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Sources: $790 million settlement reached in Rams relocation lawsuit
Joel Currier , Ben Frederickson
ST. LOUIS — Lawyers have struck a deal to settle the four-year-old Rams relocation lawsuit for $790 million, sources with direct knowledge of the negotiations told the Post-Dispatch on Wednesday.
St. Louis and St. Louis County officials are expected to announce the settlement Wednesday morning. Lawyers were working to notify all NFL owners first.
The settlement does not include an expansion football team for St. Louis, a source said. It was not immediately clear how much of the settlement would be paid by Los Angeles Rams owner Stan Kroenke, who moved the Rams from St. Louis in 2016, and how much would be paid by the NFL.
Lawyers representing Kroenke and the NFL were in St. Louis on Tuesday for a mediation session with lawyers representing St. Louis, St. Louis County and the Regional Convention and Sports Complex Authority, which owns the Dome at America’s Center, to discuss settlement possibilities. Negotiations, held at a law firm office in Clayton, went into the night.
Mediating the deal was former St. Louis Circuit Judge Jack Garvey, who now works in civil practice at Carey Danis & Lowe in St. Louis.
Attempts to strike a deal came in advance of two important dates:
• The first was a contempt of court hearing that was to decide if multiple influential NFL owners had satisfied Circuit Judge Christopher McGraugh’s request to hand over detailed financial information for the pursuit of potential punitive damages against certain owners.
• The second was the scheduled start of a January trial that would ask a St. Louis jury to decide if Kroenke, his fellow owners and the NFL broke Missouri law by violating the league’s relocation guidelines during the 2016 relocation of the Rams from St. Louis to Los Angeles.
The city, county and dome authority filed the civil suit against Kroenke, the Rams, the league and its owners in 2017, alleging the league broke its own relocation rules that were established decades ago to avoid antitrust liability. The suit alleged breach of contract, fraud, illegal enrichment and interference in business by the Rams and the NFL. It cited significant financial loss, including but not limited to the $18 million the region spent on a task force that came up with a proposal to keep the Rams in a new riverfront stadium before Kroenke spent billions of his own money on a new stadium in Inglewood, California.
Pressure built on the league to reach a settlement in recent weeks as Kroenke frustrated his fellow NFL owners by expressing interest in revisiting the terms of the indemnification agreement he signed before the move. Kroenke reportedly threatened his fellow owners to settle his side of the case individually if he did not get help from them in handling the financial toll of a settlement. The decision to settle represents an about-face from the league after it downplayed the legitimacy of the lawsuit from the start.
“There is no legitimate basis for this litigation,” NFL spokesman Brian McCarthy said after it was filed in 2017. “While we understand the disappointment of the St. Louis fans and the community, we worked diligently with local and state officials in a process that was honest and fair at all times.”
The lawsuit claimed St. Louis lost up to $3.5 million a year in amusement and ticket tax revenue with the departure of the Rams, and that the city lost about $7.5 million in property tax and $1.4 million in sales tax revenue, plus millions in earnings taxes. The county was alleged to have lost hotel tax, property tax and sales tax revenue because of the team’s departure.
During the lawsuit’s pretrial process, the St. Louis side also received permission to pursue punitive damages against owners who served on the league’s committee on Los Angeles expansion, which started a bitter fight in league circles about what financial documents those owners would be required to hand over as the St. Louis lawyers built their case. Also chafing owners was a lengthy and exhausting discovery process that required phone records from owners dating back long before the Rams were approved to relocate. A trial would have pursued billions between damages and punitive damages, but would have faced the risk of winnings being clawed back by an appeal.
At the heart of the case was not what turned out to be the yearslong quest of Kroenke to move the team, some of which was happening in plain sight due to the regrettable lease the region gave the team upon its initial arrival from Los Angeles; or a trail of lies told by Rams executive Kevin Demoff along the way. Rather, it was the league’s insistence, from NFL commissioner Roger Goodell to former league executive Eric Grubman, that a strict following of the relocation guidelines, which were established in 1984 in response to court recommendation to the NFL to avoid antitrust liability, would give St. Louis a fair chance to keep its team.
That effort produced plans for a $1.1 billion open-air stadium on the St. Louis riverfront, which would have received $400 million in public funding. The pitch wasn’t just rejected. Kroenke’s relocation application, which was accepted, seemed to go out of its way to paint St. Louis in a negative light. After the race for Los Angeles concluded, the NFL insisted its relocation guidelines, which among other things require good-faith negotiations between a team and a host city before relocation, were not a contract and did not make St. Louis a third-party beneficiary to a contract. That stance had not fared well in pretrial proceedings and would have been at the center of a January trial.
The lawsuit was filed by the Clayton law firm of Blitz, Bardgett and Deutsch, with Clayton firm Dowd Bennett as co-counsel. Both law firms took the case on a contingency basis.
The NFL approved the Rams’ move in January 2016, after league owners voted multiple times and resorted to a secret ballot to approve the move. In the end, all three teams included in the race for Los Angeles relocated. The Rams went to Inglewood, where Kroenke’s stadium is shared by the Chargers. The Raiders went from Oakland to Las Vegas.
“This is the hardest undertaking that I’ve faced in my career,” Kroenke said in 2016 after receiving permission to move the Rams. Breaking the silence he became known for soon after his emergence as the Rams’ majority owner in 2010, he added a reassurance that he would not move the team. “I understand the emotional side.”
This is a developing story. It will be updated.
Agamemnon
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