An Ice Skater is (Wrongly?) Tripped Up by the Exhaustion Doctrine

Davidovich v. Israel Ice Skating Federation, 446 N.J. Super. 127 (App. Div. 2016).  The subculture that is international competitive sport came to the Appellate Division in this case yesterday.  Judge Sabatino wrote a lengthy and scholarly opinion for the panel after the case was argued twice and the panel issued multiple interim orders.  The facts and procedural history are extensive and convoluted.  Here is a summary of some of the most important background.

Plaintiff, a New Jersey resident, is a nineteen-year old figure skater who has dual citizenship in the United States and Israel.  Having trained as a skater since age five, she joined defendant Israel Ice Skating Federation.  The Federation trains skaters, at some expense, to compete on behalf of Israel in international venues.  Plaintiff skated for Israel, with a male partner, in various competitions, including the European Championships and the Winter Olympics, both in 2014.

After the Olympics, plaintiff’s skating partner decided to part ways with her, stating that he no longer wanted to train with their coach.  After efforts to reunite them failed, and plaintiff was unsuccessful in finding another partner, plaintiff notified the Federation that she no longer wanted to skate for Israel and instead wished to compete internationally for the United States.  The Federation “has no apparent plans or desire to have her skate under its flag again” either.

The applicable rules required a twelve-month waiting period from the last time that plaintiff skated for Israel before she could seek release from the Federation.  Nonetheless, just a few months after the Olympics and her partner’s withdrawal, plaintiff sought release.  The Federation refused to release plaintiff, even if she paid a customary, five-figure sum to compensate the Federation for its expense in training her (her parents had already donated a much larger sum to “a tax-exempt organization for the benefit of Federation skaters”).  “The [F]ederation contend[ed] that if it were to release plaintiff unconditionally, doing so will encourage other skaters in whom it has invested substantial resources to switch their affiliations to other countries, for their sole personal advantage and to the [F]ederation’s detriment.”  In other words, the Federation, who no longer wanted plaintiff, wanted to hold her hostage so that other skaters would not leave.  Under the applicable rules, however, a skater may compete in the Olympics, the goal of all skaters at this elevated level, only for a country of which she is a citizen, and it was not clear from the opinion how many skaters might have multiple citizenships as plaintiff does.

Meanwhile, as the panel observed, “plaintiff has not skated internationally for more than two years.”  Her career was ebbing away as time passed, and the panel rightly observed that “time-sensitive issues” were at stake.  “Because the career span of such a skater is relatively short, time can be of the essence.”  Time was especially critical here, since “the rosters of each federation for the coming international skating season are to be fixed as of July 1,” and plaintiff would presumably lose another full year of competition if she could not obtain her release by July 1.

Plaintiff sued to free herself from the Federation and three individuals affiliated with the Federation.  Plaintiff also claimed tortious interference with her prospective economic advantage, defamation, and emotional distress.  The Law Division granted partial summary judgment, finding the Federation’s rationale for refusing to relief plaintiff “inscrutable,” and ordering the Federation to release plaintiff.  The Law Division declined to stay its ruling.  The Federation obtained leave to appeal, but the Appellate Division likewise denied a stay, provisionally keeping the release of plaintiff in place.

After the appeal was initially argued, in January 2016, the Appellate Division ordered plaintiff, without objection by her, “to attempt to exhaust remedies that might have been available to her under the then-existing rules of the sport’s umbrella organization, the International Skating Union (“ISU”).”  Plaintiff took some exhaustion steps, without success, and the Appellate Division ordered a temporary remand to the Law Division for a determination as to whether plaintiff had sufficiently exhausted ISU remedies.  The Law Division ruled that “plaintiff has sufficiently attempted, both directly and indirectly through requests she made of the United States team, to obtain a release from the ISU.”  The Federation appealed that decision and, after more briefing, the Appellate Division heard a second oral argument.

Earlier this month, the ISU revised its eligibility rules to provide that, in the case of a skater who previously competed for one nation and seeks release from that nation, like plaintiff, after a twelve-month waiting period, a request for release “shall not be unreasonably denied.”  Shortly thereafter, the United States skating organization (“USFSA”), which had not joined in plaintiff’s previous post-remand exhaustion efforts, submitted a formal request to the ISU that plaintiff be released by the Federation.  The Federation opposed that request, which remains pending before the ISU.

Yesterday, the Appellate Division reversed the Law Division’s order directing that the Federation release plaintiff.  The panel did so “principally  because of (1) the strong policies disfavoring judicial interference into the internal affairs of sporting organizations; (2) the need for possible non-judicial remedies to be exhausted; and (3) the presence of genuine and hotly-contested issues of material fact and business justification.”

The panel cited a number of cases in support of the idea that “judges generally should and do refrain from interfering with the internal matters of sports associations unless exceptional circumstances justify that interference.”  Those included the recent Second Circuit decision in the Tom Brady “Deflategate” case, which involved a fine and the suspension of Brady for a few games of a single sixteen-game regular season.  Other cited cases involved rulings of sports organizations regarding a single boxing match or a pair of stock car races.  The general policy of non-interference “comports with more general case law in our State involving disputes over the internal affairs of private organizations,” precedents that afford deference to a private association’s internal decisionmaking processes.  The Appellate Division rightly noted, however, that where a plaintiff shows “an interest sufficient to warrant judicial action” and “unjustifiable interference [with that interest] by the defendant” organization, courts can act.

To effectuate the non-interference principle, the panel stated, courts frequently require “exhaustion of non-judicial remedies that might be available within a sport itself before passing upon the merits of a dispute involving an athlete,” as in Dolan v. United States Equestrian Team, Inc., 257 N.J. Super. 314 (App. Div. 1992), which the court here discussed in some detail.  Dolan “comported with the general doctrine favoring the exhaustion of remedies that may be available.”  The panel cited cases regarding the exhaustion doctrine.

The Law Division here was found to have erred in granting summary judgment instead of giving “greater deference to the autonomy” of the ISU.  And since the ISU had recently changed its rules relating to release, and plaintiff and the United States skating organization had made applications under that new regime, the panel wished that process to continue and expected a prompt decision.  “We will not presume that the ISU will dawdle over the USFSA’s request, particularly with rosters to be fixed imminently for the upcoming skating season.”  Accordingly, the panel vacated the Law Division’s ruling that plaintiff had sufficiently exhausted administrative remedies.

The Appellate Division also concluded that the Law Division had wrongly resolved disputed issues of fact in granting summary judgment, a fundamental error.  The Federation’s assertion that if it released plaintiff, other skaters might also seek release was a “competing explanation” that should not have been resolved on summary judgment.

Finally, the “expansive remedy” of release ordered by the Law Division amounted to a mandatory injunction, an “extraordinary remedy that is only granted sparingly by the courts.”  Though “plaintiff’s predicament in not having the freedom to skate for another team while her former team has no interest in her return is sympathetic,” it was error for the Law Division to have “preempted the ISU process.”

The panel vacated the release of plaintiff and left the issue to the ISU.  If the ISU denies relief, the Appellate Division said, the Law Division can revisit the issue.  “However, the Law Division shall not reinstate any court-ordered release unless or until the parties’ proofs and justifications are litigated at the requested jury trial and appropriate findings are made.  We presume the trial will be conducted expeditiously after the remaining discovery is completed.”

This was a difficult case.  Though the panel’s deferential approach was not without support, there is reason to question the outcome here.  Plaintiff did make some procedural missteps along the way, including seeking release prematurely.  But she cured those defects, and has now been inactive not merely for the twelve-month required waiting period, but for twice that long.  She desires release from the Federation, the Federation does not want her, and the USFSA does.  This should have been nothing more than pushing on an open door.  Somehow, however, it was not.

The cases that the Appellate Division cited regarding deference to sports organizations did not involve indefinite and total sidelining of an athlete with a limited career window, but instead related to rulings involving only one or a few competitions, as summarized above.  The panel could have distinguished those cases on that basis but did not.

The Federation’s rationale that it needed to refuse plaintiff release in order to avoid losing other skaters and the costs of training them, which the panel found sufficient to warrant a full trial, is unpersuasive.  Everyone recognized that the Federation incurs expense in training skaters.  But the Federation refused to release plaintiff even if she paid the “customary” fee of many thousands of dollars.  Her parents had already donated more than that to an organization that benefits Federation skaters.  And the ISU itself “suggested the Federation may have already reaped a sufficient ‘return’ on its investment in plaintiff by her pair’s unprecedented success for Israel in the 2014 Olympics.”  It is at best questionable whether punishing plaintiff in order to send a message to other skaters is in any way a valid defense by the Federation, especially since the Federation admittedly does not want plaintiff anymore.

Deference to private organization procedures, and exhaustion of those procedures, are valid principles.  But they have exceptions, as the panel rightly noted.  Here, plaintiff made numerous attempts to comply with applicable procedures.  The Law Division determined, after full proceedings on remand from the Appellate Division, including a two-day evidentiary hearing, that plaintiff had adequately exhausted the potential remedies then available through the ISU.  At the eleventh hour, with the July 1 deadline for next year’s rosters looming, the ISU amended its rules for release.  The panel could have declined to subject plaintiff to this last-minute rule change, given that she had done what was necessary to exhaust under the prior version of the ISU rules.  Instead, plaintiff is left at the mercy of the ISU, which may well defer to the wishes of the Federation, a member of the ISU, rather than considering the interests of this lone skater, a dual citizen who seems now to be a young woman without a country.

The Appellate Division might better have left the Law Division’s ruling in place and permitted the release to remain in effect.  Plaintiff might then have been named to the United States roster next week.  She could have been removed from the roster thereafter if circumstances warranted it.  Now, however, plaintiff is dependent on a prompt and favorable ISU ruling, which according to a footnote in the panel’s opinion, may or may not have preclusive effect in this lawsuit, an issue that the court did not decide since it was not presented.