Team minority owners Robert Rothman, Frederick Smith and Dwight Schar sued Snyder in federal court in Maryland in November, seeking an injunction that would essentially permit them to move forward with a $900 million sale of their stake in the team that they allege Snyder is blocking. In Wednesday’s ruling, U.S. District Judge Peter Messitte wrote that the stockholder agreement between Snyder and the minority owners, as well as the NFL’s constitution, clearly states disputes of this nature must be decided by arbitration.
Attorneys for Snyder declined to comment. Attorneys for the minority owners did not respond to a request for comment.
A group of investors from California has offered $900 million for the 40 percent stake collectively held by Rothman, Smith and Schar. Snyder, however, has selectively exercised his right of first refusal over minority shares of the team by offering to purchase only the shares by Rothman and Smith. In court filings, Snyder has accused Schar of leading “an extortion campaign” against him.
Messitte ruled that federal courts will have jurisdiction if it comes to light the NFL or Snyder interfere with any future negotiations the minority owners have with prospective buyers. And Messitte will retain oversight of dueling accusations by Snyder and the minority owners about leaking information to the news media. A virtual hearing in the case is scheduled for Jan. 7 in which Snyder, Rothman, Smith, Schar and John Moag — an investment banker working for the minority owners — must all appear and testify.
The lawsuit was initially filed Nov. 13 under seal, and documents relating to it were made public only after The Washington Post intervened and sought public access to the case. The minority owners informed Snyder they intended to sell their stake in the team in May, according to court filings, and the sale process almost immediately devolved into discord.
Over the course of seven months, according to documents made public in the case, the two sides have traded threats via letters written by their attorneys, emails and text messages. This summer, NFL Commissioner Roger Goodell appointed an arbitrator to settle the dispute, and after Wednesday’s ruling, the bulk of that dispute is formally back under that arbitrator’s jurisdiction.