Pechman deals Schultz's lawsuit two crucial setbacks

8/20/2008 - NBA Oklahoma City

SEATTLE -- Two more strikes against Howard Schultz in his long-shot attempt to void his sale of the former SuperSonics and undo their move to Oklahoma City.

U.S. District Judge Marsha Pechman ruled Wednesday that the NBA can intervene in Schultz's lawsuit. She also denied Schultz's motion to split the trial into two separate phases: a liability phase and, if needed, a remedy phase. The trial has been scheduled for June 15.

The lawsuit filed in April by Schultz, the Starbucks Corp. CEO, contends Clay Bennett failed to carry through on a promise to negotiate in good faith for a new arena in Seattle for one full year after he purchased the Sonics. Schultz hopes to undo that sale -- so he can initiate a transfer of the team to a buyer who will keep it in Seattle.

Schultz contends Bennett deceived him.

Bennett has called the lawsuit "baseless" and his lawyers have argued that it's "too late to unscramble the eggs," noting that the NBA team is already "firmly embedded in Oklahoma City."

A spokesman for Bennett in Oklahoma City did not immediately return a message late Wednesday night.

In her ruling, Pechman said, "This action must be resolved quickly. It involves time-sensitive issues with potential ramifications for multiple third parties."

The judge also sided with the league's assertion it was inherently involved in the sale of the team from Schultz to Bennett for $350 million in July 2006, because, as the NBA's counsel wrote in its earlier motion to intervene, "the process for approving new owners is critically important to the success and long-term stability of the NBA."

The league argued, and Pechman agreed, that the league is thus inherently involved in the lawsuit.

The league asserts that the transfer of the team from Schultz to Bennett was approved by NBA owners and Schultz's attempt to void that agreement and approval undermines the stable operation of the franchise.