An Error in the National Pastime: Antitrust Exemption

Article excerpt

Major League Baseball, about to begin its postseason, continues to benefit from repeated funny business by the United States Supreme Court. In one of the most inexplicable decisions ever handed down, Associate Justice Oliver Wendell Holmes wrote the 1922 opinion in Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs et al. that organized baseball was a sport characterized by the personal effort of players, but was not a business, with transportation of the athletes across state lines incidental to the exhibitions. This unfortunate, although unanimous, ruling has never been overturned in subsequent cases.

The Baltimore Terrapins of the defunct Federal League (founded as a minor league in 1913 and functioning as a rival major league in 1914 and 1915) argued that MLB teams had conspired to create a monopoly, thus violating the 1890 Sherman Antitrust Act by restraining interstate trade and commerce. The plaintiff claimed the National League, established in 1876, and American League, founded in 1901, had cornered the market by buying out Federal League teams that had lured away talented players via higher salaries. Further, unlike these two older leagues, which became MLB and began competing in the World Series in 1903, the Federal League ignored MLB's reserve clause, which the National League had adopted after the 1879 season to bind a player initially signed with a team to one additional year with that team after the contract was up. No player could join another outfit unless his contract, with the attendant reserve clause, was sold or traded, or he was released. (Similar reserve clauses were subsequently incorporated into professional sport player contracts because of the financial advantages afforded owners to restrain salaries and prevent players jumping to another team.)

In Toolson v. New York Yankees, Inc. from 1953, the Supreme Court upheld Federal Baseball and ruled 7-2 against pitcher George Toolson. He claimed monopolistic behavior restricted him to a minor league team because the Yankees had no place for him on its active roster. Toolson asserted he was good enough to make it to the big show but the reserve clause prevented him from doing so. Nonetheless, "We think that if there are evils in this field which now warrant application to it of the antitrust laws," the unsigned decision read, "it should be by legislation," meaning Congress, not the Court.


In Curt Flood v. Sow Kuhn in 1972, the Supreme Court again upheld the 1922 precedent with a 5-3 opinion written by Associate Justice Harry Blackmun. Although supported by the MLB Players Association, Flood couldn't sign with a team of the All-Star centerfielder's choice; he had been traded from the St. Louis Cardinals to the Philadelphia Phillies but refused to go, yet he couldn't negotiate with other teams. Waxing nostalgic on the game's origins and including a long list of marquee players, Blackmun took pains to call the reserve system "an exception and an anomaly" and Federal Baseball and Toolson an "aberration" to federal antitrust laws. He also declared, "Professional baseball is a business and it is engaged in interstate commerce. …


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