byRace Results Weekly
Nick Symmonds wins 2015 USATF Outdoors, photo by PhotoRun.net
RunGum, the company founded by Nick Symmonds, and the company he uses to support a plethora of young athletes, has lost in the courts. They challenged the USOC’s primacy by using the Sherman Anti-Trust act.
Hats off for Nicky Symmonds trying to challenge the system currently in place.
The review of the case in the NATLAWREVIEW.COM is quite compelling. Read on.
Olympic Runner’s Antitrust Suit Can’t Clear Hurdle
Tuesday, June 7, 2016
An antitrust lawsuit filed by Run Gum, a manufacturer of energy-enhanced chewing gum founded by two-time Olympic runner Nick Symmonds, was recently dismissed with prejudice by District Court Judge McShane in the District of Oregon.[1] Run Gum had alleged that the United States Olympic Committee’s (USOC) rules prohibiting runners from displaying individual sponsorships on their apparel during the upcoming 2016 qualifying Olympic Trials constituted a restraint of trade in violation of the Sherman Act.
Judge McShane held that the claim was barred by implied antitrust immunity under the Amateur Sports Act, and that the USOC may exercise control over the apparel worn during competition at the Olympic Trials. Additionally, Judge McShane expressed skepticism regarding Run Gum’s attempt to define a relevant market consisting solely of a specific type of sponsorship opportunity at a single event, but declined to rule definitively on whether a relevant market had been sufficiently pleaded, given the court’s determination of antitrust immunity.
Run Gum alleged that the USOC and USA Track and Field (USATF) had illegally agreed, along with other unnamed athletic apparel co-conspirators, to prevent some businesses (while allowing others) from sponsoring individual runners competing in the upcoming July 2016 U.S. Olympic Track & Field Team Trials in Eugene, Oregon. Run Gum described the event as the “zenith of track & field in this country.” The challenged USOC policies, which USATF had agreed to enforce at the Olympic Trials, prevent runners from displaying the names or logos of their individual sponsors, while allowing the display of the names and logos of the manufacturers of the apparel worn by runners. Because Run Gum does not manufacture athletic apparel, it alleged that it was unlawfully excluded from a purported market for purchasing advertisements that can be worn or displayed by runners at the 2016 Olympic Trials.
Judge McShane determined that Run Gum had plausibly alleged an agreement between the USOC and USATF, but held that the agreement could not be subjected to antitrust inquiry without unduly interfering with the goals of the Ted Stevens Olympic and Amateur Sports Act (ASA). The ASA grants the USOC unfettered control over the commercial use of Olympic-related designations and trademarks, for the purpose of financing the U.S. Olympic Team. The court noted that although implied antitrust immunity is disfavored as a matter of statutory construction, Congress’s designation of exclusive rights to control the Olympic brand must necessarily allow the USOC to “issue regulations that restrict apparel advertising in order to protect the value of the Olympic brand.”
Run Gum had contended that the advertisements that it sought to place would not undermine the Olympic brand or the USOC’s ability to finance the Olympic Team, and thus would not create any express conflict with the ASA’s statutory scheme. However, the court found that Run Gum “clearly seeks to capitalize on the unique nature of the Olympic brand generally, and the Olympic Trials in particular, in order to promote its product,” and in seeking to associate its own brand with the Olympic brand, would “tread on ground that Congress reserved for USOC.”
Because Judge McShane held that the ASA precludes an antitrust inquiry into the challenged apparel restrictions, the court did not resolve the alternative basis for seeking dismissal of Run Gum’s complaint based upon the sufficiency of the antitrust allegations. However, Judge McShane did analyze those allegations, and noted that the USOC and USATF had raised “strong arguments” that Run Gum’s alleged relevant market was impermissibly narrow. The court also cited with approval a recent district court decision in which a similar theory of market definition was rejected at the motion to dismiss stage. Hicks et al. v. PGA TOUR, Inc., Case No. 3:15-cv-00489-VC (N.D. Cal.).
