In wake of Levenson scandal, Sterling answers NBA's counterclaims

As a former NBA team owner saddled with a lifetime ban, Donald Sterling would seem like a completely irrelevant figure to the NBA. Tonight he reminded us that

As a former NBA team owner saddled with a lifetime ban, Donald Sterling would seem like a completely irrelevant figure to the NBA. Tonight he reminded us that he is anything but irrelevant. 

Sterling’s legal strategy against the NBA is highlighted by separate state and federal lawsuits that seek billions of dollars in damages. In response to Sterling’s federal lawsuit, the NBA counter-sued him in August for breaching contractual obligations with the league. The NBA also asserted that Sterling inflicted substantial financial harm to the league through his infamous remarks to V. Stiviano and Anderson Cooper and through the costs necessary to investigate him. Tonight, Sterling answered the NBA’s counterclaims.

In filing an answer to the NBA’s counterclaims, the former Clippers owner reaffirmed a legal strategy that seeks to expose as duplicitous the league officials and owners who denounced him as a racist. SI.com has obtained a copy of Sterling’s answer.

Sterling’s legal arguments remain unchanged

Sterling’s answer is largely a “copy and paste” of his answer to the NBA’s charges filed against him. Most notably, Sterling continues to assert that the NBA violated his privacy rights under California constitutional law by using a privately-recorded conversation to oust him. Sterling contends that the recording was unlawful under the California penal code because he never consented to being recorded and a recording is only lawful in California when both parties consent. Sterling, moreover, argues that pursuant to California law, unlawful recordings are inadmissible evidence in proceedings that implicate the law, which Sterling interprets to include NBA disciplinary hearings.

The league, for its part, has categorically rejected Sterling’s interpretation of California law, stressing that the NBA was a third party to the recording and the relevant law only extends to participants in the recording. The league has also emphasized that Sterling contractually agreed to the NBA enjoying flexible rules of evidence in disciplinary hearings.

In addition, the NBA contends that Sterling’s punishment stems not from the recording per se, but from the considerable damage his remarks -- which were published by TMZ -- inflicted on the league. Recall, for instance, that NBA players threatened to boycott playoff games and that sponsors dropped the Clippers.

But, as Daniel Wallach, an appellate attorney at Becker & Poliakoff, points out, “the mere fact that the recording was disseminated by media outlets (rather than by V. Stiviano directly) does not automatically make the recording admissible in a court proceeding.” Wallach further explains that, “a violation of the California privacy law is committed the moment that a confidential communication is secretly recorded regardless of whether it is subsequently disclosed.”

Thus, he maintains that “if the original recording is inadmissible under California’s privacy law, so too is the rebroadcast of the original recording.” Since the NBA’s case relies in part on the admissibility of the recording, Wallach expects that this issue will be the next critical battleground in the federal case. While Sterling had earlier hinted at filing a motion to dismiss the NBA’s counterclaims on this basis, Wallach tells SI.com that “the issue of the ‘admissibility’ of the recording is more appropriately raised prior to trial.”

Sterling also answers the NBA’s claims with affirmative defenses, which are designed to negate his responsibility even if the NBA can otherwise prove its case. One of his affirmative defenses is that the statute of limitations expired on the NBA suing Sterling before the NBA sued him in August. Sterling’s logic on this issue is hard to grasp. The Sterling saga started when TMZ published his recording on April 25, 2014, and any relevant statute of limitations would last at least one year and most likely four years. Expect the NBA to successfully counter Sterling’s reasoning.

Levenson situation could impact Donald Sterling case against the NBA

Bruce Levenson strangely absent from Sterling’s answer

In his answer, Sterling lists the same past examples of NBA owner discipline that he has previously cited:

• An owner was suspended for nearly a year for signing a player to a secret contract which violated the salary cap rules. (Glenn Taylor of the Minnesota Timberwolves)
• An owner was fined $25,000 and suspended two games for being convicted of drunk driving. (Jerry Buss of the Los Angeles Lakers)
• An owner was fined $100,000 for confronting referees on a court after the game and using inappropriate language toward them. (Mark Cuban of the Dallas Mavericks)
• Multiple owners were fined undisclosed sums (reported at between $100,000 and $500,000) for making public comments on Twitter about the collective bargaining process during the 2011 NBA lockout. (Micky Arison of the Miami Heat).

In listing these examples, Sterling wants to portray the NBA as lightly disciplining other owners who engaged in arguably worse and in some cases criminal conduct, while issuing against him an unprecedented lifetime ban, $2.5 million fine (the maximum allowed under the NBA’s constitution) and commissioner recommendation that his ownership be terminated.

However, Sterling’s answer makes no mention of Atlanta Hawks’ owner Bruce Levenson’sracially-insensitive e-mail from 2012 that became public knowledge on Sunday. Levenson, who has apologized, has agreed to sell his equity in the Hawks. Sterling could have highlighted Levenson’s situation to suggest that there is now clear evidence that other owners have expressed the same views that led to Sterling’s forced ouster.

Crucial role of pretrial discovery

Given that Sterling’s wife of nearly 60 years, Shelly Sterling, has indemnified the NBA from litigation costs associated with her husband, Donald Sterling is in some ways “suing himself”: if he wins his lawsuits and the NBA is ordered to pay him billions of dollars, his wife would reimburse the NBA whatever it pays her husband. Donald Sterling would surely challenge the validity of the indemnity agreement before it takes effect, but assuming it stands, Sterling’s main motivation for suing the NBA -- and his wife and NBA commissioner Adam Silver -- would not be a financial one.  Rather, it would be to embarrass the NBA in pretrial discovery, where Sterling’s attorneys would be able to question NBA owners under oath about their allegedly racist acts and views. Sterling would only obtain pretrial discovery, however, if his lawsuits are not dismissed, and he’ll need to convince judges that there are legal remedies for his alleged grievances.

Michael McCann is a Massachusetts attorney and the founding director of the Sports and Entertainment Law Institute at the University of New Hampshire School of Law. He is also the distinguished visiting Hall of Fame Professor of Law at Mississippi College School of Law.