Curt Flood Act of 1998: Application of Federal Antitrust Laws to Major League Baseball Players

“Curt Flood Act of 1998": Application
of Federal Antitrust Laws to
Major League Baseball Players
Janice E. Rubin
Legislative Attorney
American Law Division
The “Curt Flood Act of 1998"(S. 53, 105th Congress)1 was narrowly directed at
altering just one aspect of the anomalous situation under which professional baseball
operates with an “exemption” from the antitrust laws. The measure added a new section
(§ 26b)2 to the Clayton Act (15 U.S.C. §§ 12 et seq.) to clarify that major league baseball
players would be covered under the federal antitrust laws to the same extent as are other
professional athletes, and defined “major league baseball players” as persons who are
or were parties to major league players’ contracts. It specifically did not purport to affect
in any way, inter alia: (1) professional baseball’s relations with “organized professional
minor league baseball”; or (2) “the agreement between organized professional major
league baseball teams and the National Association of Professional Baseball Leagues
(“Professional Baseball Agreement”). Questions concerning whether the measure will
be of substantial efficacy, however, remain, primarily owing to the existence of the
judicially created labor-antitrust doctrine.

1 See S.Rept. 105-118. The measure passed the House, without any report, under suspension.
2 The bill itself directed that the new section is to be added at the end of the existing Clayton Act,
but discussion with staff at the Senate Judiciary Committee at the time of passage confirmed that
the section was, in fact, to be inserted between section 26a and the then-existing section 27
(severability clause), which was to be (and has since been) renumbered as section 28. In fact, the
new section has been codified as 15 U.S.C. § 26b, pursuant to editorial “redesignation,”
according to a Note in the 2003 Supplement to the volume containing 15 U.S.C. § § 8-40.

Professional baseball — alone among professional sports — has traditionally been
considered to enjoy a complete exemption from the antitrust laws: in 1922, when the
National League was sued in an action which alleged that the League had acted in
contravention of the antitrust laws to destroy the rival Federal League, the Supreme Court
ruled that the business of giving “exhibitions of baseball” could not be considered
commerce for purposes of federal antitrust jurisdiction;3 the Court has never reversed its
position that the antitrust laws may be made applicable to baseball only by Congress,
although it has had the opportunity several times to do so.4 In the years since the Flood
decision (see note 4), Congress had made several attempts to act on the Court’s invitation,
but until S. 53 in the 105th Congress, none was successful.5 In addition to clarifying that

3 Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs, 259
U.S. 200, 208-209.
4 In 1953, in Toolson v. New York Yankees, Inc., 346 U.S. 356, 357, the Court reaffirmed its
position, although it did note that “if there are evils in this field which now warrant application
to it of the antitrust laws it should be by legislation” and not by judicial action. By 1972, the
Court’s “expanding interpretation of the commerce power led it to state unequivocally that
‘professional baseball is a business ... engaged in interstate commerce’” (Piazza v. Major League
Baseball, 831 F.Supp. 420, 435, 436 (E.D. Pa. 1993), quoting, Flood v. Kuhn, 407 U.S. 258, 282
(emphasis added)), and, quoting the Toolson language (407 U.S. at 273), continued to state that
although it considered the antitrust-exempt status of professional baseball an “anomaly” and an
“aberration” in the application of the antitrust laws — both to business generally and to
professional sports particularly, the “inconsistency or illogic” of that situation would have to be
“remedied by Congress and not by th[e] Court” (407 U.S. at 284); the “Curt Flood Act” took its
name from the plaintiff in that case, Curt Flood, the St. Louis Cardinals player traded to the
Philadelphia Phillies against his wishes.
5 In its Final Report, the House Select Committee on Professional Sports (94th Congress),
concluded that “adequate justification does not exist for baseball’s special exemption from the
antitrust laws ... [and] the exemption should be removed in the context of overall sports antitrust
reform” (Inquiry into Professional Sports (January 3, 1977) at 60). Among the first responses
to the Committee’s Report was H.R. 2129,”Sports Antitrust Reform Act of 1979,” introduced by
Representative Seiberling. The bill was prompted, inter alia, he indicated upon introduction, by
the “invitations” to Congress (from both the Supreme Court and the Committee on Professional
Sports) to legislatively repeal the antitrust exemption enjoyed by baseball alone among
professional sports (see, 125 Cong. Rec. 2521, February 13, 1979).rd
In the 103 Congress, (1) the Senate Judiciary Committee voted not to report S. 500
(Metzenbaum, “Professional Baseball Reform Act of 1993"); (2) H.R. 108 (Bilirakis, a measure
to make the antitrust laws applicable to professional baseball teams and the leagues of which they
are a part remained pending in the Economic and Commercial Law Subcommittee of the House
Judiciary Committee; (3) several measures — each titled “Baseball Fans Protection Act” — to
“encourage serious negotiation between the major league baseball players and the owners of
major league baseball” by amending the Clayton Act to make the antitrust laws applicable to
“unilateral terms or conditions ... imposed by any party that has been subject to an agreement
between the owners of major league baseball and labor organizations representing the players of
major league baseball ...” were introduced immediately prior to or at the beginning of the 1994
baseball strike; (4) House labor-specific measures were the focus, as a group, of September 1994
hearings before the Economic and Commercial Law Subcommittee or the House Judiciary
Committee; (5) H.R. 4994 (Synar, “Baseball Fans and Communities Protection Act,” which

the bill was not intended to apply in any way to the minor league arrangements between
major league baseball and its “farm” system, the bill also made specifically clear that it
did not apply to: (1) any activity “relating to or affecting” the franchise activities of
professional baseball (e.g., (re)location, expansion, ownership transfer, etc.); (2) any
sports-broadcasting activities protected under the “Sports Broadcasting Act” (see note 5);
or (3) relationships between professional baseball and persons who are neither “major
league baseball players” (e.g., umpires) nor “not in the business of organized professional
major league baseball.”
While the fact of an antitrust exemption for professional baseball has been
recognized since 1922, the extent and scope of baseball’s antitrust exemption have been
the subject of some recent judicial discussion in the state and lower federal courts. For
example, the Piazza court (supra, note 3) stated in 1993 that
the exemption created by Federal Baseball [supra, note 2] is ... limited to baseball’s
‘reserve system.’ ... In each of the three cases in which the Supreme Court directly
addressed the exemption, the factual context involved the reserve clause. ... Between
1922 and 1972, Baseball’s expansive view [of the scope of its exemption] may have
been correct. ... In 1972, however, the Court in Flood v. Kuhn stripped from Federal
Baseball and Toolson [supra, note 3] any precedential value those cases may have had6
beyond the particular facts there involved., i.e., the reserve clause.
Piazza was discussed and its conclusion endorsed by the Florida Supreme Court in7
Butterworth v. National League of Professional Baseball Clubs, and followed in,

5 (...continued)
specifically exempted from its coverage “non-major league baseball club[s]”)was reported by the
Judiciary Committee (H.Rept. 103-871), but not acted upon; and (6) S. 2380 (Metzenbaum,
“Baseball Fans Protection Act of 1994,” which did not contain the minor league exemption) was
placed on the calendar, but not acted upon by the full Senate.
More than a dozen measures to make the antitrust laws either unqualifiedly applicable to
professional baseball generally, or applicable only to specific issues (e.g., player-managementth
relations), were introduced in the 104 Congress, which was also energized by the 1994 strike,
but it, too, adjourned without having enacted any of them. For example, Senator Hatch, sponsorth
of S. 53 in the 105 Congress, sponsored S. 627, “Major League Baseball Antitrust Reform Act
of 1995,” substantially similar to S. 53, which would have exempted from otherwise inclusive
antitrust coverage for professional baseball, the “draft, any ... matter related to the minor
leagues,” franchise relocation or the “Sports Broadcasting Act of 1961" (P.L. 87-331, 15 U.S.C.
§§ 1291-1295, which allows professional sports teams to pool their rights to sponsored
telecasting of their games without violating the antitrust laws, and to pool the revenues received
from such telecasts. Professional baseball is, curiously, among the team sports enumerated as
enjoying the protection of the Act, although the thinking when it was enacted in 1961 was that
professional baseball did not need the exemption from the antitrust laws because it was not
covered in the first place.) Legislation to exclude professional baseball from the antitrustrd
exemption provided by the “Sports Broadcasting Act” was, in fact, introduced in both the 103th
(H.R. 1549, Bilirakis) and 104 (H.R. 105, Bilirakis) Congresses.
6 Piazza at 421, 435, 436. The Flood Court had stated, at 407 U.S. 282, “... it seems appropriate
now to say that: ... [w]ith its reserve system enjoying exemption from the federal antitrust laws,
baseball is, in a very distinct sense, an exception and an anomaly” (emphasis added).
7 644 So. 2d 1021 (Fla. S. Ct. 1994).

Morsani v. Major League Baseball,8 even though the Butterworth court recognized that
the Piazza conclusion “is against the great weight of federal cases regarding the scope of
the exemption”.9
On the other hand, the United States District Court for the Western District of
Washington, in McCoy v Major League Baseball10 “reject[ed] the reasoning and results
of Piazza and Butterworth” that while the result of Federal Baseball and Toolson — that
the reserve clause is exempt from the operation of the antitrust laws — remains valid, the
rule of those cases — that baseball is totally exempt from the operation of the antitrust
laws — was fatally undermined by the Court’s statement in Flood that professional
baseball is, in fact, a “business ... engaged in commerce.” The Washington court preferred
to defer to the Court’s reiteration in Flood (407 U.S. at 285) of its statement in Toolson
(346 U.S. at 357) that it was sustaining and approving Federal Baseball “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.”11
Despite the enactment of the “Curt Flood Act” to assure that “major league baseball
players will have the same rights under the antitrust laws as do other professional
athletes,” the ability of professional baseball players to prevail in court has not been
assured, and there has not been a single case interpreting 15 U.S.C. § 26b reported in the
annotations to that provision. Although players no longer face the possibility of having
their cases summarily dismissed because the court cannot exercise jurisdiction over a
claim which states an antitrust count, another judicially created exemption may not allow
the cases to proceed to conclusion: the labor-antitrust exemption holds that when
legitimate conditions of employment are contained within a genuinely negotiated
collective bargaining agreement, the antitrust laws do not apply to either side of the labor-
management equation, and may not be used to challenge a term or condition — even
where the antitrust laws might otherwise be utilized to challenge a similar term or
condition.12 For example, in Caldwell v. American Basketball Association, Inc.,13 when
a professional basketball player attempted to bring an antitrust action against the
basketball association, its commissioner, a former team, and owners, charging that he had
been “blacklisted” and prevented from playing professional basketball as a result of his
activities as president of a players’ union, the court denied his challenge, noting that when

8 663 So. 2d 653 (Fla. Dist. Ct. App. 1995).
9 644 So. at 1025.
10 911 F.Supp. 454 (W.D. Wash. 1995).
11 Id. at 457.
12 E.g., Connell Construction Company, Inc. v. Plumbers & Steamfitters Local Union No. 100,
421 U.S. 616, 622 (1975): “The Court has recognized that a proper accommodation between the
congressional policy favoring collective bargaining under the NLRA [National Labor Relations
Act] and the congressional policy favoring free competition in business markets requires that
some union-employer agreements be accorded a limited nonstatutory exemption from antitrust
sanction. Meatcutters v. Jewel Tea Co., 381 U.S. 676 (1975).”
13 66 F. 3d 523 (2d Cir. 1995).

there is a players’ union involved, “the [player] employee loses the right to bargain for the
best price for his or her labor.” The court also stated that
[w]e will assume for purposes of analysis that absent a collective bargaining
relationship, the conduct alleged by Caldwell would state a claim under the Sherman
[Antitrust] Act [15 U.S.C.§§1-7]. Nevertheless, because Caldwell’s antitrust claims
would ‘subvert fundamental principles of federal labor policy,’ Wood v. National
Basketball Ass’n., 809 F.2d 954, 959 (2d Cir. 1987), they are barred by the so-called
non-statutory exemption.
The court also noted emphatically that, “To be sure, in sports leagues, unionized players
generally engage in individual bargaining with teams. However, it must be emphasized
that such individual bargaining is not an exercise of a right to free competition under the
antitrust laws; rather, it is an exercise of a right derived from collective bargaining
itself.”14 The still-remaining unanswered question, therefore, is whether and how the non-
statutory labor exemption will affect the efficacy of P.L. 105-297.

14 Id. at 527, 528.