Home Hockey Supreme Court Considers MLB Antitrust Exemption in Landmark Case: Could Major Changes be on the Horizon

Supreme Court Considers MLB Antitrust Exemption in Landmark Case: Could Major Changes be on the Horizon

by americanosportscom

Supreme Court Asked to Weigh In on MLB Antitrust Exemption

Major League Baseball Settles Lawsuits, Avoids Supreme Court Challenge

New York, NY – Major League Baseball (MLB) has reached a settlement in a federal lawsuit and two state court cases filed by minor league teams that lost their affiliations with the big leagues. The settlement comes as the Supreme Court was asked to consider ending MLB’s longstanding antitrust exemption, established in 1922.

James W. Quinn, the lawyer representing the suing teams, announced on Thursday that a confidential settlement had been reached in all three cases. MLB declined to comment on the matter.

The legal dispute arose after MLB reduced the minimum guaranteed minor league affiliation agreements from 160 to 120 in September 2020. Additionally, MLB took over the management of the minor leagues from the National Association of Professional Baseball Leagues, which had been in charge 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, alleging a violation of the Sherman Antitrust Act. They claimed that MLB’s actions constituted 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, with a trial scheduled to begin on November 13. The trial would have examined whether MLB made improper inducements to minor league teams and whether the teams breached their agreements with the former minor league governing body.

The federal lawsuit was dismissed in U.S. District Court in Manhattan due to MLB’s antitrust exemption, a decision that was later affirmed by the 2nd U.S. Circuit Court of Appeals. In an attempt to challenge baseball’s antitrust exemption, which was established by a 1922 Supreme Court ruling, lawyers for the minor league teams sought a review from the U.S. Supreme Court. However, the Supreme Court had not yet decided whether to accept the case.

The Supreme Court originally granted baseball an antitrust exemption in the Federal League case, with Justice Oliver Wendell Holmes stating that baseball was not considered interstate commerce but rather exhibitions exempt from antitrust laws. This decision was reaffirmed in a 1953 case involving New York Yankees farmhand George Toolson 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 passed that applied antitrust laws to MLB, specifically affecting the employment of major league players at the major league level.

The settlement reached between MLB and the minor league teams has effectively avoided a potential Supreme Court challenge to the league’s antitrust exemption. The terms of the settlement remain confidential.

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