Hornets Hype

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Archive for November, 2011

Representatives of the NBA players proclaimed that they hoped for a summary judgment in their federal litigation within sixty days of filing suit. The Owners claimed the players turning to litigation was a sham, meant as an improper negotiation tool, and likely ended any hope of an NBA season this year. Had the players stuck out their litigation, the Owners would have been right; but, regardless, the Players fell right into Stern’s trap.

Before the players disclaimed their Union, the NBA and the Owners, on August 2, 2011, filed suit in the U.S. Southern District Court of New York. As a time-reference, the case has basically gone nowhere in over three months. It is Civil Case 11-cv-05369, before Judge Paul G. Gardephe. In federal litigation, Rule 12 of the Federal Rules of Civil Procedure provides that defendants have 21 days to answer a lawsuit after the Complaint has been served; but, if the defendants waive formal service, they have 60 days to respond. While it is not clear when the various services were made in this case (which probably indicates formal service was waived), the court held a status conference on September 7, 2011, which is quicker than one might have expected. At that telephone conference, the Players indicated an intent to file a Motion to Dismiss, and, a week later, the Court ordered it filed by September 16, 2011. Any written opposition by the NBA (or its individual teams) was ordered due by October 10, 2011, with any response by the players to that opposition due by October 19, 2011. Other conferences were had with the judge, though, several delays were requested, and finally, the players filed their Motion on October 19th. The NBA’s opposition was filed shortly thereafter. The matter is still under consideration. This is the timetable one can expect from federal litigation.

No Union what?The NBA and its individual teams filed their suit as a preemptive strike, asking the Court to declare that any attempt to disclaim or decertify would be an improper action, a violation of the collective bargaining process. They pointed in their Complaint to a long history of the Players threatening to do this in an effort to leverage a better bargaining result, and asked the Court to find this bad faith bargaining, to find the lockout valid under antitrust laws, and the disclaimer invalid. The NBA and the pointed out that a different federal court had recently refused to order an injunction against the NFL lockout. The Players’ Motion to Dismiss, in which they essentially called the NBA’s suit bullshit posturing about “what if” scenarios and an improper legal response to the hard bluffs of negotiation, was a fairly good argument that the NBA’s suit was premature, and that there was as of yet no justiciable controversy. The problem is, the Players derided the “disclaim” option as totally unfounded, preposterous, and an option that wasn’t even being considered by the players, who, allegedly, were bargaining in good faith with the League. Oops. The day after the Players did disclaim their Union, the NBA wrote a letter to the Judge, arguing that the Players’ had done precisely what they threatened to do, and that any “what if” objections the players had were clearly moot. The Players’ attorneys’ response was a not-too-thinly-veiled we spent X hours preparing this Motion to get this fucker dismissed and the players did what? type of response. The Judge did not appear happy.

Meanwhile, the players, on November 15, 2011, filed two suits: one in the U.S. District Court of Minnesota and one in the U.S. Northern District of California. They ended up voluntarily dismissing the California action, perhaps they were forum shopping, hoping for a friendly judge, and ultimately realized the Minnesota court was where they wanted to be. Or, perhaps it was the fact that California Judge Samuel Conti set a scheduling order the date the suit was filed, ordering that the Rule 26 Conference be had on February 8, 2012, with another case management conference on February 29, 2012. This was Civil Case 11-cv-05525. A Rule 26 conference is what leads to the initial disclosures each side makes, and pre-dates any discovery, depositions, and most other court actions. So there’s another timetable. And this is typical of any case, let alone a multi-billion dollar case, which, I can assure you, no judge is in any hurry to decide. In a car wreck case, valued at $50-100k, judges like to allow the parties to negotiate and settle it between themselves. So what do you think is going to happen here? Regardless, the Players dismissed their California suit.

The Minnesota suit is Civil Case 11-cv-03352, before Judge Patrick J. Schlitz. Interestingly, each of the New York, California, and Minnesota suits requested jury trials. Did the players really think twelve random people were going to feel sorry for them only making $3M a year instead of $5M? But I digress. A week after filing suit, court records show service returns on the NBA, the New York Knicks, and the New Jersey Nets. It is highly unlikely the Court will hold any status conferences until everyone is served. So since we’re already two weeks out, even if served this week, each of the other 28 defendants will have 21 more days to answer. Or 60 if they signed waivers of service. If the players sent waivers. I would have just gone straight to formal service if I was trying to push along a case. But you would expect the NBA to ask for a dismissal or stay pending the outcome of their litigation in New York. So that would require briefing, argument, and time for the court to decide.

As for the players’ claims of summary judgment within sixty days? You can’t get judgment on a party that hasn’t answered. So while the NBA, Knicks, and Nets have to answer by December 13, 2011, expect for them to request an extension in the time to answer until all the defendants are served. So there’s no chance in hell a summary judgment is filed in 60 days, let alone decided. Plus, even ignoring the fact that the NBA and League would first file a Motion to Dismiss or Request For Stay, litigants have to give their opponents a minimum of 15 days notice when filing. There is no chance they could get a date set before New Year’s, and even once the Motion is submitted, even if oral argument is granted, the Court does not have to decide anything on the spot, and can take the matter under advisement, after which there is no rule controlling when a decision must be rendered.

Stern's way or the highway.Also, as opposed to a Motion to Dismiss, which merely focuses on the sufficiency of the Complaint, a Motion for Summary Judgment must be submitted with sufficient evidence, and the non-movant can, under Rule 56, always request a continuance (or denial) of the Motion if it needs more time to do discovery. And can you imagine in a multi-billion dollar case that a judge would refuse to allow the parties to conduct plenty of discovery? Not to mention that if a summary judgment is denied, and the case continues, it could be years before going to trial. Our legal sources, who asked not to be named, indicated that their last federal summary judgment action came 10 months after suit was filed, and a month later, no decision has been rendered. The last two federal trials that our same sources participated in took place over two years after the filing of suit. These are the timeframes we can expect from any litigation. Now or in the future.

So, now, only weeks after claiming the Union was not protecting the Players’ interests, a deal looks to be worked out? Of course, to sign a new CBA, the players have to first dismiss their Minnesota suit and then reform the Union. So did the players tactic work? No. Stern is playing chess, not checkers. He’s not just trying to win this round, but the next. And in six years, when the new deal will likely expire, the NBA will file their New York suit all over again, and when the players respond that the mere concept of them “disclaiming” is ludicrous, that judge will shake his or her head and know the players are lying. The players filed suit claiming the Union could not help them, and that, resultingly, the NBA was instantly in violation of antitrust law? Yet, then, mysteriously, without the Union’s help, they reached a deal not even two weeks later, which, I would wager, looks suspiciously similar to the deal the Union had negotiated up to the point of disclaimer? The NBA’s preemptive suit argued that antitrust exemptions were not lost the instant a Union disclaims or decertifies, and their argument that the tactic of doing so is a sham just got stronger. Have the players thought that through? Their lawyers, who are the same high-priced antitrust sports experts, who tried similar cases decades ago for the NBA, and recently for the NFL, must be furious. What will their argument be next time?

Read the timelines referenced above again. No federal court case worth billions of dollars will be decided in any less than one year, and likely not for two or more years. That’s assuming, of course, no decision is ever appealed. Our sources were involved in a March 2006 federal lawsuit, whereby summary judgment was granted in September 2007. The other side appealed to the U.S. Fifth Circuit Court of Appeals. After briefing and argument, a decision was not rendered until September 2008. But, an en banc hearing was requested. That is, unsatisfied with the decision of 3 judges, one of the parties requested a hearing before the entire Fifth Circuit panel. After additional briefing and argument, a decision was rendered in December 2009. But, that too was appealed. The U.S. Supreme Court accepted briefs and arguments, and in June 2010, over four years and three months since suit was filed, the matter was finally resolved. While it is possible a year could be cut off that timeline if the Supreme Court declined to hear the matter, if anyone thinks either the players or NBA would be content to let a trial court judge decide their billion-dollar fates, they’re crazy. This is how litigation works. It will not be over quickly. The parties will not enjoy it. No one wins.

So no is the answer to the question you haven’t asked, as to whether litigation is an effective tactic in professional sports collective bargaining disputes. By the time any resolution is reached, multiple seasons will have been lost. And if liability carriers are willing to settle cases for $50k to avoid maybe paying $100k, can you imagine the trepidation of either side in the NBA being found liable for billions? It will never happen. So what happened then? What was this litigation all about? It was a ploy. A stratagem. The players get to save face and tell the world they forced a resolution. But they also haven’t told us how many hundreds of thousands they spent on legal fees when they could have just paid for plane tickets back to the bargaining table with the NBA. And they’ve all but told federal courts that this is what they do, and that disclaiming is an empty, bogus threat. Just look at the November 26th news conference announcing a tentative deal: Fisher and Hunter were there. (No Union exists, but they are still negotiating with the League? ¬†Even during the litigation? Judges will watch this process.) ¬†Next time this comes to court, the Players arguing disclaimer is not a sham will look like liars. So the NBA wins. Sort of.

The biggest losers of this whole experience however, are the rest of us. The arena workers prevented from working. The fans unable to watch the games. The fact that multi-millionaires couldn’t agree to share a multi-billion dollar pot isn’t the biggest concern to most ordinary people. We just want basketball. Union, Players, Owners, Teams: at the end of the day who cares who wins? This isn’t about protecting the pensions of people struggling to pay mortgages; this isn’t about keeping wages up for people struggling to put their kids through school. This is one faction of the 1% calling the other faction of the 1% greedy bastards. Black, meet Kettle. Kettle, Black.

As for me, all I want is a fair system that gives every team the opportunity to win. A system that allows Chris Paul to be to New Orleans what Brett Favre was to Green Bay. Moreover, I want a league where the cult of personality does not decide the fate of the team; where, for example, a young Aaron Rodgers can be brought in to lead the next generation of small-town fans to frenzy when Favre walks. I don’t want losing Chris Paul to make people question whether New Orleans should even have a team. If that means caring who “won” the lockout, then maybe I do care.

But litigation wasn’t the answer. For either side. It was never going to solve anything. For both Players and Owners it was bullshit posturing. Now we get 66 games crushed in from December to April. And for what? I hope it was worth it for both sides, who spent so much of this summer not meeting. Remember that when you think of these lost 16 games and all the crying over lost revenue. Right now I just want to remember why I am such a huge basketball fan. Because, honestly, turned off as much as I have been by both sides throughout this process, it’s hard to remember why Samuel L. Jackson’s last lockout commercials (“The NBA, it’s faaAAAAAaaaantastic”) made sense.