Los Angeles Memorial Coliseum Com'n v. National Football League

• Citation: 791 F.2d 1356
• Decision Date: 16 June 1986
• Docket Number: Nos. 83-5907,s. 83-5907
• Parties: , 1986-1 Trade Cases 67,140 LOS ANGELES MEMORIAL COLISEUM COMMISSION, Plaintiff-Appellee, v. NATIONAL FOOTBALL LEAGUE, an unincorporated association, Baltimore Football Club, Inc. (Baltimore Colts), Buffalo Bills, Inc., Chargers Football Co. (San Diego Chargers), Chicago Bears Football Club, Inc., Cincinnati Bengals, Inc., Cleveland Browns, Inc., Dallas Cowboys Football Club, Inc., Detroit Lions, Inc., Five Smiths, Inc. (Atlanta Falcons), Green Bay Packers, Inc., Houston Oilers, Inc., Kansas City Chiefs Football Club, Inc., Los Angeles Rams Football Co., Miami Dolphins, Ltd., Minnesota Vikings Football Club, Inc., New England Patriots Football Club, Inc., New Orleans Saints Louisiana Partnership, New York Football Giants, New York Jets Football Club, Inc., Philadelphia Eagles Football Club, Inc., Pittsburgh Steelers Sports, Inc., Pro-Football, Inc. (Washington Redskins), EFK Sports, Ltd., sued herein as Rocky Mountain Empire Sports, Inc. (Denver Broncos), St. Louis Football Cardinals Co., San Francisco Forty-Niners, Seattle Professional Football (Seattle Seahawks), and Tampa Bay Area NFL Football, Inc. (Tampa Bay Buccaneers), Defendants-Appellants. OAKLAND RAIDERS, LTD., Cross Claimant-Appellee, v. NATIONAL FOOTBALL LEAGUE, an unincorporated association, et al., Cross Defendants-Appellants. to 83-5909.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 1356

791 F.2d 1356 55 USLW 2037, 1986-1 Trade Cases 67,140 LOS ANGELES MEMORIAL COLISEUM COMMISSION, Plaintiff-Appellee,
v.
NATIONAL FOOTBALL LEAGUE, an unincorporated association,
Baltimore Football Club, Inc. (Baltimore Colts), Buffalo
Bills, Inc., Chargers Football Co. (San Diego Chargers),
Chicago Bears Football Club, Inc., Cincinnati Bengals, Inc.,
Cleveland Browns, Inc., Dallas Cowboys Football Club, Inc.,
Detroit Lions, Inc., Five Smiths, Inc. (Atlanta Falcons),
Green Bay Packers, Inc., Houston Oilers, Inc., Kansas City
Chiefs Football Club, Inc., Los Angeles Rams Football Co.,
Miami Dolphins, Ltd., Minnesota Vikings Football Club, Inc.,
New England Patriots Football Club, Inc., New Orleans Saints
Louisiana Partnership, New York Football Giants, New York
Jets Football Club, Inc., Philadelphia Eagles Football Club,
Inc., Pittsburgh Steelers Sports, Inc., Pro-Football, Inc.
(Washington Redskins), EFK Sports, Ltd., sued herein as
Rocky Mountain Empire Sports, Inc. (Denver Broncos), St.
Louis Football Cardinals Co., San Francisco Forty-Niners,
Seattle Professional Football (Seattle Seahawks), and Tampa
Bay Area NFL Football, Inc. (Tampa Bay Buccaneers),
Defendants-Appellants.
OAKLAND RAIDERS, LTD., Cross Claimant-Appellee,
v.
NATIONAL FOOTBALL LEAGUE, an unincorporated association, et
al., Cross Defendants-Appellants. Nos. 83-5907 to 83-5909. United States Court of Appeals,
Ninth Circuit. Argued Oct. 5, 1984.
Submitted Nov. 8, 1984.
Decided June 16, 1986.

Page 1359

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

Joseph L. Alioto, Joseph M. Alioto, Daniel J. Mulligan, Alioto & Alioto, Moses Lasky, Lasky, Haas, Cohler & Munter, San Francisco, Cal., for L.A. Raiders.

Patrick Lynch, O'Melveny & Myers, Los Angeles, Cal., James W. Cotchett, Jr., Cotchett, Dyer & Illston, San Mateo, Cal., Daniel Gribbon, Paul J. Tagliabue, Covington & Burling, Washington, D.C., Wm. Marshall Morgan, Morgan, Wenzel & McNicholas, Los Angeles, Cal., for National Football League.

Donald G. Kempf, Jr., Michael P. Foradas, Kirkland & Ellis, Chicago, Ill., for Chicago Bears.

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

Before ANDERSON and NELSON, Circuit Judges, and S. WILLIAMS, District Judge. ^*

NELSON, Circuit Judge:

We now face the second and concluding set of appeals from the district court litigation concerning the move by the Oakland Raiders professional football team (the "Raiders") from Oakland, California to Los Angeles, California. In our earlier opinion, Los Angeles Memorial Coliseum Commission v. National Football League, 726 F.2d 1381 (9th Cir.), cert. denied, --- U.S. ----, 105 S.Ct. 397, 83 L.Ed.2d 331 (1984) ("Raiders I "), we affirmed the judgment of antitrust liability against the National Football League and its member clubs ("NFL," the "League"). Here, we (1) affirm the trebled damage jury verdict in favor of the Coliseum; (2) vacate the Raiders' antitrust damage recovery, and remand for further proceedings; and (3) reverse the judgment of liability and damages on the claim for breach of the implied promise of good faith and fair dealing.

FACTUAL AND PROCEDURAL BACKGROUND

The underlying facts which precipitated this litigation are summarized in our earlier opinion. 726 F.2d at 1384-86.

After an initial hung jury and mistrial, the trial in this case was bifurcated. In the first portion, the jury, in separate verdicts in May 1982, found the NFL and its member clubs liable to the Los Angeles Memorial Coliseum Commission (the "Coliseum") and the Raiders for antitrust violations of section 1 of the Sherman Act, 15 U.S.C. Sec. 1, and to the Raiders for breach of the covenant of good faith and fair dealing implied under California law into the NFL Constitution and By-Laws (the "contract"), to which all NFL clubs are parties.

An injunction was issued in June 1982 by the district court in accordance with the antitrust liability judgment and section 16 of the Clayton Act, 15 U.S.C. Sec. 26. This order, along with the underlying antitrust liability issues, was immediately appealed to this panel as an interlocutory order, pursuant to 28 U.S.C. Sec. 1292(a)(1).

The damages portion of the trial commenced in September 1982. At the trial's conclusion in May 1983, the jury awarded damages on both claims, as follows: for the Coliseum, antitrust damages of $4,860,081, trebled by the district court pursuant to 15 U.S.C. Sec. 15 to $14,580,243; for the Raiders, antitrust damages of $11,554,382, trebled to $34,663,146, plus contract damages stipulated by the parties to equal in amount the untrebled antitrust damages, $11,554,382.

Judgment on the contract liability, which had not been entered after the liability portion of the trial, was entered after the damages phase. At that time it merged into the final judgment, which is being appealed here. See Munoz v. Small Business Administration, 644 F.2d 1361, 1364 (9th Cir.1981) ("[A]n appeal from the final

Page 1360

judgment draws in question all earlier non-final orders and all rulings which produced the judgment."). Hence, we now review the judgment of contract liability on the implied promise of good faith and fair dealing, as well as both the antitrust and contract damages.

Following our Raiders I decision in February 1984 affirming the district court judgment of antitrust liability, appellants filed a petition for certiorari with the Supreme Court. We then proceeded with the briefing and oral argument for this second set of appeals, but withdrew the case from submission pending the Supreme Court's response. On November 8, 1984, the case was resubmitted, after the Court's denial of the petition.

STANDARDS OF REVIEW

The district court denied the NFL's motions for directed verdict and for judgment notwithstanding the verdict on various issues and sub-issues now before us. We apply the same standard of review to each of these two types of ruling, and our inquiry is identical to that of the district court: viewing the evidence as a whole and in the light most favorable to the nonmoving party (the Raiders, the Coliseum), does substantial evidence support the jury's verdict or, on the contrary, is the only reasonable conclusion that can be drawn from the evidence that the moving party (the NFL) is entitled to judgment as a matter of law? E.g., Garter-Bare Co. v. Munsingwear Inc., 723 F.2d 707, 709 (9th Cir.), cert. denied, --- U.S. ----, 105 S.Ct. 381, 83 L.Ed.2d 316 (1984); William Inglis & Sons Baking Co. v. ITT Continental Baking Co., 668 F.2d 1014, 1026 (9th Cir.1981), cert. denied, 459 U.S. 825, 103 S.Ct. 57, 74 L.Ed.2d 61 (1982); California Computer Products v. IBM, 613 F.2d 727, 732-34 (9th Cir.1979). We may not weigh the evidence and impose a result we find to be preferable as long as the jury's verdict is supported by substantial evidence. William Inglis & Sons, 668 F.2d at 1026.

We review de novo, however, questions of law, e.g., United States v. McConney, 728 F.2d 1195, 1201 (9th Cir.) (en banc), cert. denied, --- U.S. ----, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984), as well as the district court's determination and application of state law. E.g., Fiorito Bros. v. Fruehauf Corp., 747 F.2d 1309, 1312 (9th Cir.1984).

In reviewing jury instructions to which timely objections were made, we ask

whether, viewing the jury instructions as a whole, the trial judge gave adequate instructions on each element of the case to insure that the jury fully understood the issues. [Citations.] A court is not required to ... amplify an instruction if the instructions as given allowed the jury to determine intelligently the issues presented.

Raiders I, 726 F.2d at 1398. "A trial judge is given substantial latitude in tailoring the instructions so long as they fairly and adequately cover the issues presented" when "evaluated in the context of the whole trial." United States v. Marabelles, 724 F.2d 1374, 1382-83 (9th Cir.1984). A party is not entitled to an instruction on its theory of the case if that theory lacks support either in law or in the record. E.g., Raiders I, 726 F.2d at 1398; United States v. Candelaria, 704 F.2d 1129, 1132 (9th Cir.1983).

In reviewing a jury's damages award, we must uphold the jury's "finding of the amount of damages unless the amount is 'grossly excessive or monstrous,' clearly not supported by the evidence, or 'only based on speculation or guesswork.' " Handgards, Inc. v. Ethicon, Inc., 743 F.2d 1282, 1297 (9th Cir.1984) (quoting Blanton v. Mobil Oil Corp., 721 F.2d 1207, 1216 (9th Cir.1983), cert. denied, --- U.S. ----, 105 S.Ct. 1874, 85 L.Ed.2d 166 (1985)), cert. denied, --- U.S. ----, 105 S.Ct. 963, 83 L.Ed.2d 968 (1985). In antitrust cases, a lesser level of proof is needed to support the amount of damages than to support the fact of antitrust injury; in applying this "liberal proof of damages standard," we have required only that the plaintiff provide sufficient evidence to permit a "just and reasonable estimate of the damages." Id.; see generally J. Truett Payne Co. v.

Page 1361

Chrysler Motors Corp., 451 U.S. 557, 565-68 & n. 5, 101 S.Ct. 1923, 1929-30 & n. 5, 68 L.Ed.2d 442 (1981). DISCUSSION

I. IMPLIED PROMISE OF GOOD FAITH AND FAIR DEALING (RAIDERS)

As recently reiterated by the California Supreme Court, "[i]t is well settled that, in California, the law implies in every contract a covenant of good faith and fair dealing." Seaman's Direct Buying Service v. Standard Oil Co. of California, 36 Cal.3d 752, 768, 686 P.2d 1158, 1166, 206 Cal.Rptr. 354, 362 (1984) (en banc) (emphasis in original); see also, e.g., San Jose Production Credit Association v. Old Republic Life Insurance Co., 723 F.2d 700, 703 (9th Cir.1984). This covenant not only "requires each contracting party to refrain from doing anything to injure the right of the other to receive the benefits of the agreement," id., "but also [imposes] the duty to do everything that the...