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San Jose sues Major League Baseball, challenging its monopoly power

Jun 18, 2013, 2:27 PM EST

Chuck Reed San Jose

The City of San Jose has sued Major League Baseball in an effort to get the Oakland A’s to relocate to San Jose, to challenge the Giants claim to rights over the territory and to challenge Major League Baseball’s long-standing monopoly power.

The lawsuit, a copy of which can be seen here, and which is analyzed in-depth here, alleges that Major League Baseball has caused San Jose to lose prospective financial benefits and deals by virtue of the A’s moving there and violations of state and federal antitrust laws.

This will get big headlines, but until I see the lawsuit or have someone tell me otherwise, I can’t see how the City of San Jose would have a leg to stand on. Literally: I think legal standing is a big, big problem here.

Standing, for purposes of a lawsuit, is the idea that focuses on whether a plaintiff in a lawsuit can show that he or she some personal legal interest that has been damaged by the defendant. It is not enough that the plaintiff has an interest of sorts or a prospective interest. It has to be a concrete personal stake in the outcome of the suit. You may be very interested in a big real estate deal going down, but you can’t sue the people involved for not letting you into the deal on the idea that, “man, I would’ve made a ton of money!”  You have to be in the deal already and have your rights violated.

I don’t see how San Jose has that standing here. Yes, they would benefit greatly from the A’s moving to San Jose and yes MLB’s monopoly rules which control where franchises can and cannot be are preventing it. But they are not party to those rules. They have no hard and fast deal with the Oakland A’s yet. There have been statements of principles and plans announced pending MLB approval of an A’s move, but nothing hard and in stone. Indeed, if the A’s had committed to San Jose in such a way already, the Giants and/or Major League Baseball likely would have sued them by now.

I hate baseball’s monopoly power. I think it makes watching games on TV difficult and I think it makes the game less competitive by keeping teams from doing everything they can to compete. But that doesn’t give me the right to sue Major League Baseball over it. The A’s in San Jose would make San Jose’s life way better too, many would argue. But just because they’re not doesn’t give San Jose the right to sue either. What would make this different is if Lew Wolff and the A’s were involved. And I find it almost impossible to believe that they would be.

UPDATE: How about more than impossible the A’s would be involved here. From Michael McCann’s column about Frank McCourt back in 2011 in Sports Illustrated:

MLB could also highlight the “waiver of recourse” clause found in the MLB constitution. This clause prevents clubs from engaging in litigation against the commissioner, the league or other owners. Indeed, by virtue of becoming a franchise owner, an owner waives away the right to seek remedies that would normally be available through the legal system. The clause also compels owners to resolve their differences internally and to accept the commissioner’s judgment as binding.

This would prevent the A’s from joining in.  I’m told the San Jose complaint, however, alleges that the MLB Constitution is expired now. Which would be odd, but that’s the claim. Likely asserted so that the A’s could later join the suit if it gets further down the road.

  1. echech88 - Jun 18, 2013 at 2:32 PM

    I imagine this isn’t about the actual lawsuit and more about bringing attention to the issue and putting some pressure, how little it may actually be, on MLB to just get out of the way.

    Territorial rights just doesn’t make sense to me when you have two teams in Chicago, two in New York and two in the LA/OC area all sharing territory.

    • teambringitstrong - Jun 18, 2013 at 2:36 PM

      Actually you are quite wrong. None of the other 2 team cities have a minor league affiliate in the other’s proposed home, i.e., San Jose Giants.

      • echech88 - Jun 18, 2013 at 2:49 PM

        A minor league team is holding this up. Right!

        That is meaningless. The Angels and Dodgers just swapped affiliates in their shared territory a year or two ago. The world did not end and neither team’s fans in Rancho Cucamonga switched allegiances accordingly.

      • DJ MC - Jun 18, 2013 at 2:55 PM

        Minor-league clubs don’t have rights over higher-level clubs. The High-A SJ Giants could prevent the A’s from moving a Low-A or below club in, but wouldn’t have an standing against the A’s.

  2. sabatimus - Jun 18, 2013 at 2:36 PM

    Well, seeing how a City doesn’t actually have legs, I guess your use of “literally” is apt.

    • jwbiii - Jun 18, 2013 at 3:27 PM

      San Jose was incorporated in 1850, and as we all know, corporations are people.

  3. minimoose763 - Jun 18, 2013 at 2:40 PM

    Look, the A’s will never move to San Jose. It just won’t happen. What Oakland and the A’s should do is pony up for a new stadium on the water front. How cool would it be for the A’s new stadium to be in the Jack London Square area?

    • echech88 - Jun 18, 2013 at 2:46 PM

      Because the City of Oakland and the State of California are just so overflowing with money to spend on stadiums right now.

      • Marty - Jun 18, 2013 at 2:53 PM

        SJ is hardly flush with revenue either.

      • evanwins - Jun 18, 2013 at 3:31 PM

        San Jose is right there in the middle of Silicone Valley. It’s not a huge city either. It has to be doing okay financially, doesn’t it?

      • Marty - Jun 18, 2013 at 5:42 PM

        SJ is struggling, crime is up and they continue to lay off police. Among other issues.

        Whether this is wholly due to the economy of their appropriations is up for debate. The Bay Area is fairing pretty well, and I’d put my bet on SJ recovering before Oakland. But SJ has always been a city living beyond its means. Feast and famine, without knowing the famine part too well, as exemplified by their desire to court a professional team months into the recovery of a major recession.

  4. laserrocketarm31 - Jun 18, 2013 at 2:46 PM

    The Athletics would have standing to bring such a suit. I am sure they do not want to do that for political purposes. Yet, if all of the existing options have been exhausted such a lawsuit could be brought to bring pressure on MLB. I do not know for sure but I wonder if the case that ruled the NFL was 32 separate entities could come into play. In that case MLB would want to complete a deal to keep it out of court.

    • Craig Calcaterra - Jun 18, 2013 at 2:53 PM

      Major League Baseball’s constitution prohibits clubs from suing the league unless the league has violated its own internal rules.

      • laserrocketarm31 - Jun 18, 2013 at 3:19 PM

        Thank you for clarifying. I am sure we would have seen suits in the past if it were possible for clubs to sue the league. It sounds as if it would take an Act of Congress to get monopoly power revoked.

      • DJ MC - Jun 18, 2013 at 3:32 PM

        @laser

        It would take an act of Congress or a Supreme Court case to overturn Federal Baseball Club v. National League.

      • amhendrick - Jun 18, 2013 at 3:57 PM

        Could the A’s sue and claim that MLB’s constitution itself violates anti-trust law?

  5. specialkindofstupid - Jun 18, 2013 at 2:48 PM

    The A’s should just take a page out of the Angels’ playbook and call themselves the “San Jose Athletics of Oakland.”

  6. Marty - Jun 18, 2013 at 2:49 PM

    This better be 100% privately financed, or I will LOL so hard every time a cop is fired or a kid barely scrapes a public education in that city during the next decade.

    • neoshweaty - Jun 18, 2013 at 4:41 PM

      I wont laugh but every stadium should be privately financed or have an overwhelming majority of the money come from private sources. Tired of reading about owners threatening to leave if they don’t get more money for their stadium. The Carolina Panther’s owner has been on a mission to force the city to pay for upgrades to the stadium.

  7. dluxxx - Jun 18, 2013 at 3:35 PM

    Now I may be wrong here, but weren’t the rights given to Los Gigantes when they were proposing to move there? Seems to me that if that is the case, then they should give the rights back or let Oakland have them. Only seems fair…

  8. evanwins - Jun 18, 2013 at 3:37 PM

    Why is MLB being so obstinate about this? Just let them move to San Jose and build themselves a nice new ballpark.

    And how does this hurt the Giants?

  9. blabidibla - Jun 18, 2013 at 3:59 PM

    I grew up in San Jose. A good portion of San Jose residents are both A’s and Giants fans because they don’t have their own team. They go to both parks, buy both merch, etc… But San Jose has long had an identity crisis. they are a large city, but no one knows it.

    Give them their own franchise and they will embrace it. It will hurt both ticket and merch sales drastically as the locals will stay home to support “their team.”

  10. wogggs - Jun 18, 2013 at 4:26 PM

    I have not hit the link to read the suit, yet, but CA does recognize the tort of interference with prospective economic advantage. It is difficult to prove, but San Jose may be able to prove the elements here, given the clear intent of the A’s to move there (including acquiring property from San Jose to build a stadium). They could also seek declaratory relief regarding MLB’s right to prevent the A’s from moving, although this could suffer from a standing problem

  11. billybawl - Jun 18, 2013 at 4:27 PM

    If standing were the problem you suggest, how would private parties ever bring antitrust actions? Also, they filed claims under CA’s unfair competition law (preempted?) which is regularly used for much more tenuous claims than this.

    In any case, the complaint goes squarely against baseball’s antitrust exemption. The firm that filed the lawsuit is a well known antitrust attorney who has represented the NFL in antitrust suits. They know their ish. Getting interesting. I’d be interested to hear an antitrust attorney’s assessment of the case.

  12. American of African Descent - Jun 18, 2013 at 5:31 PM

    Craig: It’s been a long time since I researched anti-trust standing. But my recollection is that the standing requirements are a lot more lenient in anti-trust cases, just like they are in the first-amendment/freedom-from-religion cases. If you come to a different legal conclusion, please cite some authority as, like Chuck Norris, the burden of proof is never on me.

  13. butchg1965 - Jun 18, 2013 at 5:52 PM

    Lew Wolff and the A’s are precluded from joining the suit by the “waiver of recourse” clause, but the city of San Jose may still be able to make a case that they have standing. If San Jose argues that they have a de facto Public/Private partnership with the A’s as it relates to the stadium development project, and that MLB’s policies are damaging that partnership, then they could have a case. If they prevail on that point, I think MLB will be forced to sit down and negotiate. Baseball wants to preserve their anti-trust exemption at all costs and won’t risk it ending up before the Supreme Court for something like this. Today’s owners are making *billions* under the current model, and if San Jose can prevail on the question of standing, then they may very well be able to force a decision one way or the other. Just my $0.02

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