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Colts v. Mayor and City Council of Baltimore

August 10, 1984

INDIANAPOLIS COLTS, PLAINTIFF-APPELLEE,
v.
MAYOR AND CITY COUNCIL OF BALTIMORE, DEFENDANTS-APPELLANTS AND CAPITAL IMPROVEMENT BOARD OF MANAGERS OF MARION COUNTY, DEFENDANT-APPELLEE



Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 84 C 652 -- William E. Steckler, Judge.

Bauer, Posner, and Coffey, Circuit Judges.

Author: Bauer

BAUER, Circuit Judge

Defendants Mayor and City Council of Baltimore (collectively "Baltimore") appeal from two district court orders entered in this interpleader action Plaintiff Indianapolis Colts filed pursuant to 28 U.S.C. § 1335 (1948). The Colts, a football team owning a National Football League franchise, filed the action claiming interpleader jurisdiction on the ground that Baltimore and the Capital Improvement Board of Managers of Marion County, Indiana (CIB), operators of the Indianapolis Hoosier Dome, had conflicting claims against the team. The district court in Indiana granted the Colts' request for an order restraining Baltimore from pursuing its condemnation action against the Colts, which was pending in a federal district court in Maryland. Two weeks later, the district court also enjoined Baltimore from pursuing a Maryland state court action against the NFL in which Baltimore hoped to stop the Colts from moving to Indianapolis. Baltimore filed a notice of appeal from the court's two orders on April 19, 1984. On April 23, Baltimore also filed in this court an emergency motion to stay the district court orders and to enjoin the Colts from preparing to play football in Indianapolis pending this appeal. On May 8, this court granted Baltimore's motion for a stay, but denied Baltimore's request for an injunction against the Colts. Indianapolis Colts v. Mayor of Baltimore, 733 F.2d 484 (7th Cir. 1984). Our jurisdiction is based on 28 U.S.C. § 1292(a)(1) (1982). We hold that the district court did not have interpleader jurisdiction to hear this suit, and therefore vacate the orders and remand with instructions to dismiss.

I

Through the 1983 season, the Colts played their home games in Baltimore Memorial Stadium. In February 1984, the Colts and the stadium managers began negotiating a renewal of the Memorial Stadium lease. At the same time, the Colts negotiated with the CIB regarding the possibility of moving the team to the Hoosier Dome.

On March 27, 1984, Colts owner Robert Irsay learned that the Maryland Senate passed a bill granting the City of Baltimore the power to acquire the Colts by eminent domain. Irsay decided to move the team to Indianapolis and promptly executed a lease with the CIB. The Colts fled Baltimore under the cloak of darkness; eight moving vans full of Colts equipment arrived in Indianapolis on March 29.

On March 29, Maryland's governor signed into law the bill authorizing Baltimore to acquire the Colts by condemnation. Baltimore filed a condemnation petition against the Colts on March 30 in Maryland state court. The state court restrained the Colts from transferring any element of the team from Baltimore.

After learning about the condemnation suit by telegram, the Colts took two actions. First, on April 2, the Colts caused removal of the state court condemnation proceeding to federal district court in Maryland. Second, on April 5, the Colts filed this action in the United States District Court for the Southern District of Indiana, claiming that their obligations under the lease with the CIB conflicted with Baltimore's attempts to acquire the team through eminent domain.

II

Our review of this case extends to the question of whether the interpleader was proper. Allstate Insurance Co. v. McNeill, 382 F.2d 84 (4th Cir. 1967), cert. denied, 392 U.S. 931, 20 L. Ed. 2d 1390, 88 S. Ct. 2290 (1968). This question is an issue of law entitled to full appellate review.

We hold that the Colts have not successfully satisfied the pleading requirements of 28 U.S.C. § 1335. Despite the Colts' argument that it is unfair for the City of Indianapolis to lose the team by another city's condemnation suit, we find that the CIB and Baltimore do not have conflicting claims over a single stake. Additionally, even assuming the CIB and Baltimore have claims over the same stake, the Colts do not face a reasonable danger of multiple liability or vexatious, conflicting claims from the claimants, and thus interpleader is not justified here.

A

A basic jurisdictional requirement of statutory interpleader is that there be adverse claimants to a particular fund. See Libby, McNeill & Libby v. City National Bank, 592 F.2d 504 (9th Cir. 1978). The CIB and Baltimore are not claimants to the same stake. Baltimore seeks ownership of the Colts franchise, whereas the CIB has no claim to ownership of the franchise. Instead, the CIB has a lease with the Colts that requires the team to play its games in the Hoosier Dome and imposes other obligations to ensure the success of the enterprises.

The Colts argue in part that clause 11 of their lease with the CIB raises an interest in the CIB which conflicts with Baltimore's attempt to obtain the franchise. Clause 11 grants the CIB the first chance to find purchasers for the team if Irsay decides to sell his controlling interest. This right of first refusal is the CIB's contractural guarantee either that Irsay always will control the team or that the CIB will have the right to choose his successor. Yet this provision does not give the CIB a present right to buy the Colts, and thus does not raise a claim against the franchise conflicting with Baltimore's claim.*fn1

A successful eminent domain action obviously will defeat the CIB's interests in keeping the Colts in Indianapolis. Nevertheless, interpleader is not designed to aid every plaintiff confronted by one claim which, if successful, would defeat a second claim because the plaintiff has lost the ability to pay damages. Such an interpretation would twist interpleader into protection for defendants from loosing the opportunity to recover damages because the plaintiff's resources already have ...


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