Free Reply to Response to Motion - District Court of Arizona - Arizona

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Morgan & Morgan, P. A.th 20 N. Orange Avenue, 16 Floor Orlando, FL 32801 Clay M. Townsend, Esquire Bar No.: 023414 Brandon S. Peters, Esquire Bar No.: 022641 Keith R. Mitnik, Esquire Bar No.: 436127 Attorneys for Neal Plaintiffs UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA MEADOWLARK LEMON, a married man, Plaintiff, vs. NEAL PLAINTIFFS' REPLY TO DEFENDANTS' JOINT RESPONSE TO PLAINTIFFS' MOTION FOR LEAVE TO ANSWER THE COURT'S REQUEST FOR EVIDENCE LOCATION Case Nos.: CV 04 0299 PHX DGC and CV-04-1023 PHX DGC

HARLEM GLOBETROTTERS 11 INTERNATIONAL, INC., et al.; 12 Defendants.

13 FRED "CURLY" NEAL, et al. 14 15 vs. Plaintiffs,

HARLEM GLOBETROTTERS 16 INTERNATIONAL, INC., et al.; 17 Defendants. HARLEM GLOBETROTTERS 18 INTERNATIONAL, INC., an Arizona corporation, 19 Counter-claimant, 20 vs. 21 MEADOWLARK LEMON, a married man, 22 23 24 25 Hall, Marques Haynes, and James "Twiggy" Sanders (collectively referred to as "Plaintiffs"), hereby file their 26 Reply to Defendants Harlem Globetrotters International, Inc., Harlem Globetrotters International Foundation, Inc., Mannie L. Jackson and Catherine Jackson's (collectively referred to as the "HGI
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Counter-defendant. NEAL PLAINTIFFS' REPLY Plaintiffs, Fred "Curly" Neal, Larry "Gator" Rivers, Dallas "Big D" Thornton, Robert "Showboat"

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Defendants") and Defendant GTFM, LLC (collectively referred to as "FUBU" )(the HGI Defendants and FUBU Defendants are collectively referred to as "Defendants") Joint Response to Plaintiffs' Motion for Leave to Answer the Court's Request for Evidence Location and state as follows: INTRODUCTION The issue of Plaintiffs' expert using an aggregate number rather than separating the damages to individual plaintiffs was limited almost exclusively to Defendants' Motion to Strike Plaintiffs' Expert Report

7 8 9 10 11 12 13 14 15 16 17 Defendants' Motions for Summary Judgment to mandate counter argument in Plaintiffs' Response. Thus, 18 19 20 21 22 23 24 25 26 27 28
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as opposed to the Motions for Summary Judgment. The aggregate versus individual damages argument was not identified in HGI'S Motion for Summary Judgment. It was not raised in the "Argument" section of FUBU'S Motion for Summary Judgment. In FUBU'S Motion for Summary Judgment, there was only a passing reference in the "undisputed facts" section (lumped in with a laundry list of bullet points) which stated, "It does not analyze plaintiffs' alleged damages by individual plaintiff, but only in its aggregate." That was the only mention in FUBU'S initial Motion for Summary Judgment. Significantly, this

"undisputed fact" was not argued in the argument section as a ground for summary judgment. FUBU then gave the issue mention in one sentence and an accompanying footnote in its Reply, to which Plaintiffs was not afforded a response. The aggregate damage argument simply was not identified sufficiently in

in fairness, how viable are Defendants' protests regarding the lack of responsive briefing on that issue? The reason the percentage method (for converting Plaintiffs' expert's aggregate conclusion) was not briefed in response to the Motion to Strike Plaintiff's Expert is a different matter and is discussed below. However, as to the Motions for Summary Judgment, Defendants' motions did not argue that point, consequently, they did not mandate counter-argument in the written response. At least, Defendants' lack of attention to the issue in their Motions for Summary Judgment is such that they should not be allowed to summarily escape all accountability by arguing the lack of written response, particularly not when record evidence clearly exists that is sufficient to defeat summary judgment on that point.

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It should be noted, the issue of applying percentages to the expert's aggregate number is only one of two methods available for proving individual damages. The other method requires no such extrapolation and does not involve the expert at all. Only the percentage method is the subject of criticism for not being delineated in Plaintiffs' Responses to the summary judgment motions. The other method (the one which does not utilize application of percentages) uses infringing sales figures that could be calculated specifically by individual player sales from information gathered independent

7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Plaintiffs. These numbers are separate and apart from the expert's gross damage calculations and prove the 23 24 25 26 27 28
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of the expert by Plaintiffs and their investigator, that require no percentage application and no expert testimony. Evidence of this method was filed specifically in response to the Motion for Summary Judgment in the form of Exhibit 13 (including 13, 13A and 13D) which were referred to extensively in response to the Motions for Summary Judgment. For example: "Plaintiffs have located, verified, and scheduled infringing garments after a limited investigation. There are numerous exhibits. (Exhibit 13, Phipps Affidavit, and the Schedule of Merchandise-A)." (Plaintiffs' Statement of Facts in Support of Plaintiffs' Response in Opposition to Defendants' Motion for Partial Summary Judgment, Doc. #281), and For further specific citation of Exhibit 13 see Plaintiffs' Declaration of Counsel (Doc. # 420). Plaintiffs' Exhibit 13D was never contraverted by Defendants at all. While Plaintiffs' expert could not take FUBU'S numbers and reach individual player conclusions (even though Exhibits J&K to her report make an effort to do so), through their own investigation, Plaintiffs have gathered raw data of sales from HGI'S sales schedule (Exhibit 9A), in an effort to put together some reasonable individual sales numbers. Individual sales numbers are incomplete and short change Plaintiffs, nonetheless they do provide a reasonable basis for awarding damages to individual

Plaintiffs were in fact individually damaged. Such record evidence, in and of itself, defeats summary judgment. Since Defendants put so much emphasis on striking Plaintiffs' expert, this independent evidence seems to have gotten lost in the shuffle. Nonetheless, it exists in the record and was cited, as well as argued, in the responses to Motions for

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Summary Judgment and in the supporting facts and exhibits to those responses. Thus, there can be no argument of surprise as to this damage evidence and it alone is sufficient to survive summary judgment. As to the other method of calculating damages, the one that involves applying percentages to the expert's aggregate amount, the implication is that Plaintiffs' counsel lay in the weeds before springing it at oral argument. Such is not the case. The truth is counsel's efforts to divvy up the expert's aggregate damages between individual Plaintiffs were initially frustrated. The expert retained by Plaintiffs concluded

7 8 9 10 11 12 13 14 15 16 17 judgment as a matter of law pursuant to Rule 50, after the jury found for plaintiffs, arguing the plaintiffs 18 19 20 21 22 23 24 25 26 27 28
1 It is troubling that at the hearing FUBU counsel suggested that had Plaintiffs filed a motion to compel, the very data necessary to make individual calculations would have been provided. FUBU has consistently denied that it kept records by individual player or hang tag data. These inconsistent positions are hard to square.

sales were not documented in a way that would permit an accurate player by player allocation of actual sales. (A cursory examination of records produced by FUBU quickly illustrate the difficulty of damage calculation). Testimony of the Defendants and correspondence of defense counsel seemed to confirm this limitation.1 Thus, a gross infringement amount was all Plaintiffs' expert could provide. At the time memoranda were filed regarding summary judgment and other motions, Plaintiffs' counsel concluded the way to deal with this limitation was to rely on case law that either shifts the burden to the Defendants to provide more detail or relies on other equitable means to apportion the infringing damages. The case law supports such an equitable approach to the dilemma. In addition to cases previously cited, see the brand new case The Cadle Company v. Flanagan, 2006 WL 860063 (D.Conn.2006) in which defendants moved for

failed to prove the extent to which damages should be apportioned to each of the two plaintiffs. The court denied the motion, stating: "As a general rule, the failure to apportion damages among several plaintiffs does not constitute the basis for reversal of a judgment unless the defendant can show prejudice caused by the failure. Central Vermont Railway Co. v. White, 238 U.S. 507, 514, 35 S.Ct. 865, 59 L.Ed. 1433 (1915). Prejudice in this regard would arise if the failure to apportion would allow either plaintiff to recover more than once. Jefferson & N.M. Ry.Co. v. Woods, 64 S.W. 830, 831 (Tex.Civ.App.1901).

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In other words, Plaintiffs' counsel were not "sandbagging" as to dealing with the aggregate nature of the expert's conclusions, but rather were stymied, at the time of briefing, with their efforts to utilize expert testimony to prove individual damages. It was only later that counsel had the idea to apply percentages to the aggregate. Nonetheless, the limitation on Plaintiffs' expert's conclusion seemed tolerable, since equity and the case law made room for such a situation, particularly in the area of trademark infringement where damages are often hard to prove with precision. For example, see Biocore, Inc. and Biocore Medical Technologies,

7 8 9 10 11 12 13 14 15 16 17 ­ could be used to provide a percentage for a player by player application. Such is permitted by law. See 18 19 20 21 22 23 24 25 26 27 28
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Inc. v. Khosrowshahi, 1999 WL 156050 (D.Kansas 1999)(denying summary judgment on Lanham Act claims as it would allow defendant to escape liability where defendant argued he was entitled to summary judgment because plaintiffs' damages were not exact, and stating: "The alleged problems with plaintiffs' methodology does not exonerate Khosrowshahi from liability at the summary judgment stage....(s)ummary judgment is not appropriate simply because plaintiffs' method of calculating these damages may be incorrect." "If the law requires a `remedy' for plaintiffs' lack of precision, summary judgment is not it." During preparation for the oral argument, Plaintiffs' counsel had a brain storm as to how to solve the Rubik's cube regarding the aggregate nature of Plaintiffs' expert's report. The break down provided the players from HGI (after receiving the initial infringement notice letter from Plaintiffs' counsel) - Exhibit 9A

Chroma Lighting v. GTE Products Corporation, 111 F.3d 137 (9th Cir. 1997), holding that the lay witness plaintiff could testify and present sufficient evidence of the amount of damages, and that a finder of fact is permitted "to act upon probable and inferential, as well as direct and positive proof." The documents necessary to make this percentage argument were filed and included in responses. For example: "PRRNSOF ¶ 33: ...Plaintiffs' Exhibit 9A breaks down the exact amount of revenues derived from the use of Plaintiffs' names going to the Foundation." (Plaintiffs' Reply to HGI'S Response to Plaintiff Neal's Statement of Facts, Doc. #310). No specific mention was made of converting the information contained in those documents into percentages to be applied to the gross infringement numbers for all players. The reason for not including

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the percentage argument in the answer brief had nothing to do with being coy. It had everything to do with the timing of when Plaintiffs' counsel figured out there was another way to deal with the expert's aggregate numbers, rather than having to rely exclusively on burden shifting or equitable principles. Plaintiffs' counsel apologizes for the lateness of this revelation and implores the court to permit consideration of it. The case law provides such power to this court. (See Lindy Pen Company, Inc. v. Bic Pen Corporation, 982 F.2d 1400 (9th Cir. 1993) in which further briefing submissions were permitted, even at trial, to give plaintiff every opportunity to prove up damages before finding for the defense.) In Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134 (9th Cir. 1997) the court said: "Under Lindy Pen, the preferred approach allows the district court in its discretion to fashion relief, including monetary relief, based on the totality of the circumstances. Id. See also Badger Meter, Inc. v. Grinnell Corp., 13 F.3d 1145, 1157 (7th Cir. 1994)(stating that, even if a plaintiff is unable to demonstrate damages resulting from the defendant's § 43(a) violation, § 1117 allows the district court to award the plaintiff any just monetary award so long as it constitutes "compensation" for the plaintiff's losses or the defendant's unjust enrichment and is not simply a "penalty" for the defendant's conduct)." See also Robi v. Five Platters, Inc., 918 F.2d 1439 (9th Cir. 1990)(in which the court itself made a "reasonable approximation" of damages by calculating an approximation of gross earnings and then multiplying that by the "lowest established profit rate." The appellate court refused

18 19 20 21 22 Difficulty in proving individual damages due to infringer's record keeping. 23 24 25 26 27 28
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to reverse this method since the fact of damage was proven although the specific amount was not). Permitting consideration of the percentage evidence seems equitable given the circumstances, which include:

The reason for not raising the percentage argument in response to Defendants' Motion to Strike Plaintiffs' Expert Report, being one that was unintentional (caused by the timing of when the lights went on, rather than sharp practice). The fact that underlying documents necessary to establish percentages were filed with the court (although the percentage method was not elicited from them at the time). In other words, record evidence exists sufficient to present the matter to a jury or at least to survive the motion to strike. -6Document 424
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Case law recognizes difficulty in proving damages in such cases and encourages finding a way to preserve the claim rather than summarily terminate it. Expert proof was submitted showing the total exposure of defendants to these plaintiffs for the infringement, thus there is no prejudice caused by the difficulty presented in divvying the amount up between individual plaintiffs, nor is there any double recovery by the Plaintiffs. The delay in figuring out how to convert the expert's aggregate amount to individual damages was not the fault of Meadowlark Lemon, Curly Neal, Marques Haynes, Twiggy Sanders, Showboat Hall, Gator Rivers or Dallas Thornton. For the sake of justice, please do not let these gentlemen suffer because Plaintiffs' expert did not resolve the conundrum created by Defendants' record keeping and Plaintiffs' counsel was slow to do so, particularly since the answer is at hand at a stage where there is still time to allow this case to be resolved on its merits (there is not a trial date yet scheduled). It is important to note, even absent the percentage method and the expert, record evidence of

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individual damages was presented under the other damage method discussed above which involves independently gathered evidence of sales specific to individual players. This evidence alone is sufficient to survive the motions for summary judgment regarding damages. Thank you for your consideration on this important matter, and again counsel apologizes for any extra burden created by these circumstances. ADDITIONAL AUTHORITY REQUESTED BY THE COURT ON THE APPLICATION OF THE LANHAM ACT The Court asked counsel at the hearing what other cases support the proposition that the Lanham Act is appropriate for celebrities in a non-competitive context and counsel referred the Court to authorities. Plaintiffs would also refer the court to Waits v. Frito-Lay, 978 F.2d 1093 (1992) which states: "They (the Defendants assert that because he is not in competition with the defendants, he cannot sue under the Lanham Act. Common sense contradicts this argument, for the purported endorser who is commercially damaged by the false endorsement will rarely if ever be a competitor, and yet is the party best situated to enforce the Lanham Act's prohibition on such conduct... Standing, therefore, does not require "actual competition" in the traditional sense; it extends to a purported -7Document 424
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endorser who has an economic interest akin to that of a trademark holder in controlling the commercial exploitation of his or her identity...... Accordingly, we hold that a celebrity whose endorsement of a product is implied through the imitation of a distinctive attribute of the celebrity's identity, has standing to sue for false endorsement under section 43(a) of the Lanham Act."

DATED this __14th _ day of June 2006. By: ____/S/ Keith Mitnik___________ CLAY M. TOWNSEND, ESQUIRE Florida Bar No.: 363375 KEITH MITNIK, ESQUIRE Florida Bar No.: 436127 BRANDON S. PETERS Florida Bar No.: 965685 Morgan & Morgan, PA 20 N. Orange Avenue, 16th Floor Orlando, FL 32802 Telephone (407) 420-1414 Facsimile (407) 425-8171 Attorneys for Plaintiffs Fred Neal, Larry Rivers, Robert Hall, Dallas Thornton, Marques Haynes and James Sanders

PLEASE TAKE FURTHER NOTICE that copies of the above-referenced documents have been served via first class mail on the following attorneys: Joel L. Herz, Esq. LAW OFFICES OF JOEL L. HERZ La Paloma Corporate Center 3573 E. Sunrise Dr., Suite 215 Tucson, AZ 85718-3206 Attorneys for Defendants GTFM, LLC, FUBU the Collection, LLC and GTFM Of Orlando, LLC Ira S. Sacks, Esq. Safia A. Anand, Esq. DREIER, LLP 499 Park Avenue New York, NY 10022 Attorneys for Defendants GTFM, LLC, FUBU the Collection, LLC and GTFM of Orlando, LLC Edward R. Garvey, Esq. and Christa Westerberg, Esq. GARVEY McNEIL & McGILLIVRAY, S.C. -8Document 424

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634 W. Main St. #101 Madison, WI 53703 Attorneys for Defendants Harlem Globetrotters Int'l, Inc., Harlem Globetrotters Int'l Foundation and Mannie L. & Catherine Jackson Anders Rosenquist, Jr., Esq. Florence M. Bruemmer, Esq. ROSENQUIST & ASSOCIATES 80 E. Columbus Phoenix, AZ 85012 Attorney for Plaintiff Lemon Certificate of Service Certificate of Service Vanessa Braeley, declares as follows: 1. I hereby certify that on June _14th _, 2006, a true and correct copy of Neal Plaintiffs' Reply, 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], [email protected] Edward R. Garvey ­ [email protected] Robert Williams Goldwater, III ­ [email protected] Ray Kendall Harris ­ [email protected] Joel Louis Herz ­ [email protected], [email protected] Anders V. Rosenquist, Jr. - [email protected] Ira S. Sacks ­ [email protected] 2. I am and was at all times mentioned herein a citizen of the United States and a resident of Orange County, Florida, over 18 years of age and not a party to the within action or proceeding. My business address is 20 N. Orange Avenue, 16th Floor, Orlando, FL 32801, and I am employed as a legal assistant by Morgan & Morgan, P.A., Clay Townsend is an attorney admitted to practice in Florida and has been admitted pro hac vice in the District Court of Arizona, and directed that service be made. 3. I hereby certify that on June 14th , 2006, a true and correct copy of Neal Plaintiffs' Reply was sent by postage-prepaid first-class U.S. Mail to the following parties, at the addresses listed, to-wit: Joel L. Herz, Esq. LAW OFFICES OF JOEL L. HERZ La Paloma Corporate Center 3573 E. Sunrise Dr., Suite 215
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Tucson, AZ 85718-3206 Attorney for Defendants, GTFM, LLC, FUBU the Collection, LLC and GTFM OF Orlando, LLC Ira S. Sacks, Esq. Safia Anand, Esq. DREIER LLP 499 Park Ave. New York, NY 10022 Attorneys for Defendants, GTFM, LLC, FUBU the Collection, LLC and GTFM of Orlando, LLC Edward R. Garvey, Esq. Christa Westerberg, Esq. GARVEY McNEIL & McGILLIVRAY, S.C. 634 W. Main Street, Ste. 101 Madison, WI 53703 Attorneys for Defendants Harlem Globetrotters Int'l. Inc., Harlem Globetrotters Int'l Foundation, and Mannie L. & Catherine Jackson Anders Rosenquist, Jr., Esq. Florence M. Bruemmer, Esq. ROSENQUIST & ASSOCIATES 80 E. Columbus Phoenix, AZ 85012 Attorney for Plaintiff Lemon 3. I declare under the penalty of perjury under the laws of the United States that the foregoing is true and correct. DATED: June _14th_, 2006. Signed: ____/S/Vanessa L. Braeley_________ Vanessa L. Braeley Legal Assistant to Clay Townsend MORGAN & MORGAN 20 N. Orange Avenue, 16th Floor Orlando, FL 32801 Attorneys for the Plaintiffs Curly Neal, Larry Rivers, Dallas Thornton, Marques Haynes, Robert Hall and James Sanders

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