City of San Jose v. Comm’r of Baseball

Major League Baseball is exempt from the federal antitrust laws.

The City of San Jose (“San Jose”) filed suit against Major League Baseball (“MLB”) Commissioner, Bud Selig, for the delay in deciding whether to approve the Oakland Athletics’ move to San Jose, which is in the exclusive operating territory of the San Francisco Giants. The MLB constitution provides for each of the league’s clubs to play their home games within a designated operating territory, and San Jose falls within the territory of the Giants. San Jose argues that the MLB, in establishing a new “special Relocation Committee” to investigate the relocation, took far too much time because the move had not been approved after four years of investigation. Additionally, San Jose alleges that the Supreme Court’s previous ruling in Flood v. Kuhn, exempting the baseball industry from antitrust laws, should be limited to baseball’s reserve clause, and that the Supreme Court intended a fact-sensitive inquiry where an antitrust exemption is challenged. The district court granted MLB’s motion to dismiss on all but their tort claims, holding that San Jose’s antitrust claim regarding franchise relocation was barred. On appeal, the Ninth Circuit affirmed the district court’s dismissal, noting that the purpose of the limitations placed on franchise relocation are designed to ensure access to baseball games for a broad range of markets and to safeguard the profitability—and thus viability—of each ball club. The panel held that based on its previous opinions, the Supreme Court intended to exempt the business of baseball as a whole, and not any particular facet of that business, from the federal antitrust laws. AFFIRMED.