High Court Antitrust Challenge Ends After MLB Settles With Teams

Major League Baseball settled with two teams that sued after they lost their affiliations with the organization, a move that ends a Supreme Court challenge seeking to reverse the professional sport’s historic antitrust exemption.

New York’s Tri-City ValleyCats and Connecticut’s Norwich Sea Unicorns reached an undisclosed settlement with the MLB in their petition to the Supreme Court, as well as in two court cases filed in New York state court. The teams’ Supreme Court petition focused on the MLB’s decision to strip their financial support when it cut its minor league affiliations from 160 to 120. The two related state court cases included claims of interference with a contract.

“The parties were able to resolve the matters without further litigation,” a spokesperson for Weil, Gotshal & Manges LLP said in an emailed statement on Friday. The firm represents the former minor league teams in the Supreme Court challenge.

The settlement squelches an effort backed by several groups and politicians to eliminate MLB’s exemption stemming from a 1922 Supreme Court decision that concluded baseball exhibitions don’t implicate the 1890 Sherman Act, the nation’s comprehensive law on competition.

Two other teams, the Staten Island Yankees and Salem-Keizer Volcanoes, previously resolved their claims with MLB ahead of the Supreme Court challenge.

The Major League Baseball Players Association union, lawmakers, attorneys general from 18 states were among the groups and individuals that filed amici briefs in recent days asking the high court to take up the case and reverse the exemption.

Read More: MLB’s Century-Old Antitrust Immunity Nears High Court Reckoning

MLB didn’t immediately respond to inquiries. In the past, the MLB has argued that the minor league teams were using their case as a “vehicle for reconsidering the antitrust exemption,” and anxious for the court to gloss over their failure to plausibly allege an antitrust violation.

In 2022, the US District Court for the Southern District of New York granted MLB’s motion to dismiss the case, but solely based on the exemption. Weil appealed the case to the Second Circuit, and then to the Supreme Court.

The minor league teams in the Supreme Court case were represented by Weil, Gotshal & Manges LLP. The MLB was represented by Sullivan & Cromwell LLP.

The case is Tri-City Valley Cats Inc. v. The Office of the Commissioner of Baseball, U.S., No. 23-283.