Tuesday, January 06, 2004

Antitrust & Sports: Judging Landis

With all the attention paid this week to Pete Rose’s sorry situation, let’s take a moment to congratulate Paul Molitor and Dennis Eckersley for their election today to the Baseball hall of Fame. Over at ESPN.com’s group blog, Chuck Hirshberg suggests tossing some folks out of the Hall, starting with baseball’s first commissioner, former federal judge Keensaw Mountain Landis:
It's hard to say which Landis harmed more -- America's National Pastime, or its Common Decency * * * For two decades, this succubus sat on the federal bench, torturing the poor and defenseless. Anyone who displeased him was sentenced to jail. He even sentenced a U. S. Congressman, Victor Berger, to 20 years in Leavenworth for speaking in opposition to America's involvement in World War I. The Supreme Court overruled Landis on that one, but he was used to being overruled and later complained that "the laws of this country should have permitted me to have Berger lined up against the wall and shot." You can see why he appealed to baseball owners.

Virtually every hateful outrage in baseball history can be ascribed, in some measure, to Landis' INTEGRITY AND LEADERSHIP. It started around 1915, when competition from the upstart Federal League threatened to undo the notorious "reserve clause," which bound each player to his team like an indentured servant. The clause was laughably illegal, an obvious violation of the Sherman Antitrust Act, but Landis took care of that. First, he arranged a backroom deal in which the Federals were paid off and the monopoly restored; then, in a breathtaking masterstroke, Landis almost certainly used his influence to obtain baseball's antitrust exemption from the Supreme Court. With competition gone and players stripped of all legal protection, he was soon able to suspend Babe Ruth for having the audacity to play ball in the offseason. All the sordid details can be found in a marvelous scholarly paper called "Larceny and Old Leather" by Prof. Eldon Ham of Chicago-Kent Law School. Ham also pronounces Landis "the game's chief racist," and notes that it is no coincidence that desegregation occurred only after Landis' death.
Now, I’ve defended baseball’s antitrust exemption many times, not for its virtue as a stand-alone policy, but as a demonstration that antitrust laws don’t accomplish their stated objectives. The “reserve clause” was a bad business model. It was not, however, an “obvious violation” of the Sherman Act. The Sherman Act bans “[e]very contract [or] combination . . . in restraint of trade”. Read literally, this bans every act of commerce in the United States. That’s why the Supreme Court has spent nearly a century saying that the Sherman Act only bans “unreasonable” restraints; what constitutes “unreasonable” can’t be objectively defined. When baseball was exempt from the antitrust laws by the Supreme Court, the antitrust laws were still in their developmental years, and it was hardly clear how far the laws should be applied.

And keep in mind, the old reserve clause no longer exists, not because of antitrust enforcement, but because the players finally unionized and stood up to the owners. Unions, it should be noted, are also exempt from the antitrust laws, yet you rarely hear anyone calling for that exemption to be repealed.

That said, Hirshberg’s overall criticism of Landis is on the mark. He was an autocratic racist who hurt the game far more than he helped it. Even Landis’ signature accomplishment—banning the Chicago “Black Sox” players for life for taking money to fix the 1919 World Series—was tainted:
By far the most scandalous aspect of the Black Sox scandal was not the fix, but the legal proceedings that followed it. Three players confessed and eight were indicted, but before the case went to trial, the grand jury records, complete with confessions, went a-missin'. They turned up four years later in the possession of one George Hudnall, who just happened to be [White Sox owner] Charles Comiskey's lawyer. Apparently, someone, or several someones, had decided that a public trial would be bad for the baseball business. So the players were acquitted; but Landis, in a final insult to American justice, banned them from baseball for life, as he put it, "regardless of the verdict of juries."

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