## Facts

- Minor League Baseball clubs were governed by the National Association of Professional Baseball Leagues, Inc. (the National Association), whose rules addressed classifications, territorial rights, and approvals for franchise transfers and relocations.
- Each club had a classification rating (e.g., AA or AAA), belonged to a league, and played home games in a designated territory.
- The New Orleans Pelicans Baseball Club, Inc. (the Pelicans) was an AA-rated club in the Southern League.
- The Pelicans signed a letter of intent to purchase the Charlotte Knights (the Knights) and sought to relocate the Knights from North Carolina to New Orleans.
- The control-interest transfer and relocation required National Association approval.
- Under National Association rules summarized in secondary sources, a league of higher classification had a preference for a territory if timely notice was submitted.
- The National Association’s president, Moore, approved the control-interest transfer of the Knights to the Pelicans.
- Three days later, Moore issued a letter approving relocation of the Knights to New Orleans, but stated the approval was “subject to” protest by another league or submission of notice by a higher-classification club seeking to protect or relocate to the territory.
- The letter set a deadline: notice had to be in writing and received by close of business on November 20, 1992.
- On November 18, 1992, the Zephyrs, a AAA-rated club in the American Association (a higher-classification league), submitted a written request to Moore for the New Orleans territory.
- The American Association did not vote in favor of the Zephyrs’ relocation until November 20, 1992, and Moore was reportedly informed orally that day.
- Afterward, Moore outlined additional relocation requirements the Zephyrs were to satisfy by December 1, 1992.
- Although the Zephyrs did not meet the listed requirements by December 1, 1992, Moore ultimately granted the Zephyrs’ relocation request, preventing the Pelicans’ move to New Orleans.
- The Pelicans sued the National Association, alleging that the relocation outcome resulted from arbitrary and capricious conduct contrary to the association’s governing rules.
- The National Association moved for summary judgment, arguing the Pelicans had no enforceable relocation right and, in any event, the Zephyrs properly exercised higher-classification territorial preference.

## Issues

1. Whether the Pelicans obtained an enforceable right (or legally protected interest) to relocate the Knights to New Orleans when the National Association’s approval letter made relocation expressly conditional.
2. Whether the Zephyrs and/or the American Association timely and properly invoked higher-classification territorial preference under National Association rules, given the timing of written notice and league approval.
3. Whether the National Association’s decision-making, including Moore’s handling of deadlines and conditions, could be treated as arbitrary, capricious, or outside the authority granted by the governing rules.
4. Whether the National Association was entitled to summary judgment because the record did not show a triable dispute on bad faith, fraud, or a clear violation of association rules sufficient to justify judicial intervention.

## Decision

- The court granted the National Association’s motion for summary judgment.
- The court concluded the Pelicans’ relocation approval was conditional and did not confer a vested right to the New Orleans territory that could defeat a higher-classification claim made within the stated notice framework.
- The court treated the association’s territorial-preference process as controlling under the governing rules and found the Zephyrs’ request was sufficient to trigger higher-classification preference in a way that defeated the Pelicans’ bid.
- Applying a deferential approach to internal decisions of a private sports governing body, the court found the Pelicans had not shown facts that would justify setting aside the National Association’s action on the theory of arbitrariness or comparable misconduct.
- Judgment was entered for the National Association at the summary-judgment stage, ending the Pelicans’ challenge in that proceeding.

## Legal Principles

- A private sports governing body’s constitution, bylaws, and rules can function as a contractual framework governing member clubs’ rights and obligations, including territorial rights and relocation procedures.
- Courts generally give substantial deference to a private association’s internal decisions and will not substitute judicial judgment for the association’s application of its rules absent proof of fraud, bad faith, or a clear departure from the association’s own procedures.
- A conditional approval—especially one stating it is “subject to” protests or superior territorial claims—typically creates only a conditional expectation rather than an unconditional right.
- Where a higher-classification preference mechanism exists in association rules and is invoked within the required notice period, a lower-classification club’s planned relocation may be displaced consistent with the rules.
- Summary judgment is appropriate when the nonmoving party cannot point to evidence that would allow a reasonable factfinder to conclude the association acted outside its authority or in a manner that would justify judicial intervention under the limited standard applied to private associations.

## Conclusion

In this relocation dispute, the court treated the National Association’s rules and Moore’s conditional approval letter as controlling and, applying a deferential standard to the decisions of a private sports governing body, granted summary judgment to the National Association because the Pelicans did not show a legally enforceable relocation right or a sufficient basis to overturn the association’s approval of the higher-classification club’s competing territorial claim.


New Orleans Pelicans Baseball Club, Inc. v. National Association of Professional Baseball Leagues, Inc., 1994 U.S. Dist. LEXIS 21468 (1994)