Court Opinion

ID: 9472505
Source: CourtListenerOpinion
Date Created: 2023-08-05 04:02:50.061312+00
Date Added: 2024-06-11T17:42:59.140019
License: Public Domain

COFFEY, Circuit Judge,
dissenting.
The issue in this case is whether the Capital Improvement Board (“CIB”) and *959-the City Council of Baltimore (“Baltimore”) are adverse claimants to a particular stake held by the Indianapolis Colts. The majority asserts that the CIB and Baltimore “are not claimants to the same stake” and thus the Indianapolis Colts fail to satisfy the jurisdictional requirement of 28 U.S.C. § 1335 (1982). In the alternative, the majority declares that even if a common stake does exist, the Colts are not presented with conflicting and vexatious claims to that stake. I dissent from the majority’s strained attempt to simplify this case as merely involving an eminent domain proceeding in Baltimore, Maryland, and a lease agreement in Indianapolis, Indiana. Rather, as characterized by the district court judge, this action involves a struggle over a very unique stake — “the rights and privileges of the [Colts] franchise and the property rights incident to the operation thereof” — with all of the attending social and economic benefits to be derived by two major metropolitan cities competing for the rights and privileges of the Colts’ National Football League franchise. The district court entered an extensive list of findings of fact to support its characterization of the stake. The majority completely ignores these findings and summarily declares that “the CIB and Baltimore do not have conflicting claims over a single stake.” Based upon the district court’s extensive findings of fact, I am convinced that the CIB and the City of Baltimore are adverse claimants to the same stake and thus the Colts satisfy the jurisdictional requirement of 28 U.S.C. § 1335.
According to the district court’s findings of fact, on March 28, 1984, the Colts signed a Lease Agreement (“Lease”) with the CIB, owner of the Hoosier Dome. Pursuant to the terms of that Lease, the Colts are obligated for a twenty-year period to, inter alia, play their pre-season and regular season home football games at the Hoosier Dome and reimburse the CIB for expenses incurred in season ticket distributions. On March 30, 1984, the Baltimore. City Council commenced 'an eminent domain proceeding against the Colts in Maryland state court. The court entered a restraining order enjoining the Colts from inter alia:
“[t]aking any action or inaction for the purpose or the effect of selling, removing, transferring, emcumbering or otherwise affecting the franchise and contract rights related thereto which is being condemned in these proceedings.”
That same day, March 30, 1984, the Colts’ executives received a telegram from the City of Baltimore notifying them that the City had commenced an eminent domain proceeding in Maryland state court and had obtained a restraining order. The following day, March 31, 1984, the CIB ratified the Lease previously signed on March 28, 1984. The district court found that because of the sketchy information provided in the telegram, “[b]etween March 30, when the telegram was received, and April 2, the earliest date that the written copy of the First Restraining Order might have been received [the Colts] did not take any action which violated the First Restraining Order as summarized in the telegram.”
On April 5, 1984, the CIB sent a letter to the Colts demanding that the Colts fulfill their contractual obligations under the Lease. That same day, the Colts filed a statutory interpleader under 28 U.S.C. § 1335 in the United States District Court for the Southern District of Indiana. The Colts alleged that the Baltimore City Council:
“seeks to require [the] Colts to operate the Franchise in Baltimore and to continue in existence the Baltimore Lease, and ... to preclude [the] Colts from operating the Franchise in conformance with the [CIB] Agreement____”
The Colts further alleged that the CIB:
“has imposed and will continue to impose contractual obligations upon [the] Colts requiring that [the] Colts retain ownership and control of the franchise and play home games in Indianapolis____”
The district court conducted ah evidentiary hearing and, based upon the evidence presented at that hearing, made findings of facts, entered conclusions of law, and de*960termined that the Colts “demonstrated sufficient adverse claims, or potential adverse claims, between Baltimore and the CIB to confer interpleader jurisdiction on this Court pursuant to 28 U.S.C. § 1335.” The majority disagrees.
The Federal interpleader statute, 28 U.S.C. § 1335, provides that:
“(a) The district courts shall have original jurisdiction of any civil action of in-terpleader or in the nature of interpleader filed by any person, firm, or corporation, association, or society having in his or its custody or possession money or property of the value of $500 or more ... if
(1) Two or more adverse claimants, of diverse citizenship as defined in section 1332 of this title, are claiming or may claim to be entitled to such money or property ... and if (2) the plaintiff has deposited such money or property or has paid the amount of or the loan or other value of such instrument or the amount due under such obligation into the registry of the court
(b) Such an action may be entertained although the titles or claims of the conflicting claimants do not have a common origin, or are not identical, but are adverse to and independent of one another."
(Emphasis added). The Federal interpleader statute is to be liberally construed in order to protect the stakeholder from both the expense and risk of double litigation. See, State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523, 533, 87 S.Ct. 1199, 1205, 18 L.Ed.2d 270 (1967); Union Central Life Ins. Co. v. Hamilton Steel Prod., Inc., 448 F.2d 501, 504 (7th Cir.1971). Indeed, in this circuit “so long as there exists a ‘real and reasonable fear of exposure to double liability or the vexation of conflicting claims ..., jurisdiction in interpleader is not dependent upon the merits of the claims of the parties interpleaded ____’” Union Central Life Ins. Co. v. Hamilton Steel Prod., Inc., 448 F.2d at 504 (quoting Bierman v. Marcus, 246 F.2d 200, 202 (3d Cir.1957), cert, denied, 356 U.S. 933, 78 S.Ct. 774, 2 L.Ed.2d 762 (1958). Moreover, the “stake” may consist of intangible property rights. Cf. United States v. American Film Institute, 79 F.R.D. 374, 376 (D.C.D.C.1978) (“rights of access and use possessed by the ... defendants to certain film materials.”).
The claim asserted by the CIB is not, as the majority contends, a simple contract interest, rather it involves the rights, benefits, and privileges of a National Football League franchise formerly known as the Baltimore Colts. It is this intangible, but very unique, property right that the CIB seeks to control by enforcing the terms of its Lease. A realistic view of the facts at hand reveals that the CIB was organized to improve and expand the greater Indianapolis economic market. As a result, the CIB provided in its Lease with the Colts:
“WHEREAS, the Board believes that the State of Indiana, County of Marion, City of Indianapolis and the Board will derive substantial economic, financial, and public relations, community and other benefits as a result of the Club’s relocating the franchise to the Indianapolis area.”
The CIB’s interest in enforcing the Lease is not simply to turn a profit for the Hoosier Dome but to enhance the prestige and the economic climate of the City of Indianapolis and the County of Marion, Indiana with a coveted National Football League franchise. See, e.g., Indianapolis Star, April 20, 1984, at 6, col. 3 (“stadium lease ... is expected to bring the city $2.6 million in new revenues a year”). There are numerous social and economic benefits associated with a professional sports franchise including public entertainment, increased restaurant and hotel revenues, civic pride, favorable media coverage, increased retail expenditures, and national recognition. This point is clearly driven home by Baltimore’s all-out efforts to keep the Colts in Baltimore.
The fact that the City of Indianapolis does not own the Colts and the CIB has only entered into a contract with the *961present owners of the franchise is of no consequence. As the California Supreme Court acknowledged in City of Oakland v. Oakland Raiders, 32 Cal.3d 60, 646 P.2d 835, 183 Cal.Rptr. 673 (1982), there may be no substantial legal difference between “managing and owning the facility in which the game is played, and managing and owning the team which plays in the facility.” 32 Cal.3d at 73, 646 P.2d at 842, 183 Cal.Rptr. at 680. See also, Los Angeles Memorial Coliseum Com’n v. N.F.L., 726 F.2d 1381, 1397 (1984). The Lease in this case expressly provides the CIB with a right of first refusal allowing it to find a suitable purchaser for the franchise if the owner of the Colts, Robert Irsay, disposes of a majority of the stock of the Colts’ franchise. The full intent of the CIB as embodied in the Lease is to keep the Colts in Indianapolis and thereby enjoy the rights and privileges of a National Football League franchise. The City of Baltimore also clearly desires these very same rights and privileges and thus, contrary to the majority’s simplified analysis, there does exist in this case a common, identifiable stake — the rights and privileges of the Colts’ franchise — subject to adverse claims.
The majority asserts that even if there is a common, identifiable stake, the claims of the CIB and Baltimore are not adverse and vexatious. The majority supports its position with reference to section 21.6(a)(iii) of the Lease which provides:
“If Club is ordered by a final order of such court of final appellate jurisdiction to play other than at the Stadium or the Franchise is acquired by eminent domain, this Agreement shall terminate at Club’s option, and the parties shall have no fur ther obligations hereunder____”
According to the majority, this “ ‘escape’ clause renders unreasonable the Colts’ claim that they will face a second lawsuit over the same stake if Baltimore ultimately succeeds in its eminent domain action.” The majority erroneously assumes that nothing will prevent the Colts from performing their obligations under the Lease except the successful eminent domain proceeding by Baltimore. The majority completely overlooks the fact that the Colts may be prevented from performing their obligations under the Lease before a final unappealable order of eminent domain is entered.
The Lease clearly provides that the Colts may terminate the Lease only if a final order of a court of final appellate jurisdiction is issued allowing Baltimore to acquire the Colts by eminent domain. The record reveals that in the eminent domain proceeding of April 5, 1984, the Maryland state court issued a restraining order enjoining the Colts from “selling, removing, transferring, encumbering or otherwise affecting the franchise and contractual rights related thereto which is being condemned in these proceedings.” It is probable, indeed likely, that during the course of an eminent domain proceeding in the Maryland district court, Baltimore will again seek to enjoin the Colts from playing any games in Indianapolis to prevent the Colts from becoming further entrenched in the Indianapolis market. There is absolutely nothing in the record before this court to suggest that a new injunction similar to the one previously issued by the Maryland state court will not be entered when the Colts’ interpleader action is dismissed. Such an injunction would prevent the Colts from preparing for the upcoming season and preclude the franchise from fulfilling its obligation to play all pre-season and home games in the Indianapolis Hoosier Dome. The Colts’ hands would be tied under the terms of the contract for they would not be able to terminate the Lease because no final unappealable order of eminent domain would have been entered. Thus, the CIB would be fully justified in suing the Colts for breach of their contractual duties. The Colts would unnecessarily be presented with simultaneous, adverse, and vexatious claims from both the CIB and the Baltimore City Council.
The City of Baltimore has fought, and will continue to fight, as is its right, the CIB’s interest in the Colts. Thus, the above scenario is certainly sufficient to satisfy the language of 28 U.S.C. § 1335 that *962two adverse claimants “may claim to be entitled” to the same stake. See, e.g., State Farm Fire & Cas. Co. v. Tashire, 386 U.S. at 534, 87 S.Ct. at 1205; United States v. Major Oil Corp., 583 F.2d 1152, 1157 (10th Cir.1978). In light of the liberal construction to be accorded the Federal interpleader statute to protect the stakeholder from the expense and risk of double litigation, I am convinced that the Colts satisfy the jurisdictional requirement of 28 U.S.C. § 1335.