PSV/MLS v. Columbus/Ohio Motion to Dismiss Oral Arguments [Live Blog]

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Got the best seat in the house: One that is close to an outlet. As always when I’m doing a live blog, excuse the typos, as I’ll be typing faster than I can think. Time stamps will be Eastern Daylight Time. Let’s get started!

1:59 PM: Good afternoon! We start things off with the bailiff warning that crying children (or attorneys) will have to leave. Heh.

2:07 PM: Oddly, live tweeting is not allowed. Fortunately, I can live blog to my heart’s content.

2:13 PM: Several cops in the courtroom, for what I can only assume is crowd control. There is definitely a home-field advantage, as the gallery is packed with Crew fans.

2:14 PM: Gonna use the facilities, as I’m guessing getting up and leaving during arguments will result in me not being let back in.

2:23 PM: I don’t see any MLS/PSV executives. My guess is they decided a bunch of New York suits wouldn’t play especially well.

2:27 PM: PSV/MLS attorneys are here.

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2:29 PM: And the courtroom is full. Nobody else will be let in.

2:31 PM: PSV/MLS are setting up an exhibit, which looks to be the Modell Law statute (ORC 9.67). No powerpoint, apparently; definitely low-tech.

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2:35 PM: Waiting for Judge Brown. Nothing but silence and typing.

2:37 PM: Judge Brown is here, PSV/MLS will reserve 10 of their 45 minutes for rebuttal, so 35 for their direct argument. Let’s go.

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2:39 PM: PSV/MLS opens with a summary of their position, noting this is an emotionally fraught case, and they know that people are upset, but that is not a reason to prevent MLS from moving the Crew. They’re going to focus on the Dormant Commerce Clause issue, as expected.

2:43 PM: PSV/MLS puts forth their argument that neither PSV/MLS officially “received” benefits from the City/State. With respect to the constitutional argument, PSV/MLS argues that States may not pass laws that burden interstate commerce, or discriminates other actors (states) to the benefit of Ohio. They then argue that the law presents unconstitutional hurdles preventing MLS moving. Further it gives benefits to in-state actors, at the expense of citizens from other states. Finally, we get into the argument regarding the statute being unconstitutionally vague, based the “notice” and the “opportunity to purchase.”

2:45 PM: PSV/MLS refer the judge to their ORC 9.67 exhibit, to which the Judge deadpans that he is “well aware of it.”

2:46 PM: PSV/MLS argues that the complaint does not allege any specific benefits that MLS (Paragraph 44 of the Complaint) directly received.

2:49 PM: PSV/MLS says whatever the applicable party is (PSV/MLS), none have received benefits, and says that any financials received were for the facility.

2:52 PM: PSV/MLS argues that examples of “financial assistance” would be income tax break, direct payments in exchange for the team not relocating (!). Judge Brown stops and asks whether if the municipality had done that, wouldn’t MLS argue that violated the constitution. PSV/MLS says the difference is that would be a contract between the parties, as opposed to a statute.

2:54 PM: Judge Brown asks whether PSV/MLS is saying that an outside entity (from outside the state) cannot make an offer to buy during the six month “notice” period. PSV/MLS says they can make an offer, but they cannot purchase and the team cannot leave during that six months.

2:55 PM: PSV/MLS says that the Crew is just an “asset” of MLS, that is operated by someone. That won’t go over well.

2:57 PM: Judge Brown asks how the fact that the investor/operator is getting a benefit from the municipality, how that does not benefit MLS? PSV/MLS has an explanation regarding shareholder benefits, which makes very little sense. Judge Brown seems very skeptical of this argument.

2:58 PM: Judge Brown asks about the unique nature of MLS’ business structure. PSV/MLS says that the structure of MLS was public and not hidden. o_O

3:00 PM: The number of eyebrows raised in the courtroom by that statement would make The Rock jealous.

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3:01 PM: The judge asks if MLS would concede that there was an indirect benefit to them by receiving those benefits. MLS dances around that a bit, but more or less agrees.

3:04 PM: Discussion regarding the dormant commerce clause, and PSV/MLS argues that laws like this have been prohibited as a fundamental tenant of U.S. jurisprudence. Reiterates states have always been facially prohibited from benefiting their own citizens at the expense of others from outside the state.

3:06 PM: PSV/MLS argues that the two exceptions (community safety and market participant) don’t apply here.

3:08 PM: Summary: The law prohibits out of state buyers from buying the team and gives in-state buyers a benefit of being able to purchase the team (first at least). I feel like we’re retreading things here a bit.

3:09 PM: Interesting, PSV/MLS argue that the statute only offers the “opportunity,” and not the ability to purchase. Hmm…

3:12 PM: PSV/MLS argues that whatever the intent of the plaintiffs, that doesn’t provide a reason to authorize unlawful restriction of the rights of the business to move. Economic protectionism is not a valid reason for a law, according to PSV/MLS.

3:15 PM: PSV/MLS argues that a Maine case said that attempting to recoup tax benefits given to a private business does not provide a basis to prevent moving a business.

3:19 PM: PSV/MLS attempts to argue the market participator argument doesn’t apply, based on the fact that neither Columbus or Ohio are in the business of operating a sports team. Well, if you believe Alexi Lalas, they *could* be.

3:21 PM: PSV/MLS six-month notice issue isn’t merely incidental, based on the fact that it affects MLS ability to schedule, change the calendar (!) and to attract out-of-state buyers.

3:22 PM: PSV/MLS skips over the Privileges/Immunities clause for purposes of closing up their argument within the time constraints.

3:26 PM: Plaintiffs are now up. Opening: Nobody forced PSV/MLS to accept the benefits.

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3:27 PM: Plaintiffs start on the PSV/MLS argument that they didn’t receive any benefit. Basically, the argument makes no sense on its face, according to the plaintiffs. Plaintiffs says they are happy to engage in a discovery process to find out who owns the Crew, but right now the issue isn’t ripe for a motion to dismiss.

3:28 PM: Judge Brown asks whether there is anything that PSV/MLS received that wasn’t related to the facility. Plaintiffs say there are tax abatements that they don’t have to use for the stadium, though they say that the Crew fans would appreciate it being used on the stadium (snap).

3:31 PM: Because we are at the motion to dismiss, plaintiffs haven’t been able to discover if PSV/MLS have received *other* financial benefits from other municipalities (training fields, for examples). Oh, that’s good.

3:33 PM: Plaintiffs move on to the presumption of constitutionality, and argue that presumption must be carried through the challenge of the statute, and that the statute must be found unconstitutional in all aspects at this stage.

3:34 PM: Plaintiffs argue that none of the cases cited by PSV/MLS to support dismissal were dismissed at the Motion to Dismiss stage.

3:36 PM: Plaintiffs head to the market participant exception, which says that cities can impose certain conditions on business who are accepting public funds (requiring businesses accepting public funds to hire local workers).

3:37 PM: Plaintiffs argue that public benefits to sports teams are beyond merely financial; there are certain psychological/emotional benefits that cities receive. A few shout outs to Columbus players (Will Trapp, Alejandro Moreno).

3:39 PM: Plaintiffs argue that ignorance of the law is no defense, which seems to be a reference to the fact that few really paid attention to this law before December 2017.

3:40 PM: Plaintiffs argue that PSV/MLS market participant analysis is flawed, because the case law they cited was rejected in later cases, and simply looking at the regulatory component is not sufficient.

3:41 PM: Plaintiffs argues that the burden is on the moving party to successfully show discrimination. Notes that Anthony Precourt purchased the team, and he’s not Ohio. Interesting point; was anyone local trying to purchase the Crew back in 2012/13? Garber claimed there was nobody interested back then, which is why they went to Precourt.

3:45 PM: Speaking to the burdens imposed on businesses relative to the benefits, Plaintiffs say that those burdens are minimal and that PSV/MLS knew what conditions applied when they accepted the money.

3:46 PM: Plaintiffs argue that PSV/MLS improperly brought part of their privileges and immunities argument in their reply. If true, that would be a no-no. Additionally, they argue that corporations cannot bring a privileges and immunities claim.

3:48 PM: Finally turning to vagueness, Plaintiffs argues that the statute must be so incomprehensible such that nobody of common intelligence could understand it.

3:51 PM: Plaintiffs’ attorney Drew Campbell (for the City) says that PSV/MLS cannot take the money and run. At this early stage PSV/MLS have not met the burden to have the case dismissed. Who owns the Crew is a question of fact which cannot be adjudicated at this time.

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3:52 PM: Campbell is really focusing on the questions of fact that have yet to be determined.

3:54 PM: Plaintiffs say that if MLS is the owner and Crew uses the facility, the statute clearly fits.

3:56 PM: Plaintiffs argue that the statue applies whether you want to move a team in-state or out-of-state, so it doesn’t really burden anyone more than someone else.

3:57 PM: Campbell argues that PSV/MLS are not really prohibited from soliciting offers from others to purchase the team, or negotiating with out-of-state to move the team. Which is obviously true given the Austin goings-on.

3:58 PM: Campbell focuses in on the fact that PSV/MLS have all but admitted they couldn’t move anywhere within six months, and that the plaintiffs never asked the court to prevent PSV/MLS from negotiating with Austin. Very interesting argument.

4:02 PM: Campbell works over the PSV/MLS reply, and their arguments that the statute is inhibiting their business operations. This seems pretty smart, as the appeals court knocked down the PSV/MLS argument on this point.

4:03: Rebuttal from PSV/MLS. Essentially there was no contract here (no meeting of the minds); just a one-sided imposition of a statute designed to regulate (impermissibly) commerce.

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4:11 PM: Judge Brown asks PSV/MLS about the presumption of constitutionality, and the fact that the motion to dismiss burden is very high, and the need to conduct discovery. PSV/MLS says that the presumption of constitutionally essentially shouldn’t increase the burden to get the case dismissed. As to discovery, PSV/MLS says that on the ownership issue, MLS agrees they own the Crew, so there is no discovery to be had.

4:12 PM: On the opportunity to purchase, PSV/MLS says that the plaintiffs have changed their argument that it is essentially a “right of first refusal” to more of just providing the opportunity to buy. They argue it’s unconstitutional either way.

4:14 PM: PSV/MLS argue they’ve provided notice they are going to move. We’ll see if anyone follows up.

4:15 PM: MLS attorney argues that if his daughter gets a scholarship, he doesn’t benefit. The judge says “oh yes you do.” MLS attorney realizing he goofed, partially concedes the point, though says it’s not a direct benefit to him.

4:19 PM: On the market participant issue, PSV/MLS reiterates that the distinction here as opposed to other cases is that Columbus/Ohio aren’t in the business of running pro sports teams, and especially the Crew.

4:20 PM: PSV/MLS says that in the privileges/immunities claim, they can bring a claim when the harm is the same as what a citizen suffers.

4:21 PM: On vagueness, PSV/MLS say that plaintiffs have notice, even though they claim they don’t. Thus PSV/MLS don’t know how to provide it, which makes the statute vague.

4:22 PM: No ruling today; judge takes it under advisement. Will issue a ruling as soon as it is practical.

4:24 PM: No supplemental briefing (thank god!), and with that, we are adjourned!

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  1. Interesting, I was under the assumption that private cameras were not allowed in court. Learn something new every day.

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    1. It’s up to the judge. The media have to request permission to record or broadcast proceedings.

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  2. re- 3:19 It’s not Columbus or Ohio I realize, but Franklin County does own the Columbus Clippers

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    1. Yeah, that was a misstep by MLS. Columbus or Fanklin County can easily claim to be market participants. There are other publicly owned sports teams in Ohio too.

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  3. Miki; in answer to your question, no one knows for certain if there were local individuals willing to buy the Crew in 2013 because the owner at the time insisted to one and all that the team was not for sale. He said that he was only looking for local minority investors. (And after Lamar Hunt sued everybody in town over the Bluejackets deal nobody much wanted to do business with him).

    Then, according to them, Garber “found” Precourt and “convinced” Clark Hunt to sell him the whole thing without it ever being offered to potential local buyers.

    Certainly the fact that there are apparently three individuals trying to buy the team in 2018 would lead one to believe that those same individuals would have been just as interested five years earlier if they had been given the opportunity.

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  4. […] PSV/MLS v. Columbus/Ohio Motion to Dismiss Oral Arguments [Live Blog] – SOCCERESQNote: 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: Got the best seat in the house: One that is close to an outlet. As always when I’m doing a live blog, excuse the typos, as… […]

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  5. […] start off with the Motion to Dismiss, which was covered here in live-blog form, but that necessarily looks at the trees and not the forest. The plaintiffs have an advantage here […]

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  6. So, MLS is arguing that the Modell Law, by opening the buying opportunity to local entities, that it “Further it gives benefits to in-state actors, at the expense of citizens from other states.”

    Isn’t in state actors in the city of Austin benefiting by getting a team from another state whose citizens have spent 20 years developing its logo, image, history, and brand?

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