Free Response in Opposition to Motion - District Court of Arizona - Arizona

EXHIBIT 4

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Anders Rosenquist, Jr. #002724 Florence M. Bruemmer #019691 Rosenquist & Associates 80 E. Columbus Phoenix, Arizona 85012 Tel. 480-488-0102 Fax 480.-488-.2075
Attorneys for Plaintiff Meadow/ark Lemon

Morgan & Morgan, PA. 20 N. Orange Avenue, 16th Floor Orlando, FL 32801 Clay M. Townsend, #023414 Brandon S. Peters, #022641 Keith R. Mitnik, #436127
Attorneys for Neal Plaintiffs

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UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA MEADOWLARK LEMON, a married man, Plaintiff, vs HARLEM GLOBETROTTERS INTERNATIONAL, INC0, et aL; Defendants, FRED "CURLY" NEAL, et aL Plaintiffs, vs. HARLEM GLOBETROTTERS INTERNATIONAL, INC, et aL; Defendants HARLEM GLoIiI1RO'1'1'EK INTERNATIONAL, INC0, an Airizona corporation, CountercIairnant, vs MEADOWLARK LEMON, a married man, Counterdefendant, 4Case 2:04-cv-00299-DGC Document 637-6 Filed 04/03/2007 Page 2 of 20
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NO.: CVM4M299 PHX DGC and CV-041023 PHX DGC

SETTLEMENT CONFERENCE MEMORANDUM

Before the Honorabile Magistrate Judge Lawrence 0. Anderson

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Plaintiff Meadowlark Lemon hereinafter referred to as "Lemon", and Plaintiffs Fred "Curly" Neal, Larry "Gator" Rivers, Dallas "Big D" Thornton, Robert "Showboat" Hall, Marques Haynes and James "Twiggy" Sanders hereinafter referred to as the "Neal Plaintiffs" through

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undersigned counsel, respectfully submit their Settlement Conference Memorandum. A
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STATEMENT OF FACTS During the fall of 2003, Plaintiffs, through various ways, became aware that a line of

clothing resembling basketball apparel was being sold to the general public under the brand name of FUBU. The apparel consisted of everything from complete warm up suits to tank tops to ladies

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skirts. The apparel had the Harlem Globetrotters hereinafter referred to as 1-IGI name on it and many pieces also had the individual Plaintiffs names, numbers, and in some cases, images on them. photos of apparel and various pieces of actual apparel will be presented at the conference. Many

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of the pieces of apparel also had hangtags on them when they were sold, The hangtag had all of the Plaintiffs' names on it, except Marques Haynes, and referred to them as the LEGENDS OF THE

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HARDWOOD. actual hangtags will be presented at conference. It was soon discovered that Mannie Jackson, the sole owner of the Harlem Globetrotters, licensed GTFM Inc. hereinafter referred to as FUBU, to produce and sell the garments. A letter was written to Mannie Jackson by

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Lemon's attorney and a letter was written by the Neal Plaintiffs attorney, requesting evidence of HGI's authority to license the names, and or the numbers associated with the Plaintiffs, that were being used on the garments and hangtags. A response was received from the attorney for Mannie Jackson and HGI, but not contracts. The Defendant's Responses/Defenses to the Plaintiffs assertions were summarized in Judge Campbell's Order of June 27, 2006 hereinafter referred to as "Order" at pg. 13: "Defendants
contend that through their player contracts with HGI's predecessors Plaintiffs licensed the use of -2Case 2:04-cv-00299-DGC Document 637-6 Filed 04/03/2007 Page 3 of 20

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their names and likenesses incijjy."

Soon after HGI's explanation was received, the

Plaintiffs received a letter and a check from HGL The letter indicated that the check was their percentage of the royalty from the sale of the apparel that had their name and or number on it.

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After investigation the Plaintiffs determined HG! and FUBU were making millions of dollars from 6 7
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the sale of these garments, all over the world. Because Plaintiffs were emphatic about not giving HGI authority to use their names and numbers, and because they felt they were being unfairly taken advantage of, they filed suit, Plaintiffs had agreed to the use of their names and photos for incidental use related to games, such as programs. Plaintiff Lemon filed in Arizona and the other

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Plaintiffs filed in Florida. Eventually the lawsuits were consolidated in Arizona. On September 27, 2005 HGI was sold for Seventy Million Dollars to a newly formed company called HGI Holdings Inc. In the sales transaction HGI of Arizona, the original defendant, was consolidated with HGI of Nevada and dissolved, HG! of Nevada was eventually substituted in the lawsuit for HGI of Arizona, HGJ of Nevada hereinafter still referred to as HG!. HG! of Nevada is a wholly owned subsidiary of HGI Holdings Inc., and Shamrock Capital Advisors Inc,

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which is an investment company headed by Roy Disney, who owns 80% of the stock in the HG! Holdings Inc. Mannie Jackson owns the remaining 20% of the stock in HGI Holdings Inc. Mannie

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Jackson remains the CEO and Chairman of the Board of HGI.

Discovery was conducted, and dispositive motions were heard on June 2, 2006. Judge Campbell issued his decision Order on June 27, 2006. The Order set out the claim of Invasion of

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the Right of Publicity as the claim that can go to trial. B. 1 STATEMENT OF CLAIMS AND DEFENSESO Pursuant to Judge Campbell's Order, at pg. 23 the claim that will be tried is: Invasion of

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the Right of Publicity. The Order, at pg. 13 states that, to prevail Plaintiffs must show:

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1 Defendants used Plaintiffs' name cr likeness. Not disputed 2 Appropriation ofPlaintiff s name or likeness was to Defendants' advantage. Not disputed 3 Lack of consent, Disputed

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4 Resulting Injury Disputed. Ruled on at pg. 17 in Order, Judge Campbell stated, "The
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Restatement makes clear that `the Plaintiff may recover the portion of the defendant's net profits that is attributable to the unauthorized use.' Id. Once the p'aintiff establishes the defendant's sales, `the defendant has the burden of establishing any portiion of the sales that is attributable to factors other than the appropriation of the plaintiff's identity and any

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expenses properly deducted in determining net profits' Id. Because this law clearly makes disgorgement of profits available as a remedy in this case the Court will deny Defendants' request for summary judgment on this issue." 2 REASONABLE DAMAGES ALLEGEDLY INCURRED,

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a.

Compensatory Damages: The amount of compensatory damages is Disputed.

Defendants take the position that the amount of compensatory damages is limited by a statement made by Judge Campbell, in his Order at pg. 23, where he said. "Plaintiffs may use the HGI Letter and Sales Chart to prove damages for the specific years and amounts addressed in those

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documents." Plaintiffs' dispute Defendants interpretation of Judge Campbell's Order regarding use of the HUT Letter and Sales Chart. Plaintiffs' assert that the Letter and Sales Chart are allowed to be used by the Plaintiffs specifically for determining the percentage ofeach Plaintiffs' damages, and under disgorgment once the total sales are established the burden shifts to the Defendants. The statement in the Court's Order does not say that the numbers are the on'y measure of damages that can be used. Instead, the Court uses the words "may use," At trial any admissible evidence can be used to establish "sales." Any other interpretation of the Judge's language restricting

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damages to the numbers referred to by the Judge in the Letter and Sales Chart would be absurd. If the Defendants' position regarding the language in the Judge's Order were right, the Judge would have granted summary judgment on those amounts,

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k Punitive Damages: Punitive damages are available in Arizona in Invasion of the Right to Publicity cases. Disputed
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3 Three issues are in dispute: 1 Consent, 2 Compensatory Damages, and 3 Punitive Damages. 4 LIKELIHOOD OFPREVAI]LING,

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Defendants contend that through their player contracts with HGI's predecessors Plaintiffs'
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licensed the use of their names and likenesses in perpetuity. No Plaintiff ever signed any agreement with HGI or FUBU, only with predecessor entities many times and years removed.

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a. Plaintiff Lemon: Judge Campbell in his Order at pg.13 states: "Plaintiff Lemon asserts that his contract permitted the use of his name and likeness only "i_ent tj areut to the same use as j1yrçpior to,. .terrnination" of the contract." In reference to the Lemon case, Defendant HGI referred to one specific section in Plaintiff's 1975 contract in their response letter to Lemon's request for "authority." In Defendant HGI's Motion for Summary Judgment, they again referred to the same section of the 1975 contract for their authori. The operative words of that section permitted the use of Lemon's name and likeness ni "to the extent theyare put to t of the contract, Lemon subsequently signed an affidavit attesting to the fact that no clothing, let alone clothing with his name and number on it, was sold during the time the 1975 contract was in force euses as_the wercp!Jt prior to... .terrnination"

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1970

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1975. Also, Edward Mutum, the road manager for the team HGI during 1977-1979

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and closely related to the team during the other years the contract was in force

signed an

affidavit attesting to the fact that no clothing was sold during the time the 1975 contract was in
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force. At the hearing on June 2, 2006, where the dispositive motions were argued, Defendants' attorney stated on the record "and it wasn't used on apparel during their term as players as far as
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we can ascertain." See Transcript of 6/2/2006 Hearing at p.80. Therefore, the 1975 contract Defendant HG! relies on does not give them authority to use Lemons name, number, and likeness on the clothing that is the subject of this lawsuit, Lemon has joined in the claims asserted by the

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Neal Plaintiffs, set out below. b0 Neal Plaintiffs: Judge Campbell in his Order at pg. 13 stated, "Defendants contend that through their player contracts with HGI's predecessors Plaintiffs licensed the use of their names and likeness in pity." Judge Campbell also summarized the Neal Plaintiffs' position at pg. 14:

"The Neal Plaintiffs argue that Defendants lacked consent because HGI did not purchase their player contracts, the contracts are executory and were extinguished in bankruptcy proceedings, and the contracts are void as unconscionable," The Neal Plaintiffs argue that Defendants lacked consent because: 1 HGI is not a party to any contract with Plaintiffs and HGI did not purchase their player contracts in 1993, 2 the contracts are executory and were extinguished in bankruptcy proceedings, 3 the contracts are void as unconscionable, 4 the Collective Bargaining Agreement entered into between HGI's predecessor corporations required the payment of a 25% royalty on merchandise. All Neal

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Plaintiffs signed affidavits stating: 1. Plaintiffs have never signed any agreement of any kind with HOT. 2. Plaintiffs have never signed any agreement of any kind with FUBU.

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3. Plaintiffs were always asked for approval for endorsements during the time they were players and were paid extra. 4. Mannie Jackson never called Plaintiffs once to ask them about their player contracts. Neither

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did anyone from HGI or FUBU,
5. Plaintiffs believe that their names and numbers on FUBU clothing is an endorsement that they
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should have approved and been paid for under their contracts and the CBA. In addition to the above, the following information is pertinent: 6. "Curly" Neal's last player contract terminated in 1989, and was with JBC, owned by IBC and

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governed by the laws of Delaware. 7. Marques Haynes' last player contract terminated in 1980, and was with Harlem Globetrotters, Inc., owned by Harlem Globetrotters, Inc. and governed by the laws of Illinois.

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8. Showboat Hall's last player contract terminated in 1974, and was with Harlem Globetrotters, Inc., owned by Harlem Globetrotters, Inc. and governed by the laws of Illinois. Hall never had an attorney for contract negotiations in 27 years and never read the contracts.

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9. "Big D" Dallas Thornton's last player contract terminated in 1982, and was with Harlem Globetrotters, Inc., owned by Harlem Globetrotters, Inc. and governed by the laws of California.

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10. "Gator" River's last player contract terminated in 1985, and was with Harlem Globetrotters, Inc., owned by Harlem Globetrotters, Inc. and governed by the laws of California, 11, "Twiggy" Sanders last player contract terminated in 1992, and was with Harlem Globetrotters, Inc., owned by IBC and governed by the laws of Minnesota. Sanders never had an attorney for contract negotiations and was lied to that all contracts were the same. 12. Since the inception ofPlaintiffs' relationships with various "Harlem Globetrotters" entities, Plaintiffs have received various payments for endorsements, merchandise, personal appearances
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and cartoon appearances, while employed under the player contracts, 13. Plaintiffs conceded that the use of their pictures was allowed by verbal agreement, player contracts and the Collective Bargaining Agreement, but that treatment of merchandise endorsement

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was different. The evidence is overwhelming that players were routinely paid for endorsements and use of

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their names and likenesses for commercial promotion, while the use of pictures in programs for sale at games was granted to the team owners. 5 FUBU LIABILITY DIRECT LIABILITY FOR VIOLATION OF PUBLICITY RFJffLD FOR FURTHERING HGI'S VIOLATION.
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In the depositions of the top executives of FUBU, it was deterniined that:
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1. FUBU is the licensee who exploited Plaintiffs without conducting any due diligence as to their rights. 2. They did not know Mannie Jackson or anything about him or his company, HGI, before they contacted him to put the deal together;

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3. They took his word for the fact that he had the rights to use the Plaintiffs' names, numbers, and likenesses; 4. They never requested or looked at any contracts that purportedly gave Mannie Jackson or HGI the Right to use Plaintiffs' names, numbers, and likenesses for the purposes they were going to be used;
5. They never contacted any of the Plaintiffs' to confirm HGI's authority.

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6. They said that they got an Indemnification Agreement from Mannie Jackson, and that is all they needed before they embarked on a One Hundred Million Dollar deal.

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6 DAMAGE ISSUES. Compensatory Damages: Evidence of Plaintiffs' damages is in the record, and was in the record at the time of the summary judgment pleadings. .1 of the damages evidence will be presented at trial by FUBU representatives who have knowledge of the FUBU sales data and styles, the Plaintiffs themselves

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who personally bought some of the samples, and by Plaintiffs' investigators. Coppsatory DamaJrom the Lett, Chartsand Under1in Record Evidence. The letter and charts referenced in the Order denying Defendants' Motion for Summary Judgment as to Plaintiffs' right of publicity claim are part of Plaintiffs' Exhibit 13, which is comprised ofseveral documents, to Plaintiffs' Summary Judgment pleadings. HGI' s letter breaking down sales by all individual Plaintiffs was Plaintiffs' Exhibit 13C in the pleadings. Plaintiffs'

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Exhibit 13 also includes charts showing each individual Plaintiff styles Exhibit 13A & D. Charts
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13D have the following sections: A.

"L

r25O3"

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These styles and sales came from HGI's letter to the players

on 10/31/03. Exhibit 13C in the Summary Judgment pleadings. The styles reported are far fewer
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than what was actually made and sold i.e. Twiggy Sanders only had two jersey styles reported by HGI. B, "FUBU Report 1/1/02- 12/31/4"
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These styles and sales came from FUBU's first

discovery responses in the case 1/7/05 and 2/4/05. The documents produced by FUBU showed there were more styles and sales than HGI reported to Plaintiffs. Plaintiffs wrote FUBU on 2/16/05 and told them that the responses were not complete as Plaintiffs had located in the

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marketplace and acquired many more styles than FUBU was disclosing. FUBU responded with a letter on 4/8/05, and with additional production on 4/8/05. From the start, FUBU stated that nc "summary of styles and sales by players' names exists"

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J 8, FUBU Letter of4/8/05, and that "no sales detail reports by style exist for the women's line"
But, even the first production of 1/7/05 shows styles broken down by player number i.e. H3352,

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H8501, etc, and CAD computer assisted drawings of garments showed some designation of Plaintiffs' individually by name, number, and even an image of Curly Neal Bates #0003. Plaintiffs have proven from FUBU's production that FUBU had access to women's data from their sublicense, and that women's sales were substantial, This situation imposed on Plaintiffs the nearly impossible task of doing its own breakdown with no help from FUBU. FUBU refused to even comment on Plaintiffs' chart when asked to cooperate with the discovery request. FUBU's letter of 4/8/05.

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C, `Plaintiffs' Investigatipn"

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this is a section of the chart that shows styles located by

Plaintiffs themselves and their investigator. These styles had not been reported by HOl or FUBU, even though Plaintiffs' purchases were proof that the infringing garments had been made and were

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being sold. Plaintiffs supporting data shows where in the FUBU documents these styles and sales can be seen. This chart was proffered in Plaintiffs' Summary Judgment pleadings as part of Exhibit 13, Some style entries were determined to be duplicates but were initially believed to be different garments. Plaintiffs had to figure this out themselves. Plaintiffs' investigation includes another chart exhibits located and bought in the marketplace. Exhibit 13A. This chart shows many more styles that were never disclosed by HG! -10Case 2:04-cv-00299-DGC Document 637-6 Filed 04/03/2007 Page 11 of 20

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and FUBU, where they came from, and when acquired. Other underlying data includes the investigator's affidavit, sales receipts, and hundreds ofphotographs. FUBU provided no images of garments except a few CAl drawings just before discovery cut off. Plaintiffs' investigator Phipps was deposed on 9/23/05 at HGI's counsel's office where he brought the samples. The underlying sales data is from the FUI3U documents only because

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Plaintiffs had no other way to find sales data. HGI claimed they didn't get any and sued FUBU for their own accounting claims, Dl. "Team/Multiple P1ays Chart" and D2 "FUBU Products th Names
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Tags Only"

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These charts were Plaintiffs' effort to investigate styles that exploited jj of the Plaintiffs by using the Legend's hang tag and/or the Legends embroidery emblem, and are in Plaintiffs' Exhibit 13D proffered in Summary Judgment. FUBU represented that it had no data on what garments bore hang tags and provided none, and yet FUBU representatives testified that the hang tags were

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for marketing the clothes, Finally, on 8/17/05 FUBU produced several CAD's that showed hangtags FUBU Bates #1242 and 1244--the very hang tags obtained by Plaintiffs and found on numerous styles identified on this chart, and on Plaintiffs' investigation Chart 13A. Punitive Damages: Punitive Damages are allpwed in Arizona, in Invasion of the Right of Publicity cases. In Plaintiffs' complaints they asked for punitive damages, and the defendants never challenge punitive damages in a Dispositive Motion, There is only one case which discusses the claim of Invasion of the Right to Publicity in Arizona, Pooley v. NationalHole-InOneAss'n, 89 F. Supp. 2d 1108 D. Ariz. 2000, and that case -11Case 2:04-cv-00299-DGC Document 637-6 Filed 04/03/2007 Page 12 of 20

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does not discuss recovery of punitive damages if successful on the c]Lairn, However, where there is 2 no pertinent Arizona law, Arizona courts will follow the Restatement of the Law. Id. at liii; See
also Massage Envy Ltd., LLC v. JS & D, 2006 U.S. Dist, LEXIS 16373 D. Ariz, 2006Arizona
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follows the Restatement Third of Unfair Competition. Also, in Judge Campbell's order ofJune
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27, 2006, he agrees that the Restatement is the governing law in Arizona absent any law to the
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contrary. As the Restatement Third of Unfair Competition

§ 49 states, `Punitive damages are

ordinarily available to successful plaintiffs in right of publicity actions under the general rules applicable to the award of punitive damages in tort actions." In addition, in setting forth the proper elements for a claim for invasion of the right to publicity, the Pooley court adopted the elements as set forth in Eastwood v, Superior Court, 149 CaL App.3d 409 Cal. App. 1983. See Pooley, 89 F.Supp.2d at 1111-1112. California allows recovery of punitive damages for those who prevail in proving a claim of invasion of the right of

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publicity. See Clark v. America Online, Inc., 2000 U.S. Dist. LEXIS 17368 Central D. Cal. 2000;
See also Cher v. Forum International, Ltd, 692 F.2d 634,
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Cir. 1982. Consequently, Arizona

courts will follow California and recognize the right to recover punitive damages in right of 20 21
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publicity cases. To succeed on a punitive damages claim in Arizona, a plaintiff must prove by clear and convincing evidence that the defendant acted with the requisite `evil mind." Rodriguez v.
American Gyanamid Co., 1997 U.S. App. LEXIS 132289th Cir. 1997; See also Hooper v. Truly Nolen ofAm., 171 Ariz, 692, 695 Ariz. CL App. 1992. An evil mind may be shown by "either

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1 evil actions; 2 spiteful motives; or 3 outrageous, oppressive or intolerable conduct
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."

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Hooper, 171 Ariz. at 695. An "evil mind" is also shown by a defendant's intent to injure the
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plaintiff or when a defendant consciously pursues a course of conduct `knowing that it created a substantial risk of significant harm to others." Rodriguez v, American Gyanamid Co., 1997 U.S. App. LEXIS 13228 9th Cir, 1997. Once a judge finds there is clear and convincing evidence of an "evil mind" that would support an award of punitive damages, the decision goes to the jury. In deciding whether punitive

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damages are awardable, the inquiry should be focused upon the wrongdoer's mental state.
Bradshaw v. State Farm Mut. Auto, Ins. Co., 157 Ariz. 411, 421-423 1988. Several factors are

considered when deciding whether a defendant acted with an evil mind. Schmitz v. Aston, 197 Ariz. 264, 269 Ariz. Ct. App. 2000. These factors include the following: 1 the reprehensibility of the defendants conduct and the severity of the harm likely to result, 2 any harm that has

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occurred, 3 the duration of the misconduct, 4 the defendant's awareness of the harm or the risk of harm, and 5 any concealment of the wrongful conduct. Id.emphasis added. An award of punitive damages can be suppoed by a defendants attempt to cover-up his misconduct. Asphalt Eng'rs v. Galusha, 160 Ariz. 134, 135 Ariz, Ct. App. 1989. This includes pretrial conduct of the defendant during the discovery phase attempting to conceal documents evidencing the wrongdoing Id, InAsphaltEng'rs, the defendant attempted to coverup his misconduct in the pretrial phase of litigation by submitting numerous billing statements in support of his counterclaim that were incomplete and falsified. Id. In addition, the defendant attempted to cover-up the misconduct by lying about the disclosure of the billing statements. Id. This concealment during the pretrial phase supports an inference that the defendant either -13Case 2:04-cv-00299-DGC Document 637-6 Filed 04/03/2007 Page 14 of 20

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intentionally caused harm to the plaintiffs or consciously disregarded a substantial risk of significant harm to the plaintiffs, thus making punitive damages appropriate. Id, Plaintiffs assert the following facts will be established at trial to satisfy the clear and convincing requirement, and show the "evil mind" required for a verdict of punitive damages: 1. After litigation commenced, Defendant Mannie Jackson made HGI insolvent by pledging all

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the Intellectual Property Assets of HGI for a Nine Million Dollar loan. 2. FUBU lied about the number of styles of clothing that was being produced and sold. 3. FUBU & HGI withheld discovery, and manipulated the timing of providing discovery, that relating to the number and styles of the infringed clothing that was produced and sold. 4. FUBU & HGI withheld discovery so as to create a situation where Plaintiffs could not accurately determine the sales related to infringing garments.

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5. On a previous occasion FUBU withheld information to the point that the auditing firm
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rendered an opinion that they could not conduct the audit. Rule 404
6. FUBU lied about the fact that they did not break down sales per player. 7. FUBU initially lied, stating, "there were no overseas sale." When they were confronted with

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purchases made overseas, they partially admitted some overseas sales, When they were confronted with evidence of retail stores still being operated overseas, which had the name on the store, bags, sales slips, and advertisement, and the manager/owner stated he was still being supplied by the manufacturers, FUBU referred to them as rip-offs. 8. FUBU continued to manufacture and sell infringing garments long after the licensing agreement expired.

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9. When Meadowlark Lemon was inducted into the Basketball Hall of Fame, Mannie Jackson,

purporting to be Meadowlark's best friend, introduced him when he received his ring. In Mannie Jackson's introduction, he had many wonderful things to say about Meadowlark. All the while knowing that Meadowlark did not know he was using his name to make millions of dollars. To add insult to injury, after the induction ceremony, at the reception, Meadowlark was shocked to

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see, for the first time, fans wearing the Harlem Globetrotter clothing bearing his name and number. 10. Mr. Jackson based his opinion that he owned Plaintiffs' publicity rights in perpetuity upon "standard" player contracts Jackson Tr. pg. 231, 229, 230,. But, Jackson admits he never saw the individual player contracts of Plaintiffs Id. pg. 184 when shown exhibits that evidence that contracts were "substantially different from the standard form agreement used by HGT" a quote
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from former HG! president, Arthur Harvey Id. pg. 179, 180482. Jackson admits he had never
seen Curly Neal's employment contract before Jackson's deposition. "I have not seen it before."

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Id. pg. 102. 11, Jackson testified he never saw a union agreement prior to his deposition Jackson Tr. pg. 176, yet just came up with a 25% royalty rate for players on HG merchandise. His ignorance of

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union negotiated CBA rules is not credible given his claim of doing due diligence when he purchased the team in 1993 as he admits that he "was aware of an agreement between the
Globetrotters and a player union" Id. pg. 108, but didn't bother to look at it before manufacturing

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millions of dollars in clothing bearing Plaintiffs' names. Jackson says his only knowledge of the terms of the union agreement was from the media "in the `70's" Id. pg. 108.

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C.

SUMMLRY OF PROCEEDINGS, Ru1ings: Judge Campbell denied and granted various dispositive motions, Judge Campbell

denied motion to determine conflict
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a request by Plaintiffs to have separate independent

representative for HUl at the Settlement Conference. Judge Anderson denied Plaintiffs' Motion to force FUBU' s insurer to appear at settlement. Motins outstanding: Motion in Limine to exclude

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a Plaintiffs' damage exhibit. D. ESTIMATE OF COST AND TIME. 1. Further discovery: At this time no cost, no time, 2. Pretrial and trial: Two Flundred Thousand $200,000.00.

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E.

FACTS AND ISSUES UPON WHICH THE PARTIES AGREE AND DISAGREE, Ag: 1 FUBU produced and sold clothing with Plaintiffs names and numbers on it,

under a licensing agreement with HGI; and 2 FUBU and HGI made a profit on the sale of the

garments in question. Disagree: 1 Did HGJ have "consent" to license Plaintiffs' names, numbers, and likenesses to FUBU, to be used as they were used by FUBU, on garments and hangtags?; 2 Did FUBU act

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with reckless disregard because it did not perform due diligence to assure themselves that HGI had sufficient authority to license the use of Plaintiffs' names, numbers, and likenesses in the way they were used?; 3 What is the amount of compensatory damages?; 4 Are Plaintiffs allowed to
recover punitive damages in Arizona?; and 5 Are punitive damages allowed in "Invasion of the

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Right of Publicity" cases?

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F.
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DOMINANT ISSUES-IESOLVED

AID NpJSPQITIoN,

1. Are Plaintiffs allowed to recover punitive damages in Arizona? 2. Are punitive damages allowed in "Invasion of the Right of Publicity" cases.

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3. What evidence of damages can Plaintiffs present at trial?
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4. In the Court's opinion, is the wrongdoing alleged, and law cited, under CLAIMS AND

DEFENSES B6-Damage Issues2 above, sufficient to allow for punitive damages in this case?

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G.

RELIEF

SOUGHT.

An amount which is the Court's opinion of likely outcome at trial. Also, Licensing Agreements. Also, the Plaintiffs believe they can prove gross sales from which compensatory

damages may be measured: From Letter and Chart Neal Thornton
Hall

From All Record Evidence of Styles
2,494,243

,

1,596,932 958,411
335,291

1,733,373
876,959

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Rivers Sanders Haynes Lemon H.

1,233,679 1,033,863
907,258

2,225,000

1,829,105 1,584,516 1,448,926 2,800,000

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POSITION ON SETTLEMENT.

Amount Plaintiff will accept: See G above, plus punitive damages. History of settlement discussions: Early in case Defendants offered $25,000.00 to settle with all
Plaintiffs, which was rejected. Recent mandatory demand for all seven Plaintiffs:

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$125,000,000.00. Offer by Defendants: $130,000.00. Plaintiffs' demand based on verdict with punitive damages.

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RESPECTFULLY SUBMITTED this

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21st

day of September 2006.

ROSENQUIST & ASSOCIATES
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By: _js/Anders 1ose.ngui__ Anders Rosenquist, Jr. Florence M, Bruemmer Attorneys for Plaintiff Meadowlark Lemon MORGAN & MORGAN PA. By: js/ Clay M. Townsend Clay M. Townsend, Esquire Florida Bar No.: 363375 Keith Mitnik, Esquire Florida Bar No.: 436127 Brandon S. Peters, Esquire Florida Bar No.: 965685 Attorneys for Plaintiffs Fred Neal, Larry Rivers, Robert Hall, Dallas Thornton, Marques Haynes and James Sanders

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Case 2:04-cv-00299-DGC Document 637-6 Filed 04/03/2007 Page 19 of 20

CERTIFICATE OF SERVICE
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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.
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2. I hereby certify that on September 21st, 2006, a true and correct copy of the foregoing PLAINTIFFS' SETTLEMENT CONFERENCE MEMORANDUM, with attachments, was sent by email and first-class mail to: Edward R. Garvey [email protected] Safia A. Anand [email protected] Joel Louis Herz [email protected] Ira S. Sacks [email protected] Ray Harris [email protected]
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3. I hereby certify that on September
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I emailed a copy of the foregoing document to:

Honorable Lawrence Anderson Arizona District Court andersonchambersazd.uscourts.gov
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I declare under the penalty of perjury under the laws of the United States that the foregoing is a true and correct. Executed this 21st day of September 2006, at Phoenix, Arizona.

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Is/Florence M, Bruemmer

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Case 2:04-cv-00299-DGC Document 637-6 Filed 04/03/2007 Page 20 of 20