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Butterworth v. NAT. BASEBALL CLUBS

Supreme Court of Florida
1994 WL 540697, 644 So.2d 1021 (1994)
ELI5:

Rule of Law:

The federal antitrust exemption for professional baseball is limited strictly to the reserve system regarding player contracts and does not extend to business decisions concerning the sale and relocation of baseball franchises.


Facts:

  • A group of investors attempted to purchase the San Francisco Giants Major League Baseball franchise with the intention of relocating the team to Tampa Bay, Florida.
  • The existing baseball owners voted to reject the approval of the sale to the Tampa Bay investors.
  • Subsequently, the owner of the Giants signed a contract to sell the franchise to a different group of investors committed to keeping the team in San Francisco.
  • Suspecting a combination or conspiracy in restraint of trade regarding the sale, Florida Attorney General Robert Butterworth issued antitrust civil investigative demands (CIDs) to the National League.
  • The CIDs required the League to produce documents and information regarding the sale and purchase of the franchise.

Procedural Posture:

  • The National League petitioned the Circuit Court of the Ninth Judicial Circuit to set aside the Attorney General's civil investigative demands.
  • The Attorney General filed a cross-motion in the Circuit Court to compel compliance with the demands.
  • The Circuit Court issued an order quashing the investigative demands, ruling that franchise decisions fall within the antitrust exemption.
  • The Attorney General appealed the order to the Fifth District Court of Appeal.
  • The Fifth District Court of Appeal affirmed the Circuit Court's order but certified the question to the Supreme Court of Florida as one of great public importance.

Locked

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Issue:

Does the antitrust exemption for professional baseball recognized by the United States Supreme Court extend to decisions regarding the sale and relocation of baseball franchises?


Opinions:

Majority - Justice Harding

No, the antitrust exemption does not protect franchise sale and location decisions. The Court reasoned that the Supreme Court's original basis for the exemption in 'Federal Baseball'—that baseball was not interstate commerce—was explicitly rejected in the later 'Flood v. Kuhn' decision. Adopting the reasoning of the federal district court in 'Piazza,' the Court concluded that because the legal foundation for the exemption had been removed, the exemption survives only through 'stare decisis' and must be strictly limited to the specific facts upheld by the Supreme Court: the player reserve system. Therefore, the exemption does not apply to the 'business of baseball' broadly.


Concurring - Justice Overton

Yes, in result, as the exemption must be strictly construed. Justice Overton argued that judicially created exemptions grant special benefits unavailable to others and should be interpreted narrowly. He noted that while the distinction between baseball and other professional sports (which are not exempt) defies legal logic, the Court must follow the 'Piazza' analysis limiting the exemption until the U.S. Supreme Court rules otherwise.


Dissenting - Senior Justice McDonald

Yes, the exemption should apply because franchise location is central to the business. The dissent argued that the exemption covers the 'business of baseball' generally, not just player contracts. Justice McDonald reasoned that decisions concerning league structure and where teams play are fundamental to the unique needs of the sport and clearly fall within the ambit of the established antitrust exemption.



Analysis:

This decision significantly narrows the scope of Major League Baseball's historic antitrust exemption within the jurisdiction of Florida. By aligning with the minority federal view (the 'Piazza' standard), the Florida Supreme Court established that business activities outside of player contracts—specifically franchise relocation—are subject to state antitrust scrutiny. This ruling exposes professional baseball to potential liability and investigation regarding ownership transfers and team movement, highlighting the conflict between the antiquated 'Federal Baseball' precedent and modern commercial realities.

G

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Loaded: Butterworth v. NAT. BASEBALL CLUBS (1994)

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