Toolson v. New York Yankees, Inc.

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1953 United States Supreme Court case

1953 United States Supreme Court case

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**Toolson v. New York Yankees, Inc. **

Toolson v. New York Yankees, 346 U.S. 356 (1953), is a United States Supreme Court case in which the Court upheld, 7–2, the antitrust exemption first granted to Major League Baseball (MLB) three decades earlier in _Federal Baseball Club v. National League _. It was also the first challenge to the reserve clause which prevented free agency , and one of the first cases heard and decided by the Warren Court .

Since it presumed that Congress 's failure to act in the years since Federal Baseball Club was an implicit expression of intent to keep baseball exempt from the Sherman Antitrust Act , it has been read as having done more to create that exemption than the older case. Two justices (Stanley Forman Reed and Harold Hitz Burton ) dissented from the short, unsigned _per curiam _ majority opinion , arguing MLB and its revenue sources had changed enough since 1922 that the logic of that case no longer applied. In 1972, a third justice (William O. Douglas ) would express his regret at having joined the majority when Toolson was again upheld in the similar _Flood v. Kuhn _.

Background

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George Earl Toolson was a pitcher with the Newark Bears in 1949, a farm team for the New York Yankees in the AAA -class International League . He believed he was good enough to play in the major leagues, if not for the Yankees then for another team. But due to the reserve clause in his and every other player's contract, under which teams reserved rights to a player for a year after the contract expired, he was effectively bound to the talent-rich Yankees and could not negotiate a new contract with another team.

When the Newark franchise was dissolved prior to the 1950 season, he was demoted by the Yankees' organization to the Binghamton Triplets , an A-class team within its minor league system. He refused to report and instead filed suit, arguing the reserve clause was a restraint of trade and that baseball should not be exempt from antitrust laws.

Baseball antitrust exemption

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In 1922, in an opinion by Justice Oliver Wendell Holmes Jr. , a unanimous court held in Federal Baseball Club that professional baseball did not meet the definition of interstate commerce under the Constitution and the Sherman Act because, although teams traveled between states from game to game, that travel was "incidental" to the business and not an essential aspect, since all the revenue was generated from the actual games.

By the time Toolson filed his suit, baseball had grown greatly in popularity and as such had changed. Improved roads and public transportation meant that fans in some areas crossed state lines to attend games, and radio and television broadcasts, from which the teams derived substantial revenue, brought those games to the fans who did not leave home. The interstate aspects of the professional game had greatly increased.

In 1947, Commissioner of Baseball Happy Chandler was sued by former New York Giants outfielder Danny Gardella , who argued that the five-year ban Chandler imposed on players who, like Gardella, had jumped briefly to the rival Mexican League was an unfair use of monopoly power and that the Federal Baseball Club decision no longer applied. A preliminary ruling in favor of the baseball commissioner was reversed by the Second Circuit Court of Appeals , returning the case to the lower court for trial. In 1949, Chandler settled with Gardella for a reported $65,000. Gardella initially sought $300,000, settling for less on his lawyers' advice he would lose on appeal to the Supreme Court.

In 1951, Representative Emanuel Celler , an advocate for strong antitrust enforcement, chaired a special Judiciary Committee subcommittee on monopoly power , which had looked into baseball, among other things. Celler entered the hearings believing that MLB needed laws to support the reserve clause. Star players, such as Lou Boudreau and Pee Wee Reese , indicated their support of the reserve clause . Minor league veteran Ross Horning testified about his experiences in baseball, which he said were more common for rank-and-file players. Cy Block , who appeared briefly in the major leagues, testified about his experiences and how the reserve clause prevented him from getting an extended trial in the major leagues. Celler's final report suggested that the Congress should take no action, allowing for the matter to be settled in the federal judiciary of the United States .

Trial and appeal

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Both the district court in Los Angeles and the Ninth Circuit relied on Federal Baseball Club in ruling for the defendants. The Supreme Court granted _certiorari _ to hear it and consider a number of other cases by former Mexican League players pending at the appellate level.

Among the lawyers working on the case for baseball was Bowie Kuhn , then of the prestigious firm Willkie Farr & Gallagher , who would later himself become baseball commissioner and the respondent in _Flood v. Kuhn _, the next case to challenge the reserve clause. When the case reached the Supreme Court, the Boston Red Sox filed an _amicus curiae _ brief in support of the Yankees, their bitter rival . Since the Second Circuit , in reinstating Gardella's challenge, had called Federal Baseball "an impotent zombie" in light of recent Supreme Court antitrust decisions,

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