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Garber v. office of Comm'r of Baseball

United States District Court, S.D. New York

September 22, 2014

FERNANDA GARBER, MARC LERNER, DEREK RASMUSSEN, and GARRETT TRAUB, representing themselves and all other similarly situated, Plaintiffs,
v.
OFFICE OF THE COMMISSIONER OF BASEBALL, et al., Defendants

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For Plaintiffs: Edward A. Diver, Esq., Howard I. Langer, Esq., Peter E. Leckman, Esq., Langer Grogan & Diver, P.C., Philadelphia, Pennsylvania; Kevin M. Costello, Esq., Gary E. Klein, Esq., Klein Kavanagh Costello, LLP, Boston, Massachusetts; Michael Morris Buchman, Esq., John A. Ioannou, Esq., Pomerantz Haudek Block Grossman & Gross LLP, New York, New York; Alex Schmidt, Esq., Mary Jane Fait, Esq., Wolf Haldenstein Adler Freeman & Herz LLP, New York, New York; Robert LaRocca, Esq., Kohn, Swift & Graf, P.C., Philadelphia, Pennsylvania; J. Douglas Richards, Esq., Jeffrey Dubner, Esq., Cohen, Milstein, Sellers & Toll, PLLC, New York, New York.

For Office of the Commissioner of Baseball, Major League Baseball Enterprises Inc., MLB Advanced Media L.P., MLB Advanced Media, Inc., Athletics Investment Group, LLC, The Baseball Club of Seattle, L.L.P., Chicago White Sox, Ltd., Colorado Rockies Baseball Club, Ltd., The Phillies, Pittsburgh Baseball, Inc., and San Francisco Baseball Associates, L.P., Defendants: Bradley I. Ruskin, Esq., Carl Clyde Forbes, Esq., Helene Debra Jaffe, Esq., Jennifer R. Scullion, Esq., Robert Davis Forbes, Esq., Proskauer Rose LLP, New York, New York; Thomas J. Ostertag, Esq., Senior Vice President and General Counsel, Office of the Commissioner of Baseball, New York, New York.

For Comcast Corporation, Comcast SportsNet Philadelphia, L.P., Comcast SportsNet Mid-Atlantic L.P., Comcast SportsNet California, LLC, and Comcast SportsNet Chicago, LLC, Defendants: Arthur J. Burke, Esq., James W. Haldin, Esq., Davis Polk & Wardwell, New York, New York.

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OPINION AND ORDER

Shira A. Scheindlin, United States District Judge.

I. BACKGROUND

On August 8, 2014, I denied defendants' joint motion for summary judgment in Laumann v. National Hockey League and Garber v. Major League Baseball.[1] I ruled that the Office of the Commissioner of Major League Baseball and other entities related to Major League Baseball (" MLB Defendants" ) were not shielded from antitrust liability by the well-established " baseball exemption." On August 27, 2014, the MLB Defendants moved to certify an interlocutory appeal on that ruling. On September 8, 2014, Comcast filed a letter on behalf of all television defendants involved in the Garber case (" Television Defendants" ), joining the MLB Defendants' motion.[2] For the reasons set forth below, the motion is DENIED.

II. APPLICABLE LAW

A. The Baseball Exemption

Because my August 8, 2014 opinion discusses the baseball exemption at length,[3] I summarize it only briefly here. In 1922, in Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs, the Supreme Court held that " the business [of] giving exhibitions of baseball" was not subject to the Sherman Act.[4] Since then, the exemption has been upheld by the Supreme Court numerous times, most recently in Flood v. Kuhn, where it explained that the exemption, despite being " an aberration," [5] should be modified by " congressional, and not judicial, action." [6] In 1998, Congress passed the Curt Flood Act, which effectively removed employment-related agreements from the baseball exemption. The Act did not alter the applicability of the antitrust laws to " any conduct, acts, practices, or agreements other than . . . employment of

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major league baseball players." [7]

B. Interlocutory Appeals

Interlocutory appeals of district court decisions are governed by 28 U.S.C. § 1292(b). For an interlocutory appeal to be appropriate, the underlying order must " (1) involve a controlling question of law (2) over which there is substantial ground for difference of opinion," and the moving party must also show that " (3) an immediate appeal would materially advance the ultimate termination of the litigation." [8]

Interlocutory appeals are presumptively disfavored. Leave to appeal is warranted only when the moving party can point to " exceptional circumstances" [9] sufficient to " justify a departure from the basic policy of postponing appellate review until after the entry of a final judgment." [10] Interlocutory appeal " is not intended . . . to provide early review of difficult rulings in hard cases." [11] Rather, it is appropriate only in " extraordinary cases where appellate review might avoid protracted and expensive litigation," and where it poses no threat of " piecemeal litigation." [12] Whether an interlocutory appeal is warranted lies squarely within the discretion of the district court.[13] Indeed, even when the elements of section 1292(b) are satisfied, the district court retains " unfettered discretion" to deny certification.[14]

IV. DISCUSSION

Because the applicability of the baseball exemption is indisputably a " controlling question of law," [15] I move directly to the second and third elements of section 1292(b).

A. There Is No " Substantial Ground for Difference of Opinion" Regarding the Baseball Exemption

For an issue to create " substantial ground for difference of opinion," [16] more than simple disagreement is required. Rather, the element is satisfied when " (1) there is conflicting authority on the issue, or (2) the issue is particularly difficult and of first impression for the Second Circuit." [17]

Neither condition is met here. First, the MLB Defendants argue that,

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contrary to my August 8, 2014 ruling, " the Supreme Court and all Circuit Courts cases consistently hold that the exemption applies broadly to the 'business of baseball,' not just . . . to certain aspects of that business." [18] Accordingly, the MLB Defendants conclude that substantial ground for difference of opinion exists because " a trial court" -- that is, this Court -- " [has] rule[d] in a manner which appears contrary to the rulings of all Courts of Appeals which have reached the issue." [19] But for the reasons set forth in my August 8, 2014 opinion, I do not believe my ruling is contrary to existing law.[20] That issue has already been decided, and I decline to reopen it here.

Second, the MLB Defendants suggest that " substantial ground for difference of opinion 'may arise where an issue is difficult and of first impression.'" [21] In other words, even if my August 8, 2014 ruling does not clash with other case law, if it implicates a question on which " the Second Circuit has not spoken," [22] interlocutory appeal could still be warranted. But the silence of an appellate court is not enough to satisfy section 1292(b). If it were, interlocutory appeals would be the norm, not the exception. Rather, the " difficult and of first impression" language refers to situations in which Second Circuit input could help resolve disagreements among other Courts of Appeals. Because that is not the case here, the MLB Defendants' argument is misplaced.

B. Interlocutory Appeal Will Not " Materially Advance the Ultimate Termination of the Litigation"

Additionally, I am not persuaded that an interlocutory appeal would " materially advance the ultimate termination of the litigation." [23] The MLB Defendants argue that " reversal by the Second Circuit may obviate the need for a costly and intensely time-consuming trial and, depending on the speed of the appeal, the incurrence of certain pre-trial expenses." [24] While this is of course possible, the operative phrase is " depending on the speed of the appeal." It is also possible that an interlocutory appeal would delay the onset of trial, which is reason enough to deny certification.[25]

But even if the MLB Defendants are correct -- that an interlocutory appeal would more efficiently dispose of the claims against them -- the same is not necessarily true of the claims against other defendants. The relationship between the MLB Defendants' liability and Television Defendants' liability is a complicated and disputed issue. According to the Television Defendants, allowing claims to proceed against them, when those same claims were barred against the MLB Defendants would " effectively defeat [the

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MLB Defendants'] immunity." [26] The Television Defendants therefore argue that if the claims against the MLB Defendants were dismissed, the corresponding claims against the Television Defendants would also have to be dismissed.

The Television Defendants' novel theory of intertwined liability might eventually prevail. But the theory is currently untested,[27] and that by itself counsels against certification. Under antitrust law, it is simply not clear if the fate of the Television Defendants overlaps entirely with that of the MLB Defendants. What is clear is that resolving this question -- which has not even been fleshed out in an exchange of premotion letters, much less fully briefed -- will require expending significant judicial resources. If those resources are expended by the Second Circuit during the course of an interlocutory appeal, the result will be " piecemeal" adjudication.[28] If the resources are instead expended by this Court on remand, the result will be further delay of trial. Neither outcome comports with section 1292(b).

C. The Scope of the Baseball Exemption Is Not A " Jurisdictional" Question

Finally, the MLB Defendants argue that interlocutory appeal is " especially advisable" because the baseball exemption implicates subject matter jurisdiction.[29] The premise of this argument is misplaced. The scope of the baseball exemption is not a jurisdictional issue. It is a threshold merits issue.

Although they point to numerous opinions that use the word " jurisdiction" in connection with the baseball exemption, the MLB Defendants fail to explain in what sense the question is jurisdictional. The closest they come is a sparse citation to Salerno v. American League of Professional Baseball Clubs, where, according to the MLB Defendants, the court reasoned that '" [it] lack[ed] jurisdiction of the subject matter' because 'organized baseball does not fall within the scope of the federal antitrust laws." '[30]

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But a court's subject matter jurisdiction does not evaporate every time a federal statute is held not to apply to a particular defendant or class of defendants. A statute like the Sherman Act grants subject matter jurisdiction to federal courts, and from there, federal courts -- in the exercise of their jurisdiction -- must decide to whom the statute applies. In practice, federal courts often decide (for any number of reasons) that a named defendant is not liable under the relevant statute. It would be illogical, however, to conclude that this decision deprives a federal court of authority to hear the case. Rather, it is because the federal court does have authority to hear the case that it may decide to whom the statute applies. As the Supreme Court has explained, subject matter jurisdiction " 'in federal-question cases is sometimes erroneously conflated with a plaintiffs need and ability to prove the defendant bound by the federal law asserted as the predicate for relief--a merits-related determination.'" [31] That is exactly what has occurred here.[32]

V. CONCLUSION

For the foregoing reasons, the MLB Defendants' motion to certify for immediate appeal is DENIED. The Clerk of the Court is directed to close this motion (Dkt. No. 327).

SO ORDERED:


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