The dual engagement strategy has created jurisdictional and choice-of-law conflicts for federal judges. District courts often ruled that league restrictions on free agency are anti-competitive business practices. Seeing no conflict between antitrust and labor law, they issued injunctions or found antitrust violations.

But the data in this study show a different side to the jurisdiction and choice-of-law story. After passage of the Sherman Act, businesses used this law ironically to challenge unions. Congress concluded that federal judges subverted antitrust law by enjoining union activities in labor disputes; and consequently, enacted a “labor exemption” to protect workers from this potent economic regulation. But the Clayton Act stated the labor exemption vaguely, referring to labor organizations but not their activities. When courts continued to issue injunctions in labor disputes, Congress responded again by stripping their jurisdiction in the Norris-LaGuardia Act.

This history came to life in my sample. Some courts perceived an intolerable conflict between antitrust and labor law. Thus, they denied jurisdiction to player complaints, or ruled that league-imposed labor restraints are immune under the antitrust “labor exemption.” This background provides essential context for the main findings in my statistical analysis:

(1) When leagues pleaded the Norris-LaGuardia Act as a jurisdictional defense to an antitrust injunction, district and appellate courts differed significantly in their rulings. Trial judges rejected Norris-LaGuardia arguments in 5.0% of cases in the district court sample, and accepted it in 1.7%. But appellate courts reversed this pattern by applying the Norris-LaGuardia defense in 13.0% of their decisions—meaning that these judges ruled that lower courts lacked jurisdiction.

(2) Ruling on the antitrust labor exemption, district courts rejected this league defense in 15.0% of cases, and applied it in 8.3%. Appellate courts treated the issue differently, applying the exemption in 26.1% of their cases and rejecting it only once (4.3%). Thus, appellate courts were more likely to immunize the disputed restriction from antitrust enforcement. In other words, appellate courts chose to apply the NLRA over the Sherman Act more often than district courts.

(3) District courts usually did not rule on a motion for an injunction (73.3% of the cases). But when they ruled on this motion, they were more likely to grant (20.0%) or affirm (1.7%) an injunction than deny this order (5.0%). Appellate courts behaved differently. More than half their rulings did not involve an injunction (60.9%). However, when they ruled on an injunction, they stayed or vacated 8 injunctions (34.8% of their cases), and affirmed only 1 order (4.3%).

In sum, district and appellate judges behaved differently in these hybrid labor law-antitrust cases. Some cases involved the highly technical antitrust labor exemption. In those cases, district judges committed “technical fouls” by failing to apply this exemption as required by federal labor law. In injunction cases, where district courts often granted the motion but appellate courts routinely overruled them, the former were guilty of “false starts.” On the one hand, the data suggest that appellate courts have cleaned up these district court “fouls,” and therefore, no legislative remedy is indicated. But the cases also imply that by the time appellate courts corrected lower courts, a judge’s “false start” or “technical foul” altered the balance of bargaining power, enabling players to gain an advantage that they could not achieve through collective bargaining. Regardless of whether federal judicial power should be legislatively curbed in sports labor disputes, or left to appellate correction, my study shows that district courts often misuse their power in these antitrust cases.

In this Article, we first examine the efficiency literature’s claims about the common law and find that it fails to accurately account for important distinctions across common law legal systems and under-specifies key terms. We next turn to the lengthy debate over replacing the common law with a civil code that raged across the nineteenth century United States, drawing from the arguments of the participants the key factors that promote efficient outcomes. We conclude that a focus on legal systems’ ability to cheaply identify efficient rules, restrain rent-seeking in the formulation and application of rules, adapt rules to changed conditions, reveal the law to those affected by it, and enable contracting around inefficient rules would be more appropriate than the current emphasis on labels. Further, more attention to transition costs would make efforts at reform more credible.

This paper discusses the efficiency of the common law hypothesis from the perspective of hybrid jurisdictions. We argue that the complexities of legal systems require a more nuanced analysis. The consequence is that there is no single efficient outcome, thus undermining the “one-size-fits-all” theory of the legal origins literature.

My study draws from legal and industrial relations theories to explain how labor agreements in pro sports are settled by collective bargaining or antitrust litigation. First, when courts do not define the antitrust-labor law boundary so that labor disputes are exempt from their jurisdiction, they open an alternative path to bargaining these agreements. Second, when courts entertain antitrust lawsuits, they raise the odds that economic weapons under the NLRA will not be used because of judicial inclination to protect players from irreparable harm and injury resulting from league-imposed labor market restrictions. Third, as this behavior becomes a pattern, collective bargaining is disrupted by faulty information as players, unions, and leagues guesstimate the odds that their differences will be settled at a collective bargaining table or in a court supervised negotiation. Fourth, as players negotiate better agreements in court compared to the bargaining table, they become addicted to this settlement process.

To apply these theories, I use data from 82 federal antitrust court opinions from 1965-2011. Individual players are the most common antitrust plaintiff (65.5%), compared to player unions (8.6%). This means the dispute resolution processes of collective bargaining are supplanted by litigation in federal courts. And except for baseball players, pro athletes often lose labor disputes when economic weapons are used. Their dismal bargaining experience substantially improves, however, by suing under the Sherman Act. In court, players win 43.9% of the rulings, compared to 46.3% for the leagues. These rulings—for example, an injunction that ends a league’s restrictions on free agency— can have dramatic consequences for antitrust settlements that are later codified in a collective bargaining agreement. Textual analysis of cases supports this conclusion.

Applying the “narcotic effect” theory from industrial relations, I conclude that antitrust litigation addicts players in football and basketball to the adjudicatory procedures of the Sherman Act— thereby replacing collective bargaining. This is undesirable because Congress intended, under the NLRA, to leave labor and management free from government interference as they adjust their differences. In contrast, baseball’s total exemption from antitrust law, combined with its high frequency of work stoppages, shows what happens when the opiate of antitrust litigation is not available to players: In time, labor and management establish an informed bargaining protocol, and work through their issues by making difficult concessions on their own. As long as courts entertain these sports lawsuits under the Sherman Act, collective bargaining will be subverted.