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ARBITRATION AWARD IN DISPUTE OVER TELEVISION BROADCAST FEES FOR MAJOR LEAGUE BASEBALL PROPERLY VACATED BASED UPON COUNSEL’S CONFLICTS OF INTEREST, SECOND ARBITRATION SHOULD NOT BE MOVED TO A DIFFERENT FORUM 1ST DEPT.

The First Department, in an opinion consisting of a two-justice concurrence, a separate one-justice concurrence and a two-justice partial dissent, determined that the arbitration of a dispute concerning the television broadcast fees for major league baseball was tainted by counsel’s conflicts of interest (and the award was properly vacated on that ground). The bulk of the opinions dealt with whether the court should order that the second arbitration be held in a different forum. The majority concluded it should not:

Pursuant to the negotiated terms of the parties’ written agreement, the subject arbitration, governed by the Federal Arbitration Act (FAA) (9 USC § 1 et seq.), was initiated before the Revenue Sharing Definitions Committee (RSDC) of Major League Baseball (MLB), to resolve a contractual dispute over telecast rights fees between TCR Sports Broadcasting Holding, LLP d/b/a the Mid-Atlantic Sports Network (MASN) and the Baltimore Orioles, and the Washington Nationals. For the reasons stated herein, we find that the arbitration award issued by the RSDC on June 30, 2014 was correctly vacated based on “evident partiality” (9 USC § 10[a][2]) arising out of the Nationals’ counsel’s unrelated representations at various times of virtually every participant in the arbitration except for MASN and the Orioles, and the failure of MLB and the RSDC, despite repeated protests, to provide MASN and the Orioles with full disclosure or to remedy the conflict before the arbitration hearing was held. However, even if this Court has the inherent power to disqualify an arbitration forum in an exceptional case, on the record before us there is no basis, in law or in fact, to direct that the second arbitration be heard in a forum other than the industry-insider committee that the parties selected in their agreement to resolve this particular dispute, fully aware of the role MLB would play in the arbitration process.

Contrary to the view of the dissent, there has been no showing of bias or corruption on the part of the members of the reconstituted RSDC, and the Nationals will use new counsel at the second arbitration. Speculation that MLB will dictate the outcome of the second arbitration by exerting pressure on the new members of the RSDC does not suffice to establish that they will not exercise their independent judgment or carry out their duties impartially, or that the proceedings will be fundamentally unfair. Matter of TCR Sports Broadcasting Holding, LLP v WN Partner, LLC, 2017 NY Slip Op 05689, 1st Dept 7-13-17

ARBITRATION (ATTORNEYS, CONFLICTS OF INTEREST, MAJOR LEAGUE BASEBALL, ARBITRATION AWARD IN DISPUTE OVER TELEVISION BROADCAST FEES FOR MAJOR LEAGUE BASEBALL PROPERLY VACATED BASED UPON COUNSEL’S CONFLICTS OF INTEREST, SECOND ARBITRATION SHOULD NOT BE MOVED TO A DIFFERENT FORUM 1ST DEPT)/CONTRACT LAW (ARBITRATION, ATTORNEYS, CONFLICTS OF INTEREST, MAJOR LEAGUE BASEBALL, ARBITRATION AWARD IN DISPUTE OVER TELEVISION BROADCAST FEES FOR MAJOR LEAGUE BASEBALL PROPERLY VACATED BASED UPON COUNSEL’S CONFLICTS OF INTEREST, SECOND ARBITRATION SHOULD NOT BE MOVED TO A DIFFERENT FORUM 1ST DEPT)/ATTORNEYS (CONFLICTS OF INTEREST, MAJOR LEAGUE BASEBALL, ARBITRATION AWARD IN DISPUTE OVER TELEVISION BROADCAST FEES FOR MAJOR LEAGUE BASEBALL PROPERLY VACATED BASED UPON COUNSEL’S CONFLICTS OF INTEREST, SECOND ARBITRATION SHOULD NOT BE MOVED TO A DIFFERENT FORUM 1ST DEPT)/CONFLICT OF INTEREST (ATTORNEYS, MAJOR LEAGUE BASEBALL, ARBITRATION AWARD IN DISPUTE OVER TELEVISION BROADCAST FEES FOR MAJOR LEAGUE BASEBALL PROPERLY VACATED BASED UPON COUNSEL’S CONFLICTS OF INTEREST, SECOND ARBITRATION SHOULD NOT BE MOVED TO A DIFFERENT FORUM 1ST DEPT)/BASEBALL (ARBITRATION, ATTORNEYS, CONFLICTS OF INTEREST, MAJOR LEAGUE BASEBALL, ARBITRATION AWARD IN DISPUTE OVER TELEVISION BROADCAST FEES FOR MAJOR LEAGUE BASEBALL PROPERLY VACATED BASED UPON COUNSEL’S CONFLICTS OF INTEREST, SECOND ARBITRATION SHOULD NOT BE MOVED TO A DIFFERENT FORUM 1ST DEPT)

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