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Milwaukee Am. Ass'n v. Landis - 49 F.2d 298 (N.D. Ill. 1931)

Rule:

The decision of any arbiter, umpire, engineer, or similar person endowed with the power to decide may not be exercised in an illegal manner, that is fraudulently, arbitrarily, without legal basis for the same or without any evidence to justify action.

Facts:

Plaintiffs Milwaukee American Association ("Milwaukee Club") and St. Louis American League ("St. Louis Club", and collectively, the "Clubs") filed an action in federal district court seeking to enjoin defendant Kenesaw Mountain Landis, the commissioner of baseball, from disapproving an optional contract between the Clubs that assigned a then-existing agreement for the services of James Fred "Red" Bennett, a baseball player, to the Milwaukee Club from the from the St. Louis Club. Bennett intervened in the action as he sought to be relieved from his contractual relationship with both Clubs and be declared a "free agent." In opposing the action, Landis averred that what he proposed to do, if not enjoined, clearly was within his authority and in accord with the contracts and rules governing organized baseball. 

Issue:

Were the Clubs entitled to preliminary injunctive relief to bar Landis from exercising his functions as the commissioner of baseball?

Answer:

No.

Conclusion:

The court ruled that Landis acted clearly within his authority, that Bennett was entitled to be relieved from his contractual obligations to both Clubs and denied the Clubs' request for an injunction. The court observed that the Clubs submitted to Landis, as commissioner, an optional contract, which under the code could not be effective unless approved by him. After ascertaining the facts, Landis refused to approve the contract. As commissioner, Landis was given almost unlimited discretion in the determination of whether or not a certain state of facts created a situation detrimental to the national game of baseball. Landis' decision not to approve the Clubs' contract was not made arbitrarily or fraudulently, but rather was made in pursuance of jurisdiction granted to Landis with the expressed desire to achieve certain ends, that is, to keep the game of baseball clean, to promote clean competition, to prevent collusive or fraudulent contracts, to protect players' rights, to furnish them full opportunity to advance in accord with their abilities and to prevent their deprival of such opportunities by subterfuge, covering or other unfair conduct. 

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