This article originally appeared in the Harvard Journal of Sports & Entertainment Law, Vol. 8 (2017).
The ruling that National Football League (NFL) Commissioner Roger Goodell issued on July 28, 2015, against New England Patriots quarterback Tom Brady, and the underlying decisions on May 11, 2015 to suspend Brady for four games and to dock the Patriots a million dollars as well as two draft picks, are fascinating for many reasons. A major reason for lawyers to be fascinated is that the sanctions, issued after a hearing held because Brady challenged his suspension, ended up being affirmed by the Commissioner in a highly publicized arbitration award. It is rare for the process of arbitration to be thrust so clearly into the national spotlight. Arbitration usually is not public and its awards usually do not become news items. But in law and in politics, as in cultural life, events that do overflow into public consciousness can produce quick changes beyond the reach of ordinary events. The Brady award publicized arbitration in a way beyond the power of the countless arbitrations that go on around the country day after day.1 It created a national learning experience about arbitration. Arbitrators should try to learn from it, just as should other Americans.
The award sheds light on the old struggle between arbitrators who insist that silent “standard” awards should be the default format for awards and those who urge reasoned awards that explain the decision reached. Outside the United States, this is no contest: reasoned awards are expected. Reasoned awards are the default format in international arbitration. 2 Two of the major domestic providers, CPR and JAMS, also treat reasoned awards as the ordinary model for arbitration. 3 A new entrant, Palo Alto’s FedArb, whose roster of arbitrators includes over fifty former federal judges as well as a select group of experienced practitioners, bases its rules upon the Federal Rules and requires an opinion with “findings, reasons, and conclusions” in addition to an award (although FedArb of course lets the parties opt out of this requirement, just as it lets them customize other parts of its rules). 4 But the AAA and FINRA treat silent awards, not reasoned awards, as their “standard,”5 and the idea that silent awards are preferred crops up often in judicial decisions about arbitration in the United States, too.6
The Brady award is a very reasoned award. It has all the strengths and, to devotees of silent awards, weaknesses, of any explained decision. Even better for analytic and educational purposes, the two courts that reviewed the award reached opposite conclusions about its validity. The trial court penalized and vacated the award based largely on its reaction to Commissioner Goodell’s reasoning, while the court of appeals, reversing, used some of the same reasoning to demonstrate the award’s adequacy. The 2-1 appellate majority deferred to arbitrator Goodell’s judgment. One has to think that the majority found the award easier to protect precisely because it is very reasoned.
Brady and the National Football League Players Association (NFLPA) asked for rehearing (by the panel or en banc), but that request was denied and Brady voluntarily dropped further proceedings. 7 Whatever low odds he had of overturning the award did not stem from the fact that it was reasoned. The award would have been much more vulnerable unexplained. To the extent that it turned out to be vulnerable at the first level of appeal for alleged lack of notice and inconsistency with past sanctions, the same issues would have surfaced had the award been totally silent. Moreover, the factthat Goodell explained his reasoning helped the Second Circuit panel majority determine that vacatur was erroneous and that the award needed to be reinstated. Reasoning, then, strengthened the arbitration process. The detailed award communicated that, right or wrong, Goodell took his job seriously and did not act thoughtlessly.
California Fellow John Burritt McArthur is a lawyer with 34 years of experience trying business cases for plaintiffs and for defendants, including many oil and gas cases, and 23 years of experience serving as an arbitrator. He received his first arbitrator appointment in 1994, devotes a substantial and increasing part of his practice to serving as an arbitrator, and is on, among other lists, the energy, oil and gas, and complex commercial lists of the AAA, CPR, and Fed-Arb of Palo Alto. He is listed by the LCIA and the Hong Kong, Kuala Lumpur, and Dubai International Arbitration Centers. Mr. McArthur is a Fellow of the Chartered Institute of Arbitrators, a Fellow of the College of Commercial Arbitrators, a Sponsoring Member of the Institute for Transnational Arbitration, and is listed in The Roster of International Arbitrators. He has offices in Berkeley (California) and Houston and is licensed in Texas, California, and Alaska. He holds a number of degrees: a Ph.D. from the University of California, Berkeley, two master’s degrees, a J.D. from the University of Texas School of Law, and a B.A. from Brown University. He has published dozens of articles on legal and economic issues and on case management and procedures, including in arbitration. Insatiable curiosity led to this Article. He has benefitted by comments on drafts of this article by Jean Frizzell, Bob Josefsberg, Maretta Toedt, and Mark Wawro.