Word came down Wednesday that the city of St. Louis, St. Louis County, and the Regional Convention and Sports Complex Authority had filed suit against the NFL and all 32 owners, alleging breach of contract, unjust enrichment, fraudulent misrepresentation and tortious interference with business expectancy.
What does it mean, and what should we expect? Here are a few questions, and a few answers.
Q) What is the St. Louis group exactly alleging?
A) In the breach of contract portion, they’re saying that the NFL relocation guidelines are an enforceable contract that the league didn’t adhere to.
Unjust enrichment means that “by virtue of allowing the Rams to relocate, but without enforcing the Relocation Policy, Defendants (the NFL and its owners) received the benefit of the relocation/transfer fee.
The Rams franchise also has received the benefit of an increase in the value of the franchise.
The relocation fee and increase in value benefitted Defendants at the expense of Plaintiffs (St. Louis). Defendants received those benefits only by wrongfully depriving Plaintiffs of the opportunity to retain the Rams in St. Louis.”
The fraudulent misrepresentation charge comes from the belief that “the Rams (primarily Kevin Demoff) and Mr. Kroenke made repeated statements that were intended to induce the Plaintiffs into continuing to support and finance the Dome and to spend money to create a new stadium for the Rams.” As far as the league is concerned with fraudulent misrepresentation, St. Louis “relied on the supposed truth of the representations and, in fact, spent considerable time and money financing and working on a new stadium complex plan, as Defendants intended for them to do and encouraged them to do.” And tortious interference with business expectancy means that the NFL “intentionally interfered with Plaintiffs’ reasonable business expectancy by approving the Rams’ relocation petition,” depriving St. Louis of the financial benefits of having an NFL franchise in town.
Q) Didn’t this all end when the CVC didn’t meet the Rams’ $700 million Edward Jones Dome improvement plan, thereby losing arbitration?
A) This lawsuit has very little to do with the Edward Jones Dome arbitration. This is about how the Rams allegedly declined to negotiate to try and find a St. Louis solution and how the league acted AFTER the arbitration, and how they adhered to their own relocation guidelines. In the filing, St. Louis alleges that “The Rams never intended to engage in good faith negotiations with St. Louis.”
Further, the suit alleges that “The NFL, through its member teams and the votes of the teams’ owners, approved the relocation of the Rams franchise despite the failure of the Rams franchise to meet its obligations under the Relocation Policy or even to offer a credible, persuasive statement of reasons concerning the factors set out in the Relocation Policy. In doing so, the NFL, through its member teams, and the owners failed to apply and enforce the Policy’s standards and procedures.”
The plaintiffs will try to convince a jury that a path was paved for the Rams to move to L.A., and St. Louis never had a chance to keep them. And of course, the plaintiffs will try to recoup the money spent by Jay Nixon’s stadium task force, money spent at the behest of the league.
Q) The suit was filed in the city of St. Louis. Because all 32 owners are involved, will the NFL get a change of venue or get it moved to federal court?
A) Because everything from a negotiating standpoint happened in St. Louis and Missouri, it makes sense that the case be heard in St. Louis. St. Louis attorneys argue that, since every team played in and profited in St. Louis, there isn’t a more logical venue.
If the plaintiffs had filed in federal court, the league would certainly attempt to get it moved to New York or Minnesota, where they have had success in the past. The NFL will likely try for a change of venue, but they would have to come up with valid reasons why it shouldn’t be heard here. And that would be difficult.
Q) How long will this take?
A) Years. Both sides have outstanding legal teams, and the NFL is going to make every attempt to circumvent the St. Louis legal team and shoot down their allegations. This is a case that could go on for a decade or more.
Q) What does St. Louis want out of this?
A) The lawyers are asking for “Defendants’ profits (or in the alternative, award damages to Plaintiffs in an amount to be determined at trial), award punitive damages, and grant any other necessary or appropriate relief.” That would start at the relocation fee the Rams paid the NFL, $550 million, plus punitive damages.
In 1996, Cleveland filed suit against Art Modell and the Browns when he moved them to Baltimore, and received an expansion franchise as part of a deal to drop their suit. St. Louis interests haven’t even thought about the possibility of another franchise. The desire to build a stadium and deal with the NFL is nonexistent right now.
Q) The NFL relocation guidelines note that “Article 8.5 of the NFL Constitution and Bylaws vests in the Commissioner the authority to “interpret and from time to time establish policy and procedure in respect to the provisions of the Constitution and Bylaws and any enforcement thereof.” Doesn’t that render everything else moot?
A) One would think so, but it’s been noted by plaintiffs that Roger Goodell doesn’t have a vote. This relocation and the allegations of not adhering to the guidelines fall squarely on the 32 owners, and that’s why they are named in the lawsuit. Goodell enacted the relocation committee that voted 5-1 in favor of the Chargers-Raiders Carson project, and that group was essentially emasculated by Cowboys owner Jerry Jones, who was the force behind the move in the first place.
Q) What’s the end game for the people filing the suit?
A) Obviously, the main goal is to get St. Louis’ pound of flesh from the NFL. Beyond that, it’s to use Kevin Demoff’s, Stan Kroenke’s and the NFL’s own words and actions against them, to point how disingenuous the application of the rules are. And if they can do that, because the guidelines were adopted “in response to a Ninth Circuit decision that upheld a judgment that an NFL relocation decision violated the antitrust statutes. To avoid future antitrust liability, the court recommended that the NFL set forth objective criteria to be considered in evaluating a relocation request.”
Put simply, the NFL violated federal antitrust laws in trying to prevent a previous move, and the guidelines are in place so that the league adheres to the law. Since they circumvented their own policies, they technically violated antitrust law. If this suit prevents another NFL franchise from ever relocating again, the lawsuit will have served its purpose.