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State contraction probe stopped

Because of antitrust exemption, Florida attorney general can't demand to see reports on Rays, Marlins.

By STEVE BOUSQUET, Times Tallahassee Deputy Bureau Chief
© St. Petersburg Times
published December 19, 2001

TALLAHASSEE -- Baseball scored a victory over Florida on Tuesday when a federal judge blocked Attorney General Bob Butterworth's attempt to review the finances of the Devil Rays and Marlins as well as plans to eliminate two teams.

U.S. District Judge Robert Hinkle ruled the business of baseball, including plans to contract teams, is exempt from federal antitrust laws and thus is out of reach of state antitrust laws. Hinkle said the U.S. Supreme Court's 1922 decision has been reinforced by several subsequent cases.

"If the antitrust exemption is to be eliminated, it's not to be done by a federal judge but by the Congress," Hinkle said. "It is not the business of a lower court to try to find a way around a decision by the U.S. Supreme Court."

Butterworth issued subpoenas to the Rays, Marlins and commissioner Bud Selig in November in an attempt to learn whether the Florida teams were on the chopping block.

MLB, which zealously protects its antitrust exemption, sued Butterworth in federal court. The injunction sought by the Florida teams and Selig denies access to a multitude of documents, including the minutes of a Nov. 6 meeting at which owners voted to drop two teams before next season.

"We are gratified by the ruling," said Thomas Ostertag, general counsel in the commissioner's office. "We believe the judge's interpretation of the antitrust exemption is correct."

The Rays had no immediate comment.

Hinkle, 50, is believed to be the first judge in the United States to rule that contraction plans are covered by baseball's antitrust exemption. A graduate of Harvard Law School and Florida State University, he was appointed to the bench by President Clinton in 1996 after working at several private Tallahassee firms.

Hinkle announced his decision from the bench after five hours of testimony and arguments. The ruling sent baseball's lawyers home smiling, but it does not necessarily end the Florida fight.

Butterworth's deputy, Richard Doran, said the state might ask a state judge to make the records available based on a state law that bars unfair or deceptive trade practices.

Such a step likely would trigger more litigation. The teams' records would remain confidential under the antitrust law even if the state obtained them, but they would be public if the state obtained them under the deceptive trade statute.

Baseball's lead lawyer, Mary Braza, had asked Hinkle to block any legal action by Butterworth, even in state court. Braza said it would be costly and time-consuming for her clients to respond to state lawsuits.

The judge refused.

"The expense, the harassment, the annoyance of that in itself is irreparable harm," Braza said.

John Newton, who argued the state's case, argued the antitrust exemption covered only certain aspects of baseball's business side.

"A mere investigation of whether or not a violation has occurred is not a violation of the (antitrust) exemption," Newton said. "Every major big business, from Microsoft on down, is hindered by operating in different states with different rules."

In Hinkle's cavernous fifth-floor courtroom, many seats were empty, just as they were for many 2001 home dates at Tropicana Field and Pro Player Stadium north of Miami. Both Florida franchises have struggled to attract fans, but neither is considered a candidate for contraction at the moment.

The owners voted 28-2 last month to fold two teams, but they have not disclosed which were targeted. They are believed to be the Montreal Expos and Minnesota Twins. Ostertag, who testified, confirmed the Expos and Twins cast the votes against contraction. As baseball's general counsel, Ostertag is corporate secretary for the sport and keeps minutes of all owners meetings.

- Times researcher Kitty Bennett contributed to this report.

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