Free Declaration - District Court of Arizona - Arizona

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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 [email protected] Ira S. Sacks, Esq. Safia A. Anand, Esq. Melanie J. Sacks, Esq. Dreier LLP 499 Park Avenue New York, NY 10022 Telephone: 212-328-6100 Facsimile: 212-328-6101 [email protected] Attorneys for Defendants FUBU The Collection, LLC and GTFM of Orlando, LLC d/b/a FUBU Company Store UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA MEADOWLARK LEMON, a married man, Plaintiff/Counterdefendant vs. HARLEM GLOBETROTTERS INTERNATIONAL, INC., et al., Defendants/Counterclaimants ) ) ) ) ) ) ) ) ) ) )

Case No. CV 04-0299 PHX-DGC Case No. CV 04-1023-PHX-DGC

DECLARATION OF IRA S. SACKS IN SUPPORT OF FUBU THE COLLECTION, LLC'S AND GTFM OF ORLANDO d/b/a FUBU COMPANY STORE'S RENEWED MOTION FOR SUMMARY JUDGMENT

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IRA S. SACKS declares under penalty of perjury pursuant to 28 U.S.C. § 1746 as follows: 1. I am a partner in the firm of Dreier LLP, attorneys for defendants GTFM of

Orlando, LLC ("GTFM of Orlando") and FUBU The Collection, LLC (collectively referred to as the "FUBU Defendants"). I submit this declaration in further support of the FUBU Defendants' Renewed Motion for Summary Judgment. 2. Other than as expressly stated, the matters set forth herein are based upon my

personal knowledge. 3. Upon examination of (i) Plaintiffs' Statement of Contraverting Facts ("SCF"); (ii)

Plaintiffs' Responses to the FUBU Defendants' Renewed Motion and (iii) the evidentiary record, it is clear that the Plaintiffs do not have sufficient evidence to raise a genuine disputed issue of material fact as to whether this Court has personal jurisdiction over the FUBU Defendants.

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4.

As specifically set forth below, Plaintiffs' factual assertions fall into two

categories: (i) alleged facts which are altogether devoid of evidentiary support; and (ii) alleged facts which cite to evidence that is mischaracterized and/or misinterpreted. As such, the

Plaintiffs have failed to carry their evidentiary burden in opposition to the FUBU Defendants' motion for summary judgment pursuant to Federal Rule of Civil Procedure 56(e). Alleged Facts Without Evidentiary Support The Plaintiffs allege that "[the FUBU] Defendants are both proper parties in this

action because the merchandise that is the subject of this lawsuit has been developed, created, produced, manufactured, marketed, promoted, and/or distributed for widespread sale by [the FUBU] Defendants." SCF at ¶¶ 4, 14, 21, 26. Plaintiffs' sole evidentiary citation for this

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proposition is to the deposition testimony of Daymond Aurum ("Aurum"), co-founder of the FUBU brand and CEO of FUBU The Collection, LLC. Id. 6. In his testimony, Aurum generally states that he supervised the marketing of all

FUBU products, including, but not limited to, the Globetrotter line. Aurum Tr. at pgs. 10-11; 1820. Contrary to the Plaintiffs' characterization of Aurum's testimony, he makes no mention of product development, creation, production, manufacturing and/or distribution. Id. Plaintiff's alleged fact, therefore, lacks evidentiary support. 7. The only evidence directly addressing the role of FUBU The Collection, LLC

with Globetrotters Apparel is the declaration Aurum submitted to this Court, dated July 2004, in which he specifically stated that "FUBU The Collection does not manufacture, advertise or sell FUBU branded products, and does not manufacture, sell or advertise products using the likenesses or names of any of the plaintiffs."; and that "FUBU The Collection has never licensed,

14 15 16 17 18 19 20 21 "FUBU The Collection". SCF at ¶¶ 30, 34. According to Plaintiffs' SCF, however, there is no 22 23 24 25 26 27 28 Case 2:04-cv-00299-DGC Document 305
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developed, created, produced, manufactured, promoted, sold, distributed, and/or exploited any products which might infringe upon the names and likenesses of any of the plaintiffs." See Declaration of Daymond Aurum, dated July 2004 and affixed to the Declaration of Ira S. Sacks In Support of FUBU The Collection, LLC's and GTFM of Orlando d/b/a FUBU Company Store's Renewed Motion for Summary Judgment, dated October 24, 2005, as Exhibit 3, at ¶¶3-4. 8. The Plaintiffs further assert that FUBU The Collection, LLC used the tradename

evidence to that effect; Plaintiffs themselves state that they merely "presume" that FUBU The Collection, LLC uses such a tradename. Id. That speculation is not evidence. The actual evidence is to the contrary. See Aurum July 2004 Decl., at ¶¶ 3-4.

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9.

The Florida Plaintiffs state that FUBU The Collection, LLC is the "alter-ego" of

defendant GTFM, LLC. Florida Pl. Br. at pg. 6. Although the Florida Plaintiffs state that "[t]here is evidence" to this effect, they cite none. Id. 10. I am aware that, in the Ninth Circuit and under Arizona law, to establish that one

corporate entity is the alter-ego of another, such that it is appropriate to pierce the corporate veil and treat the two entities as one and the same, one must set forth proof of "such a unity of interest and ownership that the separate personalities of the corporations and the owners ceased to exist." Katzir's Floor and Home Design, Inc. v. M-MLS.com, 394 F.3d 1143, 1149 (9th Cir. 2004); Deutsche Credit Corp. v. Case power & Equip. Co., 876 P.2d 1190, 1195 (Ariz. 1994). Neither Lemon nor the Florida Plaintiffs even allege facts ­ much less present evidence ­ sufficient to satisfy the requirements for finding that the Court should pierce the corporate veil in this matter. FUBU The Collection, LLC's membership interest in GTFM, LLC (or the alleged

14 15 16 17 18 19 20 21 the alleged sale of Globetrotters Apparel in the Philippines, the FUBU Defendants explained to 22 23 24 25 26 27 28 Case 2:04-cv-00299-DGC Document 305
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receipt of profits from GTFM, LLC) is insufficient, standing alone, to pierce the corporate veil. Katzir's, 394 F.3d at 1149. 11. Plaintiffs also argue that the FUBU Defendants have and are deliberately

withholding information regarding the alleged sale of Globetrotters Apparel in the Philippines. SCF at ¶¶ 32, 38; Lemon Br. at pg. 3. That contention is without evidentiary support. 12. From the time the Plaintiffs informed the FUBU Defendants of their discovery of

the Plaintiffs that (i) the Philippines sales were not sales by any Defendant in these cases; (ii) they had no knowledge regarding the Philippines sales, and had already supplied the Plaintiffs with all available information regarding sales of the Globetrotters Apparel; and (iii) that the FUBU Defendants believed any goods purchased in the Philippines in the Fall of 2005 were

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unauthorized sales, and/or goods that had been transshipped to the Philippines from the United States. See SCF, Exs. D, G. 13. Furthermore, Plaintiffs have raised this issue with the Court on numerous

occasions and this Court has ruled that GTFM has not committed any discovery violations in connection with the Philippines sales, and has no new discovery obligations therewith. October 7, 2005 Order, ¶ 5; see August 18, 2005 Order. There is no evidentiary support for the Plaintiffs' position that (i) the FUBU Defendants are, in fact, aware of and/or responsible for the Philippines sales, or (ii) that the FUBU Defendants are withholding information in connection with such sales. 14. Similarly, the Florida Plaintiffs assert that the FUBU Defendants intentionally

chose to not mention rapper LL Cool J (James Todd Smith, "Smith") was a shareholder of GTFM, LLC and GTFM, Inc. Florida Pl. Br. at pg. 6. From this omission, the Florida Plaintiffs

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further conclude, "FUBU's only motive for this outrageous misrepresentation would be to conceal a potentially damaging witness." Id. 15. Plaintiffs never sought specific corporate records regarding membership in

GTFM, LLC, or served interrogatories seeking such information. 16. The identity of shareholders of GTFM, LLC is immaterial to this motion and this

litigation. Indeed, Plaintiffs did not take any discovery of Samsung ­ a 20% member of GTFM,

Globetrotter apparel. 17. Smith had nothing to do with the Globetrotters Apparel, which is why he was not

disclosed in Rule 26 disclosures. Corporate records indicate that Smith has a less than 5% nonvoting interest in GTFM, LLC, which he acquired from FUBU The Collection, LLC. The

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litigation between FUBU and Smith, referenced by the Plaintiffs, involves a services contract that is irrelevant to this action. Smith initially acquired his small (less than 5%) non-voting interest in GTFM, Inc. and GTFM, LLC in settlement of a dispute regarding that services contract. A true and accurate copy of the Summons and Complaint in that action, entitled Smith v. GTFM, Inc. et al., Index No. 102364/05, filed on February 17, 2005 in the Supreme Court of New York, New York County, is attached hereto as Exhibit A. The Defendants' Answer in the Smith action, dated March 29, 2005, is attached hereto as Exhibit B. Alleged Facts "Supported" By Mischaracterized Evidence 18. Plaintiffs assert that Aurum, "attended meetings regarding the formulation of the

[Globetrotters] clothing line, and approved the idea of the Harlem Globetrotters clothing line"; "determined styles of the clothing in the line and marketing as far as what type of advertising should be done"; and looked at samples of clothing, approving or disapproving of the styles, all

14 15 16 17 18 19 20 21 The Collection, LLC." Rather, Aurum stated that he supervised the line's marketing strategy 22 23 24 25 26 27 28 Case 2:04-cv-00299-DGC Document 305
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"on behalf of FUBU The Collection, LLC". Lemon Br. pgs. 4, 9 (emphasis added). Therefore, the Plaintiffs argue, jurisdiction arises over FUBU The Collection, LLC because that entity was directly involved with the Globetrotters Apparel. Id. 19. In support of those assertions, the Plaintiffs cite to Aurum's deposition testimony.

Examination of the transcript, however, shows that Plaintiffs have grossly mischaracterized Aurum's testimony. Aurum never testified that he performed any functions "on behalf of FUBU

without specifying which entity that work was done on behalf of. Aurum Tr. at pgs.17-18, 4850. 20. Aurum is CEO of GTFM, LLC, GTFM, Inc, and FUBU The Collection, LLC. Indeed, Plaintiffs' themselves

Aurum July 2004 Decl. ¶ 1; Aurum Dec. 7 Decl. ¶ 1.

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affirmatively point out that "FUBU The Collection [, LLC]'s CEO [Aurum] is the same as GTFM, LLC's." Florida Pl. Br. at pg. 5; see Lemon Br. at pgs. 4, 9. Aurum therefore wears many hats. 21. Aurum has explained that his FUBU The Collection, LLC hat does not involve

the manufacture, advertising or sale of FUBU branded products, and that FUBU The Collection, LLC does not manufacture, sell or advertise FUBU branded products, and has never licensed, developed, created, produced, manufactured, promoted, sold, distributed, and/or exploited any products with Plaintiffs' Alleged Trademarks. Aurum July 2004 Decl. at ¶¶ 3-4. 22. Therefore, Plaintiffs' allegations regarding the supposed connection of Aurum's

activities to FUBU The Collection, LLC have no evidentiary support. 23. Further, Aurum's cited testimony indicates that he generally performed the

function of approving and/or disapproving of some of the items in the Globetrotters Apparel line 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case 2:04-cv-00299-DGC Document 305
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before they went on the market, not that he conducted an overall review and/or supervised the entire line, whether on behalf of FUBU The Collection, LLC or not. Aurum Tr. at pg. 19.1 24. Plaintiffs further assert that "FUBU The Collection's counsel acknowledges that

FUBU The Collection is a `common law mark' owned by the FUBU Defendants." (Lemon Br. at pg. 3, SCF at ¶ 39), citing an email from me to Plaintiffs' counsel. Rather, the cited email contains the unequivocal statement that:

Aurum's testimony reads: "Q: A: Q: A: Who would have been making the decisions to add individual player's names to the apparel? I wouldn't know. Would you have approved of the various styles before they went to market? In some cases."

(Aurum Tr. at pgs. 19-20 (emphasis added)). 7

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"FUBU The Collection is not a registered mark. FUBU The Collection is a tradename used by GTFM, Inc. and GTFM, LLC. It is not a trademark used by FUBU The Collection, LLC." See SCF, Ex. D (emphasis added). The plain language of the email makes clear that the tradename is not owned or used by the "FUBU Defendants," but only by GTFM, Inc., which is not a party to this action, and GTFM, LLC, the FUBU entity that produces and sells merchandise. 25 Attached hereto as Exhibit C are true and correct copies of pages from the

deposition transcript of Daymond Aurum, dated August 3, 2005. 26. Attached hereto as Exhibit D are true and correct copies of pages from the

deposition transcript of Oliver Phipps, dated September 23, 2005. I declare under penalty of perjury that the foregoing is true and correct. Dated: New York, New York December 8, 2005 ____/s/ Ira S. Sacks___________ Ira S. Sacks

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