Crew Move To Austin While Ohio Litigation Pending
My most recent blog post here addressed a decision of the Franklin County Court of Appeals, which dismissed an appeal by the Columbus Crew SC soccer team and Major League Soccer (“MLS”).
That case is back with the trial court, and a hearing is scheduled for September 4, 2018 for oral arguments on the Crew’s motion to dismiss. The Crew and MLS have argued that the case should be dismissed without proceeding any further, based on the argument that the Ohio statute preventing the Crew’s move (the so-called “Modell Law”) is unconstitutional. Although the motion to dismiss is fully briefed, the hearing will give the trial judge the opportunity to ask questions of each side’s attorneys about the relevant legal issues.
In addition to fighting the lawsuit in Ohio, the Crew has been pursuing a parallel track in Austin. On August 15, 2018, the Austin City Council passed a resolution that allows the city to enter into a term sheet with the Crew. A term sheet is not a binding agreement. Rather, it is a document containing several points the parties would like to further negotiate, and indicates that they will attempt to enter into a comprehensive agreement. The resolution passed on August 15 allows Austin to negotiate the final, definitive agreement without obtaining further approval from the City Council. The stated goal is to have the definite agreement finalized and executed by early October. Given this process, some have wondered whether the Crew can simply pick up and move while the Ohio litigation is pending, as the lawsuit is unlikely to be resolved by early October.
Such a move is unlikely, as the entire focus of the Ohio lawsuit is whether the Crew must comply with Ohio’s Modell Law before potentially moving. If the Crew were to move the team with the lawsuit pending, it would run the risk of violating a court order—and such a move would go against the Crew’s prior arguments, in which its attorneys have acknowledged that it is prohibited from moving while the lawsuit is pending.
Of course, nothing in the Ohio lawsuit prevents the parties from settling the matter, such as by the Crew being sold to local investors or MLS granting an expansion team to Columbus as part of the move to Austin. Indeed, the MLS has noted that it is willing to consider granting Columbus an expansion team as a part of these discussions. Now that the path to Austin looks clearer for the Crew, it is very possible that the discussions between Columbus and the MLS have picked up. Only time will tell, as any such discussions to date have remained confidential.
Written by Attorney Gerrod Bede