Pro Basketball Legal Cases 1987-1998

BRIDGEMAN v. NATIONAL BASKETBALL ASSOCIATION [1987]
Collective bargaining began in February, 1987 with the points of contention being the players’ insistence on the elimination of the salary cap, college draft and the right of first refusal. On June 8, the NBA and the NBPA entered into a signing moratorium agreement to expedite the collective bargaining process and postpone any litigation. However, when the moratorium ended on October 1, the players immediately filed suit against the league seeking a ruling that the draft, the right of first refusal, and the salary cap violated antitrust laws. Two weeks later the NBPA announced that they would not engage in any more collective bargaining negotiations until the lawsuit was resolved. The NBA reacted to this by filing an unfair labor practice charge with the National Labor Relations Board, asking the NLRB to direct the NBPA back to the bargaining table. In December U.S. District Court Judge Dickinson R. Debevoise ruled that the NBPA can proceed with their lawsuit with the current collective bargaining system in effect because there is a continuing collective bargaining relationship, but rejecting the league's position that the expired agreement could remain in effect permanently. The NBPA player representatives then responded by voting unanimously to decertify the union in order for the league to be subject to antitrust laws. After more wrangling, the two sides came to an agreement on a new collective bargaining agreement on April 26, 1988 which would eventually reduce the draft to two rounds and eliminate compensation on free agents completing their second contract.


NATIONAL BASKETBALL ASSOCIATION v. OREGON LOTTERY COMMISSION [1989]
After the state of Oregon added NBA to its Sports Action betting game on December 11, 1989 the NBA filed suit later in the month in U.S. District Court in Eugene, Oregon claiming that the game violated federal anti-gambling statutes and the Oregon Constitution, also claiming infringement on the league’s property rights and trademarks.  After U.S. District Court Judge Malcolm Marsh declined to dismiss the charges, the NBA filed a second lawsuit in April, 1990 alleging that the new lottery “Basketball Championship Pool” scratch-off game was based on the NBA Finals.  After disappointing ticket sales the Oregon Lottery Commission agreed in December, 1990 to exclude NBA games for at least five years in exchange for the NBA dropping their lawsuit.


BOSTON CELTICS v. SHAW [1990]
In January, 1990 the Boston Celtics signed Brian Shaw, who had left the team in 1989 to play in Italy for Il Messaggero Roma, to a five-year contract for the 1990-91 season with a guarantee that Shaw would not play in Italy in 1990.  When Shaw informed the Celtics in June that he planned to return to Italy in 1990-91, the Celtics took Shaw to arbitration and the case was ruled in favor of the Celtics.  Shaw then appealed the decision claiming that the clause in which he agreed to cancel his contract with Il Messaggero Roma conflicted with the NBA’s agreement with the NBPA which barred players from cancelling their contract in order to sign with another team.  Shaw’s appeal was denied  on the basis that his the option to play in Italy in 1990-91 rested with him rather than the Il Messaggero club.


CHICAGO PROFESSIONAL SPORTS LIMITED PARTNERSHIP v. NATIONAL BASKETBALL ASSOCIATION [1990]
In 1990 the NBA Board of Governors voted to reduce the number of games that “superstations” such as WGN, WWOR, WPIX and WTBS could broadcast from 25 to 20.  The Chicago Bulls then filed suit against the NBA claiming that the NBA’s broadcasting rights violated antitrust law and restrained trade, with the Bulls’ request for an injunction allowing 25 broadcasts granted.  In 1992 the lawsuit was upheld on appeal and the number of broadcasts was set at thirty with the case was remanded back to district court.  In December, 1996 the Bulls and the NBA came to a settlement with the Bulls accepting 15-game limit.


CALDWELL v. AMERICAN BASKETBALL ASSOCIATION [1991]
After Spirits of St. Louis player Marvin Barnes left the team after conferring with Joe Caldwell, St. Louis informed Caldwell that he was suspended by the team by telegram and by letter dated December 3, 1974 (he later maintained that was never informed that his suspension was lifted, his contract was expired or that he was free to negotiate with other teams, while the Spirits claimed that Caldwell was not placed on a ‘reserve list’ as ABA bi-laws stipulated a suspended player would be in order to maintain his rights and that their rights to him expired in October, 1975).  Later that month Caldwell appealed his suspension through the ABAPA to the ABA Commissioner.  The Commissioner subsequently informed the Spirits that an indefinite suspension would not be permitted.  Shortly after that Caldwell notified the ABA that he would seek a remedy in court rather than through the league, and after a bench trial Caldwell was awarded his salary of $220,000 plus interest.  Caldwell then brought suit against the ABA in U.S. District Court on December 11, 1991.  The court ruled that Caldwell never requested that the Spirits put him on waivers and failed to apply to the league for clarification of his status.  Caldwell claimed that the failure of any of the other teams in the ABA to offer him a contract or tryout indicated that a boycott was in effect because he was the ABAPA President and was opposed to a merger with the NBA.   The case was dismissed on July 1, 1996 as the league did not have “total market control” to prevent Caldwell from playing and that Caldwell “failed to offer evidence which would enable a reasonable jury to find concerted action on the part of any of the defendants.”


NATIONAL BASKETBALL ASSOCIATION v. WILLIAMS [1994]
In the collective bargaining of 1994 the NBPA demanded that the college draft, right of first refusal and salary cap system be abolished, choosing not to negotiate with the NBA until their current collective bargaining agreement expired.  The NBA then filed suit in U.S. District Court claiming that the continued operation under the expired collective bargaining agreement would not violate antitrust laws because the continuance was covered by labor law rather than antitrust law and that they were lawful even if antitrust law was applied.  The NBPA countered that a cartel such as the NBA member clubs should be barred from using economic coercion in collective bargaining.  The court then ruled in July, 1994 that antitrust laws did not prevent employers from acting jointly when bargaining with a common union.  On January 24, 1995 the U.S. Court of Appeals partially affirmed the decision of the U.S. District Court, ruling that antitrust laws could not be applied to the collective bargaining negotiations between the NBPA and NBA, and based on that, ruled that it did not need to address the college draft, right of first refusal and salary cap.


EWING v. NATIONAL BASKETBALL ASSOCIATION [1995]
In response to ongoing labor negotiations a group of dissident players (with Patrick Ewing, Michael Jordan, Stacey Augmon, Dale Davis, Alonzo Mourning, Howard Eisley and Stacey King as the plaintiffs and heavily influenced by player agent David Falk) files an antitrust suit in Federal Court on June 28, 1995 in Minneapolis claiming that the NBPA, under the direction of Executive Director Simon Gourdine and President Buck Williams was not keeping them informed on the labor negotiations, with the group also circulating petitions to decertify the union.  The plaintiff’s main contentions being that the salary cap and college draft were illegal because the previous collective bargaining agreement had expired.  The filing of the suit derailed the agreement between the NBA and NBPA and led to a decertification vote by the NBPA members and a lockout by the NBA on July 1.  In September Judge David Doty said he would await the outcome of the player’s decertification movement before deciding to life the NBA lockout.  Later in the month the NBA players voted 226-134 against decertification and the new collective bargaining agreement was ratified 25-2 by team representatives the next day.


NATIONAL BASKETBALL ASSOCIATION v. MOTOROLA, INC. [1996]
A lawsuit was filed in August, 1996 by the NBA in the U.S. District Court for Southern New York to prevent Motorola from transmitting scores and game information over their paging devices using STATS (Sports Teams Analysis and Tracking Systems), claiming it was unfair competition by misappropriation, false advertising, unfair competition by false advertising and false designation of origin, copyright infringement and unlawful interception of communications.  In January, 1997 the District Court dismissed all of the NBA’s charges except for the unfair competition by misappropriation, as well as dismissing Motorola’s counterclaim.  Motorola was found guilty of the unfair competition by misappropriation charge and a permanent injunction was issued, the court also  found that the playing statistics from the game were facts and therefore not subject to copyright law.


SPREWELL v. GOLDEN STATE WARRIORS [1998]
December 1, 1997 Sprewell choked Warriors Head Coach P.J. Carlesimo during practice after a heated argument, and returned and landed a grazing punch to Carlesimo’s head after practice.  The Warriors suspended Sprewell for a minimum of 10 games and “expressly reserved its right to terminate Sprewell's contract” after the incident.  Two days later, the Warriors terminated Sprewell’s contract.  On December 4 Sprewell filed a grievance under the terms of the collective bargaining agreement to challenge the suspension and the termination of his contract.  The arbitrator found that the suspension of Sprewell should be limited to the 1997-98 season and that the termination of his contract was “not supported by just cause because after the Warriors' initial suspension of Sprewell, any residual interest of the Warriors was absorbed by the NBA's investigation of the matter.”  On May 20 Sprewell filed suit against the Warriors seeking a decision to vacate the arbitration award, but the court dismissed his lawsuit without prejudice.

Pro Basketball Legal Cases 1974-84

LEVIN v. NATIONAL BASKETBALL ASSOCIATION [1974]

After failing to meet approval by the NBA Board of Governors in 1972, who voted 13-2 against approving their purchase of the Boston Celtics franchise, Irving Levin and Harold Tipton failed an antitrust suit against the league in U.S. District Court, claiming their exclusion was based solely on their relationship with maverick Seattle SuperSonics owner Sam Schulman.  The court ruled that the exclusion of Levin and Tipton did not violate antitrust law based on their intent to become partners, rather than competitors.

AMERICAN BASKETBALL ASSOCIATION v. NATIONAL BASKETBALL ASSOCIATION [1974]
After the NBA and ABA failed in their attempt to agree on a merger, the ABA revived their antitrust suit in January, 1974 seeking $100 million in damages against the NBA in Federal Court in San Francisco.  Claiming the NBA failed to act in good faith during the merger talks and had a monopoly on players, the ABA asked for an injunction to prevent the NBA from signing any college players for the next four years and preventing the NBA from enforcing all of its current player contracts beyond their expiration date.  The ABA also asked the court to prevent the NBA from signing any contracts not negotiated by or paid for by individual clubs.  The NBA Board of Governors responded by voting 18-0 against any merger with the ABA.  With the Oscar Robertson Suit already in place, the players effectively blocked a merger until their suit was settled and in 1976 after the suit was concluded and with the urging of Judge Robert L. Carter, the ABA and NBA resumed merger talks which culminated in four ABA franchises (Denver, Indiana, New York and San Antonio) joining the NBA for the 1976-77 season in a 22-team league and dismissal of the antitrust suit.


AMERICAN BASKETBALL ASSOCIATION PLAYERS ASSOCIATION v. AMERICAN BASKETBALL ASSOCIATION [1975]
Filed December 8, 1975 in U.S. District Court separately from the NBPA’s suit on December 8, 1975, the ABA accused the NBA of participating in an unlawful conspiracy and combination to violate the Sherman Act by trying to eliminate the competition from the ABA, citing their imminent draft of ABA players who had signed as underclassmen (Mel Bennett, Charles Jordan, Moses Malone, Mark Olberding, Skip Wise.  Judge Robert L. Carter rules that there was no credible evidence that there was any conspiracy or that the applications by the Denver and New York ABA franchises for NBA membership resulted from any initiative on the NBA’s part.


ROBERTSON CLASS PLAINTIFFS v. NATIONAL BASKETBALL ASSOCIATION [1978]
After Marvin Webster completed his contract with Seattle in 1978, Webster signed a free agent contract with New York for five seasons at $600,000 a year. After Seattle decided not to match New York’s offer and upon failing to agree on compensation for Seattle, the case went before NBA Commissioner Lawrence O’Brien who awarded Seattle Lonnie Shelton, a 1979 first-round draft choice and $450,000. The NBPA then filed suit claiming the compensation was excessive, and after a four-day hearing the compensation award was found to be excessive based on an earlier compensation decision by O’Brien when Houston signed Rick Barry as a free agent. The Special Master then awarded a reduced compensation of Shelton and $200,000 to $250,000 in cash or New York's 1979 first round draft choice and $450,000.


TOMJANOVICH v. CALIFORNIA SPORTS, INC. [1978]
In an infamous on-court incident, Rudy Tomjanovich of Houston was horribly injured (suffering facial and skull fractures, facial lacerations and a concussion) by a punch from Kermit Washington of Los Angeles during a December 9, 1977 game. Tomjanovich later filed a lawsuit against the Lakers citing vicarious liability for Washington’s actions. The jury awarded Tomjanovich $3.25 million in damages ($1.75 million in actual damages and $1.5 million in punitive damages), with the case then settled out of court for $2 million while the decision was waiting to be heard on appeal.


WALTON v. COOK [1981]
After numerous foot injuries during his playing career with the Portland Trail Blazers, star center Bill Walton (who had moved on to the San Diego Clippers as a free agent)  filed suit against Blazers team doctor Robert Cook and twenty additional physicians from the Oregon City Orthopedic Clinic for $632,000 in lost income and medical expenses and an additional $5 million in damages claiming negligent diagnosis and treatment of his broken foot while he played for the Blazers, and failure to provide accurate information on the nature of his injuries.  The case was settled in June, 1982 prior to trial for an undisclosed amount.


NATIONAL BASKETBALL ASSOCIATION v. SDC BASKETBALL CLUB, INC. [1982]
Taking advantage of the opportunity to move into the vacant Los Angeles Coliseum, the San Diego Clippers relocated without seeking league permission in May, 1984.  The league then filed a $25 million lawsuit against the Clippers and the Los Angeles Memorial Coliseum Commission claiming the move was in violation of the NBA’s by-laws.   In March, 1986 Federal Judge Leland Neilsen dismissed the lawsuit citing a recent antitrust decision allowing the recent move of the NFL’s Oakland Raiders to Los Angeles, but a Federal Court in San Francisco ruled that the NBA could proceed with its lawsuit in April, 1987.  Finally, in September, the Clippers and NBA reached an out-of-court settlement with the Clippers agreeing to pay the Los Angeles Lakers a $5.5 million indemnity for moving into the Lakers' territory and to sign documents acknowledging the validity of league bylaws regarding franchise movement.


CALDWELL v. MUNCHAK [1980]
Joe Caldwell signed a guaranteed five-year contract, $1.1 million with the Carolina Cougars on October 30, 1970, after Caldwell played the first four seasons for Carolina the franchise was sold to Daniel and Ozzie Silna who moved it to St. Louis as the Spirits of St. Louis, where they added rookie Marvin Barnes.  St. Louis then alleged that Caldwell persuaded Barnes, who was unhappy with his contractual situation, to breach his contract by leaving the team in November, 1974 (Caldwell had provided Barnes with the names of three agents, one of which, Marshall Boyar, was Caldwell’s own agent, who Barnes contacted.  Caldwell testified that it was Boyar who had advised Barnes to leave the team, while Barnes, in a sworn statement claimed that he came to the decision after talking to both Caldwell and Boyar).  After Barnes returned to the team and the Spirits suspended Caldwell on December 3 and then ultimately terminated his contract.  After the Spirits did not make a payment for $70,000 in deferred compensation on January 15, 1980, Caldwell filed suit against the team for breach of contract.   In July, 1982 the court ruled in favor of Caldwell, awarding him his salary $220,000 plus interest.


LANIER v. NATIONAL BASKETBALL ASSOCIATION [1982]
As a reaction to the threat of the owners implementing a salary cap outside of the collective bargaining process the NBPA filed Lanier v. National Basketball Association in U.S. District Court on July 28 in an effort to block it.  The owners then held a press conference the following day to announce that they were filing a an unfair labor practices suit against the NPBA with the National Labor Relations Board, and were seeking give-backs from the players, including a reduction in the size of team rosters from 12 to 10, elimination of their obligation regarding player pensions and other benefits, rights to 75% of the player’s shoe endorsements and the elimination of guaranteed contracts.  The players responded with proposal for increased benefits to offset the cost of living, all contracts be guaranteed and a share of the league’s television revenues.  In September Special Master Kinston Brewster ruled in the players favor stating that a salary cap would violate the settlement of the Oscar Robertson Suit.  In October, the NBA offered a new proposal - a guaranteed compensation plan (a fixed 40% of gross revenues up to $250 million and 30% thereafter) and maximum and minimum team salaries, with NPBA General Counsel Larry Fleisher stating that any agreement must take effect after the expiration of the Oscar Robertson Suit settlement in 1987.  The NBA then floated the possibility of up to five franchises being eliminated (Cleveland, Indiana, Kansas City, San Diego and Utah), and then filed a petition with the Special Master to delay free agent rights if the players go on strike causing the players to set a April 1, 1983 strike deadline.  Finally, in March, the players agreed to allow the implementation of a salary cap and a collective bargaining agreement was reached on March 30 which included a salary cap guaranteeing the players 53% of the NBA’s gross revenues (an expected $3.6 million per team in 1983-84), increased minimum salaries for rookies and a guarantee that the league will maintain 253 player jobs.


WOOD v. NATIONAL BASKETBALL ASSOCIATION [1984]
When Leon Wood was drafted with the 10th overall pick by Philadelphia in 1984, he was offered a one-year $75,000 minimum salary due to salary cap limitations.  Wood refused the offer and instead filed an antitrust suit against the league on September 14, in an effort to overturn the salary cap.  In October it was ruled that the salary cap and college draft fell under the terms of the collective bargaining agreement and “At the time an agreement is signed between the owners and the players' exclusive bargaining representative, all players within the bargaining unit and those who enter the bargaining unit during the life of the agreement are bound by its terms.”

Pro Basketball Legal Cases 1969-1973

BROWN v. NATIONAL BASKETBALL ASSOCIATION [1969]
MOE v. NATIONAL BASKETBALL ASSOCIATION [1969]
With the success of Connie Hawkins’ suit against the NBA for boycotting him after his name was mentioned in the investigation of the 1960-61 college point-shaving scandal, Doug Moe (who was dismissed after five minutes before the grand jury with all parties agreeing that his involvement was minor) and Roger Brown both filed their own lawsuits to recoup money lost due to the NBA’s boycott of them at the same time.  Moe been drafted by the Chicago Packers, but was blacklisted by the league, and then subsequently worked selling insurance, then did a stint in the United States Army and played professional basketball in Italy before signing with the ABA New Orleans club in 1967.  Brown was the first player signed by the Indiana Pacers in 1967 toiling as a factory worker at the General Motors Plant in Dayton, Ohio and playing AAU basketball for Jones Brothers Mortuaries. Ultimately they met with success as well and settled with the NBA out of court, with Brown remaining in the ABA as a player, and Moe as Larry Brown’s long-time assistant coach.


WASHINGTON CAPITOLS BASKETBALL CLUB, INC. v. BARRY [1970]
In 1969, after two years in Oakland, Pat Boone and Ken Davidson sold their ABA franchise to a group headed by Earl Foreman who moved the franchise to play in Washington, DC as the Washington Capitols.  Unhappy with the prospect of playing there, Rick Barry signed a five-year contract to play with the NBA’s San Francisco Warriors (who Barry had left in 1967 to join the Oaks) with the intent of joining them for the 1969-70 season, which the Capitols answered by filing a lawsuit seeking an injunction against the Warriors.  Despite claims from Barry and the Warriors that Barry’s contract with Oakland was not assignable to Washington and that Oakland signed Barry with “unclean hands,” the court ruled otherwise, granting the injunction and in effect forcing Barry to honor the final two years of his ABA contract.


DENVER ROCKETS v. ALL-PRO MANAGEMENT [1970]
In August, 1969 the ABA’s Denver Rockets signed underclassman Spencer Haywood to a three-year, $450,000 contract, and Haywood was clearly the best player in the ABA during the 1969-70 season averaging 30 points and 19.5 rebounds and winning the league’s MVP award.  Early in 1970 Haywood asked Denver to renegotiate his contract, and he and Denver agreed to rescind their prior agreement and they agreed to a six-year contract totaling an estimated $1.9 million.  The contract (which paid him $47,000 the first two years, $75,000 the remaining four and the rest through a mutual growth fund) was signed by Haywood and his legal guardian on April 1, 1970.  After consulting with an attorney in the summer of 1970 and being advised that the contract did not provide for guaranteed compensation totaling $1.9 million, Haywood gave written notice to Denver in November that he considered his contract to be invalid because of fraudulent misrepresentations made to him and that he disavowed and rescinded the contract.  In December Haywood signed a six-year, $1.5 million contract with Seattle of the NBA, despite the understanding that the NBA considered him to be ineligible because it had not been four years since the graduation of his high school class.  In January, Haywood was given a temporary injunction in U.S. District Court which prevented the NBA from taking punitive action against Seattle for signing him.  That temporary injunction was overturned by an Appeals Court in mid-February, but in early March the U.S. Supreme Court ruled in Haywood’s favor and allowed him to remain in the NBA.  Denver and Haywood then reached an out-of-court settlement clearing the way for him to remain in Seattle.


ROBERTSON v. NATIONAL BASKETBALL ASSOCIATION [1970]
Filed in April, 1970 amidst rumors of an NBA/ABA merger, the Oscar Robertson Suit (named after the sitting NBPA President) charged the leagues with conspiring to restrain competition through use of the reserve clause, college draft and Uniform Players Contract, looking to block any proposed merger under antitrust laws. In May, 1970 the U.S. District Court in New York agreed, issuing a restraining order to prevent the two leagues form merging and allowing them to continue merger talks in order to make a petition to Congress in order to get an antitrust exemption. When their proposal to Congress was unacceptable to the players the temporary restraining order was changed to allow for an agreement under the provision that it "deal specifically with and indicate the disposition of uniform player contracts, the common draft, and the reserve clause." In February, 1976 the two sides finally settled the Oscar Robertson Suit as they negotiated a system that gave the players limited free agency (with compensation for all player signings until 1980, after which teams held the right of first refusal to match free agent offers), eliminating the perpetual reserve clause included in the Uniform Player Contract, and paying the players $4.3 million in damages (which went to over 500 different players) and $1 million in legal fees. The NBA and ABA then negotiated a merger of the two leagues in June with four clubs - Denver, Indiana, New York and San Antonio joining the NBA.


ATLANTA HAWKS v. CALDWELL [1970]
When Atlanta signed Pete Maravich to a $2 million contract in 1970 it drastically changed their financial position and their relationship with joe Caldwell.  Caldwell held out for a similar contract, and eventually signed with the ABA’s Carolina Cougars in October (5 years, $1.1 million - $150,000 a year, $70,000 in deferred compensation through 1980).  The Hawks filed suit in Federal Court in Greensboro against Caldwell and Southern Sports Corp. of Greensboro in November, claiming the option year of his contract meant they held his rights for the 1970-71 season.  Judge Edwin M. Stanley ruled in Caldwell’s favor in January, 1971 stating that the Hawks had offered Caldwell less than 75% of his previous salary, which violating the reserve clause in his contract and made him a free agent.


HAYWOOD v. NATIONAL BASKETBALL ASSOCIATION [1971]
After signing with the ABA’s Denver Rockets as an undergraduate in 1969 and being named the league’s Most Valuable Player Spencer Haywood took advantage of a loophole in his contract to sign a six-year $1.9 million contract with the NBA’s Seattle Supersonics in December, 1970 despite the NBA 25-year-old rule against signing college undergraduates. After receiving a temporary restraining order in U.S. District Court in Los Angeles and sorting out a litany of lawsuits Haywood eventually suited up for Seattle (despite the protests of the league and the other clubs). After the temporary restraining order was overturned in the U.S. Circuit Court of Appeals in San Francisco the U.S. Supreme Court ruled in Haywood’s favor, preventing the league from taking action against the Sonics for playing him. Haywood’s challenging of the NBA ‘four-year rule’ lead to players being allowed to enter the league before their high school class had attended four years of college, first through by proving financial hardship, then eventually by simply announcing their intention to turn professional.


MUNCHAK CORPORATION v. CUNNINGHAM [1971]
In August, 1969 the Carolina Cougars of the ABA signed Billy Cunningham, who was under contract with Philadelphia for the 1969-70 season, to a three-year, $455,000 contract to take effect after Cunningham played out his option year (1970-71) with Philadelphia.  Included in the contract was a provision that if Cunningham played the season with Philadelphia for a salary less than $100,000 Carolina would make up the difference no later than May 15.  In January, 1971 Cunningham orally agreed to sign a five-year, $1.175 million contract with Philadelphia, but the contract was not signed while insurance was being arranged.  In the meantime Cunningham, who was playing for $225,000, filed for payment of the agreement with Carolina.  When Carolina refused to make the payment, Cunningham notified the Cougars that he considered the contract breached, and then signing the contract with Philadelphia.  Carolina then filed a lawsuit in U.S. District Court against Cunningham to prevent him from playing for any team other than Carolina, but the court ruled that Carolina had “unclean hands” and had breached their contract with Cunningham.  On appeal the court ruled that Carolina did not have “unclean hands” and that any breach of the contract was to unsubstantial to justify denying an injunction and issue an injunction for the duration of the contract, and that the contention that Cunningham’s contract was not assignable was meritless.  Cunningham then went on to play from 1971-72 to 1973-74, returning to Philadelphia in 1974-75.


AMERICAN BASKETBALL ASSOCIATION v. NATIONAL BASKETBALL ASSOCIATION [1972]
In September, 1971 a Senate subcommittee began hearing on a possible ABA/NBA merger.  In March, 1972 the ABA filed an antitrust suit against the NBA seeking $100 million in damages, charging the NBA and its 14 clubs with violations of the Clayton Anti-Trust Act and asked the court to enjoin the NBA from continuing its illegal practices (which included applying economic pressure which enabled the NBA to sign 39 of 40 “superstars” for the 1967-68 season, using the option clause and inducing ABA players to breach their contracts).  In May Senator Sam J. Ervin Jr., chairman of the Senate antitrust and monopoly subcommittee tells Congress that the proposed merger between the NBA and ABA should be delayed until the league handles the discipline of the owners of the Cincinnati ownership who were revealed to be illegally concealing ownership of a Las Vegas casino, and until Curt Flood’s antitrust suit against Major League Baseball concludes. A Senate Judiciary Committee then agreed in September to a bill that would allow a merger while doing away with the reserve clause, but amendments to the bill (such as no entry fee for ABA clubs, a guarantee of 30% of the home gate to visiting teams, players being signed to one-year contracts with an option for a second year, and prohibition of the television of Tuesday, Thursday and Friday night games during the high school and college basketball season) made the bill unappealing to the NBA, and at the same time, a merger bill which the owners approved by a Senate committee, but did not meet the approval of the Senate or the NBA players.  In March, 1973 Senator Birch Bayh of Indiana introduced a bill in Congress that would allow a merger and do away with the uniform player's contract and the option clause but this alternative proved unpopular with the owners.  A decision by a federal court in August followed authorizing the ABA and NBA to seek a merger without Congressional approval, but the 1971 merger agreement in 1971 expired in January, 1974 and the merger talks stalled.


RIKO ENTERPRISES, INC. v. SEATTLE SUPERSONICS CORPORATION [1972]
In 1969 when John Brisker became eligible for the annual NBA draft he went unselected, and the Philadelphia 76ers requested that Brisker be places on their supplemental draft list so they would have negotiating rights to him.  Brisker with Pittsburgh of the ABA and remained there until the club folded in 1972.  Brisker’s agent, AL Ross, then contacted the Seattle SuperSonics of the NBA expressing a desire to play there.  In June, 1972 NBA Commissioner Walter Kennedy then notified Brisker that he was a free agent and Brisker signed with Seattle in August. A week after the signing Philadelphia filed formal charges with Commissioner Kennedy claiming that Seattle’s signing of Brisker violated NBA by-laws since he was still on Philadelphia’s draft list, Kennedy then went on to approve Brisker’s contract with Seattle and Philadelphia brought the signing before the NBA Board of Governors, who ruled that Seattle had violated the league constitution.  Kennedy then fined Seattle $10,000 and awarded their 1973 first-round draft choice to Philadelphia.  A suit was then filed in U.S. District Court in New York to invalidate the finding and compensation and U.S. District Court Judge John B. Tenney ruled that Kennedy had “usurped the authority of the NBA Board of Governors” and enjoined Philadelphia from exercising Seattle first-round draft choice and ruled that the NBA was not a party to the decision and the decision and did not require them to restore the pick to Seattle.  After delaying the NBA draft two weeks the NBA Board of Governors chose to restore the pick to Seattle and then award a bonus selection at the end of the 1973 draft and 1973 and 1974 second-round draft choices from Seattle.


ERVING v. VIRGINIA SQUIRES BASKETBALL CLUB [1972]
After a stellar rookie season with the ABA’s Virginia Squires, Julius Erving signed with the NBA’s Atlanta Hawks in April, 1972, agreeing to a five-year, $1.5 million contract (compared to the four-year, $500,000 deal Erving had received in 1971).  Erving then filed a suit against the Squires in District Court in New York in June, 1972, seeing the rescission of his contract and a awarding of damages for misrepresentation by his agent, Steve Arnold, who was also an agent for the ABA. Erving’s contract included an arbitration clause that the ABA Commissioner would arbitrate any contract disputes.  However, the Commissioner was listed as a partner of the law firm which represented Virginia.  A District Court had ruled that the Commissioner could not serve as arbiter and ordered the appointment of a replacement.  In an attempt to prevent Erving from playing for the Hawks Virginia filed a counterclaim asking that the case be sent to an arbiter and an injunction be issued to prevent Erving from playing for any other team than the Squires (he appeared in two preseason games as a Hawk).  The court granted the injunction to the Squires and remitted the case to arbitration.  Ultimately, Erving retired to the Squires for the 1972-73 season and was then traded to the New York Nets in 1973, where he was signed to a new contract.

MUNCHAK v. CALDWELL [1973]

Filed by The Munchak Corp. (owned by Ted Munchak), which assumed the business interests of the Carolina Cougars, who maintained that a typographical error in Joe Caldwell’s original contract with the Cougars multiplied his pension benefits tenfold (claiming that it should have read $60 per month for each year he played professional basketball, rather than $600).  It was ruled that the Cougars were in fact obligated to pay Caldwell pension payments of $6,000 a month beginning at age 55.  An appeal by Munchak was denied in 1980 by the North Carolina Court of Appeals.