brief of respondents michael scott and … · restatement [second] of torts § 874, comment a ........
TRANSCRIPT
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________________________________________
IN THE
SUPREME COURT OF THE
UNITED STATES OF AMERICA ________________________________________
NATIONAL HOCKEY LEAGUE,
Petitioner,
v.
MICHAEL SCOTT and
NATIONAL HOCKEY LEAGUE PLAYER’S
ASSOCIATION,
Respondents.
__________________________________________
ON WRIT OF CERTIORARI TO THE APPELLATE COURT OF
TULANIA
_______________________________________
BRIEF OF RESPONDENTS MICHAEL SCOTT and NATIONAL HOCKEY
LEAGUE PLAYER’S ASSOCIATION
_______________________________________
BRIEF NO. 22
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TABLE OF CONTENTS
TABLE OF CONTENTS .................................................................................................................. ii
TABLE OF AUTHORITIES ........................................................................................................... iv
STATEMENT OF JURISDICTION ................................................................................................. 1
STATEMENT OF ISSUES............................................................................................................... 2
STATEMENT OF THE CASE ......................................................................................................... 2
I. The Policy…………………………………………………………………………2
II. SuperDope ………………………………………………………………………..3
III. Scott's Violation of the Policy ……………………………………………………4
IV. Procedural History ……………………………………………………………..…5
SUMMARY OF ARGUMENT ......................................................................................................... 5
STANDARDS OF REVIEW ............................................................................................................. 6
ARGUMENT ................................................................................................................................... 6
I. Scott’s claim that the NHL violated DATWA is not preempted by Section 301 of
the LMRA because Minnesota’s statutory law created nonnegotiable rights that
are independent of obligations found in a collective bargaining
agreement…………………………………………………………………………… 6
a. Scott’s DATWA claim is not preempted by LMRA’s § 301 because Scott does not
allege a breach of the CBA or any right created by the contract. …………………. 8
b. Scott’s DATWA claim is not preempted by LMRA’s § 301 because DATWA creates
an independent nonnegotiable right that does not require CBA
interpretation……………………………………………………………………………. 10
1.Scott’s DATWA claim is not premised on a negotiable right covered by a
state common law causes of action requiring interpretation of the
CBA……………………………………………………………………... 11
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2.Scott’s DATWA claim is premised on an independent nonnegotiable right
and its obligations are governed by state statutory law. …………………12
II. The arbitration award in this case is contrary to New York’s law governing
fiduciary duties, going so far as to condone the breach of such duty by Schrute
and the NHL……………………………………………………………………….. 17
a. This Court overturns arbitration awards which are contrary to Public
Policy……………………………………………………………………………………... 17
b. New York recognizes a Fiduciary Duty………………………………………………. 19
c. A Fiduciary Relationship existed between Schrute and the players who were part
of the collective bargaining agreement……………………………………………… 21
CONCLUSION .............................................................................................................................. 24
iv
TABLE OF AUTHORITIES
Cases
Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 212 (1985) ..................................... 6, 10, 11, 12, 13
Anderson v. Ford Motor Co., 803 F.2d 953, 956 (8th Cir. 1986) ......................................... 6, 7, 12
Atwater v. NFL Players Ass’n, 626 F.3d 1170 (11th Cir. 2010)............................................. 11, 12
Avco Corp. v. Machinists, 390 U.S. 557 (1968) ............................................................................. 8
Bale v. General Telephone Co., 795 F.2d 775 (9th 1986) ........................................................ 9, 12
Bogan v. GMC, 500 F.3d 828, 832 (8th Cir. 2007) .................................................................... 7, 9
Callhan v. Callhan, 127 A.D.2d 298, 300 (N.Y. App. Div. 1987) ............................................... 20
Caterpillar, Inc. v. Williams, 482 U.S. 386, 396 (1987) ....................................................... 7, 8, 11
Charles Dowd Box Co. v. Courtney, 368 U.S. 502 (1962) ....................................................... 8, 10
Cramer v. Consol. Freightways, Inc., 255 F.3d 683 (9th Cir. 2001) ............................ 7, 11, 12, 13
DeCoe v. General Motors Corp., 32 F.3d 212, 216 (6th Cir. 1994) ............................................... 7
Dineen v. Wilkens, 64 N.Y.S.3d 56, 58 (N.Y. App. Div. 2017) ................................................... 19
E. Associated Coal Corp. v. United Mine Workers, 531 U.S. 57, 63 (2000) ............................... 18
EBC I, Inc. v. Goldman, Sachs & Co., 5 N.Y.3d 11, 19; (2005) .................................................. 19
Electrical Workers v. Hechler, 481 U.S. 851, 859, n. 3 (1987) ...................................................... 6
Gibbons v. Ogden, 22 U.S. 1 (1824) ............................................................................................... 6
Gore v. TWA, 210 F.3d 944, 950 (8th Cir. 2000) ................................................................... 10, 11
Grandson v. Merrill Lynch & Co., 147 F.3d 184, 189 (2d. Cir. 1988) ......................................... 20
Hawaiian Airlines v. Norris, 512 U.S. 246, 258 (1994) ........................................................... 9, 13
Holmes v. NFL, 939 F. Supp. 517, 527(N.D. Tex. 1996) ............................................................. 12
Int’l Broth. of Elec. Workers, AFL-CIO v. Hechler, 481 U.S. 851 (1987) ................................... 12
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Int'l Bhd. of Elec. Workers, Local 97 v. Niagara Mohawk Power Corp., 143 F.3d 704, 716 (2d
Cir. 1998) .................................................................................................................................. 19
Karnes v. Boeing, 335 F.3d 1189, 1194 (10th Cir. 2003) ............................................................. 14
Kaufman v. Cohen, 307 A.D.2d 113, 125 ..................................................................................... 20
Lingle v. Norge Division of Magic Chef, Inc., 486 U.S. 399, 409-13 (1988) ................. 7, 9, 10, 13
Livadas v. Bradshaw, 512 U.S. 107, 123 (1994) .............................................................. 10, 11, 13
Local 174, Teamsters, Chauffeurs, Warehousemen & Helpers of Am. v. Lucas Flour Co., 369
U.S. 95, 103 (1962) ................................................................................................................. 6, 8
Miner v. Local # 373, Int’l Bhd. Of Teamsters, 513 F.3d 857, 860 (8th Cir. 2008) ....................... 6
Missouri P.R. Co. v. Norwood, 283 U.S. 249, 258 (1931) ........................................................... 13
People ex rel. Cuomo v. Coventry First LLC, 13 N.Y.3d 108, 115 (2009) .................................. 19
Rivet v. Regions Bank, 522 U.S. 470, 475 (1998) ......................................................................... 10
Saul v. Cahan, 153 A.D.3d 947, 61 N.Y.S.3d 265 ....................................................................... 19
Stringer v. NFL, 474 F.Supp. 894, 899 (S.D. Ohio 2007) .................................................. 7, 11, 12
Terminal R. Asso. V. Brotherhood of R. Trainmen, 318 U.S. 1 (1943) ........................................ 13
Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 451 (1957) ............................................... 6
Thompson v. Hibbing Taconite Holding Co., 2008 U.S. Dist. LEXIS 87045, 11-12 (D.C. Minn.
2009) ..................................................................................................................................... 8, 14
Tri–Star Light. Corp. v. Goldstein, 151 A.D.3d 1102, 1107 ........................................................ 20
Trustees of the Twin City Bricklayers Fringe Benefits Funds v. Superior Waterproofing, Inc., 450
F.3d 324, 331 (8th Cir. 2006) ............................................................................................... 8, 12
United Paperworkers Int'l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 42 (1987) ................... 17
United Steelworkers of America v. Rawson, 495 U.S. 362 (1998) ........................................... 8, 12
vi
Utility Workers of America, Local No. 246 v. Southern California Edison Co., 852 F.2d 1083
(9th Cir. 1988) ............................................................................................................................. 7
W.R. Grace & Co. v. Rubber Workers, 461 U.S. 757, 766, (1983) ........................................ 17, 19
Williams v. NFL, 582 F.3d 863, 874 (8th Cir. 2009) ................................................................ 7, 14
Statutes
28 U.S.C. § 1254 ............................................................................................................................. 1
28 U.S.C. § 1291 ............................................................................................................................. 1
28 U.S.C. § 1331 ............................................................................................................................. 1
29 U.S.C. § 185(a) .......................................................................................................................... 1
Minn. Stat. Ann. § 181.950 (2012) ............................................................................................ 5, 12
Other Authorities
Restatement [Second] of Torts § 874, Comment a ....................................................................... 19
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STATEMENT OF JURISDICTION
This is an appeal from a judgment by the Tulania Court of Appeals reversing the United
States District Court for the Southern District of Tulania’s grant of summary judgment in favor of
the Appellant, which required preemption of Respondent’s claim alleging NHL’s violation of
Minnesota’s Drug and Alcohol Testing in the Workplace Act (“DATWA”) and affirmed the
arbitrator’s suspension.
Section 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185(a), states
that “[s]uits for violation of contracts between an employer and a labor organization representing
employees in an industry affecting commerce … may be brought in any district court of the United
States having jurisdiction of the parties, without respect to the amount in controversy or without
regard to the citizenship of the parties.” Section 301’s applicability to the claim before the bar
raises a federal question. Further, 28 U.S.C. § 1331 provides for Federal Question jurisdiction as
within the purview of the district courts. Thus, the United States District Court for the Southern
District of Tulania had original jurisdiction over these claims. Pursuant to 28 U.S.C. § 1291, “The
courts of appeals … shall have jurisdiction of appeals from all final decisions of the district courts
of the United States.” Therefore, as the United States District Court for the Southern District of
Tulania is within the confines and scope of the Tulania Court of Appeals, jurisdiction was proper
for the appellate action.
28 U.S.C. § 1254, provides that the Supreme Court of the United States may review cases
from the Federal Courts of Appeals, “[b]y writ of certiorari granted upon the petition of any party
to any civil or criminal case, before or after rendition of judgment or decree.” Thus, this Court has
jurisdiction over the case at bar pursuant to the writ of certiorari.
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STATEMENT OF ISSUES
1. Whether the Court of Appeals correctly held that a National Hockey League player’s
claims under Minnesota’s Drug and Alcohol Testing in the Workplace Act (“DATWA”)
challenging a suspension under a collectively bargained for drug policy are not preempted
by Section 301 of the Labor Management Relations Act.
2. Whether the Court of Appeals correctly set aside an arbitrator’s award sanctioning the
National Hockey League’s refusal to issue specific product warnings regarding the
presence of a banned substance in a dietary supplement because such an award violated
public policy.
STATEMENT OF THE CASE
This Court has granted review of an appeal filed by Petitioner, National Hockey League
(“NHL”), requesting that the judgment of the Tulania Court of Appeals be reversed and the
judgement of the United States District Court for the Southern District of Tulania be validated.
Respondent, Michael Scott (“Scott”), is an employee of the Minnesota Wild, L.L.C., and a member
of the National Hockey League Player’s Association (“NHLPA”). (R. at 3). The NHL and the
NHLPA entered into a Collective Bargaining Agreement (“CBA”) in 2013, that included, among
other facets, the NHL policy governing steroid and substances usage (the “Policy”). (Id.).
I. The Policy
The Policy prohibits NHL players from using certain prohibited substances; among these
prohibited substances are performance enhancing drugs, and masking agents such as Narcotussin.
(R. at 3). The Policy provides that players are personally responsible for what enters their bodies
and notes that positive test results will not be excused for lack of awareness that a player may have
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taken a prohibited substance. (Id.). Per the Policy, positive test results will be subject to discipline
by the NHL commissioner. (Id.). The Policy establishes that a first offense for violating the Policy
includes suspension for anywhere between twenty and twenty-five games, and it further provides
for the right of a player to appeal to the commissioner, or an arbitrator that is either the
commissioner or his designee. (Id.). The Policy’s testing procedure is administered by Dr. Dwight
K. Schrute (“Schrute”). (Id.). Schrute’s duties include overseeing testing procedures, making
determinations regarding the methods of testing, educating players on the Policy’s implementation,
and reporting positive results to the Commissioner. (R. at 4). Dr. Jim Halpert (“Halpert”) aids in
implementing the Policy as a Consulting Toxicologist; neither Halpert nor Schrute are affiliated
with the NHL. (Id.).
II. SuperDope
Around 2013, the NHL became aware that SuperDope, a sleep relaxation supplement,
contained Narcotussin, which is a banned substance under the Policy. (R. at 4.). Despite
SuperDope’s label not disclosing Narcotussin as an ingredient; Schrute was aware of Narcotussin’s
presence in SuperDope, and he informed several colleagues. (Id.). Following analysis by Halpert,
Phyllis Vance, the NHL Vice President of Law and Labor Policy, was made aware of the
connection between Narcotussin and SuperDope. (Id.). The NHL subsequently refused to report
this information to the Food and Drug Administration. (Id.).
The NHL notified the NHLPA that the distributor of SuperDope, Dunder Mifflin, had been
listed as a banned company that players, and teams, were henceforth prohibited from doing
business with. (Id.). The NHLPA notified players by email of Dunder Mifflin’s status, and Halpert
notified players via a memorandum warning them to avoid taking substances that aided in sleep
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relaxation. (Id.). Strikingly absent from Halpert’s memorandum was any specific mention of
SuperDope, or its connection with the banned substance Narcotussin. (Id.).
III. Scott’s Violation of the Policy
Scott took SuperDope prior to a preseason scrimmage, and shortly after, was drug tested
pursuant to the Policy’s provisions. (Id.). Scott tested positive for Narcotussin and was
subsequently suspended for twenty games. (Id.). Three other NHL players also tested positive for
Narcotussin and were similarly disciplined. (Id.). Respondent, the other three players, and the
NHLPA appealed the suspension’s pursuant to the Policy’s appeals provision. (Id.).
None of the players disputed the positive tests results during the arbitration proceedings.
(Id.). All conceded that they were aware of the warnings regarding sleep aids and that the Policy
required players to be responsible for their own bodies. (Id.). However, the players argued that the
positive results should be excused because Schrute, and the NHL, knew that SuperDope contained
Narcotussin, but failed to disclose this fact to NHL players. (R. at 5). Further, the players argued
that the Policy created a duty requiring NHL officials to explicitly warn that SuperDope contained
Narcotussin. (Id.).
Following a full hearing, the arbitrator upheld the NHL’s suspension of Scott and the other
players. (Id.). The arbitrator’s decision was based on the Policy’s strict liability standard; the
players neither disputed their positive tests, nor disputed the validity of the laboratory results. (Id.).
The arbitrator determined that the strict liability standard of the Policy levied responsibility on the
players for substances found in their bodies, and that the Policy did not impose any obligation on
the NHL to specifically warn players of the specific contents within SuperDope. (Id.).
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IV. Procedural History
Scott filed suit in Minnesota State Court against the NHL, and various other individuals.
(Id.). Scott alleged that the Policy violated Minnesota’s DATWA, Minn. Stat. Ann. § 181.950
(2012), and sought an injunction and damages. (Id.). The Minnesota State Court granted a
temporary injunction for Scott’s suspension, but this injunction did not apply to the other three
players as they were not employed in Minnesota. (Id.). The NHL removed the case to the United
States District Court for the Southern District of Tulania where it was consolidated with NHLPA’s
action seeking to vacate the arbitrator’s award. (Id.).
The NHL filed a motion for summary judgement and asserted that § 301 of the LMRA
preempted the DATWA claim and that the NHL had no duty to disclose that SuperDope contained
Narcotussin. (R. at 14). The District Court ruled that DATWA was preempted by § 301 because it
required interpretation of the CBA’s Policy, and the court found that the NHL and Schrute did not
violate public policy because Schrute warned players generally about sleep aid supplements, and
that it was within his discretion to warn generally, or specifically. (Id.). Scott and the NHLPA
appealed to the Tulania Court of Appeals, which found for them on both issues and reversed the
lower district court’s ruling. (R. at 20). The dispute now rests in the purview of the Supreme Court.
SUMMARY OF ARGUMENT
Scott’s claim that the National Hockey League violated Minnesota’s Drug and Alcohol
Testing in the Workplace Act is not pre-empted by Section 301 of the Labor Management
Relations Act because Minnesota’s statutory law created nonnegotiable rights that are independent
of obligations found in a collective bargaining agreement. Regardless of these facts the arbitrator’s
award in favor of the NHL should be overturned as it runs contrary to well established public
policy. New York law governs this question per the collective bargaining agreement and New
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York has a clearly established fiduciary duty. This duty was breached by Schrute and the NHL.
The public needs strong protections in this arena and they have imposed them via their body of
law. The arbitrator in this case has no right to trample upon that wisdom. As such, this arbitrator’s
award should be overturned.
STANDARDS OF REVIEW
The Supreme Court will review both the DATWA claim and the arbitrator’s award de
novo. (R. at 1).
ARGUMENT
I. Scott’s claim that the NHL violated DATWA is not preempted by Section 301 of
the LMRA because Minnesota’s statutory law created nonnegotiable rights that
are independent of obligations found in a collective bargaining agreement.
The threshold for invoking federal jurisdiction under § 301(a) of the LMRA, requires the
existence of a valid contract between an employer and a labor organization. Miner v. Local # 373,
Int’l Bhd. Of Teamsters, 513 F.3d 857, 860 (8th Cir. 2008). Shortly after the passage of the LMRA,
the Supreme Court authorized federal courts to establish a common-law approach to interpret
CBAs under § 301. Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 451 (1957).
Despite a long-standing recognition that federal law supersedes state law, see Gibbons v.
Ogden, 22 U.S. 1 (1824), it was not until 1962 that the Supreme Court expressly held that federal
common law preempts state contract law in CBA litigation. Local 174, Teamsters of Am. v. Lucas
Flour Co., 369 U.S. 95, 103-04 (1962). The Court expanded the scope of § 301’s preemption in
1985 to extend beyond claims founded directly on rights created by a CBA to include state-law
claims that are “substantially dependent upon” CBAs. Allis-Chalmers Corp. v. Lueck, 471 U.S.
202, 215 (1985) (ruling a state common-law based bad faith distribution claim was preempted by
§ 301); Electrical Workers v. Hechler, 481 U.S. 851, 859, n. 3 (1987); Anderson v. Ford Motor
7
Co., 803 F.2d 953, 956 (8th Cir. 1986).
Two years after Lueck, the Supreme Court curbed possible over-application of § 301 by re-
emphasizing that state law claims unrelated to the CBA are not preempted. Caterpillar, Inc. v.
Williams, 482 U.S. 386, 396 (1987) (rejecting the premise that all employment disputes involving
unionized employees shall be governed by a federal common law). Furthermore, defenses based
on the terms of a CBA do not necessarily raise a federal question when the complaint is
unequivocally based on a state granted right. Id. at 399. A year later, in Lingle v. Norge Division
of Magic Chef, Inc., the Court further empowered the sovereignty of state law by re-affirming that
states may provide substantive rights to parties irrespective of a CBA, and that these rights are not
preempted by § 301 unless they require interpretation of the CBA. 486 U.S. 399, 409-13 (1988)
(recognizing that both a state law claim and a CBA dispute may require addressing the same set
of facts).
Since the late 1980s the legal principles of § 301 have essentially remained unchanged
despite inconsistency in their application. See Cramer v. Consol. Freightways, Inc., 255 F.3d 683
(9th Cir. 2001); compare Utility Workers of America, Local No. 246 v. Southern California Edison
Co., 852 F.2d 1083 (9th Cir. 1988). There are two pathways for § 301 to preempt a claim when a
CBA exists between the parties: (1) the claim asserts a breach of a right established by the CBA,
or (2) the claim “substantially depends upon” interpretation of the contract because it is
“inextricably intertwined” with the CBA. Williams v. NFL, 582 F.3d 863, 874 (8th Cir. 2009);
Bogan v. GMC, 500 F.3d 828, 832 (8th Cir. 2007) Anderson, 803 F.2d at 956; DeCoe v. General
Motors Corp., 32 F.3d 212, 216 (6th Cir. 1994); Stringer v. NFL, 474 F.Supp. 894, 899 (S.D. Ohio
2007). If a claim does not fit into either category, then it is not preempted by § 301. Id. Thus, it is
important to look to the “claim itself.” Williams, 582 F.3d at 873 (relying on Trustees of the Twin
8
City Bricklayers Fringe Benefits Funds v. Superior Waterproofing, Inc., 450 F.3d 324, 331 (8th
Cir. 2006).
In the present case, Respondents neither dispute the existence of, nor the binding nature of
a CBA with the NHL. (R. 3). Under Miner, this is the initial starting point of a § 301 preemption
analysis. Furthermore, Respondents do not contest the validity of any long-settled law. In
accordance with Lueck’s holding, Respondents accept that § 301 preempts contractual disputes
arising from a CBA or disputes requiring substantial interpretation of the CBA.
a. Scott’s DATWA claim is not preempted by LMRA’s § 301 because Scott does not allege a
breach of the CBA or any right created by the contract.
The interpretation and application of rights founded on a CBA are preempted by § 301 and
rest entirely within the federal realm. United Steelworkers of America v. Rawson, 495 U.S. 362,
368 (1990). Section 301 “calls for uniform law” because a CBAs provisions may have varied
meanings under state and federal law, which would be disruptive to a federal labor scheme. Local
174, Teamsters, Chauffeurs, Warehousemen & Helpers of Am. v. Lucas Flour Co., 369 U.S. 95,
103 (1962). The weight of the LMRA is so great that state-law causes of action claiming violations
of a CBA are entirely displaced. See Avco Corp. v. Machinists, 390 U.S. 557 (1968). However,
state courts can retain power over CBAs through concurrent jurisdiction, so long as they apply
federal law. See Charles Dowd Box Co. v. Courtney, 368 U.S. 502 (1962); Local 174, 369 U.S. at
95.
Plaintiffs can avoid § 301’s federal law mandate by alleging state based causes of action
unrelated to the CBA, Thompson v. Hibbing Taconite Holding Co., 2008 U.S. Dist. LEXIS 87045,
9 (D.C. Minn. 2009) (citing Caterpillar, Inc., 482 U.S. at 392), because CBAs are not necessarily
the “only source” of rights conferred upon employees. Hawaiian Airlines v. Norris, 512 U.S. 246,
9
258 (1994). This is true even if the claim’s elements are simultaneously addressed in the CBA. Id.
at 258 (obligations under federal law do not relieve a defendant of state-law based duties).
The Supreme Court rejected the “same analysis” preemption approach once employed by
lower courts. Lingle, 486 U.S. at 409; Bogan, 500 F.3d at 833; see also Bale v. General Telephone
Co., 795 F.2d 775 (9th 1986) (using “same analysis”). The “same analysis” test stands for the idea
that a state-based cause of action is preempted if the claim addresses the same facts as those that
could be asserted under a breach of a CBA. Lingle, 486 U.S. at 409. In dismissing this approach,
the Court recognized that such parallelism in analysis may exist, but it does not render the state-
law claim dependent on the CBA. Id. (Ҥ 301 preemption merely ensures that federal law will be
the basis for interpreting [CBAs], and says nothing about the substantive rights a state may provide
to workers.”).
In the present case, Scott’s DATWA claim is not an assertion that the CBA – or any right
created by it – has been breached. (R. at 5). If the CBA was challenged, then, in accordance with
United Steelworkers, § 301 would clearly mandate the application of federal law. However,
because Scott’s complaint asserts the violation of a state statute, DATWA, there is no reason to
prematurely require preemption. DATWA is neither a creature of the LMRA, nor is it a right
created by the CBA. DATWA stands on its own as a legally independent manifestation of
Minnesota’s legislative will.
Even the existence of the CBA’s Policy governing anabolic steroids and related substances
does not require Scott’s DATWA claim to be preempted. A cause of action regarding a breach of
the Policy and a claim based on the violation of DATWA may require the analysis of the same
facts, but Lingle made clear that this possibility does not require preemption of the state claim.
Even if the Policy – and consequently the CBA – were challenged, the LMRA does not inevitably
10
defeat the state-based DATWA claim because in accordance with Norris, a CBA is not the “only
source” of an employee’s rights. Both a state-based and federal-based claim can co-exist. See
Charles Dowd Box Co., 368 U.S. at 502. As expressed in Lingle, distinct claims based on different
sources of rights, even though potentially requiring parallel analysis, do not foreclose liability
under state law simply because one of the legal rights is conferred by federal law.
b. Scott’s DATWA claim is not preempted by LMRA’s § 301 because DATWA creates an
independent nonnegotiable right that does not require CBA interpretation.
State-law based claims that are “inextricably intertwined” with the terms of a federal labor
contract must give way to analysis under the LMRA. Lueck, 471 U.S. at 213 (“Congress has
mandated that federal law govern the meaning given contract terms.”). Conversely, if a contract’s
terms are not in dispute, the CBA does not require interpretation, and the state-based claim is not
preempted by § 301, Lingle, 486 U.S. at 413 n.12. Courts must look to the heart of the complaint
for what is truly relevant in determining whether a state-based legal claim implicates the CBA.
Gore v. TWA, 210 F.3d 944, 950 (8th Cir. 2000); see Rivet v. Regions Bank, 522 U.S. 470, 475
(1998) (a court may require federal law interpretation of claim when the complaint has been
artfully drafted to avoid a federal question).
However, even in deciding Lueck, the Supreme Court made clear that its holding should
not be read so broadly as to extended § 301’s preemption power to cover independent,
nonnegotiable, state-based duties. 471 U.S. at 216 n. 11. Footnote 11 in Lueck was fleshed-out in
decisions throughout the following decade; in Livadas v. Bradshaw, the Court reiterated that, “we
underscore[] the point that § 301 cannot be read broadly to preempt nonnegotiable rights conferred
on individual employees as a matter of state law.” 512 U.S. 107, 123 (1994).
Determining what state laws are independent, nonnegotiable rights is therefore crucial in
11
deciding whether a claim is substantially dependent on the terms of a federal labor contract. There
is strong support from LMRA’s body of law to generally conclude that (1) state-based common
law torts with a standard of care are negotiable rights dependent upon a CBA; and (2) state-based
statutes create independent, nonnegotiable rights. See Caterpillar, Inc., 482 U.S. 386; Cramer, 255
F.3d 683; Atwater v. NFL Players Ass’n, 626 F.3d 1170 (11th Cir. 2010); Stringer, 474 F.Supp.
894. This assertion is backed by numerous decisions regularly preempting state-based, duty of care
torts and allowing claims alleging violations of state regulations to proceed outside federal law.
See, e.g., Lueck, 471 U.S. 202; Livadas, 512 U.S. 107.
1. Scott’s DATWA claim is not premised on a negotiable right covered by a state
common law causes of action requiring interpretation of the CBA.
Rights and obligations under state law that do not exist independently from a private
agreement are not protected from preemption. Lueck, 471 U.S. at 213. Even if a state creates
common-law torts that are seemingly independent of a CBA, the CBA may be essential in defining
the duties owed in the tort action. Gore, 210 F.3d at 949-50 (alleging negligence, libel and slander,
and invasion of privacy under Missouri law). In ruling that Gore’s claims were preempted by §
301, the Eighth Circuit found the plaintiff’s asserted rights were not nonnegotiable, independent
state-law rights because defining the duties owed under state law were “inextricably intertwined
with the labor contract.” Id. (quoting Lueck, 471 U.S. at 213).
Torts that involve inquiries into standards of a duty of care are generally preempted by §
301 because they require interpretation of the CBA to assess the duty’s scope, thus making them
“substantially dependent” on the CBA. Negligence is one such type of claim because the degree
of care owed cannot be determined without analyzing the unique circumstances surrounding the
parties and CBAs are a pertinent consideration when looking to those relationships. Stringer, 474
12
F.Supp. at 910. See Int’l Broth. of Elec. Workers, AFL-CIO v. Hechler, 481 U.S. 851 (1987);
United Steelworkers of America v. Rawson, 495 U.S. 362 (1998); Atwater, 626 F.3d 1170. Fraud
also requires CBA analysis to determine whether reliance on a misrepresentation is reasonable.
Trustees of the Twin City Bricklayers Fringe Benefits Funds, 450 F.3d at 332; Bale, 795 F.2d at
780 (requiring comparison of pre-employment promises to CBA terms); Holmes v. NFL, 939 F.
Supp. 517, 527(N.D. Tex. 1996). cf. Anderson, 803 F.2d at 959 (fraudulent misrepresentation did
not depend on underlying CBA because the pertinent facts occurred prior to parties entering CBA).
In the present case, Scott’s DATWA claim is not based on Minnesota’s common-law, and
no standard of care is implicated. DATWA derives its authority from Minn. Stat. Ann. § 181.950
(2012) and is a codified law. DATWA’s statutory scheme outlines minimum information
requirements and employee rights without imposing duties of care. See, e.g. Minn. Stat. Ann. §
181.952 (2012).
2. Scott’s DATWA claim is premised on an independent nonnegotiable right and its
obligations are governed by state statutory law.
It is overly-broad to declare that state statutory law always confers independent,
nonnegotiable rights upon employees, however, statutes are given a strong presumption of
independence. The Supreme Court recognizes a state’s power to enact laws protecting its workers
and Ҥ 301 does not grant the parties to a collective-bargaining agreement the ability to contract
for what is illegal under state law.” Cramer, 255 F.3d at 695 (quoting Allis-Chalmers Corp. v.
Lueck, 471 U.S. 202, 212 (1985)). In Cramer, the Eight Circuit ruled that California’s Penal Code
§ 653n (West's Ann.Cal.Penal Code § 653n), which protects employee privacy by prohibiting two-
way mirrors from being installed in restrooms, was not preempted by a CBA between a trucking
company and its employees. 255 F.3d at 695. The court found that freedom from illegality is a
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“nonnegotiable state-law right”, and that installation of two-way mirrors was immutably illegal,
and did not require interpretation of the CBA. Id. (citing Lueck, 471 U.S. at 213).
In 1994, the Supreme Court decided two cases implicating federal labor law’s ability to
displace state statutory law when a valid CBA existed. (Norris, 512 U.S. at 258 (RLA); Livadas,
512 U.S. at 123 (LMRA)) In both Norris and Livadas, the Court ruled that the RLA and the LMRA
did not preempt state statutes. 512 U.S. 107; Norris, 512 U.S. at 260 (the RLA preemption standard
is “virtually identical” to § 301 of the LMRA) (also noting RLA’s long history of recognizing non-
preemption of state-based safety statutes; e.g. Missouri P.R. Co. v. Norwood, 283 U.S. 249, 258
(1931); Terminal R. Asso. V. Brotherhood of R. Trainmen, 318 U.S. 1 (1943). The Livadas opinion,
which clarified Lueck, is significant because as noted by the Ninth Circuit, the court was forced to
reconsider prior case-law which had preempted state statutes. Cramer, 255 F.3d 683.
In Norris, an airline mechanic was fired by his employer for refusing to certify an airplane’s
maintenance record. 512 U.S. at 250 (complaint based on violation of Hawaii’s Whistleblower
Protection Act, Haw. Rev. Stat. §§ 378-61 to 378-69 (1988)). The claim was not preempted
because it required a purely factual inquiry into the retaliatory motive of employer Id. at 266). In
Livadas, a discharged store clerk requested prompt payment for wages earned during employment
as required by state law, Cal. Lab. Code Ann. § 203 (West 1989). Livadas, 512 U.S. at 125 (ruling
that California statute governing separation pay was a nonnegotiable state right). The Court
determined that the only issue raised was a violation of the statute, which was a question of state
law independent of the CBA between the clerk’s union and her employer. Id.
As stated earlier, CBA’s that govern what is simultaneously covered by state statute do not
require § 301 preemption if only the statute is challenged. Lingle, 486 U.S. at 409. A CBA that
incorporated an anti-drug policy was irrelevant to allegations that an employer violated a state’s
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drug testing statute, because Ҥ 301 does not grant the parties to a [CBA] the ability to contract for
what is illegal under state law." Karnes v. Boeing, 335 F.3d 1189, 1194 (10th Cir. 2003) (plaintiff
did not need to specify a specific section of Okla. Stat. tit. 40 § 562 violated). Minnesota's DATWA
has already been recognized to be a non-negotiable state law right that does not require
interpretation of a CBA. Thompson v. Hibbing Taconite Holding Co., 2008 U.S. Dist. LEXIS
87045, 11-12 (D.C. Minn. 2009) (claim failed because plaintiff pled a breach of the CBA within
the DATWA count).
Williams v. NFL is especially relevant given how similar the facts are to the ones presently
before the Court. 582 F.3d 863 (8th Cir. 2001). In Williams, Pat Williams and Kevin Williams
were National Football League (NFL) players employed by a team based in Minnesota. Id. at 870.
The players, parties to a CBA, ingested a dietary supplement that contained a banned substance
according to their CBA’s incorporated drug policy. Id. Following a drug test, the players were
disciplined by the NFL and suspended for a portion of the upcoming season. Id. The players
challenged their suspension pursuant to the grievance mechanism established in the CBA, but their
suspensions were affirmed by an independent arbitrator. Id. at 871.
Following the arbitrator’s determination, the player’s union filed a complaint in federal
court alleging a breach of § 301. Id. at 872. The players filed an amended complaint asserting that
the NFL violated Minnesota's DATWA and Minnesota's Consumable Products Act (CPA) Minn.
State. §§ 181.938. Id. The district court found the DATWA and CPA claims to be independent of
the CBA and not preempted by § 301. Id. at 873.
On appeal, the Eighth Circuit affirmed the district court’s ruling and found that the
DATWA and CPA claims did not require federal preemption. Id. at 874 (ruling that the claims
were asserted on state granted rights and interpretation of the CBA was unnecessary). The court
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rejected several arguments advanced by the NFL. First, it disagreed that a party to a CBA is
preempted from making a DATWA claim because it should compel the court to determine if the
CBA “meets or exceeds” DATWA’s protections. Id. at 876 (a CBA’s compliance with DATWA
only limits the number of potentially successful claims). Next, it disagreed that policy
considerations compel preemption. Id. at 877-78 (relying on Cramer, 255 F.3d at 695 n.9) “[t]he
LMRA certainly did not give employers and unions the power to displace any state regulatory law
they found inconvenient."). Finally, it rejected a waiver theory. Id. at 880 (rights independent of a
CBA cannot be waived). It was recognized that “in sum, the Players' DATWA claim is predicated
on Minnesota law, not the CBA or the Policy. . . thus, . . . not preempted by section 301.” Id. at
878.
This Court is faced with a single issue, whether § 301 of the LMRA preempts Scott’s claim
asserting that the NHL violated DATWA. (R. at 5). The law is clear; Scott’s DATWA claim is not
preempted by § 301.
DATWA is a statutory claim and should be presumed to grant Scott an independent,
nonnegotiable right that is distinct from any right found in the CBA. Across the Federal Courts of
Appeals, statutes like DATWA have been found to confer independent rights, because as Cramer
stated in language borrowed from Lueck, Ҥ 301 does not grant the parties to a collective-
bargaining agreement the ability to contract for what is illegal under state law.” Cramer, Livadas,
Karnes, Thompson, and Williams were cases where state statutory laws were deemed to confer
nonnegotiable rights on employees who were bound by a CBA. Apart from LMRA, the RLA, with
its similar objectives to the LMRA, did not preempt state statutory law in Hawaiian, Norwood, or
Terminal.
Additionally, The Eighth Circuit and its lower courts have already ruled that pure DATWA
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claims survive § 301’s preemption. Although the DATWA count in the Thompson complaint failed
because of a mistake in pleading, the District Court of Minnesota made a point to state that
DATWA confers independent, nonnegotiable rights on employees. In Williams, the district court
found DATWA to be sufficiently independent of a CBA and ruled that the DATWA claim was
not preempted § 301 even though a CBA governed the heart of DATWA’s protections. The Eighth
Circuit affirmed that decision.
For Scott’s DATWA claim, it is difficult to stray from the well-reasoned analysis employed
in Williams. Both Scott and the Williams’ were employed by a professional sports team based in
Minnesota. They were both parties to a CBA that governed illicit substances, and they both failed
their drug tests. Most importantly, Scott alleges a violation of DATWA, just as the Williams’ did.
The NFL in Williams made similar arguments to the ones adopted in The United States District
Court for The Southern District of Tulania’s opinion, which ruled that Scott’s claim was preempted
by § 301. The Eighth Circuit rejected the NFL’s arguments and The Tulania Court of Appeals
reversed its lower court’s decision. Thus, it seems that for the NHL’s argument to prevail, it must
be argued that both appellate courts applied the wrong analysis.
However, it is clear that The Tulania Court of Appeals and the Eighth Circuit’s Williams
decision remained true to the principles first established in Lueck. The CBA that binds Scott, the
NHLPA, and the NHL does not require interpretation. DATWA stands on its face and the Policy
only limits potential claims in accordance to Livadas’ teachings. Whether the Policy “meets or
exceeds” DATWA is only relevant if the CBA is challenged. The question before this Court is not
whether the CBA has been violated, the question is whether Scott’s DATWA claim is preempted
by § 301. While federal law favors uniformity, CBA provisions should not be given the force of
federal law by allowing parties to contract away minimum state protections; to do so would create
17
a race to the bottom and eviscerate a state’s sovereign right to establish minimum safety standards.
DATWA is a minimum state protection that confers Scott with independent, nonnegotiable rights,
for which interpretation of the CBA is not required; and because § 301 of the LMRA was created
to govern disputes premised on a CBA, Scott’s DATWA claim is not preempted by § 301.
II. The arbitration award in this case is contrary to New York’s law governing
fiduciary duties, going so far as to condone the breach of such duty by Schrute
and the NHL.
Arbitrator awards which are contrary to public policy are overturned by this Court. New
York law governs this CBA where federal law is silent. New York law recognizes fiduciary
relationships and protects individuals from their failure. Schrute and the NHL had a fiduciary
responsibility to inform the players of all information relevant to their health and the regulation of
banned substances. Schrute and the NHL failed to inform the players of material information
within the scope of that duty. New York law recognizes such a breach as actionable. Therefore,
the arbitrators award is contrary to well defined public policy and should be vacated.
a. This Court overturns arbitration awards which are contrary to Public Policy.
A court's refusal to enforce an arbitrator's award under a collective-bargaining agreement
because it is contrary to public policy is a specific application of the more general doctrine, rooted
in the common law, that a court may refuse to enforce contracts that violate law or public policy.
W.R. Grace & Co. v. Rubber Workers, 461 U.S. 757, 766, (1983). “That doctrine derives from the
basic notion that no court will lend its aid to one who founds a cause of action upon an immoral
or illegal act. . ..” United Paperworkers Int'l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 42
(1987). This is further justified by the inescapable fact that the “public's interests in confining the
scope of private agreements to which it is not a party will go unrepresented unless the judiciary
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takes account of those interests when it considers whether to enforce such agreements.” United
Paperworkers Int'l Union, 484 U.S. at 42.
It is therefore well settled case law that “[i]f the [Policy] as interpreted by
[the arbitrator] violates some explicit public policy, [courts] are obliged to
refrain from enforcing it.” W.R. Grace & Co., 461 U.S. at 766. However,
“[s]uch a public policy ... must be well defined and dominant, and is to be
ascertained by reference to the laws and legal precedents and not from
general considerations of supposed public interests.” Id.
Just four years after W.R Grace, the Court clarified its ruling and addressed the determination facts.
Because the parties have contracted to have disputes settled by an arbitrator chosen by them
rather than by a judge, it is the arbitrator's view of the facts and of the meaning of the contract that
they have agreed to accept. Courts thus do not sit to hear claims of factual or legal error by an
arbitrator as an appellate court does in reviewing decisions of lower courts. To resolve disputes
about the application of a collective-bargaining agreement, an arbitrator must find facts and a court
may not reject those findings simply because it disagrees with them. The same is true of the
arbitrator's interpretation of the contract. So, too, where it is contemplated that the arbitrator will
determine remedies for contract violations that he finds, courts have no authority to disagree with
his honest judgment in that respect. If the courts were free to intervene on these grounds, the speedy
resolution of grievances by private mechanisms would be greatly undermined. Misco, 484 U.S. at
37–38.
This Court has further instructed that “the public policy exception is narrow....” E.
Associated Coal Corp. v. United Mine Workers, 531 U.S. 57, 63 (2000). But, the Court’s “authority
to invoke the public policy exception is not limited solely to instances where the arbitration award
itself violates positive law.” E. Associated Coal Corp., 531 U.S. at 63. Indeed, the Court has
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authority to overturn any award which violates “the principles set forth in W.R.
Grace and Misco.” Id.
Those principles can be distilled into a rule of three elements: (1) “If the contract as
interpreted violates some explicit public policy, [the Court] obliged to refrain from enforcing it.”
W.R. Grace & Co., 461 U.S. at 766. (2) The public policy must be well-defined, dominate, and
must be established by reference to law or legal precedent. Id. (3) Courts must not sit as fact finders
or makers of any inferences, those are made by the arbiter and must be respected. Int'l Bhd. of
Elec. Workers, Local 97 v. Niagara Mohawk Power Corp., 143 F.3d 704, 716 (2d Cir. 1998).
b. New York recognizes a Fiduciary Duty.
To the extent that Federal law does not govern, the CBA defers questions to the internal
law of New York. New York Case law is quite clear in recognizing the fiduciary relationship and
holding accountable those who violate such a relationship. “A fiduciary relationship exists
between two persons when one of them is under a duty to act for or to give advice for the benefit
of another upon matters within the scope of the relation.’” EBC I, Inc. v. Goldman, Sachs & Co.,
5 N.Y.3d 11, 19; (2005), (quoting Restatement [Second] of Torts § 874, Comment a). “It exists
only when a person reposes a high level of confidence and reliance in another, who thereby
exercises control and dominance over him” People ex rel. Cuomo v. Coventry First LLC, 13
N.Y.3d 108, 115 (2009).
A cause of action for a violation of this relationship is also recognized in New York. “The
elements of that cause of action are (1) the existence of a fiduciary duty, (2) misconduct by the
defendant, and (3) damages directly caused by the defendant's misconduct (see Saul v. Cahan, 153
A.D.3d 947).” Dineen v. Wilkens, 64 N.Y.S.3d 56, 58 (N.Y. App. Div. 2017).
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Aiding and abetting such a violation of trust has a recognized cause of action in New York
as well. Such a claim for aiding and abetting a breach of fiduciary duty requires: (1) a breach by a
fiduciary of obligations to another, (2) that the defendant knowingly induced or participated in the
breach, and (3) that [the] plaintiff suffered damages as a result of the breach” (Tri–Star Light.
Corp. v. Goldstein, 151 A.D.3d 1102, 1107, quoting Kaufman v. Cohen, 307 A.D.2d 113, 125).”
Dineen, 64 N.Y.S.3d at 58–59.
A fiduciary relationship is “necessarily fact-specific” and is also “grounded in a higher
level of trust than normally present in the marketplace between those involved in arm's length
business transactions” EBC I, Inc. v. Goldman, Sachs & Co., 832 N.E.2d 26 (N.Y. Ct. App. 2005).
While a contractual relationship is not required for a fiduciary relationship, “if [the parties] do not
create their own relationship of higher trust, courts should not ordinarily transport them to the
higher realm of relationship and fashion the stricter duty for them.” Northeast Gen. Corp. v.
Wellington ADV., 624 N.E.2d 129 (N.Y. Ct. App. 1993). But where a contract is present,
“[g]enerally. . . courts look to that agreement to discover ... the nexus of [the parties'] relationship
and the particular contractual expression establishing the parties' interdependency.”
One duty of the Fiduciary is the duty to disclose. This duty is recognized in New York. A
“duty to disclose generally arises when one party has information that the other party is entitled to
know because of a fiduciary . . . relation of trust and confidence between them.” Grandson v.
Merrill Lynch & Co., 147 F.3d 184, 189 (2d. Cir. 1988). Such a duty to disclose will arise where
a “fiduciary relationship exists or when a party has superior knowledge not available to the other.
...” Callhan v. Callhan, 127 A.D.2d 298, 300 (N.Y. App. Div. 1987).
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c. A Fiduciary Relationship existed between Schrute and the players who were part of the
collective bargaining agreement.
A Fiduciary Relationship existed between Schrute and the players who were part of the
collective bargaining agreement. The players, the NHL, and by extension Schrute, created a
relationship via the CBA. This relationship governed an entire universe of issues that arise between
players and a national professional sports league. Part of that agreement addressed monitoring the
health and well-being of the players, as well as the player’s adherence to the strict drug-testing
policies of the league. It is here where the fiduciary relationship between the players and Schrute
arises. It is also here that the other league officials who knew Schrute was withholding information
from the players became aiders and abettors in a breach of fiduciary duty.
The NHL tests its players for controlled substances and performance enhancing drugs.
These tests also detect masking agents and other chemicals which may result in a false positive.
This complex testing program for a litany of banned substances is backed by a harsh strict liability
clause for players. Because the stakes are so high and the tight rope to be walked so complex, the
NHL and the players agreed to place an expert in charge of helping the players abide by the rules
and in keeping themselves healthy. That expert would also be in charge of reporting to the league
any violations of the Policy. Schrute was this expert. He was trusted to ensure that the players had
all the knowledge available to them to navigate the complex world of bio-chemistry and
physiology, areas not typically in the expertise of a layperson.
The CBA states that Schrute has an express duty to educate NHL players about prohibited
substances. The agreement goes on to state that “in addition, [Schrute] will make himself available
for consultation with players and club physicians to, oversee violated protocols, oversee the
development of educational materials, and participate in research on anabolic steroids.” (R. at 19).
22
Schrute expressly promised in a memorandum to all NHL players the he would continue to supply
NHL players with information throughout the year. . .” concerning sleep aids. (Id.). This never
happened.
The CBA also informs the players that Schrute and the other administrators will make
necessary efforts to “educate and warn players about the risks involved in the use of supplements.”
(Id.). Schrute testified that his efforts to “educate and warn” were part of his continuing obligation
to the players. (R. at 20).
The toxicologist employed under the CBA warned Schrute that Narcotussin had been
identified in SuperDope, but was not present on the list of ingredients. Schrute was warned that
this ingredient may be harmful to the player’s health and would lead to positive test results for
banned substances. The Vice President of Law and Labor Policy at the NHL also knew of the
presence of this substance.
However, no one informed the players of this material information. Schrute testified that
he did not disclose this information because he was afraid that NHL players might come to expect
that he would notify them about other harmful banned substances in the future. The players would
not come to expect this, they already did. Schrute is not liable for failing to be omniscient. He has
no duty to disclose what he does not know. Nor do the players expect such unreasonable abilities.
But, Schrute does have a duty to inform the players about what is known.
Instead of disclosing that SuperDope contained a banned substance and should absolutely
be avoided, Schrute, Halpert, and the NHL issued an over-broad warning based on “maybes” and
“mights”. The memo issued to players advised them to avoid supplements claiming to induce
23
deeper sleep. And in a separate notice players were told they are not allowed to endorse the
company who manufactures SuperDope.
The NHLPA entered into an agreement with the NHL such that the NHL was under a duty
to act for, or to give advice for, the benefit of the players upon matters within the scope of their
relationship. The Players reposed a high level of confidence and reliance in Schrute and the NHL,
who thereby exercised control and dominance over them within the scope of that relation. From
this relationship, Schrute and the NHL had a duty to disclose facts given their superior knowledge
and expertise. Schrute knew about SuperDope, the NHL knew about SuperDope, and yet, chose
not to tell the players who had entrusted them with their health and lively hood.
The fiduciary relation, the fiduciary duty to disclose, and the actionable cause for breach
of these duties is well settled case law in New York. The people of New York have spoken and
determined that in these special instances of trust the fiduciary must be held to a higher standard.
It is the public policy of the State.
This Court overturns arbitrator awards which are contrary to public policy, so long as that
public policy is well defined in legal precedent. Herein, there has been no appeal to anything other
than well-defined case law. To let this arbitrator award stand would flout an entire area of
important legal framework in the state of New York and betray those prudent principles laid out
in W.R. Grace. The arbitrators award found a breach of contract, but any potential breach was
induced by a fiduciary’s failure to uphold his duty. In an increasingly complicated world each of
us must emplace more and more of our confidences in others who assumed responsibilities outside
of our areas of expertise. The public needs strong protections in this arena and New York has
imposed them via their body of law. The arbitrator in this case has no right to trample upon that
wisdom.