clock menu more-arrow no yes

Filed under:

MASN court case: Judge rules in favor of Orioles, against Nationals; core issue unresolved

New, 186 comments

The verdict is in and a judge agrees: the Orioles got screwed in their hearing in front of baseball's revenue panel concerning MASN rights fees. However, this ruling does not resolve the long-term dispute and the next step is unclear.

Dan Hamilton-USA TODAY Sports

Nearly six months after the trial hearing, and three years after the dispute began between MASN and the Nationals, the verdict is in on the court case involving tens of millions of dollars of rights fees. The thirty-page decision provides the immediate conclusion that the court has thrown out the ruling made by baseball's panel - a victory for the Orioles - but offers no other resolution to the case.

You can read in more length about the circumstances behind the case in an article I wrote last year. The very short version is that the Orioles and Nationals ended up in front of a baseball-controlled panel that acts as the arbitrator when there are conflicts between teams of this nature.

The Orioles felt like they were getting screwed by this panel, in large part because the law firm (Proskauer Rose) that represented the Nationals in front of this panel was concurrently representing teams who were on the panel, as well as the league. The specific attorneys involved were also involved in other cases around baseball.

With this situation, the Orioles argued, the ruling of the panel could not possibly be fair and must be thrown out. In his ruling, Judge Lawrence Marks accepted this rationale and threw out the panel's award:

Here, there are objective facts that are unquestionably inconsistent with impartiality. Had MLB, the arbitrators, the Nationals, and/or Proskauer taken some reasonable step ... or any step at all, the Court might well have been compelled to uphold the arbitral award under the FAA. But MASN and the Orioles have established that their well-documented concerns fell entirely on deaf ears. Under the circumstances, the Court concludes that this complete inaction objectively demonstrates an utter lack of concern for fairness of the proceeding that is "so inconsistent with basic principles of justice" that the award must be vacated.

In an amusing side note, the case cited in the quote in the above paragraph is Hooters of America v. Phillips.

However, the judge also did not accept the argument on the part of the Orioles that the whole matter should be handed over to an independent arbitration panel. In a footnote on the last page of the ruling, a serious case of what in the journalism world would be called "burying the lede", the judge offers that "because it is ultimately the Nationals' choice of counsel that created the conflict, the parties may wish to meet and confer as to whether the Nationals are willing and able to retain counsel (with no conflicts), and thereby return to the RSDC, pursuant to the parties' Agreement."

He adds that if there is a continuing conflict about the RSDC, the parties "may meet and confer regarding whether they can agree to a different dispute process." He mentions as just one possibility "a three-person panel in accordance with the Commercial Rules of the American Arbitration Association."

So for today the Orioles have won, in essence because the judge agrees that MLB and the Nationals kind of screwed them out of a fair hearing. This is a very big deal because as Judge Marks writes in the first paragraph of his ruling, the petition to vacate an arbitration award is "a not uncommon application to a court yet one that is rarely granted."

The whole issue is still far from resolved, though, because they could end up back in front of the same panel (now with different members) with the Nationals having different lawyers. Or the two parties could end up in front of an independent panel that could decide just about anything.

All of which creates the very real possibility that this dispute, which covers rights fees from the years 2012-2016, will not have been resolved by the time that period ends. Oh, and whenever it does have a resolution, under the current contractual agreement, there'll be a brand new fight over 2017-2021 rights fees that's now just about a year away from kicking off.

The only thing that's certain is that neither side can be very certain about what's going to happen. The Nationals don't get the money they wanted right now, and the Orioles can't be sure that they'll get to keep the money they've wanted to keep. OK, so we better make it that there are two certain things. The other certain thing is that the lawyers will keep getting paid.

Story will be updated as new information, if any, comes to my attention. I am not a lawyer, nor do I play one on TV, but I have closely followed this case.