Procedural Posture

Plaintiff professional football club filed suit against defendants, the football league, 16 clubs, and other related entities, alleging in its fourth amended complaint 22 causes of action. Defendants moved for summary adjudication. The Santa Clara County Superior Court, California, granted the motions which disposed of all causes of action against all but two entities, and entered judgment as to the successful defendants. The club appealed.

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Overview

The club, objecting to being compelled to participate in a European league, claimed that the league’s commissioner wrongfully used his position to control a majority of the clubs so that his management of the league could not be evaluated by independent business judgment. The appellate court held, inter alia, that: (1) the trial court had the discretion to render judgment in defendants’ favor, even though the action remained pending against two defendants, under the exception to the one final judgment rule found at Cal. Code Civ. Proc. §§ 578 and 579; (2) because operation of the European league did not plainly contravene the league’s cited general bylaw, the courts had to abstain from interfering in the intra-association dispute; (3) the trial court did not err by considering demand futility as an element of the derivative claims that was subject to proof; (4) because the commissioner was neither a director nor a shareholder, none of the cases cited by the club supported its claim that demand futility could be shown by evidence of a structural bias alone; and (5) the club failed to show facts specific to each director from which a lack of independence could be inferred.

Outcome

The judgment in favor of the defendants was affirmed.