Department of Justice Asks Court to 'Narrowly' Define Baseball's Antitrust Exemption

Timothy Rapp@@TRappaRTFeatured Columnist IVJune 16, 2022

UKRAINE - 2021/08/30: In this photo illustration a Major League Baseball (MLB) logo is seen on a smartphone screen. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)
Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

The Department of Justice requested that the U.S. District Court in New York define professional baseball's antitrust exemption "narrowly," according to Bill Shaikin of the Los Angeles Times.

Sen. Bernie Sanders (I-Vt.) introduced legislation in March to strip baseball of the exemption entirely, while Sen. Mike Lee (R-Utah) and Rep. Jeff Duncan (R-S.C.) introduced a separate bill last year that is still being considered.

The DOJ made the request on behalf of three former minor league teams suing Major League Baseball after the league stripped them of their MLB affiliation. Over 40 minor league teams suffered that fate in the league's plan to downsize its farm teams to 120 overall.

The National Association of Professional Baseball Leagues was also shut down, with MLB taking over as the controlling entity of the minor leagues.

"The takeover plan is nothing less than a naked, horizontal agreement to cement MLB's dominance over all professional baseball," the former teams' lawsuit read. "There is no plausible procompetitive justification for this anticompetitive agreement."

Though the former teams cite a violation of the Sherman Antitrust Act, the league has responded by asking the court to throw out the lawsuit based, in part, on the antitrust exemption baseball was first granted in 1922 by the U.S. Supreme Court, which said that baseball wasn't subject to antitrust rules because it was a series of exhibitions rather than a form of interstate commerce.

The Supreme Court has twice upheld that decision in cases that followed, both in 1953 and 1972.

No other professional sport in the United States has been granted a similar exception law.

Per Shaikin, "the Justice Department asked the district court to define the exemption as limited to the original purpose set forth in 1922: 'Exhibitions of base ball.' The Justice Department cited cases involving restraints on game broadcasts and trading card suppliers."