Sergio Miranda v. Allan Selig
2017 U.S. App. LEXIS 11293
| 9th Cir. | 2017Background
- MLB operates a farm system: MLB franchises employ and pay minor league players under a league-wide Uniform Player Contract that includes a seven-season reserve clause.
- Minor leaguers are not unionized, earn low monthly salaries (plaintiffs allege typical annual pay under $7,500), and work extensive hours including unpaid spring training.
- Plaintiffs (a class of former minor leaguers) sued MLB, the Commissioner, and the clubs alleging antitrust violations for concerted conduct fixing/minimizing minor league salaries. They sought damages and injunctive/declaratory relief.
- Defendants moved to dismiss under Rule 12(b)(6), arguing the longstanding baseball antitrust exemption applies and Congress preserved the exemption for minor-league employment in the Curt Flood Act.
- The district court granted dismissal; the Ninth Circuit reviewed de novo and affirmed, concluding precedent and the Curt Flood Act bar the Players’ antitrust claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether minor-league employment and contract practices are subject to federal antitrust laws | Minor-league pay-fixing and uniform contract practices are anticompetitive and not covered by baseball’s exemption | Business-of-baseball exemption covers minor-league employment conduct because minor leaguers are employed by MLB franchises | Exempt: minor-league employment and reserve-clause-related conduct fall within the baseball antitrust exemption |
| Whether federal courts should overrule Federal Baseball/Toolson/Flood and refuse to apply stare decisis | Courts can decline to follow outdated precedent (citing Leegin) given changed economics and unfairness | Lower courts are bound by Supreme Court precedent; only the Supreme Court or Congress may overrule Flood/Toolson/Federal Baseball | Bound by precedent: Ninth Circuit must follow Supreme Court decisions and prior circuit rulings; cannot refuse to apply the exemption |
| Effect of the Curt Flood Act on minor-league claims | Curt Flood Act does not immunize owners; Congress intended to subject baseball to antitrust law more broadly | Curt Flood Act expressly subjected major-league labor matters to antitrust law but preserved exemption for minor-league employment and related relationships | Curt Flood Act maintains the exemption for minor-league employment and reserve-clause matters, reinforcing exemption's applicability |
| Pleading sufficiency under Rule 12(b)(6) | Plaintiffs alleged facts of low pay and coordinated salary practices sufficient to state an antitrust claim | Given controlling precedent and statutory text, plaintiffs’ allegations cannot state a plausible antitrust claim | Complaint fails as a matter of law because the challenged conduct is exempt; dismissal was proper |
Key Cases Cited
- Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs, 259 U.S. 200 (1922) (establishes baseball’s antitrust exemption on the ground baseball exhibitions are not interstate commerce)
- Toolson v. New York Yankees, Inc., 346 U.S. 356 (1953) (declines to overrule Federal Baseball and defers change to Congress)
- Flood v. Kuhn, 407 U.S. 258 (1972) (reaffirms baseball exemption, discusses precedent and congressional inaction)
- City of San Jose v. Office of the Commissioner of Baseball, 776 F.3d 686 (9th Cir. 2015) (Ninth Circuit holds franchise-relocation rules fall within the baseball exemption and interprets Curt Flood Act exclusions)
- United States v. Shubert, 348 U.S. 222 (1955) (holds baseball exemption does not extend to traveling theater companies; court defers expansion of exemptions to Congress)
- United States v. Int’l Boxing Club of N.Y., 348 U.S. 236 (1955) (refuses to extend baseball exemption to professional boxing)
- Radovich v. National Football League, 352 U.S. 445 (1957) (refuses to extend baseball exemption to professional football)