In an order published Tuesday, US District Judge William Young, in his own words, “boldly” went “where no lower court has gone before.” Young ruled that MLB’s antitrust exemption applies in a case where neither MLB nor any of its associated businesses is a party.
That’s because MLB doesn’t have an antitrust exemption—all of professional baseball does.
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The exemption was created by the Supreme Court in 1922 and has sparked controversy ever since. Just last year, Republican and Democratic US Senators wrote to MLB commissioner Rob Manfred demanding answers on the impact of “MLB’s antitrust exemption” on minor league baseball. And, as detailed on Sportico, there are multiple federal lawsuits challenging the exemption. One or more might eventually make it to the Supreme Court.
Meanwhile, other professional sports leagues including the NFL, NBA, NHL and MLS enjoy no such exemption. Neither does the NCAA. Courts have consistently rejected attempts to extend the exemption to other leagues and sports associations.
But what if this whole time there was no “MLB antitrust exemption”?
Young, a judge in Boston sitting by designation in Puerto Rico’s federal district court, is presiding over Cangrejeros de Santurce Baseball Club et al. v. Liga de Beisbol Professional de Puerto Rico et al. The case is about a team, Cangrejeros, suing the only top-tier pro baseball league in Puerto Rico. The league and other teams are accused of violating federal antitrust law by allegedly conspiring to take control of Cangrejeros and selling it to other owners.
Liga de Beisbol argues Young lacks jurisdiction to hear the case because of Federal Baseball Club v. National League (1922). The Supreme Court famously held the “business of organized baseball” is exempt from antitrust regulation. That case involved the last remaining club in the Federal League, which for a couple of years in the mid 1910s competed with the National League and the American League.
But Cangrejeros maintains the Supreme Court’s 1922 ruling has been understood to create an antitrust exemption for MLB, not for baseball in general. From that lens, a professional baseball league that lacks an association with MLB would not benefit from the exemption and would thus be vulnerable to ordinary antitrust scrutiny.
Emphasizing that “words matter,” Judge Young found the league’s argument more persuasive and dismissed the lawsuit.
He stressed that after an “exhaustive search throughout all federal courts in this country,” the court failed to find one case using the denomination “MLB exemption.” Young instead found repeated references to an exemption for professional baseball, including in the Supreme Court’s 1972 ruling in Curt Flood v. Bowie Kuhn.
Although obliged to apply the exemption, Young makes clear he is not necessarily a fan of it. He took time to describe the exemption as “much criticized.”
Young is the first judge in American history asked to draw a distinction as to the applicability of the exemption to professional baseball leagues that aren’t MLB or minor league affiliates.
The implications of this case go well beyond Puerto Rico. If the exemption applies to a pro league in Puerto Rico, it might also apply to independent baseball leagues, exhibition teams or college summer baseball with NIL. And, if college athletes gain recognition as employees, the applicability of the exemption to college baseball could surface as a controversy there as well.
Congress—which, along with President Bill Clinton, limited the scope of the exemption through the Curt Flood Act of 1998—could pass legislation to outright end the exemption. But despite Congressional members of both parties periodically threatening that result, no such bill has advanced. Young surmised “it is now apparent that a congressional intervention is unlikely.”
With Congress unlikely to act, Young reasoned “the Supreme Court may well need to take responsibility itself” to take another swing at the topic.
But until then, the legal principle of stare decisis—which is Latin for “to stand by things decided”—applies. Young and other judges will have “no other choice but to apply the antitrust exemption to Professional Baseball.”
Cangrejeros could appeal the ruling to the US Court of Appeals for the First Circuit, a court that will already review the exemption in a separate case involving minor league players’ wages. That could set in motion another path for a Supreme Court retake.
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