PSV/MLS Hit Back Hard; Oppose Motion to Toll Six-Month Purchase Period

Anyone hoping for an amicable solution to the #SaveTheCrew fight is going to have to wait for a while. That shouldn’t particularly surprising; we are in the middle of a lawsuit after all where the end result could be the end of a sports team in a city that has called them home for over 20 years. And these things almost never turn out well for one party or the other. So it’s hardly a surprise that both parties are giving as good as they get.

We’ve got multiple cross-motions (none of which have even been set for a hearing date) from the Plaintiffs filing motions to compel discovery and toll the six-month period to allow local investors to purchase the team. On the other side, we have the defendants 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 local buyers.

There are still unanswered questions about whether (and when) notice has been provided, and therefore when the six-month purchase period begins (if it has). It’s interesting that PSV/MLS have not argued for dismissal on those grounds (my guess is they are saving that arrow for an “affirmative defense” if they lose the motion to dismiss). But either way, it’s in their interests (either because they want to move to Austin, or simply as negotiating leverage) to keep that six-month window as short as possible. PSV/MLS list four reasons that the six-month period should not be tolled, so let’s dig in.

Argument: The six-month window should not be tolled, because ORC 9.67 is unconstitutional:

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This is basically covered in my story on the PSV/MLS motion to dismiss so I won’t belabor the point here. But the bottom line is that if the law is unconstitutional or otherwise doesn’t apply, there is no six-month period that needs tolling.

Argument: Assuming ORC 9.67 applies, there is no basis to toll the six-month window:

The next argument is an interesting one, in that it seeks to use the construction of the statute against the plaintiffs. Essentially, the argument from PSV/MLS is that despite all of the flaws associated with the statute, the one thing that is clear-cut is that there is a six-month window to purchase, and that the plaintiffs haven’t cited any on-point authority to justify why it should be tolled, or even could be.

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That may seem a bit brazen in light of the various attacks PSV/MLS have launched at the Modell law, but I suppose one person’s brazenness is another person’s creative argument. How you measure this argument depends on how the court construes the nature of the “six-month” provision. PSV/MLS argue you cannot use the principle of equitable tolling to change an essential element of a statute:

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It’s an interesting argument, as I said. Arguing that the six-month provision is what it is, and you cannot change it. Interpreting that provision as like a statute of limitations may be a stretch to be sure. Also, if I’m inferring the argument here, is that PSV/MLS are basically admitting that if they decide to “run out the clock,” they can and there isn’t anything that the plaintiffs can really do about it.

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Hmmm…stay tuned.

Argument: Plaintiffs should be held to the language as written in the lawsuit:

The other side of the coin from the argument above. PSV/MLS argues that equitable tolling statutes are generally reserved for extreme circumstances, such as fraud or deception.

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Now two things here: 1) The world “generally” provides some wiggle-room here, and 2) will the court, if they accept the defendants’ argument, find that the actions of the defendant provide a basis which qualifies for equitable tolling (refusing to respond to letters from the City; “parallel paths”)? I’m not sure. I’ll have to do some additional digging to see how much wiggle room there in fact is.

From there, defendants go on a length (and I mean at length) explaining that since the plaintiffs have had repeated and extended notice of the plans of PSV, they cannot claim they have not had ample time to respond and therefore, there should not be a tolling of the six-month window.

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My thoughts on this issue are very well-known, so I’m not going to repeat myself again here (read those links). Maybe I’m way off base on the notice issue, maybe I’m right on the mark. We shall see.

Finally in this section, PSV/MLS argue that extending the window would cause irreparable harm, in that it would prevent them from exploring relocation to other markets. They then stick the knife in to Crew fans, the City and the State.

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Ouch. Putting aside that little sugar plumb, strictly speaking, PSV/MLS is correct that a ruling would impact their business dealings, so that is an issue the plaintiffs will have to answer to when they file their reply briefing. As I said previously, a motion to toll the window indefinitely probably isn’t going to fly; at some point prospective buyers would need to fish or cut bait. Similarly, the court isn’t going to hold this case while potential buyers come and go, even if there are concerns about what financial information is disclosed to those folks. I’d certainly narrow that request.

Argument: Plaintiffs should be pursuing a preliminary injunction, and are disguising the request as a motion to toll to escape reaching higher burden.

Essentially, the defendants argue here that since the plaintiffs are requesting something which would prevent PSV/MLS from moving (potentially indefinitely until the case is resolved), the plaintiffs are therefore being granted a remedy requested in their Complaint, which means they should be requesting a preliminary injunction.

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It’s obvious why the plaintiffs would prefer the Motion to Toll; the burden to prevail is arguably lower (though I’m not entirely sure). As I said, the request for an indefinite toll of the six-month provision may be a bridge too far and there is an argument that it unduly prejudices the defendant in this case.

I was originally surprised that the plaintiffs didn’t pursue the preliminary injunction, though I can understand the risks involved. And the six-month window provides a backstop on that issue, though not forever as we know. The next step is to see how the plaintiffs respond to this briefing in their reply. After that, we should get dates for oral arguments and the parties can prepare for their first major battle. And depending on what happens, maybe the last.

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