Understanding the Antitrust Suit Against MLB by Former MiLB Teams

Image credit: Syndication: Poughkeepsie

No one has attempted to punish Major League Baseball in any way for their forced shrinking of Minor League Baseball, but that might be changing. Four teams who were disaffiliated before the 2021 season—the Staten Island Yankees, Tri-City Valley Cats, Norwich Sea Unicorns, and Salem-Keizer Volcanoes—filed an antitrust suit against MLB in the U.S. District Court in Manhattan on December 20. 

This is a better place than where these fights were a year ago. The Valley Cats and Staten Island Yankees previously sued their former parent clubs—the Astros and Yankees, respectively—as well as MLB early in 2021, and while that was a positive in a vacuum, there was something missing. The suits were too individualistic, and weren’t about to change anything: if the Valley Cats got the $15 million they were demanding, that was going to be good for the team’s owners, sure, but like with a settlement that leads to a monetary payment and everyone forgetting what happened, what real good was going to come of the suit? 

Now, though, those two clubs and another pair have banded together, and turned this from a suit seeking more personal damages into one focused on MLB’s antitrust behavior. That’s a significantly different fight, and one that might result in some kind of long-lasting, structural change—the kind that could keep another round of disaffiliation, which is certainly on the horizon someday given how easily MLB got away with this first go of things, from happening in the future.

Let’s take a step back before we start declaring victory over a 100-year-old exemption that the Supreme Court, on multiple occasions, has hinted at or outright said has outlived its usefulness and the context within which it was granted. It is very easy to get excited about an attack on MLB’s antitrust exemption, as its existence allowed for the league to do things like, well, disaffiliate dozens of clubs, shrink the minors, get rid of the Professional Baseball Agreement instead of negotiating a new one with MiLB’s leaders, and then create amateur wood bat leagues to replace some of what was discarded. As has been written about in this space before, the existence of the antitrust exemption makes challenging their power grabs a difficult proposition. Challenging the antitrust exemption itself has also proven difficult, however, and while there are some reasons to hope, I also fear that this is simply going to be another successful defense for MLB, by default.

Here is the most significant hurdle: retroactive liability. Nathaniel Grow wrote about retroactivity in an antitrust exemption primer for FanGraphs back in 2015, and it is vital, when discussing these matters, to remember that word:

…the Court feared that any decision reversing baseball’s antitrust immunity would unfairly subject the sport to retroactive liability, holding MLB legally accountable for activity that it had reasonably believed was beyond the scope of the antitrust laws. Because any monetary damages in federal antitrust suits are tripled, the Court may have even feared that MLB could potentially be driven into bankruptcy if countless current and former players affected by the reserve clause were freed to file their own antitrust lawsuits against the league.

Just four disaffiliated teams filed an antitrust suit against MLB, but if they succeed and SCOTUS scraps the exemption, you can bet that every other disaffiliated club would also file their own suits in order to get their own closure on the matter, and at triple the damages rate, to boot. Additional suits would follow from there, be they from players past and present, on any number of items that the antitrust exemption could be blamed on having to do with pay, or opportunities for work, or whatever else lawyers who know more about this than I do can think up. Consider how much impact the class action lawsuit Senne v. MLB could have on the league’s past, present, and future, and then ratchet it up a few notches for the chaos that would follow a successful antitrust suit that removes that very exemption.

Now, I’m not saying that shouldn’t happen—former minor-league players should bleed the league and its owners for every penny they refused to pay out because, structurally, they were put at an advantage where they could exploit, exploit, exploit—but the fact that it is a possibility makes it seemingly unlikely that it would happen. As Grow explained in that same piece, retroactive liability wouldn’t be an issue if Congress removes the antitrust exemption instead of SCOTUS, and Congress does, indeed, have the power to remove it on their own. However, they have shown no real interest in doing so, either in the past or the present—the best time to truly threaten MLB’s antitrust exemption, and Representative Lori Trahan even hinted that this threat was on the table back in late-2019, was when the whole disaffiliation drama began. Before Trahan and Congress could get truly serious about putting a stop to what MLB was doing, however, coronavirus hit, the government’s attention was diverted, and MLB just went about doing whatever they felt like with no one in their way to stop them. 

Congress could, of course, get the task force that Trahan and others formed back together, converting it from its initial goal of saving minor league baseball and refocusing it on punishing MLB for so blatantly acting beyond the initial scope of the antitrust exemption by muscling their way past whatever defenses MiLB was supposed to have against a corporate takeover and disaffiliating dozens of clubs. Congress has the power to remove the antitrust exemption, and could use it without any of the trouble that SCOTUS has to go through, and without even needing to be inspired by a slew of antitrust lawsuits. You have to imagine, though, that this is low on the list of Congress’ priorities at the moment, especially since the thing they could rally around, the thing that might get voters’ attention, has already happened. (I could have also said, “because the pandemic is ongoing,” but that would require Congress acknowledging that it is, in fact, ongoing, so I chose a different kind of honesty instead.)

It is worth noting that the Supreme Court has recently gone after the NCAA and their precious student-athlete distinction in a way that was not necessarily considered possible, and the door is open for further dismantling of that exploitative system. So maybe precedent will mean less than it used to with regards to MLB’s antitrust exemption, even if the Supreme Court’s involvement would be akin to opening up Pandora’s box, or cans of worms, or cans of whoops ass, take your pick of contextually appropriate idiom there. That being said, though, the NCAA does not have an antitrust exemption: MLB does, and therefore, they have more leeway to run their business in a way that would violate antitrust law than the NCAA does. And the NCAA has gotten plenty of leeway for a long time even without an exemption to back them up, so you can imagine how protected MLB must feel. Supreme Court Justices can mention MLB in their NCAA write-up, but in the end, this is the truth of things unless a notably conservative court is suddenly and surprisingly going to go to bat [sports term] for someone other than a major corporation in a more meaningful way than just some lip service.

That the suit might fail is no reason to avoid filing it, though. It is entirely possible that, at some point, Congress reacts to the string of challenges to the antitrust exemption that SCOTUS seemingly wants to overturn but will not due to retroactivity concerns, and takes it upon themselves to remove it in the least harmful or confusing way possible. That, of course, would require Congress to take action in a way no one should have real faith in them to do, which is why so much hope rests on these antitrust suits in the first place, but still. The offseason is a time for dreaming about better baseball to come, even when that offseason is mired in a lockout designed to keep you from much dreaming at all.

Marc Normandin currently writes on baseball’s labor issues and more at marcnormandin.com, which you can read for free but support through his Patreon. His baseball writing has appeared at SB Nation, Defector, Deadspin, Sports Illustrated, ESPN, Sports on Earth, The Guardian, The Nation, and TalkPoverty, and you can read his takes on retro video games at Retro XP.