ST. LOUIS (CN) – The L.A. Rams have yet to play a down this week, but they’ve won a round in a legal battle over their right to buy for $1 the practice facility they abandoned in suburban St. Louis for the more lucrative pastures of Los Angeles.
The Missouri Supreme Court on Tuesday quashed a writ approved by the court of appeals, designed to prevent the Rams from exercising that clause. The ruling grants the Rams’ wish to have the matter settled in arbitration.
The Rams moved from St. Louis to Los Angeles in January 2016 when the NFL largely ignored its relocation guidelines in favor of Rams owner E. Stanley Kroenke’s promise of a $1 billion stadium in Inglewood. In explaining the move, Kroenke – a native Missourian – blasted the region’s economic prospects, but said little about the decade of incompetence the Rams had displayed on the field.
Despite Kroenke’s dire prognostications of the St. Louis area’s economic viability, the Rams attempted to exercise a clause in their contract allowing the organization to buy the property containing its former practice facility in Earth City, northwest of St. Louis.
The Regional Convention and Sports Complex Authority, which operated the complex, sued the Rams, seeking declaratory relief voiding the $1 purchase clause.
The Rams countered by filing a motion to compel arbitration, saying the Authority’s claims fall within the scope of the lease’s arbitration provisions found in paragraph 45 of schedule I of the lease. Paragraph 45 requires arbitration of “[a]ll disputes between the Parties hereto arising out of this Lease.” Schedule I provides, in relevant part: “Any controversy, dispute or claim between the Parties hereto including, without limitation, any claim arising out of, in connection with, or in relation to the interpretation, performance or breach of this Lease shall be settled by arbitration. … Such arbitration shall be the exclusive dispute resolution mechanism.”
The Authority filed a motion to stay arbitration, claiming the lease does not require the arbitration of a declaratory judgment action.
“The Authority relied on an attorney fee provision in the lease authorizing fees for a party seeking relief in a ‘proceeding to … declare rights’ under the lease and subsequently obtaining a ‘judgment,’” the state high court’s en banc opinion stated. “The Authority also noted other lease provisions referring to the right of a party ‘to institute suit,’ the right of a party to obtain ‘cumulative … remedies at law or in equity,’ and ‘litigation between the Parties concerning this Lease.’”
After a state court sustained the Rams’ motion for arbitration, the Authority filed a writ of mandamus with the court of appeals, seeking to stay the arbitration and reinstate the declaratory judgment on the circuit court’s docket. The court of appeals granted the writ.
But the Missouri Supreme Court’s 6-page ruling quashed the writ. The court found that though there are inconsistencies in the contract, the intent between the parties to arbitrate disputes is clear.
“The language cited by the Authority does not unambiguously or unmistakably exclude a declaratory judgment action from the arbitration provision,” the court wrote. “Rather, the language of the arbitration provisions is broad. Because there is not the ‘most forceful evidence’ of the parties’ intent to exclude the claim from arbitration, any doubt as to arbitrability must be resolved in favor of the application of the arbitration clause.”
Attorneys for the Authority and the Rams were not available for comment late Tuesday afternoon.
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