Free Response in Opposition to Motion - District Court of California - California

Case 3:07-cv-02172-BEN-JMA

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WILSON PETTY KOSMO & TURNER LLP REGINA A. PETTY (106163) SOTERA L. ANDERSON (211025) 550 West C Street, Suite 1050 San Diego, California 92101 Telephone: (619) 236-9600 Facsimile: (619) 236-9669 E-mail: [email protected] E-mail: [email protected] Attorneys for Defendant SAN DIEGO CONVENTION CENTER CORPORATION, INC.

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

UNITED NATIONAL MAINTENANCE INC, A NEVADA CORPORATION, Plaintiff,

Case No. 07-CV-2172 BEN (JMA) DEFENDANT'S EVIDENTIARY OBJECTIONS TO EVIDENCE SUBMITTED BY PLAINTIFF IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION Complaint Filed: November 13, 2007 Date: Time: Dept.: Judge: Trial Date: January 7, 1008 10:30 a.m. 3 Hon. Roger T. Benitez Not Set

14 v. 15 16 17 Defendant. 18 19 20 21 22 23 24 25 26 27 28 SAN DIEGO CONVENTION CENTER CORPORATION, INC., A CALIFORNIA CORPORATION,

TO ALL PARTIES AND TO THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE Defendant SAN DIEGO CONVENTION CENTER CORPORATION, INC. (hereinafter "Defendant" or "SDCCC") hereby objects and moves to strike the following evidence submitted by Plaintiff in support of Plaintiff's Motion for Preliminary Injunction. Additionally, considering the potential devastating affect the Court's decision could have on the public's safety, SDCCC requests the Court rule on each objection before issuing an opinion in this matter. /// -1Case No. 07-CV-2172 BEN (JMA) DEFENDANT'S EVIDENTIARY OBJECTIONS TO EVIDENCE SUBMITTED BY PLAINTIFF IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

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A.

Evidentiary Objections to Exhibit A - Letter dated June 27, 2007, from Pat Dwyer to Brad Gessner

SDCCC objects to Plaintiff's Exhibit A, letter dated June 27, 2007, from Pay Dwyer to Brad Gessner on the following grounds: Relevance (Fed. R. Evid. 401 and 402); Hearsay (Fed. R. Evid. 801); Misstates Evidence; Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation; Best Evidence Rule (Fed. R. Evid. 1001 through 1008); and, Lacks Authentication (Fed. R. Evid. 901). B. Evidentiary Objections to Exhibit B - Letter dated June 22, 2007, from Mary Kay Sustek to Brad Gessner

SDCCC objects to Plaintiff's Exhibit B, letter dated June 22, 2007, from Mary Kay Sustek to Brad Gessner on the following grounds: Relevance (Fed. R. Evid. 401 and 402); Hearsay (Fed. R. Evid. 801); Misstates Evidence; Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation; Best Evidence Rule (Fed. R. Evid. 1001 through 1008); and, Lacks Authentication (Fed. R. Evid. 901). C. Evidentiary Objections to Exhibit C - Letter dated June 14, 2007, from Ty Bobit to Brad Gessner

SDCCC objects to Plaintiff's Exhibit C, letter dated June 14, 2007 from Ty Bobit to Brad Gessner on the following grounds: Relevance (Fed. R. Evid. 401 and 402); Hearsay (Fed. R. Evid. 801); Misstates Evidence; Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation; Legal Conclusion; Improper Lay Opinion (Fed. R. Evid. 701 and 704); Best Evidence Rule (Fed. R. Evid. 1001 through 1008); and, Lacks Authentication (Fed. R. Evid. 901). D. Evidentiary Objections to Exhibit D - Letter dated July 20, 2007, from Mary Beth Rebedeau to Brad Gessner

SDCCC objects to Plaintiff's Exhibit D, letter dated July 20, 2007 from Mary Beth Rebedeau to Brad Glessner on the following grounds: Relevance (Fed. R. Evid. 401 and 402); Hearsay (Fed. R. Evid. 801); Misstates Evidence; Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation; Legal Conclusion; Improper Lay Opinion (Fed. R. Evid. 701 and 704); Best -2Case No. 07-CV-2172 BEN (JMA) DEFENDANT'S EVIDENTIARY OBJECTIONS TO EVIDENCE SUBMITTED BY PLAINTIFF IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

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Evidence Rule (Fed. R. Evid. 1001 through 1008); Incomplete Document; and, Lacks Authentication (Fed. R. Evid. 901). E. Evidentiary Objections to Exhibit E - Letter dated July 26, 2007, from B.J. Enright to Brad Gessner

SDCCC objects to Plaintiff's Exhibit E, letter dated July 26, 2007 from B.J. Enright to Brad Gessner on the following grounds: Relevance (Fed. R. Evid. 401 and 402); Hearsay (Fed. R. Evid. 801); Misstates Evidence; Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation; Legal Conclusion; Improper Lay Opinion (Fed. R. Evid. 701 and 704); Best Evidence Rule (Fed. R. Evid. 1001 through 1008); and, Lacks Authentication (Fed. R. Evid. 901). F. Evidentiary Objections to Exhibit F - Convention Services Agreement dated August 8, 2001

SDCCC objects to Plaintiff's Exhibit F, Convention Services Agreement dated August 8, 2001 on the following grounds: Relevance (Fed. R. Evid. 401 and 402); Hearsay (Fed. R. Evid. 801); Misstates Evidence; Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Best Evidence Rule (Fed. R. Evid. 1001 through 1008); and, Lacks Authentication (Fed. R. Evid. 901). G. Evidentiary Objections to Exhibit G - Letter dated June 21, 2005, to Mark Epstein

SDCCC objects to Plaintiff's Exhibit G, letter dated June 21, 2005, to Mark Epstein on the following grounds: Relevance (Fed. R. Evid. 401 and 402); Hearsay (Fed. R. Evid. 801); Misstates Evidence; Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Best Evidence Rule (Fed. R. Evid. 1001 through 1008); and, Lacks Authentication (Fed. R. Evid. 901). H. Evidentiary Objections to Exhibit H - Letter dated September 21, 2007, from Aaron Bludworth to Brad Gessner

SDCCC objects to Plaintiff's Exhibit I, letter dated September 21, 2007, from Aaron Bludworth to Brad Gessner on the following grounds: Relevance (Fed. R. Evid. 401 and 402); Hearsay(Fed. R. Evid. 801); Misstates Evidence; Legal Conclusion; Improper Lay Opinion (Fed. R. Evid. 701 and 704); Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Best Evidence Rule (Fed. R. Evid. 1001 through 1008); and, Lacks Authentication (Fed. R. Evid. 901). -3Case No. 07-CV-2172 BEN (JMA) DEFENDANT'S EVIDENTIARY OBJECTIONS TO EVIDENCE SUBMITTED BY PLAINTIFF IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. ¶ 1.

I.

Evidentiary Objections to Exhibit I - Letter dated June 8, 2007, from Martin Cymal to Brad Gessner

SDCCC objects to Plaintiff's Exhibit I, letter dated June 8, 2007, from Martin Cymal to Brad Gessner on the following grounds: Relevance (Fed. R. Evid. 401 and 402); Hearsay(Fed. R. Evid. 801); Misstates Evidence; Legal Conclusion; Improper Lay Opinion (Fed. R. Evid. 701 and 704); Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Best Evidence Rule (Fed. R. Evid. 1001 through 1008); and, Lacks Authentication (Fed. R. Evid. 901). J. Evidentiary Objections to Exhibit 3 - Selected Portions of Hilton San Diego Convention Center Website

SDCCC objects to Plaintiff's Exhibit 3, selected portions of Hilton San Diego Convention Center Website dated 11/13/2007 from http://www1.hilton.com/en_US/hi/hotel/SANCCHH Hilton-San Diego-Convention-Cent... on the following grounds: Relevance (Fed. R. Evid. 401 and 402); Hearsay(Fed. R. Evid. 801); Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); and, Lacks Authentication (Fed. R. Evid. 901). K. Evidentiary Objections to Exhibit 4 - Declaration of Mark Epstein PLAINTIFF'S EVIDENCE I am the President of Champion Exposition Services, LLC ("Champion"), and I am authorized to make this declaration on Champion's behalf. All facts stated herein are true and are of my own personal knowledge. I have worked with Champion in excess of 20 years, and I am currently Champion's President. Champion is a general contractor for trade shows. As a general contractor, Champion signs contracts directly with trade associations to manage and organize their trade shows held at venues nationwide, including those held at the San Diego Convention Center ("Convention Facility"). Champion's contracts with trade associations generally run for three years or more. DEFENDANTS' OBJECTIONS Relevance (Fed. R. Evid. 401 and 402)

Relevance (Fed. R. Evid. 401 and 402)

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¶ 3.

PLAINTIFF'S EVIDENCE As a general contractor, Champion is responsible for hiring sub-contractors necessary for handling the logistical and service-oriented challenges needed to ensure the smooth operation of the trade show. These sub-contractors may include providers of the following services: cleaning, janitorial, maintenance and related services (defined hereinafter as "Trade Show Cleaning Services"), electrical, and installation and dismantling ("I&D"). The employees of the selected subcontractors enter the trade show venues to perform services for which they have contracted. This is the standard procedure nationwide. United National Maintenance, Inc. ("United") is engaged in the business of providing Trade Show Cleaning Services to trade shows. Champion is a consumer and a direct purchaser of Trade Show Cleaning Services and has contracted with United to provide these services at venues nationwide, including SDCC, for more than 10 years. Trade Show Cleaning Services is a unique product that is very important to Champion because we, as general contractors, need to make it available in order to meet our responsibilities for cleaning individual exhibit space and the common areas of a show.

DEFENDANTS' OBJECTIONS Relevance (Fed. R. Evid. 401 and 402); Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation

4.

Relevance (Fed. R. Evid. 401 and 402); Improper Lay Opinion (Fed. R. Evid. 701 and 704); Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602)

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¶ 5.

PLAINTIFF'S EVIDENCE Trade Show Cleaning Services are not traditional janitorial services and United is not a traditional janitorial services firm. While a janitorial firm hired to clean office space in a commercial building can expect each office to be the same size and in similar condition everyday, each trade show is unique in size, configurations and its cleaning needs. Based on the scope and size of a particular trade show, a provider of Trade Show Cleaning Services must constantly react to ever changing demands that involve the amount and location of manpower and equipment at any given moment. A provider of Trade Show Cleaning Services must ultimately have a tremendous amount of logistical expertise and must anticipate needs proactively based on the past experience of the Trade Show Cleaning Services management. No two trade shows are the same from the perspective of Trade Show Cleaning Services. Due to the expertise and specialized knowledge required, I would not consider even an extremely price competitive bid from a traditional janitorial services firm to provide Trade Show Cleaning Services. Such a firm simply cannot efficiently and effectively provide the required level of service. If these services could be provided by a traditional janitorial services firm, there would be many other competitors to United and SDCC and Champion would not sub-contract for these services but would rather provide them itself. For these reasons, Champion and the trade show industry recognize that these are specialized services that cannot be substituted for traditional janitorial services.

DEFENDANTS' OBJECTIONS Relevance (Fed. R. Evid. 401 and 402); Improper Lay Opinion (Fed. R. Evid. 701 and 704); Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation

6.

Relevance (Fed. R. Evid. 401 and 402); Improper Lay Opinion (Fed. R. Evid. 701 and 704); Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation

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¶ 7.

PLAINTIFF'S EVIDENCE Because of its weather, attractions and facility size, San Diego is a very desirable location for trade shows. The Convention Facility offers over 600,000 square feet of exhibit space. In fact, I believe the Convention Facility it is one of the top five trade show venues in the nation. There is no other comparable venue in or around San Diego capable of hosting large trade shows. The next largest venues in and around the San Diego area are hotels, and they are capable of handling anywhere from 5 to a maximum of 100 exhibit booths. By comparison, the SPIE Annual Meeting Optics & Photonics trade show held at the Convention Center (a relatively small show by Convention Center standards) involved 225 exhibit booths. Because San Diego is such a desirable market, a trade association usually must sign a contract with the SDCC at least five years in advance. In order to secure a preferred date, a trade show association may even have to contract with SDCC 10 to 15 years in advance. Due to the long-term nature of these contracts, when Champion contracted with SPIE to manage the Annual Meeting Optics & Photonics trade show held at the Convention Facility from August 28-30, 2007, neither Champion nor SPIE knew anything about SDCC's security policy, which was only announced in July of 2007. Historically, United and SDCC have aggressively competed for the business of Trade Show Cleaning Services in San Diego. Until recently, Champion has always had the absolute right to choose the company it wants to perform Trade Show Cleaning Services for trade shows held at the Convention Facility. As a result of its superior price and service, Champion chose United to be its Trade Show Cleaning services provider.

DEFENDANTS' OBJECTIONS No objection.

8.

Relevance (Fed. R. Evid. 401 and 402); Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation

9. 16 17 18 19 20 21 22 23 24 25 26 27 28 10.

Relevance (Fed. R. Evid. 401 and 402)

Relevance (Fed. R. Evid. 401 and 402); Misstates Evidence; Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation

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¶ 11.

PLAINTIFF'S EVIDENCE Not long ago, Brad Gessner, the general manager of the Convention Facility, called me directly in an attempt to solicit Champion's Trade Show Cleaning Services business. The phone call was unsolicited. I told Mr. Gessner that Champion was satisfied with the service and price it got from United, that it had a long-term written contract with United whereby United was to perform all Trade Show Cleaning Services and that Champion would honor its written contract with United. Upset with my response, the conversation became contentious and Mr. Gessner told me that "I'd be hearing from him again." A matter of months after I rejected SDCC's solicitation, SDCC notified Champion in a letter of its new security policy stating that, effective July 1, 2007, Champion would no longer have the right to select which company performed the Trade Show Cleaning Services for trade shows at the Convention Facility. Instead, SDCC notified Champion that only SDCC employees would be permitted to perform the Trade Show Cleaning Services for trade shows at the Convention Facility and SDCC proposed terms for providing these services that were substantially inferior to the terms of Champions contract with United. Security at the Convention Facility (and all convention facilities) is very important to me and Champion. Should anything happen at the Convention Facility it would reflect poorly on Champion and on the industry as a whole. I have a vested interest in the security of the Convention Facility.

DEFENDANTS' OBJECTIONS Relevance (Fed. R. Evid. 401 and 402); Hearsay (Fed. R. Evid. 801); Misstates Evidence; Prejudice (Fed. R. Evid. 403); Argumentative

12.

Relevance (Fed. R. Evid. 401 and 402); Hearsay (Fed. R. Evid. 801);Misstates Evidence; Improper Lay Opinion (Fed. R. Evid. 701 and 704)

14. 19 20 21 22 23 24 25 26 27 28

No objection.

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¶ 15.

PLAINTIFF'S EVIDENCE As a long-term participant in the trade show industry, SDCC's policy which singles out Trade Show Cleaning Service employees for security concerns makes no sense. Trade Show Cleaning Service employees constitute a very small percentage of the outside labor that is given access to the Convention Facility. It makes no sense that United's employees should be denied access to the Convention Facility when employees for providers of electrical contracting, I&D, floral contractors, photographers, modeling agencies or exhibitors are not subject to any security protocols or procedures. I don't see how replacing United employees with SDCC employees will do anything to improve security. United's employees are a low security risk because they have been working at the Facility for a long time. I am not aware of any security incidents caused by United's employees. By contrast, I&D employees are a huge security black hole. I&D companies tend to be numerous and small. There may be employees of a dozen or more I&D companies working in the Convention Facility at any given time. These employees of these companies go in and out of business with regularity. I do not believe this is truly a security policy. The security policy has only been applied to the services provided by United. United is coincidentally, our only subcontractor that directly competes with SDCC as a service provider at the Facility, and the policy shortly followed my contentious conversation with Mr. Gessner.

DEFENDANTS' OBJECTIONS Relevance (Fed. R. Evid. 401 and 402); Improper Lay Opinion (Fed. R. Evid. 701 and 704); Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation

16.

Relevance (Fed. R. Evid. 401 and 402); Legal Conclusion; Improper Lay Opinion (Fed. R. Evid. 701 and 704); Improper Expert Opinion (Fed. R. Evid. 702 through 704; Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation

17.

Relevance (Fed. R. Evid. 401 and 402); Legal Conclusion; Improper Lay Opinion (Fed. R. Evid. 701 and 704); Improper Expert Opinion (Fed. R. Evid. 702 through 704; Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation; Argumentative

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¶ 18.

PLAINTIFF'S EVIDENCE After protracted discussions, SDCC has allowed Champion to continue some semblance of our contractual relationship with United, requiring United to use SDCC employees to perform Trade Show Cleaning Services. This is clearly a losing situation for United. I am positive that when our contract with United expires, it will not be renewed by United. Ultimately, with no competition and SDCC as the lone provider of Trade Show Cleaning Services, Champion and other general contractors will be forced to pay more for these services. Ultimately, SDCC's security policy, as applied to Trade Show Cleaning Services, is very unlikely to cause a trade show to switch shows from San Diego. The shows are locked in years in advance by contract, and the trade association selects the show location not general contractors such as Champion. Since Champion directly contracts for Trade Show Cleaning Services and not the trade association, and because increased Trade Show Cleaning Services costs will be lost in the midst of other cost fluctuations from year to year, this policy unlikely to cause a location change. Champion will thus have to absorb the price increase itself or pass it on to the trade associations and/or exhibitors.

DEFENDANTS' OBJECTIONS Relevance (Fed. R. Evid. 401 and 402); Misstates Evidence; Legal Conclusion; Improper Lay Opinion (Fed. R. Evid. 701 and 704); Improper Expert Opinion (Fed. R. Evid. 702 through 704; Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation

19.

Relevance (Fed. R. Evid. 401 and 402); Improper Lay Opinion (Fed. R. Evid. 701 and 704); Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation

L. ¶ 1.

Evidentiary Objections to Exhibit 5 - Declaration of Thomas W. Robbins PLAINTIFF'S EVIDENCE DEFENDANTS' OBJECTIONS

1. I am the Vice President and General Relevance (Fed. R. Evid. 401 and 402) Manager- California Region for GES Exposition Services, Inc. ("GES"), and I am authorized to make this declaration in connection with UNITED NATIONAL MAINTENANCE, INC's ("UNITED NATIONAL") application for a temporary restraining order and order to show cause regarding a preliminary injunction. All facts stated herein are true of my own personal knowledge, and if called as a witness I could and would testify competently thereto. -10Case No. 07-CV-2172 BEN (JMA) DEFENDANT'S EVIDENTIARY OBJECTIONS TO EVIDENCE SUBMITTED BY PLAINTIFF IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

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¶ 2.

PLAINTIFF'S EVIDENCE I am responsible for the California operations GES including the San Diego operations. GES has a long established business relationship with UNITED NATIONAL, whereby UNITED NATIONAL performs the booth cleaning, janitorial, and related services ("Booth Cleaning Services") at trade shows held nationwide, including those trade shows held at the San Diego Convention Center (hereinafter referred to as "Convention Facility) for which GES is the general contractor and otherwise responsible for the Booth Cleaning Services.

DEFENDANTS' OBJECTIONS Relevance (Fed. R. Evid. 401 and 402)

3.

Relevance (Fed. R. Evid. 401 and 402)

4. 11 12 13 5. 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6.

GES has historically had the right to Relevance (Fed. R. Evid. 401 and 402); choose the company it wants to perform the Misstates Evidence Booth Cleaning Services for trade shows hold at the Convention Facility for which GES acts as the general contractor. Attached to this Declaration as Exhibit A is a true and correct copy of a letter, dated May 18, 2007, received by GES from San Diego Convention Center Corporation, Inc., (hereinafter referred to as "SDCC") (and such letter's attachment) concerning Booth Cleaning Services for trade shows at the Convention Facility. Relevance (Fed. R. Evid. 401 and 402); Hearsay (Fed. R. Evid. 801); Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Best Evidence Rule (Fed. R. Evid. 1001 through 1008); Document speaks for itself; Lacks Authentication (Fed. R. Evid. 901)

On or about November 2006, I attended a Relevance (Fed. R. Evid. 401 and 402); lunch with Brad Gessner, General Manager Hearsay (Fed. R. Evid. 801) of SDCC. Also present at the lunch was Larry Colby, a GES representative, and Robert D'Onofrio, an SDCC employee. During the lunch Mr. Gessner distributed written materials and told us that SDCC was soliciting GES' San Diego business for Booth Cleaning Services. During the first quarter of 2007, I responded to SDCC and told SDCC that GES would honor its written contract with UNITED NATIONAL for the Booth Cleaning Services to be performed at the Convention Facility, and that GES would not enter into contract for Booth Cleaning Services with SDCC at that time.

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¶ 7.

PLAINTIFF'S EVIDENCE UNITED NATIONAL has performed the Booth Cleaning Services for GES for trade shows at the Convention Facility in a good, proper, timely, efficient and workmanlike manner.

DEFENDANTS' OBJECTIONS Relevance (Fed. R. Evid. 401 and 402); Improper Lay Opinion (Fed. R. Evid. 701 and 704); Lacks Foundation

M. ¶ 1.

Evidentiary Objections to Exhibit 7 - Declaration of William Callaghan PLAINTIFF'S EVIDENCE DEFENDANTS' OBJECTIONS Relevance (Fed. R. Evid. 401 and 402)

I am the President of Century Security ("Century") and am responsible for the day to day management of over 400 security guards that provide security to trade shows and conventions nationwide, including Las Vegas and Orlando. All facts stated herein are true and are of my own personal knowledge. I was a member of the Chicago Police Department for 33 years, finishing my career as Commander of Intelligence and was primarily responsible for terrorism and related security issues. I have lead jointsecurity details with the FBI and Secret Service, overseeing security at events in Chicago such as the World Cup in 1994 and the Democratic Convention in 1996 and was the Commander of Intelligence for the FBI and Chicago Police Department's Joint Terrorism Task Force. On several occasions, I have received training at the FBI academy in Quantico, Virginia. I also have more than 20 years of experience with crowd control and event security at sporting events and trade shows. Throughout the 1980s and 1990s, I ran event security at Comiskey Park for the Chicago White Sox and at the Chicago Stadium and United Center for the Chicago Bulls and Blackhawks and supervised security for trade shows and conventions at McCormick Place.

2.

Relevance (Fed. R. Evid. 401 and 402)

3.

Relevance (Fed. R. Evid. 401 and 402)

After leaving the Chicago Police Relevance (Fed. R. Evid. 401 and 402) Department in 1998, I started working for Century. Century provides security to conventions and trade shows at various venues including the Orange County Convention Center in Orlando and the Las -12Case No. 07-CV-2172 BEN (JMA) Vegas Convention Center, two of the DEFENDANT'S EVIDENTIARY OBJECTIONS TO EVIDENCE SUBMITTED BY PLAINTIFF IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

4.

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¶

PLAINTIFF'S EVIDENCE largest convention centers in the United States. I am as familiar as anyone with the security vulnerabilities facing convention centers and the security methods used to limit these vulnerabilities. I am a recognized security expert in the trade show industry. Attached as Exhibit A is a copy of my resume. I have been informed that the San Diego Convention Center Corporation ("SDCC") has adopted a policy barring outside cleaning labor from the San Diego Convention Center ("SDCC Facility") and that it has given security concerns as the reason for the policy. In addition, I have reviewed the affidavit of Carol Wallace, Chief Executive and President of the SDCC, and read her security justification for barring cleaning labor from the SDCC Facility. The part that caught my interest was where Ms. Wallace states "Our assessment of areas of vulnerability indicated the use of outside cleaning crews should be eliminated. Consequently, the determination was made to adopt and implement a policy that required use of [SDCC] staff for all cleaning in the building. This policy. . . does require that the actual cleaning work be performed by persons who have gone through [SDCC's] employment process, which includes considerable vetting and background checks, and extensive training after being hired. This provides a substantially increased level of safety and security in the [SDCC Facility] than previously existed." (Wallace Decl. ¶ 7) As a trade show and crowd control security expert, I can say that the policy implemented by SDCC, which is limited to cleaning personnel, makes absolutely no sense. Employment by the SDCC does nothing to improve security. What ensures better security is following universal security protocols, meaning that if inside and outside employees are all subject to the same screening procedures, security risks will be minimized.

DEFENDANTS' OBJECTIONS

5.

Relevance (Fed. R. Evid. 401 and 402); Lacks Personal Knowledge (Fed. R. Evid. 602)

6. 22 23 24 25 26 27 28 7.

Relevance (Fed. R. Evid. 401 and 402); Legal Conclusion; Improper Expert Opinion (Fed. R. Evid. 702 through 704); Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation

In my experience, cleaning crews pose a Relevance (Fed. R. Evid. 401 and 402); low security risk compared to other Improper Expert Opinion (Fed. R. Evid. laborers. Cleaning contractors typically -13- 702 through 704); Case No. 07-CV-2172 BEN (JMA) Lacks Foundation; DEFENDANT'S EVIDENTIARY OBJECTIONS TO EVIDENCE SUBMITTED BY PLAINTIFF IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

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¶

PLAINTIFF'S EVIDENCE DEFENDANTS' OBJECTIONS have a greater degree of knowledge and Lacks Personal Knowledge (Fed. R. Evid. control over their staff than other providers 602); Calls for Speculation of labor. This is due to the fact that the majority of the workforce that services the various other trades for these shows are typically temporary employees that come off of call lists at union halls. From show to show or even day to day there is a high amount of turnover for the hundreds and sometimes thousands of employees that come off of these call lists for general labor, freight hauling, rigging and even electrical work. The show manager, general contractor and convention center have no idea who these people are let alone what their background is and whether or not they pose a security risk. Cleaning crews are much different because they are smaller and, day in and day out, are typically made up of and managed by the same groups of people. In my experience, cleaning employees present one of the lowest levels of security concerns walking the convention center floor. Cleaning is very small part of the total workforce needed to put on a trade show. In my experience, cleaning makes up less than 5% of this workforce. Only providing background checks and other security protocols on such a small percentage of the overall workforce makes no contribution to event security whatsoever. As a security professional, I recognize that a security protocol must be applied universally to everyone or it is useless. Relevance (Fed. R. Evid. 401 and 402); Improper Expert Opinion (Fed. R. Evid. 702 through 704); Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation

8.

While Ms. Wallace sees cleaning crews, Relevance (Fed. R. Evid. 401 and 402); such as those of United National Legal Conclusion; Improper Expert Maintenance, Inc. ("United"), as a security Opinion (Fed. R. Evid. 702 through 704); concern because "[SDCC] has no direct Lacks Foundation; Lacks Personal relationship, and consequently, minimal Knowledge (Fed. R. Evid. 602); Calls for knowledge or control over their activities Speculation or operations in [SDCC Facility]"; she appears to be completely comfortable giving all other employees, including those of her preferred vendors, complete access to the SDCC Facility. (Wallace Decl. ¶ 5.) Preferred vendor relationships are common throughout convention centers in the United States. This direct contractual relationship is purely economic and is not related to security oversight. I am not aware of any security related requirements -14Case No. 07-CV-2172 BEN (JMA) DEFENDANT'S EVIDENTIARY OBJECTIONS TO EVIDENCE SUBMITTED BY PLAINTIFF IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

9.

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PLAINTIFF'S EVIDENCE needed to obtain this preferred status that would enhance security at the SDCC Facility. What I don't see in her affidavit is a requirement to provide background checks on anyone else's employees, preferred or not. I believe this is because SDCC does not require that employees of other trades be given background checks as a requirement to enter the SDCC Facility. SDCC does claim that providing background checks to SDCC employees is a reason for barring outside cleaning crews from the SDCC Facility. It would be very easy to conduct background checks on the employees of outside cleaning crews. I have reviewed the application packet that United requires all of its employees to fill out as a condition of employment. United's application provides more than enough information to run the most comprehensive of background checks. There are lots of ways that you can more effectively minimize security risks that don't require locking out outside laborers. I understand that United offered to conduct background checks on its own employees and to match any other security protocols instituted by the SDCC. This would be more than satisfactory in my opinion.

DEFENDANTS' OBJECTIONS

10.

Relevance (Fed. R. Evid. 401 and 402); Legal Conclusion; Improper Expert Opinion (Fed. R. Evid. 702 through 704); Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation

11.

Relevance (Fed. R. Evid. 401 and 402); Legal Conclusion; Improper Expert Opinion (Fed. R. Evid. 702 through 704); Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation

I have also been made aware that even Relevance (Fed. R. Evid. 401 and 402); though SDCC lacks a badging program Legal Conclusion; Improper Expert requiring picture identification, United Opinion (Fed. R. Evid. 702 through 704); badges its employees anyway. United Lacks Foundation; Lacks Personal badges all of its employees working at the Knowledge (Fed. R. Evid. 602); Calls for SDCC Facility with computer generated Speculation photo identification, identifying them as an employee of United. This type of badging is an important tool used to minimize security risks. Badging of all workers is a prevalent security protocol that has been instituted at many convention centers, like Orlando's Orange County Convention Center and the Las Vegas Convention Center. Unlike these two facilities, there is no requirement at the SDCC Facility for the show manager or SDCC Facility itself to issue computer generated photo IDs to employees given access to the Facility. If the SDCC really wanted to address security, it would be simple to implement a -15Case No. 07-CV-2172 BEN (JMA) DEFENDANT'S EVIDENTIARY OBJECTIONS TO EVIDENCE SUBMITTED BY PLAINTIFF IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

12.

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PLAINTIFF'S EVIDENCE similar badging policy and apply it to all employees that are given access to the Facility. In my opinion, if United employees are badged and background checked, they would pose a very low security risk and would certainly not pose any more of a security risk than badged and background checked employees of the SDCC. The fact that United badges its employees, to me, makes them less of a security risk than the many other laborers allowed to wander the SDCC Facility. If all laborers given access to the SDCC Facility are required to have background checks and follow badging protocols, I would be comfortable knowing those employees were working a show where I was running security.

DEFENDANTS' OBJECTIONS

13.

Relevance (Fed. R. Evid. 401 and 402); Legal Conclusion; Improper Expert Opinion (Fed. R. Evid. 702 through 704); Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation

N.

Evidentiary Objections to Exhibit 7-A - CV of William M. Callaghan

SDCCC objects to Plaintiff's Exhibit 7-A, Commander William M. Callaghan (Ret.) Chicago Police Department C.V. on the following grounds: Relevance(Fed. R. Evid. 401 and 402) and not qualified to serve as an expert (Fed. R. Evid. 702 through 704). O. ¶ 1. Evidentiary Objections to Exhibit 8 - Declaration of Buddy Linn PLAINTIFF'S EVIDENCE I am a Regional Vice President of United National Maintenance, Inc. ("United") responsible for the Western United States, including San Diego. I am responsible for, among other things, hiring employees to perform cleaning, janitorial, maintenance and related services (defined hereinafter as "Trade Show Cleaning Services") at large trade shows and conventions at various venues, including the San Diego Convention Center (hereinafter as "SDCC Facility"). I have been performing these duties at the SDCC Facility since it opened in 1989. Everything in this affidavit is true and it comes from my own personal knowledge. DEFENDANTS' OBJECTIONS Relevance (Fed. R. Evid. 401 and 402)

I am intimately familiar with security Relevance (Fed. R. Evid. 401 and 402) procedures and the access of all outside service providers such as United at -16Case No. 07-CV-2172 BEN (JMA) DEFENDANT'S EVIDENTIARY OBJECTIONS TO EVIDENCE SUBMITTED BY PLAINTIFF IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

2.

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PLAINTIFF'S EVIDENCE facilities throughout the Western United States, including the convention centers in Las Vegas, Los Angeles and San Francisco. I have personally been present at the setup and dismantling of hundreds of shows at such facilities. The facts stated in this affidavit are based on my experiences and first hand knowledge. In July 2007, the San Diego Convention Center Corporation ("SDCC") implemented a policy that completely bars our employees from physically entering the SDCC Facility. The reason SDCC has given for this new policy is some unspecified security concerns. But because of my first hand knowledge of the type of contractors that work in the SDCC Facility and the type of access these persons have, this policy does nothing to improve security at the SDCC Facility. SDCC's policy is only applied to our employees and is not applied to employees of trade associations, show management, general contractors, or outside laborers including but not limited to freight haulers, electricians, decorators, installation and dismantlement contractors, florists and stage hands. I have first hand knowledge that there can easily be thousands of these outside laborers given access to the SDCC Facility for a full-hall show over the course of several days. While this policy is only applied to our employees and none of these other outside contractors, a United cleaning crew would make up less than 5% of that workforce. Also, this policy does nothing to screen the thousands of employees of exhibitors or show attendees who also can wander the SDCC Facility.

DEFENDANTS' OBJECTIONS

3.

No objection.

4.

Relevance (Fed. R. Evid. 401 and 402); Legal Conclusion; Improper Lay Opinion (Fed. R. Evid. 701 and 704); Improper Expert Opinion (Fed. R. Evid. 702 through 704); Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation

I am also familiar with the way displays Relevance (Fed. R. Evid. 401 and 402); and exhibits are delivered to the SDCC Legal Conclusion; Improper Lay Opinion Facility. For a full-hall show there can be (Fed. R. Evid. 701 and 704); Improper hundreds of truckloads of freight unloaded Expert Opinion (Fed. R. Evid. 702 through at the docks of the building. None of these 704); Lacks Foundation; Lacks Personal truck drivers and their contents are not Knowledge (Fed. R. Evid. 602); Calls for screened. It is not difficult for the truck Speculation drivers to gain access to the building while their truck is being unloaded, and there is no centralized supervision of this process. The same is true for moving out all of the -17Case No. 07-CV-2172 BEN (JMA) DEFENDANT'S EVIDENTIARY OBJECTIONS TO EVIDENCE SUBMITTED BY PLAINTIFF IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

5.

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PLAINTIFF'S EVIDENCE freight at the end of a show. All of that freighted material is moved in and out of the building by another large independent workforce of freight haulers. The SDCC does not institute background checks for the freight haulers or truck drivers. Getting access to the SDCC Facility is not difficult. SDCC does not have photo badging system like many other convention centers have. All you need is a wrist band, which is not hard to get. Before each show, the show manager or general contractor will provide security or the registration desk with a list of employees that will need access to the SDCC Facility. The show manager or general contractor is then given a corresponding number of wrist bands to pass out to those employees. No further security screening is performed. All outside laborers with a wrist band gain complete access to the SDCC Facility. In light of all of this, there is no way that barring just our employees improves security at the SDCC Facility. I have read the affidavit of Carol Wallace, the President and Chief Executive Officer of the SDCC, that was filed in state court. Ms. Wallace claims that United's alleged use of temporary labor is the justification for applying this "security" policy solely against United. Ms. Wallace specifically says: "I am informed, and believe, and thereon allege that [United] primarily uses temporary staff to perform cleaning at the [SDCC Facility]... Our assessment of areas of vulnerability indicated that the use of outside cleaning crews should be eliminated." (Wallace Deci. 9:5-7.)

DEFENDANTS' OBJECTIONS

6.

Relevance (Fed. R. Evid. 401 and 402); Legal Conclusion; Improper Lay Opinion (Fed. R. Evid. 701 and 704); Improper Expert Opinion (Fed. R. Evid. 702 through 704); Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); Calls for Speculation

7.

No objection.

I do not know who is informing Ms. Argumentative; Relevance (Fed. R. Evid. Wallace, but, unlike Ms. Wallace, I have 401 and 402); Improper Lay Opinion (Fed. first hand knowledge of the status of all R. Evid. 701 and 704); Improper Expert United employees in San Diego and can Opinion (Fed. R. Evid. 702 through 704); unequivocally say that her statement is Lacks Foundation; Best Evidence Rule false. We do not use temporary workers (Fed. R. Evid. 1001 through 1008); Lacks and all employees are hired with the Authentication (Fed. R. Evid. 901) intention to be long-term employees. As of June 1, 2007, the majority of our employees in San Diego had been -18Case No. 07-CV-2172 BEN (JMA) DEFENDANT'S EVIDENTIARY OBJECTIONS TO EVIDENCE SUBMITTED BY PLAINTIFF IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

8.

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¶

PLAINTIFF'S EVIDENCE employed by United for at least two and up to seventeen years. Attached as Exhibit A is a list of United's employees in San Diego listing the hiring date of each employee. In fact, on the few occasions we have needed extra people in San Diego, we have not hired temporary workers. Rather, we have chosen to eat the cost of bringing in and housing low wage United workers from other cities such as Las Vegas or Los Angeles to work a show at the SDCC Facility. We do this because the learning curve is too great for a temporary worker who would be unable to perform in an efficient manner. We simply do not use temporary workers. Had Ms. Wallace truly been so concerned about our alleged use of temporary labor, she or someone from the SDCC could have asked us about it. They never did. The SDCC has never, in my 19 years of working in San Diego, informed me or anyone at United of a single security issue involving our employees. When we heard about this policy, we offered to run background checks or any other necessary security procedures on United employees. As you can see from the job application that each of our employees is required to fill out, all of the necessary information needed to run a background check is easily available and could have been provided to SDCC. Attached as Exhibit B is a copy of United's 23 page Employment Application. This offer was ignored and SDCC instead chose to bar our employees from the SDCC Facility.

DEFENDANTS' OBJECTIONS

9.

Improper Lay Opinion (Fed. R. Evid. 701 and 704); Improper Expert Opinion (Fed. R. Evid. 702 through 704); Lacks Foundation

10.

Argumentative; Relevance (Fed. R. Evid. 401 and 402)

11.

Relevance (Fed. R. Evid. 401 and 402); Hearsay(Fed. R. Evid. 801); Lacks Foundation; Best Evidence Rule (Fed. R. Evid. 1001 through 1008); Lacks Authentication (Fed. R. Evid. 901)

Prior to the implementation of SDCC's Relevance (Fed. R. Evid. 401 and 402); "security" policy, United had a highly Lacks Foundation; Calls for Speculation trained and efficient work force of 51 employees in San Diego. More than thirty of our employees had worked for United for at least 2 years, and some have worked for United for 14 years. Since the policy was implemented in June 2007, we have lost 47 of these 51 employees. We have lost nearly all of our workforce because they were not working and we cannot pay them to not work. Obviously, they have -19Case No. 07-CV-2172 BEN (JMA) DEFENDANT'S EVIDENTIARY OBJECTIONS TO EVIDENCE SUBMITTED BY PLAINTIFF IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

12.

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¶

PLAINTIFF'S EVIDENCE little choice but to seek other employment. I and my staff have worked very hard to stay in constant contact with our employees to see if we will be able to convince them comeback if United is allowed to return to work in the SDCC Facility. I believe that if the SDCC's policy is lifted soon, we will be able to get many of them back but it is pretty clear to me that as more time passes, it will become more difficult for us to get them back. Without our highly trained and efficient workers, we cannot compete in the San Diego market. The success of our business is based on the high level of efficient service we provide show managers and general contractors. This service is based on the experience of our employees with specific types and sizes of trade shows held at the Convention Facility. Based on the learning by doing nature of this business, our employees, many of whom have served as supervisors, have been trained to know where they need to be and what they need to do at any given moment during a show. We need our employees to offer competitive prices and service in San Diego. Over a year ago, I met with Richard Simon, President of United, to develop and implement a plan to compete for more business and increase United's market share in the San Diego market. We specifically, were planning to solicit show management for business at trade shows serviced by SDCC by offering on competitive terms for price and service. Since the SDCC has put this "security" policy into effect, all of these efforts have come to a complete stop. We are no longer competing for new business in San Diego. I don't see how anyone other than SDCC can compete for business in San Diego right now because SDCC won't let our employees or anyone else's into the Convention Facility. All we are doing in San Diego right now is meeting our already existing contracts by paying SDCC for the use of their employees. 16. Since the "security" policy was

DEFENDANTS' OBJECTIONS

13.

Relevance (Fed. R. Evid. 401 and 402); Improper Lay Opinion (Fed. R. Evid. 701 and 704); Improper Expert Opinion (Fed. R. Evid. 702 through 704); Lacks Foundation; Calls for Speculation

14.

Relevance (Fed. R. Evid. 401 and 402)

15.

Relevance (Fed. R. Evid. 401 and 402); Improper Lay Opinion (Fed. R. Evid. 701 and 704); Lacks Foundation; Calls for Speculation

Relevance (Fed. R. Evid. 401 and 402); -20Case No. 07-CV-2172 BEN (JMA) DEFENDANT'S EVIDENTIARY OBJECTIONS TO EVIDENCE SUBMITTED BY PLAINTIFF IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

16.

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PLAINTIFF'S EVIDENCE implemented, United has been allowed to carry out its contracts only by using SDCC labor. We have no control over how many or which employees SDCC assigns to a given show and we have little ability to perform oversight and supervision. Our employees have an incentive to be efficient and if they aren't efficient we can discipline them. We have no ability to do so with SDCC employees. Also, before each show, United gives our customers estimates based on a fullyloaded, blended, hourly rate for the service which includes United's direct labor cost, overhead and profit and based on this estimate United cannot be paid for hours worked in excess of this estimate. This means that we can only turn a profit if our workers perform efficiently. SDCC ignores our estimates and forces us to abide by SDCC terms. Despite these estimates, SDCC brings in more labor than United would bring in to perform each job and have used 20 employees for a show where United's contractual estimate was to use 12 employees. While we have to be efficient to meet and ultimately make money under these estimates, SDCC employees do not share this concern and we have no way to incentivize or discipline them.

DEFENDANTS' OBJECTIONS Misstates Evidence; Lacks Foundation; Calls for Speculation

17.

Relevance (Fed. R. Evid. 401 and 402)

18.

Argumentative; Relevance(Fed. R. Evid. 401 and 402); Misstates Evidence; Lacks Foundation; Calls for Speculation

P. 20 21 22 23 24 25 26 27 28

Evidentiary Objections to Exhibit 8-A - Employee History-San Diego, CA

SDCCC objects to Plaintiff's Exhibit 8-A, Employee History - San Diego, CA on the following grounds: Relevance(Fed. R. Evid. 401 and 402); Hearsay (Fed. R. Evid. 801); Lacks Foundation; Lacks Personal Knowledge (Fed. R. Evid. 602); and, Lacks Authentication (Fed. R. Evid. 901). Q. Evidentiary Objections to Exhibit 8-B - Employment Application

SDCCC objects to Plaintiff's Exhibit 8-B, Employment Application on the following grounds: Relevance(Fed. R. Evid. 401 and 402); Hearsay (Fed. R. Evid. 801); Lacks Foundation; and, Lacks Authentication (Fed. R. Evid. 901). -21Case No. 07-CV-2172 BEN (JMA) DEFENDANT'S EVIDENTIARY OBJECTIONS TO EVIDENCE SUBMITTED BY PLAINTIFF IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

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R.

Evidentiary Objections to Exhibit 9 - Declaration of Dr. John S. Hekman PLAINTIFF'S EVIDENCE DEFENDANTS' OBJECTIONS Relevance (Fed. R. Evid. 401 and 402); Unqualified Expert (Fed. R. Evid. 702 through 704)

My name is John S. Hekman. I am a Principal at LECG, a firm that provides consulting and expert testimony in economics, finance and accounting. Since 1990, I have testified in federal and state courts on such matters as price fixing, patent infringement, trade secrets, real estate finance and general economic damages. I have previously been engaged as a consultant or expert witness in such matters as the licensing of celebrity names and images, the structuring of contracts for the release of motion pictures, the video rental industry and other aspects of the entertainment business. I have defined relevant markets in antitrust matters. I have analyzed allegations of exclusionary behavior by market participants. I have assessed the degree of market power by defendants accused of the abuse of market power. I earned a MBA in finance and a Ph.D. in economics at the University of Chicago. I have taught economics and finance at the University of Southern California, The University of North Carolina, Boston College and The University of Chicago. In addition, I have published a number of papers in academic and professional journals. I was also an economist with the Federal Reserve in Boston and Atlanta. My billing rate in this matter is $400 per hour. My curriculum vitae is attached to this report as Exhibit 1.

I have been asked by counsel for United Relevance (Fed. R. Evid. 401 and 402); National to analyze the actions of the San Unqualified Expert (Fed. R. Evid. 702 Diego Convention Center ("SDCC") from through 704) the perspective of industrial organization economics and to provide several opinions based on that analysis. I have been asked to define the geographic markets as well as to determine whether the Trade Show Cleaning Services provided by United and SDCC are part of a specialized product market that is economically meaningful and distinct from other cleaning services. I have been asked to determine whether SDCC has market power or monopoly power in this market and whether SDCC has exercised such power. Finally, I have been asked to determine the likely current and future effect on consumers in the -22Case No. 07-CV-2172 BEN (JMA) DEFENDANT'S EVIDENTIARY OBJECTIONS TO EVIDENCE SUBMITTED BY PLAINTIFF IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

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¶

PLAINTIFF'S EVIDENCE relevant market of SDCC's action in enforcing the exclusive use of SDCC employees for cleaning services.

DEFENDANTS' OBJECTIONS

3.

I have reviewed materials related to the Relevance (Fed. R. Evid. 401 and 402); case to form my opinions. These materials Unqualified Expert (Fed. R. Evid. 702 include the Complaint for Injunctive Relief through 704) and Damages; Defendant's Objections to Evidence Submitted by Plaintiff the Memoranda of Points and Authorities in Support and in Opposition to the application for a restraining order; the Declarations of Carol Wallace, Dessi Nintcheva, Thomas Robbins, Jason Kirby, Richard Simon, Charles Linn, Larry Colby, and Mark Epstein; the SDCC cleaning services contract with United Service Companies; certain correspondence between market participants and SDCC from 1990 to 2000; correspondence from market participants related to SDCC's 2007 actions; 2006 Exhibitor Application and Contract, Internet Telephony Conference & Expo; the SDCC website; and additional materials from my own research. A complete list of the materials I have reviewed is attached to this Declaration as Exhibit 2.

I recognize that there are additional Relevance (Fed. R. Evid. 401 and 402); materials likely to be provided to me Legal Conclusion; Improper Expert during the course of discovery, and I will Opinion (Fed. R. Evid. 702 through 704); revisit my opinions if necessary based on Lacks Foundation any new information. However, the materials I have reviewed have allowed me to reach the following opinions: a) The economically meaningful relevant product market is Trade Show Cleaning Services at SDCC. b) The relevant geographic market is the San Diego metropolitan area. c) SDCC has market power in the Trade Show Cleaning Services market at the SDCC. d) The demand for large trade show services facing SDCC is inelastic with respect to price. Trade Show Cleaning Services is a small portion of the price of large trade show services. As a result, a price increase in the Trade Show Cleaning Services market will have a small impact on the price of large trade show services -23Case No. 07-CV-2172 BEN (JMA) DEFENDANT'S EVIDENTIARY OBJECTIONS TO EVIDENCE SUBMITTED BY PLAINTIFF IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

4.

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¶

PLAINTIFF'S EVIDENCE and would be unlikely to cause a loss of SDCC's trade show business. e) The effects of SDCC's denying United National and other cleaning services access to the convention center are highly anticompetitive. f) SDCC has eliminated current and future competition and has effectively raised prices for Trade Show Cleaning Services in connection with its exclusion of non-DCC cleaning employees. g) The convention center is an essential facility for competitors in the trade show cleaning market, and SDCC has denied access to this facility for competitors in the market. h) SDCC has leveraged its monopoly power in the San Diego large trade show market to exclude competitors in the Trade Show Cleaning Services market. i) Because trade shows contract for space at SDCC many years in advance, trade show consumers are "locked in" to higher prices charged for cleaning services, and are further unlikely to switch because Trade Show Cleaning Services are a small percentage of the total expenditure for trade show services. j) The manner in which SDCC has excluded competition is a form of "raising rivals' costs", which is recognized by economics as an anti-competitive practice. k) I conclude from the "no economic sense" test that there is no pro-competitive justification for SDCC's actions. 1) Consumers in the market for Trade Show Cleaning Services have been harmed. Consumers have had their choices in the market reduced to a single supplier, i.e. SDCC. And the prices charged by SDCC are higher than those charged by United National.

DEFENDANTS' OBJECTIONS

In order to assess whether the actions taken Relevance (Fed. R. Evid. 401 and 402); by SDCC against United National are anti- Legal Conclusion; Improper Expert competitive, it is necessary to define the Opinion (Fed. R. Evid. 702 through 704); market in which SDCC and United Lacks Foundation compete. When the relevant market has been defined, an economist can measure the market or monopoly power that a firm -24Case No. 07-CV-2172 BEN (JMA) DEFENDANT'S EVIDENTIARY OBJECTIONS TO EVIDENCE SUBMITTED BY PLAINTIFF IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

5.

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¶

PLAINTIFF'S EVIDENCE such as SDCC has in that market and judge whether specific acts by that firm are anticompetitive. Economists have identified the primary elements of market definition as, first, the definition of the specific products or services that, in this case, SDCC and United sell. Products or services that have a high cross-price elasticity of demand are considered to be in the same market. A high cross-price elasticity of demand between services A and B means that if the price of A rises, the demand for B will rise by a significant amount. This shows that A and B are close substitutes. Products and services that are close substitutes using this measure are judged to be in the same market. The second primary element of the market definition is geographic. Some firms, for example GM or Ford, compete with other carmakers throughout the country in selling their products, so that the relevant geographic context of the market is national. Other markets are much smaller geographically; a Del Taco in San Diego is not in the same geographic market as a Del Taco in Kansas City. For each product or service, the geographic market is the area in which the firms produce and sell. The use of monopoly power to interfere with the efficient functioning of a market without the result of lowering price or increasing quality is anti-competitive. In general, exclusionary conduct is any conduct that harms competitors and is not competition on the merits. A firm's actions are exclusionary if they tend to impair the opportunities of that firm's competitors in an unnecessarily restrictive way and do not enhance competition. Sometimes it is difficult to discern whether actions by a dominant firm that have the result of excluding competitors are anticompetitive. However, that is not the case with the actions of the SDCC with regard to the Trade Show Cleaning Services market at the SDCC. The effect of SDCC's actions was to exclude all competition, with no benefit to competition or to consumers.

DEFENDANTS' OBJECTIONS

6.

Relevance (Fed. R. Evid. 401 and 402); Legal Conclusion; Improper Expert Opinion (Fed. R. Evid. 702 through 704); Lacks Foundation

7.

Relevance (Fed. R. Evid. 401 and 402); Legal Conclusion; Improper Expert Opinion (Fed. R. Evid. 702 through 704); Lacks Foundation

8.

Relevance (Fed. R. Evid. 401 and 402); Legal Conclusion; Improper Expert Opinion (Fed. R. Evid. 702 through 704); Lacks Foundation

-25Case No. 07-CV-2172 BEN (JMA) DEFENDANT'S EVIDENTIARY OBJECTIONS TO EVIDENCE SUBMITTED BY PLAINTIFF IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

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¶ 9.

PLAINTIFF'S EVIDENCE The FTC and DOJ's 1992 Horizontal Merger Guidelines (Merger Guidelines) were developed in conjunction with economists and are generally accepted by economists as appropriate economic tools to be used by economists defining relevant markets and market power. The FTC/DOJ guidelines define a product market to be a group of products that are related such that a hypothetical profit-maximizing firm that was the only seller of those products (the monopolist) could profitably impose at least a "small but significant and nontransitory" increase in or markup of price over the competitive level. This minimum price markup that could be maintained for a significant period of time is typically taken to be 5 percent. This is sometimes called the "hypothetical monopolist test" or the "SNIP" test. The ability of a hypothetical monopolist to maintain a price increase as described above is analyzed by the competitive response that would result from the price increase. On the demand side, the response comes from buyers who switch to substitute products when the monopolist raises price. And on the supply side, the response comes from the ability of firms producing other products and services to begin producing the monopolist's product or service. The supply response also comes from new firms entering the industry because the price has risen.

DEFENDANTS' OBJECTIONS Relevance (Fed. R. Evid. 401 and 402); Legal Conclusion; Improper Expert Opinion (Fed. R. Evid. 702 through 704); Lacks Foundation

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Relevance (Fed. R. Evid. 401 and 402); Legal Conclusion; Improper Expert Opinion (Fed. R. Evid. 702 through 704); Lacks Foundation

On the demand side, the market test asks, if Relevance (Fed. R. Evid. 401 and 402); the monopolist imposed the "significant Legal Conclusion; Improper Expert and non-transitory" 5% price increase, Opinion (Fed. R. Evid. 702 through 704); whether buyers of the service could switch Lacks Foundation to other services in such numbers that the loss of sales by the monopolist would make the price increase unprofitable. If this is probable then the service would be in the same product market, and the market has not been defined broadly enough. Conversely, if the loss of sales is not enough to make the price increase unprofitable for the monopolist, then the product market is not too broad. The relevant market is the group of services just large enough that a monopolist could profitably raise price because buyers would be unwilling or unable to switch to other -26Case No. 07-CV-2172 BEN (JMA) DEFENDANT'S EVIDENTIARY OBJECTIONS TO EVIDENCE SUBMITTED BY PLAINTIFF IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

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Case 3:07-cv-02172-BEN-JMA

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