As expected, the Plaintiffs in the Modell lawsuit have filed a motion to dismiss the Appeal filed by PSV/MLS, which contests the Order entered by Judge Brown. That Order required the defendants to potentially hand over certain financial documents, tolled the six-month waiting period and stayed a decision on the motion to dismiss the case (among other things). You can take a look at my analysis of that order here. Concurrently, the plaintiffs have filed a motion which states they do not oppose an expedited process to resolve this issue.

The motion is 30+ pages, and as I previously suspected, argues that the lower court ruling is not a “final appealable order.” Let’s get into it.

Introduction: The Appeal is premature, because there has been no adjudication (ruling) of the case in chief, and no fact-finding at the lower level.

As you can see above, the argument from the plaintiffs is that the ruling from Judge Brown did not dispose of the case. PSV/MLS is still asserting all of its claims as to applicability of the Modell law, as are the plaintiffs. They haven’t been forced to sell the team, nor prevented from moving the team right now if they wanted to (try to, at least). So the best way probably to figure out what is going on here is to ask yourself, “what did Judge Brown rule on in his order?” Did he make a finding that the Modell law applied to PSV/MLS? Not really. Did he order PSV/MLS to sell the team to a local investor? No. Did he  issue an injunction preventing the move? No.

What he did was order that some preliminary steps be taken, in that PSV/MLS has to provide some financial information and sit with the court (along with the plaintiffs) to discuss the meaning of a bona fide purchaser and what a proper valuation might entail. Additionally, any prospective buyers need to come to the table as well. As to the tolling of the six-month period and the motion to dismiss, those issues are still pending, and as to the six-month issue specifically, PSV/MLS hasn’t filed a motion to address that issue anyway (such as a summary judgment).

So with that, it’s the plaintiffs argument that absent some adjudication on those fundamental issues, it is improper for the Appeals Court to even hear this case, let alone rule on it.

To this point, the plaintiffs’ motion sets the stage for what they believe are the outstanding trial issues:

Again, ask yourself, “have any of these issues been adjudicated by Judge Brown?” I think the answer to all of them at this point has to be, “no.” Even as to the discovery issue (bullet point five) we’ve had, to my knowledge, no exchange of any documentation. Or even any disclosure of that information to the court. Or an order compelling the defendants to turn over anything of substance.

To be fair, the Court ruling did state that if the parties could not agree on what information to provide, the Court would do it for them. So there is an argument to be made that an order “compelling” the defendants to produce discovery is essentially inevitable. But the ruling doesn’t order that the defendants turn that over to the plaintiffs; only to the court. Presumably, any prospective buyers would have access to it, after signing a NDA. So there is an open question as to whether this even qualifies as an order to provide discovery in the normal sense of the word. We’ll see.

R.C. 2505.02:

Probably never heard of this, right? Well, I don’t blame you, but get used to seeing it while this appeal runs its course, because it’s the statutory language which governs what is described as a “final order.” The basic premise is that you don’t want courts clogged up hearing appeals on every little order that one party or the other doesn’t agree with. So the types of orders that an Appeals Court can hear are very limited. So when you hear the term “final order,” it doesn’t pertain to a ruling a court makes after hearing any type of motion. There are basically two types of things that qualify as final orders (for purposes of this discussion): Substantial Rights and Provisional Remedies. The plaintiffs lay out the argument thusly:

This probably looks like gibberish to a lot of you, and don’t feel bad, because it is some super technical stuff. I’ll do my best to try to break it down. For purposes of the argument, the defendants in their motion are arguing (or going to argue) that the order by Judge Brown affected a “Substantial Right in a special proceeding”, and/or granted the plaintiffs a “Provisional Remedy.” It is even more dense than that, if you can believe it (and I’m sure you can). Let’s take them one-by-one.

Substantial Right:

Off the bat, a Substantial Right is fairly easily outlined in the statute:

“Substantial right” means a right that the United States Constitution, the Ohio Constitution, a statute, the common law, or a rule of procedure entitles a person to enforce or protect.

Owning property, would be one example. The right to free speech, or to an attorney in a criminal proceeding are others. So under 2505.02(B)(2), the order must affect a substantial right in a special proceeding. Which is where the plaintiffs argue that the defendants run into problems.

I didn’t review the PSV/MLS motion to expedite in a stand-alone story, but here is a good place to briefly discuss it. In the PSV/MLS motion, the argument that PSV/MLS apparently intends to make in the full brief is that the Order from Judge Brown effectively granted the plaintiffs a preliminary injunction.

If you’ve followed my work on the NASL/USSF case, you’re well acquainted with preliminary injunctions. Either way, as to whether preliminary injunctions are appealable under this section, the plaintiffs argue they are not.

Plaintiffs are absolutely correct here; the statute plainly lays out that fact. It should also be noted that the plaintiffs are not conceding that the Order from Judge Brown is a preliminary injunction, in any case.

Beyond that, the plaintiffs argue that the Order still doesn’t qualify as appealable under this section because the defendants have the ability to appeal once there is a final adjudication on the merits.

So the question to ask is: What “substantial right(s)” has this Order affected and is PSV/MLS prevented from challenging it at a future date? Or, will PSV/MLS lose said right(s) if they are unable to appeal the Order? Again, they haven’t been prevented from moving (or at least trying to), nor has their argument that the six-month waiting period has elapsed been determined, nor has the motion to dismiss been ruled on (and they haven’t even filed a reply yet anyway). Again, this seems to really focus in on the discovery issue, which we’ll get to later. In any event, the plaintiffs’ sum up the argument like this:

About as concise as these things get.

Provisional Remedies:

The other ground under which PSV/MLS have based this appeal is under 2505.02(B)(4), arguing that the Order from Judge Brown constitutes a “preliminary injunction,” and therefore is a “provisional remedy” making it ripe for appeal. I’ll quote from the statue in relevant part:

“Provisional remedy” means a proceeding ancillary to an action, including, but not limited to, a proceeding for a preliminary injunction, attachment, discovery of privileged matter, suppression of evidence…

To qualify as an appealable order, there is a three-part test, which the plaintiffs outline in a case called Bennett v. Martin:

I’m going to stick a pin in Bennett for the time being. Now, we haven’t seen the full briefing from the defendants yet, but you can guess where they will eventually go with their argument. As to whether the Order constitutes a preliminary injunction, the plaintiffs argue it doesn’t and it still isn’t appealable in any case.

The plaintiffs then point out that the Order can’t be an injunction, because it neither restrains nor orders the defendants to do, well, anything substantively. We then get into flashback/PTSD territory, with a discussion on the differences between mandatory injunctions and prohibitory injunctions. Specifically on the tolling of the six-month waiting period, the May 8th Order hasn’t prevented defendants from doing anything.

Which is true from my view. PSV/MLS may be arguing “a rose by any other name,” but it’s tough to see how the language of the May 8th Order can be construed a preliminary injunction on the tolling issue. It should also be pointed out (again) that PSV/MLS have not filed any motions to adjudicate this issue specifically, and haven’t even put forth an argument as to when notice started. So I’m not sure what they’re going to argue here.

DISCOVERY:

On the discovery front, the plaintiffs argue that they haven’t been ordered to disclose anything at this point; only to meet and attempt to reach a settlement, and pursuant to that provide certain documents to the Court.

So, I’m interested to see how PSV/MLS respond to this. I can’t imagine they’ll argue that the simple act of ordering the parties to confer about possible terms for a settlement constitutes a “mandatory injunction.” Aside from looking awful from a public relations perspective, the argument that ordering the parties to see if there is common ground for a settlement is reasonable, seems persuasive (and rooted in sound public policy).

As to the issue of agreeing to provide certain materials (with the court making the decision if the parties can’t agree), that presents a different kettle of fish. It’s my understanding that the plaintiff isn’t asking for these documents to review themselves right now; only that they be submitted to the court under seal, with an NDA attached to prospective buyers.

Talking about the alleged harm suffered by PSV/MLS due to the tolling of the six-month period, the plaintiffs argue that the statements and documentation in support of the argument simply aren’t sufficient to establish “irreparable harm.”

Now again, my hunch is that PSV/MLS are going to argue that once Judge Brown orders them to provide relevant financials which interested purchasers will be able to review (with an NDA it should be noted), that constitutes “irreparable harm,” since that privileged/confidential information will be out there for others to see. That requires PSV/MLS to argue that they’re simply not going to turn over anything without a court order (or at least not sufficient information for the Court’s liking), and thus the order to compel is inevitable.

Back to the Bennett case. It’s very instructive because it involves one party refusing to hand over discovery pursuant to interrogatories/requests for production. It’s an egregious example of not complying with court orders, and PSV/MLS aren’t at that level (as far as I can tell). But the court did hold that being required to hand over confidential/privileged materials can qualify as a “provisional remedy.” From Bennett:

In the spirit of the recent Supreme Court ruling, if I were a gambling man, I’d lay a couple of bucks on PSV/MLS using this same argument on the discovery issue. Again, it requires them to argue they’re not going to comply (or that they shouldn’t have to). But there is the opening for them. And as I said, it’s my understanding that the plaintiffs are NOT asking for the information themselves, so that is a distinguishing point. Is there a sufficient enough difference? I don’t know. The defendants may run into another problem, which I’ll discuss at the end.

Argument: Defendants will have opportunity to appeal merits when decisions are made:

Finally, plaintiffs argue that any rulings made by the Court will be ripe for appeal…when those rulings are actually made.

I think the bottom line here from the plaintiffs is that the court has not made any substantive rulings, and this appeal is just wildly premature, especially on the tolling issue and the motion to dismiss. Further the Order simply doesn’t prevent PSV/MLS from asserting any of their rights.

On the issue of discovery, where I think the defendants have their best shot at appeal, the plaintiffs make the case that this argument isn’t being made in good faith, given the previous statements by PSV/MLS that they *would* provide those documents.

Talk about using your opponent’s words against them. It’s a great rhetorical argument, and is very persuasive. Of course, you can see the argument from PSV/MLS a mile away: 1) They are well within their rights to do this willingly, but there is no legal authority to force them to do it, 2) The extent of the discovery should be dictated by them and not by court order, 3) The NDA should be drafted by them, and not ordered by the Court. Essentially, “What we decide to produce, if anything, is our business.” Maybe put a bit more politely, of course.

So there is the motion to dismiss by the plaintiffs. I hope I was able to break it down; it’s certainly a difficult topic to understand. Next, we’ll have the response to this motion by PSV/MLS, as well as their briefing on the appeal. That is due by May 30, if not sooner. At some point, hopefully we get a date on this motion is to be decided, though it should be noted that the plaintiffs are hoping to have this ruled on without oral argument.

I’ll attempt to get some clarity on the scheduling for all of these issues, and will follow-up when/if I do.