On Friday morning, the U.S. Court of Appeals for the Eighth Circuit issued a surprising ruling in a two-year-old collusion claim filed by the NFLPA. The management-friendly appellate court unexpectedly reversed a decision from player-friendly Judge David Doty, allowing the case to proceed.
The 18-page opinion explains that, while Judge Doty properly concluded that the 2011 settlement of all claims did not require the formal dotting of i’s and crossing of t’s that occurs when a class action is resolved, Judge Doty should have given the NFLPA an opportunity to prove that the 2011 settlement was tainted by “fraud . . ., misrepresentation, or misconduct.”
The NFLPA will now get that opportunity.
”Our union will always pursue and protect the rights of its players,” the NFLPA said in a statement. “We are pleased that the Eighth Circuit ruled that players have the opportunity to proceed with their claims. Through discovery and a hearing, we can understand how collusion took place. We have notified the NFL of its obligations to preserve all relevant documents and communications.”
Even if the NFLPA proves that collusion occurred in the uncapped year of 2010 (and the cap penalties imposed in 2012 on Dallas and Washington suggest that it did), the settlement will not be set aside lightly.
“[T]he [NFLPA] bears a heavy burden in attempting to convince the district court that the Dismissal was fraudulently procured,” the appeals court explained. “We hold only that the [NFLPA] should be given the opportunity to meet this burden,” which is satisfied “in only the most exceptional of cases.”
In this case, the NFL will argue that the NFLPA should have promptly made the collusion claim when the NFL requested that cap penalties be imposed on Dallas and Washington, since at a minimum the issue of cap penalties placed the NFLPA on what the law calls “inquiry notice” regarding whether the league was trying to punish those teams for refusing to engage in past collusion. That’s essentially what happened, but because the union desperately needed the salary cap to go up not down in 2012, the NFLPA was poised to agree to anything the NFL wanted in exchange for a willingness to borrow against future cap years to get the cap to move higher in the first league year after the new CBA was finalized.
The league’s challenge will be to get the case kicked out of court again by Judge Doty before being forced to share information and documents about the collusion that apparently (or actually) occurred in 2010. The best — and most likely — argument will be that, even if the allegation is true, that’s not enough to justify a finding of fraud, misrepresentation, or other misconduct in the final settlement of the 1992 antitrust lawsuit filed by the late Reggie White and others.