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- Wild Allegations and Their Consequences: The Freddie Freeman Saga
“That’s Fucking ridiculous!” said Joshua Kusnick, former MLB player agent and guest on the most recent iteration of the Conduct Detrimental Podcast. I couldn’t have said it any better myself. In a story first reported by Doug Gottlieb, A Fox Sports radio host, Doug made a few wild allegations relating to the reasons star first baseman Freddie Freeman fired his agent, Casey Close. Doug’s “source” reportedly told him that the firing was related to the fact Casey and the agency he worked for failed to communicate the Braves' final offer to Freeman in the offseason prior to his move to Los Angeles In the same podcast that the beautifully succinct quote from above was pulled from, Joshua, Dan, as well as the other members of the podcast all examine and weigh in on the possibility of the allegation being true, and the implications both if it turned out to be true and also the more likely option that it was the manufactured story given to Gottlieb by someone pushing an agenda. As a Braves fan there was part of me reading the article for the first time that wanted to believe that the allegations were true and at the Braves weren't the ones that ultimately caused Freeman to go to Los Angeles for more money, but the more that I thought about it and looked at it the less likely that outcome actually is. The fact of the matter is that Casey, as well as the agency he works for, Excel Sports Group, are incredibly Braves friendly. They are the same agency that represented Chipper Jones and helped him to stay a Brave for his entire career, and they represent many other current Braves players and prospects. The idea that an agency with such close ties to the team they reportedly “screwed over” in dealings for one of their club favorites is absolutely ludicrous, and it appears to have no basis. I can't pretend to know exactly what went on behind closed doors with Freeman agents in the club, but after all my interactions with current and past MLB agents, the idea that a final offer reportedly worth approximately $160 million wasn't communicated to Freeman? That simply wouldn't have happened, and if it did Casey would likely be suspended indefinitely by the MLBPA. Both Casey’s and the agency's vehement denial of these facts and their “pursuit of all legal options” against Dough seems to indicate it is false. It's not all that uncommon for a player to switch agencies even once they have made it as big as Freddie has. After Freddie made the move to LA, it would make sense if he no longer wanted to be associated with an agency that has such close ties with the club that he just left. Also, it wouldn't make sense if these allegations were true to leave the agency now—Excel and Casey will both get paid regardless of current employment for the remainder of Freddie’s contract, as they're the ones negotiated in for him. With all this said, I'm left with one burning question I'm unable to answer. If these allegations are false (and they are very likely to be), who was it that would have had the motive to have this story published in the first place? Well, the more that I thought about it only two possible answers exist. Option one is that it was perpetrated by whatever firm Freddie plans to go with to represent him in the future. However, that would have very bold move on their part even despite the competition normalized in the industry between rival agents and agencies. The only other possible option in my mind is that someone within the Braves organization wanted this article to be published so that the public perception would shift, making them look like they are the “good guys” for bringing in Matt Olson as his replacement. I don't like either of these options, especially as a Braves fan—but unfortunately, I think the most likely of these outcomes is that it was perpetrated by someone within the Braves organization. Even if this is the case, I still don't fully understand the logic behind the decision. What is the best way to show the public that you made the right decision? Publicize it every time Olson does something good either on the field or off the field instead of spending a wild narrative that could potentially ruin an agent's career with a story that is incredibly unlikely to have occurred given the state and regulation of agent’s behaviors as fiduciaries of the players they represent. Regardless of what actually happened, I hope that this debacle is the exception and not the rule for any organization (whether agency or team front office) going forward. Agents are bound to do what is best for their clients, which also happens to be what is best for them to make the most money. The idea that an agent would blatantly ignore their fiduciary duties, as well as a better payday for themselves, is completely ludicrous, and I'm sincerely surprised any “reputable” reporter would write such a story or issue such a tweet. On the more legal side of things, Casey, as well as Excel Sports could have a very strong defamation suit against Doug, but they face the hurdle of proving that it was published with actual malice. This could be difficult to prove if Doug actually trusted the source that gave it to him no matter how crazy it was for him to actually do so—this would mean they would have no case against him. However it ultimately ends, let this situation be an example for everyone to make sure the sources you're using are actually reputable because otherwise you become “the boy who cried wolf” and anything you write cannot be trusted. Zachary Bryson is a graduate from Wake Forest University with B.A. in Economics and a Minor in Entrepreneurship. He is currently a JD candidate at Elon University School of Law, Class of 2023. You can connect with him via LinkedIn or follow him on Twitter at @ZacharySBryson.
- It's Time to Separate College Football From the Other NCAA Sports
If you don’t like change, I wouldn’t recommend following college sports at the moment. In the past 365 days, there has been no shortage of developments that have shaken the college athletics world. First and foremost, college athletes (finally) have the ability to profit off their name, image, and likeness in addition to being able to transfer to another school without sitting out for a full season. This by itself would be significant but throw in the fact that Texas and Oklahoma have announced their move from the Big 12 to the SEC along with UCLA and USC announcing theirs from the Pac-12 to the Big Ten, it’s clear that things aren’t the way they used to be in college athletics. In order to keep up with all of this change, the NCAA has launched a Transformation Committee consisting of an executive group of university presidents and athletic administrators to reimagine the future of college sports. Among the issues being discussed are eliminating scholarship limits on sports that offer only partial scholarships, abolishing the limitation on the number of coaches per team, expanding direct payments from schools to athletes, reconfiguring the recruiting calendar, and implementing certain “transfer windows” for the transfer portal. All of those are important issues that need to be solved in the near future. I even wrote an article for Conduct Detrimental that emphasized the need for more structure for the transfer portal. With that being said, there is a bigger issue that needs to be explored at length. The problem is that in order to solve it, it means recognizing an undisputed reality of the current landscape in college athletics: college football is not a “college” sport anymore and needs to be treated differently from the 23 NCAA sports. When UCLA and USC joined the Big Ten, they didn’t do so with their championship-level Olympic sports programs in mind. The Big Ten didn’t bring in the two biggest brands in the Pac-12 to bolster its baseball reputation. Both sides made the decision to pursue each other for one reason and one reason only: to make more money from future media rights deals. While the latest round of conference realignment is a clear indication that college football is becoming professional football, it is by far not the only sign. Since 2021, two commissioner jobs have opened in the Power 5 conferences. Last summer, the Pac-12 hired George Kliavkoff as its newest commissioner, and the Big 12 recently tabbed Brett Yormark as its lead man moving forward. Both of them have something in common: neither one of them worked in college athletics before becoming commissioners of two of the five most powerful conferences in the country. Kliavkoff came from BetMGM in Las Vegas and Yormark had experience with the Brooklyn Nets as well as Roc Nation. Both hires were made with one goal in mind, and it wasn’t to further their conference's Olympic sports programs. It was to make the best media rights deal possible. While we aren’t there quite yet, the future of college football could definitely involve a world where the players are employees of their respective schools. Player unions, collective bargaining, transfer buyouts, and more are all possibilities in the next few decades. With that being said, why is college football being governed similarly to all of the other sports offered by athletic departments across the country? Now, it’s worth mentioning that the NCAA doesn’t have a financial stake in FBS television or championship revenue. Since the 1984 NCAA v. Board of Regents of the University of Oklahoma Supreme Court case, the television revenue has shifted more towards the schools and their respective conferences. The postseason of FBS football is controlled not by the NCAA, but by the College Football Playoff board of directors. However, NCAA rules and limitations still govern the sport to a certain extent as they do in other sports. As college football is becoming more professionalized by the day, it’s becoming more evident that it needs to break away from the NCAA and the rest of college sports. Instead of having five power conferences spread relatively evenly across the country as we had in the past, we are moving towards a landscape that includes only two super conferences with teams from coast to coast. While many lament the loss of regionality in the sport, it’s clear this is the direction college football is headed. But this doesn’t have to be the case for the other sports. With the exception of men’s basketball, every other NCAA sport doesn’t generate significant TV ratings during the regular season. So, if media rights money is the sole reason why UCLA and Rutgers now find themselves in the same conference, why are we having volleyball players from those respective schools hop on nearly six-hour flights for a midweek game in October? It just doesn’t make sense and could negatively impact the academic experience that administrators often emphasize. As a solution, I believe that this is the time for the people in charge of college athletics to separate high-level football away from the other 23 sports. While USC and UCLA can compete in the Big Ten in football for money reasons, its non-revenue generating sports can stay on the West coast and play teams closer to home in non-football playing conferences. Cross-country travel is less of an issue in football because of the scarcity of games and structure of the sport. Unlike many of the other sports which play upwards of 20 or 30 games, football plays once a week on the weekend for 12 weeks of the year with no more than 6 or 7 road trips per season. Volleyball? Baseball? Soccer? Softball? Not so much. These sports should be separated from football and compete in regionalized leagues where travel time and costs are reduced to allow the athletes to get the best experience possible. So instead of putting all their efforts into looking at limits on the number of coaches and scholarships, I believe the NCAA Transformation Committee should recognize that college football is becoming a professional sport and should be structured differently than the other non-revenue generating sports. In a time where change is overwhelming college athletics, it’s time to drop preconceived notions that all a school’s sports need to be in the same conference. This won’t be an immediate fix, but it’s something that will improve not only the quality of the athletes' experiences on campus but also help athletic departments save on cross-country travel costs as well. Every time conference realignment shakes up the college athletics landscape, a phrase many people say is that “football drives the bus, and all the other sports are just along for the ride.” My question is: why do they have to be? Brendan can be found on Twitter @_bbell5
- Department of Justice Investigating PGA Tour Regarding Anticompetitive Behavior
On Monday, The Wall Street Journal reported that the United States Department of Justice is investigating the PGA Tour regarding possible anticompetitive behavior on behalf of the PGA Tour in response to the launching of the LIV Golf Invitational Series. The Department of Justice probe comes on the heels of the DP World Tour (a PGA Tour partner) losing an arbitration in the United Kingdom against three players that participated in the LIV Golf Invitation Series event in London, which stayed the suspensions and fines levied by the DP World Tour against the players and will allow them to participate in DP World Tour events in the future. An alarming ruling for the DP World Tour and PGA Tour alike. According to The Wall Street Journal, the probe involves the PGA Tour’s bylaws governing players’ participation in other golf events and the PGA Tour’s actions relating to LIV Golf. Since the LIV Golf Invitational Series was first announced, the PGA Tour and LIV Golf have been at odds. In February, Jay Monahan, commissioner of the PGA Tour, hinted during a meeting with the players that there would be ramifications if players participated in the LIV Golf Invitational Series. In response, Greg Norman, CEO of LIV Golf, issued a memorandum rebuking the PGA Tour’s ability to ban players from participating in PGA Tour events due to players’ independent contractor status and the PGA Tour’s non-profit status. Despite Norman’s reassurance, the PGA Tour consistently made it clear to players that it will act against players leaving for the PGA Tour. Such conduct could be the focus of the Department of Justice’s probe. In early June, the PGA Tour announced suspensions for players participating in the LIV Golf Invitational Series. When Commissioner Monahan announced the suspensions, without a specific timeframe for the suspensions, Commissioner Monahan was clear that the suspensions were due to the players violating the PGA Tour’s tournament regulations, including failure to apply for releases to play in non-PGA Tour-sanctioned events. Therefore, due to Commissioner Monahan citing the PGA Tour regulations or bylaws as the reason for suspending LIV Golf players, it is no surprise that the Department of Justice is reviewing the PGA Tour’s rules regarding player participation. The Supreme Court of the United States made it clear in Lorain Journal Co. v. United States that outright bans/long-term suspensions violate the Sherman Antitrust Act. “It seems clear that if all the newspapers in a City, in order to monopolize the dissemination of news and advertising by eliminating a competing radio station, conspired to accept no advertisements from anyone who advertised over that station, they would violate §§ 1 and 2 of the Sherman Act.” Therefore, the Antitrust Division of the Department of Justice has its sights set on the PGA Tour. The probe should reveal more information on the player suspensions, including the length of any suspensions. However, some LIV Golf players have made it clear that they have no interest in returning to the PGA Tour due to the shorter season and larger purses in the LIV Golf Invitational Series. One thing is clear: LIV Golf is already making an impact. Beginning next year, the PGA Tour will inject an additional $54 million into purses for eight events next season, which the PGA Tour hopes will keep players away from the significant purses available on the LIV Golf Invitational Series. Between the Department of Justice probe and keeping players from joining LIV Golf, the PGA Tour has its hands full. Landis Barber is an attorney at Safran Law Offices in Raleigh, North Carolina. You can connect with him via LinkedIn or via his blog offthecourtdocket.com. He can be reached on Twitter @Landisbarber.
- Will NIL Deals Cause Incoming College Recruits to be Influenced by Money?
While many people claim that “imitation is the sincerest form of flattery,” bribery is the more effective method for college athletic recruitment. For decades, colleges have found ways to slip money under the table, allowing them to lure top prospects. In order to secure the most talented athletes, many colleges utilized “boosters” (mostly proud alumni) to pay recruits to play for their alma mater. It's hardly surprising that a young athlete who’s eager to start making money would be influenced by such an offer. Although it’s technically illegal for schools to pay prospective and current athletes directly, recently passed NIL laws allow the athletes to be paid if it is done indirectly by alumni or through opportunities the school provides. This may make the recruitment of athletes through “bribery” more common, or it could actually reduce the number of athletes who choose schools purely based on the deals they are offered. Due to their ability to sign endorsements earlier in their career, high school NIL contracts may be able to prevent the influence of money on recruitment. How Do NIL Contracts Increase Recruitment with Money? The NCAA now gives student-athletes the opportunity to profit from their NIL (name, image, and likeness), allowing them to receive money during their college careers. While schools cannot pay their athletes directly, there are many ways that they can help them profit. Because schools can now promise their recruits NIL-related opportunities, athletes are less inclined to choose schools with the best programs for their sport or best environment for them. Instead, they may simply choose the schools that offer them the best deals. One of the most effective methods of recruitment will be through boosters, or “representatives of athletic interest”, as described by the NCAA. Even though NCAA policies now allow boosters to recruit players, they have clarified that these boosters and colleges can not engage in “pay-to-play” methods. However, there are loopholes in the rules that do not prevent boosters from forming organizations that provide profitable opportunities for athletes. For example, boosters for the University of Texas football team arranged the “Horns With Heart” organization. Although they struggled to fill this position in the past, their pledge to give $50,000 to offensive linemen who participated in local community service was very effective. This helped them acquire seven talented OLs, including five-star rated Devon Campbell. While some attributed it to coaching changes and others argued that he felt some loyalty to the team that had given him his first offer, Texas’ paying opportunity may have also contributed. How Do NIL Contracts Prevent Athletes From Choosing Schools Purely Based on Money? Recent NIL laws may cause athletes to choose schools based on the incentives they offer, but an argument can be made that in some cases it will have the opposite effect. Many highly recruited athletes will already have NIL contracts. If students have the ability to begin earning money in high school through these contracts, they may be less susceptible to financial incentives. In addition to this, many of their contracts will be longer-term (hence more lucrative) than the opportunities provided by boosters. Some of the very best recruits will be able to earn millions of dollars while in high school, which is already the case for Mikey Williams. Last year, Williams signed a multi-million dollar endorsement deal with Puma. Williams has mentioned that he would be interested in attending an HBCU (historically black college/university). Due to a lack of funding, HBCUs are unlikely to be able to compete financially with the strongest sports programs because they often have less funding and wealthy boosters that can help with recruitment. Despite this, Williams is still likely to go to an HBCU. Since Williams will already have made plenty of money by the time he graduates high school, he can attend a school that has the best environment for him, rather than a school where he will get paid the most. Will Bag Money Bag Top Recruits? Whether colleges will be able to “bag” top recruits with money will depend on the athlete. If the athlete has a NIL contract as a high school student or doesn’t care about earning money as quickly as possible, they are unlikely to be influenced. However, many may be tempted to attend the schools that show their interest with a little cash. This may create a variety of potential issues. Many coaches have already criticized the situation as being immoral or unfair because it rewards the teams that have the most money and boosters. Therefore, wealthier schools can take advantage of being able to pay their recruits, creating an uneven playing field. High school NIL contracts may be the solution. While the number of athletes who will be able to secure NIL contracts is slim, top athletes will often achieve some degree of financial security before finishing high school. If colleges are unable to sign the very best athletes by offering them money, they may stop attempting to use this method because it is ineffective. Danica Zelvin is a high school student with an interest in high school NIL contracts. She can be found on LinkedIn.
- NIL Could Soon Be Coming to Pennsylvania for High School Athletes
Name, image, and likeness (NIL) could soon be coming to Pennsylvania for high school athletes. The Pennsylvania Interscholastic Athletic Association (PIAA) Board of Directors on Wednesday approved on first reading a new policy to allow high school athletes to profit off their NIL. The PIAA, like many other high school state athletic associations, is considering the adoption of a NIL policy to ensure that local talent stays home and competes for in-state schools rather than attending out-of-state schools in states where NIL is permitted for high school athletes. Under the proposed policy, Pennsylvania high school athletes would be eligible to profit off their NIL from, among other options, commercial endorsements, promotional activities, and social media presence. The proposed policy, however, has some restrictions. Students cannot wear school uniforms or “school-identifying apparel” or make reference to the PIAA or their school or team name when engaging in NIL activities. Students also cannot endorse or promote any third-party entities, goods, or services during team or school activities. The proposed policy also outlined prohibitions on activities in certain vice industries, including: Adult entertainment; Alcohol; Controlled substances; Opioids; Casinos and gambling; and Weapons, firearms and ammunition. According to WGAL News 8 Local Pennsylvania, the PIAA plans to hire a company to provide educational services and resources to help athletes and their families, coaches, and school officials navigate NIL. The policy needs at least two more readings before it is adopted. If the PIAA’s proposal passes through two more readings, Pennsylvania will join a growing list of states that permit high school athletes to profit off their NIL. That list currently includes the following states: Alaska, California, Colorado, Connecticut, Kansas, Louisiana, Minnesota, Nebraska, North Dakota, New Jersey, New York, and Utah. The PIAA Board of Directors meets again in September and October, which means the policy could be enacted before winter, but likely won’t happen until July 2023, according to WGAL News 8 Local Pennsylvania. The full text of the proposed NIL policy is available here. Ryan Whelpley is an Associate at Morse in Waltham, Massachusetts, where he is a member of the firm’s Corporate Practice Group and focuses on venture capital financings, M&A transactions, and general corporate work for start-up and emerging growth companies. He is a graduate of Albany Law School (2019) and Union College (2016). At Union, Ryan was a member and three-year captain of the Men’s Basketball Team. You can connect with him via Twitter (@Whelpley_Law) and LinkedIn.
- GT Real Estate Holdings, LLC Files Complaint Against York County
The legal battle continues over the failed Panthers’ headquarters project in Rock Hill, South Carolina. In response to York County, South Carolina’s lawsuit filed in June, GT Real Estate Holdings, LLC (“GTRE”) has filed a complaint seeking a declaratory judgment in the United States Bankruptcy Court for the District of Delaware, the court with jurisdiction over GTRE’s bankruptcy action. York County’s Complaint Within days of GTRE filing for bankruptcy, which imposes an automatic stay against creditors taking action against GTRE/GTRE’s property, York County filed a lawsuit in South Carolina state court. To avoid the automatic stay, the complaint did not name GTRE as a defendant. Instead, the defendants are entities owned or controlled by David Tepper, including Appaloosa Management, LP, DT Sports Holding, LLC, and Tepper Sports Holding, Inc. As a part of the lawsuit, the County is seeking to recoup $21 million in Penny Tax Funds provided by the County for the Panthers’ headquarters project in Rock Hill, South Carolina. Specifically, the County’s complaint included causes of action for civil conspiracy, negligence and negligence per se, interference with contractual relations, and negligent misrepresentation. In the County’s complaint, the County alleges that the defendants’ conduct was performed by or on behalf of GTRE. Therefore, via its complaint in the U.S. Bankruptcy Court for the District of Delaware, GTRE is pushing back on the County, and GTRE is asking the Court to declare that the County’s complaint violates the automatic stay. GTRE’s Complaint There is no doubt that this is GTRE’s first attempt at avoiding litigating this issue in South Carolina, York County’s home turf, and into the federal bankruptcy court under an impartial judge familiar with the matter. GTRE’s complaint utilizes the County’s complaint to its advantage. None of the County’s allegations include particular injuries due to actions on behalf of the other entities. Instead, the County’s allegations that any creditor’s damages on the Panthers’ headquarters project are due to the City of Rock Hill’s failure to issue infrastructure bonds. Due to the City’s failure to issue infrastructure bonds, the project failed, which makes the County’s claims an action against GTRE/GTRE’s property in violation of the automatic stay granted under 11 U.S.C. § 362. Similarly, GTRE points to being “a necessary party to the State Court Action because its liability must be determined in order to give effective relief to the County.” Basically, if the South Carolina state court were to make determinations on issues in the case, could lead to another court preventing GTRE (via collateral estoppel) from taking alternate positions in other litigation, including bankruptcy litigation. Whether GTRE’s complaint will succeed remains to be seen. Either way, GTRE would rather move the litigation over tax funds out of South Carolina and into a more favorable venue. Landis Barber is an attorney at Safran Law Offices in Raleigh, North Carolina. You can connect with him via LinkedIn or via his blog offthecourtdocket.com. He can be reached on Twitter @Landisbarber.
- Dodger Stadium Concession Workers May Strike
With Major League Baseball’s All-Star Game set to take place on July 19 and many festivities occurring throughout the week, Dodger Stadium concession workers—employed by Levy Restaurants—are set to strike if the stadium workers cannot reach a deal on a new contract. Representing union UNITE HERE Local 11 announced on Monday, July 11, that workers voted 99% to strike at any moment before the All-Star Game. The nearly 1,500 stadium workers employed by Chicago-based Levy Restaurants at Dodger Stadium include bartenders, cooks, servers, dishwashers, and suite attendants. The union’s last contract expired in 2019. Since then, disparities in housing and healthcare for concessions workers have continued to grow. Thus, beyond wages, the focus on the negotiations between the union and Compass Group, owner of Levy Restaurants, will be housing and healthcare. Stadium workers are becoming an afterthought despite heavily contributing to the game-day experience and Major League Baseball team values averaging $2.07 billion. In 2020, the average Dodger Stadium concession worker earned nearly $17.39 per hour, for a total of around $11,268.72 for an 81-game season. Considering average rental prices for one-bedroom apartments in Los Angeles are over $2,000 per month, it is clear why stadium workers are focused on housing. It is not the first time UNITE HERE has aided stadium workers in pursuing better wages, benefits, and working conditions. In 2021, UNITE HERE Local 2 represented concessions workers at Oracle Park, home of the San Francisco Giants, in their negotiations with Bon Appétit, the Giants’ food service contractor, over COVID safety, health care, and hazard pay. Concessions workers voted 96.7% to strike, but ultimately the parties reached an agreement before the union called a strike. In 2022, prior to the Super Bowl, UNITE HERE Local 11 represented concessions workers at SoFi Stadium, home of the Los Angeles Rams and Los Angeles Chargers, securing a union contract that boosted wages, benefits, and other protections. As a part of its Dodger Stadium announcement, UNITE HERE Local 11 noted the SoFi contract and stated, “Levy workers at Dodger Stadium are seeking to win the same rights.” On the same day of UNITE HERE Local 11’s announcement, July 11, the Major League Baseball Players Association (MLBPA) released a statement announcing its support for Dodger Stadium workers. In March, recognizing the impact of the Major League Baseball lockout on stadium workers and the vital role stadium workers play during the season, the MLBPA launched a $1 million fund to help stadium workers affected by the lockout. With the All-Star Game on deck, UNITE HERE Local 11 is capitalizing on the increased attention on Dodger Stadium. Today, July 13, the union and Compass Group have resumed discussions. Hopefully, the union can reach a new deal that is a victory for stadium workers. Landis Barber is an attorney at Safran Law Offices in Raleigh, North Carolina. You can connect with him via LinkedIn or via his blog offthecourtdocket.com. He can be reached on Twitter @Landisbarber.
- Red Bull Powertrains, or not? The Behind-the-Scenes Attempt to Keep Benefits
Anyone that follows F1, or has seen Drive to Survive will remember Red Bull's engine supplier struggles and drama over the past several seasons. With the official departure of Honda from F1 (again) at the end of last season, Red Bull decided to create their engine program so they wouldn't have to put up with any supplier issues like they did with Renault, or a supplier pulling out like Honda did ever again. Originally this decision meant that starting in 2022, all Red Bull engines would be branded a Red Bull Powertrain component despite the engine specification freeze in effect until 2026, with Red Bull designing their first powertrain for the new set of regulations. However, a wrinkle has been thrown into this plan by the Volkswagen Group, which is rumored to enter Formula One at the same time as the new engine regulations in 2026. Let's dissect red bull's original plan, these complications, and how likely Red Bull is going to be able to pull this one off. As I stated above, Red Bull's original intention was to take over the manufacturer and maintenance of the Honda design powertrains starting this year. This included a transfer of the intellectual property that Honda owns regarding the motor to Red Bull, so they would be able to build and maintain the engines without any direct involvement from Japan. This original plan would have allowed Red Bull to continue to use the Honda powertrain that helped it win the world title last season at a time when regulations are frozen, meaning that they would be at no disadvantage to any other engine supplier, particularly Mercedes or Ferrari. Since this original plan was hatched last year when Honda announced it would no longer be participating in Formula One past the conclusion of the season, it made perfect sense and was the logical step for Red Bull to take. However, since then developments in the world of Formula One have caused them to back off of that original plan in hopes of getting added benefits when the new regulations begin. This wrinkle in the original Red Bull plan was caused by speculation which now seems to have solidified into real news, which is that the Volkswagen Group plans to enter Formula One with both Audi and Porsche brands. Speculation suggests that the Volkswagen Group ideally would want to have an Audi works team, meaning that a team's primary sponsor (if not the outright owner) would be Audi, who would be responsible for the design of the car as well as the production of an engine. While it's unclear which team exactly might take on the Audi project, a strong case could be made for either Alpha Tauri, Williams, or Alfa Romeo. Porsche though has been linked closely linked with Red Bull and their new engine department for collaborating on a Porsche-branded power unit. This is a logical pairing, as Red Bull has already built the infrastructure and testing equipment necessary to design and maintain a Formula One engine in the UK, and would be a very easy “plug and play” for a new engine manufacturer to jump into the sport and hit the ground running. However, this speculation has caused Red Bull's original plan of maintaining, building, and receiving the intellectual property from Honda a little bit more complex. Within the regulation of Formula One by the FIA, there are special provisions in place for the new engine regulations four new engine manufacturers that will potentially enter the sport, regulations which the Volkswagen Group has been instrumental in arguing for due to their planned entries. These added benefits include a higher operating budget, more development time, and more time on the dyno to test the engines as well. This is all designed so that a new manufacturer that enters Formula One does not have to operate from a disadvantageous position at first until they “catch up” with the development of the established engine suppliers. Recently, the rumors of the Porsche Red Bull partnership have become more solidified as Red Bull has changed their approach for the remaining time of the engine freeze in hopes that they will be afforded the “new” engine supplier benefits when Porsche announces their official entry into Formula One. Because Porsche is likely planning to partner with Red Bull, they have put a halt on their original plans to acquire the intellectual property from Honda and build and maintain the engines for the duration of the engine freeze under the Red Bull powertrains moniker. Instead, Red Bull and Honda have come to an agreement where Honda will maintain the intellectual property, continue to build in service the engines, and provide all development and technical support to the team through the engine freeze. This essentially makes Honda the “unofficial” official engine supplier for Red Bull, with the hope being that the FIA will then as a result allow Red Bull and Porsche the extra dyno time and budget associated with being a new engine supplier, despite the existence of Red Bull powertrains for several years by that point. There are a couple of things about this decision that make it interesting from a legal and political standpoint. One is going to be the marketing of Honda on the Red Bull cars going forward. Currently, on the engine cover of the Red Bull car there is a small decal recognizing Honda's part in the production of the engine, but no widespread advertisement for them as there was last year because Red Bull powertrains are the “official” manufacturer. For Red Bull’s new plan to work, their cars going forward will have to have more Honda branding to highlight this increased involvement by Honda to convincingly show the FIA that Honda is the “actual” engine supplier, not Red Bull. this decision also raises eyebrows because of the surprising decision for Honda to leave Formula One after just handful of seasons of being back with Red Bull. It wasn't that the engineers at Honda didn't want to continue, it was that their profit-motivated board decided that they couldn't afford to spend the immense amount of resources required to maintain a Formula One engine program anymore. But here they are less than a year after making that decision, committing to essentially doing just what they said they “couldn't afford to do” again. Beyond these attempts by Red Bull to show they aren’t the engine supplier yet, there's still the issue of whether or not this plan will work and convince the FIA and the other Formula One teams to afford Red Bull Powertrains these benefits. Ultimately, it's not up to Red Bull whether they get these benefits—it's going to be up to the FIA, with the other engine suppliers having a say as well. That's going to be a hard sell to the likes of Ferrari and Mercedes, the other two major engine suppliers, and Formula One because they are witnessing exactly what we are, and just like us, they will see right through it and understand what Red Bull is trying to accomplish here. All this is to say that Red Bull Powertrains will certainly have an uphill battle in front of them to attain these benefits of being an engine supplier, and their trickery and optics surrounding Red Bull Powertrains will likely continue to evolve and play a major role in whether or not they can receive these benefits come the new engine regulations. Zachary Bryson is a graduate from Wake Forest University with B.A. in Economics and a Minor in Entrepreneurship. He is currently JD candidate at Elon University School of Law, Class of 2023. You can connect with him via LinkedIn or follow him on twitter at @ZacharySBryson.
- Can Judge Robinson Hold the NFL to a Higher Burden of Proof in the Deshaun Watson Decision?
By Daniel Wallach After settling 21 civil lawsuits alleging sexual misconduct, the natural inclination is to expect Deshaun Watson to be suspended following his NFL disciplinary hearing because of the low standard of proof used in such proceedings. Unlike criminal cases — which require proof beyond a reasonable doubt to convict an accused — or civil cases (which require a preponderance of the evidence in order for a plaintiff to win the lawsuit) — NFL disciplinary hearings for personal conduct policy violations (which are governed by Article 46 of the CBA) may require only a showing of “credible evidence” that the player violated the policy. “Credible evidence” is one of the lowest evidentiary standards in the law. It generally means evidence that is “worthy” of belief, not necessarily evidence that makes it “more likely than not” that the accused person committed the alleged offense. Crucially, it imposes no duty on the fact finder to weigh conflicting evidence, no matter how substantial, and allows a charged offense to be substantiated even if only one out of several strands of evidence supports it. Think about that for a second – even in a case where the overwhelming weight of the evidence may support the player’s version of the facts, he will still lose so long as the league can point to any credible evidence that he committed the offense, even though it may be in conflict with, or perhaps even be outweighed by, other evidence. The "credible evidence" standard raises constitutional due process concerns The attempted use of such a low evidentiary threshold in trial-type proceedings has been rejected by courts as a violation of due process. In Valmonte v. Bain, the Second Circuit held that the use of the "credible evidence" standard in a adversarial proceeding was unconstitutional because of "the unacceptably high risk of error." As the court observed, the credible evidence standard "does not require the factfinder to weigh conflicting evidence" and allows the prosecutor "to present the bare minimum of material credible evidence to support the allegations." Unlike the preponderance of the evidence standard, "where both sides share the risk of error,” the credible evidence standard leaves just one side -- the accused -- "bearing the brunt of the risk," the court concluded. Similarly, the Illinois Court of Appeals, in Cavarretta v. Dep't of Children & Family Servs., found the credible evidence standard to be "deficient" because "it does not require the fact finder to weigh conflicting evidence," which is "especially unfair and unreliable in light of the nature of the testimony and the need to compare and contrast different versions of the same event." Rather than allocate the risk of error equally, the credible evidence standard "facilitates the deprivation of a significant individual interest by a standard of proof which presents a high risk of error" and "deprives a subject of due process," the court concluded. The "credible evidence" standard is not mentioned anywhere in the CBA But even apart from the serious due process concerns which are implicated by the use of such a low standard of proof to deprive a professional athlete of his right to work (in an industry where careers are of relatively short duration), a compelling argument can be made by Deshaun Watson's legal team that the jointly selected Disciplinary Officer -- retired Delaware federal judge Sue L. Robinson -- is not even required to use the "credible evidence" standard in determining whether the NFL has met its burden of proof in the disciplinary case against Watson. Pointing to the league’s own documents and using basic rules of contract interpretation, Watson’s lawyers could attempt to persuade Judge Robinson to apply the higher "preponderance of the evidence" standard of proof, which would require the league to show that it was "more probable than not" that Watson violated the NFL Personal Conduct Policy. In Watson's case, the difference between these two evidentiary standards is essentially the difference between winning and losing — or the difference between playing and not playing. Indeed, a closer look at the league's own internal documents -- i.e., the 2020 Collective Bargaining Agreement, the NFL Personal Conduct Policy, and even Roger Goodell's arbitration ruling in Deflategate -- strongly suggest that the Disciplinary Officer has the flexibility and discretion to decline to apply the "credible evidence" standard of proof in any Article 46 disciplinary proceeding arising out of an alleged violation of the NFL's Personal Conduct Policy. To begin with, the "credible evidence" standard is not mentioned anywhere in the Collective Bargaining Agreement. Article 46 of the new CBA specifies the procedures that are to be followed in disciplinary proceedings regarding alleged violations of the Personal Conduct Policy. Article 46 of the CBA states, for example, that “[t]he NFL will have the burden of establishing that the player violated the Personal Conduct Policy," but does not specify what that burden actually is. This silence is to be contrasted with other CBA provisions which specify a “clear preponderance of the evidence” standard of proof that is to be used in other types of arbitration proceedings between the league and its players, such as those conducted pursuant to Article 12 (section 6), Article 14 (section 3), and Article 17 (section 5) of the CBA. You would think if it’s important enough for the NFL to specify the burden of proof in other types of arbitration proceedings where the disagreement between the league and players is over money, then it should be equally if not more important to specify the burden of proof in those sections of the CBA (such as Article 46) that can be deployed by the NFL to suspend or terminate a player's employment relationship with his team, which is a far more serious matter. Further, the "credible evidence" standard appears only in the non-collectively-bargained Personal Conduct Policy, which was unilaterally imposed by the league on the players without the NFLPA's consent or input. That document was never expressly “incorporated by reference" into the CBA. By contrast, nearly every other external document mentioned in the CBA, such as the NFL Player Second Career Savings Plan (Article 54), the NFL Player Annuity Program (Article 55), the NFL Player Tuition Assistance Plan (Article 56), and the NFL Player Insurance Plan (Article 58), is expressly "incorporated by reference and made a part of [CBA]." The failure to expressly incorporate the Personal Conduct Policy into the CBA is a legally significant omission. The CBA is, above all else, a contract. Under the contract-law doctrine of "incorporation by reference," which is recognized by courts in every state, when a contract (such as the CBA) expressly incorporates an external writing by reference, that writing becomes part of the contract. Conversely, the failure to expressly incorporate an external document by reference into a contract means that it should not to be treated as a part of that contract. By failing to expressly incorporate the Personal Conduct Policy into the CBA (as it did with scores of other external documents that don't adversely impact a player’s employment status nearly as much as the Personal Conduct Policy), the NFL may have provided Watson's legal team with a colorable legal argument that the "credible evidence" standard (which appears only in the Personal Conduct Policy) is not to be used in an Article 46 proceeding governed by the CBA. Such an argument is amply supported by the numerous examples of the NFL and NFLPA expressly incorporating many other external documents into the CBA and specifying the applicable burdens of proof in several other CBA-authorized arbitration proceedings. The failure to do the same here speaks volumes. Roger Goodell's prior acknowledgement in his Deflategate arbitration decision Contrary to the position that the league is currently believed to be asserting in the Watson case, NFL Commissioner Roger Goodell has previously recognized that the higher "preponderance of the evidence" standard applies in Article 46 disciplinary proceedings. In his July 28, 2015 arbitration decision upholding Tom Brady's 4-game suspension in Deflategate, Commissioner Goodell (acting in his familiar capacity as appellate judge ) stated that "[t]he underlying standard of proof for factual findings in Article 46 proceedings is 'preponderance of the evidence,' or stated differently, 'more probable than not.'" (Presumably, this sentence was reviewed by the league's in-house attorneys and outside counsel Paul Weiss before being publicly released, as Goodell is not an attorney). Notably, Goodell stated that this higher evidentiary standard applies "in Article 46 proceedings," without limiting it to disciplinary proceedings for "conduct detrimental to the integrity of, or public confidence in, the game of professional football" (which is the specific clause that Tom Brady was accused of violating). At the time that Goodell made that statement, the NFL had already issued its Personal Conduct Policy (with its “credible evidence” standard of proof) in the aftermath of the Ray Rice saga. It is therefore notable (and, more importantly, legally significant) that Goodell stated that the higher preponderance of the evidence standard applies "in Article 46 proceedings," which at the time encompassed both "'conduct detrimental' to the game of professional football" (Subsection 1(a)) and violations of the Personal Conduct Policy (Subsection 1(e)). Goodell could have just as easily have said "in Article 46 proceedings arising out of Section 1(a)" instead of the much broader "in Article 46 proceedings" without any limiting or confining language. I would not be surprised if Deshaun Watson's legal team seizes upon this sweeping statement in urging Judge Robinson to apply the higher preponderance of the evidence standard of proof in Watson's case. The use of the permissive "may" means that the credible evidence standard is optional, not mandatory More importantly, the "credible evidence" language from the Personal Conduct Policy is expressed in permissive, rather than mandatory, language. In the section titled "Discipline" (on page 5), the Personal Conduct Policy states that “[i]n cases where a player is not charged with a crime, or is charged but not convicted, he may still be found to have violated the Policy if the credible evidence establishes that he engaged in conduct prohibited by this Personal Conduct Policy." (This is the only mention of “credible evidence" in the Personal Conduct Policy.) The use of the permissive "may" in that sentence (as opposed to the mandatory "shall") means that it is within Judge Robinson's discretion whether to use the “credible evidence” standard in deciding Watson’s disciplinary case. The NFL very easily could have worded that sentence to read that the player "shall" be found to have violated the Personal Conduct Policy if the credible evidence establishes it." Instead, they used the permissive word "may," which connotes discretion rather than a mandatory obligation. This is supported by basic principles of contract interpretation. The mandatory/permissive canon of construction provides that mandatory words, such as “shall,” impose a duty while permissible words, such as “may,” grant discretion. See Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 112 (2012) ("Per the ‘Mandatory/Permissive Canon,’ the word ‘may’ is commonly treated as a permissive word granting discretion.”); Janssen v. Denver Career Serv. Bd., 998 P.2d 9, 16 (Colo. App. 1999) (“[W]here the term ‘may’ is used as opposed to ‘must,’ the term refers to authority which is permissive and not mandatory.”). Further, any ambiguities in a contract are to be construed against the party which drafted the contract. Here, NFL drafted the Personal Conduct Policy without any input from the NFLPA. As such, any uncertainty as to whether the use of the credible evidence standard is optional or mandatory must be resolved in Watson's favor and deemed to be optional. The “credible evidence” language from the Personal Conduct Policy is outdated The inclusion of the "credible evidence" standard in the Personal Conduct Policy appears to be a remnant of an outdated disciplinary process. The 2018 Personal Conduct Policy (the most recent one that is accessible online) employs the "credible evidence" standard in a non-analogous context: as part of an initial “disciplinary recommendation" to the Commissioner. The relevant passage on page 5 provides that "[a] disciplinary officer . . . will present a disciplinary recommendation for the Commissioner's consideration. The Commissioner will review the report (and recommendation if presented) and determine the appropriate discipline, if any, to be imposed on the player." That process has since been changed to an adversarial proceeding under the new CBA, enacted two years after the 2018 Personal Conduct Policy. In Article 46 of the new CBA, the role of the disciplinary officer is fundamentally different. Instead of merely "recommending" discipline following an investigation, the disciplinary officer now functions as the equivalent of a trial court judge, making factual findings and imposing the actual discipline. When the disciplinary officer's role was merely an investigative and advisory one, as opposed to adjudicative, the "credible evidence" standard made much more sense -- and would likely pass legal muster. See, e.g., Doyle v. Camelot Care Centers, Inc., 305 F.3d 603, 620 (7th Cir. 2002) (observing that the Illinois appeals court in Cavarretta "did not address in any definitive manner whether the use of the credible evidence standard during the initial phases of the investigation violated principles of due process."). But the credible evidence standard makes less sense — and would violate due process rights — when it is used as the governing standard of proof in a contested adversarial proceeding where a trial judge must make factual findings and determine punishment that could result in the deprivation of a significant individual interest such as the loss of one’s employment. “Credible evidence” is traditionally used as an appellate standard of judicial review "Credible evidence" is not an evidentiary standard that is normally associated with a adversarial trial-type proceeding where findings of fact are made by a judge. It is used more typically as an appellate standard of review, such as when an appeals court must determine whether a trial judge erred in setting aside a jury's verdict. It is not a proper evidentiary threshold for an initial finding of fault in a contested adversarial proceeding where a deprivation of one's professional livelihood is at stake, particularly when such a standard was neither the subject of collective bargaining nor incorporated by reference into the CBA. As a longtime federal district court judge who has presided over hundreds of trials in her judicial career, Judge Robinson might view this non-collectively-bargained low evidence bar as violative of procedural due process, just as the appellate courts in Valmonte and Cavarretta did. But she doesn't even need to engage in a weighty constitutional analysis in order to justify any decision to decline to apply the “credible evidence” standard of proof in the Watson case. The NFL's own documents reveal that Judge Robinson has the flexibility to ditch the “credible evidence” burden of proof in favor of the higher preponderance of the evidence standard. 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.
- JUST IN: Barstool’s Streaming Deal Could Be A Home Run
Just last week, Penn National Gaming – who has gained a whole lot of attention since purchasing a 36% stake in Barstool Sports in January 2020 – reached a $2 billion dollar agreement to acquire Score Media and Gaming. And now, Major League Baseball and Barstool Sports are in “significant negotiations” over broadcasting national midweek games with a focus on in-game betting, according to New York Post. Major League Baseball’s current national TV deal roster leaves an open spot for Barstool to work its magic on regular, non-exclusive Monday and Wednesday games, as ESPN’s new contract, set to begin next year, notably dropped those games. Per the Post, discussions started recently and while not a certainty yet, discussions are picking up steam. In considering the potential of such an unconventional and controversial partner, the biggest question we have to ask is: will the broadcasts be exclusive? If so, MLB may face significant backlash from its older fanbase as well as baseball fans who are simply not fans of the Barstool platform and their personalities. Perhaps Barstool founder Dave Portnoy, gave us all a hint last week when he alluded to talks with one of four major sports networks to air games but did not specify which. “Do you know we’re talking with major leagues? When I say major leagues, like the four major sports," Portnoy said. "Ever since we announced the Arizona Bowl, major leagues are like, ‘We can give you the rights. We can give you the rights to call one of the major four leagues games.’ Not gonna say which one. We’re looking at it.” As Portnoy explained, this new announcement comes just a few weeks after Barstool landed exclusive rights to a college football game: the Arizona Bowl. Set to be played on December 31, the 2021 Barstool Sports Arizona Bowl game will feature teams from the Mid-American and Mountain West conferences with Barstool as the title sponsor and broadcaster. (Photo Credit: Rebecca Sasnett, Arizona Daily Star) The Arizona Bowl was originally scheduled to be on CBS, but will now stream exclusively on Barstool’s website and app. It’s expected that the “love-it or hate-it” brand may sign other deals for live television rights in the near future. As broadcast television slows down and streaming services heat up by pushing out exciting content, this groundbreaking development is just another sign that we have entered a new dimension of digital media, seemingly tailored to a younger, more quirky audience. Whether you like it or not, here Barstool comes. Stephanie is a recent graduate of New York Law School and a law clerk at Geragos & Geragos. You can find her on Twitter @SWeissenburger_ and Instagram @Steph_ExplainsItAll
- NFL Won't Be Able to Push Flores, Gruden Cases Into Goodell-Led Arbitration Since League Is A Party
(Photo by Getty Images) By Daniel Wallach In the realm of adjudicating player discipline cases under Article 46, Roger Goodell has been famously described--not inaccurately---as 'the judge, jury and executioner.' And even the appellate judge too. This is because the collective bargaining agreement between the players and the league gave the NFL Commissioner broad disciplinary authority to impose discipline in the first instance and then to review the correctness of his own decision in the event an appeal was filed by the accused player through the NFLPA. But where the league itself is a defendant and its own conduct is directly at issue--such as in the case of the recent lawsuits filed by Brian Flores and Jon Gruden--can the NFL similarly bank on language in the two coaches' employment agreements with their former teams to force these recently filed lawsuits into private arbitration before Commissioner Goodell, who for all intents and purposes is the league's CEO? In a word, no. Are we really that brainwashed from 'Deflategate' to believe such a scenario is plausible, much less likely? Unlike the player discipline cases, such as those involving Tom Brady, Adrian Peterson and Ezekiel Elliott, there is no CBA in effect here. (Nor has there even been any completed arbitration--a highly significant fact given the longstanding reluctance of federal courts to interfere with already-completed arbitration proceedings). Rather, the hook on which the NFL will be seeking to have its own chief executive performing the role of 'neutral' arbitrator to decide the fate of serious accusations against the league--and potentially subjecting the league to millions of dollars in damages and industry-shifting injunctive relief--is standardized language in most NFL coaches' contracts acknowledging that the agreement "shall be governed by and construed in accordance with the Constitution, Bylaws, rules, and regulations of the National Football League." To that end, section 8.3(E) of the NFL Constitution and Bylaws provides that "[t]he Commissioner shall have the full, complete and final jurisdiction and authority to arbitrate . . . [a]ny dispute involving a member or members in the League or any players or employees of the members of the League or any combination thereof that in the opinion of the Commissioner constitutes conduct detrimental to the best interests of the League or professional football." By the way, this seemingly broad arbitration language isn't even expressly included in the agreement between the coach and the team. Rather, it appears only in the NFL Constitution and Bylaws, which is referred to in the coach's employment agreement with the team and which the coach "acknowledges that he has read"--a rather oblique way of shoehorning seemingly important arbitration language into an agreement without actually including it. (While there is a more specific arbitration provision in most coaches' contracts, that provision only empowers the Commissioner to arbitrate "all matters in dispute" between the coach and the Club, including any disputes "arising under" the contract, which would seemingly have no applicability to the Gruden case since he is not suing the Raiders--or to large chunks of the Flores case, which raises broader claims against the NFL). Putting aside the question of whether there is even a valid agreement to arbitrate, the more salient point is whether an arbitration clause installing the NFL Commissioner as the final arbiter of any and all claims asserted against the league--you know, the one that employs him to the tune of $63.9 million per year--is even enforceable. The issue here is one of bias. To that point, the United States Supreme Court has stated that "[w]e cannot believe that it was the purpose of Congress to authorize litigants to submit their cases and controversies to arbitration boards that might reasonably be thought to be biased against one litigant and favorable to another." In the case of completed arbitrations, federal courts may vacate an award where there is 'evident partiality'--a fancy term for arbitrator bias, such as when the arbitrator has a relationship with one of the parties to the arbitration. But, where, as here, the arbitration has not yet taken place and the dispute centers on whether a contractual arbitration provision should be enforced, the standard of review is slightly less onerous. The law is well settled that “in an appropriate case, the courts have inherent power to disqualify an arbitrator before an award has been rendered.” Under New York law, the proper standard of review for the disqualification of an arbitrator 'is whether the arbitration process is free of the appearance of bias." As New York courts have stated, any such bias "must be clearly apparent based upon established facts, not merely supported by unproved and disputed assertions." (Notably, neither the NFL Constitution and Bylaws or the employment agreements at issue make any reference to the Federal Arbitration Act (a federal law), only that the Commissioner (and not a designee) would conduct the arbitration. For this reason, the law of New York--where the NFL is headquartered--may be relevant). This isn't even a close call. It is inconceivable--to me at least--that a judge would countenance allowing an NFL executive to serve as the arbitrator of a dispute where the NFL itself is being accused of tortious conduct and that same employee is directly implicated in the alleged misconduct at issue and will undoubtedly be a material fact witness in both cases. This indisputably rises to the level of a "clearly apparent" conflict of interest sufficient to justify the court's denial of the NFL's motion to compel arbitration in both the Flores and Gruden lawsuits. A recent decision involving minor league baseball reinforces this obvious conclusion. In Nostalgic Partners, LLC (d/b/a The Staten Island Yankees) v. New York Yankees Partnership, a one-time minor-league affiliate of the New York Yankees sued the Yankees and Major League Baseball for tortious interference with contractual relations over the latter's decision to terminate the team's longstanding affiliation with the Yankees, and, in doing so, to interfere with the terminated minor-league affiliate's contracts with third parties. The Yankees promptly filed a demand for arbitration before the Commissioner of Major League Baseball, per a contractual arbitration provision. The plaintiff minor-league team moved to stay the arbitration, arguing that it would be "absurd" for the MLB Commissioner--as a highly paid employee of one of the main defendants--to consider and issue a declaratory judgment deciding whether the minor-league team's claims against the New York Yankees and MLB had any merit. Citing the "appearance of bias" standard recognized under New York law (and emanating from a 1968 U.S. Supreme Court decision), the minor-league team stated that "[t]he Commissioner, as the head of MLB, plainly has an interest in ensuring that the NY Yankees – and by extension, MLB – avoid any negative consequences stemming from the NY Yankees’ support for and participation in MLB’s restructuring of its relationship with minor league baseball clubs and leagues. . . . As such, the Commissioner may well be 'deaf to the testimony or blind to the evidence presented' and there is certainly 'a real possibility that injustice will result.'” In a December 17, 2021 decision, Justice Barry Ostrager of the New York County Supreme Court granted the minor-league team's motion to stay arbitration. In his decision, he reasoned that "[b]ased on the appearance of impropriety, the Commissioner of Major League Baseball should not arbitrate a dispute of claims that are asserted against Major League Baseball." This decision--which was appealed last week to New York's Appellate Division--will likely be cited as precedent by plaintiff's counsel in both the Flores and Gruden cases, especially given the paucity of case-law involving attempts by professional sports leagues to enforce contractual arbitration provisions that would install league executives as the arbiters of tort claims filed against the leagues. Finally, the class-action status of the Flores lawsuit provides yet another compelling reason why the contractual arbitration provision should not be enforced (well, at least not in the Flores case). For all of Commissioner Goodell's supposed arbitral talents, resolving 'class-wide' claims does not appear to be among them. In fact, no NFL Commissioner has ever arbitrated a class action lawsuit in his capacity as the NFL Commissioner. Putting aside the question of whether other minority coaches and GM candidates are even subject to the mandatory arbitration language in their contracts with NFL teams--or whether they have NFL contracts at all (see college coaches)--it is highly dubious that 'class-wide' claims-spanning potentially 100 or more individuals could be effectively vindicated before an NFL Commissioner with no class action experience, much less a law degree. 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.
- NFL Legal Challenge to Timing of Ray Horton Claims Could Prevent Class Certification in Flores Case
Image via https://www.commanders.com/news/redskins-hire-ray-horton-as-defensive-backs-coach By Daniel Wallach After a period of relative inactivity, the Brian Flores racial discrimination lawsuit against the NFL is beginning to heat up. Last month, Flores filed an amended complaint which included two additional plaintiffs (Steve Wilks and Ray Horton) and added 3 more NFL teams (the Titans, Texans and Cardinals) as defendants. While we await the formal response from the NFL defendants--which is expected towards the end of June--both sides recently filed a proposed "civil case management plan and scheduling order" with the court. The proposed case management plan provides a succinct overview of the claims and anticipated defenses. This is especially appreciated when the amended complaint is 100 pages long and involves multiple parties, claims, and non-intersecting storylines. More revealingly, the case management plan includes a preview of what to expect in the lawsuit over the next couple of months. Both sides identify for the first time what "motions" (i.e., requests for judicial intervention) they will be filing with the court. Besides stating the obvious--such as the NFL signaling that it will be filing both a motion to dismiss the amended complaint and a motion to compel arbitration--these initial disclosures also include some unexpected revelations from each side that could tee up some spirited legal battles over the next few months. Horton's importance to the lawsuit for class certification purposes One of these crucial battles will focus on Horton, who may turn out to be the key plaintiff for class certification purposes. Horton was a defensive coordinator for three NFL teams (including the Titans) and coached in the league for more than 20 years without ever having been offered a head coaching position. The addition of Horton as a named plaintiff serves two important strategic purposes. First, it bolsters Flores' allegation that NFL teams conduct 'sham' interviews of Black head coaching candidates simply to satisfy the 'Rooney Rule.' Whereas Flores relies primarily on a Bill Belichick text message that the NFL now conveniently asserts is "ambiguous," Horton's claim of a 'sham interview' process is backed by much stronger evidence--a recorded admission from former Titans head coach Mike Mularkey, who stated in a podcast interview that he was offered the Titans head coaching position in 2016 in circumvention of the Rooney Rule while other minority candidates--including Horton--were still going through the interview process. That allegation--when coupled with the Belichick text message--could help the plaintiffs overcome an expected NFL motion to dismiss on that claim. Second, Horton's inclusion as a named plaintiff is seemingly designed with class certification in mind. Unlike Flores and Wilks--the other new plaintiff added in the amended complaint--Horton has never been a head coach in the NFL. As such, his claims of racial discrimination are more "typical" of the claims of other potential members of the class, many of whom have yet to be hired as an NFL head coach. The "typicality" requirement of class certification ensures that the named plaintiffs' claims have the same essential characteristics as the class at large. Since both Flores and Wilks have previously been head coaches in the NFL, their situations and circumstances may differ markedly from those class members who have never been an NFL head coach. Nowhere is this more evident than in Flores' own particularized allegations, which detail: (1) an alleged bribe offer made by Miami Dolphins owner Stephen Ross to intentionally lose games during the 2019 season as part of a scheme to secure the top overall pick in the 2020 NFL Draft; and (2) an "improper directive" to secretly meet with a prominent NFL quarterback (reportedly Tom Brady) still under contract with another NFL team. Flores alleges that his refusal to participate in the alleged tanking and tampering schemes played a role in the Dolphins' decision to fire him as head coach despite leading the team to winning records in his last two seasons. Calling these reasons "plainly unrelated to his race," the NFL defendants have indicated that they will be seeking the dismissal of Flores' racial discrimination claims for failure to state a viable cause of action because his own allegations reveal that "race played no role in the employment decisions challenged here." NFL will be seeking the dismissal of Horton's claims as time-barred This potential ground for dismissal as to Flores' claims accentuates the importance of Horton's inclusion in the lawsuit since he is not subject to this unique defense, and moreover, possesses characteristics more aligned with other members of the potential class. Which is why the looming battle over the validity of Horton's claims warrants special attention. In their portion of the proposed case management plan submitted to the court last month, the NFL defendants signaled that they will be moving to dismiss Horton's racial discrimination claims as time-barred because the events giving rise to his claims occurred, if at all, in January 2016 when he interviewed for the Titans head coaching position. The statute of limitations on a claim of employment discrimination is generally either three or four years (depending on the particular statutory cause of action), meaning that Horton may have filed his claims several years too late. The NFL defendants hint at this argument with their statement in the joint letter that "Mr. Horton alleges that the Titans interviewed him for their head coaching position over six years ago, in 2016, without a genuine interest to hire him," followed several paragraphs later by their assertion that they plan to assert multiple other defenses to Plaintiffs' claims, including . . . statute of limitations defenses." The consequences of this defense are obvious. If Horton's claims are dismissed as time-barred, there might not be a certifiable class since he is the only plaintiff who has never been a head coach--and thus his claims are more "typical" of the other class members--and both Flores and Wilks could be subject to unique defenses and other individualized arguments that may otherwise preclude class certification (or, worse, lead to the dismissal of their claims on a Rule 12(b)(6) motion to dismiss). Without a suitable class representative, this lawsuit becomes much narrower in scope. Therefore, the viability of Horton's claims could be the key to the entire case. Plaintiffs may need "equitable tolling" to save Horton's claims To preserve Horton's seemingly untimely claims, his attorneys may need to resort to the doctrine of "equitable tolling." Indeed, in their recent court filing, Horton's attorneys assert that the doctrine of "equitable tolling" would serve to "revive" any claims where the statute of limitations has otherwise passed. "Equitable tolling" is a common law doctrine providing that a statute of limitations shall not bar a claim in cases where the plaintiff, despite the exercise of due diligence, could not or did not discover the alleged injury until after the expiration of the limitations period. In the employment discrimination context, however, equitable tolling is considered an "extraordinary" remedy that is to be applied sparingly. The Second Circuit's case law on equitable tolling makes clear that for equitable tolling to apply, "the employer must prevent the employee in some extraordinary way from exercising her rights, or the employee must be actively misled by his employer and that conduct must be responsible for making the employee unaware of her [statutory] rights.” In short, equitable tolling will apply only where the employer's own acts or omissions have lulled the plaintiff into foregoing prompt attempts to vindicate his or her rights. Horton's attorneys will likely argue that the Titans actively prevented Horton from discovering the existence of the alleged sham interview by concealing the fact that Mularkey had already been offered by the Titans' head coaching position when Horton interviewed for that same position in January 2016. Horton's attorneys would presumably argue that, as a result of this active concealment by the team, Horton could not have discovered--with the exercise of reasonable diligence--that he was the victim of a sham interview by the Titans until October 21, 2020 at the earliest when Mularkey publicly admitted in a podcast interview with "Steelers Realm" that one of his greatest professional regrets was secretly accepting the Titans coaching position in circumvention of the Rooney Rule while other minority candidates--including Horton--were still going through the interview process. The expected discovery battle over equitable tolling Believing that "equitable tolling" may be the only way to avoid dismissal of Horton's claims on statute of limitations grounds, Horton's attorneys have advised the court in their proposed case management plan that "certain discovery" is necessary prior to the resolution of the NFL's anticipated motion to dismiss and motion to compel arbitration. In particular, plaintiffs' attorneys have indicated they will be seeking pre-ruling discovery on the arbitrator bias issue (bearing on the appropriateness of NFL Commissioner Roger Goodell serving as the arbitrator of tort claims asserted against his employer and those that pay his $63.9 million annual salary), personal jurisdiction and venue issues (to the extent that the NFL defendants raise those grounds for dismissal in their forthcoming motion to dismiss), and "issues relating to the equitable tolling issue in connection with the claims brought by . . . Horton." On the equitable tolling issue, Horton's attorneys would presumably seek to take Mularkey's deposition under oath to get him to repeat and/or verify the statements that he made during the podcast in order to overcome any potential hearsay objection by the Titans and/or the NFL since those podcast admissions were made by him out of court and are being offered by Horton for the truth of the matter asserted. A deposition of Mularkey could also elicit more detailed information about the conversations that he had with Titans ownership and management regarding his hiring and the need to interview other candidates. Along the same lines, Horton's attorneys would likely also seek to take the depositions of Titans team owner Amy Adams Strunk, Kenneth Adams (another team owner), Titans General Manager Jon Robinson, Titans President Steve Underwood, and Titans' Vice President Vin Marino, all of whom allegedly participated in the January 2016 interview with Horton. Through these depositions, Horton's legal team would seek to learn more about the timing of the Titans' decision to hire Mularkey as head coach and could request internal documents (including emails) bearing on that decision. In addition, the plaintiffs' attorneys may seek to depose the other candidates who interviewed for the Titans' open head coaching position in January 2016, namely, Doug Marrone (the then Jacksonville Jaguars assistant head coach), and Teryl Austin (a black candidate who was the Detroit Lions defensive coordinator). If the court were to grant such pre-ruling discovery, the depositions would likely take place on an expedited basis, likely during the summer months. Not surprisingly, the NFL defendants have a different view of the issue, advising the court that such pre-ruling discovery is "unwarranted" and that they will instead be seeking a blanket stay of all discovery during the pendency of their motion to dismiss and motion to compel arbitration. While there are many battles and legal skirmishes that will play out in the Flores case over the coming months, this will definitely be one worth keeping your eye on given its potential signal importance to the entire case and the viability of a class action. 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.