Minor League Clubs Sue MLB, Challenging the Anti-trust Exemption

     It has finally happened.  After months of conjecture, debate and then a lengthy period of silence, several minor league baseball clubs that were eliminated as part of MLB’s restructuring have filed suit against MLB under the anti-trust laws.  As a professor of sports law, one of my favorite topics is MLB’s historic anti-trust decision in Federal Baseball Club of Baltimore v. National League.  It was written by Justice Oliver Wendell Holmes, arguably one of the greatest ever to serve on SCOTUS.  The trick, however, is that it really ISN’T an anti-trust decision.  Holmes never got to substantive anti-trust analysis because he determined that baseball, in 1921, was not interstate commerce, and so The Sherman Act did not apply.

      After two retread opinions (Toolson v. New York Yankees and Flood v. Kuhn) in which SCOTUS declined to revisit the issue even while acknowledging its less than sterling legal underpinnings, we finally see the issue revisited.  In the interim, it is worth noting that MLB itself supported The Curt Flood Act, which removed the exemption in so far as it applied to MLB labor matters.  But, meanwhile, the exemption remains, providing protection most notably for the minor league farm system which has given fans like me the opportunity to enjoy baseball in its purest form. 

        It was after MLB announced in February that it was reducing the number of minor league clubs to 120 from 160 that the rumblings began that an anti-trust challenge might be mounted yet again.  Today, that case was filed.  Nostalgic Partners LLC, d/b/a The Staten Island Yankees et al v. The Office of the Commissioner of Baseball will be heard in the Southern District of New York, assuming it survives what one assumes will be an immediate motion to dismiss by MLB counsel.  Given the current makeup of SCOTUS, it will be interesting to see if MLB’s 100 year old anti-trust exemption will survive.

Credit: sportslogos.net

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Helen A. “Nellie” Drew is an expert in sports law, including professional and amateur sports issues ranging from NCAA compliance and Title IX matters to facility construction, discipline of professional athletes, collective bargaining and franchise issues. Drew formerly served as an officer and in-house counsel to the Buffalo Sabres of the National Hockey League, after previously working as outside counsel to the Sabres and the NHL. Among her more interesting experiences were assisting former USSR superstar Alexander Mogilny in obtaining asylum status in the U.S. and working on multiple NHL expansions, including San Jose, Ottawa, Florida and Tampa Bay.
Drew teaches a variety of courses that incorporate topics such as drug testing in professional sports and professional player contract negotiation and arbitration. She is especially interested in the evolving research and litigation concerning concussions in both amateur and professional sports.

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