Free Response to Motion - 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' Inc., l, Harlem Globetrotters International Foundation, Inc., and Mannie L. & Catherine Jackson UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA No. CV-04-0299 PHX DGC and CV-04-1023 PHX DGC RESPONSE TO MOTION TO DETERMINE CONFLICT OF INTEREST

13 MEADOWLARK LEMON, et al., 14

Plaintiffs, vs. HARLEM GLOBETROTTERS

15 16 INTERNATIONAL, INC., et al.; 17

Defendants. INTERNATIONAL, INC., an Arizona Counterclaimant, vs. MEADOWLARK LEMON, a married man, Counterdefendant.

18 HARLEM GLOBETROTTERS 19 corporation, 20 21 22 23 24 25 26

Plaintiffs seek to disqualify counsel from representing both Harlem Globetrotters International, Inc. ("HGI") and its president Mannie Jackson at the settlement conference in this action. Mr. Jackson is CEO and Chairman of the Board of HGI. Plaintiffs offer no explanation
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of how the interest of Mr. Jackson and HGI diverge. ER1.7 provides that a lawyer shall not represent a client it the representation involves a concurrent conflict of interest unless there is informed consent confirmed in writing. A concurrent conflict of interest exists if: 1. The representation of one client will be directly adverse to another client; or 2. There is a significant risk that the representation of one or more clients will be materially limited by the lawyer' s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer. ER 1.7(a). There is no direct adversity, nor is there a risk that representation of Mr. Jackson will limit representation of HGI or vice versa. Both clients have common interest in either upholding the validity of the Player contracts (granting rights of publicity to the predecessor of HGI) or limiting any damages resulting from the FUBU Agreement.1 Indeed, ER 1.13 specifically provides A lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents. ER 1.13(a). A lawyer representing an organization may also represent any of its directors, officers, employees, members, shareholders or other constituents, subject to the provisions of ER1.7. Id. ER 1.13(e). The organization' interests are not adverse to those of Mr. Jackson with whom s the lawyers are dealing. ER 1.13(d). Background When this action was commenced, Defendant Mannie Jackson owned all of the stock in Defendant Harlem Globetrotters, Inc. (an Arizona corporation). In September 2005 two

transactions occurred. First, Mr. Jackson sold 80% of his stock to an outside investment group. Mr. Jackson remained CEO and Chairman of the Board of the corporation and still holds 20% of the outstanding stock. As reflected in the transaction documents, the existence of this litigation
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The parties are not discussing an aggregate settlement; therefore, ER 1.8(g) has no application.

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was disclosed. The transaction documents were produced to opposing counsel in October 2005. In addition, the transaction was discussed with Judge Campbell and Defendants assured the Court that the transaction would not delay the litigation, require new counsel or result in the assertion of any new defenses. At the same time the Arizona corporation was merged into a Nevada corporation. The parties have stipulated to substitute the Nevada corporation for the Arizona corporation. Again, the merger was disclosed to Judge Campbell and does not result in any delay, substitution of counsel or assertion of new defenses. Analysis The identity of the shareholders of the corporate defendant is not material to any claim asserted in this action. The conduct giving rise to the asserted liability occurred prior to these transactions in September 2005. Likewise, the existence of an indemnity provision in the transaction documents (again, a provision disclosed to Defendants almost one year ago) does not give rise to a "significant risk that the representation of one or more clients will be materially limited by the lawyer' s responsibilities to another client." The Fennemore Craig and Garvey McNeil & McGillivray law firms have never represented the outside investment group and have represented the corporate Defendant and Mannie Jackson as contemplated by the applicable ethical rules. Both before and after the September 2005 transactions, Mannie Jackson, as a constituent of the corporate organization client (under the terms of ER 1.13) has made decisions for the corporation in connection with the litigation. The transaction documents provide Harlem

Globetrotters International, Inc., a Nevada corporation (the "Company") "shall control the defense of the Alumni Litigation". Section 5.2(d)(iii). Mr. Jackson is the appropriate authorized representative to participate in the settlement conference and has full authority to settle the case. In Re Ireland, 146 Ariz. 340, 706 P.2d 352 (1982) is inapposite. In that case the attorney attempted to represent both a group of incorporators and an individual incorporator. The

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representation of the individual incorporator included defending an action involving the property to be contributed to the corporation, and receipt of funds drawn on a corporate account to pay personal obligations. These matters adversely affected the ability to represent the incorporators as a group. No such conflict exists here and Mr. Jackson has full authority to settle any claims against him personally or any claims against the corporation that have been asserted by the Plaintiffs. Similarly in Pitman v. Brinker International, Inc., 216 F.R.D. 481 (D. Ariz. 2003), sanctions were imposed for failure to ensure the participation of a representative of a party' s insurer. Here there is no insurance applicable to the claims asserted against HGI and Jackson. Perhaps the indemnity agreement could be considered analogous to an insurance agreement; however, Mr. Jackson is again the appropriate participant in any settlement relating to the indemnity obligation of HGI. Again, there is no conflict on issues of either liability or damages related to the Plaintiffs' claims. Mr. Jackson will be present at the settlement conference with full authority to settle on behalf of HGI and himself. To date Plaintiffs have not offered any settlement proposal other than payment of money. No conflict exists with regard to defense of Plaintiffs' claims. Plaintiffs have not proposed any "alternative resolutions" as suggested in the motion to disqualify and have not articulated any conflict of interest between Mannie Jackson and HGI. RESPECTFULLY SUBMITTED this 5th day of September, 2006.

By: s/Ray K. Harris_______________ Ray K. Harris FENNEMORE CRAIG, P.C. 3003 N. Central Ave., Suite 2600 Phoenix, AZ 85012-2913 Attorneys for Defendants Harlem Globetrotters Int' Inc. and Harlem l, Globetrotters Int' Foundation l Mannie L. & Catherine Jackson

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Edward R. Garvey GARVEY McNEIL & McGILLIVRAY 634 W. Main St. #101 Madison, WI 53703 Attorneys for Defendants Harlem Globetrotters Int' Inc. and Harlem l, Globetrotters Int' Foundation l Mannie L. & Catherine Jackson CERTIFICATE OF SERVICE 1. I hereby certify that on September 5, 2006, a true and correct copy of the attached document was electronically transmitted to the Clerk' Office using the CM/ECF System for s filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Edward R. Garvey ­ [email protected] Safia A. Anand ­ [email protected] Florence M. Bruemmer ­ [email protected] Joel Louis Herz ­ [email protected] Ira S. Sacks ­ [email protected] Anders Rosenquist, Jr. ­ [email protected] Clay Townsend ­ [email protected] Robert W. Goldwater, III ­ [email protected] 2. I hereby certify that on September 5, 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 Colling & Gilbert PA 20 N. Orange Ave., Suite 1600 Orlando, FL 32802 Brandon Scott Peters Goldwater Law Firm 15333 N Pima Rd, Ste 225 Scottsdale, AZ 85260 3. I hereby certify that on September 5, 2006, I emailed a copy of the attached document to: Honorable David Campbell: [email protected] Arizona District Court
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Honorable Lawrence Anderson: [email protected] Arizona District Court s/Melody Tolliver

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