MAJOR LEAGUE BASEBALL PLAYERS ASSOCIATION v. STEVE GARVEY
ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
The Court of Appeals for the Ninth Circuit here rejected an arbitrators factual findings and then resolved the merits of the parties dispute instead of remanding the case for further arbitration proceedings. Because the Courts determination conflicts with our cases limiting review of an arbitrators award entered pursuant to an agreement between an employer and a labor organization and prescribing the appropriate remedy where vacation of the award is warranted, we grant the petition for a writ of certiorari and reverse. The motions for leave to file briefs amicus curiae of the National Academy of Arbitrators and the Office of the Commissioner of Baseball are granted.
In the late 1980s, petitioner Major League Baseball Players Association (Association) filed grievances against the Major League Baseball Clubs (Clubs), claiming the Clubs had colluded in the market for free-agent services after the 1985, 1986 and 1987 baseball seasons, in violation of the industrys collective-bargaining agreement. A free agent is a player who may contract with any Club, rather than one whose right to contract is restricted to a particular Club. In a series of decisions, arbitrators found collusion by the Clubs and damage to the players. The Association and Clubs subsequently entered into a Global Settlement Agreement (Agreement), pursuant to which the Clubs established a $280 million fund to be distributed to injured players. The Association also designed a Framework to evaluate the individual players claims, and, applying that Framework, recommended distribution plans for claims relating to a particular season or seasons.
The Framework provided that players could seek an arbitrators review of the distribution plan. The arbitrator would determine only whether the approved Framework and the criteria set forth therein have been properly applied in the proposed Distribution Plan. Garvey v. Roberts, 203 F.3d 580, 583 (CA9 2000) (Garvey I). The Framework set forth factors to be considered in evaluating players claims, as well as specific requirements for lost contract-extension claims. Such claims were cognizable
Respondent Steve Garvey, a retired, highly regarded first baseman, submitted a claim for damages of approximately $3 million. He alleged that his contract with the San Diego Padres was not extended to the 1988 and 1989 seasons due to collusion. The Association rejected Garveys claim in February 1996, because he presented no evidence that the Padres actually offered to extend his contract. Garvey objected, and an arbitration hearing was held. He testified that the Padres offered to extend his contract for the 1988 and 1989 seasons and then withdrew the offer after they began colluding with other teams. He presented a June 1996 letter from Ballard Smith, Padres President and CEO from 1979 to 1987, stating that, before the end of the 1985 season, Smith offered to extend Garveys contract through the 1989 season, but that the Padres refused to negotiate with Garvey thereafter due to collusion.
The arbitrator denied Garveys claim, after seeking additional documentation from the parties. In his award, he explained that
Garvey moved in Federal District Court to vacate the arbitrators award, alleging that the arbitrator violated the Framework by denying his claim. The District Court denied the motion. The Court of Appeals for the Ninth Circuit reversed by a divided vote. The court acknowledged that judicial review of an arbitrators decision in a labor dispute is extremely limited. But it held that review of the merits of the arbitrators award was warranted in this case, because the arbitrator
The District Court then remanded the case to the arbitration panel for further hearings, and Garvey appealed. The Court of Appeals, again by a divided vote, explained that Garvey I established that the conclusion that Smith made Garvey an offer and subsequently withdrew it because of the collusion scheme was the only conclusion that the arbitrator could draw from the record in the proceedings. No. 0056080, 2000 WL 1801383, at *1 (Dec. 7, 2000), judgt. order to be reported at 243 F.3d 547. (Garvey II). Noting that its prior instructions might have been unclear, the Court clarified that Garvey I left only one possible resultthe result our holding contemplatedan award in Garveys favor. Ibid. The Court of Appeals reversed the District Court and directed that it remand the case to the arbitration panel with instructions to enter an award for Garvey in the amount he claimed.1
The parties do not dispute that this case arises under §301 of the Labor Management Relations Act, 1947, 61 Stat. 156, 29 U.S.C. § 185(a), as the controversy involves an assertion of rights under an agreement between an employer and a labor organization. Although Garveys specific allegation is that the arbitrator violated the Framework for resolving players claims for damages, that Framework was designed to facilitate payments to remedy the Clubs breach of the collective-bargaining agreement. Garveys right to be made whole is founded on that agreement.
Judicial review of a labor-arbitration decision pursuant to such an agreement is very limited. Courts are not authorized to review the arbitrators decision on the merits despite allegations that the decision rests on factual errors or misinterprets the parties agreement. Paperworkers v. Misco, Inc., 484 U.S. 29, 36 (1987). We recently reiterated that if an
In discussing the courts limited role in reviewing the merits of arbitration awards, we have stated that
To be sure, the Court of Appeals here recited these principles, but its application of them is nothing short of baffling. The substance of the Courts discussion reveals that it overturned the arbitrators decision because it disagreed with the arbitrators factual findings, particularly those with respect to credibility. The Court of Appeals, it appears, would have credited Smiths 1996 letter, and found the arbitrators refusal to do so at worst irrational and at best bizarre. Garvey I, 203 F.3d, at 590591. But even serious error on the arbitrators part does not justify overturning his decision, where, as here, he is construing a contract and acting within the scope of his authority. Misco, supra, at 38.
In Garvey II, the court clarified that Garvey I both rejected the arbitrators findings and went further, resolving the merits of the parties dispute based on the courts assessment of the record before the arbitrator. For that reason, the court found further arbitration proceedings inappropriate. But again, established law ordinarily precludes a court from resolving the merits of the parties dispute on the basis of its own factual determinations, no matter how erroneous the arbitrators decision. Misco, supra, at 40, n. 10; see also American Mfg. Co., 363 U.S. at 568. Even when the arbitrators award may properly be vacated, the appropriate remedy is to remand the case for further arbitration proceedings. Misco, supra, at 40, n. 10. The dissent suggests that the remedy described in Misco is limited to cases where the arbitrators errors are procedural. Post, at 1 (opinion of Stevens, J.) Misco did involve procedural issues, but our discussion regarding the appropriate remedy was not so limited. If a remand is appropriate even when the arbitrators award has been set aside for procedural aberrations that constitute affirmative misconduct, it follows that a remand ordinarily will be appropriate when the arbitrator simply made factual findings that the reviewing court perceives as irrational. The Court of Appeals usurped the arbitrators role by resolving the dispute and barring further proceedings, a result at odds with this governing law.2
For the foregoing reasons, the Court of Appeals erred in reversing the order of the District Court denying the motion to vacate the arbitrators award, and it erred further in directing that judgment be entered in Garveys favor. The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
1. Garvey contends that, because the Associations petition was filed more than 90 days after Garvey I, we cannot consider a challenge raising issues resolved in that decision. But there is no question that the Associations petition was filed in sufficient time for us to review Garvey II, and we have authority to consider questions determined in earlier stages of the litigation where certiorari is sought from the most recent of the judgments of the Court of Appeals. Mercer v. Theriot, 377 U.S. 152 (1964) (per curiam); Hamilton-Brown Shoe Co. v. Wolf Brothers & Co., 240 U.S. 251, 258 (1916).
2. In any event, no serious error on the arbitrators part is apparent in this case. The fact that an earlier panel of arbitrators rejected the owners testimony as a whole does not compel the conclusion that the panel found Smiths specific statements with respect to Garvey to be false. The arbitrators explanation for his decision indicates that he simply found Smith an unreliable witness and that, in the absence of corroborating evidence, he could only conclude that Garvey failed to show that the Padres had offered to extend his contract. The arbitrators analysis may have been unpersuasive to the Court of Appeals, but his decision hardly qualifies as serious error, let alone irrational or inexplicable error. And, as we have said, any such error would not justify the actions taken by the court.