Nassau Sports v. Peters
352 F.Supp. 870 (1972)
Rule of Law:
A professional sports team is entitled to a preliminary injunction to enforce a one-year option clause in a player's contract, preventing the player from joining a rival team, when the team can demonstrate irreparable harm and a likelihood of success on its contract claim, even if the player raises an unproven antitrust defense against the league's overall structure.
Facts:
- Garry Peters, a professional hockey player, signed a one-year 'Standard Player's Contract' with the Boston Bruins of the National Hockey League (NHL) for the 1971-1972 season.
- The contract contained a 'reserve clause' giving the club an option to renew the contract for the following season on the same terms, with salary to be determined by mutual agreement or arbitration.
- The contract also contained a clause allowing the club to assign the contract to any other professional hockey club.
- In June 1972, Nassau Sports, owner of the new NHL franchise New York Islanders, acquired the rights to Peters' services from the Boston Bruins through the NHL expansion draft.
- After Nassau Sports and Peters failed to agree on a salary for the 1972-1973 season, Peters signed a three-season contract on July 15, 1972, with the New York Raiders, a team in the rival World Hockey Association (WHA) owned by Metropolitan Hockey Club, Inc.
- Peters failed to report to Nassau Sports' training camp in September 1972, as required by the assigned contract.
Procedural Posture:
- Nassau Sports sued Garry Peters and Metropolitan Hockey Club, Inc. in the New York Supreme Court, Nassau County, seeking to enjoin Peters from playing for Metropolitan.
- The state court granted Nassau Sports an ex parte temporary restraining order.
- The defendants removed the action to the United States District Court for the Eastern District of New York based on diversity of citizenship.
- Nassau Sports' subsequent motion to remand the case back to state court was denied by the federal court.
- Nassau Sports then applied to the federal court for a preliminary injunction to continue the restraint on Peters, while the defendants counter-moved to vacate the temporary restraining order.
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Issue:
Is a professional hockey club entitled to a preliminary injunction to enforce a one-year option clause in a player's contract and prevent that player from playing for a rival league's team, despite the player's defense that the option clause is part of an illegal monopoly under antitrust laws?
Opinions:
Majority - Neaher, District Judge
Yes, Nassau Sports is entitled to a preliminary injunction. A personal services contract for an athlete of exceptional talent, including a one-year option clause, is enforceable through a negative injunction. The court found that under Massachusetts law, which governs the contract, such option clauses are valid. The balance of hardships decidedly favors Nassau Sports, which paid a substantial sum for Peters' contract rights and would suffer irreparable harm from the loss of his unique talents, a harm that cannot be adequately compensated by monetary damages. Peters' defense that the NHL's reserve clause system violates antitrust laws is, at this preliminary stage, an unproven and questionable claim that is not a sufficient excuse for breaching a specific, divisible contractual commitment. The court held that Peters' personal service obligation is severable from the complex and unresolved antitrust questions surrounding the NHL's structure, and enforcing the one-year option does not make the court a party to monopolistic conduct.
Analysis:
This decision illustrates the judicial tendency to separate an individual's personal service obligations from broader, more complex antitrust challenges to a professional sports league's structure. The court prioritizes the enforcement of a discrete, bargained-for contract term (a one-year option) over a player's attempt to void it by alleging systemic illegality. This ruling strengthens the hand of established leagues in disputes with upstart rivals by making it more difficult for players to 'jump' leagues in breach of their existing option years. It establishes that a defendant cannot easily use a complex and unproven antitrust claim as a shield against a preliminary injunction for a clear breach of contract, especially when the plaintiff can demonstrate irreparable harm.
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