Lawmakers sparred with National Football League officials and player representatives today at a hearing in the House Judiciary panel’s Courts and Competition Policy Subcommittee about the implications of a Supreme Court case that will assess how antitrust laws apply to the NFL.

The Supreme Court heard arguments last week in American Needle v. NFL, a case that poses the question of whether the NFL is a collection of 32 teams or is a single entity for the purposes of antitrust regulation.

Clothing manufacturer American Needle sued the NFL after the league signed an exclusive deal with Reebok  to produce hats and other merchandise with team logos. The company argued that the NFL violated antitrust laws, and that each team needed to independently negotiate such a contract.

Players have been concerned that a broad ruling in favor of the NFL could lead teams to restrict players’ salaries and reverse gains they’ve made as free agents since the 1990s.

A dozen current and former NFL players, including Nolan Harrison, who retired after a 10-year career, and Deshea Townsend, who plays for the Pittsburgh Steelers, attended the hearing today, and others were on the Hill to lobby Congress on antitrust and other issues.

“Why else would the NFL seek to review a case it won not once but twice?” NFL Players’ Union president, Kevin Mawae, asked at the hearing. The NFL won in the lower courts but joined American Needle in urging the Supreme Court to hear the case. Mawae described the NFL’s strategy as the latest attempt for the league to obtain “the whole grail” of antitrust immunity.

Democrats on the committee echoed the players’ concerns. The case “could affect the free agency concept,” said Rep. John Conyers Jr. (D-Mich.) who chairs the full Judiciary Committee. “The only option would be a players strike.”

The league tried to downplay any impact the case might have on the players. “This case is not about labor relations,” said Gary Gertzog, a senior VP at the NFL, in his opening statement.

The league also argued that the teams could act as a single entity because they competed with other sports and other forms of entertainment for fans.

“The consumer has the ultimate vote,” Gertzog said, arguing that a fan might switch to a different sport if an NFL cap was too expensive.

Other sports leagues backed him up. “It defies economic reality,” said William Daly, a National Hockey League deputy commissioner. ”Sports leagues can’t willy-nilly make decisions that aren’t responsive to the marketplace,” he said.

Republicans on the committee followed the league’s line of reasoning. The subcommittee’s ranking member, Rep. Howard Coble (R-N.C.), said that manufacturers would be harmed if they had to spend time negotiating license agreements with each team separately.

“This is a case of manufacturer’s remorse: American Needle tried to obtain through litigation what it could not get through negotiation,” Coble said, in a reverse echo of Justice Sonia Sotomayor’s comments during the arguments at the high court.

“You are seeking through this ruling what you haven’t gotten from Congress,â€� Justice Sonia Sotomayor said to the NFL’s lawyer during oral arguments. “An absolute bar to an antitrust claim.â€�

Even if the Supreme Court grants the league partial immunity that shields it from players’ antitrust suits, it  might not hurt the players all that much, said Rep. Lamar Smith (R-Texas), the Judiciary Committee’s ranking member. Given that “professional sports unions are the wealthiest labor unions around; one wonders whether they need any extra leverage,” he said.

Smith suggested the committee had already given the NFL a lot of attention  — three hearings in three months — and said the panel should instead hold hearings on the Justice Department’s decision to drop charges against the New Black Panther Party, and on the question of whether to close the Guantánamo Bay detention center.

During oral arguments at the Supreme Court today in a case that will assess how antitrust laws apply to the National Football League, the Justices expressed skepticism at the league’s attempt to shield itself from future antitrust suits.

“You are seeking through this ruling what you haven’t gotten from Congress,” Justice Sonia Sotomayor said to the NFL’s lawyer, Covington & Burling’s Gregg Levy. ”An absolute bar to an antitrust claim.”

At issue in the case, American Needle v. NFL, is whether the NFL acted as a “single entity” in awarding an exclusive contract to Reebok in 2000 to manufacture  licensed apparel.

Rival clothing manufacturer American Needle sued, arguing that the contract violated antitrust rules. The company’s lawyer, Jones Day’s Glen Nager, argued in court today that because the league is made up of 32 teams that are “separately owned and controlled,” its agreements are subject to federal antitrust laws.

Several Justices seemed to indicate they would send the case back to a lower court for a ruling on whether the agreement had anti-competitive effects.

“It seems to me to be something that you can’t decide in theory,” Justice Stephen Breyer said during the hearing. ”It’s a matter of going back to economic facts with witnesses and so forth.”

“If there is a factual dispute about whether a particular activity of the League is designed to promote the game or is designed simply to make more money,” asked Chief Justice John Roberts, “then that is the sort of thing that goes to trial?”

In a brief from Justice Department, the government argued that scenarios similar to those raised by American Needle should be determined on a case-by-case basis as to whether they restrict competition, a formula that several Justices seemed favorable to.

Chief Justice Roberts referred to the government’s proposed test, and asked American Needle’s attorney why he didn’t accept the government’s reasoning. “There are some things that it just seems odd to subject to a rule of reason analysis,” Roberts said. “Why doesn’t it make sense to sort of carve those out at the outset?”

The Justices also asked Nager about several hypothetical scenarios, some to laughter from the crowd.

JUSTICE BREYER: You want the Red Sox to compete in selling T-shirts with the Yankees; is that right?

MR. NAGER: The ability to compete. Yes.

JUSITCE BREYER: Yes. Okay. I don’t know a Red Sox fan who would take a Yankees sweatshirt if you gave it away.

I mean I don’t know where you are going to get your expert from who is going to say there is competition between those two products. I think they would rather – they would rather wear a baseball, a football, a hockey shirt.

….

MR. NAGER: But you’ve got to recognize what the competition is for. The competition is for fans. And the fact of the matter is, you’re right that someone who has lived in New York City for a long time is unlikely to be a Red Sox fan and be easily persuaded to be a Red Sox fan, but the person who is three years old can easily be persuaded.

JUSTICE BREYER: They have very small allowances at three years old.

Before today’s arguments, Assistant Attorney General for Antitrust Christine Varney introduced Deputies Philip Weiser and William Cavanaugh, and counsel Douglas Kramer to admit them as new members of the Supreme Court bar.

As the Supreme Court gets ready this week to hear arguments about how antitrust laws apply to the National Football League, the players are making a case — against the NFL.

The case, American Needle v. NFL, involves an exclusive contract the league signed in 2000 with Reebok to manufacture licensed apparel. But players are concerned that a ruling in favor of the NFL could lead teams to restrict players’ salaries and reverse gains they’ve made as free agents since the 1990s. They’ve mounted a PR campaign to argue against the league’s position.

“Why should the government ... make the NFL untouchable?� Chicago Bears linebacker Hunter Hillenmeyer said in an email to Main Justice. (Getty Images)

“Why should the government get involved here and make the NFL untouchable?� Chicago Bears linebacker Hunter Hillenmeyer said to Main Justice in an email.

Saints quarterback Drew Brees opined on the case in an op-ed in the Washington Post, and the Minnesota Vikings’ Steve Hutchinson told the Associated Press: “If the NFL wins this case, they can set ticket prices and stop nearby teams from competing for fans by offering discounted tickets. With the economy the way it is, I don’t see how that’s good for fans.”

Reebok’s rival, clothing manufacturer American Needle, argues that the apparel contract violated antitrust laws and raised prices for fans.

The NFL responded that the league functioned as a “single entity” for business purposes and could sign exclusive deals. Both a federal judge and the U.S. 7th Circuit Court of Appeals in Chicago agreed.

The potentially far-reaching implications of an opinion and the general interest nature of the case has generated a lot of media attention.

Read the L. A. Times take here, for the New York Times, click here, USA Today, here.

When lawyers for the NFL and American Needle face off in court on this week, the players will be looking for one thing.

How far might the court be interested in going? Could a ruling allow the league to coordinate to restrict salaries or hike prices on tickets and paraphernalia?

“Key thing to watch for is hints on how broad or narrow the court is likely to rule,” said Jeffrey Kessler, a partner at Dewey & Leboeuf who chairs the firm’s litigation department and authored a brief on behalf of the players associations in the NFL, the National Basketball Association, the National Hockey League, and Major League Baseball.

“The first issue in this case is whether the court is just going to consider the specific situation of joint licensing on trademarks or whether they are going to announce a broad rule for sports leagues” that would apply to other contexts, Kessler said, in an interview with Main Justice.

Richard Berthelsen, general counsel of the NFL Players Association, also told Main Justice: “Through this licensing process, are they operating as a single entity? There is a real risk of such a single entity being broadened beyond the case in question.”

Assistant to the Solicitor General Malcolm Stewart will be arguing on behalf of the government, which initially recommended that the court not take the case. But after the court granted cert, the U.S. filed a brief arguing that courts should assess such scenarios on a case-by-case basis to determine whether they restrict competition.

Certain aspects of the NFL’s business are integrated enough that the league should be treated as a single entity, the brief said. In other cases, the government said, the teams compete with each other and a joint agreement could be considered illegal.

Both the Federal Trade Commission and the Justice Department, including the Antitrust Division’s Assistant Attorney General Christine Varney and her appellate deputy, Philip Weiser, signed the government’s brief.

The court usually gives the government time during oral arguments and subtracts it from the camp the government is closer to. In this case, the court divided time equally between the two parties, signalling the government is not on either side.

In antitrust issues, the court tends to give deference to the agencies’ perspective.

“The general Supreme Court philosophy [has been], we should hear what the experts have to say,” said Kessler, “and the court recognizes the antitrust agencies as experts.” A decision in the 2007 Leegin case about minimum retail prices, for example, he said, largely followed advice given by the Justice Department.

In a 2001 article in the Antitrust Law Journal, Wayne State University Law School professor Stephen Calkins noted that the Court often listens to what the government says in antitrust cases, especially when it advocates a position that doesn’t necessarily support its litigating interests. For example,  in a 1997 case that involved an existing ban on manufacturers setting maximum prices that retailers could charge for their products, the government urged the Justices to overturn the ban.

“[I]t became hard to imagine that the Supreme Court would hold onto the per se rule against vertical resale price maintenance once the Antitrust Division and the FTC (led by Joel Klein and Robert Pitofsky, respectively) counseled against doing so in State Oil Co. v. Khan,” Calkins wrote.

Read other briefs in the NFL case here.