Marlins Strike Out in Play for Home 'Court’ Advantage

The Miami Marlins’ attempt to litigate in federal court their contentious case with the city of Miami and Miami-Dade County regarding the team’s accounting of the payment owed to the city and county based on the stadium deal struck with the Marlins’ prior owner Jeffrey Loria ended in a double play. Judge Darrin Gayles remanded the action back to state court in Miami following briefing and oral argument by the parties on the issue of whether the Marlins could remove the action to federal court under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958 (9 U.S.C. Section 205) based on the team’s alleged British Virgin Island (B.V.I.) citizenship. Although Judge Gayles’ remand order rested on a technicality regarding the parties’ arbitration agreement, his order warned the Marlins against trying to remove the case to federal court again under the Convention if and when the arbitration technicality is resolved.

After noting that federal courts are courts of limited jurisdiction and that they should strictly construe removal statutes, resolving uncertainties in favor of remand, the court first addressed the timing issue related to arbitration. Prior to removal, the state court ruled that the arbitration agreement was inoperable “at [that] juncture,” because the Marlins had failed to provide detailed calculations from an independent accountant regarding their calculation of the payment owed to the city and county. The city and county pointed to this ruling as a declaration by the state court that the arbitration agreement was inoperable and the Marlins could not remove the action under the Convention because there was not an operable arbitration agreement in writing. Judge Gayles rejected that argument, but still found that removal to federal court based on the arbitration provision was premature because the city and county had not yet objected to the Marlins’ accountants’ calculations. The agreement between the city, county, and the Marlins provided for arbitration only after the city and county timely object to the calculations and after the parties attempt to resolve any differences during a 60-day negotiation period. Only after those 60 days of negotiations fail do the parties have the right to commence arbitration. Because that condition precedent to arbitration had not yet occurred, the court found that the arbitration provision—and thus any right to remove to federal court based on it—had not yet been triggered and removal was premature.