Law 360: 3rd Circ. Ends Minor League Owner’s Suit Over MLB Ties

Law360 (January 21, 2026, 8:10 PM EST) — The Third Circuit on Wednesday upheld the dismissal of a lawsuit from the owner of the Oregon-based Salem-Keizer Volcanoes alleging a minor league baseball official cut the team out of a relationship with Major League Baseball, finding the official had no fiduciary duty to it.

Siding with Marvin Goldklang, a minority owner of the New York Yankees, a unanimous three-judge panel said that as a board member for the National Association of Professional Baseball Leagues Inc., which negotiates directly with MLB for minor league teams, he did have a fiduciary duty to the association. However, that same duty does not extend to the Volcanoes’ Florida-based owner Sports Enterprises Inc. under the state’s nonprofit law, the panel ruled, even though it said there is such a duty with respect to its for-profit law.

“Florida common law — not its for-profit statute — creates the for-profit shareholder’s cause of action,” U.S. Circuit Judge Thomas L. Ambro wrote in the decision, citing a Florida state appeals court’s 2001 ruling in Fox v. Professional Wrecker Operators of Florida . “Because the for-profit statute is not the source of the claim, we decline to read a parallel cause of action into the non-profit law merely because the two statutes use identical text.”

Members of a nonprofit like the National Association could lodge a breach of fiduciary duty claim before the state’s 1993 amendments to the two laws, the decision said. But it said the amendments “eliminated the statutory ‘bridge’ between the for-profit and non-profit laws, and with it any statutory source of a non-profit member’s derivative cause of action against a director.”

SEI’s sole breach of fiduciary duty claim against Goldklang stems from negotiations in 2020 between the National Association and MLB to seal a new professional baseball agreement, or PBA, that would set the terms of minor league teams’ official affiliations with MLB teams.

In its April 2024 complaint against Goldklang, whose company Goldklang Group also owns two minor league teams, SEI alleged he led the negotiating committee for the PBA. Instead of reaching a new PBA, SEI said Goldklang and the committee reached a new MLB deal with a smaller group of minor league teams, including his own teams, but not the Volcanoes. That in turn caused the Volcanoes’ 26-year professional affiliation with the San Francisco Giants to end, SEI said.

A New Jersey federal court dismissed SEI’s lawsuit in January 2025.

On Wednesday, the panel further rejected SEI’s arguments that Goldklang owed it an express fiduciary duty under the “national association agreement” that serves as the National Association’s bylaws, which state that decisions from the board of trustees “must be made for the benefit of the national association as a whole.”

“But the provision does not explicitly reference a fiduciary relationship, let alone create one specifically between Goldklang and SEI,” the panel added.

As for any implied fiduciary duty, it further found that SEI failed to allege any transaction between it and Goldklang, beyond representations that the negotiating committee made to all minor league teams and the National Association.

“The theme of SEI’s complaint is not that it had a relationship of trust and confidence with Goldklang, but that the association’s rules forced SEI to rely on the negotiating committee — and therefore, Goldklang — to protect its affiliation with the San Francisco Giants,” the panel concluded. “But that is not enough.”

Eric Kanefsky, an attorney for Goldklang, praised Wednesday’s decision in a statement to Law360, saying the court “held what we have known all along: This case had zero merit and was riddled with incurable legal and factual flaws.”

“We intend to pursue all legal remedies to address having to successfully defend this patently frivolous litigation,” he said.

Representatives for SEI did not respond to a request for comment Wednesday.

U.S. Circuit Judges L. Felipe Restrepo, Theodore A. McKee and Thomas L. Ambro sat on the panel for the Third Circuit.

SEI is represented by Geoffrey S. Brounell and Mohammad B. Pathan of Davis Wright Tremaine LLP, and Alexander M. Naito of Tarlow Naito & Summers LLP.

Goldklang is represented by Martin B. Gandelman, Eric T. Kanefsky, Philip J. Morrow and Kevin Musiakiewicz of Calcagni & Kanefsky LLP, and Christopher J. Gramiccioni of Kingston Coventry LLC.

The case is Sports Enterprises Inc v. Goldklang et al., case number 25-1299, in the U.S. Court of Appeals for the Third Circuit.

By Ganesh Setty

–Additional reporting by Ryan Harroff and David Steele. Editing by Adam LoBelia.

Article source here: Law 360.