Baseball at Trotwood v. Dayton Prof. Baseball

• Decision Date: 06 September 2005
• Docket Number: No. 3:98cv260.,3:98cv260.
• Citation: 493 F.Supp.2d 972
• Parties: BASEBALL AT TROTWOOD, LLC, et al., Plaintiffs, v. DAYTON PROFESSIONAL BASEBALL CLUB, LLC, et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

493 F.Supp.2d 972

BASEBALL AT TROTWOOD, LLC, et al., Plaintiffs, v. DAYTON PROFESSIONAL BASEBALL CLUB, LLC, et al., Defendants.

No. 3:98cv260.

United States District Court, S.D. Ohio, Western Division.

September 6, 2005.

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Anne Marie Frayne, Jacob Alfred Myers, Sue Seeberger, Myers & Frayne Co., LPA, Tina Fletcher Woods, Dayton, OH, for Plaintiffs.

Neil Frank Freund, Wayne Everett Waite, Freund Freeze & Arn, John Hayes Rion, Rion Rion and Rion LPA Inc., Kevin Lee Lennen, John H. Rion and Associates, Barry M. Block, Teresa D. Jones, Thompson, Hine & Flory, David Michael Rickert, Weisbrod & Dankof, Dayton, OH, Max D. O'Guinn, Michael Wesley Hawkins, Dinsmore & Shohl, Richard Michael Goehler, Douglas Edward Hart, Frost Brown Todd LLC, Robert Carroll Martin, Stephen Allison Bailey, Martin Bailey & MacDonald, James Eugene Burke, Jason M. Cohen, Keating Muething & Klekamp, Cincinnati, OH, Thomas B. Allen, Frost Brown Todd LLC, Middletown, OH, for Defendants.

OPINION; FINDINGS OF FACT AND CONCLUSIONS OF LAW; JUDGMENT TO BE ENTERED IN FAVOR OF DEFENDANT NATIONAL ASSOCIATION OF PROFESSIONAL BASEBALL LEAGUES, INC., AND AGAINST PLAINTIFF BASEBALL AT TROTWOOD, LLC, ON ITS COUNTERCLAIM (DOC. # 18); JUDGMENT TO BE ENTERED IN FAVOR OF PLAINTIFFS ROCK NEWMAN, INC., AND SPORTS SPECTRUM, INC., AND AGAINST DEFENDANT NATIONAL ASSOCIATION OF PROFESSIONAL BASEBALL LEAGUES, INC., ON ITS COUNTERCLAIM (DOC. # 18); JUDGMENT TO BE ENTERED IN FAVOR OF ALL DEFENDANTS AND AGAINST ALL PLAINTIFFS ON CLAIMS SET FORTH IN THEIR AMENDED COMPLAINT (DOC. # 3); TERMINATION ENTRY

RICE, District Judge.

This litigation arises out of the unsuccessful efforts of Plaintiff Baseball at Trotwood, LLC ("BAT"), and its two members, Plaintiffs Rock Newman, Inc. ("RNI"), and Sports Spectrum, Inc. ("SSI"), to locate a Class A minor league baseball franchise in the Dayton area. The final questions to be resolved in this litigation arise out of the Counterclaim (Doc. # 18) that Defendant National Association of Professional Baseball Leagues, Inc. ("NAPBLI"), has asserted against the Plaintiffs, seeking to recover from them the attorney's fees and expenses it has incurred during this litigation. In its Decision of September 20, 2004 (Doc. # 240), the Court concluded that the NAPBLI was entitled to summary judgment on its Counterclaim, as to liability, against BAT, but that it was not entitled to same against RNI and SSI. As a result of that Decision, the only issues remaining to be resolved in this litigation are the amount of BAT's liability to the NAPBLI and whether RNI and/or SSI is liable to that Defendant, for attorney's fees and expenses, and, if so, the amount of that liability. Those issues were tried on January 18, 2005, with the Court sitting as trier of fact. In accordance with the briefing schedule (Doc. # 260), the parties have filed their post-trial memoranda. See Docs. ## 261, 264 and 266. The Court now sets forth its Findings of Fact and Conclusions of Law. For background purposes, the Court includes in its Findings of Fact certain matters which are uncontroverted or were established as a result of the Court's earlier Decisions in this litigation which entered summary judgment against Plaintiffs. See Docs. ## 198 and 240.

By way of explanation, the Court's Findings of Fact, infra, contain findings that the NAPBLI will be permitted to recover some, but not all of the attorney's fees and expenses claimed from BAT. The NAPBLI has submitted evidence, Defendant's Exhibit 2, which is summarized by Defendant's Exhibit 1.¹ The latter document is submitted to establish that it is entitled to recover $383,301.50 for attorney's fees and $65,668.49 for expenses, up through November 30, 2004, in addition to compensation for attorney's fees incurred after that date. In its post-trial memorandum (Doc. # 261), BAT has argued, inter alia, that the NAPBLI is not entitled to recover some of those claimed fees and expenses. The Court makes Findings of Fact regarding these arguments. The Court accepts some of BAT's arguments and, therefore, finds that the NAPBLI is not entitled to recover a portion of the claimed attorney's fees and/or expenses.

I. Findings of Fact

1. BAT and its members, RNI and SSI, sought to purchase the Michigan Battle Cats ("Battle Cats"), a Class A minor league baseball franchise which played in the Midwest League, and to relocate that franchise to Hara Arena, located in Trotwood, Ohio. In order to accomplish that goal, Plaintiffs were required to obtain approval from the NAPBLI and the Midwest League to transfer ownership of the Battle Cats to BAT, and to relocate that franchise to the Dayton area.

2. The first step in the process of gaining approval for the purchase of a franchise in the Midwest League is to file a Control Interest Transfer Application ("CIT") with that league. If the Midwest League approves the CIT, it is forwarded to the NAPBLI, which in turn forwards it to Major League Baseball ("MLB"). MLB ultimately returns the CIT to the NAPBLI, with a recommendation of approval or disapproval; however, the ultimate decision on approval of the CIT rests with the NAPBLI. The Plaintiffs submitted a CIT, as required.

3. Section 25 of that CIT provides, in pertinent part:

The undersigned, both individually and on behalf of the Applicant and all entities and individuals listed in Sections 5, 6 and 7 of this Application, agrees that this Application is being submitted only for the consideration of the President of the National Association of Professional Baseball Leagues, Inc. Any decision to approve or disapprove this Application will be made by the President of the National Association of Professional Baseball Leagues, Inc. in his or her sole and absolute discretion. The decision by the National Association of Professional Baseball Leagues, Inc. to approve or disapprove this Application may be based on subjective and objective criteria. Until this Application is finally approved by the Office of the President, the Office of the Commissioner of Baseball and the appropriate League, the Applicant will not be entitled to any privilege nor have any of the rights of a Minor League Club. THE NATIONAL ASSOCIATION OF PROFESSIONAL BASEBALL LEAGUES, INC., THE OFFICE OF THE COMMISSIONER OF BASEBALL, THE APPROPRIATE LEAGUE AND ITS MEMBER CLUBS, AND ALL OF THEIR RESPECTIVE OFFICERS, EMPLOYEES, OWNERS, AGENTS AND DESIGNEES SHALL NOT BE LIABLE TO THE UNDERSIGNED, THE APPLICANT OR ANY OF THE ENTITIES AND INDIVIDUALS LISTED IN SECTIONS 5, 6 AND 7 OF THIS APPLICATION OR ANY THIRD PARTY FOR ANY CLAIM, LOSS OR DAMAGE GENERAL OR SPECIAL, INCIDENTAL OR CONSEQUENTIAL, INCLUDING LOST PROFITS, ARISING OUT OF OR IN ANY WAY RELATED TO THE PROPOSED TRANSFER OF THE CLUB TO THE APPLICANT OR THE PROCESSING OR DENIAL OF THIS APPLICATION. THE APPLICANT, BOTH INDIVIDUALLY AND ON BEHALF OF ALL ENTITIES AND INDIVIDUALS LISTED IN SECTIONS 5, 6 AND 7 OF THIS APPLICATION, AGREES THAT THE SOLE AND EXCLUSIVE REMEDY AGAINST THE NATIONAL ASSOCIATION OF PROFESSIONAL BASEBALL LEAGUES, INC.[,] AND ITS OFFICERS, EMPLOYEES OR AGENTS FOR CLAIM RELATING TO THIS APPLICATION SHALL BE FOR THE RETURN OF ANY APPLICATION FEE PAID TO THE NATIONAL ASSOCIATION OF PROFESSIONAL BASEBALL LEAGUES, INC. The Applicant and all entities and individuals listed in Sections 5, 6 and 7 of this Application shall be jointly and severally liable to the National Association of Professional Baseball Leagues, Inc., its officers, employees and agents, for payment of any attorneys' fees, court costs and expenses incurred in defense of any claim brought against any of them contrary to the terms of this Section 25.

Joint Exhibit 1 at 9-10 (capitalization in the original and emphasis added).

4. The Plaintiffs were unsuccessful in their efforts to purchase the Battle Cats and to move that franchise to Trotwood. As a consequence, they brought this litigation setting forth claims against the NAPBLI and numerous other parties. In response, the NAPBLI has asserted a Counterclaim against the Plaintiffs, seeking to recover the attorney's fees, costs and expenses it would incur in the defense of Plaintiffs' claims, in accordance with Section 25 of the CIT. See Doc. # 18.

5. Since BAT was designated as the Applicant on the CIT, it can be held liable for the attorneys' fees, costs and expenses incurred by the NAPBLI in defense of this lawsuit. In its Amended Complaint (Doc. # 3), BAT set forth the following claims against the NAPBLI, to wit: 1) unreasonable restraint of trade and monopolization in violation of §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2; 2) conspiracy to monopolize in violation of the Valentine Act, Chapter 1331 of the Ohio Revised Code; 3) tortious interference with prospective contractual and business relations; 4) civil conspiracy; 5) violations of 42 U.S.C. §§ 1981 and 1985, under the theory that BAT was discriminated against on the basis of race, since the principal of one of its members is an African-American. Section 25 of the CIT, supra, provides that the NAPBLI shall not be liable to BAT for claims in any way related to the proposed transfer and that BAT's sole and exclusive remedy shall be the return of its application fee. BAT brought its claims against the NAPBLI in violation of Section 25, since those claims are related to the proposed transfer of the ownership of the Battle Cats, and BAT has sought to recover more than its application, fee from the NAPBLI in this litigation. Therefore, BAT is liable to that Defendant for attorney's fees and expenses incurred in defense of those claims, given that they were brought in violation of Section 25. However, since the NAPBLI has failed to present evidence that either RNI or SSI was listed in Section 5, 6 or 7 of the CIT, neither of those Plaintiffs is similarly liable to the NAPBLI.

6. The NAPBLI retained its longtime counsel, George Yund ("Yund") of the law firm of Frost, Brown...