By Brian C.
Editor’s note – This article originally appeared on AstrosConnection.com on August 10, 2001.
The two US Supreme Court cases that were chiefly involved in the decision that Major League Baseball does not comprise interstate commerce are Federal Base Ball Club of Baltimore, Inc., v. National League of Professional Base Ball Clubs et al. (1922), wherein this upstart “federal club” alleged antitrust violations after being gobbled up by the National League; and Toolson v. New York Yankees (1953), which addressed the Sherman Act compliance of reserve clauses in player contracts. The decisions in these cases concluded and affirmed, respectively, that baseball cannot be regulated under existing antitrust law. Our suspicion, that these conclusions were predicated largely on the argument that you just don’t mess with baseball, were well founded.
It was the 7-2 opinion in the Federal Club case that organized baseball does not fall into the jurisdiction of the antitrust acts because there is no interstate commerce involved. Justice Holmes writes in the majority opinion:
“The business is giving exhibitions of base ball, which are purely state affairs. It is true that in order to attain for these exhibitions the great popularity that they have achieved, competitions must be arranged between clubs from different cities and States. But the fact that in order to give the exhibitions the Leagues must induce free persons to cross state lines and must arrange and pay for their doing so is not enough to change the character of the business. According to the distinction insisted upon in Hooper v. California, 15 S. Sup. Ct. 207, the 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 of commerce in the commonly accepted use of those words. As it is put by defendant, 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.”
The case referred to here, Hooper v. California, in turn references a previous opinion, from Paul v. Virginia:
“Issuing a policy of insurance is not a transaction of commerce. The policies are simply contracts of indemnity against loss by fire, entered into between the corporations and the assured, for a consideration paid by the latter. These contracts are not articles of commerce in any proper meaning of the word. They are not subjects of trade and barter, offered in the market as something having an existence and value independent of the parties to them. They are not commodities to be shipped or forwarded from one state to another, and then put up for sale…”
Sounding much like the yet-to-come Federal Club opinion, Paul v. Virginia concludes:
“They are, then, local transactions, and are governed by the local law. They do not constitute a part of the commerce between the states any more than a contract for the purchase and sale of goods in Virginia by a citizen of New York whilst in Virginia would constitute a portion of such commerce.”
The conclusion of this bumpy discourse, which might be called a ‘professional services argument’, has some validity. As it concerns the services provided by baseball players, as distinct from other business that might accompany that service, Justice Holmes successfully distinguishes baseball owners from railroad barons.
Around the same time as the Federal Club case, an independent stage manager had sued a conglomerate of theatrical production companies that he claimed had strong-armed him out of business. Lower courts dismissed the case, one citing the recent Federal Club ruling as precedent. But the US Supreme court overturned the dismissal in Hart v. B.F. Keith Vaudeville Exchange at al., sending the case back for a trial.
Professional baseball organizations had plenty in common with B.F. Keith and his cohort of Vaudevillian monopolizers. For instance, both transported performers across state lines to perform for paying crowds at local venues. The Supreme Court did not illuminate any inherent difference in the sort of services being provided by these two industries. In the language of Federal Club, both involved exhibitions accompanied by the incidental transport of goods and persons across state lines. But the Court noted in Hart a difference in the degree to which interstate transportation is merely incidental:
“The defendants contend and the judge below was of opinion that the dominant object of all the arrangements was the personal performance of the actors, all transportation being merely incidental to that, and therefore that the case is governed by Federal Baseball Club v. National League, 259 U.S. 200 , 42 Sup. Ct. 465. On the other hand it is argued that in the transportation of vaudeville acts the apparatus sometimes is more important than the performers and that the defendants’ conduct is within the statute to that extent at least.”
“The bill was brought before the decision of the Baseball Club Case, and it may be that what in general is incidental, in some instances may rise to a magnitude that requires it to be considered independently. The logic of the general rule as to jurisdiction is obvious and the case should be decided upon the merits unless the want of jurisdiction is entirely clear. What relief, if any, could be given and how far it could go it is not yet time to discuss. Decree reversed.”
Here is the first evidence of what looks like a double standard for baseball. The existence of such a thing in the nation’s highest Court is not surprising. On one hand is baseball, which is more American than Martha Washington’s apple pie; on the other hand is a racy fad perpetuated by limp-wristed foreigners. While Hart simply allowed a complaint to be heard in a lower court, the argument was telling. The Court was reluctant to give the slightest leeway to corporate collusion artists, while carefully differentiating this industry from organized baseball. For the time being, baseball was allowed operate in noncompetitive ways on the grounds that the magnitude of its incidental interstate activities was not great enough to warrant regulation.
The argument was challenged in 1953 in the form of Toolson v. New York Yankees. While again ruling in favor of conglomerated baseball, the court backed away from the “magnitude of incidentals” defense. By 1953, it seems to have become unavoidably obvious that the incidental activities of baseball could be called nothing but interstate commerce. The dissenting justices wrote bluntly about this point:
“Whatever may have been the situation when the Federal Baseball Club case was decided in 1922, I am not able to join today’s decision which, in effect, announces that organized baseball, in 1953, still is not engaged in interstate trade or commerce. In the light of organized baseball’s well-known and widely distributed capital investments used in conducting competitions between teams constantly traveling between states, its receipts and expenditures of large sums transmitted between states, its numerous purchases of materials in interstate commerce, the attendance at its local exhibitions of large audiences often traveling across state lines, its radio and television activities which expand its audiences beyond state lines, its sponsorship of interstate advertising, and its highly organized ‘farm system’ of minor league baseball clubs, coupled with restrictive contracts and understandings between individuals and among clubs or leagues playing for profit throughout the United States, and even in Canada, Mexico and Cuba, it is a contradiction in terms to say that the defendants in the cases before us are not now engaged in interstate trade or commerce as those terms are used in the Constitution of the United States and in the Sherman Act.”
The seven Justices in favor apparently agreed. They used a different argument to shelter baseball from trustbusters, and it was a home run:
“Congress has had [Federal Baseball Club] under consideration but has not seen fit to bring such business under these laws by legislation having prospective effect. The business has thus been left for thirty years to develop, on the understanding that it was not 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. Without re-examination of the underlying issues, the judgments below are 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.”
By giving the ball to Congress – and even so disavowing ownership of the responsibility as to claim not to have had it in thirty years – the Court ensured that baseball would never be regulated under antitrust law. Elected officials would not dare to tamper with the national pastime. They had also removed the Court from the awkward position of having to contradict its own edicts, leaving that business to professionals.
Summary
After the vigorous antitrust legislation of the progressive era, somebody noticed that baseball behaved much like Big Steel. Because baseball involved interstate commerce, it should be punished for its anticompetitive crimes. The Supreme Court responded that there is a certain line dividing that which simply appears to be interstate commerce from real interstate commerce. Baseball clubs do not cross the line; dancing men in tights do. If ever it were to cross the line, perhaps by making nationwide deals with purveyors of moving pictures that are beamed into American homes using all the latest science, then Congress would be sure to act forcefully on the matter. If Congress does not act then it is not for fear of the electoral consequences, but because it had thoughtfully crafted its antitrust legislation to apply to everything except baseball. They just did not think it was necessary to actually write that down in the public law, because it is baseball.
The Court and Congress are all trying to do the right thing, of course. Nobody knows what would happen if antitrust lawyers were unleashed on the institution of baseball. The Court’s abdication of responsibility to Congress sounds a little sketchy. Amending the antitrust acts to exclude baseball would keep the Court out of that unusual position in the future, and place above the table the proposition that baseball was not meant to be regulated. But Congress may rightly fear that changes to antitrust rules may open legal avenues for monopolizers whose business is not so iconic as baseball.
So to clear the air about the Toolson decision, and prevent such contortion in the land’s High Court in the future, I propose minor revisions that would make the Justices’ stance explicit:
Amendment I
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, even as concerns John Rocker, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.
Amendment II
A well regulated militia and baseball, being necessary to the security of a free state, the right of the people to keep and bear baseballs, baseball gloves, batting helmets, catcher’s attire, arms, and baseball bats shall not be infringed.
Amendment III
No soldier shall, in time of peace be quartered in any fieldhouse, without the consent of the owner, nor in time of war, but in a manner to be prescribed by law.
Amendment IV
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized, which must be unaffiliated with baseball.
Amendment V
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb, or once if a professional ballplayer; nor shall be compelled in any criminal case to be a witness against himself or a professional ballplayer, nor be deprived of life, baseball, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
Amendment VI
In all criminal prosecutions, the accused shall enjoy the right to baseball and a speedy and public trial, by an impartial jury of the state and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defense.
Amendment VII
In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any court of the United States, than according to the rules of the common law, except where required to ensure the liberty and prosperity of baseball.
Amendment VIII
Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted, nor baseball players from large-market teams suspended during playoffs.
Amendment IX
The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by baseball or the people.
Amendment X
The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to Bud Selig, or the states respectively, or to the people