- Baseball on Trial: The Origin of Baseball’s Antitrust Exemption by Nathaniel Grow
In 1922, in Federal Baseball (259 US 200 ), the Supreme Court of the United States granted baseball an exemption from the Sherman Antitrust Act (1890). It is a decision which the Supreme Court has upheld in various other baseball and sporting cases. Nathaniel Grow observes that baseball “is not only the sole professional sports league to enjoy antitrust immunity, but is in fact the only industry in the country operating under a judicially created exemption from antitrust law” (p. 1). The Supreme Court itself, in Flood (407 US 258 ), admitted that this was “an anomaly.”
Grow maintains that critics “tend to judge the decision in light of the sport’s presentday commercial operations, however, rather than the state of the business in 1922, and frequently fail to fully consider the contours of the applicable law at the time” (p. 2). He also claims that there has been no thorough account of the Federal Baseball litigation.
The background to Federal Baseball was a trade war between Organized Baseball and the upstart Federal League, which began in 1914. The two competed for players and spectators in the 1914 and 1915 seasons. A compromise was reached which dealt out the Baltimore club of the Federal League. It mounted an antitrust action against this deal. Grow takes readers through the machinations of these actions and associated events. He draws on court records, transcript, newspaper accounts, and correspondence between lawyers and the major protagonists involved.
The cases can be divided into two categories: actions to enable or restrain players to move from one league to another and antitrust applications. With respect to the latter, there were six such cases. The litigants mounted essentially the same positions in the respective cases. Grow provides a descriptive account of the submissions, evidence, and decisions in the cases that results in a high degree of repetition and makes for somewhat dull reading. Grow would have been better advised to employ a more conceptual, rather than chronological, approach to overcome this problem. It is not clear that his championing of a “more thorough account” adds anything to an understanding of Federal Baseball. Academics do not employ Occam’s razor for nothing.
The Supreme Court’s reasoning in Federal Baseball turned on a narrow reading of “trade and commerce” in the Sherman Act. In previous cases, distinctions had been drawn between commerce and production, and the Court had downplayed the role of interstate trade. The Court ruled that the transport of players across state lines was “incidental” to the provision of “locally” staged games. Grow concludes that the Supreme Court’s decision accorded with current legal norms at that time (p. 3). This is also a conclusion of Scott Banner in The Baseball Trust: A History of Baseball’s Antitrust Exemption (2013), a book of which Grow was unaware, presumably because its publication occurred while his was in print.
Grow is somewhat overzealous in his defense of the Supreme Court in Federal Baseball. He says that in the 1930s and 1940s the Supreme Court transformed its thinking on [End Page 129] “interstate commerce” (p. 219). This is, in fact, incorrect, as he himself acknowledges on the next page. In 1923, in Hart, a case involving vaudeville entertainers (262 US 271 ) who traveled across state lines, it ruled that they were subject to the Sherman Act. Grow tries to distinguish the grounds on which these two decisions were determined (p. 221). Discovering that the Supreme Court used different reasoning to reach different decisions in cases that appear to have similar sets of facts is nothing more than stating a tautology. Banner’s observation that “[t]he understanding of interstate commerce underlying Federal Baseball was beginning to show signs of weakening” in Hart (p.92) is a more accurate description of events.
Grow does provide a thorough account of the various events involved in Federal Baseball. It is unclear, however, that it enhances knowledge...