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Sterling sues NBA after wife sells L.A. Clippers to Ballmer

LiveMint logoLiveMint 31-05-2014 Edvard Pettersson

Los Angeles: Donald Sterling, who has owned the Los Angeles Clippers since 1981, sued the National Basketball Association (NBA) a day after his wife agreed to sell the team for $2 billion to former Microsoft Corp. chief executive officer Steve Ballmer.

Shelly Sterling said in announcing the record price Ballmer agreed to pay that she was acting under her authority as the sole trustee of the Sterling Family Trust.

Donald Sterling, 80, seeks more than $1 billion in damages, claiming the NBA violated his rights by banning him from the sport for life amid an uproar over his racist comments, as well as by fining him $2.5 million and taking steps to strip him of ownership of the team based solely on a conversation with a lover that he said was illegally recorded.

Sterling’s complaint, filed on Friday in federal court in Los Angeles, was premised on the assumption the NBA would go through with a 3 June hearing to terminate Sterling’s ownership of the team. He accuses the NBA of antitrust violations on the grounds that a forced sale would be anticompetitive. The NBA said on Friday that the 3 June meeting had been canceled.

Mr. Sterling’s lawsuit is predictable, but entirely baseless, Rick Buchanan, executive vice president and general counsel for the NBA, said in an e-mailed statement. Among other infirmities, there was no ‘forced sale’ of his team by the NBA — which means his antitrust and conversion claims are completely invalid.

Since it was his wife, Shelly, and not the NBA, who agreed to sell the Clippers, Donald Sterling’s lawsuit is based on non- existent facts, Buchanan said.

Steve Ballmer

Donald Sterling bought the then-San Diego Clippers 33 years ago for $12.5 million. It was put in the family trust in 2005, according to Donald Sterling’s complaint.

Two neurologists have deemed Donald Sterling to be mentally incapacitated, CNN reported, citing two people it didn’t identify. There is a provision in the Sterling Family Trust that if either Donald Sterling or Shelly Sterling become mentally incapacitated, then the other becomes the sole trustee, CNN said it was told by one of the people.

The complaint lists Donald Sterling and the trust as plaintiffs and names NBA Commissioner Adam Silver and the association as defendants.

A joint statement issued by the NBA and the trust said Shelly Sterling and the trust have agreed to indemnify the NBA against lawsuits by Donald Sterling.

Antitrust lawyer

Maxwell Blecher, a lawyer for Sterling, didn’t immediately respond to an e-mail seeking comment on Friday on reports of Sterling’s mental capacity and on the NBA’s statement that the cancellation of the forced sale procedure makes Sterling’s allegations moot.

Blecher previously represented Los Angeles Memorial Coliseum in a successful antitrust lawsuit in the 1980s when the National Football League tried to stop former Oakland Raiders owner Al Davis from moving the team to Los Angeles.

In other instances, federal judges have rejected antitrust claims by owners as a matter of law, Matt Mitten, a law professor and director of the National Sports Law Institute at Marquette University, said in a phone interview before the lawsuit was filed.

The furor over Sterling began after on 25 April published recordings in which he told his friend, a woman named V. Stiviano, that he was bothered by her associating with black people in public and posting a photo on Instagram of herself and Hall of Famer Magic Johnson at a game.

‘Gorgeous’ guys

The impetus for the conversation in question was Stiviano telling Sterling that she was going to bring ‘four gorgeous black guys’ to a Clippers game, according to Sterling’s complaint. Sterling, in a jealous moment, asked Stiviano, who is half African-American, not to bring black people to Clippers games and to refrain from posting pictures of herself with black people on Instagram.

The recorded remarks drew condemnation from President Barack Obama and fellow NBA team owners including Microsoft co- founder Paul Allen.

Silver banned Sterling from the league for life on 29 April. The league on 9 May installed former Citigroup chairman Dick Parsons to run the Clippers until the ownership issue is resolved.

Ballmer, 58, outbid at least four other suitors. Each of the bids shattered the previous record sale price for an NBA team of $550 million paid in April for the Milwaukee Bucks. Ballmer, with a fortune of $18.9 billion, is the 39th-richest person in the world, according to the Bloomberg Billionaires Index. He stepped down as Microsoft CEO in February.

Conflicting statements

Sterling has made conflicting statements about whether he would allow his wife to sell the franchise or fight their possible ouster in court. He signed a 22 May letter authorizing her to negotiate with the league regarding all issues in connection with a sale of the team.

In a 27 May letter that served as his official response to the allegations against him, he called the proceedings a sham and said he should be able to keep the team.

Pierce O’Donnell, a lawyer representing Shelly Sterling, didn’t immediately respond to phone and e-mail messages on Friday seeking comment on the case.

A lawsuit would only delay the inevitable, Daniel Lazaroff, director of the Sports Law Institute at Loyola Law School in Los Angeles, said in an interview before Sterling filed the complaint. He has become a real problem for the league.

Sexual relationship

Shelly Sterling in March sued Stiviano, saying her husband had a sexual relationship with the woman and gave her a $1.8 million duplex, two Bentleys, a Ferrari and a Range Rover as well as $240,000 for her upkeep, all of which came out of community property, according to court filings.

Stiviano’s lawyer alleged in a court request to throw out that case that Shelly Sterling was complicit in her husband’s extramarital affairs and couldn’t ask for a return of the valuables that her husband freely gave away.

In his lawsuit, Donald Sterling said his right to privacy under the state’s constitution was violated when Stiviano made a recording of him without his consent.

All the claimed adverse effects to the NBA flow from the illegal recording, according to his complaint. Accordingly, this entire proceeding violates substantive constitutional rights afforded Mr. Sterling by the California Constitution.

The case is Sterling v. National Basketball Association, 14-cv-04192, US District Court, Central District of California (Los Angeles). BLOOMBERG

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