bargaining agreements between unions and their business actor counterparts. To overcome this exception, plaintiff would need to plausibly allege that the collective bargaining agreement itself was not conducted in self-interested ways.
Plaintiff failed to plausibly allege facts to state that claim. The Court noted that although the exception “has not been extended to situations where unions are aiding non-labor groups to create business monopolies and control the marketing of goods,” plaintiff failed to allege that is what occurred. Plaintiff’s only assertion to this end was that “a reasonable person would assume” the NBPA’s recission was a result of the NBPA and NBA conspiring to restrain trade. The Court held that it “need not credit this conclusory statement as true” and that “it would not make sense to do so” given the policy generally favoring collective bargaining and free competition in business markets. Ultimately, the bargained agreement between the NBPA and NBA was protected from plaintiff’s claims, even if he could have identified anticompetitive consequences arising from the agreement.CATEGORIES: Antitrust Immunity, Exclusionary Conduct, Sherman Act § 1