Kansas City Royals Baseball Corp. v. Major League Baseball Players Ass'n

• Decision Date: 11 February 1976
• Docket Number: No. 75-CV-712-W-1,75-CV-712-W-1
• Citation: 409 F. Supp. 233
• Parties: KANSAS CITY ROYALS BASEBALL CORPORATION, Plaintiff, v. MAJOR LEAGUE BASEBALL PLAYERS ASSOCIATION, Defendant, Golden West Baseball Company et al., Plaintiff-Intervenors.
• Court: U.S. District Court — Western District of Missouri

409 F. Supp. 233

KANSAS CITY ROYALS BASEBALL CORPORATION, Plaintiff, v. MAJOR LEAGUE BASEBALL PLAYERS ASSOCIATION, Defendant, Golden West Baseball Company et al., Plaintiff-Intervenors.

No. 75-CV-712-W-1

United States District Court, W. D. Missouri W. D.

February 3, 1976.

Memorandum and Order February 10, 1976.

Final Judgment and Decree February 11, 1976.

COPYRIGHT MATERIAL OMITTED

Louis L. Hoynes, Jr., Robert J. Kheel, Willkie, Farr & Gallagher, New York City, James P. Garner, Baker, Hostetler & Patterson, Cleveland, Ohio, Walter J. Kennedy, Hoskins, King, McGannon, Hahn & Hurwitz, Kansas City, Mo., Phil A. Koury, Harry S. Truman Sports Complex, Harry P. Thomson, Jr., George E. Leonard, Shughart, Thomson & Kilroy, Kansas City, Mo., for plaintiff.

Richard M. Moss, New York City, Gen. Counsel, William A. Jolley, Donald M. Fehr, Gant, Jolley, Moran, Walsh, Hager & Gordon, Kansas City, Mo., for defendant.

MEMORANDUM OPINION AND ORDER

JOHN W. OLIVER, District Judge.

I.

This case presents questions concerning the scope and coverage of the arbitration clause contained in Article X of the 1973 Basic Agreement between the American and National Leagues of Professional Baseball Clubs the Club Owners and the Major League Baseball Players Association the Players Association.

The case was commenced on October 28, 1975 when the Kansas City Royals Baseball Corp. filed its complaint invoking the declaratory judgment jurisdiction of this Court. The remaining 23 Major League clubs became plaintiff-intervenors shortly thereafter. The Players Association, the defendant in this case, by way of original and amended counterclaim, invoked the independent jurisdiction of this Court conferred by § 301 of the Labor Management Relations Act, as amended, 29 U.S.C. § 185, praying that the Club Owners comply with the award of an Arbitration Panel which, pursuant to agreed procedures in this Court, had considered the grievances under the arbitration procedures provided in the collective bargaining agreement between the parties and had rendered its award on December 23, 1975.

The Players Association filed notice of grievance No. 75-27 on October 7, 1975 on behalf of John A. Messersmith's 1974 Uniform Players Contract with the Los Angeles Dodgers.¹ A similar grievance was filed in connection with the 1974 Uniform Players Contract of David A. McNally with the Montreal Expos.²

This Court conducted its first pretrial conference with counsel on November 6, 1975. Subsequent to that conference, the parties entered into a stipulation of record which provided as follows:

1. That the scheduled arbitration proceedings should go forward in accordance with the letter of Mr. Peter Seitz, dated November 3, 1975, to Mr. Marvin J. Miller and Mr. John J. Gaherin which anticipates that the arbitration panel will afford the parties a full and fair opportunity to present all arguments based on jurisdictional considerations;

2. That the arbitration panel shall hear and decide the jurisdictional question and, if appropriate, proceed and decide the arbitration proceedings on the merits; and

3. That the jurisdictional question may later be presented to this Court for its determination on the basis of the record made before the arbitration panel, together with any other relevant and material evidence which either side may wish to adduce before this Court.

In accordance with that stipulation, the parties proceeded to arbitration. Hearings were held before an Arbitration Panel composed of Peter Seitz, Chairman and Impartial Arbitrator agreed upon by the parties; John J. Gaherin, Club Owners' arbitrator; and Marvin J. Miller, Players Association arbitrator. Hearings were held before the Arbitration Panel on November 21, 24 and December 1, 1975. Sworn testimony amounting to 842 pages was presented, together with 97 exhibits introduced as either Joint Exhibits, Club Owners exhibits or Players exhibits. A 61 page Opinion of Impartial Chairman of Arbitration Panel was filed by Mr. Seitz, the Impartial Arbitrator, and the following award was rendered by the Arbitration Panel on December 23, 1975, with Mr. Gaherin dissenting. The award stated:

AWARD

1. Jurisdiction:

It is found and decided that the Messersmith and McNally grievances, despite the claimed effect of the provisions of Article XV of the Basic Agreement, are within the scope of the provisions of Article X of the Basic Agreement; and, accordingly, are within the duty and the power of the Arbitration Panel to arbitrate. The application of the leagues, made on jurisdictional or procedural grounds, is denied.

2. The Merits:

The grievances of Messersmith and McNally are sustained. There is no contractual bond between these players and the Los Angeles and the Montreal clubs, respectively. Absent such a contract, their clubs had no right or power, under the Basic Agreement, the Uniform Player Contract or the Major League Rules to reserve their services for their exclusive use for any period beyond the "renewal year" in the contracts which these players had heretofore signed with their clubs.

3. Relief:

The leagues involved in these proceedings, without delay, shall take such steps as may be necessary to inform and instruct their member clubs that the provisions of Major League Rules 4-A(a) and 3(g) do not inhibit, prohibit or prevent such clubs from negotiating or dealing with respect to employment with the grievants in this case; also, that Messersmith shall be removed from the reserve list of the Los Angeles Club and McNally from the reserve or disqualified lists of the Montreal Club.

On the basis of the present record, the Arbitration Panel denies the Messersmith and McNally grievances to the extent that their respective clubs shall make them whole for any damage suffered by them in the exercise of reserve rights to their services.

The Arbitration Panel retains jurisdiction of the disputes represented by these grievances; but only as to the nature and extent of relief to which the grievants may be entitled under this Award.

Prior to the pretrial conference held in this Court on January 8, 1976, the parties were directed to file appropriate statements of their respective positions in regard to this case. The responses of both parties, filed as directed on January 7, 1976, revealed that the positions of all parties in regard to the questions presented were in substantial accord. All parties agreed in substance that two questions are presented for this Court's determination: (1) Did the Arbitration Panel have jurisdiction under the provisions of the Basic Agreement to hear and decide the grievances filed by the Players Association on behalf of Messersmith and McNally and to grant the relief awarded; and (2) is the Players Association entitled to an order of this Court specifically enforcing the Award of the Arbitration Panel in regard to the Messersmith and McNally grievances?³

The Players Association stated in its January 7, 1976 response to the Court's inquiry that it did not anticipate the necessity of adducing any additional evidence other than the various pleadings, affidavits and documents filed in this Court together with a copy of all the proceedings before the Arbitration Panel, including a transcript of the testimony, the documentary evidence introduced during the arbitration proceedings, and the Opinion of Impartial Chairman of Arbitration Panel and the Award of the Arbitration Panel. The Players Association stated that it was its position that any evidence which is not contained in that data was neither relevant nor material to the questions presently before this Court.

The Club Owners tentatively indicated that they might wish to adduce a limited amount of additional evidence by calling Alexander Hadden, presently secretary-treasurer and general counsel in the Office of the Commissioner of Baseball, but who was previously counsel for the American League and had participated in various meetings and negotiations held and conducted during the 1967-1970 period of collective bargaining between the parties. The Club Owners indicated that they might also call Bowie K. Kuhn, Commissioner of Baseball, to testify concerning the meaning, effect, and history of the reserve system, and Ewing Kauffman, owner of the Kansas City Royals, to testify about the meaning and effect of the reserve system and his reliance thereon as a substantial investor.

Proceedings at the January 8, 1976 pretrial conference established that counsel for both sides wished to cooperate with each other and with this Court to eliminate all areas of substantial dispute about any factual circumstances which could be admitted by stipulation. Counsel were also agreeable to an attempt to design procedures under which the questions of law presented by the case could be decided in a fair and expeditious manner.⁴

Further procedures were developed at a later pretrial conference held January 19, 1976, pursuant to which the parties subject to reserved objections to materiality and relevancy, agreed upon the factual accuracy of 73 proposed findings of fact which had theretofore been submitted by the Club Owners and upon all 18 proposed findings of fact proposed by the Players Association. In light of that stipulation, the Club Owners revised their original proposed findings of fact and submitted 37 new proposed findings. There is no substantial dispute about many of the new findings of fact proposed by the Club Owners, although there are a number of questions of law put in focus by the new proposed findings.

The Players Association adhered to its position that no additional evidence was necessary under the circumstances and reiterated that, indeed, any additional evidence would be irrelevant and immaterial. The Club Owners, however, adhered to the position stated in their response filed January 7, 1976, that additional evidence, both testimonial and documentary, should be received. Accordingly, the matter was set for plenary evidentiary...