Brotherson v. Professional Basketball Club, L.L.C.

• Decision Date: 23 February 2009
• Docket Number: Case No. C07-1787RAJ.
• Citation: 604 F.Supp.2d 1276
• Parties: Robert BROTHERSON, et al., Plaintiffs, v. The PROFESSIONAL BASKETBALL CLUB, L.L.C., Defendant.
• Court: U.S. District Court — Western District of Washington

604 F.Supp.2d 1276

Robert BROTHERSON, et al., Plaintiffs, v. The PROFESSIONAL BASKETBALL CLUB, L.L.C., Defendant.

Case No. C07-1787RAJ.

United States District Court, W.D. Washington, at Seattle.

February 23, 2009.

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Frederick W. Schoepflin, Lynn Lincoln Sarko, Mark Adam Griffin, Keller Rohrback, Michael David Myers, Myers & Company, Seattle, WA, for Plaintiffs.

Bradley S. Keller, Paul R. Taylor, Christina L. Haring, John Arthur Tondini, Steven C. Minson, Byrnes & Keller, Seattle, WA, for Defendant.

ORDER

RICHARD A. JONES, District Judge.

I. INTRODUCTION

There are nine motions pending. In three of them (Dkt. ## 80, 87, 122), Defendant The Professional Basketball Club ("PBC") seeks summary judgment on one or more of Plaintiffs' claims. In two (Dkt. ## 125, 126), Plaintiffs request partial summary judgment establishing PBC's liability. Plaintiffs also filed motions to certify a class and subclass (Dkt. ## 33, 41), and two motions (Dkt. ## 98, 106) to seal documents. Plaintiffs asked for oral argument on the class certification motions. No party requested oral argument on any other motion. In this order, the court rules only on the summary judgment motions and motions to seal, and reserves ruling on class certification pending further briefing.

II. BACKGROUND

PBC owns the NBA basketball team formerly known as the Seattle Supersonics (the "Sonics"), now known as the Oklahoma City Thunder. The Sonics played their home games in Seattle from 1967 through 2008, and at Seattle's Key Arena from 1995 to 2008. The Thunder, who first took the court in autumn 2008, play their home games in Oklahoma City's Ford Center.

PBC purchased the Sonics in July 2006. Given the well-publicized complaints of the previous ownership group, the manner in which the team was sold, and that PBC's principals are all Oklahomans, there was immediate concern, broadly reported in Seattle media, that PBC might not keep the team in Seattle. Tondini Decl. (Dkt. # 45), Exs. 1-7. Those concerns had not disappeared by the end of the 2007 season.¹ In mid-April 2007, in the wake of the death of a proposal in the Washington legislature to provide hundreds of millions of taxpayer dollars to finance a new arena for the Sonics, the Seattle Times reported that PBC Chairman Clayton Bennett would consider relocating the Sonics before the expiration of PBC's Key Arena lease in 2010. Griffin Decl. (Dkt. # 34), Ex. G. Mr. Bennett had not yet "completely given up hope" on keeping the team in Washington, but would "evaluate all of [PBC's] options," including breaking the Key Arena lease. Id. In the months that followed, more news articles cast doubt on whether the Sonics would remain in Seattle. Tondini Decl. (Dkt. # 45), Exs. 8-15. Nonetheless, the Sonics were set to play the 2008 season at Key Arena.

Concerned that uncertainty over the team's future would hurt ticket sales, PBC created and promoted the "Emerald Club," a set of benefits extending only to 2007 season ticket holders (excluding those with courtside seats) who renewed their tickets for the 2008 season. PBC described the Emerald Club in several publications, most notably in a brochure ("Brochure") mailed to 2007 season ticket holders. Tondini Decl. (Dkt. # 105), Ex. 2.

The Emerald Club Brochure plays a key role in the resolution of the parties' claims, and the court describes it in detail here. The Brochure describes itself at the outset as an "unprecedented offer" to "Sonics Season Ticket Holders." Id. at PBC_CA_10073. That unprecedented offer was described as an "unprecedented commitment" to provide "three-year cost certainty through the 2009-10 season." Id. at PBC_CA_10077. The same page provided additional details:

• Renew your season tickets and earn guaranteed cost certainty through 2009-10.

• By renewing your account with a 10% non-refundable deposit by Wednesday, April 25, 2007, your account will be established at 2006-2007 prices. Provided you maintain an active full-season account in good standing through the 2009-10 season, you will receive 2006-07 pricing. If you choose to change seat locations or upgrade your seat status you will pay the 2006-07 price for those seats.

• There will be a price increase for new season ticket accounts—but your membership in the exclusive Emerald Club will always differentiate your account status and provide you with price assurance.

Id. The next page gave instructions for renewing season tickets by phone, mail, or via the team's internet site. Id. at PBC_CA_100078. It also gave installment payment options. The Brochure noted that season ticket holders could "sell [their] tickets online via the Sonics Ticket Marketplace." Id. at PBC_CA_100080. The Brochure again touted "cost certainty through the 2009-10 season" as one of the "big savings" available to Emerald Club members. Id. at PBC_CA_100081. The rest of the Brochure described fringe benefits (including food and beverage promotions and exclusive season ticket holder events) and tips for "using your Sonics tickets effectively." Id. at PBC_CA_100082-86. It is not clear whether these additional benefits were available to all season ticket holders or only to Emerald Club members.

The Brochure also prominently acknowledged, in a full-page "message" from Mr. Bennett to 2007 season ticket holders, the "uncertainty of the Sonics' future beyond 2010." Id. at PBC_CA_100076. Mr. Bennett's message specifically mentioned uncertainty about whether PBC would reach an agreement with state and local government to finance a new arena. Id. It also acknowledged, if only implicitly, that PBC's lease for Key Arena was set to expire in 2010. Id. Nonetheless, Mr. Bennett boasted that PBC was "absolutely committed to keeping the Sonics in the region, and we continue to be optimistic that we will secure the support we need to do just that." Id. Nowhere in the Brochure did PBC suggest that the Sonics might play home games at a location other than Key Arena before the 2011 season. Mr. Bennett also touted the benefits of the Emerald Club:

At a time when we are asking you for your season ticket renewal, it is of paramount importance that we establish our commitment to you, our most passionate and supportive fan. Therefore, we are creating the Sonics Emerald Club, an exclusive membership for current Season Ticket Holders. Sonics Emerald Club member will earn long-term price assurances, enhanced amenities and priority activation related to the new arena.

Id.

The evidence shows that PBC deliberately declined to acknowledge the possibility of relocation before 2010 in the Emerald Club Brochure or any other communication sent to potential Emerald Club members. Bryan Byrnes, the Senior Vice President of sales and marketing for PBC in charge of 2008 season ticket sales, testified extensively that the Emerald Club campaign was intended to communicate that the Sonics would remain in Seattle through the 2010 season. When he pitched the Emerald Club to PBC executives, he noted that it provided an "opportunity to project long-term confidence of being in this [Seattle] market." Schoepflin Decl. (Dkt. # 99), Ex. B (Byrnes Depo. at 20). The Emerald Club offer communicated that the Sonics would continue to play in Seattle at least through 2010. Id. at 49 ("[O]ur correspondence to season ticket holders was that we would be continuing to play in Seattle and working toward a new arena in the Puget Sound Region."). Even after it became apparent that no financing arrangement for a new arena was forthcoming, and PBC might relocate the team before 2010, PBC declined to add a disclaimer to its Emerald Club offer. Id. at 93 ("[Ticket sellers] were not instructed to do that .... we didn't believe [as of December 2007] anything other than we were going to be in Seattle."); id. at 95 ("We always believed that we would be in Seattle. And so there's no reason for [a ticket seller] to designate [in communications with ticket holders] that [the team might leave], specifically, because she wouldn't know otherwise."). Whatever uncertainty surrounded the team, PBC marketed the Emerald Club to "move forward with business models and business practices to promote and sell the team in a go-forward basis in Seattle." Id. at 101. Even when Mr. Bennett learned that the NBA itself was concerned with PBC's "messaging relative to renewals," PBC made no change to the Emerald Club terms. Id. at 84 & Ex. 13 (Apr. 16, 2007 Bennett e-mail). Until the end of June 2008, Mr. Byrnes "stay[ed] engaged on Seattle," consistent with his understanding of his obligation to PBC. Id. at 105. His "directive" from PBC management was "to move forward as if we were in Seattle." Id. at 108. Mr. Byrnes summed it up aptly: "The uncertainty was a given .... Our perspective was to address that with a business model, go forward in Seattle." Id. at 130.

In contrast to its assurances in the Brochure, PBC took actions that culminated in the team leaving for Oklahoma in summer 2008. On September 21, 2007, PBC filed an arbitration claim against the City of Seattle to terminate its Key Arena lease. The City moved the dispute to court. The Sonics played what would be their final Key Arena home game on April 13, 2008. In July 2008, after the close of evidence in a June 2008 bench trial before the Honorable Marsha J. Pechman of this District, but before Judge Pechman's decision, the City and PBC settled their dispute. The City released PBC from the Key Arena lease. The Sonics moved to Oklahoma City shortly thereafter.

There are three Plaintiffs in this action, each of whom was a 2007 season ticket holder who renewed his or her tickets for the 2008 season and became a member of the Emerald Club. Almost 1400 Sonics 2007 season ticket holders made the same decision.² Plaintiff Robert Brotherson was a 2007 season ticket holder who renewed his tickets in early April 2007. Griffin Decl. (Dkt. # 34), Ex. H (Brotherson Depo. at 50, 64-66). In June...