lawsuit against Rams: interesting 1st step

Big Loss For Rams In A St. Louis Court: Credibility

Ron Katz is Chair of the Sports Law Practice Group at Manatt, Phelps & Phillips LLP and a Distinguished Careers Institute Fellow at Stanford University.

http://www.forbes.com/sites/rkatz/2016/05/13/big-loss-for-rams-in-a-st-louis-court-credibility/#e54581576cd9

Although lawsuits go on for years, the classic advice that most parents give to their children often applies: you only have one chance to make a first impression. The Rams have fumbled that chance in the lawsuit the team is defending in very hostile territory: St. Louis, the town the team left for the bright lights of Los Angeles.

Before getting to this recent fumble, let’s put it in context. The Rams were sued by a class of fans who claimed that they had been misled by statements of high Rams officials, including the owner, Stan Kroenke, to the effect that the Rams would not lead the charge to leave St. Louis. The irate fans claim that these statements were not true, as demonstrated by facts like the purchase of the very land on which the Rams will be building the team’s new stadium in Inglewood, California, at the same time that the statements in question were being made.

The fans claim that they would not have bought Rams merchandise and tickets but for the allegedly false statements. It is probably true that a Sam Bradford Rams jersey would not fetch much at a St. Louis garage sale these days. It is also true that attendance at Rams games last season declined precipitously after it became known that the Rams were in fact leading the charge out of St. Louis.

The lawsuit was brought in state court. That would be considered a favorable venue for the plaintiffs, because state court judges hold office for only six years in Missouri before having to be reconsidered for retention. Therefore, many lawyers believe that state court judges are much more subject to political pressure than federal court judges, who hold office for life.

Therefore, the Rams’ first gambit in the lawsuit was to remove the case from state to federal court. This can be done if there is so-called diversity of citizenship. The reason that removal is allowed in this situation is to give the out-of-stater a fairer shake in federal court.

So, whether there was diversity of citizenship was a crucial question at the outset of this lawsuit. That question depended on the state in which the owner of the Rams was a citizen. He claimed that he was a citizen of Wyoming.

The court was not impressed with this claim: ”Other than Defendants’ bald assertion that Mr. Kroenke is a citizen of Wyoming, there is no evidence that controverts that he is a citizen of Missouri. In contrast, Plaintiffs have provided evidence that Mr. Kroenke resides in Missouri, including his voter registration and Missouri driver’s license.”

The question I have about the above situation is not whether this court decision is correct–it obviously is–but rather why the owner chose to make this argument in light of this overwhelming evidence. Making the argument causes two problems. First, it’s a loser.

Second, and more important, it lessens Mr. Kroenke’s credibility before the court that will be deciding this significant lawsuit. If in fact, state court judges do respond to political pressure, it is unlikely that a Missouri judge will feel much pressure from a party that has left Missouri in a controversial way and who claims not even to be a citizen of the state where he votes. Assuming that Mr. Kroenke now feels an intense loyalty to Wyoming, he may have to pay a steep price for that.