# Petition — Pro-Football, Inc. v. Hecht > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_0635%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1978 - **Citation:** 436 U.S. 956 ## Text — Supreme Court, U. K FILED | ) Mar 20 1978 \ IN THE Supreme Court of the United States OcrosBeR TERM, 1977 PBo-FoorgALL, INc., and District or COLUMBIA ArMorRY BOARD, Petitioners, U. NoRMAN F. HECHT, ET XL., Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT CovINGcTton & BURLING JAMES C. McKay Paul J. TAGLIABUE Greoe H. LEvy 888 Sixteenth Street, N.W. Washington, D.C. 20006 (202) 452-6000 Attorneys for Petitioner Pro-Football, Inc. CORPORATION COUNSEL, DISTRICT OF CoLUMBIA JoHN R. RISHER Ricwarp W. BARTON 14th and E Streets, N. W. Washington, D.C. 20004 Attorneys for Petitioner District of Columbia Armory Board TABLE OF CONTENTS Page „„ 1 . ...... „„ „ „„ „„ „„ „„ 2 (rn rr 2 Srarurzs INVvOLIyI . „ 3 r ĩ ˙² »ein esse + REASONS FOR GRANTING THE WRIT .........-0000sseee: 8 I. TRR Court or Appgais’ Decision Conriicts WITH Tuis Court’s ConTroLtine Decisions .......... 11 II. Tue Court or Apprats’ Decision Conriicts WITH Decisions or THE Fmsr, Sr, anp NintH Cm- , «PEP EY ET eTPEPETITINETTTT e eee TL TEL 1 r oc puke hi chine ͤͤ Dr te coburn 27 Appendix A—Opinion of the United States Court of Appeals for the District of Columbia Circuit (April r c la Appendix B—Opinion of the United States District Court for the District of Columbia ............. 35a Appendix C—Opinion of the United States Court of Appeals for the District of Columbia Circuit (De- — 3 Pry rerrrry rrr re 45a „ PETTITT CT TE TTT TT TTT Ty Ce 77a INDEX TO CITATIONS CasEs: Allegheny Uniforms v. Howard Uniform Co., 384 F. X. „ „ Saiies techie tbilonewess 25 ostery 14, 15, 17, 19, 24 ii Index to Citations Continued Page City of Fairfax v. Fairfax Hospital Ass’n, —— F. 2d 1977-2 Trade Cas. f 61,598 (4th Cir. 1977) . .20, 24 City of Lafayette v. Louisiana Power d Light Co., S. Ct. No. 76-864, October Term 1976 ........ 9, 15, 16, 21 Consumers Union of U.S., Inc. v. Rogers, 352 F. Supp. 1319 (D.D.C. 1973), aff’d and modified sub nom., Consumers Union of U.S., Inc. v. Kissinger, 506 F.2d 136 (D.C. Cir. 1974), cert. denied, 421 U.S. neee enen 19 Continental Bus System, Inc. v. City of Dallas, 386 F. r e 24 District of Columbia v. Carter, 409 U.S. 418 (1973) ... 18 District of Columbia v. Murphy, 314 U.S. 441 (1941) . 17-18 Duke & Co., Inc. v. Foerster, 521 F.2d 1277 (3d Cir. i cetteh tcetestlaccdhesdnahenéeundsaad-+ ¢ 20, 25 Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961) 22 Friend v. Lee, 221 F. 2d 96 (D. C. Cir. 1955) .......... 21 Georgia v. Evans, 316 U.S. 159 (1942) .............. 16, 17 Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975) .. 9, 12, 14, 15, 19, 24 Gonzalez v. Freeman, 334 F. 2d 570 (D.C. Cir. 1964) .. 21 Gordon v. New York Stock Exchange, Inc., 422 U.S. r ⅛˙ u...... a 13 Heath v. Aspen Skiing Corp., 1971 Trade Cas. {| 73,560 ß ͤD¹ͤůuiuͥĩi ³WQQ se 25 Hertz Drive- Ur- Self System, Inc. v. Tucson Airport Authority, 81 Ariz. 80, 229 P.2d 1071 (1956) ..... 21 Hughes Tool Co. v. Trans World Airlines, Inc., 409 r tie pipe = petite Cael Kalvar Corp. v. United States, 543 F.2d 1298 (Ct. Cl. 777777 ²˙ m 21 Turek v. Pleasure Driveway d Park District, 557 F.2d . error es epee 20, 25 Meat Cutters v. Jewel Ta Go., 381 U.S. 676 (1965) .. 13 Murdock v. City of Jacksonville, 361 F. Supp. 1083 D . 24, 25 New York v. United States, 326 U.S. 572 (1946) ...... 23 Padgett v. Louisville q Jefferson County Air Board, 492 F. 2d 1258 (6th Cir. 1974) .............. 10, 19, 23 Panama City v. Seven Seas Restaurant, Inc., 180 So. 2d 190 (Fla. APP. Fer 21 Parker v. Brown, 317 U.S. 341 (1943) 9, 11, 12, 17, A A Index to Citations Continued iii Page Pfizer v. Government of India, —— U.S. ——, 98 8. Ob. BBE (IBTE) oo cccccccccccccscvscecccscscses 16, 17 Silver v. New York Stock Exchange, 373 U.S. 341 (1963) 21 State of New Mexico v. American Petrofina, Inc., 501 F.2d 363 (9th Cir. 197 4c) 12, 20, 21 Sun Valley Disposal Co. v. Silver State Disposal Co,, 420 F.2d 341 (9th Cir. 1969) ............ 10, 14, 19, 23 3 Co. v. Nashville Coal Co., 365 U.S. 320 8 c Trans World Associates, Inc. v. City and County of Denver, 1974-2 Trade Cas. {| 75,293 (D. Colo. 1974) 23-24 United States v. Cooper Corp., 312 U.S. 600 (1941) 16, 17, 18 United States v. National Ass’n of Securities Dealers, Inc., 423 U.S. GO4 (197%6)) 4 2 22 13 a States v. Topco Associates, Inc., 405 U.S. 596 * „ ˙ enn Ventura Port District v. Taxpayers, 53 Cal. 2d 227, 347 , eee 21 White Motor Co. v. United States, 372 U.S. 253 (1963) . 26 E. W. Wiggins Airways, Inc. v. Massachusetts Port Authority, 362 F.2d 52 (Ist Cir.), cert. denied, 385 § §. rrr. 10, 13, 14, 19, 22, 23, 25 STaTUTEs: . Armed Services Procurement Act, 10 U.S.C. § 2314... 14 Clayton Act, 15 U.S.C. §§ 12 et seg. 16-17 District of Columbia Stadium Act, 2 D.C. Code §§ 1720 — cedbescbundnnsocsetscesssocenes 3, 4, 5, 7, 8 Robinson-Patman Act, 15 U.S.C. §§ 13 et seg. 21 Sherman Anti-Trust Act, 15 U.S.C. §§1-7 ......... passim JJ Eddie dhbyededNesescccccccccecece 3 Z 2 MISCELLANEOUS: Comment, The State Action Exemption In Antitrust: From Parker v. Brown to Cantor v. Detroit Edison Nen 12 iv Index to Citations Continued Comp. Gen. B-176223 (Sept. 25, 1972) ............... Comp. Gen. B-178928 (July 17, 1973)))) Hearings on S. 3736 and H.R. 12162 bef i tees of the Senate and House —— 4 District of Columbia, 85th Cong., 2d Sess. (1968) Hearings on H.R. 8392 before Subcommittee No. 2 the House Committee on the Distri — - 86th Cong., Ist Sess. (1959) g a : 1 co H.R. Rep. No. 109, 80th Cong., Ist Sess. (1947) Office of the Secretary of Defense, Military Prime Con- tract Awards, October 1976- in press) .......... 5 er September 1977 — 38 Op. Att’y Gen. 539 (1936) 3 8. Rep. No. 571, 80th Cong., 1st Sess. (1947) IN THE Supreme Court of the United States Octosper TERM, 1977 No. Pro-FoorsaL., Inc., and District or COLUMBIA ArMorY Boarp, Petitioners, V. Norman F. Hecut, ET L., Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT Petitioners pray that a writ of certiorari issue to review the decisions of the United States Court of Appeals for the District of Columbia Circuit in its cases Nos. 24,446 (April 27, 1971) and 75-1819 (De- cember 20, 1977), both entitled Hecht, et al. v. Pro- Football, Inc., et al. Petitioners previously filed a petition for a writ of certiorari seeking review of the Court of Appeals’ decision in No. 24,446, reported at 444 F. 2d 931 (D.C. Cir. 1971), and reproduced as Appendix A to this Pe- tition (pp. 1a-34a, infra). That petition was denied by this Court, with Justices Stewart, White, and Marshall 2 of the opinion that the writ should have been granted 404 U.S. 1047 (1971). 1 The initial opinion of the Court of Appeals had re- versed a summary judgment entered in favor of peti- tioners by the United States District Court for the District of Columbia in an opinion reported at 312 F. Supp. 472, and reproduced as Appendix B to this Petition (pp. 35a-44a, infra). On remand following this Court’s denial of certio- rari, the case was tried to a jury. After a lengthy trial, the jury returned a verdict in favor of petitioners. That verdict was reversed by the Court of Appeals on December 20, 1977, in No. 75-1819. The second opin- ion of the Court of Appeals is reproduced as Appendix C to this Petition (pp. 45a-76a, infra).* JURISDICTION The jurisdiction of this Court is invoked under 28 U.S.C. § 1254(1). Review of the initial decision of the Court of Appeals is now proper. See Hughes Tool Co. ; Trans World Airlines, Inc., 409 U.S. 363, 365 n.1 1973). 2 QUESTION PRESENTED Whether a government agency created by Congress and a private party may be liable for a violation of the Sherman Act based on the terms of a lease for the use of a public facility when the lease was negotiated in good faith and at arm’s length, the government agency was acting within express discretionary authority ac- corded it by Congressional statute, and the terms of the References to the Appendices to this Petition are esignated 146 77 d App. — followed by identification of th — pendix an the page number. F.., App. A 2a. eins * 7 3 lease were directed at advancing a valid governmental purpose. STATUTES INVOLVED Sections 1, 2 and 3 of the Sherman Act and perti- nent provisions of the District of Columbia Stadium Act are set forth in Appendix D to this Petition (pp. 7T7a-80a, infra). STATEMENT The Court of Appeals held in its first opinion that the Sherman Act covered a public contract between a government agency created by Congress (the Armory Board) and a private party (the Redskins) for the leasing of a public facility (RFK Stadium). In its sec- ond opinion, the Court of Appeals referred to its initial decision, noting that it had concluded ‘“‘that Congress had evinced no intention“ in the stadium legislation to immunize the governmental lease from the Sherman Act. App. C 48a n.5. In 1957, Congress authorized the Armory Board ‘‘to construct, maintain, and operate a stadium“ so as to provide the people of the District of Columbia with a stadium suitable for holding athletic events and other activities and events of a nature requiring such a fa- cility ....’’ District of Columbia Stadium Act § 2, 71 Stat. 619 (2 D.C. Code § 1720). The final enabling stat- ute authorized construction of the stadium on land to be acquired by the Department of the Interior, by con- demnation if necessary, with construction to be fi- nanced by bonds issued by the Armory Board. D.C. Stadium Act §§ 2-4 (2 D. C. Code §§ 1720-22). The bonds ‘The Armory Board was established by Congress in 1948. 62 Stat. 339 (2 D.C. Code § 1702). 4 were to be repayable as to principal within a period not to exceed thirty years“ (2 D.C. Code § 1722) and were to be guaranteed by the United States Treasury. The Department of the Interior was directed to enter into a contract with the Armory Board for the con- struction, maintenance, and operation of the stadium. D.C, Stadium Act § 3 (2 D.C. Code § 1721). The Board was given the broadest possible discretion in carrying out its functions under the statute: „In order to carry out the purposes of this sub- chapter, the Board is hereby authorized without regard to any other provision of law, but subject to any contract entered into with the Secretary of the Interior under section 2-1721— **(1) to determine all questions concerning the use of the stadium for the purposes of this sub- chapter; 8) to rent or lease from time to time for any of the p cc. of this subchapter, all or any part or parts of the stadium including any or all struc- tures, equipment or facilities of the stadium, at such rental values and for such periods of time as the Board shall determine . D. C. Stadium Act § 5 (2 D.C. Code § 1723) (emphasis supplied). Thus, under the enabling act, all leasing decisions were left to the judgment and discretion of the Armory Board and the Board was given authority to deter- mine all such questions without regard to any other provision of law.’’ Id. (emphasis supplied). In enacting this legislation, Congress gave no indi- eation that it intended the Armory Board to be subject to the Sherman Act in leasing and operating the sta- 5 dium. Nor did the Armory Board or any party with which it might deal have any reason to believe that the Armory Board was subject to such limitations. Throughout the period in which Congress was con- sidering the stadium legislation, it was accepted that the success of the stadium venture depended on the Armory Board’s securing long-term commitments for the use of the stadium from the two projected prin- cipal tenants, the Washington Senators baseball team and the Washington Redskins football team. During hearings and debates, it was made clear to Congress that no stadium would be possible unless the Armory Board was able to obtain a long-term lease from the Redskins." On December 24, 1959, the Armory Board and the Redskins, after what the Court of Appeals described as ‘‘arm’s-length, hard bargaining between the two parties for approximately a year and a half,” App. A 4a, entered into an agreement under which the Red- skins committed themselves to rent the stadium for * Hearings on S. 3736 and H.R. 12162 before Subcommittees of the Senate and House Committees on the District of Columbia, 85th Cong., 2d Sess. 21 (1958). In later testimony on a 1959 amendment to the Stadium Act, the Armory Board’s Chairman, in discussing the lease negotiations with the Washington Senators and the Red- skins, noted that ‘‘we are desperately anxious to get these contracts in order to be able to float our bond issue.’’ Hearings on H.R. 8392 before Subcommittee No. 2 of the House Committee on the District of Columbia, 86th Cong., Ist Sess. 18-20 (1959). See also 104 Cong. Ree. 18787 (1958); 103 Cong. Rec. 6826 (1957). As amended in 1958, the Stadium Act directs that the stadium be ‘‘constructed sub- stantially in accordance with the plans for such stadium’’ con- tained in a 1958 engineering and economic study. D.C. Stadium Act §2 (2 D.C. Code § 1720). That study was based on the ex- pectation that the Senators and the Redskins would be the chief sources of revenu their home games beginning with the 1961 season and for 29 seasons thereafter. The Board, in turn, agreed not to rent the stadium to another professional football team during the term of the lease.’ Without such a reciprocal commitment by the Arm- ory Board, there would have been no lease and no stadium, The action by the Armory Board in agreeing to the exclusive provision, in light of the necessity of obtaining a 30-year lease from the Redskins, clearly served the stadium’s interests and clearly fell within the authority granted it by Congress to determine all questions concerning the use of the stadium“ and to lease the stadium ‘‘at such rental values and for such periods of time’’ as it shall determine. The respondents are individuals who claim to have been promoters pursuing a second professional foot- ball franchise for the District of Columbia in a league other than the Redskins’ league, the National Foot- ball League. Respondents’ claims are based solely on the exclusive professional football use terms of the lease between the Armory Board and the Redskins— which respondents assert thwarted their ambitions to establish a team in the District. ‘‘There is no conten- tion,“ the Court of Appeals said, that there was any fraud, misrepresentation, or overreaching on either side.“ App. A 4a. Respondents seek treble damages and injunctive re- lief against alleged violations of Sections 1, 2 and 3 of the Sherman Act. The sole remaining defendants, * Construction of the stadium, first known simply as D.C. Stadium and since 1968 as Robert F. Kennedy Memorial Stadium, began in 1959. The stadium was opened in 1961. 7 the petitioners here, are Pro-Football, Inc. (the Red- skins) and the Armory Board.“ The District Court, in granting petitioners’ motion for summary judgment, reasoned that ‘‘[n]o violation of the [Sherman] Act can be made out even where there is a restraint of trade or monopolization if it resulted from valid governmental action.“ App. B 44a. The District Court, relied, inter alia, on decisions of this Court, as well as on decisions of the First and Ninth Cirevits, holding that activities similar to those in- volved herein were not subject to challenge under the Sherman Act. The Court of Appeals reversed the District Court’s judgment, ruling that the validity of the thirty-year lease between the appellees Armory Board and Pro- Football, Inc., must be tested in accordance with the United States antitrust laws as usually applied to con- tracts between private parties. App. A 33a.“ »The claims against the National Football League, a defendant at the time of the Court of Appeals’ first decision, were dismissed with prejudice prior to trial. Plaintiff seeks only injunctive relief as to the Armory Board, although the Board and the Redskins are charged as joint tortfeasors with violating the Sherman Act. * To the extent that the Court of Appeals relied upon a construc- tion of the Stadium Act rather than the Sherman Act, the Court thoroughly misconstrued that Act. Thus, the Court read a pro- vision of the Stadium Act that required competitive bidding on property and equipment contracts in excess of $3,000 as expressing „Congress concern to preserve the competitive spirit in larger contract offering. App. A 29a. But Congress manifested no such pro-competition attitude with respect to large contracts as the Court of Appeals attributed to it. The Armory Board’s largest single contract would be the contract for construction of the sta- dium, and another section of the Act specifically authorized the Board to provide for the construction of the stadium ‘‘by such means as it determines will most effectively carry out this [Act] 8 The fact record necessary for this Court’s review is fully developed. This case has twice been remanded by the Court of Appeals, the second remand following a jury trial in which the government agency’s reasons for entering into the lease agreement were thoroughly examined. If further proceedings in the District Court lead to another appeal, such an appeal is likely to result from the continuing confusion that the unprecedented “governmental act“ ruling of the Court of Appeals has engendered. REASONS FOR GRANTING THE WRIT The Court of Appeals has decided an important question of Federal antitrust law that has not been, but should be, settled by this Court and has decided that question in a manner that can have a major im- pact on the contracting practices of all government agencies, state, local, or Federal. In reviewing an action of a government agency under a Congressional statute prescribing no antitrust limitations on the agency’s conduct, the Court ruled that the agency’s contracting practices are subject to the same antitrust standards as are routinely applied to contracts between private parties. The Court’s ruling is unique, because the gov- ernment agency to which these standards were applied was established by the very legislative body that en- acted the Sherman Act—the Congress of the United States. (including, but not limited to, a negotiated contract).’’ D.C. Sta- dium Act §2 (2 D.C. Code § 1720). Indeed, the limited require- ment of competitive bidding on property and equipment contracts plainly suggests that other contracts, including leases, did not have to be let on a competitive basis. 9 Heretofore, it has been accepted that the contracting practices of government agencies created by Congress are not subject to the standards of the Sherman Act. This acceptance has proceeded on the premise that the Sherman Act and other antitrust laws were never in- tended to be applicable to the actions of Federal agen- cies unless Congress specifically so declared. That understanding has now been reversed by the Court of Appeals, with the Court ruling that antitrust law principles developed in private business contexts apply equally to the contracting actions of Congressionally- created agencies unless Congress has specifically pro- vided to the contrary. This issue was not addressed in Parker v. Brown, 317 U.S. 341 (1943), which required a reconciliation of the Sherman Act with a state regulatory enactment that directed private conduct in conflict with the Sher- man Act. Nor is the present issue resolved by this Court’s rulings in Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975), in Cantor v. Detroit Edison Co., 428 U.S. 579 (1976), or in Bates v. State Bar of Arizona, 97 S. Ct. 2691 (1977), which dealt with the questions of whether essentially private conduct undertaken with the approval, acquiescence, or at the direction of state legislative, regulatory, or judicial authority is entitled to antitrust immunity. Nor will the current issue be resolved by this Court’s decision in City of Lafayette v. Louisiana Power & Light Co., No. 76-864, currently pending before this Court, since that case is concerned with the actions of a municipality acting under author- ity of state law. The decision of the Court of Appeals is without precedent. It is unsupported by the language or history of the Sherman Act or by decisions of this Court. It 10 stands for the proposition that per se rules, tie-in and reciprocity principles, exclusive dealing and maximum pricing concepts, and all other limiting antitrust principies are equally applicable to Federal agency contracts, regardless of the government agency’s ob- jectives and interests in entering into contracts on such terms. If given general effect, the Court’s ruling would bear heavily upon the operations of Congres- sionally-created agencies and other units of govern- ment that perform their public functions in whole or in part through contracting with private firms and that enter into contracts with interests and objectives dif- fering broadly from those influencing private busi- ness dealings. The decision below is also in conflict with the deci- sions of other Courts of Appeals that have rejected a comparable antitrust law application even where state and municipal agencies were concerned. ZE. W. Wiggins Atrways, Inc. v. Massachusetts Port Author- ity, 362 F.2d 52 (Ist Cir.), cert. denied, 385 U.S. 947 (1966); Sun Valley Disposal Co. v. Silver State Dis- posal Co., 420 F.2d 341 (9th Cir. 1969); Padgett v. Louisville & Jefferson County Air Board, 492 F.2d 1258 (6th Cir. 1974). More broadly, the decision below misconstrues and rejects the decisions of this Court delineating the role of the antitrust laws in relation to valid governmental action and to private action claimed to be immunized by governmental action. This Court has recognized the need for clarification of its ‘‘governmental act’’ decisions in state and mu- nicipal agency contexts. E. g., Cantor; City of Lafay- ette. It is equally important that it do so in a context where government agencies acting ursuant to Con- gressional authorization have entered into contracts 11 claimed to be vulnerable under private antitrust law principles. I. THE COURT OF APPEALS’ DECISION CONFLICTS WITH THIS COURT’S CONTROLLING DECISIONS The Court of Appeals’ attempted accommodation of the Sherman Act and the conflicting Stadium Act was grounded on two essential lines of analysis—each erroneous. First, the Court of Appeals improperly read Parker v. Brown, 317 U.S. 341 (1943). Second, it erroneously assumed that the Sherman Act applies to the public contracts of Congressionally-created agencies unless Congress expressly states the contrary, and the Court misinterpreted this Court’s decisions regarding the Sherman Act’s application to private business conduct that is subject to regulation by a Federal agency. The court below read Parker v. Brown as holding that the California agricultural statute was not sub- ject to the Sherman Act because the state’s regulatory scheme was consistent with the Federal Agricultural Adjustment Act. App. A 10a. It thus concluded that Parker validated California’s exercise of sovereign state power in regulating state agricultural matters not because governmental action is beyond the scope of the Sherman Act, but simply because the state action took a form that Congress had previously adopted in establishing Federal agricultural policy. On this basis, the Court of Appeals explicitly rejected what it characterized as a theory, that where there can be established unequivocal state action the antitrust laws do not apply.“ App. A 15a. But this Court’s opinion in Parker and recent dis- cussions of Parker demonstrate the error in the Court 12 of Appeals’ analysis. In considering the Sherman Act issue in Parker, this Court did not mention the Fed- eral Agricultural Adjustment Act—much less rest its decision on any similarity between that Act and the California agricultural statute. 317 U.S. at 350-52. Further, the Court of Appeals’ reading of Parker finds no support in Goldfarb v. Virginia State Bar, 421 U.S. 773, 788-92 (1975), or in any of the several opinions in Cantor v. Detroit Edison Co., 428 U.S. 579 (1976), which analyzed Parker in minute detail. See Cantor, 428 U.S. at 587-92, 603-05, 615-21. The Court of Appeals was equally in error in pre- suming that the Sherman Act fully applies to the pub- lic contracts of governmental agencies in the ab- sence of unequivocal exemption therefrom, either by specific statutory language or by a purpose to enforce other policies of equal or greater importance... App. A 28a.“ The Court was also wide of the mark in re- lying on decisions of this Court and lower Federal courts that have considered whether private conduct in a Federally regulated industry is immunized from the antitrust laws. App. A 22a-27a. In those cases, the challenged private conduct did not involve public con- tracts by governmental agencies designed to serve pub- lie purposes. Instead, those cases involved private activity unquestionably subject to the Sherman Act in *The court below articulated a quite open-ended, six-part bal- ancing test for determining whether governmental action should be immune from the Federal antitrust laws. App. A 9a. That test has been criticized by both the Ninth Circuit in State of New Mexico v. American Petrofina, Inc., 501 F.2d 363, 371 (1974), and by commentators as inconsistent with Parker v. Brown and on other grounds. See, e.g., Comment, The State Action Exemption In Antitrust: From Parker v. Brown to Cantor v. Detroit Edison Co., 1977 Duke L. J. 871, 896-97. 13 the absence of a regulatory overlay.’ Unlike here, the issues in such cases related to the presence or absence of express authority in the regulatory agency to confer immunity and to the private antitrust defendants ability to demonstrate that the objectives of a Federal regulatory scheme require an implied repeal’’ of the antitrust laws. This case is, however, fundamentally different. The issue is not one of immunity for private conduct, but of whether a government agency can itself be liable under the Sherman Act for taking action within its discretion under its enabling statute and directed at a valid governmental purpose. As stated by the First Cireuit, this issue does not involve any question of immunity, since there was no attempt on the part of Congress to impose liability in the first place.“ Z. W. Wiggins Airways, Inc. v. Massachusetts Port Author- ity, 362 F.2d 52, 56 (1st Cir.), cert. denied, 385 U.S. 947 (1966). If the Sherman Act does not extend to such governmental action, surely that Act cannot in- directly be brought to bear by applying it to a private party that enters into a valid contract with a govern- ment agency. Cf. Meat Cutters v. Jewel Tea Co., 381 U.S. 676, 730 (1965) (Goldberg, J., concurring) Prior to the decision of the court below, the general understanding had been that specific Congressional ac- tion would be required to subject public contracts to the Sherman Act—and the prevailing authority made that general understanding explicit as to the contracts of state governmental units. E. W. Wiggins Airways, Inc. Recent illustrations of the class of cases erroneously invoked by the Court of Appeals are Gordon v. New York Stock Exchange, Inc., 422 U.S. 659, 691 (1975) and United States v. National Asso- ciation of Securities Dealers, Inc., 422 U.S. 694, 719, 729-80 (1975). 14 v. Massachusetts Port Authority, 362 F.2d 52 (Ist Cir.), cert. denied, 385 U.S. 947 (1966); Sun Valley Disposal Co. v. Silver State Disposal Co., 420 F.2d 341 (9th Cir. 1969).* As to the public contracts of Congres- sionally-created agencies, the decision of the court be- low continues to stand alone.“ Petitioners further submit that the Court of Ap- peals’ decision is inconsistent with the three pertinent, recent decisions of this Court—although we recognize that each of these decisions dealt with state govern- mental action. Bates v. State Bar of Arizona, —— U.S. , 97 S. Ct. 2691 (1977) ; Cantor v. Detroit Edison Co., 428 U.S. 579 (1976); and Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975). In Bates, this Court held the Arizona Supreme Court’s regulation of attorney advertising to be out- side the scope of the Sherman Act, emphasizing that See pp. 22-24, infra, for additional discussion of these decisions. * Under the Court of Appeals’ six-part balancing test, App. A 9a, the contracts of many Congressionally-created agencies could well be subject to the antitrust laws. As to contracts of the Depart- ment of Defense and NASA, for example, the Armed Services Pro- curement Act, granting these agencies their contracting authority, specifies the laws that are inapplicable to agency contracts without including the antitrust laws, 10 U.S.C. § 2314, and competitive principles were intended to control the great bulk of contracting under that Act. S. Rep. No. 571, 80th Cong., Ist Sess. 1-6, 12-13, 15-16 (1947); H.R. Rep. No. 109, 80th Cong., Ist Sess. 3-6 (1947). In denying a protest of a contract award by the Air Force, the Comptroller General has broadly stated that Federal government contracting officers are not ‘‘required to consider the antitrust laws in the execution of their responsibilities. and that the im- position of such a requirement upon the contracting officers of the Government would impose an intolerable burden and inordinately delay the procurement process. Comp. Gen. B-1762238 at 161, 166- 67 (Sept. 25, 1972) (emphasis supplied). 15 the antitrust claims were against the State“ and that the State had a direct and independent public interest in the challenged regulations. 97 S. Ct. at 2697-98. Goldfarb and Cantor, unlike Bates, considered the application of the Sherman Act to private party con- duct taken in conjunction with differing measures of state action. In Goldfarb, the Court held that neither the Virginia State Bar, a state agency ‘‘for some lim- ited purposes, nor the county bar, a private organi- zation, was entitled to a Sherman Act exemption be- cause they had ‘‘voluntarily joined in what is essen- tially a private anticompetitive activity ....’’ 421 U.S. at 791-92. While Goldfarb did not rule on the applica- tion of the Sherman Act to a government contract, its analysis of the pertinent considerations does not sup- port the Court of Appeals’ rationale here. Similarly, while Cantor did not directly deal with the present issue, the several opinions there strongly suggest that a compelling, if not clearcut, case for the inapplicability of the Sherman Act would exist where, as in the present suit, government officials are sued and the challenged action directly involves a valid exercise of governmental authority to serve a public purpose. 428 U.S. at 585-92, 600-01, 615-17. As Mr. Justice Blackmun later stated for a unanimous Court in Bates, Cantor ‘‘would have been an entirely different case if the claim had been directed against a public official or public agency rather than against a private party.“ 97 S. Ct. at 2697. If that is correct, the decision of the court below cannot be permitted to stand.” 1 City of Lafayette v. Louisiana Power & Light Co., No. 76-864, October Term, 1976, presents the related question of whether Con- gress intended the Federal antitrust laws to apply to the actions of 16 Nor can the Court of Appeals’ decision be recon- ciled with this Court’s decisions that have interpreted the term ‘‘person’’ in the Sherman Act in the context of governmental entities as antitrust plaintiffs.” United States v. Cooper Corp., 312 U.S. 600, 614 (1941) (the United States is not a ‘“‘person”’ [plain- tiff] under Section 7); Georgia v. Evans, 316 U.S. 159, 162 (1942) (a state is a ‘‘person’’ [plaintiff] under the Sherman Act); Pfizer v. Government of India, — U.S. ——, 98 S. Ct. 584, 590 (1978) (a foreign sovereign is a person“ [plaintiff] under the Clayton state governmental units. The amended antitrust counterclaim against the two cities in that action alleged that the cities had violated the antitrust laws in the operation of their municipal elec- tric utility systems by, among other things, entering into various covenants and contracts with bondholders, customers, and others that had anticompetitive effects. If this Court reverses the Fifth Circuit in City of Lafayette and holds that the challenged conduct of the cities is not subject to the Sherman Act, it may be appro- priate for this Court to vacate the decision of the Court of Appeals below and to remand the present suit for reconsideration in light of the decision in City of Lafayette. On the other hand, in view of the unique, Federal aspects of the present case, an affirmance of the Fifth Cireuit in City of Lafayette ought not preclude review of this case. u The Sherman Act prohibits unlawful conduct by persons. Section 2 applies by its terms to ‘‘every persen’’ who shall do cer- tain acts either independently or with ‘‘any other person or per- sons.’’ App. D 77a. Sections 1, 2 and 3, in designating those to be criminally liable, refer to ‘‘every person’’ who shall engage in the prohibited conduct. Id. And Section 8 defines the term per- son’’ to include corporations and associations existing under the laws of the United States, Territories, any State, or any foreign country. 15 U.S. C. § 7. Respondents’ Count 1 is based upon Sections 1 and 3 of the Sherman Act (the latter section dealing specifically with acts with- in the District of Columbia). Respondents’ Count 2 is based upon Sections 2 and 3 of the Act. 17 Act). These decisions establish that the term person“ is not a word of art with a uniformly fixed meaning and that the scope of the Sherman Act is to be re- solved in the light, not only of the policy intended to be served by the enactment, but, as well, by all other available aids to construction.’’ Cooper, 312 U.S. at 605. The Court of Appeals effectively held that a Con- gressionally-created government agency was a ‘‘per- son“ fully subject to the Sherman Act in the same manner as any private business, but it did so without considering any of the textual and policy factors that this Court found dispositive in Cooper, 312 U.S. at 606-08, in Georgia v. Evans, 316 U.S. at 161-62, and in Pfizer, 98 S. Ct. at 590.“ Further, the interpretation of the court below conflicts with Cooper, which declined to read the term person' as encompassing the United / States, in part because such a reading would make the United States liable to suit for treble damages.“ 312 U.S. at 606.“ The Court of Appeals’ failure of analysis is un- usually serious in view of the District of Columbia’s unique position in our nation’s governmental structure, see District of Columbia v. Murphy, 314 U.S 441, 452 12 The Court, for example, gave no consideration to the possible criminal liability of District of Columbia officials, to the poten- tial of joint tortfeasor liability, to the effects of treble damage liability on the governmental treasury, to the effects that 4 rescis- sion of the stadium lease might have on government interests, and to other such consequences. 1 In Cantor, it was noted that the claim of state violation of the Sherman Act was first raised in Parker v. Brown after this Court had held in Georgia v. Evans, 316 U.S, at 162, that the State of Georgia was a ‘‘person’’ within the meaning of Section 7 of the Sherman Act. 428 U.S. at 586-87, 591. 18 (1941), and of the Sherman Act’s specific provisions applicable to commerce within the District, 15 U.S.C. § 3, App. D 77a-78a. Under the Constitution, Congress exercises plenary power over the District of Columbia and its officers. District of Columbia v. Carter, 409 U.S. 418, 429 (1973). When Congress enacted the Sher- man Act in 1890, the governance of the District of Columbia was a direct responsibility of the Congress and the Federal government itself. The Court of Appeals’ holding that the Sherman Act applies to a Congressionally-created agency of the District of Columbia government is thus tanta- mount to a conclusion that Congress intended the Sherman Act to cover not only private restraints of trade in the District but any actions of the Congress itself that might restrain trade in the District. But the Court of Appeals, in so holding, gave no considera- tion to any aspect of the Sherman Act’s terms, history, or purposes as they might relate to the District. Pe- titioners submit that if Congress intended to include within the Sherman Act conduct taken in governing the District of Columbia, ‘the ordinary dignities of speech would have led’ to its mention by name.“ Cooper, 312 U.S. at 606. U. THE COURT OF APPEALS’ DECISION CONFLICTS WITH DECISIONS OF THE FIRST, SIXTH. AND NINTH CIRCUITS The question of the applicability of the Sherman Act to government contracts between non-Federal gov- ernment agencies and private parties has been consid- ered by six Courts of Appeals as well as by a number of lower Federal courts. As already noted, the decision of the court below is the only ruling, so far as petition- ers are aware, by any Court of Appeals regarding the 19 applicability of the Sherman Act to a public contract of a Congressionally-created agency.“ Major confusion has characterized the decisions of the Courts of Appeals regarding public contracts and the Sherman Act. This has resulted from widely dif- fering interpretations of Parker v. Brown, 317 U.S. 341 (1943), from uncertainty as to the bearing of this Court’s Goldfarb and Cantor decisions on the public contracts question, and in some measure from confu- sion as to the merits of the analysis of the Court of Appeals below. The conflict is square between the decision below and the decision of the Court of Appeals for the First Circuit in Z. N. Wiggins Airways, Inc. v. Massachu- setts Port Authority, 362 F.2d 52 (1st Cir.), cert. de- nied, 385 U.S. 947 (1966), the decision of the Court of Appeals for the Sixth Circuit in Padgett v. Louis- ville & Jefferson County Air Board, 492 F.2d 1258 (6th Cir. 1974), and the decision of the Ninth Circuit in Sun Valley Disposal Co. v. Silver State Disposal Co., 420 F.2d 341 (9th Cir. 1969). In addition, the Ninth Circuit, in holding the Sherman Act inapplica- ble to alleged anticompetitive conduct of the State of New Mexico and several of its subdivisions, has noted that the Court of Appeals below ‘‘did not limit its rea- soning to cases involving Federal [governmental] ac- Of. Consumers Union of U.S., Ine. v. Rogers, 352 F. Supp. 1319 (D. D. C. 1973), where the court expressed the view that the Sher- man Act was applicable to a trade agreement between foreign steel companies made as a result of negotiations initiated by the Secre- tary of State at the direction of the President’’ (id. at 321) with apparent assurances of Sherman Act immunity. However, the Sher- man Act issue was then mooted. See Consumers Union of U.S., Ine. v. Kissinger, 506 F.2d 136 (D.C. Cir. 1974), cert. denied, 421 U.S. 1004 (1975). 20 tion,’’ concluding that the Ninth Circuit’s view of gov- ernmental immunity ‘‘is inconsistent with the rationale of Hecht.“ State of New Mexico v. American Petro- fina, Inc., 501 F. 2d 363, 371 (9th Cir. 1974). On the other hand, the Courts of Appeals for the Third, Fourth, and Seventh Circuits have applied the Sherman Act to state or local governmental action in a manner similar to the decision below. See Duke ck Co., Inc. v. Foerster, 521 F.2d 1277 (3d Cir. 1975); City of Fairfax v. Fairfax Hospital Association,. F.2d ——, 1977-2 Trade Cas. 161,598 (4th Cir. 1977); Kurek v. Pleasure Driveway & Park District, 557 F.2d 580 (7th Cir. 1977). The nature of these conflicts and the importance of the issue to which they relate can best be under- stood by consideration of the following background: The public contract is an increasingly important in- strument of government at all levels—Federal, state and local. Besides its obvious utility in procuring a broad range of goods and services,” the government contract is a vital tool of public policy. Through the award of government contracts and enforcement of their terms, for example, the Federal government acts to alleviate unemployment in designated sections of the country, to ensure equal employment opportunity and fair labor practices, to protect the environment, to aid small businesses, and to assist domestic industries in competition with foreign concerns. For example, in fiscal year 1977, the Department of Defense alone entered into 217,566 procurement actions (awards of or changes in prime contracts) of $10,000 or over. Military prime con- tracts awarded after receipt of two or more responsive offers totaled over $18,564,000,000. Office of the Secretary of Defense, Military Prime Contract Awards, October 1976-September 1977 at Table 9, Table 16 (1978, in press). 21 Many public contracts (and their underlying policy- implementation purposes) would be jeopardized by application of the antitrust laws in the manner urged by the Court of Appeals. Governments often seek and obtain price concessions that are unavailable to other purchasers of goods or services.“ Governments some- times enter into price-fixing agreements,” tying ar- rangements,* and requirements contracts.“ Govern- ment contracts, like that between petitioners, frequently provide for grants of exclusive rights to private parties in return for reciprocal benefits to the government.” And governments often debar private parties from con- tracting or otherwise dealing with government agen- cies.” The inapplicability of the Sherman Act to public contracts—as held by the First, Sixth, and Ninth Cir- cuits but rejected by the court below—is an aspect of the general rule that the antitrust laws are not appli- 16 The Robinson-Patman Act has been ruled inapplicable to con- tracts of the Federal government. Comp. Gen. B-178928 (July 17, 1973) ; 38 Op. Att’y Gen. 539 (1936). 17 See State of New Mexico v. American Petrofina, Inc., 501 F. 2d 363 (9th Cir. 1974); Ventura Port District v. Taxpayers, 53 Cal. 2d 227, 233-35, 347 P.2d 305, 310-11 (1959). 18 See City of Lafayette v. Louisiana Power & Light Co., No. 76- 864, Oct. Term, 1976. 1 Compare Kalvar Corporation, Inc. v. United States, 543 F.2d 1298 (Ct. Cl. 1976), with Tampa Electric Co. v. Nashville Coal Co., 865 U.S. 320 (1961). 20 Friend v. Lee, 221 F.2d 96 (D.C. Cir. 1955); Panama City v. Seven Seas Restaurant, Inc., 180 So. 2d 190 (Fla. App. 1965) ; Hertz Drive-Ur-Self System, Inc. v. Tucson Airport Authority, 81 Ariz. 80, 299 P.2d 1071 (1956). n Compare Gonzalez v. Freeman, 334 F.2d 570 (D.C. Cir. 1964), with Silver v. New York Stock Exchange, 373 U.S. 341 (1963). 22 cable to valid government acts. Parker v. Brown, 317 U.S. 341 (1943).% See Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 135 (1961). In E. W. Wiggins Airways, Inc., for exam- ple, the Port Authority had contracted with a private company for the latter to become the sole maintenance service operator at Logan Airport in Boston. An anti- trust suit was brought by one of the former service operators, naming the Port Authority and the new eperator as defendants. In holding that no suit lay, the First Circuit said: By statute [the Authority] has been constituted a public instrumentality and the exercise of the powers conferred upon it is deemed and held to be the performance of an essential governmental function. It also has wide powers, many of which are bestowed only upon instrumentalities of gov- ernment. 7 * * In carrying out its responsibilities the Au- thority decided that it was necessary to have only one fixed base operation at Logan and pursuant to that decision, entered into the lease with [the chosen fixed base operator]. It is clear that in doing so it was acting as an instrumentality or agency of the state, pursuant to the legislative mandate imposed upon it to operate and manage In Parker, this Court, in making the point that it was dealing with sovereign governmental action, said that ‘‘the state... made no contract or agreement and entered into no conspiracy in restraint of trade or to establish a monopoly... .’’ 317 U.S. at 352. This language has not been taken, even by the court below which quoted it, as an indication that every publie contract is to be scrutinized to determine whether it imposes an illegal restraint or otherwise violates the antitrust laws. At the very most, Parker leaves open the question posed by this case, which should now be answered. 23 the airport and establish rules and regulations for its use .... What was done here was in the exer- cise of a valid governmental function. The anti- trust laws are aimed at private action, not at gov- ernmental action.“ 362 F.2d at 55. As for the defendants other than the Port Author- ity, the court held that in the circumstances ‘‘it would be an unreasonable restriction on [the Authority’s] freedom to hold that the other defendants acted illegally in having aided it.“ 362 F.2d at 56.“ To the same effect are Sun Valley Disposal Co. v. Stlver State Disposal Co., 420 F.2d 341 (9th Cir. 1969), and Padgett v. Louisville & Jefferson County Air Board, 492 F.2d 1258 (6th Cir. 1974). See also Trans The Court of Appeals below did not distinguish Wiggins on any tenable ground. Indeed, the Court acknowledged that the Armory Board could construct, maintain, and operate the RFK Stadium as straight-forward federal governmental action’’ without being subject to antitrust challenge. App. A 17a. But the Court stated that Congress had not authorized the Board ‘‘to own and operate the only professional football team to play in the Stadium. Id. To be sure, it is not at all clear how the challenged lease trans- formed the Board from operator of the Stadium to owner of the Redskins. Beyond that, however, the Court seems simply to have indulged in the outmoded distinction between ‘‘governmental’’ and proprietary funetions— based upon what this Court has charac- terized as ‘‘untenable criteria. . . .’’ New York v. United States, 326 U.S. 572, 583, 586, 591 (1946). There is very little today that governmental bodies cannot directly do—construct housing develop- ments, operate factories, lease warehouses, or provide public enter- tainment. In any event, the Court’s attempted distinction is beside the point. The Armory Board’s contract with the Redskins was pursuant to its express statutory authority to operate the stadium. It was a governmental act based upon the Board’s decision con- cerning the use of the stadium, a decision that Congress made the sole responsibility of the Board. The decision of the Massachusetts Port Authority to contract for airport services in Wiggins was an identical exercise of its power under its governing statute. 24 World Associates, Inc. v. City and County of Denver, 1974-2 Trade Cas. 175,293 (D. Colo. 1974); Conti- nental Bus System, Inc. v. City of Dallas, 386 F. Supp. 359 (N.D. Tex. 1974) (private bus company was not a defendant in the action). The contrary view—and the need for clarification of the applicable principles—is illustrated by the Fourth Circuit’s decision in City of Fairfax v. Fairfax Hospital Association, —— F.2d ——, 1977-2 Trade Cas. 161,598 (4th Cir. 1977). That suit involved an antitrust challenge of a proposed lease between the Industrial Development Authority of the County of Fairfax, Vir- ginia (‘‘an agency of the Commonwealth of Virginia’’) and a privately owned and operated community hos- pital. Reversing the District Court’s judgment that the proposed lease was not subject to the Sherman Act, the Fourth Circuit—in two separate opinions and over a dissent—concluded that the County’s Industrial De- velopment Authority was not necessarily beyond the scope of the Sherman Act. Jd. at p. 72,480. The diffi- culty of applying Parker v. Brown, as elaborated by Goldfarb and Cantor, to the many variants of public contracting actions is evident in the opinions of both Judge Wyzanski and Judge Widener, as well as in the dissenting opinion of Judge Hall, who concluded that the majority’s view of the state action“ exemption was interpreted much too narrowly ....’’ Id. at p. 72,483. The need for clarification is similarly reflected in Murdock v. City of Jacksonville, 361 F. Supp. 1083 (M.D. Ala. 1973), which also involved a public agency’s lease for the use of a public facility. In Murdock, the court ruled that the municipality and its officials were entitled to the full scope of immunity under Parker 25 because leases of city property (the coliseum) were specifically authorized by the State legislature and the exclusivity clause was inserted after a conscious de- termination by the City Council that an exclusive lease provided the greatest advantages to the City.“ 361 F. Supp. at 1093. But in reliance on the earlier deci- sion of the Court of Appeals in the present case, the Murdock court simultaneously held: ‘‘Clearly the im- munity enjoyed by the City is not available to the pri- vate corporate entity’’ that had leased the public fa- cility. 361 F. Supp. at 1093. Compare Murdock with Duke & Company, Inc. v. Foerster, 521 F.2d 1277 (3d Cir. 1975), where the Sherman Act was held applicable to governmental as well as private parties in a suit involving concession arrangements at public facilities.” Apart from the Court of Appeals’ holding that the Sherman Act extends to government contracts, there is no warrant for concluding that contracts of govern- ment agencies ‘‘must be tested in accordance with the United States antitrust laws as usually applied to con- tracts between private parties. App. A 33a (emphasis supplied).” The antitrust laws rest on the premise that private commercial interests and the public interest do not always coincide, thus necessitating public interest In accord with the Third Circuit’s decision are Heath v. Aspen Skiing Corp., 1971 Trade Cas. f 73,560 (D. Colo. 1971) ; Allegheny Uniforms v. Howard Uniform Co., 384 F. Supp. 460, 463 (W. D. Pa. 1974); and Kurek v. Pleasure Driveway & Park Distriet, 557 F. 2d 580, 589 (7th Cir. 1977). ** Nor can any significance be attached to the fact that the op- posite party to a governmental agency contract is a private business enterprise; an antitrust limitation imposed on the contract privi- leges of a private party to a government contract is an equal limita- 5 on the government agency’s authority. Wiggins, 352 F.2d at 26 controls over private business activities and contrac- tual relations. Antitrust law also adheres to the pre- mise that competition, in the private sphere, is paramount, Apex Hosiery Co. v. Leader, 310 U.S. 469, 500 (1940), even to the point where successful busi- ness operations can no longer be conducted. Under the antitrust laws, as usually applied to private par- ties, many forms of business conduct are outlawed as per se offenses without even an opportunity for inquiry into their purposes, justification, or motivating inter- ests. But these standards have been established en- tirely on the basis of the courts’ extensive experience with certain business relationships in the private sec- tor. See White Motor Co. v. United States, 372 U.S. 253, 263 (1963). And these standards, as developed and applied to private businesses, derive from the notion that individual economic freedom in the free-enter- prise system should not be foreclosed in any sector of the economy by private citizens or groups. United States v. Topco Associates, Inc., 405 U.S. 596, 610 (1972). Governments, on the other hand, frequently enter the . marketplace only when these premises have been found inadequate and in need of modification. It is, moreover, implicit in the authority given government agencies dealing in the marketplace that their interests, objec- tives, and motivations are distinct from those of private parties. Such agencies, by their nature, are charged with a responsibility for serving the public interest. Thus, when a government agency exercises its statutory discretion in carrying out its assigned responsibilities, the premises of ordinary antitrust standards are wholly lacking. — — — 27 As a consequence, if the antitrust laws are to be applied to government agency contract dealings, it will be necessary to develop an independent set of antitrust principles broadly at variance with those now applied to transactions between private parties. If this is not done, the Court of Appeals’ ruling that contracts be- tween Congressionally-created government agencies and private parties are equally subject to the antitrust laws will improperly handicap many public agencies both in fulfilling their assigned responsibilities and in serving the public interest. CONCLUSION For the reasons stated herein, a writ of certiorari should be granted to review the decisions of the Court of Appeals. Respectfully submitted, Covineton & BURLING Jam 8 C. McKay Paul J. Tagliabue Gregg H. Levy 888 Sixteenth Street, N. W. Washington, D.C. 20006 (202) 452-6000 2 for Petitioner Pro-Football, nc. CoRPORATION COUNSEL, DISTRICT OF CoLUMBIA John R. Risher Richard W. Barton 14th and E Streets, N.W. Washington, D.C. 20004 Att for Petitioner District of Columbia Armory Board APPENDIX 14a DA UNITED STATES COUBT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT No. 24,446 Norman F. Hor, Harry Kacan, Mazo A. Mruer, APPELLANTS WasuHinoton Feperats INC., ET AL. V. Pno-FoorgalLL, INC., Er AL. Appeal from the United States Distriet Court for the District of Columbia Decided April 27, 1971 0 0 ° Before Wrxey, Circuit Judge, Van Pext,* Senior United States District Judge for the District of Nebraska, and Gicnoux,** United States District Judge for the District of Maine. Wuxsy, Circuit Judge: Appellants brought this action under §§1, 2, and 3 of the Sherman Act, alleging that a restrictive covenant in the lease between appellee Pro-Foot- ball, Inc., and appellee District of Columbia Armory Board, which prohibits the use of Robert F. Kennedy Stadium by any professional football team other than the Washington Redskins for a period of thirty years, violates the pro- hibition against contracts in restraint of trade. * Sitting by designation pursuant to 28 U.S.C. § 294(d) (1964). % Sitting by designation pursuant to 28 U.S.C. § 292 (e) (1964). 2a Appellant-plaintiffs are three local businessmen, who over a period of time sought to obtain either an American or Continental Football League franchise for Washington, D.C. The appellee-defendants are Pro-Football, Inc., the cor- porate name of the Washington Redskins, the National Football League, an unincorporated association of owners of professional football teams of which appellee Pro-Foot- ball, Inc., is a member, and the District of Columbia Ar- mory Board, an unincorporated instrumentality of the District of Columbia which operates Robert F. Kennedy stadium. Count 1 of appellants’ complaint alleges that the restric- tive covenant in the Redskins’ lease on Kennedy Stadium constitutes a contract in restraint of the business of pro- fessional football in the District of Columbia, thus violat- ing §§1 and 3 of the Sherman Act. Count 2 alleges that the Redskins are engaged in an attempt to monopolize and have monopolized the business of professional football in violation of §§ 2 and 3. Count 3 joins the National Foot- ball League and two individuals not parties to this appeal with the Redskins in an alleged unlawful combination and conspiracy to restrain and monopolize the business of pro- fessional football in violation of §§ 1, 2, and 3 of the Sher- man Act. On cross-motions for summary judgment, the U.S. Dis- trict Judge granted the appellee-defendants’ motions for summary judgment on all three counts, reasoning: Thus, the leasing of the stadium was pursuant to the mandate of the Act and was governmental action. As such it was... exempt from the antitrust laws. No violation of the Act can be made out even where there is a restraint upon trade or monopolization if it resulted from valid governmental action. Eastern R. Conf. v. Noerr Motors, 365 US. 127, 136 (1961). In the manner the cross-motions for summary judgment were submitted to the District Court, this was the only 3a issue before it. The District Judge did not purport to de- cide, and indicated that before doing so he would need to hear evidence, whether the restrictive covenant in the lease does constitute a contract in restraint of the business of professional football, or whether this restrictive covenant effectuates any monopoly of professional football by the Redskins, or whether the restrictive covenant furthers the conspiracy to restrain and monopolize the business of pro- fessional football as alleged. Nor do we decide these issues on this appeal. For rea- sons set forth below, we conclude that the District Judge erred in his holding recited above, and that the cause must be remanded for trial upon the issues left undecided by the — of appellee-defendants’ motion for summary judg- ment. I. The Statute and the Lease The Robert F. Kennedy Stadium was constructed pur- suant to an Act of Congress of 1957, with amendments in 1958 and 1959. By this statute the Armory Board was authorized to construct, maintain and operate the stadium “in order to provide the people of the District of Columbia with a stadium suitable for holding athletic events and other activities and events of a nature requiring such a facility.“ The Secretary of the Interior was authorized to acquire by gift, purchase, condemnation, or other- wise, the property and to contract with the Armory Board for the construction, maintenance and operation of the stadium for a term not exceeding thirty years.“ Another section of the statute, strongly relied upon by the appellees here, provided: In order to carry out the purposes of this subchapter, the Board is hereby authorized without regard to any 12 D.C, Code § 1720 et seg. 22 D.C. Code § 1720. 2 D.C. Code § 1721. 4a other provision of law, but subject to any contract entered into with the Secretary of the Interior under section 2-1721 [for the use of the Stadium site]— (1) to determine all questions concerning the use of the stadiwm for the purposes of this subchapter; (8) to rent or lease from time to time for any of the purposes of this sub-chapter, all or any part or parts of the stadium including any or all structures, equipment or facilities of the stadium, at such rental values and for such periods of time as the Board shall determine (Emphasis supplied by appel- lees in brief.) Pursuant to this statute the stadium was constructed and the lease between the Armory Board and the Redskins entered into 24 December 1959 for a term of thirty years, commencing with the football season in 1961. There is no contention made here that there was any fraud, misrepre- sentation, or overreaching on either side. There was arm s- length, hard bargaining between the two parties for ap- proximately a year and a half before the lease agreement was signed. The restrictive covenant complained of reads: [T]he Lessor shall have the right to lease or other- wise permit the use and occupancy of the Stadium during any period exclusive of such specific dates re- ferred to herein for any purpose or purposes, (except provided in subsection (a) of this Paragraph IX), including (but not limited to) school, college or other amateur or professional baseball, football and basket- ball games and, also, for such other use or purpose as the Lessor may determine, provided that at no time during the term of this Lease Agreement shall the Stadium be let or rented to any professional football team other than the Washington Redskins. (Emphasis supplied.) — eC eo- 2 D.C. Code § 1728. 5a It is alleged and not contradicted that Kennedy Stadium is in fact the only suitable place for professional football in the District of Columbia. It is undisputed that it has many unique advantages. In 1965, appellants on behalf of themselves and others with a financial interest in their venture submitted an offer to the Armory Board to lease Kennedy Stadium on those Sundays, Friday nights, and Saturdays, and other times the stadium was not being used by the Redskins, for a minimum guaranteed rent or the same percentage of the gross receipts paid by the Redskins. The Armory Board replied that under the terms of the lease with the Redskins it was prohibited from leasing the stadium to them or to anyone for the use of another professional football team. After reitera- tions of the offer, the Armory Board continued to adhere to its position that the restrictive covenant of the lease prohibited it from leasing Kennedy Stadium to another football team without the consent of the Redskins.“ Thus, appellants were not able to secure the use of the stadium at any time during the year for professional football purposes, and they allege that for this reason their efforts to obtain franchises in the two professional football leagues fell through. The District Court emphasized in its opinion that the legislative history of the Stadium Act shows that ‘‘there would have been no stadium unless a long-term lease could be negotiated by the Armory Board with the Redskins.”’ The District Court also placed great emphasis on the fact that the Secretary of Interior’s contract with the Armory Board for the construction, maintenance, and operation of the stadium was for a term of not more than thirty On 7 October 1965 the Special Assistant to the Solicitor of the Department of Interior furnished the Solicitor’s legal opinion to the Armory Board, concluding that the restrictive covenant in the lease was in violation of the antitrust laws. On the basis of a contrary opinion from a private law firm, however, the Board adhered to its position that the lease’s restrictive clause was bind- ing and enforceable. 6a years, and that Congress authorized the Armory Board to issue bonds for the construction of the stadium with the principal payable not later than thirty years from the date of issuance, In the District Court’s opinion all of this added up to governmental action which created an immunity from the normal application of the antitrust laws. We can agree that most of this was governmental action, that govern- mental action was sensibly intermeshed and coordinated over the same time span, and that there might have been no stadium unless there could have been a long-term lease with the Redskins professional football team (as well as the Washington professional baseball team), but there is no finding by the District Court that there would have been no lease with the Redskins without the restrictive covenant complained of and that Congress knew this, nor is there any finding that Congress directly authorized such a restrictive covenant. II. The Applicability of the United States Antitrust Laws to ‘‘Valid Governmental Action The rationale of the trial court and the theory of the appellees in sustaining its decision is set forth as the execution of the. .. lease . . . constituted valid govern- mental action which is immune from application of the antitrust laws.“ In support of this appellees state, The key, undisputed fact is that the Armory Board is a gov- ernmental agency.’ And we are cautioned not to “‘over- look the fact that, in leasing the Stadium, the Armory Board acted pursuant to an Act of Congress.“ In con- clusion, after review of the pertinent authorities, appellees deduce the rule that where direct governmental action, as distinet from private conduct, has caused the alleged injury to a plaintiff, the provisions of the federal anti- trust laws are inapplicable, . . .”? and ‘‘the action of the Armory Board in entering into the Stadium lease with the Redskins was a governmental act which is immune from application of the antitrust laws.’’ 7a After a study of the rationale back of the decided cases in this area of antitrust law, we consider that the issue, the facts considered most relevant by appellees, and the rule derived by appellees is a much too talismanic approach where scrupulous distinctions are called for. As was said earlier this year by Judge Goldberg in Woods Exploration & Producing Co., Inc. v. Aluminum Co. of America, ‘(t]he instant case involve[s] state participa- tion. That proposition, however, only begins the analysis for it is not every governmental act that points a path to an antitrust shelter. We reject ‘the facile conclusion that action by any public official automatically confers exemp- tion.’ George R. Whitten, Jr., Inc. v. Paddock Pool Build- ers, Inc.,...1 Cir. 1970, 424 F.2d 25, 30. Like Circuit 1971 Trade Cases f 73,422], Nos. 28,763, 29 i Jan. 1971). Though Woods never referred to „e v. Alabama Electric Cooperative, 394 F.2d 672 (5th Cir. 1968). it is obvious that its rationale, based as it is on the proposition that ‘ not every governmental act... points a path to an antitrust shelter, represents a significant shift in the Fifth Circuit away from the views of the majority in Alabama Power, which was based upon the flat assertion that ‘‘it is settled that neither the Sherman Act nor the Clayton Act was intended to authorize restraint of governmental action,“ id., at 675, towards the rationale of Judge Godbold’s dissent in that case. In language expressive of the approach we take here, Judge Godbold stated: Congress can, and in numerous instances b egisla- tion has, subordinated the national — — 2 the antitrust laws so as to authorize government officials to per- form acts or pursue policies without regard to the antitrust laws. N The courts carefully have limited these express] conferred immunities to the scope defined in each instance vd Congress so as to avoid pro tanto re ; Id, at 680. peal of the antitrust laws. And, The cases do not support a propositi ; position of general - ge immunity. If there is such a — — * me" proceeding for a long time under a misapprehension in p ang — * officers, and those with whom they deal, ions ch are specific i arying i scope. Id., at 685. — 43 8a Judge Coffin in Paddock Pool, supra, ‘‘[w]e are particu- larly reluctant to rely on verbal formulae to solve problems of antitrust liability.“ Although the Sherman Act has been characterized as a comprehensive charter of economic liberty aimed at pre- serving free and unfettered competition as the rule of trade, ' it is fundamental that neither the Sherman Act nor any other antitrust statute restricts the United States Government in directing action in complete contradiction to antitrust policy, because after all the Sherman Act and related antitrust statutes are only statutes, not consti- tutional charters. But, the basic philosophy of our anti- trust policy has been so long established, is of such recognized economic importance, and has assumed in the statutory scheme of things such high dignity * that a contrary congressional intent or ‘‘immunity from anti- trust laws ‘is not lightly implied.’ ’’ * Anticipating a bit our conclusions below, we suggest that it may be inaccurate and confusing to speak of valid governmental action which is immune from application of the antitrust laws.“ Rather, the proper inquiry would seem to be to what extent Congress has knowingly adopted a policy contrary to or inconsistent with the previously established antitrust laws, or, where state action is concerned (since states are not named in the Sherman Act and antitrust laws are directed at suppression of anticompetitive business action), the inquiry should be to what extent is the state action permissible as not con- 7424 F.2d 25, 29 (1st Cir. 1970). 8 Northern Pacific Ry. Co. v. United States, 356 U.S. 1, 4 (1958). o See, e.g., United States v. Philadelphia National Bank, 374 U.S. 321, 348 (1963), stressing ‘‘the indispensable role of antitrust policy in the maintenance of a free economy. 10 United States v. First City National Bank, 386 U.S. 361, 368 (1967), quoting California v. F.P.C., 369 U.S. 482, 485, (1962). 9a travening the federal antitrust laws, which in our federal system constitute overriding legislation under the federal commerce power. Putting the problem in this light, relevant criteria would include the specific language of the congressional statute involved, any legislative history which would throw light on the congressional intent, the relative importance of the governmental action which is asserted to override antitrust policy, whether the governmental agency is required to take into consideration the possible anti- competitive effect of its actions, whether the agency is required to adhere to a clearly defined and restricted statutory directive, and to what extent the agency’s actions are subject to judicial review. We now turn to examine previous cases in which so- called governmental action immunity has been an issue, the answers given therein, and the principles which emerge therefrom. A. State regulation of business. Although it might be more logical to consider first the Federal Government’s regulation of business, yet the cases relied upon most strongly by both parties involved state action raising questions under the federal antitrust laws, and since the Armory Board here is somewhat similar to a state governmental agency, we turn first to the state regulation cases. The oldest called to our attention is Olsen v. Smith, u in which Texas harbor pilots, licensed by the State of Texas, sued to enjoin the activities of non-licensed pilots. The defendants challenged the state licensing system as being invalid under the federal antitrust laws, an argu- ment which the Supreme Court rejected: [I]f the State has the power to regulate, and in so doing to appoint and commission, those who are to 1195 U.S. 332 (1904). 10a perform pilotage services, it must follow that no monopoly or combination in a legal sense can arise from the fact that the duly authorized agents of the State are alone allowed to perform the duties devolv- ing upon them by law.” Parker v. Brown” is apparently the decision which opened the eyes of the antitrust bar to the possibilities of avoiding the impact of the antitrust laws, if only state governmental action is in some way involved. In Parker the State of California, at the petition of some raisin growers, established market and price controls over Cali- fornia raisins, an action which necessarily had consider- able impact on competition, since California produces most of the raisins consumed in the United States. The Supreme Court validated this marketing program, adopted pursuant to the California Agricultural Prorate Act, holding that the Sherman Act prohibits private action which has an anticompetitive effect, but does not apply to state action. The Court ‘‘found the California regulation consistent with the national policy embodied in the Agricultural Adjustment Act, which authorized the Secretary of Agri- culture to impose similar marketing restrictions and which recognized the simultaneous coexistence of state regulation in its general instructions to the Secretary of Agriculture to harmonize state and federal regulation.’’ * Since the Court found the state regulation harmonious with the federal agricultural regulatory scheme, the Supreme Court could safely find that Congress had no intent to have the already existing antitrust laws forbid this type of state action, i. e., state agricultural regulation. The Congress had already enacted a federal Agricultural Adjustment Act which was inconsistent with the application und., at 345. 18317 U.S. 341 (1943). P. Aal, ANTITRUST ANALYsis 57 (1967). lla of the previously existing federal antitrust laws in this area, the congressional agricultural statute was of equal dignity with the antitrust statute, and the state agricul- tural action was harmonious with the federal regulation; hence, the Supreme Court did not apply the prohibitions of the antitrust laws to this type state regulatory action. In so doing, however, the Supreme Court did not give much emphasis to a comparative evaluation of the other important national policy, and used broad language which was to provide the foundation for a much more expansive governmental action immunity doctrine to be developed by other courts in later cases: We find nothing in the language of the Sherman Act or in its history which suggests that its purpose was to restrain a state or its officers or agents from activi- ties directed by its legislature. ... [A]n unexpressed purpose to nullify a state’s control over its officers and agents is not lightly to be attributed to Congress.” The Court aiso pointed out: The state in adopting and enforcing the prorate program made no contract or agreement and entered into no conspiracy in restraint of trade or to estab- lish monopoly, but, as sovereign, imposed the restraint as an act of government which the Sherman Act did not undertake to prohibit.** Thus, Parker v. Brown involves not just state govern- mental action; it involves regulatory action in the state’s capacity as sovereign, and it involves sovereign state regulatory action which is consistent with federal national policy, i. e., the Agricultural Adjustment Act, enunciated 4° 317 U.S., at 350-51. 10 317 U.S., at 352. 12a by the national Congress, which is also the source of federal antitrust policy.” * Years later the Fourth Circuit explained some of the limita- tions inherent in Parker v. Brown: The teaching of Parker v. Brown is that the antitrust laws are directed against individual and not state action. When a state has a public policy against free competition in an in- dustry important to it, the state may regulate that industry in order to contral or, in a proper case, to eliminate competi- tion therein. It may even permit persons subject to such con- trol to participate in the regulation, provided their activities are adequately supervised by independent state officials... . (Citing cases.) .... But such action must be state action, not individual action masquerading as state action. A state can neither authorize individuals to perform acts which violate the antitrust laws nor declare that such action is law- ful. Ashville Tobacco Board of Trade, Inc. v. F.T.C. (4th Cir. 1959), 263 F.2d 502, 509. Cf. the most recent Fourth Cireuit decision following Parker, Washington Gas Light Co. v. Virginia Electric and Power Co., — F.2d —, 39 U.S.L.W. 2453-54, (4th Cir. 12 Feb. 1971). See also the recent decision of the Fifth Circuit in Gas Light Co. of Columbus v. Georgia Power Co., — F.2d —, — 39 L.W. 2545, 2546 (5th Cir., 23 March 1971), where in considering the anti- trust implications of the adoption by the Georgia Public Service Commission, regulating industry of undeniable importance to the state, the court said: Each of these acts and practices are (sic) rate schedules and each has been considered by the Georgia Public Service Commission in an adversary proceeding. Each is effective by order of the commission. Defendant’s conduct cannot be characterized as individual action when we consider the state’s intimate involvement with the rate-making process. Though the rates and practices originated with the regulated utility, Georgia Power, the facts make it plain that they emerged from the commission as the products of the com- mission. They are thus immune from the operation of the antitrust laws under the Parker exemption. The result reached differs from that by the same Circuit in Woods, but is justified by the fact that, although a state regula- 13a The valid rationale of Parker v. Brown was recently extensively analyzed by the Fifth Circuit in Woods Exploration d Producing Co., Inc., et al. v. Aluminum Company of America, et al.“ There two large-tract natural gas operators allegedly conspired to file false forecasts with the Railroad Commission of Texas, which regulates the allowable amount of gas to be produced from each well or unitized tract. These forecasts were used by the Rail- road Commission to calculate the production allowable, and thus had a direct influence on the nature of the state regulatory action taken, particularly an adverse influence on the amount of production allowed small-tract natural gas operators, who filed the antitrust suit. The defendants relied upon Parker v. Brown, supra, Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc. and United Mime Workers v. Pennington.” The Fifth Circuit reversed the District Court’s grant of summary judgment to the defendants, holding that the Woods case was similar to Continental Ore Company v. Union Carbide and Carbon Corporation, where the Supreme Court held that de- fendants’ anticompetitive activities were not protected tory agency is involved in each instance, in Woods the action of the agency was alleged to be influenced by the illegal agreement among the private parties to furnish false data, while no such circumstance was alleged in Gas Light. However, the approach of Judge Bell in Gas Light gave more weight to the sheer ex- istence of state action than did the attempt to reconcile antitrust and regulatory policies of Judge Goldberg in Woods or Judge Godbold dissenting in Alabama Power, perhaps because such comparative analysis was simply not called for on the facts of Gas Light. 18 Supra, note 6. 1 365 U.S. 127 (1961). 2° 381 U.S. 657 (1965). 1 370 U.S. 690 (1962). 14a under the Parker rationale. Judge Goldberg’s carefully reasoned opinion also rejected the rationale ‘‘that because of extensive regulation the oil and gas industry is not susceptible to the strictures of the antitrust laws.“ Rather, he considered that ‘‘state regulation does not mean that there is no room for antitrust policies to operate We therefore think it incumbent upon this court to render both state regulatory and federal antitrust goals comple- mentary rather than mutually exclusive.’’™ In Woods the Fifth Circuit took the approach of trying to reconcile the overall antitrust policy with the highly important state policy of regulating gas output. Where state regulatory action is concerned, this is a logical approach. But this reconciliation of state and federal goals is but a part of the overall problem, is only one example of several areas where the overall question is to what extent, if any, the Congress intended to permit action not consistent with the antitrust laws. In the case at bar we do not put the matter as an effort to make state and federal goals complementary rather than exclusive. Since Congress enacted both the antitrust laws and the 22 The Woods opinion describes Continental Ore thusly: There, a private firm acting as administrator of Canada’s war- time rationing program used its discretionary power to exclude a competing processor of vanadium ore from the Canadian market. In defense of a private treble damage action, defendants asserted that the purchasing agent was acting as an administrator of the Canadian Government and that the conduct was therefore privi- leged under Parker. The Supreme Court, stressing that there was no evidence that the Canadian Government had approved of the conduct of its agent, held that such conduct was subject to the Sherman Act. Again, in UMW v. Pennington . . . the Court re- iterated this rationale ana distinguished Continental Ore on the ground that in that case there had been no indication that any Canadian officia] ‘‘would have approved of joint efforts to monop- olize the production and sale of vanadium... .’’ 28 Supra, note 6, slip op. at 8. 15a District of Columbia statute authorizing the construction of the stadium, the proper inquiry is to what extent, if any, Congress intended the action of the Armory Board not to be subject to the previously existing national antitrust policy. The appellees contend, and the trial court seemed to go on this theory, that where there can be established unequivocal state action the antitrust laws do not apply. We might paraphrase Judge Goldberg, ‘‘But this state [action] does not mean that there is no room for anti- trust policies to operate.“ B. State-created sole intrumentalities. In contrast with the technique of regulating a field of business with resulting undeniable anticompetitive effects, in some instances the state has either created or contracted with a corporate entity, which became the state’s sole instrumentality in carrying out what clearly would other- wise be a governmental function. In E. W. Wiggins Airways, Inc. v. Massachusetts Port Authority ‘‘[t]he Authority decided that it was neces- sary to have only one fixed base operation at Logan [Airport] and pursuant to that decision, entered into the lease with Butler-Boston. It is clear that in doing so it was acting as an instrumentality or agency of the state pursuant to the legislative mandate imposed upon it to operate and manage the airport and establish rules and regulations for its use.“ The action of the Authority in entering into the exclusive lease with Butler-Boston for the base operation at Logan Airport necessarily had an anticompetitive effect upon all other private corporations, including the plaintiff Wiggins Airways, who might have been involved in, or who might have desired to enter into, all or part of the activities constituting the operation of the base at Logan Airport. Wiggins sued under §§1 and 0 Id. * 362 F.2d 52, 55 (1st Cir. 1966). l6a 2 of the Sherman Act, alleging the exclusive lease contract was violative of these sections. Here obviously was a situation in which the state itself might have performed the very functions that it delegated to Butler-Boston as its exclusive instrumentality; hence, the First Circuit rejected the plaintiff’s contention that the state action was violative of the federal antitrust laws. A similar rationale lies behind the decision in Ladue Locai Lines, Inc. v. The Bi-State Developmental Agency of the Missouri- Illinois Metropolitan District.” There Ladue, a private corporation engaged in bus transport in the metropolitan St. Louis area, alleged violation of § 2 of the Sherman Act in the organization of Bi-State through legislative action by Missouri and Illinois, and the subsequent action of Bi-State in the transportation of school children in the metropolitan area of St. Louis. The Eighth Circuit held: The fact that the effect of the compact gives Bi-State a monopoly and that competitive interests of private concerns are harmed does not violate the Sherman Act. We deem it well settled that when a state an- nounces a public policy against free competition in an industry essential to it, state control and regulation of that industry, even to the extent of eliminating competition, is permissible.” Here again the operation of a municipal bus line is some- thing which the state or its creature, a municipality, might do for itself. Since an area in two states was involved, the legislatures of two states, with the approval of the United States Congress, created a bi-state authority to perform a strictly governmental function which, if performed by government, would certainly constitute a monopoly. The 20 433 F. 2d 131 (8th Cir. 1970). * Id., at 137. 17a fact that the two states chose to create ‘a separate public service non-profit corporation to serve as the sole instru- mentality does not run afoul of the federal antitrust laws. We suggest the obvious distinction of Wiggins Airwa and Ladue Local Lines from the case at bar is that — Congress empowered the Armory Board to construct, maintain, and operate Kennedy Stadium, it was empower- ing the Armory Board to do what another governmental agency, such as the Interior Department, which does own the land and the stadium itself, could have done as straight-forward federal governmental action, i. e., operate the stadium with full authority to rent to exhibitors of football games. On the rationale of Ladue and Wiggins such governmental agency action would not be subject to antitrust challenge, nor is the Board’s management of the stadium per se challen, d. But what Congress did not do is create the Board as an instrumentality to own and manage the only professional football team to be allowed to play in the stadium ; hence, neither the Board nor the Redskins in this case are performing a function that a purely government agency itself could have performed. On this basis we consider that the rationale justifying holding the federal antitrust laws inapplicable to the state action in Wiggins and Ladue is not a rationale which supports the position of the appellees here. C. Joint efforts to secure governmental action. Two cases relied on by appellees here have been ci n cited — as —— as Parker v. Brown for the proposition ere 8 action can be found th icati — toe "4 e application of the In an opinion heavy with overtones of First Amendment rights, the Supreme Court in Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc. legitimatized % 365 U.S. 127 (1961). 18a joint efforts by businessmen to influence legislative or executive action, holding that even actions designed to injure their competitors did not violate the Sherman Act. A construction of the Sherman Act that would dis- qualify people from taking a public position on matters in which they are financially interested would thus deprive the government of a valuable source of in- formation and, at the same time, deprive the people of their right to petition in the very instances in which that right may be of the most importance to them.” In United Mine Workers v. Pennington ™ a small mining company brought an antitrust action against larger min- ing companies and labor unions, alicging a conspiracy in violation of the Sherman Act, one of the objectives being to cause the Secretary of Labor to set unreasonably high wage rates and the ultimate objective being to put the small company out of business. The Supreme Court followed Noerr and held that joint efforts to influence public officials do not violate the antitrust laws even though intended to eliminate competition.’™ First Amendment rights following Noerr and Penning. ton were given their most expansive treatment in United 0 Id., at 139. 90 381 U.S. 657 (1965). Id., at 670. Without at this moment analyzing what the Con- gressional Act authorizing Kennedy Stadium does contain in the way of an antritrust exemption, we point out that if the Redskins had lobbied with Congress for a specific provision in the Stadium Act stating that in order to secure a long-term lease the stadium would be leased for professional football exclusively to one team, the activities of the Redskins in lobbying for such a provision would have fallen squarely within Noerr and Pennington, and clearly would have been valid as an exercise of First Amendment rights. 19a States v. Johns Manville Corporation,” -where it was held that activities engaged in to influence the decisions of public procurement officials on product specifications so narrowly as to eliminate the products of competitors, ‘‘are constitutionally protected and cannot be the basis of a finding of violation of the antitrust laws, . . regardless of the intent with which they were undertaken.“ * The Justice Department did not take an appeal from dismissal of the Johns Manville complaint by the District Court, and thus the rule of Noerr-Pennington was expanded to legiti- matize combinations to influence the government’s actions as a purchaser in the market, not only when acting in a sovereign legislative or regulatory capacity.“ In the case at bar the government agency, the Armory Board, is not acting as a purchaser in the market, but rather as a seller of facilities in which football games can be played. If Johns Mamville were binding precedent, the appellees’ reliance on the Noerr-Pennington doctrine would be better placed. But even at the time of the Johns Manville Dis- trict Court decision there were perspicacious observers * who predicted that the District Court opinion had given unwarranted scope to the Noerr doctrine and that ulti- mately application of the antitrust laws would prevail. On the precise issue of Johns Manville the First Circuit in George R. Whitten, Jr., Inc. v. Paddock Pool Builders, Inc.“ reached precisely the opposite result. For purposes of the appeal from the District Court summary judgment dismissing the plaintiff’s treble damage antitrust com- plaint, the Court of Appeals assumed that the defendant 259 F. Supp. 440 (E.D. Pa. 1966). Id., at 453. ** See generally S. Oprennem & G. WzsTon, FEDERAL ANTI- : Trust Laws 160-162 (3d ed. 1968). * See ANTITRUST AND TRADE REGULATION Topay 87 (J. Scott ed. 1969). 424 F.2d 25 (1970). 20a Paddock had combined with architects and others to write the specifications for pipeless swimming pools bought by public agencies in a way that would exclude competitors. The plaintiff Whitten was in the same business as Pad- dock, and alleged damages by these acts of Paddock, which were contended to be in violation of the antitrust laws. Paddock defended on the valid governmental action theory of Parker v. Brown and the rationale of Noerr- Pennington that under the First Amendment its efforts to influence public officials could not be in violation of the anti-trust laws. In a carefully reasoned opinion Judge Coffin and the First Circuit rejected both retionales. In rejecting Parker v. Brown as binding precedent, the First Circuit stressed, ‘‘Our reading of Parker convinces us that valid government action confers antitrust immunity only when government determines that competition is not the summum bonum in a particular field and deliberately at- tempts to provide an alternate form of public regula- tion.“ In rejecting the Noerr analysis as applicable, the Court of Appeals said, ! The key to this decision, . . is the Court’s heavy emphasis on the political nature of the railroad’s ac- tivities and its repeated reference to the ‘‘passage or enforcement of laws.“ The entire thrust of Noerr is aimed at insuring uninhibited access to government policy-makers. ... By ‘‘enforcement of laws’’ we understand some significant policy determination in the application of a statute, not a technical decision about the best kind of weld to use in a swimming pool gutter.““ The First Circuit also rejected Pennington, saying: The state legislatures, by enacting statutes requiring public bidding, have decreed that government pur- Id., at 30. 88 Id., at 32. 2la chases will be made according to- strictly economic criteria. Paddock is free to seek legislative change in this basic policy, but until such change is secured, Paddock’s dealings with officials who administer the bid statutes should be subject to the same limitations as its dealings with private consumers We conclude, therefore, that the immunity for efforts to influence public officials in the enforcement of laws does not extend to efforts to sell products to public officials acting under competitive bidding statutes.” In Trucking Unlimited v. California Motor Transport Co., the Ninth Circuit likewise declined to apply the Noerr- Pennington exemption. There trucking firms had united to oppose competitors’ requests for certification with the Oalifornia Public Utilities Commission and the Interstate Commerce Commission. The combine of trucking firms threatened to use its cumulative financial and legal weight to block any action by the regulatory Commission. The Ninth Circuit said: The fundamental reason for the Noerr-Pennington ex- ception does not apply. It is not the function of the courts to determine whether laws restraining trade will be adopted or, having been adopted, whether they will be enforced; nor is this the function of an ad- ministrative agency engaged in adjudication, .... It would be pointless to limit the reach of the Sherman Act in order to protect the access of courts and agen- cies engaged in adjudicative functions to information and opinion relevant to determinations they have no power to make.“ 8° Id., at 33. 4° 432 F. 2d 755 (9th Cir. 1970). Id., at 758-759. = The court in Trucking Unlimited apparently considered that an adjudicative agency was in a position similar to a governmental agency charged with procurement, as in Paddock Pool. In neither case was the governmental agency in a position to make governmental policy, it was obligated to carry out the policy as already made, hence the rationale of Noerr-Pennington, guaranteeing access of private parties in combinations which would otherwise be illegal under the antitrust laws to influence such agency simply did not apply. Trucking Unlimited illustrates again that the determina- tion that a state agency and state action are involved ‘‘is only the beginning of the inquiry.’’ In this category of joint efforts to secure governmental action we are dis- cussing belongs, of course, Woods Exploration and Produc- ing Co., Inc. v. Aluminum Company of America, supra, already analyzed in full. D. Federal government regulation of business. We have deferred an examination of decisions relating to federal government regulation of business until last for several reasons. Both parties in the case at bar relied most heavily on the decisions involving state action. The Supreme Court decisions in Parker, Noerr, and Penning- tom contained over-broad language in regard to the effect of state action on the applicability of the antitrust laws, and, in our opinion, subsequent decisions in lower courts have not always fully taken into account the rationale behind those Supreme Court decisions. On the other hand, the decisions on the applicability of the federal antitrust laws where federal regulation of business is involved have always proceeded on a different basis. As has been observed, Each of the regulated industries presents a unique problem when its status under the antitrust laws needs definition or clarification. The Supreme Court 23a has taken the position Congress has the responsibility of deciding the role of competition for each regulated industry. Therefore, each case is decided on the basis of the wording of the particular statute involved. A detailed study of the legislative history and an as- sessment of the ‘‘pervasiveness’’ of the ‘‘regulatory scheme’’ set out in the particular statute are ear- marks of each of the Court’s opinions on the function of antitrust policy in regulated industries.“ While the leasing of public stadiums to professional sports teams is not a regulated industry, it should not be forgotten that that Stadium Act and the antitrust laws were both enacted by the same legislative body, i.e., the U.S. Congress. Therefore, there arises a similar problem of determining congressional intent as to the applicability or non-applicability of the antitrust laws, as we frequently have in the case of a federal government regulated indus- try. And, as mentioned above, some of the cases relied on most heavily by both parties, e.g., Parker v. Brown, have to do with state regulated industries. Therefore, it is clear that the way the Supreme Court and other courts have analyzed the applicability of the antitrust laws in federal regulated industries is highly pertinent to the analysis we make here of the Stadium Act, the applicability of the antitrust laws to that Act, and the action of the Armory Board taken thereunder. In Silver v. New York Stock Exchange“ the Court con- sidered ‘‘the proper approach to this case, in our view, is an analysis which reconciles the operation of both statutory schemes with one another rather than hold- ing one completely ousted. The Securities Exchange Act contains no express exemption from the antitrust laws 1 ANTITRUST AND TRADE REGULATION Topay 241 (J. Seott & Rockefeller ed. 1967). * 373 U.S. 341 (1963). 24a or, for that matter, from any other statute.“ The Court therefore held that the action here taken by the Exchange would clearly be in violation of the Sherman Act unless justified by reference to the purposes of the Securities Exchange Act, and that such relevant purposes did not require immunizing the Exchange from liability for treble damages. In United States v. Philadelphia National Bank“ the Court likewise declined to find that the antitrust laws (87 of the Clayton Act) did not apply, in spite of the broad regulatory powers given the Comptroller of the Cur- rency. This was followed by United States v. First Na- tional Bank and Trust Co. of Lexington,’ in which the Court again held that bank mergers approved by the Comptroller are subject to antitrust laws and may be pro- hibited by §1 of the Sherman Act. On the same day in United States v. El Paso Natural Gas Co.“ the Court similarly held that Federal Power Commission approval of a utility merger does not render non-applicable the anti- trust merger provisions of §7 of the Clayton Act. However, in the Panagra case“ the Court found that ‘‘the Board is empowered to deal with numerous aspects of what are normally thought of as antitrust problems,’’ that the acts charged in this civil suit as antitrust viola- tions are precise ingredients of the Board’s authority, Id., at 357. Id., at 364. 374 U.S. 321 (1963). ‘7376 U.S. 665 (1964). *8 376 U.S. 651 (1964). 4% Pan American World Airways v. United States, 371 U.S. 296 (1963). 5° Id., at 305. 25a and thus the complaint should have been dismissed." Like other regulatory agency cases involving the applicability of antitrust laws, the Panagra decision was posited squarely on the particular statute under which the Civil Aerorantics Board operates; hence, this contrai; result is by no means inconsistent with the Supreme Conrt’s decisions in the other cited cases. As another example, in United States v. Radio Corporation of America™ the Court held that the Federal Communications Commission had no authority to decide antitrust issues. The Federal Communications Act“ explicitly makes the antitrust laws applicable to the broadcast industry. The maritime industry operates under the power of the Federal Maritime Commission specifically to grant exemp- tions from the antitrust laws. This power is not to be exercised loosely, hence in Federal Maritime Commission v. Aktiebolaget Svenska Amerika Linien (Swedish Ameri- cam Line)™ the Court upheld the Commission regulation that shipping ‘‘conference restraints which interfere with the policies of the antitrust laws will be approved only if the conferences can show that they are required by a serious transportation need, necessary to secure impor- tant public benefits or in furtherance of a valid regulatory purpose of the Shipping Act.“ ™ : From this review of recent regulatory agency cases involving the applicability or non-applicability of the anti- trust laws, it clearly emerges that Congress knows how to The Court construed the antitrust exemption to be only as broad as specified in the statute. We, therefore, refuse to hold that there are no antitrust violations left to the Departm t of Justice to enforce. (At 305). * 52 358 U.S. 334 (1959). 50 47 U.S.C. 151 et seg. 390 U.S. 238 (1968). Id, at 243. (Emphasis supplied.) 26a spell out an exemption from the antitrust law when it — to do so, e. g., the CAB and the FMC, where the agencies give consideration to antitrust policy * but make the initial decisions themselves, and in contrast to pro- ceedings in the Federal Communications Commission, where any action by the FCC is specifically open to anti- trust challenge. When the Congress was dealing with foot- ball and other sports,“ it passed a special statute which permits professional sports teams to negotiate for all league members for television rights, and provides that „It jhe antitrust laws. . . shall not apply to any [such] joint agreement It also reaffirmed the usual applicability of the antitrust laws to any other contract ‘‘by, between, or among persons engaging in, conducting, 86 Two recent decisions of our court should be noted, although the issue of the non-applicability of the federal antitrust laws was not directly raised. In Marine Space Enclosures, Inc. v. F. M. C., 137 U.S. App. D.C. 9, 420 F.2d 577 (1969), FMC approval of a contract between New York City and the New York Port Authority containing restrictive covenants was challenged. This court re- manded the case to the Commission for further proceedings fully exploring the antitrust questions arising from the restraints in the contracts. It may be implied from this ruling that even though the antitrust laws do not invalidate contracts approved by the Federal Maritime Commission, and this contract was between gov- ernment entities, yet the responsible governmental body, i. e., the FMC, was required to give due consideration to national antitrust policy. In National Aviation Trades Association v. C. A. B., 136 U.S. App. D.C. 367, 420 F.2d 209 (1969), this court had before it an airport management contract between Pan American Airways and the New York Port Authority, somewhat similar to that in- volved in Wiggins Airways, supra. The Federal Aviation Act requires the CAB to weigh the antitrust considerations, and hence this court reviewed the record supporting the Board’s findings that the contract would not create a monopoly in violation of the national antitrust policy. * Telecasting of Professional Sports Contests Act, 15 U.S.C. § 1291 et seg. 38 16 U.S.C. § 1291 (1961), as amended, 15 U.S. C. § 1291 (1966). 27a or participating in the organized professional team sports of football. III. The District of Columbia Stadium Act and the Claimed Nomapplicability of the United States Anti- trust Laws The appellees make as part of their principal argument a claim that the provisions of the District of Columbia Stadium Act exempt the stadium lease from application of the antitrust laws. In support of this they point to the specific language of the Stadium Act and its legislative history. A. The Statute. The D.C. Stadium Act does provide in part: In order to carry out the purposes of this subchapter, the Board is authorized without regard to any other provision of law,... (1) to determine all questions concerning the use of the stadium... (8) to rent or lease from time to time for any of the purposes of this subchapter, all or any part or parts of the stadium. . for such periods of time as the Board shall determine . It is on the language without regard to any other provi- sion of law’’ that appellees primarily rest their case that the U.S. antitrust laws do not apply to a lease of the stadium for any purpose, including a lease requiring exclusive use by one professional football team for thirty years. 50 15 U.S.C. § 1294. 2 D.C. Code § 1728. (Emphasis supplied.) 28a The appellees do recognize however, that the expression „without regard to any other provision of law’’ does not confer a limitless exemption. Deposition testimony con- sidered by the trial court in ruling on the summary judgment shows that responsible officials of the Armory Board consider that operation of the stadium is subject to all the police, fire, and health regulations in the Dis- trict of Columbia. Administrative practice is in accord with this interpretation. And counsel for the appellees on oral argument said that of course the Armory Board has no power to lease the stadium for an illegal purpose. Congressional statutes, we are told, and we agree, should not be interpreted so as to lead to absurd or obviously un- intended irrational results. But exemption from the criminal and public safety statutes is not the only result which might be characterized as irrational and therefore not intended. Certainly the strong policies against behavior deemed by Congress criminal or hazardous to public safety militate against any conclusion that in passing subsequent legislation Congress intended to authorize such conduct. Yet other statutes further policies so basic to our social structure that—in the absence of unequivocal exemption therefrom, either by specific statutory language or by a purpose to enforce other policies of equal or greater importance—it would be irrational to imply that Congress intended to authorize the conduct they prescribe. Preeminent among these are the antitrust laws, designed to preserve free enterprise by prohibiting restraints upon free competi- tion. Under the wording of §1728 the Board is authorized without regard to any other provision of law to carry out the purposes of the subchapter, which are defined in § 1720 as to provide . . a stadium suitable for holding athletic events and other activities and events of a nature requiring such a facility... . Of particular significance 29a to our analysis is subparagraph (3) of. § 1723, which au- thorizes the Board to acquire property and equipment necessary to carry out these purposes ‘‘except that no contract for more than $3,000.00 shall be entered into for the purpose of this paragraph without competitive bid- ding. (Emphasis supplied.) This latter language indicates that Congress considered that the exemptive expression relied upon by appellees made it unnecessary for the Board to follow any specific competitive bidding regulations in letting ordinary con- tracts, and so, under this subparagraph, it was necessary to provide for the use of competitive bidding in letting larger contracts having a value in excess of $3,000.00. More than Congress’ preoccupation with such regulations, however, this language indicates to us Congress’ concern to preserve the competitive spirit in larger contract offer- ings, even at the expense of its declared goal of permitting the Board to operate the stadium as a private venture. Consistent with this, it is difficult to understand: first, if Congress intended the phrase ‘‘without regard to any other provision of law’’ to embrace the antitrust laws, why it adopted an anti-free competition attitude in regard to the largest and most important contracts—for long-term rental—the Board was authorized to make, while carefully preserving competition by requiring competitive bidding on other contracts over $3,000.00; second, if Congress did intend to exclude the applicability of the antitrust laws, why it did not do so in language as clear and specific as that used to define the applicability of the competitive bid- ding statute. There is simply no reference in the Stadium Act (or in its legislative history) to the antitrust laws specifically. We are not cited to any other federal statute with lan- guage comparable to that of the Stadium Act which has been construed to rule ont the applicability of the anti- trust laws. 30a B. The legislative history. Looking at the legislative history of the Act, we find no support for the argument that Congress intended to place the activities of the Board under § 1723 beyond the pale of the antitrust laws. In fact, the inferences we gather from examining the legislative history point to the opposite con- clusion. A statement made by Senator Bible, the then Chairman of the District of Columbia Committee, when he was re- porting to the Senate on an amendment to subparagraph (6) of § 1723, dealing with concessions in the proposed stadium, is relevant: The Committee felt that, inasmuch as the stadium is to be in the nature of a private venture, it was more desirable that the Board be vested with the authority to make its own decisions as to the letting of concessions, without making restrictions on the Armory Board. (Emphasis supplied.) = This bit of legislative history indicates the motivations behind the drafting of the Stadium Act. Though in reality run by the Government, the stadium was to be in the nature of a private venture. It therefore follows that the Committee must have intended the stadium’s operator, the Armory Board, to be free from the aegis of those regulations applying to government agencies which would hamper functioning as a private business. These would include competitive bidding and federal procurement regulations, but would not include the antitrust laws, to which private businesses are subject; hence, the strong inference that the expression ‘‘without regard to any other provision of law’? was meant by Congress to refer only to regulations applying to government agencies. 61 103 Cone. Rec. 13567 (1957). 3la In arguing for the conclusion that Congress did intend the Board’s leasing activities to be exempt from the anti- trust laws, the appellees stress that it was essential for the construction of the stadium and its subsequent profit- able operation (it has not been profiitable) that the Armory Board enter into a long term lease with the Redskins foot- ball team, and that Congress knew this. In fact, it is fair to say on the congressional testimony that the stadium would not have been built without a long-term lease from both the Redskins professional football team and the Washington professional baseball team. This is not to say, however, that the leases could not have been secured without the restrictive covenant giving exclusive rights wit respect to any particular form of use, and the appellees concede that there is nothing in the legislative history which mentions the question of whether the Redskins or any other tenant would be given such a restrictive covenant. Whether the Redskins would have signed a thirty-year lease without such a restrictive cove- nant is entirely speculative, but it is fair to point out that appellants’ argument that there is no place in the District of Columbia suitable for professional football other than Kennedy Stadium is uncontradicted, that the Redskins might have been faced with the alternative of having no access at all to Kennedy Stadium unless they did sign a long-term lease, and that the possibility of bringing in another professional football team of a competitive league could not have been excluded. C. Comparative importance of the policies behind the Sta- dium Act and national antitrust policy. We think it significant that in those cases where the antitrust laws were held not to apply there was a na- tional or state policy of importance approximately equal to the antitrust laws involved. For example, in Parker v. Brown the state action was regulation of an important 32a agricultural product, and a state regulation completely consistent with the federal Agricultural Adjustment Act. In Noerr and Pennington the constitutional First Amend- ment rights formed the underpinning of the decision that the actions of the private parties there in soliciting gov- ernmental action were not in violation of the antitrust laws. Similarly, in the federal regulatory cases such as Silver, Philadelphia Bank, and others discussed above, there was a conscious or implied evaluation of the im- portance of the national policy reflected in the creation of the regulatory agency compared with that of the federal antitrust laws. The agency’s responsibilities, the ‘‘per- vasiveness of the regulatory scheme, the extent to which the agency itself was called upon to pass upon antitrust considerations, and the degree to which it had in fact done so as reflected in the record,” were all considered. Since the creation of the regulatory agency and the definition of its responsibilities stemmed from the same source as the antitrust laws, i. e., the U.S. Congress, an effort was made to reconcile the possibly conflicting national policies. In almost every case there is a reiteration of the theme that repeal or immunity or exemption from the federal anti- trust laws will not be lightly implied. We suggest that the action of Congress in providing a public stadium for the District of Columbia, while a gov- ernmental act of considerable importance to this particular community, hardly rises to the same dignity or furthers as important policies as the action of Congress in regulat- ing the securities exchanges, the national banks, oil and gas pipelines, aviation or maritime routes, and that if in the consideration of cases arising from those federal regulatory agencies it is necessary for the Supreme Court and other courts to examine the extent to which the anti- en See, e. g., this court’s decisions in Marine Space Enclosures Inc. v. F. MH. C., swpra, and National Aviation Trades Association v. C.A.B., supra 33a trust laws apply,“ it is reasonable to hold here tha „ t we must find a definite, clearly expressed, specific intent of Congress to rule out the applicability of the antitrust laws to the acts of the Armory Board be ton tees ee ry fore such exemp- On examination of the statute, the legislative his the administrative practice, a . the — Aet with other federal statutes referring or not referring to antitrust applicability, and the relevant cited cases, we do not find that the applicability of the federal antitrust laws has been excluded. We therefore hold that the validity of the thirty-year lease between the appellees Armory Board and Pro-Football, Inc., must be tested in accordance with the United States antitrust laws as usually applied to contracts between private parties. For trial on the merits in accordance with this opinion the judgment of the District Court is reversed and the case Remanded. 63 a dame ey tn cited cases, the rule generally is that the anti- A — 2 unless there is a specific exemption, as in the cases; and, even in those, there must be a showing in the record that the regulato the antitrust implications in its deln 0 a | Judgment TRIS cAUsE came on to be heard on the record on appeal from the United States District Court for the District of Columbia, and was argued by counsel. Ox CONSIDERATION THEREOF It is ordered and adjudged by this Court that the judgment of the District Court appealed frora in this cause is hereby reversed, and this case is hereby remanded to the District Court for a trial on the merits, in accordance with the opinion of this Court filed herein this date. Per Curiam For the Court: NarRHAx J. Paulo Nathan J. Paulson Clerk Dated: April 27, 1971. Opinion by Circuit Judge Wilkey. 35a APPENDIX BB . UNITED STATES DISTBIOT COURT FOR THE DISTRICT OF COLUMBIA Civil Action No. 2815-66 Norman F. Heont, get AL., Plaintiffs, v. PRo-FoorgALL, Inc., ET AL., Defendants. OPINION This action, as asserted by the plaintiffs in their second amended complaint, was brought against the defendants under § 4 of the Clayton Act (15 U.S.C. § 15), to recover treble damages and obtain injunctive relief because of al- leged violations by the defendants of §§1, 2, and 3 of the Sherman Act (15 U.S.C. §§1, 2 and 3). Only the first three claims of plaintiffs’ second amended complaint are pertinent to the matter before the Court. Those claims are set forth separately in what plaintiffs have de- nominated Counts 1, 2 and 3. The plaintiffs and some of the defendants have filed cross motions for partial sum- mary judgments.’ The defendants joining in a motion for partial summary judgment are the National Football League, the District of Columbia Armory Board and its individual members, and Pro-Football, Inc., hereinafter referred to as ‘‘Red- skins. 9932 1 Certain other defendants named in the second amended com- plaint were either served and thereafter dismissed or have not been served. * Pro-Football, Inc. is a corporation which owns and operates in the District of Columbia a professional football team as a member of the National Football League. That team is known as the Washington Redskins. 36a Count 1 of the second amended complaint charges the defendants with entering into a contract in restraint of trade in violation of §§ 1 and 3 of the Sherman Act. Count 2 of the second amended complaint charges the defendant Redskins as being engaged in an attempt to monopolize the business of professional football in the District of Columbia in violation of §§2 and 3 of the Sherman Act. Count 3 of the second amended complaint charges the de- fendants Redskins and the National Football League of having been engaged and now being engaged in an unlawful conspiracy to restrain and monopolize, and of engaging in an attempt to monopolize, and of having monopolized, the business of professional football in the District of Colum- bia in violation of §§ 1, 2 and 3 of the Sherman Act. Essentially the charges made by plaintiffs in Counts 1, 2 and 3 of the second amended complaint arise out of a lease agreement made on December 24, 1959, between the District of Columbia Armory r ha the — - — particularly paragraph II (e) o agreement. By — 7 Armory Board leased to the Redskins for a period of 30 years, beginning with the football season of 1961 and terminating at the conclusion of the football sen- son of 1990, the now named Robert F. Kennedy Stadium for the purpose of exhibiting all Redskins home profes- sional football games. The lease provided that at no time during its term would the stadium be let or rented to any professional football team other than the Redskins. Plain- tiffs assert that that restrictive covenant constituted a con- tract in unreasonable restraint of the business of profes- sional football in the District of Columbia; that it granted the Redskins a monopoly of the business of professional football in the District of Columbia. And plaintiffs fur- ther assert that the restrictive covenant resulted from an unlawful combination and conspiracy being engaged in by the Redskins and the National Football League to restrain and monopolize professional football in the District of Columbia. 37a The undisputed facts disclose that the Redskins is a pro- fessional football team and the only football team which engages in the exhibiting of professional football games in the District of Columbia. The National Football League is an unincorporated association of professional football teams located in several cities in the United States. The Redskins is a member of the National Football League and it plays football games with other teams which are mem- bers of the National Football League. The schedules of such games are made up by the National Football League and certain services, such as game officials, are made avail- able to the participating teams by the National Football League. The Redskins have been engaged in exhibiting professional football in the District of Columbia for a period of more than 25 years. Plaintiffs Hecht, Kagan and Miller describe themselves as joint venturers who desire to participate in the owner- ship of a professional football team that would play its games in the District of Columbia. They assert that be- cause of the restrictive covenant in the Redskins lease with the Armory Board they were unable to organize an Ameri- can Football League team and a Continental Football League team in the District of Columbia. Plaintiff Wash- ington Federals, Inc. is a corporation created for the purpose of organizing and operating in the District of Columbia a professional football team. Plaintiffs Hecht, Kagan and Miller own all of the stock of the Washington Federals, Inc. Plaintiff United States Football League, Inc. is a non-profit corporation which Hecht, Kagan and Miller helped to form. The Washington Federals, Inc. is allegedly a member of the United States Football League, Inc. Neither the Federals nor any other fran- chise holder in that League has ever employed coaches and players let alone fielded a team or played a game. The American Football League, at the time plaintiffs, Hecht, Kagan and Miller announced they were interested in organizing a Washington team in that league, was a 38a separate and competing league from and with the National Football League. Since the institution of this action in 1966, the National Football League and American Football League have merged. That merger [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_0635%3A1. Public record. Not legal advice.