The trustee for the swindled victims of Bernie Madoff listened. It reminded me of the time in 1975 when baseball’s club owners didn’t listen and it cost them in a monumental, historic way.
Irving Picard, the trustee, presumably felt his case against the Mets’ owners, Fred Wilpon and Saul Katz, at one point for $1 billion, was strong enough to argue before a jury and have the jury decide whether Wilpon and Katz were “willfully blind” to the money they were making from Madoff’s fraudulent Ponzi scheme.
But in a court session March 5 before Judge Jed Rakoff of United States District Court in Manhattan, Picard’s lawyers heard the judge express skepticism about the strength of their case.
“The court remains skeptical,” Rakoff wrote in his four-page ruling, “that the trustee can ultimately rebut the defendants’ showing of good faith, let alone impute bad faith to all the defendants.”
It was immediately following that session and that remark that Mario Cuomo, former New York governor and the dispute’s mediator, convened lawyers for the two sides and resumed settlement negotiations, which concluded successfully last Friday.
In the 1975 instance I referred to earlier, representatives for baseball owners and players were locked in a struggle over free agency. Peter Seitz, the impartial arbitrator, who a year earlier had declared Catfish Hunter a free agent in a breach-of-contract grievance, was hearing the Messersmith-McNally grievance in their bid for free agency.
As the end of the year and the expiration of the collective bargaining agreement approached, Seitz was nearing a decision. He met with John Gaherin (owners) and Marvin Miller (players) and urged them to negotiate an agreement on free agency rather than having him issue a ruling.
Seitz didn’t want to have to decide the issue. He felt it was too important for anyone but the owners and the players to decide it. Gaherin, a truly professional and wise negotiator, left the meeting convinced that if he had to rule, Seitz would find for the players.
He conveyed that feeling to the owners and urged them to negotiate, but they would not hear of it. Let Seitz rule against us, Lou Hoynes, the National League attorney, said; we’ll take him to court and win there and keep the system we have always had.
Hoynes was a good courtroom lawyer, but he didn’t have experience with labor law. Had he been better versed in labor law, he would have known that judges rarely overturn arbitrators’ decisions.
The Seitz decision for Messersmith and McNally, saying that players could become free agents after playing out the renewal year in their unsigned contracts, was upheld in United States District Court and the Court of Appeals.
The two sides subsequently negotiated a free-agent system, but it would most likely have been more to the owners’ liking had they listened to Seitz through Gaherin and precluded Seitz from ruling.
Picard, on the other hand, heard what Judge Rakoff said and reassessed his case. Few people seemed to be expecting a settlement, but readers of the Daily News and the Post had a better chance of anticipating the possibility than Times readers. That’s because of the way the Times covered the story.
Excuse me for repeating myself, but I believe it’s necessary in light of the settlement the two sides reached, avoiding the trial. Readers of the Post and the News might have seen it coming; Times readers didn’t have a chance as their favorite newspaper gave them misleading news.
If you were reading New York City’s three newspapers for news of the case the day after the judge questioned the trustee’s case, you would have found that telling remark in the Post and the Daily News. You would not have found it in the Times.
In a case of poor news judgment by reporter or editors or a case of deliberate stacking of the news against the Mets, the Times ignored Rakoff’s remark except to paraphrase it.
The headlines reflected the differences.
Judge throws heat at Picard’s claim vs. Mets, the Post headline read.
The News headline said, NY Mets case goes to trial even as judge slams Bernard Madoff trustee’s evidence against team’s owners.
The Times? Judge Deals Financial Blow to Mets’ Owners. That was the headline on the story in which Rakoff’s non-quoted view of Picard’s case was buried in the 13th paragraph of a 21-paragraph article.
In reporting on the settlement, the Times tried to recover, reversing its previous position by mentioning setbacks Picard had suffered. In addition, the news report, nearly 90 percent through the articles, said, “Mr. Picard might also have had second thoughts about the strength of his case.”
But why should Picard have had second thoughts if his case was as solid as the Times had portrayed it for months? And if it wasn’t so strong, why hadn’t the Times pointed out its weaknesses instead of consistently hammering the Mets and, in effect, forecasting a crushing loss for them.
Far from a loss, this was a huge victory for the Mets. And readers didn’t need a host of so-called experts telling its readers that. Once upon a time the newspaper’s readers could depend on its reporters to explain the significance of a development. Now, though, the Times quotes a host of law professors, lawyers, former prosecutors and assorted other so-called experts to explain and interpret the news. In its account of the settlement, the Times quoted two of these types and referred in two other instances to “a number of experts” and “legal experts.”
In a Web site article, the Times quoted Rob Tilliss, a partner at Inner Circle Sports, a sports advisory firm, as saying that the Mets were “basically in the same position they were in even though the Madoff ruling is a net neutral to them.”
On the contrary, the Mets would have been far worse off had they gone to trial and lost. A trial loss would have cost them much more, perhaps $303 million more. As a result of the settlement, the Mets may not have to pay Picard anything. That’s a pretty good outcome for a team that the Times had suffering great financial losses.
One last note:
In my recollection of the baseball owners’ failure to heed the arbitrator’s thinly veiled warning, I noted that the owners did that large on the advice of their National League lawyer, Lou Hoynes. He was with the New York firm of Willkie Farr & Gallagher. The dispute between the Mets and Picard was settled in the offices of Willkie Farr & Gallagher, the legal home of former New York Governor Cuomo, the mediator in the case.