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Yer Out (For Now): MLB Dismissed From Antitrust Lawsuit Because Of Historic Antitrust Exemption

 |  December 2, 2022

By: Julian Perlman (Antitrust Advocate)

In a decision that stunned no one (yet will garner plenty of headlines), a federal district court granted a motion to dismiss filed by Major League Baseball (MLB) on the basis of its storied antitrust immunity. Coming almost on the eve of the World Series, this decision (now under appeal) will surely keep the MLB’s antitrust exemption, unique for a sports league, front and center as Congress investigates its effects and considers legislation to eliminate it.

In a decision from Southern District of New York Judge Andrew Carter, the court noted it was constrained to apply U.S. Supreme Court and Second Circuit precedent creating and refining professional baseball’s exemption from U.S. competition laws. The case, Nostalgic Partners, LLC et al. v. The Office of the Commissioner of Baseball, involves claims by four minor league baseball clubs that allege that defendant MLB violated Section 1 of the Sherman Act by orchestrating a horizontal agreement through which 40 minor league teams had their relationships with former MLB teams severed. Plaintiffs’ claims arise out of the 2020 expiration of the Professional Baseball Agreement (PBA), which was replaced by an agreement to form the Professional Development League (PDL), which reduced the number of permitted minor league affiliates for each MLB club from six to four.

While ultimately finding that the antitrust exemption shielded MLB from antitrust suits of this nature, the court noted that plaintiffs had otherwise adequately established antitrust standing and pleaded an antitrust violation…