Author: Luke Hasskamp
This article—the fifth in a series—addresses some of the aftermath of the Supreme Court’s decision in Toolson v. New York Yankees, in particular the litigation involving Curt Flood that ultimately led to the free agency era of professional baseball.
You can find the other parts to this series below:
Curt Flood takes on baseball
Curt Flood was immensely important in baseball’s labor movement, serving as the plaintiff in the last baseball lawsuit to reach the U.S. Supreme Court, and helping to usher in the current “free agency” era of baseball. He was also a star player, spending 15 years in the major leagues with the Cincinnati Red(leg)s, the St. Louis Cardinals, and the Washington Senators. He was a three-time All Star, a seven-time Gold Glove winner, and retired with a .293 batting average.
After twelve seasons in St. Louis, on October 7, 1969, the Cardinals traded Flood and several other players, including Tim McCarver, to the Philadelphia Phillies. Yet, Flood, who was still near the peak of his playing years, had no interest in going, citing Philadelphia’s terrible record, dilapidated stadium, and racist fans, at least in Flood’s eyes.
Flood refused to report to Philadelphia and sent a strongly-worded letter to baseball’s commissioner at the time, Bowie Kuhn, noting that he was not “a piece of property to be bought and sold irrespective of my wishes.” Flood added his belief that “any system which produces that result violates my basic rights as a citizen and is inconsistent with the laws of the United States and of the several States.”
Flood’s letter to Kuhn fell on deaf ears, and he filed suit against the League in the Southern District of New York, alleging that baseball’s reserve clause violated antitrust law. Flood, who was then making $90,000 per season, sought $1 million in damages. Flood retained former Supreme Court Justice Arthur Goldberg, who agreed to handle the matter without charge. Flood knew that the lawsuit, which could potentially (and did) take years, would effectively end his playing career.
Several former players testified at trial on behalf of Flood, including Hall of Famers Jackie Robinson and Hank Greenberg, as well as Bill Veeck, renegade owner of the Chicago White Sox. No current players testified in favor of Flood, however. Following a ten-week bench trial, the district court ruled against Flood and in favor Major League Baseball, finding that the reserve clause had beneficial aspects for the game and its players.
Flood appealed the ruling to the Second Circuit, which affirmed the district court, holding that Federal Baseball and Toolson were binding precedent and, thus, Major League Baseball was not subject to the Sherman Act because baseball did not constitute interstate commerce. The Second Circuit added that baseball was “so uniquely interstate commerce” as the league extended over many states that the “consequent extra-territorial effect of necessary compliance” with multiple state antitrust laws would be “far reaching.” Accordingly, federal law pre-empted the application of state antitrust laws.
The Second Circuit acknowledged that Flood was “caught in a most frustrating predicament . . . . On the one hand, the doctrine of stare decisis binds the plaintiff because of an initial holding that baseball is not ‘interstate commerce’ within the Sherman Act, and, on the other hand, after there have been significant changes in the definition of ‘interstate commerce,’ he is now told that baseball is so uniquely interstate commerce that state regulation cannot apply.” Remarkably, the Second Circuit concluded its opinion with an unpersuasive defense of itself: “in our own defense, we do not consider our decision to be internally inconsistent . . . . Any apparent inconsistency results not from faulty logic, but from the vagaries of fate and this court’s subordinate role to the Supreme Court.” The court doth protest too much, methinks.
Flood v. Kuhn, 407 U.S. 258 (1972)
With that, Flood was ready to take his case to the Supreme Court, which granted cert on October 19, 1971—just two days after the Pittsburgh Pirates defeated the Baltimore Orioles in Game 7 of the World Series, and Roberto Clemente became the first Spanish-speaking ballplayer to earn World Series MVP honors after batting .383 and hitting safely in all seven games.
Former Justice Goldberg was set to reappear before his old colleagues. Commissioner Kuhn, a former litigator himself who had previously represented baseball during the Toolson litigation, considered handling oral argument for Major League Baseball himself, though he ultimately deferred to baseball’s counsel. Oral argument was held March 20, 1972, just before Opening Day.
On June 19, 1972, by a 5–3 margin, the Court ruled against Flood, invoking stare decisis and the Court’s existing precedent in Federal Baseball and Toolson. (Justice Powell recused himself because he owned stock in Anheuser-Busch, which owned the Cardinals.)
The majority opinion, authored by Justice Blackmun, is rather entertaining to read, if even a bit intellectually unsatisfying / indefensible. (Indeed, the decision has been widely mocked since it was issued.) The opinion opens with a random section about the history of “The Game” that was so pointless / embarrassing that Chief Justice Burger noted that he concurred in all sections of the opinion but that one.
The opinion of course discusses the Federal Baseball and Toolson decisions, recognizing their flaws while also the important role of stare decisis. The decision concluded with a rather curious and remarkable set of bullet points about the state of the law and baseball that seemed rather apologetic:
- Professional baseball is a business and it is engaged in interstate commerce.
- With its reserve system enjoying exemption from the federal antitrust laws, baseball is, in a very distinct sense, an exception and an anomaly. Federal Baseball and Toolson have become an aberration confined to baseball.
- Even though others might regard this as “unrealistic, inconsistent, or illogical,” the aberration is an established one, and one that has been recognized not only in Federal Baseball and Toolson, but in Shubert, International Boxing, and Radovich, as well, a total of five consecutive cases in this Court. It is an aberration that has been with us now for half a century, one heretofore deemed fully entitled to the benefit of stare decisis, and one that has survived the Court’s expanding concept of interstate commerce. It rests on a recognition and an acceptance of baseball’s unique characteristics and needs.
- Other professional sports operating interstate—football, boxing, basketball, and, presumably, hockey and golf—are not so exempt.
- The advent of radio and television, with their consequent increased coverage and additional revenues, has not occasioned an overruling of Federal Baseball and Toolson.
- The Court has emphasized that since 1922 baseball, with full and continuing congressional awareness, has been allowed to develop and to expand unhindered by federal legislative action. Remedial legislation has been introduced repeatedly in Congress but none has ever been enacted. The Court, accordingly, has concluded that Congress as yet has had no intention to subject baseball’s reserve system to the reach of the antitrust statutes. This, obviously, has been deemed to be something other than mere congressional silence and passivity.
- The Court has expressed concern about the confusion and the retroactivity problems that inevitably would result with a judicial overturning of Federal Baseball. It has voiced a preference that if any change is to be made, it come by legislative action that, by its nature, is only prospective in operation.
- The Court noted in Radovich, 352 U.S., at 452, that the slate with respect to baseball is not clean. Indeed, it has not been clean for half a century.
Accordingly, the Court concluded that it would “adhere once again to Federal Baseball and Toolson and to their application to professional baseball” and “[i]f there is any inconsistency or 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.”
Justice William Douglas, who had been part of the majority in the Toolson matter, case, filed a remarkable dissent which expressed his regret over the Court’s prior decision. He described Federal Baseball as “a derelict in the stream of the law that we, its creator, should remove. Only a romantic view of a rather dismal business account over the last 50 years would keep that derelict in midstream.” He added, “The beneficiaries of the Federal Baseball Club decision are not the Babe Ruths, Ty Cobbs, and Lou Gehrigs. The owners, whose records many say reveal a proclivity for predatory practices, do not come to us with equities. The equities are with the victims of the reserve clause.” Justice Thurgood Marshall also filed a dissent, joined by Justice Brennan, which largely agreed with Justice Douglas that Federal Baseball and Toolson should be overturned, though in more measured language.
Baseball had survived its third major test before the Supreme Court.
Flood lost the battle but the (major league) players won the war
Although Flood lost his case, he had inflicted damage to the dam that was the reserve clause from which it would not recover. Following the Flood decision, the players were galvanized, and the players’ union, the Major League Baseball Players Association, led by Marvin Miller, took several steps to improve labor conditions.
In 1970, the players’ union and Major League Baseball had entered into a collective bargaining agreement that, among other things, established a grievance procedure involving a neutral arbitrator. This allowed players to test the bounds of their contracts, including the reserve clause.
One classic example involved a dispute between future Hall of Famer Jim “Catfish” Hunter and the Oakland Athletics and their fickle owner Charlie Finley. In 1974, Catfish Hunter would go on to win the Cy Young Award. He was also to be paid a salary of $50,000, plus another $50,000 for an insurance annuity. The payments for the annuity, however, were not immediately deductible business expenses, which irritated the incredibly cheap Finley, who refused to pay.
The union quickly filed a grievance, arguing that Finley and the A’s refusal constituted a material breach, which should permit Hunter to terminate the agreement and immediately become a free agent. The arbitrator agreed with the union, and Hunter became the first “free agent” in baseball history. Two weeks later—after 20 teams had submitted bids for Hunter’s services—he signed a 5-year, $3.5 million contract, by far the richest contract in baseball, earning him more than double the next highest player. This was a major wake up call for all, especially the players, who quickly realized how much they were being underpaid.
The key challenge that broke the dam ended up being grievances filed on behalf of pitchers Andy Messersmith and Dave McNally In December 1975, less than four years after the Flood decision, the dam burst with the “Seitz decision,” a ruling by arbitrator Peter Seitz, who heard the Messersmith and McNally grievances. (Seitz had also heard Catfish Hunter’s arbitration.)
Seitz declared that players became free agents after playing one year for their team without a contract. This was a radically new interpretation of baseball’s reserve clause—instead of lasting in perpetuity, Seitz said it only bound a player for one season after his contract expired. This effectively nullified the reserve clause, which ushered in the free agency era and immeasurably strengthened the players’ union. The following year, Major League Baseball and the players’ union reached an agreement whereby players with six years’ experience would be granted free agency.
Although the League and the union have negotiated several agreements since then, that basic system remains in place to this day. (Baseball’s current collective bargaining agreement is set to expire in December 2021).
In 1998, Congress enacted the Curt Flood Act of 1998, which declared that the antitrust laws apply to Major League Baseball’s employment practices. The law was largely symbolic, as free agency was already well established. An interesting aspect of the law, however, was that only Major League Baseball players were given standing to sue—minor league remain subject to the reserve clause, which is an interesting wrinkle as new disputes between the major leagues and minor leagues emerge.
One never knows when the next major antitrust challenge may arise.
(For a great, in-depth, and highly readable book on baseball’s history with the legal system, I highly recommend Professor Stuart Banner’s The Baseball Trust: A History of Baseball’s Antitrust ExemptionThe Baseball Trust: A History of Baseball’s Antitrust Exemption.)