FILED 

 U.S. COURT OF APPEALS

 ELEVENTH CIRCUIT 

 MAY 27, 2003 

 THOMAS K. KAHN 

 CLERK

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 02-10333

________________________

D. C. Docket No. 01-00511-CV-4-RH

MAJOR LEAGUE BASEBALL, 

ALLAN H. SELIG, 

TAMPA BAY DEVIL RAYS LTD, 

FLORIDA MARLINS BASEBALL CLUB LLC, 

Plaintiffs-Appellees, 

versus 

CHARLIE CRIST, 

Defendant-Appellant. 

________________________

Appeal from the United States District Court

for the Northern District of Florida

_________________________

(May 27, 2003)

Before TJOFLAT and BLACK, Circuit Judges, and GOLDBERG*, Judge.

_______________________________________

*Honorable Richard W. Goldberg, Judge, United States Court of International Trade, sitting by

designation. 
1The exemption has been crystalized by three Supreme Court decisions. See Fed.

Baseball Club of Baltimore, Inc. v. Nat’l League of Prof’l Baseball Clubs, 259 U.S. 200, 42 S.

Ct. 465, 66 L. Ed. 898 (1922); Toolson v. New York Yankees, Inc., 346 U.S. 356, 74 S. Ct. 78,

98 L. Ed. 64 (1953); Flood v. Kuhn, 407 U.S. 258, 92 S. Ct. 2099, 32 L. Ed. 2d 728 (1972).

2See part IV, infra.

3See Flood, 407 U.S. at 282, 92 S. Ct. at 2112 (stating that “the aberration is an

established one”); Id. at 269, 92 S. Ct. at 2105 (“We granted certiorari in order to look once

again at this troublesome and unusual situation.”).

4The Fourth Amendment, made applicable to the states by the Fourteenth Amendment, 

see Mapp v. Ohio, 367 U.S. 643, 81 S. Ct. 1684, 6 L. Ed. 2d 1081 (1961), guarantees “[t]he right

of the people to be secure in their persons, houses, papers, and effects, against unreasonable

searches and seizures.” For convenience, we omit reference to the Fourteenth Amendment. 

2

TJOFLAT, Circuit Judge:

For better or worse, professional baseball has long enjoyed an exemption

from the antitrust laws.1

 The scope of this exemption – a judge-made rule

premised upon dubious rationales2 and labeled an “aberration” by the Supreme

Court3 – has been the subject of extensive litigation over the years. In this case, we

are called upon to address two key issues: (1) the effect of the federal rule upon

state antitrust law and (2) whether the exemption extends beyond antitrust

prosecutions into the realm of mere investigations. With regard to the first issue,

we hold that the federal exemption preempts state antitrust law. As for the second

issue, we hold that the Florida Attorney General cannot proceed with the

investigation in this case. This holding is based upon the Fourth Amendment4 and

state law rather than the antitrust exemption. In this vein, our analysis differs
3

significantly from that of the district court, although we ultimately affirm its

decision.

I. 

A. 

Major League Baseball (“MLB”) is an unincorporated association of thirty

major league baseball clubs. On November 6, 2001, a supermajority of the clubs

voted in favor of eliminating two teams from the league. The Florida Marlins and

the Tampa Bay Devil Rays voted in favor of contraction. The former Attorney

General of Florida, Robert Butterworth, is a fan of baseball, but not of MLB’s

contraction policy. According to one newspaper, Butterworth proclaimed that

“[i]t’s not going to be easy for baseball to leave the state of Florida . . . . We

finally got a team in Tampa Bay, and we’re going to do all we can to keep it.” See

Joe Follick, State Starts Battle Over Contraction, The Tampa Tribune, Nov. 14,

2001. Similarly, Butterworth is reported to have said, “I’m out here to do whatever

I can do to keep [baseball] in Florida if at all possible.” See Lesley Clark & Clark

Spencer, Baseball Cutback Plan Challenged, The Miami Herald, Nov. 25, 2001. 

Making good on his promise, the Attorney General issued several civil

investigative demands (“CIDs”) to Major League Baseball, Commissioner Allan H.
4

Selig, the Tampa Bay Devil Rays, Ltd., and the Florida Marlins Baseball Club,

LLC – all of whom are plaintiffs in this case. The CIDs were issued pursuant to

the Attorney General’s authority under Florida’santitrust statute, Fla. Stat. §
5The pertinent part of section 542.28 states as follows:

542.28 Civil investigative demand.— 

(1) Whenever the Attorney General . . . has reason to believe that any

person may be in possession, custody, or control of any documentary material, or

may have any information, which documentary material or information is relevant

to a civil antitrust investigation authorized by s. 542.27(3), the Attorney General

or such state attorney may, prior to the institution of a civil or criminal proceeding

thereon, issue in writing and cause to be served upon such person a civil

investigative demand . . . .

* * *

(3) No such demand shall require the production of any documentary

material, the submission of any answers to written interrogatories, or the giving of

any oral testimony if such material, answers, or testimony would be protected

from disclosure under:

(a) The standards applicable to subpoenas or subpoenas duces tecum

issued by a court of this state in aid of a grand jury investigation; or

(b) The standards applicable to a discovery request under the Florida

Rules of Civil Procedure, to the extent that the application of such standards to

any such demand is appropriate and consistent with the provisions and purposes

of this chapter.

* * *

(5) Within 30 days after the service of an investigative demand upon any

person or at any time before the return date specified therein, whichever period is

longer, the person served may file in the circuit court . . . a petition for an order of

the court modifying or setting aside the demand . . . .

We know that the CIDs were based solely upon the Attorney General’s authority to

investigate antitrust violations for several reasons. First, each CID said on its face that it was

“issued pursuant to the Florida Antitrust Act of 1980, Section 542.28, Florida Statutes.” No

other authority was identified for their issuance. Second, the stated reason for issuing the CIDs,

as noted on the face of the CIDs, was “to determine whether there is, has been or may be a

violation of . . . the [state or federal antitrust laws] . . . by conduct, activities, or proposed action

of the following nature: possible contracts, combinations, or conspiracies in restraint of trade, or

monopolization, attempted monopolization, or combinations or conspiracies to monopolize trade

or commerce, relating to the proposed contraction and/or relocation of the Tampa Bay Devil

Rays and/or the Florida Marlins.” Third, the Attorney General acknowledged before this court

that the CIDs’ only purpose was to investigate a possible antitrust violation arising out of the

contraction agreement. When asked at oral argument whether the CIDs would have issued but

for the threatened contraction, the Attorney General answered in the negative.

5

542.28.5

 The CIDs were broad in scope, requiring that each recipient answer
6For example, the plaintiffs were asked to identify all meetings, agreements, and

communications relating to contraction of the two Florida teams; describe the process by which

Major League Baseball attempts to obtain new stadia; detail the balance sheet for the two Florida

clubs; discuss alternatives to contraction; and identify how and why club owners voted on the

question of contraction. 

7The Attorney General requested the production of organizational charts; studies,

research, reports, and recommendations relating to contraction; bylaws, constitutions, and rules

that govern Major League Baseball; notes and documents concerning the contraction meeting;

profit and loss statements; revenue sharing agreements; and ownership applications and

documents assessing the anticipated viability of the Florida clubs.

8See note 5, supra.

6

several interrogatories6

 and produce voluminous documents. 7

The recipients of the CIDs had several options available, but only one option

could yield the desired result. The most obvious option would have been to

comply with the terms of the CIDs. But this option was unattractive because the

CIDs were burdensome, and the recipients believed that the federal exemption

gave them a “federal right” to be free not only from antitrust prosecution, but also

from this investigation. Second, the recipients of the CIDs could have filed suit in

state court pursuant to Fla. Stat. § 542.28(3)-(5)8

 under the theory that since the

business of baseball is immune from antitrust prosecution, the Attorney General’s

investigation is baseless and therefore flunks the “grand jury” and “Florida Rules

of Civil Procedure” tests established by subsections (3)(a) and (3)(b), respectively. 

This option was similarly unattractive because Commissioner Selig, MLB, and the

two Florida clubs would have found it impossible to convince a Florida trial court
9

In Flood, 407 U.S. at 260 n.1, 92 S. Ct. at 2100 n.1, Supreme Court described the reserve

system as follows:

The reserve system, publicly introduced into baseball contracts in 1887 . .

. centers in the uniformity of player contracts; the confinement of the player to the

club that has him under the contract; the assignability of the player’s contract; and

the ability of the club annually to renew the contract unilaterally, subject to a

stated salary minimum.

10The Florida Supreme Court’s holding has scant support in the case law; the vast

majority of lower courts have held that the exemption created by the U.S. Supreme Court

extends more broadly to the “business of baseball.” Some of these cases were cited by the

district court. See Major League Baseball v. Butterworth, 181 F.Supp. 2d. 1316, 1322 n.4 (N.D.

Fla. 2001). Lest there be any doubt about the matter, the district court forcefully destroyed the

notion that the antitrust exemption should be narrowly cabined to the reserve system. Id. at

1322-1332. Given the persuasiveness of the district court’s reasoning, in conjunction with the

fact that the Attorney General no longer argues that the antitrust exemption should be so

narrowly construed, we see no need to expound upon the matter.

7

to adopt the first premise of the argument – namely, that the “business of baseball”

is immune from antitrust prosecution. This is because the Supreme Court of

Florida held in an earlier decision that the antitrust exemption established by

federal law extends only to the reserve system9 rather than broadly exempting the

“business of baseball.” See Butterworth v. Nat’l League of Prof’l Baseball Clubs,

644 So.2d 1021 (Fla. 1994).10 This left option three: an action in federal court, the

present lawsuit.

B.

The plaintiffs’ complaint is based upon two theories. Under the first theory,

the plaintiffs contend that (a) there is a “federal right” that exempts “the business

of baseball” as a proper subject of an antitrust enforcement suit and (b) this federal
11See Griswold v. Connecticut, 381 U.S. 479, 484, 85 S. Ct. 1678, 1681, 14 L. Ed. 2d 510

(1965).

12The plaintiffs claim that state regulation of baseball via antitrust litigation would

inevitably entail extensive extraterritorial effects and impose a heavy burden on interstate

commerce. Therefore, the plaintiffs contend that courts have erected a rare per se rule under the

Commerce Clause that, rather than balancing the burden on interstate commerce with legitimate

state interests, automatically precludes the application of state antitrust laws to the business of

baseball.

8

right extends to administrative investigations. We call this the “penumbra” theory

because, like Justice Douglas’s theory of the Bill of Rights, 11 the claim posits that a

core federal right (i.e., exemption from antitrust prosecution) has a shadow which

extends the right to encompasses much more (i.e., an exemption from antitrust

investigation). Having established this broad federal right, the plaintiffs argue that

this right precludes the Attorney General’s investigation. This is so even if the

state investigation is premised solely upon state antitrust law, because state

antitrust law, to the extent that it is applied to the business of baseball, is

preempted by federal law and violates the Commerce Clause.12

 

The plaintiffs also invoke another model. Like the penumbra theory, the

second model continues to argue that federal law exempts the business of baseball

from antitrust regulation, and that the Supremacy Clause and the Commerce Clause

preclude the application of state antitrust law to the extent that state law is

inconsistent with federal policy. Unlike the penumbra theory, however, the second

theory does not contend that an exemption from prosecution necessarily includes
13See note 5, supra.

14The Fourth Amendment, which protects against unreasonable searches and seizures, has

been held to limit the scope of administrative subpoenas. See Okla. Press Publ’g Co. v. Walling,

327 U.S. 186, 208-11, 66 S. Ct. 494, 505-07, 90 L. Ed. 614 (1946). See also Fed. Trade

Comm’n v. Am. Tobacco Co., 264 U.S. 298, 306, 44 S. Ct. 336, 337, 68 L. Ed. 696 (1924) (“It is

contrary to the first principles of justice to allow a search through all the respondents’ records,

relevant or irrelevant, in the hope that something will turn up.”).

15Section 1983 provides that “[e]very person who, under color of [state law] subjects . . .

any citizen of the United States . . . to the deprivation of any rights . . . secured by the

Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or

other proper proceeding for redress. . . .”

16See 28 U.S.C. § 1331.

17See 28 U.S.C. § 1367.

9

an exemption from investigation. Rather, law external to federal antitrust doctrine

precludes the Attorney General’s investigation. Since the Attorney General could

not possibly bring a suit on the grounds that contraction constitutes anticompetitive

behavior in violation of federal or state antitrust laws, any investigation must be

premised on the notion that the Attorney General is free to investigate perfectly

legal activity. The plaintiffs allege that this premise is incorrect in light of Florida

law13 and the Fourth Amendment,14 which prohibit baseless “fishing expeditions.” 

Invoking both theories, the plaintiffs seek declaratory and injunctive relief

under 42 U.S.C. § 1983,15 in addition to an order setting aside the CIDs pursuant to

Fla. Stat. § 542.28(3). The district court could have properly exercised federal

question jurisdiction16 over the section 1983 claims, and it could have exercised its

supplemental jurisdiction17 over the claims arising under Florida law.
10

The district court granted much of the requested relief, holding that the

antitrust exemption covers the business of baseball and that state antitrust laws do

not apply to the proposed contraction. The district court further held that “the

Attorney General had no authority to issue antitrust CIDs to investigate the

proposed contraction of Major League Baseball.” Major League Baseball, 181 F.

Supp. 2d at 1335. The legal basis for the latter conclusion is unclear, because no

authority was cited by the district court. However, we have two clues that lead us

to suspect that the court adopted the penumbra theory. First, the court’s final order

completely ignored the plaintiffs’ claims based on Fla. Stat. § 542.28(3) and made

no mention of the Fourth Amendment. Second, the final order declared that “the

federal and state antitrust laws do not apply to the proposed contraction of Major

League Baseball from 30 to 28 and do not authorize investigation of that proposed

contraction by the Attorney General.” That is, the district court appears to have

believed that the right to be exempt from an antitrust investigation inherently flows

from the exemption itself. 

As we discuss below, we believe that the district court made an analytical

mistake and that the court should have considered the plaintiffs’ claims based upon

the Fourth Amendment and Fla. Stat. § 542.28(3). But the court’s instincts were

correct: the law prohibits baseless “fishing expeditions,” and so an exemption from
11

prosecution necessarily would have required the district court to prohibit the

Attorney General’s investigation. We therefore affirm the court’s judgment in

favor of the plaintiffs.

C. 

We ordinarily review a district court’s decision to grant or deny an

injunction for clear abuse of discretion. See United States v. Gilbert, 244 F.3d 888,

908 (11th Cir. 2001). Underlying questions of law, however, are reviewed de

novo. See United States v. Pruitt, 174 F.3d 1215, 1219 (11th Cir. 1999) (“A

district court by definition abuses its discretion when it makes an error of law.”)

(citation omitted); Manning ex rel. Manning v. School Bd. of Hillsborough

County, Fla., 244 F.3d 927, 940 (11th Cir. 2001). The decisions of the district

court that the Attorney General challenges in this appeal were all reached as a

matter of law. Accordingly, de novo review is appropriate. 

II. 

A. 

The “business of baseball” is exempt from the federal antitrust laws. See

Fed. Baseball Club of Baltimore, Inc. v. Nat’l League of Prof’l Baseball Clubs, 259
12

U.S. 200, 42 S. Ct. 465, 66 L. Ed. 898 (1922); Toolson v. New York Yankees, Inc.,

346 U.S. 356, 74 S. Ct. 78, 98 L. Ed. 64 (1953); Flood v. Kuhn, 407 U.S. 258, 92

S. Ct. 2099, 32 L. Ed. 2d 728 (1972); Prof’l Baseball Schools and Clubs, Inc. v.

Kuhn, 693 F.2d 1085 (11th Cir. 1982). The district court persuasively established

this fact, and the Attorney General no longer contends that the federal exemption

extends only to the player reserve system. Instead, the Attorney General argues

that the exemption has limits. Specifically, the Attorney General contends that the

exemption might not be triggered if the facts established by the impending

investigation show that the plaintiffs engaged in non-exempt conduct.

The Attorney General’s position is no doubt correct, but what conduct could

possibly be non-exempt? It is true that the antitrust exemption has not been held to

immunize the dealings between professional baseball clubs and third parties. This

case, however, does not involve third parties. Rather, the issue of contraction

concerns a matter that is central to baseball’s league structure – specifically, the

number of clubs that may participate in league play. We agree that the decision to

contract is obviously part of the “business of baseball”; the number of clubs, and

their organization into leagues for the purpose of playing scheduled games, are

basic elements of the production of major league baseball games. Moreover, the

number of clubs necessarily affects the number of clubs sharing in national
13

revenues. As the district court stated, “It is difficult to conceive of a decision more

integral to the business of major league baseball than the number of clubs that will

be allowed to compete.” Major League Baseball v. Butterworth, 181 F. Supp.2d

1316, 1332 (N.D. Fla. 2001). When the applicability of baseball’s exemption is so

apparent, no factual development is necessary. See Prof’l Baseball Schools, 693

F.2d at 1085-86 (affirming, as a matter of law, a motion to dismiss where the

dismissal was based upon an application of the exemption to antitrust challenges to

a minor league franchise location system and game scheduling rules).

But what if club owners agreed not to eliminate the two clubs slated for

elimination in the event that a locality chooses to subsidize a team, such as by

paying for its stadium? Surely such a scheme, the Attorney General argues, is not

covered by the exemption. We disagree. Nobody disputes the notion that money

is at the core of the contraction issue. While the most die-hard baseball fans might

fancy the sport as a mere pastime, most people understand that professional sports

is big business and that profits matter most. So it would not be surprising if

unprofitable baseball clubs were permitted to remain in otherwise unattractive

markets in the event of a public bail-out. But this does not mean that a decision

regarding the number of teams that may participate in league play is somehow

unrelated to the “business of baseball.” Federal antitrust law exempts the
18The Attorney General contends that the investigation was “by no means limited to the

mere act of contraction itself”; rather, the CIDs “requested information relating to the proposed

contraction.” We are unimpressed by this word game. No matter how the Attorney General

characterizes the investigation, the CIDs were focused on contraction – a matter that is well

within the business-of-baseball exemption. 

14

contraction issue from judicial scrutiny, and no inquiry into MLB’s motives or

desires could possibly change the fact that contraction implicates the heart of the

“business of baseball.”18

B. 

The Attorney General of Florida next contends that even if the business of

baseball is immunized from federal antitrust prosecution, state enforcement

agencies can still invoke state antitrust law. The argument is that the federal

exemption is not really an “exemption” as such, but merely a realm where the

federal antitrust laws do not operate. The federal exemption, the Attorney General

says, is merely a “gap in, rather than an exemption to, federal antitrust law.” What

is meant by this crafty wording is not entirely clear, but we get the drift: the

business of baseball should be viewed as an area in which Congress has refrained

from federal antitrust regulation, and therefore states should have free reign to

apply their antitrust laws so long as states are mindful of the Commerce Clause

balancing test enunciated in Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.
15

Ct. 844, 847, 25 L. Ed. 2d 174 (1970) (“Where the statute regulates even-handedly

to effectuate a legitimate local public interest, and its effects on interstate

commerce are only incidental, it will be upheld unless the burden imposed on such

commerce is clearly excessive in relation to the putative local benefits.”) (citations

omitted). The Attorney General argues that the Pike balancing test can be applied

only after an investigation is completed and a more developed record emerges. 

The plaintiffs respond by arguing that Flood, in conjunction with the

Supremacy Clause, makes the business of baseball immune from inconsistent state

laws. Moreover, the plaintiffs contend that the Supreme Court’s Commerce Clause

jurisprudence, when applied to professional baseball, must be read to establish a

unique per se rule that prohibits the application of state antitrust laws when the

federal exemption is triggered. Since balancing is unnecessary, a developed record

is also unnecessary.

Any discussion of whether Congress meant to immunize the business of

baseball from all antitrust law (as opposed to federal antitrust law) is, of course,

fanciful because Congress never conveyed its preference one way or the other. 

The exemption is entirely judge-made, although some decisions have attempted to
16

cloak this disturbing fact in the language of Congressional intent. Our analysis

must turn to the critical language utilized by the Supreme Court in Flood:

The petitioner’s argument as to the application of state antitrust laws

deserves a word. [The district court] rejected the state law claims

because state antitrust regulation would conflict with federal policy

and because national “uniformity (is required) in any regulation of

baseball and its reserve system.” The Court of Appeals, in affirming,

stated, “[A]s the burden on interstate commerce outweighs the states’

interests in regulating baseball’s reserve system, the Commerce

Clause precludes the application here of state antitrust law.” As

applied to organized baseball, and in the light of this Court’s

observations and holding in Federal Baseball, in Toolson, in Shubert,

in International Boxing, and in Radovich, and despite baseball’s

allegedly inconsistent position taken in the past with respect to the

application of state law, these statements adequately dispose of the

state law claims.

Flood, 407 U.S. at 284-85, 92 S. Ct. at 2113 (citations omitted).

Hardly a model of clarity, the passage forces the reader to ask two questions. 

First, was this passage a holding? We answer in the affirmative, even though the

declaration that “these statements adequately dispose of the state law claims” is far

from the forceful language characteristic of most holdings. The context of the

opinion makes clear that the Court was rendering a decision with respect to an

important issue in the case. Indeed, the very next sentence after the quoted passage

states: “The conclusion we have reached makes it unnecessary for us to consider

the respondents’ additional argument . . . .” Id. at 285, 92 S. Ct. at 2113.
19At least one other court has similarly concluded that federal antitrust policy, as

established in the Flood decision, precludes the application of state antitrust law to the business

of baseball. See In re Brand Name Prescription Drugs Antitrust Litigation, 123 F.3d 599, 611

(7th Cir. 1997) (“Antitrust law, for example, with an isolation exception, Flood v. Kuhn . . . is a

field in which Congress has not sought to replace state with federal law.”) (first emphasis added;

citations omitted).

17

Second, what were the Court’s grounds for precluding the application of

state antitrust law? A careful reading of the passage yields two different theories. 

The district court, as characterized by the Supreme Court, held that federal policy

exempts the business of baseball from antitrust scrutiny, and that state antitrust

regulation inherently conflicts with this policy. That is, the district court advanced

a preemption theory. The district court’s holding is in considerable tension with

the usual standard for preemption – a federalism-based doctrine that requires courts

to “assum[e] that the historic police powers of the States [are] not to be superseded

by . . . [federal laws] unless that [is] the clear and manifest purpose of Congress.” 

Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S. Ct. 1146, 1152, 91 L. Ed.

1447 (1947). After all, the exemption is entirely judge-made, so one would be

hard-pressed to find a clear statement from Congress in favor of preemption. Even

so, the Supreme Court endorsed the district court’s statement, and we are bound by

the Court’s holding.19

 The Second Circuit Court of Appeals, by contrast, relied upon the

Commerce Clause. There is an interesting question as to whether Commerce
20Notably, a Florida statute provides that Florida antitrust law does not apply to conduct

exempted from federal antitrust law. See Fla. Stat. § 542.20. It is perhaps misleading to say that

Florida law is “preempted” by federal law when both laws should be read coterminously. 

However, federal courts may not enjoin state actors to comply with state law, see Pennhurst

State School & Hosp. v. Halderman, 465 U.S. 89, 106, 104 S. Ct. 900, 911, 79 L. Ed. 2d 67

(1984), and so the district court wisely declined to base its decision on Fla. Stat. § 542.20.

18

Clause doctrine, when applied to the business of baseball, precludes the application

of state antitrust law per se, or whether the traditional Pike balancing test must be

invoked on a case-by-case basis. The plaintiffs argue that some courts have

erected a per se rule, even though the Second Circuit decision endorsed by the

Flood Court employed the Pike balancing test. Fortunately, we need not answer

this question because our Supremacy Clause analysis disposes of the question at

hand: federal law establishes a universal exemption in the name of uniformity.20

C. 

So far, we have established two key points. First, contraction is an issue that

is at the heart of the “business of baseball”; therefore, contraction cannot be the

subject of an antitrust enforcement action predicated upon federal law. Second, the

plaintiffs are also immune from state antitrust laws by virtue of the Supremacy

Clause. Confronted with these two legal conclusions, the Attorney General

responds by arguing that even if federal law precludes an antitrust prosecution, this
21The cases of Eastern R.R. Presidents Conf. v. Noerr Motor Freight, Inc., 365 U.S. 127,

81 S. Ct. 523, 5 L. Ed. 2d 464 (1961), and United Mine Workers v. Pennington, 381 U.S. 657, 85

S. Ct. 1585, 14 L. Ed. 2d 626 (1965), establish an exemption from antitrust liability for certain

petitioning activities.

19

does not mean that a mere investigation cannot be conducted. We agree, but our

agreement with the Attorney General on this point does not end the matter.

1.

First, it is far from axiomatic that exemptions from prosecution necessarily

entail a concomitant right to be free from investigation. The Second Circuit, for

example, held that a company could not invoke the Noerr-Pennington antitrust

exemption21 as a basis for withholding materials sought through a CID issued by

the U.S. Department of Justice. See Associated Container Transp. (Aus.) Ltd. v.

United States, 705 F.2d 53, 59 (2d Cir. 1983). The court emphasized that there is a

distinction between a prosecution, from which a business could be protected by the

judge-made antitrust exemption, and a mere investigation into corporate conduct:

[T]he appellees are not resisting formal antitrust charges and cannot,

therefore, simply rely on a doctrine which protects from prosecution

businesses seeking to influence the enforcement of laws. To prevail

on this appeal, appellees must demonstrate not that their conduct may

be immune from prosecution, but rather that their communications

with the Federal Maritime Commission are beyond the scope of

legitimate inquiry.
22See note 3, supra.

20

Id. In a similar vein, the Fourth Circuit held that Noerr-Pennington petitioning

immunity “is by definition an exemption from antitrust liability, and not a bar to

discovery of evidence.” North Carolina Elec. Membership Corp. v. Carolina

Power & Light Co., 666 F.2d 50, 53 (4th Cir. 1981).

Second, antitrust exemptions must be strictly construed. See Square D Co.

v. Niagara Frontier Tariff Bureau, Inc., 476 U.S. 409, 421, 106 S. Ct. 1922, 1929,

90 L. Ed. 2d 413 (1986). This rule has its roots in the principle that the antitrust

laws form the bedrock of our capitalist system premised upon competition, and that

anticompetitive conduct harms consumer welfare. For this reason, judge-made

exemptions, no less than statutory exemptions, must be closely cabined. We are

hesitant to read the “business of baseball” exemption broadly – especially since the

Supreme Court has called the exemption an “aberration.”22 Therefore, we reject

the penumbra theory proffered by the plaintiffs and adopted by the district court.

2.

In advancing the penumbra theory, the plaintiffs point out that the businessof-baseball exemption is not riddled multiple exceptions, distinguishing it from

Noerr-Pennington petitioning immunity. It makes no sense, the plaintiffs contend,
21

to allow an investigation into conduct that we know is perfectly legal before the

investigation commences. We agree with this sentiment, although we find it more

appropriate to locate the right to be free from baseless investigations (commonly

referred to as “fishing expeditions”) in other sources of law rather than the

antitrust exemption itself. 

The Fourth Amendment has been held to limit the scope of investigatory

power exercised by federal and state agencies. In See v. City of Seattle, 387 U.S.

541, 544, 87 S. Ct. 1737, 1740, 18 L. Ed. 2d 943 (1967), for example, the Court

described the constitutional limits on administrative subpoenas:

It is now settled that, when an administrative agency subpoenas

corporate books or records, the Fourth Amendment requires that the

subpoena be sufficiently limited in scope, relevant in purpose, and

specific in directive so that compliance will not be unreasonably

burdensome.

See also United States v. Morton Salt Co., 338 U.S. 632, 652-53, 70 S. Ct. 357,

368-69, 94 L. Ed. 401 (1950); Fed. Trade Comm’n v. Am. Tobacco Co., 264 U.S.

298, 305-06, 44 S. Ct. 336, 337, 68 L. Ed. 696 (1924). To be sure, Congress and

state legislatures may permissibly grant broad investigative authority to regulatory

agencies. See Okla. Press Publ’g Co. v. Walling, 327 U.S. 186, 204-05, 66 S. Ct.

494, 503, 90 L. Ed. 614 (1946). But investigations premised solely upon legal
23The Attorney General’s brief reveals his broad (and incorrect) view of the investigatory

discretion vested in his Office: “Enjoining the Attorney General’s civil investigation at the outset

is foreclosed by the possibility that investigation of the events surrounding the proposed

contraction would have revealed antitrust activity involving non-baseball entities that could not

properly hide behind baseball’s Federal Baseball immunity. Such persons would not be

permitted to evade the antitrust laws, and yet without any investigation, their existence will

never be known.” See Brief of Atty. Gen. at 19. In other words, the Attorney General has no

22

activity are the very type of “fishing expedition” that were the target of Justice

Holmes’s assault in American Tobacco.

 Like federal constitutional law, Florida law prohibits the Attorney General

from conducting baseless investigations. See Fla. Stat. § 542.28(3); cf. Check ‘N

Go of Florida, Inc. v. Florida, 790 So. 2d 454, 457-58 (Fla. Dist. Ct. App. 2001)

(“The level of proof required of the investigative agency must suggest something

more than a fishing expedition, and something less than probable cause.”). Section

542.28 establishes two standards that CIDs must meet. First, CIDs must be set

aside if they fail to meet the “standards applicable to subpoenas or subpoenas

duces tecum issued by a court of [Florida] in aid of a grand jury investigation.” 

Fla. Stat. § 542.28(3)(a). Second, CIDs must be set aside if they fail to meet the

“standards applicable to a discovery request under the Florida Rules of Civil

Procedure, to the extent that the application of such standards to any such demand

is appropriate and consistent with the provisions and purposes of this chapter.” 

Fla. Stat. § 542.28(3)(b). It is clear that under either standard, the Attorney

General must have more than a mere intuition that illegal activity is afoot.23 This
idea what illegal conduct might have occurred, or who might have engaged in this conduct. 

Even so, the Attorney General believes he has the power to commence a full-blown

investigation. Although the Attorney General need not have absolute proof of a violation prior

to commencing an investigation (otherwise, what would be the point of conducting an

investigation in the first place?), Florida law and the Constitution clearly require that the

Attorney General have something.

24Federal Baseball, which was typical of the Supreme Court’s cramped Commerce Clause

jurisprudence during the pre-New Deal era, held that “[t]he business [of] giving exhibitions of

baseball” is a “purely state affai[r].” Federal Baseball, 259 U.S. at 208, 42 S. Ct. at 466. The

result of this conclusion was that the Sherman Act did not apply to Major League Baseball.

25In Toolson, the Court retreated from its cramped view of interstate commerce and

instead rested its decision on what it perceived as congressional intent. See Toolson, 346 U.S. at

23

position is further advanced by the language of Fla. Stat. § 542.27(3), which

requires that the Attorney General “suspect” that a violation has taken place before

an investigation may commence, and Flat Stat. § 542.28(1), which requires that the

Attorney General have “reason to believe” that a person “may be in possession . . .

of any documentary material” that is “relevant to a civil antitrust investigation”

prior to the issuance of any CIDs. In short, it is clear that an investigation

predicated solely upon legal activity does not pass muster under any standard.

III. 

The death of the business-of-baseball exemption would likely be met with

considerable fanfare, save for the club owners who benefit from the rule. The

exemption was founded upon a dubious premise,24 and it has been upheld in

subsequent cases because of an equally dubious premise.25 Moreover, the welfare
357, 92 S. Ct. at 78-79. This was another shaky holding, because the Court usually declines to

infer an intention of Congress merely because of congressional inaction. In Helvering v.

Hallock, 309 U.S. 106, 119-21, 60 S. Ct. 444, 451-52, 84 L. Ed. 604 (1940), for example, the

Court said:

Nor does want of specific Congressional repudiations . . . serve as an implied

instruction by Congress to us not to reconsider, in the light of new experience, . . .

those decisions . . . . It would require very persuasive circumstances enveloping

Congressional silence to debar this Court from re-examining its own doctrines . . .

. Various considerations of parliamentary tactics and strategy might be suggested

as reasons for the inaction of . . . Congress, but they would only be sufficient to

indicate that we walk on quicksand when we try to find in the absence of

corrective legislation a controlling legal principle. 

One might also question the propriety of basing a rule of law on a perceived intention alone,

without any textual hook whatsoever. To be sure, the antitrust laws, which have been read as a

delegation to the courts to craft the law of competition in the common law tradition, might

present a unique case where the Court’s judge-made exemption is more palatable; however, one

must wonder why the Court was so intent on casting the baseball exemption as a rule ordained

by Congress in the first place. 

Responding to criticisms that the Court’s jurisprudence has been schizophrenic in

granting an exemption to baseball but not to other professional sports, the Court’s analysis in

Flood boiled down to this puzzling language: “If we were to act otherwise, we would be

withdrawing from the conclusion as to congressional intent made in Toolson and from the

concerns as to retrospectivity therein expressed. Under these circumstances, there is merit in

consistency even though some might claim that beneath that consistency is a layer of

inconsistency.” Flood, 407 U.S. at 284, 92 S. Ct. at 2113. So the reasoning behind the present

rule seems to be a rigid notion of stare decisis, coupled with a hesitancy to render a decision that

would operate prospectively only.

24

losses stemming from the potentially anticompetitive agreements among

professional sports clubs have been well documented. See, e.g., Stephen F. Ross,

Antitrust Options to Redress Anticompetitive Restraints and Monopolistic

Practices by Professional Sports Leagues, 52 Case W. Res. L. Rev. 133 (2001). 

Finally, antitrust law has significantly changed since Federal Baseball was decided;

per se rules have often been jettisoned in favor of the “rule of reason” – a
25

balancing exercise that would uphold conduct that, while appearing

anticompetitive at first blush, proves to be essential for maintaining a successful

league-based enterprise. In this vein, we do not fault the position taken by some

courts, and the arguments proffered by the Attorney General, that the exemption

should be extremely narrow. Even so, we believe that a good faith reading of

Supreme Court precedent leaves us no choice but to reach the following

conclusions: First, contraction is a matter that falls within the “business of

baseball” and therefore cannot be the subject of a prosecution based upon federal

antitrust law. Second, when the business-of-baseball exemption is triggered,

baseball clubs are equally immune from prosecution under state antitrust law. 

Finally, because the act of contraction (or an agreement to contract) cannot

possibly violate state or federal antitrust laws, an investigation based solely upon

contraction is baseless and therefore violates the Fourth Amendment and Florida

law – both of which limit the scope of the Attorney General’s authority to issue

investigative subpoenas. It is up to the Supreme Court or Congress to overrule

Flood outright, or perhaps devise a more cabined exemption. As an intermediate

appellate court, we have no choice but to hold that the district court was correct in

granting judgment in favor of the plaintiffs.
26

AFFIRMED.