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January 14, 2014

Analyzing A-Rod's Arbitration Case

Breaking Down A-Rod's Arbitration Award

by Eugene Freedman

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On Monday, January 13, Alex Rodriguez filed suit against Major League Baseball, the Office of the Commissioner of Baseball, and the Major League Baseball Players Association. After a short oral argument in the United States District Court for the Southern District of New York, Judge William H. Pauley III ordered that A-Rod’s attorneys were required to submit an unredacted and complete version of the previously confidential arbitration award with their filing.

While I was excited to read the award when the suspension was announced over the weekend, reading it was pretty anti-climactic. The award itself is quite uninspiring and doesn’t bring to light anything that had previously been missing from the discussion, perhaps because so much was leaked during the investigation and hearing.

The award contains a restatement of much of the evidence presented by MLB in its case against A-Rod. I had previously explained how the arbitration process would work. In this case, Arbitrator Horowitz decided to apply the higher standard of clear and convincing evidence rather than preponderance of the evidence. In applying the higher standard, he found A-Rod to have violated the JDA by taking three separate banned substances: testosterone, Insulin Growth Factor-1 (IGF-1), and human Growth Hormone (hGH). While he relied upon the testimony of Tony Bosch, he did not do so in a vacuum. Bosch’s testimony was unrebutted, and it was supported by the documentary and electronic evidence. A-Rod’s legal team attacked the validity of that evidence, but they did not appear to present any rebuttal testimony. While the burden was on MLB to prove its case, unrebutted testimony is generally accepted, and it was in this case.

The penalty is perhaps the only interesting section of the award. It’s also an area in which I was wrong in my prior column. I wrote, “Considering that the first offense is a 50-game suspension, the second is 100 games, and the third is a permanent ban (with caveats for return), it would be improper to wait until three violations for MLB to bring the first charge and seek a permanent ban. I can’t imagine that seeking 100 games for multiple violations in this first discipline will succeed.” That is in fact what MLB argued for—that this was three violations that required a permanent ban.

In the instant case, Arbitrator Horowitz applied Section 7.G.2. of the JDA rather than the 50-100-permanent schedule contained in Section 7.A. All of the parties—MLB, the MLBPA, and A-Rod—agreed that 7.G.2. applied. That section requires only that the suspension be supported by just cause, meaning that the penalty should be proportional with seriousness of the offense, the discipline should be progressive in nature, and that it should be in compliance with the CBA. The Arbitrator did consider the 50-100-permanent framework as a benchmark in his imposed penalty, finding that each independent drug violation should result in a 50-game suspension. Horowitz cited the Neifi Perez decision issued by his predecessor Shyam Das in 2008 for the notion that there was “a general understanding that separate uses are subject to separate discipline.” He went on to find that Section 7.L., the provision providing that a second discipline could not be issued prior to notice of the first discipline, applied only to disciplines for the use of the same substance. So, MLB couldn’t have charged A-Rod with multiple uses of testosterone to get up to the permanent ban level. It could, however, stack multiple 50-game suspensions for multiple first-time violations.

Arbitrator Horowitz tacked on an additional 12 games and the postseason for A-Rod’s impeding the investigation—specifically, making public statements he knew to be false, playing an active role in inducing Bosch to make similar false statements, and attempting to induce Bosch to submit a false affidavit.

A-Rod’s lawsuit to reverse the award will not succeed. I wrote about the standard to overturn a grievance arbitration award last Friday. A-Rod’s case boils down to an argument that the Arbitrator acted with manifest disregard for well-settled principles of law and demonstrated evident partiality towards MLB, and that the decision did not draw its essence from the CBA and JDA. On the last point, A-Rod’s team argued that the “162 game suspension amounted to (the Arbitrator’s) own brand of industrial justice as the suspension contravenes the progressive, disciplinary framework set forth in the JDA.” What’s interesting is that they cite Section 7.A., something that the Arbitrator states all parties agreed was not applicable. Moreover, disagreeing with how he applied the CBA is not the same as not applying the CBA.

On the question of manifest disregard for the law, A-Rod’s suit alleges that Commissioner Selig’s failure to testify and Bosch’s being allowed not to answer self-incriminating questions on cross-examination violated existing law. This allegation is weaker than the first. There is no law that required Selig to testify. It’s a private arbitration process, not a criminal case. Moreover, all of the questions cited by A-Rod’s filing were meant to undermine Bosch’s credibility, and would have been incriminating if answered. They related to distribution to minors, unlicensed practice of medicine, and where he received the medicines and prescription slips. None of those things was material to the underlying question of A-Rod’s behavior.

There are some other minor procedural deficiencies argued, but none is guaranteed by the CBA. Again, they presuppose that this is a criminal case, not a labor arbitration hearing.

Finally, there are allegations of bias, mostly riding on the belief that Horowitz is incentivized to rule in favor of MLB because Arbitrator Das was terminated after the Ryan Braun decision. I addressed this in comments to my October column when I wrote, “My experience is that arbitrators consider their integrity more important than almost anything else—it’s their reputation that gets them their future appointments. A fair, impartial arbitrator who issues a well-reasoned decision and is terminated by the losing party is far more likely to be hired by others than someone who issues poorly reasoned decisions attempting to balance wins and losses.” I’ve also found that Arbitrators love to tell stories about their firings. They are almost like badges of honor.

I believe A-Rod’s attorneys are aware of how unlikely that case is to succeed, so they’ve backed it up with a Duty of Fair Representation case against the Union. Those claims, if successful, would find the Union liable for the damages to A-Rod based upon the suspension, even though that’s not listed in the prayer for relief. I will address those claims in a subsequent column.

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,  MLBPA,  MLB,  Arbitration,  PEDs,  Law

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

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The thing that slightly confuses me is why A-Rod and the MLBPA would agree that 7.A. doesn't apply. On reading it, it appears to apply directly.

Also the concept of stacking seems pretty much thought up on the spot to get a longer ban. It would surprise me very much if every single player who has tested positive so far has only had one illegal substance found in their sample. Section 7.K. suggests that if a player tests positive for more than one type of drug at the same time, only the longest suspension would be applied. That would seem to imply that the intention was that penalties could not be stacked - otherwise, the penalties for testing positive for different kinds of drugs at the same time would be cumulative.

Jan 14, 2014 03:27 AM
rating: 4
The Beef

Agreed, and it's most certainly true that almost 100% of all athletes that use at least one form of AS, also use other illegal substances to enhance it's effect. AS is the popular word for PEDS in the media. I didn't just read about these items, I have first hand experiences. Straight insulin (undetectable, but worthless without other drugs) is used to shuttle extra nutrients to the muscles after work outs. HGH is used mainly for body fat reduction and ligament strengthening. IGF-1 has synergy with both AS and HGH. Clenbuterol is used to lower body fat and strengthen muscles and taken with AS & HGH all the time. Clomid, Nolvodex, and HCG are taken after the cycles to get the natural test production back up to normal. All of these are illegal, and are almost definitely taken with AS. So every player should get the "stacking" penalty.

Do you really think Steve Howe and Dwight Gooden only took Coke? No way, but thats all they got in trouble for. I guarantee they could of hit them up for amphetamines, THC, Heroine, and all sorts of things, but they just got them on one charge.

In the end, the undoing of all these superstar athletes wasn't the fact that they took these substances. It's the fact that they were such PUSSIES that they couldn't inject themselves once a week in the ass with AS. I mean, HGH might be the most painless injection in the world, yet Clemens, Pettite and all the rest of these "men" need someone to push a insulin pin into their little tummies : ) I have seen countless diabetic children inject themselves with insulin multiple times a day and they don't even flinch.

I'm not an A-rod fan, but MLB is so full of crap on this one it's ridiculous.

Jan 14, 2014 06:20 AM
rating: 0

Uh, what's an AS?

Jan 14, 2014 08:26 AM
rating: 1

Anabolic Steroid.

Jan 14, 2014 08:36 AM
rating: 0

If I understand correctly, the belief is that 7A doesn't apply because 7A only applies to failed tests. There is no failed test in this case; therefore, both parties agreed that 7A could be ignored.

Jan 14, 2014 07:03 AM
rating: 0
BP staff member Eugene Freedman
BP staff

7A provides for testing positive, but also otherwise violates the program through use or possession. I assumed, apparently mistakenly, this was another violation for use - without a positive test result.

Jan 14, 2014 07:34 AM

7.A. states "

Jan 14, 2014 07:37 AM
rating: 2

One day we'll get a better commenting system here. I tried to cut and paste the exact text of 7.A. but it failed. It says "A player who tests positive for a Performance Enhancing Substance, or otherwise violates the Program through the use or possession of a Performance Enhancing Substance, will be subject to the discipline set forth below." It then goes on to outline the 50/100/life penalties.

To be honest, it's hard to see how this doesn't apply in the A-Rod case. I'm curious why A-Rod and the MLBPA would agree that it doesn't.

Jan 14, 2014 07:41 AM
rating: 1

The arbitor stated that 7.A was not intended to apply to situations involving "continuous and prolonged use of multiple substances" and instead was focused on situations such as a single failed test.

That doesn't really seem right to me, since it's pretty arbitrary what constitutes "continuous and prolonged use" and unless we assume that every player gets caught right after they start using, you could argue that 7.G.2 applies to pretty much everyone that tests positive.

I also am quite shocked that the MLBPA would not fight this interpretation. It seems now that MLB will have wide discretion in the suspensions it hands out. If it wants to give more than the 50 days provided under 7.A, all it needs to show is that the player has been using for a while and thus 7.G.2 applies.

Jan 14, 2014 08:02 AM
rating: 2

Although a single failed test probably means the player was using for a prolonged period of time, there wouldn't actually be any evidence to that effect, and it would be difficult to build such an assumption into the guidelines (i.e. that a single failed test signals anything more than a one-time use). So the 50 game penalty is seemingly calibrated to a single "lapse in judgment," giving the player the benefit of the doubt because there is only one piece of evidence collected at one point in time. In A-Rod's case there is evidence of ongoing use, which means it wasn't a lapse in judgment but an intentional effort to cheat and avoid detection. That would seem to be the distinction that makes 7.A not applicable.

Jan 14, 2014 10:57 AM
rating: 0

Except MLB (as with every other doping authority) doesn't care whether a positive test is a one-off or part of a systematic effort to cheat, given that they make no effort to investigate and everyone just gets 50 games regardless. Except A-Rod. If systematic doping was worthy of so much longer a ban, surely MLB would investigate much more thoroughly each time someone tests positive.

Jan 15, 2014 04:41 AM
rating: 1
BP staff member Jason Wojciechowski
BP staff

This is a problem with the JDA and CBA, both of which are posted in some weird PDF format that makes copying and pasting a real bear regardless of where you're pasting to.

Jan 14, 2014 09:33 AM

It seems the MLBPA felt the penalty was excessive - they so stated - but also perhaps assumed the award was not so off base that it would be overturned on appeal so chose not to engage further, perhaps leaving it to the next bargaining roubnd of the CBA and JDA for further clarification of these interpretative variances.

A-Rod seems far more willing to engage, and in a manner seemingly ill suited to the arbitration process. But their goal is likely pointed to an ultimate financial settlement, not the penalties themselves, in a venue (civil court) where the rules of the game may be more amenable to their approach, or at least allow for / encourage a settlement process.

Jan 14, 2014 08:48 AM
rating: 0

It strikes me that the person that A-Rod should really be suing is Bosch for slander. The fact that he hasn't done that strengthen's Bosch's claims.

Jan 14, 2014 09:24 AM
rating: 2
BP staff member Jason Wojciechowski
BP staff

My best guess on the 7A/7G question is that it represents a safe middle ground for both sides. The MLBPA would risk a holding by Horowitz that under 7A, three drugs gets you a lifetime ban in non-analytic cases. (As noted by other commenters, basically anyone using drugs is using many drugs, so the risk would essentially be lifetime bans for all non-analytic cases.) MLB would risk a decision that all this conduct by ARod gets lumped into one violation, so it's a 50-game suspension. 7G gives both parties room for argument.

Jan 14, 2014 09:32 AM
Shaun P.

This is very reasonable, and I think this is why the MLBPA went along with it. But what reason would A-Rod have for going along with it?

Additionally, as Craig Calcaterra pointed out at HardballTalk, the lawsuit seems to disagree with "all the parties agreed 7A did not apply". If the parties did not all agree, then it seems awfully strange that the arbitrator would get this key fact wrong in his decision. If the parties did all agree, then it seems awfully strange that A-Rod's high-priced attorneys would "conveniently" forget this fact in the complaint and not address it directly - because it opens an awfully big hole in their argument.

Something is not right here.

Jan 14, 2014 13:44 PM
rating: 1

It's posturing...spin control. ARod needs to get something on the books in his defense, and it doesn't matter how preposterous. Plausible "I'm not the biggest douchebag in all this?"

Jan 14, 2014 16:25 PM
rating: 0

As someone who deals with attorneys all too often, it's simply grandstanding and posturing. You throw enough crap at the wall and hope you hit upon an actual item that can be argued about and at least negotiated. Suing the MLBPA will come back to bite him though.

Eugene is absolutely correct: All this bluster by A-Rod and his team will be dismissed and the 162 game suspension will stand. It would not shock me for the Yankees to hand him a check next spring and show him the door (although I'd suspect they'll try over the summer to have his contract voided first)...

Jan 15, 2014 06:56 AM
rating: 0

Just curious, and, admittedly, I haven't been following the legalities too closely, but it seems like the Braun arbitrator acted improperly in exonerating him; not only was Braun guilty, but the collector did what he was supposed to do, under the circumstances (store in a safe place until after weekend). Doesn't this give credibility to Arod's claim of arbitrator bias?

Jan 14, 2014 09:38 AM
rating: 0
BP staff member Eugene Freedman
BP staff

We have never seen the Das decision in the Braun case. But, with Braun the issue wasn't whether the tester complied with the protocols his company created for him, but whether the protocols complied with the JDA/CBA. They did not. It voided the test ab initio. The test results were fruit of the poisonous tree and could not be considered, thus Braun's discipline was overturned.

There were attacks on the tester's integrity outside of the process, for which Braun has apparently apologized.

Jan 14, 2014 10:53 AM
Brian Kopec

The way this was always going to end was with A-Rod and the Yankees coming together on a settlement to get out of his contract, followed by A-Rod slinking off into the night.

The fix was in from the moment Selig found the generosity in his heart to forgive Bosch and provide him with the money needed to refresh his memory. Things could have turned out different but A-Rod was too dumb and/or greedy to help himself. As far as I am concerned, this is all just gnashing of teeth...as well as good theater.

Jan 14, 2014 09:41 AM
rating: 0

Rodriguez is signed through 2017 so even if the suspension holds, the Yankees are on the hook for $60m. There's no incentive for A-Rod to negotiate any kind of settlement.

Jan 14, 2014 14:00 PM
rating: 1
Brian Kopec

The incentive is to prevent being sued by the Yankees that he misrepresented himself when signing the current deal as his performance was artificially boosted by performance enhancing drugs.

Slim chance of the Yanks winning that, but how much is it worth A-Rod to avoid that possibility?

Jan 14, 2014 18:16 PM
rating: 0

What I don't get is how A-Rod could have engaged in the promiscuous use of PEDs described in the Award without ever failing a test. What were the guys who *did* fail doing?

Jan 14, 2014 12:04 PM
rating: 2
Shaun P.

This is an excellent question! Is MLB doing anything to strengthen its testing program, since apparently there are some holes in it?

Jan 14, 2014 13:41 PM
rating: 0

Follow the story. ARod was taking his drugs at scheduled intervals precisely to be able to pass a test after a game. He had a designed drug taking schedule fitted just for him specifically.

Jan 14, 2014 16:33 PM
rating: -1

After all the legal procedural hoop dee doo and drug testing protocols we are left with the fact that those responsible for the integrity of the game looked the other way and let baseball debase itself so they could make money as fans filled the seats to watch the unprecedented home run contests that substituted for baseball games in the 1990's and early aughts. Some of the players who violated the rules were caught and paid a price but not a single person in management, whether on the field or in the front office, has been held accountable. And the commissioner, who was heavily criticized by Congress, smiled with McGuire and Sosa and helped the owners count the money and put some of it in his pocket. Now at any cost to ethical behavior MLB focused on an unlikeable, but important symbolic player to redeem itself and the legacy of Bud Selig. Instead of being in the weeds about processes and testing, as fans, we should be demanding to know how did you let this happen to our game. How did you let them debase 60, 61 and 714?

Jan 14, 2014 20:33 PM
rating: 0

All they had was Bosch, a bought criminal. The records (did not refer to Arod by name) and texts (did not name illegal PED's) required Bosch interpretation. Bosch testimony, could have been manufactured to be consistent with what was on the documents (copies only, dubious chain of custody) and texts, filling in the incriminating details with untruths that pleased his buyer.

In addition, when they tried to verify Bosch supplier of these illegal drugs, Bosch would not answer. So there is no direct evidence Bosch had access to these drugs, let alone administered them to him. Based on Arods performance Bosch could have been charging him 12K per month for beetle juice. We also have no evidence Arod paid 12K per month since Bosch said the payments were in cash, so again, we only have his word.

The obstruction with the investigation charges were weak, and all relied on Bosch as well, in some cases claiming associates and not Arod. Asking him to sign an affadavit consistent with Arods claim of evidence, and generously donating to help a friend in financial need with legal troubles that were due to MLB's desire to persecute Arod (the money involved is insignificant to Arod given his wealth).

In the end though, even if you agree Arod used illegal PED's, its a long stretch from 50 games to 162 games. Manny was suspended for just cause (for a HCG prescription) for only 50 games despite a positive test for testosterone and HCG. Perez suspension was based on 3 positive test results. There simply is no precedence for applying a progressive penalty to 1 charge.

Also, looking at the JDA program which performs tests of multiple drugs in each sample, nowhere does it mention a anything about a positive test for more than 1 drug carrying a heavier penalty than a positive test for 1 drug.
That's because the parties that signed the JDA had not agreed to stiffer penalties.

MLBPA, a party of the JDA disagrees with the length. The man who decided on the length was not compelled to testify and answer how he arrived at the number of 211, suggesting clear bias by the arbitrator who in the end delivered a sentence consistent with Buds last offer before arbitration (162 games).

The fact the last arbitrator was fired for ruling against MLB suggests a motive for such bias.

Jan 15, 2014 23:58 PM
rating: 2

They had a little more than that, they had the cell phone records. Why does A-Rod have anything whatsoever to do with an anti-aging clinic?

Jan 16, 2014 17:04 PM
rating: 0

As opposed to the millions of other people around the world who are constantly wasting money on anti-aging products, Botox, skin creams, hair transplants and all manner of other phony elixirs for no reason other than simple vanity? You ought to be asking why THEY have anything to do with anti-aging clinics and products.

At least Alex has a reason. Athletes are just like actors: Their very livelihoods depend on holding off Father Time as long as possible. It's perfectly understandable why someone in those two professions might have legitimate dealings with an anti-aging clinic in the desperate hope that something real has been discovered.

Jan 18, 2014 23:40 PM
rating: 0
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