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It’s hard to see today’s ruling as a victory for San Jose

Oct 11, 2013, 4:22 PM EST

MLB Commissioner Bud Selig speaks during a news conference in New York Reuters

I’ve taken a few minutes to gather some thoughts on today’s decision in the San Jose-MLB antitrust lawsuit. I have still not read the decision, but it does appear that the status being currently reported is accurate: (1) the argument by San Jose to have Major League Baseball’s antitrust exemption struck down, thereby paving the way for the A’s to move to San Jose over the Giants’ objection has been dismissed; and (2) San Jose continues to have a viable claim against MLB for tortious interference with the city’s contract(s) with the Athletics, which will be pursued under state law.

Let’s take those one-by-one:

San Jose’s Antitrust claim

This was obviously the big target here. And a nice fat one if San Jose could’ve convinced the judge that baseball’s antitrust exemption — which prevents a team from moving into another’s territory — is stupid and wrong.  And the judge did, apparently, say that the exemption is stupid and wrong. Unfortunately he also said that he felt bound by Supreme Court precedent to uphold it, so that matter will now likely be the subject of an appeal. Major League Baseball still has risk of losing their exemption on appeal, but they just bought a year at least before an appeals court rules on it and longer than that before the matter might get to the Supreme Court, which would ultimately have to weigh in to overturn the original case which granted the exemption.

With the claims to overturn the exemption gone, at least for now, the A’s will be unable to move to San Jose. The league rule establishing San Jose as the San Francisco Giants’ territory holds, thus preventing the A’s from going to San Jose.

The state tort law claims

This is the claim alleging that MLB tortiously interfered with San Jose’s contract with the A’s. If you recall: the contract is an option agreement entered into in 2011 between the A’s owners and San Jose for the purchase of some land on which a ballpark would be built. The A’s paid San Jose $50,000 for the option. It expires soon. If they want to keep the option open for another year it’s another $25,000. If the A’s owners were to buy the land, they can do it for between $6 million and $7 million. Nothing in the option agreement, however, promises that the A’s will actually move. It doesn’t even promise that they’ll buy the land. Just that they have the option to do so.

Of course, since the antitrust exemption is in place, the A’s can’t just decide to move to San Jose. Therefore, unless they are the biggest idiots on the planet, they will not agree to commit to the $7 million land deal. Put differently, no A’s witness will get on a stand and say “yes, we totally want to give San Jose $7 million right now but MLB won’t let us!”  As such, the value of the contract that San Jose now has to prove MLB interfered with is $75,000. That’s it.

Where that leaves us

Much of the reaction in the past few hours — including opinion from legal minds I respect, such as FanGraphs’ Wendy Thurm — has it that this outcome gives San Jose leverage to force a deal with MLB to get the A’s to San Jose.  I’ll grant that they’re better off now than they would be if the whole suit had been tossed — and I do want to read their thoughts on it and may change my mind on the matter if they point out something I’m totally missing here — but I can’t see how San Jose suddenly has much more leverage than it had before.

One idea is that Major League Baseball might fear discovery and depositions that could take place.  I’ll grant that no one wants to have their deposition taken, how threatening is this really? The current claim is limited in scope: $75K on a land option. How much email traffic do you think MLB officials have had on that? And how much of it is damning? Sure, maybe there’s all kinds of stuff about how MLB is “conspiring” to keep the A’s out of San Jose, but so what? The court just ruled that, under the antitrust exemption, such behavior is totally legal!

More broadly: how dumb is Major League Baseball? Not too dumb, usually. The entire purpose of Bud’s famous committee on San Jose was to do … nothing. There are likely reports about city and stadium viability and all of that, but the reason you set up that committee is to funnel everything to it and make it disappear for half a decade. Or at least to have it sit there innocuously. It’s staffed, by the way, in part by lawyers who have worked for MLB before. You think they’re sitting on smoking guns? Hardly.

Any effort by San Jose to dig deeper than the matters specific to the A’s and their option contract is irrelevant and discovery about that stuff will be resisted. Maybe they get some things, maybe they don’t. But they don’t get the keys to all of MLB’s finances and Bud Selig’s health records and the famous list of positive PED players and Larry Baer’s grandmother’s apple fritter recipe. With limits on discovery there are limits on leverage. And with an existing claim this small, the discovery will be limited.

OK, long enough, Craig, sum it up

Having a claim hanging out there is not good for MLB. But having a trial court decision that the antitrust exemption is still the law outweighs it for now. There was pressure on MLB to avoid a bad decision on that in the trial court and that didn’t get them to the settlement table. There is now pressure, to a degree, to resolve this before an appeals court decides differently. But that’s down the road a bit, and if anything the league has more breathing room on that today than it did yesterday.

It’s a partial win for San Jose, sure. But they lost the big claim and have gained nothing in the short term. More importantly, this does nothing to get the A’s any close to San Jose.

  1. Joe - Oct 11, 2013 at 5:02 PM

    Actually San Jose’s claim is only $25K, isn’t it? They already received the $50K option payment a few years back. And even then it’s a pretty thin claim, because the A’s are not obligated to extend the option, and they shouldn’t if they are never going to be able to move. That’s in the same bucket as the $7 million claim.

  2. American of African Descent - Oct 11, 2013 at 5:29 PM

    Hey, Craig, how about posting a link to the order? Some of us are too lazy to go on CM/ECF ourselves.

  3. wjchen468 - Oct 11, 2013 at 5:54 PM

    Actually, I think the appeal may be more of the leverage. I am no expert but I think under the Federal Rules of Appellate Procedure, if a case is appealed to an Appellate Circuit, the Supreme Court may step in and take the case. I am pretty sure state appellate courts work in this way and I think the fed courts work the same. Though I am not sure.

    However, if it does work that way, MLB may not want the appeal to take place. Right now the antitrust exemption is a pretty tasty carrot to MLB. If it gets appealed and the SCOTUS steps in and takes the case it might indicate that the SCOTUS is willing to reverse the exemption. So, San Jose may be able to use the threat of the appeal to get MLB to act on a San Jose relocation. Just spit balling, but I don’t think MLB would want this case to get before the SCOTUS.

    • billybawl - Oct 11, 2013 at 6:12 PM

      This. The trial court’s ruling on the antitrust question is hardly the last word, and the decision is just setting the stage for appeals. I don’t think MLB is — or should be confident — that the exemption would survive appeal to the SCOTUS.

      If San Jose and/or the A’s press this far enough, I wouldn’t be surprised if MLB decides that the certainty of continuing the exemption outweighs even a small risk that the exemption gets tossed. I don’t think other owners would risk this just to appease the Giants. All roads lead to eventual settlement. I also think Selig will insert himself more as his tenure draws to a close. I don’t think most CEOs would want to pass such a turd on to a predecessor.

      • jkcalhoun - Oct 11, 2013 at 6:28 PM

        I’m reluctant to presume that MLB’s resistance to date to revising its constitution in favor of the A’s move has been established “to appease the Giants”. Why would 22 other owners care much about the value the Giants’ place on their continued control of the territorial rights to Santa Clara?

        I think they care far more about the inviolability of their own territorial rights, that the A’s are stuck not because the other clubs are concerned about the impact an A’s move would have on the Giants, but because of the impact on their own clubs on weakening the value of their territorial rights, a weakening that would affect the resale value that franchises could command.

        So I’m not as convinced as you are that MLB will be quick to settle. What good is the exemption to them if they’re always going to pass on invoking it, in order to avoid having to defend it? This is one case in which they may choose to do so.

    • 4cornersfan - Oct 11, 2013 at 6:22 PM

      wjchen468:
      The appeal would most likely go through the 9th Circuit and be appealed on certiorari to the USSC. A decision by the lower appellate court would marshal the facts and frame the law for review. The SC likes that so that it can keep its rulings narrow and rarely bring a case up like you are talking about. I think it is likely that the SC would overrule its previous decisions in Federal Baseball Club and Toolson. There is no difference that I can think of between the operation of other professional sports and the MLB. The 1953 Toolson opinion based its decision on the perception that travel between the states was incidental to the business. The thinking was that the revenue was earned from the games, not the travel. The fact that MLB has TV contracts with national broadcasters may change that perception. Also, the federal government’s regulation of interstate travel and what constitutes interstate travel has broadened considerably since 1953.

    • American of African Descent - Oct 11, 2013 at 7:54 PM

      Oh for the love of all that is good. YES YOU ARE FUCKING WRONG!

      First, the Supreme Court does not just jump in and take cases from the appellate courts.

      Second, why on earth do you think that the Supreme Court would even take this case up on cert.

      Third, there are at least five justices who really believe in stare decisis on the current court. If you think MLB doesn’t want this before the nine — that is, if you think that the Supreme Court would overturn its precedent — you’re nuts!

      • dan1111 - Oct 12, 2013 at 3:51 AM

        In fact, the current court has overturned precedent that they thought was wrong. So you can’t just say it won’t be overturned merely because they believe strongly in precedent. If it came before them and they thought this precedent was dumb, they would overturn it.

        The grounds on which the original case was ruled (the federal government does not have the authority to regulate baseball as interstate commerce) are surely untenable today, and though the court could decide to rule in favor of the status quo, as it did in 1953, I don’t think this should be considered a certainty.

        The MLB certainly doesn’t want this issue to come before the Supreme Court. Because, even if there is only a small chance of it being overturned, there is a 0% chance of it being overturned if it does not come before the Court. Would they allow Oakland to move just to avoid this? Doubtful, but it does seem to give leverage.

      • American of African Descent - Oct 12, 2013 at 3:11 PM

        Yes, the Court has overruled precedent. But — just like that the race is not always to the swift, nor the battle always to the strong — the best bet is still on stare decisis. (Consider also looking up the phrase “judicial gloss.”)

  4. righthandofjustice - Oct 11, 2013 at 6:06 PM

    I don’t think San Jose win neither but MLB and Selig are clearly the losers.

    As expected, the ruling is MLB’s exemption status granted in 1922 didn’t cover everything so it is still up to the Congress to decide what the original meaning and intent of that antiquated ruling was and how it fits nowadays, and also, the judge indirectly expressed his opinion the rule is outdated and doesn’t seem to be fair to other professional sports but being a minimalist he either doesn’t have the guts or patient to change it so he paved the way clear for San Jose to pursuit their own justice in Supreme Court if they wish to.

    The bottom line is MLB has lost their claim that they are bulletproof from any anti-trust case and they are opened up for a lot more problems in the future when people look back and see what harmful things they have done to both baseball and the society and decide to sue them.

    San Jose City Councilman Sam Liccardo, one of the big proponents of bringing the A’s to town and a driving force behind this lawsuits, rationalized Friday’s ruling this way:

    “We’re able to force Major League Baseball (and Selig) to TESTIFY in defense of their anti-competitive conduct,” he told the Mercury News, “while having the opportunity to appeal the antitrust issues.”

    Selig can run, but he can not hide. Old Bud, take the stand please! It is just a matter of whether San Jose, A-Rod, or somebody else are given the first chance to get him and MLB nailed.

  5. 4cornersfan - Oct 11, 2013 at 6:34 PM

    Sorry, it was the 1922, Federal Baseball Club decision that stated that the travel was incidental (“the transport is a mere incident, not the essential thing”). The Toolson case merely observed that Congress had had 30 years to change the antitrust laws to include baseball and hadn’t seen fit to do it.

  6. pastabelly - Oct 11, 2013 at 7:57 PM

    Oakland will end up paying a fee to the Giants for the right to play in San Jose. Time for all parties to settle. It’s best for everyone and baseball.

    • jkcalhoun - Oct 12, 2013 at 1:12 AM

      For that to happen 22 owners have to agree that it’s best for everyone and for baseball, and so far there’s no indication that as many as that are ready to do so.

      Let me repeat: this standoff is not between the A’s and the Giants. It’s between the A’s and MLB. There’s a reason the City of San Jose took MLB to court and not the Giants — they know who the real opponent is.

  7. psly2124 - Oct 11, 2013 at 9:54 PM

    Why would the a’s want to stay in California. Taxes are highest in the country. Move to a tax friendly state, end if story. Everyone and everything is fleeing California. The only think left there will be illegals and liberals. They will have there utopia, which leads to bankruptcy

  8. psly2124 - Oct 11, 2013 at 9:54 PM

    Why would the a’s want to stay in California. Taxes are highest in the country. Move to a tax friendly state, end if story. Everyone and everything is fleeing California. The only think left there will be illegals and liberals. They will have there utopia, which leads to bankruptcy

    • Anoesis - Oct 11, 2013 at 11:10 PM

      Reality check: The property tax rate in one of those “tax friendly” states, Texas, is higher than California. Facts like these are easily Googled.

      Your statement that “everyone and everything is fleeing California” reminded me of what Yogi Berra once said about a restaurant, “Nobody goes there anymore. It’s too crowded.” The past several years have seen more people leave California than move in, but it will remain the nation’s most populous state for the foreseeable future.

      Since electing an old bleeding-heart, socialist liberal (former governor Jerry Brown) California has turned a huge deficit under Republican Arnold Schwarzenegger into a surplus. Keep drinking that Kool Aid. Do they give you different flavors, or are you stuck with the same old Cherry?

      California has lots of problems, just like every other state in this union. I would have preferred to not have seen the population double while I was growing up there, but there were solid reasons people moved there. Just as they do today. Reading your error-filled critique makes me think you might have gone to public school there, but then again, public schools all over the U.S. suck.

      • bigbuffguy95 - Oct 12, 2013 at 5:46 AM

        Well, OK. But Texas also doesn’t have a state income tax, and California’s is pretty high. But feel free to ignore that factor in your “analysis.” A better way to look at it is not at one tax or another, but at total taxes. According to USA Today, Californians pay 11.2 percent of their income in taxes, which is the fourth highest tax burden in the country, behind only New York, New Jersey and Connecticut. Meanwhile, Texans pay 7.9 percent, which is the sixth lowest in the country, behind only Alaska, South Dakota, Tennessee, Louisiana and Wyoming (I will refrain from pointing out a fairly obvious correlation between states’ tax burdens and their general voting patterns). I’m not here to hate on California, but since you insist on using statistics disingenuously, I have to point it out.

  9. Anoesis - Oct 11, 2013 at 11:24 PM

    “And the judge did, apparently, say that the exemption is stupid and wrong. Unfortunately he also said that he felt bound by Supreme Court precedent to uphold it, so that matter will now likely be the subject of an appeal.”

    Mixed kudos to the judge for supporting established law, even if he is referring to the Supreme Court which lately has chosen to not support established law.

  10. mkprz - Oct 15, 2013 at 12:06 PM

    Selig is gone in a year. Finally.
    Now let’s get Pete in the Hall Of fame where he belongs.
    Until Sosa, McGwire and Bonds are stripped of all their records, then keeping Pete out of baseball has no merit.

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