Respondents Brief — Flood v. Kuhn

Supreme Court brief1972

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Text

Supreme Court, U.S.

FILED

31 i972. :

aires

& ROBERT SEAVER, CLERK

FILE COPrY

—

IN THE

r Supreme. Gaurt of the Uri

OCTOBER TERM, 1971

No. 71-32

Curtis C. Foon, a

in “= - Petitioner,

v. ‘ . - ey ra) .

Bowre K. Kuun, et al., ;

Respondents.

—3—

. BRIEF FOR RESPONDENTS

Mark F. Hughes

Louis L. Hoynes, Jr.

* Wittkie Farr & GALLAGHER

. 1 Chase Manhattan Plaza

f New York, New York 10005 —

Baker, Hostetter & Parte RSON

1956 Union Commerce Building

Cleveland, Ohio 44115:

Of Counsel — |

_ Arvorp & PortER

> 1299 Nineteenth’ Street, N.W.

Washington, D. €. 20036 7

Of Counsel”

- Robert J. Kheel

Alexander’ H. Hadden

James P. Garner ,

Warren Daane

Attorneys for all

Respondents .,

exeept Bowie K. Kuhn,

Commissioner of

Baseball

Paul A. Porter

‘Jerome I. Chapman

| Douglas G. saben

Aitorsees for:

Respondent

Bowié K. Kuhn,

- Commtsstoner of

Baseball

TABLE OF CONTENTS

| | PAGE

a table of f Citations ae biggies hecelleifias eeu ge itt

Opiniéns Below . sayeet atteenecenennasesecctenennersseeessnrcenedes sont ote 2

( Questions Presented ee hiadnantecs - — Sean eearatnees 1

Constitutional and Statutory Provi isions. Tay ed .. ‘9

Statenient of the Case .. aa rE ee 2

The Parties and Proceedings 15 X<) (0) \ ge 3

Factual. Background sri yeea ee thnescee oe oe aaecee meee at 5)

1. The Resérve System and the Historical; Com,

petitive and Economic Realities .of Profes-

sional Baseball 222. ceceeeeseeceeeg eee : H)

_a, The Need to Maintain Balanced Competi _

LC) a a ee, 6

D. Preservation: of Integrity and Public Con- —

I (5), - ene en a 8

. ec. High Costs of Play er Bev lopment poe ea

d. Benefits of Eeonomi¢ Stability 2000. 10

e. Equivalent Practices in Other Professional

League Sports ........: Se a ee 13.

2, The Reserve System and Collective Bargain- °

A a cc 15

Summary of Argument, ee ee ee en |

_. Argument , 23

I. Sound Reasnns? Support Adherence To The >

Longy Unbroken Line Of Precedent In This

Court Holding That Baseball’s Reserve Sys- *

tem Is Not Subject To The nena Antitrust

Laws g Se Le ee ee 23

, PAGE -

A. Phis Court, While Consistently Reaffirm. |

ing the Nonapplicability of. the’ Federal

Antitrust Laws to Baseball’s Reserve

System, Has Carefully Eliminated Any .

Possjble Adverse Consequences of | This -

Long-Standing Precedent -..........2-.2ccceceeeee.

B. The Record in This Case Demonstrates |

Affirmative Grounds for Continued Adher-

ee AS a a er a 30

(1) Baseball’ s Continuing Reliance on n this -

Court’s Prior Decisions sdqueessieoeate fascas 30.

(2) The Role of Congress ....... esse "atest 39

" (3) The Role of Collective Bargaining sas 38

C. Petitioner Has Shown No Justifications |

Which Overcome the Weighty Considera-

~ tions in Favor of Adherence to the Toolson

PYOCCCUCWE 25.2 ae 39

II. Federal Labor Poliey Exempts The Reserve ©

'. Systém.From The Operation Of The Federal

Antitrust EWE scicnesnee peiersupbedeateseassetics sseasedouseienin> 4

) TIL Baseball’s Reserve System Is Not Subject To

State Antitrust’ Re ‘gulation eeertannteestlepecanaricanas 33

Conclusion srasteestvinpanctantnsnemegps cites cesslessctisolsspscsstsstestemmerto 60

Addendum A Fa vt En EO asecreneeees Ad

_ Addendum B ......... hous tuiingsnetsenLenteennante sstionen eee aren _ BA

SA Na RY Aman, é

“Table of Cases: "PAGE

Amalgamated M eqt Cutters v. J ewel Tea Co., 381 U. S.

676 (1965) : : 21, 48- 2. -

American League and Association ‘of U ires, 180- :

NLRB 190 (1969) -......:..: 55

Blypder-T ongue Laboratories, Inc. v. University of ae

Illinois Foundation, 402 U. S. 013 (1971) 2.2... ee 42

Boys Markets, Inc. y. Retail. Clerks Union, Local 770, a

US a5 (|) i a ann ar ena 49

California v. Zook, 336 U.S. 725 1949)" ee tig een 57

Canada ‘Packers; Ltd. v. A. PASE R. Co., 385 US. 7

TJ 6) na a nee tee ne ieee an 41

Carroll v. American Federation of Musicians, 372 F.2d"

155 (2d Cir. 1967), aff’d in part and rev'd in part, oe

. on other grounds, 391 U.S. 99 (1968) ... 51

City of Atlanta and Fulton County Recreation Au-

.thority v. Atlanta Braves, Inc., Case No. B-17638, ° -

Atlanta, Ga., Sup. Ct., Feb. 8, 1966 ee: v---+ OO, D6

Clune v. Publishers’ Ass’n of New York City, 214 F:

. Supp. 520 (S.D.N.Y. 1963), aff'd, 314 F.2d 343 (2d

Cir, 1963): ococeeeeceesessesleceeseeseesesesereseccesecepesresnesnenesneescenes wea * 02

Colorado Anti-Discrimination Comm’n v. "Continental

Airlines, Inc. 372 U.S. 14 (1963)! eee cecceeeceseeneeee 56

Corbett v. Chandler, | 346 U.S. 356 (1953) ereeeeeseneeneestne 26

Edward Katzinger Co. v. Chicago Metallic Manisfac- :

turing Co., 329 U.S. 394 (1947) 43

Federal Baseball Club of Baltimore v. National _

name, 259 U.S. 200 (1922) oe 20, 23-28, 30, ,

| . 32, 33,57

Federal Baseball Club of Bultimére’ v. National -

Teague, 269 Fed. 681 ee Cir. 1921) ncneeeeveoeeinne 2h

Y vy

. | PAGE

- Fib breboard Paper Brodurts Corp. v. NLRB?379 US..

3 (1964) aD Se NE re ‘"

Flood y. Kuhn, 43 F.2d 264 (2d Cir. oe woeeeeeeeee 1,5; 54,

Flood ve Kuh 316 F.Supp. 271 (S. D. N.Y. 1970) a 1,56,

| | _ ~ 12, 15, 15, 19,: ahah

43, 44, 45, 54, 55

; 7, 38

Klood ve. Kuhn, 312 F.Supp. 404 (S:D. x. Y. 1970) _ 99

— Flood vy. Kuhn. 309 F.Supp. i (S.D.N.Y. 1970) 0 1,40

44, 46,50

Gardella v. Chandler, 172 F.2d 402 (2d Cir. 1949) .... 95

. Hart vy. Bt F. Keith Vandeville Exch., 262 US.271 *

(1923) seceeceeet bees cecsssewsacscwesssesmssessesecnnasoncqerseselcscesssces--ca- ees. 5

Head v. New Mexico Board, 374 U. s. 424 (1963)... T

"-Helvering v. Griffiths, 318 U.S. 371 (1943)... a ae

Telvering . Hallock, 309 U.S. 106 (1940) 42. “oceans OF

— Joint Industry Board v- Unitegl States, 391 US. 294

(1967) 01... aan een ET en tA tr Sat eee See . 4.

”. Kowalski ¥. Chanter, 346 Uis , 306 (i983

MacGregor v. Westinghouse Electric:.& Manufactr.

ing Co., 329 .U. 8.402 (1947) ........ ana Seetoetis Bo

Missouri v. Ross; 999 U.S. 72 (1936) 0002... a |

Moragne vy, States Marine Lines, Inc., 398 U.S. 375

- (1970) ce dddedidduapersnedieesbesdresednceeveadess¥asesce=de gavceedevssassqsaseuenne 39, 42

. Portland Baseball: Club, des, vy. Frick (Baltimore Base- :

bull Club, Inc.), 282 °F. 2d 680° (9th Cir. 1960) ..... 2

Portland Baseball Club, Inc. v. Kuhn, Civil Nos. 71-53, .

+ Z)- d+ D.C. Ore., December 28, 1971 | sesresecerssesesense’, OB

Radovich v. National Football League, 959 U. S. 445

(DOT) csc cerns Lesvenseseeees 23, 24, 27-30, 32,83, 40, 41,55 |

Salerno v. American League, 429 F.9d 1003 (2d

) reine =

“Léar, Ine. v. Adkins. 295 U.S. 633 (1969)... ers 42-43

Cir. 1970), cert. denied, 400 U. S. 1001. (1971) .. castes 8 |

Sola Electric Co. v. . Jefferson Electric Co., 4» BIT a S,

173.°(1942) ear? eee eae ae -

Wisconsin v. Milcaukee Braves, Tne., 31: ‘Wis. , 699,

144 N. W.. 2d 1 (1966), cert. denied, “385 — . 990

(49GB) eect leceseessesssssssssesefssesssseserceseetuergep DD, BT, 33, 57, 5S

Wisconsin ve Mili dithee Beare es, Inte., 1966 cc H “Trade

Cas, & 71,738 (Wis. Cir. Ut, Civil Div., Mil, Cty.,

19) svete jpotstneepatgnesrseetnnstsinereestputesreclape [6

Table of Other Citations:

National Labor Re lations Act, 49 Stat. 449 (1935); 29

LUA OA) 5) nee a boreesvienecesd 47,52 |

Norris-LaGuardia Act, 47 Stat. 70 (1932, 29 UBC.

Sa Ae ee eeenin. hae 47

Sports: Broi Weastin iw Nets 75 Stat. (32 (1961), 1B

US.G. §$1291-1295.; 80 Stat. 1515, (1966), 15 U.S.C.

$1291 ake (hewu ae eueewseas2oepedvcaveeusseceseceardcseurncavenueccaties ss 30; 37.

Labor- Management - Relation Act, 6 Stat. 136

(1947), OPUS CED ccttpeco en tatae, Ae

a ae ; ° J

‘ > * | PAGE. '

~ Southern Pacific Co, v. Ariz cond, "825. U. S, “761: |

(1945) ------ eRe oe ea en eT aren. 5 4, 55, 59

. Teamsters Union v. Oliver 358 S. 283 (1959) .. ame a1, 48

Toolson v. New York Yankees, Inc., 346 U. S. 3356 .

CS) en or ne Re 5,20, 23, 25-34, 37-44, 57, 58

United Wine Workers v. Ponmington, 381 U. S. 657

Se, 05) nen ne nn See eee ee Se 50, 51

Cnited States v. Ingdenatignat Boxing Club, 348 U. |

236 (L9G) oeecccececeeceeceeseseesecvoeseeseceeeeesneseesesee beceseeeeteeee, "93 27

V vnited States x. National Football League, 196 F.

Supp. 445 (E.D. Pa. 1961) cee eect eee. veces 36

United States.‘v. National Football. ie lai 116 |

F. Supp. 319 (E.D. Pa: 1953) sastseesscyencedsenvte fereneese-peets 36

United States v. Shubert, 348 U. Ss. 999 (2965) ... 23, 26, 32,

. 41,58:

United ‘States Y South Buffalo Ry. Co., 333 Uv. S. ma .

7) ea me, ee 41

United States v. Wonen’s Sportswear Mfrs Ass'n, _

do U, S. 460 *(1949) ieeaeieesheersrererdinseesseeietes | ieee ae i) |

| Walling v. Halliturton Con 331 U.S.17 (1947) AD

; Supe Court af the fe Mnta States

OCTOBER TERM, 1971,

No: 71.32

Curtis. C. Fuoop, | «

, Petitioner, \

0. °

Bowie K. Kuuy, et: al., ees

os Respondents.

BRIEF FOR RESPONDENTS

Opinions Below © *

The opinion of the United States District Couré for the

- Southern-District of New York (App. 95- 122) is reported at

316 F. Supp. 271. The opinion of. the Court of Appeals for ~

Phe Second Circuit (App. 125-141) is reported at 443 F.2d *

. 264. Interlocutory opinions of: the District Court. with.

respect to Petitione ys s. application for a temporary i injunc-

_ tion (App. 54-82)/and Respondents’ motions to dismiss

(App. 83-94) are reported at 309 F. ‘Supp. 793 and 312 F.

= - Sapp. 4 404, caer :

2 3 fod Questions Presented - Pid Me Bone

| Should this Court abandon ‘its long,’ sehen: line

. of decisions holdin'ethat: baseball’s. reserve system is not :

‘subject to the federal antitrust laws; when the record in*-

‘this wits _and the history of Congressional consideration

-*.

“

ON a

oo,

Maya

” of baseball both prov ide Seiealag ator for acl,

f adher ence to such precedents f |

fs “~~. a

} . *»

2. Doos federal labor policy, preclude appli¢ation of the

antitrust laws to baseball’s reserve system, a mnandatory

‘ subject ‘of bar gaining which has been dealt .with in‘a vol

lectiv e, bargaining. agreenient and has been under thorough

and active consideration ‘i ‘In negotiations between the. major

league baseball élubs and the Major ais Baseball Play.

ers Association? oe a Fs . F

- 3. Should the’ nationwide framework’ of baseball be”

vs, made subject td regulation under the antitrust laws of the

various states, when such regulation by. its inherent lack ~

-” of uniformity ‘w ould unduty interfere with baseball’s inter:

staté operations’ and would be inconsistent with the federal

“policy of continued. ‘self. regulation, subject: to the will of

Congrege! “rise BY

°. ov. * oF 3

‘ . . “3

“Constitutional ‘and Ristulery

Provisions Involved —

» The pertine nt. provision of the® ‘Sherman Act (15 US.C.

. 61): and excerpts from various state antitrust statutes are

“ set. forth in Appendix A to Petitioner’s brief. Also: involved.

y, :

are Article T, Seetiori 8. and Article VI, ‘Clause 2 of the

-“TTnited States Constitution whieli are set forth i in Adden*

* dun A, annexed hereto. : — =

U Bo Tp ye .

‘Statement of the Case

. j}

—~ |

oda

This « case lavelvea, a dispute over professional haseball’s

reserve. system, ‘which is the cornerstone of the game's

league structure and competitive ‘stability, and’ a cenfral

element..in the ‘employer-emplovee relationship between

eluhs and: players. The reserve system is embodied 1 in-sev-

; eral provisions of baseball’s Uniform Player s- Contract and

m= ae

the Major League Rules and ineludes-various safeguards .

; for the players as well as for the ¢elubs.* . In essence, the

_ purpose and effect of these provisions are to enhance com-

‘ petition on the field and preserve the integrity of/play by

- promoting continuity in the employment relationship be--*-

tween each of the 24 major league clubs and its 40 “reserved” |

" players.

_ The Parties and Proceedings Below

"This action, financed entirely by the Major League Base-

_ ball Players Association, the players’ collective bargaining

represéntative (App. 169; R. 112-13, 115), was brought, ©

in the name of Curtis Flood, who, until he departed ‘from

baseball in April 1971 for reasons unrelated to this case,

had. heen’ a” highly ~ paid» major league player.** In

. October 1969, Mr. Flood’s: contract avas assigned by the St.

Louis Cardinals to the [Philadelphia Phillies, but he refused

_tohonér the assignment. After some meetings with Players

“Association leaders, who were then in the midst'of negotia-

tions with .the clubs regarding. the reserve system and

other employment, matters (App, 167-68; R. 62. 109-10),

Mr. Flood.asked the Commissioner of Baseba on December .

34. 1969, to advise all the major league clyds that-he was: .

_ * The pertinent provisions are set out in Addendum B to this brief.

** Mr. Flood began his profession&l baseball career.in 1956 under

- contract with.the Cincinnati Reds, at a salary of $4,000. When his |

contract was assigned to the St. Louis Cardinals‘in 1958, he was given

an opportunity to play. regularly.and his salary with’ the Cardinals

- Steadily increased from’$Z,000 to $90,000.in 1969. Mr. Flood refused.

_ fo plav during the 1970 season at the $100,000 salary .offered by the

Philadelphia club, despite Respondents’ offer that he could plav with-

out prejudice to this action. (App. 143, 145; R. 122-23, 372-73).

After the 1970 season, the Philadelphia club assigned the right. to Mr. .

Flood’s contract to the Washington Senators, with whom Mr, Flood

‘igned a contract to play during the 1971 season for $110.000. By

agreement among the parties, this was without prejudice to ‘Petitioner's

rights-in this action. On April 27, 1971, Mr. Flood left the Wash-

ington club for personal reasons and has_not ‘played since thtat date.

free to negotiate with any of them. (PI. Ex. 4; R.72 .). The

Commissioner responded that he could not grant the request :;

“because Mr. Flood's contract had been propertly assigned

in accordance with its provisions and because existing base-

ball rules prohibited his negotiating with other than the

assignee elab. (PI. Ex. 5: R. 73.)- Thereafter this action

was commenced on January 16, 1970, and Mr. Flood de.

clined the Commissioner’s’ invitation to discuss the matter

further. (R. 136-37.)

The defendants named in the. dortiplaint, are Bowie K.-

Kuhn, individually and as Commissioner of Baseball,’

Charles S. Feeney, individually and as President of the

National League, Joseph E. Cronin, individually and -as -

President of the American League, and the twenty-four

-elubs which. then comprised the membership of: the two .

major leagues.

The principal claims in the complaint are that the Te-

serve system violates | federal and: various state antitrust:

laws.** Petitioner’s ‘brief (pp. 16- 17, 45) asserts that the

reserve system is a pes se violation of those laws, and Mr.

Flood himself testified at trial that he “would like the whole.

' system to bé struck down and eclar ed illegal” (R. 118).. All

of the other witnesses presented at trial hy Petitioner, how.

ever, assumed that the continuation of a. reserve, system

was necessary. Their testimony fdeused ‘on general player

grievances regarding the present system and various modi-

* The Commissioner of Baseball is joined asa defendant i in only

the first alleged cause of action, the federal antitrust claim. Separate

counsel for the Commissioner therefore join in those portions of

‘this brief *which deal with that claim.. The Commissioner has an _

administrative and quasi-judicial role in baseball that, requires him to

investigate atid take such action as will preserve the integrity of the

game and further the. interests of players, clubs: and fans. _—

League Agreement, Art. I (PI. Ex. 6, pp. 501-02).

pie Originally Petitioner claimed, as well: violations es anti-peonage :.

statutes and the Thirteenth Amendment. Those’ claims, rejected by

the District Court, were not asserted on appeal to ie Second Circuit

and are not asserted here. ‘

. . e .

. . o* : .

- fications of the system suggested by the Players Associa-

tion, most of which had no direct bearing on Mr. Flood or

his complaint. . . ie

After a three week trial on the merits; the District Court

dismissed tht complaint. 316 F. Supp. 271 (App. 95-122).

* The federal ‘antitrust claim was dismissed on the authority.

of Toolsén v. New ¥ ork Yankees, Inc., 346 U.S. 356 (1953) :

and the state law claims were rejected becatise state anti-

trust regulation would conflict with federal policy and be-

cause “uniformity [is required] in any regulation of base-

ball and its reserve system.” 316 F. Supp. at 280 (App.

" 111). In its opinion the, District Court set forth such find-

- ings of fact as were appropriate to its. determinations.

The C ourt of Appeals for the Second Circuit unanimously

affirmed the District Court's decision. 443 F.2d°264 (App.

125-41). | |

: - : . - c

"Factual Background

To evaluate propérly the issues here involved it is

essential to consider (1) the historical, economic and com-

petitive realities which make the reserve system a neces-

city and (2) the role of collective bargaining in professional

baseball as it relates to the reserve system and to the com- ,

mencement of the present lawsuit. _

~ (1) The Reserve System and The Historical,

Competitive and Economic Realities = Pro- -

fessional Baseball. ;

As the District: Court found, the reserve system, we is

“perhaps the cornerstone of the present structure” of base-

ball; “has been in force for nearly one hundred.years, almost *

_ the entire history: of organized professional basehall.” 316

P. Supp. at 273 (App. 98- 99). . The-historical evidence pre-.

sented at trial concerning the experiences - professional. _

: . °

g . s

.- each competitor has a ‘strong incentive to-strive to attain

” 6

~ basehall prior to the adoption of*an effective reserve system 7

showed “that chaotic conditions prevailed.” (App. 243-48.

Pl. Ex. 15-a, p. 229.) ‘In those early days, players freely.

“revolved” among clubs, balanced competition was impos.

sible to achieve, clubs failed—often in midseason—disrupt.

ing - league play, and-the game found little public acceptance, .

As a product of that climate, gambling and dishonesty were

commonplace and “hippodroming” —which involved the fix. |

ing of games—hecame a practice. Player salaries were.

low and the failure of clubs often meant that salaries were

never paid. The turning point in baseball’s history ‘came

-with the realization that a reserve system assuring player

continuity was necessary. (App. 243-48, 253: R. 868.) |

The District Court observed that. with the sole exception —

of Mr. Flood, all Petitioner's, witnesses acknowledged that

a-reservé svstem “is. a necessary element of the organiza-

tion of baseball as‘a league sport... ..” 316 F. Supp. at 275 ff

(App. 101). (E.g., testimony of Jackie Robinson, -App. 172: |

_ Hank Greenberg, R. 247; and Bill Veeck, App. 384-85.) ° Re-

- spondents’ witnesses, the Commissioner of. Baseball, the

_ Presidents of the American and National Leagues, club

officials, former players, and, John Clark, an economist and

management consultant, fiom Arthur D. Little, Ine, all:

testified as to the critical importance of the reserve sy stem:

to basehall’s existence: (F.7., App. 243-48, 280-89, 337-40.)

- Accordingly, the District Court found that “the prepon-

derance of credible proof does not favor elimination of

the’ reserve clause.” 316 F. Supp. at 276. (App. 103). An

analvsis of the rationale of the reserve ‘svstem ‘fully sup-

ars this eonelusion _

-(a) The Need. to Maintain ‘Balanced Competition.

It is ‘commonly recognized that professional haschall

* cannot fanction like the usual commercial enterprise, where .

a greater market share, and, if possible, put the others ont

ee eo : —t oy ia

aoe ee .

Rag te . °

7 7 | ee

of business. On the contrary, the interests of the players

"and the clubs in baseball require that the strength of the

teams in the leagues be reasonably evenly balanced. Thus —

there is a blend of competition and partnership among the

dubs in hasehafl. which would be both innecessary and im-

proper in the normal business world. (E.g., App. 337-40;

399.) os * ae .

The record shows that, without the balance provided by

- the reserve: systein, fhe elubs with greater financial re-

sources would attract the most outstanding players. (E.g.,

App. 280, 337: R: 1280-81.) The early history of the game

—before the adoption of a reserye system—prevides us

- with clear evidence of such results. Without the stability

afforded- by the reserve system, successful’ and reasonably

balanced ‘league play was impossible to maintain. (App. '

243-48.) [ -.. ef ees oo

' Today, the forces that would create imbalance are at -

least'as powerful as ir those early days. The ability to.

_ compete for players varies widely from club to elub. “In

1969, for example, according to a study prepared by Arthur

Andersen & Co.,* 13 of the 24 major league clubs suffered

losses, some of them very substantial. The profitability of

the other clubs varied widely, with the clubs in the. larger

cities haying a. continuing advantage ‘in. terms of ‘revenue

-Potential.** Accentuating this disparity in operating rev-

enues, there are also great differences in. the financial:

Tesources otherwise available to the | various clubs. -

(R. 715-16, 1469-70.) os : |

* Pl. Ex. 7, the Arthur Andersen study, is an exhibit submitted by

_ Respondents in response ‘to Petitioner’s. pretrjal discovery requests

and received by the District Court under seal for the use of court and

counsel only. Such-exhibit provides profit and loss data for:the in- °

. dividual clubs and for the aggregate of all clubs for each of the years

* 1965-69. “Reference is miade to ‘such exhibit for the financial details.

teferred to herein. te

_** The aggregate ‘results for all 24: clubs in 1969 showed total

losses in the millions. (PL Ex. 7.)-°: ar

| : 8°

- Francis Dale, tlie President of the -Cincinnati old testi.

fied that hjs club could not engage in open competition for

play ers with clubs located in the larger cities. “[In such

a system the’ poorer or weaker franchises would: -not be

able to compete for the better players and therefore: hase.

ball would be destroyed. . ..” (R. 1280-81:) — Other club’

and league officials and the Avthie D. Little economist testi-

fied to the same, &ffect. (E.g., App. 280-81, 337, 342. 43; R.

880; 1383, 1474.) - ; |

There is no way, without a reserve system, to prevent

baseball’s inherent gross disparities in income and re.

“sources from being translated into even wider disparities

in team strength. The 1952 House Comnittee Report on

Organized Baseball—an’ exhaustive study of the game an/ _

its lustory—put it quite plainly: “[F ]xperience points to

no feasible substitite to . . guarantee a comparatiy ely even”

struggle.” House Revert No. 2002, 82d Cong., 2d Sess.

(1952), p. 229 (Pl. Ex. 15-a).* bg

(b) Preservation of Integrity and Public Confidence.

Without public confidence in its integrity, baseball woul!

certainly fail. The Commissioner of ‘Baseball, whose prin-

..cipal task it 8 to protect the integrity of the game, testified

at length at trial concerning the relationship between the

reserve system and integrity. : (App. 253-54.) The uncon-

tradicted history reviewed by him shows that in, the era be- .

fore the reserve system an unhealthy climate oe:

which resulted in rampant dishonesty and public disres

‘for the game. (App. 243-45.) This éarly history: is strong >

* Nevertheless, Petitioner argues that baseball’s. reserve syster has

not worked, pointing to the fact that “four teams have ‘won 63%

of the league championships. in the last half century,” as contrasted

to the 25% which four teams would. win in a perfectly balanced 16

team structure. ( Pet.” Br., p. 44.) »-What-Petitioner Bald erp is that

“no. system can provide perfectly balanced’ competition, &nd, that the

reserve system has provided to the public continuously. stimulating

competition to.a degree that would have been impossible without it

(App. a: ;

(eee

ALLE A PLO sae

ailenes that an effediiy e reserv e system is necessary to the

’ maintenance of integrity, (App: 253-54. )

Integrity and public confidence are the product of numer- -

’ ous factors, including stable league organization, prosper-.

ity for the players, and rules enforced by the Commissioner

prohibiting practices which would jeopardize: the game’s -

integrity. At the root ‘ofall of these factors is the reserve

~ system, with the-stability and continuity which it ensures.

To. eliminate’ the reserve system would be to place jn ©

jeopardy the goodwill and public ‘confidence which baseball |

has earned over the decades. As the 1952 House Committee ©

sdid about the reserve system in its Report on Organized

Baseball : “| E]xperience points to no feasible substitute to :

. protect the integrity of the game. . . .” House Report. No.

2002, S2d Cong, : 2d d Sess. (1952), p. 229. -(Pl. Ex. 15- )

, (e) High Costs of F Player Development.

. Witnesses for both parties to the present dispute recog-

nized that ‘the employment continuity provided ‘by. the

reserve system is necessary to protect, and provide incen-

+ tive for, the,clubs’ extraordinarily high sates development.

costs. (E.g., R. 247, 718-20, 1245-46.) . 3 ;

Unlike other professional sports. odie: can . select nation-

ally. known star players from college campuses where they ©

have received extensive training, experience and publicity,*

"baseball must develop its own talent at great expense and

- effort (R, 938-39). According to the report prepared by

Arthur D: Little. the plaver dev elopment costs and related

“expenses of minor league operations borne. by the major .

. leagues for the period 1963-67 totalled $118,000,000 —

Feeney Ex7S, App. 482.) ‘ .

* & ommigsioner Rozelle of the National Football League anit Com-

missioner Kennedy of the National Basketball Association both testi-

fied that the’ colleges provided the training grounds for their sports

and President Campbell of the National Hockey Teague said much .

the same about Canada’s: amateur hockey program. ( tay 229, 238-

39; R. 485-86.)

‘

’

- ‘This expenditure represents an average of $23,000,000

-each year (almost $1,000,000 for each club), or 25% .of the

clubs’ operating revenues. Stated otherwise, during that

period the clubs spent $316,000 for each player brought up

to fill vacancies on major league rosters. (Def. Feeney Ex. *

S, App. 482.) These expenditures support and make

possible a large minor league system of over 190 clubs in

21 leagues, a system of player develdpment peculiar to base.

ball which affords entertainment to. twelve million fans

annually. (Def. Feeney Ex. H; R: 994-95, 1106. )

These costs of player dev Sccaneatt give baseball clubs 4

greater stake in the control of their rosters than clubs in

any other professional Sport. ‘Che incentive to continue such —

expensive development is dependent upon the continuation

of an effective reserve system to alba baseball’s 1 invest-

ments. |

(a) Benefits hoon Economic: Stability.

‘the stability engendered by the reserve ‘system has per: :;

' mitted most baseball clubs over the years to achieve a mea-

sure of economic ‘viability not possible before the reserve :

‘system was adopted. But such stability has not been a one-

way: street. The réserve system has also resulted in in-

ereased economic benefits to the players. Under the reserve

system, major league baseball has grown to a nationwide

_ structure of twenty-four clubs employing some six hundred ,

players. (App. 2494.. For. all of these pare, the eco-

nomic rewards: are impressive.

In 1970, the average major league player’s basic salary

_ Was over $28,000, exclusive,of bonuses, various cash allow-

-« gnees and other fringe benefits (R. 1659). Under the re

serve system, each player négotiates salary adjustments -

with his club annually.* The Arthur D. Little report showed

that, for all play ers on major league rosters at least.60 days

eath year between 1965 j.and 1970, the average aggregate

-salary increase during the period was 129. ae (Def. Feeney

Ex. S, App. 473.) — <2, + , ee

In addition, - through collective bargaining , players have

‘received substantial increases in fringe benefits. (See pp.

15-17, infra.) The clubs’ contribution’ to the players

Benefit Plan, for example, totalled $5,450,000 in 1969, an‘.

increase of $2,850,000 over the contribution in 1965. (Def.

Feeney: Ex. 8, App. 480; Apy. 493.) As a result, baseball

offers its play ers a‘health care and pension program which_

_ is as‘fine as any in the nation.** For example, Mr. Flood,

or‘any other player with twelve vears of experience,%is

now entitled to a pension at age 65 of $1.625 per_month

‘or almost $20,000 per year. (Def: Feeney, OX. M: Ro 1695.) >

Additionally, the 1970. collective - hargaining agreement be-

tween the Plavers’ Association agid the elubs resulted in

gains for the plavers ageregating approximately £4,000,000

over three vears, exclusive of ee health, eare bene- *

fits. (Aepp. 329.)

' Overall, for 1965-69, the' aggregate. amounts paid - in,

player salaries end benefits increased sharply, vising by.

approximately 50% during the period. (Pl. Ex.- 7.)***

‘During this same’ period, there was a steady decline i in the

* The players’ collectiye bargaining representative. the Plavers |

Association. in recognition of the desirability of individual salary

negotiation in’ baseball, has relingttished anv role in this area except

for the establishment -of minimtim salary lev els. c Det, roeey Ex.

“NX, App: 422, 445.)

. ™* The plan provides retirement benefits which may be elected as

_ early as age 45, disability and, widows’ benefits, ife insurance and

accidental, death and dismemberment beriefits, health and dental care

benefits and an optional severance allowance. (Def. Feeney Ex. a

App. 480: Def. Feeney Ex. M: «App. 333-36, 493-95.)

iit Petitioner’ s brief (p. 44) asserts that plaver compensation: tes

declineil as a percentage of baseball revenues. Although there has -

a decline from the Percentages recorded for the first half, of

; ‘this century, the: players’ percentage of revenues has steadily gins,, :

vate he recent years. The decline frotn. percentages: found in an .

era is directly attributable to higher stadium and. other opera-. |

ting costs and the burden of subsidizing the minor leagues w hich the.

earlier

major leagues have assumed in recent years.

‘

| . ————

A ec 0 EE Ie aI gE DE NG at a

oy rn er

net operating inargin—eomputed on the basis of current

cash items and considering only baseball operating expense

‘—realized by the clubs, from 12.5% of gross revenues in

1965 to 3.7% in 1969, (Def. Feeney Ex. §, App. 485-86, :

‘Moreover, ona conventional accounting basis, the agg rem

* “financial résults for the twenty-four clubs shawed losses j

the millions. (Pl. Ex. 7. ): Considering these, haets, ip in con-

junction with the increasing share of rev enues, currently’

devoted to player compensation, Le Little report, voneluded

that M@seball is at a marginal le¥el in generating operating

revenue to pay operatingSexpenses. «Def. Feenéy Ex..§,

..' App: 486)

There simply is no evidence that the reserve system has

had an adverse impact on the players as a whole. Star

players, such as Mr. Flood, enjoy truq,star salaries and

even marginal players are extremely well compensated by.

‘any standards. ‘ ) ae

"The importance of the reservé ystem 3 baseball—all of

-baseball—eannot be ‘seriously challenged. . - But’ Petitioner,

~ despite the record at trial to the-eontrary, continues to ”

argue that the reserve system is principalty- an ‘instru.

“ment of : oppression employéd against the players.* Tle.

District Covfft provided a clear’ answer. to that argument:

“Prfor to: trial we gained the impression that there

was 4 view, held by many. that: haseball’s reserve

~ * Petitioner’s brief attempts to describe some alleged abuses. It

- asserts that @ club cannot release a player ev en if it wants to because -

other. clubs have claiming rights to*his contract. (Pet. Bri, p. %) °.

' But, as'a result of collective bargaining, the rile referred. to was

woe recently ‘changed to permit,a released: player to refuse any claim and

oe thus to choose-his own: ‘club. Petitioner’ § brief also says, that players

“may not be accompanied. in contract negotiations, by any attorner.

representative, ot translator.’ (Pet. Br,, p. A0.)* But Petitioner's,

counsel knows better. The 1970 collective: bargaining agfeement

contains a provision expressly recognizing the right of a -player to

be accompanied in salary negotiations by the representative of his

choice. (Def. ck Ex. x, ~~ 423; Ad 192- es

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system had occasioned rampant abuse and that it

shoul@ be abolished:. We were struck by. the fact,.

‘however, that the testimony at trial failed to support ™

_ that criticism; we find: no general: or widespread dis-

regard of the extremely important position the player

oecuples. Gee Supp. at 276 (App, ~-

: (e) ‘Equivalent Practices i in | Other Professional League , i ad

_ Sports. -

Petitioner’ Ss‘ brief st states that banchallis sivebenn. 3 is the most

restrictive ini prof fessional sports and. suggests that base-

ball’s antitrust status has enabled it to retain practices not

found in the other sports. (Pet. Br., p. 18.) But the evidence?

at-trial demonstrated that the rules of football, hockey and

basketball are essentially the equivalent of baseball’s rules.

Each sport drafts and reserves players, assigns or “trades”

player. contracts, prohibits “tampering” with rival players, 3

funetions under a Commissioner or President with powers

similar. to the Commissioner of Baseball, and operates with

“a system of league rtiles and a Pe as form of ~—

contract.

“Where there are differences, they are slight and more :

eosmetic than real. As to the most, significant -apparent

difference, the so-called football option rule, Mr. Miller, the

Baseball Players Association Executive Director, testified —

- thatthe rule was a “semi- fraudulent” rancor cid for ‘.

Teserve system.* (App. 378- 79.) |

> With respect to proféssional hockey the only Hoticeatte

difference is the procedure—recently ‘adopted as a result

*In professional football: a play er may announce at he beginning

-of a season that lé intends to be a- free agent at the end of that.’

‘ee

season. He then accepfs a 107° salary cut and is free at the en

the season to‘contract with a new-club which must cont pensate

former club as directed: by the Comntissioner.. The ev idérice at

indicatéd that as a result of this latter restriction very little plgver

mobility has resulted. (App. 213-15, 386.) Mea ee

ey E “*

a‘ ,i Pad ‘

@°-

Kee witness and the rules, and player. contracts. of each sport |

“ from the current colléctive bargaining process of profes-

— basketball: - In any event, Petitioner’s post-trial .

, ‘the National Basketball Association is also esseiitially fhe

-same.as baseballl’s. ‘Indeed, the NBA renewal option clause

‘ « .is written in language alinost identical to baseball’s. (Pl. ise

Exs. 16 and 17; App.:223-24.) -§§ = 9 = Oe

Since the. trial of this action, as part of i its ‘Son to :

persuade the basketball players Association to join in sup.

- porting before Congress thé merger of the two professional _

-basketball leagues, the NBA has’ apparently offered to mod- _

- ify its resegve system im the manner indicated by the letter .

_ attached to Petitioner's brief.as Appendix B: The circum-

stances ‘surrounding is offer; made in a collective bargain

ing context, are not known to Respondents and are ey

outside the record of this action.

.: Petitioner had adequate opportunity. to stiles the com- _ .

plete facts. as to the other professional sports at trial -when 3"

the Commissioner « of each sport was present as a plaintiff's - |

were pt into evidence. Dissatisfied with the. evidence so —

. adduced, Petitioner has turned his back on the record. and -

relied instead on newspaper accounts and material taken

“evidence” of proposed modifications in the basketball re- *j

serve system cannot obscure the basic similarity _ of the ;

systems employed by all professional league sports and only ,

‘serves to emphasize what Respondents have said from the} .

beginning—that collectivé bargaining can pyeiaes accom-/ .

modation ——* to all a. ae -

2) ‘The sannerern > System and Collective Bargaining. -

_- Professional, baseball players have an especially potiiat

collective bargaining —. As the District Court

found: oS *

: _ , “The Major League Baseball avin ‘hndoctation,

organized in 1954, has proved. a particularly effective

bargaining representative obtaining since 1966 high-

oo ly significant benefits for the: players in such areas

ee pensions, life and disability i insurance, health care,

~—Edinimum, salary, arbitration of grievances, expense

>. . JaHlewances, maximum permissible salary cut, term-

Pee ~~ ination pay, representation at individual salary: ne-:

sh gotiations, negotiation of rule changes affecting

player benefits or obligations, due process.in player. aye

iia ae ” 316 F. Supp.. at 283 (App. 116-17).

' Ever sitce 1966, when full scale collective bargaining came —

to baseball, the reserve system—recognized by all parties

‘as a mandatory subject of bargaining—has been among thie

_ subjects under negotiation between the clubs and the ”

acs Players Association. 316 F. Supp. at 283 (App.-117)..

In. 1967, as part of the ‘negotiations leading. up to the -

adoption in February 1968 of, the. first “Basic Agreement” :

_ between the Players ME NESS © and the clubs, the Associa-

tion included in its bargaining ‘agenda a general suggestion’

that the reserve clause should be altered (Def. Feeney Ex. ~

O, App. 453-54; App. 503-09.).: As modified in certain par-

' -ticulars,* the reserve system was incorporated into this

Basic. Agreement. (See pp. 45-47, infra.) es

. a 5

_* For example, the fenewal ‘option clause (Addendum B hereto) °

‘was amended to limit the salary: reduction permissible upon contract ©

. renewals thereunder to 20% of the player’s previous salary (Def.

Fétney Ex. F, p. 16); the minimum player salary was raised by over .

- 40%. (Def. Feeney, Ex. F,-p:.15), and.a formal procedure for.arbi-. ~

tration of player grievances was established (Def. Feeney. Ex. F, pp. -

3, 18-24), . Also, it was agreed that a joint labor-management study ,

“ of the reserve. system would be undertaken during the term of the

agreement. The joint study subsequently took place as a “free-wheel-

ing, in depth exploration” which both ates considered “aseful.”

7 (App. 366, 5 510-12; R. 1918-20.)

eee

“The Players Association presented the clubs with a:list of

“problems which stem from or are made more severe by the

present reserve clause and related rules.” (Def. Feeney -

negotiations began on a new: Basic Agreement. :

Ex. Q, App: 462.) “This list was carefully considered in

negotiations between the parties eventual accord ‘was.

reached with respect to substantially all of the “problems”

| Bargaining concerning the core of the reserve system as

_- well was conducted by the parties; however, the Players”

-’ Association did not make a specific proposal for.a change -

in the system until October 31, 1969.°* Shortly thereafter, _

* Among the various changes agreed to in the negotiations over

the 1970 Basic. Agreement. were the. followirig which are directly

related to “problems” ‘listed in the Players Association memorandum:

(a) -substantially increased‘ termination pay, including a provision

_ _. that after 1971 a player whose contract is terminated by the club

-after May -15 of any year will receive his full year’s salary (App.

_. _498,-500};—(b) specific acknowledgment of each player’s right to be

_ App. 422).

accompanied at salary ‘negotiations by a person of his choice (Def.

% -Feeney“Ex..N, App. 423; App. 518); (c) moving allowance pro-

vided for players whose ‘contracts are assigned durifig the off season

(Def. Feeney Ex. N, App. 421); (d)- prohibition against clubs

unilaterally changing rules which involve player benefits or impose

.” obligations on players (Def. Feeney Ex. N, App. 422); and (e) pro-

vision for third-party arbitration of grievances (Def. Feeney Ex. N,

_ ** The proposal was that, after every three years of his career,

each player may negotiate for a higher salary with any club, with

offered. <The clubs, after giving this opening proposal thorough

ee ee

_ his original club having a right of first refusal at the ‘highest. salary .

consideration at their regular winter meeting in December 1969, — :

found it unacceptable. (Def. Feeney Ex. R, App: 470-72; App.

519.) Following commencement of this action, this specific offer was

withdrawn by the Association, and various other suggested alterna- __

tives to the present reserve system were discussed. * (App. 404-05.)

Among these was the proposal that ‘the reserve system be made in-

applicable to a player after.age 65. This tongue-in-cheek p

: . roposal,

which’ Petitionef attempts to dignify in his brief (Pet. Br.,° p. 43), _

_- was neither sériously made nor received. (R. 1626-29.)

’

"iq November 1968, Sieruptiena were bald ble ind |

and the Players Association concerning the filing of the | i

_ ' . present suit, At a meeting of the Players Association Exee DE

°- tive Board in San Juan in mid-December 1969, at which oe

_ Mr. Flood was pre ent, the Association agreed to assume

. the financing of "this action’ (App. — ese’ complaint

\ _-was filed on January 16, 1970." , ES

ae egotiations with respect to. the reserve slaouae ong s

: with other important. employer-employee i issu s, continued *

. up te and briefly after the filing. of the action.. However, ©

ie ‘February 1970, the parties found themselves. frustrated .

by the litigation and therefore unable to bargain effectively .

--on the'-reserve system: - Accordingly, it was agreed that —

bargaining on ‘the reserve system ‘would be suspended - — 1

ee: Fy seins the final outcome of the action; and the new three-

bettas “year Basic Agreement*, pltimately entered into, contained

_ a specific ‘provision- to that. effect: (Def. Feeney: Ex. N, *

.App. 428; App. 368-69, 405-06.) . : : _&§

_ By the. commencement: ‘of this itieatiall; oe avis ag f

Association was able-to transfer this segment of its labor

relations | dispute - -with ‘the clubs to the’ federal .cO

~ “There ‘the’ collective: bargaining~issues-¢ ng —the

serve system: were extensively ventilated, j so that at times ~

_ the trial appeared to. be a labor meine. ee Ss

_ * In addition to the player benelits Setirvnd to at pp. 15-16, supra,

the new Basic Agreement iter alia: (a) liberalized contract pro- .

visions regarding participation in other sports (Def: Feeney Ex. N, .

App. 423; R. 269); (b) amended Paragraph 10(a) of the Uniform - — |

_ Player’s Contract to providé that\a player’s salary can be reduced by | *

no more than an aggregate of 30 percent in two successive seasons ag?

———.—_ Def Feeney Ex.N, App: 422; App. 500; -R:273-75); (c) increased : -

4 the players’ share of the rece “pts of divisional playoff and world series -_

games (Def. Feeney Ex._N, App. 418-19; App. 497-99) ;.(d) sub-

stantially increased spring training and miscellaneous in-seasog ex-

_ _ pense allowances (Def. Feeney Ex. N, App. 419-21; App. 499-500) ;

and (e) raised the minimum salary to $12,000 in ‘1970, $12,750 in

499), and $13,500 in 1972 (Def. “Feeney Ex. N, ae’ — Pein

LR ee pT GRO OE HP RONNIE RES emma

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principal witness, Mr. Miller, the Exédutive Direstor of ine Pe.

‘Players Association, put forth a number of possible modi- : at

_ fieations of the. reserve system which he indicated might be

: acceptable , to the As@ociation: © Respondents, in | turn, pres -

sented commentson each of these proposals, which resulted.

in ce changes. in the proposals tendered by the Asso-

ciation. | (E.g., R. 881-82, 1063-4, ime 2 N: |

2. i Miller also testified that he had told the clubs’ rep-

ncn sy the actién would be withdrawn if’ there —

-” were amen ents in the reserve system “acceptable to the -

. players as a group. ». (App. 369. ) This statement perfectly

: characterizes: the posture of the Players ‘AssociMtion and

. Petitioner. Impatient with the process of collective bargain-

ing, with vat cause to file.an unfair labor practice charge for

refusal to bargain,: and eager to obtain the assistance .of

_the federal courts’ to bend the clubs to their demands, the -

Players Association has Petitioner heré seeking to have, _— -

the federal courts act as arbitrator in the compulsory arbt-

tration of its labor dispute with t the clubs: | ae 4

‘The District Court was well aware of the federal labor “|

policy which sends the parties td the collective aeeeeeing. i gases

__—_*As-anexample of this ‘courtroom atvaieian,- Mr. Miller pro-—

_posed that the clubs adopt an arbitration procedure for settling indi-

4 vidual player. salary disputes (App: 189-90). When Respondents’

“ “witnesses: pointed out that-the availability of arbitration would inhibit © = _

‘.. realistic ‘negotiation between the player and his club—with each -side-———~——

being unwilling to make concessions which would impair os posture: =

fore the arbitrator—counsel for Petitioner responded by

that the arbitrator be limited to choosing either thé final ee of the.

player or that of the club (R. 1332). Whatever the merits of this

' proposal, it plainly belongs on the bargaining table, not in the court-—-—~ ~~

% room. Other possibilities suggested-at-triat by Mr, Miller and Peti-

-—tioner’s other witnesses included: automatic salar¥ - progression ar-

rangements, reduction: in the number of reserved players, aya

of the National and American Leagues, a limitation on reserve’ ri

to a fixed number of years for each player, and the adoption of Tonk

. term. —— —. — oe

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af" F L eae table to sick their own accon modation, ‘with the processes es.

" of the National Labor Relations. Board ‘being available to -

a insure fair play. Thus, the District Court. concluded that.

a - the issue of the reserve* system, concededly a mandatory

; subject of collective bargaining, should be resolved by

_ player-club ‘negotiation rather than bythe courts.. The

oe < - District Court, after reviewing all of the evidence, stated -

3 scp negotiation’ preserving its “necessary features” would.

“fashion the reserve clause so as to. satisfy all parties” ;.

. “these ‘issues x and should be resolved ladl negotiations

— é between the parties are.not irreconcilable and . - negotia-

tiqns could produce ‘an accommodation on the reserve sys-. .

+ 3 a oS . . tem’ which .would be eminently fair and equitable to all--

between the players and the club owners”; abun :

concerned:—in éssence, what is called for here is continuity ©

with change.” 316 F.Supp. at 276, 278, 282 (App: 103-04, .

408, 115).

ees ‘In an attempt to avoid the: controlling iidier: relations

: Matiifiennee of this dispute, Petitioner asserts: the-virtaa} =

Se bankruptcy of the ‘bargaining process in baséball,

P e ~ elubs have adamantly refused to negotiate on the reserve

after trial is quite tothe contrary. Far from finding the

|_____Assoeiatien-impotent and the clubs intransigent, the Dis-

. °- trict Court stated ‘that the Association was an “effective”

_ Tepresentative and that

bargaini - positive and reasonable men who are equally

a watchful over a common objective, the best interests of

baseball, ” are “best able to reach a satisfactory accord,”

2 ‘and “that all avenues toward: such an approach certainly

“» have not yet been fully exhansted. a3 316 F. Supp. at 284

: (App. 119-20). <oe eae )

. gain in good faith, the exclusive remedy would be to file an unfair

= labor —— charge with the National Labor ee Board.

aing that player bargaining power is weak and that the

_ system. (Pet. Br., p. 43.) But the District Conurt’s opinion — -

* ‘Even if Péiitioner were correct a “ clubs had failed to bar-- |

‘

‘tuvolved ‘i in collective —-

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| "Summary ‘of Argument i +

Petitioner asks this Court | shold the eontury-6ld hata :

mental operating arrang ents of baseball per se illegal _ :

-. under the Sherman Act, (1) in the face of decisions’ of this ae

ee. Court wunning in an ‘pobroker line for over 90. years that”

the internal structure ‘and rules of baseball. are not subject

to that Act, and (2) in the face of this Court’s ‘determina-

tion that any change i in baseball’s status niust.be left to the

- more orderly processes of Congress. Federal Baseball 2

ue of Baltimore x. National League, 259 US: 200 : 4

. 356 (1953). nee

Toolson v. New York Y ankées, Inc

“In this formidable undertaking, Petitioner is ailied with °. -

and financially “supported by the Major League Baseball 2g

- Players Association, collective Dargemng, Feprosentitiye of .

the players...

Prior to trial, Petitioner argued to the District Court

‘that. new facie-and cir ances could be: demonstrated

which would show the present. invalidity of this. Court's:

baseball decisions. Put to his. ‘proef, Petitioner. failed. ‘The

District Court found no new facts or circumstances ’to sup-

- port the overturning of baseball’s s antitrust status: —

.. + But facts and circumstances were présented at trial which

: strongly support adherence to precedent. Continued reli-—

- ance by baseball on the legality © of its operations was *

- demonstrated. The history of Congressional. consideration

of baseball’s antitrust statis showed: thorough and constant e

_ attention; favorable findings, and no legislation aes

this Court’s. rulings.

The vital importance - .of tle reserve: system a baseball

was proved, as the evidence demonstrated that suth a

tem was essential to maintain balanced competition and pre- .

‘serve the game’s integrity. The economnics of basehall were

examined, and it was shown that player compensation is.

: 3 ‘policy represented by the doc

eS pellingly indicate that this Co

and_well-confined rulings -

9¢

: einai aa that club operations are nen unprofitable.

- Also, basekall’s player development operations were di mOn-—

strated to gonsume 25% of its revenues, a-uniqué Rael. eee

_ * stance in sports which gives baseball. cle rs a vital stake i in’:

+ the talent which they develop, —— i

Perahs aoe signifies ce OS ail ‘ila reecaabeal toe ea

5 a labor dispute. The reserve system. .-

was, ied to be ‘a mandatory: subject. of bargaining ——

‘under the federal labor laws .and the efficacy of coll

what it pla.

bargaining in baseball was proved. | ‘Accordingly, the |

. . trict Court concluded that, the dispute represented: by this’.

. action could best be -resolved by- the parties themselves ‘

. through. collective bargaining without. outside interference. :

tances, plus the: important :

ine of stare decisis, com- Ss

should reaffirm its precise.

rt fat. the ‘fundamental structure.

and rules of baseball are“not subject to the antitrust laws.

mce adduced at trial-demonstrated -

‘All -of these facts and

- Moreover, the evi

that- federal labor policy also bars the application of the

os: antitrust laws-to the reserve system. Teamsters Union v.._-

Oliver, 358-U.S. 283: (1959); Amalgamated Meat Cutters v.

Jewel Tea Co., 381 U. S. 676 (1965). As & mandatory sub-

: ject of bargaining, the reserve system i is automatically ex-

empt under Justice Goldberg’ Ss concurring opinion in Jewel

Tea. And as a matter exclusively affecting employees, with -

no anti-competitive. effect beyond the bargaining unit, the

-Teserve system also is met under Ju ustice White’s opinion

in Jewel Tea.

State antitrust regulation = never sins applied to ‘Dase-

ee ball Every court whith has considered the issue hasfound _

such regulation to'be inappropriate, either because of base- - -

7 ball’s need for national uniformity and the serious interfer-

a : ; ee oe:

es ‘ence “which ‘anaes: state reriaiion would -cause, or :-

befanse federal. policy has endorsed baseball’s self.- regula- ve

ue tion subject to the will of Copgresg. ee

Petitioner’s principal contention against these points is

that Respondents have suceeeded, by various intonsistent

-arguments, i in placing themselves’ above the law and that

the federal antitrust laws must be ‘applied if baseball is to

| be held aceountabte i in ~ sina This hetorical. conten- oS

tion is contrived.

Petitioner says that baseball argues to the courts that 7

_' Congregs is the proper forum for any reconsideration of

baseball’s status under the antitrust laws. Respondents do

‘indeed take that position, supported by the repeated deci.

sions.of this Court precisely to that effect. -

But Petitioner also says that baseball argues to Congress

“that the courts are adequate and legislation unnecessary.”

(Pet. _Br., p. 3): This. is: simply not: true. Baseball has

never: said to: Congress . that. “the courts are adequate.”,

-’ " What-has been and i is urged is the inapplicahility of aa os

. antitrust laws, the effectiveness of, self-regulation and col-'

lective bargaining, and the: necessity for special sports

legislation if federal’ regulation were ever found to de

desirable.

Petitioner recognizes that baseball’ opposes date antitrust pi

regulation. (Pet. Br., p. 3.) But Petitioner also says that ‘

‘baseball argues to proponents of federal regulation’ that

“state regulation suffices.” (Pet. Br., p. 3.) . Again, Peti-

_ tioner is quite mistaken.° Baseball has consistently opposed pee

any fragmentary and conflicting state antitrust regulation © .

: of its structure and rules. .

_ Baseball remains subject to canleilicds by Hositae: at

_any time, and any determination concerning the application

"aot regulatory measures should be ‘left to that body. This

. Court should continue to adhere to its prior decisions hold-

ing the federal antitrust laws inapplicable to the structure

and rules. of baseball and should. affirm the decisions below 3

ee barring oe A gene reghlation. fey

. - . ° aes =

; Sound ago Support. hice To The Long,

ae Unbroken Line Of Precedent ‘In- This: Court Holding

- , “That Baseball’s Reserve System y Se cent To os:

eres Federal Attra Laws. . :

a °

a ‘Durink the nearly | one beso, years that baseball oy

has developed and expanded with the reserve system gs an : ae

. integral part of the game,.this Court has on at least. five °

— occasions, beginning «i -in 1922, considered the question pre--

sented here—whether baseball’s reserve sygtem is ‘subject

: to the federal antitrust laws.* Each time, the Court’s con"

. @lusion has been the same: “Congress. had no intention of

including the business of baseball within the scope of the

‘ federal antitrust laws.” _Toolson v. -New Y ork. Y Faabeet,

Inc., 346 U.'S. at 357." |

'. Moreover, as this unbroken. line. of cracaiaat con “ett

the Court repeatedly noted the significant-reliance. and state

age creas" considerations. which had grown out ‘of and bat-

practices were exposed to antit “attack. In view of

: these» a the Cou 7 “concluded that. “more

Pies, bball Club « altimore is: National League, 259 es Ss.

(1922); Toolson v New York Yankees, Inc., 346 U:. S

(1953); United States v. Shubert, 348 U. S. 222, 29-30 (1955). ‘ib

. United. States v.. International Boxing - Club, 348 . S./ 2367242 ©

(1955); Radovich -v.. National. Football League, 352 U. S. 445, 450-

ee. (1957). See also Salerno v. American League, 429 F.2d 1003 ~

ve (- Cir. 1970) ;. cert. denied, 400 U. Ss. 1001 deaniaat :

P ®- ~

business . activities.

hatin would be done i in i ebraliag” its 1 prior decisions than: aa

in adhering ' to them. ‘Radovich v. k Mationgs sincera League;

. 352 U. 8. at 450.

Aw: This —e While Sicctitacitty Reaffirming

. the Nonapplicability of the Federal Antitrust...

Laws to Baseball’s Reserve System, Has Care-

- fully Eliminated Any Possible Adverse Con- —

» Sequences: ‘of This Long-standing Precedent.

The. first antitrnst. case involving baseball to each thie -

’ Court was Federal Baseball Club of Baltimore v: National

- League, 259 U. S. 200. (1922). . . The. Federal Baseball Club

- dlaimed that the National and American. Leagues, among ~.° .

the. Respondents here, had conspired: to monopolize the.

= baseball business by means of its reserye system and league |

‘organization. | The trial court’ found. for the plaintiff, but .

.the.Court of ‘Appeals reversed. 269 Fed. .681 (D:C. Cir.

1921). . This Court, -in an opinion by Mr. Justice Holmes,

unanimously affirmed the decision,of the Court of Appeals.*

‘It was clear fromthe outset. thatthe Court’s,opinion in. .

“Federal Baseball was a limited. decision, grounded: on

a realistic perception of the unique characteristics and —

needs of canes baseball in contrast to -other

_ Court, in another opinion. by Mr. Justice Holmes, unani-

. Appeals had

mously’ réversed a lower court’s dismissal on tlie authority

* Justice Holmes stated that “the decision of the Court of Appeals:

went to the root of the case. - i 259 U. S. at 208. The Court of

recogni

that: “If the reserve clause did not exist, the highly skillful: players

would be absorbed by the more wealthy ‘clubs, and thus some clubs

in the League would so far outstrip others in playing ability that the .

contests between the superior and inferior clubs would be- unjnterest-

ng, and. the public would refuse to patronize them.” Federal Base-

ball Club of Beltimore v. National League, 269 Fed. 681, 687 (D.C.

: Gr. 1921). oe es | ai

Indeed, . in its very next°term, the ©

ized baseball’s unique needs, finding inter alia

the. book 1g and prodelitaticn: of vaudeville acts. ee vy

B. F. Kei ith Vaudeville Ench., 262 U. S. 271 (1923). But

* the Court in‘Hart, as in subsequent decisions, referred to.

” Federal Basebbll and plainly left it undisjurbed. 262 U. x *

at 273-74,

. As-the ‘years passed, protiiaiensl cuuineen to

be an unusually prominent aspect of erivan life. And - :

- the immunity from" antitrist attack of its fundamental

and struetural agreements, regulations and player control

| arrangements | was —— as a settled fact i in the baseball

- community. a

In the late 10s, hesaaiein, the Court of Appeal: for the -.

‘Second Circuit, ina split decision, refused to Mipw Federal -

Baseball and reversed the trial court’s dismissal of an

antitrust complaint filed by a player against the then Com-

missioner of Baseball. -Gardella v. Chandler, 17 2 F. 2d 402 -

' (2d Cir. 1949), rev’g 79 F. Supp. 260 (SD.NY, 1948).°.

Although GardeHa’s case was subsequently settled’ without |

- farther court proceedings, the Second Circuit’s sudden

departure .from precedent quickly produced =

repercussions. a %

A number of lawsuits sevolving the reserve system were

filed, three of which reached this Caurt,** direetly challeng- |

_ ing the Federal Baseball rulin&.* The plaintiffs in two, of

“these cases were baseball players, and in the third case the

; plaintiff was a minor league club owner. After hearing all

_° *®Gardella had breached his contract with the New York Giants

and signed.to play in the Mexican League. As a result, he was-de-

- glared temporarily ineligible for play in ‘Professional basebalt by A. B.

Chandler, then Commissioner of Baseball.

“** Toolson v. New York Yankees, Inc.; Kowalski V. Chandler; *

omg v. Chandler. All three cases Were ‘decided: at 346 U. S. 356

(1983) | ee geen cs

»*

e 7

- jhies: cases together, thisgCourt ‘eipllaiibe "peaffizmed the - °

result of Federal Baseball, in Toolson v. New York Y ankees, a

Ine., - U. S. 356 (1953), with this per curiam opinion :

“In Federal Baseball Club of Baltimore v. National

League.of Professional Baseball Clubs, 259 U.S. 200 -

_ (1922), this Court held that the business ‘of providing ©

public baseball games for profit between elubs of pro-

fessional 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 under-

” standing that it was not subject to existing antitrust

2 legislation, The present cases ask us to overrule the

«” prior decisiow and, with retrospective effect, hold the

legislation applicable: We think that if there are

_ evils in-this field which now warrantapplication 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 |

y Federal Baseball. Club of Baltimore vy. National -

- ' League of Professional Baseball Clubs, supra, so far

' as ‘that- decision determines that Congress had no

intention of imeluding the business of baseball within

the scope of the federal antitrust laws.” 346 U.S.

‘at 356-57. : - |

te ‘ mabbeequent decisis, this Court has 5 aftrmned and

3 reiterated the special factual considerations which support

continued adherence to Federal Baseball, while at the same

time ensuring that enforcement of the antitrust laws in

other areas is not affected. :

In United States v. Shubert, 348 U.S: 299 (1955), the

Court held the antitrust laws applicable to the operations °

“of theatrical booking agents, aaa and theatre oper- “~

. ators. Distinguishing‘the baseball cases, the Court stated:

"i Toolson, where the i issue was the same as in

| Federal Baseball, the Court was confronted with a

unique combination of circumstances. For over 30 |

. years there had stood @ decision of this Court spe:

cifically fixing: the status of the baseball business

under the antitrust laws and more particularly. the

' validity of the so-called ‘reserve clause.’ During this

_ period, in reliance on -the Federal Baseball prece-

dent, the, baseball business had grown and developed.

_ Compare Helvering v. Hallock, 309 U.S. 106,110. And

. . Congress, although it had actively considered the —

ruling, had not seen fit to reject -it by amendatory

legislation: Against this background, the Court in|

Toolson was asked ‘to overrnle Federal: Baseball on -

- the ground that it was out of step with subsequent

- decisions reflectirtg present-day concepts of inter-.

state commerce. The Court, in view of the circum-

stances of the case, declined to do so. But neither.

did the Court necessarily reaffirm all that was said in © -

Federal Baseball. Instead, ‘[w]ithout re-examina- -

_ tion of the underlying 1 issues,’ the Court adhered to —

Federal Baseball ‘so far as that decision determines

_that Congress had no intention of including the busi-

Ress of baseball within the scope of the federal anti-

trust laws.’ 346 U.S. at 357. In short, Toolson was

- .,.@&- Narrow application of the’ rule of stare decisis.’ .

. 348 U. 8. at 229-30. |

7) .

Again, j in United States v. International Boxing Club, 348

“ LU. S. 236, 242° (1955), the Court,-while holding the Sherman.

Act applicable to the activities of boxing match promoters,

was careful to note that “none of the factors underlying | :

the Toolson decision are present i in the instant case.”

Finally, in .Radovich v. National: Football League, 352

U.S. 445 (997), this Court again repeated i in unequivocal

: :

f . . °

- - .

= 8 - 28

‘

‘ terms its wullieg as to. the inapplicability of the antitrust.

laws to professional baseball. While . upholding in that |

+ ease the sufficiency of an antitrust complaint brought by |

a player against professional football, this Court strongly .

reaffirmed the Toolson decision and further elaborated the

important underlying considerations :

“In Toolson, we continued to hold the emisiotia :

~ over baseball that was placed there some 31 years ©

'.earlier by Federal Baseball. The Court did this

because it: was concluded that more harm would be

done in overruling Federal Baseball than in uphold-"’

_ .ing-a ruling which at best was of dubious validity. .

e Vast efforts had gone into the development. and

organization of baseball since that decision and

enormous capita] had been. invested in reliance on

its‘permanence. Congress had chosen to make no

_ Whange. All this, combined with the flood. of litiga-

tion that would follow its repudiation, the harass-

ment that would ensue, and the retroactive effect of

_ such a decision, led the Court to the practital result

that’ it should sustain the unequivocal line of author-

ity.reaching over many years.” 352 DU. S: at 450- dL.

(Footnotes | omitted.)

In all of these cases, spanning many years, this Court has.

repeatedly and definitively resolved the issue presented here —

contrary to the position now urged by Petitioner. Seldom, |

if ever, has. precedent so ba aid and uniquely controlled a

case as here.®*

* Since Radovich, federal. courts have on at least three occasions

dismissed. complaints against baseball alfeging federal antitrust vio-

lations. Portlarid Baseball Club, Inc. v. Frick (Baltimore Baseball

Club, Inc.), 282 F. 2d 680: (9th Cir. 1960); Salerno v. American ©

League, 429. F.2d 1003 (2d Cir. 1970), cert: denied, 400 U. S.-1001

(1971. Portland: Baseball. Club, Inc. v. Kuhn, Civil Nos.. 71-53, |

71-54, D. C. Ore., December 28, 1971.

: tees 23 | ree eae

“The baseball cases donot i impair the cieeaiant of. fed-

eral antitrust policy in any other area. This Court has.

made clear that the rule established in the baseball cases is

strictly limited to organized professional baseball. Rado- ,

vich v. National Football League, 352 U.S. at 451.

Moreover, baseball has always. recognized the naryow, :

applicability of such precedents even to it, and has never

considered them blanket immunity from, all antitrust regu-

lation. Rather, baseball has interpreted the Toolson rule to’

mean only that its historic and evolving internal structure

and rules are not subject to antitrust attack. ‘The 1964

memorandum of Paul Porter, counsel for the Commissioner,

to Commissioner Frick (referred to in Petitioner’s Brief at

p. 25) provides an illustration of this view.* Mr: Porter’s -

. Memorandum considered the acquisition of the New York

-Yankees by the Columbia Broadcasting System and advised

that Toolson did not cover any antitrust issues which might .

| Lal by the acquisition by CBS of a baseball ¢lub.

e District Court. adopted this. limited _ view- ofthe ~~

scope of the Toolson doctrine (312 | F. “Supp. at 407 n. 3%

. App. 86) as did the Wisconsin Supreme Court in 1966.

Wisconsin v. Milwaukee Braves, Inc., 31. Wis. 1 699; 725, -

144 N.W.2d 1, 15 (1966), ceft. denied, 385 U.S. (1966).

The Wisconsin Court observed that ‘baseball’s “exemption

- does not cover every type of business activity to which a

baseball club or league might be.a party...” but that cover-

age ‘clearly includes at least baseball's “agreements and

- rules which provide for the structure of the organization

and the decisions which are tiecessary steps in maintaining

it.’ Nothing more than these fundamental structural ele-

_ ments and rules—the same matters répeatedly considered —

* “Background Memo on CBS Acquisition of Yankees,” Oct. 7,

1964, contained in the record of 1965 Senate Hearings on Profes-

sional’ Sports Antitrust Bill. Hearings on S..950 Before the Sub-.

Comm. on Antitrust and Monopoly of the Senate — Comm.,

- 89th Cong., 1st Sess. (4969), p. 159.

iat 30 ee: ; a

and bined necessary by tuition of Congress—have ever

been presentéd to. this Court; and it is only these essential

sports aspects and practices which Toolson shields. _

Despite Petitioner’ s arguments, there are no broad prin-

ciples at stake here. The issue is simply whether this Court

should abandon its-historie position that the structure and

rules of baseball are-not subject to the antitrust laws. The

record in this action utterly fails to ee such a: drastic

a . eee | Pe

B. The Recosd in This Case Demonstrates Affirm-

' ative Grounds for Continued Adherence to »,

Toolson.

t (1). Baseball’s Continuing ee on this Court’s }

- Prior\Decisions. |

Federal Baseball and Toolson have: for Aionies provided

—— —hbaseball clubs with a clear guide for conduct, to enable them °

to plan their affairs with assurance. This judicial guide

has been at the very core of the ha a i of baseball

-as it is today. |

_ The record in this:case shows, without contradiction, that

‘baseball clubs have continued since Toolson and Radovich to

invest: millions of dollars in player contracts and other _

baseball assets (Pl. Exs. 10-11), togpila private ‘stadiums

« -’and enter into long term leases on public stadiums (App.

290-91; R. 1454-58, 1752), to acquire new fraychises at costs

reaching ten million dollars each (PI. Exs. 10-11) and to *

/make numerous other commitments, all in reliance upon

/_daseball’s antitrust exemption . and in particular upon the

validity of baseball’s reserve system..

- The testimony of Francis Dale (App. 291-94), Ewing

Kauffman {App. 325-26), John McHale (R. 1313-19) and

‘Robert ns as 1358-60), all men who have Parchased.

| ee oe

' or participated i in ihe purchase’ of major Sine clubs since

Toolson, was unanimously and pointedly ‘to the effect that

‘the investments: which they had made in . baseball would

never have been made if.the baseball business were not pro- -

tected by the Toolson exemption. In each case this reliante 4

on baseball’s historic exemption was quite explicit and sig- .

" nificant, not merely a matter of casual interest. i

Moreover, Mr. ‘Kauffman, the president—« the new

a Kansas City club, testified 1 that_his "understanding of the

ers which he (developed—providea the. rationale for his 5 in:

vestment:of well over a million dollars in his new. baseball

Player aca my €«R. 1459-67). Mr. Kauffman brings to his -

. academy ; y/ oung athletes with little or no baseball experience

’ and little chance to reach college. At the academy the Kan-

sas : Lity club evalyates and develops their potential, while

at the same time providing them with continuing education .

at the college level (R. 1461). Basic to this program is the

knowledge that the Kansas City club will enjoy the benefit

of the talent which his efforts may produce (R. 1459-67).

‘An- examination of the Milwaukee Braves’ prospectus. of

. 1963 (Def. Feeney Ex. K), relating to the only recent public

‘offering of stock in a basgball club, reveals the éxtent of. —

investor. reliance on the reserve system. The prospectus —

describes the reserve system, discloses that the Braves’

player contracts constitute substantially all of its assets,

describes each player under contract, and assures the in-

vestor that” such contracts are “subject. to the control of

the Braves. ” (Def. Feeney Ex. K, p. 10.) It also observes

that “the competitive success of a baseball club, which: bears

a strong relationship to its financial success, depends pri-

marily upon the playing skill of players under contract ta

the club.” (Def. Feeney Ex. K, p. 7.) Obviously, the reserve

' system was critical to any investor analysis of the Braves’.

. offering.

- Such shales coula, be apiaeit: at agi ‘The fact is

3 that nothing could be more central to investor concern than

_ baseball’s-antitrust status; and the continued reliance by

baseball investors on Toolson strongly supports adherence .

. to that decision. Judge Moore, rene me put it

well:

: ?

“Just as ‘écBapcmn Court in 1955 recognized that

‘ baseball ‘had grown and developed’ and ‘in reliance

.on the Federal Baseball precedent,’ United. States v.

’ Shubert, supra, 348 U. S. at 229, so much more has it

grown between 1955. and 1971. The eight teams in

gach league have’ been expanded to twelve... . The

reasons for adopting a ‘hands off’ policy by the courts -

_of this particular sport have multiplied. ™ 448 F.2d

at 272 (App. aioe aff

2) The Role of: Congress,/ J

‘In the Radovwich ‘decision, this. Court plainly samouneed

that. baseball’s stafus was for Congress to consider, not the

eourts. This Court held that “as long as the. Congress con-.

tinues to acquiesce we should adhere.to. . : the iriterpreta- -

tion of the [Sherman] Act made in” the. earlier baseball

" cases. 352 U-S. at 451. This Court further. stated:

“We, therefore, ‘conclude that the orderly way to

' "eliminate error: or. discrimination, if any there be,

is by legislation and not by court decision. Congres-

sional processes are more accommodative, affording

the whole industry hearings and an opportunity to —

assist \in the formulation of new legislation. The

- resulting product is therefore more. likely to protect -

the industry and the public alike .. . .. [T]he doctrine

ance.” 352 U. S. at 452.

‘Despite Petitioner’ s efforts to turn this Court’s =

— down to impose on ries ara the burden of obtain-

‘ of Toolson and Federal Baseball must yield t@ any

congressional action and continues only at its suffer-

‘a

Py ‘

ing Osnrenitial action, the Toolsos i Federal Baseball .

ryle was plainly intended to stand unless and until dis-

turbed: by Congress. ‘Fhe history “of Congressional con-.

sideration of this subject not only fails to show that the—

rule announced by this Court moe be disturbed, it ie

affirmative support for that rule.*:

Immediately following the Radovich’ ‘decisia. in 1957,.

Congréss began intensive consideration of various legisla-_

' tive proposals dealing with the antitrust laws ond pro-

fessional team sports. ‘hg:

‘Most of’ these proposals “would lave oxiamstin’ antitrist os

immunity to the basic sports structure and practices of .

football, hockey : and basketball—to match baseball’s im-

munity. ' *** Such immunity would have expressly included .

: _the employment, selection and eligibility of players and the ~

assignment. of their-contracts. ‘Some proposals would have

completely - exempted from the. antitrust laws all profes- :

*,. sional league sports, while others would have revoked base-, .

‘pall’s' status under Toolson. * . The record of. this Congres-

* Prior to Toolson, Congress was principally poncanaior about ‘the |

_ ossification of the major league map which was limited to the north- -

east quadrant of the country and did not reflect the westward move- _

ment of population. Since that time, major league baseball has moved =~

west and south: (and to Canada as: er to present the game to the

public on a truly national basis. —

_** In the House, Emanuel ‘Cellier, Chalet of the ‘House Anti.

, trust Subcommittee, said on June 17; 1957, at the opening of hear- .

ings: “[T]he obligation rests upon the Congress to determine

whether the Supreme Court decisions are discriminatory and, if so,

how this. discrimination should be resolved.” Hearings on H-R.

5307, et al., Before the Antitrust Subcomm. of the Comin. on the Judi--

ong., 1st Sess. (1957), ee: ‘ \

* ball has consistently supported such lestilatice. Bg g., testi-«

mony of Ford C. Frick, Commissioner of Baseball, Hearings on H.R.

10378 and S. 4070 Before Subcomm. on Antitrust and Monopoly

the Senate Judiciary Comm., 85th Cong., 2d Sess. (1958), pp. 9 20

05; Hearings on S. 2391 Before Subcomm. on Antitrust and Mono re

aly +e the Senate daar: Comm., 88th Ome, 2d Sess. (1900-9

34 C~#

gional seciabaacsitlin As. a, seesuaciead'3 in Defendants’ Kuhn.

_ ExA,a stipulation covering the Congressional history dur-.

ing the. period. 1951-1970. Since November 1953, when the’ |

_ Toolsom opinion was handed;down, there have been over 50

' - »*' bills introduced into Congress dealing with the appli¢ability

or non-applicability of the antitrust lawsto organized base-. .

ball; and Congress has held numerous hearings during that :

time which have included consideration of the reserve sys-

tem 2 and the antitrust laws. : :

“ay ‘In 1957, seven bills were ibrodees’: ‘They 3 were of

the three types referred to above. Approximately 50 wit-

nesses testified in 15 days of hearings before the. ‘House

Antitrust Committee concerned with these bills. -H earings

on H.R. 10378 Before Antitrust Subcomm. of the! ‘House.

: Judiciary Comm., 85th Cong., 1st Sess. (1957).

_° (2)-In 1958, the House passed a bill ex€mpting from the ©

antitrust laws the essential structure and practices of all .

professiénal league sports, including their reserve systems

(H.R. 1037 8). The bill had been amended on the floor of the

_ House to-delete language wen the exempted: activities Rs

to those “réasonably necessary.” An identical bill was

introduced i in the Senate (S. 4070) and the Senate Antitrust

- ‘ Subcommittee; held 12 days of héarings at which 37 wit- ,

. nesses testified. Hearings on H.R. 10378 and S. 4070. Before

Subcomm. on Antitrust and Monopoly of the Senate Judici-

¢ ” ary Comm., 85th Cong., 2d Sess. (1958). No action was

cea taken on the Senate bill: before the session ended. 7

~-(3)' In 1959, hearings w held by the Senate Antitrust

’ Subcommittee. on a bill sfmilar to the 1957 and 1958 bills,

providing an antitrust exemption for the essential structure _ e

_and practices of league sports.. Hearings on S. 616 and S.

886 Before Subcomm. on Antitrust and Monopoly of the

- : Senate Judiciary Comm., a6th. Cong., 1st Sess. (1959). Hear-

ings were also held.in the House on comparable bills. Hear- ©

‘tm

‘ 7. ‘* -

Be i a o-

. 6

ings on. H. R. 2370 et a; Before the Antitrust Subcomm.

4 of the House Judiciary Comm., . 95th Cong., 1st Sess. ( 1939).

(4) In‘1960, hearings were held by the Seniite Antitrust |

Subcommittee on a bill which. would have continued base-

ball’s antitrust exemption, with certain limitations, and |

granted antitrust immunity to the other league: sports, .

. Hearings on S. 3483 Before Subcomm. on Antitrust and .

Monopoly of the Senate Judiciary Comm., 86th Cong:; Py 2d

Sess. (1960). ‘The bill was reported out, the limitations were

; removed on the floor, but the bill “was: ‘recommitted and no.

further action was taken. ;

(5). In 1964, hearings \ were , held by. the Antitrust Sub-- :

. - committee of the Senate on a bill similar to many of those

previously introduced, granting exemptions for the essen-

tial structure and. practices of sports. H earagas on S. 2391. ~

ime Before Subcomm. on Antitrust and Monopo jofithe Senate .-.

. Judiciary Comm.,:88th Cong., 2d Sess. (1964). The forzial oe

' ~ report of the Committee on the J udiciary concluded:

“Phe Committee believes that the’ existing abi of: .

. Self-regulation in these team spdrts should. be con- .

tinued.” Senate Report No. 13 3; 88th Cong., 2d°

Sess. (1964), p. 8. a vi

(6). In. 1965, additional bills were introduced, siedias to

- . those considered in previous years.’ Hearings Hac -held in

the Senate. Hearings on S. 950. Before Subcomr on Anti- ae?

trust and Monopoly of the Senate Judiciary Co oth

. - Cong., 1st, Sess. (1965). ‘The Senate Antitrust Shalaciliendt vs

tee reported favorably on a bill éxempting tlie structure and

- fundanterital practices of professional sports. _ Significantly,

the Report stated:

. " “These exemptions permit thé: use of the aratt ayetenii

and the ‘reserve clause’ in addition to regulations ©

restricting the nateinmermr selection and. assignment

“s : ietade ae

oe % . ‘

‘ oe ‘ :

*, . $ ° bee ae “¢

e ;

. i

“” ® ,

. ‘ ‘

; ; ‘

36° . . - |

of pinyer eoutracts. The committee considers these

- exemptions as necessary, to“ maintain competitive .

equality among the’ member clubs and leagues in the

various sports.” ‘Senate Report No. 462, 89th Cong. +?

Ist Sess. (1965), p- 13. Soa w

This bill was subsequently passed by the Sislate: but no _.

action was taken by the House:

_ Each bill. which has passed either House .of eeceses

(H.R. 10378, 85th Cong., 2d Sess. (1958) and Senate S. 950, .

..__ 89th Cong., Ist Sess. (1965) ), provided that the professional

. league sports would be exempt from the antitrust laws with |

_ Tespect ta “the employment, selection or eligibility of.play- .— ,

ers, or the reservation, selection, or assignment of player -°

contracts”, and provided as well that the franchise and

‘league arrangements of the ‘sports would be exempt. ~ |

Moreover, -when. Congress has enacted laws in the profes-

sional sports area, the effect of ‘such laws invariably has-

’ been to codify or grant an ‘antitrust exemption, not eliminate

it. In 1961, Congress adopted the Sports Broadcasting Act,

’ which permitted professional football, and the other pro-

fessional league sports, to adopt joint league telecasting

practices. 75 Stat. 732 (1961), 15 U.S.C. SS 1291-95.** In

1966, Congress enacted ‘another measure for. professional :

_ * Football had sought legislative action after it had been held in. ;

United States-v.-National Football League, 116 F. Supp. 319 (E-D. .

Pa: 1953) and 196 F. Supp: 445 (E.D. Pa. 1961), that certain as-

, pects of. its television policy were illegal under the Sherman Act. :

**15 USC. .§ 1294 provides that: “Nothing contained in this chap-

ter shall be deemed to change, determine, or otherwise affect the appli-

‘cability or nonapplicability of the antitrust laws. to any‘ act, contract,

agreement, rule,-eourse of conduct or other activity by, between; or

. among engaging in, conducting, or participating in the o

fessional team sports of football, baseball, basketball, or

+f Potkey, ex except the agreements to = section 1291 of this title shall

Conapplicabilit . x or indicates that baseball’s 2 antitrust exemption |

has not been supplanted by the more limited telecasting exemption.

_. This reading- of o the Act.is supported by its legislative history. See

~~, resarhep of, Congressman McCulloch, 107 Cong...Rec. 20,062 i961).

te = . . e

a : —

football, this time to authorize the merger of the National ©

and. American Football Leagues. 80.Stat. 1515 (1966), 15

. U.S.C) § 1291. Consideration is now being given to legisla-

tion which would authorize the: merger of the National:

Basketball Association with the American Basketball Asso- .

ciation and hearings are. in progress béfore the Senate Judi-

| _ ciary Committee.

In addition to the NBA- ABA. merger proposal, Congress

. has under current consideration bills which, like those dis-

_ eussed above, would either place baseball under the anti- ~

trust laws or extend to the other professional team sports |

_’an immunity for essential sports practices, including the

. player reserve system. S. 2499, S.. 2616, H.R. 2305, H.R.

11033 and H.R. 10825, 92nd. Cong., 1st Sess. (1971). ae

‘In the context of this Court’s express invitation to Con-

gress to consider the Toolson exemption, this history, of.

Congressional aetivity and the failure of Congress to enact

legislation disturbing baseball’s exemption is highly signi-

. ficant, as the-District Court recognized. 316 F. Supp. at 279

| (App. 110-11). The Wisconsin Supreme Court described

this Significance quite clearly:

“[S]ilence of Congress in “this. context demon-

_ strates congressional recognition that league struc-

ture and the related agreements and rules are

integral parts of professional baseball as it exists,

and that the application of the familiar type of anti-

trust legislation to the structural arrangements of

organized baseball is inappropriate; . . . there is

to be self regulation [of baseball] until such time ©

as Congress decides that the public interest requires

‘other control.” Wisconsin v. Milwaukee Braves,

Tnc., 31 Wis. 2d 699, 730, 144 N.W.2d 1, 17, cert. .~

: denied, 385 U. 8. 990 (1966): ;

Congress remains the proper avenue for say reconsid-

- eration of baseball’s regulatory status. If regulation were

ever found to be desirable, that regulation should take

| “other forms in preference to traditional antitrust regula-

tion. Only Congress has suffitient flexibility and legislative

*._ power to shape regulitory policy for baseball on a. fair

-and effective basis. "6 ° ¥ :

(3) The Role of Collective Bargaining.

- In our Statement of the Case (pp. 15-19), the history and

results of the labor negotiations in baseball are set forth.

That ‘recital abundantly demonstrates the efficacy of col-

lective bargaining in baseball: This new avenue for agree-

ment and accommodation between clubs and players pro-

vides a cogent additional r reason for this Court to adhere

to the Toolson rule.*

. Toolson Tecognized that Congress was istorced to the

courts as an agency for change in -the’ baseball business.

Now,.a demonstrably efféctive player collective bargain-

ing organization offers another agency for change in areas

‘which, like the subject of Petitioner’s complaint, are funda-

~ mentally labor-management disputes. .

Modification of baseball’s reserve system .is: possible—

even likely. The Commissioner of Baseball testified at trial

the reserve system is an “evolvi ing” system and that:-he ex- -

pected “it to continue to be an ‘evolving system”. (App.

273.) But.such modifications should be worked out by the

‘parties themselv es as part of the entire fabric of baseball.

+ Petitioner suggests that collective bargaining is only a partial

answer here because minor league players are not represented by *

‘the Players Association. But Petitioner is a major league player,

Respondents are the major league clubs, and the rules complained

of: heré aré the Major League Rules. The reality of the situation

_is that. the Players Association and the major league clubs aré

the_parties which deal. with the subject of baseball’s. player arrange- _

- ments, and there is no indication that these parties have disregarded

minor league interests in resolving their disputes. To the’ contrary,

the interests of minor league players—as major league trainees and

past and fyture major league payee are eyastantty being advanced

) oy ag Fiayets Association. ;

The District: Court agreed, and-observed that “the conflicts

'... are not irreconcilable and ‘that ‘negotiations could pro.

ance an accommodation .. . equitable to all concerned—in

~ essence, what is called for here is continuity with change.”

316 F.Supp. at 282 (App. 115). Antitrust litigation can-

‘not produce such salutary results, it ¢ _ only’ produce 7

harrassment and disruption’ Thus Toolson, in: shielding

baseball from antitrust litigation, promotes more rational

and constructive evolution of baseball’s reserve sysfem.

‘

‘C. Petitioner Has. Shown ‘No Justifications Which

Overcome “the Weighty Considerations: in .

Favor of Adherence to the Toolson Precedent.

"As this Court. has recently stated: “Very weighty con- -

. siderations underlie the principle that caurts should not |

: lightly overrule past decisions.” Moragne v..States Marine. i

Lines, 398 U.S. 875, 403 (1970).

' Petitioner sought a trial in order to demonstrate new facts. sl

about the baseball business since 1953, the year of Toolson,

which he claimed would outweigh all such considerations.

-. .But at trial he was unable to do so. _ 2

Petitioner’s main effort in this direction at trial to

point to the adoption of the free agent (or amateur) \player

draft in 1965 as a drastic additional | restriction which

allegedly weighs heavily against Toolson. (Pet. Br., p. 23.)

That draft,.to which Petitioner was never subject, permits

the clubs to select negotiating rights to amateur players in

_ reverse order of their league standing at the’ end of. the

preceding season. .Such rights are valid for a six;month

period,* after whieh an unsigned player becomes subject to

*In the other professional spotts, . all of which have amateur *

player drafts, the drafting club receives perpetual — rights

to the player. (Pl. Exs. 14, 17, 19-20.) ~~

“ee

Se | oo

reselection by another-club. The purpose of the draft is to

enhance competitive balance by permitting’ the weaker clubs

to,have first chance at. the available amateur players.* | -

.The record indicates that this purpose has been achieved

in that some elubs, especially the recent expansion clubs,

_ have through the draft greatly improved ‘their quality

(App. 249-50; R.:1203-4). And from the standpoint of —

drafted playets, there appear to be no serious drawbacks.

The annual aggregate of bonus payments to such players

upon the signing of their first professional contracts’ re-

“mained virtually the same after the draft rule was insti- |

tuted.as before, when. all clubs could bid for a playes’s serv- |

ices. - (Def. Kuhn Ex. C.) The District. Court concluded -

that the draft did not “fundamentally” add to the restrie-

tions of the reserve ‘system and had no significance in:

; considering the Toolson rule. 309 F.Supp. at 803-04 (App.

70-71).

In another direction; Petitioner now tries to denigrate.

. baseball’s reliance on Toolson, arguing that since Congress

could place baseball under the antitrust laws at any time,

Toolson offers “little ... assurance.” . (Pet. Br., p. 24.) But

Petitioner misses the peint. ‘BasebalW&@onceded: -amenabil-

ity to Congressional regulation i is diffetent from—and far

less disruptive than—vulnerability to antitrust litigation.

This Court clearly recognized the difference in referring i in

Radowch to the “orderly” and “more accommodative”

processes of Congress as opposed to the “harassment” of

a “flood of litigation.” 352 U.S. at 450- 52.

* Comimissioner Rozelle of the National Footbalt League testified *

that professional football’s college player draft was essential to

- league balance ( App. 222), and ‘Commissioner Kennedy of the

National Basketball Association said that the adoption of a common

college player draft was an important purpose of the proposed NBA-

ABA Merger (App. 229).

Petitioner also argues that recent decisions of this Court.’ -

have undermined, as supporting pillars of stare decisis, the |

importance of both reliance interests and Congressional

c approval by inaction. But there i is nothing i in this Court’s

decisions which indicates departure. from the traditional |

views expressed: i in Toolson, Shubert and Radovich. -

For example, in Canada Packers, Ltd. v. A. T. & S. F. R-

Co., 385 U.S. 182, 184 (1966), both Congressional approval

and reliance interests were plainly recognized. This Court —

held that it should not. “disturb”. existing statutory con- —

struction when presented with a “long standing” rule, and

no showing of “particularly unfortunate. consequences”, y

when Congress has not “seen fit to intervene”..

In Joint Industry Board v. United States, 391 U.S. 294,

228-29 (1967). this Court noted that “in every Congress |

‘since [the prior. decision] bills have been introduced to

overrule or modify the result, reached in that case” and

held that “any new ' Fesolution . . . Should come from~

_. Congress.”*

* To the same effect are , United States v. South Buffalo Ry. Co.,

333 U..S. 771, 774-75, 784-85 (1948) (On questions of “statutory

' construction, not of constitutional import,” Congress can “rectify” ..

judicial mistakes; “Congress has considered the alleged mistake and

decided not to change it.”); Walling v. Halliburton. Co., 331 U. S.

17, 25 (1947) ( “Knowing of the [prior] ... decision, the Congress

- has: permitted [the statute] .’. . to stand unmodified “and the courts

_ have applied it as so construed. Employers and employees . . . have

regulated their affairs on the faith of it.”); Helvering v. Grifiths |

318 U. S. 371, 403 (1943) (“To rip oftt of the past seven years .

a principle of law ‘on which [the parties] .. . have acted would pro-

_ duce readjustments and litigation so: extensive we would contemplate

them with anxiety.”); Missouri v. Ross, 299 U. S. 72, 75 (1936)

(Congressional inaction considered “persuasive evidence of the oe:

tion by [Congress] . - of ‘the judicial constryction.”’).

4200

_ ‘The cases cited by Petitioner* are all quite distinguish-

able from this action in that none of them involves the _

combination of: (1) <a long standing statutory: interpreta-

tion of perfect clarity in a non-constitutional area, (2) 7

substantial reliance. igterests- running tothe very heart of ~*~

or’ ‘specific industry, (3) the absence of legislation despite | |

thorough Congressional consideration, after an explicit i in-

vitation: and (4) strong indications that more harm than

good would-come from an overruling. Toolson, on the other.

hand, derives its strength from exactly such a “unique: com-

bination of factors. _

Even on the limited points with which they deal, Peti-

: tioner’ s cases are distinguishable. In Moragne, this Court,

in ‘considering the possibility of Congressional .acquiés-

* eence, observed that only one bill had been introduced in

Congress and, that ‘no hearings had been held or scheduled. ©

The Court noted as well that “ ‘Congress has largely left to

this Court the responsibility for fashioning the controlling

| _ Tule of admiralty ldw.’” 398 U. S. at 405, )h. 17. With re-

“ spect to the Boys Markets decision, only two bills had been ©

introduced and no hearings, held or scheduled, and. this

~ Court could find no “persuasive circumstances evidencing a

clear desfth.” 398 U.S. at 242. In Blonder-Tongue. Lab-

oratories, Congressional consideration was cursory and

sporadic and far .from an indication of Congressional

approval. In contrast, the record of Congressional consid-

eration of baseball plainly reveals a continuous thorough-

- going inquiry into the Toolson ruling and quite persuasive

evidence of a clear design to do nothing to reverse

Toolson.** |

* Blonder-Tongue ‘Laboratories, Inc. v, Waive rade. of Hingis:

Foundation, .402 U. S. .313 (1971); opus. v. States Marine

Lines, Inc., 398 U. S. 375 (1970); Boys Markets, Inc. y. Retail

Clerks Union, Lacal 770, 398 U: S. 235 (1970): and Lear, Inc.:v. .

Adkins, 395. U. S: 653 (1969).

, ¥* Moreov ver, in none of these c cases was there any rehiance inte

to be upset or any other destructive potential seen in overruling.

short, ‘none of the underpimings of Toolson ‘was present. |

43 |

* On the issue of reliance, Petitioner cites Lear, Inc. v.

Adkins, 395 U. S. 653° (1969). While it is true that reliance:

interests were asserted in that ease, which overruled the

: a! common law patent licensee estoppel doctrine, this Court

ptt ae he nee -found that.no., existing legitimate business relationships”’

_ would be undermined.’ 395 U. S. at 674, n: 19.’ In any

event, the estoppel doctrine was “the product of a clouded

<< = history,” as the Court noted. 395 U. S. at 671. Also, the

doctrine had been substantially eroded, because patent

licensees had long been able to assert patent misuse and

other antitrust claims against their licensors* and the line |

between such antitrust claims and pure claims of i

invalidity was blurred at best.

Finally, Petitioner attempts to brush aside the strong 1 re-

liance interests which have continued to grow out of this

_Court’s baseball decisions with the vague suggestion that

- this Court could pverrule those cases “prospectively.” Peti-

tioner does not, and cannot, indicate‘how.any ruling altering

the antitrust status on which the present baseball structure

has been built eould fail to have an ¢ enormous impact on the

' operation of baseball and the deep-rooted reliance interests

- involved here.

The radical and abrupt — in baseball’s axititvdat :

status sought , by. Petitioner—from exemption to per se .

violation—would not only expose, the reserve syst? to vio-

lent change, and. the éreation of “chaotic conditions” as

. testified to by Petitioner’s own witnesses: It wougd also’

directly threaten the very structure of the game, Almost

* Sola Electric Co. v. Jefferson Electric Co., 317 U. S.,173.(1942); .

Edward Katzinger Co. v. Chicago Metallic Manufacturing Co., 329

U. S.:394 (1947); MacGregor v. mnie Electric & Manufac-

— Co., 329 U. ‘S. 402 i).

— Ae on

. . ’ ’

‘

every. traditional niaeal-—iudiading vital matfers not now

before the Court*—would be vulnerable to costly and dis:

ruptive litigation. Petitioner may have, as he asserts, no

“obligation:to demonstrate how baseball should be run” if

_its basic practices were declared per se illegal as he seeks. “

(Pet. Brpp. 17.) But this Court has recognized that it: |

should consider the effect of its rulings and has determined 7

that only the “orderly” and “accommodative” processes: of

Congréss~aré appropriate to effect a change in baseball’s.

antitrust status, There is ‘no technique of Prospective over-

ruling which can alter that conclusion.

_ As the District Court noted in rejecting Petitioner’s

argument, “we do not believe. the ‘prospective’ overruling

- _ suggested by Petitioner would vitiate all of these under-_

pinnings of Toolson” (309 F. Supp. at 805, App. 73) ; such

relief would be “anprecedented” ; and inevitably, any order

overruling the long-standing precedents i in this area “might

still have a serious retrospective effect on the reliance inter-

ests of baseball. . . .” 316 F. Supp. at 277 (App. 106).

Petitioner’s arguments, both factual and legal, fail to

approach the weight of the’ considerations which support

. adherence to this Court’s prior decisions.

* Among such matters: are the territorial rights of ‘clubs and

leagues, the authority of the Commissioner and the agreements and

rules which bind the league and club components of baseball merece

in an — structure. — |

Ik \

Fe ederal Labor Policy a the Resceve nar a

F rom ‘the Operation of the F ederal: Antitrust Laws.

The -eontroversy betwee the paar ‘in this case over

the player contract provisions and rules, which- comprise

the reserve system is i rcearincas a labor-management

- dispute.

The reserve system -haf® been acknowlcdued by. all :

parties to this action to be. a mandatory subject of collective

7 bargaining. 316 F. Supp. at: (App. 117). The proof at.

trial demonstrated that the reserve system was, at the time -

the complaint in this action was filed, incorporated as part

of the 1968: Basic Agreement with \the Major League Base-

ball Players Association and a principal subject involved.

in the negotiation of the successor agreement. (Def. si

_ Ex. F, pp. 1,11; App. 508-09.)

The negotiations leading to-the 1968 Basi¢ Agreement |

had produced important concessions on the part of the

clubs. Among. these were numerous changes i in the Uniform

" Player’s Contract (Def. Feeney. Ex. F, pp, 15-17) : inelud-

ing a substantial increase in the minimum salary, increase

in various expense allowances, establishment of a’formal

‘grievance procedure, and a modification in the renewal op-

tion clause (the clause conimonly referred to as the “reserve :

_ clause”) to change the maximum permitted salary cut from

25% to 20%. The Basic Agreement incorporate@ the Uni- .

form Player’s Contract as modified and provided that “no

other form of Uniform Player’s Contract will be utilized.”

Paragraph 9(a).of the Uniform Player’s Contract ‘had

' also been changed i in. the negotiations. In its old version, *

* that paragraph simply recited that the club and player °

agreed to accept and abide by all provisions of the Major.

‘League Rules and that disputes were to be referred to the _

Commisa pe: As a result of the. bargaining, ‘paragraph

‘

46,

9(a)_ was amended to ctovide that the club jalk ra

agreed to accept and abide by all provisions of the Major

League Agreement, ‘the Major League Rules and League _—

Rules in effect on the date of the eontract, to the extent that

: such provisions “are not inconsistent with”. the agreed upon’

form of Uniform Player’s Contract and’ the Basic Agree-

‘ment. . (Def. Feeney. Ex, F, p. 16.) - Moreover, the new

_ paragraph recited that a ‘copy of the Major League Agree-,

ment and Rules had been delivered to the player prior to

the execution of his contract. In fact, prinfed copies of

the Major ‘League Agreement and Rules were distributed

to. all of the players—at club expens _— by -

_contract. | ’

The nature of. these changes inthe Uniforia Player's Con-

: ‘tract makes it plain that the Players ‘Association had dealt

with the reserve system and had agreed to be bound by it

- and all other provisions included. i in the agreed upon ‘form

of Player’s Contract and rules, for the orm of the Basic

Agreement. ;

‘In ane ort to ivoid the ‘signifieaives, of such Makes: to

this action, Petitioner now. says that no agreement was, |

reached.” | (Pet. Bri, p. 9.) But the Players Associa- :

- tion has’ repeatedly and. properly. asserted player rights |

- under provisions of the Uniform Player’s Contract and

: Major League | Rules; ‘and a number of _Brievances have .

. Petitioner also asserts that there was.a ‘finding that the .reserve

_ system “is not presently. collectively agreed to.” . (Pet. Br., p. 9.)

But the District Court’s statement on this point ( 309 F. Supp. at 806

_ mn. 51; App. 75), that the Petitioner was “probably correct” that no. °

"agreement was in effect, was made before trial in the context of’

. Considering ’ Petitioner’s ‘injunction’ motion, without benefit of the

‘” uncontradicted. i ce discussed above, and does not constitute any

- . sort of “finding.“ fhe District Court did not rule on this issue after :

trial cxpeannn: of its disposition of this action under sh tecaoaa

4. ;

~ been brought to arbitration hy the Abnociation: under_ the ?

. Basic Agreement grievance procedyré seeking to vindicate

those rights and to obtain favorable interpretations of var-

ious contract clauses and rules. Petitioner’s argument that =

the contract clauses and rules’ which make up the ‘reserve

system are not collectively agreed to,-while all contract ~

“clauses and rules which provide player safeguards are col- .

__ lectively agreed to—even though .both were: incorporated

~ without distinction in the same Basic Agreement—is a °

totally illogical. and insupportable view of contract inter-

' pretation and the realities of a collective bargaining accord.

- The first Basic Agreement expressly recognized that the ,

. Players Association had compromised its differences ‘with

the clubs | on all subjects and had agreed that bargaining

. was af an end for the term of the agreement. (Def. Feeney |

"Ex. F,. pp. 1, 5. ) Both halves of that bargairi-—not just the

_ Association half—were ——- ”, -. Basic ne

ment. .

As the term of the first Basic ‘heitand siacas its ik

“the subject of the reserve system was on the parties’ bar-

gaining agenda. Bfit before negotiations ‘on the successor

, agreement moved beyond the preliminary stage, and before _

the .Basic Rerenet was terminated, this action had hee |

commenced. |

The record reveals that the, Players Assotiation has

se ot

ae position, But federal. labor policy precludes oe

-such a perversion of the antitrust laws. Congress has con-

sistently stated. that the goal of federal. ‘labor policy is the

settlement of. employer-employee. disputes through the ,

process of collective bargaining*® and this Court has.”

_ recognized that the policy of the federal labor statutes

- is to promote “the peaceful settlement of industrial dis-

putes. by subjecting labor-management controversies to

* Norris-LaGuardia. Act, 47 Stat. -70 ( 1932), 29: U,S.C. isi

National Labor Relations Act, 49 Stat. 449 (1935), 29 U.S.C. § 151;

Cola Relations Act 61 Stat: 136 (1947), 29 U.S.C.

2 7. 7 48

_ the mediatory influence of negotiation.” Fibreboard Paper .

Products Corp. v. NLRB, 379 U. S. 203, 211 (1964).

_ Moreover, this Court has specifically recognized that -

Congressional. labor policy. precludes judicial intervention

in collective bargaining under the guise of antitrust enforce-

ment. In Teamsters Union v. Oliver, 358° U. S. 283 (1959),

* the Court, holding. that a-state antitrust law could not be

applied to prevent the contracting parties from. carrying ——

— out their agreement upon a mandatory subject of: bargain- :

ing; stated: :

'. ewhthin the- area in which collective bargaining

was reqyired,-Congress. was not-concerned with the

= substantike terms upon which the ‘parties ‘agreed.

. The p ses of the [federal labor] Acts are

served by breging the parties together: and_estab-

_ lishing conditions under which they are to workout .

their a ” 358 U. S: at. 295.

4. ‘(Citations omitted |

The samé rationale was iii’ in Amalgamated

“respect. to the relationship of deral ‘antitrust laws

—~ to the federal labor acts. There ‘the jon.and a multi-

intoa ‘collective setfpitiialy agreement including

_ tion against the sale of fresh meat after 6:00 P.M”

‘Jewel Tea Company, which. sold a substantial amount of™.

pre-packaged meat, ‘ate’ to signing the agreement be-

eause, while-it ha ad the. salutary purpose of shortening the

working hours of. meat cutters, it ‘also prevented the eve- |

ning sale of meats pre- -packaged by butchers during the day.

- Under threat’ of a strike Jewel: TRea-was forced to sign the _

agreement, but: it then brought a Sherman Act action

against: not. only the union but also the multi-employer

_ ©

Oo for the ‘decision. But under either of

The Court held that the agreement was ar. from the :

Sherman Act, the majority splitting ‘3- to the reasons

expressed i in that case, the reserve system is. squarely with-

in the antitrust exemption covering labor relations matters.

The opinion of Mr. Justice Goldberg, in which Justices

Harlan and Stewart joined, stated a clear and easily ap-.

e two rationales.

plied rule that “collective bargaining activity concerning * 4

_ mandatory subjects of bargaining under the Labor Act is ~ -

not subject to’ the antitrust laws.” 381 U. S. at 710. The |

> , opinfon further stated:

“To hold that inbadaiore: sallecties, jarraining is

completely pratected would effectuate the congres-

sional policies of encouraging free .coiiective: bar-

gaining, ,subject only to specific restrictions con-:.

tained in the labor ‘laws, and of limiting judicial

intervention in labor. matters via the antitrust route: ~

—an intervention which necessarily under the Sher--

man Act places on judges and juries the determina-

tion of ‘what public policy in regard to ‘the indus-

trial struggle demands’.” 381 U. 8. ‘at 710. (Cita-

tions oinitted. ) | :

The | opinion Gutaend that the. history of the s develop.

ment of — labor Policy: | | |

. makes clear that Congress intended to foreclose

sader and juries from roaming at large in the area.

"of collective bargaining, under cover-of the antitrust _

laws, by inquiry into the purpose and motive of the

7 “employer and union bargaining on mandatory~

_jects.. Such roaming at large, experience shows, -..

leads to a. substitution. of judicial for congressional :

judgment: as to how collective bargaining should

operate.” 381 U. S. at 716. , , |

Under this opinion the reserve system, as a mandatory .

subject, is outside the réach of the Sherman Act.* —

- A somewhat-different approach was taken in the opinion

in Jewel Tea of Mr. Justice White, in which Chief Justice

Warren and: Mr. Justice Brennan joined. This opinion

would not, automatically prevent the application of the anti-’

~ .trust laws. simply because the subject matter in dispute is

a .mandatory subject . of collective: bargaining. It calls

instead for a comparative analysis of the impact of the

policies of both the federal antitrust and labor laws.. In

_ Jewel Tea, there was a plain anticompetitive effect on the

pleintiff, an employer member of the multi-employer bar-

gaining. unit, hecause. it was not permitted to market pre-

packaged meats except during the hours when its fellow |

employ er competitors engaged butchers. | _ There. was also. .

an adverse effect nbers of the publie | because they

were precluded ‘from purchasing prepackaged meats dur-

ing evening store hours. But the policy of the labor laws

was nevertheless found to be of greater Weight, and an im-

portant element in this determination was the fact that a’

' mandatory subject was involved. 381 U.S. at 689-91. -

eae

On the other hand, in United Mine Workers v. Penning-

ton, 381 U. S. 657 (1965), a.companion case to Jewel Tea,

' antitrust policy: was found (over the dissent of Justices

Goldberg, Harlan and Stewart) to outweigh labor policy.

In that case, a coal mining company had agreed with a .

union to increase wage levels; and the union. agreed to

impose those wage levels on the company’s smaller com- -

. petitors, regardless of their ability to pay, in order to

_ eliminate the smaller companies. The union’s interest in

' * Petitioner’s brief (p. 41) argues that this opinion does not ex-

empt “hard-core ‘anticompetitive commercial restraint’”, suggesting.

‘ that such restraints are present here. But the pages cited by Peti-

tioner:' (381 -U. S. at 732-33) refer explicitly to “nonmandatory

. subjects of bargaining” as distinguished from mandatory subjects —

such as the reserve system.

° » .

_ the mandatory subject of wages was : plain, bat the wage

arrangement was found to be primarily a conspiracy to -

curtail competition outside the bargaining area and thus

an antitrust violation. :

In this case,.as in Jewel Tea, the labor aspects predomi-

nate and labor policy should control. The. issue here is

purely between employers and employees, it is a mandatory

subject, it has been. dealt with in a collective bargaining ~ |

agreement,* and it has been the subject. of continued nego- -

tiations. The Players Association may not embrace ‘the

‘present system entirely, but it has bargained about it,

reached accord and lived under it, benefited from the sta-

bility-which it has engendered, and even now seeks only its

modification—not its destruction. (App. 188- 90.)

- Qn the other hand, the only effect of the reserve system

on competition is that it prevents-the baseball clubs from

freely acquiring each other’s employees. Unlike the situa-

tions in United Mine Workers v. Pennington, 381:U. S. 657

(1965) and United States vy. Women’s Sportswear Mfrs.

" Ass’n, 336 U. S. 460 (1949), which are. relied upon by Peti-

tioner, the effects here are on participants in the bargain- |

ing (as in Jewel Tea), and not on competitors of the

employer who are strangers | to the bargaining. There is

absolutely no antitrust issue here between ecqnomic com-

petitors outside of the bargaining area. In such circum-.

stances, labor policy should prevail over antitrust policy.

* Even if the reserve sy stem were not' part of a’ collective bargain-

_ing-agreement_it_would-make no difference. ‘Unilaterally adopted

- work rules are exempt from the antitrust laws as long as the stand- .

_ . ards of Jewel Tea are otherwise met.: Carroll v. Ayierican,Federa-

tion of Musicians, 372 F. 2d 155, 165 (2d Cir. 1967), aff'd in part

and rev'd in.part on other grounds, 391 U.S. 99 (1968). The test is

. concerned with the subject matter at issue, not whether bargaining -

= culminated i in agreement.

PXitioner, in his brief (pp. 40-42), dismisses the impor-

tance of Jewel Tea for the reason that Respondents are not

a labor organization, and thus presumably the “labor ex-

emption” cannot be applicable. This ignores the fact that

the labor exemption as an expréssion of the policy of the

federal labor acts is intended to protect the “practice and 7

: procedure”. of collective bargaining. National Labor Rela-

tions Act, Sec. 1, 49 Stat. 449 (1935), 29 U.S.C. § 151. This

goal can be accomplished only by exempting from antitrust

attack the subjects of collective bargaining, not merely one

of the parties. See Clune v. Publishers’ Ass’n of New York

City, 214 F. Supp. 520, 528-29 (S.D.N-Y. 1963), aff’d, 314

‘F.2d 343 (2d Cir. 1963). Petitioner’s one-sided view of the

labor ‘relations antitrust exemption, leaving one party vul- _

nerable and the other exempt, would plainly have a ‘chilling

effect on collective bargaining ‘i in general; and in particular

on the process of bargaining. in baseball ‘about ——

_ tions to the reserve system. -— : .

It should not be overlooked that the issue of the reserve .

system—the sole issue in this case—has been dealt with by

- the parties at the bargaining table in the much wider context

of the whole gamut of issues which have confronted them.

In this context, concessions on one issue are miade in: ex-

change for concessions by the other party elsewhere. New.

concepts can be adopted on a temporary-or limited basis to

test their viability.. Ultimately, matters are resolved by .

_the parties who must live and work on a. daily basis with |

' the results of their arrangements. It is considerations of

this sort. which underscore the wisdom of federal labor

policy and demonstrate why this is an appropriate case for

_ application of that policy i in preference to the policy o of the

_ antitrust laws. , ~ |

Bile _ | a

_ Baseball’s Reserve System Is Not Subject to State iy

Antitrust Regulation. _ “* sah

‘Neither the District Court nor the Court of Appeals _

found any merit in Petitioner’s. state law claims. Those

claims had been fully litigated as recently as 1966-when the

Wisconsin Supreme Court riled that the interstate business _

of baseball could not be regulated by state antitrust. law,

ecause such regulation was foreclosed by the Supremacy :

and Commerce Clauses of the United States Constitution.

* Wisconsin v. Milwaukee Braves, Inc., 31 Wis.2d 699, 144

'~ N.W. 2d°1, cert. denied, 385 U. S. 990 (1966). 7

As the District Court Observed in agreeing with the Wis- -

_ consin decision: | oe poe .

+. “Certain of the majority [of the Wisconsin Su- .

preme Court] were of the opinion that state regula- ~

tion was preempted because it would interfere with

. a Congressional policy permitting self-regulation for

baseball which they saw as implicit from the silence:

_ of Congress in this -particular context. Others in

the majority preferred the view that the national

character of organized baseball and the ‘necessary

inter-dependence of the teams requires uniformity

of regulation and that ‘since orgatiized baseball oper-

“ates widely in interstate commerce, the regulation,

. , if there is to be any, must be prescribed by Con-

" gress’.” 309 F. Supp. at 807 (App, 77).

~ The dual rationale of the Wisconsin case is fully appli-

cable and- controlling here. 7 -

Tf is a long-recognrized | imperative of the Commerce

:. Clause of the federal Constitution that state and local laws

' may not unreasonably. and ‘unduly burden interstate com--—

"merce. Petitioner argues that state antitrust regulation

would not be burdensome. But the District Court, after

7 considering the nature of the baseball industry: and.the pro-

' visions of the various state laws Petitioner attached to his

post-trial brief, found otherwise :.

”

‘The Court of Appeals agreéd, and rejected Petitioner’ s.

“We do not believe that the operation of baseball

and its reserve system i§ a matter which admits of”

diversity of treatment. State and local laws may not

unduly burden interstate commerce.

* oe

“As wé see it, application of various and diverse

state laws here would seriously interfere with league

play and the operation of organized pasepetr ” 316

‘F.Supp. at 280 (App. 111). °

suggestion that the burden could be avoided by —

with the strictest state standard: oe

“Professional baseball.clubs, althoanh existiag as.

- separate legal entities, are organized into so-called

. leagues for competitive play and are dependent on

the league playing schedule to further-the ends of

their sports competition. Therefore, it is the league

structure at which any state antitrust regulation.

. must be aimed if organized ‘professional baseball is

~not to be ‘severely fragmented. .On the one hand, it

- is apparent that each league extends over many.

states, and that, if state regulation were permissible, —

_ the internal structure of the leagues would require

- compliance with the strictest state antitrust standard.

The consequent extra-territorial effect of necessary _

compliance would be considerably more farreaching

than that in Southern Pacific Co. v. Arizona, supra.

On the other hand, we do not find that a state’s inter-

interest in health and safety regulation, is of par-

ticular urgency. - Hence, as the burden on interstate

commerce outweighs the states’ interésts i egulat-

ing baseball’s reserve system, the Comal clause

precludes the application here of state antitrust

law.” 443 F.2d at 267-68 (App. 130-31). {Footnote

omitt&.) . . a age See

_ This ruling is entirely consistent with the principles de-

veloped in Southern Pacific Co. v. Arizona, 325.U. S. 761

> (1945) in which this Court held that:

i {T]he states have not been deemed to have authority -

to impede -substantially the free flow of commerce

from state to state, or to. regulate-those phases of the

national commerce which, -because of the need of na-.

tional uniformity, demand that their regulation, if

any, bé prescribed by a single authority.” 325 U.S.

~ at 767. | ae

There can be no doubt, that uniformity of regulation is ~

required insofar as baseball is concerned. To permit appli- |

~ Cation of the. various state laws, as Petitioner seeks, would -

“seriously interfere” with the operation of baseball, because |

nonuniform regulation would make league ‘play impracti-

cable.* 316 F. Supp. at'280 (App. 111). -

In fact, there has never been any state antitrust regula-’

tion of baseball. Only the State of Wisconsin has attempted

- local regulation, and that attempt spawned nothing but con-.

flict and'disruption. The Wisconsin trial court ordered the

Braves baseball club to return to Milwaukee from Atlanta --

where it had relocated, the federal district court in Houston —

enjoined the enforcement of the order: of the Wisconsin

* The NLRB, in asserting jurisdiction over- baseball, noted that: -

“[I]t is apparént. that the Employer [baseball], whose operations

are so clearly national in scope, ought not. to have ‘its: labor rela-

tions problems subject to diverse state labor laws.” American Le,

and Ass'n of Umpires, 180 NLRB 190, 192 (1969). (Footnote

omitted. )

court, and a Georgia state court ordered the same club to

remain in Atlanta. City of Atlanta and Fulton County Rec-

. reation Authority v, Atlanta Braves, Inc., Case No. B-17638,.

_ Atlanta, Ga., Sup. Ct. (Feb. 8, 1966). The Wisconsin trial

court (or a board or. commission to be created by it) was

also prepared. to preside over the creation of a new major

league club and to determine the players to be assigned to’

- that new chib from other eclubs,-and the tonsideration to be

paid for-them, as well as other details of thé entry of the

new club into the baseball structure. Wisconsin v. Mil- -’

waukee Braves, Inc., 1966 CCH Trader§as. J 71,758 at pp.

82.411-12 (Wise. Cir. Ct., Civil Div., Mil. Cty., 1966). The

‘ power of state courts 1 in .this area, once unleashed, could be

disastrous.*. >

The Wisconsin attempt at repalatipe. property foreclosed .

by the Supreme Court of that state, indieates the kind of

state conflict which: is quite probable** and illustrates the

* Petitioner asserts in his brief (Pet. Br., p. 35) that the Court

of Appeals, below held that state antitrust regulation would not involve ~

any conflicts. On this point, he plainly. misreads that court’s opinion.

443 F. 2d. at 267 (App. 129-30). Moreover, Petitioner has himself

{in his brief to the Court of Appeals) indicated conflict by stating

that the rule of reason would apply te the reserve system in several

‘states while in others there would be a per se violation. .If Petitioner

- were right, a finding of reasonableness under the laws of the rule-of-

reason states would be in total and irreconcilable conflict with ‘those |

of the per se states. It should also be noted that the antitrust laws ~

of Texas, Missouri and Massachusetts appear to be inapplicable to.

businesses or because’ they are inapplicable to interstate commerce, |

and the Wisconsin Supreme ‘Court has specifically barred ‘the appli-

cation of Wisconsin antitrust law to baseball. >

: ” Petitioner contends that under present law actual conflict of regu-

lation must: be shown to invalidate state regulation under the Com-

merce Clause. (Pet: Br., p. 35.) But Petitioner is demonstrably °

wrong. in. this contention. The authorities all agree that - the

_ logical. possibility or probability of diverse or conflicting regula-

- tion must be considered in determining whether the Commerce Clause .

is a bat to state regulation. E.g., Colorado Anti-Discrimination —

Comm'n v. Continental Airlines, 372.U. S..714, 721 (1963); Cali-

57:

wisdom of the District Court’s determination that the appli-

cation of diverse state laws would “seriously interfere

with . ; . the operation of organized baseball.” 316 F.Supp. —

at 280 (App. 111). S tale S eee st

‘The other rationale of the Wisconsin decision provides a

separate controlling reason for the denial of state regula-

_. tory.power. That rationale is not, as Petitioner continues

“*- to assert, that the Sherman Act has pre-empted state anti-

_ trust law. “Rather, the rationale: is that the policy of

the federal government has been consistently to exempt .

baseball from the operation of all antitrust laws. There-

fore, Petitioner seeks to contradict federal policy when he

seeks state regulation of baseball. eee es

As the court in the Wisconsin case observed, in coming to

the conclusion that federal policy precluded state regu-

lation: | 1 th 3 3

“Some members of this Court, including the writer

of this opinion, conclude that the silence of Congress

in this context sufficiently impliés ‘such policy, and

that application and enforcement ofa state antitrust

law to decisions of the league as to the location of ~~

_. franchises and membership in “he league would ¢on- ..

’ flict with the national policy in this segment of inter-

t = commerce.” 31 °Wis. 2d at 730, 144 N. W. 2d -

at 17... cos a :

: The District’ Court echoed this analysis, indicating that . |

it was necessary to do so in order to give effect to the

“We believe it unlikely that the Supreme Court

would have held, as’ it did, that -baseball’s reliance

. interests precluded overruling Federal Baseball and

, that ‘Congress had no intention of including the busi-

' ness of baseball within the scope of federal antitrust

fornia v. Zook, 336 U. S. 725, 735 (1949); Head v. New Mexico.

: Board, 374 U.S. 424, 429 (1963). In any event, actual conflict arose -

in ‘the Wisconsin. case, and such conflict would be repeated if the.

Wisconsin rule were abandoned. | ; Teta _ |

oye ‘Nevertheless, Petitioner continues to argue that this Court |

laws,’ if. it considered baseball ea nea to itn

regulation. Enforcement of such state laws would

appear to produce a result inconsistent with the

objective of the federal antitrust laws interpreted by

the Supreme, Court as excluding the business of:

baseball.”,316 F.Supp. at 279 (App. 109).

in Toolson was inviting state regulation. Point I of this

brief is a complete answer to that argument. Petitioner —

K simply refuses to accept the fact that Toolson, Shubert —

| ‘more accomodative processes of- Ooygr

‘The reserve system has been Bey. by Congrei s to

represent the very.fabric of the interstate business of base-

_ ball.. "fo expose that reserve system to attack under state

‘ law would be to run ‘directly contrary “to the national pol

which is “so evident .in the history of Caner coh-

sideration

f. baseball.

below, Petition

laws should apply #hd\why; he merely generalized about

state law in the abstract as counterpoint to his federal anti-.

trust arguments. Despite this, both courts had before them

a complete record of the baseball industry and the texts of

numerous state antitrust laws. After considering the

‘impact these laws would have on the industry before. them,

. both courts concluded that state antitrust regulation was

impermissible. 22

Finally, Petitioner aheieohe to avoid the dual vellonsle

of the Wisconsin ease” and the opinidge of —_ courts

eH to undermine the. decisions of ‘the courts\

r complains that neither the District. Court ~ °

nor the Court: of, Appeals made a particularized inquiry |

into state law. But Petitioner never gave either court

. assistance, for he failed to assert at any’time which state’s

below, by comparing -baseball’s intricate web of leagues,

_ Schedules,- rules and regulations to} the operations of a

' “door-to-door seller” and -by implyikg that if baseball is

_ exempt from the state antitrust laws then the self-interest —

_ of the peddler might also enable him to avoid state regu-

lation. (Pet. Br., p. 37.) But this ignores the basis’ for,

and the clear language of,.this Court’s opinion in Southern

Pacific where the Court held that state regulation is per- . |

2 ‘mhissible so long as it “is local in character and effect, and —

its impact on the national commerce does not seriously in-

terfere with its operation : . .”, but not if “the need of na-. .

tional uniformity” requires that “regulation, if any, be pre-

_ scribed by a single authority.” 325 U. S’at 767... :

_ Baseball has demohstrated its obvious need for uniform |

a nationwide regulation and has shown that ‘serious inter-

ference would result from fragmentary and conflicting state _

regulation... Recognition of this by ‘the courts below, and —

their faithful application of the: principles of Southern

Pacific, can have no adverse impact’ on valid ‘state regula-

tory measures, in the field of antitrust law or otherwise.

s . ” For ‘the reasons ne stated, the decision of the court below’

Mula b be affirmed. samedi a

: as | ce my sit,

> “Jamuary 81, IM te

~“

7 % . X Wriac: ‘Pak &@ ALBAGHER | ‘Mark F. Hughes i"

is “1 Chase’ aris Riaza:: Louis: L. ‘Hoynes, Jr..

‘ier . New York, New York “10005 - ‘Robert J. Kheel

bi Bares, Hosterier: & Pxtrexson 3 Alexander H. Hadden

4 : 1956 Union Commerce Building ‘James P. Garner |

Ha: Se. Cleveland; Ohio. 44115. -.. Warren Daane 7

. . Of Counsel : > rn 20S Attorneys for all

PO ew tee ts os Respondents.

Ga Se ee ORNS a oe 2 Seppe Bowie K. Kulm,

barf oe PR: : te? ee st Commissioner: of

AS hore ot te PE Ae aes : : Baseball , fe

“Agnotb me Pinran = \» Paul A: Porter

_ << 1229 Nineteenth Street, Nowe Jerome I: Chapman

: Washington, D. Cc. ws an Douglas G. ‘Robinson. .

| OF Counsel a) : foo ts Attorneys for .

4 o Ce ws |. . Respowdent a

ve ow Ss” Bowie K. Kuhn,

Pee eg ky, Re 2 eee ed a Commissioner of.

| : | me ge ‘Baseball — |

x + ot F am we . . . . \ . _

ADDENDUWK

Ye : United States Constitution, Article I, Section 8

. The Congress shall have Power ae

pete Commerce with doreigh, Nations, and among

; ‘the several States, and with the Indian Tribes. .

United States Constitution, A Article V1; clause 2 7

This Constitution, and the Laws of the United States

_ which shall be made in Pursuance thereof; and all Treaties

made, or whiehshall be made, under the Authority of the

United States, shall be.the supreme Law of the Land; ._

®and the Judges in every State shall be bound thereby, any .

_. Thing in the: Constitution - or Laws of any State ta. the

‘Contrary en

Bl >.

ADDENDUM B_

“Set’ forth below .are those portions of the Uniform

Player’s Contract, Regulations. included as a part thereof,

and Major League Rules which constitute baseball’s reserve

system:

Uniform Player's Contract (Plaintif’s Ex. 3°):

The renéwl option

“10. (a) On or before January 15 (or if a Sun-

. day, then the next preceding business day) of the —

year next following the last playing season covered

-by this contract, the Club may tender to the Player.

a contract for the term of that year by mailing: the

same to the Player at his address following his signa-

ture hereto; or if none be given, then at. his last

address of record with the Club. If prior to the |

March 1 next succeeding said Ja anuary 15, the Player

- and the Club have not agreed upon the terms of such

. contract, then on or before 10 days after said March _

1, the: Club shall have the right by written notice to

the Player at said address’ to renew this contract for

the period ‘of one year on ‘the same terms, except.

that the amount ‘payable to the Player shall be such

_ as the Club shall fix in said notice; provided, how- |

ever, that said amount, if fixed by a Major League

Club, shall be an amount payable at a rate not less .°.”

than 80% of the rate — for the preceding

year. ee”

_ (b) The Club’s right to renew this contract, as pro-

vided in sub-paragraph (a) of this paragraph 10. and

* The Uniform Player’s Contract entered in ev idence as Pl. Ex. 3

was substantially modified by: the 1970 baseball collective bargainin

7 agreement. (Def. Feeney, Ex.. N, App. 418-47.): Footnote refer-

ences will therefore be made to indicate significant modifications...

_. ** The maximum salary cut permissible under this paragraph has

-. been reduced. A player’s salary may be cut only 20% in any one

year and 30% in any two consecutive years. (Def. Feeney Ex.

N, App. 422.) -

PT AN NTS

OAL TE OTN eT

CEA WUE) PSE TSS ORI LRTI ea een INURE MMIII TALE NIST NOT HF TA

/ 4 . . oe

CELUI IS ES

; ve

om.

— BQ

_ with the Club have been taken “into consideration in |

— the amount ‘peyene under paragraph 2

| hereof. ”

‘

Minimum salary requirements

“62. - Notwithstanding. the rate of payment stipn-

lated above, the minimum rate of payment to the

Player for each day of serv ice. on a Major League .

if a Player physically joins a Major. League Club .

on or after September 1,. he shall be paid-during -

~ September at the rate. of $8,500 per year for each

day of service until he has accumulated a total of

60 days of Major League service, after which ‘he

shall be paid at the rate of $10,000 per year for each

day of service. with such Major League Club.* -

Payment to the Player at the rate. stipulated above

shall be continued ‘throughout any period in which

-a Player is required to attend a regularly scheduled.

military encampment af the Reserve of. the Armed

Forces or of the National Guard — the Club’s *

‘ playing season.’

Requirement ‘that ‘player may ita for pa one club

“5. (a) The Player agrees that, while under con-.*

tract, and prior’to expiration of the Club’s right to

renew this contract, he will not play baseball other-

wise than for the Club, except that the Player may’

, participate in post-season games under the conditions.

prescribed in the Major League-Rules. Major League

Rule 18(b) is set forth on ‘page 4 hereof.” a

Participation i in other sports prohibited ve

“5. (b) The Player and ‘the Club. recognizé and

-agree that the Player’s participation in other sports

* The minimum salary has been increased as follows: fost the 1970

season, $12,000, for’the’ 197 1 season, $12;750 and for the ee season,

$13, 500. (Def. Feeney Ex. N, App. 419. se

ht ; . ° ,

~ . P : ' ’ . a 2 .

' ‘may impair or destfoy his ability and skill as a base-

ball player. ‘Accordingly the Player agtees that he

will not engage in professional boxing or wrestling; .

_ and that, except with the written consent of the Club, |

_- he-will not engage jn: any game or exhibition of

football, basketball, hockey or other. athletic sport.”*

Assignment of player contract

: “6. (a) The player agrees that this contract may

be assigned by the Club (and reassigned by any

assignee Club) to any other Club in aecordance with

“the Major League Rules and the Professional Base-

. (b) The amount stated ‘in paragraph 2 hereof ~

which is. payable to the Ptayer for the period stated

in paragraph 1. hereof shall not he diminished by

"any such assignment, except for failure to report

as provided in the next sub-paragraph ( )

promptly (as provided in the Regulations) upon

Teceipt of written notice from the Club of the assign-

ment of this contract. If the Player fails so to

* report, he shall not ‘be entitled to any: payment for

the period from the date he receives written notice

_Of assignment until he reports to the assignee Club.”

Termination of pléyer contract. |

cy f (b) The Cluh-may terminate this ,contract |

upon written notice to the Player (but only after

requesting and obtaining waivers of this contract

from all.other Major League Clubs) if the Player .

‘Shall: at any time: oP oe

(1) fail,"refuse or neglect .to conform his personal

° ‘

RRR AS MEK SRO Ree eet mF ce ROR RT aap ee nce pe OREN UAT

. . i

EONAR pee PAY bap peeeumet on a a ad YG bai haha aa ae ae v este i) Sat ast

RAO uS oulg Ep tte

. e';

conduct to the standards of good citizenship ‘and. -.

good sportsmanship or to keep himself in first-class

« * This provision has been modified to prohibit only sports “involv-

ing a .substantial risk of personal injury.” (Def. Feeney Fx.

-" N? App. 423:)

—@e 4

3s MENS tae emtN en weenie scr

" . . ‘ e s

| physical : condition or to ‘obey the Club’s ‘training

' ‘rules; or .

(2) fail, in the opinion of the Club’s pianapement

‘to exhibit sufficient skill or competitive ability to

qualify or continue as a member of the Club’s team ; ;

or. ;

(3) fail, refuse or neglect. to render his services: _

hereunder or in any other manner materially. breach

' this contract.

reason of the Player’s failure to render his services |

‘hereunder due to disability resulting directly from .

injury sustained in the course and within the scope

of his employment hereunder and written notice of

-such injury is given by the Player as provided in

the Regulations on page 4 hereof, the Player shall

- be entitled to receive his full salary for the season

‘ in which the injury was sustained, less all workmen’s -

compensation payments sal or payable by reason -.

of said “injury. |

(d) If this contract is terminated by the Club Aas a

ing the training season, payment bythe Club of.

the Player’s board, lodging, .and“expense allowance ~

during the training season to the date of termination

and of the reasonable: traveling expenses of the

Player, . indluding first-class jet air fare and’ meals

en route to his home city, and thé expert training .

| and coaching provided by: the Club.'to the Player.

+. during the training season shall be full peal to.

the Player.*

(e) If this ‘sient is terminated by the Club dur-

‘ing the playing season, then, except in the case ‘pro-.

the Player shall be entitled“to receive as full pay-—

ment hereunder such portion of the amount stipu-

_ * The Club must’ now pay 30 days termination pay toa player

‘terminated under subparagraph (b) (2) during the hide’ —

season. (App. 498.)

- lated in paragraph hereof as the number of days of

his: actual employment~in the Club’s playing“season

bears to the total number of days jn said soltom,

_\, provided, however, that if this contract is terminated ~~

under sub-paragraph (b) (2), of this paragraph 7 for

failure to exhibit sufficient skill or competitive ability,

e a

FOUL RES

t 2

: the Player shall be entitled to an additional amount i

equal to thirty (30) days payment at the rate stipa-|

lated in paragraph 2 hereof and ‘the: reasonable

traveling expenses of the Player including first-class

jet air fare and meals-en route to his home. city.*

—. (f) If the ‘Club’ proposes to terminate this con-

tract in accordance with sub-paragraph (b) of this

paragraph 7, the procedure shall be as follows:

: 2

(1) The Club shall request waivers ‘from all

other Major League Clubs. Such waiver request ~

must state that it-is for the purpose of terminating

this contract and it may not be withdrawn.

(2) Upon receipt of..the waiver request, any’

of this contract at:a waiver price of $1.00, the

priority of claims to be determined in accordance

with the Major League Rules. :

_ (3) If-this contract is so claimed, the Club shall, .

_ promptly and before any assignment, notify the

. Player that it had requested waivers for the pur-

pose of terminating this contract and that the con-

tract had been claimed... Soe

' _ (4) Within 5 days after receipt of notice of such -

claim, the Player shall be entitled, by written notice

.to the Club, to terminate this contract on the date.

of his notice of termination: If the Player fails so. _

to notify the Club, this eontract shall be assigned to.

the claiming Club. . - Bas

Ad rc LN ia ss Agha ohm

PRE

Oe COLNE OS Pipe ae

. ‘

* The termination pay provided .in subsection 7(e) has been in-» ..’

_ creased from 30 days to 60 days for the 1970 séason and, with

respect to any terminations occurring on or after May 15 in the

1972 season and thereafter, the player shall be entitled to the full

balance of salary payments due under his contract to the end of the.

season. (Def. Feeney Ex. N, App. 421; App. 498.) _

PETRY Sete OR INS PROM:

i’)

.(5) If the contract is ae claimed, the Club shall

promptly deliver written notice of termination to

the Player at the expiration of the waiver period.”

Incorporation of Major League Rules

“9. (a) The Club and the Player agree to accept,

abide by. and comply with all provisions of the Major

League Agreement, the Major League Rules, the

Rules or Regulations of the League of which the _

Club is a member, and the. Professional Baseball .

Rules, in effect on the date of this Uniform Player’s .

- Contract, which are not inconsistent -with the. pro-.

visions of this contract or the provisions of any

agreement between the Major League Clubs-and the

-, Major, League. Baseball’ Players Association, . pro-

_ vided ‘that. the Club, together with the’other Clubs’ ~

‘of the American. and National Léagues andthe Na-

_tional Assoqiation, reserves the right to modify, sup- ~

plement or repeal any provision of said Agreement,

Rules and/or Regulations in a manner not incon-

_ sistent with this contract or the provisions of any

_ then existing agreement between the twenty. Clubs

- and the. Major ‘League Baseball: Players Association.

_. A copy of thé Major League Agreement, the Major

"League Rules, the Rules or Regulations of the

League of which the Club is a member, and the Pro-

fessional Baseball Rules, as in effect on the date of

this Contract has been delivered to the — prior

to execution of this Contract.”

a Regulation 5: Discipline

“For violation by the Player of any regulation or

other provision of this contract, the Club may

impose a reasonable fine and deduct the amount. .

thereof from the Player’s salary or may suspend the. -

‘Player without: salary for a period not exceeding —

thirty days, or both. Written notice of the fine or

hos

i > o

suspension or both and the réasons therefore shall

in every case be given to the Player.”*. ,

Regulation 7: Reporting on assignment Pe fe _ q

In case of assignment of this contract the Player a

- Shall report promptly. to the assignee club within 72 — --

hours from the date he receives written notice from —

_ the Club of. such assignment, if the Player is then

not more than 1600. miles by most direct available:

railroad route from the assignee Club, plus an addi-

tional 24 hours for each additional 800 miles.”

alana

SOME Fron peetaser ea gemimeraeraye Fee ANIM RENAE: FEET I RCRA See cee RRR Enna tons

' ene

Major League Rules (Plaintiff's Ex.6):

‘The no tampering rule—Ridle 3(g)

“TaMPERING. To preserve discipline and ecompeti-

tion, and. to. prevent the enticement: of players,

- coaches, managers and umpires, there shall be no

_ negotiations or dealings respecting employment,

either present or prospective, between’ any player, —

coach or manager and any club other than the elub

_ with which he is under contract or acceptance of |

terms, or by which he is reserved, or which has the

player on its Negotiation List, or between any

sumpire and any league other than the league with —

_ which he is under contract or acceptance of terms,

~ unless the club or league with which he is connected -

shall have, in writing, expressly authorized’ such

' negotiations or dealings prior to- their commencé-

ment.” | . | .

The reserve lists—Rule 4-A(a)

“On or before November 15 in each year, each Major

League Club shall transmit to the Commissioner and _

to its Leagye President a list of not exceeding forty.

** Such discipline. may now be submitted by the player to arbitra-

. tion’ -before a third-party arbitrator in accordance with the terms

of the grievance procedure contained in the 1970 collective bargain-

'. ing agreement. (Def. Feeney Ex. N, App. 422, 429-44.)

. ‘

PORE aE EN Ee ee Oe ET RI

ss ‘

“| —

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eo.

(40). itive and éligible players, hein the netib

. desires to reserve for the ensuing season; and also ~

a list of all its players. who have.been promulgated |

‘as placed on the Military, ‘Voluntarily Retired, Re-

’- -stricted, Disqualified, Suspended or Ineligible Lists;

and: play ers signed under Rule 4 who do not count

‘in the club’s under control limit, On or'before No-

vember 30 the League, Presidet# shall transmit all

_ of said lists t6 the Secretary-Treasurer of the Exetu-.

tive Council, who shall thereupon promulgate same,

and thereafter: ‘no player on any list shall be eligible

to play fpr or negotiate with any other club until his

contract has been assigned or he has been released. -

_ The asbignment rule—Rule ee

“A ‘club may assign to another elub an existing

contract with a player. The player, upon receipt. of

written notice of such assignment, is by his contract

bound to serve the assignee. ~

The date of assignment shall be deena to be the

date upon which notice of assignment is delivered to.

the player.

- After the date of ‘such assignment all rights as f

; "obligations of the* assignor. clubs thereunder shall

become the rights and obligations of the assignee

club except as otherwise provided in Rule 4 and the -

_ assigneé club shall be liable to the plager for pay-

ments accruing from the date of assignment and

shall not be liable (but the assignor club shall remaizi

liable) for payments accrued —- to and metoting:

- that date.”

: The. rule seouiving player contracts to be uniform a

—Rule 3(a)

_“UntForM Contract. To ‘preserve morale and to

produce the similarity of conditions necessary to

- keen competition, the contracts between all clubs: and

their players in the Major — shall be in a.

‘ single form. which shall be prescribed by the mnie

League Executive Council. No club shall abs a

contract different from the uniform contract/or a .

/contract containing a non-reserve clause, except with

“ the written approval. the Commissioner, All con- ~~

tracts shall be -in-duplicate and: the player shall

agreement between.a'¢lub and a player not émbodied

in the contract shall subject both parties to disci-

‘pline; arid no. such agreement, whether written or

Verbal, shall be oe or enforced.” !

SRIRAM ONT SRL PAE OTN |

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.