What Should Clients and Their Lawyers Learn from Deflategate?

Honestly, I couldn’t really care one whit about the little locker room stare down between Roger Goodell and Tom Brady. Its just sports. A spinning teacher of mine once looked out at the class the day after a playoff or Super Bowl loss by the Patriots (I forget which) and said, in the middle of a sprint: “Guess what, Brady’s still a multimillionaire married to a super model.” Sort of sums up my feelings about the whole thing right there.

I do get, though, why so many people care, but what is more interesting to me are the remarkable lessons for lawyers buried in the judicial ruling and the decisions that led up to it, and I don’t mean for a second the question of whether or not Brady really cheated or whether the league could prove he had cheated. Litigators with experience with arbitration and the Federal Arbitration Act always knew, even if – like me – they didn’t bother to follow the case as it weaved along on its merry, monotonous way, that the judicial decision would be about process and the rules of arbitration, not in any way about whether Brady cheated or not. And really, its better that way, isn’t it? Who, really, cares whether a professional athlete pushes the boundaries a little bit in a way that doesn’t physically hurt anyone? We are not talking, after all, about East German sports authorities doping up athletes, or even baseball players voluntarily – but illegally – taking PEDs. We are talking simply about manipulating a ball. Face it: sports was more fun when batters corked bats and pitchers scuffed the ball, and no one called in the lawyers over it. Back then, legal proceedings were saved for things that warranted it and were actually important, like the reserve clause and whether baseball players were legally entitled to free agency or were instead bound, like indentured servants, to the first team that signed them. But I understand that times change and with them, peoples’ priorities and sense of perspective.

But when I said there were real and important lessons for lawyers buried in the decision and its prelude, I meant it. They flow from the errors by the NFL and its lawyers that are the basis for the Court’s ruling. Judge Berman found that a number of clear errors in the process required overturning the suspension, primarily that Brady was not on notice of the potential severe penalties for the conduct in question, that the NFL relied on inapplicable standards, and that the NFL withheld relevant evidence by refusing to allow NFL General Counsel Jeff Pash to testify as to his role in the creation of the evidence – the Wells Report – used to hang the accused.

As I said, these are procedural failings on which the judge overturned the sanction, and don’t even address the question at all of whether Brady did anything wrong. But in these procedural failings are a number of lessons about arbitration and, in a broader sense, the proper role of a lawyer in advising a client.

First, as errors go, those identified by Judge Berman in his ruling would have been obvious in advance to any lawyer experienced in arbitration. As a general rule, you can’t go to court after an arbitration concludes and ask the court to change the outcome by rearguing the merits. Instead, you have to convince the court that the arbitration proceeding itself was so flawed that reversal is needed, either because the procedures used were flawed, the arbitrator was biased, the ruling was so far afield that it reflects a failure by the arbitrator to follow applicable law, or the party that lost at arbitration was deprived of a fair opportunity to present that party’s case. The errors identified by Judge Berman in his ruling, and on which his ruling turned, fall soundly into these categories; if anything, the errors were such a perfect fit for the narrow grounds available for overturning an arbitration ruling that Brady’s legal team essentially went into the court proceedings with a loaded deck.

And Brady’s legal team, led by Jeffrey Kessler at Winston & Strawn, had to have always known this. They had to have known that they were holding a straight flush, or bringing a gun to a knife fight (pick your own cliché). And they wisely advised their client accordingly, by all appearances. Brady and his team clearly understood they held winning cards, and that, unless the NFL buckled in settlement, they should let the judicial process run its course. And that is lesson number one for lawyers and people who hire them: the lawyers need to know the case, the relevant law and the facts well enough to make those kind of calls, and have the experience and expertise to wisely counsel their clients in that regard. If not, what exactly is a client paying for?

The other lessons come from the flip side, which is the NFL’s sound defeat. How could the NFL’s lawyers not have seen the same thing, and understood that the arbitration proceedings had been so flawed that they would have trouble convincing a court to affirm the arbitration rulings? Did they not know? I find that hard to believe. I understand that hindsight is 20/20, and I completely understand the fog of war that can make it hard for lawyers, in the middle of litigating a case, to see clearly every crook and turn of a case in advance. But here, the NFL’s experienced lawyers had to have identified these problems and known that they posed a risk for their client. And although I have no idea what the actual dynamic was that led to the NFL still riding off to Little Big Horn under those circumstances, I have certainly been at this business long enough to identify the possible causes and the lessons they teach. Since the NFL's lawyers had to have recognized the risks, the question becomes whether they firmly and clearly advised Goodell and the NFL about them. If they did, then the loss is on the client, who is certainly free to decide to move forward with litigation despite knowing about those risks. But the more worrisome question, given the dynamic between lawyers and very prominent clients, is whether the NFL was told firmly and clearly of the risk they were running, or whether their lawyers were instead unwilling to speak that truth to power. Lawyers don’t want to lose clients, especially prominent ones like the NFL. A lawyer gains all sorts of benefits from a client like that, ranging from the financial gain of the billings of that client, to the marketing kick of having a client like that on their roster, to the ego boost of representing such a client. But – and I emphasize that I have no idea what actually happened here – that dynamic can make outside counsel afraid to tell such a client that the client or its case, like the emperor in the famous story, has no clothes.

And in this risk – which as I say, I don’t know whether or not it played a role here – is the lesson for lawyers and, again, the people who hire them. Clients aren’t served, and lawyers aren’t doing their job, in that circumstance. Clients do not benefit from lawyers who are so beholden to them that they won’t tell them the truth, and lawyers are not living up to their obligations if they are afraid to tell the client the truth. Certain relationships require brutal honesty to work well, and the lawyer/client relationship – in both directions – is one of them.

And this then brings into focus a particular facet of Judge Berman’s ruling that really troubles me, both in terms of arbitration tactics and the decision making of those involved here, which is the Court’s focus on the fact that the NFL’s general counsel edited the Wells report (which is, at heart, essentially the prosecutorial findings on which the sanction against the accused rested) but was not required to testify in the arbitration. I am not going to pass judgment here on whether or not the general counsel, Pash, should have been required to testify or whether, instead, the arbitrator could have properly denied a request for his testimony. As I said, hindsight is 20/20 and, from this vantage point, after Judge Berman has spoken, it is easy to say that the arbitrator erred by denying a request for Pash’s testimony. In the course of a particular arbitration, however, there are valid arguments both ways as to whether testimony of a particular witness should be allowed, and I am not certain it is fair to say that, in real time during the arbitration, the answer to that question was always clear.

What I am concerned about, though, is the very fact that the NFL’s general counsel involved himself in this way in the development of the evidence and findings against Brady, i.e., of the Wells report itself. Why in the world would you allow such a senior executive, the legal centerpiece of a major corporation, to insert himself into the process in that way? Pash and his legal department had to have understood that they were putting him in harm’s way, and making him a potential witness in the arbitration. Worse yet, they had to have – or if not should have – seen that this would create the dynamic where either he would have to testify or the arbitrator would be put in the position of precluding his testimony, thereby creating grounds for having the arbitration ruling overturned by a court (as in fact happened). Everyone involved here is too experienced not to have seen this risk from a mile away – as trial lawyers like to say, this was no one’s first rodeo (this is a cliché lawyers at trials usually resort to so as to reassure the trial judge that the lawyers can be trusted to work something out among themselves without the judge’s involvement). So how was this allowed to occur? Was Pash’s team of lawyers afraid to speak truth to power and tell him to keep his distance, whether those were the lawyers in his own department or instead the NFL’s outside lawyers? Or did Goodell, essentially the CEO of a huge corporation, want him involved in that way and his general counsel didn’t want to tell him no?

There is a cliché relevant to both representing corporations as outside counsel and to being an in-house lawyer, which concerns the fear – sometimes legitimate – of business folk that the lawyers just say no about everything they want to do, rather than telling them how to do what they want to do. As I mentioned, this is sometimes a legitimate concern that non-lawyers have about their lawyers, whether outside counsel or resident in the corporation itself. But it is also true that there are times when lawyers – again whether in-house or outside counsel – have to say no, and have to advise their clients that what they want to do is a bad idea. I have no idea how Pash, an extraordinarily senior officer of a multi-billion dollar corporation, ended up in the middle of this mess as, of all things, a fact witness, but it should never have happened. Somewhere along the line, someone abdicated their responsibility of just plain saying no, it’s a bad idea.