358 U.S. 242 (1959), 18, International Boxing Club of New York, Inc. v. United States

Docket Nº:No. 18
Citation:358 U.S. 242, 79 S.Ct. 245, 3 L.Ed.2d 270
Party Name:International Boxing Club of New York, Inc. v. United States
Case Date:January 12, 1959
Court:United States Supreme Court
 
FREE EXCERPT

Page 242

358 U.S. 242 (1959)

79 S.Ct. 245, 3 L.Ed.2d 270

International Boxing Club of New York, Inc.

v.

United States

No. 18

United States Supreme Court

Jan. 12, 1959

Argued November 13, 1958

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF NEW YORK

Syllabus

1. The Government's civil complaint charging appellants with a combination and conspiracy in unreasonable restraint of trade and commerce among the States in the promotion, broadcasting, and televising of professional world championship boxing contests, as well as a conspiracy to monopolize and monopolization of the same, in violation of § 1 and 2 of the Sherman Act, was sustained by this Court as stating a cause of action, and the case was remanded for trial on the merits. 348 U.S. 236. After a trial, the District Court, in an opinion incorporating detailed findings of fact and conclusions of law based on the principles laid down by this Court, found that the allegations of the complaint had been sustained, and adjudged that appellants had violated §§ 1 and 2 of the Sherman Act.

Held: the District Court's findings are not clearly erroneous, and its judgment on the merits is affirmed. Pp. 244-252.

(a) The District Court's finding that the relevant market was the promotion of championship boxing contests, in contrast to all professional boxing contests, was not clearly erroneous, and it is sustained. Pp. 249-252.

2. After further hearings on the nature and extent of the relief necessary to protect the public interest, the District Court entered a final judgment dissolving the two international boxing clubs, directing the individual appellants to divest themselves of their stock in Madison Square Garden, and granting injunctive relief designed to open up the market in the business of promoting professional world championship boxing matches.

Held: the relief granted was not beyond the allowable discretion of the District Court, and its judgment is affirmed. Pp. 253-263.

(a) At the time of the final decree, the Joe Louis agreements had lapsed; the exclusive contract practice had been abandoned at least temporarily; the leases on Yankee Stadium, the Polo Grounds, and St. Nicholas Arena in New York had been given up; and the appellants had no control over the new heavyweight champion;

Page 243

but this Court agrees with the District Court that the additional evidence taken by it showed that appellants still possessed all of the power of monopoly and restraint. Pp. 254-255.

(b) Even if the individual appellants' stock in Madison Square Garden was lawfully acquired and was not the fruit of the conspiracy, it had been utilized to effect the purposes of the conspiracy, and could be so used again, and the record supports the District Court's conclusion that they should be required to divest themselves of this stock in order to break up the unlawful combination and restore competition in championship boxing contests -- without being granted the alternative options requested by them. Pp. 255-259.

(c) Since the two international boxing clubs were formed pursuant to the conspiracy, and were the means used to effectuate it, the requirement that they be dissolved was justified. Pp. 259-261.

(d) The District Court having found that one of the means used in effectuating the conspiracy was the ownership and control of arenas and stadia, the requirement of the decree that Madison Square Carden and the Chicago Stadium be rented to any qualified promoter at a reasonable rental, subject to specified conditions, was justified. Pp. 261-262.

(e) Practical considerations justify the prohibition against exclusive contracts with contestants, even though they apply not only to championship bouts, but to all professional boxing contests, thus going beyond the "relevant market" considered for the purposes of determining the Sherman Act violations. P. 262.

150 F.Supp. 397, affirmed.

Page 244

CLARK, J., lead opinion

MR. JUSTICE CLARK delivered the opinion of the Court.

This civil Sherman Act1 case was here four years ago on direct appeal from a dismissal by the District Court, which had held that the Act did not apply to the business of professional boxing. We reversed, finding that

the complaint states a cause of action [under the Act], and that the Government is entitled to an opportunity to prove its allegations,

and remanded the case for trial on the merits. United States v. International Boxing Club, 348 U.S. 236 (1955). The complaint charged the appellants with a combination and conspiracy in unreasonable restraint of trade and commerce among the States in the promotion, broadcasting, and televising of professional world championship boxing contests, as well as a conspiracy to monopolize and monopolization of the same. After a trial, the District Court, in an opinion incorporating detailed findings of fact and conclusions of law based on the principles laid down in our earlier opinion, found that the allegations of the complaint had been sustained. 150 F.Supp. 397. After further hearings on the nature and extent of the relief necessary to protect the public interest, the court entered its final judgment dissolving two of the corporate appellants, directing divestiture of certain stock owned by the individual appellants, and granting injunctive relief designed to open up the market in the business of promoting professional world championship boxing matches. 171 F.Supp. 841.

The appellants, while not attacking any specific finding as clearly erroneous, claim that the proof did not show that they violated Section 1 or 2 of the Act. In this regard, appellants level their strongest blows at the District Court's definition of the relevant market. Out of the entire field of professional boxing, the District Court carved a market in championship contests alone, holding

Page 245

it to be the relevant market at which the conspiracy was aimed. In the alternative, appellants insist that the relief granted the Government was "unnecessarily punitive," even if liability is assumed. On a direct appeal to this Court, we noted probable jurisdiction, 356 U.S. 910 (1958). We have concluded that the findings of the District Court are not clearly erroneous, and that, in view of our former holding on the sufficiency of the complaint, the judgment on the merits was properly entered. As to the relief granted, we find that the court did not exceed the limits of allowable discretion in framing a decree "that will, so far as practicable, cure the ill effects of the illegal conduct, and assure the public freedom from its continuance." United States v. United States Gypsum Co., 340 U.S. 76, 88 (1950).

Our previous decision herein having decided that the promotion of professional [79 S.Ct. 248] championship boxing contests on an interstate basis constituted trade and commerce among the States, within the meaning of the Sherman Act, there is no contest here either on the findings or the law on that point. Since, on that appeal, we discussed in some detail the allegations of the complaint, which the trial court has now found amply proven by the evidence, we shall only summarize the findings here.

THE FINDINGS

The conspiracy began in January, 1949, when appellants Norris and Wirtz, who owned and controlled the Chicago Stadium, the Detroit Olympia Arena, and the St. Louis Arena, made an agreement with Joe Louis, the then heavyweight boxing champion of the world. Wishing to retire, Louis agreed to give up his title after obtaining from each of the four leading contenders2 exclusive promotion rights including rights to radio, television, and

Page 246

movie revenues. Upon securing these exclusive contracts, Louis assigned them to the appellant International Boxing Club, Illinois, which was organized by Norris and Wirtz for the purpose of promoting boxing for the combination in Illinois. They paid Louis $150,000 cash plus an employment contract and a 20% stock interest in I.B.C., Illinois.

In March, 1949, Norris and Wirtz approached appellant Madison Square Garden, in which they had for many years owned 50,000 shares of stock. It was the "foremost sports arena in New York City, and is the best known arena of its kind in the United States, if not the world."3 However, its facilities were tied up by an exclusive lease it had granted to Mike Jacobs' interests -- the leading professional boxing promoter in the field at that time. Norris and Wirtz proposed that they should all "work together now and keep the events for our buildings, and not create a competitive situation that would be harmful to all." In order to effectuate this program, appellant Madison Square Garden bought out Mike Jacobs' interest, including, in addition to his lease on Madison Square Garden, his exclusive leases to Yankee Stadium and the St. Nicholas Arena and his contract with the then welterweight champion Sugar Ray Robinson. These contracts were assigned to International Boxing Club, New York, organized for the purpose of promoting boxing for the combination in New York.

Once Jacobs' interests had been acquired, there remained only one substantial competitor in the field of

Page 247

promoting championship boxing matches. That was Tournament of Champions, Inc., owned in part by the Columbia Broadcasting System. It owned an exclusive lease on the Polo Grounds, as well as an exclusive promotion contract covering the next two fights of the then middleweight champion of the world. In May, 1949, Madison Square Garden bought all of the stock of Tournament of Champions at a cost of $100,000 plus 25% of the net profits on the next two middleweight championship matches. The assets thus acquired were likewise assigned to I.B.C., New York. By a simultaneous separate agreement...

To continue reading

FREE SIGN UP