Applicant, a former Olympic star who had signed with the Seattle
team of the National Basketball Association (NBA), brought an
action against the NBA, claiming that its threatened sanctions
against him and the Seattle team for alleged noncompliance with the
NBA's player draft rules violated the antitrust laws. The District
Court's grant of an injunction
pendente lite permitting
applicant to play for the Seattle team was stayed by the Court of
Appeals. Applicant seeks a stay of the Court of Appeals'
action.
Held: The equities as between the parties favor
reinstatement of the District Court's preliminary injunction, 28
U.S.C. § 1651(a), which will enable applicant to play, and thus
further Seattle's efforts to qualify for the imminent playoffs,
and, should it be necessary, that court can fashion appropriate
relief in light of the outcome of the litigation and the athletic
competition.
MR. JUSTICE Douglas, Circuit Justice.
This is an application for a stay of an order issued by the
Court of Appeals for the Ninth Circuit. It raises questions under
the Sherman Act concerning the legality of the professional
basketball college player draft. The hearing on the merits will be
heard by the District Court for the Central District of
California.
The Seattle club for which the applicant now plays basketball
has joined in the request for the stay, while the NBA opposes.
Under the rules of the NBA, a college player cannot be drafted
until four years after he has graduated from high school. Players
are drafted by teams in the inverse order of their finish during
the previous season. No team may negotiate with a player drafted by
another team. Applicant played with the 1968 Olympic team, and then
went to college. Prior to graduation, he signed with
Page 401 U. S. 1205
the rival American Basketball Association, but, upon turning 21,
he repudiated the contract, charging fraud. He then signed with
Seattle, of the NBA. This signing was less than four years after
his high school class had graduated (thus leaving him ineligible to
be drafted under the NBA rules). The NBA threatened to disallow the
contract, and also threatened Seattle's team with various
sanctions.
Applicant then commenced an antitrust action against the NBA. He
alleges the conduct of the NBA is a group boycott of himself, and
that, under
Fashion Originators' Guild v. FTC,
312 U. S. 457, and
Klor's v. Broadway-Hale Stores, 359 U.
S. 207, it is a
per se violation of the Sherman
Act. He was granted an injunction
pendente lite which
allowed him to play for Seattle and forbade NBA to take sanctions
against the Seattle team. The District Court ruled:
"If Haywood is unable to continue to play professional
basketball for Seattle, he will suffer irreparable injury in that a
substantial part of his playing career will have been dissipated,
his physical condition, skills and coordination will deteriorate
from lack of high-level competition, his public acceptance as a
superstar will diminish to the detriment of his career, his
self-esteem and his pride will have been injured, and a great
injustice will be perpetrated on him."
The college player draft binds the player to the team selected.
Basketball, however, does not enjoy exemption from the antitrust
laws. Thus, the decision in this suit would be similar to the one
on baseball's reserve clause which our decisions exempting baseball
from the antitrust laws have foreclosed.
See Federal Baseball
Club v. National League, 259 U. S. 200;
Toolson v. New
York
Page 401 U. S. 1206
Yankees, 346 U. S. 356.
This group boycott issue in professional sports is a significant
one.
The NBA appealed the granting of the preliminary injunction to
the Court of Appeals for the Ninth Circuit. That court stayed the
injunction, stating:
"We have considered the
status quo existing prior to
the District Court's action and the disturbance of that status
resulting from the injunction; the nature and extent of injury
which continuation of the injunction or its stay would cause to the
respective parties; and the public interest in the institution of
professional basketball and the orderly regulation of its
affairs."
The matter is of some urgency because the athletic contests are
under way, and the playoffs between the various clubs will begin on
March 23. Should applicant prevail at the trial, his team will
probably not be in the playoffs, because, under the stay order
issued by the Court of Appeals, he is unable to play. Should he be
allowed to play and his team not make the playoffs, then no one, of
course, will have been injured. Should he be allowed to play and
his team does make the playoffs, but the District Court decision
goes in favor of the NBA, then it would be for the District Court
to determine whether the NBA could disregard the Seattle victories
in all games in which he participated, and recompute who should be
in the playoffs.
To dissolve the stay would preserve the interest and integrity
of the playoff system, as I have indicated. Should there not be a
decision prior to beginning of the playoffs, and should Seattle
make the playoffs, then the District Court could fashion whatever
relief it deems equitable.
In view of the equities between the parties, 28 U.S.C. §
1651(a), I have decided to allow the preliminary injunction
Page 401 U. S. 1207
of the District Court to be reinstated. The
status quo
provided by the Court of Appeals is the
status quo before
applicant signed with Seattle. The District Court preserved the
status quo prior to the BA's action against Seattle and
Haywood. That is the course I deem most worthy of this interim
protection. The stay will issue.