Petition for Rehearing — Brocail v. Detroit Tigers, Inc. (No. 09-72)

Court,

FILED

OCT 27 2009

OFFICE OF THE CLERK |

3u The

Supreme Court of the Anited States

@

DOUGLAS K. BROCAIL,

Petitioner,

V.

DETROIT TIGERS, INC.,

Respondent.

On Petition For Writ Of Certiorari

To The Court Of Appeals

For The Fourteenth District Of Texas

PETITION FOR REHEARING

LEVON G. HOVNATANIAN

MARTIN, DISIERE, JEFFERSON

& WispoM, L.L.P.

808 Travis, Suite 1800

Houston, Texas 77002

(713) 632-1700 — Telephone

(713) 222-0101 — Facsimile

Attorney for Petitioner

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831

TABLE OF CONTENTS

TABLE OF AUTHORITIES .........

PETITION FOR REHEARING.

I INTRODUCTION

Bs ie We Bo once vets ren tnksssnwentccncescevsssnnsesss

Ii]. PRINCIPLES OF SECTION 301 PRE-

EMPTION

IV. GROUND FOR REHEARING................... ,

A. Section 301 Preemption And The

Reliance Element Of A State-Law

Fraud Claim — The Third Circuit Gets

It Right

Section 301 Preemption And The

Reliance Element Of A State-Law

Fraud Claim — The Eighth Circuit

Gets It Wrong

V. THE COURT SHOULD GRANT REVIEW... 14

GOOD FAITH CERTIFICATION OF COUNSEL.... 15

TABLE OF AUTHORITIES

CASES

Allis-Chalmers Corp. v. Lueck, 47]

Beidleman v. Stroh Brewery Co., 182 F.3d

(3d Cir. 1999)

Brocail v. Detroit Tigers, Inc., 268 S.W.3d 90

(Tex. App. — Houston [14th Dist.] 2008, pet.

denied)

Cramer v. Consolidated Freightways, Inc., 25!

F.3d 683 (9th Cir. 2001) (en banc)

Felix v. Lucent Techs., Inc., 387 F.3d 1146 (10th

Cir. 2004)

Foy vu. Pratt & Whitney Group, 127 F.3d 229 (2d

Cir. 1997)

Kittle v. Prudential Ins.

1029 (S.D. Ind. 2000)

Lingle v. Norge Diviston of Magic Chef, Ine.

486 U.S. 399 (1988) . 4,6, 8, 13,

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

Loewen Group Intl v. Haberichter, 65

1417 (7th Cir. 1995)

Merrill Lynch, Pierce, Fenner & Smith

Barchman, 916 F.Supp. 845 (N.D. Ill. 1996)..

Milne Employees Ass'n v. Sun Carriers, Inc.,

960 F.2d 1401 (9th Cir. 1991), cert. denied,

508 U.S. 959 (1993)

TABLE OF AUTHORITIES — Continued

Niehaus v. Greyhound Lines, Inc.,

1207 (9th Cir. 1999)

Northwestern Ohio Adm'rs, Inc. v. Walcher &

Fox, Inc., 270 F.3d 1018 (6th Cir. 2001), cert.

denied, International Ass'n of Bridge,

Structural, & Ornamental Iron Workers v.

Walcher & Fox, Inc., 535 U.S. 1017 (2002)

Operating Eng’rs Pension Trust ct. Wilson, 915

F.2d 535 (9th Cir. 1990), cert. denied, 505

UA MRE S26) 4 SE eRRrreneennpnn enc iam arts APM eoett 4

Trans Penn Wax Corp. v. McCandless, 50 F.é

217 (3d Cir. 1995)

Trustees of the Twin City Bricklayers Fringe

Benefit Funds v. Superior Waterproofing,

Inc., 450 F.3d 324 (8th Cir. 2006)

In re United States Office Prods. Co. Secs.

Littig., 251 F.Supp.24 Ti (19.1.0. ZOO) oo. cccccsescssccsseet

Voilas v. General Motors Corp., 170 F.3d 367

(3d Cir. 1999).

Williams v. NFL, I3d ;

2901928 (8th Cir. Sept. 11, 2009)..

STATUTES

29 U.S.C. § 185(a)

P|

PETITION FOR REHEARING

On October 5, 2009, the Court denied Douglas K.

Brocail’s petition for a writ of certiorari to review the

judgment of the Court of Appeals for the Fourteenth

District of Texas in Brocail v. Detroit Tigers, Inc., 268

S.W.3d 90 (Tex. App. — Houston [14th Dist.| 2008, pet.

denied). This petition for rehearing is timely filed

under Supreme Court Rule 44(2), which states in

relevant part that “[a|ny petition for the rehearing of

an order denying a petition for a writ of certiorari or

extraordinary writ shall be filed within 25 days after

”

the date of the order of denial...

INTRODUCTION

This appeal arose from the trial court’s grant of

summary judgment to the Detroit Tigers, Inc. on all

of Brocail’s claims against the Tigers. On April 3,

2008, the court of appeals issued its opinion and judg-

ment affirming the trial court’s summary judgment.

Brocail, 268 S.W.3d at 90, 94, 111.

The court of appeals held that section 301(a) of

the Labor Management Relations Act preempted

Brocail’s claim that the Tigers fraudulently induced

him to sign a contract with the Houston Astros

because that claim requires the interpretation of

Major League Baseball’s Collective Bargaining Agree

ment (“CBA”). Brocail, 268 S.W.3d at 102-03. Section

30 lla) proy ides:

Suits for violation of contracts between

an employer and aé_e labor” organization

representing employees in an_ industry

affecting commerce as defined in this chap-

ter, 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).

Il. THE EVIDENCE

The Tigers signed Brocail, a relief pitcher, to a

guaranteed contract under which they agreed to pay

him salaries of $900,000 in 2000 and $2,000,000 in

2001. Later, during the 2000 season, Brocail began to

experience arm problems.

The Tigers required Brocail to see their team

physicians. His symptoms indicated a partially torn

medial collateral ligament, but one of the Tigers’ team

doctors said Brocail only had bone chips in his elbow.

The Tigers put Brocail on the disabled lst in

August 2000 and urged him to undergo what they

represented was the appropriate treatment. Brocail

specifically asked whether he had a torn ligament,

but the Tigers said his problem was just loose bone

fragments.

Beheving the Tigers, Brocail had surgery on

(F

on]

September 22, 2000. He then began physical therapy.

Major League Baseball’s annual winter meetings,

during which trades are traditionally made, were

scheduled for December. The Tigers could get more

for Brocail in a trade if it appeared the surgery had

been successful. Trading Brocail would also allow the

Tigers to unload his large guaranteed contract.

sy November of 2000, Brocail was still going to

physical therapy. He was not even able to throw a

baseball yet. But on November 7, 2000 — less than

two months after the surgery and in time for the

winter meetings the Tigers took Brocail off the

disabled list. Then, during the winter meetings, they

traded him to the Astros, relieving themselves of his

$2,000,000 salary.

srocail had, not bone chips in his elbow, but a

complete tear of the medial collateral ligament and a

near-complete tear of the flexor tendon in his pitching

arm. He was forced to undergo major surgery to

address the injuries.

Brocail could not pitch in 2001, 2002, or 2003,

and received no salary in 2002 and 2003. He was

finally able to return to baseball during the 2004

season.

srocail sued the Tigers in state court, alleging

they had fraudulently induced him to sign a contract

with the Astros

lil, PRINCIPLES OF SECTION 301 PRE-

EMPTION

If resolution of a state-law cause of action does

not require actual interpretation of a CBA, the claim

is “independent” of the CBA and not preempted.

Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399,

407 (1988). Even a need to “look to” a CBA is not

enough to find section 301 preemption of a state-law

claim. Livadas v. Bradshaw, 512 U.S. 107, 124-25

(1994).

“The plaintiff’s claim is the touchstone for |a

‘

section 301 preemption] analysis; the need to inter-

pret the CBA must tnhere in the nature of the

plaintiff's claim.” Cramer v. Consolidated Freight-

ways, Inc., 255 F.3d 683, 691 (9th Cir. 2001) (en banc)

Applied in tort cases, that rules means that a court

must determine “whether evaluation of the tort claim

is inextricably intertwined with consideration of the

terms of the labor contract.” Allis-Chalmers Corp. v

Lueck, 471 U.S. 202, 213 (1985). Because it frequently

is not, numerous courts have held that section 301

did not preempt a state-law fraud claim.

See, e.g., Northwestern Ohio Adm'rs, Inc. v. Walcher &

Fox, Inc., 270 F.3d 1018, 1081 (6th Cir. 2001), cert. denied

International Ass'n of Bridge, Structural, & Ornamental Iron

Workers v. Walcher & Fox, Inc., 5385 U.S. 1017 (2002); Niehaus ¢

Grevhound Lines, Inc., 173 F.3d 1207, 1212 (9th Cir. 1999);

Operating Engrs Penston Trust v. Wilson, 915 F.2d 535, 539 (9th

Cir. 1990), cert. dented, 505 U.S. 1212 (1992)

IV. GROUND FOR REHEARING

That a plaintiff bringing a state-law fraud claim

must prove reasonable reliance on the representation

is practically a universal rule. See In re United States

Office Prods. Co. Sees. Litig., 251 F.Supp.2d 77, 101

(D.D.C. 2003); Merrill Lynch, Pierce, Fenner & Smith

v. Barchman, 916 F.Supp. 845, 854 (N.D. Ill. 1996).

The question thus becomes whether a CBA must be

interpreted in order to determine if the plaintiff’s

reliance on the representation was reasonable. As will

be discussed below, two competing lines of cases have

emerged, and an opinion issued just last month has

brought the question to the forefront again.

A. Section 301 Preemption And _ The

Reliance Element Of A State-Law

Fraud Claim —- The Third Circuit Gets

it Right.

In Trans Penn Wax Corp. v. McCandless, 50 F.3d

217 (3d Cir. 1995), members of a collective bargaining

unit brought a state-law fraud claim against their

employer based on promises of job security. /d. at 220.

The employer “insistl[ed| section 301 preempts the

employees’ fraud claims because proof of fraud

requires clear and convincing evidence of justifiable

reliance by the recipient upon the misrepresentation.

Such an analysis, [the employer) argue[d], requires

an interpretation of the [CBA] to determine if the

employees justifiably relied on representations guar-

anteeing job security.” 50 F.3d at 231.

The Third Circuit observed that the law of the

pertinent state requires a plaintiff alleging fraud to

prove justifiable reliance on the misrepresentation

50 F.3d at 232. The court then held:

([Tlhe employees need not depend on the

[CBA] to satisfy these elements of state law

fraud. This is not a situation ... where the

alleged tort is a violation of duties assumed

in the [CBA]. An examination of the

employer’s behavior, motivation, and

statements does not substantially de-

pend upon the terms of the [CBA]. The

essence of the employees’ case is proof of

justifiable reliance on the separate guaran-

tees, not on the [CBAs]. As in Lingle, “L[eJach

of these purely factual questions per-

tains to the conduct of the employee

and the conduct and motivation of the

employer,” and may be appropriately

resolved under state law.

Id. (citations omitted).

[In Votlas v. General Motors Corp., 170 F.3d 367

(3d Cir. 1999), former GM employees alleged that GM

fraudulently induced them to accept early retirement

Id. at 370. GM argued that the “reasonable reliance”

issue required interpretation of the CBA because one

could not determine whether the plaintiffs acted

reasonably without weighing all of the contractual

options available to them. /d. at 376-77. But the

Third Circuit noted that “the reliance inquiry is not,

as GM suggestled], an investigation of the wisdom

of the particular choice made by the claimant, but

stead whether the claimant was acting justifiably

or reasonably in giving credence to the alleged

misrepresentation.” /d. at 377. “{TjJhe reliance

question focuses on whether GM’s repeated

insistence that the plant was going to close was

a representation worthy of belief. Patently, this

is not a question that depends upon an

interpretation of the [CBA|].” /d. (emphasis

added).

Nor would “resolving whether the employees

reliance was detrimental [ | require an investigation

of the terms of the |CBAs|].” 170 F.3d at 377. The

court elaborated:

To be sure, we anticipate that at trial he

question whether the plaintiffs were worse

off for having taken early retirement may

arise. However, the fact that the parties’

agreements may be referred to in the course

of deciding this issue is of little moment to

the preemption question before us. As the

Court emphasized in Livadas, “the bare fact

that a [CBA] will be consulted in the course

of state-law litigation plainly does not

require the claim to be extinguished.”

Id. (quoting Livadas, 512 U.S. at 124)

Other courts have taken the same approach a

the Third Circuit. In Felix uv. Lucent Technologie

Inc., 387 F.3d 1146 (10th Cir. 2004), the defendant

argue(d| that Plaintiffs’ fraud claims will require u

to interpret the CBA Defendant correctly point

out that Oklahoma law requires as an element of

fraud reasonable reliance On misrepresentations

ld. at 1164-65 (citation omitted The Tenth

Circuit concluded that the issue was the parties’

conduct, not the meaning of the CBA

Plaintiffs do not allege that Defendant made

any misrepresentations about the terms or

application of the CBA. Rather, they

allege that Defendant lied in informing them

regarding the choice between retiring under

the June plan or waiting until later

Therefore, there is simply no need to

interpret the CBA in order to ascertain

whether Defendant's representations were

false, and the actual meaning of the CBA

is not in dispute Plaintiffs’ state law

misrepresentation claims “depend upon

the employer’s behavior, motivation,

and statements, as well as plaintiffs’

conduct, their understanding of the

alleged offer made to them, and their

reliance on it.”

at L165 (quoting Foy { Pratt & Vv Aitney Group

235 (2d Cir. 1997)) (emphasis added)

Prudential Insurance Co., 102

kiSupp.2d 1029 (S.D. Ind. 2000), the defendant

“essentially suggestied| é resolution of Kittle’s

tate law claims is substantially dependant upon an

analysis of the CBAI.1” /d. at 1036. Relying on

Lingle and McCandless, the di | coneluded

(>| her W Isé

Kittle plainly asserts state law claims for

actual fraud, and arguably for constructive

fraud as well Klach tort requires a

plaintiff to prove in part that the defendant

deceptively represented a past or existing

material fact and that the plaintiff reason

ably relied on the misrepresentation

The factual core of these claims is

straightforward and discernable without

interpretation of the [CBA]. Kittle simply

alleges that Kemmerer represented and

promised that Kittle would receive exclusive

responsibility for Agency 68, an alleged fact

at odds with his actual assignment to Agency

117 (Wile find that consultation or

analysis of the CBA is wholly unnecessary to

resolve these factual matters

Id. (citations omitted)

The issue of whether the employee reasonably

relied on the alleged misrepresentation invokes the

employer's motivation, behavior, and statements, and

the employee's understanding and reaction. It doe

not require interpretation of a CBA. Therefore, as the

Third Circuit has held, it should not be a basis of

ection 301 preemption

rice oft the

fraudulent

ind \

reemptlion

LO

B. Section 301 Preemption And The

Reliance Element Of A _ State-Law

Fraud Claim - The Eighth Circuit Gets

It Wrong.

In Williams v. NFL, _. F.3d __, 2009 WL

2901928 (8th Cir. Sept. 11, 2009), the NFL suspended

Kevin Williams and Pat Williams, defensive hnemen

for the Minnesota Vikings, after they tested positive

for a banned substance. /d. at *3. The Williams sued

several defendants, including the NFL, for fraud. Id.

at *5 n.7.

The defendants argued that the Williams’ fraud

claim was “preempted because the Players cannot

demonstrate the requisite reasonable reliance to

prevail on their claims without resorting to the

CBA[.]” 2009 WL 2901928 at *13. The Eighth Circuit

agreed:

(T]he question of whether the Players can

show that they reasonably relied on the lack

of a warning that StarCaps (the dietary

supplement they took] contained bumetanide

the banned substance] cannot be ascer-

tained apart from the terms of the Policy

[which was expressly incorporated into the

CBA]... Because resolving the Players’ mis-

representation claims will require interpre-

tation of the Policy, they are preempted by

section 301.

at *13. The court reasoned:

One can only justifiably rely on a statement

which conflicts with the provisions of a

1]

wrilten agreement it has signed if the

agreement is couched in ambiguous legal

language which a layman could reasonably

believe supported the representation.

To determine whether [the plaintiff]

justifiably relied on the oral assurances

allegedly made by the [defendant], the trier

of fact would have to determine whether the

contractual language in the CBA was ambig-

uous enough for a layman reasonably to

believe that it was not contrary to the

representations on which [the _ plaintiff]

claims it relied. This would require the trier

of fact to examine the provisions in the

CBA. ... Since [the plaintiff] has the burden

to establish justifiable reliance, it would

have to show that all of the cited provisions

of the CBA could plausibly be read together

to be consistent with its alleged under-

standing ... Adjudication of the dispute and

resolution of the ... claims will necessarily

involve interpretation of the CBA.

Id. (quoting Trustees of the Twin City Bricklayers

Fringe Benefit Funds v. Superior Waterproofing, Inc.,

450 F.3d 324, 331, 332 (8th Cir. 2006)).

The Eighth Circuit’s rationale leads to pre-

emption when it is necessary only to read the CBA

to read it to determine if it contains a term which

contradicts the defendant's alleged representation. In

other words, when the plaintiff alleges that the

defendant said X, the Eighth Circuit finds pre-

emption on the ground that one must look at the CBA

i

to determine whether it states the opposite of X. “But

the review of the CBA needed to decide preemption in

this case is not in itself ‘interpretation’ warranting

preemption; if it were, the preemption doctrine under

§ 301 would swallow the rule that employees can

assert nonnegotiable state law rights that are

independent of their [CBAs].” Foy, 127 F.3d at 235

(citing Milne Empioyees Ass'n v. Sun Carriers, 960

F.2d 1401, 1409-10 (9th Cir. 1991), cert. denied, 508

U.S. 959 (1993)).

To assert that the justifiable reliance element

will require interpretation of the CBA

proves too much: a [CBA] can always be

consulted to determine whether an employee

is justified in relying upon an employer's

promise. The argument comes down to the

idea that an employee is never justified in

relying upon any promise by the employer

that is not enforceable under a CBA. If that

were so, the existence of a CBA would

require preemption in all cases involving

representations made to employees. But the

Supreme Court has recently clarified that

§ 301 preemption applies only when neces-

sary “to assure that the purposes animating

§ 301 will be frustrated neither by state laws

purporting to determine questions relating to

what the parties to a labor agreement

agreed, and what legal consequences were

intended to flow from breaches of that

agreement, nor by parties’ efforts to renege

on their arbitration promises by relabeling

as tort suits actions simply alleging breaches

of duties assumed in [CBAs].”

Foy, 127 F.3d at 235 (quoting Livadas, 512 U.S. at

122-23).

If resolving a state-law cause of action requires

interpreting a CBA, there is no doubt the claim is

preempted. See Lingle, 486 U.S. at 407. But the fact

that a CBA will be merely consulted in the course of

state-law litigation does not require preemption.

Livadas, 512 U.S. at 124.

The Fourteenth Court of Appeals made the same

mistake the Eighth Circuit made. It held that

“tblecause the CBA governs assignment of his

contract, Brocail’s claim that the |Tigers] fraudulently

induced him to enter a contract with the Astros is

preempted. In particular, it is necessary to interpret

the CBA to determine whether Brocail’s consent to

the assignment was necessary, and whether reliance

on any representation by the [Tigers] concerning

assignment of his contract was reasonable in light

of the CBA.” Brocarl, 268 S.W.3d at 103 (citation

omitted).

Whether Brocail’s consent was necessary can

be determined from simply reviewing the CBA. No

interpretation Is necessary.

Likewise, the question of whether’ Brocail’s

reliance on any representation the Tigers made was

reasonable requires consulting, but not construing,

the CBA. There is no provision in the CBA that sets

a standard for reasonable reliance or somehow

14

precluded Brocail from relying on the ‘Tigers’

representations.

V. THE COURT SHOULD GRANT REVIEW.

A need for interpretation is required for section

301 preemption, and a court’s mere examination of a

CBA is not tantamount to interpreting it. Loewen

Group Int’l, Inc. v. Haberichter, 65 F.3d 1417, 1428

(7th Cir. 1995); Milne Empleyees Ass’n, 960 F.2d at

1409. Losing sight of the latter fact, the Fourteenth

Court and the Eighth Circuit have put the simple

review of a CBA on par with interpretation. As a

result, the type of garden-variety, state-law tort

claims which preemption was never intended to reach

are being wrongly extinguished. To vindicate the

longstanding rule that “as long as the state-law claim

can be resolved without interpreting the agreement,”

the claim is not preempted (Lingle, 486 U.S. at 409-

10 (emphasis added)), Brocail respectfully asks the

Court to grant this petition, hear his case, and

reassert the dispositive distinction.

Respectfully submitted,

LEVON G. HOVNATANIAN

Counsel of Record

MARTIN, DISIERE, JEFFERSON

& Wispom, L.L.P.

8O8 Travis, Suite 1800

Houston, Texas 77002

(713) 632-1700 — Telephone

(713) 222-0101 — Facsimile

Attorneys for Petitioner

Douglas K. Brocail

i)

GOOD FAITH CERTIFICATION OF COUNSEL

Pursuant to United States Supreme Court Rule

44(2), I hereby certify that (1) this petition for

rehearing is presented in good faith and not for delay,

and (2) this Petition tor Rehearing is restricted to the

grounds specified in Rule 44(2). Specifically, this

Petition for Rehearing is restricted to “other

substantial grounds not previously presented.”

Signed this 27th day of October, 2009.

LEVON G. HOVNATANIAN

Counsel of Record

MARTIN, DISIERE, JEFFERSON

& Wispom, L.L.P.

808 Travis, Suite 1800

Iiouston, Texas 77002

(713) 632-1700 — Telephone

(713) 222-0101 — Facsimile

Attorneys for Petitioner

Douglas K. Brocail