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JAMSPORTS AND ENTERTAINMENT, LLC v. PARADAMA PRODUCTIONS

January 3, 2005.

JAMSPORTS AND ENTERTAINMENT, LLC, Plaintiff,
v.
PARADAMA PRODUCTIONS, INC., Defendant.



The opinion of the court was delivered by: MATTHEW KENNELLY, District Judge

MEMORANDUM OPINION AND ORDER

In this Memorandum Opinion, the Court rules on the parties' motions in limine and various other pretrial matters.

A. Clear Channel's motion to quash trial subpoena to Randall Mays

  Clear Channel has moved to quash a trial subpoena served by JamSports on Clear Channel's executive vice president and chief financial officer Randall Mays, who lives and works in Texas.*fn1 Rule 45(b)(2) provides where a trial subpoena may be served:
Subject to the provisions of clause (ii) of subparagraph (c)(3)(A) of this rule, a subpoena may be served at any place within the district of the court by which it is issued, or at any place without the district that is within 100 miles of the place of the . . . trial . . . or at any place within the state where a state statute or rule of court permits service of a subpoena issued by a state court of general jurisdiction sitting in the place of the . . . trial. . . .
Fed.R.Civ.P. 45(b)(2). Mays was not served within this district, the 100-mile "bulge," or the state of Illinois. JamSports opposes the motion to quash, relying on Rule 45(c)(3)(A), which is cross referenced in Rule 45(b)(2). Rule 45(c)(3)(A) provides that
 
[o]n timely motion, the court by which a subpoena was issued shall quash or modify the subpoena if it
. . .
(ii) requires a person who is not a party or an officer of a party to travel to a place more than 100 miles from the place where that person resides, is employed or regularly transacts business in person. . . .
Fed.R.Civ.P. 45(c)(3)(A)(ii). According to JamSports, the cross-referencing of this provision in Rule 45(b)(2) expands the geographic reach of a court's subpoena power with regard to a person who is "a party or an officer of a party." It relies on decisions by several courts that have so held. See, e.g., Ferrell v. IBP, Inc., No. C98-4047, 2000 WL 34032907 (N.D. Iowa Apr. 28, 2000); Archer Daniels Midland Co. v. Aon Risk Servs., Inc., 187 F.R.D. 578, 587 (D. Minn. 1999); Stone v. Morton Int'l, Inc., 170 F.R.D. 498, 500-01 (D. Utah. 1997).

  The Court disagrees. Nothing in the history of the adoption of Rule 45(c)(3)(A) suggests that it was intended to alter the longstanding geographic limitations on the reach of a district court's subpoena power. Nor does the text of the Rule support the reading proposed by JamSports or in the cases upon which it relies. Rule 45(c)(3)(A) does not confer authority for service of a subpoena; it confers authority to quash or modify a subpoena. It provides an exception to Rule 45(b)(2), not an addition to that Rule. See Johnson v. Land O'Lakes, Inc., 181 F.R.D. 388, 396-97 (N.D. Iowa 1998).

  Read in context, the cross-reference of Rule 45(c)(3)(A)(ii) in Rule 45(b)(2) is meant to reflect that even if service of a subpoena is otherwise proper under Rule 45(b)(2), the subpoena is to be quashed if it imposes a requirement identified in Rule 45(c)(3)(A)(ii). Specifically, even if a subpoena is served within the geographic boundaries of a district, outside the district but within 100 miles of the place of trial, or outside the state in which the district lies, it must be quashed if it requires a non-party witness to travel more than 100 miles from where he or she resides, employs, or regularly transacts business. To provide a concrete example, a witness who lives and works in Galena, Illinois can properly be served with a subpoena under Rule 45(b)(2) to appear at a trial in Chicago, because Galena is within the Northern District of Illinois. But if the witness is not a party or officer of a party, she is entitled under Rule 45(c)(3)(A)(ii) to have the subpoena quashed, because it would require her to travel more than 100 miles.

  For these reasons, the Court grants Clear Channel's motion to quash and for a protective order with respect to JamSports' trial subpoena addressed to Randall Mays.

  B. Treatment of "highly confidential" documents

  Early in discovery, upon Clear Channel's request and with the concurrence of JamSports and AMA Pro, the Court entered a protective order which, among other things, permitted parties to designate documents containing certain types of proprietary information as "highly confidential" and thereby limit access to outside counsel and retained experts. The records in question include business plans and projections, breakdowns of expenses and revenues, and an agreement with an entity called Dorna Off Road, S.L. Clear Channel argued, in support of the request for a protective order, that disclosing this information to its potential competitors (JamSports) and companies with whom it negotiates business deals (AMA Pro) would cause Clear Channel competitive harm. The Court has asked the parties to address how such documents should be treated at trial. Clear Channel has listed twenty or so documents designated as highly confidential that have been listed as exhibits by JamSports. Clear Channel requests that these documents not be admitted as trial exhibits or, if admitted, that they be placed under seal and not made part of the public record, and that the restrictions on dissemination remain intact, in other words, that there be no dissemination to party representatives other than outside counsel and experts. Clear Channel also requests entry of an order barring the parties and counsel from disseminating any highly confidential information that may be revealed during the trial. However, Clear Channel does not seek to exclude anyone from the courtroom during trial. See Clear Channel Reply Mem. Regarding Use of "Highly Confidential" Documents at 6. JamSports opposes any restrictions at trial and asks that its outside counsel now be permitted to disclose the contents of the highly confidential documents to the client. AMA Pro also seeks permission for its outside counsel to review the documents with the client.

  The public has a right of access to trials as well as to judicial records and documents, which prevails over any countervailing interests absent a showing of good cause for sealing the record in a particular case in whole or in part. See, e.g., Citizens First Nat'l Bank of Princeton v. Cincinnati Ins. Co., 178 F.3d 943, 945 (7th Cir. 1999); Smith v. United States District Court, 956 F.2d 647, 649-50 (7th Cir. 1992). Good cause may be established by showing that particular information amounts to a trade secret such that disclosure would put the holder at a competitive disadvantage if made public. See, e.g., In re Adobe Systems, Inc. Securities Litig., 141 F.R.D. 155, 158, 161 (N.D. Cal. 1992); see also, e.g., Baxter Int'l, Inc. v. Abbott Laboratories, 297 F.3d 544, 545 (7th Cir. 2002) (legitimate trade secret may be kept out of public record); Union Oil Co. of California v. Leavell, 220 F.3d 562, 567 (7th Cir. 2000) (same). In support of its request for ongoing restrictions at trial, Clear Channel has submitted the affidavit of its president, Charles Mancuso, that it submitted in support of its request for protective order in March 2003. As an initial matter, Mancuso's affidavit does not provide a basis for ongoing highly confidential treatment of the agreement with Dorna (JX 613 & 666). The highly confidential designation for this document is removed; it is to be treated as a "confidential" document under the protective order.

  Nearly all of the remaining documents at issue are budgeting and revenue records which break down projected and actual revenues and expenses by event and by item. Mancuso Aff. ¶¶ 4-8. Mancuso states that access to these documents is highly restricted within Clear Channel itself to a handful of executive and that the information they contain is highly proprietary and not publicly available. Id. ¶¶ 9-14, 16. He states that disclosure of these records to a potential competitor like JamSports would enable use of the information to undercut Clear Channel with companies with which it does business by disclosing, for example, what Clear Channel pays for various services. It would also permit a competitor to learn which venues and events are less profitable and thereby plan events around such locations and events. Disclosure of Clear Channel's financial data to AMA Pro, Mancuso states, would allow AMA Pro to have access to information that it could use to its advantage and Clear Channel's disadvantage in future negotiations between the two companies over sanctioning fees. Id. ¶¶ 17-23.

  The other documents are strategic plans, which Mancuso says likewise are highly restricted within Clear Channel. Disclosure of such documents, Mancuso contends, would give potential competitors insights that would allow undercutting or replication of the company's plans. Id. ¶ 26. JamSports contends that Mancuso's affidavit is stale and does not support ongoing restrictions. The Court finds the affidavit sufficient to establish the need for confidentiality of the current and relatively current information Mancuso describes as well as a significant possibility of a serious and clearly defined injury to Clear Channel if that information were disclosed. But JamSports has a point with regard to older information. The records designated as highly confidential include information as far back as 1997. It is difficult to see, and Mancuso's affidavit is insufficient to establish, how reduction to ordinary "confidential" status of older information — at a minimum, information for years predating the filing of the lawsuit in 2002 — would cause harm to Clear Channel. Without such a showing, the Court is not persuaded that information concerning those years can properly be designated highly confidential and kept out of the public record.

  With regard to information as to which a showing of good cause has been made, the Court believes that the appropriate mechanism for accommodating Clear Channel's interests, the public's right of access, and the needs of the other parties is as follows:
1) The Court will not enter a blanket order precluding any party from offering the identified highly confidential exhibits in evidence. However, the party offering any such exhibit will be required to explain the relevance and probative value of the particular document and why it needs the document admitted in evidence — as opposed to, for example, simply allowing an expert to rely on the document without having it admitting it in evidence. See Fed.R.Civ.P. 703 (allowing expert to rely on data not admitted at trial).
2) Any highly confidential document that is admitted in evidence will, of course, be available to the jury, and no one will be excluded from the courtroom during use or discussion of the document. However, any such document will be admitted under seal and will not become part of the public record. Counsel and any officer, director, employee, agent, or attorney of a party who is present in the courtroom are barred from disclosing the document or its contents.
3) The Court obviously understands that all else being equal, it is important for trial counsel to be able to discuss the evidence with client representatives. But neither JamSports nor AMA Pro has made any effort to provide the Court with any particularized explanation of why they need to be able to discuss with their clients the contents of the remaining highly confidential documents. Absent such an explanation, there is no basis to remove that particular restriction as to documents that retain the highly confidential designation.
C. Use of videotaped deposition testimony by JamSports

  Clear Channel objects to JamSports' use in its case in chief of the videotaped depositions of Richard Gray and P.J. Harvey, who are members of the board of directors of defendant AMA Pro. It says these witnesses are available to testify live and argues that JamSports should be required to call them in its case, using the depositions only where inconsistent with their live testimony.

  The Court rejects this argument. Under Federal Rule of Civil Procedure 32(a)(2), a party may use in evidence for any purpose the deposition of an officer, director, or managing agent of an opposing party. By virtue of this Rule, JamSports is not required to call the witnesses "live" in its case and use the depositions merely for impeachment purposes. On the other hand, Rule 32(a)(2) does not abrogate the Court's authority to regulate the mode and order of interrogating witnesses, see Fed.R. Evid. 611(a), or its authority to exclude evidence whose probative value is outweighed by, among other things, its needlessly cumulative nature, see Fed.R.Evid. 403. The Court can and will exercise this authority. If JamSports elects to proceed in its case by using deposition excerpts rather than by calling witnesses live, it will be required to provide, in advance of trial, a designation of the testimony to be offered, and an accurate statement of how long each videotaped presentation will take. The Court will carefully examine the designated testimony for cumulativeness. In addition, if JamSports presents the testimony of such a witness by deposition in its case in chief, and the witness is later called by the defense, JamSports cannot expect that it will be able to reprise its use of the same deposition excerpts a second time for "impeachment" purposes. All things considered, JamSports might be better advised to call the witnesses in its case in chief and use the deposition testimony as admissions and as otherwise appropriate during its examination.*fn2

  D. JamSports' renewed motion for sanctions and other relief

  The Court initially believed that all lingering issues from in JamSports' renewed motion for sanctions and other relief, which focused on Clear Channel's belated disclosure that it had received from Ticketmaster rebates from supercross event admission tickets sold through that entity, have now been resolved. JamSports' status memorandum, however, suggests this may not be the case. See Pl. Mem. Regarding Status of Case at 6-7. JamSports is directed to file, on or before January 6, 2005, a memorandum of no more than three pages identifying with specificity what information it claims has not yet been produced that was encompassed in this motion. Clear Channel is directed to respond to any such claims in a memorandum of no more than three pages, to be filed on or before January 11, 2005.

  E. JamSports' motion for protective order (third party subpoenas)

  Three entities related to JamSports — Jam Productions, East End Management, and Pacific Management Services — previously moved to quash subpoenas duces tecum served by Clear Channel seeking, among other things, financial information. The subpoenas were premised on the belief that JamSports had relied on the financial wherewithal of those entities to support its entry into the supercross market. But JamSports principal Jerry Mickelson "testified that, in fact, JamSports was not relying upon the financial wherewithal of Jam Productions, East End Management and Pacific Management Services to financially support the JamSports/AMA Supercross series program." Pl. Mem. Regarding Status of Case at 3. Both sides agree that the motion to quash may be terminated as moot.

  F. JamSports' motions in limine

  1 & 2. Evidence regarding approval by AMA Pro's parent

  JamSports sued AMA Pro for breach of contract, asserting two distinct theories of liability. First, JamSports claimed that their November 2001 letter of intent was a binding agreement entitling JamSports to promote AMA Pro's supercross series. The Court granted summary judgment in favor of AMA Pro on that claim, as the letter of intent contemplated a separate promotion agreement which was never concluded.

  Second, JamSports claimed that AMA Pro had breached various provisions of the letter of intent that the Court determined were binding. The letter of intent contained a provision that required AMA Pro to negotiate "exclusively and in good faith" with JamSports for a specified period, prohibited AMA Pro from entering into discussions with third parties, and required the parties to advise each other of offers received. The Court held that JamSports had established as a matter of law that AMA Pro had violated the requirement to advise JamSports of offers it had received from others, but left for jury determination what, if any, damages to award.

  The Court denied JamSports' motion for summary judgment on its claim for breach of the good faith provision. JamSports' primary contention was that AMA Pro's insistence that the final deal be approved by its parent entity, the AMA, constituted bad faith in that this was a new condition not contemplated in the letter of intent. The Court found there was a genuine issue regarding whether AMA Pro's actions amounted to bad faith. JamSports and Entertainment, LLC v. Paradama Productions, Inc., 336 F. Supp.2d 824, 848 (N.D. Ill. 2004). The Court ruled that AMA Pro was precluded by the parol evidence rule from arguing that this was understood by both sides at the time of the letter of intent but reserved for later determination whether AMA Pro could rely on evidence regarding earlier discussions and understandings to show its lack of bad faith. Id. at 848-49.

  JamSports has now moved in limine to exclude all evidence of understandings and discussions about approval by AMA and to bar argument that AMA approval was a condition of any final agreement. The Court agrees with JamSports that AMA Pro cannot contend that approval by AMA was a condition of a final agreement; the Court rejected that argument in the summary judgment ruling. Id. at 848. But the Court believes that evidence the parties had discussed the need for AMA Pro to obtain approval by its parent is relevant to show whether AMA Pro engaged in "deliberate misconduct." See Venture Assocs. Corp. v. Zenith Data Systems Corp., 96 F.3d 275, 279 (7th Cir. 1996).

  JamSports has also moved to bar, as irrelevant, evidence that AMA Pro sought approval by its parent. As just described, this evidence is relevant and admissible on the issue of whether AMA Pro's conduct amounted to bad faith.

  3. Evidence that facilities were not "essential"

  The Court denies JamSports' request to prevent Clear Channel's expert, Dennis Carlton, from testifying that the facilities from which Clear Channel allegedly excluded JamSports were not essential and could not have harmed competition, due to the existence of viable alternative venues. Though JamSports' antitrust claims premised on the "essential facilities" doctrine are no longer part of the case, ...


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