Should the Houston Rockets fight the Nene ruling in court?

Houston Rockets Nene (Photo by Andrew D. Bernstein/NBAE via Getty Images)
Houston Rockets Nene (Photo by Andrew D. Bernstein/NBAE via Getty Images) /

Should the Houston Rockets challenge the NBA’s ruling on veteran center Nene’s contract? History tells us the decision could be reversed in court if the Rockets take it that far.

In case you haven’t heard, the NBA has decided to void the contract the Houston Rockets agreed to with center Nene. This was arguably a questionable ruling, as it’s not on the grounds of any actual rules being broken by the Rockets.

It’s not the first time the league has decided to void a contract, as there have been many other instances in which this has occurred.

But in the past, the case hasn’t always closed after the league has made similar rulings. We’ve seen several instances in which the team in question challenged the NBA in court through the actual justice system, seeking an arbitrator. Interestingly enough, the justice system deemed the league to be wrong on numerous occasions.

One instance of such court involvement was during the 1993 and 1994 seasons, in which the league took exception to the “opt-out clause” that was started in 1993 by center Chris Dudley. Dudley’s contracts with the Portland Trail Blazers in 1993 and 1994 were voided, and Portland challenged the league’s ruling, requesting for the case to be heard by an arbitrator. Dudley and the Trail Blazers secured a legal victory in both 1993 and 1994.

A couple more similar instances also happened in 1994. After the NBA voided Toni Kukoc‘s contract that had a similar player option, the Chicago Bulls also challenged the ruling in court and won as well. In 1994, the Phoenix Suns also challenged the league’s ruling on forward AC Green’s contract and struck a legal victory over the league in court.

Related Story. 4 other times the NBA voided deals

These four team-favored court decisions have actually established enough of a precedent for the Rockets to take the league to court over this decision. It’s an interesting idea, as there are not many times we’ve had this happen more recently, but then again we’ve also not had the league void many contracts recently either. It would seem like if the Rockets went this route, they would have a legitimate gripe because again, there weren’t any rules in place to prevent the team from agreeing to such a deal with Nene at the time the deal was agreed upon.

In addition, the ramifications of this ruling are vital for Daryl Morey and the Rockets, as it cripples them by putting them over the luxury tax, as pointed out by capologist Albert Nahmad:

Rockets are currently $1.3M over the tax line to 15 players (treating Nene at $2.6M, rather than the full $10.0M), and have another $2.0M in exposure due to Clint Capela’s unlikely bonuses. Capela didn’t earn any of his bonuses last season.

— Albert Nahmad (@AlbertNahmad) September 20, 2019

The Rockets surely wouldn’t have signed Nene if they knew the league would void the trade value of his contract, forcing them to pay the luxury tax due to how the contract was structured. Based on what we’ve heard all summer, the Rockets were willing to pay the luxury tax only for the right player. There’s no way they envisioned Nene as that player, and because the league ruled to keep in the performance incentives, the Rockets would face a hefty bill if they played him in more than nine games this season due to a particular incentive in the deal. The incentive specifies that Nene will earn an additional $2.435 million if he plays in 10 games and the team wins 52+ games, as pointed out by Bobby Marks of ESPN.

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In addition, the whole purpose of signing Nene was to be able to improve the roster by adding a piece in a trade centered around Nene, which will certainly not happen now.

In order to fight the league’s ruling, the Rockets would have to file a motion in United States District Court and would surely need Nene to back them up in court, which he definitely would. If such a motion was filed, Nene’s support would prove to be pivotal.

In 1996, Miami Heat president Pat Riley wasn’t able to challenge the league’s ruling on the Heat’s contract with Juwan Howard in 1996, which the league also voided. Back then, Howard had already gotten his payday with the Washington Bullets and was no longer willing to help Riley and the Heat challenge the league.

The question of whether the Rockets should challenge the league over the Nene contract could very well be wishful thinking, but if they decide to take it that far, they’d have a legitimate gripe. We also know owner Tilman Fertitta isn’t necessarily one to just roll over either, so I would be surprised if this isn’t the last we hear of this.

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Given that there is some precedent to fighting such league rulings, it’ll be interesting to see what happens.