John MATUSZAK et al., Appellants, v. HOUSTON OILERS, INC., Appellee.
No. 1098
Court of Civil Appeals of Texas, Houston (14th Dist.).
Oct. 30, 1974
In the absence of any contention or evidence that the Town of Corinth, by the act of organizing itself into a municipality, was seeking to dispossess plaintiffs of a right previously possessed, and there is no such contention or evidence here, the disposition of the case is ruled by legal principles considered in State v. Gulf States Utilities Co., 144 Tex. 184, 189 S.W.2d 693 (1945). Substituting water and water lines for the electric power and lines which was the subject of dispute in that case ours is substantially identical. This is so despite the facts that in Gulf States there was action to remove the physical properties of the utility company frоm the streets of a municipality organized after such properties had been placed in and upon them pursuant to a right purportedly granted by the Commissioners Court of the county in which was located the municipality subsequently incorporated.
The holding of the court in Gulf States Utilities, 189 S.W.2d 698 read as follows: “Since the commissioners’ court of Jasper County was withоut power to grant the rights claimed by respondent the purported franchise and extensions thereof are of no force and effect as against the city‘s procedure under its ordinance. (Citing cases). The claimed franchise rights cannot therefore form the basis of an estoppel on the city‘s part to еnact and enforce the ordinance in question.”
It would appear elemental that if the plaintiffs’ claimed right would not be enforceable if the use of their properties within the corporate limits had been prohibited by the municipality, they would likewise be unavailing against the act of the municipality constituting comрetition.
The municipality may exercise, for the community of citizens it represents, the same rights which it might have granted to another to exercise under franchise; hence the case would be no different had there been a new party to whom it had granted a franchise to use its streets to operate a compеting water works company. Plaintiffs would lack the requisite justiciable interest to maintain their suit in either event.
Although loss of business is one of the elements of damage for which there should be compensation in a constitutional taking of property, it may not be the sole element and it must be attendant to the taking of some property right. In other words governmental action which causes or results in an individual‘s loss of business, standing alone, does not constitute a constitutional “taking” of property which gives rise to any right to receive compensation from the sovereign. A person operating a business in, under or over the streets, alleys and other public places within an incorporated municipality without a franchise has no property right in the continued use of such premises for conducting his business.
Judgment is affirmed.
W. R. Eckhardt, Vinson, Elkins, Searls, Connally & Smith, Ernest C. Hurst, Caldwell & Hurst, Houston, for appellee.
CURTISS BROWN, Justice.
This is an appeal from an interlocutory order granting a temporary injunction.
John Matuszak (Matuszak) and the Houston Texans (Texans) appeal from an order enjoining pendente lite the Texаns from inducing, persuading, or encouraging John Matuszak to repudiate or breach his contracts with the Houston Oilers with regard to the 1974, 1975 and 1976 football seasons, and from interfering with the Oilers’ contractual relations and business relations with Matuszak. Matuszak was enjoined from playing football or engaging in activities relating to football for аny person, firm, corporation or institution other than the plaintiff Houston Oilers, except with the prior written consent of the Oilers and the Commissioner of the National Football League.
Matuszak, the National Football League‘s number one draft choice in 1973, signed four consecutive one-year contracts to plаy football for the Oilers in that year. He signed the N.F.L. Standard Players’ Contract. This contract incorporates by reference all of the rules and regulations of the League including the so-called “Rozelle Rule.” He received a $55,000 bonus and earned an additional $5,000 bonus for making the All-Rookie Team for the 1973-74 season. The сontract provides in part:
“The Player promises and agrees that during the term of this contract he will not play football or engage in activities related to football for any other person, firm, corporation or institution, or on his own behalf, except with the prior written consent of the Club and the Commissioner . . . ;
The Playеr hereby represents that he has special, exceptional and unique knowledge, skill and ability as a football player, the loss of which cannot be estimated with any certainty and cannot be fairly or adequately compensated by damages and therefore agrees that the Club shall have the right, in addition to any оther rights which the Club may possess, to enjoin him by appropriate injunction proceedings against playing football or any other professional sport, without the consent of the Club or engaging in activities related to football for any person, firm, corporation, institution, or on his own behalf, and against any other breaсh of this contract.”
Matuszak, apparently dissatisfied with his lot on the Oilers, made contact with Mr. Steven Arnold of the Texans and indicated an interest in joining their team. He stated that he believed that the terms of his contract with the Oilers were so unfair as to be not binding. He signed a contract with the Texans, participated with them in a prеss conference to announce that he had jumped leagues, and played for them in their game against the New York Star, until served with a temporary restraining order. Prior to the hearing on the temporary injunction, Matuszak accompanied the Texans to Hawaii where he worked as a broadcaster for their gаme there.
The trial court entered a temporary injunction on September 10, 1974, finding that the Oilers had demonstrated a probable right to recover on the merits and had demonstrated a probable harm and inadequacy of their remedy at law. The court also found that Matuszak was unique and that his contract was presumptivеly valid.
Appellants Matuszak and the Texans attack the injunction on several grounds al
It is the well settled standard of review for temporary injunctions that they may be overturned only where a trial court has clearly abused its discretion. Transport Co. of Texas v. Robertson Transports, 152 Tex. 551, 261 S.W.2d 549 (1953). An applicant for a temporary injunction where permanent injunctive relief is sought upon final disposition must show a probable right on final hearing to a permanent injunction. Oil Field Haulers Ass‘n v. Railroad Commission, 381 S.W.2d 183 (Tex.Sup.1964). In addition, they must demonstrate that they have no adequate remedy at law. May v. Lee, 28 S.W.2d 202 (Tex.Civ.App.-Galveston 1930, no writ). In enforcing negative covenants ancillary to contracts of employment an additional element is rеquired, that is, a determination of whether or not the person against whom relief is sought is a person of “exceptional and unique knowledge, skill and ability in performing the service called for in the contract.” Dallas Cowboys Football Club, Inc. v. Harris, 348 S.W.2d 37, 42 (Tex.Civ.App.-Dallas 1961, no writ); Mission Independent School Dist. v. Diserens, 144 Tex. 107, 188 S.W.2d 568 (1945).
In assessing appеllants’ no evidence, insufficient evidence and great weight of the evidence points we must observe that the latter two are improper in an appeal from an order granting or denying temporary injunction. If there is some evidence of substantive and probative character we may not find that the trial court abused its discretion. Houston v. Southwestern Bell Tel. Co., 263 S.W.2d 169 (Tex.Civ.App.-Galveston, writ ref‘d). It is also settled that fact findings on conflicting evidence will not be disturbed. Sheehan v. Levy, 215 S.W. 229 (Tex.Civ.App.-Dallas 1919, writ granted), aff‘d 238 S.W. 900 (Tex.Comm‘n App.1922, opinion adopted). We are then left solely with appellants’ no evidence points which must be viewed as contending that the evidence conclusively establishеd that appellee had no right to equitable relief. On the basis of the evidence there is some substantial and probative evidence to support the trial court‘s finding. First, the testimony shows that the Texans and Matuszak were aware that he was under contract to the Oilers at the time he signed the Texans contract. The testimоny also shows that the Texans publicized the signing. It is undisputed that Matuszak did play for the Texans in contravention of the contract with the Oilers. It is also undisputed that Matuszak received a $55,000 bonus, had made the All-Rookie Team in 1973 and had been the N.F.L.‘s number one draft choice. This is not to say that the Oilers will necessarily prevail on the final disposition of this matter. However, we cannot say that the evidence conclusively showed that the Oilers would not be entitled to equitable relief.
Appellants contend that the trial court abused its discretion in granting a temporary injunction because the contracts were in violation of the Texas Anti-Trust Laws and therefore unenforceable. Schnitzer v. Southwest Shoe Corporation, 364 S.W.2d 373 (Tex.Sup.1963). This contention cannot be sustained. We are faced with the question of federal pre-emption in this case. In the area of professional athletics, the Supreme Court of the United States has dealt with the question of pre-emption in the casе of Flood v. Kuhn, 407 U.S. 258, 92 S.Ct. 2099, 32 L.Ed.2d 728 (1972). In that case the court expressly approved the lower court‘s appraisal of the burden which state anti-trust regulation would impose in this area. The Second Circuit opinion states:
On the one hand, it is apparent that each league extends over many states, and that, if state regulation were рermissible,
the internal structure of the leagues would require compliance with the strictest state antitrust standard. The consequent extra-territorial effect of necessary compliance would be considerably more far-reaching than that in Southern Pacific Co. v. Arizona, supra (325 U.S. 761, 65 S.Ct. 1515, 89 L.Ed. 1915 (1945)). On the other hand, we do not find that a statе‘s interest in antitrust regulation, when compared with its interest in health and safety regulation, is of particular urgency. Hence, as the burden on interstate commerce outweighs the states’ interests in regulating baseball‘s reserve system, the Commerce Clause precludes the application here of state antitrust law. (Flood v. Kuhn, 443 F.2d 264, 268 [2d Cir. 1971]).
We beliеve that this holding is applicable to the instant case. Professional football is subject to federal antitrust regulation. Radovich v. National Football League, 352 U.S. 445, 77 S.Ct. 390, 1 L.Ed.2d 456 (1957). Therefore, the question of whether Matuszak‘s contract violates federal law is a question for the Federal Courts.
Having found sufficient evidence to justify the trial сourt‘s findings of probable right, probable harm, and inadequacy of legal remedy, we believe that the trial court was justified in granting the temporary injunction to maintain the status quo except insofar as it attempted to enjoin Matuszak from “activities related to football.” While this language is contained in the contracts in question no uniqueness of Matuszak is demonstrated with reference to any activity other than as a football player. Furthermore, the term is too general and nonspecific to be a legitimate part of an injunctive order.
In making this holding we should not wish to be understood as intimating any view as to the ultimate outcome of this case on the trial on the merits. A hearing on a temporary injunction does not conclude the controversial issues between these litigants or finally determine the rights of Matuszak. Trial on the merits is the appropriate forum for disposition of these issues. Dallas Cowboys Football Club, Inc. v. Harris, 348 S.W.2d 37, 47 (Tex.Civ.App.-Dallas 1961, no writ).
For example, the record clearly raises a fact question here as to Matuszak‘s “uniqueness.” The owner and coach of the Oilers took occasion to disparage the abilities of Matuszak, thus an ultimate finding of non-uniqueness would be suрportable. Appellant makes an attack on the unenforceability of the contracts claiming they are so unconscionable and adhesive as to preclude equitable relief. Allright, Inc. v. Elledge, 515 S.W.2d 266 (Tex.Sup.1974). The contracts are incredibly one-sided. The options rest with the Club (except for payment upon performance) and any disputes are ultimately to be decided by the Commissioner and his findings are conclusive and unappealable. The Club signed Matuszak to four separate one-year contracts rather than one contract for four years in order to reduce the Club‘s financial exposure in the event of an injury to him. Sport contracts arranged so that the team can easily dispose of an injured player have been found unconscionable and unenforceable. Connecticut Professional Sports Corporation v. Heyman, 276 F.Supp. 618 (S.D.N.Y.1967).
In view of the fact that this case remains to be tried on its merits we take occasion to state thаt we agree with the appellant that the trial court took a far too restrictive view as to what evidence should have been received and unduly restricted the cross-examination of Gillman and Adams. Furthermore, under
Costs of appeal are assessed one-half against appellants and one-half against appellee.
Modified and affirmed.
TUNKS, Chief Justice (dissenting).
I respectfully dissent from the holding of the majority for two reasons.
First, I would hold that it is error for a Texas court to lеnd its equitable powers to the enforcement of a contract, such as that involved in this case, which unquestionably is in violation of the public policy of this State as expressed in its anti-trust laws. Schnitzer v. Southwest Shoe Corporation, 364 S.W.2d 373 (Tex.Sup.1963). The fact that the federal government has preempted the field of regulation of anti-trust features of interstate contracts, Flood v. Kuhn, 407 U.S. 258, 92 S.Ct. 2099, 32 L.Ed.2d 728 (1972), does not mean that a Texas court is obliged to use its equitable powers to enforce such a contract that is in violation of Texas’ public policy.
Second, the contract which the Houston Oilers seek to have enforced by the court‘s use of its equitablе powers was procured under circumstances where Matuszak had no freedom of choice. As a result of the combination and agreement between the twenty-six teams in the National Football League, Matuszak could deal with and play for only the Houston Oilers. The evidence shows that many of the terms of the standаrd contract tendered him were not negotiable. He was given only the option of accepting them or not playing professional football in the United States. Standing in such a position of overwhelmingly superior bargaining power, the Oilers compelled Matuszak to sign a contract which is grossly unfair to him. A court should not lend its equitable powers to the enforcement of a contract so termed and so procured. Allright, Inc. v. Elledge, 515 S.W.2d 266 (Tex.1974); Crowell v. Housing Authority of City of Dallas, 495 S.W.2d 887 (Tex.Sup.1973); Paxton v. Spencer, 503 S.W.2d 637 (Tex.Civ.App.-Corpus Christi, 1973, no writ); Steves v. United Services Automobile Association, 459 S.W.2d 930 (Tex.Civ.App.-Beaumont 1970, writ ref‘d n. r. e.); Inman v. Parr, 311 S.W.2d 658 (Tex.Civ.App.--Beaumont 1958, writ ref‘d n. r. e.).
For the above reasons I would reverse the trial court‘s judgment and dissolve the temporary injunction.