When news broke of the San Jose lawsuit over the Oakland A’s situation, I immediately reached out to Stanford economist Roger Noll, who has been observing and testifying on baseball legal matters since the suit over the Seattle Pilots‘ move to Milwaukee. We were finally able to have an email exchange last night, and in his view, San Jose’s chances are a fair bit better than what I presented yesterday:
- San Jose does potentially have standing to sue here, thanks to the $50,000 option that A’s owner Lew Wolff paid the city for the stadium site. In any case, says Noll, “The issue is not really standing, but whether the business interest of a plaintiff is speculative (based on business that was not and may never be done). Surely this will be part of a motion to dismiss, but the existence of an agreement and detailed stadium plans strengthens San Jose’s case.”
- A quick dismissal on antitrust exemption grounds is unlikely, given that a case like this has never been litigated before, and “standard legal doctrine is that antitrust exemptions are read narrowly, applying only to issues that are litigated in that case.”
- This is more than a federal antitrust case: There are also tortious interference claims, as well as state antitrust claims. It’s the latter where it gets really interesting: Since the A’s move would be an intrastate one from Oakland to San Jose, “the basis for the complaint avoids the [Supreme Court's] Federal League ruling [in 1922] that MLB was not engaged in interstate commerce.”
- While I (and others) have been quick to note that leagues can do whatever they want with their franchises, just as McDonald’s can, a court may still require them to show an actual business reason for doing so, to prove that they’re not being capricious. “The interesting point here is that the amount of competition in the metro area will stay the same (two teams), although one (the A’s) would be a stronger, more effective competitor if located in a bigger, wealthier city within the area,” says Noll. “MLB will have a hard time making the case that the interest of the league is served by preventing the A’s from moving further away to a better location, which must be the rule-of-reason business justification that will come into play if the court decides that blocking the move caused harm to competition.”
So I’m going back to my initial reaction: Nobody knows what the hell is going to happen now, except that there’s going to be one hell of a knock-down legal battle that could end up going all the way to the Supreme Court. Or could end up with a negotiated settlement, or could just get dismissed. We’re in uncharted territory here — which, for advocates of the A’s moving to San Jose, is at least better than the all-too-charted territory that they were in before.