Analysis: Diving Into Unsealed Letter From Commissioner Over MLB Sign Stealing Allegations

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MLB sign stealing

If you follow the gambling and daily fantasy sports litigation world fairly closely, you may recall a lawsuit that was filed a few years ago by Kristopher Olson and others similarly situated about MLB sign stealing.

The lawsuit stemmed from the Houston Astros and Boston Red Sox sign stealing and the alleged effect on daily fantasy sports players. While that lawsuit was dismissed in April 2020, the order dismissing the case referenced a letter from Major League Baseball commissioner Rob Manfred sent to New York Yankees general manager Brian Cashman.

The letter was initially filed under seal, meaning it was unavailable to those other than the Judge. However, right before the new year, U.S. District Court Judge Jed S. Rakoff ordered the letter unsealed with only minor redacting to protect the individuals’ anonymity.

The order out of the federal courthouse in the Southern District of New York brings the case to its conclusion after more than three years of litigation, even though the substantive case was effectively over in 2020.

What was Olson case about again?

The case started following the alleged scandals around MLB sign stealing orchestrated by the Houston Astros and the Boston Red Sox. The lawsuit was brought by a group of DFS players against Major League Baseball, MLB Advanced Media (MLBAM), the Boston Red Sox, and the Houston Astros. The plaintiffs were daily fantasy players who played between 2017 and 2019. The plaintiffs alleged:

various fraud, negligence, unjust enrichment, and consumer protection law claims based on alleged harm caused by the defendants’ representations and conduct surrounding the by-now-infamous sign-stealing scandal.

The amended complaint filed by the plaintiffs alleged that MLBAM acquired equity stakes in the fantasy sports company they were playing on and had a league-wide partnership with the company. The company, DraftKings, also signed individual team deals with a variety of teams, including the Red Sox and the Astros.

Summing up the complaint

Judge Rakoff summarized the plaintiffs’ complaint as follows:

The thrust of plaintiffs’ complaint is that defendants were aware of sign stealing by the Astros and Red Sox, but intentionally took no action to stop it in order to protect their financial interest and investment in DraftKings.

Ultimately, the District Court would find that the plaintiffs were not capable of proving the necessary elements to their claims, and the case would be dismissed, with Rakoff concluding:

In short, the connection between the alleged harm plaintiffs suffered and defendants’ conduct is simply too attenuated to support any of plaintiffs’ claims for relief.

The April 3, 2020 decision effectively ended the meat of the case; however, one aspect survived. Litigation over the unsealing of a letter involving possible misconduct by the Yankees and a letter sent from Manfred to Cashman.

Path to releasing MLB sign stealing letter

The efforts to unseal the letter began after a June 5, 2020, order denying plaintiffs’ efforts to file an amended complaint purported to resolve some of the deficiencies noted in the April 2020 dismissal order.

The District Court found in favor of the plaintiffs and ordered a minimally redacted version of the letter be unsealed. The defendants appealed, and the District Court stayed the order pending a decision from the Second Circuit Court of Appeals.

In March 2022, the Court of Appeals affirmed not only the District Court’s dismissal of the case, but also the unsealing of the letter from commissioner Manfred. That left only one step, which was for the District Court to issue a directive that the letter be unsealed, which the District Court did, releasing the letter December 29, 2022.

What was in MLB sign stealing letter?

The September 14, 2017 letter had a reference line stating “Notice of Discipline (Violation of Replay Review Regulations).” The letter from Manfred refers to the Yankees general manager informally as Brian. It notes that the Yankees filed a formal complaint and request for review regarding the potential use of electronic equipment in-game by the Boston Red Sox “in order to steal signs and gain a competitive advantage.”

In the letter, Manfred states:

Based on the information we received, I have concluded that the Red Sox violated On-Field Regulation 1-2.A by using electronic equipment “for the puporse of stealing signs or conveying information designed to give a Club an advantage.”

Careful what you ask for?

After acknowledging the Red Sox investigation, the letter states that an individual (whose name was redacted):

informed the Department of Investigations that the Yankees used a similar scheme to that of the Red Sox to decode opposing Clubs’ signs and relay them to the batter when a runner was on second base.

According to the letter, an individual admitted to the Department of Investigation that during the 2015 and a portion of the 2016 season, he provided information about opposing teams’ signs to players and coaches “in the replay room at Yankee Stadium, who then physically relayed the information to the Yankees’ dugout.”

In response to the findings, the Yankees were fined $100,000 with instructions to make the check payable to Major League Baseball Charities, according to the letter.

What does all this mean?

It is not immediately clear what this means, beyond the sign-stealing scandal that cast a shadow over the Astros, and to a much lesser extent, the Red Sox was more widespread than initially known.

In terms of the Olson case, the release of the letter closes the door on one of the more high-profile challenges to sports league integrity issues and the question of what rights fans and bettors or daily fantasy players might have.