Analysis: PSV/MLS File Response to Plaintiffs’ Motion to Dismiss Appeal

I know this can all get a bit confusing, so I’ll try to keep things procedurally simple. Where we’re at:

The lower-court Order which (among other things) requires PSV/MLS to provide certain financial information to the Court (along with non-disclosure agreements), tolled the six-month waiting period for 90 days, and held off on ruling on the PSV/MLS motion to dismiss the entire case, was appealed by PSV/MLS on May 15. The plaintiffs then filed a motion to dismiss the appeal on May 22. On June 1, PSV/MLS filed their response to the motion to dismiss the appeal. I’ve obtained a copy and had a chance to review it, so let’s get to it.

Introduction doesn’t mince words about how PSV/MLS feel about Columbus:

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I’m not sure why PSV/MLS added this information; do they think the (Ohio) court will be sympathetic to arguments that attack the city of Columbus in such personal terms? Moreover, I don’t see how it’s relevant in the context of a response to a motion to dismiss an appeal. But hey, I’m not the attorney on the case so let’s move on. Oh, and take note of the relocation language in the last sentence.

Background recites procedural history through the view of PSV/MLS:

Much of the background goes over what most who have been following this process already know. The tl;dr version being: PSV/MLS announced in October 2017 that they were exploring relocation, they met with city officials in November, and were notified of the need to comply with the Modell law in December. A suit was filed in March 2018, and after numerous motions were filed, the aforementioned Order (which is being appealed) was entered in May. A summary of that is below.

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This is mostly accurate, except it ignores that the lower Court indicated the 90-day toll could be shorter or longer, depending on events. And as I mentioned above, PSV/MLS’ wording regarding the notice issue is…carefully crafted.

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Aside from the bizarre insertion of a word only people who are too old to use said item say (or those who won’t ever have the opportunity to), and as a verb no less, the continued dancing around the notice issue by PSV/MLS continues to astound. Let’s cite the relevant statutory language one more time.

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I mean, the language is crystal clear. None of the purported “notices” say anything close to that. “Might relocate,” “potential relocation,” “intent to provide notice.” I wish I knew what was missing. In any case, PSV/MLS have not filed a motion arguing that the Modell law is moot based on timeliness issues.

Note: If you haven’t read my story on the motion to dismiss the appeal, I highly suggest you do so now.

PSV/MLS argue that the lower-court ruling is a “Provisional Remedy”:

The basic argument from PSV/MLS here is that the lower court ruling is in effect a Preliminary Injunction, and therefore is a final appealable order.

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This was totally expected, and if PSV/MLS can convince the Appeals Court that Judge Brown’s order amounted to a preliminary injunction, they’ll likely survive the motion to dismiss. So obviously the next argument from PSV/MLS centers around that issue.

PSV/MLS argue tolling of six-month “waiting period” constitutes an injunction:

The first point PSV/MLS attempts to argue is that the tolling of the six-month period is currently preventing them from moving AND preventing them from preparing to move.

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So wow. There is a lot here. First, this seems to be a wild exaggeration of what the order actually says. Nowhere in the order is there a prohibition on PSV/MLS doing “various things that could make relocation for the 2019 season possible.” It just isn’t there. We also know it’s not true, because PSV/MLS are ACTIVELY DOING THINGS TO MAKE RELOCATION FOR THE 2019 SEASON POSSIBLE. Just last Friday (June 1, 2018), PSV released their proposal to construct a stadium in Austin, Texas (which they’ve spent $2 million developing and lobbying for). The lobbyist for PSV did an interview making his thoughts known on the McKalla Place report released by Austin (also on June 1).  Anthony Precourt and his lobbyist were in Austin a couple of weeks ago. I just don’t see how PSV/MLS can make the claim that the Order prevents them from preparing to move, when that’s exactly what they’re doing. Really odd.

The other thing that should be noted here is that (as far as we know) PSV/MLS have not indicated they are attempting to move in the middle of this year, or any time before the season ends (for Crew fans and presumably PSV, hopefully in December). They haven’t even struck a deal with Austin yet. So beyond the Order not specifically prohibiting a move, I do not see what harm PSV/MLS are suffering that could not be remedied down the line.

PSV/MLS argue Order requiring compliance with financial disclosures, non-disclosure agreements and discussions regarding bona fide purchasers constitutes an injunction:

This is where I thought PSV/MLS would focus more of their argument, but surprisingly it gets a relatively brief mention.

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I argued in my previous article that the requirement to hand over proprietary information would be a more fruitful argument (the courts don’t see much of a difference between confidential information and privileged information in the context of a final appealable order), but PSV/MLS don’t even mention that issue in this brief, nor do they cite any case-law on the issue. Instead, they move on to the next argument.

PSV/MLS argue that the characterization of the lower-court Order as “case management” is just another word for “injunction.”

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The thrust of the argument is, “a rose by any other name…” so PSV/MLS argue that no matter what the Court and plaintiffs say, it’s still an injunction. To that end, they cite what appears to be the relevant case-law arguing that one needs to look to the substance over the form.

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So the thing here is that I don’t think the plaintiffs would necessarily disagree with this line of reasoning from PSV/MLS. But I think the issue for PSV/MLS remains the same: it’s questionable as to whether what the court ordered is an injunction, either directly or de facto. Their claim above that the order is an injunction because it prevents them from preparing to move is simply factually incorrect (and absurd, really). So even though they be correct on the interpretation of law, there is still a question as to whether the facts, to the extent they’ve been adjudicated, support their position.

PSV/MLS argue the delay in hearing this appeal will harm their ability to pursue their rights under State law and the U.S. Constitution:

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It’s a bit technical, but the argument essentially is that because the lower-court granted a provisional remedy, dismissal of the appeal will harm PSV/MLS rights to have this case dismissed in a timely fashion. That’s about as simply as I can put it.

PSV/MLS argue that not allowing appeal until the case is over (or a later date) would prevent them from obtaining meaningful remedy from this Order:

The basic argument here is that if there is a risk of loss that cannot wait until the case is over based on the lower-court ruling, the order can be immediately appealed. PSV/MLS cite the case-law along with some examples where immediate appeal was granted.

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So the next step obviously would be to analyze if the lower court Order prevents a meaningful remedy.

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Again, PSV/MLS runs into a problem here. Nowhere in the order have they been prevented from taking actions in support of relocation, such as “arrangements for a stadium lease, sponsorships…” They’re negotiating stadium terms and have put forth a lease proposal as well. Again, PSV/MLS have not finalized any agreements with Austin in any case. If they want to try to move the Crew right now, they can, and dare the plaintiffs to get a preliminary injunction preventing the move. From here, PSV/MLS argue that they are, right now, losing out on business opportunities. So what does PSV/MLS cite in support of this argument?

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Two things: 1) Arguing that their business prospects *in* Columbus are being hindered by a court Order brought about as a result of their intention to move *from* Columbus, gets a gold medal on the brazenness scale. 2) These statements are conclusory and not supported by anything in the record. PSV/MLS have submitted neither financial documentation nor declarations (from prospective sponsors, season ticket holders or business leaders) to support the claim that this Order (or the lawsuit generally) is hindering anything. In fact the only evidence we have is that this Order *isn’t* preventing anything of the sort, since they are in the process of negotiations with Austin (and Columbus allegedly). PSV/MLS attempt to address this in their footnote.

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I’m not sure I’m persuaded here. In the absence of any evidence, is PSV/MLS holding out their hopes that the Appeals Court will deny the motion to dismiss based what has to be considered abstract “risk of lost business opportunities?” Especially when PSV/MLS haven’t even reached a deal with Austin? Further, while PSV/MLS argue that the “court-ordered process” harms their ability to negotiate a sale, they don’t actually say how (if you believe that Precourt is actually interested in selling).

PSV/MLS argue Appeals Court has jurisdiction to hear appeal, as lower court Order affected a “Substantial Right”:

The last portion of the PSV/MLS response focuses on the other part of the relevant statute, which is 2505.02(B)(2), or a substantial right in a special proceeding. PSV/MLS come up with an interesting argument.

Since plaintiffs seek a declaratory judgment (in the Complaint), appeal involves a special proceeding.

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I took a look at both of the cases and they seem to line up, so it looks to me that PSV/MLS at least satisfies the first prong under 2505.02(B)(2), establishing a special proceeding, though it’s an open question as to whether the fact that we’re dealing with a declaratory judgement on the underlying case means that you can appeal *any* Order from the lower court. Either way, that just gets them to the front of the line. To get through the door, they still need to successfully argue that the order affects a substantial right, and that’s where they continue to run into problems, I think.

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The claim that the order affects their ability to prepare to move is belied by their actions so far. The order doesn’t affect their ability to move; they appear to be free to move right now (and be subject to a motion for a preliminary injunction). Their claim that such an attempt would be subject to a contempt action makes no sense; the Order doesn’t even mention relocation. It just doesn’t.

Further, the order on tolling does not appear to affect any substantial right related to the move; they haven’t reached an agreement or announced a move, and haven’t made an argument on that issue in any event. On the point regarding turning over discovery to the court, PSV/MLS spend next to no time on that argument, so it’s tough to gauge how viable even they think that argument is. My guess is that perhaps they think that the plaintiffs made a convincing argument. Let me repost what the plaintiffs had to say here:

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I’d almost forgotten about this from the plaintiffs, and it’s a pretty good argument; one that PSV/MLS completely skip over in their response. So we’re left with the orders which required the parties to confer over an NDA, and well as discuss the parameters regarding  establishing a bona fide buyer. Which…PSV/MLS again spend next to no time on.

As you can probably tell, I’m fairly bearish on this response. I’m just not sure they’ve really put forth their best arguments or focused on the right ones. I suppose we shall see; I could be off. Next up is for a reply from the plaintiffs, which is due at the end of the week. At that point, the court will make a ruling. If the appeal is dismissed, then the lower court order will stay in effect and PSV/MLS will need to comply (or be subject to sanctions), or explore other options (attempt an appeal to the Ohio Supreme Court or removal to federal court).


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