Free Trial Brief - District Court of Arizona - Arizona

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Morgan & Morgan, P.A. 20 N. Orange Avenue, 16th Floor Orlando, FL 32801 Clay M. Townsend, Fl. #023414 Brandon S. Peters, Fl. #022641 Keith R. Mitnik, Fl. #436127 Attorneys for Neal Plaintiffs Anders Rosenquist, Jr. #002724 Florence M. Bruemmer #019691 Rosenquist & Associates 80 E. Columbus Phoenix, Arizona 85012 Attorneys for Plaintiff Meadowlark Lemon UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA

MEADOWLARK LEMON, et al., Plaintiff, vs. HARLEM GLOBETROTTERS INTERNATIONAL, INC., et al.; Defendants.

Case Nos.: CV 04 0299 PHX DGC and CV-04-1023 PHX DGC PLAINTIFFS' TRIAL BRIEF

Plaintiffs Neal, Rivers, Thornton, Hall, Haynes, Sanders, and Lemon, through their respective undersigned counsel, hereby submit their joint trial brief as directed by Section D of the Court's Final Pretrial Order directing each party to file a short trial brief on all contested issues of law contemporaneously with the filing of the Proposed Final Pretrial Order. I. INVASION OF RIGHT OF PUBLICITY. The common law right of privacy provides protection against four distinct categories of invasion: 1) intrusion upon a plaintiff's seclusion or solitude, or into his private affairs; 2)

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public disclosure of embarrassing private facts about plaintiff; 3) publicity which places the plaintiff in a false light in the public eye; and 4) appropriation, for the defendant's advantage, of the plaintiff's name or likeness. Pooley v. National Hole-In-One Association, 89 F. Supp. 2d 1108, 1111 (D. Ariz. 2000) (emphasis added). The fourth category is commonly referred to as appropriation or the right of publicity. Id. To prevail on a cause of action for invasion of the right of publicity, Plaintiff must establish: 1) Defendant's use of Plaintiff's identity; 2) the appropriation of Plaintiff's name or likeness to Defendant's advantage, commercially or otherwise; 3) lack of consent; and 4) resulting injury. Id. The elements of the right of publicity include only the elements of validity and infringement, not the element of fault. Id. at 1115. An intent to infringe another's right of publicity is not an element of liability, thus, Plaintiffs are not required to prove that the Defendants intended to identify the Plaintiffs. Id. Similarly, a mistake regarding Plaintiffs' consent is not a defense. Id. In 1993, HGI bought the Harlem Globetrotters from a bankrupt company, I.B.C. Plaintiffs had signed various contracts with I.B.C. and other predecessor companies, but never played for or signed player contracts with Defendant HGI. Plaintiffs were employed in various capacities, including playing basketball, and doing public relations for various and different companies owning the "Harlem Globetrotters" basketball team for various periods of time starting in the 1940's. However, Plaintiffs are no longer involved or employed with the Harlem Globetrotter organization.

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In June 2002, HGI entered into an agreement with GTFM to license the Harlem Globetrotter name to GTFM to sell apparel products. The merchandise is FUBU merchandise (GTFM's tradename), bearing Harlem Globetrotter marks. Under the agreement HGI

authorized GTFM to use the names and likenesses of any and all players who have played for the Harlem Globetrotters. The GTFM clothing line bore Plaintiffs' names, likenesses, and player numbers. Additionally, Harlem Globetrotter's apparel made and sold by GTFM had hangtags listing the Plaintiffs' names, which were used as marketing tools. Both GTFM and HGI made a substantial profit from selling the apparel bearing Plaintiffs' names and likenesses. Furthermore, even though this was GTFM's first contract with HGI, GTFM simply accepted Mannie Jackson's assertions that he owned the right to use Plaintiffs' names, likenesses, and player numbers, without contacting Plaintiffs or even looking at Plaintiffs' old contracts. In fact, GTFM included an indemnification agreement in their contract with HGI regarding past, present, or future Globetrotter's players because GTFM did not receive every player's contract that played for the Globetrotter's and did not want to review the player contracts that existed for Plaintiffs. There are no agreements or contracts between Plaintiffs and HGI or GTFM in which Plaintiffs gave HGI or GTFM the right to use their names, likenesses, and player numbers in a clothing line. Plaintiffs never signed a contract with the original Harlem Globetrotter's owner or HGI, in which they signed away their rights in perpetuity for the use of their names and likenesses for commercial endorsements. Additionally, HGI's

predecessor companies signed a Collective Bargaining Agreement guaranteeing players 25% of merchandise sales. Furthermore, no one from GTFM or HGI contacted Plaintiffs for their input
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or approval regarding the agreement between GTFM and HGI or the clothing produced pursuant thereto. If not stopped, HGI will continue to use Plaintiffs' names and likenesses for

commercial benefit. 1. HGI Is Liable To Plaintiffs For Common Law Invasion Of The Right Of Publicity.

HGI profited from the licensing of Plaintiffs' names and likenesses and the sale of the clothing bearing Plaintiffs' names. Specifically, HGI was paid a total of $1,723,000 in royalties from GTFM through September 19, 2003. The FUBU Globetrotters jerseys and warm up suits alone sold over $60 million in total retail sales in the first two years. Plaintiffs did not give their consent for HGI to use their names and likenesses in the manner that it was used in the licensing agreement with GTFM and the resulting apparel. For argument on this point, see Section II "Consent," set forth below. Plaintiffs were injured by HGI's use of their name and likeness on the clothing line. Plaintiffs were not compensated for the use of their names and likenesses. HGI kept all profits and/or royalties that Plaintiffs would have been entitled to. 2. GTFM Is Liable To Plaintiffs For Common Law Invasion Of The Right Of Publicity. For many of the same reasons that HGI is liable to Plaintiffs for Invasion of the Right of Publicity, GTFM is also liable to Plaintiffs for the committing the tort. It is undisputed that GTFM manufactured and sold clothing which prominently displayed Plaintiffs' names and/or numbers. GTFM profited from the sale of clothing bearing Plaintiffs' names and/or numbers. Net sales on men's and boy's clothing line alone for the first two years was $22.6 million.
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GTFM did not gain the right to use Plaintiffs' names and likenesses by entering into the agreement with HGI. GTFM did not contact Plaintiffs directly to get their consent to use their names and likenesses on the clothing. Furthermore, as discussed supra, GTFM did not use due diligence when it entered into the contract with HGI. Lastly, Plaintiffs have also been injured by GTFM's use of their names and likenesses. Plaintiffs were not compensated for the use of their names and likenesses although, had GTFM wanted to gain the consent of Plaintiffs', GTFM presumably would have had to pay Plaintiffs' for that right. GTFM kept all profits and/or royalties that Plaintiffs would have been entitled to. II. LACK OF CONSENT. a. Plaintiff Lemon. On December 23, 2003, Plaintiff Lemon sent a letter to HGI and Mannie Jackson, requesting any and all documentation which they are relying on that gives Defendants or any other entity authorization to use Plaintiff Lemon's name, image, likeness, number, notoriety, and goodwill. Defendants did not respond to the inquiry at all which forced Plaintiff Lemon to file this lawsuit. Then, on September 15, 2004, counsel for HGI sent a letter to Plaintiff Lemon's counsel stating that HGI was relying on a paragraph contained in Plaintiff's 1975 contract as the authority to use/license Plaintiff Lemon's name, likeness, and player number on a clothing line. However, that excerpted paragraph from Plaintiff's 1975 Contract states that the Harlem Globetrotters only have the right to use Plaintiff Lemon's name, likeness, and player number to the extent they are put to the same uses as they were put prior to the termination of the contract.

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The 1975 contract Defendant HGI relies on does not give them authority to use Lemon's name, number, and likeness on the clothing that is the subject of this lawsuit. b. Neal Plaintiffs. Defendants contend that through their player contracts with HGI's predecessors Plaintiffs licensed the use of their names and likeness "in perpetuity." However, the Neal Plaintiffs assert that Defendants lacked consent because HGI did not purchase their player contracts, the contracts are executory and were extinguished in bankruptcy proceedings, the contracts are void as unconscionable, and the player contracts did not authorize the type of use HGI/GTFM made of their names to endorse Harlem Globetrotter products. The Neal Plaintiffs argue that Defendants lacked consent because: 1) HGI is not a party to any contract with Plaintiffs and HGI did not purchase their player contracts in 1993, 2) the contracts are executory and were extinguished in bankruptcy proceedings, 3) the contracts are void as unconscionable, 4) even if old player contracts are still valid as to some publicity rights, the Collective Bargaining Agreement entered into between HGI's predecessor corporations required the payment of a 25% royalty on merchandise of the type not sold at games. Additionally, Neal and Haynes player have special provisions requiring for Neal 25% of merchandise, and for Haynes a limitation (like Lemon's) that any uses of his name are limited to the same uses as they were put prior to termination of the contract. All Neal Plaintiffs signed affidavits stating, among other things, that Plaintiffs have never signed any agreement of any kind with HGI.

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The players were routinely paid for endorsements and use of their names and likenesses for commercial promotion. Therefore, there is no evidence that the Neal Plaintiffs consented to the use of their name and likeness on the apparel at issue in this case. III. PLAINTIFFS ARGUE THAT HGI DID NOT ACQUIRE THE PLAYER CONTRACTS BY PURCHASE OR ASSIGNMENT. When Jackson bought the Globetrotters, the schedules to the Asset Purchase Agreement ("APA") delineated hundreds of assets on detailed schedules down to the desks and chairs, contracts and trademarks, and "player contracts." HGI asserts NatWest "did not delineate each and every asset," which misrepresents their intent to do so. Schedules on numerous drafts for player contracts and trademarks did not list Plaintiffs. Plaintiffs' names and contracts never even came up or appeared in any document during the many months of negotiation, and HGI does not dispute this fact. HGI asserts an additional "fact" that the union "did not exist at the time MJA purchased the Globetrotters in 1993," and that MJA didn't "even know any union related liabilities," but the union's relevance to ascertaining the intent of the real parties to the contracts is at the time of the Plaintiffs contracts--not when Jackson came along. Jackson intentionally deleted the union pension funding obligations in 1993. Jackson, testified he heard of the union from the "media" in the "1970s", but did not know anything about it. IV. PLAINTIFFS ARGUE THAT THE EXTINGUISHED BY BANKRUPTCY. PLAYER CONTRACTS WERE

HGI asserts "all contracts were transferred to MJA via the asset purchase agreement." There is an Order confirming rejections and a list of all executory contracts being reviewed by
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IBC, NatWest and Jackson (MJA). MJA is referenced in the May 21, 1993 Motion as having "being in negotiation with debtor." MJA directly participated in the rejection of such

Globetrotter related executory contracts as IBC's licensing deal with Transcolor (clothing sales) and IJE (computer games) (none of which incidentally utilized Plaintiffs' marks) or even references any right to use Plaintiffs' names or likenesses. The IJE licensees opposed rejection but lost. Thus, Jackson did NOT accept transfer of all contracts. There is no evidence that Jackson, MJA or HGI bought, intended to buy, or were assigned Plaintiffs' contracts. NatWest's lawyer, Nikolis, confirms that only eleven player contracts were scheduled, and NatWest's Horton, said the subject of Plaintiffs on their contracts never came up. V. OLD PUBLICITY RIGHTS PROVISIONS PURPORTED TO BE "PERPETUAL" The existence in the business world of such an overreaching and unconscionable provision as HGI'S "standard" 12(a) is rare. The brazen attempt to enforce it against old retired basketball players for profit shocks the conscience, especially in light of the utter failure of consideration, and the inadequacy of legal advice. Plaintiffs signed their contracts, they had no individual bargaining power. Thornton was terminated with no notice even though he was the union president. The Globetrotters didn't allow lawyers or agents for most players. · Arizona Law: Arizona has a statutory provision which contains the UCC language

on unconscionability. See A.R.S. §47-2302. . Section 208 of the Restatement of Contracts states that "if a contract or term thereof is unconscionable at the time the contract is made a court may refuse to enforce the contract, or may enforce the remainder of the contract without the unconscionable term, or may so limit the
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application of any unconscionable term as to avoid any unconscionable result." Some types of terms are not enforced, regardless of context; (i.e. provisions for unreasonably large liquidated damages). See Uniform Commercial Code §§ 2-718, 9-501(3). VI. PERSONAL LIABILITY OF MANNIE AND CATHERINE JACKSON. A corporate officer or director is, in general, personally liable for all torts which he authorizes or directs or in which he participates, notwithstanding that he acted as an agent of the corporation and not on his own behalf. Coastal Abstract Serv. Inc. v. First Am. Title Ins. Co., 173 F.3d 725, 734 (9th Cir. 1999)(quoting Transgo, Inc. v. Ajac Transmission Parts Corp., 768 F.2d 1001, 1021 (9th Cir. 1985)). Due to the assertions and personal promises of Mannie Jackson, GTFM believed that HGI owned the rights to use Plaintiffs' names and likenesses, license those rights to GTFM, and use Plaintiffs' names and likenesses on the clothing line. Therefore, Mannie and Catherine Jackson are also personally liable for the tort of Invasion of the Right of Publicity, which Mannie Jackson directly and personally participated in perpetuating. VII. RESULTING INJURY: DAMAGES. A. Compensatory Damages. The Restatement makes it clear that the Plaintiffs may recover the portion of the Defendant's net profits that is attributable to the unauthorized use. Once the Plaintiffs establish the Defendants' sales, "the Defendants have the burden of establishing any portion of the sales that is attributable to factors other than the appropriation of the Plaintiffs' identity and any expenses properly deducted in determining net profits."
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Restatement (Third) of Unfair

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Competition §49.

All of the damages evidence will be presented at trial by GTFM

representatives who have knowledge of the sales data and styles, the Plaintiffs themselves (who personally bought some of the samples), and by Plaintiffs' investigators. Plaintiffs' have submitted a damages summary, which includes the following sections: A. "HGI Report 6/02-5/03" B. "FUBU Report 1/1/02 ­ 12/31/04" C. "Plaintiffs' Investigation" D1 and D2. "Team/Multiple Players Chart" and "FUBU Products With Names on Tags Only" E. "Individual Sales From FUBU Production" F. "FUBU Sales of Garments Bearing Hangtags and Emblems" G. "Grand Total Chart" "Japanese Sales" B. Punitive Damages. Punitive Damages are allowed in Arizona in invasion of the right of publicity cases. In Plaintiffs' complaints they asked for punitive damages, and the Defendants never challenged punitive damages in a Dispositive Motion. In Judge Campbell's order of June 27, 2006, he agrees that the Restatement is the governing law in Arizona absent any law to the contrary. As the Restatement (Third) of Unfair Competition § 49 states, "Punitive damages are ordinarily available to successful plaintiffs in right of publicity actions under the general rules applicable to the award of punitive damages in tort actions."
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In addition, in setting forth the proper elements for a claim for invasion of the right to publicity, the Pooley court adopted the elements as set forth in Eastwood v. Superior Court, 149 Cal. App.3d 409 (Cal. App. 1983). See Pooley, 89 F.Supp.2d at 1111-1112. California allows recovery of punitive damages for those who prevail in proving a claim of invasion of the right of publicity. See Clark v. America Online, Inc., 2000 U.S. Dist. LEXIS 17368 (Central D. Cal. 2000); See also Cher v. Forum International, Ltd., 692 F.2d 634, (9th Cir. 1982). Consequently, Arizona courts will follow California and recognize the right to recover punitive damages in right of publicity cases. Additionally, Lemon and Rivers contracts were governed by California law. To succeed on a punitive damages claim in Arizona, a plaintiff must prove by clear and convincing evidence that the defendant acted with the requisite "evil mind." Rodriguez v. American Cyanamid Co., 1997 U.S. App. LEXIS 13228 (9th Cir. 1997); See also Hooper v. Truly Nolen of Am., 171 Ariz. 692, 695 (Ariz. Ct. App. 1992). An evil mind may be shown by "either (1) evil actions; (2) spiteful motives; or (3) outrageous, oppressive or intolerable conduct . . ." Hooper, 171 Ariz. at 695. An "evil mind" is also shown by a defendant's intent to injure the plaintiff or when a defendant consciously pursues a course of conduct "knowing that it created a substantial risk of significant harm to others." Rodriguez v. American Cyanamid Co., 1997 U.S. App. LEXIS 13228 (9th Cir. 1997). Once a judge finds there is clear and convincing evidence of an "evil mind" that would support an award of punitive damages, the decision goes to the jury. In deciding whether punitive damages are awardable, the inquiry should be focused upon the wrongdoer's mental
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state. Bradshaw v. State Farm Mut. Auto. Ins. Co., 157 Ariz. 411, 421-423 (1988). Several factors are considered when deciding whether a defendant acted with an evil mind. Schmitz v. Aston, 197 Ariz. 264, 269 (Ariz. Ct. App. 2000). These factors include the following: (1) the reprehensibility of the defendant's conduct and the severity of the harm likely to result, (2) any harm that has occurred, (3) the duration of the misconduct, (4) the defendant's awareness of the harm or the risk of harm, and (5) any concealment of the wrongful conduct. Id.(emphasis added). An award of punitive damages can be supported by a defendant's attempt to cover-up his misconduct. Asphalt Eng'rs v. Galusha, 160 Ariz. 134, 135 (Ariz. Ct. App. 1989). This

includes pretrial conduct of the defendant during the discovery phase attempting to conceal documents evidencing the wrongdoing. Id. In Asphalt Eng'rs, the defendant

attempted to cover-up his misconduct in the pretrial phase of litigation by submitting numerous billing statements in support of his counterclaim that were incomplete and falsified. Id. In addition, the defendant attempted to cover-up the misconduct by lying about the disclosure of the billing statements. Id. This concealment during the pretrial phase supports an inference that the defendant either intentionally caused harm to the plaintiffs or consciously disregarded a substantial risk of significant harm to the plaintiffs, thus making punitive damages appropriate. Id. Based upon the evidence that will be introduced at trial, a jury may hear Plaintiffs' entitlement to punitive damages from Defendants.

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Further contested trial issues and law are set forth with more specificity in Plaintiffs' proposed Non-Model Jury Instructions. RESPECTFULLY SUBMITTED this 15th By: day of November 2006.

/s/ Clay Townsend CLAY M. TOWNSEND, ESQUIRE KEITH MITNIK, ESQUIRE Morgan & Morgan, PA Attorneys for Plaintiffs Fred Neal, Larry Rivers, Robert Hall, Dallas Thornton, Marques Haynes and James Sanders /s/ Anders Rosenquist Anders Rosenquist, Jr. Florence M. Bruemmer ROSENQUIST & ASSOCIATES Attorneys for Plaintiff Meadowlark Lemon

By:

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CERTIFICATE OF SERVICE Florence M. Bruemmer declares as follows: 1. I am and was at all times mentioned herein a citizen of the United States and a resident of Maricopa County, Arizona over the age of 18 years of age and not a party to the action or proceeding. I am an attorney with Rosenquist & Associates. 2. I hereby certify that on November 15th , 2006, a true and correct copy of the foregoing PLAINTIFFS' TRIAL BRIEF was sent by postage-prepaid first-class mail, addressed to: Edward R. Garvey Christa Westerberg Garvey McNeil & McGillivray 634 West Mail Street Suite 101 Madison, WI 53703 Attorneys for Defendants Harlem Globetrotters Int'l, Inc. and Jackson Ira Sacks, Esq. Safia A. Anand, Esq. DREIR, LLP 499 Park Avenue New York, NY 10022 Attorneys for Defendant GTFM, LLC Joel L. Herz, Esq. Law Offices of Joel L. Herz 3573 East Sunrise Drive, Suite 215 Tuscon, Arizona 85718 Telephone: (520) 529-8080 Attorneys for Defendants FUBU the Collection, LLC GTFM of Orlando, LLC d/b/a FUBU Company Store Robert W. Goldwater, III, Esq. The Goldwater Law Firm, P.C. 15333 North Pima Road, #225 Scottsdale, Arizona 85260 Attorneys for Plaintiffs Neal, Rivers, Thorton, Hall, Haynes and Sanders

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Ray K. Harris Fennemore Craig 2003 North Central Avenue Suite 2600 Phoenix, Arizona 85012-2913 Attorneys for Defendants Harlem Globetrotters Int'l, Inc., Harlem Globetrotters Int'l Foundation, and Jackson

by placing same in a properly sealed, postage prepaid envelope and depositing same in a United States Postal Service mail box. 3. I declare under the penalty of perjury under the laws of the United States that the foregoing is a true and correct. Executed this 15th day of November 2006, at Phoenix, Arizona.

/s/ Florence M. Bruemmer Florence M. Bruemmer

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