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Judge denies MLS motion to dismiss, puts Columbus case on pause

In this Oct. 31, 2017 file photo, Columbus Crew fans show their support for the team. (AP Photo/Jay LaPrete, File)

COLUMBUS — Despite all indications pointing toward a resolution in the Columbus Crew SC relocation saga, the lawsuit brought against Major League Soccer by the city of Columbus and the state of Ohio is still ongoing. Franklin County Judge Jeffrey Brown ruled this week on MLS’ motion to dismiss the lawsuit, denying the request and rejecting the majority of the league’s arguments.

Why was the motion denied?

In short, the motion to dismiss was denied because Judge Brown was not convinced by any of MLS’ main arguments.

Attorneys for the league and Precourt argued that the “Art Modell Law” — named after former Cleveland Browns owner Art Modell, who moved the NFL team to Baltimore — does not apply because MLS as the “owner” of the Columbus Crew does not receive public assistance. And, they argued even if the law did apply, it was unconstitutional in three ways:

  1. Violation of the Dormant Commerce Clause, which prohibits state legislation that discriminates against interstate commerce
  2. Violation of the Privileges and Immunities Clause, which prevents a state from discriminating against citizens from another state.
  3. Being unconstitutionally vague.

“We are pleased with the outcome of today’s decision, and we look forward to the ongoing negotiations to keep the Crew here in Columbus,” Dan Tierney, spokesman for the Ohio Attorney General’s office, told the Columbus Dispatch after the ruling.

What about the constitutional arguments?

This was the first court case to involve the Modell law, and as such it was completely untested. In the opinion of Judge Brown, the law is constitutional.

“The Court declines to find that [the law] violates the dormant Commerce Clause, and … the Court finds that Defendants lack standing to bring a Privileges and Immunities claim. …Even if the defendants had standing to bring their Privileges and Immunities claim, it would still fail.”

Judge Brown also felt the law was not vague and was clear enough.

What facts are in dispute?

A main factors to determine whether the law applies to MLS and the Crew are who owns the team and whether tax benefits that trigger the activation of the law apply to the team or the owner. 

When the league filed its 25-page motion to dismiss back in April, it said Ohio’s law did not apply because of the league’s single-entity structure in which the teams are run by “investor-operators” and MLS was the only “owner” of Crew SC and so the only defendant that could be subject to the law. Anthony Precourt changed his Twitter bio at that time from “Owner/Chairman” to “Investor/Operator and Chairman” of Columbus Crew SC.

The lawsuit alleged the team accepted about $5 million in state taxpayer-funded improvements to their parking facilities, among other public assistance. MLS argued the complaint made “no allegation that MLS receives any of the financial support necessary to trigger the statute.”

Judge Brown rebuked the league’s view of the law, stating, “The Court finds that Defendants’ reading [of the law] does not permit the statute ‘to operate sensibly,’ and their construction of its word and phrases would accomplish foolish results. …It defies logic and common sense.”

Was there any good news for MLS in the ruling?

In one bright spot for the league, Brown concurred with MLS that the law requiring local investors be given “an opportunity to purchase” a team before it relocates simply meant the ability to submit an offer, and it did not equate to a right of first refusal or a responsibility to accept a local investors’ purchase offer.

Why did this ruling come now?

It appears a sale of the Crew to local owners is imminent, but Brown said, “the apparent cessation of efforts to move the team to Austin notwithstanding, the parties have not advised the Court of an intent to no longer pursue this action. Therefore, this Court must proceed.”

“As talks to keep the Crew in Columbus continue, I appreciate the ongoing effort of the Haslam and Edwards families, as well as the Columbus Partnership, as they pursue the opportunity to purchase the team,” read a statement issued Tuesday by Ohio Attorney General Mike DeWine. “With the loyalty and enthusiasm of the Black and Gold’s very vocal fans, and the power behind the #SavetheCrew movement, momentum continues to build. As the MLS championship game is played this weekend, we are working to ensure the opportunity remains for the Crew to continue calling Central Ohio home.”

What other information was in the ruling?

The order was 56 pages (See the full ruling here) and contained too much information to detail in one article, but the judge made repeated note of how important sports are to a community.

“The presence of a sports franchise within a city goes beyond a commercial transaction,” he said. “The team is of significant value to the public and the well-being of a community. … Much more is at stake than merely the loss of direct and indirect revenue to the city. Any loss represents a diminution of the quality of life here.”

Judge Brown also noted the actions of the #SaveTheCrew movement, saying, “the organization fashions itself as more than just a collaboration of broken-hearted soccer fans — it is a community advocacy group. #SaveTheCrew’s platform and meteoric rise in membership and influential weight underlines the communal, social, and civic bond generated by sports fandom.”

In a portion of the ruling titled “Factual Background,” Judge Brown repeated a claim made earlier in the trial that is still in dispute: “The Hunt family sold its operator/investor interest in the Crew back to MLS in 2013. PSV [Precourt Sports Ventures] purchased said interest in the Crew from MLS that same year and now manages the team.”

This point had been reported previously by the Columbus Dispatch, which received a rebuke and correction from MLS, which said the Hunt family sold the team directly to PSV. 

The league has not yet clarified whether it the court filing is wrong.

What happens next?

Usually the case would continue to the discovery phase, where parties exchange requested information. Instead, Brown issued a ruling to stay the case until sale negotiations are complete or hit an impasse.

However, sources involved in the case said it is possible the lawsuit will continue even if the Crew are sold because the state of Ohio is eager to prove the Modell law is constitutionally valid in a full trial.

A social media account belonging to Columbus City Attorney Zach Klein called Brown’s decision “a big victory in a long legal battle.”

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