City There’s No Out Clause in the Lease for the NBA’s Bloated Business Model
posted by June 26 at 17:51 PMon
Judge Marsha Pechman continued to interrupt and question the team’s hired gun from K&L Gates, lead attorney Paul Lawrence, as he finished up his closing argument after lunch.
Her questions continued a theme she’s hit before: She seems troubled by the evidence that the city was using its lawsuit as part of a bigger strategy to pressure Bennett to sell.
As Lawrence tried to knock down Team Bennett’s storyline about that plot—arguing that the city had no formal role in any of the Steve Ballmer group’s shenanigans (and also pointed out that the plan was to move to Bellevue, which Nickels had no interest in)— Pechman cut him off:
“You’re leaving out one stop,” she said, “Mr. Gorton [K&L Gates lead counsel on the Sonics case, Slade Gorton] goes with Mr. Ceis [Deputy Mayor Tim Ceis] to the NBA in New York to lay out their arena plan and agrees not tell anyone about it. Less than 24 hours later he tells [potential new buyer] Mr. [Steve] Ballmer about the meeting.”
Lawrence argued that Gorton was not acting on behalf of the city, to which Pechman pointed out Gorton signed an NBA document—the confidentiality agreement—on behalf of the city. Man.
Lawrence was flummoxed and simply said, he couldn’t deny that Mr. Gorton did what he did. “I cannot explain Mr. Gorton’s actions.”
Again: Gorton was the city’s lead counsel at K&L Gates on the Sonics case. He was also working with Ballmer’s group, headed up by real estate civic big wig Matt Griffin, which had discussed “bleeding” the Sonics to force Bennett to sell in a secret memo dubbed the “Poisoned Well.”
Bennett’s star attorney, Brad Keller, seized on this theme in his closing argument. In fact, he had a handy slide (which was so pretty I snapped a cell phone pic of it and, sadly, security forced me to delete it) showing a color-coded left brain/right brain split labeled “City Litigation Lawyers (green)/Griffin Group Lawyers (blue).”
He walked through the same timeline he presented earlier in the trial:
Wally Walker signed a document stating he was a consultant for the city and K&L Gates before getting involved in the Griffin group’s “Poisoned Well” strategy; there was a meeting at Walker’s house with K&L Gates attorney Gorton about the strategy; two days later, Deputy Mayor Tim Ceis met with K&L Gates and Walker at K&L Gates’ offices; after a meeting with the city, there’s an email from Walker to a potential buyer, John Stanton, saying the city is in “total agreement” with the strategy; and finally, there’s Mayor Nickels’s deposition, which Keller replayed on video, where Nickels answers “yes…absolutely” after being asked if he was trying “to create an environment” to make Bennett sell.
Pechman asked Keller if, in fact, it was possible there was no Machiavellian plot, but rather, the city was just doing its job: Didn’t the city have a right to bring a suit, she said, asking “what about the quality and nature of this violates the spirit of litigation?”
Keller, much better at fielding Pechman’s questions than Lawrence, responded, that it went “from proper to improper” when the city went beyond trying to enforce the lease to trying to make its tenant sell.
Judge Pechman says she will post her decision next Wednesday at 4pm.
Hopefully she’ll ignore all this side drama and focus on the real question here: Do the Sonics have to fulfill their obligations under the lease and stay for two more seasons?
And hopefully, when she considers Bennett’s argument that the lease was “economically dysfunctional,” she gets that it’s not the city’s fault, but the NBA’s fault for demanding restaurants and crazy salaries for players. There’s no out clause in the lease for the NBA’s bloated business model.