Phoenix XXV: Anyone in the theatre seen a pale horse?

[MountainHawk]

Not familiar with Arizona law but i can't imagine it would be that easy to just 'go personally after' the GWI directors- id assume there would have to not only be a winning case but a slam dunk to get to that 'piercing the corporate veil' type level

Do tax exempt organizations like this one have a corporate veil?

 

[XX]

Goldwater is going to issue a response later today:

Goldwater would contend its within its First Amendment rights to criticize a bond deal being undertakend by a public entity, he said.

Read more: Glendale, Goldwater flap over Phoenix Coyotes hinges on ‘tortious interference’ | Phoenix Business Journal

 

[goyotes]

Do you actually think GWI would lose? I really don't think it's a slam dunk (admittedly based on limited info/knowledge). Also, GWI isn't "most litigants." They have an in-house legal department that can make an assessment on the actual risk the suit will pose to the individual directors, etc.

GHOST

I do honestly think they could lose. I would love to take the depositions. Ask about their facebook page posts on the subject, tweets, comments made to the press, their failure to respond to the public, and how any of this had an effect on fund raising. It would be so much fun. I am pretty confident, based upon the limited facts available to me, that I could withstand a motion to dismiss or summary judgment. Get this in front of a jury after the team has relocated and .... I'm telling you, I'd take it on a contingent fee, and I wouldn't be surprised if the CoG hires special counsel who is some hot shot plaintiff's attorney with a reputation for taking on companies and organizations more formitable than the GWI.

Yes, the GWI is not most litigants. However, the Directors are likely not experienced with being sued. There is a question about whether the GWI and the individual Directors all have a common interest such that one counsel can represent both the GWI and the Directors. Likely, the Directors get seperate counsel as their defense would be they acted upon the information from the staffers, and if this goes south, there will be all kinds of issues raised about the level of information the staffers furnished and what sorts of information the staffers did not consider or advise the Board about. Much the same arguments could be made as is being bantered about with the CoG and its staffers.

 

[Killion]

It is also a clear example of how little the grass-roots movement matters when it comes to a sports franchise re-locating.

Quite true ABD. I think perhaps the internet has changed much in the way people express themselves, protest in terms of vocalizing their concerns/support/hurt anger, confusion or whatever over the potential or real loss of a home team.

 

[crazed323]

A grass-roots movement in Arizona would have no effect on the outcome of the purchase attempt. The City is already convinced they need the team, and the GWI is already convinced they know what is best for the tax payers.

Wearing the "Jets Rally" as a badge of honor is getting old. It is also a clear example of how little the grass-roots movement matters when it comes to a sports franchise re-locating.

I disagree, IMO having a solid show of support for the franchise would have gone a long way.

It may have little to no effect now that it has come this far, but in reality this situation has been ongoing for awhile now and the time for this has come and gone.

 

[goyotes]

Do tax exempt organizations like this one have a corporate veil?

Not in a D & O setting. The Directors are being sued for their actions in directing the action of the entity, or failing to prevent the entity from taking some action that causes harm. Not a corporate veil issue, as that would apply to a shareholder for example.

 

[MountainHawk]

Actually, the GWI seems to be organized as a Educational Foundation, not a corporation at all, so I'm not sure there is even a corporate veil to be pierced.

 

[AtlantaWhaler]

A lot of these posts would seem to belong on fan message forums instead of the Business of Hockey. That said, I expect the barrage of attacks will be moving over to the Atlanta thread very soon.

You sound like that's new...

 

[goyotes]

Goldwater is going to issue a response later today:



http://www.bizjournals.com/phoenix/news/2011/03/07/coyotes-flap-hinges-on-tortious.html

That is a loser argument. You do not have an unlimited first amendment right to interfere with the legit business dealings of a business or City. If that was the case, companies would be attacking other businesses to interfere with business transactions and then claim their defense is the First Amendment because they thought the transaction was somehow prohibited by law. No one said they couldn't come out publically against the deal. However, they targeted underwriters and potential investors and told them they may sue and the deal may be unconstitutional. Plus, their statements were likely commercial speech, and not protected under the First Amendment. If that is their best defense, they have lost before the war starts. However, the defense does ring consistent with how the GWI thinks about things.

 

[Evil Doctor]

Goldwater is going to issue a response later today:

http://www.bizjournals.com/phoenix/news/2011/03/07/coyotes-flap-hinges-on-tortious.html

If the city of Glendale sues the Goldwater Institute over the group’s opposition to the city’s Phoenix Coyotes deal, courts may have to decide if Goldwater improperly interfered the $100 million Glendale bond deal or was within its First Amendment rights to criticize the deal.

Even though I'm no lawyer, I kind of thought that this is GWI's ultimate trump card. This has the potential to go all the way to US Supreme Court, and if they regard that a bunch of religious nut jobs has the right picket a gay soldier's funeral, based on the First Amendment, I don't see how Glendale has any shot...

 

[AllByDesign]

I disagree, IMO having a solid show of support for the franchise would have gone a long way.

It may have little to no effect now that it has come this far, but in reality this situation has been ongoing for awhile now and the time for this has come and gone.

A solid show of support was not what I was referring to. The City already has the interests of the fans covered, they don't need to rally.

 

[XX]

If that is their best defense, they have lost before the war starts. However, the defense does ring consistent with how the GWI thinks about things.

GWI is probably hoping for leniency or a different standard because they are a small, non-profit watchdog group but I'd argue that their involvement in such large matters compromises that position. If you want to run with the big dogs you get treated like one. I do find it humerus that the GWI is running with the 1st as their best defense, though that may be conjecture on the part of the reporter.

Even though I'm no lawyer, I kind of thought that this is GWI's ultimate trump card. This has the potential to go all the way to US Supreme Court, and if they regard that a bunch of religious nut jobs has the right picket a gay soldier's funeral, based on the First Amendment, I don't see how Glendale has any shot...

Difference here is that there is very real monetary damage. It's along the lines of slander/libel. You can't interfere with another business without repercussions.

 

[edog37]

Not in a D & O setting. The Directors are being sued for their actions in directing the action of the entity, or failing to prevent the entity from taking some action that causes harm. Not a corporate veil issue, as that would apply to a shareholder for example.

GWI does have 1st Amendment rights to take a position on a matter of public interest. I have a hard time believeing any judge willing to give any government that kind of power to muzzle free speech. If GWI were to lose, it could open up a whole can of worms on grassroots organizations.

 

[MountainHawk]

Even though I'm no lawyer, I kind of thought that this is GWI's ultimate trump card. This has the potential to go all the way to US Supreme Court, and if they regard that a bunch of religious nut jobs has the right picket a gay soldier's funeral, based on the First Amendment, I don't see how Glendale has any shot...

Tortious interference is a well-defined tort in US law, and I would be SHOCKED to see the SCOTUS overturn a lower court on something like 1st amendment protection.

 

[CasualFan]

I am pretty confident, based upon the limited facts available to me, that I could withstand a motion to dismiss or summary judgment.

I do not believe that the City's counsel could establish improper conduct with the letters to potential investors. However, I would love to watch them try.

 

[MAROONSRoad]

Let's say the lawsuit is for $500M as speculated.

Now let's say that GWI has $4M in assets, and maybe $25M of D&O.

That other $470M is the responsibility of any of the directors personally named.

It's also likely joint & several responsibility, so if one of the directors is much wealthier than the other, than they will take the brunt of it.

So, what it might come down to is: Is GWI confident enough that the director is willing to put the Diamondbacks at risk if the court rules against them. Are they willing to do that even if there is only a 25% chance of losing? 10%? 5%?

Like I said, this could even be separate from the issue if this is an illegal lease. The court could easily say, 'The lease was illegal, but the letters were tortious interference anyway, because the method was improper.'

That's the only leverage the COG gets out of this, IMO. It will force the directors to decide if it's worth it to risk everything to keep up this fight.

You missed my point. I am asking goyotes if he thinks there is any real chance that GWI could lose. Keep in mind that the COG is a public entity. Keep in mind that there is an inherent right to question government decisions and policies in the USA. And keep in mind that "improper intent" is a required element of the tort COG is likely to sue under. Etc., etc.

GHOST

 

[AllByDesign]

Even though I'm no lawyer, I kind of thought that this is GWI's ultimate trump card. This has the potential to go all the way to US Supreme Court, and if they regard that a bunch of religious nut jobs has the right picket a gay soldier's funeral, based on the First Amendment, I don't see how Glendale has any shot...

I agree with Goyotes here, it is a horrible platform to defend themselves from. You don't need a law degree to want to...

 

[MountainHawk]

GWI does have 1st Amendment rights to take a position on a matter of public interest. I have a hard time believeing any judge willing to give any government that kind of power to muzzle free speech. If GWI were to lose, it could open up a whole can of worms on grassroots organizations.

Note there is a very big difference between issuing press releases saying 'We think this deal is illegal' (clearly 1st amendment protected IMO) and sending a letter to the potential buyers of the bonds saying this deal is illegal, so we advise against buying them.

 

[MountainHawk]

You missed my point. I am asking goyotes if he thinks there is any real chance that GWI could lose. Keep in mind that the COG is a public entity. Keep in mind that there is an inherent right to question government decisions and policies in the USA. And keep in mind that "improper intent" is a required element of the tort COG is likely to sue under. Etc., etc.

GHOST

Yes, I think there is a very very good chance they could lose, because they went over a line with the letter that they didn't need to. Press releases would have been sufficient to do the same thing.

 

[Koss]

I disagree, IMO having a solid show of support for the franchise would have gone a long way.

It may have little to no effect now that it has come this far, but in reality this situation has been ongoing for awhile now and the time for this has come and gone.

I'll never forget the images of the Jets Rallies in the end days of the Winnipeg Franchise.

 

[billy blaze]

GWI is probably hoping for leniency or a different standard because they are a small, non-profit watchdog group but I'd argue that their involvement in such large matters compromises that position. If you want to run with the big dogs you get treated like one. I do find it numerous that the GWI is running with the 1st as their best defense, though that may be conjecture on the part of the reporter.



Difference here is that there is very real monetary damage. It's along the lines of slander/libel. You can't interfere with another business without repercussions.

seems to me the big dog here is the GWI- Glendale clutching at straws

 

[XX]

Yes, I think there is a very very good chance they could lose, because they went over a line with the letter that they didn't need to. Press releases would have been sufficient to do the same thing.

This is what I don't get. You would think that a group of lawyers that is practiced in this would avoid that trap. Anyone doing their findings for the bonds would have hit the GWI lawsuit on its first google search and that would give pause. There was no need to go directly to the source.

I'm anxious to see the response to this. The proverbial fire has been lit.

 

[billy blaze]

Note there is a very big difference between issuing press releases saying 'We think this deal is illegal' (clearly 1st amendment protected IMO) and sending a letter to the potential buyers of the bonds saying this deal is illegal, so we advise against buying them.

how so?

 

[MountainHawk]

seems to me the big dog here is the GWI- Glendale clutching at straws

GWI has an endowment of $700K ... they aren't big dogs in any sense of the word.

 

[MountainHawk]

how so?

You don't have free speech rights to interfere directly in a business transaction, just like you don't have free speech rights to go up to the White House windows and yell at Obama that you think he's a loser muslim that was born in Kenya, but you can say that same thing in public all you want.