Free Memorandum - District Court of Arizona - Arizona

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Joel L. Herz, Esq. State Bar No. 015105 Law Offices of Joel L. Herz 3573 East Sunrise Drive, Suite 215 Tucson, AZ 85718 Telephone: 520-529-8080 Facsimile: 520-529-8077 Ira S. Sacks, Esq. Safia A. Anand, Esq. Dreier LLP 499 Park Avenue New York, NY 10022 Telephone: 212-328-6100 Facsimile: 212-328-6101 Attorneys for Defendants FUBU The Collection, LLC and GTFM of Orlando, LLC d/b/a FUBU Company Store UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA MEADOWLARK LEMON, a married man, Plaintiff/Counterdefendant vs. HARLEM GLOBETROTTERS INTERNATIONAL, INC., et al., Defendants/Counterclaimants ) ) ) ) ) ) ) ) ) ) )

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

MEMORANDUM OF LAW IN SUPPORT OF FUBU THE COLLECTION, LLC'S AND GTFM OF ORLANDO, LLC d/b/a FUBU COMPANY STORE'S RENEWED MOTION FOR SUMMARY JUDGMENT Defendants FUBU The Collection, LLC and GTFM of Orlando, LLC d/b/a FUBU Company Store ("GTFM of Orlando") (collectively referred to as the "FUBU Defendants"), submit this memorandum of law in support of their renewed motion for summary judgment

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Case 2:04-cv-00299-DGC

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("Renewed Motion for Summary Judgment"), pursuant to Rule 56 of the Federal Rules of Civil Procedure, dismissing (i) the claims asserted against FUBU The Collection, LLC by plaintiff Meadowlark Lemon ("Lemon"), in the action filed in the District Court of Arizona, entitled Meadowlark Lemon v. Harlem Globetrotters International, Inc., et. al., CV 04-0299-PHX-DGC (the "Arizona Action"),1 and (ii) the claims asserted against FUBU The Collection, LLC and GTFM of Orlando, by plaintiffs Fred "Curly" Neal, Larry "Gator" Rivers, Dallas "Big D" Thornton, Robert "Showboat" Hall, Marques Haynes and James "Twiggy" Sanders (collectively the "Florida Plaintiffs"), in the action filed in the Middle District of Florida, entitled Fred "Curly" Neal, et. al. v. Harlem Globetrotters International, Inc., et. al., No. 6:04-CV-193-ORL31JGG (the "Florida Action").2 Summary judgment is warranted because there are no material facts in dispute concerning this Court's lack of personal jurisdiction over FUBU The Collection, LLC and

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A copy of the Complaint in the Arizona Action ("Arizona Complaint") is annexed as Exhibit 1 to the Declaration of Ira S. Sacks in support of the FUBU Defendants' Renewed Motion for Summary Judgment, dated October 24, 2005, submitted herewith (the "Sacks Decl."). A copy of the Complaint in the Florida Action ("Florida Complaint") is annexed as Exhibit 2 to the Sacks Decl. submitted herewith. This Action was transferred to the District of Arizona on May 12, 2004 and consolidated with the Arizona Action on June 18, 2004. (Sacks Decl. ¶5).
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GTFM of Orlando. That is so because neither FUBU The Collection, LLC nor GTFM of Orlando has or has ever had any contacts with Arizona. Plaintiffs have one proper FUBU party before the Court ­ GTFM, LLC ­ the entity that licensed rights from Harlem Globetrotters International, Inc. ("HGI") and sold apparel using those rights. The other FUBU parties are not proper parties. Both before and after the prior motion for summary judgment was made to dismiss these claims ­ which this Court denied without prejudice to renewal after the close of

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discovery ­ plaintiffs' counsel have known that the this Court has no personal jurisdiction over the FUBU Defendants.3 FACTUAL BACKGROUND Since the beginning of this litigation and throughout the discovery period, FUBU The Collection, LLC and GTFM of Orlando have explained that this Court does not have personal jurisdiction over them. They are both improper parties in these actions, and the undisputed discovery record supports their improper status as parties. (Sacks October 18 Decl. ¶¶4-6, 9, 11, 13-14).4 For example, in April 2004, Ira Sacks, counsel for the FUBU Defendants, explained to plaintiffs' counsel that FUBU The Collection, LLC is not a proper party in these actions because GTFM, LLC entered into a licensing agreement with Harlem Globetrotters International, Inc. ("HGI") on June 1, 2002, wherein HGI licensed to GTFM, LLC the right to use the names and

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On October 12, 2005, plaintiffs moved to dismiss the FUBU Defendants without prejudice pursuant to Fed.R.Civ.P. Rule 41(a)(2). On October 18, 2005, the FUBU Defendants filed a partial opposition to the Plaintiffs' Motion to Dismiss the FUBU Defendants Without Prejudice (the "Partial Opposition") asking (a) that the claims against them be dismissed with prejudice, or in the alternative, (b) that the claims be dismissed without prejudice and (i) plaintiffs be ordered to pay the FUBU Defendants costs, disbursements and attorney's fees to date, or (ii) plaintiffs be enjoined from re-filing these claims against the FUBU Defendants. The FUBU Defendants are filing this motion because the last date for filing dispositive motions is October 28, 2005 and the Plaintiffs' Motion to Dismiss may not be decided by that time. (Sacks Decl. ¶3).
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likenesses of any and all players who have played for the Harlem Globetrotters, or who hereafter

References to "Sacks October 18 Decl." refer to the Declaration of Ira Sacks, dated October 18, 2005, which was filed in support of the FUBU Defendants' Partial Opposition and is attached to the Sacks Decl. as Exhibit 4.

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play for the Globetrotters during the term of the agreement, other than Wilt Chamberlain and Magic Johnson. (Sacks Decl. ¶6; Aurum July 2004 Decl. ¶ 5).5 On or about July 12, 2004, FUBU The Collection, LLC and GTFM of Orlando filed their First Motion for Summary Judgment requesting that this Court dismiss them for lack of personal jurisdiction. (Sacks October 18 Decl. ¶6). In the First Motion for Summary Judgment,

Daymond Aurum, Co-founder of the FUBU brand and the Chief Executive Officer of FUBU The Collection, LLC declared under the penalty of perjury that FUBU The Collection, LLC is a limited liability company organized under the laws of the state of New York (Aurum July 2004 Decl. ¶¶1-2). Mr. Aurum declared further that FUBU The Collection, LLC does not

manufacture, advertise, or sell FUBU branded products, does not manufacture, sell or advertise the allegedly infringing products, and has never licensed, developed, created, produced, manufactured, promoted, sold, distributed, and/or exploited any products which might infringe

14 15 16 17 18 19 20 21 infringe upon the names and likenesses of any of the plaintiffs. (Aurum July 2004 Decl. ¶4). 22 23 24 25 26 27 28 Case 2:04-cv-00299-DGC Document 186 4 Filed 10/24/2005 Page 4 of 11
References to "Aurum July 2004 Decl." refer to the Declaration of Daymond Aurum, dated July 2004, which was originally filed with FUBU The Collection, LLC and GTFM of Orlando's First Motion for Summary Judgment. A copy of the Aurum July 2004 Declaration is attached to the Sacks Decl. as Exhibit 3.
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upon the names and likenesses of any of the plaintiffs. (Aurum July 2004 Decl. ¶¶3-4). Mr. Aurum explained under oath that FUBU The Collection, LLC is merely a shareholder of GTFM, Inc. and member of GTFM, LLC, and does not otherwise do business in Arizona or elsewhere. It has no presence in Arizona. (Aurum July 2004 Decl. ¶3). Mr. Aurum declared that FUBU The Collection, LLC has never licensed, developed, created, produced, manufactured, promoted, sold, distributed and/or exploited any products which might

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Moreover, Mr. Aurum explained that GTFM of Orlando, LLC was the shell company operating the FUBU Company Store in Orlando, which has since been closed. (Aurum July 2004 Decl. ¶7). GTFM of Orlando conducted business exclusively in Orlando, Florida and does not have any contact with or do or transact any business in the State of Arizona. (Aurum Decl. ¶7). Thus, while the Middle District of Florida may have had personal jurisdiction over GTFM of Orlando, this Court does not. There is nothing in the discovery record which disputes any of Mr. Aurum's sworn statements. (Sacks October 18 Decl. ¶8). As this Court is aware, in an order dated October 4, 2004, the FUBU Defendants' First Motion for Summary Judgment was denied without prejudice. (Sacks October 18 Decl., Exhibit C). The FUBU Defendants continued to explain to plaintiffs that the proper party in these actions is GTFM, LLC and not FUBU The Collection, LLC or GTFM of Orlando. (Sacks

14 15 16 17 18 19 20 21 reasons. Indeed, the only FUBU party to produce documents in this action has been GTFM, 22 23 24 25 26 27 28 Case 2:04-cv-00299-DGC Document 186 5 Filed 10/24/2005 Page 5 of 11 LLC. FUBU The Collection, LLC and GTFM of Orlando have submitted Amended Initial Disclosures pursuant to Rule 26 of the Federal Rules of Civil Procedure stating that they have no documents in this action. (Sacks October 18 Decl. ¶¶13-14 and Exhibit D). October 18 Decl. ¶11). It was not until October 1 and October 19, 2004 that Lemon and the Florida Plaintiffs finally amended their Complaints to add GTFM, LLC, the proper party, as a defendant in these actions. (Sacks October 18 Decl. ¶12). As discovery continued in these actions, FUBU The Collection, LLC and GTFM of Orlando continued to maintain that there was no personal jurisdiction over them and FUBU The Collection, LLC continued to maintain that it was also an improper party in this action for other

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Discovery confirmed that both FUBU The Collection, LLC and GTFM of Orlando were improper parties and Arizona had no personal jurisdiction over them. (Sacks Decl. ¶7). For example, at the deposition of Bruce Weisfeld, the President of GTFM, LLC, he testified that the FUBU The Collection, LLC does not have anything to do with the Harlem Globetrotters apparel or merchandise. (Weisfeld Tr. 7-8).6 Mr. Weisfeld testified further that "GTFM Inc. is the holding company for the trademark FUBU" and that "GTFM LLC is the licensee of Harlem Globetrotters." (Weisfeld Tr. 9). Mr. Weisfeld testified further that GTFM, LLC is the only entity that would have anything operationally or financially [to] do with the Harlem Globetrotters." (Weisfeld Tr. 8-9). As has been repeatedly explained to plaintiffs' counsel, GTFM, Inc. owns all of the trademarks using the word FUBU, of which there are many. (Blenden Decl. ¶5 and Ex. A).7 GTFM, Inc. and GTFM, LLC both use the phrase "FUBU The Collection" as a tradename.

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(Blenden Decl. ¶6). FUBU The Collection, LLC does not use "FUBU The Collection" as a tradename and products with such labels are marketed by GTFM, LLC (and its sublicensees), and not FUBU The Collection, LLC. (Blenden Decl. ¶7). Nevertheless, plaintiffs continue to make much of certain sales in the Philippines. Conduct in the Philippines does not confer personal jurisdiction in Arizona. Moreover, the FUBU Defendants were unaware of any sales of alleged FUBU/HGI merchandise in the

References to "[Witness] Tr. ___" refer to deposition transcript pages from the deposition of the particular witness, attached to the October 18 Sacks Decl. as Exhibits E-F. References to Blenden Decl. refer to the Declaration of Lawrence Blenden, dated September 21, 2005, which was filed in support of the Partial Opposition and is attached to the Sacks Decl. as Exhibit 5.

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GTFM, LLC did not receive any royalties or royalty reports as a result of such sales. (Blenden October 2005 Decl. ¶¶3-4).8 Even if the name "FUBU The Collection" is used in the Philippines on stores, bags, receipts and signs as plaintiffs claim, FUBU The Collection, LLC is not involved. As stated above, FUBU The Collection, LLC does not use "FUBU The Collection" as a tradename and and products with such labels are marketed by GTFM, LLC (and its sublicensees), and not FUBU The Collection, LLC. (Blenden Decl. ¶7; Blenden October 2005 Decl. ¶5). Plaintiffs' counsel has ignored the declarations and the undisputed discovery record. It is clear that neither FUBU The Collection, LLC nor GTFM of Orlando is subject to personal jurisdiction in Arizona. The FUBU Defendants have made numerous efforts to explain the relationship between all of the FUBU-related entities; however, plaintiffs' counsel has been unwilling to even attempt to understand the true structure of these entities, rather they have

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References to Blenden October 2005 Decl. refer to the Declaration of Lawrence Blenden, dated October 17, 2005, which was filed in support of the Partial Opposition and is attached to the Sacks Decl. as Exhibit 6.
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chosen to ignore the evidence that clearly shows that neither FUBU The Collection, LLC nor GTFM of Orlando are properly in these lawsuits. (Sacks October 18 Decl. ¶¶4-6, 9, 11, 13-14). THE FUBU DEFENDANTS ARE ENTITLED TO SUMMARY JUDGMENT BECAUSE THIS COURT LACKS PERSONAL JURISDICTION As this Court is well aware, a party is entitled to summary judgment where there is "no genuine issue as to any material fact." Fed. R. Civ. P. Rule 56. The Supreme Court has explained that the standard for summary judgment mirrors that for a directed verdict. That is, if the quality and quantum of evidence is such that no reasonable trier of fact could find for the opposing party, the moving party is entitled to judgment as a matter of law. Anderson v. Liberty

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Lobby, Inc., 477 U.S. 272, 249-50, 106 S. Ct. 2505, 2511 (1986). Where the non-movant bears the burden of proof at trial, the movant can satisfy its burden of production by pointing out an absence of evidence to support an essential element of the non-movant's case. Celotex Corp. v. Catrett, 477 U.S. 317, 322-25, 106 S. Ct. 2548, 2552-54 (1986); see also Orr v. Bank of America, NT & SA, 285 F.3d 764, 781-82 (9th Cir. 2002). Summary judgment is required here because the undisputed facts demonstrate that this Court lacks personal jurisdiction over the FUBU Defendants because neither FUBU The Collection, LLC nor GTFM of Orlando has any contacts with the State of Arizona. Plaintiffs bear the burden of proving that personal jurisdiction exists over defendants. Rio Properties, Inc. v. Rio Intern. Interlink, 284 F.3d 1007, 1019 (9th Cir. 2002). When the underlying facts are undisputed, the question of whether a court may exercise personal jurisdiction is a question of law. Pacific Atlantic Trading Co., Inc., v. M/V Main Express, 758

14 15 16 17 18 19 20 21 traditional notions of fair play and substantial justice." Doe v. American National Red Cross, 22 23 24 25 26 27 28 Case 2:04-cv-00299-DGC Document 186 8 Filed 10/24/2005 Page 8 of 11 112 F.3d 1048, 1050 (9th Cir. 1997) (citing International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158 (1945)). Minimum contacts can lead to either specific or general jurisdiction. Helicopteros Nacionales De Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S. Ct. 1868, 1872 (1984); see also Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 416 (9th Cir. 1997). F.2d 1325, 1326 (9th Cir. 1985). A federal court may only exercise personal jurisdiction over a non-resident defendant when it is "authorized by a rule or statute and consonant with the constitutional principles of due process." Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114, 1123 (9th Cir. 2002). Due process requires that "nonresident defendants have certain minimum contacts with the forum state, so that the exercise of personal jurisdiction does not offend

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A showing of general jurisdiction requires a defendant's contacts with the forum state be "substantial, continuous, and systematic." Glencore, 284 F.3d at 1123. Alternatively, a court may exercise specific jurisdiction where "the cause of action arises out of or has a substantial connection to the defendant's contacts with the forum." Id. The Ninth Circuit has adopted a three-part test to determine whether such specific jurisdiction may be applied: (1) The nonresident defendant must do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws[;] (2) [t]he claim must be one which arises out of or results from the defendant's forum-related activities [; and] (3) [e]xercise of jurisdiction must be reasonable. Doe, 112 F.3d at 1051 (citing Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 270 (9th Cir. 1995)). "All of these requirements must be met for jurisdiction over the defendant to comply with due process." Id. Here, jurisdiction is not proper because this Court does not have general or specific jurisdiction over FUBU The Collection, LLC or GTFM of Orlando. (Sacks October 18 Decl. ¶¶ 5-6, 9, 11, 13-14). FUBU The Collection, LLC As explained above, FUBU The Collection, LLC does not have anything to do with the

22 23 24 25 26 27 28 Case 2:04-cv-00299-DGC Document 186 9 Filed 10/24/2005 Page 9 of 11 Harlem Globetrotters apparel or merchandise. (Weisfeld Tr. 7-8). Moreover, "GTFM Inc. is the holding company for the trademark FUBU" and that "GTFM LLC is the licensee of Harlem Globetrotters." (Weisfeld Tr. 9). Further, "GTFM, LLC is the only entity that would have

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anything operationally or financially [to] do with the Harlem Globetrotters." (Weisfeld Tr. 8-9). In addition, Daymond Aurum, Co-founder of the FUBU Brand and CEO of FUBU The Collection, LLC has submitted several declarations in these actions swearing that FUBU The Collection, LLC does not manufacture, advertise, or sell FUBU branded products; does not manufacture, sell or advertise the alleged infringing products; and has never licensed, developed, created, produced, manufactured, promoted, sold, distributed, and/or exploited any products which might infringe upon the names and likenesses of any of the plaintiffs. (Aurum July 2004 Decl. ¶¶ 1-4). Mr. Aurum explained under oath that FUBU The Collection, LLC is merely a shareholder of GTFM, Inc. and member of GTFM, LLC, and does not otherwise do business in Arizona or elsewhere. It has no presence in Arizona. (Aurum July 2004 Decl. ¶ 3). There is

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Additionally, in America West Airlines, Inc. v. GPA Group, Ltd., 877 F.2d 793 (9th Cir. 1989), the Ninth Circuit affirmed the district court's decision to dismiss plaintiff's complaint for lack of personal jurisdiction and failure to state a claim where the defendant was not a party to the contract forming the basis for plaintiff's cause of action. 877 F.2d at 800. Indeed, in America West, the Court recognized that plaintiffs "sued the wrong defendant." Id. The Court in America West recognized further that the plaintiffs had no evidence beyond the allegations in its complaint to show that defendant was a party to the contract. Id. The same is true here with respect to FUBU The Collection, LLC. (Sacks Decl. ¶6; Aurum July 2004 Decl. ¶5).
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nothing in the discovery record which disputes any of Mr. Aurum's sworn statements. (Sacks October 18 Decl. ¶8).9 GTFM of Orlando Nor can this Court assert either general or specific jurisdiction over GTFM of Orlando. GTFM of Orlando did not do business in the State of Arizona and has no contact with the State of Arizona. GTFM of Orlando conducted business exclusively in Orlando, Florida, and does not

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have any contact with, or do or transact any business in, the State of Arizona. (Aurum July 2004 Decl. ¶ 7). Moreover, the Florida Plaintiffs have made no claims to the contrary and allege in the Florida Complaint that GTFM of Orlando is registered to do business in the State of Florida and conducts business in the State of Florida. (Sacks Decl., Exhibit 2, ¶11). Therefore, this Court lacks personal jurisdiction over GTFM of Orlando. CONCLUSION For all of the foregoing reasons, Defendants FUBU The Collection, LLC and GTFM of Orlando respectfully request that this Court enter an order granting summary judgment and dismissing the Complaints against them in their entirety.

Dated: October 24, 2005
____/s/ Ira S. Sacks___________ Ira S. Sacks, Esq. Safia A. Anand, Esq. Dreier LLP 499 Park Avenue New York, NY 10022 Telephone: 212-328-6100 Facsimile: 212-328-6101 (Pro Hac Vice) Joel L. Herz, ESQUIRE State Bar Number 015105 La Paloma Corporate Center 3573 E. Sunrise Dr., Suite 215 Tucson, Arizona 85718-3206 Telephone: 520-529-8080 Facsimile: 520-529-8077 Attorneys for Defendants FUBU The Collection, LLC and GTFM of Orlando, LLC d/b/a FUBU Company Store

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Case 2:04-cv-00299-DGC