Antitrust Law Daily Wrap Up, ANTITRUST—D.P.R.: Court rejects renewed bid to dismiss Puerto Rico baseball franchise dispute, (Mar 13, 2026)

By George Basharis, J.D.

The First Circuit’s mandate rule bars defendants from reviving a forum-selection argument after the appellate court reinstated civil rights and related claims brought by a displaced Puerto Rico baseball franchise owner.

The federal district court in Puerto Rico has refused to dismiss a dispute between the owner of the Cangrejeros de Santurce professional baseball franchise and the island’s winter league, ruling that the First Circuit’s earlier decision in the case prevents the defendants from reviving a forum-selection clause argument requiring the claims to be litigated elsewhere. The court held that the defendants’ renewed motion to dismiss on that basis is barred by the mandate rule, which requires trial courts to follow the directions and scope of an appellate court’s decision on remand. The ruling allows the litigation to proceed and continues a long-running dispute between franchise owner Thomas J. Axon and the Liga de Beisbol Profesional de Puerto Rico and related teams and officials after the First Circuit previously reversed portions of the district court’s earlier dismissal order and reinstated several claims (Cangrejeros de Santurce Baseball Club, LLC et al v. Liga de Beisbol Profesional de Puerto Rico, Inc., No. 3:22-cv-01341-WGY (D.P.R. Mar. 12, 2026)).

Background. The plaintiffs in the case are Cangrejeros de Santurce Baseball Club, LLC; Santurce Merchandising, LLC; and investor Thomas J. Axon. They filed suit in federal court in Puerto Rico against the island’s professional winter baseball league and several affiliated teams and officials.

The complaint alleges that league officials and competing franchises conspired to exclude Axon from participating in the professional baseball market in Puerto Rico after he acquired control of the Cangrejeros franchise and attempted to revitalize the team. According to the plaintiffs, those efforts triggered opposition from league officials and other teams, eventually resulting in Axon’s suspension and loss of control over the franchise. The lawsuit asserted federal antitrust claims under the Sherman Act, a civil rights claim, and various claims under Puerto Rico law, including antitrust and unfair competition allegations.

In 2023, the district court granted the defendants’ motions to dismiss. The court ruled that the federal antitrust claims were barred by the longstanding judicially created “business of baseball” exemption from antitrust laws and dismissed the civil rights claim on res judicata grounds.

First Circuit partially revives claims. The plaintiffs appealed, and in 2025 the U.S. Court of Appeals for the First Circuit issued a mixed decision. The court of appeals affirmed the dismissal of the federal antitrust claims, concluding that the professional baseball antitrust exemption applied to the dispute. However, it reversed the dismissal of the civil rights claim and related Puerto Rico law claims.

Specifically, the First Circuit determined that the district court erred in applying res judicata to the plaintiffs’ federal civil rights claim. Because that claim was reinstated, the appellate court also reversed the dismissal of several related Puerto Rico law claims and remanded the case for further proceedings.

The First Circuit also vacated the district court’s dismissal of the plaintiffs’ claims under Puerto Rico antitrust and fair competition statutes and directed the district court to consider whether those claims were precluded by the Commerce Clause. The plaintiffs later sought review in the U.S. Supreme Court, but the Court denied certiorari in March 2026, leaving the First Circuit’s ruling in place.

Renewed motion to dismiss. After the case returned to the district court, the league and other defendants filed a renewed motion to dismiss in September 2025. The motion relied on a contractual forum-selection clause that, according to the defendants, required the dispute to be litigated in Puerto Rico’s local courts rather than federal court.

The defendants had raised the forum-selection clause in their original motion to dismiss. In its 2023 order, however, the district court dismissed the claims based on res judicata without expressly ruling on the forum-selection clause argument.

Following the First Circuit’s decision reversing the res judicata ruling, the defendants sought to revive the forum-selection argument through the renewed motion. The plaintiffs opposed the motion, arguing that the appellate court’s decision foreclosed reconsideration of that issue under the mandate rule.

Court applies mandate rule. The district court agreed with the plaintiffs and concluded that the renewed motion could not proceed because the First Circuit’s mandate resolved the issue. Under the mandate rule, a trial court must follow both the express and implicit determinations made by an appellate court and cannot reconsider issues that were or could have been raised on appeal.

The court explained that the First Circuit had reviewed the defendants’ motion to dismiss de novo and reversed the dismissal of the plaintiffs’ civil rights claim and related Puerto Rico claims. Because the court of appeals addressed the motion in full, the district court concluded that it had effectively rejected the defendants’ alternative arguments for dismissal, including the forum-selection clause.

The court also noted that the defendants did not cross-appeal or otherwise pursue the forum-selection clause as an independent basis for affirming before the First Circuit. Although an appellee may sometimes defend a judgment on any ground supported by the record, the defendants failed to raise the forum-selection clause argument as an alternative basis for affirmance in their appellate briefing. On that record, the district court determined that the appellate ruling left no room to revisit the issue.

No exceptional circumstances. The court further concluded that none of the recognized exceptions to the mandate rule applied. Courts may depart from the mandate rule in narrow circumstances, such as when there has been a change in controlling law, the discovery of new evidence that could not previously have been obtained, or the prospect of serious injustice. The defendants did not identify any such circumstances.

Instead, the court emphasized that the mandate rule requires strict adherence to the appellate court’s instructions and prohibits relitigation of issues already decided or implicitly resolved. Because the First Circuit reversed the dismissal of the relevant claims and remanded the case for further proceedings, the district court held that it was obligated to follow that directive.

Litigation continues. The court ultimately concluded that the defendants’ renewed motion to dismiss must be denied because the appellate mandate controls the scope of the case going forward. “Put differently,” the court said, the mandate rule compels the district court to carry out the “unequivocal mandate” of the appellate court and proceed with the litigation consistent with that decision. With the renewed motion denied, the case will now move forward on the reinstated civil rights claim and the related Puerto Rico law claims that survived the First Circuit’s review.

The Case is No. 3:22-cv-01341-WGY.

Judge: Young, W.

Attorneys: Gabriela Beata Wolk (Winston & Strawn LLP) for Cangrejeros de Santurce Baseball Club, LLC. Rocio Ramos (Colon Ramirez LLC) for Liga de Beisbol Profesional de Puerto Rico, Inc.

Companies: Cangrejeros de Santurce Baseball Club, LLC; Liga de Beisbol Profesional de Puerto Rico, Inc.

Cases: Antitrust PuertoRicoNews GCNNews