By Daniel Wallach
The deck is heavily stacked against any litigant who seeks to overturn a labor arbitration decision in federal court -- with labor awards denied confirmation in fewer than 10% of cases filed in the Southern District of New York, which just so happens to be the NFL's preferred forum for seeking judicial confirmation of arbitrated player disciplinary rulings.
By contrast, the NFLPA's preferred judicial forum for challenging arbitrated disciplinary rulings has been "anywhere but New York," as the union has sought to vacate arbitration decisions in the District of Minnesota (where it has obtained favorable rulings in the past before U.S. District Judge David Doty), and, more recently, in the Eastern District of Texas (where the NFLPA secured an early, but short-lived, court victory for Ezekiel Elliott in 2017).
Is The Race To The Courthouse Rigged in the NFL's Favor?
This wide disparity in outcomes -- with the NFL usually winning in the Southern District of New York (see Elliott and Brady, albeit, following an appeal) and the NFLPA enjoying success in the Minnesota and Texas federal courts -- has spawned a literal "race to the courthouse" between the NFL and NFLPA to secure the more favorable judicial forum whenever there is a league-arbitrated player disciplinary decision. The NFL will ordinarily file a motion or petition to "confirm" the arbitration decision -- which seeks to enforce or give effect to the arbitrator's ruling -- while the NFLPA will typically file a motion or petition to "vacate" (or overturn) the arbitrator's ruling (particularly when it imposes or upholds a player suspension).
The need for a "race" to the courthouse is due to the application of the first-to-file rule, a judicial doctrine which recognizes that the first federal district court which obtains jurisdiction over the issues and the parties has priority, with the second federal court typically declining jurisdiction in deference to the first-filed lawsuit. Under the first-to-file rule, the lawsuit which is filed first generally has priority absent a showing of special circumstances (such as bad faith, forum shopping, or other inequitable conduct).
And it's been an unfair -- some might even say fixed -- race in recent years, as the NFL invariably files the first lawsuit in federal court because it controls the "timing" of the release of the arbitration decision since the arbitrator is either NFL Commissioner Roger Goodell or a "designee" with close ties to the league (such as Harold Henderson, the arbitrator in the Elliott disciplinary matter).
It has long been suspected (but never alleged or proven) that the NFL gets an unfair head start in the proverbial race to the courthouse because the NFL-affiliated arbitrator provides the league with a copy of the arbitration decision before sharing it with the NFLPA. Such an ex parte communication -- if it occurs (and can be proven) -- would constitute the requisite "compelling circumstances" -- such as in cases of bad faith, anticipatory suits, or forum shopping -- that warrants a departure from the first-to-file rule.
Despite these suspicions (particularly in the Brady case), the NFLPA has never once argued that the NFL benefitted from an unfair advantage in timing due to being "tipped off" about the decision by the NFL-affiliated arbitrator. But all bets should be off in the Deshaun Watson case, where, to have a more realistic chance of prevailing, the NFLPA must secure jurisdiction in Delaware -- either by filing the first lawsuit or successfully arguing that the NFL acted in "bad faith" by engineering an early release of the arbitrator's decision to ensure that it won the race to the courthouse. Additionally, under a recent California federal court decision (more on that below), the NFLPA can argue that, as the party seeking to vacate the arbitration decision, the NFLPA is the "natural plaintiff" and its later-filed lawsuit should have priority because the arbitrator's decision is immediately binding upon Deshaun Watson per Article 46 of the CBA without the need for judicial confirmation.
Why Delaware Should be the Preferred Forum for the NFLPA
The case for filing suit in the Delaware federal court system is straightforward. It is the most favorable venue for the NFLPA for one obvious reason. That is the venue where Sue L. Robinson, the jointly selected Disciplinary Officer, served as a federal judge for more than 25 years. She also served as the Chief Judge for the District of Delaware between 2000 and 2007.
Of the 5 federal district judges who currently serve on the bench in the District of Delaware, Judge Robinson served with 3 of them; and the other two judges -- both appointed in 2018 -- regularly appeared in her courtroom when they were practicing attorneys in Wilmington, Delaware.
The importance of litigating this case in Delaware -- at least from the NFLPA's perspective -- stems from the fact that Judge Robinson's "fair notice" analysis will likely be one of the linchpins of the NFLPA's motion to vacate arbitrator Peter C. Harvey's modified discipline. In declining to suspend Watson for the full year requested by the NFL, Judge Robinson determined that the league failed to provide NFL players with "fair notice" that non-violent conduct (which has never resulted in a suspension of any longer than 3 games since the inception of the Personal Conduct Policy) could be disciplined "more severely" than "violent" conduct (which warrants a suspension of at least 6 games for a first-time offense).
She characterized this as both a "dramatic shift" and "extraordinary change" in the NFL's disciplinary approach and culture, comparing it unfavorably with the "fair notice" that the league provided the players in 2014 when it amended the Personal Conduct Policy to provide for a presumptive 6-game suspension without pay for certain first-time violent offenders in the aftermath of the Ray Rice debacle.
The "fair notice" principle is a subset of industrial due process. It requires that a person have fair notice not only of the "conduct" that will subject him or her to discipline, but also of the "severity" of the discipline that could be imposed. (See, e.g., William E. Hartsfield, Investigating Employee Misconduct, Vol. 3, Ch. 15, Arbitration, Sec. 15.7 (July 2022 update) (stating that the concept of industrial due process "includes fair notice of the rule and the consequences for violating it. "). Judge Robinson described this principle in her decision as giving the players "fair notice" of the "probable consequences" of certain proscribed conduct. (The NFL has acknowledged the vitality of the "fair notice" requirement in matters of player discipline under the Personal Conduct Policy. During the 2014 arbitration arising out of the 6-game suspension of Ray Rice, Commissioner Goodell described the 2014 policy change as "forward looking because the League is 'required to provide proper notification'" to the players).
While there is no guarantee that this argument will persuade a federal court judge to vacate NFL-appointed Arbitrator Peter C. Harvey's modified discipline, Judge Robinson's reasoning and analysis will likely be accorded greater respect in a tribunal where she served as a federal judge (including as the chief judge) for more than a quarter of a century.
Further, let's not lose sight of the fact that Judge Robinson is the only neutral and impartial arbitrator in this case. By contrast, Peter C. Harvey is a longtime outside counsel for the NFL and serves in various advisory capacities for the league, including as a member of the NFL's Diversity Advisory Committee. In addition, he advocates for victims of sexual assault and sexual violence as the Vice-Chair of the Board of Directors for "Futures Without Violence," a nonprofit organization focused on ending violence against women and children.
While not quite rising to the level of "evident partiality" (or maybe it does, but that's for another day), a Delaware federal judge might be inclined to accord greater weight to the well-reasoned analysis of a former judicial colleague -- who is neutral -- than that of a private lawyer with such deep and profound ties to the NFL and who also happens to advocate for victims of sexual assault, further calling in to question his overall objectivity on the issue. In this case, optics may matter and the stark differences between the two decision-makers would be magnified in Delaware.
NFLPA Must Demand Simultaneous Notification of Arbitrator Harvey's Appellate Decision
Now comes to the hard part -- winning the race to the courthouse. But how can the NFLPA file the first lawsuit in Delaware if the NFL-affiliated arbitrator provides the NFL's outside counsel with a copy of the decision prior to furnishing a copy to the NFLPA? The NFLPA's outside counsel, Jeffrey Kessler, can take several protective measures to ensure that the NFL does not again wrongly benefit from such early notification. First, he should elicit an assurance from the arbitrator, Peter C. Harvey, that both sides will receive notification of his decision at the exact same time and though the same mode of communication, such as electronic mail. Second, the NFLPA should prepare a shell complaint to be uploaded to PACER by Delaware local counsel as soon as possible after receiving notice and a copy of Arbitrator Harvey's ruling by email.
If these precautionary steps do not result in the NFLPA having the first-filed lawsuit, then it raises the specter of the NFL again benefitting from the early release of the arbitrator's opinion. If that were to happen, the NFLPA should not turn the other cheek -- as it did in the Brady and Elliott cases -- and acquiesce to the NFL's chosen forum (the Southern District of New York) as if nothing happened. Instead, the NFLPA should file a motion with the New York federal court requesting the transfer of the first-filed lawsuit to the District of Delaware on the basis that "compelling circumstances" exist that would warrant a departure from the first-to-file rule. As one federal court observed, "[c]ompelling circumstances sufficient to trump a plaintiff's first-filed choice of forum include a bad faith filing by that plaintiff in an attempt to win the race to the courthouse." (Di-Hed Yokes, Inc. v. Imas Dell'Orto of Am., Inc., 2005 WL 8163015, at *3 (D. Minn. Nov. 16, 2005)). Here, the requisite "bad faith" could be shown by evidence that the NFL was only able to file the first lawsuit because it was tipped off early to the decision by the NFL-affiliated arbitrator.
The NFLPA is the Natural Plaintiff in This Controversy
Alternatively, the NFLPA could argue that the NFL's same-day filing in the Southern District of New York was made in bad faith because confirmation of Peter C. Harvey's arbitration decision is unnecessary. This is because Article 46 of the NFL/NFLPA Collective Bargaining Agreement already provides that the arbitrator's decision on appeal "will constitute a full, final, and complete disposition of the dispute and will be binding upon the player(s), Club(s) and the parties to this Agreement." (CBA Art. 46, Sec. 1(e)(v)) (emphasis added).
Since the arbitrator's decision is binding on Watson as soon as it is issued, the NFL's race to the Southern District of New York to file an unnecessary motion to confirm could legitimately be characterized as a bad faith attempt by the NFL to deprive the NFLPA -- the true plaintiff -- of its choice of forum. Delaware has an obvious nexus to the controversy since that is where the disciplinary evidentiary hearing before Judge Robinson was conducted.
A recent California federal court decision involving strikingly similar circumstances -- where a party raced to the courthouse to unnecessarily confirm an arbitration award that was already binding on the parties -- can be relied upon by the NFLPA to urge the New York federal court to dismiss or stay the NFL's first-filed lawsuit, or, alternatively, to transfer it to the District of Delaware, where the NFLPA's second-filed suit would be pending. See AIDS Healthcare Found. v. Caremark, LLC, 2022 WL 2903136 (C.D. Cal. May 27, 2002) ("As the party seeking to challenge the arbitrator's award, Caremark is the natural 'plaintiff' or 'appellant' in the case, to draw the analogy. In fact, as AHF concedes in its Opposition, it is not required to obtain judicial confirmation to enforce the arbitration award. It therefore makes logical sense for Caremark to file its motion to vacate first, which unlike AHF's petition, is a necessary filing for it to obtain the relief it desires. . . . Caremark's filing in Arizona also does not evidence forum shopping, when Arizona was the site of the arbitration and therefore is a natural venue for judicial review.").
If the NFLPA can secure a Delaware judicial forum -- either by winning the proverbial race to the courthouse or by successfully arguing against the application of the first-to-file rule, Deshaun Watson's chances of seeing the field by Week 7 could increase dramatically.
*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.
