The Supreme Court on Monday denied San Jose’s petition for certiorari in a case filed after the city says Major League Baseball stymied negotiations for the potential relocation of the Oakland Athletics franchise to San Jose in order to preserve the territorial claim of the neighboring San Francisco Giants.
The denial puts an end to San Jose’s bid to attract the A’s and keeps intact baseball’s antitrust exemption — which stretches back to a 1922 Supreme Court decision and represents an issue experts say the court seems reluctant to address and is deferring to Congress on.
“Absent a circuit split or some confusion among the lower courts on what constitutes the business of baseball we are not going to see this thing being taken by the Supreme Court,” University of Wisconsin Law School professor Brad Snyder said. “The court has more important things to do with its time than reconsider baseball’s antitrust exemption for another time.”
San Jose’s lawsuit stems from a controversy over its bid to attract the A’s with the promise of a new stadium. The problem is that the San Francisco Giants claim the area as part of the team's geographic territorial market and sought to block the move.
After working for years to negotiate a possible move while being threatened by MLB that it would block it, San Jose went to the courts for relief, only to be confronted by baseball’s antitrust exemption, as both a California district court and the Ninth Circuit tossed the suit.
Unlike other professional sports leagues, Major League Baseball enjoys an antitrust exemption that has been upheld by the Supreme Court twice, most recently in the 1972 Flood v. Kuhn case challenging MLB’s reserve clause system that restricted player movements.
While that decision was partially overturned by Congress in a 1998 law bearing Flood’s name, the Curt Flood Act, that law was limited to Major League player labor issues.
The Ninth Circuit tossed San Jose’s suit, saying the Flood Act’s limitations leave the exemption in place for questions of franchise relocation, which can only be overturned by the Supreme Court or Congress.
MLB argued in its brief opposing San Jose's certiorari petition that the Flood Act’s changes were limited, as Congress “explicitly declined to repeal the exemption for any other aspect of the business of baseball, including ‘franchise expansion, location or relocation.’”
“So arguably, in baseball’s view, there is no room for the court to even do anything anymore because Congress has implicitly ratified the rest of the exemption,” said Nathaniel Grow, a professor of legal studies at the University of Georgia, noting that not everyone agrees with that interpretation.
The ironic part of the San Jose case is that both the current A’s and the Giants are products of relocations of older teams, with the Giants moving from New York in 1958 and the A’s moving from Kansas City in 1968 after originally playing in Philadelphia.
Further, the territory claimed by the Giants at one time actually belonged to the A’s, which agreed to let the Giants have it in the early 1990s when the Giants were considering a move to San Jose, before the team landed a new stadium in San Francisco.
“It is very bizarre even for MLB’s standards,” Grow said.
When viewed against the backdrop of other sports, the antitrust exemption gives the league exceptional power to control relocation, experts say. For instance, when the late Al Davis wanted to move his Raiders of the NFL from Oakland to Los Angeles, the league tried to block the move, as the Rams were already there, but he filed an antitrust suit and was able to make the move.
The Raiders eventually moved back to Oakland and the Rams moved to St. Louis, leaving LA with no team, but now both franchises have been tied to potential LA stadium projects.
For San Jose, the Supreme Court's denial of certiorari was the end of the road, and the city seems to be moving on without the A's. San Jose Mayor Sam Liccardo issued a statement Monday saying the city knew a Supreme Court bid was a "long-shot" and the city already has other plans for the land where the proposed new stadium for the A's would sit.
Experts say courts have consistently interpreted team relocation to be within MLB's antitrust exemption, or at least there has yet to be a circuit split on the issue.
A Pennsylvania federal court in 1993 ruled the antitrust exemption could allow MLB to block a sale of the Giants to an ownership group looking to move the team to St. Petersburg, Florida, where the Tampa Bay Rays now play, but the court did order a hearing to examine the extent of the exemption. However, the parties settled before the hearing.
Still, the San Jose case is just the latest to take on baseball's antitrust exemption, as others that are potentially better suited are waiting in the wings, though experts are not confident they will fare much better.
Two groups of minor leaguers say the “cartel” of MLB and its clubs is systematically denying them fair wages. While one suit, Senne v. Office of the Commissioner of Baseball, seeks to circumvent the antitrust exemption by bringing wage-and-hour claims under the federal Fair Labor Standards Act and California labor law, another suit is directly going after MLB with antitrust claims.
That suit, Miranda v. Office of the Commissioner of Baseball, has already been dismissed at the district court level after MLB argued the minor leaguers asked the court “to ignore binding precedent.” Still, the minor leaguers are appealing to the Ninth Circuit.
“They have a little bit more of an emotional appeal to them,” Grow said. “These are people who aren’t even making a living wage because of this anti-competitive behavior, as opposed to millionaires not being able to move a team or a city having to sell land to someone else besides a sports team.”
Further, professional baseball scouts are launching a proposed class action alleging MLB conspired to prevent them from moving between teams and stiffed them on overtime pay, echoing the claims brought by the minor league players. The suit brings claims both under the FLSA and for antitrust violations again testing baseball’s exemption.
Snyder said that while the minor leaguer and scout suits will run into similar problems as San Jose did with the antitrust exemption, it will be interesting to see how the FLSA claims are dealt with as they will question just how far the antitrust exemption will extend.
“You have labor law running up against antitrust law,” Snyder said. “At what point do you ask how far does the exemption go. … At what point can MLB just ignore and violate all federal law. There has to be a stopping point with this exemption.”
The case is City of San Jose et al. v. Office of the Commissioner of Baseball, case number 14-1252, in the U.S. Supreme Court.
--Editing by Jeremy Barker and Kelly Duncan.