Redeeming the Supreme Court: the Structure Behind the Baseball Trilogy and the Scope of the Baseball Antitrust Exemption

• Publication year: 2020

Redeeming the Supreme Court: The Structure Behind the Baseball Trilogy and the Scope of the Baseball Antitrust Exemption

Christian L. Neufeldt
Harvard University, Extension School

Redeeming the Supreme Court: The Structure Behind the Baseball Trilogy and the Scope of the Baseball Antitrust Exemption

Cover Page Footnote

ALM Candidate, Harvard University, Extension School. Dipl.-Jur. (JD/LLB equivalent), Georg-August University, School of Law, Göttingen (Germany) 2016; LLM, Tilburg University, Law School, Tilburg (The Netherlands) 2017; Grad. Cert. in Legal Studies, Harvard University, 2018. The author would like to thank Harvard Law School's Professor Peter A. Carfagna and Richard Volante, Esq. for their support on an earlier draft of this article.

REDEEMING THE SUPREME COURT: THE STRUCTURE BEHIND THE BASEBALL TRILOGY AND THE SCOPE OF THE BASEBALL ANTITRUST EXEMPTION

Christian L. Neufeldt¹

I. Introduction..............................................................................................23

II. The Baseball Trilogy..............................................................................28

A. FEDERAL BASEBALL CLUB OF BALTIMORE, INC. V. NATIONAL LEAGUE OF PROFESSIONAL BASEBALL CLUBS.........................................29

1. Facts......................................................................................................................31
2. The Terrapins' Argument.....................................................................................32
3. Organized Baseball's Argument...........................................................................34
4. The Opinion of the Court....................................................................................35

B. THE EVOLUTION OF FEDERAL BASEBALL.................................................36

1. Scholarly Debate....................................................................................................37
2. Gardella v. Chandler.................................................................................................. 38

C. TOOLSON V. NEW YORK YANKEES, INC........................................................40

1. Facts........................................................................................................................41
2. Toolson's Argument..............................................................................................42
3. The Yankees' Argument.......................................................................................43
4. The Opinion of the Court....................................................................................45

a. Federal Baseball and Congressional Intent...................................................46
b. Narrow Interpretation.................................................................................48
c. Formalist Interpretation .............................................................................. 49
d. Instrumentalist Interpretation ..................................................................... 51

D. FLOOD V. KUHN.......................................................................................................55

1. Facts ........................................................................................................................ 56
2. Flood's Argument..................................................................................................57
3. Kuhn's Argument..................................................................................................57

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4. The Opinion of the Court....................................................................................58

a. Restriction to the Reserve System..............................................................61
b. Creating the Exemption..............................................................................64
c. Excessive Stare Decisis................................................................................65
d. Doctrinal Changes........................................................................................67
e. Systematic Interpretation.............................................................................70

III. Approaches by the Lower Courts......................................................72

A. RESERVE SYSTEM.....................................................................................................73

1. Cases.......................................................................................................................73
2. Analysis...................................................................................................................74

B. THE BUSINESS OF BASEBALL..............................................................................75

1. Cases.......................................................................................................................75
2. Analysis...................................................................................................................79

C. BASEBALL'S UNIQUE CHARACTERISTICS AND NEEDS...........................80

1. Cases.......................................................................................................................80
2. Analysis...................................................................................................................82

IV. The Baseball Antitrust Exemption..................................................83

A. DEFINING THE SCOPE..........................................................................................84

1. Exempt Per Se.......................................................................................................84
2. The Business of Baseball......................................................................................85

B. LABOR RELATIONS.................................................................................................87
C. LEAGUE STRUCTURE AND BASEBALL RULES.............................................88
D. THIRD-PARTY AGREEMENTS.............................................................................89

1. Broadcasting Agreements.....................................................................................91
2. Licensing Agreements...........................................................................................93
3. Sponsorship Agreements and Concessions........................................................93

E. STATE LAW.................................................................................................................94

V. Conclusion..................................................................................................95

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I. INTRODUCTION

Sports commentator Shawn Krest considers Lena Blackburne's "Baseball Rubbing Mud"² to be "baseball's dirty secret" and its application the "strangest and least-understood ritual in baseball."³ Admittedly, the thought that a baseball may only be used in a game after "half-naked umps" or clubhouse attendants rub mud on them appears strange.⁴ Considering that Russel Aubrey Blackburne and his heirs have provided all of Major League Baseball (MLB) and Minor League Baseball (MiLB) with the same special mud since the 1930s, the fact that the reason for his nickname "Lena" is now lost to time seems the least odd aspect surrounding the mud-rubbing ritual.⁵ Yet, it is not only the umpires' different techniques for applying the mud that give method to the madness. While new white and shiny baseballs might be easy targets for batters, rubbing them with mud provides the grip that certain pitchers require.⁶ Still, manually covering all new baseballs in mud is "an odd, inconsistent, dirty practice."⁷

However, legal commentators might call the baseball antitrust exemption, baseball's strangest and least-understood aspect, its other "dirty secret." The creation of this exemption through three Supreme Court rulings in the "baseball trilogy,"⁸ and its subsequent application by the lower courts, is a similarly "odd, inconsistent, and dirty practice." As the name implies, the baseball antitrust exemption relieves professional baseball from antitrust scrutiny. The exemption's odd and inconsistent character is made apparent since the Court unequivocally subjects other professional sports,⁹ including team sports like basketball¹⁰ or football,¹¹ to antitrust laws. The dirty and muddied character of

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the exemption is clear from its very creation. After the Court issued a clean and straightforward opinion in Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs,¹² muddled interpretations within scholarly discussion shrouded what the Court had initially held.¹³ In Toolson v. New York Yankees, Inc.,¹⁴ the Supreme Court applied this muddled opinion to Federal Baseball. In Flood v. Kuhn,¹⁵ the Court presented the "dirty" exemption in its "game-ready" form.

As the exemption approaches its arguable centennial,¹⁶ not only has there has been an abundance of research published on the subject by scholarly commentators,¹⁷ but the courts themselves have repeatedly engaged with the exemption's scope as well.¹⁸ Considering that Stuart Banner's characterization of the baseball antitrust exemption as "one of the oddest features of our legal system"¹⁹ is among the more restrained descriptions of the exemption. Words like "odd, inconsistent, and dirty"²⁰ would not stand out from the legal discourse. Eldon L. Ham compares the baseball trilogy to the Salem witch trials and Plessy v. Ferguson,²¹ concluding that "the baseball antitrust boondoggle is no less obtuse and begs for reversal."²² He questions how one could "seriously trust the Court when it rules on abortion, voting rights, presidential elections, hanging chads, or more recently the Affordable Care Act" if it "officially pretend[s] baseball is not

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a business subject to antitrust laws."²³ Judge Friendly mentioned that, "Federal...