Sports Law Blog
All things legal relating
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Thursday, December 05, 2013
Fan warning cards
Deadspin reports, with photo.
Assuming this is real, it raises every issue I have ever written about with respect to fan expression. Any "NBA Fan Code of Conduct" must comport with the First Amendment, at least at publicly funded or publicly owned arenas. Since little fan speech actually runs afoul of any known First Amendment categories, such an eviction would not satisfy constitutional scrutiny.
Wednesday, November 27, 2013
Football and limiting rules
In breaking down and defending the infield fly rule, I rely on the concept of limiting rules--special rules designed to recalibrate cost-benefit disparities that appear if some plays are left to the game's ordinary rules. I identify four features that, when present, show the need for limiting rules. I also discuss situations in which the absence of one or more feature shows that a limiting rule is not necessary. In a work-in-progress (hopefully forthcoming), I apply this model to football, focusing on several plays from the last two Super Bowls to consider situations that do or do not call for limiting rules.
But on Slate's Hang Up and Listen Podcast (go to around the 51:00 mark), Josh Levin identifies a play that exposes another hole in the rules that might justify a limiting rule. A defensive team trailing in the final minutes commits a penalty on a play on which the offense had gotten a first down; the penalty stopped the clock, even though the clock would have continued to run without the penalty. In other words, it functionally gave the trailing defensive team a free timeout, forcing the offense to run more plays in order to run out the clock. This, Levin argues, incentivizes teams to intentionally take penalties to stop the clock and give themselves extra, an idea discussed on Football Commentary almost a decade ago. This arose with 2:14 remaining in last Thursday's Saints-Falcons game (the trailing Falcons committed defensive holding on a play) and arguably gave the Falcons a chance to get the ball back one final time (although they did not score) and still lost.
Read more »
Monday, November 25, 2013
NHL Concussion Litigation
Will Leeman et al v. NHL threaten the NHL? My take for SI.com.
Freakonomics and sports rules
The new Freakonomics podcast discusses "spontaneous order," illustrating it with discussion of the rules and enforcement regime of ultimate frisbee, which is played (even competitively) without officials. Fun discussion.
Saturday, November 23, 2013
Update on the San Jose v. MLB Lawsuit
or earlier Sports Law Blog coverage of San Jose's suit and the ongoing dispute regarding the proposed relocation of the Oakland A's, click here.) As Howard Wasserman noted at the time, though, it was unclear whether San Jose could in fact immediately appeal the decision. Because the court's opinion was largely premised on baseball's well-established antitrust exemption, Judge Whyte's decision did not present a "substantial ground for difference of opinion" as required under 28 U.S.C. 1292(b), and as a result it did not appear that San Jose could immediately pursue an interlocutory appeal in the case. Indeed, nearly than a month and a half later the lawsuit is still pending in the Northern District of California.
However, Judge Whyte has signaled that he may be willing to allow the city to appeal the decision shortly. In a hearing scheduled for December 13th, the judge has asked the parties to be prepared to discuss two primary issues: (1) whether the court should retain supplemental jurisdiction of the remaining state law claims in light of the fact that the federal claim in the case was dismissed, and (2) whether a final judgment should be entered with regards to the previously dismissed claims pursuant to Federal Rule of Civil Procedure 54(b), a provision that allows courts to enter final judgment in a case once some, but not all, of the claims in the suit have been resolved. Under Rule 54(b), the court must determine that there is "no just reason for delay" in entering final judgment for the dismissed claims.
Presumably, San Jose will seek to persuade the court to retain jurisdiction over the remaining state law claims -- so that it can begin to pursue discovery in the case in an attempt to obtain some leverage over MLB -- while at the same time urging Judge Whyte to enter a final judgment on the dismissed claims so that the city can appeal them to the Ninth Circuit Court of Appeals. Meanwhile, MLB will likely contend that the court should not retain supplemental jurisdiction over the remaining state law claims, but instead dismiss them outright. However, should the court opt to retain jurisdiction over the state law claims, I would expect MLB to argue that it should then refrain from issuing a final judgment under Rule 54(b), in hopes of avoiding the prospect of simultaneously litigating the case on two separate tracks.
Assuming the court decides to enter a final judgment -- either under Rule 54(b), or following the dismissal of the remaining state law claims -- San Jose's immediate prospects on appeal do not appear to be particularly strong, given that the Ninth Circuit has previously affirmed the dismissal of a suit raising similar franchise location issues under baseball's antitrust immunity. Portland Baseball Club, Inc. v. Kuhn, 491 F.2d 1101 (9th Cir. 1974). Nevertheless, a pending appeal would continue to give the city some leverage over MLB in any negotiations regarding the A's proposed move to San Jose. Perhaps more importantly, pursuing an immediate appeal would also expedite the city's timetable for a potential Supreme Court appeal. The prospect of the Supreme Court reconsidering baseball's prized antitrust immunity would undoubtedly be a significant cause for concern for MLB, and could finally convince the league to approve the A's relocation.
Friday, November 22, 2013
RIP: Michael Weiner
Weiner, the MLB players' union executive director, took over in December of 2009 following the departure of Donald Fehr. A fierce labor attorney, Weiner displayed the ability to advocate for the players while swiftly earning the respect of the owners, Commissioner Bud Selig and all involved in the business of baseball.
Many of us were lucky enough to have met Michael, serving on a panel at a law school conference or shaking his hand at the annual Sports Law Association's conference. For those of you who didn't have the benefit of meeting or hearing Michael speak, spend some time researching what he accomplished over his all too short tenure with the union. And when first pitch comes around this spring, please don't forget to tip your cap....
Thursday, November 21, 2013
On rules and sport
Great commentary from Neil Buchanan at Dorf on Law on the arbitrary nature of the rules of sport, with a special focus on whether football is still "football" under the new player-safety rules.
American Needle's Lesson for the New Jersey Sports Wagering Case
News broke late last Friday that the U.S. Court of Appeals for the Third Circuit had denied New Jersey's request for an en banc hearing in the on-going sporting wagering lawsuit. After losing at both the District Court and Court of Appeals level, the state is now down to its last option - the U.S. Supreme Court. Previous statements from the New Jersey side indicated that Gov. Chris Christie is inclined to take the case to the Supreme Court. If so, the state will file a petition for writ of certiorari within the next 90 days. Like all petitions, the chances that the Supreme Court opts to take the case are slim.
If New Jersey does indeed seek review by the Supreme Court, the conventional wisdom is that the sports league plaintiff quintet (NCAA, NBA, NFL, NHL, and MLB) would oppose review by SCOTUS given that the leagues have already prevailed twice earlier. Such opposition could manifest itself in one of two ways: (i) by filing a motion in opposition to New Jersey's petition or (ii) by doing nothing. However, as we learned in the American Needle v. NFL, et al case several years ago, there is a third option - the sports leagues could join New Jersey in seeking review by the Supreme Court.
Recall the American Needle case single entity antitrust case and its procedural history. The NFL and its co-defendants prevailed at both the District Court and Seventh Circuit Court of Appeals before moving to the Supreme Court in 2010. Nevertheless, the NFL decided to request review at the highest level. In relevant part, here is what the league wrote in their pleading -
"The NFL Respondents are taking the unusual step of supporting certiorari in an effort to secure a uniform rule that (i) recognizes the single-entity nature of highly integrated joint ventures and (ii) obviates the uncertainty, chilling effects, and forum shopping that inevitably result from the current conflict among the circuits."
In other words, the NFL desired the Supreme Court to memorialize their earlier court victories. With Minnesota and California promulgating sports betting-related legislation and watching the New Jersey case closely, it is possible that the NCAA-NBA-NFL-NHL-MLB plaintiffs may opt to follow the same appellate strategy now. While the Third Circuit's decision regarding PASPA constitutionality is persuasive nationwide, only a Supreme Court decision would be binding in every circuit.
Instances of a prevailing party seeking further review of a case are exceedingly rare. Nevertheless, given the recent history of it happening in another high-profile case involving one of the same litigants, it is a (remote) possibility worth being aware of.
Thursday, November 14, 2013
University of Chicago 4th Annual Sports Symposium
Fourth Annual Sports Symposium, organized by the School's Media, Entertainment & Sports Group (MESG). Panelists throughout the day will be coming in from the Chicago Bulls, Chicago Fire, Chicago Sky, Cleveland Browns, St. Louis Cardinals, Boston Red Sox, Baltimore Orioles, Gatorade, Intersport, and the Chicago Cubs. Panel topics include: navigating front office management of professional teams, the increasing role of analytics in sport, and the growth of digital marketing.
I will be moderating the legal panel entitled: "The Impact of Increased Litigation in Sports." We anticipate covering a number of topics from the concussion lawsuits to the student-athlete likeness litigation to doping. Our panelists follow:
Tuesday, November 12, 2013
Do Conflict of Interest Rules Prohibit the NFLPA from Representing Both Jonathan Martin and Richie Incognito?
Joseph Kohm, Jr., an attorney and agent at Diakon Baseball Group in Virginia. Kohm represents, among others, Blue Jays All-Star pitcher Steve Delebar. Kohm has also taught sports law at Regent University School of Law and in the late 80s played on Syracuse's men's basketball team. We're pleased to have Joe's contribution. He also authored the Sports Law Blog post titled What if Rick Pitino Had Been A Woman? in 2009. -- Mike McCann
It was interesting to watch NFLPA head DeMaurice Smith tell ESPN’s Stuart Scott before Monday night’s Dolphins-Buccaneers game that the Players Association could adequately represent the interests of both Jonathan Martin and Richie Incognito without a conflict of interest. NFL Commissioner Roger Goodell likes to wield the league’s Personal Conduct policy like the sword of Damocles and based on the limited information that has been made public to date, both players could be subject to discipline. Under general labor law principles, it is conceivable that the NFLPA could claim to represent both players. As the designated bargaining unit for the players, the union has the duty of fair representation. A breach of the duty of fair representation occurs when a union’s conduct toward a member is arbitrary, discriminatory, or in bad faith. I am assuming that this is the lens through which the NFLPA is viewing their role.
However, DeMaurice Smith is a lawyer, and I am guessing that many at the NFLPA are lawyers. As such, their conduct should be governed by conflict rules consistent with Model Rule of Professional Conduct 1.7, which states, “… a lawyer shall not represent a client if the representation involves a conflict of interest. A concurrent conflict of interest exists if: (1) the representation of one client will be directly adverse to another client; or (2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client…” As this matter progresses, how could both players be assured that the union could aggressively pursue a course of action to seek justice for an aggrieved player, yet vigorously defend the interests of an accused player during an investigation, or a punished player through the appeals process? Even with the consent of both Martin and Incognito, I do not see how the NFLPA jumps over the hurdle in the exception provision of the Rule that permits representation if, “ the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal…”
One possible solution would be to have the NFLPA appoint an experienced union leader from another sport to represent the interest of either Martin or Incognito in the very limited scope of matters pertaining to or arising out of the events in this case. Don Fehr would seem to be the likely choice. This way, the NFLPA avoids any hint of bias and both Jonathan Martin and Richie Incognito are assured that they will receive the full scope of the rights and benefits they are entitled to under their Collective Bargaining Agreement.
Joseph Kohm, Jr.
Monday, November 11, 2013
Would You Join a College Players' Association?
The legal aftermath of Judge Wilken's certification order in O'Bannon v. NCAA takes a new twist with formation efforts for a college players' trade association. Here's my take for Sports Illustrated.
Sunday, November 10, 2013
Partial Certification in O'Bannon v. NCAA
I have a new article for SI.com on Judge Wilken partially certifying the class action lawsuit brought by Ed O'Bannon, Sam Keller and other former and current student-athletes. Short take: her order is great news for future and current student-athletes, not so great news for former ones.
Thursday, November 07, 2013
ASU 4th Annual Conference on Sports and Entertainment Law
I am looking forward to returning to speak at The Sandra Day O’Connor College of Law at Arizona State University for its 4th Annual Conference on Sports and Entertainment Law this Saturday, November 9th, 2013 from 9am – 4pm, followed by a reception for all attendees and speakers. The Conference will take place at Arizona State University Memorial Union, Arizona Ballroom 221 (2nd Floor), 1290 S. Normal Ave., Tempe, AZ, 85287. CLE credit is available for attorneys, including Ethics credit. The Keynote Presentation will be given by Bud Selig, the Commissioner for Major League Baseball.
Panel topics include:
· Gregg Goldman, 29th Drive
Its always a great conference, and looking forward to having fellow Sports Law Blog contributors joining me this year.
Register at this link.
Confronting Locker Room Bullying with Physical Violence
An interesting development in Incognito-gate yesterday, with stories that Miami Dolphins GM Jeff Ireland told Jonathan Martin's agent that Martin should punch his tormentor in the face.
One downside of punching someone in the head, of course, is that one has committed a tort: battery. Can a person use force to defend themselves from bullying? In my article Defense Against Outrage, I explore this very question. I ask whether, if the bully's conduct rises to the level of extreme or outrageous conduct, a person can use physical force in "self-defense" against the emotional damage bullying can do.
Some have argued that Richie Incognito's bullying, pervasive and offensive, would rise to the level of IIED. Would that have created a privilege to use physical violence in self-defense?
Monday, October 28, 2013
Sports Illustrated and UNH Law Town Hall on O'Bannon v. NCAA and the Future of College Sports
The University of New Hampshire School of Law and Sports Illustrated proudly invite you to attend A Town Hall on O'Bannon v. NCAA on Tuesday, November 5th from 6 p.m. to 7:30 p.m. in Room 282, followed by a reception in the Franklin Pierce Center for Intellectual Property.
The Town Hall will examine how a class action lawsuit against the NCAA could radically change college sports as we know it. Through legal arguments sounding in intellectual property and antitrust, Ed O'Bannon—a former basketball star at UCLA—contends that current and former Division I men's basketball and football players should be paid for their image and likeness on television broadcasts, video games, trading cards, apparel and other commercial ventures. The Town Hall will also consider related cases, including Sam Keller v. NCAA and Ryan Hart v. Electronic Arts, as well as pending federal legislation in the NCAA Accountability Act. Collectively, these legal developments could lead to the compensation of college student-athletes and impact their unionization and quasi-employment rights.
The Town Hall will feature some of the most influential and insightful people in college sports:
Come for the enthusiastic discussion and debate; stay for the hors d'œuvre, beverages, and networking opportunities. We hope to see you there! Please RSVP to email@example.com.
* UNH Law is about an hour drive from Boston and directions can be found here.
** Portions of the town hall will be aired on SI Now, Sports Illustrated's Daily Talk Show. Other portions will be shown through video provided by UNH Law's Sports and Entertainment Law Institute.
Mike Pouncey Subpoena
A potentially major development in the Aaron Hernandez murder case occurred last night, when Dolphins center Mike Pouncey was served with a grand jury subpoena after the Dolphins played at the Patriots. The grand jury is investigating a potential scheme involving the same of guns and it may be connected to Hernandez. On SI.com last night, Pete Thamel and Greg Bedard broke the story and I have a legal analysis this morning.
Sunday, October 27, 2013
Procompetitive Effects and the Ban on Paying College Athletes
USA Today's Steve Berkowitz wrote on Friday that Judge Wilken denied a motion to dismiss in the O'Bannon litigation. Here is an excerpt from Berkowitz's article in which he addresses Judge Wilken's remarks concerning whether a ban on athlete pay serves a procompetitive purpose:
Meanwhile, the judge also raised questions about the applicability to this case of the 1984 Supreme Court ruling in NCAA v. Board of Regents, a case that was about control of college football TV rights but the opinion on which included the statement that "in order to preserve the character and quality of the (NCAA's) 'product,' athletes must not be paid, must be required to attend class and the like."
The NCAA has relied upon this language in defending its amateurism system and has successfully used it [in] many prior legal cases.
However, Wilken wrote in Friday's ruling that the case "does not stand for the sweeping proposition that student-athletes must be barred, both during their college years and forever thereafter, from receiving any monetary compensation for the commercial use of their names, images, and likenesses.
"Although it is possible that the NCAA's ban on student-athlete pay serves some procompetitive purpose, such as increasing consumer demand for college sports, Plaintiffs' plausible allegations to the contrary must be accepted as true at the pleading stage."
Wilken also wrote that the Supreme Court "never even analyzed the NCAA's ban on student-athlete compensation under the rule of reason nor did it cite any fact findings indicating that this ban is the type of restraint is 'essential if the (NCAA's) product is to be available at all'. More importantly, the Court never examined whether or not the ban on student-athlete compensation actually had a procompetitive effect on the college sports market."Berkowitz's piece raises a really interesting question. In sports antitrust cases, the issue concerning procompetitive effects essentially revolves around competitive balance. Why is there an assumption that a ban on athlete pay increases consumer demand for college sports and/or fosters competitive balance?
First, while I do believe there are many consumers who do not want athletes to be paid, I have serious doubts whether there is any correlation between consumer demand and athlete pay (or lack thereof). For starters, the consumer knows there are lots of athletes in big-time college sports who are paid under the table from boosters and various other third parties (unless of course one believes that the number of athletes getting paid is limited to only those who actually get caught). But more importantly, if the rules were changed to permit athletes to be compensated for their names and images, I don't believe fans and alumni would take the position, "I'm not watching my team play this weekend because I read somewhere that somebody paid our defensive end $1,000 this week for signing some memorabilia."
But who cares what I think and let's assume for sake of argument that some consumers would not be interested in the product if the athletes were paid more than they are currently. How much relevance should it have for antitrust purposes? Is a producer insulated from antitrust liability simply by calling its product "unpaid labor"? If all of the law firms in the U.S. agreed to restrict the pay of their associates (in the first four years before making partner) to law school tuition reimbursement, would the agreement pass antitrust scrutiny if they marketed their product to the consumer as "cheap associate labor"? Most would not dispute that a team salary cap violates antitrust law but is the answer different if a sports league calls its product "salary capped labor"? If the NFL could show that it is losing consumers because they believe the athletes are grossly overpaid, would/should that have any relevance for antitrust purposes if the league put an individual cap on each player's salary?
Second, on the issue of competitive balance, the irony is that college football arguably has much less competitive balance than professional football where the athletes are paid competitive wages. Unlike professional football, college football has "dynasties" and "powerhouses". For a college sport that supposedly has competitive balance, why are Alabama's football fans leaving so many empty seats in the stadium?
Baseball rules, again
One year after benefiting from a bizarre and controversial (although I believe correct) Infield Fly call in the NL WIld Card, the St. Louis Cardinals won Game 3 of the World Series on an obstruction call on the Red Sox third baseman (video embedded). Although early reaction (at least outside the Red Sox clubhouse) seems to approve of the call, this one will remain a point of contention, both because it occurred in the World Series and because it allowed the game-winning run to score (officially, it was scored an error on the third baseman who obstructed).
Rule 2.00 of the Official Baseball Rules defines "Obstruction" as "act of a fielder who, while not in possession of the ball and not in the act of fielding the ball, impedes the progress of any runner." A Comment to the rule provides that a fielder can occupy space when "in the act of fielding a ball," but once he has attempted to field a ball and missed, he can no longer be in the act. Thus, if a player dives at a ball and continues to lie on the ground after it is passed him and delays the runner's progress, "he very likely has obstructed the runner." The rule has no intent requirement; impeding the runner, even unintentionally, constitutes obstruction. Under R. 7.06(b), the umpire can "impose such penalties, if any, as in his judgment will nullify the act of obstruction;" typically, that is the base he would have been entitled to without the obstruction.
Here is video of the umpires' press conference, which can best be described as a judicial opinion issued from the bench, explaining a decision. A couple of themes emerge that, I think, support the call. First, intent does not matter, only the result. Even if (as here) it is almost unfair because the play happened too quickly for the fielder to do anything to get out of the way. Second, while the internet is talking about the Sox third baseman's legs going up in the air, the umpires insisted that it was not the legs, but the fielder's body that created the obstruction. Third, it did not matter that the runner was inside the foul line when he tripped over the fielder (one ump said he was right on the chalk, the video suggests he was inside the line), a point the Red Sox players kept repeating in interviews; a runner can "make his own baseline" by picking the most direct path to the next base.
As expected, some players (Sox starter Jake Peavy was one) complained about the game ending on the umpire's call and the umpire "deciding" the game, a reflection of what Mitch Berman has called "temporal variance" in enforcement of sports rules. That argument seems especially incoherent in this context. After all, the Cardinals could just as easily argue that the play was important precisely because the Cardinals had a chance to score the game-winning run and the Sox were preventing him from doing so.
Anyway, obstruction now will be the word of the rest of this Series.
Saturday, October 26, 2013
Schooled: The Price of College Sports
Need something to do before you head out Trick-or-Treating on Halloween? Swing by Harvard Law Schools as The Committee on Sports & Entertainment Law hosts a panel discussion about the business of college sports.
Thursday, October 24, 2013
Suffolk Law School Panel on College Athletics
Scheduled speakers include:
* Moderator: Brian McLaughlin, Vice President, Symmetry
* Jay W. Fee, Of Counsel, Nelson Mullins Riley & Scarborough, LLP; Adjunct Law Faculty, Suffolk University Law School
* Nancy H. Lyons, Senior Associate Athletic Director for Compliance/SWA, Boston University
* Lisa P. Masteralexis, Head of the Mark H. McCormack Department of Sport Management, Isenberg School of Management at University of Massachusetts, Amherst.
* Warren K. Zola, Assistant Dean for Graduate Programs; Adjunct Faculty, Carroll School of Management, Boston College
It's not to late to attend by registering here.
Wednesday, October 16, 2013
Olympic speech at 45
who supported Smith and Carlos by giving them his gloves and standing at attention while wearing a badge of the Olympic Project for Human Rights. And while Smith and Carlos are generally regarded as heroes who took a stand, 45 years ago they were vilified and expelled from the games.
Of course, gay rights have become an issue for the 2014 Winter Olymics in Sochi, Russia, given recent legislation prohibiting gay-rights "propaganda" and public displays of homosexuality or support for homosexuality. And the International Olympic Committee has repeatedly and publicly reminded athletes of IOC regulations requiring respect for the home country and its laws--in other words, athlete protests of these laws will not be tolerated.
In other words, the "Olympic Ideal" of free expression has not evolved much in 45 years.
Tuesday, October 15, 2013
Sports Law Contract Issues Raised by Bird Attack?
Deadspin has an amusing link to a New York Times article on San Antonio's successful retention of foreign talent. Evidently, an intern was sent to Argentina to deliver Manu Ginobli's new contract (nice work, if you can get it!), and was attacked by a bird while resting at a public fountain. In the aftermath of the bird's reckless misconduct, Ginobli's contract had gone missing.
Monday, October 14, 2013
Why must lawyers be obnoxious?
Is it just what happens when you get that once-in-a-lifetime case that is going to be covered in the media, especially the sports media, and make you famous?
Conversion of a Home Run Ball? A Quick Take
In last night's thrilling Game 2 of the American League Championship Series at Fenway Park, Tigers' Alex Avila hit a home run to right field that, as Deadspin's Timothy Burke details with video, a Red Sox fan threw back onto the field. But it didn't seem to be this fan's ball to throw back. The video indicates he didn't catch it, but rather the woman standing next to him did--or at least she mostly caught it. Then, based on the video, he wrestled it from her and threw it onto the field. She didn't seem too happy about it, which would be understandable since the ball would make an awesome memento and is probably worth a pretty good chunk of change, especially to Tigers fans.
The exchange won't wind up in court and seems more like fodder for a law school exam question than a real world scenario, but as my friend Marc Isenberg wonders, did the guy break any laws? A starting issue is determining who had rights to the baseball. A simple issue, but one that has sparked debate over the years, including a legal fight over Barry Bonds hit his 756th home run. Massachusetts law indicates that a person obtains a legal right of possession of an item, like a baseball, when there is physical control + intent to continue control. The video is not conclusive, but gives the impression that she had control of the home run ball and her negative facial reaction to it be wrestled from her suggests she wanted to keep controlling it.
The guy would probably argue, however, that he had his hands on the baseball the whole time. If so, then both likely had a right to it. Also, since the two were seated next to each other, it's very plausible they knew each other and he might argue he had her implied consent.
Assuming it was her baseball, then by taking it from her and throwing it back, there's a good argument he converted the ball under tort law. He would have dispossessed her of the ball and totally and permanently destroyed it's value by throwing it onto the field. She could also argue the tort of battery if she could prove that the ball had become part of her personal autonomy, and of course there's everyone's favorite tort, intentional infliction of emotional distress.
There's even a slight chance he committed the crime of petty larceny (when you steal something worth $250 or less), especially since he seemed to take the baseball directly from her. Then again, he probably lacked the intent to steal, especially if he had a hand on the baseball when she caught it.
Saturday, October 12, 2013
Judge Whyte Issues a Ruling in the San Jose v. MLB Lawsuit
Less than four months after the lawsuit was filed, a decision has already been issued in San Jose's case against Major League Baseball. In June, the city asserted federal and state antitrust law and tort claims against MLB relating to the league's failure to approve the proposed relocation of the Oakland Athletics (for earlier Sports Law Blog coverage of the dispute, click here). MLB then moved to dismiss the suit in August in light of its long-standing exemption from antitrust law. Following a hearing last week, Judge Ronald M. Whyte quickly issued a decision in the case on Friday.
Primarily focusing on the antitrust issue, Judge Whyte's opinion (available here) granted MLB's motion to dismiss in part, but also denied it in part. Specifically, although Judge Whyte was quick to criticize baseball's unique antitrust immunity, he concluded that the exemption ultimately precluded San Jose's claims under the Sherman Act. Following a thorough review of the applicable case law, Whyte adopted a broad view of the baseball exemption, concluding that it protected the business of baseball -- including franchise relocation issues -- from antitrust law. In the process, he rejected San Jose's claim that the exemption only applied to labor disputes. As a doctrinal matter, I believe Judge Whyte reached the correct decision.
Judge Whyte then held that San Jose's state antitrust and unfair competition claims also should be dismissed because the Supreme Court effectively preempted the application of state antitrust law to professional baseball in its 1972 decision in Flood v. Kuhn. However, Whyte did conclude that San Jose had sufficiently pled its tortious interference claim under state law, insofar as MLB's delay in resolving the proposed relocation had, in and of itself, arguably harmed the city aside from any antitrust concerns. However, the opinion was clear to note that the ultimate decision of whether to allow the Athletics to move was still MLB's alone, and that San Jose could only pursue damages arising from MLB's delay in resolving the dispute, not the potential rejection of the relocation itself.
Interestingly, despite deciding the merits of the substantive legal claims, Judge Whyte opted not to resolve the issue of whether San Jose lacked standing to pursue the case. Although one would typically expect a court to determine whether standing exists before ruling on the merits of the underlying case, Whyte instead concluded that the city could potentially possess standing under Section 16 of the Clayton Act, but that he need not decide the issue now in light of his ruling on the antitrust exemption issue.
Consequently, although San Jose can proceed with one of the tort claims in its suit, Judge Whyte's decision is nevertheless a big win for MLB. The most serious claims in the case were dismissed pursuant to the sport's antitrust exemption, and the lone remaining claim can only result in a damages award, and not a court order mandating that the Athletics be allowed to move to San Jose.
Moving forward, it appears that San Jose will seek an immediate, interlocutory appeal of Judge Whyte's ruling to the Ninth Circuit. I would expect the appellate court to affirm the district court's decision in light of the exemption, given that the Ninth Circuit has previously affirmed the dismissal of a suit raising similar franchise location issues under baseball's antitrust immunity. Portland Baseball Club, Inc. v. Kuhn, 491 F.2d 1101 (9th Cir. 1974). Even so, San Jose could potentially pursue its appeal all the way to the Supreme Court. If the Court were to grant cert in the case, then I believe that would be a strong indication that it intended to overturn MLB's long-standing antitrust immunity. The threat of a Supreme Court appeal could give the city some leverage over MLB in any future settlement negotiations.
Meanwhile, in addition to the continued threat to baseball's antitrust exemption, San Jose's remaining tort law claim could also give the city some leverage over MLB as the case moves forward. MLB would undoubtedly prefer not to proceed with discovery in the case in order to avoid publicly airing the details of its internal deliberation process. Therefore, should Judge Whyte let discovery move forward for the remaining tortious interference claim while the interlocutory appeal on the antitrust issue is pending, the tort claim could further help encourage MLB to resolve the Athletics' situation.
All in all, though, MLB certainly has to be happy with Judge Whyte's decision.
Update: Howard Wasserman wisely notes in the comments that Judge Whyte failed to certify the antitrust issues for an immediate, interlocutory appeal in his decision. Therefore, under 28 U.S.C. 1292(b), San Jose is currently unable to appeal the decision immediately to the Ninth Circuit, pending any further action by the district court.
Update #2: As Howard (an expert in all matters civil procedure) further explains in the comments, the mere fact that many believe that baseball's antitrust exemption should be overturned would not constitute a "substantial ground for difference of opinion," and therefore would not warrant an immediate, interlocutory appeal under 28 U.S.C. 1292(b). Even if Judge Whyte were to believe otherwise and certify the appeal, the Ninth Circuit would still have to agree to take the case in order for it to be appealed immediately under 1292(b). So unless Judge Whyte were to decline to exercise his jurisdiction over the remaining tortious interference claim, and thus enter a final judgment in the case, San Jose may very well be unable to pursue an appeal on the antitrust exemption issue until the conclusion of a trial on the tort claim.
Thus, San Jose appears to have a difficult decision to make in the case. In order to pursue an immediate appeal on the antitrust issue, the city could presumably request that Judge Whyte dismiss the remaining tort law claim and issue a final judgment on the antitrust-related issues, but in the process temporarily forgo the opportunity to pursue discovery against MLB. Alternatively, the city could press the tortious interference claim all the way to trial, but that claim would not result in an order forcing MLB to approve the Athletics' relocation, and would require San Jose to indefinitely postpone its appeal on the antitrust exemption issue. In hindsight, San Jose may thus wish that it had requested a preliminary injunction in the case, because if it had, and Judge Whyte declined to issue such an order, then the city could have immediately appealed under 28 U.S.C. 1292(a).