borislow motion

8/3/2019 Borislow Motion

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IN THE CIRCUIT COURT OF THEFIFTEENTH JUDICIAL CIRCUIT, INAND FOR PALM BEACH COUNTY,FLORIDACASE NO.: 11- _

FREEDOM SOCCER, LLC andMAGICT ALK SOCCER CLUB, LLC,Plaintiffs,

v.WOMEN'S SOCCER, LLC,

Defendant.

PLAINTIFFS' VERIFIED MOTION FOR TEMPORARY INJUNCTIONAND TO COMPEL CONTRACTUAL DISPUTE RESOLUTION PROCEDURES AND

ARBITRATIONPlaintiffs, Freedom Soccer, LLC and magicTalk Soccer Club, LLC, (collectively, the

"Team"), by and through their undersigned counsel and pursuant to Rule 1.610 of the FloridaRules of Civil Procedure, the Florida Arbitration Code, Florida Statutes 682.03, and theFederal Arbitration Act, 9 U.S.C. 1 et seq., respectfully move for an order (1) temporarilyenjoining defendant Women's Soccer, LLC (the "League"), its officers, agents, servants,employees, and attorneys, and those persons in active concert or participation with it, fromtaking any action in furtherance of the League's purported October 25,2011 termination of theTeam's membership in the League without first exhausting the parties' agreed dispute resolutionand arbitration process as set forth in Article XII of the Second Amended and Restated LimitedLiability Company Agreement of Women's Soccer, LLC (the "LLC Agreement"); (2) allowingthe Team to continue to participate in all League events and activities in which it would


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otherwise have had the right to participate had it not been purportedly terminated, includingwithout limitation the signing of players; (3) extending the League's exclusive player signing

period for 30 days; and (4) compelling the League's specific performance under the LLCAgreement's arbitration provision. In support of its motion, the Team states as follows:

PRELIMINARY STATEMENTThis action seeks to remedy an extraordinary and possibly unprecedented breach of

contract - a professional sports league, without following any of the parties' agreed disputeresolution procedures, has unilaterally attempted to terminate the ownership of a professionalsports franchise that, only nine months earlier, literally saved that league from extinction, andthen became the League's most popular drawing card. It is no coincidence that the League hasattempted to hijack South Florida's history-making professional women's soccer franchise just ata time when the sport of women's soccer has spiked in popularity, following last year's highlypublicized Women's World Cup, which will be followed in 2012 by the Summer Olympic

Games in London. The League now demonstrates its bad faith, and, for the second time in threemonths, and after having been sued for threatening to do so the first time, purports to haveterminated the Team in complete disregard of the parties' agreed multi-step dispute resolutionprocedure - which steps include a notice of dispute; a hearing before the League's Board ofGovernors; mediation; and arbitration - set forth in the League's own LLC Agreement andOperating Agreement, which require that these procedures be completed in advance of anypurported termination. Further, the purported termination comes just at the time that the Teamwas preparing to re-sign many ofthe star players that played for it in its inaugural season inSouth Florida, including seven members of the United States Women's National Team that wasthe darling of the 2011 Women's World Cup, including two of the most popular women's

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players in the world, National Team members Abby Wambach, the Team's player/coach in 2011,and Hope Solo, the goalkeeper who recently starred in television's popular prime time television

program, "Dancing With the Stars."Accordingly, an immediate injunction is needed to prevent the League from excluding

the Team from the League's player signing process, which began on November 9, 2011, and togive the Team the opportunity to re-sign its star players, as it intended to do, and to prevent theLeague from causing further irreparable harm to the Team by taking any action in furtherance ofits improper termination, pending the prompt completion of all four steps of the disputeresolution process to which that the parties contractually agreed. Otherwise, the Team'smembership interest in the League, including the immeasurable goodwill associated therewith,will be totally destroyed. Absent such interim relief, the dispute resolution process that theparties agreed to will be rendered a nullity, and South Florida and its millions of soccer fans willbe deprived of the opportunity to watch their local professional soccer team, which includesseveral national role models and heroes, just as the Team and its players have become integratedinto the fabric of the South Florida community. Further, the Team had every intention of re-signing its most popular players, many of which are considered among the world's best, for theupcoming 2012 season.

This lawsuit and request for specific performance of the parties' dispute resolutionprocedures, and for immediate injunctive relief to prevent further irreparable damage to thegoodwill associated with the Team, arises out of the League's purported October 25,2011termination of the Team, without following any of the parties' agreed dispute resolutionprocedures, and follows a lawsuit filed by the Team, the operators of Boca Raton's "magicJack"professional women's soccer franchise, against the League (the Women's Professional Soccer

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League) in August 2011, for threatening to terminate the Team during the middle of the 2011season, after which the League retreated from its reckless position and agreed not to terminate

the Team. Indeed, it was only eleven months ago that the Team purchased the failingWashington Freedom franchise, and in doing so saved the League and the sport of women'sprofessional soccer in this country, as otherwise the League would have had too few teams, andwould not have been sanctioned by the United States Soccer Federation, the sport's governingbody in this country. In this short period of time, following the expenditure of substantialmonetary and other resources, the Team turned a once-failing enterprise into a successfulfranchise, and provided a home for some of the most popular players from the United StatesWomen's National Team - the runner-up in the highly publicized 2011 Women's World Cup.

Now that the Team has successfully completed the 2011 season, and the sport ofwomen's soccer is at its zenith in popularity - on the heels of the 2011 Women's World Cup,and with the 2012 Summer Olympics right around the corner - the League is attempting toexploit the fact that it is now the off-season, and hopes to accomplish an unlawful terminationduring the off-season, allowing the other teams to sign the Team's best players, to theirsignificant advantage. In furtherance of this scheme, this time the League has purported toterminate the Team's membership in the League for unspecified reasons, ignoring the parties'clear agreement to complete all contractual dispute resolution procedures prior to effectuatingany termination, in an obvious attempt to head off preemptive litigation. The League's purportedtermination runs contrary to the parties' express agreement to arbitrate such disputes promptly,that is, before any purported termination takes effect, the value of the Team's franchise isirreparably harmed, and its assets wrongfully appropriated. If the League is permitted toeffectuate its unilateral termination, obviously timed to exclude the Team from the player signing

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process, the Team will not be able to sign any players for the upcoming 2012 season, and willtherefore be defacto excluded from participation in the League, even if it prevails in the agreed

dispute resolution procedures.As the plain language of the LLC Agreement (attached hereto as Exhibit A) shows, the

League agreed, in Section 12.01 (the "Arbitration Provision"), to "promptly" resolve all disputeswith any team in good faith using a confidential four-step arbitration process: (1) DisputeNotice; (2) hearing before the Board of Governors; (3) mediation; and (4) arbitration, suchprocedures applying to any attempted termination of a franchise under the League's OperatingAgreement. There is no question that the League is aware that such procedures exist, becausewhen it threatened to terminate the Team the first time, it affirmatively commenced the disputeresolution process by sending the Team a Dispute Notice, and acknowledged that the Team wasentitled to a hearing before the Board of Governors (even though it claimed the Team waivedthat hearing, which it did not), and, thereafter, mediation and arbitration if it contested theLeague's claimed right to terminate, the only issue being whether those procedures must beconcluded before any termination takes effect. Indeed, when the Team sued in this Court inAugust 20llfor an injunction against terminating the Team in the middle of the 2011 seasonbefore completing all four steps of the dispute resolution process, as it was threatening to do, theLeague backed off, stating publicly and in Court filings that it did not intend to terminate theTeam during the season, whereupon the Team dismissed the suit without prejudice, and the priordispute regarding the 2011 season appeared to be resolved.

Now that the League has a new CEO (the prior CEO left at the end of the 2011 season),this new CEO, together with the League's outside general counsel, who orchestrated the previoustermination attempt, have hatched yet another scheme to exclude the Team from the League.

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This time the League has chosen to refrain from communicating with the Team about anydisputes that might exist, and has failed to follow any of the required dispute resolution

procedures, including providing the Team with a Notice of Dispute and a hearing before theBoard of Governors. In furtherance of this plan, on October 25,2011, and, not coincidentally,just as the Team was preparing to re-sign many of its top players for the 2012 season, the Leaguesimply issued a Notice of Termination. The League did not explain the basis for the termination,advised the Team it could no longer operate, and thereby attempted to deny the Team theopportunity to rush into Court to prevent the League from terminating the franchise.

On November 8, 2011, the Team asked the League to identify the basis for the League'spurported termination of the Team, and the reasons why the League gave the Team no priornotice, and no opportunity to be heard. Predictably, realizing it had no good explanation for whyit terminated the Team without first providing a Notice of Dispute and Board of Governorshearing - the reason being the League wanted to terminate the Team before the Team could getinto Court - on November 10,2011, the League took the position that this termination is merelya continuation of the earlier dispute. The League's position is therefore that the Team hasalready received a Dispute Notice, was afforded the opportunity to attend a Board of Governorshearing, and purportedly waived that opportunity. However, even here the League could not getit right, unwittingly acknowledging that the current termination arises out of a new disputebetween the Team and League, claiming the termination had something - exactly what is notspecified - to do with the Team's refusal to agree to certain demands the League wasattempting to impose upon it for the upcoming 2012 season. Accordingly, without realizing it,the League has conceded that the Team was indeed entitled to all four steps of the disputeresolution process, as the parties are now engaged in an new dispute, and in any case, as the

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League knows full well from the prior lawsuit, it has always been the Team's position that it wasentitled to exhaust all dispute resolution steps before any termination could take effect.

Accordingly, this flagrant disregard of the explicit terms of the LLC Agreement wouldirreparably damage the Team and violates the explicit terms of the parties' contract. Therefore,the League must be enjoined from effectuating the unauthorized termination, the Team must beallowed to participate in all League events, including the signing of players, the League'sexclusive player signing period should be extended by one month, and the League must becompelled to follow all dispute resolution procedures before any purported termination becomeseffective.

FACTSI. VERIFIED FACTS

The Team1. Plaintiff, Freedom Soccer LLC ("Freedom Soccer"), is a women's professional

soccer organization and one of six members of the Defendant Women's Soccer, LLC, alsoknown as the Women's Professional Soccer League, the highest level of women's soccer in theUnited States. Freedom Soccer operates a women's professional soccer team based in BocaRaton, Florida, playing under the name "magicJack." As is more fully described below,magicJack home games are played at Florida Atlantic University's soccer facilities. In 2011,some of the world's best female soccer players played for magicJack, including eight membersof the United States Women's National Team that finished second in the 2011 FIFA Women'sWorld Cup in Germany, and that will compete in the 2012 Summer Olympic Games in London.Such players included two of the biggest stars of the World Cup competition, Hope Solo, theU.S. goalkeeper, considered among the top goalkeepers in the world, and Abby Wambach, the

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leading scorer for the U.S. National Team, and, in 2011, the player/coach ofmagicJack. Otherworld class players that played for magicJack in 2011 included Shannon Boxx, Christie

Rampone, Jillian Loyden, Lindsay Tarplay, Megan Rapinoe, and Becky Sauerbrunn.2. Less than one year ago, Plaintiff magicTalk Soccer Club, LLC ("MagicTalk")

purchased a majority interest in Freedom Soccer and its franchise, saved the League andwomen's professional soccer in America from extinction, and turned a once-failing organizationinto a successful and growing sports franchise in South Florida. In addition, the Team formed aadvantageous partnership with the State of Florida and Florida Atlantic University, and becamethe most talked-about professional sports franchise in South Florida during its run to the WPSplayoffs following the conclusion of the World Cup in July and August 2011.

3. magicJack VocalTec Ltd., the ultimate parent of the majority owner of the Team,is led by its CEO, Dan Borislow. Mr. Borislow is an accomplished businessman and theinventor of the magic.lack" device, a revolutionary product that uses Voice over Internet Protocoltechnology to allow customers to talk on a standard telephone using only their magicJack deviceand a broadband Internet connection, without a telephone line. Since the device's launch in2008, the highly successful company has sold over 7 million magicJack devices, leading to widerecognition of the "magic.lack" brand name. After purchasing the Team, Freedom Soccerchanged the Team's name to "magic.lack," both to promote their affiliated companies andincrease the visibility and good will associated with these successful business ventures.

4. At the end of2010, in only the League's second season of operation, the League'sflagship franchise - the Washington Freedom - was on the brink of collapse. Then based inWashington, D.C., the Washington Freedom had been unprofitable, and its owner did not wish tocontinue to maintain the team as part of the League. Three other League franchises had already

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folded since the League's inception in 2009, the Los Angeles Sol, the St. Louis Athletica, and theFC Gold Pride, and a fourth team, the Chicago Red Stars, was on the brink of folding. Without

at least six teams in the League, the minimum number of teams the U.S. Soccer Federationwould have allowed in 2011, the League would have been forced to close operations.

The Impending Collapse of the League5. During the period prior to purchase, the League and its franchises were in serious

financial trouble. In order to avoid a fate similar to other failed franchises, MagicTalk madeclear to the owners of the Washington Freedom, to other League Members/Owners, and toLeague officials, that if it were to purchase the Team, the franchise would be run in aneconomically sound and viable fashion. To that end, MagicTalk disclosed its intention to cut thefranchise's marketing budget to more reasonable levels, while preserving the ability to pay thebest players in the league the most money and provide the best benefits, thereby avoidingincurring substantial, unproductive expenses such as had earlier caused the League and itsowners to lose significant amounts of money. In particular, the Team's management believedthat the best way to market and create interest in the Team was to sign the country's best playersto well-paying contracts and put a great product on the field, even with a substantial cutback inmarketing spending. The strategy worked, as the Team was able to sign the country's mostpopular players from the U.S. Women's National Team, and the fans responded, particularlyafter the National Team's successful run in the World Cup.

6. The prospect of the League's demise, just prior to the 2011 Women's World Cupin Germany in June and July 2011, would have been an enormous embarrassment for women'ssoccer and for soccer in the United States generally. Motivated by his goal to see women'sprofessional soccer survive in the United States, and his desire to increase the visibility of the

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already well-known and highly regarded "magicJack" brand, Mr. Borislow and his companypurchased a majority of the Washington Freedom franchise, through the newly formed entity,

MagicTalk. This acquisition, which ensured the continued existence of the franchise, saved theLeague from terminating its operations and allowed women's professional soccer in the UnitedStates to continue. See "MagicJack Player-coach Wambach returns to South Florida" attachedhereto as Exhibit C. The Team ensured that its players, including the eight members of the U.S.National Team, were fairly compensated. Now, the League and the other teams are trying tosign all of them to lower salaries, and save substantial expense on player salaries overall.

The Agreements Between the Team and the League7. As an existing franchise in the League, Freedom Soccer was party to two league-

wide agreements relating to its membership in the League and its operations - the LLCAgreement and the Operating Agreement (see Exhibits A and B, respectively). After theacquisition in November 2010, the Team proceeded to sign many of the best players in theworld, such as United States National Team members Shannon Boxx, Christie Rampone, HopeSolo, lillian Loyden, and Lindsay Tarplay, some of whom had previously played for Leagueteams that had ceased operations after the 2010 season. The Team also assumed the existingcontracts of National Team members Becky Sauerbrunn and Abby Wambach.

8. With only three months remaining between the date of acquisition and the start ofthe 2011 season, the Team moved its operations to South Florida and instituted cost-savingmeasures that would allow the Team to get through its initial season. At the same time, theTeam ensured that its players would receive the best compensation and housing. In March 2011,solidifying its relationship with the South Florida community, the Team signed an agreementwith Florida Atlantic University to play magicJack's home games at the University's soccer

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stadium for the 2011 season. This venue, though smaller in capacity than desired by the League,was chosen for its excellent natural grass surface, and in the anticipation that in the first season

the attendance numbers would not support a larger venue. The Team, however, had everyintention of moving to a larger venue, most likely the just-opened, 30,000 seat, state-of-the-artFlorida Atlantic University football stadium, if it could build attendance and goodwill in thecommunity, which it has. In the meantime, the Team had intended to continue to donate all gateand concession proceeds to Florida Atlantic University in the upcoming 2012 season.

Disputes Between the Team and the League9. Immediately following the acquisition, however, the League began to take issue

with several of the Team's well-intentioned changes, including its stadium selection and certainpersonnel decisions, claiming these were violations of League operating rules. In particular,there were sharp disputes between the Team and the League's then-CEO, Anne-Marie Eileraas,and its general counsel, Pamela Fulmer, Esq., including disputes concerning the unnecessaryand excessive expense of maintaining the League's central offices. Itquickly became clear thatthe League and the Team were in increasing conflict regarding the manner in which the Teamwas conducting its business operations, despite the fact that the Team had made its businessapproach crystal clear to the League prior to acquiring the Team. In addition, the League beganto penalize the Team and its operations with unilaterally imposed unjustified fines andsuspensions during this period. Ultimately, this caused great harm to the Team and its chancesof success in the 2011 season.

10. The number of complaints and penalties from the League continued to increaseduring June and July 2011, when many of the Team's players were participating in the Women'sWorld Cup in Germany. On June 14,2011, the Team received from Ms. Fulmer a "Notice of

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Hearing" indicating that the League was considering terminating the magicJack franchise, andintended to conduct a hearing before the Board of Governors before doing so, as required under

Article 13.1 of the LLC Agreement.11. This Notice of Hearing was sent at approximately the same time that the League's

then-CEO, Ms. Eileraas, candidly admitted in the press that the League was attempting to selladditional franchises in the League due to the renewed interest in Women's soccer as the resultof the excitement surrounding the Women's World Cup. To date, however, such franchises havenot materialized and with the termination of the team, the League is once again down to fiveteams, which is below the minimum number required by the U.S. Soccer Federation in 2011.

The Team's Enormous Success12. In July 2011, the United States National Team advanced to the finals of the

Women's World Cup, suffering a heartbreaking loss to Japan in penalty kicks. Several ofmagicJack's star players played significant roles in the United States National Team's run to thefinal. During that time, interest in women's soccer skyrocketed, and magicJack stars AbbyWambach and Hope Solo became household names.

13. The United States Women's National Team's success in the World Cup garneredinternational attention, and immediately increased South Florida's interest in the magicJackfranchise. Instantly, the Team's ticket offices were deluged with requests from fans and fromyouth soccer clubs in South Florida. The Team increased its stadium's capacity by 1,500 seats toaccommodate a sell-out crowd of3,500 in its first home game following the World Cup. Furthercontributing to its standing and goodwill among the South Florida community, the Teamannounced its intention to pledge proceeds from ticket sales and concessions to Florida AtlanticUniversity. This pledge was in addition to the Team's donation of hundreds of thousands of

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dollars to Florida Atlantic University - donations which the Team plans to continue to make ifit stays in South Florida.

14. Ticket sales for magicJack's away games also skyrocketed, benefiting the Leagueand the League's other members. The Team's first game after the World Cup was played inRochester, New York against the Western New York Flash, and set a league attendance record at15,404 people. All of the Team's remaining 2011 games attracted sell-out crowds.

15. Indeed, the Team's first home playoff game, played on August 17,2011 at theFlorida Atlantic University soccer field, not only attracted a sell-out crowd, but was the firsthome televised match that the League allowed the Team to broadcast on the Fox Soccer Channel,and this only because it was contractually committed to do so. Previously, Ms. Eileraas and Ms.Fulmer refused to allow any of the Team's home games to be televised, despite the tremendousinterest in the Team, and despite the fact that all other teams had home matches that weretelevised. The broadcast of the Team's playoff game was a success. The Team's subsequentplayoff game, played at the home field of another team, was also televised and widely publicizedby the League, and achieved high ratings as well.

The League Has Acted in Bad Faith16. However, notwithstanding the Team's significant contributions to the success of

the League, at the very time the Team's players and Mr. Borislow were attending the World Cupin Germany, the League continued its campaign of complaints and threats regarding theoperation of the Team. In early July 2011, the League sent two letters to the Team claiming thatit had waived its contractual right to a hearing before the League regarding the "terminationissues" raised by the League in June. Both letters, however, acknowledged the applicability of

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the dispute resolution procedure set forth in the operative League-wide agreements. Copies ofthe League's July 5 and 7, 2011 letters are attached as Exhibits D and E.

17. During this period, the Team repeatedly attempted to contact the League in aneffort to discuss its relationship with the League and agree on a set of operating procedures forthe remainder of the 2011 season. All such attempts having failed, the Team retained counsel.On July 21, 2011, the Team's counsel sent a letter to the League requesting that in accordancewith the required dispute resolution process, a pre-termination hearing take place in September2011, after the season had ended, before the Board of Governors took any action with respect toany "termination issues" and that the League not take any steps in furtherance of terminationuntil all dispute resolution procedures provided for in the League Operating Agreement,including mediation and arbitration, were exhausted. Counsel also requested that the partiesdiscuss an interim set of guidelines under which the Team could proceed to operate for theremainder of the season. By letter dated July 27,2011, the League responded to the Teams'counsel, denying the Team's request for a Board of Governors' hearing, claiming that thehearing date the Team requested was too late, and therefore, once again, that the Team had"waived" its right to such a hearing, all the while failing to address the Team's request for a"stay" of any decision to terminate while the parties engaged in the contracted-for disputeresolution procedures, or for the opportunity to discuss interim operating guidelines.

18. Thereafter, in one last effort to stave off the drastic impact of immediate unilateraltermination, counsel for the Team wrote to the League again on July 28,2011, (1) once againrequesting a pre-termination Board of Governors hearing, this time on August 30 or 31, the datesproposed earlier by the League for "good faith negotiation" of the parties' disputes, (2) advisingthe League that since it continued to ignore the Team's request for an agreed "stay" of

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termination pending arbitration the Team had no choice but to seek injunctive relief in Court, and(3) again requesting the opportunity to discuss a set of interim operating guidelines.

The August 2011 Lawsuit19. Having received no substantive response to its counsel's July 28,2011 letter, the

Team was left with no choice but to seek temporary injunctive relief in this Court to prevent theLeague from terminating the Team in disregard of the multi-step dispute resolution procedurerequired under the operative agreements. This prior action, filed on August 2, 2011, under CaseNo. 11-11504 AI, sought an order requiring the League, before issuing any purported terminationnotice, to participate in and complete in good faith, all four dispute resolution steps provided forin the LLC Agreement, including mediation and arbitration, and in the meantime take no furthersteps to terminate the Team while the 2011 season was still going on.

20. Tellingly, after the Team filed that action, the League, realizing it had no basis forwhat it was planning to do, and recognizing that it would be the subject of negative publicity if ittried to do so, immediately reversed course just as its showcase event, the WPS playoffs, wasstarting up. Instead of defending the suit and adhering to the accelerated schedule set by theCourt, the League backed off and immediately requested a two week extension of time torespond to the Team's Petition, and then publicly, and in Court filings, announced that it reallyhad no intention to terminate the Team, and that if anyone had jumped the gun, it was the Teamby commencing legal action.

21. Satisfied that the League was not going to attempt to terminate the Team duringthe 2011 season, and believing its disputes with the League were behind it, the Team redoubledits efforts to complete the 2011 season in the most positive possible way, and dismissed thelawsuit without prejudice.

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22. After the Team's successful run through the 2011 WPS playoffs, and consistentwith its understanding that these prior disputes were behind it, the Team heard nothing further

from the League in the month of September about any such disputes, and began looking ahead tothe 2012 season. However, it quickly came to light that the League itself was in turmoil, as Ms.Eileraas resigned from her position as League CEO in September 2011 and was replaced by anew CEO, Jennifer O'Sullivan. Following Ms. O'Sullivan's appointment in late September2011, once again, the Team heard nothing from her, or any other representative of the League,about any disputes the League may have had with the Team; indeed, consistent with the Team'sunderstanding that all disputes with the League were behind it, Ms. Sullivan even indicated inthe press, when asked about the League's prior disputes with the Team, that she was lookingforward to the Team's continued membership and participation in the League. See articlesattached hereto as Exhibit F.

The League's Continuing Course of Unlawful Conduct

23. Then, in October 2011, the Team began to approach many of the star players thathad played for the Team in 2011, as it was the Team's plan once again to offer them attractiveplayer salaries and sign them for the 2012 season. Notably, under League rules, during theperiod prior to November 9, 2011, the team the player had played for in the previous season hadthe exclusive right to sign that player. Inexplicably, however, while the Team maintained goodrelations with all of its players, and made clear to them it wanted to sign them, none would sign,indicating they still had concerns that the Team would not be playing in the League in 2012.

24. The Team has subsequently learned that in October 2011, the League was incontact with representatives of the Player's Union, and advised the Union that the Team's statusfor the 2012 season was in doubt, even though the League never gave the Team any such

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indication during this period. As a result, the Team has been unable to re-sign any of its starplayers from 2011 during the exclusive signing period, which ended on November 9, 2011.

25. During the month of October 2011, prior to being terminated by the League, theTeam was approached by other team owners about player signings for the 2012 season, and wasasked to agree to pay its players lower salaries than the Team was intending to pay, so that allteams would keep costs down for the 2012 season. Contrary to other teams' effort to deny theplayers reasonable compensation, the Team indicated that it would not lower salaries and wouldcontinue to pay its players top salaries.

26. Subsequently, on or about September 13,2011, without notice or warning, theTeam received an invoice from the League for over $2.5 million for alleged "damages" relatingto the 2011 season, and was informed by Ms. O'Sullivan and Ms. Fulmer that ifit did notimmediately remit full payment to the League, it would not be allowed to participate in the 2012season. The Team declined to pay this invoice. A copy of the invoice is attached as Exhibit G.

27. Thereafter, on October 25,2011, without ever having received a Notice ofDispute, as required under the LLC Agreement, and without having been afforded a hearingbefore the Board of Governors, as is also required, the Team received a Notice of Terminationfrom the League, signed by Ms. O'Sullivan and addressed to "Daniel Borislow, Governor",indicating that the Board of Governors had met and decided to terminate the Team's franchise.The letter further states: "Pursuant to Section 13.3(a) of the [League's] Operating Agreement,effective immediately, your membership interest in the League automatically transfers to theLeague upon termination and you no longer have the right to operate any Team in the League."

28. The Team has subsequently learned that the timing of the League's termination ofthe Team's membership in the League is not a coincidence. As noted above, under the League's

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Agreement with the Player's Union, the exclusive period for the teams to re-sign their ownplayers to player contracts for the upcoming 2012 season ended on November 9, 2011. The

Team has further learned that in recent weeks, even before the Team was terminated, the Leaguediscussed with the Player's Union a mechanism that would allow the Team's players to besigned by other teams for the upcoming 2012 season, or otherwise allocated to other teams.

29. The Team is also informed that in addition to the League's new CEO, Ms.O'Sullivan, its outside general counsel, Ms. Fulmer, was directly involved in the decision toterminate the Team's membership in the League, and participated in the October 25,2011meeting of the Board of Governors referred to in the termination letter. The Team is furtherinformed that Ms. Fulmer was questioned by one of the Governors as to how the League mightjustify its decision to terminate the Team's membership interest without following any of theprescribed dispute resolution procedures, particularly since the Team had sued the League oncebefore for trying to do so, to which Ms. Fulmer responded that the League might, as analternative, consider initiating its own arbitration proceeding against the Team as a preemptivemeasure.

Post-Termination Events -The League Confirms This is a New Dispute Between the Parties

30. On November 3, 2011, and subsequently on November 7,2011, in anticipation ofcommencing this suit, the Team requested that the League extend the exclusive player signingperiod until December 2011, so that the Team could participate in the exclusive player signingprocess before other teams in the League were allowed to approach and sign players from theTeam's 2011 roster. The Team received no response to these requests.

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31. On November 8,2011, the Team's counsel wrote a letter to the Leaguedemanding that the League state the grounds for the League's purported October 25, 2011

termination. The Team also demanded that the League indicate the reasons why it failed toprovide the Team a Dispute Notice and a hearing before the Board of Governors before theGovernors even considered the issue of termination of the Team, as the parties' agreementsrequire. A copy of the Team's counsel's November 8, 2011 letter is attached as Exhibit H.

32. On November 10, 2011, Ms. Fulmer responded to the Team's counsel, stating thatthe League was not required to provide the Team with a Dispute Notice because, in someunspecified manner, the current dispute somehow encompassed the parties' prior dispute relatingto the Team's alleged wrongful conduct during the 2011 season. However, Ms. Fulmer alsostated that there were other grounds for the current termination, including "[the Team's] refusalto commit to adhering to League rules and the League's LLC and Operating Agreements goingforward", and "the refusal of [the Team] to agree going forward that [the] [T]eam would abideby League rules." This is a clear acknowledgment on the League's part that the instanttermination related to a new "dispute" between the Team and the League, namely the Team'spurported failure to agree to comply with certain unspecified League rules in the upcoming 2012season. A copy of Ms. Fulmer' s November 10, 2011 letter is attached as Exhibit 1 .

33. The Team notes here that, aside from the fact that it never received any noticefrom the League whatsoever as to the basis or details of this new dispute, in fact it has never hadany discussions with the League at all about the manner in which it intended to conduct itsoperations in the upcoming season. Certainly, the Team had a clear contractual right to be put onnotice as the particulars of the League's position, and to be heard at a Board of Governors

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meeting as to this new dispute that relates to the 2012 season, not the 2011 season, before theGovernors even had the contractual right to consider terminating the Team.

34. Ms. Fulmer's letter also purported to respond to the Team's request for a Board ofGovernors hearing by claiming that since this new dispute was actually an extension of the priordispute, the Team had "waived" its right to a hearing by refusing to appear on the dates allegedlyoffered by the League for a hearing, June 14,2011, July 7,2011 and July 19,2011. Aside fromthe fact that had the Team attended a hearing on any of those dates, the issue of its compliancewith League rules for the upcoming 2012 season would not have arisen, nowhere does Ms.Fulmer's letter explain why, since the Team had proposed dates for such a hearing in bothAugust and September 2011, the League had not proposed a hearing date in October 2011,before terminating the Team. The reason for this, of course, is obvious - the League did notwant the Team to know it was considering any such termination, as this would have allowed thisTeam to seek injunctive relief in Court before the Board of Governors were able to vote on theTeam's termination.

35. Ms. Fulmer's November 10,2011 letter also purports to respond to the Team'sNovember 7, 2011 request for an extension of the exclusive player signing period. Calling suchrequest "nonsensical," Ms. Fulmer merely states that upon the Team's termination, itsmembership interest automatically transferred to the League, and, therefore, the Team no longerhad any standing to participate in signing any players, or in any other League activities - which,of course, was exactly the reason for the League's covert termination of the Team in the firstplace.

36. At the same time that the League has terminated the Team without firstexhausting the parties' agreed dispute resolution process, it has also absconded with the Team's

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$125,000 contribution to the League's performance bond, which it is required to post with theUnited States Soccer Federation.

37. Notwithstanding its termination, the Team continues to be contacted by several ofits former players, who have indicated that they would like to play for the Team in the 2012season, and would have considered signing with the Team prior to its termination if they had notbeen informed, during the exclusive player signing period, that the Team's membership in theLeague for 2012 was in doubt.

38. In any event, one thing is certain, and that is that if the relief requested herein isnot granted, the Team will not be able to sign any players for the upcoming 2012 season, andwill therefore be unable to field a team even if, after the dispute resolution process is completed,it is determined that the termination was improper. Accordingly, as part of the relief it seekshere, the Team requests not only that it be allowed to participate in the player signing process,but also, since its ability to re-sign its own players during the exclusive signing period has beenstripped away, that this exclusive signing period be extended for 30 days. Otherwise, the Leagueand its owners will have succeeded in their plan to use the Team's players to boost their ownattendance and the increase the value of their franchises, while at the same time keeping playersalaries down.

39. As a consequence, if the League is allowed to effectuate its purported terminationprior to exhausting the dispute resolution procedures, that contractually-mandated process will berendered meaningless. In that case, the Team and its ownership will have lost not only theTeam's economic value, but the goodwill associated with the Team, the magicJack brand name,and the reputation the Team has built and is continuing to build locally, nationally andinternationally - indeed, the Team has received an invitation to playa series of lucrative pre-

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season international matches against professional teams in Japan. The resulting damage to theTeam and the magicJack brand if the Team loses its franchise immediately - and without an

opportunity to defend itself in a confidential, efficient and unbiased arbitral forum - would beincalculable, even if the arbitrators ultimately decide that the termination was improper.

40. The irreparable harm caused by the League's improper termination extends wellbeyond the Team and its owners, and include, for example, to the Florida state university towhich the Team has pledged its gate receipts and to the fans who attend Team games. Indeed,representative of Florida Atlantic University have come forward publicly to support the Teamand its efforts to establish women's professional soccer in South Florida. See Exhibit J.

41. To be clear, the Team does not request that the Court resolve any disputesbetween the League and the Team. As agreed by the parties, that will be dealt with in the disputeresolution process. The Team seeks only to invoke this process to which the League and itsmembers are contractually bound, prior to the Team being unilaterally stripped of its goodwill,assets and value which cannot be calculated in money damages and which would be summarilydestroyed. The Court should not allow the League to take such unilateral action prior to thecompletion of all four steps of the dispute resolution process.II. THE PARTIES' AGREEMENTS

The dispute resolution provision in the parties' LLC Agreement, (Section 12.01)("Resolution of Disputes Between Members or Between the League and a Member"), beginswith a general statement of principles for resolving disputes:

The parties shall attempt in good faith to resolve any controversy,dispute or claim arising out of or relating to this Agreement ...between (i) any Member [(e.g., the Team)] ... ,on the one hand,and (ii) ... the League or any employee, officer, or Governor ofthe League, on the other (collectively, a "Dispute"), promptly by

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negotiation between officers or employees who have authority tosettle the Dispute.

LLC Agreement 12.01(a) (emphasis added). The Provision then sets forth a mandatory dispute

resolution process of up to four steps. First, "[ajny party may give any other party a written notice (a "Dispute Notice") setting

forth with reasonable specificity the nature of the Dispute and the identity of such firstparty's representatives who shall attend and participate in the meeting at which suchparties shall attempt to settle the Dispute." Id.

Second, [fJollowing the receipt of a Dispute Notice, the representatives of such partiesshall meet as soon as is practicable at a mutually acceptable time and place to negotiatein good faith a settlement of the Dispute, and shall meet thereafter as they deemreasonably necessary." Id. (emphasis added). These meetings "shall be confidential andshall be treated as compromise and settlement negotiations." Id. Further, should thedispute concern what the League considers to be a terminable offense on the Team's part,Article 13.1(c) of the Operating Agreement states that "[pjrior to any decision by theBoard of Governors to terminate this Agreement [ j, the Board of Governors shallprovide the Member the opportunity for a hearing conducted by and in accordancewith the procedures to be adopted by the Board of Governors." Operating Agreement, 13.1(c) (emphasis added).

Third, if negotiations should fail, "the parties to the Dispute shall attempt in good faith toresolve any such Dispute promptly by confidential mediation before resorting toarbitration." Id. 12.01(b).

Fourth, should a dispute persist 15 days after mediation "then any party to the Disputemay initiate arbitration in accordance with the Commercial Arbitration Rules (the "AAA

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Rules") of the American Arbitration Association ("AAA") and such right to arbitrationas set forth herein shall be the exclusive remedy for the resolution of disputes arising

hereunder." Id. 12.01(c) (emphasis added). The Arbitration Provision and subsequentprovisions of Article XII provide further details regarding the location of the arbitration,composition of the panel, confidentiality of the proceedings, and limited appeal rights ofthe panel's decision. Id. 12.01(c); 12.04; 12.05.

The parties' clear intention, therefore, was to resolve all disputes between the League and aLeague member with speed and confidentially, and certainly before the consequences of oneparty's actions rendered the whole dispute resolution process meaningless. See City ofHomestead v . Johnson, 760 So. 2d 80, 84 (Fla. 2000) (courts "read provisions of a contractharmoniously in order to give effect to all portions thereof'); Herian v . Southeast Bank, N.A.,564 So. 2d 213 (Fla. 4th DCA 1990) ("An interpretation of a contract which gives a reasonable,lawful and effective meaning to all of the terms is preferred to an interpretation which leaves apart unreasonable, unlawful or of no effect. ").

There is also no doubt that the ultimate penalty a League member can suffer istermination from the League. As Section 13.3(a) of the Operating Agreement (Article 13 beingthe "Termination" section) states:

Effect of Termination by the League. In the event of a terminationpursuant to Section 13.l(a) or (hl, (i) the Membership Interest ofthe Member shall be deemed to be automatically transferred to theLeague and the Member automatically shall cease to be a Memberof the League, (ii) the Member shall no longer have the right tooperate any Team in the League, ... and (iv) the League shall havethe right to operate the Team.

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Accordingly, the parties have agreed that this ultimate penalty is directly subject to the four stepdispute resolution process that applies to all disputes between the parties. As stated in Section

13.3(d)ofthe Operating Agreement:Decisions Subject to Arbitration. Any decision by the Board ofGovernors to terminate this Agreement shall be subject toarbitration in accordance with the procedures described in ArticleXII of the LLC Agreement.

Rather than follow its own carefully crafted and negotiated dispute resolution procedures,however, the League has elected to disregard Sections 13.1(c) and 13.3(a) of the Operating

Agreement, and the dispute resolution process set out in Section 12.01 of the LLC Agreement,unilaterally voiding the entire dispute resolution process, even though it was aware that the Teamsought to invoke its rights thereunder in this Court once before, thereby inflicting irreparableharm, and summarily dispensing the ultimate penalty on the Team. Indeed, this time, in an effortto effectuate a termination before the Team could get into Court, as it was able to do the last timethe parties had a dispute, the League decided to deny the Team any of the steps that would haveput it on notice that a termination was even being considered, and instead conduct its terminationvote in secret.

If the Court does not restrain the League's improper termination and compel specificperformance of the contractual dispute resolution procedures, the League will be able to bypassthe entire agreed-upon dispute resolution process, destroy the value of the Team's membership

interest, and render any subsequent process meaningless. Indeed, immediate and urgent relief isneeded so that the Team may fairly participate in the player signing process, and otherwiseprepare for the 2012 season. If such relief is not granted, all of the Team's players will be signedto other teams, and there will be no Team left. The law requires an immediate injunction and the

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League's prompt compliance with the agreed-upon dispute resolution process.ARGUMENT

The Team seeks an order compelling the League to specifically engage in all four steps ofthe dispute resolution process, as well as a temporary injunction enjoining the League fromtaking any action in furtherance of its purported termination of the Team until such process canbe completed. The Team is entitled to the requested relief because the dispute resolutionprovision states on its face that the four-step process is "the [parties'] exclusive remedy for theresolution of disputes." The parties thus never intended to give the League the option ofunilaterally and summarily terminating the Team in the event of a dispute, especially here wherethe Team does not even know what the dispute is about, and was never given any opportunity toresolve it.I. THE COURT SHOULD GRANT THE TEAM A TEMPORARY INJUNCTION

A temporary injunction should issue if a party (1) "'will suffer irreparable harm unlessthe status quo is maintained," (2) "'has no adequate remedy at law," (3) "'has a clear legal rightto the relief granted, and (4) a temporary injunction will serve the public interest."? Wexler v.Lepore, 878 So. 2d 1276, 1281 (Fla. 4th DCA 2004) (citations omitted). "The general functionof a temporary injunction is to preserve the status quo until full relief can be granted in a final"procedure, whether that be in Court, or, as here, in arbitration. Morgan v. Herff Jones, Inc., 883So. 2d 309,313 (Fla. 2d DCA 2004) (citation omitted). Its purpose is not to resolve disputes butrather to prevent irreparable harm. Michele Pommier Models, Inc. v . Diel, 886 So. 2d 993, 995-96 (Fla. 3d DCA 2004).

"The decision to grant or deny injunctive relief rests largely in the sound judicialdiscretion of the trial court." Davis v. Joyner, 409 So. 2d 1193, 1194 (Fla. 4th DCA 1982); Groff

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G.MC Trucks, Inc. v.Driggers, 101 So. 2d 58, 60 (Fla. 1st DCA 1958) (citations omitted); seeWillis v . Hathaway, 117 So. 89, 93 (Fla. 1928) (citation omitted). A court may generally

"exercise broad discretion in granting, denying, dissolving or modifying injunctions .... " Wisev. Schmidek, 649 So. 2d 336,337 (Fla. 3d DCA 1995) (citation omitted).

A. The Team Has Suffered and Will Continue to Suffer Irreparable HarmAbsent a Temporary Injunction

If the League is allowed to ignore its agreement to resolve disputes in the four-stepprocess, the Team will suffer harm that is irreparable on its face. In addition to the fact that its

players will be gone and the Team will have nothing in the way of player personnel to marketand promote for the upcoming season, much less compete with, the LLC Agreement explicitlysays so. Section 12.03 of the LLC Agreement, which is a part of Article XII's detailed disputeresolution process and rules, states:

Section 12.03 Limitation. Nothing in this Article XII shall limitany Member's right to seek specific performance as set forth inSection 13.11.Id. 12.03. Section 13.11 ofLLC Agreement, in turn, states:

Specific Performance. The parties hereto agree that irreparabledamage would occur in the event any provision of thisAgreement was not performed in accordance with the termshereof and that the parties hereto shall be entitled to specificperformance of the terms hereof, in addition to any other remedy atLaw or in equity.

Id. 13.11 (emphasis supplied). Itfollows, then, that one provision of the LLC Agreement withwhich the parties must comply in accordance with its terms is the Dispute Resolution Provision.Thus, by the explicit terms of the LLC Agreement, the League's blatant disregard of thisProvision has inflicted and will continue to inflict "irreparable damage" on the Team.

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Previously, when the parties had their earlier, now-resolved "dispute" concerning theevents of the 2011 season, the League acknowledged it was required to comply with all four

steps of the Dispute Resolution Provision, the only issue being whether the last two steps-mediation and arbitration - must be completed before any purported termination could takeeffect. Indeed, on July 5,2011, the League served a letter on the Team that satisfied the DisputeResolution Provision's first step, a Dispute Notice. See JuI. 5,2011 Ltr. from P. Fulmer(attached hereto as Exhibit D). That Dispute Notice further acknowledged that "Article 12.01(a)[(i.e., the Arbitration Provision)] of the LLC Agreement requires that the League and the Teamwork together in good faith to attempt to achieve a negotiated resolution of any disputes."Further, the League recognized that the next step in the process was a hearing before the Boardof Governors under Section 13.1(c) of the Operating Agreement, where the parties could conducta confidential hearing prior to the time the Governors could even consider any termination of theTeam. When, however, the parties could not agree on a date for such a hearing, and the Teammade clear, contrary to the League's position, that it had not waived its rights to a pre-termination hearing, the League threatened to proceed with an immediate termination, and theTeam had no choice but to sue.

Now, incredibly, the League is purporting to dispense with all dispute resolutionprocedures, even the two it has acknowledged, in the parties' prior dispute, it was required toengage in before any termination of the Team could be considered, much less effectuated. In anycase, it is clear that if the Team were forced to go through the dispute resolution process now,without the relief it is seeking here, the process would come too late to restore the Team to theposition it enjoyed before termination, and all its accumulated goodwill and the franchise's valuewould be destroyed.

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Damage that cannot be calculated monetarily falls within the definition of irreparableharm. Liza Danielle, Inc. v. Jamko, Inc., 408 So. 2d 735, 738-39 (Fla. 3d DCA 1982) ("We

recognize that impossibility of ascertaining the amount of plaintiff s legal damages may establishinadequacy of the legal remedy so as to support an award of injunctive relief, and additionally,may establish the requisite irreparable character of the injury .... ") (citation omitted). TheLeague, on the other hand, will not suffer any material harm if the Court enters a temporaryrestraining order to prevent termination prior to arbitration. The League has never pointed to anyjustification more compelling than its own convenience as to why termination must beimmediate, whereas arbitration can wait for months.

In addition to the fact that the LLC Agreement defines violations of the DisputeResolution Provision asper se irreparable harm (LLC Agreement 12.03; 13.11), the DisputeResolution Provision itself specifically anticipates that irreparable harm may be caused if thestatus quo is not maintained while the arbitration proceeds. Thus, in Section 12.01(c) of theArbitration Provision, the LCC Agreement provides that nothing precludes a party from goinginto court for "injunctive or other provisional relief to prevent immediate and irreparable harm."What the parties anticipated in the LLC Agreement is exactly what is needed here, as the harmthat will continue to befall the Team if the League is not restrained from carrying out itspurported termination is irreparable on its face.

If the League is allowed to destroy the Team's franchise before any dispute resolutionprocedures are engaged in, and, in particular, before an arbitration is convened to determinewhether it has the right to do so, then the goodwill that the Team has developed at great expenseand effort will be forever destroyed. See id. at 738-39; Lefebvre v. Weiser, 967 So. 2d 405, 406(Fla. 3d DCA 2007) (affirming temporary injunction where company was at risk of potential

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destruction, as well as loss of client goodwill). Indeed, one of the components of the harm toPlaintiffs will be to the "magicJack" brand name, which heretofore has enjoyed fame, success,

and enormous goodwill in the affiliated businesses run by the Team's ownership. See FerrellgasPartners, L.P. v. Barrow, 143 Fed. Appx. 180, 190 (l1th Cir. 2005) ("'[g]rounds for irreparableinjury include loss of control of reputation, loss of trade, and loss of goodwill" (citationomitted)). Further, the League will inflict immeasurable harm to the soccer community and thegreater community of South Florida ifit terminates the Team at the height of the Team's andsoccer's popularity.

Most significantly, in the event that Plaintiffs are forced to arbitrate the validity of theLeague's termination without the benefit of the interim relief requested herein - a Court orderenjoining the League from effectuating its purported termination and requiring that the Team beallowed to continue to operate pending the outcome of the parties' contractual dispute resolutionprocedures - even a victory in arbitration would not prevent the Team from being at asignificant disadvantage for the 2012 season. With the League's free agency period havingbegun on November 9, 2011, and with the Team's ability to re-sign its star players during theexclusive signing period having been stripped away, absent injunctive relief, none of the disputeresolution procedures concerning the validity of the League's purported termination can beconcluded in advance of that date. Thus, should the Team prevail in arbitration, and the allegedtermination is found to be improper, the Team will nevertheless be de facto terminated from theLeague, as it will be unable to sign any players that would allow it be competitive with otherteams in the League. Indeed, the Team has always intended to re-sign, through free agency,many of the League's top stars that played for the Team in 2011, including Abby Wombach,Shannon Boxx, Christie Rampone, Hope Solo, Jillian Loyden, Lindsay Tarplay, and Becky

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Sauerbrunn. Given the opportunity to participate, and since it is well known for paying itsplayers salaries well in excess of the other teams, the Team is confident it will once again attract

the League's best players.Moreover, while the Team has everything to lose absent the requested interim relief-

even if it prevails at arbitration - the League forfeits nothing by allowing the Team to continueto operate pending the completion of the dispute resolution process that the parties contractuallyagreed to. In the unlikely event that the Team does not prevail in arbitration and the terminationis upheld, any players the Team has signed can be allocated among other franchises. In eithercase, the League will incur no hardship in allowing the Team to operate pending the resolution ofthe parties' dispute.

As noted above, the League's attempt to explain away its precipitous termination of theTeam by linking the parties' current dispute about how the Team will operate in 2012 to thedispute about how it operated in 2011, is totally unavailing. Any dispute about how the Teamwill operate in 2012 is totally distinct from the dispute about how it operated in 2011. Further,and in any case, the parties have not had any discussions about how the Team intends to operatein 2012, so as far as the Team is concerned, this dispute has never ever been framed, particularlysince it has never received any Notice of Dispute indicating what performance criteria theLeague claims it has refused to comply with. Without such notice, and without a hearing beforethe Board of Governors, the Team is at a loss as to what its new dispute with the League is evenabout. Further, and, in any case, the Team remains entitled to the last two steps of the process,mediation and arbitration, before any termination can take effect.

Thus, under Article 12.01(c) of the LLC Agreement, the Team has shown that animmediate injunction is needed to "prevent immediate and irreparable harm."

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B. Plaintiffs Have No Adequate Remedy At LawIn considering whether to grant the Team's motion for emergency relief, the Court must

determine whether monetary damages can adequately remedy the harm that would result if theLeague is permitted to continue to act in furtherance of its purported pre-arbitration termination.As discussed above, absent an injunction, the League's wrongful pre-dispute resolutiontermination of the Team will continue to cause per se irreparable harm (according to the LLCAgreement 13.11), foreclose any arbitration panel from crafting full and meaningful relief forthe Team, ruin the Team's accumulated goodwill, and destroy the franchise's value. None of

this is harm that can be readily calculated or redressed by a suit for damages. The impossibilityof ascertaining the amount of Plaintiffs legal damages establishes the inadequacy of legalremedy so as to support award of injunctive relief. Liza Danielle, Inc., 408 So. 2d at 738-39;Us. 1 Office Corp. v. Falls Home Furnishings, Inc., 655 So. 2d 209, 210 (Fla. 3d DCA 1995)(injunction was appropriate where movant faced the destruction of its business and it would bedifficult to find a basis from which to calculate damages).

C. Plaintiffs Have a Clear Legal Right to the Relief RequestedHere, the Team's requested relief is a temporary injunction and order compelling the

League to engage in all four steps of the dispute resolution process, including arbitration - asrequired by the Dispute Resolution Provision - before the purported October 25,2011termination can take effect. Under these circumstances, the merits of the underlying dispute are

not at issue. See Smith Barney Shearson, Inc. v . Berman, 678 So. 2d 376, 377 (Fla. 3d DCA1996) (in context ofTRO seeking arbitration, applicant must show "substantial likelihood ofsuccess on the merits, that is, that he would prevail on his claim to compel arbitration"); ArthurAndersen LLP v. Carlisle, 129 S. Ct. 1896, 1900-01 (2009) (under FAA, underlying merits of

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appeal from denial of stay pending arbitration are irrelevant). Rather, the issue is whether theTeam has a clear right to the relief sought - an order compelling the League to specifically

perform its obligation to complete the dispute resolution process before any termination can takeeffect.

In this instance, the League has purported to terminate the Team, and once the Teamfinds out what the dispute is about, it expects it will have many defenses to the League'sposition. Further, the Team intends to assert claims of its own against the League. But beforethis Court the Team need not, and has not sought to, prove anything about the underlying facts ofthe parties' dispute that bear on the merits of the League's purported termination, or of Plaintiffs'own claims - those are issues for the arbitrators to decide in arbitration. Instead, the Team mustonly meet its burden of demonstrating a prima facie case that it is entitled to specificperformance of the Dispute Resolution Provision, including arbitration, before the League'spurported termination can be acted upon. The Team has shown more than a reasonableprobability of success on this issue, and is entitled to an order compelling specific performanceof the parties' agreement to arbitrate and a temporary injunction in aid of that order.

D. A Temporary Injunction Will Serve the Public InterestThere is nothing equitable about allowing a party to blatantly repudiate its contractual

commitments and then avoid the consequences of its actions. Indeed, requiring parties to abideby their contractual commitments is consistent with the public interest, since it preserves thesanctity of contract. See Pitney Bowes Inc. v. Acevedo, No. OS-21S0S-CIV, 200S WL 2940667,at *6 (S.D. Fla. July 2S, 200S) ("[T]he public has a cognizable interest in the protection andenforcement of contractual rights."); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. King, S04 F.Supp. 1512, 1515 (M.D. Fla. 1992) ("the courts should strive to enforce contractual

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agreements"); see also Merrill Lynch, Pierce, Fenner & Smith Inc. v. Ran, 67 F. Supp. 2d 764,781 (E.D. Mich. 1999) ("Unless the court enforces the terms of the contracts entered into by the

sophisticated parties and entities in this case, the court will be undermining the legitimatebusiness expectations not only of the parties here, but of all contracting parties."); see GreenStripe, Inc. v. Berny's Internacionale, 159 F. Supp. 2d 51, 57 (E.D. Pa. 2001) (concluding that"an injunction is consistent with the public interest in requiring parties to live up to their legalcontracts"). This general principle argues in favor of granting the Team a temporary injunctionto preserve its contractual right to dispute resolution, including arbitration.

Moreover, in the case of agreements to arbitrate, there is an even stronger and long-recognized public interest in contract enforcement. See Moses H Cone Mem 'IHosp. v. MercuryConstr. Corp., 460 U.S. 1,22 (1983) (FAA reflects congressional intent "to move the parties toan arbitrable dispute out of court and into arbitration as quickly and easily as possible"); Roe v.Arnica Mut. Ins. Co., 533 So. 2d 279,281 (Fla. 1988) (calling arbitration under Florida's statute

"a favored means of dispute resolution") (citation omitted); Gale Grp., Inc. v. WestinghouseElec. Corp., 683 So. 2d 661,663 (Fla. 5th DCA 1996) (analyzing motion to compel arbitrationunder Florida law: "Public policy favors arbitration as an efficient means of settling disputes,because it avoids the delays and expenses of litigation.") (citations omitted); see also GlobalTel*Link Corp. v. Scott, 652 F. Supp. 2d 1240, 1247 (M.D. Fla. 2009) ("enjoining the parties toengage in alternative dispute resolution, as contractually agreed by the parties in the Agreement,is in furtherance of the public interest"). This more specific rule with respect to arbitration alsoweighs strongly in favor of the Team's request.

Finally, and importantly, there is the public's interest, that is, the interest of the SouthFlorida community, to be considered. In this instance, the public interest will clearly be served

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by ensuring that the Team may exercise its right to engage in the agreed-to dispute resolutionprocess before any purported termination takes effect. During this past season, the Team

attracted large crowds to its home stadium, Florida Atlantic University's soccer stadium, and thepress coverage of the Team and its star players exploded. Indeed, the Team's stars have beenfeatured on the Late Show with David Letterman and a recent local appearance by AbbyWambach, one of the Team's and the most famous soccer players in the world, drew 500 youngfans and soccer players. (See media articles attached hereto as Exhibit K). In addition, the Teampledged proceeds from ticket sales and concessions to Florida Atlantic University, wheremagicJack plays its home games. Further, the Team has been a great partner to Florida AtlanticUniversity, and the University clearly wishes to continue its lucrative partnership with the Team.See Exhibit J. Thus, South Florida has a clear interest in the orderly, fair and efficient resolutionof the parties' disputes. See Hilb Rogal & Hobbs of Fla., Inc. v . Grimmel, 48 So. 3d 957, 962(Fla. 4th DCA 2010) (public interest is served in enforcing contractual rights); City of Oviedo v.Alafaya Utils., Inc., 704 So. 2d 206, 207 (Fla. 5th DCA 1998) (upholding injunction wherepublic would suffer irreparable harm otherwise).

It is abundantly clear, therefore, that the public's interest in contract enforcement, itsspecific interest in arbitration of disputes, and the local community's interests will be served ifthe Team is allowed to proceed with its second successful season in South Florida. If the Teamis successful in arbitration, as it expects to be, the public interest is further served if the Team canreturn next year and continue to build local goodwill and pride.

E. No Bond Should Be Required.While a bond may be required as a condition of a preliminary injunction under Rule

1.61O(b) of the Florida Rules of Civil Procedure, it is within the Court's discretion to limit the

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bond requirement. Cushman & Wakefield, Inc. v. Cozart, 561 So. 2d 368, 369 (Fla. 2d DCA1990) (noting that court has discretion with regard to amount of bond to be posted by party

moving for a preliminary injunction). Cases interpreting Rule 65(c) of the Federal Rules of CivilProcedure, which contains the same language as the applicable Florida rule, have held that acourt may, in an appropriate case, determine that a bond is completely unnecessary. See, e.g.,Temple Univ. v. White, 941 F.2d 201,219-20 (3d Cir. 1991) (equities of potential hardshipsweighed in favor of waiving bond requirement); Coquina Oil Corp. v . Transwestern PipelineCo., 825 F.2d 1461,1462 (10th Cir. 1987) (holding that court has discretion to determine thatsecurity is unnecessary in '" absence of proof showing likelihood of harm''') (citation omitted);Int'l Controls Corp. v . Vesco, 490 F.2d 1334, 1356 (2d Cir. 1974) (holding that court maydispense with security when there is '''no proof of likelihood of harm to party enjoined"')(citations omitted).

Here, given that the requested injunction merely preserves the Team's right to arbitrationaccording to the LLC Agreement's Arbitration Provision, and the fact that the League is alreadyin possession of the Team's performance bond, the League cannot prove any harm, whatsoever.Accordingly, no bond should be required.II. THE COURT SHOULD COMPEL THE LEAGUE'S SPECIFIC PERFORMANCE

OF THE DISPUTE RESOLUTION AND ARBITRATION PROVISIONS OF THELLC AND OPERATING AGREEMENT"It is now an axiom of federal and Florida law that written agreements to arbitrate are

binding and enforceable, and that in the absence of waiver a court must compel arbitration whenan arbitration agreement and an arbitrable issue exist." Bill Heard Chevrolet Corp., Orlando v .Wilson, 877 So. 2d 15,18 (Fla. 5th DCA 2004); see also Fed. Arbitration Act ("FAA") 9 U.S.C. 2 (stating that arbitration clauses "shall be valid, irrevocable and enforceable"); Fla. Arbitration

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Code, Fla. Stat. 682.02 (providing that arbitration clauses "shall be valid, enforceable andirrevocable"). Neither Florida nor federal law affords discretion; instead, they mandate that the

court direct the parties to proceed to arbitration on issues within the agreement to arbitrate. See,e.g., Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) (holding FAA "leaves noplace for the exercise of discretion by a district court, but instead mandates that district courtsshall direct the parties to proceed to arbitration on issues as to which an arbitration agreementhas been signed") (citation omitted) (emphasis in original). Because public policy favorsarbitration as an efficient means of settling disputes, "all questions concerning the scope orwaiver of the right to arbitrate should be resolved in favor of arbitration rather than against it."Bill Heard Chevrolet Corp., 877 So. 2d at 18.

A. The FAA mandates that the parties arbitrate their dispute.The FAA provides for the enforcement of written agreements to arbitrate in contracts

evidencing a transaction involving interstate commerce. IBecause the present action is a claim

that involves interstate commerce, the FAA applies. See Citizens Bank v. Alafabco, Inc., 539U.S. 5, 572 (2003) (holding that that debt-restructuring agreements that were executed inAlabama by Alabama residents were nonetheless contracts evidencing transactions "involvingcommerce" whose arbitration clauses were enforceable pursuant to the FAA).

Here, Plaintiffs, companies headquartered in Florida, have sued a national sports leaguewhose member teams are located in Georgia, Massachusetts, Florida, Pennsylvania, New Jersey

IThe Supreme Court recently held that actions governed by the FAA pre-empt state law. AT&TMobility LLC v. Concepcion, 131 S. Ct. 1740, 1746-47 (2011). Since Florida law is consistentwith the FAA, applying the federal statute instead of the state one is a distinction without adifference, here. Seifert v . Us. Home Corp., 750 So. 2d 633, 636 (Fla. 1999); Kaplan v. DivostaHomes, L.P., 983 So. 2d 1208,1211 (Fla. 2d DCA 2008).

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and New York. The League is itself a Delaware LLC which formerly had its principal place ofbusiness in California, and its business is not limited to anyone state. The business of the league

- which in its most basic form consists of teams from various states meeting to play soccermatches - necessarily requires crossing state lines. Thus, the purpose of the LLC Agreementwas to establish a business (the League) that is engaged in interstate commerce. See Flood v.Kuhn, 407 U.S. 258, 283-83(1972) ("professional sports operating interstate," including baseball,football, boxing, basketball, hockey and golf, are engaged in interstate commerce) (footnotesomitted). Therefore, the FAA applies to this case.

B. Referral to arbitration is mandated in this action.Under both the FAA and Florida's Arbitration Code, "there are three elements for courts

to consider in ruling on a motion to compel the arbitration of a given dispute: (1) whether a validwritten agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether theright to arbitration was waived." Raymond James Financial Services, Inc. v. Saldukas, 896 So.

2d 707, 711 (Fla. 2005); Seifert, 750 So. 2d at 636. Since waiver is not at issue, here, thequestion for this Court is whether the first two elements are satisfied in this action. They are and,therefore, this Court must compel arbitration.

1. A valid enforceable agreement containing an arbitration clause exists.The first element requires an agreement to arbitrate. Itcannot be disputed that the LLC

Agreement is an enforceable agreement among the parties, and that it contains the ArbitrationProvision. Consequently, the first element necessary to compel arbitration is satisfied.

2. The dispute between the parties is an arbitrable issue.The second element requires the claims in the action to come within the scope of the

arbitration clause. The League has previously acknowledged that a dispute over any purported

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terminable offense, whatever that offense may be, falls within the scope of the ArbitrationProvision.

By its terms, the Arbitration Provision applies broadly to "any controversy, dispute orclaim arising out of or relating to this Agreement or the breach, termination, enforceability orvalidity hereof' the Team and the League. LLC Agreement 12.01(a). On July 5, in a DisputeNotice from its de facto general counsel, the League conceded that any dispute concerningtermination of the Team fell within the expansive language of the Arbitration Provision. Further,the League has previously acknowledged that the Team was entitled to all four steps in thatprocess by sending a Dispute Notice with respect to the parties' earlier dispute relating to the2011 season. Under these circumstances, even though the League has failed to follow throughon its obligations under the Arbitration Provision, it cannot now deny that the parties' disputefalls within the scope of the Arbitration Provision, and that the requirements of that provisionmust be given their full effect.

* * *WHEREFORE, Plaintiffs respectfully request that this Court temporarily enjoin

Defendant from taking any action in furtherance of its purported termination of the Team withoutfirst submitting the dispute concerning such termination to all four steps of the agreed-to disputeresolution process, culminating in binding arbitration; allow the Team to participate in all Leagueactivities in the interim period, including the upcoming player signing process; extend theexclusive player signing period by 30 days; enter an order compelling Defendant's specificperformance of the parties' arbitration agreement; and grant all such other relief as is appropriateunder the circumstances.

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VERIFICATIONUnder penalty of perjury, I, Daniel Borislow, Chief Executive Office of Plaintiff

magicTalk Soccer Club, LLC, which is the managing member of Plaintiff Freedom Soccer, LLC,declare that I have read Plaintiffs' Verified Motion for Temporary Injunction and to CompelDispute Resolution and Arbitration and the facts as set forth above in the section entitled"Verified Facts" are true and correct.

CERTIFICATE OF SERVICEI HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by

~U.S. Mail and electronic mail on this ~ay of November, 2011, to Pamela Fulmer, Esq.,SNR Denton US LLP, 525 Market Street, 26th Floor, San Francisco, CA 94105-2708(pam.fulmer@ snrdenton.com).Of Counsel: CARLTON FIELDS, P.A.525 Okeechobee BoulevardSuite 1200West Palm Beach, FL 33401Telephone: (561) 659-7070Facsimile: (561) 659-7368E-mail: [email protected]: [email protected]

Louis S. Ederer, Esq.Arnold & Porter LLP399 Park AvenueNew York, NY 10022-4690

BY:JOS H 1ANN0, JR.Florida Bar No: 655351CHARLES M. ROSENBERGFlorida Bar No: 279064

Counsel for Plaintiffs Freedom Soccer, LLC
mailto:[email protected]:[email protected]:[email protected]:[email protected]

borislow motion

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