Federal Judge Orders Timeout In Basketball Players’ Antitrust Action Against NBA

U.S. District Judge Patrick Schiltz has issued a stay in Butler v. NBA, the basketball players’ antitrust class action against the National Basketball Association and its 30 member teams, to give the parties time to work out a settlement.

The District of Minnesota federal judge issued the stay order after being informed by the players that the two sides have “tentatively agreed” to resolve their labor dispute.

On November 14, 2011, during the NBA lockout and after months of unsuccessful negotiations over the new collective bargaining agreement (“CBA”), the parties were unable to reach agreement and the players disavowed the National Basketball Players Association (“NBPA”) as their bargaining representative.  The players rebranded the NBPA as a trade association.

The next day, a number of basketball players filed two antitrust class action complaints against the NBA and its 30 member teams.  Initially, two separate lawsuits were filed in federal court – one in the Northern District of California and one in the District of Minnesota. 

The basketball players’ complaints alleged violations of Section 1 of the Sherman Act as well as breach of contract and tortious interference claims.  The players preemptively argued that in light of their disavowal of their bargaining representative, the defendants’ actions were not protected from antitrust scrutiny by any labor exemptions.

The cases were consolidated in the District of Minnesota after plaintiffs in the Northern District of California filed a notice of voluntary dismissal without prejudice.  The District of Minnesota, fresh from its decision in Brady v. NFL, in which football players brought a similar antitrust action against the NFL, was again positioned to resolve professional athletes’ antitrust claims against their league.

However, renewed negotiations proved fruitful.  The November 29, 2011, order staying litigation was followed by the players’ December 1, 2011, decision to authorize the NBPA to serve as their collective bargaining representative with the league.

The major negotiating issues are believed to be largely resolved.  The details of the new CBA are currently under negotiation.  NBA basketball is expected to return in a few weeks, on Christmas day.