726 F.2d 1381 (9th Cir. 1984), 83-5938, Los Angeles Memorial Coliseum Com'n v. National Football League

Docket Nº:and 83-5938.
Citation:726 F.2d 1381
Party Name:LOS ANGELES MEMORIAL COLISEUM COMMISSION, Plaintiff-Appellee, v. NATIONAL FOOTBALL LEAGUE, an unincorporated association, et al., Defendants/Cross-Defendants-Appellants/Cross-Appellees, and NEW ENGLAND PATRIOTS FOOTBALL CLUB, INC., Highwood Service, Inc., Empire Sports, Inc., Houston Oilers, Inc., New York Jets Football Club, Inc., and Chargers Foo
Case Date:February 28, 1984
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 1381

726 F.2d 1381 (9th Cir. 1984)

LOS ANGELES MEMORIAL COLISEUM COMMISSION, Plaintiff-Appellee,

v.

NATIONAL FOOTBALL LEAGUE, an unincorporated association, et

al., Defendants/Cross-Defendants-Appellants/Cross-Appellees,

and

NEW ENGLAND PATRIOTS FOOTBALL CLUB, INC., Highwood Service,

Inc., Empire Sports, Inc., Houston Oilers, Inc., New York

Jets Football Club, Inc., and Chargers Football Company,

Kansas City Chiefs Football Club, Inc., and Miami Dolphins,

Ltd., Defendants/Cross-Defendants-Appellants,

and

Los Angeles Rams Football Co.,

Defendant/Cross-Defendant-Appellant/Cross-Appellee,

and

Oakland-Alameda County Coliseum, Inc.,

Intervenor/Defendant-Appellant/Cross-Appellee,

v.

OAKLAND RAIDERS, LTD., Cross-Claimant-Appellee/Cross-Appellant.

Nos. 82-5572 to 82-5574, 82-5664, 82-5665, 83-5714, 83-5732

and 83-5938.

United States Court of Appeals, Ninth Circuit

February 28, 1984

Argued and Submitted April 7, 1983.

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Maxwell M. Blecher, Howard F. Daniels, Blecher, Collins & Hoecker, Los Angeles, Cal., for L.A. Coliseum.

Joseph L. Alioto, Alioto & Alioto, Moses Lasky, Lasky, Haas, Cohler & Munter, San Francisco, Cal., for Oakland Raiders, Ltd.

Edwin A. Heafey, Crosby, Heafey, Roach & May, Timothy J. Murphy, Oakland, Cal., for Oakland-Alameda County Coliseum, Inc.

Paul J. Tagliabue, Covington & Burling, Daniel M. Gribbon, Washington, D.C., for NFL.

William Marshall Morgan, Morgan Wenzel & McNicholas, Los Angeles, Cal., for New England Patriots, et al.

Appeals from the United States District Court for the Central District of California.

Before ANDERSON and NELSON, Circuit Judges, and WILLIAMS, District Judge. [*]

J. BLAINE ANDERSON, Circuit Judge:

These appeals involve the hotly contested move by the Oakland Raiders, Ltd. professional football team from Oakland, California, to Los Angeles, California. We review only the liability portion of the bifurcated trial; the damage phase was concluded in May 1983 and is on a separate appeal. After a thorough review of the record and the law, we affirm.

I. FACTS

In 1978, the owner of the Los Angeles Rams, the late Carroll Rosenbloom, decided to locate his team in a new stadium, the "Big A," in Anaheim, California. That left the Los Angeles Coliseum without a major tenant. Officials of the Coliseum then began the search for a new National Football League occupant. They inquired of the League Commissioner, Pete Rozelle, whether an expansion franchise might be located there but were told that at the time it was not possible. They also negotiated with existing teams in the hope that one might leave its home and move to Los Angeles.

The L.A. Coliseum ran into a major obstacle in its attempts to convince a team to move. That obstacle was Rule 4.3 of Article IV of the NFL Constitution. In 1978, Rule 4.3 required unanimous approval of all the 28 teams of the League whenever a team (or in the parlance of the League, a "franchise") seeks to relocate in the home territory of another team. Home territory is defined in Rule 4.1 as

the city in which [a] club is located and for which it holds a franchise and plays its home games, and includes the surrounding territory to the extent of 75 miles in every direction from the exterior corporate limits of such city ....

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In this case, the L.A. Coliseum was still in the home territory of the rams.

The Coliseum viewed Rule 4.3 as an unlawful restraint of trade in violation of Sec. 1 of the Sherman Act, 15 U.S.C. Sec. 1, and brought this action in September of 1978. The district court concluded, however, that no present justiciable controversy existed because no NFL team had committed to moving to Los Angeles. 468 F.Supp. 154 (C.D.Cal.1979).

The NFL nevertheless saw the Coliseum's suit as a sufficient threat to warrant amending Rule 4.3. In late 1978, the Executive Committee of the NFL, which is comprised of a voting member of each of the 28 teams, met and changed the rule to require only three-quarters approval by the members of the League for a move into another team's home territory. 1

Soon thereafter, Al Davis, managing general partner of the Oakland Raiders franchise, stepped into view. His lease with the Oakland Coliseum had expired in 1978. He believed the facility needed substantial improvement and he was unable to persuade the Oakland officials to agree to his terms. He instead turned to the Los Angeles Coliseum.

Davis and the L.A. Coliseum officials began to discuss the possibility of relocating the Raiders to Los Angeles in 1979. In January, 1980, the L.A. Coliseum believed an agreement with Davis was imminent and reactivated its lawsuit against the NFL, seeking a preliminary injunction to enjoin the League from preventing the Raiders' move. The district court granted the injunction, 484 F.Supp. 1274 (1980), but this court reversed, finding that an adequate probability of irreparable injury had not been shown. 634 F.2d 1197 (1980).

On March 1, 1980, Al Davis and the Coliseum signed a "memorandum of agreement" outlining the terms of the Raiders' relocation in Los Angeles. At an NFL meeting on March 3, 1980, Davis announced his intentions. In response, the League brought a contract action in state court, obtaining an injunction preventing the move. In the meantime, the City of Oakland brought its much-publicized eminent domain action against the Raiders in its effort to keep the team in its original home. The NFL contract action was stayed pending the outcome of this litigation, but the eminent domain action is still being prosecuted in the California courts.

Over Davis' objection that Rule 4.3 is illegal under the antitrust laws, the NFL teams voted on March 10, 1980, 22-0 against the move, with five teams abstaining. That vote did not meet the new Rule 4.3's requirement of three-quarters approval.

The Los Angeles Memorial Coliseum Commission then renewed its action against the NFL and each member club. The Oakland-Alameda County Coliseum, Inc., was permitted to intervene. The Oakland Raiders cross-claimed against the NFL and is currently aligned as a party plaintiff.

The action was first tried in 1981, but resulted in a hung jury and mistrial. A second trial was conducted, with strict constraints on trial time. The court was asked to determine if the NFL was a "single business entity" and as such incapable of combining or conspiring in restraint of trade. Referring to the reasoning in its opinion written for the first trial, 519 F.Supp. 581, 585 (1981), the court concluded the League was not a "single entity." Vol. 12 Clerk's Record # 931.

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The district court denied the NFL's motions for change of venue, but did employ a detailed voir dire of the jury pool and of the jurors eventually empaneled. The trial was bifurcated so the jury could first determine liability. In the liability portion, counsel were limited to 40 hours of trial time per side in an effort to narrow the matters presented.

The trial was conducted and witnesses called, including owners of various NFL member teams and the League Commissioner, Pete Rozelle. The jury was instructed on the antitrust liability issues and sent out May 6, 1982. On May 7, 1982, the jury returned a verdict in favor of the Los Angeles Memorial Coliseum Commission and the Oakland Raiders on the antitrust claim and for the Raiders on their claim of breach of the implied promise of good faith and fair dealing. The court then continued the case to September 20, 1982, to begin the damages trial.

On June 14, 1982, the court issued its judgment on the liability issues, permanently enjoining the NFL and its member clubs from interfering with the transfer of the Oakland Raiders' NFL franchise from the Oakland Coliseum to the Los Angeles Memorial Coliseum. The court determined, in addition, that there was "no just reason for delay in entering this final judgment on plaintiff's and cross-claimant's claim for declaratory and equitable relief, and ... expressly direct[ed] this final judgment be entered." Vol. 16 Clerk's Record # 2090. The NFL and its original clubs immediately appealed the permanent injunction (No. 82-5572); the original clubs of the American Football League also appealed (No. 82-5573), as did the Los Angeles Rams Football Co. (No. 82-5574) and the Oakland-Alameda County Coliseum (No. 82-5664). The Oakland Raiders cross-appealed challenging six orders entered by the court in 1981 and 1982 (Nos. 82-5665 and 83-5398). The NFL and Oakland Coliseum have also appealed the failure of the district court to grant their post-trial motions. (Nos. 83-5714 and 83-5732).

The damages trial was completed in May 1983 with the jury returning a verdict awarding the Raiders $11.55 million and the Los Angeles Coliseum $4.86 million. These awards were trebled by the district court pursuant to 15 U.S.C. Sec. 15. The NFL and the other defendants have appealed. (Nos. 83-5907, 83-5908 and 83-5909). This panel will hear and decide the damage appeals. But, because these appeals were expedited, the damage appeals will be decided in a later opinion after briefing, possible argument, and submission. 2

II. SHERMAN ACT Sec. 1

The jury found that Rule 4.3 violates Sec. 1 of the Sherman Act, 15 U.S.C. Sec. 1. Section 1 literally prohibits every agreement, conspiracy, or other concerted activity in restraint of trade. Since Congress could not have intended that courts invalidate "every" such agreement, see United States v. Joint Traffic Assn., 171 U.S. 505, 19 S.Ct. 25, 43 L.Ed. 259 (1898), most restraints are analyzed under the so-called "rule of reason." Standard...

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