MLB to San Jose on A’s: You can’t sue us, nyah nyah nyah

MLB has struck back against the city of San Jose’s antitrust lawsuit against the league’s refusal to grant the Oakland A’s permission to move there, filing a motion to dismiss the city’s claims. MLB is both claiming that its antitrust exemption makes it immune to such an action — which is exactly what the San Jose case is challenging, duh — but also argues that San Jose doesn’t have standing to sue in this case:

“The alleged harms are too remote and speculative to support an antitrust claim,” wrote San Francisco attorney John Keker, who is leading the league’s defense. “If (San Jose’s claims were supported), it would lead to absurd results: every time a franchise contemplated relocation, MLB would be subjected to suits from any city that desires a team and from any city that does not want to lose a team.”

That’s the Craig Calcaterra argument: San Jose can’t sue over MLB refusing to let Lew Wolff move the A’s to San Jose, because Wolff hasn’t actually asked to move to San Jose, so letting them sue would be like letting Stockton or Fresno sue because they don’t have teams. San Jose’s counter, which is Roger Noll’s argument, is that because they have an option agreement to build an A’s stadium, they damn well do have business interests that are being harmed by MLB’s territorial-rights system.

If you read what Noll told me two months ago, you’ll see that yesterday’s filing is right in line with what he expected: waving the antitrust exemption (which is unlikely to be grounds for quick dismissal) and an attempt to claim that San Jose lacks standing. Noll also predicted that neither of these would be enough to prevent the case from going to trial; we’ll see when U.S. District Judge Ronald Whyte hears the case in October.

10 comments on “MLB to San Jose on A’s: You can’t sue us, nyah nyah nyah

  1. “The alleged harms are too remote and speculative”…

    Alright! Was that MLB’s lawyer asserting in a court filing that not having a major league team in your city does you no significant damage whatsoever? I hope cities save that quote for the next time a stadium demand arises…

    Noll’s argument, it seems to me, amounts to a restraint of trade one. It’s pretty shaky ground IMO.

    The type of option the city appears to have with Wolff is hardly binding. In fact, MLB will likely claim that the option isn’t worth the paper it’s written on, because (once again, with feeling) Lew Wolff doesn’t own the San Jose MLB franchise.

    Put another way, you can sign an option with a third party to move into a vacant house on your block. Does that mean you can move into it?

  2. I think Noll’s point was that the option would be enough to avoid getting the case dismissed, not that it’d necessarily be enough to win on. But getting to trial is all San Jose really has to do here, because MLB is going to be scared crapless of discovery.

    The October hearing is going to be very, very important, in other words.

  3. “In fact, MLB will likely claim that the option isn’t worth the paper it’s written on, because (once again, with feeling) Lew Wolff doesn’t own the San Jose MLB franchise.”

    Kinda hard to rely upon an “option” that Wolff wasn’t allowed to enter into in the first place. Seems like the kind of first-level check for “standing” that could get a quick dismissal.

  4. League (speaking out of the right side): Sports stadiums are great for economic development and revitalizing areas of your town. A worthy investment for your city.

    League (speaking out of the left side): No, our sports stadium not coming to your town in no way harms your city (which has already spent money planning this thing). Any damage or losses are entirely speculative so there.

  5. I don’t get that LW hasn’t asked to move to SJ- he has which is why MLB has been “studying” the issue for 4 years. Note that there is a stadium design already complete and MLB has been very active in reviewing that with the city of SJ. In fact MLB made a specific request to increase the size of the ballpark from 32k originally proposed by Wolff to 36k.

  6. MLB is way off on their arguments for a few reasons:

    1. San Jose has standing because they have an agreement with the A’s to move the team, they have a completed EIR, they have a plot of land designated and they have renderings of this ballpark ready to go, you can even use other cities like SF and San Diego to prove economic impact via sales tax revenue, property tax revenue projections from the stadium and businesses around the ballpark. These are not fiction but based on fact from other cities who are similar in size and location. The injury would only be “speculative” if there was nothing to compare it to. Not the case here…

    2. The A’s in fact have requested a move to San Jose with MLB. They requested a territorial rights change to the other owners. Selig responded by assigning his BRC who is yet to issue a report in 4+ years….Shows MLB is clearly acting like an “illegal cartel” by not issuing a report or acting in a timely manner. Instead they delay because they have “their own reasons”….Those “reasons” would have to be shown in court….Not good for MLB.

    3. MLB is citing their AE as why this case should be thrown out. Not a good argument considering most business law was not even created in 1922 when the AE was granted. We are 90 years into the future and the other leagues have failed miserably in situations like this, most notably the Raiders vs. NFL and American Needle vs. NFL as prime examples.

    Most importantly, the courts will hear the case because they do not want to set a precedent with the other leagues. If San Jose loses, it would allow for other leagues to assign t-rights to each franchise. It would allow for professional leagues to have more illegal cartel like power which the courts want to reduce not empower.

    San Jose has to win for the greater good of American Business and to limit the power sports leagues have.

  7. Also MLB cannot argue the Giants rights to San Jose which is anti competitive in nature. They cannot state the affect the A’s moving to San Jose would have on the Giants as that would be illegal cartel behavior.

    That is the basis of point #2 above about the BRC delaying.

  8. “If San Jose loses, it would allow for other leagues to assign t-rights to each franchise.”

    You mean like they already do? And like every other business that uses the franchise model?

    Sorry, I’m just not seeing how the future of “American Business” is in jeopardy if the owner of the A’s isn’t given something he didn’t pay for.

  9. SBSJ: I agree it would be great for fans if the artificial scarcity of major league franchises (in all sports) was quashed.

    However, I see nothing in this case that can do that. Neil’s (and others) point that SJ doesn’t have to win, just get MLB fearful that it might actually end up in court and have to answer some uncomfortable questions on cross is a very good one. However, unless SJ thinks they can get MLB to capitulate rather than fight this battle (which I doubt, it’s very much a catch 22 for MLB – they can’t win by not fighting), I don’t see how SJ win anything (other than perhaps the hatred of MLB owners in perpetuity).

    What is San Jose’s argument?

    1. We are losing possible earnings because we don’t have an MLB team.

    True. But you don’t have an MLB team, just like lots of other cities. I bet you would earn more money if you hosted the Louvre as well. Are you filing a suit against Paris as well?

    2. We have spent a great deal of money preparing for an MLB team.

    Perhaps. But MLB certainly didn’t ask or tell you to. In fact, we made it clear to you that there were major obstacles to locating an MLB team in your city.

    3. MLB is unfairly and unreasonably restricting our trade.

    Nope. MLB takes no position on whether San Jose should have baseball and has taken no action to prevent San Jose from hosting any non-MLB team. No-one has the inherent right to host an MLB team, much less take a team from another city by force. We create and locate our franchises according to our own rules and processes. At present, we are not looking to expand nor to relocate any existing franchises. If we do look at adding or moving franchises at some point in future, we will certainly give San Jose every consideration at that time.

    I was very hopeful when I learned that San Jose had filed suit against MLB. It is a big step, but if they made their case well it was possible they would at least get a concession (probably to future expansion) from MLB. When I read the first few pages of their filing, I was actually angry at how weakly made their arguments were. It reads like a nuisance suit, IMO. And that’s not good for San Jose, or for any other city who thinks it might be able to force it’s way in to any sports league.

    It would be better for all parties (except the leagues themselves) if there were clear and fixed rules for entry and no limit on the number of franchises available. But sports businesses are not a democracy and life just doesn’t work that way…

  10. Territorial “rights” in major league baseball go back as far as 100 years ago when New York had three baseball teams. So this isn’t really anything new except that MLB is very protective of it’s history and traditions.

    The idea of San Jose suing MLB (and the A’s) seems like a waste of time and money. MLB appears to see Oakland, with it’s incredibly rich baseball heritage, as a more appealing location than San Jose. If there is/was an “agreement” with the Giants that San Jose is off-limits, it should be honored.