Do the Houston Rockets have a legal claim against the NBA?
First, there is the obvious non-legal answer. Just ask yourself, would you sue your employer while still under contract to work there for the next 10 years? It’s definitely bad for business.
Legally speaking, the Rockets likely have a claim.1 The NBA did the Rockets wrong, no doubt about it. However, under any legal theory, the Rockets have a troublesome legal hurdle – proving damages. And, as far as getting an injunction to reverse the trade, ask the City of Seattle about your chances of convincing a court to issue one of those orders. It’s just not happening. So, that just leaves money damages.
How do we measure the Rockets’ injury?
First, to get to the compensable damages, we must look at the wrong committed. What exactly did the NBA do wrong? They run the Hornets, so they had the strange authority to veto any trade. So, forget the argument that the Rockets lost the value of the killed trade. However, David Stern reneged on his publicly announced promise or representation that Dell Demps, the general manager of the Hornets had the authority to make a deal, autonomously. The Rockets took him seriously. Everyone took him seriously including Dell Demps. The Rockets justifiably relied upon this promise or representation to their detriment. So, what damages flow from this reliance?
It is pure speculation to contend that the Rockets lost out on other trades. The damage to the Rockets relationship with Kevin Martin, Luis Scola and Goran Dragic is probably also not compensable. Besides, if the NBA deposed them, they would probably state under oath that the killed trade did not affect their performance. And, to Scola’s credit, his numbers in the third game of back-to-back-to-back games this year will probably be near the top of the NBA in many categories. Dude is tough.
The Rockets’ strongest claim for damages is that they lost Chuck Hayes in free agency. The Chuckwagon had an offer on the table from the Kings and was waiting on the Rockets to match. The Rockets didn’t match because they were busy forming a trade with a man, Dell Demps, that had no power to make a trade.
As the plaintiff, the Rockets will have to prove up their damages. The law can place a dollar figure on some injuries that would seem impossible to quantify – a lost limb, a lost spouse or child, or a damaged reputation. Is measuring a lost Chuck Hayes any more difficult to quantify? No. However, because there was no personal injury or property damage, the law requires more certainty to show that a lost business opportunity caused some economic loss. The NBA could simply argue that the money not spent on Chuck Hayes can be spent on another player that is comparable, say Samuel Dalembert. The Rockets would then need to prove that Chuck Hayes is worth more than any comparable player available on the market. This is where this lawsuit would get really interesting. This could set the stage for a dramatic battle of the dorks, essentially putting advanced metrics on trial. But, this is all a dork fantasy.
So what if the Rockets ended up with a worse defense and several more losses this season with a lost Chuck Hayes? Did this cost them ticket sales? Maybe this somehow pushes them into the lottery and they land Andre Drummond? In the end, the Rockets will have to engage in speculation to prove their damages on a level that a court would likely not accept.
The NBA wronged the Rockets, but there is just no remedy under the law that is available. The Houston Rockets have no choice but to move on.
Shawn Grady is an associate with Sheehy, Ware & Pappas, P.C. in Houston, Texas.
- I haven’t read the new collective bargaining agreement (“CBA”), and know very little about federal labor law, so I have no clue about claims for collusion under the CBA. Also, I haven’t read the Rocket’s franchise agreement which could limit the NBA’s liability or damages available under certain claims in this circumstance. [↩]
