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June 14, 1993



The opinion of the court was delivered by: LEONARD B. SAND


 This case requires the Court to revisit questions relating to the application of the antitrust laws to professional basketball. Cf. United States Football League v. National Football League, 842 F.2d 1335 (2d Cir. 1988); North American Soccer League v. National Football League, 670 F.2d 1249 (2d Cir. 1982), cert. denied, 459 U.S. 1074, 74 L. Ed. 2d 639, 103 S. Ct. 499 (1982). Plaintiff Joe L. Caldwell, a former professional basketball player, was suspended on December 3, 1974 by The Spirits of St. Louis Basketball Club (the "Spirits"), a member team of the now defunct American Basketball Association ("ABA"). In his complaint, Caldwell alleges that the circumstances surrounding his suspension constitute a "concerted refusal to deal" or a "group boycott" on the part of all named defendants, in violation of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1-2. Plaintiff also asserts a pendant claim for either intentional tort or prima facie tort under New York law against the Spirits, Donald Schupak, and Daniel Silna (collectively the "Spirits Defendants").

 The Spirits Defendants have moved for summary judgment. Defendant Tedd Munchak has also moved for summary judgment. The other defendants -- the American Basketball Association, Inc., Ozzie Silna, and Harry Weltman -- have not moved for summary judgment and, according to Caldwell, are in default. Pl.'s Mem. at 1 n.1. The Spirits Defendants have also moved to strike, pursuant to Fed. R. Civ. P. 56(e), portions of the plaintiff's papers in opposition to the defendants' motions for summary judgment.

 For the reasons that follow, the defendants' motions for summary judgment are granted in their entirety, and the complaint is dismissed as against the moving defendants. The Spirits Defendants' motion to strike is granted to the extent set forth herein.


 When considering a motion for summary judgment, all justifiable inferences are to be drawn in the non-movant's favor. Eastman Kodak Co. v. Image Technical Services, Inc., 119 L. Ed. 2d 265, 112 S. Ct. 2072, 2076-77 (1992); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). Accordingly, the Court will resolve any factual disputes in favor of the plaintiff.

 In 1964 plaintiff Joe L. Caldwell, who had been an all-American basketball player at Arizona State University, was drafted to play professional basketball for the Detroit Pistons, a member team of the National Basketball Association ("NBA"). Caldwell was subsequently traded to the St. Louis Hawks, also a member team of the NBA. The Hawks later moved to Atlanta and became known as the Atlanta Hawks.

 When Caldwell's contract with the Hawks expired in 1970, both the Hawks and the Carolina Cougars, an ABA team, offered Caldwell lucrative contracts. On October 30, 1970, Caldwell signed a five year contract with Southern Sports Corporation ("Southern Sports"), the corporate owner of the Cougars. The contract provided for annual compensation of $ 220,000, a pension of $ 600 per month for each of Caldwell's years of service as a professional basketball player, and life insurance equal to 100 times the cash value of the pension. Defendant Tedd Munchak, one of the owners of Southern Sports, personally guaranteed the contract. The contract expired by its own terms on October 29, 1975. See Caldwell Employment Agreement ("Caldwell Agreement") P 2, attached as Ex. A to the Affidavit of Jack David ("David Aff.").

 Because Caldwell was a nationally recognized player -- known by his fans as "Jumping Joe Caldwell" -- he had the bargaining power to negotiate a contract which incorporated by reference only certain provisions of the ABA Uniform Player's Contract ("ABAUPC"). See Caldwell Agreement P 11(b). Among those provisions of ABAUPC that were incorporated by reference was Article 3(b) which provided, in pertinent part:

Compliance with CLUB Rules. The CLUB may from time to time . . . establish reasonable rules for the government of its players. . . . The CLUB may also suspend the player for violation of any rules so established, and during such suspension, the player shall not be entitled to any compensation under this contract. All of the foregoing shall be in addition to any other rights and remedies the CLUB may have at law, equity or otherwise. When the player is fined or suspended, he shall be given notice in writing, stating the amount of the fine or the duration of the suspension and the reasons therefore.

 ABAUPC P 3(b). The Caldwell Agreement also incorporated by reference ABAUPC P 12(c)(3), which gave the Cougars the power to terminate the contract in the event of a breach by Caldwell. The Caldwell Agreement did not incorporate P 14 of ABAUPC pursuant to which the player agreed to be bound by the ABA's Constitution and by-laws. See Caldwell Aff. P 13; Caldwell v. American Basketball Ass'n, 75 Civ. 1235 (LBS), 1991 U.S. Dist. LEXIS 17902, 1991 WL 270473 at *5 (S.D.N.Y. December 11, 1991).

 The ABA by-laws provided that a suspended player was placed on a "reserve list" and that no ABA team could "contract with" a player on a member team's reserve list. *fn1" In order to remove a player from the reserve list, the team suspending the player was required to provide written notice to the Commissioner of the ABA. *fn2" The Commissioner, in turn, was required to send written notice to each ABA member team that the player was no longer on the reserve list of the team that had suspended him. These notice requirements are sometimes referred to as "waivers." The Spirits Defendants claim that Caldwell was never placed on such a reserve list and that the plaintiff has not come forward with any proof that such a reserve list existed. The plaintiff avers that when Caldwell was suspended he automatically was placed on the Spirits' reserve list by operation of the ABA by-laws.

 During the four basketball seasons between 1970 and 1974, Caldwell played ably for the Carolina Cougars and was elected to the All-Star team during two of those four years. In addition, Caldwell was elected Vice-President and later President of the ABA Players Association ("ABAPA"), the player's union. Caldwell was also selected as the player representative for the Cougars and as the Cougars' team captain.

 Munchak became Commissioner of the ABA after he sold his interest in the Cougars. Although Munchak initially told the ABA member clubs that we would agree to serve as Commissioner only for sixty days, his tenure lasted from June 1974 until July 1975. In return for his services as Commissioner, Caldwell received an annual salary of one dollar. Caldwell states in his affidavit that at this time he believed that Munchak continued to own the spirits based upon alleged representations made by Munchak that such was the case. Caldwell Aff. PP 19-21.

 The Barnes Incident and Caldwell's Suspension

 On November 20, 1974, Marvin Barnes, another star player for the Spirits, failed to appear for an important game between the Spirits and the New York Nets. Just prior to the game, Caldwell had accompanied Barnes and Marshall Boyer, Caldwell and Barnes' agent, in a limousine to LaGuardia Airport. Barnes and Boyer boarded a plane for Dayton, Ohio. Apparently Barnes' dissatisfaction with the contract he had negotiated with the Spirits motivated him to adopt this negotiating tactic. When the Spirits' Coach Jack MacKinnon inquired later that evening where Barnes was, Caldwell denied any knowledge of Barnes' whereabouts. Caldwell claims that he never advised Barnes to "jump" the team, breach his contract, or do anything else detrimental to the team.

 Although Barnes returned to the team shortly thereafter, the Spirits suspended Caldwell because they believed that Caldwell had played a role in the Barnes episode. On December 3, 1974, Caldwell received a telegram from the Spirits informing him that "THE SPIRITS OF ST LOUIS HAVE SUSPENDED YOU INDEFINITELY." David Aff., Ex. G. Caldwell was also advised of his suspension in a letter dated December 3, 1974 which stated in pertinent part:

We wish to advise you that you are hereby suspended without pay or other privileges in accordance with Section 11(c) of an agreement between you and Southern Sports Corporation entered into in October 1970. The duration of your suspension has not as yet been determined and unless good cause is shown by you to the contrary, the suspension will remain in effect for the remainder of the current basketball season and/or your contract will be terminated pursuant to Section 11(i) thereof.
The reason for the foregoing act is as follows:
(i) violation of Section 11(b) of your contract; and
(ii) tortious conduct against the Club . . . .

 Letter from Harry Weltman to Joe Caldwell, dated December 3, 1974, attached as Ex. G to David Aff. This letter also informed Caldwell that he was free to contact the Spirits or the ABA Commissioner to discuss the matter further.

 The parties are in dispute as to precise duration of Caldwell's suspension. The defendants claim that at some point in early 1975, the Spirits terminated Caldwell's services altogether. They rely on the findings of fact in Caldwell v. Munchak, 548 F. Supp. 755, 759 (N.D. Georgia 1982), discussed below, to support their position. Defendants argue in the alternative that if Caldwell's contract was not terminated by the Spirits in December 1974, it would have expired by its own terms on October 29, 1975. In contrast, Caldwell claims that he "was never told that his suspension was lifted, or that the Spirits had terminated his contract, or that other teams were free to negotiate with him." Pl.'s 3(g) Statement at 27; Caldwell Aff. P 26. In other words, Caldwell claims that he was placed on the Spirit's reserve list "forever." Pl.'s Mem. at 32.

 In early December 1974, Caldwell appealed his suspension through the ABAPA to the Office of the Commissioner. By letter dated December 6, 1974, Prentiss Q. Yancey, the General Counsel of the ABA Players' Association, urged Munchak to commence an investigation of the Caldwell suspension and to hold a hearing. On December 10, 1974, the Commissioner's Office advised Yancey that the investigation would commence promptly and that a hearing date would be set. A hearing was set for February 12, 1975 and then adjourned to March 1, 1975.

 All parties agree that ABA Commissioner Munchak told the Spirits' management that an indefinite suspension would not be permitted. Munchak also informed the parties that he was willing to recuse himself as an arbitrator because he had personally guaranteed Caldwell's basketball contract.

 Shortly thereafter, Caldwell decided he no longer wanted to pursue his remedies before the ABA but instead wanted to litigate his suspension in court. Caldwell claims that the factors that influenced his decision not to arbitrate included: the fact that he had played approximately twenty-five percent of the 1974-75 season for the Spirits and had not received any salary; that Munchak's lawsuit regarding the pension obligations was still pending; that his role as president of the ABAPA made him a target for ABA management; and that he had valuable rights that were negotiated in his contract that he was afraid he would lose in an arbitration. Caldwell Aff. P 32.

 Accordingly, in February 1975 Caldwell brought an action in federal district court in Georgia (the "Georgia action") against Munchak, as guarantor of his contract, for unpaid 1974-75 salary that Caldwell claimed was due under the contract. The dispositive issue in the Georgia action was whether the Spirits (and thus Munchak as personal guarantor) were excused from their obligation to pay Caldwell's salary because of the role that Caldwell played in the Barnes incident. After a bench trial, Judge Evans rendered a judgement in Caldwell's favor for unpaid salary in the amount of $ 220,000, plus interest, costs, and expenses. See Caldwell, 548 F. Supp. at 764. The judgment in this action was paid in full. The parties disagree as to the res judicata effect of Judge Evans's findings of fact and conclusions of law.

 Caldwell also filed the instant antitrust lawsuit in early 1975. Two factors account for the extraordinary lapse of time between the filing of the complaint and the making of the instant motions. First, in the belief that collateral litigation, especially the Georgia action, would resolve or enable the parties to resolve this controversy, this case was placed on the Court's suspense calendar at the request of the parties. Thereafter, Caldwell went into personal bankruptcy and reactivated this suit only after his discharge. See Caldwell v. American Basketball Ass'n, 75 Civ. 1235 (LBS), 1991 U.S. Dist. LEXIS 17902, 1991 WL 270473 at *4 (S.D.N.Y. December 11, 1991) (discussing procedural history of instant lawsuit).

 Other Litigation Involving Caldwell

 In addition to the Georgia action and the instant lawsuit, some of the parties to this action were involved in several other disputes, litigated in various fora, at the time Caldwell was suspended. Caldwell claims that these disputes provided defendants with a motive to conspire to keep him from playing professional basketball.

 First, a dispute arose between Caldwell and Munchak regarding pension obligations owed to Caldwell under Caldwell's contract. In 1972 Munchak brought suit against Caldwell in North Carolina state court to reform the employment contract. Munchak contended that the pension was supposed to be $ 60.00 per month for each year Caldwell played professional basketball, not $ 600.00 per month. Caldwell counterclaimed to enforce the provisions of his contract. The trial in this action was scheduled to begin on the day that Caldwell was suspended, but was adjourned several times. Ultimately a jury returned a verdict in Caldwell's favor.

 Finally, at the time of his suspension, Caldwell was one of the plaintiffs in Robertson v. National Basketball Ass'n, 389 F. Supp. 867 (S.D.N.Y. 1975), which was pending in the Southern District of New York before Judge Carter. One of the purposes of this lawsuit was to challenge the merger of the NBA and the ABA as violative of federal antitrust law.

 Caldwell's Professional History After his Suspension

 After he was suspended by the Spirits, Caldwell never again played professional basketball. In fact, no professional basketball team ever gave him a tryout or an opportunity to compete for a spot on a team.

 Caldwell states that he was at all times, ready, willing, and able to perform all obligations and duties required of him under his contract with the Spirits and that he was otherwise fit to play professional basketball at the time of his suspension. He concludes that the failure of any other NBA or ABA team to hire him evidences the boycott of his professional services that he alleges in his complaint. Defendants dispute Caldwell's ability to play basketball at a professional level at the time of his suspension on several grounds. First, defendants claim that Caldwell's age at the time of his suspension -- he was 34 years old -- made him an undesirable recruit. The defendants provide statistics, undisputed by the plaintiff, that demonstrate that less than two percent of NBA players during the five basketball seasons between 1976 and 1981 were 34 years old or older. Spirits' Defs.' Mem. at 22 n.17. Second, defendants claim that a torn ligament Caldwell sustained during the 1971 season interfered with his playing ability. Finally, defendants claim an injury sustained by Caldwell in a January 15, 1975 automobile accident adversely affected Caldwell's ability to play basketball at a professional level.

 We will discuss below, in much greater detail, the relevant facts concerning the existence of the alleged boycott of plaintiff's services.

 The Demise of the ABA

 The Spirits lost money in both of the two years the team played, an experience not uncommon to member teams of the ABA. On or about July 1976, five ABA teams were invited to join the NBA; four teams accepted the invitation. The Spirits desired to join the NBA, but were not allowed to for reasons that are not clear. The ABA ceased operations after the 1975-76 season.




 The plaintiff's § 1 claim is straightforward: he claims that "the defendants combined and conspired to blacklist him and deprive him of the opportunity to continue his career as a professional basketball player." Pl.'s Mem. at 29. Plaintiff contends that this constitutes a ...

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