Miami-Dade County

Miami Marlins in federal court: Don't call team a U.S. citizen. We're foreign, too

Miami Marlins CEO Derek Jeter, seen at Marlins Park on June 27, 2018, angered many fans with the offseason trade of stars like Giancarlo Stanton. But Jeter’s foundation-first reboot has begun to show signs of hope.
Miami Marlins CEO Derek Jeter, seen at Marlins Park on June 27, 2018, angered many fans with the offseason trade of stars like Giancarlo Stanton. But Jeter’s foundation-first reboot has begun to show signs of hope. snavarro@miamiherald.com

When a federal judge on Tuesday wanted to make sure that a U.S. company had purchased the Miami Marlins last fall, a lawyer speaking for the team corrected him.

"As I understand it, there's no question the purchaser in this case is a U.S. citizen, or a U.S. entity?" U.S. Judge Darrin Gayles said of Marlins Teamco, the holding company Derek Jeter and partners formed in October 2017 to close the $1.2 billion purchase of the baseball franchise from Jeffrey Loria.

"That is not correct, your honor," said Peter Duffy Doyle, a lawyer speaking for both the Loria and Jeter groups in Tuesday's hearing on a lawsuit filed against the team by Miami and Miami-Dade over the $1.2 billion transaction. "It is a citizen of both the United States and outside of the United States."

It was a familiar argument as the team pursues international arbitration under the supervision of a federal judge in the lawsuit, which seeks a share of the sales proceeds under a 2009 profit-sharing agreement tied to public financing of Marlins Park. The Marlins are citing a British Virgin Islands holding company that owns part of the team in arguing that the suit should be heard in federal court. Miami and Miami-Dade want it heard before a locally elected judge in state court.

The morning proceedings on the seventh floor of the U.S. District courthouse in downtown Miami did not break any new legal ground in the dispute over where local government lawyers can press their case for a share of Loria's profits from the sale to the Jeter group.

The Marlins continued to invoke an international agreement governing disputes involving foreign entities. The county rejected that argument, saying a dispute over the 2009 contract should be governed by the citizenship of the Loria entities that owned the team at the time. Those entities have not claimed foreign ownership; only the buyers are.

During the federal hearing, county lawyer Jorge Martinez-Esteve briefly touched on the high-profile sleuthing around the Marlins claim of BVI ownership: Radio host Andy Slater and lawyer Laurence Leavy flying to the island in April to the headquarters of Aberneu, the company formed by Venezuelan Tobias Enrique Carrero to purchase a share of the team.

Miami-Dade submitted an affidavit from Leavy, best known as the "Marlins Man" for his wearing of a team jersey to pricey seats at major sporting events, and included as evidence photos he took in the BVIs showing Aberneu's address was just a rented post office box.

"It's been very clear that Marlins Teamco is an American citizen," Martinez-Esteve said.

The two sides are mainly arguing over arbitration, with both the Jeter and Loria lawyers pushing to exercise clauses in the 2009 deal allowing for an arbitrator to resolve disputes.

Miami-Dade sued both ownership groups in state court earlier this year, claiming Loria was wrong when his lawyers notified both governments that he wouldn't be paying anything under the agreement that gives the city and county a 5 percent share of certain sales proceeds. Loria paid $159 million for the team in 2002.

Loria said deductions in the agreement resulted in a paper loss on the calculation. After a state judge gave an initial early win to Miami-Dade and Miami (which had joined the suit as a co-plaintiff), Loria lawyers filed papers to move the case to federal court.

That leaves Gayles to decide whether the dispute can remain in federal court and be moved to arbitration, or be sent back to state court. At the end of the hearing, the judge said to expect a ruling soon but he did not offer a timetable. Earlier, he questioned both sides on whether the dispute shouldn't have played out longer a couple of blocks away in Miami-Dade Circuit Court.

"I can't help but wonder," Gayles said, "why are we here?"

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