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Thursday, October 25, 2007
Handicapping the Oklahoma City Supersonics
We haven't blogged much about the lawsuit filed by the City of Seattle against the Oklahoma-based ownership of the Seattle Supersonics basketball team seeking to force the team to stay in Seattle. Mike had a few comments on the dispute here.
In any other setting, a commercial lease tenant should be able to break a lease, leave a space, and then pay damages, if any, to the landlord. But sports team leases are special -- particularly when local judges are involved in deciding a case. The Sonics decision may be shaped by the legacy of a Minnesota Twins relocation decision handed down a few years back by a state court judge (Metropolitan Sports Facilities Commission v. Minnesota Twins Partnership, 638 N.W. 2d 214 (Minn. App. 2002)).
In that case, the court ordered the Twins to play out the last year of their lease, scuttling MLB's plans to contract or relocate the team. The court's issuance of an "affirmative injunction" was purportedly based on the irreparable harm that would result to Minneapolis and St. Paul were the team to move or disappear. Two things should be noted about the decision: (1) It was handed down by a sentimental state court judge and (2) It was bad law. Even if one is happy that the Twins stayed put and MLB took the team out of its cross-hairs, it's hard to defend the court's ruling on a legal level. The fact is, the Twins would have been free to leave at the end of the year covered by the court's injunction -- the lease, at that point, would have expired and any specific performance clause would no longer be enforceable. The assertion that the Twins leaving a year early would cause harm that could not be repaired is a stretch given that nothing could have stopped them from leaving -- or stopped MLB from contracting the team -- a year later. For a great analysis of the Twins case, see Matt Mitten's article on the subject from the Iowa Law Review. Notably, the Sonics owners have volunteered to pay the rent for the remainder of the lease, so it would be hard to imagine a court issuing an order of specific performance unless it treads the same ground as the Minnesota court did a few years ago and takes into account the "positive externalties" that would be damaged were the team to decamp.
Still, it's easy to imagine a Washington state court being motivated to stop the Sonics owners relocation plans. Wisely, the Sonics have moved the case to federal court -- where one might expect a more disciplined consideration of the legal issues involved. Moreover, the owners of the Sonics are seeking to have the matter resolved by way of arbitration pursuant to an arbitration clause in the lease (a move the City, as indicated in its complaint, intends to fight). One wonders why MLB did not pursue these options -- assuming they were available -- in the Twins case. Overconfidence? Lack of diversity jurisdiction?
The City of Seattle's complaint itself can be downloaded or viewed in PDF form via a "related content" link here.
Will the two sides reach a deal before the October 31 NBA league meeting next week, when the Sonics will ask for permission to relocate the team (presumably to Oklahoma)? Maybe not. Acrimony has clearly developed in the Jet City. Two fans are even suing the Sonics for false advertising after the team invited fans to be part of a "New Era of Sonics Basketball."
Unless an agreement is reached, this is likely going to be the next great saga in American sports law. It seems -- based on the Twins case -- that cities now seek to delay relocation and contraction plans using litigation. That tends to muck up the best laid plans of commissioners and owners, and the result is a team tends to stay even though it could, subsequently, move without a problem. But maybe this group of owners is more determined (or more flush with cash).
For links to various articles on the Sonics dispute, see here.