Outline I. College and Olympic Sports A. Amateur athletes 1. historical def: amateurs pay to play 2.

Amateurism really only exists in high school and college athletics 3. Background of NCAA (3 divisions) a. Basic governing structure of NCAA divided into 3 (really 4 subgroups) i. Div I (divided for football reasons) o Div Ia big football schools o Div Iaa small football schools ii. Div II iii. Div III b. scholarship rules i. max # per sport: only cover tuition, fees, room and brd; any benefit beyond this can render athlete ineligible; Are college athletes on a full ride professionals? c. eligibility i. allowed 4 seasons of competition, must be completed w/in 5 years ii. freshman eligibility: must meet certain requirements iii. can be professional in one sport and not another and still have eligibility d. Recruiting i. Heavily regulated: who can contact, how often can contact; what materials can be sent ii. High school athlete allowed 5 paid recruitment visits, cant receive any additional benefit e. Practice limits i. vary depending on whether in/out of season f. Doping control i. Schools responsible for making sure football & baseball players available for testing g. NCAA is legally considered to be a private organization, no govt reg 4. Olympic Movement a. IOC governs entire structure: power comes from who gets to have a sport at Olympics i. IF International Federation: each sport has its own governing body ii. NOC National Olympic Committee: each country has its own governing body o NGB National Governing Body of each sport: must follow all rules of IOC, NOC, NGB o NADA: national anti doping agencies: enforce WADA iii. WADA world anti doping agency: oversee doping control b. NOC legally considered to be a private organization, no govt reg 5. Contractual Nature a. Collegiate world & Olympic movement are contractual in nature; athletes agree to all terms & conditions of K in exchange for being allowed to compete i. Occasionally public law steps in: in US, Amateur Sports Act o Act gives athletes certain minimum rights B. Athletes rights 1. Right v. Privilege: Is there a right to participate in sports, or is it a privilege? a. Basic presumption is that participation is a privilege 2. Breach of K claims: a. Reasonable academic performance (Taylor v. Wake Forest) i. Most Scholarships are Ks for academic and athletic performance; Ks are regulated by NCAA regs, bulletin, etc; athlete couldnt determine academic performance on own, school generally gets to decide what qualifies as reasonable academic performance, not athlete b. For a breach of K to exist the student must allege more than insufficient education (Ross v. Creighton) c. Financial aid agreements dont amount to K right to play (Jackson v. Drake) i. Cts dont recognize educational malpractice claims for policy reasons

d. Fraud claims may stand if athlete relied on promises made about educ & tutoring support
MySpace problems a. Some schools prevent athletes from having postings on MySpace; is this ok depends on if participation is a right v. a privilege; and who is imposing the restriction i. not a violation of 1st Am rights, if restriction imposed by private institution (i.e. Loyola, Valpo) ii. might be a violation if done by state schools, b/c it is a state actor C. Coaches Contracts 1. 2 situations: a. Negotiating coaches K b. When coach is fired 2. Perquisites: (Rodgers v. GA Tech) a. Coach may be reimbursed for things that were personal benefits (anything w/ direct accrual); but not for things that were tools to perform job (i.e. secretary) b. Depending on understanding of parties may or may not need to specify these benefits in K 3. Reassignment of individuals a. School can reassign individuals based on assessment of staffing needs (Monson v. Oregon) b. Public v. Private schools: more restrictions on state schools & coaches have more rights during hiring/firing process i. Due process may apply 4. Things to consider when negotiating Ks for college coaches a. length b. compensation c. duties (grad rate, fundraising, following NCAA rules, answer to, etc) d. reassignment e. liquidated damages (if coach leaves for better situation) f. reasons for fire g. outside income h. supervise assistants i. fringe benefits D. Constitutional Protections (Amateur Sports Associations: Rules, Procedures, Eligibility and other Issues) 1. State Actor v. Private Actor a. If can prove state action then broader range of protections exist b. Test for state action i. Joint action: 3 things must be proven to show joint action o 1) Legal frame work; (2) Delegation of authority (3) Accepting benefits ii. Close Nexus: actions of private group need to be attributed to state by showing state control; must show private entity is an agent of govt and govt must approve its decisions iii. Possible 3rd test: entwinement o Interactions must be so that private association and govt are truly entwined together o School athletics have an educational component, making them a public function 2. State action related to Olympic & NCAA athletes a. Olympic sports: is USOC/USADA a state actor (2 theories) i. No joint action if no funding ii. And no joint action if governing body (i.e. USOC) has exclusive jurisdiction b. College sports: i. No joint action regarding NCAA b/c NCAA creates framework, not govt 3. Old exam Q: why have state HS athletic assoc been found to engage in state action, but NCAA has not a. Tarkanian is major case: i. Ct said NCAA not a state actor b/c its members are from many different states, thus NCAA cant be state actor of single state since it has nationwide membership focus is on collective membership ii. Ct noted that it would be different if all members were from same state created justification for finding state action in HSAA 3.

o However, even if all members from same state, must still show: joint action; close nexus; or entwinement o Tests for state action met regarding HSAA b/c HSAA controlling bodies comprised of public school
officials and there is delegation/control over a function that public schools would normally carry out E. NCAA Enforcement 1. Freshman eligibility a. Requirements i. Qualifier: student who meets core course and GPA/standardized tests requirements o 14 core courses o Minimum GPA and standardized test scores ii. Non-qualifier o Student who hasnt graduated from high school, or does not meet either GPA or standardized test scores o Non-qualifiers may not attend practices or team meetings b. NCAA rules that a are discrim on their face (Pryor) i. Rules that have the effect of limiting those eligible for admittance based on race are facially unconstit (i.e. rules aimed at producing higher grad rates for blacks unconstit b/c result in fewer blacks getting athletic scholarships) 2. NCAA Enforcement a. Staff Investigation i. Why would an institution self report o To reduce the severity of the penalties for non-compliance o NCAA expects schools to cooperate and not act in an adversarial fashion ii. If not self reported how does NCAA find out o Reporters inform media; Anonymous tips (from competition or others) iii. if info is reasonably substantial, institution will be informed that a preliminary investigation is under way o NOTE: if NCAA informs school athlete is investigated best thing to do, is w/hold athlete from competition b. Preliminary Investigation i. Institution is presumed guilty and has to prove its innocence ii. People notified of investigation are institution president, & individuals involved in infraction iii. Following prelim investigation process can go in one of 3 ways o Case can be closed for lack of evidence; or o Major violation can be found and summary disposal discussions begin w/ school; or If major violation NCAA serves Official Inquiry on CEO of institution to begin a Formal Investigation Before this, school will usually hire independent outside counsel to conduct internal investigation If school disagrees w/ violation it may appeal to the Infractions Appeals Committee o Secondary violation may be found and appropriate penalties then discussed and imposed If school disagrees w/ secondary violation it may appeal to VP of NCAA staff c. Official Inquiry i. Burden of proof is on institution to show why addl penalties should not be assessed d. Infractions Appeal Commission i. To argue penalty go to NCAA past decisions data banks, this is very difficult to do e. Classification Infraction i. Major: all violations that arent secondary, or multiple secondary violations ii. Secondary: violation that is isolated or inadvertent in nature; provides only minimal advantage, and doesnt include any significant recruiting inducement or extra benefit f. Penalties see rules handout (enforcement, rule 19.5) i. Secondary o (1) Termination of recruitment of prospect; (2) forfeit matches in which ineligible athlete competed; (3) bar coaching staff from off-campus recruiting; (4) fines; (5) limit # of fina aid awards available; (6) suspension of coaching staff (7) public reprimand ii. Major: o (1) public reprimand; (2) probation; (3) reduction in # of fina aid awards; (4) prohibition against recruitment; (5) individual or team awards/records may be stricken; (6) financial penalty; (7) no TV coverage; (8) no postseason eligibility

Ethical Conduct: Article 10 a. All participants in collegiate athletics must act honestly at all times, to represent the honor and dignity of fair play associated w/ competitive sports b. Gambling Activities, 10.3: i. Individuals associated w/ athletics department must not knowingly o Give info to individuals involved in organized gambling activities concerning college competition o Solicit a bet on any team o Accept a bet on any team representing school o Solicit/accept a bet on any intercollegiate competition for any item that has tangible value o Participate in any gambling activity that involves intercollegiate or professional athletics using any method employed by organized gambling (i.e. booky, parlay card, etc) ii. NCAA manual is very ambiguous regarding what is permitted and what is not 4. Attorneys role a. When school charged w/ major violation, definitely higher outside counsel to conduct investigation i. rules that apply here are not grounded in reality; must keep communication lines open w/ enforcement staff; keep media in the loop; fashion plan that shows how youll control staff F. High School Eligibility 1. Due process analysis a. State action b. Trigger i. To get a full analysis an athlete must show o he was treated differently that those similarly situated, o some sort of property or civil interest at stake ii. However, there are no rights to play sports c. Was state action arbitrary and capricious 2. Equal protection analysis a. Classification of a transfer student i. 2 elements o Must be distinct group All that transfer from one district to another without parents o Some rational basis for distinguishing this group Used to deter school jumping and recruiting Treat all within the group the same Everyone was treated the same within the group G. Gender Equity 1. Equal protection analysis/elements: (Hoover & Williams) a. Intermediate scrutiny applies i. Important govt interest for preventing one sex from being involved, and ii. Methods must be substantially related to achieving that interest o interest cant just be to protect girls, b/c girls must be permitted full participation in educational programs o however, if there are actual physical differences b/t sexes and classification based on sex is only way to ensure a team will remain all one sex, then standard may be met b. Exclusions under EP i. it is not ok to exclude one sport from determining equal # of opportunities for both sexes, even if not excluding means that many other sports will need to be created for opposite sex ii. ok to allow 1 sport to retain own revs b/c it provides incentive to all sports to develop rev-generating capability of their own c. Separate but Equal is okay regarding gender equality as long as it doesnt result in stigmatizing one group 2. Remedies: a. athletics is not a fundamental right, thus cts wont order that there be male and female teams; but if the school opts for having sports it must do so equally so school must provide: i. Either separate teams for males & females, or allow girls to play on boys teams

3.

3. Title IX - Statutory remedy separate from constitutional claims

a. OCR Policy: programs dont have to be identical but opportunities must be similar/equivalent, things should be fair i. Title IX is applicable to universities b/c they receive federal funding o only need to touch fed funds for a moment and you are governed by Title IX (Horner v KHSAA) ii. Civil Rights Restoration Act o Following Grove City (where ct said Title IX applied only to particular programs) Congress extended full reach of Title IX to all programs of any institution of public school that accepts federal funding iii. Monetary damages are available in actions pursuant to Title IX (Franklin) OCR Enforcement Areas i. Athletic financial assistance ii. Equivalency in other athletic benefits and opportunities iii. Effective accommodation of student interests and abilities Test for Equal Opportunity i. Individual sport equivalents (i.e. baseball to softball) o If theres a team for 1 sex & limited ops for the other then need to offer same equivalent op to other sex ii. Program test (3 prong test): o (1) Proportionality: what % of athletes are women, what % of student body is women

b.

c.

4.

following proportionality scheme is not a quota system b/c substantial proportionality is just 1 factor to look at o (2) History of trying to expand: to give opportunities to underrepresented sex; If off on proportionality, you may still meet Title IX if this applies o (3) Effectively Accommodate: (P seeks to show unmet interest) if disproportionate and historic expansion attempted institution must show that the interests and abilities of the members of that sex have been effectively accommodated by current program Disproportionality is not enough, but must show unmet interest Would cause quotas There must be historical discrim against one sex and an unmet interest o plaintiff starts out w/ burden must show proportionality is not equivalent o then burden falls to D to show historic expansion or effectively accommodating d. Relative interest arg (discrim ok b/c women have less interest) is invalid b/c Title IX is designed to remedy discrim e. Analysis: (Pederson v. LSU) i. Must prove that specific team discriminated against o Must show that there was a comparable sport for other sex o Then show disproportionality o Must show theres an interest: party is able & ready to compete (expression of interest in sport is enough) o If theres request for specific sport there must be sufficient competition w/in region school normally competes in ii. Prove intent to discriminate o To show violated Title IX just need to show that women were treated differently Old exam Q: Why wont cts impose a remedy if it finds a university violated Title IX and what compliance options are available to school: a. Cohen v. Brown reasons why ct wont impose remedy i. School is in better position to fashion remedies that are feasible for school to accomplish; ii. Sports have educational element iii. Cts defer to schools need to control education process iv. Schools have better understanding of student body, alumni, and finances b. School has 3 major options for compliance: i. Cut positions from over represented sex ii. Eliminate athletics completely iii. Increase opportunities for under-represented sex iv. Ultimate goal is to have opportunities substantially proportionate to enrollment of sex to meet Title IX

o school meets Title IX if it can show history of expansion for under-represented sex; or o if no historical expansion interest of underrepresented sex has been effectively accommodated
II. Professional League Sports A. Business Model 1. League 2. Tour: i.e. golf, tennis a. Players participants are entitled to be part of tour by qualifying 3. Open Event: everything else; individual events where athletes try to earn prize money B. League: baseball, football, etc 1. Contract a. Look to league bylaws, constitution, collective bargaining agreement b. K define common controls 2. Common control a. Over revenues, expenses, broadcasting rights, licensing for merchandise 3. Teams a. They are the member of the league b. In most situations they retain some autonomy i.e. what business approach it will 4. Self contained a. Legislation maintain own rules for regulations b. Dispute settlement own internal discipline and dispute settlement process 5. Challenge K, system a. Although there are internal processes for resolving disputes sometimes outside challenges arise when unhappy w/ how internal regs handle issue b. Arise in 2 ways: i. Use rules of K to go to ct and arg rules arent being properly applied 2nd guess of how league decides things ii. Mandatory laws: laws cant K out of i.e. antitrust C. Anti-trust exemption 1. Sherman Act: intended to preserve free/open market competition, not individual competitors 2. Threshold interstate commerce 3. 2 Activities prohibited a. Agreements/conspiracies that restrain trade i. Looking for something that harms consumers b. monopolization of a particular market 4. Reserve Clause a. Background i. 1879 o 1st implemented b/c of competition b/t teams for players, drove up salaries; resulted in allowing each team to reserve 5 players per team so they couldnt be stolen o Initial reason was to keep salaries down ii. 1883 o Natl agrmt signed b/t existing teams & # of players reserved went from 5 to 14, also put in players K that they are reserved player iii. 1890 o Beginnings of players union, but it was powerless iv. 1922 o Federal baseball exclusion exempts baseball from antitrust suits v. 1970-75 o Flood pushes reserve clause towards a matter of collective bargaining o Messersmith arb: arbitrator asked to rule on reserve clause, said there has to be some limit on reserve clause leads to CBA vi. 1976 o Concept of free agency comes about becomes a part of CBA vii. Option clause

o Differs from reserve clause NFL/NHL others use as a way of accomplishing reserve clause to a degree,
allow teams to have 1st rights to players, a restriction on free agency to protect teams b. Old exam Q: if an anti-trust claim is brought against pro league when is rule of reason analysis applied, and what are steps in rule of reason analysis i. Under Sherman Act 1st must show existence of an agreement b/t 2 entities that harms/restrains trade and actually caused injury o There may be per se violations (i.e. price fixing); but theyre rare o Rule of reason analysis applied If no per se violation ii. steps in rule of reason analysis o this is basically a balancing test b/t competitive and anti-competitive effects o ct also looks to see if there are less restrictive alternative o to determine effect ct must determine what the market is (geographical or product) in determining market ct looks at interchangeability and cross elasticity of demand o once market is determined will balance harms to competition v. benefits o regarding leagues its hard to determine b/c teams compete against each other but at the same time work together to have viable competition/league D. Modern Scrutiny of the Exemption 1. BB as interstate commerce: Flood v. Kuhn a. Federal Baseball i. Ct looked at threshold Q, is BB interstate commerce; ct said not exactly bus thus not engaging in interstate commerce, just putting on exhibitions, crossing state lines was only incidental; b/c not interstate commerce it was exempted b. Toolson i. Ct again affirmed exemption for 2 reasons: (1) b/c Cong was aware of status of BB and it did nothing, so defer to Cong; (2) BB developed a detrimental reliance system that rests on reserve clause, if take exemption away would cause all kinds of problems, Ct deferred to Cong to draft a solution c. Shubert i. Antitrust action against promotion of theatrical attractions throughout US, Ct said exemption only applies to BB, not to any other types of exhibitions; Ct upheld exemption on stare decisis d. Radovich i. Other pro sports werent able to have same anti-trust exemption as BB, e. Results from Flood i. Ct said BB is interstate commerce ii. Fed BB exemption limited only to BB iii. Fed BB still has some stare decisis value iv. Since Cong has known about Fed BB exemption and has not done anything about exemption, then it is ok and only Cong may change exemption f. Result from Flood was to uphold Fed BB exemption only to Reserve Clause; but if 7th Cir is right and it does apply to business of baseball (specific market) Ct then analyzed that issue g. Dissent i. Douglas o If Ct originally made the mistake we should fix it; if Cong wont fix it, Ct should; Ct has auth to fix o victims of reserve clause: cant practice trade so it is a restraint on players ii. Marshall o Discusses economic freedom that players being denied is taking away players personal rights/freedom, only Cong can take those away, not Ct Cong hasnt expressly done so, thus Ct should reverse 2. Reserve Clause applied to business of baseball (Piazza v. MLB) a. Still must let BB have an exemption even though underlying reasoning (not interstate commerce) for exemption no longer exists b. Specific Market i. Market anti trust anti trust applies to specific markets ii. Fed BB market

o Ct interpreted business of baseball and Fed BB exemption to only apply to the games market of baseball,
not other aspects of the BB market iii. market does not include market to buy and sell teams, but relocation of teams might fit into games market of BB c. Piazza v. MLB: i. P allege that MLB and an affiliated individual frustrated their efforts to purchase San Fran Giants and relocate it to Tampa. Ps charged Ds infringed upon rights under Constit & violated fed antitrust laws ii. P allege BB never intended to permit Giants to relocate to Florida and failed to evaluate fairly and in good faith their application to do so iii. P claim: BB placed direct/indirect restraints on purchase, sale, transfer, relocation of, & competition for teams iv. Ct concluded antitrust exemption created by Fed. BB limited to BBs reserve system, and b/c reserve system not in issue here BBs arg that its exempt from antitrust liability in this case is rejected v. market to which Federal Baseball exemption applies: o product: i.e. exhibition of BB o sellers: i.e. team owners, and o buyers: i.e. fans and, perhaps broadcast industry vi. physical relocation of a team and baseballs decisions regarding such a relocation could implicate matters of league structure, and thus be covered by the exemption 3. Curt Flood Act a. Act said anti trust act does apply to employment of Major League players b. Act did not speak/apply to Minor League player contracts, the way the Minor League system is set up, the buying, relocating, and merchandizing of minor league teams (doesnt mean anti trust doesnt apply to Minor League); left Reserve Clause in force regarding Minor Leagues c. Exemption Now i. Cong did not grant a specific anti trust exemption to BB in these areas, but Cong wont mess with exemption implemented by Cts; Cong really just saying that exemption does not apply to players Ks ii. Thus can still bring anti-trust claims against MLB in some areas E. League Decisions 1. Structure a. NFL example: has 2 entities i. Unincorporated i.e. Brd of Comm, Committees, Commissioner ii. Properties manages all profit making activities of NFL, makes things more efficient and maximizes profits (to leave to Brd would be problematic b/c of too many individual interests) 2. Membership Decisions Requirements a. Interference w/ Ks (Morsani v. MLB) i. Elements Tortious Interference (P must allege and prove) o Existence of business relationship o Intentional and unjustified interference w/ relationship by D o Damage to P as a result of breach of business relationship ii. Defense to tort of interference o If people bringing claim are parties to K; cant tortiously interfere w/ own K iii. Exception to defense o Can lose privilege by acting w/ malice iv. main thing to take is that product is broader than individual teams it is right to play other teams; so ct will look at other teams when making anti trust decisions o product of entertainment: membership rights, etc b. arbitrary and capricious acts (New Orleans Pelicans) i. Elements o Rule violations o Must be arbitrary & capricious

If acts of D are arbitrary and capricious P will be entitled to specific performance

ii. ct misapplied challenge for arbitrary and capricious

c. Elements of anti-trust claim (Piazza v. MLB)

i.

d. e.

Need to ID particular market in which competition is being harmed ii. MLB is a market, and it was being harmed b/c team was later sold to another buyer for a lesser amt Anti trust law and players (Levin v. NBA) i. Anti trust law protects competition; it does not protect individual competitors ii. league is not market it is just an organization, b/c there were rules that could not be violated, thus precluded sale Ownership in multiple leagues (North American Soccer v. NFL) i. NFL structure v. Soccer structure o Soccer brought claim b/c said NFL rule to require NFL owners to sell shares in soccer violated antitrust law Parties were fighting over capital investors market was capital o NFL worried about soccer taking its fans and support basis ii. Sherman Act prohibits agreements and conspiracies to restrain trade iii. Types of violation o Per se: plainly anticompetitive: i.e. limiting markets, price fixing, etc o Rule of Reason: inquiry into whether challenged agreement is one that promotes competition or one that suppresses competition, i.e., whether procompetitive effects of restraint outweigh anticompetitive effects iv. NFL defended ban saying it ensured loyalty of owners in competing against other leagues o Ct said no b/c NFLs long term success despite several cross ownership agreements proved ban was not necessary to accomplish expressed goal; nor was ban needed to protect confidential NFL info v. Market o There is a submarket for sports capital and skill o In sub market owners of major pro sports teams constitute a significant portion of market players o existence of submarket & importance of the function of existing team owners as sources of capital in that market are implicitly recognized by the defendants' proven intent in adopting the cross-ownership ban vi. Proof Necessary o Must show that any legitimate purposes could not be achieved through less restrictive means

3.

in absence of evidence that cross-ownership restrains or threatens competition b/t 2 leagues or their member teams, the mere common ownership of some teams and membership of some owners on league committees do not constitute a violation of the antitrust laws f. Old test Q: in what circ (other than negotiating w players union) can pro league be a single entity for anti trust purpose: i. if theres a complete unitary of interest then can be considered single entity ii. these occasions are rare since at core each team does compete against others iii. even if 1 league competing against another probably cant use single entity defense b/c would result in too many restrictions on sports iv. leagues might be able to argue single entity in relocation cases, since theyre needed for league survival v. might also be able to use single entity regarding merchandising Relocation a. Agreements w/in league (LA Coliseum v. NFL) i. Elements of anti-trust claim o Agreement among 2 or more persons (or distinct business entities) o Intended to harm or unreasonably restrain competition o And which actually causes injury to competition ii. Single entity def. o NFL says it is only 1 entity and individual clubs are not competing against each other; NFL says it is only producing entertainment, and must compete against other types of entertainment o Ct said no, NFL missing central control (single decision maker for all NFL activity) to create a single entity iii. Restrain Competition o NFL Rule 4.3 restrained movement of teams so it was a restraint iv. How agreements Cause Injury

o Market Tests for injury Product (real battle is over this): - Whether the team is marketing an entertainment product or something more specific i.e. football
high price of tickets and people not switching to other forms of entertainment showed that product was football, not just entertainment Geographic not that important o Harm v. Benefit There is a rational reason to dividing territories, even though that creates a harm v. Least Restrictive Means Factors o in the face of anti trust laws leagues must act in way that is least restrictive o Factors: population, economic projections, facilities, regional balance, etc. o Reasons NFL had for restricting movement were weak b/c LA was large enough to support 2 teams b. Restraints on movement (NBA v. SDC Basketball) i. Raiders per se o Ct said rule of reason analysis should govern ii. Factors: if a team bases decision on factors discussed in Raiders then decision is likely safe iii. Continues idea that leagues can restrain movement of teams & each case must be examined on case by case basis c. Prohibitions on negotiations due to league actions (St. Louis CVC v. NFL) i. Atmosphere o League may prevent various teams from entering into negotiations to move to a specific city out of fear of having to pay high NFL fees ii. Proof elements o Must be able to prove actual fear of other league teams from bidding o Must show they didnt bid due to anti-trust reasons other than other legitimate business reasons iii. Tagliabue believed NFL should not be subjected to anti-trust b/c marketing entertainment in form of sports and should be allowed to act and be treated as a single entity iv. Zimbalist o Why move: To augment profit and increase franchise value But current situation allows teams to do this w/o moving b/c leagues have created monopoly, so supply is kept just below demand; allows teams to extort local govts to treat them nicely or they will move o Monopoly o Stadiums construction Stadium has no greater impact than a department store o Economic benefit Of teams/stadiums is greatly exaggerated; not new revenue being spent, just diverting existing revenue May not be true if team draws in non local fans o Extortion (see above) o Remedies Create more supply by creating more teams Allow cities to buy teams that want to relocate Create national sports council that would regulate and decide which cities get franchises Merchandising/Broadcasting a. Merchandising and Trust agreements i. NFL Properties v. Cowboys: Cowboys tried to circumvent NFL trust (i.e. Pepsi, Amex allowed to use specific team logos) ii. Trust Agreement o Breach: Cowboys effort to circumvent NFL trust was close enough to a breach o Duty of good faith: breach of these would result in punitive damages (ct did not address it here) iii. Lanham Act -

4.

o Focus of test is are consumers being tricked into buying something that is not the original; damages and
right to protect that is the trademark holder o Must prove valid trade mark; and o That D intentionally exploited marks o Doesnt require exact trademark infringement iv. Misappropriations: monies that Cowboys earned from infringement should go to NFL v. Old exam Q: what needs to proved to show violation of trademark o Must show violation of Lanham act

To do so must show you are lawful owner of trademark and not alleged violator Must also show that unauthorized use of logo creates confusion among consumers could also argue tortious interference if team allowed violator to use logo

must show D knew of K, and D intentionally induced 3rd party to break K or render performance impossible (i.e. prevent league from honoring Ks) b. Broadcasting: i. Bulls v. NBA: NBA reqd clubs to transfer broadcast rights to NBA, to increase NBA revenues; NBA sold broadcast rights to NBC, what NBC didnt use went back to clubs ii. Sherman Act o Sec 1 prohibits conspiracy (2 or more parties getting together to restrict competition) o Sec 2 prohibits single actor from abusing power to restrict competition iii. Sports Broadcasting o In certain professional leagues, league will be allowed to violate Sherman Act when selling broadcasting rights o Exception: Protects leagues when dealing w/ national network, not working w/ local broadcast markets F. Authority of League Commissioners 1. Best interest power (Finley v. Kuhn) a. Commissioner has power to negate any deal if he believes it is not in best interest of baseball b. Ct said commissioner has unfettered authority to 2nd guess/change some conduct of owners that is otherwise permitted by rules of baseball c. Possible limitation at one point there was an express limitation but that is no longer the case 2. Arbitrary & capricious a. General rule cts very reluctant to look into these types of matters and wont decide if decisions are right/wrong i. Exception cts will only review decisions to make sure they are made in a procedurally fair manner ii. Decisions cant be arbitrary and capricious 3. leagues may have rule stating cant take any waiver recourse to cts a. rule is generally applicable but there are 3 situations where rule wont be applied i. if bargaining process is unequal ii. if it is forced upon you unknowingly, or iii. if it is as a result of fraud (did not knowingly accept clause) b. exceptions i. clause will stand but not in face of challenges to mandatory law; or if it is procedurally unfair c. thus commissioners have very broad powers 4. Should the commissioner be the final decision maker: (Pete Rose) a. Basic claim: Rose argued ok for commissioner to investigate but commissioner should not be final decision maker b/c he is biased b. Barry Bonds, suspended? i. Would commissioner have power under best interest of baseball to suspend Barry Bonds for supposed steroid use o According to Finley yes he does have power; but he probably should not invoke power c. CBA is other possible limit on commissioner power G. Labor Relations CBA Union CBA League

1. 2.

3. 4.

5. 6.

7.

Players K Owners CBA covers genl work related requirements w/in league a. Minimum working conditions, minimum compensation, length of CBA b. May deal w/ disciplinary matters and enforcement Roles a. Union organizes players and negotiates for them i. Union negotiates checks on commissioners power ii. Creates unbiased arbitrators b. Commissioner is like the lead negotiator for the league c. League intended to be an arbiter; but really just represents owners d. Owners have divergent views but negotiate opposite union e. Agents not much in CBA, put negotiate players individual interests Big problem b/t league and union is over revenue sharing NLRA v. anti trust a. Rights i. CBA allows to collectively negotiate to achieve best interest, allow competitors to conspire/agree on a common approach to dealing with other side, players may also do this o This is really a restraint on what options are available to negotiating parties o Parties get together to restrain trade o Congress has said that labor interests are better protected under CBAs than under anti-trust, so allow CBA to govern b. Unfair labor practices c. Monopoly subjects NLRB a. function Two example of CBAs a. NFL i. Certified 1968 ii. Attempts to save players, satisfy anti-trust laws, and still restrict movement of players: o Rozelle Rule o Right of First refusal o Plan B: 37 players on each team were protected and rest werent iii. Current o Salary cap tied into revenue 50:50 rev o Free agency 5 year plan, once in league 5 years, may become free agent o Franchise player allow to keep a player even if he could be free agent o Rookie pool reduced # of draft rounds and amt of money available to spend on rookies b. NBA i. Right of 1st refusal; replace option clause ii. Hardship waiver if can prove financial hardship then could be eligible for draft (and void 4 yr restriction) iii. 1983 salary cap; right of 1st refusal iv. 1988 2 draft rounds; 1st refusal only v. Current o Hard cap determined by years of service o 5 yr plans o Team cap 55% of BB revenue can go to players salary Luxury tax applies if go over CBA cases a. Brown v. Football i. Post impasse o Ct disagrees w/ Ps assertion (Once reach impasse labor laws no longer protect you and anti-trust law applies) and that there must be something practical going on

b.

ii. Statutory exemption iii. non-statutory exemptions NFL this existed and anti-trust laws should not be applied o purpose - even if an impasse owners and unions must still talk and work together to get past impasse, so cant go straight to anti-trust laws o whats permitted: Ct does not clarify what leagues can do when they are at an impasse look at Mackey Roselle rule (Mackey) i. Roselle rule: commissioner to decide what compensation should be given to a team when a player becomes a free agent and leaves team ii. Old exam Q: what is purpose of non-statutory labor exemption to anti-trust laws and when is exemption in force o Purpose of exemption is to encourage collective bargaining and negotiation process If no exemption then unions wouldnt exist Cong/Cts want unions so created exemption to encourage bargaining o Exemption is in force if following 3 elements of non-statutory exemption anti trust claim are met

Restraint of trade that primarily only affects parties to CBA Agreement concerns a mandatory subjects of CBA - wages, hours, working conditions - Roselle rule

c. d.

e.

Agreement is product of legitimate arms length bargaining - Not the case here b/c rule was unilaterally adopted by commissioner iii. rule of reason o business purpose dont want players leaving smaller markets w/ lack of players b/c everyone flocks to big markets o harm: suppression of salaries o but must apply least restrictive means, there are better ways to achieve purposes w less harm than Roselle rule iv. business purpose v. harm o need to use least restrictive means to achieve business purpose cases show that we are getting closer and closer to having no restraints Robertson v. NBA i. Non-statutory exemption o NBA claims its protected from anti-trust laws by a labor exemption o Exemption only applies to employers, not NBA (or leagues) But the league would be protected if it was engaged in labor discussions Non-stat exemption protects employers clubs when they are participating in collective bargaining Merger talks dont fit into a mandatory negotiations area under labor act Smith v. Pro Football i. For Smith this was a per se violation, could get treble damages b/c NFL draft violates Sherman anti-trust act o Per se violation draft fell into was a group boycott ii. rule of reason analysis o business reasons: draft created parity w/in league parity needed to create interest and maximize profits league is a single entity, need each other iii. Ct analyzed NFLs need for draft and said draft was not least restrictive or effective means o Thus if draft creates some harm (reduces players ability to neg.), which it did, and there was not a good business purpose b/c draft was not effective teams at bottom werent getting any better iv. Ct suggestions: o limit draft to just 2 rounds, or o have multiple rounds and allow multiple teams to draft single player, but only 1 team can sign 1 player per round v. NFL draft now o The NFL succeeded in creating parity, but this was more due to free-agency and salary caps

MLBPA v. Clubs i. New rule o Issue: Players arg that any subjects that effect players must be approved by MLBPA 1st o Clubs say no it doesnt affect players, b/c rookies are not professionals yet they are still amateurs, not members of CBA yet o Players said no it does effect them b/c there is a limited pool of players (free agents and rookies) that clubs are competing for and if there is a system that allows the salaries of the rookies to be suppressed it has a secondary effect of reducing salaries of free agents New rule did have an effect on salaries g. Silverman v. MLB i. 1990 CBA o There was a min salary for players w/ less than 3yrs service and players w/ 3-6 yrs could demand salary arbitration ii. MLB offer o MLB wanted to get rid of arbitration to keep salaries down o If there is an impasse if it pertains to a mandatory subject employer can implement change unilaterally iii. Major question: was this a mandatory subject of bargaining o Ct gave lots of deference to NLRB o Said it was mandatory b/c it had a direct effect on wages o Ct would not protect MLB attempt to unilaterally implement elimination of 3-6 yr player salary arbitration H. Enforcement of Sports Ks 1. Grievance and Salary Arbitration a. An obligation to submit a dispute to grievance arbitration may be created contractually (in CBA & player Ks) i. Rules for arbitration are all decided by K ii. Rules for arbitration come from CBA or references in K to rules created by governing arbitration bodies b. If there are challenges in dispute process what law governs? i. This deals w/ K law so if there are conflicts in K law mandatory law applies it regulates arbitration process o sources of mandatory law that apply: Labor or commercial - In labor settings there are some fed regs that govern c. Main pt: 3 types of law govern arbitration process i. K law ii. Mandatory law (govt created limits/guidelines that limit arbitration) iii. Common law surrounding CBA (may be traditional case law) d. Challenges to arbitration i. May be brought pursuant to mandatory law ii. However, common law may apply Regulating off field/non-workplace conduct (John Rocker Arbitration) a. Here there was just 1 arbitrator b. Common law governed c. Arbitrator may allow league to regulate off field conduct if that conduct affects the league (i.e. affect ticket sales) d. Punishment i. Objective of punishment is to deter conduct from happening again ii. Commissioner has right to punish but punishment must be proportional and not unduly harsh Appealing arbitrators decision in ct (MLBPA v. Garvey) a. Law governing labor law applies b. Ct may not look into merits (even serious error by arbitrator) i. theres a fundamental value favoring arbitration o dont want to 2nd guess that by looking at merits ii. however the ct may remand the case back to arbitrator c. Cts will set aside arbitrators decision:

f.

2.

3.

i.

If successful in challenging conclusion, cts wont look at merits, but they will make arbitrator redo it,

ii. Ct will send back if there are procedural errors/abnormalities as set out in K
o Based on procedural errors if result is unfair or denied due process What if rules created by CBA are unfair i. Technically, arbitration must not recognize due process rights, however, US jurisprudence does not like conclusive presumptions (those that cant be challenged) o Issue over WADA is that it exemplifies several conclusive presumptions that violate due process rights; raises Q of are there mandatory laws that govern and if so what type? Review of various rules embodied in Ks that concern arbitration: a. Substantive rules and b. Procedural rules i. includes rules for how to deal w/ arbitration (i.e. either adopt someone elses rules or create own) o mandatory laws comprise a part of procedural rules which set of mandatory rules govern substance and procedure, depends on if K is a labor or commercial K o common law of the procedural process also plays a part i.e. interpreting the K, or the arbitration process and how it works fair amt of contradiction in where do you go to fill in gaps b/t the sources - i.e. adopt common law or civil law principles, or possibly intl laws or quasi criminal procedures (anti doping) Unconscionability and Arbitration (Dryer v. LA Rams) a. Reqs that must be showed for unconscionability i. 1st must show K of adhesion unequal bargaining power o i.e. if owners have all bargaining power & dictate terms to players and terms create an injustice; o even if player cant show unequal bargaining power, may not matter b/c these types of disputes are governed by fed labor law, o Conclusion even if theres unequal bargaining power if arbitration is reqd to resolve disputes cant challenge prior to going to arbitration nd ii. 2 must show there is something unfair about the K o i.e. arbitration process is unfair b/c of possibility that claim could be decided by commissioner, an unbiased arbiter b. Law governing unconscionability i. Unconscionability is a state law claim ii. If conflict b/t fed and state law, fed labors law apply, but if no conflict then both may apply iii. However, in labor situations governed by fed law there is a strong policy for parties to go to arbitration 1st and then challenge result c. Exception (when player may challenge policy) i. If can show the union does not really represent you d. If the dispute is based in commercial law, not labor outcome is still probably the same (Morris v. NY Giants) Review: Situations when can challenge arbitration process a. Pre arbitration i. Depends on how ct classifies dispute: labor or commercial ii. Typically a very tough time challenging iii. One Exception: If can show the union does not really represent you b. post arbitration i. may challenge if there are significant procedural irregularities ii. real area of conflict is did process violate public policy Arbitration decisions regarding teams decision to cut player a. Examples: Lions, Hawks, Angels i. in all 3 cases club argues player released for lack of skill, in each player argues release was for something else d.

4.

5.

6.

7.

I.

Rules established: i. Team must establish rational basis to show player lacked sufficient skill; o cant just show lack of money or that player no longer fits b/c could always trade player o (burden on team to prove lack of skill) ii. Team mgmt is in best position to gauge lack of sufficient skill o arbitrators will give deference to team decisions o (burden on player to show release based on something other than skill) c. Remaining issues following these cases: i. Should a player be able to bring arbitration after a coach determines player lacks sufficient skill to be on team ii. Should a club not be able to release a player for economic reasons iii. Is it wise to have arbitrators decide issue of sufficient skill; does it impede coaches ability to run team iv. There is no agreement as to who has burden for proving lack of skill d. Nordstrom v. NLRB i. NLRB finding: cant fire somebody for engaging in union activity ii. Mitigation: employee has obligation to try and mitigate damages 8. Salary Arbitration a. process-final offer arb process i. primarily in BB if mgr and player cant reach agreement on salary, both sides submit amt to arb and arbitrator decides which parties amt should apply (arbitrator does not have to give reason for decision) ii. each side can argue for its position, but CBA limits topics that may be addressed iii. Criteria arbitrator cant hear: whats going on in press, what athletes in other sports make, etc. iv. Criteria arbitrator can hear o Contribution to club o Public appeal o Career contribution o Current salary 9. Old exam Q: where are rules governing grievance arbitration found a. Typically found in CBA i. Here focus is on labor arbitration ii. Focus is on labor b/c giving up right to challenge in ct (there are a few very limited situations where judicial review still exists) o Typically union negotiates arbitration arrangements (but if negotiating own K may be able to modify CBA arbitration as applied to you) b. May also find them in league constitutions and/or bylaws i. Here focus is on commercial arbitrations Criminal liability 1. Regina v. Bradshaw a. Criminal laws apply v. rules of game i. As a basic proposition criminal laws do apply to games ii. But if playing according to rules of game cant act maliciously, but if acts motivated by malicious intent then any serious injury or death can be criminally liable o If intent to cause injury or reckless indifference can be criminally liable despite being w/in rules of game b. Not always liable for conduct b/c even though crim law applies athletes typically consent to conduct in game 2. Regina v. Maki a. Consent i. Athletes consent to whatever is inherent in game ii. What is scope of whats inherent? b. Self-defense elements i. 1) Must have reasonable apprehension of bodily harm, 2) must respond with intent to protect self and 3) response must be proportionate only to repel attack and nothing more 3. Regina v. Green a. Consent defense i. Dont consent to savage attacks that result in serious injury, but dont know how far that goes

b.

4.

o Savage attack might be one that occurs from behind Self defense i. Needed to swing at Maki to tell him to stop spearing him ii. Might not be self dense if not proportional should cts interfere w/ world of sports b.