Analysis: After Rejection from Ohio 10th, PSV/MLS Options Narrow

The ruling from the Ohio 10th Court of Appeals, which unanimously dismissed the interlocutory appeal by PSV/MLS was a stinging (though not stunning) blow to the defendants. The order from which the defendants were appealing was determined not to be a final appealable order and was thus dismissed for lack of jurisdiction. Here, I will review the order, and explore the options of PSV/MLS going forward.

RULING:

The first (important) thing to note is that this ruling was issue Per Curiam, which means that it was unanimous by the panel. This will play into the discussion as to the options for PSV/MLS going forward. Beyond that, the introduction by and large summarizes the background of this case.

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Dismissal on Jurisdictional Grounds:

As I remarked in my previous stories, the issue here didn’t necessarily have anything to do with the substantive merits of PSV/MLS’ arguments; it was more the fact that this appeal was premature. As such, once the court decided that this was not a “final appealable order,” PSV/MLS was essentially dead in the water.

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Principally, the court determined that this appeal was premature, but they also found the appeal fails based on several other issues which I’ll discuss below. But on this point, the bottom line was that the court found that PSV/MLS could come back once the court had made more substantive rulings.

2505.02(B)(2)/2505.02(B)(4):

The above are the two provisions that PSV/MLS primarily argued to justify the appeal. Outlined below, we are basically talking about two things: Substantial rights in special proceedings, and provisional remedies you can’t get relief from if forced to wait until the case is over.

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Provisional Remedy:

The court first looks at the provisional remedy, which in this case means a preliminary injunction. PSV/MLS spent a lot of time in their briefing arguing that the lower court Order was in effect a preliminary injunction, because it ordered them to do a number of things and (in their view) prevented them from moving (or preparing to move) to Austin.

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The court notes that PSV/MLS’ justification for this argument lies in the fact that since they believe the Modell law is unconstitutional, and Order that requires them to comply with the law makes this Order a de facto preliminary injunction. The court however found that the Modell is presumed to be constitutional until adjudicated otherwise.

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Given that fact, as the lower court has not made a ruling on the constitutionality of the law, PSV/MLS can obviously appeal an adverse ruling at a later date, and that presumes that they won’t win in the first place.

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The Sky Isn’t Falling for PSV/MLS:

People who’ve read my analysis of PSV/MLS’ briefing know I wasn’t a fan of it. One of the more perplexing arguments was over the harm that PSV/MLS argued they were suffering as a result of the order. I’ll post a summary of my analysis here:

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It seems the Appeals Court agreed with that analysis:

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You’ll note I highlighted the section regarding the statutory notice period even having commenced. Maybe I’m reaching, but is the court subtly noting that PSV/MLS’ argument that the notice period commenced in October/November ’17, or March ’18 may not fly? Perhaps I’m overstating that portion, but interesting, nonetheless. Beyond that, I never believed that the PSV/MLS argument regarding the harm they are suffering was particularly strong, and the Court obviously didn’t either. And in any case, even if the Order *was* considered a preliminary injunction, the court *still* didn’t find that it would be a final appealable order, because PSV/MLS have the ability to obtain a redress later.

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Regarding the issue of discovery and a Non-Disclosure Agreement, the court notes that the lower court hasn’t compelled PSV/MLS to do anything at this point, and until they do, an appeal on this point is premature.

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This is absolutely true. My guess as to why PSV/MLS filed this prematurely, is that they don’t want to admit that they’re going to refuse to comply under any circumstances, which would mean that they weren’t going to comply with the provisions of the Modell law at all, which probably means that the plaintiffs were going to have to seek a preliminary injunction. But again, strictly speaking, the only think the court ordered PSV/MLS to do was to sit down and discuss any potential for a settlement, determine what financial information is needed, craft a NDA and establish what a bona fide purchaser means. In the event they refuse, *then* the Court would get more heavily involved, which would likely make the appeal ripe.

Substantial Rights in a Special Proceeding:

Finally, the Court (briefly) addresses the fact that the order affects a substantial right in a special proceeding. The Court notes that a declaratory judgment is in fact a special proceeding (PSV/MLS successfully argued this point), and an Order entered in a declaratory judgment action (here, that the Modell law applies to the defendants) is a final appealable order.

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However, the Court finds here that there is not an infringement of a substantial right that cannot be addressed after the lower Court rules on more substantive issues.

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So, there is the ruling from the appeal. So the question is, where does PSV/MLS go from here.

NEXT STEPS:

PSV/MLS Can File a Motion for Reconsideration:

If PSV/MLS doesn’t like the ruling (and they surely don’t), they can file a motion for reconsideration.

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Reconsideration essentially means PSV/MLS think the ruling is wrong, and they’re asking the Appeals Court to take another look at it for one reason or another. Of course, the fact that this ruling was issued unanimously makes it very unlikely the Court would agree to change the ruling.

PSV/MLS Can Appeal to the Ohio Supreme Court:

If PSV/MLS thinks a reconsideration would be pointless (or after trying and failing), they can appeal to the Ohio Supreme Court, arguing the lower court rulings were wrong. I personally think they’re unlikely to prevail, but that’s simply a preliminary assessment. It’s also possible the OSC declines to hear the matter.

PSV/MLS Can Try for Removal to Federal Court:

I haven’t researched this yet, and to be fair, there is no indication that PSV/MLS have explored it. But it is an option, so I list it for that purpose.

PSV/MLS Can Comply:

Also a likely option to be fair. PSV/MLS can submit to the Order and proceed on the trial track. That would have the benefit of getting closer to ruling on their motion to dismiss this case, AND put pressure on the plaintiffs to establish that there are bona fide purchasers. After, all if no BFP come forward, this case is essentially mooted. There are rumors of BFP being ready to submit offers, but they are just that at this point: rumors. Unfortunately, we’re unlikely to get much information on this, given the NDA/protective orders that will be entered, until much later on. This could also involve potential settlement negotiations, if PSV/MLS don’t see a way to get to Austin (or elsewhere) before the 2019 season. And we actually now have some evidence that a NDA has been signed, and the parties are participating in some sort of valuation.

PSV/MLS Can Not Comply:

Though we have some evidence they are now complying with various portions of the Order (see right above), it’s not beyond the realm of possibility that at some point PSV/MLS will effectively withdraw from participation, by not providing financial documentation to the Court or sitting down for negotiations with the plaintiffs. I haven’t been able to confirm the extent to which the plaintiffs are involved with any discussion with outside parties, but one assume PSV/MLS will have to submit this information to the court to confirm compliance, even if it’s under seal/protective order. Another answer we should get soon. But if they don’t comply to the Court’s satisfaction, then the Court would likely enter its own orders, which could make an appeal ripe.

PSV/MLS Can (Attempt to) Accelerate Relocation:

Whether or not they get a deal with Austin PSV/MLS could formally announce that they are ceasing play at MapFre and move to make relocation a reality. I don’t think they’d do that for this year (they’d have to find a suitable location, as well as secure leases and the like), but this would rip away the “Parallel Paths” talking point, and would likely result in the plaintiffs attempting to obtain a preliminary injunction.

Should be interesting times for the next several weeks. PSV/MLS’ next steps will prove very interesting, and we should hear what they’re going to do very shortly.

 

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