Stern warns fighting team move to Oklahoma City could be expensive

By Randy Ellis

Published: July 25, 2008

Stern delivered the warning to former owner Howard Schultz in a telephone conversation last month, Schultz said in a sworn statement filed late Thursday in Seattle federal court.

Schultz said the conversation took place June 25, about a week before the city of Seattle and the team’s Oklahoma owners announced they had agreed to settle a separate lawsuit over an arena lease, clearing the way for the team to move to Oklahoma City.

Schultz, chief executive officer of Starbucks Coffee Co., said the team’s Oklahoma owners tried to make their settlement with the city conditional on Schultz dismissing his fraud lawsuit against them, but he refused.

“I instructed my lawyers to inform the city that we could not support the settlement ... because my primary objective was to secure an NBA team in Seattle, and that objective was not adequately insured by that settlement,” Schultz said.

Schultz said he expressed those same concerns to Stern, but received an unsympathetic response.

“I told Commissioner Stern that I did not consider the NBA’s assurances regarding locating a team in Seattle to be strong enough for me to dismiss ... (the) lawsuit,” Schultz said. “In response to that, Commissioner Stern said that the NBA would offer no further assurances in that regard.”

Schultz said Stern also “implied” that he should reconsider his decision not to dismiss his lawsuit.

Asked if Schultz had fairly described their conversation, Stern issued the following statement to The Oklahoman Friday: "We had a friendly conversation at the close of which we both had stated our positions. There were no threats expressed or implied."

Schultz has continued to press forward with his lawsuit, which seeks to void the 2006 sale of the team based on allegations that the Oklahoma buyers fraudulently represented that they would use their best efforts to keep the team in Seattle.

Schultz doesn’t want ownership of the team back. Instead, he wants the judge to establish a constructive trust to search for an “honest buyer” who will keep the team in the Seattle area.

Thursday, Schultz’s lawyers asked the judge to split the trial into two parts — the first to determine liability and the second to deal with remedy.

Determining a remedy would require expensive and time-consuming litigation, Schultz’s attorneys said.

It would all be wasted effort if the judge determines the Oklahoma owners aren’t liable. Splitting the issues could save unneeded expense, Schultz contends.

The team’s Oklahoma owners plan to oppose splitting the trial, said Brad Keller, one of their attorneys.

Dividing the trial “is nothing more than a transparent ploy by Schultz to try to shield from judicial scrutiny the fatal legal deficiencies in the remedies being sought,” Keller said. “Bifurcation would only delay and unduly prolong a lawsuit that never should have been filed. The whole case — all claims — can and should be tried and decided by next June.”

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