Mayor of Baltimore v. Baltimore Football Club Inc.
624 F.Supp. 278 (1986)
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Rule of Law:
Under Maryland law, a governmental entity cannot exercise its power of eminent domain to condemn property unless the property is within its territorial jurisdiction at the time of the taking, which occurs upon payment of just compensation, not upon the mere filing of a condemnation petition.
Facts:
- In late 1983 and early 1984, Robert Irsay, owner of the Baltimore Colts, was in negotiations with the City of Baltimore but also actively considering relocating the team to Indianapolis.
- On February 24, 1984, a bill was introduced in the Maryland Senate that would authorize the City of Baltimore to condemn professional sports franchises.
- On March 2, 1984, the National Football League (NFL) decided it would take no action to prevent a potential move by the Colts, effectively waiving its rule that required league approval for relocation.
- On the morning of March 28, 1984, after learning that the Maryland Senate had passed the condemnation legislation, Irsay immediately decided to move the team.
- Irsay instructed his general counsel to finalize a lease for the Hoosier Dome in Indianapolis and to immediately move all of the Colts' physical property from Maryland.
- During the night of March 28-29, 1984, moving vans loaded the team's office equipment, athletic gear, and other tangible assets from its Maryland facility.
- By the morning of March 29, 1984, the vans containing the team's property were on their way to Indianapolis.
- On March 29, Irsay officially notified the NFL Commissioner that he had relocated the Colts franchise to Indianapolis.
Procedural Posture:
- The Maryland legislature enacted a law authorizing the Mayor and City Council of Baltimore ('the City') to condemn sports franchises.
- The City filed a condemnation petition in the Circuit Court for Baltimore City (a state trial court) to acquire the Colts by eminent domain.
- The Circuit Court issued an injunction purporting to prohibit the Colts from relocating.
- The Colts removed the condemnation action from state court to the U.S. District Court for the District of Maryland, based on diversity jurisdiction.
- The City filed a motion to remand the case back to state court, which the District Court denied.
- The Colts filed a motion to dismiss, or in the alternative for summary judgment, which is the subject of this opinion.
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Issue:
Does a city have the power of eminent domain to condemn an intangible professional sports franchise that has relocated its principal place of business and the majority of its tangible assets outside the state's borders before the city has paid compensation for the property?
Opinions:
Majority - Judge Walter E. Black, Jr.
No. A city does not have the power to condemn an intangible professional sports franchise that is no longer within its territorial jurisdiction. The court's reasoning is twofold. First, under Maryland's constitution and statutes, a 'taking' of property via eminent domain does not legally occur until just compensation is paid or tendered to the owner. The mere filing of a condemnation petition does not grant the condemning authority any rights in the property or restrict the owner's freedom to use, move, or dispose of it. Because the City of Baltimore had not paid any compensation, no taking had occurred, and the Colts were free to move the franchise out of Maryland, placing it beyond the city's jurisdictional reach. Second, even if the relevant date for determining the property's location (situs) were the date the condemnation suit was filed (March 30, 1984), the franchise was no longer in Maryland. The court rejected the 'minimum contacts' standard for personal jurisdiction as inappropriate for eminent domain, which is an exclusive power. Applying factors from City of Oakland v. Oakland Raiders, the court found the franchise's situs was in Indianapolis based on its principal place of business, the location of its essential tangible property, and the owner's clear intent to relocate.
Analysis:
This decision significantly clarifies the jurisdictional limits of eminent domain, particularly as applied to mobile intangible property like a professional sports franchise. It establishes that a franchise can defeat a condemnation action by physically relocating its operations and assets across state lines before the government completes the legal act of 'taking' through payment. The ruling serves as a major impediment to municipalities attempting to use eminent domain as a tool to prevent sports teams from leaving, highlighting that a team's physical presence and business operations, not just historical ties, determine its legal location for condemnation purposes. This case set a precedent that a team's determined, swift action to move can effectively outrun a city's legal machinery.
