RabidRed:

Thanks for the link, that was a very touching article!

So I have to spend an hour to gain 1 minute. Doesn't seem worth it to me. What would I do with the extra minute? Since that is one minute it at the end of my life it would probably just another minute of coughing and hacking. No thanks, I'll pass.

I'm pretty sure that Washington case law or statutes will give us a good idea of what "good faith" means in Washington. The restatement (which is a secondary law source, not authoritative, but very persuasive) says that there's an implied covenant of good faith in every transaction between the parties to make sure that the contract is executed.

A couple of issues pop out at me immediately -- the covenant is generally understood to be between the parties. Seattle was not a party to this contract, but merely a third-party beneficiary, and even that is arguable.

My understanding is that the 'deal with in good faith for 12 months' issue was in a side letter, not even in the actual contract. If that's the case, a court is probably going to be reluctant to unwind the deal on something it would deem to be an immaterial breach.

The major performance here was selling the team for $350M. That happened.

It's arguable whether Bennett, et. al. were in bad faith at all. It's arguable that Seattle even has standing here. It's arguable that the contract was no longer executory, but fully performed. it's arguable that even if all this stuff goes against the PBC, it's an immaterial breach anyhow, maybe compensable by some monetary damages, but the mother of all equitable remedies, conveyance into a constructive trust??? I think the chance of that remedy being granted here is about the same as Oklahoma State winning a national title in football next season.

Seattle is not suing based on the good faith parol agreement. Seattle is suing based on the KeyArena lease. Schultz is suing based on the good faith argument. So, you're right, I don't think Seattle could even establish standing based on the good faith/constructive trust suit.

There's a reaons why people in Seattle hate Clay Bennett, and it's not just because he isn't a local owner. It's because he clearly never made a good effort to stay here or to at least try and make the Sonics watchable.

But you now love the guy who put this team in this situation in the first place!? Bennett has had only a mere fraction of the time to put together a watchable team that Schultz did. You're being ridiculous now and it's clear that it's who has been selectively sifting through media to find whatever trumped up and specious argument you can find and you're buying it all. We'll grab for anything when we're falling.


You say all of this evidence of money and time spent trying to get an arena in Seattle so that the Sonics could stay there. Explain to me how, after 12 months, he only came up with 1 pathetic arena proposal that he knew never stood a chance anywhere. I can give you just as "good" of an arena proposal if you give me 12 minutes.

Pathetic? He came up with a world class plan to give you an arena on par with your football and baseball facilities. It's the city and state that wanted to hang on to a pathetic arena and wouldn't talk about funding for anything else in any way. Jeez, that is one hard position for you to justify. And, really, why WOULDN'T an owner try and come up with the biggest and best plan? Face it, Bennett came up with the best plan and the state and city hung on the worst plan, one that got them in this situation in the first place. JUST ASK SCHULTZ!


Just in case the OKC media doesn't tell you, he could have put a Sonics team that could contend for the playoffs, which would in turn have sold out the KeyArena almost every night. He could have had Durant, Ray Allen, and Rashard Lewis on the court at the same time, but of course that would allow the Sonics to win and would not help Bennett and Co convince the NBA that they should relocate to Oklahoma City.

This is grabbing at straws. You're reaching. Aren't they getting an extra first round and second round draft pick this year? That's the future. A future that could have been in Seattle if they had even tried to work with the group. You could have had Durant, Ray Allen, Rashard Lewis, a new arena, local ownership, actual support for the team and blah blah blah. But that's the problem. All you're doing now is thinking about what could have been done, but you guys said no for four years and now you want someone else to pay for that!? That's pretty sad.



It's a joke what the OKC media is telling you about the situation up in Seattle. They're trying to tell you that big bad Seattle and the meanies in the Washington State legislature are beating up little Clay Bennett no matter how hard he tried when he's only trying to do the right thing and make a profit in his business and that him losing money or moving to Oklahoma City is not his fault in any way. The OKC media could tell you you were dead and you'd believe them

I'm sorry, but I read the very same facts in your media. Is the city not suing to keep them team in Seattle where it loses money, has no prospect for a new arena, has no future plans whatsoever to upgrade the Sonics facilities on par with that of your other teams? Is Schultz not suing to reneg on his sale leaving the PBC out all the money they spent trying to get an arena built there and without a team? These are simple facts and I don't need Seattle or Oklahoma media to explain to me that this is all out of vengeance.

The PBC has offered to get your city out of debt in regards to Key arena and give you market value for the lease. Seattle to the PBC: "no way, if you're leaving you must lose money first". Seattle has given them two options: give up the team or bleed cash for two years. Is your media saying any different? Are you justifying this? Do you think that just because it didn't work out for your side then everything was done in bad faith? Come on, grow up. Some things just don't work out, but if you think that an extensive effort was not made to get an arena built from Schultz through Bennett, then you're kidding yourself.

You can tell it's unraveling when you start saying that this is all because of how the PBC managed the team. YOU KNOW that they bought a struggling team that was in that position because of Schultz and Seattle government, not Bennett, and you know, as a Sonics fan, that they have made moves to upgrade their team for the near future. And you know that Bennett's plans were not only not even considered by the legislature, but that the city actually passed measures to make sure it'd be hard for them to do a similar deal with municipal funds. You know the message was clear from Seattle and Washington from the beginning that it was in no way interested in helping them upgrade the Sonics facilities. You may have not liked the timeline, but it didn't take very long for the people of Seattle to get together and tell the owners where they stood.

Have you only been following this since the BOG approved the move or maybe only since the PBC bought the team? None of this is new. Seattle and Washington took a principled stand this time around and said no to assisting professional sports. I actually have great respect for that. More cities should do it, so we can stop this whole cycle. But I can not respect the fact that a bitter community simply wants to punish these owners for the results of their very stand. It has undermined the entire principle that supposedly was the motivation for not funding any arena project. It's not the owners fault that Washington has been unable to reconcile their core principles with the realities of the business of professional sports today. Washington has clearly stated that it has a great deal of contempt for the way the NBA has treated them, but then it wants nothing more than to be a part of the NBA.

Look, this is all very dirty and I probably couldn't sleep at night if I was involved. But I have a hard time believing that you were on the steps of the capitol or city hall supporting any kind of funding for arena upgrades or assistance. Or that you were pleading with officials to try and meet the PBC half way. If you're like most vocal Washingtonians, you were actually protesting and supporting measures to actually make it as hard as possible for anything to get done.

It's completely disingenuous now to argue that Bennett didn't do enough, either with the team or with infrastructure efforts and it's nothing but vindictive to suggest the PBC should bleed cash at Key trough the end of their lease or that they should forfeit their team so someone else can do what he tried to do, especially in light of officials' refusal to even entertain Bennett's offers from day one. What you're really saying is that Bennett just didn't jump high enough to clear all of the extra hurdles and resistance that Washington put in his way. I mean, are trying to tell us you were just kidding now? That refusing to work with him, refusing to consider his proposals, and that the passage of I-91 were just some sort of friendly hazing directed at the new guy and if he just said, "ok, I know you guys are just goofin on me, let's get serious now", then he'd have had some sort of warmer response today than he did when he was officially campaigning for new infrastructure? Come on, seriously. The refusal to entertain Bennett's efforts was the will of people and now they want him to pay for that.

And to be clear, that's my opinion based on the facts, not one fed to me from any media editorial. And if you want to know my opinion on the Oklahoma media: it sucks. It has a poor handle on what is going on, as usual, and it has a clear and cushy bias towards Bennett and McClendon et al in everything they do. But, again, and you know this, that doesn’t change the nature or motivation of the lawsuits being filed by the city and in federal district court.

Bdp Ftw!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1

"They're looking (Nickels, Gorton) to extract every pound of flesh from the owners..."

David Stern couldn't have described this above situation any better.

These lawsuits are designed to curtail Seattle's pain and ride this situation out. Do they actually believe that Clay Bennett is going to have a change of heart overnight?


If I were Clay, I would wait out the two years and move to Oklahoma City. I would build a team for their fans to watch.

So that when they arrived in God's Country, they will be playoff contenders.

Schultz' lawsuit is asking for "relief sought" which has no merit. If he wanted to buy the team back for his own personal agenda; however, the NBA has to approve ownership; any judge that would grant him that kind of relief would have the NBA attorneys on their backs.

Seattle is not suing based on the good faith parol agreement. Seattle is suing based on the KeyArena lease. Schultz is suing based on the good faith argument. So, you're right, I don't think Seattle could even establish standing based on the good faith/constructive trust suit.

What I think is even more interesting is that Schultz is trying to raise a claim which doesn't really affect him. He's not injured if the sales contract was breached in that the PBC didn't deal with Seattle in good faith. Seattle isn't even a party to this lawsuit.

I could be crazy, but I don't even see how we even get to the merits of this case without a FRCP 12(b)(6) FTW.

We've heard for a long time that as part of their scorched earth campaign, that Seattle was going to force all the NBA teams to open up their books but it doesn't sound like this gets them there


NEW YORK — A federal judge ruled Monday that the NBA must release internal documents about the Sonics relocation to Oklahoma City to the City of Seattle.

During the 90-minute hearing in Federal Court, Judge Loretta A. Preska also said that should it become relevant, NBA Commissioner David Stern could be deposed.

Early in the hearing, Preska sent both groups to the jury room to come to a resolution regarding which documents were fair game. She admonished the parties, saying, “(These discussions) should have already happened."

“I would characterize it as a success,” said Paul Lawrence, the lead lawyer for the City of Seattle. “Our basic goal was to get the documents pertaining to the move and we got them. We’re also going to get a deposition, so we’re happy about that.”

Judge: NBA has to turn over relocation documents | NewsOK.com (http://newsok.com/judge-nba-has-to-turn-over-relocation-documents/article/3236128/?tm=1209420464)

Stern not ordered to testify
By LARRY NEUMEISTER
ASSOCIATED PRESS WRITER

NEW YORK -- NBA commissioner David Stern will not be ordered to testify in a case brought by the city of Seattle to try to keep the SuperSonics from moving, though a federal judge said she may consider ordering the testimony in the future.

U.S. District Judge Loretta Preska rejected most of the requests of the lawyers for the city of Seattle, saying she did not think some of the information they were seeking from the NBA was necessary to press their claims.

Preska had been asked to decide what evidence the city can seek from the NBA prior to a June 16 trial in federal court in Seattle to decide whether the Sonics must complete the final two years of a lease agreement for Seattle's KeyArena, the NBA's smallest venue.

She said she would consider whether Stern must testify only after the city learns what it can from other witnesses.

She also rejected a request by the city for the financial records of the 29 other NBA teams, calling it the city's "most intrusive request." NBA lawyer Jeffrey A. Mishkin said the league considered the financial information "highly proprietary."

Seattle officials filed a lawsuit in Seattle last year to keep the SuperSonics from leaving town. The city asked a judge to force the Sonics, the city's oldest professional sports franchise, to stay through the end of the lease, in 2010.

Last week, Stern said the team will be moving to Oklahoma City either next season or in 2010 and he did not expect there was anything the city could do legally to stop it.

If the team can settle its lawsuit, NBA owners have overwhelmingly approved the SuperSonics' move to Oklahoma City for the 2008-09 season.

What I think is even more interesting is that Schultz is trying to raise a claim which doesn't really affect him. He's not injured if the sales contract was breached in that the PBC didn't deal with Seattle in good faith. Seattle isn't even a party to this lawsuit.

I could be crazy, but I don't even see how we even get to the merits of this case without a FRCP 12(b)(6) FTW.

You're right, but I think the meat of his claims (which I think are honestly pretty weak) isn't the good faith dealings with Seattle as much as it is fraud in the inducement- i.e.: Bennett led the seller to believe he would not move the team, but he clearly always planned to do so (if you're buying what he's selling, which I don't think we are).

Therein lies the complete weakness of Schltz's suit: the main quote has been chopped: Bennett said he planned no never moving ASSUMING an arena deal was worked out...how is that bad faith? At the WORST, his emails say he wouldn't own the team if it stayed in Seattle, he'd get his "sweet flip." Which, of course, just shows how he was planning to ABIDE by the contract! I mean, come on!

It's hard not to conflate the two lawsuits though.... Does the ownership's random emails regarding a possible move before the year was up constitute fraud? Probably not. You can't scream BAD FAITH just because the opposing party noticed that maybe it wouldn't get done and sent a few emails about it.

Anyway Midtowner, I enjoy readin gyour analyses of the situation. My money says they don't get a perliminary injunction mainly based on the fact that the judge doubts the ability of Schultz to win on the merits at trial. At that point, you bet SChultz will disppear- he's not going to sink money in a suit that has basically been 85% decided.

wow, i amazed at what this is turning into... if everything does work out in our favor, i just can't envision a team returning to seattle now.

This is from Sports Illustrated. My computer won't paste the link. I have highlighted the key part, because this is what everyone in Seattle was hoping would happen, and was part of their "scorched earth" philosophy:

Stern not ordered to testify

NEW YORK (AP) -NBA commissioner David Stern will not be ordered to testify in a case brought by the city of Seattle to try to keep the SuperSonics from moving, though a federal judge may consider ordering the testimony in the future.

U.S. District Judge Loretta Preska rejected most of the requests of the lawyers for the city of Seattle, saying she didn't think some of the information they were seeking from the NBA was necessary to press their claims.

Preska had been asked to decide what evidence the city can seek from the NBA before a June 16 trial in federal court in Seattle to decide whether the Sonics must complete the final two years of a lease agreement for Seattle's KeyArena, the NBA's smallest venue.

She said she would consider whether Stern must testify only after the city learns what it can from other witnesses.

She also rejected a request by the city for the financial records of the 29 other NBA teams, calling it the city's "most intrusive request.'' NBA lawyer Jeffrey A. Mishkin said the league considered the financial information "highly proprietary.''

Stern not ordered to testify - nba - SI.com (http://sportsillustrated.cnn.com/2008/basketball/nba/wires/04/28/2030.ap.bkn.stern.supersonics.0321/index.html)

Maybe Bennett is not the only dumb prospective buyer. From the Seattle P-I:

"Meanwhile, the Sonics lawyers filed a counterclaim Monday for declaratory relief in the case, asking Judge Marsha Pechman to quantify the city's damages if the ultimate ruling is that the team be allowed to move immediately to Oklahoma in order to avoid a follow-up trial over the financial questions.

The city also filed an opposition to Bennett's lawyers request to open up some private documents requested from Seattle developer Matt Griffin in regard to the city's efforts to fund a KeyArena remodel and perhaps purchase the team in partnership with Microsoft chairman Steve Ballmer, Costco CEO Jim Sinegal and software magnate John Stanton.

Griffin turned over information subpoenaed by Bennett's lawyers, but requested some sensitive material be classified "for attorney's eyes only" and not be available to Bennett's group or the public.

The city said it definitely is interested in working with Griffin or anyone else, including Bennett, who might want to keep the Sonics in Seattle. But it says PBC never explains why, "as a prospective seller of the Sonics, it has a right to see the most confidential documents of a prospective buyer, Matt Griffin."

Looks like Seattle lawyers did get some of their wants:

Judge: NBA has to turn over relocation documents | NewsOK.com (http://newsok.com/judge-nba-has-to-turn-over-relocation-documents/article/3236128/?tm=1209421749)

It's just discovery.... wake me up when something interesting happens. Keep in mind that these are big firms which rather than litigate this thing judiciously, will bill all the hours they can and fight over petty issues such as discovery.

As to the comments regarding Schultz backing out of this thing, not a chance. The guy has access to a lot of cash. Fighting this thing is important to him protecting his personal image in Seattle -- even if he and his lawyers know it's an uphill battle.

Midtowner - you need to read Schultz's letter to members of his old ownership if you haven't read it yet. He plans to stay out of it 100% and said is lawyer will handle everything, even any press conferences. He also said he dosn't want the team back. He only wants the Court to find a local ownership group. Something he said he spent every ounce of his being trying to do and couldn't. He is in it 100% for the public relations image. If it works out for him then he becomes the prodical son, if it doesn't then he can always say he did everything he could.

Bennett has done more to keep the Sonics in Seattle than Schultz ever did.

I don't have the time or energy to comb through all that material. That's why I have you guys.

I'll just sit back here and let y'all throw this stuff around and throw in my 2-cents from time to time if that's alright :)

These folks from Seattle like to throw around words like "fraud" and "justice" and "fair dealing" and whatever... I see lots of terms of art being thrown around with little/no understanding of what those things really mean and what effect if any those things have on the outcome here. I see a lot of premature wrangling with issues before we've even seen the court clear up simple matters, such as standing. On that issue alone, I can see this thing being 12(b)(6)'d (that means dismissed because the cause of action fails to state a claim upon which relief can be granted) right out of town.

The constructive trust remedy is pretty insane though, isn't it? There's just so much wrong with his suit that it's not even worth delving into unless someone is willing to pay me a couple-hundred dollars an hour to do so.

-- but I'm not a lawyer yet, so that's doubtful.

What may be going on here though is a concerted effort by Seattle's good 'ol boys to do a mitzfah for their city -- that is to say that all of this litigation makes Bennett offering the city a more favorable settlement more attractive than not. At this point, through May, a settlement moving the team, wherein Bennett agrees to certain painful financial concessions (which OKC will probably at some point be asked to pay him for) would not shock me.

I agree. It's barely colorable. and surely the court will noticed he doesn't want to rescind..he doesn't feel THAT sstrongly so as to have to disgorge his profits from the sale...he just wants someone else to buy the team......freaking joke.

I agree. It's barely colorable. and surely the court will noticed he doesn't want to rescind..he doesn't feel THAT sstrongly so as to have to disgorge his profits from the sale...he just wants someone else to buy the team......freaking joke.

He's not asking for rescission. He's asking that the team be placed into the ownership of a trust for the purpose of selling the team to a Seattle owner. Schultz is very happily hanging on to his 350 million.

That's what I don't get here -- he has raised an issue of what has to be material breach. The only trouble is that even under his own facts, even if there was a breach, it wasn't material. He got paid, that was the purpose of the deal, you've got to have a material breach to even get to the question as to whether we're going to unwind the deal and do the constructive trust.

I see three major hurdles: 1) Standing; 2) material breach?; 3) Is equitable relief necessary in this case, or will cash damages suffice?

In my own mind, trying to be as objective as I can (and obviously being not totally sure what everything says and where it is), I don't see a likelihood of any of those being cleared.

Ok, what does this mean? Section 5.3 of the purchase contract: "For a period of twelve months after the Closing Date buyer shall use good faith best effort to negotiate an arena, lease, purchase, use or similar arrangement in the King, Pierce or Snohomis counties of Washington as a venue for the team's games, to be used as a successor venue to the Key Arena, provided, however, that the process described in this Section 5.3, and the entering into any such arena lease, purchase, use or similar arrangement, shall be at the Buyer's sole discretion."

betts, truth be told, that's a pretty vague provision. I'm not too worried about "good faith." I am more worried about "best effort."

My worry is somewhat mitigated by the fact that "Buyer" has "sole discretion" over whatever process he should employ.

I don't see a likely construction of this to mean that if "Buyer" were to advance a proposal.. say.. in the Washington Legislature, spending lots of money on lobbyists, etc., only to be rebuffed, that if he has six-months remaining on the deal, he has to think of some other way to keep those negotiation wheels spinning, lest he be in default.

Even so, I still have a hard time seeing Section 5.3 as being material.

A little black letter law here, it's the Restatement, not the law in Washington, but it might be the law in Washington, and likely is:


The Restatement (Second) of Contracts lists the following criteria to determine whether a specific failure constitutes a breach:

In determining whether a failure to render or to offer performance is material, the following circumstances are significant: (a) the extent to which the injured party will be deprived of the benefit which he reasonably expected; (b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived (c) the extent to which the party failing to perform or to offer to perform will suffer forfeiture; (d) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances; (e) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing.

American Law Institute, Restatement (Second) of Contracts § 241 (1981)

Here, I have a problem with Schultz succeeding on (a) -- he hasn't been damaged, he has his money, that could be all she wrote. On (b), how do we compensate Schultz -- he has been paid a huge premium for a team he wanted to sell. What benefit does he get from Bennett continuing on a path of negotiation which, if you'll read what folks in Seattle were saying while this was going on, would have been futile anyhow? Similar arguments can be made throughout that definition.

I think Schultz' legal team has to clearly lay out what benefit of the bargain Schultz is being denied by Bennett's arguably early cessation of negotiations. I think they also have to lay out exactly what avenues Bennett might have/should have explored which would ultimately have yielded something along the lines of what Schultz was looking for from Seattle in the first place.

Ultimately, I don't think the fact that the PBC was discussing the fact that they wanted out of Seattle to amount to much. If you look at actions, rather than words, I think the case is pretty clear. This suit is a long shot.

He's not asking for rescission.


Yeah, that's what I said.

Let us not forget that the legislature adjourned for the year before Bennett's time was up and the governor refused to open a special session to consider Bennett's plan. The time expired while the legislature was in recess. How can Bennett work with the state when the state is off the clock?

Good insights Midtowner, thanks.


What may be going on here though is a concerted effort by Seattle's good 'ol boys to do a mitzfah for their city -- that is to say that all of this litigation makes Bennett offering the city a more favorable settlement more attractive than not.

Yeah, you have to think that at some point, if they haven't already, the PBC lawyers will sit down with Shultz's and the city's lawyers and say "ok, what does it take to make this circus go away". I think they want to see how badly Bennett wants to move the team this year. However it's creating a stand off on a few points:

Bennett doesn't want to pay more than it's worth. There has to be a magic number between revenue lost in Seattle, revenue generated in Oklahoma City, the cost of these lawsuits, and the value of the lease along with any superficial value the PBC has for getting the team they want in OKC.

On the other side, Seattle has to save face, get paid at least fair value of the lease, weigh the benefits of possibly retiring their Key Arena debt and not ruin their relationship with the NBA going forward, if they haven't already.

Let us not forget that the legislature adjourned for the year before Bennett's time was up and the governor refused to open a special session to consider Bennett's plan. The time expired while the legislature was in recess. How can Bennett work with the state when the state is off the clock?

I guess PBC was in breach when it didn't have all of the legislators kidnapped and dragged up to the state house to continue negotiations.

I mean.. if you're obligated to deal with someone "in good faith" for 12 months and there's no one left who will talk to you, what then?

Nice little quote in our favor...not that Couch has anything to do with Bennett's behavior, but still.


In other developments, officials for the City of Oklahoma City have turned over 1,218 pages of documents subpoenaed by Seattle attorneys. Also, Oklahoma City manager Jim Couch was questioned by Seattle attorneys April 18.

The turned-over documents include an Aug. 27 memo from Couch to the Oklahoma City mayor and city council. Couch wrote Oklahoma City had not talked with the Sonics' owners yet about what Oklahoma City would be willing to pay to woo the team here.

"Our understanding is the ownership group wants to pursue a new arena deal in Seattle before taking an action on a possible relocation of the” Sonics, Couch wrote, "We respect that. While we are interested in having a permanent NBA team in Oklahoma City, it is simply out of place to have any discussions of what we as a city or a community might do to facilitate an NBA franchise until a real opportunity arises.”

With some reluctance I've started a blog article in which I'm attempting to identify and discuss in a no-hyperbole manner some of the issues involved in the 2 cases pending in Western District, Washington, litigation. I've excluded the class action by season ticket holders as just being too damn dumb to be worth the trouble. I'm attempting to assemble what documents strike me as being relevant, and, before it's done, I'll be adding commentary about various issues and how they might be resolved. The article will surely not be "definitive" but it may be helpful in seeing pros and cons of the parties' various positions.

I've not gotten to that part yet, but here's where the article is, in its very beginnings: Doug Dawgz Blog: What's This Crud About No Movie Tonight? (http://dougdawg.blogspot.com/2008/04/whats-this-crud-about-no-movie-tonight.html)

For the moment, you will find links there to other html pages I've made which contain, verbatim, Schultz's federal court complaint, and various other documents (e.g., provisions in the "Schultz/Bennett" contract which may have relevance in the matter). I'll be adding other documents along the way.

Although I've not begun to discuss it in the article yet, one of the provisions in the Schultz/Bennett contract which seems to stand out is this one:


¶9.2 No Third-Party Beneficiaries (p.39)

This Agreement shall not confer any rights or remedies upon any Person other than the Parties, and their respective successors and permitted assigns, other than as specifically set forth herein.
On first blush, this is what the Schultz litigation appears to be attempting to do ... effectively turn the contract into a 3rd party beneficiary contract so that the franchise could be handed over to owners in the Seattle area who would be inclined to keep the team there. That's just a 1st impression, though ...

Nice little quote in our favor...not that Couch has anything to do with Bennett's behavior, but still.


In other developments, officials for the City of Oklahoma City have turned over 1,218 pages of documents subpoenaed by Seattle attorneys. Also, Oklahoma City manager Jim Couch was questioned by Seattle attorneys April 18.

The turned-over documents include an Aug. 27 memo from Couch to the Oklahoma City mayor and city council. Couch wrote Oklahoma City had not talked with the Sonics' owners yet about what Oklahoma City would be willing to pay to woo the team here.

"Our understanding is the ownership group wants to pursue a new arena deal in Seattle before taking an action on a possible relocation of the” Sonics, Couch wrote, "We respect that. While we are interested in having a permanent NBA team in Oklahoma City, it is simply out of place to have any discussions of what we as a city or a community might do to facilitate an NBA franchise until a real opportunity arises.”

Every bit helps. I would assume conflicting e-mails help as well. Then we have the Muckleshoots, who only offered land, the mayor of Seattle who never lobbied the legislature on the ownership group's behalf, and Schultz, who was surely reading the newspaper all this time and never spoke up. It would be interesting to know what Sabey ever did or didn't offer. The other thing in Bennett's favor is that he had to have an acceptable lease as well, per the terms of the side letter. If people were offering land or an arena, but wanted outlandish profits from it, I see nothing that says Bennett would have had to take the offer.

Seattle is now asking for a 6 month delay to the trial:

City may ask delay in Sonics trial (http://seattlepi.nwsource.com/basketball/361333_arena01.html)

Unless Schultz wins his suit, there is a lease with Oklahoma City beginning in 2010. Were I Bennett, I would drop this suit if the judge delays the trial, as they won't be playing in OKC this fall anyway if that happens. I would then spend all my efforts trying to buy out the lease. Because, unless the ownership of the team reverts back to Schultz, it's completely useless for Seattle to build a new arena or fix up the Key unless they're trying to get a different NBA team. So, barring a problem with the Schultz lawsuit, Seattle would be stupid not to settle out of court. They may be stupid, but Bennett could well lose this first lawsuit anyway, which would keep him in Seattle for the next two years anyway and cost him all the accrued legal fees.

It won't revert back to Schultz, if Schultz wins it will go into a constructive trust.

betts, I'm wondering from a legal opinion (perhaps Mid or Doug can chime in), if it's possible for Bennett to move in 2010 with the lawsuits still going on or delayed.

It won't revert back to Schultz, if Schultz wins it will go into a constructive trust.

betts, I'm wondering from a legal opinion (perhaps Mid or Doug can chime in), if it's possible for Bennett to move in 2010 with the lawsuits still going on or delayed.

I know people are saying Schultz could file an injunction to keep the team from moving. But there will be no lease with the Key Arena. The Sonics' owners are prevented from signing an extension with Seattle by their lease with Oklahoma City.

Yes, I too would like to hear what a lawyer has to say on this matter. I would hope the lawsuit would be over in two years, because, were Schultz to get an injunction, then Bennett for sure would be stupid to press on with this lawsuit. It will only cost him money, and have no effect on the location of the team.

This certainly is becoming complicated. WIth the approval of the OKC/Ford Center lease and the Sonics...that would be a lot of "undoing" the court would have to do. Plus, great point betts, there's still no lease with KeyArena, and there can't be one freely negotiated now. So it's like: WTF. What can we even do here if Seattle/Schultz somehow wins? I don't think you can FORCE Clay & Co. into extending the lease, and if SChultz wins, there's not even a sure-buyer right now....

Y'all should go check out Doug's site. He's writing a pretty decent memo regarding the whole situation.

Clay can't be forced into signing a lease in Seattle. In fact, it would be illegal. The Sonics lease with OKC says the Sonics cannot extend or sign a new lease with Seattle.

Analysis: City's Sonics options limited
Either sue or settle for an NBA future
By GREG JOHNS
P-I REPORTER

As the city of Seattle and Sonics ownership continue on their collision course toward a June trial date over the KeyArena lease situation, three simple scenarios remain: The city will win the lawsuit, lose the lawsuit or settle the lawsuit in the six weeks that remain before the trial.

Each scenario is fraught with variables that would determine the future of professional basketball in Seattle. Here's a look at the potential outcomes:


The city wins the court case

On the surface, this seems the best outcome for Seattle and its sports fans. But even a favorable ruling from Judge Marsha Pechman wouldn't represent an all-out victory for the city.

A court victory would merely lock the Sonics into playing their home games at KeyArena for the final two years of their lease, through the 2009-10 NBA season. The team would still be free to move to Oklahoma City in 2010 and, indeed, NBA owners have already voted to approve that move, even though another relocation rubber-stamp vote would be required at that point.

From a purely fiscal perspective, a court win would be a money loser for the city. If the Sonics move in two years, the city will still owe about $25 million on the bonds used to finance KeyArena's last remodel in 1994. That number currently sits at $37 million, with the city paying $6.3 million a year toward ultimate debt retirement in 2014.

Assuming attendance and interest in the team wane in two lame-duck seasons, the city will need to dip into its general fund for more than $6 million over those two years to make up for the expected revenue shortfall.

The original concept of the KeyArena remodel was that Sonics-related revenue from suites, club seats, naming rights and admission taxes would cover operating costs and payments of the $74 million in construction bonds. But since 2001, revenue has declined to the point where the city has had to subsidize the facility from its general coffers.

Tom Israel, director of finance for Seattle Center, said Sonics revenue for 2007 was about $3.3 million, leaving a $3 million shortfall for the city to absorb in order to make the $6.3 million debt payment. With the team's continuing struggles and uncertain future, Seattle Finance Director Dwight Dively expects that subsidy to continue in the $3 million range each year the Sonics remain at KeyArena under their current lease.

Thus the idea of "bleeding (Clay) Bennett" and making the Sonics chairman pay by binding the Sonics to KeyArena for two more years would have a similar, though smaller, effect on the city itself, given an offer to buy out the lease would presumably take care of that remaining debt. But that factor isn't weighing into Mayor Greg Nickels' decision to fight the Sonics chairman in court.

"This has never been about the money, and it's not now," said City Attorney Tom Carr. "Obviously the city doesn't like losing money and budgets are tight, but it's really about having pro basketball in Seattle. That's what (the original) $74 million investment in KeyArena was about and why we're suing to enforce the lease now."

What a court victory would buy is two more years for the city to see if a solution might evolve. In theory, that would be two years in which to convince the Legislature to help fund a KeyArena remodel or for area business leaders to unearth a privately funded arena solution that would help make the NBA again work financially in Seattle.

Some feel if the region comes up with a modern facility, the NBA will find a way to keep a team in a city that has 41 years of history with the league.

There is risk in this scenario, given that a full-court legal battle with the NBA would do little to quiet the growing discord between NBA commissioner David Stern and city officials. Not to mention an all-or-nothing court fight excludes the possibility of any settlement that might pave the way for a replacement franchise or help pay off the remaining arena debt.

If the only benefit of a court victory is to have the current Sonics play two more money-losing seasons in Seattle before fleeing to Oklahoma, that would seem a shallow victory to most.

Yet the flip side is that a victory in Pechman's court could put the city in stronger negotiating position to gain a replacement franchise after the trial, given the NBA and Bennett would then know the only way to avoid two extremely difficult seasons in Seattle would be to negotiate their way out.

Some Sonics fans don't want the city to give an inch to Bennett and would be furious if a settlement to allow the team's departure occurred after Seattle had actually won in court.

Carr said it's always possible to negotiate a post-trial agreement, but downplayed the likelihood of one.

"It would have to be something acceptable, and I haven't seen anything indicating that," he said. "I'm not optimistic about resolving this (outside the courtroom)."

Another element to the city's case is its relationship to a separate lawsuit filed by former Sonics majority owner Howard Schultz, who wants the court to rescind his 2006 sale to Bennett's group. That suit also has been assigned to Pechman.

If the city wins its case, Schultz has more time to pursue his allegations that Bennett's group failed to abide by a good-faith agreement to keep the Sonics in Seattle.

Should the city lose, Schultz likely would seek an injunction to prevent the team from being moved to Oklahoma City before his own trial.

Talk of a preliminary injunction being filed by Schultz's lawyers before the city's June trial seems unlikely, given that they'd need to essentially lay their case before the judge at that point without benefit of discovery and hope for a favorable ruling. By waiting for the city's trial, Schultz could gain the same outcome without waging, and paying for, his battle prematurely.


The city loses the court case

This is clearly the worst-case scenario for those hoping to save pro basketball in Seattle, since a defeat in Pechman's court would allow the Sonics to move immediately to Oklahoma City.

All that would be left to work out would be the financial obligation required from the Sonics to pay off the remaining two years of rent on their lease. The team's lawyers filed a motion last week asking Pechman to make that financial determination during the trial rather than leaving it hanging for another court battle.

The city responded Wednesday by saying it would seek a six-month trial delay, as well as a jury decision, if Pechman agrees to include the financial decision in the upcoming case.

This particular battle should not be mistaken for a buyout offer. A buyout would be a way for the Sonics to avoid the whole legal scrum and just move to Oklahoma by satisfying the city in a settlement. The Pechman decision refers to what amount of money the city would be legally owed under the terms of the lease, should the Sonics win their case and be allowed to move immediately.

Ultimately, a loss in court would leave the city with no remaining leverage. The Sonics could move, the league would have no motivation to guarantee any future team and KeyArena would still have a large debt with no major tenant.

A KeyArena analysis done for the city by an independent group in 2006 said if the Sonics did depart, the city would still need to spend at least $20 million to upgrade the facility to keep it competitive for other events.

That report indicated Key- Arena could remain viable if the Sonics moved, but would need to be dramatically restructured if another competing multipurpose arena were built in the Seattle area for pro basketball.


The sides agree to settle

Lots of areas of gray in this scenario, which could include any variety of agreement between the city, Sonics and NBA. There's plenty of motivation for all parties to settle, so don't be surprised if this is the ultimate outcome as the trial date nears.

Nickels and Deputy Mayor Tim Ceis insist they're not interested in settling, but that could change if Bennett and Stern offer up a scenario in which the city can save both face and money.

Carr rejected Bennett's $26.5 million buyout offer in February, but that attempt generated interest from the City Council, which remains fiscally responsible for solving Seattle Center issues.

Given that Stern said the Sonics will lose $30 million a year if forced to continue at KeyArena, it seems as if any offer of less than $60 million would save Bennett and his partners money. Not to mention, the Oklahoma City owners are eager to avoid all this unpleasantness and begin reaping the rewards of moving to their hometown.

Former U.S. Sen. Slade Gorton, who heads the city's legal front, has said it would make sense now to pursue an agreement with Bennett as long as such a settlement included a guarantee of a replacement team.

But Carr, the man ultimately responsible for such negotiations, said Gorton was offering his own opinion, and the city's position has never wavered.

"The city's stance is we're going to trial," Carr said. "There's nothing on the table. We don't have a settlement position. We had the $26 million offer and rejected it. There really isn't anything else. There has been no offer and nothing to consider."

Common sense -- and Carr himself -- indicate there is always a price that could entice city leaders. But Bennett would need help from Stern in coming up with any solution that involved either assuring an expansion team or relocation of an existing franchise to Seattle.

Bennett appears quite willing to leave the Sonics' name and history with Seattle. His lawyers included that as part of the initial $26.5 million buyout offer.

Additionally, Bennett indicated in an e-mail obtained by the city's lawyers that he likes the idea of allowing Oklahoma City a fresh start with an all-new team name and colors.

The hard part figures to be assuring Seattle in any of these scenarios that it might have another team to call the Sonics at some point down the road. Unless that little problem can get resolved, any sort of settlement before the June 16 trial seems unlikely and the sides will duke it out in U.S. District Court.

Sonics raise claim of 'unseemly alliance'
By GREG JOHNS
P-I REPORTER

The ongoing legal saga between the Sonics and city of Seattle took a new twist Friday with the team's lawyers filing papers claiming "an unseemly alliance" between the K&L Gates law firm, developer Matt Griffin and the city.

K&L Gates, hired by Mayor Greg Nickels to represent the city in its court battle with the Sonics' Oklahoma ownership group, also was representing Griffin as he worked with the city in an attempt to put together a $300 million KeyArena remodel project in conjunction with Microsoft chairman Steve Ballmer, Costco CEO Jim Sinegal and software mogul John Stanton.

In their latest motion, the Sonics lawyers renewed previous charges that the city's lawsuit over the KeyArena lease is part of a plan designed to force a sale to Griffin's group instead of merely solving a dispute over the lease's specific performance clause.

"Particularly based on over a thousand additional documents Griffin just produced, it is clear that the plan from the start was to use this litigation to create financial bleeding for the (Pro Basketball Club) to force them to sell to Griffin's group," the motion says.

"This scheme was jointly developed by the City, Griffin and K&L Gates, which until just a few weeks ago represented both the City and the Griffin group."

Sonics raise claim of 'unseemly alliance' (http://seattlepi.nwsource.com/basketball/361677_arena03.html)

This actually doesn't hurt us any. Still need to win in June to have them this year.


U.S. District Court Judge Marsha Pechman wasted no time in settling one issue of the impending trial between the city of Seattle and the Sonics' ownership group, issuing an order Tuesday that denies the team's motion to include the determination of its financial obligations should it win at trial.

The decision means the trial remains scheduled for a June 16 start. Should the city lose on the specific performance question in that case, a second trial would likely be needed to determine the amount of money the Sonics would need to pay in order to satisfy their rent obligations and be free to move to Oklahoma City.

That second trial wouldn't preclude the team from moving by next season, but the city could appeal that decision and seek a stay pending the appeal that would prohibit the move until the case is resolved.

In other words, Clay Bennett's ability to move the franchise to Oklahoma by next season remains very up in the air as the legal drama plays out.

Tuesday's decision by Pechman puts to rest a question that arose April 24 when the Sonics' lawyers filed a motion asking that the question of how much money Bennett's ownership group would need to pay to satisfy the lease obligations be determined during the June trial.

But the city's attorneys countered by successfully arguing that the motion changed the complexity of the case, saying they'd need a six-month delay if the motion was granted.

The Sonics filed a brief Monday saying they'd withdraw the motion if such a delay were necessary, but Pechman resolved that situation with Tuesday's order denying the motion altogether.

She noted that the Sonics agreed at a Jan. 29 scheduling conference that the entire case revolved around a "single declaratory issue" over whether the city is entitled to specific performance of having the team play the remaining two years of games at KeyArena under its current lease.

Pechman said the request to expand the scope of the argument should have been made at the time of the scheduling conference, during which she set the format for the six-day bench trial to begin June 16 in her U.S. District courtroom.

"Defendant does not offer any reason why the counterclaim could not have been brought in the original pleadings," Pechman said in her ruling. "In light of the accelerated trial schedule, granted at Defendant's request, the Court finds that Defendant's proposed amendment would be prejudicial to the City's development of discovery in this case."


Judge rejects Sonics' motion (http://seattlepi.nwsource.com/basketball/362052_arena07.html)

I agree, if we win in June, the team will probably move and then discuss financial "damages" later as Seattle delays it. If we loose, it's a moot point. If we loose I hope Clay and boys hang in there to 2011.

I do too. I'll send them a check for $50 to help with legal fees. :)

I have a bad feeling we're not going to win that suit, though. Seems like a great use of the court's equity powers to enforce the specific performance clause. Need to SETTLE SETTLE SETTLE.

I do too. I'll send them a check for $50 to help with legal fees. :)

I have a bad feeling we're not going to win that suit, though. Seems like a great use of the court's equity powers to enforce the specific performance clause. Need to SETTLE SETTLE SETTLE.

This shows nothing except for the fact that the court thinks there should be two trials. It's right. The damages issue will be greatly different whether the specific performance part of the contract is enforceable or not and the complexity of the trial would also be greatly different.

If the Sonics win the specific performance issue, expect a quick settlement.

If not, the team will be here in 2011.

do we know exactly what this "single declaratory issue" says? i've heard people in seattle mention that the lease says they are bound to play and cannot buy out.

do we know exactly what this "single declaratory issue" says? i've heard people in seattle mention that the lease says they are bound to play and cannot buy out.

It's whether the city is entitled to specific performance of its lease. The Sonics want out, but are currently enjoined by a temporary injunction issued by the District Court saying they can't move pending the outcome of the current suit.

There will be a trial on June 12th after which I'm sure the judge will take the matter under advisement for a short period of time and issue a ruling.

The people in Seattle are sort of right -- that this is the issue. The outcome has not yet been determined.

I will say as I have said before that specific performance is something called an "equitable remedy." Equitable remedies mean that the party will be ordered to do something. Generally, in court, we award cash damages. Courts prefer to award cash damages and generally will only award equitable relief when cash is inadequate.

The Sonics' attorneys will doubtless be arguing that Seattle is entitled to the amounts due under the lease, just like if a tenant moved out of an apartment early.

The city of Seattle will be arguing that aside from the value (which is a loss to them) the city receives from the lease, there are a lot of indirect benefits, i.e., sales tax revenue, economic impact, etc. which come as a direct result of the existence of this lease. They will also argue that even if those indirect remedies are enforceable, the equitable relief should still hold since it's in the contract.

Both positions have their merits. Hazarding a guess as to how this goes would be fruitless at this point. We'll see sometime after the 6-day trial.

For us future Sonics fans, the question is really this: Should we be saving our pennies to buy tickets in 2008, 2009, 2010 or 2011?

There is no equitable remedy short of Shultz' cockamamie lawsuit that'll keep the Sonics in Seattle past the 2010 season.

This shows nothing except for the fact that the court thinks there should be two trials. It's right. The damages issue will be greatly different whether the specific performance part of the contract is enforceable or not and the complexity of the trial would also be greatly different.

If the Sonics win the specific performance issue, expect a quick settlement.

If not, the team will be here in 2011.


I think you're conflating damages and specific performance. Basically, there will be no "damages" if the team is held to specific peformance (i.e.- Sonics have to play out the lease). They would have fulfilled their contractual obligation as defined and mandated by the court, so how would there be a breach or damages?

Anyway, like everyone abov eyou said, yes, this basically means very little. It's important to note that the June trial date did not get delayed as a result. The judge could have granted the Sonics' request to enumerate damages in the same trial AND delayed the trial at the same time.
(Nice little primer on equitable v. legal remedies! :))

I think you're conflating damages and specific performance. Basically, there will be no "damages" if the team is held to specific peformance (i.e.- Sonics have to play out the lease). They would have fulfilled their contractual obligation as defined and mandated by the court, so how would there be a breach or damages?

If specific performance is ordered, the city might be going for attorney's fees. I guarantee you that the issue of damages won't be dead either way. It'll be still alive, but as I said, vastly different. How I know this is that there are biglaw (spelling intentional) firms on both sides of the case. They will never not file a motion when it is possible to file a motion (regardless of the merit of that motion). Those guys are in the game for one reason and one reason only -- to bill their rich clients for as many hours as humanly possible.

Attorneys fees = type of monetary relief. Damages = type of monetary relief. Damages != attorneys fees. No big deal, just good to be specific when using terms of art.

Point taken, lesson learned :D

by the way, OKC would only have to wait until 2010 (not 2011) if Specific Performance is enforced.

Just thought I'd chime that in - it's only two basketball seasons away; and that's worse case scenario.

HOTROD, doesn't the contract state that they have to play through the 2010 season? Even if it says through 2010, I highly doubt the NBA will allow Bennett to move New Years 2011 in the middle of the season. I'm sure their re-approval of relocation would be contingent upon the completion of the season.

Current season: 07-08
Next Season: 08-09
Last Season in Key: 09-10
OKC: 10-11

DOes that sound right?

The city of Seattle will be arguing that aside from the value (which is a loss to them) the city receives from the lease, there are a lot of indirect benefits, i.e., sales tax revenue, economic impact, etc. which come as a direct result of the existence of this lease. They will also argue that even if those indirect remedies are enforceable, the equitable relief should still hold since it's in the contract.

This is an interesting argument. Is there any precedent for it?

Obviously, the fact that this lease is with the municipality itself changes it's nature a bit, but if they were successful with this argument, wouldn't it then be possible for cities to sue every time a business with a measurable impact on the local economy leaves the market? Or then couldn't, say, a mall tenant sue an anchor tenant for the economic benefit the anchor provided to the smaller tenant if that tenant decide to leave?

We all know these organizations argue their positive economic impact as leverage in lease negotiations, but on what basis can the courts make them legally responsible for that benefit?

Obviously, if the Sonics break their lease, they are responsible for any direct loss of revenue generated by and negotiated for in the terms of the lease. But making them responsible for the tangential economic benefit seems pretty far reaching and would also make room for tons of suits by cities and other merchants against large scale businesses that want to move away from the market.

I don't have any knowledge of case history on these types of things, but I'd be interested in knowing what kind of legal reasoning is used to support a claim and what prevents such arguments from applying to all instances where a lease of any kind is broken?

If the Sonics have to play out their lease out, the last season in Seattle is 09/10. The team would begin play in OKC for the 10/11 season which begins in November of 2010.

This is an interesting argument. Is there any precedent for it?

Sort of. When the Minnesota Twins found themselves in the same situation as the Sonics -- wanting out and fighting a specific performance clause in a lease sought to get out -- the city government sued. In Minnesota (not the same jurisdiction, so this isn't binding by any means), the Minnesota Appellate Court (which is really, really not persuasive since it's an intermediate court) affirmed a district court's holding that:


A use agreement between a governmental sports facilities commission and a professional baseball team may not be a *218 typical commercial lease for which money damages can fully compensate the nonbreaching party for damages, when the agreement provides that the benefit of the bargain to the commission is the teams promise to play its home games at the publicly funded and operated stadium. Metropolitan Sports Facilities Com'n v. Minnesota Twins Partnership, 638 N.W. 2d 214 (Minn.App., 2002).

The prose of the District court's opinion (the lower court whose opinion was sustained) really tugs at the 'ol heart strings:


. . . The balance of harms weighs in favor of granting the temporary injunction. Baseball is as American as turkey and apple pie. Baseball is a tradition that passes from generation to generation. Baseball crosses social barriers, creates community spirit, and is much more than a private enterprise. Baseball is a national pastime. Locally, the Twins have been part of Minnesota history and tradition for forty years. The Twins have given Minnesota two World Series Championships, one in 1987, and one in 1991. the Twins have also given Minnesota legends such as Rod Carew, Tony Oliva, harmon Killebrew, Kent Hrbek, and Kirby Puckett; some of which streets are named after. These legends have bettered the community. Most memorably, these legends, volunteered their time to encourage and motivate children to succeed in all challenges of life. Clearly, more than money is at stake. The welfare, recreation, prestige, prosperity, trade and commerce of the people of the community are at stake. The Twins brought the community together with Homer Hankies and bobblehead dolls. The Twins are one of the few professional sports team in town where a family can afford to take their children to enjoy a hot dog and peanuts at a stadium. The vital public interest, or trust, of the Twins substantially outweighs any private interest. Private businesses were condemned to build the Metrodome. In condemnation proceedings, the building of the Metrodome was deemed to be in the interest of the public. The Commission, the State, citizenry and fans will suffer irreparable harm if the Twins do not play the 2002 baseball games at the Metrodome. See City of New York v. new York Jets Football Club, Inc., 90 Misc. 2d 311, 394 N.Y.S.2d 799 (New York Co., Sup. Ct. 1977); City of new York v. New York Yankees, 117 Misc. 2d 332, 337, 458 N.Y.S.2d 486, 490 (New York Co. Sup. Ct. 1983).

As I said, that's not even of strong persuasive value. Further, this stuff was only used to grant a temporary injunction, not a permanent one, and certainly not upholding the specific performance clause of the Minnesota Twins contract. The aftermath of this case was that the team and the city came to a new agreement, the owner sold, I guess he got a "sweet flip" or something of that nature, and the Twins stayed.


Obviously, the fact that this lease is with the municipality itself changes it's nature a bit, but if they were successful with this argument, wouldn't it then be possible for cities to sue every time a business with a measurable impact on the local economy leaves the market? Or then couldn't, say, a mall tenant sue an anchor tenant for the economic benefit the anchor provided to the smaller tenant if that tenant decide to leave?

I don't know if I'd extend the rule that far. I suppose such a case could be used to argue in favor of such a proposition. I'd argue (and I think it'd be a good argument) that the relationship between the city and an NBA team is different than a relationship between the city and a car manufacturer. For example, we don't name streets after employees of the month at the GM plant, for a sports franchise? You betcha. The relationships are just different. I think that the argument from the get-go is a loser, extending the rule past something so intertwined with the city and its identity is even more of a loser.


We all know these organizations argue their positive economic impact as leverage in lease negotiations, but on what basis can the courts make them legally responsible for that benefit?

Do you know what the difference between a federal District Judge and God is?

-- God doesn't think he's a federal District Judge. The basis would be that there is harm done, that the city can prove it, and that the judge buys what the city is selling. That, of course, remains to be seen. As Mallen pointed out, damages don't even become an issue unless the PBC wins round 1.


Obviously, if the Sonics break their lease, they are responsible for any direct loss of revenue generated by and negotiated for in the terms of the lease. But making them responsible for the tangential economic benefit seems pretty far reaching and would also make room for tons of suits by cities and other merchants against large scale businesses that want to move away from the market.

I don't have any knowledge of case history on these types of things, but I'd be interested in knowing what kind of legal reasoning is used to support a claim and what prevents such arguments from applying to all instances where a lease of any kind is broken?

See above :)

BDP: some of your points actually help Seattle's position. Because the harms of the Sonics leaving to the local economy are subtle, attenuated, and hard to enumerate, the Sonics' presence there is basically irreplaceable by just cash. Just because they take a lot of logical steps to prove those damages, that doesn't mean the damage doesn't occur. In that case, it often makes more sense for a court to award specific performance. (Take all that with a grain of salt as being very general overviews.)

There was one difference in the Minnesota case. Rather than an owner wanting to move the team, this was an instance where the league wanted to contract and completely disappear the team. I don't know if the fact that there is an actual owner would make any difference in this situation, but they are not completely analgous.

I'm not really trying to help or hurt Seattle's argument as much as just understand what that argument is and based on Midtowner's explanation, it's seems to be a sentimental one more than anything and I was wondering what the legal basis was for arguing that if a team provides an unusual amount of sentimental value for a community, it then becomes responsible for the tangential economic impact of it's presence in such a way that it may not only have to compensate the community for the loss of that sentiment by way of monetary damages, but may also be forced to execute specific performance to maintain that sentiment. Maybe they could argue that was the intent of the specific performance clause all along, which may be their angle altogether.

However, if it's based only on the sentiment (i.e championships, all-stars, celebrities status of players, community culture, atmosphere, etc.), as the text of the district court's opinion Midtowner provided above suggests, then, again, that can be argued for a broader range of businesses and industries. No doubt some businesses become institutions in their communities, not just for the service they provide, but for the cultural status and sense of identity and community they create.

Cities name streets after businessmen all the time. Hell, we almost named a street after a hotel chain. Some companies in smaller communities become the de facto center of the community's culture and not just in a symbolic way like sports teams do. And some serve as icons for even the biggest of markets. Are they responsible for economic impact of their cultural importance to such a degree that they are legally obligated to provide that economic benefit in monetary damages if they leave that community? I guess they are arguing that if you have a contractual agreement with the city, that you are responsible for the economic impact you provide to that city and the better you are at what you do, the more you are responsible for.

It's interesting.

Well, BDP, I think that it is an argument [the emotional hullabaloo], but I don't think it's a great one.

In our present case, we already have a temporary injunction in place. The case I cited to was about a temporary injunction. I'm not sure what the standards for issuing such a thing under Seattle law would be, but generally speaking, a temporary injunction is issued in a case to preserve the status quo until the merits can truly be decided. What needs to be shown is that if the defendant is allowed to do the thing he wants to do, the plaintiff (or other party) will suffer irreparable harm. Sometimes, there's a requirement that there's a likelihood that the plaintiff will win on the merits, but I don't know if that's the case here.

Just keep in mind that the two matters are extremely different as the Sonics litigation is far past the point of a temporary injunction -- in fact, in the interest of expediency, it the PBC just let Seattle have a pass on that issue so that they could go to trial.

The standard at trial is nowhere near the same. This is just an example of the sort of argument Seattle is going to employ to show why the equitable remedy is necessary.

A couple of new developments.........


Documents from potential Sonics buyers to remain sealed

A federal judge ruled documents subpoenaed from a group that attempted to buy the Seattle SuperSonics from their Oklahoma-based owners can remain sealed.

U.S. District Judge Martha Pechman ruled Thursday that documents from Seattle developer Matt Griffin's group that were labeled for "attorney's eyes only" can remain confidential.

In seeking to have the documents unsealed, attorneys for SuperSonics owner Clay Bennett accused the potential owners and the city of Seattle of duplicity in an effort to force him to sell the team.

Pechman ruled that the SuperSonics didn't make a good-faith effort to resolve the document dispute and failed to abide by an agreed-upon rule requiring 10 days to pass before challenging the confidentiality of documents.

Local News | Documents from potential Sonics buyers to remain sealed | Seattle Times Newspaper (http://seattletimes.nwsource.com/html/localnews/2004397987_apbknsupersonicstrial.html)


Microsoft mogul Steve Ballmer has been subpoenaed by attorneys for the Sonics owners. In a filinig dated April 28, Ballmer's attorney Llewelyn Pritchard acknowledged receipt of the subpoena.

It's believed that Ballmer will be deposed even though the discovery process was supposed to have concluded April 30.

Ballmer led a local investment group that offered to pay $150 million toward a $300 million KeyArena renovation project and buy the team from Clay Bennett.

Sonics | The Seattle Times (http://blog.seattletimes.nwsource.com/sonics/index.html#028019)

That's good news.. does it include the email exchanges?