Your 2014 MLB Legal Year-in-Review: Part One

Like any multi-billion dollar organization, Major League Baseball faces its share of lawsuits in any given year. Even by its standards, though, 2014 was a particularly busy and eventful year for MLB on the legal front.

This week I’ll be reviewing and providing updates for the most significant events of the last year. In this installment, we’ll look back at the legal wrangling surrounding Alex Rodriguez’s season-long PED suspension and the on-going saga regarding the Oakland A’s proposed move to San Jose.

A-Rod

The year started off with a bang in early-January, when baseball arbitrator Frederic Horowitz upheld most (but not all) of Commissioner Bud Selig’s 211-game suspension of Alex Rodriguez for PED usage. Facing the prospect of sitting out the entire 2014 season, Rodriguez then opted to file a lawsuit in federal district court, asking the court to set aside Horowitz’s decision. In addition to MLB, Rodriguez’s suit also controversially named the Major League Baseball Players Association as a defendant in the case, alleging that the union had failed to sufficiently protect Rodriguez’s rights during MLB’s Biogenesis investigation.

As one might expect, the MLBPA membership did not take kindly to being named as a defendant in the suit, reportedly briefly exploring the possibility of kicking Rodriguez out of the union. In many respects, though, Rodriguez’s legal claims against the MLBPA were a natural consequence of the union’s shifting views on PED usage, as the MLBPA’s decision not to vigorously defend alleged PED users like Rodriguez exposed the union to claims that it had failed to sufficiently represent the interests of accused players.

In any event, Rodriguez’s lawsuit faced long odds of success from the start, as courts are generally quite reluctant to overturn arbitration decisions. So it was not particularly surprising, then, that Rodriguez decided to withdraw the suit a few weeks later.

Even after throwing in the towel on his legal defense, however, Rodriguez’s legal troubles were not quite finished. In July, Rodriguez’s former law firm sued him for unpaid legal fees of nearly $380,000. The firm eventually withdrew the suit in November – after the judge identified various procedural defects in the case – but has threatened to refile the suit at a later date in state court.

Ultimately, however, the most significant lasting impact of the Rodriguez ordeal will likely prove to be the decision issued by arbitrator Horowitz in January. In particular, Horowitz held that cases like Rodriguez’s – alleging that a player has engaged in continuous or repeated PED usage – are subject to Section 7.G.2 of MLB’s Joint Drug Agreement, and not Section 7.A as most observers had previously assumed.

As Wendy Thurm previously discussed, this is an important difference. Unlike Section 7.A of the JDA – which specifies the traditional 50-game/100-game/lifetime suspension framework for PED cases – Section 7.G.2 does not include any specific corresponding punishment. So following Horowitz’s decision, MLB can potentially impose whatever punishment it sees fit in cases where a player is accused of repeated PED use. As a result, the decision appears to have given MLB significant new power to punish alleged PED users.

San Jose v. MLB

The future of the Oakland Athletics remains unsettled as 2014 comes to a close, with the city of San Jose’s federal antitrust lawsuit against MLB continuing to wind its way through the courts. As Wendy Thurm has previously discussed quite extensively (here, here, and here), the team had hoped to build a new stadium in nearby San Jose, but has been waiting for years for MLB to approve the deal. The hold-up is the result of the A’s allegedly having agreed to assign Santa Clara County – where San Jose is located – to the San Francisco Giants back in the early-1990s. The Giants now refuse to allow the A’s to move into their territory, even though the team would actually be moving further away from AT&T Park.

Having grown frustrated by the delay, San Jose filed a federal antitrust lawsuit against MLB in 2013, claiming that the league’s continued refusal to allow the A’s to move to the city violates the Sherman Act. The case was dismissed by the trial court later that year under baseball’s antitrust exemption. The city then appealed the decision, and the Ninth Circuit Court of Appeals held an oral argument in the case this past August. Based on the tenor of the argument, the three-judge panel appeared inclined to rule in MLB’s favor in light of its antitrust exemption.

It’s now more than four months later, though, and we are still awaiting the court’s decision. A delay of that length isn’t particularly unusual, but is a little surprising in this case considering the one-sided nature of the oral argument. There could be any number of reasons why the decision has been delayed, including the possibility that one of the judges is preparing a concurring opinion in the case.

Regardless, should the appellate court ultimately rule in MLB’s favor, expect San Jose to appeal the case to the Supreme Court sometime in 2015. And even if the Supreme Court agrees to take the case, a decision likely wouldn’t be issued until 2016.

Meanwhile, with no end in sight to the legal maneuvering, the A’s have decided to continue to keep their options open. In July, the team signed a new 10-year lease with O.co Coliseum running through the year 2024. Because the team can opt-out of the agreement after the 2018 season, however, the lease hardly reflects a long-term commitment by the team to stay in Oakland.

In fact, shortly after signing the lease extension in Oakland, the A’s also reached an agreement with San Jose extending the team’s option agreement for the land for the planned new stadium for seven more years. A local San Jose citizens’ group then filed a lawsuit in December challenging the new option agreement on various environmental and procedural grounds (the same group – believed to be supported by the Giants – had previously filed a similar suit challenging the city’s original land option agreement with the A’s).

Where all this ultimately ends up is anyone’s guess. The safest bet, though, appears to be that nothing will be resolved for the A’s anytime soon.

We hoped you liked reading Your 2014 MLB Legal Year-in-Review: Part One by Nathaniel Grow!

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Nathaniel Grow is an Associate Professor of Business Law and Ethics at Indiana University's Kelley School of Business. He is the author of Baseball on Trial: The Origin of Baseball's Antitrust Exemption, as well as a number of sports-related law review articles. You can follow him on Twitter @NathanielGrow. The views expressed are solely those of the author and do not express the views or opinions of Indiana University.

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Matthew
Guest
Matthew

I might be alone on this: But I believe ARod had a pretty convincing against the league and possibly the union. I think it is pretty clear the league used borderline legal and shady evidence, if not coercing witnesses. Bud Selig was drunk with power and didn’t follow the criteria clearl laid out in the CBA because of a personal grudge. And the union really put up a sham of a defense

BRH
Guest
BRH

Even if all of your arguments were true, Rodriguez would not survive a motion for summary judgment.