Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 1 of 81 ROGER G. WORTHINGTON, ESQ. CA Bar No. 202147 Law Office of Roger G. Worthington, P.C. 273 W. 7th Street San Pedro, California 9073 1 Telephone: [310)221-8090 Facsimile: (310)221-8095 rworthington@rgwpc .com KAY GUNDERSON REEVES, ESQ. TX Bar No. 08620470 6815 Lakeshore Dr. Dallas, TX 75214 Telephone: (214)824-7871 Facsimile: (214) 824-8677 kaygreeves@yanoo.com Attorneys for Petitioner IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA EASTERN DIVISION In the matter of the arbitration between FLOYD LANDIS, Petitioner, and UNITED STATES ANTI-DOPING AGENCY, Respondent, CaseNo.:CV-08-06330 AMENDED MOTION TO VACATE ARBITRATION AWARD Hearing date and time: November 3, 2008 @1:30 p.m. Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 2 of 81 3 Because the arbitrators considering Floyd Landis's anti-doping appeal failed to disclose business dealings and relationships creating a powerful incentive to rule in favor of his opponent, the U.S. Anti-Doping Agency, Mr. Landis was denied a 4 fundamentally fair arbitral hearing in front of a panel of impartial arbitrators. What he received instead was a fundamentally unfair hearing in which the statements of US ADA' s counsel were given evidentiary weight while record evidence was ignored, and a hearing in which both the law and the evidence were 8 disregarded. This Court should exercise the authority granted by the Federal 9 Arbitration Act, 9 U.S.C.A. §§10 and 12, and vacate the award issued in the arbitral proceeding known as Floyd Landis v/USADA, CAS 2007/A/1394, 1 7 10 II 12 I. PROCEDURAL ISSUES 13 A. Jurisdiction and Venue 14 Mr. Landis moves to vacate the arbitral award issued by the Court of 15 Arbitration for Sport ("CAS"), the body to which Mr. Landis appealed an adverse arbitration decision issued by a U.S. panel pursuant to the protocol of the United States Anti-Doping Agency. USADA v. Floyd Landis, Case No. AAA 30 190 00847 06 ("the Appealed Case"). Thus, this motion to vacate arises under the Federal Arbitration Act, 9 U.S.C. §10, §12. There is complete diversity of citizenship between the parties, and the amount in controversy exceeds $75,000, so this Court has jurisdiction pursuant to 28 U.S.C. § 1332(a). Because Mr. Landis moves to vacate the arbitration award based not only upon the statutory grounds articulated in the Federal Arbitration Act but also upon federal common law rules, a federal question is presented, and jurisdiction is proper under 28 U.S.C. §1331. 16 17 18 19 20 21 11 23 24 25 26 27 28 1 The CAS Panel's decision is attached to this Motion as Exhibit 1. The transcript of the hearing is attached as Exhibit 2. Amended Motion to Vacate Arbitration Award - 2 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 3 of 81 7 In the alternative, and out of an abundance of caution, Mr. Landis alleges that this motion arises under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("New York Convention"), 9 U.S.C. 4 §§201-208, presenting a federal question that vests this Court with jurisdiction 5 under 28 U.S.C. §1331. 6 Venue is proper in the Central District of California under 9 U.S.C. A. §§9- 1 1 and 28 U.S.C. §1391. The claims described herein arise out of a relationship 8 between the parties that was initiated in this district and performed in substantial part in this district over a period of years. The contract binding Mr. Landis to arbitration with the Defendant was executed by him in this district, performance of a substantial portion of his obligations occurred in this district, and Defendant supervises U.S. athletes including Mr. Landis in this district on an ongoing and continuous basis. Enforcement of the $100,000 penalty awarded by the arbitrators in Defendant's favor will occur in this district. The Defendant, through its agents, does business in this district, and its activities are continuous and substantial. Alternatively, venue is proper in this district under 9 U.S.C. § 204. 9 10 it 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 B. Parties Petitioner FLOYD LANDIS, an elite road cyclist pronounced the winner of the 2006 Tour De France, is an individual citizen of Riverside County, California. The UNITED STATES ANTI-DOPING AGENCY, INC. ("USADA") is a not-for-profit corporation with its principal place of business in Colorado Springs, Colorado. In the United States, USADA is responsible for the management of anti-doping testing and adjudication of enforcement actions arising under the World Anti-Doping Code. Amended Motion to Vacate Arbitration Award - 3 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 4 of 81 7 17 IS 19 20 21 11 23 24 25 26 27 28 C. Procedural History — am M M miim On July 23, 2006, Floyd Landis placed first in the Tour de France and was pronounced its winner, marking the eighth year in a row that an American rider 4 had won road cycling's most prestigious stage race. During the course of the race, Mr. Landis gave multiple urine samples as 6 part of the race's anti-doping program, samples that were tested by the Laboratorie National de Depistage et du Dopage ("LNDD"). 2 Two days after the Tour ended, 8 the LNDD notified his international cycling federation, Union Cycliste 9 Internationale ("UCI") that the ratio of testosterone to epitestosterone [the "T/E 10 ratio"] in the "A" sample he provided after Stage 17 of the Tour exceeded the 1 ' permissible limits set by the World Anti-Doping Agency ("WAD A"), a result the 12 LNDD allegedly confirmed by performing a Carbon Isotope Ratio ("CIR" test). 13 Upon Mr. Landis 's request, LNDD performed T/E ratio and CIR tests on the "B" 14 portion of his sample on August 3-5, 2006, reporting that these results confirmed 15 the "A" on August 5. Based on the results of both the T/E ratio and the CIR tests, lb the LNDD reported an "Adverse Analytical Finding" under the WADA Code, a finding that was subject to enforcement in the United States by US AD A. Under the applicable UCI rules, adjudication of Mr. Landis's alleged doping violation was to occur in the United States. Ex. 3, AAA Panel Decision at ^5-6. Though UCI rules charged his national federation, USA Cycling, with responsibility for conducting that proceeding, USA Cycling had contractually delegated its enforcement responsibilities to USADA, which commenced an anti- doping proceeding against Mr. Landis in September, 2006. In May, 2007, an original arbitration hearing was held before a panel of the North American Court of[ Arbitration for Sport of the American Arbitration Association ("the AAA Panel"), ~ Each sample given is divided into an "A" portion and a "B" portion, 3 Also commonly referred to as an "IRMS" test. Amended Motion to Vacate Arbitration Award - 4 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 5 of 81 3 7 a proceeding governed by the UCI rules (which incorporate the WAD A Code), the US AD A protocol and California procedural law. Ex. 3, AAA Panel Decision at 118-12, If 14,120. 4 The AAA Panel issued its decision on September 20, 2007, concluding that the T/E ratio test results did not support the doping violation because the LNDD had failed to perform that test (and some aspects of the OR test) in compliance with the International Standard for Laboratories ("ISL"). Ex. 3, AAA Decision at 1172. However, a 2-1 majority of the Panel voted to sustain the doping violation, 9 concluding that LNDD's failure to perform certain aspects of the CIR test in 10 compliance with the ISL had not caused an incorrect result. The AAA Panel 1 * suspended Mr. Landis for a two-year period running from January 30, 2007 12 through January 29, 2009, imposing tremendous financial hardships on a man who 13 had never made a living from any activity other than cycling. Ex. 3, AAA Panel 14 Decision at 1320(1), (6). Mr. Landis appealed this decision to the appellate division of the Court of Arbitration for Sport ("CAS") on October 8, 2007. Pursuant to CAS rules, he made his arbitrator selection in November, 2007, choosing Mr. Jan Paulsson. USADA selected New Yorker lawyer, Mr. David Rivkin and, upon information and belief, the president of CAS' s Appellate Division selected the panel president, Mr. David Williams, after consulting with Mssrs. Paulsson and Rivkin. Ex. 4., CAS Rule R54. The panel selection process was completed by mid-November, 2007. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The Panel conducted a de novo appeal hearing from March 19-24, 2008 in New York City, pursuant to USADA Protocol, 110(c) and CAS Rule R57. See Ex. 4, CAS Rule R57; and Ex. 5, USADA Protocol, 110 (c). Both parties to the appeal were domiciled in the United States, and the AAA decision appealed from was decided under the procedural rules of the State of California. On appeal, CAS applied its own rules of appellate procedure, as well as the UCI Rules and USADA Amended Motion to Vacate Arbitration Award - 5 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 6 of 81 7 9 10 El 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Protocol; moreover, U.S. substantive law was also applicable since neither the parties nor the CAS panel made a different choice in the manner provided by CAS rules. Ex. 1, CAS Decision, fl23-24; Ex. 4, CAS Rule R58; Ex. 30, Order of 4 Procedure, at 2, 1(7. On June 30, 2008, the CAS Panel not only dismissed Mr. Landis s s appeal, it 6 . imposed $100,000 in USADA's litigation costs against him, even though UCI rules do not provide for such an award, no evidence had been introduced to support such 8 an award, and the issue of costs was not among the list of issues formally submitted to the Panel for decision. That award will be enforced in the United States; indeed, both USA Cycling and USADA have already informed Mr. Landis that they will not issue him a USA Cycling license until he pays the penalty in full. Ex. 6-B, Letter to Floyd Landis from William Bock III, September 19, 2008. The S 100,000 award has effectively extended his two-year suspension indefinitely, until such time as Mr. Landis — who has never made his living apart from cycling — is able to come up with the money. Mr. Landis petitions this Court to invoice the authority granted to it under the Federal Arbitration Act, 9 U.S.C. §10 and §12, and vacate the CAS Panel's appellate awaixl. In the alternative and out of an abundance of caution, Mr. Landis petitions this Court to invoke the authority granted to it under the New York Convention, 9 U.S.C. §§201-208, and vacate the CAS Panel's appellate award. D. Grounds for Motion to Vacate the Panel's Award The CAS Panel award should be vacated because Mr. Landis was denied a fundamentally fair hearing for the following reasons: a) the CAS arbitrator selection process institutionalizes a "repeat player" bias into the CAS appeal system, creating an unconscionable system Amended Motion to Vacate Arbitration Award - 6 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 7 of 81 4 7 in which athletes are denied equal access to evidence and a chance at an impartial panel [9 U.S.C. § 10(a)(2); New York Convention, Art. V.,§l(a)and(d),Art.V,§2(b)]; b) the CAS arbitrators exhibited evident partiality by failing to disclose 6 dealings creating a reasonable impression of possible bias and partiality, and by acting with actual bias [9 U.S.C, § 10(a)(2); New 8 York Convention, Art. V, § 1 (a) and (d), Art. V, §2(b)]; 10 c) the arbitrators based their $ 1 00,000 cost award on unsworn statements 1 ' made by US ADA's lawyer after the close of the evidence, denying 12 Mr. Landis a right to respond. In addition, the cost award was outside 13 the scope of the arbitrators' power because the issue of costs had not 14 been formally submitted for decision, and because such an award is is not contemplated by the UCI rides governing the proceeding. The is cost award was made in manifest disregard of the law, and was 1? unconscionable; [9 U.S.C. § 10(a)(3), § 10(a)(4); New York is Convention, Art. V, §(a), (b), (c), §2(a) and (b)]; 19 20 d) the WADA Code of Ethics, together with the procedures and time 2i limits adopted by the CAS panel during the appellate proceeding, 22 prohibited Mr. Landis from presenting his case [9 U.S.C. § 10(a)(3); 23 New York Convention, Art. V, § 1 (b)] ; 24 25 e) the arbitrators failed to base their substantive decisions upon the 26 evidence presented, but instead relied upon non-evidentiary 27 statements made by counsel for USADA (and fellow CAS arbitrator), 28 Amended Motion to Vacate Arbitration Award - 7 4 6 7 9 10 11 12 13 14 15 16 17 IS 19 20 21 22 23 24 25 26 27 28 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 8 of 81 Mr. Richard Young [9 U.S.C. § 10(a)(3), (4); New York Convention, Art.V,§l(b),§2(b)]; f) the arbitrators repeatedly refused to consider Mr. Landis's evidence, tantamount to a refusal to hear pertinent evidence at all [9 U.S.C. A. § 10(a)(3), (4); New York Convention, Art. V, §l(a), (b)]; g) the arbitrators acted in manifest disregard of the law and their own rules [§ 10(a)(4); New York Convention, Art. V, §l(a), (b)]; h) The arbitration procedures as applied in Mr. Landis's case were unconscionable. II. ARGUMENT A. The CAS appeal process denied Mr. Landis a fundamentally fair hearing decided by impartial arbitrators. 1. The CAS arbitrator selection process is heavily biased in favor of the doping enforcement bodies, who nominate a majority of the arbitral pool, and who are in a far better position to know which arbitrators are likely to share their interests. Only those cyclists holding a cycling license from their national federation are eligible to compete in elite international road cycling events like the Tour de France, and as a condition of being granted a license, each cyclist agrees to the jurisdiction of the Court of Arbitration for Sport. Ex. 6, Floyd Landis's Cycling License; Ex. 7, UCI Anti-Doping Rules at Parts I, VII, IX, X, XI; Ex. 3, AAA Amended Motion to Vacate Arbitration Award - 8 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 9 of 81 Panel Decision at ^[4, H|10-l 1 ■ Tne form and terms of tlie c y clin g license, including the consent to the Court of Arbitration for Sport's jurisdiction are not 3 subject to negotiation; if the athlete wishes to compete, he must consent to the 4 license terms. As required by UCI rules and the USADA Protocol, Mr. Landis submitted his initial arbitration to a panel of the North American Court of Arbitration for Sport; it is the appeal of that process that is the subject of this motion to vacate. 7 8 9 10 II 12 13 14 15 16 17 IS 19 20 21 22 23 24 25 26 27 28 At first glance, the CAS appellate procedure presents the appearance of balance. Each party selects one arbitrator, with the panel president selected by the C AS 5 s Appellate Division. Ex. 4, CAS Rules 48, 53-54. However, the CAS arbitral pool is heavily dominated by lawyers selected by the organizations charged with enforcing anti-doping regulations. Though CAS's parent organization, the International Council of Arbitration for Sport ("ICAS") formally selects the CAS arbitral pool, it chooses three-fifths of the pool members from lists submitted by the International Olympic Committee ("IOC"), the national Olympic committees in each member country, and international sports federations like UCI. Ex. 4, CAS Rule S14. These entities are among those charged with enforcing anti-doping regulations against athletes. While ICAS selects one-fifth of the CAS arbitration pool "after appropriate consultation with a view to safeguarding the interests of the athletes," organizations representing athletes are not provided an opportunity to submit lists of candidates for appointment to the CAS arbitral pool. Arbitrators in the pool serve renewable four-year terms. The IOC, the sports federations, and the national Olympic committees clearly have the ability to stack the CAS pool with arbitrators representing their interests, while athletes and athlete organizations have no formal ability to influence the composition of the arbitral pool. Conversely, any arbitrator nominated by one of these bodies has a reciprocal interest in advancing the agenda of the nominating bodies, thereby increasing the chances of renomination at the Amended Motion to Vacate Arbitration Award - 9 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 1 of 81 3 4 6 7 8 9 10 II 12 13 14 15 16 17 18 19 20 2! 22 23 24 25 26 27 28 end of the four-year term. As if this advantage were not significant enough, it is heightened by the fact that these nominating bodies — and the entities like USADA that share their interests — are in a position to know which arbitrators they proposed for inclusion in the CAS pool (and to share that information with other anti-doping enforcement bodies like USADA). In contrast to an individual athlete, each organization charged with prosecuting anti-doping offenses certainly knows the identities of any lawyers it nominates, and is in a position to gain access to the names of proposed arbitrators submitted by the other federations or sports organizations because they all have an interest in sharing this information amongst themselves, and with like-minded enforcement agencies such as USADA. By process of elimination, then, they can identify those nominated by ICAS as "independents" or as arbitrators reflecting athletes' interests. The athlete, by contrast, is in no position to know how any particular arbitrator gained admission to the pool, and in no position to make an informed choice should the need arise. No organization representing athletes nominates arbitrators, nor are the IOC, sports federations or national Olympic committees likely to share their knowledge about the CAS pool members with athletes charged with doping violations. The athlete alone is totally in the dark about the manner in which any particular arbitrator is selected for inclusion in to the CAS pool. The sports federations and agencies not only dominate the pool selection process and have a significant knowledge advantage over the athlete, but they also gain an advantage because they appear before the CAS on a regular basis, in contrast to individual athletes. By virtue of their regular enforcement activities, "repeat players" like USADA are frequently in the position of selecting the individual arbitrators who serve on particular appeal panels, while individual athletes only rarely find themselves in this position. Any arbitrator interested in being selected to serve as arbitrator on a regular basis has an incentive to curry favor with those "repeat players" by taking positions favorable to them. This Amended Motion to Vacate Arbitration Award - 1 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 1 1 of 81 3 4 6 7 K 9 10 I! 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 repeat player bias is well-recognized. Acorn v. Intern., Inc., 211 F.Supp.2d 1160, 1 169-70 (N.D. Cal. 2 002) (advantages to repeat participants in the arbitration market are well-known); Ex. 8, Letter from Laurence Schnltz, President, Public Investors Arbitration Bar Association to Nancy Moms, Secretary, Securities and Exchange Commission, April 16, 2008 (describing repeat player bias). "Repeat players" like USADA have a unique advantage in CAS proceedings because the WADA Code prohibits lab personnel from making any public comments undermining the work of another WADA lab. Ex. 19, AAA Panel Dissent at 5-7; Ex. 29, WADA Code, Annex B, Laboratoiy Code of Ethics, Part 4. While it is permissible -in fact, common-for the director of one WADA lab to provide expert witness testimony supporting or validating the work done by another WADA lab where (as here) that work is challenged in an anti-doping appeal the converse is not true. Even if a WADA lab director believed that another lab had not correctly performed the testing relied upon to support a doping violation, the WADA Code of "Ethics" appears to prevent the lab director from speaking up on behalf of an athlete, even on cross-examination. Ex. 19, AAA Panel Dissent, at 6, ffi[15-16; Ex - 60 > ^ A Tr - at 834:23-837:15 (testimony of Dr. Christiane Ayotte). In a case like this one, where the athlete challenges the WADA lab's methods and practices, supporting testimony given by other WADA lab directors has been given great weight by sports arbitration panels. In the Laiidis case, for example, USADA designated three WADA lab directors to testify on its behalf at the AAA hearing: Dr. Christiane Ayotte (director, Montreal lab), Dr. Wilhelm Schanzer (director, Cologne lab) and Dr. Donald Catlin (former director, UCLA lab); Drs. Ayotte and Schanzer were designated as witnesses for the CAS hearing as well. Ex. 3, AAA Panel Decision at 20, TflOO; Ex, 25, USADA Witness Designation. The AAA Panel also designated Dr. Francisco Botre to serve as its "independent expert;" at the time, he was director of the WADA-accredited lab in Amended Motion to Vacate Arbitration Award - 1 1 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 1 2 of 81 Rome. Ex. 3, AAA Panel Decision at 15, 1(63. On at least two occasions, the AAA Panel disregarded the evidence offered by Mr. Landis's experts, finding it less than persuasive because they were not (as they could not be) WADA lab directors. Ex. 3, AAA Panel Decision, 1(1(238-40, 1)273, 1(278. The CAS Panel, too, rejected the evidence of Mr. Landis's experts, particularly Dr. Goldberger, because he did not direct a WADA-accredited laboratory. See Ex. 1, CAS Decision, U1(50, 76, 81, 131, 172, 178. Deference to the testimony of WADA lab directors is common in CAS proceedings. See, e.g., Ex. 12, CAS Case Law, Landahize v. Real Federation Espanola de Ciclismo, CAS 2006/A/l 1 19 at KK67-70; 1(1(72-79, 1(1(83- 87. The fact that "repeat players" like USADA have access to the expertise of WADA lab directors while athletes do not is significant advantage built into the anti-doping adjudication system, one that is virtually impossible for the athlete to overcome. At the end of the day, any protection an athlete might gain from his right to select a single arbitrator is undermined not only by the heavily- si anted pool selection process and the advantages created by WADA Code of Ethics, but also by CAS Rule R59, which allows the president of a CAS appellate panel to decide the case alone, in the absence of a majority. Ex. 4, CAS Rule R59. Appellate panel presidents, including the Landis panel president, are chosen by the President of the CAS Appellate Division, a position currently held by Mr. Thomas Bach, who also serves as Vice-President of the IOC. Ex. 4, CAS Rule R53. Thus, in the unlikely event that an athlete is lucky enough to select an arbitrator included in the CAS pool to "safeguard. . ..the interests of athletes," that arbitrator can be overruled by a panel president selected by the Vice-President of the IOC. That is a particularly troubling prospect in Mr. Landis's case, because comments Mr. Bach made to the media the day the Landis "B" sample results were made public confirmed that Mr. Bach had prejudged this case. Ex. 9-A, "Reacktionen auf den Fall Landis," comments of Thomas Bach, IOC Vice-President, President, Samstag, Amended Motion to Vacate Arbitration Award - 12 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 1 3 of 81 3 4 6 7 H 9 10 11 12 13 14 15 16 17 IS 19 20 21 22 23 24 25 26 27 28 August 4, 2006, http://wwvv.n-tv.de/696797.html (Commenting that the fact that Landis could be suspended immediately furthered the goals of the International Olympic Committee, of which he is Vice-President); Ex. 9-B, Declaration of Seth Davidson. Upon closer examination, the CAS system provides only illusory protections to athletes, whose participation in the system is guaranteed by the adhesion contracts they sign as a condition of eligibility. Ex. 6-A, Landis USA Cycling License. Athletes have no right to nominate arbitrators to the CAS pool, no ability to influence the decision to renew a pool member's appointment, no access to information about how any particular arbitrator came to be a member of the pool. Finally, because individual athletes appear only infrequently before CAS panels, they are in no position to take advantage of the "repeat player" bias that favors anti-doping agencies like USADA. The system created is entirely one-sided, and institutionalizes bias in favor of the "repeat players;" as such, the system fails to guarantee athletes like Mr. Landis a decision made by impartial arbitrators. The system is both procedurally and substantively unconscionable, justifying vacatur. Vacatur is also justified under FAA, 9 U.S.C. § 10(a)(2); New York Convention, ArtV,§l(a),(d),§2(b). 2. The CAS arbitrators' failure to disclose dealings with one another constituted "evident partiality," exacerbating the "repeat player" bias created by the CAS arbitrator-selection process. The inequities created by the CAS's slanted arbitrator selection process are compounded immeasurably by the fact that CAS allows the members of its arbitral pool to continue representing clients before other CAS panels. Any CAS arbitrator who also represents sports bodies charged with enforcing the anti- Amended Motion to Vacate Arbitration Award - 13 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 1 4 of 81 3 7 doping rules clearly has a bias in favor of his own client's position, and is therefore unlikely to take a position as arbitrator that is adverse to those interests. So if a client like the International Olympic Committee ("IOC") frequently finds itself 4 relying upon the lab work done in WAD A laboratories to prove up the anti-doping violations it pursues, it is unlikely that an arbitrator representing the IOC would 6 take positions undermining the basic competence of those laboratories when serving as an arbitrator. Such arbitrators do not come to their panels with an open 8 mind, but with a bias in favor of the view held by their paying clients. To make matters infinitely worse, because CAS allows its arbitrators to continue actively representing clients before CAS panels, the arbitrators and party representatives in 1 ' any given case can expect to find their roles completely reversed in the next, with the former litigant sitting in judgment of a client represented by the former decision-makers. This is hardly a recipe for impartial decisionmaking. And an impartial decision is what Mr. Landis had a right to receive. The federal policy favoring arbitration applies not to any arbitration, but to an impartial arbitration, a policy goal the Federal Arbitration Act implements by granting federal courts the authority to vacate arbitration awards in which arbitrators act with "evident partiality." 9 U.S.C.A. § 10(a)(2); Commonwealth Coatings Corp. v. Continental Casualty Co., 393 U.S. 145, 89 S.Ct 337 (1968), That policy also finds expression in the New York Convention, which permits a court to vacate an arbitral award where the award would be contrary to established public policy, where the composition of the arbitral panel is inconsistent with the law of the country where the arbitration took place, or where the award is invalid under the rules of the host country. New York Convention, Art. V§§(l)(a), (l)(d) and (2)(b). The policy is also embraced by the rules of the CAS itself, which require that arbitrators sign a declaration promising "to exercise their functions personally with total objectivity and independence," and to "immediately disclose any 12 13 14 15 16 17 18 19 20 21 77 23 24 25 26 27 28 Amended Motion to Vacate Arbitration Award - 1 4 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 1 5 of 81 3 circumstances likely to affect his independence with respect to any of the parties." Ex.4, CAS Rules S5, S18 and R33. In this circuit, evident partiality within the meaning of FAA § 10(a)(2) exists 4 both where an arbitrator acts with actual bias, but also where the arbitrator fails to disclose financial, business or other facts that would have created a reasonable 6 impression of partiality. New Regency Productions, Inc. v. Nippon Herald Films, Inc., 501 F.3d 1101,1 105-6 (9 th Cir. 2007); Woods v. Saturn Distribution Corp., 78 F.3d 424, 427 (9 th Cir. 1996); Schmitz v. Zilveti, 20 F.3d 1043, 1046 (9 th Cir. 1994), Far from guaranteeing an impartial panel, however, the CAS system exacerbates the existing "repeat player" bias present in many arbitral contexts by allowing the members of its arbitral pool to continue representing clients before CAS panels, creating even more incentives to favor the "repeat players" than would exist in the normal arbitral context. As stated above, arbitrators participating in an arbitral arena featuring "repeat players" already have an incentive to favor the parties that make frequent appearances before the CAS because these parties determine far more frequently than any particular athlete which arbitrators from the pool are selected and which are not. However, because CAS arbitrators are allowed to represent clients before the CAS, "repeat players" like US AD A present not just the source of further arbitral work, but also the source of potential future legal business. Adopting positions favorable to the interests of these "repeat players" is not only more likely to ensure that an arbitrator will obtain future arbitral appointments, but it increases his or her chances of being retained as future legal counsel. And of course, once a CAS arbitrator embraces positions consistent with those adopted by "repeat players" like USADA, that creates a powerful reciprocal incentive for those "repeat players" to do just what USADA did in Mr. Landis's case — hire a practicing CAS arbitrator to represent them. Not surprisingly, a cursory review of a recently-published listing of CAS cases, parties and arbitrators, confirms that 7 8 9 10 It 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Amended Motion to Vacate Arbitration Award - 15 3 4 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 1 6 of 81 7 8 9 10 11 12 13 14 15 16 17 IS 19 20 21 22 23 24 25 26 27 28 many of the most frequently-selected arbitrators are those that also represent private sports clients, or who have partners who do. Ex. 10, CAS Case List, 1985- 2003 (See arbitrator/lawyers Beloff, Fortier [whose partner represents WAD A], Martens, Young, Netzle, Morand and Paulsson). Powerful financial incentives clearly exist to align the financial interests of the "judges" with those of the "repeat player" litigants. The fact that these "repeat players" can and do hire CAS arbitrators to represent them in CAS proceedings introduces a third powerful bias into the system. In the Landis appeal, USADA was represented by a lawyer, Mr. Richard Young, who is also a CAS arbitrator (see Ex. 10 and 1 1). That being the case, any sitting panelist that represents — or seeks to represent — sports clients before CAS panels had a clear incentive to favor USADA because in a future proceeding, the roles might be reversed, with Mr. Young deciding the fate of the arbitrator's own client. The fear of retribution in a future proceeding creates a powerful incentive to decide cases in favor of parties represented by fellow CAS arbitrators. And because "repeat players" provide far greater potential for lucrative long-term legal representation opportunities, these parties are far more likely to be able to entice a CAS arbitrator to work for them, creating a virtually closed system in which the athlete cannot compete. Athletes are in a poor position to discover any of these facts. The process by which arbitrators are selected for inclusion in the CAS pool is not public, nor are CAS proceedings generally open to the public. The decisions of CAS panels are publicized only irregularly, posted on the CAS website for temporary periods and then removed (though this procedure has improved in recent months). While official CAS digests are eventually published in book form, those digests lag many years behind the decisions themselves, and contain only a part of the opinion issued by the panel Worse, they do not disclose the names of the lawyers representing the parties in those proceedings. Therefore, athletes like Mi*. Landis Amended Motion to Vacate Arbitration Award - 16 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 1 7 of 81 7 10 II 12 13 14 15 16 17 IS 19 20 21 22 23 24 25 26 27 28 are not able to access the facts that would reveal how the various arbitrators decide cases, which ones might espouse positions more favorable to athletes, or which ones wear two hats, sometimes representing a party, sometimes sitting in judgment 4 as a CAS arbitrator. That situation changed significantly a few weeks ago, when CAS began 6 | publishing a relatively comprehensive list of decisions on its website. Ex. 10, CAS Case List. The partial listing contains an identification of the litigants (though the 8 names of some athletes are not disclosed), the names of the lawyers sitting as 9 arbitrators, and the names of the lawyer representing parties. At present, this list is partially complete, current only up through 2003. Publication of this list allowed Mr. Landis to discover facts previously unknown to him, facts confirming that the strong potential for "repeat player" bias existed in his case. The information contained in that list, when combined with the few publicly-available facts and more recent CAS decisions posted on the Internet, revealed that two of the three arbitrators on his panel had represented clients before the CAS, and that the firms of all three arbitrators actively sought out sports bodies as clients. It also confirmed that USADA's lawyer, Richard Young, was himself a CAS arbitrator who had frequently served on panels judging cases in which Mr. Paulsson (the arbitrator selected by Mr. Landis) had represented the IOC. Starkly illustrating that the system for selecting the members of the CAS arbitral pool places athletes at a distinct knowledge disadvantage, the newly- released information indicates that it was Mr. Paulsson — the arbitrator that Mr. Landis selected — who had the most to disclose because he was most active in representing a client responsible for enforcing anti-doping rules (the IOC), a client likely to take positions completely adverse to those Mr. Landis was taking. Not counting the Landis case, Mr, Paulsson has participated in CAS proceedings Amended Motion to Vacate Arbitration Award - 1 7 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 1 8 of 81 involving at least 33 athletes (or their doctors/managers), 4 and in at least twelve of those proceedings, he appeared on behalf of the IOC. 5 The CAS Case List indicates that Mr. Paul ss on represented the IOC before a panel that included Mr. Young in the case of at least six athletes. 6 In addition, Mr. Paulsson appeared before panels including Mr. Rivkin on at least four occasions. It also confirms 6 that Mr. Paulsson presided as an arbitrator in two proceedings where the IOC appeared before him as a party. 8 Nor is Mr. Paulsson the only lawyer in his firm who is a CAS arbitrator, or that represents sports law clients. His partner, Christian Duve, is a current member of the CAS arbitral pool (Ex. 13, exceipt, CAS arbitrator list), while another partner, Mr. Raj Parker, is a former CAS arbitrator who also regularly represents the Football Association. 9 Moreover, their firm — Freshflelds, Bruckhaus, 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Derringer — was one of the lead firms representing the City of London in its 4 See Ex. 10, CAS Case List (identifying 29 cases in which Mr. Paulsson appeared as either arbitrator or party representative); Ex. 12, CAS Case Law (Landaluze v. Real Federation Espanola de Ciclismo, CAS 2006/A/l 1 19; 2007/A/1286; Johannes Eder v. IOC; 2007/A/128S, Martin Tauber v. IOC; 2007/A/1289, Jurgen Pinter v. IOC (decided January 4, 2008)). 5 Ex. 12, CAS Case Law CAS 2007/A/1286; Johannes Eder v. IOC; 2007/A/1288, Martin Tauber v. IOC; 2007/A/1289, Jurgen Pinter v. IOC (decided January 4, 2008); Ex. 10: CAS 2002/A/389-393 (M. Mayer, W. Mayer, A. Walcher, P. Baumgartl, V. Muller); CAS 2002/O/373 (Scott); CAS 2002/A/370; CAS 2002/A/374; CAS 2002/A/376. 6 Ex. 10, CAS 2002/A/389-393 (M. Mayer, W. Mayer, A. Walcher, P. Baumgartl, V. Muller); CAS 2002/O/373 (Scott) 7 Ex. 12, CAS 2007/ A/1286; Johannes Eder v. IOC; 2007/A/1288, Martin Tauber v. IOC; 2007/A/1289, Jurgen Pinter v. IOC (decided January 4, 2008); Ex. 10, 2002/A/376 (Baxter). 8 Ex. 10, CAS 2000H OG-00-001; 2000H-OG-00-003. 9 Ex. 12, CAS Case Law (CAS 2005/A/876, Adrian Hutu v. Chelsea Football Club (December 15, 2005)(Mr. Parker appointed as arbitrator); Ex. 14, http://soccemet.esDn.go.eom/england/news/2002/0529/20020529wfcspallfeat:html : lntns://www.onlinebld.com/uDloads/Black%20Letter%20Law/CoDV%20ofM)20BLL 2007 Final Printversion/BLL SECTIQN5 Judges.pdf . Amended Motion to Vacate Arbitration Award - 1 8 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 1 9 of 81 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 successful bid for the 2012 Olympics, a decision made by the IOC. Ex. 15. Thus, members of the Freshfields firm, particularly Mr. Paulsson, have a significant 3 economic incentive to espouse positions favorable to the IOC, and little interest in 4 embracing positions taken by an athlete with adverse interests. While the brief biographical statement provided on the CAS website (and written in French) 6 discloses that Mr. Paulsson has represented a number of Formula One drivers, it doe not disclose that he frequently represents the IOC before the CAS. Ex. 16, Jan. * Paulsson Biographical sketch. When he selected Mr. Paulsson, Mr. Landis had no 9 way of knowing about Mr. Paulsson' s significant incentive to reject the sorts of legal arguments he intended to make on appeal. While proper disclosure would 1 ; have allowed Mr. Landis to make an informed decision, Mr. Paulsson never disclosed any of these dealings. The recently-published CAS listing also confirms that the Landis panel president, Mr. David Williams, has represented a client before the CAS. Ex. 10, CAS Case List, CAS 1991 /A/56 (representing athlete). Although he has made no recent appearances on behalf of a litigant, Mr. Williams' London firm, Essex Court Chambers, advertises that it represents "sports governing bodies and individual sportsmen and women as well as acting in litigation or arbitration." Ex. 17. Because Essex Court Chambers seeks to represent sports governing bodies, it must anticipate appearing before the CAS on behalf of these entities. There is no information confirming that Mr. Rivkin has represented a client before the CAS, but the newly-published list contains no information about the last five years, a period in which Mr. Rivkin began representing the international sailing club Club Nautico Espanol De Vela. Because sailing is an Olympic sport, the members of Club Nautico are subject to the World Anti-Doping Code and as such, Mr. Rivkin could reasonably expect to represent the club in CAS proceedings. Golden Gate Yacht Club. v. Societe Nautique de Geneve, 18 Misc. 3d 1 1 1 1(A), 856 N.Y.S.2d 24 (Table)(N.Y.2007)(noting that David Rivkin of Amended Motion to Vacate Arbitration Award - 1 9 3 4 7 8 9 10 11 12 13 14 15 16 17 IS 19 20 21 22 23 24 25 26 27 28 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 20 of 81 Debevoise & Plimpton represents Ckib Nautico Espanol de Vela). Additionally, recently-published information reveals that when Mr. Paulsson and Mr. Rivkin were selected to serve on the Landis panel, Mr. Rivkin was serving as president of a CAS panel considering the IOC's enforcement action against three Austrian cross-country skiers, proceedings in which Mr. Paulsson represented the IOC. Ex. 12, CAS Case Law, 2007/A/1286, Johannes Eder v. IOC; 2007/A/1288, Martin Tauber v//OC;2007/A/1289, Jitrgen Pinter v/ IOC (decided January 4, 2008). Upon information and belief, the stakes were particularly high for Mr. Paulsson and the IOC in these cases because they were the first in which the IOC had disqualified athletes for anti-doping violations in the absence of a positive test, and the first cases in which the IOC sought a life-time ban. In these three high- profile cases, then, Mr. Rivkin (the US AD A-s elected arbitrator) was sitting in judgment of a client represented by Mr. Paulsson (the Landis-selected arbitrator) while the Landis appeal was pending. These facts were unknown to Mr. Landis when he selected Mr. Paulsson to serve on his CAS panel. Although no available evidence indicates that Mr. Paulsson or Mr. Rivkin acted improperly or had inappropriate discussions about the two proceedings, a clear appearance of bias exists. CAS Rule R59 gave Mr. Rivkin the sole power to decide the fate of Mr, Paulsson's client in the absence of a majority, so persuading Mr, Rivkin was clearly crucial to Mr, Paulsson' s success in these cases. The appointment of both Mr. Paulsson and Mr. Rivkin to the Landis appeal panel presented a timely opportunity for Mr. Paulsson to discuss the facts of his high- profile IOC cases with Mr, Rivkin. It also created an unfortunate incentive to trade votes, with Mr, Paulsson agreeing to exchange a vote on the Landis appeal for favorable treatment from Mr. Rivkin in the cases of the three Austrians. Again, Mr. Landis does not allege that such conduct actually occurred. Rather, he alleges that Mr, Paulsson should have disclosed that he had three important cases pending before Mr. Rivkin at the time both were named to the Amended Motion to Vacate Arbitration Award - 20 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 21 of 81 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Landis panel so that Mr. Landis could have made an informed decision about whether he wanted to run the risk of improper conduct. The complete lack of disclosure deprived Mr. Landis of any opportunity to make an informed decision, and gave rise to a reasonable impression of possible bias, which is "evident partiality" under the FAA. The CAS Case List also reveals the many occasions on which Mr. Young (USADA's lawyer), has served on CAS arbitration panels before which Mr. Paulsson appeared for the IOC. The list confirms that during 1994-2003, Mr. Young served as a CAS arbitrator eleven times, 10 and in six of these proceedings, Mr. Paulsson appeared before him representing the IOC. 11 This confirms that Mr. Young sat in judgment of Mr. Paulsson's client on more than half of the occasions in which he was appointed as a CAS arbitrator, while Mr. Paulsson appeared before Mr. Young more than half of the times that he appeared before CAS representing the IOC. 12 Mr. Landis had no way of knowing all of the above-recited facts when he selected Mr. Paulsson to serve as arbitrator on his CAS appeal panel in November, 2007. Further compounding the institutional conflicts of interest created in the CAS system, the fact that Mssrs. Rivkin, Williams, and Paulsson also serve in other arbitral pools together creates additional opportunities for financial biases to arise, biases that could undermine impartiality. As they do in the CAS system, Mr. Rivkin, Mr. Paulsson and Mr. Williams participate in these international arbitral proceedings, appearing as either lawyer or arbitrator, again sitting in judgment of one another's clients in arbitration proceedings. To give but one such example, in 2006-7, Mr. Rivkin represented Occidental Petroleum Corporation and Occidental 10 CAS 2002/A/370; CAS 2002/A/374; CAS 2002/A/373.; CAS 2000H OG-00-15; CAS 2000H OG-00-012; CAS 2000H OG-00-006; CAS 1998/A/184; CAS 1998 H OG-98-002. 1 x See Note 6. 12 See Notes 5-6. Amended Motion to Vacate Arbitration Award - 21 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 22 of 81 3 4 5 (i 7 9 10 If 12 13 14 15 16 17 IS 19 20 21 22 23 24 25 26 27 28 Exploration and Production Company in an arbitration proceeding where the stakes exceeded $ 1 billion, a proceeding in which Mr. Williams served as arbitrator. Ex. 18. Thus, these arbitrators constantly find themselves changing hats, arbitrator one day, litigant the next. The only party routinely excluded from this cycle is the athlete, who is not provided access to information revealing this web of professional relationships. These business dealings should have been disclosed but were not. These problems are not unique to the Landis appeal. The recently-published CAS case listing confirms that many of the most frequently- appointed CAS arbitrators represent private sports clients (or have colleagues that do), including Dirk-Reiner Martens, Michael Beloff, Stephen Netzle, Yves Fortier [whose partner represents WAD A], and Jean-Pierre Morand. In fact, the frequency with which Mssrs. Young, Martens, Fortier, Beloff, Netzle and Morand were appointed to CAS panels was so high that each time Mr. Paulsson represented the IOC before a CAS panel, he appeared before one of those lawyer/arbitrators. The CAS Case List illustrates a revolving door system, in which judges constantly changing places with the advocate. That being the case, each member of the Landis appeal panel — but especially Mr. Paulsson — could reasonably expect that in the event they or a member of their firm appeared before CAS on behalf of a client, USADA's lawyer, Mr. Young, might well be sitting on their panel. This created an additional and powerful incentive to take positions favorable to Mr. Young's client, USADA. The clear conflict of interest created by allowing CAS arbitrators to represent clients remains largely invisible to athletes like Mr. Landis due to the CAS's failure to routinely publicize its decisions, or to make public the identities of the arbitrators and lawyers involved in each case. However, the conflicts created by allowing arbitrators to represent clients before the CAS or AAA are well-known to the CAS itself. In 2006, athlete Tim Montgomery discovered that Amended Motion to Vacate Arbitration Award - 22 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 23 of 81 3 4 7 9 10 li 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2G 27 28 the law partner of an arbitrator appointed to his panel (Yves Fortier) represented the World Anti-Doping Agency itself; he asked CAS to annul the award issued hy the panel that included Fortier, a request reported to have been dismissed by the CAS "out of hand." Ex. 20. Further, in 2007, the director and general counsel of the Canadian Centre for Ethics in Sport submitted comments to WADA requesting that Articles 8 and 13.2 of the World Anti-Doping Code be amended to prohibit CAS arbitrators from representing clients before the Court due to the conflict of interest created. Ex. 21 -A, Letter from Joseph De Pencier to World Anti-Doping Agency, March 30, 2007 at 4; Ex. 21-B, Feedback on [WADA] Code 2007, Version 2.01, Art. 13-02, October 1, 2007, at 3 of 3 (comments of Joseph DePencier). This requested revision was never implemented. While CAS is well aware of the problem created by this built-in conflict of interest, Mr. Landis was not. That is why arbitrators are under a duty to discover and disclose relationships like these, relationships that create a powerful incentive to disapprove of positions hostile to the interests of "repeat player" clients like the IOC and USADA. The "repeat players" that hire CAS arbitrators like Mr. Paulsson as lawyers depend upon the WADA labs' work as proof of anti-doping violations when they represent clients before the CAS; as such, they and their lawyers have a strong incentive to defend the scientific rigor of the tests used by these labs, and the competence of the lab's staff. An objective observer would be hard-pressed to conclude that an arbitrator who also represents a "repeat player" like the IOC — or one that sought out such clients — could be impartial when faced with an appeal like that brought by Mr. Landis, which attacked the competence of a WADA lab, attacked the scientific reliability of the lab tests, and challenged the Code interpretations that presumed that the work of WADA labs was performed properly and in a scientifically reliable manner. No disclosure was made in Mr. Landis 's case. Each CAS arbitrator failed to disclose ongoing dealings that created an actual and clearly identifiable incentive Amended Motion to Vacate Arbitration Award - 23 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 24 of 81 7 8 9 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to rule in favor of US ADA and its counsel, Mr. Rich Young, dealings creating a reasonable impression of partiality or possible bias. Mr. Paulsson, Mr. Rivkin and Mr. Williams should have disclosed that they had represented parties before the 4 CAS (and/or worked for firms that affirmatively solicited sports clients who would anticipate appearing before the CAS), parties with interests adverse to those of 6 athletes seeking to prove their innocence. Mr. Paulsson and Mr. Rivkin should have disclosed that Mr. Rivkin was sitting in judgment of Mr. Paulsson and his client, the IOC, in three pending cases at the very time that both were selected to sit on the Landis panel. And Mr. Paulsson should have disclosed his ongoing representation of the IOC, as well as the fact that he had repeatedly appeared before Mr. Young and Mr. Rivkin, and could expect to do so in the future. Each of these arbitrators had a duty to investigate and disclose these facts. New Regency, 501 F.3d at 1 105; Schmitz, 20 F.3d at 1048. The failure to disclose at least the facts described above created a reasonable impression of potential bias, constituting "evident partiality" under the FAA. 9 U.S.C. § 10(a)(2); New York Convention, Art. V, §§l(a) and (d) 9 §2(b). It also prevented Mr. Landis from making an informed decision about whether to object to the composition of the panel. Because arbitrators are not isolated from each other, but instead hear and decide cases as a panel, after joint discussion, debate and deliberation, each panel member has an opportunity to persuade the others. Wheeler v. St Joseph Hospital, 63 Cal. App. 3d 345, 133 Cal. Rptr. 775, 793 (Cal. App. 1976). Thus, a finding of evident partiality on the part of one arbitrator warrants vacatur of an entire arbitration award. Schmitz, 20 F. 3d at 1049. Where, as here, the party challenging an award demonstrates that an arbitrator failed to disclose business dealings that would have created a reasonable impression of potential bias had they been known, it is not necessary to demonstrate that any member of the panel acted with actual bias by producing specific facts indicated an improper motive. Woods v. Saturn Distrib. Corp., 78 F. Amended Motion to Vacate Arbitration Award - 24 3 4 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 25 of 81 3d 424, 427 (9 th Cir. 1996); Premo v. Martin, 1 19 F.3d 764, 771 (9 th Cir. 1997). However, the record facts in this case do provide a basis for concluding that the Panel deferred to fellow CAS arbitrator, Mr. Young, conduct that could be attributable to the presence of actual bias. Specifically, the Panel treated Mr. Young's statements as evidence on at least three occasions, deference afforded no other lawyer in the case. First, as described below in greater detail [see pages 30-32], the Panel accepted Mr. Young's statements as evidence in support of its decision to impose $100,000 in "costs" against Mr. Landis. At the time the evidentiary hearing closed, there was no record evidence of the amount or reasonableness of any of US ADA'S litigation expenses, nor was the issue of costs formally submitted to the Panel for decision. Ex. 1, CAS Decision at *Jfl9 (listing the issues formally submitted for decision). However, USADA's post-hearing brief contained Mr. Young's unsworn statements describing the extent and reasonableness of some of USADA's costs, statements the Panel relied upon in assessing the $100,000 penalty against Mr. Landis. Second, as again argued in detail below [see pages 47-49], the Panel accepted Mr. Young's unsupported statement to resolve a key issue relating to LNDD's accreditation. On appeal, Mr. Landis challenged LNDD's accreditation to perform the CIR method, arguing that the accreditation documents put in evidence by USADA confirmed that LNDD was only accredited to conduct the CIR test with a 20% measurement of uncertainty, not the 0.8%o uncertainty measurement it actually used, and that had the 20% measurement of uncertainty been used, his results could not have been declared positive. Apparently concerned that Mr. Landis was correct about the LNDD's accreditation status, the Panel sidestepped the issue by relying on a statement by Mr. Young in a footnote to his post-submission brief, a statement making the unsupported (and incorrect) assertion that had the 20% measurement of uncertainty been applied, Mr. Landis 's Amended Motion to Vacate Arbitration Award - 25 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 26 of 81 3 sample results would still have been positive. Ex. 1, CAS Decision at ^[48; Ex. 22, Appellee's Post-Submission Brief, at 8, footnote 7. Finally, as also argued in detail below [see pages 59-61], the Panel accepted 4 Mr. Young's "common sense" explanation to reconcile important inconsistencies between a document USADA relied heavily upon — a gas chromatography column 6 maintenance log (Exhibit T142) — and the sworn testimony of USADA 's own witness, the LNDD technician who was supposed to have actually made the entries on Exhibit T 142. Because arbitrators have a free rein to decide the law as well as the facts, 10 is 12 13 14 !5 16 17 18 19 20 21 22 23 24 25 26 27 28 and because their decisions are accorded a high degree of deference, the impartiality of those arbitrators must be scrupulously safeguarded. Commonwealth Coatings Corp. v. Continental Casualty Co., 393 U.S. 145, 149, 89 S.Ct. 337, 339, 21 L.Ed. 2d 301 (1968). In this case, no safeguards exist The stacked arbitral pool and the institutional bias favoring repeat players like USADA prejudiced Mr. Landis from the outset. This prejudice was compounded by the CAS's willingness to allow its arbitrators to continue representing clients before CAS panels, and by the Landis panels' failure to make any disclosures about such dealings, leaving Mr. Landis with no opportunity to make an informed decision. As the above-described facts illustrate, the CAS system is an insider's club, favoring repeat players at the expense of athletes, a disadvantage that is only exacerbated when the arbitrators on a particular panel continue to represent clients before the CAS or seek to do so. Because the arbitrators on Mr. Landis 5 s panel failed to disclose business dealings and interests creating a reasonable impression of potential bias, vacatur is proper under FAA, 9 U.S.C.A. § 10(a)(2) and the New York Convention, Art. V(l)(a), (d), Art. V . § (2)(b). B. The Panel's decision to impose a $100,000 penalty on Mr. Landis must be vacated because the decision was outside the scope of the Amended Motion to Vacate Arbitration Award - 26 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 27 of 81 3 10 arbitrators' power, was unsupported by any evidence, and was not permitted by clearly applicable law. Perhaps the strongest evidence that the Panel's decision-making was based 4 upon actual bias was its decision ordering Mr. Landis, who has been unable to practice his profession since July, 2006, to pay $100,000 to US ADA as reimbursement for its litigation costs. The decision was made even though neither party had formally submitted the issue of costs to the Panel for decision [see Ex. 1, 8 CAS Decision, ^ 19-20] and neither party had introduced evidence as to the amount 9 or reasonableness of costs to the Panel. Instead, the Panel relied solely upon a statement made by fellow CAS arbitrator (and US AD A lawyer), Richard Young 1 x That statement, presented in a post-hearing brief to which Mr. Landis had no right 12 of reply, described USADA's costs and was the only identifiable basis for the 13 Panel's cost award. Imposing such an onerous financial burden upon Mr. 14 Landis — a financial burden that effectively extends his two-year sentence indefinitely — without heating evidence or providing a right of reply denied Mr. 16 Landis the basic due process right to a fundamentally fair hearing, and to a ]1 decision based on the evidence, in clear violation of well-established public policy 18 Further, the Panel erred in deciding an issue not formally submitted to it by the 9 \ parties, and in manifestly disregarding clearly applicable UCI rules directly on 20 point. As such, vacatur of the panel's cost decision is proper under FAA, 2i § 10(a)(2), (3), and (4), and under the New York Convention, Art. V (l)(a),(b),(c) (d), and §2(b), and because it is an unconscionable decision made in manifest 23 disregard of the law. 24 2 5 1. The Panel's $100,000 cost award should be 26 vacated because the issue of costs was not 27 among the issues formally submitted to the 2 s Panel for decision. .1 Amended Motion to Vacate Arbitration Award - 27 3 4 7 8 9 10 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 28 of 81 Prior to the hearing, the CAS Panel directed both parties to submit a list of issues to be decided, which issues defined the scope of the arbitrators' mandate. Ex. 1, CAS Decision at % 19-20. The formal list of issues defined the matters that were to be determined by the Panel after the hearing, as well as the matters to be addressed in closing arguments and in the post-hearing briefing requested by the Panel. Ex. 2, Tr., 1494: 15-1498:0. The formal list of issues also defined the scope of the matters submitted to the arbitrators for a decision within the meaning of 9 U.S.C. § 10(a)(4) and the New York Convention, Article V§(l)(c). Neither party formally submitted the issue of an appropriate award of costs to the CAS Panel for decision and determination. Ex. 1, CAS Decision at 3-5, 1fl[l9-20. 13 Mr. Landis was entitled to a fundamentally fair hearing, including the right to have notice of the issues being litigated, and about which he would be compelled to put on evidence. Ficekv. Southern Pacific Co., 338 F.2d 655, 657 (9 th Cir. 1964), cert den'd, 380 U.S. 988 (1965). The CAS Panel directed the parties to define the issues being submitted for determination, and directed them to limit their post-hearing briefing to the issues raised in that set of issues. Mr. Landis was entitled to rely upon the CAS Panel's direction, and confine his proffer of evidence and briefing to the issues actually submitted for decision, issues that did not include costs. Because the Panel decided an issue not formally submitted for decision and determination, vacatur is proper under 9 U.S.C. A. § 10(a)(4) and New York Convention, Art. V, (l)(c). 13 Although US ADA's post-hearing brief contains a footnote implying that the issue of costs was US ADA's Issue #8" and Appellant's "Issue #11," that is incorrect. Ex. 22, Appellee's Post-Hearing Brief at 48, n, 45. The issues formally submitted for determination are set forth at pages 3-5 of the CAS Decision, in fll9-20. USADA did not submit eight issues, it submitted only two (and neither addressed costs), while Mr. Landis 's eleventh issue had nothing to do with costs. Ex. 1, CAS Decision, ffll 19-20. While both parties stated in their closing brief that some cost award was appropriate, neither formally submitted the issue for determination to the Panel and neither produced evidence at the hearing to support such an award. Amended Motion to Vacate Arbitration Award - 28 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 29 of 81 4 7 8 9 10 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. In assessing $100,000 in USADA's litigation costs against Mr. Landis, the CAS Panel manifestly disregarded clearly applicable UCI rules, rules that do not permit the award of such costs, justifying vacatur. Although the CAS Panel acknowl edged that UCI Anti-Doping Rules provided the rules of decision in the Landis appeal, it did not apply them. Ex. 1, CAS Decision at 6, 1)22. See also Ex. 4, CAS Rule 58; Ex. 7, 1290 (the CAS "jfarfl| decide the dispute according to these Anti-Doping Rules. . ."). UCFs hearing rules distinguish between a "sanction," and "costs," and expressly provide that each party shall bear the costs of their own witnesses and experts. Ex. 7, UCI Anti- Doping Rules; contrast 1J241 and 1J244 with ffl[255-279. Rule 245 provides a limited exception, ostensibly permitting a panel to award the costs of sample testing, results management and the hearing proceeding, but only if those costs have been actually determined by the hearing panel. Ex. 7, at Rule 245. Not only are these exceptions inapplicable here, but none of them permits the Panel to award the opposing party's litigation costs when deciding anti-doping cases. 1 Further, since no costs were "actually determined" by the Panel, no possible argument could be made that Rule 245 would have permitted the award of costs in Mr. Landis 's case. The UCI rules are consistent with CAS Rules 65.1 and 65.2, which provide that panel awards shall be rendered without costs other than a court office fee not in dispute here. Also consistent is CAS Rule 65.3, which provides that each party 14 An additional UCI rule applicable at the appeal stage in facts suggests that on appeal, costs may be awarded only against the national federation, and only if the original hearing body incorrectly applied the rules. Ex, 7, UCI Rule 282. Otherwise, the UCI rules do not provide different cost allocation rules for CAS appeals. In this case, US ADA stands in the shoes of Mr. Landis 's national federation, USA Cycling. Amended Motion to Vacate Arbitration Award - 29 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 30 of 81 3 shall advance the costs of its own experts and witnesses. Ex. 4, CAS Rnle 653. While CAS Rule 65.3 provides discretion to the panel to award "costs" in certain circumstances, it can do so only after having made certain factual findings not 4 made here (about, for example, the parties' means). Moreover, that rule cannot be 5 read to create an inconsistency with the UCI rules, particularly UCI Rule 245, 6 because CAS is required to apply the UCI Rules. Ex. 7, UCI Rules, «|[290. At best, 7 CAS Rule 65.3 should be read to describe the factors that a CAS panel is to 8 consider before deciding to impose a cost award at all (considerations to be based 9 on evidence), while UCI Rule 245 defines which kinds of costs may be awarded. 10 The evidentiary record in the Landis appeal contained no evidence about the 1 1 amount and reasonableness of costs, or about Mr. Landis* s means, so the Panel's award was in no way the product of the Panel's cost "determination" within the meaning of Rule 245. Despite the fact that the CAS Panel acknowledged that it was bound by the UCI Anti-Doping Rules and its own procedural rules, see Ex. 1, CAS Decision at 1(22-27, it declined to follow them, imposing $100,000 in litigation costs. This decision was made in manifest disregard of clearly applicable rules, justifying vacatur, FAA, 9 U.S.C.A. § 10(a)(4), New York Convention, Art. V, §l(a), (d), and §2(b). 12 13 14 15 16 17 IS 19 20 21 22 23 24 25 26 27 28 3. Because the CAS Panel's $100,000 cost award was not based on evidence, Mr. Landis was denied a fundamentally fair hearing, so vacatur is proper. Not only was the Panel's $100,000 cost award contrary to UCI rules and outside the scope of the issues formally submitted to it for decision, but it was not Amended Motion to Vacate Arbitration Award - 30 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 31 of 81 7 10 based upon any evidence, violating Mr. Landis 's basic due process right to an arbitral decision based on evidence. It is indisputable that at the close of the evidentiary portion of the hearing, US AD A had presented no documents, no testimony, and no argument detailing the extent and reasonableness of its alleged litigation costs. When the Panel officially closed the record on March 24, 2008, it expressly prohibited the parties from submitting any further evidence, and prohibited them from filing any additional 8 pleadings (with the exception of the post-appeal written submissions). Ex. 2, Tr. 1 502: 17-23, 1503:23-25. And as stated above, that post-hearing brief was to be linked directly to the list of issues to be decided — a list that did not include costs. 11 Ex. 1, CAS Decision, fll9-20; Ex. 2, Tr. 1215:19-1217:24, 1493:1-1499:10. 12 Not to be dissuaded, US AD A decided to use the post-hearing brief to present] 13 Mr. Young's statements in support of the cost award. In that brief, Mr. Young 14 alleged (without benefit of supporting bills, invoices or receipts) that US AD A had 15 incurred "out-of-pocket" expenses totaling at least $93,000-560,000 in costs for 16 "transportation, hotel, and meals in New York City for nine witnesses whom 17 Appellant demanded be present in person for cross-examination and then elected 1S not to call"-- as well as $33,000 in expert witness fees. Ex. 22, Appellee's Post- 19 Hearing Brief at 48. Mr. Young requested that the Panel assess these costs against 20 Mr. Landis as a penalty for his inability to cross-examine all of the French fact 21 witnesses, and for his insistence upon pursuing a full range of issues on his de novo appeal. Id. at 48-9. Mr. Young's statements were not sworn, verified, or 23 supported by any documentary evidence, nor were they subject to cross- 24 examination, and because the Panel had prohibited the filing of any additional 25 post-hearing brief (like a reply), Mr. Landis had no right of response. 2 6 Unable to anticipate Mr. Young's specific allegations and prohibited from 2 ? filing a reply, Mr. Landis had no opportunity to challenge the absence of evidence 2 ^ or the substance of Mr. Young's statements. He had no opportunity to present the Amended Motion to Vacate Arbitration Award - 3 1 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 32 of 81 3 4 6 7 8 9 10 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 record evidence demonstrating that his failure to call all of the French witnesses was attributable solely to the severe time constraints imposed at the hearing, not to any litigation misconduct [see argument at pages 34-37 below]. He had no opportunity to produce evidence about the hardship such a penalty would impose upon him since he had been prevented from making a living in cycling. And he had no opportunity to argue that CAS precedent suggested that even if the facts were as Mr. Young alleged, the "equitable" decision was to let each party bear its own costs. Ex. 12, CAS Case Law, Landaluze v. Real Federation Espanola de Ciclismo, CAS 2006/A/l 1 19 at TJ120 (Paulsson, president) (where Panel concluded that sports federation had lodged many "futile" arguments, the "equitable" solution was to let each party pay its omw costs). Despite these inequities, the Panel assessed $100,000 in costs against Mr. Landis based solely upon the statements made by fellow CAS arbitrator, Mr. Young. When it based its $100,000 cost award upon the unsworn statements of fellow CAS arbitrator, Richard Young, while denying Mr. Landis any right of reply, the CAS Panel violated Mr. Landis 5 right to a fundamentally fair hearing, in which decisions are based upon evidence, not the statements of counsel, and in which both parties have notice and an equal right to be heard. Sunshine Mining Co. v. United Sieelworkers of America, 823 F. 2d 1289, 1295 (9 th Cir. 1987); Townley v. Heckler, 748 F.2d 109 (S.D.N. Y. 19 84) (disability claimant's due process rights were violated when the administrative law judge relied upon a post- hearing report as the primary evidence upon which disability benefits were denied). It denied him the right to present any case in opposition to Mr. Young's cost allegations, a denial of due process justifying vacatur under 9 U.S.C.A. § 10(a)(3) and (4) and New York Convention, Art. V, §(l)(a) and (b) and §2(b). Amended Motion to Vacate Arbitration Award - 32 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case 2:08-cv-06330-PA-CW Document 8 Filed 1 0/03/2008 Page 33 of 81 4. SUMMARY The Panel's award must be vacated because the issue of costs was not among the issues formally submitted to the Panel for determination. As such, the Panel violated its own rules, exceeded the powers granted to it, and violated fundamental notions of due process, which emphasize the importance of notice and an opportunity to respond. Thus, a motion to vacate is proper under 9 U.S.C. § 10(a)(3) and (4) and the New York Convention, Art. V, §l(c) and §2(a). The Panel's award must be vacated because imposing the litigation costs of the prevailing party upon the loser is contrary to UCI rules and is therefore a decision made in manifest disregard of the law, and in contravention of the FAA, 9 U.S.C. § 10(a)(3) and (4), and New York Convention, Art, V, §l(a), (d) and §2(b). The Panel's award must be vacated because it was a decision made with evident bias in favor of fellow-CAS arbitrator and USADA lawyer, Richard Young, whose unsworn, unsupported and unchallenged statements provided the only basis for the cost determination. Further, the arbitrators' evident partiality rendered all of its decisions subject to vacatur, including its cost award. Vacatur is therefore appropriate under the FAA, § 10(a)(1) and (2) and New York Convention, Art. V, § 1(a) and §2(b). Finally, the Panel's cost award should be vacated because it was not supported by evidence. The right to have decisions based upon evidence is a fundamental due process right, and a necessary component of a fundamentally fair hearing. Ficek v. Southern Pacific Co., 338 F.2d 655, 657 (9 th Cir. 1964), cert den'd, 380 U.S. 988 (1965). As such, the decision is unconscionable, justifying vacatur. Vacatur is similarly justified under FAA, § 10(a)(3) and (4) and New Yorl