No. 2018-01

IN THE

SUPREME COURT OF THE UNITED STATES

NATIONAL HOCKEY LEAGUE,

Petitioner,

v.

MICHAEL SCOTT and

NATIONAL HOCKEY LEAGUE PLAYERS’ ASSOCIATION,

Respondent.

ON WRIT OF CERTIORARI TO THE APPELLATE COURT

OF TULANIA

BRIEF FOR THE RESPONDENT

Attorneys for Respondent

Team 24

i

QUESTION PRESENTED

I. Whether the Court of Appeals correctly held that a National Hockey League Player’s

claims under Minnesota’s Drug and Alcohol Testing in the Workplace Act challenging

a suspension under a collectively bargained for drug policy are not preempted by

Section 301 of the Labor Management Relations Act.

II. Whether the Court of Appeals correctly set aside an arbitrator’s award sanctioning the

National Hockey League’s refusal to issue specific product warnings regarding the

presence of a banned substance in a dietary supplement because such an award violated

public policy.

STANDARD OF REVIEW

“The District Court’s ruling that the DATWA claims are preempted by section 301 is

subject to de novo review.” Bogan v. General Motors Corp., 500 F.3d 828, 832 (8th Cir. 2007).

Whether the district court properly granted the NHL’s motion for summary judgment is a

question of law that this court will review de novo. McLean v. Gordon, 548 F.3d 613, 616 (8th

Cir. 2008).

ii

TABLE OF CONTENTS

QUESTIONS PRESENTED............................................................................................................i

STANDARD OF REVIEW..............................................................................................................i

TABLE OF CONTENTS................................................................................................................ii

TABLE OF AUTHORITIES.....................................................................................................iii-iv

STATEMENT OF THE FACTS..................................................................................................1-3

PROCEDURAL HISTORY.........................................................................................................3-4

SUMMARY OF THE ARGUMENT..............................................................................................4

ARGUMENT...................................................................................................................................5

I. The Tulania Court of Appeals properly overruled the Petitioner’s Motion for Summary

Judgment because § 301 of the LMRA does not preempt Mr. Scott’s DATWA claim. ................ 5

A. Section 301 of the LMRA does not preempt Mr. Scott’s DATWA claim because the rights

asserted by Mr. Scott under Minnesota law and are independent of the CBA. .......................... 6

B. Section 301 of the LMRA does not preempt Mr. Scott’s DATWA claim because

resolution of the claim requires no interpretation of the CBA. ................................................... 9

C. Section 301 of the LMRA does not preempt Mr. Scott’s DATWA claim because § 301

does not provide employers and unions the power to contract for and exempt themselves from

illegal activity under state law. .................................................................................................. 11

II. The arbitration award that enforced the Players’ suspensions should be vacated because the

suspensions violate public policy.................................................................................................. 13

A. Dr. Schrute had a fiduciary duty to the Players, even in the absence of a contract creating

that relationship. ........................................................................................................................ 13

B. The NHL and Dr. Schrute’s failure to disclose the presence of the banned substance

Narcotussin in SuperDope is a breach of the fiduciary duty owed to the Players. ................... 17

C. Breach of a fiduciary duty is against explicit public policy and should not be sanctioned

by the arbitrator or this Court. ................................................................................................... 18

CONCLUSION..............................................................................................................................19

iii

TABLE OF AUTHORITIES

STATUTES

29 U.S.C. § 1109. .......................................................................................................................... 19

29 U.S.C. § 185(a) (2006). .............................................................................................................. 5

MINN. STAT. ANN. § 181.951 (2012).......................................................................................... 8

MINN. STAT. ANN. § 181.953 (2012)...................................................................................... 8, 9

MINN. STAT. ANN. § 181.955 (2012) ......................................................................................... 8

MINN. STAT. ANN. § 181.952 (2012).......................................................................................... 7

UNITED STATES SUPREME COURT

Allis-Chalmers Corp. v. Lueck, 471 U.S. 202 (1985). .................................................. 5, 10, 11, 12

Commonwealth Edison Co. v. Montana, 453 U.S. 609 (1981). .................................................... 12

Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246 (1994) ................................................................. 8

Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399 (1988). .................................... 5, 9, 10, 12

Livadas v. Bradshaw, 512 U.S. 107 (1994). ........................................................................... 10, 12

Maryland v. Louisiana, 451 U.S. 725 (1981). .............................................................................. 12

Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724 (1985). ............................................. 13

W.R. Grace & Co. v. Local Union 759, 461 U.S. 757 (1983)). .................................................... 18

UNITED STATES COURT OF APPEALS

Aaron Ferer & Sons, Ltd. v. Chase Manhattan Bank, Nat’l Asso., 731 F.2d 112 (2d Cir. 1984)).

................................................................................................................................................... 18

Ace Elec. Contractors v. IBEW, Local Union No. 292, 414 F.3d 896 (8th Cir. 2005) ................. 18

Atwater v. NFL Players Ass'n, 626 F.3d 1170 (11th Cir. 2010). .................................................. 11

Bogan v. GMC, 500 F.3d 828 (8th Cir. 2007) ...................................................................... 6, 9, 13

Cramer v. Consol. Freightways, Inc., 255 F.3d 683 (9th Cir. 2001). ..................................... 12, 13

Karnes v. Boeing Co., 335 F.3d 1189 (10th Cir. 2003). ............................................................. 7, 8

Keebler Co. v. Milk Drivers & Dairy Employees Union, Local No. 471, 80 F.3d 284 (8th Cir.

1996)). ....................................................................................................................................... 18

Meyer v. Schnucks Mkts., Inc., 163 F.3d 1048 (8th Cir. 1998)). .................................................... 6

Remington Rand Corp. v. Amsterdam-Rotterdam Bank, N.V., 68 F.3d 1478 (2d Cir. 1995). 17, 18

Stark v. Sandburg, Phx. & von Gontard, P.C., 381 F.3d 793 (8th Cir. 2004) .............................. 18

Trs. of the Twin City Bricklayers Fringe Benefit Funds v. Superior Waterproofing, Inc., 450 F.3d

324 (8th Cir. 2006). ............................................................................................................... 6, 10

UNITED STATES FEDERAL DISTRICT COURT

Holmes v. NFL, 939 F. Supp. 517 (N.D. Tex. 1996). ................................................................... 11

Lumbermens Mut. Cas. Co. v. Franey Muha Alliant Ins. Servs., 388 F. Supp. 2d 292 (S.D.N.Y.

2005).......................................................................................................................................... 14

Stringer v. NFL, 474 F. Supp. 2d 894 (S.D. Ohio 2007). ................................................... 6, 10, 11

iv

United Syndicate, Inc. v. Miller Features Syndicate, Inc., 216 F. Supp. 2d 198 (S.D.N.Y. 2002).

................................................................................................................................................... 14

STATE SUPREME COURT

Gonzalez v. Prestress Eng'g Corp., 503 N.E.2d 308 (1986). ....................................................... 12

STATE APPELLATE COURT

Kaufman v. Cohen, 760 N.Y.S.2d 157 (App. Div. 2003). ............................................................ 17

Sergeants Benevolent Ass’n Annuity Fund v. Renck, 796 N.Y.S.2d 77 (App. Div. 2005). .... 15, 16

Wiener v. Lazard Freres & Co., 672 N.Y.S.2d 8 (App. Div. 1998). ................................ 14, 15, 16

RESTATEMENTS

Restatement [Second] of Torts § 874............................................................................................ 14

SECONDARY SOURCES

Fiduciary, Bouvier Law Dictionary (Desk Ed. 2012). ........................................................... 13, 14

1

STATEMENT OF THE FACTS

Michael Scott is a member of the National Hockey League Players’ Association (NHLPA)

as well as an employee of the Minnesota Wild, L.L.C. R. at 3. The NHLPA and the National

Hockey League (NHL) have a Collective Bargaining Agreement (CBA) as of 2013. Id. Part of

the CBA is the NHL Policy on Anabolic Steroids and Related Substances (Policy), which prohibits

NHL players from using various performance-enhancing drugs and masking agents. Id. The

Policy says that players are personally responsible for the substances in their bodies, and warns

that “a positive test result will not be excused because a player did not know he was taking a

Prohibited Substance.” Id. The Policy gives the Commissioner the power to discipline players

with positive results. Id. The first positive test result subjects the players to a minimum twenty

game suspension but not in excess of twenty-five games. Id. Players subject to discipline can

“appeal to an arbitrator, who is either the Commissioner or his designee, whose decision

constitutes a full, final, and complete disposition of the appeal that is binding on all parties.” Id.

Dr. Dwight K. Schrute, the “Independent Administrator” of the Policy, administers and

oversees the testing procedures. Id. Dr. Schrute’s responsibilities include implementing the terms

of the Policy, determining the method to test the players, educating the players about the Policy,

and reporting positive test results to the Commissioner. R. at 3-4. Dr. Jim Halpert, as Consulting

Toxicologist, assists Dr. Schrute with these responsibilities. R. at 4. Neither Dr. Schrute nor Dr.

Halpert are affiliated with any NHL Club or the Commissioner’s office. Id.

In 2013, the NHL found out that SuperDope, a relaxation supplement, contained

Narcotussin, which is a prohibited substance under the Policy. Id. However, SuperDope did not

list Narcotussin as an ingredient. Id. Dr. Schrute informed Dr. Halpert of this discovery, and Dr.

2

Halpert then asked Creed Bratton, Director of the Sports Medicine Research Testing Laboratory,

to test SuperDope. Id.

On September 5, 2013, Mr. Bratton informed Dr. Schrute and Dr. Halpert that SuperDope

contained Narcotussin. Id. Phyllis Vance, Vice President of the Law and Labor Policy for the

NHL, was also informed of these test results. Id. Mrs. Vance and Dr. Halpert, against Mr.

Bratton’s request, refused to report to the Food & Drug Administration (FDA) that SuperDope

contained Narcotussin. Id. Thereafter, the NHL sent notice to the NHLPA that Dunder Mifflin,

the company that distributes SuperDope, was thenceforth a banned company, meaning that teams

and players were prohibited from doing business with Dunder Mifflin. Id. The NHL also

requested the NHLPA notify the players of this new SuperDope information. Id. The NHLPA

complied by relaying the NHL’s vague and ambiguous message to players, stating “the company

that produces and distributes SuperDope has been added to the list of prohibited supplement

companies,” and because of this new status, “players are not allowed to endorse any products made

by Dunder Mifflin.” Id. Dr. Halpert then sent an equally vague and ambiguous memorandum to

players telling them to avoid taking sleep-inducing supplements and reminding them of their strict

liability for banned substances under the Policy. Id. None of these communications included

information that SuperDope contained the prohibited substance Narcotussin. Id.

Mr. Scott used SuperDope the night before a scheduled preseason training camp

scrimmage. Id. SuperDope advertises and claims to induce a full night of deep, natural sleep. Mr.

Scott’s subsequent drug test returned a positive result for Narcotussin. Id. Mr. Scott was

immediately suspended for twenty games, pursuant to the Policy. Id. Dr. Schrute did not conduct

any confirmatory tests. Id. Three other players, including Stanley Hudson of the Chicago

Blackhawks, Toby Flenderson of the Las Vegas Golden Knights, and Oscar Martinez of the Los

3

Angeles Kings, were also suspended for twenty games after testing positive for Narcotussin.

Id. Mr. Scott, along with the three other players, appealed the suspensions to an arbitrator. Id.

At arbitration, the Players argued their positive test results should be excused because Dr.

Schrute and the NHL knew SuperDope contained Narcotussin, but did not inform the

Players. R. at 5. The Players further argued the sanctions imposed on them should be lifted

because Dr. Schrute had a fiduciary duty to give explicit warnings that SuperDope contained the

prohibited substance Narcotussin. Id. No Players disputed their positive test results, and they all

conceded they were aware of the vague and ambiguous sleep aid supplement warnings. R. at 4.

They also conceded that they were aware of the Policy’s strict liability standard for substances

ingested by players. Id. The arbitrator upheld their suspensions. R. at 5.

PROCEDURAL HISTORY

Mr. Scott filed suit against the NHL, Dr. Schrute, Dr. Halpert, and Mrs. Vance in Minnesota

District Court. Id. Mr. Scott’s complaint sought damages and an injunction against enforcement

of the arbitration award and alleged that the Policy violated Minnesota’s Drug and Alcohol Testing

in the Workplace Act (DATWA). Id. The Minnesota District Court granted Mr. Scott a temporary

restraining order to bar his suspension, finding that “the NHLPA established a likelihood of

success on its claim that the Policy is in violation of [DATWA].” R. at 14. The order did not

apply to the other players because they were not employed by the state of Minnesota. Id. The

NHL then removed the case to federal court. R. at 5. In federal court, Mr. Scott’s case was

consolidated with the NHLPA’s action to vacate the arbitration awards under the Labor

Management Relations Act (LMRA) for violating public policy. Id. The NHLPA amended its

complaint to assert that Mr. Scott’s suspension violated DATWA. R. at 14. The United States

District Court for the Southern District of Tulania found against Mr. Scott, granting the NHL’s

4

Motion for Summary Judgment. Id. The court held Mr. Scott’s DATWA claims was preempted

by Section 301 of the LMRA, the NHL had no duty to disclose that SuperDope contained

Narcotussin, and the award did not violate public policy. Id.

On appeal, the Tulania Court of Appeals reversed the lower court’s decision and found in

favor of Mr. Scott. R. at 20. The Court of Appeals held that Section 301 of the LMRA does not

preempt Mr. Scott’s DATWA claim. R. at 18. The court also reasoned that the arbitrator’s award

violated public policy because it sanctioned a breach of fiduciary duty, namely Dr. Schrute and

Mrs. Vance’s willful refusal to disclose Narcotussin’s presence in SuperDope to NHL players. R.

at 20. The award “jeopardized the health of NHL players and upheld suspensions for actions that

were the direct result of the League's and Dr. Schrute’s own misconduct.” Id.

SUMMARY OF THE ARGUMENT

The Respondent respectfully requests this Court affirm the rulings of the Court of Appeals.

The Tulania Court of Appeals properly overruled the Petitioner’s Motion for Summary Judgment

because § 301 of the LMRA does not preempt Mr. Scott’s DATWA claim. The rights asserted by

Mr. Scott under Minnesota law and are independent of the CBA. Resolution of Mr. Scott’s claim

requires no interpretation of the CBA. Section 301 does not provide employers and unions the

power to contract for and exempt themselves from illegal activity under state law.

The arbitration award that enforced the Players’ suspensions should be vacated because the

suspensions violate public policy. Dr. Schrute had a fiduciary duty to the Players, even in the

absence of a contract creating that relationship. The NHL and Dr. Schrute’s failure to disclose the

presence of the banned substance Narcotussin in SuperDope is a breach of their fiduciary duty

owed to the Players. Breach of a fiduciary duty is against explicit public policy and should not be

sanctioned by the arbitrator or this Court.

5

ARGUMENT

I. The Tulania Court of Appeals properly overruled the Petitioner’s Motion for

Summary Judgment because § 301 of the LMRA does not preempt Mr. Scott’s

DATWA claim.

Section 301 of the LMRA does not preempt a claim that is independent of a collective

bargaining agreement, and where resolution of the claim requires no interpretation of the collective

bargaining agreement. Section 301(a) of the Labor Management Relations Act reads:

[s]uits for violation of contracts between an employer and a labor organization representing

employees in an industry affecting commerce as defined in this Act, or between any such

labor organizations, may be brought in any district court of the United States having

jurisdiction of the parties, without respect to the amount in controversy or without regard

to the citizenship of the parties.

29 U.S.C. § 185(a) (2006). This statute mandates federal rules of law to govern suits for breach

of a collective bargaining agreement. This Court held that “the substantive law to apply in suits

under § 301(a) is federal law.” Textile Workers Union of Am. v. Lincoln Mills of Ala., 353 U.S.

448, 456 (1957). This Court reaffirmed that notion in Allis-Chalmers Corp. v. Lueck by holding

that “a suit in a state court alleging a violation of a provision of a labor contract must be brought

under § 301 and be resolved by reference to federal law.” Allis-Chalmers Corp. v. Lueck, 471 U.S.

202, 210 (1985). The legislature enacted the law because “the application of state law . . . might

lead to inconsistent results since there could be as many state-law principles as there are States. . .

.” Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 406 (1988). The legislature reasoned

the use of federal rules of law would “ensure uniform interpretation of collective-bargaining

agreements.” Id. at 404. However, § 301 does not preempt “every dispute concerning employment,

or tangentially involving a provision of a collective-bargaining agreement.” Allis-Chalmers, 471

U.S. at 211.

For a claim to survive § 301 preemption, the Court must determine whether it can enforce

the state law without any reference to an interpretation of the CBA. Trs. of the Twin City

6

Bricklayers Fringe Benefit Funds v. Superior Waterproofing, Inc., 450 F.3d 324, 330 (8th Cir.

2006). Bogan v. GMC provides a two-part test to determine whether a claim will survive § 301

preemption. Bogan v. GMC, 500 F.3d 828, 832 (8th Cir. 2007) (citing Meyer v. Schnucks Mkts.,

Inc., 163 F.3d 1048, 1050 (8th Cir. 1998)). First, the Court must determine whether the “state-law

claim is ‘based on’ the relevant provision of the CBA” and second, the Court must determine

“whether the state-law claim is ‘dependent upon analysis’” of the relevant CBA. Id. Section 301

does not preempt a claim if the Court finds that the claim is based solely on state law, and requires

no interpretation of the CBA.

Mr. Scott’s claim is entirely based on Minnesota’s Drug and Alcohol Testing in the

Workplace Act and resolution of his claim requires no interpretation of the CBA. For these reasons

the Court of Appeals properly determined that Mr. Scott’s DATWA claim is valid and overruled

the Petitioner’s Motion for Summary Judgment.

A. Section 301 of the LMRA does not preempt Mr. Scott’s DATWA claim because

the rights asserted by Mr. Scott under Minnesota law and are independent of the

CBA.

Mr. Scott’s DATWA claim does not mention any rights under the CBA. For a claim to

survive § 301 preemption, it must pass the Bogan two-part test. Bogan, 500 F.3d at 832. Part one

of the test is to determine whether the claim is “based on” the relevant provision of the CBA. Id.

If the right is based on state law, the claim survives part one of the Bogan preemption test. Id.

This means that the CBA would have to bestow the right upon which the claim is based. Id. “A

court must ascertain whether the right claimed by the plaintiff is created by the collective

bargaining agreement or by state law. If the right is created by the collective bargaining agreement,

the claim will be preempted by § 301.” Stringer v. NFL, 474 F. Supp. 2d 894, 900 (S.D. Ohio

2007).

7

In a highly analogous case to the one at hand, Karnes v. Boeing Co., the United States

Court of Appeals for the Tenth Circuit held that the state law claim was “clearly independent of

the CBA and . . . not subject to § 301 preemption.” Karnes v. Boeing Co., 335 F.3d 1189, 1194

(10th Cir. 2003). In Karnes, the plaintiff filed a complaint against his former employer, Boeing,

under Oklahoma’s Standards for Workplace Drug and Alcohol Testing Act. Id. at 1192. The court

determined that “in order to establish a violation of this section, [the plaintiff] must show that

Boeing (1) discharged him based on his drug test, and (2) failed to confirm the result through a

second test. Neither inquiry requires a court to interpret, or even refer to, the terms of a CBA.”

Id. at 1193. The plaintiff’s rights under the state law were independent of those provided by the

CBA. The claim only asserted a violation of state law rights and not a violation of the CBA,

therefore, the court ruled that § 301 of the LMRA did not preempt the claim.

In the present case, Mr. Scott filed suit against the NHL for violating Minnesota’s Drug

and Alcohol Testing in the Workplace Act. DATWA establishes minimum standards and

requirements for an employer’s drug and alcohol testing of employees in Minnesota. MINN.

STAT. ANN. § 181.952 subdiv. 1 (2012). DATWA mandates that the drug policies of Minnesota

employers provide at a minimum:

(1) the employees or job applicants subject to testing under the policy; (2) the

circumstances under which drug or alcohol testing may be requested or required; (3) the

right of an employee or job applicant to refuse to undergo drug and alcohol testing and the

consequences of refusal; (4) any disciplinary or other adverse personnel action that may be

taken based on a confirmatory test verifying a positive test result on an initial screening

test; (5) the right of an employee or job applicant to explain a positive test result on a

confirmatory test or request and pay for a confirmatory retest; and (6) any other appeal

procedures available.

Id. § 181.952 subdiv. 1(1)-(6). The Act does not limit parties to a CBA from agreeing to a drug

and alcohol testing policy “that meets or exceeds, and does not otherwise conflict with, the

minimum standards and requirements for employee protection in [the Act].” Id. § 181.955 subdiv.

8

1. The Act also allows for professional athletes to be randomly drug tested so long as the random

tests are consistent with the CBA. Id. § 181.951 subdiv. 4(2).

Furthermore, DATWA requires employers to provide an employee who tests positive for

a prohibited substance with “written notice of the right to explain the positive test,” an opportunity

to explain the result, and the ability to “request a confirmatory retest of the original sample.” Id.

§ 181.953 subdiv. 6(a)-(c). Under DATWA, employers are not allowed to “discipline an employee

on the basis of a positive test result from an initial screening test that has not been verified by a

confirmatory test.” Id. § 181.953 subdiv. 10(a).

Mr. Scott’s claims come directly from DATWA. He does not allege that the NHL violated

the Policy or any other provision within the CBA, just the Minnesota state law. This Court has no

need to consider the Policy when determining whether the NHL violated DATWA. This Court

only ought to compare the conduct of the NHL to the procedures required by DATWA. See

Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 266 (1994) (“Purely factual questions about an .

. . employer’s conduct and motives do not ‘require a court to interpret any term of a collective

bargaining agreement.’”) Like Karnes, Mr. Scott must only prove the elements of the alleged

DATWA violations. Karnes, 335 F.3d at 1194.

The NHL violated multiple provisions of Minnesota’s DATWA. When Mr. Scott tested

positive for Narcotussin, he was immediately suspended for twenty games. R. at 4. An arbitrator

upheld his suspension shortly thereafter. R. at 5. The NHL violated DATWA when it failed to

provide Mr. Scott with “written notice of [his] right to explain the positive test” after the initial

test. Id. § 181.953 subdiv. 6(b). Perhaps the most egregious and indisputable DATWA violation

occurred when the NHL suspended Mr. Scott immediately after the initial screening test. Under

DATWA, the NHL cannot discipline Mr. Scott unless it verifies the initial test results through a

9

confirmatory test. Id. § 181.953 subdiv. 10(a). Because the rights asserted in Mr. Scott’s claim

are based entirely on Minnesota’s DATWA and are independent of the CBA, the claim survives

the first part of the Bogan § 301 preemption test.

The Petitioner argues that because the worker has two parallel claims, one under contract

and one under state law, the state claim is automatically the same as the contract claim. They

argue that when a worker is a party to a CBA, and thus has a potential federal contractual remedy

against her employer, that remedy is exclusive, and she has no state remedies. This Court

disagreed with that reasoning in Lingle when it held,

Even if dispute resolution pursuant to a collective-bargaining agreement, on the one hand,

and state law, on the other, would require addressing precisely the same set of facts, as long

as the state-law claim can be resolved without interpreting the agreement itself, the claim

is ‘independent’ of the agreement for § 301 pre-emption purposes.

Lingle, 486 U.S. at 409-10. Using the reasoning in Lingle, DATWA applies to all employees,

regardless of a whether there is a CBA. Id. It does not matter if the possible claims involve the

same set of facts. For example, if the employer violates the minimum requirements of the state

law and the CBA, an employee could have both a state law claim and a breach of contract claim.

However, if the employer complies with the state law requirements but not the CBA, the employee

would only have the breach of contract claim. If resolution of the state law claim is possible

without interpretation of the CBA, the claim will survive § 301 preemption.

B. Section 301 of the LMRA does not preempt Mr. Scott’s DATWA claim because

resolution of the claim requires no interpretation of the CBA.

The second prong of the Bogan test is whether the state law claim is “dependent on an

analysis of the relevant CBA.” Bogan, 500 F.3d at 832. While a claim can be based on state law,

its resolution may require an interpretation of the CBA. “If resolution of the state law claim is

‘substantially dependent’ on an analysis of the terms of the collective bargaining agreement, or

‘inextricably intertwined’ with it, the claim will be preempted by § 301.” Stringer, 474 F. Supp.

10

2d at 900 (citing Allis-Chalmers, 471 U.S. at 220). If the claim’s resolution does not require CBA

interpretation, then the claim survives § 301 preemption. Lingle, 486 U.S. at 410.

As previously stated, the Court has no need to consult the CBA to resolve Mr. Scott’s

DATWA claim. The Court can simply apply the conduct of the Petitioner to the minimum

requirements of DATWA to see if they followed the necessary procedures. In this instance, the

Petitioner did not follow the necessary procedures, and therefore violated DATWA. The

DATWA claim is completely independent of and requires no interpretation of the CBA.

Even if resolution of the claim required reference to the CBA, § 301 would not preempt it.

“The Supreme Court has distinguished [cases] which require interpretation or construction of the

CBA from those which only require reference to it. Twin City Bricklayers, 450 F.3d at 330. In

Livadas v. Bradshaw, this Court held that § 301 did not preempt a state law claim when it only

referenced the CBA to compute the proper damages. Livadas v. Bradshaw, 512 U.S. 107, 124

(1994).

Petitioner argues that DATWA predicates relief on interpretation and application of the

CBA and its drug testing Policy. R. at 7. They argue that Mr. Scott’s claim cannot succeed without

interpreting certain terms of the CBA to determine whether its terms meet or exceed DATWA’s

threshold. R. at 8. This reasoning however, is incorrect. As stated above, Mr. Scott’s DATWA

claim can be satisfied by applying the Petitioner's conduct to the minimum requirements of

DATWA. The claim would at most only require a reference to the CBA to determine whether the

CBA “meets or exceeds” the minimum requirements. Simply referencing the CBA does not

subject the claim to § 301 preemption. Because this specific claim is not a claim for breach of

contract, the CBA needs no consideration.

11

This case is distinguishable from Stringer and Atwater where § 301 preempts state-law

claims because the court had to interpret the CBAs to determine what duty of care the NFL owed

to its players. Stringer, 474 F. Supp. 2d at 894; Atwater v. NFL Players Ass'n, 626 F.3d 1170 (11th

Cir. 2010). In these cases, however, the state laws did not expressly say what duty of care the

league owed to the players. The CBA is what established the duty of care. For this reason, the

court had to interpret the CBA to determine the duty of care the league owed. Holmes is also

distinguishable as an example of preemption due to interpretation of the CBA. Holmes v. NFL,

939 F. Supp. 517, 519 (N.D. Tex. 1996). In Holmes, an NFL employee tested positive for

marijuana. Id. The employee sued the league for fraudulent inducement, because he thought the

drug test would only reveal if he had steroids in his system. Id. at 520. He claimed that the NFL

tricked him into taking a drug test for marijuana. Id. The court had to interpret the CBA to see

whether the employee and the league had agreed to test the players for marijuana. Id.

In Mr. Scott’s case, no interpretation of the CBA is necessary. The Court does not need to

reference the CBA to see if it meets the minimum requirements of DATWA, because Mr. Scott’s

claim is not a breach of contract claim. DATWA specifically states the minimum requirements

the NHL needs to abide by. The only thing that matters is in this case is whether the Petitioner’s

conduct met the minimum DATWA requirements, and in this case, it did not.

C. Section 301 of the LMRA does not preempt Mr. Scott’s DATWA claim because §

301 does not provide employers and unions the power to contract for and exempt

themselves from illegal activity under state law.

State laws and regulations still bind the Petitioner, even though they are a party to the CBA.

The Petitioner cannot avoid certain regulations by claiming § 301 preempts all state laws. The

Petitioner argues that denying preemption and making the NHL abide by state regulations would

render the uniform enforcement of the NHL’s drug testing policy nearly impossible. This Court

addressed this issue in Allis-Chalmers. Allis-Chalmers, 471 U.S. at 211. Although due to the

12

specific facts of Allis-Chalmers this Court ruled in favor of § 301 preemption, this Court observed

that not all disputes concerning employment and collective bargaining agreements are preempted

by § 301. Id. This Court stated:

[T]here [is not] any suggestion that Congress, in adopting § 301, wished to give the

substantive provisions of private agreements the force of federal law, ousting any

inconsistent state regulation. Such a rule of law would delegate to unions and unionized

employers the power to exempt themselves from whatever state labor standards they

disfavored. Clearly, § 301 does not grant the parties to a collective-bargaining agreement

the ability to contract for what is illegal under state law. In extending the pre-emptive effect

of § 301 beyond suits for breach of contract, it would be inconsistent with congressional

intent under that section to pre-empt state rules that proscribe conduct, or establish rights

and obligations, independent of a labor contract.

Id. at 211-12. This Court determined that employers cannot selectively exempt themselves from

state labor regulations. “[Section] 301 cannot be read broadly to pre-empt nonnegotiable rights

conferred on individual employees as a matter of state law.” Livadas, 512 U.S. at 123. The Ninth

Circuit Court of Appeals made a similar finding in Cramer v. Consol. Freightways, Inc. when it

held “the LMRA did not give employers and unions the power to displace any state regulatory

laws they found inconvenient.” Cramer v. Consol. Freightways, Inc., 255 F.3d 683, 695 (9th Cir.

2001).

This Court has also held that “[p]re-emption of state law by federal statute or regulation is

not favored ‘in the absence of persuasive reasons—either that the nature of the regulated subject

matter permits no other conclusion, or that the Congress has unmistakably so ordained.’”

Commonwealth Edison Co. v. Montana, 453 U.S. 609, 634 (1981). Allowing contracts to preempt

state laws would disrupt federalism. Maryland v. Louisiana, 451 U.S. 725, 746 (1981).

Establishing labor standards falls within the traditional police power of the State, and should not

be lightly inferred. Lingle, 486 U.S. at 412. If the Court allows preemption, then it is ultimately

giving individual contracts more power than state laws. Gonzalez v. Prestress Eng'g Corp., 503

N.E.2d 308, 313 (1986). If the state law is preempted, it would penalize workers who have chosen

13

to join a union by preventing them from benefiting from state labor regulations. Metropolitan Life

Ins. Co. v. Massachusetts, 471 U.S. 724, 756 (1985). Likewise, being a party of the CBA should

not disadvantage Mr. Scott by depriving him of the benefit of state labor regulations.

The Petitioner cannot exempt themselves from certain state laws that they find unfavorable.

While enforcement of DATWA might make uniform enforcement of the Policy more difficult, it

certainly does not render enforcement impossible. Mr. Scott is an employee in Minnesota and

therefore protected by DATWA. “Employees ha[ve] a right to assume their employer w[ill] obey

the law.” Cramer, 255 F.3d at 695. Being a party to the CBA does not take away Mr. Scott’s state

rights. He has the right to assume his employer will follow the state laws. Section 301 of the

LMRA does not preempt Mr. Scott’s claim, because § 301 does not give the Petitioner the power

to exempt themselves from state regulations. The only questions to be answered under § 301 are

whether the claim is independent of the CBA and whether resolution of the claim requires

interpretation of the CBA. Bogan, 500 F.3d at 832. Mr. Scott’s claim satisfies both prongs of the

Bogan test, and therefore survives § 301 preemption.

II. The arbitration award that enforced the Players’ suspensions should be vacated

because the suspensions violate public policy.

Dr. Schrute and the NHL’s fiduciary duty to the Players was knowingly and intentionally

breached when the they failed to inform the players that SuperDope contained the banned

substance Narcotussin. The arbitration award should be vacated because the award sanctions the

NHL’s knowing and intentional breach of their fiduciary duty.

A. Dr. Schrute had a fiduciary duty to the Players, even in the absence of a contract

creating that relationship.

A fiduciary is a person that owes a higher level of care than the usual commercial or social

relationship. Fiduciary, Bouvier Law Dictionary (Desk Ed. 2012). The fiduciary needs to place

14

the interests of the person relying on them above the fiduciary’s own interests. Id. Fiduciaries

also have the affirmative duty to act for those people that are relying on the good faith of the

fiduciary. Id.

Under New York law, a fiduciary relationship “‘is not dependent solely upon an agreement

or contractual relation between the fiduciary and the beneficiary but results from the relation.’”

Lumbermens Mut. Cas. Co. v. Franey Muha Alliant Ins. Servs., 388 F. Supp. 2d 292, 305 (S.D.N.Y.

2005) (quoting Restatement [Second] of Torts § 874, comment b). It is impossible to state the

exact limits of what constitutes a fiduciary relationship, but the relationship can be found in the

case “‘in which influence has been acquired and abused, in which confidence has been reposed

and betrayed.’” Lumbermens Mut. Cas. Co., 388 F. Supp. 2d at 305 (quoting United Syndicate,

Inc. v. Miller Features Syndicate, Inc., 216 F. Supp. 2d 198, 218 (S.D.N.Y. 2002)). When

determining if a fiduciary relationship exists, under New York law, “courts conduct a fact-specific

inquiry into whether a party reposed confidence in another and reasonably relied on the other’s

superior expertise or knowledge.” Id.

New York courts have found that it is not mandatory that a fiduciary relationship be

formalized in writing. Wiener v. Lazard Freres & Co., 672 N.Y.S.2d 8, 14 (App. Div. 1998). In

Weiner, the issue was the nature of the relationship between the plaintiffs and the defendants. Id.

at 11. The plaintiffs were partners in a realty company that owned an office building and had

defaulted on the building’s mortgage. Id. Plaintiffs attempted to raise sufficient funds that would

allow them to retain ownership of the building. Id. The plaintiffs initiated contact with the

defendants to get a second mortgage for the balance of the purchase price. Id. After receiving an

offer from the defendants, the plaintiffs decided to work with the defendants in dealing with the

bank. Id. The plaintiffs believed that the defendants were actively negotiating with the bank on

15

their behalf in order to purchase the property. Id. Acting on this belief, the plaintiffs reached an

agreement with the bank by which the plaintiffs would transfer the property to the bank in

exchange for the settlement of the plaintiffs’ personal guaranty. Id. at 12. However, contrary to

the agreement, the defendants decided not to go ahead with the plan and instead entered into a

relationship with Zapco in which Zapco would acquire the property from the bank on terms that

the defendant was ostensibly negotiating on behalf of the plaintiffs. Id. The plaintiffs claimed that

this was a clear violation and breach of the fiduciary duty that the defendant owed. Id.

The court in Wiener noted that the plaintiffs alleged that they had hired the defendants

because they had “relied upon [them] specifically because of [defendants’] expertise and

reputation, because of [their] alleged ‘inside connection’ with a highly placed [bank] executive

and because [the bank] apparently preferred to deal with plaintiffs through [defendant] rather than

directly with plaintiffs.” Id. at 15. The court reversed the finding of the lower court and found

that the plaintiffs’ claim for breach of fiduciary duty should not have been dismissed against the

defendant. Id. The court stated that, “Beyond what may be memorialized in writing, a court will

look to whether a party reposed confidence in another and reasonably relied on the other’s superior

expertise or knowledge.” Id. at 14.

In Sergeants Benevolent Ass’n Annuity Fund v. Renck, the plaintiff was a trust that

managed annuity payments on behalf of police sergeants and their beneficiaries. Sergeants

Benevolent Ass’n Annuity Fund v. Renck, 796 N.Y.S.2d 77, 78 (App. Div. 2005). The defendants

were alleged to have breached a fiduciary obligation by failing to advise the Fund properly,

overcharging for commissions and retaining, for their own personal benefit, parts of the

commissions that were supposed to be refunded to the Fund. Id. The plaintiffs alleged that because

the defendants “held themselves out as experienced in the field of investment consulting and

16

management, the Trustees, who did not possess sophisticated knowledge of investment

management relied on their expertise.” Id. at 79.

The court in Sergeants Benevolent Ass’n Annuity Fund concluded that the factual

allegations of the plaintiffs’ complaint stated cognizable claims against the defendants for breach

of a fiduciary duty. The court cited Wiener in stating that the plaintiffs had reasonably relied on

the defendant’s “superior expertise or knowledge.” Id. (quoting Wiener, 672 N.Y.S.2d at 8).

The record states that a primary concern that underlies the terms of the Policy is the adverse

health effects of using substances that are prohibited by the NHL. R. at 19. Dr. Schrute was the

Independent Administrator of the Policy and had the express duty to educate the Players about

substances that were prohibited by the NHL. The NHL’s Policy states that, “In addition, the

Independent Administrator will make himself available for consultation with Players and Club

physicians, oversee violated protocols, oversee the development of educational materials, and

participate in research on anabolic steroids.” R. at 19. Players were told if they needed additional

information about the sleep supplements, they should contact Dr. Schrute. Furthermore, Dr.

Schrute promised in a memorandum sent to all players that he would “continue to provide NHL

players with information on the subject throughout the year.” R. at 19.

It is clear through statements made by the NHL and Dr. Schrute that they were the

commanding sources for information about the ingredients in various dietary supplements. Dr.

Schrute testified that the Policy’s efforts to “educate and warn” were part of a continuing obligation

to the Players that is included within the scope of his duties. R. at 20. Through these statements,

the Players reasonably relied on the NHL and Dr. Schrute’s “superior expertise and knowledge”

regarding “matters within the scope of the relation.”

17

B. The NHL and Dr. Schrute’s failure to disclose the presence of the banned

substance Narcotussin in SuperDope is a breach of the fiduciary duty owed to

the Players.

The New York Appellate Court ruled that failure to disclose can give rise to a breach of a

fiduciary duty. Kaufman v. Cohen, 760 N.Y.S.2d 157, 162 (App. Div. 2003). In Kaufman v.

Cohen, the plaintiffs entered into a partnership with the defendant with the purpose of developing

commercial property. Id. The plaintiffs and defendant were not able to make a commercial success

and defaulted on an outstanding mortgage. Id. The plaintiffs alleged that around the time of the

foreclosure, the defendant represented to the plaintiffs that their partnership interest could not be

salvaged and that they should let the interest lapse. Id. The plaintiffs alleged that the defendant’s

representation was false, and was known to the defendant to be a false representation as evidenced

by the fact that the defendant secretly agreed with new financial partners to reacquire a building

out of foreclosure at a substantial discount, while excluding the plaintiffs. Id. The plaintiffs were

damaged as a result of the defendant’s breach. Id. at 165. The defendant’s failure to disclose facts

to the plaintiffs known to the defendant is enough to constitute fraud when a fiduciary duty exists.

Id.

The United States Court of Appeals for the Second Circuit stated that there are

circumstances that impose a duty to disclose even in the absence of a fiduciary relationship.

Remington Rand Corp. v. Amsterdam-Rotterdam Bank, N.V., 68 F.3d 1478, 1484 (2d Cir. 1995).

While the court in Remington Rand Corp. did not find that there was a duty to disclose in that case,

the court stated that there may be a duty to disclose if: “(1) one party makes a partial or ambiguous

statement that requires additional disclosure to avoid misleading the other party, or (2) ‘one party

possesses superior knowledge, not readily available to the other, and knows that the other is acting

18

on the basis of mistaken knowledge.’” Id. (quoting Aaron Ferer & Sons, Ltd. v. Chase Manhattan

Bank, Nat’l Asso., 731 F.2d 112, 123 (2d Cir. 1984)).

In the instant case, the statement made by Dr. Schrute to the Players regarding SuperDope

was partial and ambiguous. Dr. Schrute learned that SuperDope contained the banned substance

Narcotussin, and knew that the SuperDope label did not disclose the presence of Narcotussin.

SuperDope was not ever listed as a banned substance, but players were instead told not to endorse

any product made by Dunder Mifflin. The Players did not have knowledge that the banned

substance Narcotussin was present in SuperDope. The statements made by the NHL and Dr.

Schrute were ambiguous and additional disclosure was not used to avoid misleading the players.

Additionally, Dr. Schrute held himself out to be the final authority on the substances that

are banned under the Policy, contributing to the existence of fiduciary relationship. Dr. Schrute’s

willful failure to disclose the known ingredients in SuperDope should be regarded as a breach of

the fiduciary duty to disclose.

C. Breach of a fiduciary duty is against explicit public policy and should not be

sanctioned by the arbitrator or this Court.

In Stark v. Sandburg, Phoenix & von Gontard, the Eighth Circuit stated that courts should

afford “‘an extraordinary level of deference’ to the underlying award. . . .” Stark v. Sandburg, Phx.

& von Gontard, P.C., 381 F.3d 793, 798 (8th Cir. 2004) (quoting Keebler Co. v. Milk Drivers &

Dairy Employees Union, Local No. 471, 80 F.3d 284, 287 (8th Cir. 1996)). However, the Eighth

Circuit also states that an exception to that rule exists “when the contract ‘violates some explicit

public policy.’” Ace Elec. Contractors v. IBEW, Local Union No. 292, 414 F.3d 896, 900 (8th Cir.

2005) (quoting W.R. Grace & Co. v. Local Union 759, 461 U.S. 757, 766 (1983)).

29 U.S.C. § 1109 shows just how deeply entrenched fiduciary duties are in public policy

by stating under what circumstances a person is liable for breach of a fiduciary duty. 29 U.S.C. §

19

1109. This section of the United States Code states that, “Any person who is a fiduciary with

respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon

fiduciaries by this title shall be personally liable. . . .” Id.

The arbitrator’s award in the present case should be vacated under the public policy

exception set out by the Eighth Circuit. By suspending the Players, the arbitrator sanctioned the

willful breach of a fiduciary duty by Dr. Schrute. Furthermore, there are health and safety concerns

that go along with the failure to disclose the known ingredients of SuperDope. If the Players had

been given the information that was promised by Dr. Schrute, they likely would not have taken

SuperDope. The future implications of the arbitrator sanctioning the willful nondisclosure by Dr.

Schrute may create greater adverse health effects for the Players if the NHL and Dr. Schrute are

allowed to withhold known information about banned substances. Dr. Halpert, the toxicologist,

testified that he informed Dr. Schrute that SuperDope contained Narcotussin even though it was

not included in the list of ingredients, and that “there should be some concern about the potential

adverse effects on the health of players who may be taking this drug without proper medical

supervision.” R. at 20.

There were serious health risks that were known to Dr. Schrute about the ingredients of

SuperDope. Dr. Schrute should have informed the players that there could be health risks involved

with taking SuperDope. This breach of the duty to inform the players of the ingredients in

SuperDope should not be sanctioned, and the arbitrator’s award should be vacated.

CONCLUSION

For the above-mentioned reasons, the Respondent respectfully requests this Court affirm

the rulings of the Court of Appeals.