The US Department of Justice, for the second time in less than a year, asserted its concerns over Major League Baseball’s antitrust exemption in a lawsuit brought by four minor league teams that lost their major league affiliation in the 2020 reorganization of minor league baseball.
While not outright calling for the court to end the exemption — the Second Circuit Court of Appeals, which is currently hearing the case, does not have the authority to end the exemption — the department laid out multiple cases that criticized and questioned the decision to maintain baseball’s antitrust exemption in a brief filed Monday.
“Major League Baseball is also big business,” the brief reads, after noting the allusions to baseball as a “National Pastime.”
“The average Major League Baseball team is worth over $2 billion dollars, up nine percent since 2021. Major League teams compete not just to win championships, but also to attract fans and earn revenue.”
The DOJ also raised the possibility that the exemption has already been limited in its scope by previous court rulings. “Some courts have concluded that the Federal Baseball exemption is limited to a term in player contracts — the reserve clause — which MLB largely abandoned in 1975, effectively leaving the exemption a nullity,” the brief stated.
“In addition, as the United States argued in the district court, other courts have held that only conduct ‘central to the business of baseball’ is covered by the Federal Baseball exemption.”
Federal Baseball is the moniker for the 1922 Supreme Court ruling that stated baseball was not a true interstate business.
In the brief, the department noted it took no position on whether the exemption applied to the minor league reorganization as the four teams had already argued it did, but that it wanted to reaffirm that courts should not extend the Federal Baseball exemption.
“It’s their middle ground,” said Jim Quinn, an attorney for the four minor league clubs. “They are saying don’t make it worse than it already is.”
There is no expectation that the exemption would be extended to other sports. The current lawsuit was sparked by the 2021 Supreme Court decision that ruled the NCAA’s restrictions on collegiate athletes’ marketing rights is an antitrust violation.
In that ruling, the justices wrote, “This Court once dallied with something that looks a bit like an antitrust exemption for professional baseball. … But this Court has refused to extend Federal Baseball’s reasoning to other sports leagues — and has even acknowledged criticisms of the decision as ‘unrealistic’ and ‘inconsistent’ and (an) ‘aberration.'”
Quinn, the four teams’ lawyer, said given the references to baseball in the NCAA case, his lawsuit is designed to get before the Supreme Court, which is the only court that can overturn the exemption.
Major League Baseball’s response is due Feb. 27.
The four clubs that brought the lawsuit are the Salem-Keizer Volcanoes, the Norwich Sea Unicorns, the Staten Island Yankees and the Tri-City ValleyCats.
The federal district court previously dismissed the case because of the exemption but noted that the four teams had sufficiently shown that Major League Baseball violated antitrust laws.
(Photo: Mark Cunningham / MLB Photos via Getty Images)
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