The Second Circuit reminded us yesterday that judicial review of arbitration awards is “among the most deferential in the law.” And when district courts are not sufficiently deferential, their decisions are likely to be overturned. That happened recently in Tom Brady’s “deflate-gate” arbitration, and in an arbitration over how much a pedestrian was owed after a car accident.
In the pedestrian’s dispute, the arbitrator was assigned to determine the extent of the pedestrian’s injury and what compensation should flow from that injury. Lemerise v. The Commerce Ins. Co., 2016 WL 1458213 (R.I. April 13, 2016). The arbitrator determined the pedestrian was entitled to $150,000 in damages plus interest of $47,550. The insurance company moved to modify the arbitration award down to $100,000 – the limits of the policy. The trial court granted that motion, and the pedestrian appealed. The Supreme Court of Rhode Island reinstated the full arbitration award. It found that the trial court had erred by considering the limits of the policy, when the insurance company had not introduced that policy as an exhibit in the arbitration. Furthermore, the court found the limited statutory grounds for modifying the arbitrator’s award were not present.
In a case that garnered much more news coverage, the four-game suspension against Tom Brady was also reinstated yesterday by the Second Circuit Court of Appeals. Although the district court had found the arbitration hearing lacked fundamental fairness, in a 2-1 decision the Second Circuit found the arbitrator met the low bar required by the LMRA: he acted within his authority and he was at least arguably construing the parties’ contract.
Perhaps not surprisingly, the appellate court’s description of the Brady arbitration sounds like an entire different proceeding than the one described by the district court. This opinion describes the evidence against Brady to support the conclusion that he participated in the scheme to deflate game balls (not just was “generally aware”). It makes ten hours of testimony and 300 exhibits sound exorbitant. And it places significant emphasis on the cell phone destruction.
The opinion also went out of its way to emphasize that this process was what the players association bargained for, even if it “may appear somewhat unorthodox” to have the Commissioner first impose discipline and then preside over a challenge to his discipline in arbitration. As a result, the players’ remedy “is not judicial intervention, but” to negotiate a different deal next time. In an example of the snarky tone used for many of the arguments made on behalf of Brady, the majority wrote (about the comparison to substance abuse) that even if Brady “may have been entitled to notice of his range of punishment, it does not follow that he was entitled to advance notice of the analogies the arbitrator might find persuasive in selecting a punishment within that range.”
Today’s lesson is that famous athletes are not entitled to a less deferential standard of review for arbitration awards than the rest of us. And, if an arbitration award in your favor is vacated by a trial court, it may be worth your while to appeal.