Department of Justice Takes Aim at MLB’s Immunity From Antitrust Law

Department of Justice Takes Aim at MLB’s Immunity From Antitrust Law thumbnail

It is open season on Major League Baseball’s century old exemption from antitrust laws.

In a joint filing with three former minor league clubs, the Department of Justice asked a federal court for a limit on the scope of the exemption to “conduct that is central” to professional baseball exhibitions. The Justice Department claimed that the exemption “doesn’t rest on any substantive policy interest that justifies players and fans being denied the benefits of competition .”

Baseball is the only professional league to have such immunity. This has been a constant source of litigation and contention. In March, Senator Bernie Sanders introduced legislation to eliminate it. This follows a similar bill that was introduced by Republican lawmakers last year and is still being considered.

The exemption effectively locks teams in the cities they are based in, unless they consult with the league about relocating. It also prevents minor league players from seeking out opportunities in other leagues, which reduces their salaries.

The suit that the Justice Department considered was brought by teams that were expelled from the MLB after it allegedly broke antitrust laws to end their association with 43 minor-league teams. They claimed that the consolidation of the minor-leagues was nothing but a “naked, horizontal arrangement to cement MLB’s dominance in all professional baseball.” However, the complaint states that the teams collectively decided to boycott the MLB’s teams.

The MLB relied upon its exemption from antitrust laws to justify its dismissal. “Plaintiffs’ claim must be dismissed because it is clearly barred by baseball’s exemption from antitrust laws, first recognized years ago by the Supreme Court and now codified by Congress with regard to the minor league relationships in question here,” reads the motion.

The Justice Department questioned whether baseball’s antitrust immunity should be maintained despite courts’ growing suspicion of the league’s carveout. It pointed out that the Supreme Court recognized last year that the exemption was an “exception and a anomaly” and a “beberration confined only to baseball.” Other sports, such as the National Football League or International Boxing club, were also rejected.

Federal attorneys urged lower courts in this case, a federal court located in New York, for a narrow interpretation of the exemption to the “business” of baseball .”

The exemption was brought back to light by the Supreme Court’s opinion in an antitrust case against the National Collegiate Athletic Association. Justice Neil Gorsuch wrote that the Supreme Court was willing to remove the baseball carveout.

The Advocates for Minor Leaguers and the MLB didn’t immediately respond when we asked for comment.

Read More