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No classwide damages in U.S. sports blackout case, court rules

Posted On: May. 15, 2015 12:00 AM CST

(Reuters) — A federal judge said sports fans accusing Major League Baseball, the National Hockey League and broadcasters of illegally restricting their ability to watch their favorite teams on TV cannot pursue damages as a class.

U.S. District Judge Shira Scheindlin in Manhattan on Thursday also said fans could still pursue class action claims that the defendants committed antitrust violations.

But the judge's decisions reduce the financial exposure of professional sports leagues, teams and broadcasters in the high-stakes legal battle over how to broadcast sports programming, and how much to charge.

The leagues, Comcast Corp., DirecTV, regional network operators such as Madison Square Garden Co. and YES, and teams including the New York Yankees were accused in two lawsuits of using blackouts to limit broadcasts of games outside teams' home markets.

Fans said this drove up prices by forcing them to buy costly packages that bundled games they did not care about, rather than paying less to watch games "a la carte" — for example, if an Iowa resident wanted to watch the Yankees.

Ned Diver, a lawyer for the plaintiffs, did not immediately respond to requests for comment.

In two decisions totaling 128 pages, Judge Scheindlin said baseball and hockey fans could sue as a group to address the "dearth of choice" they now face.

"Every class member, as a consumer in the market for baseball or hockey broadcasting, has been deprived of an option — a la carte channels — that would have been available absent the territorial restraints," she wrote.

But Judge Scheindlin also said classwide damages could not be awarded because there was not enough evidence that all viewers were harmed.

She said findings from Stanford University economics professor Roger Noll that the plaintiffs hoped would show the scope of overcharges were inadmissible, because they did not rely on enough data about consumer preferences.

Judge Scheindlin said Mr. Noll's findings on how a la carte pricing might benefit viewers were admissible.

"Striking damages from the class action is welcome to the Yankees," the team's lawyer Jonathan Schiller said in a phone interview. "It now becomes an injunction case."

Lawyers for the other defendants had no comment or were not immediately available. Mr. Noll declined to comment.

Other team defendants included all New York-area NHL teams; the Chicago Cubs, White Sox and Blackhawks; and teams in Denver, Philadelphia, Pittsburgh, San Francisco and Seattle, among others.

The cases are Laumann et al. v. National Hockey League et al., U.S. District Court, Southern District of New York, No. 12-01817; and Lerner et al. v. Office of the Commissioner of Baseball et al. in the same court, No. 12-03074.