By Jeff Birren, Senior Writer
Fun in The Fifth (Circuit)
When Sports Litigation Alert last looked at the on-going battle involving Ezekiel Elliott, the National Football League Players’ Association (“NFLPA”) and the NFL, the case had been briefed to the Fifth Circuit and was awaiting oral argument (“Breaking News: Analyzing the NFL and NFLPA’s Arguments to Fifth Circuit in Elliott Case” SLA, September 29, 2017). Oral argument was held on October 2, 2017 in New Orleans.
The Fifth Circuit issued its opinion on October 12, 2017. The court “determined” that the decision “should not be published” (National Football League Players Association, agent of on its own and behalf of Ezekiel Elliott v. National Football League; National Football League Management Council, No. 17-40936, October 12, 2017 (Elliott)). Although called a “Per Curiam” opinion, it was a 2-1 ruling. The majority opinion is less than ten pages; the dissent is nearly 12.
The majority agreed with the NFL that the District Court lacked jurisdiction because the NFLPA filed the case prior to the arbitrator issuing the ruling. “We VACATE the district’s preliminary injunction and REMAND to the district court with instructions to dismiss the case” (Id. at 2) (capital letters in the original). This came after a brief recitation of the procedural background of the case, and did not look at what the NFLPA would call the merits.
The court believed the question was a matter of law. That question was, to the court, whether, under the Labor Management Relations Act (LMRA), 29 U.S.C. § 185, did the district court have subject matter jurisdiction. Moreover, “questions of subject matter jurisdiction cannot be forfeited or waived and are reviewed de novo” (Id. at 3).
A claim under the LMRA has “the following three elements: ‘(1) a claim of a violation of (2) a contract (3) between an employer and a labor organization’” (Id.). The NFLPA argued that all three elements were present while the NFL asserted that jurisdiction is only proper if Elliott had exhausted his contractual remedies and that the lack of a final arbitral decision at the time of the case was filed was a fatal jurisdictional defect. The court noted that long-standing “federal labor policy requires that individual employees wishing to assert contractual grievances must attempt to use of the contract grievance procedures agreed upon by the employer and union as the means of redress” (Id. at 4). Furthermore, there are only limited circumstances when the failure to fully exhaust such procedures does not place the claim beyond judicial review (Id.).
The opinion stated that their “circuit holds that federal courts lack subject matter jurisdiction ‘to decide cases alleging violations of a collective bargaining agreement… by an employee against his employer unless the employee has exhausted contractual procedures for redress’” (Id. at 4/5, citing Meredith v. La. Fed’n of Teachers, 209 F. 3d 398, 402 (5th Cir. 2000)). The NFLPA had asserted that “Meredith is no longer good law” following the Supreme Court opinion in Arbaugh v. Y&H Corp. (546 U.S. 500, 510-11) (2006)), a Title VII case. In a subsequent decision, the Supreme Court clarified its position. A “rule should not be referred to as jurisdictional unless it governs a court’s adjucticatory capacity, that is, its subject-matter or personal jurisdiction,” and “unless Congress clearly indicated that the rule was ‘jurisdictional’” though “there were no magic words that Congress needed to invoke” (Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 435-46 (2011)). Furthermore, Henderson also stated that there was a “long lime of this Court’s decision left undisturbed” by Congress that treated such requirements as jurisdictional and that the Court would “presume that Congress intended to follow that course” (Id. at 436).
The Elliott court stated next that the Fifth Circuit “has not overruled its decision in Meredith, (Elliott at 6). It then added that that “Congress has left undisturbed the Supreme Court precedent holding the exhaustion of remedies is a jurisdictional prerequisite to bring an action alleging a breach of collective bargaining agreement” (Id.). On that basis, “the court declines to hold that Meredith is no longer good law in light of Arbaugh” (Id.).
The majority held that the “NFLPA’s lawsuit on Elliott’s behalf was premature” (Id.). This was so because “the procedures provided for in the collective bargaining agreement between the NFL and the NFLPA were not exhausted. The parties contracted to have an arbitrator make a final decision. That decision had not yet been issued. … As there was no final decision, Elliott had not yet exhausted the contracted-for remedies” (Id. at 6/7).
The majority then looked at “whether Elliott’s failure to exhaust his remedies was excused” (Id. at 7). The court stated that the NFLPA only argued one of the three exceptions, that “the employer’s conduct amounts to a repudiation of the remedial procedures specified in the contract” (Id. at 7). Repudiation is not triggered by the employer’s “refusal to accept the employee’s position with respect to the grievance” (Id. at 8). In Meredith “the employer refused to consider the grievance under the collective bargaining agreement” (Id. at 9). Here, the NFL did not “completely refuse to engage in the process” and thus “the court finds the repudiation exception does not apply and Elliott was required to exhaust his contractual remedies before filing his lawsuit” (Id. at 9).
Jurisdiction “depends on the facts as they exist when the complaint was filed” (citation omitted.) The district court, therefore, lacked subject matter jurisdiction when it issued the preliminary injunction” (Id.). “For the foregoing reasons, we VACATE the district court’s preliminary injunction and REMAND to the district court with instructions to dismiss the case” (Id. at 10). And that was it.
Judge Graves dissented. The dissent began with a two-page discussion of what it believed to be the merits of Elliott’s claims. It stated, “it is undisputed that failure to comply with the terms or procedures of the CBA is a breach” (Id. at 17). It then analyzed the law in a manner utterly opposite of the majority opinion.
The dissent found such a breach based on the merits of Elliott’s claims that the process was utterly flawed because the NFLPA and Elliott “were arguably denied the right to ‘present, by testimony or otherwise, any evidence relevant to the hearing’” (Id. at 18). These various breaches led Judge Graves to “conclude that the district court properly exercised subject matter jurisdiction” (Id. at 22). Maintenance of the status quo is an important consideration in granting a stay. “The status quo is Elliott continuing to play pending resolution of the claim filed below” (Id. at 22).
The NFLPA issued a very short “Statement on Elliott Decision” that day. “The NFLPA is reviewing the decision and considering all options. The appellate court decision focuses on the jurisdictional issues. The failure of due process by the NFL articulated in the District Court’s decision were not addressed” (NFLPA STATEMENT ON ELLIOTT DECISION, 10-12-17).
Let The Games Begin.
In normal Fifth Circuit cases, the losing party has 14 days to file a Petition For Rehearing or Hearing en banc in order to stave off the entry of judgment. If that does not happen, then the Circuit would issue a mandate to the district court to enter judgment. This is not a normal case. The Fifth Circuit panel issued its decision on Thursday, October 12, 2017 and entered its judgment that day. One immediate consequence was the NFL announced, “Elliott’s suspension will begin effective immediately” (NFL.com, Austin Knoblauch, 10-12-17).
The next day, Friday, October 13, 2017, the Fifth Circuit sent the mandate to the district court. The NFLPA later filed a motion in the Fifth Circuit to “Recall Mandate.” That motion insisted that the action by the Circuit was not consistent with the court’s routine practice.
Later on Friday the 13th the district court weighed in. It stated that the Fifth Circuit had “vacated the preliminary injunction and remanded the case with instructions to dismiss the case. On October 13, 2017, the mandate issued forthwith.” It noted that the NFLPA had filed a motion to recall the mandate and “indicated that it intends to file a petition for rehearing and would suffer prejudice if the mandate is not recalled.” At this point the district court simply refused to follow the order from the Fifth Circuit. “The Court defers dismissing the case pursuant to the mandate until the Fifth Circuit decides the NFLPA’s motion for recall, unless otherwise instructed” (NFLPA on its own behalf and on behalf of Ezekiel Elliott v. NFL, NFL Management Council, Civil Action No. 4:17-CV-00615, Judge Mazzant, United States District Court for the Eastern District of Texas, (“Elliott—District Court”), Order (10-13-17)).
The following day, Saturday, October 14, 2017 the NFLPA electronically served a “Notice Regarding Motion To Recall The Circuit Court’s Mandate” on the district court. The NFL filed its “Response To Motion To Recall Mandate” on Monday. The NFL asserted that the circuit court’s “course of action was plainly appropriate under this Court’s Internal Operating Procedures”, which expressly states (in language that the NFLPA’s motion ignores) that while the mandate typically does not issue immediately, “as an exception, and by Court direction, the Clerk will immediately issue the mandate when the court dismisses a case… for lack of jurisdiction, or in such other instances as the Court may direct” (NFL Response at 1).
The NFL also pointed out that the NFLPA “retains the option of seeking interim relief in the Southern District of New York” (Id. at 3) (See Section C, below.)
On October 17, 2017 the Fifth Circuit issued an order that denied the motion to recall the mandate. It also noted that the mandate order had no “effect on the appellee’s ability to seek panel or en banc rehearing” under the federal appellate rules. The order also stated that the original dissenter, Judge Graves, “WOULD grant the motion.”
Later that same day, and undoubtedly with great regret, Judge Mazzant dismissed the case in the district court. It was done pursuant “to the instructions from the Fifth Circuit Court of Appeals” and that the case “is herby DISMISSED WITHOUT PREJUDICE for lack of subject matter jurisdiction” (Elliott District Court, (10-17-17)).
With that, the press and parties turned its attention to New York. They did not have long to wait for the next shoe to drop.
New York, New York, What A Wonderful Town, The Bronx Is Up and the District Court Is Down.
In order to make sense out the dramatic change in scenery from Texas to Manhattan, it helps to review the chronology of the early part of the case. The underlying arbitration took place between August 29 and 31, 2017. At the end of the hearing, Thursday, August 31, 2017, the arbitrator announced that he would soon issue the award. The NFLPA filed its lawsuit that later that day in the United States District Court for the Eastern District of Texas, seeking vacatur of a decision that that had not been issued. The next day, Friday, September 1, 2017 the NFLPA filed to enjoin the NFL from enforcing a yet-to-be-released decision.
Judge Mazzant held a hearing on September 5, 2017 on the NFLPA’s motion to enjoin the unreleased arbitration decision. During the hearing, the arbitrator issued his opinion, and three days later Judge Mazzant issued a joint TRO and preliminary injunction, preventing the NFL from enforcing that arbitration decision.
As if Tuesday, September 5, 2017 was not busy enough, that day the NFL filed a complaint in the Southern District of New York, seeking to confirm the arbitration decision, (NFLMC v. NFLPA, Case No. 1:17-cv-06761-KPF, U.S. District Court, Southern District of New York) (“NFLMC v. NFPLA”). The case was assigned to Judge Katherine Polk Failla. The NFLPA sent a letter to the Court on September 22, 2017 stating its intention to dismiss, stay or transfer the case to its chosen court, that of Judge Mazzant.
Things did not heat up in the New York court until after the Fifth Circuit ruled. The NFLPA then filed its Answer and Counterclaim on October 16, 2017. It addressed the underlying merits of the dispute and sought an order to vacate the arbitration decision. As part of that endeavor, the NFLPA filed a declaration that attached over 110 exhibits related to the dispute.
Also that day, District Court Judge Paul Crotty held a hearing on the NFLPA’s motion for a TRO. He did so in the absence of Judge Failla.
Judge Crotty issued a TRO the next day, October 17, 2017. “The Court finds that Defendant is entitled to a TRO” (“NFLMC v. NFLPA” TRO at 2). “Improper suspensions can undoubtedly result in irreparable harm” (Id.). Judge Crotty believed that “a balance of hardships tips ‘decidedly toward” Defendant” (Id.). He also noted that “Defendant has established that there are ‘sufficiently serious questions going to the merits” that warrant litigation (Id. at 3). He rejected the NFL’s other arguments and enjoined “the NFL from enforcing the six-game suspension of Mr. Ezekiel Elliott imposed by NFL Commissioner Roger Goodell. This temporary restraining order is effective until the earlier of: (1) October 30, 2017 or (2) the disposition of the motion for a preliminary injunction by Honorable Katherine P. Failla” (Id. at 4).
Later in the day Judge Crotty issued an order to show cause, directing the NFL to appear before Judge Failla to show cause “why an order should not be issued pursuant to Rule 65 of the Federal Rules of Civil Procedure enjoining the NFL from enforcing Ezekiel Elliott’s six-game suspension” until either that court of the court in Texas decides the matter” (NFLMC v. NFLPA, Document 30).
The next day, October 18, 2017 the NFLPA and Elliott filed their papers in support of the Order to Show Cause. The papers include a Declaration of Jason Cohen, the Cowboys General Counsel, in support of the motion. Those papers stressed the NFLPA’s sense of injustice at the underlying arbitration. Although the NFLPA had not been able to gain relief on the merits in the Fifth Circuit, footnote 8 of the opinion includes the following: “While these arguments and concerns about the arbitration process may have merits, they must be considered by a court with proper jurisdiction” (Elliot at 9).
The NFL in turn, filed its opposition the following day, October 19, 2017. It could not argue lack of jurisdiction as it had in Texas and the Fifth Circuit since it was their court of choice. Rather, the NFL argued the great deference due to a labor case arbitration decision, as it had done successfully in the cases involving Adrian Peterson in the Eighth Circuit and Tom Brady in the Second Circuit. Also that day the NFLPA deposited $100,000 in the court’s account as required by the TRO Order
The NFL sent a letter to Judge Failla on October 20, 2017. It sought, among other things, an expedited briefing schedule and early hearing, or failing that, argument “on October 30th, when the Court has indicated it is available” (NFLMC v. NFLPA, Document 41). Naturally the NFLPA opposed the motion to expedite the hearing and Judge Failla rejected the NFL’s request to expedite the matter and that was entered on Monday, October 23, 2017 so the hearing will be on October 30, 2017 as previously scheduled.
It will be an interesting day for all concerned.
Birren is the former general counsel for the Oakland Raiders and a senior writer for Hackney Publications.