Oakland files suit against Raiders and NFL
Oakland filed a lawsuit in federal court Tuesday challenging the relocation of the Raiders to Las Vegas, calling the move illegal and demanding compensation for hundreds of millions of dollars in losses.
The long-awaited suit against the Raiders, the National Football League and every other team in the league seeks damages for the “unlawful decision to boycott Oakland,” but does not ask for the Raiders to remain in the city. Oakland claims the NFL and its teams collude as an “illegal cartel” to demand that cities bankroll new stadiums with public funds or be shut out of the marketplace with team relocations.
On top of antitrust violations, the complaint alleges that the Raiders and NFL are violating their own policies and bylaws.
“The Raiders’ illegal move lines the pockets of NFL owners and sticks Oakland, its residents, taxpayers and dedicated fans with the bill,” City Attorney Barbara Parker said in a statement. “The purpose of this lawsuit is to hold the defendants accountable and help to compensate Oakland for the damages the defendants’ unlawful actions have caused and will cause to the people of Oakland.”
Representatives of the Raiders and the NFL did not return requests for comment.
The city says league officials negotiated in bad faith and did not give serious consideration to its counteroffer to build a new stadium using a mix of
public and private funds. The 45-page complaint alleges that a $378 million relocation fee paid by the Raiders enriched the 31 other clubs and thus “skewed the bidding process.”
The suit notes that Raiders owner Mark Davis was among the beneficiaries of relocation fees paid by the Rams and Chargers in order to move to Los Angeles and alleges that none of the money actually goes toward relocation-related expenses.
“The NFL’s approval of the Raiders’ relocation — and its approval of the relocations of the Rams and Chargers as well — is a classic act of a cartel misusing market power to achieve monopolistic cartel payments and generating anticompetitive profits,” the suit says.
“By forcing host cities to choose between paying those monopolistic cartel payments — which far exceed the marginal costs of operating a professional football team — and losing the football team their citizens cherish, the NFL places host cities in a Hobson’s choice that all consumers of monopolistic goods and services face: pay up, way up, or lose.”
One expert questioned that logic. Relying on the argument that relocation fees encourage teams to move is “implausible” because the teams themselves pay that money, said Stuart Paynter, an attorney in Washington who teaches antitrust and sports law at Duke University.
Oakland is seeking triple damages from the Raiders and the NFL at trial but did not put a number on the amount. The city “invested and borrowed significant sums of money, totaling over $240 million” in the expectation that the Raiders would stay in the city and at the Oakland Coliseum, the suit claims.
And while Raiders games actually cost Oakland and Alameda County more than they bring in — due to expenses such as law enforcement and converting the field between football and baseball uses — the complaint says the city will lose money when the team leaves because of tax revenue and economic activity the Raiders generate.
Among the remedies Oakland’s suit is seeking is “disgorgement,” the repayment of illegally obtained profits.
The city tapped outside law firms Berg & Androphy and Pearson, Simon & Warshaw to work on the lawsuit on a contingency basis, meaning they won’t get paid unless they win.
St. Louis has a similar ongoing lawsuit against the NFL and the Rams, which moved to Los Angeles in 2016. In October, the Missouri Court of Appeals for the Eastern District declined to let the team and league resolve the fight through arbitration rather than in court.
In the 1960s Milwaukee sued, unsuccessfully, to keep its baseball team, the Braves, from moving to Atlanta, also on antitrust grounds. Ultimately, the city got the then-Seattle Pilots.
If Oakland succeeds, any ruling could impact how other host cities are treated during stadium and relocation fights. The suit argues that the NFL is illegally leveraging its monopoly power, which results in “an anticompetitive wealth transfer from municipalities to private business.”
Some experts are skeptical of Oakland’s likelihood of success .
Several of the legal claims Oakland is putting forward are novel, said Steve Ross, a professor who teaches antitrust and sports law at Penn State University. The city argues — correctly, Ross said — that the NFL is a monopoly, and yet its solution is not to break up the league.
“Nobody, including Oakland, seriously suggests that any team that wants to join the NFL should be able to do so,” Ross said. “They don’t want a competitive market. They want Oakland to be part of the noncompetitive market.”
What’s more, Ross said, the complaint admits that Las Vegas outbid Oakland, which goes against the anticompetition claim.
Since the city is neither a competitor nor a consumer, its standing to sue will likely be challenged by NFL and team lawyers, said David Levine, a UC Hastings law professor.
The Oakland City Council voted in July to authorize the suit. In response, the Raiders threatened to leave Oakland sooner than expected. The team and joint city-county board that oversees the Coliseum sports complex have been unable to reach a new lease agreement amid the specter of litigation.
The Raiders are not slated to move to Las Vegas until 2020, and where they play for the 2019 season remains unclear.