The Astros’ cheating scandal hits the courts

The sign-stealing saga engulfing the Houston Astros seems to take a new turn with each passing week. Late last week, the Wall Street Journal broke the story that the Astros’ front office had spearheaded the operation with code names like “Dark Arts” and “Codebreaker,” contradicting the narrative from Rob Manfred’s report that the scheme had been player-driven.

Moreover, a website has been set up tracking every trash can bang over the course of the entire 2017 season. Meanwhile, A.J. Hinch, in his first in-depth interview following his termination, refused to deny that the Astros were using buzzers to tell hitters what pitches were coming after the trash-can system was retired. In short, the Astros’ disastrous offseason isn’t getting any better as Spring Training looms closer.

It seemed inevitable in the wake of the scandal that at some point there would be legal action filed stemming from it. Former MLB pitcher Mike Bolsinger filed the highest-profile lawsuit thus far on Monday in Los Angeles. Bolsinger’s case is interesting, in that it stems on the very last outing of his MLB career, whilst he was with the Toronto Blue Jays. On that day, the visiting Bluebirds fell to the Astros, 16-7. Bolsinger’s line that day sticks out, even in a game where every one of Toronto’s pitchers gave up at least one run.

Bolsinger says there’s a really good reason for that.

The right-hander vividly recalls the circumstances of his appearance against the Astros on Aug. 4, 2017, in Houston because he was demoted afterward and hasn’t since played in a major league game.

Bolsinger threw 29 pitches for the Toronto Blue Jays in that game and retired only one of eight batters. He allowed four runs, four hits (a homer, double and two singles) as well as three walks.

”I don’t know if I’ve had a worse outing in my professional career,” Bolsinger told USA Today. “I remember saying, ‘It was like they knew what I was throwing. They’re laying off pitches they weren’t laying off before. It’s like they knew what was coming.’ That was the thought in my head.

”I felt like I didn’t have a chance.”

The Astros banged the trash can lid on 12 of Bolsinger’s 29 pitches, suggesting that the Astros did, in fact, know what was coming. Bolsinger never pitched in the Major Leagues again after that August 4th game; he spent all of 2018 and 2019 in Japan with Chiba Lotte, with mixed results.

Bolsinger’s complaint (which you can read here), essentially argues that the Astros’ sign-stealing constituted an unfair business practice under California law, and tortiously interfered with both Bolsinger’s contract, the Collective Bargaining Agreement, and his future economic expectancy. We’ve talked about tortious interference before; essentially, Bolsinger is alleging that the Astros’ actions resulted in lessening his future earnings. Now, Bolsinger would probably have a decent case on this, except for one thing: he filed it in California.

It’s understandable why Bolsinger and his attorneys chose California law for this; the state’s unfair business practice statute is among the best in the country and almost certainly covers the Astros’ sign-stealing. The problem is that Bolsinger is a resident of Texas, the Astros are a Texas limited liability company, and the game in question was between the Astros and a Canadian baseball franchise in the state of Texas. In other words, there’s a question regarding whether the California court has what is called “personal jurisdiction” to hear the lawsuit at all.

“Jurisdiction” is the power of the court to hear a particular case. There are generally two kinds of jurisdiction: subject matter jurisdiction, and personal jurisdiction. Subject matter jurisdiction is the power of a court to hear the dispute in question and issue the requested remedy. Personal jurisdiction is the power to issue orders as to the parties to the dispute.

This can get confusing, so here’s a quick primer. Let’s say I sued managing editor Matt Provenzano for an egg salad sandwich. The court’s power to order the creation of an egg salad sandwich is its subject matter jurisdiction. The court’s power to order Matt to be the one to make the sandwich is its personal jurisdiction. A court needs both to be able to hear a case, because it can’t decide a matter without authority over both the dispute and the parties to it. An order issued without jurisdiction is void — a legal nullity, with no effect whatsoever.

In this case, there’s a real problem with whether the California court has either subject matter jurisdiction or personal jurisdiction.

Let’s start with subject matter jurisdiction. The game in question occurred in Texas, and so to the extent Bolsinger has a remedy it would be under Texas law. There’s really no explanation as to how California law would apply to actions taken by the Astros in a game that occurred in a different state.

Bolsinger tries to get around this by arguing that the Astros won the World Series in California against the Dodgers, and by including a claim against the Astros for disgorgement of their $31 million in World Series victory shares. But I don’t see how Bolsinger has standing to pursue that claim.

Standing is the ability of a plaintiff to seek a particular remedy. He wasn’t on the Dodgers when they lost the World Series, and didn’t stand to make any postseason share at all as a member of a 2017 Blue Jays squad that finished in a distant fourth place. Joc Pederson might have standing to make that claim, but I don’t see how Bolsinger does — and that’s before we even get to the issue of labor law preemption, the idea that Bolsinger’s dispute is governed by the CBA, and not the courts, which will undoubtedly be raised and briefed.

Then there’s the problem of personal jurisdiction. The lawyers amongst you will remember the full month of this analysis from first year civil procedure, so we’ll grossly oversimplify this and say that the question is whether the Astros have sufficient contacts in California such that they could be expected to be sued there. Certainly, it’s possible; the Astros do engage in commerce in California when they play on the road against California-based teams. But it’s not a given that the Astros could reasonably anticipate that California law would apply to a game they play in Houston, and less so that they could be haled into court over that game.

This is very procedural, and as such a lot less tantalizing than the substantive aspects of Bolsinger’s lawsuit. On the merits, yes, I think Bolsinger’s case would have a chance, but I genuinely don’t think it gets that far because I don’t think any state court in California has jurisdiction to hear it. Bolsinger filed this case in California because it’s the friendliest venue substantively, but procedurally, establishing jurisdiction will be, I think, extraordinarily difficult. This case would be far more likely to succeed with a plaintiff on the Angels or Dodgers, with Bolsinger however, I don’t think it ever gets to the merits because of the jurisdictional problems.

That is not to say that the lawsuit is frivolous, as some have suggested. Bolsinger might have a more uphill climb on the merits in Texas, but it isn’t impossible he could state a claim there. The complaint needs to be fleshed out more, and he probably doesn’t have standing to contest the Astros’ title winnings in Texas any more than he does in California. But his tortious interference claim might - might - stand a chance in Texas, even if he would have to establish how sign stealing wasn’t an expected part of the game.

Far more interesting, actually, are the pair of class action lawsuits filed last week against Major League Baseball, the Astros, and the Red Sox on behalf of daily fantasy website players. This is the crux of the plaintiffs’ complaint:

49. The Astros Trash Can Scheme and Replay Room Scheme inflated the Astros’ player performance statistics used by DraftKings’ MLB DFS contestants to formulate their MLB DFS wagers and deflated the statistics of opposing pitchers, rendering the contests dishonest and unfair.

50. Plaintiff and the Class of other similarly-situated Draftkings’ MLB DFS contestants were induced by defendants’ promotion of DraftKings’ fantasy baseball contests to participate in wagering competitions that defendants knew were corrupted by the defendant Astros, to plaintiff’s and the Class’s financial detriment.

In other words, the plaintiff is alleging that MLB marketed fantasy baseball as a fair game of skill, when all the while it knew or should have known, that the games were no such thing as a result of the Astros’ cheating. The lawsuits are under a number of state UDAP (unfair and deceptive acts and practices) statutes, and probably do state a cause of action; fantasy players are consumers, and they certainly relied to their detriment on the idea that MLB games were skill tests and not being rigged. To the extent that MLB marketed daily fantasy games with actual or constructive knowledge that the Astros were inflating their statistics in violation of the rules of the game, these plaintiffs almost certainly state a cause of action.

In all likelihood, these aren’t the last lawsuits we’ve seen arising from the cheating scandal. Then there’s the lawsuit between current Astros owner Jim Crane and former owner Drayton McLane, in which McLane accused Crane of tanking the team on purpose. All of a sudden, this scandal puts a brand new spin on the allegations the two billionaires are throwing at each other regarding how they operated the team, and whether either or both engaged in bad faith efforts to damage the value of the franchise, either intentionally or through mismanagement. It will likely be years before the outcome of all of these cases is known.