A federal court judge in San Jose threw out a big part of the city’s lawsuit against Major League Baseball, an action that accuses the sport’s officials and team owners of violating antitrust laws by failing to act on the Oakland A’s request to move to the South Bay.
But U.S. District Court Judge Ronald Whyte also ruled that San Jose can go ahead with its claim that Major League Baseball has broken state law by interfering with its contract to sell the A’s a stadium site. The city’s lawyers say that ruling creates an opening for a resolution of the longstanding dispute over the A’s relocation because baseball officials, including Commissioner Bud Selig, will try to avoid testifying about why the A’s move has been blocked.
The A’s and San Jose have been working for more than four years to make the move happen, with the city and team signing a deal that would let the A’s buy downtown parcels where the team would build a 32,000-seat stadium. But major league owners have never acted on the request. That’s because the San Francisco Giants have refused to give up their exclusive territorial rights to the South Bay.
Last June, the city sued, saying baseball’s failure to act on the request and its system of exclusive territories amounted to monopolistic behavior barred by federal anti-trust laws. The suit also alleged baseball had illegally interfered with San Jose’s contract with the A’s. That tortious interference had cost the city money, the San Jose suit alleged, and damaged its future economic prospects.
In his 26-page ruling (embedded below), Whyte stuck closely to 60 years of federal case law in dismissing San Jose’s antitrust claims. He noted that many courts have questioned a 1922 U.S. Supreme Court ruling that exempted baseball from the nation’s antitrust statutes. Whyte said he agreed with earlier jurists that the exemption is “unrealistic, inconsistent, or illogical.” But like them, he concluded it’s up to Congress, not the courts, to remove the exemption.
On the contract-interference claim, Whyte found that the city had presented a substantial enough claim that that part of the case can proceed. Joe Cotchett and Philip Gregory, the lead attorneys for San Jose, say that depositions and document disclosure in the case could prove embarrassing for MLB Commissioner Bud Selig, team owners and the Giants.
“They’re going to now have to give depositions as to why they wouldn’t allow Oakland to go down there,” Cotchett said after the ruling was released. “Bud Selig now has to come into court and under oath testify.”
“The issue all along has been Major League Baseball refusing to deal with either the city or the A’s on this issue and delaying and delaying and delaying,” Gregory said. “Now they have the prospect of having to open their books and allow the citizens of San Jose to see the real reason why the team hasn’t been allowed to relocate.”
Cotchett told KQED he doesn’t think things will get that far. He thinks that under pressure to reveal what goes on behind MLB’s closed doors, something will give. “I think the case, at this point, will get resolved.”
Major League Baseball released a statement suggesting it believes the case will get resolved, too — in its favor, in court:
“Major League Baseball is pleased that the Court dismissed the heart of San Jose’s action and confirmed that MLB has the legal right to make decisions about the relocation of its member Clubs. The Court dismissed all of San Jose’s state and federal law claims challenging that right. We are confident that the remaining state law claims, which assert that San Jose’s costs associated with the option agreement for the sale of real estate were increased by the timing of MLB’s decision-making process, will be decided in MLB’s favor, and that San Jose has not suffered any compensable injury.”
San Jose Mayor Chuck Reed also issued a statement:
“I am pleased that the judge has allowed our case to move forward. Major League Baseball’s unfair and anti-competitive actions are costing San Jose residents millions of dollars in annual tax revenues that could go towards paying for more police officers, firefighters, libraries, road repairs and other critical services.
San Jose filed this lawsuit after waiting patiently for more than four years for a decision from Commissioner Selig. The court’s decision this brings us one step closer to paving the way for San Jose to host a major league ballclub.
(Gregory and Cotchett also hailed Whyte’s ruling in language that will warm the hearts of their South Bay clients and infuriate A’s partisans still hurting after last night’s season-ending loss to the Detroit Tigers: “While the A’s may have lost a playoff series last night, the city [of San Jose] and the A’s won in court today,” Gregory said.)
For a takeaway, I’m going to turn to Wendy Thurm, a journalist and former lawyer whose tweets we followed closely during Judge Whyte’s hearing on the MLB dismissal motion last week. She writes on the Fangraph sports site this afternoon:
So, now what?
There’s no question that the antitrust claims were the main attraction in the lawsuit. MLB wants to keep its exemption in place, and San Jose’s challenge to it presented a threat. That threat is gone, for now, as the city decides whether to immediately appeal the court’s order. Whether San Jose can appeal now — with the one state law claim surviving the motion to dismiss — is a complicated question. Typically, courts do not permit piecemeal appeals. San Jose also lost the ability to ask the court to force MLB to permit the A’s to relocate. That kind of remedy would have been potentially available only under the antitrust law.
On the other hand, the city can proceed on its interference claim. That means MLB will be forced to turn over documents related to its decision-making process and MLB witnesses — including Commissioner Selig, the members of his Blue Ribbon Commission on the relocation, and MLB owners — will have to answer questions under oath.
My guess is that San Jose will try to proceed on two tracks: ask the Ninth Circuit Court of Appeals to hear an appeal on the antitrust claims immediately and start issuing subpoenas for documents and depositions. MLB will resist both an immediate appeal and San Jose’s effort to dig deep on the league’s decision-making process.
To me, Judge Whyte’s order screams “settlement” — in the sense that neither side got what it wanted and there might be just enough to get the two sides talking about a resolution. If that’s the court’s intent — and I could be wrong on that — we’ll see him give San Jose wide latitude on documents it can subpoena and witnesses it can question under oath, all with the idea that MLB would rather resolve the matter than have to reveal its inner workings in discovery.