Toolson v. New York Yankees/Dissent Burton

by Harold Hitz Burton

United States Supreme Court

346 U.S. 356

Toolson  v.  New York Yankees

 Argued: Oct. 13, 14, 1953. --- Decided: Nov 9, 1953

Mr. Justice BURTON, with whom Mr. Justice REED concurs, dissenting.

Whatever may have been the situation when the Federal Baseball Club case ^[1] was decided in 1922, I am not able to join today's decision which, in effect, announces that organized baseball, in 1953, still is not engaged in interstate trade or commerce. In the light of organized baseball's well-known and widely distributed capital investments used in conducting competitions between teams constantly traveling between states, its receipts and expenditures of large sums transmitted between states, its numerous purchases of materials in interstate commerce, the attendance at its local exhibitions of large audiences often traveling across state lines, its radio and television activities which expand its audiences beyond state lines, its sponsorship of interstate advertising, and its highly organized 'farm system' of minor league baseball clubs, coupled with restrictive contracts and understandings between individuals and among clubs or leagues playing for profit throughout the United States, and even in Canada, Mexico and Cuba, it is a contradiction in terms to say that the defendants in the cases before us are not now engaged in interstate trade or commerce as those terms are used in the Constitution of the United States and in the Sherman Act, 15 U.S.C.A. §§ 1-7, 15 note. ^[2]

In 1952 the Subcommittee on Study of Monopoly Power, of the House of Representatives Committee on the Judiciary, after extended hearings, issued a report dealing with organized baseball in relation to the Sherman Act. In that report it said:

"Organized baseball' is a combination of approximately 380 separate baseball clubs, operating in 42 different States, the District of Columbia, Canada, Cuba, and Mexico * * *.

'Inherently, professional baseball is intercity, intersectional, and interstate. At the beginning of the 1951 season, the clubs within organized baseball were divided among 52 different leagues. Each league is an unincorporated association of from 6 to 10 clubs which play championship baseball games among themselves according to a prearranged schedule. Such a league organization is essential for the successful operation of baseball as a business.

'Of the 52 leagues associated within organized baseball in 1951, 39 were interstate in nature.' ^[3]

In the Federal Baseball Club case the Court did not state that even if the activities of organized baseball amounted to interstate trade or commerce those activities were exempt from the Sherman Act. The Court acted on its determination that the activities before it did not amount to interstate commerce. The Court of Appeals for the District of Columbia, in that case, in 1921, described a major league baseball game as 'local in its beginning and in its end.' ^[4] This Court stated that 'The business is giving exhibitions of baseball, which are purely state affairs', and the transportation of players and equipment between states 'is a mere incident * * *.' ^[5] The main thrust of the argument of counsel for organized baseball, both in the Court of Appeals and in this Court, was in support of that proposition. ^[6] Although counsel did argue that the activities of organized baseball, even if amounting to interstate commerce, did not violate the Sherman Act, ^[7] the Court significantly refrained from expressing its opinion on that issue.

That the Court realized that the then incidental interstate features of organized baseball might rise to a magnitude that would compel recognition of them independently is indicated by the statement made in 1923 by Mr. Justice Holmes, the writer of the Court's opinion in the Federal Baseball Club case. In 1923, in considering a bill in equity alleging a violation of the Sherman Act by parties presenting local exhibitions on an interstate vaudeville circuit, the Court held that the bill should be considered on its merits and, in writing for the Court, Mr. Justice Holmes said 'The bill was brought before the decision of the Baseball Club Case, and it may be that what in general is incidental, in some instances may rise to a magnitude that requires it to be considered independently.' ^[8]

The 1952 report of the Congressional Subcommittee previously mentioned also said:

'Under judicial interpretations of this constitutional provision (the commerce clause), the Congress has power to investigate, and pass legislation dealing with professional baseball, or more particularly 'organized baseball,' if that business is, or affects, interstate commerce.

'After full review of all of the foregoing facts and with due consideration of modern judicial interpretation of the scope of the commerce clause, it is the studied judgment of the Subcommittee on the Study of Monopoly Power that the Congress has jurisdiction to investigate and legislate on the subject of professional baseball.' H.R.Rep. No. 2002, 82d Cong., 2d Sess. 4, 7, and see 111-139. ^[9]

In cases Nos. 18 and 23 the plaintiffs here allege that they are professional baseball players who have been damaged by enforcement of the standard 'reserve clause' in their contracts pursuant to nationwide agreements among the defendants. ^[10] In effect they charge that in violation of the Sherman Act, organized baseball, through its illegal monopoly and unreasonable restraints of trade, exploits the players who attract the profits for the benefit of the clubs and leagues. Similarly, in No. 25, the plaintiffs allege that because of illegal and inequitable agreements of interstate scope between organized baseball and the Mexican League binding each to respect the other's 'reserve clauses' they have lost the services of and contract rights to certain basebabll players. The plaintiffs also allege that the defendants have entered into a combination, conspiracy and monopoly or an attempt to monopolize professional baseball in the United States to the substantial damage of the plaintiffs.

Conceding the major asset which baseball is to our Nation, the high place it enjoys in the hearts of our people and the possible justification of special treatment for organized sports which are engaged in interstate trade or commerce, the authorization of such treatment is a matter within the discretion of Congress. ^[11] Congress, however, has enacted no express exemption of organized baseball from the Sherman Act, and no court has demonstrated the existence of an implied exemption from that Act of any sport that is so highly organized as to amount to an interstate monopoly or which restrains interstate trade or commerce. In the absence of such an exemption, the present popularity of organized baseball increases, rather than diminishes, the importance of its compliance with standards of reasonableness comparable with those now required by law of interstate trade or commerce. It is interstate trade or commerce and, as such, it is subject to the Sherman Act until exempted. Accordingly, I would reverse the judgments in the instant cases and remand the causes to the respective District Courts for a consideration of the merits of the alleged violations of the Sherman Act.

Notes

1. Federal Baseball Club v. National League, 259 U.S. 200, 42 S.Ct. 465, 66 L.Ed. 898.
2. Compare Paul v. Virginia, 8 Wall. 168, 19 L.Ed. 357; and Hooper v. People of State of California, 155 U.S. 648, 15 S.Ct. 207, 39 L.Ed. 297; with United States v. South-Eastern Underwriters Ass'n, 322 U.S. 533, 64 S.Ct. 1162, 88 L.Ed. 1440; and Lorain Journal Co. v. United States, 342 U.S. 143, 72 S.Ct. 181, 96 L.Ed. 162. See also, Times-Picayune Publishing Co. v. United States, 345 U.S. 594, 73 S.Ct. 872; United States v. National Ass'n of Real Estate Boards, 339 U.S. 485, 70 S.Ct. 711, 94 L.Ed. 1007; United States v. Crescent Amusement Co., 323 U.S. 173, 65 S.Ct. 254, 89 L.Ed. 160; American Medical Ass'n v. United States, 317 U.S. 519, 63 S.Ct. 326, 87 L.Ed. 434.
3. H.R.Rep. No. 2002, 82d Cng., 2d Sess. 4, 5.
4. National League of Professional Baseball Clubs v. Federal Baseball Club, 50 App.D.C. 165, 169, 269 F. 681, 685.
5. 259 U.S., at page 208, 209, 42 S.Ct. at page 466.
6. See brief for appellants in the Court of Appeals, pp. 45 67; brief for defendants in error in this Court, pp. 45-66.
7. See brief for appellants in Court of Appeals, pp. 68-72; brief for defendants in error in this Court, pp. 66-72.
8. Hart v. ,B. F. Keith Vaudeville Exchange, 262 U.S. 271, 274, 43 S.Ct. 540, 541, 67 L.Ed. 977, and see North American Co. v. Securities and Exchange Comm., 327 U.S. 686, 694, 66 S.Ct. 785, 791, 90 L.Ed. 945.
9. In opposing approval of four exclusionary bills then pending, the Subcommittee did not take the stand that organized baseball and other comparable sports, although constituting interstate trade or commerce, already are exempt from the broad coverage of the Sherman Act. On the contrary, it said:
10. 'The reserve clause is popularly believed to be some provision in the player contract which gives to the club in organized baseball which first signs a player a continuing and exclusive right to his services. Commissioner Frick testified that this popular understanding was essentially correct. He pointed out, however, that the reserve clause is not merely a provision in the contract, but also incorporates a reticulated system of rules and regulations which enable, indeed require, the entire baseball organization to respect and enforce each club's exclusive and continuous right to the services of its players.' H.R.Rep. No. 2002, 82d Cong., 2d Sess. 111. See also, Section VII, The Reserve Clause, Id., at 111-139, and Gardella v. Chandler, 2 Cir., 172 F.2d 402.
11. E.g., Congress has expressly exempted certain specific activities from the Sherman Act, as in § 6 of the Clayton Act, 38 Stat. 731, 15 U.S.C. § 17, 15 U.S.C.A. § 17 (labor organizations), in the Capper-Volstead Act, 42 Stat. 388-389, 7 U.S.C. §§ 291, 292, 7 U.S.C.A. §§ 291, 292 (farm cooperatives), and in the McCarran-Ferguson Act, 59 Stat. 34, 61 Stat. 448, 15 U.S.C. (Supp. V) § 1013, 15 U.S.C.A. § 1013 (insurance). And see Apex Hosiery Co. v. Leader, 310 U.S. 469, 501, 512, 60 S.Ct. 982, 996, 1002, 84 L.Ed. 1311.