Blalock v. Ladies Professional Golf Association

• Decision Date: 21 June 1973
• Docket Number: Civ. A. No. 16683.
• Citation: 359 F. Supp. 1260
• Parties: Barbara Jane BLALOCK, Plaintiff, v. LADIES PROFESSIONAL GOLF ASSOCIATION et al., Defendants.
• Court: U.S. District Court — Northern District of Georgia

359 F. Supp. 1260

Barbara Jane BLALOCK, Plaintiff, v. LADIES PROFESSIONAL GOLF ASSOCIATION et al., Defendants.

Civ. A. No. 16683.

United States District Court, N. D. Georgia, Atlanta Division.

June 21, 1973.

Anderson, Allegaert & Russell, Jerald Oshinsky, New York City, Powell, Goldstein, Frazer & Murphy, E. G. Partain, Atlanta, Ga., for plaintiff.

Smith, Cohen, Ringel, Kohler, Martin & Lowe, Hoke Smith, Atlanta, Ga., Anderson, Henley, Shields, Bradford & Pritchard, C. A. Searcy Miller, Dallas, Tex., for defendants.

ORDER OF COURT

MOYE, District Judge.

This case is before the Court on plaintiff's motion for partial summary judgment, defendant Erickson's motion for summary judgment and defendant McCauliff's motion for summary judgment. The Court heard oral argument on these motions on January 4, 1973, and supplemental briefs were subsequently filed on February 26, 1973, and March 2, 1973. The Court will consider the motions seriatim.

Plaintiff has moved for a partial summary judgment¹ on the ground that her one-year suspension from defendant Ladies Professional Golf Association hereinafter LPGA is illegal under Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1.

The pleadings, affidavits and depositions on file in this case disclose the following:

Plaintiff and defendants Cynthia Sullivan, Judy Rankin, Linda Craft, Penny Zavichas and Sharon Miller are professional women golfers who regularly compete against one another in tournament play sponsored by defendant LPGA for profit. Plaintiff and these defendants are all active members of defendant LPGA which is organized under the laws of the State of Ohio and is the sole owner of the defendant LPGA Tournament Players Corporation, a Texas corporation which was organized for carrying on the business matters of defendant LPGA. The officers of defendant LPGA and defendant LPGA Tournament Players Corporation are the same. The policies, business and affairs of defendant LPGA are directed by the Executive Board, which is comprised of defendants Sullivan, Rankin, Craft, Zavichas and Miller, who are officers of defendant LPGA as well as player-competitors of plaintiff.

During the week of May 15, 1972, defendant Gene McCauliff III, Tournament Director of defendant LPGA, appointed four observers at the second round of the LPGA Tournament in Louisville, Kentucky, to observe the play of the plaintiff. The observers claimed that plaintiff had illegally moved her ball. A meeting of the Executive Board of defendant LPGA was convened on May 20, 1972, which resulted in a decision to disqualify plaintiff as to the Louisville tournament, to place her on probation for the remainder of the 1972 season and to impose a fine of $500 for cheating. Plaintiff was informed of the Executive Board's decision on May 26, 1972, when she was summoned before the Executive Board in Southern Pines, North Carolina.

On May 28, 1972, the Executive Board again convened to discuss plaintiff's case. The meeting was attended by two non-Board members—Marlene Hagge and Kathy Farrer—both player-competitors of plaintiff. Defendants Sullivan and Rankin related that plaintiff had made certain statements on May 26, 1972, when informed of her probation and fine which were considered by them to be admissions of her improper conduct. Marlene Hagge, speaking on behalf of the tournament committee, recommended that plaintiff be suspended. The members of the Executive Board who were present (defendants Sullivan, Rankin and Miller) discussed the suspension of plaintiff and voted to suspend plaintiff for one year. Defendant Craft in Baltimore, Maryland, was called, and, after the case was explained to her, she, too, cast her vote for suspension. Defendant Zavichas, who was in Colorado, was unable to be reached.

On May 30, 1972, plaintiff was again called before the Executive Board which had convened in Baltimore, Maryland. All members of the Executive Board were present. After extended discussion with plaintiff, the Executive Board informed plaintiff that she was suspended from June 1, 1972, until May 31, 1973. That suspension was agreed to by all members of the Executive Board.

Plaintiff contends that suspension from defendant LPGA for a period of one year constitutes a group boycott and a per se restraint of trade.

Initially, it must be pointed out that professional golf is subject to the antitrust laws. Although not expressly deciding that professional golf is so governed, Justice Blackmun, in Flood v. Kuhn, 407 U.S. 258, 92 S.Ct. 2099, 32 L. Ed.2d 728 (1972), having determined that baseball is exempt from the antitrust laws, stated that:

". . . Other professional sports operating interstate—football, boxing, basketball, and, presumably, hockey and golf—are not so exempt . . .." footnotes omitted 407 U.S. at 282-283, 92 S.Ct. at 2112

That professional golf is governed by the antitrust laws is further substantiated by Deesen v. Professional Golfers Ass'n of America, 358 F.2d 165 (9th Cir. 1966), cert. denied, 385 U.S. 846, 87 S.Ct. 72, 17 L.Ed.2d 76 (1966).

Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1 provides in part:

"Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States . . . is declared to be illegal . . ."

Before a concerted refusal to deal can be illegal under this section, two threshold elements must be present: (1) there must be some effect on "trade or commerce among the several States", and (2) there must be sufficient agreement to constitute a "contract, combination . . . or conspiracy." See Denver Rockets v. All-Pro Management, Inc., 325 F.Supp. 1049, 1062 (C.D.Cal.1971).

It is undisputed that both of these elements are present in the instant case. As to the first element, it is clear that defendant LPGA conducts its business in such a manner as to constitute interstate commerce. The golf tournaments, co-sponsored by defendant LPGA Tournament Players Corporation, are conducted in and among the several states and the rights to televise and broadcast certain tournaments for interstate transmission have been sold. As to the second element, defendants Sullivan, Rankin, Craft, Zavichas, Miller and the members of the LPGA, by the imposition of a one-year suspension, have agreed, through the LPGA's constitution and by-laws, not to deal with plaintiff.²

The fundamental principle for determining the legality of conduct under the Sherman Antitrust Act is the "rule of reason" announced in Standard Oil Co. of New Jersey v. United States, 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619 (1911). E. g., E. A. McQuade Tours, Inc. v. Consolidated Air Tour, Man. Com., 467 F.2d 178, 185 (5th Cir. 1972) hereinafter McQuade; Harrison v. Prather, 435 F.2d 1168 (5th Cir. 1970), cert. denied, 404 U.S. 829, 92 S.Ct. 67, 30 L.Ed.2d 58 (1971). Justice Brandeis explained the rule of reason in Chicago Board of Trade v. United States, 246 U. S. 231, 38 S.Ct. 242, 62 L.Ed. 683 (1918), wherein he stated that:

". . . Every agreement concerning trade, every regulation of trade, restrains. To bind, to restrain, is of their very essence. The true test of legality is whether the restraint imposed is such as merely regulates and perhaps thereby promotes competition or whether it is such as may suppress or even destroy competition. . . ." 246 U.S. at 238, 38 S.Ct. at 244

From this general principle has been carved a well-defined exception within which fall group boycotts:

". . . Certain arrangements are conclusively presumed to be unreasonable restraints of trade, simply by virtue of their obvious and necessary effect on competition. See Northern Pacific Ry. v. United States, 356 U.S. 1, 5, 78 S.Ct. 514, 518, 2 L.Ed.2d 545 (1958). Once the existence of such an arrangement has been established, no evidence of actual public injury is required, Radiant Burners, Inc. v. Peoples Gas Light & Coke Co., 364 U.S. 656, 81 S.Ct. 365, 5 L.Ed.2d 358 (1961), and no evidence of the reasonableness of defendant's conduct will be considered in justification. See Northern Pacific, supra. This rule of per se illegality has been applied thus far to horizontal and vertical price fixing agreements,9 divisions of markets between competitors,10 tying arrangements,11 and certain collective refusals to deal, or `group boycotts.'12 emphasis added McQuade, supra, 467 F.2d at 186

"9. Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U.S. 373, 31 S. Ct. 376, 55 L.Ed. 502 (1911) (vertical); United States v. Socony Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129 (1940) (horizontal).

"10. Timken Roller Bearing Co. v. United States, 341 U.S. 593, 71 S.Ct. 971, 95 L.Ed. 1199 (1951).

"11. Northern Pacific Ry. v. United States, 356 U.S. 1, 78 S.Ct. 514, 2 L.Ed.2d 545 (1958).

"12. Fashion Originators Guild of America v. Federal Trade Comm'n, 312 U.S. 457, 61 S.Ct. 703, 85 L.Ed. 949 (1941)."

The United States Court of Appeals for the Fifth Circuit in McQuade discussed the cases holding collective refusals to deal, or group boycotts, to be illegal per se and concluded that these cases fall into three categories:

". . . The first group, exemplified by Eastern States Retail Lumber Dealers Assoc. v. United States, 234 U.S. 600, 34 S.Ct. 951, 58 L.Ed. 1490 (1914), have involved horizontal combinations among traders at one level of distribution, whose purpose was to exclude direct competitors from the market. Thus, in Eastern States, a combination of retail lumber dealers black-listed lumber wholesalers who sold directly to the retailers' customers. The obvious purpose of the combination—eliminating competition from the wholesalers—placed it `within the prohibited class of undue and unreasonable restraints.' 234 U.S. at 612, 34 S.Ct. at 954. To the same effect are Associated Press v. United States, 326 U.S. 1, 65 S.Ct. 1416, 89 L.Ed. 2013 (1945); Silver v. New York Stock Exchange, 373 U.S. 341, 83 S.Ct. 1246, 10 L.Ed.2d 389 (1963); and Thill Securities Corp. v. New York

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