VKK Corp. v. Nat'l Football League
| Decision Date | 03 February 2000 |
| Docket Number | Docket No. 99-7876 |
| Parties | (2nd Cir. 2001) VKK CORPORATION, VKK PATRIOTS, INC. and VICTOR K. KIAM, II, Plaintiffs Counter Defendants Appellants, - v. - NATIONAL FOOTBALL LEAGUE, B & B HOLDINGS, INC., THE FIVE SMITHS, INC., BUFFALO BILLS, INC., THE CHICAGO BEARS FOOTBALL CLUB, INC., CINCINNATI BENGALS, INC., CLEVELAND BROWNS FOOTBALL CO., DALLAS COWBOYS FOOTBALL, INC., PDB SPORTS INC., THE DETROIT LIONS, INC., THE GREEN BAY PACKERS, INC., HOUSTON OILERS, INC., INDIANAPOLIS COLTS, INC., KANSAS CITY CHIEFS FOOTBALL CLUB INC., MIAMI DOLPHINS, LTD., MINNESOTA VIKINGS FOOTBALL CLUB, INC., NEW YORK FOOTBALL GIANTS, INC., NEW YORK JETS FOOTBALL CLUB, INC., PITTSBURGH STEELERS SPORTS INC., SAN DIEGO CHARGERS FOOTBALL CO., SEATTLE SEAHAWKS, INC., TAMPA BAY AREA NFL FOOTBALL, INC., PRO FOOTBALL, INC. and TOUCHDOWN JACKSONVILLE, LTD., Defendants Counter Claimants Appellees, TOUCHDOWN JACKSONVILLE, INC., Defendant Appellee. Argued: |
| Court | U.S. Court of Appeals — Second Circuit |
Appeal from a judgment of the United States District Court for the Southern District of New York (Milton Pollack, Judge) rendered partly on a jury verdict and partly on the grant of a motion for summary judgment together dismissing all of the plaintiffs' claims. The claims are based on the allegation that the defendants engaged in a conspiracy that prevented the plaintiffs from relocating the New England Patriots professional football club, of which the plaintiffs were majority owners, to an area of the country in which it would be more profitable, thus violating Section One of the Sherman Act, 15 U.S.C. §1. We vacate the judgment of the district court insofar as it held that the action against Touchdown Jacksonville, Ltd. and Touchdown Jacksonville, Inc. was time-barred and that a release executed by the plaintiffs when they sold the Patriots precluded suit against those two entities. To that extent, we remand the case to the district court for further proceedings. We affirm the judgment insofar as it held that the release prevents the plaintiffs from maintaining this action against the other defendants.
Affirmed in part; vacated and remanded in part.
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[Copyrighted Material Omitted] STEVEN R. KUNEY, Williams & Connolly, Washington, DC (Mark S. Levinstein, Williams & Connolly, Washington, DC, of counsel; Robert M. Heller, Kramer, Levin, Naftalis & Frankel LLP, New York, NY, of counsel), for Plaintiffs Counter Defendants Appellants,
GREGG H. LEVY, Covington & Burling, Washington, DC (Sonya D. Winner, Covington & Burling, Washington, DC, of counsel; Shepard Goldfein, Skadden, Arps, Slate, Meagher & Flom, New York, NY, of counsel), for Defendants Counter Claimants Appellees,
ALLEN G. REITER, Esq., Cooperman Levitt Winikoff Lester & Newman, PC, New York, NY; Terrance E. Schmidt, Bledsoe, Schmidt, Lippes, Moonly & Roberson, PA, Jacksonville, FL, for Defendant-Appellee Touchdown Jacksonville, Inc.,
STEVEN A. WERBER, Foley & Lardner, Jacksonville, FL, for Defendant-Counter-Claimant-Appellee Jacksonville Jaguars, Ltd., f/k/a Touchdown Jacksonville, Ltd.
Before: OAKES, CABRANES, and SACK, Circuit Judges.
On November 16, 1994, plaintiff Victor K. Kiam, II ("Kiam"), and two entities through which he controlled the New England Patriots, brought suit in the United States District Court for the Southern District of New York against the National Football League (the "NFL"), twenty-two of its member clubs (with the NFL, collectively the "NFL defendants"), and two entities involved in the ultimately successful campaign to locate an NFL football team in Jacksonville, Florida -- Touchdown Jacksonville, Ltd., and Touchdown Jacksonville, Inc. The plaintiffs allege that the defendants violated the Sherman Antitrust Act by preventing Kiam from moving the Patriots out of New England. The defendants assert that the plaintiffs are barred from maintaining this action because they released all claims against the defendants, including the antitrust claims, in a formal written release. Following a jury trial limited to the plaintiffs' claim of economic duress, the jury returned a verdict for the defendants. The district court then granted the defendants' motion for summary judgment with respect to the plaintiffs' remaining claims.
We review the district court's grant of summary judgment de novo, construing the evidence in the light most favorable to the non moving party. See Tenenbaum v. Williams, 193 F.3d 581, 593 (2d Cir. 1999), cert. denied, 529 U.S. 1098 (2000). Summary judgment is appropriate where "there is no genuine issue as to any material fact and... the moving party is entitled to a judgment as a matter of law," Fed. R. Civ. P. 56(c), i.e., "[w]here the record taken as a whole could not lead a rational trier of fact to find for the non moving party." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). An issue of fact is "material" for these purposes if it "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue of fact is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.
We may affirm the award of summary judgment on any ground with adequate support in the record. See Name Space, Inc. v. Network Solutions, Inc., 202 F.3d 573, 584 (2d Cir. 2000); Shumway v. United Parcel Serv., Inc., 118 F.3d 60, 63 (2d Cir. 1997) () Insofar as we decide this appeal in favor of the NFL defendants, we do so purely as a matter of law rather than on the basis of the jury verdict in the district court. We therefore set forth the facts in the light most favorable to the plaintiffs. See Tenenbaum, 193 F.3d at 593.
The New England Patriots is a member club of the National Football League. From 1988 through 1992, Kiam, through two corporations, VKK Corporation and VKK Patriots, Inc. (Kiam and the corporations collectively "VKK"),1 was the majority owner of the Patriots. During the period relevant to this appeal, the Patriots played their home games in Foxboro, Massachusetts. VKK alleges that when it assumed control of the Patriots, the team was experiencing substantial financial difficulties, stemming in part from the inadequate facilities at Foxboro and the restrictive lease that kept the Patriots there.
As a condition precedent to the approval of his purchase of the Patriots,2 in September of 1988, Kiam signed a contract in which VKK agreed to comply with the NFL's constitution and bylaws and to obtain advance approval from the NFL of any transfer of ownership of the Patriots. VKK further agreed to "continue to operate the Patriots' franchise within its existing home territory, unless a transfer of the franchise... to a different city is approved by the member clubs of the League." In 1989, shortly after VKK assumed ownership of the Patriots, Paul Tagliabue, who had succeeded Rozelle as NFL Commissioner, issued a statement declaring that the sale of any club would only
The VKK-owned Patriots' first two seasons were not profitable, and Kiam was required personally to guarantee loans and use personal funds to cover the resulting cash flow shortages. In an attempt to resolve the Patriots' financial situation, Kiam unsuccessfully negotiated with Boston city officials for a new stadium. In 1990, with no prospects for a new stadium in New England, Kiam decided that it was necessary to consider moving the Patriots to another region of the country.Kiam claims that before buying the team he had received assurances from then-Commissioner Pete Rozelle that if a new stadium could not be secured in New England, such a move would be allowed.
At the time Kiam began to seek the Patriots' relocation, several cities were attempting to obtain NFL franchises. Because few new franchises were being created, groups in many of these cities sought to lure existing teams. One such group was Touchdown Jacksonville, Inc. ("TJI"), created "[t]o secure the NFL franchise for the City of Jacksonville." In the Spring of 1991, representatives of VKK and TJI held a series of meetings about the possibility of relocating the Patriots to Jacksonville.
Representatives of TJI informed the NFL of their meetings with VKK and indicated that they were close to a deal that would bring the Patriots to Jacksonville. As to the plan, TJI told the NFL, according to testimony of the NFL Director of Planning, that "we are going to do what you tell us to do." The NFL told TJI, according to a TJI consultant involved in the negotiations, that the NFL "did not favor the move," and that if TJI wanted the support of the NFL, which TJI needed to procure a franchise, it should cease negotiations with the Patriots. As a result of the NFL comments, the consultant testified, TJI "ceased pursuing discussions with the Patriots."
Several months later, in the fall of 1991, a new Touchdown Jacksonville entity was created: Touchdown Jacksonville, Ltd. ("TJL"). The president of TJI, David Seldin, was also the president of the corporate general partner of TJL. Seldin testified that in October of 1991, TJI "transferred some of its assets to [TJL] to enable [TJL] to seek an NFL expansion franchise for the city of Jacksonville." In November 1993, the NFL awarded an expansion franchise to TJL, which then changed its name to Jacksonville Jaguars, Ltd.3
In 1991, Kiam informed Commissioner Tagliabue that Kiam was financially compelled to move the Patriots out of New England. Tagliabue responded that he opposed such a move and that the Patriots would not be allowed to...
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