When I wrote my last post, the only statements we had from Donald Sterling regarding his recent scandal were those contained on the recording that got him in trouble in the first place. Since then, he spoke publicly for the first time in an interview with CNN’s Anderson Cooper and somehow managed to come off worse than he did in the secret recordings. And he’s made clear, as people close to him have feared, that he intends to fight the NBA tooth-and-nail if it tries to force him to sell the Clippers.
Assuming the case finds its way to the court system, I feel very confident predicting how it’s going to turn out. It starts with an idea that one of my professors, Douglas Baird, calls the “big boy rule.” Under the big boy rule, “big boys” like corporations and wealthy individuals are free to enter into pretty much any agreement they want. This is in contrast to people like consumers, first-time home buyers, and people who buy shares from the stock market who are provided some level of protection by our laws and the court system because they are “little boys” for purposes of those types of deals. In the case of Donald Sterling and the NBA, both are “big boys.”
Because they are big boys, they are free to reach their own agreements, with the agreement at issue here being the NBA Constitution and By-Laws. Under that agreement, a 3/4 vote of NBA owners is enough to kick an owner out of the league. Under that same agreement, the decision to do so is “final, binding and conclusive, as an award of in arbitration.” Assuming the vote to kick him out happens (and it will) and assuming that Donald Sterling takes it to the court system (and it sounds like that’s likely), he’s going to be facing the same challenge as any party who seeks to overturn an arbitration award in court. In technical legal terms, he’ll be up [blank] creek with a paddle–just ask any litigator who’s tried it.
The reason for this is that courts do not look at arbitration awards, consider the evidence that the arbitrators saw, and then decide whether the arbitrators we right. It isn’t a do-over. Instead, a court just looks at whether, again in technical legal terms, the award was totally nuts. If there is any basis whatsoever for the arbitration award, a court is going to uphold it. To bring it back to the Sterling case, there is certainly ample evidence supporting the NBA’s decision to kick him out of the league, so that decision is going to hold up in court. So, duetskateers, feel free to ignore the 24 hour news cycle as it debates this case over the next months (and maybe years) because you already know how its going to end.