Toolson v. New York Yankees, Inc.

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Toolson v. New York Yankees
Seal of the United States Supreme Court.svg
Argued October 13, 1953
Decided November 9, 1953
Full case nameGeorge Earl Toolson v. New York Yankees, Inc., et al.
Citations346 U.S. 356 ( more )
74 S. Ct. 78; 98 L. Ed. 64; 1953 U.S. LEXIS 2680; 1953 Trade Cas. (CCH) ¶ 67,602
Case history
Prior Cert. to the United States Court of Appeals for the Ninth Circuit
Congressional intent to maintain antitrust exemption for professional baseball created by prior Court presumed as a result of congressional inaction since that decision; proper remedy is thus legislative action
Court membership
Chief Justice
Earl Warren
Associate Justices
Hugo Black  · Stanley F. Reed
Felix Frankfurter  · William O. Douglas
Robert H. Jackson  · Harold H. Burton
Tom C. Clark  · Sherman Minton
Case opinions
Per curiam
DissentBurton, joined by Reed
Laws applied
Sherman Antitrust Act

Toolson v. New York Yankees, 346 U.S. 356 (1953), is a United States Supreme Court case in which the Court upheld, 7–2, the antitrust exemption first granted to Major League Baseball (MLB) three decades earlier in Federal Baseball Club v. National League . It was also the first challenge to the reserve clause which prevented free agency, [1] and one of the first cases heard and decided by the Warren Court.

Supreme Court of the United States Highest court in the United States

The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all federal and state court cases that involve a point of federal law, and original jurisdiction over a narrow range of cases, including suits between two or more states and those involving ambassadors. The Court holds the power of judicial review, the ability to invalidate a statute for violating a provision of the U.S. Constitution. It is also able to strike down presidential directives for violating either the Constitution or statutory law. However, it may act only within the context of a case in an area of law over which it has jurisdiction. The Court may decide cases having political overtones, but it has ruled that it does not have power to decide non-justiciable political questions.

United States antitrust law collection of federal and state government laws, which regulates the conduct and organization of business corporations, generally to promote fair competition for the benefit of consumers

In the United States, antitrust law is a collection of federal and state government laws that regulates the conduct and organization of business corporations, generally to promote competition for the benefit of consumers. The main statutes are the Sherman Act of 1890, the Clayton Act of 1914 and the Federal Trade Commission Act of 1914. These Acts serve three major functions. First, Section 1 of the Sherman Act prohibits price-fixing and the operation of cartels, and prohibits other collusive practices that unreasonably restrain trade. Second, Section 7 of the Clayton Act restricts the mergers and acquisitions of organizations that would likely substantially lessen competition. Third, Section 2 of the Sherman Act prohibits the abuse of monopoly power.

Major League Baseball Professional baseball league

Major League Baseball (MLB) is a professional baseball organization and the oldest of the major professional sports leagues in the United States and Canada. A total of 30 teams play in the National League (NL) and American League (AL), with 15 teams in each league. The NL and AL were formed as separate legal entities in 1876 and 1901, respectively. After cooperating but remaining legally separate entities beginning in 1903, the leagues merged into a single organization led by the Commissioner of Baseball in 2000. The organization also oversees Minor League Baseball, which comprises 256 teams affiliated with the major league clubs. With the World Baseball Softball Confederation, MLB manages the international World Baseball Classic tournament.


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

United States Congress Legislature of the United States

The United States Congress is the bicameral legislature of the federal government of the United States, and consists of two chambers: the House of Representatives and the Senate. The Congress meets in the United States Capitol in Washington, D.C. Both senators and representatives are chosen through direct election, though vacancies in the Senate may be filled by a gubernatorial appointment. Congress has 535 voting members: 435 representatives and 100 senators. The House of Representatives has six non-voting members representing Puerto Rico, American Samoa, Guam, the Northern Mariana Islands, the U.S. Virgin Islands, and the District of Columbia in addition to its 435 voting members. Although they cannot vote in the full house, these members can address the house, sit and vote in congressional committees, and introduce legislation.

Stanley Forman Reed American judge

Stanley Forman Reed was a noted American attorney who served as United States Solicitor General from 1935 to 1938 and as an Associate Justice of the U.S. Supreme Court from 1938 to 1957.

Harold Hitz Burton United States federal judge

Harold Hitz Burton was an American politician and lawyer. He served as the 45th mayor of Cleveland, Ohio, as a U.S. Senator from Ohio, and as an Associate Justice of the Supreme Court of the United States.


George Earl Toolson was a pitcher with the Newark Bears in 1949, a farm team for the New York Yankees in the AAA-class International League. [2] He believed he was good enough to play in the major leagues, if not for the Yankees then for another team. But due to the reserve clause in his and every other player's contract, under which teams reserved rights to a player for a year after the contract expired, he was effectively bound to the talent-rich Yankees and could not negotiate a new contract with another team. [1]

Pitcher the player responsible for throwing ("pitching") the ball to the batters in a game of baseball or softball

In baseball, the pitcher is the player who throws the baseball from the pitcher's mound toward the catcher to begin each play, with the goal of retiring a batter, who attempts to either make contact with the pitched ball or draw a walk. In the numbering system used to record defensive plays, the pitcher is assigned the number 1. The pitcher is often considered the most important player on the defensive side of the game, and as such is situated at the right end of the defensive spectrum. There are many different types of pitchers, such as the starting pitcher, relief pitcher, middle reliever, lefty specialist, setup man, and the closer.

The Newark Bears were a Minor League Baseball team in the International League, beginning in 1917 at the Double-A level. They played in the International League through the 1949 season, except for 1920 and part of the 1925 season. In the Bears' last four seasons in the International League (1946–1949), they were a Triple-A team, the highest classification in minor league baseball. They played their home games at Ruppert Stadium in what is now known as the Ironbound section of Newark; the stadium was demolished in 1967. The 1932, 1937, 1938, and 1941 Bears were recognized as being among the 100 greatest minor league teams of all time.

New York Yankees Baseball team and Major League Baseball franchise in the Bronx, New York, United States

The New York Yankees are an American professional baseball team based in the New York City borough of the Bronx. The Yankees compete in Major League Baseball (MLB) as a member club of the American League (AL) East division. They are one of two major league clubs based in New York City, the other being the National League (NL)'s New York Mets. The Yankees franchise began play in the 1901 season as the Baltimore Orioles. In 1903, Frank Farrell and Bill Devery purchased the franchise after it ceased operations and moved it to New York City, renaming the club the New York Highlanders. The Highlanders were officially renamed the Yankees in 1913.

When the Newark franchise was dissolved prior to the 1950 season, he was demoted by the Yankees' organization to the Binghamton Triplets, an A-class team within its minor league system. [1] He refused to report and instead filed suit, arguing the reserve clause was a restraint of trade and that baseball should not be exempt from antitrust laws.

The Binghamton Triplets were a minor league baseball team in Binghamton, New York, affiliated with the New York Yankees ; the team also had brief affiliations with the Kansas City Athletics (1962–1963) and the Milwaukee Braves (1964). The Triplets played in the former New York–Pennsylvania League (1923–1937), the Eastern League, and the current New York–Penn League (1964–66). They won league championships in 1929, 1933, 1935, 1940, 1944, 1949, 1952, 1953, 1965, and 1967. The Triplets folded in 1968, and the city was without a team until the current Class AA Binghamton Mets began play in 1992.

Restraint of trade

Restraints of trade is a common law doctrine relating to the enforceability of contractual restrictions on freedom to conduct business. It is a precursor of modern competition law. In an old leading case of Mitchel v Reynolds (1711) Lord Smith LC said,

it is the privilege of a trader in a free country, in all matters not contrary to law, to regulate his own mode of carrying it on according to his own discretion and choice. If the law has regulated or restrained his mode of doing this, the law must be obeyed. But no power short of the general law ought to restrain his free discretion.

Baseball antitrust exemption

In 1922, in an opinion by Justice Oliver Wendell Holmes, Jr., a unanimous court held in Federal Baseball Club that professional baseball did not meet the definition of interstate commerce under the Constitution and the Sherman Act because, although teams traveled between states from game to game, that travel was "incidental" to the business and not an essential aspect, since all the revenue was generated from the actual games. [3]

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

In 1947, Commissioner of Baseball Happy Chandler was sued by former New York Giants outfielder Danny Gardella, who argued that the five-year ban Chandler imposed on players who, like Gardella, had jumped briefly to the rival Mexican League was an unfair use of monopoly power and that the Federal Baseball Club decision no longer applied. A preliminary ruling in favor of the baseball commissioner was reversed by the Second Circuit Court of Appeals, returning the case to the lower court for trial. In 1949, Chandler settled with Gardella for a reported $65,000. Gardella initially sought $300,000, [4] settling for less on his lawyers' advice he would lose on appeal to the Supreme Court.

Commissioner of Baseball Chief executive of Major League Baseball

The Commissioner of Baseball is the chief executive of Major League Baseball (MLB) and the associated Minor League Baseball (MiLB) – a constellation of leagues and clubs known as organized baseball. Under the direction of the Commissioner, the Office of the Commissioner of Baseball hires and maintains the sport's umpiring crews, and negotiates marketing, labor, and television contracts. The commissioner is chosen by a vote of the owners of the teams. The current commissioner is Rob Manfred, who assumed office on January 25, 2015.

Happy Chandler Governor of Kentucky, Baseball Commissioner

Albert Benjamin "Happy" Chandler Sr. was an American politician from Kentucky. He represented Kentucky in the U.S. Senate and served as its 44th and 49th governor. Aside from his political positions, he also served as the second Commissioner of Baseball from 1945 to 1951 and was inducted into the Baseball Hall of Fame in 1982. His grandson, Ben Chandler, later served as congressman for Kentucky's Sixth District.

Outfielder defensive position in baseball

An outfielder is a person playing in one of the three defensive positions in baseball or softball, farthest from the batter. These defenders are the left fielder, the center fielder, and the right fielder. As an outfielder, their duty is to catch fly balls and/ ground balls then to return them to the infield for the out or before the runner advances, if there is any runners on the bases. As an outfielder, they normally play behind the six players located in the field. By convention, each of the nine defensive positions in baseball is numbered. The outfield positions are 7, 8 and 9. These numbers are shorthand designations useful in baseball scorekeeping and are not necessarily the same as the squad numbers worn on player uniforms.

In 1951, Brooklyn congressman Emanuel Celler, an advocate for strong antitrust enforcement, had chaired a special Judiciary Committee subcommittee on monopoly power, which had looked into baseball, among other things. It had been strongly critical, but took no action because of the pending court cases from other Mexican League players. [5]

Trial and appeal

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

Among the lawyers working on the case for baseball was Bowie Kuhn, [6] then of the prestigious firm Willkie Farr & Gallagher, who would later himself become baseball commissioner and the respondent in Flood v. Kuhn , the next case to challenge the reserve clause. When the case reached the Supreme Court, the Boston Red Sox filed an amicus curiae brief in support of the Yankees, their bitter rival. [7] Since the Second Circuit, in reinstating Gardella's challenge, had called Federal Baseball "an impotent zombi" in light of recent Supreme Court antitrust decisions, [8] baseball did not expect the Court to rule in its favor.

Opinion of the Court

A one-paragraph unsigned per curiam opinion was followed by a longer dissent by Justice Harold Hitz Burton, joined by Stanley Forman Reed.


After briefly restating the conclusion of Federal Baseball Club, the majority continued:

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 understanding that it was not subject to existing antitrust legislation ... [I]f there are evils in this field which now warrant application to it of the antitrust laws, it should be by legislation. Without reexamination of the underlying issues, the judgments below are affirmed ... so far as that decision determines that Congress had no intention of including the business of baseball within the scope of the federal antitrust laws. [9]


Burton listed a number of aspects of contemporary baseball—the extensive farm system, broadcasting revenues, national advertising campaigns and even its reach beyond the borders of the United States—to justify his statement that "it is a contradiction in terms to say that the defendants in the cases before us are not now engaged in interstate trade or commerce as those terms are used in the Constitution of the United States and in the Sherman Act". He also cited a report by a House subcommittee that had come to a similar conclusion.

He conceded "the major asset which baseball is to our Nation, the high place it enjoys in the hearts of our people, and the possible justification of special treatment for organized sports which are engaged in interstate trade or commerce". [10] But while it was certainly within Congress's power to repeal or specifically enact an antitrust exemption for baseball, it had not done so, "and no court has demonstrated the existence of an implied exemption from that Act of any sport that is so highly organized as to amount to an interstate monopoly or which restrains interstate trade or commerce". He concluded "The present popularity of organized baseball increases, rather than diminishes, the importance of its compliance with standards of reasonableness comparable with those now required by law of interstate trade or commerce." [11]

Subsequent developments


Within the next few terms, Toolson's logic was criticized directly and indirectly by other justices, including some who had been in the majority, in dissents from opinions in which the Court held that it was specific to baseball and that even other professional sports weren't covered.

Chief Justice Earl Warren admitted, writing for the majority two years later when denying boxing the exemption, that "this Court has never before considered the antitrust status of the boxing business. Yet, if it were not for Federal Baseball and Toolson, we think that it would be too clear for dispute." [12] Dissenters Felix Frankfurter and Sherman Minton, who were in the Toolson majority, were harshly critical. "It would baffle the subtlest ingenuity to find a single differentiating factor between other sporting exhibitions ...and baseball insofar as the conduct of the sport is relevant to the criteria or considerations by which the Sherman Law becomes applicable to a 'trade or commerce.'", the former wrote. "I cannot translate even the narrowest conception of stare decisis into the equivalent of writing into the Sherman Law an exemption of baseball to the exclusion of every other sport different not one legal jot or tittle from it." [13] Minton, in his dissent, added:

When boxers travel from State to State, carrying their shorts and fancy dressing robes in a ditty bag in order to participate in a boxing bout, which is wholly intrastate, it is now held by this Court that the boxing bout becomes interstate commerce. What this Court held in the Federal Baseball case to be incident to the exhibition now becomes more important than the exhibition. This is as fine an example of the tail wagging the dog as can be conjured up. [14]

Another two years passed, and Radovich v. National Football League came before the Court. The circumstances of professional football at the time were almost identical to those of baseball, yet the Court ruled that the antitrust exemption was specific to the latter. Tom C. Clark, writing for a majority of six, defended the Toolson decision as preferable to the alternative: "[M]ore harm would be done in overruling Federal Baseball than in upholding a ruling which, at best, was of dubious validity" [15] and admitted "were we considering the question of baseball for the first time upon a clean slate, we would have no doubts." [16]

Frankfurter again expressed his incredulity. "...[T]he most conscientious probing of the text and the interstices of the Sherman Law fails to disclose that Congress, whose will we are enforcing, excluded baseball — the conditions under which that sport is carried on — from the scope of the Sherman Law, but included football", he said. [17] He was joined in a separate opinion by John Marshall Harlan II signed by then-new justice William Brennan: " I am unable to distinguish football from baseball under the rationale of Federal Baseball and Toolson, and can find no basis for attributing to Congress a purpose to put baseball in a class by itself." [18]

Flood v. Kuhn

In 1970, St. Louis Cardinals star center fielder Curt Flood decided to refuse a trade to the Philadelphia Phillies and challenge the reserve clause again. Due to his stature as a player, his case attracted wide attention. It reached the Court in 1972. Although Flood lost, widespread support for his suit paved the way for free agency.

William O. Douglas, who had been on the Toolson majority, had ruled in a 1971 emergency appeal from a suit brought by Spencer Haywood that basketball wasn't exempt, either, and suggested he was reconsidering his role in Toolson: "the decision in this suit would be similar to the one on baseball's reserve clause which our decisions exempting baseball from the antitrust laws have foreclosed." [19] The following year he was the only justice from the Toolson court still sitting when Flood v. Kuhn was heard, and made his change of mind explicit in a footnote to his dissent: "While I joined the Court's opinion in Toolson ... I have lived to regret it; and I would now correct what I believe to be its fundamental error." [20]

In that case's majority opinion, Harry Blackmun conceded that the facts no longer supported the exemption and that baseball was indeed interstate commerce, [21] but echoed Clark in suggesting that the consequences of overturning the previous decisions would be worse than letting it stand. Chief Justice Warren Burger agreed in a short concurrence that also indicated his acceptance of Douglas's regret. [22]

Sports business historian Andrew Zimbalist attributes the unexpected outcome to "a game of cat and mouse" between Congress and the Court:

The Congress did not pass a bill lifting baseball's exemption because it thought it had already been lifted by the 1948 Gardella decision. The Supreme Court affirmed the Holmes decision because it thought Congress had given its sanction to the exemption by not passing new legislation in 1951. [23]

Much of the criticism of Toolson over the years has viewed it as the middle term of the sequence that begins with Federal Baseball Club and ends with Flood, and considers it in that context. Its embrace of stare decisis and presumption of congressional inaction as a justification, is notably at odds with the position [24] that Justice Felix Frankfurter took when writing for the Court in a 1940 trust-law case, Helvering v. Hallock , where prior flawed decisions had not been corrected through legislative action, that "it would require very persuasive circumstances enveloping Congressional silence to debar this Court from re-examining its own doctrines" [25]

One critic, antitrust expert Kevin McDonald of Jones Day, singles out the 1953 case for having truly created the antitrust exemption by reading congressional intent into Holmes' original opinion. After quoting the per curiam's closing sentence, he writes:

With that baseless assertion, the baseball exemption was born. As we have seen, Federal Baseball said nothing about the Congress of 1890 intentionally excluding baseball from the Sherman Act. It is as if the majority in Toolson imagined Senator Sherman announcing that "today we enact the Magna Carta of the working class so that all American business will respect the right of consumers to free and open competition ... that is, um, except for organized baseball, of course." Indeed, what did it mean to affirm Federal Baseball "so far as that decision determines that Congress had no intention of including ... baseball within the ... antitrust laws", when Federal Baseball said no such thing? [26]

Lower courts, he said, took the court's reasoning to mean that other professional team sports were also exempt, forcing the justices to clarify that it only applied to baseball, and criticize their earlier ruling, in order to sustain decisions that football and boxing were interstate commerce and within the scope of antitrust law. [27]

Effect on baseball

Toolson's career was over, and MLB resumed its status quo ante . But the underlying issues remained, and a decade later began to be addressed when players unionized as the Major League Baseball Players Association, with free agency one of many goals.

Two years later, baseball held its first amateur draft, ending the system whereby wealthier and successful teams like the Yankees were able to keep their farm teams stocked with talent the way they had with Toolson, not only as insurance against player injuries but to prevent opposing teams from signing them. [28] That ended the continuous domination of the Yankees.

Despite legal and judicial criticism and embarrassment, baseball's antitrust exemption remains in effect. Players in the major leagues won free agency with the Seitz decision in 1975, and the 1998 Curt Flood Act gave major league players, but not others involved in baseball, rights under the antitrust laws. [29] [30] But for players in the minor leagues, like Toolson, the reserve system persists, and they are still bound to the organization that initially signed them.

See also

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  1. 1 2 3 McKelvey, G. Richard (2001). For It's One, Two, Three, Four Strikes You're Out At The Owners' Ball Game: Players Versus Management in Baseball. Jefferson, North Carolina: McFarland. p. 52. ISBN   0-7864-1192-9. Toolson had been placed on the ineligible list after he refused to accept a demotion from Triple-A Newark to Binghamton of the Eastern League, which was a lower classification team. Major league clubs would keep top talent in the minors as protection against being caught short-handed if top talent was injured. Toolson, who probably could have played for a number of other major-league teams, found himself in that situation. He believed he was being denied the opportunity to play in the majors because of the depth of the Yankees' farm system.
  2. "George Toolson". Retrieved November 4, 2016.
  3. Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs, 259 U.S. 200 et seq., Holmes, J.
  4. Koppett, Leonard (1970-01-17). "Koppett Views". The Sporting News. p. 6.
  5. Duquette, Jerold J. (1999). Regulating the National Pastime: Baseball and Antitrust. Westport, Connecticut: Greenwood Publishing Group. p. 48. ISBN   0-275-96535-X. The Chairman of this subcommittee was New York Rep. Emanuel Celler, a longtime advocate of strong antitrust enforcement ... The subcommittee chose to pass the buck to the judiciary ... The committee felt that, ...while many aspects of professional sports leagues were indeed unique, the differentiation of essential the non-essential practices was a job best left to the courts."
  6. Kuhn, Bowie (1988). Hardball: The Education of a Baseball Commissioner. Lincoln, Nebraska: University of Nebraska Press. p. 19. ISBN   0-8032-7784-9. I worked on the Toolson case during its progress through the courts, counting myself fortunate to be dealing with a matter of such crucial importance to the game.
  7. As Boston American League Base Ball Company, the team's corporate name. 349 U.S. 356.
  8. Gardella v. Chandler, 172 F.2d 402, 408-09 (1949) (Frank, J., concurring).
  9. Toolson v. New York Yankees, 346 U.S. 356, 357, per curiam.
  10. Id., Burton J., dissenting.
  11. Id. at 364-65.
  12. United States v. International Boxing Club of New York , 348 U.S. 236, 240 (1955), Warren, C.J.
  13. Id., 248-250, Frankfurter J., dissenting.
  14. Id. at 251, Minton, J., dissenting.
  15. Radovich v. National Football League , 352 U.S. 445, 450, Clark, J.
  16. Id. at 452.
  17. Id. at 455, Frankfurter, J., dissenting.
  18. Id. at 456, Harlan, J., dissenting.
  19. Haywood v. Nat'l Basketball Assn. , 401 U.S. 1204, 1205, Douglas, J.
  20. Flood v. Kuhn , 407 U.S. 258, 286n1, Douglas, J., dissenting.
  21. Id., at 282-284, Blackmun, J.
  22. Id. at 285-86, Burger, C.J., concurring.
  23. Zimbalist, Andrew S. (2004). May The Best Team Win: Baseball Economics and Public Policy. Washington, D.C.: Brookings Institution Press. p. 19. ISBN   0-8157-9728-1.
  24. Tismpris, William (Summer 2004). "A Question of (Anti)trust: Flood v. Kuhn and the Viability of Major League Baseball's Antitrust Exemption" (PDF). Richmond Journal of Law and the Public Interest. 8 (1): 69–86. Archived from the original (PDF) on September 8, 2006. Retrieved 2008-02-27. Indeed, prior to Toolson, the Court had expressed skepticism of basing its decision on congressional inaction. For instance, in Helvering v. Hallock the Court discussed stare decisis with regard to statutory interpretation ...
  25. Helvering v. Hallock, 309 U.S. 106 (1940).
  26. McDonald, Kevin D.; There's No Tying in Baseball: On Illinois Tool and the Presumption of Market Power in Patent Tying Cases; September 2005;; 7 retrieved March 4, 2008.
  27. Ibid., 8.
  28. Chadwin, Dean (2000). Those Damn Yankees: The Secret Life of America's Greatest Franchise. Brooklyn, New York: Verso. p. 109. ISBN   1-85984-283-6. The reserve system has always been justified by the owners as necessary to maintain competitive balance. In fact it has enabled the best teams to squirrel away talented players in the minors where they can serve as insurance in case of injury, and more importantly be kept off the rosters of potential rivals
  29. Pub. L. 105-297, 112 Stat. 2824