Shall v. Henry

• Decision Date: 05 March 1954
• Docket Number: No. 10966.,10966.
• Citation: 211 F.2d 226
• Parties: SHALL v. HENRY et al.
• Court: U.S. Court of Appeals — Seventh Circuit

211 F.2d 226 (1954)

SHALL v. HENRY et al.

No. 10966.

United States Court of Appeals Seventh Circuit.

March 5, 1954.

Louis M. March, Chicago, Ill., for appellant.

Vincent D. McConnell, Charles H. Watson, Chicago, Ill., Peabody, Westbrook, Watson & Stephenson, Chicago, Ill., of counsel, for appellees.

Before DUFFY, LINDLEY and SWAIM, Circuit Judges.

LINDLEY, Circuit Judge.

Plaintiff appeals from an order dismissing his suit. His original complaint, filed January 30, 1952, averred that he, a licensed manager of professional athletes, had a contract with defendant Clarence Henry, a boxer, whereby he was to participate in Henry's management and receive a percentage of the resulting profits. He sought an accounting from defendants Henry, Stiefel and Palermo, the two latter being co-managers with plaintiff, asserting that they were attempting to deprive him of his share of the profits realized from the boxing matches in which Henry had been engaged from time to time and in which he might engage in the future. At that time Henry was about to participate in a contest under the auspices of the International Boxing Club, Inc., an Illinois corporation. The Club was joined as defendant, not because it was a party to the contract but because it was the responsible party sponsoring the match. Plaintiff sought to segregate such moneys as might come into the hands of the corporation for the benefit of Henry and his managers.

An application for a restraining order was made, at which counsel for the corporation appeared, insisting that the court had no jurisdiction. The court, being fully occupied with a busy calendar, referred the application to the master for settlement of issues and recommendations. On February 4, the corporate defendant filed a formal motion, entering a special appearance, questioning the jurisdiction of the court and, shortly later, the three individual defendants Henry, Stiefel and Palermo presented a similar motion. On February 21, plaintiff filed an amended complaint, enlarging substantially upon his original averments. Again all defendants entered special appearances and moved to dismiss for want of jurisdiction. On March 29, plaintiff filed a second amended and supplemental complaint, further elaborating upon his original averments. The motions to dismiss for want of jurisdiction previously filed were allowed to stand to this amended complaint. On May 9, plaintiff filed his fourth complaint, calling it a "third amended and supplemental complaint", wherein he named as additional defendants International Boxing Club, Inc., a New York corporation, International Boxing Club of Michigan, Inc., a Michigan corporation, and International Boxing Club of Missouri, Inc., a Missouri corporation.

He included in this pleading a claim against all defendants for treble damages incurred, as he averred, as the result of an alleged conspiracy upon their part in violation of the Anti-Trust laws of the United States. Defendants again interposed motions to dismiss for want of jurisdiction, insisting that diversity of citizenship did not exist; that the amount in controversy did not exceed $3000; that no valid cause of action was stated in the claim for damages under the Anti-Trust Act and that the court lacked jurisdiction of the suit because it appeared from the complaint that plaintiff resided in California and not in Illinois and that not all of the defendants resided in the Northern District of Illinois as required by 28 U.S.C. § 1391.

On July 14 plaintiff was permitted to file his fifth pleading, namely, an amended and supplemental complaint enlarging upon the charges for an accounting and upon those under the Anti-Trust Act. The motions to dismiss for want of jurisdiction previously interposed were permitted to stand to this fifth and final complaint.

Arguments upon the motions to dismiss were heard by the master on July 22. On October 24 he filed his report, finding that the question of jurisdiction of the action under 28 U.S.C. § 1391 had been timely raised and that the cause must fail because of that statutory provision. He recommended further that, in view of the fact that there was no averment that anything was due from the corporate defendants, under the law of Illinois, they were not subject to equitable garnishment; that the claim for accounting must, therefore, fail as to them, and that no sufficient cause of action under the Anti-Trust Acts was presented against any of the defendants.

The court approved the report of the master and dismissed the complaint. The court also refused at that time to permit plaintiff's motion to file a sixth pleading, i. e., one amending the last one filed. Upon appeal plaintiff insists that the court erred in each of the respects mentioned.

All defendants were charged in the second portion of the final complaint with having violated the Anti-Trust Acts. We are of the opinion that the District Court rightly held that this claim failed to state a cause of action under the statute. That the business of professional baseball is not within the Anti-Trust Act, was established in Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs, 259 U.S. 200, 42 S.Ct. 465, 66 L.Ed. 898.

The Supreme Court, on November 9, 1953 adhered to this doctrine in Toolson v. New York Yankees, Inc., and two other cases disposed of at the same time, 346 U.S. 356, where the court declared, at 357, 74 S.Ct. 78, at 79, that Congress "had no intention of including the business of baseball within the scope of the federal antitrust laws." Those decisions must control unless there is some significant legal distinction between the business of promoting and producing boxing bouts at various places in the United States and that of professional baseball. A District Court has recently held that boxing is not to be distinguished from that of a professional baseball game, in U. S. v. International Boxing Club, Inc. (D.C.S.D.N.Y., Feb. 8, 1954, Noonan, J.) The same court, in U. S. v. Schubert (Dec. 30, 1953, Knox, J.) held that there is no legal difference between theatrical production and professional baseball.

We agree that a professional boxing contest is not to be distinguished legally from that of a professional baseball game. Obviously each involves a contest of physical skill and endurance taking place in a particular locality. The success of each depends upon the support of the public in the purchase of tickets and the sale of radio and television rights. Each baseball game is unique; no two are exactly alike. Each boxing contest is unlike any other. The profitable promotion of each depends upon the same elements. Under the mandate of the Supreme Court, therefore, we must hold that it was not the intention of Congress to extend the provisions of the Anti-Trust laws to athletic contests such as those involved in boxing. Consequently the District Court properly dismissed the complaint in so far as it involved a suit for treble damages under the Sherman Act, 15 U.S.C.A. §§ 1-7, 15 note, and the Clayton Act, 15 U.S.C.A. § 12 et seq.

The corporate defendants were included as defendants in the accounting charge solely because they were said to be promoting boxing exhibitions and, in doing so, were collecting money which would eventually be due in part to the participants, a percentage of which in turn would accrue to plaintiff. The theory seems to be that plaintiff had a right to have the court decree an equitable lien upon and isolate moneys thereafter becoming due defendant Henry from the corporation as a result of his participation in bouts. Whether such a contention is...