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Thursday, July 30, 2015
MORE OF THE BRADY BUNCH
(This post in authored by Alan Milstein)
Sometimes lawyers can outthink themselves.
Much has been written about where Tom Brady was going to file his Motion to Vacate the Commissioner’s arbitration decision. The good money was on Minnesota because the Union has had so much success in that forum particularly with Judge David S. Doty presiding.
Probably for that reason, the NFL sought to blitz the Brady team by simultaneously filing a Petition to Confirm the award at the moment it released the decision. Brady and the Union nevertheless filed the Petition to Vacate in federal court in Minnesota, believing a friendly court would ignore the first-to file-doctrine on the grounds that the NFL had too much of an advantage in choosing the forum. Unfortunately for the Brady Bunch, they did not draw Judge Doty and Judge Richard Kyle promptly transferred the case to New York.
Here's the irony. The Federal Arbitration Act at Title 9 of the U.S. Code sets forth the grounds by which a federal court can vacate an arbitration award. The critical one for this case is “where there was evident partiality . . .in the arbitrator.” What is absent from the applicable provision is what used to be the reason of choice: "manifest disregard of the law." While under this rubric, an arbitration award cannot be reversed for an error of law or a misreading of the facts, it can be vacated if the arbitrator intentionally ignored well-settled law. For example, if the arbitrator knows the statute of limitations is two years, he or she cannot use one or three years as the time to bar an action.
The Circuits are split as to whether manifest disregard of the law is still a reason for vacating an arbitration award. While the Eighth Circuit, which includes Minnesota, has not exactly been consistent on this issue, it generally says it is not. The Second Circuit, on the other hand, which includes New York, says that it is. Compare Medicine Shoppe Int'l v. Turner Invs., Inc., 614 F.3d 485, 489 (8th Cir. 2010, with Stolt-Nielson SA v. Animal Feeds Int’l, 548 F.3d 85 (2d Cir. 2008). See also Jay Packaging Group, Inc. v. Mark Andy, Inc,, 2011 U.S. Dist. LEXIS 5721 (E.D. Mo. January 21, 2011) ("[t]he Eighth Circuit has specifically address[ed] this issue, and concluded that a party's attempt to vacate or modify an arbitration award on the basis of an alleged manifest disregard of the law is not a cognizable claim," and "it is well established in the Eighth Circuit that the 'manifest disregard of the law' doctrine is no longer good law.").
Thus, Brady and his team are actually better off in Giants territory than they would be in the land of the Vikings. This would certainly be a critical play for Brady to call given that the under-inflation rule appears to apply only to teams not players and carries only a $25,000 fine.
My bet is still that Brady plays every game.
-- Alan Milstein