Sports Law Outline – Simon & Pothier – Spring 2014
Class One – Introduction to the Course; Organization of a Sports League
CHAPTER ONE – MORAL INTEGRITY OF THE SPORT: THE ROLE OF THE COMMISSIONER AND THE LAW
A. Pete Rose v. Bart Giamatti – Page 3
· The only legitimate claim Rose could make is breach of contract – he could say there is nothing in the constitution that says you can do this to me; it says only my team can do it
· No due process because it’s not a state action – Bud Selig doesn’t owe due process to anyone (nor did Giamatti) because he is not engaged in state action
B. The Legal Scope of the Commissioner’s Authority – Page 7
· American League of Baseball Club of New York (Yankees) v. Johnson (1919) – Page 8
o Johnson walks off the field one day to go fishing. He is traded to the Yankees and suspended by the commissioner. The Yankees sue and say they should get to impose discipline because it only affects the team. The commissioner should only get to discipline for things that are broader and affect all of baseball (such as punching an umpire in the nose)
o The Yankees win the case – Johnson is not allowed to be suspended; the court reads the power of the commissioner very narrowly; his powers only extend to things detrimental to baseball. The team disciplines the players
o This case doesn’t last long because of the Black Sox scandal a few years later
· Black Sox Scandal
o The White Sox were alleged to have thrown the World Series. Following this, instead of a three-person commission; the league hired one commissioner whose decision would be binding on all subjects. The commissioner can order anything in the best interest of baseball; no one reviews him
· Milwaukee Amer. Ass’n v. Landis (1931) – Page 11
o Dispute over minor league teams; people challenged the commissioner and the court said you can’t challenge the commissioner
o The court says the commissioner has almost unlimited decision; the commissioner has the powers of a benevolent but absolute despot
o H: The commissioner had almost unlimited power and discretion and the courts engaged in very limited judicial review
Class Two – Powers of a League Commissioner
· Finley v. Kuhn (1978) – Page 15
o F: Finley owned Oakland and free agency was just beginning. Finley decided he was going to sell his three best players who were going to become free agents at the end of the season anyways because he realized he was going to be a playoff contender. Kuhn (Commissioner) decided that selling the players wasn’t in the best interest of baseball and ruined the competitive balance. The district court said that it was okay for Kuhn to block the trade. Finley alleged that it was procedurally unfair for the Commissioner to fail to warn him that he would disapprove large cash assignments of star players even if they complied with the MLB rules. Finley said the Kuhn didn’t have the authority to tell him he couldn’t do something that the rules didn’t prohibit.
o Finley also said that what he did didn’t involve an act of moral turpitude, which was one of the two things the Commissioner was allowed to do (the other being enforcing the rules)
o I: Does the commissioner of baseball have, by contract, the authority to disapprove player assignments which he finds to be “not in the best interests of baseball”
o H/R: “We conclude that the evidence fully supports, and we agree with, the district court’s finding and conclusion that the Commissioner ‘acted in goo faith, after investigation, consultation and deliberation, in a manner which he determined to be in the best interests of baseball’ and that ‘[w]hether he was right or wrong is beyond the competence and the jurisdiction of this court to decide.”
§ Finley’s arguments do not state a claim
§ It’s a breach of contract case – all the rest of the claims are no good
§ Bottom line – big win for the Commissioner
§ Commissioner has broad power
o Waiver of recourse clause – informed parties, freely contracting, may waive their recourse to the court.
§ General rule of nonreviewability is subject to exceptions:
· 1) Where the rules, regulations, or judgments of the association are in contravention to the laws of the land or in disregard of the charter or bylaws of the association, or
· 2) Where the association has failed to follow the basic rudiments of due process law
· Atlanta National League Baseball Club & Ted Turner v. Bowie Kuhn (1977) – Page 21
o F: Turner violated the anti-tampering rule that prevents you from negotiating with a player who is under contract with another baseball team. If someone is going to become a free agent, you have to wait until he is a free agent to negotiate. Turner violated the rule by saying that he would like to obtain Gary Matthews who was going to become a free agent and would take whatever it took to get him. Commissioner rules that Turner (the owner) is suspended from baseball for one year and took away a draft choice.
o H/R: Turner goes to court in Atlanta. Turner loses but he wins on one small point – you can’t take away the draft choice because that’s not listed anywhere as a sanction
§ If there is a list of punishments, it better be on the list
o Specific rules over general; you can’t amend the constitution because of best interest of baseball
· Cubs Realignment Case (1992) – Page 24
o F: MLB wants the Cubs to move following a National League realignment, but the Cubs don’t want to move because they want to keep their natural rivals. The commissioner orders them to move in the best interest of baseball
o H/R: Commissioner loses; there is the Major League agreement but there is also a National League agreement that said you can’t be moved from division to division without your permission. You can’t be moved over your objections. The court says the specific controls the general. The general is “best interests of baseball” but there is a more specific rule about realignment. If it’s a specific thing in another contract it’s outside the best interest of baseball clause
· Commissioner cannot interfere with a CBA
o If it involves the integrity of baseball, including the competitive balance of baseball but doesn’t go so far as forcing clubs to create a new CBA simply because it would enhance competitiveness in baseball
o The baseball contract says you can’t change the powers of a sitting commissioner
· Disciplinary Powers of the Commissioner Over Players
o Sixteen teams are bound by the MLB agreement; the players are only bound because their teams are bound
· Mediation vs. Arbitration
o Arbitration is binding; mediation is not
o Binding arbitration = arbitration
o Mediation is a chat to resolve the dispute and try and get the people on the same page; it’s a negotiation
o Binding arbitration means you are giving up your rights to go to court and have allowed a neutral to come up with a binding decision that you cannot challenge
o Courts don’t mess with binding arbitrations
C. Challenges To The Best Interests of the Sport – Page 30
· 1. Misconduct on the Field, Court, or Ice – Page 30
o Is It On Court or Off Court Conduct?
§ Off Court – goes to arbitration to review what the commissioner has decided
· Commissioner doesn’t have binding power
· Players want it to be off court so that it can be appealed
· Appealable if it has to do with the integrity of the game
· All off court conduct punishment is usually either integrity of the game or maintenance of public confidence
§ On Court – commissioner gets to decide; un-appealable
o Sprewell Case – Page 31
§ F: Sprewell (a player for the Golden State warriors) tried to choke his coach and threatening to kill him. He was suspended for a full year and his contract was canceled
§ H/R: Neutral arbitrator decided the suspension was too long and reduced the suspension to the rest of the year. The arbitrator also decided that the Warriors did not have the right under the CBA to terminate the player/s entire multi-year contract under the provision that prohibits “acts of moral turpitude” because that would subject him to double punishment by both the league and the team
o Ron Artest Debacle – Page 349
§ F: Ron Artest and teammates are heckled by fans, and a fist-fight ensues in the stands behind the Piston’s bench. The commissioner punishes the players for going into the stands and punching the fans. The CBA agreement expressly provided that the commissioner’s discipline for “on court” conduct is exclusive and cannot be appealed.
§ Artest asks for arbitration under the CBA
§ BUT they go to court
· If the player thinks the CBA gives him a right to arbitrate (“on the court”), or if management thinks they should arbitrate, then the case will end up being a fight about the venue/forum, not the result
· No one in the court said anything about who was right/wrong or what the proper punishment is
§ NBA revised CBA to set a minimum punishment for on the court conduct; if co
astic athletic programs – 84% of members are public schools. Brentwood was an athletic private school and football powerhouse. Their football coach was charged with violating several TSSAA rules in 1966 – one involved an invitation sent to 13 8th graders to come to a spring training practice; another involved giving students free tickets to games. After being found guilty, Brentwood was stripped of its state football championship, fined, and put on probation for three more years.
o PH: The district court found the TSSAA to be a state actor and that a ban on recruiting potential high school students on the basis of athletics violated the 1A à The Sixth Circuit reversed on the ground that TSSAA was just as much a private actor as the NCAA and thus not subject to constitutional restraints
o H/R: The SCOTUS held that the TSSAA was indeed a state actor because state employees promulgated the rules. It was a quasi state agency because “private association was entwined with state actors.” Tarkanian pointed out that the situation in that case would have been different if all of the members consisted of institutions entirely within one state.
· Cohen v. NCAA
o Pretty much says a coach suing doesn’t lose on MSJ because of Tark. NCAA needs to look more into the specific situation
C. Judicial Scrutiny of Institutional Decisions
· Bloom v. NCAA (2004) – Page 821
o F: The dispute concerns the eligibility of Jeremy Blom to play college football. Bloom was a world class skier had failed in his attempt to comply with NCAA rules that permit student-athletes to maintain their amateur eligibility in one sport while turning pro in another.
o H/R: We reject the NCAA’s argument that Bloom lacked standing to pursue claims for breach of contract or arbitrary and capricious action on the part of the NCAA; Bloom has standing but not a high enough chance of success to pursue the claim. The Court doesn’t think the NCAA’s interpretation is so out of bonds that they’ll second-guess it. The Court deferred to NCAA’s expertise unless it is totally unreasonable, which the court did not think it was in this case.
o You can’t play collegiate a sport you’ve played pro and taken money for, but you can play a different sport in college that you have never taken money for
· Oliver v. NCAA – Handout For Class 3
o Case involves the agent rule (if you hire an agent you’re a pro and you can’t go to college. NCAA says only pros need agents and if you hire an agent you must be a pro.)
§ Exception: family attorney or family counselor that you pay by the hour that tells you what to do. This person acts as an agent for other people, but not as an agent for you.
§ Family advisor sent a bill, not hourly, for $100,000
o If the agent is in the room talking to a team with the player, it’s a violation
o Oliver says he’s a 3P beneficiary, and the court agrees. The court says there’s a covenant of good faith and fair dealing and the agent rule is a crazy interpretation of amateurism or the application of the agent rule (advisor in the room = agent) is unreasonable. Either way, the judge says the NCAA is wrong. NCAA is regulating the practice of law in OK when they’re supposed to be running sports. Judge didn’t like this. The judge ruled essentially that the rule denying an athlete adequate representation is void because it is arbitrary and capricious, against the public policy of the State of Ohio and every other state in the country, and also a breach of the contract between the member schools establishing the NCAA
o Oliver ends up settling with the NCAA for $750,000
o H: NCAA can’t deny eligibility to players who seek legal help
