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Baseball Card Litigation: Fleer v. Topps

Pittsburg[h] Base Ball Club, by New York: Goodwin & Co., c1887, Library of Congress Prints and Photographs Division

If you were not aware, the Library of Congress is the place for baseball cards.  Comprised of both donated collections and items deposited with the U.S. Copyright office, the Library’s collection is unparalleled (absent the elusive Honus Wagner card).

You can view items from our collection in the Library’s Baseball Americana exhibition where cards are featured in several of the display cases.

Even if you are not a collector, most people are aware that baseball cards are big business.  So it’s no surprise that they have been the subject of litigation.

One such instance encompassed over 25 years of back-and-forth filings between Fleer and Topps over allegations of antitrust violations and unfair trade practices, with frequent mentions of the Sherman Antitrust Act and the Federal Trade Commission Act.

Based on a complaint filed by Fleer in 1962, a Federal Trade Commission (FTC) examiner ruled against Topps, concluding that they were in violation of Section 2 of the Sherman Antitrust Act and that their actions constituted unfair practice in violation of the Federal Trade Commission Act by way of their exclusive contracts with MLB players to appear on Topps baseball cards (67 FTC 744, 833 (1965).)

However, that decision was quickly reversed when the full Commission decided in Topps’ favor.  Among the reasons cited was that as Topps’ contracts with the players were for baseball cards packaged with bubble gum, Fleer (or other companies) could still compete in the market by selling packages of cards containing other (non-gum) novelty items (67 FTC 734, 838-842.)

Fleer took the matter to court in 1975, filing against both Topps and the Major League Baseball Players Association (MLBPA), again charging violations of the antitrust laws in connection with the production and sale of baseball cards.  An attempt to have the suit dismissed was denied (415 F Supp. 176 (1976)) and Fleer ultimately prevailed (501 F Supp. 485 (1980).). The court order laid out the following restrictions:

Defendant Topps Chewing Gum, Inc., is permanently enjoined from:

a. enforcing or threatening to enforce in any court or in any other manner the exclusivity clause in its form contract with major league baseball players;

b. entering into or seeking to enter into any contract with any major or minor league baseball player which reserves to Topps any exclusive right to sell that player’s picture in any form or in combination with any product;

c. entering into, amending, or seeking to enter into or amend any contract with any major or minor league player so as to expand or enlarge the scope of the rights now held in its form contracts with major and minor league baseball players;

d. entering into any renewals of its form contracts with any major or minor league player for longer than two years at a time;

e. enforcing or threatening to enforce in any court or in any other manner the term in its form contracts with major and minor league players and/or with the Major League Baseball Players Association, reserving to Topps the right of first refusal as to the marketing of any product.

The Third Circuit Court of Appeals reversed this decision stating that, by this time, other companies had entered the baseball card market (though without the ubiquitous bubble gum), so that obviously as “Topps and the MLBPA did not have the power to exclude all competition from the relevant market, we cannot sustain the district court’s finding of a section 2 [of the Sherman Act] violation.” (658 F.2d 139 (1981).)  An appeal to the Supreme Court was denied (455 U.S. 1019 (1982). )

So with that victory under its belt, Topps sued Fleer in 1982 stating that the latter company had been “unjustly enriched” by its sale of baseball cards in the period between Fleer’s 1980 victory and the 1981 reversal.  Fleer sought to have this case removed from the Chancery Court of Delaware to the United States District Court claiming original jurisdiction, but the case was remanded back to the Chancery Court (547 F.Supp. 102 (1982).)

(Are you exhausted yet?)

In 1983 Topps brought suit against Fleer again, claiming “that the team logo sticker was a “sham” product, included in the Fleer package “as a pretext for selling Baseball Cards … in violation of [Topps’] exclusive rights” under its contracts with the players.”  This part of the suit was settled out of court.

However another part of this same case was not settled, and Topps continued its claim against co-defendant Major League Baseball Players Association, who was encouraging its members not to renew their contracts with Topps, but instead let the MLBPA negotiate license agreements on their behalf with Topps or other companies.  Various pretrial motions were denied, including Topps’ assertion that it would “suffer irreparable harm” if their request for an injunction requiring the MLBPA to assign rights to Topps for the duration of the case was not granted (641 F.Supp. 1179 (1986).)

The MLBPA filed a counterclaim alleging that Topps exclusive licensing practices “constitutes an unreasonable restraint of trade in violation of section 1 of the Sherman Act”, which was dismissed without prejudice (799 F.2d 851 (1986).)

And finally, Fleer appealed the Chancery Court of Delaware’s decision finding for restitution by Topps for profits earned by Fleer in 1981.  However, the Supreme Court of Delaware did not agree with Fleer that “its profits do not constitute unjust enrichment because Fleer manufactured and marketed baseball cards under the protection of a later-reversed court order,” and ruled in Topps’ favor (539 A.2d 1060 (1988).)

The baseball card rivalry between Fleer and Topps would continue (albeit out of court) until 2005 when Fleer’s “intellectual property and die-cast toy business” was acquired by Upper Deck.

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