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S. HRG. 107–427 THE APPLICATION OF FEDERAL ANTITRUST LAWS TO MAJOR LEAGUE BASEBALL HEARING BEFORE THE COMMITTEE ON THE JUDICIARY UNITED STATES SENATE ONE HUNDRED SEVENTH CONGRESS SECOND SESSION FEBRUARY 13, 2002 Serial No. J–107–59 Printed for the use of the Committee on the Judiciary ( U.S. GOVERNMENT PRINTING OFFICE 79–393 DTP WASHINGTON : 2002 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001 VerDate Feb 1 2002 12:33 May 20, 2002 Jkt 000000 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 C:\HEARINGS\79393.TXT SJUD4 PsN: CMORC COMMITTEE ON THE JUDICIARY PATRICK J. LEAHY, Vermont, Chairman EDWARD M. KENNEDY, Massachusetts ORRIN G. HATCH, Utah JOSEPH R. BIDEN, JR., Delaware STROM THURMOND, South Carolina HERBERT KOHL, Wisconsin CHARLES E. GRASSLEY, Iowa DIANNE FEINSTEIN, California ARLEN SPECTER, Pennsylvania RUSSELL D. FEINGOLD, Wisconsin JON KYL, Arizona CHARLES E. SCHUMER, New York MIKE DEWINE, Ohio RICHARD J. DURBIN, Illinois JEFF SESSIONS, Alabama MARIA CANTWELL, Washington SAM BROWNBACK, Kansas JOHN EDWARDS, North Carolina MITCH MCCONNELL, Kentucky BRUCE A. COHEN, Majority Chief Counsel and Staff Director SHARON PROST, Minority Chief Counsel MAKAN DELRAHIM, Minority Staff Director (II) VerDate Feb 1 2002 12:33 May 20, 2002 Jkt 000000 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 C:\HEARINGS\79393.TXT SJUD4 PsN: CMORC C O N T E N T S STATEMENTS OF COMMITTEE MEMBERS Page DeWine, Hon. Mike, a U.S. Senator from the State of Ohio ................................ 33 Feingold, Hon. Russell D., a U.S. Senator from the State of Wisconsin ............. 28 Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah ............................ 22 Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont .................... 1 Sessions, Hon. Jeff, a U.S. Senator from the State of Alabama .......................... 86 Thurmond, Hon. Strom, a U.S. Senator from the State of South Carolina ........ 88 WITNESSES Brand, Stanley M., Vice President, Minor League Baseball, Washington, D.C. 35 Butterworth, Hon. Robert A., Attorney General of Florida, Tallahassee, Florida ................................................................................................................... 4 Dayton, Hon. Mark, a U.S. Senator from the State of Minnesota ....................... 18 DuPuy, Robert A., Executive Vice President and Chief Legal Officer, Office of the Commissioner of Major League Baseball, New York, New York .......... 23 Fehr, Donald M., Executive Director and General Counsel, Major League Baseball Players Association, New York, New York ......................................... 29 Nelson, Hon. Bill, a U.S. Senator from the State of Florida ................................ 20 Swanson, Lori R., Deputy Attorney General of Minnesota, St. Paul, Min- nesota .................................................................................................................... 9 Wellstone, Hon. Paul D., a U.S. Senator from the State of Minnesota ............... 14 QUESTIONS AND ANSWERS Responses of Stanley M. Brand to questions submitted by Senator Leahy ........ 67 Responses of Stanley M. Brand to questions submitted by Senator Hatch ........ 70 Responses of Robert A. Butterworth to questions submitted by Senator Leahy 73 Responses of Robert A. Butterworth to questions submitted by Senator Hatch 74 Responses of Robert A. DuPuy to questions submitted by Senator Leahy ......... 76 Responses of Robert A. DuPuy to questions submitted by Senator Hatch ......... 78 Responses of Robert A. DuPuy to questions submitted by Senator Sessions ..... 83 Responses of Lori R. Swanson to questions submitted by Senator Leahy .......... 85 Responses of Lori R. Swanson to questions submitted by Senator Hatch .......... 84 SUBMISSION FOR THE RECORD Wolff, Miles, Commissioner of Northern League Baseball ................................... 89 (III) VerDate Feb 1 2002 12:33 May 20, 2002 Jkt 000000 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 C:\HEARINGS\79393.TXT SJUD4 PsN: CMORC VerDate Feb 1 2002 12:33 May 20, 2002 Jkt 000000 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 C:\HEARINGS\79393.TXT SJUD4 PsN: CMORC THE APPLICATION OF FEDERAL ANTITRUST LAWS TO MAJOR LEAGUE BASEBALL WEDNESDAY, FEBRUARY 13, 2002 U.S. SENATE, COMMITTEE ON THE JUDICIARY, Washington, DC. The Committee met, pursuant to notice, at 10:12 a.m., in room SD–226, Dirksen Senate Office Building, Hon. Patrick J. Leahy, Chairman of the Committee, presiding. Present: Senators Leahy, Feinstein, Hatch, Specter, DeWine, Sessions, and Brownback. OPENING STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM THE STATE OF VERMONT Chairman LEAHY. The Judiciary Committee is starting a little late, and I do not know if they have explained why all the lights are going on. There is a series of roll call votes, and it is going to require a rotating panel up here, but we will try to do it in a way that accommodates the witnesses as well as possible. I see Mrs. Kaludi in the audience, and she is more aware of how these lights work than anybody else here and can explain it to any- body who needs an explanation. Senator Hatch is on his way, and he suggested that we begin, so I will. This week, spring training begins for the major league baseball teams. This winter, besides the usual discussion about players’ trades and signings and team prospects for the coming season, baseball fans in Minnesota, Florida, Montreal, and many other communities have been on a rollercoaster ride that began with the baseball commissioner’s November 6 announcement that two unnamed teams would not be playing this year. In 1998, Congress culminated decades of hearing on labor strife and other problems in major league baseball when we enacted the Curt Flood Act. Senator Hatch was the lead sponsor of that meas- ure, and I was the principal cosponsor. It was a bipartisan effort to clarify the law. The principal purpose of the law was to make sure that Federal antitrust laws apply to the relationships between major league baseball owners, teams, and players. Clarifying the law was intended to contribute to an atmosphere in which team owners and players would resolve their differences through collective bargaining. Whether the parties are successful in reaching a negotiated agreement remains an open question as we meet today. (1) VerDate Feb 1 2002 12:33 May 20, 2002 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 C:\HEARINGS\79393.TXT SJUD4 PsN: CMORC 2 In 1997 and 1998, I observed that the stops and starts of the leg- islative journey toward passage of the Curt Flood Act would have tried the patience of Job, and I complimented the then Chairman for staying the course and getting the job done. The statute, the Curt Flood Act, uses language suggested, as I recall, by the major league team owners to make clear that the Act did not ‘‘change the application of the antitrust laws’’ to any other aspect of major league baseball. I thought then and I think now that it was appropriate to adopt that provision and begin with the assumption that no industry, no company, and no person is above the law. The Curt Flood Act did not create or confirm any Federal anti- trust immunity but was written in terms of Federal antitrust laws in fact applying to major league baseball. Major league baseball’s claim to a unique antitrust exemption arose not from an act of Congress but from a decision by the United States Supreme Court 80 years ago that has since been dis- credited. In the subsequent case of Flood versus Kuhn, the Su- preme Court explicitly limited its holding to the reserve system and reserved an antitrust law exemption for that reserve system rely- ing as justification on the judicial doctrine of stare decisis, the prin- ciple that judicial decisions once made should be respected and upheld. Justice Blackmun noted that the Supreme Court had invited Congress to pass a statute to change the law if it chose, that Con- gress had not acted and that Congress had, by its ‘‘positive inac- tion,’’ acquiesced in what he described as a legal anomaly and aber- ration. It was against this judicial backdrop that in 1998 Congress fi- nally did act and eliminated the judicially created exception pre- served in limited form by Justice Blackmun in the Flood case. It was appropriate that we did it in a law named for the player who sacrificed his career to raise the issue. Our bill did not question that the antitrust laws apply to major league baseball just as they apply to professional football, basket- ball, ice hockey, soccer, and all professional sports. Professional sports are a business, and the laws that apply to other businesses apply to them. There is no longer any basis in the law for some general, free-floating baseball antitrust exemption, nor has such a special antitrust exemption been justified. When the Committee was engaged in hearings in 1995 that led to passage of the Curt Flood Act, after the work stoppage in 1994 and the lamentable and historic cancellation of the World Series, David Cone, an outstanding major league pitcher, testified and asked this question: If baseball were coming to Congress today to ask us to provide a statutory antitrust exemption, would we? That is the question I repeat today. Does anybody anywhere in this country think that if baseball was coming in and raising for the first time an antitrust exemption that this Congress or any Congress would grant it for them? Of course not. What about major league baseball, as distinct from other profes- sional sports and businesses, entitles it to special rules of law? I cannot think of it. VerDate Feb 1 2002 12:33 May 20, 2002 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 C:\HEARINGS\79393.TXT SJUD4 PsN: CMORC 3 In my view, the heavy burden of justifying any exception from the rule of law is and should be squarely on the proponents of any antitrust exemption.

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