SAMUEL KORNHAUSER, Bar No

Case3:14-cv-05349-JCS Document1 Filed12/05/14 Page1 of 35 1 SAMUEL KORNHAUSER, Esq., California Bar No. 083528 LAW OFFICES OF SAMUEL KORNHAUSER 2 155 Jackson Street, Suite 1807 San Francisco, California 94111 3 Telephone: (415) 981-6281 Facsimile: (415) 981-7616 4 BRIAN DAVID, Esq., Illinois ARDC No. 0582468 5 LAW OFFICES OF BRIAN DAVID 33 North LaSalle Street, Suite 3200 6 Chicago, Illinois 60610 Telephone: (847) 778-7528 7 Facsimile: (312) 346-8469 8 Attorneys for all Plaintiffs, individually and on behalf of all those similarly situated 9 10 11 UNITED STATES DISTRICT COURT 12 NORTHERN DISTRICT OF CALIFORNIA, SAN FRANCISCO DIVISION 13 14 SERGIO MIRANDA, JEFFREY DOMINGUEZ, ) Case No. 3:14-cv-5349 15 JORGE PADILLA, and CIRILO CRUZ, ) Individually and on Behalf of All Those ) 16 Similarly Situated, ) CLASS ACTION ) 17 Plaintiffs, ) ) COMPLAINT FOR VIOLATIONS 18 v. ) OF FEDERAL ANTI TRUST LAWS ) 19 OFFICE OF THE COMMISSIONER OF ) BASEBALL, an unincorporated association ) JURY TRIAL DEMANDED LAW LAW OFFICES 20 doing business as MAJOR LEAGUE ) San Francisco, CA 94111 BASEBALL, ALLAN HUBER “BUD” SELIG; ) 155 Jackson Street, Suite 1807 21 KANSAS CITY ROYALS BASEBALL CORP.; ) SAMUEL KORNHAUSER MIAMI MARLINS, L.P.; SAN FRANCISCO ) 22 BASEBALL ASSOCIATES LLC; BOSTON ) RED SOX BASEBALL CLUB L.P.; ANGELS ) 23 BASEBALL LP; CHICAGO WHITE SOX ) LTD.; ST. LOUIS CARDINALS, LLC; ) 24 COLORADO ROCKIES BASEBALL CLUB, ) LTD.; BASEBALL CLUB OF SEATTLE, LLP; ) 25 THE CINCINNATI REDS, LLC; HOUSTON ) BASEBALL PARTNERS LLC; ATHLETICS ) 26 INVESTMENT GROUP, LLC; ROGERS ) BLUE JAYS BASEBALL PARTNERSHIP; ) 27 CLEVELAND INDIANS BASEBALL CO., ) L.P.; CLEVELAND INDIANS BASEBALL ) 28 CO., INC.; PADRES L.P.; SAN DIEGO ) 2014-12-05 Complaint (Miranda v. OCB) Case3:14-cv-05349-JCS Document1 Filed12/05/14 Page2 of 35 PADRES BASEBALL CLUB, L.P.; ) 1 MINNESOTA TWINS, LLC; WASHINGTON ) NATIONALS BASEBALL CLUB, LLC; ) 2 DETROIT TIGERS, INC.; LOS ANGELES ) DODGERS, LLC; LOS ANGELES ) 3 DODGERS HOLDING CO.; STERLING ) METS L.P.; ATLANTA NATIONAL ) 4 LEAGUE BASEBALL CLUB, INC.; AZPB ) L.P.; BALTIMORE ORIOLES, INC.; ) 5 BALTIMORE ORIOLES, L.P.; THE ) PHILLIES L.P.; PITTSBURGH BASEBALL, ) 6 INC.; PITTSBURGH BASEBALL P’SHIP; ) NEW YORK YANKEES P’SHIP; TAMPA ) 7 BAY RAYS BASEBALL LTD.; RANGERS ) BASEBALL EXPRESS, LLC; RANGERS ) 8 BASEBALL, LLC; CHICAGO BASEBALL ) HOLDINGS, LLC; MILWAUKEE BREWERS ) 9 BASEBALL CLUB, INC.; MILWAUKEE ) BREWERS BASEBALL CLUB, L.P., ) 10 ) Defendants. ) 11 ) 12 13 14 15 16 17 18 19 LAW LAW OFFICES 20 San Francisco, CA 94111 155 Jackson Street, Suite 1807 21 SAMUEL KORNHAUSER 22 23 24 25 26 27 28 2014-12-05 Complaint (Miranda v. OCB) Case3:14-cv-05349-JCS Document1 Filed12/05/14 Page3 of 35 1 TABLE OF CONTENTS 2 I. NATURE AND BACKGROUND OF SUIT ....................................................... 1 3 II. PARTIES ................................................................................................................ 3 4 1. Plaintiffs...................................................................................................... 3 5 2. Defendants .................................................................................................. 4 6 III. CLASS ACTION ALLEGATIONS ..................................................................... 9 7 IV. JURISDICTION AND VENUE ......................................................................... 12 8 A. Federal Jurisdiction ................................................................................. 12 9 B. Venue ........................................................................................................ 12 10 V. FACTUAL ALLEGATIONS ............................................................................. 12 I. The Business of MLB .............................................................................. 12 11 II. Minor Leaguers’ Uniform, Adhesive Contracts ................................... 13 12 III. The Antitrust Exemption for the “Business of Baseball” .................... 20 13 IV. Plaintiffs Have Suffered Antitrust Injury ............................................. 24 14 VI. COUNT ONE ............................................................................................................. 26 15 (Damages for Violation of the Sherman Act, – Monopoly, 15 U.S.C. § 2) ...... 26 16 VII. COUNT TWO .......................................................................................................... 27 17 (Injunctive Relief - Violation of Section 2 of The Sherman Act) .................... 27 18 VIII. COUNT THREE .................................................................................................... 28 19 (Damages -Violation of Section 1 of The Sherman Act) ................................... 28 LAW LAW OFFICES 20 IX. PRAYER FOR RELIEF ........................................................................................... 30 San Francisco, CA 94111 155 Jackson Street, Suite 1807 21 X. DEMAND FOR JURY TRIAL .......................................................................... 32 SAMUEL KORNHAUSER 22 23 24 25 26 27 28 2014-12-05 Complaint (Miranda v. OCB) i Case3:14-cv-05349-JCS Document1 Filed12/05/14 Page4 of 35 1 This class action is brought by Plaintiffs, Sergio Miranda, Jeffrey Dominguez, Jorge 2 Padilla, and Cirilo Cruz, minor league baseball players (“minor leaguers”), on behalf of 3 themselves and the class of minor leaguers they represent, against the defendants, the cartel of 4 30 major league baseball clubs and the Commissioner of Major League Baseball (collectively 5 “MLB”), for violations of the Sherman Act and Clayton Act (“antitrust laws”). 6 Plaintiffs allege as follows: 7 I. NATURE AND BACKGROUND OF SUIT 8 9 1 1. The Defendants are either members of or govern the cartel known as Major 10 League Baseball (“MLB”). 11 2. MLB openly colludes on the working conditions for the development of its chief 12 commodity: minor league professional baseball players (“minor leaguers”). MLB routinely 13 colludes to violate federal antitrust laws. 14 3. In order to monopolize minor leaguers, restrain and depress minor league 15 players’ salaries, the MLB cartel inserted a provision (known as the reserve clause) into players’ 16 contracts that allows teams to retain for seven (7) years the contractual rights to players and 17 restrict their ability to negotiate with other teams for their baseball services, which reserve 18 clause preserves MLB’s minor league system of artificially low salaries and nonexistent 19 contractual mobility. LAW LAW OFFICES 20 4. Unlike major leaguers, minor leaguers have no union or collective bargaining San Francisco, CA 94111 155 Jackson Street, Suite 1807 21 agreement, even though they comprise the overwhelming majority of baseball players employed SAMUEL KORNHAUSER 22 by the Defendants. The Major League Baseball Players’ Association (“MLBPA”) does not 23 represent the interests of minor leaguers. 24 5. Efforts to unionize minor leaguers have been unsuccessful because minor 25 leaguers fear retaliation by the Defendants. Minor leaguers are afraid to challenge the MLB- 26 imposed wage system, for fear it would jeopardize their careers and potential to become major 27 leaguers if they challenged the system. 28 1 The term “Defendants” applies to all defendants named in this Complaint. 2014-12-05 Complaint (Miranda v. OCB) 1 Case3:14-cv-05349-JCS Document1 Filed12/05/14 Page5 of 35 1 6. Minor leaguers are powerless to combat the collusive power of the MLB cartel. 2 MLB continues to actively and openly collude on many aspects of minor leaguers’ working 3 conditions, including, but not limited to, wages, contract terms, and their ability to work for and 4 negotiate with other teams. Major leaguers’ salaries have increased by more than 2,000 percent 5 since 1976 while minor leaguers’ salaries have, on average, increased only 75 percent since that 6 time. Inflation has risen by more than 400 percent over that same time period. 7 7. The federal antitrust laws were enacted to protect competition and prevent 8 conspiracies to restrain competition, including competition for employment, group boycotts, 9 and monopolization. 10 8. Through their collective exercise of monopoly power and restraint of trade in the 11 minor league professional baseball player market, Defendants have eliminated competition and 12 suppressed minor leaguers’ compensation, in violation of sections 1 and 2 of the Sherman Act, 13 15 U.S.C. §§ 1 and 2. Most minor leaguers earn between $3,000 and $7,500 for the entire year, 14 despite routinely working between 50 and 70 hours per week during the roughly five-month 15 championship season. They receive no overtime pay, and instead, routinely receive less than 16 minimum wage during the championship season. 17 9. The Defendants have conspired to pay no wages at all for significant periods of 18 minor leaguers’ work. The Defendants do not pay minor leaguers their salaries during spring 19 training, even though the Defendants require minor leaguers to often work over fifty hours per LAW LAW OFFICES 20 week during spring training. Similarly, the Defendants do not pay salaries during other training San Francisco, CA 94111 155 Jackson Street, Suite 1807 21 periods such as instructional leagues and winter training. 2 SAMUEL KORNHAUSER 22 10. This suit seeks to recoup the damages sustained by minor leaguers as a result of 23 MLB’s violations of the antitrust laws, 15 U.S.C. §§ 1, 2, and 15. It seeks to recover damages 24 through an international class action on behalf of minor league professional

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