Toolson v. New York Yankees, Inc., 346 U.S. 356 (1953)

346 U.S.
356
74 S.Ct. 78
98 L.Ed. 64
TOOLSON
v.
NEW YORK YANKEES, Inc. et al. KOWALSKI v.
CHANDLER et al. CORBETT et al. v. CHANDLER et al.
Nos. 18, 23 and 25.
Argued Oct. 13, 14, 1953.
Decided Nov. 9, 1953.
Rehearing Denied Dec. 14, 1953.
See 346 U.S. 917, 74 S.Ct. 271.

No. 18:
Mr. Howard L. Parke, Baltimore, Md., for petitioner Toolson.
Mr. Norman S. Sterry, Los Angeles, Cal., for respondents New York
Yankees and others.
No. 23:
Mr. Frederic A. Johnson, New York City, for petitioner Kowalski.
Mr. Raymond T. Jackson, Cleveland, Ohio, for respondents Chandler and
others.
No. 25:
Mr. Seymour Martinson, New York City, for petitioner Corbett and
another.
Mr. Raymond T. Jackson, Cleveland, Ohio, for respondents Chandler and
others.
PER CURIAM.
In Federal Baseball Club of Baltimore v. National League of Professional

Baseball Clubs, 1922, 259 U.S. 200, 42 S.Ct. 465, 66 L.Ed. 898, this Court held
that the business of providing public baseball games for profit between clubs of
professional baseball players was not within the scope of the federal antitrust
laws. Congress has had the ruling under consideration but has not seen fit to
bring such business under these laws by legislation having prospective effect.
The business has thus been left for thirty years to develop, on the understanding
that it was not subject to existing antitrust legislation. The present cases ask us
to overrule the prior decision and, with retrospective effect, hold the legislation
applicable. We think that if there are evils in this field which now warrant
application to it of the antitrust laws it should be by legislation. Without reexamination of the underlying issues, the judgments below are affirmed on the
authority of Federal Baseball Club of Baltimore v. National League of
Professional Baseball Clubs, supra, so far as that decision determines that
Congress had no intention of including the business of baseball within the
scope of the federal antitrust laws.
Affirmed.
Mr. Justice BURTON, with whom Mr. Justice REED concurs, dissenting.
Whatever may have been the situation when the Federal Baseball Club case 1
was decided in 1922, I am not able to join today's decision which, in effect,
announces that organized baseball, in 1953, still is not engaged in interstate
trade or commerce. In the light of organized baseball's well-known and widely
distributed capital investments used in conducting competitions between teams
constantly traveling between states, its receipts and expenditures of large sums
transmitted between states, its numerous purchases of materials in interstate
commerce, the attendance at its local exhibitions of large audiences often
traveling across state lines, its radio and television activities which expand its
audiences beyond state lines, its sponsorship of interstate advertising, and its
highly organized 'farm system' of minor league baseball clubs, coupled with
restrictive contracts and understandings between individuals and among clubs
or leagues playing for profit throughout the United States, and even in Canada,
Mexico and Cuba, it is a contradiction in terms to say that the defendants in the
cases before us are not now engaged in interstate trade or commerce as those
terms are used in the Constitution of the United States and in the Sherman Act,
15 U.S.C.A. 17, 15 note.2
In 1952 the Subcommittee on Study of Monopoly Power, of the House of

Representatives Committee on the Judiciary, after extended hearings, issued a
report dealing with organized baseball in relation to the Sherman Act. In that
report it said:
6
"Organized baseball' is a combination of approximately 380 separate baseball

clubs, operating in 42 different States, the District of Columbia, Canada, Cuba,
and Mexico * * *.
'Inherently, professional baseball is intercity, intersectional, and interstate. At

the beginning of the 1951 season, the clubs within organized baseball were
divided among 52 different leagues. Each league is an unincorporated
association of from 6 to 10 clubs which play championship baseball games
among themselves according to a prearranged schedule. Such a league
organization is essential for the successful operation of baseball as a business.
'Of the 52 leagues associated within organized baseball in 1951, 39 were

interstate in nature.'3
In the Federal Baseball Club case the Court did not state that even if the
activities of organized baseball amounted to interstate trade or commerce those
activities were exempt from the Sherman Act. The Court acted on its
determination that the activities before it did not amount to interstate
commerce. The Court of Appeals for the District of Columbia, in that case, in
1921, described a major league baseball game as 'local in its beginning and in
its end.'4 This Court stated that 'The business is giving exhibitions of baseball,
which are purely state affairs', and the transportation of players and equipment
between states 'is a mere incident * * *.'5 The main thrust of the argument of
counsel for organized baseball, both in the Court of Appeals and in this Court,
was in support of that proposition.6 Although counsel did argue that the
activities of organized baseball, even if amounting to interstate commerce, did
not violate the Sherman Act,7 the Court significantly refrained from expressing
its opinion on that issue.
10
That the Court realized that the then incidental interstate features of organized
baseball might rise to a magnitude that would compel recognition of them
independently is indicated by the statement made in 1923 by Mr. Justice
Holmes, the writer of the Court's opinion in the Federal Baseball Club case. In
1923, in considering a bill in equity alleging a violation of the Sherman Act by
parties presenting local exhibitions on an interstate vaudeville circuit, the Court
held that the bill should be considered on its merits and, in writing for the
Court, Mr. Justice Holmes said 'The bill was brought before the decision of the
Baseball Club Case, and it may be that what in general is incidental, in some
instances may rise to a magnitude that requires it to be considered
independently.'8
11
The 1952 report of the Congressional Subcommittee previously mentioned also

said:
12
'Under judicial interpretations of this constitutional provision (the commerce

clause), the Congress has power to investigate, and pass legislation dealing with
professional baseball, or more particularly 'organized baseball,' if that business
is, or affects, interstate commerce.
13
'After full review of all of the foregoing facts and with due consideration of
modern judicial interpretation of the scope of the commerce clause, it is the
studied judgment of the Subcommittee on the Study of Monopoly Power that
the Congress has jurisdiction to investigate and legislate on the subject of
professional baseball.' H.R.Rep. No. 2002, 82d Cong., 2d Sess. 4, 7, and see
111139.9
14
In cases Nos. 18 and 23 the plaintiffs here allege that they are professional
baseball players who have been damaged by enforcement of the standard
'reserve clause' in their contracts pursuant to nationwide agreements among the
defendants.10 In effect they charge that in violation of the Sherman Act,
organized baseball, through its illegal monopoly and unreasonable restraints of
trade, exploits the players who attract the profits for the benefit of the clubs and
leagues. Similarly, in No. 25, the plaintiffs allege that because of illegal and
inequitable agreements of interstate scope between organized baseball and the
Mexican League binding each to respect the other's 'reserve clauses' they have
lost the services of and contract rights to certain basebabll players. The
plaintiffs also allege that the defendants have entered into a combination,
conspiracy and monopoly or an attempt to monopolize professional baseball in
the United States to the substantial damage of the plaintiffs.
15
Conceding the major asset which baseball is to our Nation, the high place it
enjoys in the hearts of our people and the possible justification of special
treatment for organized sports which are engaged in interstate trade or
commerce, the authorization of such treatment is a matter within the discretion
of Congress.11 Congress, however, has enacted no express exemption of
organized baseball from the Sherman Act, and no court has demonstrated the
existence of an implied exemption from that Act of any sport that is so highly
organized as to amount to an interstate monopoly or which restrains interstate
trade or commerce. In the absence of such an exemption, the present popularity
of organized baseball increases, rather than diminishes, the importance of its
compliance with standards of reasonableness comparable with those now

required by law of interstate trade or commerce. It is interstate trade or
commerce and, as such, it is subject to the Sherman Act until exempted.
Accordingly, I would reverse the judgments in the instant cases and remand the
causes to the respective District Courts for a consideration of the merits of the
alleged violations of the Sherman Act.
Federal Baseball Club v. National League, 259 U.S. 200, 42 S.Ct. 465, 66 L.Ed.
898.
Compare Paul v. Virginia, 8 Wall. 168, 19 L.Ed. 357; and Hooper v. People of
State of California, 155 U.S. 648, 15 S.Ct. 207, 39 L.Ed. 297; with United
States v. South-Eastern Underwriters Ass'n, 322 U.S. 533, 64 S.Ct. 1162, 88
L.Ed. 1440; and Lorain Journal Co. v. United States, 342 U.S. 143, 72 S.Ct.
181, 96 L.Ed. 162. See also, Times-Picayune Publishing Co. v. United States,
345 U.S. 594, 73 S.Ct. 872; United States v. National Ass'n of Real Estate
Boards, 339 U.S. 485, 70 S.Ct. 711, 94 L.Ed. 1007; United States v. Crescent
Amusement Co., 323 U.S. 173, 65 S.Ct. 254, 89 L.Ed. 160; American Medical
Ass'n v. United States, 317 U.S. 519, 63 S.Ct. 326, 87 L.Ed. 434.
H.R.Rep. No. 2002, 82d Cng., 2d Sess. 4, 5.

'The primary sources of revenue for baseball clubs are admissions, radio and
television, and concessions. The following table indicates the combined
revenue of the 16 major-league clubs from these sources for the years 1929,
1939, and 1950.
"Major league revenue
"(In thousands of dollars)
1
"Source of revenue 19291939
1950
Home games. 6,559.1. 6,766.6 18,334.8

Road games. 2,221.4. 2,320.2 4,517.8
Exhibition games. 422.6. 515.7 911.5
Radio and television. 0. 884.5 3,365.5
Concessions (net). 582.8. 850.3 2,936.3
Other.....____733.4.___776.0 _1,969.6
Gross receipts. 10,519.5 12,113.3 32,035.5
1
"Data unavailable for 2 clubs: Chicago, American League; and Pittsburgh,

National League.
'The fastest-growing source of revenue for major league clubs is radio and
television. Receipts from these media of interstate commerce were nonexistent
in 1929. In 1939, 7.3 percent of the clubs' revenue came from this source; and
in 1950, this share rose to 10.5 percent.
'Portrayed in absolute terms, the growing importance of radio and television
becomes even more pronounced. Receipts rose from nothing in 1929 to
$884,500 in 1939 and $3,365,500 in 1950. Reported income from primary radio
and television contracts for 1951 indicate that this sharp increase is continuing.
* * * To this must be added $110,000 for the sale of radio and television rights
to the 1951 all-star game and $1,075,000 for the sale of similar rights to the
1951 world series.' Id., at 56.
National League of Professional Baseball Clubs v. Federal Baseball Club, 50

App.D.C. 165, 169, 269 F. 681, 685.
259 U.S., at page 208, 209, 42 S.Ct. at page 466.
See brief for appellants in the Court of Appeals, pp. 45 67; brief for defendants
in error in this Court, pp. 4566.
See brief for appellants in Court of Appeals, pp. 6872; brief for defendants in
error in this Court, pp. 6672.
Hart v. ,B. F. Keith Vaudeville Exchange, 262 U.S. 271, 274, 43 S.Ct. 540,
541, 67 L.Ed. 977, and see North American Co. v. Securities and Exchange
Comm., 327 U.S. 686, 694, 66 S.Ct. 785, 791, 90 L.Ed. 945.
In opposing approval of four exclusionary bills then pending, the

Subcommittee did not take the stand that organized baseball and other
comparable sports, although constituting interstate trade or commerce, already
are exempt from the broad coverage of the Sherman Act. On the contrary, it
said:
'Four bills have been introduced in the Congress, three in the House, one in the
Senate, intending to give baseball and all other professional sports a complete
and unlimited immunity from the antitrust laws. The requested exemption
would extend to all professional sports enterprises and to all acts in the conduct
of such enterprises. The law would no longer require competition in any facet of
business activity of any sport enterprise. Thus the sale
of radio and television rights, the management of stadia, the purchase and sale
of advertising, the concession industry, and many other business activities, as
well as the aspects of baseball which are solely related to the promotion of
competition on the playing field, would be immune and untouchable. Such a
broad exemption could not be granted without substantially repealing the
antitrust laws.' Id., at 230.
10
'The reserve clause is popularly believed to be some provision in the player

contract which gives to the club in organized baseball which first signs a player
a continuing and exclusive right to his services. Commissioner Frick testified
that this popular understanding was essentially correct. He pointed out,
however, that the reserve clause is not merely a provision in the contract, but
also incorporates a reticulated system of rules and regulations which enable,
indeed require, the entire baseball organization to respect and enforce each
club's exclusive and continuous right to the services of its players.' H.R.Rep.
No. 2002, 82d Cong., 2d Sess. 111. See also, Section VII, The Reserve Clause,
Id., at 111139, and Gardella v. Chandler, 2 Cir., 172 F.2d 402.
In No. 18 the following specific allegations appear and those in No. 23 are
comparable:
'XI.
'That the Defendants, and each of them, have entered into or agreed to be bound
by a contract in the restraint of Interstate Commerce; that said contract is
designated as the Major-Minor League Agreement, dated December 6, 1946,
and provides in effect that:
'1. All players' contracts in the Major Leagues shall be of one form and that all
players' contracts in the Minor Leagues shall be of one form.
'2. That all players' contracts in any league must provide that the Club or any
assignee thereof shall have the option to renew the player's contract each year
and that the player shall not play for any other club but the club with which he
has a contract or the assignee thereof.
'3. That each club shall, on or before a certain date each year, designate a
reserve list of active and eligible players which it desires
to reserve for the ensuing year. That no player on such a reserve list may
thereafter be eligible to play for any other club until his contract has been
assigned or until he has been released.
'4. That the player shall be bound by any assignment of his contract by the club,
and that his remuneration shall be the same as that usually paid by the assignee
club to other players of like ability.
'5. That there shall be no negotiations between a player and any other club from
the one which he is under contract or reservation respecting employment either
present or prospective unless the Club with which the player is connected shall
have in writing expressly authorized such negotiations prior to their
commencement.
'6. That in the case of Major League players, the Commissioner of Baseball and
in the case of Minor League players, the President of the National Association,
may determine that the best interests of the game require a player to be declared
ineligible and, after such declaration, no club shall be permitted to employ him
unless be shall have been reinstated from the ineligible list.
'7. That an ineligible player whose name is omitted from a reserve list shall not
thereby be rendered eligible for service unless and until he has applied for and
been granted reinstatement.
'8. That any player who violates his contract or reservation, or who participates
in a game with or against a club containing or controlled by ineligible players or
a player under indictment for conduct detrimental to the good repute of
professional baseball, shall be considered an ineligible player and placed on the
ineligible list.
'9. That an ineligible player must be reinstated before he may be released from
his contract.
'10. That clubs shall not tender contracts to ineligible players until they are
reinstated.
'11. That no club may release unconditionally an ineligible player unless such
player is first reinstated from the ineligible list to the active list.
'XIII.
'That by reason of Plaintiff being placed and held on said ineligible list as
hereinabove set out and the making of the aforementioned contract by the
Defendants, the Defendants, and each of them, have refused since the 25th day
of May, 1950, and still do refuse to allow Plaintiff to play professional baseball,
and that Plaintiff has thereby been deprived of his means of livelihood, all to
the Plaintiff's damages in the sum of $125,000.00.'
The complaint also contains a separate cause of action alleging that the
defendants, by virtue of their agreements, have entered into a combination and
conspiracy in the restraint of trade or commerce among the several states, and
another cause of action alleging that the defendants have, by their agreements,
combined to monopolize professional baseball in the United States.
11
E.g., Congress has expressly exempted certain specific activities from the
Sherman Act, as in 6 of the Clayton Act, 38 Stat. 731, 15 U.S.C. 17, 15
U.S.C.A. 17 (labor organizations), in the Capper-Volstead Act, 42 Stat. 388
389, 7 U.S.C. 291, 292, 7 U.S.C.A. 291, 292 (farm cooperatives), and
in the McCarran-Ferguson Act, 59 Stat. 34, 61 Stat. 448, 15 U.S.C. (Supp. V)
1013, 15 U.S.C.A. 1013 (insurance). And see Apex Hosiery Co. v. Leader,
310 U.S. 469, 501, 512, 60 S.Ct. 982, 996, 1002, 84 L.Ed. 1311.

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Toolson v. New York Yankees, Inc., 346 U.S. 356 (1953)

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346 U.S.

See 346 U.S. 917, 74 S.Ct. 271.

In Federal Baseball Club of Baltimore v. National League of Professional

In 1952 the Subcommittee on Study of Monopoly Power, of the House of

"Organized baseball' is a combination of approximately 380 separate baseball

'Inherently, professional baseball is intercity, intersectional, and interstate. At

'Of the 52 leagues associated within organized baseball in 1951, 39 were

The 1952 report of the Congressional Subcommittee previously mentioned also

'Under judicial interpretations of this constitutional provision (the commerce

compliance with standards of reasonableness comparable with those now

H.R.Rep. No. 2002, 82d Cng., 2d Sess. 4, 5.

Home games. 6,559.1. 6,766.6 18,334.8

"Data unavailable for 2 clubs: Chicago, American League; and Pittsburgh,

National League of Professional Baseball Clubs v. Federal Baseball Club, 50

259 U.S., at page 208, 209, 42 S.Ct. at page 466.

In opposing approval of four exclusionary bills then pending, the

'The reserve clause is popularly believed to be some provision in the player

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