City of San Jose v. Office of the Commissioner of Baseball
2015 U.S. App. LEXIS 675
| 9th Cir. | 2015Background
- MLB requires teams to play within designated home territories; the Oakland Athletics sought to relocate to San Jose, which lies in the San Francisco Giants’ exclusive territory and requires approval from three-quarters of MLB clubs.
- MLB’s Relocation Committee delayed action for years; the Athletics entered an option to buy city land but could not close without MLB approval, leaving the property idle.
- San Jose sued MLB alleging federal and state antitrust violations, California UCL and tort claims, alleging MLB’s delay protected the Giants’ local monopoly.
- The district court dismissed federal and state antitrust and UCL claims based on baseball’s long-standing antitrust exemption, leaving only tort claims (later dismissed without prejudice); San Jose appealed.
- The Ninth Circuit reviewed de novo and evaluated whether the baseball antitrust exemption (from Federal Baseball, Toolson, and Flood) covers franchise relocation and thus bars San Jose’s claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the baseball antitrust exemption applies to franchise relocation | Flood applies only to the reserve clause; relocation is not covered | Flood and its predecessors exempt the whole business of organized baseball, including relocation | Exemption covers franchise relocation; federal antitrust claims dismissed |
| Whether Flood should be limited to its facts or requires fact-specific inquiry into "unique characteristics and needs" of baseball | Court must perform a fact-sensitive inquiry to see if relocation implicates baseball’s unique needs | Flood, Toolson, and Federal Baseball set a broad, industry-wide exemption without a case-by-case test | No remand; Flood’s stare decisis and congressional acquiescence support a broad exemption |
| Whether Congress’s 1998 Curt Flood Act indicates exemption does not cover relocation | Curt Flood Act removed exemption for labor issues, implying exemption should not apply elsewhere | Act explicitly preserved the exemption for franchise location/relocation | Act’s explicit preservation of relocation immunity reinforces exemption’s applicability |
| Viability of state antitrust and California UCL claims after federal claims are barred | State law provides independent remedies; UCL claim should survive | Federal baseball exemption preempts state antitrust claims; UCL fails if antitrust claim fails | State antitrust claims barred as an end-run; UCL claim fails for same reason |
Key Cases Cited
- Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs, 259 U.S. 200 (Sup. Ct.) (establishing baseball’s antitrust exemption)
- Toolson v. New York Yankees, Inc., 346 U.S. 356 (Sup. Ct.) (reaffirming Federal Baseball and leaving any change to Congress)
- Flood v. Kuhn, 407 U.S. 258 (Sup. Ct.) (extending exemption and emphasizing stare decisis and congressional acquiescence)
- Radovich v. National Football League, 352 U.S. 445 (Sup. Ct.) (distinguishing football from baseball exemption analysis)
- Portland Baseball Club, Inc. v. Kuhn, 491 F.2d 1101 (9th Cir.) (applying Flood to antitrust claims beyond the reserve clause)
- Twin City Sportservice, Inc. v. Charles O. Finley & Co., Inc., 512 F.2d 1264 (9th Cir.) (demonstrating some baseball-related claims are assessed without invoking the exemption)
- Charles O. Finley & Co., Inc. v. Kuhn, 569 F.2d 527 (7th Cir.) (recognizing Flood’s industry-wide scope)
- Prof’l Baseball Sch. & Clubs, Inc. v. Kuhn, 693 F.2d 1085 (11th Cir.) (holding relocation integral to baseball business)
- Major League Baseball v. Crist, 331 F.3d 1177 (11th Cir.) (state antitrust claims preempted when mirroring federal claims)
- California v. ARC Am. Corp., 490 U.S. 93 (Sup. Ct.) (federal antitrust law normally supplements state law; here Flood precluded state claims)