Published in the Chicago Daily Law Bulletin; "Baseball commissioner has several ways to punish Cards." - Written by Timothy Liam EPSTEIN

During his tenure as the Cardinals’ baseball development director, Christopher Correa hacked into the Houston Astros’ database on several occasions between March 2013 and June 2014. Correa stole Houston’s intellectual property in the form of player evaluations, trade discussions with other teams and scouting reports.

Correa not only dishonored the spirit and integrity of baseball, but also violated federal law, 18 U.S.C. 1030. The statute criminalizes unauthorized access of protected computers where information is obtained that is used in and affecting interstate and foreign commerce and communication and the value of information obtained exceeds $5,000. 18 U.S.C. Sections 1030(a)(2)(C) and (c)(2)(B)(iii). The U.S. District Court for the Southern District of Texas determined that the Astros sustained $1.7 million in damages as a result of Correa’s actions.

In January 2016, Correa pleaded guilty to five counts of unauthorized access of a protected computer. Each count carried a maximum penalty of five years in prison and a fine up to $250,000. However, Correa was only sentenced to 46 months in prison and ordered to pay $279,038 in restitution to Houston.

While the criminal aspect of Correa’s case is settled, it still remains to be seen what, if any, action Major League Baseball will take against the Cardinals. A punishment seems almost inevitable considering the language of the MLB constitution and the severity of Correa’s infraction.

MLB’s commissioner is required to investigate any alleged act, transaction or practice that is not in the best interests of baseball and must determine what punishment, if any, is appropriate. MLB Const. Art. II, Section 2(b) 2(c).

Unlike the National Football League, punishments handed down by baseball’s commissioner are not appealable to the court system. Disputes are to be resolved pursuant to the MLB constitution by the commissioner in accordance with the best interests of baseball. MLB Const. Art. VI, Section 2.

Correa’s actions can certainly be viewed as an erosion of the integrity and public confidence in baseball, as he stole secret information from another team in order to gain a competitive advantage.

Within the last decade, there have been several instances across leagues of teams going too far when trying to gain a competitive edge. Responses from league commissioners, however, have been vastly different.

In 2007, the New England Patriots were caught videotaping signals of New York Jets’ coaches during a game, commonly referred to as “Spygate.”

NFL Commissioner Roger Goodell fined the Patriots $750,000 (head coach Bill Belichick was personally fined $500,000) and stripped the team of its 2008 first-round draft pick.

Similarly, Goodell fined the Atlanta Falcons $350,000 and took away its 2016 fifth-round draft pick after discovering the team pumped artificial noise into its stadium to throw off opposing offenses.

MLB is not immune from acts that skirt the rules designed to protect the competitive balance. Commissioner Rob Manfred has demonstrated a preference to tailor the punishment to the crime.

In July 2016, Manfred voided five amateur contracts and banned the Boston Red Sox from signing international amateur prospects for one year. Manfred penalized the Red Sox after the club spent $62 million on an international amateur player, while the league spending limit on such transactions was only $300,000.

However, Manfred recently told the Boston Herald that he views the Red Sox and Cardinals situations differently; pointing out the Red Sox incident resulted from an organizational failure, while the Cardinals incident is limited to a few isolated individuals.

Suspending other Cardinals employees that were involved in the hack is one option Manfred may pursue. The commissioner has the power to suspend or remove any employee of a MLB team that has engaged in conduct that is “not in the best interests of baseball.” MLB Const. Art. II, Section 3(c).

As such, Manfred would most likely be able to restrict another team from hiring that employee as well, because it could be considered in the best interest of baseball. However, it should be noted this option is not available if Correa acted alone.

Such a ban would presumably not be considered collusion in violation of the Sherman Act due to the MLB’s antitrust exemption. See Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs, 42 S. Ct. 465 (1922). Furthermore, the Major League Baseball Players Association would not be able to file a grievance against this type of penalty because it involves a team employee, not a player who is a member of the MLBPA.

Given that Correa stole Astros draft evaluations, taking away draft picks is another available penalty. Unlike the NFL, there has only been one occurrence in the history of MLB where a commissioner attempted to strip draft picks from a team.

In that instance, a court ruled that the MLB constitution did not give the commissioner that power to strip draft picks. Atlanta National League Baseball Club Inc. v. Kuhn, 432 F. Supp. 1213 (1977). However, the league constitution has been amended several times since 1977, and it would appear that the new constitution gives Manfred the ability to withhold draft picks. MLB Const. Art. II, Sections 3(f) 3(g).

Even though withholding draft picks is not an enumerated punishment, Section 3(g) reserves the commissioner’s right to implement other actions he deems appropriate. In light of the draft information Correa stole from Houston, taking away draft picks appears to be a reasonable punishment.

What remains unclear is whether or not a league arbitrator would uphold such a penalty, as there is no adequate precedent to guide the decision.

The most likely punishment that Manfred could impose is a monetary fine. The MLB constitution clearly lays out that a monetary fine levied against a team may not exceed $2 million. MLB Const. Art. II, Section 2(e). It is not clear, however, if Manfred will consider each individual breach as a separate, punishable offense, or if Correa’s actions will be viewed in the aggregate.

Since Correa pleaded guilty to five separate counts, it is conceivable that Manfred could view each breach individually and impose a $10 million fine, although such a steep fine is unprecedented in any sport and seems unlikely.

Based on his statement, it appears that Manfred is more inclined to hold the individuals responsible rather than the Cardinals organization as a whole.

Regardless of the scope of the punishment, the Correa incident adds another chapter to the growing body of “sports law” relative to the power of league commissioners.

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