McAllister v.St. Louis Rams, LLC

Filing 190

CORRECTED MEMORANDUM AND ORDER re: doc 180 ..IT IS HEREBY ORDERED that defendant The St. Louis Rams, LLCs motion for stay pending arbitration is GRANTED in part and DENIED in part.IT IS FURTHER ORDERED that this matter is STAYED only as to between The St. Louis Rams, LLC and the St. Louis/Regional Convention & Visitors Commission. Signed by District Judge Stephen N. Limbaugh, Jr on 8/11/17. (MRS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
RONALD MCALLISTER,
Plaintiff,
v.
THE ST. LOUIS RAMS, LLC,
Defendants.

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No. 4:16-CV-172 SNLJ
No. 4:16-CV-189
No. 4:16-CV-262
No. 4:16-CV-297
CONSOLIDATED

CORRECTED MEMORANDUM AND ORDER
This matter is before the Court on defendant The St. Louis Rams, LLC’s motion to
stay pending arbitration (#134).
Defendant recently filed a third-party complaint against the the St. Louis
Convention & Visitors Commission1 (“CVC”) and a counterclaim against plaintiff
McAllister. Although some familiarity with the facts of this case will be assumed, a brief
summary of plaintiff McAllister’s claims are necessary. McAllister was a season ticket
holder of seats for the then-St. Louis Rams football games. He bought his “personal seat
licenses” or “PSLs” in 1995 through an entity created for the purpose of bringing the
Rams to St. Louis known as FANS, Inc. The PSLs were sold pursuant to a form contract
known as the FANS Agreement. The next year, the Rams began selling PSLs directly
pursuant to a nearly identical form contract known as the Rams Agreement; McAllister
bought two PSLs pursuant to the Rams Agreement in 2005. McAllister alleges that,
when the Rams moved the team to California in 2016, the Rams breached both
Agreements by failing to provide a refund to McAllister and thousands of other PSL
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The St. Louis Convention & Visitors Commission is sometimes referred to as the Regional
Convention & Visitors Commision. Compare, e.g., #149 ¶ 2, #159 ¶ 6.

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holders. McAllister brought claims for breach of contract, actual and punitive damages
and attorneys’ fees pursuant to the Missouri Merchandising Practices Act, and, in the
alternative, that the Agreements are illusory and void and that the Rams are thus liable to
plaintiff and other PSL owners for refunds for unjust enrichment.2
Defendant Rams maintain that FANS acted as an agent to the CVC in the sale of
the first contract PSLs and that the proceeds of these sales were used to pay FANS’s and
the CVC’s obligations incurred in connection with inducing an NFL team to relocate to
St. Louis. FANS’s relationship with the Rams, the CVC, and another entity, the Regional
Convention and Sports Complex Authority (the “RSA”) is described in detail in a series
of “Relocation Agreements” entered into in 1995. The Rams allege that the Relocation
Agreemnts set forth terms on which the CVC is obligated to indemnify the Rams for
claims arising out of the CVC’s operations, incluing FANS’s sale of PSLs on the CVC’s
behalf. The Relocation Agreements require arbitration, however, so the Rams filed both
a third-party complaint against the CVC in this case and an Arbitration Demand. Section
3 of the Federal Arbitration Act (“FAA”), 9 U.S.C. § 3, requires courts to stay “any
suit…upon any issue referable to arbitration.” Missouri state law also requires such a
stay. § 435.355.1.5 RSMo. Staying proceedings between the Rams and the CVC is
mandatory. However, staying the remainder of the claims --- i.e., staying the litigation
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Two other plaintiff groups, from the consolidated Envision, LLC, et al. v. The St. Louis Rams,
LLC, No. 4:16-CV-00262-SNLJ (E.D. Mo.) and Arnold, et al. v. The St. Louis Rams, LLC,
No. 4:16-cv-00297-SNLJ (E.D. Mo.), claim that the FANS and Rams Agreements required the
Rams to use Best Efforts to secure tickets for seats at games where the transferred home games
are played. The Rams won their motion for judgment on the pleadings based on the FANS
Agreement against the Envision and Arnold plaintiffs, so the FANS Agreement is no longer at
issue for the Envision and Arnold plaintiffs. The Envision and Arnold plaintiffs argued that their
cases should not be stayed even if McAllister’s case was stayed; however, as explained below,
the Court need not address their arguments in light of its decision not to stay the litigation as
against the Rams.

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between the non-arbitrating plaintiff groups and the Rams --- is discretionary. See Moses
H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 21 n.23 (1983).
The Rams’ third party complaint against the CVC seeks in Count I declaratory
relief as to the Rams and CVC’s respective obligations under the CPSL Agreement, the
FANS PSLs, and other Relocation Agreements. The Rams state that resolution of that
Count I is a necessary predicate to complete resolution of the plaintiffs’ existing claims
related to FANS-issued PSLs because it is the CVC, not the Rams, that assumed FANS’s
obligations and because FANS sold FANS PSLs as an agent to the CVC --- not as the
Rams’ agent. Counts II and III of the Rams’ third party complaint are for contractual and
equitable indemnity arising out of the same Relocation Agreements and, according to the
Rams, they too will establish that the CVC will be responsible for the FANS-related
claims. The Rams thus maintain that the CVC will have the greatest interest in defending
against those claims in this proceeding.
“To evaluate a discretionary stay pending arbitration, courts weigh three factors:
(1) the risk of inconsistent rulings; (2) the extent to which the parties will be bound by the
arbiters’ decision; and (3) the prejudice that may result from delays.” Reid v. Doe Run
Res. Corp., 701 F.3d 840, 845 (8th Cir. 2012) (citing AgGrow Oils, L.L.C. v. Nat'l Union
Fire Ins. Co. of Pittsburgh, Pa., 242 F.3d 777, 783 (8th Cir. 2001)).
This Court held in its order on the Rams’ motion to reconsider that the matter of
Rams’ liability on the FANS Agreement must be saved for later litigation not limited to
the pleadings. (#63 at 2.) The Rams suggest that if this Court proceeds to determine the
Rams’ liability on the FANS Agreement, the Court’s ruling may be inconsistent with the
arbitrators’ determination in the arbitration between the Rams and the CVC. However,
the Court finds that inconsistent rulings are unlikely here. As in the trial court’s order
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preceding Reid, the fact that the arbitrator will determine what is the two claims for
indemnification between the Rams and the CVC does not affect plaintiffs’ ultimate claim
for a refund based on the FANS Agreement. See A.O.A. v. Doe Run Res. Corp.,
4:11CV44 CDP, 2011 WL 6091724, at *5 (E.D. Mo. Dec. 7, 2011) (“Regardless of
whether the [third party] must indemnify the defendants or defend the case, plaintiffs do
not lose their right to sue the individuals of their choice), aff’d sub nom. Reid, 701 F.3d
840.
In addition, the Rams’ additional claim against CVC for declaratory relief also
appears different than McAllister’s claims against the Rams. McAllister contends that --regardless of the contractual relationship between the Rams and CVC --- the Rams held
themselves out as selling PSLs under the FANS Agreement, giving rise to a claim of
apparent authority that would not be present in the arbitration. That is, even if the Rams
prevail in the arbitration, McAllister may still not be precluded from suing the Rams
under the pleaded theory of apparent authority.
The second factor also weighs in favor of not staying the entire litigation because
it appears plaintiffs are not bound by the arbitration, at least for the same reason that
McAllister’s apparent authority claim differs from the Rams’ claims against the CVC.
See id. Only the Rams and the CVC are bound by the arbitration.
Third, the risk of prejudice is high. As time goes on, evidence will grow only
more stale, as evidenced by --- for example --- the Rams’ unwillingness to authenticate
emails sent from @rams.nfl.com by a former Rams employee. The plaintiffs are thus
eager to pursue their claims, as nearly 18 months have passed since this litigation began.
Although defendant argues that plaintiffs would benefit by allowing the arbitration to

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proceed to judgment, all the responding plaintiffs clearly disagree and would prefer not to
wait for that judgment.
Accordingly,
IT IS HEREBY ORDERED that defendant The St. Louis Rams, LLC’s motion
for stay pending arbitration is GRANTED in part and DENIED in part.
IT IS FURTHER ORDERED that this matter is STAYED only as to between
The St. Louis Rams, LLC and the St. Louis/Regional Convention & Visitors
Commission.
Dated this 11th

day of August, 2017.

STEPHEN N. LIMBAUGH, JR.
UNITED STATES DISTRICT JUDGE

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