Davis v. Pro Basketball, Inc.

• Decision Date: 09 September 1974
• Docket Number: No. 74 Civ. 521-LFM.,74 Civ. 521-LFM.
• Citation: 381 F. Supp. 1
• Parties: Bob DAVIS, Plaintiff, v. PRO BASKETBALL, INC., Defendant.
• Court: U.S. District Court — Southern District of New York

381 F. Supp. 1

Bob DAVIS, Plaintiff, v. PRO BASKETBALL, INC., Defendant.

No. 74 Civ. 521-LFM.

United States District Court, S. D. New York.

September 9, 1974.

Proskauer, Rose, Goetz & Mendelsohn, New York City, for defendant; Howard L. Ganz, New York City, of counsel.

Nickerson, Kramer, Lowenstein, Nessen, Kamin & Soll, New York City, for plaintiff; Robert M. Heller, New York City, of counsel.

OPINION

MacMAHON, District Judge.

This is a diversity action for breach of contract. Defendant moves to dismiss the complaint for lack of subject matter jurisdiction, improper venue, and failure to state a claim upon which relief can be granted, Rules 12(b)(1), (3) and (6), Fed.R.Civ.P., or, in the alternative, for an order staying this action pending arbitration. Since the parties have submitted affidavits in support of their positions, we will treat the 12(b) (6) motion as one for summary judgment.

Plaintiff Bob Davis, a New York resident, is a professional basketball player who achieved some fame while playing college basketball at Weber State University in Ogden, Utah. Defendant Pro Basketball, Inc. is an Oregon corporation which owns and operates the Portland Trail Blazers, a member of the National Basketball Association (NBA).

Plaintiff and defendant entered into a written "no-cut" contract on April 18, 1972 which obligated Davis to play basketball exclusively for the Trail Blazers for a three-year period for $250,000, payable in installments. Under the contract, Pro Basketball must pay plaintiff the $250,000 whether or not he made the Trail Blazers' roster, hence the "no-cut" nature of the contract. The contract is an amended form of the NBA Uniform Player Contract, with an individually negotiated rider attached. The terms of the Uniform Player Contract are negotiated between the NBA and the National Basketball Players' Association (Players' Association), the authorized collective bargaining representative for all NBA players, and the current contract expires June 1, 1975.

Shortly after the parties executed the April 18 agreement, it was discovered that plaintiff suffered from a pre-existing injury to his left knee which required surgery and which, defendant contended, would prevent Davis from playing basketball during the 1972-73 NBA season and, perhaps, during subsequent seasons as well. To resolve this dispute, the parties entered into a "Modification of Agreement" which provided that the Trail Blazers could terminate the agreement with Davis within thirty days of the start of the 1973-74 regular training camp, if "Davis is unable to perform as a player solely as a result of irremediable (exclusive of surgery) injury to Davis' left knee." Otherwise, the contract would remain in full force and effect.

On October 3, 1973, by letter, defendant terminated the contract under the terms of the Modification of Agreement and suspended all payments of money to plaintiff. After some inconclusive communications between the parties, plaintiff brought this action for the $175,000 allegedly still payable on the contract.

At the outset, we are met with defendant's contention that paragraph 21 of the original agreement bars plaintiff from bringing this action in this district. Paragraph 21 provides that an action under the contract must be brought

"in a State or Federal court of competent jurisdiction of the county or district whose territorial jurisdiction includes the home city in which the club is located."

Since the Trail Blazers are located in Portland, Oregon, defendant contends that the District Court for the District of Oregon is the only proper federal venue. Plaintiff argues, however, that the venue clause of paragraph 21 was waived by the parties in the Modification of Agreement. We find it unnecessary to decide the waiver issue because it would unduly delay this action to enforce the venue selection clause.

The modern trend is to enforce a venue selection clause unless it would be unreasonable to do so. Wm. H. Muller & Co. v. Swedish American Line Ltd., 224 F.2d 806 (2d Cir.), cert. denied, 350 U.S. 903, 76 S.Ct. 182, 100 L. Ed. 793 (1955); Central Contracting Co. v. Maryland Cas. Co., 367 F.2d 341 (3d Cir. 1966). Contra, Carbon Black Export, Inc. v. The S.S. Monrosa, 254 F.2d 297 (5th Cir. 1958), cert. dismissed, 359 U.S. 180, 79 S.Ct. 710, 3 L. Ed.2d 723 (1959); In re Unterweser Reederei GMBH, 428 F.2d 888 (5th Cir. 1970). Thus, the court, in its discretion, may refuse to assert its jurisdiction if, upon the facts of the case before it, the venue clause does not appear unreasonable. Jack Winter, Inc. v. Koratron Co., 326 F.Supp. 121 (N.D.Cal. 1971); Matthiessen v. National Trailer Convoy, Inc., 294 F.Supp. 1132 (D. Minn.1968).

This is a diversity case involving no question of federal law. We think, therefore, that we "should assume no more and no less jurisdiction than a state court would if the latter were presiding over the same matter." National Equipment Rental, Ltd. v. Reagin, 338 F.2d 759, 762 (2d Cir. 1964). See, Arrowsmith v. UPI, 320 F.2d 219 (2d Cir. 1963). Thus, we must look to the New York rule on venue selection clauses.¹

The New York courts have long refused to enforce agreements which ousted their courts of jurisdiction. Kyler v. United States Trotting Ass'n, 12 A.D.2d 874, 210 N.Y.S.2d 25, motion for leave to appeal dismissed, 12 A.D.2d 1004, 212 N.Y.S.2d 1022 (4th Dep't 1961); Arsenis v. Atlantic Tankers, Ltd., 39 Misc.2d 124, 240 N.Y.S.2d 69 (Civ.Ct.N.Y.Co.1963). Nevertheless, recent New York cases have adopted a less rigid rule leaving enforcement of a forum selection clause to the sound discretion of the court. Export Ins. Co. v. Mitsui S.S. Co., 26 A.D.2d 436, 438, 274 N.Y.S.2d 977 (1st Dep't 1966); Hodom v. Stearns, 32 A.D.2d 234, 236, 301 N.Y. S.2d 146 (4th Dep't), appeal dismissed 25 N.Y.2d 722, 307 N.Y.S.2d 225, 255 N.E.2d 564 (1969); J.M. McLaughlin, "Adjective Law, Civil Practice," 19 Syr. L.Rev. 501, 509-510 (1968).

Whether we apply the New York or federal rule, we think our discretion is best exercised by refusing to enforce the venue selection provision here. As we will discuss infra, arbitration is appropriate here, and it would be a needless waste of the time and resouces both of the parties and the federal judiciary if plaintiff were required to bring this action again in Oregon, only to have that court stay the action pending arbitration. If the action continues after arbitration, however, defendant may then seek to transfer it to the District of Oregon under 28 U.S.C. § 1404(a).

Article XVI of the collective bargaining agreement between the NBA and the Players' Association provides, in part:

"Section 1. Any dispute involving the interpretation or application of, or compliance with, the provisions of this Agreement or a Uniform Player Contract between a Player and a Club . . . shall be resolved in accordance with the Grievance and Arbitration Procedure set forth in this Article."

There can be no question that plaintiff is bound by the contract negotiated with the league by the Players' Association, his authorized bargaining representative,² and that claiming breach of that contract by defendant he seeks to recover the amount due to him under his Uniform Player Contract with defendant. It appears, therefore, that this dispute must be submitted to arbitration under the terms of Article XVI of the collective bargaining agreement. Plaintiff, however, makes several arguments in an attempt to avoid that result.

First plaintiff contends that the parties waived the Grievance and Arbitration Procedures of Article XVI when they executed the Modification of Agreement. The affidavit of Terry W. Baker, an attorney who participated in the negotiations culminating in the Modification of Agreement, indicates, however, that the parties merely waived certain mediation procedures set forth in the Uniform Player Contract because they believed they could settle the dispute concerning Davis' physical condition amicably. Although Mr. Baker's affidavit is contradicted by the affidavit of Jerry A. Davis, agent for plaintiff, who also participated in the negotiations between the parties, the Baker affidavit is wholly consistent with the precise language upon which plaintiff relies, and, therefore, we accept Mr. Baker's...