The opinion of the court was delivered by: NEAHER
Memorandum Decision and Order
This case presents a local skirmish in the reported -- and apparently well-financed -- "war"
between the fledgling World Hockey Association (WHA) and the established National Hockey League (NHL) over rights to the exclusive services of talented professional hockey players formerly under contract with NHL teams. While professional baseball, football and, more recently, basketball have provided many chapters "in the history of contract jumping by famous American athletes," Erving v. Virginia Squires Basketball Club, 468 F.2d 1064 (2 Cir. 1972),
it remained for professional hockey to generate in one season a mass exodus of players from NHL to WHA clubs. As Judge Higginbotham found in his comprehensive opinion in Philadelphia World Hockey Club, Inc. v. Philadelphia Hockey Club, Inc., 351 F. Supp. 462 (E.D. Pa., 1972), for this season alone approximately 60 former NHL players signed up with WHA clubs.
The lure was, of course, offers of greatly increased compensation which in one instance approached the fantastic -- a guaranteed bonus of $1,000,000 in advance just for signing a contract.
At issue in this action is the right to the exclusive services of defendant Garry Peters ("Peters"), one of the former NHL players who signed with the WHA.
The contesting clubs, plaintiff and defendant here, unlike their respective leagues, stand on a more equal footing. Plaintiff Nassau Sports, a New York limited partnership, is the owner of the newly-franchised New York Islanders Club in the NHL. It has just begun its first hockey season and plays its home games at the Nassau County Memorial Coliseum in Uniondale, Long Island. Defendant Metropolitan Hockey Club, Inc., a New Jersey corporation, is the owner of the newly-franchised New York Raiders club in the WHA. It, too, has just begun its first hockey season and has been playing its home games at Madison Square Garden because no suitable facilities as yet exist in New Jersey where the club is based.
Plaintiff commenced this action in the New York Supreme Court, Nassau County, in August 1972, to enjoin Peters from playing hockey for defendant Metropolitan in breach of plaintiff's alleged contract rights to Peters' exclusive services. Defendants joined in removing the action to this court on the ground of diversity of citizenship and a subsequent motion by plaintiff to remand the act ion was denied. 352 F. Supp. 867.
Prior to removal of the action to this court, Supreme Court Justice Berman had granted an ex parte temporary restraining order which restrained Peters
from playing hockey or rendering any service of any kind in any capacity to the defendant, Metropolitan Hockey Club, Inc., or to any other professional hockey team other than the New York Islanders.
After this court accepted jurisdiction, plaintiff applied for a preliminary injunction to continue the foregoing restraint pending final determination of the action. Defendants oppose that application and have countermoved to vacate the temporary restraining order. Although these motions present somewhat different issues, the parties recognize that the determinative question is whether plaintiff has any rights to Peters' services which would warrant preliminary injunctive relief in light of defendants' defenses of antitrust illegality and the requirements for such relief.
Plaintiff's claim of exclusive contract rights to Peters' services is based upon the following substantially undisputed facts. Peters, a Canadian citizen and resident, is a veteran professional hockey player of considerable talent, who had been under contract during the 1971-72 playing season with the Boston Professional Hockey Association, Inc., of the NHL, familiarly known as the Boston Bruins. The contract he entered into in Massachusetts on October 1, 1971 is known as the "Standard Player's Contract" required under league by-laws to be used by all NHL clubs. Peters had signed similar contracts annually from his rookie days in 1963.
The Bruins' contract specified that the Club "hereby employs the Player as a skilled Hockey Player for the term of one year commencing October 1st, 1971-1972" at a salary of $20,000 plus certain conditional major league bonuses.
Peters played only part of that season with the Bruins, although he received his full salary. Due to a knee injury, he played most of the season with the Boston Braves of the American Hockey League (AHL), a minor hockey league farm club of the Bruins. Despite his injury he finished the season as "Most Valuable Player" in the AHL, scoring 39 goals and making 34 assists in 58 games.
Plaintiff's relationship with Peters began in June 1972 while his contract with the Bruins was still in effect. Plaintiff having paid $6,000,000 for its newly-acquired NHL franchise thereby gained the right to staff its team with 21 players selected from the other member clubs through the operation of the NHL expansion draft system. Peters was among those drafted by plaintiff and on June 21, 1972 a formal assignment was executed by the Bruins transferring the rights to his services to plaintiff.
Although Peters was not a party to the assignment, his contract with the Bruins specifically provided for that eventuality as follows:
"11. It is mutually agreed that the Club shall have the right to sell, assign, exchange and transfer this contract, and to loan the Player's services to any other professional hockey club, and the Player agrees to accept and be bound by such sale, exchange, assignment, transfer or loan, and will faithfully perform and carry out this contract with the same purpose and effect as if it had been entered into by the Player and such other Club."
Peters learned quite promptly that he had been drafted by plaintiff and of the assignment of his ...