USFL Awarded Only $3 in Antitrust Decision : Jury Finds NFL Guilty on One of Nine Counts
National Football League was found guilty Tuesday of violating an antitrust law but survived the United States Football League’s $1.69-billion suit here when a bothered and bewildered jury of five women and one man awarded damages of just $1 to the failing football league.
Damages in antitrust cases are tripled, so the award given to the USFL will actually amount to $3.
The verdict, coming after about two years of pretrial litigation and 2 1/2 months of trial testimony, shook Courtroom 318 in Manhattan’s U.S. District Court. But it will shake the USFL far more, perhaps to the ground. Although the decision certainly discredits the NFL, it probably dooms the USFL which, in its fourth year, had planned to switch to fall play in direct competition with the NFL but without the established league’s television revenue sources.
What the jury decided, after 31 hours of deliberation over five days, was that not only does the NFL enjoy monopoly power, but it also unfairly conspired to gain its competitive edge and did in fact violate antitrust law--"to exclude competition within major league football.”
That constituted one of nine charges against the NFL. Among other things, the jury could not determine that the NFL, as the USFL had insisted, actually prevented the USFL from obtaining “access to a national broadcast television contract.”
Said jubilant NFL co-counsel Frank Rothman: “Number one, this means the lawsuit was not a TV case. They’re (the jury is) saying, ‘We believe the NFL, that the USFL sought to force a merger.’ They’re saying you can’t use the court to do that.”
The NFL had contended that, of course, it enjoys a TV monopoly but can’t really help it. That was established by an act of Congress in 1972, 12 years before the USFL played its first down.
As far as the USFL goes, the NFL said, the new league’s failure was simply bad management and, finally, a merger mania mandating that it play opposite the established league in the fall. As NFL Commissioner Pete Rozelle said, “They shot themselves in the foot.”
Rothman said further: “Number two, to show how upset they were, they assessed damages of $1, an absolute slap in the face as far as I’m concerned.”
Likely, it is a knockout blow. Without a large judgment to go along with an otherwise favorable verdict--the kind of judgment that would enable the USFL, which has lost nearly $200 million in its three years of existence, to continue, or without the injunctive relief that would strip one of the three networks from the NFL and make it available to the USFL--the “victory” is hollow.
“We showed what we tried to show--that the NFL acted unlawfully to injure us,” USFL Commissioner Harry Usher said. “The jury agreed that the NFL acted in a predatory fashion, but then whitewashed the damages.”
Shaking his head, he said: “They found all the right things, just no damages.”
USFL attorney Harvey Myerson found no consistency in the verdict either. “I can’t fathom it,” he said. “We did our job. We persuaded the jury of violations, in a case the NFL said was a nonsense case. But then they didn’t nail them like I asked them to.
“To me, it’s inconceivable. I mean, this is an interesting finding: Yes, there was conspiracy, yes there was intent. And then they say there was no overt act.”
Myerson had told the jury, and everybody else, that without a huge settlement, the USFL would surely die. Usher would not admit to that, saying only that the league’s fate would be determined at an owners’ meeting in New York on Aug. 6. Some of the USFL clubs still intend to open camp in mid-August, but others were more realistic.
“We’re lost now,” said Rudy Shiffer, vice president of the Memphis Showboats. “We’re dead.”
But if the USFL principals didn’t understand what happened--how they could win a case and lose a league--they should know that the jury didn’t understand it either. The jury finished the trial in as much confusion and misunderstanding as it had begun.
It developed that one or more of the jurors thought that the judge would establish the damage claim. Miriam Sanchez, who had favored the USFL cause, said the award was a compromise among jurors. “Definitely a compromise,” she said outside the courtroom, as thunder rumbled above. “One dollar was all we could do, or we’d have a hung jury.”
She said that three of the six jurors had favored the NFL and that three others wanted to award damages as high as $300 million to the USFL. But they were so boggled by the task at hand, Sanchez said, that they decided on the $1 amount, believing that Judge Peter K. Leisure would understand that as a signal for him to decide the damage award. “I felt we had to put our faith in the court,” she said.
When the USFL’s Myerson heard this, he was nearly apoplectic. “She said what ?” he asked. “That is not the procedure. I don’t understand this.”
Then he began asking reporters for their notes, the better to establish a need for a retrial or appeal, which he said was certain.
Just as the NFL and USFL had diverged on key issues, so did the jurors. And like the football leagues, they could come to no agreement. Tuesday, their fifth day of deliberation, they were still divided, 3-3, and it was getting intense.
“Very intense,” said the very proper Margaret Lilienfield, a retired foreign liaison originally from England. “Some of them were very emotional,” she sniffed. “It quite gave me a headache.”
Sanchez, who had tried to argue against Lilienfield’s NFL position, became hopeless Tuesday when it appeared that some of the jurors were ready to leave the room on a stretcher, just so they could leave. “A few of us were getting sick,” she said.
She added that she was having headaches and palpitations and that Patricia McCabe had a heart murmur.
“We were not getting anyplace,” she said. “We all knew where we stood. We were screaming at each other, calling each other names. The only person who kept his cool was the man (Stephen Ziegler).”
As far as name calling went, it evidently didn’t get way out of hand.
“I was called frivolous,” said Sanchez, a high school teacher in the Bronx. “It’s the worst name I’ve ever been called.”
The jurors’ conflict had been anticipated. Courtroom observers quickly sized up antagonism between Sanchez, believed to be in the USFL’s corner, and Lilienfield, thought to be more persuaded by the NFL.
Evidently the attorneys sized it up, too, as Myerson, a flamboyant and emotional lawyer, continually played up to Sanchez. He mentioned her by name four times in his closing argument. She seemed to appreciate it.
Lilienfield, however, was not much swayed by Myerson’s style. Myerson had tried to make it David vs. Goliath, trying to convince the jury that the USFL needed only a little of what the NFL had unfairly bullied its way to.
“A brilliant characterization by Mr. Myerson,” Lilienfield said in an Alistair Cooke accent. “Brilliant on Mr. Myerson’s part. But we really must be logical, mustn’t we? Some of us were identifying too much with the little guy when there really aren’t any little guys. The USFL is a big guy, too.”
When it went to logic, the jurors had to concede that the NFL had not behaved like choirboys. “We really didn’t like the Oakland deal very much,” Lilienfield said, referring to Raider owner Al Davis’ testimony that the NFL had destroyed the Oakland Invaders by dangling an NFL franchise before the city.
“Also, there was the Porter presentation,” Lilienfield said.
That was the so-called “smoking gun,” the Michael Porter seminar at Harvard Business School convened by NFL executives on how to conquer the USFL. The USFL had pointed out the conspiracy, but the NFL countered that although the seminar had indeed occurred, nothing was ever done about it.
Lilienfield said there were some things that could be explained by the Porter presentation, including the signing of USFL players, but “nothing concrete.”
Even Sanchez agreed that “everything was circumstantial.”
Another important point in the case was the relative credibility of Rozelle and of New Jersey General owner Donald Trump, who offered widely differing accounts on a meeting they had.
According to Trump, Rozelle suggested an NFL franchise--acceptance of Trump’s team--if Trump would keep the USFL out of litigation. Rozelle testified that he had met with Trump just to see what he’d say.
Counsel for both sides hammered at the poor credibility at hand. Myerson, in his summation, repeatedly referred to the commissioner as Alvin Peter Rozelle, with complete disdain for Rozelle’s honesty. Rothman characterized Trump, a wealthy New York builder, as the worst kind of snake who was selling his colleagues down the river so he could affect a merger of a few rich teams.
In the end, jurors didn’t particularly like either man. Sanchez felt that Rozelle was trying to “cover up” something. “Definitely a cover-up. He was being devious (in his testimony).”
On the other hand, she said: “Trump had us completely befuddled. Why would he call Rozelle if he wasn’t meeting him with some ulterior motive.”
The NFL’s Rothman saw it for the NFL, though. “In the discrepancy between Rozelle and Trump, they evidently didn’t believe Mr. Trump,” he said.
It was clear that the jurors didn’t like the way the NFL operated. They definitely didn’t like the way the NFL gathered to concern itself with the fate of this upstart league.
“If it was such a badly managed league, why not leave them alone, hang by their own tail,” Sanchez said. “But the NFL was obviously afraid of competition.”
She admitted, however, that the jury could agree on little testimony that the NFL actually acted to injure the USFL, especially in the important area of TV contracts. The USFL, using the testimony of Howard Cosell among others, tried to show that the NFL, so influential was it in the awarding of Super Bowl TV contracts, “pressured” the networks into avoiding the USFL, which once had ABC-TV and ESPN contracts.
“But it was too circumstantial,” Sanchez said.
Said Lilienfield: “There was no interfering with contracts.”
Summed up Rothman, rephrasing the entire NFL defense: “What the jurors said is that the NFL monopolizes football, not TV.”
The NFL, though besmirched by the testimony and somewhat by the verdict, nevertheless was jubilant. Had the USFL won a large settlement and injunction, each club except the Raiders, the only one of 28 NFL teams not named in the suit, could have been assessed damages of $55 million and might have been ordered to drop one of its three network contracts.
Instead the verdict, which was read in confusion by McCabe, as she answered 26 questions from the verdict sheet, produced more legal confusion and little USFL satisfaction.
Said Myerson: “I feel great satisfaction and vindication, especially as our case supposedly had no merit. But it was important to ensure this behavior wouldn’t be tolerated. We’re delighted we were able to bring to attention their monopolistic intent, on each and every charge. Unfortunately, the jury is also saying they will allow them to go ahead and do it.”
Meanwhile, as the parties disappeared into subways and limousines in front of the old courthouse, Sanchez was standing alone, trying to figure out what had happened.
She talked of the moral victory she believed the jury had awarded the USFL and how the $1 award was the jury’s idea of a compromise. Told that she had misunderstood the idea of awarding damages, she appeared momentarily stricken but then said, no matter, had she not agreed upon that there would surely have been a hung jury, so steadfast were the two sides.
The USFL, based on that information, promised to mount another charge but, in all likelihood, the league disappeared into the subways and limousines as well, just $3 richer.
--Margaret Lilienfield, Schenorock, N.Y., English- born, retired administrator for a NATO liaison group. College graduate, originally chosen as an alternate but replaced Wendell James, a Mount Vernon, N.Y., postal clerk, early in the trial.
--Patricia McCabe, Hawthorne, N.Y., reference clerk for AT&T.;
--Miriam Sanchez, Yonkers, N.Y., Panamanian-born, high school English teacher.
--Patricia Silbia, Mount Vernon, N.Y., computer technician, college graduate.
--Berenz Stephens, New York, West Indies-born, nurse’s assistant, college graduate.
--Stephen Ziegler, New York, radio newsroom clerk, college graduate.