Flood v. Kuhn

• Decision Date: 23 April 1970
• Docket Number: No. 70 Civ. 202.,70 Civ. 202.
• Citation: 312 F. Supp. 404
• Parties: Curtis C. FLOOD, Plaintiff, v. Bowie K. KUHN, Individually and as Commissioner of Baseball, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

312 F. Supp. 404

Curtis C. FLOOD, Plaintiff, v. Bowie K. KUHN, Individually and as Commissioner of Baseball, et al., Defendants.

No. 70 Civ. 202.

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

April 23, 1970.

Paul, Weiss, Goldberg, Rifkind, Wharton & Garrison, New York City, Allan H. Zerman, Clayton, Mo., for plaintiff; Arthur J. Goldberg, Jay H. Topkis, Richard M. Moss, Daniel Levitt, Max Gitter, William D. Iverson, New York City, of counsel.

Donovan, Leisure, Newton & Irvine, New York City, Arnold & Porter, Washington, D.C., for defendant Bowie K. Kuhn; Paul A. Porter, William L. McGovern, Dennis G. Lyons, Douglas G. Robinson, Washington, D.C., George S. Leisure, Jr., John E. Tobin, New York City, of counsel.

Willkie, Farr & Gallagher, New York City, for all defendants except Bowie K. Kuhn; Louis F. Carroll, Mark F. Hughes, Louis L. Hoynes, Jr., Barry Rona, Robert J. Kheel, New York City, of counsel.

Baker, Hostetler & Patterson, Cleveland, Ohio, for defendant Joseph E. Cronin, President of American League of Professional Baseball Clubs, and all American League Clubs; Alexander H. Hadden, James P. Garner, Sargent Karch, Cleveland, Ohio, of counsel.

OPINION

COOPER, District Judge.

Each defendant herein to the extent named in plaintiff's first four causes of action moves to dismiss such claims for lack of jurisdiction over the subject matter, for failure to state a claim upon which relief can be granted, and, as to the second and third causes of action only, for failure to join indispensable parties, pursuant to Rule 12(b) (1), (6) and (7), F.R.Civ.P. Both defendants named in the fifth cause of action move alternatively for dismissal of that claim on the first two of the above-stated grounds, or for summary judgment pursuant to Rule 56, F.R.Civ.P. Each of the first four causes of action attack baseball's reserve system. The fifth cause of action alleges certain unrelated antitrust violations on the part of two defendant baseball clubs.

First Four Causes of Action

Turning first to the motions to dismiss the first four causes of action, dismissal on the pleadings for want of jurisdiction would be appropriate only if plaintiff's claims of federal jurisdiction were unsubstantial or frivolous. Cf. Bell v. Hood, 327 U.S. 678, 66 S.Ct. 773, 90 L.Ed. 939 (1946). We cannot so hold. See generally, our Opinion herein filed March 4, 1970 denying plaintiff's motion for a preliminary injunction, 309 F.Supp. 793 (hereinafter "Opinion").

After considerable reflection we also conclude that any decision on the motions to dismiss for failure to state a claim must be deferred until trial. See Rule 12(d), F.R.Civ.P. With regard to the first cause of action alleging violation of the federal antitrust laws, plaintiff asserts grounds for overruling Toolson v. New York Yankees, Inc., 346 U.S. 356, 74 S.Ct. 78, 98 L.Ed. 64 (1953) which in our view raise serious questions of a factual nature. See Opinion. By the same token we are of the belief that defendants raise substantial issues of fact as to whether this matter is properly a labor dispute exempt from the antitrust laws.¹ Id. To obtain a clear view, the proper judicial course requires that these issues—important to all of organized baseball and of great public interest—not be resolved without full consideration of all the facts best adduced at trial. See 2A Moore, Federal Practice ¶ 12.16 at 2356 and 2357 (2d ed. 1968). See also, United States v. Central States Theatre Corp., 159 F. Supp. 552 (D.Neb.1957); Kaus v. Huston, 35 F.Supp. 327, 330 (N.D.Iowa 1940).

Further, we believe the trial must encompass the factual issues raised respecting the reserve system—hailed as a blessing by proponents; condemned as destructive by antagonists. We have ordered an early trial herein (May 19, 1970); the considerations which impelled that decision likewise weigh heavily in favor of developing all of the facts at one trial so as to avoid the possibility of piecemeal determinations and consequent delay. Additionally, exploration of the operation and effect of the reserve system is vital to any determination respecting plaintiff's fourth cause of action based on involuntary servitude. Potentially, it may also illuminate the question of the continued vitality of baseball's judicially-derived antitrust exemption.² Cf. United States v. Central States Theatre Corp., supra, 159 F.Supp. at 555.

Accordingly, in light of the circumstances of this case we order that the hearing and determination of the defenses raised pursuant to Rule 12(b) (1), (6) and (7), F.R.Civ.P., be deferred until trial "to permit the Court to take a larger scope of vision than that merely stated in the pleading." Kaus v. Huston, 35 F.Supp. at 330. See United States v. Central States Theatre Corp., 159 F.Supp. at 554-555.

Fifth Cause of Action in General

We are faced now with defendants' motions in the alternative for either dismissal or summary judgment in their favor as to plaintiff's fifth cause of action. It asserts two federal antitrust claims³ unrelated to the reserve system: the first against the St. Louis National Baseball Club Inc. (St. Louis Club) and the second against the New York Yankees, Inc. (New York Yankees).

In light of the affidavits defendants submit and rely upon which are in no wise rebutted by plaintiff we believe it appropriate to direct our attention solely to the motion for summary judgment. Plaintiff in fact submits no papers whatever in opposition thereto. As to each of the two claims, he is in effect content to rest upon the facts set forth in defendants' affidavits filed herein and, to the extent not rebutted by such affidavits, the allegations of his complaint.

Applicable is Rule 56(e), F.R.Civ.P. which provides in part:

"When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials in his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial."

At a conference held before us in chambers with all parties present on March 24, 1970, plaintiff's attorney stated with regard to the within motions:

"We will not file an answering brief. * * * We will stand on what we filed." Transcript, March 24, 1970, p. 19.

Plaintiff files no statement pursuant to Rule 56(f), F.R.Civ.P., that affidavits in opposition are for any reason presently unavailable.

A week later at a similar conference held on March 31, plaintiff's counsel, at no time suggesting he wished to answer defendants' motions even as to the fifth cause of action (it had not been briefed in connection with plaintiff's earlier motion for a preliminary injunction), stated:

"Now, I made an offer, and I should like to explicitly restate what the terms of the offer were. I did not say that I accepted the fact that there were no factual matters involved in the claim about CBS or the sale of beer or other matters. I said that for the purpose of expediting the trial, I am content to rely upon the facts as they said them. I might dispute those facts, but I have the obligation particularly with respect to what is going on in the stadium in St. Louis with respect to beer sales, but I have read those affidavits, and I am perfectly content if there is an early trial, as your Honor has ordered, not to encumber the record with additional facts, because I find in the facts as stated there ample support for the cause of action we set forth."

Transcript, March 31, 1970, p. 16.

First Claim of Fifth Cause of Action

Defendants motions for summary judgment as to each of these distinct claims are treated separately. As to the first, plaintiff's complaint alleges that the St. Louis Club derives substantial revenues from concession sales in its baseball stadium, a large portion of which are of beer; that the St. Louis Club through a parent corporation is engaged in the production, distribution and sale of beer; that said club has limited the sale of beer in the stadium concession to that produced by the affiliated company and has excluded all other beer companies from selling or attempting to sell beer through concession sales in the stadium—all in violation of the Sherman and Clayton Anti-Trust Acts; that the effect of this violation has been, and will continue to be, to increase the revenues of the beer company and diminish the revenus of said ball club available for player salaries (including that of plaintiff).⁴

Defendant St. Louis Club submits the affidavit of its Vice President and General Manager, Vaughan P. Devine, dated January 29, 1970. He acknowledges that the St. Louis Club is in effect wholly-owned by Anheuser-Busch, Inc., which is engaged in the production, distribution and sale of beer. He states, contrary to plaintiff's allegations, that "the beers sold at the St. Louis ballpark are not limited to beers produced by Anheuser-Busch." Rather, two of the four beers sold at the ballpark are produced by companies in which neither the St. Louis Club nor Anheuser-Busch has any ownership or other interest whatsoever.

Of foremost importance with regard to plaintiff's claim, affiant Devine avers:

"The right to sell beer within the St. Louis ball park is given to a concessionaire completely independent of Defendant, St. Louis National Baseball Club, Inc. and completely independent of Anheuser-Busch, Incorporated, by a contract between the concessionaire and the owner of the St. Louis ball-park, Civic Center Redevelopment Corporation.

7. Defendant, St. Louis National Baseball Club, Inc. derives no revenue whatever from any concession sales, including sales of beer, in the St. Louis ball park. Its revenues are completely independent of and have no connection with any such concession sales; and no matter what beers are sold in the St. Louis ball park, Defendant, St. Louis National Baseball Club, Inc. does not participate in the revenue."

Affidavit of Vaughan P.

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