Parrish et al v. National Football League Players Incorporated

Filing 553

Transcript of Proceedings held on 11-10-08, before Judge William H. Alsup. Court Reporter/Transcriber Katherine Powell Sullivan, CSR, RPR, CRR, Telephone number 415-794-6659. Per General Order No. 59 and Judicial Conference policy, this transcript may be viewed only at the Clerks Office public terminal or may be purchased through the Court Reporter/Transcriber until the deadline for the Release of Transcript Restriction.After that date it may be obtained through PACER. Any Notice of Intent to Request Redaction, if required, is due no later than 5 business days from date of this filing. Release of Transcript Restriction set for 2/5/2009. (Sullivan, Katherine) (Filed on 11/10/2008)

Parrish et al v. National Football League Players Incorporated

Doc. 553

Volume 14 Pages 2830 - 2902 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA BEFORE THE HONORABLE WILLIAM H. ALSUP ) ) ) ) Plaintiffs, ) ) VS. ) ) NATIONAL FOOTBALL LEAGUE PLAYERS ) ASSOCIATION and NATIONAL FOOTBALL ) LEAGUE PLAYERS INCORPORATED d/b/a ) PLAYERS INC, ) ) Defendants. ) ___________________________________) BERNARD PAUL PARRISH, HERBERT ANTHONY ADDERLEY, WALTER ROBERTS III,

No. C 07-0943 WHA

San Francisco, California Monday November 10, 2008

TRANSCRIPT OF PROCEEDINGS APPEARANCES: For Plaintiffs: BY: MANATT, PHELPS & PHILLIPS 1001 Page Mill Road, Building 2 Palo Alto, California 94304 RONALD S. KATZ, ESQ. RYAN S. HILBERT, ESQ. MANATT, PHELPS & PHILLIPS 7 Times Square New York City, New York 10036 L. PETER PARCHER, ESQ. MCKOOL SMITH 300 Crescent Court Suite 1500 Dallas, Texas 75201 LEWIS T. LECLAIR, ESQ. BRETT CHARHON, ESQ.

BY:

BY:

(Appearances continued on next page) Katherine Powell Sullivan, CSR, RPR,CRR Official Reporter - U.S. District Court [phone]
Dockets.Justia.com

APPEARANCES (CONTINUED): For Defendants: BY: DEWEY & LEBOEUF 1301 Avenue of the Americas New York City, New York 10019-6092 JEFFREY L. KESSLER, ESQ. DAVID GREENSPAN, ESQ. DAVID G. FEHER, ESQ. ROY TAUB, ESQ. MOLLY DONOVAN, ESQ. JASON CLARK, ESQ.

Reported By:

Katherine Powell Sullivan, CSR # 5812 CSR Official Reporter - U.S. District Court

Katherine Powell Sullivan, CSR, RPR,CRR Official Reporter - U.S. District Court [phone]

2832 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 everyone. Ms. Desouza, you're our foreperson, correct? FOREPERSON MS. DESOUZA: THE COURT: Yes. a plan. THE COURT: Let's bring our jury in. NOVEMBER 10, 2008 PROCEEDINGS 1:41 P.M.

(The following proceedings were held in open court, outside the presence of the jury.) THE COURT: Welcome back. Everyone have a seat.

We have a note saying they have reached a verdict. So my plan is to bring them in and get the verdict. Any objections? MR. KATZ: No objection. No objections, Your Honor. Sounds like

MR. KESSLER:

(Thereupon, the jury returned to the courtroom.) THE COURT: All right. Welcome back. Have a seat,

Have you reached a unanimous verdict? Yes.

FOREPERSON MS. DESOUZA: THE COURT:

Did you date and sign the form? Yes.

FOREPERSON MS. DESOUZA: THE COURT:

In other words, there is a date on there? Yes.

FOREPERSON MS. DESOUZA: THE COURT:

And a signature? Yes.

FOREPERSON MS. DESOUZA:

2833 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 clerk. THE COURT: Would you hand the form to the marshal.

The marshal will hand it to me. Now, what I'm going to do is look at this, in just a moment, to make sure it's in the right form. is, I'll hand it to the clerk to read. But I would like to say what I'm about to say before I open this up so there won't be any doubt as to what you decide. It's completely your decision, and my thanks to you is And then if it

independent of that, and makes no difference to me which way your verdict is. system. That's a great thing about our American jury

So I want to thank all of you for your hard work and It's what makes our

attention in this case over many weeks.

country great, to have good citizens like you who will come in and serve their country. for doing that. Now I'm going to open this up. It's all sealed up. You made a big sacrifice. Thank you

If it's in good order, I'll get the clerk to read it. All right. What I'm going to do is give this to the And at the end, we

The clerk will read each question.

will ask you whether or not the verdict as read is your individual verdict. That way we will know that it's unanimous.

So, please, listen carefully as the clerk reads the verdict. THE CLERK: Okay. Thanks.

Ladies and gentlemen of the jury, listen to your verdict as it will stand recorded.

2834 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 In the case of Herbert Anthony Adderley versus National Football League Players Association and National Football Players -- I'm sorry, National Football League Players Incorporated, the special verdict form is: Answer to question number 1: "On behalf of the class, has plaintiff proven by a preponderance of the evidence a class-wide breach of any term of the RPGLA?" No. I'm sorry. Answer:

"Yes." Question 2: "If the answer to question No. 1 is 'Yes,' then state the amount of damages to class members, if any, plaintiff has proven by reason of any such breach." Dollar amount is zero. Question 3: "On behalf of the class, has plaintiff proven by a preponderance of the evidence that defendants owed a fiduciary duty to the RPGLA Class in connection with the RPGLA?" Answer: "Yes."

Question 4: "If your answer to Question No. 3 is 'Yes,' then state whether plaintiff has proven by a preponderance of the evidence any class-wide breach of fiduciary duty by defendants under the RPGLA.

2835 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 verdict? verdict? JUROR MR. CHUI: THE CLERK: Yes. verdict? JUROR MS. SMITH: THE CLERK: Yes. verdict? FOREPERSON MS. DESOUZA: THE CLERK: Yes. Answer: "Yes." "If your answer to Question No. 4 is

Question 5:

'Yes,' then state the amount of damages to class members, if any, plaintiff has proven by reason of any such breach. Answer: "7.1 million." "If the answer to Questions No. 3 and

Question 6:

No. 4 are 'Yes,' then state whether plaintiff has proven by clear and convincing evidence that punitive damages should be imposed on defendants." Answer: "Yes."

It's signed and dated by the foreperson on November 10, 2008. THE COURT: jury, please. THE CLERK: Lisa Desouza, is the verdict read your All right. Let's poll each member of the

Nancy Jean Smith is the verdict read your

Danny C. Chui, is the verdict read your

Douglas Neville, is the verdict read your

2836 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 verdict? JUROR MS. HOLM: THE CLERK: THE COURT: Yes. verdict? JUROR MS. HART: THE CLERK: Yes. verdict? JUROR MS. YAMANE: THE CLERK: your verdict? JUROR MS. SCHWARTZLER: THE CLERK: Yes. Yes. verdict? JUROR MS. MA: THE CLERK: Yes. JUROR MR. NEVILLE: THE CLERK: your verdict? JUROR MS. MARTIN: THE CLERK: Yes. Yes.

Debra Jean Martin, is the verdict read

Lana Lim Ma, is the verdict read your

Laura Yamane, is the verdict read your

Ofelia Schwartzler, is the verdict read

Natalie Hart, is the verdict read your

And, Amy Holm, is the verdict read your

Your Honor, the verdict is unanimous. All right. We will move directly into

the proceeding where you determine the amount of punitive damages. That's the short, supplemental proceeding. I'm going And when

to ask you to take a 15-minute break at this point.

you come back, you will hear the supplemental proceedings and

2837 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 the supplemental argument, and then you will go back into the jury room to determine the amount of any punitive damages. All right. So thank you. Your job is not done yet.

We'll see you back in here in a few minutes. THE CLERK: All rise.

(Jury in recess.) (The following proceedings were held in open court, outside the presence of the jury.) THE COURT: Plaintiff, do you have any additional

witnesses you wish to put on? MR. KATZ: Yes, we do, Your honor.

We are calling now Mr. Rowley, our damages expert, to come back. THE COURT: MR. KATZ: Your Honor. One Market. THE COURT: MR. KATZ: THE COURT: All right. The -He better be here in 15 minutes. He is within 15 minutes of the courtroom,

He's on standby and he's coming right away from

And we also will call Mr. Berthelsen. You can call him first. Each side only

has about 30 minutes of time left. brief, as we promised the jury. MR. KATZ:

So this is going to be

I'm going to call Mr. Berthelsen.

I think

I have about 15 minutes with him and about 15 minutes with Mr. Rowley.

2838 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 amount. MR. KATZ: So I would take then ten, and then five that. MR. KATZ: THE COURT: MR. KATZ: to closings? THE COURT: their argument. MR. KATZ: THE COURT: All right. Then the jury goes back and decides the Each side will get about 15 minutes to do All right. Enough time remaining, is what I mean. What is Your Honor's thought with respect THE COURT: All right. You have enough time to do

after Mr. Kessler's case. THE COURT: That's fine.

Mr. Kessler, anything you want to bring up by way of procedure? MR. KESSLER: Well, first, Your Honor, I don't know

if you want now to hear we obviously would renew our motion for JMOL, Your Honor, both with respect to the liability determinations, and with respect to the damage determinations, and with respect to the punitive damages -THE COURT: All of that is renewed. But we have a

jury that hasn't had a completed verdict yet. MR. KESSLER: THE COURT: Okay.

So we can't just hold them in abeyance

2839 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 time. until we argue ad infinitum over those items. MR. KESSLER: THE COURT: I understand, Your Honor.

You have to let them make their decision. I wanted to preserve our motions which Obviously, Your Honor, in terms

MR. KESSLER:

we will argue at some point.

of timing, I will need some time, and I understand the constraints, to cross-examine, obviously, their witnesses that they are going to put on. THE COURT: Each side has about 30 minutes left of

So when we run out of time, we run out of time. Can I just give each side 30 minutes -- can we just

agree on 30 minutes of evidence time per side? MR. KATZ: THE COURT: Mr. Kessler? MR. KESSLER: that's it. If that's all Your Honor is allowing, Sure. All right. So use your -- how about you,

I do think this is an important issue, but I But I guess I would

understand Your Honor's determination.

object to the limitations on the time on this issue, but, Your Honor -THE COURT: Do you want me to go back and add up the I will. It might not even be 30

amount of time you have left? minutes.

But if it's more, then I will give each side more. MR. KATZ: Your Honor, if you're finished with that,

I have another subject.

2840 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 yet. MR. KATZ: Here's 16.01 and 16.03. I have made some Honor. THE COURT: MR. KATZ: Sure. Do you intend to read 16.01 again to them, THE COURT: MR. KATZ: Sure. Your Honor has given an instruction on

punitive damages, but, then, there is yet another standard D.C. instruction, number 16.3, which deals with the computation. THE COURT: that here? MR. KATZ: I have a copy of it, Your Honor. It's Yes, I need to have that. Do we have

slightly marked, but I can give it to you. THE COURT: I'm going to need to instruct on that.

I'll ask my law clerk to go find whatever we have on that subject. MR. KATZ: If you'll just give me a moment, Your

which is what you gave the other day? THE COURT: MR. KATZ: THE COURT: I have already given that once before. Right. Let me see the part that I haven't given

underlinings on them, but they are of no consequence. MR. KESSLER: Well, Your Honor, there are factors

here in which we never had -- I don't know what he intends to put in. We've never even had any discovery on, for example,

2841 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 charging them about the amount of attorneys' fees the plaintiffs have incurred in the case, or things of that nature. I don't know whether he intends to put that on. But

if that's to be the case, Your Honor, frankly, I don't think there should be a proceeding immediately. MR. KATZ: We don't intend to put on evidence Although, I think Your

regarding attorneys' fees, Your Honor. Honor can still give that instruction.

The jury obviously is going to know -THE COURT: I'll take out the word "the costs," and

put in "the duration of the litigation." I think they can infer and use common sense as to what the -- that entails, costs. But I think the attorneys' fees, it would be unfair at this stage to inject that into the case. MR. KATZ: We're not going to inject it, but I still

think that those words can remain in the instruction because the jury will obviously know that attorneys' fees are part of this. And the parties did agree to D.C. law. THE COURT: I'm going to put in "burden" instead.

I'll say "the burden and duration of the litigation." That will just be a point of argument. You can say:

Look how many lawyers were in the courtroom, and so forth, how many depositions you heard from. But it would be unfair to start trotting out -- and

2842 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 this. you can argue attorneys' fees. In other words, you can say:

All these attorneys aren't free, they cost something. MR. KATZ: THE COURT: Okay. But the -- discovery wasn't taken on

It wouldn't be fair, at this stage, to start laying

attorneys' fees and billing rates and so forth before the jury. But I'll substitute "the burden and duration of the litigation." MR. KATZ: Also, Your Honor, we will be -- I don't I will be using a

know where the exhibits are right now. couple of those exhibits. THE COURT: MR. KATZ: statement is in. Which ones?

The financial statements? The 2007 financial

Yeah, 22 -- one is in.

I believe that's 1024.

And, also, we're

going to put in the 2008 financial statement, which is 2242, I believe. THE COURT: MR. KATZ: THE COURT: Is that in yet? It is not in yet. At this point, it should be in.

So, do you want the jury to return, for use during the argument, the earlier exhibit you mentioned? MR. KATZ: Well, I -- actually, I think that it's And I believe that Mr. Berthelsen

overtaken by the '08 ones. is going to be able to -THE COURT:

Do you have that here in the courtroom?

2843 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 MR. KATZ: THE COURT: MR. KATZ: I have copies of it, yeah. All right. Now, another thing, Your Honor, we don't So what we have done

have our audiovisual equipment anymore.

is that we have made sufficient -- I'm going to be using, I want to say, three or four exhibits. We've made sufficient

copies to give to the jury and to give, of course, Your Honor, and Mr. Kessler. We would ask permission to hand those out -THE COURT: It's okay with me, as long as Mr. Kessler

looks at it and makes sure it's an accurate copy. MR. KATZ: Yeah, these are like the Duff & Phelps

report, their financial statement -THE COURT: It could be three documents on it. I have a question. You say the Duff &

MR. KESSLER:

Phelps report from 1994? I can't imagine why that would be admissible or relevant to this proceeding. He's not entitled now, Your

Honor, to reargue liability issues. MR. KATZ: THE COURT: I don't intend to do that, Your Honor. What does that have to do with the

financial net worth or the issues that we're -- the jury has already determined that there should be punitive damages. And, now, it's true that they say "the nature of the wrong committed," but we're not going to go back and start

2844 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 hand out. MR. KATZ: All right. And then I can show, for putting exhibits before the jury on the nature -- we had a whole trial on that. MR. KATZ: Your Honor, the Duff & Phelps report does

give a methodology for computing what they call "enterprise value," which is essentially net worth. testify to that. So I -Is that already in evidence? The Duff & Phelps report is. That's Mr. Rowley will

THE COURT: MR. KATZ: number 93. THE COURT:

I think the only ones that you should be I will give

putting in the jury box are financial statements.

you permission to argue, to put the new financial statement in the jury box. But the others are already in evidence. just refer to it in your argument. And you can

If you think the Phelps --

I think what you have in mind will just deluge the jury with a lap full of documents in what is supposed to be a short proceeding. So I think anything that's already in evidence you just have to argue it. I'm sorry you don't have your equipment

here, but you can just argue it the old-fashioned way. But the new financial statement, that one you can

example, the Duff & Phelps report to Mr. Rowley, because he

2845 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 right. anymore. MR. KATZ: THE COURT: I have a copy for you. I'm not going to send in a written I'm going to read it the will be referring to it in his testimony. THE COURT: MR. KATZ: THE COURT: witness, of course. MR. KESSLER: Your Honor, I assume he's going to have I don't --

Yeah, you can do that. Yeah. You can do that with the testimony of the

a copy for me of these documents. MR. KATZ: Oh, yeah. We don't have those in the courtroom

MR. KESSLER:

version of the instructions. old-fashioned way. All right. MR. KATZ: THE COURT: So --

Your Honor -Let's take a moment to let you get

organized, and then we'll bring the jury back. MR. KATZ: THE COURT: up to you. MR. KATZ: For the witnesses, it can be here. For Okay. So do you want the podium here? It's

You can move it back, if you want.

the closing, I would rather -- maybe I can move it over. THE COURT: Move it around the way you want. All

We'll take another 10-minute break, and then we'll come

2846 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 back. MR. KATZ: Thank you, Your Honor.

(Recess taken from 1:59 to 2:18 p.m.) THE COURT: have to get going. Mr. Katz has returned. has roughly 40 minutes of time. evidence time. This is not an occasion, in these supplemental proceedings, to go back over the conduct that led to the wrong in the first place. That evidence is already before the jury. I did the math, and each side But I want to say this -All right. Let's go back to work. We

We don't embellish it, at this point. The whole purpose of the supplemental proceeding is to introduce financial information which is usually objected to by the defendant because they don't want that before the jury in deciding liability. So that is what the purpose of the evidence at this stage is, to lay before the jury the factors on which you would not have had an opportunity, like net worth of the defendant, at the time of trial. If there had been discovery provided on

the burden and duration of the litigation, but I think the jury can infer from the number of depositions and the number of lawyers and so forth, get a rough estimate of what the burden has been. But we're not going to go back into making

2847 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 Mr. Berthelsen look like a bad guy from the nature of the wrong. That's been done. So don't start asking him questions

about fraud and so forth, intending to commit fraud. All right. MR. KATZ: Well, Your Honor, obviously, I'm going to

follow your guidelines. I have been in other proceedings of this nature where remorse is considered because that goes to the need to deter the behavior. But if Your Honor doesn't want me to go into

that, then I won't go into that. I do think it's relevant. And it does require

talking a bit about some of the issues that have come up; for example, the scrambling. THE COURT: Well, let's ask, Mr. Kessler, are you

going to get into those kinds of things? MR. KESSLER: Absolutely not, Your Honor. And I

object to him doing it, too, certainly, under these time constraints. THE COURT: Look. We have already had one trial on

the state of mind of the defendant when the wrong was committed. We don't need to embellish that. So remorse is not

indicated in this instruction you gave me. going to get into that.

So we're just not

What you should be getting into is the relative financial condition of the defendant. That's fair game. But

2848 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 all of these other factors -- really, in all the other cases that I've done where there has been punitives, the lawyers don't even try to put on evidence. The only thing additional

that comes in is the financial statement, and then we immediately proceed to the argument. So just giving you this opportunity to put on more evidence is already going beyond what is normally done on punitive damages. I just want it to be clear, the purpose of this supplemental evidence is to address issues we haven't addressed yet, namely financial condition. ruling. Now, if the witness blurts out something that requires a follow-up and so forth, I won't say never, but going into this the ground rule has got to be the number one and only relevant consideration is financial condition of the defendant. I think all of these other factors are either self-evident or -- you -- I will allow you to ask him about the burden and duration of the litigation, because, for example, I guess you could even ask how much has he paid in fees to the other side. MR. KATZ: THE COURT: To his lawyers? That would be okay. To his lawyers. So that's going to be the

That would be roughly -MR. KESSLER: I would object to that, Your Honor. I

2849 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 fees? don't think that's relevant. THE COURT: Well, then, let me ask, has your law firm

been paid money, or are you doing this on a contingency? MR. KATZ: contingency. On a contingency -- it's not a

Your Honor sets the fees. How can you get up and say attorneys'

THE COURT:

Plaintiff hasn't incurred any attorneys' fees. MR. KATZ: Actually, it's worse than that. Your

Honor sets the fees. THE COURT: MR. KATZ: What? Only you will know what the fees are going

to be, because you set the fees. THE COURT: I'm just going to rule: Off limits.

You can ask him how long the litigation has gone on, how many depositions there were, if he knows, how many lawyers were involved by -- on the defense side. the plaintiff side. But we're not going to get into the dollar amount, because the dollar amount of attorneys' fees paid by the defendant is not in your -- it's not in your write-up here, this instruction you gave me. MR. KATZ: Well, the instruction does include I think you've But to get -- or on

language about attorneys' fees, Your Honor. changed that. THE COURT:

Attorneys' fees that the plaintiff has

2850 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 incurred. MR. KATZ: THE COURT: Right. And I think that -incurred. MR. KATZ: THE COURT: Right. It doesn't say that the defendant has

I just think to be safe here, I'm not

going to go beyond what's in this paragraph. And I think that we ought to stick to what is normally done and customary on these supplemental proceedings, and be very short. So I think you -- I've indicated what I

think you can get into. So let's -- but let's get started. ready to go. This jury is I'd

We have a shot at getting this over today.

like to get it done today. MR. KATZ: Also, Your Honor, I have put -- asked your

clerk to give you the financial statement. THE COURT: MR. KATZ: I got it. It's not the original. So -- I mean, I I'm

know your rule is we have to use the original document. just saying this is not the original. THE COURT: being the original. MR. KATZ:

In this case, 2242 can be used without

Mr. Kessler has a copy, and I put one up

there for the witness. THE COURT: All right. Dawn, let's bring in our

2851 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 jury. THE CLERK: Okay.

(Thereupon, the jury returned to the courtroom.) THE COURT: All right. proceeding. Welcome back. Have a seat.

We need to have a supplemental

And let me give you what that's all about. The first part is the

This comes in two parts.

evidence part, in which you will hear some additional evidence that mainly goes to the financial condition of the defendant at the time of the trial. And as you will see from the jury instructions, the reason that that is relevant is that you can consider, in deciding what the amount of punitive damages should be, what the relative wealth is of the defendant at the time of trial, or the net worth. So there's no set formula. It's just a

factor that you can consider. And then, you've already heard most of the evidence in the case that relates to the issue you still need to decide, but you will get, first, some additional evidence, mainly on financial condition. And then there will be part two, which is

a short, this time short, argument, 15 minutes per side, that will be on what the dollar amount should be. And then you go

and -- to the jury room and decide that issue. At this time, then, we reopen the evidence, and Mr. Katz is going to call a witness for plaintiffs.

2852 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 BY MR. KATZ: Q. Good afternoon, Mr. Berthelsen. You have before you Exhibit 2242. Could you take a Court. DIRECT EXAMINATION forward. I can't remember if we excused you, so we'll have to swear you in again. somewhere in there. RICHARD BERTHELSEN, called as a witness for the Plaintiffs herein, having been first duly sworn, was examined and testified as follows: THE WITNESS: THE CLERK: THE COURT: I do. Thank you. Thank you, Mr. Berthelsen. So, please, raise your right hand Mr. Katz. MR. KATZ: Thank you, Your Honor. Good afternoon.

Good afternoon, ladies and gentlemen of the jury. Plaintiff calls Richard Berthelsen. THE COURT: All right. Mr. Berthelsen, please come

Okay.

All right.

You know the drill by now. If you can speak into the microphone and adjust it so that it catches your voice, that would be great. Mr. Katz, please proceed. MR. KATZ: Thank you, Your Honor. May it please the Okay.

BERTHELSEN - DIRECT / KATZ

2853

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

look at that, please. A. Q. Okay. And just to refresh everybody's recollection, you are

currently the interim head of the union, the interim executive director; is that correct? A. Q. I'm the acting executive director, yes. And you have been with the union for over 27 years; is

that correct? A. Q. Quite a bit over 27 years, yes. Right. And you have been the general counsel of the

union? A. Q. A. Q. I have been, yes. So the top legal officer? If you want to call it that, yes. And you also offer legal advice to Players Inc; isn't that

right? A. Q. A. Q. Very rarely. But you have done that? On infrequent occasions. Yes. Isn't it a fact, sir, that Exhibit 2242 is the

annual financial report for the National Football League Players Association and NFL Players for the period March 1st, 2007, to February 29, 2008? A. It appears to be. MR. KATZ: I offer Exhibit 2242, Your Honor.

BERTHELSEN - DIRECT / KATZ

2854

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

MR. KESSLER: THE COURT:

No objection. That's received. 2242 is in.

All right.

(Trial Exhibit 2242 received in evidence.) MR. KATZ: Also, Your Honor, because we don't have

our audiovisual material, I have made copies for the jury, if Your Honor -THE COURT: Please hand those to Ms. Desouza, and she

will pass them around. MR. KATZ: Thank you.

Your Honor, on -BY MR. KATZ: Q. Mr. Berthelsen, I would like to direct your attention and

the jury's attention to numbers on the bottom right-hand corner of the pages. They're called Bates numbers.

I would like to direct your attention to the one that is PI 140393. A. Q. A. Q. A. Q. A. Okay. And can you tell the jury what that is, sir, please. It's entitled, "Consolidated Statements of Activities." This is a document prepared by your accountants? Yes. For financial reporting purposes? For reporting to our Board of Player Representatives, the

governing body of our organization. Q. Okay. And this is the official report for that period of

BERTHELSEN - DIRECT / KATZ

2855

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

March 1st, 2007, to February 29, 2008? A. Q. It appears to be. Directing your attention to the bottom of page PI 140393,

there's an item which is labeled -- if you look at the left-hand column, it says, "Unrestricted Net Assets." Do you see that? A. Q. I do. And then if you go to the bottom line, it says, "End of And if you go over three columns, it gives the number Do you see that, sir?

Year."

$219,655,553. A. Q. A. I do.

Is that the net worth of the NFLPA, of the defendants? I don't know. The words "net worth" are not here. I

don't know that that's the net worth. Q. A. Do you believe that to be the net worth? Well, it's been a while since I've had -- I had accounting

in college, and I understood net worth to be the difference between your assets and your liabilities. If that's what this

number is, then it would comport with my understanding of what net worth is. Q. Okay. And then if we look at the top line, there's -- if At the

you look at the left-hand column, it says "Revenue." top of the left-hand column, "Revenue" -A. Q. Yes. -- do you see that?

BERTHELSEN - DIRECT / KATZ

2856

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 A. Q. Yes.

And then it says "Royalties" after that?

And then from licensing, licensing royalties for this

period of time from 2007 and 2008, were approximately $81 million; is that correct? A. Q. A. Q. That's the number that appears there. And you have no reason to doubt that, do you, sir? No. Okay. And then you were here when Mr. Parcher gave his

closing argument the other day. A. Q. I was. And he mentioned a figure of unrestricted -- an If

unrestricted account which he said was about $68 million.

you look, again, at the unrestricted net assets beginning of year, that was $67 million, where it says "Beginning of Year." It's, again, at the bottom left. A. Q. You have to show me where you're pointing to. At the bottom left, if you go down the column, it says,

"Unrestricted Net Assets"? A. Q. Yes. And then it says "Beginning of Year." And then it gives

the number $67,961,194.

Do you recall that that's the number

that Mr. Parcher gave to the jury the other day? A. I think he gave a number that was close to that.

Although, he mischaracterized it, in my view.

BERTHELSEN - DIRECT / KATZ

2857

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

Q. A.

$68 million, right? There is a figure on the financial, saying that, yes. But

all of our funds are basically restricted because they're basically held in trust for the interests of the people we represent. MR. KATZ: nonresponsive. THE COURT: BY MR. KATZ: Q. And then that number has actually gone up -- Mr. Parcher Overruled. Please continue. I move to strike, Your Honor. It's

gave the number for the beginning of the year, which was March of 2007. But that number has actually gone up, as of

February 29, 2008, to $98,038,660; is that correct? A. Q. A. Q. I don't have the previous statement in front of me. It says here "Beginning of Year." Okay. Beginning of year would be, if we look at the cover,

March 1, 2007; isn't that correct, sir? A. Q. Yes. And then at the end of the year was 98,038,660; is that

right? A. Q. A. I see what you're referring to. Is that right? That number appears at the bottom, under the column "End

of Year."

BERTHELSEN - DIRECT / KATZ

2858

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

Q.

Do you have any reason to believe that that number is not

correct? A. Q. A. Q. As of that date, it was probably correct. Okay. It may not be now. Do you have any reason to believe that any of the numbers

in this document are not correct? A. Q. No, I don't. The -- now, you testified, sir, about the Duff & Phelps

report that was issued in 1994. A. I think I may have been asked about it. I don't recall

much testimony about it. Q.

But I know what you're referring to. Do you

I think Mr. Hummel was asking you about that.

recall? A. Q. I recall I was asked about it in my testimony, yes. Has Duff & Phelps issued any other reports since that

report, which is Exhibit 93? A. No. MR. KATZ: THE COURT: I have nothing further, Your Honor. All right. Anything more?

MR. KESSLER: THE COURT:

I have some questions, Your Honor. Please.

Sure.

MR. KESSLER: the jury.

Good afternoon ladies and gentlemen of

Mr. Berthelsen, good afternoon.

BERTHELSEN - CROSS / KESSLER

2859

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 A. Q. BY MR. KESSLER: Q.

CROSS EXAMINATION

The document the jury has been given and you were looking

at is dated February 29, 2008; is that correct? A. Q. That's correct. Okay. Are the unrestricted assets of the NFLPA and

Players Inc generally invested? A. Q. A. Q. Yes, they are. Take a look at page 406. I got it. Okay. And you'll see here that it talks about And there's an indication here that as of It begins with a PI 140406.

investments.

February 29, 2008, there was $111,158,000 invested. Do you see that, sir? Yes, I do. And, generally speaking, since last February, has the

market for stocks, alternative investments, municipal obligations, et cetera, gone up or down? MR. KATZ: foundation. THE COURT: Well, first of all, establish that he's And then he can then answer the Objection, Your Honor. There is no

in a position to know. question. BY MR. KESSLER: Q.

Do you know, sir, whether or not the investment value of

BERTHELSEN - CROSS / KESSLER

2860

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

funds that the union has had invested has gone up or down since last February? A. Q. A. Yes. Okay. Has it gone up or down?

Down, along with everybody else's investments in the stock

market. Q. Has it gone down significantly or -MR. KATZ: BY MR. KESSLER: Q. -- or just a little bit? MR. KATZ: foundation. Object, Your Honor. There is no Object, Your Honor.

Not the best evidence. Doesn't have to be the best evidence, as

THE COURT:

long as he is competent to testify to it. Do you know this of your own personal knowledge? THE WITNESS: would. Well, in the same way that all of us

I check every day in the newspapers, and I check

periodically with our director of finance. THE COURT: Go ahead. BY MR. KESSLER: Q. A. Q. Has it gone down significantly? Yes. And, Mr. Berthelsen, whatever amount of unrestricted net All right. The objection is overruled.

assets you have left, would you explain to the jury, please,

BERTHELSEN - CROSS / KESSLER

2861

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

you said those assets were held in trust for the active players. A. What did you mean by that?

Well, in effect, all of our assets are restricted because

they come from either active player licensing or from dues. And we, in effect, hold the money in trust for the players, the active players, to help protect their future. It's a decision that they make that instead of having their dues refunded or instead of having more of the licensing money go back to the players, that it's put aside so that we're protected in the future. lockout in the year 2011. We recently saw how the hockey players were locked out and they lost an entire season. Literally, hundreds of We're going to be facing a possible

millions of dollars were lost as a result of that lockout. So we, in effect, are holding all of these assets in a restricted way, in trust for the players, in case they have to go through what the hockey players did. And every indication, at this point, is that that's what the NFL owners want to do, and that's what they're threatening the players with. Q. If there is a lockout or strike or an end of this

bargaining agreement -- first, have they always given notice as to when the collective bargaining agreement is going to expire? A. Yes, they have. MR. KATZ: I'm going to object, Your Honor. It is

BERTHELSEN - CROSS / KESSLER

2862

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

beyond the scope. THE COURT: It is beyond the scope, but the defendant

is entitled to recall Mr. Berthelsen to testify. So the objection is overruled. MR. KATZ: Your Honor, it also would be opening the

door, I think, to some of the topics we talked about in the break. THE COURT: I don't see that. I don't see that, Your Honor, either.

MR. KESSLER: MR. KATZ: Sorry, Your Honor. THE COURT: BY MR. KESSLER: Q.

Well, I'll take them one at a time.

All right.

Go ahead.

Have the owners given notice as to whether or not they're

going to terminate the collective bargaining agreement early? A. Yes, they gave us notice earlier this year that they

intend to terminate it two years prior to its expiration. Which puts us at a possible lockout in the year 2011. Q. Have you been through labor battles with the NFL owners

before? A. Q. On many, many past occasions, yes. And based on your experience through labor battles with

the NFL owners, even if your unrestricted net assets had not declined during the stock market, is the -- would 98 million even be a large amount of money to go into a labor battle with,

BERTHELSEN - CROSS / KESSLER

2863

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

in your judgment? MR. KATZ: THE COURT: BY MR. KESSLER: Q. Explain to the jury, based on your more than 30 years of Object. Leading. Sustained.

It is leading.

experience in the union, the need or lack of need for these assets in any labor battle and why. A. We have an enormous need for this amount of money, and

even more, because all of the National Football League owners are, by definition, billionaires. They have almost unlimited resources because their franchises are worth, on average, over a billion dollars. They

go up in value each year by a tremendous amount, an average of $85 million. So you take that times 32, $85 million, that's just the growth in the value of their franchises, add the 25 million in profit that they all average, and you can see that they would have enormous sums of money. outspend us 10 or 20 or 50 to 1. And that's why it's so important for us to put every penny aside that we can. Q. Do you know whether or not pensions for retired players, Probably would be able to

including class members, could or could not be the subject of this next bargaining fight? MR. KATZ: Object, Your Honor. Now he's really --

BERTHELSEN - CROSS / KESSLER

2864 It's too far

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 afield.

THE COURT:

Sustained.

Sustained.

MR. KESSLER: BY MR. KESSLER: Q.

Okay.

Mr. Berthelsen, these unrestricted net assets, if you take

a look at what it was generated from, it's above it on the page, the revenue. A. Q. Which page number? This is the same page. 393, page 4, that you've been

discussing. A. Q. Yes. If you look at the revenue that went into this, it says,

"Licensing Revenue" and "Premium Player Appearance Revenue." Was that active player licensing revenue or retired player licensing revenue; do you know? A. For the most part, active player. Although, there are

funds that are paid to us, which we turn over 100 percent to the active [sic] players. terms of some of that. Q. So there could be a pass-through in

I'm just not totally sure. What happens to the retired

Let me just break it down.

player licensing money? A. Q. A. It's received and sent to the retired players. Okay. So it's just a pass-through. MR. KATZ: Your Honor, object. We're definitely

BERTHELSEN - CROSS / KESSLER

2865

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

getting, now, into a subject that we talked about at the break. THE COURT: The retired money -- the jury has heard What we should be focusing on is the

about that ad infinitum.

financial condition of the defendant. I think the jury has heard everything else that is relevant to their determination. MR. KESSLER: THE COURT: BY MR. KESSLER: Q. Given the current labor situation, okay, can the union So --

Very good, Your Honor.

-- please stick to the program.

afford a significant damages, punitive damages, award in this case? A. No, not at all. The union cannot. Thank you. I have no further

MR. KESSLER:

questions, Mr. Berthelsen. THE COURT: MR. KATZ: Thank you. Anything more? May I consult with

I have a couple.

Mr. Parcher for a moment? THE COURT: MR. KATZ: Sure. May it please the court. REDIRECT EXAMINATION BY MR. KATZ: Q. I take it that you're not aware of the exact figure that

your stock holdings have declined? A. As I sit here today, no, because I don't know how the

BERTHELSEN - REDIRECT / KATZ

2866

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

market did today. to monitor -Q. A. Q. Okay.

And it's not something that I have been able

-- being away from my office as I've been. And you're talking about a strike that might possibly

occur, or not, three years from now; isn't that right, sir? A. No one has said strike. Every indication is, is that the owners, given what they have said, given who's representing them, given what they've been doing, it's a lockout. That's a lot different.

It's when the employer says, "You can't come to work and we're not going to pay you." And that's what is expected.

I would consider a strike to be extremely unlikely. The players are not about to withhold their services. What's likely is the owners are going to keep them from being able to work. happen, unfortunately. Q. Your current contract extends through 2011; isn't that And the labor laws allow that to

right, sir? A. Q. A. Q. A. Q. No. It extends through 2010.

2010. Through the 2010 season, yes. So two more seasons? Yes. Do you have any reason to believe you will not be

BERTHELSEN - REDIRECT / KATZ

2867

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

generating at least 81 or $82 million of licensing revenues during each of those two years? A. Q. A. Yes. You don't believe you will? Frankly, the way the economy has turned in the last few

months, there's a concern by everyone in terms of revenues, because we are talking about discretionary spending of the American public. And there's concerns about its impact on Whatever

professional sports, just like any other industry.

impacts professional sports, certainly impacts our union. Q. Well, have you actually spoken to any of your professional

advisors that told you the number will go down from $81 million? A. Q. A. Q. A. Well, you would not talk to our professional advisors -It calls for a yes or no. It calls for a yes or no, sir.

I have not -- your question mentions two things -It calls for a yes or no. -- so I cannot say yes or no. THE COURT: I would like to explain.

Well, if he says he can't answer yes or

no -- why can't you answer yes or no? THE WITNESS: Because it would not be those people Our professional

from whom we would get that information. advisors are not sports economists. BY MR. KATZ: Q.

My question is, simply, have you spoken to any of your

BERTHELSEN - REDIRECT / KATZ

2868

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

professional advisors about the likelihood, or not, that your licensing revenues of $81 million a year are likely to go down? A. We don't have professional advisors who give that type of That type of information we get from other places.

advice. Q. A. Q.

You have accountants; is that right? We have accountants, yes. Have any of them told you that your revenues might go down

from the $81 million level? A. No, but they would not be the people who would tell us

that. Q. A. Q. A. And you have attorneys that help you; is that right? Yes, indeed. And what advisors are you referring to, sir? Uhm, people that I talk to who are familiar with league

economics and the efforts by teams to sell tickets at new stadiums and to sell sponsorships and to -- to expand their product in other markets like Europe. Q. A. Q. So not people that you're paying for advice? Not really. Okay. And you're aware, sir, are you not -- you've

reviewed the EA contract, for example; is that right? A. Q. I'm familiar with the contract. Right. And that is -- provides a minimum of $25 million a

year; does it not, sir? A. I believe so.

BERTHELSEN - REDIRECT / KATZ

2869

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

Q. A.

That goes out to like 2019 or something? I don't think that -- I don't think it's that long of a

term. Q. A. 2013? It goes out at least five years; isn't that right? I can't recall. I wanted to say 2,012,

It's in evidence.

but I could be wrong. Q. And that $25 million a year is guaranteed, isn't that

right, regardless of economic conditions? A. Q. Yes, it is. Now, you talked, sir, and testified in response to

questions from Mr. Kessler, about your concerns of preserving monies for the active players. A. Not only the active players. It's -- every time we go to

the bargaining table we're there for -- we've improved a lot of things, a lot of benefits in the past. And that includes

inactive, retired players as well and our ability to fight for them. Q. Well, in fact, you were here when Mr. Armstrong testified,

weren't you? A. Q. I was not, except for his second day. In his second day of testimony do you recall that he

testified about the Congressional hearings that have been held about your treatment of retired players? MR. KESSLER: not relevant subject. Your Honor, I object to this. This is

BERTHELSEN - REDIRECT / KATZ

2870

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 jury.

MR. KATZ: Your Honor.

It's responsive to what he asked about,

MR. KESSLER: THE COURT: have on this? MR. KATZ: THE COURT:

I don't believe it is, Your Honor.

Well, the -- how many questions do you

One or two. In light of the fact that the witness

himself brought up collective bargaining for retireds and pensions, Mr. Katz has got a point. So you can -- subject to Rule 403, you may ask your next couple of questions on this subject. MR. KATZ: BY MR. KATZ: Q. And you were here when Mr. Armstrong testified that Thank you, Your Honor.

Congressional hearings had been held into the subject of the union's treatment of retired players; isn't that right? A. If that occurred in the second day that he testified. I

wasn't here for the Monday session. Q. And you were here when he testified in his second day that

a lot of criticism has been levied at the union about its treatment of retired players; you're aware of that, sir? A. Totally unjustified criticism, yes. MR. KATZ: THE COURT: Thank you. I need to say one thing, though, for the

It's not Mr. Katz's fault and it's really not even the

BERTHELSEN - REDIRECT / KATZ

2871

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

witness's fault. I told you that we're not here to award punitive damages against the union for broader issues. We're here on

account of the GLA, the RPGLA, and the issues that relate directly to that. Collective bargaining is not part of what you're here to decide. And I would not want you to in any way factor that

into your decision on the amount of damages. I think we should go to something new. MR. KATZ: THE COURT: I have no further questions. Anything more? Just a couple more, Your Honor. RECROSS EXAMINATION BY MR. KESSLER: Q. Mr. Berthelsen, if you look back to that page 393, which

MR. KESSLER:

was page 4, the financial statements, Mr. Katz asked you about that there was a $25 million a year guaranteed payment from EA, in licensing. Do you recall that? A. Q. Yes. Will you read to the jury what were the total expenses of

the union, if you look at total expense line in the year ending February of 2008. MR. KATZ: THE COURT: Object. Beyond the scope.

Why isn't this beyond the scope?

BERTHELSEN - RECROSS / KESSLER

2872

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

MR. KESSLER:

This goes directly to why the

25 million is not adequate, at all, to pay for the expenses, Your Honor. THE COURT: All right. Overruled. Please go ahead.

THE WITNESS: BY MR. KESSLER: Q. Okay.

It's $125,225,147.

So you would have to have a lot more than an EA

agreement to meet your union expenses, before you got to any assets; isn't that correct? A. Q. Most definitely. And, Mr. Berthelsen, you got asked a question by Mr. Katz,

just now, about Congressional hearings and desires to improve retired player pension benefits. If there were going to be any improvements, could you do that unilaterally or does it have to be in collective bargaining? A. Q. The latter. It has to be in collective bargaining.

And if you had an award which significantly reduced your

assets for collective bargaining, would that have any impact on your ability to do anything for the retired players in the next bargaining? MR. KATZ: THE COURT: Object, Your Honor. Sustained. This is too far afield.

MR. KESSLER: MR. KATZ:

Your Honor, I have nothing further.

I have just one further question, Your

BERTHELSEN - RECROSS / KESSLER

2873

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

Honor. THE COURT: MR. KATZ: moment? THE COURT: MR. KATZ: Can't we bring this to an end? I just have one more question. Please, Mr. Katz. May I consult with Mr. Parcher for a

FURTHER REDIRECT EXAMINATION BY MR. KATZ: Q. Are you telling the jury, Mr. Berthelsen, that the union

is having trouble getting by on $81 million of licensing revenue a year? A. Q. A. Q. We need all the help -That calls for a yes or no. We need all the help -Calls for a yes or no. (Counsel and the witness speaking simultaneously; not reportable.) A. -- we can in order to prepare for the lockout. MR. KATZ: THE COURT: Your Honor. Can you answer that yes or no? Would you repeat the question, please.

THE WITNESS: BY MR. KATZ: Q.

Are you telling the jury that the union is having troubles

getting by on $81 million of licensing revenue a year? A. Not at the moment.

2874 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 MR. KATZ: THE COURT: Mr. Berthelsen. Thank you. All right. You can step down,

Thank you. Do you have any other witness? Yes. Mr. Philip Rowley.

All right. MR. KATZ: THE COURT: MR. KATZ:

Is he here? He is. Your Honor, we have an objection to

MR. KESSLER: this witness.

This witness did not cover in his expert reports, either the first or the supplemental, anything on the subject of the union's net worth. In fact, Your Honor, it first came up at his deposition when plaintiffs tried to get him to put in this information. And I asked him -Is it in the report? It is not in the report, Your Honor. All right. Well, then it's not proper

THE COURT: MR. KATZ: THE COURT:

for him to start testifying about something that's not in the report. MR. KATZ: THE COURT: All right. All right. We will not call him. Thank you.

Do you have any other witnesses? MR. KATZ: THE COURT: No, Your Honor. All right. The plaintiff rests.

Any witnesses by the defense?

2875 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 MR. KESSLER: No, Your Honor, just Mr. Berthelsen.

We have already done that. THE COURT: Have a seat for a second.

We've reached another milestone and you've now heard all the evidence you're going to hear on the additional information. But I need to make something clear to you. You've

heard an entire trial, and most of that has something that could bear on the issue of the amount of punitive damages. So this very short proceeding was -- was directed mainly at financial condition, current financial condition, which you have not heard about. And that's just normal in the way these kinds of trials are run, is that you -- if you decide there's going to be punitive damages, then you -- we have a two part thing, where the second part of the trial is related to the financial condition. But everything else that you need for your decision Okay.

has already been presented to you in the main event. Now, what I'm going to do is read to you an

instruction that is related to the amount, and some guidelines for the amount of punitive damages. I won't be able to get this reduced to written form, I don't think, so this will be the time you hear it. the old-fashioned way. This is

They used to do it until about 1988.

Pick a number at random.

2876 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 In the old days, we didn't have word processing and all that, so the jury just heard it. writing. writing. But on this one I will not be able to give you this in writing, so I will try to say it twice to you. short. Now that you have found that the plaintiff class is entitled to an award of punitive damages, then you must decide the amount of the award. To determine the amount of the award, you may consider the net worth and relative wealth of the defendant at the time of trial; the nature of the wrong committed, the state of mind of the defendant when the wrong was committed; the burden and duration of the litigation. Your award should be sufficient to punish the defendant for his or her conduct and to serve as an example to prevent others from acting in a similar way. Okay. That's the end of it. It's very And you never got it in

But these days we can give you most things in

Now, I'm going to read it again in case you missed something the first time. Now that you have found that the plaintiff class is entitled to an award of punitive damages, you must now decide the amount of the award. To determine the amount of the award you may consider

2877 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 the net worth and relative wealth of the defendant at the time of trial; the nature of the wrong committed; the state of mind of the defendant when the wrong was committed; and the burden and duration of the litigation. Your award should be sufficient to punish the defendant for his or her conduct and to serve as an example to prevent others from acting in a similar way. Now, does anyone want me to go over that a third time or do you think you have it in mind? (No response.) THE COURT: All right. Okay. You've got it in mind. I have a special

So you know the drill.

verdict form to be sent into the jury room in a few moments, that has a blank for you to fill in. And that's the only

remaining question for you to consider. And, again, I want to make it clear that the evidence presented in the entire trial is fair game for you to consider, pro and con, on the subject. However, before we get there -- I have now told you what the factors are -- we have to have an argument by each side as to what the dollar amount should be. be very short. Mr. Katz, you get to go first. MR. KATZ: Thank you, Your Honor. I'm going This is going to

May I just set up that easel for a moment?

CLOSING ARGUMENT / KATZ 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 Katz. MR. KATZ: to draw. THE COURT: Yes, go ahead. CLOSING ARGUMENT May it please the Court.

2878

Good afternoon,

ladies and gentlemen of the jury. Again, to refresh your recollection, my name is Ron And I want to add my thanks for your diligence, for your

service. The judge has told you that you are sitting here during some very historic times. executive branch. We've had changes in our

We've had changes in our legislative branch.

And, of course, you've been participating in the judicial branch. I think it's important to note that there's one thing that those three branches have in common. same boss. That boss is us. All of us. They all have the We the people of the

United States are the bosses of the executive branch, the judicial branch, and the legislative branch. That's the way our system works, so that we have nobody to complain to but ourselves if we live in a society where people do not act in an appropriate manner, where people act, as you'll see from the instructions, with actual malice, willful disregard for the rights of plaintiffs, where the conduct was outrageous, grossly fraudulent, et cetera, et cetera.

CLOSING ARGUMENT / KATZ 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 It's up to you. And why do we do this?

2879 Why have you

been sitting here this time?

Essentially, we do it for each

other because it may be that some day you'll have a problem with your union or with your employer or with another person. And what will you want? You want to come to a fair place where

a jury of your peers can make a decision about how people should conduct themselves. And this is a very important decision that you will be making now because you will be deciding whether to set an example for whether this is the way a union should act toward its members or not. That's up to you.

Because unless it costs them money -- this is not a criminal proceeding -- they will not pay attention. And that's

why we're allowed to put on the net worth evidence of the defendant because, obviously, if someone is extremely wealthy, if they have, as the plaintiff does, $221 million of net worth, you can't set an example by fining them a thousand dollars. They could pay that out of petty cash. that they will feel. It has to be something

It has to be something that will cause

them to change the conduct that you have already adjudged to be worthy of punitive damages. So that's what we're about to do right now. I don't

intend to take a lot of your time, but I think I can show that this conduct was outrageous and willful and was a result of actual malice.

CLOSING ARGUMENT / KATZ 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

2880

Just to go over some of the -- I wouldn't call them highlights, I would call them lowlights -- but the eligibility criteria, the fact that these men were supposed to share with the eligible NFLPA members who could only have been active players; the fact that that was -- that they were defined out of existence in an agreement between the NFLPA and PI that was negotiated behind the back of these men, they had nothing -Mr. Adderley had nothing, no knowledge of this agreement whatsoever; the Hall of Fame agreement, where their rights were sold for below market; the scrambling; and, most of all, I think, the demeaning. You know, of course, we're going to have disagreements in our society. families, within our friends. We have disagreements within our That's not a problem.

The problem is we must learn how to disagree with one another in a civil manner. opinion. Here's my view. I respectfully disagree with your Here's your view. Sometimes the Sometimes

We just had a presidential election.

presidential candidates were civil to one another. they're not so civil to one another.

But that is the goal.

And referring to someone as worthless, referring to someone as dog food, is not a way of disagreeing with someone. It's a way of demeaning people. And in this case they're I think it's a very serious

demeaning their own union members. matter.

CLOSING ARGUMENT / KATZ 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

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So what I would like to do, because of the time limits that we have, is just take one example and show you how this conduct -- I'm not going to use the words from the -- from the instruction. I'm going to use more colloquial words. This

conduct was rotten to the core. Let me demonstrate that to you. We start out at the You are

middle and the core is, basically, demeaning people. worthless -MR. KESSLER:

Your Honor, doesn't this exceed -- I

object -- what Your Honor said was the purpose of this particular argument now? THE COURT: financial condition. No. The evidence was limited to

But in determining the amount, Counsel is

entitled to argue broader than just the financial condition, and to get into those types of factors such that I gave in the original instructions, evil motives, actual malice, et cetera, and conduct that was outrageous, grossly fraudulent or reckless toward the safety, that can be argued, as well as the state of mind of the defendant and the nature of the wrong that was committed. So this is -- this is okay to get into in the argument part. Go ahead, Mr. Katz. MR. KATZ: Thank you, Your Honor. You are

So we start out with the demeaning.

CLOSING ARGUMENT / KATZ 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 worthless. You are dog food.

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Then the next level is that we see that that is simply not true. Again, this is all about scrambling. There

are other examples I could give, but I'm just going to use the scrambling. We see evidence that that's simply not true. we know that it's not true? EA. How do

Because EA -- there is demand from There are -- they are teams

There's 143 vintage teams.

that are people's favorites.

They want to play those games. They want to be

They want to be Joe Montana on the '89 49ers. Herb Adderley on the '66 Packers. So you can see with your own eyes. tell you that my clients are worthwhile.

I don't have to

EA is saying that

they're worthwhile because they have 143 games in this multi-million, hundreds of million dollars games. There are

actually many more vintage teams than there are current teams. So that's the second level. is the misconduct. And then the third level

What do you do if you are the defendants

and you have this belief, for whatever reason, that they're worthless and dog food, but now the real world is telling you something else, there is demand? So what do they do? wrote a letter to EA and said: people. They scrambled. Scramble. LaShun Lawson

We can't pay these

We can't have these people out there. And, of course, scrambling doesn't really do any good

CLOSING ARGUMENT / KATZ 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

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because if you want to be the '66 Greenbay Packers, it can only be Herb Adderley there. can only be Joe Montana. This distinction that Dr. Noll made that it's the teams and not the players, teams are made up of players. Okay. the scramble. So we've got the wrongdoing now. We've got Final If you want to be the '89 49ers, it

And then they've got a final problem.

problem is that they have to meet we the people. meet you in a court of law. And what did they do when they met you? basically insulted your intelligence. intelligence with their excuse.

They have to

They

They insulted your

And their excuse was -- Mr. Kessler said this just last Friday, and he said it many times -- We did this, we did the scrambling to protect their rights. times. Now, why does this insult your intelligence? your intelligence because it goes right to the core. will show you it's rotten to the core. Let's go back to the core. They're dog food. Why do you need to protect the rights of people who are worthless? There's no -- there's nothing to protect. They've had this program for 16 So what are they What They're worthless. Insults You heard it so many

I said I

are they saving them for? years.

They've never paid a penny.

CLOSING ARGUMENT / KATZ 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 minutes. in mind. on trial.

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protecting them for, another 16 years of not being paid a penny? It's just an untruth. protecting their rights. It's not true that they're

They are protecting their own right And they're having trouble.

to a stream of $81 million a year. They're scrimping by.

You heard Mr. Berthelsen tell you.

So that, I think, is an example of what's happened here, a graphic example that you've seen with your own eyes. There's a lot of distractions, ad hoc agreements, this, that, and the other thing. didn't complain. They trusted their union. do, really? I mean, what did these men Accusations that these men

They signed an agreement; they trusted their And, yet, they were put on

union; and they didn't get paid. trial, all of them.

Mr. Laird, Mr. Beach, Mr. McNeil, they were all put Why? How dare you, you didn't complain.

These men did nothing except to trust their union. And a union is something you should be able to trust. And that's what you have to tell this union. You

better be trustworthy the next time because it's going to cost you some money. THE COURT: Mr. Katz, you've used about 11 of your 15

If you want to save anything for rebuttal, keep that

CLOSING ARGUMENT / KATZ 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 MR. KESSLER: Honor. THE COURT: All right. Mr. Kessler. use it. MR. KESSLER: the -MR. KATZ: THE COURT: Sorry. do that. MR. KATZ: Thank you, Your Honor.

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How much money? $219,655,553. about.

The wealth of the defendants is

You can see that on the page that I talked

And what we believe is an appropriate number here, that will cause the plaintiffs -- the defendants to think about what they've done and hopefully to change their behavior, is 10 percent of their net worth. we think, is appropriate. My clients don't want to break the union. want to hurt the active players. message. They don't So approximately $211 million,

But they want to send a

And they need you to send that message. Unions have to be trustworthy. And this is how you

This is how we the people does that. Thank you. THE COURT: Thank you, Mr. Katz. Could you move

Move the easel, unless you're going to

I'm not going to use the easel, Your

CLOSING ARGUMENT Good afternoon, ladies and gentlemen of

CLOSING ARGUMENT / KESSLER 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 union. the jury.

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Obviously, you know that I had a different view of this case. But at this point in the proceedings I have to

respect the fact that you've come to a different conclusion with respect to liability. And so I accept that. A