United States: Oakland A’s May Not Move, Ninth Circuit Says

After the Ninth Circuit's decision on January 15, 2015, Major League Baseball maintains its exemption from the antitrust laws. Since the Supreme Court established baseball's antitrust exemption nearly a century ago in 1922, neither the Supreme Court nor Congress has significantly changed the rule. As we have previously reported, the Supreme Court revisited the antitrust exemption twice since 1922 and both times upheld it on stare decisis  grounds and because Congress had implicitly acquiesced to the Supreme Court's decision by not overturning it. The exemption extends broadly to the entire "business of providing public baseball games for profit between clubs of professional baseball players."

In City of San Jose v. Commissioner of Baseball, San Jose challenges the MLB's rules on franchise relocation. The City wants the Oakland A's to relocate to San Jose but the Oakland A's are currently barred from doing so by the MLB's franchise relocation rules since San Jose is in the "geographic territory" of the San Francisco Giants.

As Judge Kozinski declared for the Ninth Circuit last week, the franchise relocation rules are at the very heart of providing baseball games for profit and thus he declined to overturn nearly a century of precedent. Thus, for now, the Oakland A's stay put.

Congress has explicitly acknowledged the Supreme Court's 1922 decision and partially codified it. In 1998, Congress passed the Curt Flood Act, which withdrew baseball's antitrust exemption with respect to the "reserve clause and other labor issues, but explicitly maintained  it for franchise relocation." The Supreme Court's 1972 baseball antitrust decision held the reserve clause – which prevented players from signing with other clubs, even after their contracts had expired, without consent – was exempt from antitrust scrutiny.

Thus, due to explicit congressional acquiescence and stare decisis, the Ninth Circuit declined to overturn or carve out an exception to the historic rule. Philip Gregory, one of the attorneys for San Jose, was expecting this outcome and stated that San Jose will soon be filing for a petition of certiorari to the U.S. Supreme Court. Whether the Supreme Court will be willing to overturn its nearly century-old precedent or implicitly overrule Congress's Curt Flood Act remains to be seen.

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