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Justices Won't Take Up MLB Antitrust Exemption Challenges

The U.S. Supreme Court on Monday said it will not hear a wage suppression case brought by scouts against Major League Baseball or litigation over a contract dispute between Wrigley Field-area rooftop owners and the Chicago Cubs, deciding not to review the league's oft-criticized antitrust exemption.

Both certiorari petitions were among more than 100 denied by the justices in a set of orders released on Monday. Although dealing with dissimilar subject matter, the scouts and the rooftop businesses both sought to challenge the long-standing holding that Major League Baseball, or MLB, and its teams are exempt from antitrust law, which the league and the Cubs relied on to escape their respective claims.
The court noted that Chief Justice John Roberts did not take part in the cert denial for the scouts' case.
The scouts, led by Kansas City Royals scout Jordan Wyckoff and former Colorado Rockies scout Darwin Cox, argued that given nationwide confusion over the exemption, its application and how far it reaches, the justices must take up the case.
Wyckoff filed his proposed class action in 2015, alleging that MLB conspired to prevent baseball scouts from moving between teams and misclassified them as overtime exempt. After U.S. District Judge Paul G. Gardephe tossed federal and state antitrust claims from the suit in September 2016, the scouts in January 2017 urged the Second Circuit to reverse the decision and find that the exemption does not apply to scouts.
But the Second Circuit sided with MLB in August, upholding the exemption as applied against them under the 1922 Supreme Court precedent that established the antitrust exemption and under the 1998 Curt Flood Act, which created a carve-out for some of the exemptions pertaining to the contracts of major league players.
In their certiorari petition, the scouts cited the recent flurry of other petitions to the high court in cases centering on the validity of the antitrust exemption, as well as baseball team owners' wide application of the exemption. That included an ultimately unsuccessful cert bid by minor league players — who are not covered under the Curt Flood Act — challenging the constitutionality of the act as part of a wage suppression lawsuit.
The scouts also urged the court to link their case to the case by the rooftop businesses, which accused the Chicago Cubs of breaching a contract to prevent obstruction of stadium sight lines.
The rooftop businesses asked the Supreme Court to review the Seventh Circuit's finding that the Cubs and team owner Thomas S. Ricketts were protected from monopoly claims under the exemption. The lawsuit stemmed from the Cubs' decision to make upgrades to Wrigley Field, including a new video board, that allegedly blocked views into the stadium offered by the four companies collectively known as "the Rooftops."
A three-judge appellate panel in September rejected the Rooftops' contention that the claims fell outside the antitrust exemption since they did not concern the "rules and restrictions related to baseball itself." The judges said the team's actions related to the rooftop seats — including an attempt to set minimum prices for the seats and threats to block their views if the owners did not sell the rooftop spaces to the Cubs — were within the scope of the business of baseball.
A month later, in a one-page decision, the appeals court denied a bid by the Rooftops to have the case reheard en banc, setting the stage for the owners’ certiorari petition at the Supreme Court.
James R. Figliulo of Figliulo & Silverman PC, counsel for the Rooftops, told Law360 on Monday that the now-upheld Seventh Circuit decision is "indefensible and ridiculous" as it expands the antitrust exemption beyond "the business of baseball" and into other areas, including the business conducted by the rooftop seating owners.
"The exception for the business of baseball protects only billionaire owners of professional baseball teams," Figliulo said. "It is long overdue that the owners be bound by the antitrust laws just like everyone else, including owners of other professional sports."
The Cubs in a statement on Monday said the team is "thrilled" with the decision.
"While it is unfortunate we have to defend challenges like this from those who have benefitted from Cubs baseball, we will continue to do so and will always put the history, tradition and the future of the team and our fans first," the Cubs said.
Counsel for the scouts and MLB did not immediately respond to requests for comment on Monday.
In the Wyckoff case, the scouts are represented by Robert King and Garrett Broshuis of Korein Tillery LLC.
The Office of the Commissioner of Baseball and the 30 MLB teams are represented by Elliot R. Peters, John W. Keker, R. Adam Lauridsen and Thomas E. Gorman of Keker Van Nest & Peters LLP.
In the Rooftops case, the Rooftops are represented by James R. Figliulo and Stephanie D. Jones of Figliulo & Silverman PC.
The Cubs are represented by Andrew A. Kassof, Daniel Laytin, Daniel I. Siegfried, Paul D. Clement and Erin E. Murphy of Kirkland & Ellis LLP
The cases are Jordan Wyckoff et al., Petitioners v. Office of the Commissioner of Baseball, dba Major League Baseball, case number 17-1079, and Right Field Rooftops LLC et al. v. Chicago Cubs Baseball Club LLC et al., case number 17-1074, both in the U.S. Supreme Court.