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174 Cal.App.3d 414, 220 Cal.Rptr. 153
(Cite as: 174 Cal.App.3d 414)

(1) Commerce § 1--Commerce Clause--Purpose.


CITY OF OAKLAND, Plaintiff and Appellant, The purpose of the commerce clause (U.S. Const.,
v. art. I, § 8, cl. 3) is to foster development and the
OAKLAND RAIDERS et al., Defendants and Re- maintenance of a national common market among
spondents. the states and to eradicate trade barriers.
No. A029031.
(2) Commerce § 3--State Regulation and Taxation
Court of Appeal, First District, Division 4, Califor- of Interstate Commerce.
nia. State or local regulation of interstate commerce will
Nov 15, 1985. be upheld if it regulates evenhandedly to effectuate
a legitimate local public interest and its effects on
SUMMARY interstate commerce are only incidental, but not if
the burden imposed on such commerce is truly ex-
In an action by a city to acquire a National Football
cessive in relation to putative local benefits. Local
League franchise through its power of eminent do-
burdens may be voided if the regulation governs
main, the trial court entered judgment against the
those phases of the national economy which, be-
city on the grounds the stated purpose was not a
cause of the need of national uniformity, demand
public use, that the city's action was invalid under
their regulation, if any, be prescribed by a single
federal antitrust law, and that its action was invalid
authority. The absence of congressional action re-
under the commerce clause of the federal Constitu-
specting such economic matters is not controlling,
tion (U.S. Const., art. I, § 8, cl. 3). (Superior Court
since the commerce clause (U.S. Const., art. I, § 8,
of Monterey County, No. 76044, Nat A. Agliano,
cl. 3) limits state power by its own force.
Judge.)
(3) Appellate Review § 55--Presenting and Pre-
The Court of Appeal affirmed, holding that profes-
serving Questions in Trial Court--Adherence to
sional football is such a nationwide business and so
Theory of Case--Rehearing.
completely involved in interstate commerce that ac-
The law of the case doctrine does not extend to
quisition of the franchise by the city through emin-
points of law that might have been but were not
ent domain would impermissibly burden interstate
presented and determined on a prior appeal. The
commerce. It held the proposed eminent domain ac-
denial of a rehearing decides nothing on points
tion would more than indirectly or incidentally reg-
raised for the first time in the rehearing petition,
ulate interstate commerce by barring indefinitely
and the law of the case does not apply to that situ-
the relocation of the franchise out of the city, which
ation.
was the precise brand of parochial meddling with
the national economy that the commerce clause was (4) Commerce § 3--State Regulation and Taxation
designed to prohibit. It held the burden that would of Interstate Commerce-- Application of Commerce
be imposed on interstate commerce outweighed the Clause--Eminent Domain.
local interest in exercising statutory eminent do- A city's attempt to acquire a National Football
main authority over the franchise. (Opinion by Sab- League franchise by eminent domain was not ex-
raw, J., with Anderson, P. J., and Channell, J., con- empt from scrutiny under the commerce clause (
curring.) U.S. Const., art. I, § 8, cl. 3) on the asserted ground
the city merely attempted to enter the market as a
HEADNOTES
participant, not a regulator, where it did not attempt
Classified to California Digest of Official Reports to enter the football market on an equal footing,

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174 Cal.App.3d 414, 220 Cal.Rptr. 153
(Cite as: 174 Cal.App.3d 414)

bidding with other potential market participants and Hahn, City Attorneys, Edward C. Dygert, Deputy
seeking to purchase from someone willing and able City Attorney, De Witt W. Clinton, County Coun-
to sell, but rather relied on its governmental power sel, and Dennis M. Devitt, Deputy County Counsel,
of eminent domain. for Defendants and Respondents.
[See Cal.Jur.3d, Constitutional Law, § 211;
Am.Jur.2d, Commerce, § 36.]
SABRAW, J.
(5) Commerce § 3--State Regulation and Taxation
of Interstate Commerce-- Eminent Domain. Plaintiff City of Oakland appeals from a judgment
A state may exercise eminent domain power even after a court trial in favor of defendants Oakland
though by so doing it indirectly or incidentally bur- Raiders et al. We have determined that plaintiff's
dens interstate commerce. proposed exercise of eminent domain power would,
in this case, violate the commerce clause of the
(6) Commerce § 3--State Regulation and Taxation
United States Constitution. Accordingly, we affirm.
of Interstate Commerce-- City's Acquisition of Na-
tional Football Franchise by Eminent Domain.
Because professional football is such a nationwide I. Facts and Procedure
business and so completely involved in interstate
commerce, the acquisition of a National Football Plaintiff sued in 1980 to acquire by eminent domain
League franchise by a city through eminent domain the property of defendants Oakland Raiders
was invalid under the commerce clause (U.S. (Raiders), a National Football League (NFL or
Const., art. I, § 8, cl. 3). The city's proposed action League) franchise. The Alameda County Superior
would more than indirectly or incidentally regulate Court issued a preliminary injunction prohibiting
interstate commerce, since the city claimed author- transfer of the franchise from Oakland, the case was
ity, pursuant to eminent domain, to bar indefinitely transferred to Monterey County (Code Civ. Proc., §
the relocation of the franchise out of the city. That 394), and summary judgment was entered for de-
is the precise brand of parochial meddling with the fendants. On appeal the Supreme Court reversed,
national economy that the commerce clause was de- holding our eminent domain statute allowed con-
signed to prohibit. The relocation of the franchise demnation of intangible *417 property and that
implicates the welfare not only of the individual plaintiff had a right to show whether its attempted
team franchise, but of the entire league. Thus, the exercise of eminent domain over the Raiders fran-
burden that would be imposed on interstate com- chise would be a valid public use. ( City of Oakland
merce outweighed the local interest in exercising v. Oakland Raiders (1982) 32 Cal.3d 60 [ 183
statutory eminent domain authority over the fran- Cal.Rptr. 673, 646 P.2d 835, 30 A.L.R.4th 1208] [
chise. Raiders I].) We subsequently granted a peremptory
writ of mandate directing the trial court to hold a
COUNSEL hearing on plaintiff's application for reinstatement
of the preliminary injunction against transfer of the
David A. Self, Self, Dang & Kelson, Horan, Lloyd franchise from Oakland. ( City of Oakland v. Super-
& Karachale, Laurence P. Horan, Michael W. ior Court (1982) 136 Cal.App.3d 565 [183
Stamp and Richard E. Winnie, City Attorney, for Cal.Rptr. 326] [Raiders II].) In the meantime,
Plaintiff and Appellant. however, Raiders home games were played in Los
Angeles. In early 1983 the trial court reinstated and
Moses Lasky, John E. Munter, Lasky, Haas, Cohler
modified the injunction against transfer, providing
& Munter, William Mathews Brooks, Brooks &
that all 1983 Raiders home games for the 1983 sea-
Hughes, Barrie Engel, Hardin, Cook, Loper, Engel
son would be played in Oakland “unless and until
& Bergez, Gary R. Netzer, Ira Reiner and James K.

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174 Cal.App.3d 414, 220 Cal.Rptr. 153
(Cite as: 174 Cal.App.3d 414)

judgment after trial is entered in favor of “'regulates evenhandedly to effectuate a legitimate


[d]efendants before the beginning of the 1983 sea- *418 local public interest, and its effects on inter-
son.” After trial in May 1983 the court entered state commerce are only incidental ... unless the
judgment against plaintiff. Following various pro- burden imposed on such commerce is clearly ex-
cedural maneuvers by plaintiff we issued an altern- cessive in relation to putative local benefits.”' (
ative writ of mandate, denied plaintiff's requested Edgar v. MITE Corp. (1982) 457 U.S. 624, 640 [73
stay of judgment, and eventually issued a writ of L.Ed.2d 269, 282, 102 S.Ct. 2629], quoting Pike v.
mandate ordering the trial court to (i) vacate its Bruce Church, Inc. (1970) 397 U.S. 137, 142 [25
judgment and (ii) proceed to determine those re- L.Ed.2d 174, 178-179, 90 S.Ct. 844].) Still,
maining objections to plaintiff's eminent domain “experience teaches that no single conceptual ap-
action that it had not previously ruled on. ( City of proach identifies all of the factors that may bear on
Oakland v. Superior Court (1983) 150 Cal.App.3d a particular [commerce clause] case.” ( Raymond
267, 279-280 [ 197 Cal.Rptr. 729] [Raiders III].) Motor Transp., Inc. v. Rice (1978) 434 U.S. 429,
440-441 [54 L.Ed.2d 664, 674-675, 98 S.Ct. 787].)
On remand the court again entered judgment for de- One additional, albeit less recently relied-on ap-
fendants. Its decision is based primarily on three in- proach to review of state or local action under the
dependent grounds: (1) that plaintiff's stated pur- commerce clause provides that burdens will be
pose is not a public use; (2) that plaintiff's action is voided if the regulation governs “those phases of
invalid under federal antitrust law; and (3) that the national economy which, because of the need of
plaintiff's action is invalid under the commerce national uniformity, demand their regulation, if
clause of the federal constitution. any, be prescribed by a single authority.” ( South-
ern Pacific Co. v. Arizona (1945) 325 U.S. 761,
II. Analysis 767 [89 L.Ed. 1915, 1923, 65 S.Ct. 1515]; see also
Edwards v. California (1941) 314 U.S. 160, 176
We turn first to the trial court's commerce clause [86 L.Ed. 119, 126-127, 62 S.Ct. 164]; Minnesota
determination. (1) United States Constitution, art- Rate Cases (1913) 230 U.S. 352, 399-400 [57 L.Ed.
icle I, section 8, clause 3, grants Congress the 1511, 1541, 33 S.Ct. 729]; Leisy v. Hardin (1890)
power “[t]o regulate commerce ... among the sever- 135 U.S. 100, 108-109 [34 L.Ed. 128, 132, 10 S.Ct.
al States ....” This provision was intended to foster 681]; Cooley v. Board of Wardens (1852) 53 U.S.
development and maintenance of a national com- (12 How.) 299, 319 [13 L.Ed. 996, 1004-1005].)
mon market among the states and to eradicate trade The absence of congressional action respecting
barriers. (See, e.g., Baldwin v. G.A.F. Seelig (1935) such economic matters is not controlling because,
294 U.S. 511, 523 [79 L.Ed. 1032, 1038, 55 S.Ct. as has been long established, the commerce clause
497] [“The Constitution was framed ... upon the limits state power by its own force. ( South Caro-
theory that the peoples of the several states must lina State Highway Dept. v. Barnwell Bros. (1938)
sink or swim together, and that in the long run 303 U.S. 177, 185-186 [82 L.Ed. 734, 739, 58 S.Ct.
prosperity and salvation are in union and not divi- 510]; Cooley v. Board of Wardens, supra., 53 U.S.
sion.”]) Indeed, “[r]ecognition of [this] predomin- (12 How.) 299; see generally Edgar v. MITE Corp.,
ant goal ... has permeated judicial interpretations of supra., 457 U.S. 624, 640 [73 L.Ed.2d 269,
state power to regulate commerce.” (Nowak, Ro- 281-282].)
tunda & Young, Constitutional Law (2d ed. 1983)
267-268.) Plaintiff claims, as a preliminary matter, that it can-
not be subject to commerce clause review for three
(2)It is today established that state or local regula- reasons. First, it asserts, such review is precluded
tion of interstate commerce will be upheld if it by the law of the case doctrine -which generally

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(Cite as: 174 Cal.App.3d 414)

binds all subsequent proceedings, trial or appellate, city does not even cross the threshold of the mar-
to prior appellate determinations in the same action ketplace except by first exercising what has been
-because defendants raised the commerce clause is- characterized as a sovereign's “most awesome grant
sue in their petition for rehearing in Raiders I. (3 of power”-eminent domain. ( Winger v. Aires
)Law of the case doctrine, however, does not ex- (1952) 371 Pa. 242, 244 [89 A.2d 521, 522].)
tend to points of law that might have been but were
not presented and determined on a prior appeal. ( FN1 Cities, unlike states, lack inherent
DiGenova v. State Board of Education (1962) 57 power to condemn. ( Raiders I, supra., 32
Cal.2d 167, 179 [ 18 Cal.Rptr. 369, 367 P.2d 865], Cal.3d at pp. 64-65; Comment, Anticipat-
and cases cited.) Because the briefs in Raiders I ing an Instant Replay: City of Oakland v.
contained nothing on the commerce clause issue Oakland Raiders (1984 17 U.C. Davis
and because denial of rehearing decides nothing on L.Rev. 963, 976.)
points raised for the first time in the rehearing peti-
Third, plaintiff contends exercise of eminent do-
tion ( County of Imperial v. McDougal (1977) 19
main power can never violate the commerce clause
Cal.3d 505, 513 [ 138 Cal.Rptr. 472, 564 P.2d 14]),
and notes that no previous case has precluded an
law of the case did not preclude commerce clause
eminent domain taking under that constitutional
review in the trial court.
provision. The lack of such case law, however, is
(4)Second, plaintiff asserts it is exempt from scru- unremarkable; it serves merely to point out that em-
tiny under the commerce clause because it has inent domain cases have traditionally concerned
merely attempted to enter the market as a parti- real property, rarely implicating commerce clause
cipant, *419 not a regulator. (See South-Central considerations which deal primarily with products
Timber Development, Inc. v. Wunnicke (1984) 467 in the flow of interstate commerce. Whether the
U.S. 82, 91-93 [81 L.Ed.2d 71, 79-80, 104 S.Ct. commerce clause precludes taking by eminent do-
2237, 2243]; White v. Massachusetts Council of main of intangible property, however, is a novel
Const. Employers (1983) 460 U.S. 204, 206-208 question posed, it seems, for the first time in this
FN2
[75 L.Ed.2d 1, 4-6, 103 S.Ct. 1042]; Reeves, Inc. v. case.
Stake (1980) 447 U.S. 429, 436-437, 440 [65
FN2 Contrary to plaintiff's urgings, noth-
L.Ed.2d 244, 251, 253, 100 S.Ct. 2271]; Hughes v.
ing in Hayfield Northern R. v. Chicago &
Alexandria Scrap Corp. (1976) 426 U.S. 794,
N.W. Transp. (1984) 467 U.S. 622 [81
809-810 [49 L.Ed.2d 220, 231, 96 S.Ct. 2488].) Al-
L.Ed.2d 527, 104 S.Ct. 2610], persuades us
though plaintiff would escape commerce clause re-
that the eminent domain action here is ex-
view if it had in fact acted as a mere market parti-
empt from commerce clause analysis.
cipant-i.e., if it had attempted to enter the football
market on an equal footing, bidding with other po- (5)It is well established that a state may exercise
tential market participants and seeking to purchase eminent domain power even though by so doing it
from someone willing and able to sell-it does not indirectly or incidentally burdens interstate com-
escape commerce clause review in this situation in merce. (See Elberton Southern Ry. Co. v. State
which its action is grounded on its governmental Highway Dept. (1955) 211 Ga. 838, 841 [89 S.E.2d
power of eminent domain that it possesses as an 645, 649], and cases cited.) (6)Defendants,
FN1
agent of a sovereign, the State of California. however, contend that professional football is such
(Cf. Reeves v. Stake, supra., 447 U.S. 429, 437 [65 a nationwide business and so completely involved
L.Ed.2d 244, 251] [commerce clause applies to in interstate commerce that acquisition of a fran-
“actions taken by states in their sovereign capacity” chise by an individual state through eminent do-
but does not limit proprietary activity].) Here the main would impermissibly *420 burden interstate

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174 Cal.App.3d 414, 220 Cal.Rptr. 153
(Cite as: 174 Cal.App.3d 414)

commerce. A recent Supreme Court decision, providing entertainment nationwide. Finally, the
Partee v. San Diego Chargers Football Co. (1983) court found that a bar to relocation on the basis of
34 Cal.3d 378 [ 194 Cal.Rptr. 367, 668 P.2d 674], state eminent domain law would adversely affect
supports this view. the League enterprise. An involuntarily acquired
franchise could, at the local government's pleasure,
Partee held that the NFL required nationally uni- be permanently indentured to the local entity. The
form regulation and that interstate commerce would League's interests would be subordinated to, or at
be unreasonably burdened if state antitrust laws ap- least compromised by, the new owner's allegiance
plied to a League franchise located in this state. to the local public interest in matters such as lease
Uniform nationwide regulation was called for be- agreements, ticket prices, concessions, stadium
cause “Professional football's teams are dependent amenities, scheduling conflicts, etc. As the trial
upon the league playing schedule for competitive court found, it must also be anticipated that a single
play .... The necessity of a nationwide league struc- precedent of eminent domain acquisition would
ture for the benefit of both teams and players for ef- pervade the entire League, and even the threat of its
fective competition is evident as is the need for a exercise elsewhere would seriously disrupt the bal-
nationally uniform set of rules governing the league ance of economic bargaining on stadium leases
structure. Fragmentation of the league structure on throughout the nation. *421
the basis of state lines would adversely affect the
success of the competitive business enterprise, and Plaintiff's proposed action would more than indir-
differing state antitrust decisions if applied to the ectly or incidentally regulate interstate commerce:
enterprise would likely compel all member teams to plaintiff claims authority-pursuant to authorization
comply with the laws of the strictest state.” ( Id., at found in state eminent domain statutes-to bar indef-
pp. 384-385.) initely defendant's business from relocating out of
Oakland. This is the precise brand of parochial
The same situation is presented here. Indeed, the meddling with the national economy that the com-
trial court's findings track and amplify on Partee. merce clause was designed to prohibit.
Regarding the interdependent character of the NFL,
the court noted that each member team is substan- As shown above, relocation of the Raiders would
tially dependent for its income on every other team: implicate the welfare not only of the individual
League television contract proceeds are divided team franchise, but of the entire League. The
equally and gate receipts nearly equally; a team's spectre of such local action throughout the state or
drawing power is therefore a financial benefit to the across the country demonstrates the need for uni-
other teams as well as to itself; hence the capacity form, national regulation. In these circumstances
and quality of the facility in which games are (and apart from other potential bases of commerce
FN3
played is a component of the League's financial clause violation), if relocation threatens dis-
success. The court also found evidence of the ne- proportionate harm to a local entity, regulation-if
FN4
cessity of a nationwide League structure: based on necessary-should come from Congress; only
the above factors, each League franchise owner has then can the consequences to interstate commerce
an important interest in the identity, personality, be assessed and a proper balance struck to consider
financial stability, commitment, and good faith of and serve the various interests involved in a uni-
each other owner. Thus, under League bylaws, new form manner. ( Partee v. San Diego Chargers Foot-
members must first be approved by the current ball Co., supra., 34 Cal.3d 378, 385.)
members. In short, although the clubs compete to
an important degree, the League is also a joint ven- FN3 It might be argued that plaintiff's at-
ture of its members organized for the purpose of tempted exercise of eminent domain would
be analogous to a local embargo or prohib-

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174 Cal.App.3d 414, 220 Cal.Rptr. 153
(Cite as: 174 Cal.App.3d 414)

ition of outgoing commerce-a practice fre- imate interest in enforcing our own antitrust laws
quently designated a per se violation of the against a League franchise was outweighed by the
commerce clause. (Nowak, Rotunda & burden such enforcement would impose on inter-
Young, supra., pp. 284, 286-287; see also state commerce. Plaintiff here does not seek to pro-
Note (1983) 4 Pace L.Rev. 169, 191-192 mote the health or safety of its citizens, or even, as
[eminent domain acquisition of the Raiders in Partee, promote fair economic competition. In-
would impermissibly burden interstate stead it seeks to act for what may be presumed, for
commerce by reducing the number of busi- purposes of analysis, to be legitimate, but less com-
nesses that pass through such commerce].) pelling reasons: to promote public recreation, social
The trial court touched on a similar point welfare, *422 and to secure related economic bene-
when it stated, “it would seem essential to fits, as well as to best utilize the stadium in which
the welfare of any business in a free enter- the Raiders played.
prise system that it be substantially free to
relocate to a better economic environment We conclude, as did Partee in a similar context,
to maintain or enhance its viability.” (Cf., that the burden that would be imposed on interstate
Nash v. City of Santa Monica (1984) 37 commerce outweighs the local interest in exercising
Cal.3d 97, 111-121 [ 207 Cal.Rptr. 285, statutory eminent domain authority over the Raid-
688 P.2d 894], and cases cited (Mosk J., ers franchise.
dissenting) [discussing an individual's right
Our conclusion on the commerce clause obviates
to go out of business]; Pike v. Bruce
the need for further consideration of the public use
Church, Inc., supra., 397 U.S. 137, 145
and antitrust arguments.
[25 L.Ed.2d 174, 180] [“the Court has
viewed with particular suspicion state stat- Judgment is affirmed.
utes requiring business operations to be
performed in the home State that could Anderson, P. J., and Channell, J., concurred.
more efficiently be performed else- A petition for a rehearing was denied December 12,
where”].) Whether such a broadly stated 1985, and appellant's petition for review by the Su-
proposition may ultimately prove correct, preme Court was denied February 27, 1986. Brous-
however, need not be decided here. We are sard, J., and Panelli, J., did not participate therein.
not faced with the question of whether, Reynoso, J., was of the opinion that the petition
consistent with the commerce clause, a should be granted. *423
local government may prevent relocation
of a business that, although producing
Cal.App.1.Dist.
goods that eventually flow in interstate
City of Oakland v. Oakland Raiders
commerce, is not an interdependent com-
174 Cal.App.3d 414, 220 Cal.Rptr. 153
ponent part of an interstate joint venture
such as the NFL. END OF DOCUMENT
FN4 Note, The Constitutionality of Taking
a Sports Franchise by Eminent Domain
and the Need for Federal Legislation to
Restrict Franchise Relocation (1985) 13
Fordham Urban L.J. 553.

Our Supreme Court in Partee held this state's legit-

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