Supreme Court Holds NFL’s Licensing Program for Hats Subject to Antitrust Laws
On May 24, the U.S. Supreme Court unanimously held that the National Football League’s licensing program for hats is subject to the federal antitrust law(s). The NFL had set up a licensing subsidiary that had licensed the teams’ logos exclusively to Reebok. That program cut off an apparel manufacturer, American Needle, Inc., that had previously sold licensed products. American Needle sued and lost in the trial court and in the Court of Appeals, which held for NFL under the so-called “Copperweld Doctrine.” That doctrine — named after a 1984 Supreme Court case involving the Copperweld Corporation — held that a… Read more
Discount Certificates Issued by Trade Association for Members’ Facilities Gives Rise to UBIT
In a Technical Advice Memorandum earlier this year, the IRS declared an athletic trade association liable for unrelated business income tax (UBIT) in connection with the association’s discount certificate program. This declaration came after the regional trade association administered a system of discount certificates, and sports facilities (let’s say, proprietary golf courses) agreed to discount fees deeply to holders of the certificates. Players could buy the certificates from sports facilities or from the trade association itself. As a result, the trade association derived substantial income from the certificate program, in fact noting at a meeting that the program provided a… Read more
Ophthalmologists’ Association Fined for Boycotting No-Prescription Opticians
In March of this year, the French Autorité de la Concurrence sanctioned the French national association of ophthalmologists for boycotting opticians who had agreed to provide eyeglasses to patients enrolled in a no-prescription health care network. The health care network agreed with its enrolled patients that it would reimburse 100% of the cost of eyeglasses, if the enrolled patients bought the eyeglasses without an ophthalmologist’s prescription and from an optician participating in the network. The ophthalmologists’ association called for a boycott of opticians participating in the program. The competition authority imposed a fine of 50,000 euros on the association for… Read more
President Obama’s Healthcare Legislation Imposes Additional Requirements on Tax-Exempt Hospitals
The Patient Protection and Affordable Care Act, signed into law by President Obama on March 23, 2010, P.L. 111-148 (the “Act”) imposes four additional requirements on charitable hospitals to maintain their tax-exempt status, in addition to the general requirements of section 501(c)(3). 1. Community Health Needs Assessment: The charitable hospital must conduct a community health needs assessment that (i) takes into account input from persons who represent the broad interests of the community served by the hospital facility, including those with special knowledge of or expertise in public health and (ii) is made widely available to the public. The hospital… Read more
Eleventh Circuit Affirms That Trade Association Membership, Without More, Is Not Evidence of Conspiracy to Violate the Law
On May 14, 2010, in American Dental Association v. Cigna Corp, the U.S. Court of Appeals for the Eleventh Circuit affirmed the district court’s dismissal of the Plaintiff’s complaint for failing to meet the pleading standard under Federal Rule of Civil Procedure 9(b) and the pleading standard recently articulated by the Supreme Court in Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 127 S. Ct. 1955 (2007) and Ashcroft v. Iqbal, ___ U.S. ___, 129 S. Ct. 1937 (2009). The plaintiffs are three dentists and the American Dental Association which asserted representational standing on behalf of its members. The defendants… Read more
Supreme Court Nominee Elena Kagan: If Confirmed, How will She Rule in Cases Involving Trade Associations?
On May 10, 2010, President Obama nominated Solicitor General Elena Kagan to the U.S. Supreme Court. There has been much discussion on both sides of the political spectrum as to what her views are, in light of the dearth of her writings that are available for public review. What, then, can we discern about her leanings in cases involving trade associations? First, we have her employment history. Prior to her confirmation as the 45th Solicitor General of the United States in March 2009, she served as both professor and dean of Harvard Law School, a 501(c) organization. She will provide… Read more
Pension Protection Act May 15 Filing Deadline May Cause Non-Compliant Nonprofit Organizations to Lose Tax-Exempt Status
The Pension Protection Act of 2006 requires nonprofit organizations to file certain required information forms with the IRS. The Act provides that nonprofit organizations who fail to file for a period of three years will lose their tax-exempt status. Not only will non-compliant organizations be forced to reapply for tax-exempt status, but any revenue received between the revocation and the recertification will be subject to income tax. The deadline for filing was midnight on May 15, 2010. The organizations most likely to be affected by this provision are those charities with annual revenues of $25,000 or less. Historically, those organizations… Read more