Background

Phase 1 wantlist hit cleared, foundational antitrust doctrine document. Judge Padova's August 1993 ruling is the leading federal-court attempt to narrow the Federal Baseball Club v. National League (1922) antitrust exemption to the reserve clause. The case settled in 1994 for approximately $6 million paid to Piazza and Tirendi, but Padova's doctrinal reading has been cited extensively in subsequent litigation. The Piazza reading is in direct doctrinal conflict with the 9th Circuit's City of San Jose v. MLB (2015) (also in this archive), which expressly rejected Piazza and held that Flood's exemption extends beyond the reserve clause to franchise relocation. The competing readings — Piazza (narrow) vs. San Jose (broad) — remain unresolved at the appellate level. The Curt Flood Act of 1998 (the Senate report for which is also in this archive) was substantively informed by Piazza: the Act codifies that MLB players are subject to antitrust laws (consistent with Piazza's narrow exemption reading) while explicitly preserving the broader exemption for franchise relocation, minor league players, the amateur draft, and the Sports Broadcasting Act (consistent with the broader San Jose-style reading). Vincent M. Piazza is the father of Hall of Fame catcher Mike Piazza; the elder Piazza headed a Pennsylvania-based auto-dealership conglomerate and was a longtime baseball investor. The Tampa Bay franchise the Piazza partnership tried to relocate the Giants to was later awarded as the Devil Rays expansion franchise in 1995, who began play in 1998. Pleadings allege the Ownership Committee's stated 'serious question about some of the people' and 'out-of-state money' framing was code for ethnic discrimination against the Italian-American Pennsylvania investors.

Key provisions

• Holding (1): 'baseball exempt on to federal antitrust laws did not extend beyond player reserve system' (per court syllabus). This is the narrow-reading-of-Federal-Baseball doctrine.
• Holding (2): Investors had no direct claims under Constitution, but had sufficient allegations of 'under color of state law' to state § 1983 civil rights claims (alleging conspiracy with state officials).
• Holding (3): Investors sufficiently alleged relevant market (team franchise market) and standing to state antitrust claims under Sherman Act §§ 1 and 2.
• Holding (4): 'Exemptions from antitrust laws are to be narrowly construed.' (Citing antitrust general principles.)
• Holding (5): Motion to dismiss granted in part (constitutional direct claims) and denied in part (everything else).
• Holding on Federal Baseball: 'I hold that the exemption created by Federal Baseball is inapplicable here because it is limited to baseball's "reserve system."'
• Background: Plaintiffs joined with 4 Florida investors (collectively 'the Investors') in August 1992 to organize Tampa Bay Baseball Club, Ltd. ('the Partnership') to purchase the Giants for $115M and relocate to St. Petersburg's Florida Suncoast Dome. Letter of Intent with Lurie signed August 6, 1992. Partnership Agreement signed August 26, 1992. PTB agreed to contribute $27M (single largest contributor of Partnership capital).
• MLB Ownership Committee process: On September 4, 1992 the Partnership submitted its application. On September 10, 1992 Kuhlmann stated at a press conference that the personal background check had raised 'a serious question in terms of some of the people who were part of that group' and that 'a couple of investors will not be in the group.' Jerry Reinsdorf added that Ownership Committee's concern related to the 'out-of-state' money and that the 'Pennsylvania People' had 'dropped out.' Complaint alleges this was a sham.

Notable provisions

I hold that the exemption created by Federal Baseball is inapplicable here because it is limited to baseball's 'reserve system.'— Piazza v. MLB, 831 F. Supp. 420, 421 (E.D. Pa. 1993)

Major League Baseball's alleged enjoyment of exemption from federal antitrust laws did not make it state actor, such that clubs' alleged efforts to defame investors and otherwise prevent them from acquiring and relocating team would be subject to constitutional restraints and could be basis of direct constitutional claims.— 831 F. Supp. 420, 420 (Headnote 3)

Baseball exemption from antitrust laws is limited to baseball's player reserve system.— 831 F. Supp. 420, 420 (Headnote 12)

Potential investors in professional baseball team, who alleged they were excluded from market for ownership interest in existing baseball team, alleged sufficient facts to take claims out of baseball exemption to antitrust laws, even assuming exemption extended to entire 'business of baseball.'— 831 F. Supp. 420, 421 (Headnote 13)

Further context

Piazza v. Major League Baseball (E.D. Pa. 1993)

The federal court ruling that held baseball's antitrust exemption is limited to the reserve clause. Phase 1 wantlist hit cleared. Now in direct doctrinal conflict with City of San Jose v. MLB (2015, also in archive).

What happened

Vincent M. Piazza and Vincent N. Tirendi (Pennsylvania investors) joined with four Florida partners in August 1992 to purchase the San Francisco Giants from Robert Lurie for $115M and relocate them to St. Petersburg. MLB's Ownership Committee — chaired by Ed Kuhlmann, with Jerry Reinsdorf as a member — blocked the deal, raising "a serious question in terms of some of the people" and noting "out-of-state money." The Pennsylvania investors sued, alleging the rejection was a sham and based on Italian-American ethnic discrimination.

Judge John R. Padova (E.D. Pa.) ruled on the motion to dismiss in August 1993. His holding rejected MLB's broad reading of Federal Baseball / Toolson / Flood: the antitrust exemption is limited to the player reserve system, not the entire "business of baseball."

The case settled in 1994 for approximately $6 million.

Why this matters

Piazza is the operative federal court ruling for the "narrow exemption" reading. It directly conflicts with the 9th Circuit's later San Jose v. MLB (2015) — also in this archive — which expressly rejected Piazza and held the exemption extends to franchise relocation.

The competing readings remain unresolved at the appellate level. The Curt Flood Act of 1998 (also in this archive via the 1997 Senate Report) split the difference: codified the Piazza-style narrow reading for player labor relations, preserved the broader exemption for franchise relocation, minor league players, amateur draft, and SBA.

The Vincent Piazza connection

The elder Piazza is the father of Hall of Fame catcher Mike Piazza — Mets star and 2016 Hall of Fame inductee.

Related documents

• 2015-01-15_caselaw_city-of-san-jose-v-mlb.md — the 9th Circuit's later, doctrinally-conflicting ruling.
• 1922-05-29_caselaw_federal-baseball-club-v-national-league.md — the case Piazza narrowed.
• 1997-10-29_report_curt-flood-act-congressional-report.md — the legislative history of Congress's response.

Related documents

Related documents

Federal Baseball Club v. National League, Flood v. Kuhn, City of San Jose v. Office of the Comm'r of Baseball, Curt Flood Act Senate Report (S. Rept. 105-118)

Source provenance

• Primary source