United States v. International Boxing Club of New York
Encyclopedia
United States v. International Boxing Club of New York
(348 U.S. 236
, 1955), often referred to as International Boxing Club or just International Boxing, was an antitrust
decision of the U.S. Supreme Court
. By a 7-2 margin, the justices ruled that the exemption it had previously upheld for Major League Baseball
was peculiar and unique to that sport and that it did not apply to boxing
. Since it met the definition of interstate commerce, the government could therefore proceed with a trial
to prove IBCNY and the other defendants had conspired to monopolize
the market for championship boxing
in the United States.
It was the first time another sport had argued it was covered by the same exemption as baseball by virtue of being a professional sport. Chief Justice
Earl Warren
, writing for the majority, admitted that it would never have reached the Court but for the baseball exemption, and dissenting justices Felix Frankfurter
and Sherman Minton
were unsparing in their criticism of the arbitrary nature of this distinction.
The case was remanded for trial, which the government won, forcing the breakup of some of the defendant companies. An appeal
of that decision also was ultimately decided by the Supreme Court four years later, upholding the wide discretion and scope of district court judges in shaping remedies for antitrust violations.
and Arthur Wirtz
, who controlled boxing at several major arenas including Madison Square Garden
, Chicago Stadium
and Detroit Olympia
, paid the recently retired Joe Louis
$100,000 for four fighters he managed. They agreed that those fighters would fight it out among themselves for the new heavyweight
title, and in return fight only in matches Norris and Wirtz promoted for several years.
This gave them an effective monopoly
on all major boxing matches save those in the flyweight
and bantamweight
divisions. From 1949 to 1955 all but four championship fights took place under their control. They also secured exclusive television contracts for twice-weekly fights at the Garden, at a time when boxing was increasingly coming to depend on television revenues.
began investigating for possible antitrust
violations and brought the IBCNY to trial in the Southern District of New York
under the Sherman Antitrust Act
in 1953. Before it started, the defendants moved to dismiss the complaint, citing the Court's recent decision in Toolson v. New York Yankees
to uphold the antitrust exemption granted Major League Baseball
in 1922's Federal Baseball Club v. National League
. Like baseball, they reasoned, the interstate travel required to facilitate boxing was incidental to the staging of fights and thus boxing was not subject to antitrust law as it was not interstate commerce.
The district court granted the motion. Immediately afterward, the government appealed the dismissal directly to the Supreme Court under the Expediting Act.
Earl Warren
wrote for the majority. Felix Frankfurter
and Sherman Minton
dissented, with Minton signing Frankfurter's opinion as well.
Prior to the Court's consideration of Toolson, he recalled, Congress had considered and rejected other bills
intended specifically to genericize the baseball exemption. "The issue confronting us is therefore not whether a previously granted exemption should continue," he concluded, "but whether an exemption should be granted in the first instance. And that issue is for Congress to resolve, not this Court."
, the legal doctrine
under which flawed decisions can be upheld as the lesser of two evils. But here he found his colleagues irrational and inconsistent.
Minton, too, saw flawed logic. Unlike Frankfurter, he believed that boxing generally did not constitute interstate commerce, noting that the broadcasters and sponsors had not been named as defendants by the government, and that the Court was turning Federal Baseballs conclusion on its head.
He conceded that Louis had a monopoly on the championship when he retired and gave the defendants exclusives on the four fighters' championship contests, but from competition in the ring
, not the marketplace. "As I see it, boxing is not trade or commerce. There can be no monopoly or restraint of nonexistent commerce or trade", he concluded.
proposed by the judge as having gone past the original offense, and that case came to the Supreme Court again as International Boxing Club of New York v. United States . Again the justices ruled in the government's favor, and Norris and Wirtz dissolved the organization and sold their interest in the other defendant organizations.
While they left boxing, they remained involved in professional sports as owners of the Chicago Blackhawks
National Hockey League
franchise. Wirtz's grandson Rocky
is today the team's principal owner.
International Boxing Club of New York
The International Boxing Club of New York was a corporation formed by James D. Norris and Arthur M. Wirtz in 1949 to promote boxing bouts at Madison Square Garden, Polo Grounds, Yankee Stadium, St...
(348 U.S. 236
Case citation
Case citation is the system used in many countries to identify the decisions in past court cases, either in special series of books called reporters or law reports, or in a 'neutral' form which will identify a decision wherever it was reported...
, 1955), often referred to as International Boxing Club or just International Boxing, was an antitrust
Antitrust
The United States antitrust law is a body of laws that prohibits anti-competitive behavior and unfair business practices. Antitrust laws are intended to encourage competition in the marketplace. These competition laws make illegal certain practices deemed to hurt businesses or consumers or both,...
decision of the U.S. Supreme Court
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
. By a 7-2 margin, the justices ruled that the exemption it had previously upheld for Major League Baseball
Major League Baseball
Major League Baseball is the highest level of professional baseball in the United States and Canada, consisting of teams that play in the National League and the American League...
was peculiar and unique to that sport and that it did not apply to boxing
Boxing
Boxing, also called pugilism, is a combat sport in which two people fight each other using their fists. Boxing is supervised by a referee over a series of between one to three minute intervals called rounds...
. Since it met the definition of interstate commerce, the government could therefore proceed with a trial
Trial
A trial is, in the most general sense, a test, usually a test to see whether something does or does not meet a given standard.It may refer to:*Trial , the presentation of information in a formal setting, usually a court...
to prove IBCNY and the other defendants had conspired to monopolize
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
the market for championship boxing
Boxing
Boxing, also called pugilism, is a combat sport in which two people fight each other using their fists. Boxing is supervised by a referee over a series of between one to three minute intervals called rounds...
in the United States.
It was the first time another sport had argued it was covered by the same exemption as baseball by virtue of being a professional sport. Chief Justice
Chief Justice of the United States
The Chief Justice of the United States is the head of the United States federal court system and the chief judge of the Supreme Court of the United States. The Chief Justice is one of nine Supreme Court justices; the other eight are the Associate Justices of the Supreme Court of the United States...
Earl Warren
Earl Warren
Earl Warren was the 14th Chief Justice of the United States.He is known for the sweeping decisions of the Warren Court, which ended school segregation and transformed many areas of American law, especially regarding the rights of the accused, ending public-school-sponsored prayer, and requiring...
, writing for the majority, admitted that it would never have reached the Court but for the baseball exemption, and dissenting justices Felix Frankfurter
Felix Frankfurter
Felix Frankfurter was an Associate Justice of the United States Supreme Court.-Early life:Frankfurter was born into a Jewish family on November 15, 1882, in Vienna, Austria, then part of the Austro-Hungarian Empire in Europe. He was the third of six children of Leopold and Emma Frankfurter...
and Sherman Minton
Sherman Minton
Sherman "Shay" Minton was a Democratic United States Senator from Indiana and an Associate Justice of the Supreme Court of the United States. He was the most educated justice during his time on the Supreme Court, having attended Indiana University, Yale and the Sorbonne...
were unsparing in their criticism of the arbitrary nature of this distinction.
The case was remanded for trial, which the government won, forcing the breakup of some of the defendant companies. An appeal
Appeal
An appeal is a petition for review of a case that has been decided by a court of law. The petition is made to a higher court for the purpose of overturning the lower court's decision....
of that decision also was ultimately decided by the Supreme Court four years later, upholding the wide discretion and scope of district court judges in shaping remedies for antitrust violations.
Background of the case
In January 1949 James D. NorrisJames D. Norris
James Dougan Norris was an American sports businessman, with interests in boxing, ice hockey, and horse racing. He was the son of James E. Norris and half-brother of Bruce Norris and is a member of the Hockey Hall of Fame.Born in Chicago, Norris served as a Lieutenant with the United States Navy...
and Arthur Wirtz
Arthur Wirtz
Arthur Michael Wirtz was a powerful figure in sports and arena operation. He was the owner of Chicago Stadium, the Bismarck Hotel in Chicago, the Chicago Black Hawks, and the Chicago Bulls...
, who controlled boxing at several major arenas including Madison Square Garden
Madison Square Garden
Madison Square Garden, often abbreviated as MSG and known colloquially as The Garden, is a multi-purpose indoor arena in the New York City borough of Manhattan and located at 8th Avenue, between 31st and 33rd Streets, situated on top of Pennsylvania Station.Opened on February 11, 1968, it is the...
, Chicago Stadium
Chicago Stadium
The Chicago Stadium was an indoor sports arena and theater in Chicago. It opened in 1929, and closed in 1994.-History:The Stadium hosted the Chicago Blackhawks of the NHL from 1929–1994 and the Chicago Bulls of the NBA from 1967–1994....
and Detroit Olympia
Detroit Olympia
Olympia Stadium, better known as the Detroit Olympia and nicknamed The Old Red Barn, stood at 5920 Grand River Avenue in Detroit, Michigan from 1927 until 1987. It was best known as the home of the Detroit Red Wings hockey team of the National Hockey League from its opening until...
, paid the recently retired Joe Louis
Joe Louis
Joseph Louis Barrow , better known as Joe Louis, was the world heavyweight boxing champion from 1937 to 1949. He is considered to be one of the greatest heavyweights of all time...
$100,000 for four fighters he managed. They agreed that those fighters would fight it out among themselves for the new heavyweight
Heavyweight
Heavyweight is a division, or weight class, in boxing. Fighters who weigh over 200 pounds are considered heavyweights by the major professional boxing organizations: the International Boxing Federation, the World Boxing Association, the World Boxing Council, and the World Boxing...
title, and in return fight only in matches Norris and Wirtz promoted for several years.
This gave them an effective monopoly
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
on all major boxing matches save those in the flyweight
Flyweight
Flyweight is a class in boxing which includes fighters weighing less than 112 lb but above 108 lb .-Professional boxing:...
and bantamweight
Bantamweight
Bantamweight is usually a class in boxing for boxers who weigh above 115 pounds and up to 118 pounds . However, in Mixed Martial Arts it is 134-136 pounds . Wrestling also has similar weight classes including bantamweight...
divisions. From 1949 to 1955 all but four championship fights took place under their control. They also secured exclusive television contracts for twice-weekly fights at the Garden, at a time when boxing was increasingly coming to depend on television revenues.
Trial and appeal
The Justice DepartmentUnited States Department of Justice
The United States Department of Justice , is the United States federal executive department responsible for the enforcement of the law and administration of justice, equivalent to the justice or interior ministries of other countries.The Department is led by the Attorney General, who is nominated...
began investigating for possible antitrust
Antitrust
The United States antitrust law is a body of laws that prohibits anti-competitive behavior and unfair business practices. Antitrust laws are intended to encourage competition in the marketplace. These competition laws make illegal certain practices deemed to hurt businesses or consumers or both,...
violations and brought the IBCNY to trial in the Southern District of New York
United States District Court for the Southern District of New York
The United States District Court for the Southern District of New York is a federal district court. Appeals from the Southern District of New York are taken to the United States Court of Appeals for the Second Circuit The United States District Court for the Southern District of New York (in case...
under the Sherman Antitrust Act
Sherman Antitrust Act
The Sherman Antitrust Act requires the United States federal government to investigate and pursue trusts, companies, and organizations suspected of violating the Act. It was the first Federal statute to limit cartels and monopolies, and today still forms the basis for most antitrust litigation by...
in 1953. Before it started, the defendants moved to dismiss the complaint, citing the Court's recent decision in Toolson v. New York Yankees
Toolson v. New York Yankees
Toolson v. New York Yankees is a 1953 U.S. Supreme Court decision that upheld, 7–2, the antitrust exemption first granted to Major League Baseball three decades earlier in Federal Baseball Club v. National League...
to uphold the antitrust exemption granted Major League Baseball
Major League Baseball
Major League Baseball is the highest level of professional baseball in the United States and Canada, consisting of teams that play in the National League and the American League...
in 1922's Federal Baseball Club v. National League
Federal Baseball Club v. National League
Federal Baseball Club v. National League, , is a case in which the U.S. Supreme Court ruled that the Sherman Antitrust Act did not apply to Major League Baseball.-Background:...
. Like baseball, they reasoned, the interstate travel required to facilitate boxing was incidental to the staging of fights and thus boxing was not subject to antitrust law as it was not interstate commerce.
The district court granted the motion. Immediately afterward, the government appealed the dismissal directly to the Supreme Court under the Expediting Act.
Decision
Chief JusticeChief Justice of the United States
The Chief Justice of the United States is the head of the United States federal court system and the chief judge of the Supreme Court of the United States. The Chief Justice is one of nine Supreme Court justices; the other eight are the Associate Justices of the Supreme Court of the United States...
Earl Warren
Earl Warren
Earl Warren was the 14th Chief Justice of the United States.He is known for the sweeping decisions of the Warren Court, which ended school segregation and transformed many areas of American law, especially regarding the rights of the accused, ending public-school-sponsored prayer, and requiring...
wrote for the majority. Felix Frankfurter
Felix Frankfurter
Felix Frankfurter was an Associate Justice of the United States Supreme Court.-Early life:Frankfurter was born into a Jewish family on November 15, 1882, in Vienna, Austria, then part of the Austro-Hungarian Empire in Europe. He was the third of six children of Leopold and Emma Frankfurter...
and Sherman Minton
Sherman Minton
Sherman "Shay" Minton was a Democratic United States Senator from Indiana and an Associate Justice of the Supreme Court of the United States. He was the most educated justice during his time on the Supreme Court, having attended Indiana University, Yale and the Sorbonne...
dissented, with Minton signing Frankfurter's opinion as well.
Majority
"The question is perhaps a novel one in that this Court has never before considered the antitrust status of the boxing business", Warren wrote. "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." Boxing clearly involved interstate arrangements, he said, particularly with broadcasting involved, and as early as Hart v. B.F. Keith Vaudeville Exchange the Court had been clear that baseball's antitrust exemption could not be claimed by any other business.Prior to the Court's consideration of Toolson, he recalled, Congress had considered and rejected other bills
Bill (proposed law)
A bill is a proposed law under consideration by a legislature. A bill does not become law until it is passed by the legislature and, in most cases, approved by the executive. Once a bill has been enacted into law, it is called an act or a statute....
intended specifically to genericize the baseball exemption. "The issue confronting us is therefore not whether a previously granted exemption should continue," he concluded, "but whether an exemption should be granted in the first instance. And that issue is for Congress to resolve, not this Court."
Dissents
"It would baffle the subtlest ingenuity to find a single differentiating factor between other sporting exhibitions, whether boxing or football or tennis, and baseball", Frankfurter began. The Toolson majority, which he had been part of, had applied stare decisisStare decisis
Stare decisis is a legal principle by which judges are obliged to respect the precedents established by prior decisions...
, the legal doctrine
Legal doctrine
A legal doctrine is a framework, set of rules, procedural steps, or test, often established through precedent in the common law, through which judgments can be determined in a given legal case. A doctrine comes about when a judge makes a ruling where a process is outlined and applied, and allows...
under which flawed decisions can be upheld as the lesser of two evils. But here he found his colleagues irrational and inconsistent.
Minton, too, saw flawed logic. Unlike Frankfurter, he believed that boxing generally did not constitute interstate commerce, noting that the broadcasters and sponsors had not been named as defendants by the government, and that the Court was turning Federal Baseballs conclusion on its head.
He conceded that Louis had a monopoly on the championship when he retired and gave the defendants exclusives on the four fighters' championship contests, but from competition in the ring
Boxing ring
A boxing ring is the space in which a boxing match occurs. A modern ring, which is set on a raised platform, is square with a post at each corner to which four parallel rows of ropes are attached with a turnbuckle...
, not the marketplace. "As I see it, boxing is not trade or commerce. There can be no monopoly or restraint of nonexistent commerce or trade", he concluded.
Legacy
The antitrust suit proceeded and the government won. The IBCNY appealed the divestituresDivestment
In finance and economics, divestment or divestiture is the reduction of some kind of asset for either financial or ethical objectives or sale of an existing business by a firm...
proposed by the judge as having gone past the original offense, and that case came to the Supreme Court again as International Boxing Club of New York v. United States . Again the justices ruled in the government's favor, and Norris and Wirtz dissolved the organization and sold their interest in the other defendant organizations.
While they left boxing, they remained involved in professional sports as owners of the Chicago Blackhawks
Chicago Blackhawks
The Chicago Blackhawks are a professional ice hockey team based in Chicago, Illinois. They are members of the Central Division of the Western Conference of the National Hockey League . They have won four Stanley Cup championships since their founding in 1926, most recently coming in 2009-10...
National Hockey League
National Hockey League
The National Hockey League is an unincorporated not-for-profit association which operates a major professional ice hockey league of 30 franchised member clubs, of which 7 are currently located in Canada and 23 in the United States...
franchise. Wirtz's grandson Rocky
Rocky Wirtz
William Rockwell "Rocky" Wirtz is the principal owner and chairman of the NHL's Chicago Blackhawks. He is also president of the Blackhawks' parent company, Wirtz Corporation, a diversified conglomerate headquartered in Chicago....
is today the team's principal owner.