San Jose’s federal lawsuit challenging MLB’s exemption from antitrust laws is doomed — in addition to being just plain ol’ silly. A victory for San Jose would be a detriment to the San Jose A’s, were that to ever be a thing.
U.S. antitrust laws — and I’m paraphrasing recklessly here — were enacted in order to break up monopolies and to prevent industry competitors from colluding to set prices. Both the National and American Leagues have been sued for alleged antitrust violations, three cases of which have been seen by the Supreme Court.
In Federal Baseball Club v. National League in 1922, the Supreme Court ruled that antitrust laws do not apply to baseball because though baseball games are played for money, they “would not be called trade of commerce in the commonly accepted use of those words.” And, if it doesn’t involve “interstate commerce,” then it cannot be regulated by the federal government.
I know what your thinking, but baseball does involve interstate commerce given that players and fans cross state-lines and all that jazz. But, at the time, the Supreme Court did not think so. As written by Justice Oliver Wendell Holmes:
[The] transport is a mere incident, not the essential thing. … As it is put by defendant, personal effort, not related to production, is not a subject of commerce. That which in its consummation is not commerce does not become commerce among the States because the transportation that we have mentioned takes place. To repeat the illustrations given by the Court below, a firm of lawyers sending out a member to argue a case, or the Chautauqua lecture bureau sending out lecturers, does not engage in such commerce because the lawyer or lecturer goes to another State.
In 1953, Toolson v. New York Yankees challenged MLB’s antitrust exemption. The Supreme Court — as with the lower courts — reaffirmed the Federal Baseball precedent, noting “[the] business [of baseball] has … been left for thirty years to develop, on the understanding that it was not subject to existing antitrust legalization.” Thus, the Court invoked the stare decisis, which obliges judges to adhere to precedent.
Then, in Flood v. Kuhn, the Supreme Court again upheld the Federal Baseball precedent. However, Justice Harry Blackmun wrote in the majority opinion that “Professional baseball is a business and it is engaged in interstate commerce.” This, of course, is in opposite of the Federal Baseball ruling. But, Blackmun also wrote that baseball is “an exception and an anomaly,” and one that has been upheld in five consecutive court cases.
In other words, Blackmun and his fellow judges acknowledge that baseball is in violation of antitrust laws, but in the name of “consistency,” the court would not rule against baseball. Blackmun would ultimately suggest that Congress, not the Court, would need to remedy the antitrust violations of baseball.
Congress would eventually take action in the Curt Flood Act of 1998. However, Congress would only lift antitrust exemptions in labor relations, while reaffirming baseball’s exemption in all other issues.
Given that stare decisis has reigned supreme in every antitrust lawsuit filed against the MLB — even those in which majority judges believe baseball to be in violation of antitrust laws — and that the exemption has been upheld by Congress, there is no chance San Jose wins anything other than good publicity. If San Jose did win, they would need the miracle of unprecedented action. This action could potentially revoke territorial rights, which could be disastrous for the league and for San Jose.
Without the antitrust exemption, baseball could be ravaged by the free market, meaning territorial rights would cease to exist and teams could prospectively crop up anywhere. Where the A’s to move to San Jose, there would be nothing stopping another team popping up in it’s place. Though nothing is guaranteed to happen were the exception to be rescinded, the general uncertainty is enough to have kept stare decisis the majority opinion.
So when MLB executive Rob Manfred says the San Jose lawsuit is an attack on the “fundamental structures of a professional sports league,” he is not lying or being sensational. He’s merely parroting the opinion that has been upheld by our nation’s highest courts and legislative bodies — an opinion, by the way, which has allowed the league to thrive since its inception.