San Francisco 49ers Sue Aldon Smith
By Jeff Birren
Aldon Smith is much better at playing football than driving a car. He played college football at the University of Missouri. He redshirted as a freshman and played the next two years. He declared for the 2011 NFL college draft with two years of remaining eligibility. His gamble paid off as the San Francisco 49ers selected him with the seventh pick in the first round of the NFL Draft. Smith’s contract entitled him to receive an $8,961,092 signing bonus (NFLA Management Council v. NFL Players Association Re: Aldon Smith Order by System Arbitrator Stephen B. Burbank (“Burbank”), November 4, 2016 (“Order”), ¶3). It also contained forfeiture language (Order ¶4).
Smith started no games in 2011, but had 14 sacks and was named the 2011 Pro Football Writers of America Defensive Rookie of the Year and the Associated Press runnerup for the same award. His driving problems began with a DUI arrest in Miami on Jan. 28, 2012.
Smith’s 2012 season was even better. He had 17.5 sacks and broke Reggie White’s record for most sacks in a player’s first two years in the league. The NFL Network named him the seventh-best player in the NFL and he was the 49ers team MVP. Yet another blip on the radar occurred in summer camp when Smith was reportedly stabbed at a party. The 49ers confirmed that he had a minor injury but would not elaborate. The Santa Clara District Attorney’s Office eventually charged Smith with possession of an illegal assault weapon in October 2013.
Smith began the 2013 season extremely well, registering 4.5 sacks in the first three games, but the driving problem surfaced again. On Sept. 20, 2013, he was involved in a single-vehicle accident that led to a second DUI charge. He entered a rehabilitation facility and missed five games. He was productive enough after his return that the NFL Network listed him as the league’s 33rd-best player in 2013. That offseason he was arrested, but not charged, for an incident with TSA at Los Angeles International Airport. The reports are colorful but not relevant here.
The NFL suspended Smith for nine games during the 2014 season as a result of the second DUI. Smith rejoined the 49ers in week 11. On Aug. 7, 2015 Smith was arrested for his third DUI following a hit-and-run accident. The 49ers immediately released Smith. He signed with the Oakland Raiders on Sept. 11, 2013 and played until Nov. 17, when the NFL suspended him for a year. That suspension was to end in November 2016, but for reasons not made public, the NFL did not reinstate Smith.
During Super Bowl week, the NFL announced that Smith would be reinstated in March 2017, unless another issue arose. One did. On February 13, 2017, the San Francisco Chronicle reporter that SFPD was investigating Smith in connection with an alleged domestic violence incident. On Valentine’s Day, the NFL confirmed that it was now conducting its own investigation of the incident and there is no required time frame for that to end. Thus, Smith may continue to sit in NFL limbo.
Smith’s 2014 suspension led the 49ers to file a grievance against Smith seeking repayment of nine-seventeenths of the signing bonus that was allocable to the 2014 season. The grievance was filed on May 20, 2016 (Order ¶1).
There is nothing in the Order that says when or where the arbitration took place or how long it lasted. What is certain is that Burbank issued his Order on Nov. 4, 2016.
Burbank was no neophyte to NFL-NFLPA disputes. The U.S. District Court had appointed him Special Master in 2002 and he served in that role until 2011. When the NFL and NFLPA entered into a new collective bargaining agreement (“CBA”) he was named “Acting System Arbitrator.” Six years later he is still in that position. His day job is professor “for the administration of Justice” at the University of Pennsylvania Law School. He attended Harvard as an undergraduate and law student and was a law clerk to Chief Justice Warren Burger. He was hired at Penn as General Counsel in 1975 and joined the law faculty in 1979.
The CBA has several types of arbitrators. One panel hears matters called an “Injury Grievance” (CBA Article 44). In that proceeding a player claims that he was terminated while injured, and seeks his normal weekly salary for the period of that season that he claims to have remained injured. Another panel hears “Non Injury Grievances (CBA Article 43), involving various disputes including club discipline and disputes that are not reserved for other arbitrators, such as the System Arbitrator. The non-injury arbitrators also handle grievances known as an “Injury Protection” claims (CBA Article 45). In that dispute a player asserts that he was injured when he was released and had a contract for the following year, and again seeks the CBA-provided benefit for that year (and the following year if he had a contract for that season as well) for as many weeks of injury that he can prove. Thus, a player with three years remaining on his contract who is released prior or during the season while ostensibly injured may file an injury grievance, under Article 44, an injury protection claim under [Delete]and an “Extended Injury Protection” grievance, both under Article 45. The CBA also provides for an “Impartial Arbitrator” in Article 16 but the duties are not delineated in that article. Virtually all else that impacts the system created by the CBA is sent to the System Arbitrator.
The “System Arbitrator” is in CBA Article 15. It provides a three-year statute of limitations to bring claims, provides discovery, compensation, has little by way of defined procedures, and for the first time in NFL-NFLPA history, an appellate panel was formed to hear appeals from the System Arbitrator’s ruling. An aggrieved party must appeal, “within ten days of the date of the award appealed from” (Article 15, Section 8(a)). Decisions from the appeals panel “shall constitute full, final and complete disposition of the dispute. If there is no timely appeal of a System Arbitrator’s decision, that decision shall constitute the full, final and complete disposition of the dispute” (Article 15, Section 8(e)).
The System Arbitrator’s duties include disputes related to the CBA’s definitions (Article 1), the Standard Player Contract (Article 4), the College Draft (Article 6), disputes that impact the salary cap (Articles 7-19), Salaries (Article 26), the performance-based pay fund (Article 28), the possible addition of a regular season game (Article 31), a Mutual Reservation of Rights (Article 68), the duration of the agreement (Article 69) and governing law and principles (Article 70).
By the time of the Smith dispute Burbank was very experienced in NFL-NFLPA matters. For example, in 2014 he ruled that New Orleans Saints tight end Jimmy Graham was a “tight end” for purposes of the Franchise Tender amount (CBA Article 10). As a designated “Franchise Player” the Saints could keep Graham from leaving the team but would have to tender him compensation at his position, as calculated by reference to the top five highest paid at his position. The NFLPA contended that Graham should have been considered a wide receiver, increasing his compensation. In February 2016, Burbank ruled that the NFL had mischaracterized ticket revenue by creating an exemption that kept possibly $50 million from the players.
Smith’s signing bonus was deducted from the 49ers’ salary cap. Repayment by Smith of any amount would correspondingly increase the 49ers’ salary cap by that amount and the matter went to Burbank. Burbank can engage in colorful prose. In the Graham dispute he wrote: “In other words, the NFLPA urges an interpretation of the relevant football positions that is both dichotomous and essentialist.” He did nothing of the sort in the Smith case. His Order is a mere 11 sentences in 10 numbered paragraphs. After stating the amount of the signing bonus and that it was subject to forfeiture, he noted that Smith was “suspended for nine games by the NFL on August 27, 2014 for violating the NFL Policy and Program for Substances of Abuse and Personal Conduct Policy” (Order ¶5), that the “suspension constitutes a Forfeitable Breach under Article 4, Section 9 of the CBA” (Order ¶6), and thus Smith was “required to repay the Club $1,186,026 (9/17) of his 2014 Signing Bonus” (Order ¶7). He also mentioned that the 49ers had released Smith in August 2015 following the third DUI charge (Order ¶8).
Burbank found that between “August 2014 and March 2016, Smith repaid the Club $844,396.20 (Order ¶9) and as a result, Smith still owed the 49ers “$341,630.18” (Order ¶10). Consequently “Smith is Ordered to pay the 49ers $341,630.18, which amount represents the unpaid remainder of his Signing Bonus forfeiture required by Article 4, Section 9 of the CBA, within thirty (30) days of this Order.”
Smith did not appeal the Order nor make any further repayments. On Jan. 30, 2017, the 49ers sued Smith in the United States District Court in San Jose, California to confirm the arbitration award and get an enforceable judgment. The case was assigned to Magistrate Judge Susan van Keulen. Judge van Keulen was sworn in on Jan. 3, 2017 following a career at O’Melveny & Myers.
The complaint is short and to the point. It recites the relevant facts, attaches 35 CBA pages and Burbank’s Order. Federal court review of arbitration orders is extremely narrow. The Supreme Court has stated that the reviewing court does not determine what it would have done or whether the arbitrator “correctly” interpreted the CBA. The decision can be wrong on the law and facts but if the arbitrator was “even arguably construing or applying the contract and acting within the scope of his authority, then the arbitrator will be upheld” (MLBPA v. Garvey, 532 U.S. 504, 509 (2001)). Burbank’s Order drew more than just its essence from the CBA. The case will likely take too long but ultimately the 49ers will prevail and recoup the unpaid $341,630.18. Smith would be far wealthier today had he hired a driver.
