Pitching for Reform: Cangrejeros

Fordham Journal of Corporate & Financial Law Volume 30 Issue 1 Article 3 2025 Pitching for Reform: Cangrejeros' Push to Level the Legal Playing Field by Challenging Baseball's Antitrust Exemption Justin P. Chaljub Fordham University School of Law Follow this and additional works at: https://ir.lawnet.fordham.edu/jcfl Part of the Antitrust and Trade Regulation Commons, Common Law Commons, Constitutional Law Commons, Contracts Commons, Courts Commons, Legal Remedies Commons, Other Law Commons, and the Sports Management Commons Recommended Citation 30 Fordham J. Corp. & Fin. L. 107 (2025). This Note is brought to you for free and open access by FLASH: The Fordham Law Archive of Scholarship and History. It has been accepted for inclusion in Fordham Journal of Corporate & Financial Law by an authorized editor of FLASH: The Fordham Law Archive of Scholarship and History. For more information, please contact . PITCHING FOR REFORM: CANGREJEROS’ PUSH TO LEVEL THE LEGAL PLAYING FIELD BY CHALLENGING BASEBALL’S ANTITRUST EXEMPTION Justin P. Chaljub* ABSTRACT For over one-hundred years, professional baseball has enjoyed an antitrust exemption unique among American major sports leagues, stemming from Supreme Court decisions in Federal Baseball and its progeny. This exemption has significantly influenced the evolution and structure of Major League Baseball (MLB). Despite extensive criticism and challenges for judicial and legislative reform, the exemption persists today. However, new efforts have emerged to comprehensively disrupt this framework. In 2023, Nostalgic Partners was brought and structured to reach the U.S. Supreme Court. Plaintiffs anticipated they would lose at the lower court levels and garnered widespread support for the Court to grant a writ of certiorari and hear the case. Nonetheless, their effort fell one step short after MLB induced settlement at the last moment. Now, Cangrejeros follows in its footsteps by building on several procedural arguments raised in Nostalgic Partners and levying similar group boycott claims. Further, Cangrejeros projects as an improved avenue to revisit arguments for and against the exemption because it is better positioned than prior cases to reach the Supreme Court. That said, this Note makes two arguments. First, upon expected appeal from the First Circuit, the Supreme Court should hear Cangrejeros because it challenges procedural issues critical to the J.D. Candidate, Fordham University School of Law, 2025. Georgetown University, McDonough School of Business, MBA (2022); University of Chicago, BA in Public Policy (2019). To Professor Marc Edelman, for his guidance throughout this journey; to the Fordham Journal of Corporate and Financial Law, for their support and commitment to excellence; and to my friends and family, for their love and encouragement. * 107 108 FORDHAM JOURNAL OF CORPORATE & FINANCIAL LAW [Vol. XXX exemption’s status, is flexible in scope to feasibly address such issues in whole or in part, and is less likely to settle given MLB’s absence as a named party. Second, upon grant of certiorari, the Supreme Court should eliminate the exemption based on the substantive strength of Plaintiffs’ group boycott claims as pled. INTRODUCTION...................................................................................... 108 I. HISTORY AND EVOLUTION OF BASEBALL’S ANTITRUST EXEMPTION ................................................................................... 110 A. Formation of the Exemption .................................................. 110 B. Why the Exemption Persists .................................................. 113 C. Reach and Limits of the Exemption....................................... 116 II. EXEMPTION DISRUPTORS: NOSTALGIC PARTNERS AND CANGREJEROS ............................................................................... 119 A. Similar Facts and Substantive Antitrust Claims .................... 120 B. District Courts’ Dismissals on Procedural Grounds .............. 123 C. Appellate Process as a Pathway to the Supreme Court .......... 125 III. CANGREJEROS: A GRAND SLAM FOR CHALLENGING THE EXEMPTION ................................................................................... 128 A. Comprehensively Challenging the Exemption ...................... 129 B. Rebutting Anticipated Arguments Against Cangrejeros ....... 133 CONCLUSION ......................................................................................... 135 INTRODUCTION Since 1922, 1 professional baseball has enjoyed a unique exemption from antitrust scrutiny 2 that has been widely criticized as antiNonetheless, the competitive and harmful to antitrust policy. 3 1. See Fed. Baseball Club of Balt., Inc. v. Nat’l League of Pro. Baseball Clubs, 259 U.S. 200 (1922). 2. See Samuel A. Alito, Jr., The Origin of the Baseball Antitrust Exemption: Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs, 34 J. SUP. CT. HIST. 183 (2009). 3. See Brief for Petitioner at 11, Nostalgic Partners v. Off. of Comm’r of Baseball, 2023 WL 4072836 (2d Cir. 2023) (No. 22-2859) [hereinafter Brief for Plaintiff-Appellant in Nostalgic Partners (2d Cir. 2023)]; see also Cangrejeros de Santurce Baseball Club, LLC v. Liga de Beisbol Profesional de Puerto Rico, Inc., 680 F. Supp. 3d 107, 110(D.P.R. 2023); Nat’l Collegiate Athletic Ass’n v. Alston, 594 U.S. 69, 94 (2021) (refusing to extend baseball to other sports leagues and describing past decisions as “unrealistic” and “aberrational”) (Kavanaugh, J., dissenting, stating that the NCAA and other sports leagues are not “above the law”); see also Justice John Paul 2025] PITCHING FOR REFORM 109 exemption persists due to judicial apprehension in stare decisis, lack of meaningful of Congressional action, historical reliance by Major League Baseball (MLB) and its affiliates, and progressively protective measures by MLB to stymie reform efforts. That said, new efforts have emerged to disrupt this long-standing framework. In 2023, Nostalgic Partners, L.L.C. v. Office of Commissioner of Baseball 4 gained significant traction towards Supreme Court review. In that case, four former minor league baseball teams sued MLB for conspiring to exclude them and thirty-six other teams5 from the new Professional Development League (the “PDL”) in violation of the Sherman Antitrust Act of 1890 (the “Sherman Act”). 6 Plaintiffs brought the case fully expecting to lose at the lower court levels 7 and gathered widespread support in their subsequent appeal to the Supreme Court. 8 Ultimately, the case fell one step short after MLB induced settlement, likely fearing that the Court would grant certiorari and eliminate the exemption. 9 Now, Cangrejeros de Santurce Baseball Club, L.L.C. v. Liga de Béisbol Profesional de Puerto Rico10 follows in its footsteps and Stevens (Ret.), Address at Sports Lawyers Association, 41st Annual Conference Luncheon (May 15, 2015) (“It simply makes no s (...truncated)