San Jose Hits MLB With New Suit Over Barred A's Relocation

March 12, 2014
Law360

The city of San Jose, Calif., hitMajor League Baseball with a lawsuit in Los Angeles court on Monday, alleging MLB interfered with a contract that would allow the Oakland Athletics to move to San Jose and cost the city millions of dollars.

San Jose officials first sued the MLB in federal court last June, claiming the organization harmed the city by stalling the owners' vote on moving the Athletics to their city and challenging baseball's exemption to federal antitrust laws. U.S. District Judge Ronald M. Whyte tossed the antitrust and unfair competition claims from the suit in October, allowing San Jose to appeal, and later dismissed the contract and other claims without prejudice, according to a source close to the matter.

In the new suit, filed in Los Angeles Superior Court on Monday, San Jose says the MLB interfered with the exercise of an option agreement between the city and the Athletics by refusing to permit the move.

“Through MLB’s exercise of the exclusionary provisions in the MLB Constitution, members of MLB interfered with plaintiffs’ option agreement with the Athletics Baseball Club in violation of the laws of the state of California by refusing to allow the Athletics Baseball Club to relocate to San Jose,” the complaint says. “Were it not for defendants’ wrongful scheme to block relocation of the Oakland Athletics Club to San Jose, plaintiffs’ economic relationship with the Oakland Athletics Club would have continued forward for the duration of the option agreement and for the foreseeable future.”

Monday’s contract suit is the most recent development in the ongoing battle over the legality of MLB’s decision to block the Athletics’ bid to move to San Jose, coming just one week after the city urged the Ninth Circuit to reassess the validity and scope of the MLB’s longstanding exemption from antitrust laws.

The new lawsuit, which alleges interference with prospective economic advantage and interference with contractual advantage, follows the city’s opening brief before the Ninth Circuit. San Jose told the appeals court on March 5 that the exemption created by theU.S. Supreme Court in the so-called Federal Baseball Club case ranks among the most dubious and should not have vanquished the suit over the A's relocation to San Jose.

To the extent that MLB's exemption is even legally appropriate anymore, San Jose stressed that it was meant to apply only to baseball's labor rules restricting the movement of players from team to team, not to a team's efforts to move to a new city, according to court documents.

In the Ninth Circuit appeal, the city is challenging Judge Whyte’s October decision that tossed the bulk of its antitrust suit against MLB with prejudice. Even in dismissing the antitrust claims, Whyte said that he shared concerns about the validity of the exemption, but was nonetheless bound by the high court's decades-old precedent.

The city's original complaint alleged that San Jose has lost millions of dollars because of the actions — or lack thereof — of MLB and its commissioner, Bud Selig. The suit argued that MLB is stalling the A's move from Oakland to San Jose because the move would put the team in territory allocated to the San Francisco Giants

Philip L. Gregory of Cotchett Pitre & McCarthy LLP, counsel to the city, said they look forward to litigating the claims in Los Angeles.

“We are looking forward to having this case promptly resolved in Los Angeles and allowing baseball to find its way to San Jose,” Gregory told Law360 on Wednesday... (To read the entire article, please click HERE)