Any settlement would have to be a global one. It would work only if the Schultz suit is incorporated into it. That might even save Seattle the embarrassment of having that suit dismissed before trial.

The remaining lease is $10 total. About $5 million per year. I think the City lost the case on the first day with the Mayor's testmony and everything since has just been driving the buy-out cost down. Every time Wally Walker answered a question it cost Seattle $1 million.

The Seattle attorney should have just turned to Clay on Friday morning and said, "Screw this, write me a check for the $26 million you already offered and we will tear up the lease."

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She has a six figure job and a demigod-like position which must be worshiped by the local bar regardless of the outcome of the case.

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As it was pointed out a couple months ago by Munson from ESPN, this case never meant much, the real threat is the Shultz lawsuit, ESPN radio has been saying for weeks that the city of Seattle had a weak case but the Shultz case was the real threat.

Hopefully the Shultz case will go as smoothly!

Good one, Nathaniele. You made me laugh out loud.

I have to admit though, I am feeling a lot better now that the Seattle case looked so weak =)

Well, the Schultz suit, as discussed earlier is built around an even weaker theory than the city's. Even if Schultz can prove bad faith and failure to use best efforts, it's extremely doubtful that the court would use its equitable powers in such a way.

I doubt the court will even grant a preliminary injunction there unless Schultz is personally willing to float a very large (think tens of millions) bond which would be payable in full to the PBC should the Shultz suit fail.

I can see how someone who doesn't know the law might be cowed into thinking that this is a viable legal theory because most people wouldn't know a viable legal theory from one which isn't. I don't think I've ever once heard of a constructive trust being used in the manner in which it is supposed to be used in Seattle.

Yes, the lawsuit is scary because the implications are huge if it's successful. Just realize that Shultz has virtually no chance of winning that case.

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Sonics | The Seattle Times


June 20, 2008 8:18 PM

Gorton should have withdrawn from case

Posted by Percy Allen

This one is easy. This day belongs to the Sonics. In a landslide.

And I don't need a law degree to know the Sonics attorneys made several intriguing points. They were so good, I'm beginning to wonder if District Court Judge Marsha Pechman should toss the case out of court based on the evidence presented Friday.

The Sonics got a lot of mileage from their "unclean hands" defense. They established a paper trail between former U.S. Senator Slade Gorton, who is the lead attorney for the city, and local investors intent on buying the Sonics.

Gorton has been up front about his passion to retain NBA basketball in Seattle, but that passion is undermining the city's case.

It's difficult to determine if Gorton's passion or his role for the city caused him to inflict pain on Sonics chairman Clay Bennett and his ownership group, the Professional Basketball Club. It's difficult to determine when Gorton was acting as the concerned citizen who loves the NBA or the city's attorney that's being paid $1 million.

It pains me to admit it, but Gorton should have withdrawn from the case early on. I think the city was negligent in not asking Gorton to withdraw from the case. And for the first time, I think the Sonics might lose what should have been a no-lose lawsuit.

We all know what Gorton has done for professional sports in this town. He's been amazing and every Mariners fan and Seahawks fans are in his debt for saving those teams. Next time you see Gorton at a game, buy the man a beer and a hot dog.

But this is different.

A cardinal rule in journalism for a reporter is you never want to be the focal point of the story. I think the same holds true for attorneys.

It's not a good sign when Paul Lawrence, the lead attorney in the city's case, is fielding questions about another attorney on the case.

I presume Lawrence and Gorton work in close proximity and I find it impossible to believe Lawrence didn't know Gorton was hatching a plan "bleed Bennett to force him to sell." Regardless of what you think about the Oklahoma City Raider (sorry JB I stole your line), the opposing lawyer shouldn't devise schemes in their off hours to force the defendant to lose millions.

That's just not ethical.

Under questioning, Seattle developer Matt Griffin all but admitted that he had a meeting with Gorton where they talked about forcing Bennett to sell the team.

The defense introduced several Gorton e-mails to former team executive and part owner Wally Walker, Safeco president Mike McGavick and Seattle real estate developer Matt Griffin about forcing Bennett to sell the Sonics.

Deputy Mayor Tim Ceis had to know about all of this. He had to know Gorton is a bulldog who wins tough fights. He had to know his bulldog would engage in this type of behavior.

As Walker said today: "I would do anything to keep basketball in Seattle."

Anything? And what about Gorton? Would he do anything? It appears so. It appears he already has.

This one is easy. Give this day to the Sonics.

The team's lead attorney Brad Keller slam dunked Griffin early and often.

And Sonics attorney Paul Taylor made Walker squirm so much on the witness stand, I thought the former team president was on trial for giving $35 million to Jim McIlvaine and driving George Karl away.

Despite repeated objections from Lawrence, Pechman allowed Taylor to introduce Exhibit 567, which may ultimately doom the city's case. The evidence is a PowerPoint presentation given by Gorton called: The Sonics Challenge: Why a Poisoned Well Affords a Unique Opportunity.

It's a 46-page detailed strategy to inflict economic hardship on Bennett. It's scary because it nearly worked. The plan had two critical shortcomings.

For starters, state lawmakers declined to authorize tax funds to help in the KeyArena renovation. And second, the plan became public.

I find it a tad bit ironic that while the city compiled reams of embarrassing e-mails from the Sonics owners to show they breached a "good faith best effort" promise, Gorton sent e-mails that are now being used against the city.

If that's not fitting, then I don't know what is.

Midtowner, you missed my point. You explained the case from Seattle's and the legal POV.

That was NOT my point.

I know that PBC obtained the documents from the city thru discovery. And I know it was not a surprise to them once PBC introduced exhibits - in fact, Im sure the city thought they could successfully object, which they tried and failed to get sustained.

However, my point was - Seattle LEAKED its info on Bennett to 1) get the public fired up against Bennett in the hopes that 2) Bennett would leak HIS discovery on the city - thereby diminishing it when it goes to court. Also, it wasn't a sure thing that the trial would not have been a jury trial - Im from here and it wasn't until Jan or Feb that Marsha ruled it would not be a jury trial - which is a motion the city raised and many sonics fanatics here were counting on. ...

Like I said, this was all set up to be a PUBLIC trial - yet once Marsha was assigned to oversee it; she removed any and all publicity and is instead trying it on rules of law, something the city has yet failed to prove given it is their burden.

Again, I know the city knew this or that - but Im saying they thought they would win objections and pin it all on bennett and even prior to trial - Im sure they thought the Okie would 'fire back' with discovery he'd gained to Save His Face in Seattle. Remember, Bennett mentioned that he can't show his face here anymore, im sure that was a planned tactic by the city, thinking Bennett actually cared what common Seattleites thought of him.

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The only possible jury question here would be damages. Whether the specific performance portion of the lease is enforceable or not is a question which would never go to the jury. Juries interpret questions of fact, not law -- and that's a question of law (equity in fact.. juries never preside over questions of equity either).

As for the damages in this case, the judge made a smart call -- had there been an unfavorable jury verdict, my feeling is it's more than likely that a jury would declare something like: "Seattle is damaged in an amount equal to the national debt plus statutory interest" (possible, considering the animus here), she'd have to reduce the damages and thereby make the determination anyway.

I think it was always a very safe bet that there would never be a jury involved here.

No one wins on objections -- and most of the time, unless something is clearly outside of the rules of evidence, in a bench trial, most questionable things come in. The judge can look at them and decide later whether they were admissible, do the probative v. prejudicial balancing, etc. and not really be prejudiced because of hearing inadmissible evidence.

A lot of people think what objections are overruled, etc. has a huge effect on a case -- it really doesn't. In the final analysis, the question of law isn't hugely difficult. It sets up like this (as we've said many times):

Specific performance is an equitable remedy. To be granted an equitable remedy, the movant must have clean hands, which means that the current crisis demanding the court's power is none of their own doing. If there's a lack of clean hands, even if the city can prove that there are unique benefits which can't be compensated for with cash damages, the city still loses -- good news for us.

The only remaining issue is a question of fact -- what are the damages? Here, the city will be offering the kitchen-sink sorts of arguments their economists came up with -- completely bizarre theories in my opinion. We're into the law of contract since this is a lease contract being broken. In this case, there are no punitives, or anything of that nature. The only thing the plaintiff can expect is to be placed in the same sort of position he would have been had the contract been executed.

Special rules apply to damages here -- the plaintiff must generally offer concrete and specific facts upon which he can be awarded damages. Here, the city is asking to be compensated for "pride," maybe concessions, etc. Pride is simply not compensable. Things like concessions and their take of the ticket prices, etc. are usually the type of thing a court would pronounce as being too speculative to be compensable.

My guess at this point is the same as it's been since the beginning -- this particular case will likely result in a verdict for the Plaintiff in an amount equal to what would have concretely been earned under the lease (perhaps minus what the city would have lost in their performance of the lease), and no specific performance.

As to Schultz' suit, it's so bizarre that I expect it to go down on a Motion for Summary Judgment, or maybe even a Motion to Dismiss. I find the legal theory there to way too "out there" for a court to undo a 9-figure transaction where both parties generally got what they wanted.

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Midtowner
Thanks for explaining this case in simple terms

bwahahah... david glover is on newsok comments complaining about the sonics economists.
heh, makes me laff.

I have stayed consistent, unlike the Sonic owners, on the economics of sports on a city. Good public policy should use facts and numbers, peer reviewed studies and the history of other cities. But that just gets in the way of reality that this is moving 200+ million from the citizens to help the owners make money.

David, it is not as if we're getting nothing for something. None of us can afford an NBA team, but a lot of us want one. It takes a very wealthy person to purchase a hundreds of millions of dollars team. Then, after making that kind of investment, the owner actually doesn't make hundreds of millions of dollars a year. The owner makes an average of $10 million a year, which for Clay Bennett would represent less than a 3% return on his investment. That follows millions of dollars of losses in Seattle, costs of moving ($30 million) and rebranding ($5 million). Averaging $10 million a year is the upside, as 30% of the NBA owners last year lost money.

So, are we going to ask for what I call municipal welfare? You like to talk about corporate welfare, but the reverse exists too: The owner buys the team, assumes all losses AND pays for the arena so WE can enjoy it? Or, should perhaps the city make a contribution to something that certainly provides many intangible benefits and may, in a city like Oklahoma City, provide some direct economic benefits?

Personally, I don't care if we can show that the city makes a dime directly. I think there are that many intangible benefits for us as a city because we don't currently have a professional team. Of course the city will, because people will come from Tulsa, Enid, Wichita, etc to see games. If we were to make the playoffs, we would have people from all over the country coming to our city, staying in our hotels and eating in our restaurants. If we were to host the finals or an All Star Game, people from all over the world would come. In a smaller city like Oklahoma City, that is a far bigger deal than it is in a place like Seattle, which would continue to have two other professional teams.

Your assertions don't agree with the peer reviewed research by the Sonic expert in court testimony under oath.

David, you're secure in your beliefs, and that's noble.

However, absent a legal challenge, which I'm stepping out on a limb and guessing you're not planning to undertake, it's done. Like it, hate it, it is done. The votes were cast and tablulated, and the majority of those voting got what they wanted.

Whether they should have wanted it, whether they will be happy with their decision in 2, 5, 18 years, it is done.

So unless you have a legal rabbit to pull out the hat, wouldn't your time be far better spent on influencing something that can be changed rather than tilting at something that, most likely, can not be changed?

Such rabbits exist from time to time, to be sure. Just ask the rail folks. I don't see one here, but I don't own the magic hat either.

When someone has strong passions, and time to utilize, it seems a waste to see the passion directed to the past and not the future.

I wish you well.

Hi Kevin (nice to see a real name), respectful and good advice. History can teach us for the future. Most can see the irony of the incredible contradictions of the Sonic's position. Maybe next time citizens will be a little more leary and interested when the officials ad and pr machines crank up for the next thing. Hey and the local news called me.

David,

You can't take the economic experts' testimony at face value. The purpose of an expert who says there's no economic value isn't necessarily to prove that there's no economic value. The purpose can be as simple as showing that the numbers the city used to decide on the economic impact of the Sonics were just as much voodoo as the figures used by the PBC economic expert.

Here, the city has to show damages and has to show them with some degree of certainty. The purpose of this testimony may only be to cast a shadow of doubt upon all the economic testimony in the trial -- that works in favor for the Sonics in the damages part of the trial and in fact might save the PBC millions of dollars.

That's millions of dollars less that the city of Oklahoma City will probably end up having to subsidize their NBA team.

I think you should be happy about that.

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Sonic's Economic Expert in response: "In your view, Oklahoma City might be worse off for having the Sonics move there?" Lawrence asked. "Yes," said Humphreys. Just pointing out this is the opposite what the mayor, chamber and ads told people here in OKC. So who is telling the truth?

you're missing the point david. the owners already have money. just because they have money doesn't mean they should pay for a public building that is used for all kinds of stuff. in fact... they pay rent there as well. and now that we have this large venue, a whole lot of bands are swinging thru town as well.

we paid that money for them to give us something to do... to be entertained... to have a team to take pride in...

and most importantly...

to lay the smack down on DALLAS and that @$$ clown of an owner, mark cuban.




i'm really confused at what you're looking for from us and the people on newsok.

ok, ok.... you're right. i've been swindled by this billionaire that is enduring all kinds of abuse heaped on him by a "world class city". i was a fool for voting to give money to this guy who is spending quite a lot out of his pocket to get us an nba team.
can you believe the nerve of that clay bennett.... what was i thinking!?!

you're right buddy, they took us for a ride and their economists are two faced liars. you were right all along... maps for millionaires got the best of me.





you were right DG.... you were right all along!












thank you! thank you so much david.

(was that what you were looking for?)

These 8 guys have probably donated hundreds of millions over the years to OKC and the state...You?

Why let $5 a month consume your life anyway?

Be better served to rant about gas or something that actually affects our lives

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Dwight Schrute: Reject a woman and she will never let it go. One of the many defects of their kind. Also, weak arms.

A lot of us can think for ourselves. I personally don't rely on my mayor, chamber and/or ads to make my decision. Nor do I rely on economists. There are some things that make sense. Do you grab onto anyone whose theories fit with what you want them to be, or do you think for yourself? Did you notice that Seattle was more than willing to put economists on the stand who disagree with those of the Sonics', and were the tables turned, the city of Seattle would be trotting out the Sonics' economist. They're all politicians, and anyone who expects complete honesty out of politicians is bound to be seriously disappointed in life. The honest ones have trouble getting elected, sad to say. The Seattle city government has been proven to be at least as mendacious as those here, and they're certainly dumber. So much for it being a hotbed of elite intellectualism up there.

Personally, I think there are some economic benefits to having a team here, but far less than the pro-economists estimate and more than the anti-economists estimate. They haven't looked at Oklahoma City specifically, which suffers from countrywide underenthusiasm as far as impression goes, and which would benefit from more attention being focused on it. Oklahoma City is a far nicer city than the rest of the country assumes, and so having a team here helps improve our image, which can have economic benefits.

But, the main reason I was pro-arena, which is almost identical to most of my friends, is because it's just fun to have an NBA team in town. It's the best $50 I could spend for a lifetime of entertainment.

David Glover must be a 40 year old virgin or something.

None of the people I know voted for the sonics because we thought it was going to make us all rich, lol.

The NBA is coming to OKC. I haven't been this excited in a long time and I can't wait! Not only do we get our own team, we get to see other teams come and play. I travel all the time and people ask me, "What is in OKC?" and I will say, "The NBA!"

No one is ripping us off. Clay Bennet paid $350 million dollars for the Sonics. He is projected to lose quite a bit of money before he makes a dime. If you put $350 million into a 3% savings account, you get back $10.5 million a year. Bennet is never going to make more money than if he just deposited his money into a savings account, and trust me.. there are better ways to make money off $350 million than putting it into a savings account or buying an NBA team.

The main profit in the NBA is made when the team sells, (ask Schultz), public subsidies and beneficial leases. City officials admit they will go from $500,000 a year plus at the Ford to maybe breaking even. I understand the zeal. The Sonic's own expert shows the campaign on citizens and legislators was disingenuous. Not the best way to set public policy, but who cares about all the that, in this case not the majority of voters that showed up.

DG
As a native Oklahoman displaced at this time, I was unable to vote, but if I could, it would have been a resounding YES. I for one am GRATEFUL to the entire ownership group of the SONICS. They did not have to spend their money in this way. But because they have, I have the opportunity to root for a NBA team from my home State. These guys indivudually and collectively have contributed MILLIONS to Oklahoma and I for one appreciate their philantrophy. They believe in my home State and so do I, regardless of what naysayers and doomsdayers like you might say. We were not duped, lied to or otherwise finnagled, we just see a better, more vibrant, more attractive OKC in our future.