METRO. SPORTS FACILITY. v. MN TWINS, C2-01-2010.

Decision Date22 January 2002
Docket NumberNo. C2-01-2010.,C2-01-2010.
PartiesMETROPOLITAN SPORTS FACILITIES COMMISSION, Respondent, v. MINNESOTA TWINS PARTNERSHIP, a Minnesota General Partnership, d/b/a Minnesota Twins Baseball Club and the Minnesota Twins, et al., Appellants.
CourtMinnesota Court of Appeals

Corey J. Ayling, Andrew J. Shea, Richard L. Evans, Kathleen M. Brennan, McGrann Shea Anderson Carnival Straughn Lamb, Chartered, Minneapolis, MN, for respondent.

Roger J. Magnuson, Peter William Carter, Andre Timothy Hanson, Mitchell W. Granberg, Dorsey Whitney LLP, Minneapolis, MN, for appellants.

Mike Hatch, Attorney General, Alan I. Gilbert, Chief Deputy and Solicitor General, Mark B. Levinger, Stuart T. Alger, Assistant Attorneys General, St. Paul, MN, for amicus curiae State of Minnesota.

William M. Hart, Meagher Geer P.L.L.P., Minneapolis, MN, for amicus curiae Charles E. Spevacek.

Considered and decided by TOUSSAINT, Chief Judge, SCHUMACHER, Judge, and KLAPHAKE, Judge.

OPINION

TOUSSAINT, Chief Judge.

Appellants Minnesota Twins Partnership and Major League Baseball challenge the temporary injunction (1) requiring the Twins to play their 2002 home schedule at the Hubert H. Humphrey Metrodome stadium; (2) enjoining Major League Baseball from interfering with the contract; (3) enjoining the Twins from taking action that would prevent them from playing their 2002 home schedule at the Metrodome; and (4) enjoining the sale of the Twins unless the new owner agrees to comply with the lease terms requiring the Twins to play their 2002 home schedule at the Metrodome. Because the district court did not abuse its discretion in issuing the temporary injunction against the Twins and Major League Baseball to maintain the status quo pending resolution of the merits, we affirm.

FACTS

The Minnesota Twins (Twins), a privately owned and operated baseball team, are a member of Major League Baseball. Major League Baseball is an unincorporated association of 30 major-league baseball teams. The Metropolitan Sports Facilities Commission (the commission) is a Minnesota governmental entity that was created in 1977 to construct and operate the Hubert H. Humphrey Metrodome in Minneapolis.

The use agreement between the Twins and the commission has been amended over the years and is governed by both legislation and the parties agreements. As originally enacted, the legislation required that the use agreement be no longer than 30 years and no shorter than the term of the bonds used to finance the stadium. Minn.Stat. 473.581, subd. 3(a) (1978). In 1979, the legislature amended the act so that the agreement could provide for termination upon conditions related and limited to the bankruptcy, insolvency, or financial capability of the organization. 1979 Minn. Laws ch. 203, 8.

In October 1997, pursuant to the escape clause in the then-applicable use agreement, the Twins gave written notice terminating the use agreement, effective at the end of the 1998 season. This notice was based on an assertion that the adverse financial conditions necessary to trigger the escape clause existed. The commission brought an action in district court, alleging that the financial conditions had not been met and asserting that the Twins were estopped from relying on those conditions to terminate the contract. The parties then entered into a new use agreement on July 31, 1998, and agreed to dismiss the lawsuit with prejudice.

The 1998 use agreement provided the Twins with a fixed-term agreement for the years 1998-2000, with the option of exercising three one-year extensions following the fixed-term period. In September 2001, the Twins exercised their lease option for the 2002 season.

Under the terms of the agreement, the commission does not charge the Twins any rent for their use of the stadium for home games. Nor do they charge for the Twins year-round use of locker and office space. Rent may be charged only in very limited circumstances, including play of the All-Star game at the Metrodome or post-season play. The Twins also pay a minimal share of utility, upkeep, and maintenance costs. Further, the commission may collect revenue from the sale of concessions, subject to payment of at least 35 of the gross receipts to the Twins. And it receives 25 of the net revenue the Twins collect from advertising at the Metrodome. Together, these sums would amount to an estimated $500,000 for the 2002 season.

Therefore, with no rent being collected, the major benefit that the commission receives under the use agreement is the Twins promise to play baseball at the Metrodome. The Twins are excused from this obligation only if the force majeure clause applies and they are unable to play a home game for a reason beyond the Teams and the Commissions control, including strikes, an act of God, a natural casualty, or a court order. If the Twins cease playing games at the Metrodome as required, or if they cease playing major-league professional baseball for any reason, they are in default of the agreement. The remedies available to the commission under the contract include, but are not limited to, injunctive relief and orders for specific performance requiring the Team to play its Home Games at the Stadium during the Term hereof. The agreement is binding on the Twins successors and assigns as well.

The commission became concerned that the Twins would not comply with their one-year agreement after reports that Major League Baseball intended to eliminate or contract two franchises, including the Minnesota Twins. On November 6, 2001, the commission brought a declaratory-judgment action seeking, in relevant part, specific performance of the use agreement and an injunction preventing Major League Baseball from interfering with the commissions contractual relationship with the Twins. The commission alleged that the Twins sought to circumvent their contractual obligations by selling their franchise to Major League Baseball for $250 million and that the league would then terminate the franchise.

The commission moved for a temporary restraining order on November 6, 2001, and the court issued the ex parte order on the same date. After the commissions motion for a temporary injunction, the district court held a hearing on November 15, 2001. On November 16, 2001, the district court granted the commissions motion for a temporary injunction.

The Twins and Major League Baseball appealed and petitioned the Minnesota Supreme Court for accelerated review. The supreme court denied the motion but ordered this court to consider the appeal on an expedited basis. Accordingly, this court expedited briefing deadlines and the scheduling of oral arguments.

ISSUE

Did the district court abuse its discretion in temporarily enjoining the Twins from breaching their one-year use agreement with the commission and enjoining Major League Baseball from interfering with the commissions contractual relationship with the Twins?

ANALYSIS

The decision of whether to grant a temporary injunction is within the district courts broad discretion and will not be reversed absent an abuse of that discretion. Eakman v. Brutger, 285 N.W.2d 95, 97 (Minn.1979). The district court must make sufficient findings to permit meaningful appellate review. Minn. R. Civ. P. 52.01; Crowley Co. v. Metro. Airports Commn, 394 N.W.2d 542, 544-45 (Minn.App.1986) (remanding appeal from denial of injunction for district court to make necessary findings). On review, we consider the facts in the light most favorable to the prevailing party. Bud Johnson Constr. Co. v. Metro. Transit Commn, 272 N.W.2d 31, 33 (Minn.1978).

Appellants argue that the district court made inadequate findings to support the temporary injunction, especially as to Major League Baseball. When findings are insufficient to permit appellate review, the temporary injunction will be reversed and remanded to the district court for findings. See Ulland v. Intl. Assn. of Entrepreneurs of Am., 527 N.W.2d 133, 135 (Minn.App.1995), review denied (Minn. Apr. 18, 1995). This argument, however, cannot be resolved until after we analyze the findings in light of the relevant law. We note that much of the analysis is applicable to both Major League Baseball and the Twins, and that their interests are in many instances intertwined.

We now turn to the main issue on appeal, in which we review the injunction for an abuse of discretion. A temporary injunction is an extraordinary equitable remedy. Miller v. Foley, 317 N.W.2d 710, 712 (Minn.1982). It is meant to preserve the status quo pending an adjudication on the merits. Id. The grant of a temporary injunction neither establishes the law of the case nor constitutes an adjudication of the issues on the merits. Indep. Sch. Dist. No. 35 v. Engelstad, 274 Minn. 366, 370, 144 N.W.2d 245, 248 (1966).

In evaluating whether the district court abused its discretion, we must consider five factors:

(1)The nature and background of the relationship between the parties preexisting the dispute giving rise to the request for relief.
(2)The harm to be suffered by plaintiff if the temporary restraint is denied as compared to that inflicted on defendant if the injunction issues pending trial.
(3)The likelihood that one party or the other will prevail on the merits when the fact situation is viewed in the light of established precedents fixing the limits of equitable relief.
(4)The aspects of the fact situation, if any, which permit or require consideration of public policy expressed in the statutes, State and Federal.
(5)The administrative burdens involved in judicial supervision and enforcement of the temporary decree.

Dahlberg Bros. v. Ford Motor Co., 272 Minn. 264, 274-75, 137 N.W.2d 314, 321-22 (1965) (footnotes omitted).

1. Nature and background of the relationship

A temporary injunction is issued to maintain the status quo pending a decision on the merits. Pickerign v. Pasco Mktg., Inc., 303 Minn. 442, 444, 228 N.W.2d 562,...

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