Garvey v. Roberts, 98-55263

• Citation: 203 F.3d 580
• Decision Date: 10 February 2000
• Docket Number: No. 98-55263,98-55263
• Parties: (9th Cir. 2000) STEVE GARVEY, Petitioner-Appellant, v. THOMAS T. ROBERTS, Arbitrator; MAJOR LEAGUE BASEBALL PLAYERS OPINION ASSOCIATION,Respondents-Appellees
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 580

203 F.3d 580 (9th Cir. 2000)

STEVE GARVEY, Petitioner-Appellant, v. THOMAS T. ROBERTS, Arbitrator; MAJOR LEAGUE BASEBALL PLAYERS OPINION ASSOCIATION,Respondents-Appellees.

No. 98-55263

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Argued and Submitted September 14, 1999

Filed February 10, 2000

[Copyrighted Material Omitted] COUNSEL: Neil Papiano, Iverson, Yoakum, Papiano & Hatch, Los Angeles, California, for the petitioner-appellant.

Virginia A. Seitz, Sidley & Austin, Washington, D.C., for the respondents-appellees.

Appeal from the United States District Court for the Central District of California; William J. Rea, District Judge, Presiding. D.C. No. CV-97-05643-WJR

Before: Stephen Reinhardt and Michael Daly Hawkins, Circuit Judges, and Ronald M. Whyte,¹ District Judge.

Opinion by Judge Reinhardt; Concurrence by Judge Hawkins; Dissent by Judge Whyte

REINHARDT, Circuit Judge²

Former professional baseball player Steve Garvey ("Garvey") appeals the district court's denial of his Amended Motion to Vacate Arbitration Award. Garvey made his motion after an arbitrator confirmed the Major League Baseball Players Association's (the "Association") denial of Garvey's claim for damages from a settlement fund which was established after arbitration decisions finding that the Major League Baseball Clubs (the "Clubs") had engaged in collusion in the market for free agent services. Garvey contends that the district court committed reversible error by denying his motion to vacate for lack of subject matter jurisdiction with an alternative denial on the merits.

I. BACKGROUND

A. The Grievances, Settlement Agreement and Framework

In 1986, 1987 and 1988, the Association filed grievances against the Clubs, alleging that the Clubs had violated the Collective Bargaining Agreement ("CBA") between the Clubs and the Association by engaging in collusion in the market for free agent services after the 1985, 1986 and 1987 baseball seasons. On December 21, 1990, after arbitration decisions finding that the Clubs had engaged in collusion and caused extensive damage to numerous players, the Association and the Clubs entered into a Global Settlement Agreement ("Settlement Agreement") to resolve the grievances. Pursuant to the Settlement Agreement the Clubs established a fund of $280 million to be distributed to damaged players.

The Settlement Agreement provided that the Association would design a "Framework" "to establish an appropriate process for evaluation and determination of individual claims" for money from the fund. The Association issued a proposed Framework for resolution of claims to an independent arbitration panel for its consideration, and any player was permitted to file objections. On September 14, 1991, after hearings on players' objections to the Framework, the arbitration panel approved the Framework with amendments.

Players claiming damages from the collusion were required to file their claims by May 20, 1991.³ The Association then began evaluating the claims pursuant to the Framework.

Under the Framework, as the Association concluded the evaluation of individual players' claims for a particular season or seasons, it was required to propose an overall distribution plan or a partial distribution plan for the claims relating to that season or seasons. Each recommended plan was then submitted to player claimants and the arbitrator. Player claimants or their agents could object to the Association's distribution plan recommendations, and the Association then responded by providing the arbitrator with a written statement of how it arrived at its proposed damage evaluation for that particular player. An objecting player claimant could then request oral argument before the arbitrator.

The Framework defines the responsibility and authority of the arbitrator with regard to review of a distribution plan as follows:

. . . the arbitrator shall determine only whether the approved Framework and the criteria set forth therein have been properly applied in the proposed Distribution Plan. The arbitrator may request such information from the Association or from any objec tors which he deems necessary to make his determi nation.

If the arbitrator determines that the approved Framework and the criteria set forth therein have not been properly applied with respect to any portion of a proposed distribution Plan, he shall have the authority to modify or amend the Distribution Plan to the extent necessary, in his judgment, to cure that defect. IN DOING SO, THE ARBITRATOR MAY RAISE OR LOWER THE DAMAGE ALLOCATION AND/OR MAJOR LEAGUE SERVICE AWARD TO ANY PLAYER OR PLAYERS . . . .

The arbitrator shall promptly issue a written award regarding any proposed Distribution Plan after he has considered all objections and after he has con ducted his own independent review, which award shall specify the specific damage allocation for each individual player claimant pursuant to the Distribu tion Plan. The content of the written award shall oth erwise be subject to the sole discretion of the arbitrator. As mandated by the Settlement Agree ment, all decisions of the arbitrator regarding any proposed Distribution Plan will be final and binding on all individual player claimants, the Association, the Major League Baseball Player Relations Com mittee and the Clubs.

(Emphasis in original).

B. The Standard Under the Framework for Assessing Lost Contract Extension Claims

At issue in this appeal is Garvey's claim for damages resulting from an alleged lost contract extension for the 1988 and 1989 baseball seasons which Garvey claims resulted from the Clubs' collusion. Garvey's claim, which was based on his 1987 salary was approximately $3,000,000 for the two year period.

The Framework sets forth, at Section II, the standard for a player's recovery of damages for an alleged lost contract extension, as follows:

Some players who were under contract for a par ticular season believe that, but for the Clubs' collu sion, they would have signed contract extensions (or better extensions than they actually signed) covering future seasons. Although any player may file such a claim, the evidence indicates that there will be few potentially valid claims in this group. Such a claim may be potentially valid if:

(a) the extension would have been signed after November 1, 1985; and

(b) the extension would have begun with the 1987 season or future seasons.

(Emphasis in original).

The Framework then sets forth at Section V, "Evaluation of Individual Player Claims," the following factors to be considered by the arbitrator, where applicable, in evaluating all player claims for money damages:

(a) the player's status, e.g., elected free agent; released free agent; non-tendered free agent; salary arbitration eligible;

(b) the player's Major League Service;

(c) the player's performance;

(d) the player's history of compensation;

(e) the salaries (and collusion claims, if applicable) of comparable players;

(f) collusion-free patterns of multi-year contract ing, if applicable; (g) the player's experience as a "new look " free agent, if applicable;

(h) the Guidelines Regarding Allocation of the Set tlement Amount described below in Paragraph (3);

(i) the General Principles described below in Para graph (4); and

(j) any other factor which would normally apply in the determination of a player's salary and other benefits in a collusion-free market, including but not limited to, those factors set forth in Article VI of the Basic Agreement.

The arbitrator further addressed the standard regarding lost contract extension claims in his February 14, 1994 award regarding Plan Distribution II:

It is clear that in the absence of collusion some of these players would have secured an extension to a multi-year contract signed prior to collusion but oth ers would not have received such an opportunity with or without collusion. The task of identifying from the record those players who would fall in one or the other grouping is difficult. The demarcation must nevertheless be drawn and, in order to assign some continuity to the results, I agree with the approach of the Players Association in this regard, an approach which recognizes lost extension claims only in those cases where evidence exists that a spe cific offer of an extension was made by a club prior to collusion only to thereafter be withdrawn when the collusion scheme was initiated.

The arbitrator reiterated this standard in later denying Garvey's claim, further explaining that "in each of the few contract extension claims recognized it was `shown that the club in question actually made a specific offer of a contract extension only to later summarily withdraw that offer pursuant to the scenario of the collusion program.' "

C. The Garvey Arbitration

Garvey's contract with the San Diego Padres covered the years 1983-1987. Garvey claimed damages from the settlement fund based on his allegation that the Padres would have given him a two-year contract extension for the years 1988 and 1989, but did not because of collusion.

On February 8, 1996, the Association released its proposed distribution plan covering the 1988 Claims. The plan awarded nothing to Garvey on his claim. In the period of almost ten years between the time the first collusion grievance was filed and the issuance of the 1988 distribution plan, Garvey did not present the Association with any evidence that the Padres actually offered to extend his contract. Garvey objected, and a hearing was held before the arbitrator on July 2, 1996.⁴

At the arbitration hearing, Garvey testified that the Padres made a pre-collusion offer in September 1985 to extend his contract for the 1988 and 1989 seasons, and that the Padres subsequently withdrew that offer because they had begun colluding with other teams. Garvey presented at the July 2, 1996 hearing, for the first time, a June 28, 1996 letter from Ballard Smith, the President/CEO of the...