San Jose Strikes Out In MLB Antitrust Immunity Challenge

Law360 10/06/2015

The U.S. Supreme Court on Monday denied a bid to hear an antitrust lawsuit by the city of San Jose, California, against Major League Baseball over the potential relocation of the Oakland Athletics, putting an end to the latest challenge to professional baseball's long-held exemption from antitrust law.

San Jose had filed a petition for certiorariasking the court to take a look at whether baseball's antitrust exemption should apply to franchise relocation after the city said MLB stymied negotiations for a potential Oakland A's relocation to San Jose in order to preserve the geographic territory claimed by the neighboring San Francisco Giants.

But the Supreme Court denied San Jose's petition on Monday without explanation leaving intact lower court rulings that the Supreme Court’s 1972 Flood v. Kuhn decision extends to questions of franchise relocation, even though that ruling's focus was on player contracts.

San Jose filed the antitrust challenge in 2013 after a yearslong, multimillion-dollar push to bring the Oakland A's to the city, which according to league rules is in the geographic territory of the Giants.

The MLB moved for dismissal of the entire suit, arguing that a 1922 Supreme Court case called Federal Baseball Club v. National League of Professional Baseball Clubs, whichestablished the antitrust exemption for baseball, and subsequent decisions, including Flood, that relied on it made it clear that the claims could not stand.

The district court and later the Ninth Circuit sided with MLB ruling that it could not overturn Supreme Court precedent granting and upholding baseball's antitrust exemption leading San Jose to ask the high court to look at the issue.

Even though Congress repealed the antitrust protections for MLB when it comes to players' employment rights in a 1998 law named after Curt Flood from the 1972 Supreme Court case, which partially overturned that ruling, the law left the rest of the antitrust immunity in place, explicitly franchise relocation.

In its petition for certiorari, San Jose had contended that MLB's antitrust exemption should not apply to franchise relocation calling it "a relic from another era, the last vestige of a time when 'interstate commerce' meant something much narrower than it does today." The city had further noted that it was a Supreme Court ruling that granted MLB the exemption, not an act of Congress.

San Jose city attorney Richard Doyle told Law360 they were disappointed with the Supreme Court's decision not to take the case but said they knew it would be difficult but thought the MLB antitrust exemption is in need of Supreme Court review. 

"We thought they might what to hear a case given that so many people have questioned the wisdom Supreme Court's antitrust exemption for baseball," he said. 

The city, located in the middle of the affluent Silicon Valley, would very much like a baseball team, and the A's provide a good match given that it has played its games only an hour away in Oakland and whose general manager, Billy Beane, pioneered the use of sabermetrics statistics to build playoff caliber teams on tight budgets, made famous in the Michael Lewis book and subsequent movie "Moneyball."

Further, the A's have been looking for a new stadium as they currently play in the aging O.co Coliseum, built in 1966, prior to the franchise's move to Oakland from Kansas City in 1968. Despite fielding some competitive teams, the A's has ranked in the bottom third in attendance for the past 10 seasons, including 2015, according to attendance figures compiled by ESPN.com.

MLB declined to comment on the case. 

San Jose is represented by the Office of the City Attorney, the UCLA School of Law and Joseph W. Cotchett, Philip L. Gregory, Anne Marie Murphy and Camilo Artiga-Purcell of Cotchett Pitre & McCarthy LLP.

MLB was represented by Keker & Van Nest LLP.

The case is City of San Jose et al. v. Office of the Commissioner of Baseball, case number 14-1252, in the U.S. Supreme Court.
 

John W. Keker

John W. Keker

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Adam Lauridsen

Adam Lauridsen

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Thomas E.  Gorman

Thomas E. Gorman

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