A federal judge from the Southern District of New York has denied a bid by Major League Baseball, its various affiliates, and teams within the league (MLB Defendants) to stay an antitrust action until another an antitrust case that the defendants deemed relevant could be decided.
In so ruling, the court called the strategy of the MLB Defendants an “unrealistic solution.”
The overall case centered on allegations made by a group of subscribers, now plaintiffs, to television and Internet packages for baseball and hockey programming.
The plaintiffs sued the National Hockey League, MLB, various clubs within the leagues, regional sports networks that televise the games, and Comcast and DirecTV, multichannel video programming distributors. They alleged violations of the Sherman Antitrust Act based on defendants’ “agreements to eliminate competition in the distribution of baseball and hockey games over the Internet and television by dividing the live-game video presentation market into exclusive territories, which it claimed are protected by anticompetitive blackouts” and “colluding to sell the ‘out-of-market’ packages only through the League which exploits its illegal monopoly by charging supra-competitive prices.”
Last year, the defendants jointly moved to dismiss the complaints. On December 5, 2012, the court, for the most part, denied that motion, an opinion highlighted in Sports Litigation Alert Vol. 9, Iss. 24.
Comcast and DIRECTV (TV Defendants) subsequently moved on behalf of themselves and their affiliated RSNs to stay the claims of the television subscriber plaintiffs pending the Supreme Court’s ruling in American Express Co. v. Italian Colors Restaurant, which is addressing the enforceability of arbitration clauses barring class arbitration as applied to federal antitrust claims. The MLB Defendants also moved to stay the action, pending the decision in AMEX.
The court was unimpressed by the argument put forth by TV Defendants. While they “may be correct that a reversal in AMEX III could ultimately ‘drastically reduce their liability’ by eliminating certain classes of claims against them, they have offered no evidence that their role in the pretrial proceedings scheduled between now and the likely issuance of a decision by the Supreme Court would be significantly impacted by the outcome in AMEX. The notion that issues of liability in this antitrust case might be resolved before the Supreme Court rules is truly remote.
“The MLB Defendants’ equally unrealistic solution to the TV Defendants’ entanglement in the case is to request a stay of the entire case pending the hypothetical arbitration of two plaintiffs’ claims with two defendants. Their rationale rests on multiple layers of highly optimistic speculation — that the Supreme Court will reverse AMEX, that the TV Plaintiffs will pursue their claims against the TV Defendants in arbitration despite the Second Circuit’s finding that arbitration is prohibitive of just such claims, and finally, that this Court might, in its discretion, stay the entire antitrust case, including that of the Internet Plaintiffs, against the alleged core participants in the agreements — the Leagues themselves — pending the outcome of plaintiffs’ arbitration claims.”
Thomas Laumann et al. v. National Hockey League, et al; S.D.N.Y.; 12 Civ. 1817 (SAS),12 Civ. 3704 (SAS), 2013 U.S. Dist. LEXIS 31978; 2013-1 Trade Cas. (CCH) P78,286; 3/6/13
Attorneys of Record: (for plaintiffs) Kevin M. Costello, Esq., Gary E. Klein, Esq., Kevin R. Costello, Esq., Klein Kavanagh Costello, LLP, Boston, Massachusetts; Edward A. Diver, Esq., Howard I. Langer, Esq., Peter E. Leckman, Esq., Langer Grogan & Diver, P.C., Philadelphia, Pennsylvania; Michael Morris Buchman, Esq., John A. Ioannou, Esq., Pomerantz Haudek Block Grossman & Gross LLP, New York, New York; Alex Schmidt, Esq., Mary Jane Fait, Esq., Wolf Haldenstein Adler Freeman & Herz LLP, New York, New York; Robert LaRocca, Esq., Kohn, Swift & Graf, P.C., Philadelphia, Pennsylvania; J. Douglas Richards, Esq., Jeffrey Dubner, Esq., Cohen, Milstein, Sellers & Toll, PLLC, New York, New York. (for defendant Office of the Commissioner of Baseball, Major League Baseball Enterprises Inc., MLB Advanced Media L.P., MLB Advanced Media, Inc., Athletics Investment Group, LLC, The Baseball Club of Seattle, L.L.P., Chicago White Sox, Ltd., Colorado Rockies Baseball Club, Ltd., The Phillies, Pittsburgh Baseball, Inc., and San Francisco Baseball Associates, L.P.) Bradley I. Ruskin, Esq., Carl Clyde Forbes, Esq., Helene Debra Jaffe, Esq., Jennifer R. Scullion, Esq., Robert Davis Forbes, Esq., Proskauer Rose LLP, New York, New York; Thomas J. Ostertag, Esq., Senior Vice President and General Counsel, Office of the Commissioner of Baseball, New York, New York. (for defendant National Hockey League, NHL Enterprises, L.P., NHL Interactive Cyberenterprises, LLC, Chicago Blackhawk Hockey Team, Inc., Comcast-Spectacor, L.P., Hockey Western New York LLC, Lemieux Group, L.P., Lincoln Hockey LLC, New Jersey Devils LLC, New York Islanders Hockey Club, L.P. and San Jose Sharks, LLC) Shepard Goldfein, Esq., James A. Keyte, Esq., Paul M. Eckles, Esq., Matthew M. Martino, Esq., Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York.
