PSV/MLS File Motion to Dismiss Modell Lawsuit

The moment we’ve been waiting for has finally…belatedly…arrived. Precourt Sports Ventures and Major League Soccer have finally filed their motion to dismiss the Modell lawsuit. The brief is, as expected, 25 pages and cites a number of constitutional arguments for dismissal.

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As the brief cites a number of arguments for dismissal. It’s probably just best to take then as they come.

Argument: R.C. 9.67 does not apply, because as “owner” of the team MLS did not receive “financial assistance” from the city.

Probably the most novel of the arguments, MLS essentially argues that while the facility (Mapfre) stadium is tax-supported, there is no evidence that MLS as “owner” of the franchise, receives any financial support, and you need both to trigger the Modell Law.

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And in only what can be described as the most literal reading of a statue ever, MLS further argues that the “owner” must *currently* be receiving financial assistance.

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A lot of this gets into statutory construction, which is a story I plan to write soon. But for now, I’m going to stick to a review of the motion. As interesting as the PSV/MLS argument is on this issue, more so is the argument that to trigger the law, not only must MLS use a tax supported facility, but that the owner must currently receive the aforementioned “financial assistance.”

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Again, we’re getting into literal hyper-technical arguments here. But as the saying goes, being technically correct is the best kind of correct. We’ll have to see how the plaintiffs counter this argument.

Argument: R.C. 9.67 is Unconstitutional because it violates the Dormant Commerce Clause.

From here, we get into more standard (and expected fare), with an argument that the Modell law is on its face invalid because it violates a number of constitutional norms, including the Dormant Commerce Clause.

The general theory here is that it is illegal for a State pass laws that favor in-state interests to the restriction (or exclusion) of out-of-state interests. It’s pretty straight forward in this context.

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Generally speaking this would be behavior that burdens out-of-state entities and favors in-state-entities. So the issue here is relatively simple (I know, I know). The PSV/MLS argument boils down to two points. One, the statute prevents out-of-state buyers from being able to bid on the team:

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And two, restricting purchase of the team to in-state entities reduces completion and lowers the value and price of the team:

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As to the latter, I suppose the question is whether there are actually any out-of-state parties interested in purchasing the team. Is the law cited by PSV/MLS analogous in a sports team context, where the number of professional division 1 teams is limited? It probably doesn’t matter if the court agrees with PSV/MLS and decide the law is facially unconstitutional. On the former, its obvious that the law restricts prospective out-of-town buyers (at least initially). There are exceptions in the Dormant Commerce Clause case-law, though that generally has to do with Government as a “market participator” as opposed to regulator. It will be interesting to see how the City argues this point.

Argument: R.C. 9.67 Unconstitutionally Limits the Movement of Property in Interstate Commerce.

PSV/MLS moves on to another expected argument: The Modell law unconstitutionally prevents the team from moving to another location.

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Now, of course the law does not outright prevent a move; it simply grants the ability of a local ownership group, should they make an offer to purchase, the right to buy the team and keep it in the location where the team is currently playing. So really, the issue is whether the six-month time period is unreasonably restrictive such that it violates the law.

Argument: R.C. 9.67 Violates the Privileges and Immunities Clause.

An argument related to the Dormant Commerce Clause, Privileges and Immunities confer upon citizens the rights authorized by all states (it also infers a constitutional right to travel to all states).

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Similarly to the previous argument, the Modell law doesn’t *prevent* out-of-state citizens from purchasing the Crew; it just gives local residents the first crack at it. So again, the issue will be whether the law is simply unconstitutional on its face.

Argument: R.C. 9.67 is Void for Vagueness.

Ah, the constitutional catch-all for challenges to various laws. Of course, that does not mean challenging a law for vagueness is an ineffective strategy, and the motion outlines the general theory.

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There was a lot of talk about the Modell law being “unconstitutionally vague,” which as I mentioned is a sort of catch-all argument. So let’s dig in to see if there is anything here.

Notice:

PSV/MLS first argues that notice requirement is so vague as to potentially invite discriminatory enforcement.

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Huh? The statute in relevant part says the owner has to give “the political subdivision in which the facility is located not less than six months’ advance notice of the owner’s intention to cease playing most of its home games at the facility…” That seems crystal clear to me. Of the issues one may have with the drafting of the statute, that does not seem to be one. The only issue has been PSV/MLS playing fast and loose with the notice issue. Not sure this is a winning argument.

Opportunity to Purchase:

Plaintiffs’ then move on to the section of the statute covering the opportunity to purchase, and generally speaking, it seems like a stronger argument.

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I think the issue of continuing oversight and enforcement, with their being no regulatory framework for such a thing, may provide a more fruitful basis for an argument on vagueness grounds. On this issue, the plaintiffs will need a convincing response (which will probably revolve around the statutory construction issues I referenced earlier) I think.

Local Residents:

Back to less convincing arguments, MLS finally argues that the requirement that the requirement that the prospective owners “reside in the area” is impermissibly vague.

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Again, I find this slightly disingenuous. In the absence of specifics here, the Court is likely to go with the plain meaning. And I’d also note that reference to the “political subdivision” gives credence to “in the area” meaning Columbus in this context.

Argument: The Court Should Not Adopt an Interpretation of R.C. 9.67 That Might Yield Further Unconstitutional Actions.

This argument lines up with the above complaint that the “opportunity to purchase” is vague in that there is no statutory, legal or regulatory framework to oversee this process. Again, I think it is probably the stronger of these arguments.

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More interesting is the argument on Eminent domain and the “taking” of intangible property.

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The theory PSV/MLS is advancing here is that because local ordinances control over State laws in the context of eminent domain, and since Columbus has limited those types of takings to real property, the State is bound by the local rules, and thus there can be no “taking” of the Crew franchise. A pretty novel argument, I have to say. I look forward to seeing what the City has to say in response.

Following that up, PSV/MLS argues that even if the law does apply as to the sale of intangible property, it doesn’t apply as to MLS because MLS is not subject to the jurisdiction of the state of Ohio, because the Crew…doesn’t exist there?

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Schrödinger SC indeed. I went to law school; philosophical discussions like this are well beyond my pay grade. But beyond that, the argument appears to be that since the Crew as an entity do not “exist” in Ohio, that neither the City nor the State can reach them for purposes of forcing a sale.

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Essentially if this argument holds, the plaintiffs would not be able touch the “property” of the Crew, even if the Modell law applies.

Finally, we have the argument that a “forced sale” would violate the Contracts Clause of the Constitution.

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So if I have this right: Anthony Precourt doesn’t actually own the Columbus Crew. He owns 1/23 of MLS. In fact, it is MLS that owns the Columbus Crew. Who aren’t located in Columbus. Even though they play all of their games there…

…I think I’m done here for the rest of the day. I’m going to go meet a friend this afternoon and have a drink, or seven. I hope I have been able to outline this motion in a relatively readable form. We’ll see what the plaintiffs response to this motion is. We should get a hearing date on this motion relatively soon.

 

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  1. […] from the battle over the motion to dismiss filed by PSV/MLS, I think it’s fair to say that the biggest argument in the immediate future centers over the […]

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  2. […] filing a motion to stay the entire discovery process (which the plaintiffs have opposed), moving to dismiss the whole case, and now have filed their motion opposing tolling of the six-month purchase period for prospective […]

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  3. […] The pleadings continue to come fast and furiously, with the City of Columbus and State of Ohio filing their response to Precourt Sports Ventures and Major League Soccer motion to dismiss the lawsuit. As a brief recap, PSV and MLS cited a number of legal arguments to explain why this matter should be dismissed. […]

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  4. […] have filed a motion to dismiss the lawsuit. Plaintiffs have filed their response, and defendants have until May 11th to file their reply, at […]

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  5. […] to make MLS look out-of-touch with actuality. The league and Precourt have even tried to argue that the Crew don’t truly exist in Columbus, however in Delaware (!!!) in an try and get the lawsuit thrown out on a […]

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  6. […] notice hearings (mainly because the judge has basically ruled on those issues). However, the motion to dismiss still requires a reply from the defendants to the response filed by the plaintiffs. This will […]

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  7. […] and MLS have recently filed motions to dismiss in the NASL Breach of Fiduciary Duty case and the SaveTheCrew case, respectively. Is the USSF trying to tell us that because the plaintiff’s claims are so […]

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  8. […] plaintiffs here. To briefly recap: The defendants filed a motion to dismiss this lawsuit back on April 20, 2018. Victory by the defendants would (likely) mean the case is dismissed. The plaintiffs filed their […]

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  9. […] a lengthy delay, PSV/MLS have filed their reply to their Motion to Dismiss (MTD). The original motion was filed way back in April, with the plaintiffs’ timely filing […]

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