Case against MLB over minor league reorg gets approval from judge
Jury trial scheduled for November 13
A state judge, to MLB’s chagrin, allowed lawsuits filed by two former minor league teams over the 2020 reorganization of minor league baseball to proceed to trial scheduled for November 13 in New York Supreme Court.
In a September 8 oral ruling, Judge Barry Ostrager said there was enough to move forward on the charge that MLB’s reorg of MiLB in 2020, which reduced the number of teams from 160 to 120, had interfered with the the National Association Agreement (NAA) that had governed minor league baseball for over a century.
The two teams, former Houston Astros affiliate the Tri-City ValleyCats and the former Detroit Tigers affiliate the Norwich Sea Unicorns, are suing their former parent clubs and MLB for interfering with the NAA. A third team, the Staten Island Yankees, previously settled with MLB.
“Both this action and the companion case turn on the decision made by Major League Baseball (“the MLB”), beginning in the summer of 2019, to reorganize the minor league system by reducing the number of minor league teams from 160 to 120,” Ostrager wrote. “The Court finds that the competing arguments create multiple issues of fact which can only be resolved at the jury trial scheduled for November 13, 2023. Those issues include, but are not limited to, precisely when Defendants made improper inducements to NAA members and when the various minor league clubs breached the NAA by negotiating or cooperating with competing organizations.”
MLB and the teams can always appeal the ruling and ask for a stay, which if granted would significantly delay the case because Judge Ostrager is retiring at the end of the year. It was a point he noted in urging MLB’s counsel, John Hardiman, not to file a motion for reconsideration.
Hardiman, whose facial expressions during the time Ostrager read his ruling evinced clear displeasure if not surprise, told the judge he is “obviously disappointed.” During the oral arguments, Hardiman argued the two teams had participated in the process of applying for major league affiliate status and by law couldn’t now sue over their failure to win a slot.
He also noted the Professional Baseball Agreement, the contract between MLB and MiLB expired, so MLB was free to do as it wished.
Counsel for the teams, David Lender, noted discovery that found the majority of MLB teams wanted to keep the number of teams at 160, and some that wanted no cap on the number of teams.
MLB’s role in taking over MiLB is already the subject of a federal antitrust case designed to get to the Supreme Court to overturn baseball’s antitrust exemption. The case was rejected by the 2nd Circuit and the minor league teams await word on whether the High Court will take the case.
But the state cases, which initially included numerous charges, were narrowed down to just the tortious interference case alleged by the two minor league clubs. The September 8 hearing heard arguments from MLB to toss the case, a move Ostrager would not do.
Hardiman tried to deflect allegations that the MiLB reorg was a money grab on MLB’s behalf, saying the league did not save money by cutting 40 teams. “it was cost neutral to baseball, the costs that were saved with respect to the 40 teams that are no longer were put into minor league baseball.”
Ostrager also rejected MLB’s request to seal many of the documents it recently filed in the buildup to Wednesday’s hearing, though currently many of those remain unavailable on the court system website.