Parrish et al v. National Football League Players Incorporated

Filing 743

Transcript of Proceedings held on 11/19/2009, before Judge William H. Alsup. Court Reporter/Transcriber Lydia Zinn, Telephone number [phone]. 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 3/10/2011. (Zinn, Lydia) (Filed on 12/10/2010)

Parrish et al v. National Football League Players Incorporated

Doc. 743

Pages 1 - 20 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA BEFORE THE HONORABLE WILLIAM H. ALSUP ) ) ) ) Plaintiffs, ) ) vs. ) ) NATIONAL FOOTBALL LEAGUE PLAYERS ) ASSOCIATION, a Virginia ) corporation, and NATIONAL FOOTBALL ) LEAGUE PLAYERS INCORPORATED d/b/a/ ) PLAYERS INC., a Virginia ) corporation, ) ) Defendants. ) ) ___________________________________) APPEARANCES: For Plaintiff: HERBERT ANTHONY ADDERLEY, on behalf of himself and all others similarly situated,

NO. C 07-00943 WHA

San Francisco, California Thursday November 19, 2009 2:40 p.m.

TRANSCRIPT OF PROCEEDINGS Manatt, Phelps & Phillips 1001 Page Mill Road, Building 2 Palo Alto, California 94304 [phone] [phone] (fax) RONALD STANLEY KATZ RYAN S. HILBERT McKool Smith Suite 1500, 300 Crescent Court Dallas, TX 75201 [phone] [phone] (fax) LEWIS T. LECLAIR

BY: For Plaintiff:

BY:

(Appearances continued on next page) Reported By: Lydia Zinn, CSR #9223, RPR Official Reporter - U.S. District Court

Dockets.Justia.com

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APPEARANCES (CONT'D) For Defendant: Latham & Watkins 633 West Fifth Street,Suite 4000 Los Angeles, California 90071 [phone] [phone] (fax) CHARLES H. SAMEL

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Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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THE CLERK:

Calling Civil Action C. 07-0943,

Herbert Adderley versus National Football League Players Association. Counsel. Good morning, your Honor. Good to see you

MR. KATZ:

Ron Katz, for the plaintiffs.

With me is co-counsel

Lew LeClair, and my colleague, Ryan Hilbert. Mr. Adderley and Mr. Parcher send their regrets, your Honor. For medical reasons, they are unable to attend. Very well. Thank you.

THE COURT: MR. SAMEL:

Good afternoon, your Honor.

Charles Samel, for defendants. THE COURT: All right. Welcome back. We're here on And are there

a final hearing on a proposed class settlement.

any class members here, or anyone else who wants to speak on this? All right. All right. I don't see anyone. Who is raising their

Let's hear from Mr. Katz. Thank you, your Honor. May it please the

MR. KATZ:

Your Honor has been a stern taskmaster on the

settlement approval, and therefore, I think it's been very heavily papered. purposes. And I hope that it's adequate for your

I know that your Honor does not like for me to go

over things that we've already put in the papers. THE COURT: Listen. Let me just ask something; like

let's go over the plan of distribution. Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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MR. KATZ: THE COURT: MR. KATZ:

Sure. What is that? Well, the plan of distribution --

your Honor will recall from the trial that basically our damages theory was an equal-share theory that mimicked what was done for the active players. of distribution is. We look at how much -- what percentage of the fund was distributed in each of the years, what players had signed up for each of those years, and then we figure out their share for those years, so that if someone only signed up for one year, they would receive less than someone that had signed up for two years or three years. So it will exactly mimic what And that's exactly what the plan

would have happened, but for the misconduct. THE COURT: Now, there was one objection that said

somebody was so insignificant, they never even got on the football field, and yet they are still able to participate to the same extent as somebody who was out there, playing in every game. So what's your response to that objection? MR. KATZ: Well, first of all, your Honor, as you

know, there was a class action, so one of the issues was, you know, that -- that there had to become issues of fact and law. Those had to predominate. The equal-share theory was a very So,

important factor in getting over those legal hurdles.

although some players are better than others -- some may have Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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played a down, some may have played a thousand downs -- it's an equal-share theory; just as for the active players, whether you're a journeyman or whether you're a star or whether you play a down or you don't play a down or you're on the taxi squad, you get an equal share. That was extremely significant

for getting this certified as a class action. We did file something on this issue yesterday, your Honor. And we have had an additional thought on it which

I think may ease your Honor's concern, if you have one. THE COURT: MR. KATZ: What was that that you filed? The additional thought is that you'll One

recall there were two brothers that filed yesterday. was -- the Khayat brothers.

Mr. Eddie Khayat listed five He acknowledged --

people that he said never played a down.

seemed to acknowledge that four of those had signed contracts. He said there was one who claimed he played, but he doesn't know of anyone who knew of this person. We think that a way of satisfying this concern is we have to send out a form to the class members. We have to send

out a form to get their tax-identification numbers when they are paid. And when we send out that form, we can ask them to

check a box that says that they played in the N.F.L., they signed a contract, or they meet the criteria of the class, or we could even have them sign that they declare that under penalty of perjury. Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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And that would keep out -- if there is this one person out there, he was unnamed, his team was unnamed, so we can't really do any further research on it. would settle that problem. Another benefit of the plan of distribution is that there will be no moneys that don't go to class members, because this is going to be paid in two tranches. If, for example, we We think that that

get something back from the first tranche that says, "Address is no longer good" or the person, you know, can't be found, or whatever, that just goes into the pot for the second distribution, which, of course, is going to be going to people who received the first distribution. So I think that that

really eliminates the concern, your Honor, if there was one. I mean, I do think we have -- we were diligent in our discovery. There's no reason to question the integrity of And -- but I do think that

defendants' discovery requests.

this is an extra step that we can take, so that your Honor can ease that concern. THE COURT: So what was -- this form they would say

under penalty -- it would have the class definition? MR. KATZ: THE COURT: Right. And then they would say, under penalty of

perjury, they are, indeed -- they would specify that they -well, how will they get a -- I may not have the record. One of

the problems is I don't want to put too big of a record-keeping Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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burden on the class members. MR. KATZ: THE COURT: they had a GLA for? MR. KATZ: GLAs. We know that, your Honor. We have their Right. So how are they going to know what years

We have everybody's GLAs.

There are -- there have been

two categories of -- some people say, "I know I signed a GLA, but I don't have it." Unless they can produce one, it's not in I think those people are just out of

the defendants' records. luck.

With respect to those who Mr. Khayat -And, as I say, it comes down to one questionable case, who say, "Well, he shouldn't be in there. really" -- really, there are two criteria. He wasn't

You have to be a

retired player, and you have to have signed a GLA. When we send out this form to them, what we say: You

are going to be getting such-and-such, because you signed a GLA for this year, this year, and this year. And check off this

box that you are a retired player who signed a GLA, et cetera. We can cross-check that, because some of them may say, "Well, you say I signed it for '04 and '05. '06." I actually signed it for

We can check on that; but I don't think that it would

put a heavy -- the only burden that would be on them is, like I say, if they were a retired player. And it's -- this is a

little shadowy, sometimes, at the edges with the taxi squads; Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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some of the older teams. originally meat packers.

You know, the Green Bay packers were I don't know who showed up on Sunday

for the games, et cetera; but this would be a very, very small number of cases; but all they would have to say is, "I was a retired player, and I signed a GLA." THE COURT: How do you deal with those six or so And would you send them a

where they weren't in your records?

form, too, to let them try to prove that they were -- did sign a GLA? MR. KATZ: I don't know how we would draw that line,

your Honor, because there's probably over 10,000 retired players who did not sign GLAs. Again, how the program was run,

et cetera -- you know, that's not something that I was responsible for. about. And it was not something that the case was This

I mean, your Honor was very, very clear with us.

case is about three things. could salvage those. THE COURT:

GLA -- and I don't know how we

Were they expressly invited to provide us

with a copy of their GLA? MR. KATZ: calls every day. Yes. Everyone who has called. We receive

Everyone who calls with that complaint, we

say, "Please provide us with a signed copy of the GLA, or if you would like to contact the NFLPA, here's the name of Mr. Berthelsen. Contact him to see if their records are

correct," but basically, the defendants have done a painstaking Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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search of this.

We have every reason to believe that their

painstaking search was accurate. Obviously, nothing's perfect. If somebody can

demonstrate that there was an imperfection, of course, we would deal with that. And your Honor does have continuing jurisdiction over this. And so, you know, with respect to problems that may or

may not arise because of the plan of distribution -- and I think there would be few, quite frankly -- we can come to the Court and get a resolution of those. THE COURT: So this form would -- would indicate what

your records say as to how many years they had a GLA, and then they would sign at the bottom, verifying under penalty of perjury that the information is correct, or if it needs to be corrected, they would indicate how it has to be corrected? MR. KATZ: Right.

The one thing that we need from them, you know, just going back to Mr. Kayak's (phonetic) letter, is to certify that they were a retired player, because the definition of "class" is you have to be a retired player to sign a GLA. So we think

that everyone is, but this would smoke out anyone who is not. THE COURT: If everything went well, when would the

last payments be made? MR. KATZ: MR. SAMEL: I think it's June 5th, 2010. Well, that's --

Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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(Discussion off the record) MR. KATZ: the escrow. Oh, yeah. That would be the payment to

And then, of course, it would just be an

administrative matter for getting the money out from that time. There won't be any hesitation to get it out, but it probably would take a week or two. THE COURT: All right. Well, I don't have any other

questions on that part. I do have a question or two on your -- some of the other things. You know, on the expenses here, Mr. LeClair is

spending $1,899 for air travel alone to attend a deposition in New York. MR. KATZ: your Honor. I believe that was a coach fare, I know your Honor

It's a refundable coach fare.

doesn't probably travel as much as you did when you were in private practice. Basically what the airlines do now is they

have a system for sensing out if you're a business person and you must do that travel. So if you're making your reservation

within a day or two and it's nonrefundable, they really sock it to you. Many of the nonrefundable-coach fares are more They've become very,

expensive than the first-class fares. very sophisticated. THE COURT:

Why should the class be penalized for

You should think ahead, and get the cheaper fare a few

weeks ahead of time, instead of waiting until the last minute, Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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Mr. LeClair.

You know how bad this looks?

I mean, here are And here you

these football players, struggling.

Struggling.

are, raking off $1,900 for one airplane trip. MR. LECLAIR: Your Honor, I just wanted to point out

that American Airlines so dominates Dallas-Fort Worth, and they so dominate the route between New York and Dallas, that the fares are utterly ridiculous. THE COURT: Maybe you should drive next time. Get on a train or something.

John Madden won't get on a plane. MR. LECLAIR:

Your Honor, if your Honor is at all It's not -- that's not

troubled by that, write it off. important to me.

I do -- I do believe, as I explained, that this is a problem created by American Airlines; not by us. And if you

reserve in advance and get a nonrefundable fare, and the depo moves, you end up paying twice as much as when you rebook it. THE COURT: hotel. MR. KATZ: THE COURT: MR. KATZ: THE COURT: September '08. MR. KATZ: Oh. I think that's when I met Yes. Mr. Adderley. Yeah, that That was -$729? I'm trying to think. Well, I'll give you the date. Mid Well, here's Mr. Katz. $729-a-night

Mr. Adderley in Philadelphia.

Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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was too high, but I think we did make an adjustment.

I think

we did make an adjustment for -- didn't we dial down on that? If -- I may have. your Honor. We have our legal assistant here,

I think we dialed down all of the hotel bills. I couldn't tell. It was like throwing --

THE COURT: it was a mess.

It was a bunch of -- it was a bunch of things It was -- it's -- yes, you did say that

thrown together.

you -- you knocked off some, but I couldn't -- but yet here it is right here. So I don't know if this was one of the items

that they got written down or not, but -MR. KATZ: Well, I think, your Honor, if you look

at -- let me make two points, if I may. THE COURT: MR. KATZ: Well, okay. First of all, we -- we did make writeoffs

to compensate for things that would look this way to your Honor; but there's a second point which I think is even more important, your Honor, and that is -- let's say I spent $798 for a hotel room. $798. I was at risk for losing that entire

I believe I had a business reason for meeting We were lucky that

Mr. Adderley at The Ritz that night.

Mr. Adderley was able to join us last year; but the point is; I took that risk. I felt that it was a businesslike thing to do.

And the risk paid off -- okay? -- but I wasn't doing it for that hotel room. THE COURT: Listen. You could have gotten a room for

Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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a lot less than $729 a night. have taken less of a risk.

So you -- yes.

And you could

I mean, you're gambling with the

possible recovery by the class. Here's one. You told me that Mr. Parcher's airfare

was all written off, but I see "L.P. Parcher, $2,550 airfare, round trip from J.F.K. in New York to S.F.O., to attend trial." MR. KATZ: Legal Assistant, Donna Wishon.

Your Honor, I brought her here for exactly this type of question. May she address the Court? THE COURT: MS. WISHON: all the way off. THE COURT: that far. I'm not going to -- I can't even reach Come on up. Come on up.

We didn't write Mr. Parcher's airfare

I'm not going to do anything to you. MS. WISHON: MR. KATZ: The --

She's not used to appearing in federal

court, your Honor. THE COURT: MS. WISHON: off. Let's hear what you have to say. We didn't actually write it all the way

We reduced it to what it would have been if it was

refundable coach at that time. THE COURT: MS. WISHON: THE COURT: All right. And, if I may -I thought it was a total writeoff. I was

told it was a total writeoff; but that's -- I'll go back and Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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see how it was represented in your briefs. MS. WISHON: And, if I may, his hotel room you were

just talking about, I believe, was for both him and Mr. Adderley. It all came out -Oh, that's right. I paid Mr. Adderley's

MR. KATZ: hotel room. THE COURT: MR. KATZ:

Well, that's more reasonable. But also, your Honor, the -- you know, I

think one of the fundamental rules of the world is the Golden Rule, you know: yourself. Treat others as you would treat We weren't

And we didn't do anything unusual.

living high on the hog here. business in its normal way.

We were trying to conduct our

And I understand that we don't live in the same way that everybody else lives. We don't have the same sort of

business that everybody else has, but nothing unreasonable was done here, your Honor; nothing that we were not willing to pay ourselves, that we don't pay ourselves on a regular basis, and that we put ourselves at risk for here. So I think that that's a fair standard to use. mean, the Golden Rule. I

I can't cite it to you from the Federal

Reports, but you know, I know your Honor's familiar with it. THE COURT: All right. May I ask again? Are there

any class members here who wish to be heard? All right. I don't have a ruling for you here yet,

Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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but I'm going to -- I am going to approve the settlement. I'm going to, of course, give you some attorneys' fees and costs, but I may adjust it some. MR. KATZ: All right.

And

Your Honor, may I just consult with my

colleagues for one moment before you finish? THE COURT: MR. KATZ: well. Sure. Now, also we have -- you may have them as

We have the proposed order providing final approval of And we have the proposed final judgment. I don't

settlement.

know if you have those. THE COURT: Hand them up to me so I will -- I will

want to make sure that what I send out -MR. KATZ: THE COURT: How many copies would you like? Just one is enough, so that I can make

sure that I've covered all of the bases. MR. KATZ: Right now I also, your Honor, understand

that you have a -- an order site -- a proposed order website or something. We'll e-mail it to those; to that site.

Let me just consult for one second on the subject of Mr. Parcher's airfare. (Whereupon a document was tendered to the Court). THE COURT: Okay. Administrative claim. Yes, we have a couple

MR. LECLAIR: MR. KATZ:

Oh, that's right.

of other matters, too. Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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MR. LECLAIR:

The -- under the settlement agreement,

which I approved in the preliminary approval order, your Honor, we're entitled to pay the class-notice fees out of the administrative fund that exists; the escrow fund. I did know -- it's about $18,000 we got billed for, we wanted to pay out of the fund. I didn't know if your Honor

wanted to submit a separate motion and order on that, or whether the prior approval was sufficient. way your Honor wants us to do that. THE COURT: I approve it. Why don't you do a short written order? Submit a written We'll do it either

Now let's do it in writing.

order for that. MR. LECLAIR: MR. KATZ: Thank you, your Honor.

Your Honor, a couple of other points.

We do believe that we wrote off all of Mr. Parcher's airfares, but there may have been a stray receipt that got in there. THE COURT: Well, no, but you just said it was -- it

was not all -- it was written down, as to what coach would have been. That's what your legal assistant just told me. MR. KATZ: legal assistant. Right. And I've just consulted with the

Our best current belief, your Honor -We're not perfect.

there's a lot of paper to deal with here. We're the first ones to say that. THE COURT:

It's on your spreadsheet right here.

Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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Which one of these? MR. KATZ: THE COURT: MR. KATZ: THE COURT: MR. KATZ:

I'm sorry.

Now I misplaced it, but --

Well, let me say it this way, your Honor. Right here. Right. Manatt expense breakdown.

It's -2,550.

It's the fourth item down:

Your Honor, I'm -- I've never won an

argument with a federal judge, and I don't think I'm going to start now. Let me say this. Okay? If we didn't write it off, we

will write it off.

Is that fair enough? Probably what I will do is make a

THE COURT: horseback adjustment. MR. KATZ: THE COURT:

Fine.

A what? A horseback adjustment. That's something

that Mr. LeClair would know about. MR. KATZ: THE COURT: I have no idea. He would know what it is. And it's known

out here as a "haircut," but I don't think you need to submit more paperwork on the expenses. MR. KATZ: with your Honor. THE COURT: carefully. But I want you to know we looked at this Right, but we just want to be straight

And it was not easy for us to reconstruct what you

were trying to tell us, because there were things like this in there where, on the one hand, you said it was all written off; but here it is on your chart, so -Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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MR. KATZ:

One other point, your Honor.

And that is

the incentive fee for Mr. Adderley. which I think -THE COURT: MR. KATZ: THE COURT:

We have asked for $60,000,

You know how I feel about incentive fees. I don't, actually, but -I will tell you. Rule 23 got along very

well for many decades when you were a young man and I was a young man and we came up. Incentive fees didn't creep into the It's a gimmick. It's a

lexicon until the mid nineties.

gimmick to buy off the name plaintiff, because the deal is not good enough for the named plaintiff, so they give them a little extra on the side; but my view is incentive fees are almost always bad, because -- because if it's not good enough for the named plaintiff, it's not good enough for the rank and file in the class. I am inclined to give him all of his out-of-pocket expenses, because he was here for the trial and all that. think that would be -- that would be okay; but to try to compensate him extra like this was -- he was supposed to be doing this for the good of the order, not as a profit center. So that's the way I feel. MR. KATZ: THE COURT: MR. KATZ: THE COURT: Well, your Honor -I don't like incentive fees. Right. Yes. May I respond? I

Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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MR. KATZ:

Mr. Adderley worked over 550 hours on this

Mr. Adderley subjected himself to a lot of problems with The NFLPA. He put himself out He

a very powerful organization: there.

He came out here, thousands of miles from his home.

lived here for weeks.

He became -- I don't know why they chose And he He

the strategy of attacking Mr. Adderley, but they did. was abused at his deposition. went through hell.

I complained about that.

When he went up there on the witness stand, I'm telling you, he would rather face Jim Brown coming out of the back field on a screen pass, than go up there. his field; that's Mr. Kessler's field. he did it with grace. word. That was not

And he bore it all, and

And I think "incentive fee" is the wrong He didn't even He earned

He didn't do this because of that fee.

find out about that fee until very late in the game. that fee.

He earned that fee and he generated monies for this

class, for this group of needy people; the first monies that they're going to get. And believe me. Every call I get, every day -- and I It

get many of them now -- "Can we get this by Christmas?" would mean so much to them. phrase "incentive fees." This is -- this is a -THE COURT: Well, you shunt use that phrase.

So I agree with you about the

And this is not an incentive fee.

That

phrase is the thing that gets me going. Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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MR. KATZ:

Well, that was a mistake.

Mistakes were

Mistakes were made. THE COURT: MR. KATZ: Mistakes were made. And that was one of them; but Mr. Adderley I know

deserves this.

And he's not doing well, your Honor.

that sympathy doesn't enter into it, but when he came out here -- believe me -- that was a true act of courage. THE COURT: MR. KATZ: THE COURT: Where does he live now? He lives in Mantua, New Jersey. All right. I'll think about it. Okay.

Anything more? MR. KATZ: THE COURT:

Is that it?

I think that's it, your Honor. All right. Okay. I'll be back in five

minutes or so for the 3:00 o'clock calendar. MR. KATZ: your Honor. One other comment I just wanted to make,

I believe that this was the only class action that

went to trial last year. THE COURT: MR. KATZ: absolutely sure. In the whole country? In the country? I believe so. I'm not

And I personally felt it was a privilege to

be able to participate; that it does take a strong judicial hand to make it happen. much. THE COURT: We'll see you soon. It's very complex. So thank you very

(At 3:10 p.m. the proceedings were adjourned) Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

CERTIFICATE OF REPORTER I, LYDIA ZINN, Official Reporter for the United States Court, Northern District of California, hereby certify that the foregoing proceedings in C. 07-0943 WHA, Herbert Adderley v. National Football League Players Association, were reported by me, a certified shorthand reporter, and were thereafter transcribed under my direction into typewriting; that the foregoing is a full, complete and true record of said proceedings as bound by me at the time of filing. The validity of the reporter's certification of said transcript may be void upon disassembly and/or removal from the court file.

________________________________________ /s/ Lydia Zinn, CSR 9223, RPR Wednesday, July 28, 2010

Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]