By Daniel Wallach
In the more than 100-year history of the NFL, no team owner has ever been compelled by the league’s rules to sell his or her team due to personal misconduct. Dan Snyder, the embattled owner of the Washington Commanders, is poised to become the first person to earn that dubious distinction. After years of enduring one controversy after another involving Snyder, his fellow owners may finally be ready to move against him. At last week’s NFL Fall League Meeting in New York, Colts owner Jim Irsay told assembled media members during an impromptu press conference that he believes “that there’s merit to remove him as owner of the [Commanders].”
However, it’s not as simple as convening an immediate voice vote among the owners. There’s a process that has to be followed. And, of course, you need facts. But those facts may soon arrive in the form of an investigative report by former United States Attorney Mary Jo White, who was hired by the league earlier this year to look into allegations of sexual misconduct made against Snyder by former team employee Tiffani Johnston, who told a congressional roundtable in February that Snyder harassed her at a team dinner, put his hands on her thigh, and later tried to push her into a limousine with his hand on her lower back. The scope of White’s investigation has since widened to include allegations of financial misconduct against the Commanders organization focusing primarily on the underreporting of visiting teams’ ticket revenues.
Depending on her findings, White’s investigative report – which hopefully will be made public – could be the bombshell that triggers the commencement of NFL disciplinary proceedings against Snyder to force him to sell the Commanders. “It all flows from the Mary Jo White Report,” said Sports Business Journal’s NFL reporter Ben Fischer, a recent guest on the ‘Conduct Detrimental’ podcast. Fischer added that “we’re going to know within an hour of reading the report whether it sets out the basis for moving against Snyder. And from there I think it moves quickly.”
And moving “quickly” means to a disciplinary proceeding governed by the NFL Constitution and Bylaws. Get ready to hear all about a “Section 8.13(B) proceeding.” No, it’s not quite the “Section 8” that Corporal Maxwell Q. Klinger pursued to no avail on the M*A*S*H television series. Section 8.13(B) is the specific provision of the NFL Constitution and Bylaws that spells out the disciplinary process and hearing procedures for determining whether an owner has engaged in the type of conduct that would warrant the forced sale of his ownership interest.
The process can be initiated by the NFL Commissioner or by any team owner
There are two different ways that a disciplinary proceeding against an owner can be initiated under the Constitution and Bylaws. The first is through action taken by the NFL Commissioner, who is empowered under Section 8.13(A) to discipline an owner if the Commissioner determines – following “notice and a hearing” – that the owner has “either violated the Constitution . . . or has been or is guilty of conduct detrimental to the welfare of the League or professional football.” Upon such a finding, the Commissioner has the “complete authority” under Section 8.13(A) to suspend the owner, cancel any of his contracts with the league, or impose a fine against such owner in an amount not to exceed $500,000. However, if the Commissioner believes that such penalties are not “adequate or sufficient, considering the nature and gravity of the offense involved,” he can exercise his authority under Section 8.13(B) to “refer” the matter to the League’s Executive Committee – a 32-member body comprised of one representative appointed by each member club – with a recommendation that the owner’s interest in the team be cancelled or forfeited in accordance with the ‘forced sale’ procedures set forth in Section 3.8(B).
Alternatively, under Section 8.13(B), “any member of the Executive Committee” may refer charges “against a member or the holder of any interest therein” on the ground that such member or holder “has violated the provisions of the Constitution and Bylaws or is or has been guilty of conduct detrimental to the League or to professional football.” Upon the referral of such charges to the Secretary of the League, the Commissioner is required to undertake an investigation “as he deems appropriate.” Upon the completion of such investigation, the Commissioner must “submit a copy of the charges by mail to each member club and to the member or person against whom such charges have been made and shall make his recommendation thereon to the member clubs.” The member or person charged would then have 15 days to file a written answer to the charges.
What is the advantage of one mechanism over the other?
From the NFL’s vantagepoint, it might be preferable to have Commissioner Goodell take the initial action pursuant to his authority under Section 8.13(A) for two important reasons. First, there is language in Article 8 stating that “any ruling or decision by the Commissioner,” upon the ratification by an affirmative vote of no less than three-fourths of the members of the league, “shall be final, conclusive, and unappealable” and any party involved in or affected by such decision “agrees to release and waive” any and all claims arising out that decision. In other words, a disciplinary process initiated by the Commissioner might be insulated from any post-hearing judicial attack. By contrast, there is no similar language with respect to disciplinary proceedings that are instituted by an Executive Committee member pursuant to Section 8.13(B).
Second, a ‘Commissioner-initiated’ process pursuant to Section 8.13(A) would ensure that Snyder receives two separate hearings – the one mandated under Section 8.13(A) during the initial proceedings before the Commissioner, and then the one provided under Section 8.13(B) following the Commissioner’s referral to the Executive Committee. While potentially duplicative, having the process initiated by the Commissioner rather than by one of Snyder’s fellow owners – and affording him the maximum number of hearings that are contemplated by Section 8.13 – would help the NFL neutralize any potential arguments by Snyder that the NFL failed to follow its own rules, did not provide him with a fair hearing, or that the owners colluded against him – any one of which could be grounds for overturning the NFL’s decision in court.
The “special meeting” has no limits on the evidence that can be introduced
The next step – regardless of whether it is a Commissioner referral under Section 8.13(A) or an Executive Committee member referral under Section 8.13(B) – would be the scheduling of a “special meeting” to hear the charges against Snyder. Under the NFL Constitution and Bylaws, a “special meeting” can be called by the Commissioner with as little as 7 days’ advance notice. Section 8.13(B) provides that the Commissioner shall be the “presiding officer” at the meeting unless he is the complainant. (The Commissioner would presumably be the “complainant” on his own referral to the Executive Committee pursuant to Section 8.13(A)). In such event, the presiding officer shall be elected by a majority vote of the members attending the meeting. (Spoiler alert: don’t look for Sue Robinson to be in the running for that role. Just a hunch).
The special meeting itself is tantamount to an evidentiary hearing. Snyder would have the right to appear in person and be represented by counsel. Crucially, there are no limits on the evidence that can be introduced and admitted at the hearing. While Section 8.13(B) states that “[s]trict rules of evidence shall not apply, it also provides that “any testimony and documentary evidence submitted to the hearing shall be considered.” The use of the mandatory “shall” strongly suggests that the presiding officer has no discretion to disallow any testimony or documentary evidence submitted, regardless of whether it satisfies the judicial standard for admissibility.
This flexible evidentiary standard could be a double-edged sword for both sides. While it would presumably allow the NFL to introduce evidence of the Washington Commanders’ payment of $1.6 million to settle a sexual misconduct claim against Snyder stemming from an alleged 2009 incident – such payments are normally inadmissible in court – it would also open the door for Snyder to introduce evidence that he has reportedly gathered against his fellow NFL owners in an attempt to show that he is being treated differently (i.e., worse) than others in the ownership ranks who have allegedly committed similar offenses but were never subjected to discipline.
If the presiding hearing officer refuses to allow such evidence to be introduced at the special meeting despite Section 8.13(B)’s declaration that “any testimony and documentary evidence . . . shall be considered,” Snyder would have a credible argument that the NFL failed to follow its own hearing rules – thereby permitting a federal court to depart from the general rule of judicial non-interference with respect to the internal decisions of private associations such as the NFL.
On the other hand, the allowance of such evidence could create a different kind of problem for the league – the risk that harmful or embarrassing information concerning any NFL owner would find its way into the public domain. This dynamic could spark a separate battle between Snyder and his fellow owners over whether the special meeting should be transcribed by a court reporter. For obvious reasons, the league – and most of the owners – would prefer that there be no hearing transcript at all, particularly if Snyder is going to introduce evidence of other owners’ personal misdeeds. However, Snyder would presumably want the special meeting to be transcribed in anticipation of later challenging the league’s disciplinary decision, including the fairness of the hearing, in federal or state court. Without a transcript of the hearing, any judicial inquiry into the fairness of the league’s hearing against Snyder might be a Sisyphean task. Thus, the league’s refusal to allow the hearing to be transcribed could present an additional legal risk to the NFL.
No requirement that incriminating evidence be disclosed prior to the hearing
Despite the adversarial nature of these proceedings – which in many ways resembles a trial – there is no requirement under the NFL Constitution that the league furnish Snyder with copies of any evidentiary material that will be used against him in advance of the hearing. This is in stark contrast to the way that discovery usually works in judicial proceedings, where there is typically a mutual exchange of documentary evidence well before the trial to prevent any unfair surprise. Even player discipline cases under Article 46 of the CBA contemplate an exchange of exhibits at least 10 days prior to the hearing. Instead, Section 8.13(B) merely affords Snyder the right to “an adjournment for a reasonable time to enable . . . him to present rebuttal evidence.” Depending on the magnitude of the evidence presented – and whether and to what extent an adjournment is granted – Snyder could point to this provision in later arguing that he was denied a fair hearing.
The eagerly anticipated Mary Jo White investigative report will likely be at the center of any dispute over the reasonableness of any adjournment granted to Snyder. White’s investigation has already lasted more than six months and will likely encompass multiple subjects, a multi-year time horizon (particularly on the allegations of financial misconduct), dozens of witness interviews, and the review of thousands of documents. Given the expected scope and magnitude of the report, would the NFL have an unfair advantage by being able to present this evidentiary material at the hearing without having previously disclosed such material to Snyder? Would it be unfair and prejudicial to Snyder to grant him an adjournment of only a few weeks when White had nearly one full year to review the same documents and witness testimony prior to rendering her findings? Would the verdict against Snyder already be a fait accompli by the time an adjournment is granted because of Snyder’s counsel’s inability to effectively address in real time those evidentiary materials that had not been previously or fully disclosed to Snyder? Would the jurors – the other 31 owners – have already made up their minds by the time the hearing resumes after an adjournment?
Given the potential risk of a court determining that this delayed evidentiary disclosure would deprive Snyder of a fundamentally fair hearing, it might be prudent for the NFL to provide Snyder and his legal counsel with copies of all the evidentiary material that it will be relying on prior to the commencement of the hearing and to delay the start of the hearing for a reasonable period of time – such as one month – to allow for meaningful review of these materials.
What is the applicable burden of proof?
The NFL Constitution and Bylaws do not specify the burden of proof that applies to disciplinary proceedings pursuant to Section 8.13(B). The term “burden of proof” refers to the obligation imposed upon a party, who alleges a fact or set of facts, to establish the existence thereof by a legally sufficient weight of the evidence. The customary degree of proof in non-criminal cases is the “preponderance of the evidence” standard. This is the standard that the league will likely use in any disciplinary proceeding against Snyder since it already employs that standard in other discipline cases – albeit, involving players – who allegedly committed ‘conduct detrimental’ to the integrity of the league. Under a preponderance of the evidence standard, the league would have to show that it was “more probable than not” that Snyder engaged in the alleged conduct.
24 out of 31 owners have to vote in favor of sustaining the charges
Most important decisions under the NFL Constitution and Bylaws have to be approved by a vote of at least three-fourths of the owners of the member teams. A disciplinary proceeding under Section 8.13(B) to terminate an owner’s interest in a member team is no different, requiring an affirmative vote of not less than three-fourths of the member teams, “excluding the vote of any member in which the person charged has an interest.” Excluding the Washington Commanders, an affirmative vote of at least 24 member teams would be required “to sustain the charges” against Snyder.
A ‘forced sale’ is the likely punishment, but not the only option
In determining the penalty to be imposed against Snyder, the other 31 owners are not restricted to forcing him to sell his ownership interest. As Section 8.13(B) makes plain, the Executive Committee “may impose such other or additional discipline or punishment as it may decide.” For example, in lieu of a forced sale, the Executive Committee could instead decide to impose a monetary fine against Snyder in an amount higher than the $500,000 maximum to which the Commissioner is limited under Section 8.13(A). But the likelihood here is that the Executive Committee – presumably based on the Commissioner’s recommendation – would vote to terminate Snyder’s interest in the Commanders. If that were to happen, Snyder would be required to sell or dispose of his interest in the team pursuant to the procedure outlined in Section 3.8(B).
Snyder would have 120 days to sell the team, otherwise arbitrators fix the price
Under Section 3.8(B), Snyder would have 120 days to “complete” the sale or disposition of his ownership interest in the Washington Commanders’ franchise. If he cannot accomplish this within 120 days, then the price and other terms of the sale or disposition “would be fixed by mutual agreement” between Snyder and Commissioner Goodell. If that cannot be accomplished by mutual agreement, “then the price and other terms shall be fixed by arbitration” with one arbitrator to be selected by the Commissioner and the other by Snyder. If within five (5) days the two arbitrators cannot agree on the price and terms, “then the two arbitrators shall select a third arbitrator and the decision of the majority of the arbitrators shall be binding on all parties.”
This process seems archaic and ill-suited for the current sports franchise marketplace. When this provision was written in the early1970’s, NFL teams were not selling for several billion dollars, or even hundreds of millions of dollars. In 1971, Robert Irsay purchased the Los Angeles Rams for $17 million – and then traded the Rams to Carroll Rosenbloom in exchange for the Baltimore Colts. At that price point – long before the advent of cable television and the internet – it might have made sense for the sales price of a terminated interest to be “fixed” by an arbitration panel – even in the absence of a ready, willing and able buyer. The NFL could just pay the “arbitrated” purchase price and run the team in the interim until it is eventually resold to a qualified bidder.
In the current environment – with the Commanders valued in excess of $5 billion – it is far from a given that a franchise sale would close within 120 days. While the Denver Broncos sold in far less time, the sale of the New York Mets took months to be consummated. A hard and fast deadline would work to the disadvantage of Snyder – and derivatively to all other NFL owners – because a prospective buyer could gain leverage as time winds down on the 120-day clock and keep the price from spiraling upward. Likewise, having an arbitration panel decide the value of the franchise in a vacuum – without a qualified bidder and with so much uncertainty surrounding the location and funding of a new stadium – seems impractical well. With these uncertainties and no buyer, an arbitrated price seems destined to lead to a lower, rather than a higher, valuation.
This risk is magnified, if, as expected, Snyder files a lawsuit to overturn the NFL’s decision to terminate his ownership interest and force a sale. Because of the potential for irreparable harm caused by the mandatory 120-day selling window, Snyder would likely seek a temporary restraining order or preliminary injunction to preserve the status quo while he continues to litigate the case. But what if he does not succeed in securing such relief? He would then face the prospect of having to solicit bids for the team while simultaneously arguing in court that he should not have to sell the team. This would inevitably result in the lapse of the 120-day period, the likely failure to reach an agreement on a price with Commissioner Goodell, and the valuation of the team being determined by an arbitration panel in the absence of any bidding environment. This would not be in the best interests of Snyder, the league, or the other 31 owners (who would stand to benefit from the Commanders selling for the highest price possible). Perhaps this is one area where it might make sense for the parties to agree to stay the Section 3.8(B) process during the pendency of any litigation, while allowing for the possibility of a voluntary sale without the constraints imposed by Section 3.8(B) and without prejudice to the legal rights of any party.
What potential lawsuit claims can Snyder assert?
Any legal effort by Snyder to use the court system to overturn the league’s decision to oust him faces a steep uphill climb. For starters, he will have to overcome language in Section 8.13(B) stating that any ruling or decision to cancel or terminate a person’s ownership interest for ‘conduct detrimental’ to the welfare of the league “shall be final, conclusive, and unappealable,” and, further, that the person involved in or affected by such decision “agrees to release and waive any and all claims that such party may now or hereafter have . . . arising out of or connected with such decision” against the Commissioner, “as well as against the League and any officer or employee thereof and every member club therein.” Such provisions are typically enforced by the courts, although there are exceptions for fraud, duress, lack of consideration, and mutual mistake.
But even assuming that Snyder can overcome that formidable legal hurdle, he must still contend with the fact that the NFL is a private association. Courts are generally reluctant to interfere with the internal decisions of private associations, deferring to the principle that courts are ill-equipped to resolve conflicts involving the interpretation of the organization’s own rules. There are, however, several recognized exceptions to this general rule of judicial non-interference. For example, courts may review the disciplinary decisions of private associations if the entity failed to follow its own rules, failed to provide a fair hearing and/or fair procedures, acted arbitrarily and/or capriciously, or its decisionmaking was the product of fraud, bias, illegality, or collusion.
Along those lines, Snyder could assert that the league acted arbitrarily and capriciously in forcing him to sell his interest when other owners accused of similar misconduct – such as Jerry Jones and Robert Kraft – were never suspended or even investigated. As one court aptly put it, “[d]isparate treatment of similar situations is the essence of ‘arbitrary and capricious.’” This also implicates the related issue of “fair notice.” Ironically, Snyder could invoke the same legal argument that Deshaun Watson somewhat successfully raised in his recent disciplinary case – i.e., that he did not have ‘fair notice’ that he would face expulsion for alleged misconduct that other similarly situated individuals – such as Jones and Kraft – engaged in without any league repercussions.
In advancing this argument, Snyder would lean heavily on Judge Sue Robinson’s “fair notice” analysis in the Watson case. In declining to suspend Watson for the entirety of the 2022 NFL season, Judge Robinson held that principles of “fair notice” and “consistency of treatment among players similarly situated” required her to reject the NFL’s request, which she characterized as both a “dramatic” and “extraordinary change” in position when compared to past disciplinary cases.” As Judge Robinson explained, “[d]efining prohibited conduct plays a critical role in the rule of law, enabling people to predict the consequences of their behavior,” adding that “[it] is inherently unfair to identify conduct as prohibited only after the conduct has been committed, just as it is inherently unjust to change the penalties for such conduct after the fact.”
Even while the acknowledging the league’s flexibility as a private association – allowing it to seemingly operate “as it deems fit” – Judge Robinson stated that “the post-hoc determination of what constitutes prohibited conduct . . . cannot genuinely satisfy the ‘fairness’ prong of the standard of review or justify the imposition of the unprecedented sanction requested by the NFL.”
Citing Judge Robinson’s analysis, Snyder could likewise argue that the “prohibited conduct” in his case is not defined. Presumably, the forced sale of Snyder's ownership interest would be grounded on a finding that he committed "conduct detrimental to the welfare of the league." However, the term “conduct detrimental” is not defined anywhere in the NFL Constitution and Bylaws, even though it is it is mentioned over 20 times. Further, Article IX – revealingly entitled “Prohibited Conduct” – provides specific examples of what constitutes “conduct detrimental.” Section 9.1(A) thereof states that “[the violation of any of the provisions of this Article IX shall constitute conduct detrimental to the League and professional football.” Article IX then proceeds to list numerous examples of “prohibited conduct” that rises to the level of “conduct detrimental to the League and professional football,” spanning some eight pages. Notably, none encompass criminal activities, sexual assault, sexual harassment, or other forms of personal misconduct. According to the canon of ejusdem generis, a general term (such as 'conduct detrimental') should be defined in light of the specific examples provided.
Snyder could also point to Section 6.5(G), which empowers the NFL's 32-member Executive Committee to suspend or remove the Commissioner from office for "conduct detrimental to the best interests of the league" if he "shall be convicted of a crime involving moral turpitude." If a criminal conviction is the minimum threshold for suspending or removing the league's highest-ranking employee, then how can allegations which never led to criminal charges serve as the basis for removing an owner? Snyder could argue that since the league knew how to equate 'conduct detrimental' with crimes of moral turpitude when it came to the removal of the Commissioner, its failure to use similar language to justify the removal of an owner under Section 8.13(B) was intentional, further bolstering his claim that he was not given "fair notice" of the severity of the discipline.
The disparate treatment of Snyder could also fuel a federal antitrust lawsuit, according to Alan Milstein, a prominent New Jersey sports lawyer with experience in antitrust issues. According to Milstein, "Snyder would likely rush to DC Federal Court seeking an injunction claiming the other NFL owners conspired to unlawfully force him to sell the team in violation of the antitrust laws." Milstein explains that "[f]or antitrust purposes, the league is not a single entity but an association of individual corporate entities which compete not just on the field but in the marketplace." He added that "[u]nder the rule of reason," which is the legal standard that applies to such claims, "Snyder would argue that the evidence he reportedly gathered against his fellow owners demonstrates he is being treated differently than others who have committed offenses that the league had assisted in covering up to its economic advantage." Snyder's chances of success on that claim "would largely depend on the quality and quantity of that evidence," Milstein added.
Finally, Snyder could try to overturn his expulsion in court by asserting that the other owners "colluded" with one another to force him out of the league. “Collusion” – which is another one of the recognized exceptions to the general rule of judicial non-interference – has been defined as “secret cooperation for a fraudulent or deceitful purpose.” Here, Snyder would likely point to Jim Irsay’s recent statement that “there’s merit to remove” Snyder as evidencing a preordained decision by the other owners to jettison Snyder before any charges have been filed, suggesting that the eventual hearing will be nothing more than a ‘show’ trial. Further, to the extent that Irsay’s comments were influenced by anything he learned as a result of the NFL’s prior investigation of Snyder overseen by attorney Beth Wilkinson, Snyder could raise yet another legal argument familiar to longtime NFL observers – i.e., that the league is “retroactively” applying its policy to conduct for which Snyder has already been punished , in violation of “fair notice” requirements and the ex post facto clause of the U.S. Constitution.
As you can see, there is no shortage of legal arguments that Snyder could raise in an attempt to remain part of an exclusive fraternity that seemingly no longer wants him. While the owners should have little difficulty getting to 24 votes, they may soon regret not amending the NFL Constitution and Bylaws's outdated disciplinary apparatus when they had the chance. The current document -- which is a vestige from the early 1970's -- contains a number of flaws and inconsistencies that could give Snyder several viable points of entry for challenging any decision to expel him.
The bottom line: it won’t be so easy getting rid of Dan Snyder.
*Daniel Wallach is the co-founder of Conduct Detrimental. He is a nationally recognized gaming and sports betting attorney. You can follow him on Twitter at @WALLACHLEGAL.