Home BoB Documents Flood v. Kuhn

Like Shoot to Thrill - An AC/DC Tribute on Facebook!

An authentic tribute of AC/DC that covers the best of the Bon Scott era and the best of Brian Johnson's material

Who's Online?

We have 561 guests online

Atom RSS

Flood v. Kuhn PDF Print E-mail
User Rating: / 41
PoorBest 
Selection of Docs
Written by Court Ruling   
Sunday, 18 June 1972 12:00

407 U.S. 258

FLOOD v. KUHN ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

No. 71-32.

Argued March 20, 1972
Decided June 19, 1972

Petitioner, a professional baseball player "traded" to another club without his previous knowledge or consent, brought this antitrust suit after being refused the right to make his own contract with another major league team, which is not permitted under the reserve system. The District Court rendered judgment in favor of respondents, and the Court of Appeals affirmed. Held: The longstanding exemption of professional baseball from the antitrust laws, Federal Baseball Club v. National League, 259 U.S. 200 (1922); Toolson v. New York Yankees, Inc., 346 U.S. 356 (1953), is an established aberration, in the light of the Court's holding that other interstate professional sports are not similarly exempt, but one in which Congress has acquiesced, and that is entitled to the benefit of stare decisis. Removal of the resultant inconsistency at this late date is a matter for legislative, not judicial, resolution. Pp. 269-285.

It is a century and a quarter since the New York Nine defeated the Knickerbockers 23 to 1 on Hoboken's [407 U.S. 258, 261] 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.

And one recalls the appropriate reference to the "World Serious," attributed to Ring Lardner, Sr.; Ernest L. Thayer's "Casey at the Bat"; 4 the ring of "Tinker to [407 U.S. 258, 264] Evers to Chance"; 5 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." 6

The petitioner, Curtis Charles Flood, born in 1938, began his major league career in 1956 when he signed a contract with the Cincinnati Reds for a salary of $4,000 for the season. He had no attorney or agent to advise him on that occasion. He was traded to the St. Louis Cardinals before the 1958 season. Flood rose to fame as a center fielder with the Cardinals during the years 1958-1969. In those 12 seasons he compiled a batting average of .293. His best offensive season was 1967 when he achieved .335. He was .301 or better in six of the 12 St. Louis years. He participated in the 1964, 1967, and 1968 World Series. He played error less ball in the field in 1966, and once enjoyed 223 consecutive errorless games. Flood has received seven Golden Glove Awards. He was co-captain of his team from 1965-1969. He ranks among the 10 major league outfielders possessing the highest lifetime fielding averages. [407 U.S. 258, 265]

Flood declined to play for Philadelphia in 1970, despite a $100,000 salary offer, and he sat out the year. After the season was concluded, Philadelphia sold its rights to Flood to the Washington Senators. Washington and the petitioner were able to come to terms for 1971 at a salary of $110,000. 8 Flood started the season but, apparently because he was dissatisfied with his performance, he left the Washington club on April 27, early in the campaign. He has not played baseball since then.

On appeal, the Second Circuit felt "compelled to affirm." 443 F.2d 264, 265 (1971). It regarded the issue of state law as one of first impression, but concluded that the Commerce Clause precluded its application. Judge Moore added a concurring opinion in which he predicted, with respect to the suggested overruling of Federal Baseball and Toolson, that "there is no likelihood that such an event will occur." 9 443 F.2d, at 268, 272. [407 U.S. 258, 269]

A. Federal Baseball Club v. National League, 259 U.S. 200 (1922), was a suit for treble damages instituted by a member of the Federal League (Baltimore) against the National and American Leagues and others. The plaintiff obtained a verdict in the trial court, but the Court of Appeals reversed. The main brief filed by the plaintiff with this Court discloses that it was strenuously argued, among other things, that the business in which the defendants were engaged was interstate commerce; that the interstate relationship among the several clubs, located as they were in different States, was predominant; that organized baseball represented an investment of colossal wealth; that it was an engagement in moneymaking; that gate receipts were divided by agreement between the home club and the visiting club; and that the business of baseball was to be distinguished from the mere playing of the game as a sport for physical exercise and diversion. See also 259 U.S., at 201 -206.

"The business is giving exhibitions of base ball, which are purely state affairs. . . . But the fact that in order to give the exhibitions the Leagues must induce free persons to cross state lines and [407 U.S. 258, 270] must arrange and pay for their doing so is not enough to change the character of the business. . . . [T]he transport is a mere incident, not the essential thing. That to which it is incident, the exhibition, although made for money would not be called trade or commerce in the commonly accepted use of those words. As it is put by the defendants, personal effort, not related to production, is not a subject of commerce. That which in its consummation is not commerce does not become commerce among the States because the transportation that we have mentioned takes place. To repeat the illustrations given by the Court below, a firm of lawyers sending out a member to argue a case, or the Chautauqua lecture bureau sending out lecturers, does not engage in such commerce because the lawyer or lecturer goes to another State.

"If we are right the plaintiff's business is to be described in the same way and the restrictions by contract that prevented the plaintiff from getting players to break their bargains and the other conduct charged against the defendants were not an interference with commerce among the States." 259 U.S., at 208 -209. 10 [407 U.S. 258, 271]

B. Federal Baseball was cited a year later, and without disfavor, in another opinion by Mr. Justice Holmes for a unanimous Court. The complaint charged antitrust violations with respect to vaudeville bookings. It was held, however, that the claim was not frivolous and that the bill should not have been dismissed. Hart v. B. F. Keith Vaudeville Exchange, 262 U.S. 271 (1923). 11

In the years that followed, baseball continued to be subject to intermittent antitrust attack. The courts, however, rejected these challenges on the authority of Federal Baseball. In some cases stress was laid, although unsuccessfully, on new factors such as the development of radio and television with their substantial additional revenues to baseball. 12 For the most part, however, the Holmes opinion was generally and necessarily accepted as controlling authority. 13 And in the 1952 Report of the Subcommittee on Study of Monopoly Power of the House Committee on the Judiciary, H. R. Rep. No. 2002, 82d Cong., 2d Sess., 229, it was said, in conclusion:

"On the other hand the overwhelming preponderance of the evidence established baseball's need for some sort of reserve clause. Baseball's history shows that chaotic conditions prevailed when there was no reserve clause. Experience points to no feasible substitute to protect the integrity of the game or to guarantee a comparatively even competitive [407 U.S. 258, 273] struggle. The evidence adduced at the hearings would clearly not justify the enactment of legislation flatly condemning the reserve clause."

C. The Court granted certiorari, 345 U.S. 963 (1953), in the Toolson, Kowalski, and Corbett cases, cited in nn. 12 and 13, supra, and, by a short per curiam (Warren, C. J., and Black, Frankfurter, DOUGLAS, Jackson, Clark, and Minton, JJ.), affirmed the judgments of the respective courts of appeals in those three cases. Toolson v. New York Yankees, Inc., 346 U.S. 356 (1953). Federal Baseball was cited as holding "that the business of providing public baseball games for profit between clubs of professional baseball players was not within the scope of the federal antitrust laws," 346 U.S., at 357 , and:

". . . If the Toolson holding is to be expanded - or contracted - the appropriate remedy lies with Congress." 348 U.S., at 228 -230.

E. United States v. International Boxing Club, 348 U.S. 236 (1955), was a companion to Shubert and was decided the same day. This was a civil antitrust action against defendants engaged in the business of promoting professional championship boxing contests. Here again the District Court had dismissed the complaint in reliance upon Federal Baseball and Toolson. The Chief Justice observed that "if it were not for Federal Baseball and Toolson, we think that it would be too clear for dispute that the Government's allegations bring the defendants within the scope of the Act." 348 U.S., at 240 -241. He pointed out that the defendants relied on the two baseball cases but also would have been content with a more restrictive interpretation of them than the Shubert defendants, for the boxing defendants argued that the cases immunized only businesses that involve exhibitions of an athletic nature. The Court accepted neither argument. It again noted, 348 U.S., at 242 , that "Toolson neither overruled Federal Baseball nor necessarily reaffirmed all that was said in Federal Baseball." It stated:

"The controlling consideration in Federal Baseball and Hart was, instead, a very practical one - the degree of interstate activity involved in the particular business under review. It follows that stare decisis cannot help the defendants here; for, contrary to their argument, Federal Baseball did not hold that all businesses based on professional sports were outside the scope of the antitrust laws. The issue confronting us is, therefore, not whether a previously granted exemption should continue, [407 U.S. 258, 277] but whether an exemption should be granted in the first instance. And that issue is for Congress to resolve, not this Court." 348 U.S., at 243 .

The Court noted the presence then in Congress of various bills forbidding the application of the antitrust laws to "organized professional sports enterprises"; the holding of extensive hearings on some of these; subcommittee opposition; a postponement recommendation as to baseball; and the fact that "Congress thus left intact the then-existing coverage of the antitrust laws." 348 U.S., at 243 -244.

Mr. Justice Frankfurter, joined by Mr. Justice Minton, dissented. "It would baffle the subtlest ingenuity," he said, "to find a single differentiating factor between other sporting exhibitions . . . and baseball insofar as the conduct of the sport is relevant to the criteria or considerations by which the Sherman Law becomes applicable to a `trade or commerce.'" 348 U.S., at 248 . He went on:

This Court reversed with an opinion by Mr. Justice Clark. He said that the Court made its ruling in Toolson "because it was concluded that more harm would be done in overruling Federal Baseball than in upholding a ruling which at best was of dubious validity." 352 U.S., at 450 . He noted that Congress had not acted. He then said:

"All this, combined with the flood of litigation that would follow its repudiation, the harassment that would ensue, and the retroactive effect of such a decision, led the Court to the practical result that [407 U.S. 258, 279] it should sustain the unequivocal line of authority reaching over many years.

Mr. Justice Frankfurter dissented essentially for the reasons stated in his dissent in International Boxing, [407 U.S. 258, 280] 352 U.S., at 455 . Mr. Justice Harlan, joined by MR. JUSTICE BRENNAN, also dissented because he, too, was "unable to distinguish football from baseball." 352 U.S., at 456 . Here again the dissenting Justices did not call for the overruling of the baseball decisions. They merely could not distinguish the two sports and, out of respect for stare decisis, voted to affirm.

G. Finally, in Haywood v. National Basketball Assn., 401 U.S. 1204 (1971), MR. JUSTICE DOUGLAS, in his capacity as Circuit Justice, reinstated a District Court's injunction pendente lite in favor of a professional basketball player and said, "Basketball . . . does not enjoy exemption from the antitrust laws." 401 U.S., at 1205 . 15

I. Legislative proposals have been numerous and persistent. Since Toolson more than 50 bills have been introduced in Congress relative to the applicability or nonapplicability of the antitrust laws to baseball. 17 A few of these passed one house or the other. Those that did would have expanded, not restricted, the reserve system's exemption to other professional league sports. And the Act of Sept. 30, 1961, Pub. L. 87-331, 75 Stat. 732, and the merger addition thereto effected by the Act of Nov. 8, 1966. Pub. L. 89-800, 6 (b), [407 U.S. 258, 282] 80 Stat. 1515, 15 U.S.C. 1291-1295, were also expansive rather than restrictive as to antitrust exemption. 18

4. Other professional sports operating interstate - football, [407 U.S. 258, 283] boxing, basketball, and, presumably, hockey 19 and golf 20 - are not so exempt.

This emphasis and this concern are still with us. We continue to be loath, 50 years after Federal Baseball and almost two decades after Toolson, to overturn those cases judicially when Congress, by its positive inaction, [407 U.S. 258, 284] has allowed those decisions to stand for so long and, far beyond mere inference and implication, has clearly evinced a desire not to disapprove them legislatively.

The conclusion we have reached makes it unnecessary for us to consider the respondents' additional argument that the reserve system is a mandatory subject of collective bargaining and that federal labor policy therefore exempts the reserve system from the operation of federal antitrust laws. 22

"Without re-examination of the underlying issues, the [judgment] below [is] affirmed on the authority of Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs, supra, so far as that decision determines that Congress had no intention of including the business of baseball within the scope of the federal antitrust laws." 346 U.S., at 357 .

[ Footnote 2 ] See generally The Baseball Encyclopedia (1969); L. Ritter, The Glory of Their Times (1966); 1 & 2 H. Seymour, Baseball (1960, 1971); 1 & 2 D. Voigt, American Baseball (1966, 1970).

[ Footnote 3 ] These are names only from earlier years. By mentioning some, one risks unintended omission of others equally celebrated.

[ Footnote 4 ] Millions have known and enjoyed baseball. One writer knowledgeable in the field of sports almost assumed that everyone did until, one day, he discovered otherwise:

[ Footnote 7 ] Concededly supported by the Major League Baseball Players Association, the players' collective-bargaining representative. Tr. of Oral Arg. 12.

[ Footnote 8 ] The parties agreed that Flood's participating in baseball in 1971 would be without prejudice to his case.

[ Footnote 9 ] "And properly so. Baseball's welfare and future should not be for politically insulated interpreters of technical antitrust statutes but rather should be for the voters through their elected representatives. If baseball is to be damaged by statutory regulation, let the congressman face his constituents the next November and also face the consequences of his baseball voting record." 443 F.2d, at 272.

Cf. Judge Friendly's comments in Salerno v. American League, 429 F.2d 1003, 1005 (CA2 1970), cert. denied, sub nom. Salerno v. Kuhn, 400 U.S. 1001 (1971):

"We freely acknowledge our belief that Federal Baseball was not one of Mr. Justice Holmes' happiest days, that the rationale of Toolson is extremely dubious and that, to use the Supreme Court's [407 U.S. 258, 269] own adjectives, the distinction between baseball and other professional sports is `unrealistic,' `inconsistent' and `illogical.'. . . While we should not fall out of our chairs with surprise at the news that Federal Baseball and Toolson had been overruled, we are not at all certain the Court is ready to give them a happy despatch."

[ Footnote 10 ] "What really saved baseball, legally at least, for the next half century was the protective canopy spread over it by the United States Supreme Court's decision in the Baltimore Federal League anti-trust suit against Organized Baseball in 1922. In it Justice Holmes, speaking for a unanimous court, ruled that the business of giving baseball exhibitions for profit was not `trade or commerce in the commonly-accepted use of those words' because `personal effort, not related to production, is not a subject of commerce'; nor was it interstate, because the movement of ball clubs across state lines was merely `incidental' to the business. It should be noted that, contrary to what many believe, Holmes did call baseball a business; time and again those who have not troubled to read the text of the decision have claimed incorrectly that the court said baseball was a sport and not a business." 2 H. Seymour, Baseball 420 (1971).

[ Footnote 11 ] On remand of the Hart case the trial court dismissed the complaint at the close of the evidence. The Second Circuit affirmed on the ground that the plaintiff's evidence failed to establish that the interstate transportation was more than incidental. 12 F.2d 341 (1926). This Court denied certiorari, 273 U.S. 703 (1926).

[ Footnote 12 ] Toolson v. New York Yankees, Inc., 101 F. Supp. 93 (SD Cal. 1951), aff'd, 200 F.2d 198 (CA9 1952); Kowalski v. Chandler, 202 F.2d 413 (CA6 1953). See Salerno v. American League, 429 F.2d 1003 (CA2 1970), cert, denied, sub nom. Salerno v. Kuhn, 400 U.S. 1001 (1971). But cf. Gardella v. Chandler, 172 F.2d 402 (CA2 1949) (this case, we are advised, was subsequently settled); Martin v. National League Baseball Club, 174 F.2d 917 (CA2 1949).

[ Footnote 13 ] Corbett v. Chandler, 202 F.2d 428 (Ca6 1953); Portland Baseball Club, Inc. v. Baltimore Baseball Club, Inc., 282 F.2d 680 (CA9 1960); Niemiec v. Seattle Rainier Baseball Club, Inc., 67 F. Supp. 705 (WD Wash. 1946). See State v. Milwaukee Braves, Inc., 31 Wis. 2d 699, 144 N. W. 2d 1, cert. denied, 385 U.S. 990 (1966).

[ Footnote 14 ] The case's final chapter is International Boxing Club v. United States, 358 U.S. 242 (1959).

[ Footnote 15 ] See also Denver Rockets v. All-Pro Management, Inc., 325 F. Supp. 1049, 1060 (CD Cal. 1971); Washington Professional Basketball Corp. v. National Basketball Assn., 147 F. Supp. 154 (SDNY 1956).

[ Footnote 16 ] Neville, Baseball and the Antitrust Laws, 16 Fordham L. Rev. 208 (1947); Eckler, Baseball - Sport or Commerce?, 17 U. Chi. L. Rev. 56 (1949); Comment, Monopsony in Manpower: Organized Baseball Meets the Antitrust Laws, 62 Yale L. J. 576 (1953); P. Gregory, The Baseball Player, An Economic Study, c. 19 (1956); Note, The Super Bowl and the Sherman Act: Professional Team Sports and the Antitrust Laws, 81 Harv. L. Rev. 418 (1967); The Supreme Court, 1953 Term, 68 Harv. L. Rev. 105, 136-138 (1954); The Supreme Court, 1956 Term, 71 Harv. L. Rev. 94, 170-173 (1957); Note, 32 Va. L. Rev. 1164 (1946); Note, 24 Notre Dame Law. 372 (1949); Note, 53 Col. L. Rev. 242 (1953); Note, 22 U. Kan. City L. Rev. 173 (1954); Note, 25 Miss. L. J. 270 (1954); Note, 29 N. Y. U. L. Rev. 213 (1954); Note, 105 U. Pa. L. Rev. 110 (1956); Note, 32 Texas L. Rev. 890 (1954); Note, 35 B. U. L. Rev. 447 (1955); Note, 57 Col. L. Rev. 725 (1957); Note, 23 Geo. Wash. L. Rev. 606 (1955); Note, 1 How. L. J. 281 (1955); Note, 26 Miss. L. J. 271 (1955); Note, 9 Sw. L. J. 369 (1955); Note, 29 Temple L. Q. 103 (1955); Note, 29 Tul. L. Rev. 793 (1955); Note, 62 Dick. [407 U.S. 258, 281] L. Rev. 96 (1957); Note, 11 Sw. L. J. 516 (1957); Note, 36 N.C. L. Rev. 315 (1958); Note, 35 Fordham L. Rev. 350 (1966); Note, 8 B. C. Ind. & Com. L. Rev. 341 (1967); Note, 13 Wayne L. Rev. 417 (1967); Note, 2 Rutgers-Camden L. J. 302 (1970); Note, 8 San Diego L. Rev. 92 (1970); Note, 12 B. C. Ind. & Com. L. Rev. 737 (1971); Note, 12 Wm. & Mary L. Rev. 859 (1971).

[ Footnote 17 ] Hearings on H. R. 5307 et al. before the Antitrust Subcommittee of the House Committee on the Judiciary, 85th Cong., 1st Sess. (1957); Hearings on H. R. 10378 and S. 4070 before the Subcommittee on Antitrust and Monopoly of the Senate Committee on the Judiciary, 85th Cong., 2d Sess. (1958); Hearings on H. R. 2370 et al. before the Antitrust Subcommittee of the House Committee on the Judiciary, 86th Cong., 1st Sess. (1959) (not printed); Hearings on S. 616 and S. 886 before the Subcommittee on Antitrust and Monopoly of the Senate Committee on the Judiciary, 86th Cong., 1st Sess. (1959); Hearings on S. 3483 before the Subcommittee on Antitrust and Monopoly of the Senate Committee on the Judiciary, 86th Cong., 2d Sess. (1960); Hearings on S. 2391 before the Subcommittee on Antitrust and Monopoly of the Senate Committee on the Judiciary, 88th Cong., 2d Sess. (1964); S. Rep. No. 1303, 88th Cong., 2d Sess. (1964); Hearings on S. 950 before the Subcommittee on Antitrust and Monopoly of the Senate Committee on the Judiciary, 89th Cong., 1st Sess. (1965); S. Rep. No. 462, 89th Cong., 1st Sess. (1965). Bills introduced in the 92d Cong., 1st Sess., and bearing on the subject are S. 2599, S. 2616, H. R. 2305, H. R. 11033, and H. R. 10825.

[ Footnote 18 ] Title 15 U.S.C. 1294 reads:

[ Footnote 20 ] Deesen v. Professional Golfers' Assn., 358 F.2d 165 (CA9), cert. denied, 385 U.S. 846 (1966).

[ Footnote 21 ] See Brief for Respondent in Federal Baseball, No. 204, O. T. 1921, p. 67, and in Toolson, No. 18, O. T. 1953, p. 30. See also State v. Milwaukee Braves, Inc., 31 Wis. 2d 699, 144 N. W. 2d 1, cert. denied, 385 U.S. 990 (1966).

[ Footnote 22 ] See Jacobs & Winter, Antitrust Principles and Collective Bargaining by Athletes: Of Superstars in Peonage, 81 Yale L. J. 1 (1971), suggesting present-day irrelevancy of the antitrust issue.

In 1922 the Court had a narrow, parochial view of commerce. With the demise of the old landmarks of that era, particularly United States v. Knight Co., 156 U.S. 1 , Hammer v. Dagenhart, 247 U.S. 251 , and Paul v. Virginia, 8 Wall. 168, the whole concept of commerce has changed.

Under the modern decisions such as Mandeville Island Farms v. American Crystal Sugar Co., 334 U.S. 219 ; United States v. Darby, 312 U.S. 100 ; Wickard v. Filburn, 317 U.S. 111 ; United States v. South-Eastern Underwriters Assn., 322 U.S. 533 , the power of Congress was recognized as broad enough to reach all phases of the vast operations of our national industrial system. [407 U.S. 258, 287] An industry so dependent on radio and television as is baseball and gleaning vast interstate revenues (see H. R. Rep. No. 2002, 82d Cong., 2d Sess., 4, 5 (1952)) would be hard put today to say with the Court in the Federal Baseball Club case that baseball was only a local exhibition, not trade or commerce.

If congressional inaction is our guide, we should rely upon the fact that Congress has refused to enact bills broadly exempting professional sports from antitrust regulation. 3 H. R. Rep. No. 2002, 82d Cong., 2d Sess. [407 U.S. 258, 288] (1952). The only statutory exemption granted by Congress to professional sports concerns broadcasting rights. 15 U.S.C. 1291-1295. I would not ascribe a broader exemption through inaction than Congress has seen fit to grant explicitly.

There can be no doubt "that were we considering the question of baseball for the first time upon a clean slate" 4 we would hold it to be subject to federal antitrust regulation. Radovich v. National Football League, 352 U.S. 445, 452 . The unbroken silence of Congress should not prevent us from correcting our own mistakes.

[ Footnote 1 ] While I joined the Court's opinion in Toolson v. New York Yankees, Inc., 346 U.S. 356 , I have lived to regret it; and I would now correct what I believe to be its fundamental error.

[ Footnote 2 ] Had this same group boycott occurred in another industry, Klor's, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207 ; United States v. Shubert, 348 U.S. 222 ; or even in another sport, Haywood v. National Basketball Assn., 401 U.S. 1204 (DOUGLAS, J., in chambers); Radovich v. National Football League, 352 U.S. 445 ; United States v. International Boxing Club, 348 U.S. 236 ; we would have no difficulty in sustaining petitioner's claim.

[ Footnote 3 ] The Court's reliance upon congressional inaction disregards the wisdom of Helvering v. Hallock, 309 U.S. 106, 119 -121, where we said:

"Nor does want of specific Congressional repudiations . . . serve as an implied instruction by Congress to us not to reconsider, in the light of new experience . . . those decisions . . . . It would require very persuasive circumstances enveloping Congressional silence to [407 U.S. 258, 288] debar this Court from re-examining its own doctrines. . . . Various considerations of parliamentary tactics and strategy might be suggested as reasons for the inaction of . . . Congress, but they would only be sufficient to indicate that we walk on quicksand when we try to find in the absence of corrective legislation a controlling legal principle."

And see United States v. South-Eastern Underwriters Assn., 322 U.S. 533, 556 -561.

[ Footnote 4 ] This case gives us for the first time a full record showing the reserve clause in actual operation.

To non-athletes it might appear that petitioner was virtually enslaved by the owners of major league baseball clubs who bartered among themselves for his services. But, athletes know that it was not servitude that bound petitioner to the club owners; it was the reserve system. The essence of that system is that a player is bound to the club with which he first signs a contract for the rest of his playing days. 2 He cannot escape from the club except by retiring, and he cannot prevent the club from assigning his contract to any other club.

Petitioner brought this action in the United States District Court for the Southern District of New York. He alleged, among other things, that the reserve system was an unreasonable restraint of trade in violation of [407 U.S. 258, 290] federal antitrust laws. 3 The District Court thought itself bound by prior decisions of this Court and found for the respondents after a full trial. 309 F. Supp. 793 (1970). The United States Court of Appeals for the Second Circuit affirmed. 443 F.2d 264 (1971). We granted certiorari on October 19, 1971, 404 U.S. 880 , in order to take a further look at the precedents relied upon by the lower courts.

This is a difficult case because we are torn between the principle of stare decisis and the knowledge that the decisions in Federal Baseball Club v. National League, 259 U.S. 200 (1922), and Toolson v. New York Yankees, Inc., 346 U.S. 356 (1953), are totally at odds with more recent and better reasoned cases.

In Federal Baseball Club, a team in the Federal League brought an antitrust action against the National and American Leagues and others. In his opinion for a unanimous Court, Mr. Justice Holmes wrote that the business being considered was "giving exhibitions of base ball, which are purely state affairs." 259 U.S., at 208 . Hence, the Court held that baseball was not within the purview of the antitrust laws. Thirty-one years later, the Court reaffirmed this decision, without reexamining it, in Toolson, a one-paragraph per curiam opinion. Like this case, Toolson involved an attack on the reserve system. The Court said:

"The business has . . . been left for thirty years to develop, on the understanding that it was not [407 U.S. 258, 291] subject to existing antitrust legislation. The present cases ask us to overrule the prior decision and, with retrospective effect, hold the legislation applicable. We think that if there are evils in this field which now warrant application to it of the antitrust laws it should be by legislation." Id., at 357.

"Antitrust laws in general, and the Sherman Act in particular, are the Magna Carta of free enterprise. They are as important to the preservation of economic freedom and our free-enterprise system as the Bill of Rights is to the protection of our fundamental personal freedoms. . . . Implicit in such freedom is the notion that it cannot be foreclosed with respect to one sector of the economy [407 U.S. 258, 292] because certain private citizens or groups believe that such foreclosure might promote greater competition in a more important sector of the economy." United States v. Topco Associates, Inc., 405 U.S. 596, 610 (1972).

This Court has faced the interrelationship between the antitrust laws and the labor laws before. The decisions make several things clear. First, "benefits to organized labor cannot be utilized as a cat's-paw to pull employer's chestnuts out of the antitrust fires." United States v. Women's Sportswear Manufacturers Assn., 336 U.S. 460, 464 (1949). See also Allen Bradley Co. v. Local Union No. 3, 325 U.S. 797 (1945). Second, the very nature of a collective-bargaining agreement mandates that the parties be able to "restrain" trade to a greater degree than management could do unilaterally. United States v. Hutcheson, 312 U.S. 219 (1941); United Mine Workers v. Pennington, 381 U.S. 657 (1965); Amalgamated Meat Cutters v. Jewel Tea, 381 U.S. 676 (1965); cf., Teamsters Union v. Oliver, 358 U.S. 283 (1959). Finally, it is clear that some cases can be resolved only by examining the purposes and the competing interests of the labor and antitrust statutes and by striking a balance.

It is apparent that none of the prior cases is precisely in point. They involve union-management agreements that work to the detriment of management's competitors. In this case, petitioner urges that the reserve system works to the detriment of labor. [407 U.S. 258, 295]

[ Footnote 2 ] As MR. JUSTICE BLACKMUN points out, the reserve system is not novel. It has been employed since 1887. See Metropolitan Exhibition Co. v. Ewing, 42 F. 198, 202-204 (CC SDNY 1890). The club owners assert that it is necessary to preserve effective competition and to retain fan interest. The players do not agree and argue that the reserve system is overly restrictive. Before this lawsuit was instituted, the players refused to agree that the reserve system should be a part of the collective-bargaining contract. Instead, the owners and players agreed that the reserve system would temporarily remain in effect while they jointly investigated possible changes. Their activity along these lines has halted pending the outcome of this suit.

[ Footnote 3 ] Petitioner also alleged a violation of state antitrust laws, state civil rights laws, and of the common law, and claimed that he was forced into peonage and involuntary servitude in violation of the Thirteenth Amendment to the United States Constitution. Because I believe that federal antitrust laws govern baseball, I find that state law has been pre-empted in this area. Like the lower courts, I do not believe that there has been a violation of the Thirteenth Amendment.

[ Footnote 4 ] In the past this Court has not hesitated to change its view as to what constitutes interstate commerce. Compare United States v. Knight Co., 156 U.S. 1 (1895), with Mandeville Island Farms v. American Crystal Sugar Co., 334 U.S. 219 (1948), and United States v. Darby, 312 U.S. 100 (1941).

[ Footnote 6 ] The lower courts did not reach the question of whether, assuming the antitrust laws apply, they have been violated. This should be considered on remand.

[ Footnote 7 ] Cf. United States v. Hutcheson, 312 U.S. 219 (1941).

[ Footnote 8 ] Jacobs & Winter, Antitrust Principles and Collective Bargaining by Athletes: Of Superstars in Peonage, 81 Yale L. J. 1, 22 (1971). [407 U.S. 258, 297]

 
 
Banner

Poll

Should MLB Force Jeffery Loria to Sell the Marlins?