St. Louis Rams’ PSL-Litigation, Part 2

Feb 1, 2019

By Jeff Birren
(Editor’s Note: Part 1 appeared in Vol. 16, Iss. 1 of the Alert)
July 2016 Through December 2016
By early July 2016, the McAllister, Envision and Arnold cases filed against the Rams in connections with the sale of PSL’s to Rams games in St. Louis had been consolidated into the McAllister case. The Pudkowski case had not been consolidated, and the Rams had filed a for indemnity against the St. Louis Convention and Visitors Conference (“CVC”) and a claim against Ronald McAllister that it was the CVC and not the Rams that was potentially liable for McAllister’s claims.
On July 16 McAllister filed a motion for judgment on the pleadings as to liability on his claim that the Rams had breached the FANS PSL Agreement. The Rams filed its opposition on August 15 and McAllister replied on September 8. The Rams had earlier filed its own motions for judgment on the pleadings in the Envision and Arnold cases before the cases were consolidated. That motion sought to establish that the Rams were not required to make tickets available in Los Angeles for the St. Louis PSL holders.
Judge Limbaugh ruled on the three motions on September 21, (McAllister, Memorandum and Order, (“M&O”) 209 F.Supp.3d 1121, 9-21-16). He noted that there were significant differences in the FANS PSL Agreement and the Rams PSL Agreement. The contracts had “best efforts” clauses, but “Paragraph 12(A) (of the FANS, Inc. PSL Agreement) makes it clear that the very validity of the contract is contingent on the condition that ‘NFL Football is played at the Stadium by the RAMS.’ This condition is no longer satisfied because of the Rams’ move to California. As a result, the FANS Agreement is invalid and terminated by its own terms” (Id. at 6).
That limitation was not in the Rams PSL Agreement. Thus, “the validity of the Rams Agreement is not contingent on the Rams playing football at the Stadium. Looking to the entirety of the Rams Agreement the Agreement remains in effect until 2025, and, regardless of where the Rams play their home games, they are required to use ‘Best Efforts’ to allow PSL holders the right to purchase ‘ticket for seats in the stadium where the transferred games are played” (Id. at 7/8). Judge Limbaugh accordingly granted the Rams’ motion for judgment on the pleadings for this issue for the FANS PSL Agreement, but not the Rams PSL Agreement.
McAllister’s motion for judgment on the pleadings asserted that the Rams breached the Agreements. Judge Limbaugh agreed that the FANS PSL Agreement had been terminated because of the move to California, and thus the Rams were required to “refund” the PSL “deposit(s)” but that it could not grant the motion as to damages “because the issue of damages will be wholly tied as to what constitutes a ‘deposit’ under the contract. Damages will therefore be determined at a later date” (Id. at 12). However, because the Rams PSL Agreement had not been terminated, he did not grant the motion as to that agreement. Judge Limbaugh noted that neither “the FANS Agreement nor the Rams Agreement offers up a model contractual clarity” (Id.). The Rams moved for reconsideration in early October.
Judge Limbaugh ordered Pudkowski consolidated with McAllister on October 5 (McAllister, M&O, Doc. # 47, 10-5-15, at 3). The rest of October and November included filing the opposition to the Rams motion for reconsideration by the plaintiffs, continued efforts by the Pudkowski plaintiffs to get their case remanded to state court, and the Rams motion to dismiss Pudkowski. On December 12, McAllister filed to certify the class.
Judge Limbaugh granted the Rams’ motion for reconsideration on December 14. The issue was whether FANS, Inc. was an agent for the Rams. The judge found that the “the agency issue was technically preserved, though it was buried in the briefing as a single sentence contending that the Rams were ‘not parties’ to the FANS Agreement.” Thus this issue “must be saved for later litigation.” Consequently, “McAllister’s alternative theory–that the FANS Agreement was illusory and void–has been resurrected and may also be litigation further” (McAllister, M&O, Doc. # 64, 12-14-16, at 2).
One day later, Judge Limbaugh granted the Pudkowski motion to reconsider its order denying remand, and permitted “limited discovery” to determine “whether the local controversy exception” to the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2), (d)(5) applied (McAllister, M&O, Doc. # 66, 12-15-16, at 5). 2016 ended with more wrangling over McAllister’s class certification motion.
January through July
2017 dawned with the usual litigation battles including a plaintiffs’ motion for discovery. On January 24, Judge Limbaugh set a September 1, 2017 discovery cut off, a September 15, 2017 deadline for dispositive motions and a January 16, 2018 trial date. February brought an order referring the case to alternative dispute resolution, and in early March, plaintiff McAllister sought an extension of that deadline. There were disputes over expert designation deadlines, a motion for protective order filed by the Rams and signed by the judge, and motions for leave to file in excess of normal page limits. On April 18, McAllister filed his motion to certify the class and the very next day, he filed a motion to correct that motion. The Rams made a motion to compel discovery from the CVC. That motion was granted on May 23 (McAllister, M&O, Doc. # 126, 5-23-17).
In June, the Court granted the Arnold and Envision plaintiffs’ motion to amend their complaint that among other things would add a cause of action relation to the Missouri Merchandizing Practices Act (“MMPA”) and required the new pleading to be filed within seven days (McAllister Doc. #130, J6-28-17). The First Amended Complaint was filed on July 5.
The Rams also got into the “better late than never” game and on July 6, it filed a motion for leave to file a counter-claim (against McAllister) and a third party complaint against the CVC. That same day they also filed a motion to stay the trial court proceedings with CVC. That was opposed. On July 21, Judge Limbaugh granted the Rams’ motion to file the counter-claim and third party claim against the CVC.
On August 2, the Rams Answered the Amended First Amended Complaint. Two days later, the Court issued an order that granted in part and denied in part the Rams’ motion to amend the Case Management Order (McAllister, M&O, Doc. #179, August 4, 2017, at 2/3). It also denied the Rams’ motion to extend the class action certifications motion but extended the date to take the plaintiffs’ rebuttal experts, and it gave the Rams until October 6, 2017 to oppose the class certification motions. It denied the Rams’ request for a Rule 16 Conference.
That same day it ruled on another request by the Rams, to stay the proceedings pending arbitration between the Rams and CVC. The Rams claimed that FANS, Inc. had served as agent for the CVC in the sale of PSLs and not the Rams. That was the basis for the Rams’ third-party complaint against the CVC. That agreement had an arbitration clause, and the Court held that staying “proceedings between the Rams and the CVC is mandatory” (McAllister, M&O, Doc. # 180, 8-4-17, at 2). However, “staying the litigation between the non-arbitrating groups and the Rams-is discretionary” (Id. at 3). It did not do so, in part because “the Rams additional claim against CVC for declaratory relief also appears different than McAllister’s claim against the Rams…because it appears plaintiffs are not bound by the arbitration… and because the risk of prejudice is high” (Id. at 4). The Court thus stayed the litigation “only as to between The St. Louis Rams, LLC and the St. Louis/Regional Convention & Visitors Commission” (Id. at 5). 
August brought 56 separate court filings. One highlight included a request by the CVC for additional time to respond that was granted. There was more wrangling over expert discovery, CVC’s opposition to the Rams’ motion to compel arbitration, plaintiff McAllister’s motion for partial summary judgment filed on August 28, and its motion to dismiss the Rams’ counterclaim.
September 2017 Through December 2017
September and October brought another 55 filings, but the vast majority were concerned with extending deadlines or pages limits. The Rams filed its opposition to the McAllister motion for partial summary judgment on October 2, and on the same day, filed its opposition to McAllister’s motion to dismiss the Rams’ counterclaim.
November saw the Rams’ opposition to the motion to certify a class. On November 17, the Court granted “the Rams motion to compel arbitration (between the Rams and CVC), including the threshold question of arbitrability” (McAllister, M&O, Doc. #276, 11-17-17, at 4). It also stayed the litigation between the Rams and CVC, pending the arbitration. It also granted CVC’s motion for leave to file a surreply, surely a pyric victory.
In December the Court granted a request to amend the Case Management Order, extending the discovery deadline until June 18, 2018, requiring dispositive motions to be filed by July 16, 2018 and moved the trial date to November 26, 2018. December ended with further filings related to the pending class certification motions. The last filing for the year was on December 20 and counsel apparently took a holiday break.
2018: January To December 5, 2018.
January and February
The New Year brought renewed fever to the litigation. CVC filed an expedited motion to participate in future depositions in McAllister, and to lift the stay. On January 19, the Court granted the request to expedite the motion, but it did not lift the stay and it denied the motion to participate in discovery. “The CVC and the Rams will participate in discovery through the arbitration which they agreed. Although the CVC may not participate in the discovery occurring between plaintiffs and the Rams, the Rams have invited CVC’s attorneys to attend and observe the deposition(s) without actually participating further curtailing any prejudice perceived by the CVC” (McAllister, M&O, Doc. # 312, 1-19-18, at 4). January also saw efforts by the plaintiffs to depose Rams’ owner Kroenke. That intensified in February.
February also brought attempts to extend the deadlines for expert disclosures. It also included renewed efforts by the Pudkowski plaintiffs to remand their case to state court, and the Rams attempts to have that case dismissed. The issue was what percentage of the plaintiffs’ class resided in Missouri. The federal Class Action Fairness Act, 9 U.S.C. § 3 (“FAFA”) requires such cases to be remanded to state court when more than two-thirds of the class are citizens of the state where the claim was filed, here, Missouri. Judge Limbaugh ordered Pudkowksi remanded on February 12 (McAllister, M&O, Doc. # 328, 2-12-18 at 7, and Order, Doc. # 329). The next day, Judge Limbaugh vacated his order.
On February 14, Judge Limbaugh granted without prejudice the Rams’ motion for a protective order related to the efforts to depose Kroenke. “No part of plaintiffs’ claims relates to why the Rams moved, so there is not need for discovery on that issue. The Court finds that plaintiffs have not supported their need for the deposition of Kroenke’s ‘apex’ deposition” (McAlister, M&O, Doc. #336, 2-14-18, at 5). February continued with more filings and disputes.
March brought more substantive issues to the front. On March 13, the Court responded to plaintiff McAllister’s motion for summary judgment on Count IV of its complaint. The issue continued to be whether FANS, Inc. was acting as an agent for the Rams. The Rams contended that FANS, Inc. was the agent of the CVC and not the Rams. “However, because McAllister presents, at best, disputed issued of facts with respect to the three elements of an agency relationship” the motion was denied (McAllister, M&O, Doc. # 354, 3-13-18, at 6).
Judge Limbaugh was busy that day since he also granted in part and denied in part, the motions for class certification in McAllister, Arnold, and Envision. McAllister’s counsel was appointed class counsel for the FANS, Inc. class and a subclass. Counsel for the Arnold and Envision plaintiffs were appointed class counsel for the Rams class and subclass (McAllister, M&), Doc. # 355, 3-13-18).
On March 21, the Court finally remanded Pudkowski to state court (McAllister, M&O, Doc. 358, 3-21-18). Two days later, the Court granted McAllister’s motion to dismiss the Rams’ counterclaim. McAllister had argued that the counterclaim was duplicative of issues that were already included in its answer to the complaint. “The Court agrees that these aspects of the Rams’ prayer for relief are merely defenses already raised in their answer to the McAllister complaint…Ultimately, the Court finds that the declaratory judgment sought by the Rams serves no useful purpose. The Court thus uses its discretion to dismiss the Counterclaim against McAllister brought by the Rams” (McAllister, M&O, Doc. #362, 3-23-18 at 4). The Rams filed for permission to appeal the grant of class certification, and sought a stay of the case. 
April began with McAllister opposing the stay and the Court denied the stay on April 9. Three days later, the Court ruled on Arnold’s third motion to compel the Rams to produce documents relating to the PSL prices for the Rams’ stadium in California. The Court ordered the Rams to review “their privilege logs for responsiveness and also supplement the logs with a detailed description of the attachments,” to answer Interrogatory 1 that “concerns the number of persons on the Rams PSL deposit list” and granted the request to produce three categories of documents that relate to “all responsive documents including the most current (and subsequent) Legends pricing recommendations, final surveys of 2016 and 2017, correspondence concerning the 2017 survey and the executive summary,” as well as to produce the Rams Chief Operating Officer Kevin Demoff in St. Louis for re-deposition. “Plaintiffs’ request with respect to these matters is granted” (McAllister, M&O, Doc. # 372, 4-12-18, at 2). One request was withdrawn and another was denied because the plaintiffs failed to meet and confer.
One week later, the Court dealt with McAllister’s motion to amend the “FANS Class.” The Rams opposed the motion and the Court, as it almost did, granted in part and denied in part the motion. It defined the “FANS Class” as:
“All persons or entities who, at the conclusion of the 2015 season, owned a PSL purchased from Fans, Inc. that was not later transferred or upgraded and who (a) had purchased Rams season tickets through their PSLs for the 2015 season or (b) did not purchase Rams season tickets for the 2015 season but did not receive a PSL cancellation notice from the PSL Licensor” (McAllister, M&O, Doc. #375, 4-19-16 at 3).
With that the public curtain began to come down. The Rams filed a Consent” to stay the cases pending voluntary mediation on May 10, and the Court granted the request (McAllister, Doc. # 377, 5-14-18). The Eighth Circuit joined the stay parade, agreeing to stay the Rams’ appeal of the class certification order from May 17 to June 15 (McAllister, Order, U. S. C. A. 8th Cir., Doc. # 378, 5-15-18). The parties must have continued their attempts to settle the case because the District Court issued a further stay of the case due to “pending settlement discussions” (McAllister, Doc. # 389, 10-24-18) and the Circuit did the same on October 2 and November 28 (McAllister, Doc. # 388 and # 393).
The negotiations must have interesting at times, because they began in May, and extended at least through November. Finally, on December 5, the parties announced that they had reached a settlement, as discussed in the first installment of these articles. The settlement talks began two months before summary judgment motions were due and seven months prior to the trial date. The Rams agreed to pay a very significant amount of the plaintiffs’ claimed compensatory damages, so the team may have simply wanted to get on with life in Los Angeles. The third installment will look at the settlement documents and subsequent court filings.
Birren teaches Sports Law at Southwestern University School of Law in Los Angeles.


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