The Baseball Trust: A History of Baseball’s Antitrust Exemption by Stuart Banner (review)

When it comes to the vagaries of antitrust law, most baseball fans know at least one thing: that Organized Baseball is exempt from it. Why this is and how it came about is the focus of Banner’s informative new book, which adds to the growing scholarship that urges a reconsideration of the exemption’s roots. As Banner stresses, what we think we know about this subject may very well be, even on a rudimentary level, inaccurate. As such, fans interested in delving deeply into a subject that confounds even legal experts would benefit by spending some time with this highly-readable text despite its missteps along the way.

Banner does an excellent job discussing the Supreme Court’s 1922 Federal Baseball decision, which forms the foundation for the game’s alleged exemption. As Banner convincingly explains, that case did not, after all, exempt Organized Baseball from the federal antitrust laws. Rather, the decision was grounded in the Commerce Clause of the US Constitution, a distinction that might seem irrelevant to those without a legal background but one which is crucial in understanding precisely what the decision held (and, just as importantly, what it did not). In sum, the Court never reached the exemption question because it held that, as a threshold matter, Organized Baseball was not subject to federal regulation in any way because its activities did not significantly impact interstate commerce such that Congress’s power to regulate could be triggered. Consequently, while this meant most immediately that the Sherman Antitrust Act was not applicable to baseball, it also meant more broadly that baseball was beyond the reach of any sort of federal regulation. Although popular lore has it that this decision was an example of the Court ruling out of a desire to treat baseball differently than other sports and industries, given that it was, after all, our national pastime, Banner correctly notes that this was hardly the case. Rather, the decision was in line with the Court’s overall interpretation of the Commerce Clause at the time, which was quite limited indeed. Grounding the decision in the Commerce Clause rather than the Sherman Act would be significant in the years to come, when the Court greatly expanded Congress’s power to regulate pursuant to the Commerce Clause in the New Deal era. It is here, however, where the cracks in Banner’s analysis begin to show.

Banner’s objective in The Baseball Trust is to offer up a reconsideration of the so-called baseball trilogy—the three Supreme Court cases that many believe established and maintained baseball’s special status. In his discussion of all three cases, Federal Baseball (as discussed above), as well as the Court’s 1953 Toolson and 1972 Flood decisions, he strains to present a narrative that explains away each decision as rationally-reached (although, when taken together, with irrational results). Though he succeeds in his discussion of Federal Baseball, he struggles when he gets to Toolson. In many ways, understanding Toolson is the key to understanding all three cases—here was the Court’s first opportunity to reconsider Federal Baseball under its expanded view of Congressional power pursuant to the Commerce Clause. If Federal Baseball was merely a “Commerce Clause” case, then now would be the time for the Court to discard it just as it had nearly all of the Commerce Clause cases that underpinned it (i.e., cases holding that various industries such as the insurance industry were not subject to Congressional regulation due to insufficient impact on interstate commerce). However, the Court did no such thing. Instead, in a one-paragraph, unsigned opinion, the Court reaffirmed Federal Baseball. In the process, it seemingly implied that Federal Baseball was a decision grounded in the Sherman Act after all, and not more broadly within the Commerce Clause. Although Banner correctly concludes that “As an empirical, historical matter, the view adopted by the Court in Toolson… was almost certainly...