Justice Kavanaugh and Sports Law: A Review and Preview

By Cameron Miller (Sandra Day O’Connor College of Law at ASU ’17)

Supreme Court Justice Brett Kavanaugh, a noted sports fan, served on the Circuit Court of Appeals for the District of Columbia for thirteen years before being nominated to the Supreme Court. During his tenure on the D.C. Circuit, numerous sports-related disputes came before then-Judge Kavanaugh; six of these cases and their significance are discussed here. Also reviewed are several potential and ongoing sports industry legal battles that could make their way to before Justice Kavanaugh and the Supreme Court in the near future.

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American Bus Ass’n v. Rogoff (2011)

In 2011, Judge Kavanaugh heard a challenge to Federal Transit Administration (FTA) rules governing charter bus service outside a public transportation system’s normal geographic bounds. American Bus Ass’n involved the King County Metro’s bus service to Seattle Mariners baseball games. This service was found to be in violation of the FTA’s rule (49 U.S.C. §  5323 (d)(1)) prohibiting a public transportation system from “provid[ing] charter bus transportation service outside the urban area in which [the system] provides regularly scheduled public transportation service.” In a subsequent Congressional appropriations bill, however, Washington senator Patty Murray inserted language that effectively prevented the FTA from enforcing the “Charter Rule” against the King County Metro. Private charter bus companies in the Seattle area, represented by the American Bus Association, sued—ostensibly because they would provide the charter bus service if a public option was not available). They claimed the legislation violated their First Amendment right to petition and Fifth Amendment right to equal protection. The trial court agreed, but the three judge appellate panel that included Judge Kavanaugh reversed in favor of the FTA.

Writing for the court, fellow D.C. Circuit judge Merrick Garland (a one-time Supreme Court nominee himself) reasoned that the “Murray amendment” did not eliminate the private charter bus companies’ ability to petition the government—it simply “deprived the [FTA] of the funds necessary to grant the redress the plaintiffs seek.” Although Congress promulgated the Charter Rule and granted the FTA authority to enforce it, the panel ruled that “nothing…bars Congress from changing its mind about whether or how its statutes may be enforced.” On the equal protection issue, the court found a rational basis for the exemption of the King County Metro from the Charter Rule. As explained by Senator Murray, the exemption alleviated issues with “accommodat[ing] handicapped fans, drastically increased fees for service, inconvenient and delayed staging, and increased congestion” that persisted without public bus service.

Comcast Cable Communications, LLC v. F.C.C. (2013)

This 2013 case featured a dispute between a broadcaster and the Federal Communications Commission (FCC) over the cable “tier” in which Comcast distributed the Tennis Channel (“Tennis”). At issue was § 616 of the Communications Act of 1934, which prohibits discrimination on the basis of affiliation by cable networks in content distribution. Since Tennis’ launch in 2003, Comcast had the channel in a separate sports package that could be purchased by subscribers for an additional fee. Unlike Tennis, however, Comcast distributed other sports channels, including the Golf Channel and Versus (now NBC Sports Network), through its basic cable package—meaning that subscribers were not required to pay additional fees for these channels.

In 2009, Tennis proposed that it be placed on par with Golf and Versus and be included in Comcast’s basic cable package. Importantly, the proposal did not make “projections of any resulting increase in revenue for Comcast, let alone revenue sufficient to offset the increased fees” that Comcast would owe Tennis under the new agreement. After review, Comcast rejected Tennis’ offer; Tennis then filed a complaint with the FCC, claiming Comcast was discriminating against it due to its preferential treatment of the Golf and Versus channels. An Administrative Law Judge (ALJ) agreed, ordering Comcast to “carry [Tennis] on the same distribution tier, reaching the same number of subscribers, as it does [Golf] and Versus.” The FCC affirmed the ALJ’s ruling, and Comcast appealed to the D.C. Circuit.

The majority opinion, joined by Judge Kavanaugh, found the FCC’s affirmance of the ALJ’s ruling against Comcast to be unsupported by any evidence of discrimination on the basis of affiliation. The record, the majority concluded, instead suggested that Comcast relied on “a straight up financial analysis” in declining Tennis’ proposal to move it from the sports tier to its basic cable tier. For instance, one regional executive for Comcast reported that employees found “‘[n]o [consumer] interest whatsoever’ in moving Tennis to a broader distribution[.]” Another Comcast region reported that there were zero customer complaints when Tennis was moved from the basic tier to the sports tier in 2007. The court itself suggested ways in which the FCC or Tennis could have shown a benefit to Comcast by moving Tennis to the basic tier—including the possibility that the move would increase Comcast’s subscriber base—but noted that no such evidence was offered. Comcast’s decision not to carry Tennis in its basic cable package was easily and reasonably justified by a profit motive and not “some deeper discriminatory purpose,” the court concluded. The ALJ’s order and the FCC’s affirmance were overturned; Tennis was later purchased by broadcast conglomerate Sinclair in 2016.

Although Judge Kavanaugh joined the majority opinion, he wrote separately to explain his view that Section 616 of the Communications Act was not even applicable to Comcast’s refusal to change its carriage agreement with Tennis. Section 616, Judge Kavanaugh explained, only prohibited discrimination by cable networks that “unreasonably restrain[s] the ability of an unaffiliated video programming vendor to compete fairly” (emphasis in original). The term “unreasonably restrain” is taken from the antitrust context; there, the term “requires that the discrimination in question hinder overall competition, not just competitors.” But Comcast lacked the market power to “hinder overall competition,” Kavanaugh reasoned, because it held just under a one-quarter (24 percent) share of the nationwide video programming market. Because Comcast lacked the ability to influence the overall market, Kavanaugh held that Section 616 was not applicable to the network’s decision concerning the Tennis Channel. This suggests that, even if the record did evince some discriminatory intent against Tennis, Kavanaugh still would have upended the ALJ and FCC’s rulings against Comcast.

SeaWorld of Fla., LLC v. Perez (2014)

Though SeaWorld is not, at first glance, a “sports” law case, Judge Kavanaugh’s strong dissent relying on sports-related comparisons pushes it into that category. The case was sparked by the 2010 death of a SeaWorld Florida killer whale (orca) trainer caused by the orca Tilikum. During a live show, Tilikum dragged the trainer underwater, drowning her. Following an investigation by the Occupational Health and Safety Board (OHSA), the U.S. Department of Labor cited and fined SeaWorld for violating a section of the Occupational Health and Safety Act that requires employers to maintain a workplace “free from recognized hazards that are causing or are likely to cause death or serious physical harm to [] employees.” This provision is known as the “general duty clause.” An Administrative Law Judge upheld the Labor Department’s findings and discipline, and SeaWorld’s administrative appeal was later denied. SeaWorld then turned to the federal courts for relief, which was ultimately denied by D.C. Circuit. Judge Kavanaugh dissented.

The majority, lead again by Judge Garland, found that the Labor Department had the authority to sanction SeaWorld for the dangers posed by its live killer whale shows and properly determined that SeaWorld Florida violated the general duty clause. A violation of that clause is present where: (1) an activity or condition in the employer’s workplace presented a hazard to an employee, (2) either the employer or the industry recognized the condition or activity as a hazard, (3) the hazard was likely to or actually caused death or serious physical harm, and (4) a feasible means to eliminate or materially reduce the hazard existed. Noting that SeaWorld challenged only the second and fourth elements, the court then explained how SeaWorld knew that close contact with orcas was a “recognized hazard” and that reasonable, additional precautions could have been exercised to mitigate the risk of harm. Though SeaWorld argued that its preparation of trainers and “operant conditioning” of killer whales, in the court’s language, “controlled the risk” of harm, those measures “did not [make] the killer whales safe[.]” The court also found that SeaWorld knew of the possibility for violent interactions between killer whales and trainers based on previous incidents. Close contact with orcas, according to the majority, was therefore a “recognized hazard.” Moreover, it was a hazard “feasible” precautions could have protected against. The fact that SeaWorld later prevented any close physical contact with Tilikum was evidence that the Labor Department’s “abatement” suggestions—which included prohibit[ing] animal trainers from working with killer whales…unless the trainers are protected through the use of physical barriers…”—were readily implementable. Making these changes, the court determined, “would not fundamentally alter the nature of the trainers’ employment or SeaWorld’s business.”

Judge Kavanaugh fervently rejected the majority’s holding and accused the Department of Labor of “storm[ing] headlong into a new regulatory arena.” Categorizing the orcas show at SeaWorld as a “sports event[] or entertainment show[],” Kavanaugh argued that the Labor Department arbitrarily chose to regulate the product produced by SeaWorld, while still disclaiming authority to regulate other violent professions, including the NFL and NASCAR. Kavanaugh wrote that the Department of Labor offered no rational explanation for its disparate treatment of SeaWorld’s shows and certain NFL plays or NASCAR vehicle speeds. Relying on Pelron—a case involving the production of toxic chemicals—Kavanaugh concluded that “some activities, though dangerous, are among the ‘normal activities’ intrinsic to the industry and therefore cannot be proscribed or penalized under the General Duty Clause.” In other words, as his dissent later suggested, preventing close contact between human trainers and killer whales is not a “feasible” or reasonable abatement because such contact is the product. Here again we see Kavanaugh readily accepting a more limited vision of agency authority—a trend that may well continue in his Supreme Court tenure.

Ivy Sports Medicine, LLC v. Burwell (2014)

Much like SeaWorld, Ivy Sports Medicine is not the traditional “sports law” dispute, but it comes reasonably close and offers yet another window into Judge Kavanaugh’s judicial style and principles. Ivy Sports Medicine centered on a medical product called the “Collagen Scaffold,” which was to be used as a rehabilitation tool in knee surgeries (which are common in many sports). Like all medical devices, the Collagen Scaffold was required to undergo Food and Drug Administration (FDA) approval before being sold and used in operations. The company behind the Collagen Scaffold, ReGen Biologics (headquartered in New Jersey), made several attempts to meet FDA standards, but was twice turned away because the product was not “substantially equivalent” to other, similar products already on the market. After being contacted by several New Jersey Congressional members and meeting with ReGen officials, the FDA ultimately approved the Collagen Scaffold in July 2008. But after public reporting in March 2009 on the process by which the Collagen Scaffold was approved, the FDA—which was by then under the control of a new Presidential administration—reclassified the product, effectively taking it off the market. ReGen sued, claiming the FDA did not have the authority to reconsider its July 2008 approval (during the course of the litigation, ReGen filed by for bankruptcy; its successor was the Ivy Sports Medicine, LLC entity). The trial court ruled in favor of the FDA, but Judge Kavanaugh and another colleague on the D.C. Circuit reversed and ruled in favor of Ivy Sports Medicine.

Judge Kavanaugh reasoned that the Food, Drug, and Cosmetic Act, which vests in the FDA the authority to review and approve medical devices, does not grant the FDA the “authority to reconsider its substantial equivalence determinations.” The FDA argued such authority was implicit, meaning it could “reclassify” products “upon [its] own initiative.” Kavanaugh rejected that argument, determining that since the Food, Drug, and Cosmetic Act contained a provision requiring the FDA to give the public notice of its proposed action and the opportunity to comment on it, the FDA could not simply reverse its earlier determination approving the Collagen Scaffold without first jumping “through certain procedural hoops[.]” Because the FDA did not subject its action on the Collagen Shield to the required notice and comment period—which Judge Kavanaugh believes “helps to prevent mistakes” and “helps ensure that regulated parties receive fair treatment”—it acted outside the power granted it by the Food, Drug, and Cosmetic Act.

Independent Producers Group v. Librarian of Congress (2015)

In Independent Producers Group, Judge Kavanaugh, writing for the court, upheld the Library of Congress’ (LOC) decisions concerning the distribution of re-broadcast royalty fees to a group called IPG that purported to represent FIFA (soccer’s world governing body) and the United State Olympic Committee (USOC). During the royalty distribution proceedings before the LOC, IPG did not disclosed all relevant information pertaining to its relationship with FIFA, and was thereafter barred from introducing certain evidence supporting that relationship. As a result, IPG was found not to properly represent FIFA and did not receive the royalty distributions owed to FIFA. Judge Kavanaugh upheld the LOC’s ruling; he also rejected IPG’s claim that the LOC erroneously determined that the USOC’s royalties fell under the category of program suppliers instead of sports programming.

Bennett v. Google, LLC (2018)

Prior to his Supreme Court nomination, one of the final opinions Judge Kavanaugh issued on the D.C. Circuit concerned a blog post, published through Google, about  a sports apparel company. That sports apparel company, DJ Bennett, at one time worked with an internet marketer to promote its business; after the business relationship soured, the internet marketer wrote a blog post criticizing DJ Bennett and its alleged propensity for “not pay[ing] its employees or contractors[.]” DJ Bennett appealed to Google and asked that the blog post be removed as a violation of the search engine’s “Blogger Content Policy.” However,Google did not abide byrequests that the internet marketer remove the content. Dawn Bennett, the individual behind DJ Bennett, sued Google, alleging defamation, tortious interference with a business relationship, and intentional infliction of emotional distress. Google moved for dismissal under the Communications Decency Act (CDA), which it claimed immunized it from damages stemming from third-party content.

The trial court agreed, and Kavanaugh and the appellate court affirmed. Because Google was merely an “interactive computer service”—not the creator of the offending content—and since Bennett’s complaint held Google responsible for disseminating the content, it was immune from liability under the CDA. “[T]he decision to print or retract,” as Google did, “is fundamentally a publishing decision for which the CDA provides explicit immunity,” the court wrote.

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Several sports law-related cases may make their way before the Justice Kavanaugh and the Supreme Court in the near future. From the perspective of the newest member of the Court, the most intriguing of these potential cases is the class action antitrust lawsuit challenging the NCAA’s amateurism rules. After winning a limited victory in a bid to monetize their names, images, and likenesses several years ago (O’Bannon v. NCAA), college athletes—and particularly football and basketball players—have alleged that the NCAA’s rules limiting players’ ability to profit off their athletic skills are anticompetitive and unlawful under the Sherman Antitrust Act. A trial was held in September 2018 in an Oakland, Calif. federal court; a decision is expected by the end of the spring. Whatever the outcome—and all indications are that the players will prevail—the parties will appeal the case to the Ninth Circuit Court of Appeals and, in all likelihood, to the Supreme Court. With the notion of amateurism hanging in the balance, the matter may be of substantial interest to the justices as they consider whether to review the case.

If they do, Justice Kavanaugh will face a difficult conundrum. Kavanaugh retained the NCAA’s lead attorney in current antitrust suit, Beth Wilkinson, in his fight to stave off accusations of sexual assault that arose during his confirmation process. Kavanaugh will face conflict of interest issues if Wilkinson continues her first-chair representation of the NCAA—and there is nothing to suggest she won’t, given the NCAA’s strenuous efforts to ensure her availability for the recent trial—including in oral argument before the Supreme Court. Federal law requires judges to disqualify themselves “in any proceeding in which [their] impartiality might reasonably be questioned,” and it seems plausible that presiding over a case argued by a judge’s former personal attorney could create some doubt as to the judge’s partiality. Notwithstanding the potential recusal battle, the fight over amateurism in collegiate sports could be the defining sports law case of Justice Kavanaugh’s early tenure on the Supreme Court.

Other sports-related matters that may come before SCOTUS in the near term include the AT&T – Time Warner merger, which, if it ultimately survives, will have a substantial impact on the market for sports media rights. There may also be a challenge to new federal sports betting regulation, which was introduced in December following the Supreme Court’s May 2018 decision to invalidate the Professional and Amateur Sports Protection Act (PASPA). Enacted in 1992, PASPA essentially outlawed state-sponsored sports betting in all but a few states; it was struck down on Constitutional grounds. With PASPA now gone, many states have moved to legalize sports wagering within their borders, but Congress may again insert itself into the regulatory framework. If it does, states may challenge the legality of federal oversight—a fight that could conceivably land the parties in the Supreme Court, and in front of Justice Kavanaugh.

 

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