DOJ weighs in on MLB antitrust case, says exemption should be interpreted narrowly

The Ministry of Justice fought in the controversy over Major League BaseballThe century-old antitrust exemption, on Wednesday, told a federal court that the exemption should be interpreted narrowly to be limited to games regulating businesses.

New York federal court is presiding over the early stages of an antitrust lawsuit against MLB that was Brought by four minor league teams Which was taken out of MiLB when baseball contracted with 40 teams in 2020. Their case states that under the antitrust waiver, the lawsuit must be dismissed. Their plan then is to continue to appeal the ruling all the way to the Supreme Court, which in its decision against the NCAA last year called baseball’s exemption “perverted.”

But the Justice Department’s request raises another possibility: that the exemption does exist, but the court ruling what MLB has done with minor league clubs falls outside of it and is subject to antitrust laws. The 18-page filing, which eventually mentions Assistant Attorney General Jonathan Kanter among other officials, does not take a clear position on what the district court should do.

Instead, the Department of Justice makes an argument in favor of the exemption with too narrow an effect.

In light of this, lower courts wrote, “lower courts should not extend the ‘baseball exemption’ beyond the scope recognized by the Supreme Court … which has limited the exemption for conduct that is central to the actual fair of professional baseball games.” Thus, while the exemption may cover “antitrust challenges to the league’s (Major League Baseball) structure and its reserve system,” it will not cover conduct outside of the show of professional baseball.”

The Department of Justice does not write whether restructuring Major League Baseball is outside the scope of the exemption.

Despite this, advocates for the junior officers were interpreting the Justice Department’s entry into the case as the death knell for the exemption.

“It is critical that the Department of Justice announced today that the antitrust exception in baseball” is not based on any substantive political interests that justify the players. . . “This means that the US government sees no fundamental reason to allow Major League Baseball teams to collude and pay poor minor league players, as they have done for decades,” said Harry Marino, CEO of MiLB Advocates.

Exemption has always been an anomaly. Even upholding the exemption in a 1972 case brought by player Kurt Flood to undo the reserve system that forever tied players to teams, the Supreme Court ruled, “(P) professional baseball is a business and engages in interstate commerce.”

Earlier this year Senator Bernie Sanders (I-VT) bill announced To cancel the exemption, claiming secondary league restructuring. It joins a similar version outstanding since last year submitted by Senator Mike Lee (R-Utah) and Representative Jeff Duncan (R-SC).

The exemption no longer covers MLB players. The MLB allowed free agency shortly after the flood issue, and Congress in 1998 codified a law that the exemption did not apply to labor cases. The law, named after Flood, specifically states that minor leagues are still subject to an exemption.

The Department of Justice wasn’t specific in terms of what businesses should fall under the exemption and which wouldn’t, writing only that the 1922 ruling cited the baseball fair business exemption.

The Justice Department wrote: “The Supreme Court rejected the original Commerce clause’s justification for the ‘baseball exemption’, leaving it as an aberration with respect to other sports and other antitrust exemptions.” “Second, for these reasons, among other things, lower courts should not extend the ‘baseball exception’ beyond the scope established by the Supreme Court.”

The LA Times was the first to report on the development.

The federal case is being brought in New York by former affiliates of New York YankeesAnd the Houston AstrosAnd the Detroit Tiger And the San Francisco Giants.

(Photo: Peter Aiken/USA Today)