A Washington state judge has rejected a lawsuit aimed at undoing a deal to build a new professional basketball and hockey arena in Seattle - a key part of plans to bring the NBA back to town.

King County Superior Court Judge Douglass North held that the agreement between the city of Seattle, King County and an investment group led by hedge fund manager Chris Hansen does not violate state environmental law.

The International Longshore and Warehouse Union is concerned that adding a third stadium to the area south of downtown would choke freight traffic and cost jobs. The union sued, saying an environmental review should have preceded any agreement.

The judge disagreed, saying the agreement technically set out a framework for a future deal, but didn't commit the city or King County to building an arena south of downtown.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

SEATTLE (AP) - A Washington state judge expressed skepticism Friday at arguments aimed at undoing a deal to build a new professional basketball and hockey arena in Seattle - a key part of plans to bring the NBA back to town.

King County Superior Court Judge Douglass North was expected to issue a ruling later in the day on whether an agreement on the arena between the city of Seattle, King County and an investment group led by hedge fund manager Chris Hansen violates state environmental law.

The International Longshore and Warehouse Union is concerned that adding a third stadium to the area south of downtown would choke freight traffic and cost jobs. The union sued, saying an environmental review should have preceded any agreement.

The "memorandum of understanding" signed last year setting out the parameters of a deal to build the $490 million arena created irreversible momentum toward construction, and therefore the environmental study was required, union lawyer David Mann said in asking the judge to invalidate the agreement.

"This case is not about whether the Sonics should or are returning to Seattle," Mann said. "What the case is about is whether the city council, the mayor, the county council and executive went too far."

The NBA's Supersonics played in Seattle from 1979 to 2008 before its new owners moved the team to Oklahoma City and renamed it the Thunder.

Hansen's group, which includes Microsoft Chief Executive Steve Ballmer, has reached a deal to buy the Sacramento Kings from the Maloof family and move the team to Seattle, but it still needs approval from the NBA. Sacramento Mayor Kevin Johnson has been trying to put together a rival investment group to keep the team.

The judge expressed skepticism about the union's arguments, noting - as lawyers for Hansen, Seattle and King County did - that the agreement does not actually commit the city and county to building an arena south of downtown, and that an environmental review will be done before any such commitment is made. State law requires environmental reviews "before an agency commits to a particular course of action."

"How does it bind them into going forward with a SoDo arena?" North asked.

"There is no authority for the city to approve an alternative location," Mann responded.

Another lawyer for the union, Peter Goldman, described the promise of a future environmental review as a "sham," saying that by the time a review is completed, the Sonics could be back in Seattle, playing at KeyArena in anticipation of a new arena being built. No city government is going to reject the building of the arena in SoDo at that point, he argued.

An assistant Seattle city attorney said the city has authority under state law to pick other arena sites if necessary.