Oakland Raiders v. National Foorball League

• Decision Date: 31 October 2001
• Docket Number: No. H020651.,H020651.
• Citation: 93 Cal.App.4th 572,113 Cal.Rptr.2d 255
• Parties: The OAKLAND RAIDERS, Plaintiff and Appellant, v. NATIONAL FOOTBALL LEAGUE, et al., Defendants and Respondents.
• Court: California Court of Appeals Court of Appeals

113 Cal.Rptr.2d 255

93 Cal.App.4th 572

The OAKLAND RAIDERS, Plaintiff and Appellant, v. NATIONAL FOOTBALL LEAGUE, et al., Defendants and Respondents.

No. H020651.

Court of Appeal, Sixth District.

October 31, 2001.

As Modified on Denial of Rehearing November 15, 2001.

Review Denied January 29, 2002.

Attorneys for Plaintiff-Appellant: Jeffrey Birren, Alameda, Alioto Law Firm, Joseph M. Alioto, Berkeley, Howard, Rice, Nemerovski, Canady, Falk & Rabkin, Alison Beth Shames, Jerome B. Falk, Jr., Kenneth G. Hausman, Annette L. Hurst, Simon J. Frankel, San Francisco.

Attorney for Defendant-Respondent: McCutchen, Doyle, Brown & Enersen, Dale E. Barnes, James L. Hunt, Michael T. Pyle and John W. Calkins, San Francisco, Ruby & Schofield, Allen J. Ruby, San Jose, Lewis, D'Amato, Brisbois & Bisgaard, Duane C. Musfelt, San Francisco.

PREMO, Acting P.J.

The Oakland Raiders (hereafter, Raiders) football club has sued the National Football League (hereafter, NFL), 16 NFL clubs, and many other NFL-related persons and entities, generally alleging that NFL leadership has been marked by abuse of power, neglect of duties, mismanagement, discriminatory rule enforcement, inappropriate favoritism, and back room deal-making which has resulted in damage to the Raiders.¹ The fourth amended and supplemental complaint alleges twenty-two causes of action. Defendants made several successful motions for summary adjudication. Because the orders disposed of all causes of action against the club defendants Austrian, and all but two of the entity defendants,² the trial court entered judgment as to those defendants. The Raiders appeals, and we affirm the judgment.

APPEALABILITY

Preliminarily, the Raiders urges that this appeal should be dismissed because the trial court had no authority to enter a piecemeal judgment. It acknowledges that Code of Civil Procedure section 579 gives a trial court discretion to render judgment against one defendant and allow the action to proceed against other defendants whenever a several judgment is proper.³ But it argues that the statute authorizes such a judgment only against a defendant not, as here, in favor of a defendant. It adds that a several judgment is not proper when all defendants are indispensable parties. We disagree.

Despite the language of Code of Civil Procedure section 579 (judgment may be entered "against" one or more defendants), the section has been consistently construed as authorizing entry of judgment "in favor" of one or more defendants. In Justus v. Atchison (1977) 19 Cal.3d 564, 568, 139 Cal.Rptr. 97, 565 P.2d 122, the court ruled that judgments of dismissal on orders sustaining demurrers to certain causes of action were properly entered in favor of the defendants, when "[t]he judgments ... disposed ... of all the causes of action in which the husbands are plaintiffs." That the plaintiff wives remained in the case is a "circumstance [which] does not affect the reason for the exception [to the one final judgment rule], i.e., that it better serves the interests of justice to afford prompt appellate review to a party whose rights or liabilities have been definitively adjudicated than to require him to await the final outcome of trial proceedings which are of no further concern to him." (Ibid) Similarly, in Estate of Gonzalez (1990) 219 Cal. App.3d 1598, 1601-1602, 269 Cal.Rptr. 68, we stated that, "It is well settled that where, as here, there is a judgment resolving all issues between a plaintiff and one defendant, then either party may appeal from an adverse judgment, even though the action remains pending between the plaintiff and other defendants." (Original italics.)

Moreover, Code of Civil Procedure section 579 is preceded by section 578, which states, "Judgment may be given for or against one or more of several plaintiffs, and for or against one or more of several defendants; and it may, when the justice of the case requires it, determine the ultimate rights of the parties on each side, as between themselves." This section has been construed to mean that "judgment may be given for or against one or more of several defendants." (Martin v. Cinelli (1960) 183 Cal.App.2d 509, 512, 7 Cal.Rptr. 62.) Thus, there is ample authority for the proposition that the trial court, in its discretion, may enter judgment in favor of one or more defendants when all issues between those defendants and the plaintiff have been adjudicated, even though the action remains pending against those defendants who have not obtained adjudication of all issues.

Here, the parties agree that all issues between the Raiders and defendants have been resolved by way of summary adjudication orders. Therefore, the trial court had the discretion to render judgment in defendants' favor, pursuant to the exception to the one final judgment rule that is codified at Code of Civil Procedure sections 578 and 579.

We also reject the point that entry of judgment in favor of defendants was improper because they are indispensable parties whose interests are identical to those of the remaining defendants. (Tinsley v. Palo Alto Unified School Dist. (1979) 91 Cal.App.3d 871, 881, 154 Cal. Rptr. 591(Tinsley).)

In Tinsley, the respondents asserted that the one final judgment rule must be applied to defeat the appeal because the interests of the respondents and a remaining defendant were identical. According to the respondents, the judgment could not be a complete determination of the matter. The court acknowledged one United States Supreme Court authority that had ruled that such a decree was nonappealable. (See Hohorst v. Hamburg-American Packet Co. (1893) 148 U.S. 262, 13 S.Ct. 590, 37 L.Ed. 443.) But it observed that the Supreme Court had applied the prevailing federal rule, apparently predicated upon the common law. It held: "The federal common law rule cannot control the statutes of this state." (Tinsley, supra, 91 Cal.App.3d at p. 881, 154 Cal.Rptr. 591.)

BACKGROUND

This matter arises from the complex web of for-profit and nonprofit organizations that carry out the business of the NFL, an unincorporated nonprofit association of 30 (now 31) football clubs, including the Raiders.

The NFL is governed by a constitution that generally requires a three-quarters vote for action. The chief executive officer is the commissioner, who is appointed by a two-thirds vote of the clubs. (Tagliabue has been the commissioner at all relevant times.) The commissioner appoints other officers such as the president. (Austrian has been the president at all relevant times.)

The NFLP is a California corporation that markets the NFL's commercial interests. The clubs own the corporation in equal shares. The board of directors consists of one director appointed by each club. Action generally requires a majority vote. Tagliabue manages the NFLP pursuant to an NFL resolution.

Enterprises, L.P. is a Delaware limited partnership that manages satellite television broadcasts of NFL games. The limited partners are the clubs. The general partner is Enterprises, Inc., a Delaware corporation that is owned by the clubs in equal shares. Enterprises, Inc. also manages the World League. Its board of directors consists of six club owners. Action requires a majority vote. Tagliabue manages Enterprises, L.P. and Enterprises, Inc.

The World League is a joint venture between Enterprises, L.P. (51%) and Fox, Inc. (49%). It operates a European football league known as NFL Europe. Its board of directors consists of four club representatives and four Fox representatives.

Management Compensation Group is not affiliated with the NFL.

The Raiders generally alleges that Tagliabue has wrongfully used his position to control a majority of the clubs so that his management of the web cannot be evaluated by independent business judgment. For example, the Raiders claims that Tagliabue permits certain clubs to operate in violation of the NFL's constitution and appoints certain clubs to key committees; in return for these favors, so the argument goes, the clubs give Tagliabue unquestioned allegiance and obedience. The other side of this coin, according to the Raiders, is that Tagliabue uses his control to treat it adversely because of antagonism stemming, in part, from nine years of litigation between the Raiders and the NFL during the 1980's.

There are 11 causes of action at issue in this appeal.

The first cause of action is a direct claim for breach of contract against the NFL and the club defendants, which essentially asserts that the operation of NFL Europe is contrary to the NFL's constitution.

The third, fourth, fifth, and sixth causes of action are derivative claims against Tagliabue and Austrian on behalf of the NFL, Enterprises L.P., and Enterprises, Inc. (and on behalf of the World League as to the fourth cause of action) concerning the management of the World League. The eighth and ninth causes of action are derivative claims against Tagliabue and Austrian on behalf of the NFL and the NFLP concerning the management of the NFLP. The 10th and 11th causes of action are derivative claims against Tagliabue and Austrian (and Management Compensation Group as to the 11th cause of action) on behalf of the NFL, the NFLP, Enterprises L.P., and Enterprises, Inc. concerning the management of 2 employee benefit plans. The seventh and sixteenth causes of action seek accountings and are ancillary to the derivative causes of action.

In the summary judgment proceedings, as to the breach of contract cause of action, the trial court found against the Raiders because of the abstention principle that courts should not interfere in intra association disputes. (California Dental Assn. v. American Dental Assn. (1979) 23 Cal.3d 346, 152 Cal.Rptr. 546, 590 P.2d 401 (California Dental).)

Concerning the 10 derivative causes of action, the Raiders alleged that making a demand upon the derivative entities to sue Tagliabue and Austrian would have been futile because the entities were...