Four former MiLB teams challenge MLB’s antitrust exemption in U.S. District Court

Four teams–the Staten Island Yankees, Tri-City ValleyCats, Salem-Keizer Volcanoes and Norwich Sea Unicorns–have filed a civil complaint in U.S. District Court, challenging MLB’s antitrust exemption.

Three of the teams were in the Short-Season NY-Penn League, with the Volcanoes part of the Northwest League when it was a Short-Season league as well. All four were not invited to be part of the new Minor League Baseball when MiLB was trimmed down to 120 teams. Since then the SI Yanks folded, the ValleyCats joined the professional Frontier League, the Sea Unicorns joined the summer-collegiate Futures League and the Volcanoes launched a four-team independent league.

The civil complaint, filed by David Lender (of Weil, Gotshal & Manges LLP) and Jim Quinn (Berg & Androphy, formerly of Weil) in U.S. District Court in the Southern District of New York, argues that MLB overstepped its bounds in eliminating affiliations with 40 MiLB teams, deeming it a “unlawful group boycott” and acting in an uncompetitive fashion: “The Takeover Plan is nothing more than a naked, horizontal agreement to cement MLB’s dominance over all professional baseball and to reduce output and boycott the 40 Ousted Teams from MLB affiliation.”

The core of the complaint is banking on a belief that the U.S. Supreme Court is ready to overturn MLB’s antitrust exemption based on a previous antitrust-related decision involving the NCAA. The complaint also argues that MLB should not have unilaterally decided what teams were part of the new 120, but allowed the free market to let teams bid on remaining in MiLB. It also singles out teams owned by MLB teams and MILB teams with a significant MLB investment.

The relief sought by the four plaintiffs: striking down the 120-team MiLB system and allow each MLB team to negotiate its own affiliate deals, while also paying damages to the four teams.