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

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Joel L. Herz, Esq. State Bar No. 015105 Law Offices of Joel L. Herz 3573 East Sunrise Drive, Suite 215 Tucson, AZ 85718 Telephone: 520-529-8080 Facsimile: 520-529-8077 [email protected] Attorneys for Defendant GTFM, LLC UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA MEADOWLARK LEMON, et al., Plaintiffs, vs. HARLEM GLOBETROTTERS INTERNATIONAL, INC., et al.; Defendants. Defendant GTFM, LLC ("GTFM" or "FUBU") submits this opposition to Plaintiffs' Joint In Limine Motion to Exclude the Chart Evidence of FUBU Defendants and All Testimony Related Thereto ("Plaintiffs' Motion"). Plaintiffs' Motion should be denied because the FUBU charts (Defendants' Trial Exhibits ("DX") 1094-1096) are proper summaries of evidence based on updated cost numbers (DX 1044). The original cost numbers ­ which are virtually the same as the updated numbers ­ were timely produced during discovery. Such costs and summaries are relevant because Defendants may establish deductions for costs. Order, June 27, 2006 at 17 (Dkt. # 425); Restatement (Third) of Unfair Competition § 49. Plaintiffs' Motion is premised on a fundamental misstatement: that "Defendants belatedly seek to introduce evidence of costs in order to reduce their profits that may be GTFM, LLC'S OPPOSITION TO PLAINTIFFS' JOINT IN LIMINE MOTION TO EXCLUDE THE CHART EVIDENCE OF FUBU DEFENDANTS AND ALL TESTIMONY RELATED THERETO Nos. CV-04-0299 PHX DGC and CV-041023 PHX DGC

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disgorged." Plaintiffs' Motion at 2. As discussed more fully in Defendants' Opposition to Plaintiffs' Joint In Limine Motion to Exclude Any Evidence of Defendants' Costs or Expenses (the "Cost Motion Opposition"), this is untrue. To the contrary, Defendants

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produced hundreds of pages of documents during discovery setting forth their costs, which can be found in the Sales Detail Reports.1 In preparing for the Settlement Conference and trial, GTFM updated the cost documents in order to have a more accurate calculation of their profits. That updated

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information is set forth in DX 1044. These updated cost documents reflect returns that were not taken into account in the Sales Detail Reports and other minor corrections over time. As stated in the Cost Motion Opposition, a cost comparison of the Inventory Cost Sheets (DX 1044) and the Sales Detail Reports for the nine styles at issue illustrates that the difference between DX 1044 and the Sales Detail Report are miniscule. See Exhibit B attached hereto. For example, Style H3002 shows a 0.5% difference in costs and Style HGB3002 shows a mere 1.1% difference in costs.

The next to last column on each Sales Detail Report is entitled "Cost", and represents the Landed Duty Paid cost for the goods shown. For example, DX 1001 is the Sales Detail Report for Style H1402 (attached hereto as Exhibit A). It shows sales by account and total sales, in units and dollars on the last page, as well as total cost, and gross profit. Plaintiffs did not question the FUBU executives about these Sales Detail Reports at their depositions, even though FUBU first provided these documents in January 2005. The Sales Detail Reports comprise DX 1001, 1003, 1005 1007, 1009, 1011, 1013, 1015, 1017, 1019, 1021, 1023, 1025, 1027, 1029, 1031, and 1034 thru 1043, produced during discovery with production numbers GTFM LLC 000011-000098, 000115-000131, 001102-001156, 001248-1302, and 001646-001690. These exhibits are agreed by Plaintiffs to be admissible at trial. In addition to the Sales Detail Reports, Defendants also produced other cost information, including the Chart entitled "Projected Cost Structure of Sales (HGI)" which was an exhibit at the deposition of Bruce Weisfeld (DX 1093), as well as the Sales Representative Agreement with Samsung, the FUBU/HGI License Agreement and the Jordache Sublicense Agreement (DX 1064 thru 1065, 1067 thru 1069). These exhibits are agreed by Plaintiffs to be admissible at trial.

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Moreover, the costs in the Inventory Cost Sheets are generally more beneficial to Plaintiffs because FUBU's updated costs are slightly lower than the costs in the Sales Detail Reports. See Exhibit B. FUBU was trying to be as fair as possible in calculating

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its profits and used these updated numbers. However, Defendants' calculations can be replicated with the cost numbers in the Sales Detail Reports if the Court would prefer. See potential replacement DX 1094a thru 1096a, attached hereto as Exhibits C-E. The notion that Plaintiffs have been prejudiced by these charts is unfounded. The

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charts ­ DX 1094 thru 1096 ­ are based on calculations flowing from voluminous documents. All of the documents are conceded by Plaintiffs to be admissible other than DX 1044. And if the replacement charts are used ­ DX 1094a thru DX 1096a ­ all of the underlying data is conceded to be admissible. In the Ninth Circuit, the proponent of a summary under FRE 1006 must establish a foundation that (1) the underlying materials upon which the summary is based are admissible in evidence; and (2) the underlying documents were made available to the opposing party for inspection. Amarel v. Connel, 102 F.3d 1494, 1516 (9th Cir. 1997). Plaintiffs cite to a Sixth Circuit case which sets forth the following five requirements to admit a summary under FRE 1006: (1) the underlying documents must be voluminous; (2) the underlying documents must have been available for examination or copying or both; (3) the underlying documents must be admissible in evidence; (4) the summary must be accurate and nonprejudicial; and (5) the summary must be properly introduced,

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i.e., the proponent of the summary should present the testimony of a witness who supervised its preparation.2 See U.S. v. Bray, 139 F.3d 1104, 1109-1110 (6th Cir. 1998). The evidence at trial will demonstrate that the summaries are admissible. They

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need not be shown to be admissible now. The evidence at trial will show that DX 10941096 and DX 1094a ­ DX 1096a meet all of those requirements. As stated above, DX 1094-1096 are based on documents that have been conceded as admissible in evidence, with the exception of the Cost Inventory Sheets, which are merely updated costs and are

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virtually identical to the costs set forth in the Sales Detail Reports; DX 1094a ­ DX 1096a are based exclusively on documents that have been conceded as admissible in evidence, with no exception. Specifically, these summaries are based on the Sales Detail Reports, the Samsung and Jordache Agreements, and testimony from trial witnesses. These charts accurately reflect the underlying evidence and there will be a witness at trial to explain how all of the calculations were done in DX 1094-1096 and DX 1094a 1096a. These documents are proper summaries under FRE 1006 and the only issue is whether DX 1094a - 1096a should be substituted for DX 1094-1096. Based on the foregoing, GTFM respectfully requests that Plaintiffs' Motion be denied in its entirety. RESPECTFULLY SUBMITTED this 22nd day of November, 2006. By: s/ Ira S. Sacks_______________

Plaintiffs cite to EEOC v. Lennar Homes of Arizona, Inc., 2006 WL 1734594 (D.Ariz. 2006) for the proposition that cost calculations require specialized knowledge. In that case, the paralegal was substituted for Plaintiffs' expert and the Court found that she would not be recounting a calculation she did as part of the underlying events of this case. Rather, she would be applying mathematical, accounting, and interest principles to calculate claimants' damages. Here, FUBU executives have done these calculations of FUBU's own profits based on familiarity with their own business records and these calculations do not require expert testimony.

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Ira S. Sacks, admitted pro hac vice Safia A. Anand, admitted pro hac vice DREIER LLP 499 Park Avenue New York, New York 10022 Telephone: 212-328-6100 Facsimile: 212-328-6101 [email protected] Joel L. Herz, Esq. State Bar No. 015105 Law Offices of Joel L. Herz 3573 East Sunrise Drive, Suite 215 Tucson, AZ 85718 Telephone: 520-529-8080 Facsimile: 520-529-8077 [email protected] Attorneys for Defendant GTFM, LLC

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CERTIFICATE OF SERVICE 1. I hereby certify that on November 22, 2006, a true and correct copy of

GTFM, LLC's Opposition to Plaintiffs' Joint In Limine Motion to Exclude the Chart Evidence of FUBU Defendants and All Testimony Related Thereto was electronically transmitted to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Safia A Anand [email protected] Florence M Bruemmer [email protected] Edward R Garvey [email protected], [email protected], [email protected] Robert Williams Goldwater III [email protected] Ray Kendall Harris [email protected], [email protected] Joel Louis Herz [email protected], [email protected] Alec R Hillbo [email protected], [email protected] Brandon Scott Peters [email protected], [email protected], [email protected] Anders V Rosenquist , Jr [email protected] Ira S Sacks [email protected] Clay M Townsend [email protected], [email protected]; [email protected] Christa O Westerberg [email protected] 2. I hereby certify that on November 22, 2006, a true and correct copy of the attached

document was sent via U.S. Mail, postage paid thereon, to the following parties, at the addresses listed: Keith R. Mitnik Morgan & Morgan PA 20 N. Orange Ave. Suite 1600
Orlando, FL 32802

s/ Leslie Grant___________

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