Much of my offseason writing on this site focused on the legal proceedings involving Major League Baseball, partly because MLB is embroiled in quite a few lawsuits, and partly because I try to stick to the advice: “Write what you know.” But as spring training kicks in to gear next week, and then the season in late March, I hope (I really, really hope) to spend more time on interesting baseball stories and less time on the intricacies of the Joint Drug Agreement and federal antitrust law.
Call me a dreamer.
In any event, there have been a few recent developments in MLB-related legal matters; perhaps not significant enough to warrant their own post, but important enough to mention as part of this legal roundup. When readers ask me on Twitter, “Hey, what’s happening with such-and-such lawsuit,” I’ll be able to send them a link to this article. At least for a while.
Houston Astros/CSN Houston
In November, I told you about the mess involving the Astros and Comcast SportsNet Houston — the regional sports network owned by the Astros — Comcast and the Houston Rockets. The network launched in late 2012 but has been unable to reach carriage agreements with any cable or satellite operator in the Houston area, other than Comcast. That’s left 60% of television viewers without access to Astros and Rockets game, and left the RSN without the cash to pay the rights fees promised to the teams.
Last September, Comcast filed an involuntary bankruptcy petition against CSN Houston. The Astros countered with state court complaints against Comcast and the Astros’ prior orwner, Drayton McLane, in which the team alleged it was mislead about the new network’s economic and financial viability.
Just yesterday, the bankruptcy judge in Houston placed CSN Houston under Chapter 11 bankruptcy protection. That was the move Comcast and the Rockets sought, and what the Astros opposed. David Barron of the Houston Chronicle reported the bankruptcy court will now oversee a reorganization of CSN Houston that will focus on securing carriage rights agreements between the network and the non-Comcast cable and satellite companies in the area. The Astros could lose their equity stake in the network, see a diminution in their rights fees or both.
All things Alex Rodriguez
Last we met, baseball arbitrator Frederic Horowitz reduced Alex Rodriguez’s suspension from 211 games to 162 games — plus the 2014 postseason — should the New York Yankees win the American League East or qualify as a wild card team. Rodriguez didn’t take too kindly to that decision and filed a lawsuit in federal court in Manhattan against MLB and the players’ union. In the suit, Rodriguez claimed the proceeding before Mr. Horowitz was unfair, lacked due process and resulted in unfounded punishment. That case is pending before Judge Edgardo Ramos of the U.S. District Court in the Southern District of New York.
Immediately, MLB requested a conference before Judge Ramos to discuss its expected motion to dismiss Rodriguez’s lawsuit. In a letter to the court, MLB argued that judicial review of arbitration decisions is quite limited, and that the arbitrator considered and rejected Rodriguez’s allegations the evidence was insufficient to find he used performance-enhancing substances. MLB also took issue with Rodriguez’s claim that the arbitrator misinterpreted the Joint Drug Agreement and Collective Bargaining Agreement. (I’ve written extensively about these legal issues, and believe the arbitrator did misinterpret the agreements. Nonetheless, the court has very limited authority to review the arbitrator’s interpretation).
MLBPA also wrote the judge and previewed its motion to dismiss. The players’ union argued that courts are highly deferential to how unions carry out their duty of fair representation in an employer-employee arbitration proceeding. It then countered Rodriguez’s factual allegations against the union: That the former union head — the late Michael Weiner — wrongly revealed to the public his view of Rodriguez’s defense; that the union should have stopped MLB’s Florida lawsuit against Biogenesis founder Anthony Bosch; and that the union should have presented a more aggressive defense for Rodriguez in the arbitration.
Judge Ramos ordered Rodriguez to respond to these letters by this Friday. He will hold a preliminary conference in the case on Feb. 14.
There’s been a bit of Rodriguez-related legal wrangling in a different courtroom in the U.S. District Court in Manhattan. You may recall that in October, after the arbitration had commenced, Rodriguez sued MLB in New York state court and charged the league with tortiously interfering with his contact with the Yankees. He complained about much of the same conduct at the heart of his effort to undo the arbitration decision: Essentially that Anthony Bosch is a liar and a fraud, and that MLB bought acted illegally — by buying stolen Biogenesis documents — for the sole purpose of building the case against Rodriguez.
MLB removed the state lawsuit to federal court (a standard legal maneuver when a collective bargaining agreement is involved) and moved to dismiss the complaint as preempted by the CBA. Rodriguez moved to remand the case to state court. The remand motion has been fully briefed. The judge in that case — U.S. District Judge Lorna Schofield — appears ready to decide the motion without argument. If she keeps that case in federal court, she and Ramos will decide whether the two separate lawsuits will be combined before a single judge.
This is all standard legal wrangling that takes place soon after a lawsuit is filed. Still, the most interesting aspect of this whole mess is Rodriguez did not ask the court to enter a preliminary injunction to keep the arbitration decision from going into effect. As such, the suspension is effective and unless overturned by a court, must be served by Rodriguez this season. If the federal court doesn’t dismiss Rodriguez’s complaint to overturn the arbitration decision — and my best guess is that it will dismiss it — the court would then oversee a fact-finding process that may very well take longer than the 2014 season. Under those circumstances, Rodriguez likely will have served his suspension before a court rules on its legality.
City of San Jose vs. MLB
In December, U.S. District Judge Ronald Whyte dismissed the remaining state law claims asserted by the City of San Jose against MLB relating to the city’s effort to become the new home of the Oakland A’s. The judge dismissed the federal antitrust counts several months earlier, on the theory that such claims were barred by MLB’s antitrust exemption. By dismissing the state law claims, the court was able to enter final judgment. That allowed San Jose to proceed with its appeal of the federal claims to Ninth Circuit Court of Appeals, and to re-file its state law claims in state court.
That’s exactly what’s happened. San Jose filed its notice of appeal with the Ninth Circuit, and then immediately asked the court to expedite the matter. San Jose argued that if the court doesn’t resolve the antitrust exemption issues by Nov. 8 — which would be unlikely under the current briefing schedule — the city will lose its opportunity to bring the A’s to San Jose, as that is the date the option agreement expires. It’s an interesting argument, as San Jose is all but conceding that without an active option agreement, it may not have standing to assert antitrust claims against MLB. I’m not persuaded the court will expedite the matter. You can decide for yourself by reading the motion to expedite here.
San Jose did re-file its state law claims in state court — this time in Santa Cruz Superior Court. The complaint reads much like the one the city originally filed against MLB in federal court. If you must, you can find the complaint here. Why Santa Cruz? Well, under California law, a city cannot file a complaint in the county where it’s located. If San Jose wanted to stay close, the other options were San Mateo, San Francisco and Alameda counties. The first two are considered Giants Country and the latter is the home of Oakland. So Santa Cruz it is. A case management conference is scheduled for mid-May.
Antitrust challenge to MLB blackout policy
Last year, around this time, I told you about a lawsuit that had been filed challenging MLB’s policies that result in blackouts of “local” games on MLB Extra Innings and MLB.tv. Local is in quotation marks because many teams claim a TV broadcast territory far beyond the reach of its RSN’s signal. I showed you this map.
That lawsuit has proceeded apace and, in the next few months, may come to some sort of resolution. It appears from the court’s most recent scheduling order (which you can read here) that the parties are at the expert discovery phase — which means each side has obtained documents and sworn testimony from the other side’s key witnesses. For MLB, that includes, at a minimum, Red Sox owner John Henry, who is specifically referenced in the scheduling order.
Each side has retained experts and will now provide the other side with those experts’ reports, after which the experts will be deposed. If MLB wants to resolve the case short of a trial, it must soon file a motion for summary judgment wherein it will argue that the facts are undisputed and/or the law compels that the plaintiffs’ antitrust claims be dismissed.
Like the others, this case is going to be interesting to watch over the next few months.