Hebert v. Los Angeles Raiders, Ltd.

• Decision Date: 17 September 1991
• Docket Number: No. B057462,B057462
• Citation: 12 Cal.App.4th 904,285 Cal.Rptr. 449
• Court: California Court of Appeals Court of Appeals
• Parties: Previously published at 234 Cal.App.3d 36, 12 Cal.App.4th 904, 18 Cal.App.4th 165, 6 Cal.App.4th 184 234 Cal.App.3d 36, 12 Cal.App.4th 904, 18 Cal.App.4th 165, 6 Cal.App.4th 184, 60 USLW 2250, 1991-2 Trade Cases P 69,606 Bobby HEBERT, Plaintiff and Appellant, v. LOS ANGELES RAIDERS, LTD., a California limited partnership, and National Football League, an unincorporated association, Defendants and Respondents.

Page 449

285 Cal.Rptr. 449

Previously published at 234 Cal.App.3d 36, 12 Cal.App.4th 904, 18 Cal.App.4th 165, 6 Cal.App.4th 184

234 Cal.App.3d 36, 12 Cal.App.4th 904, 18 Cal.App.4th 165,

6 Cal.App.4th 184, 60 USLW 2250,

1991-2 Trade Cases P 69,606

Bobby HEBERT, Plaintiff and Appellant, v. LOS ANGELES RAIDERS, LTD., a California limited partnership, and National Football League, an unincorporated association, Defendants and Respondents.

No. B057462.

Court of Appeal, Second District, Division 7, California.

Sept. 17, 1991.

Review Granted Dec. 12, 1991.

Hill Wynne Troop & Meisinger, Louis M. Meisinger, Ronald D. Reynolds, Daniel Gunning and David A. Householder, Los Angeles, for plaintiff and appellant.

Skadden, Arps, Slate, Meagher & Flom, Frank Rothman, Douglas B. Adler, Darrel J. Hieber, Gary S. Glickman, Los Angeles, and Jeffrey E. Birren, El Segundo, and Amy J. Trask, Los Angeles, for defendants and respondents.

LILLIE, Presiding Justice.

Plaintiff, Bobby Hebert, appeals from judgment of dismissal entered following an order sustaining demurrer of defendants, Los Angeles Raiders, Ltd. (Raiders) and National Football League (NFL), to plaintiff's amended complaint without leave to amend. ¹

FACTS

The amended complaint alleged: Defendant NFL is an unincorporated association comprised of 28 professional football teams, each of which is a separate entity that operates a professional football franchise for profit in various cities across the United States. Defendant Raiders operates one of these franchises in Los Angeles under the team name Los Angeles Raiders. Plaintiff, a resident of California, has been a professional football player in the NFL since 1985, playing under contract to the New Orleans Saints (Saints), another NFL team. The NFL member teams constitute the only market in the United States for the services of major league professional football players. Instead of engaging in free competition for players' services the NFL, the Raiders and other NFL member teams have combined and conspired to eliminate such competition among themselves through various agreements, including Plan B (hereinafter described), which prevent plaintiff from bargaining as a free agent and selling his services to the team for which he wishes to play.

The history of the NFL's anticompetitive restraints on players goes back to the "Rozelle Rule," adopted by NFL member teams in 1963 as an amendment to their constitution and bylaws. The Rozelle Rule provided that an NFL team desiring the services of a player whose contract had expired (veteran free agent) could not sign that player without paying some form of compensation to the player's former team. If the two teams could not agree on the compensation Pete Rozelle, then commissioner of the NFL, would assess the compensation. The effect of the Rozelle Rule was to restrain competition among the NFL teams for players' services. It operated to restrict the players' freedom of movement by binding them to one team throughout their careers and denying them the right to sell their services in a free and open market. In 1976, the Rozelle Rule was held to constitute an unreasonable restraint of trade in violation of the Sherman Act. (Mackey v. National Football League (8th Cir.1976) 543 F.2d 606.)

In 1977 and again in 1982 the NFL entered into collective bargaining agreements with the NFL Players Association (NFLPA). The agreements included the "First Refusal/Compensation" system whereby each NFL team could prohibit a veteran free agent from moving to another NFL team by exercising a right of first refusal and matching a competing team's offer to such player. If the player's former team chose not to match the offer, it would receive substantial compensation from the new team in the form of one or more college draft choices. The 1982 collective bargaining agreement expired in 1987.

On February 1, 1989, despite the absence of a new collective bargaining agreement, the NFL and its member teams, acting unilaterally and without player approval, agreed to a new system of player restraints called Plan B. Under Plan B the NFL, the Raiders and the other NFL teams agreed that each team had the right to "protect" 37 out of 45 players on its active player roster; these protected players continued to be subject to the anticompetitive first refusal/compensation system. The vast majority of players, including plaintiff, remain bound to their former teams under the Plan B first refusal/compensation system which eliminates the ability of players to obtain a competitive market value for their services by inhibiting or preventing bidding by NFL teams, and also serves to restrict or eliminate the players' freedom of movement.

From February 1, 1985 to February 1, 1990, plaintiff was under contract to the Saints. Prior to the beginning of the 1990 NFL season plaintiff was ranked third by the NFL among active NFL quarterbacks. When plaintiff's contract expired (Feb. 1, 1990) he was designated "protected" by the Saints under Plan B. Accordingly, plaintiff had only a two-month period in which he could attempt to negotiate with another NFL team. Because of the anticompetitive restraints and effect of Plan B plaintiff did not receive an offer from any NFL team during the two-month period and on April 1, 1990, when the period expired, plaintiff's ability to negotiate a contract with any team was completely foreclosed. Further, although plaintiff was no longer under contract to the Saints, the "rights" to plaintiff reverted to the Saints and he became their exclusive property for the 1990-1991 season. Thus, under Plan B plaintiff had only two options: either play for the Saints on whatever terms they dictate or not play at all.

Beginning in January 1990 plaintiff had discussions with the Raiders about playing for them in the 1990 season and beyond. Plaintiff and his agent repeatedly were told by authorized representatives of the Raiders that the Raiders wanted to enter into a contract with plaintiff and would have done so but for the prohibitions contained in Plan B. At the time this action was filed (Oct. 1990) six weeks of the NFL regular season had elapsed and plaintiff did not have a contract to play for any NFL team.

Plan B is a contract among the NFL, the Raiders and the other NFL member teams which restrains plaintiff from engaging in his lawful profession, trade or business in violation of California Constitution article I, section 1, and Business and Professions Code section 16600.

The amended complaint sought the following relief: (1) a declaration that the NFL's and the Raiders' participation in Plan B violates the constitution and section 16600 insofar as it restrains plaintiff from engaging in professional football; and (2) preliminary and permanent injunctions enjoining the NFL and the Raiders from participating in or enforcing Plan B. ²

Defendants demurred generally to the amended complaint on the ground the Commerce Clause of the federal Constitution precludes application of the provisions of California law relied upon by plaintiff to the player-team-league relationship of the NFL. Over plaintiff's opposition, the demurrer was sustained without leave to amend. Judgment was entered dismissing the amended complaint. This appeal followed.

DISCUSSION

I APPEAL NOT DISMISSED FOR MOOTNESS

Attached to defendants' reply brief as an exhibit are copies of two contracts between plaintiff and the Saints (executed during the pendency of this appeal) whereby the Saints employed plaintiff to play for them from February 1, 1991 through February 1, 1993. Defendants argue that because these contracts show plaintiff is not prevented from pursuing his chosen career as a professional football player, the relief requested in the amended complaint is ineffectual and unnecessary; the appeal therefore is moot and must be dismissed. We decline defendants' invitation to consider the contracts as evidence on appeal since they are not part of the record. As hereinafter discussed, even if we received the contracts into evidence the appeal would not be dismissed as moot.

"As a general rule, when an event has occurred pending appeal from a lower court judgment which renders it impossible for the appellate court to grant an appellant any effectual relief whatever, the appeal will be dismissed as moot. [Citation.] There is a significant exception to this rule, however, where the appeal raises an important issue that is likely to recur, yet evade review. [Citations.] If an action involves a matter of continuing public interest and the issue is likely to recur, a court may exercise an inherent discretion to resolve that issue, even though an event occurring during its pendency would normally render the matter moot." (Schraer v. Berkeley Property Owners' Assn. (1989) 207 Cal.App.3d 719, 728, 255 Cal.Rptr. 453, internal quotation marks omitted; see also Fallbrook Sanitary Dist. v. San Diego Local Agency Formation Com. (1989) 208 Cal.App.3d 753, 757, 256 Cal.Rptr. 590.)

While the validity of Plan B is of immediate interest to the NFL, its 28 member teams and the players, the issue is also of general public interest because of the popularity of professional football. The issues of the validity of Plan B and its alleged effect on plaintiff's right to work as a professional football player are likely to recur. Accordingly, we decline to dismiss the appeal as moot and proceed to a consideration of its merits.

II DEMURRER PROPERLY SUSTAINED

The Commerce Clause provides that "Congress shall have Power ... [t]o regulate Commerce ... among the several States." (U.S. Const., art. I, § 8, cl. 3.) Even without implementing legislation by Congress, the Commerce Clause is a limitation on the power of the states. (Edgar v. MITE Corp. (1982) 457 U.S. 624, 640, 102 S.Ct. 2629, 2639, 73 L.Ed.2d 269, 281.) Cases interpreting the Commerce Clause "reflect the Constitution's special concern both with the maintenance of a national economic...