The Sterling Saga

We have all had a few days to digest the entire Donald Sterling Affair.  Now that the emotions have calmed down a little bit, this is a good time to re-examine what exactly happened and whether, upon review, it all turned out as it should.  There is no doubt that Donald Sterling is a contemptible human being but is there more to this story?  Let’s take a look…

The Basic Facts

The story, as we all understood it was that Sterling was secretly recorded by a personal assistant telling her that she should not bring African Americans to Clipper games or publicly associate with them.  It’s not clear exactly why Sterling says this but it appears that he implies that they are bad for business.  Sterling’s comments resonated in particularly painful way because they bring out the ugly subtext of the NBA…the players are predominantly African American and the owners (and fans in the high priced seats) are predominantly white.

This discrepancy troubles many and there is an implicit agreement that most will not make waves on this issue, provided the parties treat each other with a modicum of respect.  Of course, the agreement is fragile and it only takes one jerk to make the whole thing crumble.  There are few people jerkier than Sterling.

Did Sterling get a bum rap?

Not really.  While there is no defense for making these types of remarks, there are some arguable mitigating factors that could be considered:

-The remarks were made in private.  Yes, Sterling is a total racist jerk but he presumably knows enough not to actually say such things in public.  The secret recording provides Sterling with a scintilla of sympathy but nothing more.  If Sterling had shown remorse and somehow argued that the statements were taken out of context or were made in a sarcastic manner to humor someone, there was some chance of turning around the tidal wave of outrage.  Sterling did little to no damage control and it isn’t clear why unless he wanted to stand by his spoken words.

-Everyone already knew Sterling was a racist.  This is not a real defense as much as to say that everyone knew and tolerated Sterling.  The fact that Sterling was already on record as being discriminatory in housing disputes, was never something the NBA or the players ever discussed.  The new statements merely cement the reputation.  One could argue that it was hypocritical of the NBA and the NBPA to tolerate Sterling until he specifically mentioned African Americans and the NBA.  In fact this stance was hypocritical.  But the counter is that the NBA tolerates a lot but that doesn’t mean you have to tolerate the behavior indefinitely.  Rather, the opposite seems true.  The NBA drew a line in the sand late but better late than never.

Sterling is old and lost his marbles.  Sterling is 82 and perhaps may not be all there.  If that is the case, it would mitigate the remarks but would demonstrate that he should not be running a franchise anyway.  Besides, unless declared mentally incompetent, Sterling is responsible for his statements.

-Sterling was railroaded by public sentiment.  Even if you accept everything noted above, there is an argument that Adam Silver’s punishment was not a “pure of heart” penalty and faced mutiny from the players unless Sterling was banished.  It is true that there was an element of public perception in play when Silver decided to exile Sterling but the appropriate penalty happened to do dovetail pretty nicely with what the players and public wanted.  Who cares if Silver had an ulterior motive of protecting the league if the result is correct?

Sterling, a litigation history

It is a foregone conclusion that Sterling will litigate his banishment.  The legal merits of this case seem dubious because the NBA constitution apparently gives Silver broad powers to punish owners for conduct.  Nevertheless, Sterling is 82, rich, an attorney, and has nothing better to do.  Throw in his own need for attention and Sterling will obviously be bringing some sort of action.  Past history, certainly supports this.  I thought this would be a good time to take a sample of Sterling’s other well-publicized litigation and see what if anything we can learn from them:

NBA v. SDC Basketball Club, Inc.:  When Sterling first bought the Clippers, they were in San Diego.  In May 1984, Sterling announced, unilaterally, that the club was moving to Los Angeles and the NBA formed an exploratory committee to examine the idea before giving approval.  Sterling claimed any delay would violate his antitrust rights and the NBA basically relented and allowed the Clippers to set up shop in Los Angeles the following season.

The NBA then sued the Clippers after the move, claiming that the move violated the NBA constitution, which provided that territorial rights could not be infringed without the infringed owner’s approval.  Sterling negotiated approval from Jerry Buss, the Lakers owner but the NBA claimed that the league, as a whole, also had to approve the move.  Interestingly, the applicable provision, Article 9, only specifically required approval of Buss.  After the suit, the NBA amended the article to require approval of the NBA as a whole.  Ultimately, the suit settled with Sterling paying a reported $6 million fine (reduced from the $100 million the NBA originally sought).

The lax NBA constitution of 1984 that allowed Sterling a leg to stand in his move, 30 years later, is much less forgiving.  One can only appreciate that Sterling’s actions back in 1984 probably set in works the mechanisms that have helped him get booted in 2014.

Coaches v. SterlingDespite the fact that coaching contracts are generally guaranteed (even if the coach is fired for losing) Sterling has refused to pay some coaches by claiming that they breached portions of the contract.  Generally, a claim of breach must be significant to avoid such payments but Sterling refused to pay coaches, Bob Weiss, Bill Fitch (claiming he failed to mitigate by not looking for other employment) and Mike Dunleavy on what apparently were dubious grounds.  Really, Sterling had the money and time to make the coaches fight for money that they should be paid.  The Fitch lawsuit also brought out this legendary deposition testimony (per the Houston Chronicle):

— Do you play a role in the final decision to sign a player, re-sign a player, draft a player, not sign a player, anything like that?

Sterling — No.

Q — You don’t play any role in that?

Sterling — No.

Q — Let’s say signing a player.

Sterling — The basketball people do that.

Q — OK. And the basketball people being?

Sterling — Well, there is a personnel director. There is the general manager. There’s — I don’t even know. There’s some other people in that department.

Q — OK. Do you have any input whatsoever in the decision making, or is it just, they just let you know what they’re doing.

Sterling — They let me know what they are doing … I really don’t have the experience.

Q — How about Bob Weiss? Have you ever known him to lie?

Sterling — I don’t know who he is.

(Weiss was Clippers coach before Fitch. He, too, was fired and, also reportedly was not paid the money owed him.)

Sterling v. Housing Rights Center: Sterling’s other litigation woes came in connection with his practices as a landlord. Sterling’s primary revenue over the past 50 years came from buying up a ton of residential real estate in Los Angeles (he was reported as owning at least 99 properties in 2003).  In the early 2000s, Sterling brought a property called 691 South Irolo Street.  When Sterling bought the building, however, he allegedly sought to discourage Hispanic and African American renters in favor of Koreans.

This caused suits by the Housing Rights Center and, later the federal government, against Sterling and his companies.  The allegations are quite disturbing.  Check these nuggets from Judge Dale Fischer’s opinions:

-When Sterling bought the building he told the manager that he wanted to try an “experiment” intended to harass existing to tenants to force them to move out.  Specifically, the previous management had been forgiving with slightly late rents but Sterling would refuse rent that was paid late and file small claims actions to collect small late fees and to use the rejected check as a basis to commence eviction proceedings against African American and Hispanic tenants.

-At a meeting, Sterling told the staff “he liked Korean tenants the best” and that “Hispanics just sit around all day watching television, smoking cigarettes and doing nothing else.”   When the building manager objected to this, Sterling stated that “many Koreans were waiting in the wings to take her job.”

-Sterling allegedly fired the doormen after buying the building and that the new security guards were Korean American and “would open the doors for Korean but not non-Korean tenants.”

-In February 2003, Sterling sent questionnaires to residents asking for garage door remotes.  The questionnaires asked about birth place and citizenship of the tenants.  In defending this practice, Sterling argued that “questions about national origin should be allowed because shortly after the terrorist attacks of September 11, 2011, an agent with the [FBI] told [Sterling’s] controller that Sterling should make every possible effort to learn whether any tenants in his buildings are foreign nationals.”  The court called this justification a “sham.”

-The tenants apparently also videotaped Rochelle Sterling, Sterling’s wife, posing as a health inspector in an attempt to harass tenants.  Specifically, “Rochelle Sterling would hold herself out as a government official, and that Rochelle Sterling required [the staff] to record tenants’ ethnicity during inspections.”

Ultimately, this housing action and the government action settled.  Terms are not available for the cases but the government’s action shows that Sterling’s companies agreed to pay over $1.3 million to aggrieved tenants.  The full facts of the Housing case are available at 274 F.Supp.2d 1129.

-Elgin Baylor v. ClippersSterling’s noted court victory is the jury verdict in his favor against former GM Elgin Baylor, who alleged that Sterling demoted and fired Baylor because of race and age discrimination.  The race claims were dismissed by the court before trial and the sole issue was age discrimination.  We couldn’t find a transcript/report of the trial but Sterling’s attorneys, Mannatt, Phelp & Phillips, issued press report on the trial.  They noted that Sterling argued that Baylor was GM for 22 years, was given pay increases (despite limited success), and was offered a consultant position rather being terminated.  One can only presume that Sterling’s first witness at trial on the issue of Baylor’s competency was Michael Olowokandi.

Cliff Paul v. Donald T. Sterling: It seems that a search of the federal court site shows that on May 1, 2014, some jerk filed a fake lawsuit against Sterling, claiming to be “Cliff Paul,” a janitor for the Clippers and a cousin of Chris Paul.  The filing then proceeds to make profane and racist statements for three pages.  No, you can’t blame Sterling for this idiot.

Where do go from here?

A review of the facts indicates that Sterling’s removal is totally appropriate.  He comes across as small minded jerk with little depth as a person.  But the litigation record raises all sorts of questions.  Was the NBA troubled by Sterling’s practice of routinely stiffing coaches with little to no basis in fact in order to force them to retain attorneys just to get paid? As troubling as the recorded statements are against Sterling, aren’t the housing allegations even worse?  It is one thing to be a casual racist on tape and quite another to harass tenants for that same reason.  I suppose the cumulative effect of years of idiocy caused Silver to hit Sterling harder than he might have if an owner with a previously unblemished record might but what did the NBA do back in 2003 when this was going on?

The idea that has recently been set forth is that Rochelle Sterling will retain ownership and Donald will be gone.  But does it sound like the crazy lady who poses as a health inspector to yell at tenants is suitable to be an owner?  Ultimately, what matters most is that Sterling is gone but there is much more to this story than people may have realized.

1 comment for “The Sterling Saga

Leave a Reply