A Sleeping Giant In Columbus? PSV/MLS To Contest Constitutionality of Modell Act

By: Gabe Lezra, Co-Editor-in-Chief

 "Your laws are bad and you should feel bad"

"Your laws are bad and you should feel bad"

This winter I wrote a series of articles about how the city of Columbus and the state of Ohio could use an extremely esoteric law (what we have now collectively decided to call the Art Modell Act) to prevent or at the very least delay the relocation of the Columbus Crew to Austin, Texas. In particular I wrote, among other things, about the Commerce Clause in the US Constitution, and about whether the law at issue violated a doctrine known as the “Dormant Commerce Clause”.

Since that first series of articles, many, many things have happened that others have already explained in greater detail (and more cogently) than I can, so instead of even attempting my own recap I’m going to block-quote from Washington State Attorney Miki Turner, who writes at the fantastic site SoccerEsq:

We’ve got multiple cross-motions (none of which have even been set for a hearing date) from the Plaintiffs filing motions to compel discovery and toll the six-month period to allow local investors to purchase the team. On the other side, we have the defendants filing a motion to stay the entire discovery process (which the plaintiffs have opposed), moving to dismiss the whole case, and now have filed their motion opposing tolling of the six-month purchase period for prospective local buyers. (Follow the links in the quote to read more of Miki’s extremely well-researched and argued work on this issue). Source.

I was particularly surprised about one aspect of the Motion to Dismiss that defendant Precourt Spourts Ventures (PSV) and Major League Soccer (MLS) filed recently. In my earlier articles (and comments on various podcasts and interviews) I had suggested that PSV/MLS may not attempt to contest the question of the constitutionality of the Art Modell Act because a constitutional fight could drag on for years and would be a terrible public relations move (imagine telling an entire state that their never-before-enacted law that they wrote to prevent another Browns heartbreak is unconstitutional and therefore you should be allowed to take away another one of their teams).

Well, I guess I was engaging in some wishful thinking, folks. In Section II(A) of Defendant’s Motion to Dismiss, they argue specifically that the Art Modell Act (Ohio Code Sec. 9.67) violates the dormant commerce clause.

 Source: https://www.documentcloud.org/documents/4443028-PrecourtSuit.html

Source: https://www.documentcloud.org/documents/4443028-PrecourtSuit.html

Initially, what strikes me most about this section is how short it is. Given that this argument would likely factor into many potential scenarios, one would think that the litigators at PSV/MLS would have spent more than just a couple paragraphs on it. In fact, they don’t even bother to address any of the counter-arguments the State will likely make, and, perhaps even less understandably, they do not even address any of the facts of the case that could balance against their argument.

I’m particularly surprised that PSV/MLS did not address any of the legal claims the State might make to get out of this particular Constitutional hole, choosing instead to argue that the law is facially unconstitutional because it (1) "Unconstitutionally Discriminates Against Citizens of Other States by Limiting Prospective Purchasers to Local Ohio Residents" and (2) "Unconstitutionally Limits the Movement of Property in Interstate Commerce". I'm not sure it necessarily does this by definition (that is, that the text itself is obviously and inarguably unconstitutional) but that appears to be PSV/MLS's main argument here: 

 Source: https://www.documentcloud.org/documents/4443028-PrecourtSuit.html

Source: https://www.documentcloud.org/documents/4443028-PrecourtSuit.html

However, as I explained in my first article on this topic:

I think there is a relatively strong argument, however, that the law is not discriminatory, but rather, advances the legitimate local objective of protecting the government’s investment in the sports franchise, made over several years. Going further, perhaps one could even argue that the law is not discriminatory per se, but rather that it imposes a burden on commercial activity only inasmuch as the merchant avails itself of the public purse in carrying on such activity. But it may not even be necessary to reach that second level determination.

Under the commerce clause, the Court has generally adopted a much more flexible approach when a law is “directed to legitimate local concerns, with effects upon interstate commerce that are only incidental.” See Pike v. Bruce Church Inc., 397 U.S. 137 (1970). In such cases, the Court will apply a balancing test: if the law only has “incidental” effects on interstate commerce, then the law will be upheld, unless “the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.” See Pike, supra. As such, the Court will essentially question whether a rational basis exists for the law—a very permissive standard. See Bibb v. Navajo Freight Lines Inc., 359 U.S. 520 (1959).

Ohio could argue that it is simply acting as a “market participant”—an exception to the general commerce clause prohibitions. For example, in Reeves v Stake, 447 U.S. 429 (1980), the Court concluded that South Dakota’s preference for selling cement from its state-owned Dacotah Cement plant to customers in South Dakota was not a violation of the commerce clause, because South Dakota was acting as a market participant, rather than as a regulator of commerce. Following this precedent, Ohio could argue that its financial support to the Crew constitutes a quasi-ownership interest in the entity itself, and that this minor burden on relocating the entity should be sustained because Ohio has a right to act as a participant in the market for sports teams.

It’s striking to me that PSV/MLS would choose to avoid any discussion of potential exceptions to the general Commerce Clause prohibition, especially given the high legal bar they’re trying to overcome: again, they are arguing not only that Ohio is wrong, but that there isn’t actually a point of legal contention in the first place. Well, I think there clearly is—and we’ll have to see how Ohio responds in the coming days.

Secondly, the decision not to contest any facts is particularly galling because, when reviewing motions to dismiss, courts are instructed to construe the facts before them in the light most favorable to the nonmoving party. That is, in any case where a fact or series of facts could point in either direction (in favor of the moving party’s argument or in favor of the non-moving party’s argument) the court is instructed specifically to view that fact as supporting the non-moving party’s argument. That means if a fact can be interpreted to help Ohio in this case, the Court needs to read it that way.

 All your publicly funded stadiums are not belong to us.

All your publicly funded stadiums are not belong to us.

Facts, in legal cases, are malleable, and each side chooses which facts to emphasize; in considering motions to dismiss, courts essentially accept the facts in the light that would most benefit the non-moving party. They do this because the motion to dismiss is a major moment in a case: it is one side arguing that, not only do we have the better legal claim, the other side hasn’t even presented a claim that passes legal muster in the first place. The motion to dismiss is often referred to as the first gate at the door to the courthouse: it exists simply to keep frivolous claims out of court, claims with no basis in fact or law.

Choosing not to dispute any factual allegations, or even place doubt in a judge’s mind about their veracity, seems to me to indicate one of three things: either (1) PSV/MLS believe there will be an amicable solution to this problem that will likely occur before protracted litigation (like a sale to an interested party); (2) they don’t really put a lot of stock in this particular argument; or (3) they genuinely believe the facts of this particular case applied to this particular law are so overwhelmingly in their favor that they don’t see why they’d need to even respond to them.

Honestly, I think option (1) is a little more likely (and perhaps (2) as well), but let’s assume arguendo that option (3) is the motivating force here. Here are some facts that the PSV/MLS attorneys choose not to address that could balance away from their case: 

  • There is no forced sale of property.
  • The government could argue that the statute does not require government participation and that this waiting period is a minor burden vastly outweighed by the state’s interest in its public investments.
  • The government could argue that it is acting as a market participant and not a regulator, pointing at various facts of the case that could indicate this view of the government’s role.
  • Because the Crew receive so much government assistance the government could argue that the Crew share enough characteristics with a public utility that the “favoring” implicit in the law would be allowed under other Supreme Court precedent.
  • The government could argue that the Crew chose to subject itself to the law, and that the law itself imposes a burden on commercial activity only inasmuch as the merchant avails itself of the public purse in carrying on such activity.

Ultimately, we’ll have to wait and see how the State responds to this motion. At present, I stand by my original thinking that the law is likely unconstitutional but that this case likely will not go along those lines.

However, regardless of anything else, we now know that this is a fight that PSV/MLS are willing to have—new knowledge which makes this case all the more interesting. Should this be contested on Constitutional grounds, it is very possible that the case would make it to the United States Supreme Court, which could, then, make new law on this very old subject.