The U.S. Court of Appeals for the Third Circuit affirmed a lower court's dismissal of a lawsuit filed by the owner of a minor league baseball team against a minority MLB team owner over the loss of a lucrative team affiliation during Major League Baseball's 2020 reorganization.
In *Sports Enterprises, Inc. v. Marvin Goldklang* (3d Cir. 2026), the court held that Sports Enterprises, Inc. (SEI), which owns the Salem-Keizer Volcanoes minor league baseball club in Oregon, failed to state a plausible claim that defendant Marvin Goldklang owed the company any fiduciary duty.
The case stems from MLB's sweeping restructuring of its minor league system in 2020, which resulted in the termination of affiliations with more than 40 minor league teams. Among those affected was the Salem-Keizer Volcanoes, which lost its affiliation with the San Francisco Giants after maintaining what the court described as a "lucrative" partnership for years.
SEI alleged that Goldklang, who serves as a minority owner of an MLB team, orchestrated a scheme to diminish minor league baseball's role in professional baseball for his own financial benefit. According to the complaint, Goldklang negotiated with MLB on behalf of minor league teams through his role in collective bargaining, creating what SEI claimed was a conflict of interest.
The Third Circuit panel, consisting of Circuit Judges Restrepo, McKee, and Ambro, heard oral arguments in the case on Nov. 12, 2025. Judge Ambro wrote the opinion for the court, which was filed Jan. 21, 2026.
Writing for the unanimous panel, Judge Ambro acknowledged SEI's allegations that Goldklang may have schemed against minor league baseball interests. "Even were that true, SEI fails plausibly to allege that Goldklang owed any fiduciary duty," the court wrote in its opinion.
The decision represents a victory for defendants Goldklang, both individually and through his company M.S. Goldklang & Co., Inc., a New Jersey corporation. The case originated in the U.S. District Court for the District of New Jersey, where District Judge Jamel K. Semper initially dismissed SEI's complaint for failure to state a claim upon which relief can be granted.
To establish their collective bargaining position with MLB, minor league teams had formed an association that allowed them to negotiate as a unified group. Goldklang's dual role as both a minority MLB team owner and a representative for minor league interests formed the basis of SEI's legal challenge.
The 2020 MLB reorganization marked one of the most significant changes to professional baseball's structure in decades. The restructuring eliminated numerous minor league affiliations as MLB sought to streamline its development system and reduce costs. Teams like the Salem-Keizer Volcanoes found themselves without the financial stability and player development resources that came with major league affiliations.
SEI was represented by attorneys from Davis Wright Tremaine in New York and Tarlow Naito & Summers in Portland, Oregon. Alexander M. Naito of the Portland firm presented oral arguments for the appellant. The defendants were represented by multiple law firms, including Calcagni & Kanefsky in Newark, New Jersey, with Eric T. Kanefsky arguing on their behalf.
The Third Circuit's affirmance of the district court ruling means SEI cannot pursue its claims against Goldklang without additional factual allegations that would establish a fiduciary relationship. The court's analysis focused on whether Goldklang owed SEI any legal duty that could form the basis for liability, ultimately concluding that no such relationship existed based on the allegations in the complaint.
The decision provides clarity for future disputes arising from MLB's minor league restructuring. By requiring plaintiffs to establish specific fiduciary duties before pursuing claims against league officials or team owners, the ruling may limit the scope of litigation stemming from the 2020 changes.
The case also highlights the complex relationships within professional baseball's organizational structure, where individuals may serve multiple roles that could create potential conflicts of interest. However, the Third Circuit's ruling suggests that such conflicts alone do not automatically create actionable legal claims without establishing specific duties owed between the parties.
For the Salem-Keizer Volcanoes and other affected minor league teams, the decision represents the end of one legal avenue for seeking redress over their lost affiliations. The team must now focus on alternative business models and partnerships to maintain operations without the support of a major league affiliation.
The precedential nature of the Third Circuit's opinion means it will serve as binding authority for future cases within the circuit involving similar disputes over fiduciary duties in professional sports contexts. The decision may also influence how other courts approach claims arising from organizational changes in professional sports leagues.