Donald Sterling has been in the news non-stop for the last few weeks and it seems that won’t be changing anytime soon. A hearing scheduled for Tuesday June 3rd will bring together the National Basketball Association (“NBA”) Board of Governors for a vote to determine if Sterling will retain his control of the Los Angeles Clippers. Sterling’s answer to the NBA’s charges demonstrates his unwillingness to leave without a fight. As Sterling prepares to face the other NBA owners in the shoot-out of a lifetime, will his legal arguments help him retain ownership?
Illegal recording and privacy
It is likely that the recording of Sterling’s scandalous conversation with V. Stiviano is unlawful under California law (the state where the recording occurred). California is a two-person consent state – in other words, in order for a recording to be lawful and admissible in court, both parties must consent. The private conversation in question took place at Stiviano’s home while Sterling was unaware that he was being recorded. Because he did not consent, under California law the recording appears to be, on its face, unlawful.
Sterling also argues that the NBA’s Constitution cannot evade legal protections, such as the constitutional right to privacy. Sterling contends that the recording cannot be used at all since it was a private conversation that he never intended to be made public. Further, he asserts that since the NBA’s general counsel admitted the entire proceeding is “based solely on [the] recording,” the hearing can’t possibly move forward.
While Sterling seems to make valid points, there are some fundamental flaws with his arguments. First, the NBA is a private institution, with its own internal Constitution and By-Laws which govern its owners. The NBA Constitution is explicit in that it is not subject to strict rules of evidence. If this hearing were taking place in a court of law, instead of a private forum, the argument of recording inadmissibility may hold more muster. Sterling should be aware of these guidelines since he has previously assented to the governance structure through the many agreements he has supposedly signed with the league.
Second, it is likely that California law wouldn’t even apply here. The NBA Constitution itself references New York law, which allows for admission of recordings where only one party consents. In this case, even though the recording was made in the privacy of Stiviano’s home without Sterling’s knowledge, it would likely be admissible in a New York court.
Additionally, Sterling seems to be attempting to appeal to those who will decide his fate. Calling the conversation a ‘lovers’ quarrel’ and seemingly warning other owners that:
“the NBA ownership should be put on notice that any of their private comments and conversations—including their most intimate—will now be considered a position or action…and if some of those comments happen to leak, it may be grounds for their termination as owners.”
Was there any material harm?
Sterling maintains that there was no material, adverse harm to the NBA as a result of his shocking comments, harm that must be present in order to terminate ownership. Instead, he contends, that any harm was merely speculative. He acknowledges that players did threaten to boycott, but no boycott actually took place. While initially sponsors withdrew their support, many allegedly reinstated their sponsorship after the issuance of the $2.5 million fine and lifetime suspension imposed against Sterling.
The lack of a boycott and the return of sponsors may be due to the initial punishment placed on Sterling, as well as the Commissioner’s call for further action. Adam Silver, the league’s commissioner, has been adamant from the outset that his goal is to completely remove the Sterling family from ownership. Although Sterling considers the initial punishment enough, the NBA may fear that players and sponsors will protest if it does not follow through with its current course of action.
New stories and reports concerning the Sterling controversy seem to be continuously surfacing. Donald Sterling was reportedly deemed ‘mentally incapacitated’ this week and a $2 billion sale of the Clippers to ex-Microsoft CEO Steve Ballmer has been initiated by Sterling’s wife. Sterling is now reportedly planning to file a $1 billion lawsuit against the NBA.
The NBA Board of Governors will need to give final approval before a sale could take place, which may mean a postponement of the June 3rd hearing. But, should the hearing progress as planned, the voting owners will have a lot to consider. Either way, it doesn’t appear to be a slam dunk for Sterling.
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