Hearing on Motion to Dismiss

I arrived today at Judge Jeffrey Brown's courtroom at 345 S. High in Courtroom 4A at about 1:20 P.M. There were a handful of Crew fans already there, but it was otherwise a tranquil scene. No, it wasn't to argue a case, it was to observe the oral arguments in the Ohio Attorney General's case against Precourt Sports Ventures and Major League Soccer.

As others slowly arrived and the area outside the courtroom started to get full at about 1:45 P.M., the buzz in the air increased. I happened to be by the elevators when the MLS/PSV contingency of lawyers came in and noticed all of the Crew fans clad in black and gold. One of the attorneys snidely snickered, "I guess we're in the right place." I was also in the presence of Charles Campisano, Esq., Drew Campbell, Esq., Sam Peterson, Esq., Sean Kelly, Miki Turner, Esq., and Andrew Erickson.

We were reminded multiple times to turn our cell phones off. For the very first time in my career, there were two Sheriff deputies at the back for a civil hearing. This has been more common in criminal hearings. (Now, I'm making much of this for dramatic effect. It's likely that any time there is a volume of the public in attendance that this is protocol.)

Before we get to the meat and potatoes of the hearing, my initial thoughts were that this was a hearing to provide an opportunity for both sides to speak before Judge Brown denied the Motion to Dismiss. I didn't expect him to dismiss it today, but rather that he'd take the matter under advisement. When there is oral argument, attorneys refer to a "cold court" and a "hot court." Judge Brown definitely was a "cold court" during this hearing. (Note: "Court" is a synonym for judge.) This doesn't mean anything pejorative, but rather a "cold court" is a court that lets the attorneys talk without interrupting very much. I prefer a hot court, where the attorney is receiving a bombardment of questions, because this indicates that the court has questions it wants answered.

Somebody DMed me asking if Precourt was there. I proceeded to send them multiple laughing.gif images.

Waiting for the "ALL RISE" before a hearing is very nerve wracking for me as an attorney. I never was one to be much into sports, but I imagine it's the feeling an athlete gets just before the opening whistle from the referee. Even though I wasn't a participant in this case, I still had those nerves, just waiting. 2:30 P.M., the start time of the hearing, rolled by... and Judge Brown appeared about about 2:35 P.M. The hearings don't start until the court is ready.

After a quick quip, "we need a bigger courtroom," Judge Brown immediately launched into the proceedings, asking the Defendants (MLS/PSV) if they'd like to reserve time for rebuttal and asking counsel if they were ready to argue. Each side was allotted 45 minutes to argue, and it's typical for the party with the burden to reserve some of that time for rebuttal, meaning they have the last word. Brad Ruskin, Esq. from NYC on behalf MLS argued the entire case for the Defendants. There were a few references to the "PSV entities," but it was clear who was running the show. Mr. Ruskin stepped to the podium and did not immediately identify himself. At that moment Judge Brown said that he would have the lawyers all introduce themselves, saving Mr. Ruskin from a very awkward moment.

Mr. Ruskin then basically went into the arguments we had already seen many times in the briefs. He appeared to be reading for much of the argument. In the first fifteen minutes, the most interesting thing that happened was that the court reporter asked him to repeat himself. A card with the statute, Ohio Revised Code 9.67, sat on an easel, and Mr. Ruskin made reference to the demonstrative evidence, and Judge Brown said "I'm quite familiar with that statute."

Mr. Ruskin argued that under the statute, financial assistance from the government is more likely income tax breaks for the players, jersey sponsors, subsidized costs for the teams, or direct payment for the team agreeing not to relocate.

Mr. Ruskin again argued that MLS is the owner, not Precourt. Judge Brown asked doesn't the benefit to Precourt inure to the benefit of MLS? Mr. Ruskin stated that if a shareholder of Apple receives a benefit, it's to that shareholder, not to Apple as a corporation. Judge Brown also asked Mr. Ruskin about the "fairly unique relationship" MLS teams have as compared to other sports. Mr. Ruskin, without really answering the question, stated that MLS existed prior to R.C. 9.67. Judge Brown again asked whether MLS would concede that MLS receives indirect benefit, and Mr. Ruskin stated "MLS cares about all of its investor/operators."

I referenced above "cold court" vs. "hot court", but I've never seen a judge add time to argument because of asking questions, but that's what Judge Brown opted to do. Mr. Ruskin argued for about 50 minutes prior to the Plaintiff's argument.

Sam Peterson, Esq. started on behalf of the State of Ohio by saying nobody forced the Defendants (MLS/PSV) to take public funds. They volunteered to take this money and lobbied to change the Ohio Revised Code for benefits. The rest of MLS's arguments, Mr. Peterson said, are more appropriate for a Summary Judgment motions after discovery, rather than for a Motion to Dismiss. Mr. Peterson argued that it is "illogical" that MLS as the owner does not receive financial assistance. Based on the list of things Mr. Ruskin said could be financial assistance, MLS would have the owners play on the pitch, he argued.

Judge Brown asked one question of the Plaintiffs, and he threw a softball to Mr. Peterson, asking, did PSV/MLS accept any assistance not related to the facility (MAPFRE stadium), to which Mr. Peterson responded, it does not need to be the facility. Obetz has a training facility, there is the academies, and perhaps some other political subdivision provided a financial benefit.

Mr. Peterson stated that a statute passed by the General Assembly (such as R.C. 9.67) has a presumption of constitutionality and the burden on the challenger is likened to the criminal burden of beyond a reasonable doubt. He referred three times to a 6th Circuit decision Garber v. Menendez. In this case, Judge Sutton questioned whether it was possible to render a decision on the dormant commerce clause at the Motion to Dismiss stage. The case also upheld an Ohio statute. Although I think the purpose of this was to point out that Judge Sutton, a clerk for Justice Scalia and graduate of the Ohio State University Moritz College of Law, and one of the most respected jurists and lawyers from Columbus (another benefit to having a local lawyer argue)... can we all laugh at the irony of a case with a party named "Garber" being cited against MLS/PSV?

Mr. Peterson argued that there was a condition on the receipt of state or city dollars, so it is permissible to put these conditions on it for to bring "Glory to Columbus," such as Wil Trapp, Brian McBride, GBS, Ale Moreno, and Frankie Hejduk. If we weren't in a courtroom, I think the black and gold clad fans would have erupted in song. These restrictions are also imposed on owners from different states and if you wanted to move the team to a different city within Ohio, Mr. Peterson argued.

Mr. Peterson closed reminding the court that the Defendants' (PSV/MLS) own conduct led to the burden they complain of by accepting taxpayer dollars. At a minimum, this case should go to discovery, he said. He also said that it appears MLS/PSV have abandoned the Contracts Clause arguments because 9.67 existed at the time MLS/PSV entered into contract with the city, or that they realize they have to put a copy of the contract in the record.

Mr. Campbell finished the Plaintiffs' argument on behalf of the City of Columbus. He said they "can't take the money and run." He argued that in the process of attempting to do so, they're "trying to take the house down." He reiterated that this is the Motion to Dismiss stage, and this case should go forward to discovery and litigation.

Mr. Campbell listed several factual currents listed in Mr. Ruskin's argument. (Note that a question of law is decided by a court and a question of fact is decided by a jury. This was an argument that there are many factual issues involved, so the case should not be dismissed at this stage.) Here are some of those questions: Who owns the Columbus Crew? Who benefits? What extent does the statute burden interstate commerce?

Mr. Campbell noted that the word "benefit" does not appear anywhere in R.C. 9.67.

Mr. Campbell concluded noting that MLS/PSV "came to the city with eyes open and hands out."

Mr. Ruskin started his rebuttal arguing that R.C. 9.67 is not a contract, but rather a statute. He talked about Kentucky and Indiana cases.

Judge Brown specifically asked about Mr. Peterson's argument about whether R.C. 9.67 should be presumed constitutional unless a court rules otherwise, and whether it should go on to discovery. Mr. Ruskin decided to ignore the first half of the question and discussed how Ohio and Columbus were on "A fishing expedition."

Mr. Ruskin then gave an interesting example to once again try to argue that MLS/PSV are not benefiting from tax dollars. He said his daughter is 24, and if she gets financial aid, that doesn't benefit him. Judge Brown said that it directly benefits him, which led to laughter in the courtroom.

Mr. Ruskin argued a total of 1 hour and 5 minutes, and Mr. Peterson and Mr. Campbell took 40 minutes together.

Thankfully, both sides decided they don't need supplemental briefing, and Judge Brown took the case under advisement, meaning he will rule "as soon as practicable."

I hope that I reported this in a neutral, informative, and entertaining manner. In my opinion, though, there's a 96% chance Judge Brown will deny the Motion to Dismiss and send the case to discovery. Note that if that does happen, that is probably not a final, appealable order. If he does dismiss some claims, that likely isn't final and appeable either. However, if he dismisses the entire case, that will be appealable. Time will tell what will happen!

Anything above is my personal opinions and reflections on today's hearing. Quotes are paraphrased to the extend that I could write quickly and read my handwriting later. This in no way provides any legal advice or creates an attorney-client privilege.