If your mind hurts a bit from reading that, it should. There is actually a bit of complex history and telling attributes about Ms. Sotomayor than meets the eye, and it involved her role in a prominent bit of sports legalism and her conclusion to it.

Yes, dear reader, that case was the Maurice Clarett case. Seeing as how the majority of readers on this blog are probably Bronco fans you may remember him as the 3rd round pick that created such a stir, only to unceremoniously be cut in training camp that same year. Such is life in the NFL.

What many also remember about Clarett is that he sought early exit from the NCAA, trying to ply his trade in the NFL. He loved to party and, though talented, kind of an magnet for trouble. After several high profile spats with administrators and filing a false police report, he was expelled from Ohio State. So, he did what any reasonable young man with his talents would do, he tried to enter the NFL.

The NFL has an age restriction on it, and no one had ever tried to seriously challenge it in court. Clarett’s lawyer tried to do just that, arguing that Clarett had the right to ply his trade of being a talented football player. He couldn’t do this due to the NFL’s age restriction, and since the NFL is the only gig in the world to play football, poor Clarett was SOL.

Now, normally this wouldn’t be a big deal. If company A won’t hire me until I’m 21 than company B will be more than willing to accommodate in order to receive my services (in the absence of any legal restrictions, of course).  Company A will eventually have to remove its age cap, or company B will out compete it in terms of labor efficiency.

Where Clarett has a case is when we enter the upside down world of sports economics. In this world, teams that make up a league are known to economists as a cartel. Yes, that’s right, the NFL, NBA, MLB and MLS play by the same economic rules as OPEC. This has a plethora of consequences, but the most significant is the suppression of wages for athletes.  Econlib has an excellent write up of this if anyone is interested.

So Clarett is stuck between two extremely powerful cartels, the NCAA and the NFL. The two collude with each other to suppress the wages of athletes the extent that they don’t have to pay them what their actual contribution to the end product is. The NCAA is the worst for this. Football and basketball athletes get a mere fraction of a penny to the dollar for their marginal contribution to the school. Athletes are also subject to strict rules that prohibit them from changing schools or programs for higher pay or more compensation. Commit to a losing program, and you’re pretty much stuck there for the entirety of your career. Professional leagues are often bad as well, implementing salary caps, non-guaranteed contracts and barriers to entry for new teams.

So, it sucks to be in this cartel, right? Television, movie stars and blue chip authors make millions more than athletes without a squeak from anyone in the media. Athletes in this case actually don’t want  a more restrictive labor market, a completely open market would be a big improvement over the current system. John Elway would be getting paid the big bucks up there with the Oprah Winfreys of the world. So, oftentimes players unions actually argue in favor of more open labor markets, something akin to MLB baseball (which have the highest player salaries, by the way), and less like NFL football (who has the lowest median salary, roughly 800,000).

Unions acting this way are in fact the exact opposite of how unions normally behave. Unions seek to drive up labor wages by forming a cartel of their own. They wish to exclude outside participation, basically close shop. This precludes wage competition, since the pool of potential employees is squeezed off at the pass. So, in practice, most unions desire a more restrictive labor market to benefit their members.

Here’s where things get interesting, both of these groups are under anti trust exemption (although federal labor law isn’t called that). Sports leagues are under de facto anti trust exemption since the seminal ruling in 1921 granting baseball total exemption. This allows leagues to practice exclusion and exercise monopoly power over player’s wages. To further complicate things, unions enjoy the same exemption. In this case and how it was ruled and handled, it creates an interesting catch-22 for Ms. Sotomayor and the court of appeals for the second circuit.

Let’s add another twist to this by examining the NFL’s argument:

The NFL argued that the federal anti-trust laws didn’t apply because another set of laws, federal labor law, preempts or basically knocks the anti-trust law out from applying.  (via Smart Football)

Yes, you read that right, one cartel argues that its right to behave like a cartel is predicated on a law that protects the second cartel. Not only that, but the agreement with their own union, one who would rather have a free market system in the first place.

Sotomayor can’t have this, these kids wishing to ply their trade for free and trampling all over labor restrictions. It is, after all, what allows unions to exist. In this case, however, she allows for the suppression of wages to the disadvantage of laborers. Clarett was just a caught in the swirling vortex of three powerful cartels, traditional unions, the NCAA and the NFL. Sotomayor wanted to preserve the power of traditional unions, so she ruled in favor of a wage suppressing cartel to do it.

What’s worse, or at least more morally repugnant, is that Sotomayor had an opportunity to rule in favor of an invisible sufferer, and not just that clown of a human being Clarett. She could have laid to groundwork for thousands of athletes nationwide to begin getting compensated appropriately by universities and professional sports teams; she could have broken down the wall unions erect to keep out qualified job applicants from their workforce;  she could have begun to establish the necessary right to ply your trade where one is able to be hired. This would’ve been a boon to economic freedom.

Instead, the special interests and the powerful won, and a liberal enabled them to do it. Perhaps that explains Obama’s attraction to her ideology.

*edit 06/15/09- edited a few grammatical errors and for clarity in a couple of cases