City Of Oakland v. Oakland Raiders

Background

The City of Oakland sued the Oakland Raiders, the National Football League (NFL), and the NFL’s other teams. Oakland challenged the Raiders’ decision, formalized in January 2017, to relocate from Oakland to Las Vegas. Under the NFL’s bylaws, relocation required approval by three-quarters of the 32 teams. In March 2017, the team owners approved the relocation and imposed a $378 million fee.

Oakland asserted a claim under Section 1 of the Sherman Act, a federal antitrust law; a California-law breach-of-contract claim based on the NFL relocation policy; and a California-law unjust-enrichment claim. The defendants moved to dismiss the first amended complaint under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not state a legally sufficient claim. The court had previously dismissed Oakland’s original complaint with leave to amend.

Sherman Act claim

The court dismissed the Sherman Act claim with prejudice. It first held that Oakland had not cured the deficiencies identified in the earlier order.

Regarding the $378 million relocation fee and the NFL’s approval process, the court held that Oakland had not alleged an antitrust injury. The court reasoned that the fee could discourage a team from seeking to relocate and, after a team applied to relocate, could make approval more likely. In the court’s view, Oakland had not shown how that process harmed competition in a way the antitrust laws were intended to prevent.

Oakland also challenged the NFL’s restriction to 32 teams. The court assumed for purposes of the motion that Oakland’s proposed market—cities offering or willing to offer stadiums and other support to NFL teams—was adequately pleaded. Even with that assumption, however, the court held that Oakland had not plausibly alleged that it would have retained an NFL team, or that another team would have played in Oakland, if the NFL permitted more than 32 teams. Oakland did not explain what would have happened in that hypothetical league structure, including whether another team would have been established in Oakland or whether the Raiders would still have left.

The court also rejected Oakland’s group-boycott theory because Oakland had not alleged that another NFL team refused to deal with it, that the NFL prohibited another team from dealing with it, or that the NFL imposed agreed terms for attracting a new or different team. Commentary suggesting that a relocation threat might amount to a concerted boycott did not establish that a boycott actually occurred.

The court identified an additional reason for dismissal: Oakland had not alleged a type of direct injury to its business or property that could support antitrust damages. The alleged injuries included lost investment value, lost income, lost tax revenue, and reduced value of the Coliseum. The court held that lost tax revenue and municipal investment were not recoverable on the theories Oakland presented. It also held that Oakland’s alleged lost rental income and reduced property value were indirect because Oakland and Alameda County leased the Coliseum to another entity, which in turn leased it to the Raiders. Oakland’s control of that entity was not enough to make the injuries direct.

Because Oakland had not addressed the concerns raised in the earlier order, the court concluded that further amendment would be futile. It therefore dismissed the Sherman Act claim with prejudice.

State-law claims

The court dismissed Oakland’s breach-of-contract and unjust-enrichment claims for lack of subject-matter jurisdiction. The opinion stated that there was no indication of complete diversity of citizenship, so those claims could remain in federal court only through supplemental jurisdiction connected to the federal antitrust claim.

After dismissing the only federal claim, the court declined to exercise supplemental jurisdiction over the state-law claims. It did not reach the parties’ arguments about whether those claims were adequately pleaded. The dismissal was without prejudice to Oakland pursuing the claims in a court of competent jurisdiction.

Disposition

The court granted the defendants’ motion to dismiss. It dismissed Oakland’s Sherman Act claim with prejudice and dismissed Oakland’s state-law claims for breach of contract and unjust enrichment for lack of subject-matter jurisdiction, without prejudice to pursuing them in a court of competent jurisdiction. The clerk was instructed to enter judgment for the defendants and close the case. Judge Joseph C. Spero signed the order on April 30, 2020.