Todd France v. Jason Bernstein

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 20-3425
_____________
TODD FRANCE
v.
JASON BERNSTEIN,
Appellant
_______________
On Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. No. 1-20-cv-1443)
District Judge: Honorable Yvette Kane
_______________
Argued
March 14, 2022
Before: JORDAN, KRAUSE and PORTER, Circuit Judges
(Filed: August 9, 2022)
_______________
John D. Comerford [ARGUED]
James B. Martin
Dowd Bennett
7733 Forsyth Boulevard – Suite 1900
St. Louis, MO 63105
Counsel for Appellant
William J. Clements
Michael A. Iaconelli
Glenn A. Weiner [ARGUED]
Klehr Harrison Harvey Branzburg
1835 Market Street – Suite 1400
Philadelphia, PA 19103
Counsel for Appellee
_______________
OPINION OF THE COURT
_______________
JORDAN, Circuit Judge.
Courts will disturb an arbitration award only in limited
circumstances, but those circumstances do occasionally arise.
Under the Federal Arbitration Act (“FAA”), a court may, for
example, vacate an award that was procured by fraud, and
fraud is exactly what Jason Bernstein says was perpetrated by
Todd France in the arbitration underlying this suit. Like
something out of the film Jerry Maguire, these two sports
agents fought over Bernstein’s claim that France improperly
organized a money-making event for a football player who was
then one of Bernstein’s clients, all in an effort to induce that
player to fire Bernstein and hire France. The matter went to
arbitration, and, in pre-hearing discovery, France denied
2
possessing any documents pertaining to the event. He flatly
denied having any involvement in the event at all. The end of
this tale hasn’t been told yet, but this much is now clear: France
lied to Bernstein and the arbitrator, though his lies were not
uncovered until after the arbitration was decided in his favor.
Because the arbitration award was procured by France’s fraud,
we will reverse the District Court’s order confirming the award
and will remand with the instruction to vacate it.
I. BACKGROUND
A. The Parties and the Signing Event
Bernstein and France are certified contract advisors
(more commonly referred to as agents) registered with the
National Football League Players Association (“NFLPA”).
They each represent NFL players in contract negotiations with
NFL teams and in related matters. Bernstein is also the
majority owner of Clarity Sports International LLC (“Clarity
Sports”), which advises and represents professional athletes in
matters other than their playing contracts, such as marketing
and endorsement contracts. France, meanwhile, worked for the
agency CAA Sports LLC (“CAA Sports”) during the period
relevant to this case. As agents for NFL players, Bernstein and
France must comply with the NFLPA Regulations Governing
Contract Advisors (“the NFLPA Regulations”), which are a
product of the collective bargaining agreement the players
have with the NFL and its constituent teams.
Bernstein’s roster of clients used to include Kenny
Golladay, a wide receiver who signed a standard representation
agreement with Bernstein in late 2016, before Golladay’s
rookie season with the Detroit Lions in 2017. Golladay
3
simultaneously signed a separate agreement with Bernstein’s
Clarity Sports for representation in endorsement and marketing
deals. Under those contracts, Bernstein and Clarity Sports
were Golladay’s exclusive representatives. As required by the
NFLPA Regulations, the contracts were filed with the NFLPA.
That agency relationship ended on January 29, 2019,
when Golladay terminated both agreements. Break-ups are
seldom happy affairs, but Golladay’s goodbye was particularly
troubling to Bernstein because, three days earlier, Golladay
had participated in an autograph-signing event in Chicago that
Bernstein had played no role in arranging – even though setting
up such publicity and money-making opportunities for
Golladay was precisely what Bernstein and Clarity Sports were
hired to do. Bernstein became aware of the event, but only
because he saw a Facebook post from one of the three sports
memorabilia dealers promoting it. Once Golladay’s
agreements with Bernstein and Clarity Sports were
terminated,1 Golladay immediately signed with France.
Bernstein soon came to believe that France and his colleagues
from CAA Sports were behind the signing event the whole
time.
B. Arbitration
Five months later, Bernstein filed a written grievance
against France pursuant to the dispute resolution provisions in
the NFLPA Regulations. In his grievance, Bernstein alleged,
1
Pursuant to the standard representation agreement,
termination occurred five days after Golladay gave notice,
which, according to the arbitrator, was on January 24.
4
“[o]n information and belief,” that France initiated contact with
Golladay, arranged and negotiated the autograph-signing event
for him, and then used the event’s proceeds to induce him to
terminate his relationship with Bernstein and to sign with
France. (J.A. at 90-91.) In doing so, Bernstein said, France
violated two provisions of the NFLPA Regulations. First, he
allegedly violated Section 3.B(2), which prohibits agents from
“[p]roviding or offering money or any other thing of value to
any player or prospective player to induce or encourage that
player to utilize his/her services[.]” (J.A. at 50, 92.) Second,
France allegedly violated Section 3.B(21)(a), which prohibits
agents from
[i]nitiating any communication, directly or
indirectly, with a player who has entered into a
Standard Representation Agreement with
another Contract Advisor and such Standard
Representation Agreement is on file with the
NFLPA if the communication concerns a matter
relating to the:
(i) Player’s current Contract Advisor;
(ii) Player’s current Standard Representation
Agreement;
(iii) Player’s contract status with any NFL
Club(s); or
(iv) Services to be provided by prospective
Contract Advisor either through a
Standard Representation Agreement or
otherwise.
5
(J.A. at 52, 92.) Bernstein alleged that he had suffered $2.1
million in pecuniary losses, which he claimed is what his
commissions on Golladay’s next big playing contract and
accompanying endorsement and marketing deals would have
been. As required by the NFLPA Regulations, the dispute was
referred to arbitration.
1. Pre-Hearing Discovery
The NFLPA appointed an arbitrator, and the parties
were permitted to take discovery from each other before the
hearing. That discovery included document production and
depositions of Bernstein and France, although France resisted
such discovery and forced Bernstein to pursue an order from
the arbitrator. At France’s deposition on November 7, 2019,
he repeatedly denied having any involvement in Golladay’s
participation at the autograph-signing event.
Bernstein’s efforts to obtain documents from France
proved frustrating. Although France promised to produce
documents in response to certain requests – and eventually did
produce some, though only after Bernstein complained to the
arbitrator – France denied having any documents responsive to
key requests about Golladay’s appearance at the signing event.
Specifically, Bernstein asked for
• “Each and every document, or communication from you
to any other person, that concerns, relates to, or
mentions the January 21, 2019 appearance and
autograph signing by Kenny Golladay that is referenced
in the Grievance.”
6
• “Each and every document, or communication from you
to any other person, that concerns, relates to, or
mentions the negotiations and/or discussions for, about,
or concerning the January 21, 2019 appearance and
autograph signing by Kenny Golladay that is referenced
in the Grievance.”
• “Any contracts or agreements that concern, relate to, or
mention the January 21, 2019 appearance and autograph
signing by Kenny Golladay that is referenced in the
Grievance.”
• “Any contracts, agreements, documents or
communications that concern, relate to, or mention the
sale of merchandise, items, and/or sports memorabilia
signed, autographed, and/or inscribed by Golladay
during the January 21, 2019 autograph signing that is
referenced in the Grievance.”
(J.A. at 2807-08.)
France’s response to each of those requests was “none.”
(J.A. at 2807-08.) France also took the position that he would
produce documents only if they were in his personal
possession. He asserted that he would not collect and produce
documents in the possession of non-parties, including “co-
employees at CAA Sports, representatives, attorneys,
accountants, affiliates and agents[,]” despite Bernstein’s stated
desire to reach those people with his document requests. (J.A.
at 2804.) In other words, in France’s world, it didn’t matter
whether documents were under his control; if they were not
physically in his possession, he was not going to turn them
over.
7
Bernstein took issue with France’s cramped
interpretation of his (France’s) discovery obligations, and he
brought the issue to the arbitrator’s attention in an email
requesting an order that France produce responsive documents
in CAA Sports’ possession. In response, France declared that
only he – and not CAA Sports or any of his colleagues – was
bound by the NFLPA Regulations and thus obligated to
comply with discovery in arbitration. Nevertheless, he
promised that, “for the avoidance of any doubt, [he was] in fact
producing the responsive documents that [were] in [his]
possession or control” (J.A. at 2816) – even though “control”
seemed not to mean much, if anything, to him, because he
maintained that he did not control documents in the possession
of CAA Sports (or any other non-party).
Bernstein still wanted access to documents from
individuals and entities other than France alone, and so, with
just a few weeks until the first day of the arbitration hearing,
he opted “to end the debate” over the scope of France’s
obligation to produce documents. (J.A. at 2814.) In order to
do so, he asked the arbitrator to authorize a subpoena for
documents from CAA Sports. Soon after, he requested
authorization for six additional subpoenas directed to other
non-parties: Golladay; the three sports memorabilia dealers
that promoted the signing event; Golladay’s mother; and a
mentor of Golladay’s named Kenneth Saffold, Jr.2 The
2
Golladay, his mother, and Saffold had signed
affidavits attached to France’s supplemental answer to the
grievance. Their affidavits were consistent with the story
8
arbitrator authorized all seven subpoenas, but, he cautioned, he
did not have authority to enforce those subpoenas.
Bernstein served the subpoenas on CAA Sports, two of
the sports memorabilia dealers, and Saffold.3 The record does
not show whether he served the other non-parties for whom
subpoenas were issued. Because Bernstein did not seek to
enforce any of the subpoenas in federal court, he had to live
with whatever was voluntarily given. That turned out to be
nothing, with the exception of Saffold’s testimony at the
hearing, as summarized below.
2. Arbitration Hearing
The arbitration hearing was held in Alexandria,
Virginia, on November 19 and December 12, 2019. The
arbitrator heard testimony from France, Bernstein, Saffold, and
a Clarity Sports employee. France repeatedly and consistently
denied that he had anything to do with the autograph-signing
event, and he emphasized that Bernstein had no evidence –
documentary or testimonial – showing anything to the
contrary. Bernstein nevertheless got on the record that
France later presented at the arbitration hearing. See infra
Section I.B.2.
3
The parties dispute whether any of the non-party
subpoenas were properly served. According to France,
Bernstein served non-party subpoenas on France’s counsel,
who may not have been an appropriate representative for
service of subpoenas.
9
Golladay was paid approximately $7,750 for his attendance
and participation at the signing event.
In his defense, France presented evidence suggesting
that the signing event had little to do with Golladay’s decision
to switch agents. According to testimony from Saffold, during
the 2018 offseason, Golladay and Saffold discussed ways to
build Golladay’s brand. One step to doing that, Saffold
suggested, was for Golladay to get out and network with other
players and professionals in the business. A networking
opportunity arose in September 2018: a charity bowling event
hosted by one of Golladay’s teammates. With Safford’s
encouragement, Golladay attended, and he introduced himself
to France, who was also there because he represented the host
player. According to France’s testimony, Golladay told France
he was considering changing agents and asked for his phone
number. France gave Golladay his number, though he did not
recognize who he was. A later scan of the faces on the Lions’
roster told France that it was Golladay who had introduced
himself.
Still in France’s version of events, Golladay soon texted
France to follow up on their conversation at the bowling alley.
They eventually arranged to meet for dinner in early October
in Detroit. Golladay wanted to vent his frustrations about
working with Bernstein and to hear more about what France
did for his clients. The meeting went well, so two months later,
Golladay had France meet Golladay’s mother, whom Golladay
wanted to “keep … in the loop[,]” according to Saffold’s
testimony. (J.A. at 317.) After Thanksgiving, Golladay
introduced France to Saffold, who then contacted France’s
references and found no “red flags[.]” (J.A. at 318.) By mid-
December, Golladay was ready to terminate his relationship
10
with Bernstein, but Saffold told Golladay to wait until after the
2018 season was over. That pushed the issue off until late
January 2019, when Golladay finally notified Bernstein that he
was ending their agency relationship. In other words,
according to France’s version, the timing of the autograph-
signing event was purely coincidental.
The arbitrator was persuaded by that story and ruled that
Bernstein did not meet his burden of proving that France had
violated either provision of the NFLPA Regulations invoked in
the grievance. More specifically, because France had nothing
to do with the signing event – and because Golladay had
already made up his mind to switch to France by that point –
France did not violate Section 3.B(2)’s prohibition on agents
providing a thing of value to induce a player to sign with him.
And because Golladay initiated contact with France at the
charity event, France did not violate Section 3.B(21)(a)’s
prohibition on agents approaching already-represented players.
The arbitrator thus denied Bernstein’s grievance in an award
dated March 27, 2020.
C. Parallel Action in Federal Court
Later revelations call that award into serious question.
It turns out that France did indeed have crucial evidence that
should have been available to Bernstein in the arbitration.
While pursuing his NFLPA grievance against France,
Bernstein, along with Clarity Sports, was also litigating a case
(the “Parallel Action”) in the U.S. District Court for the Middle
District of Pennsylvania against CAA Sports and the three
sports memorabilia dealers involved in the signing event. The
suit alleged tortious interference with contractual relationships.
See Third Amended Complaint, Clarity Sports Int’l LLC v.
11
CAA Sports LLC, No. 1:19-cv-00305-YK-SES (M.D. Pa.
July 17, 2020), ECF No. 120. Discovery in that suit yielded
information pertinent to the grievance against France. The
problem for Bernstein was that the information did not surface
until June 2020, roughly two months after the arbitrator’s
decision denying the grievance. Bernstein had asked the
arbitrator for an extension to file a post-hearing brief in light of
the then-anticipated evidence from the Parallel Action, but the
arbitrator denied that request.
The newly revealed evidence showed that France was
in fact involved with the autograph-signing event. His
involvement was at least implied in an interrogatory response
from one of the memorabilia dealers, who said that one of
France’s colleagues at CAA Sports, Jake Silver, was
instrumental in setting up the signing event:
Jake Silver is the person we have historically
dealt with at CAA. Near the Christmas holidays
in late December 2018, I had a telephone
conversation with Jake Silver regarding such
marketing events (such calls between us and
various other parties are not unusual, but occur
frequently in our ordinary course of business). …
[W]hile discussing the possibility of various
signing events, Jake Silver mentioned that Mr.
Golladay, a player for the Detroit Lions, might
be interested in doing an autograph signing
event, and asked us if we were interested.
(J.A. at 1833.) The same dealer also produced screenshots of
text messages, one of which showed a thread among the dealers
discussing event logistics, including “[c]ar service for
12
Kenny/mom/Todd CAA[,]” presumably referring to Golladay,
his mother, and France. (J.A. at 1853.) In a subsequent
deposition, the dealer admitted that Silver said that someone
named Todd would be joining Golladay at the signing event.
No one has suggested who else “Todd” from CAA could be
except for Todd France. In fact, Bernstein received other
evidence showing that France was scheduled to fly to Chicago
the day before the event.
As discovery continued in October 2020, it became
perfectly clear that France was involved in arranging the
signing event. CAA Sports produced an email from Silver to
France attaching a contract for the event for Golladay’s
signature, plus another email from France to Golladay
attaching the same contract and asking him to sign and return
it.
D. Action to Confirm or Vacate the Arbitration
Award
Shifting back in time to April 2020, a month after the
arbitrator issued the award denying Bernstein’s grievance,
France filed a petition to confirm the award in the U.S. District
Court for the Eastern District of Virginia, the district
encompassing the site of the arbitration. Shortly thereafter, he
filed a motion seeking the same relief. With new evidence in
hand, Bernstein then cross-moved to vacate the award, arguing,
among other things, that France had procured the arbitration
award by fraud. His motion to vacate relied on the
memorabilia dealer’s interrogatory response about being
contacted by Silver and the text message screenshot and
deposition testimony showing that “Todd” was going to ride
with Golladay to the signing event.
13
In opposition, France asserted, among other things, that
Bernstein could not prove that the evidence was not previously
discoverable through diligence. Bernstein replied that he had
been diligent in seeking discovery from non-parties to the
arbitration but could not obtain enforcement of the arbitrator-
issued subpoenas and was not required to do so. He argued
that there was too little time before or between the two days of
the arbitration hearing to enforce those subpoenas. He further
asserted that he had diligently sought information from the
memorabilia dealers in his Parallel Action.
A few months later, France’s petition for confirmation
of the arbitration award was transferred from the Eastern
District of Virginia to the Middle District of Pennsylvania.
Bernstein then requested leave to file additional information in
support of his motion to vacate, attaching as exhibits the newly
produced emails sent by Silver and France with the signing-
event contract.4 He acknowledged the extensive briefing on
the cross-motions to confirm or vacate the arbitration award,
but he argued that the newly revealed emails now “prove[d]
with absolute certainty that the result in the Arbitration was
procured by ‘fraud, corruption or undue means’ within the
4
The email exchange was obviously damning on its
own but also served to refute evidence France had tendered. In
response to Bernstein’s argument that neither France nor Silver
had submitted a sworn statement denying the memorabilia
dealer’s testimony in the Parallel Action that CAA Sports
coordinated the signing event, France submitted a sworn
affidavit from Silver in which Silver attested that he organized
the event but never mentioned it to France.
14
meaning of 9 U.S.C. § 10[,]” a provision of the FAA. (J.A. at
2739.)
In the same order in which the District Court accepted
the filing of Bernstein’s additional information, it granted
France’s motion to confirm the award and denied Bernstein’s
motion to vacate it. Noting the narrow circumstances in which
a court may vacate an arbitration award, the Court reasoned
that Bernstein had not offered a satisfactory reason for why the
late-discovered evidence of France’s involvement in the
signing event was not discoverable before or during the
arbitration hearing. It specifically noted Bernstein’s failure “to
seek judicial enforcement of [his] subpoenas pursuant to the
clearly established procedures of 9 U.S.C. § 7,”5 which the
Court saw as a lack of diligence that undermined any
5
That section of the FAA provides in pertinent part:
[I]f any person or persons … summoned to
testify shall refuse or neglect to obey said
summons, upon petition the United States district
court for the district in which such arbitrators, or
a majority of them, are sitting may compel the
attendance of such person or persons before said
arbitrator or arbitrators, or punish said person or
persons for contempt in the same manner
provided by law for securing the attendance of
witnesses or their punishment for neglect or
refusal to attend in the courts of the United
States.
9 U.S.C. § 7.
15
justification for “combing through the record in a separate
action” to reconsider the arbitrator’s decision. (J.A. at 10.)6
Bernstein moved for reconsideration, making two
primary arguments. First, he responded to the District Court’s
conclusion that he had failed to explain why he did not seek
enforcement of the arbitration subpoenas. He said that a
federal action seeking enforcement of the subpoenas would
have been futile, because the parties who had later produced
the damaging evidence were all located more than 100 miles
from Alexandria and thus fell beyond the range of enforcement
of a subpoena issued by the district court located there.
Second, he emphasized that France had committed discovery
abuse in the arbitration by representing that he was willing to
produce documents responsive to Bernstein’s requests but that
“none” were in his possession pertaining to the signing event.
Thus, even setting aside the non-party subpoenas, France’s
non-production fraud was not earlier discoverable and
warranted vacatur of the arbitration award. For those two
reasons, argued Bernstein, reconsideration was necessary to
correct a clear error of law and to prevent manifest injustice.
The District Court denied the motion for
reconsideration, declaring that Bernstein was advancing an
argument that could have been raised earlier. It noted that
France, in his opposition to Bernstein’s motion to vacate,
specifically argued that Bernstein had failed to exercise
6
The Court also rejected Bernstein’s separate argument,
which he does not press on appeal, that the arbitrator refused
to hear pertinent evidence by not requiring that Golladay
appear at the hearing.
16
diligence in seeking enforcement of the arbitration subpoenas,
“and [Bernstein] had the ability to respond to this point in [his]
reply brief.” (J.A. at 21.) Although Bernstein in fact had
responded, he had argued only that he did not have enough time
to seek enforcement of the subpoenas before the fast-
approaching arbitration hearing, not that he was out of
geographic range for enforcement. The Court did not address
Bernstein’s separate argument that France’s non-production
fraud was not discoverable and was on its own an adequate
basis for vacatur.
Bernstein has timely appealed.
II. DISCUSSION7
It’s a steep climb to vacate an arbitration award. To
preserve the parties’ agreement for arbitration in lieu of
7
The FAA does not independently create federal
question jurisdiction, Moses H. Cone Mem’l Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 25 n.32 (1983), but the District
Court had diversity jurisdiction under 28 U.S.C. § 1332. We
note that the Supreme Court recently held that jurisdiction over
requests to confirm or vacate arbitration awards must be based
on “the application actually submitted to” the court, not on the
underlying substantive controversy between the parties.
Badgerow v. Walters, 142 S. Ct. 1310, 1314 (2022). That
holding does not upset the District Court’s jurisdiction here,
because France’s petition submitted to the District Court
established diversity jurisdiction, as Bernstein is a citizen of
Maryland and France is a citizen of Georgia. We have
jurisdiction pursuant to 9 U.S.C. § 16(a)(1)(D).
17
litigation, “[t]here is a strong presumption under the [FAA] in
favor of enforcing arbitration awards.” Hamilton Park Health
Care Ctr. Ltd. v. 1199 SEIU United Healthcare Workers E.,
817 F.3d 857, 861 (3d Cir. 2016) (quoting Brentwood Med.
Assocs. v. United Mine Workers, 396 F.3d 237, 241 (3d Cir.
2005)). “[T]he standard of review of an arbitrator’s decision is
extremely deferential.” Indep. Lab’y Emps.’ Union, Inc. v.
ExxonMobil Rsch. & Eng’g Co., 11 F.4th 210, 215 (3d Cir.
2021). “We will ‘vacate [an award] only under [the]
exceedingly narrow circumstances’ listed in 9 U.S.C. § 10(a).”
Freeman v. Pittsburgh Glass Works, LLC, 709 F.3d 240, 251
(3d Cir. 2013) (alterations in original) (quoting Dluhos v.
Strasberg, 321 F.3d 365, 370 (3d Cir. 2003)). That particular
provision of the FAA allows a federal court “in and for the
district wherein the award was made” to vacate the award in a
few very specific circumstances,8 one of which is “where the
“On appeal from a district court’s ruling on a motion to
confirm or vacate an arbitration award, we review its legal
conclusions de novo and its factual findings for clear error.”
CPR Mgmt., S.A. v. Devon Park Bioventures, L.P., 19 F.4th
236, 244 n.8 (3d Cir. 2021) (internal quotation marks omitted).
The District Court here did not make any factual findings with
respect to the veracity of France’s representations in arbitration
or the steps Bernstein took to discover France’s falsehoods.
Rather, it reached a legal conclusion about the reasonableness
of Bernstein’s diligence, based on undisputed facts.
8
Although the arbitration award was issued in the
Eastern District of Virginia, Bernstein could still seek a vacatur
in the Middle District of Pennsylvania after France’s
confirmation petition was transferred. Section 10’s venue
provision is permissive, allowing a motion to vacate to be
18
award was procured by corruption, fraud, or undue means[.]”
9 U.S.C. § 10(a)(1).
Bernstein says that the arbitration award here was
procured by fraud because of France’s non-production of
responsive documents, as well as his false testimony at the
arbitration hearing and his pre-hearing deposition.9 A party
making a claim like Bernstein’s must make a three-part
showing: first, that there was a fraud in the arbitration, which
must be proven with clear and convincing evidence; second,
brought “either where the award was made or in any district
proper under the general venue statute.” Cortez Byrd Chips,
Inc. v. Bill Harbert Constr. Co., 529 U.S. 193, 195 (2000).
And any objections to venue in this action lying in the Middle
District of Pennsylvania under the general venue statute, 28
U.S.C. § 1391(b), have long since been forfeited. Leroy v.
Great W. United Corp., 443 U.S. 173, 180 (1979).
9
Bernstein makes a passing argument that the
arbitration award was alternatively procured by “undue means”
– also a ground for vacatur listed in § 10(a)(1) – but he
concedes that the term “has not been defined by the courts” and
ultimately refers back to the more established test for deciding
whether an award was procured by fraud. (Opening Br. at 29-
30.) Because Bernstein does not make any undue-means
arguments that are any different from his fraud arguments, we
need not try to delineate the precise boundaries of those two
bases for vacating an award. Cf. A.G. Edwards & Sons, Inc. v.
McCollough, 967 F.2d 1401, 1404 (9th Cir. 1992) (applying
three-part “fraud” test to cases raising claims of “undue
means”).
19
that the fraud was not discoverable through reasonable
diligence before or during the arbitration; and, third, that the
fraud was materially related to an issue in the arbitration. E.g.,
Odeon Cap. Grp. LLC v. Ackerman, 864 F.3d 191, 196 (2d Cir.
2017).10 As the party moving to vacate, Bernstein “bears the
burden of proof” on those points. PG Publ’g, Inc. v.
Newspaper Guild of Pittsburgh, 19 F.4th 308, 314 (3d Cir.
2021).
A. There Was Fraud
Perhaps the easiest conclusion in this case, even under
a clear-and-convincing-evidence standard, is that France
committed fraud. As other courts have held, “[o]btaining an
award by perjured testimony constitutes fraud.” Dogherra v.
Safeway Stores, Inc., 679 F.2d 1293, 1297 (9th Cir. 1982);
accord Bonar v. Dean Witter Reynolds, Inc., 835 F.2d 1378,
1383-84 (11th Cir. 1988); cf. Newark Stereotypers’ Union No.
18 v. Newark Morning Ledger Co., 397 F.2d 594, 598 (3d Cir.
1968) (assuming in dicta that perjury constitutes fraud).
Further, at least for purposes of § 10(a)(1) of the FAA,
“knowingly conceal[ing] evidence” is “analogous to perjured
testimony.” Biotronik Mess-Und Therapiegeraete GmbH &
Co. v. Medford Med. Instrument Co., 415 F. Supp. 133, 138
(D.N.J. 1976).
10
See also Int’l Bhd. of Teamsters, Local 519 v. United
Parcel Serv., Inc., 335 F.3d 497, 503 (6th Cir. 2003); Gingiss
Int’l, Inc. v. Bormet, 58 F.3d 328, 333 (7th Cir. 1995); A.G.
Edwards, 967 F.2d at 1404; Bonar v. Dean Witter Reynolds,
Inc., 835 F.2d 1378, 1383 (11th Cir. 1988).
20
On the record before us, it is plain that France both lied
under oath and withheld important information demanded in
discovery. In response to Bernstein’s document requests,
France said – and then repeated “for the avoidance of any
doubt” (J.A. at 2816) – that he was going to produce responsive
documents in his possession.11 But, as for documents
pertaining to the signing event, he represented that there were
“none.” He then doubled down by denying in his pre-hearing
deposition and at the hearing that he had any knowledge of or
involvement in the signing event. His lawyer voiced the same
position in his opening statement at the arbitration hearing:
France simply had “no involvement with” the event. (J.A. at
292.)
None of that was true, as revealed by the evidence
uncovered in Bernstein’s Parallel Action. Text messages and
deposition testimony showed that “Todd” was to ride with
Golladay to the signing event, and emails to and from France
attached the contract for the event. France’s false
representations that he did not possess those emails and that he
11
Though France said he would produce documents in
his “possession or control” (J.A. at 2816), he then implied a
definition of “control” that deprived it of any clear meaning by
asserting that he would not produce documents in the
possession of his own employer – evidently including
documents he himself generated – or documents in the
possession of any other non-party. Since he indicated an
unwillingness to ask his employer or others for access to
documents, the implication was that he was only willing to
produce documents in his possession, not documents that
might be under his control.
21
had no involvement in the event amount to clear and
convincing evidence that fraud occurred.12 Cf. Bonar, 835
F.2d at 1384 (concluding that movant “submitted to the district
court clear and convincing evidence of [an expert witness’s]
perjury” by providing letters and an affidavit contradicting the
expert’s claimed background).
B. The Fraud Was Not Discoverable Through
Reasonable Diligence
As for Bernstein’s second showing – that the fraud was
not discoverable through reasonable diligence – France’s non-
production of responsive documents and false testimony fit the
bill. In fact, the fraud occurred directly in response to the
reasonable diligence that Bernstein exercised in his discovery
attempts leading up to the arbitration.
As already discussed, France promised to produce
documents responsive to Bernstein’s requests but then
represented that no such documents pertaining to the
autograph-signing event were in his possession. France
reinforced that falsehood with his subsequent denials of having
had any involvement in the event. A reasonably diligent
litigant in Bernstein’s position was entitled to rely upon those
12
The evidence is clear and convincing notwithstanding
France’s claim that “two e-mails that appear to have been sent
to or from an e-mail address for France at CAA do[] not
establish that he reviewed or wrote either e-mail.” (Answering
Br. at 26.) If there were any evidence that other people were
sneaking onto France’s computer and sending and receiving
emails in his name, we would have expected to hear of it.
22
representations without launching a separate fact-checking
investigation. That was similarly the conclusion in
MidAmerican Energy Co. v. International Brotherhood of
Electrical Workers Local 499, 345 F.3d 616, 618-19 (8th Cir.
2003), where the falsity of the prevailing party’s statements in
a pre-arbitration investigation and at the arbitration hearing
went undiscovered until after the award was issued. The losing
party later received an anonymous call that the prevailing party
may have been lying. Id. at 619. Even though the losing party
apparently did nothing to second-guess the veracity of the
statements that proved to be false, there was no dispute –
indeed everyone agreed – “that the potential fraud was not
discoverable before or during the arbitration proceedings[.]”
Id. at 622.
The issue that received much more attention before the
District Court here, and has been pressed vigorously before us,
is whether Bernstein’s failure to seek enforcement of
subpoenas directed at non-parties reflected a lack of reasonable
diligence that otherwise would have uncovered France’s fraud.
The District Court thought so, denying Bernstein’s motion to
vacate primarily on the ground that he should have pressed for
enforcement of those subpoenas, notwithstanding his argument
on reply that he did not have sufficient time to do so before or
between the two days of the arbitration hearing. The Court also
denied his subsequent motion for reconsideration, concluding
that Bernstein could have earlier raised his argument that
pursuing the subpoenas would have been futile in light of the
territorial limits on subpoena enforcement imposed by Federal
Rule of Civil Procedure 45.13
13
Rule 45 states:
23
In focusing on the non-party subpoenas, the District
Court turned its attention away from France’s unequivocal
statements denying he had possession of any documents
indicating he was involved in the autograph-signing event, and
his further insistence that he was completely uninvolved in the
event. Therein is the legal error. Reasonable diligence does
not require parties to assume the other side is lying. It piles
one unfairness on another to say that Bernstein had to seek
enforcement of the subpoenas shortly before an arbitration
hearing, just to double-check whether France was being
truthful in representing that he did not possess pertinent
documents and that he was not involved in organizing the
autograph-signing event.
And Bernstein did in fact take substantial measures
toward uncovering France’s perjury. He requested documents
A subpoena may command a person to attend a
trial, hearing, or deposition only as follows: (A)
within 100 miles of where the person resides, is
employed, or regularly transacts business in
person; or (B) within the state where the person
resides, is employed, or regularly transacts
business in person, if the person (i) is a party or
a party’s officer; or (ii) is commanded to attend
a trial and would not incur substantial expense.
Fed. R. Civ. P. 45(c)(1). It also states: “A subpoena may
command … production of documents, electronically stored
information, or tangible things at a place within 100 miles of
where the person resides, is employed, or regularly transacts
business in person[.]” Fed. R. Civ. P. 45(c)(2)(A).
24
from France, including those related to “the January 21, 2019
appearance and autograph signing by Kenny Golladay that is
referenced in the Grievance” (J.A. at 2807-08), and pressed for
France to submit to a pre-hearing deposition. When it became
clear that France would only produce documents in his
personal possession, Bernstein asked the arbitrator to authorize
subpoenas directed at CAA Sports and other non-parties.
Those subpoenas sought documents that would have exposed
France’s perjury, including his emails receiving and sending
the contract for the signing event. For example, the subpoena
directed at CAA Sports requested “[e]ach and every document,
or communication from you to any other person, that concerns,
relates to, or mentions the January 21, 2019 appearance and
autograph signing by Kenny Golladay that is referenced in the
Grievance.” (J.A. at 705.) While Bernstein served that
subpoena in October 2019, CAA Sports failed to voluntarily
comply. And in the few weeks between Bernstein’s service of
the subpoena and the first arbitration hearing, Bernstein
deposed France, who falsely testified that he had no
involvement in the autograph-signing event.
In view of that fraudulent representation, which France
made under oath, Bernstein could have reasonably concluded
it was not worthwhile to aggressively pursue non-party
discovery, especially considering the cost and burden involved
in instituting an action in federal court, as necessary to enforce
those subpoenas. That decision and the efforts Bernstein made
to that point were appropriate under the circumstances, so
Bernstein was not required to pursue judicial enforcement of
the subpoenas through an independent federal action in order
to satisfy due diligence.
25
While it would, perhaps, have been to Bernstein’s credit
to more aggressively pursue enforcement of the non-party
subpoenas, he only requested those subpoenas because he was
trying to bring CAA Sports and others within the scope of his
earlier-submitted document requests. Those subpoenas were
not looking for documents in France’s possession. France had
already said, untruthfully, that he would turn over such
documents if only he had any. Cf. Hay Grp., Inc. v. E.B.S.
Acquisition Corp., 360 F.3d 404, 409 (3d Cir. 2004) (noting
the particular burdens of enforcing arbitration subpoenas,
which are enforceable only when they command non-parties to
physically appear before the arbitrator and to bring documents
with them). Bernstein was led to believe that there were no
such documents, and, like the losing party in MidAmerican
Energy, he should not be penalized for accepting his
opponent’s representations. 345 F.3d at 618-19, 622.14
All in all, Bernstein’s efforts were reasonable under the
specific circumstances of record. It is true that Bernstein did
not pursue every possible discovery mechanism, but a litigant’s
diligence can be legally adequate even if some stones are left
unturned. “Reasonable” does not mean “perfect.”
C. The Fraud Was Material to the Case
Finally, the fraud was material, and obviously so. The
concealed evidence proved important facts supporting
14
We therefore need not decide, as the parties dispute
vigorously, whether it was legally possible for Bernstein to
have the issued subpoenas enforced (or whether, as the District
Court thought, Bernstein forfeited such an argument).
26
Bernstein’s theory of the case. “For fraud to be material within
the meaning of Section 10(a)(1) of the FAA,” Bernstein had to
“demonstrate a nexus between the alleged fraud and the
decision made by the arbitrator[.]” Odeon Cap., 864 F.3d at
196. The standard is relatively forgiving; he “need not
demonstrate that the arbitrator[] would have reached a different
result.” Id.
Bernstein’s central allegation in his grievance was that
France was behind Golladay’s signing event. The arbitrator
concluded that Bernstein did not present any evidence in
support of that theory. But Bernstein could have, and
undoubtedly would have, presented such evidence if not for
France’s lie that he had no documents reflecting his
involvement in the signing event and his further lies about
being wholly uninvolved in the event.15 Viewed in that light,
France’s fraud is clearly material. Cf. Int’l Bhd. of Teamsters,
Local 519 v. United Parcel Serv., Inc., 335 F.3d 497, 503-04
(6th Cir. 2003) (materiality was met with respect to testimony
from an investigator of the workplace altercation that led to the
complainant’s discharge and was a central factual issue at
arbitration).
A complicating factor in this case, however, is that
France presented evidence showing that, months before the
signing event, Golladay introduced himself – and his mother
and Saffold – to France and indicated an interest in hiring him.
That evidence was consistent with a conclusion that France
15
This leaves aside the possible subornation of perjury
by France in obtaining an affidavit from Silver claiming France
knew nothing of the signing event.
27
neither provided Golladay a thing of value to induce his hiring,
in violation of Section 3.B(2) of the NFLPA Regulations, nor
initiated communications with Golladay, in violation of
Section 3.B(21)(a).16 France’s testimony in that regard was
largely corroborated by testimony from Saffold and by
affidavits from Golladay and Golladay’s mother, although the
arbitrator made clear that the affidavits were getting “very,
very little” weight relative to the in-hearing testimony. (J.A. at
329.) That version of the events raises the possibility that
France’s involvement in the autograph-signing event was not
the cause of Golladay’s decision to change agents.
Still, Bernstein’s lack of evidentiary support was front
and center in the arbitrator’s decision. One of the arbitrator’s
primary factual findings was that “France had nothing to do
with arranging, planning, organizing[,] or influencing in any
way the operation of the Signing Event.” (J.A. at 274.) That
finding was part of the “totality of the evidence” that ultimately
formed the basis for the arbitrator’s decision. (J.A. at
275.) So, evidence of France’s involvement with the signing
event clearly would have been material to the arbitrator’s
decision. But France hid that evidence and then falsely
testified that he had no knowledge of or involvement in the
signing event. Had Bernstein been able to present the evidence
that France should have produced before the arbitration
hearing or that Bernstein might have sought more aggressively
16
If Golladay was the one who initiated
communications concerning a certain matter, such as the
signing event, then the NFLPA Regulations may have
permitted France to continue with communications regarding
that matter.
28
from non-parties had France not testified falsely, the arbitrator
would have had to weigh the parties’ respective stories – both
of which would have had some evidentiary support – and could
have found in favor of Bernstein. And even if parts of France’s
story were found to be true – for example, that Golladay
introduced himself to France at the charity event – the
arbitrator could still have concluded that France’s subsequent
organization of the signing event was a thing of value intended
to induce Golladay to switch agents.
While it is not for us to make those factual findings, it
is clear that the arbitrator’s fact-finding task would have looked
much different had Bernstein possessed the concealed
evidence to support the core allegation in his grievance. That
is enough for us to see a “nexus between [France’s] fraud and
the basis for the [arbitrator’s] decision.” Int’l Bhd. of
Teamsters, 335 F.3d at 503 (internal quotation marks omitted)
(quoting Forsythe Int’l, S.A. v. Gibbs Oil Co. of Tex., 915 F.2d
1017, 1022 (5th Cir. 1990)).
III. CONCLUSION
Recognizing the limited circumstances that justify
vacating an arbitration award, we are satisfied that one such
circumstance is present here: the award was procured by fraud.
An honest process is what those who agree to arbitration have
a right to expect. Accordingly, we will reverse and remand for
entry of an order vacating the arbitration award.
29