San Jose wants to overturn baseball’s antitrust exemption

March 11

Between 1913 and 1915, there was a third baseball league, the Federal League, competing with the two established organized leagues we already know, the National League and the American League. Players’ salaries skyrocketed, and the NL and AL ended up breaking up the FL by buying up some clubs and inducing others to leave the League. The sole remaining FL team, from Baltimore, sued the organized leagues and the National Commission, arguing that their action in breaking up the FL violated antitrust law.

In Federal Baseball Club of Baltimore, Inc. v.  National League of Professional Baseball Clubs (1922), the Supreme Court said it didn’t violate antitrust law. Justice Holmes, writing for a unanimous Court, said this didn’t fall within antitrust law because it wasn’t interstate commerce (and the presence of interstate commerce is expressly made necessary by the text of the Sherman Antitrust Act). Of course, this is contrary to many decades of later jurisprudence: there’s no way the Supreme Court would have decided this way if the case came up today.

But the Supreme Court reaffirmed its 1922 decision in a short 7-2 per curiam in Toolson v. New York Yankees (1953), saying if baseball’s exemption was wrong, Congress should fix it. (Though, in United States v. Shubert (1955) and later cases, the Supreme Court said that Federal Baseball was essentially precedent for baseball and nothing else. The Court even declined to extend the precedent to boxing and football.)

In Flood v. Kuhn (1972), the Supreme Court reaffirmed Federal Baseball again. Curt Flood was a baseball player who, in 1969, was traded from the Cardinals to the Phillies without being consulted. His request to be a free agent was denied. He sued Bowie Kuhn (then-baseball commissioner), the leagues, and the clubs, raising antitrust issues. But he lost: Justice Blackmun wrote that the regime begun in 1922 was “an aberration confined to baseball”, perhaps “unrealistic, inconsistent, or illogical”, but “established” and acquiesced in by Congress.

Justice Blackmun began his opinion with a Part I, which goes like this (footnotes omitted):

The Game

It is a century and a quarter since the New York Nine defeated the Knickerbockers 23 to 1 on Hoboken’s Elysian Fields June 19, 1846, with Alexander Jay Cartwright as the instigator and the umpire. The teams were amateur, but the contest marked a significant date in baseball’s beginnings. That early game led ultimately to the development of professional baseball and its tightly organized structure.

The Cincinnati Red Stockings came into existence in 1869 upon an outpouring of local pride. With only one Cincinnatian on the payroll, this professional team traveled over 11,000 miles that summer, winning 56 games and tying one. Shortly thereafter, on St. Patrick’s Day in 1871, the National Association of Professional Baseball Players was founded and the professional league was born.

The ensuing colorful days are well known. The ardent follower and the student of baseball know of General Abner Doubleday; the formation of the National League in 1876; Chicago’s supremacy in the first year’s competition under the leadership of Al Spalding and with Cap Anson at third base; the formation of the American Association and then of the Union Association in the 1880′s; the introduction of Sunday baseball; inter-league warfare with cut-rate admission prices and player raiding; the development of the reserve “clause”; the emergence in 1885 of the Brotherhood of Professional Ball Players, and in 1890 of the Players League; the appearance of the American League, or “junior circuit,” in 1901, rising from the minor Western Association; the first World Series in 1903, disruption in 1904, and the Series’ resumption in 1905; the short-lived Federal League on the majors’ scene during World War I years; the troublesome and discouraging episode of the 1919 Series; the home run ball; the shifting of franchises; the expansion of the leagues; the installation in 1965 of the major league draft of potential new players; and the formation of the Major League Baseball Players Association in 1966.

Then there are the many names, celebrated for one reason or another, that have sparked the diamond and its environs and that have provided tinder for recaptured thrills, for reminiscence and comparisons, and for conversation and anticipation in-season and off-season: [list of 88 famous baseball players omitted]. The list seems endless.

And one recalls the appropriate reference to the “World Serious,” attributed to Ring Lardner, Sr.; Ernest L. Thayer’s “Casey at the Bat”; the ring of “Tinker to Evers to Chance”; and all the other happenings, habits, and superstitions about and around baseball that made it the “national pastime” or, depending upon the point of view, “the great American tragedy.”

Clearly this section was highly controversial, and so Justice White and Chief Justice Burger joined the whole opinion except this one part. Justice Powell didn’t participate, and Justices Douglas, Brennan, and Marshall dissented. (Douglas had joined Toolson but wrote that he had “lived to regret it”.) So this Part I quoted above was endorsed by only three Justices: not the opinion of the Court.

Anyway, now San Jose wants to challenge the antitrust exemption again. San Jose claims that Major League Baseball has undermined the Oakland As’ desire to move to San Jose. Of course San Jose lost in district court, but the case is being fast-tracked to the Ninth Circuit, which the linked article says could hear it by May. You can read the Ninth Circuit brief here. Interestingly, one of the possible grounds that the Ninth Circuit could use would be to read the baseball exemption narrowly, as limited to labor issues like the reserve clause — which is how the previous cases arose — and not applicable to issues here like restraints on relocation of teams.

(via How Appealing)

Sasha Volokh lives in Atlanta with his wife and three kids, and is an associate professor at Emory Law School. He has written numerous articles and commentaries on law and economics, privatization, antitrust, prisons, constitutional law, regulation, torts, and legal history.
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