Hatch v. Minnesota Twins Partnership Reply to Brief in Opposition
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January 1, 1999

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Brief Collection, LDF Court Filings. Hatch v. Minnesota Twins Partnership Reply to Brief in Opposition, 1999. 05c6658f-b59a-ee11-be36-6045bdeb8873. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/e4ed63cd-0a18-4cb5-88f2-4e3662a3962f/hatch-v-minnesota-twins-partnership-reply-to-brief-in-opposition. Accessed April 27, 2025.
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No. 99-414 In The Supreme Court of the United States ---------------- ♦ ----------------- MIKE HATCH, Minnesota Attorney General, v. Petitioner, MINNESOTA TWINS PARTNERSHIP, et al., Respondents. On Petition For Writ Of Certiorari To The Minnesota Supreme Court -----------------♦ ----------------- REPLY TO BRIEF IN OPPOSITION ---------------- ♦ ----------------- Attorneys' Names Omitted When Printing Sample (Needs to include designated Counsel of Record, Address, and Telephone Number) * Counsel of Record COCKLE LAW BRIEF PRINTING CO., (800) 225-6964 OR CALL COLLECT (402) 342-2831 1 ARGUMENT ......................................................................... 1 I. THE MINNESOTA SUPREME COURT DECIDED AN IMPORTANT FEDERAL QUES TION THAT CONFLICTS WITH A DECISION OF THE FLORIDA SUPREME COURT.............. 1 II. BASEBALL'S COMMERCE CLAUSE ARGU MENTS ARE WITHOUT M ERIT......................... 2 III. BASEBALL ERRONEOUSLY CLAIMS THE CURT FLOOD ACT SUPPORTS ITS POSITION................ 6 IV. BASEBALL'S RELIANCE ASSERTIONS ARE WITHOUT MERIT..................................................... 8 CONCLUSION ..................................................................... 10 TABLE OF CONTENTS Page C ases Butterworth v. National League, 644 So. 2d 1021 (Fla. 1994)....................................................................................2, 8 California v. ARC America Corp., 490 U.S. 93 (1989)........3 Exxon Corp. v. Governor of Maryland, 437 U.S. 117 (1978)......................... .......................................................3, 6 Herbert v. Los Angeles Raiders, 234 Ca. App. 36 (Calif. Ct. App. 1991), rev. dismissed, 871 P.2d 1133 (1994)..............................................................................4 HMC Management v. New Orleans Basketball, 375 So. 2d 700 (La. Ct. App. 1979)........................................... 4 Matuzak v. Houston Oilers, 515 S.W.2d 725 (Tex. Ct. App. 1974) .............................................................................. 4 Morsani v. Major League Baseball, 663 So. 2d 653 (Fla. Ct. App. 1995)............................................................ 4 New Orleans Pelicans v. Nat. Ass'n of Prof 'l Baseball Leagues, unreported, 1994 WL 631144 (E.D. La. Mar. 1, 1994)............................. ... ..................................... 4 Parker v. Brown, 317 U.S. 341 (1943)..................................... 3 Partee v. San Diego Chargers, 668 P.2d 674 (Cal. 1983)......... 4 Piazza v. Major League Baseball, 831 F. Supp. 420 (E.D. Penn. 1993)..................................................................8 Pike v. Bruce Church, Inc., 397 U.S. 137 (1970)................5 Robertson v. NBA, 389 F. Supp. 867 (S.D.N.Y. 1975)........4 State Oil v. Khan, 522 U.S. 3, 118 S. Ct. 275 (1997)........9 Union Labor Life Ins. v. Pireno, 458 U.S. 119 (1982)........8 ii TABLE OF AUTHORITIES Page M isc ella n eo u s ABA Section of Antitrust Law, Antitrust Law Developments (4th ed. 1997).........................................3, 6 144 Cong. Rec. S9494-03 (July 30, 1998)......................... 7 Marianne McGettigan, The Curt Flood Act: The Players' Perspective, 9 Marq. Sports L.J. 379 (1999)............................................................... 9 Stephen F. Ross, Monopoly Sports Leagues, 73 U. Minn. L. Rev. 643 (1989)...................................................8 S. Rep. No. 104-231 (1995)...................................................7 S. Rep. No. 105-118 (1997)...................................................7 iii TABLE OF AUTHORITIES - Continued Page 1 ARGUMENT I. THE MINNESOTA SUPREME COURT DECIDED AN IM PORTANT FED ERA L Q UESTIO N THAT CONFLICTS WITH A DECISION OF THE FLOR IDA SUPREME COURT. It is ironic that Baseball1 now claims there is no federal question when it was Baseball itself that raised the federal question below by seeking to quash the Civil Investigative Demands (CIDs) based upon its argument that the CIDs were "precluded by the baseball antitrust exemption [created by the U.S. Supreme Court] and the Commerce Clause." Baseball's Opp. Br. at 4; see also Peti tioner's Appendix ("Pet. App.") at 5-6. Indeed, all of the Baseball Respondents (except the Twins) actually filed a complaint in federal district court seeking a declaratory judgment that the State's CIDs were invalid based on this Court's baseball trilogy.2 1 "B a s e b a ll" and "O rg a n iz ed B a se b a ll" re fer to the Respondents. See Petition at 2 n .l. 2 On January 16, 1998, all of the Respondents (except the M innesota Twins) filed identical com plaints in the federal district court of M innesota seeking a declaratory judgm ent that the State's CIDs were invalid due to this Court's trilogy. A copy of the Sum m ons and C om plaint of the N ational League, Commissioner of Baseball, and the North Carolina Investment Group (D. Minn., Court File No. 98-97:D SD /JM M , Jan. 16, 1998) is contained in the Appendix of this Reply Brief. Identical Summonses and Complaints were filed by the American League and the M ilw aukee Brew ers. (D. M inn ., C ourt F ile Nos. 98-96:D SD /JM M and 98-98:D SD /JM M , Jan. 16, 1998). The State agreed to Baseball's request that the complaints be dismissed. 2 Further, by claiming that the Florida Supreme Court did not decide a federal question, Baseball ignores the certified question addressed in Butterworth: Does the antitrust exemption for baseball recog nized by the United States Supreme Court [in Federal Baseball, Toolson and Flood] exempt all decisions involving the sale and relocation of Baseball Franchises from Federal and Florida Antitrust law? Butterworth v. National League, 644 So. 2d 1021, 1021-22 (Fla. 1994). When the Florida Supreme Court answered "this certified question in the negative," id. at 1025, it clearly decided a federal question. Similarly, when the Minnesota Supreme Court noted that it was "compelled to accept the paradox the Supreme Court acknowledged in Flood" because it believed that "the Supreme Court should retain the exclusive privilege of overruling its own decisions," Pet. App. at 20, the court was deciding a federal question. The existence of three amici briefs from 12 States and the Consumer Federation of America ("CFA") indicate that this is an issue of national impor tance. Baseball's claims that the court below "did not directly decide any federal question," Baseball's Opp. Br. at 6, are meritless. II. BASEBALL'S COMMERCE CLAUSE ARGUMENTS ARE WITHOUT MERIT. Baseball claims that state antitrust laws cannot be applied to a national industry like Baseball without 3 violating the Commerce Clause.3 Baseball's Opp. Br. at 24-28. While it is true that states cannot "unduly burden" interstate commerce, it is well-settled that states can apply their antitrust laws to national industries. For example, in considering a Commerce Clause and preemp tion challenge, this Court held a state can prohibit activ ity even if that same activity is permitted under federal antitrust laws. Exxon Corp. v. Governor of Maryland, 437 U.S. 117, 128 (1978) ("we cannot adopt appellants' novel suggestion that because the economic market for petro leum products is nation-wide, no State has the power to regulate the retail marketing of gas"); see also Parker v. Brown, 317 U.S. 341 (1943) (indicating that states can have economic regulations that conflict with the Sherman Act); California v. ARC America Corp., 490 U.S. 93 (1989) (hold ing that state antitrust laws are not preempted by federal antitrust law). Indeed, the legislative history of the Sher man Act indicates that "among the purposes Senator Sherman cited for his bill was 'supplementation of the enforcement of these state [antitrust] laws.' " ABA Sec tion of Antitrust Law, Antitrust Law Developments 741-42 (4th ed. 1997) (quoting 21 Cong. Rec. 2457 (1890)). Most of the cases cited by Baseball as supporting a broad Commerce Clause preclusion of application of state antitrust law to sports leagues actually deal with player- team-league relations, and their holdings are obviously 3 The Ramsey County D istrict Court found that it was premature to address the Commerce Clause issue without a factual record. Pet. App. at 38. The M innesota Supreme Court did not address this issue, Pet. App. at 20 n.19, and this issue is not before this Court. 4 limited to these facts.4 Only one of the cases cited by Baseball, New Orleans Pelicans v. Nat. Ass'n of Prof'l Base ball Leagues, unreported, 1994 WL 631144, *9 (E.D. La. Mar. 1, 1994), actually supports the proposition that state law cannot be applied to sports leagues. Another Louisi ana decision cited by Baseball dismissed state antitrust claims against an NBA team on procedural grounds, and was not based on the Commerce Clause as Baseball implies. See HMC Management v. Neiv Orleans Basketball, 375 So. 2d 700, 707 (La. Ct. App. 1979) ("These [antitrust] allegations are simply conclusions and do not state the necessary facts upon which a cause of action should rest under Louisiana [fact-pleading] procedural law."). More over, a Florida court has ruled that "state antitrust laws not in direct conflict with federal antitrust laws are nei ther preempted nor precluded by any federal consider ations." Morsani v. Major League Baseball, 663 So. 2d 653, 4 See, e.g., Partee v. San Diego Chargers, 668 P.2d 674, 678 (C al. 1983) (fin d in g the n atio n al u n ifo rm ity req u ired in regulation of baseball's reserve system was likewise required in football player-team -league relationships, thus state antitrust laws did not apply to those relationships); H erbert v. Los Angeles Raiders, 234 Ca. App. 36 (Calif. Ct. App. 1991), rev. dismissed, 871 P.2d 1133 (1994) (fo llow ing Partee and h old in g that state an titru st law is not applicab le to NFL p layer co n tracts); Robertson v. NBA, 389 F. Supp. 867, 880 (S.D.N.Y. 1975) (finding that because the National Basketball A ssociation practices in dispute were similar to Baseball's reserve system, such practices could not be regulated by state antitrust law s); M atuzak v. Houston Oilers, 515 S.W.2d 725, 729 (Tex. Ct. App. 1974) (holding that Texas antitrust law could not be applied to NFL player contract). The instant facts do not implicate the reserve clause or any other aspect of baseball related to p layer-team -league relationships. 5 657 (Fla. Ct. App. 1995). Thus, Baseball's claim that the Commerce Clause precludes "application of state anti trust laws to all professional sports leagues," Baseball's Opp. Br. at 25, is unpersuasive. The correct legal standard for assessing Commerce Clause challenges was articulated by this Court as fol lows: Although the criteria for determining the val idity of state statutes affecting interstate com merce have been variously stated, the general rule that emerges can be phrased as follows: Where the statute regulates evenhandedly to effectu ate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lessor impact on inter state activities. Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970) (cita tions omitted; emphasis added). Here, Baseball makes no attempt to address this Court's balancing test, perhaps because its interests in collusive, anti-competitive behav ior cannot outweigh the states' interests in promoting free market principles. Moreover, in this case, application of Minnesota's antitrust law would be consistent with federal antitrust law - collusive boycotts, price fixing, and monopolization are illegal under both state and federal law. Furthermore, 6 the antitrust laws of the nation's states are also substan tially similar. See ABA Section of Antitrust Law, Antitrust Law Developments 742-43 (4th ed. 1997). Thus, Organized Baseball seems to be more concerned about the possibility that all the states may enforce their laws against it in the same way. However, this Court has rejected such an argument: The evil that appellants perceive in this litiga tion is not that the several States will enact differing regulations, but rather that they will all conclude that divestiture provisions are war ranted. The problem thus is not one of national uniformity. Exxon, 437 U.S. at 128. Consequently, Baseball's Com merce Clause arguments are meritless. HI. BASEBALL ERRONEOUSLY CLAIMS THE CURT FLOOD ACT SUPPORTS ITS POSITION. Baseball erroneously claims that passage of the Curt Flood Act proves Congress's "acquiescence in the exemp tion." Baseball's Opp. Br. at 24. However, it is clear from the legislative history that Baseball actually took the opposite position when it lobbied Congress for passage of the Curt Flood Act: Both the parties [i.e., Major League Baseball, the minor leagues, and the Players' Union]5 and the 5 The term "parties" refers to "M ajor League Baseball," the "N ational Association of Professional Baseball Leagues," {i.e., the "m inor leagues") and the "M ajor League Baseball Players' A ssociation." See Pet. App. at 71. All the parties were very active 7 [Senate Judiciary] Committee agree that Con gress is taking no position on the current state of the law one way or the other. 144 Cong. Rec. S9494-03, *S9496 (July 30, 1998) (remarks of Senator Hatch prior to vote) (Pet. App. 71) (emphasis added). Because Congress, and Baseball itself, took no position on the current scope of the exemption, Senator Hatch rightly noted that the scope of the exemption out side labor relations "depend[s] upon judicial interpreta tion of the law." Id. at *S9497 (Pet. App. 73). Indeed, in a Senate Judiciary Committee Report on a predecessor bill of the Curt Flood Act, the Committee made clear: that by supporting these particular modifica tions of baseball's judicially created antitrust exemption in S. 627, it does not intend to imply that more comprehensive change is not also jus tified - or to imply that the courts should not act decisively themselves to limit further baseball's exemption in appropriate cases. Indeed, a Fed eral court and the highest court of a state have already taken such action. Piazza, 831 F. Supp. 420; Butterworth, 644 So. 2d 1021. S. Rep. No. 104-231, at 15 (1995).6 Thus, it is appropriate for this Court to clarify the scope of Baseball's exemption, if any, from the antitrust laws. lobbying Congress on the Curt Flood Act. See, e.g., Pet. App. at 66-71. 6 See Pet. App. at 65-66 for a discussion of the history of S. 627 and S. 53 ("the Curt Flood A ct"). See also S. Rep. No. 105-118, at 4 (1997) (describing S. 627 as "predecessor" of S. 53). 8 IV. B A S EB A LL'S R ELIA N C E A SSER T IO N S ARE WITHOUT MERIT. Baseball argues that it is entitled to a broad, blanket antitrust exemption based on a "reliance" interest. How ever, if the State's position is correct, Baseball's reliance is in error because Flood limited the exemption to the facts of that case - i.e., only the reserve system is exempt.7 Indeed, it is well-settled that exemptions from the anti trust laws are to be narrowly construed. See Union Labor Life Ins. v. Pireno, 458 U.S. 119, 125 (1982) ("exemptions from the antitrust laws must be construed narrowly"). In any event, the Piazza and Butterworth decisions, and Sen ate Report 104-231, supra, for example, show that there is, and has been, considerable uncertainty regarding the scope of any antitrust exemption for Baseball. Under such circumstances, Baseball can hardly claim reliance on set tled legal doctrine. Interestingly, in the Flood case, after a full evidentiary trial, Baseball alleged reliance with respect to the reserve 7 Similarly, Amici Utah and ten other states note that this Court need not overturn Flood. Rather, the Court can merely clarify that under a proper understanding of stare decisis, the exem ption is limited to the reserve system. U tah's Am ici Br. at 4-5. See also Piazza v. M ajor League Baseball, 831 F. Supp. 420 (E.D. Penn. 1993). Even Baseball admits that a separate and distinct industry, like radio broadcasting of baseball gam es, is not covered by the exemption. Baseball's Opp. Br. at 12. In this case, Baseball's collusive activities involve the separate m arket of baseball stadia. See Stephen F. Ross, M onopoly Sports Leagues, 73 U. Minn. L. Rev. 643, 647 (1989) ("sports leagues and their m ember teams operate in a variety of m arkets". . . . including stadia). Thus, even under Baseball's broad definition of the exem ption, it is unclear, in the absence of a factual record, w hether Baseball's conduct is exempt. 9 system, claiming that the "historical, competitive, and economic realities . . . make the reserve system a neces sity."8 Respondents' Supreme Court Br. in Flood v. Kuhn at 5; see also Amicus CFA Br. at 16-17. However, in the instant case, Baseball makes no specific claim of reliance9 - perhaps because it cannot credibly claim that it is necessary for Baseball to collude and extort subsidies from communities. Finally, in a case involving the role of stare decisis and reliance when reconsidering antitrust precedents, this Court stressed the importance of the "competing interest, well represented in this Court's decisions, in recognizing and adapting to changed circumstances and the lessons of accumulated experience." State Oil v. Khan, 522 U.S. 3, ___/ 118 S. Ct. 275, 284 (1997). Consequently, any alleged reliance interest by Baseball does not supersede the 8 Ironically, just four years after Baseball argued that the reserve system was necessary for the survival of Baseball, a labor arbitrator effectively eliminated the reserve system for m ajor leag u e p la y ers , and C on gress, w ith su p p ort from Baseball, elim inated any antitrust im m unity for the reserve sy ste m by p a ss in g the C u rt F lo od A ct. See M arian n e M cGettigan, The Curt Flood Act: The Players' Perspective, 9 Marq. Sports L.J. 379, 382 (1999). Baseball has thrived without the reserve system. 9 Amicus Florida discusses Baseball's General Counsel's discussion of reliance and concludes that Baseball has no valid reliance argument. See Amicus Florida Br. at 10-11. Additionally, Amicus CFA argues that Baseball would not be harm ed by being fully subject to the antitrust laws because the "rule of reason" allows cooperation on essential league matters. Amicus CFA Br. at 5-9. 10 Court's responsibility to "reconsider its decisions con struing the Sherman Act when the theoretical underpin nings of those decisions are called into question." Id. -----------------♦ ----------- CONCLUSION For the reasons set forth in Petitioner's Brief and the Briefs of Amici, the State of Minnesota requests that its Petition for a Writ of Certiorari be granted. Respectfully submitted, Attorneys' Names Omitted When Printing Sample (Needs to include designated Counsel of Record, Address, and Telephone Number) * Counsel of Record *