Sunday, June 15, 2008
Sonics' future in Seattle to be decided in court this week
SEATTLE -- One of the most anticipated trials in Seattle history is set to begin Monday, complete with bloggers and protesters.
The six-day, no-jury trial in federal court will settle the final two years of the SuperSonics' lease at KeyArena. Sonics owner Clay Bennett has gained the NBA's approval to move the team to his hometown of Oklahoma City, but Seattle argues its lease forces the franchise to play two more seasons before departing. The contentious showdown has turned personal between the principals.
The court will distribute 44 courtroom seats for each morning and afternoon session through a public lottery, to satisfy those curious to see firsthand if their city will lose its oldest professional sports team after 41 years. Bloggers will be filing word-by-word accounts from a ceremonial courtroom four floors above the trial room, in an overflow media center that will show proceedings on closed-circuit television.
Monday, just as Bennett may be finishing testimony, former Sonics stars Gary Payton and Xavier McDaniel are scheduled to appear for a "Save Our Sonics!" fan rally in the courthouse plaza.
U.S. District Court Judge Marsha Pechman is effectively giving presenting lawyers a shot clock. She is allowing each side a total of 15 hours over six days to present its case -- with time deducted for minutes spent on losing objections. At the end of each day Pechman will inform the parties how much time they have remaining. It all ends June 26, with Pechman issuing a written verdict soon after that.
Seattle is citing relief upon a legal principle -- specific performance -- that Cleveland used 12 years ago to ultimately secure a replacement NFL team. That squad is today's Browns.
In 1995 Art Modell, owner of Cleveland's original beloved Browns, announced he intended to move the team to Baltimore. Cleveland officials gained bargaining power when they got preliminary injunctions from federal and state courts. The federal order said the Browns' name, colors and history must stay if the team moved. The more important state order demanded the Browns play the final three years of their lease at decrepit Municipal Stadium.
That ruling stemmed from exact language in Cleveland's lease requiring "specific performance" -- that the Browns must occupy the stadium until the lease expired, that a lease buyout was not an option.
It's what Seattle is citing it has in its lease to keep the Sonics in town for two more years.
Fred Nance knows specific performance well. With a trial seeming imminent, Nance negotiated Cleveland's settlement with the NFL that guaranteed the city a new team after the original Browns became the Baltimore Ravens in 1996.
"It's like a silver bullet in the lease," Nance said last week during a telephone interview from Cleveland, where he is the regional managing partner for the law firm Squire Sanders and Dempsey.
"There was language that made it very clear that the team had to be playing there during the lease. The city put in the lease that it would be 'irreparably harmed' if the team did not occupy the stadium. I remember that language clearly."
Bennett's Professional Basketball Club agreed to honor the Sonics' lease with Seattle when it bought the team for $350 million in 2006. The lease, which expires Sept. 30, 2010, states: "The obligations of the parties to this Agreement are unique in nature; this Agreement may be specifically enforced by either party."
The Sonics argue this case is no different than a garden-variety tenant-landlord dispute, so specific performance should not be an issue.
Courts usually don't force parties to fulfill contract obligations against their will, no matter the specific performance language, said Steve Calandrillo, a contract law professor at the University of Washington Law School who's been following the Sonics case. Instead, judges tend to require parties to pay monetary damages.
"My first-year law students always assume that if somebody makes a promise in a contract, they should be held to that contract," he said. "The reality is that contract law generally doesn't hold you to honor your promises. It holds you to pay damages if you don't honor your promises."
The exception is when no sum of money would adequately compensate the injured party. That is what Cleveland portrayed with its "irreparably harmed" lease language.
Seattle will argue the same principle. In its trial brief, the city cited the intangible benefits of having a pro sports team, such as civic pride and charitable activities.
"There are benefits beyond simply the payment of rent that will be lost and cannot be measured by some monetary payment if the Sonics leave early," said Paul Lawrence, Seattle's lead attorney.
The Sonics say the intangibles are irrelevant and negligible. The team states in its trial brief that it should pay $10 million to cover the final two years of rent and be freed to Oklahoma City.
Seattle disputes that. The city's trial brief begins by recounting that in 1994, "the City determined to pledge more than $80 million taxpayer dollars to rebuild what is now KeyArena ... in exchange for the Sonics' promise to play all their home games there through the 2009-10 NBA season."
The judge will balance the lease's wording against the general principles of contract law, and the consequences of forcing the Sonics to stay in Seattle.
Bennett, whose family is among Oklahoma's richest, said in his deposition for this trial he could withstand estimated losses of at least $60 million for two "lame-duck" seasons in Seattle if Pechman makes the Sonics stay.
"Are we really going to try to keep this relationship together for the next two years between parties who clearly hate each other?" Calandrillo asked. "If you force somebody to do something they don't want to do, there's a decent likelihood they won't operate in accordance with the spirit of the bargain -- that they won't make best efforts to do what a team would do, to generate ticket sales, to generate publicity and revenue -- because they know they're going to be leaving in two years, anyway."
NBA commissioner David Stern won't be testifying. Seattle lost a pretrial bid in a federal court in New York to compel him to. The highest-ranking league executive on the witness list is Joel Litvin, the NBA president for league and basketball operations.
Nance wonders if a last-minute, Cleveland-like settlement still might happen in Seattle.
"The stakes are so high you would think they could get a compromise," he said. "But whether the city can work something out depends on how strong the specific-performance language is in the lease."
When Mayor Greg Nickels is asked how much money it would take for him to consider a settlement with the NBA, he just laughs.
So, we'll see them in court.