Sterling's lawyer has informed the NBA that Sterling will not be paying the $2.5 million fine levied against him last month by commissioner Adam Silver, sources confirmed to ESPN.com on Thursday night.
That fine was due this week, according to a source with knowledge of the situation.
In a letter sent on Sterling's behalf, antitrust litigator Max Blecher also threatened to sue the league if Sterling is not afforded due process.
According to a report on SI.com, the letter was sent Wednesday and asserts that "no punishment is warranted" for Sterling, who was banned for life and fined $2.5 million for racist remarks he made that were published by TMZ. The letter claims Sterling has not breached the NBA constitution and that his "due process rights" were violated by the league's four-day investigation.
"I'm a good member who made a mistake," Sterling told CNN earlier this week. "Am I entitled to one mistake, am I after 35 years? I mean, I love my league, I love my partners. Am I entitled to one mistake? It's a terrible mistake, and I'll never do it again."
Sterling's ability to remain owner of the Clippers rests in the hands of the NBA's other 29 owners, who are expected to vote on the matter. A 75 percent majority is needed to oust Sterling. In the interim, the league has made Dick Parsons the CEO of the franchise.
According to the NBA bylaws, Sterling's ownership also could be terminated if he does not pay the fine within 30 days of written notice from the commissioner that he is in default on the payment.
The NBA's constitution, which Sterling signed as controlling owner of the Clippers, gives its board of governors broad latitude in league decisions.
The key to the NBA's authority, attorneys say, is Article 13(d) of the league's constitution. That section says that, whether Sterling intended to or not, an owner cannot "fail or refuse to fulfill" contractual obligations to the NBA "in such a way to affect the Association or its members adversely."
Sterling's comments provoked threats of a player boycott, led sponsors to withdraw support and created a racially charged image problem in the midst of the NBA playoffs that even President Barack Obama remarked upon.
As long as the NBA meticulously follows its own constitution and rules regarding the Clippers sale, it will be difficult for Sterling to find a legal theory that would stand up in court, said Daniel Lazaroff, director of the Sports Law Institute at Loyola Law School in Los Angeles.
"This is not an antitrust issue. This is not a First Amendment issue," Lazaroff said. "It's a question limited to the interpretation of the NBA constitution and bylaws, and whether those terms are met."
If he is forced out, Sterling still stands to reap a huge financial windfall in a Clippers sale. He bought the team for $12.5 million in 1981, and Forbes magazine recently placed its 2014 value at $575 million, or No. 13 in the NBA. There would be a sizable capital gains tax bill in any sale.
The Clippers' postseason run ended Thursday night when they lost 104-98 to Kevin Durant and the Oklahoma City Thunder in Game 6 of the Western Conference semifinals.
Information from ESPN.com's Ramona Shelburne and Darren Rovell and The Associated Press was used in this report.