Baseball Before the Bar, Part One

It is remarkable how much the law has shaped major league baseball. From just after the end of the Civil War to the most recent Justice of the Supreme Court, baseball has repeatedly ended up in the courts. I’d like to recap a few cases that have critically shaped the game that we know and love today. For today, I’d like to look at four key cases from 1866-1922.

Baseball’s first great case never happened. As Verdun has recently documented, professionalism, i.e. getting paid to play baseball, began with Lip Pike of the Philadelphia Athletics in the late 1860’s. In 1866, the National Association of Base Ball Players planned to hold a hearing into allegations that Pike was on a regular salary. However, everyone knew that he was, and that a conviction would lead to Pike leaving the league and possibly taking the league’s most prominent team with him. So how did baseball solve the problem? No one showed up to the hearing. With that key non-case, baseball became a professional sport.

The next great case involves the formation of two serious major leagues. In 1901, Nap Lajoie was one of the most prominent players in the National League. However the newly formed American League was throwing money around, so Lajoie left the Phillies to take up a better contract with the crosstown Athletics. The Phillies sued, and the two teams traded successful injunctions. In the end they compromised and both teams told Lajoie he could go to hell, i.e. Cleveland. In return, Lajoie could not cross into the state of Pennsylvania without the possibility of arrest. What do we get from this case? Two things: First, Lajoie was not a true free agent. The Phillies, at the least, barred him from playing with the A’s after the 1901 season (until he got the joy of playing on one of the worst teams ever, the 1916 A’s). Second, the American League became a serious player in professional baseball, as the courts recognized that its contracts had value and that the Cleveland Compromise was an acceptable resolution to the matter.

Now that baseball had two leagues, why not three? In 1914, the Federal League formed, and in 1915 it collapsed. During its brief existence, though, it launched two separate and incredibly important lawsuits. Both lawsuits by the Federal League accused the American and National Leagues of antitrust violations. To make it simple, according to the Federal League the other leagues were forming an illegal monopoly in the professional baseball industry, and they should be forced to allow competition from other groups like the Federal League. Lawsuit #1 was launched by a portion of the leagues owners, was delayed by renowned judge Kennesaw Mountain Landis, and was eventually settled when the owners were bought out as the league failed. This case gave us new owners of the St. Louis Browns and Chicago Cubs, and it was an important step toward baseball’s first commissioner.

The second Federal League lawsuit was pursued by the owner of the Baltimore Terrapins, an owner who was not given money in the other case’s disposition. This case went all the way to the Supreme Court, and it was decided in Federal Base Ball Club of Baltimore, Inc. v. National League of Professional Base Ball Clubs et al. In 1922, the Supreme Court ruled that baseball was exempt from antitrust laws because, to quote Justice Holmes, “business is giving exhibitions of base ball, which are purely state affairs.” That is, antitrust laws passed by the United States Congress governed matters of interstate commerce only, as that was the explicit Constitutional power under which Congress acted. Baseball games were intrastate commerce and thus exempt from federal regulation. This case cemented the two league system, was a cornerstone of the reserve clause, and was critical in keeping baseball’s essential shape for the next 50 years.

Tomorrow, come back to hear about the cases that brought about free agency, ended a strike, and gave us the game we have today.

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