NFL Players Ass'n v. NFL Mgmt. Council ( 2013 )

12-0402-cv
NFL Players Ass’n v. NFL Mgmt. Council
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS
GOVERNED BY THIS COURT’S LOCAL RULE 32.1.1 AND FEDERAL RULE OF APPELLATE
PROCEDURE 32.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS
COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC
DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated Term of the United States Court of Appeals for the Second Circuit, held
at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of
New York, on the 19th day of April, two thousand thirteen.
Present: SUSAN L. CARNEY,
CHRISTOPHER F. DRONEY,
Circuit Judges,
PAUL G. GARDEPHE,
District Judge.*
______________________________________________________
|
NATIONAL FOOTBALL LEAGUE PLAYERS |
ASSOCIATION, on behalf of Steve Harvey, David |
Alexander, Marlon Kerner, Charles Smith, Dusty Renfro, |
Michael Swift, and Jason Peter, |
|
Petitioner-Appellee, |
|
v. | No. 12-0402-cv
|
NATIONAL FOOTBALL LEAGUE MANAGEMENT |
COUNCIL, on behalf of The Buffalo Bills, The New York |
Jets, and The Carolina Panthers, |
|
Respondent-Appellant, |
|
THE NEW YORK JETS, THE CAROLINA PANTHERS, |
*
The Honorable Paul G. Gardephe, United States District Judge for the Southern District of
New York, sitting by designation.
and THE BUFFALO BILLS, |
|
Respondents.** |
______________________________________________________|
Appearing for Appellant: REX S. HEINKE (L. Rachel Lerman, on the brief),
Akin Gump Strauss Hauer & Feld LLP, Los
Angeles, CA (Daniel L. Nash, Stacey Eisenstein,
Akin Gump Strauss Hauer & Feld LLP,
Washington, DC, on the brief).
Appearing for Appellee: JEFFREY L. KESSLER (David G. Feher, Adam J.
Kaiser, Jeffrey H. Newhouse, on the brief), Winston
& Strawn LLP, New York, NY.
Appeal from the United States District Court for the Southern District of
New York (Paul A. Crotty, Judge).
UPON DUE CONSIDERATION, it is hereby ORDERED, ADJUDGED, and
DECREED that the January 3, 2012 Order of the district court be and it hereby is
VACATED and the cause remanded for further proceedings consistent with this
Order.
Respondent National Football League Management Council (the
“Management Council” or “Management”) appeals from an order of the district
court that addressed the terms of an injunction it had earlier issued.1 Nat’l Football
League Players Ass’n v. Nat’l Football League Mgmt. Council, No. 08 Civ. 3658,
2011 WL 1137334, at *2 (S.D.N.Y. Mar. 25, 2011). The Management Council is the
exclusive bargaining representative of the thirty-two National Football League
**
The Clerk of the Court is directed to amend the official caption to conform to the caption
shown above.
1
The order also declined to hold Management in contempt for violating the earlier-entered
injunction. Neither party appeals the district court’s ruling on this question.
2
Clubs (the “Clubs”). The National Football League Players Association (the
“Players” or the “NFLPA”) is the exclusive bargaining representative of National
Football League players and the party at whose instance the injunction was issued.
We assume the parties’ familiarity with the facts and record of the prior
proceedings, to which we refer only as necessary to explain our decision.
The NFLPA and the Management Council are parties to a collective
bargaining agreement (“CBA”) that incorporates a standard Player’s Contract (the
“Player’s Contract”) between a player and his Club. Together, these agreements
provide that when a player suffers a football-related injury that prevents him from
playing, his Club must protect him in two ways. First, it must pay him his full
salary for the remainder of the season in which he is injured. Second, if the player
remains unable to play at the beginning of the following season, the Club may
terminate his contract, but it must pay him a limited salary for that season.
Like other injured workers, injured players are entitled to seek benefits from
state workers’ compensation funds. Paragraph 10 of the Player’s Contract
addresses a Club’s rights when one of its players is entitled to receive both state
workers’ compensation and salary.2 Under such circumstances, Paragraph 10
authorizes the Club to deduct the player’s workers’ compensation award from the
amount it owes him in salary. The Management Council and the Players agree that
2
Paragraph 10 provides in full: “Any compensation paid to Player under this contract or
under any collective bargaining agreement in existence during the term of this contract for a period
during which he is entitled to workers’ compensation benefits by reason of temporary total,
permanent total, temporary partial, or permanent partial disability will be deemed an advance
payment of workers’ compensation benefits due Player, and Club will be entitled to be reimbursed
the amount of such payment out of any award of workers’ compensation.” App. 37.
3
this rule — which they refer to as the “offset” — is designed to preclude players
from “double-dipping” by concurrently receiving workers’ compensation payments
and salary.
The Players and Management disagree, however, about the amount of the
offset that Paragraph 10 authorizes. The Players argue that the Clubs are entitled
to collect only those state workers’ compensation payments an injured player
receives while the Club is paying him salary under the terms of the Player’s
Contract. The parties refer to this as a “time” offset. Management argues, in
contrast, that a Club is entitled to collect an injured player’s workers’ compensation
payments until such time as the Club has recouped the total amount of salary it
paid the player while he was injured, even if, while those additional worker’s
compensation payments are being made by the state, the player is no longer under
contract to the Club and no longer receives a salary from the Club. The parties
refer to this as a “dollar-for-dollar” offset.
In 2005, pursuant to the dispute-settlement mechanism established by the
CBA, the Players brought an arbitration proceeding in New York seeking a
declaration that Paragraph 10 mandates a time offset. Two years later, after
extensive proceedings, Arbitrator Shyam Das issued an award in favor of the
Players. He summarized his findings as follows: “Paragraph 10 of the NFL Player
Contract provides only for a time offset, and not for a dollar-for-dollar
offset . . . . [T]his is the law of the shop under this CBA and is binding on all the
4
Clubs.” App. 63.3 Arbitrator Das recognized “a separate issue . . . as to whether
Paragraph 10 limits the right of a state to provide a greater offset in determining
what workers’ compensation benefits a player is entitled to under state law,” App.
61 — that is, whether Paragraph 10 preempts state workers’ compensation laws.
Arbitrator Das found that this preemption question was “a mat[t]er to be decided in
the appropriate state or federal forum, not arbitration under the CBA.” App. 62.
Soon after the arbitrator issued his award, the Players filed a petition in the
district court to confirm the award. The district court granted that petition on
March 29, 2009.
After the district court confirmed the award, the Clubs — acting individually
and not through the Management Council — continued to seek dollar-for-dollar
offsets in various state workers’ compensation tribunals and courts. Spurred by the
Clubs’ actions, the Players returned to the district court requesting injunctive relief.
They argued that, by making the dollar-for-dollar arguments in state fora, the
Clubs were violating the arbitration award that the district court had confirmed.
In response, on March 25, 2011, the district court issued an Order granting
injunctive relief to the Players. The court framed its injunction as follows:
“Management is hereby enjoined from attempting to assert dollar-for-dollar offsets
under Paragraph 10 of the CBA.” Nat’l Football League Players Ass’n, 2011 WL
1137334, at *2 (the “2011 Order”).
3
Arbitrator Das’s ruling was consistent with a long line of arbitration decisions construing
Paragraph 10. These earlier decision had been issued in connection with disputes between individual
players and individual Clubs. See App. 49 (listing arbitration decisions dating from 1990).
5
That did not end the matter. After several Clubs continued to seek dollar-for-
dollar offsets, ostensibly (as described by Management in at least one case) “under
New York state law in New York workers’ compensation courts, but not under
Paragraph 10,” Appellant’s Br. at 14 (emphasis added), the Players moved the
district court to hold Management in contempt.
In an opinion dated January 3, 2012, the district court denied the contempt
motion. At the same time, it “clarifie[d] the Order’s meaning,” declaring that “[i]n
addition to providing for a time offset, Paragraph 10 of the Player’s Contract
preempts any state law to the contrary.” Order at 3, Nat’l Football League Players
Ass’n, No. 08 Civ. 3658 (PAC) (S.D.N.Y. Jan. 3, 2012), ECF No. 62 (the “2012
Order”).
The Management Council now challenges the district court’s 2012 Order on
two grounds. First, Management contends that because Arbitrator Das expressly
declined to address whether Paragraph 10 preempts state laws providing for dollar-
for-dollar offsets, the district court was not authorized to resolve the preemption
issue in proceedings to enforce the arbitration award. Second, Management argues
that even if the district court had the authority to reach the preemption question,
its analysis was incorrect.
We agree with Management that, given the procedural posture of the case
before it, the district court lacked the authority to reach the preemption question.
Accordingly, we vacate the 2012 Order. We do not consider the merits of the
district court’s preemption analysis, however, and our decision is without prejudice
to future adjudication of the preemption question through a separate action.
6
Preliminarily, we consider two procedural challenges to Management’s
appeal. First, the Players argue that the appeal is untimely because it was not filed
within thirty days of the district court’s entry of the 2011 Order, which first
provided injunctive relief. See Fed. R. App. P. 4(a)(1)(A). As the district court
recognized, however, the injunction contained an important ambiguity regarding its
scope and effect in state court. This aspect remained muddy until the court’s 2012
Order. The district court’s clarification in the 2012 Order was sufficiently material
that we consider it to have reset Management’s time to appeal, and Management
timely proceeded thereafter. See Priestley v. Headminder, Inc., 647 F.3d 497, 502
(2d Cir. 2011).
Second, the Players argue that Management cannot appeal from the 2012
Order because Management prevailed in the contempt proceeding. We reject this
position, too, because the court’s 2012 order “substantially change[d] the terms and
force of the injunction.” Weight Watchers Int’l, Inc. v. Luigino’s, Inc., 423 F.3d 137,
141–42 (2d Cir. 2005) (internal quotation marks omitted). It would elevate form
over substance to preclude Management from appealing an order that was clearly
— and newly — adverse to its interests. We therefore reject the Players’ procedural
challenges and turn to considering whether the district court properly addressed
the preemptive effect of Paragraph 10.
The Players brought their petition to confirm the arbitration award under
section 301 of the Labor Management Relations Act, 29 U.S.C. § 185(a). Section 301
gives district courts jurisdiction over “[s]uits for violation of contracts between an
employer and a labor organization representing employees in an industry affecting
7
commerce as defined in this chapter, or between any such labor organizations.” Id.This provision, we have explained, “does more than confer jurisdiction”: it “is a
source of federal substantive law which the courts must fashion from the policy of
our national labor laws.” Coca-Cola Bottling Co. of N.Y. v. Soft Drink & Brewery
Workers Union Local 812, 242 F.3d 52, 54 (2d Cir. 2001) (internal quotation marks
and alteration omitted). Section 301 does not articulate the substantive or
procedural rules of the enforcement regime that it contemplates, however.
Accordingly, courts have in the past turned to the Federal Arbitration Act (“FAA”),
9 U.S.C. §§ 1–16, for guidance about arbitration enforcement conducted under
section 301. See United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 40 n.9
(1987); Coca-Cola, 242 F.3d at 54.
The FAA limits a district court’s authority when reviewing an arbitration
award. To vacate an arbitral award, for instance, a district court must find that the
award “falls within a very narrow set of circumstances,” all of which “involve
corruption, fraud, or some other impropriety on the part of the arbitrators.”
Wallace v. Buttar, 378 F.3d 182, 189 (2d Cir. 2004) (internal quotation marks
omitted); see 9 U.S.C. § 10(a). Because the FAA requires district courts to accord
significant deference to arbitrators’ decisions, the “showing required to avoid
summary confirmation of an arbitration award is high.” Willemijn
Houdstermaatschappij, BV v. Standard Microsystems Corp., 103 F.3d 9, 12 (2d Cir.
1997).
We have held that actions to confirm such awards are “straightforward
proceedings in which no other claims are to be adjudicated.” Ottley v.
8
Schwartzberg, 819 F.2d 373, 377 (2d Cir. 1987). To be sure, once a court has
confirmed an award, it has plenary authority “over subsequent proceedings
necessary to vindicate its authority, and effectuate its decrees,” including by
exercising authority over proceedings to enforce the judgment. Zeiler v. Deitsch,
500 F.3d 157, 170 (2d Cir. 2007). But this enforcement power does not extend
beyond the scope of the arbitration award: “the judgment to be enforced
encompasses the terms of the confirmed arbitration award[ ] and may not enlarge
upon those terms.” Id.Here, when the district court held that Paragraph 10 preempted contrary
state law, it in effect expanded the terms of the arbitration award. Arbitrator Das
had expressly (and properly) declined to resolve this question, and the district
court’s preemption ruling, while not unrelated to the underlying arbitration, was
not “necessary to vindicate [the district court’s] authority, and effectuate its
decree[ ].” Id. We therefore must vacate the district court’s 2012 Order regarding
the preemptive effect of the arbitration award on state law.
In the award that the district court confirmed, the arbitrator determined that
“Paragraph 10 of the NFL Player Contract provides only for a time offset” and that
“this is the law of the shop under this CBA and is binding on all the Clubs.” App.
64. As Management acknowledged at oral argument, the NFLPA is free to bring a
separate action for a declaratory judgment that, under federal labor law, Paragraph
10 preempts contrary state laws.4
4
Although we vacate the district court’s 2012 Order, our decision does not disturb the
district court’s 2011 Order. In that vein, we reject Management’s argument that, in its orders
enforcing the award, the district court could enter an injunction binding only those Clubs that were
9
Accordingly, the January 3, 2012 order is VACATED, and the cause is
REMANDED for further proceedings consistent with this opinion.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
parties to the arbitration. The Players and Management agreed, and Arbitrator Das concluded, that
because the Management Council was the Clubs’ bargaining representative, all Clubs would be
bound by the arbitration.
10