Los Angeles Memorial Coliseum v. NFL

Citation468 F. Supp. 154
Decision Date16 May 1979
Docket NumberNo. 78-3523-HP.,78-3523-HP.
CourtU.S. District Court — Central District of California
PartiesLOS ANGELES MEMORIAL COLISEUM COMMISSION, Plaintiff, v. NATIONAL FOOTBALL LEAGUE et al., Defendants.

COPYRIGHT MATERIAL OMITTED

Blecher, Collins & Hoecker by Maxwell M. Blecher, Gary W. Hoecker, Los Angeles, Cal., for plaintiff.

O'Melveny & Myers by B. Boyd Hight, Clark Waddoups, Los Angeles, Cal., for all defendants except L. A. Rams Football Co. & Chargers Football Co.

Rosenfeld, Meyer & Susman by Gary A. Schlessinger, Beverly Hills, Cal., for L. A. Rams Football Co.

MEMORANDUM AND ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS WITH LEAVE TO AMEND AND DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT

PREGERSON, District Judge.

This case requires the court to examine certain provisions of the constitution and by-laws of a professional sports league in the context of the nation's antitrust laws. Plaintiff, the Los Angeles Memorial Coliseum Commission ("Coliseum") contends that the National Football League ("NFL") and its twenty-eight member teams stand in violation of §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2. Specifically, the Coliseum challenges the validity of sections 3.1 and 4.3 of the NFL's Constitution and By-laws, which require an affirmative vote of three-fourths of the team owners before a member club may transfer its franchise from one city to another or before a new member club may be admitted into the NFL.1 The Coliseum seeks to enjoin defendants, under § 16 of the Clayton Act, 15 U.S.C. § 26, from enforcing sections 3.1 and 4.3.

The NFL, an unincorporated association, and its twenty-eight member teams are engaged in the business of producing public entertainment in the form of professional football games. The NFL is the only "major league" professional football organization operating in the United States. Each team, which is separately owned, is located in a particular city and plays all of its "home games" in that city. Though the teams do not pool profits or generally share expenses,2 they do act concertedly by cooperating with each other in a number of significant ways. Pursuant to the NFL's Constitution and By-laws, this cooperation includes promulgating uniform playing rules, organizing and scheduling games, sharing television revenues and ticket receipts, and administering a joint player selection system (the "draft") whereby negotiating rights to college and other non-NFL football players are allocated among the teams. In addition, when the NFL expands and accepts a new team into the League, existing clubs help stock the expansion franchise by making players available from their own rosters. Sections 3.1 and 4.3, challenged in this action, represent two other ways in which the teams have chosen to act concertedly.

This lawsuit arose because of the decision by the Los Angeles Rams football team, a member of the NFL, to discontinue playing home games in the Coliseum and instead to play them in Anaheim, a city located south of Los Angeles in Orange County, California. The change will be effective as of the 1980-81 football season. Thus, as matters now stand, the 1980-81 season will find the Coliseum without a professional football team for the first time since 1946, when the Rams started to play there. Because the Rams' departure will allegedly lead to a loss of revenue and other financial injury, and because the Coliseum believes that the County of Los Angeles should have a professional football team, the Coliseum now wishes to obtain another NFL team to replace the Rams. This replacement team could either be an existing team now located in another city, or could be a new team created by the NFL. The three-fourths vote requirement embodied in sections 3.1 and 4.3, however, looms as an obstacle blocking the attainment of the Coliseum's desires — an obstacle the Coliseum would like struck down.3

Before the court are defendants' motions to dismiss for lack of standing and justiciability,4 and the Coliseum's motion for partial summary judgment under § 1 of the Sherman Act. After considering the pleadings, the memoranda of law, the affidavits of William R. Robertson, Gary W. Hoecker, and Pete Rozelle, and the oral argument of counsel, the court rules that the motions to dismiss should be granted with leave to amend and that the motion for partial summary judgment should be denied.

I. Motions to Dismiss

The NFL and its member teams assert in companion motions to dismiss that the Coliseum lacks standing to bring this action and that this matter is not justiciable. The standing and justiciability issues overlap to a significant degree and so will be considered together, under the rubric of standing.

In resolving the standing question, the court's lodestar must be the language of § 16 of the Clayton Act, 15 U.S.C. § 26. Section 16, in relevant part, provides:

Any person, firm, corporation, or association shall be entitled to sue for and have injunctive relief, in any court of the United States having jurisdiction over the parties, against threatened loss or damage by a violation of the antitrust laws . . . when and under the same conditions and principles as injunctive relief against threatened conduct that will cause loss or damage is granted by courts of equity, under the rules governing such proceedings . . ..

The key Ninth Circuit decision construing § 16 is In re Multidistrict Air Pollution M.D.L. No. 31, 481 F.2d 122 (9th Cir.), cert. denied, 414 U.S. 1045, 94 S.Ct. 551, 38 L.Ed.2d 336 (1973) ("Vehicle Air Pollution"). In Vehicle Air Pollution, the court found that plaintiffs, who were crop farmers, had standing to seek injunctive relief under § 16. The gist of the farmers' antitrust complaint was that the nation's automobile manufacturers had conspired to eliminate competition in the research, development, manufacture, installation, and patenting of automobile air pollution control devices; that this conspiracy had retarded the development of such devices; and that as a result thereof the farmers had suffered lower crop yields because of additional air pollution.

A. Injury to Plaintiff

The Ninth Circuit in Vehicle Air Pollution held that a plaintiff must allege an injury cognizable in equity to gain standing under § 16. The farmers in that case met this requirement by alleging that defendants' antitrust violations had caused diminished crop yields. In the case at hand, the Coliseum alleges that it faces a loss of revenue resulting from the relocation of the Rams to Anaheim and the Coliseum's asserted inability to procure a transfer or an expansion team because of the obstacles created by the challenged sections of the NFL's Constitution and By-laws. This alleged loss of revenue is analogous to the farmers' loss of revenue due to diminished crop yields and is an injury cognizable in equity.

The NFL and its member teams contend, nevertheless, that the Coliseum has not alleged a sufficiently immediate injury to satisfy the "case or controversy" requirement of Article III of the Constitution. "The injury or threat of injury must be both `real and immediate,' not `conjectural' or `hypothetical.'" O'Shea v. Littleton, 414 U.S. 488, 494, 94 S.Ct. 669, 675, 38 L.Ed.2d 674 (1973). Defendants point out that the Coliseum's alleged loss of revenue, resulting from its loss of a professional football team as a tenant, will not occur — if at all — until well over a year from now. It is possible, defendants argue, that before the 1980-81 football season dawns, the NFL clubs will vote either to allow an existing team to move to the Coliseum or to allocate an expansion team for Los Angeles and the Coliseum. As of now, no votes, either affirmative or negative, have been taken. In a nutshell, the defendants say that nothing actually has happened and that the Coliseum is merely seeking an advisory opinion from this court.

Defendants' argument is clearly at odds with the language of § 16 of the Clayton Act. Section 16 specifically declares that a plaintiff may sue for "threatened loss or damage." As the Supreme Court held in Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 130, 89 S.Ct. 1562, 1580, 23 L.Ed.2d 129 (1969):

Section 16 authorizes injunctive relief upon the demonstration of "threatened" injury. That remedy is characteristically available even though the plaintiff has not yet suffered actual injury . . .; he need only demonstrate a significant threat of injury from an impending violation of the antitrust laws or from a contemporary violation likely to continue or recur. Footnote omitted.

Plainly, this suit need not be postponed by the Coliseum until it actually suffers injury by finding itself at the commencement of the 1980-81 season without the Rams or any other professional football team as a tenant.

Zenith Radio teaches that not only must there be a threat of injury, but that the threat must be significant for injunctive relief to be granted. To satisfy the requirement of significant threat of injury and to withstand a motion to dismiss for lack of standing the Coliseum must allege: 1) that the Rams will cease playing home games at the Coliseum as of the 1980-81 season; and 2) that it is reasonably likely that, before the start of the 1980-81 season, the NFL clubs will not approve the transfer of an existing team to the Coliseum or the placement of an expansion team there.

Defendants assert, however, that these two allegations describe a threatened injury too speculative to pass the "case or controversy" test. They rely principally on the abortion decision, Roe v. Wade, 410 U.S. 113, 93 S.Ct. 705, 35 L.Ed.2d 147 (1973). In Roe, although the wife was not pregnant and thus not immediately faced with a denial of an abortion, a married couple sought to challenge Texas statutes that generally prohibited abortions. The Supreme Court held that the couple lacked standing because their injury was too speculative and indirect....

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