MLB Gets Late-Inning Relief With Oakland A’s Lease Deal

Major League Baseball’s odds of blocking the Oakland Athletics proposed move to San Jose may have improved thanks to the team’s new 10-year lease, a deal that may render a court battle irrelevant.

City officials in San Jose, California, are still seeking to overturn a court decision in favor of retiring baseball Commissioner Bud Selig. A federal judge held that Selig didn’t violate antitrust laws in barring the move by the A’s, which have the best record in the majors this season.

Today’s argument before the U.S. Court of Appeals in San Francisco followed the team’s announcement last month that it agreed to a 10-year extension through the 2024 season at Coliseum.

Joe Cotchett, a lawyer for San Jose, told the three-judge panel hearing the appeal that according to Major League Baseball’s rules and previous court decisions, especially one concerning a team in Portland, Oregon, the antitrust exemption applies only to the minor, or reserve, leagues -- and not the relocation of a major league team.

Judge Richard R. Clifton, nominated by Republican President George W. Bush, disagreed with Cotchett’s argument.

The “reserve clause” referred to a contract provision for players on “reserve teams that required them to stick with that team into the future,” Clifton said. “What does that have to do with Portland baseball?” the judge asked, referring to the previous court decision. “You’re trying to tell me that Portland baseball is about the reserve clause, I don’t see it.”

Staying Put

A’s owner Lew Wolff said in a phone interview yesterday that the team hired an architect to possibly build a new stadium in Oakland. While the lease permits the team to leave the Coliseum with two years’ notice, Wolff said the A’s will probably stay in Oakland for at least the next four.

The case arose out of San Jose’s claim that MLB has thwarted the rights of baseball clubs and cities to negotiate relocations and stadium deals. According to San Jose’s complaint, the city sought Selig’s blessing to relocate the A’s in 2010. In a court filing, San Jose directly attacked the antitrust exemption as a “product of a bygone era,” and argued the appeals court should let the case go forward.

‘Little Sense’

In October, U.S. District Judge Ronald M. Whyte in San Jose, granted dismissal of the antitrust claim, concluding he was bound by a legal “aberration” that exempts the MLB from federal law in that area. The exemption has been in place since 1922, when Supreme Court Justice Oliver Wendell Holmes issued a three-page opinion that the clubs weren’t subject to federal antitrust laws because they weren’t engaged in interstate commerce.

While Whyte said the law makes “little sense” given the “heavily interstate nature” of the business today, he deferred to precedent set by the high court.

John Keker, a lawyer for MLB, said five of the six Supreme Court cases that apply to the case uphold baseball’s antitrust exemption.

“What the Supreme Court has said is, if anyone is going to change this, it’s Congress,” he told the court.

Michael Carrier, a professor at Rutgers School of Law in Camden, New Jersey, and Stanford Law School Professor Mark Lemley agree that another Supreme Court ruling or legislation by Congress would be required to change the exemption.

Giants’ Turf

Lemley said he thought the appeal might lead to San Jose winning money, even if it loses its bid to relocate the A’s 35 miles (56 kilometers) to the south, in an area designated by the MLB as territory of the San Francisco Giants. Carrier said any damages claims would probably be decided along with San Jose’s antitrust claims.

If its antitrust appeal is rejected, the city may still win state claims based on interference with its contract and economic advantage that Whyte allowed to go forward. If San Jose wins its appeal, the A’s may still decide to stay in Oakland, leaving San Jose to pursue damages for interfering with its attempt to attract the team to San Jose, Lemley said.

“If it seems the As are staying in Oakland, the appeal may end up being more about money than where they will play baseball,” Lemley said.

Philip Gregory, another lawyer for San Jose, said in an interview that the A’s lease is a “placeholder” until the MLB is ordered to let the team move.

State-of-the-Art Stadium

“The A’s don’t want to be in the Oakland Coliseum, they want to be in a state-of-the-art stadium in San Jose,” Gregory said. “The only reason the A’s are extending this lease is because baseball won’t let them go to San Jose.”

Wolff disputed that assertion.

“Our intent is to re-evaluate our location only at the Coliseum in Oakland, and do the same thing if we’re able to look at San Jose,” Wolff said. “Frankly, we’d like to keep both options open. We’re going to do both as we’re able to do. For now we’re not going to focus on San Jose because it’s subject to a lawsuit.”

The case is San Jose v. the Office of the Commissioner of Baseball, 14-15139, U.S. Court of Appeals for the Ninth Circuit (San Francisco). The lower court case is City of San Jose v. Office of the Commissioner of Baseball, 13-cv-02787, U.S. District Court, Northern District of California (San Jose).

Before it's here, it's on the Bloomberg Terminal.