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First Circuit Hears Arguments on Whether Federal Baseball Antitrust Exemption Shields Puerto Rican League from Legal Claims

By  |  October 31, 2024

On Thursday, the U.S. First Circuit Court of Appeals examined arguments from plaintiffs challenging the application of the federal baseball antitrust exemption in a case against Puerto Rico’s top baseball league. Plaintiffs argue that the exemption should not protect the Liga de Béisbol Profesional de Puerto Rico Inc. (LBPPR) and its affiliate teams from antitrust allegations, per Bloomberg.

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    The case originated last year when plaintiff Tom Axon, a businessman, filed a federal antitrust lawsuit alleging that the LBPPR and its associated teams unfairly prevented him from participating in the Puerto Rican baseball market. Axon claims that these organizations orchestrated a boycott, blocking him from the business of owning or investing in professional baseball teams within Puerto Rico. In an earlier ruling, a district court dismissed Axon’s antitrust claims, citing the longstanding baseball exemption.

    Axon’s legal team now urges the First Circuit to overturn that district court decision, arguing that the exemption—dating back nearly a century—was never intended to cover Puerto Rican professional leagues. According to Bloomberg, they contend that the exemption is antiquated and overly broad, and that it harms fair competition by allowing certain organizations to monopolize access to local baseball markets.

    The exemption, which has historically shielded U.S. professional baseball leagues from federal antitrust laws, has faced mounting scrutiny over recent years as critics argue it limits competition and suppresses market entry by other investors. Axon’s attorneys emphasized in court that the unique market dynamics in Puerto Rico warrant a different interpretation of the exemption, one that would allow for more inclusive competition within the island’s professional baseball industry.

    The LBPPR’s defense argues that the antitrust exemption has been repeatedly upheld by the courts, which have consistently recognized baseball’s distinct position under federal law. They maintain that, as a professional league closely tied to the U.S. baseball system, the LBPPR should continue to receive these protections, per Bloomberg.

    The First Circuit panel will deliberate on the arguments, with potential implications for how antitrust laws might apply to professional sports leagues operating in U.S. territories. A ruling against the exemption could open the door for future antitrust claims within Puerto Rico’s professional sports market, potentially reshaping its landscape.

    Source: Bloomberg