the next case on for argument is washington sunday players inc versus count would company i think that podium comes up a little bit if you would like  thank you may please the court my name is douglas cawley of the firm of mccool smith and i am here today representing the appellate mr washington and sunday players at the very beginning of my argument this morning i would like to clarify the relief that is being sought today by the appellant we ask today that the court find that the trial court's j striking the jury's finding of last profit damages be found to be iranians if the court so finds we then request that the court reverse and render for damages as to the jury's finding of lost profits plus prejudgment interest if the court grants that relief then the appellant does not seek a new trial on any other ground  if on the other hand the court declines to enter that relief then in the alternative the appellant seeks a new trial on both on damages both lost profits and loss of business value the court's action below in granting j m a well striking down the jury's finding of lost profits damage was error because the verdict was supported by sufficient evidence first there was evidence of record that the breach by kill would which is unquestioned caused washington and sunday players to lose profits and second because there was evidence of record in sufficient evidence on which the jury concluded that those lost profits were reasonably certain wasn't the evidence of record based that you're talking about based upon the analogy to under armor the use of under armor the yardstick measurement and so forth and if that was in the inappropriate yardstick totally inappropriate then where do you stand without if you don't get that that is the fundamental proof of lost profits damages and and i don't think we have an alternative we have various sources you gotta talk you've got i think you have to focus on why this the use of under armor as it is a yardstick was appropriate and why the expert experts determination on that score was true should stay ok thank you your honor the comparison between the business venture formed by kill wood and sunday players to under armor brings before this court as it did before the jury an uncanny similarity and every respect except where to be length of time except for length of time that those two entities one before us and under armor had been in existence right correct literally iran or under armor was founded in one nine hundred ninety five by one former college football player who began selling compression wear out of the trunk of his car and for several years he basically had a business on that scale literally driving from college to college and selling clothing in very small quantities after his businesses entry into a promotion agreement with the television network e s p n his sales exploded the expert in this case express the opinion that because sunday players was able to leap over those first few lean hears in which under armor was sold out of the truck of a car by its entry into the agreement with kel would it achieve a status in terms of market capability manufacturing capability quality design and all other factors that was that you had prior to this at the time of this agreement the not in the agreement was entered into about one hundred ninety thousand so isn't there some  difference but kelle would had sales of about one hundred fifteen million dollars of compression where and at the time this agreement was entered into sunday players from a tiny enterprise selling garments as they could to high schools and small colleges to a large and taking over your company and then all of a sudden you got to get the nobody recognized this brand nobody wanted it they either were going with under armor or they were going with generic brands and using their own retail names on them and kill would couldn't make any progress for you that's what that's why they the contract and so i don't see how you get to piggyback on kill words prior success because in his own in it's in it's other businesses with respect your honor because that's not what the evidence showed the most compelling witness perhaps was a third party witness angela jackson a woman who was responsible for promoting retail sales at the m t v television network she personally along with representatives of cal wood and sunday players visited major chain retailers who said they were ready to buy sunday players and put it in their store as soon as advertising started promotion advertising chicken and egg problem don't you with and t v because they weren't going to start advertising until you reach sales of five hundred thousand dollars no that's not accurate i thought that was in the jackson testified that in t v agreed that it would provide two million dollars worth in retail cost of two million dollars worth of advertising kell would would pay twenty five thousand dollars to pay the production costs of the advertising that's an obligation we submit that shell would had to promote that's what they agreed to in the license agreement that's why sunday players gave up ninety five percent of their prospective benefit of this venture in the products compete when they came on the market did compete or would have competed more fully with the underarm product rectally your honor again i say that the resemblance is uncanny the product is the same except for the label on the garment the demographic of customers is the same the promotional approach of getting indorsements from professional athletes is the same and the time period is approximately the same so if you're suddenly injecting a product into a market that is from the get go competing with something that is already out there unknown how can you use the company that is already producing a product as a compound or for sales i mean that means nation it seems to me and you can certainly tell me what i am nationwide you are doubling the amount of product that is going out to the market and expecting each to get a fifty year that not actually your honor once you work through the methodology set forth in the report on the testimony first of all let me start from the observation that kel wood's head of this business unit mr dorf testified that he believed that he could achieve a ten to fifteen percent share of the business that under armor was doing mr he would take ten to fifteen percent of that business yes he would the way that mr barr eighty five you're down eighty five percent of their however many millions of their market share so the way that mr barnes approached that was to say he was going to use the financial performance of under armor in two thousand  as the starting place of comparable revenues but for sunday players it wasn't going to start in two thousand and two they hadn't even entered into agreement in two thousand and two that track of performance instead would began not when the agreement was that into but almost a full year later to account for some kind of ramp up period for cal wood and sunday players the net effect of that once you do the arithmetic is candor in clarifying the issues that are before this court sunday players was a new business business was compression where with the sunday players trademark when it the problem which both sides testified to was how to get this new product into big retailers like target and foot locker what sunday players hoped to do was to imitate underarm problem arises is that first of all when under armor got started and it took them eight years do this including attaining celebrity endorsements can do this in one year we're talking under armor eight second thing is that when under armor did it as the district judge recognized there was no underarm sunday players on the other hand is coming into a full market their problem is not only under armor would you dominates the market with a seventy five percent market share their problem is that established sporting goods had seen his upstart under armor come from nowhere and create this new business new market for a new product and as mr krugman erik spurred testified the assumption was that the giants like nike and reebok were some begin to roll over or under armor and it's lunch that did not happen nike probably the best established sporting goods brand in the world at that time  is not being i don't have to sell nike here spent a thirty million dollar ad campaign and it got them approximately a two percent increase in market share that's the market environment in which these new business is new product is being introduced and that is why the district court concluded that under armor was not a proper comparative different time different market second point is that there was nobody here who knew the market mr barnes was not qualified as a marketing expert judge dahlan sure the initial magistrate judge in this case in his d'albert opinion held that while mr barnes was qualified as a valuation expert he was not qualified as a marketing expert mr barnes assume that if kiln would spent the year brand building then sunny players would get fifty percent of what under armor had had at a comparable point in its startup or five percent of the compression their market as a whole he's standing in the air on that assumption somebody had to put bricks under it and there was no evidence from anybody on the sunny players side that that market share or indeed any market share would have been tainted what you nobody goes into business expecting to fail of course sunday players believed in their own product but shown feld says that the entrepreneurs hope and faith are not evidence that a new product will take off what they needed and they did not have was somebody who knew the industry somebody who could say as an experienced businessman or is an academic i have seen new products launched i know what it takes to get a new brand of clothing into people's hands plaintiff's argument was under armor took all this time they made their product cool if we imitate under armor we could also make our product cool the problem is that the people who were saying had never done this before they were lame of innocence in particular most plumlee who under armour's excuse me  players trial counsel call the in his closing argument their marketing expert mr plumlee was lay witness he was in a den of five or qualifies as an expert he had sold established brands of copying machinery for many years he had never sold clothing he had never launched a new brand and for the reasons stated in their brief he was there for simply not qualified on the rule seven zero one  two to give away opinion about whether or not the strategy of imitating underarm would have worked now mr callie has said that we have an admission from the  that mr dorf the brand manager if you will testified that ten or fifteen percent of the market share would be attained that is not what he testified first of all he didn't testified that mr jackson from m testified as to what he said he had told her if it came in at all with came in as a hearsay admission to no because it was clearly an admission by a party opponent what he did testify to was he said hypothetically if he told ms jackson she said if they can get ten or fifteen percent of the market the sky is the limit of course mr door for the middle manager whose idea it was to go  agreement which was never signed was a contention agreement m t v was properly skeptical they first of all wanted kill wood to put up the front money to produce this commercial second of all there was a contingency in there there was no obligation to broadcast that unless and until there were five hundred thousand dollars of sunday player sales and third of all as the district judge pointed ms jackson never made a solid comparison with what under or murs m t v excuse me e s p n campaign had been she never said how many times this was going to be broadcast she never said what markets it was going to be broadcast she never compared the e s p n target audience which after all is a sports conscious audience to the m t v or an audience which is a more youth and fashion appeal that we think are really significant are twofold the first which i think is really covered by our papers is that if there is a second trial mr plumlee is not qualified to give an opinion as a witness on marketing the second is that the court should have ruled either as a matter of law or it should have instructed the jury that it could so find if the licensing agreement was ambiguous that carol wood's obligation to make marketing efforts for this product was kept at three percent the obligation to use regional reasonable marketing efforts which we all learned in law school in lady duff gordon case is a subspecies of the general new york requirement that there is an implied covenant of good faith and fair dealing in every contr for the reasons that are cited in our brain if an implied covenant of fair good faith and fair dealing can be limited by express contract language and once it is limited by express contract language it cannot be used to overrule  first the kill would sunday players venture was not a new business now we all know that the concept of a new business in the context of lost profits or something of words of art and that there is a heightened level of scrutiny given to a new business it obviously has presents far far more difficult task in proving last profits with reasonable certainty was not a new business and the reason that sunday players testified they were willing to give up ninety five percent of the value in this venture is what kel would brought to the table that overcame those uncertain had already sold fifteen million dollars worth of compression their two major retailers and branded sunday players entered into this agreement to take advantage of cal wood's expertise the twenty eight thousand employees their billion dollars in revenues their experience in marketing and promotion and their contacts contacts with nationwide retailers it would be a gross  oversimplification to simply say that because this business was quote new that it deserved the same type of scrutiny that completely ignores the reason for entering into the venture and the value that the alliance with kell would brought to sunday players we also heard of some discussion of the giants in the market place nike reebok and adidas we also heard those weren't successful and what we didn't hear is that mr barnes the damages expert applied a fifty percent discount to the comparison of revenues with under armor attributable to under armour's existing presence in the marketplace and the attempts to enter the market by giants like nike now was was the jury the finder of fact bound to conclude that that fifty percent was adequate should have been higher should have been lower i would submit that is a classic question of fact for the jury and that the jury heard that testimony f mr barnes they heard the expectation of mr dorf of kill would they heard the cross examination of the damages expert and it was within their province to make a fat determination about whether that fifty percent was too conservative are not conservative enough the yardstick analysis that your honor asked about before let's be completely clear about the nature of what that means in this case there is no question in the case that the yardstick is an appropriate methodological analysis mr truglio woods expert agreed that the only question is the two assumptions that the expert mr barnes made the fifty percent discount and starting with the two thousand t her in two thousand and four those are questions of fact there is ample record in the evidence not only from the expert but are in fact witnesses to support a jury's verdict awarding their lost profits damages we request therefore your honor that this court reversed the j m o l of the trial court render judgment for the jury's finding of lost profits plus pre judgment interest or in the alternative if the court does not grant that relief that it order a new trial on damages for both lost profits and lost business value thank you very much thank you both we will reserve decision in this case