Opinion of the Court
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SUPREME COURT OF THE UNITED STATES
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No. 13-001
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NATIONAL HOCKEY LEAGUE v. UNITED STATES
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
[December 30, 2013]
CHIEF JUSTICE HOLT delivered the opinion of the Court.
I
This case presents the question of whether Congress may remove the exemption from the Sherman Antitrust Act (1890) for professional sporting organizations that has been in place since Federal Baseball Club v. National League (1922). Additionally, this case intends to clarify what athletic endeavors are considered a “sport” under the Sport Taxation Post-Exportation Act (2013).
The appellant, National Hockey League (NHL), contends that it should be exempt from the Sherman Antitrust Act, as was established through the Clayton Antitrust Act (1914), which exempted non-profit organizations and labor unions from the provisions set forth in the former. The Clayton Antitrust Act §6 dictates that, “The labor of a human being is not a commodity or article of commerce”, which MLB contends includes the movement of franchises across state lines. Consequently, we held in Federal Baseball Club v. National League (1922) that “The business is giving exhibitions of baseball, which are purely state affairs.” While travel between states and cities may, even must, occur for exhibitions, transport is merely an “incident...not related to production” and “is not a subject of commerce.”
Further, the appellant argues that text of the Sport Taxation Post-Exportation Act (2013) 113-29 is unnecessarily vague in its classification of activities as sports. Appellant observes that it is difficult to ascertain what athletic competitions are considered sports and has asked for clarification from this Court.
The appellee, the State, argues that under Article I, Section 8, Clause 3 of the United States Constitution, Congress has the power to “regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes”. The State counters that Federal Baseball Club v. National League applied to the movement of participants for baseball, and here extrapolated to hockey, exhibitions and for spectators of said exhibitions, which are protected parties under the aforementioned Act under §4b. The State contests that the movement of a franchise and facility across state lines falls under the Commerce Clause and is thus taxable.
The appellee has similarly requested clarification on the definition of “sports” in the Sport Taxation Post-Exportation Act (2013).
The District Court of Southern New York found the Act constitutional under the Commerce Clause and held that it does not violate the Clayton Antitrust Act. The District Court defined sport as the Wisconsin Supreme Court did in Noffke v. Bakke (2009) as a “[a]n activity involving physical exertion and skill that is governed by a set of rules or customs”. This was a modification of Wisconsin Statute 895.523(1)(h), which defined a sport as “an activity requiring physical exertion and skill and which, by its nature and organization, is competitive and includes a set of rules for play”. The Second Circuit Court of Appeals used this definition in its ruling.
The Court has previously held that commerce may be regulated even if it is “local and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce”. Wickard v. Filburn (1942). Congress, which has been given great deference in regards to the Commerce Clause since Chief Justice John Marshall, could choose to regulate even intrastate commerce should said regulation be rationally related to Congress’ goal. This standard was reaffirmed in Gonzales v. Raich (2005). We hold that the disputed portions of the Sport Taxation Post-Exportation Act (2013) satisfy these requirements, as Congress’ regulation and taxation achieves the stated goal: maintained economic viability of American municipalities.
In Los Angeles Memorial Coliseum Commission v. National Football League (1986), the Ninth Circuit Court of Appeals held that the NFL consists of separate, largely economically independent entities and rejected the NFL’s assertion that it is a single entity. We find the same to be true with the National Hockey League: the NHL consists of entities that are managed and owned independently, have separate profits and losses, and do not share all revenues. Therefore, we find that the movement of an organization across state lines does not involve merely the reshuffling of subsidiaries, but the relocation of a distinct entity and thus governable as Interstate Commerce.
Professional sports hold a special, distinct place in American life and, though they are a business as was held in City of Oakland v. Oakland Raiders (1982), they are a distinct form of commerce. As Circuit Judge Coffey argued in his dissent in Indianapolis Colts v. Mayor and City Council of Baltimore (1984), a city stands to benefit not only from a “simple contract interest” from gaining a professional sport, but all “the rights, benefits, and privileges” of a professional organization, including “public entertainment, increased restaurant and hotel revenues, civic pride, favorable media coverage, increased retail expenditures, and national recognition.” There is no conflict between the Sport Taxation Post-Exportation Act and the decision in Federal Baseball Club v. National League. The decision of the District Court is affirmed.
II
The word sport in its earliest meaning referred to simply a “pleasant pastime.” It is derived from the word disport: "activity that offers amusement or relaxation; entertainment, fun." Using this original meaning it would be easy to classify many activities as sport; such as board games or knitting. However, in our modern usage sport is used to define a much smaller range of activities. In the case arising from Sport Taxation Post-Exportation Act (2013), we are asked to determine what is and is not a sport. In deciding this case the Court has used standards which can be applied in future cases to assess whether a given activity meets the qualifications to be called a sport.
The four facets that must be present for an activity to be recognized as a sport are:
1. Rules and Regulations
2. Specialized Athleticism
3. Competitive in Nature
4. A Quantifiable and Definite Outcome
We shall examine each of these criteria individually to expound on their inclusion as sport.
1. Rules and Regulations - This includes both the fundamental laws by which a game operates as well as the mechanics that create an established structure such as organized competitions, referees, coaches, and governing bodies. This criterion has been established to protect recreational activities that are not subject to the jurisdiction of this law.
2. Specialized Athleticism - This component is what separates sport from non-athletic competitions which fall under the category of games (chess, cards, knowledge based games.) In order to be considered athletic, a sport must directly involve several aspects of physical exertion: strength, endurance, speed, or agility. In addition, the participants in the sport must possess these skills in a specialized manner which makes them distinct from the general population. An example of this would be the difference of skills possessed by a father and son playing catch versus a major league baseball pitcher.
3. Competitive - A sport must be competitive nature to distinguish it from demonstrative feats of athleticism - i.e. a 100-yard dash as opposed to parkour where an individual is only attempting to express creativity. In order to be competitive a sport must either have teams or individuals vying against one another for a victory only achievable by one entity. In the parameters of this law, this will only extend to those teams and/or individuals involved in large-scale organized competitions with Rules and Regulations as outlined in the first section.
4. A Quantifiable and Objective Goal - An outcome that is quantifiable and objective is what separates “athletic events” and games from sport. There are many activities which feature all three of the preceding criteria but are not classified as a sport because their outcomes are based on the subjective standards of judges. It is the opinion of this Court that sports are only those competitive, athletic events which have an outcome that is based on the performance of the team/individual against a competitor or competitors and not on the subjective evaluation of said performance.
Hockey conforms to the first criterion insofar as it is regulated by the National Hockey League, its subsidiaries, and counterpart organizations. It is responsible for the ongoing effort to govern the rules of the game and the organization of its various and sundry resources. Hockey also conforms to the second criterion insofar as its outcome is determined by the physical striving of its players and teams. The myriad aspects of the game (skating, endurance, puck-handling) played out over the length of the season are all directly determined by the specialized athleticism of its participants. Hockey conforms to the third criterion because the two teams make mutually exclusive attempts to defeat the other, and it conforms to the fourth criterion, because the highest score determines the single winner of the two competing teams.
Numerous amicus briefs submitted to the Court argue that the governing bodies should be the ones to designate their activities as sports, and not determined by an impartial “court of shlubs”. For those who make this argument, the National Hockey League should be the body to declare whether baseball is a sport. The Court, however, holds that the conflict of interests is far too great in such instances. The National Hockey League would inherently act in its best interest not in that of the parties affected. A national standard is required in order to establish consistency and fairness in the treatment of varied athletic endeavors.
It is beyond the scope of this Court to rule which athletic events are considered sports outside those presented before us today. Based on the above criteria, the Court holds that hockey, as embodied in the National Hockey League and its subsidiaries, is a sport as outlined in the Sport Taxation Post-Exportation Act and is beholden to all the rights and responsibilities associated with such a designation.
It is so ordered.
