Lawsuits

Parties Prepare for Pivotal Court Hearing in Fight for Lockhart Stadium Wednesday

So I feel this story has been under the radar from a national perspective (if only a little), but we’ve got a big court hearing with major implications for MLS set for Wednesday. I won’t belabor the background, but the City of Ft. Lauderdale is set to defend their deal with Inter Miami, which would allow the prospective MLS club to demolish Lockhart Stadium and construct a modular stadium for the team to play in while they try to finalize a deal with the City of Miami for a stadium there.

Setting aside whether we think this will end up being a permanent home for the team due to the issues getting a deal done in Miami, David Beckham’s group still has some work to do before they even get back to dealing with the Miami politicians. That’s because they’re scheduled to come into the league and start play a little less than a year from now, and they as of this point do not have an official place to play.

So this hearing on Wednesday is a big deal. FXE Futbol (the plaintiffs) have filed a motion for a preliminary injunction, which would prevent Beckham’s group from demolishing Lockhart. If successful, it could set back the deal weeks…or even months. Which means they’d (best case) have to open up with a long road trip, (worst case) find another place to play, (nuclear option) delay their entry into the league.

Yeah, this hearing is a big one. I’ve received copies of the briefing from each side, and I figured I’d go over it.

Background on the issues at play in the lawsuit.

For those who aren’t familiar with what an injunction does (and where were you in Civics/Government class), it’s a court order which can force someone to do something or prevent someone from doing something. It’s obviously more nuanced than that, but in the interests of not writing a 4000 word story, I’m going to leave it there. I’ll just say read the other story. The bottom line is that the City had two proposals, let the parties battle it out, and then they picked Beckham’s over FXE. The issue here is how that was done, and whether it was in compliance with Florida law.

FXE is trying to prevent Inter Miami from demolishing Lockhart, pending the resolution of the case. Because Inter wants to demolish Lockhart next week and the case will not be resolved by then, FXE essentially has no choice (if they want to prevent the demolition) but to file this motion.

The threshold to obtain a preliminary injunction is very high because the party asking for it is trying to get a remedy that they’d normally have to wait for a full trial to get. Fortunately, both parties agree on what needs to happen to win an injunction:

(1) the likelihood of irreparable harm; (2) the unavailability of an adequate remedy at law; (3) substantial likelihood of success on the merits; and (4) consideration of public interest.

Standard for winning an injunction

Isn’t it nice when the parties can get along? Alas, this is about the last time, because they agree on nothing going forward. Shocker.

Β§ 255.065, Florida Statute

So this is the main Florida law we’re talking about. It was enacted back in 2013 to allow local municipalities to develop public land. Moreover, it allows those cities to use alternate procedures in the event they get unsolicited proposals by private parties to develop land that can be considered for the public good. Included in that are recreational facilities. So that’s where we got Beckham and FXE.

Of course, cities can’t just accept any old proposal they may like to develop a piece of property. There are rules. As argue by FXE:

Requirements the City must comply with, per Florida Statute.

Now, FXE is arguing that the City didn’t comply with these requirements, and therefore this entire process is essentially poisoned. And therefore, FXE is substantially likely to prevail in this case (which is one of the requirements to obtaining an injunction; you have to show you’re likely to win the case).

FXE argues that the City did not perform an “independent analysis” and thus did not comply with the statute.

The City’s response is interesting: They argue that as long as the independent review is ultimately completed, they’re in compliance, even if it’s after they’ve ranked the two proposals.

The City argues they can do the analysis after they’ve ranked the proposals.

Now of course that seems a *little* odd. Wouldn’t the analysis aid the City in ranking the proposals? Sure it would. But nothing I’ve seen per se says the City must pick either proposal, notwithstanding what an independent analysis says. Of course, one wonders what the point of the analysis is if the City simply disregards it.

Interim Agreement:

Here is where the juicy part is, and why FXE went to court to try to get the injunction. While the City decided to rank Inter’s proposal first, that was only the first step. They needed to come to an agreement with Beckham to demolish Lockhart and build a new stadium. But that’s not all that’s needed of course: You’ve got to have a lease or a management agreement. Those things take quite some time to negotiate and draft (best case you’re looking at several months). But we know Beckham needs to get the stadium under construction ASAP, and that means tearing down Lockhart immediately. So they drafted an “interim agreement” which allows them to accomplish that, while they finish the complete agreement…

…and I’m sure you all see the issue.

Without a final binding agreement, it’s possible that Lockhart gets torn down, the deal falls apart, and the stadium is gone and FXE (or another group for that matter) has no way to come to the City with their proposal. Additionally, it’s unclear whether the law allows for the City to authorize the destruction of the stadium without a final deal.

FXE argues that allowing the demolition of Lockhart without a final agreement violates the law.

Now, this seems pretty clear on its face to me (destroying Lockhart clearly qualifies as a modification), but the City has come up with an interesting response: that one of the provisions of the statute allows them to add anything they want.

The City says they can add a provision allowing the destruction of Lockhart.

This seems pretty wild to me. This interpretation would render the limitations of the statute meaningless. I’d be pretty surprised if the court stretches this interpretation this far. The City follows up by arguing that there should be a “liberal” construction of the statute, and that if the legislature wanted to limit “demolition,” they should have added that to the statute.

Beyond that, while FXE argues the obvious–that their proposal would be dead if Lockhart is destroyed, leaving them no ability come back and negotiate to refurbish it, the City responds they have no inherent right to negotiate, and because they’re asking for damages, there is an adequate remedy.

The City argues they’re under no obligation to deal with FXE at all, and they can go after money damages if they want.

Lobbyists, lies and videotape:

I have to confess I found this the least interesting of the arguments. That doesn’t mean it won’t be persuasive. To quickly summarize: In the process of debating the proposals, both parties had numerous people speaking on their behalf. Inter Miami in particular had some color characters, but they also brought in a lobbyist to argue on their behalf. One of the points of contention according to FXE is that the Inter lobbyist “lied” about the state of Lockhart stadium, essentially saying that is was damaged beyond repair due to the presence of asbestos and refurbishing it would be pointless. If true, that would render FXE’s proposal moot.

This has really been a sore spot for FXE, as they believe this torpedoed their chances with the City. Worse, the claims of asbestos in their eyes were completely overblown, and for a nominal cost could be dealt with.

FXE argues the alleged false statements made a fair review of the proposals impossible.

For its part, the City argues that those alleged false statements, if made, weren’t made until later in the process, and thus had no bearing on their decision.

The City argues any false statements (if made) had no bearing on their decision.

Again, I have a hard time getting worked up about this either way. The lobbyist may have lied–or not–but for me I doubt it had any bearing on the vote. Mainly because it’s pretty clear (to me) they were going with Inter Miami’s bid the whole time. But we’ll see how the judge reads it.

Public Interest:

The last argument in support of the preliminary injunction is that the public is best served by a “robust and competitive bidding process,” and ensuring that local governments comply with Florida law. I did find the City’s response a bit…odd.

The City says demolition is in the public interest.

Okay, a couple of things. First, I’m fairly certain that the FXE proposal wasn’t “rejected,” and I’m a bit surprised to see that language used. The statute says to rank the proposals in order of preference. Is the City arguing that they’d *never* consider the FXE proposal in the event they can’t come to a deal with Beckham? Secondly, the conclusion about the “asbestos” issue is a question of fact insofar as we don’t know if the remediation cost is prohibitive. We have one estimate from FXE that puts that cost at a few thousand dollars. And it seems as if the City *is* using the asbestos issue as a reason they “rejected” (their word) FXE’s proposal.

So there are the dueling motions set for this Wednesday at 5 pm eastern. I’d expect some fireworks at the hearing. It should be an interesting one.

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