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United States Football League v. National Football League

decided: October 10, 1989.

UNITED STATES FOOTBALL LEAGUE, ARIZONA OUTLAWS, BALTIMORE STARS FOOTBALL ASSOCIATES, BIRMINGHAM STALLIONS, LTD., CHICAGO USFL LIMITED PARTNERSHIP, CHICAGO FOOTBALL FRANCHISE LIMITED PARTNERSHIP, DENVER GOLD SPORTS, INC., HOUSTON GAMBLERS, LTD., IMI EXPRESS, INC., JAX PROFESSIONALS, INC., LAEFC, LTD., MEMPHIS SHOWBOATS, LTD., FOOTBALL GENERALS, INC., BAY AREA FOOTBALL PARTNERS LTD., BREAKERS LIMITED PARTNERSHIP, SOUTH TEXAS SPORTS, INC., AND ORLANDO FOOTBALL PARTNERS, INC., PLAINTIFFS-APPELLEES,
v.
NATIONAL FOOTBALL LEAGUE, THE FIVE SMITHS, INC., INDIANAPOLIS COLTS, INC., BUFFALO BILLS, INC., CHICAGO BEARS FOOTBALL CLUB, INC., CINCINNATI BENGALS, INC., CLEVELAND BROWNS, INC., DALLAS COWBOYS FOOTBALL CLUB, INC., ROCKY MOUNTAIN EMPIRE SPORTS, INC., THE DETROIT LIONS, INC., GREEN BAY PACKERS, INC., HOUSTON OILERS, INC., LOS ANGELES RAMS FOOTBALL COMPANY, MINNESOTA VIKINGS FOOTBALL COMPANY, MINNESOTA VIKINGS FOOTBALL CLUB, INC., NEW ENGLAND PATRIOTS FOOTBALL CLUB, INC., NEW ORLEANS SAINTS LOUISIANA PARTNERSHIP, NEW YORK FOOTBALL GIANTS, INC., NEW YORK JETS FOOTBALL CLUB, INC., THE PHILADELPHIA EAGLES FOOTBALL CLUB, INC., PITTSBURGH STEELERS SPORTS, INC., ST. LOUIS FOOTBALL CARDINALS CO., CHARGERS FOOTBALL COMPANY, SAN FRANCISCO FORTY-NINERS, LTD., TAMPA BAY AREA NFL FOOTBALL, INC., PRO-FOOTBALL CLUB, INC., MIAMI DOLPHINS, LTD., SEATTLE PROFESSIONAL FOOTBALL AND ALVIN R. ROZELLE, INDIVIDUALLY AND AS COMMISSIONER OF THE NATIONAL FOOTBALL LEAGUE, DEFENDANTS-APPELLANTS



Appeal from a judgment of the United States District Court for the Southern District of New York, Leisure, J., awarding plaintiffs-appellees $5,529,247.25 in attorney's fees against defendants-appellants and taxing $62,220.92 in costs against defendants-appellants for work done in connection with an antitrust suit that resulted in a jury verdict of $1.00, trebled to $3.00, in favor of plaintiffs-appellees.

Meskill and Pierce, Circuit Judges, and Tenney,*fn* District Judge.

Author: Meskill

Meskill, Circuit Judge,

This is an appeal from a judgment of the United States District Court for the Southern District of New York, Leisure, J., awarding plaintiffs-appellees the United States Football League and certain of its member clubs (hereinafter collectively referred to as "the USFL") $5,529,247.25 in attorney's fees against defendants-appellants the National Football League and certain of its member clubs (hereinafter collectively referred to as "the NFL") and taxing $62,220.92 in costs against the NFL for work done in connection with an antitrust suit that resulted in a jury verdict of $1.00, trebled to $3.00, in favor of the USFL. The district court's opinion is reported as United States Football League v. National Football League, 704 F. Supp. 474 (S.D.N.Y. 1989).

We affirm.

BACKGROUND

This case comes to us after what has been a much litigated and publicized dispute between the USFL and the NFL. Because the facts have been set forth in other published opinions, see, e.g., United States Football League v. National Football League, 842 F.2d 1335 (2d Cir. 1988); United States Football League v. National Football League, 644 F. Supp. 1040 (S.D.N.Y. 1986), familiarity with which is assumed, we will only briefly recount the history and background of this litigation.

The USFL brought suit in the United States District Court for the Southern District of New York against the NFL and its Commissioner Alvin R. Rozelle seeking declaratory and injunctive relief in addition to damages resulting from the NFL's alleged violations of sections 1 and 2 of the Sherman Anti-Trust Act, 15 U.S.C. §§ 1, 2 (1982) (the Sherman Act) and common law. After a lengthy trial, the jury found that the NFL had willfully acquired or maintained monopoly power in the United States major league professional football market. Further, the jury found that the NFL's actual monopolization of the major league professional football market had caused injury to the USFL's business or property in violation of section 2 of the Sherman Act. The jury awarded the USFL damages of $1.00, which the court trebled to $3.00.

The USFL was not successful on its other claims. None of the defendants was found to have violated section 2 of the Sherman Act by monopolizing or attempting to monopolize a relevant television submarket. The jury also found that although one or more of the defendants had participated in a combination or conspiracy with intent to acquire or maintain monopoly power in the major league professional football market, there were no overt acts taken by any member of the conspiracy to try to achieve that result. Regarding the claim of violation of section 1 of the Sherman Act, the jury found that one or more of the defendants did participate in a contract, combination or conspiracy to exclude competition in the major league professional football market. However, the jury concluded that that combination did not constitute an unreasonable restraint of trade in violation of section 1 of the Sherman Act. Further, the jury concluded that the NFL's contracts with the three major television networks for the right to televise the NFL's regular season and championship games through the 1986-87 season were not an unreasonable restraint of trade in violation of section 1 of the Sherman Act. The jury found that a national network television broadcast contract was essential to successful competition in the United States and that the NFL's potential competitors could not duplicate the benefits of a network contract. However, the jury went on to conclude that the NFL did not have the ability to deny actual or potential competitors access to a national broadcast television contract. No liability was found on the USFL's common law claims of intentional interference with the USFL's television contracts or advantageous business relations. Defendant Rozelle was not found liable on any of the USFL's claims.

Despite the jury's findings that the NFL had willfully acquired or maintained monopoly power in the United States major league professional football market and that such monopolization had injured the USFL, the jury awarded the USFL only $1.00 in damages. In accordance with section 4 of the Clayton Act, 15 U.S.C. § 15(a) (1982), the award was trebled to $3.00.

The district court denied the USFL's motion for judgment notwithstanding the verdict with respect to the antitrust claims that were rejected by the jury and for a new trial limited to the issue of damages for the section 2 violation that the jury found, or in the alternative for a new trial on both liability and damages for all of the antitrust claims. The USFL's request for injunctive relief was also denied. Further, the district court denied the NFL's motion for judgment notwithstanding the verdict with respect to the jury's verdict on the USFL's claim of actual monopolization. The district court declined to disturb any of the jury's findings. United States Football League, 644 F. Supp. 1040. We subsequently affirmed. United States Football League, 842 F.2d 1335.

The USFL then petitioned the district court, pursuant to section 4 of the Clayton Act, for an award of $7,662,709.13*fn1 as reasonable attorney's fees and expenses resulting from the litigation. This figure was reached after the USFL had exercised "billing judgment" and on its own accord reduced the fee by twenty percent. Additionally, the USFL sought fees for the time spent preparing the fee application. The USFL also filed a motion in the district court, pursuant to Fed.R.Civ.P. 54(d) and Local Civil Rule 11 of the Southern District of New York, for an award of $62,220.92 for costs incurred in litigating the case up to that point. Counsel for the USFL submitted affidavits to substantiate the amounts of their requests. The issues presented to the district court were (1) the adequacy of the documentation of the fees; (2) whether the USFL should receive attorney's fees at all; (3) the proper amount of those fees; and (4) whether the costs of the USFL's fee application were recoverable.

The district court reduced the amount of the ultimate fee award by ten percent because of vagueness in the documentation of the time billed. United States Football League, 704 F. Supp. at 477. The amount requested was reduced by an additional twenty percent to reflect what the court deemed was a "reasonable" fee under section 4 of the Clayton Act. Id. at 486. The district court concluded that "the reduced fees for the litigation of the main action total $5,271,504.55." Id. The court calculated that the aggregate amount of fees expended in relation to the fee application, up to that point, was $243,786.26. The court added the two fees, resulting in a total fee award of $5,515,290.87. Id. at 487. In the court's disposition of the case, it provided that within thirty days the USFL could submit additional affidavits concerning fees incurred in preparing the fee application. The court also found that $62,220.92 in costs were taxable against the NFL. Id. at 488. The USFL submitted additional affidavits regarding the amount of fees it had incurred in preparing the fee application. In a judgment filed February 8, 1989, the court awarded $5,529,247.25 in attorney's fees against defendants, except Rozelle, and taxed costs in the amount of $62,220.92 against defendants, except Rozelle.

The instant appeal followed. On appeal, the NFL contends that (1) the district court erred as a matter of law in holding that the USFL was entitled to attorney's fees and costs under section 4 of the Clayton Act; (2) the district court's award of over $5.5 million in attorney's fees was excessive; (3) the district court erred as matter of law in awarding attorney's fees for paralegals' time; and (4) the district court erred as a matter of law in holding that out-of-pocket expenses may be awarded as part of the attorney's fees. For the following reasons, we affirm the judgment of the district court.

Discussion

A. USFL's Entitlement to an Award of ...


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