CSS Button No Image Css3Menu.com

Baseball Prospectus home
  
  
Click here to log in Click here for forgotten password Click here to subscribe

<< Previous Article
Overthinking It: The T... (01/10)
Next Article >>
The Week in Quotes: Ja... (01/13)

January 10, 2014

What Will Happen if Alex Rodriguez Appeals?

Examining the Steve Garvey Precedent

by Eugene Freedman

the archives are now free.

All Baseball Prospectus Premium and Fantasy articles more than a year old are now free as a thank you to the entire Internet for making our work possible.

Not a subscriber? Get exclusive content like this delivered hot to your inbox every weekday. Click here for more information on Baseball Prospectus subscriptions or use the buttons to the right to subscribe and get instant access to the best baseball content on the web.

Subscribe for $4.95 per month
Recurring subscription - cancel anytime.


a 33% savings over the monthly price!

Purchase a $39.95 gift subscription
a 33% savings over the monthly price!

Already a subscriber? Click here and use the blue login bar to log in.

Alex Rodriguez’s attorneys have, at various times, suggested that he will challenge the outcome of his Biogenesis suspension-related grievance arbitration should he not be satisfied with the result—and that only a result of no suspension will be acceptable. (Update: Arbitrator Fredric Horowitz reduced Rodriguez's sentence, but only to 162 games. A-Rod does plan to appeal to federal court.) In a column in November, I wrote, “Courts grant great deference to labor arbitration and arbitrators under what’s referred to as the Steelworkers Trilogy, a series of cases issued by the Supreme Court in 1960.” That is true whether the case involves teamsters in Detroit or Chicago or baseball players in San Diego or New York.

Steve Garvey challenged the arbitrator’s decision in his collusion-related damages case all the way to the Supreme Court. (MLBPA v. Garvey, 532 U.S. 1015 (2001)). He lost. Similarly, any challenge to Arbitrator Frederic Horowitz’s pending award in the Rodriguez matter will be denied as well. Garvey’s case is interesting, however, because the Supreme Court laid out the standard courts must use in reviewing labor arbitration cases based upon prior case law, didn’t really add any new theory, and then applied that standard to a case involving the sport we all know and love.

After the Major League Players Association won its three collusion cases against the Clubs covering the 1985, 1986, and 1987 offseasons, the Union and the Clubs negotiated a global settlement agreement to deal with the question of damages. The league established a $280M fund to be distributed to affected players, and the MLBPA established a “Framework” to evaluate the individual players’ claims.

The Framework required that players who alleged that they had lost contract extensions would receive damages “only in those cases where evidence exists that a specific offer of an extension was made by a club prior to collusion only to thereafter be withdrawn when the collusion scheme was initiated.” There were several other allegations of lost income players could make in order to receive a remedy.

Once the claims were evaluated, the MLBPA recommended a distribution plan for the claims. The Framework also provided that players could ask an arbitrator to review the distribution plan to determine “whether the approved Framework and criteria set forth therein have been properly applied in the proposed Distribution Plan.”

Garvey claimed damages of $3M because he was not extended for the 1988 and 1989 seasons. He presented a 1996 letter from Ballard Smith, former Padres President and CEO (1979-1987), as evidence, stating that before the end of the 1985 season, he had offered Garvey an extension through the 1989 season, but the Padres refused to negotiate with Garvey after collusion began. Incidentally, Garvey retired after his age-38 season in 1987, one in which he played only 27 games and finished with a .211/.231/.276 line.

The arbitrator denied Garvey’s claim, writing, “there exists… substantial doubt as to the credibility of the statements in the Smith letter.” He went on:

The shadow cast over the credibility of the Smith testimony coupled with the absence of any other corroboration submitted by Garvey compels a finding that the Padres declined to extend his contract not because of the constraints of the collusion effort of the clubs but rather as a baseball judgment founded upon age and recent injury history.

Although the District Court rejected Garvey’s claim, the Court of Appeals for the 9th Circuit reversed that decision, finding that the arbitrator’s refusal to credit Smith’s letter was “inexplicable” and “border(ed) on irrational.” The same arbitrator had previously rejected the owners’ testimony in the underlying collusion case.

The Supreme Court reversed the Circuit’s decision and upheld the arbitrator’s award. Citing Paperworkers v. Misco, Inc., which built upon the Steelworkers Trilogy, the Court wrote, “Courts are not authorized to review the arbitrator’s decision on the merits despite allegations that the decision rests on factual errors or misinterprets the parties’ agreement. It went on, “when an arbitrator resolves disputes regarding the application of a contract, and no dishonesty is alleged, the arbitrator’s ‘improvident, even silly, factfinding’ does not provide a basis for a reviewing court to refuse to enforce the award.”

While the Circuit found the arbitrator’s refusal to credit Smith’s letter “irrational” and “bizarre,” the Supreme Court wrote, “established law ordinarily precludes a court from resolving the merits of the parties’ dispute on the basis of its own factual determinations, no matter how erroneous the arbitrator’s decision.”

In a footnote, the Supreme Court applied that standard to the Garvey case.

In any event, no serious error on the arbitrator’s part is apparent in this case…. The arbitrator’s explanation for his decision indicates that he simply found Smith an unreliable witness and that, in the absence of corroborating evidence, he could only conclude that Garvey failed to show that the Padres had offered to extend his contract. The arbitrator’s analysis may have been unpersuasive to the Court of Appeals, but his decision is hardly qualified as serious error, let alone irrational or inexplicable error.

The Garvey case came after decades of established law on this very subject. While the 9th Circuit disagreed with the arbitrator’s credibility findings and factual findings, and therefore the result, it was not appropriate for it to put itself in the place of the arbitrator. It was not appropriate to reverse his decision without some proof of misconduct as long as the decision draws its essence from the collective bargaining agreement.

If Alex Rodriguez challenges Arbitrator Horowitz’s decision, he will be subject to the same standard as Garvey. Courts are not permitted to stand in the place of the arbitrator and make credibility and factual findings from afar. As long as the arbitrator does not “dispense his own brand of industrial justice,” no appeal is going to be successful.

Eugene Freedman is Deputy General Counsel for a national labor union.

Eugene Freedman is an author of Baseball Prospectus. 
Click here to see Eugene's other articles. You can contact Eugene by clicking here

Related Content:  Alex Rodriguez,  Arbitration,  Steve Garvey,  Law

34 comments have been left for this article. (Click to hide comments)

BP Comment Quick Links

bhacking

But an appeal could drag on in court for how long? A season, allow him to play in 2014 and have several incentives kick in for his contract?

Jan 10, 2014 05:12 AM
rating: 3
 
Behemoth

That's the interesting question, isn't it? Can he delay the suspension by going to court, or would MLB be able to suspend him in the interim?

Jan 10, 2014 05:40 AM
rating: 0
 
UncleChuck

An appeal from the arbitrator's decision would not automatically stay enforcement of that decision, I don't think.

I believe Pay$Rod would have to separately seek an injunction, enjoining enforcement of the arbitrator's decision. And, since a party seeking an injunction generally must show a likelihood of prevailing on the merits of his claim and, as explained above, Pay$Rod has basically zero chance of prevailing on the merits of his claim, it seems unlikely a court would issue an injunction or a stay of the arbitrator's decision...

Jan 10, 2014 06:07 AM
rating: 1
 
JHaugJr
(332)

More likely than not, the lawsuit will be subject to a quick "motion to dismiss" filed directly in response to any complaint. This is routine, and usually successful, in response to suits challenging arbitral awards.

I agree with UncleChuck regarding the likelihood of obtaining an injunction (slim/none)

Jan 10, 2014 06:22 AM
rating: 1
 
BP staff member Eugene Freedman
BP staff

Uncle Chuck and JHaug are correct. No Federal District Court is going to issue an injunction given the burden of proof for reversal being so high. Plus, there's no irreparable harm. Granted ARod will argue that lost games affect his long-term legacy stats, but it's a financial harm that can be easily calculated and remedied.

Jan 10, 2014 07:15 AM
 
SC

I'd think irreparable harm would be pretty easy to demonstrate. Yes, the financial harm (lost wages) are relatively easy to calculate, but what's the value to Rodriguez of being 3rd rather than 4th or 5th on the all-time HR list? That's far more difficult to effectively put a dollar figure to.

Certainly the issue about the likelihood of reversal is the key factor, but Rodriguez's skills are diminishing, and if the decision were reversed after he spend four months not playing, those are four months he can't ever get back, 10 HR he won't hit, etc.

Jan 10, 2014 09:10 AM
rating: 0
 
BP staff member Eugene Freedman
BP staff

I don't know, are Bonds or Clemens getting any extra endorsements due to their places on the HR and Wins lists respectively? Would Clemens have more endorsements had he had two more wins putting him ahead of Maddux? Doubtful. He's a dead fish. So is ARod, regardless of the outcome of this suspension hearing.

Jan 10, 2014 12:07 PM
 
SC

Now, no, but in 10 or 15 years when perhaps we have a more enlightened view of the era, I suspect being the all-time home run leader will have some value to Bonds.

Jan 10, 2014 15:13 PM
rating: 0
 
therealn0d

None of that matters one little teeny tiny bit. There are rules that were agreed to, found to be violated by a process that was agreed to. He would basically have to prove malice. Not being number one on some arbitrary list doesn't really count as "aggrieved."

Jan 10, 2014 12:58 PM
rating: -1
 
SC

The process was followed? Are you kidding? A-Rod never tested positive (at least never when there were penalties), let alone twice, and has been suspended as though he has. Now the arbitrator may come to a different conclusion, but it's preposterous to claim that the rules were agreed to, FOLLOWED BY BOTH PARTIES, and violated.

Jan 10, 2014 15:15 PM
rating: 5
 
therealn0d

CAPS LOCK WON'T SAVE YOU! I NEVER WROTE "FOLLOWED" ANYWHERE IN MY POST!

The process that was _agreed to_ is what unfolded. If you want to make an argument that MLB violated some law, that's a different argument, but still not germane to the issue at hand. The arbitration process, as agreed to by the union and MLB, will most assuredly be upheld. The collection of evidence outside of that process, however repugnant to our sensibilities, will not matter to the court.

Jan 13, 2014 17:18 PM
rating: -1
 
palehose

I would think the way MLB gathered evidence against A-Rod could demonstrate malice and impugn the integrity of the arbitrator who is employed by both MLB and the players association. According to a detailed article in New York magazine MLB coerced and intimidated potential witnesses and purchased with cash stolen materials. In addition MLB did not file with the IRS the appropriate documents for using $125,000 in cash to purchase the stolen materials. MLB acted like it was a legal authority when in fact it has no legal authority what so ever in interviewing or gathering evidence. They do not represent any public authority. In addition, it is illegal to be in possession of stolen goods for any reason.

Jan 10, 2014 14:00 PM
rating: 3
 
BP staff member Jason Wojciechowski
BP staff

I think you're making a case for malice on the part of MLB, but I'm not seeing how that applies to Horowitz.

Jan 11, 2014 12:11 PM
 
palehose

This is the problem with the entire process. Horowitz is employed by MLB and the players union. If one party is corrupt than he is part of that party. Horowitz found Bosch more credible than A-Rod. Bosch is bought and paid for by MLB. So is Horowitz. The players union is complacent regarding its members rights because the money in MLB is real good. That is why A-Rod sued the union as well as MLB. Arbitration has been problematic in many endeavors and is being considered for regulation in finance, for example, because of its possible inequities.

Jan 13, 2014 22:45 PM
rating: 0
 
Nathan Aderhold

Is there any sort of language to determine how the SC weighs whether an arbitrator "dispense[d] his own brand of industrial justice?"

In other words, how does one determine what is merely "improvident" versus what is "dishonest?" It all seems very nebulous.

Also, thanks for writing these articles. Really enjoyed reading them.

Jan 10, 2014 16:30 PM
rating: 1
 
BP staff member Eugene Freedman
BP staff

Nathan, The standard was developed in Steelworkers v. Enterprise Car. It essentially means that the arbitrator is confined to interpretation and application the CBA and cannot use standards outside of them. In this case the penalty is laid out in the JDA (an extension to the CBA) and the hearing process and burdens of proof are in both. So, if Horowitz finds something to have occurred, because there is a specific penalty contained in the CBA - 50 games for a first offense as an example - he must give 50 games for a first offense. Otherwise, it would be his own brand of industrial justice and have the possibility of being remanded to him on appeal to comply with the specific requirements of the CBA.

Regarding dishonesty - that would require some kind of proof that he was bribed by one side or other. It's not going to happen in today's day and age with professional arbitrators, especially those of national standing like Horowitz.

Jan 11, 2014 05:11 AM
 
Nathan Aderhold

Thanks for the explanation.

If Horowitz decides to uphold MLB's desired 211-game suspension, then, would A-Rod have a case against him given there's no precedent (or written language in the JDA) to justify a first suspension of that length?

FWIW, I don't think he will do that, I'm just curious.

Jan 11, 2014 08:46 AM
rating: 0
 
Nathan Aderhold

Welp, never mind. How about 162?

Jan 11, 2014 09:23 AM
rating: 0
 
palehose

A-Rod was suspended for 162 games.

I don't believe you need to prove bribery to get a stay of the suspension in court. If evidence is acquired illegally that evidence cannot be used in a criminal case. I don't see how it would be different in an arbitration.

Jan 11, 2014 09:35 AM
rating: 0
 
UncleChuck

Arbitration is an informal process. The rules of evidence that apply in a criminal case do not apply in arbitration unless the parties specify that those rules will apply, which I don't think they did here.

To get an injunction or a stay of an order, a party must show: (1) that irreparable harm will result from enforcement of the order (which A Rod may be able to show); and (2) a likelihood of being able to prevail on the merits (which A Rod won't be able to show here, unless he can show that arbitrator acted outside of the bounds of the authority the parties contractually provided to him).

Jan 11, 2014 10:41 AM
rating: 1
 
Behemoth

I think Eugene mentioned before that the arbitrator could use evidence that wouldn't be acceptable in criminal proceedings, as he has the skills and knowledge necessary to assess how the shortcomings involved impact on the reliability of the evidence.

Jan 11, 2014 10:47 AM
rating: 0
 
Johnson Magic

What is the legal walk to 162 games within the CBA / JDA framework? The reduced penalty seems "neither fish nor foul", a number determined to be 'appropriate' by the arbitrator, but not one proscribed in the collectively bargained agreements.

To this layman that sounds like the arbitrator came up with his own brand of justice. I'm sure that isn't legally the case - I'm just not following how it isn't.

Jan 13, 2014 14:03 PM
rating: 0
 
Behemoth

If the penalty for failing a test is 50 games for a first offence, and the penalty for a non-analytical positive is undefined, it would seem pretty close to the arbitrator dispensing "his own brand of industrial justice" to say that the correct penalty in such a case ought to be 162, especially if the other players involved got 50 for a similar non-analytical positive. Then again, a good chunk of the 162 may be due to other offences. It will be interesting to see the arbitrator's full ruling if A-Rod does go to court about this.

Jan 11, 2014 10:45 AM
rating: 1
 
Noel Steere
(965)

Eugene, do these SC rulings also apply to binding arbitration set forth in agreements to use software, apply for credit cards, and (more recently) hiring/retaining agreements?

Jan 11, 2014 11:36 AM
rating: 0
 
BP staff member Jason Wojciechowski
BP staff

There's a similar policy of judicial non disruption of agreed-to processes, but it stems from a separate statutory scheme, the Federal Arbitration Act.

Jan 11, 2014 12:14 PM
 
BP staff member Eugene Freedman
BP staff

I will be monitoring PACER after ARod files for an injunction. His counsel will likely attach the underlying decision. That's the only way we're going to see the award, because it's a private award and confidential under the CBA/JDA. But, once it's filed in a Federal Court, it will be a public document. That's when the real analysis can begin, because we don't know the breakdown of the suspension or even the various charges. We have all been speculating.

Jan 11, 2014 18:06 PM
 
jfmoguls

I just hope someone emails this article to ARod.

Jan 11, 2014 18:15 PM
rating: 0
 
AWBenkert

Given that the penalties specified in the collective bargaining agreement are 50/100/lifetime, doesn't the imposition of a 162 game suspension (or the original 211 game ban) fall outside the acceptable guidelines?

Jan 11, 2014 22:51 PM
rating: 1
 
BP staff member Eugene Freedman
BP staff

We have to see the award. It likely breaks down how the penalty was derived. If it doesn't, it will list the charges and address them individually, so we can see which conduct violations the arbitrator found to have occurred.

Jan 12, 2014 03:29 AM
 
palehose

According to the NY Times the proceedings of the arbitration hearing are confidential. It would seem unless a judge rules otherwise we will never know the details of the arbitrator's thinking. Of course there are always leaks but you have to be suspicious regarding the motivation and veracity of the leakers.

A-Rod is not a sympathetic character but if I was a player I would be concerned about how this arbitration process works and would question my union regarding whether this process serves the best interests of the players. The process seems to give MLB immunity from every principle regarding ethical and legal behavior in gathering evidence and gives the players no legitimate right to appeal decisions that on the surface look capricious and biased.

Jan 12, 2014 07:22 AM
rating: 4
 
SC

See above, where Eugene notes that when ARod files his federal case, his counsel will likely include the full ruling by the arbitrator, at which point it becomes public record.

Jan 12, 2014 09:29 AM
rating: 0
 
palehose

Given the 60 Minute interview MLB has a very liberal view of what confidentiality means.

Jan 13, 2014 06:11 AM
rating: 0
 
tsweber

Terrific article. Definitively states what will happen with ARoid. Too bad his lawyer is apparently not a BP subscriber. (or maybe he is, he'll still get paid...)

Jan 12, 2014 12:27 PM
rating: 0
 
sbnirish77

If he's been reading BP for all these years, he would probably would claim that PEDs have no effect upon performance.

Jan 13, 2014 19:28 PM
rating: -2
 
You must be a Premium subscriber to post a comment.
Not a subscriber? Sign up today!
<< Previous Article
Overthinking It: The T... (01/10)
Next Article >>
The Week in Quotes: Ja... (01/13)

RECENTLY AT BASEBALL PROSPECTUS
Fantasy Article The Buyer's Guide: Adam Lind
Fantasy Article TTO Scoresheet Podcast: National League Play...
Fantasy Article Fantasy Freestyle: Shadow Auctioneering
Premium Article League Preview Series
Every Team's Moneyball: Philadelphia Phillie...
Every Team's Moneyball: Toronto Blue Jays: I...
Pebble Hunting: The Case For Shaming the Cub...

MORE FROM JANUARY 10, 2014
Overthinking It: The Trouble with Forecastin...
Premium Article Raising Aces: Classic Deliveries: Hall of Fa...
Prospects Will Break Your Heart: An Evening ...
Premium Article Minor League Update: International Winter Le...
Fantasy Article Fantasy Team Preview: San Diego Padres
The BP Wayback Machine: The Old You're In, Y...

MORE BY EUGENE FREEDMAN
2015-02-12 - Premium Article Prospectus Feature: The Genius Of Arbitratio...
2014-01-14 - Premium Article Analyzing A-Rod's Arbitration Case
2014-01-10 - Premium Article What Will Happen if Alex Rodriguez Appeals?
2013-11-21 - Premium Article Analyzing A-Rod's Arbitration Case
2013-10-08 - Analyzing A-Rod's Arbitration Case
More...


INCOMING ARTICLE LINKS
2014-01-14 - Premium Article Analyzing A-Rod's Arbitration Case