City of Oakland v. Oakland Raiders
| Docket Number | B313388 |
| Decision Date | 15 September 2022 |
| Citation | 83 Cal.App.5th 458,299 Cal.Rptr.3d 463 |
| Parties | CITY OF OAKLAND, Plaintiff and Appellant, v. The OAKLAND RAIDERS, et al. Defendants and Respondents. |
| Court | California Court of Appeals Court of Appeals |
Barbara Parker, City Attorney (Oakland), and Maria Bee and Malia J. McPherson; Berg & Androphy, Michael Fay, pro hac vice; Pearson, Simon & Warshaw, Clifford H. Pearson and Michael H. Pearson, Sherman Oaks, for Plaintiff and Appellant.
Arnold & Porter Kaye Scholer, Steven L. Mayer and Daniel B. Asimow, San Francisco, for Defendant and Respondent Oakland Raiders.
Covington & Burling and John E. Hall for Defendants and Respondents the National Football League, Arizona Cardinals Football Club LLC, Atlanta Falcons Football Club, LLC, Baltimore Ravens Limited Partnership, Buffalo Bills, LLC, Panthers Football, LLC, The Chicago Bears Football Club, Inc., Cincinnati Bengals, Inc., Cleveland Browns Football Company LLC, Dallas Cowboys Football Club, Ltd., PDB Sports, Ltd., The Detroit Lions, Inc., Green Bay Packers, Inc., Houston NFL Holdings, LP, Indianapolis Colts, Inc., Jacksonville Jaguars, LLC, Kansas City Chiefs Football Club, Inc., Chargers Football Company, LLC, The Rams Football Company, LLC, Miami Dolphins, Ltd., Minnesota Vikings Football, LLC, New York Football Giants, Inc., New York Jets LLC, Philadelphia Eagles, LLC, Pittsburgh Steelers LLC, Forty Niners Football Company LLC, Football Northwest LLC, Buccaneers Team LLC, Tennessee Football, Inc., Pro-Football, Inc., New England Patriots LLC, New Orleans Louisiana Saints, LLC.
This appeal arises out of a lawsuit filed by the City of Oakland against the National Football League (the League or the NFL) and its 32 member clubs (collectively, the defendants) after one member club, the Raiders, relocated from Oakland to Las Vegas. The City alleged the defendants did not comply with the process for approving club relocations set forth in the NFL Constitution and related documents. The City asserted causes of action for breach of contract as a third party beneficiary, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. The trial court sustained the defendants’ demurrer to all three causes of action without leave to amend and entered judgment for the defendants.
The City argues the trial court erred in ruling it was not a third party beneficiary of the NFL Constitution and related documents and therefore did not have standing to enforce those documents. The City also argues the court applied an incorrect legal standard in ruling on the demurrer to its cause of action for unjust enrichment.
We conclude that, because the City did not and cannot allege it is a third party beneficiary of the alleged contracts, its causes of action for breach of contract and breach of the implied covenant of good faith and fair dealing fail. We also conclude the City has not and cannot allege facts sufficient to state a cause of action based on a theory of unjust enrichment. Therefore, we affirm the judgment.
The Raiders football team is a member club of the National Football League, an unincorporated association. ( Oakland Raiders v. National Football League (2005) 131 Cal.App.4th 621, 626, 637, 32 Cal.Rptr.3d 266.) The NFL Constitution governs the League's operations. Article 4.1 of the Constitution defines the "home territory" of each club as "the city in which such club is located and for which it holds a franchise and plays its home games and includes the surrounding territory to the extent of 75 miles in every direction from the exterior corporate limits of such city," except in circumstances not relevant here. Article 4.3 precludes any member club from moving its franchise or playing site to a different city "without prior approval by the affirmative vote of three-fourths of the existing member clubs of the League."
In 1984 the United States Court of Appeals for the Ninth Circuit held the provision in Article 4.3 imposing a restraint on relocations subjected the League to liability under federal antitrust law when the League rejected the Raiders’ proposed move to Los Angeles in 1980. ( Los Angeles Memorial Coliseum Com. v. National Football League (9th Cir. 1984) 726 F.2d 1381, 1398.)1 The court stated that Al Davis, then the general manager of the Raiders, suggested in 1978 the League replace its "subjective voting procedure" with "a set of objective guidelines to govern team relocation." ( Id. at p. 1397.) The court appeared to endorse that suggestion by stating the League, to avoid antitrust liability, might have to adopt "[s]ome sort of procedural mechanism to ensure consideration of" objective factors relevant to relocation decisions. ( Ibid . )
Soon after the Ninth Circuit's decision in Los Angeles Memorial Coliseum , United States Senator Slade Gorton introduced Senate Bill No. 2505, which would have created an independent arbitration board with discretion to deny the proposed relocation of a professional sports franchise based on nine objective factors. (Sen. No. 2505, 98th Cong., 2nd Sess., 130 Cong. Rec. 7076, 23857-23860 (1984).) Those factors included "important community interests" that could be "inconsistent with immediate financial gain" for the owner of a team that wanted to relocate. (Id. at pp. 23857-23858.) More specifically, under the proposed legislation the independent board would consider things like existing fan support for the team, the extent of public financial support for playing facilities, and the degree to which the club engaged in good faith negotiations with community leaders over terms and conditions that would allow the club to remain in its home territory. (Id. at p. 23858.) The factors reflected the bill's proposed findings, which included that a professional sports team could decide to relocate "without regard to important interests and considerations" of the existing host community and that such communities did not have "adequate protection" against relocations that "are not consistent with the public interest." (Id. at pp. 23857-23858.) Members of Congress introduced several other bills around the same time to regulate professional sports franchise relocations, including the Professional Sports Team Community Protection Act proposed by Senator Gorton in 1985, but Congress did not enact any of them.2
Perhaps in response to the prospective loss of autonomy and control over relocation decisions, League Commissioner Pete Rozelle issued a policy in December 1984 that established new procedures for proposed transfers from a club's home territory (the Relocation Policy).3 (See Hearings before Sen. Com. on Commerce, Science, and Transportation on Sen. No. 287, 99th Cong., 1st Sess., at p. 69 (1985).) The Relocation Policy required a club proposing to transfer its franchise or playing site to a different city to present to the Commissioner the club's position on the nine factors listed in Senate Bill No. 2505 and to state why the club believed its proposed transfer was justified under the factors. (Hearings before Sen. Com. on Commerce, Science, and Transportation on Sen. No. 287, supra , pp. 70–71.) The policy provided that the Commissioner would evaluate the proposed transfer and report to the full membership and that all member clubs would vote on the proposed transfer under Article 4.3. (Ibid. ) According to Paul Tagliabue, who served as League Commissioner from 1989 to 2006, the member clubs "agreed by contract to be bound by the [L]eague's internal procedures for determining franchise location." (Hearings before Sen. Com. on the Judiciary on Sen. No. 952, 106th Cong., 1st Sess., at p. 84 (1999).)
In 1996 the League and the United States Conference of Mayors4 issued a draft Joint Statement of Principles (the Joint Statement) following "many months" of work to develop "a fair process to consider requests for franchise relocations." (Hearings before Sen. Com. on the Judiciary on Sen. No. 952, supra , p. 78.) The Joint Statement followed "a series of team relocations ... culminating in the November, 1995, announcement that the Cleveland Browns would move to Baltimore." (Id . at p. 80.) The Joint Statement acknowledged "stable team-community relations" were "good for fans, good for home cities and good for professional sports." Thus, the Joint Statement provided that "[c]ommunities, teams and the [League] should work together to identify and resolve issues pertaining to team relocations ...."
In the Joint Statement, the League acknowledged it "should" maintain rules and procedures for proposed relocations that recognize "both the private interest of team owners to maintain a profitable business and [the] public interest to enjoy the direct and indirect benefits of having a professional sports franchise." The Joint Statement recognized such public interests included a community's "financial, psychological and emotional investment in [a] professional sports team." Thus, the Joint Statement provided, the League "should" make relocation decisions based on "objective criteria that account for the interest of fans, communities, taxpayers and owners."
The Joint Statement identified 10 objective criteria that largely mirrored the criteria listed in the Relocation Policy, but added whether the current community stadium authority opposed the relocation and whether there was an investor willing to buy the club and keep it in the current community. The Joint Statement also required the League to "give fair consideration to the information presented by a community in each of the ten criteria" and to "give the most careful consideration to any proposal from the current home community that [would] preserve the existing relationship in an economically-realistic...
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