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Department Of Justice Questions MLB Antitrust Exemption

 |  January 31, 2023

The US Department of Justice, for the second time in less than a year, asserted its concerns over Major League Baseball’s antitrust exemption in a lawsuit brought by four minor league teams that lost their major league affiliation in the 2020 reorganization of minor league baseball.

While not outright calling for the court to end the exemption — the Second Circuit Court of Appeals, which is currently hearing the case, does not have the authority to end the exemption — the department laid out multiple cases that criticized and questioned the decision to maintain baseball’s antitrust exemption in a brief filed Monday.

“In contrast to other antitrust exemptions, the Federal Baseball exemption was not created to reconcile competing legal authorities or substantive policy goals,” DOJ lawyers said in their brief.

Read more: DOJ Wants Court To Limit Scope Of MLB Antitrust Exemption

The case was filed in 2021 in Manhattan federal court by several minor league clubs that lost their affiliation with big league teams, including the Houston Astros, after MLB crafted a new professional development league.

Attorneys for the minor league clubs are seeking to revive their lawsuit that alleged pro baseball abused its power in the reshuffling. Lawyers for the minor league teams have called the MLB exemption a “get-out-of-antitrust-jail-free card.”

An attorney for the minor league clubs at Weil, Gotshal & Manges on Tuesday did not immediately respond to a message seeking comment. The clubs have asked the 2nd Circuit to lend its voice in urging the U.S. Supreme Court to end the exemption.

The Supreme Court in 2015 rejected a challenge to the MLB antitrust exemption in a dispute over San Jose’s interest in becoming the home of the Oakland Athletics.

The DOJ’s filing said professional sports and antitrust laws have coexisted in various ways over the years. The DOJ pointed to a 2010 Supreme Court case that said sports “teams that need to cooperate are not trapped by antitrust law.”

“Simply put, the application of antitrust law to professional sports has proven workable,” DOJ lawyer Matthew Mandelberg told 2nd Circuit.