NBA Lockout: NBA Players File Federal Class Action Suit

As expected, NBA players have filed a class action suit against the league and the 30 teams that comprise the NBA.  It is being reported that the players will file two separate suits; one is in the United States District Court for the District of Minnesota, and the other is expected to be in California. These forums were likely picked because of their historical friendliness to players' associations.

If you would like to peruse the complaint filed in Minnesota, you can find it HERE.

If the text of the complaint is a bit sleep-inducing for you or you just want to get the snapshot version, here you go:

1. Who are the parties?

Plaintiffs:

The Plaintiffs intend for this to be a class action suit. These four players therefore represent a) all players who are under contract to play in the NBA (the "Under-Contract Class") and b) all players who are not under contract but are seeking employment (the "Free Agent Subclass"), and c) all players who will be eligible to play in the NBA as rookies (the "Rookie Subclass"). 

Defendants:

The NBA and its 30 separately owned and independently operated teams. (We actually matched up the team names and their business entities previously here)
2. What are the Plaintiffs arguing?

There are a total of four Counts contained in the players' complaint:
  1. Count I: Violation of Section I of the Sherman Act. The Sherman Act, which stems all the way back to the late 1800's, was enacted to prevent parties from making agreements that would unreasonably restrict or have an anti-competitive effect on market competition. In this case, the players argue that the current lockout constitutes a "group boycott," an "agreement among competitors to eliminate competition for the services of major league professional basketball players in the United States and to refuse to pay contractually-owed compensation to players currently under contract with the NBA Defendants for the 201I season and beyond, in violation of Section I of the Sherman Act."

    Previously, when the NBPA was in existence, the owners were protected from this Sherman Act by way of a non-statutory labor exemption to antitrust laws. However, now that there is no labor union that offers the owners this exemption, the owners' lockout automatically turns into an agreed upon anti-competitive restraint on the players' ability to perform their chosen profession.

  2. Count II: Breach of contract. When the lockout began, the players that were previously under contract with their respective teams did not suddenly lose the contracts they had signed. The players argue that those contracts still must be honored, and the owners are "preventing members of the Under-Contract Subclass from working as professional basketball players and will refuse to pay them the compensation mandated by their existing contracts." This is a violation of the players' respective state contract laws.

  3. Count III: Tortious interference with contract. Similar to Count II, this tortious interference involves one party intentionally damaging another party's ability to fulfill its contractually mandated obligations. The players are arguing that, by way of the lockout, the owners have intentionally prevented them from fulfilling their contractual obligation and are "being deprived of the ability to practice and compete as NBA players during their very short NBA careers."

  4. Count IV: Tortious interference with prospective contractual relations. An extension from Count III, this Count argues that the owners not only prevent players under contract from performing, but also prevents unsigned players, be they free agents or rookies, from entering NBA contracts and performing. "Absent these restrictions, these Plaintiffs and subclass members, in reasonable probability, would have entered into contracts with NBA teams."
3. What do the Plaintiffs want?

The Plaintiff's prayer for relief is as follows:
  1. Court declaration that the group boycott and other anticompetitive measures are a violation of Section I of the Sherman Act. As a result of the damages incurred by way of these violations, the Plaintiffs want treble damages sustained. 
  2. Plaintiffs want a permanent injunction against the group boycott and other anticompetitive restrictions.
  3. Plaintiffs want damages they sustained as a result of the breach of contract.
  4. Plaintiffs want damages they sustained as a result of the tortious interference with their contracts.
  5. Plaintiffs want damages they sustained as a result of the tortious interference with their prospective contractual relations.
  6. Plaintiffs want the owners to make good on their outstanding contracts.
4. What about Summary Judgment?

You may recall that Billy Hunter had mentioned that they're going to seek summary judgment in this proceeding in order to declare that the shutdown is illegal. If you read through this complaint, you will not find the phrase "summary judgment" applied to the Plaintiff's position (it is only mentioned in regards to a previous lockout). 

The reason why this is so is because summary judgment is not some sort of legal trick, but is a standard part of the civil procedure that can only happen at a prescribed point in time. Summary judgment is simply a pre-trial motion that either party can make that can potentially help expedite the trial. However, the Plaintiff must wait 20 days after the initial complaint in order to submit their motion. Conversely, the Defendant can submit a motion for summary judgment at any time. 

In legal terms, summary judgment is a means for a moving party to argue that there is no genuine genuine issue of material fact and that they are immediately entitled to judgment as a matter of law.  In layman's terms, it is sort of like asking the question, "isn't this obvious?" or, in other words, the moving party is saying that since there are no facts in dispute, a trial is not necessary and the judge should be able to simply make a decision based on the applicable law. 

If the judge considers the facts at hand and decides summary judgment is appropriate, the motion can be granted and a lengthy and expensive trial can be avoided. However, if the judge finds that there are facts in dispute, the judge can deny the motion and decide that the trial must continue. In this latter scenario, the denial of the motion is not the same as "losing" the case; it merely means that the judge feels that there are factual issues that must be resolved before a jury and the proceedings must continue in order to reach a proper resolution.

5. What happens next?

The next step in this legal process is that the Defendants, the owners, must file an Answer to the players' complaint, where they will address each Count. Both parties will likely submit motions for summary judgment, and then the onus will be on the court to set a date where the judge will decide if summary judgment for either party is warranted.

 

***

Finally, since this is a Thunder blog:


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