Tuesday, July 31, 2012

UPDATE to include discussion of Bryce Brentz injury; Ryan Sweeney and injuring hand by punching door: is it grounds for Disqualified List?

Bryce Brentz
UPDATE Feb. 9 2013: we're learning today from WEEI.com's Alex Speier that the Red Sox now have another player who has been injured outside of playing the game and in questionable circumstances: about a month ago, prospect Bryce Brentz accidentally injured himself while cleaning a hand gun.  A bullet went into his leg.  

Brentz is lucky.  It doesn't appear the injury will hurt his baseball career.  But if it does for a period of time, it would be interesting to see if Red Sox disqualify him instead of disable him.  My guess is they disable him rather than disqualify him, since this was an accident and not a result of him losing his temper.  For more analysis of these two lists, please read the post below on Ryan Sweeney.

And, yes, Brentz is making his second appearance on Sports Law Blog.  He was  the player we talked about in our post "Bryce Brentz and Teams Requesting that Players Use Medical Devices for Abnormally Good Health"

* * *
ORIGINAL POST ON RYAN SWEENEY


In the eight inning of last night's Red Sox -Tigers game, Red Sox outfielder Ryan Sweeney became upset after grounding out. So angry that after returning to the dugout he let a door feel the brunt of his frustration, which caused a hand injury:

* * *
Ryan Sweeney will need X-rays after he punched a door in the dugout following a groundout in the eighth inning of the Sox' 7-3 win over the Tigers. Sweeney injured the knuckle on his left pinkie and had to come out of the game when he couldn't make his warm-up throws in the top of the ninth inning.
According to a team source, the outfielder -- who is hitting .260 with a .303 OBP and .373 slugging mark in 63 games -- is likely to require a DL stint for the injury.
From: Mike Petragalia, WEEI.com
* * *
Should Sweeney be placed on the disabled list -- or the disqualified list?

The seldom-used disqualified list is for players who, according to the CBA, "fail to render services to his club." While disqualified, a player is not paid his salary and is removed from the roster, though the player can workout with his team and receive healthcare benefits. On behalf of a disqualified player, the Major League Baseball Players' Association can file a grievance to fight the disqualification. The grievance procedure may eventually lead to a hearing before three-arbitrators.

The disqualified list is purposelessly defined in vague terms, since its definition gives teams flexibility in interpreting it. Teams are hesitant to use it, however, because it likely damages the team's relationship with a player. It may also damage the team's relationship with the player's agent, which in some instances may be a big deal.

Because of these downside for teams, few players have been placed on the disqualified list in recent years. Two years ago the Mets placed Francisco Rodriguez on the disqualified list after he injured his hand in a fight with his girlfriend's dad. Last year for SI.com, I wrote about the Cubs placing Carlos Zambrano on the disqualified list for 30 days after he bizarrely walked out on his team and claimed to be retiring. Earlier this month the Cleveland Indians placed minor league pitcher Nick Hagadone on minor league baseball's disqualified list for a self-inflicted injury to his pitching hand after he pitched poorly in a game. Teams sometimes use the disqualified list as a threat - in 2006 the Nationals threatened to disqualify Alfonso Soriano after he refused to play the outfield. The threat worked.

Should the Red Sox use it for Sweeney?

Reasons for Yes

Punching a door or any wall shows terrible judgment, if for no other reason than the fact that it is completely predictable that you can, and probably will, injure your hand by doing so. It isn't like Sweeney threw his bat in frustration and it somehow hit a wall and bounced back at him, or that he suffered some other freak injury. He punched a door.

Sweeney didn't act in the heat of the moment - there was at least 30 seconds between his ground out and his punching for him to cool down. The fact that he had time to think about what he was doing, and still did it, makes it worse.

Sweeney, who Baseball America called the White Sox's No. 1 prospect in 2006, is not new to the game. He's in his 7th MLB season and is 27-years-old. Punching a wall might be more excusable for a rookie, but not for a seasoned vet.

Sweeney's injury makes it much harder for the Red Sox to trade him before today's deadline. He's been rumored to be on the trading block (see NESN.com). If he's placed on the disabled list or disqualified list, he can't be traded absent the commissioner's approval. Even if he's not put on any list, his already low trade value (he's a corner outfielder who has 0 home runs in 204 at bats) has likely plummeted even lower. On today's Dennis and Callahan show on WEEI, it was even discussed that Sweeney may have intentionally injured his hand to not be traded - if so (and that seems unlikely and would also be hard to prove), the disqualified list would be even more appropriate.

Reasons for No

Unlike Carlos Zambrano, who had a long history of strange behavior, Sweeney has never attracted controversy and seems to be a good teammate. His temper just got to him and he did a foolish thing. To his credit, Sweeney has acknowledged responsibility and fault. He admits he let his team down (see Boston.com). It isn't like Sweeney is refusing to acknowledge he did something wrong.
If the Red Sox disqualify Sweeney, they will almost certainly have to deal with a grievance filed by the MLBPA, which will argue that the penalty is excessive, especially for a player without a track record for misbehavior. Keep in mind, the MLBPA does not want a precedent of teams disqualifying players, since other teams could do the same in the future. They would fight for Sweeney, if not so much for him than for their collective membership.

Moreover, as sports attorney/professor and MLBPA certified agent Jim Masteralexis tells me on Twitter, Kevin Brown and Doyle Alexander were not disqualified after they punched walls and were injured. While the Red Sox could argue those instances do not preclude them from punishing Sweeney, they are still persuasive precedent.

Although Sweeney is a free agent at the end of the season, the Red Sox would damage its relationship with him going forward by disqualifying him. The same is probably true of the team's relationship with Sweeney's agent, Larry Reynolds, who has a pretty impressive list of clients. Along those lines, would free agents be less likely to sign with the Sox because of how it treats Sweeney?

Verdict: I doubt the Red Sox will disqualify Sweeney, but if they did, I believe they would have sufficient grounds.

Monday, July 30, 2012

Penn State Death Penalty: Was It Ever Really An Option? (The Antitrust Problem)

Several recent posts on this blog have analyzed the NCAA's punishment of Penn State University in light of rumors that the NCAA would have given Penn State a four year death penalty if it had not agreed to the NCAA's alternative sanctions. (See here, here, and here). What almost nobody is talking about, however, is that the NCAA's 'death penalty' sanction may very well have been illegal under Section 1 of the Sherman Act. Thus, if the NCAA had attempted to shut down Penn State's football program, an interesting antitrust challenge could have potentially followed.

For those less familiar with antitrust law, Section 1 of the Sherman Act states that "[e]very contract, combination ... or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal." In practice, this section of antitrust law is not interpreted to literally prohibit all contracts signed among competing businesses. However, the courts have consistently interpreted Section 1 of the Sherman Act to strike down contracts that are deemed unreasonable in terms of their economic effects.

As a private association composed of member schools that compete against each other for fans and players, all decisions reached by the NCAA or its employees are, in essence, horizontal agreements subject to Section 1 review. In addition, any agreement by the NCAA to ban a competitor from the marketplace would be defined as a "group boycott," which falls among the most troublesome types of agreements subject to Section 1 scrutiny.

The U.S. Supreme Court has already once prevented the enforcement of an NCAA bylaw under Section 1 of the Sherman Act that sought to exclude certain competitors from the college football marketplace. In that case, National Collegiate Athletic Association v. Board of Regents, the high court held that an NCAA bylaw intended to ban colleges that appeared in more than a certain number of televised football games was illegal because it "curtail[ed] output and blunt[ed] the ability of [NCAA] member institutions to respond to consumer preference."

Logically, the same argument could be made for disallowing the NCAA 'death penalty.' Although on a moral level the egregious wrongdoing that occurred at Penn State University cannot be compared to a school merely seeking to play additional televised football games, under antitrust law the reasons behind the boycott are entirely irrelevant. All that matters is the economic effect. In other words, as the Supreme Court explained in its 1978 decision National Society of Professional Engineers v. United States, "the purpose of [antitrust] analysis is to form a judgment about the competitive significance of the restraint; it is not to decide whether a policy favoring competition is in the public interest."

While it is true that the U.S. Court of Appeals for the Fifth Circuit had rejected an earlier antitrust challenge arising out of the NCAA's first attempt to enforce its 'death penalty' (that time against Southern Methodist University), the posture of that case was a bit different. In that challenge, McCormack v. National Collegiate Athletic Association, the claim was brought by the schools' alumni, football players and cheerleaders, rather than by the boycotted school itself. Thus, the court determined that the plaintiffs lacked antitrust standing to bring suit, as well as that their challenge was merely at attack of reasonable athlete-eligibility rules. These conclusions would have been far harder to sustain if the suit had been brought by a school, challenging the financial implications of a boycott on their football revenues and merchandise sales.

Of course, antitrust law leaves open the possibility of other less restrictive forms of punishment against Penn State University that might indirectly lead to the same result. For example, any individual school can legally make the independent decision not to play Penn State University without running the risk of a legal issue. If all schools independently reach the same conclusion, there would be no antitrust violation. In addition, perhaps an entire conference such as the Big Ten could even decide to ban Penn State without significant antitrust risk if that conference is found to lack "market power."

Yet, for the very reason that the NCAA death penalty is often described by advocates as the 'ultimate sanction,' a court would likely not allow that result. Thus, no matter how abhorrent the leadership may have acted at Happy Valley, a court would not be likely to allow that to justify the entire college football industry collectively driving Penn State University football out of business.

Adrien's Groaner

Adrien's Groaner
The Questions That Arose from the Last Minute Wrangling to Preserve Adrien Broner vs. Vicente Escobedo

This past Saturday, the now former WBO Super Featherweight champion Adrien (The Problem) continued his recent string of impressive performances with a fifth round TKO of Vicente Escobedo. Not as impressive, however, was what happened both before and after Broner weighed in for the bout. Broner weighed in at 133 ½ pounds for his anticipated WBO title defense and subsequently forfeited both his title and $60,000 of his purse (half of which went to Escobedo, the other half to the Ohio commission). The failed weigh-in took place after Broner posted several pictures of recent desserts to his Twitter feed and publicly stated that the Escobedo fight would be his last at 130 pounds. Over the following day, it appeared that Broner’s HBO main event was in jeopardy altogether, as Escobedo threatened to pull out after a second failed weigh-in before reportedly receiving over$50,000 in additional pay out of Broner’s purse. While there has been much outrage in recent years, notably as to Joan Guzman and Jose Luis Castillo’s repeated failures to make weight, the controversy surrounding the Broner-Escobedo seemed to quickly dissipate as the focus turned more to Broner’s obvious pound-for-pound level gifts after his hammering of Escobedo. Nonetheless,what questions were raised (and what lessons can be learned) by the near-dismantling of an entire HBO show over a weight dispute? A quick look follows.

To view the entire article, please go to: http://www.8countnews.com/news/125/ARTICLE/5672/2012-07-23.html.

Friday, July 27, 2012

U.S. Court of Appeals for the Eighth Circuit 2012 Judicial Conference


I'm honored to be a speaker at this year's U.S. Court of Appeals for the Eighth Circuit Judicial Conference. The conference will be held next month, from August 8 to August 10, in Kansas City. This year's conference title is "“Landmark Litigation in the Eighth Circuit Courts: Views from the Bench, Bar and Academy”. The conference agenda can be read here and information on attending can be found here.

More so than any other federal circuit in recent years, the Eighth Circuit has played a pivotal role in the development of U.S. sports law. This includes deciding Tom Brady et al. v. NFL, a decision which led to the NFL and NFLPA ending the 2011 NFL Lockout.

I'll be on the labor relations in professional sports law panel with Indiana University Dean Gary Roberts, who previously represented the NFL, and former St. Louis Rams Executive VP and General Counsel Bob Wallace. Judge Mary Vasaly will moderate the panel, which will begin at 9:15 am on Thursday August 9.

Labor Relations in Professional Sports:
Does Federal Law Level the Playing Field


Introductions:

Judge Mary R. Vasaly
Minnesota Judicial Branch
Fourth Judicial District

Panel:

Professor Michael McCann
Professor of Law & Director of Sports Law Institute
Vermont Law School

Dean Gary R. Roberts
Gerald L. Bepko Professor of Law
Robert H. McKinney School of Law
Indiana University

Mr. Robert E. Wallace, Jr.
Partner
Chair, Sports Law Group
Thompson Coburn LLP
The conference has a number of distinguished speakers with sports law ties, including Paul Clement, who argued for the NFL in Brady v. NFL and for NBA players in Carmelo Anthony et al. v. NBA, and Ted Olson, who argued for the NFLPA in the Brady case. Other notable speakers include U.S. Supreme Court Justice Samuel Alito, Baylor University President Dean Ken Starr, who served as Independent Counsel while Bill Clinton was President, and Ohio State Law Professor Douglas Berman.

Why have nationality rules for Olympics?

The New York Times has a thoughtful debate on nationality rules for the Olympics. Are they even necessary? Could the Olympics take place without them - where the best athletes play regardless of their country?

Law Professors Peter Spiro, Ayelet Shachar, Ian Ayres, Jim Nafzinger, and former IOC official Jean-Loup Chappelet all contribute.

Thursday, July 26, 2012

Where in the World Is Your Finance Penetration?

Way back in 1971, C.P. Snow wrote about technology in the New York Times. He said, "Technology... is a queer thing. It brings you great gifts with one hand, and it stabs you in the back with the other."
Many dealers are voicing that sentiment these days. Far too few have done anything about it. Some have learned to use computer software with skill. They use the apps on iPhones, iPads, and Blackberries. They have created an effective Web site. They use Facebook and Twitter and LinkedIn for social networking. For others, these are merely words and technologies that test their ability to conduct both business and their private lives. Dealers, already feeling the brunt of the two-plus year recession and massive changes in the car industry, are becoming increasingly concerned about their ability to not only keep up, but to even remain in the playing field.
Why should dealers bother with such things? Isn't the old way good enough? Nope!
Customers who always shopped on the lot are now shopping on the Internet before they take a step toward a dealership. They've researched every model in their price range and with the features they want. They've read a dozen articles about how to get the best deal. They've become more savvy than many sales people hired by dealerships; they know their credit score; they know where they can find the best price on insurance, window tinting, undercoating, you name it. Everything once sold to them by a finance officer from the menu is for sale on the Internet.

Are you one of the dealerships where handwringing has become a daily pastime? Have you taken a close look at your bottom line? Have you noticed what would happen to your finance portfolio if you removed your sub-vent rated and nonprime customers? Have the numbers of your prime-financing customers dwindled to an all-time low? Perhaps you haven't seen the drop in your captive financing yet, but beware, it's coming just as surely as the first snowstorm.
Snow was right, back in 1971! The Internet can either become a beacon for drawing in more satisfied customers to your dealership and vastly increase your bottom line, or it can stab you in the back. It can be your best friend or your worst enemy. How?
Statistics show that 80% of car customers go online before they make the decision to buy and before they come to your dealership. What are they researching? Brands, models, features and, most of all, prices. Most of all, prices. The majority of Americans in today's economy are deeply concerned about their budget. They have a fixed amount to spend on a car payment and all the other expenses involved in owning it. The vehicle they choose must fit within that fixed figure. They cannot afford to buy on whim or to make a careless mistake. They won't take the chance of being bamboozled into buying things they don't want, don't need, and can't afford by a fast-talking sales or finance manger
Where do these savvy customers get their information? One of their first sources is Edmunds, the friendly consumer-shopping guide. Edmunds has never been and still isn't the dealer's friend. Edmunds does whatever is necessary to achieve the sale on vehicles and products from the Internet shopper... and then refers these buyer to specific retailers to obtain a fee! Banks. Finance companies. Insurance companies. You name it.
Don't let them get a strangle hold on your customers! If you haven't already checked this article on Edmunds.com, perhaps you should do so right now!
Confessions of an Auto Finance Manager In the Back Rooms of America's Car Dealerships By Philip Reed, Senior Consumer Advice Editor and Nick James
Introduction
"Congratulations, you're getting a great deal!" the car salesman says, pumping your hand. "Let's sign the paperwork and you'll be on your way in your new car!"
At first you're relieved - the negotiating is over. But then the salesman walks you down a back hallway to a stark, cramped office with "Finance and Insurance" on the door. Inside, a man in a suit sits behind the desk. He greets you with a faint smile on his face. An hour later you walk out in a daze: The whole deal was reworked, your monthly payment soared and you bought products you didn't really want.
What happened to your great deal?
You just got hit by the "F&I Man," also called the finance officer. He waits in the back of every dealership for unsuspecting customers so he can increase the profit for the dealership and boost his commission.
In this four-part series, written by veteran auto finance manager Nick James, you will learn the F&I man's tricks and how to avoid them. When you're done, you'll be ready to safely navigate this crucial part of the car buying process, and the F&I man will never work his "magic" on you again.

Richard Epstein: NCAA bypassing process in review of Penn State is wrong and a function of its monopoly status

University of Chicago Law Professor Richard Epstein writes a provocative column for Richochet titled, "Does the NCAA Wear the White Hat?". Here are excepts:
In this case, the longish process that gives Penn State 90 days to respond was waived. It seems that everyone wanted to get something done on this issue as quickly as possible. But the concentration of all powers in the hands of a single individual, NCAA President Mark Emmert, has real dangers – and would even if Emmert were the wisest person on the face of the planet.

* * *

It is not enough to say that there is abuse at the school level. It is also necessary to ask whether there is abuse at the NCAA level as well. On the latter point, the NCAA cannot get a clean verdict. The blunt truth is that the NCAA is the only game in town and has a power disproportionate to its wisdom. Put otherwise, the NCAA enjoys a monopoly position as a regulator and thus cannot be immune from the temptations that face all organizations with such power. Just to be summoned before the NCAA to explain why a college is not in compliance with this or that rule is a hugely expensive undertaking, which goes a long way to dull criticism of its behavior.
To read the rest, click here.

FCC Upholds Conclusion that Comcast Discriminated Against the Tennis Channel

A two-year dispute involving the cable tier placement of the Tennis Channel (not owned by Comcast) and the Golf Channel and Versus, recently renamed the NBC Sports Network, (both owned by Comcast) has been making its way through the FCC. This week,the majority of the FCC commissioners concluded that Comcast illegally discriminated in placing the Tennis Channel in a more limited and more expensive tier than the other two sports channels and ordered the firm to pay a fine and move the Tennis Channel to the same tier as the others.

The commission’s party-line 3-2 ruling by its Democratic majority upheld an administrative law judge’s conclusion that ordered Comcast to pay a forfeiture of $375,000 and required Comcast to carry Tennis Channel at the same level of distribution as Golf Channel and Versus. The ALJ also required Comcast to provide Tennis Channel with equitable treatment as to channel placement. The full commission ruling affirming the ALJ’s determination was the first time an MVPD was held liable under the law. The decision is lengthy, with a fair amount of space devoted to procedural issues.However, the areas of particular interest for sports and broadcast lawyers involve the determination of what facts justify a affiliation discrimination and the general First Amendment standards that should be accorded such cases.

The majority concluded that this policy unreasonably restrained the non-Comcast affiliated Tennis Channel from competing with the Comcast-affiliated Golf Channel, a violation of Section 616 of the Communications Act and its accompanying regulations. Such disputes are considered on a case-by-case basis and there are many factual questions that must be determined before concluding that competitive discrimination occurs.The majority, in upholding the ALJ, found that these conditions existed. Looking at the similarities in programming, ratings and demographics, along with circumstantial evidence, the majority concluded that discrimination due to affiliation existed. The opinion also discussed First Amendment considerations and concluded that since the anti-discrimination rules were based on “content-neutral” standards, the lesser intermediate scrutiny test would be applied. Citing earlier precedent involving cable television’s mandatory carriage requirements, the majority concluded that the test was warranted and that the it “easily” met the standard of a substantial governmental interest to prevent such unfavorable policies and that the rule was not burden substantially more speech than necessary.

The two dissenting commissioners contested the methodology of the majority’s conclusion about discrimination,noting the general cable industry practices involving the place of the Tennis Channel. It also issued a warning worth pondering: “. . . in order to shield themselves from discrimination complaints, Comcast and other MVPDs will be more likely to carry networks they do not want, on tiers with broader penetration,and at higher prices than ever before—at least if they are foolish enough to be willing to invest in content creation. And the Commission should not kid itself. These additional programming costs will come out of the pockets of consumers, not from MVPDs’ bottom lines.”

For the Tennis Channel, this is a huge shot in the arm. Comcast must now add Tennis Channel, currently available in 34 million homes nation wise, into an additional 18 million more households just weeks before the U.S. Open. This case will be appealed by Comcast and it is an important one to watch for cable operators, sports programmers and viewers.

How do you take care of your family's future?

"1945" is an amazing short documentary by Sun Life of Canada (Philippines), Inc.

I was touched with the short film's ending message. "In 1945, Sun Life personnel traced and searched for the beneficiaries of those who perished in the war. A time of chaos became a time of honoring commitments and making lives brighter under the Sun."

This is truly customer satisfaction and relationship service!

From past to present, life insurance has only one objective -- that is, to provide protection to the family left behind or protection to oneself especially in times of need.






Wednesday, July 25, 2012

PSU Board meeting to see if Consent Decree Invalid

This could be prove huge: Penn State Board of Trustees is meeting to discuss if President Erickson lacked the legal authority to sign the consent decree with the NCAA without first getting its approval. As I discussed yesterday, the invalidation of the consent decree strategy may be the best one for those who believe Penn State should fight the penalty.

Update 7/26: The Board met into the evening, but declined to vote on whether to rescind the consent decree. The board was apparently deterred by the possibility of a worse sanction from the NCAA if it fights it. Of course, the decision not to fight traces back to an on-going discussion on this blog about the NCAA not having to provide its members due process because of the Supreme Court's decision in NCAA v. Tarkanian.

Process and Due Process

Tim does a great job exposing the problems with the complaints about due process and consent decrees, as Mike initially discussed. I want to add two more thoughts.

First, the mistake people are making is to assume that only the state or a state actor can provide process and thus to settle or enter "consent decrees."But any large organization can (and frequently does) accord process as part of its decision making. Think about how, say, a private university adjudicates student disciplinary matters. Providing process does not make a private entity a state actor. But a private entity that provides process can accord whatever process it believes is fair or appropriate; it is not bound by constitutional notions of what process is due, but only what its members (and perhaps the public) regard as fair. Similarly, if a private entity wants to call the resolution of its private processes a "consent decree," it is free to do so, without any state action or constitutional implications.

Second, it is worth considering how we should understand the Freeh Report from a due process perspective. The Paterno family has repeatedly (after thes tatue was removed and again after the penalties were announced) complained that their lawyers never were given an opportunity to cross-examine witnesses or to call and question their own witnesses. The Freeh Report thus was a one-sided "prosecutor's brief," and PSU's and the NCAA's reliance on the Report disregards due process.

But another way to look at the Freeh Report is as a decision by a judge in an inquisitorial judicial system, where the judge, acting as a neutral factfinder, gathers information himself. Attorney involvement and control and cross-examination of witnesses are not a core part of these proceedings; thejudge is charged with calling and questioning witnesses and gathering evidence to make a decision, including finding facts and drawing inferences. This certainly sounds like Freeh's charge from the Penn State Board of Trustees andit certainly sounds like what the Freeh Report sought to do. While different from the adversarial system that generally (although not exclusively) prevails in the United States, it cannot be that reliance on inquisitorial processes violates due process.

Penn State: Dispelling the "Due Process" Myth and Perceived Precedential Value Problem

As to whether the punishment fit the crime in the imposition of punishment on current student-athletes and coaches that had no fault here, it is difficult to equate Jerry Sandusky's heinous actions and subsequent cover-up with standard NCAA violations that go to competitive advantage. Therefore, I can see why many people are having trouble with the punishment being levied against the innocent members of the football program in Happy Valley. Let's put that aside for the moment, though, to clear away some of what I consider to be misinformation and misinterpretations of this latest NCAA headline. In addition to punishment itself, Mark Emmert's executive declaration of Penn State's punishment on Monday left many on the sidelines enraged over (1) a lack of "due process" and (2) setting a bad precedent for future NCAA enforcement matters. As to (1), "due process" is not accorded to member institutions in the NCAA process, and I do not believe that (2) should concern current and future alleged rule-breakers in standard areas of violation such as recruiting, benefits, academic eligibility, amateurism, etc.

As to the due process issue, the NCAA administrative law process does not accord Federal or state constitutional due process protection for those parties that go through enforcement proceedings, be it student-athlete reinstatement (SAR) or infractions.
The U.S. Supreme Court made it clear that the NCAA is not a governmental actor and thus is not obligated to provide due process. Natl Collegiate Athletic Assn v. Tarkanian, 488 U.S. 179, 179 (1988). The NCAA is a private association made up of members that include schools and conferences. Those schools and conferences agreed to abide by the Association rules, including potential punishments for violations of Association rules, analogous to a country club and its members. (Bylaw 3.3.4.1). Schools and conferences are voluntary members of the NCAA, and therefore must abide by the associated rules and regulations. See, Hispanic Coll. Fund, Inc. v. Natl Collegiate Athletic Ass’n, 826 N.E.2d 652 (Ind. Ct. App. 2005) (holding that the NCAAs decisions regarding organization were not subject to trial courts review absent allegations of fraud or illegality, because the organization was a voluntary member of NCAA). Furthermore, [t]he articles of incorporation and bylaws of a not-for-profit corporation are generally considered to be a contract between the corporation and its members and among the members themselves.” Id, at 658. Therefore, member schools are under an enforceable contract with the NCAA and subject to its rules, regulations, and any punishment it may sentence. Bylaw 19.5.2 lists all the appropriate penalties for major violations, including (l): other penalties as appropriate.

Courts have been, and remain, reluctant to accept challenges to the substance of NCAA enforcement decisions; the Oliver case being one of the few exceptions. See e.g. Justice v. Nat'l Collegiate Athletic Ass’n, 577 F. Supp. 356 (D. Ariz. 1983) (upholding NCAA sanctions for recruiting violations and denying student-athletes’ constitutiona land antitrust claims); but see Oliver v. Natl. Collegiate Athletic Assn., 2008-Ohio-7144, 155 Ohio Misc. 2d 1, 920 N.E.2d 190. Further, membership must tread lightly in either going to court to challenge a decision or, more likely, abiding by a court ruling overturning a NCAA decision pursuant to injunctive relief sought by a student-athlete, since the NCAA reserves the right to punish a member institution should an appellate court later reverse alower court’s ruling overturning a NCAA decision. See, e.g. Nat’l CollegiateAthletic Ass’n v. Jones, 1 S.W.3d 83 (Tex. 1999) (holding that the NCAA’s appeal from an injunction granted at the trial court level was not moot as to the applicability of retroactive penalties). Challenges to the NCAA administrative law process are for when the NCAA is not following its own “fair process.” So, the question applicable to Penn State is whether the NCAA did, in fact, follow its own fair process.

The fair process established by the NCAA can be found in Article 32.
From start to finish, including investigations and hearings, the infractions process takes over a year in most cases. The process includes a preliminary investigation, the possibility of summary-disposition, notice of inquiry, notice of allegation, institution investigation, written responses to the allegation, hearing, final Committee report and possible appeal. For example, allegations of impermissible recruiting and student-athletes receiving benefits from professional agents at the University of South Carolina first came to light in July 2010. The Public Infractions Report was issued two years later on April 27, 2012. On the other hand, the overall process with Penn State took about nine months.

However, with Penn State, the NCAA did not follow the infractions process established in Article 32. So, does the NCAA's failure to follow its already-established process of investigation, enforcement, hearing, deliberation, decision, and possible appeal violate the fair process that it is bound to follow? Yes and no. A "quick look" analysis reveals that punishment was delivered by the NCAA President without regard for the existing NCAA enforcement structure; something not specifically articulated in NCAA bylaws, and certainly not something for which we see any precedent. However, the only party with standing to challenge the NCAA's declaration is Penn State, and Penn State consented to this punishment; ergo we now have a moot challenge.


As someone who regularly represents parties in NCAA processes, knowing what information is public thus far, if I am Penn State, I do not think going through the infractions process would have been a better process for the Penn State community. Sure, the punishments might not have been as severe, but Jerry Sandusky's actions were not just corruptions of the NCAA's principles of amateurism, competitive fairness, and academic integrity, but acts of profound evil. As such, as the infractions process drags on, Sandusky's acts and any cover-up of those acts would be continually relived. Further, there is a cost in terms of counsel like myself to be involved in the process. Let's go back to the South Carolina example. The school said that it spent $535,667.50 in connection with the NCAA investigation. Finally, as to those who believe that Penn State would find relief only at the appellate level in the infractions process, there is no guarantee that Penn State would have taken the case this far. My friend, Jerry R. Parkinson, who served as a member of the NCAA Division I Committee on Infractions from 2000 until very recently (including service as the committee’s first coordinator of appeals), cited in a law review article that only thirty-four of the ninety major infractions cases that went to a hearing from 2000 to 2009 were appealed.

While I believe the less controversial route would have been an expedited infractions process that would necessarily include a summary disposition (the July 12, 2012 Freeh Report helps in this regard), for the Penn State community to heal, I have to think ripping the band-aid off quickly in the manner done here with Emmert's decision yesterday, while not ideal, is preferable to a drawn out infractions process.

Securing your family's future with sound Financial Planning

Financial independence is perhaps the best feeling a man can get. To be able to buy anything you wish to, to be able to live life your way without asking anyone. Isn’t it truly marvelous how life would be at that stage? Almost everyone struggles to reach that stage of financial independence in life. While some achieve it, the remaining people strive hard daily to reach that transcendence.


You might know a lot of people who aren’t satisfied with their jobs but are still clinging on to it. Whyare they still carrying on? Because they need that certain inflow of cash every month till they reach financial maturity. There are so many businessmen who have seen their competitors rise but they are still where they were. Why? Because they aren’t financially secure to take a deep plunge into a risky territory! 

Considering all the above things, you can break free from this clutter of people waiting to achieve financial independence by doing personal financial planning for the benefit of your family. Personal financial planningis very vital, because very often life will confront you with demanding questions and you need to be ready with the answers. Incidents in life such as your child’s higher education, marriage of your daughter, planning a much needed vacation and finally your retirement will come one after the other, and you need to be prepared for them. 


These decisions require a lot of planning, and just as you start making a career, you should start thinking about these things as well and hire a financial consultant. A financial advisor is a one who’s well versed with everything that has been going, that goes on, and that will go in in this world run by money.  He is quite knowledgeable about the various policies offered by investment and insurance companies, as well as the financial schemes of the government machinery. A trip to some good financial planners will make youfeel secure about your future as they will provide you guidance in the best of your interest.

These financial planners have a good experience of doling out amazing pieces of advice depending on your income and expenditure. They will help you to curtail unnecessary expenses and inform you about the various schemes offered by the investment companies such as those for your child’s education, your daughter’s marriage and so on. Retirement schemes are a big hit in India, with every firm trying to outdo the other.
But as they say, “investment policies are subject to market risk, read the offer document carefully before investing!” Trust only financial planning India experts who have had an excellent track record of guiding people to the right path. If you have saved enough money and wish to invest that for a better future, then too you can hire financial planning India experts that can suggest you proper places to invest, in order to sleep sound on every night of your old age, without having to worry about having enough money for the next day.

Tuesday, July 24, 2012

"Consent Decree": Does it make the NCAA a State Actor?

UNC Chapel Hill Professor Dr. Richard Southall, who is also Director of the College Sport Research Institute, wonders why the NCAA and Penn state have referred to the agreement signed by President Rodney Erickson and the NCAA as a "consent decree" (the validity for which I discuss in a previous post).

I also wondered about the phrase "consent decree" and assumed it to mean, at least in this context, something akin to a settlement between two parties who could otherwise have legal claims against one another. For example, Penn State could have sought an injunction to stop the NCAA; instead, by signing the decree, it has consented to the NCAA's punishment. The NCAA has reached settlements with other schools concerning infractions and the agreement with Penn State seemed like another example.

But as Richard notes to me in an e-mail, the phrase "consent decree" is normally used by government actors (e.g., courts, the Department of Justice, the Securities and Exchange Commission etc.) when settling claims with private parties. Neither he nor others I have spoken with can remember the NCAA entering into "consent decrees" with other schools. According to a brief search by me on Lexis/Nexis, I did find that the NCAA previously entered into a consent decree -- but it was with the U.S. Department of Justice.

The website Legal Dictionary on Law.com defines consent decree as
"an order of a judge based upon an agreement, almost always put in writing, between the parties to a lawsuit instead of continuing the case through trial or hearing. It cannot be appealed unless it was based upon fraud by one of the parties (he lied about the situation), mutual mistake (both parties misunderstood the situation) or if the court does not have jurisdiction over the case or the parties. Obviously, such a decree is almost always final and non-appealable since the parties worked it out. A consent decree is a common practice when the government has sued to make a person or corporation comply with the law (improper securities practices, pollution, restraints of trade, conspiracy) or the defendant agrees to the consent decree (often not to repeat the offense) in return for the government not pursuing criminal penalties. In general a consent decree and a consent judgment are the same."
So if a phrase sounds like it would be made the government, does that mean it was made by the government? Well, use of "consent decree" probably doesn't transform the NCAA into a state actor, which the Supreme Court said it wasn't in NCAA v. Tarkanian and as a result the NCAA need not offer its member institutions and student-athletes due process. I can't imagine use of a term in one instance would have that kind of profound effect.

But I wonder why the NCAA would use "consent decree" now but not (apparently) before?

UPDATE:

In addition to the thoughtful comments to this post, consider these comments:

Drexel University Professor Dr. Ellen Staurowsky, an expert on college sports and the NCAA:
"The thought occurs that perhaps the use of the term is a reflection of who the NCAA's legal counsel is. According to Donald Remy's bio, he has previously held positions including deputy assistant attorney general at the U.S. Department of Justice; assistant to the General Counsel of the Army; law clerk to the 6th Circuit United States Court of Appeals; and senior vice president, deputy general counsel and chief compliance officer at Fannie Mae. That might explain it although the language still interests me a great deal."
Dr. Southall:
"As [Dr. Staurowsky] and I discussed earlier isn't a consent decree usually either between a "state actor" (governmental entity – DoJ, SEC, etc.) and an individual or corporation being investigated, or imposed by the court after negotiations between a plaintiff and defendant? It seems that in this case the NCAA is not a state actor nor the Court, but a voluntary organization that has imposed (the NCAA's language) on a member. Does a truly voluntary member waive any right to appeal? Sounds like a tactic similar to imposing upon NCAA athletes a requirement regarding the use of their names and likenesses….Oh never mind:)"

Do Penn State fans have any legal recourse?

I received an email from a Penn State alum named Jordan who asked me if Penn State fans can do anything legally to the NCAA or Penn State. I think there are at least three legal strategies - defamation, consumer fraud and consent decree invalidation - that could be used. None of them, however, would likely work.

Here are some quick thoughts on them:

1) SUING THE NCAA FOR DEFAMATION: I don't think Penn State fans/ticket holders can sue the NCAA for defamation with any hopes of success. They likely do not have standing to bring a claim, since none of them were named or referred to (specifically or generally) by the NCAA or anyone at the NCAA.

Theoretically, Penn State as an institution could bring a defamation claim against the NCAA, but the consent decree (assuming it is valid) would take that claim off the table. Plus, truth is an absolute defense to defamation and the Freeh Report would be used by the NCAA.

2) SUING PENN STATE FOR CONSUMER FRAUD: It's possible that ticket holders could sue Penn State under a consumer fraud claim - the gist of it would be that the on-field product was somehow misleading since a cover up and scandal were occurring. But don't expect that to work. For one, those types of claims always seem to fail. They failed when a Jets fan brought a claim against the New England Patriots for Spygate, arguing the games were rigged. And they would fail if fans brought claims against the Saints for watching a hit man show instead of a football game. The problem is that when fans buy a seat to a game, it's a contractual right to watch a game and nothing more. People who went to Penn State games, be they Penn State fans or fans of other schools, were never denied that right. Even if the contractual right was broader, the scandal still had nothing to do with the players who played the games.

3) INVALIDATING THE CONSENT DECREE: Maybe the best legal strategy for Penn State fans would be to encourage the Board of Trustees to portray the consent decree as invalidly executed, and then for the university to seek an injunction from a court to restrain the NCAA's sanction.

Did President Erickson adequately notify the Board of Trustees about the decree? Did he receive its permission? Did he have the legal authority to bind Penn State to such an agreement without the Board's notice or permission? If he didn't, could the NCAA still rely on his signature? These are important process questions. Relevant Board rules and terms of Erickson's employment contract would prove crucial in answering them.

Practically, though, I don't see this strategy working: it seems like the university's key decision-makers (even if not many alumns, fans and students) are on board with accepting the NCAA's judgment.

My Column for CNN on Penn State and the NCAA

In a column for CNN, I take issue with the NCAA's process that led to its sanctioning of Penn State. Here's an excerpt:

But I'm less comfortable with how fast the ruling was made. The NCAA clearly bypassed its normal procedure for investigating and sanctioning. This procedure often takes more than a year and involves several hearings.

Consider what the NCAA did not give Penn State. Normally the association notifies the school that an official inquiry is going to be held. Notice is followed by an investigation and, if the NCAA finds fault, a written explanation of the allegations is given. The school has 90 days to respond, after which it may request more time to respond or schedule a hearing before the NCAA's Committee on Infractions.

Then comes the hearing, which resembles a trial or arbitration hearing. If the school is found to be at fault, it can appeal to the NCAA's Infractions Appeals Committee. Penn State did not receive 90 days to respond, nor did it get a trial or an opportunity to appeal.

To read the rest, click here.

Monday, July 23, 2012

Just the FACs: Fan Action Committees and Player Support

Dan Markel (Florida State) and I have an op-ed that just posted at The Atlantic, introducing the concept of "Fan Action Committees." The sports counterpart to PACs, these are vehicles for fans to pool money to give to star players (or donate to the player's favored charitable causes) to induce them to join or remain with a favored team. We take a particular focus on last week's Jeremy Lin/New York Knicks saga.

This presents the germ of an idea that we hope (Mike McCann) to expand into a longer essay. Comments welcome and encouraged. Thanks to Mike, Gregg Polsky (UNC), and Brian Galle (BC) for their comments.

Interesting insight

Google has provided us a lot of powerful online tools and one of these tools help us "compare search volume patterns across specific regions, categories, time frames and properties."

Today, I wanted to understand what are the most common search keywords done in the Philippines in the last 12 months and with just a few clicks on Google Insight; I am able to generate the web search interest by region and keywords.

Guess which one is the winner? "Credit Card" comes up as number one, and interestingly, investment is at the bottom 4.

Google Insight Web Search Interest. Credits: Google


I did the same search terms but filtered by countries to see how each countries folks do their searches for these 4 keywords.

United States and UK has the same ranking as the Philippines.





China, on the other hand, has "investment" as their number one keyword search.

Add caption

Hong Kong and Japan have "investment" as the top keyword search.





Observation & Interpretation:
Base on the above trends, Filipinos are more interested in credit cards and loans. We have the same behavior and mindset with those of US and UK. This could be because we are highly influenced by Western behavior and the use of credit card enables instant gratification especially in keeping up with the lifestyle trends.

Although many knew about the benefits of investment and savings, it still shows that we are still lagging behind our Asian neighbors in terms of investment research and knowledge acquisition.

Now, what's your observation & interpretation?







Sunday, July 22, 2012

"Unprecedented": You keep using that word, I do not think it means what you think it means

Some quick thoughts on the rapid developments at Penn State on Sunday and in anticipation of Monday's announcement of NCAA sanctions. As a starting point, I am generally agnostic both about whether the statue should have been removed and whether and how the NCAA should sanction Penn State; I see the arguments on both sides.

1) The Paterno Family objects to the removal (not surprising). Their starting argument is that the removal "does not serve the victims of Jerry Sandusky's horrible crimes or help heal the Penn State Community." No, it probably doesn't. But it also doesn't matter. There are other things that Penn State may want to achieve besides serving the victims, including making a statement against what Paterno did and disassociating the school from that.

Also ringing hollow is their insistence that we do not know the whole story or all the facts. Amid all the noise, I have never heard the family flat-out deny that JoePa knew about either the 1998 allegations or that he was told of the initial plan in 2001 to report Sandusky to authorities. Their argument, in essence, is that it is wrong to take down the statue because it unfairly singles him out, when he was not the major wrongdoer. But Paterno is being "singled out" only because he is the only one who had a statue on campus.

2) I am dubious about all the talk about the "unprecedented" nature of the expected NCAA sanctions. The program will not be suspended or given the "death penalty," but reportedly will suffer a loss of scholarships and loss of bowl opportunities. But that sounds like the typical punishment for major violations, including what USC received a few years ago. Unless the number of lost scholarships or the length of the postseason ban is so great (say, 10 scholarships a year for more than five years and a bowl ban of 5-10 years), I am not sure what is so unprecedented.

The University reportedly also will be fined between $ 30 million and $ 60 million; that could be the unprecedented part, called by one source "a fine like no fine before." But I am not sure how a big fine that targets the university and not the football program, while perhaps unprecedented, is uniquely damaging to the program, especially as compared with shutting down the program for a year. Finally, the NCAA arguably has departed both from its own procedures (no hearing, no investigation, using special processes with the express permission of the NCAA's board of directors) and its own substantive limitations (sanctioning for actions that have nothing to do with the NCAA's rules and everything to do with the university's connections to the civil and criminal justice systems). That is unprecedented. But that just may be another way of saying the NCAA is treading into dangerous waters and will be forced to present clear and forceful justifications in support of these sanctions.

A source in the stories linked above said Penn State might have preferred a flat one-year ban, suggesting the effects of the scholarship reductions, bowl ban, and fines will be felt longer. One source argued that saying this is not the death penalty is just semantics. I am hard-pressed to imagine a body of sanctions that really will make PSU folks wish the NCAA had just shut them down for a year or two. But forget the noise from pundits and sources about "never see[ing] anything like it." Consider how quickly USC bounded back from its loss-of-scholarship/bowl-ban sanction. Unless the NCAA delivers something an order of magnitude beyond that, I cannot conceive of these sanctions doing to Penn State what the death penalty did to SMU. Obviously, we will see tomorrow.

3) I heard a radio interview tonight with ESPN's Jay Bilas. He questioned whether this case means that the NCAA has to get involved in other cases of student-athlete criminal misconduct that touches back to the team, the athletic department, or the university.  He uses as examples Duke lacrosse (which could be an example of lack of institutional control, although going in the other direction) or the murder of U Va women's lacrosse player Yeardley Love by men's player George Huguely. Is this a new realm for NCAA enforcement? Or is this case simply sui generis?

Financial Pyramid: In which level are you today?

Maslow's Pyramid of Needs. Credits: Wkipedia
 
Maslow's hierarchy of needs interprets human's basic needs as the foundation of the pyramid and gradually elevates to the levels that human motivations generally move through -- safety, love/belonging, esteem and self actualization.

"For the most part, physiological needs are obvious – they are the literal requirements for human survival. If these requirements are not met, the human body simply cannot continue to function."



In the same way, Financial Planning also has a Financial Pyramid. It is a strategic approach in managing investment portfolio where the base of the pyramid is made up of low-risk investments, the mid-portion is composed of growth investments and the top is speculative investments.

For the most part, the base of the pyramid forms the requirements and foundation of a solid financial plan as well as for a long term financial freedom goal. Similar to meeting the physiological needs, if the basic financial requirements are not met, the plan for financial freedom simply cannot continue be achieved.


The 4 levels of Financial Pyramid:
  1. Protection
    This stage provides you with a cushion in case of unexpected events, such as job loss or health issues. Items you need to have in this stage:
       -- Savings, Emergency Fund (6 months of salary)
       -- Insurance (Life, Health, Critical Illness, etc)
  2. Savings
    This stage helps you to start building your wealth and investments. This is the baby steps in creating your passive income sources. Items you need to have in this stage:
       -- Mutual Funds, Bonds
       -- Real Estate / Your Home
  3. Wealth Building
    This stage helps your wealth and investments achieve maximum growth and income. This may be your long term passive income sources. Items you need to have in this stage:
       -- Equity, Stocks
       -- Business
  4. Speculation
    At this stage, you should have excess funds with zero or low debt, enough retirement and investment fund before investing in a much higher risk portfolio. Some items in speculation would be:
       -- Gold
    Success: one step at a time
    Success. One step at a time. Credits: deZengo

       -- Art, Collectibles
The financial pyramid enables us to understand the importance of each stage in order for us to visualize our road to financial freedom. It is also important to note that it is ideal to go one step at a time for each level in your financial plan to achieve success.











Understanding financial pyramid:



Saturday, July 21, 2012

Sports, politics, and speech, again

Major League Soccer recently announced that it will not renew a partnership (which first was announced in January of this year) with Boy Scouts of America following the end of this season. MLS's decision follows closely on BSA's recent announcement that, after a two-year review, it would not revise its policies against gay members and leaders.

It is heartening to see a sports league and its teams taking the lead in speaking out and promoting LGBT rights. It also is a great example of how sports and politics, and political speech, inevitably mix in all directions.

Thursday, July 19, 2012

J. Gordon Hylton's Proposed Penalty for Penn State: Forfeit All Wins after Paterno learned of Sandusky's crimes but failed to report them

In a comment to Howard's post on Paterno's statute, UVA Law and Marquette Law Professor J. Gordon Hylton -- the nation's leading expert on the intersection between sports, law and history -- suggested a penalty that I haven't heard elsewhere:
An appropriate penalty would be to require Penn State to forfeit all of its football victories since Paterno learned of Sandusky's criminal acts but failed to report them. (This might be 1998, or it might be earlier.)

This would remove Paterno's name from the top of the all-time coaching victories list and from any association with coaching excellence.

I'm not saying that this should be the only penalty, but it should be part of the penalty.

Makes a good deal of sense to me.

Sunday, July 15, 2012

Public memorials and Penn State

Legal historian Al Brophy of UNC and the Faculty Lounge writes some interesting stuff on public memorials and monuments, particularly in the South. This has become the new locus of discussion at Penn State, as the trustees and others try to figure out what to do with the Paterno iconography that dots Penn State and State College. These include a statue, the family name on the university library, and a famous mural in town (the mural artist recently removed the halo from over Paterno's head).

The current sentiment on the Board of Trustees is to leave the statue, at least for now and pending a broader public discussion) I was struck by the comment of one trustee, who insisted "The statue represents the good that Joe did. It doesn't represent the bad that he did." Can they have it both ways like that? Can a monument to someone with a divided legacy (as Paterno now has) simply remain in place, pretending there was no bad? Do the trustees at least have to acknowledge in the public conversation that they are determining that the good Paterno did outweighs the bad and thus warrants keeping the statute (a reasonable position)? I actually don't particularly care what they do with the statue; I'm more interested in how the conversation about the statue honestly addresses that Paterno genuinely did something wrong and the statute represents that just as much as everything else.

Actually, I am far more disturbed by the announcement that they are going to renovate the locker rooms and shower areas where some of Sandusky's assaults took place. While this has been described as an attempt to "erase the legacy of Sandusky's crimes," it also strikes me as an actual and symbolic attempt to whitewash the past in a way that covers the university's role in those crimes. I am not suggesting they have to turn the shower into a shrine or a museum. But their first response is to bury the crime scene. And to get a shiny new athletics facilities, when the special treatment of athletics is a major part of this whole mess.