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
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 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 ) ) ) ) ) ) ) ) ) )
Case No. CV 04-0299 PHX-DGC Case No. CV 04-1023-PHX-DGC
DECLARATION OF IRA S. SACKS IN SUPPORT OF DEFENDANTS' MOTION TO STRIKE THE NEW ANALYSES OF OLIVER PHIPPS AND PLAINTIFFS' JOINT SUPPLEMENTAL DISCLOSURE STATEMENTS AND MOTION TO EXPEDITE HEARING IRA S. SACKS declares as follows under penalty of perjury pursuant to 28 U.S.C. § 1746: 1. I am a partner in the firm of Dreier LLP, attorneys for defendant
GTFM, LLC ("GTFM" or "FUBU"). I submit this declaration in support of Defendants' Motion To Strike ("Motion to Strike") the New Analyses of Oliver Phipps, dated October 27, 2006 and October 31, 2006 (the "Phipps II Analysis" and the "Phipps III Analysis")
26 27 28
and the Plaintiffs' Joint Supplemental Disclosure Statement, dated October 27, 2006 and
1
Case 2:04-cv-00299-DGC
Document 470
Filed 11/01/2006
Page 1 of 20
1 2 3
Plaintiffs' Second Joint Supplemental Disclosure Statement, dated October 31, 2006 (the "New Disclosures") and in support of Defendants' Motion to Expedite the Hearing on the Motion to Strike.
4 5 6 7 8
2.
Other than as expressly indicated below, the matters set forth herein
are based on my personal knowledge. 3. Before making this motion, I contacted Plaintiffs' counsel in an
effort to resolve this issue; however, the parties were unable to come to a resolution.
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
4.
Attached hereto as Exhibit A is a true and correct copy of Plaintiffs'
Joint Supplemental Disclosure Statement. 5. II Analysis. 6. Attached hereto as Exhibit C are true and correct copies of the Attached hereto as Exhibit B is a true and correct copy of the Phipps
additional disclosures listed in the Plaintiffs' Joint Supplemental Disclosure Statement. 7. On October 30, 2006, Defendants received a new expert report from
Plaintiffs the Phipps II Analysis increasing Plaintiffs' alleged damages from under $2 million to over $12 million and increasing the number of alleged infringing styles from nine to nearly 80, in violation of at least three Court Orders. 8. On November 1, 2006, Defendants received a further new expert
report from Plaintiffs the Phipps III Analysis adding irrelevant sales data for sales in Japan by someone other than Defendants, and "correcting" three errors in two of the over
25 26 27 28 2
40 charts submitted in the Phipps II analysis.
Case 2:04-cv-00299-DGC
Document 470
Filed 11/01/2006
Page 2 of 20
1 2 3
9.
The Phipps II and III Analyses clearly are expert reports and
admittedly attempt to correct the inaccuracies in Plaintiffs' original expert report by Sandra Abalos (the "Abalos Report"), which was precluded by the Court's June 27, 2006
4 5 6 7 8
summary judgment order (the "June 27 Order"). Plaintiffs' late service of the Phipps II and III Analyses and the New Disclosures 13 months after the close of discovery and over 14 months after the firm deadline for Plaintiffs' expert disclosures is in direct violation of several of this Court's orders and greatly prejudices Defendants' ability to try
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
this case. 10. Plaintiffs have repeatedly disregarded this Court's orders regarding
expert discovery. Plaintiffs' initial expert disclosure was served on July 22, 2005, and was found by this Court to be deficient. As a result, this Court ordered Plaintiffs to file full and complete expert disclosures by August 19, 2005, with defendants permitted to file rebuttal expert disclosures by September 16, 2005. Additionally, this Court ordered that "Plaintiffs [were] not permitted to file a rebuttal report [and that the] [l]oss of the rebuttal report w[ould] be the sanction Plaintiffs incur for their failure to comply with the Court's orders." See August 3, 2005 Order (Doc. No. 143). This Court reiterated the requirement that Plaintiffs "provide full and complete expert reports by August 19, 2005" in its August 18, 2005 Order (Doc. No. 148). 11. Plaintiffs submitted the Abalos Report on August 19, 2005. The
Abalos Report was precluded by this Court's June 27 Order for failure to include any
25 26 27 28
estimate of damages by individual Plaintiff. Moreover, this Court limited Plaintiffs' proof of damages at trial to the specific years and amounts set forth in two documents
3
Case 2:04-cv-00299-DGC
Document 470
Filed 11/01/2006
Page 3 of 20
1 2 3
referred to as the HGI Letter and the Sales Chart. June 27 Order, at 22-23. The Sales Chart was, in fact, attached as an exhibit to an affidavit by Plaintiffs' Investigator, Oliver Phipps, dated November 23, 2005, and is sometimes referred to herein as the "Phipps I
4 5 6 7 8
Analysis." The Sales Chart identified sales volumes for nine styles, and sought damages totaling slightly under $2 million. 12. Discovery in this matter closed on September 30, 2005 and this
Court ordered that drafts of pre-trial orders were to be exchanged on November 1, 2006.
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
See Orders, dated April 8, 2005 and July 26, 2006. On October 30, 2006, more than 14 months after Plaintiffs' expert disclosures were due, 13 months after the close of discovery and on the eve of the exchange of draft pretrial orders, Defendants received the first of Plaintiffs' New Disclosures, which included the Phipps II Analysis. Two days later, on November 1, 2006, Defendants received the second of Plaintiffs' New Disclosures, which included the Phipps III Analysis. Plaintiffs' late service of the Phipps II and III Analyses and the New Disclosures is in direct violation of at least three of this Court's orders and greatly prejudices Defendants' ability to try this case. 13. The Motion to Strike must be granted, and on an expedited basis,
because this Court's July 26, 2006 Order (the "July 26 Order"), requires the parties to file a joint Proposed Final Pretrial Order by 4:00 p.m. on November 15, 2006 and explains that the "Court will not allow the parties to offer any exhibit, witness, or other evidence that was not disclosed in accordance with the provision of this Order ...except to prevent
25 26 27 28
manifest injustice." See July 26 Order ¶¶ 2, 4. If the Phipps II and III Analyses are not precluded, Defendants will not have sufficient time to properly analyze and respond to
4
Case 2:04-cv-00299-DGC
Document 470
Filed 11/01/2006
Page 4 of 20
1 2 3
the Phipps II and III Analyses, much less include responsive exhibits in the joint Proposed Pretrial Order. For example, in response to the Phipps I Analysis and this Court's June 27 Order, Defendants did a style-by-style and Plaintiff-by-Plaintiff cost and
4 5 6 7 8
profit analysis, included in our proposed trial exhibits. That analysis took over two months to accomplish. One can only imagine how long it will take to include 69
additional styles in such an analysis. 14. As explained above, pursuant to this Court's August 3, 2005 and
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
August 18, 2005 Orders, Plaintiffs were required to serve full and complete expert disclosures by August 19, 2005 and were not permitted to supplement those disclosures (as a sanction for disobedience with prior Court orders). The Phipps II and III Analyses are additional and supplemental expert disclosures in violation of those Orders. 15. This Court also has held that Plaintiffs proof of damages in this
action would be limited because Plaintiffs' prior expert, Ms. Abalos, did not determine damages by individual Plaintiff. Thus, this Court precluded Plaintiffs' Abalos Report and testimony, and further found that damages in this case will be limited to "the specific years and amounts addressed in [two] documents", defined and referred to in the June 27 Order as the HGI Letter and Sales Chart, subject to further evidentiary objections by Defendants at trial. See June 27 Order at 22-23, n. 12. This Court further prohibited the Plaintiffs from using the HGI Letter and Sales Chart to extrapolate individual damages from their expert's aggregate numbers or ask the jury to do so. June 27 Order at 23.
25 26 27 28
16.
The HGI Letter and Sales Chart reference sales amounts for just nine
styles of the apparel: H3002; HGB3002; H3305; H3335; H3345; H3347; H3351; H3352;
5
Case 2:04-cv-00299-DGC
Document 470
Filed 11/01/2006
Page 5 of 20
1 2 3
and H8501.1 The Sales Chart the Phipps I Analysis seeks damages by setting forth amounts of sales of those nine styles in the approximate amount of $2 million. In violation of the June 27 Order, the Phipps II Analysis adds nearly 70 new styles for a
4 5 6 7 8
total of 78 styles and sets forth amounts of sales totaling $12 million, six times the amount set forth in the Sales Chart.2 The Phipps III Analysis adds another $1 million in alleged damages for Lemon and $92,000 for Japanese sales. 17. The Phipps II and III Analyses and the New Disclosures are not only
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
1
in violation of Court Orders, they are also highly prejudicial to Defendants.3 On Monday, October 30, 2006, Defendants received the New Disclosures, which included the Phipps II Analysis. The untimely New Disclosures and Phipps II Analysis were proffered as a prelude to including the Phipps II Analysis on Plaintiffs' list of trial exhibits, which they did that same day, October 30, 2006. Two days later, on November 1, 2006, Defendants received the second of Plaintiffs' New Disclosures, which included the Phipps III Analysis. Defendants have no ability to timely respond to the Phipps II and III Analyses. Defendants cannot prepare responsive analyses before November 15,
One of the styles listed in the Sales Chart (the Phipps I Analysis), Style H3003, does not
exist.
2
The amount set forth in the HGI Letter was lower and for fewer styles than the Sales
Chart.
3
This is not the first time Defendants have moved to strike Plaintiffs untimely disclosures. Indeed, throughout this litigation, Plaintiffs have violated the rules of this Court and the Federal Rules of Civil Procedure by submitting additional untimely disclosures revealing new documents, new witnesses and new affidavits throughout the summary judgment briefing and argument process, adding new materials up to a few weeks before the oral argument. 6
Case 2:04-cv-00299-DGC
Document 470
Filed 11/01/2006
Page 6 of 20
1 2 3
2006. Defendants have had no opportunity to prepare responsive expert materials. Defendants have had no opportunity to depose Mr. Phipps on his analyses. Due process requires the exclusion of the New Disclosures and Phipps II and III Analyses, or
4 5 6 7 8
reopening of expert discovery. 18. Plaintiffs offer no justification for the failure to disclose the Phipps
II and III Analyses earlier. Much, if not all, of the information set forth in the Phipps II and III Analyses could have been done by Ms. Abalos, Plaintiffs' original expert, but was
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
not. Plaintiffs now seek to correct that by submitting a new expert report in the form of an investigator's affidavit as part of untimely supplemental disclosures. Why it took Plaintiffs 13 months to disclose the Phipps II and III Analyses and the New Disclosures is a mystery. All that is clear is that Plaintiffs are once again attempting to sandbag Defendants at the last minute and are in violation of this Court's previous Orders. 19. The Phipps II and III Analyses do far more than summarize
voluminous data. The Phipps II Analysis has Schedules A through G for each of the seven Plaintiffs. Schedules A and B repeat the HGI Letter and Sales Chart data. Schedules C through G, however, repeatedly correct the errors and omissions in the Abalos Report for each of the seven Plaintiffs. The Phipps III Analysis adds sales by a Japanese licensee to claimed damages in the amount of $92,000 and corrects three errors in Schedule E for Lemon, adding another $1 million in claimed damages. 20. To summarize some of what the Phipps II Analysis does to correct
25 26 27 28
the Abalos report: (i) on Schedules C for each of seven Plaintiffs, it allocates sales for each player number included in particular styles, by dividing total sales by the number of
7
Case 2:04-cv-00299-DGC
Document 470
Filed 11/01/2006
Page 7 of 20
1 2 3
player numbers in the style (as suggested by GTFM in criticizing the Abalos Report); (ii) on Schedules C for each of five Plaintiffs, it allocates sales for styles listing nine former players on the garment itself, by dividing total sales by nine and adding that allocation to
4 5 6 7 8
certain Plaintiffs; (iii) on Schedules D(1) for each of seven Plaintiffs, it allocates sales for styles that Mr. Phipps omitted in his Phipps I Analysis, by dividing total sales for each style by nine and adding that allocation to each Plaintiff; (iv) on Schedules D(2) for each of seven Plaintiffs, it assumes without any basis in fact that all sales of the styles
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
listed had hangtags listing nine former players, and allocates sales for those styles, by dividing total sales by nine and adding that allocation to each Plaintiff; (v) on Schedule E for certain Plaintiffs, it allocates sales for each player number used on particular styles, by dividing total sales by the number of player numbers in the style (as suggested by GTFM in criticizing the Abalos Report); and (vi) on Schedule F for each of seven Plaintiffs, it assumes without basis in fact that that all sales of the styles listed had hangtags listing nine former players, and allocates sales for those styles, by dividing total sales by nine and adding that allocation to each Plaintiff. 21. The Phipps III Analysis allocates sales in Japan among Plaintiffs by
allocating sales of styles among the number of players' names or numbers set forth on the styles, by dividing total sales by the number of players' names or numbers used in the style. It does so despite the fact that GTFM and HGI did not sell in Japan. Rather, as Plaintiffs well know, the Japanese sales were by a licensee and GTFM only received a
25 26 27 28 8
royalty, and not sales revenues.
Case 2:04-cv-00299-DGC
Document 470
Filed 11/01/2006
Page 8 of 20
1 2 3
22.
The Phipps III Analysis also corrects three errors in one of the
Lemon Charts in the Phipps II Analysis, by adding in sales for Styles 3002 and 3347, and allocating a one-half share of style 5501. In so doing, it double counts revenues already
4 5 6 7 8
included in another of the Lemon charts. 23. Thus, the Phipps II and III Analyses are not a summary of data. To
the contrary, they are allocations fraught with assumptions and calculations of the very type Ms. Abalos could have done and did not. Indeed, as Mr. Phipps admitted, he
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
4
"utilize[ed] FUBU's methodology outlined in their Reply brief [on the motion to strike the Abalos Report] in order to breakdown style numbers and reported sales by individual player. Phipps 10/27/06 Aff. ¶ 15. Mr. Phipps went on to explain that "[t]he methodology utilized is as such (excerpt taken from FUBU's Reply brief Doc #228, page 5-6): GTFM produced data that reliably quantified sales. Although GTFM did not specifically track the sales of styles by individual Plaintiffs names and/or numbers, Ms. Abalos could have reasonably calculated or estimated sales by individual plaintiff based on GTFM's document production. She chose not to do so. For example, for some styles, the alleged players' numbers were actually shown in the sales detail reports produced by GTFM.4 Ms. Abalos ignored that detail. For some styles, the players' names were used on different color garments, and sales by specific plaintiff could have been tallied from the produced sales detail for each color.5 Ms. Abalos ignored that detail. For some styles, sales could have been allocated among plaintiffs and non-plaintiffs, and Plaintiffs could have
For example, Style H3352 (Sacks Decl. Ex. J) identified sales by player's numbers.
5
For example, the CAD for Style H3351 (Sacks Decl. Ex. K) illustrates that there are seven players involved only 5 of which are plaintiffs each related to a different color. The sales for each individual color are clearly listed in the Sales Detail Report (Sacks Decl. Ex. L). Ms. Abalos could have used that data to exclude sales of non-plaintiffs and could have used that data to divided sales by individual plaintiff. She did not do so. 9
Case 2:04-cv-00299-DGC
Document 470
Filed 11/01/2006
Page 9 of 20
1 2 3
only sought to recover profits for that portion of sales fairly attributable to plaintiffs.6 Ms. Abalos ignored that detail. [footnotes renumbered from the original] Id.
4 5 6 7 8
24.
Plaintiffs' failure to submit the Phipps II and III Analyses as an
expert report in August 2005 impacted the way Defendants chose to litigate this case. 25. To date, Defendants have done a cost and profit analysis on the nine
styles at issue as per the June 27 Order, all of which were referenced in the HGI Letter
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
6
and the Sales Chart. This analysis took Defendants two month to complete. If the Phipps II and III Analyses are not precluded, Defendants need sufficient time to redo their cost and profit calculations to include the additional 69 styles that were added in the Phipps II and III Analyses. 26. Indeed, if the Phipps II and III Analyses had been submitted in
August 2005 instead of the deficient Abalos Report, GTFM would have retained a rebuttal expert (which it did not do with respect to Ms. Abalos because of the nature of her analysis); would have done a survey regarding the marketing impact of hangtags (which it did not do because no damages were sought regarding hangtags in the Abalos Report); and would have taken the deposition of Mr. Phipps regarding his analyses (as it did with Ms. Abalos).
For example, 4 nicknames were used on Style #P266FJ (Sacks Decl., Ex. M) three plaintiffs and one non-plaintiff. Instead of allocating the total sales among the 4 players, and only seeking to recover profits for the 3 plaintiffs, Ms. Abalos sought to recover profits for all sales, including the non-plaintiff. 10
Case 2:04-cv-00299-DGC
Document 470
Filed 11/01/2006
Page 10 of 20
1 2 3
27.
If the Court does not preclude the Phipps II and III Analyses,
Defendants will need expert discovery to be reopened so that Defendants have an ample opportunity to hire an expert to analyze the Phipps II and III Analyses, do a market
4 5 6 7 8
survey regarding the effects of hangtags, redo their cost and profit calculations to include the additional 69 styles and information set forth in the Phipps II and III Analyses, take expert discovery of Mr. Phipps and submit a responsive expert report, all of which will be extremely expensive and time consuming for all of the parties involved. Due process
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
requires no less. 28. The Phipps II and III Analyses are expert reports that attempt to give
the illusion of accuracy. However, Defendants' cursory review of the analyses without any discovery or expert assistance reveals the Phipps II and III Analyses are filled with inaccuracies. Below is a summary of the Phipps II and III Analyses and some of the errors. The Phipps Affidavit 29. Mr. Phipps admits in his October 27, 2006 affidavit that he has
supplemented his prior Ex. 13A, the Schedule of Merchandise, because of ongoing sales in the marketplace. Pursuant to this Court's June 27 Order, Schedule 13A is not one of the documents that is to be considered in determining damages at trial. See June 27 Order at 22-23, n. 12. Moreover, Mr. Phipps falsely claims that there were late
productions by FUBU that disclosed Japanese and European sales, and that he had
25 26 27 28
insufficient time to review these productions prior to his deposition (Exhibit B, ¶7). Indeed, Mr. Phipps said that he planned on submitting yet another analysis to include
11
Case 2:04-cv-00299-DGC
Document 470
Filed 11/01/2006
Page 11 of 20
1 2 3
Japanese sales. Analysis. 30.
See Exhibit B, ¶18. That was done two days later, in the Phipps III
This alleged inability to previously include these numbers is
4 5 6 7 8
baseless.
Ms. Abalos included the Japanese sales in her expert report, which was
submitted August 19, 2005. Moreover, Mr. Phipps completely misses the fact that the Japanese data was for the Japanese licensee, not for a separate customer in Japan. See Exhibit B, ¶18. And what do sales in Japan by a Japanese licensee have to do with an
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
alleged tort in Arizona? Exhibit A to the Phipps Affidavit 31. Exhibit A to the Phipps 10/27/06 Affidavit is an updated version of
Plaintiffs' Ex. 13A to their summary judgment pleadings, a document which was not to be included in the damage analysis pursuant to the Court's June 27 Order. Thus, it is just another attempt by Plaintiffs to offer information into evidence that has already been rejected by this Court. Moreover, Exhibit A includes several inconsistencies. For
example, (i) Items 41-45 lists styles from the Philippines or Thailand that have no names on the garments other than on the labels and no foundation for admission; (ii) Items 14 and 48 are included even though they have the name Geese (a non-Plaintiff) and none of the Plaintiffs' names or numbers; (iii) Items 122-125 are not Harlem Globetrotters merchandise, rather they are FUBU 05 or other FUBU product; (iv) Items 114-125 were included in the Phipps I Analysis with no damage amounts sought; (v) most of the items
25 26 27 28
added in 10/06 did not have players' names on them, only numbers and Plaintiffs are not entitled to damages on such styles since they do not use Plaintiffs' identities; (vi) the only
12
Case 2:04-cv-00299-DGC
Document 470
Filed 11/01/2006
Page 12 of 20
1 2 3
sales in Arizona were for Lemon's purchases; and (vii) of the 133 items listed, only 54 have players' nicknames on them, eleven of which have two names, and nine have one or more caricatures with no proof that a single consumer identified the caricature with a
4 5 6 7 8
Plaintiff. Thus, Exhibit A is entirely misleading and Defendants would be prejudiced if the exhibit is entered into evidence. 32. Each of the seven Plaintiffs has a series of Charts "A" thru "G" in
the Phipps II Analysis, the last of which is a summary of damages. Those charts are
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
delusive and/or baseless. 33. The "B" Charts attached for each Plaintiff in the Phipps II Analysis
are deceptive. For instance, in Chart B for Marques Haynes, which is illustrative of all of the charts, Mr. Phipps has mislabeled the chart "FUBU Report." These numbers are not from a FUBU Report; rather they are taken from the original Phipps I Analysis (the Sales Chart). Second, the Notes column makes it appear that the numbers therein were not available until September 29, 2005. This is false. GTFM produced the sales detail reports and CADS for these styles on January 7, 2005. In fact, GTFM produced very few documents at the end of discovery, only 49 pages out of the 1690 pages that were produced all together. Plaintiffs are attempting to mislead this Court and the jury. The "C" Charts in the Phipps II Analysis Could Have Been Done Long Ago 34. The "C" charts for each Plaintiff in the Phipps II Analysis could
have been done long ago. What is more, many of the Plaintiffs' "C" charts include an
25 26 27 28
entire section that is based on speculation, and there is no reason that Mr. Phipps needed to wait until October 2006 13 months after the discovery cutoff to calculate these
13
Case 2:04-cv-00299-DGC
Document 470
Filed 11/01/2006
Page 13 of 20
1 2 3
numbers. The original Phipps I Analysis (the Sales Chart, attached hereto as Exhibit D) includes a Plaintiffs' Investigation column with no damage numbers. These styles were included in Ms. Abalos' report and she could have done a damage analysis for these
4 5 6 7 8
styles; however, she did not. For a list of the styles set forth in the Abalos Report, see Exhibit G attached hereto. 35. The majority of the styles set forth in the Plaintiffs' Investigation
column in the Sales Chart were women's styles for which Ms. Abalos and Mr. Phipps
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
could have done a damage analysis for long ago (well before the close of discovery). Each "C" Chart states that the number "was calculated by dividing total sales by number of players that appear on garment." That is what Mr. Phipps did, but it is an incorrect calculation. As Plaintiffs are well aware, Jordache was a licensee of GTFM.7 GTFM
received a royalty of 15% of Jordache sales, a point recognized by Ms. Abalos in her report. Thus, Mr. Phipps is overestimating Plaintiffs damages in the "C" charts. 36. Mr. Phipps made the same error in the Japanese sales chart included
in the Phipps III Analysis: he included all sales, and not just the royalties the revenues received by GTFM. Moreover, sales in Japan have nothing whatsoever to do with a tort claim in Arizona. The "D1" and "D2" Charts in the Phipps II Analysis Are Not Ground In Fact 37. Charts "D1" and "D2" for each Plaintiff in the Phipps II Analysis
calculate the revenues that Plaintiffs believe each plaintiff deserves as damages based on
25 26 27 28
7
Despite that, Plaintiffs sought no discovery from Jordache. That is not Defendants' fault.
14
Case 2:04-cv-00299-DGC
Document 470
Filed 11/01/2006
Page 14 of 20
1 2 3
the use of some of the Plaintiffs' names on a list of "Legends" that was used on some garments and some hangtags. Pictures of the Legends hangtags are attached as Exhibit I hereto.
4 5 6 7 8
38.
First, the notion that any consumer buys a garment not for what is on
the garment or its quality, color or price, but instead because of a hangtag, makes no sense. The "D(1)" and "D(2)" Charts are based on that precise assumption. Plaintiffs argue that the use of their names on hangtags entitles them to additional damages, even
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
though Plaintiffs have no evidence as to the number of garments which had these specific hangtags, or whether any consumer bought any garment because of a hangtag. Second, Mr. Phipps merely divides total sales of these styles by nine because there are nine listed legends, only six of whom are Plaintiffs in this action. Furthermore, despite that fact that Marques Haynes is not listed as a legend and Mr. Phipps admits this in Chart "F", Mr. Phipps allocates damages to Haynes in Charts "D1" and "D2" as a result of the legends list. 39. Additionally, as noted above, Chart "D1" assumes without
foundation that consumers bought these styles equally because of the various legends listed on the hangtags or the shirts themselves. Moreover, Chart "D1" lists that the player's name was listed on the tag for many of these styles, but then in the notes on the chart it says "missing tag". Thus, Mr. Phipps is assuming that all of the garments in that style had the hangtag with no basis. That is true, for example, for Styles PT15882SHS,
25 26 27 28 15
HGB2003LS, HGB3000S and HGB2375LS for Haynes alone.
Case 2:04-cv-00299-DGC
Document 470
Filed 11/01/2006
Page 15 of 20
1 2 3
40.
As also noted above, Chart "D2" for each Plaintiff is deceptive
because no consumer would buy a shirt solely because of a hangtag. Yet Mr. Phipps allocates $101,435 to each plaintiff as a result of the hangtags, including Marques
4 5 6 7 8
Haynes, who Mr. Phipps admits is not listed as a legend. The "E" and "F" Charts in the Phipps II Analysis Could Have Been Done Long Ago 41. There is absolutely no reason why the "E" Charts could not have
been done along with the original Sales Chart. For example, the Sanders Chart "E" is
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
illustrative: it lists the damages for Sanders for Style H3335. The sales detail reports for this style were produced as early as February 4, 2005. The fact that Mr. Phipps did not include the styles included on Chart "E" in his original Sales Chart was a result of his own mistake and not a basis for Plaintiffs to be able to supplement the sales chart now. 42. The same is true with respect to the "F" Charts. All of the
information listed in the chart was produced before the discovery cutoff, over thirteen months ago, and the sales information for many of the styles was produced as early as January 2005, i.e. Styles 81P401SJ, 85P576FJ, 81P565SJ02B and H3351, and the sales information for several of the other styles was produced well before the September 30 cutoff date. 43. Chart "F" also suggests that consumers bought Style 3351 which
had Meadowlark and 36 on it because of the legends hangtag. As a result, Mr. Phipps adds $637,775 divided by 9 (or $70,863.89) to each Plaintiff's damages. That is an
25 26 27 28
absurd assumption and also allocates damages to Lemon twice for the same style. Finally, as noted above, Mr. Phipps once again gives Haynes credit for being on the
16
Case 2:04-cv-00299-DGC
Document 470
Filed 11/01/2006
Page 16 of 20
1 2 3
legends hangtags and shirts, even though he states in Chart "F" that "`Legends' Include All Plaintiffs' Names and Number Except Marques Haynes". 44. Attached hereto as Exhibit D is a true and correct copy of the
4 5 6 7 8
original Phipps Sales Chart -- the Phipps I Analysis. 45. Attached hereto as Exhibit E is a true and correct copy of a chart
setting forth the additional styles included in the Phipps II Analysis. 46. Attached hereto as Exhibit F is a true and correct copy of a chart
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
setting forth the differences in the amount of damages sought in the Abalos Report, the HGI Letter, the Sales Chart and the Phipps II Analysis. 47. Attached hereto as Exhibit G is a true and correct copy of a chart
setting forth the styles listed in the Abalos Report. 48. Attached hereto as Exhibit H is a true and correct copy of a chart
setting forth the styles at issue in the HGI Letter, the Sales Chart and the Phipps II Analysis. 49. Attached hereto as Exhibit I are true and correct copies of the
Legends hangtags, previously attached as Schedule N to the Abalos Report. 50. Attached hereto as Exhibit J is a true and correct copy of
Defendants' Exhibit #1094, charts showing LDP Percentage on a Total Sales Basis and LDP Percentage on a Per Unit Basis. 51. Attached hereto as Exhibit K is a true and correct copy of
25 26 27 28 17
Defendants' Exhibit #1095, a chart entitled "Sales and Net Profit Analysis by Player".
Case 2:04-cv-00299-DGC
Document 470
Filed 11/01/2006
Page 17 of 20
1 2 3
52.
Attached hereto as Exhibit L is a true and correct copy of
Defendants' Exhibit #1096, a chart entitled "Maximum Profits by Plaintiff, Taking Into Account Causation".
4 5 6 7 8
53.
Attached hereto as Exhibit M is a true and correct copy of Plaintiffs'
Second Joint Supplemental Disclosure Statement, dated October 31, 2006. 54. Attached hereto as Exhibit N is a true and correct copy of the
Affidavit of Oliver Phipps, dated October 31, 2006 (the Phipps III Analysis).
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18
I declare under penalty of perjury that the foregoing is true and correct. Dated: New York, New York November 1, 2006 ____/s/ Ira S. Sacks___________ Ira S. Sacks
Case 2:04-cv-00299-DGC
Document 470
Filed 11/01/2006
Page 18 of 20
Case 2:04-cv-00299-DGC
Document 470
Filed 11/01/2006
Page 19 of 20
Case 2:04-cv-00299-DGC
Document 470
Filed 11/01/2006
Page 20 of 20