Raptors raise possibility of countersuit against Knicks ‘for defamatory public statements’

The Toronto Raptors pushed back Monday night against the New York Knicks in their dispute over accusations of stolen video files, saying that the Knicks wrongly want the case in federal court rather than NBA arbitration to embarrass the rival team.

In its latest court filing with the U.S. Southern District of New York, the Raptors’ parent company, Maple Leaf Sports & Entertainment, said the Knicks’ lawsuit filed in August was designed to maintain publicity for their allegations of the theft of proprietary team information. MLSE for the first time raised the possibility of a countersuit, and said that it was more appropriate for NBA commissioner Adam Silver to resolve the case.

“If the Knicks were genuinely concerned that there had been misuse of confidential and proprietary information, they would have accepted the Raptors’ invitation to cooperate with the Knicks in undertaking an immediate and thorough investigation of the Knicks’ allegations,” MLSE’s lawyers wrote. “And they would have sought immediate relief from the Commissioner — who could have ruled before the season even began — rather than mired themselves in lengthy judicial proceedings.”

The Knicks sued the Raptors, MLSE, Raptors head coach Darko Rajaković, assistant coach Noah Lewis and video coordinator Ikechukwu Azotam in August, alleging that Azotam took over 3,000 video files of what the team says is confidential information and that Rajaković directed Azotam to do it. It also claimed last month that its damages will exceed $10 million. MLSE has denied all allegations.

MLSE has asked the court to allow the NBA and Silver to decide their issues, saying that the NBA constitution governs both teams and mandates league arbitration. The Knicks have pushed judge Jessica G. L. Clarke to hear the case and keep it out of the league’s hands. The Knicks claimed in their November filing that the NBA’s arbitration clause is too broad and should be invalidated by the court, and that Silver is too biased and close to MLSE board chairman Larry Tanenbaum to fairly adjudicate their case.

“Hopefully the Court will make it clear that Toronto cannot escape the consequence of breaking the law by being a member of the NBA,” a MSG Sports spokesperson said.

MLSE loudly denied both of the Knicks’ assertions in their motion Monday. It said that the dispute between the two clubs is squarely in the issues covered by the NBA constitution because it involves the sport and the on-and-off court relationships between the two franchises. Because of that, MLSE argues, Silver should retain control of how to settle their disagreement.

“The Knicks’ aversion to his jurisdiction is simply because they know they will not like his determination,” MLSE wrote in its filing. “Although it is inevitable the Knicks’ claims will fail on the merits in any forum, this proceeding permits the Knicks to keep their allegations in the public media, causing harm to the Named Defendants.”

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While MLSE said that the Knicks’ claims of conspiracy are wrong, and that Azotam did not share any proprietary information, and can prove both, its lawyers opened up the possibility of legal consequences for the Knicks for the first time.

MLSE has maintained throughout its defense that the Knicks filed their suit as a publicity stunt and to cause harm for the coaches and franchise. Monday, it said those actions, including the Knicks’ allegations that they broke the law, opened the window for the defendants to “reserve the right to pursue counterclaims against the Knicks for the defamatory public statements they have made” after this initial dispute is over.

MLSE and the Raptors continued to strongly push back against the Knicks’ claim that their dispute has no relationship to the NBA’s constitution and should therefore be heard in federal court.

“While the Named Defendants need show only some nexus for this to be arbitrable even under the Knicks’ argument, this case is only about NBA competition,” MLSE lawyers wrote, adding, “It is about NBA basketball — the Knicks allege that their trade secrets are video footage of NBA games and scouting reports of NBA teams, that the Raptors tampered with their employee to get him to divulge confidential information, and that they will be disadvantaged on the basketball court by their rival’s access to this information. In the Knicks’ own words:  ‘[t]he Knicks’ trade secrets relate to their business as an NBA franchise.’”

The Knicks alleged that Azotam, a former Knicks video coordinator until this summer, took more than 3,000 video files he made on Synergy with him when he left for the Raptors, and that Rajaković recruited and directed him to be a mole in the Knicks organization. Synergy Sports is a database of in-game footage and stats used by NBA teams. The Raptors say they will prove that Azotam never shared any trade secrets with them, and that “Rajaković — with nearly 15 years’ experience as a head coach overseas and in the NBA’s G-League and another decade as an assistant coach in the NBA – never needed, wanted, or saw a single piece of Knicks’ proprietary information.”

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