American Football League v. National Football League

• Decision Date: 23 September 1963
• Docket Number: No. 8780.,8780.
• Citation: 323 F.2d 124
• Parties: AMERICAN FOOTBALL LEAGUE et al., Appellants, v. NATIONAL FOOTBALL LEAGUE et al., Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

323 F.2d 124 (1963)

AMERICAN FOOTBALL LEAGUE et al., Appellants, v. NATIONAL FOOTBALL LEAGUE et al., Appellees.

No. 8780.

United States Court of Appeals Fourth Circuit.

Argued January 22, 1963.

Decided September 23, 1963.

Warren E. Baker, Washington, D. C. (Chadbourne, Parke, Whiteside & Wolff; David A. Peters, Washington, D. C., Thomas F. O'Toole, New York City, and Albert L. Ledgard, Jr., Washington, D. C., on brief), for appellants.

Gerhard A. Gesell, Washington, D. C. (Hamilton Carothers, Charles W. Havens, III, Washington, D. C., Covington & Burling, Washington, D. C., William D. Macmillan, and Semmes, Bowen & Semmes, Baltimore, Md., on brief), for appellees.

Before HAYNSWORTH, BOREMAN and BRYAN, Circuit Judges.

HAYNSWORTH, Circuit Judge.

The American Football League and owners of its franchises are contending against the National Football League and the owners of its franchises for victory in the courts. The American Football League and the owners of its franchises lost in the Court below, when the District Court held that there had been no violation of Sections 1, 2 or 3 of the Sherman Act¹ by the National Football League and the owners of its franchises. We affirm.

The District Court wrote a full and comprehensive opinion, in which the facts are set forth in some detail.² The facts need be stated only in summary fashion here, for the reader who desires more detailed information can find it in the District Court's opinion.

The two football leagues, American and National, are unincorporated associations. Each has a commissioner who exercises some executive and administrative authority, but, in each, ultimate control is vested in the owners of the football teams for whose benefit the league exists. In each instance, the team owners are corporations, each of which was the holder of a franchise to operate a professional football team in a designated city. Most of the corporate team owners are controlled and dominated by a single individual, though in a minority of instances the role of the dominant individual is played by a small group of two or three, and in one instance of five. It is these individuals who exercise ultimate control of the leagues with which they are associated.

The National Football League was organized in 1920. For a number of years its existence was precarious. Until the last ten years, its membership was far from static, and until 1946 every major league professional football team operating in the United States was associated with it. In 1945, the All American Football Conference was organized, and it operated through the four seasons of 1946-1949 with eight teams, except that two of the teams were merged in 1949, and in the last season, there were but seven teams. Thereafter the All American Football Conference disbanded, but three of its teams were received into the National Football League, and teams franchised in those three cities, Baltimore, Cleveland and San Francisco, were operated under National League franchises when this action was commenced.³

In 1959, the National Football League operated with twelve teams located in eleven cities. There were two teams in Chicago and one each in Cleveland, New York, Philadelphia, Pittsburgh, Washington, Baltimore, Detroit, Los Angeles, San Francisco, and Green Bay, Wisconsin. In 1960, two additional franchises were placed, one in Dallas and one in Minneapolis-St. Paul, the Dallas team beginning play in 1960 and the Minneapolis-St. Paul team in 1961. In 1961, one of the Chicago teams, the Cardinals, was transferred to St. Louis.

The American Football League was organized in 1959, and began with a full schedule of games in 1960. Affiliated with it were eight teams located in eight cities, Boston, Buffalo, Houston, New York, Dallas, Denver, Los Angeles and Oakland. After the 1960 season, the Los Angeles team was moved to San Diego.

In the first half of the 1952 season, a team operated under a National League franchise in Dallas. It failed and was replaced by a team located in another city, but a few years later there was substantial interest in Texas as a fruitful area for professional football.

Many of the National League owners were interested in expanding the league. Halas, owner⁴ of the Chicago Bears, was the earliest and most ardent advocate of expansion. Early in 1956, he predicted that National would expand from twelve to sixteen teams during the period of 1960-1965. In July 1957, Bert Bell, National's Commissioner, predicted some expansion by 1960, and at National's annual meeting in January 1958, an expansion committee was appointed composed of Halas and Rooney, owner of the Pittsburgh Steelers. Marshall, of the Washington Redskins, was an implacable foe of expansion, but the District Court found, with reason, that by 1959 a majority of the owners were in favor of expansion to sixteen teams and the granting of four additional franchises, two at a time.

As the National League contemplated expansion, the interest of the owners centered on Houston, Dallas, and two or three other cities. The weather in the Southwest was particularly favorable, and, with the improvement of the financial condition of the National League teams and the increasing revenues they received from television, it was thought that Houston and Dallas, with their natural rivalry, could each support a team. Those two cities were considered by National's owners as the most likely prospects for expansion, with Minneapolis-St. Paul, Buffalo and Miami close behind.

Meanwhile, there were people actively interested in acquiring franchises to operate National League teams in Houston and Dallas. Clint Murchison, Jr. and his father, of Dallas, had sought to purchase the San Francisco 49'ers, the Washington Redskins and the Chicago Cardinals, intending, if successful in acquiring one of those teams, to move it to Dallas. In 1957 and 1958, Lamar Hunt, of Dallas, and the Houston Sports Association applied to National for franchises to operate teams in those two cities. Hunt also sought to acquire the Chicago Cardinals and move that team to Dallas. Early in 1959, Murchison and Hunt (Dallas) and Cullinan, Kirksey and Adams (Houston Sports Association) were all actively seeking National League franchises. They were given encouragement by Bell, Halas and Rooney, all of whom were talking in terms of expansion into Houston and Dallas about 1961.

In February and April 1959, Halas held press conferences to stimulate sales of tickets to a preseason game between the Chicago Bears and the Pittsburgh Steelers, scheduled to be played in Houston in August. In those press conferences, he discussed expansion plans, predicting that expansion would begin about 1960, and that the most likely cities were Houston, Dallas, Miami and Buffalo. Upon inquiry by Murchison, Halas suggested that he plan to make a formal application for a Dallas franchise to be considered at National's annual meeting in January 1960.

Meanwhile, in the spring of 1959, Hunt, of Dallas, decided that a new league was feasible and could be successfully organized. He had been told by Bell that he might submit a formal application for the Dallas franchise at the January 1960 annual meeting. However, he was either unsure of National's expansion into Dallas, of when it would occur, or of his chances of obtaining the franchise in competition with Murchison.⁵

The remainder of 1959 was very eventful. Hunt proceeded actively with his plan to organize a new league. In July, he disclosed his intention to Commissioner Bell. On July 28, Bell, with Hunt's permission, told a congressional committee of Hunt's plans, and stated that the National League owners favored organization of the new league. Early in August, Hunt and Adams publicly announced the formation of the new league, with teams owned by them to be located, respectively, in Dallas and Houston. Hunt and his associates were actively in touch with interested persons in a number of other cities. On August 22, representatives from Los Angeles, Dallas, Houston, New York, Minneapolis and Denver signed articles of association. Representatives from many other cities had been in touch with Hunt. Wilson, of Detroit, sought an American franchise for Miami, and later for Buffalo, and the Buffalo franchise was formally granted in October. In November, an application for a franchise to be placed in Boston was approved. Thus, in late November, American had tentative arrangements for teams in Houston, Dallas, Minneapolis, New York, Boston, Denver, Buffalo and Los Angeles.

In the meanwhile, Murchison, of Dallas, and Cullinan and Kirksey, who had been associated with Adams in efforts to obtain a National franchise for Houston, continued their efforts to obtain National franchises for those two cities. In late August, at their insistence, Halas, with the approval of a number of National owners, publicly announced that National's expansion committee would recommend to the 1960 meeting franchises for Dallas and Houston to begin play in 1961, the Houston franchise to be conditioned upon the availability of an adequate stadium. Construction of a new stadium in Houston was in contemplation, and there was hope that a National League team might obtain use of the Rice University Stadium until a new municipal stadium was constructed and available. Just after the death of Commissioner Bell on October 11, 1959, the National League owners met informally and agreed to adopt the announced recommendation of the expansion committee. This was followed by a widely publicized press release announcing that the National League would grant two new franchises in 1960, one of them to go to Dallas and the other to Houston if an adequate stadium was made available in Houston.

In October, however, it became known that the Rice University Stadium would not be made available for use by a National League team, and all further consideration of a National League franchise in Houston was then abandoned.

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