Court Opinion

ID: 8707784
Source: CourtListenerOpinion
Date Created: 2022-11-26 06:36:34.524703+00
Date Added: 2024-06-11T16:57:42.201328
License: Public Domain

OPINION
PANNER, District Judge.
Plaintiff Tonya Harding brought this diversity action for breach of contract against defendant United States Figure Skating As­sociation, Inc. I enjoined defendant from holding a planned disciplinary hearing in Col­orado on March 10, 1994. When the parties were unable to agree upon a new date for the disciplinary hearing, I extended that injunc­tion to preclude defendant from holding the hearing prior to June 27, 1994. Defendant has now moved for reconsideration of my earlier ruling along with a motion to dismiss this action.1 I grant both motions, though not for the reasons urged by defendant.
DISCUSSION
Defendant’s memorandums exhibit some confusion as to the basis for my earlier deci­sion. At the time this action was filed, plain­tiff was a member of the defendant United States Figure Skating Association. Plaintiff paid her dues, and agreed to comply -with the rules of that association. The parties mutu­ally agreed to certain rules that would gov­ern any disciplinary proceeding against a member of the association.
Defendant’s bylaws provide that when disciplinary charges are filed against a member, that member has thirty days to file a reply. The bylaws further provide that “upon receipt of the reply, the Hearing Panel shall set a place and date for a hearing that is reasonably convenient for all parties.” Ar­ticle XXVII, § 3(c)(iv). Defendant violated this rule by unilaterally setting a time and date for the hearing that was just three days after the reply was due. Defendant acted contrary to its bylaws by setting the date before it received the reply. Furthermore, in view of the complexity of the charges, March 10 was not a date “reasonably conve­nient for all parties.”
I reviewed in camera the evidence defen­dant intended to present at the disciplinary hearing. The evidence was complex, involv­ing the actions of several dozen individuals over a period of weeks. The evidence includ­ed statements by alleged co-conspirators, each of whom may have had a motive to misrepresent plaintiffs role in this matter. Moreover, because the Rules of Evidence do not apply at this disciplinary hearing, the documents defendant proposed to use were replete with hearsay, newspaper clippings, conclusions, an anonymous letter, forensic opinions, affidavits, media interviews, and similar items that would not be admissible in a court of law. In addition, it was intimated that plaintiffs defense might include a form of the “battered wife” defense, which would require extensive investigation by experts and interviews with persons who have known plaintiff and her former husband over a peri­od of many years. Finally, the Hearing Pan­*1479el that would decide the charges against plaintiff was the same panel that acted as a de facto grand jury in the decision to file charges against plaintiff in the first place. Based on my fourteen years of experience as a trial judge, and thirty years of experience as a trial lawyer before taking the bench, it was immediately apparent that plaintiff could not possibly prepare a defense to those charge in the time allotted. The hearing date established by defendant was not “rea­sonably convenient for all parties,” as re­quired by defendant’s bylaws.
When one party to a contract is given discretion in the performance of some aspect of the contract, that discretion must be exer­cised in good faith. See, e.g., Best v. U.S. National Bank, 303 Or. 557, 739 P.2d 554 (1987). Colorado, where defendant is incor­porated, recently adopted a similar view. Wells Fargo Realty Advisors Funding, Inc. v. Uioli, Inc., 872 P.2d 1359 (Colo.App.1994) (appeal pending). The date set by defendant was arbitrary and manifestly unreasonable, and would severely prejudice plaintiff’s chances of obtaining a fair hearing. Plaintiff immediately advised defendant that this date was not convenient and requested an exten­sion of time. Defendant denied the request because it wanted to conduct the hearing prior to the World Championships so it could remove plaintiff from the United States dele­gation for that event. Plaintiff then exhaust­ed her internal appeals within the association before filing this action for injunctive relief.
The courts should rightly hesitate before intervening in disciplinary hearings held by private associations, including the defendant United States Figure Skating As­sociation. Intervention is appropriate only in the most extraordinary circumstances, where the association has clearly breached its own rules, that breach will imminently result in serious and irreparable harm to the plaintiff, and the plaintiff has exhausted all internal remedies. Even then, injunctive relief is lim­ited to correcting the breach of the rules. The court should not intervene in the merits of the underlying dispute.
This is one of those rare cases where judicial intervention was appropriate. It appeared at the time that had defendant not been enjoined from holding the hearing on March 10, plaintiff would have suffered serious irreparable harm. Defendant argued that the matter was not ripe because the outcome of the hearing was unknown. If the only issue was whether plaintiff should have been allowed to skate in the World Champi­onships in Japan later that month, defen­dant’s point might have been well taken, since injunctive relief could still be sought at the conclusion of the disciplinary hearing. In this particular case, however, merely holding the hearing on March 10 would have caused plaintiff to suffer irreparable harm. In order to maintain her right to contest the decision of the Hearing Panel, plaintiff would have been obliged to appear before the panel and prematurely present her defense without having adequate time to prepare for that hearing. If the Hearing Panel found her guilty as charged, the resultant publicity could have severely prejudiced her chances for a fair trial in any future criminal case. Plaintiff would also have been obliged to decide upon and publicly disclose a defense strategy for both the civil and criminal mat­ters before she had time to conduct full discovery and interview witnesses. Finally, the entire testimony, including information that has heretofore not been made public, would inevitably have been leaked to the media, despite defendant’s best intentions to maintain the confidentiality of the proceed­ings, thereby further poisoning plaintiffs chance of obtaining a fair trial in the criminal proceeding. Under the circumstances, plain­tiffs attorneys might well have advised their client not to attend the hearing. In that case, plaintiff would likely have forfeited any right to contest the results of the hearing. Her failure to contest the charges would have also resulted in her being found guilty in the court of public opinion.
I rejected plaintiffs suggestion that the disciplinary hearing be postponed until after resolution of the criminal charges against her. Defendant is a private associa­tion, not a governmental body. San Fran­cisco Arts & Athletics, Inc. v. United States Olympic Committee, 483 U.S. 522, 543-45, 107 S.Ct. 2971, 2984-86, 97 L.Ed.2d 427 (1987). Plaintiffs constitutional right against self-incrimination is not implicated unless she is compelled to testify either before or by a governmental body.
I nonetheless concluded that plaintiff was entitled to additional time to prepare for the hearing. The harm to plaintiff greatly *1480outweighed the harm to defendant from post­poning the hearing. Defendant has an inter­est in enforcing its rules and promptly disci­plining violators, and ensuring that only qual­ified skaters represent the United States at the World Championships. However, the United States Olympic Committee (“USOC”) charter requires that resolution of disputes be both swift and equitable. 36 U.S.C. § 382b. In this ease, equity was sacrificed for speed. Plaintiff exhausted all her inter­nal remedies before filing suit. Defendant’s bylaws provide for accelerated binding arbi­tration, but only to review the decision of the Hearing Panel after it finds plaintiff guilty and orders she be expelled from the Figure Skating Association. In most cases that would have been sufficient to protect the member’s interests. This case was the ex­ception. Defendant’s bylaws do not provide for emergency arbitration of a dispute as to the timing of the disciplinary hearing. Un­der the unique circumstances of this ease, which included the circus atmosphere gener­ated by an international media frenzy, the complexity of the accusations against plain­tiff, and the close connection between the disciplinary proceeding and possible criminal charges against plaintiff, defendant’s internal remedies were inadequate to prevent the im­minent injury to plaintiff.
Defendant’s motion for reconsideration as­serts that I lack subject matter jurisdiction because there is no private right of action under the Amateur Sports Act (“ASA”), 36 U.S.C. § 371 et seq. Oldfield v. Athletic Congress, 779 F.2d 505 (9th Cir.1985). How­ever, since this is an action for breach of contract, jurisdiction was founded upon di­versity, not the ASA. Next, defendant ar­gues that 36 U.S.C. § 374(3) vests the USOC and its officially recognized national govern­ing bodies, such as defendant, with exclusive jurisdiction over amateur athletics. In fact, that section refers only to participation of the United States in the Olympic Games and Pan-American Games, neither of which are implicated here. Moreover, I did not order defendant to include plaintiff as a member of the United States delegation to the World Championships, or take any position upon the merits of the disciplinary proceeding. I merely ordered defendant to comply with the requirement in its own bylaws that the hear­ing be set at a time reasonably convenient for all parties, thus ensuring plaintiff could obtain a fair hearing.
Defendant also argues that the Figure Skating Association’s bylaws provide an exclusive administrative procedure for resolution of disputes. However, that proce­dure works only so long as defendant follows it. Defendant’s argument boils down to an assertion that plaintiff has no remedy even if defendant refuses to follow its own proce­dures. I disagree. The procedures govern­ing disciplinary hearings are binding upon both the Figure Skating Association and its members. Defendant’s reliance upon Judge Kinneary’s opinion in Reynolds v. The Athlet­ics Congress of the USA, Inc., 1991 WL 179760 (S.D.Ohio 1991), judgment vacated, 935 F.2d 270 (6th Cir.1991), is misplaced. The plaintiff in Reynolds still had remedies available to him that might have prevented the threatened harm. Here, the harm to plaintiff did not flow solely from the penalty that might be imposed following the decision of the hearing panel, but rather from the premature hearing itself. Plaintiff exhausted all available remedies with respect to the hearing date.
Defendant also contends that since I have enjoined the March 10 hearing, there has been no violation of the Associa­tion’s bylaws, no damages can be awarded, and the complaint must therefore be dis­missed for lack of subject matter jurisdiction or failure to state a claim. Plaintiff brought this action in state court. The claim did not state the amount of damages sought, perhaps in an effort to avoid diversity jurisdiction. Defendant nonetheless removed it to federal court, asserting that the amount in contro­versy exceeded $50,000. A defendant may remove a suit to federal court notwithstand­ing the plaintiffs failure to state an amount in controversy. Kennard v. Harris Carp., 728 F.Supp. 453 (E.D.Mich.1989). Remand is not proper unless it appears to a legal certainty that the amount in controversy is less than the jurisdictional amount. St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S.Ct. 586, 590, 82 L.Ed. 845 (1938); De Aguilar v. Boeing Co., 790 F.Supp. 693, 694 (E.D.Tex.1992). When the plaintiffs pleadings are silent, the court may look to the petition for removal or awards in similar cases in order to place a value on the amount in controversy. Kennard, 728 *1481F.Supp. at 454; Richman v. Zimmer, Inc., 644 F.Supp. 540 (S.D.Fla.1986).
Although the complaint did not specify the amount of damages sought, the petition for removal asserted the value of the right in question was over $50,000, and that allegation was supported by awards from other cases (e.g., a jury recently awarded Butch Reynolds $27,000,000 in a dispute over his eligibility for the Olympic games). De­fendant also reminded this court that when plaintiff sued the United States Olympic Committee several months ago, she valued the right to skate at over twenty million dollars. Having persuaded this court that the diversity threshold had been crossed, defendant can not change its tune and assert that the amount in controversy was not over $50,000. Although it now appears that there will be no occasion for an award of damages, that fact does not deprive this court of juris­diction. Jurisdiction attaches at the time of removal and subsequent events cannot de­prive the court of jurisdiction. St. Paul, 303 U.S. at 292-93, 58 S.Ct. at 591-92. Even if it later appears that an award of damages will not be forthcoming, the district court may retain jurisdiction to grant injunctive relief or to enforce its judgments. Retention of jurisdiction would also be proper if there remained any imminent threat of harm to plaintiff.
Although I conclude this court has jurisdiction and the injunction was properly issued, I now grant defendant’s motion for reconsideration because the circumstances requiring the injunction no longer exist. Plaintiff has resigned from the Figure Skat­ing Association and pled guilty to the crimi­nal charges. A disciplinary hearing has been set for June 29, a date that is reasonably convenient for all parties in accordance with defendant’s bylaws. There is no reason to exercise continued jurisdiction over this mat­ter, or to enjoin defendant any longer than absolutely necessary. Any intervention by the courts in the internal affairs of the Fig­ure Skating Association should be restricted to that necessary to vindicate the rights at issue. Accordingly, the injunction dated March 31, 1994 is vacated, and the action dismissed as moot.

. While the motion for reconsideration was pending, defendant filed a notice of appeal with the Ninth Circuit. A timely filed motion for reconsideration under a local rule of an order granting or denying a preliminary injunction is considered a motion to alter or amend a judg­ment under Fed.R.Civ.P. 59(e). Bestran Corp. v. Eagle Comtronics, Inc., 720 F.2d 1019 (9th Cir.­1983). In accordance with the 1993 amend­ments to the Federal Rules of Appellate Proce­dure, a notice of appeal filed either before the filing of a motion specified in Fed.R.App. 4(a)(4), or while such motion is pending, is suspended until the motion is disposed of. Fed.R.App.P. 4(a)(4), advisory committee notes to 1993 Amendment. The appeal was therefore stayed, and this court retained jurisdiction to decide the pending motion.