More News on Sonics Lawsuit

"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.

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.

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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

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.''

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“In the end we are all separate: our stories, no matter how similar, come to a fork and diverge. We are drawn to each other because of our similarities, but it is our differences we must learn to respect.”

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

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.

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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.

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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.

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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.

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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:

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.

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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?

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