United States v. International Boxing Club of New York

• Citation: 99 L.Ed. 290,75 S.Ct. 259,348 U.S. 236
• Decision Date: 31 January 1955
• Docket Number: No. 53,53
• Parties: UNITED STATES of America, Appellant, v. INTERNATIONAL BOXING CLUB OF NEW YORK, Inc., et al
• Court: U.S. Supreme Court

348 U.S. 236

75 S.Ct. 259

99 L.Ed. 290

UNITED STATES of America, Appellant,

v INTERNATIONAL BOXING CLUB OF NEW YORK, Inc., et al.

No. 53.

Argued Nov. 10, 1954.

Decided Jan. 31, 1955.

Mr.Philip Elman, Washington, D.C., for appellant.

Messrs. Whitney North Seymour, Charles H. Watson, New York City, for appellees.

Mr. Manuel Lee Robbins, New York City, for New York State Athletic Commn. amicus curiae.

Mr. Chief Justice WARREN delivered the opinion of the Court.

This is a civil antitrust action brought by the Government in the United States District Court for the Southern District of New York. The defendants—three corporations and two individuals—are 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.

The Government's complaint alleges that promoters of professional championship boxing contests

'make a substantial utilization of the channels of interstate trade and commerce to:

'(a) negotiate contracts with boxers, advertising agencies, seconds, referees, judges, announcers, and other personnel living in states other than those in which the promoters reside;

'(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;

'(d) sell tickets to contests across state lines;

'(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.'

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 by the following means: by eliminating the 'leading competing promoter' of championship matches; by acquiring the exclusive right to promote professional boxing contests in all the 'principal arenas' where championship matches can be successfully presented; and by requiring each title contender to agree, as a condition of fighting for the championship, that if he wins he would, for a period of three (and sometimes five) years, take part only in title contests promoted by the defendants. As a consequence of these acts, the complaint alleges, the defendants have promoted, or participated in the promotion of, all but two of the 21 championship matches held in the United States between June 1949 and the filing of the complaint in March 1952.

These allegations must of course be taken as true at this stage of the proceeding. And the defendants do not deny that the allegations state a cause of action if their business is subject to the Sherman Act. The question thus presented is whether the defendants' business as described in the complaint—the of professional championship boxing contests on a multistate basis, coupled with the sale of rights to televise, broadcast, and film the contests for interstate transmission—constitutes 'trade or commerce among the several States' within the meaning of the Sherman Act.

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 dis- pute that the Government's allegations bring the defendants within the scope of the Act. A boxing match—like 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, 225—226, 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, 227—235, 68 S.Ct. 996, 1001—1006, 92 L.Ed. 1328; United States v. Frankfort Distilleries, 324 U.S. 293, 297—298, 65 S.Ct. 661, 663—664, 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, 127—128, 63 S.Ct. 82, 90—91, 87 L.Ed. 122.

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.

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.

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 one—the 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...