The Lawletter Vol 40 No 9
Whether you believe that quarterback Tom Brady was aware that the New England Patriots were using allegedly deflated footballs during the January 18, 2015 AFC Championship Game between the Patriots and the Indianapolis Colts or whether you are unsure what sport the Patriots and Colts play or whether they play the same sport, the recent decision by U.S. District Judge Richard M. Berman in National Football League Management Council v. National Football League Players Ass'n, Nos. 15 Civ. 5916 RMB JCF, 15 Civ. 5982 RMB JCF, 2015 WL 5148739 (S.D.N.Y. signed Sept. 3, 2015), appeal filed, No. 15-2805 (2d Cir. Sept. 3, 2105), vacating the arbitration award in favor of the National Football League ("NFL"), provides a valuable primer on basic notice and hearing requirements under the Federal Arbitration Act ("FAA").
As has been well publicized, shortly after the conclusion of the January 18, 2015 game, the NFL retained Theodore V. Wells Jr. and the law firm of Paul, Weiss, Rifkin, Wharton & Garrison ("Paul, Weiss"), to conduct an independent investigation—along with NFL Vice President and General Counsel Jeff Pash—into the use of underinflated balls. The source of authority for the investigation was the NFL Policy on Integrity of the Game and Enforcement of Competitive Rules ("Competitive Integrity Policy"). That investigation—which included reviews of player equipment, security footage, text messages, call logs, emails, press conferences, league rules and policies, and interviews with no less than 36 Patriots and NFL personnel—culminated in the so-called "Wells Report," which was authored by Wells and edited by Pash. The Wells Report concluded that it was more probable than not that Patriots personnel participated in violations of the playing rules and were involved in a deliberate effort to circumvent the rules. With respect to Brady, the Report concluded that it was more probable than not that he had been "at least generally aware" of the inappropriate activities of Patriots staff and it was "unlikely that an equipment assistant and a locker room attendant would deflate game balls without Brady's knowledge and approval." Id. at *3 (quoting Wells Rept.). Based on the Report, NFL Executive Vice President Troy Vincent issued two letters: (1) one to Patriots owner Robert K. Kraft, imposing on the Patriots Club a $1 million fine and forfeiture of the first-round pick in the 2016 NFL draft and the fourth-round pick in the 2017 NFL draft, and (2) another to Tom Brady, imposing a four-game suspension on the player pursuant to article 46 of the Collective Bargaining Agreement ("CBA") and NFL Player Contract. The NFL Players Association, on behalf of Tom Brady, appealed the decision, which appeal was submitted to arbitration under the CBA.
NFL Commissioner Roger Goodell designated himself as arbitrator, rejecting Brady's motion to recuse. Arbitrator/Commissioner Goodell denied Brady's motion for discovery of "[a]ll Documents created, obtained, or reviewed by NFL investigators (including by Mr. Wells and his investigative team at the Paul, Weiss firm and NFL security personnel) in connection with the Patriots Investigation (including all notes, summaries, or memoranda describing or memorializing any witness interviews)," id. at *6 (quoting Mot.), on the ground that the CBA provides only for the exchange of exhibits to be relied on at the hearing no later than three days before the hearing and that Commissioner Goodell relied only on the Wells Report in imposing discipline, not on any of Paul, Weiss's internal investigative notes.
While Arbitrator/Commissioner Goodell granted Brady's motion to compel the testimony of Wells, he denied Brady's motion to compel the testimony of Pash, on the ground that Pash did not have any firsthand knowledge of the events at issue and did not play a substantive role in the investigation. Paul, Weiss represented the NFL at the arbitration hearing at which Goodell presided. Arbitrator Goodell upheld Commissioner Goodell's discipline, finding that the evidence showed that Brady "knew about, approved of, consented to, and provided inducements and rewards in support of a scheme by which, with Mr. Jastremski's support, Mr. McNally tampered with the game balls." Id. at *9 (quoting arbitration award). Moreover, Goodell found that Brady willfully obstructed the investigation by, among other things, arranging for the destruction of a cell phone that held potentially relevant information. Goodell found that the discipline imposed was appropriate because Brady's offense had a close parallel in NFL policy against the illicit use of performance-enhancing drugs, the first violation of which imposes a collectively bargained discipline of a four-game suspension.
The NFL sought to confirm the arbitration award in federal court, and the Players Association moved to vacate it. Judge Berman gave three reasons for granting the union's motion to vacate the award: (1) Brady did not have adequate notice of the potential discipline and his alleged misconduct; (2) Brady was denied the opportunity to examine Pash, one of the two lead investigators; and (3) Brady was denied equal access to the investigative files, including witness interview notes.
On the notice issue, the court found that there was no evidence that a player who had a general awareness that team employees were deflating balls or who failed to cooperate in an investigation knew that he could be subject to the same discipline as a player who violated the steroid policy. Furthermore, "as a matter of law, no NFL policy or precedent notifies players that they may be disciplined (much less suspended) for general awareness of misconduct by others. And, it does not appear that the NFL has ever, prior to this case, sought to punish players for such an alleged violation." Id. at *14. Finally, although Brady had notice under Player Policies applicable to players that he could be subjected to fines for equipment violations, he had no notice that he could be subjected to discipline under the Competitive Integrity Policy, because that policy applied to, and was distributed solely to, chief executives, club presidents, general managers, and head coaches, not to players. In the absence of specific notice of an infraction and the potential discipline, the court rejected Goodell's finding that Brady could be disciplined based on a general CBA policy barring players from engaging in conduct detrimental to the integrity of, or public confidence in, the game.
The decision to deny Brady's motion to compel the testimony of Pash was fundamentally unfair and a violation of the FAA because,
[g]iven Mr. Pash's very senior position in the NFL, his role as Executive Vice President and General Counsel, and his designation as co-lead investigator with Ted Wells, it is logical that he would have valuable insight into the course and outcome of the Investigation and into the drafting and content of the Wells Report. It is also problematic to the Court that there was no specification by Goodell as to the ways Pash's testimony would have been "cumulative."
Id. at *18. Pash's edits to the Wells Report were significant, and as co-lead counsel he was in the best position to testify about the NFL's involvement in the independent investigation.
Likewise, the decision to deny Brady's motion to produce was fundamentally unfair and a violation of the FAA because the requested documents were the basis for the Wells Report. Adding to the prejudice suffered by Brady as a consequence of the inability to view the documents was the fact that Paul, Weiss, as independent investigator/arbitration counsel to the NFL, had complete access to the files and could use them in direct and cross-examination during the arbitration hearing.
The NFL has appealed Judge Berman's decision to the Second Circuit Court of Appeals but has not asked for a stay of the decision. So Brady is eligible to play, and both the game and the drama will go on.