White v. National Football League
766 F. Supp. 2d 941
D. Minnesota2011Background
- Players allege NFL violated Article X, §1(a)(i) via renegotiation of broadcast contracts to maximize total revenues for SSA years 2009-2010.
- SSA and CBA were created to settle labor disputes and share revenues; broadcasting deals generate about half of NFL revenues.
- NFL opted out of the 2006-2012 CBA/SSA in 2008, anticipating a possible 2011 lockout, prompting contract extensions with broadcasters.
- Special Master found NFL violated Article X, §1(a)(i) by giving NBC an extra game and ESPN an extra right in 2010 in exchange for amended work-stoppage provisions.
- Court reviews Special Master’s legal conclusions de novo and factual findings for clear error; New York law governs contract interpretation.
- Remedies discussion: Special Master did not address injunctive relief; court orders briefing/hearing on remedies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Meaning of 'consistent with sound business judgment' in X, §1(a)(i). | Players contend it imposes extra duties beyond good faith and best efforts. | NFL contends it tempers but does not enlarge the obligations. | Qualified the duties but did not excuse breach; court construes to require maximizing revenues. |
| Good faith obligation separate from best efforts. | Good faith requires fair dealing; renegotiations harmed players’ joint interests. | SSA does not require good faith beyond overall maximization of revenues. | NFL breached good faith by renegotiating to advance its own interests over joint revenues. |
| Best efforts obligation and its scope. | Best efforts must be exercised to maximize SSA revenues, not just avoid loss. | Best efforts not require sacrificing existing contracts or incurring losses. | NFL breached best efforts by renegotiating contracts to disadvantage Players and favor its own leverage. |
| Whether injunction relief is warranted for SSA breaches. | Remedies should include injunctive relief to prevent ongoing harm. | Remedies require further development; no injunction decided yet. | Remedies pending; court to hold hearing on relief, including potential injunction. |
Key Cases Cited
- Ashokan Water Servs., Inc. v. New Start, LLC, 807 N.Y.S.2d 550 (N.Y. Civ. Ct. 2006) (good faith includes not destroying the other party's fruits of the contract)
- Bloor v. Falstaff Brewing Corp., 454 F.Supp. 258 (S.D.N.Y. 1978) (best efforts take into account promisor's capabilities and do not bankrupt promisor)
- Bloor v. Falstaff Brewing Corp., 601 F.2d 609 (2d Cir. 1979) (best efforts require more than good faith)
- Dist. Lodge 26 of Int'l Ass'n of Machinists & Aerospace Workers v. United Techs. Corp., 689 F.Supp.2d 219 (D. Conn. 2010) (contract terms interpreted with consideration of long-term interests and reasonable efforts)
- Monex Fin. Servs. Ltd. v. Nova Info. Sys., Inc., 657 F.Supp.2d 447 (S.D.N.Y. 2009) (reasonable efforts interpreted in contract context)
- Reda v. Eastman Kodak Co., 649 N.Y.S.2d 555 (N.Y.App.Div. 1996) (interpretation gives words their ordinary meaning and harmonizes contract terms)
- Jennifer Realty Co. v. 511 W. 232nd Owners Corp., 746 N.E.2d 131 (N.Y. 2002) (good faith includes absence of malice and unconscionable advantage)