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San Jose's MLB Lawsuit on Fast Track to 9th Circuit

By Gabriella Khorasanee, JD on March 14, 2014 | Last updated on March 21, 2019

America's favorite pastime may be up for debate, but one thing is for sure: The Ninth Circuit is going to hear a case that challenges an antitrust exemption that's been on the books for almost a century.

In a case that is pitting the city of San Jose, California, against Major League Baseball ("MLB"), San Jose will not let up on its dream of luring the Oakland A's to the self-proclaimed "Capital of Silicon Valley."

Will San Jose prevail? We're not sure, but we're going to find out sooner, rather than later.

Baseball Territory and the Antitrust Exemption

A major-league baseball team has "exclusive territorial rights in the city where it's located and within 50 miles ... of the city's corporate limits," according to Bloomberg. In 1922, Justice Holmes wrote a three-page opinion where he held that baseball is a "purely state affair[]," and therefore federal laws did not apply. This opinion by the Supreme Court is what's standing in the way of San Jose's big plans.

San Jose sought the approval of MLB to move the A's to San Jose in 2010, but the MLB's commissioner declined to approve the request, reports Bloomberg. The problem? San Jose is in San Francisco Giants territory. As a result, San Jose initiated an action in federal court claiming violations of antitrust law, amongst other things, against MLB.

The District Court's Opinion

The district court opened its decision with a quote from a sister circuit that reads in relevant part, "we continue to believe that the Supreme Court should retain the exclusive privilege of overturning its own decisions." With that, Judge Whyte continued by examining the cases that reaffirmed the Supreme Court's holding, as well as a review of all the other courts that have addressed the issue. Ultimately though, the court was constrained by precedent, and dismissed the city's antitrust and unfair competition claims.

Stanford Law School Professor Mark Lemley noted that the case was correctly decided regarding antitrust law, and added, "While the baseball exemption doesn't make much logical sense, the Supreme Court created it, and it is the Supreme Court, or Congress, that has to get rid of it," reports Bloomberg.

The Ninth Circuit's Fast Ball

This case has gotten a lot of play this year, with the Ninth Circuit granting San Jose's "motion to expedite briefing and hearing on appeal." The city of San Jose filed its opening brief last week and the answering brief is due April 4.

Is This Headed to SCOTUS?

Based on the quote that Judge Whyte began his decision with, one would think that he was paving the way for this case to go all the way to the Supreme Court. However, upon closer reading of his opinion, he notes that even the Supreme Court has "recognized the flaws in the antitrust exemption for baseball" and that the Supreme Court has "consistently 'conclude[d] that the orderly way to eliminate error or discrimination, if any there be, is by legislation and not by court decision.'"

It looks like he's hinting to the city that its money may better be spent on lobbyists than on litigation. We'll be keeping an eye on this case as it progresses.

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