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Saturday, February 27, 2010
The Star Caps Saga Continues
More than a year after the NFL attempted to suspend Pat and Kevin Williams of the Minnesota Vikings for violating the NFL Policy on Anabolic Steroids and Related Substances (the “NFL Policy”), litigation involving the case continues. The case took another turn last week when Judge Gary Larson, a Minnesota state court judge, handed down a 44 page opinion in response to the parties’ motions for summary judgment.
Here are some questions raised by the fairly dense opinion, with some answers.
1. What was the ruling? Judge Larson spent most of the opinion rejecting the arguments of the NFL and the Williamses. He rejected the NFL’s arguments that the league’s drug policy should trump state law, and rejected most of the Williamses’ arguments that the suspensions violated Minnesota state law.
2. Did the NFL Win? Yes and no. I’ll start here with what they lost. The NFL was looking for a sweeping victory in this case. The league wants a court—or Congress—to make a determination that the NFL’s drug policies trump state law, so that players cannot resort to state laws to challenge drug suspensions. The NFL did not get that sweeping pronouncement from the federal courts, Congress, or Judge Larson.
Instead, Judge Larson held that the Minnesota Drug and Alcohol Testing in the Workplace Act (DATWA) and the Minnesota Consumable Products Act (CPA) apply to professional sports leagues. Why? Well, most simply, because the statutes do not provide any explicit exception for the sports leagues. Although the legislative history of the statutes make it fairly clear that those laws were not created to govern the performance-enhancing drug testing of professional sports, Judge Larson was not willing to ignore the plain meaning of the statute to read in an exception for the NFL. In other words, if the NFL wants an exclusion from DATWA and CPA, it will have to obtain one from the Minnesota state legislature, not from Judge Larson.
Also, using the same rationale as the federal courts, Judge Larson rejected the NFL’s argument that the NFL’s collective bargaining agreement preempts DATWA and CPA.
3. Lost and 24 are having disappointing seasons. What can they do to improve? One word: crossover. Who wouldn’t want to watch Jack Bauer shouting and torturing his way across the island? “The following takes place between, well, I have no idea when this is taking place.”
4. Did the NFL Violate Minnesota State Law? Judge Larson rejected most of the Williamses’ arguments under DATWA (and all of the CPA claims), but held that the NFL violated DATWA by failing to inform the Williamses of their positive test results within three days of the test. Judge Larson also held that the NFL may have violated DATWA’s confidentiality provision. The press allegedly found out about the positive test results before the players, but it’s unclear if the results of the tests were disclosed by the NFL. That issue will have to be determined at trial.
5. If State Laws Apply to the NFL’s Drug Testing Policies, How Can the NFL Maintain a Uniform Policy?
Since the beginning of this dispute, the NFL has argued that application of state laws to the NFL’s drug policies will destroy the ability of the NFL to maintain an effective, uniform drug policy. Judge Larson, however, was unconvinced by the NFL’s argument for two primary reasons. First, Judge Larson was not persuaded that the NFL had a special need to maintain a uniform policy. He wrote: “Despite varying state laws, corporations that participate in employee drug testing conduct business across state lines everyday in this country. Defendants fail to demonstrate why it would be more onerous for the NFL to comply with state laws, than for any other business engaged in interstate commerce.”
Second, even if the NFL did have a special need for uniformity, Judge Larson held that this need is outweighed by Minnesota’s interest in protecting the health and safety of its employees.
Why the lack of deference given to the NFL? In part, it could simply be that Judge Larson does not believe that the NFL should be treated any differently than other interstate businesses and should not be able to bargain around state law. But, Judge Larson also made it clear that he did not see why application of DATWA would prevent the NFL from enforcing its drug policy. According to Judge Larson, DATWA only provides a floor, or minimum protections, for drug testing, and the NFL is free to provide more protection. Judge Larson did not see how notifying the players of their positive tests within three days and not (potentially) leaking the results of the test to the media (which would also violate the confidentiality provision of the NFL’s own policy) would hurt the ability of the NFL to enforce its policy. The NFL, of course, is making a broader argument—they are concerned that a state would enact a law that is too lenient and would prevent the league from disciplining its players in a uniform manner. According to Judge Larson, however, DATWA does not present those concerns, so he did not need to respond to the NFL’s broader argument.
6. Can the NFL Still Win this Case? Yes. It’s not all bad news for the league. DATWA only governs “employers” of Minnesota employees, so the NFL can win the case if it can prove at trial that the Vikings, and not the league, are the employer of the Williamses. A ruling that the NFL is not the employer of the players would be a sweeping victory—it would immunize the league from Minnesota state employment law (and potentially from other similar state statutes). But, here’s where it gets interesting. As Judge Larson explained, the Willamses can argue that the NFL is their employer under the “single employer doctrine,” which “looks at whether the commonality of the employers’ operations, management, labor relations, and ownership or financial control, is sufficient to indicate that they should be treated as one whole.” In other words, if the court determines that the league and its teams should be treated as “one whole,” then the NFL is the employer of the Williamses and in violation of DATWA. So, for purposes of this case, it is in the best interests of the NFL to argue that the league and the teams should not be treated as a single entity.
Yet, earlier this year, the NFL argued before the Supreme Court in American Needle that NFL teams have no value without the league and thus the league and its teams should be considered one entity. Granted, the single employer doctrine in the Star Caps case and the single entity antitrust doctrine in the American Needle case are different legal theories that serve very different functions. So, it would not be entirely inconsistent for the NFL to argue that each of the individual teams employs their individual players for purposes of employment law, and that each of these teams and the league act as one entity for purposes of antitrust law. But, there is some overlap in the two doctrines, and the NFL might be walking a fine line here. At a minimum, the NFL’s position in the Star Caps case (that there is a distinction between the teams and the league for employment purposes) lends additional weight to the conclusion of nearly every court that sports leagues and their teams constitute multiple entities for antitrust purposes when acting in the labor market. Of course, this conclusion is not inconsistent with the Seventh Circuit’s decision in American Needle, where the Seventh Circuit recognized that the NFL might be a single entity in some markets (e.g., licensing of intellectual property) and multiple entities in others (e.g., signing players).
7. What’s next?
A settlement conference is scheduled for March 1st, and the trial is set for March 8th. If the NFL loses the case and subsequent appeals, look for them to ask the Minnesota state legislature to exclude professional sports leagues (or at least those with collectively bargained drug policies) from DATWA. If that fails, we might see the NFL go back to Congress asking for help…