By Dr. Robert J. Romano, JD, LL.M, Senior Writer, St. John’s University
On June 27, 2023, the U.S. District Court for the District of Puerto Rico dismissed the lawsuit brought by the former owner of the Cangrejeros de Santurce Baseball Club, Tom Axon, wherein he alleged that the Puerto Rican Winter Baseball League (Liga de Béisbol Professional de P.R., Inc) and San Juan Mayor Miguel Romero (together with a number of other co-conspirators) colluded in having him removed as the head of the Cangrejeros franchise.
In its decision, the U.S. District Court acknowledge that, although challenged, no federal court has ever expressly drawn a distinction as to the applicability of the antitrust exemption afforded Major League Baseball by the U.S. Supreme Court in its infamous Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs decision to other professional baseball leagues that are non-MLB or its minor league affiliates. Therefore, the Court, in relying on the expressed wording of two cases brought subsequently to Federal Baseball – Toolson v. New York Yankees, Inc. and Curt Flood v. Bowie Kuhn – noted that the precise wording in Toolson: “[T]he business of providing public baseball games for profit between clubs of professional baseball players was not within the scope of the federal antitrust law,” and Flood: “The longstanding exemption of professional baseball from antitrust laws” should be interpreted to mean that the antitrust exemption applies to the game of professional baseball in its totality.
As a result, the U.S. District Court held that it lacks jurisdiction over the subject matter because all of professional baseball, not just MLB, has the benefit of the antitrust exemption afforded by the U.S. Supreme Court in Federal Baseball.
On November 3, 2023, Cangrejeros appealed the U.S. District Court’s decision to the U.S. Court of Appeals for the First Circuit on the theory that the lower court’s “unprecedented expansion” of the “aberrational exemption” announced by the Supreme Court in its Federal Baseball decision in 1922 requires reversal. In addition, Cangrejeros asserts that the “district court compounded its error” by dismissing the remainder of the non-antitrust claims because the court “misapplied controlling law and misconstrued the undisputed facts.”
Jeffrey Kessler, the attorney representing Cangrejeros on its appeal, stated, “We strongly believe the district court erred in its decision to dismiss this case, and we look forward to having our arguments heard by the First Circuit. Our clients remain undeterred in their quest to bring positive change to the Puerto Rico Winter Baseball League. After prevailing in this action, our clients will seek recovery of treble damages and attorneys’ fees against the defendants in our case. Axon will also seek the recovery of his investor-operating rights in the Cangrejeros franchise so he can compete to bring better players, stadium facilities, and other improvements to the League for the benefit of baseball fans throughout Puerto Rico.”
The Cangrejeros franchise was founded in 1939 and is one of the most storied in the history of Puerto Rican baseball. Its notoriety comes from having won 16 league championships and 5 Caribbean Series, together with the fact that it has produced many prominent players, including Hall of Famers Roberto Clemente, Willie Mays, Orlando Cepeda, Frank Robinson, Reggie Jackson, Robin Yount, and Satchel Paige. When Tom Axon took over the franchise as its investor-operator in October of 2019 (becoming the sole owner in February 2022), he wanted to restore the team’s glory and offered to invest $2 million to help renovate the team’s home stadium. These efforts, however, were (allegedly) opposed by Liga de Béisbol, as well the Mayor of San Juan. Mr. Axon claims that such opposition was an illegal “group boycott” that ultimately led to an “unlawful seizure ofhis legal interest in the Cangrejeros Franchise”, which was subsequently sold to one of the other named defendants, Impulse Sports Entertainment Corporation.”
