Antitrust Law Daily No go for gum logos at 2016 U.S. Olympic trials
Friday, May 13, 2016

No go for gum logos at 2016 U.S. Olympic trials

By Jeffrey May, J.D.

The U.S. Olympic Committee and USA Track & Field were impliedly immune from an antitrust attack on their efforts to bar athletes from competing at the 2016 Olympic Trials in apparel bearing individual sponsorship, the federal district court in Eugene, Oregon, has decided. An action brought by a manufacturer of energy chewing gum, seeking an injunction preventing the defendants from enforcing challenged logo restrictions at the upcoming track and field trials, was dismissed with prejudice. The plaintiff unsuccessfully argued that the extension of implied immunity to the facts of the case would be "breathtaking" and allow the USOC to "fix prices with abandon" (Gold Medal LLC v. USA Track & Field, May 11, 2016, Mc Shane, M.).

Gold Medal LLC, the manufacturer of Run Gum, filed a complaint in January against the U.S. Olympic Committee (USOC) and the U.S. governing body the sport of track and field--USA Track & Field (USATF). The company markets product to athletes, particularly runners. As part of its marketing scheme, it sponsors a team of professional runners who promote its product by wearing Run Gum branded apparel in competition.

Run Gum alleged that USATF and USOC have the power to exclude certain individual sponsors from the Olympic Trials through their authority to disqualify athletes that do not comply with their rules. The restrictions are purportedly the result of a horizontal and vertical conspiracy between USOC, USATF, and unnamed apparel and equipment manufacturers. According to the complaining company, as a result of the conspiracy, it is unable to have its sponsored athletes compete in branded apparel at the 2016 Olympic Trials. As a result, it sought injunctive relief to allow its logos on the uniforms of competitors at the track and field trials.

Agreement. At the outset, the court questioned the plausibility of a conspiracy based on the establishment of the challenged policy. The apparel policy's plain language stated that the logo restrictions were solely a creature of the USOC. Moreover, USATF declined to prohibit individual apparel sponsorships at track and field events where t retained full discretion over uniform advertising. It appeared that USATF had done nothing more than passively accept the regulations as a condition of organizing the trials, in the court's view. However, an agreement could be based on USATF's enforcement of USOC's advertising rules. Therefore, the court assumed that Run Gum adequately alleged an agreement to restrain trade. Although the court also questioned the plaintiff's narrow market limited to "sponsorship of individual athletes at the upcoming 2016 Olympic Trails," as well as its per se allegations, it ultimately disposed of the case based on its implied immunity analysis.

Implied immunity. Although the court noted that implied exemptions from the antitrust laws were disfavored, it determined that Congress intended to shield the USATF and USOC from antitrust attack when promulgating logo regulations that restricted commercial advertising on athlete apparel. The Amateur Sports Act of 1978 (ASA), which was later amended as the Ted Stevens Amateur Sports Act, granted the USOC the exclusive jurisdiction over matters pertaining to U.S. participation in the Olympic Games.

In light of the exclusive and unfettered power that Congress delegated to the defendants in the ASA, the challenged regulations were a proper exercise of their statutory authority. Based on the "sweeping grants of authority," courts had conferred the USOC and the relevant governing bodies for individual sports, such as USATF, limited implied immunity from antitrust liability on issues stretching from the scheduling of individual competitions to athlete eligibility, the court noted.

"[T]he text and purpose of the ASA . . . confirm that, when the USATF and USOC promulgate logo regulations which restrict commercial advertising on athlete apparel, they are entitled to antitrust immunity," the court held. The ASA expressed congressional intent to financially support Team USA through USOC fundraising. Allowing any company to advertise on a team member's apparel would unduly interfere with USOC's fundraising mission, the court reasoned. The ban on athletes serving as human billboards at the Olympic Trials was necessary to finance Team USA.

The case is No. 6:16-cv-00092-MC.

Attorneys: Michael D. Hausfeld (Hausfeld LLP) for Gold Medal LLC d/b/a Run Gum. Douglas N. Masters (Loeb & Loeb) and Robert E. Sabido (Cosgrave Vergeer Kester, LLP) for USA Track & Field. Alexander E. Ramey (Covington & Burling LLP) and Bruce L. Campbell (Miller Nash Graham & Dunn LLP) for United States Olympic Committee.

Companies: Gold Medal LLC d/b/a Run Gum; USA Track & Field; United States Olympic Committee

MainStory: TopStory Antitrust OregonNews

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