## Facts

- Charles O. Finley & Co., Inc. owned the Oakland Athletics and held player contracts for Joe Rudi, Rollie Fingers, and Vida Blue.
- Near the June 15, 1976 deadline for certain transactions, Finley negotiated cash-only assignments of contract rights: Rudi to the Boston Red Sox for $2 million; Fingers to the Red Sox for $2 million; and Blue to the New York Yankees for $1.5 million.
- Commissioner Bowie K. Kuhn held an expedited hearing and disapproved the assignments, finding them inconsistent with the “best interests of baseball,” the game’s integrity, and public confidence.
- Kuhn cited concerns that the transactions would significantly weaken Oakland, enable wealthier clubs to buy competitive advantage, and destabilize baseball during uncertainty about the reserve system.
- Finley sued, asserting the Commissioner lacked authority to veto the deals absent moral turpitude or violation of a specific rule, and challenging a contractual clause waiving recourse to courts.
- The district court entered judgment for the defendants, upholding the Commissioner’s action; Finley appealed.

## Issues

1. Whether the Major League Agreement contractually authorized the Commissioner to disapprove player assignments as not in the “best interests of baseball” absent moral turpitude or a specific rule violation.
2. Whether the Agreement’s waiver of recourse to courts was enforceable, and what judicial review, if any, remained available.

## Decision

- The Seventh Circuit affirmed for the defendants and upheld the Commissioner’s disapproval.
- The court held the Major League Agreement granted the Commissioner broad discretion to act in the “best interests of baseball,” not confined to policing moral turpitude or express rule violations.
- The court held the waiver-of-recourse clause was enforceable under Illinois contract law, though it did not eliminate all judicial oversight.
- Applying a highly deferential standard, the court found no bad faith, arbitrariness, caprice, or illegality in the Commissioner’s decision.

## Legal Principles

- Contract language authorizing a league commissioner to act in the “best interests” of the sport can confer broad discretionary power to block transactions that threaten integrity, competitive balance, or public confidence, even if no explicit rule forbids the conduct.
- Courts generally defer to internal governance decisions of private associations and intervene only for bad faith, arbitrary or capricious action, or illegality.
- A contractual provision waiving or limiting recourse to courts in disputes within a private sports league is generally enforceable between sophisticated parties, subject to residual judicial review to prevent bad-faith, arbitrary, or unlawful conduct.

## Conclusion

The court treated the Commissioner’s “best interests of baseball” authority as a broad contractual delegation and enforced the parties’ agreement to restrict court involvement, leaving only limited review for bad faith, arbitrariness, or illegality; under that standard, the Commissioner’s veto of the cash sales was upheld.


Charles O. Finley & Co. v. Kuhn, 569 F.2d 527 (7th Cir. 1978)