Free 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' RESPONSE TO DEFENDANTS' MOTION TO STRIKE THE AFFIDAVIT OF PETER ANTHONY GALLO Case Nos.: CV 04 0299 PHX DGC and CV-04-1023 PHX DGC

HARLEM GLOBETROTTERS 11 INTERNATIONAL, INC., et al.; 12 13 Defendants. FRED "CURLY" NEAL, et al. Plaintiffs,

14 vs.

15 HARLEM GLOBETROTTERS INTERNATIONAL, INC., et al.; 16 Defendants. HARLEM GLOBETROTTERS 18 INTERNATIONAL, INC., an Arizona corporation, 17 19 20 21 22 23 24 25 Hall, Marques Haynes, and James "Twiggy" Sanders (collectively referred to as "Plaintiffs"), hereby respond 26 to Defendants GTFM, LLC, FUBU The Collection, LLC and GTFM of Orlando, LLC d/b/a FUBU vs. MEADOWLARK LEMON, a married man, Counter-defendant. NEAL PLAINTIFFS' RESPONSE TO DEFENDANTS' MOTION TO STRIKE THE AFFIDAVIT OF PETER ANTHONY GALLO Plaintiffs, Fred "Curly" Neal, Larry "Gator" Rivers, Dallas "Big D" Thornton, Robert "Showboat" Counter-claimant,

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Company Store's (collectively referred to as the "FUBU Defendants") Motion to Strike the Affidavit of Peter Anthony Gallo (Doc. # 413)(hereinafter "Motion to Strike"). Plaintiffs respectfully request that FUBU Defendants' Motion to Strike the Affidavit of Peter Anthony Gallo (hereinafter "Gallo Affidavit"), be denied for the following reasons. 1. FUBU has made incredible, incomplete and incorrect assertions in pleadings filed AFTER

the close of discovery on September 30, 2005. For example, 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 through its representatives' testimony denied any Philippines sales. (See II supra). 23 24 25 26 27 28
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a.

On October 24, 2005, FUBU filed with this Court in its Statement of Facts

(Doc. # 187) this: "30. The FUBU Defendants were unaware of any sales of alleged FUBU/HGI merchandise in the Philippines until the plaintiffs brought it to their attention on or about September 19, 2005. (Blenden October 2005 Decl. ¶ 3)." The Gallo affidavit demonstrates that this statement could not have been true. It certainly appears to be untrue given the Philippines FUBU trademark registration and application in 1999 and other evidence that are the subject of the Gallo Affidavit. FUBU should have filed a supplement to correct their prior incorrect and incomplete assertions. b. On December 8, 2005, FUBU asserted in their Reply to Plaintiff's Response

that "Indeed GTFM, LLC did not even know of those sales until Plaintiff disclosed them," and almost comically, "GTFM, LLC is currently investigating whether those sales are illegal." (Doc. #304, P. 13, lines 20-24). More accurately, GTFM, LLC,

c.

On November 17, 2005, FUBU asserted in their efforts to strike Plaintiffs'

expert that: "GTFM produced data that reliably quantified sales" (GTFM, LLC's Reply Memorandum of Law in Further Support of Plaintiffs Motion to Strike Plaintiff's Expert Report (Doc #228).

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d.

On October 24, 2005, in FUBU The Collection, LLC's Renewed Motion for

Summary Judgment (Doc. #185) FUBU stated: i. "Even if the name "FUBU The Collection" is used in the Philippines on stores, bags, receipts and signs as plaintiffs claim, FUBU The Collection, LLC is not involved." (p. 7) ii. "GTFM, LLC is the only entity that would have anything operationally or financially [to] do with the Harlem Globetrotters." (p. 9) The Gallo affidavit reveals that GTFM, Inc. registered "FUBU" in the Philippines, not GTFM, LLC, and that "FUBU The Collection" named stores are selling infringing merchandise with no supplemental disclosure by FUBU Defendants as to exactly what is going on. Plaintiffs have not violated this Court's order that "no additional production of documents

will be required by the FUBU Defendants related to foreign sales" (Docket No. 173) because Plaintiffs have not requested that FUBU produce anything. Nothing in the rules permits a party from continuing

investigation. Here, there is no trial date set, and Plaintiffs only filed supplements after this Court ordered oral arguments. 3. Additionally, pre-trial disclosures under Rule 26(a)(3) require a party to promptly provide to

other parties identification of documents and exhibits up to thirty (30) days before trial. 4. Fed.R.Civ.P. 26 requires the parties to disclose any supplemental evidence that should have

been initially disclosed under Rule 26(a)(1)(B) including "all documents...that are in the possession, custody, or control of the party and that the disclosing party may use to support its claims or defenses," and Rule 26 (a)(1)(E) states that a party "is not excused from making its disclosures because it has not fully completed its

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investigations."

It is the FUBU Defendants who have failed to disclose this evidence initially and

supplementary, and FUBU should be estopped from moving that the Gallo Affidavit be stricken and that the Court not have the opportunity to consider the same, especially given their disingenuous offer to "investigate" further.

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5.

The exclusion of relevant, highly probative evidence could result in prejudice and injustice to

Plaintiffs, and it is FUBU Defendants' failure to disclose that has prevented Plaintiffs from receiving information regarding the direct relationship between the FUBU Defendants and various international retail outlets. 6. Plaintiffs have not intentionally withheld any evidence and were diligent during the discovery

period but relied upon FUBU counsel's representations about documents, and there is no prejudice to 7 8 9 10 11 12 13 14 15 16 17 Response in Opposition to FUBU's Motion for Summary Judgment, and Plaintiffs' Response in Opposition 18 19 20 21 22 23 24 25 26 27 28
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FUBU Defendants. 7. Plaintiffs' Gallo Affidavit and exhibits offer no new legal theories or assertions and there is

no prejudice to FUBU Defendants who have ample opportunity to provide opposing affidavits and are familiar with the subject matter of the Gallo Affidavit as it pertains to their international related entities; 8. Plaintiffs filing of affidavits and exhibits prior to the summary judgment hearing is

procedurally proper. I. THE COURT SHOULD NOT STRIKE THE GALLO AFFIDAVIT. The Gallo Affidavit is a supplemental affidavit submitted in further support of Plaintiffs' Motion for Summary Judgment, Plaintiffs' Response in Opposition to HGI's Motion for Summary Judgment, Plaintiffs'

to FUBU's Renewed Motion for Summary Judgment. For the reasons as stated above, FUBU Defendants incorrectly assert in their Motion to Strike that Plaintiffs' Gallo Affidavit was filed to circumvent this Court's order on discovery cutoff and further production of documents by FUBU pertaining to foreign sales. The Gallo Affidavit explains that it was to verify that the presence and sale of the FUBU/Harlem Globetrotters items in the Philippines were due directly to a connection to United States (principally New York) based entities of the FUBU Defendants and intellectual property filings overseas. Again this was information that should have been disclosed by FUBU Defendants but was not at the time that they were required to disclose all foreign information.

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FUBU has made no supplemental disclosures of the results of its so-called "investigation." Plaintiff has offered the supplemental Gallo Affidavit which demonstrates that GTFM, LLC's statement that "those sales were not disclosed because they were not made by GTFM, LLC" (Doc. #304, P. 13, line 19-20) is false given that GTFM, LLC had registered in the Philippines trademark office the name "FUBU" and that the "FUBU The Collection" retail outlet in Manila has the FUBU.com website on its business cards (Gallo Affidavit, Doc. 411). FUBU previously filed with this Court in its Statement of Facts (Doc. # 187) this:

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The Gallo Affidavit is neither in violation of this Court's orders, nor in violation of the local rules of the District of Arizona. Furthermore, the late submission is not prejudicial to FUBU Defendants as they had time and opportunity to respond to the Gallo Affidavit and evidence submitted therewith, as contemplated by Rule 56, Federal Rules of Civil Procedure. FUBU Defendants chose not to respond and instead decided to file the improper Motion to Strike. The FUBU Defendants argue that the Gallo Affidavit somehow violates this Court's orders. FUBU Defendants then cite to this Court's order of October 7, 2005, which extended the deadline for dispositive motions to October 28, 2005. However, FUBU Defendants' fail to realize that the Court's order setting a deadline for dispositive motions has nothing to do with Plaintiffs' submission of additional declarations, affidavits, and disclosures that were made. Plaintiffs' Gallo Affidavit is just a supplement and additional support for the various summary judgment motions filed prior to the dispositive motions deadline. The Court did not set a deadline for any such supplements, and therefore Plaintiffs' submission of the supplemental Gallo Affidavit is governed by the Federal Rules of Civil Procedure. Furthermore, the Court did not specify in the scheduling order the times when supplemental disclosure statements pursuant to Rule 26(f), ARCP, should be made. Therefore, Plaintiffs' submission of supplemental disclosure is also governed by the Federal Rules of Civil Procedure. As a result, FUBU Defendants' reliance on the fact that the declarations, affidavits, and supplemental disclosure are somehow in violation of this Court's orders is

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FUBU Defendants next rely on Local Rule 56.1 to argue that the Gallo Affidavit is `untimely'. Rule 56.1(b), Local Rules of Civil Procedure, states: "...the opposing party shall, unless otherwise ordered by the Court, have thirty (30) days after service within which to serve and file a responsive memorandum in opposition; the moving party, unless otherwise ordered by the Court, shall have fifteen (15) days after service of the responsive memorandum to file a reply memorandum." (emphasis added). Based upon that rule, FUBU Defendants claim that Plaintiffs' Declarations are over five months late. However, Local Rule 56.1 only governs the deadlines for submissions of responsive memorandum and reply memorandum. Plaintiffs have fully complied with the requirements of Local Rule 56.1, as they previously submitted their Motions for Summary Judgment, Responses, and Replies, and Statement of Facts in support of each, within the deadlines set forth by Local Rule 56.1. Local Rule 56.1 does not set forth any deadline for the submission of supplementary documents (such as supplemental documentary evidence, depositions,

12 13 14 15 16 17 18 19 20 21 22 merely support an existing motion and do not constitute a new motion for summary judgment on additional 23 24 25 26 27 28
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affidavits, declarations, etc.) in support of such motions for summary judgment, responsive memorandum or reply memorandum. As FUBU Defendants' Motions to Strike fail to point out, the law and rules regarding the filing of supplemental evidence, documents, affidavits, etc., in support of or opposition to a motion for summary judgment is well settled. There is nothing in the rules that prohibits the filing of supplemental

memorandum, affidavits, or documents in support of a motion for summary judgment. In fact, the case law supports the filing of supplemental affidavits and evidence and FUBU Defendants should have file their own supplements to correct their incomplete and incorrect prior filings. Affidavits in support of summary judgment may be served as late as the day of the hearing if they

issues or grounds. Strang v. U.S. Arms Control & Disarmament Agency, 864 F.2d 859 (D.C. Cir. 1989)(reversed on other grounds); Laningham v. United States Navy, 813 F.2d 1236, 1240-41 (D.C. Cir. 1987). In Strang, the plaintiff objected to two affidavits submitted by defendants on the day of the hearing on defendant's motion for summary judgment. The Strang Court held that plaintiff's objection was insubstantial, as the affidavits

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merely supported the existing motion and did not constitute a new motion for summary judgment on additional issues or grounds. Therefore, the rule in Strang that emerges is: affidavits are considered timely, even when served the day of the hearing, where they merely supported the existing motion and did not constitute a new motion for summary judgment on additional issues or grounds. The court in Laningham even allowed the filing of a supplemental memorandum, which raised new grounds for summary judgment, prior to the hearing. Laningham v. United States Navy, 813 F.2d 1236 (D.C.

7 8 9 10 11 12 13 14 15 16 17 Disarmament Agency, 864 F.2d 859, 861 (D.C. Cir. 1989) (affidavits timely filed when served the day of the 18 19 20 21 22 23 24 25 26 27 28
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Cir. 1987). In Laningham, Plaintiff argued that FUBU Defendants did not properly raise the issue of intent and willfulness because it was "raised . . . in a supplemental memorandum filed out of time." Id. The Laningham Court found that plaintiff's argument lacked merit as plaintiff did not cite any authority in Rule 56, Fed. R. Civ. P., or in the case law that prohibited the filing of a supplemental memorandum in support of a motion for summary judgment. Id. In the case of Time Oil Co. v. Cigna Prop. & Cas. Ins. Co., 743 F. Supp. 1400, 1406 (D. Wash. 1990), plaintiff filed a declaration in support of summary judgment, and defendants moved to strike the declaration as untimely. The Court in Time Oil denied defendants' motion to strike, having concluded that the Id, citing Strang v. U.S. Arms Control &

defendants were not prejudiced by the untimely declaration.

hearing where they "merely supported the existing motion and did not constitute a new motion for summary judgment on additional issues or grounds"). Furthermore, the district court has discretion to accept late-filed affidavits in support of summary judgment. Western Chance #2, Inc. v. KFC Corp., 957 F.2d 1538, 1544 (9th Cir. 1992). Therefore, it is completely within the discretion of this Court whether to consider affidavits submitted in an untimely fashion. See Mas Marques v. Digital Equipment Corp., 637 F.2d 24, 29-30 (1st Cir. 1980); DeLong Corp. v. Raymond International, Inc., 622 F.2d 1135, 1139-40 (3d Cir. 1980) (reversed on other grounds); Sames v. Gable, 100 F.R.D. 749, 751 (E.D. Pa. 1983); Hooks v. Hooks, 771 F.2d 935, 946 (6th Cir. 1985).

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Rule 56(e), FRCP itself allows for the supplementing of affidavits. Specifically, Rule 56(e) states, "...The court may permit affidavits to be supplemented or opposed by depositions, answers to interrogatories, or further affidavits." Therefore, based upon the foregoing, the Gallo Affidavit is proper and should be considered by this Court when ruling upon the various summary judgment motions. Plaintiffs' submission of the Gallo Affidavit is clearly permitted under the rules and case law, and Plaintiffs did nothing improper. Plaintiffs would have disclosed the documents contained in the Gallo

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Affidavit prior to the discovery deadline had Plaintiffs known of the existence of such documents and information. FUBU Defendants complain, "they have not had an opportunity to depose Gallo on the issues set forth in the Gallo Affidavit." However, FUBU Defendants did depose Gallo on the subject of Philippines sales, and since no trial has yet been set, FUBU Defendants have ample time to review and oppose the new documents, in time to prepare for trial. This disclosure of a few new documents will not prejudice FUBU Defendants in any way. Therefore, Plaintiffs have proven that any late disclosure is "harmless." Thus, imposing sanctions in this case is improper, and if anyone is sanctioned, it should be FUBU Defendants for failing to supplement disclosures under Fed.R.Civ.P. 37(c)(1), Litle & Company v. Mann, 145 F.3d 1339 (9th Cir. 1998).

Rule 26(e) of the Federal Rules of Civil Procedure places an affirmative duty on a party who has made an initial disclosure pursuant to 26(a), to supplement that information "if the party learns that in some material respect the information disclosed is incomplete ... and if the additional ... information has not otherwise been made known to the other parties during the discovery process or in writing." As stated infra, supplementation is required by Rule 26 (a)(1)(B), for documents in the possession, care, custody or control of a party that the party may rely on. Supplementations need not be made as each new item of information is learned but should be made at appropriate intervals, and with special promptness as the trial date approaches. See Advisory Committee Notes for 1993 Amendments to Fed.R.Civ.Pro. 26(e).

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Additionally, Rule 26(e)(1) requires specifically that information and opinions in expert reports and testimony required by Rule 26(2)(b) be supplemented, even as to the basis and reasons for the opinion, if incomplete or inaccurate. Furthermore, Rule 26(e) does not set forth a deadline by which supplemental disclosures must be made. See Fed.R.Civ.P. 26(e)(emphasis added). FUBU has made no supplemental disclosures despite the clear case law that a party is required to supplement and may be sanctioned for failure to do so.

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As for timeliness of Plaintiffs' disclosures, the discovery deadline does not relieve the parties from their duties to supplement. Plaintiff is obligated to supplement its previous disclosures and has done so. In depositions previously filed with this Court as exhibits (i.e. Plaintiffs' Response Doc. #253) FUBU representatives testified as follows: Daymond Aurum deposition at Page 39 (lines 20-25): (Aurum is CEO of GTFM, LLC and GTFM, Inc. See Aurum Declaration, Doc. #306). Q. A. Q. Do you recall any countries it was sold in outside of the United States? I don't recall specifics, no. By saying I don't recall specifics, no, are you telling me that you don't know if it was sold in any countries other than the United States? And Page 40 (lines 11-12): Q. A. Who would know? Lawrence Blenden.

Lawrence Blenden deposition at Page 52 (lines 15-23): Q. A. Q. A. Q. A. Do you know if any of this clothing line was sold in foreign markets? The Harlem Globetrotters line? Yes. Yes. Do you know what foreign markets it was sold in? There was a little bit sold in Japan.

And Page 53 (lines 19-25) and Page 54 (lines 1-2):

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Q.

Besides for Japan, can you recall if there is any other countries where merchandise, Globetrotters merchandise was sold? MR. SACKS: Objection. Asked and answered You can answer again.

A. 4 5 6 7 8 9

Offhand I couldn't tell you. I don't know.

Bruce Weisfeld deposition at Page 43 (lines 1-5): Q. A. There were no sales of Harlem Globetrotters apparel in any of those countries other than Japan; is that correct? Yes.

These statements are incomplete, incorrect and simply not credible, and should have been corrected before this Court or a jury makes decisions based thereupon. Furthermore, even if the Court (under its

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wide discretion) were to agree with Defendants that Plaintiffs' affidavits were untimely, Plaintiffs' witnesses and evidence should not be precluded because the failure to disclose was harmless. Rule 37(c), Federal Rules of Civil Procedure, states that witnesses and evidence may be excluded at trial only if a party who "without substantial justification fails to disclose information required by Rule 26(a) or 26(e)(1)..., unless such failure is harmless..." Where there has been no prejudice to a party and no bad faith, the 9th circuit has held that striking damage figures was too drastic. Litle & Company v. Mann, 145 F.3d 1339 (reversing the trial court and finding no prejudice where a failure to learn of and disclose documents could have been remedied by

The 9th circuit has reversed the trial court for excluding a late declaration as a discovery sanction where the late disclosure was substantially justified and harmless. Fonseca v. Sysco Food Services of Arizona, Inc., 374 F.3d 840 (9th Cir. 2004)(also reversing summary judgment because the declaration of a witness presented issues of material fact). Based upon the foregoing, Plaintiffs respectfully request that the Court deny FUBU Defendants' Motion to Strike the Affidavit of Peter Anthony Gallo. Plaintiffs further request that the Court: (i) allow

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Gallo Affidavit and materials submitted therewith to be considered for the pending summary judgment motions; and (ii) permit the supplemental disclosure of same. DATED this 31st day of May 2006.

By:

____/S/ Clay M. Townsend___________ 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 facsimile and 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. 634 W. Main St. #101 Madison, WI 53703

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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 May 31, 2006, a true and correct copy of Neal Plaintiffs' Response to Defendants' Motion to Strike the Affidavit of Peter Anthony Gallo, 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 May 31, 2006, a true and correct copy of Neal Plaintiffs' Response to Defendants' Motion to Strike the Affidavit of Peter Anthony Gallo was sent by facsimile and postageprepaid 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

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3573 E. Sunrise Dr., Suite 215 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: May 31st, 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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