By Christopher R. Deubert, Senior Writer
Chapter 1 of Harvard Law Professor Peter Carfagna’s textbook “Sports and the Law” is entitled “The Moral Integrity of the Sport: The Role of the Commissioner and the Law.” Starting with the Commissioner’s role is indicative of the importance of the Commissioner’s role and the deep and broad authority they historically have possessed, and generally still do. A principal part of that authority is the power to adjudicate a variety of disputes involving league matters. Yet, the New York Knicks, as part of its ongoing lawsuit against the Toronto Raptors, have attacked NBA Commissioner Adam Silver’s authority to do just that.
The Knicks-Raptors Suit
On August 21, 2023, the Knicks sued the Raptors, their head coach Darko Rajakovic, player development coach Noah Lewis, and Ikechukwu Azotam, the Knicks’ former Director of Video/Analytics/Player Development Assistant and current Raptors employee. The Knicks alleged that in the summer of 2023, after accepting a position with the Raptors but before leaving the Knicks, Azotam secretly forwarded confidential and proprietary Knicks materials to himself and the Raptors. These materials allegedly included scouting reports, analyses of players and teams, film information and data, and other sensitive, competitive information. The Knicks allege violations of federal and state trade secret law, breach of contract, tortious interference, unfair competition, and related claims.
The lawsuit was nearly, if not entirely, unprecedented. While teams have occasionally sued their leagues (such as the Dallas Cowboys, Oakland Raiders, and the New York Rangers), it is shocking for one team to sue another in a public forum. Instead, disputes between teams are ordinarily resolved by the Commissioner.
Commissioner Authority
The genesis of the modern-day Commissioner and the role’s authority was MLB’s appointment of Judge Kennesaw Mountain Landis as the sport’s first Commissioner in 1921 after the “Black Sox” scandal in which several members of the Chicago White Sox were accused of intentionally losing the 1919 World Series in exchange for bribes from mobsters.
For many years thereafter, the broad scope of a league’s Commissioner authority was most frequently challenged – and upheld – in the context of MLB. In 1931, the Northern District of Illinois dismissed a suit from the then-minor league Milwaukee Brewers challenging Landis’ rejection of an optional player contract between the St. Louis Browns and the Brewers, holding that “the commissioner acted clearly within his authority.”[1] In 1977, the Northern District of Georgia held that Commissioner Bowie Kuhn had the authority to discipline the Atlanta Braves for violations of a recently-imposed no-tampering policy under the Commissioner’s broad authority to act “in the best interests of baseball.”[2] The next year, the Seventh Circuit affirmed a decision upholding Commissioner Kuhn’s authority on the same ground to disallow the Oakland Athletics’ sale of left fielder Joe Rudi and pitcher Rollie Fingers to the Boston Red Sox for $2 million and pitcher Vida Blue to the New York Yankees for $1.5 million.[3] Finally, in 1989, the Southern District of Ohio recognized the broad authority of the Commissioner as the real party-in-interest in denying Pete Rose’s motion to remand his action back to Ohio state court.[4]
The more recent challenges to Commissioner authority have come in the NFL. In 2016, the Second Circuit reversed a District Court decision and affirmed Commissioner Roger Goodell’s authority to impose a four-game suspension on Patriots quarterback Tom Brady for his alleged involvement in a scheme to deflate footballs to his liking. The Second Circuit recognized the Commissioner’s “broad authority to deal with conduct he believes might undermine the integrity of the game.”[5] A few months later, the Eighth Circuit ruled similarly in upholding Goodell’s authority to punish running back Adrian Peterson for alleged domestic violence.[6] The next year, the Southern District of New York rejected the NFLPA’s efforts to vacate an arbitration decision in which Goodell imposed a six game suspension on running back Ezekiel Elliott for domestic abuse.[7] Finally, most recently, the Southern District of New York held that most of the claims asserted by three Black coaches against the NFL and various clubs had to be arbitrated in front of Goodell.[8]
The Knicks’ Attack
On October 16, 2023, the Raptors and the other defendants moved to compel the Knicks’ suit to arbitration. The defendants rely on Section 24(d) of the NBA Constitution, which provides that the Commissioner “shall have exclusive, full, complete, and final jurisdiction of any dispute involving two (2) or more Members of the Association.” Further, the defendants argue that this provision also covers the allegations against the individual defendants because of the broad definition of “Member” under the Constitution.
The defendants’ arguments are not helped initially by Commissioner Adam Silver’s reluctance to assert his authority at this time. By letter dated August 25, 2023, four days after the lawsuit was filed, the Raptors requested the Commissioner to assert jurisdiction over the dispute in accordance with the NBA Constitution. The Knicks objected. In a September 8, 2023 email, NBA General Counsel Rick Buchanan informed the parties that “[t]he league will abide further proceedings in the S.D.N.Y. court for a determination of whether this dispute should be adjudicated in federal court or before the Commissioner.”
Regardless, the Knicks attacked the Constitution’s arbitration provision as being an unconscionable and unenforceable “infinite arbitration clause.” The Knicks contend that the present dispute does not arise out of the NBA Constitution and that it would be unreasonable to read the relevant provision as requiring literally every dispute between two teams to be subject to arbitration before the Commissioner. Equally striking, the Knicks contend that Commissioner Silver could not fairly oversee an arbitration because he has a close relationship with Raptors owner Larry Tanenbaum, who is also the Chairman of the NBA Board of Governors.
Jump Ball
The Knicks’ arguments are a shocking attack on the Commissioner and the league; if successful, they would diminish the authority of the Commissioner, a result which would serve as a negative precedent moving forward and which the players could seek to exploit. That the Knicks would take such actions is likely related to other disputes between the team’s owner, James Dolan, and the league. In July 2023, Dolan reportedly resigned from the NBA Board of Governors and complained that “the NBA neither needs nor wants my opinion.” It seems unlikely that the relationship between Dolan and the league will be repaired. The immediate question is whether their disagreements will permanently undermine the authority of the Commissioner in the NBA, and perhaps elsewhere.
Deubert is Senior Counsel at Constangy, Brooks, Smith & Prophete LLP.
[1] Milwaukee Am. Ass’n v. Landis, 49 F.2d 298, 304 (N.D. Ill. 1931).
[2] Atlanta Nat. League Baseball Club, Inc. v. Kuhn, 432 F. Supp. 1213 (N.D. Ga. 1977).
[3] Charles O. Finley & Co., Inc. v. Kuhn, 569 F.2d 527 (7th Cir. 1978).
[4] Rose v. Giamatti, 721 F. Supp. 906 (S.D. Ohio 1989).
[5] Nat’l Football League Mgmt. Council v. Nat’l Football League Players Ass’n, 820 F.3d 527, 539 (2d Cir. 2016).
[6] Nat’l Football League Players Ass’n on behalf of Peterson v. Nat’l Football League, 831 F.3d 895 (8th Cir. 2016).
[7] Nat’l Football League Mgmt. Council v. Nat’l Football League Players Ass’n, 296 F. Supp. 3d 614 (S.D.N.Y. 2017).
[8] Flores v. Nat’l Football League, 2023 WL 4744191 (S.D.N.Y. July 25, 2023).
