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Minute-by-minute: Day 6 at Seattle vs. Sonics trial

03:27 PM PDT on Thursday, June 26, 2008

By TRAVIS PITTMAN / KING5.com

KING5.com is providing minute by minute coverage of the lawsuit by the City of Seattle vs. the Professional Basketball Club, LLC (The Seattle SuperSonics).

3:25 p.m. - The trial is over. Judge Pechman says she will post her decision online next Wednesday, July 2 at 4 p.m. Be sure to log on to KING5.com and NWCN.com to read the ruling.

3:17 p.m. - Lawrence has a brief chance for rebuttal. He says he has found Washington Supreme Court case law in Rowland v. Cook showing precendent in a case similar to this one. Lawrence also going through a flurry of other cases he says relates to this one. Lawrence says we did not hear from Keller on a lot of specific case law. He says the Sonics are trying to get the judge to rule on "a major misstep by Mr. Gorton." Lawrence says the PBC wants the court to rule that a team can leave a city anytime a better offer comes along, even though they knew exactly what they were getting into with the lease when they bought the team in 2006.

3:14 p.m. - Keller points out that there are other parts of the lease that are not open to arbitration. He says the landlord undermining the tenant and trying to force the tenant to sell will continue to sell. He then asks Pechman why she should use her judgment to let the broken marriage continue. He ends by asking Pechman to stop the bleeding.

3:07 p.m. - Keller says the trial shows an enormous level of distrust between the city and the PBC's ownership. He says that even if you get rid of the lawyers, the Mayor still remains, and Keller reiterates that Nickels said he wanted the team sold. Keller also says, going back to the lease, that there's no specific agreement about the luxury suites. Keller says the city prevented short-term leases of the suites.

3:05 p.m. - Keller also asks how a team can bring in good coaches and free-agents with so much uncertainty about the team's future. He reiterates what Mayor Nickels said in his video deposition that his goal was to have the PBC sell the team.

3:00 p.m. - Back in session. Keller showing numbers by MZ Sports consulting firm and Goldman Sachs showing that projections for the Sonics losses the past two seasons fell far short of the actual losses. Keller also wonders about morale and civic pride when employees are just trying to stop the bleeding and the owner can't come to a game without being surrounded by security guards.

2:45 p.m. - Keller saying the reason Seattle can’t guarantee it will get another NBA franchise if the Sonics leave is that KeyArena is not attractive for any NBA team. He also shows Nickels’ deposition again in which he admitted that the marketplace has changed so much since the lease was signed that it has a profound impact on both sides. Court in recess until 3:00 p.m.

2:42 p.m. - Keller cites Arnold v. Melani (1969) “In prior cases the relief herein afforded has been somewhat incorrectly referred to as a ‘balancing of equities’ This doctrine is rather the judicial recognition of a circumstance in which the party uses a legal right to gain purchase of an equitable club to be used as a weapon of oppression rather than in defense of a right.”

2:36 p.m. - Keller says he can't cite a case where a landlord has tried to undermine a tenant like this - in other words, there is no prior case law to refer back to. Keller says it all comes down to whether "this court is willing to be used." Keller reminds Pechman that Griffin testified that he did not have the means to force the bleeding, but that the city and the attorneys did.

2:30 p.m. - Keller is showing a rather amusing illustration of a human brain. One side in green is labeled City's litigation lawyers. The other in blue is called Griffin Group's lawyers. Again, keep in mind that Gorton, a lawyer for K&L Gates, was also part of the PowerPoint group. Basically, Keller is asking how one side could not be talking to the other with Gorton involved in both.

2:24 p.m. - Keller says he takes no pleasure in revealing the apparent plot to try and force the Sonics to sell. A moment later, Keller begins going through the timeline of exhibits and e-mails showing the details of the plan, from the "Very Machiavellian stuff" e-mail in July 2007 to the October PowerPoint presentation to the December 2007 e-mail saying "Bennett will sell at a reasonable price only if pressured by NBA or if he faces and expensive and unpleasant legal future." Keller also showing video of Nickel's deposition again in which he admitted that he wanted the team sold to local ownership and was working to make that happen. Nickels said he agreed that the sale was more likely if the PBC was forced to keep the team at KeyArena through 2010.

2:20 p.m. - Keller sites in Washington Trust Bank v. Circle K (1976) “A suit for specific performance will not lie if there is an adequate remedy at law available to the injured party. It has long been held in Washington that there is an adequate remedy at law in damages for the breach of a lease agreement. Consequently, the trial could did not abuse its discretion in denying the Bank’s request.”

2:15 p.m. - Keller says this case wouldn't even be happening if there wasn't a specific "home game" clause in the contract. He says the KeyArena lease has created a dysfunctional relationship between the city and the Sonics.

2:12 p.m. - Keller pointing out that even Andrew Zimbalist, the economist who testified on Day 2, found a quantifiable impact in a 2005 report on the Los Angeles Angels of Anaheim baseball team. It’s interesting he’d point that out considering the Sonics attorneys tore apart Zimbalist’s testimony in regards to his study on the Sonics' impact to Seattle.

2:08 p.m. - Keller says since the enactment of Initiative 91 says it shows that, by law, intangibles do not matter to determining economic impact. He asks what civic pride is there when poll after poll says citizens don’t want to spend money on a new arena? What civic pride is there when attendance is dwindling? What civic pride is there when four trips to the legislature in recent years ended up with nothing in return for public funding on either a new arena or renovated KeyArena.?  The answer to all of those, Keller says, is “not much.”

2:00 p.m. - Brad Keller, lead attorney for the Sonics, begins his closing argument. Keller argues that the indirect impact of the Sonics is, in fact, quantifiable. He says the testimony of both the city's and the team's economic witnesses show that.

1:55 p.m. - Pechman and Lawrence debate over whether Gorton created a conflict of interest as part of K&L Gates, which represents the city, and his part with the private investors. Lawrence seems to be resigned to the fact there may have been some conflict but adds that K&L Gates has no vested interest in the case. Lawrence goes on to talk about the alleged hardship argued by the PBC. He notes that attendance has dropped in step with the Sonics' performance on the court and that part of the losses projected are due to the Sonics' perceived "lame duck" status if they say in Seattle for two years knowing they'll move afterward. Lawrence wraps up. Pechman says the city has about three minutes for rebuttal.

1:51 p.m. - Lawrence goes through previous case law on the “unclean hands” issue brought up by the PBC. He gives examples of five cases were “unclean hands” was found, but says none of the circumstances in those cases match what’s happening in this case. Lawrence also goes through a timeline in and around the “poisoned well” PowerPoint. It shows that KeyArena renovations were discussed before the Sonics filed for arbitration. After that, Walker was retained by K&L Gates, the city filed suit, and Mayor Nickels learned of the Griffin/Ballmer group. He shows a separate timeline involving the independent investors and reiterates that Nickels knew nothing about it and that the two groups did not get together until 2008 to get KeyArena renovation funding.

1:44 p.m. - Lawrence citing the case of King County vs. the Seattle Seahawks in 1996 in which it was found that the loss of the Seahawks would cause irreparable harm in intangible benefits because “the amount of damages will not be subject to reasonable calculation.” City should have about 15 minutes left.

1:37 p.m. - Lawrence and Pechman discussing the Sonics' civic pride and how it translates into a dollar value. Each side presented economists who have differing views on that answer. Lawrence says it's difficult to come up with an exact dollar figure in that regard.

1:33 p.m. - Lawrence wraps up his angle about how the Sonics are unique to do their history and fan support and why another tenant won't be able to replace that. Now he's discussing the economic impact, including $25.3-$26.3 million dollars per year in household income for Seattle over the past five years, the 1,200 - 1,300 jobs supported by the Sonics and the game day spending at businesses surrounding KeyArena Lawrence also showing the charitable causes the Sonics contribue to.

1:28 p.m. - Court back in session a little early. Judge Pechman informs Lawrence the city has 30 minutes left to make its case.

12:05 p.m. - Court in recess until 1:30 p.m.

12:00 p.m. - Pechman asking if the sentimentality towards the Sonics is relevant. She says those emotions reflect individuals, not necessarily entire communties. She mentions that not everyone agrees on other issues, such as homelessness, that city governments have to make decisions on as well. Lawrence says the city makes public policy choices to serve its citizens. He says the PBC has suggested that the citizens don't care if the Sonics leave, and polls show that a majority agree with that statement. However, Lawrence says Alexie's impassioned testimony shows people in Seattle do care.

11:56 a.m. - Lawrence also saying there's no way to replace the 41-year history of the Sonics in Seattle, going back to Sherman Alexie's emotional testimony last Thursday as a 12-year season ticket holder. Alexie testified that the fans have not been given a proper way to say goodbye.

11:51 a.m. - Now Lawrence shows how assessing damages in this case would be inadequate. He says the Sonics are unique and that the PBC's attorneys don't argue that fact. He's showing a photo with all the Sonics divison, conference, and league championship banners hanging in the rafters at KeyArena. Lawrence adds there's no market the city can go to in order to get a replacement NBA franchise.

11:47 a.m. - Pechman wondering about how both sides will act toward each other after the ruling. Lawrence says everyone involved is “sophisticated” and will be well behaved. Pechman then questions how sophisticated they are. She makes a comparison, saying that when Mayor Nickels wanted to talk about renovating KeyArena and Bennett said it wasn’t worth talking about was like having both sides go to their corners. Lawrence says the Mayor wanted to talk about keeping the Sonics through the lease and was not willing to discuss a buyout.

11:40 a.m. - Lawrence says the lease has a mandatory arbitration clause to settle disputes which he says would never end up in federal court. He says in those cases it would end up before "some triple-A arbitrator."

11:36 a.m. - Lawrence now going over the elements of specific performance. citing a previous Washington State Supreme Court Ruling that ."..a trial court may order specific performance only if there is a valid binding contract; a party has committed or is threatening to commit a breach of its contractural duty; the contract has definite and certain terms; and the contract is free from unfairness, fraud and overreaching."

11:33 a.m. - Lawrence draws a parallel between KeyArena and the Ford Center in Oklahoma City. Bennett testified that the Ford Center is not a state-of-the-art arena now, but it will be in a couple of years after renovations paid for by voter-approved public funding. Lawrence says it's clear and there's nothing ambiguous in the lease that the Sonics will play through the end of the 2009-2010 season.

11:27 a.m. - Lawrence says the PBC knew the city would enforce and assume the lease: In July 2006, PBC buys the Sonics.Mayor Nickels told Bennett the city would enforce the lease. In October, PBC assumed the lease with no changes and would assume all liabilities and obligations. Lawrence points out that neither the Ackerley and Schultz groups never came forward to renegotiate the lease. Pechman asks if that is true, based on the fact the Schultz group lobbied in Olympia for public funds for renovation. Lawrence replies that the lobbying was for upgrading KeyArena after the current lease ended. He goes on to clarify that nobody was arguing until the PBC showed up that the city was not living up to its end of the lease.

11:22 a.m. - Lawrence says there is nothing in the lease that says the city will keep it as a state-of-the-art facility throughout the entire 15-year term of the lease. He adds that KeyArena “works just fine” and all that has changed is new ideas for generating revenue. He says there are no suggestions from any prior owner that the city was not living up to its end of the lease. In terms of revenue, Lawrence refers for former Seattle Center Director Virginia Anderson's testimony that the lease had risk for both sides.

11:15 a.m. - Lawrence showing the "memorandum of understanding" between the city and the Acklery Group when it owned the Sonics. It says "The Sonics will continue to provide certain public services" to the community. The lease was subsequently signed. Lawrence goes on to show that the cornerstone for the city paying for a KeyArena renovation was linked to the Sonics being the primary tenant and that the Sonics ownership then agreed to stay through 2010. Lawrence then says "the key was thrown away" and the Sonics were locked in when the lease included language that said the city could seek to make sure specific performance was adhered to. Lawrence shows how Bennett testified that there was no out clause as far as he knew.

11:10 a.m. - Lawrence starts closing arguments saying the city has proved specific performance for the Sonics at KeyArena. He makes three points -- The city is not a developer. KeyArena is not a Strip Mall. The Sonics are not a Wal-Mart. Lawrence showing previous rulings from other states about the use of public funding for specific items. Lawrence says the point of the lawsuit is to make sure the Sonics live up to the lease agreement for specific performance.

11:07 a.m . - Just talked to Brian Robinson of Save Our Sonics about his thoughts. He thinks things are going well. I also asked him what he’s heard about Judge Pechman and how she might rule. The one thing that really stood out is that after talking to three other attorneys who have gone before Pechman, Robinson says Pechman doesn’t like to be appealed. One of the attorneys even suggested that Pechman may lean her objections more towards the side the ultimately ends up losing the case. According to Robinson, that attorney said he/she would rather have Pechman side against them during trial than with them.

10:49 a.m. - Ceis not allowed to testify. Court in 15 minute recess.

10:44 a.m. - Pechman says the deposition shows that there were several large sections of the deposition in which city attorney Greg Narver invoked attorney-client privilege and that she finds no indication waiving that privilege. She says Taylor then goes on to ask questions about meetings and conduct, which Pechman says breaks the privilege. Pechman says “you can’t use the privilege as a shield and then turn around and use it as a sword.” She goes on to say the city did not go on to identify its scope for the privilege and that the Sonics didn’t have a chance to engage in discovery for Ceis’ or the city’s involvement. She also clarifies that Taylor is not arguing that Ceis did not see the PowerPoint.

10:40 a.m. - Lawrence also says the city reserved the right to call Ceis as a rebuttal witnesss if the Sonics did not. Pechman asks Taylor if the Sonics contend that Ceis knew about the PowerPoint. Because Taylor isn't going up to the microphone to answer, I could not hear his response.

10:36 a.m. - Pechman suggests it appears Lawrence is trying to shield Gorton's activities in the PowerPoint with his involvement in the city's lawsuit against the Sonics. Lawrence reiterates he's trying to show that Ceis did not see the PowerPoint and knew nothing about it until his deposition.

10:27 a.m. - Taylor says the Sonics object to Ceis’ testimony about the K&L Gates involvement as hearsay.  Lawrence then comes back and says K&L Gates was retained by the city to work on this lawsuit.  Lawrence says some of the testimony they’re seeking from Ceis involves new evidence just admitted this morning. Also, he wants to show through Ceis' testimony that the defense's "unclean hands" argument about the city stands up. Judge Pechman says the request basically would show that K&L Gates worked on this outside the scope of the lawsuit. Lawrence doesn't really answer yes or no, but goes on to reference materials in which K&L Gates was working with the new ownership situation outside the city's litigation.

10:23 a.m. - Taylor says there was never a waiver of the attorney-client privilege communicated.

10:15 a.m. - Lawrence says that there wasn't a complete waiver of Ceis' deposition based on attorney-client privilege, which the Sonics used as its reasoning for asking for the motion to exclude Ceis' testimony. Sonics lawyer Paul Taylor is respondng says the rebuttal is not proper partly because, due to the attorney-client privilege waiver, the defense hasn't had time to prepare for Ceis' testimony today. Taylor also says there are so many people from the city involved in the case, it makes no difference whether Ceis knew anything.

10:12 a.m. - Lawrence formally asks to put Ceis on the stand to discuss the scope of the city's level of involvement in the PowerPoint and the search for new ownership. Remember that former Sen. Slade Gorton, who works for K&L Gates, was part of the PowerPoint. K&L Gates is representing the city in this case.

10:07 a.m. - They're going through some evidence involving former Sonics President Wally Walkerr and his involvement in the PowerPoint presentation. Because the evidence isn't being shown on the evidence monitor, it's hard to follow w

Taylor says the Sonics object to Ceis’ testimony about the K&L Gates involvement as hearsay.  Lawrence then comes back and says K&L Gates was retained by the city to work on this lawsuit.  Lawrence says some of the testimony they’re seeking from Ceis involves new evidence just admitted this morning.

hat the issue is.

9:58 a.m. - The city's lead attorney Paul Lawrence going through some housekeeping stuff with the judge on new and previous exhibits. Waiting to hear decision on Ceis testimony.

9:51 a.m. - The Sonics now showing other evidence. One involves transcripts of a press conference with Seattle Mayor Greg Nickels and former U.S. Sen. Slade Gorton. Narver says it’s relevant because Gorton, speaking as attorney for the city, says the city “has been working hand in glove” with the Steve Ballmer group on a KeyArena solution. After two more pieces of evidence, the Sonics rest their case.

9:45 a.m. - City Ordinance 122492 passed on September 10, 2007 is presented into evidence. Licata says the council’s intent by passing the ordinance is basically to not let the PBC buy its way out of the KeyArena lease. The Sonics object. Narver argues in response that it shows the city does care whether the team leaves Seattle. The objection is overruled. Licata testifies he felt very strongly that the contract should be completed. Licata is excused.

9:37 a.m. - Narver going back to the Si article which says "Licata's views are more hard line" than his colleagues, to which Licata agrees is true. Also showing an e-mail newsletter from Licata to Seattle citizens after the article saying “there is no doubt that my glib, foolish remark several months ago on the relative unimportance of professional basketball in Seattle was smug and wrong. In my clumsy way, I was trying to point out that Seattle is a world-class cultural city for a variety of reasons, not just because of the Sonics.” Licata now testifies that he no longer thinks the Sonics cultural impact is close to zero.

9:34 a.m. - Licata testifies that he agrees that Seattle will still be a world-class cultural city if the Sonics leave. Cross-examination begins from city attorney Greg Narver. Licata testifies that he believes funding for an arena should include significant contributions from the team.

9:25 a.m. - Keller showing a video from March 29, 2006 in which Licata is telling the Parks, Education Libraries and Labor Committee about options for KeyArena. He said then that the Key could be morphed to handle other events. Licata says now, jokingly, that it was a "great speech." Now Keller is showing a Licata interview in a Sports Illustrated article from spring 2006. Licata says in court "given all the publicity, I'm surprised I'm not on the cover." Judge Pechman says "that might be reserved for me." Licata told SI that he had read a report on the Sonics departure and determined that it would have a near zero economic impact. He also told the SI reporter that it was his opinion that the Sonics would have near zero cultural impact, but adds that it was an off-the-cuff flippant remark.

9:20 a.m. - Licata says with a minimal investment, KeyArena could be a good NBA facility. Licata testified that one of his alternatives for KeyArena was to convert it for concerts and other events if the Sonics leave.

9:14 a.m. - Licata agrees with Keller that he was a tenacious opponent when it comes to “excessive public subsidies.” Licata is also testifying about meeting with Sonics Majority Owner Clay Bennett about keeping the team in Seattle to talk about reasonable amounts of public subsidies. Also, while the Sonics were trying to get funding through Olympia in 2007, Licata was in Washington, D.C. testifying before Congress in which he said his experience "has not revealed any lasting advantage of subsidizing huge stadiums or arenas." He went on to tell Congress that outside of meager visible evidence, there is no major boost to retail business around stadiums and arenas.

9:10 a.m. - Licata testifies says he can’t think of a sports facility built in Washington state in the last 30 years that brought a return to the public. Keller then showing another section of the posting written by the City of Seattle’s law department about I-91 that says “The computation of return for the City would specifically exclude ‘all tangible, indirect, non-cash items such as goodwill, cultural or general economic benefits to the city.’" Licata agrees. Keller reiterates that Initiative 91 was passed overwhelmingly by voters.

9:05 a.m. - Lead Sonics attorney Brad Keller is showing a posting on the City of Seattle Web site about Initiative 91, which was approved by voters to prevent subsidies for pro sports teams. One section says “Studies show that the Sonics have a limited economic impact on Seattle, that most money spent at pro-sport games is discretionary and would otherwise be spent elsewhere in our region.” Licata says he agrees with that.

9:01 a.m. - Court is in session. Judge Pechman says the City has 139 minutes left to present its case. The Sonics have 153 minutes. Judge Pechman says she'll wait until Licata is done on the stand before deciding on Ceis.

8:25 a.m. - Today is the final day of the trial. Testimony will wrap up with Seattle City Councilmember Nick Licata. If you remember from Friday, he testified that he believes the Sonics have a limited impact on the City of Seattle. After Licata, the City wants to call Seattle Deputy Mayor Tim Ceis as a rebuttal witness in order to show the City was not involved in the "poisoned well" powerpoint presentation, which was partially aimed at trying to get the PBC to sell the team. The Sonics' lawyers want Judge Marsha Pechman to exclude that testimony, saying that Ceis was prevented from answering those questions during deposition due to attorney-client privilege. We expect to hear an answer on that fairly early today. All that will be followed by closing statements.

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