Trailblazers Issue Legal Warning to the Rest of the Association

As reported by SI and Yahoo!, the Trailblazers have sent an e-mail to the rest of league warning potential legal action if Darius Miles is signed with the intent of having Miles' contract to go back on Portland's books, causing the Blazers to cross the luxury tax threshold and tie up some of their salary cap space in the offseason. While this may seem to some to be grasping at straws to maintain cap space, I see this as a brilliant move by the Blazers.

The backstory of this saga is convoluted. Last year, Darius was given a medical retirement by an independent doctor who deemed that Miles would suffer permenant knee damage and would likely require knee replacement if he continued to play in the NBA. This caused Miles contract to be removed from Portland's books with the caveat that if Miles played in 10 games that Mile's contract would be Portland's responsibility once again. During the offseason, it was announced that Darius would need to serve a 10 game suspension for violating the leagues substance abuse policies before he could play. Despite all this he played in 6 pre-season games for the Celtics and was cut before the start of the season. Recently Miles signed a non-guaranteed contract with Memphis, served his suspension, played in 2 games before being released on the eve of the date when his contract would become guaranteed for the rest of the season. When Miles was cut it was thought that he still needed to play in 8 more games before his contract came back to bite the Blazers. But the day after being cut Yahoo! reported that despite what had been previously assumed, the 6 pre-season games counted and that Portland knew this all along and wanted to keep it all on the down-low. With Miles only 2 games away from messing up Portland's free agent chances (“Portland is screwed.” one Eastern Conference executive was quoted as saying) a team would only need to sign him to a 10-day contract at a veteran's minimum, play him twice for token minutes and Portland goes from being a "have" to a "have not".

Which brings us back to the Blazers e-mail. In the comments of one of the two posts about this on Blazers Edge (the 2nd was put up because the other one got too big to handle) the following legal analysis was given:

at one of my property lectures an intellectual property attorney introduced me to the concept of worst-case-scenario time travel. Imagine that someone has infringed upon your clients patent and you’ve not taken measures to protect him and you are in front of a jury. If you could go back in time, what would you have done differently so that you could tell it to the jury? Figure out what that is and do it now, beforehand.

The Blazers are setting up a "bad faith" argument. They are laying the foundation for a formal complaint. If this deters suitors for Miles, all the better. Also, since Miles was ruled unfit to play by an impartial doctor and he is still getting his money, it would be hard for him to push a case against PDX because the detriment to PDX would be unconscionable. He gets his 9mil, and Blazers are both penalized and unable to use his services when neither had reached any sort of buy-out agreement.

Darius will probably play, and PDX will probably appeal, and may use media articles to demonstrate that GM’s knew of the detriment to PDX and played Darius Miles in bad faith to hurt PDX’s capspace. That whole fiduciary duty thing holds quite a bit of weight, holds you to a higher standard of ethics. If it even smells like bad faith in a fiduciary relationship, it probably won’t go well for the "bad-faith-er" (not a legal term, but it’s more simple than "tortfeasor")

This will probably not be over for a while…

More legal analysis from BlazersEdge:

my fancy pants Ivy league lawyer fiancee says the Blazers are likely okay in all scenarios.

FIRST: the medical retirement rules were not made with this situation in mind. It was written to prevent teams from getting out of big bad deals and then re-signing the player, not for guys deemed by independent docs to be too injured to play anymore and then to make a come back. The Blazers would appeal the money going back on the cap and likely win.

SECOND: Paul Allen is lawyered up out the wazoo, as would be Larry “I ran Nike and know what I’m doing” Miller. This has been risk assessed and gone over a billion times by other fancy pants Ivy League lawyers. It would be much easier to prove a franchise hurt another franchise’ business by signing Miles with no intention to really play him in this VERY UNIQUE situation than it is the Blazers preventing Darius from getting another job, after being cut a few times by different teams after being medically retired and STILL not in good enough shape after over 2 years of rehab.

Darius hasn’t been able to keep a roster spot in the best situation in the league for him, the Grizzlies. They had the space, were bad, and took a chance on him. He wasn’t worth the marginal salary it would take to keep him (a vet minimum salary is also half paid for by the NBA, making it even cheaper). Darius has had plenty of chances to find a job and has been unsuccessful. The Blazers letter comes out after this, so it didn’t prevent him from getting work.

Darius could sue, but he won’t. He will lose, and doesn’t have nearly the resources PA does.

Ethical or not, it doesn’t matter. This frightens off anyone who might have the bright idea of signing Miles to muck with the Blazers, or to make a few extra hundred thousand from the luxury tax payment they’d get from Portland being in luxury tax land. Do you, struggling owner of the Grizzlies, want to battle with PA’s billions? Heck nah, phoo!

This is a strong arm tactic that makes sense from the Blazers perspective, and would be MUCH more unethical if it was sent out before Darius had plenty of chances to find a job.

Darius’ injury has robbed him of his athleticism, which was the only thing he had before. I rooted for Darius to make a team personally, as I hate promising careers being ended because of injury. He is obviously not ever going to be the same again, which should be expected after the YEARS of doctor examinations and tests by independent docs and the insurance companies.

The Blazers were obviously at least a little worried that another team would try to mess with us, so they made clear they wouldn’t sit back and let it happen easily. Darius doesn’t have the resources even if he had a case, and he doesn’t likely have a case as he hasn’t been able to get a job on his own before this.

I’m sure this won’t help, but the Blazers only don’t have a case if Miles actually sticks somewhere and plays. If anyone wanted him and he was capable of playing, HE WOULD BE PLAYING.

This is a wierd situation with no precedent. I don’t blame the Blazers for being aggressive, and you can probably assume our aggressiveness will pay off for us. The aggressive team gets the calls, after all.

I am only engaged to a smarty pants lawyer, and my pa is a lawyer, and one of my sisters. I am not an expert. But this isn’t as bad as all that. Like always with the Miles situation, we just gotta wait and see.

Rest assured the Blazers have, uh, pretty good legal advice. Billions of dollars still buys good advice these days.

This will be interesting to see how this plays out because the Blazers seem poised to be a major player in the league for years to come. With the extra cap space in this offseason, which will be the last offseason with cap space for quite some time, the Blazers would be one of the prime destinations for the 2009 free agent class. WIthout it who knows?