Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Major League Baseball’s bid to relate second antitrust suit rejected, (Mar 3, 2015)

By Linda O’Brien, J.D., LL.M.

In an action by the City of San Jose challenging Major League Baseball’s franchise relocation policies, the federal district court in San Jose has declined to relate another pending antitrust suit against Major League Baseball to the case (City of San Jose v. Office of the Commissioner of Baseball, March 2, 2015, Whyte, R.).

In June 2013, the City of San Jose filed suit against the Office of the Commissioner of Baseball, doing business as Major League Baseball (MLB), seeking to eliminate the territorial restrictions that MLB used to block the proposed relocation of the Oakland Athletics to San Jose. In October 2013, the district court ruled that the antitrust exemption for the “business of baseball” barred Sherman Act claims brought by the City. In January 2015, the U.S. Court of Appeals in San Francisco affirmed the dismissal of the City's federal and state antitrust claims based on the exemption. Subsequently, the defendants moved to relate Miranda v. Office of the Commissioner of Baseball, Case No. 3:14-cv-5349, to the case.

In Miranda, four minor league baseball players filed a complaint in the federal district court in San Francisco, alleging that the Commissioner of Major League Baseball and 30 major league baseball clubs, through the exercise of monopoly power, have colluded to eliminate competition and suppress the compensation for minor league baseball players.

An action is related to another when (1) the actions concern substantially the same parties, property, transaction, or event; and (2) it is likely that there will be an unduly burdensome duplication of labor and expense or conflicting results if the cases were conducted before different judges, the court explained. The defendants contended that the City of San Jose and Miranda cases both charge Major League Baseball with restraining competition in violation of federal antitrust laws and turn on the same legal question of whether the long-standing antitrust exemption for the business of baseball continues to apply.

Although both cases generally involved the application of the baseball antitrust exemption, the cases arose from different property, transactions, or events; did not involve the same parties; and implicated different legal questions, the court found. First, the City of San Jose case arose out of the proposed relocation of the Oakland Athletics Baseball Club, whereas Miranda challenged MLB’s practices regarding the compensation of minor league baseball players. Second, the cases involved different plaintiffs and plaintiffs’ counsel. Third, the cases involved different applications of baseball’s antitrust exemption. City of San Jose involved the question of whether club relocation was a part of the “business of baseball.” In contrast, Miranda challenged the legality of the exemption’s application to minor league players and the reserve clauses in the contracts.

The court noted that, while the defendants correctly stated that both cases ultimately turn on the application of the baseball antitrust exemption, the specific legal issues were largely distinct. Since the cases involved different issues, parties, and facts, the court concluded that the cases should not be related. Thus, the defendants’ motion was denied.

The case is No. 13-cv-02787-RMW.

Attorneys: Joseph W. Cotchett (Cotchett Pitre & McCarthy LLP), and Nora Valerie Frimann, Office of the City Attorney, for City of San Jose. Bradley I. Ruskin (Proskauer Rose LLP) and John Watkins Keker (Keker & Van Nest LLP) for Office of the Commissioner of Baseball.

Cases: Antitrust CaliforniaNews