Court: District Court, E.D. Missouri; September 21, 2016; Federal District Court
Three consolidated lawsuits arise from the St. Louis Rams' decision to move to a new stadium in Inglewood, California, after having played in St. Louis since 1995. Season ticket holders were required to purchase Personal Seat Licenses (PSLs), approximately 46,000 of which were sold, granting the right to buy season tickets in designated sections. Following the announcement of the move, PSL holders initiated lawsuits against the Rams for damages.
The court is currently addressing three motions: two from the Rams seeking judgment on the pleadings in the Envision and Arnold cases, and one from plaintiff McAllister for partial judgment in his case. The legal standard for judgment on the pleadings requires no unresolved material issues of fact, permitting the court to review pleadings, attached materials, and public records. Missouri law governs the relevant contracts.
In the Envision and Arnold cases, plaintiffs argue that the Rams should honor PSL agreements by allowing ticket purchases for the new California stadium. The Rams claim these agreements are no longer effective due to the relocation. The court will grant and deny the Rams' motions in part. The PSL agreements, which include nearly identical provisions known as the "FANS" Agreement and the "Rams" Agreement, specify the terms under which season tickets can be purchased, including a clause that allows for ticket purchases until March 1, 2025, and a provision for best efforts to secure tickets for games played outside the designated stadium.
Licensee represents that the CPSL(s) are acquired solely for purchasing NFL Season Tickets at the Stadium. All rights granted to the Licensee are subject to the Stadium Agreements and related contracts, remaining valid only while the RAMS play at the Stadium, not exceeding thirty years. The Licensee has no claims against the RAMS regarding the CPSL or its termination and acknowledges the potential for the RAMS to relocate, which would invalidate the CPSL. The Licensee agrees not to seek damages or injunctive relief against the RAMS if they do not play in the Stadium or St. Louis. The Envision and Arnold plaintiffs claim that the "Best Efforts" provision entitles them to buy tickets for games at a new stadium in California. These license agreements are governed by contract law principles, emphasizing the parties' intentions via clear contract language. Courts interpret contracts holistically, avoiding interpretations that render provisions meaningless. Both the FANS and Rams Agreements require PSL holders to purchase tickets for games at the Stadium, with the Rams committed to making best efforts for tickets to "transferred games." However, the FANS Agreement stipulates validity only while NFL games are played at the Stadium, leading the Rams to argue the Agreement terminated with their move to California. Plaintiffs contend the Best Efforts provision applies to any venue, countering that the acknowledgment of potential relocation aligns with the Rams' commitment to securing tickets for "transferred games." The definition of "transferred games" remains unspecified, with the Rams interpreting it as temporary relocations while St. Louis is the home venue.
Plaintiffs interpret "transferred games" to mean any home game played outside the Stadium during the 30-year contract. However, this interpretation contradicts a key provision in the FANS Agreement, which states that the Agreement is only valid while NFL Football is played at the Stadium by the Rams, up to 30 years (FANS 12(A)). This condition supersedes conflicting provisions, including the "Best Efforts" clause. Plaintiffs argue that their interpretation renders the "Best Efforts" provision meaningless and creates ambiguity. The court disagrees, stating that both provisions can be reconciled. The validity of the FANS Agreement hinges on the condition being met, which is no longer valid due to the Rams’ relocation to California. Consequently, "transferred games" in the Best Efforts provision refers to temporarily transferred games, not permanently moved games. For instance, if the Stadium were temporarily unusable due to a disaster, the Rams could transfer games elsewhere without invalidating the contract, as the condition would still be met. Conversely, a permanent move to California invalidates the FANS Agreement, leading to its termination as if it had naturally expired. Thus, the Best Efforts provision and the entire Agreement become ineffective, resulting in the dismissal of the Envision and Arnold plaintiffs' claims as meritless.
In contrast, the Rams Agreement lacks specific language present in the FANS Agreement, which affects its interpretation. The Rams Agreement stipulates that all rights granted to the Licensee are contingent on the terms of the Stadium Agreements and related agreements from the Rams' relocation to St. Louis. It also confirms that the Agreement remains valid only while NFL Football is played at the Stadium, and the Licensee acknowledges the uncertainty of the Rams playing in the Stadium for the full term. Notably, the Licensee agrees not to pursue legal action against the Rams regarding the CPSL or its potential termination.
The absence of validity language in the Rams Agreement is significant, as its validity is not dependent on the Rams playing at the Stadium, unlike the FANS Agreement. The Rams Agreement is valid until 2025, and the Rams are obligated to use "Best Efforts" to allow PSL holders to purchase tickets for games played where the Rams are located. The Licensee recognizes that the Rams may not play at the Stadium for the entire term, which aligns with the Best Efforts clause, and there is no invalidating provision in the Agreement. Both the FANS and Rams Agreements contain a clause preventing PSL holders from suing the Team for damages or injunctive relief if the Rams do not play at the Stadium. However, the Rams did not rely on this clause in their motions. If they had, it could render their obligations unenforceable. Consequently, judgment on the pleadings regarding the Rams Agreement is denied.
In the McAllister case, the plaintiff's claims differ from those in Envision and Arnold. Unlike those plaintiffs, who allege that the Rams must provide tickets for games in California, McAllister asserts that the Agreements are terminated and the Rams are in breach. The plaintiff argues that while the Rams have the right to terminate the Agreements, they must refund PSL owners, except in cases of PSL holder default. The FANS and Rams Agreements are essentially the same, allowing the Licensor to terminate and refund deposits based on the Licensee's credit or other reasons. The Rams argue that the Agreements terminated when they stopped playing in the Stadium, terminating all provisions, including refund obligations. They assert that the refund clause merely allowed them to limit seat sales and refund deposits. The Rams view the Agreements as having "expired" due to relocation, claiming no liability for failing to play in the Stadium. McAllister concurs that if a contract existed, it has terminated, which the Court agrees with regarding the FANS Agreement.
The FANS Agreement's expiration or termination by the Rams is deemed irrelevant, as both terms are synonymous according to the Agreement's language. The Rams possess the right to terminate the Agreement and refund the Licensee's deposit based on the Licensor's discretion, including the ability to reduce the number of purchased PSLs. This right is broad and not limited to specific reasons. The Rams' decision to terminate the FANS Agreement necessitates that they refund deposits, but the definition of "deposit" remains unclear. McAllister claims his $1,000 payments for PSLs are deposits, while the Rams argue they are "License Fees." The FANS Agreement mentions refunds specifically in relation to the Rams' move to St. Louis, but this does not restrict other contexts for refunds due to the Reservation of Rights language. The Rams terminated the FANS Agreement following their move to California and thus owe refunds. However, the court cannot resolve the amount of damages related to "deposits" at this stage. The Rams Agreement has not been terminated, and Licensees have the remedy of obtaining tickets through the Best Efforts provision, making the termination/refund clause inapplicable. McAllister's alternative claim that the Agreements are illusory is rendered moot due to the court's judgment on the breach of contract claim regarding the FANS Agreement and the available remedy under the Rams Agreement.
The FANS Agreement and Rams Agreement lack clear contractual terms. The FANS Agreement specifies that if the Rams relocate their home venue from the Stadium, the contract terminates. Conversely, the Rams Agreement requires the Rams to use their best efforts to provide ticket options at their new venue for St. Louis Rams PSL holders. As a result, the Rams are granted judgment on the pleadings concerning the Envision and Arnold complaints related to the FANS Agreement, but not for claims under the Rams Agreement. For the McAllister complaint, judgment is granted against the Rams for liability under the FANS Agreement, which has terminated, but not for the Rams Agreement. The court ordered the defendant's motions for judgment on the pleadings to be granted regarding the FANS Agreement and denied for the Rams Agreement claims. Similarly, the plaintiff's motion for partial judgment on the pleadings is granted for the FANS Agreement and denied for the Rams Agreement claims. The motions were filed under individual case numbers prior to consolidation. The excerpt also notes that any legal actions relating to the Agreements must be brought in the specified court, and mentions that PSL holders agreed to limit the Rams' liability, although the Rams did not fully utilize this provision. Nonetheless, the Rams retain the right and obligation to terminate and refund as necessary.
