Sport and Antitrust: Review of Baseball on Trial

Grow, Nathaniel. Baseball on Trial: The Origin of Baseball’s Antitrust Exemption. Urbana: University of Illinois Press, 2014. Pp. 228. Notes, bibliography, and index. $37.00 clothback.

Reviewed by Lindsay Parks Pieper

As Aaron L. Haberman discussed yesterday in his review of The Big Leagues Go to Washington, Congress struggled to determine the applicability of the Sherman Antitrust Act to sport. Courts have also questioned the legality of monopolies in professional leagues. And more than any other athletic industry, baseball has been analyzed, discussed, and examined in this regard. Notably, in Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs (1922), the United States Supreme Court ruled that baseball was not interstate commerce; therefore, the sport did not fall under the domain of the Sherman Antitrust Act. In other words, the Supreme Court essentially exempted baseball from antitrust law.

Several scholars today condemn the decision. For example, sport lawyer Eldon L. Ham considers the ruling “irrational,” then, using a baseball pun, notes that it “was way ‘off base’ and, therefore, not on first–or any other base.” Legal historian Paul Finkelman claims the opinion was “clearly wrong.” Legal scholar Bruce Johnson simply argues that “the decision made no sense.”

University of Illinois Press, 2014

University of Illinois Press, 2014

Legal studies professor Nathanial Grow finds such retrospective interpretations faulty and shaped by presentism. In Baseball on Trial: The Origins of Baseball’s Antitrust Exemption, he argues that “these critical analyses tend to judge the decision in light of the sport’s present-day commercial operations . . . and frequently fail to consider the contours of the applicable law at the time” (p. 2). To address these issues, Grow examines a variety of sources–including newspaper accounts, court records, and recently released attorney correspondences–to “fill this gap” by writing the “first full-length history of the Federal Baseball litigation” (p. 3). Baseball on Trial provides a meticulous overview of Federal Baseball’s history, from the formation of the Federal League–an organization founded to compete with the two already established professional leagues–to the main antitrust questions raised before the Supreme Court. When considering the status of the Sherman Antitrust Act at the time, explains Grow, the 1922 ruling was “consistent with the prevailing judicial precedents of the day” (p. 3).

Grow organizes Baseball on Trial into nine chronological chapters, each covering one month to a year’s worth of events. Chapter one, “The Rivalry Begins, 1913,” starts with the origin of the Federal League. Although the “outlaw” league did not initially compete for athletes with “organized baseball”–the American League and the National League–by 1914, the Federal League started to raid the more established organization for talented players. As Grow explains, the Federal League believed this was permissible (and not illegal) because organized baseball’s standard player contracts included two one-sided clauses. The reserve clause bound players to teams perpetually and the ten-day release clause allowed the teams to cut athletes without much notice. According to the Federal League’s lawyers, these two stipulations created unequal obligations, consequently rendering the agreements void.

The next two chapters, “The Opening Salvos, December 1913 to June 1914” and “The Federal League Strikes Back, June 1914 to December 1914,” deals with the fallout from the talent raids. Grow describes the many lawsuits filed by teams in the Federal League, American League, and National League regarding player contracts. On the one hand, when Federal League franchises employed athletes already bound to either the American League or National League, they argued that these signings were legal because the original contracts with organized baseball were not mutual and therefore void. On the other, the American League and National League teams claimed that their agreements were legal; therefore, it was the Federal League that was at fault and had unclean hands. By the end of 1914, Grow notes, the two sides basically tied in terms of legal victories.

Against this backdrop of litigation, the Federal League franchises joined together and filed suit against organized baseball. In chapter four, “The Landis Case, January 1915,” and chapter five, “The Long Wait, January 1915 to February 1916,” Grow details the Federal League v. National League lawsuit (somewhat of a predecessor to the 1922 Supreme Court Case). Notably, the Federal League filed in Federal Court with Judge Kennesaw Mountain Landis, the future commissioner of organized baseball. The Federal League raised two issues for Landis to consider. First, it said that the American League and National League formed an illegal monopoly in violation of antitrust laws. Second, the Federal League claimed that organized baseball conspired to destroy competition. In its defense, organized baseball painted the outlaw league as unscrupulous, noting that the Federal League purposefully stole players and knowingly breached contracts. Moreover, it argued that antitrust law did not apply to baseball because the sport was not interstate commerce.

Importantly, Grow shows that the assertion that baseball was not interstate commerce paralleled legal thought at the time. Other courts had decided that commerce only extended to the production and sale of tangible goods. Intangible products that crossed state lines, such as orchestral and theatrical performances, had been deemed not interstate commerce and thus outside the realm of the Sherman Antitrust Act. Yet, rather than announce an outcome, Landis opted to withhold his decision. The delay pushed the financially struggling Federal League into a settlement agreement with organized baseball. As Grow shows, all teams agreed to the deal–which allowed organized baseball to buyout four teams from the Federal League and permitted two Federal League owners to buy struggling franchises in organized baseball–except for the Baltimore Terrapins.

Excluded from the buyouts and nearing bankruptcy, the Terrapins filed an antitrust suit on its own, which Grow discusses in the remaining four chapters. In this case, filed on September 20, 1917, the plaintiff outlined two significant claims. First, Baltimore contended that organized baseball had illegally monopolized the sport with the National Agreement of 1903, which joined together the American League and the National League. Second, the plaintiff argued that organized baseball conspired to destroy the Federal League. The defense again maintained that baseball was not interstate commerce and therefore not within the scope of antitrust law. At the district court level, the judge ruled in favor of Baltimore, labeling baseball interstate commerce and organized baseball a monopoly–at least for a brief moment.

Organized baseball quickly appealed.

In the second court case, organized baseball reaffirmed its position that the sport was not interstate commerce. Unlike at the district court level, the court of appeals granted organized baseball a “sweeping victory” and overturned the earlier decision in its entirety (p. 201). As a result, explains Grow, baseball was again deemed not interstate commerce. Although a significant blow to the Baltimore club, the team took the case to the Supreme Court. In a 9-0 decision penned by Justice Oliver Wendell Holmes, the Supreme Court upheld the victory for organized baseball. From that point forward (until Congress intervened and enacted the Curt Flood Act of 1998), baseball was exempt from antitrust law.

In Baseball on Trial, Grow places baseball’s antitrust issues in a historical context. His extensive research and knowledge not only offers a comprehensive view of the Supreme Court’s Federal Baseball decision, but also allows him to describe the reactions of the athletes and owners, lawyers and judges, and general public. Moreover, the richness and variety of the sources permit Grow to highlight several interactions and situations in remarkable detail. For example, he mentions an incident where the Federal League feared that Hal Chase–a former star of the American League’s White Sox who agreed to jump ship for the Buffalo Blues–would be served with an injunction for violating his original contract. Therefore, the Blues arranged for him to stay in Canada to avoid litigation. When it was time for Chase to take the field in Buffalo, he reportedly wore his wife’s clothes into the ballpark and hid in an empty shed until the start of the game. He emerged in time to bat, however, was unable to adjust to the sunshine. Momentarily blinded, Chase unsurprisingly struck out and was then served with an injunction on his way to the dugout.

Although the breadth of Baseball on Trial is an asset, at times the meticulous nature of the work also serves as a weakness. The book intermittently highlights seemingly trivial occurrences, and the exhaustive accounts of the numerous lawsuits can be confusing. Grow offers almost a day-by-day explanation of different proceedings, with various athletes, owners, and lawyers floating in and out of the narrative. Furthermore, while Baseball on Trial does an admirable job explaining the several legal concepts at play in the numerous cases, readers not equipped with a law background may occasionally find the book difficult to follow.

Nevertheless, Grow undoubtedly succeeds in shining a light on the buildup to and background of the Federal Baseball decision. His painstakingly detailed account diminishes the belief that the Supreme Court acted arbitrarily and incorrectly in 1922. Finally, in conjunction with the points Haberman explained yesterday, Grow’s account shows that neither the courts nor Congress willingly intervened when questions of antitrust surfaced in sport.

Lindsay Parks Pieper is an Assistant Professor of Sport Management at Lynchburg College and the Book Review Editor of Sport in American History. She can be reached at pieper.l@lynchburg.edu and can be followed on Twitter @LindsayPieper. Check out her website at www.lindsayparkspieper.com.

One thought on “Sport and Antitrust: Review of Baseball on Trial

  1. Thanks for the great book review! I must agree that the topic of antitrust legislation in sports, and baseball in particular, is a very interesting topic. This book sounds like a great foray into the history of baseball and antitrust legislation. It is often speculated that the exemption from federal antitrust laws was a misguided decision, but hearing Grow’s opinion really offers a deeper insight to the situation, and for the most part his opinion seems fairly accurate when one considers the time period and the facets of the case that were argued. It is curious, however, that even today, baseball still remains the only major sport that isn’t subject to antitrust law (Riess, 206). Do you think that baseball would have developed in the same way if the landmark 1922 decision had gone the other way?

    Overall, this sounds like a great read, and with the support of court documents and the sheer depth with which Grow covers them, it would offer great food for thought when considering baseball and antitrust legislation in retrospect.

    Works Cited:
    Riess, S. (2014). Major problems in American sport history: Documents and essays(2nd. ed.). Stamford: Cengage Learning.

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