Court Denies Motion For Summary Judgment In Dispute Concerning MLB

In a Decision and Order, dated September 6, 2023, in Oneonta Athletic Corporation d/b/a Norwich Sea Unicorns v. Detroit Tigers, Inc. et ano., Index No. 651080/2022, Justice Barry Ostrager denied Defendants’ motion for summary judgment on plaintiff’s sole remaining claim, for tortious interference with contract, arising out of the decision by Major League Baseball to reduce the number of minor league terms from 160 to 120. The Court explained:

Plaintiff Norwich Sea Unicorns allege in the Complaint that Defendants’ decision to proceed with the 120 Plan circumvented the central minor league organization – the National Association of Professional Baseball Leagues founded in 1901– and tortiously induced the minor league clubs to breach Section 19.03 of the National Association Agreement (“the NAA”). Section 19.03 prohibited minor league clubs from entering into any negotiation to become a member of, or in any way cooperating with, “any organization of professional clubs whose existence will in any manner conflict with the letter and spirit of this Agreement, or the interests of any of the clubs operating under it ….” (NYSCEF Doc. No. 114 at p 25).

Defendants primarily argue in their summary judgment motion that, pursuant to the language in Section 19.03, Plaintiff automatically forfeited any right to bring a tortious interference claim under the NAA when Plaintiff itself breached the NAA by, among other things, negotiating with MLB for a spot in the reorganized minor league system under the 120 Plan. Defendants further argue that any damages claimed by Plaintiff are attributable not to Defendants’ conduct but to the automatic expiration of other contracts, such as the Professional Baseball Agreement (“the PBA”), which expired by its terms on September 30, 2020, and ended the affiliation between the minor league teams and their MLB counterparts. But Plaintiff argues in response that the NAA itself had no expiration date and that the collective bargaining benefits provided by the NAA would have supported the continuation of the century-old affiliation system between MLB and the minor league teams had Defendants not tortiously interfered with the rights of the minor league teams under the NAA and induced them to breach the NAA or face their demise.

The Court finds that the competing arguments create multiple issues of fact which can only be resolved at the jury trial scheduled for November 13, 2023. Those issues include, but are not limited to, precisely when Defendants made improper inducements to NAA members and when the various minor league clubs breached the NAA by negotiating or cooperating with competing organizations in violation of Section 19.03. Triable issues of fact also exist as to whether the minor league teams would not have breached the NAA and/or whether the teams would have maintained an affiliation with Defendants had MLB not broken up the National Association and imposed a fixed cap of 120 teams, including minor league teams owned by Major League Baseball teams.

Issues also exist regarding the extent to which Defendants’ conduct was a proximate cause of Plaintiffs’ damages, the quantum of such alleged damages, and whether alleged consequential damages can be established with the requisite level of proof.

Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning tortious interference with contract.