PSV/MLS File Reply to Motion to Dismiss

Note: I recently started a Patreon for those who want to help support/expand my writing content. Whatever you’d like to contribute is greatly appreciated! End plug.

Become a Patron:

downloads_wordmark_white_on_coral@2x


After 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 their response on May 2. We then went through the delay (which I won’t belabor here; you can read about it in the SaveTheCrew section of this site), and with this filing, the matter can be heard by Judge Brown at his convenience. Without further ado, let’s dig in.

First, there appears to be a hole in this reply brief:

It’s been so long, that I of course had to refresh myself and review the previous two briefs. In the plaintiffs’ response to the MTD, they came out of the gate arguing that PSV/MLS didn’t satisfy the standard for dismissing a case at this stage. From their response brief:

screen-shot-2018-05-02-at-7-07-03-am.png

It’s a high standard to overcome, so I was interested to see how PSV/MLS would respond. Let’s take a look below.

.

.

.

So, it’s not there. I assume PSV/MLS isn’t conceding this point, since if you accept the plaintiffs’ argument, how do PSV/MLS intend to even get through the door? Either they think the Modell law is so plainly unconstitutional that the court will essentially dismiss the case out of hand, or their briefs aren’t ultimately meant for Judge Brown. Watch this space. Let’s move on to the brief itself.

Reminder: Here is the Modell law.

Screen Shot 2018-07-18 at 4.16.27 PM

Intro: PSV/MLS argue plaintiffs mistakenly believe that due to the acceptance of public funds, there is an “implied” contract between the government and PSV/MLS.

Screen Shot 2018-07-18 at 4.40.11 PM

This is mostly a reiteration of the initial brief, confirming again that MLS owns the Crew, and arguing that the statute doesn’t apply to the defendants based on the facts or the law.

Intro: PSV/MLS argue that accepting publics funds does not mean that constitutional rights are waived.

Screen Shot 2018-07-18 at 4.52.22 PM

As you can see, PSV/MLS are going to put a high-press on the quasi-contractual issue. Of course, people bargain away constitutional “rights” all of the time (see: Stadium Lease Snapshot). And, as has been pointed out, nobody forced the Crew to accept those funds. So it’s going to be a narrow hole that PSV/MLS try to squeeze through. On to the arguments.

Argument: Modell law does not apply to PSV/MLS because MLS did not (and does not) receive financial assistance.

We are going to get in to a hyper-technical, super grammatical lesson, and I assume everyone is going to fall asleep about one-half paragraph in.

Screen Shot 2018-07-18 at 5.14.45 PM

Now, it should be noted that motions and cases can turn on a word or a misplaced/used comma. That said, I still struggle to make sense of this argument. Crew SC are a professional sports team: Check. They are owned by MLS: Check. Crew SC received taxpayer assistance: For purposes of this motion, Check. I’m not sure I agree that Paragraph 43 is a “legal conclusion” per se, and PSV/MLS don’t really explain it any further. I don’t know…I would just like a little more on this point, because there is something to be said for plain meaning and common sense.

And if you thought we were going to get into a battle on grammar and sentence structure before, just wait until you read this:

Screen Shot 2018-07-18 at 6.08.46 PM

Again, the main problem with this for me is that PSV/MLS’ reading makes the statute nonsensical. Why would it be an *owner* that “ceases playing most of its games at the facility.” I cannot see Judge Brown following this interpretation, in light of some of the rules of construction in the Ohio statutes.

Words and phrases shall be read in context and construed according to the rules of grammar and common usage. Words and phrases that have acquired a technical or particular meaning, whether by legislative definition or otherwise, shall be construed accordingly.

Call it the “common sense statute.” I have a feeling Judge Brown will be liberally applying this rule.

Argument: For the Modell law to apply, PSV/MLS must play in a taxpayer supported facility AND (currently) receive public assistance.

So this was a more interesting (and potent) argument. The argument being that for the Modell law to attach, two conditions must be satisfied.

Screen Shot 2018-07-18 at 6.27.10 PM

Fancy lawyer-language aside, this basically means that the phrases “taxpayer supported facility” and “financial assistance” must mean different things, because there would be no point to have redundant phrases in the statute. And it’s forbidden by Ohio law besides. If we concede that PSV/MLS is playing in a tax-payer supported facility, the question then is, what is the financial assistance?

In the plaintiffs’ response, they cited a number of examples which they believe qualified as financial assistance (I’ll try not to go back and forth between the motions too much):

screen-shot-2018-05-02-at-7-54-57-am

PSV/MLS counter in their reply that the plaintiffs’ examples do not qualify.

Screen Shot 2018-07-18 at 6.35.46 PM

If Judge Brown agrees with PSV/MLS’ broad definition, they may have found a way to breach the plaintiffs’ argument here. I’ll take a further look at the case-law which they are using to support this argument. From here, PSV/MLS’ continue to attack on the argument that the statute requires two conditions to be satisfied (taxpayer facility AND public assistance).

Screen Shot 2018-07-18 at 7.45.21 PM

I mean, at some point these arguments on words and commas and conjunctions make ones eyes glaze over, but that why they pay the Judges the big bucks. I’ve kind of gone over this through the course of the three pleadings, and my guess is that if Judge Brown reads the statute in a “common sense” way (which is allowed by statute), the plaintiffs will prevail. I’m a bit skeptical that Judge Brown would agree to dismiss on these hyper-technical grounds, but of course this sets up the parties for an appeal either way.

Dormant Commerce Clause:

Not to belabor the DCC discussion too much (much of it is covered in the two prior motions), but the thing we’re essentially dealing with are laws that unlawfully favor local interests/people and exclude (in this case) out-of-state individuals. Again, these issues were covered in both of the previous briefs, so I’ll try not to repeat too much. The plaintiffs’ sought to show that the law complied with DCC rules. I’ll repost the plaintiffs’ argument here, as it is instructive.

screen-shot-2018-05-02-at-8-28-22-am
With that from the plaintiffs, PSV/MLS first argue that the plaintiffs’ interpretation of the law is wrong.

Screen Shot 2018-07-18 at 8.20.50 PM

I’m not sure I agree with this analysis, mainly because I don’t think that statutes that do any of those three things are facially struck down, which is what this argument seems to say. That’s not to say that courts *won’t* strike them down, but the analysis is more in-depth than that. Also, a major concern cited in the Am. Beverage case was the overall effect of the law on local and interstate commerce, so that needs to be taken into account.  Are there any advantages that out-of-state interests are giving up, such as lower prices/discounts? I’m not sure the analysis holds up here.

Argument: Modell law violates DCC because it impermissibly discriminates against interstate commerce.

Again, it’s not that a law cannot discriminate at all, but there are (sometimes significant) limits. PSV/MLS in their reply respond to the plaintiffs’ argument that any “discrimination” in the Modell law is limited.

Screen Shot 2018-07-18 at 8.33.33 PM

Notice anything missing? How about the fact that PSV/MLS completely gloss over the fact that this statute only applies to entities that accept public funds? Reading this, you’d think that the statute prevents any business from leaving unless locals have the opportunity to purchase the team. Also, the statute doesn’t guarantee the right of local purchasers to by the team, and it doesn’t mention what the sale price would/should be. Surely, if the law ordered that locals could buy the team for 60% of the appraised value, it would be struck down quicker than a hiccup. But that’s not the case here. In the same vein, I’m not sure if there is per se an issue with less competition, since again, the law doesn’t guarantee local buyers will get the team.

The general distinction I see with the case-law that PSV/MLS cite, and this situation, is the fact that they accepted tax-payer money. The other problem is that since there is no precedent for a law like this, we don’t know if the court will find that distinction enough to justify the restraints in the law. Nothing in their briefing addresses this issue. It’s not their fault; this law is unique and has never been tested, so there is no precedent on which to rely.

Argument: Plaintiffs could use less restrictive means to achieve desired result.

An interesting argument I figured would make its way into the reply has to do with the use of this statute to protect the taxpayers. PSV/MLS raise the point that there are better ways for the plaintiffs to achieve this end.

Screen Shot 2018-07-18 at 9.21.07 PM

Now, I don’t know what negotiations went on behind the scenes before the suit was filed. I’m not sure there were any, despite the “parallel paths” talk. In any case I suppose it is literally true that the parties could have made a contract when the Crew (or, MLS) were asking for the taxpayer money. Of course, the defendants did not have to accept the money.

Argument: PSV/MLS argue that the burdens placed on them outweigh any local benefits.

Assuming that the plaintiffs survive the facial challenge to the statute on DCC grounds, they still have to show that the burdens are outweighed by the benefits. PSV/MLS attempt to argue the burdens are simply too great.

Screen Shot 2018-07-18 at 9.31.24 PM
You probably already know the response (“You didn’t have to accept the money!”), so let’s move on to that point.

Screen Shot 2018-07-18 at 9.34.37 PM

So this is where I’ll be most interested in the Judge’s ruling. If he indeed analogizes it to a contract, then PSV/MLS are basically cooked. Even if he doesn’t, they still may have an issue if the Court finds that the burdens on PSV/MLS aren’t outweighed by local benefits. Watch this argument carefully.

Argument: “Market Participant” does not apply.

There is an exception in the DCC that essentially says if the government is expending their own funds, they have more leeway in how they determine those funds be used. It’s not a blanket exception; you can still run afoul of the DCC. But it does provide for a wider berth in favoring local interests. Basically, if the city is expending its own funds for a local business, they can require local residents be preferred employees. Or at least get first crack at the jobs.

Again, from the Plaintiff’s response:

screen-shot-2018-05-02-at-9-45-39-am.png

As I mentioned, even the plaintiffs acknowledge that the conditions must be limited to the scope of what they are participating in (here, a soccer stadium and the team that plays games there). PSV/MLS attempt to distinguish between expending funds to improve the facility, and expending funds to operate the facility.

Screen Shot 2018-07-18 at 9.47.49 PM

This will be an interesting point for the court. The plaintiffs in their response also pointed out that this law is limited to the teams that accept the funding, which is of course true. But does that make them a market participant? Is it enough that they have expended their own funds? PSV/MLS argue it isn’t.

Screen Shot 2018-07-18 at 9.55.47 PM

To my mind, this section was probably the most susceptible portion of the plaintiffs case to attack, and PSV/MLS hit it hard. Assuming we get this far, it’ll be interesting to see if the Court finds that the expenditure of funds in this matter gets the plaintiffs out of jail on this point.

Argument: The Modell law violates the Privileges and Immunities Clause.

In the plaintiffs’ brief, they argued that PSV/MLS’ argument was without merit, because the Privileges and Immunities Clause has to do with rights that are essential to the fabric of the country, such as the right to travel. PSV/MLS argue it has more to do with making sure that out-of-state interests have the same opportunities as in-state entities.

Screen Shot 2018-07-18 at 10.09.50 PM

It sort of mirrors the Dormant Commerce Clause argument, in that we’re talking about alleged discrimination favoring people from Ohio. But P & I is typically talking about more fundamental issues. Along with most of the arguments here, it’s very technical.

Argument: Modell law is unconstitutionally vague as to the notice requirement.

Oh, here we go. My position on the notice issue is…well documented. Let’s just go to the PSV/MLS reply.

Screen Shot 2018-07-18 at 10.19.38 PM

Sigh. So I’ve been through this over and over and over again. Aside from noting that PSV/MLS apparently are fine disclosing the contents of closed-door, off-the-record meetings, I find their arguments on this point obtuse and disingenuous. In the interests of fostering debate, I had some discussion online with some attorneys who raised some alternate points (I’ll link it here).

While the issues regarding notice may not be as clear-cut as I think they are, PSV/MLS’ position makes it hard to take them seriously. If, as Professor Bank says, there is an issue regarding the complexity of providing notice in the context of relocation, then the question for me is: Why should the plaintiffs care? Remember, we’re talking about 1) PSV/MLS breaking a lease and 2) relocating elsewhere. If PSV/MLS want to move, there seems to be some relatively simply language that can effectuate that. If their plans fall through elsewhere, that is certainly a problem, but is it Ohio or Columbus’ problem? I don’t know. Anyway, this has gotten a bit far a-field from the legal discussion, and fortunately, the PSV/MLS brief ends on this point.

So there you go. This is all wrapped up and ready for oral argument. I think what I’ll do, since this is over 2000 words, is do a wrap-up in a separate post, where I do a tale-of-the-tape of sorts and give my predictions on how the judge will rule. One thing to point out: there were several arguments raised by the plaintiffs in their response, that PSV/MLS did not respond to in this brief, so those arguments will basically rest on the initial motion from PSV/MLS and the response by the plaintiffs. Now to wait for oral arguments to be scheduled.

Advertisements
  1. […] PSV/MLS file reply in their motion to dismiss the lawsuit. [July 19, 2018] […]

    Like

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Advertisements
Advertisements
%d bloggers like this: