High Time for High Court to Revisit Antitrust Exemption


Publish Date:
February 17, 2015
Publication Title:
Daily Journal
Op-Ed or Opinion Piece Page(s) 5
  • William B. Gould IV, High Time for High Court to Revisit Antitrust Exemption, Daily Journal, February 17, 2015, p. 5.


From the op-ed:
In 1922, the U.S. Supreme Court, speaking through Justice Oliver Wendell Holmes, held in Federal Baseball that the exhibition of baseball games was not a business in interstate commerce within the meeting of the Sherman Antitrust Act. This opinion, delivered by a great jurist who suffered, like all baseball players, from what most have perceived to be a bad day, was nonetheless in tune with pre-New Deal interpretations of the commerce clause by the Supreme Court.

Soon, the Supreme Court’s recognition that other sports – football, boxing, basketball, hockey – were businesses within interstate commerce subject to antitrust law coupled with the advent of radio and television – through which baseball made substantial sums by beaming its message across states lines – made the Federal Baseball holding “one of federal law’s most enduring anomalies,” as Judge Alex Kozinski of the 9th U.S. Circuit Court of Appeals wrote last month.

The 9th Circuit properly noted that Congress has continued to acquiesce in Federal Baseball. Indeed, there has been more than acquiescence – if anything, downright affirmance. This is attributable to another anomaly – the Curt Flood Act of 1998, which reversed the centerfielder’s 1972 defeat at the hands of the high tribunal, where stare decisis dismissed his protest against a trade from the Saint Louis Cardinals to the Philadelphia Phillies.

Only the Supreme Court can change matters. But should it and will it?

Baseball, notwithstanding the Supreme Court’s resounding reiteration of antitrust applicability to professional football just a couple of years ago, continues to maintain that it is different and unique and, in its view, worthy of the judge-made exemption. Once of baseball’s major arguments is that professional baseball’s vast minor league system and territorial enclaves carved out for each franchise would be injured through antitrust law, which would spell ruination for the minor league system upon which baseball relies to train its talent.

At least two points undercut this argument. The first is that other sports, particularly basketball and hockey, and even football, are developing their own farm clubs, albeit on a more modest scale. The second is the rise of independent leagues, which provide for competition to the minor league system, has hardly harmed organized baseball.

Federal Baseball should be reversed in 2015 – but it is unlikely that that will happen.

Developments over the first part of the 21st century make it clear as ever that Federal Baseball was wrongly decided. It is always possible for this recognition to dawn on the court. But baseball is a part of big business, and this court seems unlikely to interfere with its undeserved privilege.