## Facts

- Joe Kapp was a prominent quarterback who played professionally in Canada (1959–1966) and then in the NFL, including for the Minnesota Vikings (1967–1969) and the New England Patriots (1970).
- At the start of his pro career, Kapp was selected in the NFL draft by a club but did not sign with that club; under NFL rules, the drafting club still claimed exclusive NFL rights to him, limiting other clubs’ ability to negotiate with him.
- On October 6, 1970, Kapp and the New England Patriots reached an agreement concerning his services for the 1970–1972 seasons and compensation totaling $600,000; the parties disputed whether this was a binding three-year playing contract or only a step toward a formal NFL standard form contract.
- The NFL’s governing documents required players to sign a league “Standard Player Contract” (SPC), which incorporated league rules affecting player movement and club-player relations.
- The Patriots asked Kapp to sign the SPC. Kapp refused, objecting to the restrictions built into the NFL’s player-control structure.
- The NFL rules Kapp challenged included: (1) the “Rozelle Rule” (also described as a ransom rule), which conditioned a player’s move after contract expiration on compensation set by the commissioner; (2) the draft rule, which bound a player to the drafting club even without a signed contract; (3) a “one-man” rule giving the commissioner final, nonappealable authority over certain disputes; and (4) an anti-tampering rule restricting negotiations with players whose rights another club claimed.
- After Kapp refused to sign the SPC, the Patriots discharged him. Kapp alleged the league’s rules and their enforcement prevented him from obtaining further NFL employment.
- Kapp sued the NFL, Commissioner Pete Rozelle, and member clubs, asserting Sherman Act §§ 1 and 2 claims and a state-law contract claim tied to his asserted 1970–1972 agreement with the Patriots.

## Issues

1. Whether the NFL’s challenged rules—especially the Rozelle Rule, draft rule, anti-tampering rule, and commissioner final-decision procedures—constituted an unreasonable restraint of trade in the market for professional football player services in violation of Sherman Act § 1.
2. Whether those rules should be treated as per se unlawful, or instead evaluated under a rule-of-reason analysis given the cooperative features of a professional sports league.
3. Whether the record entitled Kapp to summary judgment (in whole or in part) on antitrust liability, or entitled the NFL to summary judgment rejecting the antitrust claims.
4. Whether the October 6, 1970 Kapp–Patriots arrangement was an enforceable multi-year playing contract independent of the NFL’s required SPC, and whether the Patriots breached any enforceable agreement by discharging Kapp when he refused to sign the SPC.

## Decision

- The court held that the NFL’s player-restraint structure, with the Rozelle Rule at its center and operating in tandem with other restrictions, imposed severe limits on player mobility and competition for player services.
- Applying rule-of-reason analysis, the court concluded these restraints were “patently unreasonable” and violated Sherman Act § 1.
- The court rejected the NFL’s claim that professional football’s special characteristics justified the breadth and operation of the restraints as a matter of law.
- The court did not treat the challenged rules as automatically immune from antitrust review merely because they appeared in league documents or were implemented through the SPC.
- On Kapp’s contract theory, the court concluded the October 6, 1970 document did not establish the independent, binding three-year playing contract Kapp claimed; it was understood to anticipate execution of the NFL’s standard form contract. As a result, Kapp did not obtain summary relief on the asserted multi-year breach theory.

## Legal Principles

- Agreements among separately owned league clubs that regulate the labor market for players constitute concerted action subject to Sherman Act § 1 scrutiny.
- Sports leagues may require some cooperation to stage games, but restraints on player movement and bargaining power must still be reasonable in scope and necessity under the rule of reason.
- A compensation/transfer device that deters clubs from signing players after contract expiration—by threatening substantial and unpredictable awards set by a commissioner—can operate as an unreasonable restraint of trade.
- Requiring use of a standard form contract does not by itself shield league rules from antitrust review when the form embeds broad mobility restraints.
- A preliminary memorandum that contemplates execution of a required standard form may fail to create an enforceable multi-year personal-services contract on the player’s asserted nonstandard terms.

## Conclusion

The district court held that the NFL’s interlocking player-restraint rules—particularly the Rozelle Rule and related draft and anti-tampering restrictions—were an unreasonable restraint of trade under Sherman Act § 1 when judged under the rule of reason, while rejecting Kapp’s attempt to treat his October 6, 1970 arrangement with the Patriots as a standalone, enforceable three-year contract not conditioned on signing the NFL’s standard player contract.


Kapp v. National Football League, 390 F. Supp. 73 (1974)