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DOJ Wants Court To Limit Scope Of MLB Antitrust Exemption

 |  June 16, 2022

The Department of Justice waded into the controversy over Major League Baseball’s century-old antitrust exemption Wednesday, telling a federal court the exemption should be narrowly interpreted to just the business of staging games.

The New York federal court is presiding over the early stages of an antitrust lawsuit against MLB that was brought by four minor league teams that were squeezed out of MLB when baseball contracted 40 teams in 2020. Their case states that under the antitrust exemption, the lawsuit should be dismissed. Their plan is to keep appealing all the way to the Supreme Court, which in its decision against the NCAA last year referred to the baseball exemption as “aberrational.”

However, the DOJ filing raises another prospect: that the exemption stands, but the court rules that what MLB did with the minor league clubs falls outside of the exemption’s scope, and is subject to antitrust laws. The 18-page filing, which lists assistant attorney general Jonathan Kanter at the end among other officials, pointedly does not take a position on what the district court should do.

Read More: Towards an Economic Theory of Amateurism: The NCAA, Antitrust, and the Student-Athlete

Instead, the DOJ lays out an argument for the exemption having only a very narrow sway.

“In that light lower courts should not extend the ‘baseball exemption’ beyond the scope recognized by the Supreme Court… which limited the exemption to conduct that is central to the actual exhibition of professional baseball games,” the DOJ wrote. “Thus, while the exemption may cover ‘antitrust challenges to (Major League Baseball’s) league structure and its reserve system,’ it would not cover conduct beyond the scope of the offering of exhibitions of professional baseball.”

The document produced by the DOJ does not comment on whether the restructuring of minor league baseball fell outside of the exemption. However, Advocates for minor leaguers have been interpreting the DOJ’s decision to get involved as the death knell for the exemption.

“It is momentous that the Justice Department today declared that baseball’s antitrust exemption ‘does not rest on any substantive policy interests that justify players . . . losing out on the benefits of competition,’ ” said Harry Marino, executive director of MiLB Advocates. “This means the United States government sees no substantive reason why Major League Baseball teams should be permitted to collude and pay Minor League players poverty wages, as they have for decades.”

The exemption has long been an anomaly. Even in upholding the exemption in a 1972 case brought by player Curt Flood to undo the reserve system that had forever tied players to teams, the Supreme Court ruled, “(p)professional baseball is a business and it is engaged in interstate commerce.”

Earlier this year Sen. Bernie Sanders (I-VT) announced a bill to overturn the exemption, citing the minor league restructuring. It joins a similar version that is pending from last year introduced by Sen. Mike Lee (R-Utah) and Rep. Jeff Duncan (R-SC).

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