City of Seattle v. Professional Basketball Club LLC

Filing 87

REPLY, filed by Plaintiff City of Seattle, TO RESPONSE to 63 MOTIONS IN LIMINE REDACTED - to Exclude Evidence of Defendant's Efforts to Obtain a "Successor Venue" to KeyArena (Lawrence, Paul)

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City of Seattle v. Professional Basketball Club LLC REDACTED Doc. 87 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 I. v. PROFESSIONAL BASKETBALL CLUB, LLC, an Oklahoma limited liability company, Defendant. The Honorable Marsha J. Pechman UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE CITY OF SEATTLE, a first-class charter city, Plaintiff, No. C07-1620 MJP THE CITY OF SEATTLE'S REPLY IN SUPPORT OF MOTION IN LIMINE TO EXCLUDE EVIDENCE OF DEFENDANT'S EFFORTS TO OBTAIN A "SUCCESSOR VENUE" TO KEYARENA Note on Motion Calendar: June 6, 2008 SUMMARY OF REPLY The Professional Basketball Club, LLC's ("PBC") Arbitration Demand, filed before the City of Seattle's ("City") Complaint, relied upon PBC's efforts to obtain a successor venue as a reason it should be able to breach its Lease with the City. Declaration of Michelle Jensen in Support of the City of Seattle's Replies to Motions in Limine ("Jensen Decl."), Ex. A (PBC's Arbitration Demand). Having injected that issue into the dispute, PBC should not now complain that discovery was directed in part at those efforts. The City's discovery revealed evidence that the City believes shows PBC broke its promise to the Howard Schultz THE CITY OF SEATTLE'S REPLY IN SUPPORT OF MOTION IN LIMINE TO EXCLUDE EVIDENCE OF DEFENDANT'S EFFORTS TO OBTAIN A "SUCCESSOR VENUE" TO KEYARENA - 1 Case No. C07-1620 MJP K:\2065932\00001\20516 HAH\20516P2274 KIRKPATRICK & LOCKHART PRESTON GATES ELLIS LLP 925 FOURTH AVENUE SUITE 2900 SEATTLE, WASHINGTON 98104-1158 TELEPHONE: (206) 623-7580 FACSIMILE: (206) 623-7022 Dockets.Justia.com REDACTED 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 ownership group and to the National Basketball Association ("NBA") to use good faith best efforts through October 31, 2007 to obtain a successor venue to KeyArena. If the Court denies this motion, then the City is prepared to show PBC's actions for what they are a wellfunded pretense, aimed at getting a team to Oklahoma City as quickly as possible. But the issue raised by the City's motion is whether PBC's efforts are relevant to this specific performance dispute or appropriately tried in the ongoing litigation between PBC and the Howard Schultz ownership group. As demonstrated in the City's motion, PBC's efforts to obtain a successor venue are not relevant to whether the City is entitled to specific performance of the Lease. In the next case, PBC can try to explain that it did not defraud the Sonics' former owners or otherwise breach its "good faith" commitments, but the Court should reject the invitation to have this case devolve into a "mini trial" of PBC's dispute with the former owners. II. ARGUMENT The fallacy of PBC's response is that whether or not PBC obtained a successor venue, the Lease requires the Sonics to play all home games in KeyArena through the 2009-2010 NBA season. Declaration of Jonathan Harrison in Support of the City of Seattle's Motions in Limine ("Harrison Decl."), Ex. D (Lease, Section II, "Term; Use Period"). Even if successful in obtaining a new arena, PBC would have the same obligations to the City under the Lease as are at issue here, obligations that "are unique in nature... [and] may be specifically enforced by either party." Id., Ex. D (Lease, Section XXVII.L). It does not matter to the Court's resolution of this case whether Mr. Bennett traveled to Washington 5 times or 50 times on his corporate jet. Tellingly, PBC offers no legal authority whatsoever to suggest that availability of specific performance depends on a party's good faith commitments to a third party. PBC's only explanation for using the six day trial as a mini-trial of its good faith case with the former owners is that PBC's investors thought they would get a new arena. Resp. THE CITY OF SEATTLE'S REPLY IN SUPPORT OF MOTION IN LIMINE TO EXCLUDE EVIDENCE OF DEFENDANT'S EFFORTS TO OBTAIN A "SUCCESSOR VENUE" TO KEYARENA - 2 Case No. C07-1620 MJP K:\2065932\00001\20516 HAH\20516P2274 KIRKPATRICK & LOCKHART PRESTON GATES ELLIS LLP 925 FOURTH AVENUE SUITE 2900 SEATTLE, WASHINGTON 98104-1158 TELEPHONE: (206) 623-7580 FACSIMILE: (206) 623-7022 REDACTED 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 4:2-5. PBC's contention lies in stark contrast to the acknowledgement every PBC investor made as part of their securities law disclosures: Jensen Decl., Ex. B (PBC_10654). PBC's investors acknowledged in writing that they understood PBC would assume the obligations under the Lease, including the obligation to stay until 2010. They also admitted there were no assurances PBC would get a new arena and they invested anyway. In fact, before PBC acquired the Sonics, the National Basketball Association PBC's investors are billionaire and multimillionaire investors who admitted they could "bear the economic risk of the investment, [could] afford to have their funds committed to an illiquid investment for an indefinite period of time and who [could] afford the loss of their investment and to meet potential capital calls in the future." Id., Ex. B (PBC_10653). PBC's after the fact complaints do not justify breach THE CITY OF SEATTLE'S REPLY IN SUPPORT OF MOTION IN LIMINE TO EXCLUDE EVIDENCE OF DEFENDANT'S EFFORTS TO OBTAIN A "SUCCESSOR VENUE" TO KEYARENA - 3 Case No. C07-1620 MJP K:\2065932\00001\20516 HAH\20516P2274 KIRKPATRICK & LOCKHART PRESTON GATES ELLIS LLP 925 FOURTH AVENUE SUITE 2900 SEATTLE, WASHINGTON 98104-1158 TELEPHONE: (206) 623-7580 FACSIMILE: (206) 623-7022 REDACTED 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 and do not justify using this trial as a test case for the next lawsuit. PBC demanded a highly compressed trial schedule and now wants a "full-blown trial within [... a] trial." Duran v. City of Maywood, 221 F.3d 1127, 1133 (9th Cir. 2000) (noting that an inquiry into an unrelated issue would require numerous additional witnesses). The City identified approximately 100 exhibits in the pretrial order that relate solely to rebutting PBC's "good faith" case. The parties collectively identified at least three witnesses, Brent Gooden, Terry McLaughlin, and Jim Kneeland, who offer nothing more than testimony on PBC's efforts to obtain a successor venue. Pretrial Order (Docket No. 81). PBC should not be allowed to introduce evidence of its efforts to address the post-KeyArena era, given it will require significant trial time to address this marginally irrelevant issue. See City of Long Beach v. Standard Oil Co., 46 F.3d 929, 938 (9th Cir. 1995) (evidence that, although relevant, went to a "collateral issue" and would complicate trial was appropriately excluded). Finally, PBC's various accusations regarding the City's purported change in position regarding the relevance of this evidence serve as nothing more than sound bites for an audience separate and apart from this Court. The City engaged in discovery regarding PBC's intentions to move the Sonics to Oklahoma City because PBC offered its "good faith" efforts as part of its Arbitration Demand and then as defense to the City's claim of specific performance. Notably, PBC failed to provide any legal authority for such a position. Nonetheless, PBC's decision to oppose rather than stipulate to this motion is proof positive that the City's discovery efforts regarding PBC's good faith were necessary and appropriate. /// THE CITY OF SEATTLE'S REPLY IN SUPPORT OF MOTION IN LIMINE TO EXCLUDE EVIDENCE OF DEFENDANT'S EFFORTS TO OBTAIN A "SUCCESSOR VENUE" TO KEYARENA - 4 Case No. C07-1620 MJP K:\2065932\00001\20516 HAH\20516P2274 KIRKPATRICK & LOCKHART PRESTON GATES ELLIS LLP 925 FOURTH AVENUE SUITE 2900 SEATTLE, WASHINGTON 98104-1158 TELEPHONE: (206) 623-7580 FACSIMILE: (206) 623-7022 REDACTED 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 By: /s/ Paul J. Lawrence KIRKPATRICK & LOCKHART PRESTON GATES ELLIS, LLP III. CONCLUSION For the foregoing reasons, the City respectfully requests that this Court grant its Motion in Limine and exclude any evidence of PBC's efforts to procure a "successor venue" to KeyArena. DATED this 4th day of June, 2008. THOMAS A. CARR Seattle City Attorney Gregory C. Narver, WSBA No. 18127 Assistant City Attorney Attorneys for Plaintiff City of Seattle Slade Gorton, WSBA No. 20 Paul J. Lawrence, WSBA No. 13557 Jeffrey Johnson, WSBA No. 23066 Jonathan Harrison, WSBA No. 31390 Michelle Jensen, WSBA No. 36611 Attorneys for Plaintiff City of Seattle THE CITY OF SEATTLE'S REPLY IN SUPPORT OF MOTION IN LIMINE TO EXCLUDE EVIDENCE OF DEFENDANT'S EFFORTS TO OBTAIN A "SUCCESSOR VENUE" TO KEYARENA - 5 Case No. C07-1620 MJP K:\2065932\00001\20516 HAH\20516P2274 KIRKPATRICK & LOCKHART PRESTON GATES ELLIS LLP 925 FOURTH AVENUE SUITE 2900 SEATTLE, WASHINGTON 98104-1158 TELEPHONE: (206) 623-7580 FACSIMILE: (206) 623-7022 REDACTED