Does the National Basketball Association (“NBA”) have the power to force the owner of Los Angeles Clippers (Donald Sterling) to sell his team after he made some racist remarks in a private conversation that was leaked to the public? [Story]
Right to Privacy?
Sterling first asserts that under Cal Pen Code § 632 that the audio tapes were illegally recorded because he did not consent – California requires all parties to consent to a recording (whereas, one-party consent is enough in states like Georgia: O.C.G.A. § 16-11-66). Sterling contends the NBA’s usage of the audio tape recording should not “be admissible in any judicial, administrative, legislative, or other proceeding” as that would be a violation of his rights under the California Constitution.
However, in the NBA Constitution and By-laws there is a provision in Article 14, Procedure for Termination that states “strict rules of evidence shall not apply, and all relevant and material evidence submitted prior to and at the hearing may be received and considered”. On its face, this purports to allow the NBA Board of Governors to consider the audio tape in their proceedings as they are a private association and not a court of law. Further, there is question of whether California vs. New York law applies as Article 18(e) in the Constitution and By-Laws declares that New York laws apply.
Contractual rights?
The NBA in its “Summary of Sterling Termination Charge” avowed four legal grounds for terminating Sterling’s ownership:
- Article 13(d) Fail or refuse to fulfill its contractual obligations to the Association, its Members, Players, or any other third party in such a way as to affect the Association or its Members adversely.
- Violation of the Duty of Loyalty Under New York law, all member teams of the NBA owe each other a duty of loyalty to support the League in the attainment of its proper purposes.
- Article 13(a) Willfully violate any of the provisions of the Constitution and By-Laws, resolutions, or agreements of the Association.
- Article 13(c) Fail to pay any dues or other indebtedness owing to the Association within thirty (30) days after Written Notice from the Commissioner of default in such payment.
Sterling argues that he did not violate any of these provisions and as a result the NBA has no basis to terminate his ownership. None of this may matter, the has league canceled their vote to forcibly remove Sterling because Sterling’s wife has reportedly negotiated the sale of the team for $2 billion.
Additional Resources:
Summary of Sterling Termination Charge
Donald Sterling Answer to Charge
The Blackacre Times 