Crew SC reply in support of a motion to dismiss the PSV/MLS

IN THE TENTH DISTRICT COURT OF APPEALS STATE OF OHIO ex rel.

OHIO ATTORNEY GENERAL MIKE DeWINE, et al.

Plaintiffs-Appellees vs.

PRECOURT SPORTS VENTURES, LLC, et al.

Defendants-Appellants

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Case No 18-AP-000342 Appeal from the Franklin County Court of Common Pleas Case No. 18-CV-001864 Accelerated Calendar

PLAINTIFFS STATE OF OHIO AND CITY OF COLUMBUS REPLY IN SUPPORT OF THEIR MOTION TO DISMISS In Ohio, appellate courts only have jurisdiction to consider appeals from final orders of a trial court. Ohio Const., Article IV, § 3(B)(2); see also R.C. 2505.02. If a party seeks to appeal an order that is not final, the appeal must be dismissed. Nami v. Nami, 2017-Ohio-8330, ¶ 12 (10th Dist.). Because the question of finality is jurisdictional, courts are obligated to raise the issue even if it is not raised by the parties. In re Adoption of S.R.A., 189 Ohio App. 3d 363, 2010-Ohio-4435, ¶ 11 (10th Dist.). Thus, far from being “aggressive,” the State and City’s Motion to Dismiss is consistent with their obligation to call the Court’s attention to

the jurisdictional defects in Defendants’ premature appeal. It has the advantage of being correct.

The trial court in this case explicitly stated that it was not deciding (1) whether R.C. 9.67 applies, (2) whether the statute is constitutional, or (3) whether Defendants have complied with any of its requirements. See Order at 5. In their Motion to Dismiss, Plaintiffs explained that the Order did not affect a substantial right (as would be required by R.C. 2505.02(B)(2)) and that it was not a provisional remedy the harm of which (if any) could not be addressed by an appeal following judgment (as would be required by R.C. 2505.02(B)(4)). Defendants’ response provides no basis on which to conclude otherwise.

For these reasons (and for the reasons in the Plaintiffs’ Motion to Dismiss) the Court lacks jurisdiction over this interlocutory appeal.

I.

The Defendants’ appeal is an impermissible attempt to obtain an advance ruling on the merits of their asserted defenses.

For purposes of R.C. 2505.02, it does not matter whether an order

is described as a preliminary injunction. Despite the trial court’s explicit statement that it was not “issu[ing] what amounts to an injunction,” see

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Order at 11, Defendants nevertheless persist in arguing that the Order should be so construed.

Their arguments to that effect expose this

appeal for what it truly is: an attempt to get an advance ruling on the merits of their constitutional and statutory claims, before they are considered by the trial court.

The trial court explicitly did not decide whether R.C. 9.67 is constitutional or whether it applies in this case. Defendants’ attempt to raise those issues on appeal—whether by insisting that “the statute is inapplicable,” Opp. at 19, by incorporating their Motion to Dismiss by reference, id., or by arguing that the State and City failed to show a likelihood of success on the merits, Opp. at 13 n.1—are improper at this juncture. Their arguments only confirm that this appeal is premature and that dismissal is appropriate here.

II.

The Court lacks jurisdiction under R.C. 2505.02(B)(2) because the trial court’s order does not affect a substantial right.

As discussed in the Motion to Dismiss, although a declaratory

judgment action may qualify as a “special proceeding,” see Walburn v.

Dunlap, 121 Ohio St. 3d 373, 2009-Ohio-1221, ¶ 21, the Order at issue

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here does not adjudicate any claims against the Defendants and therefore is not an order that “affects a substantial right” under R.C. 2505.02(B)(2), see Motion to Dismiss at 13-19.

As the Motion

explained, the trial court declined to decide the parties’ rights under R.C. 9.67; it explicitly left all of the relevant statutory and constitutional questions unresolved. See Motion at 17 (noting that the Order “save[d] the ultimate resolution of the applicability . . . and the constitutionality questions for a later time”). “[E]ven though entered in a declaratory judgment action,” such an order does not provide jurisdiction under R.C. 2505.02(B)(2) if it contemplates further action. City of Cincinnati v.

City of Harrison, 2014-Ohio-2844, ¶ 48 (1st Dist.); cf. O’Toole v. Dove, 2013-Ohio-5539, ¶ 6 (10th Dist.).

Notably, the Defendants do not dispute—or even acknowledge— the laundry list of questions yet to be decided by the trial court. See, Motion at 10-11. Rather than address the numerous cases establishing that an order does not affect a substantial right if it leaves significant portions of a case unresolved, see Peppers v. Scott, 2016-Ohio-8265, ¶¶ 14-17 (10th Dist.); see also Walburn, 121 Ohio St. 3d 373 at ¶¶ 21-26, 4

Defendants respond that it is possible for the Court to have jurisdiction under R.C. 2505.02(B)(2) as well as R.C. 2505.02(B)(4). See Opp. at 24. Even if true, that is irrelevant. The State and City moved to dismiss not because jurisdiction under R.C. 2505.02 is an either/or proposition but because the Order fails to satisfy the requirements of R.C. 2505.02(B)(2).

The mere fact that an order is made in a special proceeding is insufficient to establish jurisdiction under R.C. 2505.02(B)(2). “[P]iecemeal adjudication does not become appealable merely because it is cast in the form of a declaratory judgment.” Peppers, 2016-Ohio8265 at ¶ 15 (quotation omitted).

Instead, the relevant question is

whether an order affects a substantial right. See Burt v. Harris, 2004Ohio-756, ¶ 12 (10th Dist.). As this Court has held, “[a]n order that affects a substantial right is ‘one which, if not immediately appealable, would foreclose appropriate relief in the future.’” Id. (quoting Bell v.

Mt. Sinai Med. Ctr., 67 Ohio St. 3d 60, 63 (1993)).

Defendants in their response fail to show that the Order affects their rights, let alone that it forecloses relief in the future. They instead 5

offer a conclusory assertion that they have a constitutional right under the dormant Commerce Clause doctrine that the trial court’s order somehow affects. See Opp. at 23. The trial court has yet to consider Defendants’ claim, however. And, even assuming its validity, simply asserting that the Order affects that right does not create a basis for jurisdiction under R.C. 2505.02(B)(2). If the Defendants want a ruling on their dormant Commerce Clause claim, they need to get it from the trial court.

Equally fatal to Defendants’ claim to jurisdiction in this Court is the fact that they do not address the availability of future relief in the context of R.C. 2505.02(B)(2). As noted in the Motion to Dismiss, an order is not appealable if relief is available in the form of a later appeal.

See Motion at 18 (quoting Epic Props v. OSU LaBamba, Inc., 2007Ohio-5021, ¶¶ 13-14 (10th Dist.)).

As Defendants’ own authority

shows, that standard is not satisfied simply because “an order has the immediate effect of restricting or limiting” a right; it requires that there be “virtually no opportunity for an appellate court to provide relief on appeal after final judgment from an order that allegedly prejudiced” the 6

right. See Opp. at 22 (citing State v. Chalender, 99 Ohio App. 3d 4, 7 (2d Dist. 1994) (dismissing appeal for lack of jurisdiction)). Defendants have failed to make that showing here.

III. The Court lacks jurisdiction under R.C. 2505.02(B)(4) because the Order is not a provisional remedy whose harms cannot be addressed by a later appeal.

As the Motion to Dismiss explained, this Order does not satisfy the requirements of R.C. 2505.02(B)(4) for many of the same reasons that it did not meet the requirements of (B)(2).

Defendants’ response in

opposition does nothing to alter that conclusion.

A.

The Order did not decide the rights of the parties under R.C. 9.67.

In its order, the trial court was clear about what it was not doing: It did not decide the constitutionality of R.C. 9.67, the applicability of that statute, or whether or when notice was given under the statute. See Order at 5. The Order stressed that those issues are all ones for future resolution. See id. The Order also did not compel the production of specific documents or dictate the terms of a nondisclosure agreement.

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At most, the trial court’s entry contemplated that future orders might be necessary should the parties fail to agree. But that is not this order.

The Order did not impose any affirmative obligations or independent restrictions on the parties beyond requiring them to confer with each other and with the trial court. See Motion at 22-23. The Defendants are therefore incorrect when they assert that the Order can be enforced against them through contempt proceedings. See Opp. at 10.

As set forth in the Motion to Dismiss, it is R.C. 9.67, not the Order, that prevents Defendants from relocating the Columbus Crew. Motion at 24.

And it is the statute, not the Order, that must be enforced against Defendants should they violate its terms.

To the extent that Defendants now contend that they are harmed by any uncertainty caused by the existence of the statute, they could have eliminated that uncertainty themselves. If they believed that R.C. 9.67 was unconstitutional or did not apply to them, Defendants could have sought to enjoin it or brought a declaratory judgment to invalidate it.

They did not.

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Finally, Defendants’ reliance on federal law to justify their appeal is neither relevant nor persuasive. See Opp. at 15. Federal and Ohio laws differ with respect to the types of orders that may be immediately appealed.

Federal courts have automatic jurisdiction to hear

interlocutory appeals from injunction orders.

See 28 U.S.C. §

1292(a)(1). R.C. 2505.02(B)(4) contains no similar provision. In Ohio the label an order bears does not matter; the question is whether relief is available on appeal following a final judgment. See R.C. 2505.02(B)(4).

B.

The Defendants have not shown that the Order imposes any harm that cannot be addressed after a final judgment.

Even if the Order did create affirmative obligations or impose specific prohibitions, that alone would not make it appealable for purposes of R.C. 2505.02(B)(4). Under the statute, appealing parties must further demonstrate that they are harmed by a challenged order and that the harm cannot be remedied by an appeal after judgment.

Defendants failed to make either showing here or below.

No harm. Although the Order does not require Defendants to disclose any specific information, Defendants have made repeated 9

statements—to the trial court, to this Court, and publicly—that they intend to do so anyway. Among other things, they stated that they would provide “access to the team and league’s financial information” pursuant to a nondisclosure agreement. See Motion at 28-29 (citing Exhibits D and E to Opposition to City’s Motion to Toll).

If Defendants were sincere in those representations, then they cannot be harmed by the fact that the trial court took them at their word.

It is only if those representations were not made in good faith that Defendants could claim harm. Of course, to establish harm in that way would also require an admission on Defendants’ part that they never had any intention of complying with the requirements of R.C. 9.67.

Defendants’ claim of harm related to the portion of the Order temporarily deferring further action is also insufficient to establish jurisdiction under R.C. 2505.02(B)(4).

As the State and City

emphasized, Defendants had ample opportunity to introduce evidence in the trial court regarding any harms that they might suffer by the brief delay. They chose not to do so. See Motion at 25-26.

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Defendants offer little in the way of a response. Their suggestion that the Court “should look only to whether it has jurisdiction over the appeal” misses the broader point. See Opp. at 21 n.3. Jurisdiction under R.C. 2505.02(B)(4) requires Defendants to show that they will be irreparably harmed by the Order, and they have not.

Defendants vaguely assert that the Order hinders their ability “to do various things” to aid in the relocation of the Columbus Crew, see Opp. at 10 and 19, but they cite no provision of the Order that specifically restrains them. Their own behavior belies this assertion.

Defendants’ representatives have stated that the Order “[has not] caused [Defendants] to hit the pause button on bringing MLS to Austin.” Kylie McGivern, Questions Swirl over Major League Soccer’s Future in Austin, KXAN, May 11, 2018 available at https://perma.cc/5L4ATZCZ?type=image.

Perhaps this is because nothing in the Order prevents Defendants from continuing to seek business opportunities and partnerships in Austin. They remain free to seek public contributions from the City of Austin by, for example, requesting public land, a below-market lease, or 11

publicly funded infrastructure improvements. Cf. Kevin Lyttle, City Report Says McKalla Place is ‘Suitable’ for Soccer Stadium, AustinAmerican Statesman, June 1, 2018 available at https://perma.cc/FT3MXK3S; compare Complaint at ¶ 44 (identifying taxpayer benefits provided to the Columbus Crew).

Defendants’ claim that they are harmed by the Order also largely ignores the ways that it benefits them. The State in this case asked for discovery, in part to test Defendants’ claim that they have complied with R.C. 9.67. Defendants asked the trial court to stay their obligation to respond. See Motion to Stay Discovery. Although not obvious from their appeal, the Order in large part granted Defendants’ request. The 90-day delay was tied to the Defendants’ successful request for a stay, and it must be considered in that light.

Adequate remedy. Defendants’ claims of harm (and their basis for asserting jurisdiction) are bound up with their arguments that the statute does not apply to them. The question of when the statutory period under R.C. 9.67 expires is similarly linked with the question of when (or whether) notice under the statute was given. These issues cannot be 12

addressed independently of one another.

Therefore, not only can

Defendants’ challenges to the Order be addressed in a later appeal, those challenges must be addressed then.

For example, Defendants have never explicitly stated, in the words of R.C. 9.67, that they will “cease playing most . . . home games at [Mapfre Stadium]” or provided a date certain on which that would occur. They now appear to at least partially concede that, before March of 2018, they communicated only that they might potentially relocate not that they would relocate. See Opp. at 3-5. In light of that, the earliest that Defendants could argue that R.C. 9.67’s notice period would expire is in September. It is only if the statutory period is extended past the point at which it would have otherwise expired that Defendants would have any claim to harm.

But if Defendants afford the trial court the opportunity to consider their challenges to the statute, their concerns will be either moot or can be appealed after a final order. If they prevail, R.C. 9.67’s six months will not even apply, rendering any challenge to the 90 days moot. See Legg v. Hallet, 2007-Ohio-6595, ¶ 27 (10th Dist.). And if the trial court 13

ultimately determines that R.C. 9.67 does apply (and that notice was in fact given) it may determine that the addition of 90 days is no longer appropriate; the Order leaves open the possibility that the trial court may decide to shorten or lengthen the tolling period. Order at 17. If it does not, and if the court issues a final order requiring compliance with the statute, the Defendants would then be able to appeal that decision.

Defendants’ contrary claim, that an appeal following a final judgment would not provide an adequate remedy, is unsupported by the authority they cite. They assert for example that enforcement of an unconstitutional statute would cause irreparable harm. Opp. at 20 (citing Magda v. Ohio Elections Comm’n, 2016-Ohio-5043 (10th Dist.)). That may be true, but it is not relevant here; Magda did not involve questions about appealability under R.C. 2505.02. And, even more significantly, portions of the statute at issue in that case had previously been declared unconstitutional by the Sixth Circuit. Id. at ¶¶ 33-37. R.C. 9.67 by comparison has not been interpreted by any court, let alone declared unconstitutional by one. Furthermore, as the State and City already explained in their Motion to Dismiss, Inrex Home Care, LLC v. Ohio 14

Dep’t of Dev. Disabilities, 2016-Ohio-7986 (10th Dist.), is similarly irrelevant. See Motion at 24-25. The question in that case was whether an injunction—not an appeal—was appropriate. Inrex, 2016-Ohio-7986 at ¶ 1. To the extent that Inrex discussed the issue of harm at all, it noted that the question was not in dispute. See id. at ¶ 13.

Finally, it should go without saying that because the Order does not impose a nondisclosure agreement or compel the production of any specific documents, there is no harm that cannot be addressed by an appeal of a subsequent order. To put it in Defendants’ preferred terms, see Opp. at 21, no one has let the cat out of the bag yet. Their assertion of harm is therefore premature and, as with their other claims of harm, any challenges can and must be addressed, if at all, in a later appeal. See Legg, 2007-Ohio-6595 at ¶ 27 (appeal was premature where disclosure of documents was not ordered).

CONCLUSION For all the reasons outlined above and in the Motion to Dismiss, the Court lacks jurisdiction over this appeal and it should be dismissed.

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Respectfully submitted, MICHAEL DEWINE Ohio Attorney General

ZACH KLEIN Columbus City Attorney

/s/ Bridget C. Coontz BRIDGET C. COONTZ (0072919) Assistant Chief Constitutional Offices Section 30 E. Broad Street, 16th Floor Columbus, Ohio 43215 Tel: 614-466-2872 Fax: 614-728-7592 Bridget.Coontz@OhioAttorneyGen eral.gov

/s/ Joshua T. Cox JOSHUA T. COX (0029860) Chief Counsel CHARLES P. CAMPISANO (0095201) Assistant City Attorney Office of the Columbus City Attorney 77 N. Front Street, 4th Floor Columbus, Ohio 43215 Phone: (614) 645-7385 Fax: (614) 645-6949 jtcox@columbus.gov cpcampisano@columbus.gov

RANDALL W. KNUTTI (0022388) Principal Assistant Attorney General Court of Claims Defense Section 150 E. Gay Street, 18th Floor Columbus, Ohio 43215 Tel: 614-466-7447 Fax: 866-771-4236 Randall.Knutti@OhioAttorneyGene ral.gov SAMUEL C. PETERSON (0081432) Deputy Solicitor, Appeals 30 E. Broad St., 17th Floor Columbus, Ohio 43215 Tel: 614-466-4320 16

/s/ Jennifer A. Flint DREW H. CAMPBELL (0047197) JENNIFER A. FLINT (0059587) MATTHEW W. WARNOCK (0082368) BRYAN M. SMEENK (0082393) Bricker & Eckler LLP 100 South Third Street Columbus, Ohio 43215 Telephone: (614) 227-2316 Facsimile: (614) 227-2390 dcampbell@bricker.com jflint@bricker.com

Samuel.Peterson@OhioAttorneyGe mwarnock@bricker.com neral.gov bsmeenk@bricker.com Counsel for Plaintiff, Ohio Attorney General

Co-Counsel for the City of Columbus

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CERTIFICATE OF SERVICE I certify that on June 7, 2018 the foregoing was filed electronically and sent via U.S. mail and via email to the following: Marc J. Kessler Jeffrey A. Yeager HAHN LOESER & PARKS LLP 65 E. State St., Suite 1400 Columbuys, Ohio 43215 mkessler@hahnlaw.com jyeager@hahnlaw.com

Dan Cvetanovich James G. Ryan Jolene S. Griffith BAILEY CAVALIERI, LLC One Columbus 10 W. Broad St., Suite 2100 Columbus, Ohio 43215 dcvetanovich@baileycav.com jryan@baileycav.com jgriffith@baileycav.com Counsel for Defendants Precourt Sports Ventures, LLC, Crew Soccer Stadium, LLC and Team Columbus Soccer, LLC

Bradley I. Ruskin Mark D. Harris Jennifer E. Tarr PROSCKAUER ROSE, LLP 11 Times Square New York, New York 10036 bruskin@proskauer.com mharris@proskauer.com jtarr@proskauer.com Counsel for Defendant Major League Soccer, LLC

Counsel entering an appearance in this matter will also receive service via the Franklin County Clerk of Courts electronic filing system. /s/ Bridget C. Coontz Bridget C. Coontz (0072919) Assistant Chief, Constitutional Offices Section Counsel for the Ohio Attorney General’s Office