Marge Schott -- Suspended Without Legal Recourse

In mid-June, Major League Baseball removed Marge Schott from everyday control of the Cincinnari Reds. Yet even though the Reds mean more to Schott than any non-St. Bernard on the planet, she accepted the ban without challenging it in court. Why?

Principally because of a pair of 20-year-old precedents upholding MLB's authority to discipline errant owners: Atlanta Natl. League Baseball Club v. Kuhn, 443 F. Supp. 1213 (N.D. Ga. 1977), and Charles O. Finley & Co. v. Kuhn, 569 F.2d 527 (7th Cir. 1978). These cases arose in the early days of free agency, when bad-boy owners Charles O. Finley and Ted Turner tested Commissioner Bowie Kuhn's power to discipline them.

Finley's A's were especially vulnerable to free agency because everyone on the mega-talented Oakland team hated Finley's guts. When an arbitrator ruled after the 1975 season that players could become free agents by playing out the option year of their contracts, many of the AL's best players returned their contracts unsigned and counted down the days to liberation.

But while the baseball establishment shared the A's' contempt for Finley, they had to admit that he often thought several steps ahead of the pack. Long before any other owner, Finley realized the key consequence of free agency: player contracts were worth a fraction of their former value because those contracts no longer included a perpetual reserve clause. Rather than lose his players at the end of the season without compensation, Finley vowed to get what he could for his free-agents-to-be. Even before the 1976 season began, Finley traded the unsigned Reggie Jackson, along with Ken Holtzman and a minor leaguer, to Baltimore for Don Baylor, Mike Torrez and Paul Mitchell.

Finley hit the jackpot in mid-June. In two days he sold three players for $3.5 million: Joe Rudi and Rollie Fingers to the Red Sox for $2 million and Vida Blue to the Yankees for $1.5 million. (By comparison, three years earlier George Steinbrenner paid $10 million for the entire Yankee franchise.) But on June 18, Commissioner Kuhn voided the sale as "inconsistent wth the best interests of baseball, the integrity of the game and the maintenance of public confidence in it."

Later that year, Ted Turner earned Kuhn's wrath for being too interested in free agents. Before the free-agent signing period began, Turner publicly proclaimed that he would spend as much as necessary to sign Gary Matthews. Turner's courtship included throwing a "Welcome to Atlanta" party for Matthews before acquiring the rights to negotiate with him. For his public comments, Kuhn suspended Turner for one year, stripping him of all authority to manage the Braves or negotiate with other major league teams.

Both Finley and Turner sued Kuhn, claiming that he had exceeded his authority as Commissioner. Finley argued that nothing in baseball's rules empowered the Commissioner to invalidate player sales; Turner challenged his suspension by contrasting his one-year banishment with the $5,000 fine given to Cardinals' owner Gussie Busch for violating the same directive. But the courts resoundingly reinforced Major League Baseball's authority over its owners.

Quoting an earlier court's description of Judge Landis' powers, the judge in Turner's case noted that in creating the office of Commissioner the owners themselves had given Organized Baseball's supreme ruler "all the attributes of a benevolent but absolute despot." Under the Major League Agreement, the Commissioner was broadly empowered to "investigate any act...alleged or suspected to be not in the best interests" of baseball and to punish violators, and this grant of power bound the owners in any subsequent disciplinary proceedings. The Court of Appeals in Finley's case also enforced a clause in the Major League Agreement by which the owners agreed not to challenge the Commissioner's actions in court.

The Finley court made clear that when Major League Baseball disciplined an owner, the courts would not interfere except in the most extreme circumstances. Even if the owners hadn't waived their right to sue, "the courts are generally not available to an association or its members to review actions of a voluntary association [Major League Baseball is an unincorporated association] with respect to its own members." 569 F.2d at 542. The courts will only intervene if MLB's rules or the discipline imposed violate the law or MLB's own bylaws, or if MLB "has failed to follow the basic rudiments of due process of law." This latter standard gives MLB broad authority to prescribe its own procedures: they need not strictly adhere to judicial standards of due process, but must simply "not be a sham designed merely to give colorable propriety to an inadequate process."

Judged against this standard, any legal challenge by Marge Schott seemed doomed to fail. Even if MLB disciplined her merely for espousing unpopular views, the First Amendment doesn't help her because the constitutional guarantee of freedom of speech only prevents the government from punishing unpopular speech. Before suspending Schott, MLB carefully afforded her a hearing and the opportunity to present her case. Thus having accepted Major League Baseball's authority to discipline her, Schott cannot expect the courts to second-guess how that authority has been exercised.

Copyright © 1996 Doug Pappas. All rights reserved.
Originally published in the Summer 1996 issue of Outside the Lines, the SABR Business of Baseball Committee newsletter.

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