The move of the Rams football team from St. Louis to Los Angeles in 2016 was one of the biggest sports stories in Southern California in recent decades. Although the Rams initial 4-12 season was less than inspiring, millions of fans across the Los Angeles region welcomed the return of professional football for the first time in 22 years. But back in St. Louis the reaction has of course not been so warm. Beyond just the broken hearts of Rams fans across Missouri, however, the backlash against the move has now hit the courts with the City and County of St. Louis along with the regional sports authority entity suing the Rams, the NFL, and every NFL team and owner (the listing of defendants in the lawsuit fills 18 pages alone) for breach of contract, unjust enrichment, fraudulent misrepresentation, and tortious interference with a business contract.
St. Louis Argues the NFL Violated its Own Relocation Policy
National sports leagues like the NFL present an unusual situation in American law, as they are federations of individually-owned entities which also exist in a singular, dominant organization in a given industry. When it comes to professional football, the NFL is of course the only significant game in town, as it were, and the courts have required that organizations like the NFL take extra steps to comply with federal monopoly/anti-competitive regulations. One such step was the Ninth Circuit requiring in 1984 that the NFL to adopt a “Relocation Policy” that must be followed before a team is allowed to move to another city. The policy requires a team to “work diligently and in good faith to obtain and maintain suitable stadium facilities in their home territories, and to operate in a manner that maximizes fan support in their current home community.”
In their lawsuit against the NFL and team owners, the plaintiffs argue that the Rams not only failed to follow the NFL policy in working in good faith with the City of St. Louis to meet the needs of the Rams (primarily through construction and development of a new stadium), but that the other team owners breached their duties to the plaintiffs by voting for the move without requiring the Rams to follow the policy, enriching themselves in the process. In essence, the plaintiffs argue, “the Relocation Policy and relocation process are a sham meant to disguise the avarice and anticompetitive nature of the entire proceeding.”
St. Louis Accuses Rams Owner of Secretly Plotting Move
The complaint is rife with allegations that the Rams’ owner, Jeff Kroenke, and others repeatedly made fraudulent statements over a span of years indicating that the Rams would stay in St. Louis, despite taking contrary action to plan the move to Los Angeles. Examples of such allegedly fraudulent statements from the complaint include:
- Kroenke stating in 2010: “I’m going to attempt to do everything that I can to keep the Rams in St. Louis…”
- Rams GM Kevin Demoff stating in 2012: “Our goal is to build a winner in St. Louis not only in 2012, but in 2022, 2032, and beyond. This city deserves better NFL football and that is what we are focused on every day.”
- Demoff telling fans in 2014 after Kroenke’s purchase of the land in Inglewood, CA where the Rams stadium is currently under construction: “(the land is) not a piece of land that’s any good for a football stadium. The size and the shape aren’t good for a football stadium.”
The plaintiffs argue that the Rams increased their value by $700 million due to the move at the plaintiffs’ expense while the plaintiffs have lost $100 million in net proceeds. How the court and NFL respond to the plaintiffs’ allegations remains to be seen.
Work With an Experienced Los Angeles Business Litigation Attorney
At Wagenseller Law Firm in downtown Los Angeles, our attorneys have extensive experience in resolving all types of business litigation matters, including those related to fraud and intentional misrepresentation. Contact the Wagenseller Law Firm today to schedule a consultation to discuss your matter.