Nov 2, 2023, 06:57 PM ET
NEW YORK — Major League Baseball (MLB) has successfully resolved a potential legal battle by settling a federal lawsuit and two state court cases filed by minor league teams that lost their affiliations with the big leagues.
James W. Quinn, the attorney representing the suing teams, announced on Thursday that a settlement had been reached in all three cases. However, the terms of the settlement remain confidential.
MLB declined to comment on the matter.
In September 2020, MLB reduced the minimum guaranteed minor league affiliation agreements from 160 to 120 and assumed control over the minor leagues, which were previously overseen by the National Association of Professional Baseball Leagues since 1901.
The parent companies of the Staten Island Yankees, Tri-City ValleyCats, Salem-Keizer Volcanoes, and Norwich Sea Unicorns filed lawsuits against MLB in December 2021 in the U.S. District Court in Manhattan. They alleged that MLB’s actions violated the Sherman Antitrust Act by engaging in a “horizontal agreement between competitors” that artificially limited the market for Minor League Baseball (MiLB) teams affiliated with MLB clubs.
In January 2021, Tri-City and Norwich also filed lawsuits in state court. A trial was scheduled to commence on November 13 to address issues such as whether MLB had made improper inducements to minor league teams and whether the teams had breached their agreements with the former governing body of the minor leagues.
The federal lawsuit was dismissed by the U.S. District Court in Manhattan due to MLB’s antitrust exemption, a decision that was later upheld by the 2nd U.S. Circuit Court of Appeals. Subsequently, the attorneys representing the minor league teams sought the intervention of the U.S. Supreme Court to review the decision and potentially overturn baseball’s antitrust exemption, which was established by a Supreme Court ruling in 1922. However, the Supreme Court had not yet decided whether to accept the case.
The Supreme Court initially granted baseball an antitrust exemption in the Federal League case, where Justice Oliver Wendell Holmes stated that baseball was not considered interstate commerce but rather exhibitions exempt from antitrust laws. This decision was reaffirmed in a 1953 case involving George Toolson, a farmhand for the New York Yankees, and in the 1972 Curt Flood decision, which emphasized that any changes to the exemption should be made by Congress.
In 1998, a law was enacted that applied antitrust laws to MLB, specifically affecting the employment of major league players at the major league level.