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MASN dispute update

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20 minutes ago, accinfo said:

Apparently the NY highest court is going to hear the Oriole appeal.  I would ask Frobby what this could mean if anything?

https://www.baltimoresun.com/sports/orioles/bs-sp-masn-dispute-orioles-nationals-latest-20210908-n43ba2zoarfg7operb6tf3juyy-story.html

To be honest, I’m very surprised the NY Court of Appeals decided to hear the case.    That’s great news for MASN and the Orioles, though it’s certainly not sure they’ll win the appeal.    I’d continue to think it’s unlikely they will — but I thought it was unlikely the appeal would even be heard, so what do I know?

MASN’s appellate brief is due to be filed on November 3.   I don’t know the rest of the schedule but I’d assume briefing by both sides will be completed in either late December or January, with oral argument a few months later.   So, this will go well into 2022.   

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Going from memory: The last time this case went up to the Court of Appeals, the Court of Appeals was required to accept the appeal because there were two dissenting justices in the decision appealed from. But the Court of Appeals ducked the issues on the ground that the case wasn't final. (That decision was clearly wrong, but the Court of Appeals can pretty much do what it wants.)

From a couple of things I found on-line, it appears that the issue presented by MASN/the Orioles on this appeal is whether, when a court decides that an arbitration before the arbitrators described in the contract has been improperly conducted, the court has the authority to order the parties to arbitrate before a different set of arbitrators -- that is, different from the arbitrators specified in the parties' arbitration agreement.

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46 minutes ago, spiritof66 said:

Going from memory: The last time this case went up to the Court of Appeals, the Court of Appeals was required to accept the appeal because there were two dissenting justices in the decision appealed from. But the Court of Appeals ducked the issues on the ground that the case wasn't final. (That decision was clearly wrong, but the Court of Appeals can pretty much do what it wants.)

From a couple of things I found on-line, it appears that the issue presented by MASN/the Orioles on this appeal is whether, when a court decides that an arbitration before the arbitrators described in the contract has been improperly conducted, the court has the authority to order the parties to arbitrate before a different set of arbitrators -- that is, different from the arbitrators specified in the parties' arbitration agreement.

Do we have a separate arbitrator arbitrate whether the different/new set of arbitrators is appropriate?

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4 minutes ago, BohKnowsBmore said:

Do we have a separate arbitrator arbitrate whether the different/new set of arbitrators is appropriate?

I think it will require arbitration to determine whether a separate arbitrator needs to arbitrate whether new arbitrators are needed.  

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I’m also surprised they accepted the appeal.  Maybe it was accepted based on some formula per what @spiritof66said, but generally appeals are supposed to be based on errors made by the lower court.

Ordinarily I’d say “wait for the filing” to see what Angelos argument is going to be, but we all know it’s going to be more of the same we’ve already seen. Throw everything at the wall and hope something will stick.  I still can't see a court essentially throwing out a portion of a settlement agreement willingly entered into to by both parties (the RSDC as the sole arbiter) and replace it with something else.  First, what error did the Court make? Second, even if they can plausibly demonstrate an error was made, it’s beyond the remit of the court to alter this term.  It would be hilarious though, if they forced them to mediation.

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5 hours ago, Beetlejuice said:

I’m also surprised they accepted the appeal.  Maybe it was accepted based on some formula per what @spiritof66said, but generally appeals are supposed to be based on errors made by the lower court.

Ordinarily I’d say “wait for the filing” to see what Angelos argument is going to be, but we all know it’s going to be more of the same we’ve already seen. Throw everything at the wall and hope something will stick.  I still can't see a court essentially throwing out a portion of a settlement agreement willingly entered into to by both parties (the RSDC as the sole arbiter) and replace it with something else.  First, what error did the Court make? Second, even if they can plausibly demonstrate an error was made, it’s beyond the remit of the court to alter this term.  It would be hilarious though, if they forced them to mediation.

The New York Court of Appeals, much like the U.S. Supreme Court, does pretty much what it wants to do. As I said before, it was required by a New York statute to accept the earlier appeal, but its decision to wait until after the end of the second arbitration, while incorrect under New York law, was perfectly sensible. 

I didn't mean to say, and don't think I did say, that the Court of Appeals' decision to hear the latest appeal was based on some formula. The Court of Appeals decides whether to hear an appeal when it's not required to do so (as is the case here) for all kinds of reasons, including a desire to clarify New York law where it's uncertain or confusing. I think that's probably what is going on here.

The Orioles/MASN side is represented by very good lawyers who are unlikely to just "[t]hrow everything at the wall." I believe the appeal will focus on this question (I'm quoting from the dissent in the New York Court of Appeals): "whether courts have the discretion to direct a rehearing before an entirely different arbitral forum, where it is shown that a fundamentally fair hearing cannot be had in the parties' chosen forum." When this question came before the Appellate Divisions, three judges answered the question "no," and two said "yes": courts do have the power to do that and should do so here because "MLB's pervasive bias and unfair conduct has infected the RSDC so as to frustrate the parties' intent to submit their dispute to a fundamentally fair arbitration." (For what it's worth, the two judges who agreed with MASN/the Orioles are highly respected, and one was and is the presiding judge of that court as well as a former Ivy League Pitcher of the Year.)

Some years ago, I looked at this question and discussed it with at least one expert in the field. I came away with the impression that the answer was uncertain in New York. I am guessing this is the issue that the Court of Appeals decided it wants to consider and clarify under New York law. We'll see.

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53 minutes ago, GuidoSarducci said:

I wonder how much money Angelos has wasted on this case, it’s gone on for what, ten years now and probably spent a few million per year.  Maybe enough to sign a decent pitcher. 

I think he gets alot of enjoyment out of dragging this out. 

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9 hours ago, jabba72 said:

I think he gets alot of enjoyment out of dragging this out. 

That and even if this appeal is denied, MASN already saved a couple million on the second RSDC decision.

I can’t see the court is going to pull the trigger on rewriting the agreement without knowing how they will rewrite the agreement.  Then again, if all the appellate court has to do is decide “yes we can”, then maybe they’d be willing to toss this poop sandwich back to their colleagues.

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14 hours ago, spiritof66 said:

For what it's worth, the two judges who agreed with MASN/the Orioles are highly respected, and one was and is the presiding judge of that court as well as a former Ivy League Pitcher of the Year.

The majority however, makes fun of the dissent:

While the dissent waxes poetic about the purity of the game of baseball, MLB is first and foremost a business, governed by its constitution and innumerable agreements and contracts. Because arbitration is a matter of contract, "the parties to an arbitration can ask for no more impartiality than inheres in the method they have chosen" and the FAA permits parties to select arguably partial arbitrators, if doing so serves their interests

and from elsewhere in the majority (emphasis added)

Contrary to the view of the dissent, there has been no showing of bias or corruption on the part of the members of the reconstituted RSDC, and the Nationals will use new counsel at the second arbitration. Speculation that MLB will dictate the outcome of the second arbitration by exerting pressure on the new members of the RSDC does not suffice to establish that they will not exercise their independent judgment or carry out their duties impartially, or that the proceedings will be fundamentally unfair.

But it’s this part of the majority opinion that really gets to the heart of the problem.  That is the Court can’t hope to “fix” by shipping this off to the AAA:

…to compel the parties to arbitrate before a body other than one to which they knowingly agreed, just because MASN and the Orioles are dissatisfied with the result, would violate the Nationals' right to assert their contractual rights under the agreement and create undue uncertainty within this industry, and others, that have chosen to use panels composed of industry insiders, with specialized expertise, to arbitrate complex disputes.

Edited by Beetlejuice

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Nice job by both @spiritof66 and @Beetlejuice of summarizing the Appellate Division’s majority and dissenting views.   My personal feelings are that (1) a court should not override parties’ choice of a specific arbitration forum without a super-compelling reason, and (2) the problems with the first arbitration hearing weren’t so bad that I would conclude that a second arbitration in that forum couldn’t be fair.  Putting aside the specifics of this one case, there are all kinds of reasons why courts don’t want to get into the business of second guessing arbitrators’ decisions or the parties’ contractual agreements about who the arbitrators should be.   

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On 9/11/2021 at 9:42 AM, Frobby said:

My personal feelings are that (1) a court should not override parties’ choice of a specific arbitration forum without a super-compelling reason

Well, therein lies the rub (if I remember my Shakespeare correctly).

Industries often specify arbitration forums to conflict of interest entities precisely because they have the expertise to hear such disputes.  Inside baseball is an apt term in this case.  Who knows more about baseball RSN than do baseball ownership?  The majority opinion’s decision states this and is concerned about how this will effect other industries where contracts require disputes to be settled by industry experts.

The real question is not whether fairness can be had in such an arbitration, but whether a participant can demand a second (or in this case a third) bite at the Apple because they are unhappy with the outcome.   While Angelos has claimed that the arbitrations were unfair because of bias, he never established bias, much corruption or deceit.

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