Free Motion for Protective Order - 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 [email protected] Attorneys for Defendants Harlem Globetrotters Int' Inc., Harlem Globetrotters l, International Foundation, Inc., and Mannie L. & Catherine Jackson UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA MEADOWLARK LEMON, a married man, Plaintiff, vs. MOTION FOR A PROTECTIVE ORDER PURSUANT TO FED. R. CIV. P. 26(c) No. CV 04 0299 PHX DGC and CV-04-1023 PHX DGC

HARLEM GLOBETROTTERS INTERNATIONAL, 16 INC., et al.; 17 18 19 20 21 22 23 vs. HARLEM GLOBETROTTERS INTERNATIONAL, INC., et al.; Defendants. Defendants. FRED "CURLY" NEAL et al., Plaintiffs,

HARLEM GLOBETROTTERS INTERNATIONAL, 24 INC., an Arizona corporation, 25 26 vs. Case 2:04-cv-00299-DGC PHX/RHARRIS/1721730.1/43458.007 Document 175 Filed 10/14/2005 Page 1 of 8 Counter-claimant,

1 MEADOWLARK LEMON, a married man, 2 3 4 5 6 McNeil & McGillivray, S.C., and Fennemore Craig, P.C., move for a protective order pursuant to Fed. 7 8 9 10 11 12 13 14 15 Grounds for this motion are set forth below and in the accompanying affidavit of Mannie 16 17 18 19 20 21 22 23 24 25 26 Case 2:04-cv-00299-DGC PHX/RHARRIS/1721730.1/43458.007 Document 175 -2Filed 10/14/2005 Page 2 of 8 Jackson dated October 13, 2005. Defendants have disclosed the following documents to Plaintiffs'counsel pursuant to the Court' s October 7, 2005 Order (redacted material indicated by bold type): ? HGI Holdings, Inc. Purchase of Harlem Globetrotters International ("HGI") closing documents (hereinafter "Closing Documents") containing the following: 1. 2. Contribution, Purchase and Sale Agreement (Bates 2037-2080); Disclosure Schedules to the Contribution, Purchase and Sale Agreement (Bates 2081-2134) (Schedule 3.8: Absence of Certain Developments (Redacted) (Bates 2099-2100), Schedule 3.15: Employee Matters (Redacted) (Bates 21202122), Schedule 3.20: Bank Accounts; Names and Locations, (Redacted in part) (Bates 2130); R. Civ. P. 26(c) providing that certain information contained in the HGI Holdings, Inc. Purchase of Harlem Globetrotters International closing documents and a document that contains information related to Defendants'estimation of financial risk of this lawsuit, filed under seal for the Court' in camera s review, be protected from disclosure to other parties to this matter, or their counsel, on the grounds that the information is not relevant to any claims or defenses or reasonably calculated to lead to the discovery of admissible evidence and, therefore, Plaintiffs will not be prejudiced by Defendants' protecting the secrecy of the information. Defendants Harlem Globetrotters International, Inc., Harlem Globetrotters International Foundation, and Mannie L. and Catherine Jackson (hereinafter "Defendants") by their Counsel, Garvey Counterdefendant.

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3. 4. 5. 6.

Demand Notice (Bates 2135); Stockholder Agreement (Bates 2136-2151); Registration Agreement (Bates 2152-2170); Employment Agreements of M. Jackson (Bates 2171-2186), and HGI employees, M. Syracuse, J. Munn, C. Groth, and B. Meister (Syracuse, Munn, Groth and Meister Redacted) (Bates 2187-2245); Second Amended and Restated Certification of Incorporation of Buyer (Bates 2246-2256); Amended and Restated Bylaws of Buyer (Bates 2257-2271); Company Share Certificate no. 101 with executed stock power (Bates 22722273); Pay-off letter (Redacted) (Bates No. 2274-2279); Separation and Mutual Release Agreements of C. Harrison and C. Clouser (Bates 2280-2288); Termination and Release Letters (Redacted) (Bates 2289-2311); UCC Termination Statement (Bates 2312); Secretary' Certificate of the Company (Bates 2313-2338); s Resignations for the Board of Directors (Bates 2339-2343); Good Standing Certificates of the HGI (Bates 2344-2346); Board resolutions of the Buyer (Bates 2347-2371); Good Standing Certificate of Buyer (Bates 2372); Buyer share certificates (Bates 2373-2385); Funds Flow Memorandum (Bates 2386-2394); Management Services Agreement (Bates 2395-2400); Shamrock Equity Purchase Agreement (Bates 2401-2424); and

7.

8. 9.

10. 11.

12. 13. 14. 15. 16. 17. 18. 19.

22 23 24 25 26 Case 2:04-cv-00299-DGC PHX/RHARRIS/1721730.1/43458.007 Document 175 -3Filed 10/14/2005 Page 3 of 8 20. 21. 22.

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23.

Management Rights Letter Agreement (Bates 2425-2428).

Summary of MLJ' net-equity-Paid at Closing September 27 (Redacted in part) s (Bates 2437).

The redacted portions of the above-listed documents (hereinafter "Redacted Documents") are filed under seal and have not been served upon the Plaintiffs or Defendants FUBU the Collection, LLC. A. REDACTED ITEMS ARE NOT RELEVANT TO THIS LITIGATION AND WOULD ADVERSELY AFFECT DEFENDANTS' BUSINESS INTERESTS IF THEY ARE DISCLOSED. Schedule 3.8: Absence of Certain Developments and Schedule 3.15: Employee Matters.

Schedules 3.8 and 3.15 list the salaries of HGI employees and their current employment status. Information disclosing the salaries and employment status of all employees, other than Defendant Mannie Jackson, have been redacted from the schedules. The salaries and status of HGI employees not

13 14 15 16 17 18 19 20 21 22 23 24 25 26 Case 2:04-cv-00299-DGC PHX/RHARRIS/1721730.1/43458.007 Document 175 -4Filed 10/14/2005 Page 4 of 8 protect the privacy interests of its employees. (10/13/05 Jackson Aff. ¶ 5.) These are highly sensitive employment matters that are not relevant to the lawsuit. Plaintiffs will not be prejudiced by Defendants withholding this information. Moreover, any interests by Plaintiffs in obtaining this information is outweighed by HGI' interest in maintaining privacy. s named in the lawsuit have no relevance to any of the claims or defenses in this matter. Moreover, Schedules 3.8 and 3.15 would not be subject to disclosure under the Court' October 27, 2005 Order but s for the fact that these schedules were attached to the Closing Documents. Disclosure of these salaries would harm HGI, Inc. This information is kept confidential by HGI. Its disclosure would injure HGI' business interests because if this information were made public, it s would unfairly affect its bargaining position when negotiating with current or future employees in setting salaries. Moreover, HGI does not disclose salary information among its employees in order to

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2.

Schedule 3.20: Bank Accounts; Names and Locations

Schedule 3.20 contains confidential bank accounts of HGI. The bank account numbers have been redacted because they are not relevant to the litigation in this matter. Redacting the bank account numbers is necessary to protect the business interests of HGI. Bank account numbers are highly sensitive information and, if made public, could be used for illegal, improper, and fraudulent purposes. (10/13/05 Jackson Aff. ¶ 8.) Because the account numbers, themselves, are not relevant to the litigation, Defendants'privacy interests outweigh any interest in disclosure. 3. Employment Agreements of Management Staff.

The employment agreements of HGI executive staff, other than Defendant Mannie Jackson, the CEO,1 ("Employment Agreements") executed on September 27, 2005 are being withheld. The Employment Agreements do not pertain to any party in this lawsuit and are not relevant to any of the claims or defenses in this matter. The executive staff, other than Mr. Jackson, have not been named as parties to this matter and their salaries have no bearing on the lawsuit. Moreover, the Employment Agreements, on their own, would not be subject to disclosure under the Court' October 27, 2005 Order s but for the fact that they have been attached to the Closing Documents.

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Disclosure of Employment Agreements would injure HGI' business interests because this s would unfairly affect HGI' bargaining position when negotiating with current or future executive staff s in setting salaries or retaining key personnel. Moreover, HGI does not disclose salary information among its employees in order to protect the privacy interests of its employees. (10/13/05 Jackson Aff. ¶¶ 5, 6.) Because Plaintiffs will not be prejudiced by withholding this information due to its lack of relevance, the Defendants' interests in maintaining privacy outweighs any interest in disclosure. 4. Pay-Off Letter

The Employment Agreement of Mr. Jackson has been disclosed without redaction.

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The pay-off letter is an agreement between an investment banker and HGI for the banker' s services in brokering the sale of stock between the buyer and the seller. The letter has been marked as "personal and confidential." The document does not contain any information about the sale of stock; therefore, the document is not relevant to the litigation and is not covered under the Court' Order. s (10/13/05 Jackson Aff. ¶ 7.) The pay-off letter on its own would not be subject to disclosure but for the fact that it has been attached to the Closing Documents. Because the document is not relevant to this litigation, the interests of the Defendants weigh in favor of not disclosing this document to Plaintiffs. 5. Termination and Release Letters of HGI Management Staff

The termination agreements of HGI management staff, other than Mr. Jackson,2 ("Termination Agreements") executed on September 27, 2005 are not relevant to any of the claims or defenses in this matter. HGI management staff, other than Mr. Jackson, have not been named as parties to this matter. The Termination Agreements on their own would not be subject to disclosure under the Court' October s 27, 2005 Order but for the fact that they have been attached to the Closing Documents. Because Plaintiffs will not be prejudiced by withholding this information due to its lack of relevance, the Defendants' interests in maintaining privacy outweighs any interest in disclosure.

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6.

Summary of MLJ' net-equity-Paid at Closing s

Defendants have redacted portions of the summary spreadsheet entitled "MLJ' net-equity-Paid s at Closing September 27" related to the Defendants'estimated cost of litigation for this matter. Defendants have also redacted information that would allow Plaintiffs to derive that estimated cost. This information is highly sensitive and based on attorney-client work product and attorney-client privileged information. It was prepared only for the purposes of completing the due diligence review. It would be highly prejudicial to the Defendants to make them disclose the financial risk they place on this

The Termination Agreement of Mr. Jackson has been disclosed without redaction.

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lawsuit. Disclosure would force Defendants to reveal their assessment of the case before settlement negotiations even commenced. This would prevent Defendants from entering into good faith negotiations with Plaintiffs. (10/13/05 Jackson Aff. ¶ 9.) Because possible settlement information should remain confidential, the information should not be disclosed to Plaintiffs. CONCLUSION Because there is no relevance to this litigation of the redacted portions of the above-described documents, there is no basis for production to Plaintiffs. Therefore, Defendants'respectfully request the Court to issue a protective order providing the following:

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Case 2:04-cv-00299-DGC PHX/RHARRIS/1721730.1/43458.007 Document 175 -7Filed 10/14/2005 Page 7 of 8 By: s/Ray Harris_______________ Ray Harris FENNEMORE CRAIG, P.C. 3003 N. Central Ave., Suite 2600 Phoenix, AZ 85012-2913 Attorneys for Defendants Harlem Globetrotters Int' Inc. and Harlem l, Globetrotters Int' Foundation l Mannie L. & Catherine Jackson Edward R. Garvey GARVEY McNEIL & McGILLIVRAY 634 W. Main St. #101 Madison, WI 53703 Attorneys for Defendants Harlem Globetrotters Int' Inc. and Harlem l, Globetrotters Int' Foundation l Mannie L. & Catherine Jackson 1. 2. The Redacted Documents are filed under seal for the Court' in camera review only; and s The Redacted Documents shall not be served on the other parties to this litigation.

Dated this 14th day of October, 2005.

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1. I hereby certify that on October 14, 2005, a true and correct copy of the Motion for Protective Order was electronically transmitted to the Clerk' Office using the CM/ECF System for s filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Edward R. Garvey ­ [email protected] Safia A. Anand ­ [email protected] 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 October 14, 2005, a true and correct copy of the Motion for Protective Order 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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