Sunday, April 24, 2011

Pro Basketball Legal Cases 1987-1998

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.

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.

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.

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.

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.”

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.

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.

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.

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.


  1. This is great stuff. How about Craig Hodges's 1996 lawsuit claiming he was blackballed from the league?

  2. Thanks Ian - I had forgotten about that one, when I can find something about the legal proceedings I'll post something on it.

    - Robert

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