Former Supreme Court Justice Arthur J. Goldberg stood at a lectern in the United States Supreme Court’s D.C. courtroom on an early spring day in 1972. He had been on the other side for a time, together with many of the robed men now seated atop the tall bench before him. But today, he was an advocate.
Curt Flood, former star Cardinals outfielder, had ended his career to begin this fight, refusing to bend to Major League Baseball’s ancient reserve clause system, which, in Flood’s words, treated him as if he were “a piece of property to be bought or sold.” Goldberg came before the Court that day with one, simple premise: everyone else was subject to antitrust law, so baseball should be, too.
Baseball’s Antitrust Exemption and the Reserve Clause
Baseball had in fact been exempt from antitrust law for fifty years when Curt Flood’s case, Flood v. Kuhn, was argued. The Court in Flood v. Kuhn relied heavily on the 1922 case Federal Baseball Club of Baltimore v. National League. The Federal League–the last upstart major league to challenge MLB’s supremacy–folded in 1915, and the owner of the defunct Baltimore Terrapins sued MLB for violation of the Sherman Antitrust Act. Passed in 1890 during the days of the shrewd but sleazy “robber barons,” the Sherman Act prohibits agreements which unreasonably restrain interstate commerce.
The Terrapins’ owner alleged that National League, American League, and several Federal League officials had colluded to destroy the Federal League and monopolize baseball for MLB. When the case made it to the Supreme Court, Justice Oliver Wendell Holmes wrote the decision for nine unanimous justices. Holmes was, and is, a renowned jurist. He had likely never seen a game, though, and his words changed baseball forever. The Sherman Act, by its terms, only applies to interstate commerce. Holmes asserted, though that baseball was an entirely intrastate business, with the interstate travel between games merely incidental. Baseball was exempt from antitrust law. It was there, in 1922, that baseball remained frozen in time as far as antitrust law was concerned.
Fifty years, later, Curt Flood wanted to change that.
At the heart of Curt’s fight, and much of the fight over baseball’s antitrust exemption, was the reserve clause system. The reserve clause is almost as old as the professional game itself. Adopted by the National League in 1879, the reserve clause was a provision present in every player’s contract that gave his club a unilateral option to negotiate with him. If the player breached the contract, no other team would talk to him. This bound the player to the team he first signed with until the team decided to trade him, release him, or the player retired.
The first major challenge to the antitrust exemption was a challenge to the reserve clause. George Toolson, the plaintiff, was a Yankee farmhand. When his minor-league club was dissolved, he was demoted rather than called up and was unable to take his talents to another team. In a short, unsigned opinion issued in 1953, the Supreme Court reaffirmed the sport’s exemption from antitrust law. Because Congress had not acted to end the exemption, the Court refused to step in and disturb the status quo that had developed over the past thirty years under the exemption.
Curt Flood’s Case
In October of 1969, the Cardinals traded Curt Flood to the Phillies. At age 31, he’d had a stellar career so far, amassing seven Gold Gloves, three All-Star selections, and over 40 bWAR. Because of the reserve clause, St. Louis was able to trade away the rights to re-sign him to Philadelphia even though Flood didn’t yet have a contract for the 1970 season. Phillies general manager Bob Quinn offered him $100,000. While that was more than he’d made any season so far, he didn’t want to play in Philly and he was upset at the way the Cardinals treated him when they sent him packing. He could either take the money and play, or turn it down and retire. He chose to sue.
He did so after talked to players union head Marvin Miller who, despite the uphill battle he knew Flood would face, threw his and the union’s support behind the lawsuit. After Commissioner Bowie Kuhn denied Flood’s written request for free agency, Flood filed suit in federal court in the Southern District of New York against the Commissioner. He alleged, among other things, that the reserve system violated violated the Sherman Act, just as the Baltimore Terrapins owner and George Toolson had done. He lost at the trial court and Court of Appeals under Federal Baseball and Toolson, but the Supreme Court granted review.
Former-Justice Goldberg, Flood’s oral advocate before the Supreme Court, was woefully unprepared, however. Goldberg had thought the Justices would see how outdated a precedent Federal Baseball was. He seemed lost, ineloquent, and unprepared for the questions he received. While a saying goes that no judge has ever changed his or her mind because of oral argument, Justice Goldberg’s ineffective argument could not have helped. He was still surprised, though, when the case went against him.
Many times Flood v. Kuhn has been presented to law students as an example of too much reliance on precedent. There’s something to be said for holding onto old cases to maintain stability and predictability in the law, but this case was something else altogether. The conclusion Justice Holmes reached in Federal Baseball was tenuous then, but by the 1970s baseball was a nationwide industry. On a clean slate there could be no question that it be subject to antitrust law. Yet the slate wasn’t clean, and that was enough for the Court.
You certainly couldn’t blame Justice Blackmun, who wrote the Court’s opinion, for not knowing enough about baseball. Blackmun was a noted Twins fan (he and his fellow Minnesotan Chief Justice Warren Burger were often referred to as the “Minnesota Twins” during their tenure on the Court). The first several pages of the opinion read like a love letter to the sport–it gave a short list of important events in baseball history and a list of notable players over 80 names long. He was irritated afterwards when he realized he’d left off Mel Ott.
What came next, in effect, said little more than the short opinion in Toolson even though it was many pages longer. Blackmun did admit, yes, that baseball was actually interstate commerce; that Federal Baseball and Toolson were an “aberration” and that no other sport was exempt from antitrust;and that many thought baseball’s exemption was “unrealistic, inconsistent, or illogical.”
But that was not enough to carry the day for Flood. The exemption had been around for fifty years and baseball had been allowed to develop under in reliance on it. Justice Blackmun was “loath” to overturn Federal Baseball and Toolson after all this when “Congress, by its positive inaction . . . has clearly evinced a desire not to disapprove of them.”
So that’s how it ended for Curt. The Court essentially admitted that the antitrust exemption didn’t make sense, but that could be little comfort for him. By this time he had moved to Majorca, Spain and suffered troubles from both finances and alcohol. He never played again after a failed comeback attempt in 1971 with the Senators (where he posted negative WAR). He bet his career and lost. But, as it turned out, the loss at the Supreme Court was only a temporary setback.
The End of the Reserve Clause and the Exemption Today
It didn’t take much longer before the reserve clause fell and fell for good. MLPBA head Marvin Miller tried a new angle, this time through the new binding arbitration system the owners had just agreed to. Pitchers Andy Messersmith and Dave McNally refused to sign their contracts for the 1975 season and their teams used the reserve clause to renew their contracts for one year. At the end of the year, though, they claimed they were free agents since the text of the reserve clause said that the team’s option lasted “one year.” Though it had been interpreted to mean that teams could renew contracts for one-year intervals indefinitely, arbitrator Peter Seitz disagreed. One year meant one year. Messersmith and McNally were declared free agents, and the age of free agency began.
Baseball’s antitrust exemption is still around, though. Congress made a token gesture in 1998 when it passed the Curt Flood Act, ending the exemption for things “directly relating to or affecting employment of major league baseball players.” But with free agency already long in place, this didn’t mean much. The Act went out of its way to make clear that the exemption still applied in lots of other ways. It didn’t give any rights to minor league players, who were still subject to the reserve system. The exemption still applied to things like franchise relocation, merchandise sales and licensing, and umpire employment.
The today exemption might not be as far-reaching as many believe it. Many of its practices can be subject to antitrust, depending on the court. Still, it seems like an unnecessary and overly-complicated shield that the other major sports leagues have been fine without. But, barring some huge sea-change it’s here to stay. That is, unless another Curt Flood comes along.
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