New Orleans Pelicans Baseball Club, Inc. v. National Association of Professional Baseball Leagues, Inc.

Minor League Baseball teams were governed by the National Association of Professional Baseball Leagues, Inc. (the National League) (defendant). Each Minor League Baseball team or club possessed a rating, belonged to a league, and played home games in a specified territory. The New Orleans Pelicans Baseball Club, Inc. (the Pelicans) (plaintiff) was an AA-rated club in the Southern League. The Pelicans signed a letter of intent to purchase the Charlotte Knights (the Knights) and wanted to relocate the team from North Carolina to New Orleans. The purchase and relocation required the approval of the National League. According to the National League’s rules, a “league” of higher classification was entitled to preference over a territory if the league provided timely notice. The National League’s president, Moore, approved the “control interest transfer” of the Knights to the Pelicans. Three days later, Moore issued a letter granting approval of the Knights’ relocation to New Orleans “subject to” protest by another league or “the submission of notice by a club of a League of higher classification of its protection of, or request to relocate to, [the] territory.” Notice was required to be in writing and received by the close of business on November 20, 1992. On November 18, 1992, the AAA-rated Zephyrs baseball team, which played in the American Association league, submitted a written request to Moore for the New Orleans territory. It was not until November 20, 1992, however, that the American Association voted in favor of the Zephyrs’ relocation and supposedly notified Moore orally that same day. Thereafter, Moore outlined relocation requirements that the Zephyrs had to meet by December 1, 1992. Although the Zephyrs did not meet the requirements by December 1, 1992, Moore granted the Zephyrs’ request to relocate, thwarting the Pelicans. The Pelicans sued the National League alleging causes of action based on arbitrary and capricious conduct in denying relocation. The National League filed a motion for summary judgment, arguing that the Pelicans had not obtained a right of relocation or that the Zephyrs had properly exercised the right to play in New Orleans.