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Alleged ‘Merch Conspiracy’ Case Against NFL, Fanatics Heads to Arbitration

A federal judge said, in significant part, that plaintiffs in an antitrust lawsuit against the mega retailer and football league are bound by a terms of use agreement to arbitrate.

The retailer Fanatics, the National Football League and all 32 NFL teams have scored a win in a court battle rooted in accusations that they conspired to dominate the retail market for online sales of NFL-licensed branded merchandise. Still, the legal wranglings aren’t over yet.

In an order issued July 18, New York-based U.S. District Judge Andrew L. Carter ordered that the plaintiffs in a proposed class action lawsuit that made the accusations must enter arbitration with the NFL, Fanatics and its teams.

arbitration

Arbitration, which happens outside the judiciary courts, is a private process where disputing parties agree that one or several neutral individuals can make a decision about the dispute after receiving evidence and hearing arguments. Arbitration is different from mediation because the arbitrator has the authority to make a decision about the dispute.

Attorneys for the NFL and Fanatics had pushed for the case to go to arbitration.

They argued that the plaintiffs, listed as Saul Maldonado and other consumers, agreed to resolve potential complaints against Fanatics, the NFL and its teams through arbitration when they made online purchases or created accounts on the defendants’ merch-selling websites.

Carter agreed. He noted that the terms of use included language that effectively say that one signing up for an account or making a purchase agrees to take a dispute to arbitration.

Carter rejected counterclaims that Maldonado and the other plaintiffs were not bound by terms of use for Fanatics.com and NFLShop.com because they were not effectively put on notice of the terms. Carter wrote that the terms met a legal standard of being presented in a “reasonably conspicuous” manner, so a consumer would be able to spot them and review them on desktop computers and mobile devices.

As such, Carter stayed the case pending resolution of the arbitration. A status report must be given to the court within 30 days of completion of arbitration or within six months of the date of Carter’s order, which was July 18.

In their original suit filed in March 2022, the plaintiffs said the NFL, its teams and Fanatics illegally conspired to control the online retail market for licensed NFL gear in a multi-faceted scheme.

According to the suit, the alleged offending activities included collusion to boycott competing retailers, anticompetitive licensing agreements aimed at reducing competition and, among other things, conspiring to undermine other retailers’ ability to compete in the online market for NFL licensed products by forbidding those retailers from using NFL-related keywords to advertise or describe their product offerings.

The alleged illicit activity constituted violations of the Sherman Act and resulted in plaintiffs paying “overly high” prices for NFL merch, according to the complaint.