Free Motion in Limine - District Court of Arizona - Arizona

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Ray K. Harris, # 007408 FENNEMORE CRAIG, P.C. 3003 N. Central Ave., Suite 2600 Phoenix, AZ 85012-2913 [email protected] (602) 916-5414 Edward R. Garvey, admitted pro hac vice GARVEY McNEIL & McGILLIVRAY 634 W. Main Street, Suite 101 Madison, WI 53703 (608) 256-1003 Attorneys for Defendants Harlem Globetrotters Int' l, Inc. and Mannie L. & Catherine Jackson UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA MEADOWLARK LEMON, et al., Plaintiffs, vs. HARLEM GLOBETROTTERS INTERNATIONAL, INC., et al.; Defendants. DEFENDANTS IN LIMINE MOTION TO EXCLUDE EVIDENCE REGARDING WHETHER THE NEAL PLAINTIFFS' PLAYER CONTRACTS ARE EXECUTORY Nos. CV-04-0299 PHX DGC and CV-041023 PHX DGC

Defendants GTFM, LLC, Harlem Globetrotters International, Inc. and Mannie L. and Catherine Jackson submit this joint motion pursuant to Fed. R. Evid. 402 and 403, and the inherent powers of the Court, for an order precluding Plaintiffs Fred "Curly" Neal, Larry "Gator" Rivers, Dallas "Big D" Thornton, Robert "Showboat" Hall, Marques Haynes, and James "Twiggy" Sander ("Neal Plaintiffs") from arguing that, or offering at

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trial any evidence relating to whether, their player contracts are executory under 11 U.S.C. § 365 of the Bankruptcy Code.1 A contract is executory if "the obligations of both parties are so far unperformed that the failure of either party to complete performance would constitute a material breach and thus excuse the performance of the other." In re Wegner, 839 F.2d 533, 536 (9th Cir. 1988) (emphasis added); see also SJ Order at 15 (Doc. # 425). Whether a party' failure to complete performance would constitute a material breach is generally a s question of the state law that governs a contract. In re Wegner, 839 F.2d at 536. The Neal Plaintiffs asserted that their player contracts are executory because each contained publicity provisions which they interpret as covenant-not-to-sue obligations. Neal SJ Mot. at 14 (Doc # 279). The Court denied Plaintiffs summary judgment on this claim because Plaintiffs failed to show that these alleged obligations are material under applicable state law. SJ Order at 15 (Doc. # 425). Because the Neal Plaintiffs cannot demonstrate the publicity provisions of their contracts are material under applicable state law, Plaintiffs should be precluded from presenting evidence on this issue. Delaware law, which governs Plaintiff Neal' contract, adopts the test of s materiality found in the Restatement (Second) of Contracts § 241.2 In re General

Datacomm Industries, Inc., 407 F.3d 616, 627 (3d Cir. 2005) (Pollak, J., concurring). Based on these factors, one party' obligation is material "if it functioned... as the reason s inducing the other party' entry into the contract." Id. at 629. s

This motion is made without prejudice to Defendants'other in limine motions, Trial Brief, Motion to Strike or Opposition to Plaintiffs'Motion for Pre-Admission. 2 The Restatement lists a series of factors to be considered when assessing whether a breach is material, including (a) the extent to which the injured party will be deprived of the benefit which he reasonably expected; (b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived; (c) the extent to which the party failing to perform or to offer to perform will suffer forfeiture; (d) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances; and (e) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing. In re General Datacomm Industries, Inc., 407 F.3d at 627-28.

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Similarly, Minnesota law, which governs Plaintiff Sanders' contract, considers a breach to be material when "one of the primary purposes" of the contract is violated. Steller v. Thomas, 45 N.W.2d 537, 542 (1950). In other words, a breach is material when "`failure to perform the obligation defeats an essential purpose of the contract.'" LeMond Cycling, Inc. v. PTI Holding, et al., No. 03-5441, 2005 U.S. Dist. LEXIS 742 at *11 (D. MN Jan. 14, 2005) The same is true under Illinois law, which governs Plaintiffs Haynes' and Hall' contracts: "material breach occurs where the covenant not performed s is of such importance that the contract would not have been made without it." Dragon Construction Inc. v. Parkway Bank & Trust, 678 N.E.2d 55, 58 (Ill. App. Ct. 1997). California law, which governs Plaintiffs Rivers and Thornton' contracts, also states that s a breach is material if the violation "goes to the essence of the contract."3 Flagship West, LLC v. Excel Realty Partners, L.P., No. 1:02 CV 05200, 2005 U.S. Dist. LEXIS 29623 at *9 (E.D. Ca. Sept. 30, 2005). The contracts at issue are employment contracts. As the Neal Plaintiffs have already conceded, "the dominant purpose of the player contracts when signed by the Plaintiffs was to play basketball." Neal SJ Mot. at 13 (Doc # 279). Based on this admission, and under the standards enunciated above, the publicity provisions were not the reason why they entered the contracts. Plaintiffs lack evidence as to whether the publicity provisions of the contracts were the reason HGI' predecessors entered the s contracts, since they have not conducted any discovery of HGI' predecessors. It is not s likely that the publicity provisions were the dominant reasons HGI' predecessors entered s into the contracts, however, since the purported covenants-not-to-sue are merely "a defense to the licensee if the licensee is sued for allegedly exceeding the scope of the license," and do not create an on-going "affirmative duty." In re Gencor Indus, Inc., 298

The factors courts consider when assessing materiality include: the intent of the parties, the language of the contract at issue, the subject matter of the agreement, and whether a party would have entered into the contract without the provision in question. Flagship West, LLC, 2005 U.S. Dist. LEXIS 29623, at *10.

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B.R. 902, 911 (M.D.Fla. 2003). Thus, for both parties to the contracts, the publicity provisions were not of "such importance that the contract[s] would not have been made without [them]." Dragon Construction Inc., 678 N.W.2d at 58. Therefore, the publicity provisions are not material. As a result, any evidence concerning whether the player contracts are executory is irrelevant and would mislead the jury and be unduly prejudicial to Defendants and cannot be permitted into evidence. PROPOSED LANGUAGE FOR ORDER Pursuant to ¶ 7 of the Pretrial Order, Defendants respectfully request that the Court enter an order stating that Plaintiffs are precluded at trial from arguing that, or offering any evidence relating to whether, the player contracts were executory. RESPECTFULLY SUBMITTED this 15th day of November, 2006.

By: s/ Ira S. Sacks_________________ By: s/ Edward R. Garvey____________ Ira S. Sacks, admitted pro hac vice Edward R. Garvey, admitted pro hac vice Safia A. Anand, admitted pro hac vice Christa Westerberg, admitted pro hac vice DREIER LLP GARVEY McNEIL & 499 Park Avenue McGILLIVRAY, S.C. New York, NY 10022 634 W. Main St. #101 Telephone: 212-328-6100 Madison, WI 53703 Facsimile: 212-328-6101 Telephone: 608-256-1003 [email protected] Facsimile: 608-256-0933 [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 Ray K. Harris, # 007408 FENNEMORE CRAIG, P.C. 3003 N. Central Ave., Suite 2600 Phoenix, AZ 85012-2913 Telephone: 602-916-5000 Facsimile: 602-916-5999 [email protected] Attorneys for Defendants Harlem Globetrotters Int' Inc. and Mannie l, L. & Catherine Jackson
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PHX/RHARRIS/1856560.1/43458.007

CERTIFICATE OF SERVICE 1. I hereby certify that on November 15, 2006, a true and correct copy of

Defendants' In Limine Motion to Exclude Evidence Regarding whether the Neal Plaintiffs' Player Contracts are Executory 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] [email protected]\ [email protected]

Florence M Bruemmer Joel Louis Herz

Robert Williams Goldwater III

[email protected], [email protected]

Brandon Scott Peters [email protected], [email protected], [email protected] Anders V Rosenquist , Jr Ira S Sacks [email protected] [email protected]

Clay M Townsend [email protected], [email protected]; [email protected]

2.

I hereby certify that on November 15, 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/ Melody Tolliver

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