More stupid lawsuits, ep. 81

Something called the "Job Creators Network" has sued MLB, MLB Commissioner Rob Manfred, the MLBPA, MLBPA Executive Director Tony Clar, and a bunch of John Does, claiming constitutional (equal protection and Dormant Commerce clause) and contract claims over MLB moving the All-Star Game from Atlanta to protest Georgia's voter-suppression laws. Nothing new here; more bad lawyering by bad lawyers using the courts to make political noise. Some thoughts on where this goes wrong.

MLB Under Color:

The § 1983 claim depends on MLB acting under color. The complaint tries to get there two ways, neither of which works.

The first, passing argument, is that MLB is not covered by the antitrust laws, a substantial benefit. Receipt of governmental benefits, disconnected from the challenged conduct, is not sufficient to place a private actor under color. This is not a case in which government gave a private actor a benefit on condition of the private actor doing something constitutionally violative. Quite the opposite. MLB's decision to move the game pissed off some congressional demagogues, who threatened to strip MLB of its antitrust exemption.

Moreover, if the antitrust exemption were sufficient, the alleged benefit comes from the federal government, not the state or local government. MLB therefore would be color of federal law and this would be a Bivens claim (in a new context, so not going anywhere), not a § 1983 claim.

The primary argument is that MLB teams act under color by virtue of playing in publicly owned or publicly financed stadiums; thus MLB, as an association of those teams, acts under color. Two problems. First, while I agree that playing in public stadiums places teams under color for some purposes--namely running those ballparks during games--it does not make them under color for all purposes. The Yankees are perhaps bound by the First Amendment in regulating fans' cheering speech during games at the publicly owned stadium; they are not bound by equal protection in firing a ticket-office employee. So if the teams are not under color for all purposes, MLB is not under cover for all purposes. Second, and more conclusive, a private association of state actors located in multiple states does not act under color because it is not tied to the law of any state. The NCAA does not act under color despite having actual state entities--public universities--from multiple states as members. It follows that MLB, which stands in the same position to teams as the NCAA does to schools, does not act under color.

Diversity Jurisdiction:

This is minor and not outcome-determinative, but the Civ Pro geek in me remains amazed at how often lawyers get diversity wrong.

According to the complaint, the following is true: The JCN is a not-for-profit corporation, incorporated in DC with its PPB in Texas.  MLB is an unincorporated association whose members are the 30 teams; it is a New York entity with its PPB in New York. The MLBPA is the players' union, a New York entity with its PPB in New York. Manfred is a New York citizen and Clark a New Jersey citizen. The complaint does not say so, but I believe the plaintiffs see this as  JCN(TX/DC) v. MLB (NY), MLBPA (NY), Manfred (NY), and Clark (NJ).

But an unincorporated association's state of creation or PPB is irrelevant; what matters is the citizenship of its members. The complaint acknowledges that MLB's members are the 30 teams, all of which are corporations or unincorporated association; if the latter, we need further level(s) of inquiry as to the members/partners of each team and perhaps the members/partners of each member. MLB therefore is not a New York citizen (or not solely a New York citizen); it is a citizen of any state in which a member/partner in any team ownership group is a citizen. We do not know every state, I imagine at least one team has at least one member who is a citizen of Texas or DC. Similarly, a union's state of creation or PPB is irrelevant; it is a citizen of every state in which a union member is a citizen. Again, I imagine at least one current MLB player is a citizen of DC or Texas.

This does not matter to the outcome of the case, because the complaint alleges (and there is) supplemental jurisdiction over the state claims. But I become skeptical of any complaint when the attorney gets the basics so wrong.

Standing

JCN purports to be an association of small businesses injured by MLB moving the game. It asserts associational standing on behalf of its members and organizational standing for the time and money it has spent fighting MLB's actions.

The problem is that the claim seeks primarily damages as a remedy, whereas associational standing works in injunctive actions. One element of the Hunt test for associational standing is that "neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit." Damage are, by definition, individualized to each plaintiff and thus require the participation of each member. The complaint attempts to get around that by asking the court to order that the defendants pay damages into a common fund, from which moneys are distributed to each plaintiff. But that is not how damages are calculated or awarded. I cannot think of a major constitutional case in which an association has been able to pursue damages on behalf of its members.

Remedies

The complaint asks for compensatory damages of at least $ 10 million and punitive damages of at least $ 1 billion, as well as an injunction ordering MLB to move the game back to Atlanta. That injunction is not happening. The punitive damages request is interesting because a punitive-damages ration exceeding 10:1 presumptively violates due process.

The least-stupid contract claim might be promissory estoppel, although that still fails. But even if it worked, the damages on a P/E claim are limited to what was spent in reliance on the promises, not what they would have made had the defendants followed through on their promise. Did businesses spend $ 10 million+ on the expectation of the game coming to Atlanta?

Whither the First Amendment

At its core, the claim here is that by engaging in the First Amendment activity of protesting Georgia election policy through its business decisions, MLB, et al. interfered with the power of Georgia to enact policy and the equal protection rights of those who support those policies. The Complaint spends some time defending Georgia's new laws, as if the propriety (in the plaintiff's views) of the laws lessens the First Amendment rights of those who protest. I do not believe the level of First Amendment protection for expressive activities turns on the "correctness" of the position asserted. That would have some broad implications.