Slide 11 -
Gardella v. Chandler (1949) The Federal Baseball ruling went untested for 25 years. But the country had changed. New Deal legislation regulating the economy such as the National Labor Relations Act and the Fair Labor Standards Act were upheld by the Supreme Court as appropriate exercises of congressional commerce power. MLB had changed as well with games now regularly broadcast not only on radio but also the new medium of television.
Then following WWII, the new Mexican League was formed. In June 1946, baseball commissioner Happy Chandler announced a 5-year ban on all U.S. players who jumped to the Mexican League. Danny Gardella, a 27-year-old OF who in 1946 was offered $5,000 to play for the New York Giants, was offered $8,000 plus a signing bonus of $5,000 to play in the Mexican League. Gardella chose to play in Mexico, but like other U.S. ballplayers who made this choice, he found the playing conditions there intolerable and wanted to return to MLB.
But Gardella was blacklisted and was forced to join barnstorming teams and take on odd jobs to survive. He sued MLB for $300,000. After losing his case in the trial court, he appealed and the 2nd Circuit Court of Appeals found in Gardella’s favor, ruling 2-1 in Gardella v. Chandler (1949) that the advent of radio and television had involved baseball in interstate commerce and that the sport was therefore likely subject to the Sherman Antitrust Act. Chief Judge Learned Hand wrote: “When the case goes back for trial—assuming that it does so upon our opinions—it will be necessary, as I view it, to determine whether all the interstate activities of the defendants—those, which were thought insufficient before, in conjunction with broadcasting and television—together form a large enough a part of the business to impress upon it an interstate character. I do not know how to put it in more definite terms.”
In his separate opinion, Judge Jerome Frank went further than Hand by pointing out that Federal Baseball was likely no longer good law: “No one can treat as frivolous the argument that the Supreme Court's recent decisions have completely destroyed the vitality of Federal Baseball Club v. National League, decided twenty-seven years ago, and have left that case but an impotent zombie.” Frank then attacked the reserve clause directly: “we have here a monopoly which, in its effect on ball-players like the plaintiff, possesses characteristics shockingly repugnant to moral principles that, at least since the War Between the States, have been basic in America, as shown by the Thirteenth Amendment to the Constitution, condemning 'involuntary servitude,' and by subsequent Congressional enactments on that subject. For the 'reserve clause' as has been observed, results in something resembling peonage of the baseball player.” Frank concluded: “Defendants suggest that 'organized baseball,' which supplies millions of Americans with desirable diversion, will be unable to exist without the 'reverse clause.' Whether that is true, no court can predict. In any event, the answer is that the public's pleasure does not authorize the courts to condone illegality, and that no court should strive ingeniously to legalize a private (even if benevolent) dictatorship.”
Gardella was awarded damages of $300,000 and the 1922 Federal Baseball decision seemed to no longer be good law. MLB appealed the ruling and announced amnesty for all Mexican League jumpers. But MLB was loathe to have Federal Baseball overturned in the Supreme Court and did not want another lengthy trial on whether its business constituted interstate commerce. Hence, before the Gardella case could be heard by the Supreme Court, MLB and Gardella settled for $60,000 which Gardella accepted rather than continue the costly legal battle. It remained unclear whether Federal Baseball was still good law. Danny Gardella Jerome Frank Learned Hand