California Clippers, Inc. v. United States SF Ass'n

• Decision Date: 02 July 1970
• Docket Number: Civ. No. 51833.
• Citation: 314 F. Supp. 1057
• Parties: CALIFORNIA CLIPPERS, INC., Plaintiff, v. UNITED STATES SOCCER FOOTBALL ASSOCIATION, the International Games Committee of said defendant United States Soccer Football Association, North American Soccer League, California Soccer Football Association, a corporation, Philip Woosnam, James McGuire, Clive Toye, Frank Woods, Joseph Flamhaft, Matthew J. Boxer, and Diogenes Cordero, Defendants.
• Court: U.S. District Court — Northern District of California

314 F. Supp. 1057

CALIFORNIA CLIPPERS, INC., Plaintiff, v. UNITED STATES SOCCER FOOTBALL ASSOCIATION, the International Games Committee of said defendant United States Soccer Football Association, North American Soccer League, California Soccer Football Association, a corporation, Philip Woosnam, James McGuire, Clive Toye, Frank Woods, Joseph Flamhaft, Matthew J. Boxer, and Diogenes Cordero, Defendants.

Civ. No. 51833.

United States District Court, N. D. California.

July 2, 1970.

COPYRIGHT MATERIAL OMITTED

William M. Brinton, Godfrey L. Munter, Jr., Kelso, Cotton, Seligman & Ray, San Francisco, Cal., for plaintiff.

Philip E. Diamond, Edgar B. Washburn, Landels, Ripley, Gregory & Diamond, Robert S. Cathcart, Bledsoe, Smith, Cathcart, Johnson & Rogers, San Francisco, Cal., Hamilton Carothers, Covington & Burling, Washington, D. C., for defendants.

Amended Order Determining Motions Re Service of Process and Venue

GERALD S. LEVIN, District Judge.

This action is before the court on the motion of Plaintiff California Clippers, Inc. Clippers to amend the Order Determining Motions Re Service of Process and Venue filed herein on March 16, 1970. Said Order determined motions of defendant North American Soccer League NASL and individual defendants Philip Woosnam, Clive Toye, James McGuire, and Joseph Flamhaft, to quash service of summons and dismiss the complaint as to them for improper venue.

Clippers is a California corporation which presents exhibitions of professional soccer by maintaining a team called the California Clippers. Clippers has filed a complaint charging the several defendants with violations of the antitrust laws through their alleged monopolistic control and restraint of professional soccer in the United States and more specifically in California.

Clippers alleges that the following structure exists which controls professional soccer in the United States and throughout numerous other countries. At the top is the Federation Internationale de Football Association FIFA, an unincorporated association with its principal place of business in Switzerland. The membership of FIFA consists of "National Associations" in various countries, and through this hierarchical structure FIFA controls professional soccer exhibitions worldwide. Defendant United States Soccer Football Association USSFA, a New York corporation, is such a "National Association," controlling professional soccer exhibitions throughout the United States. Defendants McGuire and Flamhaft are chairmen of USSFA committee.

Defendant NASL is an unincorporated association of soccer exhibitors throughout North America. NASL is affiliated with, pays dues to, and registers its players with USSFA. NASL, in conjunction with USSFA, is alleged to control the exhibition of professional soccer in the United States. Defendants Woosnam and Toye are, respectively, the Executive Director and a Director of NASL.

Defendant California Football Association, Inc., operates the California Soccer Football Association CSFA. CS FA is affiliated with USSFA in the same manner as is NASL, and it is alleged to control exhibitions of professional soccer in Northern California. Defendant Southern California Soccer Football Association SCSFA is a California corporation likewise affiliated with USSFA and is alleged to be in control of exhibitions of professional soccer in Southern California.

In April of 1968 USSFA and NASL executed an agreement which brought NASL into existence and gave it the right to sponsor "Tour Games," but only upon the prior approval of a majority of a committee consisting of two representatives of NASL and two representatives of USSFA. The organization of NASL included sixteen member teams in various cities throughout the United States and a seventeenth member team in Canada. Among the sixteen American teams were those in the cities of Oakland, Los Angeles, and San Diego, California. At the end of 1968 twelve teams, including all three of those situated in California, voluntarily terminated their membership in NASL. As a result NASL had only five member teams during 1969, none of them situated in California.

Early in 1969 Clippers planned and began a program of playing soccer exhibitions with well-known foreign teams. This program stemmed from Clippers' alleged inability to be admitted to NASL on the same terms as NASL's other member teams. On or about December 12, 1969, Clippers became a member of CSFA. Clippers thereafter requested approval of its plans from USSFA, but despite the expenditure of much time, money, and effort, USSFA refused to approve certain of the planned exhibitions. Clippers proceeded to play these exhibitions anyway. As a result Clippers alleges that it has been and will be subject to worldwide sanctions in the form of suspensions and blacklisting for not complying with US SFA requirements.

Under FIFA rules before any player can play for a professional soccer team, he must first be registered with the "National Association" of his country. Any player who does not so register may be suspended or blacklisted, as may be any other personnel of an offending team. FIFA and the other defendants have allegedly used their monopoly power to impose economic sanctions on Clippers and deny it the right to play professional soccer exhibitions. Clippers has been required to secure approval for further games under procedures which it contends are unreasonable and with which it cannot comply.

Pursuant to the April, 1968, agreement above referred to, NASL has allegedly denied Clippers the right to participate on equal operating terms with its other member teams because Clippers cannot obtain from USSFA the requisite prior approval to play foreign teams. Clippers contends that as a result it has been subjected to economic and other sanctions in violation of law.

I. Motions of NASL

A. To Quash Service

The propriety of service of process on NASL begins with Clayton Act, § 12, 15 U.S.C. § 22 and the relevant provisions of Fed.R.Civ.P. Rule 4 including reference thereunder to applicable state law.

Clayton Act § 12 provides as follows:

Any suit, action, or proceeding under the antitrust laws against a corporation may be brought not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found or transacts business; and all process in such cases may be served in the district of which it is an inhabitant, or wherever it may be found. (Emphasis added.)

NASL is, however, an unincorporated association, not a corporation, so Clayton Act § 12 is an inapplicable by its own terms to provide for service of process against NASL in this action. Orange Theatre Corp. v. Rayherstz Amusement Corp., 139 F.2d 871, 875 (3d Cir. 1944); Thill Securities Corporation v. New York Stock Exchange, 283 F.Supp. 239, 242 (E.D.Wis.1968); McManus v. Tato, 184 F.Supp. 958, 959 (S.D.N.Y.1959); Pacific Seafarers, Inc. v. Pacific Far East Line, 48 F.R.D. 347, 349 (D.C.D.C.1969).

Fed.R.Civ.P. Rule 4(f) will also not suffice to authorize service of process in this action against NASL. Fed.R.Civ. P. Rule 4(f) provides in pertinent part:

All process other than a subpoena may be served anywhere within the territorial limits of the state in which the district court is held, and, when authorized by a statute of the United States or by these rules, beyond the territorial limits of that state.

NASL is not licensed to do business in California, nor does it have an office in California, nor does it sponsor a professional soccer team in California, nor does it have an agent for service of process in California, hence service attempted to be made upon NASL by serving a member soccer team thereof in some state other than California would be ineffective under Fed.R.Civ.P. Rule 4(f) since not made within the territorial limits of the state—California—in which this district court is held. Service would therefore be proper under Fed.R.Civ.P. Rule 4(f) only if "authorized by a statute of the United States or by these rules." Clayton Act § 12 will not provide such authorization since it is inapplicable for the reasons noted above. The Federal Rules of Civil Procedure do authorize such service on a non-resident unincorporated association, insofar as Fed.R.Civ.P. Rule 4(f) permits reference to Fed.R.Civ.P. Rule 4(e) which in turn incorporates applicable state law.

Fed.R.Civ.P. Rule 4(e) provides in pertinent part:

Whenever a statute or rule of court of the state in which the district court is held provides (1) for service of a summons * * * upon a party not an inhabitant of or found within the state * * * service may * * be made under the circumstances and in the manner prescribed in the statute or rule.

In the instant case there is a California statute which would accommodate service on NASL, namely Cal.C. C.P. § 411(2.1), which section deals with service on unincorporated associations. Cal.C.C.P. § 411(2.1) (c) provides as follows:

If no person has been designated as agent for service of process as provided in Section 2403 of the Corporations Code or if the person so designated cannot be found at his address as specified in the index referred to in Section 24004 of the Corporations Code, and if no person listed in subdivision (a) or (b), as the case may be, can be found within the state after diligent search, in the manner provided by Section 24007 of the Corporations Code.

Accordingly, service upon NASL would be proper under Fed.R.Civ.P. Rule 4(e) and Cal.C.C.P. § 411(2.1) (c) if the requirements of Cal.Corp.C. § 24007 are met. Cal.Corp.C. § 24007 provides as follows:

If designation of an agent for the purpose of service of process has not been made as provided in Section 24003, or if the agent designated cannot with due diligence be found at the address specified in the index referred to in Section 24004 for personal delivery of the process, and it is shown by affidavit to the satisfaction of a court or judge that personal service of

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