Inglewood mayor could be held personally liable in Clippers arena lawsuit, judge rules
Inglewood Mayor James T. Butts Jr. could be found personally liable for damages in a lawsuit alleging he tricked The Forum’s owners into giving up land now slated for a Los Angeles Clippers arena, a judge has ruled.
Los Angeles Superior Court Judge Robert Broadbelt last week denied a motion by Butts’ attorneys that argued he should be removed from the case because state law offers him immunity as a public employee.
Broadbelt, however, determined the allegation against Butts was sufficient to demonstrate a “conscious intent to deceive, vex, annoy or harm” The Forum, essentially nullifying the protections he would otherwise have as a decision-maker. The lawsuit claims Butts and the city committed fraud.
“Here, the allegations against Mayor Butts do not involve conduct which contributed to a policy decision, but instead, involve fraudulent representations made in attempting to carry out the policy decisions that had already been made,” the ruling states.
Mayor was ‘merely doing his job’
In a response Wednesday, Butts’ attorney, Skip Miller, said the ruling was wrong and “will be overturned on appeal.”
“The mayor was merely doing his job as mayor, negotiating and signing a contract; and for that, mayors are immune from suit under California statutory and case law,” Miller said.
In California, public employees acting within the scope of their employment are not liable for injuries caused by misrepresentations, even if intentional, unless they are found guilty of fraud, corruption or malice.
The Madison Square Garden Co., which owns The Forum, alleges Butts persuaded the company’s executives to give up their right to 15 acres of land by claiming a developer was ready to build a “technology park.” The company later learned Butts already was in talks with the Clippers to built an arena on the site that they say would compete directly with The Forum for concert business.
As part of the arrangement, MSG gave up the right to purchase the land for $6.9 million. The termination agreement states the site could not be used for anything that would hurt the Forum’s business, according to the lawsuit.
Butts ‘not above the law’
“Mayor Butts is not above the law, despite his claim to the contrary,” said Marvin Putnam, a partner at Latham & Watkins, the firm representing Madison Square Garden. “We are extremely pleased that the court denied his request to be dismissed from the MSG Forum lawsuit. We now look forward to the day when a jury gets to consider his outrageous, fraudulent conduct.”
It’s rare for public officials to lose their immunity, according to attorney Daniel Barer, an appellate specialist who represents public entities and employees. Barer is not involved in the Inglewood case.
“Immunity is the rule, and liability is the exception, when it comes to policy decisions,” Barer said. “The law does not want officials to shy away from making potentially controversial decisions, because they’re afraid someone will sue them and win.”
If a jury sides with Madison Square Garden Co., civil penalties could be rendered against Butts personally, but it’s unlikely he would have to pay out-of-pocket if damages are awarded.
Barer said public entities often indemnify employees in the case of personal liability. If malice is proven, the city would have no obligation to protect Butts.
However, Butts still wields considerable influence in Inglewood and the City Council, which has sided with him on every decision in the past two years, would have to vote against covering his costs.
Still, “nobody likes to have a judgment against them, even if somebody else is going to pay it,” Barer added.
Site adjacent new NFL stadium
Clippers owner Steve Ballmer is eyeing the site at Century Boulevard and Yukon Avenue — just across the street from the new NFL stadium rising on land formerly occupied by the Hollywood Park Racetrack — for a state-of-the-art arena that would seat 18,000 to 20,000. The city entered into an exclusive negotiating agreement with Balmer in June 2017.that gives the two parties three years to negotiate a lease.
The Clippers currently share Staples Center with the Los Angeles Lakers and Kings, but their lease expires in 2024. If they team moves to Inglewood, it would play in a new home less than 1 1/2 miles from The Forum, which MSG refurbished four years ago into one of the top concert venues in the state.