MINNEAPOLIS (AP) — A $4 billion lawsuit from the players union accusing NFL team owners of setting a secret salary cap in 2010 was kept alive by a federal appeals court Friday as the sniping between the two sides persists long after the end of the lockout.
The 8th U.S. Circuit Court of Appeals in St. Louis partially reversed a federal judge’s order that had rejected the union’s collusion claim, sending the case back to U.S. District Judge David Doty for further proceedings. The three-judge appeals court panel that heard oral arguments in January disagreed with Doty on one of the union’s two arguments for pursuing damages despite the 2011 collective bargaining agreement that was supposed to relinquish the union’s right to sue for alleged breaches of the old CBA.
The NFL called the appeals court decision “entirely procedural in nature” and said it’s “far from validating” the claims of the NFL Players Association.
“The Court specifically highlighted the heavy burden that the NFLPA faces in establishing this claim, and we remain highly confident that the claim will be dismissed yet again,” the NFL said in a written statement.
The league, however, could be forced to make public otherwise-confidential financial and strategic information in court, which the union has pushed for all along.
“We are pleased that the Eighth Circuit ruled that players have the opportunity to proceed with their claims,” the NFLPA said. “Through discovery and a hearing, we can understand how collusion took place. We have notified the NFL of its obligations to preserve all relevant documents and communications.”
The collusion claim seeking at least $4 billion in relief for the players was originally filed in May 2012, less than a year after the new CBA was implemented following a five-month lockout. The final year of the prior CBA was supposed to be “uncapped,” but the union cited public references by New York Giants owner John Mara and NFL Commissioner Roger Goodell as evidence that a salary cap existed and claimed a loss of $1 billion in cumulative compensation.
Dallas and Washington were penalized for overloading contracts in that 2010 season despite league warnings, and the NFL in 2012 penalized them by taking away $10 million in cap space from the Cowboys and $36 million from the Redskins.
Doty’s oversight of the 1993 Reggie White class-action settlement was marked by mostly player-friendly rulings. The league lost enough key decisions under his jurisdiction that it twice tried to have him removed from his role as the sport’s legal referee, alleging partiality.
But in December 2012 he handed the union a rare defeat, pointing to the new CBA language that dismissed all prior claims and prevented the players from reopening the White settlement that served as the backbone for the old CBA to sue. The NFLPA appealed soon after.
The 8th Circuit panel — chief judge William Riley and circuit judges Roger Wollman and Bobby Shepherd — has traditionally tilted pro-business, but this was a win for labor. The appeals court sided with Doty in ruling the alleged collusion did not invalidate the 2011 dismissal of claims because the settlement has been treated more like a contract than a true class action.
However, the appeals judges disagreed with Doty on this: Under a federal rule authorizing relief in exceptional cases where the party being sued disingenuously reached the settlement, the union should be allowed to argue the merit of its lawsuit despite the 2011 dismissal.
“The Association bears a heavy burden in attempting to convince the district court that the dismissal was fraudulently procured,” the judges wrote. “We hold only that the Association should be given the opportunity to meet this burden.”