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Anders Rosenquist, Jr. #002724 Florence M. Bruemmer #019691 Rosenquist & Associates 80 E. Columbus Phoenix, Arizona 85012 Attorneys for Plaintiff Meadowlark Lemon Clay Townsend, #023414 Morgan, Colling & Gilbert, PA 20 N. Orange Avenue, 16th Floor Orlando, Florida 32802 Attorneys for Plaintiffs Neal, Rivers, Thorton, Hall, Haynes and Sanders IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA MEADOWLARK LEMON, a married man, Plaintiff, vs. HARLEM GLOBETROTTERS INTERNATIONAL, JOINT RESPONSE BY ALL PLAINTIFFS TO GTFM, LLC'S MOTION TO STRIKE INC., an Arizona corporation; HARLEM GLOBETROTTERS INTERNATIONAL PLAINTIFFS' EXPERT REPORT FOUNDATION, INC., an Arizona corporation; MANNIE L. JACKSON and CATHERINE JACKSON, husband and wife; FUBU THE COLLECTION, LLC, a New York limited liability company doing business in Arizona; GTFM, LLC, a New York limited liability company doing business in Arizona; Defendants. Case No. CV 04-299 PHX-DGC and CV 04 1023 PHX-DGC
HARLEM GLOBETROTTERS INTERNATIONAL, INC., an Arizona corporation, Counter-claimant, vs. MEADOWLARK LEMON, a married man, Counterdefendant.
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Plaintiffs Lemon, Neal, Rivers, Thorton, Hall, Haynes and Sanders, (hereinafter collectively as "Plaintiffs") hrough their undersigned counsel, respectfully submit this Joint Response from all Plaintiffs to GTFM, LLC's (hereinafter "GTFM" or "FUBU" or "Defendants") Motion to Strike Plaintiffs' Expert Report. following reasons. I. DISCOVERY & DISCOVERY DISPUTES CLOSED SEPTEMBER 30, 2005. By Order of this Court dated April 8, 2005, the deadline for completion of fact discovery was September 30, 2005. Therefore, all discovery was to be completed, and all discovery disputes were to be brought forth by September 30, 2005. In fact, the parties had a discovery conference with the Court on September 30, 2005 and GTFM failed to raise this as an issue. GTFM did not file its Motion to Strike Plaintiffs' Expert Report until October 27, 2005, nearly a full month past the deadline set by this Court. Because GTFM did not raise this discovery dispute prior to the deadline, GTFM's Motion Plaintiffs respectfully request that GTFM's Motion be denied for the
should be denied. II. GTFM & FUBU ARE PRECLUDED FROM RAISING THIS DISCOVERY DISPUTE, AS THIS DISPUTE WAS NOT FIRST DISCUSSED WITH THE JUDGE. This Court stated in its Amended Case Management Order dated October 6, 2004, that "the parties shall not file written discovery motions without leave of Court. If a discovery dispute arises, the parties promptly shall contact the Court to request a telephone conference concerning the dispute." Additionally, in the same Order, this Court stated, "The Court may order written briefing if it does not resolve the dispute during the telephone conference." GTFM failed to raise this discovery dispute regarding Plaintiffs' expert report by contacting the Court to request a telephone conference. Furthermore, GTFM filed the written discovery motion
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without leave of Court. The Court never ordered written briefing on the discovery issues that GTFM raises regarding Plaintiffs' expert report. Therefore, because GTFM failed to first contact the Court regarding this discovery dispute, and because GTFM filed their Motion without leave of Court, GTFM's Motion should be stricken. Additionally, GTFM should be sanctioned for filing its written discovery motion without leave of Court by awarding Plaintiffs their attorneys' fees in connection with responding to GTFM's Motion. III. PLAINTIFFS' EXPERT REPORT MEETS THE REQUIREMENTS OF RULE 702 OF THE FEDERAL RULES OF EVIDENCE. GTFM asserts in its Motion that Plaintiffs' expert report should be stricken because it does not meet the requirements of Rule 702 of the Federal Rules of Evidence. GTFM asserts that Plaintiffs' expert report does not set compensatory damages for the individual Plaintiffs, only for all Plaintiffs in the aggregate. However, Plaintiffs' expert did calculate compensation based on the individual Plaintiffs as much as possible, both by player name and number as shown on the schedules used by Plaintiffs' expert. See Affidavit of Plaintiffs' Expert, Sandy Abalos, ¶ 2, 6, Attached as Exhibit "A". It was the Defendants information that was incomplete. See Exhibit "A" ¶ 3-5. GTFM never provided Plaintiffs with a complete breakdown of profits by individual Plaintiff, and in depositions, representatives of FUBU even acknowledged that the information was not broken down in that manner. See Exhibit "A" ¶ 5. Additionally, GTFM asserts that Plaintiffs' expert report does not meet the requirements of the Rule 702 because it is "speculative." GTFM alleges that Plaintiffs' expert report is `speculative' because it determined the amount of damages by using sales of styles that included non-plaintiffs names, returns, samples, and styles that were unable to be determined had any link with any Plaintiff. However, these are not proper reasons to strike Plaintiffs' expert report. Instead, if GTFM disagreed with
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Plaintiffs' expert calculations, GTFM should have hired its own expert. GTFM had the chance to hire an expert to rebut Plaintiffs' expert calculations, but chose not to do so. Now that it is too late for GTFM to hire its own expert, GTFM is attempting to have Plaintiffs' expert report stricken simply because GTFM does not agree with Plaintiffs' expert calculations. The fact that GTFM does not like Plaintiffs' expert report is not a proper legal basis for excluding it. Instead, the proper remedy would have been for GTFM to hire its own expert to rebut Plaintiffs' calculations. GTFM's Motion to Strike on this basis has clearly been made in bad faith. GTFM also attempts to have Plaintiffs' expert report excluded because it is not reliable. However, Plaintiffs' expert relied on hundreds of pages of documentary evidence that was provided by Defendants. Therefore, unless GTFM is alleging that the documentary evidence it provided to Plaintiffs was unreliable, there is no way that Plaintiffs' expert report, which relied on that evidence, can be unreliable. Furthermore, GTFM alleges that Plaintiffs' expert report should be excluded because the report only calculates damages on a theory of disgorgement/unjust enrichment. Again, that is not a proper legal basis for exclusion of Plaintiffs' expert report and instead, that point is better argued to the jury as the measure of damages is an issue that is to be left to the fact finder. If GTFM wanted to offer an alternative method of measuring damages other than that proposed by Plaintiffs' expert, GTFM should have hired its own expert as HGI did. IV. PLAINTIFFS' EXPERT REPORT DOES NOT VIOLATE THIS COURT'S AUGUST 3rd & AUGUST 18th ORDERS. Fourth, GTFM requests that Plaintiffs' expert report be stricken because the report is in violation of this Court's August 3 and August 18, 2005 Orders which state that Plaintiffs shall provide full and complete expert disclosures no later than August 19, 2005, and may not supplement the report thereafter.
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Plaintiffs are not in violation of this Court's Orders, as Plaintiffs did provide complete expert disclosures by the deadline and has not since supplemented Plaintiffs' expert report. Plaintiffs' expert report does comment in certain places that if certain additional information actually existed, the report could be supplemented. Plaintiffs' expert listed that specific information because the Defendants affirmatively asserted that those items did not exist. See Weisfeld (CEO of GTFM, LLC) Transcript (hereinafter "Tr.") p. 54-55, 86-87, attached as Exhibit "B"; See Blenden (CFO of GTFM, LLC) Tr. p. 100-102, 116119, 145-149, 172, attached as Exhibit "C"; See Abalos Tr. p. 56-59, 184-185, attached as Exhibit "D". If the information had existed, it would have been helpful to Defendants. The point of the comment is that GTFM had in fact confirmed that those items sought by Plaintiffs' expert did not exist. See Exhibit "B" p. 54-55, 86-87; See Exhibit "C" p. 100-102, 116-119, 145-149, 172; See Exhibit "D" p. 56-59, 184-185. However, GTFM's confirmation to Plaintiffs was partly a lie, since GTFM sent five more disclosure packets including some of the exact discovery items Plaintiffs' expert was seeking, right up to the discovery cutoff. See Cover Letters from Drier LLP to Plaintiffs' attorneys dated August 17, 2005, August 24, 2005, September 13, 2005 and September 29, 2005, attached as Exhibit "E". GTFM continually refused to reliably quantify sales. See Exhibit "B" p. 28-32, 34-38, 40-50, 53-62, 86-89, 9295, 97-100; See Exhibit "C" p. 31-33, 37-40, 45-46, 50, 52-54, 65-66, 68-69, 74-76, 78-81, 87-88, 9596, 99-103, 116-119, 145-149, 150-152, 166-172; See Exhibit "D" p. 40, 102-105, 111-114, 133-135, 137-141. Because of GTFM's refusal to reliably quantify sales, Plaintiffs' expert was unable to
completely calculate compensation based solely on individual Plaintiffs. See Exhibit "D" p. 40, 102105, 111-114, 115, 119-121, 130, 133-135, 137-141, 144, 148-149, 155-156, 184-187, 207-208. GTFM's material failure to provide the information affirmatively requested by Plaintiffs and Plaintiffs' expert. Plaintiffs' specifically requested to depose the "persons within GTFM with the most knowledge of manufacturing/distribution and/or sales of Globetrotter's merchandise." -5Document 220 See Emails
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between Defendants' Counsel and Plaintiffs' counsel, attached as Exhibit "F". For that specific reason, Plaintiffs' expert attended all depositions of Defendants to collect information for her expert report. Additionally, during the depositions, Plaintiffs' counsel, Plaintiffs' expert, and Ira Sacks had a meeting wherein Plaintiffs' expert told Mr. Sacks exactly what information she needed for her expert report i.e., a reliable quantification of sales and sales/profits broken down by individual Plaintiff. However, that information was not provided and Mr. Weisfeld and Mr. Blenden, who were produced at the depositions as the "persons with the most knowledge of manufacturing/distribution and/or sales of Globetrotter's merchandise," did not know much of anything about the manufacturing, distribution, and sales of the Globetrotter's merchandise. See Exhibit "B"; See Exhibit "C". Also, GTFM states that it previously requested that Plaintiffs submit a revised expert report as the expert report Plaintiffs have submitted is in violation of the Court's Orders. Plaintiffs could not provide a revised expert report because GTFM would not state specifically what they were objecting to. Even if GTFM did tell Plaintiffs what they were objecting to, Plaintiffs asserted and still maintain herein that there is nothing objectionable about Plaintiffs' report. Lastly, on pages three to four of GTFM's Motion to Strike, GTFM states that Plaintiffs' expert report seeks to disgorge all gross profit earned by GTFM from the sale of the infringing goods, as well as statutory damages pursuant to the Lanham Act, despite the fact that Plaintiffs' names, jersey numbers and/or likenesses are not registered trademarks. However, that reasoning is immaterial to the Motion to Strike, and has nothing to do with the relevancy and completeness of Plaintiffs' expert report. That argument is completely improper for a Motion to Strike, and should have instead been raised in a proper motion for summary judgment. V. THE DEFICIENCIES IN PLAINTIFFS' EXPERT REPORT ARE DUE TO THE DEFENDANTS' MISCONDUCT AND THEREFORE CANNOT BE A BASIS FOR STRIKING PLAINTIFFS' EXPERT REPORT. -6Document 220
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 2002). In the Lanham Act, and similar common law cases, plaintiff is not required to prove the amount of damages with mathematical certainty. U-Hall International, Inc v. Jartran, Inc., 601 F.Supp. 1140, 1150 (D. Arizona 1984), aff'd in part, rev'd in part on other grounds, 793 F.2d 1034 (9th Cir. 1986). The U-Hall court also awarded lost profits, treble and punitive damages for Plaintiff's claims, including under 15 U.S.C. §1117, the Lanham Act claim. Id. Here, the Defendants cannot (or refused to) reliably quantify sales. Mannie Jackson first crowed that it was a "100 million dollar" deal (See ESPN Article, attached as Exhibit "G"), then that it was a "60 million dollar deal" (See "Spinning the Globe" by Ben Green p. 378, attached as Exhibit "H"). At the depositions of defendants, who knew that they were appearing as witnesses in this case as to sales of infringing garments, inconsistent testimony reveals the difficulty Plaintiffs encountered: · · · "32 million was sold at wholesale." (See Mannie Jackson, CEO of Harlem Globetrotters International, Inc., Tr., p. 122, attached as Exhibit "I"). "Somewhere around 20 million was sold at wholesale." (See Exhibit "B" p. 87). "No breakdown was provided to HGI by player name." (See Colleen Lenihan, the HGI executive who handled the licensing agreement with GTFM, Tr. p. 36, attached as Exhibit "J"). -7Document 220 A. Defendants Refused to Produce Information That Reliably Quantified Sales. The Courts have recognized the difficulty in quantifying damages in infringement cases. Difficulty can arise because of recalcitrant infringers who abuse the discovery process, or from the very nature of international merchandising--layers of sublicensing and manufacturing deals across numerous countries.. Plaintiffs' expert is reasonably reliable and relevant. Plaintiffs' believe it is now GTFM's burden to prove what amount, if any, of its gross revenues were not due to the misappropriation of Plaintiffs' marks. J. Thomas McCarthy, The Right of Publicity and Privacy, §11.34 at 11-80 (2d Ed.
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· · · · · · · · · · · · · · · ·
"We didn't keep records by name." (See Exhibit "C" p. 148). "FUBU didn't know if any money was received in 2005." (See Exhibit "C" p. 65). "FUBU doesn't know if revenue is still coming in from the licensing agreement." (See Exhibit "C" p. 50). "FUBU doesn't know if retailers are still selling." (See Exhibit "C" p. 46). "Can't even give a ballpark of total FUBU Globetrotter sales." (See Syracuse, CFO of Harlem Globetrotters International, Inc. Tr. p. 69, 70, attached as Exhibit "K"). "FUBU is still trying to get Japan and European sales as of August 2, 2005." (See Exhibit "C" p. 166, 167). "Quantity of inventory unknown." (See Exhibit "C" p. 68, 175). "They're only some Japanese sales." (See Exhibit "B" p. 40). "There may have been some European Sales, too." (See Exhibit "C" p. 167). (FUBU disclosed European sales for the first time on September 13, 2005, almost a month after the extended expert deadline of August 19, 2005). (See Exhibit "N"). "There are Philippines sales." (See Phipps, Plaintiffs' investigator, Tr. p. 62, attached as Exhibit "L"). "The projected cost structure of sales was just prepared and produced by FUBU August 1 or 2, 2005." (See Exhibit "B" p. 93). "The clothes were sold in 30 countries." (See Exhibit "I" p. 125). "The clothes were only sold in Japan and a few others--30 countries `extremely unlikely'." (See Exhibit "C" p. 54). "The instructions to manufacturers would say how the hangtags were used." (See Exhibit "B" p. 61). "I don't think hangtag data exists." (See Email from Ira Sacks dated 8/10/2005, attached as Exhibit "U"). Plaintiffs' note that FUBU's attorney, Ira Sacks, would not turn over manufacturing information--only a "sampling." (See Emails from Ira Sacks, attached as Exhibit "M").
Furthermore, Defendants encountered the same difficulties when attempting to ascertain the role of Defendant FUBU the Collection, LLC: · · · · Revenue from the licensing agreement using Plaintiffs' names clearly went to FUBU the Collection, LLC. (See Daymond Aurum, CFO of FUBU the Collection, LLC, Tr. p. 4653, attached as Exhibit "V"). The corporate representative for FUBU the Collection, LLC could not even give a ballpark estimate of the amount paid to FUBU the Collection, LLC or of even the gross moneys earned from the licensing deal. (See Exhibit "V"). FUBU the Collection retail stores were making sales of infringing garments and hangtags bearing Plaintiffs' names in Manila, Phillipines as late as August 2005 that were never disclosed by the FUBU Defendants. (See Exhibit "L"). FUBU's counsel represented that the unreported Philippines sales were either "unauthorized" or "transshipped from a USA retailer" but provided no evidence of such
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to Plaintiffs. (See Email from Ira Sacks dated 9/19/2005 and 9/29/2005, attached as Exhibit "W"). The Philippines retailer indicated "FUBU the Collection" on its bags, receipts and signs and FUBU's counsel acknowledges that FUBU the Collection is a "common law mark" owned by the FUBU Defendants. (See Pictures of Bag and Receipt, attached as Exhibit "X"; See Email from Ira Sacks dated 9/20/2005, attached as Exhibit "Y").
In this context, Plaintiffs' expert should not be disqualified because she encountered difficulties caused by GTFM. She has provided a reasonable basis for her opinion that 1) there were infringements, and 2) profits were made that should be disgorged. A party cannot disqualify an expert if they are the cause of a deficiency in factual basis. FUBU has made supplemental disclosures after the expert disclosure deadline (July 27, 2005) and more disclosures after the extended deadline (August 11, 2005): August 17, 2005, August 24, 2005, September 13, 2005, and September 29, 2005, (See Exhibit "E"). FUBU should not be able to withhold facts and abuse the discovery process, than argue that an expert's testimony is speculative. FUBU should bear the risk of any uncertainty. The 9th Circuit has declined to second guess a jury's verdict resulting in an allegedly speculative measure of damages (used the evidence of royalty on one postcard times total number of issues sold), stating that it is the defendant (Hustler) "that must bear the risk of uncertainty." Brewer v. Hustler Magazine, Inc., 749 F.2d 527 (9th cir. 1984). FUBU argues that the damages reported are for the group of Plaintiffs, rather than for individual Plaintiffs and that this is fatal to the report (i.e., the report is irrelevant under Daubert). Yet, it is FUBU who has consistently denied that individual data is available, or ever tracked in the first place. Plaintiffs' first requests for production were for sales by style for each individual Plaintiff. FUBU has testified that records were not kept in this manner. (See Exhibit "C" p. 148). It is the Defendants who now bear the burden of attacking the gross sales proffered by Plaintiffs' expert.
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Furthermore HGI testified that their attempts to obtain individual data from FUBU were thwarted. (See Exhibit "J" p. 36). HGI sued its licensor (FUBU) for failing to report royalties. It is not just Plaintiffs who have had trouble with FUBU concealing records. Plaintiffs have attempted to extrapolate individual infringing sales by: 1) Acquiring their own exhibits of infringing garments. This confirmed there were styles not disclosed by FUBU or HGI, i.e., only after Plaintiffs showed FUBU that Plaintiff Neal's name was a style did FUBU produce data on this style. (See Exhibit "E"). Making numerous supplemental requests to FUBU for individual sales and style information. Attempting, without success, to have FUBU produce manufacturer's information which would have disclosed the quantity of tags and each style made. (See Exhibit "B" p. 61). Instead FUBU refused to produce more than a sampling of a few manufacturers. (See Exhibit "M"). First, FUBU said they would produce, requested manufacturing data saying "no need for additional requests." (See Exhibit "M"). Then, Ira Sacks said he would produce no more (See Exhibit "M"), even through his clients possessed it. Attempting to quantify the number of infringing hangtags printed or attached to garments. It is clear that the hangtags bearing Plaintiffs' names were strictly for marketing (See Exhibit "B" p. 59), and that they were attached to garments that did not bear any of Plaintiffs' names. (See Exhibit "L" p. 30; See Pictures of Garments Purchased with Attached Hangtags, attached as Exhibit "O"). FUBU produced for the first time on 8/17/05, (almost a month after discovery cutoff) garment CADS (the design and spec drawings) showing hangtags on FUBU clothes. (See Cover letter dated 8/17/2005 with Attached Document Bates Stamp No. 1242 and 1244, attached as Exhibit "P"). FUBU has refused to produce any other data on the hangtags, except to admit that they 1) designed them, and 2) used them on both infringing and non-infringing garments. (See Hangtags, attached as Exhibit "Q"). The presence of a hangtag on an otherwise non-infringing garment makes it infringing.
2) 3)
4)
FUBU suggests that the best measure of damages should be fair market value and points out that Plaintiffs' expert did not utilize this methodology. (Defendants' Motion at p. 12). But Plaintiffs' expert made reference to royalty rates previously negotiated by the Globetrotters organizations. The rate agreed to by the predecessors of HGI surely sets the floor of a fair market value for Plaintiffs' names on merchandise, but, HGI's expert (Kelly Tinberg) had never been shown the Collective Bargaining
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Agreement which establishes a royalty rate of 25% back in the late 1970's and early 1980's. (See Tinberg Tr. p. 128, attached as Exhibit "R"; See Article 14.12 of Agreement, attached as Exhibit "S"). B. The Fact That GTFM and FUBU Will Not Delineate Profits By Individual Plaintiffs Does Not Insulate Them. In Guidroz-Brault v. Missouri Pacific Railroad Co., 254 F. 3d 825 (9th Cir. 2001) (relied upon by GTFM) the expert report was stricken because three experts hired by the plaintiff had inconsistent methodologies and, according to the court, no factual basis at all to back up the expert's opinion. A similar defect was noted in Recreational Developments of Phoenix, Inc. v. City of Phoenix, 220 F.Supp.2d 1054 (D.Ariz. 2002) (relied upon by GTFM), where the expert's opinion that group sex was safe had no basis in any study and was devoid of any methodology (several random interviews to arrive at conclusions about thousands of participants). In Olsen v. Marriot International Inc., 75 F.Supp.2d 1052 (D.Ariz 1999) (relied upon by GTFM), a hotel's expert opined that discriminating against male massage therapists was justified as the male may trigger memories of abuse. The opinions were struck because the expert never "studied, taught, conducted research, or written about the subject of psychological effects of massage." Id. at 1057. In McLaran v. Plastics Industries, Inc., 97 F.3d 347 (9th Cir. 1996) (relied upon by GTFM), the issue was that damages alleged were remote and speculative. In McLaran, the court held that projections of future damages were too speculative where production difficulties made such future products highly unlikely and damages were for the value of a business that McLaran never started (the jury had accepted McLaran's expert testimony as to future profits of a business he never started. Id. Additionally, there was evidence that the infringements were not
profitable as well). Id. at 361.
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Here the damages are clear even though the totals are not mathematically certain. The fact that the exact quantities, styles and countries of sales may never be known, common in the international garment industry, does not foreclose a remedy for Plaintiffs. GTFM has admitted that it exploited all of Plaintiffs' names. The fact that FUBU cannot (or refuses to) delineate the exploitation by individual Plaintiff does not insulate them. Therefore, a
wrongdoer cannot escape damages because he succeeds in hiding or confusing the damages, then calling them speculative. Here the damages are for historical sales that are reasonably documented. It is clear that damages may be proved for a direct injury that a plaintiff can prove, as well as any lost profits plaintiff would have earned but for the infringement. See Lindy Pen Co., v. Bic Pen Corp., 982 F.2d 1400 (9th Cir. 1993). Here Plaintiffs' expert opines as to direct damages, not speculative future profits that Plaintiffs could have, or may have, enjoyed if they made their own deals with GTFM or someone else. The Lindy Pen court also noted that proof of actual damage is often difficult. Id. The 9th circuit has noted that California statutes provide for actual damages and any profits which require "proof only of the gross revenue"... "and the person who violated this section is required to prove his or her deductible expenses." Cal. Civ. Code § 3344(a) (1997), Solana v. Playgirl, Inc., 292 F.3d 1078 (9th Cir. 2002). If HGI's reliance on old player contracts is to be given any credence in this case, then other jurisdictions allowing profits as a measure of damages are relevant to Plaintiffs' claims given the choice of law provisions in the old player contracts that HGI relies on for their purported authority (i.e., Neal-Delaware Para. 16, Haynes-Illinois Para 20, Hall-Illinois Para. 16, Thornton-California Para. 16, Rivers-California Para. 16, Sanders-Minnesota Para. 16). (See Excerpts of Player Contracts, attached as Exhibit "T"). In addition to the authorities discussed in this memorandum relative to Arizona law, -12Document 220 Filed 11/12/2005
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California law, and Illinois law, the other jurisdictions referenced in old player contracts supply authority: Minnesota: Minnesota law recognizes the tort of misappropriation of the name or likeness of another. Kovatovich v. K-Mart Corporation, 88 F.Supp. 2d 975 (D. Minnesota 1999); Restatement (Second) Torts § 652(C); See also Hendry v. Conner, 303 Minn. 317, 226 N.W. 2d 921 (1975); Ventura v. Titan Sports, Inc., 65 F.3d 725 (8th Cir. 1995) (unjust enrichment claim upheld for violation of Jesse Ventura's rights of publicity applying Minnnesota law). Delaware: A claim for appropriation for commercial use in Delaware. Barbieri v. News-Journal Company, 189 A.2d 773 (Del. 1963), Wilcher v. City of Wilmington, 60 F.Supp 2d 298 (D. Delaware 1999). In Delaware, nominal, compensatory and punitive damages are available for such claims. Guthridge v. Pen-Mod, Inc., 239 A.2d 709 (Del.Super. 1967). Commentators such as McCarthy support the simple fact that "the defendant's gain is the plaintiff's loss." J. Thomas McCarthy, The Right of Publicity and Privacy, § 11:34, at 11-81. C. Willful Infringement. GTFM's assertion that under the "law of this Circuit, willful infringement is a prerequisite to the disgorgement of Defendants' profits" (Defendants' Motion P. 10, Section II) is simply not correct as to Plaintiffs' rights of publicity claims. Unless required by an applicable statutory provision, an intent to infringe another's right of publicity is not an element of the liability. Pooley v. National Hole-In-One Association, 89 F.Supp.2d 1108, 1115 (D. Arizona 2000). The court also stated that in the absence of Arizona law to the contrary, courts follow the Restatement, citing Aztlan Lodge No. 1, Free and Accepted Masons of Prescott v. Ruffner, 745 P.2d 611 (Ariz.App. 1987). The Restatement (Third) of Unfair Competition § 49 (1995) provides that the infringer is liable for the "pecuniary loss to the other caused by the appropriation or for the actor's own pecuniary gain resulting from the appropriation, whichever is greater." The finder of fact has considerable discretion in
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fixing appropriate compensation and the infringer may be subject to liability even if the violation is unintentional. Id. at Comment (C). Additionally, "in cases where the damage is more extensive, proof as to its extent may be so difficult that justice can be accomplished only by requiring payment of the amount of profits," and..."the injured person, as in other tort cases, can elect between an action for damages and an action for the value of that which was improperly received." Restatement of Restitution, § 136 Interference with Trade Names (September 2005). GTFM's argument that profits may be the measure of damages only if the infringement is willful, is irrelevant to their effort to strike Plaintiffs' expert's opinion that Defendants' profits are a reasonable damage measurement. Profits may be disgorged for infringement with or without statutory authority: 1) 2) The common law right of publicity in many states allows the disgorgement of profits simply for infringement (i.e. Cal. Civ. Code §3344, West 2002). Illinois allows both compensatory actual damages and profits as an incentive to infringers not to infringe. 765 Ill. Comp. Stat. 1075/40 (2002). Illinois acknowledges claims for the commercial use of a plaintiff's likeness. Eick v. Perk Dog Food Co., 347 Ill. App. 293, 106 N.E.2d 742 (1952). Some federal courts authorize profits as damages absent statutory authorization. Ventura v. Titan Sports, 65 F.3d 725 (8th Cir. 1995). In Ventura the court refused to strike an experts report that did not quantify gross sales and held that the infringer's damages were profits measured by net sales times a royalty rate derived by the expert.
3)
GTFM states that Plaintiffs' expert is in error as to the availability of statutory damages under the Lanham Act for unregistered marks. (Defendants' Motion at footnote 3, p. 10). Plaintiffs' expert's comment at P. 16, Section 3, was simply the availability of damages in addition to, or alternatively to, the profit damage calculation under the Lanham Act, noting that damages may be calculated under the Act per counterfeit mark, without making such a calculation. Calculations of damages per infringement
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have been used by the courts for non-Lanham Act damages.
See Brewer v. Hustler Magazine, Inc., 749
F.2d 527 (9th cir. 1984). Under § 35 of the Lanham Act the court has discretion to enter judgment for a sum it finds just if the amount of profits assessed is inadequate, and the court may exceed the actual damages by anything up to three times. Lanham Trademark Act, § 35, 15 U.S.C. § 1117. A number of circuits have held Lanham Act damages are available for unregistered marks. The statutory section cataloguing the remedies available in an infringement action under the Lanham Act are available for an unregistered mark. Lanham Trademark Act, §§ 35, 43(a), 15 U.S.C.A. §§ 1117, 1125(a). Rikard v. Auto Publisher, Inc., 735 F.2d 450 (10th Cir. 1984), Centaur Communications, Ltd., v. A/S/M Communications, Inc., 830 F.2d 1217 (2d Cir. N.Y. Oct. 9, 1987). Notwithstanding GTFM's comment at footnote 3 on page 10 of their Motion, the relief specified in §35 of the Lanham Act is available in actions under 43(a) involving unregistered marks. See Rikard v. Auto Publisher, Inc., 735 F.2d 450 (10th Cir. 1984); James Hawes and Amanda Dwight, Trademark Registration Practice (June 2005), §1:10, at FN1. In Waits v. Frito-Lay, Inc., 978 F.2d 1093 (9th Cir. 1992) the court affirmed punitive damages in a case of misappropriation of singer Tom Wait's voice which was held to be a false endorsement under Section 43(a) of the Lanham Act. The court noted that attributes of a celebrity "amount to an
unregistered trademark" and can create a false impression that plaintiffs "sponsored or otherwise approved the use", citing Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200 (2d Cir. 1979). GTFM cites several cases to suggest that profits are not a proper measure of damages and states: "the availability of disgorgement for unjust enrichment under Arizona law is subject to stringent legal requirements," citing Trustmark Insurance Co. v. Bank One, Arizona, N.A., 48 P.3d 485 (Ariz. Ct. App. 2002), City of Sierra Vista v. Cochise Enterprises, Inc., 697 P.2d 1125 (Ariz. Ct. App. 1984). But these -15Document 220 Filed 11/12/2005
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cases only state the elements of unjust enrichment and provide no authority for GTFM's position that Plaintiffs' expert opinion is unreliable or speculative. Regardless, the Lindy Pen court stated that willfulness involves "attempting to gain the value of an established name of another," 982 F.2d at 1406, and Lindy Pen simply holds that an accounting of profits is not an automatic remedy. GTFM argues Plaintiffs' expert "usurps the court's function" in asserting a measure of damages (Motion at II). GTFM's complaint is surprisingly made in the same motion that criticizes Plaintiff for failing to reliably assert a measure of damages. GTFM apparently can't decide what it dislikes about Plaintiffs' expert report. The Lindy Pen court, 982 F.2d at 1408, stated "once the Plaintiff demonstrates gross profits, they are presumed to be the result of the infringing activity" and that "the defendant thereafter bears the burden of showing which, if any, of its total sales are not attributable to the infringing activity, and, additionally any permissible deductions for overhead." Here, Plaintiffs' expert states that some GTFM garments had infringing hangtags and, since GTFM won't produce hangtag data, it is reasonable to conclude that all garments may have had hangtags. Again, Plaintiffs' investigator (Phipps) testified and introduced exhibits at his deposition that many styles of GTFM clothes not bearing Plaintiffs' names, bore hangtags bearing Plaintiffs' names. (See Exhibit "O"). VI. CONCLUSION GTFM's reward for its delay and concealment will be in limiting Plaintiffs' expert's testimony to the report, even though the expert was not privy to infringing overseas sales that GTFM had not provided any information on when she prepared the report. GTFM can also attack Plaintiffs' expert at trial. This should be the limit of GTFM's ability to silence Plaintiffs' expert. Plaintiffs' expert report
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poses no danger of misleading a jury. Her findings are very important to Plaintiffs' case and will be helpful to the jury's understanding of damages. For the foregoing reasons GTFM's Motion to Strike Plaintiff's Expert Report should be denied. Additionally, since GTFM did not properly raise this discovery dispute by contacting the Court pursuant to the Court's orders, and instead filed a written motion without leave of Court, GTFM should be sanctioned. Therefore, as a sanction Plaintiff respectfully requests an award of attorney's fees in connection with responding to GTFM's Motion.
DATED this 11th day of November 2005. ROSENQUIST & ASSOCIATES By: /s/Anders Rosenquist Anders Rosenquist, Jr. Florence M. Bruemmer Attorneys for Plaintiff Meadowlark Lemon
MORGAN, COLLING & GILBERT, PA By: /s/ Clay Townsend Clay Townsend Attorneys for Plaintiffs Neal, Rivers, Thorton, Hall, Haynes and Sanders
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CERTIFICATE OF SERVICE Florence M. Bruemmer declares as follows: 1. I am and was at all times mentioned herein a citizen of the United States and a resident of Maricopa County, Arizona over the age of 18 years of age and not a party to the action or proceeding. I am an attorney with Rosenquist & Associates. 2. I hereby certify that on November 14th , 2005, a true and correct copy of the foregoing JOINT RESPONSE BY ALL PLAINTIFFS TO GTFM, LLC'S MOTION TO STRIKE PLAINTIFFS' EXPERT REPORT was sent by postage-prepaid first-class mail, addressed to: Joel L. Herz, Esq. Law Offices of Joel L. Herz 3573 East Sunrise Drive, Suite 215 Tuscon, Arizona 85718 Telephone: (520) 529-8080 Attorneys for Defendants FUBU the Collection, LLC GTFM of Orlando, LLC d/b/a FUBU Company Store Safia A. Anand, Esq. DREIR, LLP 499 Park Avenue New York, NY 10022 Attorneys for Defendants FUBU the Collection, LLC, GTFM of Orlando, LLC and GTFM, LLC Clay Townsend, Esq. Morgan, Colling & Gilbert, PA 20 N. Orange Avenue 16th Floor Orlando, FL 32802 Attorneys for Plaintiffs Neal, Rivers, Thorton, Hall, Haynes and Sanders Robert W. Goldwater, III, Esq. The Goldwater Law Firm, P.C. 15333 North Pima Road, #225 Scottsdale, Arizona 85260 Attorneys for Plaintiffs Neal, Rivers, Thorton, Hall, Haynes and Sanders
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Ray K. Harris Fennemore Craig 2003 North Central Avenue Suite 2600 Phoenix, Arizona 85012-2913 Attorneys for Defendants Harlem Globetrotters Int'l, Inc., Harlem Globetrotters Int'l Foundation, and Jackson Edward R. Garvey Christa Westerberg Garvey McNeil & McGillivray 634 West Mail Street Suite 101 Madison, WI 53703 Attorneys for Defendants Harlem Globetrotters Int'l, Inc., Harlem Globetrotters Int'l Foundation, and Jackson by placing same in a properly sealed, postage prepaid envelope and depositing same in a United States Postal Service mail box. 3. I declare under the penalty of perjury under the laws of the United States that the foregoing is a true and correct. Executed this 11th day of November 2005, at Phoenix, Arizona.
/s/Florence M. Bruemmer Florence M. Bruemmer
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