Cangrejeros de Santurce Baseball Club, LLC v. Liga de Beisbol Profesional de Puerto Rico, Inc.
23-1589
| 1st Cir. | Jul 21, 2025Background
- Plaintiffs (Cangrejeros de Santurce Baseball Club LLC, Santurce Merchandising LLC, and owner Thomas Axon) sues the Puerto Rico professional baseball league (and related parties) after being forced to relinquish control of the Cangrejeros franchise.
- Plaintiffs allege the forced removal and transfer of their franchise violated federal antitrust law (Sherman Act), Puerto Rico antitrust/fair competition laws, and federal civil rights law (42 U.S.C. § 1983), along with local tort claims.
- The district court dismissed all claims, holding the "business of baseball" exemption to the Sherman Act applies beyond Major League Baseball (MLB)—including this league—thus barring both federal and state antitrust/fair competition claims.
- The district court also dismissed the § 1983 claim on res judicata grounds due to prior related proceedings in Puerto Rico courts and declined jurisdiction over any remaining Puerto Rico law claims.
- On appeal, the First Circuit affirmed the application of the "business of baseball" exemption to the Sherman Act claims but reversed/vacated dismissals of Puerto Rico antitrust/fair competition claims and the § 1983 claim, remanding for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of "business of baseball" exemption | Applies only to MLB and direct affiliates, not PR leagues | Applies to any pro baseball league conducting the "business of baseball" | Applies to Puerto Rico league and bars Sherman Act claims |
| Exemption's application to specific conduct | Only conduct "central" to operating a league is exempt; owners ouster is not sufficiently central | League enforcement of franchise ownership rules is central and thus exempt | Enforcement of franchise ownership rules is "central" and covered by the exemption |
| Preemption of Puerto Rico antitrust/fair comp | Exemption doesn't bar PR-law claims; PR law should apply | Federal exemption and Supremacy Clause/Commerce Clause preempt PR antitrust regulation | Exemption alone doesn’t preempt PR law claims; remanded for Commerce Clause analysis |
| Res judicata on § 1983 (civil rights) claim | No perfect identity of parties/claims as required under PR law; previous ruling not on the same core issues | Prior local judgment bars § 1983 claim through res judicata | Res judicata does not bar § 1983 claim given legal changes and lack of perfect identity |
Key Cases Cited
- Fed. Baseball Club of Balt. v. Nat'l League of Pro. Base Ball Clubs, 259 U.S. 200 (1922) (establishes the "business of baseball" exemption from antitrust law)
- Flood v. Kuhn, 407 U.S. 258 (1972) (upholds and critiques the anomaly/narrowness of the baseball antitrust exemption; dismisses state law claims in MLB context)
- Toolson v. New York Yankees, Inc., 346 U.S. 356 (1953) (reaffirms baseball’s immunity from federal antitrust regulation)
- Radovich v. Nat’l Football League, 352 U.S. 445 (1957) (confirms that the exemption is unique to baseball and not extended to other sports)
- United States v. Int'l Boxing Club of N.Y., 348 U.S. 236 (1955) (refuses to extend the baseball exemption to boxing)
- Major League Baseball v. Crist, 331 F.3d 1177 (11th Cir. 2003) (addresses preemption and state antitrust law claims in context of the baseball exemption)
- Southern Pac. Co. v. Arizona, 325 U.S. 761 (1945) (analyzes extraterritorial state regulation under the Commerce Clause)
- California v. ARC America Corp., 490 U.S. 93 (1989) (states' antitrust laws generally coexist with Sherman Act)