United States v. International Boxing Club of NY, Inc., 348 U.S. 236 (1955)
United States v. International Boxing Club of NY, Inc., 348 U.S. 236 (1955)
236
75 S.Ct. 259
99 L.Ed. 290
This is a civil antitrust action brought by the Government in the United States
District Court for the Southern District of New York. The defendantsthree
corporations and two individualsare engaged in the business of promoting
professional championship boxing contests.1 The Government's complaint
charges that the defendants, in the course of this business, have violated 1
and 2 of the Sherman Act.2 After this Court's decision in Toolson v. New York
Yankees, Inc., 346 U.S. 356, 75 S.Ct. 78, 98 L.Ed. 64, the defendants moved to
dismiss the complaint. The District Court granted the motion in reliance upon
the Toolson decision and Federal Baseball Club of Baltimore v. National
League of Professional Baseball Clubs, 259 U.S. 200, 42 S.Ct. 465, 66 L.Ed.
898.3 The case, together with United States v. Shubert, 75 S.Ct. 277, is here on
direct appeal under the Expediting Act, 15 U.S.C. 29, 15 U.S.C.A. 29.
'(b) arrange and maintain training quarters in states other than those in which
the promoters reside; '(c) lease suitable arenas, and arrange other details for
boxing contests, particularly when the contests are held in states other than
those in which the promoters reside;
'(e) negotiate for the sale of and sell rights to make and distribute motion
pictures of boxing contests to the 18,000 theatres in the United States;
'(f) negotiate for the sale of and sell rights to broadcast and telecast boxing
contests to homes through more than 3,000 radio stations and 100 television
stations in the United States; and
'(g) negotiate for the sale of the sell rights to telecast boxing contests to some
200 motion picture theatres in various states of the United States for display by
large-screen television.'
10
The promoter's receipts from the sale of television, radio, and motion picture
rights to championship matches, according to the complaint, represent on the
average over 25% of the promoter's total revenue and in some instances exceed
the revenue derived from the sale of admission tickets.4 The complaint alleges
that the defendants have restrained and monopolized this trade and commerce
'the promotion, exhibition, broadcasting, telecasting, and motion picture
production and distribution of professional championship boxing contests in the
United States'through a conspiracy to exclude competition in their line of
business. The conspiracy, it is claimed, began in 1949 with an agreement
among the defendants and Joe Louis, then heavyweight champion of the world,
that Louis would resign his title, that he would procure exclusive rights to the
services of the four leading title contenders in a series of elimination contests
which would result in the recognition of a new heavyweight champion, that he
would also obtain exclusive rights to broadcast, televise, and film these
contests, and that he would assign all such exclusive rights to the defendants.
The defendants have allegedly sought to maintain and effectuate this conspiracy
12
The question is perhaps a novel one in that this Court has never before
considered the antitrust status of the boxing business. Yet, if it were not for
Federal Baseball and Toolson, we think that it would be too clear for dispute
that the Government's allegations bring the defendants within the scope of the
Act. A boxing matchlike the showing of a motion picture, United States v.
Crescent Amusement Co., 323 U.S. 173, 183, 65 S.Ct. 254, 259, 89 L.Ed. 160,
or the performance of a vaudeville act, Hart v. B. F. Keith Vaudeville
Exchange, 262 U.S. 271, 43 S.Ct. 540, 67 L.Ed. 977, or the performance of a
legitimate stage attraction, United States v. Shubert, 348 U.S. 222, 75 S.Ct.
277, 'is of course a local affair.' But that fact alone does not bar application of
the Sherman Act to a business based on the promotion of such matches, if the
business is itself engaged in interstate commerce or if the business imposes
illegal restraints on interstate commerce. Apart from Federal Baseball and
Toolson, it would be sufficient, we believe, to rest on the allegation that over
25% of the revenue from championship boxing is derived from interstate
operations through the sale of radio, television, and motion picture rights.5
Compare United States v. Yellow Cab Co., 332 U.S. 218, 225226, 67 S.Ct.
1560, 1564, 91 L.Ed. 2010; Times-Picayune Publishing Co. v. United States,
345 U.S. 594, 602, note 11, 73 S.Ct. 872, 877, 97 L.Ed. 1277; Mandeville
Island Farms v. American Crystal Sugar Co., 334 U.S. 219, 227235, 68 S.Ct.
996, 10011006, 92 L.Ed. 1328; United States v. Frankfort Distilleries, 324
U.S. 293, 297298, 65 S.Ct. 661, 663664, 89 L.Ed. 951; United States v.
Women's Sports-wear Mfrs. Ass'n, 336 U.S. 460, 464, 69 S.Ct. 714, 716, 93
L.Ed. 805; United States v. Employing Plasterers Ass'n, 347 U.S. 186, 189, 74
S.Ct. 452, 454, 98 L.Ed. 618; and cases collected in the Shubert opinion. See
also Currin v. Wallace, 306 U.S. 1, 10, 59 S.Ct. 379, 384, 83 L.Ed. 441;
Wickard v. Filburn, 317 U.S. 111, 127128, 63 S.Ct. 82, 9091, 87 L.Ed.
122.
13
Notwithstanding these decisions, the defendants contend that they are exempt
from the Sherman Act under the rule of stare decisis. They, like the defendants
in the Shubert case, base this contention on Federal Baseball and Toolson. But
they would be content with a more restrictive interpretation of Federal Baseball
and Toolson than the defendants in the Shubert case. The Shubert defendants
argue that Federal baseball and Toolson immunized all businesses built around
the live presentation of local exhibitions. The defendants in the instant case
argue that Federal Baseball and Toolson immunized only such businesses as
involve exhibitions of an athletic nature. We cannot accept either argument.
14
For the reasons stated in the Toolson opinion and restated in United States v.
Shubert, 348 U.S. 222, 75 S.Ct. 277, Toolson neither overruled Federal
Baseball nor necessarily reaffirmed all that was said in Federal Baseball.
Instead, '(w)ithout re-examination of the underlying issues,' the Court adhered
to Federal Baseball 'so far as that decision determines that Congress had no
intention of including the business of baseball within the scope of the federal
anti-trust laws.' (346 U.S. 356, 357, 74 S.Ct. 79) We have held today in the
Shubert case that Toolson is not authority for exempting other businesses
merely because of the circumstance that they are also based on the performance
of local exhibitions. That ruling is fully applicable here.
15
Moreover, none of the factors underlying the Toolson decision are present in
the instant case. At the time the Government's complaint was filed, no court
had ever held that the boxing business was not subject to the antitrust laws. 6
Indeed, this Court's decision in the Hart case, less than a year after the Federal
Baseball decision, clearly established that Federal Baseball could not be relied
upon as a basis of exemption for other segments of the entertainment business,
athletic or otherwise. Surely there is nothing in the Holmes opinion in the Hart
case to suggest, even remotely, that the Court was drawing a line between
athletic and nonathletic entertainment. Nor do we see the relevance of such a
distinction for the purpose of determining what constitutes 'trade or commerce
among the several States.' The controlling consideration in Federal Baseball
and Hart was, instead, a very practical onethe degree of interstate activity
involved in the particular business under review. It follows that stare decisis
cannot help the defendants here; for, contrary to their argument, Federal
Baseball did not hold that all businesses based on professional sports were
outside the scope of the antitrust laws. The issue confronting us is, therefore,
not whether a previously granted exemption should continue, but whether an
exemption should be granted in the first instance. And that issue is for
Congress to resolve, not this Court. See United States v. South-Eastern
Underwriters Ass'n, 322 U.S. 533, 561, 64 S.Ct. 1162, 1178, 88 L.Ed. 1440.
16
The issue was, in fact, before Congress only recently. In 1951, four identical
bills were introduced in Congressthree in the House and one in the Senate
forbidding the application of the antitrust laws 'to organized professional sports
enterprises or to acts in the conduct of such enterprises.'7 Extensive hearings on
the three House bills were conducted by the Subcommittee on Study of
Monopoly Power of the Committee on the Judiciary; no hearings were held on
the Senate bill.8 At the conclusion of its hearings, the House Subcommittee
unanimously declared its opposition to the four bills. Its report states:9
17
18
19
As in the Shubert case, we are concerned here only with the sufficiency of the
Government's complaint. We hold that the complaint states a cause of action
and that the Government is entitled to an opportunity to prove its allegations.
The judgment of the court below is reversed.
20
Reversed.
20
Reversed.
21
Mr. Justice BURTON, retaining the views expressed in his dissent in the
Toolson case, 346 U.S. 356, 357, 74 S.Ct. 78, 79, 98 L.Ed. 64, joins the opinion
and judgment of the Court in this case. Mr. Justice REED joins in this
concurrence.
23
24
25
26
27
28
29
30
31
32
33
34
12. Of the various 'world championships,' the heavyweight division is the most
important to boxers and promoters, as it returns the greatest financial benefits.
The flyweight and bantamweight divisions are not of substantial importance in
the United States because very few American boxers are of such light weights.
No championship contest has been held in the flyweight division in the United
States since 1935; none in the bantamweight division since 1947.
35
36
37
38
(b) arrange and maintain training quarters in states other than those in which
the promoters reside;
39
(c) lease suitable arenas, and arrange other details for boxing contests,
particularly when the contests are held in states other than those in which the
promoters reside;
40
41
(e) negotiate for the sale of and sell rights to make and distribute motion
pictures of boxing contests to the 18,000 theatres in the United States;
42
(f) negotiate for the sale of and sell rights to broadcast and telecast boxing
contests to homes through more than 3,000 radio stations and 100 television
stations in the United States; and
43
(g) negotiate for the sale of and sell rights to telecast boxing contests to some
200 motion picture theatres in various states of the United States for display by
large-screen television.
44
45
46
48
49
In 1922, the Court found commercialized baseball outside the scope of the
Sherman Law. Federal Baseball Club of Baltimore v. National League of
Professional Baseball Clubs, 259 U.S. 200, 42 S.Ct. 465, 66 L.Ed. 898. Last
Term the Court refused to re-examine 'the underlying issues' of this
adjudication and adhered to it. Toolson v. New York Yankees, Inc., 346 U.S.
356, 74 S.Ct. 78, 98 L.Ed. 64. What were the 'underlying issues'? They were
the constituents of baseball in relation to the Sherman Law. By adhering to that
decision, the Court refused to depart from a judgment necessarily based on
these constituent elements. To my understanding, that is what is meant by '(w)
ithout re-examination of the underlying issues.' The Court decided as it did in
the Toolson case as an application of the doctrine of stare decisis. That doctrine
is not, to be sure, an imprisonment of reason. But neither is it a whimsy. It can
hardly be that this Court gave a preferred position to baseball because it is the
great American sport. I do not suppose that the Court would treat the national
anthem differently from other songs if the nature of a song became relevant to
adjudication. If stare decisis be one aspect of law, as it is, to disregard it in
identic situations is mere caprice.
50
Congress, on the other hand, may yield to sentiment and be capricious, subject
only to due process. As a matter of fact, one of the explicit factors that led to
the result in Toolson was the recognition of congressional refusal to upset the
Federal Baseball decision. But as the Government with commendable candor
recognizes, Congress was not asked to avert the threat of litigation against
baseball by providing a specific exemption of that sport from the provisions of
the Sherman Law. The sponsors of this relief did not ask immunity for baseball
as such. The 'legislation' to which reference was made in the Toolson case
consisted of bills which sought exemption for 'organized professional sports
enterprises (and) acts in the conduct of such enterprises.' (H.R. 4229, 4230,
4231, and S. 1526, 82d Cong., 1st Sess.) Since, in the light of all the
circumstances, Federal Baseball was left undisturbed by Toolson, I cannot
bring myself to construe the respect that ws thus accorded to stare decisis to be
narrower than that all situations identic with what was passed on in the Federal
Baseball case should be covered by it. I cannot translate even the narrowest
conception of stare decisis into the equivalent of writing into the Sherman Law
an exemption of baseball to the exclusion of every other sport different not one
legal jot or tittle from it.
51
Between them, this case and Shubert illustrate that nice but rational distinctions
are inevitable in adjudication. I agree with the Court's opinion in Shubert for
precisely the reason that constrains me to dissent in this caes. Within a year
after Federal Baseball the Court, again unanimously and through the same
writer, found that a bill against the show business based on the Sherman Law
was not so frivolous as to call for dismissal. Hart v. B. F. Keith Vaudeville
Exchange, 262 U.S. 271, 43 S.Ct. 540, 67 L.Ed. 977. For more than 30 years,
therefore, these two decisions stood as the law. The Shubert case plainly falls
within the adjudication of Hart. By the same process of reasoning, boxing falls
within Federal Baseball, which this Court revitalized in Toolson despite all the
new factors on which the dissent in Toolson relied.
52
53
54
To make a case under the Sherman Act, two things among others are essential:
(1) there must be trade or commerce; (2) such trade or commerce must be
among the States.
55
In the Federal Baseball case, 259 U.S. 200, 42 S.Ct. 465, 66 L.Ed. 898, this
Court held that baseball was not trade or commerce. It said, 'personal effort, not
related to production, is not a subject of commerce', and since the baseball game
was an exhibition wholly intrastate, there could be no trade or commerce
among the States. 259 U.S. 200, 209, 42 S.Ct. 465, 466.
56
In the Baseball case, this Court held that traveling from State to State to play
the game and all the details of arrangements were incident to the exhibition. In
Toolson v. New York Yankees, Inc., 346 U.S. 356, 74 S.Ct. 78, 98 L.Ed. 64,
we did not overrule the Federal Baseball decision; in fact, we reaffirmed the
holding of that case.
57
When boxers travel from State to State, carrying their shorts and fancy dressing
robes in a ditty bag in order to participate in a boxing bout, which is wholly
intrastate, it is now held by this Court that the boxing bout becomes interstate
commerce. What this Court held in the Federal Baseball case to be incident to
the exhibition now becomes more important than the exhibition. This is as fine
an example of the tail wagging the dog as can be conjured up.
58
We are not dealing here with the question of whether the appellees have
restrained trade in or monopolized the radio and television industries. That is a
separate consideration. What others do with pictures they are allowed to take of
a wholly local spectacle or exhibition by thereafter using the channels of
interstate commerce to exhibit them does not make a package deal. The
appellees have nothing to do with the transmission of sound or the pictures.
Because these incidents are not directly involved, no effort was made to bring
the radio and television companies and the sponsors into the case.
59
restrained from doing the same, it is difficult for me to see how there was any
conspiracy. If other promoters wanted to start an elimination contest they were
free to do so. Whether they received public acceptance depended upon
something other than trade or commerce. What does a boxer or athlete have for
sale but 'personal efforts, not related to production,' which, as Justice Holmes
said, is not commerce? Such services they may contract about free from any
control of the Sherman Act. Suppose the appellee did, as the Court states,
control what the parties called all but two of twenty-one championship contests,
what trade or commerce have they restrained?
60
The corporate defendants are International Boxing Club of New York, Inc.,
International Boxing Club, and Madison Square Garden Corporation. The
individual defendants are James D. Norris and Arthur M. Wirtz. The individual
defendants, together with Madison Square Garden Corporation, own 80% of the
stock of International Boxing Club of New York, Inc., and International Boxing
Club. The nature of the business involved is described in an appendix to this
opinion.
The District Court's opinion was oral and not transcribed. All the parties agree,
however, that the dismissal was based on Federal Baseball and Toolson.
4
The complaint further alleges that 'With the progressive and continuing
expansion of television facilities, the proportion of the promoter's total revenue
derived from television, radio and motion pictures, has been on an ascending
curve. * * *'
All three media are concededly engaged in interstate commerce. E.g., Federal
Radio Comm. v. Nelson Bros. Bond & Mortgage Co., 289 U.S. 266, 279, 53
S.Ct. 627, 633, 77 L.Ed. 1166 (radio); Allen B. Dumont Laboratories, Inc., v.
Carroll, 3 Cir., 184 F.2d 153, 154, certiorari denied, 340 U.S. 929, 71 S.Ct. 490,
95 L.Ed. 670 (television); United States v. Paramount Pictures, 334 U.S. 131,
68 S.Ct. 915, 92 L.Ed. 1260 (motion pictures).
Shall v. Henry, 7 Cir., 211 F.2d 226, was decided subsequent to the decision
below. So also was Peller v. International Boxing Club, unreported, Civil 52 C
813, April 23, 1954 (D.C.N.D.Ill.). The unreported decision (D.C.N.D.Ill.)
which Shall v. Henry affirmed was decided prior to the decision below but after
the filing of the Government's complaint.
H.R. 4229, 4230, 4231, and S. 1526, 82d Cong., 1st Sess. These bills were
introduced 'by friends of baseball because they feared that the continued
existence of organized baseball as America's national pastime was in substantial
danger by the threat of impending litigation.' H.R.Rep. No. 2002, 82d Cong.,
2d Sess., p. 1.
H.R.Rep. No. 2002 (entitled 'Organized Baseball'), 82d Cong., 2d Sess., p. 230.
Between the hearings and the report, the Subcommittee on Study of Monopoly
Power was reconstituted as the Antitrust Subcommittee. The report was
submitted directly to the full House pursuant to H.Res. 95, 82d Cong., 1st Sess.
10
This opinion is concerned only with the sport as such, and not with the
arrangements by which mass media show or report bouts. Such arrangements
clearly are beyond the scope of the Toolson case, infra.