Good morning. Good morning. Amanda Bond for the
appellants and I'd like to reserve five minutes
for a bottle. Okay. In 2019, this court held
that if plaintiffs proved what we alleged, it
would be a naked violation of the antitrust laws
that one with even a rudimentary understanding
of economics could understand would harm customers.
Two summers ago, a unanimous jury found that
we proved just that. and the district court's
decision to nevertheless grant judgment as a
matter of law and summarily deny an injunction
was wrong and should be reversed. I'd first like
to address the exclusion of Dr. Rascher before
turning to the exclusion of two of Dr. Zona's
opinions. First, the unexplained exclusion of
the NFL tax model and second, the single competitor
model. and then finally I'll turn to the alternative
new trial order and the injunctive relief issue.
Thank you. Beginning with Dr. Rasher, the district
court committed at least three fundamental legal
errors and an abuse of discretion in excluding
the opinions of one of the nation's preeminent
sports economists whose expertise in the area
of NCAA sports and the intersection of antitrust
has been cited by the Supreme Court and this
court. First, The district court committed a
legal error under Alaska rent -a -car when he
excluded a yardstick comparison to top -tier
college football because of what the court believed
to be quote significant differences under image
tech and Say you fee all that is required for
a reliable yardstick in the first instance is
reasonable economic similarity And here, there
can really be no debate that there is reasonable
economic similarity between NFL football and
top -tier college games. This court recognized
the importance of the analogy. The NFL itself
compared its own telecasting system to that of
quote, top -tier college football in New Frontier.
And Dr. Rascher explained why the similarities
are so important. It is not only the same sport
played during the same season, but it has the
SBA though. Correct, they don't. And yet that
difference was accounted for by Doctor Rasher.
Doctor Rasher explained, for instance, that he
would expect in NFL football. The teams would
continue to pull their over the air rights because.
they're allowed to do so by the SBA. He provided
sample schedules in which they would continue
to do so, and yet there would be competition
for the paid television rights. And this was
not merely speculation by Dr. Rasher. This was
confirmed by the NFL's own new frontier analysis,
where they explicitly contemplated that even
if they continued to offer these in -market games
on CBS and Fox, There was sufficient demand in
the marketplace for the most popular content
on television, that all of the out of market
games would still be picked up on basic cable
channels. And so this difference was one that
Dr. Rascher explained. He took into account in
his analysis. And once he did so under Alaska
rent -a -car, it was for the jury to decide how
important that difference was. And perhaps that
is why the NFL did not raise this so -called
SBA difference as a reason to exclude the yardstick
and the district court's order did not either.
Second, the district court committed a further
error. requiring Dr. Rasher to project a false
certainty about the state of affairs that would
have definitively existed in a hypothetical but
for world that defendants misconduct prevented
from happening and in doing so he not only required
something that the field of economics does not
require and indeed could not offer but he contradicted
substantive antitrust law dating back to the
United States Supreme Court's decisions in Bigelow
and J. Truett Payne that have recognized repeatedly
the vagaries of the marketplace usually prevent
a plaintiff from saying with precision what would
have happened in the but for world. Here. Dr.
Rasher explained the core economic features of
the most likely, but for world miss bond I guess
with respect I'm trying to understand the limiting
principle in terms of is every yardstick in Here
your friends have testimony at trial that The
networks were not going to play that game that
they they were not going to That but for world
could not exist and they were the very people
on whom the butt for a world was built. What
do we do with that? I think what we do is we
say that's a fact question because the jury was
free to disbelieve the self -interested testimony
of witnesses from Fox and CBS whom the evidence
demonstrated were participants in the conspiracy.
And they could have instead, for instance, credited
the NFL's own internal analysis that demonstrated
that all the games would be carried furthermore.
The networks themselves Fox and CBS insisted
and received a contractual guarantee That direct
TV could not put these games on their basic channels
They had to make Sunday ticket and add on premium
priced subscription Trial exhibit 750 had Sean
McManus from CBS stating explicitly The concept
has always been these packages are sold at a
premium, thereby limiting distribution, and we
are concerned. If they are offered for a non
-premium price or even free, distribution could
grow significantly. A reasonable juror under
a Rule 50 standard could have said, you know
what? I don't think CBS, Fox, the NFL, and DirecTV
would have gone to such lengths to make a contractual
requirement that these games couldn't be on basic
channels unless they all, in fact, thought there
was a reasonable risk that that would happen,
but for the restraints. Ms. Bond, back on the
SBA point, did Dr. Rascher propose any opinion
that maintained the league -wide pooling arrangement
that seems to be protected by the SBA? Dr. Rascher...
testified that he was not challenging the league
-wide pooling of the over -the -air telecast
rights. And in fact, he repeatedly stated that
the league -wide pooling of free over -the -air
telecast rights was protected, and he would expect
in the but -for world the teams, if allowed to
collude, would continue to. The opinions that
he offered were that in a but -for world, they
would not have been allowed to also require 100
% pooling of the team's separate paid telecast
rights. And in the absence of that restraint,
we can look at what happened in college football
when the Supreme Court struck down a similar
restraint. And within six weeks, these teams
were able to rearrange their affairs, and the
output of telecasts shot up dramatically. And
that's why today, even though college football
is second in popularity to the NFL, There is
an overwhelming demand that results in sometimes
as many as 40 games, 40 college football games
being shown over the air nationally and on basic
channels. And his opinion was that there is no
reason to expect that 13 more popular NFL games
on Sunday in a similar media market wouldn't
have channels of distribution that want to reach
the 35 million avid fans and 70 million total
fans who are interested in watching these out
-of -market games. His opinion was a reliable
application. of economic methodology, assessing
the overwhelming demand for these games, the
capacity to show them, and he explained in detail
why the supposed impediments the NFL pointed
to could be overcome and would be overcome. Because
economic bargaining theory predicts that when
as here production costs are a tiny fraction
of the profits to be made, the parties will work
those issues out in their negotiations. Finally,
the district court committed a third error when
he excluded other opinions Dr. Rascher offered
that were independent of college football without
any reasoning. First, Dr. Rascher offered an
opinion that there was yet another yardstick.
The NFL itself sells Sunday ticket in Canada
where football is similarly popular. Dr. Rascher
conducted a regression to show that and yet there
is no exclusivity. And the result of that is
prices are half as much, $149 on cable and $75
on streaming. The district court offered no basis
to exclude that opinion, which would independently
show fact of injury and ability to quantify damages
and support the jury's verdict. Second, the district
court overlooked and did not mention. The fact
that Dr. Rasher testified for 20 pages of transcript
before ever getting to college football. This
is at 7 ER 1122 through 1144. He testified about
the overwhelming evidence that the conspiracy
to restrict output was accomplished through the
explicit mechanism of fixing a quote premium
retail price for Sunday ticket. He walked through
document after document and he explained how
that evidence demonstrated. That quote, these
agreements harmed consumers because the price
was higher than it would have been in a competitive
situation. That's 7ER 1143 through 44. That opinion,
that these premium price agreements to restrict
output harmed every class member, would independently
support the verdict. And the district court offered
no basis to exclude it. That is an error under
this court's higher decision. Unless the court
has other questions about Dr. Rascher, I'll turn
to Dr. Zona now. This bond I guess I'd like to
fast forward in your remaining time to the damages
question Why isn't we have a couple formulations
of the standard but but why isn't it? sufficiently
certain that The jury did what the defendants
say that it did The question I think isn't what
they did in terms of what numbers they used.
It's the further question why they did it Let
me explain. The jury here reached an estimate
of the aggregate damage to the class as a whole.
In reaching that reasonable estimate, they did
subtract 102 .74 from 294. Why might they have
done so? Number one, $294 was the price that
quote millions of class members actually paid,
according to Dr. Zona, 9ER 1598 through 99. What
was 102 .74? It was not a price that any class
member paid, according to Dr. Zona. Instead,
it was an average. calculated in his model that
included the paid subscriptions of class members
and also the free promotional subscriptions that
non -class members received. The NFL injected
this number into the trial in opening statement
at 4ER 546 and 557, where they told the jury
two things. Number one, they erroneously told
the jury this was the price the class actually
paid. a statement they later corrected in closing
argument. So the question we're asking here under
our cases is whether it was clearly supported
by the evidence. I don't think there's any theory
that it was based on speculation or guesswork.
There was a calculation, again, maybe not certain,
but whether it's sufficiently certain. So how
is it clearly supported or clearly not supported
by the evidence, right? That's the claim. The
NFL disclaims that reading and it looks an awful
lot like the jury assessed damages based on a
discount rather than a premium. How can we say
that that is sufficiently supported by the evidence?
Because the second thing the NFL told the jury
was that this was a competitive price. that was
evidence that there was no restraint. And they
put a finer point on it during the cross -examination
of Dr. Zona. They said 102 .74 is less than these
other sports packages. That number was also within
a range of a number of potential but for prices
the jury heard. They heard that ESPN wanted to
offer Sunday ticket for $70, but was rejected
because that price was too low to protect the
networks. They heard that in Canada, without
exclusivity, Sunday ticket could be purchased
for $75 on streaming or $149 on cable, and in
deciding amongst them, it would have been perfectly
rational for them to have said... The NFL itself
urged that 102 74 a number in the range of all
of these potential but four prices would be a
competitive price and therefore the difference
between 294 what millions of class members paid
and 102 74 a number the NFL itself has urged
repeatedly would be a competitive price is an
overcharge They had evidence in the record including
dr. Rasher's testimony, but also knew frontier
that would have allowed them to award up to five
point six billion in damages to the residential
class and if in coming to a consensus About a
damages number they credited the NFL's arguments
to discount the damages down to that difference
between the price millions paid and a but for
price that was within a range of other possibilities
and the NFL conceded would be a competitive that
is a completely rational basis for the jury's
award supported by the evidence. Unless the court
has other questions, I'd like to just mention
the injunction, much be reversed. The district
court denied an injunction summarily, not only
without a hearing, but without offering any reasoning
whatsoever. Here, the violation is continuing.
The defendants continue to pool their telecast
rights. offer it exclusively through one provider
at a higher price than ever, subject to the same
contractual restraints with CBS and Fox to protect
them from competition by requiring that Sunday
ticket be an add -on premium subscription. So
the denial of an injunction must be reversed
as well. I'll reserve my time. Ms. Bonner, I'm
sorry. One question just on that. Is there a
good look to see how the plaintiffs would ask
a district court to frame such an injunction
given that the Agreements at issue here are no
longer in effect Well, I think here the district
court among other things could look to the continuing
agreements between the teams the continuing agreements
with CBS and Fox and as the district court itself
noted Those aren't the agreements that you challenged
the question, right? So there's the problem is
the agreements with the non -broadcast Well the
agreements the agreements we challenged are an
interlocking set of agreements that include the
team's agreements to protect CBS and Fox from
competition by requiring a premium price to add
on subscription. As the district court itself
noted, the fact that a party that's sitting in
the seat of the premium price to add on subscription
may have changed doesn't deprive the court of
the ability to redress the defendant's conduct,
the pooling, the exclusivity, the premium price
agreements with the networks that continue. Thank
you. I'll reserve my thank you. We'll give you
five minutes on our bottle. Thank you. I appreciate
it Good morning. Good morning your honors Paul
Clement for the appellee is cross appellants
I'm going to endeavor to save two minutes for
a bottle limited to the cross appeal okay if
I may Your honors by rule the argument section
of appellate briefs must start with the standard
of review And for good reason, as in many cases,
including this one, the standard of review goes
a long way to determining the outcome. Here,
most of the issues on this appeal, starting with
the decision to exclude plaintiffs' experts,
are governed by an abusive discretion standard,
reflecting the fact that no appellate record
can replicate the district court's familiarity
with the case and the difficulties each side
in the case faced. Here, Judge Gutierrez oversaw
a nearly three -week trial and years of pretrial
skirmishing. He understood better than anyone
that the plaintiffs had a very specific challenge
here. They not only needed to show an antitrust
violation, but to do so on a class -wide basis,
such that they would need to show that every
class member suffered a uniform injury and damages
that could be readily calculated on a class -wide
basis. That was no mean feat in a case like this
where class members purchased Sunday ticket at
different times and different prices and for
different reasons Some because they wanted to
watch a particular team But lived outside of
that teams home market and others because they
wanted to watch as much football as possible
Now those are very different customers, and they
had very different motivations for purchasing
the product And if you remove pooling and exclusivity,
removing that is going to affect those different
class members in very different ways. So that's
their challenge. Let me have you just go to this
yardstick question, because I guess what I'm
trying to figure out is if college football is
an inappropriate yardstick, whatever would be
in this kind of case? Well, I mean, there would
be other potential yardsticks. And you might
start with other sports leagues that are actually
governed by the SBA. And so you could start with
NBA. You could start with Major League Baseball.
Now, to be sure, there's no perfect yardstick.
There's no sort of NFL prime. So if you're going
to use a yardstick, you have to make the appropriate
adjustments to the differences in the markets.
But I think those would have actually been sort
of a better starting place because I really do
think the SBA and what it allows is a bit of
a fundamental game changer here and really does
distinguish the college football market. But
I would also say, I'm not here to say that you
couldn't possibly find an expert who could put
together a coherent model that used college football
as the yardstick. I mean, that might be theoretically
possible, but it wouldn't be Dr. Rascher, or
at least wouldn't be Dr. Rascher in this case.
And I think the fundamental problem with Dr.
Rascher, and it's evident with the SBA, but it's
evident in other respects as well, is Every time
he was asked, all right, how are we going to
get though from these various but for worlds
to the result that you predict, which is this
is all going to be available for free in the
sense that it would be part of your basic cable
package. Every time he got asked that hard question
about every but for world, his answer was the
sophisticated parties will work it out. That's
not an appropriate answer. Well, Mr. Klein, I
think it was more than that. As your friend said,
with this much money on the table, sophisticated
parties will work it out. I'll take the sort
of friendly amendment, if you will. But it's
not just that they'll work out something. They'll
work out that it's all available on basic cable
for free. And they did in college football. They
did, but without the overhang of the SBA. And
in this case, we have no explanation from Dr.
Rasher as to how that difference would be accommodated
in this situation. And it's a huge difference,
right? Because here, you start with the protected
SBA broadcasts. And so those are broadcasts that
have the proprietary markings of CBS and Fox.
And what Sunday Ticket does is they They take
those direct feeds and they make them available
in certain markets that don't compete directly
with CBS and NBC. What would happen in the but
for world is you might have the possibility of
having those feeds go to CBS and Fox's most direct
competitors, the other broadcast networks, ABC
and NBC. That's a real difference and you either
have to imagine a world where NBC, whether CBS
and Fox are going to willfully give their direct
feeds with all of their announcers that they
paid for, all of their sort of trademarking.
They're going to either give that to their closest
rivals or you have to imagine a world where the
teams are going to produce or somebody is going
to produce a completely different broadcast.
And that's going to bypass that problem. And
then you need a theory as to how is that going
to be done? Is that going to be available on
basic cable? Or is that going to be some sort
of proprietary thing that you have to pay extra
for? And remember, what they're imagining is
a but for world, where the teams are going to
be negotiating individually. And so one. seems
to be perfectly obvious potential but for world
is a world where the Cowboys just take their
available excess games if you will the games
that aren't going to be showed over the air and
they market them just to out -of -market Cowboys
fans and various teams do that and those probably
wouldn't be available over the air for nothing
and You also might have a situation where as
we suggest... Probably is doing a lot of work
in that answer, right? Whether it's impeachable
or not isn't the question. This is whether it's
admissible. But it's whether he has a reliable
theory as to how you get from... Well, why isn't
that the end of the inquiry? So we've said that
702 requires a reliable methodology. This is
a yardstick methodology. The yardstick chose
the only other nationally broadcast... football
games that we have had in this country for the
last several decades, at least on broadcasts.
I get the SBA point, but to Judge Thomas's question
earlier, if that's not a yardstick, what is?
I mean, it seems like if the yardstick is the
methodology, that's this gatekeeping. Once the
methodology is applied, why isn't it all impeachment?
It's not all impeachment because you need a reliable
yardstick and you also need a reliable method
to Essentially explain how you get from the but
for world to the conclusion that it's all available
for free and where is any of that in? Daubert
or Kumo tire in terms of it's a reliable methodology
all of those other things are Talking about the
substance of the experts opinions that went to
the jury Well, I think you get it right from
rule 702, particularly after the 2023 amendments.
And they specifically clarify that it's not just
a reliable methodology. You have to apply the
methodology in a reliable fashion. And I want
to be clear about this too, because it's not
like Rasher just said, the but for world is college
football with continued pooling. He said that
was one available, but for world. But he also
said, and this is exactly what Judge Gutierrez
focused on, in finding it unreliable. He also
said there was another but for world, which was
without pooling. And then he said... Then there's
the question of, do the teams negotiate individually,
or do they negotiate in groups? And he said they're
different, but four worlds with that. And so
by the time he's done, and then do they negotiate
in groups of six, or six groups of four, four
groups of six? And all of those are nearly an
infinite possibility of different, but four worlds
that Dr. Rascher posited. And his explanation
for why he could do that is he said, we're lucky
here because all of them lead to the same outcome
which is it's all available on basic cable for
free and the problem is with none of those but
four worlds did he show a reliable methodology
to get from the but four world to the result
that it's all available, not just in some form,
but all available on basic cable for free. And
when he's asked about how you do that in all
of those situations, he says, well, the sophisticated
parties will work it out. And that's why the
testimony that Judge Gutierrez relies on in footnote
six of his opinion is particularly problematic
for Dr. Rascher, because it's not just he found
some evidence in the record that contradicted
something. It's that Dr. Rascher's answer to
every hard question is the sophisticated parties
will work it out. Well, Footnote 6 collects the
testimony of the sophisticated parties. And the
sophisticated parties are saying, you can't work
this out. This is fundamentally different. We're
never going to give our proprietary feeds to
our direct competitor broadcasters. not be proper
for the jury to discount that given that those
sophisticated parties at least according to basic
economic theory are arguably enjoying Super competitive
pricing under the umbrella that was proven and
the conspiracy that was established So it would
be one thing if they had some you know fact witness
or some model that directly showed this is how
you solve that problem But they didn't there's
nothing there. There's just rasher saying they'll
figure it out And there's the people he say he
says are going to figure it out saying this is
not a speed bump This is an insurmountable hurdle
in this industry, and it's fundamentally different
from giving your feed to to direct TV that's
going to have it in limited markets to a limited
group of consumers, but to give your direct feeds
to your fiercest rivals to show over the air
or on a basic cable package is something that's
just not going to happen. And there's no counter
testimony on that for the jury to believe. And
again, at the end of the day, I think the question
here is, and that's why I started with the standard
of review, it's whether Judge Gutierrez abused
his discretion in exercising his gatekeeping
function to say that this is just a bridge too
far here, this yardstick's fundamentally flawed,
and I haven't heard an ability for the expert
to get over the hump from the but for world to
the result that he's predicting in all of these
different scenarios. And so I think he acted
well within his discretion in excluding Dr. Rasher,
and I'm happy to talk about Dr. Zona as well,
but without those experts, as he said, there's
really no ability to prove antitrust injury or
damages at that point. And with, I'm sorry. My
fundamental problem with what your position is.
Taking all of this from the jury I know I mean
juries are imprecise. It's a archaic sort of
process we have for follow for resolving disputes
and you know as a trial judge there have been
many times I could point to where the jury came
to a result that as long as the and the instructions
were valid and correct then We accept the jury's
verdict. So this judge, remarkably, very soon
after the verdict, decides to take it away from
the jury. Well, I guess what I would say is,
you know, he didn't take it away from the jury.
It went to the jury. Well, right. And then he,
of course, post trial then decides the rule 702
issues. And I don't think there's anything wrong
with that. I mean, it's no different. I mean,
you know, Jamals, as you know, get granted all
of the time. And I think there's nothing particularly
problematic about a judge who decides, look,
I'm going to let this go to the jury. But I have
lingering concerns about the Rule 702 issues.
But I'm going to not knock this out on Rule 50A,
which he could have done. And then that would
really be taking it away from the jury. But what
he decided to do is sort of defer. And then he
considered these issues again as part of the
rule 50B motion briefing. And then he said, there's
a fundamental problem here, and I'm going to
exercise my discretion, under rule 702. That
doesn't automatically take it from the jury,
but he then makes the constituent judgment that
without the experts, there's insufficient evidence.
So I don't think there's anything wrong. Did
the district court anywhere express its lingering
concerns after, I think, twice denying the Daubert
motion as these experts? He did, actually, and
he did it essentially right after these experts
testified. you know, rule 702 motions, the Dauber
motions. So he said it right then. That was,
you know, the plaintiff still had a possibility
of putting on a rebuttal case at that point.
So they could have called Rasher back up and
tried to fix the problem, but I think the problems
were fundamentally unfixable. So we did, you
know, he did say this in real time that he was
having problems with this. And the other thing
I would just say is to the extent there's any
sort of lingering sort of concern about fairness
on any of this. I mean, I think the Supreme Court's
decision in Weisgram is a complete answer. That's
a case where the court approves the possibility
of the appellate court reversing on the Rule
702 issue, and then the appellate court, in the
first instance, saying, there's J -Mol is appropriate
here without the experts. And Justice Ginsburg's
opinion for the unanimous court specifically
addressed the sort of fairness concerns of that
and said, there's no fairness problem with this.
In a post -Daubert world, nobody like holds back
the really good expert just in the hopes that
the first two just skate by. So if you can do
this on appeal, certainly a trial judge can do
it post trial. And so I hope that's responsive
to the concern you raised, because I don't think
methodologically there's anything wrong about
the way that he handled this. And it ultimately
maps on to first question, was he within his
discretion to exclude the evidence as unreliable?
I would say that's an abuse of discretion, and
I would say he acted well within the abuse of
discretion. And then it is a matter of law as
to whether then he properly entered JMAW with
the experts removed from the case. case, but
without the experts in this case, kind of like
the rail freight case in the DC circuit, there's
very little left once the experts are removed
from the case. Could you spend some time on the
class certification? I would be delighted to
do that because I think that the class certification,
once you don't have those two critical witnesses,
I think class certification would have to fall
almost automatically. I think the only reason
that Judge Gutierrez didn't sort of reach that
issue is because he entered J -Mall. And I also
think the standard for making that judgment under
Rule 23 is actually kind of less deferential
to sort of the jury and the gatekeeping. I mean,
a judge, even in a case where they let the experts
in. the judge can still say, there's so many
problems with these experts that I'm not going
to certify this case as a class action. It can
still proceed with the individual plaintiffs
if they want, but there's so many problems with
the class -wide evidence in a case like this
that even though you pass rule 702, you still
don't satisfy the standard for the reliable evidence
you need for class certification. I guess the
problem there is that the district court did
did certify the class based on these theories,
didn't revisit that, and then provided, after
Jamal provided an alternative new trial, how
is that not inconsistent with understanding what
the district court did as implicitly decertifying
a class? I mean, I just don't, we raised this
issue, he just didn't address it one way or another.
And, you know, I do think, He already was addressing
it one conditional sort of motion. So I don't
think we can fault him for not sort of addressing
everything that any one of the parties sort of
raised. So I don't think there's any implicit
rejection of this. And I do think it would be
within this court's power to sort of consider
this on appeal. Well, speaking of that, what
about the injunctive relief? So I'm glad you
asked. I think on the injunctive relief, that
was another thing he didn't expressly address.
But it wasn't like he forgot about it. I mean,
the plaintiffs specifically said, wait a second.
You need to address injunctive relief. And we
said, no, you don't, because this case is effectively
over. And without antitrust injury, there's no
basis for an injunction. And I think that this
- Well, you reminded him. But is there anything
you can point us to that contains the district
court's analysis of that question, reaching that
question? No. OK. But I think the analysis of
that question is very straightforward, and let
me try to do it in 30 seconds. I mean, this court
has a decision called Catlin against Washington
Energy, which we cite in our briefs, that makes
crystal clear, both in the majority opinion and
in Judge Reinhart's concurrence, that if you
don't prove antitrust injury, you do not get
injunctive relief. So that's circuit law. We
cite it in our briefs. My friends on the other
side don't even respond to it. Now, the only
thing they could possibly say is that in some
cases, there might be the possibility that you
can't prove past injury, but you could prove
threatened future injury. But that might be true
in some case where there's some new thing that
just happened at the end of the class period
or something, and your basic theory of the case
doesn't address that. But in this case, they
challenged a practice that was going on for a
decade. And if in doing that, they can't show
that there was any actual injury to the class,
then they don't get injunctive relief full stop.
And I think the Catlin case is circuit precedent
that supports that result, if I may reserve.
Any other questions? OK, you'll have your full
two minutes. Thank you. Thank you. All of the
arguments we just heard about why Dr. Rasher's
opinion was supposedly too unreliable are all
factual questions that were thoroughly aired
at trial. I'll give one example on feed sharing,
where the district court simply chose to credit
the testimony of one witness, Sean McManus. At
6 ER 1016, the NFL asked Larry Jones, Mr. McManus'
counterpart at Fox, Couldn't you have just told
the NFL we're not going to share our feeds? And
his answer was, I could have said it. It wouldn't
have gone anywhere. But you're in a negotiation.
You've got to have credibility. You don't want
to walk in asking for things you know you're
not going to get. A jury hearing this evidence
could have concluded that feed sharing was simply
a pretext. as demonstrated by the NFL's own New
Frontier Study, where they themselves assessed
that the networks would share their feeds with
other channels and they might just pay less.
That's what one would expect when you go to a
monopolized, restrained market to one where the
restraints are relaxed or lifted. There was no
answer for the exclusion of Dr. Rascher's other
opinions on the Canadian price or his opinions
that the premium price agreement to restrict
output harmed the class. All of these issues
were aired. The notion that somehow the judge
gave warning and we could have cured any of his
misconceptions by recalling Dr. Zona is belied
by the actual sequence of events at trial where
the judge, while Dr. Rascher was on the stand,
the morning before his day two testimony, said,
I think this is all very interesting. but we'll
see what the jury thinks. The first time he raised
any concerns with Dr. Rasher or Dr. Zona was
in the defense case in chief after he expressed
that he was aggravated about how we had cross
-examined Roger Goodell, the NFL commissioner,
and Mr. Jones, the owner of the Dallas Cowboys.
And after doing so, he issued an order. saying
that we could not put on a rebuttal case at all.
And essentially, we begged the court's permission
to put on another economist, Einar L. Haig. The
district court's order and the NFL's brief never
addressed the fact that there is a completely
independent expert, Professor L. Haig, who testified
in rebuttal and who the jury was permitted to
consider. Would you respond to the argument about
it was proper to deny the class? Here, the district
court certified the class and he declined to
decertify. Either way, the NFL has to show an
abuse of discretion. Here, this case was tried
because all the evidence was common evidence.
There was common class -wide evidence about the
pooling agreement. Common class -wide evidence
about the conspiracy to restrict output. common
evidence about how that led to an overcharge
because these agreements required that Sunday
ticket be an add -on premium at a premium price.
Mr. Clement didn't mention a single individualized
issue that would somehow predominate over all
of these common issues with or without the experts.
Maybe I misunderstood him, but I thought he said
that it wouldn't be possible to measure the damages.
Not so. And let's give some examples. First of
all, there was factual evidence in the record.
As to the prices that were charged, Dr. Zona
explained just a pure observation of the data,
that most people paid list prices or close to
it. He said, quote, there are two observations
in the data. There was factual evidence about
a range of but four prices, including that ESPN
wanted to offer this for $70. And finally, The
jury could rationally conclude, based on the
defendant's own testimony, excuse me, CBS and
Fox's testimony, that without this requirement
that there be an add -on premium subscription,
they were concerned it would be offered for free.
It would be in their rational economic interest
to put it on basic. That would have allowed the
jury to compute damages to the class as a whole.
On the B2, the injunctive class issue, I'd asked
you before about what an injunction would look
like here. How would that work as a class action
where the class is defined as purchasers of DirecTV
and not NFL fans who are interested in out of
market games in general? Because these purchasers
have a demonstrated history of being interested
in watching the out -of -market games and if
the teams for instance Why is that close enough
point me to something that would help me help
me connect those dots? Yeah Because the entire
theory of harm here is that but for these agreements
the games would be on basic channels They wouldn't
have to buy a product at all. They wouldn't have
to buy an ad on Sunday ticket They have TVs they
want to watch the games and if restrained more
of these games would be available over the air
on basic channels. These are not unwashed masses
off the street saying, I would have liked this
product hypothetically. These are people with
a course of dealing of buying this product. And
if the ongoing conduct is enjoined, those games
would be available on their basic channels. But
I guess even on, correct me if I'm wrong, even
on Dr. Rascher's own terms, the theory is that
you'd be moving from a world in which everyone,
the DirecTV subscribers would have access to
every game nationwide. To what exactly? To a
sense where conferences negotiate for it. Is
there enough there for us to find that every
game, the entire DirecTV Nationwide package would
be available to every subscriber on those terms
and broadcast? Can you help me pin that down
in the record? Yes, there's two key pieces of
evidence. Number one, Dr. Rasher's yardstick
analysis demonstrates that less popular content
in terms of college football, there is sufficient
demand and capacity for 40 games to be available
on Saturdays on those channels. And his opinion
is that the 13 games of the NFL, even the Jaguars,
he testified. at the time, one of the less popular
NFL teams, is more popular than the most popular
college football game. And that was confirmed
by the New Frontier analysis. New Frontier demonstrated
that all of the NFL games, there would be a demand
to make those games available on channels that
were over the air or basic. Now, finally, I'd
like to turn to essentially the overall picture
in this case. Because really, what's been done
here is there's an admitted antitrust violation.
The district court doesn't deny it. He didn't
issue any reasons for excluding the Zona tax
model, which would have a loan. Offered support
for the jury's verdict and damages up to one
point three nine billion dollars He excluded
the zone a single competitor model based on his
assessment of whether streaming was feasible
in a but for world when the jury had ample evidence
of streaming of the Super Bowl dating back to
2012 of streaming of other sports these were
questions for the jury and Here let me stop you
because you're over time. Do either of you have
any other? questions. Thank you. Okay, thank
you very much. Thank you. Go ahead. Thank you.
So I want to stick to the cross -appeal. And
there's really two issues on the cross -appeal.
One is the class action. And one is whether there
would be a new trial limited to damages or a
complete new trial. On the class action, the
challenge they fundamentally faced is there are
real disparate interests in this class. And if
you imagine a but for world where the way it
works out is that the Cowboys and the Packers
and the other popular franchises market sort
of, you know, paid packages just to their out
-of -market fans, which is a very plausible scenario,
then those fans may be worse off because they
may end up paying more for that package, they
may pay less, we don't know how much it is, but
then the person who bought Sunday Ticket because
they wanted to watch as many out -of -market
games as possible is materially worse off in
that world. And of course there's another possibility
that could happen in the but -for world, which
is, and this really accounts for the uniqueness
of the SBA, the NFL could simply You know, the
Sunday ticket is sort of the tail on the dog
anyways, and it's just not worth the hassle.
So we're just going to go with our over -the
-air broadcasts and nothing else. or nothing
else except at sports bars. And if that happens,
almost everybody in the class is worse off. And
the only solution to that was it's all going
to be free, and everybody gets all of their money
back. And that solves all the class issues. But
if you get rid of Rasher entirely, or even if
you think Rasher's just not sufficiently reliable
for Rule 23 purposes, then you need to decertify.
If you get to the new trial issue, $191 .26 is
explicable only by looking at those two numbers.
quibble about whether 102 .74 is per subscriber
or per class member. It doesn't matter. It looks
to all the naked eye that they took the discount
and made it damages. And Judge Gutierrez not
only rejected that, but he said, this is my evidence
that they didn't follow my instructions. And
at that point, he is well within his discretion
to order a new trial. And it has to be a new
trial on everything, because A, he didn't limit
the new trial grant under Rule 59, conditional
though it was. He didn't limit it to damages.
And the second thing is just as a practical matter,
there's no way to limit it to damages if you
had a retrial consistent with the Seventh Amendment.
Because we don't know whether the jury found
pooling and exclusivity is the problem, just
exclusivity. Was it the NFL tax? We have no idea.
So you couldn't just tell us. Did you raise the
Seventh Amendment issue in your briefs? Yes.
It's in our final, I think it's a gray -covered
sort of surreply or cross -appeal reply brief.
OK. Any other questions? Thank you very much
We thank both counsel for their very helpful
arguments in this matter and this case is submitted
We are in recess until tomorrow morning. Thank
you