Federal Court Hearing In San Jose vs. MLB Could Move Process Forward

The federal judge overseeing the antitrust lawsuit by the City of San Jose against Major League Baseball held a case management conference Friday morning. But the hearing dealt with weightier issues as compared to the usual case management conference. Most particularly, the court is deciding whether to dismiss the two remaining state law claims for interference with contract and allow those claims to be re-filed in state court. If so, the court would enter final judgment in the federal case, and San Jose would have the right to immediately appeal to the Ninth Circuit Court of Appeals.

The hearing came two months after Judge Ronald M. Whyte issued an order that dismissed San Jose’s antitrust claims based on the court-created antitrust exemption for MLB. In the same order, the court held that San Jose had adequately pled two claims for interference with contract, on the theory that MLB’s delay in making a decision on the A’s proposal to move to San Jose had interfered with the A’s option agreement with San Jose to purchase five acres of land in downtown San Jose on which to build a new ballpark. My previous post on the Court’s ruling is here.

Judge Whyte began Friday’s hearing by stating that he was tentatively inclined to dismiss the state court claims. He then heard arguments by attorneys for the parties: John Keker for MLB and Philip Gregory for San Jose.

MLB asked Judge Whyte to hold onto the state law claims and then stay the case, while the Santa Clara Superior Court decides a different lawsuit challenging, among other things, the validity of the option agreement. That action, filed by a group called Stand for San Jose, is believed to be an effort by the San Francisco Giants to have the option agreement invalidated. You can read more on that state court action here, here, and here. There will be a hearing in the state court case next Friday, December 20.

Keker argued that if the option agreement is invalid, then San Jose doesn’t even have standing to sue MLB on antitrust grounds, which would make an appeal of the exemption ruling moot. Keker also raised concerns of a three-court circus that would arise if the federal action is dismissed, but appealed, and San Jose proceeds with the interference claims in state court.

Once they heard Judge Whyte’s tentative ruling, attorneys for San Jose essentially submitted the matter. San Jose wants the opportunity to get the exemption issue before the appeals court and, eventually, the U.S. Supreme Court as quickly as possible. Joe Cotchett, lead attorney for San Jose, spoke to reporters after the hearing and expressed confidence that tide has turned in courts against the antitrust exemption and it’s only a matter of time before the U.S. Supreme Court limits or eliminates the exemption.

Amid the procedural skirmishing, Judge Whyte asked MLB about the letter the league apparently sent in April rejecting the A’s proposal for a San Jose ballpark. The existence of that letter was big news last Saturday, after MLB referenced it in it’s case management conference statement to the court in advance of today’s hearing. My post on it is here.

Keker told the Court that the letter should remain confidential because it contains proprietary business information about the A’s proposal and finances. Keker then said: “The proposal by the A’s was unequivocally denied. There is no other proposal by the A’s pending before the Commissioner.”

Judge Whyte concluded the hearing by stating that he was leaning toward adopting his tentative ruling to dismiss the state law claims without prejudice and enter final judgment.

Some have questioned why attorneys for San Jose would want the case dismissed from federal court now. The big issue in the case has been and will be baseball’s antitrust exemption. The fastest way to get an appeals court and the Supreme Court to limit or eliminate the exemption is by appealing Judge Whyte’s order immediately.

Yes, San Jose wants discovery into MLB’s decision-making process, but it can seek that discovery in a state court action if it chooses to pursue the interference claims. Indeed, from San Jose’s perspective, the maximum amount of chaos it can cause in the courts the better, in the hopes that MLB will be concerned enough about losing its exemption and its control over the relocation process that it would agree to let the A’s move to San Jose. That’s a long shot strategy, but that’s all San Jose has at this point.

Judge Whyte is likely to issue an order before the Christmas.

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Wendy writes about sports and the business of sports. She's been published most recently by Vice Sports, Deadspin and NewYorker.com. You can find her work at wendythurm.pressfolios.com and follow her on Twitter @hangingsliders.

18 Responses to “Federal Court Hearing In San Jose vs. MLB Could Move Process Forward”

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  1. Owen says:

    I sincerely hope you forgot the space in ‘For War’ instead of just missing a ‘d’ at the end ‘forward’…

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  2. xoot says:

    The appeal to the 9th Cir. will take a while (two years is what I’ve seen, in two cases, recently). The 9th Cir. should be bound by the same precedent that bound Judge Whyte to apply the A/T exemption outside the reserve clause, etc. Also, mlb can reassert its lack-of-standing and lack-of-antitrust-injury defenses in the 9th Cir. (J. Whyte sidestepped them and tacked the A/T issue head on.)

    mlb also will revive its request for a stay in the superior court. (Assuming J. Whyte dismisses the small, remaining state-law claims.) The scope of discovery issues and the question whether a protective order should shield the precious refusal letter from public view remain the same.

    In his order setting the cmc, Judge Whyte signalled that he was leaning toward entry of judgment on the A/T order. mlb argued for the moon, but got what seems reasonable. I doubt they expected anything else. btw, I think in the jt cmc statement both sides asked Judge Whyte to hold onto the state-law claims. Superior Court may be cheaper, but these days–since the budge cut ax came down–its pretty inefficient. And slow.

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  3. Buck Turgidson says:

    Heres the problem: Wolfie and Selig are assnuts to the 5th degree. Wolfie is assnut numero uno with his moron moves trying to bail on Oaktown. Selig is a bigger biotch for preveting ANYTHING from happining. I have more business sence in my left nut than either of those goons have altogether.

    Eventually, when this is all said and said, the A’s will get a stadium in OAKLAND, long after Wolfie sells the club.

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    • A's Fan says:

      Business sence, huh?

      Cue the goofball “fans” who are more concerned about which city limits the A’s play in than the overall well-being of the franchise…

      Do Niner fans give a crap the new stadium is in Santa Clara? Um, no. Why are some people so attached to Oakland? If Oakland can’t get stuff done (like SF couldn’t with the Niners) then the A’s need to find a place that will make something happen.

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    • Luxurybox Snapshot says:

      You are too rough on Lew Wolff, Mr. Turgidson. The coliseum is right in the middle of a dangerous neighborhood and the City of Oakland has done nothing to improve the situation. It is a long way from a wealthy South Bay fanbase that can make the A’s a real powerhouse that can compete against the best teams. Don’t you want a new stadium with like modern concessions? I know change is hard but the hard working A’s ownership group deserves the chance to compete in a more business friendly environment. With, like, more white people around.

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      • Pennsy says:

        Nice little bit of racism to cap your comment, there.

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      • Will says:

        The best thing the A’s have had over the past 20 years has been the fervor and dedication of its loyal (even if not that large) fan base. I have no idea how much of this fan base consists of “wealth South Bay” residents, but the A’s are hardly a new or undiscovered commodity; if those in the South Bay were/are so invested in the team, why don’t they come out and support it in greater numbers? Your response, I assume, would involve the distance to and the location of the stadium. To a certain extent, I’m sympathetic to those claims, but are these then the fans you want to cast the team’s fate upon? I’m convinced that there is more money in the South Bay but I’m not convinced – in fact I’m doubtful – that there is greater or equal interest. If the A’s leave Oakland, they cease to be the Oakland A’s.

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        • A's Fan says:

          New stadiums tend to bring out fans in greater numbers. The Giants were in the bottom half of attendance regularly at Candlestick Park, which was considered a dump compared to the Coliseum (pre-Mt. Davis at least). Then they had their “jewel” of a new stadium built, and they have been near the top in attendance since. It’s not just a ballpark, but an “experience” and a tourist destination. A lot of people are drawn in who are not regular baseball fans. Fenway Park, Yankee Stadium, Wrigley Field, and the fancier new parks have a similar appeal.

          At the Coliseum, people are there for one reason: to watch baseball. As a baseball fan I think that’s wonderful, but it helps attendance figures to draw in the masses for other reasons, too. I can only imagine the state-of-the-art technology that would go into a new Silicon Valley ballpark. Combine that with winning, and the San Jose A’s would have no problem selling tickets.

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        • Will says:

          In the initial stages, you’re right. Long-term, however, it can go either way. For San Francisco and Baltimore, it worked well. In Chicago (White Sox) and Miami, new stadiums did nothing to help the financial standing of the franchise. I also agree that a nice stadium with a winning team occupying it will sell tickets – I’d just like to see that achieved in Oakland.

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        • Kris says:

          Well said Will. A stadium on its own isn’t enough. The Twins are another example of new stadium but are also awful and it’s not like they’re suddenly top spenders (though the financial situation isn’t as bad as it used to be).

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  4. ReuschelCakes says:

    like hockey, college football and many other sports before them… this outcome and therefore the A’s will ultimately follow the $$. and that is depressing.

    given the fantastic legacy of the A’s in Oakland (more Bay Area titles than the Giants), the revolution of an industry and the empowering status of underdog – this will be a goddamn shame.

    as an A’s season-ticket holder, I’d like to think that more matters… but it won’t. here’s to hoping that Oakland does what it should not (based on fiscal prudence) and plumps for a new stadium.

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    • A's Fan says:

      Every major sport is primarily motivated by money (I’m not sure why you singled out hockey and CFB?). There’s no getting around that (unfortunately).

      Why would moving a few miles south in the Bay Area hurt the A’s legacy? I’m pretty sure most baseball fans will still recognize the four Oakland titles.

      Right now though, the rest of the country sees the A’s as an overachieving underdog that plays in a shitty stadium and can’t get it done in October. A new stadium would help improve PART of their image/situation. With the sewage issues now, it’s just getting ridiculous, and frankly I don’t care if their new stadium is in Oakland or San Jose or freakin’ Treasure Island… I just want it to get done.

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      • Jaack says:

        If its all about a new stadium, then why is Wolff only pushing for a San Jose stadium, which will take years of litigation for the slight chance that something comes out of it instead of pursuing other options, such as the stadium in Jack London Square, or in Fremont? This ins’t about getting a new stadium as quickly as possible, because this might the slowest way to get a new stadium in the Bay Area aside from maybe moving into SF itself.

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        • Marsalis Jackson says:

          The Oakland Athletics biggest problem is not getting a new ballpark. What the Athletics ownership wants more than anything is to expand this franchises brand and overall value by building a jewel of a ballpark in downtown San Jose. The main problem is that the SF Giant have already monopolized the best markets in the Bay Area including Santa Clara County were San Jose is located. The SF Giants has established a clear advantage over the Athletics organization over the decades finacially. The Athletics will always have 4 world series titles to rub in the SF Giants faces including the infamous 1989 world series, but in todays world its all about how much money you made at the end of the day. The Athletics problem is an economic issue and the building of a new ballpark in San Jose is just the ownerships Ace in the hole to achieve their goal of doing whats best for this organization from top to bottom. No team wants to be branded as a small market franchise if they can help it. If Lew Wolff wants to spend his own personal hard earned money on a new ballpark, why should he be limits to just Oakland as his only option? That is not right. I am an A’s fan and I will support this franchise weather it gets a new ballpark in Oakland or San Jose.

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        • A's Fan says:

          Well said, Marsalis.

          Re: Jack — Wolff pursued Fremont several years ago and the city shot it down. (Remember when everyone was talking about a move to Fremont instead of SJ? Yeah, that was Wolff.) Also, the Oakland City Council hasn’t exactly been enthusiastic about keeping the A’s or had a feasible long-term plan for them. I love how the Wolff haters always seem to overlook that fact…

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        • Kris says:

          The mayor definitely wants the team to stick around in Oakland. As far as feasible plan, it’d be perfectly feasible to build a new stadium in Oakland even if it was somewhere near the existing coliseum, kind of like what they did with Miller Park. I can understand why they want to move it to San Jose but obviously I’m not a huge fan of the idea.

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      • B N says:

        I think that the A’s should seek financing for a floating stadium off the coast, accessible by ferry and bridge, and financed by super-villains (I’m sure most MLB owners know at least one or two of those).

        “Mount Doom Stadium” can then have its naming rights sold, giving it a marginally kinder, friendlier name like “Walmart Park” or the “Goldman Sachs Center.” And sewage will no longer be an issue, as it could be treated, then flushed out to sea. To help pad the bottom line, it won’t be treated, but it *could* be treated, at least when the EPA stops by.

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  5. Tim says:

    What’s the upshot?

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