Posted on May 29, 2018
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On May 29, 1922, the United States Supreme Court rules that organized baseball did not violate antitrust laws as alleged by the Baltimore franchise of the defunct Federal League in 1915. The Supreme Court held that organized baseball is not a business, but a sport.
In January 1915, the Baltimore Terrapins of the Federal League sued the American and National Leagues, alleging that they were in violation of the Sherman Antitrust Act of 1890, which was enacted to limit monopolies in interstate commerce. The Federal League chose the U.S. District Court presided over by Judge Kenesaw Mountain Landis, who was known as a trustbuster, to hear their case. What the Federal League did not know was that Landis was also a passionate Chicago Cubs fan who was reticent to do anything that might, in his eyes, damage the sport he loved. Landis delayed hearing the case, while the Federal League struggled. They were unable to lure star players away from the American and National Leagues, and were hurt by the previously baseball-obsessed public’s preoccupation with World War I. By the end of the 1915 season, the Federal League was out of business, after less than two years of operation. Meanwhile, its lawsuit was still pending.
Judge Landis became baseball’s commissioner in 1920, and was charged with cleaning up the big leagues after the Black Sox scandal of 1919, in which the Chicago White Sox purposely lost the World Series for a payoff from gambler Arnold Rothstein. Landis handed out eight lifetime suspensions, determined to rid the game of corruption once and for all.
The U.S. Supreme Court finally ruled on the Federal League case in 1922. In his opinion, Chief Justice Oliver Wendell Holmes wrote that baseball did not constitute interstate commerce, in spite of the fact that its clubs and players crossed state lines in order to play. Justice Holmes reasoned that personal effort, not related to production, is not a subject of commerce. As baseball was the subject of interstate personal effort and not interstate commerce, the antitrust law did not apply.
Courts have since been reluctant to overrule the decision, making baseball the only professional sport in the country to enjoy an antitrust exemption. The courts have consistently held that the only way Major League Baseball would lose its antitrust exemption is if Congress were to legislate it out of existence. Understandably, Major League Baseball lobbies hard to keep its antitrust exemption. Although labor law has made inroads into baseball’s antitrust exemption with the adoption of collective bargaining, this big business is still viewed as only a “sport.” As a result, Major League Baseball maintains a tight hold on its teams, preventing them from moving from one city to another; maintaining a commissioner of baseball who effectively has no independence from the owners; and generally catering to the interests of team owners and back room deals instead of creating a free market baseball economy. Although the fans may likely be the poorer for it, the “sport” continues to thrive as it gains new markets around the world.
In January 1915, the Baltimore Terrapins of the Federal League sued the American and National Leagues, alleging that they were in violation of the Sherman Antitrust Act of 1890, which was enacted to limit monopolies in interstate commerce. The Federal League chose the U.S. District Court presided over by Judge Kenesaw Mountain Landis, who was known as a trustbuster, to hear their case. What the Federal League did not know was that Landis was also a passionate Chicago Cubs fan who was reticent to do anything that might, in his eyes, damage the sport he loved. Landis delayed hearing the case, while the Federal League struggled. They were unable to lure star players away from the American and National Leagues, and were hurt by the previously baseball-obsessed public’s preoccupation with World War I. By the end of the 1915 season, the Federal League was out of business, after less than two years of operation. Meanwhile, its lawsuit was still pending.
Judge Landis became baseball’s commissioner in 1920, and was charged with cleaning up the big leagues after the Black Sox scandal of 1919, in which the Chicago White Sox purposely lost the World Series for a payoff from gambler Arnold Rothstein. Landis handed out eight lifetime suspensions, determined to rid the game of corruption once and for all.
The U.S. Supreme Court finally ruled on the Federal League case in 1922. In his opinion, Chief Justice Oliver Wendell Holmes wrote that baseball did not constitute interstate commerce, in spite of the fact that its clubs and players crossed state lines in order to play. Justice Holmes reasoned that personal effort, not related to production, is not a subject of commerce. As baseball was the subject of interstate personal effort and not interstate commerce, the antitrust law did not apply.
Courts have since been reluctant to overrule the decision, making baseball the only professional sport in the country to enjoy an antitrust exemption. The courts have consistently held that the only way Major League Baseball would lose its antitrust exemption is if Congress were to legislate it out of existence. Understandably, Major League Baseball lobbies hard to keep its antitrust exemption. Although labor law has made inroads into baseball’s antitrust exemption with the adoption of collective bargaining, this big business is still viewed as only a “sport.” As a result, Major League Baseball maintains a tight hold on its teams, preventing them from moving from one city to another; maintaining a commissioner of baseball who effectively has no independence from the owners; and generally catering to the interests of team owners and back room deals instead of creating a free market baseball economy. Although the fans may likely be the poorer for it, the “sport” continues to thrive as it gains new markets around the world.
Supreme Court rules in favor of Major League Baseball - May 29, 1922 - HISTORY.com
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Supreme Court exempts baseball fr.om antitrust law, May 29, 1922
Thanks for watching! ************************************************************ On the day in 1922, the U.S. Supreme Court unanimously carved out an except...
Thank you my friend TSgt Joe C. for reminding us that on May 29, 1922 the United States Supreme Court rules that organized baseball did not violate antitrust laws as alleged by the Baltimore franchise of the defunct Federal League in 1915. The Supreme Court held that organized baseball is not a business, but a sport.
Background from constitution.com/today-may-29-1922-major-league-baseball-wins-supreme-court-case/
After the Civil War, a number of businesses began expanding and forming large conglomerates also known as trusts. They grew so large and powerful that many believed they prevented any competition along with controlling prices on various items similar to what Sony did in the 1980s with their cameras and video equipment.
Some southern states passed laws to prevent large trusts from monopolizing any business and controlling prices. Large trusts responded by moving to states like Delaware and New Jersey that didn’t have anti-trust laws.
Consequently, Sen. John Sherman (R-OH), authored a federal anti-trust bill that soon bore his name. The Sherman Antitrust Act became law on July 2, 1890. The first two sections stated:
Section 1- Trusts, etc., in restraint of trade illegal; penalty
Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.
Section 2- Monopolizing trade a felony; penalty
Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.
Prior to the passage of the Sherman Antitrust Act, the National League of Professional Baseball Clubs was formed in 1876. A second league started playing baseball and in 1901, formed the American League and the two leagues became rivals in the sport. The first World Series between the National and American Leagues was played in 1903, with the Boston Americans defeating the Pittsburgh Pirates 5 games to 3.
In 1912, two additional baseball leagues tried to form and compete with the National and American leagues, neither of which were accepted or endorsed by the National League of Professional Baseball Clubs, which eventually became known as Major League Baseball. One league was the United States League, consisting of 8 teams from eastern cities, but after only a month the USL folded. The other was the Columbian League, consisting of cities in the Midwest. This league never saw a baseball field professionally.
In 1913, attempts were again made to form competing leagues. The United States League managed to play games before leaving the field for good. The Columbian League was re-named the Federal League and consisted of six teams: Chicago, Cleveland, Covington, Indianapolis, Pittsburgh, and St. Louis. They successfully played a full 120 game season.
Part way through the season, the Covington club was moved to Kansas City due to a lack of attendance in Covington. This now placed 4 of the six Federal League teams based in cities that already had MLB teams.
In January 1914, James Gilmore, president of the Federal League, announced that they would respect the MLB franchises, but that players on reserve lists with the MLB teams would be fair game to sign contract with the Federal League teams. Joe Tinker of the Cincinnati Red Stockings was the first pro player to switch leagues and signed with the Chicago Feds. Following Tinker, other major league players including Otto Knabe, Three Finger Brown, Hal Chase, and Russ Ford, also signed contracts with Federal League teams.
The feud between the two baseball leagues came to a head in January, 1914. Bill Killifer had been the catcher of the Philadelphia Nationals since 1911. In January, he hadn’t signed a new contract with Philly yet so the Chicago Whales of the Federal League approached him and got him to sign a contract to play ball for them. A week later Killifer changed his mind and signed a contract with his first team Philadelphia.
Now both teams claimed ownership of Killifer. Chicago said that he signed their contract first that he had to play for them. Attorneys for Philadelphia countered saying that Chicago had seduced their employee and therefore should not have any legal claim to him.
On March 18, 1914, Chicago filed a lawsuit in the US District Court of Western Michigan. They sought to prevent Killifer from being able to play for any other team since he signed with them first.
On April 10, 1914, the court ruled both contracts were valid and that Chicago could not prevent Killifer from playing with any other team. Both leagues claimed victory on different grounds.
Following the decision, Gilmore told all of the Federal League teams to go after any player they want, regardless if they were under contact with an MLB team or not. This ignited a war between the Federal League and MLB.
Over the next two years, the Federal League worked hard to use players with major league or big league experience in order to define themselves as a major baseball league able to compete with the National and American Leagues. The MLB leagues responded by basically ending the careers of many players who jumped to the Federal League.
The MLB leagues began filing a series of lawsuits against the Federal League in hopes that it would eventually drive the new league into oblivion and off the baseball diamond. The Federal League countered and filed a lawsuit in the Northern District of Illinois, claiming that the National and American Leagues were guilty of violating the Sherman Antitrust Act of 1890.
The case ended before Judge Kenesaw Mountain Landis. The Federal League was encouraged because Landis was known for his 1907 antitrust ruling against Standard Oil. The MLB leagues were encouraged because Landis was an avid baseball fan. Incidentally, Landis was the first Commissioner of Baseball, serving from 1920 until his death in 1944.
Landis delayed his ruling and by the end of the 1915 season, at which time the Federal League had failed to turn a profit, the owners of the Federal League teams decided to settle the lawsuit. Two of them were allowed to buy existing MLB teams – the Chicago Cubs and the St. Louis Browns. Five the remaining six owners accepted buyout offers.
The ownership group that owned the Baltimore Terrapins of the Federal League refused to accept the buyout and instead filed their own antitrust lawsuit against the National and American Leagues. They claimed that the two leagues had collaborated to create a baseball monopoly with their deliberate intent on destroying the Federal League.
In district court, Baltimore won their case. The National and American Leagues appealed the decision and won in the court of appeals who ruled that baseball was not subject to the Sherman Antitrust Act as they didn’t qualify as an interstate business. The ownership group of the Baltimore Terrapins appealed that decision to the US Supreme Court.
On this day, May 29, 1922, Supreme Court Chief Justice Earl Warren handed down a unanimous decision stating that major league baseball is a sport, not a business and as such there was no interstate commerce of which would be a violation of the Sherman Antitrust Act of 1890. The ruling has impacted professional sports ever since."
Supreme Court exempts baseball fr.om antitrust law, May 29, 1922
https://www.youtube.com/watch?v=H4T_ii8SB8U
FYI COL Mikel J. Burroughs LTC Stephen C. LTC Orlando Illi Maj Bill Smith, Ph.D. Maj William W. "Bill" Price CPT Jack Durish Capt Tom Brown MSG Andrew White SFC William Farrell SGT (Join to see) Sgt Albert Castro SSG David Andrews Sgt Randy Wilber Sgt John H. CPL Dave Hoover SGT Mark Halmrast SPC Margaret Higgins SrA Christopher Wright
Background from constitution.com/today-may-29-1922-major-league-baseball-wins-supreme-court-case/
After the Civil War, a number of businesses began expanding and forming large conglomerates also known as trusts. They grew so large and powerful that many believed they prevented any competition along with controlling prices on various items similar to what Sony did in the 1980s with their cameras and video equipment.
Some southern states passed laws to prevent large trusts from monopolizing any business and controlling prices. Large trusts responded by moving to states like Delaware and New Jersey that didn’t have anti-trust laws.
Consequently, Sen. John Sherman (R-OH), authored a federal anti-trust bill that soon bore his name. The Sherman Antitrust Act became law on July 2, 1890. The first two sections stated:
Section 1- Trusts, etc., in restraint of trade illegal; penalty
Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.
Section 2- Monopolizing trade a felony; penalty
Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.
Prior to the passage of the Sherman Antitrust Act, the National League of Professional Baseball Clubs was formed in 1876. A second league started playing baseball and in 1901, formed the American League and the two leagues became rivals in the sport. The first World Series between the National and American Leagues was played in 1903, with the Boston Americans defeating the Pittsburgh Pirates 5 games to 3.
In 1912, two additional baseball leagues tried to form and compete with the National and American leagues, neither of which were accepted or endorsed by the National League of Professional Baseball Clubs, which eventually became known as Major League Baseball. One league was the United States League, consisting of 8 teams from eastern cities, but after only a month the USL folded. The other was the Columbian League, consisting of cities in the Midwest. This league never saw a baseball field professionally.
In 1913, attempts were again made to form competing leagues. The United States League managed to play games before leaving the field for good. The Columbian League was re-named the Federal League and consisted of six teams: Chicago, Cleveland, Covington, Indianapolis, Pittsburgh, and St. Louis. They successfully played a full 120 game season.
Part way through the season, the Covington club was moved to Kansas City due to a lack of attendance in Covington. This now placed 4 of the six Federal League teams based in cities that already had MLB teams.
In January 1914, James Gilmore, president of the Federal League, announced that they would respect the MLB franchises, but that players on reserve lists with the MLB teams would be fair game to sign contract with the Federal League teams. Joe Tinker of the Cincinnati Red Stockings was the first pro player to switch leagues and signed with the Chicago Feds. Following Tinker, other major league players including Otto Knabe, Three Finger Brown, Hal Chase, and Russ Ford, also signed contracts with Federal League teams.
The feud between the two baseball leagues came to a head in January, 1914. Bill Killifer had been the catcher of the Philadelphia Nationals since 1911. In January, he hadn’t signed a new contract with Philly yet so the Chicago Whales of the Federal League approached him and got him to sign a contract to play ball for them. A week later Killifer changed his mind and signed a contract with his first team Philadelphia.
Now both teams claimed ownership of Killifer. Chicago said that he signed their contract first that he had to play for them. Attorneys for Philadelphia countered saying that Chicago had seduced their employee and therefore should not have any legal claim to him.
On March 18, 1914, Chicago filed a lawsuit in the US District Court of Western Michigan. They sought to prevent Killifer from being able to play for any other team since he signed with them first.
On April 10, 1914, the court ruled both contracts were valid and that Chicago could not prevent Killifer from playing with any other team. Both leagues claimed victory on different grounds.
Following the decision, Gilmore told all of the Federal League teams to go after any player they want, regardless if they were under contact with an MLB team or not. This ignited a war between the Federal League and MLB.
Over the next two years, the Federal League worked hard to use players with major league or big league experience in order to define themselves as a major baseball league able to compete with the National and American Leagues. The MLB leagues responded by basically ending the careers of many players who jumped to the Federal League.
The MLB leagues began filing a series of lawsuits against the Federal League in hopes that it would eventually drive the new league into oblivion and off the baseball diamond. The Federal League countered and filed a lawsuit in the Northern District of Illinois, claiming that the National and American Leagues were guilty of violating the Sherman Antitrust Act of 1890.
The case ended before Judge Kenesaw Mountain Landis. The Federal League was encouraged because Landis was known for his 1907 antitrust ruling against Standard Oil. The MLB leagues were encouraged because Landis was an avid baseball fan. Incidentally, Landis was the first Commissioner of Baseball, serving from 1920 until his death in 1944.
Landis delayed his ruling and by the end of the 1915 season, at which time the Federal League had failed to turn a profit, the owners of the Federal League teams decided to settle the lawsuit. Two of them were allowed to buy existing MLB teams – the Chicago Cubs and the St. Louis Browns. Five the remaining six owners accepted buyout offers.
The ownership group that owned the Baltimore Terrapins of the Federal League refused to accept the buyout and instead filed their own antitrust lawsuit against the National and American Leagues. They claimed that the two leagues had collaborated to create a baseball monopoly with their deliberate intent on destroying the Federal League.
In district court, Baltimore won their case. The National and American Leagues appealed the decision and won in the court of appeals who ruled that baseball was not subject to the Sherman Antitrust Act as they didn’t qualify as an interstate business. The ownership group of the Baltimore Terrapins appealed that decision to the US Supreme Court.
On this day, May 29, 1922, Supreme Court Chief Justice Earl Warren handed down a unanimous decision stating that major league baseball is a sport, not a business and as such there was no interstate commerce of which would be a violation of the Sherman Antitrust Act of 1890. The ruling has impacted professional sports ever since."
Supreme Court exempts baseball fr.om antitrust law, May 29, 1922
https://www.youtube.com/watch?v=H4T_ii8SB8U
FYI COL Mikel J. Burroughs LTC Stephen C. LTC Orlando Illi Maj Bill Smith, Ph.D. Maj William W. "Bill" Price CPT Jack Durish Capt Tom Brown MSG Andrew White SFC William Farrell SGT (Join to see) Sgt Albert Castro SSG David Andrews Sgt Randy Wilber Sgt John H. CPL Dave Hoover SGT Mark Halmrast SPC Margaret Higgins SrA Christopher Wright
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SGT Brian Nile SGT Robert George SFC Shirley Whitfield MSG Mark Million COL Lee Flemming SFC George Smith SrA Christopher Wright LTC (Join to see) PO1 William "Chip" Nagel SSgt Harvey "Skip" Porter SCPO Morris Ramsey SFC William Farrell SGT (Join to see) Alan K. SPC Mike Lake ] LTC Greg Henning SSgt (Join to see) Sgt Trevor Barrett Maj Bill Smith, Ph.D. MSG Andrew White
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