Case 08-06330 now on Pacer
Update: See our Consolidated Docket.
The main access page appears to be at CM ECF
The case is filed as "Floyd Landis v. United States Anti-Doping Agency", a "Petition to Vacate Arbitration Award".
Landis' attorneys of record are Kay Gunderson Reeves, of Dallas TX, who has been involved in previous rounds, and Roger G Worthington, who has made his major mark in Mesothelioma (absestos) litigation.
The motion is 108 pages for $2.40, and we've placed it in the archive.
The points and authorities are nine pages for $0.72.
Declaration by Seth Davidson, 3 pages for $0.24.
Notice of lodging and exhibits 1..59 look like around 2000 pages, and that's beyond our scope from the hospital bed.
Now we can begin a real discussion.
77 comments:
TBV,
That should give you some light reading for the Swivette. Hahaha sorry I couldn't help it.
Can we donate for the other 2,000 pages of exhibits or were you not going to go through the hassle of snagging it?
Big ups to whoever has to turn that stuff into a *.pdf...
The bulk of the pages (1500+) are probably transcript already in the archives, and I'm not really motivated at present to dig through the rest and sort out what is already elsewhere and what is new. If anybody else wants to do so, and send a summary, and copies of the new stuff, history would be obliged.
TBV
Imagine. Floyd in a US Court. Under US Law. In front of a US jury. With US rules of evidence.
Damn. I'm ready.
8-0, do you see the basis for the Landis team's claim that the court has jurisdiction to hear this case? I looked at the pleading for about 5 minutes and didn't see much on point.
TBV and all I feel I have let everyone down due to all of the issues I have going on here at home. I wish that I could have gone through the Landis filing myself. Sorry to have been so useless at such an important time. :-(
str
Subject matter jurisdiction is plead as the NY convention and the FAA. I didn't really think it was an issue. I would have liked to have seen a little closer nexus to the contract issue - Floyd contracted for an arbitration via his license with USAC - but it is there. Personal jurisdiction is diversity and federal question. Venue is on residency of the petitioner.
I like the numerous references to the public policy involved in arbitration. That should appeal to a judge interested in knowing just what brand of "justice" is afforded to athletes that are role models. Competition is supposed to be global, yet here we have a closed system set up to protect the powerful.
Just so it is easy to find: the respondent is indeed USADA, although Floyd does point out he has been denied a USAC license until he pays the $100k. This gets him past a ripeness issue, and probably is relevant to the jurisdictional issue. He complains he's been denied a right secured under a contract made in the US.
I'll start calling my attorney friends and neighbors after the debate and start figuring how who this Greeves attorney is and what they think of her. Gaeske could very well be a cyclist. The area where their office is located is right smack dab next to one of the coffee hot spots. In fact, it's called "Legal Grounds".
Sorry - TYPO. Reeves. Not Greeves.
The jurisdiction of the US court comes from the Federal Arbitration Act and "diversity jurisdiction."
There are some who seem to think that that there are other jurisdictional issues preventing Floyd from having the award vacated by a US court. Many reasons are cited in support of such a proposition, for example, that Floyd "agreed" to not appeal the award. Such arguments are probably wrong.
The single most succinct statement addressing this comes from a 9th Circuit case that said:
"Private parties may design an arbitration process as they wish, but once an award is final for the purposes of the arbitration process, Congress has determined how the federal courts are to treat that award."
And Congress allows an arbitration award to be vacated, although the grounds for vacating it are very limited.
See 9 USC 10
http://www4.law.cornell.edu/uscode/html/uscode09/usc_sup_01_9_10_1.html
What this case will NOT be is a rehash of the evidence as was done before the CAS.
Here's a good discussion of vacating arbitration awards
http://www.abanet.org/genpractice/magazine/2006/sep/disputeres.html
The reason "public policy" is mentioned regularly is not merely "to appeal to the judge," it is because a violation of public policy is basis for overturning an arbitration award under federal common law (not found in the statutory grounds)
strbuk - life happens.
I'm sure you have endless bank with everyone on here for all your previous hard work.
*SNEEZE* cat allergy...
Can someone contact WADA Watch and let him know that the US District Court in CA will likely accept his amicus brief he submitted to (and was rejected by) the CAS?
Is Kay Gunderson Reeves related to Lance Armstrong?
1. I think the court will dismiss the case and hold that any appeal of the CAS decision must be made to the Swiss courts pursuant to the CAS rules.
2. The applicable law is the New York Convention for the enforcement of foreign arbitral awards. This treaty is codified as US law, and incorporated into the Federal Arbitration Act, under which Landis is claiming jurisdiction.
In the Justin Gatlin case the court held:
"Pursuant to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, (“New York Convention”), claims that have been properly submitted to arbitration
and ruled upon by entities such as CAS are barred from relitigation in this forum. See 9
U.S.C. §§ 201-08; Industrial Risk Insurers v. M.A.N. Gutehoffnungshutte GmbH, 141 F.3d
1434, 1440-44 (11th Cir. 1998)."
So clearly Landis cannot relitigate the merits of the doping decision in federal district court.
4. It's possible Landis could relitigate the costs issue, but I doubt it.
Article V of the convention says you can challenge a decision "not falling within the terms of the submission to arbitration".
Landis is claiming that the costs issue was not listed as an issue submitted for arbitration. I would argue that awarding costs is in general an inherent issue in all court and arbitration proceedings. The statutes, including CAS, always empower the judge or arbitrator the power to award costs. Both Landis and USADA argued that costs should be awarded against the other party.
CAS Rule R65.3 states: "In the award, the Panel shall decide which party shall bear them or in what proportion the parties shall share them, taking into account the outcome of the proceedings, as well as the conduct and financial resources of the parties."
I haven't looked up any cases, but based on the CAS Rule I think Landis's cost argument is a loser also.
5. As a final note, Landis is making much of a generalized conflict of interest among the arbitrators, without showing any specific bias in his case. This is arguably listed as a ground for review under the Federal Arbitration Act, but is not listed under the New York Convention. So I don't think it can be litigated here, even if it were colorable on the facts.
I'm determined not to do any more legal analysis of this case. But the applicable law on jurisdiction is going to be difficult for Landis to overcome. Dr has pointed out how difficult it is to get meaningful federal court review of an arbitration decision. But Landis' situation is worse than this, because he's trying to challenge the CAS proceedings, which are governed under Swiss law. This is the same problem that Gatlin ran into a few months ago -- federal court review of a CAS decision appears to be governed not by the federal arbitration act, but first by the Swiss Act on Private International Law, and then by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention.
These matters are completely unrelated to my areas of expertise. But those interested might want to look at the grounds for avoiding a foreign arbitration decision set forth in Article V of the NY Convention.
oops, I did not see M's post before making my post above. M, there IS language in the NY convention allowing a party to avoid enforcement of an arbitration decision where the composition of the arbitration panel was not in accordance with the agreement of the parties or applicable local law.
I WAS expecting the Landis brief to expressly address jurisdictional issues arising under the NY Convention, but I did not see anything like that in my brief review.
M, I can take issue with a few of your conclusions around the margins, but I agree that Landis is simply not going to be able to get a federal court to review the substance of his doping AAF. Not, at least, based on my quick review of the arguments he's raised so far.
I think it's doubtful that there are any relations between the two. I'd never heard of her before yesterday.
Re: Argument that alleged conflict of interest of arbitrators might violate Article V, subsection (d), of New York Convention because the composition of the panel or procedure was not in accordance with Swiss Law.
I found this Swiss Court decision:
"Switzerland: Disclosure. On Aug. 4, 2006, the Swiss Federal Tribunal (Docket No. 4P.105/2006) (available on the Internet at www.bger.ch) clarified that an arbitrator who, along with counsel for one of the parties, simultaneously serves as an arbitrator in an unrelated arbitration is not considered to be biased unless further concrete circumstances exist indicating that the arbitrator is not independent or impartial.
The case before the Swiss Federal Tribunal concerned a challenge to an arbitral award issued under the Procedural Rules of the Court of Arbitration for Sport (CAS), an institution catering specifically to sportsrelated disputes (see www.tas-cas.org for more details). In CAS arbitrations, the parties may choose arbitrators from a closed list, maintained by the International Council of Arbitration for Sport, of approximately 300 individuals with specialized arbitration and sports law knowledge. It follows from this system that often the same individuals will participate in CAS proceedings as arbitrator or as counsel by virtue of their presence on the CAS list and specific sports law knowledge.
The Swiss Federal Tribunal held that this fact alone was not sufficient to create the objective appearance of bias. An arbitrator-just like a judge-can be expected to remain neutral even if he or she has friendly contact with or works with counsel for one of the parties as a co-arbitrator in another arbitration. Therefore, these circumstances did not need to be disclosed to the parties to the arbitration."
So again, I don't think Landis can prevail on his conflict of interest claim under the New York Convention.
One other idea.
The New York Convention provides for enforcement of foreign arbitration awards, and Article V lists certain grounds for refusing to enforce.
USADA is not yet trying to enforce. Query whether Landis's lawsuit is premature and will be dismissed as not "ripe" for adjudication.
M, I'm no expert here, but it seems to me that you are making a series of good points.
At the moment, I'm mostly interested in whether Landis can get his case heard at all, or whether it will be tossed (like the Gatlin case was tossed) for lack of jurisdiction. My guess is consistent with your analysis: Landis will have to allege specific evidence of bias on the part of the arbitrators, and not just the systemic bias built into the CAS procedures, in order to get his case heard in federal court.
USADA has indeed sought to enforce. See page 6, line 18.
This case is distinguishable from Gatlin. Gatlin didn't like the *result* of his CAS arbitration. Landis' claim may be characterized by "I didn't get an arbitration at all." To take an extreme case, suppose we had actual evidence a CAS arbitrator took a bribe to find a specific way. Suppose the CAS arbitrator admitted that under oath. In such a case, would a US federal court have subject matter juisdiction to vacate such an award on the grounds there was no arbitration conducted, within the meaning of the FAA, or within the meaning of the underlying contract? Probably.
Regardless of the outcome, Landis has come to a court in the US, and specifically and publicly alleged specific facts, not disclosed prior to the CAS hearing, that demonstrate the nature of "that farcical system." He provides evidentiary proof in this filing. If the US Court dismisses, either on motion or sua sponte, it will be clear that the policy in the US is that foreign entities can impose their legal system on US citizens when those US citizens engage in commerce with them. Regardless of whether due process or other constitutional protections should extend beyond the borders of the US, I doubt that any court will be inclined to turn a blind eye to US citizens being subjected to fundamental unfairness when the question is put directly before them.
Quick summary to address what I believe are some erroneous assumptions that M made here.
(hoping to help focus the discussion a bit)
1. Floyd properly has jurisdiction in the Federal Court. That jurisdiction is established by federal law. CAS rules do not change that. The CAS is neither a legislative nor judicial body and its authority is limited to that provided by the consent of the parties. That authority cannot extend beyond conducting and completing the arbitration itself. (see the judicial quote in my earlier comment)
2. Floyd's case is under the FAA but probably not under the New York convention. See 9 USC 202. USADA and Floyd are both us "citizens." This was not true in the Gatlin case which involved the IAAF (headquarterd in Monaco)
2. Floyd need not establish "actual" bias to have the award vacated. In fact some of the controlling precedent suggests that Floyd's motion has a fairly sound basis. For those who are interested: http://caselaw.findlaw.com/data2/circs/9th/0555224P.pdf
3. True, Landis cannot Landis "relitigate" his case in the district court. But if the award is vacated (under the FAA) he could conceivable have it heard again. By the CAS? Probably. But I don't know.
1) "Landis' claim may be characterized by "I didn't get an arbitration at all."
I think his claims are more limited.
It seems to me that he is making 2 claims wrt to the unfairness of the arbitrator system: 1) many of the arbitrators have dealings with one another and are beholden to the sporting establishment, 2) these dealings should have been disclosed so that Landis wouldn't have picked Paulson.
Unfortunately, under section 10 of the Federal Arbitration Act, which I don't think even applies, he must show "evident partiality or corruption", that is actual bias. His allegations don't meet this standard so I don't think he even states a claim for relief under that statute, but I haven't read any of the cases. The Federal Arbitration Act only appears to apply to arbitration awards rendered in the US. See sections 9 and 10 of the Act.
Under article V of the New York Convention, which I think does apply, he must show that the the composition of the arbitration panel or arbitration procedure does not comply with Swiss Law. As indicated in the summary of the Swiss Court decision, Swiss law also seems to require a showing of actual bias which he hasn't alleged.
2. WRT to the Gatlin Decision, I agree it may be distinguishable in that Gatlin was not attacking the the CAS procedure. However, Landis here is also asking for vacating the CAS decision on the merits. To that extent Gatlin is on point, and indicates he won't be able to do that.
3. WRT to some claim of a) imposing foreign law or b) fundamental unfairness.
Contracts choose foreign law all the time for the settlement of disputes and the US courts respect this. There has been no showing of "fundamental unfairness" under any applicable legal standard that I am aware of.
DR,
I stand corrected on the need to show actual bias. As I said I haven't read any of the cases.
However, Section 10 of the Federal Arbitration Act states that an action may be brought in the district where the arbitration decision was rendered. This seems to contemplate only domestic arbitrations.
Moreover, I assume that Landis agreed to be bound by the CAS rules and the CAS rules provide that CAS decisions can only be appealed to the Swiss Courts under certain limited circumstances and under Swiss law. Wouldn't such contractual limits and choice of law be respected by the federal courts.
9 USC Section 202
"An agreement or award arising out of such a relationship which is entirely between citizens of the United States shall be deemed not to fall under the Convention unless that relationship involves property located abroad, envisages performance or enforcement abroad, or has some other reasonable relation with one or more foreign states."
"envisages performance or enforcement abroad...."
Seems Landis might fit under this and thus the Convention applies.
Quick summary to address what I believe are some erroneous assumptions that M made here.
(hoping to help focus the discussion a bit)
1. Floyd properly has jurisdiction in the Federal Court. That jurisdiction is established by federal law. CAS rules do not change that. The CAS is neither a legislative nor judicial body and its authority is limited to that provided by the consent of the parties. That authority cannot extend beyond conducting and completing the arbitration itself. (see the judicial quote in my earlier comment)
2. Floyd's case is under the FAA but probably not under the New York convention. See 9 USC 202. USADA and Floyd are both us "citizens." This was not true in the Gatlin case which involved the IAAF (headquarterd in Monaco)
2. Floyd need not establish "actual" bias to have the award vacated. In fact some of the controlling precedent suggests that Floyd's motion has a fairly sound basis. For those who are interested: http://caselaw.findlaw.com/data2/circs/9th/0555224P.pdf
3. True, Landis cannot Landis "relitigate" his case in the district court. But if the award is vacated (under the FAA) he could conceivable have it heard again. By the CAS? Probably. But I don't know.
-----------------------
M corectly notes that:
Section 10 of the FAA states that an action may be "brought in the district where the arbitration decision was rendered."
But as is often the case with statutory language it has been given a broader interpretation.
120 S.Ct. 1331 basically says “an award is made” anywhere where general federal venue provisions apply.
M: Moreover, I assume that Landis agreed to be bound by the CAS rules and the CAS rules provide that CAS decisions can only be appealed to the Swiss Courts under certain limited circumstances and under Swiss law. Wouldn't such contractual limits and choice of law be respected by the federal courts.
No, I don't think so.
"Private parties may design an arbitration process as they wish, but once an award is final for the purposes of the arbitration process, Congress has determined how the federal courts are to treat that award." 341 F.3d 987
M&C Corp. v. Erwin Behr GmbH & Co., 87 F.3d 844, 847-49 (6th Cir. 1996)
Under the New York Convention
"We hold … that such a motion to vacate may be heard only in the courts of the country where the arbitration occurred or in the courts of any country whose procedural law was specifically invoked in the contract calling for arbitration of contractual disputes."
This opinion could indicate that a motion to vacate the CAS arbitration award under the New York Convention must be made in the Swiss Courts. On the other hand the opinion indicates that if USADA sought to enforce the award in a US court then Landis may raise the defenses enumerated in Article V to resist enforcement.
Moreover, this decision states that where relief granted under the Federal Arbitration Act is inconsistent with the New York Convention, the New York Convention controls. It seems pretty clear to me that the New York Convention applies to foreign arbitration decisions but I'm no expert as Larry is fond of saying.
This is a 6th Cir decision, and I don't know what the 9th Cir position is on this issue.
DR
The cases you quote and cite to don't seem to be on point.
120 S.Ct. 1331 did not involve a foreign arbitration award only domestic awards.
341 F.3d 987 involved an arbitration agreement which sought to expand the scope of review by a Federal Court under the Federal Arbitration Act. The court in a very split decision refused to have a private agreement specify the scope of review to used by a federal court. The language you quote should be limited to that question. This is different from the comity and choice of law considerations that a court might consider in refusing to apply US law over Swiss law.
Both these decisions are clearly distinguishable from the present one and the quoted language can't be seen as necessarily applying to the Landis situation.
M said:
120 S.Ct. 1331 did not involve a foreign arbitration award only domestic awards.
Yes, but I think you are jumping a little too quickly into assuming we are speaking of a "foreign" award. Under 9 USC 202 it's a stretch when the parties are US citizens. First, the mere terms of the underlying agreement itself cannot be the basis of a "foreign" nexus (30 F.3d 360) and I assume the "agreement" we are talking about is Floyd's U.S. racing license or application for that (an exhibit?), which would also envisage "performance" and enforcement in the US and involves no property elsewhere. Yes, Floyd's counsel acknowledged the possibility, but only out of "an abundance of caution."
341 F.3d 987 involved an arbitration agreement which sought to expand the scope of review by a Federal Court under the Federal Arbitration Act. The court in a very split decision refused to have a private agreement specify the scope of review to used by a federal court.
Bingo!
The issue is that, post-arbitration, the jurisdiction of the federal courts to vacate or confirm arbitration awards (in the US) is established by Congress and cannot be modified by agreement of the parties.
I agree that Swiss law may very well have applied to the making of the decision itself. The deference to the agreement regarding the rules of the arbitration itself do not extend to the confirmation or vacating of the award. The award exists (regardless of the underlying law or tribunal). Now, what does US law let the parties do with it in the US ?
Both these decisions are clearly distinguishable from the present one and the quoted language can't be seen as necessarily applying to the Landis situation.
I don't think I can agree with you, but USADA will undoubtedly try to make some of the arguments you have. While I do not think it applicable, I do need to look more carefully at what US courts can do with "foreign" awards
DR, the Cortez Byrd Chip case (120 S. Ct. 1331) ruled on the issue of what court has venue to review a case under the Federal Arbitration Act. I think the critical issue in Landis is not venue (which court is the right court to hear a case) but jurisdiction (whether the court has the power to hear the case). If the U.S. courts have jurisdiction to hear the Landis case, then venue is not the most critical issue (SOME court will have venue). In contrast, if the U.S. courts lack jurisdiction, then I don't think the issue of venue will enter into the picture.
DR, you seem to be questioning whether two U.S. parties can agree to binding arbitration before a Swiss panel to be governed under Swiss law. I can imagine cases where the U.S. courts might object to such an agreement -- for instance, where a contract is to be fully performed in the U.S. and where there is no fair or logical reason for non-U.S. law to be invoked. But in this case Landis received a pro cycling license granting him certain rights to race internationally. Moreover, he agreed to be bound by the WADA code, which is an international rule designed to be enforced in a somewhat uniform matter to cyclists regardless of their nationality. From this reasoning, I can't see any reason why USADA and Landis should be prevented as a matter of public policy from agreeing to arbitration under Swiss law, or why the NY Convention would not be applied by a U.S. court in an action seeking to enforce (or avoid) enforcement of a CAS arbitration.
I'll repeat the caveat that this is far from my area of expertise, but I haven't seen anything here or in the Landis filing to convince me that the U.S. courts have jurisdiction to hear this case.
DR,
You seem to be dancing around the question of whether the New York Convention applies to Landis. If it does, then I would argue that Landis can't maintain an action under Section 10(a)(2) of the Federal Arbitration Act claiming "evident partiality" in the CAS arbitration system which is the basis of his lawsuit. He can only seek remedies under the New York Convention, in particular Article V. Article V only allows him to attack the CAS arbitrator system if it violates Swiss law, or violates US public policy. I don't think he can succeed under either of these two grounds.
Article I of the Convention states that the Convention applies to "arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought." This would clearly apply to the CAS decision rendered in Switzerland. However, in adopting this treaty the US provided that it did not apply to a foreign award where both parties were citizens of the US, (presumably the Federal Arbitration Act would apply exclusively), unless the relationship between the two "envisages performance or enforcement abroad, or has some other reasonable relation with one or more foreign states." 9 USC Sec 202.
Racing in the Pro-Tour in Europe, complying with anti-doping testing in Europe, and submitting oneself to CAS a Swiss arbitral body all would seem to meet the requirement of the foreign nexus language.
So I think a good argument can be made that the Convention applies. And if it does, then the grounds for vacating the award listed in the Section 10 of the Federal Arbitration Act most probably don't apply.
In the Erwin Behr case, 87 F.3d 844, the 6th Circuit held, citing 9 USC Sec. 208, that the grounds for vacating an award stated in Article V of the Convention were exclusive, and a party couldn't assert additional grounds under Section 10 of the Federal Arbitration Act.
Moreover, the Court in Behr stated that under the Convention any motion to vacate an award (as opposed to asserting a defense to enforcement) must be brought only to a "competent authority of the country in which, or under the law of which, that award was made." In the Landis case that is to a Swiss Court.
If Behr is good law in the 9th Circuit then Landis can only assert claims under Article V of the Convention as a defense to an action brought by USADA, and he cannot bring an action under the the Convention or the Federal Arbitration Act.
Now that I've read more, I would concede that it appears that the Federal Arbitration Act may apply to arbitration decisions rendered abroad in certain limited circumstances, e.g. where the New York Convention doesn't apply, or where it's provisions don't conflict with those of the Convention.
M-
To keep this simple and sweet, Even under the express terms of the New York Convention an award can be vacated on the basis of "public policy." Under Supreme Court precedent public policy requires reference to existing laws or precedent (like 9 U.S.C 10) but includes "basic fairness," which requires impartiality of arbitrators.
I've lost track of a cite I'll see if I can find it, maybe you can.
In the meantime also see 126 F.3d 15
Larry-
I think you have missed my point and are confusing the issue of whether the arbitration itself was binding (it was and that is not being challenged) versus what can be done with the resulting arbitration award or whether it is valid under federal statutory or common law.
Again :
"Private parties may design an arbitration process as they wish, but once an award is final for the purposes of the arbitration process, Congress has determined how the federal courts are to treat that award." 341 F.3d 987
Jurisdiction of the US Courts is pretty clear, although it does partially depend on "diversity."
One of the things about this case that is interesting and/or frustrating is how many of the "factual" details are defined by legal precedent which may change/expand/restrict the apparent "plain meaning" of terms Maybe the best example is "where the award was made". In Floyd's case, under 9 USC 10, it was "made" in California.
DR, I've to you over at RYHO on the "public policy" defense built into the NY Convention. I read this defense much more narrowly than you do. I think that "public policy" in this context is more than just a general concern for fairness, and goes to the violation of some clear and fundamental principle of justice.
Agreed that evident and obvious bias on the part of the arbitration panel might rise to a "public policy" concern, but I don't think it violates the public policy of the United States to allow a lawyer who argues arbitration cases to serve on the arbitration panel. Of course I see the potential for bias in such an arrangement. However, I also think this is a relatively common practice. If this practice violates United States public policy, then that would pretty much wipe out private arbitration as we know it.
The AAA Code of Ethics for Arbitrators in Commercial Arbitration expressly acknowledges that "unlike full-time judges, arbitrators are usually engaged in other occupations before, during and after the time that they serve as arbitrators." While this Code of Ethics contains important rules requiring arbitrators to act fairly and to disclose matters likely to affect their impartiality, I can find nothing in this code that would prohibit an arbitrator from also representing clients in like arbitrations.
Also note that it is the clear public policy of the United States to encourage and facilitate arbitration of private disputes.
So as disturbing as it is to me that CAS arbitrators routinely rotate between serving on arbitration panels and representing ADAs before these panels, I don't think it violates the public policy of the United States to enforce CAS arbitration decisions.
As for the issue of U.S. federal court jurisdiction ... agreed that it's not possible under recent court decisions to modify this jurisdiction by contract. However, these cases do not speak to the ability of contracting parties to choose the law to govern their contracts, or the forum that is to have jurisdiction over the arbitration. You've cited the Straubel law review article on this point, and I agree that Straubel provides the best discussion of this point that I've seen to date. Straubel seems to believe that it's an open question whether U.S. courts have jurisdiction to review CAS arbitration decisions, so I'd say that this jurisdiction is "disputed" rather than "pretty clear". We can walk through Straubel's reasoning if you like.
M-
Generally courts that have dealt with the FAA and the NYC have not concluded that a choice must be made between the two. (And I may have misleadingly suggested this)
In other words there is overlap between the NYC and the FAA.
You have taken the holding from the Behr case you cited and stood it on its head.
That case involved an exclusively foreign award, hence the NYC was the exclusive law.
The FAA applies in Floyd's case. In light of that I'll refrain from any further digression about "Public Policy" and the NYC.
Larry-
I think the specific allegations raised in Floyd's motion are far deeper than just that some lawyers are arbitrators and vice versa. See 05-55224 (9th Cir)
There is no question that parties can agree to the law governing their dispute. That is vastly different from the law or appropriate jurisdiction which may apply once the arbitration is complete and someone is seeking to confirm or vacate the award.
DR
"You have taken the holding from the Behr case you cited and stood it on its head.
That case involved an exclusively foreign award, hence the NYC was the exclusive law.
The FAA applies in Floyd's case."
You have still not answered the issue I posed. Does the New York Convention apply here or doesn't it.
If it does, then based on Behr it is the exclusive remedy, and Landis cannot assert any claim under the Federal Arbitration Act.
You have cited no on point legal authority to refute Behr, merely your unsupported statement that in general courts do not hold that the New York Convention is an exclusive remedy. 126 F.3d 15 which you pointed to is clearly distinguishable and if you want to rely on that case then you should be prepared to discuss the facts and law in that case and explain why it is on point.
You seem to be making some argument that even though the CAS decision was rendered in Switzerland it is somehow a decision rendered in California for purposes of the New York Convention.
"Maybe the best example is "where the award was made". In Floyd's case, under 9 USC 10, it was "made" in California."
That is a ridiculous argument. The Cortez Byrd Chip decision you cited did not rewrite reality, so that an award that was in fact rendered in the US district of New York was somehow legally rendered in the US district of California, it merely held that the venue language was permissive, that even though the award was rendered in NY, the litigant was not required to file in NY but could file in California.
M -
In response to your assertion that I "have cited no on point legal authority to refute Behr,"
First, I am not refuting Behr per se. What I am refuting is the (erroneous) conclusion you are drawing from Behr. Even taking the language you quote from Behr, Floyds arbitration was heard in the US (we can quibble about which state if you like)
Perhaps the clearest statement comes from Lander Co. v. MMP Invs., 107 F.3d 476, 478 (7th Cir. 1997) where the Court said:
It could also be argued that the New York Convention was intended to be exclusive within its domain. We would then have to consider its applicability to this case because if it were applicable there would be no jurisdiction under the Federal Arbitration Act. Nothing in the Convention or its history, or in the implementing legislation or its history, suggests exclusivity, and it would be particularly perverse in a case such as this involving a dispute squarely within the scope of the Federal Arbitration Act between two U.S. firms. In fact, Article VII of the Convention provides that the Convention shall not "deprive any interested party of any right he may have to avail himself of an arbitral award in the manner and to the extent allowed by the law or the treaties of the country where such award is sought to be relied upon." 21 U.S.T. at 2520-21. We agree with the Second Circuit that there is "no reason to assume that Congress did not intend to provide overlapping coverage between the Convention and the Federal Arbitration Act." Bergesen v. Joseph Muller Corp., 710 F.2d 928, 934 (2d Cir. 1983).
But just to make sure we include a 6th Circuit case to show that this is not an issue of split authority, see Jacada, Ltd. v. International Marketing Strategies, Inc., 401 F.3d 701 (6th Cir. 2005)
In Floyd's case, the FAA applies by it terms. Whether the NYC also applies is, therefore, largely irrelevant.
I think I know what your next argument is but I'll address that if and when you raise it.
Just out of curiosity - Are you playing devil's advocate or are you biased toward the anti-Floyd camp?
I don't know whether anyone is still paying attention, but here is some interesting language regarding the suggestion that has been raised that Floyd's motion to vacate the arbitration award should be thrown out because the CAS findings "shall not be subject to appeal." (as found in the UCI rules)
A motion to vacate is not an appeal; federal courts are not supposed to “superintend arbitration proceedings.” See Teamsters, Local Union 657 v. Stanley Structures. Inc., 735 F.2d 903, 906 (5th Cir. 1984); accord Concourse Beauty School, Inc. v. Polakov, 685. F.Supp. 1311, 1318 (S.D.N.Y. 1988) (“The misconduct must amount to a denial of fundamental fairness of the arbitration proceeding in order to warrant vacating the award.”). District courts do not hear appeals from decisions of arbitration panels which, by definition, are final and binding.
This precise language is found in the lower court decisions of two cases from (drum roll) the Federal District Court for the Central District of California, written by the Hon. Percy Anderson.
I know the question of jurisdiction is the main point being argued, but I have a question beyond that. Does Landis show bias with his argument that the panel accepted Young's footnote as a basis for their decision and this footnote is in direct contradiction to sworn testimony?
Cal
Cal & Lorie-
Your question is probably best answered by what Floyd has asserted in his motion:
However, the record facts in this case do provide a basis for concluding that the Panel deferred to fellow CAS arbitrator, Mr. Young, acts that could be attributable to the presence of actual bias. Specifically, the panel treated Mr. Young’s statements as evidence on at least three occasions, deference afforded no other lawyer in the case.
I.e., there is circumstantial evidence tending to show bias. If you are asking whether Floyd has proved bias, that is what the Court will decide.
Understand that. You lawyers have been debating appeal vs. vacating an award. Help me understand the practical difference. If Landis is asking for the award to be vacated, then why is he asking for a jury trial? From what has been said the findings are final, but the award can be vacated. Help me understand what this might mean.
Since most of the argument has been around jurisdiction, this is the biggest hurdle Landis faces. If he does get beyond that hurdle, what will be the questions that need to be addressed?
Dr,
Having now read fully the cases you have cited, I think the question of whether Landis can assert any of the grounds for vacating the CAS decision under Section 10 of the Federal Arbitration Act, as you claim, is a very complicated question.
Without going into all the details it will turn on to what extent the CAS decision was "made" "in...or under the law" of the United States or Switzerland.
As you pointed out, and which I had forgotten, the CAS hearing was held in the US (New York City?) as apparently are all CAS hearings involving USADA. Does this mean the CAS decision was "made" in the United States, or under US law? You seem to be claiming this.
In Gatling, USADA persuaded the judge that the decision was made in Switzerland and under Swiss law even though the hearing was held in the United States and thus Gatling was barred from relief. USAD advanced three arguments:
1) the decision was issued from Switzerland,
2) CAS rule 28 states that the seat of CAS and each arbitration panel is Lausanne Switzerland.
3) In the absence of an explicit choice of law Swiss law controlled the arbitration.
If the reasoning of Gatling is followed here, then the ruling in Behr probably controls and Landis cannot claim relief under Section 10 of the FAA as you claim.
So I think this will be the critical issue to be decided.
Clarification:
When I use the word "made" I am using it as in Article V 1(e) of the New York Convention, not Section 10 of the FAA.
Cal & Lorie, great question. You're getting to the heart of the discussion here between DR and M.
You've asked about the distinction between an appeal and an award being vacated. Well, in the appeal of a legal decision, there's the chance that the legal decision might be changed. This was the situation when Landis and USADA appeared before the CAS -- there was the possibility that the adverse analytical finding (AAF) against Landis would be overturned, and that the CAS might have ruled that there WAS no AAF.
When an award is "vacated", it's as if the award is wiped out of existence. If the courts were to vacate the Landis arbitration decision, this would not be a ruling on how the arbitration should have been decided -- it would instead be a ruling that the arbitration was too fundamentally flawed to be recognized as legally binding. This might leave the parties in a position to re-arbitrate the case, presumably under an improved arbitration process that would be respected by the courts.
There is a third possible action that might be taken by a court, which would be that the court might refuse to recognize or enforce the arbitration award. Remember that an arbitration panel is a private body without direct governmental power -- it has no authority to enforce its decisions. So, for example, if Landis refuses to pay the $100,000 award to USADA, USADA would need to bring an action in court to enforce the award and force Landis to pay up. It is conceivable that a court might respond to USADA by saying that the court will not vacate the award, but will simply refuse to enforce the award. This response is really the only response available in a U.S. court if the court believes an award is fundamentally unfair, but the award falls outside of the court's jurisdiction (for example, if the court determines in the Landis case that the award was made under Swiss law).
OK. If I read M and DR correctly, then neither is arguing that Landis has the right to appeal the CAS decision to a U.S. federal court. The only argument is whether the U.S. courts have the right to (a) vacate the CAS decision, or (b) refuse to enforce the CAS decision. This is why M and DR are discussing whether the federal arbitration act is the applicable law here -- if it is, then there's the possibility for the CAS decision to be vacated. If not, and the NY Convention is the applicable law, then the court cannot vacate the CAS decision, but might refuse to enforce it.
Is this clear? M and DR, do you think I've drawn the distinction correctly?
M-
You said: In Gatling, USADA persuaded the judge that the decision was made in Switzerland and under Swiss law even though the hearing was held in the United States and thus Gatling was barred from relief.
I have no idea where you came up with this conclusion.
See: http://docs.justia.com/cases/federal/district-courts/florida/flndce/3:2008cv00241/50408/36/
Please read the above order.
3) In the absence of an explicit choice of law Swiss law controlled the arbitration.
Yup. But the arbitration is over.
If the reasoning of Gatling is followed here, then the ruling in Behr probably controls and Landis cannot claim relief under Section 10 of the FAA as you claim.
Behr controls nothing (but, more importantly, is not in conflict with the cases I cited). In Behr the ONLY applicable law was the NYC. The FAA was only discussed because its provisions are available THROUGH the window provided by section 208 of the NYC enabling statutes. Under 208 in case of conflict, the NYC controls.
But in Floyd's case the FAA is available all by itself. There is no need to resort to the limited application of the FAA by way of section 208 of the NYC. Thus in case of conflict, the NYC is not controlling.
But at least you have raised the argument I was anticipating.
Larry,
"OK. If I read M and DR correctly, then neither is arguing that Landis has the right to appeal the CAS decision to a U.S. federal court. The only argument is whether the U.S. courts have the right to (a) vacate the CAS decision, or (b) refuse to enforce the CAS decision. This is why M and DR are discussing whether the federal arbitration act is the applicable law here -- if it is, then there's the possibility for the CAS decision to be vacated. If not, and the NY Convention is the applicable law, then the court cannot vacate the CAS decision, but might refuse to enforce it.
Is this clear? M and DR, do you think I've drawn the distinction correctly?"
Yes. Nice summary.
I've steered away from using the term "jurisdiction" since conceptually it can get quite complicated under federal law, and I'm not sure I understand all it's ins and outs, (declining jurisdiction because of comity concerns, etc.?). And as you, I'm no expert on arbitration enforcement. I'm thinking of this as whether Landis has legally stated a claim for relief under the laws we have been looking at.
Cal & Lorie-
I view the issue of jurisdiction to be more of smokescreen than an actual hurdle. Rather than have me repeat what I have said please take a look at what I have said here and perhaps look at the disccusion at Rant linked from TBV. Not trying to be evasive, just trying to save time.
If he does get beyond that hurdle, what will be the questions that need to be addressed?
To keep it very simple take the analogy found at Rant:
Envision how a fistidious mother might deal with her infant dropping toast on the floor, "butter side down." It may very well not be contaminated ("5 second rule" as recognized in the 9th Circuit), she does not (and cannot) test it for actual contamination, but because of the "appearance" of the possibility of contamination, she prudently throws it away.
That is how the Court is being asked to treat the award against Floyd and why Floyd's motion raises the issues it does rather than simply saying "Here is how the CAS should have ruled."
Larry-I agree with much of what you have said except for the part about "enforcement" of an award. Not to be too picky, but the statutory term is "confirm" and if the basic statutory prerequisites have been met, a court is obligated to confirm an award. In this case it is unclear whether they have been met, but I doubt that it really matters.
If the award is not vacated, I expect that USAC/USADA just continues with its present position that "Floyd, the cost of reinstatement is $100K" and if he doesn't seek reinstatement they just let it go.
This is in contrast to a party in some other case that might need to resort to enforcing a judgment in order to collect money owed
I think M has led the discussion far from the applicable law with his suggestion that the NYC could prevent Floyd from having his case heard. But my comments on that are of record in a prior post.
DR,
"You said: In Gatling, USADA persuaded the judge that the decision was made in Switzerland and under Swiss law even though the hearing was held in the United States and thus Gatling was barred from relief.
I have no idea where you came up with this conclusion."
Read the USADA briefs.
"But in Floyd's case the FAA is available all by itself."
Why don't you flesh out this argument or explain it more fully. My understanding is that the same argument could or was made in many or all of the cases you cited. But perhaps I am missing a fine distinction here.
M-
re: Gatlin
The fact that USADA raised arguments has little bearing on whether those arguments were relied upon. When the Court declared it that it had no jurisdiction, there was no mention of CAS Switzerland or Swiss law, just USOC authority which preempts that of the courts. The court did acknowledge that the matter had been decided by the CAS and that the Court could not "redecide," but that was NOT the basis of the determination of "no jurisdiction."
re: FAA vs NYC
1. In some cases the facts are such that only the law of the NYC is available by it terms.
2. In some cases cases the facts are such that only law of the FAA is available by it terms.
3. But in some cases the facts are such that there is overlap of the terms of the FAA and NYC.
Under #1, since the NYC applies the FAA applies (under 208) BUT ONLY to the extent that the FAA does not conflict with the NYC.
Under #3, the FAA and the NYC stand completely independently and the FAA applies in the same unrestricted manner that it does under #2. In other words the FAA can be fully applied without having to "filter" it through sec. 208 of the NYC implementing statute.
Floyd probably falls under #3 but most certainly does not fall under #1.
DR,
Please explain why the FAA applies here at all. That was the meaning of my question.
As to your 3 below:
"But in some cases the facts are such that there is overlap of the terms of the FAA and NYC."
Unlike you, I read Section 208 to apply in that case, and unless I missed something, which I might have since this is not my area, the cases you cited are consistent with my reading of Section 208.
Section 208:
"Chapter 1 (the FAA) applies to actions and proceedings brought under this chapter to the extent that chapter is not in conflict with this chapter or the Convention as ratified by the United States."
M
[First when I use the shorthand "NYC" I am referring to the enabling statutes for the New York Convention as enacted in the US at 9 USC 201 et seq.]
You said:
Please explain why the FAA applies here at all.
Back at ya'. Why doesn't it? What requirements of the FAA have not been met in Floyd's filing?
In contrast, take a look at Behr again and tell us how the FAA provisions could come into play there WITHOUT using 9 USC 208.
Section 208:
"Chapter 1 (the FAA) applies to actions and proceedings brought under this chapter ...
Floyd does not need to bring his action "under this chapter," (the NYC) as was done in Behr, he can ignore that entirely and bring it directly under section 10 of the FAA which applies "where the award was made," and that language has been interpreted to include any US Court that can assert personal jurisdiction and venue. Are you suggesting that USADA is not subject to personal jurisdiction in California? I'm listening, but I cannot imagine any credible argument that can be raised.
Also, if you think the "award was made" in a foreign jurisdiction- tell us what that jurisdiction is and how you have reached your conclusion.
Larry, M, and DR,
Thanks for your input. I am beginning to understand the meaning of vacating an award. Landis' lawyers clearly state in the final section what they want with the vacating of the award:
1) Vacate the arbitral award entered in the arbitral proceeding known as Landis v/USADA.
2) Vacate the $100,000 cost award issued by the panel in Floyd Landis v/USADA.
3) Vacate the order of suspension confirmed by the panel in Floyd Landis v/USADA.
Larry suggests if the court would decide to vacate the order, that it might be a redo. However, at the very end Landis' lawyers have this line DEMAND FOR JURY TRIAL. What does that mean?
DR, I like your analogy:
"Envision how a fistidious mother might deal with her infant dropping toast on the floor, "butter side down." It may very well not be contaminated ("5 second rule" as recognized in the 9th Circuit), she does not (and cannot) test it for actual contamination, but because of the "appearance" of the possibility of contamination, she prudently throws it away."
However, if what is being asked for is a trial by jury then let's use your analogy. Landis would be suggesting that there is a fundamental problem with the toaster. There is no "just pop another piece of bread into the toaster and butter it, hoping this time the young child does not drop it on the floor." A jury trial is not a redo. It is asking for the court to rule there is no chance to receive a fundamentally fair arbitratal hearing from CAS. Am I reading too much into this?
I guess I am also asking for some speculation on what if. What if the court does vacate the award? What does that mean for Landis? No suspension, so he could begin to ride immediately and there would be no justifiable reason for US Cycling to deny him a license. Is really the only practical difference this will make to Landis be that he does not need to pay the $100,000 fine. In reality he has already served a 2 year suspension so he will not get that back.
Cal
Cal & Lorie:
You asked
A jury trial is not a redo. It is asking for the court to rule there is no chance to receive a fundamentally fair arbitratal hearing from CAS. Am I reading too much into this?
Yes. Floyd is merely asking that a jury decide whether the toast should be thrown away. Nothing more. It does not become a ruling that the Floyd cannot receive a fair hearing, only that the last one was suspicious and the results must be thrown out.
I guess I am also asking for some speculation on what if. What if the court does vacate the award? What does that mean for Landis? No suspension, so he could begin to ride immediately and there would be no justifiable reason for US Cycling to deny him a license. Is really the only practical difference this will make to Landis be that he does not need to pay the $100,000 fine. In reality he has already served a 2 year suspension so he will not get that back.
Vacating the award does mean that there would be no CAS decision in effect and the $100K award disappears. I honestly don't know whether that means that the AAA award would still be in effect. I suspect it would, since it has not been overturned.
Ah, I find this last comment by DR interesting.
1. The AAA decision might remain, which just leaves the suspension. What would really be removed is the $100,000 fine, collectable by USADA/USA Cycling. If that were the result, then Landis would not be able to claim complete vindication by the US court.
2. If the award were vacated by the US court, it might not be recognized by non-US systems. Hypothetically, is it possible for a european federation/event, or the UCI, to say that his USACycling issued license is not valid, because he has not paid the CAS award fine owed USADA -- even though USADA has had that award vacated in the US?
TBV
1. The AAA decision might remain, which just leaves the suspension. What would really be removed is the $100,000 fine, collectable by USADA/USA Cycling. If that were the result, then Landis would not be able to claim complete vindication by the US court.
It then also remains to be seen whether Floyd could again appeal the AAA ruling or whether there might be some other problem such as a time bar. And if he could, would he want to? I expect it would again have to be with his pals, the CAS. I'm sure at that point they would dot their i's and cross their t's (at least publicly). Whether Floyd could actually get a fair hearing is a whole different question and I expect opinions here are split right along the pro/anti Floyd border.
2. If the award were vacated by the US court, it might not be recognized by non-US systems. Hypothetically, is it possible for a european federation/event, or the UCI, to say that his USACycling issued license is not valid, because he has not paid the CAS award fine owed USADA -- even though USADA has had that award vacated in the US?
I expect this (or any of a number of similar awkward scenarios) was already taken into account when Floyd opted for a domestic team.
Not likely to be an issue, but if the US court were to vacate the CAS award and a foreign authority sought to enforce it in a foreign court, I think Floyd would win under the NYC- V-1(e) since the US court are "competent authority in the country in which the award was made."
But we're getting WAY too deep into hypotheticals.
DR,
"Please explain why the FAA applies here at all.
Back at ya'. Why doesn't it? What requirements of the FAA have not been met in Floyd's filing?"
It was an honest and simple question. I'm truly trying to understand your claim that the FAA applies.
M
You said:
Please explain why the FAA applies here at all.
and
It was an honest and simple question.
As was my response.
Go back up to where I said:
The jurisdiction of the US court comes from the Federal Arbitration Act and "diversity jurisdiction."
9 USC 10
(link provided in the earlier comment)
Now to be more specific:
The arbitration physically took took place in New York, NOT in Switzerland. The award was therefore "made" in the US. If you dispute this, please provide some authority to the contrary. I am not aware of any. There is little or no support for referring to Floyd's award as a "foreign award."
USADA operates nationwide and is subject to personal jurisdiction in California. Floyd lives in California. Under 120 S.Ct. 1331 the award was, therefore, also "made" in California for purposes of giving the court jurisdiction.
QED, The jurisdictional requirements of the FAA are met and the front door is wide open for Floyd to apply ANY of the provisions of the FAA
Now, back to Behr. That was a case involving non-US parties regarding an arbitration that was held in London. No surprise that it did not fall within the provisions of the FAA as described above. So that was found to be an action only under the NYC. The NYC, by its terms (sec 208), provides a limited "back door" access to SOME provisions of the FAA.
But since Floyd can enter through the wide open "front door," his application of the FAA is not limited, as it was for the petitioner in Behr.
Under the facts as they exist, I see no difficulty for Floyd on the jurisdiction issue. That is not to say that it will not be argued.
DR
Thank God! Now we can focus the issues. I couldn't figure out what you were arguing.
"The arbitration physically took took place in New York, NOT in Switzerland. The award was therefore "made" in the US. If you dispute this, please provide some authority to the contrary. I am not aware of any."
1. So you agree this is the central issue as I suggested. If the court finds that the arbitration decision was "made" in Switzerland, then you seem to agree that Behr may control and if it does Landis can't sue under the FAA.
I think this is an open question.
If you can find authority that holds or even states that the mere fact that an arbitration hearing is held in the US, presumbably for the convenience of the parties, means that the decision was "made" in the US, I'd be interested.
As I pointed out USADA presented the following arguments in the Gatling case as to why CAS decisions, even though the hearings are held in the US, are made in Switzerland.
The CAS rules state that the "seat" of the arbitral panel, presumably regardless of where the hearing was actually heard, is in Switzerland. The Landis decision was "issued" from Switzerland. The idea is that Swiss domestic law shall uniformly govern the arbitration procedure throughout the world.
I think there are good policy reasons for recognizing that the national and international cycling and anti-doping bodies want a uniform procedural system to govern the sport and discipline, and that therefore it makes sense for that discipline to be uniformly governed by Swiss arbitral law. I think a US court will take that into consideration.
2. As to "jurisdiction", I agree it is based on diversity. The question is whether Landis is entitled to claim under the FAA or whether the fact that the NY Convention also applies, bars him from doing so under Section 208.
3. As to the "front door" of the FAA, the language of that act is so broad that it appears to me that it could potentially apply to arbitral decisions wherever rendered so long as it was in connection with parties, even foreign parties, engaged in interstate and foreign commerce with the United States. But since I don't know the case law, I have no idea how the reach of the FAA is interpreted, but I have a hard time believing it would be so broad. And if it is so broad as to cover decisions made abroad, I believe the courts would likely shut that "front door", using Section 208 of the NYC, even if the language doesn't strictly apply to "chapter 1".
All of the cases you cited involved arbitration decisions which were "made" in the US, and in which the NYC was also found to apply because the arbitration was about a foreign commercial issue ("non domestic"). I don't think they provide much clear support for any exclusive "front door" use of the FAA. All of them found that Section 208 applied. I may be wrong on some of the details but that is how I read those cases.
These latter questions are quite complex and I think it is a mistake to claim there are any clear answers here, especially since I haven't read the case law which appears voluminous. So using Larry's caveat, I will just say take this with a grain of salt since "I'm no expert here".
I'm following the above discussion with great interest. Dr, you say the US court has jurisdiction, then what do you think about the outcome? Is there a real chance for Floyd to succeed? To me as a lay person the arguments about the Panel following Youngs unsworn statements seem pretty strong. What do you think?
M
You said:
1. So you agree this is the central issue as I suggested. If the court finds that the arbitration decision was "made" in Switzerland, then you seem to agree that Behr may control and if it does Landis can't sue under the FAA.
No. I don't agree at all for the reasons I have stated.
And I really don't care that the "seat" of the CAS is in Switzerland as per their rules. But since you have brought it up let's take a look at that rule:
R28 Seat The seat of the CAS and of each Arbitration Panel (“Panel”) is in Lausanne, Switzerland. However, should circumstances so warrant, and after consultation with all parties, the President of the Panel or, if he has not yet been appointed, the President of the relevant Division may decide to hold a hearing in another place and issues the appropriate directions related to such hearing.
Now what was your point?
I think this is an open question.
Fine.
Again back at ya'-
If you can find authority that holds or even suggests that the mere fact that an award written by a (French) arbitrator who is employed by a body headquartered in Switzerland determines that the award was "made" in Switzerland I'd be interested.
FYI read the discussion in 762 F.2d 741.
"No. I don't agree at all for the reasons I have stated. "
So are you saying that if the court finds that the arbitration decision was "made" in Switzerland that Landis can nevertheless maintain an action to vacate under Section 10 of the FAA? And if so is this "front door" or "back door"?
I don't understand you at all.
Highwheel:
Yes, I think Floyd has a chance.
He has presented factual allegations which would appear to support vacating the award under the available law.
In my view his strongest argument is based upon the failure of the arbitrator he chose to disclose potential conflicts.
See if you can wade through this:
http://caselaw.findlaw.com/data2/circs/9th/0555224P.pdf
Or if that puts you to sleep, just jump to the last couple of paragraphs.
And obviously there are that arguments that favor Floyd and those that do not.
Ultimately the Court decides (and I think the Court WILL decide)
M-
I agree that if the Court finds that the following are not true that it will dismiss the case
1. Floyd is a resident of California.
2. USADA is a resident of Colorado.
3. USADA has sufficient contacts with California to be subject personal jurisdiction there.
4. The amount in controversy exceeds $75,000.
What do you find so problematic about applying the FAA as written and interpreted by the courts other than the fact that YOU want to contort things so as to reach a different conclusion?
I think we've found our focal issue, which is whether the case is going to be decided under the Federal Arbitration Act (FAA) or the New York Convention (NYC).
This will be the ground for fertile discussion in briefs and in oral argument, and I don't know that we're going to reach any conclusions here.
I'll note two things. (1) that the Landis brief appears to be offering arguments for either controlling law, though clearly the criteria under the FAA appear better for Landis; (2) USADA argued that the NYC was the controlling law in Gatlin, and that reading appears to be more favorable to USADA.
Granting that one outcome is that the NYC but not the FAA are determined to be controlling, I'm wondering how the Landis claims hold up under solely that reading.
I expect Landis still thinks he has a case under purely NYC rules, and that USADA will say he does not.
What specifics can we imagine being used to support those positions?
TBV
I am still waiting to hear what I consider to be a credible argument that the award was not "made" in the US. The CAS hearing was held in the USA pursuant to USDA protocol
There are two concepts that are being mixed up.
The first is a threshold foreign "nexus" that would allow the NYC to apply.
The second is some overriding jurisdictional issue that would prevent the FAA from applying, not just that there is some foreign nexus.
Indeed, choice of law alone has been held insufficient to satisfy even the mere threshold "nexus" requirement. Jones, 30 F.3d 360
The fact that the NYC may apply does not prevent the FAA from applying. See footnotes 9 and 10 in the Jacada case I cited earlier (also equating the location of the award with the location of the arbitration).
And I think Floyd's judge would be willing to accept the language I cited earlier since he wrote it(in two separate cases):
A motion to vacate is not an appeal; federal courts are not supposed to "superintend arbitration proceedings." See Teamsters, Local Union 657 v. Stanley Structures. Inc., 735 F.2d 903, 906 (5th Cir. 1984); accord Concourse Beauty School, Inc. v. Polakov, 685. F.Supp. 1311, 1318 (S.D.N.Y. 1988) ("The misconduct must amount to a denial of fundamental fairness of the arbitration proceeding in order to warrant vacating the award."). District courts do not hear appeals from decisions of arbitration panels which, by definition, are final and binding.
TBV, great post. Yeah, I think you nailed it: the critical issue here is whether the case will be decided under the FAA or the NYC. This is a critical issue, as I don’t think the Landis case can move forward under the NYC. The FAA gives Landis the opportunity to argue that the CAS award should be vacated. In contrast, the NYC only provides Landis with grounds to avoid the enforcement of the CAS award by a U.S. court, and since USADA is not presently seeking to enforce the CAS award in U.S. court, there does not appear to be a controversy under the NYC that a U.S. court could consider at this time.
OK, I can imagine Landis going to court to demand that USA Cycling reinstate his cycling license, and if USA Cycling refuses on the ground that Landis has not paid his $100,000 of costs, perhaps then Landis could interject the NYC. Perhaps. But in the current case, Landis is looking at a different remedy.
So in answer to one of your questions, if this case cannot be decided under the FAA, then I think the case goes away, or needs to be revised to seek a different remedy.
As to whether this case can be decided under the FAA, I think it’s a close question. The discussion here between M and DR is a good one. You can also look at the Straubel article, in particular at footnote 113 (page 1221), and pages 1224-25 and 1250-53. I think that a good argument can be made either way, but for practical reasons I think that the courts will opt against FAA application. If the U.S. courts can vacate a CAS decision using the reach of the FAA, then this opens the door for every CAS decision to be litigated on a country-by-country basis, ultimately leaving the parties subject to a patchwork of different rulings. Once upon a time, we were concerned that the French authorities would ignore a CAS ruling in Landis’ favor – this same kind of concern argues against a U.S. court ignoring a CAS ruling against Landis.
Regarding the substance of the Landis case: I think the heart of the Landis case is the potential for bias inherent in a system that allows arbitrators to also represent parties before the CAS. Prof. Straubel made the same point in his article (see pp. 1235-36). Unfortunately, the fact that Prof. Straubel recognized this problem argues that the Landis team should also have been aware of this problem. In any event, I think that this same problem exists in most areas of commercial arbitration, and is not unique to CAS proceedings. If a court were to vacate the Landis CAS decision on this ground, this might lead to wholesale challenges of other arbitration decisions on the same ground, and courts are loathe to render decisions that have sweeping effects like this.
So … while I personally believe that the Landis filing does not stand a snowball’s chance in Death Valley, I am personally comforted by the fact that I haven’t predicted one of these cases correctly yet.
Larry,
"So … while I personally believe that the Landis filing does not stand a snowball’s chance in Death Valley, I am personally comforted by the fact that I haven’t predicted one of these cases correctly yet."
Are you sandbagging? -)
Thanks for the discussion of the Straubel article, it does make a good case for applicability of the FAA.
The relevant sections of Straubel are excerpted in this post
TBV
Larry
You said:
If the U.S. courts can vacate a CAS decision using the reach of the FAA, then this opens the door for every CAS decision to be litigated on a country-by-country basis, ultimately leaving the parties subject to a patchwork of different rulings.
I note that in general it has never been thought to be a problem that different countries have different laws nor is it a matter for a US federal court.
Stand back for a minute. You are suggesting that the Court needs to take into account the system put in place by private parties and needs to oversee the arbitration system. Even if that is a public policy concern for someone, it has nothing to do with the public policy of any one country.
To use my now favorite quote:
... federal courts are not supposed to "superintend arbitration proceedings."
You might just as well argue that it is public policy to punish doping in sports and that therefore any "guilty" findings should be immediately confirmed by the Court.
DR, of course different countries have different laws. But that doesn’t mean from a practical standpoint that every international commercial dispute is going to be separately decided by each country with a stake in the outcome, based solely on that country’s internal laws. We have the question of choice of law, where the law of a particular country may govern a particular dispute, even before a court located in a different country. We also have what is sometimes referred to as “comity” – the circumstances when one country will respect and enforce the judicial decisions reached by the courts of a different country. Of course, various countries have different notions regarding choice of law and comity, and international commercial disputes CAN get messy. Not every international dispute will neatly be decided by one set of laws and by one country’s courts. But it’s also not correct to say that the differences in national laws inevitably leads to what I called a “patchwork of different rulings” in different countries. The general standards for comity and choice of law provide some amount of order in international disputes, and arguably this order is desirable and worth preserving.
Naturally, these are complex matters, and there are circumstances where a court in country A will rightfully refuse to recognize the laws or the judicial decisions of country B.
I read the NYC as providing rules of comity for arbitration decisions.
I am not trying to suggest that the courts need to OVERSEE the arbitration system. The courts are needed to provide a means to ENFORCE arbitration decisions, as the courts have the power to enforce their decisions while arbitration panels do not. The courts are also needed to step in to prevent abuses, but if a binding arbitration system is going to be effective, it needs to function largely without the “superintending” you referred to in your last post. I think we agree on that.
I AM suggesting that when the court considers the possible application of the FAA to the Landis case, the court WILL consider the possible effect of its decision on the functioning of the arbitration system as a whole. Sure, this is a public policy consideration, but courts sometimes take these considerations into account, particularly in the case of considerations that affect the ability of the courts and the justice system to function properly. True, if the clear language of the statute and prior precedent make it clear that the FAA should (or should not) be applicable, then public policy considerations will not have much weight. But in a close case (and I think this IS a close case), public policy considerations will have more weight.
I agree that the courts do not want to OVERSEE the arbitration system. Again, this pushes for application of the NYC, which involves less oversight than the FAA. The FAA gives the court an oversight power to vacate arbitration decisions, which is not present in the NYC.
I don’t buy your argument concerning the “public policy” to punish doping in sport. There’s also a contrary public policy not to punish people for things they didn’t do. In civil litigation, you cannot say that there is a “public policy” to find for one side or the other. I take it that you’re arguing in effect that the court should ignore public policy considerations, as they are potentially unlimited in number and might point in every conceivable direction. I understand that argument, but that does not stop the courts from taking public policy considerations into account.
Larry-
I see you eschew brevity;-)
My comments were partially tongue -in-cheek. But I doubt that the court would, under any circumstances, get into any long review of public policy when merely assessing jurisdiction.
And even if deciding on the merits, I expect public policy discussions will compose a relatively small portion of the arguments and the decision. That changes if the Court throws the FAA out, in which case everything revolves around the "public policy" argument as allowed under the NYC (assuming that is not also thrown out).
You said:
I don’t buy your argument concerning the "public policy" to punish doping in sport.
I am glad you do not "buy it" for precisely the reasons you state. My point was that streamlining the process (whatever process- arbitration and anti-doping are both good examples) is of little value if fairness or accuracy is sacrificed in the attempt.
Eschew brevity? Moi? You think?
TB posed
I expect Landis still thinks he has a case under purely NYC rules, and that USADA will say he does not.
What specifics can we imagine being used to support those positions?
OK, were you anticipating this? There is a fact specific argument that is suggested by the Behr case, previously discussed.
To simplify - Behr held that:
(1)ONLY the NYC applied
(2)The "public policy" provisions under the terms of the NYC were to be narrowly construed and therefore would not encompass the "manifest disregard of law" provision available under the FAA.
(3) The Court also found that even if the FAA standard could be applied, it could not be met.
Without digging heavily into the case law, it is conceivable the the FAA's "evident impartiality" provision for vacating might not be treated in the same manner as the provision which was ignored in Behr. I am not remotely trying to suggest that the argument would stand on its own, but I am aware of, for example, Supreme Court language describing the necessity of impartiality of arbitrators.
There is also another matter at issue with regard to the Swiss Courts. Even assuming that CAS rules say that only appeal is to [your favorite foreign authority here], the UCI rules say that the matter will not be appealed.
Thus.
(1) Adminsitrative remedies have been exhausted and the matter is capable of decision by the US Court
(2) "A motion to vacate is not an appeal."
Larry-
You said:
Eschew brevity? Moi? You think?
Please elaborate.
Elaboration
I am curious whether USADA will (ironically) make the arguments raised by the USOC in the Gatlin case.
While reading the following excerpt keep in mind that Jan Paulsson is the arbitrator in Floyd's case who Floyd alleges (among other things) failed to disclose reltionships that my affect his impartiality.
The Swiss Federal Supreme court has recognized the CAS as "a real arbitral tribunal offering sufficient guarantees of independence and objectivity for its awards to be final and enforceable." Jan Paulsson, The Swiss Federal Tribunal Recognises the Finality of Arbitral Awards Relating to Sports Disciplinary Sanctions Rendered by the IOC’s Court of Arbitration for Sports, 8 International Arbitration Reports 12, 15 (Oct. 1993)(citing Grundel v. Int’l Equestrian Federation, Judgment of Mar. 15, 1993).
Who could possibly be better qualified to comment on Mr. Paulsson and the general integrity of the CAS process than Mr. Paulsson himself?
Full document here:
http://docs.justia.com/cases/federal/district-courts/florida/flndce/3:2008cv00241/50408/15/
Despite the lack of activity in this discussion I am adding another comment, perhaps to pull this all together.
9 USC 10 ("FAA-10") makes reference to "where the award was made," and it has been suggested here that a finding that the award was "made" in a foreign jurisdiction would divest the court of jurisdiction.
Let me provide a more solid reasoning why I do not believe that to be true.
1. FAA-10 appears to create jurisdiction in the federal courts. However this provision has been consistently interpreted to NOT confer federal jurisdiction in the absence of some other basis of federal jurisdiction, e.g. diversity.
2. So it would appear that FAA-10 is merely substantive federal law.
3. If FAA-10 cannot be used to confer jurisdiction, it would be particularly perverse to use that section to divest the federal courts of jurisdiction which has been independently established on the basis of diversity.
4. Just a note - In contrast to FAA-10, 9 USC 203 (under the NYC) is jurisdictional both on its face and as interpreted.
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