Last week, the NFL and St. Louis resolved their differences in exchange for an eventual payment in the amount of $790 million. That’s a lot. But could St. Louis have gotten more?
The answer, both as to last Tuesday and through the conclusion of a trial, is yes.
As to the latter point, the plaintiffs could have refused to take $790 million, or whatever else the NFL would have offered before the entry of a verdict. And while the plaintiffs would have been assuming the risk of a much lower judgment (or nothing at all), they also could have gotten more. Much more.
So much more that, if Rams owner Stan Kroenke also had managed to foist responsibility for the verdict on his partners, Commissioner Roger Goodell could have offered an expansion team in order to solve the problem.
An expansion team was never on the table as a pre-trial settlement possibility. It was a way out of the worst-case scenario; the extinguisher behind the glass. To get to the point at which Goodell would have broken it, the NFL had to lose very big at trial -- and it had to lose to Kroenke on the question of whether Kroenke alone would be the one to pay.
As to the former point, a source with knowledge of the dynamics of the mediation process tells PFT that Kroenke’s lawyers were ready to pay more than $790 million to end the case, and that the league’s lawyers intervened, drew a hard line at $790 million, and got the deal done. It’s unclear how much more Kroenke’s lawyers were authorized to offer.
So why didn’t St. Louis keep pushing? Although the final decision was made by the relevant public officials and not by the lawyers, the lawyers have tremendous influence over the process. In a situation like this, the client ALWAYS asks the lawyer what to do, before doing it. Where, as in this case, the individuals calling the shots aren’t directly pocketing cash that ultimately belongs to taxpayers, they’re even more likely to seek guidance as to the “right thing to do.”
For the lawyers, the right thing for them to do became very simple. The question was to take $276.5 million (35 percent of the settlement) plus costs now, or to keep fighting and pushing and chasing a pot that may be bigger, the same, or smaller. Tp keep fighting and pushing and chasing through Thanksgiving weekend. To keep fighting and pushing and chasing through December. Tp keep fighting and pushing and chasing through the New Year. To keep fighting and pushing and chasing through a major, high-stakes, multi-week trial set to commence on January 10. To keep fighting and pushing and chasing as the NFL appeals the judgment to and through every possible court in the land.
That’s a basic reality that will never be explained by St. Louis sources to St. Louis media outlets. At the end of the day, the supposedly final offer on Tuesday entailed a contingency-fee carrot far too plump for the lawyers to ignore. The easiest cases to try are the ones where the best settlement offer is nothing or close to it. As the numbers becomes bigger and bigger, it’s harder and harder not to take the bird in the hand, and to stop fighting and pushing and chasing what eventually could be none in the bush.
As explained last week, a contingency fee makes plenty of sense for clients without the funds to pay monthly legal invoices. While it would have been ridiculously expensive for the public entities who sued the NFL to finance the five-year litigation, there’s no way it would have cost $276.5 million. And if, at the end of the day, the lawyers were getting paid not by the outcome but by the hour, they possibly would have encouraged the client to keep fighting and pushing and chasing. (Also, it would have been prudent for the public officials to insist on a fee structure that would have dropped the percentage above a certain level; for example, 35 percent of the first $100 million, 30 percent of the next $100 million, 25 percent of the next $100 million, and so on.)
It’s cynical, I know, to view the legal profession as so blindly driven by maximizing revenue, minimizing risk, and slamming the books shut on a case when there’s a viable way out. As someone who occupied that world for 18 years, it’s also very realistic. In my opinion, the lawyers called the shots on this settlement, directly or indirectly. And the lawyers of the 17-partner Dowd Bennett firm and the nine partner (technically “member”) firm of Blitz, Bardgett, and Deutsch will be carving up one hell of a turkey for Christmas, with $276.5 million plus full reimbursement for five years of litigation costs flowing into the coffers by the time the ball drops in Times Square. Although the specific agreements cut between the firms and among the partners may dramatically change the eventual distribution, it works out to more than $10.6 million per equity holder in the two firms.
Going forward would have put that payday at risk. It would have entailed plenty more work and effort and worry and risk. In the end, they may have devoted two or three more months to the process and finished in the same spot, at $790 million. And then there would have been layers and levels of appeals.
So, yes, it was very smart for the lawyers to take the deal. For the public entities and the citizens they represent, the better course may have been to push for more. Especially if more entailed a plausible flicker of an expansion team.
As we said many times once it became clear and obvious that the NFL would not be able to avoid a trial in St. Louis, the plaintiffs had a tiger by the tail. Instead of pulling as hard as they could, they let go.
Within the legal profession, they say that a good settlement means that both sides aren’t happy with the outcome. If, as in this case, both sides seem to be happy, the reality is that one side has reason to be -- and that the other side is just fooling itself.
We’ll leave it to you to decide which shoe fits which foot in this one.