There’s Enough Evidence of a Fraudulent Conspiracy By NFL & Kroenke to Move Rams Relocation Suit to Trial
|A decision from a Judge earlier this week in the case pitting the NFL and Rams owner Stan Kroenke against the city of St. Louis, St. Louis County and the St. Louis Regional Convention and Sports Complex Authority can be described as a slam dunk for St. Louis, leading the NFL and Kroenke on a path to a jury trial if a settlement is not reached. |
The NFL tried to get the case dismissed on a motion for summary judgment, claiming that its internal NFL relocation policy, promulgated by none other than Roger Goodell is not a contract between hometowns, clubs and the league. The NFL claims, it promises nothing to the communities, despite the gargantuan amount of money the clubs take in from local municipalities, vendors, fans, etc. but it turns out its own language has come back to bite the NFL.
Citing the use of the words “obligated” and “must,” that are included multiple times in the NFL’s relocation policy, a Judge concluded that the protocols and policies laid out in the relocation policy do contain definite promises and more importantly legal duties that are compulsory or mandatory.
For example, NFL clubs have an obligation to “advance the interests of the League in its home territory” and to “work diligently and in good faith to obtain and to maintain suitable stadium facilities” in the home territory as well as operate in a manner that “maximizes fan support in their current home community.” Using Roger Goodell’s own words from his press conferences, the Judge said it’s clear the relocation policy is binding on clubs and the league. Defendants John Mara and Dan Rooney agreed it was their duty to enforce the relocation policy, according to the Judge.
This is huge as it impacts all relocations across the league and is essentially allowing the court system to keep tabs on and enforce the lawful application of a private corporations policies or award damages to those harmed, aka the hometowns. The NFL is unique, in that its policies impact municipalities since taxpayer money is used to fund stadiums and jobs and vendors plus sales tax revenues depend on the presence of the league’s teams.
In the St. Louis case, the NFL tried to argue that the relocation policy is only relevant to the clubs and league and that the city of St. Louis and its fans are not interested parties but the Judge disagreed saying that the policy expresses an intent to clearly benefit “home territories,” calling them an “identifiable class.” This means that if this Judge made language is not overturned, anyone who fits into the “home territories” class could potentially sue every time the NFL or a member club does not abide by the relocation policy. Wow, that could really open the door for a ton of litigation. I imagine after this suit, the NFL will expeditiously rewrite the policy. But what about present and past cases? For example, the Chicago Bears! As they use negotiating tactics, threatening to leave every once in a while and exploring other options, are they acting lawfully? It appears, that any tactics that don’t comply with the express provisions of the relocation policy and induce a city to expend taxpayer money to keep a team there without the team also working diligently to try and stay in the hometown, could be actionable!
Besides the obligations the NFL wrote into the policy, there are also tons of procedural requirements on clubs before they can relocate, like notices in publications, public hearings, and a whole host of financial considerations prior to the necessary two thirds vote from NFL owners to allow a relocation. In short, relocating is a very involved process that is supposed to place a priority on making it work in the hometown and discourage leaving for short term financial enterprising.
So, at this point we have a Judge saying, yes there was a contract between the club, the league and the city of St. Louis and associated parties & yes, the home territory is an interested party who was supposed to benefit from this contract and can sue for damages.
The odd part is that the supposed contract was created entirely by the NFL. It was not negotiated or signed by these so called outside interested parties. Needless to say, the NFL is rushing to the State’s supreme court to challenge this very interesting and somewhat unusual decision where the Judge is essentially turning a private internal procedure crafted by one party into a common law contract between a league and an entire city! Very interesting and maybe a tad bit shaky legally speaking! It could be overturned.
It would be one thing if the NFL was suing a member club for not abiding by its policy but this is a case about a third-party beneficiary (the city) suing on a contract it is claiming was just blatantly violated by the two primary parties to it for their own gain. For that reason, St. Louis is alleging a conspiracy by the NFL and the Rams to financially harm it for their benefit!
Finally, the Judge ruled that the city of St. Louis’s claims for unjust enrichment and fraud against the NFL and Kroenke can also move forward. There are numerous representations made in emails and public statements by league officials including Roger Goodell that indicate the relocation policy will be followed to a T but discovery in the case has indicated the opposite on many occasions. The Plaintiffs claim that false statements were made by league officials and club owners to compel the city to continue to fund the Dome and finance a new stadium, while it moved forward with the Rams’ relocation which was supposedly a done deal.
Now the NFL & clubs are being ordered to hand over relevant financial docs by end of September or face penalty. This trial, if it proceeds will be one to watch but ultimately the question is this: did the NFL & Kroenke operate in good faith when relocating the team by abiding by the exact terms of the relocation policy? Any juror or reader who takes a look at the policy’s requirement and the way the deal went down will make a quick conclusion.