Sports Law Blog
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Sunday, August 30, 2015
 
Preview of Tom Brady's court hearing on Monday


Monday is a big day for Tom Brady and his case against the NFL. Here's my Sports Illustrated preview on what to expect in the court hearing and where the case could be headed. I appreciate the excellent insights from John Greabe, Daniel Wallach and Alan Milstein

Tuesday, August 25, 2015
 
Could Tom Brady and Roger Goodell settle Deflategate litigation?

Could Tom Brady and Roger Goodell come to a deal this week? I think that's possible and I explain how it could happen in a new article for Sports Illustrated.

Monday, August 24, 2015
 
Published Speech: The Legal Status of Fantasy Sports in a Changing Business Environment

On March 20, 2015, I had the pleasure of giving a speech at Northern Kentucky Law Review's symposium on the "New Era of Gaming Law" about the legal status of fantasy sports in a changing business environment.   The speech looks at the history of fantasy sports and "daily fantasy sports," as well as the legality of "daily fantasy sports" under federal and state law.  The speech is also among the first to explain why consistent winners in a "daily fantasy sports" contest is not, in itself, enough to indicate the contest is a "game of skill" under relevant state law.

Just in time for fantasy football season, here is a link to my speech.


Saturday, August 22, 2015
 
Catching up on Patrick Kane investigation, Tom Brady v. NFL

It was an extremely busy last few days in the world of sports law. Here are three articles I wrote for Sports Illustrated during that time:

* Deflategate goes back to court: Six keys to the latest hearing

Thursday, August 20, 2015
 
Infield Fly Double Play

On Wednesday night, the Royals turned a double play on an Infield Fly. With bases loaded and one out, a fly ball was hit near the first-base line, even with the mound; the rule was put in effect, the ball was not caught, and the runner on third made the instinctual move of running when the ball hit the ground and was tagged out at home. This is about the third or fourth time I have seen a double play on an I/F/R call in the six seasons I have been tracking.

Although the non-catch here was unintentional (the pitcher and first baseman had a miscommunication), a play such as this shows why the I/F/R does not entirely eliminate the perverse incentive for infielders to intentionally not catch the ball. There is always a chance an infielder could con the runner into taking off when the ball hits the ground and the runner's instinct takes over. And because not catching the ball is costless to the defense (since the batter is out anyway), it could be worth a shot. But this possibility does not undermine the I/F/R. The rule exists because base runners would be helpless if forced to run on a non-catch; it does not exist to save the runners from the consequences of running without thinking. And, of course, had the catcher forgotten to tag the runner (i.e., had the catcher been the one to have the brain cramp), the runner would have scored. In any event, I have only seen two instances of intentional non-catches in six seasons, so clearly the likelihood of success is not high enough to convince infielders to try this on a regular basis.

Tuesday, August 18, 2015
 
Possible Reasons for NJ Sports Betting Delay

Amazingly, we are  still waiting for a decision in the New Jersey sports betting case. If you recall, New Jersey's plan to legalize sports betting is the subject of an ongoing federal court battle playing out before the U.S. Court of Appeals for the Third Circuit. It has been slightly more than five months since the oral argument. Many observers (including me) predicted that the appeal would be decided by May or June, since court statistics reveal that the average time between oral argument and a final decision is 2.7 months. That wait-time has now nearly doubled. I would have expected the Third Circuit to rule by May (or June that the latest) given the absence of any federal constitutional challenges in Christie II (the latest iteration of this controversy). In Christie I, the Third Circuit had to address complex constitutional issues under the Tenth Amendment, the Commerce Clause and the Equal Sovereignty doctrine, and was still able to issue a jumbo 128-page opinion less than three months following the oral argument in that case. By contrast, Christie II is much narrower in scope: the Third Circuit only has to address whether New Jersey’s partial repeal law rises to the level of an “authorization” for purposes of PASPA. There are no constitutional issues. This is a much cleaner opinion to write.

So why the delay then? There may be several factors in play. First, this is an important decision that will have far-reaching consequences. We are talking about the potential nationwide legalization of sports betting. These are big stakes. The Court’s charge is to get it right, not to satisfy any arbitrary deadline. There are a lot of eyes on this case, and many believe that it is ultimately headed to rehearing en banc (and possibly the U.S. Supreme Court), regardless of who wins.  With the prospect of further judicial review a realistic possibility here, it does not surprise me that the Court is taking its time with the decision. No judge wants to be second-guessed. But the delay could also be a sign that this case is not quite the "slam dunk” that many observers originally believed it to be. Oral argument certainly helped New Jersey’s cause (pushing its chances of success to closer to 40%, maybe even much higher), and it may very well be that this case is now “too close to call,” which may explain the delay in the court's decision-making. Could there be a dissenting opinion in the works? Based on the divided oral argument (with Judge Marjorie Rendell seemingly firmly in New Jersey’s camp, or was she just playing devil’s advocate?), it would appear that this case is primed for another dissenting opinion (just like in Christie I).

Or could the delay here just simply be a function of the Third Circuit’s busy workload. Statistics published by the Administrative Office of the United States Courts bear this out. In 2013, when Christie I was decided, the median time for an appeal to be decided (using the filing of the notice of appeal as the starting point) was only 5.9 months. In 2014, that number spiked to 7.1 months (a greater than twenty percent increase), and, in 2015, that number increased further to 7.8 months. So, since Christie I was decided, it is now taking the Third Circuit on average nearly two months longer to decide cases. The current appeal has been pending for only 8 months and 13 days, which is several weeks less than the Circuit average for all of 2015. Thus, the current delay is nothing out of the ordinary.

The complexity of the case is certainly at the crux of it though. As an appellate lawyer, I have seen decisions issued following oral argument in as a few as three weeks. But I have also been part of cases where it took more than one year for a decision to be issued. The wait may soon be over, if the calendar is any indication. As my friend and colleague, Alan Milstein, pointed out the other day, the timing of the opinion may correlate to the employment status of the judicial law clerks (I believe each federal appellate judge gets three). As the judge’s law clerks start departing their clerkships for “greener” pastures around Labor Day, Alan expects to see a flurry of opinions released in the latter part of August, as the departing clerks look to "clear the decks" for the incoming clerks. We could very well see the New Jersey opinion included in this late-August release, particularly if the clerk assigned to write the first draft of the opinion is leaving his or her clerkship at around the same. So, if Alan is right (and never bet against him!), the wait shouldn’t be that much longer.

-- Daniel Wallach





 
The NLRB Decision & The Sports Law Blog

In March 2014, the NLRB's regional office in Chicago decided that Northwestern football players should be defined as employees, and thus have a right to unionize. In a surprise announcement, 510 days later, the NLRB declined to exercise jurisdiction in a case, thereby vacating the earlier decision. The end result is that Northwestern football players are not defined as employees under federal labor law, and therefore unable to unionize.

When the NLRB punts, the contributors to the Sports Law Blog are there to comment on the case. In addition to the posts we've already written on the Sports Log Blog itself, here's a quick round-up of articles and quotes from our contributors from yesterday's news:

Sports Illustrated, "Breaking Down Implications of NLRB Ruling on Northwestern Players Union" by Michael McCann.

Associated Press, "Is the Effort to Unionize College Athletes Dead?" by Jimmy Golen. With quotes from Gabe Feldman & Warren Zola.

Forbes, "NLRB Rejects Northwestern Football Players' Bid to Unionize; Makes Antitrust Lawsuits More Important" by Marc Edelman.

NPR, AirTalk, "NLRB Denies College Athletes Right to Unionize" Quotes from Warren Zola.

Chronicle of Higher Education, "NLRB's Northwestern Ruling Sets a High Bar for Approving Student-Athlete Unions," Quotes from Warren Zola.

Bloomberg Business, "College Sports Gets Open Door for More Unionizing in the Future," Quotes from Warren Zola.

 
Another Take on the NLRB's Punt

Yesterday, the sports law world experienced a temporary reprieve from Deflategate when the five-member National Labor Relations Board declined to assert jurisdiction in the Northwestern case, unceremoniously deflating the question of whether players at private universities have the right to unionize under the Wagner Act.  

One might question why a punt took so long.  To boot (so to speak), the now-vacated decision was almost certainly correct: unlike in the famous 2004 case involving Brown University graduate students, who were denied the right to unionize by the NLRB because they were students first, students playing football at almost any institution serious about football are, whether by choice or circumstance, athletes first and students second.  Indeed, athletes at universities governed by the Wagner Act should, in fact must, be allowed to unionize should they so choose, and any argument to the contrary is on the wrong side of history. 

With that said, one could argue that the notion of college athletes unionizing was always a bit absurd, and was the wrong way to go about achieving the laudable and necessary result of empowering players and achieving equanimity:
  • First, the exact arguments made in favor of unionization would have given the IRS a strong basis to rule that the full amount of a grant-in-aid to a student-athlete, as opposed to just room and board, is includable in gross income and therefore taxable.  For tax purposes at least, unionized athletes receiving monies under the current grant-in-aid framework would have been much worse off than individuals simply attending on a non-athletic scholarship.  We will perhaps never know whether they could have “made up the difference” through collective bargaining, but I doubt it, given that NCAA regulations only allow so much leeway.  
  • Second, athletes really serious about unionization would have flocked to private universities, or public universities in labor-friendly states (because the National Labor Relations Act, of course, only affects private institutions, and state institutions are dealt with under state law).  And then at those private institutions, making matters still more comical, the athletes would have a right that the faculty members lack — unionization (after all, the Supreme Court long ago held, in the NLRB v. Yeshiva University case, that full-time faculty members at private institutions are managerial and therefore cannot unionize).  So you would have the very jealousy and resentment that in some small way at least could be said to support the NCAA’s “argument” against paying athletes!  
  • Third, and finally, a cynical person could even argue, perhaps convincingly, that the students were being “played” by the labor unions (going from being the pawns of the institutions to the pawns of the labor unions) if the unions trying to organize the students knew all these things to be true.  Unions serve incredibly valuable purposes, of course, but ultimately the unionization has to work for the members and not just the union itself.
Appellate experts are in agreement that the NLRB's declination of jurisdiction is essentially unappealable.  Maybe, in these unique circumstances, and at this unique point in time in the history of college athletic reform, that is a good thing.  


Monday, August 17, 2015
 
NLRB punts on Northwestern

Here's my new column for Sports Illustrated on what the NLRB's decision means and it's impact on college sports.

 
NLRB declines jurisdiction in Northwestern football case

The  National Labor Relations Board finally ruled on the efforts of Northwestern football players to unionize, declining to exercise jurisdiction without deciding whether college athletes are statutory employees. The Board determined that "it would not promote stability in labor relations" for it to get involved. It emphasized the unique circumstances of the case and the problem of ruling on union efforts by players in one sport at one school. Professional athlete-unions were sport- or league-wide, not team-wide. FBS schools, including all other Big Ten schools, are public and thus not subject to Board jurisdiction, meaning Northwestern (and 16 other FBS schools) might be able to unionize but not any of its competitors. This also would undermine the NCAA and the Big Ten Conference, which member schools formed to create the uniformity and level playing field that a Northwestern-only union would undermine.

At Workplace Prof, Jeff Hirsch briefly discusses the opinion, arguing that the NLRB's conclusion about instability is understandable, but ignores the way that unionization might have pressured the NCAA to make needed changes. I would make that point even more specifically--unionization is the only way to ensure student-athletes have real power in creating new policies for the NCAA, as opposed to being given a voice that can be easily overridden or ignored by other interests. For example, under the proposed revised governance structure for Division I athletics, student-athletes would hold one vote on a 21-person Board of Directors and two votes on a 38-person Council (the legislative body), a body on which 60 % of the Council must be athletics directors. The NLRB identified some changes that have been made since the filing of the petition, perhaps suggesting its  view that things are improving for student-athletes and even a small number of unions is unnecessary to further NLRA policies.

Matt Bodie and I have been waiting for this decision for a year-and-a-half and had planned on writing a short essay on the decision and the underlying normative issues. Given this resolution, I doubt there is much to say.

Sunday, August 16, 2015
 
Lowering the Bar on Brady's "No Notice" Argument

Has the NFLPA overlooked a key argument in its quest to have Tom Brady's four-game suspension overturned by a federal court? In its recent court filings, the NFLPA argued, among other things, that Commissioner Goodell's arbitration decision (upholding Brady's suspension) "violated the essence of the CBA by disregarding the 'law of the shop' requirement of advance notice of discipline." To bolster this point, the NFLPA draws upon a series of prior arbitration decisions (e.g., Ray Rice and Bountygate) and one judicial decision that is still on appeal (Adrian Peterson) as establishing the "law of the shop" that the NFL is required to give its players "advance notice of disciplinary policies, standards and penalties to be imposed." Specifically, the NFLPA argues that Rice, Peterson and Bountygate establish that the CBA affords players "advance notice of discipline," and that arbitrators are not free to disregard this "essence-of-the-CBA" requirement. While this argument is likely a winner (and I have been on record as predicting a Brady victory based on this specific issue, as have Michael McCann, Alan Milstein, Mike Florio, Steph Stradley, and Dan Werly), it may face a key federal court obstacle: that arbitrators are free to determine (and then reject) whether a prior arbitral decision is the 'law of the shop.'" Along those lines, the NFL has argued that Commissioner Goodell (in his role as the arbitrator) considered Brady's law of the shop argument on "prior notice" (centered on the prior decisional law) and rejected it, and that federal courts are not free to second-guess that decision. The NFL cited case-law authority from virtually every federal circuit court as giving an arbitrator such free reign, and, as such, Brady's notice argument is not necessarily a sure-fire winner. (But query whether Goodell could be an impartial arbitrator in that context when he was on the losing side in each of those prior rulings).

But, instead of tying the "advance notice" requirement to prior arbitral decisions (and thus risk having Judge Berman apply the above legal principle in the Commissioner's favor), might a better approach be to argue that the punishment meted out by Goodell was not drawn from the "essence of the CBA" (a key legal requirement) because it was based (at least certainly in part) on policies and rules outside of the CBA (such as the Competitive Integrity Policy, which is applicable only to teams and not players)? A series of Second Circuit opinions from the late 1980's and early 1990's (but still good law) spell this out quite clearly. In In re Marine Pollution Serv., Inc., 857 F.2d 91 (2d Cir. 1988), the Second Circuit wrote:
An arbitrator's decision is entitled to substantial deference, and the arbitrator need only explicate his reasoning under the contract "in terms that offer even a barely colorable justification for the outcome reached" in order to withstand judicial scrutiny, Andros Compania Maritima, S.A. v. Marc Rich & Co., 579 F.2d 691, 704 (2d Cir. 1978). Nevertheless, "[t]his is not to say that simply making the right noises--noises of contract interpretation--an arbitrator can shield from judicial correction an outlandish disposition of a grievance," Ethyl Corp. v. United Steelworkers, 768 F.2d 180, 187 (7th Cir. 1985), cert. denied, 475 U.S. 1010, 106 S.Ct. 1184 (1986). When it is clear that the arbitrator "must have based his award on some body of thought, or feeling, or policy, or law that is outside the contract (and not incorporated in it by reference . . ., the arbitrator has failed to draw the award from the essence of the collective bargaining agreement.
Id. at 94 (emphasis added); accord, New York Typographical Union No. 6 v. Printers League Section of Ass'n of Graphic Arts, 878 F.2d 56, 60 (2d Cir. 1989) (same); Leed Architectural Prods., Inv. v. United Steelworkers of Am., Local 6674, 916 F.2d 63, 65 (2d Cir. 1990) (where the arbitrator has derived his authority from sources outside the collective bargaining agreement, his award cannot stand).

This argument (which is still in play because the NFLPA's recent federal court submission raises the broader "essence of the CBA" argument and even cites the Marine Pollution decision, though not for that precise point) affords the players' union and Brady an important substantive advantage: it would overcome the NFL's argument that Goodell can consider AND reject prior arbitral decisions in his vast discretion as arbitrator. But one thing an arbitrator can NEVER do in the labor context is base his or her award on policies that are outside of the CBA, and, hence, never the subject of collective bargaining. In this context, the NFLPA would argue that Goodell based his punishment on the team-based Competitive Integrity Policy, which is outside of the CBA and was never even given to the players.

But is that what happened here? As some have pointed out, the NFL's response to that argument is that Brady was punished under Article 46 of the CBA, not the Competitive Integrity Policy, that he had actual notice of the rule about PSI levels and "constructive notice" of the Competitive Integrity Policy, and that he was also aware of the 'conduct detrimental' language in the CBA and the standard player contract. But the Wells Report and the arbitration hearing transcript paint a different picture. Page 1 of the Wells Report, under the heading of "Executive Summary," plainly states that "[t[he investigation was conducted pursuant to the Policy on Integrity of the Game & Enforcement of Competitive Rules." That statement is repeated on page 22 of the Wells Report under the heading of "Scope of Investigation." Further, during NFLPA attorney Jeffrey Kessler's direct examination of Troy Vincent, Mr. Vincent cited the "Game-Day Operations Manual" as the policy which prohibits altering the pressure of footballs.

There is also the related issue of whether Article 46's "conduct detrimental" language can be used as a magic wand by the Commissioner to punish any and all conduct detrimental to the game in any manner that he sees fit. Mike Florio of Pro Football Talk makes a compelling case that it does not. He points to the fact that the NFL and NFLPA previously "negotiated a long list of specific rules spelling out specific punishment for a wide variety of situations where player behavior otherwise could be deemed conduct detrimental to the integrity of the game of professional football." For example, as Florio points out, the NFL's fine schedule "contains many specific instances of behavior that the Commissioner, given his extremely broad powers, could otherwise deem to be 'conduct detrimental.' But the Commissioner can't, because the NFL has already agreed that only a fine is justified for a first and second offense." Florio then uses the example of a player caught using "stickum" to help him catch the footballs thrown to him (a situation which he posits is "more aligned" with the Brady case). Would the receiver be committing "conduct detrimental" to the integrity of the game, Florio asks, if he "knew" that the equipment managers were applying stickum to his gloves? He answers "perhaps," but stresses (and this is his main point) that the "NFL has already agreed that the fine for a first offense would be $8,681."

In its Friday court filing, the NFLPA made a similar argument, noting that the Player Policies "expressly provide that for equipment violations affecting the 'integrity of competition,' "First offenses will result in fines." The mere fact that Brady has notice that an equipment infraction might be deemed 'conduct detrimental,' the NFLPA reasons, "does not give [him] notice about the potential penalty of a four-game suspension when the Player Policies [provide only for fines]. As the NFLPA aptly puts it, "a specifically applicable disciplinary policy necessarily controls over a general provision that certain behavior might be deemed 'conduct detrimental.' . . . The mere fact that players generally know they can be punished for conduct detrimental is insufficient when, as here, there is a specifically applicable policy."

This is a key argument by the NFLPA because it employs basic principles of contract interpretation (and the CBA is a contract): namely, that the specific terms in a contract will "override" the more general provisions. See Barclays Bank PLC v. Giddens (In re Lehman Bros. Holdings Inc.), 761 F.3d 303, 313 (2d Cir. 2014) (“To the extent that there appears to be conflict between these provisions, the specific governs the general.”); Rosewood Apartments Corp. v. Perpignano, 2001 WL 649824, at *4 (S.D.N.Y. June 11, 2001) ("If there is an inconsistency between a general provisions and a specific provision of a contract, the specific provision controls."). Here, the "general provision" is the 'conduct detrimental' language, while the more specific provisions are the Player Policies, which are incorporated into the CBA. If Judge Berman can be persuaded that the Player Policies for "equipment violations" can be read as covering ball tampering/deflation (and not just equipment/uniform violations), the NFLPA could prevail based on this longstanding contract law principle. But, the NFLPA should also consider using the Marine Pollution case to argue that the arbitration award did not draw from the "essence of the CBA" because it relied on non-CBA policies. This ultimately may prove to be the key to a Brady victory.

-- Daniel Wallach

Saturday, August 15, 2015
 
Eden Hazard and a Physician's Ethical Duty to help an Injured Player

We have talked before about the ever-emerging nexus between Bioethics and Sports. A startling example occurred last week at a soccer match between Chelsea and Swansea.

Belgian Chelsea player Eden Hazard had been tripped and, as he writhed in pain on the grass, team doctor Eva Carneiro ran out to attend to what looked like a serious injury. This meant Hazard had “to leave the pitch,” whatever that means, but the bottom line was he could not return to the field. This left Chelsea one player short for the rest of the game which ended in a 2-2 tie.

Chelsea’s manager Jose Mourinho was not happy, commenting that the physician was “impulsive and naïve” and “did not understand the game.” He then announced Dr. Carneiro would not be on the sidelines in the upcoming game against Manchester.

What Mourinho did not understand is that the doctor was adhering to the doctor's ethical obligations which required the care of an injured human being in obvious distress. It is Mourinho who should not just leave the pitch, the pitch should leave him.


Wednesday, August 12, 2015
 
"An Olympian Takes a Stand" Part II

After giving it some more thought, and watching events unfold over the past 48 hours, I'm now more convinced that the story of Nick Symmonds deserves your attention. As such, I wrote an article for the Huffington Post on the subject which you can read here. Hope you can rip yourself away from Deflategate for just a few moments to read the piece.

Monday, August 10, 2015
 
Olympic Athlete Takes a Stand

American runner Nick Symmonds is taking a stand against the US Olympic machine, and like many athletes challenging the status quo, it may cost him dearly. Symmonds won the 800 meters at the US Trials, earning himself a spot on the USA World Championship Team which is a precursor to his third US Olympic team. However, before officially naming him to the team, USA Track & Field (USATF) required Symmonds sign a mandatory "statement of conditions" and, when he failed to do so in a timely fashion, replaced him on the roster.

At issue is the requirement that all athletes wear designated team uniforms at official functions--which means sporting Nike gear per the contract between USATF and Nike. USATF has a long term agreement with Nike through 2040 which provides significant funding to the organization. However, Symmonds is sponsored by Brooks Running, and has certain contractual obligations in his individual endorsement deal.

At question is the breadth of USATF's contract with Nike and how they choose to interpret and impose it on their athletes. Symmonds readily accedes that he will wear the official Nike gear in competition, but if, as reported, USATF is telling him not to even pack any Brooks gear for his travels, doesn't that extend the boundaries of the contract with Nike and violate Symmonds' rights as an endorser?

Like many Olympic athletes, Symmonds receives a huge percentage of his compensation NOT from salaries but from endorsement contracts. The value of those deals are predicated on visibility, including participation in the Olympics. If the USATF can quash that value by assuming exclusivity for themselves, what happens to other Olympic athletes and their endorsement value?

And, unlike professional sports leagues, it's not as if most Olympic athletes are represented by a labor union, negotiating rights and compensation with USATF in exchange for the requirement that they wear Nike apparel. This arrangement appears to be unilaterally imposed upon them, and may hamper their ability to protect and profit from their endorsement rights. Undoubtedly, it will be interesting to see how this situation unfolds, and whether Symmonds will represent his country in Brazil next summer.

Wednesday, August 05, 2015
 
Legal impact of release of Tom Brady's transcript

I have a new piece for Sports Illustrated on why the release of Tom Brady's appeal transcript indicates Brady has a good chance of beating the NFL.

Monday, August 03, 2015
 
Synopsis of Brady and NFLPA Legal Arguments

On Friday, Tom Brady and the NFLPA filed an Answer and Counterclaim in the New York federal court action initiated by the NFL to "confirm" the arbitration award rendered by Commissioner Goodell, which upheld Brady's four-game suspension arising out of Deflategate. This 54-page document lays out the NFLPA's legal arguments as to why Goodell's ruling should not be "confirmed" and, specifically, why it should be "vacated." It's a great piece of writing by Jeffrey Kessler and his team, and I believe it makes a compelling case to vacate Goodell's ruling, especially on the "no-notice" grounds, which have (in my view) constitutional dimensions similar to the Adrian Peterson and Ray Rice cases.

If you don't have access to PACER or just simply do not feel like slogging through a 54-page document, I have outlined the legal arguments raised by Brady and the NFLPA  in their Answer and Counterclaim (which is the "mirror image" of their petition to vacate recently filed in Minnesota). I've basically streamlined their document into a much shorter outline, with some of my own thoughts mixed in (particularly those which relate to what I see as "constitutional-level" violations, as well as a discussion of the applicable standards of review). Click here for the outline. Hope you enjoy it.

Saturday, August 01, 2015
 
Another "Home-Field" Advantage for Tom Brady in New York?

With each passing day, we are discovering that litigating in New York presents Tom Brady with advantages not available to him in Minnesota. As my estimable colleague, Alan Milstein, pointed out the other day, the "manifest disregard of the law" standard for overturning an arbitrator's decision is recognized in the Second Circuit U.S. Court of Appeals (which covers the New York federal courts), but is no longer recognized in the Eighth Circuit (which covers the District of Minnesota, where Tom Brady originally brought his lawsuit). This may or may not a big deal. Only time will tell. But what may ultimately prove to be a "game-changer" for Brady and the NFLPA is the Second Circuit's standard for setting aside an arbitrator's decision on the basis of "evident partiality," which differs markedly from the Eighth Circuit standard.

"Evident partiality" is another way of saying that the arbitrator was biased. In the Second Circuit, "evident partiality" within the meaning of 9 U.S.C. § 10 will be found where "a reasonable person would have to conclude that an arbitrator was partial to one party to the arbitration." Ometto v. ASA Bioenergy Holding A.G., 549 Fed.Appx. 41, 42 (2d Cir.), cert. denied, 134 S.Ct. 2877 (2014). Stated another way, "evident partiality" exists under the law of the Second Circuit where it reasonably looks as though a given arbitrator would tend to favor one of the parties. This does not appear to be a particularly onerous standard to satisfy. Further, evident partiality can be "inferred" from objective facts inconsistent with impartiality. See Kolel Beth Yechiel Mechil of Tartikov, Inc. v. YLL Irrevocable Trust, 729 F.3d 99, 104 (2d Cir. 2013).

Now compare this test to the one espoused by the Eighth Circuit. In a case involving former Vikings players Kevin Williams and Pat Williams (who were each suspended 4 games by the NFL for violating the league's anti-doping policy), the Eighth Circuit described the "evident partiality" standard thusly: the challenging party must put forward facts that "objectively demonstrate such a degree of partiality that a reasonable person could assume that the arbitrator had improper motives.” Williams v. National Football League, 582 F.3d 863, 885 (8th Cir. 2009). This standard has been described as a "heavy burden." Id. Further, the alleged partiality "must be direct, definite, and capable of demonstration." Free Country Design & Const., Inc. v. Properformance Group, Inc., 2011 WL 603298, at *2 (W.D. Mo. Dec. 5, 2011). So, the two circuit approaches to "evident partiality" differ in at least two key respects: the Eighth Circuit requires a showing of an "improper motive," whereas the Second Circuit looks simply to whether a reasonable person would have to conclude that the arbitrator was predisposed to favoring one of the parties. But even more critically, evident partiality in the Second Circuit can be "inferred" from objective facts, whereas in the Eighth Circuit, it must be shown through "direct" proof. And so much of  Brady's counterclaim on "evident partiality" depends on circumstantial proof: the delegation of decision-making authority to Troy Vincent, the public statements lauding the Wells Report, etc.

But wait, there's more. The Eighth Circuit imposes a "heightened bar" for challenges to the partiality of an arbitrator selected under an agreement (e.g., a collective bargaining agreement) that entitles one of the parties to select an "interested" or "partial" arbitrator. In the Eighth Circuit, where the parties' arbitration agreement provides for the selection of a partial arbitrator, a party cannot claim "evident partiality" unless the party can prove that the partial arbitrator "prejudiced" the arbitration award. Winfrey v. Simmons Foods, Inc., 495 F.3d 549, 551 (8th Cir. 2007). As the Eighth Circuit explained in Winfrey, "where the parties have expressly agreed to select partial arbitrators, the award should be confirmed unless the objecting party proves that the arbitrator's partiality prejudicially affected the award." Id. (citing Delta Mine Holding Co. v. AFC Coal Properties, 280 F.3d 815, 821 (8th Cir.2001)). By contrast, the Second Circuit has not adopted this heightened standard. See Scandinavian Reinsurance Co. v. Saint Paul Fire & Marine Ins. Co., 668 F.3d 60, 76 (2d Cir. 2012) ("we need not decide at this time whether the FAA imposes a heightened burden of proving evident partiality in cases in which the allegedly biased arbitrator was party-appointed.").

These material differences could turn out to be of paramount importance to Tom Brady's "evident partiality" challenge. Thus, by "jumping the gun" and filing suit in New York (which I still maintain is a bad faith anticipatory filing, although that ship has sailed by virtue of Judge Kyle's order), the NFL may be guilty of much more than a "false start" or "illegal procedure." And it may ultimately cost them far more than just five yards. The NFL may have unwittingly ceded valuable field position to Brady and the NFLPA, a ironic turn of events given the league's brazen forum-shopping strategy.

-- Daniel Wallach

Thursday, July 30, 2015
 
MORE OF THE BRADY BUNCH


(This post in authored by Alan Milstein)

Sometimes lawyers can outthink themselves.

Much has been written about where Tom Brady was going to file his Motion to Vacate the Commissioner’s arbitration decision. The good money was on Minnesota because the Union has had so much success in that forum particularly with Judge David S. Doty presiding.

Probably for that reason, the NFL sought to blitz the Brady team by simultaneously filing a Petition to Confirm the award at the moment it released the decision. Brady and the Union nevertheless filed the Petition to Vacate in federal court in Minnesota, believing a friendly court would ignore the first-to file-doctrine on the grounds that the NFL had too much of an advantage in choosing the forum. Unfortunately for the Brady Bunch, they did not draw Judge Doty and Judge Richard Kyle promptly transferred the case to New York.

Here's the irony. The Federal Arbitration Act at Title 9 of the U.S. Code sets forth the grounds by which a federal court can vacate an arbitration award. The critical one for this case is “where there was evident partiality . . .in the arbitrator.” What is absent from the applicable provision is what used to be the reason of choice: "manifest disregard of the law." While under this rubric, an arbitration award cannot be reversed for an error of law or a misreading of the facts, it can be vacated if the arbitrator intentionally ignored well-settled law. For example, if the arbitrator knows the statute of limitations is two years, he or she cannot use one or three years as the time to bar an action.

The Circuits are split as to whether manifest disregard of the law is still a reason for vacating an arbitration award. While the Eighth Circuit, which includes Minnesota, has not exactly been consistent on this issue, it generally says it is not. The Second Circuit, on the other hand, which includes New York, says that it is. Compare Medicine Shoppe Int'l v. Turner Invs., Inc.614 F.3d 485, 489 (8th Cir. 2010, with Stolt-Nielson SA v. Animal Feeds Int’l, 548 F.3d 85 (2d Cir. 2008). See also Jay Packaging Group, Inc. v. Mark Andy, Inc,, 2011 U.S. Dist. LEXIS 5721 (E.D. Mo. January 21, 2011) ("[t]he Eighth Circuit has specifically address[ed] this issue, and concluded that a party's attempt to vacate or modify an arbitration award on the basis of an alleged manifest disregard of the law is not a cognizable claim," and "it is well established in the Eighth Circuit that the 'manifest disregard of the law' doctrine is no longer good law.").

Thus, Brady and his team are actually better off in Giants territory than they would be in the land of the Vikings. This would certainly be a critical play for Brady to call given that the under-inflation rule appears to apply only to teams not players and carries only a $25,000 fine.

My bet is still that Brady plays every game.

-- Alan Milstein

Wednesday, July 29, 2015
 
Request: Myths of Baseball Rules

At SEALS earlier this week, I was part of a very successful discussion group titled Baseball and Law, Law and Baseball, which explored a variety of links between baseball and law. My very small piece was a request for ideas on a future work, which I now make to all of you.

I have an idea for a future paper for which I already have a title-- "Tie Goes to the Runner" and Other Myths of Baseball Rules. The paper will explore a bunch of rules that everyone assumes are one thing and often are captured in common, pithy cliches, when in fact they are entirely different, if not the precise opposite. For example, the one from the title--as kids we always said "tie goes to the runner" to make a runner safe when the play is too close to call; in fact, the runner is out unless he beats the throw.

So far, I have five myths: 1) Tie goes to the runner; 2) Infield Fly Rule only applies to balls on the infield and should not be called on balls in the outfield grass; 3) "One base on an overthrow"; 4) Hand is part of the bat (so getting hit on hand when hand on bat is a foul ball); 5) Can't run out of the baseline.

I welcome other suggestions.

 
DEFLATEGATE: ROUND II


(This post in authored by Alan Milstein)

Who says the NFL has no strategy when it comes to meting out discipline?

Not surprisingly, Commissioner Goodell wearing his Judge hat affirmed Tom Brady’s four game suspension he had issued while wearing his policeman hat. For weeks, the media had been speculating as to whether Brady and the Union would appeal the ruling to the player-friendly federal district court in Minneapolis. The Commissioner’s forgone decision seemed ripe for reversal given the obvious bias of an arbitrator asked to overturn his own prior decision, the fact that the evidence was entirely circumstantial and inferential, and because the rule seemed to apply only to teams not players.

As most litigators know, when you obtain a judgment for money damages in arbitration, you need to have it confirmed in court to force the defendant to fork over the money and not suffer the ignominy of what in Pennsylvania we call a writ of execution. But there is absolutely no need for the NFL to have a court confirm an arbitration decision like the one handed down in Deflategate. Such a decision would be self-executing.

So why did the NFL begin an action in federal court in Manhattan to confirm the arbitration award seemingly within minutes of issuing the decision? Because it wanted to be the first filer and avoid facing Judge Doty or one of his Minnesota brethren. To the league, these were more fearsome than Page, Eller, Marshall and Larsen, the legendary Purple People Eaters.

Nothing of course can keep Brady and the Union from filing a Motion to Vacate the award in Minnesota. Sections 9 and 10 of Title 9 of the U.S. Code, however, suggest that, in the absence of an agreement as to which court an arbitration award may be confirmed, the parties must file in the district in which the arbitration had been held, which was the Southern District of New York. But the Code uses the word “may” not “must.”

If Brady and the Union do file in Minnesota, one question is whether the “first to file” doctrine would mean the NFL’s preemptive strike would cause it to prevail in a battle of the courts. As our learned colleague Daniel Wallach points out, however, “courts have departed from a 'first-to-file' rule where one party files its lawsuit in anticipation of an impending suit by the opposing party.” That would certainly be the case here since the NFL had no good reason to file first other than to anticipate that Brady would file in an unfriendly jurisdiction.

My personal view is that the decision will be vacated whichever court hears the appeal. In the words of Title 9, the court may vacate the award “where there was evident partiality . . .in the arbitrator.” That would seem an easy pass to complete.

-- Alan Milstein

Tuesday, July 28, 2015
 
A legal analysis of Tom Brady's potential case against the NFL

Will Tom Brady defeat Roger Goodell in court, or are Brady's arguments better suited for the court of public opinion than the court of law? I explore those and other topics in a new article for Sports Illustrated.

Friday, July 17, 2015
 
Chicago Sports Law Event Featuring ESPN's Lester Munson


If you're going to be in the Chicago area on July 30th, I encourage you attend a sports law networking event at the offices of Foley & Lardner. A 90-minute panel, moderated by ESPN's Lester Munson, will offer an in-depth discussion of the leading sports law controversies of the day. Topics covered will include the regulation of on-and-off-field conduct, player discipline, the Washington Redskins trademark controversy, the changing legal environment of college athletics, the emergence of daily fantasy sports, and the legalization of sports gambling. There will be a 30-minute networking reception prior to and at the conclusion of the event, followed by an offsite gathering at a local area restaurant.

Title:     

Hot Topics in Sports Law

Event Details:

Date:   Thursday, July 30, 2015
When:  5:00 pm-7:00 pm
Where: Foley & Lardner, LLP,  321 N. Clark Street,  Suite 2800, Chicago, IL 60654-5313
Cost:    FREE (Refreshments will be served at the event; however, the post-event gathering at a local
             area restaurant will be “dutch treat”)
RSVP:  Daniel Wallach at Wallachlegal@gmail.com or 305-725-9688
             Robert Bressler at RBressler@foley.com or 312-832-5701

There will be a post-event gathering at BlackFinn Ameripub, 65 West Kinzie Street (located across the street from Foley & Lardner), beginning at approximately 7:15 pm (roughly 15 minutes after the conclusion of the panel). All are invited.

Moderator:

Lester Munson, Senior Writer and Legal Analyst, ESPN

Panelists: 

Mike Feldman, Counsel, Chicago Cubs
Scott Rochelle, VP and General Counsel, National Basketball Retired Players Association
Eldon Ham, Sports Law Professor, Chicago-Kent College of Law
Chris Griffin, Partner, Foley & Lardner, LLP
Cari Grieb, Partner, Chapman & Cutler LLP
Scott Andresen, Partner, Andresen & Associates, P.C.
Daniel Wallach, Partner, Becker & Poliakoff, P.A.

Opening Remarks:

Robert Bressler, Foley & Lardner

Sponsors:

Foley & Lardner, LLP
Chicago Bar Association, Sports Law Committee
American Bar Association, Tort Trial and Insurance Practice Section

Presented in conjunction with the Sports Lawyers Association (the "SLA"). The SLA is a non-profit, international, professional organization whose common goal is the understanding, advancement and ethical practice of sports law.

For additional information, click here.

Hope to see you there!