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Archive for Thursday, May 29, 2003

Owners affirmed in appeals ruling

Florida AG denied inquiry

May 29, 2003

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— A federal appeals court upheld a ruling barring the Florida attorney general from investigating baseball owners' attempt to eliminate two teams.

The U.S. 11th Circuit Court of Appeals, in an opinion released Tuesday, affirmed the decision made in December 2001 by U.S. District Judge Robert L. Hinkle, who said the 1922 U.S. Supreme Court decision exempting baseball from federal antitrust laws extended to state laws as well.

The appellate court said its decision was based on the Fourth Amendment to the U.S. Constitution and state law, rather than the sport's antitrust exemption.

"For better or worse, professional baseball has long enjoyed an exemption from antitrust laws," the appellate court wrote. "Contraction is a matter that falls within the 'business of baseball' and therefore cannot be the subject of a prosecution based upon federal antitrust law. When the business-of-baseball exemption is triggered, baseball clubs are equally immune from prosecution under state antitrust law."

Baseball's lawyers were particularly pleased the appellate court questioned a 1994 Florida Supreme Court decision, which ruled the antitrust exemption applied only to the reserve system.

"The Florida Supreme Court's holding has scant support in the case law," the appeals court wrote.

"The vast majority of lower courts have held that the exemption created by the U.S. Supreme Court extends more broadly to the 'business of baseball.' "

The commissioner's office considered the decision a major victory.

"This is one of the strongest rulings since the Flood case in what is a very long line of decisions supporting a broad interpretation of baseball's antitrust exemption," said Tom Ostertag, baseball's general counsel.

Baseball owners voted 28-2 on Nov. 6, 2001, to eliminate two teams, and management lawyers later told the players' association the targeted clubs were the Montreal Expos and Minnesota Twins.

The plan stalled when Minnesota courts ruled the Twins had to honor their 2002 lease for the Metrodome, and in the labor contract agreed to last August, owners promised not to eliminate teams through the 2006 season.

Then-Attorney General Bob Butterworth had issued subpoenas to major league officials, the Florida Marlins and Tampa Bay Devil Rays seeking information on whether the Florida clubs, who both have drawn poorly in recent years, were involved in contraction plans.

The 11th circuit decision was by Judges Gerald B. Tjoflat, Susan H. Black and Richard W. Goldberg.

The U.S. Supreme Court ruled in 1922 that baseball was not interstate commerce and upheld it in a 1953 case involving New York Yankees farmhand George Toolson and in the 1972 Curt Flood decision.

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