Powell v. National Football League, Civ. No. 4-87-917.

• Court: United States District Courts. 8th Circuit. United States District Court of Minnesota
• Writing for the Court: DOTY
• Citation: 690 F. Supp. 812
• Docket Number: Civ. No. 4-87-917.
• Decision Date: 11 July 1988
• Parties: Marvin POWELL, Brian Holloway, Michael Kenn, Michael Davis, James Lofton, Michael Luckhurst, Dan Marino, George Martin, Steve Jordan and the National Football League Players Association on behalf of themselves and all class members, Plaintiffs, v. NATIONAL FOOTBALL LEAGUE; The Five Smiths, Inc., d/b/a Atlanta Falcons; Buffalo Bills, Inc., d/b/a Buffalo Bills; Chicago Bears Football Club, Inc., d/b/a Chicago Bears; Cincinnati Bengals, Inc., d/b/a Cincinnati Bengals; Cleveland Browns, Inc., d/b/a Cleveland Browns; The Dallas Cowboys Football Club, Ltd., d/b/a Dallas Cowboys; PDB Sports, Ltd., d/b/a Denver Broncos; The Detroit Lions, Inc., d/b/a Detroit Lions; The Green Bay Packers, Inc., d/b/a Green Bay Packers; Houston Oilers, Inc., d/b/a Houston Oilers; Indianapolis Colts, Inc., d/b/a Indianapolis Colts; Kansas City Chiefs Football Club, Inc., d/b/a Kansas City Chiefs; The Los Angeles Raiders, Ltd., d/b/a Los Angeles Raiders; Los Angeles Rams Football Company, Inc., d/b/a Los Angeles Rams; Miami Dolphins, Ltd., d/b/a Miami Dolphins; Minnesota Vikings Football Club, Inc., d/b/a Minnesota Vikings; New England Patriots Football Club, Inc., d/b/a New England Patriots; The New Orleans Saints Limited Partnership, d/b/a New Orleans Saints; New York Football Giants, Inc., d/b/a New York Giants; New York Jets Football Club, Inc., d/b/a New York Jets; The Philadelphia Eagles Football Club, Inc., d/b/a Philadelphia Eagles; Pittsburgh Steelers Sports, Inc., d/b/a Pittsburgh Steelers; The St. Louis Football Cardinals, Inc., d/b/a St. Louis Cardinals; The Chargers Football Company, d/b/a San Diego Chargers; The San Francisco Forty-Niners, Ltd., d/b/a San Francisco 49ers; The Seattle Professional Football Club, d/b/a Seattle Seahawks; Tampa Bay Area NFL Football, d/b/a Tampa Bay Buccaneers; and Pro-Football, Inc., d/b/a Washington Redskins, Defendants.

690 F. Supp. 812

Marvin POWELL, Brian Holloway, Michael Kenn, Michael Davis, James Lofton, Michael Luckhurst, Dan Marino, George Martin, Steve Jordan and the National Football League Players Association on behalf of themselves and all class members, Plaintiffs,
v.
NATIONAL FOOTBALL LEAGUE; The Five Smiths, Inc., d/b/a Atlanta Falcons; Buffalo Bills, Inc., d/b/a Buffalo Bills; Chicago Bears Football Club, Inc., d/b/a Chicago Bears; Cincinnati Bengals, Inc., d/b/a Cincinnati Bengals; Cleveland Browns, Inc., d/b/a Cleveland Browns; The Dallas Cowboys Football Club, Ltd., d/b/a Dallas Cowboys; PDB Sports, Ltd., d/b/a Denver Broncos; The Detroit Lions, Inc., d/b/a Detroit Lions; The Green Bay Packers, Inc., d/b/a Green Bay Packers; Houston Oilers, Inc., d/b/a Houston Oilers; Indianapolis Colts, Inc., d/b/a Indianapolis Colts; Kansas City Chiefs Football Club, Inc., d/b/a Kansas City Chiefs; The Los Angeles Raiders, Ltd., d/b/a Los Angeles Raiders; Los Angeles Rams Football Company, Inc., d/b/a Los Angeles Rams; Miami Dolphins, Ltd., d/b/a Miami Dolphins; Minnesota Vikings Football Club, Inc., d/b/a Minnesota Vikings; New England Patriots Football Club, Inc., d/b/a New England Patriots; The New Orleans Saints Limited Partnership, d/b/a New Orleans Saints; New York Football Giants, Inc., d/b/a New York Giants; New York Jets Football Club, Inc., d/b/a New York Jets; The Philadelphia Eagles Football Club, Inc., d/b/a Philadelphia Eagles; Pittsburgh Steelers Sports, Inc., d/b/a Pittsburgh Steelers; The St. Louis Football Cardinals, Inc., d/b/a St. Louis Cardinals; The Chargers Football Company, d/b/a San Diego Chargers; The San Francisco Forty-Niners, Ltd., d/b/a San Francisco 49ers; The Seattle Professional Football Club, d/b/a Seattle Seahawks; Tampa Bay Area NFL Football, d/b/a Tampa Bay Buccaneers; and Pro-Football, Inc., d/b/a Washington Redskins, Defendants.

Civ. No. 4-87-917.

United States District Court, D. Minnesota, Fourth Division.

July 11, 1988.

690 F. Supp. 813

Edward M. Glennon, Carol T. Rieger, J. Michael Dady, Luke H. Terhaar, Charles J. Lloyd, and Lindquist & Vennum, Minneapolis, Minn., for plaintiffs; Richard A. Berthelsen, Washington, D.C., of counsel.

William T. Egan and Rider, Bennett, Egan & Arundel, Minneapolis, Minn., for defendants; Covington & Burling, John H. Schafer, Paul J. Tagliabue, Herbert Dym and Jeffrey Pash, Washington, D.C., of counsel.

Pepin, Dayton, Herman, Graham & Getts, Charles J. Dayton, Minneapolis, Minn., for plaintiff-intervenor, Kelly Stouffer; Greer, Homer, Cope & Bonner, Bruce W. Greer and Laura Besvinick, Miami, Fla., of counsel.

Rider, Bennett, Egan & Arundel, William T. Egan and Richard J. Nygaard, Minneapolis, Minn., for defendant-intervenor— NFL Management Council, and all defendants; Richard N. Appel, Akin, Gump, Strauss, Hauer & Feld, Laurence J. Hoffman, Washington, D.C., of counsel.

MEMORANDUM AND OPINION

DOTY, District Judge.

Plaintiffs bringing this motion are the National Football League Players Association ("NFLPA") and all veteran free agent¹ professional football players currently playing in the National Football League ("NFL"). Defendants own the teams which employ the players.

The instant action arises principally² out of a dispute between the parties over the rights of veteran free agents to play for the NFL clubs of their choosing.³ For more than a decade, the movement of veteran free agents has been subject to the Right of First Refusal/Compensation System. Under the Right of First Refusal/Compensation System, every NFL club retains certain rights to "its" veteran free agent players even though contractual rights to those players no longer exist. The "Right of First Refusal" provides that when a veteran player's contract expires and a competing NFL club makes an offer to that player, the old team may keep the player by matching the competing offer; the player's old club therefore is said to have a "Right of First Refusal" as to that player's services. If the club to which the player was previously under contract does not choose to match the offer, the old club will receive draft choice "Compensation" which is extremely costly to the acquiring club.

As implemented under two successive collective bargaining agreements, the Right of First Refusal/Compensation System has essentially eliminated competition among NFL clubs for player services. Consequently, only two players in the past decade have moved from one NFL club to another in a transaction in which draft choice compensation was payable.

The most recent collective bargaining agreement incorporating the Right of First Refusal/Compensation System expired on August 31, 1987. When negotiations following

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expiration of the agreement failed to produce an accord on the free agency issue, the members of the NFLPA went on strike. When the strike also failed to yield the desired results, the players looked to the courts to win greater player movement

On October 15, 1987, the players filed suit against the owners alleging that various restrictions on player movement violate the antitrust laws. On November 23, 1987, the players moved the Court to preliminarily enjoin the owners from continuing to impose restraints upon player movement until the matter could be resolved at trial. The owners responded to the players' motion by seeking a declaration from the Court that the system of player restraints at issue is immune from antitrust scrutiny. A hearing on the motions was held December 30, 1987.

In the Memorandum and Opinion issued after the hearing, the Court ruled that, notwithstanding expiration of the collective bargaining agreement, the system of player restraints retained its immunity to antitrust attack until the parties reached a bargaining impasse over that issue. See Powell, 678 F.Supp. at 788. The Court additionally noted that it could not make an "impasse" determination at that time because the owners' charge that the players had not bargained in good faith was still pending before the National Labor Relations Board.

On April 28, 1988, the Associate General Counsel to the NLRB dismissed the owners' charge of bad faith bargaining. The owners did not seek review of that decision, and the players promptly renewed their motion for a preliminary injunction. The players' motion, which is the subject of this Memorandum and Opinion, seeks to preliminarily enjoin the owners from continuing to impose a system that would limit the ability of veteran free agent players to negotiate with, and ultimately play for, any NFL team. Put another way, the players are asking the Court to declare unrestricted free agency until the matter is finally resolved on the merits.

The owners responded to the players' renewed motion by moving the Court for summary judgment declaring that the parties were not yet at impasse, that the players failed to satisfy the Eighth Circuit standard for obtaining injunctive relief, and that the Norris-LaGuardia Act deprived the Court of jurisdiction to enter an injunction against the owners in this case.

At the June 17, 1988 hearing on the motions, the Court rendered its decision that the parties had in fact reached a bargaining impasse over the free agency issue, and that the system of restraints on player movement was now subject to the antitrust laws. The Court took the Norris-LaGuardia Act and preliminary injunction issues under advisement, and those issues are the subject of this Memorandum and Opinion.

DISCUSSION

I. Application of the Norris-LaGuardia Act

With limited exceptions, the Norris-LaGuardia Act, 29 U.S.C. § 101 et seq. (1982), deprives federal courts of jurisdiction to issue injunctions in cases "involving or growing out of labor disputes." 29 U.S. C. § 101.⁴ The term "labor dispute" is defined broadly in the statute as "any controversy concerning terms or conditions of employment." 29 U.S.C. § 113(c). "The Act's scope is intentionally broad, covering any case ... in which `the employer-employee relationship is the matrix of the controversy.'" United Telegraph Workers, AFL-CIO v. Western Union, 771 F.2d 699 (3rd Cir.1985) (quoting Jacksonville Bulk Terminals, Inc. v. International Longshoremen's Ass'n., 457 U.S. 702, 712-13, 102 S.Ct. 2672, 2680, 73 L.Ed.2d 327 (1982)).

It is clear that the issue of player movement relates to a term or condition of employment⁵

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and the players do not challenge application of the Act on that basis. Rather, the players argue that any...