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 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 RESPONSE TO THE NEAL PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT

12 MEADOWLARK LEMON, et al., 13 14

Plaintiffs, vs. HARLEM GLOBETROTTERS

15 INTERNATIONAL, INC., et al.; 16

Defendants. INTERNATIONAL, INC., an Arizona Counterclaimant, vs. 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 memorandum in response to the motion for summary judgment filed by Plaintiffs Fred "Curly" Neal, Larry "Gator" Rivers, Dallas "Big D" Thornton, Robert "Showboat" Hall, Marques Haynes, and James "Twiggy" Sanders (collectively, "the Neal Plaintiffs" or "Plaintiffs"). (Neal SJ Mot., 10/28/05, Doc. 75.) The Neal Plaintiffs make starkly inadequate factual and legal arguments for their Lanham Act and common law claims, which are insufficient to support their motion. Plaintiffs also offer tortured and unavailing explanations of why their player contracts, which granted the Globetrotters the right to use Plaintiffs' names and likenesses, are invalid. The Neal Plaintiffs' motion for summary judgment should be denied and the HGI Defendants granted their costs and attorneys' fees pursuant to 15 U.S.C. § 1117(a). FACTS The HGI Defendants rely on their Response to Neal' Statement of Facts ("RNSOF") s and Defendants' Statement of Facts ("DSOF") filed with the HGI Defendants' motion for summary judgment (DSOF, 10/28/05, Doc 196). The HGI Defendants note that the Neal Plaintiffs' motion relies on several unauthenticated documents, facts that are not supported by the record citation, or facts that are not included in the record at all. (RNSOF at 2-3.; see, e.g., note 5, infra.) The Neal Plaintiffs also habitually extrapolate from their Statement of Facts to make new, unsupported statements, such as that the Globetrotters FUBU License Agreement was a "100 million dollar clothing deal." (Neal SJ Mot. at 13, Doc 75; RNSOF ¶ 25.) Even worse, the Neal Plaintiffs fail to cite facts at all for many assertions, such as their claim that HGI knowingly or recklessly published false information or innuendo about them. (Neal SJ Mot. at 8, Doc 75.) Such conclusory and self-serving statements cannot support the Neal Plaintiffs' motion for summary judgment. Fed. R. Civ. P. 56(c); Lujan v. Nat. Wildlife Fed' 497 U.S. 871, 888 (1990) ("The object of [FRCP n,

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56] is not to replace conclusory allegations of the complaint or answer with conclusory allegations of an affidavit."); FTC v. Publ' Clearing House, 104 F. 3d 1168, 1171 (9th Cir. g 1997) (holding conclusory, self-serving statements in affidavits or briefs are insufficient to create a genuine issue of material fact). The Neal Plaintiffs' "facts" must be taken with a large grain of salt and are insufficient to justify an award of summary judgment. STANDARD OF REVIEW Summary judgment is appropriate if the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The Neal Plaintiffs, as the moving party, bear the initial burden of informing the court of the basis for their motion and demonstrating an absence of issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Because the Neal Plaintiffs have the burden of proof at trial on all the issues presented on summary judgment, their "showing must be sufficient for the court to hold that no reasonable trier of fact could find other than" for them. Carnegie Mellon Univ. v. Hoffman La Roche, Inc., 148 F. Supp. 2d 1004, 1009 (N.D.Cal. 2001). "Cross motions for summary judgment may be probative of the non-existence of a factual dispute," Shook v. United States, 713 F.2d 662, 665 (11th Cir. 1983), although the court must still independently determine whether genuine disputes of material facts are present, Fair Hous. Council of Riverside County, Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir. 2001). The district court has no obligation to conduct a searching review of the record for evidence that establishes a genuine issue of fact. Id. at 1136-37.1
HGI notes the Neal Plaintiffs' attempt to join Plaintiff Lemon' motion for summary judgment. (Neal Jndr. Mot., s Doc 77, Case No. CV-04-1023 PHX DGC.) Plaintiff Lemon' motion contains a slightly more detailed analysis than the s Neal Plaintiffs offer on the Lanham Act and common law claims. (Lemon SJ Mot., Doc , at 8.) The joinder motion is obviously an attempt to bootstrap onto these arguments, thereby reducing the Neal Plaintiffs' work and avoiding the page limit for motions set forth in LRCiv 7.2(e). This effort fails, not only because Plaintiff Lemon' arguments are inadequate, s but because neither the Neal Plaintiffs nor Plaintiff Lemon has set forth specific facts connecting the Neal Plaintiffs to Lemon' legal arguments. Copying Plaintiff Lemon' motion thus does not assist the Neal Plaintiffs in meeting their s s
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ARGUMENT I. THE NEAL PLAINTIFFS HAVE NOT STATED A CLAIM AGAINST THE HARLEM GLOBETROTTERS INTERNATIONAL FOUNDATION, INC. OR MANNIE & CATHERINE JACKSON.

The Neal Plaintiffs move for summary judgment against HGI, HGIF, and Mannie & Catherine Jackson. (Neal SJ Mot., Doc 75, at 2.) Yet the Neal Plaintiffs do not present a separate factual and legal analysis for each HGI Defendant or explain how or why HGIF or the Jacksons are liable. In fact, the Neal Plaintiffs do not attempt to distinguish between the HGI Defendants, defining "HGI" to include all of the HGI Defendants in their brief. (Neal SJ Mot, Doc 75, at 2.)2 Meanwhile, it is undisputed that HGI was the only HGI Defendant which was a party to the licensing agreement at issue in this case (NSOF ¶ 8, Doc 74; DSOF ¶ 67, Doc 196); as such, HGI is the only proper HGI Defendant. (HGI SJ Mem., Doc 195, at 2-3.) The Neal Plaintiffs have thus not met their summary judgment burden, noted above, to establish the elements of their claims against each defendant. The Neal Plaintiffs' motion should be denied against HGIF and the Jacksons and the HGI Defendants' motion for summary judgment granted. (HGI SJ Mem., 10/28/05, Doc 195, at 2-3.) II. THE NEAL PLAINIFFS' LANHAM ACT CLAIM LACKS MERIT.

In a clumsy cut-and-paste job from Plaintiff Lemon' brief, the Neal Plaintiffs attempt to s prove the whole of their Lanham Act claim in a page and a half. (Neal SJ Mot., Doc 75, at 4-5.) Given the paucity of factual and legal analysis, no trier of fact could find for Plaintiffs, and their motion for summary judgment should be denied. The HGI Defendants have addressed the Lanham Act in their own motion for summary judgment and in their response to Plaintiff Lemon' motion for summary judgment, which the s
summary judgment burdens. The Neal Plaintiffs filed their joinder motion, as well as their motion for summary judgment and statement of facts, under the wrong case number, as they failed to use the "lead" case number as required by LRCiv 7.1(a)(3). Consequently, all other references to these documents will refer to the docket number in case number Case No. CV-04-1023 PHX DGC. 2 The Neal Plaintiffs' statement of facts defines HGI to include HGI and the Jacksons, curiously omitting the Foundation. (NSOF at 2, Doc 74.)

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Neal Plaintiffs copy. To avoid redundancy, the HGI Defendants reassert and incorporate their arguments and defenses into this brief by reference. (HGI SJ Mem., Doc. 195, at 3-10; HGI Resp. to Lemon SJ, 11/28/05, Section II.) The Neal Plaintiffs do not now, in their own summary judgment motion, support their legal claims with evidence. A factual showing of secondary meaning is entirely absent, whether applicable to the Neal Plaintiffs' names, likenesses, or player numbers. (Neal SJ Mot., Doc 75, at 4-5.) Plaintiffs do not even allege they are celebrities or that their names are well-known. (Id.) Plaintiffs' Lanham Act claim must fail for this reason alone. The Neal Plaintiffs' "likelihood of confusion" analysis is also factually deficient, to the extent it exists at all. Plaintiffs make the conclusory statement that "the use of their names in conjunction with a clothing line . . . implies to the public that the Plaintiffs are endorsing, or has [sic] given approval, to the product." (Id. at 5.) This statement is the whole of Plaintiffs' argument, contains no citation to fact, nor analysis of the "likelihood of confusion" factors. By contrast, the evidence in the record shows the opposite: there is no likelihood of consumer confusion. (DSOF ¶¶ 93, 9596.) Finally, Plaintiffs do not show-- or even attempt to show-- that they were injured by the Apparel or would be entitled to damages even if they prevailed on his Lanham Act claim. (HGI SJ Mem., Doc. 195, at 16-19.) The Neal Plaintiffs have not met their burden to show they are entitled to judgment under the Lanham Act, and their motion must be rejected by the Court. Because the Neal Plaintiffs fail to make a prima facie Lanham Act showing, their motion can be denied before addressing whether Plaintiffs gave consent to HGI' use of their names and s likenesses. However, Plaintiffs' motion also fails because each plaintiff admits he signed multiple contracts with the Globetrotters which granted the team the right to use and sublicense his name and likeness in perpetuity. (DSOF ¶¶ 15-18, 19-23.) The contracts, and Plaintiffs' failure to monitor the Globetrotters' use of their name and likenesses, bars any Lanham Act claim Plaintiffs could possibly make. (HGI SJ Mem., Doc. 195, at 10-14.) Additionally, Plaintiffs' claims are barred by laches, given their knowledge that the Globetrotters were using their names and likenesses over the years and their failure to object or file a lawsuit. (DSOF ¶¶ 24-31, 33-40, 42,

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50-56; HGI SJ Mem., Doc 195, at 14-16.) The Neal Plaintiffs have not made an adequate factual and legal showing to support their Lanham Act claim, and their motion for summary judgment must be denied. III. PLAINTIFFS' RIGHT OF PUBLICITY CLAIM LACKS MERIT.

As with the Lanham Act claim, the Neal Plaintiffs' common law right of publicity claim is also legally and factually unsupported and should be dismissed. The HGI Defendants again reassert and incorporate their previous arguments and defenses on this issue into this brief by reference. (HGI SJ Mem., Doc. 195, at 3-10; HGI Resp. to Lemon SJ, 11/28/05, Section II.) To the extent the Neal Plaintiffs' motion raises new facts-- primarily on the elements of California' right of publicity common law-- Plaintiffs' motion fails. They still have not shown s consumers purchased the Apparel because their information was on it, and therefore that the use of this information benefited the HGI Defendants in any way. (DSOF ¶¶ 96, 155, Doc 196.) Plaintiffs cannot show lack of consent, given their player contracts (id. ¶¶ 15-22) and long silence in objecting to the Globetrotters' use of their names (Id. ¶¶ 49-52, 56). Newton v. Thompson, 22 F.3d 1455, 1461 (9th Cir. 1994) (finding consent via written communication and failure to object). Finally, the Neal Plaintiffs cannot show injury, the fourth element of a right of publicity claim. Their only alleged injury is that they "were not compensated for the use of their names and likenesses." (Neal SJ Mot., Doc 75, at 6.) This is not an injury: Plaintiffs were not entitled to compensation, although HGI paid them anyway (DSOF ¶¶ 84-88, Doc 196) and nothing in the record suggests that they were injured by the Apparel (e.g., DSOF ¶¶ 103-104). Plaintiffs' statement does, however, seem to acknowledge the correct measure of damages for a right of publicity claim: fair market value of the use of the alleged trademark. Solano v. Playgirl, Inc., 292 F.3d 1078, 1090 (9th Cir. 2002). Plaintiffs have never established the fair market value of, or a reasonable royalty for, the use of their names and likenesses. (DSOF ¶ 97, Doc 196; GTFM Statement of Specific Facts ("SSF"), 10/24/05, ¶ 96, Doc 181.) Instead, Plaintiffs have purported only to show HGI' profits. (DSOF ¶¶ 96-99, Doc 196.) Plaintiffs have neither shown injury, nor s

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made a proper right of publicity damage claim. The Neal Plaintiffs have not established a right of publicity claim, and their motion for summary judgment should be dismissed. IV. THE HGI DEFENDANTS HAVE NOT BEEN UNJUSTLY ENRICHED.

The Neal Plaintiffs have likewise failed to establish unjust enrichment; as with Plaintiff Lemon, the Neal Plaintiffs have not even set forth the elements for unjust enrichment. (HGI Resp. to Lemon SJ, 11/28/05, Section IV.) Further, Plaintiffs cannot meet these elements: they have not been impoverished, there was a justification for the use of their name on the Apparel, and Plaintiffs have a remedy at law. (HGI SJ Mem., Doc 195, at 22-23 (citing DSOF ¶ 15, 66, 79, 103)); see also Stapley v. Am. Bathtub Liners, Inc., 162 Ariz. 564, 568, 785 P.2d 84, 88 (Ct. App. 1984). Rather than offering any facts to support these elements; Plaintiffs summarily state that HGI had no right to use their names and likenesses. (Neal SJ Mot., Doc 75, at 6.) Plaintiffs also fail to satisfy the elements of quantum meruit with evidence, instead asserting without support that these elements are met as to HGI. (Neal SJ Mot., Doc 75, at 6-7.) Plaintiffs' summary statements do not prove their prima facie unjust enrichment case, nor do they show that Plaintiffs are entitled to damages for that claim. Their motion for summary judgment must be denied. V. PLAINTIFFS' FALSE LIGHT INVASION OF PRIVACY CLAIM LACKS MERIT. The Neal Plaintiffs' false light invasion of privacy claim, copied from Plaintiff Lemon' s, also lacks merit.3 In this case, the Neal Plaintiffs' complained-of "false implication" is that "they endorsed the clothing line on which their names and likenesses were featured." (Neal SJ Mot, Doc 75, at 8.) Even if true-- and the Neal Plaintiffs have presented no evidence that consumers thought they endorsed the Apparel (DSOF ¶¶ 93, 95, 96, 150-51, Doc 196)-- it is hard to fathom how this implication would be highly offensive to a reasonable person. In fact, most Plaintiffs positively commented on the Apparel, even purchasing and wearing it. (Id. ¶ 92.) Plaintiffs argue
3

The HGI Defendants again reassert and incorporate their previous arguments and defenses on this issue into this brief by reference. (HGI Resp. to Lemon SJ, 11/28/05, Section V; HGI SJ Mem., Doc. 195, at 21-22.)

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that HGI' act of "stealing" their identity is highly offensive, but the proper question is whether s the published information is highly offensive, not the circumstances by which it was published. Plaintiffs thus do not satisfy the first prong of a false light invasion of privacy claim. Plaintiffs fail to even address the second element, reckless disregard, which they cannot show since HGI possessed (or believed it possessed) the right to sublicense Plaintiffs' name for the Apparel. (DSOF ¶¶ 18, 66, 70, Doc 196.) Plaintiffs' invasion of privacy claim lacks merit and their motion for summary judgment should be dismissed. VI. PLAINTIFFS' PLAYER CONTRACTS ARE VALID.

All Plaintiffs acknowledge that they signed player contracts while Globetrotters, and that these contracts granted the Globetrotters the right to use their names and likenesses. (DSOF ¶¶ 15-23.) Yet they now assert, in an increasingly desperate series of arguments, that their player contracts are invalid. Plaintiffs' assertions lack factual or legal support, and their motion for summary judgment must be rejected. A. HGI Owns the Player Contracts

The Neal Plaintiffs first attempt to assert that HGI does not possess the rights to use their names and likenesses because HGI never bought those rights. (Neal SJ Mot., Doc 75, at 8-9.) Yet the undisputed evidence shows that HGI did purchase the player contracts and the rights contained therein. The 1993 asset purchase agreement, by which HGI purchased the assets of the team, included references to "player contracts" in at least two areas: "intangible assets" and "books and records." DASOF ¶¶ 23-24. "Contract" was broadly defined in the agreement to include "all contracts, agreements, indentures, licenses, leases, commitments, plans, arrangements, sales orders and purchase orders of every kind." DASOF ¶ 25. All contracts were conveyed. DASOF ¶ 26. Furthermore, it was the undisputed intent of the seller to convey all the assets of the Harlem Globetrotters to HGI, both to get the best sale price, and to protect the seller from liability related to retaining assets. DASOF ¶¶ 14-15, 22. As one seller put it: "whatever we find or whatever we have we transfer." DASOF ¶ 16. It was also Mannie

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Jackson' understanding, on behalf of HGI and Mannie Jackson & Associates ("MJA"), the s purchasers of the team, that he would obtain the right to use former players' names and likenesses for commercial and promotional activities. DASOF ¶ 28. The fact that Plaintiffs' contracts are not specifically named in the transaction is immaterial, given the clear language of the agreement to convey all contracts and other intangible assets, and the intent of the parties to do the same. It is also immaterial that Plaintiffs' names or contracts were not specifically referenced as intellectual property rights transferred: "On the sale of a whole business in bankruptcy, trademarks impliedly pass to the buyer of the whole tangible assets, even though not specifically mentioned in the contract of sale." Am. Sleek Craft, Inc. v. Nescher, 131 B.R. 991, 997 (D.Ariz. 1991). The Neal Plaintiffs' contracts cannot be rejected on the basis that HGI never owned them. The Neal Plaintiffs also refer to collective bargaining agreements between the Harlem Globetrotters and the United Basketball Players' Association in the late 1970s and 1980s. (Neal SJ Mot., Doc. 75, at 8-9.) It is unclear what Plaintiffs are trying to show. If Plaintiffs argue that the collective bargaining agreement trumps the publicity rights portion of the player contracts, Plaintiffs are incorrect. The most recent bargaining agreement, dated 1983, incorporated the publicity portion of the individual contracts by reference. DASOF ¶ 7. The individual contracts and union contracts did not otherwise cover the same subject matter. DASOF ¶ 6. Moreover, the undisputed evidence shows the union ceased to exist sometime prior to the bankruptcy and the 1993 sale of the team. DASOF ¶¶ 8, 12, 19, 24. No union appeared at or participated in these transactions, and MJA and HGI did not assume, or even know of, any liabilities related to a union when it purchased the team. DASOF ¶¶ 8, 18-19. Any prior collective bargaining agreements have long been expired and have no bearing on this case. B. The Player Contracts are Not Unenforceable as Unconscionable.

The Neal Plaintiffs next contend that the decades of player contracts they signed are unenforceable because they are unconscionable, and because the contracts "constitute a non26 Case 2:04-cv-00299-DGC PHX/RHARRIS/1736636.1/43458.007 Document 265
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compete agreement in perpetuity." (Neal SJ Mot., Doc 75, at 9-13.) These ill-formed arguments fail, and Plaintiffs' motion must be denied. Plaintiffs recite the law of five states on unconscionability, citing various choice of law provisions in their final player contracts, to claim their player contracts are unenforceable. (Neal SJ Mot., Doc 75, at 10.) As Plaintiffs acknowledge, a court assesses unconscionability of a contract at the time it was made (id. at 10), taking into account its "its setting, purpose and effect." Restatement (Second) of Contracts, § 208, Comment A (2005) (hereinafter "Restatement"). A party challenging a contract as unconscionable must show procedural unconscionability based on disputed terms being "buried in a prolix document" or an absence of real negotiation or reasonable choice. Vance v. Villa Park Mobilehome Estates, 36 Cal. App. 4th 698, 709 (Ct. App. 1995). Merely showing unequal bargaining power or an adhesion contract is not enough, even when "the inequality results in an allocation of risks to the weaker party." Restatement § 208, Comment B & Reporter' Note, Comment B.. The challenging party must also show substantive s unconscionability by proving that the contract terms are so one-sided as to "shock the conscience." Stirlen v. Supercuts, Inc., 51 Cal. App. 4th 1519, 1532 (Ct. App. 1997). Inadequacy of consideration, by itself, does not invalidate a bargain. Id. Here, regardless of which state' law applies, the Neal Plaintiffs fail to cite any facts that s demonstrate either procedural or substantive unconscionability. Literally, Plaintiffs' only explanation of why the contracts are unenforceable is the unsupported statement that "it is both procedurally and substantively unconscionable to have an employee give up rights to his name forever for no consideration in order to sign an employment contract." (Neal SJ Mot., Doc 75, at 10.) Plaintiffs do not show that the contracts were procedurally or substantively unconscionable at the time they were signed (anywhere from 1946 to 1991, DSOF ¶ 7, Doc. 196), or that disparate bargaining power-- if any-- led to one-sided contract terms that "shock the conscience." Instead, it is undisputed that the publicity terms were clearly set forth in the contracts (DSOF ¶ 16-22, Doc. 196), and that Plaintiffs received salaries (generally, between $80-$100,000 annually,

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depending on the year and player) and other benefits as compensation for both their basketball playing and the use of their names and likenesses for Globetrotters activities (DASOF ¶ 29; DSOF ¶ 23, Doc 196). Plaintiffs have not shown that this consideration was unreasonable or insufficient at the time the contracts were signed. (Neal SJ Mot., Doc 75, at 9-13). Plaintiffs' unsupported statement that the contracts required them to "give up rights to his name forever," is false. The player contracts convey the right to use Plaintiffs' names in relation to Globetrotter activities (DSOF ¶ 16-22, Doc. 196), and did not and could not have asked Plaintiffs to give up rights to use their own names. (DASOF ¶ 31); Abdul-Jabbar v. Gen. Motors Corp., 85 F.3d 407, 411-12 (9th Cir. 1996). It is also notable that Plaintiffs signed multiple contracts with the same provision. (DSOF ¶¶ 15-22, Doc 196.) Their status as repeat players to the contracts further undercuts any inference of unequal bargaining power or oppression at the time the contracts were signed. Davidson & Assoc. v. Internet Gateway, 334 F. Supp. 2d 1164, 1179-80 (E.D.Mo. 2004) (applying California law) (finding no unconscionability). Finally, the Court need not decide whether the contracts are unenforceable because HGI is not seeking specific performance of the contracts. Restatement § 208, Comment G (stating the most common remedy for a unconscionability claim is denial of specific performance). HGI is simply asserting the contracts as a defense against Plaintiffs suit over rights that they sold to the Globetrotters. It is hard to know what to do with Plaintiffs' "restrictive covenant" claim. They argue that "restrictive covenants that tend to prevent an employee from pursuing a similar vocation after termination of employment are disfavored." (Neal SJ Mot., Doc 75, at 12.) In their next sentence, they state, "[t]he dominant purpose of the player contracts when signed by Plaintiffs was to play basketball-- not to do a ` 100 million dollar' clothing deal decades after the termination of the contract." (Id. at 13.) This is a non sequitur. Plaintiffs fail to show, through this disjointed series of incomplete thoughts, how any of this undoes the fact that Plaintiffs granted the Globetrotters the right to use their names and likenesses. C. The 1993 Bankruptcy Proceedings Did Not Extinguish the Contracts or HGI' Right s to Use Plaintiffs'Names and Likenesses.
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Finally, the Neal Plaintiffs allege that the contracts granting their publicity rights to the Globetrotters were nullified in bankruptcy proceedings for International Broadcasting Corporation, Inc. (Neal SJ Mot. at 12-13, Doc 75.) According to Plaintiffs, even though "Plaintiffs' names were granted in perpetuity to Plaintiffs' numerous former employers [presumably meaning the Globetrotters], such rights were extinguished before HGI came on the scene by bankruptcy proceedings." (Id. at 12.) In other words, HGI and Mr. Jackson were swindled because the reorganized IBC did not have all the assets it claimed to have sold to HGI and Mr. Jackson. These arguments are spurious and should be rejected. 1. Facts.

In the early 1990s, International Broadcasting Corporation, Inc. ("Old IBC"), which owned the Harlem Globetrotters and other entertainment-related businesses, declared bankruptcy. (DASOF ¶¶ 9-10.) Old IBC' creditor, National Westminster Bank USA s ("NatWest"), reorganized the company and assumed it as a NatWest subsidiary ("New IBC"). (DASOF ¶¶ 10, 12 .) Pursuant to the Bankruptcy Court-approved Plan of Reorganization, all of New IBC' Globetrotter-related assets were transferred to a subsidiary of New IBC called s Harlem Globetrotters, Inc. ("HG"). (DASOF ¶ 13.) MJA and HGI purchased all of the assets from HG in 1993. (DASOF ¶¶ 20-21.) 2. The Player Contracts Were Not Executory Contracts.

The Neal Plaintiffs first assert that their player contracts were executory contracts that needed to be assumed in the bankruptcy reorganization in order to be retained as assets and sold to HGI. (Neal SJ Br. at 13-15, Doc 75.) An executory contract is not defined in the bankruptcy code, but the Ninth Circuit has stated that "executory contracts contain ` obligations of both parties that are so far unperformed that the failure of either party to complete performance would constitute a material breach and thus excuse the performance of the other.' In re Qintex Entm' Inc., 950 F.2d 1492, 1495 (9th " t, Cir. 1991) (quoting In re Wegner, 839 F.2d 553, 536 (9th Cir. 1988)). "Thus, we will only

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consider a contract executory if material unperformed obligations remain for both parties." Id. In other words, more than an ongoing obligation is needed; it must be a substantial ongoing obligation under the contract. "If either party has ` substantially performed' its side of the bargain, such that the party's failure to perform further would not excuse performance by the other party, then the contract is not executory." In re Texscan Corp., 976 F.2d 1269, 1272 (9th Cir. 1992) (finding no executory contract because continuing obligations of both parties to an insurance policy were not material) (citing In re Munple, 868 F.2d at 1130). License agreements can contain substantial performance obligations, such as payment of royalties and indemnification provisions. In re Gencor Indus., Inc., 298 B.R. 902, 911 (M.D.Fla. 2003). "Licensing agreements are not, however, universally considered executory contracts." In re Qintex, 950 F.2d at 1495 (citing case where book contract was not executory because authors had no remaining duties under the contract). Moreover, bankruptcy law, and specifically a determination of "executoriness" under 11 U.S.C. § 365, requires distinct provisions of agreements to be separated and evaluated individually. In re Pacific Express, Inc., 780 F.2d 1482, 1486 (9th Cir. 1986). This is true even when distinct provisions are related parts of the same transaction. Id. (holding that even agreements that are part of a single transaction must be assessed separately as to whether they are executory); In re Duncane Gas Grills, Inc., 320 B.R. 324, 335 (S.D.S.C. 2004) (agreement assigning rights to a patent is assessed separately from a related service contract between the same parties and regarding the same product). Independent portions of a single transaction must each qualify as "executory" under 11 U.S.C. § 365 to require assumption or rejection. Pacific Express, 780 F.2d at 1486 (citing Jenson v. Cont' Fin. Corp., 591 F.2d 477, 482 (8th l Cir. 1979); In re Smith Jones, Inc., 26 B.R. 289, 291 (D.Minn. 1982)). Plaintiffs contend that the publicity provisions of their player contracts are executory in their own rights, and also attempt to "piggyback" them onto other allegedly on-going provisions of the player contracts and other contracts. These efforts fail. Taking the publicity provisions

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alone, Plaintiffs fail to point to any ongoing obligation of both parties that, if unfulfilled, constitute a material breach. In re Qintex Entm' Inc., 950 F.2d at 1497. The publicity t, provisions in the player contracts do not impose any on-going obligation on the Globetrotters such as payment of royalties or indemnification (DSOF ¶ 16-22, Doc 196), and Plaintiffs have not cited any. The implied covenant not-to-sue that Plaintiffs refer to does not create an ongoing "affirmative duty" of Plaintiffs, but is better characterized as "a defense to the licensee if the licensee is sued for allegedly exceeding the scope of the license." In re Gencor, 293 B.R. at 912 (finding no executory contract).4 Even if the purported covenant-not-to-sue was an ongoing obligation, that obligation is immaterial. As Plaintiffs themselves point out, "[t]he dominant purpose of the player contracts when signed by the Plaintiffs was to play basketball." (Neal SJ Mot. at 13, Doc 75.) There is no claimed breach of these provisions, much less any other provision in the contracts. Second, Plaintiffs cannot piggyback the publicity provisions of their contracts onto other allegedly on-going provisions of those contracts. Specifically, Plaintiffs point to a covenant not to compete in Sanders' contract and provisions related to making appearances in Rivers' and Thornton' contracts.5 (Neal SJ Mot. at 15-17, Doc 75.) Because the provisions Plaintiffs cite s as executory are distinct from the provisions granting the Globetrotters the rights to use Plaintiffs' names and likenesses, they do not make the publicity provisions executory. In re Pacific Express, 780 F.2d at 1486. This is particularly true since the publicity provisions relate to intangible benefits in Plaintiffs' names and likenesses. Duncane Gas Grills, 320 B.R. 324, 328-30 (upholding a grant of rights to an invention despite the rejection of a related executory service contract).6 Further, the contracts contain no on-going obligation for Mr. Rivers and Mr.
The publicity provisions of the player contracts are not "licensees" for Lanham Act purposes unless the Plaintiffs possess protectable marks, else there is nothing to license. Because Plaintiffs have not shown their names possess secondary meaning and are therefore protectable marks, Section II, supra, their defense fails. 5 Plaintiffs also point to pension plans in the player contracts, Neal SJ Mot. at 14, Doc 75, but in fact, the player contracts do not refer to a pension plan or on-going pension obligations, DASOF ¶ 32. 6 Duncane Gas Grills also demonstrates that Plaintiffs cannot attempt to attach their player contracts to other, completely separate contracts to make the player contracts executory. Plaintiffs specifically attempt to incorporate the
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Thornton to now make Globetrotters appearances; the contracts do not read in that fashion, and it takes an absurd interpretation to claim that they do. (DSOF ¶¶ 20-21, Doc 196.) And even if Sanders' 1991 contract was executory because of an allegedly on-going non-compete provision, he signed several previous contracts granting the Globetrotters the right to use his name and likeness that were not. (Id. ¶ 22.) In sum, the provisions granting the rights to use Plaintiffs' name and likeness in Plaintiffs' player contracts were not executory agreements and were never rejected in bankruptcy. 3. Even if the Player Contracts Were Rejected in Bankruptcy, That Would Not Cancel the Globetrotters' Right to Use Plaintiffs' Names and Likenesses. Plaintiffs go on to argue that the purported rejection of their player contracts is a material breach of those contracts. (Neal SJ Mot. at 16-17, Doc 75.) Plaintiffs cite nothing for their ipse dixit statement: "IBC' rejection committed a material breach of the Player Contracts such that s IBC had no legal right to assign . . . the purported licenses." (Neal Br. p. 16, lns. 25-28). Plaintiffs fail to recognize that rejecting a contract under 11 U.S.C. § 356 does not rescind or nullify the contract as if it never existed. In re Continental Airlines, 981 F.2d 1450, 1459-60 (5th Cir. 1993) (stating 11 U.S.C. § 365(g) "does not invalidate the contract or treat the contract as if it did not exist."); In re Modern Textile, Inc., 900 F.2d 1184, 1191 (8th Cir. 1990) (same); In re Blackburn, 88 B.R. 273, 276 (S.D.Cal. 1988) (finding rejection of contract under 11 U.S.C. § 365 does not terminate the contact); Societe Nationale Algerienne etc. v. Distrigas Corp., 80 B.R. 606, 608 (D.Mass. 1987) (there is a difference in the Bankruptcy Code between "breach" and "rejection" of executory contracts and a "breach" does not result in a "termination"); In re Picnic ` Chicken, Inc., 58 B.R. 523, 526 (S.D.Cal. 1986) (same). Therefore, even if Plaintiffs N could show that their player contracts (and the provision granting the Globetrotters the right to

collective bargaining agreement and alleged pension plans into their player contracts. In addition to being unauthenticated, these documents were, unlike the player contracts, rejected in bankruptcy. (DASOF ¶ 12.)

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use their publicity rights) were executory and rejected in bankruptcy, that would not get the Plaintiffs were they want to go. It would not cancel the grant of rights to the Globetrotters. D. Plaintiffs are Barred from Challenging their Player Contracts.

Plaintiffs decide now, decades after they signed their player contracts, to claim they are unenforceable or invalid. Plaintiffs' are barred both by laches and res judicata. A party is barred by laches when it unreasonably delayed filing suit, to the detriment of the defendant. Jarrow Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d 829, 835 (9th Cir. 2002). HGI refers to and realleges the discussion of laches in its own summary judgment brief, which demonstrated that laches bars Plaintiffs' current claims that HGI cannot use their names and likenesses for promotion and commercial purposes. (HGI SJ Mem. at 14-16, Doc 195.) This analysis holds equally true to Plaintiffs' present challenge of their player contracts. It is undisputed that Plaintiffs signed their last player contracts a minimum of fourteen years ago (Sanders), and as much as thirty-two years ago (Hall). (DSOF ¶¶ 17, 22, Doc 196.) As Plaintiffs are aware, the Globetrotters have used and continue to use Plaintiffs' names, likenesses, and other identifying information for decades pursuant to these contracts. (Id. ¶¶ 2431, 33-37, 58, 68.) Despite their knowledge of this fact, Plaintiffs have not filed suit against the Globetrotters regarding the publicity provisions of their contracts (Id. ¶ 56), much less objected to them (Id. ¶¶ 49-52). If the contracts were so unconscionable, illegal, or void due to bankruptcy, Plaintiffs would have objected before now, decades after the contracts were signed, and more than ten years after the IBC bankruptcy. Plaintiffs' delay in filing suit is highly prejudicial to HGI, both in an evidentiary and economic sense. (Id. ¶¶ 29, 35-37, 59, 61-62.) Plaintiffs are barred from challenging their contracts by laches. Plaintiffs are additionally barred from claiming their contracts were not transferred through New IBC' plan of reorganization. When IBC filed for bankruptcy, title to the publicity s rights the Globetrotters obtained from Plaintiffs became part of the bankruptcy estate. 11 U.S.C. §§ 301, 541, 1101 (stating at filing of bankruptcy, all of debtor' property is placed in the s

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bankruptcy estate). For purposes of the bankruptcy proceeding, IBC' "property" included "all s legal or equitable interests of the debtor," including intangible rights to Plaintiffs' publicity. 11 U.S.C. § 541(a)(1); Cal. State Bd. of Equalization v. Farmers Markets, Inc., 792 F.2d 1400, 1403 (9th Cir. 1986) (holding debtor' estate includes intangible property and rights owned by s debtor). As noted above, the plan of reorganization transferred all Globetrotter assets through New IBC, and then to its Globetrotter subsidiary, HG. (DASOF ¶¶ 12, 13.) MJA and HGI subsequently purchased all of the Harlem Globetrotters' tangible and intangible assets from HG.7 (DASOF ¶¶ 20-22.) In their attempt to undo their prior grant of permission to the Globetrotters to use their names and likenesses, Plaintiffs assert that these intangible rights should not have been transferred through the Plan of Reorganization. However, if Plaintiffs wanted to attack this transfer, they were required to do so through the bankruptcy proceeding or a motion under Fed. R. Civ. P. 60. Federal Deposit Ins. Co. v. Shearson-Am. Express, Inc., 996 F.2d 493, 498 (1st Cir. 1993) ("Orders, judgments and decrees of the bankruptcy court from which an appeal is not timely taken are final, even if erroneous."); Futuresource, LLC v. Reuters Ltd., 312 F.3d 281, 286 (7th Cir. 2002) ("the order approving a bankruptcy sale is a judicial order and can be attacked collaterally only within the tight limits that Fed. R. Civ. P. 60(b) imposes on collateral attacks on civil judgments."); Cummings Properties, LLC v. Heidelberg Print Fin. Am., Inc., 200 U.S.Dist. LEXIS 15279, *10 (D.Mass. Aug. 12, 2002). The Order approving the Plan of Reorganization is res judicata on the issue of whether all intangible assets of the Globetrotters passed to the Reorganized IBC, which sold them to HGI. 11 U.S.C. § 1141(a) and (b) (stating final plan of reorganization binding on all creditors and vests all property in the estate of the debtor); Katchen v. Landy, 382 U.S. 323, 334 (1966) ("The normal rules of res judicata and

Even if the transfer of assets from New IBC to HG or the Asset Purchase Agreement between Globetrotters HG and HGI/MJA did not specify all intangible assets and trademarks, trademarks are transferred as part of the sale of a business even if they are not specifically mentioned in the sale documents. Am. Sleek Craft, Inc. v. Nescher, 131 B.R. 991, 997 (D.Ariz. 1991); Am. Dirigold Corp. v. Dirigold Metals Corp., 125 F.2d 446, 453 (6th Cir. 1942).

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collateral estoppel apply to the decisions of the bankruptcy courts."); In re Clinton Street Food Corp., 254 B.R. 523, 530-31 (S.D.N.Y. 2000) ("bankruptcy order approving a sale of assets is a final order for res judicata purposes" and "promotes the important public policy favoring the finality of orders transferring ownership of bankruptcy estate assets"). Therefore, even Plaintiffs had a valid theory to attack the transfer of their publicity rights with all Globetrotter intangible assets under the Plan of Reorganization-- and had supported their theory with admissible evidence-- Plaintiffs are still barred from advancing their theory in this proceeding. For all of the above reasons, Plaintiffs' player contracts and the publicity provisions contained therein are valid and enforceable, and Plaintiffs' attempts to disavow them should be rejected. CONCLUSION For the reasons stated above, the HGI Defendants ask that the Court deny Plaintiffs' motion for summary judgment on their Lanham Act and common law claims, and grant Defendants' motion for summary judgment on these claims for the reasons specified in Defendant' memorandum supporting summary judgment. s 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

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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/ECF System for filing and s 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], [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 parties, at the addresses listed: Keith R. Mitnik Morgan Colling & Gilbert PA 20 N. Orange Ave., Suite 1600 Orlando, FL 32802 s/ Melody Tolliver

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