MLB Sued by Home Depot Co-Founder’s Business Group Over All-Star Move

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A Washington, D.C.-based nonprofit backed by Home Depot co-founder Bernie Marcus sued Major League Baseball and the Major League Baseball Players Association on Monday. The Job Creators Network demands an injunction to “immediately restore the 2021 Game to Truist Park in Atlanta.” It also seeks a jury award of at least $100 million in compensatory damages and an additional $1 billion in punitive damages.

JCN, which advocates against government policies “getting in the way of the economic freedom that helped make this country prosperous,” filed the federal complaint in the Southern District of New York. The nonprofit maintains that MLB and MLBPA violated the U.S. Constitution and engaged in unlawful interference by relocating the game to Denver after Georgia adopted a controversial voting law. JCN is represented by Howard Kleinhendler, a New York attorney who performed legal work on behalf of Donald Trump supporters’ efforts to challenge the 2020 presidential election.

The complaint centers on what it calculates as a $100 million loss for Atlanta. “Businesses from mom-and-pop restaurants and bars to national hotel chains,” the complaint asserts, “prepare years and months in advance for the event. Tables are reserved, hotel rooms are booked, events are planned, people are hired.” The complaint also refers to losses suffered by cities, which it says relies on expected tax revenue. Various organizations and people would have benefited.

The complaint contains seven claims. One refers to the Ku Klux Klan Act, a law from 1871 that makes conspiracies among private parties illegal when they deprive citizens of civil rights. Here, JCN contends that MLB and MLBPA “plotted, coordinated, and executed a common plan and conspiracy to cancel the All-Star Game in Atlanta with the intent to injure and deprive residents and businesses of Atlanta, Georgia of their Constitutional rights.” JCN suggests the relocation was racially insensitive, given that Atlanta has a much higher black population than Denver (51% to 6%, according to the complaint) and that “there are roughly 7.5 times more black-owned small businesses in Georgia than Colorado.”

JCN also maintains that MLB and MLBPA engaged in “outrageous” and “dishonest” conduct to deprive Georgia citizens of Constitutional safeguards. That point, JCN contends, reflects the “punitive impact on employment” caused by the game’s relocation.

Further, JCN charges that MLB and MLPBA unlawfully interfered with contracts that were predicated on the playing of the game. Hotel and restaurant reservations, as well as “a host of small business services and performance contracts,” have been impacted. MLB and MLBPA are accused of “maliciously and illegally cutting off” the conditions necessary for these contracts to be fulfilled. The complaint also describes interference in the form of alleged MLB intimidation. Businesses were supposedly shunned as a result of associating with the state legislature or Governor Brian Kemp.

JCN’s complaint also asserts that MLB is a “state actor,” meaning an entity that acts with such a pervasive connection to the government that it is bound by Constitutional requirements. To support this assertion, JCN cites state and local financing of ballparks as well as MLB’s partial exemption from federal antitrust laws.

In the coming weeks, MLB and MLBPA will answer JCN’s complaint and deny the claims. They will also seek a dismissal of the complaint by the presiding judge, Valerie Caproni. Expect them to raise several arguments.

First, MLB will likely stress it is not a state actor. MLB is a private association of privately owned teams. Through the league and commissioner’s office, the teams collectively negotiates wage and workplace policies with MLBPA, a union of player-employees whose employers are private. While some teams have received public assistance connected to the building of ballparks and surrounding infrastructure and roadwork projects, MLB will insist such assistance doesn’t morph MLB into an arm of the government.

MLB could also portray JNC’s antitrust exemption reference as a red herring. The exemption was originally created through a judicial interpretation of interstate commerce. It was not a tradeoff in exchange for state actor status.

Second, MLB and MLBPA officials enjoy First Amendment rights. If they wish to speak out against a particular law, it is within their power to do so.

Third, MLB and MLBPA will argue that they, as private businesses, can make decisions as they see fit. The league and players’ association run what is ultimately a for-profit, entertainment product. If MLB and MLBPA seek to pressure sponsors, they can do so. If such pressure amounts to unlawful conduct, those sponsors can sue. They haven’t.

Fourth, MLB and MLBPA will likely contend that JCN lacks standing to sue on behalf of businesses and employees impacted by the game’s relocation. JCN’s complaint cites a direct loss of $1.6 million. This was purportedly attributable to JCN having to “divert resources to address the grave harm to its Atlanta-area members and incurred expenses, which include leasing signs in New York’s Times Square and advertising in The New York Times” and “divert[ing] personnel from its fundraising efforts resulting in lower receipts.” Other alleged harms and damages appear to be mainly linked to JCN’s “members,” employees, taxpayers and government entities. MLB and MLBPA could argue that to the extent that other parties wish to claim damages, they ought to be the ones suing.

Fifth, MLB and MLBPA will probably maintain the alleged damages are highly speculative and could be linked to various factors, including the pandemic.

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