Baseball season will soon be here. Not only is this good news for sports fans, it also provides a unique opportunity to better understand how Congress and the federal courts both do, and do not, regulate interstate commerce.
This is a subject frequently in the news these days due to the Supreme Court’s oral arguments on the constitutionality of the individual mandate in the Affordable Care Act. Professional baseball, after all, is a billion dollar industry. It is played across state lines, with owners and unions often in contentious disputes. Fans are willing to pay thousands of dollars a year for both tickets and related merchandise. In other words, baseball is a business, and big business, at that.
The U.S. Constitution, specifically the Commerce Clause, provides Congress with the authority to regulate commerce among the States. Throughout American history, the federal courts (and, specifically, the Supreme Court) have redefined what activities constitute, or have a substantial effect on, interstate commerce. In the late 19th century and the early 20th century, Congress respectively, utilizing its power under the Commerce Clause, passed the Sherman Act and the Clayton Act. These antitrust laws continue to play a vital role in ensuring that companies don’t unfairly compete and that monopolies don’t harm consumers.
When it comes to antitrust law, professional baseball is a distinct anomaly. In many ways, it remains the exception that proves the rule. Throughout its history, because of both Supreme Court rulings and Congressional inaction, baseball has been largely exempt from the antitrust laws. In an early case, Federal Baseball (1922), the Court ruled that professional baseball, even though played across state lines, was not interstate commerce and thus not subject to the antitrust laws. The Supreme Court, after 1937, would expand the notion of what constituted interstate commerce. In a 1972 case, Flood v. Kuhn, the Court acknowledged that baseball was indeed interstate commerce. Baseball has nevertheless remained substantially exempt from the antitrust laws. Indeed, in 1998, with the passage of the Curt Flood Act, Congress went so far as to codify baseball’s broad antitrust exemption, stating that only baseball’s labor and employment matters were to be subject to antitrust law. Scholars have debated the reasons why both Congress and the Supreme Court have treated professional baseball differently. Maybe there truly is something so unique about the economics of professional baseball that the sport requires an antitrust exemption.
So when you go out to the ballgame and root for the home team, just remember you’re not just watching a sport, you’re indirectly witnessing how Congress and the Supreme Court have decided to give the great American pastime a unique status in the American economy. Whether the Supreme Court will give a distinct status to the insurance market remains yet to be determined. Supporters of the individual mandate argue that there is something so unique about insurance that makes it different from other aspects of the economy. Play ball, indeed!