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Ruling in MASN dispute with Orioles goes the Nationals’ way

The Orioles and Nationals — here represented by managers Buck Showalter, center, and Dusty Baker, in red, have been battling on and off the field. (Patrick Semansky/Associated Press)

The Washington Nationals scored a rare victory in the ongoing legal battle over their share of the Mid-Atlantic Sports Network’s television revenue, as a New York Appellate Court ruled that their share of the rights fees must be determined by the committee that was supposed to determine them in the first place — Major League Baseball’s Revenue Sharing Definitions Committee (known to followers of this case as the RSDC).

The decision does not award the Nationals any money, nor end the heated and convoluted legal saga in which they and the Orioles have been deadlocked for years now. They will not get the $298 million the RSDC originally awarded them for their 2012 through 2016 rights in 2014. That decision was vacated in 2015, and the appeals court upheld that decision unanimously this week.

Previous Nationals Journal blog posts on the MASN dispute

But this week’s decision does mean that, barring appeal, the Nationals will be able to return to the RSDC as they and the Orioles determine their rights fees for both the past five seasons and the next five. That committee — comprised of three MLB owners and executives — constantly changes makeup, and the court therefore ruled, 3-2, that while the last RSDC decision must be thrown out, a new committee might not present the same problems.

The Orioles argued the initial RSDC ruling — the one that would have given the Nationals nearly $300 million — was unfair because the law firm represented the Nationals did work for the league and the organizations of those on the panel. The court agreed, which sent the whole thing spiraling into a new legal sinkhole: If not that RSDC, then who would determine the rights fees?

The most recent decision, announced on Wednesday, means the Nationals can go back to that RSDC for arbitration — the committee both teams made a contractual agreement to use when the Nationals first moved to D.C.

“We are gratified that the appeals court recognized the importance of enforcing contractual arbitration agreements,” Nationals lawyer Stephen Neuwirth, of Quinn Emanuel, said in a statement. “We look forward to finally having the rights fees determined in the forum the parties chose.

Those rights fees might not, however, be determined in the forum the parties chose anyway. The court’s decision to send the arbitration back to the RSDC was not unanimous, at 3-2. Those two votes of dissent give MASN the right to appeal the decision to the New York Court of Appeals — the highest appellate court. One of those two votes came from the Chief Justice of the First Department of Appeals, Rolando Acosta, whose dissenting opinion could pose problems for the Nationals should the case move to a higher court.

“I cannot recall having previously encountered such a confluence of factors that call for judicial intervention in an arbitration,” Acosta wrote in his dissent. “… I would hold that it is necessary and appropriate to exercise our inherent equitable power to reform the contract and refer the matter to a neutral arbitral forum.”

Buoyed by Acosta’s dissent, given the history between these two teams, the Orioles will almost certainly appeal.

“We believe Presiding Judge Acosta correctly recognized in dissent that MLB’s pervasive bias and unfair conduct has infected the RSDC so as to frustrate the parties’ intent to submit their dispute to a fundamentally fair arbitration,” Orioles lawyer Carter Phillips, of Sidley Austin, said in a statement.

For now, the Nationals are touting this decision as a victory. Indeed, they have not seen many rulings in their favor during the MASN dispute, making this one something to celebrate. Should the arbitration go back to the new-look RSDC, the Nationals seem likely to benefit from that financially, though presumably the kind of independent arbiter the Orioles favor would and award them some amount of money, too. In other words, while the decision to allow the RSDC to hear the arbitration is a small victory for the Nationals, it does not bring a conclusion to the saga nor money to their coffers.