Fate of Sonics rests with judge
The team will learn Wednesday whether it can move to Oklahoma City this year.
Fate of Sonics rests with judge

By Chris Casteel

Published: June 27, 2008

SEATTLE — U.S. District Judge Marsha Pechman will announce Wednesday whether the SuperSonics can move to Oklahoma City this year or must fulfill the last two years of a lease the NBA team has with a city-controlled arena.

After a final day of testimony and closing arguments in the trial over the Sonics — a day in which the judge engaged lawyers on both sides over critical questions in the case — Pechman said Thursday she was "not going to open my mouth and decide this case today” but would post it publicly at 6 p.m. CDT Wednesday.

"So stay tuned,” she said.

Pechman asked few questions of witnesses in the first five days of the trial but posed several on Thursday to attorneys for the city of Seattle and the Oklahoma City-based owners of the Sonics, showing in the process that she is considering her approach to many of the arguments made here in federal court.

She wanted to know, among other things, whether fan loyalty was relevant to her decision; whether the city would in fact get a "bad bargain” financially if the team is forced to stay; whether the city had any obligation to upgrade KeyArena to keep it viable as an NBA venue; and whether she might have to act as a referee to solve future disputes between the city and team if she makes the team honor the lease.

Paul Lawrence, the lead trial attorney for the city, which sued the Sonics last fall to keep the team in Seattle through the 2009-2010 season, said Pechman must order "specific performance” of the lease — that is, make the team play all of its home games at KeyArena for the next two seasons — because there's no adequate financial alternative. A dollar figure can't be put on the loss to the city, he said, because the 41-year-old franchise brings so many benefits beyond the lease payments.

The Sonics' owners, Lawrence said, were asking the judge to say any sports team could break a lease if a better deal came along — in this case, a deal to move to the Ford Center in Oklahoma City.

"They should not come into this court and ask for your help in making more profits and deny the citizens of Seattle the benefits” of having the team, Lawrence said.

But Brad Keller, the lead attorney for the owners, told the judge she should end the dysfunction surrounding the Sonics here — the lease that is at the root of the team's financial struggles and the "toxic” relationships between the owners and the city, between principal owner Clay Bennett and the fans, and between the owners and a group of local businessmen who want to keep the team in Seattle.

"Enough is enough,” Keller said. "The marriage is broken. Please stop the bleeding.”

Keller also said the city was using the lawsuit to make the Sonics stay and endure financial losses that would force the owners to sell the team; he said the judge shouldn't be a "tool” for the city in its mission.

"The only way the city can continue to try to force its tenant to sell is if you force the bleeding,” Keller told the judge.

Pechman asked questions of both lawyers about the unusual circumstances surrounding the city's law firm, K&L Gates, representing the city in the case while some attorneys with the firm, including former U.S. Sen. Slade Gorton, were also working on a plan with a potential local ownership group to buy the Sonics and help finance renovations of the arena.

Gorton's name is at the center of the owners' allegation that the city wants to keep the Sonics here to force a sale. Gorton was heavily involved in discussions with the businessmen, including Microsoft Corp. chief Steve Ballmer, about a "poisoned well” strategy that made reference to keeping the Oklahoma City owners tied up in litigation and driving a "wedge” between the owners and the NBA.

During his closing argument, Keller showed a picture aimed at mocking K&L Gates for representing the city in this litigation and, simultaneously, representing local businessmen who were putting together a plan to buy the team; the picture showed a brain divided in half with one of the firm's interests on each side, and Keller questioned whether it was credible to believe that the interests could be kept separate.

Lawrence said he couldn't account for Gorton's actions, which he characterized as a "major misstep” but that the court shouldn't hold the city responsible.

Pechman asked Lawrence whether she should order the city to sever its ties with K&L Gates if she forces the team to stay. Lawrence said the firm had no "vested interest” to keep representing the city and that the city attorney's office could handle the rest if the team is forced to stay.

Pechman told Keller, the owners' attorney, that litigation can be "unpleasant and embarrassing” but asked if the city didn't have the right to sue the owners to enforce the lease.

Keller said the city had the right if enforcing the lease was its sole purpose; but he said it didn't have the right to use the lease as a way of forcing the team to sell and had crossed over from a proper purpose to an improper purpose.

The judge said she knew Bennett had made a $26 million offer to the city last year to leave before the lease expired. The city declined the offer and now, would be left to pay off the bonds even if the team is forced to stay for two years.

"Is it up to me to tell the city leadership, ‘You're asking for a bad bargain'?” the judge said. "It's not up to me, is it?”

Keller told the judge that the offer from Bennett was designed to pay the lease and help pay off the bonds.

"That wasn't lost on me, Mr. Keller,” the judge said.

Asked whether the city could actually lose financially by winning this case, Deputy Mayor Tim Ceis said at a press briefing after the trial ended that the case was never about money, that it was about holding the Sonics to the deal made at KeyArena and providing the city with the intangible benefits brought by the team.

Lawrence said the city had no responsibility under the 15-year lease to upgrade KeyArena continually; he said the city had the obligation to maintain it and, halfway through the lease, to "freshen it up” and that the city met its obligations. He said the Ford Center in Oklahoma City won't be up to NBA standards until $100 million worth of improvements, approved by city voters, are completed.

"There's nothing in the lease that says you get to leave because time ages a facility,” Lawrence argued.

Pechman also expressed concern that if she forced the Sonics to play another two years at KeyArena, she would be called on to referee disputes between parties that, the trial has shown, have not been amicable.

"Are we going to have ongoing allegations that the city is undermining its tenant” by trying to lock in financial losses for the owners, or criticizing them to the NBA or "leaking their secrets?” Pechman said.

Lawrence said that Seattle Mayor Greg Nickels and Bennett had both testified that they wouldn't call each other names or refuse to work together.

"I'd like to know how I can be assured we're not going to be back here with these” disputes, she said.

Lawrence said the owners and city officials were sophisticated people, to which Pechman responded: "Let's talk about just how sophisticated they are.”

She asked whether it was true Nickels refused to return a phone call from Bennett last July, when Bennett wanted to discuss a way out of the lease.

It wasn't clear from Lawrence's answer whether the mayor did return the phone call, but he said the mayor had told Bennett previously that he expected the team to honor the lease.

"It's not real sophisticated if they both go to their own corners and don't talk to each other, right?” she said.

The owners' attorneys contend that a price can be computed for what the Sonics would owe the city for the next two years, but the city contends that no price can be put on a 41-year-old franchise that brings intangible benefits, including civic pride.

Lawrence argued that the fans have a "sentimental connection” to the team that can't be valued in dollars.

But Pechman said the fans aren't a party to the lease and that emotions felt by individuals don't go to the core landlord-tenant dispute.

Lawrence said the city had made a public policy decision to renovate KeyArena in 1994 to keep the Sonics in Seattle and that public policy decision was influenced by the fans.

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