Business and Baseball

The twentieth century began in 1901. Teddy Roosevelt became President after William McKinley’s assassination by an anarchist at the Pan American Exposition in Buffalo NY. This would prove a challenging time for the Supreme Court and judicial review. By the end of the century the power and influence of the Court over life in America would far exceed the limits stipulated by the Baron de Montesquieu in The Spirit of the Laws or those predicted by the analysis of Alexander Hamilton in Federalist 78.
Normally, the most visible of the justices on the Court is the Chief Justice but in the period from 1902 till 1932, the one most quotable was Associate Justice Oliver Wendell Holmes Jr. Holmes Sr. was the famous physician, writer and poet, author of Old Ironsides and other entries in the K-12 canon. For his part, Holmes Jr. wrote Supreme Court decisions and dissents that have become part of the lore of the Court.
In 1905, the 5-4 Court ruled against the state of New York in one of its more controversial decisions, Lochner v. New York. Appealing to laissez-faire economics, the majority ruled that the state did not have the authority to limit bakery workers hours to 10 hours a day, 60 hours a week even if the goal was to protect the workers’ health and that of the public. The judges perverted the Due Process Clause of the 14th Amendment which reads.
    [Nor] shall any State deprive any person of life, liberty, or property, without due      process of law
They invoked this clause of a civil rights Amendment to rule that the New York law interfered with an individual baker’s right to enter into a private contract. In his dissent, Holmes attacked the decision for applying the social Darwinism of Herbert Spencer (coiner of the phrase “survival of the fittest”) to the Constitution; rather pointedly, Hughes wrote
    The Fourteenth Amendment does not enact Mr. Herbert Spencer’s Social Statics.
Over time, the anti-labor aspects of this decision were undone by legislation but its influence on the discussion of “due process” continues. It has given rise to the verb “lochnerize” which is defined thusly by Wiktionary:
    To read one’s policy preferences into the Constitution, as was (allegedly) done by the U.S. Supreme Court in the 1905 case Lochner v. New York.
The parenthetical term “alledgedly” presumably refers to Holmes’ critique. Two other contributions of Lochner to the English language are the noun “Lochnerism” and the phrase “The Lochner Era.”
In 1917, Congress passed the Espionage Act which penalized protests and actions that contested American participation in WWI. This law and its added amendments in the Sedition Act (1918) were powerful tools for suppressing dissent, something pursued quite vigorously by the Wilson administration. A challenge to the act followed quickly with Schenk v. United States (1919). The Court ruled in favor of the Espionage Act unanimously; Holmes wrote the opinion and created some oft cited turns of phrase:
    The most stringent protection of free speech would not protect a man in falsely shouting fire in a theatre and causing a panic.
    The question … is whether the words used … create a clear and present danger that .. will bring about the substantive evils that Congress has a right to prevent.
Holmes’ opinion notwithstanding, the constitutionality of the Espionage Act is still debated because of its infringement on free speech.
Schenck was then followed by another case involving the Espionage Act, Debs v. United States (1919). Eugene Debs was the union activist and socialist leader whom the Court had already ruled against in the Pullman case known as In re Debs (1895). Writing again for a unanimous court, Holmes invoked Schenck and ruled that the right of free speech did not protect protest against the military draft. Debs was sentenced to ten years in Prison and disenfranchised; that did not prevent him from running for President in 1920 – he received over 900.000 votes, more than 3% of the total.
Debs was soon pardoned by President Warren G. Harding in 1921 and even invited to the White House! The passionate Harding apparently admired Debs and did not approve of the way he had been treated by Wilson, the Espionage Act and the Court; Harding famously held that “men in Congress say things worse than the utterances” for which Debs was convicted. In 1923, having just announced a campaign to eliminate the rampant corruption in Washington, Harding died most mysteriously in the Palace Hotel in San Francisco: vampire marks on his neck, no autopsy, hasty burial – suspects ranged from a Norwegian seaman to Al Capone hit men to Harding’s long suffering wife. Harding was succeeded by Calvin Coolidge who is best remembered for his insight into the soul of the nation: “After all, the chief business of the American people is business.”
Although the Sedition Act amendments were repealed in 1921, the Espionage Act itself lumbers on. It has been used in more recent times against Daniel Ellsberg and Edward Snowden.
Today, Holmes is also remembered for his opinion in an anti-trust suit pitting a “third major league” against the established “big leagues.” The National League had been a profitable enterprise since 1876, with franchises stretching from Boston to St. Louis. At the top of the century, in 1901, the then rival American League was formed but the two leagues joined together in time for the first World Series in 1903. The upstart Federal League managed to field eight teams for the 1914 and 1915 seasons, but interference from the other leagues forced them to end operations. A suit charging the National and American leagues with violating the Sherman Anti-Trust Act was filed in 1915 and it was heard before Judge Kenesaw Mountain Landis – who, interestingly, was to become the righteous Commissioner of Baseball following the Black Sox Scandal of 1919. In Federal Court Landis dramatically slow-walked the Federal League’s case and the result was that different owners made various deals, some buying into National or American League teams and/or folding their teams into established teams; the exception was the owner of the Baltimore Terrapins franchise – the terrapin is a small turtle from Maryland, but the classic name for a Baltimore team is the Orioles; perhaps, the name still belonged to the New York Yankees organization since the old Baltimore Orioles, when dropped from the National League, joined the new American League in 1901 and then moved North to become the New York Highlanders in 1903, that name being changed to New York Yankees in 1913. Be that as it may, the league-less Terrapins continued to sue the major leagues for violating anti-trust law; this suit made its way to the Supreme Court as Federal Baseball Club v. National League.
In 1922, writing for a unanimous court in the Federal case, Holmes basically decreed that Major League Baseball was not a business enterprise engaged in interstate commerce; with Olympian authority, he wrote:
    The business [of the National League] is giving exhibitions of baseball. … the exhibition, although made for money, would not be called trade or commerce in the commonly accepted use of those words.
So, this opinion simply bypasses the Commerce Clause of the Constitution, which states that the Congress shall have power
    To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.
With this verdict, Major League Baseball, being a sport and not a business, was exempt from anti-trust regulations such. This enabled “the lords of baseball” to continue to keep a player bound to the team that first signed that player; the mechanism for this was yet another clause, the “reserve clause” which was attached to all the players’ contracts. The “reserve clause” also allowed a team (but not a player) to dissolve the player’s contract on 10 days notice. Obviously this had the effect of depressing player salaries. It also led to outrages such as Sal “The Barber” Maglie’s being blackballed for three seasons for having played in the Mexican League and such as the Los Angeles Dodgers’ treatment of Brooklyn great, Carl “The Reading Rifle” Furillo. Interestingly, although both were truly star players, neither is “enshrined” in the Baseball Hall of Fame; Furillo, though, is featured in Roger Kahn’s classic The Boys of Summer and both Furillo and Maglie take the field in Doris Kearns Goodwin’s charming memoir Wait Till Next Year.
The Supreme Court judgment in Federal was mitigated by subsequent developments that were set in motion by All-Star outfielder Curt Flood’s courageous challenge to the “reserve clause” in the suit Flood v. St Louis (1972); this case was decided against Flood by the Supreme Court in a 5-3 decision that was based on the precedent of the Federal ruling; in this case justice Lewis Powell recused himself because he owned stock in Anheuser-Busch, the company that owned the St. Louis franchise – an honorable thing to do but something which exposes the potential class bias of the Court that might lie behind decisions favoring corporations and the powerful. Though Flood lost, there were vigorous dissents by Justices Marshall, Douglas and Brennan and his case rattled the system; the players union was then able to negotiate for free agency in 1975. However, because of the anti-trust exemption, Major League Baseball still has much more control over its domain than do other major sports leagues even though the NFL and the NCAA benefit from legislation exempting them too from some anti-trust regulations.
In 1932 when Franklin D. Roosevelt became President, the U.S. was nearly three years into the Great Depression. With the New Deal, the congress moved quickly to enact legislation that would serve both to stimulate the economy and to improve working conditions. In the First Hundred Days of the Roosevelt presidency, the National Industrial Recovery Act (NIRA) and the Agricultural Adjustment Act (AAA) were passed. Both were then declared unconstitutional in whole or in part by the Court under Chief Justice Charles Evans Hughes: the case Schechter Poultry Corp. v. United States (1935) was brought by a Kosher poultry business in Brooklyn NY (for one thing, the NIRA regulations interfered with its traditional slaughter practices); with United States v. Butler (January 6, 1936) the government filed a case against a processor of cotton in Illinois who contested paying “processing and floor-stock taxes” to support subsidies for the planters of cotton. The first decision invoked the Commerce Clause of the Constitution; the second invoked the Taxing and Spending Clause which empowers the Federal Government to impose taxes.
In reaction, Roosevelt and his congressional allies put together a plan in 1937 “to pack the court” by adding six additional justices to its roster. The maneuver failed, treated with opprobrium by many. However, with the appointment of new justices to replace retiring justices, Roosevelt soon had a Court more to his liking and also by then the New Deal people had learned from experience not to push programs that were too clumsy to pass legal muster.
The core programs launched by the AAA were continued thanks to subsequent legislation that was upheld in later cases before the Court. The pro-labor part of the NIRA was rescued by the National Labor Relations Act (aka the Wagner Act) of 1935. The act which protected labor unions was sponsored by Prussian-born Senator Robert F. Wagner Sr.; his feckless son Robert Jr. was the Mayor of New York who enabled its two National League baseball teams to depart for the West Coast in 1957 – two teams that between them had won the National League pennant every fall for the previous six seasons, two teams with stadium-filling heroes like Willie Mays and Sandy Koufax; moreover, the Dodgers would never have been able to treat fan-favorite Carl Furillo so shabbily had the team still been in Brooklyn: he would not have been dropped mid-season which precisely made him ineligible for the pension of a 15 year veteran, would not have had to go to court to obtain money still due him and would not have been blackballed from organized baseball.

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