Suit Accusing Rams, NFL of Snubbing St. Louis Moves Forward

(Bloomberg) -- Stanley Kroenke can't duck a lawsuit by St. Louis alleging that the billionaire owner of the Rams and the National Football League committed legal fouls when they moved the team to Los Angeles in 2016.

The city of St. Louis, St. Louis County and the area's convention and sports complex authority accuse the NFL and Kroenke of breach of contract and fraud over the relocation. According to the complaint, the Rams decided to move the team before applying for a relocation, misleading the city about the possibility of staying.

The defendants, including all 32 NFL teams, had asked St. Louis Circuit Judge Christopher McGraugh to dismiss the suit, saying there was no violation of the league's relocation policy.

They argued that the main thrust of the complaint -- that the NFL had breached a contract by violating the league's relocation policy -- was invalid. The relocation guidelines were “not a contract, but an internal NFL policy,” attorney Benjamin Razi told the judge at a Dec. 1 hearing.

In a ruling Wednesday, McGraugh said: “Clearly, plaintiffs allege facts that give rise to a breach of an enforceable contract.”

Other Teams

McGraugh dismissed a fraudulent misrepresentation count against individual teams other than the Rams.

“The petition fails to attribute any specific misrepresentation to any other club or owner other than the Rams or Kroenke,” McGraugh wrote.

The plaintiffs seek unspecified millions in lost tax revenue in addition to $16 million spent attempting to retain the team, mainly on planning and design for a new $1.1 billion stadium just north of downtown St. Louis.

Representatives of the Rams, Kroenke and the NFL didn't immediately respond to requests for comment.

St. Louis County Executive Steve Stenger said the ruling “is another step toward holding Stan Kroenke and the NFL accountable for conspiring to swindle the St. Louis area out of the NFL team we supported with our hearts and our tax dollars.”

The suit alleges that both the NFL and Rams officials, notably Kroenke, lied about their true intentions.

“NFL allowed the Rams to relocate from St. Louis when the Rams made no attempt to stay and St. Louis put forth a strong, good faith effort to engage in negotiations,” according to the suit. In addition, the move to Los Angeles “enriched the Rams improperly.” The value of the Rams doubled to $3 billion, St. Louis said in the suit, citing a Forbes article. “The increase in value was at the expense of plaintiffs.”

Relocation Policy

In court documents, the defendants called the relocation policy “discretionary” and said the city isn't a party to or beneficiary of the NFL policy, so couldn't enforce it even if it were a contract.

The suit cites a number of statements over the years by Kroenke and Rams Chief Operating Officer Kevin Demoff that indicated they wanted to keep the Rams in St. Louis.

“I'm going to attempt to do everything I can to keep the Rams in St. Louis,” Kroenke said in April 2010, according to the complaint. “I've always stepped up for pro football in St. Louis. And I'm stepping up again. I'm born and raised in Missouri. People know I can be trusted. People know I'm an honorable man.”

Statements by NFL commissioner Roger Goodell and NFL executive Eric Grubman in support of St. Louis and on the importance of the relocation policy are also cited.

The NFL has said none of those statements support the lawsuit. “They are all opinions and expectations, not statement of fact,” the NFL said.

The NFL relocation policy was developed in 1984 to avoid antitrust liability, in response to a ruling against the league when it tried to block the Oakland Raiders from moving in 1980 to the Los Angeles Memorial Coliseum.

According to the St. Louis suit, that policy states that “clubs are obligated to work diligently and in good faith” on suitable stadium facilities, and that each club's primary obligation is to “advance the interests of the league in its home territory.” 

The suit lists three pages of examples in which the Rams made “false statements regarding the team's intent to engage in good faith negotiations.”

In a court document filed on Nov. 10, the plaintiffs said the relocation policy “imposes contractual obligations on all NFL member teams designed to prevent teams from relocating simply because they believe another market will be more lucrative.”

The case is City of St. Louis v. NFL, 1722-CC00976, Missouri State Court (St. Louis).

To contact the reporter on this story: Tim Bross in St. Louis at btbross@gmail.com.

To contact the editors responsible for this story: Elizabeth Wollman at ewollman@bloomberg.net, Peter Blumberg

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