AMERICAN BASKET. ASS'N PA v. NATIONAL BASKET. ASS'N

• Decision Date: 19 December 1975
• Docket Number: No. 75 Civ. 6184.,75 Civ. 6184.
• Citation: 404 F. Supp. 832
• Parties: AMERICAN BASKETBALL ASSOCIATION PLAYERS ASSOCIATION, an unincorporated association, by James Eakins its President on its behalf, et al., Plaintiffs, v. NATIONAL BASKETBALL ASSOCIATION, a joint venture, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

404 F. Supp. 832

AMERICAN BASKETBALL ASSOCIATION PLAYERS ASSOCIATION, an unincorporated association, by James Eakins its President on its behalf, et al., Plaintiffs, v. NATIONAL BASKETBALL ASSOCIATION, a joint venture, et al., Defendants.

No. 75 Civ. 6184.

United States District Court, S. D. New York.

December 19, 1975.

Lovejoy, Wasson, Lundgren & Ashton by Edwin E. McAmis, Daniel J. Sullivan, Douglas Foster, New York City, Smith, Cohen, Ringel, Kohler & Martin by Prentice Q. Yancy, Jr., Atlanta, Ga., for plaintiffs.

Proskauer, Rose, Goetz & Mendelsohn by David J. Stern, Jeffrey A. Mishkin, New York City, for defendants NBA and NBA Teams.

Spengler, Carlson, Gubar & Churchill by Robert S. Carlson, New York City, for defendants Long Island Sports Enterprises, Inc. and Denver Nuggets Basketball, Ltd.

Paul, Weiss, Rifkind, Wharton & Garrison by George P. Felleman, New York City, for defendants Madison Square Garden Corp. and Madison Square Garden Center, Inc.

OPINION

ROBERT L. CARTER, District Judge.

In September, 1974, plaintiff, the American Basketball Association Players Association (ABA Players Ass'n), filed a motion to intervene in Robertson v. National Basketball Association (70 Civ. 1526), pending before this court. For procedural and technical reasons, permission was granted to ABA Players Ass'n to withdraw their motion and to refile the same by September 20, 1974. Plaintiff decided not to renew the motion. On November 24, 1975, plaintiff by Order to Show Cause again sought to intervene in the Robertson case. The motion was denied on December 5, 1975, specifically because of its untimeliness and the possibility of prejudice to the existing parties in Robertson.

Thereafter on December 8, 1975, plantiff ABA Players Ass'n, along with three individual players, for themselves and others similarly situated, instituted this proceeding as an independent and separate action. The complaint substantially tracks the allegations set forth in the proposed intervenor complaint in Robertson. The National Basketball Association (NBA) is charged with effectuating an unlawful conspiracy and combination to violate Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2. The major thrust of the complaint is that the NBA is seeking a monopoly of professional basketball by eliminating the American Basketball Association (ABA) as a viable and effective rival in the field.

Plaintiffs now move for a preliminary injunction to bar the NBA from holding a special draft of Moses Malone, Shep Wise, Mel Bennett, Mark Olberding and Charles Jordan who are currently players in the ABA.

A hearing was held on December 8, 1975, to determine whether this action is related to the Robertson case and ought properly to be assigned to me pursuant to Rule 13 of the Calendar Rules of this court. The parties and the court agreed that this action is related to Robertson and should be assigned to me.

At the December 8th hearing, at the court's request, the NBA agreed to postpone the special draft then scheduled for December 9th, pending determination of this motion for preliminary injunction. The NBA also agreed to file its answering papers by December 11th, and the court advised the parties that if either side desired an evidentiary hearing, December 12th, 23rd, and 24th were available. The plaintiff was given until December 9th to file its memorandum of law in support of its motion for preliminary relief. The NBA advised the parties and the court on or about December 10th that it wished an evidentiary hearing and would be prepared to proceed on December 12th. Plaintiff did not seek a later date.

The evidentiary hearing disclosed that Lawrence O'Brien, Commissioner of the NBA, and Simon P. Gourdine, Deputy Commissioner, in October or November, 1975, aware that some of the ABA clubs were going out of business, discussed the possibility that some of the players under contract to an ABA club might desire to negotiate with an NBA club. O'Brien and Gourdine canvassed the roster of ABA players and determined that, for NBA purposes, the ABA players fell into three categories: (1) those with whom an NBA club already held NBA rights to negotiate pursuant to an NBA annual player draft; (2) those eligible for NBA draft but not drafted by any NBA club; and (3) those who had not been eligible for NBA draft at its last annual draft, but had since become eligible. Those in the first category interested in playing in the NBA would be required to negotiate with the NBA club holding their draft rights. Those in the second category would be free to negotiate with any NBA club they wished and vice versa. Those in the third category were the five players who are the subject of the instant motion. As to those players it was determined that a special draft would be held. A telegram setting forth the above was sent out to NBA owners on or about November 18th. In early December, Malone's attorney advised the NBA Commissioner that Malone was free to negotiate with an NBA club or clubs and inquired with what club or clubs Malone could negotiate.

O'Brien and Gourdine decided that if no procedure was available for Malone to negotiate with NBA clubs when he wanted to, then the NBA might be violating this court's injunction which bars the NBA from refusing to negotiate with players from the rival league. They decided that it was necessary that the special draft for the NBA rights to the five players be set for an early date. December 9th was the date chosen and on December 4th they notified the owners to that effect. The NBA also issued a public statement which was widely disseminated announcing the special draft.

Two other witnesses testified at the December 12th hearing: George Carter, a former professional basketball player with the NBA and more recently with the ABA; and Donald Schupak, limited partner and general counsel of the Spirits of St. Louis, an ABA team. The testimony of both witnesses apparently was intended to show the harmful effect on the ABA holding the special draft would have at this time, but neither witness was in a position of special knowledge, experience or exposure to give informed testimony. No evidentiary...