Sports Law Fall 2004 Notes
Professor Miller
CONTRACTS
• LA Rams v. Cannon - no valid K existed between these parties because there was a condition precedent that the contract must have been approved by the commissioner to become enforceable.
• Facts - Canon was the 1 st round draft pick of the Rams and signed 3 one year contract which he thought would become valid after his college career. Before that he signed with the Oilers and retracted his decision to continue with the Rams.
• Analysis
• Doctrine of unclean hands - (mainly in equity, non-monetary, seeking cases) This court looked at the Rams actions (as persons who are business savvy) as being rather unclean in comparison to Cannon who lacked the appropriate business knowledge.
• Sample v. Gotham Football Club - The team won summary judgment against the player/plaintiff cause of action on the grounds that he deserved the money for the 2 nd and third contract years which he did not complete.
• Facts - Sample signed 3 1-year Ks with Gotham and was discharged during the 2 nd year. He wants all the money. The court says he gets nothing for the last year because he hadn't performed any of his duties for that contract. But the court deliberates over whether he performed any substantial duties of the 2 nd year of which he was terminated in.
• Analysis -
• These contracts are debatably viewed as one because of the character of performance, all football for three consecutive years. There is a total integration clause in the K, which means everything included is in there.
• Collective bargaining - If you have a dispute with the NFL club, the appropriate place to resolve it is with the team arbitrator, not the courts. Technically, the courts do not have subject matter jurisdiction, but if the team waives it, they cannot later raise it again.
• Tollefson v. Green Bay Packers - a printed contract with an added in written stipulation that is a clear sign that there was some "bargained for" provision, and that provision always trumps the printed provision even if it not crossed out.
• Facts - Tollefson signed 3 1-year contracts and was discharged after a few games. He was only paid for the games he performed but sues for the contract minimum because it was bargained for.
HYPO#1 (pg.141): A client comes to you who signed to play with 2 different teams. He wants you to find a loophole to get out of the 1 st contract signed, because the 2 nd K was much better.
- Assume the contract was a signed but not yet put in the mail -- Look to the mailbox rule, the K is effectuated once the K is placed in the mail.not upon receipt.
- Assume K arrived at the team office and the commissioner signed the contract -- it's validity/effectiveness would be contingent upon whether the commissioner's signing was a condition precedent or subsequent.
- The commissioner's signing should be a precedent condition to maintain the good faith of the K, to keep the team from trying to change the K after player's signature.
- Usually the K will specify which kind of condition it is. In professional sports typically it is a precedent condition, in some unknown sport it may be silent on that fact and the court would have to determine.
- HYPO: represent Dion Sanders and offer a K that says if you get 5 interceptions you get a signing bonus. There would be an integration clause included, so to bring the reader of the K back to the original K. Jurisdictions are different (4-corners or parole evidence rule)
- In MD (4-corners), if the K is unambiguous, the judge can tell you what the K says. No jury required. Even if parties agree that they did not mean to say something, it would not matter because the words of the K say what they say.
- Corbin Approach - look at the K, look t parole evidence..combine them and see what was meant
- In professional sports, the courts turn to whatever the collective bargaining provisions provide for. I.e. in football the court always uses New York Law.
- Modification to K without any reason/consideration is not a contract. Also look to Statute of Frauds - if the performance of the K takes more than 1 year to complete it must be in writing.
- K law does not uphold a clause that says "no oral modifications." (UCC/sale of goods, will)
DETERMINING INJURY (injury or inability to perform)
• Tillman v. New Orleans Saints Football - unreliable expert
• Facts: Tillman had a K with team, and was injured before the season started. The team released him and did not pay him. Player contends that he should not be released and sues the team and there is summary judgment for the team, ? . (When a player is released it is usually because they are unable to perform and then they do not get paid.)
• Tillman argues that the doctor's testimony that the team will show is unreliable and so cannot be counted on. The team doctor said he was ready to go back and play (but his report was faulty and the court did not give it any weight), and his private doctor, with a reliable report, said that he was not ready to play.
• Team contends he could play and that he did not give proper notice. Proper notice at this time was 72 hours, now it is a reasonable time.
• Summary judgment means they have not properly laid out the elements to the claim (even if everything he says is true).
• Houston Oilers v. Floyd - The court says if your failure to receive notice is a meaningful breach and actually causes the other party harm, then the court will not hold it against you
• Facts: Floyd returns from injury but was quickly released. He sued for breach because he was not given his 72 hours to see a doctor, post-injury, which was allowed in his contract. The jury found for Floyd. On appeal, the judge determines whether the juries finding were "clearly erroneous." In a jury case the appellate court is usually arguing about jury instructions or that no reasonable jury should have found what they did.
• Team argues Floyd failed to comply with the physical within the 72 hours. He had to file notice that he disagreed with the team's doctor's decision.
• Floyd almost lost on a technicality (the 72 hours), but instead a jury weighed the facts and found for him.
• Shultz v. L.A. Dons -
• Facts: Shultz was injured I the past, he comes into the new team with an old injury, training camp started and he was injured again leaving him unable to play. The team wanted to blame the new injury on the older injury, the player claims it is an entirely unrelated injury.
• Court says the injury was new and the team had to pay on it.
SIGNING BONUSES: What it means now? What it meant 30 years ago?
- A signing bonus originated in the early 60's in sports (the Billy Cannon case). The concept is that something is given in exchange for a promise. Here the promise would be (according to Corbin) the induce of the K itself, the simple signing of the K)
- If someone signs, gets the bonus and then 5 days later bails on the team, he must pay back the bonus.
• Alabama Football v. Stabler
• Alabama Football v. Greenwood - (anticipatory breach), the team could not show that they ready and willing to perform and so the repudiation was justified.
• Facts: player (from Steelers) signed for Alabama , and by the time he was to play Alabama was in financial struggle and they no longer had a team for him to play on. He goes to the WFL, to try and get his K released.
• Team argues he may have had reasonable assurance, but he did not get due assurance.
• Player argues that he did not breach the contract, he had reasonable assurance that there was no team, was unable to get due assurance from the team. He could even have an expert (his agent) to testify that he had other options and that signing with Alabama was not his only option.
• Court says Greenwood gets the money because the team was not ready and willing.
• The team used the signing bonus because they wanted him to leave the Steelers. They wanted to show that they were going to have big name and be a force.
• American League v. National League - player signed with the A's, team says player breached the K and it was "detrimental to the team" then the team says we want our signing bonus money back.
• Player did breach the contract because deferred money was owed to the team under the K and it was not paid.
• To override/appeal an arbitration hearing there must be (1) subject matter jurisdiction or (2) was he reasonable in his ruling (The standard is that the arbitrator was arbitrary and capricious in his decision - this is hard to prove)
• If the arbitrator finds for the player, then the contract is voidable because there was a material breach.
Remedies for breach of contract - typically monetary .
• The NFL is a non-profit organization; the job is to create wealth for 32 guys (owners of the teams). The NFL is exclusive in that they have "good will" built on rivalries, there are no real assets. The rivalries and the names are the assets. It is almost intangible.
RESERVE CLAUSE - courts differ with extent to the reserve clause. You need to know the facts and the history of the case. If there is evidence that the deal was negotiated (and the team gave great concessions to the player to have it in place) then it is good evidence that it was freely bargained for and there is no question of mutuality. But if there was no consideration for it then there is a lack of mutuality and the court will have a problem with it. (why would a reasonable person sign an option or reserve contract???
• Philadelphia Ball Club ( p ) v. LaJoie (1902) - The court says the deal is made at arms length. In exchange for hiring, training and paying him those sums he is to remain there for the entire contract term.
• Ball player had a K with team and then signed another K for another team, left Phili and played for a team in Ohio . There are 2 other ? s to this case that were held to the findings in LaJoie. He was an exceptional player. The club seeks to stop him from joining the other team; they say that there is no money or other player that would be a good remedy.
• There is no mutuality in the LaJoie contract - but it had a " reserve clause " which means the team that drafts your signs you is the team that owns you. You're only leverage is with them. They keep you until they trade you or release you. You have some bargaining power with that team, if they don't pay you well enough you can refuse to play. That bargaining power was much stronger than it is now. Today there is a lot more talent then there was then.
• No mutuality means both parties do not have the same things. One person is stuck in the K and the other person can fire him whenever he wants.
• The reserve clause brought continuity of players.they had the same people on the team every year. Now there is no continuity because the trades and free agency makes a higher turnover.
• Central New York Basketball v. Barnett (1961) - No, LaJoie is the same as an average guy in the modern rule, and everyone is held to the same standard, The new line of thinking, from Barnett, is the idea that yea, the stars are hard, but it is also hard to find a monetary value for the average guy as well. We will "negatively enjoin the breach", which means the court prohibits the player from playing for whoever they wanted to play for.
• A ball player drafted by NY, then he wanted to go to Cleveland . The K with NY had a clause the admitted that he was "the man." Then his new coach had to say he was not "the man" in that clause he signed as a way to get him out of the breach. Barnett lost because the definition of a "special" player had been broadened.
• The old rule is that you have to provide a service that is unique in some way and if you do that you cannot measure a monetary value for that guy, but if you are just average then you can calculate a value.
• EXAM QUESTION: Is Suzie Athlete more likely to win in 1904 or in 1961? Use Lajoi V. Barnettt
• Nassau Sports v. Hampson - plaintiff seeks preliminary injunction to make Hampson fulfill the contract. He violated the "reserve clause." Basically it says you play with me or you play with no one.3
• The reserve clauses do not exist anymore, but if they did, players would jump on them because it would be guaranteed money
• There is no full faith in credit in equity decision.
• Preliminary injunction is sought by plaintiff but the must show that their damages will be worse if they do not get it.
• The test for the PRELIMINARY INJUNTION pg 1-65 (there is no pt. system)
• The plaintiff can show he'd win at trial
• The plaintiff will be irreparably harmed
• Interests of the other party are substantially impaired
• How will public interest be affected
UNCLEAN HANDS
• Boston Celtics v. Shaw -
• Shaw is signed with an Italian team and then starts to sign with the Celtics for 5 years. In the midst of negotiation, he attempts to re-neg on the Celtic deal. The issue goes to arbitration because it says that in the contract. But Shaw wants to go to court because he does not believe that he is bound by the contract.
• Preliminary Injunction - follows the same test as it did in the above case- the court says "no" prelim injunction.
• Shaw should have called his Italian team and said can you extend my deadline while I handle my legal issues
• Unclean hands - means he went in there with the idea of screwing the other team over.
• Shaw said that the Celtics hands are unclean because they got him when he was depressed, and it was unfair. But in reality Shaw had the option of not taking the K.
• American league baseball club v. Chase -
• He played for Chicago and they had an injunction to stop him from playing with Buffalo . Chase ended up making a motion to dissolve the injunction. The court asked
• Should they specifically enforce the negative covenant in Chase's contract?
• This is fundamentally different then the scheme in LaJoie, meaning they did not hold Chase to the contract because there was a lack of mutuality; it was unfair, because of the reserve clause. LaJoie they found there was mutuality in the reserve clause.but there can be mutuality in a reserve clause because there is some level of consideration in the beginning.
• This case is in 1914, during WWI, and in the US the Rockefellers and Carnegies were the wealthiest people in the country. The reserve clause was a result of a monopolistic behavior that was running rampant throughout the country. Historically, these players were coerced
• EXAM: Here is a fact pattern: Who are the experts? How do we set up the case?
• Minnesota Muskies v. Hudson - held that this is a court of equity and you cannot come inhere with unclean hands, you knowing of the contract with St. Louis meant that the Muskies had no standing because they were well aware of what was going on.
• Facts: played ball with St. Louis and had signed a contract with a reserve clause (same old reserve clasue) at the same time the ABA was forming and they offered him a new 3 year contract. He told he was a free agent after the end of his year with St. Louis , but St. Louis knew of the reserve clause at the time of the signing because they had seen his original St. Louis contract while he was looking to sign with the Muskies.
• Washington Capitols v. Barry - held that this is not unclean hands on the part of Oakland because they did not force Barry to take this contract and it was an option K for 3 years down the road. *This is a more narrowly defined concept of what includes unclean hands.
• Facts - he signed with NBA and tries to go with Oakland , and in between was sold to the Caps, but he tried to rescind based on unclean hands and tried to go back to the NBA. Oakland knew he was in a contract with the NBA, and so they made a future contract which was to start 3 years out, after the NBA contract ended. And this was signed. In general contract principles this was an option contract, which says you will play for me down the road, but the team maintains the option for the team, not the player.
TORTS -
• Battery - intentional, offensive contact
• Griggas v. Clausan - find for the plaintiff, defendant was guilty of assault and battery
• Facts - shooting a fowl shot and an opposing player attacked him. The ? argues it is a natural part of the game. Battery -it was an intentional and offensive contact with someone else. Assault - the reasonable apprehension of unwanted/offensive contact (they do not have to actually touch you). If the person doesn't see it coming then it is not an assault.
• Manning v. Grimsley -
• Facts - pitcher is being heckled by fans in the stand. He glares at the hecklers and ultimately throws the ball at the hecklers knowing there is a metal mesh fence between him and the ball.but hits an innocent fan instead.
• If the pitcher can prove that he did not reasonably believe that the ball would go through he fence, then it is seemingly not foreseeable
• Palsgraf - the railroad case where the guy had fireworks on him they exploded and persons were injured, but he was not found guilty because he did not have a duty for the harm was not foreseeable. Cardoza in the dissent said that the carrier had a sea of duty, not just an island of duty.
• EXAM QUESTION: Write me a motion why the ref. calling it a foul should not even come into evidence? The juries' job is to decide what happened and the ref no matter how great his angle is, is making a spontaneous judgment call. The juries can instant replay.
GET NOTES FROM SOMEONE FOR THURSDAY 9/16
Exam - argue this and tell me why your wrong.uses discovery methods, and know those general concepts.
• Negligence - did you do something that an ordinary reasonable person would not do. Must be negligence not just an accident.
• Oswald v. Township High School - gym class basketball game in which defendant wins.so the plaintiff should sue the lawyer because he pleaded the case wrong and it was thrown out (b/c we now see through the Barnhill case (1975) they have raised the bar for this kind of tort. It must be reckless, wanton disregard. Somewhere between negligence and an intentional tort.)
• Facts - guy is forced to play basketball in gym, gets kicked in the game, it is requires defendant that he only need to follow the rules of contact sports.
• In a case like this - the lawyer should plead plain old negligence & reckless, wanton disregard & intentional tort. You have to plead them all because then it is more likely to fall within one of them. If you do plead it incorrectly you would try to amend the complaint.
• This case starts to distinguish between sports that are contact and non-contact. i.e. golf would be a non-contact sport, but baseball and basketball would be considered contact. But there is no general standard for what a contact sport is because every jurisdiction is different.
• HYPO - on the golf course, it slices and hits me at my house causing me bodily injury. Sue the golf course. But if the house is on the golf course when you buy it you assume the risk. If the guy was facing the wrong way and actually shot the ball in an unreasonable direction.it is clearly negligence on the golfer's part.
• ISSUE - can you indemnify yourself for your own negligence, can I pass the risk of my own negligence onto someone else via contract. (i.e. placing a sign that says "play at your own risk," but at a health club you actually sign a contract that says if I am hurt it is not the club's fault). Every state allows you to indemnify your own negligence but all to different varying degree. The standard revolves around whether it is an essential public good if it something you need to live then you cannot indemnify your negligence. Like bread, milk, etc. Things like health clubs are not necessity.
• Savino v. Robertson - golf is not a contact sport and so the players are only held to an ordinary standard of negligence, not a reckless.
• HYPO - Is the warm up at a football game considered a contact sport. The court here would say yes, it is a contact sport because football is a contact sport and we are not going to split hairs as to the moment the guys go on the field and the time the game actually starts.
• Public Policy - Balance the interest of splitting hairs and making a blanket statement as to anyone involved in the sport is involved in that level of contact.even the water boy.
• Zurla v. Hydell - golf case where a guy negligently hit a golf ball and hit someone else in the head
• For a contact sport you must only establish wanton and reckless disregard standard. (
• For a non-contact sport it need only be ordinary negligence standard. (i.e. if someone was bowing and was harmed it only need to be negligence.
• Franzek v. Calspan -
• Plaintiff argues although there is a technical choice it is not a meaningful, real choice in the big picture
• Defense argues, he is an adult and we want parties to be contract freely and be responsible for them.
• Hackbart v. Cincinnati Bengal 's - (these cases are very fact intensive) in frustration the player whacked the plaintiff over the head and injured him
• Case 1 - district court - although that was not within the ordinary scheme of the playing the game, it can be expected that these people are going to hurt each other considering the level of frustrations and personalities on the field. Plaintiff cannot recover because this is reasonably expected. The player should appeal in that the trial court erred and the judge did not act as a reasonable judge would have.,
• Case II - The appeals court - takes the trial court judges understanding of the facts and construe them most favorably to the plaintiff. To overturn the trial court decision the Appeals court sees whether the evidence does not support the judgment and that the plaintiff's expectation of being an NFL player, and even call experts (players, coaches). What is the general roughness of the game, what is the intent of the player? If it is a close call, you have to factoring all the facts.
ANTI-TRUST LAW
• General History - the turn of the century, we made a decision to allow monopolies to flourish where they would naturally. At this time there were trusts for many of the major industries in this company, and it worked well because at that time there were not a lot of national corporations. The monopoly can be good because ot lends to stability in price.
• The Sherman Act was written by a senator and was an attempt to stop companies ability of getting together and streamlining the price of something. (it didn't really work)
• Clayton Act - avoidance of trade restraints
• Anti-trust laws continue to tighten
• Our sports cases start in the 20's where federal baseball was at issue with a anti-trust act.
• Federal Baseball v. National League - baseball is not affected by the anti-trust laws because it is not related to interstate commerce.
• Holmes said that the Sherman act did not apply to the federal baseball club. It was in fact a state commerce interest and not a national one.
• Really baseball is not interstate in that fans are traveling, but they are aired on the radio and other people are listening. In 1919, "8 men out" a bunch of the white sox fix the world series and throw the game to win gambling bets.
• Betting on your own team makes fans question the integrity of the game, and the suspense that is inherent in the game, the mystery of who will win is gone!
• Flood v. Kuhn -
• Floods beef was that he was traded without his permission, but he did not realize that the team acted within accordance of the reserve clause and was allowed. So he argues that baseball is violating the anti-trust laws because they are not allowing him to go where he wants, and they are making him.
• It is bad to engage in anti-trust conduct,
• The NFL draft is NOT violating anti-trust because even though it is a kind of conspiracy to restrain trade because it is collectively bargained for. The players union says I will give up the rights that I have and it is okay because you are going to give me something back in return.minimum salaries, etc.
• Maurice Claret decision - a guy who is 20 years old cannot play NFL until he has had 3 full college years in, he can play 4 years out.
• In this case, anti-trust laws do not apply because of the history of the game and the federal baseball decision. Stare decisis - the court has already ruled on this. (the only way to overrule it is if the circumstances had changed and it not sufficient to simply say we were wrong. There needs to be more to it than a basic decision like that, it needs more (compelling wrong, absolutely inapplicable to the reality today) because it has become a part of culture and people rely on it. We want the laws to stay the same because of judicial economy and practicality of people knowing the law. If the law changes overnight all the time, people might not be aware.
• the practical effect was that if it did apply anti-trust laws than one league would start up with reserve clauses and then no one would want to play for the teams that still had them.
• Additionally, no other sport has anti-trust laws applied to them and no one has given any good reason to believe that baseball is any different.
• Baseball argues that Congress saw Federal baseball case and knows how it was decided. If congress wanted to change the rule, they would have done so. The fact that they did not is indicia of the fact that they have silently approved
• The con to that is that à why congress would get involved with baseball. Plus the problem with inactivity is that we do not really know if congress thought about it or even read it. Silence is not a stand.
• This was a unique opinion because they talk about the history of the game in the beginning. It is unique in the American culture
• Curt-Flood Act - Baseball cannot engage in anti-trust behavior against its own players
• DISSENT - talk about stare decisis and that we should not just toss logic and reason just because we have always done it that way. The world is always evolving and so should the law.
• Is this ruling stringer back then than it is now? What if someone started a new team in Baltimore and Orioles wanted to stop them via violating anti-trust laws. Some would say it doesn't apply because of Kurt-flood. But Congress has not spoken on that because this is team to team, not player and team. So congress silence is actually silence and they have not made a decision regarding this. The rule they made is narrow and if they meant it to be broader they would have done it to begin with.
• Mackey v. NFL
• Joint enterprise - football by nature engages in anti-trust behavior, these teams work so much better in unison then they would separately
• Mackey at his option year became a free agent, and the caveats to that is that all the team want to be competitive and spread out the talent. So now if someone wants him the new term that wants him has to sit down and make a good trade with the old team he used to play with. And this really isn't free agency. If the teams could not agree, the Pete Roselle, the commissioner, had the final say and came up with what he thought was fair. And this frustrates players from wanting to be free agents because only one team is bidding for you services
• Roselle Rule is a pro competitive rule and the idea is that it is important to achieve parody among the teams, they are all competitive with each other. The idea is without this, the fans will lose interest.
• The court looked at whether the roselle rule violated anti-trust in 2 ways via:
• Per se : it is so obviously on its face anti-competitive that we do not even analyze it. (and the district court this a violation of per se rule.
• Rule of reason: because the business cannot survive without it.
• means some things are anti-competitive SO we are going to balance them with the pro competitive affects with the anti-competitive harms.and if so it better be narrowly tailored to meet those goals only.
• Smith v. Pro Football - smith was d-back for redskins, drafted in 68 but is injured at the end of the season. He sues over the draft being a violation of the Sherman act. They went back and forth on whether it was per se or rule of reason. They went with rule of reason because the definition. The draft is not a group boycott because they are not competitors in any economic sense. This is a joint venture
• Rule of reason : is it Anti competitive in purpose and/or effect? Yes because the players do not have a chance to bargain as to what team they want.
• The NFL says it is pro competitive because they want split up the talent among the teams.but the court said that this is not pro competitive for the players
• The court didn't fully grasp the idea of a pro-competitive draft and parody of the teams.
• Court says although it was anti competitive in purpose on its face they have 2 solutions: 1 - if a player cannot come to contract with the team they were drafted with they could K with another team or 2 - they could . but the court is not obliged to design a draft that does not violate anti-trust.
• HYPO: is a salary cap violating anti-trust? Any salary cap would violate the Sherman Act but in the NFL it does not because the cap was collectively bargained for. The players chose to accept the hard cap because other things in turn which they believed got hard value.
• There is a labor exception to the Sherman Act.as long as it
• Economic competition v. economic competition - the league says these things are married because we are a joint venture.
• If the pro-competitive effects outweigh the anti-competitive effects it is good, if vice versa it is bad and violates the Sherman Act. If it is bad, the court will tell you to go back to the drawing board; they do not rewrite it for you.
• Molinas v. National Basketball Association - a guy is betting on his own team and he is suspended for that. Is it anti-competitive to suspend a player? Yes, because then the best player cannot play and that is inherently anti-competitive
• The pro-competitive affects of suspension far outweigh any anti-competitive aspects. The league has a right when players gambling their own sport.
• The rule a reason test applies and this is a pro-competitive rule. Don't stop at something being anti because there is probably something pro and then see if one outweighs the other.
• Blalock v. LPGA - woman golfer is cheating, and her colleagues get together and suspend her. The LPGA, a group of people who make up the league, not a group of teams, decide to suspend her. This LPGA is violation of anti-trust.
• This group of people that are in direct competition with Blalock are suspending her for cheating and this is a direct violation of the Sherman act because they are incapable of being unbiased as personal competitors against her. Applying the rule of reason here means they lose.
• They could have organized a group that was detached from the players themselves who does not have a direct interest bin the outcome of the game itself.
• NASL v. NFL - (NOT ON EXAM) if you own an NFL team you cannot own a soccer team. The owners say this makes sense because you are getting specialized knowledge i.e. soccer could start competing against football in terms of marketing and TV because they know what the NFL does.
• MidTerm - are the facts of each case important or just the holdings, the names of the cases or just the ideas.
POST-MIDTERM - guest speaker
• AN AGENT - the legal relationship is between the union (the exclusive bargaining agent for the players) They have the authority to negotiate:
• Wages
• Hours
• Conditions of employment
• Agents must become (easily) certified. agent are actually a representative of the union. So the union gives the agent the ability to act as that player's agent. responsibilities to client:
• Fiduciary duty (follow his best interest: loyalty, goof faith, fair and honest dealing
• Simms v. agent - fiduciary duty was breached. Simms was a running back for Detroit . He should have been first round pick out of college. Simms agent was primarily a dentist, which was his first mistake. The dentist was part owner of a football team in the World League. The problem was he was negotiating with the Lions and then the World league team called to negotiate. He didn't disclose the conflict of interest that he was an owner of this team of which he was negotiating with for Simms.
• When they were going back and forth you always go back after a deal and see if they will offer more, but this guy tool the world league deal and never went back to the lions to see if they would beat it. AND the agent was never even present during the close of the deal, and the court found this behavior was awful and ruled against him.
• Brown v. Wolf - Wolf was one of the first agents around. He represented a hockey player signing a multi-year deal and the team went bankrupt during the K and the player only received half the total while the agent received all of it. The court refused to grant summary judgment because he never investigated the clubs financial status. That was a duty of the agent.because it affected whether or not the contract could be completed.
• An agent can only collect your fee as the player collects his money
• Zimm v. Parish - Parish played for the Bangles, and the agent negotiated a deal after which the player terminated the agent, refused to pay and alleged that the agent did not fulfill his duties.
• The way the K was written was to give the agent 10% (now max is 3%). It was written that the agent was to be played by the club (now you cannot receive payments from the club, because this would not be representing the players best interests: you could get bonuses from the club to get certain payers, conflict of interest because you have an interest in what the club does. And if the club knows how the agent gets paid (i.e. incentives) then the K negotiator can say listen I will give you money on the back side of this deal. Very unclean.)
ANTI TRUST CONTINUED
• L.A. Coliseum - was the rule that limited teams changing cities, a limitation on the teams ability to lose and so a violation of the anti-trust laws.
• The old rule was that you needed a unanimous decision by the entire NFL leader to get a team to move to another town.
• The NFL decided it need not be a unanimous consent.b/c not a lot of groups requires this. But we do not want to make a majority because that might be too slight. They liked there having to ¾ of the vote.
• The NFL has a compelling reason to not went the tem to move to LA, because there was already a team there.The Rams, and there was a fertile market in Oakland for the Raiders, there was still a reasonable level of support for the team in Oakland .
• The one team for each city argument is okay.but the fact that the owner of the Oakland team was willing to leave shows that there must have been a market for the team. He wanted to leave one good market for another good market. It is not dispositive but it is reasonable evidence.
• Is it a per se violation - NO
• Rule of Reason - Yes, it violates and the team is allowed to go
• Calling an expert would be calling an economist. (in 2004, the best evidence that the city cannot handle it is that they have zero teams right now)
• NBA v. San Diego Clippers - the clippers want to go to LA, just after the Raiders case is lost and they claim this is a no-brainer, and they file a motion for summary judgment. The court says. your right.move to LA.
• This is wrong, you should not be able to get summary judgment on a anti-trust issue of this kind (assuming the facts of the Coliseum case and the Clippers case are essentially the same, not in dispute)
• Because basketball and football are inherently different and they require a disputing of facts over the differences in economic opinions. When there is a disputing of facts there can be no summary judgment.
• We are narrowly tailoring our decisions for a case-by-case scenario.which good, but it takes time and money.
• People wince because the jury.not the economists are deciding. And do the juries even get it.
• See exam example on p.3-68
LABOR LAW
• Backdrop for labor law: classically
• Who can form into labor groups?
• American League of Baseball v. National Umpires - issue is whether umpires are protected under the NLRA. Yes.
• They discuss whether umpires should be grouped in with the players in baseball because of baseballs anti-trust exemptions. The idea is whether or not umpires are actually supervisors.because if they are supervisors cannot be in a union.
• Supervisors are people who have authority to direct the work force. Bosses on some level.
• They are on some level bosses because they have a lot of authority out there BUT they are not directing the work force. They cannot hire and fire.so they are NOT supervisors for the purposes of the NLRB.
• NLRB v. Transportation Management (*This case nothing to do with sports)
• Guy leaves his keys in the car, and everybody does it, but the manual says you do this and you're fired.
• Wright line case - held the plaintiff (employee) has the initial burden of showing there was some reason for the firing that was related to the union activity in the first place. It has to have been a factor, not a substantial factor, but merely a factor. Once he meets that burden (not the winning burden, just a precursory burden) then the burden shifts over the employer to prove he would have fired him anyway.
• This guy signs his partners' signature and it something he does all the time, everyone knows, and one day the people say we are overworked and under paid let's set up a union shop here. This guy is the ring leader and it irritates people, so the partners want to fire him. They find the company manual and there is a rule that says he cannot sign other people's names on documents and they fire him for doing it.
• This guy was unfairly fired but they followed the rules so it was legit.now the court needs to come up with a rule about this to make it fairer. Now the federal court is hearing these issues in order to have uniform decisions.
• The other problem is the guy does a decent job, he messes up every once in awhile, (equivalent to the guy who runs a fast 40 yard dash and hurts his ankle a little, loses a 10 th of a second and falls over the edge. he's a tweener) and this "tweener" starts a union. This guy is not a model employee (those employees shut up and do what they are told) not those that start unions.
• Maryland Standard : substantial contributing cause -basically there can be a multitude of factors that cause the same thing.you know it when you see it, we do not have an exact definition.
• There could be a fault free plaintiff but the defendant has contributed, only in part, to the injury. The plaintiff has led poisoning he got from working in a factory, and then one day you drive by and thrown led paint chips at him. The court says you contributed 2% of the poisoning but that is not a substantial cause. It would have been the drive by throwers burden to prove that his throwing the paint chips was not a substantial factor.
• Some people thought the shifting of the burden might be unconstitutional but it is really only civil burden.
• Elmer Nordstrom v. Seattle Seahawks (underscores that when you are trying to apply the Wright line test it is very fact extensive.)
• North American Soccer League v. NLRB - determining whether
• Unfair labor practice for players - to refuse collective bargaining
• The board is not required to choose the most appropriate bargaining unit. But they are to find one that satisfies the situation. The courts are not going to impose the judgment as to what is the most appropriate, but rather they will say what is the least appropriate.
• Mario v. North American - Terms and condition of employment.some things are permissive bargaining subjects and some are mandatory. (i.e. uniform colors, Nbc/Cbs players don't get a say). When there is a change in the conditions of the workplace the bargaining with the union becomes a must. Look at the below scenarios:
• When the league changes the brand of shoe that someone has to wear when they play is not a condition of the workplace because it should be easy enough to find an Addidas shoe that is wearable.
• Initiating a new winter since - initiating means we talked about it.it didn't actually change anything.
• Taking affirmative steps to have the winter season - that is a change in the condition of the workplace
• Increasing the length of the season is a change
• Reducing the rosters is a change because if you are the one person cut from the roster than your workplace conditions have been dramatically changed.
• Individual contracts (side-deals) is a bad thing and affects the terms and conditions of the workplace.
• National Football League Players v. NLRB - the instated rule that players could be fined for getting off the bench once a fight starts.
• The commissioner has the power, on his own accord, to fine the players, but if the ownership dictates to the commissioner to do it then it is unethical, because the owners pay the commissioners paycheck.
• This does affect the terms and conditions of the employment because it affects wages.
• Review of Labor Points:
• Supervisors are not in the union (umpires case)
• Bargaining unit.make it something good (meaning it needn't be the most appropriate/best bargaining unit but it must be a reasonable bargaining unit.it should have some foundation in logic and reason), if it is decent idea then we require bargaining.
• Mandatory vs. permissive bargaining units - things that change the conditions of the workplace MUST be bargained for.
• There is some value in having a larger union: but you typically choose smaller unions over large ones. The strength is in numbers (size) but also in
COMBINATION OF ANTI-TRUST AND LABOR LAW
• The Sherman act does not clearly except labor, but buy its inherent definition a union engages in monopolistic activity because it is represents all of them.
• Nobody else is allowed to engage in monopolistic activity except for unions, so when management/ownership combines with a union and they together act monopolistic. Do they get a free pass because they are a union? Or are they automatically violation the Sherman/Clayton act?
• Deals with the idea of the unions
• The Sherman act does not explicitly exempt labor
• Allen Bradley Co . - management companies cannot engage in monopolistic activities by aligning with unions.
• In NYC a threesome of companies that sell electrical equipment came together and said they could only trade and buy from each other. They made their own monopoly. The union that represents the workers said they would only buy from that group and in making this deal they increased employee wages.
• Price elasticity - a high and a low in a price range. The idea is that if you are an aids patient and they are selling drugs you need than that is a relatively inelastic good, it is not price dependant. As the price rises the demand remains the same. Essential goods are relatively inelastic. Other items, luxury goods, are price dependant
• Electronics are relatively elastic. So that means that if the prices rise the companies will sell less goods.
• Winners - Labor & Management come together
• The workers win because the demand is higher than they get to work more and get higher wages.
• The bosses of the companies have a definite market. And then if the demand is down and there is only a small number of sellers they can be nicer about how they deal with the bad times. If there are 25 competitors than they get cut throat.
• Losers - the consumers and any foreign producer outside of the place that is agreed to buy from.
• Court says congress never intended union to create that kind of business monopoly. Labor unions can engage in monopolistic activities.but you cannot have management companies aligning with unions just to engage in monopolistic activities.
• The economics behind it is
• Jewel Tea Company - the court agrees with the union and that if they are opened after 6 it puts an unfair burden on the butchers.
• The union said that between 9am and 6pm they were gonna have their butchers work, and no other times. The background behind this is that butchers were taken advantage of in terms of hours and such. This was an agreement to resolve that problem.
• Jewel (owner of store) has a problem with it because he wants to be able to serve meat past 6 pm because there is a demand. And when there are no butchers he cannot sell the meat. There is a demand beyond the normal work hours.
• Between Jewel and the meat cutters union there is an agreement
• Pennington -
• Coal Industry; the situation is where union has inspired the management to screw the little guy. Technology is on the rise and jobs will be lost, so they wanted to give all the business to the big companies because they were the only ones that were going to survive.
• Economy of the scale - it costs a lot less for a large company to produce something than a small company. High economy of the scale is high fixed costs (i.e. health clubs - you have a high upfront costs, equipment and rent, and then after that it was cheap)
• Mackey Case - arms length bargaining = if you do not have it, it means that the bargain was not fair because both sides are acting on their own free will.nothing is being forced.
• The idea is that you can have principles that inherently violate anti-trust rules as long as the parties agree to it.
• Roselle rule - the idea that you are indebted to one team forever.
• You cannot force a reserve clause down someone's throat because that is not bargained for and antitrust behavior.
• Historically, the worker gets screwed. It is not a viable bargain to say this is the way it has always been done and we are not changing it. So there must be a give and take.
• This is not an oppressed class, so it makes it a little harder.
• McCourt v. Cali Sports -
• Dealing with a reserve clause similar to the rozelle rule and losing free agents in the Hickey league. The lower court said there was no arm's length bargaining relying on Mackey. (the facts are different than Mackey but the ideas are the same). McCourt was rookie and had a great year, he played for the red wings.a goalie on another team became a free agent and signed with the red wings then the red wings traded McCourt for compensation. McCourt challenged that rule requiring that the team that takes your free agent must compensate you for that player is a violation of arm's length bargaining.
• In Mackey the 3 issues repeated here are:
• Hockey players
• Does it involve the terms and conditions of employment (Informed and practical effect)?
• Whether there was bonafide arms length bargaining? (in Mackey there was not)
• The McCourt court here would say refusal to compromise a position on one side of the bargaining does not mean that there was no good faith bargain, but rather it would be called " hard bargaining ." Just because they didn't change their position does not mean they violated the bargaining requirements.
• Wood
• Fundamental precept - the court says we are not going to make a difference between basketball, football and the guys steel mine workers.
• Woods says I was not a party to the agreement, so the teams are negotiating away might rights before I am even in the picture.
• This does not fly, because it is impossible for every player to bargain for every bone of their rights, every time. AND it is meant to protect players already in the NFL, not hurt the new player coming in.
• Wood was trying to cherry pick all the things that he did not benefit from.he didn't want to touch the things that he was benefiting from. This was not allowed.
• Clarett v. NFL - NFL's eligibility rule fell within scope of nonstatutory exemption to antitrust review, and the fact that NFL and players' union did not bargain over rule did not exclude rule from scope of nonstatutory exemption
• Clarett was a remarkable running back in freshman year of college at Ohio State . It was questionable whether he would be a good NFL player. After his freshman year, Clarett had a lot unrelated issues and as a result he decides he want to go right into the NFL, but there us a rule that says you must be in the college ball system for 3 full years before you can come to the NFL. Clarett then files suit in Ohio and the district court says you can go into the draft.he didn't like the rules.
• Does the no statutory exemption apply.does the labor exemption apply to this?
• Does the rule address a mandatory subject of collective bargaining
• Whether the labor exemption is being applied to those excluded
• Was there arms length negotiation?
• If you are the NFL.if you lose any one of them, you lose the case. The district court says they lose them all, the circuit court says you win them all.
• District Court said (which is rejected):
• The rules does address collective bargaining because the rule itself if not mandatory
• Clarett is not permitted to be drafted.his eligibility was not the union to trade away. The nonstatutory exemption does not apply to subject which are not mandatory and eligibility is not covered.
• Dissent: they think it is so inherently anti-competitive and so it cannot be allowed, it should be wiped out. Disagrees with Mackey too. (but these are different circuit cases and need not agree)
• Circuit Court says: in order to fall within a nonstatutory exemption a restraint must :
• primarily affect only the parties to the collective bargaining relationship ,
• court says yes: Clarett was inside the collective bargaining agreement, because it was between players and owners, Clarett is a future player in this group.
• concern a mandatory subject of collective bargaining ,
• yes, contrary to the district courts belief this court says eligibility rules are mandatory bargaining subjects
• Be the product of bona fide arm's-length bargaining .
• Yes, this is an arm's length process à The fact that a position of a party on an issue remains unchanged does mean that there was no collective bargaining over the issue. If you stick your feet in the mud and refuse to talk about it, that in and of itself is not participating in arm's length bargaining.
• The court uses the Mackey test, but they do not feel compelled to follow it exactly.
• From owners standpoint they must satisfy all three.
• There is a dispute as to whether raising the nonstatutory exemption , is an affirmative defense? (which would means the burden of proof changes)
• The district court felt it was an affirmative defense and in the context this is a big deal because now the league has the burden of proof.
• The circuit court said this is NOT an affirmative defense (and said it in dicta because it was not a paramount issue)
• This court talks about Wood and said that to allow Clarett to jump into the draft would be in violation.
• Oldfield v. Athletic Congress
• Plaintiff was not allowed to complete in the Olympics. He became a professional in lieu.
• ONLY when the statute is ambiguous as to if there is a private cause of action do you look at the factors
• The court factors 4 things: whether or not congress intended to create a cause of action. (Most important factor.
• whether the plaintiff is a member of a class for whose special benefit the statute was enacted
• whether there is an indication of congress's intent to create or deny a private remedy
• whether a private remedy would be consistent with the statutes underlying purpose
• Whether the cause of action traditionally is regulated by the state law.
• Oklahoma secondary school activities association v. Midget
• In this time period the idea towards progress was integration and bringing all people together. In order to do this bussing came about...because we had to bring people that lived in different areas to the same schools.
• Facts: a black player moves from a black school to a white school and then when he goes back to the black school (because he wanted to play a sport) but at that point he is denied the right to waive the year hold. All of his games are forfeited because he went back to his majority school, and they sue
• The court says due process...follow your own internal rules and by laws, if you violate your own rule it is a violation, but that law cannot be arbitrary and capricious. As long as a reasonable person could have found as you did at the time it is okay. The court says they do not hear the merits because it was in absence of fraud and collusion -> and the procedural due process was respected.
• Athletically they tried to create conditions by which people would go to the minority schools.
• In every highschool in Maryland today you can go to whatever school you want and you want to transfer, you can do it but you ave to sit out a year. This is to stop people from bouncing high schools to avoid people moving for athletic purposes. BUT, if were at a majority school and wanted to move to a minority school, you would not have to sit out for that year...and this would encourage intergation.
• California State U, Hayward v. NCAA
• Flip side of Midget - you have a rule and even if it is a a bad one ( an eligibility rule) but you must enforce it in accordance with what it says. The only prblem is if the rule is vague and ambiguous and then there is a problem, because the rule is subject to more than one interpretation
• NCAA v. Tarkanian
• Tarkanian is a great basketball coach at UNLV (not a school known for academics). At the time of this case this was a basketball powerhouse school. And Tarkanian was a tenured professor and this was something the school did for their coaches...and allowed them to have money from commercial contracts as well.
• Tarkanian was cheating right under the nose of the NCAA, and they went to the school and said we are going to sanction you...x amount if you fire this guy and we will fine you double the amount of x if you do not. Tarkanian sues.
• The school did not have a lot of options, they could follow the sanction, pull from the NCAA, reassign the people in question. Not all of these options were realistic. Pulling from the NCAA was not really an option because it would demolish the team, no one would want to watch them. So, UNLV fires Tarkanian but says we don't want to...we only do it because the NCAA is making us.
• Is the NCAA (a private organization) a defacto public actor? This means if this private organization is making the school do this (the school really has no other realistic choice) than they are acting as a public actor and the due process clause applies.
• The majority said...NO you had choices and you may not have liked the other choices but they were there. You could have pulled from the league. The UNLV did not delegate its power to the NCAA, and the NCAA did not have the power to do what UNLV did.
• Dissent - the private actor was acting as a defacto public actor.
• Louisiana High School Athletic Association v. St Augustine High School
• If the private organization is really a public organization (funded by public monies) than they are actually looked as a public organization.
• Brand v. Sheldon Community School - There is a bright line rule that there is no property interest in the expectation of a college scholarship.
• A girl had consensual sex with Brand and a number of other men at the same time, of the school's property. Word got around. Everybody gets punished. The guy cannot wrestle in his senior year. He sues.
• One of the questions in the case is the issue of a college scholarship and whether or not Brand had a property interest in his college scholarship? Brand wants to prove that he would have gotten a scholarship if it were not for this incident (this would be easy for him to do).
• He says that since he knows he is getting a scholarship he has a property interest BUT the court says he does not have a property interest in the expectation of a college scholarship.
• we have this bright line rule because it prevents wasteful litigation.
• The expert would have to say "to a reasonable degree of wrestling couch certainty," I believe Brand would have gotten a scholarship...and so this would be a fact for the jury to balance. THE REASONABLE STANDARD OF EXPERT IS TO BE ON EXAM
• NOTE: once a scholarship is awarded there is a property interest, but only once it is awarded.
• Amateur Sports Law in Maryland : University of Maryland v. Baltimore Sun: Maryland Court of Appeals say public school coaches salaries and compensation a matter of public record.
• Franchise Label - slap a tag on a guy and make him a franchise player (like the QB or Ray Lewis). Meaning the maximum salary he can receive is the average of the top 5 players that also play his position.
• Salary Cap - (1) collectively bargained for deal that keeps owners... (2) the NFL has had a great desire to keep parody. So there is a complicated system to try and keep everyone on the same playing field.
• The signing bonus is paid to player all at once when the contract is signed, but for salary cap purposes the team spreads that money out over time so not to subtract a large chunk of change from the cap for one specific year. I f the player is cut before June 1-the team does not have the option of spreading out the remainder of the bonus over the left over years on the contract, rather the team must subtract all the remainder of the signing bonus (not already subtracted) from the cap for that upcoming year all at once. If they cut on or after June one, the team moust automatically split the remainder over the next two years. No option.
• player has 4 year contract for 4 million dollar signing bonus and a million dollars a year. Each year, for salary cap purposes he gets 2 million. (8 million spread out over 4 years)
• If the player gets cut after year 2...depending on what time of year it is determines what monies they get.. If it is June 1 st (the big football cut date).
• If cut before June 1 st - all the money comes due for cap purposes in that calendar year.
• If cut on June 1 - the team must spread it out over the next two years
AGENTS ISSUE
• Zinn v. Parish - the idea is that when an existing agent is fired because he is not holding up his end of the bargain that original agent gets the settled upon fee regardless of the fact that some time after the contract was signed he was terminated. The newly hired agent does not get it.
• You have an agent who negotiates the deal 2 million a year, the player calls a year later says you guys are not taking care of me any more and I am firing you and hiring a new agent. The new guy does all the right stuff (calls the team, calls the player, etc. to push the contract along and keep every one happy) and says I should be getting paid my 3% a year. BUT the original agent gets the fee regardless of the fact that some time after the contract was signed he was terminated.
• The new guy might be able to get the old contract severed (but there must be a substantive material change to the contract to do this) and renegotiate a new one. BUT the old guy still gets his percent on the improved contract and the new guy would only get an amount that was above the original contract amount.
• The maximum cut an agent can get is 3%...and the NFL publishes a list of all the agents and what they are making. They can charge additional services (i.e.taxes) to lead to additional charges.
• Brown v. Wolf - summary judgment and malice
• When are punitive damages allowed?
• Jurisdiction vary as to standards
• The standard for punitive damages in Maryland in is that there be "actual malice." Zanovia case. There is no cap on punitive damage like there are on things like emotional damages etc.
• Summary judgment - even if we agree on everything, you still should find in my favor because there is NO dispute as to the facts, the only dispute is to the law.
• Detroit Lions v. Argovitz (p.7-7) - there are some conflicts that are so great that they transcend the conflict and it can be waived, put aside.
• Argovitz was Sims agent and was also acquiring the Detroit Lyons team himself. He realized that he could pretend the Lyons were interested in him and used this as a bargaining tool to get him signed with another team.
• Maryland athlete agent law: Md. Code. Ann. Bus. Reg. §§ 4-401 - 4-426 , enacted in 1992, amended in 1998.
TITLE 9 - students and employees of education institutions cannot be denied rights based on sex. There are 2 parts to the title: (1) there is one title 9 that provides opportunity for women to play sports they couldn't play before. (2) is the title 9 that has the backlash on men's sports to make-up for the problems with women's sports.
• Passed in 1972, modifying the Civil Rights Act
• Linden Johnson, in 63 Kennedy dies, nation backs up Johnson (but it is thought that the election will be difficult).political advisors thought it was best to hold off on the civil rights act before the election. Mansfield said that if you push the civil rights act you will lose the South for the next 50 years. Johnson agreed - but said "so be it, everyone should be treated equal."
• Issues related to sex were not addressed appropriately and so came Title 9.
• Analyzing whether there is a violation of title 9: The spirit of Title 9 is Equal Opportunity!
• Is the school federally funded?
• What is the enrollment of males to females? 50/50
• Number of men playing sports; number of women playing sports? 1500/500
• Total net cost of program: travel costs, locker rooms, other facilities?
• How much money is coming in from the sport?
• Is there a balance between the sports? (soccer team for soccer team)
• Interest in sports? (But there is no formula for determining if all persons interested in playing are actually playing)
• if this breaks down to be equal in terms how many players there are.
• The idea is that women have consistently been given disproportionate opportunities to men.
• Bush administration says we have taken it too far, and now some men are unable to play the sports they want.
• Football - some people think there should be a football exception because: there are so many people on a football team/they are very expensive and it brings in the most money.
• Cohen v. Brown University - they implement a 3 prong test. The school has to meet one of the following: (1) participation opportunities for both sexes proportionate to overall enrollment in the school (2) if the answer to #1 is unequal then. indicate a history of continued expansion that is demonstratively responsive to the interest of the unrepresented sex OR (3) demonstrate the interest and abilities of the under represented sex have been fully accommodated. do a study that women are not interested in playing.
• Usually when you have a trial there is a very specific remedy, but in this case the district court said - go fix this problem, then come back and we will tell you what we think about it.
• What is ironic about this case is that it is Brown.ivy league, not a sports oriented school.
• NEED TO KNOW
• NO Allan Bradley - union cannot hook up with management to engage in anti-tryst behavior.
• NO jewel tea
• NO united mine workers
• NO Mackey - arms length bargaining. Cannot impose your will on the other party when they do not have an option. But it is usually not so clear. Clarett did not agree with Mackey. Agree with McCourt .
• NO Reynolds
• NO Woods v. NBA - impose rules on persons not yet I the league
• YES Oldfields - know the courts factors, and understand that you do not get to the court factors if the statute is clear as to whether or no there is a private cause of action. ONLY when the statute is ambiguous as to if there is a private cause of action do you look at the factors
• YES Midget - an association has to stand by due process cannot make decision outside of bylaws or that are capricious and arbitrary
• YES Tarkanian - READ IT - whether or not a private organization can be turned into a de facto state actor subject to due process. Look at Dissent in Dennis. KNOW THE FACTS and be able to distinguish them with the exam fact pattern
• Clarett
• YES Bran - there is not a property interest in the expectation of a college scholarship, but there is if it is already awarded. (group sex)
• Agents - the idea that you negotiate a players contract - you get the value which you negotiate whether or not they switch agents along the way.
• Salary cap - how things are spread out,
• NO Dunn v. Steinberg case
• Intellectual Property - OBVIOUS
• Title 9 -
• There are actually two Title IX questions. The first I addressed in the last email. The second involves one of the losing arguments/themes Brown utilized in the case in presenting its defense.
• There may be a question on the exam on Title IX asking you to apply a test.
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