First Circuit Extends Baseball’s Antitrust Exemption Beyond MLB: Cangrejeros de Santurce Baseball Club, LLC v. Liga de Béisbol Profesional de Puerto Rico, Inc.

Introduction

The United States Court of Appeals for the First Circuit has issued a landmark decision in Cangrejeros de Santurce Baseball Club, LLC v. Liga de Béisbol Profesional de Puerto Rico, Inc. (No. 23-1589, decided 21 July 2025). This judgment tackles century-old questions surrounding baseball’s unique antitrust immunity, commonly called the “business of baseball” exemption. Importantly, the First Circuit becomes the first appellate court to apply that immunity to a professional league that is not Major League Baseball (MLB) or one of its direct affiliates.

The case arises out of an acrimonious dispute between Thomas J. Axon—former owner of the Santurce Cangrejeros franchise in Puerto Rico’s winter league—and the League and its other club owners. After internal league processes stripped Axon of his team, he and related LLCs sued in federal court, alleging violations of the Sherman Act, Puerto Rico antitrust and fair-competition statutes, and 42 U.S.C. § 1983. The district court dismissed the federal antitrust claims under the baseball exemption, dismissed the Puerto Rico antitrust/fair-competition counts as pre-empted, found the § 1983 claim barred by res judicata, and declined supplemental jurisdiction over a remaining Puerto Rico tort count. The First Circuit affirms in part and dramatically reverses in part—solidifying a broader reading of the exemption yet reopening significant state-law and civil-rights avenues.

Summary of the Judgment

Antitrust (Sherman Act) Counts: The court affirms dismissal. The exemption covers the Puerto Rico league and the challenged conduct (ousting an owner, seizing a franchise) because those acts are “central” to operating professional baseball.
Puerto Rico Antitrust & Fair-Competition Counts: The court vacates dismissal. Flood v. Kuhn does not automatically pre-empt state/territorial antitrust regulation; the district court must test Commerce-Clause burdens first.
§ 1983 Count: The court reverses dismissal. District court mis-applied repealed P.R. Civil Code § 3343; no valid res judicata bar was shown.
Supplemental Puerto Rico Tort Count: Reinstated because federal jurisdiction now survives.

Detailed Analysis

A. Precedents Cited and Their Influence

Federal Baseball Club of Baltimore v. National League, 259 U.S. 200 (1922) – Originates the exemption, holding professional baseball is not “trade or commerce among the several States.”
Toolson v. New York Yankees, 346 U.S. 356 (1953) – Upholds Federal Baseball on stare decisis grounds; introduces reliance rationale.
Flood v. Kuhn, 407 U.S. 258 (1972) – Calls the exemption “anomalous” yet keeps it, stressing congressional acquiescence and need for national uniformity.
Radovich v. NFL, 352 U.S. 445 (1957) – Refuses to extend the exemption to football; underscores narrowness.
National Collegiate Athletic Ass’n v. Alston, 594 U.S. 69 (2021) – Noted anomaly remains cabined to baseball.
Lower-court cases delimiting what is “central” or “incidental”:
- Right Field Rooftops, LLC v. Chicago Baseball Holdings, 87 F. Supp. 3d 874 (N.D. Ill. 2015)
- Wyckoff v. Office of the Commissioner of Baseball, 211 F. Supp. 3d 615 (S.D.N.Y. 2016)
- Henderson Broadcasting Corp. v. Houston Sports Ass’n, 541 F. Supp. 263 (S.D. Tex. 1982)
- City of San Jose v. Office of the Commissioner of Baseball, 776 F.3d 686 (9th Cir. 2015)
Commerce-Clause comparators: Southern Pacific Co. v. Arizona, 325 U.S. 761 (1945).
Eleventh Circuit analogue: MLB v. Crist, 331 F.3d 1177 (11th Cir. 2003) – Flood’s state-law holding read as broad pre-emption; First Circuit departs.

B. Court’s Legal Reasoning

Step 1 – Does the exemption reach a non-MLB league? • Textual and historical reading of Federal Baseball/Toolson/Flood shows they protect a business activity (“providing public baseball games for profit”) rather than a named entity. • Lack of limiting language to MLB means coverage can extend where the same core activity is undertaken.
Step 2 – Does the specific conduct qualify? • Court adopts a functional “central vs. incidental” test (implicitly from Wyckoff/Rooftops). • Owner expulsion, franchise control, and location decisions directly shape “which players take the field,” therefore are central.
Step 3 – State-law claims: floodgates or commerce burdens? • District court assumed automatic pre-emption; First Circuit says Flood relied on Commerce Clause balancing, not blanket Supremacy‐Clause field pre-emption. • Because Puerto Rico’s league is intraterritorial, interstate-commerce burdens are not self-evident; remand for proper analysis.
Step 4 – Res Judicata (Claim Preclusion): • District court invoked repealed P.R. Civil Code § 3343 (requiring “perfect identity” of parties, causes, things). • New 2020 Code changes not briefed; regardless, parties and causes differed (temporary suspension vs. franchise seizure/constitutional deprivation). • Result: § 1983 claim resurrected.

C. Potential Impact

Broader Exemption Reach: Any U.S./territorial professional baseball league—even independent or foreign-affiliated winter leagues—may now invoke immunity for decisions “central” to fielding teams.
Commerce-Clause Roadmap: State-level antitrust plaintiffs must allege concrete interstate effects; leagues confined to one state receive closer judicial scrutiny.
Circuit Tension with Eleventh Circuit: Crist endorsed blanket pre-emption; First Circuit’s narrower view tees up a possible split inviting Supreme Court resolution.
Res Judicata Clarity in Puerto Rico: Decision spotlights repeal of old § 3343 and signals that federal courts must apply updated Puerto Rico preclusion standards.
Strategic Litigation Considerations:
- Plaintiffs may shift to state unfair-competition theories where leagues operate intrastate.
- Baseball defenders gain a potent, but not unlimited, shield; “incidental” commercial verticals (broadcasts, concessions, merchandise) remain vulnerable.
Legislative Pressure: Congress has yet another reminder that only statutory reform can abolish the century-old aberration.

Complex Concepts Simplified

Sherman Act §§ 1 & 2: Federal law prohibiting (i) conspiracies that restrain trade (Section 1) and (ii) monopolization or attempts to monopolize (Section 2).
“Business of Baseball” Exemption: Judicially created carve-out—unique to baseball—that renders certain conduct immune from federal antitrust scrutiny, originating in Federal Baseball (1922) and sustained on stare decisis grounds.
Central vs. Incidental Conduct: Lower courts distinguish conduct intrinsic to staging professional games (player contracts, team ownership, franchise locations) from collateral revenue streams (broadcasting, concessions). Only the former enjoys the exemption.
Pre-emption vs. Commerce Clause: Pre-emption: Federal law displaces state law under the Supremacy Clause. Commerce Clause: Even without federal legislation, a state law can be invalid if it unduly burdens interstate commerce (“dormant Commerce Clause”).
Res Judicata (Claim Preclusion): Bars re-litigation of claims already adjudicated between identical parties about the same cause. Puerto Rico’s prior § 3343 required “perfect identity,” but it was repealed in 2020.
42 U.S.C. § 1983: Allows suits against persons who, under color of state law, deprive others of constitutional or federal statutory rights.

Conclusion

The First Circuit’s decision in Cangrejeros forges new ground by extending baseball’s antiquated antitrust immunity beyond MLB, yet simultaneously narrows the path for federal pre-emption of state antitrust claims and revives a pivotal civil-rights allegation. Litigants in professional baseball now confront a two-step analysis: (1) Is the challenged act “central” to putting players on the field? If so, the federal Sherman Act likely falls away. (2) Does state regulation impose concrete burdens on interstate commerce? If not, local antitrust remedies may survive. With one stroke, the court both enlarges the shield and sharpens its edges, ensuring that baseball’s special status remains—at least for now—both “anomalous” and hotly contested. Should other circuits disagree or Congress finally act, this decision may be a pivotal waypoint on baseball’s century-long antitrust odyssey.

First Circuit Extends Baseball’s Antitrust Exemption Beyond MLB: A Detailed Commentary on Cangrejeros de Santurce Baseball Club, LLC v. Liga de Béisbol Profesional de Puerto Rico, Inc.