Sunday, June 22, 2008
Out in Seattle Judge Marsha Pechman (W.D. Wash) has been conducting a trial over whether the Seattle Sonics must abide their lease with of the city's KeyArena for the next two years or whether they can move immediately to their new home of Oklahoma City. Interesting stuff, whether the city can require specific performance of the lease; I think the case for specific performance is strong here. It looks like there isn't a material breach of the lease by the city, only by the team, so the question is one of remedies.
Which will it be, then, damages or specific performance? Now, courts are obviously (and for good reason) reluctant to give affirmative injunctions. I wouldn't be holding my breath for an affirmative injunction requiring the team to play in the KeyArena. But I think here that a negative injunction--you can't play anywhere else when you're scheduled to play home games--may be appropriate. Why would a negative injunction be superior to damages?
The question is whether harm is irreparable (with apologies to Doug Laycock!)--and irreparable injury is determined by whether we can measure the damage in dollars. I don't think we can--or at least we can't with the specificity that we usually demand. The damages to the city are going to be somewhat are to compute--how much lost revenue will there be (not just from the stadium lease, but from the Sonics overall)? There's been a lot of talk in the trial of how difficult (or not) it will be to gauge the lost revenue--and no surprise here the Sonics' owners say it'll be easy and the city says it'll be hard. The difficulty of computing damages is one of the key factors in determining whether you're entitled to an injunction and I think all the city needs to do here is make the case for computing damages look murky.
Of course, we also balance the equities in determining injunctive relief--do we think that the harm to the city of not granting the relief is substantially outweighed by the harm to the Sonics of granting relief? On this there's some important evidence. The city's interest is substantial--their beloved team is leaving; many people whose livelihood depends on the team are going to be hurt; the ripples will go out for a long way. What about the harm to the team? They claim they're going to lose $60 million over the next two years--that's a substantial harm, of course. But remember two things--first, that's their allegation. Second, that's balanced against the harm to the city.
For me (fan of aloha jurisprudence and other populist strains in property law) perhaps the most exciting piece of this equity puzzle is the public interest--which we typically consider in cases where there are interests at stake beyond the parties to the litigation. This is a great example of one of those cases and I think it points in favor of a negative injunction. The community's interest here (and remember this is an equitable question of whether we're going to allow a company to breach a contract and only pay money damages) is in favor of keeping the team for the fans, as well as the people in the city who need the work the home games generate. Anyway, we'll all know soon enough!
Jim Brunner of the Seattle Times has a great article in this morning's paper on the case. You can also follow the trial on Jim's blog.