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The New York Yankees and Adidas, a sports wear manufacturer, filed suit in Florida federal court May 6, 1997 against the other twenty-seven major league baseball teams and their licensing agencies. They alleged that major league baseball acted illegally to restrain competition in licensing arrangements for apparel featuring team trademarks.
IN THE UNITED STATES DISTRICT COURT
IN AND FOR THE MIDDLE DISTRICT OF
FLORIDA TAMPA DIVISION
NEW YORK YANKEES PARTNERSHIP AND
ADIDAS AMERICA, INC.,
Plaintiffs.
vs. .
MAJOR LEAGUE BASEBALL ENTERPRISES,
INC.; GREG MURPHY; MAJOR LEAGUE
BASEBALL PROPERTIES, INC.; MAJOR
LEAGUE BASEBALL CANADA, INC.;
ROBERT GAMGORT; ALLAN H. SELIG;
LEONARD S. COLEMAN; JERRY
REINSDORF; CLAUDE BROCHU; THOMAS
OSTERTAG; ETHAN ORLINSKY; ROBERT A.
DUPUY; GENE BUDIG; JERRY MCMORRIS;
WILLIAM GILES; FRED WILPON; CARL
POHLAD; ATLANTA NATIONAL LEAGUE
BASEBALL CLUB, INC.; CHICAGO
NATIONAL LEAGUE BALL CLUB, INC.; THE
CINCINNATI REDS; COLORADO ROCKIES
BASEBALL CLUB, LTD.; FLORIDA
MARLINS BASEBALL, LTD.; HOUSTON
MCLANE COMPANY, INC.; LOS ANGELES
DODGERS, INC.; MONTREAL BASEBALL
AND COMPANY LIMITED PARTNERSHIP;
STERLING DOUBLEDAY ENTERPRISES,
L.P.; PADRES, L.P.; THE PHILLIES;
PITTSBURGH ASSOCIATES; ST. LOUIS
NATIONAL BASEBALL CLUB INC.; SAN
FRANCISCO BASEBALL ASSOCIATES L.P.;
BALTIMORE ORIOLES, INC.; THE BOSTON
RED SOX BASEBALL CLUB LIMITED
PARTNERSHIP; CHICAGO WHITE SOX,
LTD.; CLEVELAND INDIANS BASEBALL
COMPANY LIMITED PARTNERSHIP;
DETROIT TIGERS, INC.; GOLDEN WEST
BASEBALL CO.; KANSAS CITY ROYALS
BASEBALL CORPORATION; MILWAUKEE
BREWERS BASEBALL CLUB, LIMITED
PARTNERSHIP; MINNESOTA TWINS, INC.;
THE OAKLAND ATHLETICS BASEBALL
COMPANY; THE BASEBALL CLUB OF
SEATTLE, L.P.; B/R RANGERS ASSOCIATES,
LTD.; TORONTO BLUE JAYS BASEBALL
CLUB; AZPB LIMITED PARTNERSHIP;
TAMPA BAY SPORTS INVESTORS, LTD.,
Defendants.
CASE NO.
97-1153-civ-T-25B
COMPLAINT PRELIMINARY AND
PERMANENT INJUNCTIVE RELIEF
REQUESTED JURY TRIAL DEMANDED
Plaintiffs New York Yankees Partnership
("Yankees") and adidas America, Inc. ("adidas")
for their complaint aver upon personal
knowledge as to their own acts and status and
upon information and belief as to all other
matters:
I. Nature of this Action
1. Organized baseball, which according to four
justices of the United States Supreme Court
began on June 19, 1846 when the New York Nine
defeated the Knickerbockers 23 to 1, today
consists of 30 major league teams (the "Major
League Clubs"). Each of the 30 Major League
Clubs are separate, independent businesses with
separate, independent owners.
2. Through a series of agreements and
understandings, the Major League Clubs work
and cooperate together to produce baseball
games. However, apart from cooperating together
to the extent necessary to produce games, the
Clubs compete with each other both on and off
the field in ventures both related and unrelated to
the exhibition of baseball games.
3. The New York Yankees are, and have long
been, the most successful baseball Club in
history. Since the Club began playing in 1903,
the Yankees have won more games (8,184), more
league pennants (34), and more World Series
championships (23) than any other Club.
4. At least since the Yankees purchased Babe
Ruth from the Boston Red Sox in January 1920,
many Clubs have expressed envy and enmity
towards the Yankees for their aggressive
competitiveness in acquiring players, for their
expansive advertising and promotion of the Club,
and for the unparalleled competitive success of
the New York Yankees both on and off the field--
including in the promotion, development, and
licensing of Yankee trademarks.
5. This action arises out of a concerted effort by
defendants (in violation of the federal and Florida
state antitrust laws, the Florida laws forbidding
tortious interference with contracts and
misappropriation of trade secrets, and the
fiduciary duties owed by defendants to the
Yankees) to combine and conspire together to
restrain competition in the businesses of the
licensing of Club trademarks and of retail and
wholesale baseball merchandise sales, and to
misappropriate rights and revenues belonging to
the Yankees and adidas.
6. For example, the defendants have recently
undertaken a concerted effort to interfere with a
Florida contract between adidas and the Yankees
pursuant to which adidas and the Yankees have
agreed that adidas will be a Yankees sponsor,
that the Yankees will license Yankee trademarks
to adidas, and that the two organizations will
cooperate in creating and marketing more
competitive merchandise using the Yankees and
adidas trademarks.
7. The defendants have also imposed a
requirement that Major League Clubs exchange
confidential pricing and other competitive data
for the purpose and effect of restraining
competition in trademark licensing, corporate
sponsorships, and retail and wholesale baseball
merchandise sales.
8. The defendants also have combined to prevent
individual Clubs from marketing merchandise
under the individual Club's own trademarks, and
to impose sanctions on any Club or licensee that
seeks to do so. Defendants seek to prevent the
Yankees and adidas from selling merchandise
with the Yankees own trademarks in the Yankees
own stadium, and to prevent adidas from
acquiring the right to use Yankee trademarks in a
competitive marketplace.
9. Defendants have combined and agreed not to
license their trademarks to adidas or to do
business with adidas except on monopolistic
terms and conditions. By combining and agreeing
to prevent Major League Clubs from competing
against one another in licensing of trademarks,
defendants have created a horizontal restraint--an
agreement among competitors on the way in
which they will compete with one another. For
example, through the 1995 Agency Agreement,
defendants have illegally conspired to establish a
horizontal division of markets, the sole purpose
of which is to stifle competition among Major
League Clubs who might wish to do business
with adidas. Defendants' conduct in this respect
also has included a group boycott, in concert with
Nike and Reebok, and other restraints of trade
without legitimate justification.
10. Defendants have also acted to penalize the
Yankees for licensing and marketing behavior
which defendants characterize as over-aggressive
competition, and in general to restrain the
competition which they find difficult,
uncomfortable, or simply contrary to their narrow
self interest.
11. Defendants have also acted to penalize adidas
for entering a sponsorship agreement with the
Yankees, including threats of litigation against
adidas for entering an agreement with the
Yankees, and to restrain competition by adidas
which they find against their narrow self interest.
12. Defendants' actions to restrict and prevent
competition in trademark licensing, corporate
sponsorships, and retail and wholesale baseball
merchandise sales are unrelated to, and outside
the reasonable scope of, any exception the
business of baseball may have from the antitrust
laws. Moreover, any exemption from the antitrust
laws the business of baseball may have cannot
justify the defendants' tortious interference with
contracts and breach of fiduciary duties.
13. The defendants' actions adversely affect
consumers and consumer welfare by limiting
consumer choice, increasing the prices consumers
pay, and adversely affecting the quality of goods
available.
14. Adidas and the Yankees seek damages and
injunctive relief for violations of the Sherman
Antitrust Act (15 U.S.C. Section 1 et seq.) and
for violations of the Florida Antitrust Act of 1980
(Flat Stat. Section 542.15 et seq.). In addition,
the Yankees seek damages and injunctive relief
for breaches of fiduciary duties under Florida law.
In addition, adidas and the Yankees seek
damages and injunctive relief for tortious
interference with contractual relations under
Florida law, misappropriation of trade secrets in
violation of the Florida Uniform Trade Secrets
Act (Flat Stat. Section 688.001 et seq.), and a
declaratory judgment pursuant to 28 U.S.C.
Sections 2201-02.
15. Since the Yankees/adidas contract was signed
on March 2, 1997, the Yankees and adidas have
made repeated attempts to resolve this
controversy short of litigation. The Yankees have,
at defendants' request, furnished copies of the
contract for defendants' review. The Yankees
have repeatedly pointed out the antitrust and
other legal problems raised by defendants'
attempts to restrain competition and to force the
Yankees to join in a boycott of adidas, and have
asked defendants to reconsider their position (see,
e.g., Exhibits 5, 8, and 13, which accompany this
Complaint).
16. Rather than reconsider their decision to
implement a cartel for the licensing of club
trademarks and for retail and wholesale baseball
merchandise sales, defendants have reaffirmed
their intent to continue and even expand their
cartel. Indeed, defendants have required the
Yankees and adidas to reveal confidential
competitive information to competitors, to require
the Yankees and adidas to submit all proposed
competitive initiatives (including competitive
initiatives permitted by all applicable rules) to a
committee composed of competitors of the
Yankees at odds with the Yankees, and to pay
"severe sanctions" if the Yankees and adidas
compete without the committee's prior
permission. (See, e.g., Exhibits 7, 15, and 16)
17. Defendants have gone so far as to take the
position that, under the threat of severe sanctions,
the Yankees and adidas must add a "subservience
clause" to their agreement that would provide
that at any time the defendants may change the
rules so as to invalidate what the Yankees and
adidas have agreed (consistent with all existing
rules) to do. (See, e.g., Exhibits 15 and 16).
Defendants concede that the Yankees/adidas
contract is consistent with existing rules.
However, defendants take the position that they
are free to change the rules at any time, and that
the Yankees and adidas must agree that if such a
change is inconsistent with their contract that the
contract will, to that extent, be invalidated
retroactively. The Yankees' compromise proposal
that the Yankees and adidas add a "subservience
clause" limited to existing rules was rejected.
18. In the last 10 days defendants have further
taken the position that the Yankees cannot even
sell in the Yankees own stadium t-shirts with the
Yankees and adidas' trademarks without
defendants' permission.
II. The Parties
A. Plaintiffs
19. Plaintiff New York Yankees Partnership is an
Ohio limited partnership and the owner and
operator of the New York Yankees, a member
Club of the American League of Professional
Baseball Clubs.
20. The Yankees' home field is in New York,
New York, and the Yankees maintain executive
and administrative offices in New York City and
Tampa, Florida.
21. The Yankees Partnership has three general
partners, each of whom resides in Tampa,
Florida. The Yankees Partnership also operates
its Major League spring training facility, its
Player Development operations, and two minor
league teams (one in the Florida State League
and the other in the Gulf Coast League) in the
Tampa and St. Petersburg metropolitan area.
22. Plaintiff adidas America, Inc. ("adidas") is a
Delaware corporation with its principal place of
business in Beaverton, Oregon.
23. Adidas and its affiliated companies are a
leading worldwide supplier of sporting goods and
apparel. Adidas is the leading supplier of soccer
related goods and apparel. Although adidas is not
now a leading supplier of baseball goods and
apparel it is making a substantial effort to
increase its competitiveness in this area,
principally through the contract between adidas
and the Yankees described herein.
B. The Major League Baseball Properties
Defendants
24. Defendant Major League Baseball
Enterprises, Inc. ("MLB Enterprises") is a New
York corporation with its principal place of
business in New York, New York.
25. Defendant Greg Murphy is the President of
MLB Enterprises.
26. Defendants Major League Baseball
Properties, Inc. ("MLB Properties") and Major
League Baseball Properties Canada, Inc. ("MLB
Properties Canada") are subsidiaries of MLB
Enterprises.
27. Defendant Robert Gamgort is the President of
MLB Properties and MLB Properties Canada.
28. The defendants identified in paragraphs 24 to
27 are sometimes referred to herein as the "MLB
Properties Defendants".
C. The Special Committee to Limit Competition
Defendants
29. On or about April 1997, defendants
established a Committee consisting of six Club
owners and Major League Baseball officials for
the purpose of monitoring and restraining retail
and wholesale merchandising, promotion, and
other competition. The Committee is sometimes
referred to herein and elsewhere as "the Special
Committee" or "the Special Committee to Limit
Competition". The defendants identified in
paragraphs 30 to 35 below are sometimes
referred to herein as "the Special Committee
Defendants".
30. Defendant Leonard S. Coleman is President
of the National League of Professional Baseball
Clubs and his principal place of business is 350
Park Avenue, New York, New York. Mr.
Coleman is, and is sued in his capacity as, a
member of the Special Committee to Limit
Competition.
31. Defendant Jerry Reinsdorf is Chairman of the
Defendant Chicago White Sox, Ltd. and his
principal place of business is 333 West 36th
Street, Chicago, Illinois. Mr. Reinsdorf is a
member of the Special Committee to Limit
Competition.
32. Defendant Claude Brochu -is General Partner
and President of Defendant Montreal Baseball
and Company Limited Partnership and his
principal place of business is 4549 Pierre-de-
Coubertin Avenue, Montreal, Quebec. Mr.
Brochu is a member of the Special Committee to
Limit Competition.
33. Defendant Thomas Ostertag is the General
Counsel of the Office of the Commissioner and
his principal place of business is 350 Park
Avenue, New York, New York. Mr. Ostertag is,
and is sued in his capacity as, a member of the
Special Committee to Limit Competition.
34. Defendant Ethan Orlinsky is the Vice
President and General Counsel of MLB
Enterprises and principal place of business is 350
Park Avenue, ~ New York. Prior to assuming his
current post, served as Director of Legal Affairs
for Major League Baseball Properties. Mr.
Orlinsky is, and is sued in his capacity as, a
member of the Special Committee to Limit
Competition.
35. Defendant Robert A. DuPuy is a partner with
Foley & Lardner and counsel for the Milwaukee
Brewers. His principal place of business is 777
East Wisconsin Avenue, Milwaukee, Wisconsin.
Mr. DuPuy is, and is sued in his capacity as, a
member of the Special Committee to Limit
Competition.
D. The Executive Council Defendants
36. The Executive Council was created pursuant
to Article II, Section 1 of the Major League
Agreement, and consists of the Commissioner,
the President of each of the Major Leagues and
eight other Club members, four appointed from
each league by its President. There is no one
currently holding the position of Commissioner.
The defendants identified in paragraphs 37 to 43
below are sometimes referred to collectively
herein as the "Executive Council Defendants".
37. Defendant Allan H. ("Bud") Selig is the
Chairman of the Executive Council. He is also
Chief Executive Officer, President, Director, and
a partner in Defendant Milwaukee Brewers
Baseball Club, Limited Partnership. Mr. Selig's
principal place of business is 201 South 46th
Street, Milwaukee, Wisconsin.
38. Defendant Gene Budig is President of the
American League of Professional Baseball Clubs.
Dr. Budig is, and is sued in his capacity as, a
member of the Executive Council. Dr. Budig's
principal place of business is 350 Park Avenue,
New York, New York.
39. Defendant Jerry McMorris is a member of the
Executive Council appointed from the National
League. He is also Chief Executive Officer,
President, and Director of Defendant Colorado
Rockies Baseball Club, Ltd. Mr. McMorris'
principal place of business is 2001 Blake Street,
Denver, Colorado.
40. Defendant William Giles is a member of the
Executive Council appointed from the National
League. He is also President, Chief Executive
Officer, and Managing General Partner of
Defendant The Phillies. Mr. Giles' principal place
of business is 3501 South Broad Street,
Philadelphia, Pennsylvania.
41. Defendant Fred Wilpon is a member of the
Executive Council appointed from the National
League. He is also Chief Executive Officer and
President of Defendant Sterling Doubleday
Enterprises, L.P. Mr. Wilpon's principal place of
business is 123-01 Roosevelt Avenue, Flushing,
New York.
42. Defendant Carl Pohlad is a member of the
Executive Council appointed from the American
League. He is also the owner and a Director of
Defendant Minnesota Twins, Inc. Mr. Pohlad's
principal place of business is 501 Chicago
Avenue South, Minneapolis, Minnesota.
43. Defendants Leonard S. Coleman, Jerry
Reinsdorf, and Claude Brochu, described in
paragraphs 30 to 32 above, are also members of
the Executive Council.
E. The Major League Club Defendants
44. Defendant Atlanta National League Baseball
Club, Inc. is a Georgia corporation and owns and
operates the Atlanta Braves.
45. Defendant Chicago National League Ball
Club, Inc. is a Delaware corporation and owns
and operates the Chicago Cubs.
46. Defendant The Cincinnati Reds is an Ohio
corporation and owns and operates the Cincinnati
Reds.
47. Defendant Colorado Rockies Baseball Club,
Ltd. is a Colorado limited partnership and owns
and operates the Colorado Rockies.
48. Defendant Florida Marlins Baseball, Ltd. is a
Florida limited partnership and owns and
operates the Florida Marlins.
49. Defendant Houston McLane Company, Inc. is
a Texas corporation and owns and operates the
Houston Astros.
50. Defendant Los Angeles Dodgers, Inc. is a
Delaware corporation and owns and operates the
Los Angeles Dodgers.
51. Defendant Montreal Baseball and Company
Limited Partnership is a Canadian corporation
and owns and operates the Montreal Expos.
52. Defendant Sterling Doubleday Enterprises,
L.P. is a Delaware limited partnership and owns
and operates the New York Mets.
53. Defendant Padres, L.P. is a Delaware limited
partnership and owns and operates the San Diego
Padres.
54. Defendant The Phillies is a Pennsylvania
limited partnership and owns and operates the
Philadelphia Phillies.
55. Defendant Pittsburgh Associates is a
Pennsylvania limited partnership and owns and
operates the Pittsburgh Pirates.
56. Defendant St. Louis National Baseball Club
Inc. is a Missouri corporation and owns and
operates the St. Louis Cardinals.
57. Defendant San Francisco Baseball Associates
L.P. is a California limited partnership and owns
and operates the San Francisco Giants.
58. Defendant Baltimore Orioles' Inc. is a
Maryland corporation and owns and operates the
Baltimore Orioles.
59. Defendant The Boston Red Sox Baseball Club
Limited Partnership is a Massachusetts limited
partnership and owns and operates the Boston
Red Sox.
60. Defendant Chicago White Sox, Ltd. is an
Illinois limited partnership and owns and
operates the Chicago White Sox.
61. Defendant Cleveland Indians Baseball
Company Limited Partnership is a Pennsylvania
limited partnership and owns and operates the
Cleveland Indians.
62. Defendant Detroit Tigers, Inc. is a Michigan
corporation and owns and operates the Detroit
Tigers.
63. Defendant Golden West Baseball Co. is a
Delaware corporation and owns and operates the
California Angels.
64. Defendant Kansas City Royals Baseball
Corporation is a Missouri corporation and owns
and operates the Kansas City Royals.
65. Defendant Milwaukee Brewers Baseball Club,
Limited Partnership is a Wisconsin limited
partnership and owns and operates the
Milwaukee Brewers.
66. Defendant Minnesota Twins, Inc. is a District
of Columbia corporation and owns and operates
the Minnesota Twins.
67. Defendant The Oakland Athletics Baseball
Company is a California limited partnership and
owns and operates the Oakland Athletics.
68. Defendant The Baseball Club of Seattle, L.P.
is a Washington limited partnership and owns
and operates the Seattle Mariners.
69. Defendant B/R Rangers Associates, Ltd. is a
Texas limited partnership and owns and operates
the Texas Rangers.
70. Defendant Toronto Blue Jays Baseball Club is
a Canadian limited partnership and owns and
operates the Toronto Blue Jays.
71. Defendant Tampa Bay Sports Investors, Ltd.
is a Florida limited partnership and owns and
operates the Tampa Bay Devil Rays.
72. Defendant AZPB Limited Partnership is a
Delaware limited partnership and owns and
operates the Arizona Diamondbacks.
73. The defendants identified in paragraphs 44 to
72 above, are sometimes referred to collectively
herein as the "Major League Club Defendants".
III. Jurisdiction and Venue
74. This Court has subject matter jurisdiction
pursuant to 28 U.S.C. Sections 1331, 1337 and
1367, 15 U.S.C. Sections 1, 15, 22 and 26 and
principles of pendant and supplemental
jurisdiction.
75. Venue is proper in this judicial district
pursuant to 28 U.S.C. Section 1391 and 15
U.S.C. Sections 15, 22 and 26 in that each of the
defendants can be found, or transacts business in
this district, and the unlawful activities occurring
or being threatened have been or will be carried
on in part within the district.
76. Jurisdiction over all defendants, and each of
them, comports with the United States
Constitution and laws and the statutes, including
the long-arm statute, of the State of Florida.
IV. Relevant Markets
77. For purposes of plaintiffs' antitrust claims, the
relevant product or service markets include
(a) the markets for rights to use the marks of
major league professional baseball clubs on
equipment, apparel, and other retail products
("professional baseball retail licensing markets");
and
(b; the markets for rights to use the marks of
major league professional baseball clubs and
otherwise to affiliate with major league
professional baseball clubs to promote products
and services through corporate sponsorship,
advertising, promotional materials, and the like
("professional baseball sponsorship markets").
78. The professional baseball retail licensing
markets involve the sale of rights to use the
marks of professional baseball clubs on apparel or
other goods. The markets include, for example,
the sale of the right to use New York Yankees or
San Francisco Giants logos on caps, sweatshirts,
novelties, household products and sporting
equipment. At competitive prices, rights of this
type have no close substitutes and are not
reasonably interchangeable with any other
products or rights, and the prices of rights of this
type are not highly elastic with respect to prices
of other products or rights.
79. The professional baseball sponsorship
markets involve the sale of rights to affiliate a
company or a product with a major league
professional baseball club or clubs to promote the
company or product. The markets include, for
example, the sale of corporate sponsorships for
professional baseball clubs; the sale of rights to
use the marks of professional baseball clubs in
the sponsor's advertisements and promotions; and
the sale of rights to have players, managers, and
other club personnel wear particular apparel and
logos during baseball games. At competitive
prices, rights of this type have no close substitutes
and are not reasonably interchangeable in use
with any other products or rights, and the prices
of rights of this type are not highly elastic with
respect to prices of other products or rights.
80. The relevant geographic markets for
assessing competition in the professional baseball
retail licensing markets and the professional
baseball sponsorship markets are
(a) the North American market;
(b) the non-North American market and
(c) the world-wide market.
81. As a result of their joint and concerted action,
defendants have and exercise market power and
monopoly power in the professional baseball
sponsorship markets and in the professional
baseball retail licensing markets.
82. There are also local and regional sub-markets
of both the professional baseball retail licensing
markets and the professional baseball sponsorship
markets, including
(i) the United States as a whole;
(ii) the State of Florida;
(iii) the New York metropolitan area; and
(iv) the Tampa/St. Petersburg metropolitan area.
83. Although the Executive Council Defendants
and the Major League Club Defendants are
involved in the exhibition of major league
professional baseball games, their participation in
the markets discussed above is not a reasonably
necessary facet or unique characteristic of
baseball exhibitions. Rather, these defendants
have chosen to participate in entirely separate
markets from the market for the business of
baseball in an effort to derive additional revenue.
84. Further, the activities of these defendants in
the markets described are not a function of,
dependent on, or related to the Major League
Baseball reserve system or to the ownership and
organizational structure of the game of baseball
as operated by these defendants.
V. Interstate Commerce
85. Defendants' conduct complained of herein has
taken place in and affected the interstate and
foreign trade and commerce of the United States.
86. Defendants' conduct complained of herein has
directly, substantially, and foreseeably restrained
such trade and commerce.
8i. The products in the professional baseball
sponsorship markets and the professional baseball
retail licensing markets are sold and/or licensed
in interstate commerce.
VI. Defendants' Conduct and its Context A.
Major League Baseball
88. Pursuant to various agreements and
understandings, including the Major League
Agreement, the American League Constitution,
the National League Constitution, and the Major
League Rules, the Major League Clubs engage in
the production and presentation of major league
baseball games. Defendants operate the only
major professional baseball leagues in the United
States and Canada.
89. Major league baseball has supply and demand
characteristics sufficiently distinct from the
supply and demand characteristics of other
baseball exhibitions and other sporting events so
that at reasonably competitive prices major
league baseball has no reasonably close
substitutes and constitutes a separate market.
90. Defendants also conduct business in markets
separate and distinct from the business of
baseball (i.e., the exhibition of major league
professional baseball games). Such separate and
distinct markets include such markets as the
professional baseball sponsorship markets and the
professional baseball retail licensing markets.
91. While the Major League Clubs cooperate in
order to produce games, they have historically
competed aggressively among themselves in all
other respects, including (but not limited to) in
the acquisition of players, coaches, and staff; the
development and marketing of trademarks and
associated retail and wholesale merchandise; and
the marketing of sponsorships.
92. Each Major League Club is independently
owned and operated and no shareholder of one
Major League Club has shareholder interests in
another Major League Club.
B. The Conflicts of Interest Between Successful
and Unsuccessful Clubs
93. By any measure, the Yankees have been the
most successful Major League Club. The Yankees
have experienced tremendous success on the
field, culminating in the 1996 World Series
Championship, the 23rd in team history. Off the
field the Yankees generate more revenues than
any other Club and have a franchise value
recently estimated by one publication at 25` more
than the next highest Major League Baseball
Club. The value of Yankee trademarks and
associated retail and wholesale merchandise, and
the value of Yankee sponsorships, have risen
with the success of the Yankees organization both
on and off the baseball field.
94. In addition to the Yankees, several other
Major League Clubs are widely recognized as
successful both on and off the field. These Clubs
include the Baltimore Orioles, the Los Angeles
Dodgers, the Atlanta Braves, and, more recently,
the Cleveland Indians and the Colorado Rockies.
95. By contrast, many Major League Clubs have
not enjoyed similar success. While the franchise
values of all Major League Clubs have increased
significantly over the past 25 years, certain Clubs
have not experienced significant success either on
or off the field. The results for these Clubs can
often be attributed to such factors as poor player
performance, mismanagement and investment
reversals. Representative of these Clubs are the
Milwaukee Brewers (who have gone 14 years, the
longest of any current Major League Club,
without winning their division) and the Montreal
Expos.
96. The disparities between successful and
unsuccessful Clubs have produced significant
conflicts of interest in the operation of Major
League Baseball. These conflicts have been
exacerbated by the recent absence of a neutral
Commissioner (an element of the structure of
baseball for more than 60 years). While the
Yankees and many other Clubs have embraced
competition between the Clubs for fans, player
services, and sources of revenue as the legal,
efficient, and proper way to insure fan interest
and league success, Clubs such as the Expos and
Brewers have repeatedly and aggressively
campaigned for the imposition of revenue sharing
arrangements in which the revenue of the more
successful Clubs is shared with the less successful
Clubs.
97. For a number of years the less successful
baseball Clubs have embarked on a concerted and
collective effort to achieve in off-field alliances
and committees what they have been unable to
achieve in the marketplace and on the field.
98. As a result of the effort of these less
successful Clubs, the Yankees' participation in
baseball's decision-making process has been
restricted and the Club's ability to protect itself
from the unfair and discriminatory conduct
alleged herein has been limited. Defendants, led
by the unsuccessful Clubs, have entered into a
series of anticompetitive arrangements that have
caused injury to the Yankees, to adidas and
similar competitors, and to consumers in general.
Although the Yankees have privately urged for a
free marketplace for all 30 Major League
Baseball Clubs, their efforts to oppose the actions
of the unsuccessful Clubs have been met by
threats and coercion from those Clubs hostile to
competition.
99. To the extent that Major League Baseball--
despite the opposition of these unsuccessful
Clubs--has allowed greater competition between
the individual Clubs, the result has been greater
success for those teams who have geared
themselves to compete with their rivals. The
Yankees, the Los Angeles Dodgers, the Baltimore
Orioles and others are some of those teams.
However, the Yankees' success on and off the
field, and their advocacy of greater competition,
has led to envy and retaliation by the less
successful Clubs, and other Clubs aligned with
them.
C. The Agency Agreement
100. The Yankees, like the 29 other Major
League Clubs, possess ownership rights in a
series of trademarks and trade names that
distinguish the Club from its competition and set
products originating from and associated with the
Yankees apart in the marketplace. These
distinctive marks are sometimes referred to
herein as the "Yankees marks". These marks
include, but are not limited to, the mark "NY"
(stylized letters)(Reg. No. 1,076,665), the mark
"NEW YORK" (stylized letters)(Reg. No.
1,677,662), the mark "NEW YORK YANKEES"
(Reg. No. 1,073,346), the mark "YANKEES"
(Reg. No. 1,571,731), the mark "YANKEES" in
script (Reg. No. 1,161,865), and the mark
"YANKEES" in script with a bat (Reg. No.
1,542,501). The Yankees' rights in these marks
are a significant asset of the Club.
101. On or about January 1, 1984 the Major
League Clubs, acting on the insistence of the less
successful Clubs, established a cartel to control
certain licensing of the marks of all (at that time)
26 Clubs (including the Yankees), as well as the
marks of Major League Baseball and its events
(such as the silhouetted batter logo and the All-
Star Game and World Series marks) and the
marks of the American and National Leagues.
This cartel was established by the Clubs pursuant
to an Agency Agreement signed with MLB
Properties, the vehicle created for operation of the
cartel. A similar agreement was signed with
MLB Properties Canada, further extending the
reach of the cartel.
102. The MLB Properties cartel was organized at
the behest of a large group of the less successful
Major League Clubs. These Clubs induced and
coerced successful Clubs, including the Yankees,
to participate in the cartel, including threatening
the Yankees and other Clubs' existing and future
local broadcast contracts, which are essential to
the financial livelihood of each Club as sources of
Club revenue.
103. To perpetuate the cartel, the less successful
Major League Clubs not only coerced Clubs such
as the Yankees to join, but imposed a provision
enabling a vote of only three-fourths of the Clubs
to continue the cartel's existence and even expand
its scope. These Clubs also imposed a provision
that requires all new Clubs entering the
American and National Leagues to join the MLB
Properties cartel. The Yankees' efforts to resist
the cartel have been unavailing because, as
Defendants have stated, they have the votes to act
without the consent of the Yankees.
104. The January 1, 1984 Agency Agreement
establishing Major League Baseball's retail
licensing and sponsorship cartel was later
renewed and amended pursuant to an Agency
Agreement dated January 1, 1991. The current
agreement establishing the cartel is the Amended
and Restated Agency Agreement dated December
1, 1995 ("the 1995 Agency Agreement"). The
Agency Agreement with MLB Properties Canada
has been similarly renewed and amended, and the
current agreement extending the cartel to Canada
is also dated December 1, 1995. Although the
Yankees have not signed these agreements,
because more than three fourths of the Major
League Clubs have agreed to their terms,
defendants take the position that the Yankees are
bound to the cartel.
105. Under the 1995 Agency Agreement, MLB
Properties is designated as the exclusive agent for
the promotional and retail licensing of the marks
of the Major League Clubs both in the United
States and in international markets. Under the
Agreement, the individual Clubs retain only
certain rights to license and otherwise exploit
their marks within their limited Home Licensing
Territory (rights which MLB Properties has
repeatedly sought to curtail).
106. MLB Properties has consistently sought the
most expansive interpretation of its rights under
the Agency Agreement. Most recently, MLB
Properties disrupted the contractual relationships
between several regional banking institutions and
a substantial number of Major League Clubs,
including the Yankees, by insisting that
"financial card services" are within the ambit of
its asserted exclusive agency to license Club logos
for "retail products". When the Yankees sought to
simply discuss MLB Properties' interpretation of
the scope of its agency, MLB Properties once
again responded that no discussion was necessary
because it "had the votes" to act without the
Yankees' consent.
107. MLB Properties' broad interpretation of its
rights under the Agency Agreements includes the
interpretation that local licensees of the Clubs,
and even the Clubs themselves operating in their
own stadiums, are required to obtain permission
from MLB Properties prior to exploitation of
their own marks.
108. To facilitate its goal of operating as the
exclusive agent for all 30 Clubs in the broadest
possible area, MLB Properties has also dealt
harshly with those Clubs who have questioned its
role and favorably with those who have supported
its monopoly. To this end, MLB Properties has
routinely ignored activities which clearly violated
its exclusive agency when such activity has been
conducted by Clubs supportive of the current
cartel (or by players signed to such favored
Clubs). On the other hand, Clubs opposed to the
cartel, such as the Yankees, have been routinely
harassed, received threats from MLB Properties,
and have had contracts clearly outside MLB
Properties' agency obstructed by the Office of the
Commissioner, the Executive Council, and MLB
Properties itself.
109. Under the 1995 Agency Agreement, MLB
Properties distributes to the Clubs the income
from MLB Properties' domestic promotional
licensing and retail licensing activities, after
subtracting its commissions for such activity
(30% of income under $50 million and 15` of
income greater than $50 million for each
category of licensing) and the fees and expenses
it incurs for trademark litigation and sub-agent
commissions. MLB Properties also retains for
itself all income from international promotional
and retail licensing and all income from sources
other than promotional and retail licensing.
110. Each Major League Club receives the same
share of income distributed by MLB Properties--
despite the fact that the individual value of the
Clubs' marks, the Clubs' contributions to the
value of their marks, the strength of the Club's
individual markets, and the Clubs' efforts to
promote themselves and their marks vary widely.
111. The marks of a small number of the larger
and more successful Clubs--including the
Yankees--account for the great bulk of the
income generated each year by MLB Properties.
Despite the wide disparity between the
contributions made by the marks of these Clubs,
each Club receives an identical distribution of the
MLB Properties income.
112. As a result of this distribution of income, the
operation of MLB Properties deprives the
individual Major League Clubs of incentives to
promote and protect their own Club's marks. -
113. The cartel hinders efficiency by creating the
incentive for free-riding. The equal distribution
of revenues from MLB Properties diminishes the
incentives for individual Clubs to promote and
invest in their marks and in the success of their
own Clubs.
114. In the absence of the cartel established and
enforced by Major League Baseball through the
Agency Agreement and MLB Properties, the
Major League Clubs would compete with one
another in the markets for professional baseball
trademark licensing, sponsorships, and retail and
wholesale merchandise--which would in turn lead
to more competitive pricing, increased output,
improved quality, and greater market efficiency.
115. Perhaps as a result of its retention of all
international income from Club marks, MLB
Properties has failed to exercise sufficient caution
in the protection of the Major League Club marks
overseas. In fact, MLB Properties may have, in
certain instances, exposed the Major League
Clubs, including the Yankees, to potential claims
that those Clubs have abandoned their ownership
rights in their Club marks.
116. Because of the Yankees' advocacy within
Major League Baseball for elimination of the
cartel, the Yankees have suffered repeated
retaliation from those Clubs supportive of the
current cartel, from the Office of the
Commissioner, from the Executive Council, and
from MLB Properties, all in violation of the
antitrust laws and the fiduciary duties owed by
such defendants to the Yankees.
D. Absence of Business Justification for the
Agency Agreement
117. The MLB Properties cartel is not reasonably
necessary to serve any legitimate or
procompetitive goal. Rather, independent
licensing by each team would increase
competition and provide incentives for each Club
to market and promote themselves and their
marks. None of the justifications frequently
advanced by the unsuccessful Clubs in support of
the MLB Properties cartel will withstand the
scrutiny required by this Court.
118. Major League Baseball frequently advances
the protection of on-field competitive balance as a
justification for organized anticompetitive
behavior. However, to the extent such balance is
deemed desirable or necessary, the restriction of
competition in corporate promotion and retail
licensing activities has no reasonable relationship
to achieving on-field competitive balance of the
Major League Clubs. In fact, such sharing often
creates incentives for inactivity by poor-
performing Clubs, who will derive revenue from
other Clubs more concerned with the success of
their teams and their marks. Further, other
mechanisms are far more likely to achieve results
and far less likely to impede competition between
the Clubs.
119. There is also no efficiency created by the
bundling of Club marks for licensing as a unit to
promotional sponsors or retail products
manufacturers. Rather, corporate sponsors and
licensees often prefer to associate themselves with
the marks of one or a few teams beyond the local
areas of such teams. The cartel, instead of
generating a superior product, forces the 30 Clubs
to sell together a product that sponsors and
licensees often find unnecessary to pay for and
generally unwieldy.
E. The MLB Properties Cartel's Restraints on
Competition by adidas for Sponsorship and Retail
Licensing Rights
120. The 1995 Agency Agreement with MLB
Properties pools all Major League Club
trademarks and makes MLB Properties the
exclusive licensing agent of such marks for,
among other rights, the national sponsorship and
retail licensing rights for the New York Yankees
and other Major League Clubs.
121. Adidas is a major athletic footwear and
apparel corporation who wishes to negotiate with
MLB Properties for sponsorship and retail
licensing rights. Adidas is currently the fourth
largest athletic footwear and apparel corporation
in the United States market (adidas is currently
fourth in the United States athletic footwear
market, with a market share of approximately
5.2%). Adidas has as its goal to increase its
competitiveness in the United States markets for
athletic footwear and apparel in general, and the
United States markets for baseball footwear and
apparel in particular. Licensing from Major
League Clubs is particularly important as part of
this effort in order to compete with Nike, Inc.
("Nike") and Reebok International, Ltd.
("Reebok"). Nike and Reebok together dominate
the United States athletic footwear market,
holding 44% and 16% of the United States
athletic footwear market respectively.
122. The 1995 Agency Agreement illegally
restrains competition among Major League Clubs
in the licensing of professional baseball
trademarks to the injury of adidas. Among other
restraints, the 1995 Agency Agreement bars the
Major League Clubs from engaging in
negotiations with adidas for national sponsorship
or licensing rights for athletic footwear or
apparel. MLB Properties has also asserted that
the 1995 Agency Agreement bars the New York
Yankees from licensing adidas to use the
Yankees' mark on retail goods in the Yankees'
local market, including Yankee stadium.
123. Through the 1995 Agency Agreement, the
Major League Clubs, together with MLB
Properties, have also illegally conspired to divide
the professional baseball sponsorship markets and
the professional baseball retail licensing markets
among competitors in those markets, the Major
league Clubs. This horizontal division of markets
has no purpose except the stifling of competition
among the Major League Clubs with resultant
injury to adidas and others who wish to do
business in these markets.
124. MLB Properties and the 1995 Agency
Agreement severely restrict adidas' ability to
exercise its rights under the adidas Agreement.
For example, MLB Properties has already stated
that adidas is prohibited from retailing on a
national basis or even in Yankee Stadium
products using the Yankees marks in which there
is substantial consumer interest.
125. MLB Properties has for some time sought to
establish a significant licensing and sponsorship
agreement with a major athletic footwear and
apparel corporation. (In fact, an agreement with a
major athletic footwear and apparel corporation
was stated to be an essential aspect of the success
of MLB Enterprises and MLB Properties; Greg
Murphy, the President of MLB Enterprises, was
hired with a mandate to arrange such a deal.)
However, the MLB Properties' cartel has
unreasonably restrained competition to the injury
of adidas by negotiating exclusively for
sponsorship and licensing rights for athletic
footwear and apparel with its larger competitors,
Nike and Reebok. MLB Properties has not
provided adidas the same opportunity to submit
proposals for promotions and licensing as has
been given to Nike and Reebok.
126. At one point, MLB Properties had reached
an agreement, subject to approval by the Major
League Clubs, regarding a joint sponsorship
arrangement with Nike and Reebok. In that
agreement, MLB Properties, Nike, and Reebok
agreed to require the Major League Clubs to
boycott adidas with respect to sponsorship and
licensing rights for athletic footwear and
apparel. The agreement was rejected as
financially insufficient when presented by MLB
Properties to the Major League Clubs. Although
to date MLB Properties has not broadly licensed
sponsorship or retailing rights to athletic
footwear and apparel, MLB Properties has not
pursued meaningful negotiations with adidas
concerning such rights.
127. Following public announcement of the
Yankees' agreement with adidas, MLB Properties
made clear that meaningful negotiations would
not take place with adidas by threatening lawsuits
against adidas and disparaging the relationship
between adidas and the New York Yankees and
its Managing General Partner, George M.
Steinbrenner, III. In addition, MLB Properties
has interpreted the 1995 Agency Agreement in an
arbitrary and capricious fashion to punish adidas
for entering the agreement with the Yankees.
F. The Yankees' Agreement with adidas
128. The anticompetitive effects of the current
cartel are well demonstrated by defendants'
reaction to the Yankees' new sponsorship
arrangement with adidas, including retaliation
and threats of retaliation against the Yankees and
adidas. Defendants' actions concerning the
Yankees' agreement with adidas also underscore
the breaches of the fiduciary duties owed to the
Yankees by the Special Committee Defendants,
Defendant Selig, the Executive Council
Defendants.
129. On March 2, 1997, after extended
negotiations at the Yankees' Legends Field
headquarters in Tampa, FL, the Yankees and
adidas executed an extensive sponsorship
agreement ("the adidas Agreement"). The parties
agreed to undertake to develop projects for their
mutual benefit to associate adidas with the
Yankees, and adidas agreed to pay the Yankees a
substantial annual sponsorship fee through a
combination of cash and in-kind products.
130. Although the Yankees have not signed the
1995 Agency Agreement, Major League Baseball
itself has stated that the adidas Agreement
complies with the 1995 Agency Agreement.
131. Because the adidas Agreement contains
certain significant sensitive and proprietary
information of both parties, the parties agreed
that the terms of the Agreement should remain
confidential. The Yankees and adidas issued a
limited press release announcing the agreement
on March 3, 1997. However, no specific terms of
the adidas Agreement were disclosed to the press.
132. Since March 2, 1997 both the Yankees and
adidas have endeavored to take advantage of the
opportunities provided by their new business
relationship. However, their efforts to achieve
promotional and marketing synergies have been
hampered by the actions of the Special
Committee to Limit Competition, its members,
Allan H. Selig, the Executive Council, and MLB
Properties.
G. The Interference by Major League Baseball
Officials with the adidas Agreement
133. On March 3, 1997 counsel for the Yankees
wrote to Defendant Selig regarding anonymous
press leaks by Major League Baseball personnel,
including personnel from the Office of the
Commissioner, extremely critical of the adidas
Agreement and clearly designed to create
negative publicity regarding the Agreement.
134. The Yankees received a response from
counsel for Mr. Selig the next day. Failing to
discuss steps taken to investigate the press leaks,
such counsel instead insisted that a copy of the
adidas Agreement be turned over to the Office of
the Commissioner--despite the confidentiality of
the adidas Agreement--pursuant to an alleged
"long-standing requirement that any significant
contract to be entered into by a Club be reviewed"
by that Office.
135. The "long standing requirement" referred to
guidelines issued by the Office of the
Commissioner regarding certain transfers of
team ownership rights (typically broadcasting
contracts, stadium leases, or loan agreements)
referred to by baseball officials as "control
interest transfers". Although the regulations
purport to grant the Office of the Commissioner
the authority to review prior to signing all
contracts with a potential duration of five years or
longer, in practice this aspect of the
Commissioner's review powers have been largely
ignored. Indeed, the requirement has keen almost
completely ignored for contracts--like the adidas
Agreement--clearly unrelated to any plausible
change of ownership. Further, there is no
provision in the 1995 Agency Agreement
requiring submission to or approval by the
Executive Council or the Office of the
Commissioner.
136. The Yankees offered a proposal designed to
assure protection of the contracting parties'
proprietary rights while permitting the Acting
Commissioner or his counsel to review the
Agreement to assure themselves that there was no
conflict with Major League rules.
137. After a copy of the adidas Agreement was in
fact produced to the Acting Commissioner and
his counsel, the Major League Executive Council,
convening and acting without the knowledge of
George M. Steinbrenner, III (Managing General
Partner of the Yankees and a member of the
Executive Council appointed from the American
League), demanded that a copy of the adidas
Agreement be immediately turned over to
officials of the Office of the Commissioner and of
MLB Properties.
138. Accompanying their demand that the
contract be turned over, the Executive Council
imposed a $25,000 fine against the Yankees for
each day beyond the day after the demand that
the adidas Agreement was not produced.
139. In light of the threat of such a steep fine, the
Yankees turned over the adidas Agreement the
next day. In a letter accompanying the contract,
the Yankees reiterated their concerns that they
were subjected to Major League approval
requirements not imposed on other, more
favored, Clubs and sought assurances that the
competitively sensitive contract would not be
shared with any other team or team owner or, as
had been a repeated problem, leaked from the
Office of the Commissioner or MLB Properties to
the press.
140. The fact of the production of the contract,
and the fines threatened by the Executive
Council, were in fact immediately leaked to the
press by baseball personnel.
141. Despite the Yankees' requests, the members
of the Executive Council (again, absent Mr.
Steinbrenner) next required--as a condition of the
contract's supposed "approval" and despite the
fact that each owner on the Council directly
competes with the Yankees--that each council
member be permitted to individually review the
adidas Agreement.
142. Upon review of the adidas Agreement,
Defendant Selig and the Executive Council
acknowledged that its terms do not violate the
Yankees' obligations under Major League Rules
or the terms of the 1995 Agency Agreement.
143. Despite this recognition, the Executive
Council nevertheless imposed a condition on the
adidas Agreement that is wholly unprecedented
and completely without a basis in the Major
League Agreement, the Major League Rules, or
even the 1995 Agency Agreement. Defendant
Selig and the Executive Council, citing the
undertaking by adidas and the Yankees to
"develop projects for their mutual benefit to
associate adidas with the Yankees and for the
exploitation of that association", required the
Yankees and adidas to present any proposed
projects for review and approval prior to agreeing
to such projects (see Exhibits 15 and 16 attached
hereto). The six-member reviewing committee
includes the National League President, counsel
to the Milwaukee Brewers, the General Counsel
of the Office of the Commissioner, the General
Counsel of MLB Properties, and Claude Brochu
and Jerry Reinsdorf, two owners of competing
Major League Clubs who have been particularly
aggressive in their personal interrogation of Mr.
Steinbrenner regarding the adidas Agreement
("the Special Committee to Limit Competition").
Acting on behalf of Mr. Selig, the Executive
Council, and the Special Committee to Limit
Competition, counsel for the Milwaukee Brewers
emphasized that failure to present projects prior
to implementation "will be dealt with in a most
severe manner".
144. This requirement of review and approval by
the Yankees' competitors, a requirement that
even the Control Interest Transfer guidelines do
not impose, presents a naked restraint by the
Special Committee to Limit Competition, the
Executive Council, the Office of the
Commissioner, MLB Properties, and the Major
League Clubs on the rights of the Yankees and
adidas to compete effectively in the market for
professional baseball sponsorships and retail
licensing relationships.
145. Moreover, the requirement that
competitively sensitive information be made
available to the Yankees' competitors (and
through them to adidas' competitors) itself
violates the antitrust laws' prohibition of
concerted exchanges of competitive price and
other data. Indeed, Defendant Jerry Reinsdorf,
who received a copy of the adidas Agreement as
a member of both the Executive Council and the
Special Committee to Limit Competition, has
admitted publicly his intention to use the
confidential pricing information contained in the
adidas Agreement for the competitive benefit of
his Club, the Chicago White Sox.
146. The Major League Club Defendants have
acted in an arbitrary and discriminatory manner
against the Yankees and adidas, and in violation
of the fiduciary duties arising under Florida law
from their mutual contracts and agreements with
the Yankees, by establishing this unprecedented
oversight committee to monitor the Yankees'
agreement with adidas.
147. The Yankees have been denied the right to
develop, free of the knowledge and consents of its
competitors, a relationship with a significant
corporate sponsor. Adidas has now been denied
the right to associate itself with the most
successful team in baseball history. Absent
judicial relief, the Yankees and adidas will
continue to suffer injury. The acts of the
Defendants alleged herein have and, if unabated,
will continue to diminish the value of both the
Yankees franchise and adidas.
148. Defendants' misconduct is causing
irreparable injury to the Yankees and adidas, and
unless enjoined, will continue to do so. Plaintiff
has no adequate remedy at law with respect to
future misconduct by Defendants.
H. Anticompetitive Effect and Injury to adidas
and the Yankees
149. As a direct, actual, probable, and intended
result of defendants' unlawful agreements and
conduct, defendants have substantially lessened
competition in the professional baseball
sponsorship markets and the professional baseball
retail licensing markets. Defendants' conduct has
the effect of increasing the prices consumers pay
in these markets. In addition, output is lower than
it would otherwise be and is unresponsive to
consumer preferences But for the unlawful
restrictions of the cartel, the Yankees and others
would offer for sale many sponsorship and retail
licensing opportunities to adidas and others not
now available in the marketplace.
150. As a direct, actual, probable, and intended
result of defendants' conduct, the Yankees,
adidas, and others have been denied the right to
compete freely in the professional baseball
sponsorship markets and the professional baseball
retail licensing markets and have been denied
profit to which they would otherwise be entitled.
The Yankees have been denied profits as the
owner of the Yankee marks, as well as the right
to enter into efficient and lucrative relationships
with adidas and others wishing to associate
themselves with the Yankees and to offer
products for sale in the consumer marketplace.
Adidas has been denied profits from lost
sponsorship and retail opportunities with the
Yankees and others. The Yankees and adidas
have also suffered substantial injury from
defendants' efforts to punish and harass them for
their opposition to the MLB Properties cartel.
Absent judicial relief, the Yankees and adidas
will continue to suffer injury through at least
November 30, 2000.
151. The MLB Properties cartel has also
diminished incentives to create innovative
products in the professional baseball sponsorship
markets and the professional baseball retail
licensing markets, to market and promote the
Major League Clubs and their marks nationally,
and otherwise to compete vigorously in the
professional baseball sponsorship markets and the
professional baseball retail licensing markets.
152. The 1995 Agency Agreement, and
defendants' continuing conduct, present a
significant threat of future injury to the Yankees
and adidas in particular and to competition in
general.
VII. Claims for Relief
A. Restraint of Trade in Violation of Section 1 of
the Sherman Act
153. Plaintiffs incorporate the averments of
paragraphs 1 through 152 above.
154. Since at least January 1, 1984 and
continuing through the present, defendants have
acted in concert with the purposes, intent, and
effect of unreasonably restraining trade and
commerce. Defendants operate a horizontal
cartel, through which the Major League Clubs
have agreed not to compete with each other and
thereby to fix prices and to reduce output below
competitive levels in the (i) professional baseball
retail licensing markets and (ii) the professional
baseball sponsorship markets. Through MLB
Properties, the Agency Agreements and
defendants' conduct, defendants have, with only
limited exceptions, precluded all competition for
the licensing of the Major League Club marks.
155. The intentional and anticompetitive conduct
by which defendants have restrained output in the
professional baseball retail licensing markets and
the professional baseball sponsorship markets is
not reasonably necessary to the furtherance of any
legitimate, procompetitive goal of Major League
Baseball, MLB Properties, the Executive
Council, the Special Committee or the Major
League Clubs.
156. Defendants' anticompetitive conduct has
directly and proximately caused injury and
damage to the business and property of the
Yankees and adidas, as set forth above. The
Yankees and adidas will continue to be so injured
unless defendants are enjoined from continuing to
engage in the foregoing violations of law.
157. The actual, probable, and intended effects of
the foregoing acts and practices, and the
continuing course of defendants' anticompetitive
conduct, has caused injury to consumers and to
competition in the professional baseball retail
licensing markets and the professional baseball
sponsorship markets as set forth above.
158. Pursuant to Section 16 of the Clayton Act,
15 U.S.C. Section 26, the Yankees and adidas
are entitled to an injunction to restrain these
violations of the Sherman Act, 15 U.S.C. Section
1, and to an award of the costs of this action,
including reasonable attorneys' fees.
159. Pursuant to Section 4 of the Clayton Act, 15
U.S.C. Section 15, the Yankees and adidas are
also entitled to recover treble the damages that
they have suffered or will suffer as a result of
these violations of the Sherman Act.
WHEREFORE, Plaintiffs demand judgment
granting to them:
(a) the damages sustained as a result of
defendants' violations of the Sherman Act in an
amount to be determined at trial;
(b) a trebling of any and all damages awarded
pursuant to 15 U.S.C. Section 15;
(c) an award of interest and costs, pursuant to 15
U.S.C. Section 15;
(d) an award of reasonable attorneys' fees
pursuant to 15 U.S.C. Section 15;
(e) an award of preliminary or permanent
injunctive relief, pursuant to 15 U.S.C. Section
26, to the degree the Court may deem
appropriate; and
(f) such other and further relief as this Court
deems just and proper.
B. Monopolization in Violation of Section 2 of
the Sherman Act
160. Plaintiffs incorporate the averments of
paragraphs 1 through 159 above.
161. Since at least January 1, 1984 and
continuing through the present, defendants have
engaged in acts, practices, and a continuing
course of conduct by which they intended, and
did in fact acquire, maintain, and perpetuate their
monopoly in (i) the professional baseball retail
licensing markets; and (ii) the professional
baseball sponsorship markets.
162. In furtherance of these violations,
defendants have engaged in a continuing course
of the following exclusionary anticompetitive and
monopolistic practices, among others:
(a) defendants have conveyed to MLB Properties
the exclusive rights (with only limited
exceptions) to license the Major League Club
marks;
(b) defendants have agreed not to compete with
one another in the professional baseball retail
licensing markets and the professional baseball
sponsorship markets;
(c) defendants have repeatedly retaliated against
the Yankees for their advocacy within Major
League Baseball against the cartel and the
defendants' monopoly power in the professional
baseball retail licensing markets and the
professional baseball sponsorship markets; and
(d) defendants have formed a group boycott
against adidas and have combined and agreed not
to license their trademark to adidas or to do
business with adidas except on monopolistic
terms and conditions.
163. Defendants' anticompetitive conduct has
already proximately caused injury and damage to
the business and property of the Yankees and
adidas, and the Yankees and adidas will continue
to be so injured unless defendants are enjoined
from continuing to engage in the foregoing
violations of law.
164. The actual, probable, and intended effects of
the foregoing acts, and the continuing course of
defendants' anticompetitive conduct, has caused
injury to consumers and to competition in the
professional baseball retail licensing markets and
the professional baseball sponsorship markets, as
set forth above.
165. Pursuant to Section 16 of the Clayton Act,
15 U.S.C. Section 26, the Yankees and adidas
are entitled to an injunction to restrain this
violation of the Sherman Act, 15 U.S.C. Section
2, and to an award of the costs of this action,
including reasonable attorneys' fees.
166. Pursuant to Section 4 of the Clayton Act, 35
U.S.C. Section 15, the Yankees and adidas are
also entitled to recover treble the damages that
they have suffered or will suffer as a result of this
violation of the Sherman Act.
WHEREFORE, Plaintiffs demand judgment
granting to them:
(a) the damages sustained as a result of
defendants' violations of the Sherman Act in an
amount to be determined at trial;
(b) a trebling of any and all damages awarded
pursuant to 15 U.S.C. Section 15;
(c) an award of interest and costs, pursuant to 15
U.S.C. Section 15;
(d) an award of reasonable attorneys' fees
pursuant to 15 U.S.C. Section 15;
(e) an award of preliminary or permanent
injunctive relief, pursuant to 15 U.S.C. Section
26, to the degree the Court may deem
appropriate; and
(f) such other and further relief as this Court
deems just and proper.
C. Attempt to Monopolize in Violation of Section
2 of the Sherman Act
167. Plaintiffs incorporate the averments of
paragraphs 1 through 166 above.
168. Since at least January 1, 1984 and
continuing through the present, defendants have
engaged in the conduct herein with the specific
intent to monopolize
(i) the professional baseball retail licensing
markets and
(ii) the professional baseball sponsorship
markets. Through MLB Properties and the
Agency Agreements defendants have been able to
obtain, with limited exceptions, exclusive control
over all Major League Club marks. These marks
constitute the principal goods in the professional
baseball retail licensing markets and the
professional baseball sponsorship markets.
Defendants have attempted to expand their
control of these markets, and to monopolize both
the professional baseball retail licensing markets
and the professional baseball sponsorship markets
by, among other things, refusing to approve
contracts such as the adidas Agreement without
the imposition of illegal restraints, harassing
plaintiffs over other business activities, and
engaging in other wrongful acts set forth above to
prevent plaintiffs from competing in the market.
169. Defendants' specific intent is to monopolize
the professional baseball retail licensing markets
and the professional baseball sponsorship markets
and to exercise price control and limit output in
those markets.
170. There is a dangerous probability that
defendants will succeed in monopolizing the
professional baseball retail licensing markets and
the professional baseball sponsorship markets.
Defendants already exercise significant control
over the principal goods in these markets, the
individual Major League Club marks.
171. Defendants' anticompetitive conduct has
already proximately caused injury and damage to
the business and property of the Yankees and
adidas, and the Yankees and adidas will continue
to be so injured unless defendants are enjoined
from continuing to engage in the foregoing
violations of law.
172. The actual, probable and intended effects of
the foregoing acts, and the continuing course of
defendants' anticompetitive conduct, has caused
injury to consumers and to competition in the
professional baseball retail licensing markets and
the professional baseball sponsorship markets, as
set forth above.
173. Pursuant to Section 16 of the Clayton Act,
15 U.S.C. Section 26, the Yankees and adidas
are entitled to an injunction to restrain this
violation of the Sherman Act, 15 U.S.C. Section
2, and to an award of the costs of this action,
including reasonable attorneys' fees.
174. Pursuant to Section 4 of the Clayton Act, 15
U.S.C. Section 15, the Yankees and adidas are
also entitled to recover treble the damages that
they have suffered or will suffer as a result of this
violation of the Sherman Act.
WHEREFORE, Plaintiffs demand judgment
granting to them:
(a) the damages sustained as a result of
defendants' violations of the Sherman Act in an
amount to be determined at trial;
(b) a trebling of any and all damages awarded
pursuant to 15 U.S.C. Section 15;
(c) an award of interest and costs, pursuant to 15
U.S.C. Section 15;
(d) an award of reasonable attorneys' fees
pursuant to 15 U.S.C. Section 15;
(e) an award of preliminary or permanent
injunctive relief, pursuant to 15 U.S.C. Section
26, to the degree the Court may deem
appropriate; and
(f) such other and further relief as this Court
deems just and proper.
D. Combination and Conspiracy to Monopolize
in Violation of Section 2 of the Sherman Act
175. Plaintiffs incorporate the averments of
paragraphs 1 through 174 above.
176. Since at least January 1, 1984 and
continuing through the present, defendants have
conspired and combined with one another to
monopolize trade in (i) the professional baseball
retail licensing markets and (ii) the professional
baseball sponsorship markets. The substantial
terms of the conspiracy were, among others, that
members of the cartel would transfer to MLB
Properties the right to license all individual
Major League Club marks and that, with only
limited exceptions, members of the cartel would
not compete in the licensing of individual Major
League Club marks. The members of the MLB
Properties cartel also agreed to prevent any Clubs
wishing to do so from leaving the cartel and to
require all new Clubs entering the American and
National Leagues to join the cartel as a condition
of their membership. Defendants have conspired
and combined to with one another to harass and
coerce the Yankees and adidas from competing in
the professional baseball retail licensing markets
and the professional baseball sponsorship
markets.
177. In furtherance of the combination and
conspiracy, defendants committed the acts set
forth above, including, among others, agreeing to
license individual Major League Club marks
(with few exceptions) exclusively through the
MLB Properties cartel, refusing to deal with
adidas, refusing to approve contracts such as the
adidas Agreement without the imposition of
illegal restraints, harassing plaintiffs over other
business activities, and engaging in other
wrongful acts set forth above to prevent plaintiffs
from competing in these markets.
178. Defendants specifically intended that the
effect of their unlawful combination and
conspiracy would be to monopolize the
professional baseball retail licensing markets and
the professional baseball sponsorship markets and
to exercise price control and limit output in those
markets.
179. Defendants' anticompetitive conduct has
already proximately caused injury and damage to
the business and property of the Yankees and
adidas, and the Yankees and adidas will continue
to be so injured unless defendants are enjoined
from continuing to engage in the foregoing
violations of law.
180. The actual, probable and intended effects of
the foregoing acts, and the continuing course of
defendants' anticompetitive conduct, has caused
injury to consumers and to competition in the
professional baseball retail licensing markets and
the professional baseball sponsorship market, as
set forth above.
181. Pursuant to Section 16 of the Clayton Act,
15 U.S.C. Section 26, the Yankees and adidas
are entitled to an injunction to restrain this
violation of the Sherman Act, 15 U.S.C. Section
2, and to an award of the costs of this action,
including reasonable attorneys' fees.
182. Pursuant to Section 4 of the Clayton Act, 1
U.S.C. Section 15, the Yankees and adidas are
also entitled to recover treble the damages that
they have suffered or will suffer as a result of this
violation of the Sherman Act.
WHEREFORE, Plaintiffs demand judgment
granting to them:
(a) the damages sustained as a result of
defendants' violations of the Sherman Act in an
amount to be determined at trial;
(b) a trebling of any and all damages awarded
pursuant to 15 U.S.C. Section 15;
(c) an award of interest and costs, pursuant to 15
U.S.C. Section 15;
(d) an award of reasonable attorneys' fees
pursuant to 15 U.S.C. Section 15;
(e) an award of preliminary or permanent
injunctive relief, pursuant to 15 U.S.C. Section
26, to the degree the Court may deem
appropriate; and
(f) such other and further relief as this Court
deems just and proper.
E. Restraint of Trade in Violation of Section 1
of the Sherman Act (adidas Agreement)
183. Plaintiffs incorporate the averments of
paragraphs 1 through 182 above.
184. The agreements, combinations and
concerted actions of the Special Committee to
Limit Competition Defendants, Allan H. Selig,
the Executive Council Defendants, the MLB
Properties Defendants and the Major League
Club Defendants in imposing disclosure
requirements to competitors during the review of
the adidas Agreement, and in imposing the
current restrictions on the Yankees' agreement
with adidas are unreasonable restraints of trade in
violation of Section 1 of the Sherman Act.
185. Plaintiff, have been injured in their trade
and business as a direct and proximate
consequence of Defendants' violations of the
antitrust laws, including their preventing the
Yankees from retaining a substantial portion of
their revenues from licensing of the Yankee
marks; and their preventing adidas from
licensing those marks.
186. Pursuant to Section 16 of the Clayton Act,
15 U.S.C. Section 26, the Yankees and adidas
are entitled to an injunction to restrain this
violation of the Sherman Act, 15 U.S.C. Section
1, and to an award of the costs of this action,
including reasonable attorneys' fees.
187. Pursuant to Section 4 of the Clayton Act, 15
U.S.C. Section 15, the Yankees and adidas are
also entitled to recover treble the damages that
they have suffered or will suffer as a result of this
violation of the Sherman Act.
WHEREFORE, Plaintiffs demand judgment
granting to them:
(a) the damages sustained as a result of
defendants' violations of the Sherman Act in an
amount to be determined at trial;
(b) a trebling of any and all damages awarded
pursuant to 15 U.S.C. Section 15;
(c) an award of interest and costs, pursuant to 15
U.S.C. Section 15;
(d) an award of reasonable attorneys' fees
pursuant to 15 U.S.C. Section 15;
(e) an award of preliminary or permanent
injunctive relief, pursuant to 15 U.S.C. Section
26, to the degree the Court may deem
appropriate; and
(f) such other and further relief as this Court
deems just and proper.
F. Restraint of Trade in the State of Florida in
Violation of Section 542.18 of the Florida
Antitrust Act of 1980
188. Plaintiffs incorporate the averments of
paragraphs 1 through 187 above.
189. Since at least January 1, 1984 and
continuing through the present, defendants have
acted in concert with the purpose, intent, and
effect of unreasonably restraining trade and
commerce within the State of Florida. Defendants
operate a horizontal cartel, through which the
Major League Clubs have agreed not to compete
with each other and thereby to fix prices and to
reduce output below competitive levels in (i) the
Florida professional baseball retail licensing
markets and (ii) the Florida professional baseball
sponsorship markets. Through MLB Properties,
the Agency Agreements and defendants' conduct,
defendants have, with only limited exceptions,
precluded all competition for the licensing of the
individual Major League Club marks.
190. The intentional and anticompetitive conduct
by which defendants have restrained output in the
Florida professional baseball retail licensing
markets and the Florida professional baseball
sponsorship markets is not reasonably necessary
to the furtherance of any legitimate,
procompetitive goal of Major League Baseball,
MLB Properties, the Executive Council, the
Special Committee, or the Major League Clubs.
191. Defendants' anticompetitive conduct has
directly and proximately caused injury and
damage to the business and property of the
Yankees and adidas, as set forth above. The
Yankees and adidas will continue to be so injured
unless defendants are enjoined from continuing to
engage in the foregoing violations of law.
192. The actual, probable, and intended effects of
the foregoing acts and practices, and the
continuing course of defendants' anticompetitive
conduct, has caused injury to consumers within
the State of Florida and to competition in the
Florida professional baseball retail licensing
markets and the Florida professional baseball
sponsorship markets, as set forth above.
193. Pursuant to the Florida Antitrust Act of
1980, Fla. Stat. Section 542.23, the Yankees and
adidas are entitled to an injunction to restrain this
violation of Section 542.18 of the Act.
194. Pursuant to Fla. Stat. Section 542.22(1), the
Yankees and adidas are also entitled to recover
treble the damages that they have suffered or will
suffer as a result of this violation of Section
542.18 of the Act, and to an award of the costs of
this action, including reasonable attorneys' fees.
WHEREFORE, Plaintiffs demand judgment
granting to them:
(a) the damages sustained as a result of
defendants' violations of the Florida Antitrust Act
of 1980 in an amount to be determined at trial;
(b) a trebling of any and all damages awarded
pursuant to Fla. Stat. Section 542.22(1);
(c) an award of costs, including reasonable
attorneys' fees, pursuant to Fla. Stat. Section
542.22(1);
(d) an award of preliminary or permanent
injunctive relief, pursuant to Fla. Stat. Section
542.23 to the degree the Court may deem
appropriate; and
(e) such other and further relief as this Court
deems just and proper.
Monopolization in the State of Florida in
Violation of 542.19 of the Florida Antitrust Act
of 1980
195. Plaintiffs incorporate the averments of
paragraphs 1 through 194 above.
196. Since at least January 1, 1984 and
continuing through the present, defendants have
engaged in acts, practices, and a continuing
course of conduct by which they intended, and
did in fact, acquire, maintain, and perpetuate
their monopoly in (i) the Florida professional
baseball retail licensing markets; and (ii) the
Florida professional baseball sponsorship
markets.
197. In furtherance of these violations,
defendants have engaged in a continuing course
of the following exclusionary anticompetitive and
monopolistic practices, among others:
(a) defendants have conveyed to MLB Properties
the exclusive rights (with only limited
exceptions) to license the Major League Club
marks;
(b) defendants have agreed not to compete with
one another in the professional baseball retail
licensing markets and the professional baseball
sponsorship markets; (c) defendants have
repeatedly retaliated against the Yankees for their
advocacy within Major League Baseball against
the cartel and the defendants' monopoly power in
the Florida professional baseball retail licensing
markets and the Florida professional baseball
sponsorship markets; and
(d) defendants have formed a group boycott
against adidas and have combined and agreed not
to license their trademark to adidas or to do
business with adidas except on monopolistic
terms and conditions.
198. Defendants' anticompetitive conduct has
already proximately caused injury and damage to
the business and property of the Yankees and
adidas, and the Yankees and adidas will continue
to be so injured unless defendants are enjoined
from continuing to engage in the foregoing
violations of law.
199. The actual, probable and intended effects of
the foregoing acts, and the continuing course of
defendants' anticompetitive conduct, has caused
injury to consumers and to competition in the
Florida professional baseball retail licensing
markets and the Florida professional baseball
sponsorship markets, as set forth above.
200. Pursuant to Fla. Stat. Section 542.23, the
Yankees and adidas are entitled to an injunction
to restrain this violation of Section 542.19 of the
Florida Antitrust Act of 1980.
201. Pursuant to Fla. Stat. Section 542.22(1), the
Yankees and adidas are also entitled to recover
treble the damages that they have suffered or will
suffer as a result of this violation of the Act and
an award of the costs of this action, including
reasonable attorneys' fees.
WHEREFORE, Plaintiffs demand judgment
granting to them:
(a) the damages sustained as a result of
defendants' violations of Section 542.19 of the
Florida Antitrust Act of 1980 in an amount to be
determined at trial;
(b) a trebling of any and all damages awarded
pursuant to Fla. Stat. Section 542.22(1);
(c) an award of costs, reasonable attorneys' fees,
pursuant to Fla. Stat. Section 542.22(1);
(d) an award of preliminary or permanent
injunctive relief, pursuant to Fla. Stat. Section
542.23, to the degree the Court may deem
appropriate; and
(f) such other and further relief as this Court
deems just and proper.
H. Attempt to Monopolize in the State of Florida
in Violation of Section 542.19 of the Florida
Antitrust Act of 1980
202. Plaintiffs incorporate the averments of
paragraphs 1 through 201 above.
203. Since at least January 1, 1984 and
continuing through the present, defendants have
engaged in the conduct alleged herein with the
specific intent to monopolize (i) the Florida
professional baseball retail licensing markets; and
(ii) the Florida professional baseball sponsorship
markets. Through MLB Properties and the
Agency Agreements defendants have been able to
obtain, with limited exceptions, exclusive control
over all individual Major League Club marks.
These marks constitute the principal goods in the
Florida professional baseball retail licensing
markets and the Florida professional baseball
sponsorship markets. Defendants have attempted
to expand this control of the market, and to
monopolize the Florida professional baseball
retail licensing markets and the Florida
professional baseball sponsorship markets by,
among other things, refusing to approve contracts
such as the adidas Agreement without imposing
illegal restraints, harassing plaintiffs over other
business activities, and engaging in other
wrongful acts set forth above to prevent plaintiffs
from competing in the market.
204. Defendants' specific intent is to monopolize
the Florida professional baseball retail licensing
markets and the Florida professional baseball
sponsorship markets and to exercise price control
and limit output in those markets.
205. There is a dangerous probability that
defendants will succeed in monopolizing the
Florida professional baseball retail licensing
markets and the Florida professional baseball
sponsorship markets. Defendants already
exercise significant control over the principal
goods in the market, the individual Major League
Club marks.
206. Defendants' anticompetitive conduct has
already proximately caused injury and damage to
the business and property of the Yankees and
adidas, and the Yankees and adidas will continue
to be so injured unless defendants are enjoined
from continuing to engage in the foregoing
violations of law.
207. The actual, probable and intended effects of
the foregoing acts, and the continuing course of
defendants' anticompetitive conduct, has caused
injury to Florida consumers and to competition in
the Florida professional baseball retail licensing
markets and Florida professional baseball
sponsorship markets, as set forth above.
208. Pursuant to Fla. Stat. Section 542.23, the
Yankees and adidas are entitled to an injunction
to restrain this violation of Section 542.19 of the
Florida Antitrust Act of 1980.
209. Pursuant to Fla. Stat. Section 542.22(1), the
Yankees are also entitled to recover treble the
damages that they have suffered or will suffer as
a result of this violation of the Act, and to an
award of the costs of this action, including
reasonable attorneys' fees.
WHEREFORE, Plaintiffs demand judgment
granting to them:
(a) the damages sustained as a result of
defendants' violations of Section 542.19 of the
Florida Antitrust Act of 1980, in an amount to be
determined at trial;
(b) a trebling of any and all damages awarded
pursuant to Fla. Stat. Section 542.22(1);
(c) an award of costs, including reasonable
attorneys' fees, pursuant to Fla. Stat. Section
542.22(1);
(d) an award of preliminary or permanent
injunctive relief, pursuant to Fla. Stat. Section
542.23 to the degree the Court may deem
appropriate; and
(e) such other and further relief as this Court
deems just and proper.
I. Combination and Conspiracy to Monopolize in
the State of Florida in Violation of Section
542.19 of the Florida Antitrust Act of 1980
210. Plaintiffs incorporate the averments of
paragraphs 1 through 209 above.
211. Since at least January 1, 1984 and
continuing through the present, defendants have
conspired and combined with one another to
monopolize trade in (i) the Florida professional
baseball retail licensing markets and; (ii) the
Florida professional baseball sponsorship
markets. The substantial terms of the conspiracy
were, among others, that members of the cartel
would transfer to MLB Properties the right to
license all individual Major League Club marks
and that, with only limited exceptions, members
of the cartel would not compete in the licensing
of individual Club marks. The members of the
MLB Properties cartel also agreed to prevent any
Clubs wishing to do so from leaving the cartel
and to require all new Clubs entering the
American and National Leagues to join the cartel
as a condition of their membership. Defendants
have conspired and combined to with one another
to harass and coerce the Yankees and adidas from
competing in the Florida professional baseball
retail licensing markets and Florida professional
baseball sponsorship markets.
212. In furtherance of the combination and
conspiracy, defendants committed the acts set
forth above, including, among others, agreeing to
license individual Major League Club marks
(with few exceptions) exclusively through the
MLB Properties cartel, refusing to deal with
adidas, refusing to approve contracts such as the
adidas Agreement without illegal restraints,
harassing plaintiffs over other business activities,
and engaging in other wrongful acts set forth
above to prevent plaintiffs from competing in the
market.
213. Defendants specifically intended that the
effect of their unlawful combination and
conspiracy would be to monopolize the Florida
professional baseball retail licensing markets and
Florida professional baseball sponsorship markets
and to exercise price control and limit output in
those markets.
214. Defendants' anticompetitive conduct has
already proximately caused injury and damage to
the business and property of the Yankees and
adidas, and the Yankees and adidas will continue
to be so injured unless defendants are enjoined
from continuing to engage in the foregoing
violations of law.
215. The actual, probable and intended effects of
the foregoing acts, and the continuing course of
defendants' anticompetitive conduct, has caused
injury to consumers and to competition in the
Florida professional baseball retail licensing
markets and Florida professional baseball
sponsorship markets, as set forth above.
216. Pursuant to Section 542.23 of the Florida
Antitrust Act of 1980, the Yankees and adidas
are entitled to an injunction to restrain this
violation of Section 542.19 of the Act.
217. Pursuant to the Act, Fla. Stat. Section
542.22(1), the Yankees are also entitled to
recover treble the damages that they have
suffered or will suffer as a result of this violation
of the Act, and to an award of the costs of this
action, including reasonable attorneys' fees.
WHEREFORE, Plaintiffs demand judgment
granting to them:
(a) the damages sustained as a result of
defendants' violations of the Florida Antitrust Act
of 1980, Fla. Stat. Section 542.19, in an amount
to be determined at trial;
(b) a trebling of any and all damages awarded
pursuant to Fla. Stat. Section 542.22(1);
(c) an award of costs, including reasonable
attorneys' fees, pursuant to Fla. Stat. Section
542.22(1);
(d) an award of preliminary or permanent
injunctive relief, pursuant to Fla. Stat. Section
542.23, to the degree the Court may deem
appropriate; and
(e) such other and further relief as this Court
deems just and proper.
J. Restraint of Trade in the State of Florida in
Violation of Section 542.18 of the Florida
Antitrust Act of 1980 (adidas Agreement)
218. Plaintiffs incorporate the averments of
paragraphs 1 through 217 above.
219. The agreements, combinations and
concerted actions of the Special Committee to
Limit Competition Defendants, Allan H. Selig,
the Executive Council Defendants, the MLB
Properties Defendants and the Major League
Club Defendants in imposing disclosure
requirements to competitors during the review of
the adidas Agreement, and in imposing the
current restrictions on the Yankees' agreement
with adidas are unreasonable restraints of trade in
violation of Fla. Stat. Section 542.18.
220. Plaintiffs have been injured in their trade
and business as a direct and proximate
consequence of Defendants' violations of the
Florida Antitrust Act of 1980, including their
preventing the Yankees from retaining a
substantial portion of their revenues from
licensing of the Yankee marks; and their
preventing adidas from licensing those marks.
221. Pursuant to Section 542.23 of the Act, the
Yankees and adidas are entitled to an injunction
to restrain this violation.
222. Pursuant to Section 542.22(1) of the Act,
the Yankees and adidas are also entitled to
recover treble the damages that they have
suffered or will suffer as a result of this violation
of the Act, and to an award of the costs of this
action, including reasonable attorneys' fees.
WHEREFORE, Plaintiffs demand judgment
granting to them:
K. Declaratory Judgment Pursuant to 28 U. S . C.
Sections 2201-02
223. Plaintiffs incorporate the averments of
paragraphs 1 through 222 above.
224. As discussed above, on or about January 1,
1984, the (at that time) 26 Major League Clubs
entered into an Agency Agreement under which
MLB Properties was designated as the exclusive
agent for the promotional and retail licensing of
the marks of the Major League Clubs.
(a) the damages sustained as a result of
defendants' violations of Section 542.18 of the
Florida Antitrust Act of 1980 in an amount to be
determined at trial;
(b) a trebling of any and all damages awarded
pursuant to Fla. Stat. Section 542.22(1);
(c) an award of costs, including reasonable
attorneys' fees pursuant to Fla. Stat. Section
542.22(1);
(d) an award of preliminary or permanent relief,
pursuant to Fla. Stat. Section 542.23, to _ the
Court may deem appropriate; and
(e) such other and further relief as this Court
deems just and proper injunctive the degree
225. The January 1, 1984 Agency Agreement
was renewed and amended pursuant to an Agency
Agreement dated January 1, 1991. The January 1,
1991 Agency Agreement was in turn renewed
and amended by the current agreement
establishing Major League Baseball's sponsorship
and retail licensing cartel, the 1995 Agency
Agreement.
226. On March 2, 1997, the Yankees and adidas
executed an extensive sponsorship agreement.
The adidas Agreement, which was negotiated and
signed in Florida and is to be substantially
performed in the state, is subject to the provisions
of Florida law.
227. Defendants, citing the 1995 Agency
Agreement and alleged Major League Baseball
rules, have demanded disclosure of the
confidential Adidas Agreement and have
attempted to impose restrictions on performance
by the Yankees.
228. The Yankees have not signed the 1995
Agency Agreement.
229. The 1995 Agency Agreement constitutes an
illegal horizontal cartel through which the Major
league Clubs have agreed not to compete with
each other and to fix prices and reduce output
below competitive levels in both the professional
baseball retail licensing markets and the
professional baseball sponsorship markets. These
markets are unrelated to and entirely separate
from the market for the exhibition of the
professional baseball games and the business of
baseball.
230. Defendants have also interpreted the 1995
Agency Agreement in manner contrary to and
broader than its proper scope and have, allegedly
pursuant to the terms of the 1995 Agency
Agreement, acted to restrain trade and injure
competition, including through requiring the
Yankees to disclose confidential competitive
information regarding the adidas Agreement to
their competitors and requiring, as a condition of
approval of the adidas Agreement, that all
projects undertaken pursuant to the Agreement be
disclosed to and approved by the Special
Committee to Limit Competition in advance of
implementation.
231. Arising from the transfer by the Yankees to
MLB Properties of rights in the Yankees marks
as well as MLB Properties' position as a agent for
the Yankees, MLB Properties owes fiduciary
duties to the Yankees. As a result of the inherent
conflict with the fiduciary duties MLB Properties
owes to each of the other 29 teams, as well as the
actions of MLB Properties in response to the
adidas Agreement, MLB Properties has breached
its fiduciary duties to the Yankees.
232. Plaintiffs contend that the Yankees are not
bound by the terms of the 1995 Agency
Agreement because requiring the Yankees to
adhere to its terms violates Florida contract law
and federal and Florida antitrust law. Plaintiffs
also contend that the Yankees are not bound by
the 1995 Agency Agreement because defendants
(including MLB Properties) have materially
breached their fiduciary obligations owed to the
Yankees.
233. Plaintiffs also contend that the adidas
Agreement is a valid and enforceable contract
under Florida law and that the Yankees may
comply with its terms without regard to the
restraints imposed by defendants.
234. The defendants have made clear their
position that the Yankees are bound to the terms
of the 1995 Agency Agreement and that
performance by the Yankees under the adidas
Agreement may be subject to restrictions imposed
by, among others, the Special Committee to Limit
Competition, the Executive Counsel, and MLB
Properties.
235. There thus exists a substantial, present, and
justiciable controversy between the Yankees and
adidas, on one hand, and the Special Committee
to Limit Competition Defendants, the Executive
Council Defendants, the MLB Properties
Defendants, and the Major League Club
Defendants on the other hand, concerning the
obligations of the Yankees under the 1995
Agency Agreement, the validity of the adidas
Agreement, and the validity of the restrictions
imposed on the Yankees performance under the
adidas Agreement by defendants.
236. By reason of the foregoing, plaintiffs are
entitled to a declaration that the Yankees are not
bound by the terms of the 1995 Agency
Agreement, that the adidas Agreement is a valid
and enforceable contract under Florida law, and
that the restrictions imposed on the Yankees
performance by defendants are null and void.
WHEREFORE, Plaintiffs demand judgment
granting to them:
(a) a declaration that the Yankees are not bound
to the terms of the 1995 Agency Agreement,
which is unenforceable as a result of federal and
Florida state antitrust laws, Florida contract law,
and Florida laws regarding fiduciary duty, and
that the adidas Agreement is a validly executed
and enforceable contract; and
(b) such other and further relief as this Court
deems just and proper.
L. Tortious Interference with Contractual
Relations under Florida Law
237. Plaintiff incorporate the averments of
paragraphs 1 through 236 above.
238. On March 2, 1997 plaintiffs the Yankees
and adidas entered into a broad sponsorship
contract. The parties entered into the contract in
Florida and provided that it is to be governed by
Florida law. In addition, a substantial part of the
acts to be performed under the contract will occur
in the State of Florida.
239. The Special Committee to Limit
Competition Defendants, Allan H. Selig, the
Executive Council Defendants, and the MLB
Properties Defendants are aware of the March 2,
1997 contract between the Yankees and adidas
America, Inc. -
240. These defendants have intentionally
damaged the relationship between the Yankees
and adidas by the forced disclosure of the terms
of the Agreement to competitors of the Yankees
(who in turn may disclose those terms to
competitors of adidas) and the unilateral
imposition, without any basis in the rules of
baseball, of a committee of the Yankees'
competitors to monitor and approve in advance
projects undertaken pursuant to the contract.
241. The Yankees and adidas have been damaged
and continue to be substantially and irreparably
damaged by the tortious interference with adidas
Agreement by Defendants in an amount to be
determined at trial.
242. In engaging in the foregoing, the
defendants have been guilty of willful, wanton,
and malicious misconduct.
WHEREFORE, Plaintiffs demand judgment
granting to them:
(a) the damages sustained as a result of the
conduct averred herein in an amount to be
determined at trial;
(b) an award of punitive damages in an amount to
be determined at trial;
(c) an award of interest and costs;
(d) an award of reasonable attorneys' fees; and
(e) such other and further relief as this Court
deems just and proper.
M. Breach of Fiduciary Duty under Florida Law
243. Plaintiff the Yankees incorporates the
averments of paragraphs 1 through 242 above.
244. As result of their mutual contracts,
understandings and cooperation, the defendants
owe fiduciary duties to the Yankees. In particular,
the Major League Club Defendants owe to the
Yankees a fiduciary duty of loyalty not to exploit
the Yankees for their own benefit and the MLB
Properties Defendants owe fiduciary duties to the
Yankees arising from their role as the Yankees'
agent.
245. The defendants, in violation of their
fiduciary duties, have forced disclosure of the
adidas Agreement and imposed the Special
Committee to Limit Competition in order to
punish and damage the Yankees. These
defendants are denying the Yankees potential
revenue and appropriating a substantial portion
of those revenues for themselves.
246. The MLB Properties Defendants, as the
exclusive agents to all 30 Clubs, have an,
unresolved conflict of interest arising from the
terms of the Agency Agreement, which conflict
of interest has been exacerbated by the fact that
they have acted in a manner contrary to the
Yankees' interests in response to the Yankees'
execution of the adidas Agreement.
247. The MLB Properties Defendants have
breached their fiduciary duties to the Yankees by
failing to adequately protect the rights of the
Yankees in the Yankees marks overseas.
248. MLB Properties' aggressive efforts to expand
its control over the Major League Club marks
(including the Yankees marks) has exposed the
Yankees to possible claims that they have
abandoned their rights in these marks. On this
basis, the MLB Properties Defendants have also
breached their fiduciary obligations to the
Yankees.
249. By acting in their own self-interest and
unfairly against the interests of the Yankees, the
defendants have breached their fiduciary duty to
plaintiff.
250. As a result of the defendants' breach of their
fiduciary duties, the Yankees have suffered and
will suffer damage and have sustained and will
sustain irreparable harm for which there is no
adequate remedy at law.
251. In engaging in the foregoing actions, the
defendants have been guilty of willful, wanton,
and malicious misconduct.
252. Further, to the extent that the 1995 Agency
Agreement is an otherwise valid agreement
between the parties, the Yankees are entitled to
rescission of the agreement as a result of
defendants' breaches of their fiduciary duties.
WHEREFORE, Plaintiff demands judgment
granting to it:
(a) the damages sustained as a result of the
breach averred herein in an amount to be
determined at trial;
(b) awards of preliminary and permanent
injunctive relief;
(c) an award of punitive damages in an amount to
be determined at trial;
(d) an award of interest and costs;
(e) an award of reasonable attorneys' fees; and
(f) such other and further relief as this Court
deems just and proper.
N. Misappropriation of Trade Secrets Pursuant to
Fla. Stat. Section 688.001 et seq.
253. Plaintiffs incorporate the averments of
paragraphs 1 through 252 above.
254. This is an action under the Florida Uniform
Trade Secrets Act, Fla. Stat. Section 688.001 et
seq..
255. As a result of the fiduciary duties owed by
defendants to the Yankees, and the express
assurances regarding the confidentiality of the
adidas Agreement provided by the defendants to
the plaintiffs regarding their "review" of that
agreement, plaintiffs and defendants established a
confidential relationship which gave rise to a
duty on defendants' part to maintain the secrecy
and limit the use of plaintiffs' trade secret and
other confidential information.
256. Pursuant to this confidential relationship
and as a part of the "review" of the adidas
Agreement demanded by defendants, the Yankees
disclosed their own trade secret and other
confidential information (as well as the trade
secret and other confidential information of
adidas) to defendants.
257. Defendants, in their position of trust and
confidence, have used this trade secret and
confidential information, and have threatened to
continue in the future to use this trade secret and
confidential information, to the injury of
plaintiffs.
258. As a result of the defendants' misuse of this
trade secret and confidential information, the
Yankees and adidas have suffered and will
continue to suffer damage and have sustained and
will continue to sustain irreparable harm for
which there is no adequate remedy at law.
259. In engaging in the foregoing actions, the
defendants have been guilty of willful, wanton,
and malicious conduct.
WHEREFORE, Plaintiffs demand judgment
granting to them:
(a) the damages, pursuant to Fla. Stat. Section
688.004(1), sustained as a result of the breach
averred herein in an amount to be determined at
trial;
(b) awards of preliminary and permanent
injunctive relief pursuant to Fla. Stat. Section
688.003;
(c) an award of exemplary damages pursuant to
Fla. Stat. Section 688.004(2) in an amount to be
determined at trial;
(d) an award of interest and costs;
(e) an award of reasonable attorneys' fees
pursuant to Fla. Stat. Section 688.005;
(f) such other and further relief as this Court
deems just and proper.
VIII. Prayer for Relief
WHEREFORE, Plaintiffs demand judgment
against Defendants granting to them:
(a) Monetary damages sustained as a result of
injury due to the Defendants' violations of the
Sherman Act, 15 U.S.C. Section 1, in an amount
to be ascertained at trial pursuant to 15 U.S.C.
Section 15;
(b) Monetary award of treble damages for injury
due to the Defendants' violations of the Sherman
Act, 15 U.S.C. Section 1, in an amount to be
ascertained at trial pursuant to 15 U.S.C. Section
15;
(c) Monetary damages sustained as a result of
injury due to the Defendants' violations of the
Sherman Act, 15 U.S.C. Section 2, in an amount
to be ascertained at trial pursuant to 15 U.S.C.
Section 15;
(d) Monetary award of treble damages for injury
due to the Defendants' violations of the Sherman
Act, 15 U.S.C. Section 2, in an amount to be
ascertained at trial pursuant to 15 U.S.C. Section
15;
(e) Preliminary or permanent injunctive relief, to
the degree the Court may deem appropriate,
enjoining each and all the Defendants' continuing
violations of the Sherman Act, pursuant to 15
U.S.C. Section 26;
(f) Monetary damages sustained as a result of
injury due to the Defendants' violations of the
Florida Antitrust Act of 1980, Fla. Stat. Section
542.18, in an amount to be ascertained at trial
pursuant to Fla. Stat. Section 542.22(1);
(g) Monetary award of treble damages for injury
due to the Defendants' violations of the Florida
Antitrust Act of 1980, Fla. Stat. Section 542.18,
in an amount to be ascertained at trial pursuant to
Fla. Stat. Section 542.22(1);
(h) Monetary damages sustained as a result of
injury due to the Defendants' violations of the
Florida Antitrust Act of 1980, Fla. Stat. Section
542.19, in an amount to be ascertained at trial
pursuant to Fla. Stat. Section 542.22(1);
(i) Monetary award of treble damages for injury
due to the Defendants' violations of the Florida
Antitrust Act of 1980, Fla. Stat. Section 542.19,
in an amount to be ascertained at trial pursuant to
Fla. Stat. Section 542.22(1);
(j) Preliminary or permanent injunctive relief, to
the degree the Court may deem appropriate,
enjoining each and all the Defendants' continuing
violations of the Florida Antitrust Act of 1980,
pursuant to Fla. Stat. Section 542.23;
(k) A declaration that the Yankees are-not bound
to the terms of the 1995 Agency Agreement,
which is unenforceable as a result of federal and
Florida state antitrust laws, Florida contract law,
and Florida laws regarding fiduciary duty, and
that the adidas Agreement is a validly executed
and enforceable contract.
(l) Monetary damages sustained as a result of
injury due to Defendants Allan H. Selig, the
Special Committee to Limit Competition
Defendants, the Executive Council Defendants,
and MLB Properties' tortious interference with
contract in an amount to be ascertained at trial;
(m) Monetary damages sustained as a result of
Defendants' breach of their fiduciary duties to the
Yankees in an amount to be ascertained at trial;
(n) To the extent the 1995 Agency Agreement is
otherwise valid, rescission of the agreement for
Defendants' breach of their fiduciary duties;
(o) Punitive damages sustained as a result of
injury due to the Defendants' breach of their
fiduciary duty in an amount to be ascertained at
trial;
(p) Preliminary or permanent injunctive relief, to
the degree the Court may deem appropriate,
enjoining the Defendants' continuing breach of
fiduciary duty;
(q) Monetary damages sustained as a result of
injuries caused by Defendants' misappropriation
of trade secrets in an amount to be ascertained at
trial;
(r) Punitive damages sustained as a result of
Defendants' misappropriation of trade secrets in
an amount to be ascertained at trial;
(s) Interest to the extent provided by law;
(t) All costs, disbursements and expenses
incurred by Plaintiff as a result of Defendants'
unlawful conduct, including reasonable attorneys'
fees;
(u) such other and further relief as this Court
deems just and proper.
IX. Jury Trial Demanded
Plaintiffs demand trial by jury of all issues so
triable in this cause.
DATED this 6th day of May, 1997
David Boies, Atty.
CRAVATH, SWAINE & MOORE
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
(212) 474-1000 (212)
474-3700 (FAX)
and
By:
Robert E. Banker, Atty.
Florida Bar No. 003310
Thomas T. Steele, Atty.
Florida Bar No. 158613
FOWLER, WHITE, GILLEN, BOGGS,
VILLAREAL AND BANKER, P.A.
Post Office Box 1438
Tampa, FL 33601-1438
(813) 228-7411
(813) 229-8313 (FAX)
Trial Counsel for Plaintiff New York Yankees
Partnership
By:
Jonathan D. Schiller, Atty.
KAYE, SCHOLER, FIERMAN, HAYS &
HANDLER, LLP
McPherson Building
901 Fifteenth Street,
N.W. Suite 1100
Washington, DC 20005
(202) 682-3500
(202) 682-3580 (FAX)
and
By:
Benjamin H. Hill, III, Atty.
Florida Bar. No. 094585
HILL, WARD & HENDERSON, P.A.
Post Office Box 223
Tampa, FL 33601-2231
(813) 221-3900
(813) 221-2900 (FAX)
Trial Counsel for Plaintiff adidas America, Inc.
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