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In 2020, Major League Baseball’s action left 40 minor league teams out in the cold and their communities economically impacted. The minor leagues filed an antitrust suit against MLB. Today, a bipartisan coalition of state AGs asked the Supreme Court to rule on MLB’s historic exemption from such an antitrust suit. In Episode 8, Stephen Cobb and Ketura Taylor discuss this action and ask whether it portends more action and involvement from state attorneys general at the Supreme Court level.
TRANSCRIPTION
Stephen Cobb
Welcome to the third season of State AG Pulse. During this season, we’re selecting a story each week from state AG news. Over the next few minutes, we’ll quickly dive into this story to analyze the impact of state AGs as regulators and guardians of consumer protection and provide tips to help your business work successfully with state AGs. State.
My name is Stephen Cobb. I am a former Assistant Attorney General for the Commonwealth of Virginia and partner here at Cozen O’Connor. I’m joined today by my colleague Ketura Taylor. Ketura, welcome to the podcast.
Ketura Taylor
Thank you, Stéphane. I’m delighted to be here with you today.
Stephen Cobb
We’re talking about a story today that’s close to my heart because it’s the overlap of two things that I’m incredibly passionate about, and one is obviously the role of state attorneys general, but the other is professional sports . .
Ketura Taylor
So I won’t pretend to be as passionate about professional sports as you are, but of course I’m always interested in keeping my finger on the pulse of what state AGs are doing. And this story definitely caught my attention this week.
Stephen Cobb
Too often we get used to seeing state AGs over-regulate certain tried-and-true industries, financial services, technology, anything related to cybersecurity and data breaches. But one of the areas that we are not, at least not traditionally accustomed to seeing state AGs involved in, is the sports industry.
But recently, we’ve seen some pretty big announcements coming out of the state AG’s offices, regarding professional sports leagues, professional sports franchises, the NCAA. In May, New York Attorney General Letitia James and California Attorney General Rob Bonta announced they were conducting a first-of-its-kind investigation into the National Football League to focus on allegations discrimination in the workplace and a hostile work environment.
This follows investigations into individual franchises by DC AG and the Virginia Attorney General’s Office. And that’s on top of investigations into some NCAA practices and universities by the attorneys general of Michigan, Tennessee and New Mexico. It takes a long time to say that this is an area, a cause, and an industry that has never felt the regulatory wrath of state AGs before, but feels it all right now. a shot very, very quickly.
Which brings us to our article, from the headlines, that we are discussing today, which is an announcement released by Connecticut Attorney General William Tong. So Ketura, why don’t you tell our listeners a little bit about her most recent announcement.
Ketura Taylor
So, as you mentioned, AG Tong announced that he is leading a coalition of attorneys general to weigh in on a case that is to be considered by the Supreme Court. The legend is Tri-City ValleyCats and Oneonta Athletic Corporation v. Office of the Commissioner of Baseball.
This stems from an agreement among major league baseball teams to reduce minor league affiliates from affiliates to , essentially leaving minor league teams out in the cold. Because of this contraction, as I said, teams across the state have essentially lost the ability to compete for minor league talent and the kind of financial support they would have received from those major league affiliates. So there is certainly a significant economic impact on these teams, and of course on the communities in which they exist.
So minor league teams took action. They filed an antitrust suit against MLB, claiming it was a horizontal agreement that restricts competition in violation of the Sherman Act, our federal antitrust law.
This issue was first brought before the Southern District of New York and then considered by the Second Circuit. Not surprisingly, both courts found themselves bound by what constitutes a century-old precedent establishing an antitrust exemption for professional baseball that effectively immunizes MLB from any type of antitrust claims. So, as the Second Circuit said, they are required to continue to apply this Supreme Court precedent unless and until the Supreme Court overturns it. So basically I’m preparing it for review.
Stephen Cobb
One of the things I found really interesting here, Ketura, among these AGs that are weighing in, you have Connecticut, Arizona, Colorado, Indiana, Kansas, Louisiana, Minnesota, Montana, New Jersey, New Mexico, New York, Tennessee, Vermont. and West Virginia, in addition to the Commonwealths of Massachusetts, Pennsylvania, Virginia, and the District of Columbia. Increasingly, when we see many friends among state AGs, they are often divided along partisan lines. But what we see here is that this is largely a bipartisan group of AGs weighing in on this issue of the antitrust exemption. What do you think at least tells us where, in terms of law and public policy, this issue is headed?
Ketura Taylor
Well, as you mentioned, it’s completely bipartisan. America’s pastime brings us all together, right? And I think it’s a nonpartisan issue when you’re talking about states and communities wanting to have a vibrant sports league. They want to have a fan base, they want to bring their community together. So this is something that is not particularly controversial between Democrats and Republicans. So it doesn’t surprise me that this particular issue has brought together attorneys general from both sides of the aisle on the same issue.
Stephen Cobb
Attorneys general constitute one of, if not the largest, group of Supreme Court practitioners. They are the pros at what it takes to challenge and win these constitutional arguments. So it’s interesting when they come together in this form.
Ketura Taylor
Absolutely. So I don’t want to try too hard to read the tea leaves. You never know what happens at the Supreme Court, but I think when the attorneys general step in, it certainly has the potential to further encourage the court to consider this case. And I also wouldn’t be surprised if this case comes up again in the next term, because as mentioned in some of the background papers I’ve reviewed, the sitting justices themselves have criticized this baseball exemption in the past. So I hope that they will heed the Attorneys General’s insistence in their brief and bring it up for review next year, because it is certainly an interesting case that is important to many people.
Stephen Cobb
One of those things, when you talk to regular Supreme Court practitioners, the first thing they’ll tell you is that it’s very likely that a case will go to the Supreme Court under a split circuit, of course. And so it doesn’t necessarily rise to that level, but I think when states say that this is an issue that requires and merits the Supreme Court to rule on, that’s obviously something that we need to keep an eye on .
Ketura Taylor
Exactly. And it’s not just that these AGs want their states to benefit from the economic impact of minor league sports, it’s also, as they stated in their brief, that they are concerned about their ability to as state antitrust enforcement agencies, to fulfill this role as they see fit. . The reason they say this, and why they have standing to file an amicus brief, is because in their view this antitrust exemption infringes on their sovereignty as agencies responsible for enforcement of antitrust laws.
So what they are arguing is that state enforcement of antitrust laws should not be preempted unless Congress clearly intends to allow it. And from their reading of the relevant statutory history and precedents that exist over the last hundred years, as we have said, there is no indication that Congress ever intended that the enforcement power state antitrust laws are overridden or preempted by the federal antitrust landscape. So, they’re arguing here that it’s a difficult argument to make that the precedent directly on this point should be overturned.
Stephen Cobb
Indeed, there is a broader question about whether or not we think this indicates greater action and involvement by state attorneys general at the Supreme Court level. What are your thoughts?
Ketura Taylor
Oh, I’m sure the prosecutors will continue to be extremely active, not only in urging the court to take up cases as they did in this case, but also in ruling on the merits. Particularly this October, with the start of the new term, we are seeing a decent number of amicus briefs from different AG coalitions. As you mentioned earlier, most of them are divided along partisan lines.
Just this week, a coalition of AGs filed amicus briefs in support of one of the parties in a case centered on a certain tax rule that has significant consequences for the state and just a month before that, a AG’s separate coalition led by West Virginia filed an amicus brief for the other parties. So they are definitely active and I wouldn’t expect it to go away anytime soon.
Stephen Cobb
I couldn’t agree more, state attorneys general will continue to move the ball forward in appellate cases and make their voices heard at the U.S. Supreme Court. Ketura, thank you so much for joining me on this podcast. I hope our listeners will keep a close eye on this certification request as well as all these other cases where state attorneys general are stepping in and asking the Supreme Court to rule, because some of them will certainly be historic decisions as we move forward. Looking forward to seeing you in our next episode.
