A judge in the Southern District of New York Monday reminded attorneys for the Major League Baseball Players’ Association and an embattled agent that although arbitration is a confidential process, confidentiality can be forfeited when asking a federal court to intervene.
In a brief order, Judge Lewis Liman denied motions to seal documents related to MLBPA’s lawsuit against agent William Arroyo and two executives from Rimas Sports—Noah Assad and Jonathan Miranda.
Rimas Sports, which is backed by music artist Bad Bunny, launched last year, and it has represented players including Ronny Mauricio, Wilmer Flores and Santiago Espinal.
MLBPA accuses Arroyo, Assad and Miranda of violating MLBPA regulations concerning prohibited inducements of players, unauthorized recruiters and failure to comply with investigations. In April, MLBPA revoked Arroyo’s certification and denied certification to Asad and Miranda. The union ordered them to pay a fine of $400,000.
The trio is appealing the accusations, with Arroyo seeking a reversal of his certification revocation. They sought a temporary restraining order to postpone the revocation from taking effect until after the appeal. An arbitrator, Michael Gottesman, denied the TRO. MLBPA then sued, seeking a court order that would confirm and enforce the arbitration decision.
Although MLBPA and the trio disagree about the facts and application of law, they agree accompanying court records ought to be sealed from public and media scrutiny. Both sides filed motions asking that Liman keep documents, including the decision to discipline and the notice of appeal, out of public view and ensure that all future filings redact materials.
Liman flatly rejected the requests and offered several justifications.
First, the First Amendment and case precedent have created a “presumption of immediate public access to judicial documents,” the judge stressed.
This is a core point sometimes overlooked when news stories conflate arbitration with litigation. Arbitration is a privately funded, contract-based process for dispute resolution. Whether any arbitration materials are disclosed is ordinarily up to the parties. Arbitration decisions (called “awards”) are not precedent. They simply resolve the specific dispute at hand, usually in a confidential way.
Litigation, in contrast, is the use of the taxpayer-funded court system to resolve disputes. Judges and juries decide cases, and decisions can become precedent that bind others. Liman explained that to ensure public confidence in the legitimacy and honesty of judicial proceedings, public access to testimony and documents is presumed. By suing, MLBPA started a controversy that utilizes a public system.
Second, Liman concluded that neither side offered sufficiently “countervailing factors” to outweigh “the strong presumption of public access.” He noted that persuasive countervailing factors include complying with law enforcement, safeguarding medical records, sheltering grand jury transcripts, protecting attorney-client privilege and securing trade secrets. None of those factors, the judge reasoned, is at issue in this dispute.
The union and the trio contend MLBPA regulations’ confidentiality provisions justify their demand. According to those provisions, arbitration proceedings are to remain confidential unless, in MLBPA’s judgment, disclosure is warranted “for the effective administration” of the regulations or the “effective” representation of players. MLBPA insists its interests could be compromised if arbitration matters became public.
Liman found that argument unpersuasive. The necessity of privacy is undermined, he reasoned, by MLBPA reserving “to itself the right to disclose ‘any aspect’ of the arbitration proceedings.” The judge also noted the union “knowingly placed the arbitration materials at issue by injecting them into a public proceeding.”
Liman also felt the documents at issue aren’t all that private.
He said the decision to punish contains nine paragraphs, seven of which merely layout standards and legal arguments “without any discussion of the underlying facts of the dispute.” The other two paragraphs refer to the prohibited activity of “luring players with forbidden gifts”—not exactly a state secret—and discussion of evidence mostly disclosed in other legal filings. An additional document, the notice of discipline, does contain names—including of persons not in the litigation—but Liman wrote “it is difficult to discern what truly implicates the privacy interests of third parties and what does not.”
Liman has given the parties until June 28 to offer better arguments. If they don’t convince him, the judge will let the public learn more about what their case is about.
The dispute is also not limited to one federal district court. Rimas Sports sued the MLBPA last month in the U.S. District Court for the District of Puerto Rico, claiming the union has exceeded its authority and tortiously interfered with the agency’s contracts. MLBPA, stressing the dispute is already subject to arbitration, has motioned Judge Camille L. Velez-Rive to compel the case to arbitration and thus out of public view.