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Appellate Court Dismiss Columbus Crew Appeal

City of Columbus sue the Columbus Crew

My most recent blog post here addressed a pending appeal of the Columbus Crew SC soccer team and Major League Soccer (“MLS”).

In short, the Crew and MLS appealed a decision of the Franklin County Court of Common Pleas that had paused the six-month period during which the Crew is supposed to give local investors a chance to make an offer to purchase the team. The City of Columbus and State of Ohio (the plaintiffs in the lawsuit against the Crew and MLS) had asked the trial court to pause the six-month period under Ohio law because that period would likely expire before the court had a chance to determine whether the Ohio law at issue (referred to as the Modell Law) even applied to the Crew. The trial court granted the motion, and the Crew and MLS appealed the decision.

The City and State moved to dismiss the appeal, arguing that the trial court’s decision did not fall within the limited category of orders capable of immediate appeal.  The Crew disagreed, arguing that the trial court’s ruling prevented it from taking any steps to make a relocation possible while the underlying case remained pending with the trial court.

The appellate court sided with the City and State, noting that the trial court’s order was not one capable of immediate appeal. In particular, the court found that the Crew had failed to establish that it was “deprived of a meaningful and effective remedy by an appeal at a later stage of the proceedings after the trial court has rendered rulings on substantive aspects of the case.”[1] While the Crew argued that the decision to pause the six-month period further constituted a violation of its constitutional rights, the appellate court pointed out that the trial court has yet to decide whether the Modell Law is constitutional—and that the trial court may even rule in favor of the Crew. As a result, the Crew will have a right to appeal once the trial court renders a substantive decision on the merits, and it is required to wait until then to do so. The appellate court therefore dismissed the appeal and sent the case back to the trial court.

On July 10, the parties engaged in a status conference with the trial court. The court subsequently issued an order requiring the parties to submit an agreed protective order for the court’s review. If they cannot agree on an order, they are to submit competing orders. The point of the protective order is, presumably, to allow the Crew to disclose its financial and other proprietary information to interested parties while protecting the confidentiality of the information. The appellate court has already noted that an inadequate protective order could give rise to an immediately appealable issue. So, for example, if the trial court issues a protective order that the Crew believes is inadequate, the Crew might be able to file an immediate appeal of the issue. This will further delay the trial court’s decision on the merits of the case, which could throw a wrench into the Crew’s attempts to immediately relocate the team.

On a parallel track, the Crew has been pressing forward on its efforts in Austin.  While it obtained the go-ahead from the Austin City Council to begin the process of negotiating a deal with the City (while the City is also soliciting other bids), the Crew has been presented with some unexpected legal hurdles. In particular, a letter sent to the Austin City Attorney claimed that the City could not enter into a deal with the Crew unless the Crew reimbursed the City more than $18 million.[2] The land upon which the Crew is attempting to put a stadium is owned by Austin Water Utility, and the letter claims that the Crew must either use the land in a purpose consistent with Austin Water, or else compensate the City for the $18+ million Austin Water has spent on the land. At this point, it is unclear what effect this will have on the City’s negotiations with the Crew, but the City may take it into account when trying to negotiate a deal with the Crew.

Either way, between the legal battle in the Ohio courts and the issues in Austin, the Crew’s potential move appears far from certain.

Written by Attorney Gerrod Bede

[1] State of Ohio v. Precourt Sports Ventures LLC, 10th Dist. Franklin No. 18AP-342 (June 22, 2018).

[2] http://viewpoints.blog.statesman.com/2018/06/29/precourts-mls-stadium-proposal-faces-new-legal-hurdles/