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From Antitrust Law Daily, September 23, 2014

MLB denied leave to immediately appeal antitrust exemption ruling

By Jeffrey May, J.D.

Major League Baseball (MLB) has failed to convince the federal district court in New York City to let the Second Circuit decide the applicability of baseball's antitrust exemption to claims that the league conspired to impose territorial broadcasting restrictions before a “costly and intensely time-consuming trial.” The court denied MLB's motion to certify for immediate appeal an August 8 ruling, rejecting summary judgment in favor of MLB on the ground that the league was shielded from antitrust liability by the baseball exemption (Garber v. Office of the Commissioner of Baseball, September 22, 2014, Scheindlin, S.).

MLB—as well as the National Hockey League, Comcast, and DIRECTV—are defendants in consumer class action antitrust litigation over territorial restrictions placed on telecasts of baseball and hockey games. MLB is an unincorporated association of 30 professional baseball teams, nine of which were named as defendants. Each member team has a home television territory for broadcasting purposes.

The complaining consumers take issue with territorial restrictions that limit consumer access to out-of-market games. In order to watch these out-of-market games, consumers generally need to obtain television or Internet packages. The television packages through providers Comcast and DIRECTV and the Internet packages through the leagues require the purchase of the full slate of out-of-market games, even if a consumer is only interested in viewing the games of one team. In addition, the packages do not show in-market games.

The MLB defendants moved for summary judgment based on the baseball antitrust exemption. The court ruled that the exemption did not extend to the challenged territorial broadcasting restrictions, and MLB moved for leave to file an interlocutory appeal.

Noting that interlocutory appeals are presumptively disfavored, the court explained that this was not an “extraordinary case” where immediate appellate review would be appropriate. In order to grant an immediate appeal under 28 U.S.C. § 1292(b), the underlying order must (1) involve a controlling question of law (2) over which there is substantial ground for difference of opinion, and the moving party must also show that (3) an immediate appeal would materially advance the ultimate termination of the litigation. There was no dispute that the applicability of the baseball exemption was a “controlling question of law.” However, the second and third elements of section 1292(b) were not met, according to the court.

There was no “substantial ground for difference of opinion” simply because “the Second Circuit has not spoken” on the issue. Silence of an appellate court was not enough to satisfy section 1292(b), because, if it were, interlocutory appeals would be the norm, not the exception, the court explained. Moreover, the court rejected the argument that an immediate appeal was appropriate because the court's ruling was “contrary to the rulings of all Courts of Appeals which have reached the issue.”

An immediate appeal would not “materially advance the ultimate termination of the litigation,” the court also ruled. It was possible that an interlocutory appeal would delay the onset of trial. But even if an interlocutory appeal would more efficiently dispose of the claims against the MLB defendants, there were other defendants in the case. The matter was complicated by the relationship between the MLB defendants and the so-called television defendants, who had joined in the motion. The television defendants argued that if the claims against the MLB defendants were dismissed, then the corresponding claims against the television defendants would also have to be dismissed. While this “novel theory of intertwined liability might eventually prevail,” resolution would expend significant judicial resources and could result in “piecemeal” adjudication.

Subject matter jurisdiction. The court also rejected MLB's argument that interlocutory appeal was “especially advisable” because the baseball exemption implicated subject matter jurisdiction. The scope of the baseball exemption was a threshold merits issue. The application of the exemption was a question of law that depended on facts, unlike the issue of subject matter jurisdiction, which concerned a court's power over the type of controversy in general, the court explained.

The case is 12 Civ. 3704 (SAS).

Attorneys: Edward A. Diver (Langer Grogan & Diver, PC) for Fernanda Garber. Bradley I. Ruskin (Proskauer Rose LLP) for Office of the Commissioner of Baseball, Major League Baseball Enterprises Inc. Adrian Fontecilla (Sidley Austin LLP) for MLB Advanced Media LP. Andrew E. Paris (Alston & Bird LLP) for DIRECTV LLC. Arthur J. Burke (Davis Polk & Wardwell LLP) for Comcast Corp.

Companies: Major League Baseball; National Hockey League; DIRECTV, LLC; Comcast Corp.

MainStory: TopStory Antitrust NewYorkNews

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