A group of Tampa Bay Rays minority owners are pushing back on owner Stuart Sternberg and the team’s criticism over their latest lawsuit.
The minority owners issued a response after Sternberg, in a joint statement with the franchise, called the group’s lawsuit “improper litigation” as part of a “relentless campaign” against him. Sternberg made the statement a week after being sued a third time by five of his team’s minority owners.
“We are disappointed that Sternberg and Rays Baseball Club have resorted to attempting a public character assassination of these limited partners for exercising their legal rights under Florida statutory and common law,” the minority owners said in a joint statement. “Our clients stand by their claims and have certainly never made any allegations that they know to be false. As is apparent from the face of the complaints, the lawsuits appropriately assert different claims, both procedurally and substantively.”
In the suit, filed June 27 in Pinellas-Pasco Circuit Court, five minority partners accuse Sternberg of taking “fraudulent” control of the team by transferring legal ownership to a company he owns without their knowledge. The group of partners who filed the suit collectively own less than 10% of the team.
The partners suing Sternberg are Robert Kleinert, Markel Gary, the MacDougald Family Limited Partnership, Stephen M. Waters and a trust in Waters’ name.
The latest litigation follows two similar lawsuits against principal owner Sternberg by the group, one filed in May 2021 and the other in February. Both of those suits have similar allegations. They sued in May alleging Sternberg withheld profits but hit partners with taxes on those profits. Then in February, the group said the team’s principal ownership was deliberately withholding and backdating documents the partners have a right to inspect.
“To be clear, the first suit is on behalf of the Partnership to remove 501SG as General Partner and the second suit is to obtain documents that have been withheld. The current suit is on behalf of the Limited Partners against Sternberg personally and Rays Baseball Club, based on recently discovered information that had been previously concealed from the Limited Partners. Other than this clarification, we are comfortable letting the court system do its job without feeling a need to litigate through the media,” the partners’ statement concluded.
In their own statement, Sternberg and the team said the latest suit “contains numerous allegations that the plaintiffs know are false.”
“While we generally do not comment on active litigation matters, we feel compelled to publicly respond to the meritless and relentless campaign by these limited partners,” the team said. “They have deployed multiple baseless lawsuits premised on allegations they know are untrue in order to pressure the team and Stuart Sternberg to purchase their interests – which is a right they do not have.”
In March, a Pinellas-Pasco judge ruled that all but one count of the initial lawsuit against Sternberg must be settled through arbitration. The only portion that can continue in court, the judge ruled, is the motion to remove Sternberg as a general partner. The next hearing on that case is scheduled for September.
“These limited partners have initiated three separate lawsuits all based on the same claims and causes of actions,” the team stated. “However, rather than initiate an arbitration proceeding as required by the Court, the limited partners filed yet another lawsuit in a desperate attempt to avoid arbitration. The plaintiffs prefer to publicly air their meritless allegations rather than seriously pursue their claims.”
“It is unfortunate that these plaintiffs have resorted to an improper litigation campaign that needlessly wastes the resources of the local court system. This is a clear abuse of the judicial process. We intend to take all appropriate steps and seek all remedies and sanctions available to hold these limited partners accountable for their actions, including their attempted interference in the business operations of the team,” the team concluded.