Sunday, May 29, 2016

MLB's Anti-Trust Exemption Granted May 29, 1922

On This Day in Baseball History May 29, 1922: In the case Federal Baseball Club v. National League, 259 U.S. 200 (1922) aka Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs, The United States Supreme Court rules that organized baseball is a sport and not a business, which exempts major league clubs from antitrust laws and interstate commerce rules.

The case came about due to the attempts to start a third Major League in the form of the Federal League which was in operation from 1913-1915. Many of the Federal League clubs were bought out by the National and American Leagues with the exception of the Baltimore franchise of the Federal League. The city of Baltimore had prior experience with both National and American leagues in the past.

The Baltimore Orioles played in the National League from 1882-1899 and although they were very successful, the team was contracted when the N.L. went from a 12-team league to an 8-team league in 1899. Baltimore once again became a Major League city in Ban Johnson's new American League that began operations in 1901 as direct competition to the National League. As part of the agreement between the two leagues after hostilities ended, the American League was allowed to have a team play in the New York City market. Tammany Hall politicians, Frank J. Farrell and William Stephen Devery purchased the rights to the New York A.L. market and the Baltimore A.L. team (also known as the Orioles) was moved to New York City becoming the Highlanders and later the Yankees. Aside from the Federal League team that played in Baltimore from 1913-1915, the city of Baltimore would not beome a Major League city again until the St. Louis Browns moved to Baltimore for the 1954 season, adopting the Orioles moniker for the team. Back to the Federal's lawsuit.

The Federal League brought an anti-trust lawsuit during the offseason of 1914-1915 due to the attempts of both the National and American leagues to derail the advances made by the Federals via a monopolization of Baseball by the two established leagues. After years of legal wrangling and maneuvers, the case was argued on April 19, 1922 and the decision by the court in favor of the National League of Professional Baseball Clubs on May 29, 1922.

Justice Oliver Wendell Holmes
The decision, given by Justice Oliver Wendell Holmes, was summarized on the Justia website as follows:
1. The business of providing public baseball games for profit between clubs of professional baseball players in a league and between clubs of rival leagues, although necessarily involving the constantly repeated traveling of the players from one state to another, provided for, controlled, and disciplined by the organizations employing them, is not interstate commerce. P. 259 U. S. 208.
2. Held that an action for triple damages under the Anti-Trust Acts could not be maintained by a baseball club against baseball leagues and their constituent clubs, joined with individuals, for an alleged conspiracy to monopolize the baseball business resulting injuriously to the plaintiff. P. 259 U. S. 209.
269 F. 681, 50 App.D.C. 165, affirmed.
Error to a judgment of the Court of Appeals of the District of Columbia reversing a judgment for triple damages under the Anti-Trust Acts recovered by the
Page 259 U. S. 201
plaintiff in error in the Supreme Court of the District and directing that judgment be entered for the defendants.
Page 259 U. S. 207
The verdict has pretty much given Professional Baseball a free hand to do what it wanted though their power has slowly eroded due to the results stemming from the Flood v. Kuhn (407 U.S. 258) case. Though the decision in that case upheld MLB's anti-trust exemption by 5-3, it helped to usher in the era of free agency for the players.

Why did the U.S. Supreme Court and Oliver Wendell Holmes in 1922 decide in favor of the league, thereby giving them a free pass in terms of antitrust legislation? Since I am not an expert in law and legislation, I can't answer that. Maybe the Justices of the U.S.S.C. didn't realize how much of a money maker Baseball would become in the future? Perhaps they believed as many did at the time, even after the Black Sox scandal, in the purity and sanctity of Baseball being America's pastime and a sport and not being a money making endevour? Perhaps I can get more insight from a few friends of mine who are lawyers. I'll revisit this when I get more information.

Until Then Keep Playing Ball,
Baseball Sisco

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