City of San Jose v. Comm'r of Baseball, No. 14-15139 (9th Cir. 2015)
Annotate this CaseThis case arose when the Oakland Athletics wanted to move to the City of San Jose, but the City falls within the exclusive operating territory of the San Francisco Giants. The City, seeking approval of the move, filed suit against MLB, alleging violations of state and federal antitrust laws, of California's consumer protection statute, and of California tort law. The district court granted MLB's motion to dismiss on all but the tort claims and the City appealed. The City argues that the baseball industry's historic exemption from the antitrust laws does not apply to antitrust claims relating to franchise relocation. The court held, however, that antitrust claims against MLB's franchise relocation policies are precluded by Flood v. Kuhn, and, under Portland Baseball Club, Inc. v Kuhn, the court rejected any antitrust claim that was wholly unrelated to the reserve clause. Therefore, the City's claims under the Sherman Act and Clayton Act, 15 U.S.C. 1-7 and 15 U.S.C. 12-27, must be dismissed. Further, the City's antitrust claims necessarily fall with its federal claims where the City can point to no case that has ever held that state antitrust claims continue to be viable after federal antitrust claims have been dismissed under the baseball exemption. An independent claim under California's unfair competition law is also barred so long as MLB's activities are lawful under the antitrust laws. Accordingly, the court affirmed the judgment of the district court.
Court Description: Antitrust / Baseball Exemption. The panel affirmed the district court’s dismissal of the City of San Jose’s antitrust action regarding the Office of the Commissioner of Baseball’s delay in deciding whether to approve the Oakland Athletics’ move to San Jose, which is within the exclusive operating territory of the San Francisco Giants. The panel held that the baseball industry’s historic exemption from the antitrust laws, upheld in Flood v. Kuhn, 407 U.S. 258 (1972), barred San Jose’s antitrust claim regarding franchise relocation under the Sherman and Clayton Acts and state law. The panel held that under Portland Baseball Club, Inc. v. Kuhn, 491 F.2d 1101 (9th Cir. 1972), Flood is not limited to baseball’s “reserve clause.” Rather, antitrust claims against Major League Baseball’s franchise relocation policies are in the heartland of those precluded by Flood’s rationale.
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