The Anti-Trust Exemption

United States Supreme Court Building

On February 25, 1957, in a 6-3 decision, the U.S. Supreme Court decided that football, unlike baseball, was not exempt from antitrust laws. The decision was based, in part, on the fact that baseball’s anti-trust exemption had recently been upheld in other decisions, such as Toolson v. New York Yankees in 1952.

In 1922, the Supreme Court had ruled that baseball was not interstate commerce and, thus, not subject to the Sherman Act. The unanimous decision, written by Justice Oliver Wendell Holmes, Jr., concluded:

“The business is giving exhibitions of baseball, 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. … 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.”

The issue was brought before the Supreme Court again in the case Flood v. Kuhn and, more recently, in City of San Jose v. Office of the Commissioner of Baseball. In October 2015, the Supreme decided not to heart the San Jose case, meaning the January 2015 appeals court decision stating that the city of San Jose could not seek a court order allowing the Athletics to move to their city remained in place.

I wonder what the next challenge will be.

~ baseballrebecca




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