{"id":3540,"date":"2023-03-01T12:48:35","date_gmt":"2023-03-01T17:48:35","guid":{"rendered":"https:\/\/www2.law.temple.edu\/10q\/?p=3540"},"modified":"2023-03-01T12:48:35","modified_gmt":"2023-03-01T17:48:35","slug":"baseballs-antitrust-exemption-marks-its-100th-anniversary-with-a-new-challenge","status":"publish","type":"post","link":"https:\/\/law.temple.edu\/10q\/baseballs-antitrust-exemption-marks-its-100th-anniversary-with-a-new-challenge\/","title":{"rendered":"Baseball\u2019s Antitrust Exemption Marks Its 100th Anniversary with a New Challenge"},"content":{"rendered":"<p>For more than a century, minor league baseball and Major League Baseball (MLB) have thrived in a symbiotic relationship. Minor league teams affiliate with major league teams for financial support and access to major league staff. In exchange, major league teams receive a share of minor league revenue and access to budding talent. 2020 marked the expiration of an agreement governing these affairs. According to a case filed in the Southern District of New York, <em>Nostalgic Partners v. Office of the Commissioner of Baseball<\/em>, now on appeal to the Second Circuit, a new agreement capping the number of minor league affiliates at 120 is alleged to constitute a group boycott in violation of the Sherman Act \u00a7 1.<\/p>\n<p>The case has reanimated the debate over the controversial, judicially ordained baseball antitrust exemption, which celebrated its 100th anniversary in 2022. The complaint, brought by excluded minor league teams, alleges that the exemption should be overturned and, in any event, only narrowly applies to player reserve clauses. The U.S. Department of Justice argued in a statement of interest that the exemption applies only to \u201cconduct that is central to providing professional baseball games to the public.\u201d For its part, the Office of the Commissioner believes it applies broadly to the \u201cbusiness of baseball,\u201d including MLB\u2019s association with the minor leagues. Centrally important to the debate is the Curt Flood Act of 1998 and the extent to which Congress\u2019 decision to legislatively repeal part of the exemption implies an intent to preserve the rest.<\/p>\n<p>Baseball\u2019s antitrust exemption dates back to a 1922 Supreme Court decision concerning the competitive consequences of player reserve clauses. Applying a \u201cnarrow, parochial view\u201d of the Commerce Clause, the Court in <em>Federal Base Ball Club of Baltimore v. National League<\/em> found \u201cthe business is giving exhibitions of base ball, which are purely state affairs\u201d\u2014not the type of \u201cbusiness\u201d regulated by the antitrust laws\u2014finding \u201cthe transport [of teams to play teams in other states] is a mere incident, not the essential thing.\u201d Thus, the Court concluded, there was no jurisdictional basis for the antitrust laws to regulate the business of \u201cgiving exhibitions of base ball.\u201d<\/p>\n<p>Decades after <em>Federal Base Ball<\/em>, the Supreme Court in <em>Toolson v. New York Yankees<\/em> revisited the exemption in another case about player reserve clauses. The Court observed, \u201cThe business [of baseball] has . . . been left for thirty years to develop, on the understanding that it was not subject to existing antitrust legislation.\u201d Fearing the disruption it would precipitate by reversing course, the <em>Toolson<\/em> Court concluded, \u201c[I]f there are evils in this field which now warrant application to it of the antitrust laws[,] it should be by legislation.\u201d<\/p>\n<p>Later, in <em>Flood v. Kuhn<\/em>, decided in 1972, the Supreme Court again affirmed <em>Federal Base<\/em> <em>Ball<\/em> and explicitly remarked that it was bound by stare decisis and Congress\u2019 \u201cpositive inaction.\u201d Although the <em>Flood<\/em> Court conceded that \u201c[p]rofessional baseball is a business and it is engaged in interstate commerce,\u201d it nonetheless held, \u201cIf there is any inconsistency of illogic in all this, it is an inconsistency and illogic of long standing that is to be remedied by the Congress and not by this Court.\u201d Thus, for now, the baseball exemption represents a bygone era of constitutional jurisprudence, preserved for the sake of continuity by Supreme Court decisions that acknowledge its anachronistic origin, stare decisis distinction and legislative inaction.<\/p>\n<p><em>Nostalgic Partners<\/em> is the latest case to challenge the baseball antitrust exemption. Plaintiffs there predict that \u201cthe Supreme Court would no longer apply the . . . baseball antitrust exemption if presented with a proper case for reconsidering it. This is that case.\u201d The current Supreme Court was appointed well after <em>Flood<\/em> was decided, so it would be hard to predict the outcome.<\/p>\n<p>However, <em>Leegin Creative Leather Products, Inc. v. PSKS, Inc.<\/em>, decided in 2007, saw three current justices\u2014Roberts, Thomas and Alito\u2014vote without hesitation to overturn 96-year-old jurisprudence in <em>Dr. Miles<\/em> concerning the antitrust treatment of vertical pricing restraints. The newly constituted Court seems increasingly willing to jettison stare decisis when it believes aging case law should be reconsidered and the thorny issues raised left to the legislatures. But Congress still appears unlikely to amend the Sherman Act to remove the antitrust exemption for baseball, with acknowledged baseball fans, Justices Alito and Kavanaugh, the wild cards on that score this time around. Stay tuned.<\/p>\n<p>The full article in its original form can be found <a href=\"https:\/\/www.antitrustadvocate.com\/2022\/08\/01\/baseballs-antitrust-exemption-marks-its-100th-anniversary-with-a-new-challenge\/\">here<\/a>.<\/p>\n<p><em>Carl Hittinger (LAW \u201979, BA \u201976) is a partner at BakerHostetler, serving as the firm\u2019s Antitrust and Competition Practice National Team Leader. <\/em><\/p>\n<p><em>Tyson Herrold serves as Counsel at BakerHostetler, focusing on antitrust and competition litigation.<\/em><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Carl Hittinger (LAW \u201979, BA \u201976) of BakerHostetler co-authored an article with Tyson Herrold discussing the history of baseball\u2019s antitrust exemption and whether this judicially ordained exemption may be overturned by the current Supreme Court. <\/p>\n","protected":false},"author":33,"featured_media":3541,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12,33,13,1874],"tags":[134,1045,2590,2591,1051,2592,1088,342],"coauthors":[1073,1074],"class_list":["post-3540","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-alumni-authored","category-antitrust","category-business-law-practice","category-commentary","tag-antitrust","tag-baseball","tag-exemption","tag-minor-leagues","tag-mlb","tag-nostalgic-partners-v-office-of-the-commissioner-of-baseball","tag-sherman-act","tag-supreme-court","masonry-post","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Baseball\u2019s Antitrust Exemption Marks Its 100th Anniversary with a New Challenge - The Temple 10-Q<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/law.temple.edu\/10q\/baseballs-antitrust-exemption-marks-its-100th-anniversary-with-a-new-challenge\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Baseball\u2019s Antitrust Exemption Marks Its 100th Anniversary with a New Challenge - The Temple 10-Q\" \/>\n<meta property=\"og:description\" content=\"Carl Hittinger (LAW \u201979, BA \u201976) of BakerHostetler co-authored an article with Tyson Herrold discussing the history of baseball\u2019s antitrust exemption and whether this judicially ordained exemption may be overturned by the current Supreme Court.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/law.temple.edu\/10q\/baseballs-antitrust-exemption-marks-its-100th-anniversary-with-a-new-challenge\/\" \/>\n<meta property=\"og:site_name\" content=\"The Temple 10-Q\" \/>\n<meta property=\"article:published_time\" content=\"2023-03-01T17:48:35+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/law.temple.edu\/10q\/wp-content\/uploads\/sites\/12\/2023\/03\/Photo-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"884\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Carl W. 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