October 30, 2009 7:38 PM
The Sports Litigation Archives: ABA v. NBA
Posted by Brian Baxter
In keeping with our Friday sports coverage, The Am Law Daily has some legal history to offer up on two major antitrust cases of the 1970s and 1980s that have shaped today's professional sports landscape.
It all started when we heard about two new projects by ESPN.com sports columnist Bill Simmons. In chronicling the rise of the National Basketball Association in his new 700-page tome, The Book of Basketball, Simmons reminds readers of the now-defunct American Basketball Association, the renegade league launched 42 years ago that merged with the NBA in 1976 after a protracted legal battle. (Click here and here for ABA-related excerpts from Simmons's book.)
Simmons is also serving as executive producer of ESPN's 30 for 30 documentary series, which features 30 films about events that transformed the sports landscape between 1979 and 2009. The latest installment in that series--Mike Tollin's documentary Small Potatoes: Who Killed the USFL?--details the rise and fall of a spring football league that sought to challenge the National Football League during the 1980s. The documentary, which touches on a landmark antitrust case between the two leagues, is currently airing on ESPN.
Knowing that prominent attorneys worked on antitrust cases involving both the ABA and USFL, we went searching for the lead lawyers on each. It turns out the lawyers we found saw the rest of their legal careers mirror that of their sports clients. Part one in our look back at these sports law milestones starts with the ABA.
ABA v. NBA
Frederick Furth's name came up first. Furth was the lawyer the ABA turned to in 1969 to challenge the NBA's hegemony in an antitrust suit filed in federal court in San Francisco. The competition between the ABA and the NBA throughout the 1960s and the 1970s was cutthroat, with the ABA eventually accusing its older rival of monopolizing players, facilities, and TV coverage.
Speaking to The Am Law Daily by phone from California, where he owns the Chalk Hill Estate Winery in Sonoma County, Furth says he was hired by Dick Tinkham, cofounder of the ABA and Indiana Pacers franchise. The two knew each other from their days as students at the University of Michigan Law school.
Furth (photo at right) started his legal career at New York's Cahill Gordon & Reindel in the late 1950s, moved to San Francisco in 1965, and formed his own firm the next year. Over the next four decades, Furth developed a reputation as one of the nation's top trial lawyers. It was his work on the high-profile ABA case that boosted his reputation.
A year after the case was filed, NBA owners voted to pursue a merger. The two leagues settled the matter in 1971 and agreed to petition Congress for an antitrust exemption. End of story? Not so fast.
The proposed merger encountered some speed bumps along the way. The largest obstacle was a lawsuit filed in 1970 by future Hall of Fame NBA player Oscar Robertson, who opposed the two leagues tying the knot on antitrust grounds. Weil, Gotshal & Manges antitrust heavy Ira Millstein and litigation partner Peter Gruenberger represented Robertson on the case, which grew into an antitrust class action with both the NBA and ABA as defendants. (The existence of two pro basketball leagues meant better salaries for players.)
In the midst of the Robertson suit, Furth continued to advise the ABA, filing a second antitrust action against the NBA in 1974. He also made sure to let his upstart client know when to pay its legal bills. As recounted in Loose Balls, Terry Pluto's must-read book about the history of the ABA, former league general counsel Mike Goldberg recalled this conversation with the antitrust litigator:
"After a while, the ABA owed Fred quite a bit of money. One day we went to see him in his hotel suite. He was sitting there having a manicure. He said, 'Mike, there is something I want to talk about.' I said, 'If it's your fee, we'll take care of that.' Fred said, 'I know you will, because if you don't have $25,000 on my desk by Friday morning, Julius Erving will be working in my garden.'"
Furth says he doesn't remember making this exact statement, but laughingly acknowledges he may have had to push for timely payment every so often. "They were good to me," Furth says of the ABA, "although once in a while I'm sure they were a little slow [to pay] and I had to jack'em up."
After the Robertson class action settled, the ABA and NBA eventually resolved their differences with four teams joining the NBA in time for the 1976 season. A young Proskauer Rose litigation partner named David Stern represented the NBA when it settled the ABA's antitrust case a few weeks before trial. (Some say the NBA feared a court fight with Furth.)
Looking back on the case now, Furth says it worked out for everyone involved. "It gave the NBA more vitality by adding four great cities to the league," he says. "I think they turned out to be successful franchises and it's always tough for one of these established leagues to decide when to expand."
Furth's more recent successes include beating Susman Godfrey in winning a $172 million meal-break class action verdict on behalf of Wal-Mart employees in 2005. The work brought some changes to the lawyer's practice: The Furth Firm merged with San Francisco litigation boutique Zelle Hofmann Voelbel & Mason in 2007, largely because of the need then for more resources to battle Wal-Mart at the appellate level.
Furth has since settled the meal-break case and is in the process of notifying the class. And while he's cut back on his work schedule to manage his 1,200-acre vineyard in Healdsburg, Calif., the septuagenarian has no plans to fully retire.
"Why would I do that?" he says.
Click here for part two of The Sports Litigation Archives: USFL v. NFL.
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