Sonics' future in Seattle to be decided in court t

[Laramie]

http://sports.espn.go.com/nba/news/story?id=3445034


Sonics' future in Seattle to be decided in court this week

Associated Press

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.


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[Laramie]

http://newsok.com/fight-over-sonics-lease-heads-to-trial-in-seattle-on-monday/article/3257703/?tm=1213493293

By Chris Casteel

Washington Bureau

The SuperSonics, the NBA team that has played in Seattle since 1967, is moving to Oklahoma City. The only question is when.
A federal court trial in Seattle beginning Monday will focus on whether the Oklahoma City-based owners of the team can break a lease with the city of Seattle, which requires the team to play the next two seasons at KeyArena.

U.S. District Judge Marsha J. Pechman will ultimately make that call.

Perhaps fitting for a lawsuit involving a sports team, she is putting the city and the owners on the clock: Each side will have 15 hours to make its case in a trial that is scheduled to last all of this week and continue, for one day, on June 26.

The city of Seattle last fall sued the ownership group, headed by Oklahoma City businessman Clay Bennett, seeking "specific performance" of the contract; that is, the city wants the team to play out the term rather than let the owners pay their way out of it and move the team to Oklahoma City now.

The owners offered the city more than $26 million to get out of the lease, an amount that would have more than covered the expected payments to the city under the remaining two years of the contract (an estimated $10 million).

Pechman is likely to make a decision after the trial only about whether or not the team must stay.

In a recent order, the judge declined a request by the owners that she figure out how much money they should pay the city in damages if they're allowed to move to Oklahoma City this year.


Does everything have a price?
According to legal experts, requiring specific performance of a contract is unusual when there's an alternative — typically money damages.
"The normal rule is you can't grant specific performance of a contract if damages would be adequate," University of Michigan law professor James J. White said.

In a case like this, he said, financial damages could likely be "measured pretty readily" even down to the level of concession operations.

White said the contractual obligation for the team to play its games at KeyArena could give the city a plausible argument in seeking specific performance.

"If I was the judge, I'd say 'tough'" and reject the city's position, he added.

Law professors at the University of Oklahoma and Oklahoma City University said there's typically an assumption in contracts cases that everything can be translated into a dollar figure.

"The law tends to assume that money damages are sufficient," said OU law professor Judith Maute.

OCU law professor Michael Gibson said, "Normally the remedy would be to allow the Sonics to move out and tell the city to re-lease (the arena) to somebody else.

"The only time you get into specific performance is when money can't compensate in some way."

In this case, he said, that would be a claim that the city would lose publicity and money brought in to local businesses, like hotels and restaurants.


Intangible benefits
And that's what the city of Seattle is claiming — that this isn't a case where the damages can be easily assessed.
According to the city, the professional basketball team is a part of Seattle that doesn't have a price (the team itself, though, did have a price: $350 million for the Supersonics and the WNBA Storm).

"Hundreds of thousands of Seattle residents value the Sonics and their 41-year history," the city said in a brief filed last week. "The Sonics create civic pride, a sense of community, greater visibility to the country and the world and attract new businesses and residents.

"The Sonics bring citizens from all walks of life together, attracting a racially diverse gathering to a central public space. The Sonics also make substantial contributions to Seattle through charitable work by the players."

The city is planning to call as a witness a prominent sports economist to testify about the "substantial intangible benefits" that flow to a city from its sports teams.

Another expert for the city is expected to testify that the Sonics have an economic impact of nearly $200 million a year, nearly 1,000 jobs and up to $26 million a year in additional household income, not counting the player salaries.

The owners claim the money spent on the Sonics is discretionary income that would be spent elsewhere in the city. And they say fan interest is "legally irrelevant" because the fans aren't a party in the case.

"But even if they could be considered, the result is the same," the owners said in a recent brief. "The great majority of the public has a yawning indifference to the Sonics departure."

The owners also argue that if the judge were to force the Sonics to stay, she would wind up having to referee disputes between the city and the owners, who have a "dysfunctional relationship." In fact, the owners claim that the city is trying to force the team to stay to bleed it financially and force a sale to a local group.


Time and money
The judge is not planning to rule from the bench on the last day of the trial. Instead, she is expected to read her decision in open court on a date to be announced later.
She agreed to a fast-track schedule for the trial, knowing that time is a factor.

The Oklahoma City ownership group is estimating that it will lose between $60 million and $65 million if forced to play out the final two years in Seattle but that it could make nearly $19 million in profit if the team moved to Oklahoma City.

"The lease ends in 2010, at which point the Sonics can leave, regardless," the owners said in a brief last week. "Given that the departure is inevitable, what will be gained by two years of forced performance, measured against huge financial losses and putting a business and its employees on hold for two years? Unless this balance tips heavily toward the city, it is not entitled to the extraordinary remedy of specific performance."

But the city says the ownership admitted the team was losing $20 million a year when it bought the Sonics in 2006 "but now claims $30 million a year is unreasonable."

The owners can't claim undue hardship when they knew what they were getting into, the city says.

"More importantly, however, (the ownership group) readily admits it can bear those losses regardless of the amount, making the losses neither undue nor a hardship."

[cannon_fodder]

I wish I had time to read over that lease.  

My gut reaction is to side with OKC (I realize OKC is not the actual party) on this one.   It is a lease.  Specific performance is not written in to the lease, the rental of an arena is just a lease.  In that instance money damages can compensate.

Seattle's "civic pride" argument fails in my book.  The city wants to enforce specific performance out of spite, not civic pride.  Attendance would be down, WAY down (and I can't fault them).  All ancillary benefits would be weakened and the atmosphere would be overtly hostile in many respects.

I just don't see a judge mandating specific performance to fulfill the spiteful wishes of the populace.  I understand the desire (pro teams are whores), but nothing will come of it that a few ($5mil) dollars won't rectify.

/totally random opinion. I have not read the contract nor anything beyond what the media has.