MLB Commissioner Legal Advantages

The following article was written by Evan Zepfel.

The Major League Baseball Commissioner’s power stems from Article I of the MLB Constitution, which grants the commissioner the broad power to act ‘in the best interests of the game’ (§2).  The commissioner of baseball enjoys two significant legal advantages over the commissioners of the NFL and NBA: a judicially created antitrust exemption and a waiver of recourse that insulates his decisions from the court system.  Although the waiver of recourse has been limited in recent years by court rulings determining it to apply only to the commissioner’s role as an arbitrator, the courts have historically been generous in construing the powers of the MLB commissioner.  The commissioner also has broadly defined powers to ‘uphold the integrity of the game’ that have been judicially confirmed in Finley v. Kuhn and Milwaukee American Association v. Landis.

[supertagline]Commissioner Authority[/supertagline]

Article I, Section II of the Major League Baseball constitution provides the commissioner with the power to take actions ‘in the best interests of Baseball,’ although Section 5 of the constitution ensures that the commissioner cannot take any action within the realm of the Collective Bargaining Agreement (CBA).  Section 4 also limits the commissioner’s ‘best interests’ authority by preventing him from taking action that restricts the ability of clubs to vote on matters that require ‘joint league action’.

The MLB constitution specifically allows the commissioner to levy a fine of up to $5,000 or a 10-game suspension without the possibility of an appeal for on-field conduct.  Any greater suspension or fine allows the player to appeal the decision either to an impartial arbitrator or to a three-member arbitration panel.  All commissioner-assessed punishments are also subject to a ‘just cause’ standard of review.

The commissioner’s ‘best interests’ powers were judicially confirmed in Milwaukee American Association v. Landis and much later upheld in Finley v. Kuhn (1978), although the court’s decision in the second case limited the waiver of recourse present in the MLB constitution.  However, once the teams were allowed some judicial recourse, the commissioner’s powers began to decline (Chicago National League Ball Club v. Vincent).

The courts have intervened in instances where the commissioner has overstepped his bounds.  When Commissioner Bowie Kuhn banned women from the Yankees locker room, the court found such action to be a violation of equal protection (Ludtke v. Kuhn).  Similarly, when Commissioner Fay Vincent attempted to utilize his ‘best interests’ power to overrule the National League constitution by forcing a team move divisions without consent, the courts ruled in favor of the teams.

The commissioner is also restricted by Article XI, Section A(1)(b) of the MLB Collective Bargaining Agreement.  This section provides the commissioner with the right to overrule any disciplinary decision made by an arbitrator, and gives him the right to act as the final word on all punishment cases.  However, the section also provides that the Collective Bargaining Agreement would be re-opened if the commissioner were to ever utilize this power.   This clause has effectively prevented the commissioner from utilizing this authority, as it would likely be to the detriment of the league and the owners to re-open the CBA.

MLB’s antitrust exemption proved to be quite advantageous when dealing with ‘conduct detrimental’ cases, such as Pete Rose’s gambling incident.  When Rose admitted to betting on baseball and was given a lifetime ban from the sport in a settlement with Commissioner Bart Giamatti, he was unable to challenge the ban on antitrust grounds.  NBA and NFL players would not be so restricted, and have successfully used antitrust claims to challenge lifetime bans, although in one case the court found that the ban did not violate antitrust law (Molinas).

The antitrust exemption has also helped the MLB commissioner to maintain his power, since players and the MLBPA cannot challenge decisions on antitrust grounds.  However, many of the commissioner’s powers have been eroded due to collective bargaining.

Baseball’s waiver of recourse also provides an advantage for the commissioner, as his decisions are more likely to be upheld in courts than the decisions of the commissioners of other sports (Finley v. Kuhn).  Since the courts generally cannot review disciplinary decisions, the commissioner is not able to benefit from favorable case history and often faces rulings by arbitrators that diminish his punishments (Steve Howe).

[supertagline]NFL[/supertagline]

The commissioner of the National Football League (NFL) enjoys much stronger authority than the MLB commissioner in the area of player conduct and discipline.  The broadly defined Player Conduct Policy (PCP) and the lack of outside arbitration give the commissioner almost unlimited authority over the players, both in conduct on and off the field.  Although the NFL commissioner has the de jure right to act as the final word on all decisions involving player discipline, just as the MLB commissioner does, only the NFL commissioner is able to make decisions without the fear of appeal, as his rights are not limited by the re-opening of the CBA.

Unlike MLB and the NBA, the office of commissioner of the NFL is technically a neutral position, while the other two commissioners represent the owners.  It is his neutral position that allows him more power over player discipline.

[supertagline]NBA[/supertagline]

The commissioner of the National Basketball Association (NBA) enjoys many of the same powers as the MLB commissioner.  Commissioner’s decisions in each league are subject to review by an arbitrator, although the MLB commissioner is able to levy small fines and suspensions without review.

As mentioned earlier, the NBA does not enjoy the antitrust exemption that MLB does, which allows players to challenge the commissioner’s actions under antitrust law.  Such was the case in Molinas v. National Basketball Association, when Commissioner Maurice Poldoff suspended Jack Molinas indefinitely for gambling on games he was playing in.  Although Molinas lost his challenge in court five years later, he was able to successfully bring suit using antitrust claims.

The NBA commissioner’s powers regarding conduct ‘on the court’ are much more broadly defined than the MLB commissioner’s, as the NBA defines “conduct on the playing court” to be any action from the time the player arrives at the arena until he leaves.  Also, the league is able to make new rules concerning on-court conduct without approval from the NBPA, while in MLB such decisions must be negotiated.

The commissioner of baseball is able to levy small fines and suspensions against players without the fear of player appeal, while in the NBA, all fines and suspensions under $50,000 are appealable.  Similarly, while all fines and suspensions in the NBA are laid out in a list in Article 35 of the NBA constitution, the MLB constitution leaves such decisions to the discretion of the commissioner.

[supertagline]Changes in Authority Since “Black Sox Scandal”[/supertagline]

Following the ‘Black Sox’ scandal in 1919, Major League Baseball elected Kenesaw Mountain Landis as commissioner in 1920.  Landis’s powers as a ‘benevolent despot’ were confirmed by the court in Milwaukee American Association v. Landis, although this decision referred specifically to Commissioner Landis and it did not apply to later commissioners.  After Landis’ death, the owners sought to limit the commissioner’s power, by eliminating the waiver of recourse and limiting the ‘best interests’ power to deal only with conduct that expressly violated MLB rules.  These two changes were revoked in 1964, but the commissioner’s power was then limited by the advent of the MLBPA and first collective bargaining agreement in 1968.  Players were allowed to appeal disciplinary decisions through a grievance procedure with an impartial arbitrator, and the Seitz decision eliminating the reserve system quickly followed.  Finley v. Kuhn limited the waiver of recourse to matters in which the commissioner acted as an arbitrator, and the new Section 3, which was added to Article 1 of the Major League Constitution restricted the commissioner’s power to punish clubs to enumerated punishments.  Ludtke limited the commissioner’s authority over those not party to the CBA.  Multiple drug-related arbitration cases, including Howe and Vida Blue, demonstrated the arbitrator’s willingness to overrule the commissioner by reviewing disciplinary decisions using the ‘just cause’ standard.  In 1992, the commissioner was no longer recognized as neutral and his powers to affect collective bargaining were eliminated. The most recent CBA also presents specific limits to the commissioner’s power, including the possibility of arbitration for suspensions over 10 games and fines over $5,000, as well as the potential re-opening of the CBA if the commissioner overrules an arbitrator’s decision.  The ‘best interests’ power has been recently expanded, however, to include financial and moral issues.

[supertagline]“Antitrust Exemption” Legal Advantages for Commissioner[/supertagline]

Major League Baseball benefits from a judicially-created antitrust exemption that allows the league to escape antitrust scrutiny in the courts.  The exemption stems from a decision in Federal Baseball Club v. National League (1922).  The court’s decision in Federal Baseball held that the Sherman Anti-Trust Act was not applicable to the ‘business of baseball’, as baseball does not constitute interstate commerce.  Two later decisions, Toolson v. New York Yankees, Inc (1953) and Flood v. Kuhn (1972), upheld the ruling in Federal Baseball, although many believe that these decisions were based on faulty reasoning.  Major League Baseball has historically been hesitant to utilize its exemption, fearing that it might be overturned.

The antitrust exemption is most relevant when considering franchise relocation.  This exemption provides the MLB commissioner significantly greater power than the NFL and NBA commissioners with regards to franchise relocation.  Although the exemption no longer applies to MLB players, it still applies to the territorial claims implemented by MLB.  In order to approve an “expansion, sale, or transfer of control of a club,” the proposition must be approved by ¾ of the other clubs in the league, as well as a majority of clubs in the other league.  Similarly, Major League Rules specifically define the territory that each club controls by county.

Very specific rules exist for clubs in similar territories, including a minimum distance between ballparks as well as payments that must be made by a club moving into a territory to the club that already has rights to the territory.

Before the Flood Act was passed, the courts changed their definition of the antitrust exemption, and ruled that franchise relocation in baseball was subject to antitrust claims (Piazza and Tirendi v. MLB, Butterworth v. National League).  However, McCoy v. MLB returned to the earlier decisions of Federal Baseball and found that the exemption applied to the business of baseball as a whole, overturning the findings in Piazza and Butterworth.  Similarly, MLB v. Crist found that baseball’s decision to contract franchises was not subject to antitrust scrutiny, as it was part of the business of baseball as well.  Since the antitrust exemption was so broadly defined in the area of franchise relocation and contraction/expansion, challenges based on antitrust claims in MLB would be unsuccessful.

The state of Minnesota has prevented MLB from contracting the Minnesota Twins franchise in Metropolitan Sports Facilities Commission v. Minnesota Twins Partnership, using the Twins’ lease to keep them in the facility.  The Twins were not forced to pay rent, but the state made money by collecting from advertising revenue and concessions sales.  Thus, MLB was unable to contract the franchise due to the Twins’ contract with the Metrodome.

Other leagues, however, are forced to deal with antitrust claims in matters concerning franchise relocation.  The NFL’s rules regarding franchise relocation require a unanimous vote when a team wants to move within 75 miles of another team, and a ¾ majority at all other times.  However, when Al Davis’s Raiders were not allowed to move after losing a vote, he filed suit and won on antitrust grounds.  The courts, using rule of reason analysis, concluded that the NFL franchises were sufficiently independent and competitive, and that the effect of the rule restricting franchise relocation was inherently uncompetitive.  Major League Baseball, however, is able to uphold its franchise territorial claims because it does not have to worry about antitrust claims; rather, groups seeking to affect MLB’s decisions regarding franchise movement and expansion/contraction must use more creative methods than antitrust claims.

[supertagline]In Conclusion[/supertagline]

The judicial precedent upholding the commissioner’s authority cements his position much more strongly than the NBA or NFL commissioner.  How might the owners and commissioner be able to expand their ‘best interests’ and ‘conduct detrimental’ power in the future?

Leave a Reply

Your email address will not be published. Required fields are marked *