Sports Law Cases Outline
Disputes involving sports tend to have high stakes. They may implicate diverse fields of law, ranging from contracts and labor law to antitrust, discrimination, and intellectual property. Courts have shaped the rights and obligations of leagues, teams, players, agents, and other members of the sports world. Below is an outline of key cases in sports law with links to the full text of virtually every case, provided free by Justia.
Commissioner Authority
When commissioners of professional sports leagues act within the scope of their authority, they generally receive substantial deference from courts. However, their authority is not limitless. For example, arbitrators may be able to review some player disciplinary matters.
Charles O. Finley & Co., Inc. v. Kuhn 一 The MLB Commissioner has been given broad power to investigate any act, transaction, or practice not in the best interests of baseball, to determine what preventive, remedial, or punitive action is appropriate in the premises, and to take that action.
NBA v. NBPA 一 The NBA Commissioner retains exclusive authority over discipline for misconduct “on the playing court,” but fighting with a fan is not conduct “on the playing court.”
Discrimination in Sports
Gender inequities in sports may trigger challenges under Title VII of the Civil Rights Act or the Fourteenth Amendment equal protection and due process doctrines. The Americans With Disabilities Act may support accommodations for athletes with disabilities.
Postema v. National League of Professional Baseball Clubs 一 When a league did not hire or promote any umpires during the relevant time period, either male or female, a female applicant could not show that she was treated differently than male applicants and thus did not make out a prima facie case of discrimination in hiring or promotion. However, if a league takes discriminatory action that causes another employer to terminate one of its employees, the league may be liable under Title VII.
Ludtke v. Kuhn 一 The total exclusion of women sports reporters from the locker room at Yankee Stadium violated equal protection and due process. A female reporter has a right to be free of discrimination based on her sex and a fundamental right to pursue her profession.
PGA Tour, Inc. v. Martin 一 The Americans With Disabilities Act protects access to professional golf tournaments by a qualified entrant with a disability. Moreover, a contestant with a disability may not be denied the use of a golf cart, since it would not fundamentally alter the nature of the tournaments to allow them to ride when other contestants must walk.
Contracts in Sports
Disputes over contracts may involve the duration of a contract or issues related to signing bonuses and other incentives. A court may issue a negative injunction to prevent an athlete from breaching a contract, since the uniqueness of their services makes specific performance more appropriate than damages.
Sample v. Gotham Football Club, Inc. 一 Three contracts between an athlete and a team did not relate to the same subject matter because each pertained to a different football season, which meant that they called for performance at different times. Thus, these were considered three separate contracts.
Rooney v. Tyson 一 An oral personal services contract between a fight trainer and a boxer to last for as long as the boxer fights professionally provided a definite, legally cognizable duration.
Alabama Football, Inc. v. Stabler 一 While generally a party is not entitled to a judgment rescinding a contract when they make no offer to restore the money that had already been paid to them under the contract, a football player was under no obligation to restore the money paid to him because the team had benefited from the fact that he had signed a contract to play football with it, even though he had not yet played a game for the team.
Central New York Basketball, Inc. v. Barnett 一 Professional players in the major baseball, football, and basketball leagues have unusual talents and skills and are not easily replaced. Thus, a team may receive an injunction to prevent its player from playing for another team during the term of their contract.
Boston Celtics LP v. Shaw 一 In deciding whether to issue a preliminary injunction enforcing an arbitration decision ordering an athlete not to play for any other team during the term of their contract with a certain team, a court must consider whether the team has shown a likelihood of success on the merits, whether a failure to issue the injunction would cause irreparable harm to the team, whether the balance of harms favors the athlete or the team, and whether granting the injunction will harm the public interest.
Washington Capitols Basketball Club, Inc. v. Barry 一 It is not contrary to public policy or state law for a contract between a player and a team to provide the team with the right to assign the contract to any other team in the league and require the player to accept the assignment.
Duties of Sports Agents
Agents may represent athletes in contract negotiations, business opportunities, and money management. Few minimum standards of competence or expertise apply to agents, although they can be held accountable for mishandling conflicts of interest and other forms of fraud.
Zinn v. Parrish 一 The obligations of an agent under a contract with an athlete are subject to an implied promise to make good-faith efforts to obtain what they seek. These efforts constitute full performance of their obligations.
Brown v. Woolf 一 If elements of recklessness or oppressive conduct are demonstrated, punitive damages could be awarded in a constructive fraud action against an agent.
Detroit Lions, Inc. v. Argovitz 一 Once it has been shown that an agent had an interest in a transaction involving an athlete that was antagonistic to the athlete’s interest, fraud on the part of the agent is presumed. The agent must show that the athlete had full knowledge of every material fact known to the agent that might affect the athlete and that the athlete freely consented to the transaction.
Rights of Privacy and Publicity
While famous athletes are celebrities, they still have a right to privacy. They also have a right of publicity, which is a property right in the value of aspects of their identity. This right can conflict with First Amendment protections for freedom of expression.
Palmer v. Schonhorn Enterprises, Inc. 一 Although the publication of biographical data of a well-known athlete does not per se constitute an invasion of privacy, the use of that same data for the purpose of capitalizing on the name by using it in connection with a commercial project other than the dissemination of news, articles, or biographies does.
Gautier v. Pro-Football, Inc. 一 While someone who is a public figure or who is presently newsworthy may be a proper subject of news or informative presentation, the newsworthiness privilege does not extend to the commercialization of their personality through a form of treatment distinct from the dissemination of news or information.
Hirsch v. S.C. Johnson & Son, Inc. 一 A cause of action for the appropriation of a person’s name for trade purposes protects primarily the property rights in the publicity value of aspects of a person’s identity. Protection of the publicity value of one’s name is supported by public policy considerations, such as the interest in controlling the effect of commercial uses of one’s personality on one’s reputation and the prevention of unjust enrichment of those who appropriate the publicity value of someone else’s identity.
ETW Corp. v. Jireh Publishing, Inc. 一 The right of publicity is fundamentally constrained by the public and constitutional interest in freedom of expression. When artistic expression takes the form of a literal depiction or imitation of a celebrity for commercial gain, the right of publicity outweighs First Amendment interests. In contrast, when a work contains significant transformative elements, First Amendment interests outweigh the right of publicity.
NBA v. Motorola, Inc. 一 A hot news misappropriation claim under state law is limited to cases involving the following five components: a plaintiff generates or gathers information at a cost, the information is time-sensitive, a defendant’s use of the information constitutes free riding on the plaintiff’s efforts, the defendant is in direct competition with a product or service offered by the plaintiff, and the ability of other parties to free ride on the efforts of the plaintiff or others would reduce the incentive to produce the product or service to the point that its existence or quality would be substantially threatened.
CBC Distribution & Marketing, Inc. v. MLB Advanced Media LP 一 The use of baseball players’ identities in fantasy baseball products for purposes of profit violated the players’ rights of publicity under state law, but the First Amendment trumped the state law right of publicity.
Doe v. TCI Cablevision 一 If a product being sold predominantly exploits the commercial value of an athlete’s identity, that product violates the right of publicity and is not protected by the First Amendment, even if there is some expressive content in it that might qualify as speech in other circumstances. On the other hand, if the predominant purpose of the product is to make an expressive comment on or about an athlete, the expressive values could be given greater weight.
Antitrust Principles in Sports
Professional sports other than baseball fall under antitrust laws, such as the Sherman Act. Section 1 of the Sherman Act prohibits agreements that create unreasonable restraints on trade, while Section 2 prohibits monopolization.
NCAA v. Board of Regents of University of Oklahoma 一 A per se rule was not applied to an NCAA television plan that constituted horizontal price-fixing and output limitation, even though these restraints normally would be illegal per se, since this case involved an industry in which horizontal restraints on competition are essential if the product is to be available at all. (However, the plan still violated Section 1 of the Sherman Act under the rule of reason.)
Chicago Professional Sports LP v. NBA (Bulls I) 一 When a sports league is a joint venture, the rule of reason supplies the framework for antitrust analysis.
International Boxing Club v. U.S. 一 Championship boxing is the “cream” of the boxing business and is a sufficiently separate part of the trade or commerce to constitute the relevant market for Sherman Act purposes.
Twin City Sportservice, Inc. v. Charles O. Finley & Co., Inc. 一 Substitutability in production refers to the ability of firms in a given line of commerce to turn their productive facilities toward the production of commodities in another line because of similarities in technology between them. When the degree of substitutability in production is high, cross-elasticities of supply also will be high, and the two commodities in question should be treated as part of the same market.
Hecht v. Pro-Football, Inc. 一 The relevant geographic market is the area of effective competition, which is the area in which the seller operates and to which the purchaser can practicably turn for supplies. When the relevant competitive market covers only a small area, the Sherman Act may be invoked to prevent unreasonable restraints within that area.
The Baseball Exemption
The Supreme Court has ruled that professional baseball is not subject to the Sherman Act, and Congress has not reversed this decision by statute. However, courts have limited this holding to certain aspects of baseball.
Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs 一 The business of providing public baseball games for profit between clubs of professional baseball players is not within the scope of the federal antitrust laws.
Toolson v. New York Yankees, Inc. 一 If there are evils in the field of professional baseball that now warrant application to it of the antitrust laws, it should be by legislation.
Flood v. Kuhn 一 The longstanding exemption of professional baseball from the antitrust laws is an established aberration in light of the Court’s holding that other interstate professional sports are not similarly exempt. However, Congress has acquiesced in the exemption, and it is entitled to the benefit of stare decisis.
Henderson Broadcasting Corp. v. Houston Sports Ass’n, Inc. 一 The baseball exemption covers only those aspects of baseball, such as leagues, clubs, and players, that are integral to the sport and not related activities that merely enhance its commercial success.
Piazza v. MLB 一 The exempted market includes the reserve system and matters of league structure.
Butterworth v. National League of Professional Baseball Clubs 一 Baseball’s antitrust exemption extends only to the reserve system.
MLB v. Crist 一 The antitrust exemption for baseball does not immunize the dealings between professional baseball clubs and third parties.
Player Restraints
Leagues may try to restrict the ability of players to move between teams or their eligibility to participate in the sport, which may result in antitrust challenges. Courts generally have applied the rule of reason to restraints imposed by leagues, rather than finding per se violations.
Kapp v. NFL 一 In this particular field of sports league activities, the purposes of the antitrust laws can be just as well served (if not better served) by the basic antitrust reasonableness test as by the absolute per se test sometimes applied in other fields. However, league enforcement of most of the challenged rules in this case was so patently unreasonable that there was no genuine issue for trial.
Mackey v. NFL 一 Restraints on competition within the market for players’ services fall within the ambit of the Sherman Act. Moreover, the Rozelle Rule unreasonably restrained trade in violation of Section 1 of the Sherman Act under a rule of reason analysis.
Molinas v. NBA 一 A rule, and a corresponding contract clause, providing for the suspension of those who place wagers on games in which they are participating is not only reasonable but necessary for the survival of the league.
Clarett v. NFL 一 The NFL eligibility rules are immune from antitrust scrutiny under the non-statutory labor exemption.
Owner and League Restraints
Antitrust laws may support challenges to rules and policies regarding cross-ownership of teams in multiple leagues, the relocation of franchises to new markets, and the transfer of ownership interests in a team. Sometimes leagues try to avoid antitrust liability by arguing that they operate as a single entity.
North American Soccer League v. NFL 一 An NFL ban on cross-ownership by NFL members of other major professional sports league teams violated the rule of reason under Section 1 of the Sherman Act.
Los Angeles Memorial Coliseum Commission v. NFL (Raiders I) 一 While the NFL clubs have certain common purposes, they do not operate as a single entity. Meanwhile, there was ample evidence for a jury to find that a rule requiring three-quarters approval by the members of the NFL for a move into another team’s home territory harmed competition among the 28 teams to such an extent that any benefits to the NFL as a whole were outweighed.
NBA v. SDC Basketball Club, Inc. 一 The Raiders I panel set down no absolute rule for sports leagues, and franchise movement restrictions are not invalid as a matter of law.
Sullivan v. NFL 一 The question of whether competition exists among NFL teams for the sale of their ownership interests, such that the NFL’s ownership policy injures this competition, is a question of fact. Meanwhile, even if a given practice among joint venture participants is ancillary to legitimate and efficient activity, the injury to competition must still be weighed against the purported benefits under the rule of reason.
Chicago Professional Sports LP v. NBA (Bulls II) 一 When acting in the broadcast market, the NBA is closer to a single firm than to a group of independent firms.
Mid-South Grizzlies v. NFL 一 A claim under Section 1 of the Sherman Act could not succeed when there was no actual or potential injury to competition resulting from the rejection of an application for an NFL franchise.
American Needle, Inc. v. NFL 一 Each NFL team is a substantial, independently owned, and independently managed business, whose objectives are not common. When the teams formed an entity to develop, license, and market their intellectual property, that entity’s decisions about licensing the teams’ separately owned intellectual property were concerted activity and covered by Section 1 of the Sherman Act.
Madison Square Garden LP v. NHL 一 The owner of an NHL team was not entitled to a preliminary injunction against the NHL’s effort to ban the team from operating an independent website.
The Labor Exemption
Complementing provisions of the Clayton Act, a non-statutory labor exemption provides that a union-management agreement that was a product of good-faith negotiations cannot be challenged as collusive or anti-competitive under antitrust laws.
Mackey v. NFL 一 The labor policy favoring collective bargaining may be given pre-eminence over antitrust laws when the restraint on trade primarily affects only the parties to the collective bargaining relationship. Moreover, federal labor policy is implicated sufficiently to prevail only when the agreement sought to be exempted concerns a mandatory subject of collective bargaining. Finally, the policy favoring collective bargaining is furthered to the degree necessary to override antitrust laws only when the agreement sought to be exempted is a product of bona fide arm’s length bargaining.
Powell v. NFL 一 The non-statutory labor exemption protects agreements conceived in an ongoing collective bargaining relationship from challenges under the antitrust laws. As long as there is a possibility that proceedings may be commenced before the National Labor Relations Board, or until the final resolution of NLRB proceedings and related appeals, the labor relationship continues, and the labor exemption applies.
Brown v. Pro Football, Inc. 一 When football team owners had bargained with the players’ union over a wage issue until they reached an impasse, and the owners then agreed among themselves (but not with the union) to implement the terms of their own last best bargaining offer, federal labor laws shielded such an agreement from antitrust attack.
Collective Bargaining and Arbitration in Sports
Collective bargaining agreements in sports leagues address issues such as salaries, roster sizes, season length, drafts, free agency, player discipline, drug testing, health benefits, and more. Some topics are mandatory, while others are permissive. Collective bargaining agreements often provide that arbitration will resolve grievance, salary, and contract disputes.
North American Soccer League v. NLRB 一 A collective bargaining unit comprised of all NASL players on clubs based in the U.S. was appropriate.
Silverman v. MLB Player Relations Committee, Inc. (1981) 一 Comments by several club officials and the MLB Commissioner were not statements of policy on behalf of the Player Relations Committee that would support a claim of inability to pay.
Morio v. North American Soccer League 一 The duty to bargain with the union arises from the time that the union is certified as the exclusive bargaining representative of the players. Unilateral changes in the terms and conditions of employment after that date may violate the employer’s obligations to bargain with the exclusive bargaining representative.
Silverman v. MLB Player Relations Committee, Inc. (1995) 一 During the interim between agreements, the parties must honor the terms and conditions of the expired contract that involve mandatory subjects of bargaining, at least until the parties reach a good-faith impasse. A unilateral change of an expired provision on a mandatory topic is an unfair labor practice, since it violates the duty to bargain collectively in good faith.
Major League Baseball Players' Ass'n v. Garvey 一 Courts are not authorized to review an arbitrator’s decision on the merits despite allegations that the decision rests on factual errors or misinterprets the parties’ agreement. Even a serious error on the arbitrator’s part does not justify overturning their decision when they are construing a contract and acting within the scope of their authority.
Miami Dolphins Ltd. v. Williams 一 The three non-statutory bases for vacating an arbitration award are when the award is arbitrary and capricious, its enforcement is contrary to public policy, or it evinces a manifest disregard for the law.
NCAA Violations
The National Collegiate Athletic Association imposes strict rules that aim to preserve amateurism among student athletes. Violations of these rules can result in legal consequences extending beyond NCAA sanctions.
Walters v. Fullwood 一 When agreements violated the NCAA Constitution, the observance of which is in the public interest of the citizens of New York State, the parties to those agreements knowingly betrayed an important public trust. Thus, rights related to the agreements were unenforceable as contrary to public policy.
U.S. v. Piggie 一 A scheme to deprive a university of its right to the honest services of college basketball players is within the definition of mail and wire fraud, even if it results in a winning basketball program.
This outline has been compiled by the Justia team for solely educational purposes and should not be treated as an independent source of legal authority or a summary of the current state of the law. Students should use this outline as a supplement rather than a substitute for course-specific outlines.
