A legal dispute between Dallas Mavericks owner Mark Cuban and Ross Perot Jr. took a bizarre turn last month when Center Operating Co. LLC (COC), an entity controlled in part by Cuban, sued Perot and his Hillwood Development Co. LLC, claiming breach of contract and fraud.
Specifically, the complaint alleges that Hillwood improperly permitted a parking garage near the American Airlines Center, which COC manages, to compete with event parking at the arena. The plaintiff also alleged that Hillwood competed with COC for sponsorship and advertising revenue. COC claimed that a non-compete agreement between the parties was supposed to prevent Hillwood from such activity.
Cuban and Perot, who is the son of billionaire and two-time presidential candidate H. Ross Perot Sr., are also battling on another front. Last year, Perot’s Hillwood Investment Properties III Ltd., which reportedly owns a 5 percent stake of the Mavericks, sued Cuban’s management company, Radical Mavericks Management, claiming it breached its fiduciary duties by mishandling the team’s finances.
Shortly after the Mavs won their first NBA championship, the defendants moved for summary judgment. The document, which contained a large photo of Cuban and the Mavs celebrating their upset victory over the Miami Heat, included the following passage: “Under Hillwood’s ownership, the team was deemed the ‘worst franchise’ in all of professional sports. Under Cuban’s stewardship the Mavericks have become one of the league’s most successful teams and are now NBA champions. Accordingly, there can be no genuine question that Hillwood’s claims of mismanagement lack merit and Hillwood’s claims should be disposed of on summary judgment.”
Cuban’s company is represented by Tom Melsheimer, a principal in the Dallas office of Fish & Richardson. Perot and his companies in the parking lot dispute are represented by George Bramblett Jr., a partner with Haynes and Boone. Meanwhile, where Perot is the plaintiff, he is represented by Mark Davenport, a partner in Dallas’ Figari & Davenport.
Melsheimer told Deadspin that the decision to leverage the Mavericks success in the NBA Finals was an obvious one. “You don’t have that many cases when you’re watching television and a game ends, and you think, ‘Wow, this is really great for my lawsuit.’ It’s a humorous twist, but it has legal force. It makes a serious point that allegations of mismanagement are ridiculous. A substantial part of our defense is that the Mavericks are successful, and what more obvious success for an NBA team than an NBA championship?”
Melsheimer was also asked whether Cuban had put winning ahead of operating a profitable business.
“Fundamentally in sports the most valuable franchises are the ones that win,” said Melsheimer. “You build brand loyalty, you build your fan base, and you build a tradition. Winning is the key to doing that. It’s a long-term thing, if Mr. Perot doesn’t see that, he’s clearly not a basketball guy.”
In a more recent development, Cuban’s attorneys sought to consolidate the two cases. Melsheimer said the cases “are related in a general way even if they are not the same case.”
