Antitrust Law Daily Wrap Up, ANTITRUST—FlaCirCt: Umpiring Academy’s Florida Antitrust Claims Could Not Be Dismissed Under Baseball Antitrust Exemption, (Apr 1, 2013)

By John W. Arden, J.D., LL.M.

A baseball umpiring academy’s Florida Antitrust Act claims against the National Association of Professional Baseball Leagues and the Professional Baseball Umpire Corporation could not be dismissed under the baseball antitrust exemption, according to a Florida circuit court (Jim Evans Academy of Professional Umpiring, Inc. v. The National Association of Professional Baseball Leagues, Inc., March 28, 2013, Munyon, L.). The antitrust exemption applied only to baseball’s reserve system and not to the entire business of baseball, the court held.

The Jim Evans Academy of Professional Baseball Umpiring had brought claims of illegal monopolization and conspiracy in restraint of trade under the Florida Antitrust Act against an association of baseball minor leagues and the entity responsible for the training and evaluation of all umpires in the minor league baseball system. The defendants moved to dismiss the complaint based on the court-created baseball antitrust exemption.

To grant a motion to dismiss based on the baseball antitrust exemption would require holding the exemption “so broad that it applies to the business of professional baseball at every level of professional baseball, including the minor leagues, and to all aspects of that business of baseball inclusive of dealings with private third-party suppliers of services related to baseball,” the state court stated.

This broad reading of the antitrust exemption was foreclosed by the Florida Supreme Court’s opinion in Butterworth v. National League of Professional Baseball Clubs, 644 So.2d 1021 (1994-2 Trade Cases ¶70,737), which “specifically, clearly, and unequivocally” held that baseball’s antitrust exemption was limited to the “reserve system” by which major league baseball bound players to teams and did not apply to the entire business of baseball.

The defendants offered as binding precedent the Eleventh Circuit’s decision in Major League Baseball v. Crist, 331 F.3d 1177 (2003-1 Trade Cases ¶74,039), which held the antitrust exemption broad enough to cover Major League Baseball’s plan to contract from 30 to 28 teams. However, the Florida circuit court was bound by the holding of superior state courts, and the opinions of federal courts—other than the U.S. Supreme Court—were persuasive only. In Butterworth, the Florida Supreme Court had expressly rejected an earlier Eleventh Circuit decision (Professional Baseball Schools & Clubs, Inc. v. Kuhn, 693 F.2d 1085, 1982-83 Trade Cases ¶65,089), which interpreted the scope of the exemption to cover the entire business of baseball.

Preemption. Claims that Butterworth was preempted by the later Eleventh Circuit case of Major League Baseball v. Crist were also unavailing. “Because Butterworth binds this Court with regard to the scope of the antitrust exemption, any preemption of state law cannot reach beyond the scope as limited,” the court explained.

The defendants’ suggestion that the court ignore binding Florida Supreme Court precedent—on the basis of an “implicit” application of the Supremacy Clause—was rejected. “The Supremacy Clause forms the basis for decisions based on federal preemption of state law and applies to acts of Congress,” according to the court. “No act of Congress has established a federal exemption for the ‘business of baseball’ and no preemption analysis under the Supremacy Clause is warranted.”

Incorporation of federal antitrust law. The defendants further argued that Florida had incorporated federal antitrust law into its state antitrust statutes and, as a result, the state circuit court had to follow federal circuit court decisions that differed from the Florida Supreme Court’s decision in Butterworth. In support of this argument, they cited Florida Statutes, Section 542.32, which provides that “due consideration and great weight be given to the interpretations of the federal courts relating to comparable federal antitrust statutes.”

In deciding Butterworth, the Florida Supreme Court gave due consideration to, and discussed at length, federal court decisions applying the baseball exemption “trilogy” beyond application to the reserve clause.

“The Court reached a conclusion, based on Florida and federal law, that was different than the conclusion reached by some federal courts, including the Eleventh Circuit,” the court observed. “Nothing in the language of Florida Statutes, Section 542.32 mandates that the Florida Supreme Court, or any Florida state court, blindly follow the opinions of lower federal courts, when the Florida court believes the federal decisions to be poorly reasoned.”

Application of exemption to dealings with third parties. Even if the antitrust exemption applied broadly to the business of baseball, and federal law preempted state law, the motion to dismiss had to be denied, since no federal or state appellate court had ever held baseball’s antitrust exemption to immunize dealings between professional baseball and third parties, the court held. In this instance, minor league baseball’s dealings with a third party—Jim Evans Academy—would not be exempt “under the broadest reach of the exemption.”

The case is No. 48-2012-CA-13001-0.

Attorneys: Christopher Charles Skambis (The Skambis Law Firm) for Jim Evans Academy of Professional Umpiring, Inc. Matthew C. Blickensderfer (Frost Brown Todd LLC) for The National Association of Professional Baseball Leagues, Inc. and Professional Baseball Umpire Corporation.

Companies: Jim Evans Academy of Professional Umpiring, Inc.; The National Association of Professional Baseball Leagues; Professional Baseball Umpire Corporation

Cases: Antitrust FloridaNews