Major League Baseball’s antitrust exemption is engrossed in a new legal test. Four former minor-league teams including the Staten Island Yankees, Tri-City Valley Cats, Norwich Sea Unicorns, and Salem-Keizer Volcanoes have filed a lawsuit in U.S. District Court on claiming MLB’s commissioner’s office violated the Sherman Act.

As part of the overhauling of minor leagues last year, MLB revoked the affiliate status of 40 teams amongst which are the aggrieved clubs. The 33-page complaint filed by Weil, Gotshal & Manges stated that MLB’s revamp of the minors was a “naked, horizontal agreement to cement MLB’s dominance over all professional baseball.”

MLB has operated as a legalized monopoly since 1922 after receiving its antitrust exemption due to opposition from the Federal League. Therefore, MLB’s antitrust exemption offers immunity against the Sherman Act. The Sherman Act is a piece of legislature that curtails match-fixing companies while harming customers. MLB’s antitrust exemption was granted based on the premise that the league doesn’t constitute interstate commerce — a puzzling claim.

Baseball scribe Craig Calcaterra explained in 2019 that “Organized baseball appealed and the decision was reversed. The Court of Appeals informed that due to the assertion that baseball is not interstate commerce, it was not subject to the Sherman Act. That is, a game is only played in a location; therefore it’s local which makes it not subject to the Sherman Act.”

There have been other instances where the ruling has been challenged including the Curt Flood’s quest for free agency in 1972 but the Supreme Court has since stood by its ruling. However, a section of MLB’s antitrust exemption had to be removed in the ‘90s when then-president Bill Clinton signed the Curt Flood Act of 1998 into law. The Flood Act focused on parts of the exemption that dealt with labour relations, rather than those that dealt with expansion, the minor leaguers or other business matters.