Second Circuit Rejects Major League Scouts’ Efforts to Take on Baseball’s Antitrust Exemption

For nearly a century, Major League Baseball (MLB) has enjoyed the benefit of an exemption from the antitrust laws. The controversial and often criticized exemption began with Justice Holmes’ opinion in Federal Baseball Club v. National League, 259 U.S. 200, 42 S.Ct. 465, 66 L.Ed. 898 (1922), in which Holmes reasoned that even though the baseball Leagues consisted of teams located in numerous states, the “giving of exhibitions of baseball” was not interstate commerce, rendering the Sherman Act inapplicable. Fifty years later, Curt Flood challenged MLB’s reserve clause after being traded from the St. Louis Cardinals to the Philadelphia Phillies, famously saying “I do not feel that I am a piece of property to be bought and sold irrespective of my wishes.” Curt Flood, The Way It Is, pp. 194-95 (!971). Flood lost his case at the Supreme Court.  In an opinion by Justice Blackmun, the Court noted the dubiousness of the exemption, but deferred to Federal Baseball Club based on stari decisis, concluding that “the remedy, if any, is indicated, is for congressional, and not judicial, action.” Flood v. Kuhn, 407 U.S. 258, 285 (1972).

A quarter of century later, Congress did step in, partially, by passing the Curt Flood Act of 1988 providing that Major League Baseball players are covered under the antitrust laws and granted the same antitrust rights as football and basketball players. But the act recognized a continuing exemption for all other aspects of the “business of organized baseball.” See 15 U.S.C. 26b. The most recent—and failed—effort to overturn or narrow the exemption was made by a group of Major League scouts. The Second Circuit affirmed the dismissal of the scouts’ case based on the exemption. A link to an article discussing the decision may be found here.