Sonics Trial

Godden: Looks like a settlement for Sonics and city

Wed, 02 Jul 2008 14:01:30 -0800

Colleague Sharon Chan reports that she just asked Seattle City Councilmember Jean Godden if the mayor is settling with the Sonics owners.

"It looks like it, but I’m afraid what little I know is sworn to secrecy until after the mayor's press conference," said Godden. A press conference is scheduled for 5 p.m.

Another source confirmed there is a settlement.

City and the Sonics discussing settlement?

Wed, 02 Jul 2008 11:49:00 -0800

That's what The Oklahoman is reporting on their Web site.

Apparently, Seattle City Councilmember Richard McIver says talks are being held up by Howard Schultz's lawsuit, the one in which he's seeking to undo his 2006 sale of the team to Clay Bennett.

"I hear that they were trying to work one up but I didn't know whether they were successful or not," Councilmember Richard McIver told The Oklahoman . "And I thought it was around something where (the Sonics owners) were trying to get Seattle to involve Schultz's suit withdrawal and that didn't come out, so I guess it fell apart."

I'm making phone calls trying to confirm if talks are ongoing.

Also, my colleague Jim Brunner just tried Seattle Deputy Mayor Tim Ceis, and he refused comment.

Judge Marsha Pechman is scheduled to post her ruling in the trial at 4 p.m.

Judge to rule today in Sonics case

Wed, 02 Jul 2008 06:00:00 -0800

U.S. District Judge Marsha Pechman is scheduled to post her decision online at 4 p.m. today.

The city of Seattle filed the federal lawsuit to force the Sonics to play out the final two seasons on their lease KeyArena lease, through September 2010. Sonics owner Clay Bennett wants out now, and the NBA has approved the team's move to Oklahoma City. Bennett says a cash buyout of the lease should suffice. The city in February rejected a $26.5 million offer to let the Sonics go.

During the six-day trial that ended last Thursday, Seattle's lead attorney Paul Lawrence emphasized the city's right to enforce the lease, and the Sonics' unique role in the community and as a KeyArena tenant.
Brad Keller, the Sonics' lead attorney, focused heavily in his closing arguments on efforts by Seattle civic leaders, including former U.S. Sen. Slade Gorton, to use the lease lawsuit as part of broader scheme to pressure Bennett to sell the team.

Confidential? Let's talk about it: Slade Gorton's NBA meeting

Thu, 26 Jun 2008 19:44:27 -0800

Former U.S. Sen. Slade Gorton went to New York last fall with Deputy Mayor Tim Ceis and Seattle Center Director Robert Nellams to meet with NBA officials and lawyers for the Sonics. For that Oct. 15, 2007 meeting, Gorton -- who was working for the city in the lease lawsuit -- signed a confidentiality agreement that read, in part, "All communications of any kind made during the meeting, and all materials prepared for, introduced at, or created during the meeting, are confidential and protected from disclosure for any purpose..."

The day after the meeting, on Oct. 16, 2007, Gorton e-mailed Microsoft CEO Steve Ballmer, former Safeco head Mike McGavick and former Sonics President Wally Walker about -- the meeting in New York. (Ballmer led the investors group interested in buying the Sonics.)

After describing some of what was discussed and who asked what, Gorton wrote, "The next question is when and how we inform the league that a local potential owner is a possibility."

Judge Marsha Pechman asked today about the confidentiality agreement and subsequent e-mail.

Click here to see the confidentiality agreement and e-mails, including the Oct. 16 e-mail, from Gorton.

Press conference audio

Thu, 26 Jun 2008 19:22:49 -0800

Here's an audio link to the press conference that Deputy Mayor Tim Ceis and attorney Paul Lawrence conducted after the conclusion of the trial. Click on the link to hear the mp3 file.

News conference with Paul Lawrence, Deputy Mayor Tim Ceis

Thu, 26 Jun 2008 17:05:15 -0800

Paul Lawrence, lead attorney for the city of Seattle, and Deputy Mayor Tim Ceis answered questions after six days of testimony ended at the U.S. District Court. Here's what they said:

Tim Ceis: So I just want to start off by saying, I just want to express my appreciation for the great work Paul Lawrence over the course of this trial and also particularly, though, today in his closing. I think what Paul did today was clearly lay out the strength of the city's case to the judge, the strength of our claim for specific enforcement of the lease and why that is so important to the city of Seattle and not only the city of Seattle, but the people we represent.

I thought it was particularly telling that the judge asked about the issue of sentimentality and how is it that a city can represent that sentiment of its citizens and the fans of basketball, but that is the job of the city, the mayor. He is elected to represent those interests and the representation of those interests [don't] always manifest themselves in just concrete and parks and things like that. They sometimes manifest themselves in the will and desires of the people he represents. So that's something that's irreplaceable in terms of the Sonics if they should leave Seattle. So that I think was a very poignant point of this case today.

I also want to lay out to you today that our objective of the city remains the same and has been consistent throughout the point in time in which Mr. Bennett told us he wanted to break the lease, the point in time in which we filed litigation to prevent that and the point in time between then and now in trying this case and that was to keep the Sonics as a tenant in KeyArena. To try and solve the KeyArena renovation problem so that we can keep a team here long-term, and that's regardless of who the ownership is and who that team is. That remains the city's objective. And so today was a closure of this trial, I hope that we will take a step forward in meeting that objective for the city.

Paul, do you have anything you want to add to that?

Paul Lawrence: No.

Ceis: Any questions?

Q: Is the case decided on Washington state law or federal law?

Lawrence: It's a Washington contract and Washington law would apply.

Q: It seemed like to me anyway, it seemed like [Sonics lawyer Brad] Keller dropped a new little bit of evidence closing, which found Deputy Mayor Ceis at a meeting at K&L Gates, two days after the "Poisoned Well'" meeting. So what were you there for? What strategy were you talking about there?

Ceis: That is not a new piece of evidence. That was in my deposition that is part of the court record, and it was clear that on October 9 we were meeting to discuss the preparation of the presentation to the NBA of a renovated KeyArena plan. That's the whole purpose of that discussion that day.

]]>Continue reading...

Judge Pechman to post ruling Wednesday

Thu, 26 Jun 2008 15:50:33 -0800

Judge Marsha Pechman said she will post her ruling in the case Wednesday at 4 p.m.

"I'm not going to open my mouth and decide this case today," she said before court adjourned today. "I also understand that time is significant for everyone involved."

Then, she added, "So stay tuned."

City's lawyer gives rebuttal

Thu, 26 Jun 2008 15:40:49 -0800

In the rebuttal by Paul Lawrence, the city's lead attorney, to the closing argument by Sonics attorney Brad Keller, he said Keller made the statement that no Washington court has enforced specific performance of a lease. Lawrence cited a court case in which the lease was enforced -- a case that had the landlord making specific improvements at a tenant's request.

Lawrence emphasized Keller's closing didn't cite a lot of case law to discuss specific performance and the "unique object."

Sonics' lawyer: If team stays, trouble could be ahead

Thu, 26 Jun 2008 15:25:45 -0800

Sonics lawyer Brad Keller concluded his closing argument by pointing to the potential for continued disputes.

Keller cited everything from the marketing of suites to the selection of home dates. Keller said that if the city desired to maximize losses, it could give the Sonics less desirable dates for home games while assigning other dates to other tenants.

Keller said he wasn't there to predict the city and franchise would be "mud wrestling" over all sorts of things, but that the potential for dispute exists

"The judicial concern is if they arise," Keller said. "If they arise, courts just don't want to be in the business of telling the operator how to run his business."

Paul Lawrence, attorney for the city, has 3 minutes left for a rebuttal.

Is a lease like a marriage?

Thu, 26 Jun 2008 15:14:25 -0800

Brad Keller, Sonics attorney, cited the loss of personnel and the dwindling opportunities for sponsorship at KeyArena and the general difficulty in marketing a team whose brand is being associated with "abandonment."

He then posed two rhetorical questions about why this relationship has reached this point.

"Why is it that there is not a single Washington court (that) has ever specifically enforced a lease?" Keller asked. "Why is it that courts refuse to enforce a marriage?"

Keller also pointed out that ending the city's association with the K&L Gates law firm doesn't solve all the problems in the city's relationship with the team. Keller also said Mayor Greg Nickels has expressed a desire to have local owners buy the team.

"You can get rid of the lawyers, but you can't get rid of the mayor," Keller said.

Sonics lawyer suggests team's financial losses will only worsen at KeyArena

Thu, 26 Jun 2008 15:06:37 -0800

The closing statement by Brad Keller, the Sonics lead ttorney, resumed after an afternoon break. Keller discussed financial losses that have exceeded all expectations.

The implication, Keller said, is that those losses will only get worse if forced to stay at KeyArena.

"To what end?" Keller asked.

Is it because Mayor Greg Nickels' said he's an optimist, Keller said.

"That PBC (Sonics owners) will drown in red ink and forced to sell to the Griffin Gang?" Keller said.

The reality, he said, is that four separate times under three different ownership groups, the Sonics have lobbied the state Legislature to fund an arena upgrade.

"The city had five years of chances to fix the problem and we're here today because it couldn't," Keller said.

K & L Gates -- a big law firm with a divided brain?

Thu, 26 Jun 2008 14:43:16 -0800

Sonics lawyer Brad Keller's closing argument included a diagram of the K&L Gates law firm two halves of one brain.

The city's lawyers were shown in green and located on the left side of the brain. The Griffin Group's (Seattle developer Matt Griffin is one of the investors interested in buying the Sonics) lawyers were in blue and on the right. Keller asked if it's really believable that those two sides of the brain were not communicating with each other as one side worked to represent the city in enforcing the lease with the Sonics while the other worked in a separate endeavor to preserve professional basketball in Seattle.

"That's contrary to logic and that's contrary to common sense and if there was even some fleck of plausibility, the law doesn't allow a principal to act as a horse with blinders on," Keller said.

Keller said the specific-performance is being used as a point of a sword to affect the sale of the Sonics. Well, actually, Keller called those two years remaining on the lease a bludgeon, as the city was seeking to force the tenant to sell.

Sonics lawyer says "Poisoned Well" plan made him feel ashamed

Thu, 26 Jun 2008 14:33:33 -0800

Brad Keller, lead attorney for the Sonics, began his closing argument talking about the complexities of contract law and how it applies to a lease. He disputed the characterization of the Washington Supreme Court case by the city's attorney, Paul Lawrence, in his closing. Keller said that was a one-shot real-estate deal and this is a lease case.

Keller then turned his attention to the so-called "Poisoned Well" plan, and said it showed a level of scheming that embarrassed him.

"This is my town, too," Keller said. "But I felt shamed by those among us who live in power and privilege and have not learned that the end does not justify the means."

Keller's also pointed out that two days after the "Poisoned Well" Power Point presentation was made at the home of former Sonics President Wally Walker, that Walker's calendar indicated he had a meeting at K&L Gates that included former U.S. Sen. Slade Gorton and Deputy Mayor Tim Ceis.

Judge questions Gorton's roles with city and investment group

Thu, 26 Jun 2008 14:12:56 -0800

The city's lead lawyer Paul Lawrence concluded his closing argument,and Judge Marsha Pechman asked about former U.S. Senator Slade Gorton's role working for the K&L Gates law firm, which represented the city and also was involved with an effort to preserve professional basketball in the area. Those twin roles were spelled in the letter in which the city retained K&L Gates.

Pechman brought up the fact that Gorton attended a meeting with the NBA where Clay Bennett was present to discuss the viability of a remodeled KeyArena. The parties were required to sign an agreement not to discuss the contents of that meeting.

Pechman referenced the fact that the next day Gorton sent an e-mail to members of Microsoft CEO Steve Ballmer's investment group (which wanted to put up money to renovate KeyArena and buy the team) about what was discussed.

"I can not explain Mr. Gorton's actions," Lawrence said.

"But that's the city's action because that's Mr. Gorton," Pechman said, and Gorton signed the non-disclosure agreement while in the meeting to represent the city.

Lawrence said there was no evidence that the city directed Gorton to send that e-mail and also noted that the e-mail was not sent to anyone with city.

"There is no evidence that links Mr. Gorton's action with the city," Lawrence said.

Pechman then asked about the possibility of severing K&L Gates representation with the city in this matter, after the case. Lawrence said that is something that's entirely within the judge's discretion.

Sonics are irreplaceable, city's lawyer says

Thu, 26 Jun 2008 13:58:24 -0800

The Sonics trial resumed at 1:30 p.m. with Paul Lawrence, lead attorney for the city, having 30 minutes left to conclude his case. Lawrence began the afternoon session by emphasizing the uniqueness of the Sonics as a tenant. Having an NBA team is something that just can't be replaced.

"It can't be replaced with money and cannot be replaced with another tenant, with Ice Capades or other events," Lawrence said.

Lawrence also presented a timeline showing that city officials twice said the city intended to enforce the lease, first in July 2006 after Clay Bennett's group purchased the team and again in May 2007 when Seattle Mayor Greg Nickels rejected a buyout offer.

Lawrence drew the comparison to land disputes. In those cases, he pointed out, damages can be assessed in terms of specific performance and not based on fair-market value. In essence, the courts have decided that the purchaser has a special relationship with the land being bought. The connection there is that the city has a special relationship with its basketball-team tenant. And that's a relationship that can't simply be dealt with in monetary damages.

"Simply being awarded a dollar amount is not going to make the city equal to whatever benefits it perceives are associated with the team," Lawrence said. "You can't put a number to it."