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

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

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

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.

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!

            

Founding Fathers: NBA Free Agency & Independence Day

As we celebrate July 4th and our nation's independence, it's appropriate to also connect that celebration to the utter mayhem of this past week's NBA free agency. Individual rights, and the pursuit of happiness and freedom are defining hallmarks of our country. And, unquestionably, they are also the driving principles of professional sports unions.

This year's crop of NBA free agents signed for nearly $1.5 billion in the frantic 48 hours after midnight on July 1st. To many, the salaries paid to basketball players appears obscene, creating the impression that they are an overpaid workforce. Surprisingly, however, player salaries are artificially depressed due to the NBA's salary cap which restricts team payrolls, and therefore player salaries. 

So begins my new article for the Huffington Post.

Slava Voynov's Immigration Problem

Last November, Los Angeles Kings’ Defenseman Slava Voynov was arrested for domestic violence charges, which I wrote about in detail here. After the slow grind of the criminal justice system, yesterday we finally learned the outcome of Mr. Voynov’s criminal case.

In a deal to avoid trial on felony charges, Mr. Voynov has pled no contest to misdemeanor Corporal Injury to Spouse with Great Bodily Injury in violation of California Penal Code 273.5. While this plea does avoid the chance of being found guilty of a felony, Mr. Voynov’s plea nonetheless renders him deportable as a crime of domestic violence.

The issue of his deportability under this plea was firmly settled earlier this year by a decision in the 9th Circuit Court of Appeals: Marquez Carrillo v. Holder. In that case, the court held that no matter how a plea to a violation of Cal. P.C. 273.5 is structured, it is always considered a crime involving domestic violence, making the perpetrator subject to removal from the United States.

This is a fact Mr. Voynov’s lawyers surely knew, so the question remains of why he would agree to such a plea, especially when it appeared that his wife was a less-than-cooperative witness. The answer may lie in Mr. Voynov’s wife’s immigration status.

Although much like with Mr. Voynov, we do not know the specifics of her immigration status, we can presume that she is also not a United States citizen. When she began refusing to cooperate or be a witness for the state, the judge threatened her with contempt, which if charged as a felony, would make her deportable. Thus, she may have been forced to testify regardless of her personal desires in the matter.

There also appeared to be a number of other witnesses to the aftermath of the domestic violence committed by Mr. Voynov, both to the injuries of his wife and to statements both Mr. Voynov and his wife made. Therefore, even if she was not a good witness for the state, it appears likely that the prosecution would have been able to prove the felony charges.  With all of that information, it appears that Mr. Voynov’s best course of action truly was to take a plea deal to avoid felony charges, even though this conviction will render him deportable.

At this point, the Department of Homeland Security now has the right to begin removal proceedings against Mr. Voynov. It is always up to their discretion whether to do so or not, but they typically do not exercise their discretion in favor of perpetrators of domestic violence.   If proceedings are brought against Mr. Voynov, he may be eligible for relief against a deportation, but without knowing more about his status and history in the United States, it is too hard to speculate at what that relief might be.

In addition, even if the Department of Homeland Security does not initiate removal proceedings against Mr. Voynov, if his immigration status was based on a non-immigrant visa through his employment with the Los Angeles Kings, he may find that status suddenly revoked if the Kings cancel his contract and no other team is willing to sign him.  Either way, it appears as if we may have seen Mr. Voynov’s last NHL game.

Correction: An earlier version of this post incorrectly stated that Slava Voynov pled guilty. It has been corrected to reflect his plea of no contest.