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Tag:David Boies
Posted on: November 25, 2011 11:51 am
Edited on: November 25, 2011 7:11 pm
 

Looking for a deal on Black Friday

NEW YORK -- Negotiators for the NBA owners and players were meeting Black Friday for litigation settlement talks in the hopes of laying the groundwork for a collective bargaining agreement to save the 2011-12 season.

The starting point in the negotiations essentially is where the bargaining talks left off Nov. 10, when the players were left with an ultimatum from the league to accept the framework of a 50-50 revenue split or face a far worse offer. Instead of sending the proposal to the union membership for a vote, the National Basketball Players Association dissolved Nov. 14 and launched multiple antitrust lawsuits against the league's owners.

UPDATE: With those dynamics in mind, the talks take the form of a legal settlement as opposed to a collective bargaining resolution -- with many of the same participants still involved but some new faces, too. The players' lead attorney in the antitrust action, David Boies, has teamed with former NBPA lead outside counsel Jim Quinn in an effort to push the deal across the finish line. But neither Boies nor Quinn was present at Friday's negotiations. Kessler, stripped of his role as lead negotiator for the players, also was not present.

Representing the players Friday were former union officials Billy Hunter and Derek Fisher; executive committee member Maurice Evans; general counsel Ron Klempner; economist Kevin Murphy; and one of Quinn's law partners. For the league, it was commissioner David Stern; deputy commissioner Adam Silver; Spurs owner Peter Holt, the chairman of the labor relations committee; general counsel Rick Buchanan; and deputy general counsel Dan Rube.

So the so-called litigation settlement talks had very much the same dynamics as the bargaining talks that broke off Nov. 10, leading to the players' decision to dissolve the union and launch antitrust lawsuits against the owners on Nov. 14. This, with one exception: there were strong indications that Quinn, one of the key figures in ending he 1998-99 lockout, had laid important groundwork during secret discussions he brokered earlier in the week. Stern and other league officials were seen Tuesday at the same location where Friday's talks were taking place. 

Multiple people connected to the talks have told CBSSports.com that the discussions could move quickly towards a deal after the momentum gained in the past week from back-channel talks spearheaded by Quinn. But one person in frequent contact with ownership cautioned that it may take the entire weekend to find common ground, adding that there "could be some anxiety" in the room Friday.

On the 148th day of the lockout, but the first since the labor impasse was transformed into a court battle, there seemed to be little effort to hide the appearance that the faces and issues hadn't changed. A key difference was the absence of Kessler, though the tempestuous attorney was still "very much involved" behind the scenes, according to a source.

The players are hopeful that the owners will be willing to offer substantial movement on a handful of system-related issues around which the talks crumbled two weeks ago, resulting in the unprecedented disclaimer of the NBPA and threatening that the season would be swallowed up by lengthy, costly and unpredictable antitrust litigation. To account for some of those concessions, which would result in a more flexible and opportunistic free-agent market than the owners last proposed, it is possible that the split of revenues could inch upward above 50 percent for the players -- with the remaining difference accounted for by an escrow system capped at 10 percent as teams and players adjust to a reset of player salaries and more restrictive system than the one that existed under the CBA that expired July 1.

The most difficult issues to resolve will be the availability of the mid-level exception for luxury tax-paying teams; sign-and-trade transactions for tax payers; and the definition of a tax payer. Coming out of the collapsed bargaining talks, these were the items that bothered the players the most in terms of restricting player movement -- especially the notion that a team would be considered a tax payer prior to use of an exception that pushed it over the tax line, as opposed to afterward.

But while league negotiators were not expected to fully move toward the players on all the outstanding system issues, there has been "positive movement" from the owners in recent days "to get a deal done," according to the person in contact with ownership. The biggest factor in the potential for a deal by the end of the weekend is not the players' lawsuits, but something much more predictable and relentless: the calendar.

Both sides understand that a season tipoff on Christmas, which would deliver a 66-game regular season with the NBA Finals pushed back only one week, would require an agreement by Monday at the latest. Even that would be pushing it; the league will need about 30 days to finalize the deal and hold an abbreviated free-agent period, training camps and preseason games.

As necessitated by the union's disclaimer, any legal settlement wouldn't be able to take the form of a CBA until the union reformed and was recognized by the owners.
Posted on: November 15, 2011 8:24 pm
Edited on: November 15, 2011 11:45 pm
 

Players sue NBA for antitrust violations

NEW YORK -- NBA players sued the league alleging antitrust violations Tuesday, in part using commissioner David Stern's own words against him in making their case that the lockout is illegal.

With two antitrust actions -- one in California naming superstars Carmelo Anthony and Kevin Durant among five plaintiffs, and another in Minnesota naming four plaintiffs -- the players are seeking summary judgment and treble damages totaling three times the players' lost wages due to what lead attorney David Boies referred to as an illegal group boycott.

"There's one reason and one reason only that the season is in jeopardy," Boies told reporters at the Harlem headquarters of the former players' union, which was dissolved Monday and reformed as a trade association to pave the way for the lawsuits. "And that is because the owners have locked out the players and have maintained that lockout for several months. ... The players are willing to start playing tomorrow if (the owners) end the boycott."

The California case, filed Tuesday night in the Northern District, named plaintiffs who represent a wide array of players: Anthony, Durant and Chauncey Billups (high-paid stars); Leon Powe (a mid-level veteran); and Kawhi Leonard (a rookie). The plaintiffs in a similar case filed in Minnesota are Caron Butler, Ben Gordon, Anthony Tolliver and Derrick Williams.

Boies said there could be other lawsuits, and at some point, they could be combined.

It is possible, Boies said, that the players could get a summary judgment before the NBA cancels the entire season -- essentially a two-month timeframe. By that point, with the clock starting on potential damages Tuesday -- which was supposed to have been the first pay day of the season for the majority of players -- treble damages could amount to $2.4 billion.

"We would hope that it's not necessary to go to trial and get huge damages to bring them to a point where they are prepared to abide by the law," Boies said.

A statement released by the league office Tuesday night, spokesman Tim Frank said: "We haven't seen Mr. Boies' complaint yet, but it's a shame that the players have chosen to litigate instead of negotiate. They warned us from the early days of these negotiations that they would sue us if we didn't satisfy them at the bargaining table, and they appear to have followed through on their threats."

Earlier, Boies seemed to have anticipated this response, noting that the NBA's lawsuit in the Southern District of New York -- in which the league sought a declaratory judgment pre-emptively shooting down an eventual dissolution of the union -- came first.

"The litigation was started by the owners," Boies said. "... This case was started months ago when the NBA brought it there."

The crux of the players' argument is that, absent a union relationship to shield them from antitrust law, the 30 NBA owners are engaging in a group boycott that eliminates a market and competition for players' services and are in breach of contract and violation of antitrust law. The players are seeking to be compensated for three times their lost wages as permitted by law, plus legal fees and any other relieft the court deems necessary and appropriate.

One of the many issues to be resolved is where the lawsuits ultimately will be heard. The NBA almost certainly will file a motion seeking that the players' complaints be moved to the Southern District, which is in the more employer-friendly 2nd U.S. Circuit Court of Appeals. The Northern District in California is in the more employee-friendly 9th Circuit, while the Minnesota case was filed in the district residing in the 8th Circuit, where the NFL players ultimately fell short in their quest for a permanent injunction lifting the lockout.

The NBA players are not seeking a permanent injunction; rather, Boies said they are pursuing the more expeditious and fact-based summary judgment, which could save months of legal wrangling.

UPDATE: Boies asserted that the plaintiffs have the right to choose which appropriate court has jurisdiction over their lawsuit, and that the NBA's lawsuit in New York was premature -- since the NBA players had never before in their history of union representation since the 1950s disclaimed interest or decertified until Monday. In contrast to the NBA's argument that dissolution of the union and an antitrust action were the players' goals all along, the lawsuit laid out that the players participated in bargaining with the league for more than four years after they were first allegedly threatened with massive rollbacks of salaries and competition for their services. Boies said the players had continued to bargain for months while locked out, offering a series of economic concessions totaling hundreds of millions of dollars until they finally reached the owners' desired 50-50 split in the final days of negotiations.

Unlike the NFL Players' Association's failed disclaimer of interest and antitrust action, in which the players' case was harmed by the lack of certainty over whether the collective bargaining process had ended, Boies said there was no disputing that bargaining talks had concluded in the NBA -- and that Stern himself had ended them by presenting a series of ultimatums and "take-it-or-leave-it" offers that the players could not accept.

"They had an opportunity to start playing with enormous concessions from the players," Boies said. "That wasn’t enough for them. If the fans want basketball, there’s only one group of people that they can get it from, OK? And that’s the owners, because the players are prepared to play right now."

The NBA undoubtedly will argue that it was the players who ended bargaining when their union disclaimed, and that the disclaimer is a sham, or a negotiating tactic as opposed to a legitimate dissolution.

The lawsuits came one day after the players rejected the league's latest ultimatum to accept their bargaining proposal or be forced to negotiate from a far worse one. The National Basketball Players Association at that point disclaimed interest in representing the players any longer in collective bargaining with the league after failing to reach an agreement during the 4 1-2 month lockout that was imposed by owners July 1.

In the California case, Boies, his partner, Jonathan Schiller, and players' attorney Jeffrey Kessler laid out a meticulous case that the collective bargaining process had been ended by the owners and that the players had no choice but to dissolve the union and pursue their case via antitrust law. They laid out a series of concessions the players made in an effort to reach a deal, including a "massive reduction in compensation" and "severe system changes that would destroy competition for players."

The lawsuit quoted Stern's own demands when he issued two ultimatums to the union during the final week of talks, threatening the players both times to accept the offer (with a 50-50 revenue split and various restrictions on trades and player salaries) or be furnished a worse offer in which the players' salaries would have been derived from 47 percent of revenues in a system that included a hard team salary cap and rollbacks of existing contracts -- all deal points the two sides had long since negotiated past and abandoned.

Asked if Stern made a mistake issuing the ultimatums that ended the talks, Boies said, "If you're in a poker game and you bluff, and the bluff works, you're a hero. Somebody calls your bluff, you lose. I think the owners overplayed their hand."

In the California lawsuit, the players' attorneys alleged that the owners' bargaining strategy was hatched during a meeting between league and union negotiators in June 2007. In that meeting, the lawsuit alleged, "Stern demanded that the players agree to a reduction in the players' BRI percentage from 57 percent to 50 percent," plus a more restrictive cap system. Stern and deputy commissioner Adam Silver told Hunter, according to the lawsuit, that if the players did not accept their terms, the NBA was "prepared to lock out the players for two years to get everything." Stern and Silver assured Hunter in the meeting that "the deal would get worse after the lockout," the lawsuit alleged.

The threats of getting a worse deal after the lockout if the players didn't accept the owners' terms were repeated in a letter to the union dated April 25, 2011, according to the lawsuit -- which then laid out the contentious, sometimes bizarre, and almost indisputably one-sided negotiation that transpired over the next few months.

"I will give the devil their due," Boies said. "They did a terrific job of taking a very hard line and pushing the players to make concession after concession after concession. Greed is not only a terrible thing, it's a dangerous thing. By overplaying their hand, by pushing the players beyond any line of reason, I think they caused this."

Boies said it was in neither side's best interests for the action to proceed to trial, which could take years and multiply the threat of damages against NBA owners. Even in their current capacity as members of a trade association, the players could have a settlement negotiated on their behalf among the attorneys for both sides. The settlement could then take the form of a collective bargaining agreement, but only after the majority of players agreed to reform the union and the owners agreed to recognize it.

Another option would be for a federal judge to require both sides to participate in mediation under the auspices of a federal magistrate; attendance would be required, though the results wouldn't be binding.

"There's lots of ways to get started, but it takes two to tango," said Boies, who once sued Microsoft in an antitrust case and represented Al Gore in his failed 2000 presidential bid based on a disputed vote count in Florida.

"If you've got somebody on the other side who is saying, 'It's my way or the highway, it's take it or leave it, this is our last and final offer and you will not see negotiation,' you can't resolve this," Boies said. "That, I will predict, that will stop, OK? There will come a time when the league faces the reality of the exposure that they face under the antitrust laws, the exposure that they face because of fan dissatisfaction with their unilateral lockout, the exposure they face by having other people in the business of professional basketball. And they will believe it is in their best interests to resolve this case.

"I can't tell you when that will happen," Boies said. "But I will tell you that it will happen, because those forces are too strong for anybody to resist indefinitely."





Posted on: November 14, 2011 2:56 pm
Edited on: November 14, 2011 8:54 pm
 

NBA players blow up union, take fight to court

NEW YORK -- Unable to reach a collective bargaining agreement with the NBA, the union representing the players dissolved Monday and paved the way for a potentially lengthy and ugly antitrust lawsuit to be filed within days.

With a unanimous show-of-hands vote from as many as 50 players, the union sent a disclaimer of interest letter to commissioner David Stern, which effectively ended the National Basketball Players Association's role as the collective bargaining agent for the players. Outside counsel Jeffrey Kessler and star attorney David Boies -- whom the players met for the first time Monday -- will lead the legal team that will sue the NBA alleging antitrust violations.

"We've negotiated in good faith for over two years," said Billy Hunter, who now becomes executive director of the National Basketball Players Trade Association -- no longer the leader of the players' union. "The players just felt that they've given enough."

Stern, speaking live on league broadcast partner ESPN, called the players' tactic "a charade" and characterized it as a "magical trick" that ultimately will fail.

"What they've done is destroyed incredible value that would've gone to the union membership," Stern said. "... We were very close, and they decided to blow it up."

Stern made no pronouncements about further cancellation of games, but added, "The calendar takes care of that." Although the disclaimer action initiated by union executive director Billy Hunter is more expeditious than a decertification vote initiated by the players, the legal fight that will ensue certainly imperils the 2011-12 season.

"Obviously, Mr. Kessler got his way," Stern said, "and we're about to go into the nuclear winter of the NBA."

During a meeting attended by the players' executive committee, player reps from all 30 teams and about 20 more players -- including superstar Kobe Bryant, Tyson Chandler, Carlos Boozer, Rajon Rondo and Elton Brand -- union officials presented and explained details of the league's most recent offer. It had been characterized as the final revised proposal the league intended to offer, and if the players didn't accept it, Stern's negotiating position would revert to a harsher offer -- including player salaries being derived from a 47 percent share of revenues, a hard team salary cap and rollbacks of existing contracts.

The deal on the table for the players Monday included a 50-50 split of revenues -- a 12 percent reduction from their previous share of 57 percent -- and a long list of system and spending restrictions. Hunter said the meeting gained momentum and changed in tone once players raised the option of decertification. They ultimately chose the more expeditious option of a disclaimer, with Hunter saying a summary judgment in the antitrust case could possibly be reached in 60 days -- about the length of time it would've taken the National Labor Relations Board to authorize an election through a player-initiated decertification. 

About 200 players already had signed decertification petitions, displeased with the league's negotiating tactics and the concessions made by the union. Among these were 15 players in the meeting Monday, Hunter said.

The former union executive director said he has no intentions of withdrawing the NBPA's unfair-labor practices charge with the NLRB, although it is not clear how the agency will view it now that the union has been dissolved.

While the route the union chose is quicker than decertification, it is no silver bullet for the NBA players to win what are known as "treble damages" -- three times lost earnings resulting from the lockout -- or to eventually get a better deal. For starters, there will be a significant legal fight over where the union is allowed to file its antitrust case. Presumably, the players would prefer to file it in an employee-friendly district in California, under the auspices of the 9th U.S. Circuit Court of Appeals. For this reason, the NBA in August filed a pre-emptive lawsuit in the Southern District of New York, which falls in the employer-friendly 2nd Circuit. 

Once that is resolved, the league will argue that the players' disclaimer is a "sham" -- in other words, a tactic designed to gain negotiating leverage rather than a serious union dissolution. The NFL Players Association tried the same tactic, and started much earlier in the process -- principally because it had no other choice due to a litigated deadline to decertify or disclaim or lose the option going forward.

The NFLPA never got an ultimate ruling on whether the lockout or disclaimer were legal, but instead got a narrow ruling from the 8th U.S. Circuit Court of Appeals that the federal district court did not have the authority to lift the lockout.

"I felt the combination of Boies and Kessler, from my perspective, would be an unbeatable team," Hunter said. "... We feel extremely confident that we can prevail in this matter. That’s the opinion of both lawyers."

In a statement released by the league office after his live TV interview, Stern said, "The 2011-12 season is now in jeopardy," and immediately began laying the groundwork for what could be the mother of all antitrust lawsuits. Stern alluded to a February 2010 bargaining session in which union attorney Kessler threatened that the players would "abandon the collective bargaining process and start an antitrust lawsuit against our teams if they did not get a bargaining resolution that was acceptable to them."

"The NBA has negotiated in good faith throughout the collective bargaining process but -- because our revised bargaining proposal was not to its liking -- the union has decided to make good on Mr. Kessler's threat."
 
 
 
 
The views expressed in this blog are solely those of the author and do not reflect the views of CBS Sports or CBSSports.com