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From Antitrust Law Daily, March 29, 2013

Referee Allegedly Excluded from Officiating Failed to State Antitrust Claims Against School District, Conference, State Athletic Association

By John W. Arden, J.D., LL.M.

A long-time referee for high school athletic contests, alleging that he was wrongfully excluded from officiating assignments, failed to state monopoly and restraint of trade claims under the Ohio Valentine Act against Columbus City Schools, a high school athletic conference, and the Ohio High School Athletic Association, the Court of Appeals of Ohio has ruled (Eichenberger v. Graham, March 28, 2013, Connor, J.). A trial court’s dismissal of the antitrust actions for failure to state a claim was upheld.

The Valentine Act generally prohibits actions or agreements in restraint of trade. The prohibition applies to acts committed by "persons," defined as including corporations, partnerships, and associations existing under or authorized by any state or territory of the United States, according to the court of appeals.

The Supreme Court of Ohio has held that a school district is not a "person" within the Valentine Act. Since Columbus City Schools engaged in a governmental function when it contracted with schedulers to obtain game referees, the Valentine Act claims could not lie against the city schools.

The referee’s claims against the Ohio Capital Athletic Conference and the Ohio High School Athletic Association failed to state a claim for which relief could be granted because they alleged injury to an individual, rather than an injury to competition.

"To establish a restraint of trade claim, a plaintiff must show that there is a combination of effort by two or more actors that unreasonably restrains trade in a relevant market," the court stated. Anticompetitive practices include price fixing, artificial restrictions on supply, division of markets, group boycotts, and tying arrangements.

"The use of the term ‘anticompetitive’ reflects the underlying purpose of antitrust laws, which are intended to protect efficiently functioning markets by preserving competition and the resulting efficient economic benefit for all economic actors," according to the court. "In light of this ultimate purpose, antitrust statutes are not designed or intended to protect the interests of any given individual competitor, and an antitrust claim must allege more than an act that adversely affects a plaintiff, it must allege an adverse affect on the market as a whole."

In this instance, the referee alleged, at worst, that the various defendants combined in various ways to deny him employment. However, he did not allege adverse impact that amounted to restraint of trade. There was no allegation that the referee’s exclusion was meant to affect the availability or price of officiating services in the market, the court noted. The desired officiating jobs simply went to other qualified individuals rather to the complaining referee.

"There was no generalized restraint of trade or distortion in the market, even if [the referee] was denied employment for reasons that were otherwise actionable," the court said. "Accepting all appellant’s averments as true, the complaint does not meet the standard for establishing an antitrust claim."

The court of appeals also upheld the trial court’s dismissal of the referee’s breach of contract and defamation claims.

The case is No. 12AP216.

Attorneys: W. Charles Curley (Weston Hurd LLP) for Thomas Graham. Daniel R. Mordarski (Law Offices of Daniel R. Mordarski LLC) for Ohio Capital Conference. Steven L. Craig for Ohio High School Athletic Association. Loren L. Braverman for Columbus City School District.

Companies: Ohio Capital Conference; Ohio High School Athletic Association; Columbus City School District

MainStory: TopStory Antitrust OhioNews

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