address three compelling issues why this jury verdict must be overturned the first reason is that the general verdict awards both compensatory and punitive damages based on the statutory unfair competition claim that was brought under business and professions code section seven thousand two hundred now the statute does not allow that and for that reason where you have an unallocated general verdict it must be overturned the second  theories your honor this was submitted to the jury based on unfair competition and on the way unfair competition was defined in the jury instructions it had us both it's precisely the problem when in fact we believe that the court need go no further on this there are many issues to be discussed but i think that's grounds right then and there for versal because you have this general verdict  d i can launch into that but it's just the start the two other things that i want to talk about to divide between myself and dunn is the second issue is that the trial court erroneous lee instruction the jury with respect to conduct its privileged up all the time and it is a very very important privilege to have so many california supreme court cases holding that the salutary or the important public policy it's almost like a first amendment policy is you watched parties and you want their lawyers to be able to defend against claims or bring claims that almost like you don't want them every time they're doing that's look behind their back and my going to be subject to of tort liability that has a real chilling effect and so what the legislature has done and what the california supreme court has determined interpret ing this privilege it has interpreted in a very broad manner you know you're not going to like our defenses and litigations a public forum and this is going to come out it's going to hurt everybody including you but that that's what i'm talking about what they call the during the trial was blackmail there was a little bit of perjury i mean that wasn't a focus it was just a little bit well allegations perjury by the way we absolutely do not see that the record supports that but then you also have allegations concerning what's been called the destruction of justice or  evidence or destruction of evidence so those are the three categories and what happened was the the definition was given to the jury of what you can consider to be unfair competition had all three of those in there and at state which was erroneous and that's because the privileged and at the same time the defendants requested three separate instructions on a litigation privilege so if some of that conduct wasn't privileged but statute and the court granted it and so we thought that was correct but what happened was then when the trial courage the plaintiff was allowed to put on this evidence and the defendant wasn't and that was absolutely erroneous ok well that's something else i'm ok i have to say guess where you're standing on the evidence that we're talking about that you say involve privileged conduct the original decision to admit it was if that's reviewable for an abuse of discretion well the court seems to have understood the court was told what the with the law it is and then made a decision in the fall and so i don't know i don't think that's what happened at all what happened was the evidence either was going to all come in or not come in and it was our position initially it should not and in fact we were successful our motion in limine was granted ok but then it started to come then and and you objected no we said if this is coming and we want to tell our side of the story  that that is an abuse of discretion review that part but the second part is we said ok you can't have this conduct being the basis for tort liability so your instruction on what tort liability excuse me what is unfair competition we objected to now whether or not that instruction is erroneous that's it didn't oval review and whether or not i'm just trying to hear you so you didn't agree that the evidence was admissible for some purpose if the evidence well for example let me let me say this there was some allegation that some of the player declarations were for example now that can't be the basis for tort liability but the whole purpose of the privilege is a trial let's get to the truth ok so they can come in and the other side is entitled to say well you know that's not true and your credibility is not good and we can say no no no that that unfair conduct that's the statutory part and it's really easy in this case because you have a binding pretrial conference sort of that separates them the plaintiff did that they said here's our common law claim and that's the misappropriation part and over here is our statutory claim and that's that mr procreation plus things that are statutory extortion suborning perjury and obstruction of justice that's the statutory claim and that's the one that  there's absolutely no right to a jury be you cannot award damages of any kind fugitive or that's the choice and that the error the fundamental error here is that when you look at the jury instructions it says s m t is unfair competition claims comprise doesn't list six things three of them are statutory unfair competition so that right there you have reversible error because you have being submitted to the jury and the jury being a lot in fact the trial court at the post trial motions that i made a mistake there was an error in this instruction but the court said well i think it's a harmless error because if the jury had awarded last i would have fixed that when the stack when the statutory claim came to mean there's two problems with that the first problem is the component if the jury was not given that part of the coin and did not award punitive like the crock or can't do that on the statutory crime because the statutory claim does not support punitive that's twenty million dollars with respect at least first the second problem with that is that the trial court could not award damages he can't say well if those damages were to not fall up the damages the only thing that the truckload court could do is either branch an injunction or he could consider restitution but in this case there was no basis in the record because there was no evidence of restitution the entire damages testimony of their expert routes are focused on damages and the current i think the korea supplied case really answers the but and that is you can't take damages and say ok well i didn't get those i'm going to just take the same thing and i'm going to call in restitution and get that the the statutory unfair competition claim does not exist to allow a party to recover damages for the privilege i just want to briefly say that the problem was that we did not have any instructions on privilege so it's ok if the court if you take their argument and they say well this part wasn't privileged in this p must be reversed because the district court didn't strike the jury that non computer invalid in california and again since we have a general verdict that doesn't allocate damages it's impossible to determine how many damages were awarded on the basis no forcible even after done quotes because that's what his term was in the contract that's specific performance that violates civil code thirty three ninety no personal services contract can be specifically enforced period and saying that he can't go out and compete or if he does the money blasted then that's the same assange he's forced to come into our offices and work every day and clearly that wouldn't be permitted in the argument except the argument was made that you say goes nowhere  theory was he still works for us he can't quit we bought him for five years we own you david dunn that was the argument that this record apparently accepted it and there are you know comments here and there on the record where you know when i was asking for instructions not just just be clear about what the breach of contract was it's described in the closing argument as the simplest of claims he had in a five year term employment contract which contained a best efforts promise and a further promise that he would devote substantially all of his time on behalf of our client in doing his work as and he was concededly in the evidence to be this a superstar of the sports industry the breach in this case was not a breach of any post five year term restrictive covenant the breach in this case was a breach of a best efforts promise and i will add there were comments in the case which included restrictions on his ability to do things like solicit employees in california is also in forcible post without regard to a term contract but even as to clients and things like that where there is the damages for the five years let me explain how the damages worked all right the you had a lot of generalize ation and i think you have to look at professor what a rouser did what he did was he said look what happened in this case is they walked off with this very valuable football recruiting business and they impair the basketball business that my client had what i mean title to do under the law is to give value weight what is it what was the thing they took independent third party came along and bought s m d i know what the earnings of s and p were in that transaction two years before done left i can calculate a ratio ten point one and what i can then do is take ratio and and and apply it so that i can figure out what was the revenue that went out the door when done breached his contract and set up his competing shop and that produces the resulting damage and what he did to give a and perhaps the most interesting of the numbers he gave given the jury's final decision of twenty million dollars awarded against athletes first in two million dollars as to done if he performed the following calculation he said i'll take my ten point one multiplier and all apply it to the actual revenue that the that the departing athletes first company were done when earned and that produced twenty one and a half million dollars in departing revenue it was the way of the valuating what had been taken now conceivably by capitalizing it perhaps it's true that you could say that you know that takes into account a future stream of revenue and it certainly takes into account the five years does it take into account a term of it after perhaps but there's nothing illegal about that for a couple of reasons let's remember that the kind of contracts we're talking about in this case provided that if you saw if you negotiated a contract a ten year contract for a player you got a payment every year for the whole ten years that's a loss that's attributable to this breach outside the term moreover you know there's there's there's a factor of of of destroying the loyalty that that system are used i want to emphasize is the instruction they proposed was wrong to support the instruction they proposed said it was a sleeping we brought instruction and it said the only protection is extended to confidential information that's not correct insofar as we're talking  about the ability to solicit employees and it's also an inadequate instruction because it doesn't take any account of the term period which is important because here again the other nuance to it is the jury found that dunn was a unique and valuable employee and so under california law a civil code section thirty two or thirty four twenty free as an edward these kinds of provisions to restrain someone from going elsewhere or collect damages from them are perfectly enforceable in those two he can that and let me show you know he never really he never he also testified about the the the assets the gentleman have you know his bank account in the law but the crucial thing which you have to keep in mind is that part of his net worth is just athletes first investment he owns seventy eight percent of athletes first and what routes are testified to was that athletes first had in his view a value of seventy six million dollars  nine seventy eight percent of that asset is a fifty eight million dollar asset now they've made the accusation here that there was no evidence of liability in the case there was a fair there were balance sheets for the year two thousand and one that were prepared by athletes first now professor rouser said there were all sorts of problems with them and they were incredible in many respects but they listed the liabilities and four hundred thirty three thousand dollars so you can do a quick calculation and say that he's got this hugely valuable asset and there was an account of liabilities based upon that evidence that's the chain we had and we had a situation where there'd been destruction of the evidence by this mr honeywell who destroyed athletes first including those specifically labeled done files and it was also a situation where we've encountered some stonewalling in the discovery process now they tell you in their reply brief that judge lou ruled that we got all the documents we asked for in response to that had nothing to do with this so it's hardly a comment by the court on that subject so there's adequate evidence of wealth in this record to support punitive damages let me and the jury instruction given in this case to which there was no objection  mention wealth it talks about financial condition let me also add there was no rule fifty a motion challenging the sufficiency of the proof of wealth so if there was a problem with it we had no opportunity to come in and address the subject  both statutory unfair competition under seventeen two hundred and it pleads common law unfair competition and it pleads it in a way as to encompass all of the five theories that the jury was told just give you the context you know we're living in beacon theaters versus west over we have to have a trial before the court which is going to take up both the legal and the equitable issues in the case so we have a trial which of course first is directed at the things that the jury is going to consider and then subsequently the district judge will turn to the seventeen two hundred which is what he ultimately did when he made those comments and said that i don't find it necessary to grant any further relief as to that jury claim because i would because i think you've already received by way of the damages all of the relief that i would have been inclined to give you by way of injunction the key point though your honor going back to the pretrial order is at the trial in this case and most importantly when we get to the instruction stage these claims are not carved out in any fashion as being exclusively claims under the statutory cause of action  only referenced to the statutory cause of action in the jury instruction the that the that the jury gets is in a after s t r twenty two eighty seven and it simply defines extortion as quote  extortion falls within the ambit of unfair business practices forbidding by california statutory and common law prohibitions on unfair competition there was no objection at the jury instructions to the instructions issue doesn't this issue does not this case is tried as a state it's tried in the universal way but it's always been clear in the trial of the case that the extortion issue was going to be tried and when it comes time to submit that issue there is and there's no objection on the basis that it's only a statutory claim to the form of submission that we have so my point to you is i understand the rules about the supersede superseding effect of a pretrial or but when you have a case where we are the conduct of the trial is such that the originally pleaded claim gets tried and when there's vel objection given to the district j this violates your pretrial order and hence no opportunity for us for example to come in and say well your honor we'd like to be relieved from it you know it's simply a classification of where these claims lie and you know it shouldn't have a binding effect these are claims which which which are permissible under the common law in those circumstances it's inappropriate to suggest that that that this court should now reverse a seven week jury trial on the basis that there was a statement in a pretrial order in a case that was then tried on a fundamentally different basis so i don't think that would preclude that offers any basis by which to do a reversal and then there are some other things to keep in mind about that too to that that he wished he had that back in effect and could have changed presumably what he would have done if he simply would have deleted the reference to statutory in the definition of extortion but you know it's a truthful statement in  instruction and it doesn't tell the jury to do anything with respect to that fact and moreover let's let's be clear the jury only address the subject of damages so it didn't take into account anything else in fact there was a specific instruction the jury was given that for purposes of calculating the recovery in the case pardon me that it could not in should not consider any evidence of unjust heard some evidence about that unjust enrichment is the kind of thing that starts to bring us within the statutory violation infalling fornia so again there was no this has no impact in the context of the way the case was tr but you're quite right your honor he did express a wish that he would have given a different instruction and there's another reason why that's getting back to the question judge kozinski put to me then that the failure to object to an instruction is important because if the judge had been alerted to the fact that it was somehow going to mislead people or more importantly that this issue shouldn't be submitted because there'd been a pretrial order that had narrowed the subject and that would have had an effect now he did argue and i've met this goes to a question judge sand put two opposing counsel they did argue that that the the common law cause of action only covers so called palming all because your honor had asked about defining the proper over overtaken by some subsequent things first there are two decisions of this court that hold that the common law cause of action for misappropriation reaches the misappropriation of a property and and court has held many years ago and california courts of appeal have held their after in cases we canvassed for you in the brief that the the that idea of common law unfair competition is to make sure that there is no there that week ahead of the chick scenery that people can use to try to you know oppress their competitors in the kind of conduct we're talking about in this case falls within that category which brings me to the question of privilege the the litigation privilege simply doesn't apply to what we're talking about in this case i mean you've heard a lot about litigation privilege today and obviously now have two cases dealing with it i mean the first it's almost a perverse application because the application that you're being  here well off the only point i was trying to make your honor is the justification for it is that we want to protect access and participation in court in this case the allegation is  sorry it can apply to premier league asian conduct but you have to satisfy certain elements in order to do it and what i meant to say was here they don't satisfy the required elements for purposes of the statute what they don't do is they don't show that these things have a reasonable relationship to the object of the litigation and i mean are functionally designed to achieve a result it can be a change in litigation the privilege or honor does not extend to threats that in other words there is still the california court of appeal has told us in the rothman case there is still a value in protecting people from being subjected to threats which have been which have no reasonable relationship to the litigation in other words you simply can't run around and say i am i am i am torturously threatening you as in this requires that there be both some connection and logical relation to the action and also that the communicated act further is a necessary and useful staff in the litigation purpose and must serv understand this case aside of the and i've done so was that there was additional consideration in connection with the five year employment term that was never deliver thus excluding his performance on the contract and we're told that the you were allowed to get your side of the evidence that the other side wasn't allowed to get a bunch of evidence and that was relevant on what year it is not not not right your honor they  his version of the contract which was before the jury when it had to decide as it did under the instructions whether or not a contract had been validly formed in addition with respect to those vignettes the think talk about the evidence keening in fact in other lameness for example there are a specific e mails or you saying that it was an error but it was harmless because the evidence came in other ways i'm saying that even even if we assume that the court which would require you then to just make an assessment of whether or not there was any prejudice resulting from the exclusion of i hear you artfully saying there were some the stakes here in the exclusion of it well i think we just have tried not to take a position one way or another but yeah under frank questioning i if i thought i could defend you the hearsay questions i would have done it in my brief i but i think it doesn't matter how to you didn't try to that's why i'm pushing all right your honor no it doesn't matter because the evidence came came in both because mr dunn fully described his arrangement that is his his version of this two million dollar stock deal and moreover it also came in by way of documentary me the these e mails that we need in also show that miss worksman the general counsel is supposedly preparing these documents which is another thing he wanted to get across these e mails also show that mr steinberg was apparently very upset about it and let me make one other point to going back to the question apart from prejudice did this have any legitimate role in the case i mean are we actually made a motion which the trial court denied we think iranians slee to exclude this whole line of inquiry into the parole evidence rule because what he was claiming in effect was as a sophisticated contract style i had integrated contract i knew that i believe i had these promises for additional consideration which weren't specified in it and i nevertheless find it in now i'd like to testify that even though these these contracts the wealthy employment agreement and this extension agenda meticulously i'm only going to make two quick points because i don't want to keep taking up my counsel time as far as unfair competition law case was tried was it just unfair competition common law unfair competition absolutely not from the get go the plaintiffs took the position they had a right to a jury trial on the statutory claim and if there's any doubt in the proposed t r o order that the plaintiffs got the court to issue after the verdict was rendered but be in peace seven thousand two hundred there's no doubt that that was to mislead the jury secondly with respect to the privilege of the rothman case they counsel sites is important for two reasons first of all it recognizes that where a defendant wants to avoid liability and they make statements and settlement that's covered that's an ad that is a legitimate object of litigation and secondly it notes that forty seven d said the merger is about the announced in a matter of hours and this merger will not go through if you don't sign david dunn and your partners lease time merck and jeff moore and will not walk away with seventy four million tomorrow and it will be your fault because you didn't trust us that would have been highly time under the regulations for to me board of directors meeting and i need that meeting in order to spend more stock on this deal so that's why we can't play that promise in writing before the merger even done believed him but again the jury didn't hear  it and otherwise there was no apparent explanation for why this couldn't be put in writing because remember the jury knew that at least three law firms are working on this deal they're drafting agreements in the middle of the night and naturally the jury would think well why couldn't they put  thank you very much let me i think perhaps a good place to start with respect to the platinum cases you talk about the the point that i think makes the bridge most peacefully and that's the cause of action for conspiracy that the district co granted summary judgment on as to platinum in this case because obviously it dovetails quite closely with all of the other issues that you've just been thinking about in the context of this case it's the district judge granted summary judgment on the cause of action for conspiracy here for two reasons the first one is he determined that there wasn't a that he didn't think there was a separate cause of action that had been  wouldn't be a reason not to prove it because of action for conspiracy which is after all enjoying your demise and second he decided that there wasn't enough evidence to show that platinum had going into any kind of an agreement to become part of a conspiracy and just just to give you the full context here conspiracy is what well conspiracy is an agreement to achieve to come together with an object and for purposes of achieving a legal object that's correct your honor yeah and so let me just as i say i think for purposes of thinking about this and conspiracy is a good framework for doing this because i think a lot of the same factual analysis is it is true for purposes of of all of these  that they were pursuing in the legal object yes this will post some kind interesting business you are in the evidence is your honor that let me take what i think is the best of it the best of it is that they participated when they were contemplating making the investment in this case that mr antwan a platinum their lawyer mr cochran vaughn who was supposed to be doing so in investigations sat down with mr sawyer who was mr  's attorney in that conversation the evidence of that conversation in the record is that at that time they were told that the athlete's first founding group had a lot of dirt about steinberg and that  he could never allow this dirt to come out and this was told to them in the context of helping them understand why it was that there was not going to be a a injunction or litigation action which was going to shut down do so all of this stuff going to come out they want to have any part of that but your honor i think the evidence of the that it's a question for the jury to to to be the entitle to consider what is the significance of  in admissions that have been made about this conversation having taken place to which we then add that there after they invested in the enterprise and most importantly for this purpose when it came time  to to find a way to facilitate the dissemination of all of the material that we know from that and there's evidence of some of that very salacious material having come out because we've we have in the record the article that mr signed were of the los angeles times rights which includes elements that when it seemed then to implement that program and thus confirming the character of this dirt that that it was platinum that hired the fleishman hillard public relations firm which was their long time public relations expert paid them and most importantly there's evidence that there's that there's an e mail it's conceded it's a case they dispute the significance of it but there's an e mail that says information which was it was essentially iran or the completion the implementation of the program which which we can command was set in motion going all the way back to the beginning at the time of this neal memo so i think if you take object and that of course were permitted to prove without concrete evidence were permitted to infer that or at least ask the jury to conclude it from circumstantial evidence i think there's enough evidence here that it jury could c that platinum conspired to participate in the tortuous conda that's at issue in this case and i think i and as i say i think that same analysis that i've just given you factually provides the basis for claims and let me just briefly address this tradition if he switches much featured in the briefing i think what we have to understand is that that the it is quite clear from the could be said case that the fact that i am a director or officer doesn't give me any license or immunity if i participate in intentionally tortious conduct and we're contending that that's what happened that they did such as prove is this that i've described and also because they for example actually used confidential information which one could reasonably conclude from the record that they knew had been obtained improperly from from my clients hired well no your honor it's a little let me just briefly comment on the other evidence because i think the evidence actually goes across the board on the theories there is also evidence of their use of the financial information that we that we have obtained and i guess i covered that let me just cover shift over for a minute then to the other part of condition the other part of confusion i think says that in certain circumstances that if you are an investor i'm sorry an officer or a shareholder or a director that you or your buying into the enterprise ought to be good enough for purposes of the stabbing why the lety as well and as to that they think their principal defense here is that there is no control and there was an advice of counsel defense well i think the existence of advice of counsel defense factually is is is a serious issue in this case because the lawyer they hired conceded he only spent two point nine hours investigating this and operated on the assumption that he believed everything he was told and was given the limited warrant of determining whether or not it was possible there would be an injunction that would lie at the beginning of the transaction with respect to control all i ask you to consider there is expected to mean something other than a numbers game the evidence here is that platinum was the absolutely crucial element of making this enterprise fly in had all sorts of controls over it including very skin trolls having to do with the salaries that would be paid to the seventy eight percent percent owner mr dunn and again we're talking about a summary judgment standard so perhaps i'll save with time i have left i have a question anything of rule fifty six means anything summary judgment was properly granted in this case the plaintiff needs come for was deficient probative evidence to establish each element of at least one of the claims a mr sawyer and the subject of it is the litigation risk we're talking about what is the likelihood of south success in litigation as part of that it's mentioned as your honor mentioned they might not even sue their dirt here that's the extent of the evidence they want to take that evidence and say somehow platinum knew of threats of extortion of a conspiracy then that's all they have and then say well platinum was involved in hiring the p r agent well what is it that forward the evidence restamp point that they could get a jury verdict on you know they mention this extortion this conspiracy well you know extortion you need the threat you need evidence that the defendant knew the threat there's no evidence the platinum of any of these alleged threats going on between athletes first and s m b what they knew is they had the conversation with mr cochran bond and they were told in addition to what the litigation risk might be they might never sue that that happens almost new business the go to where there's were litigation might be pending you have to demonstrate an order to be eligible for these what we have to demonstrate is that the claim was under thirty for twenty six point four objectively developed with gemini that when you do have a dismissal that somebody does not know the elements or proven that subjectively specialist always in every case where none of the elements to prove necessarily have a as an investor on of the cases that they cite it's not enough to even show up even knew they had to have direct participation or be in a position where they're actually directing at preserving control of other workers who gives no i'm not really the straight secret you are saying that even if you do assert that there are trade secrets here you have to show that platinum had some direct participation active participation in the misappropriation in the port it's being committed and they have not shown that now i would also say participation in any misappropriation by athletes first but they're missing key elements their case and that's why we went into discussion of trying to be oh ok thank you case one fifty two f thirty page eleven seventy this court points out that is that essentially what you have to show when you get the information and he's talking to confidential information same standard for trade secrets is that you know or should have known that the information was secret we're not just talking about publicly available price information we're talking about specific customer preferences we're talking about the confidential phone numbers that they copied so they could get a head start in getting it getting the venture started