Free Response - 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 (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 MEADOWLARK LEMON, et al., Plaintiffs, No. CV-04-0299 PHX DGC and CV-04-1023 PHX DGC DEFENDANT HARLEM GLOBETROTTERS INTERNATIONAL, INC., HARLEM GLOBETROTTERS INTERNATIONAL FOUNDATION, AND MANNIE L. & CATHERINE JACKSON' S ADDITIONAL STATEMENT OF FACTS IN RESPONSE TO PLAINTIFFS' MOTIONS FOR SUMMARY JUDGMENT

14 vs. 15

HARLEM GLOBETROTTERS 16 INTERNATIONAL, INC., et al.;
17 18 19 HARLEM GLOBETROTTERS 20 21

Defendants.

INTERNATIONAL, INC., an Arizona corporation, Counterclaimant,

22 vs. 23 24

MEADOWLARK LEMON, a married man, Counterdefendant.

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Defendants Harlem Globetrotters International, Inc. ("HGI" or "the Globetrotters"), Harlem Globetrotters International Foundation ("HGIF" or "the Foundation"), and Mannie & Catherine Jackson (collectively, "the HGI Defendants") submit this Additional Statement of Facts ("DASOF"), in support of their response to Plaintiff Lemon' and the Neal Plaintiffs' s motions for summary judgment. This statement supplements the HGI Defendants' Statement of Facts ("DSOF") previously submitted with the HGI Defendants' motion for summary judgment (DSOF, 10/28/05, Doc. 196.) In this Response, "HGI" refers to Harlem Globetrotters International, Inc. and "GTFM" and "FUBU" refer to GTFM, LLC. "License Agreement" refers to the June 1, 2002, license agreement entered into by HGI and GTFM, and "Apparel" refers to apparel produced in accordance with that agreement. 1. The Globetrotters' 1975 program demonstrates the use of Plaintiff Lemon' name s

in cartoons, television programs, posters, and on the uniform Plaintiff wore as a player. (Syracuse Aff., ¶ 7, Ex. D at 1091, 1093, 1097, 1099-1105, 1112, 1117, 1119 (Doc 208).) 2. Nothing in the record suggests GTFM ever would have entered into an agreement

with Plaintiff Lemon alone, or if it did, that Lemon would have been compensated. (Garvey Aff., 11/22/05, ¶ 4.) 3. The only statements Plaintiff Lemon has claimed were defamatory were comments

Mannie Jackson made to the Arizona Republic. (Garvey Aff., 11/22/05, ¶ 5 & Ex. A, B.) 4. It appears that Plaintiff Lemon has ceased the sale of red, white, and blue

basketballs containing an imitation of the Globetrotters' trademarked HAND AND BALL logo. All links on his website to basketball sales are "dead." See http://www.meadowlarklemon.com/merchandise.html (last visited Nov. 20, 2005). (Garvey Aff., 11/22/05, ¶ 6.) 5. The United Basketball Players Association ("the UBPA" or "the union")

represented Globetrotters players for a period in the late 1970s through the mid-1980s, when
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collective bargaining broke down among the players. (Thornton Dep. at 31, 99). The union' s major achievements were getting the players a per diem and better salary. (Thornton Dep. at 37; Lemon Dep. at 238.) 6. The union negotiated different things than were contained in the player contracts.

(Thornton Dep. at 38.) As Plaintiff Thornton, onetime union president (id. at 78) put it: Q: This is just additional benefits, without limiting the rights to either side of the individual contract. A: Yes, I think that' correct. s

(Thornton Dep. at 38.) In other words, any collective bargaining agreement the players may have had did not prohibit or restrict the Globetrotters when it negotiated individual contracts. (Id. at 93.) 7. In fact, the 1983 collective bargaining agreement-- the last known contract

(Thornton Dep. at 117)-- contains an attachment that specifically incorporated the publicity and licensing paragraph of the standard player contract signed by all Plaintiffs, which at that time was located in paragraph 12(a), into the collective bargaining agreement. (Thornton Dep. at 8687, 91, Ex. 11 at 1126, 1163, Ex 8 ¶ 12(a)). 8. The players' union did not exist at the time Mannie Jackson & Associates

purchased the Globetrotters in 1993, and MJA did not assume or even know of any unionrelated liabilities at that time. No players' union has formed since then. (Jackson Aff., 11/22/05, ¶ 3.) 9. International Broadcasting Corporation, Inc. ("Old IBC") owned the Harlem

Globetrotters in the early 1990s, along with other entertainment-related entities such as the Ice Capades. (Nikolis Dep. at 8, 22.) 10. Old IBC declared Chapter XI bankruptcy in the early 1990s, and National

Westminster Bank USA ("NatWest"), which had lent money to the company, foreclosed on IBC' assets. (Nikolis Dep. at 8-9.) s
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11.

Theodore Nikolis was an employee of NatWest at the time of the bankruptcy and

handled the reorganization process for NatWest. (Nikolis Dep. at 8-9.) Paul Horton was also employed by NatWest and was involved in the proceedings related to the Harlem Globetrotters. (Horton Dep. at 8-9.) 12. IBC eventually became a subsidiary of NatWest ("New IBC"). (Horton Dep. at

10.) It reorganized in bankruptcy, rejecting certain contracts, including any collective bargaining agreements. (Nikolis Dep. at 50-51, Ex 5, Debtors' Amended Joint Plan of Reorganization at 14.) 13. While under NatWest' control, New IBC formed Harlem Globertrotters Inc. s

("HG") as a subsidiary (id. at 11). HG was formed to accept the Harlem Globetrotters-related assets of IBC in order to sell off those assets and protect the bank from any liabilities arising from the operation of a company. (Nikolis Dep. at 11, 26-28, & Ex. 1 at 1323; Horton Dep. at 18.) 14. HG received all of IBC' assets that constituted the Harlem Globetrotters and sold s

all of those assets. (Nikolis Dep. at 38-40.) 15. HG did so both to maximize the price NatWest could receive and to protect

it from liability associated with retaining any assets. (Nikolis Dep. at 29.) 16. NatWest did not delineate each and every asset; as Mr. Nikolis testified, "whatever

we find or whatever we have we transfer." (Nikolis Dep. at 30.) 17. NatWest made no attempt to sell the Harlem Globetrotters piecemeal: it was sold

as a cohesive unit. (Nikolis Dep. at 33.) 18. No former Globetrotters players objected to the bankruptcy reorganization plan or

purchase of the Globetrotters. (Nikolis Dep. at 24; Horton Dep. at 53.) 19. No union was involved in the bankruptcy and sale process related to the Harlem

Globetrotters team on behalf of the players, and no hearings were held with respect to a union contract or the rights of the union. (Nikolis Dep. at 32; Horton Dep. at 52.)
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20.

Mannie Jackson & Associates ("MJA") and his company, Harlem Globetrotters

International, Inc. ("HGI") bought the Globetrotters from New IBC in 1993. (Nikolis Dep. at 11, 19-20 & Ex. 1.) 21. MJA and HGI received all the assets of HG, and held by NatWest, in purchasing

the company. (Horton Dep. at 54, 57.) 22. 62, 65, 66.) 23. One of the assets sold to MJA was "intangible assets," which was defined to NatWest' intent was to sell MJA all the assets of the company. (Horton Dep. at s

include, inter alia, "licensing rights and contracts," "television rights and contracts," "player rights and contracts," "trademarks," "tradenames," "service rights and contracts," "licensing agreements," and "memorabilia, films, awards, photographs, trophies, promotional material, files, books and records, the going-concern and goodwill, etc." (Nikolis Dep. at 11, 17 & Ex. 1 at 1325, 1387; Horton Dep. at 56-57.) "Intangible assets" made up the largest portion of the $6 million purchase price, at $5,688,240.39. (Id. at 11 & Ex. 1 at 1387.) 24. Another asset sold to MJA was "books and records." (Nikolis Dep. at 11 & Ex. 1

at 1325, 1374.) These included "player' contracts" and "union de-certification." (Id. at 1377.) s 25. "Contracts" is defined in the asset purchase agreement to mean "all contracts,

agreements, indentures, licenses, leases, commitments, plans, arrangements, sales orders and purchase orders of every kind." (Nikolis Dep. at 11, Ex. 1 at 1323.) 26. All contracts held by IBC were transferred to NatWest in the takeover of assets by

the bank, and in turn all contracts were transferred from NatWest to MJA via the asset purchase agreement. (Horton Dep. at 58.) 27. The list of players on Schedule 2.1(I) of the contract was a list of active

Globetrotter players and coaches in 1993. (Nikolis Dep. at 11, Ex. 1 at 1386; Jackson Aff., 11/22/05, ¶ 4.) 28. Mannie Jackson understood that HGI and MJA would be receiving the rights to
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use former players' names and likenesses for commercial and promotional purposes through the asset purchase agreement. In fact, prior to purchasing the team, Mr. Jackson had identified untapped licensing revenue as a potential growth area, telling investors: Licensing revenues have exploded throughout the sports world . . . Unlike a member of the NBA, the ABL or NHL, the Harlem Globetrotters have a significant advantage in that they: 1) may be the best known sports and entertainment franchise in the world; and 2) that licensing revenues accrue to the company, not the individual players. (M. Jackson Aff., 11/22/05, ¶ 5 & Ex. A at 1535.) 29. Plaintiffs' individual player contracts provided Plaintiffs would receive a salary

(generally, between $80-$100,000 annually depending on the player and the year) and other benefits, including per diem, travel expenses, advances, medical care for work-related injuries, and publicizing and advertising of the player. (Thornton Dep. at 27, Ex. 8 ¶¶ 3, 4, 9, Doc 201; Rivers Dep. at 46, Ex. 12 ¶¶ 3, 4, 9, Doc 201; Hall Dep. at 28-29, Ex. 16 ¶¶ 3, 4, 6, 9, Doc 198; Sanders Dep. at 53, Ex. 23 ¶ 3, 8, Doc 198; Lemon Dep. at 115, Ex. 7 ¶¶ 3, 10, 12, Doc 199; Neal Dep. at 42, Ex. 37 ¶¶ 3, 4, 5, 9, Doc 199; Haynes Dep. at 22-23, Ex. 22 ¶¶ 3, 10, 12, Doc 196.) 30. Plaintiffs' player contracts contained a covenant not to compete provision, which

had a duration of one to two years after the contract expired. (Thornton Dep. at 27, Ex. 8 ¶ 13, Doc 201; Rivers Dep. at 46, Ex. 12 ¶ 13, Doc 201; Hall Dep. at 28-29, Ex 16 ¶ 13, Doc 198; Sanders Dep. at 53, Ex. 23 ¶ 13, Doc 198; Lemon Dep. at 115, Ex. 7 ¶ 16, Doc 199; Neal Dep. at 42, Ex. 37 ¶ 13, Doc 199; Haynes Dep. at 22-23, Ex. 22 ¶ 16, Doc 196.) 31. The player contracts did not ask Plaintiffs to cease using their names and

likenesses in perpetuity, but only required Plaintiffs to obtain the Globetrotters' consent of any independent media interviews or product endorsements during the term of the player contracts. The contracts further provided that such consent would not be unreasonably withheld. (Thornton Dep. at 27, Ex. 8 ¶ 12(c), Doc 201; Rivers Dep. at 46, Ex. 12 ¶ 12(c), Doc 201; Hall
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Dep. at 28-29, Ex. 16, ¶ 12, Doc 198; Sanders Dep. at 53, Ex. 23 ¶ 12(b), Doc 198; Neal Dep. at 42, Ex. 37 ¶ 12(c), Doc 199.) Plaintiff Lemon' and Haynes' contracts provided that prior s written consent would not be required unless Plaintiffs intended to men the Globetrotters or tion wear the Globetrotters uniform in outside appearances. (Haynes Dep. at 22 -23, Ex. 22 ¶ 16, Doc 196; Lemon Dep. at 115 Ex. 7 ¶ 15(b), Doc 199.) 32. No pension plan is mentioned in the player contracts. (Thornton Dep. at 27, Ex. 8 ,

Doc 201; Rivers Dep. at 46, Ex. 12, Doc 201; Hall Dep. at 28-29, Ex. 16, Doc 198; Sanders Dep. at 53, Ex. 23, Doc 198; Neal Dep. at 42, Ex. 37, Doc 199.) At best, Plaintiff Sanders' contract states that players and their spouses may be eligible to parti ipate in a defined c contribution retirement plan "promising no fixed level of benefits." (Sanders Dep. ta53, Ex. 23 ¶ 3(e), Doc 198.) RESPECTFULLY SUBMITTED this 28th day of November, 2005. By: s/Edward R. Garvey _ Edward R. Garvey, admitted pro hac vice GARVEY McNEIL & McGILLIVRAY, S.C. 634 W. Main St. #101 Madison, WI 53703 Ray Harris, # 007408 FENNEMORE CRAIG, P.C. 3003 N. Central Ave., Suite 2600 Phoenix, AZ 85012-2913 Attorneys for Defendants Harlem Globetrotters Int' l, Inc., Harlem Globetrotters Int' Foundation, and l Mannie L. & Catherine Jackson 1. I hereby certify that on November 28, 2005, a true and correct copy of the attached document was electronically transmitted to the Clerk' Office using the CM/EC System for s F 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]
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Florence M. Bruemmer ­ [email protected], [email protected] Joel Louis Herz - [email protected], [email protected] Ira S. Sacks ­ [email protected] Anders Rosenquist, Jr. ­ [email protected] Clay Townsend ­ [email protected], [email protected] Robert W. Goldwater, III ­ [email protected] 2. I hereby certify that on November 28, 2005, a true and correct copy of the attached document was sent via U.S. Mail, postage paid thereon, to the following partie at the addresses s, listed: Keith R. Mitnik Morgan Colling & Gilbert PA 20 N. Orange Ave. Suite 1600 Orlando, FL 32802

s/ Melody Tolliver

Case 2:04-cv-00299-DGC PHX/RHARRIS/1736323.1/43458.007

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