Blazers threaten the rest of the NBA [merged]

My guess is that somebody got all pissed off and went to the attorneys, and the attorneys did what attorneys do and took care of their clients. "Let's write a letter!" Some junior lawyer did 10 minutes of research on the fiduciary duty thing, and it sounded good at the time, so "whammo." Mistakes were made.

League attorney's apparently aren't that impressed. That is why they are telling teams not to worry about it. But they have to be a little bit nervous about the union response, or why the Gilbert e-mail?

My strong guess is that Allen's attorney's (or whomever) are sitting with egg all over their face right now, meekly defending themselves and feeling very exposed.

 

Um, not really. They are saying that Miles has cleared waivers (true) and that his contract would be approved (true, by CBA rules), and nothing more. It says nothing about protection from any "bad faith" action the Blazers may take in the future.

Some real Einsteins in the NBA, huh?

 

Where are they telling teams not to worry about it? All the NBA said is that Miles has cleared waivers and can be signed to a contract. That's not news.

 

Again with the opinions, and "in perspective" fits. As for the fiduciary argument, if I am Paul Allen and Memphis is involved in a plan to take more of my money, damn straight I would be protecting my assets.

Regardless, that post offered a lot of insight, and after reading the micro-views here, the macro- approach that was taken makes a lot of sense to me.

 

is there any new news? is there any reason to read this whole thread?

 

sure, one of the richest men alive hired lazy incompetent lawyers to do their jobs. Despite his many references to how important the 2009 capspace could be, lazy dumb KP never followed through making sure this situation was fully checked out. right...

more likely the league's interests and Portland's are not one in the same as evidenced by their statements. Any team that wants to offer DM a guaranteed deal for the year shouldn't fear a lawsuit... another 10 day deal could be more problematic

STOMP

 

I've been waiting for someone to ask about the law here, but nobody has taken the bait! Here goes.

First of all, it is a much contested legal concept. A fiduciary duty is a kind of unwritten rule, and some courts, and many legal scholars, don't like to give a wide berth to unwritten rules. Nevertheless, there is a pretty strong tradition upholding fiduciary duties in joint ventures, in some circumstances.

The landmark case in this area is from the Cardoza court in NY in the 1920's. It has a juicy quote that is used a lot:

"Joint adventurers, like copartners, owe to one another, while the enterprise continues, the duty of the finest loyalty. Many forms of conduct permissible in a workaday world for those acting at arm's length, are forbidden to those bound by fiduciary ties. A trustee is held to something stricter than the morals of the market place. Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior."

Subsequent courts have determined that joint venturer's do have duties of various kinds to partners (one duty, for example, is to avoid conflicts of interest with partners). They use several criteria to determine the nature and extent of the duties. Perhaps the most important of these is determining the nature of the business relationship between the partners. If it is a relationship characterized by contracts and arms length transactions, then they are less likely to say that unwritten rules apply.

In this case, there is no way that a court would believe that fiduciary duties should bind teams, when dealing with players. For starters, they are in an inherently conflicting situation to begin with. They are not trustees of each other. They are competitors. That's why they have contracts to bind them (the owners' agreement). And they are perfectly able to specify the rules of engagement in these contracts. No court is going to say that competitors who begin in situations of conflicting interests should somehow be bound by unwritten rules. Won't happen. Any court will say that they should be bound only to the rules they have agreed among themselves to be bound by.

Secondly, the existence of a collective bargaining agreement makes this even tougher for the Blazers. A court would never, in principle, say that unwritten rules should bind teams. This would open the doors for teams to do all kinds of things which the unions would think might violate the CBA. No, as long as there is a union around, then the written rules are the rules of the game. Period.

Net-net, there is no rule written which says that a team can't sign a player to screww over another team, and so there is no rule that will be enforced by any court. No chance. Nada. None. The Blazers can be pissed all they want, and their lawyers can write whatever they want, but it is hardly credible.

 

My question in all this:

Point #1: The Blazers are the property of the NBA. They are owned by Paul Allen, but the team still belongs to the NBA, correct? Paul couldn't take the team and move them to another league, or another city, or another country without the approval of the league, correct?

Point #2: How can one part of a corporation sue another part of the same corporation? It's almost like that joke commercial last year, where Coke wanted to sue Coke Zero or whatever it was.

Point #3: Can't the NBA step in and simply say, "no you're not."

 

I have been really down on this move from a PR aspect...but this comment brings me back to the way I normally try to evaluate things I see from the team.

Essentially, they have A LOT more information available to them. Who know's if at some point during the season someone didn't email them a trade or move and implicitly threaten to sign Miles at some point...great point Niko...thanks for getting me off the ledge...

 

But there also isn't a rule that says the Blazers can't sign him and sit him...yet both of these situations seem to be in violation of the INTENT of the rule which is to objectively evaluate the severity and career "ending-ness" of an injury...

 

^I'm pretty sure they simply have info that some teams are considering signing Darius just to mess w/ Portland. And that was all the letter was talking about. You can't just send it to those specific teams though, you gotta send it to all of 'em.

 

this whole things makes it look like the Blazers are begging someone to take on Miles' contract. You think these team owners are going to take threats from other teams? I dont like this at all. I wasn't happy with the way Portland handled the Miles' situation to begin with and I'm certainly not happy this is now the major Blazer news the national media is talking about.

 

Good questions:

1) Not "owned" by the NBA. They are independent businesses bought from the NBA - the term that gets used is "franchise," but most are corporations or limited partnerships. The association of the teams and the NBA is governed by an extensive partnership agreement that the owners have with one another. So, no, Paul Allen owns the team.

2) Hee hee! But they can. It would be more like Coke and Pepsi buy a plant together to make syrup, and Coke sues Pepsi over something.

3) Interesting question. That is why they said "examining legal options." These things quickly turn into a mess. It's doubtful that the NBA could stop the suit (you'd have to see the owners' agreement), but there could be counter suits and fines, etc.. There also may be clauses in the agreement which require arbitration.

 

What I really do not understand and am baffled why NO MAJOR MEDIA outlet is acknowledging is that Miles was evaluated by an INDEPENDENT NBA doctor mutually agreed upon by the players union deeming Miles injury career ending. Why is it that we are liable and why should we pay for another doctors and league mistake if they felt he could not play? Secondly, we let Miles go with the assumption that his injuries were to severe to play, if he can play (which he was deemed not able to) then he should be the property of the Trailblazers (even though we do not want him). Seems like we are being screwed by the NBA, CBA, Miles and teams around the league. If he wants to play so damn badly why cant he be forced to sign an injury waiver, voiding his contract and he then has to go out and earn his money if he thinks he is so healthy to play.

 

But if they're franchises, wouldn't it be more like one McDonalds filing suit against another McDonalds? Couldn't corporate step in?

 

I also want to add that while I feel the same way about this whole Miles situation as the Blazers do, I think they went out with guns blazing and handled the situation rather poorly. I think they could of been more discrete and their real beef should be with the NBA (since their independent doctor agreed with our prognosis). Why should we be penalized for their (the NBA's) findings? Doesn't seem right to me and why is no one mentioning that in the paper, on tv, ect....

 

That makes a lot of sense to me. With the system in force at the time, he was made a free agent. However, it's turned out to be a pretty weak system. The NBA should probably go back and look at this one, so their owners don't fight over things like this. Nothing to do about this though. The Blazers screwed themselves over by sending around baseless threats. Now, they are best served if somebody picks Miles up and everyone moves on.

I'm out. Good luck fellas.

 

Sure, well, one McDonalds franchisee could sue another McDonald's franchisee. (One company owned McDonalds couldn't sue another company owned, but, again, the NBA does not own its teams.)

Could corporate step in if two franchisees had a dispute? Probably not, depending on the nature of the suit. If it had nothing to do with corporate, it would be two independent businesses suing each other. None of corporate's business.

Anyway, the NBA is not like corporate. The NBA is not a separate entity, like a McDonalds. The league level is a device created by the ownership agreement that the owners use to pursue their common interests. The owners apparently give a lot of power to the league, but unless there is something in the agreement that says that David Stern gets to be judge and jury for these types of things, then it's between the two owners.

Over and out.