JACKSON V AEG LIVE July 11

th
2013 Please support us to provide you future transcripts
Arthur L. Erk
(Entertainment Industry Certified Public Accountant)
Plaintiffs' Expert Witness.
Judge: Thank you. All right. We do have another witness, so let's get started.
Ms. Strong: We have some issues with respect to this witness, and I think probably -- it's going to be
more than ten minutes, your honor.
Judge: I've done an extensive workup on motions in limine on almost all of these expert witnesses. Is
there some reason why -- are there new issues? Because --
Mr. Panish: No.
Ms. Strong: Yes, there are, your honor; and you did not rule on one of the motions that's relevant to
this witness. You have deferred ruling.

Mr. Panish: Your honor, you made an extensive written ruling on all these arguments that Ms. Strong
spent hours on arguing to exclude.
Ms. Strong: Your honor, I think -- should we discuss --
Judge: I didn't make a ruling on this particular one?
Ms. Strong: There is one ruling that you deferred ruling on, your honor.
Mr. Panish: You've ruled on --
Judge: Hold on. One motion or one issue on that witness?
Mr. Putnam: One entire motion, motion in limine number 6, your honor.
Mr. Panish: I have the ruling.
Mr. Boyle: Your honor, motion in limine number 6 was deferred until you heard the motions in limine
on Mr. Erk and Mr. Formuzis. In your orders for those two motions, you covered all the issues raised in
motion in limine number 6, so this has been totally decided.
Ms. Strong: It's not been decided, your honor. To preserve the record, we would like to raise it.
There's a few more things I would like to say about that, your honor, but -- there's significant issues that
are --
Judge: There's always significant issues to lawyers.
Mr. Panish: He's been sitting in the hall all day.
Judge: Is there some reason why we can't get started with it? If you have an objection, you can stand
up and object. But maybe some of this stuff is not going to be objectionable.
Ms. Strong: Okay. You anticipate going ten minutes, and then we can argue -- excuse the jury and
argue at that point?
Judge: Possibly until 4:15. Let's get started.
Ms. Strong: Okay.
Arthur L. Erk
(Entertainment Industry Certified Public Accountant)
Plaintiffs' Expert Witness.

Judge: Thank you. You may begin.

Direct examination by Brian Panish:
Q. Good afternoon.
A. Good afternoon, Mr. Panish.
Q. You have a little bit of an accent. Where are you from?
A. I don't consider that I have an accent. I'm -- I'm sorry. I'm from New York.
Q. All right. Don't talk fast.
A. Okay.
Q. What is your present occupation?
A. I'm a CPA
Q. And by whom are you employed?
A. Citrin Cooperman.
Q. And can you tell us a little bit about Citrin Cooperman?
A. Citrin Cooperman is a -- a regional accounting firm in the northeast. It's a $130 million firm. I'm a
partner in the firm, and we have about 100 partners, and we have approximately 400 staff.
Q. What does your firm do?
A. We're in a wide range of industries. I personally am in the entertainment industry. I do royalty
audits, business management, family planning. We have a very large department in that. We also have
partners that specialize in film, television and media, all part of this entertainment group. And I also
have a partner that's strictly business management and does a lot of touring, and we handle the finances
for entertainers. Now, the rest of the firm, they have a large real estate practice, they also handle a lot of
what you -- you would sometimes know affectionately here in the media as hedge fund trading. So we
do their companies, all their tax work and whatever planning we need to do for them. We have a large
practice in the restaurants industry. We also handle a lot in the franchising industry. Subway is --
internationally is a client of the firm. We have a -- we do healthcare, we do nonprofit, we do estate
planning. So we basically cover probably a broad range of any of the services that are out there. I'm
sure there's a few that we don't get into, but the firm tries to cover all the bases.
Q. How about music?
A. Music happens to be my particular specialty, and the firm actually started -- miles citrin and joel

cooperman were working for another accounting firm, and two of their clients were the who and yes.
And they had said to Citrin and Cooperman, "We only want you guys to work on our account." And
they said, "Well, we work for this company. They tell us who we do the work for." So they said, "well
why don't you start your own company?" So they're young guys at the time, it's 1979, and so the who
actually were the ones that said to them, "We'll lend you $50,000 to start your own firm," and that's
exactly how citrin cooperman started.
Q. How about sports?
A. We handle about -- several athletes, maybe about ten athletes. They run in the baseball and football
primarily, professional athletes.
Q. Can you tell us, sir, what is your educational background?
A. I went to hofstra university out in long island, and I graduated in 1974 with a Bachelor of Business
Administration.
Q. Did you have an emphasis?
A. My emphasis was in Accounting. I got the required number of credits to sit for the exam.
Q. And Long Island, is that New York?
A. Yes, it is.
Q. When you graduated, did you obtain any other certificates in your area of specialty?
A. I became a CPA. I took the exam in 1978, I passed and was certified.
Q. What does it mean to be a CPA? What's involved?
A. What it means is in those particular days before I got into the entertainment industry, I was
permitted to conduct audits of public companies, and I was allowed to express opinions. Usually when
you see a company issues their financial reports, a CPA is signing the report at the end. So when I
became licensed and certified in New York state, I had the ability to do that. Quite frankly, the
companies that I worked for appreciate that I became a CPA.
Q. And to be a CPA, you've got to take a test?
A. There are four grueling parts that you have to take, and it took me four years to pass the exam. But I
passed the exam and didn't have to take it anymore.
Q. Have you ever written any published articles?
A. Only one time, and it was -- it was last year. I wrote an article for the new jersey journal of
accountancy concerning the merits of why you should consider doing royalty audits or licensing audits.
Q. What's a royalty?

A. A royalty is an amount of money. If you take records -- for example, in the music industry, a
contract is usually signed before the artist's record gets released; and in that contract are various clauses
that stipulate how the artist is to be paid. And it's usually a function of a percentage that's agreed upon,
upon contracted price. In the old days, it was on the retail price, and they would deduct, let's say, 10
percent. In the vinyl disk days, they would deduct 10 percent packaging deduction, and you'd arrive at
this illustrious term called royalty base price. And they would apply the percentage to this base prices
and that would be the dollar amount or pennies that the artist would get per record.
Q. Can you give us an overview of kind of the work you've done in your career? And when I say that,
what type of services have you provided to clients?
A. My career started with a firm that was called haskins and sells. It's now called deloitte and touche. I
stayed there exactly two years to the day because that's the amount of experience you needed to be able
to sit for the exam. In those days, they called it the big eight; and I wasn't a big fan of the attitude of the
big eight.
Q. Meaning there are eight large --
A. The eight largest accounting firms in the country. It's now the big four. They're down to four of
them through mergers or whatever. So I went to work for haskins and sells, I stayed two years to the
day. I worked primarily -- merrill lynch was my largest client there. I was there six months of the year,
the rest was mainly retail operations. But I didn't want to work on merrill lynch for the rest of my life,
so I. Planned my demise and I went to a company called gulf and western which became paramount
communications. I was in the corporate internal audit department there, I was a senior auditor, and
everybody in the department -- a large department, had about 50 people. It was a huge conglomerate.
And I conducted internal audits of various companies. As a matter of fact, one of my first jobs was to
come out here and do an audit of sega, which at that time was a pinball company, and now became the
computer games, the video games. And that was my first exposure to any type of entertainment at that
time. I traveled about 70 percent of the time, all domestically; and after about, let's say, 16 months, my
first child was born. When I first went there, my wife gave me my marching orders either you cut the
travel or we're done. I'm now married 39 years this year.
Q. Did you cut the travel?
A. I cut the travel. So I went to a company called -- it was called at the time RCA Corp., which owned
RCA Records, doing the same type of work, traveling domestically to lovely places like scranton,
pennsylvania. But I did at one time move over to RCA Records for about nine months, and I got my
first exposure to the record industry, which I liked. So I stayed at RCA Records for about nine months,
but I decided I wasn't happy with the progress in that company and went back to RCA Corp. Then I got
a call in about -- I stayed there for about 18 months also. I got a call from a friend who happened to be
a headhunter, and called me up about a job with an entertainment business management firm called --
at that time it was called Gelfand, Briscow, Rennart and Feldman. It's now just called Gelfand. Called
me up, said there was an interesting opportunity in New York, "Would you like to go for the
interview?" I said sure. So I went on the interview in November of '78. I got hired right on the spot. I
got hired to create and build the east coast royalty audit division of Gelfand. I just -- it turned out I had
a natural affinity to do royalty audit.
Q. Where was Gelfand's main office?

A. Gelfand's main office was New York City, 489 fifth avenue. We had an L.A. -- office, or they have
an L.A. office, which is still here. It's at 1880 century park east, which is a larger office than New York.
New York was about 40 people. L.A. has about maybe 120 people. We are also in Palm Springs;
Nashville, Tennessee; San Francisco; and I was responsible also at one point in time after I made
partner to start building a London office. So while I was at Gelfand, I built an east coast royalty audit
operation, and my area of responsibility was east of the mississippi all the way over through europe and
I'd say south africa because I happen to have gone to south africa twice in my tenure there. The clients
that I did royalty audits for -- now, I was at Gelfand for ten years. I made partner in two years, so I was
a partner about seven and a half years. As I said, I had a natural affinity to do royalty audits. Pretty
much name it, I've done it at that time. I did Bob Dylan, Neil Diamond, Barbra Streisand. I did all
Michael Jackson's royalty audit work throughout the '80's because Michael Jackson was a client at
Gelfand starting around 1982, '83, through my tenure when I left in May of' 88. I've done many other
audits. I probably did probably 150 audits there, major people, Santana, Journey, Kansas. Like I said,
CBS, which became Sony, was my natural haunt. I was always there.
Q. Okay. Slow down.
A. I'm sorry.
Q. CBS, you're talking about the TV station or something else?
A. No. The record company.
Q. So there's a CBS Records that then became Sony records?
A. That's correct.
Q. Okay. When you say your haunt, and you would be there, why would you be at CBS Or Sony
records?
A. Because a large part of the artists, the major artists, that I did were CBS Recording artists.
Q. Bad question. Why would you want to be over there all the time? What were you doing?
A. Number one, I really enjoyed the work, so I spent a lot
of time at CBS Doing the royalty audits for Bob Dylan, Barbra Streisand, Neil Diamond.
Q. You were there to do royalty audits?
A. That's correct.
Q. What is a royalty audit?
A. Usually with respect to royalty recording artists, they receive reportings from the record company
every six months. Usually 90 days after -- they were calendared six months; so every June and every
december, those periods were closed. CBS Would have 90 days to render what we call a reimbursement
statement to the artist, which reported what they said the record sold, did the royalty calculations,
deducted expenses that they claimed were allowed under the contract, and arrived at a number that was

either payable to the artist or it would show a negative number because they claimed they spent more
money on promoting the artist and he didn't sell enough records to earn it out at that time.
Q. Why would you audit? Didn't you just accept what they gave you?
A. Absolutely not.
Q. Why not?
A. Because -- now, understand, I've done what I consider the -- the cream of the crop of royalty audits.
So record company systems were designed to cover a broad range of calculations and parameters that
they put in the system. With special artists there were -- they had what we called idiosyncratic clauses,
special clauses that the system couldn't handle. It took the human body to program the system to put
these special provisions in. And by and large, it didn't happen. So when I started in the business, and I
started doing it, I said, "Boy, I'll do this for a couple of years, I'll clean it all up, they'll fix it, and they
won't need me anymore." I got news for you. The contracts back in those days were about 30 pages
long. By the time 1990 rolled around, they were up to 160 pages. And a lot of the things that I had done
at CBS -- they have these things I call boilerplate contracts; so for new artists signing, they would have
these -- what they would put as the least favorable contract, and then it would be up to the attorney to
negotiate the provisions. Some of the things that I came up with for audit claims over the years,
somehow or another, they worked their way into the contracts to -- to eliminate the other -- the
creativity, the creative items that I came up with because their calculations were all over the place. So
they tried to prevent future artists from getting the benefit of these certain calculations.
Q. Now, are there complex formulas in these contracts?
Judge: There's some noise. Does somebody have a cell phone on, or -- (discussion held off the record)
(the question was read)
The witness: For the superstars, yes.
Mr. Panish: Okay. And we're not going to get too much into that right now.
Q. But it can get pretty complex; fair statement?
A. It can, yes, it can.
Q. Okay. So you were telling us about your background, you are told us about the Gelfand company
that you were there for about eight years?
A. Ten years.
Q. Sorry.
A. Partner for eight years.
A. Seven and a half years at partner.

Q. What does that mean when you make partner? Is that a big deal?
A. I become an owner. I was an equity owner in Gelfand.
Q. Do you get paid more?
A. It worked out that way.
Q. But if you don't make money, you could lose more?
A. That's true, too.
Q. So you -- what year would that be that you stopped working at the Gelfand company?
A. 1988.
Q. Where did you go then?
A. I went in with a former partner of Gelfand. His name is Bruce Colburn. And that's where I met my
other two partners, Victor Wlodingver and Eric Chanzis. We ended up calling it W.E.C. Because too
many people had a problem with Wlodingver, w-l-o-d-I-n-g-v-e-r. They couldn't get the W to be a V, so
they misspelled his name, so we called ourselves W.E.C.
Q. How long were you with that operation?
A. 20 years.
Q. Where were you based?
A. We were based in New York down by Madison Square Garden, 26th street.
Q. By Madison Square Garden?
A. No, Park. Between 23rd and 26th street.
Q. Okay. So then 20 years. What happened?
A. I built a business management practice, but I also built a bigger royalty audit practice of my own.
Kiss was a Gelfand client, and I had done all their audits.
Q. Who?
A. Kiss. Remember Kiss?
Q. Yes. Gene --
A. Gene Simmons.

Q. I remember him. He had like the tongue, right?

A. Yes, yes.
Q. Okay. So Kiss, that's a rock band?
A. Yes, it's a rock band.
Q. And what did you do for them?
A. I did royalty audits for them, I did them here in the states, and I had to go to the netherlands every
three years for them.
Q. Why would you go to the netherlands?
A. Because they had two different deals. They had a u.S.-based deal and an international deal. They
were very smart, two different deals completely.
Q. Okay. And then your first was 20 years. Did you -- then did something happen or change? What
happened changed?
A. What changed is that as we got older and the practice got bigger, Chanzis left the firm around 2009.
He got burned out. Sometimes it can be a frustrating business. And it was just Wlodingver and myself,
and we had 18 employees, and just -- we were chief cook and bottle washer. We had bought some space
on 21st street; and as you get older, you want your quality of life to get a little bit better, so we decided
that we needed more support services, infrastructure, meaning have our own -- a company with their
own HR Department to take care of employees and all that stuff. So it took that stress off of us. So we
had searched around for firms that we liked, and Joel Cooperman actually sought us out. And we liked
Joel; and after we tortured him for six months, we finally gave in and signed a contract in November of
2010.
Q. So you moved your firm in with Mr. Cooperman?
A. We took all our employees except two people.
Q. And have you been there ever since?
A. Yes.
Q. And you've told us what that company does, right?
A. Yes.
Q. Okay. How long have you been a CPA?
A. Since 1978, so 35 years.
Q. Now, I'm going to come back to some -- but in this case, were you retained to do some consulting?

A. Yes, I was.
Q. And what were you retained to do?
A. I was retained to calculate Michael Jackson's lost future earning capacity due to his untimely death.
Q. Anything else? I'm not saying that there is, I'm just asking is that --
A. No. I need -- I was the guy that you hired to calculate the damages in this case.
Q. Okay. And just in broad brush strokes, what are the categories that you assessed?
A. The ones that I can be reasonably assured that he would have done, touring, a worldwide tour.
Along with touring, there's a product called merchandising, where you go to a show, people buy
products that the artist has created or has agreed to have created. Then the larger stars tend to get
sponsorships and endorsements, so we came up with what we thought the endorsement value would be.
We -- I also understood from reading all the documents that were provided to me, and deposition
testimony, and the notes -- handwritten notes of Michael Jackson, that he wanted to have a show
created in Vegas, a theme show, based on either never land -- and which would show all of his old
archived footage, et cetera. So we calculated earnings had that show been done; and within the show,
for use of music in the show, there's another earning stream; and they would have been for royalties.
They would have had to pay 5 percent of the show box office for his publishing, the use of his songs,
and the use of the master recordings for the show.
Q. So the categories then would be touring, merchandising, endorsements, Las Vegas. Anything else?
A. And those royalties are -- that was in what I call the Tier 1 calculations.
Q. Anything else in the Tier 1 calculations that you assessed? Does that cover it?
A. That covers the Tier 1.
Q. And how do you go about doing that?
Ms. Strong: Objection; lacks foundation, and 801 through 803, lacks qualifications, your honor, not
qualified for these issues.
Judge: This is one of those --
Mr. Panish: We already went through this.
Judge: I think Tier 1 was okay. Tier 2 may have been an issue.
Mr. Panish: Tier 1 was fine.
Judge: Tier 1 was okay, from what I remember of the rulings.
Ms. Strong: We just heard some qualifications, your honor --

Judge: Well, it's 4:15. What we're going to do is I'm going to excuse the jury now anyway and we're
going to have a discussion. You're coming back Monday; is that right?
The witness: Yes.
Judge: You and the jury. Okay. July 15th at 10:00 am is what my clerk advises. And then hold on. A
juror mentioned that she has a dental appointment July 29th in the morning. The problem with that is in
the afternoon -- are we off in the afternoon?
The clerk: We're off in the afternoon. We're here in the morning.
Judge: Is there any way you can get the appointment in the afternoon.
Juror number 7: I tried. It takes three months.
Mr. Putnam: Can we flip --
The clerk: There's another juror who requested the morning. One is requesting the morning, one is
requesting the afternoon.
Judge: Someone has an interview, I think.
Juror number 2: No. That's another doctor appointment. We have two jurors for July 29 doctor
appointment in the afternoon.
Judge: That's why we took the afternoon off. Now we've got a morning issue. Anybody else who has a
morning issue? No?
Mr. Panish: Can we talk to you on the side just for a second?
Judge: Okay.
Mr. Panish: We don't have to work that out right now.
Judge: I've read your note. Let's talk about it.
Juror number 7: I actually called and asked them can we move it to the afternoon, and they told me
no. And I was going to talk to you again and call them again. I think when we first started this whole
process, I had an appointment, and I moved it, I had a -- you know, for May, and I moved it, and now
we're still dealing with this, and it takes some time to get these appointments.
Judge: Right. I know. Part of the problem is we give time estimates and there's probably going to be
more of you with those issues as the trial gets --
Mr. Panish: Maybe you can order the dentist.
Judge: I'll talk about it with the attorneys. I'll try to accommodate everybody. And, frankly, I have
appointments, too. I try to schedule them when you have things to do, too. So -- anyway. I got your
note, and we'll work something out. Okay?

Juror number 7: Okay.

Judge: But for now, I guess have a good Friday, and I'll see you on Monday at 10:00 am okay? Thank
you. Oh, yeah. Remember the admonitions.
(The following proceedings were held in open court, outside the presence of the jurors):
Judge: Okay.
Ms. Strong: Your honor, we could argue this tomorrow if you prefer.
Judge: No. I want to argue it now.
Ms. Strong: Obviously, we'd like to renew our motion in limine to
exclude Mr. Erk in full. We believe, under Sargon, a 2012 case from the California supreme court, that
anything beyond the 50 shows that Michael had agreed to prior to his death is the only thing that would
not be barred by speculation and barred by the principles of Sargon. Okay?
Judge: I'm overruling that; but I know that you wanted, for whatever reason, to renew them every time
they come up, and I understand that.
Ms. Strong: And there are a couple of other issues. We just want to preserve it for the record. But
there are some issues that I'd like to address specifically that overlap with motion in limine number 6,
which was as to speculative damages, your honor; and you did not issue a ruling on that, you reserved
your ruling on the speculative damage motion. And it overlaps with some of these issues with respect to
Mr. Erk. Focusing first on Tier 2, your honor, I want to be very clear here. This is an expert who is
about to speak to the jury about alleged potential earnings of over $1.5 billion, your honor.
Judge: Okay.
Ms. Strong: And so what I'd like to focus on, your honor, is the California civil code 3283 requires
that damages be certain. And when you're dealing with future damages, your honor, that turns to
reasonable certainty. It doesn't have to be absolute, but it has to be reasonably certain. No matter the
case law that you look at, if you look at lost profits, if you look at earning capacity --
Judge: I agree.
Ms. Strong: So with respect to that, your honor, as to Tier 2, Mr. Erk's testimony at his deposition
made it very clear that he believes his opinions as to everything with respect to Tier 2 is not reasonably
certain. And as a result, your honor, to put that in front of the jury would be reversible error under
Sargon; and it could not be any clearer in the record than what we have with Mr. Erk's deposition. And
I can read some quotes from the deposition for you if you'd like.
Mr. Panish: She already did this.
Mr. Boyle: If I could read the first sentence of your motion in limine on erk ruling, it is granted only
as to the Tier 2 damages except for future tours and royalty bumps are permitted. Then you go on later,

"Defendants' criticisms of future clothing lines, endorsements and movies, due to decedent's failure to
some of these items in the past, are fodder for cross-examination but not a reason to exclude them
altogether as speculative. "The fact that the decedent engaged in these money making activities in the
past certainly tethers them to a potential loss of future earning capacity." this has been argued --
Ms. Strong: Except, your honor, the future tours that you tentatively allowed in pursuant to your
ruling, your honor, is included in Tier 2, and that is $397 million worth of damages, your honor, that
this expert has said --
Judge: The amount is not relevant. I realize it may be
A. Lot of money, but the amount is not really that relevant. It's the likelihood.
Ms. Strong: Okay. So with respect to Tier 2, I wanted to clarify then right now the witness has said,
the expert has said, that his -- all of his opinions as to Tier 2, including the four additional tours, are not
held to a reasonable degree of certainty, and so -- I will read the testimony. So here's a question. Page
652 of Mr. Erk's deposition. "So with respect to the items in Tier 2, which includes those additional
tours you're talking about, you're not saying those things would have happened to a reasonable
degree of certainty?" Answer, "Asked and answered. I just want to make sure the record is clear."
Going down to -- the answer from the witness, "The record is clear." Mr. Sanders interrupts and says
"Just answer this one more time. You're right, it has been asked and answered; but feel free to tell
her again." Answer, "I said not with reasonable certainty." There's another section of the deposition
where Mr. Sanders stipulates, your honor, and says "I think the only thing he's testified to with
reasonable certainty are his Tier 1 projections, and every single thing else we would stipulate to is
either -- is not going to occur with reasonable certainty in a way he could put a number on it or
could not have a number put on it with reasonable certainty." Question, "Are you willing to stipulate
to that, Mr. Erk, as to what Mr. Sanders said?" "Yes." So he's made it very clear, your honor, that
those four additional tours that in your ruling would be -- you would allow him to testify about are not
held to a reasonable degree of certainty.
Mr. Boyle: Your honor, those passages are the exact ones that they read to you during the lengthy
motion in limine hearing. We've already argued this extensively, and you've ruled. And that -- one,
that's not the standard there; and two, I mean, it's taken completely out of context, as we went through
last time; and three, the jury is the one who assesses whether these damages would happen or not.
Judge: What I want to know is how can you say that when AEG is talking to Michael Jackson about
other tours in other cities as a potential?
Ms. Strong: There's some confusion here, your honor. We're not talking about the This Is It tour, and
whether or not This Is It would go on to other places. What Mr. Erk -- that's Tier 1. He's projected a
260-show tour, to be clear, that would all be called "This Is It." that's what he thinks. In addition to that,
your honor, he's projected four more tours that would go from age 50 to age 66. Never contemplated,
no -- he admitted -- there's more of his testimony, he says I have no evidence that that would have
happened and it was ever contemplated by anyone; and that's the $400 million that we're talking about
with respect to the Tier 2.
Mr. Boyle: Your honor, that's exactly the business Mr. Jackson was in; and based on your motion in
limine ruling, he has a past history of that; and so that is not a speculative damage. The jury will assess
whether they think he could have done it more, but that's not some -- it's not like we're saying he was

going to go create a computer company. Right? That's the business that he was in.
Mr. Panish: Your honor, we argued this for hours. Ms. Strong read the same things in this case.
Everything is reargued and reargued and reargued. We had an extensive motions in limine, you took it
under submission and issued rulings. Now, we have the witness, they're renewing everything that she
argued before. When we get to the witness, lay the foundation, then she can try to object again, I guess,
and do -- but how many times are we going to reargue the same stuff? She -- she has them all marked --
she read all of these, hours and hours we spent on this. How many times are they going to get to
reargue it?
Mr. Sanders: Just one second, your honor. And I would note that having listened carefully to the trial
testimony today, yesterday with Mr. Ortega, and with virtually every other witness, movies are really
pretty much a certainty. I don't think that's even a guess anymore. And she would have done everything
in her power to keep out movies. This is really ridiculous. The jury should get to hear the evidence,
they can figure out if he would or wouldn't have done something. But at the time she made her
argument, she made it sound like movies -- you couldn't possibly say he was going to do movies; and
now I don't know how you could say he wasn't going to do them.
Ms. Strong: Your honor, movies are a separate issue which we can talk about, because there are issues
with respect to movies; but I want to focus on the four tours that had never been contemplated. This is
not about This Is It going on to 260. Part of our motion in full is that whether Michael Jackson would
have toured beyond 50 shows is speculative, and we argued that if it had progressed and gone up to
260, it should be excluded and not given to the jury. But that's not what I am focusing on right now,
your honor. I'm focusing on --
Judge: Why is it taking it out of context again?
Mr. Panish: Because it's not the standard to a reasonable degree of certainty. That is not the standard
for an expert witness to testify. That is not the standard.
Mr. Boyle: They can impeach him with his depo.
Mr. Panish: That's not the standard. In the Sargon case, as the court states in your motion in limine --
you wrote in your motion in limine -- in your order that was on --
Judge: That's why I hate revisiting these things.
Mr. Panish: April 29th. They revisit everything. April 29th, you issued a written order. Almost every
one of these that you deny, they've reargued them, just like this. Okay? And you talk about Sargon.
Specifically, the court says --
Ms. Strong: I can remind you of what Sargon says, your honor. It speaks to two questions. One is the
admissibility of expert testimony, and it says that expert testimony must not be speculative, and so we
know what speculative means, your honor. Sargon establishes that you have a gatekeeping role.
Judge: Right. I know that.
Ms. Strong: And with respect to reasonable certainty to argue that it's not the standard, the code
requires that damages be certain. Evidence that is not certain or reasonably certain is speculative and

cannot go to the jury. And even in an earning capacity case that they cited, your honor, and I didn't have
this pointed out in our prior argument -- one of their earning capacity cases is dealing with a jury
instruction related to earning capacity, and says damages that could be awarded to Plaintiff included the
present cash value of earning capacity reasonably certain to be lost in the future. Reasonable certainty
applies to all damages, your honor. You cannot have speculative testimony --
Judge: I think the distinction I made was between businesses versus individuals, if I recall. Hold on.
It's starting to come back to me that there was a distinction between individual earning capacity and
talking about lost profits from a business, and what was reasonably certain.
Mr. Boyle: I can read it if you'd like. "However, Defendants cited case law," slash, "authorities
addressing the projected," quote, "lost profits," end quote, "of business entities, and not the," quote,
"loss of earning capacity," end quote, "of decedents in wrongful death actions. Decedent was not a
business entity although he engaged in business transactions. However, those business transactions
were all based on decedent's persona, efforts and success as an entertainer. The lost profits cases
applying to business entities just do not apply as neatly as Defendants claim. It is the usual loss of
earning capacity cases that do, as, for example, with a superstar athlete. Mr. Erk used a combination
of decedent's own career experiences and business transactions and information about similar
superstars in the music industry to project the loss of earning capacity for decedent." And then you
went on to say -- the sentence I already read comes next. "Here AEG itself is not --"
Judge: I considered it in depth.
Ms. Strong: In fairness, the distinction between lost profits and earning capacity, we don't agree that
that actually is the right analysis here. What is being projected here are lost profits for business
endeavors, and we believe those cases do apply; but it doesn't matter, your honor, for the purposes of
this argument. It doesn't matter if you're in an earning capacity case or a lost profits case. The evidence
with respect to damages still must be reasonably certain, which is why I wanted to point out the
earnings capacity case, your honor, that has that language with respect to reasonable certainty. I'd also
like to cite a jury instruction. With respect to this case, Gargir, g-a-r-g-i-r, versus B, apostrophe, n-e-i --
Judge: Mr. Boyle, why don't you take that down?
Mr. Panish: It's in our opposition. We've already argued this case. There's no reconsideration.
Ms. Strong: We have not argued this case.
Mr. Panish: We did. It's in our papers and the court considered it in our papers, and there's no motion
for reconsideration. There's no new facts under 1008. They just want to reargue everything and hope
that something is different. Ms. Strong argued this as best she could before. I'm sure she would admit
she did her best job before. It didn't work on this part, now she wants another bite at the apple.
Ms. Strong: Your honor, to the extent there was any confusion that there was a distinction --
Judge: I'm not confused.
Ms. Strong: No, between lost profits, that this standard didn't apply in an earning capacity case, I
wanted to make clear that it does apply in earning capacity. Listen to caci 3903-c. "To recover damages
for past and future lost earnings, Plaintiff must prove," quote, "the amount of income, earnings, salary,

wages he/she will be reasonably certain to lose." There's no question reasonably certain is the standard
that applies to damages, and when an expert witness gets on the stand and says, "I can't hold my
opinions to any degree of reasonable certainty," it cannot be presented to the jury, your honor, without
causing reversible error. So with respect to Tier 2, your honor, given the testimony that we have from
this witness, I would ask your honor to reconsider that ruling with respect to the entirety. You did keep
other portions of Tier 2 out, to be clear.
Judge: I clearly went through it. I clearly parsed out the part that I thought was not certain and kept in
the part that I thought was. It sounds like, from listening to my ruling, I thought about it quite carefully
and parsed out portions that I thought were unsupported and kept the parts that were. So I don't like
revisiting these things.
Ms. Strong: I appreciate that, your honor. Just to the extent that there was any confusion between lost
profits and earning capacity, I want to make it abundantly clear that with respect to earning capacity,
reasonable certainty is also required; and this expert has said with respect to those four tours,
everything in Tier 2, not part of it. One thing I didn't tell you last time, your honor, is that Tier 2 did not
exist at day 1 of this experts' deposition. It was created between day 1 and day 2, which was pushed off
several day by Plaintiffs' counsel. Four days later, miraculously, Tier 2 was created. I would argue
there's lots of reasons as to why it was put in there. It was not something that they held to any degree of
certainty, your honor.
Mr. Boyle: For the record, Mr. Erk had back surgery.
Ms. Strong: Those were not the reasons that were given at the time, your honor.
Mr. Panish: Here we go again.
Ms. Strong: Your honor, with respect to movies, there is -- we need some clarification with respect to
the movies ruling. Mr. Erk has said he believes movies is in Tier 2, as well, your honor. You said that
you would exclude everything from Tier 2 except for the four future tours and associated royalty
bumps, so I wanted -- there was some language in your order that indicated that there could be
discussion of movies, and given that he had indicated it was in Tier 2, and you didn't except that out of
your Tier 2 ruling, I wanted clarification with respect to that, your honor.
Judge: Did he do a calculation on movies?
Mr. Sanders: Just that they're certainly likely to happen, which I think the jury already knows, and
he's relying on the witnesses --
Judge: If he doesn't have a calculation --
Mr. Sanders: Every expert has said it can be from zero to a huge number.
Judge: You've got to have a number.
Ms. Strong: His testimony is that it would be zero to millions; and he says, "I don't have enough
information to do any calculations, so I can only speculate to them." He shouldn't be testifying about it,
your honor.

Judge: How can it be quantified without a number?

Mr. Panish: There are cases that deal with this exact issue.
Mr. Boyle: They're doing what they've done a lot to us. One, this guy cannot give a number; and two,
they say he didn't give a number, now we can't talk about it at all. The case law is clear in California
you don't need expert testimony on loss of earnings capacity, you leave it to the jury to decide. That's
how it is. If he had given a number for movies, they would be fighting right now that that number is
inappropriate. We can't win. We can have him give a number if they want us to, but I don't --
Judge: Did he give a number as to the others? I can't remember.
Mr. Panish: Yes. And we argued this same issue, and you ruled the movies were allowed. She made
all these same arguments before.
Judge: I think I reserved on the movies.
Mr. Panish: No, right here, movies. It's in your order.
Ms. Strong: It's unclear, your honor, because you said everything in Tier 2 was out.
Mr. Panish: This is in your order. "Defendants' criticism on future clothing line endorsements and
movies due to decedent's failure at some of these endeavors in the past --" Remember the questions
that Ms. Cahan asked today to try to set that up? "-- are fodder for cross examination but not reason
to exclude them altogether as speculative. The fact that decedent engaged in money-making --" You
go on. I've read it already. But you talk about -- we argued -- I'm sorry I get -- we argued all of this for
hours. Ms. Strong, a very able lawyer, made all of these same arguments. I'm sure she was totally
prepared then, and she wants to reargue it.
Ms. Strong: Your honor, we didn't, obviously, go into details on this; but you're right, your honor, an
expert can't get up and say, "He could have made zero, he could have made millions, I can only
speculate. At that point, he's not offering anything useful to the jury, and it's something -- it's
speculation, he's acknowledging it's speculation.
Judge: If he doesn't have a number --
Mr. Sanders: He's not putting a number on movies.
Judge: That's the problem. The other things he has numbers on, I can see that; but if he doesn't have a
number, how is the jury going to come up with a number?
Mr. Panish: Can I show you what the cases are to look at?
Judge: Yes, please.
Mr. Panish: Do you want to do this on Monday?
Judge: Yes, why don't we come up with that --

Ms. Stebbins: Two brief things, your honor. Just for clarification, the reason we're renewing all these
expert motions is pretrial motions in limine aren't necessarily dispositive. If your honor would rule that
you want to rely on the pretrial motion in limine rulings and not revisit them every time, we don't need
to do that; but we're trying to preserve it for the record. They initially declined to stipulate that the
pretrial rulings are binding. There are times when we raise issues because we want to raise them again;
but in many instances, it's literally just to preserve our appellate rights.
Mr. Panish: They made a motion in limine to exclude it; and just like when you make motions to
exclude some things of our experts, we haven't come in and said, "We need to preserve the record. We
want to reargue everything." And there's things of ours that have been excluded -- remember, it's all our
experts have been going. We have never once said we want to reargue this motion, make sure for the
record -- that's what happened. We've never once done that.
Ms. Stebbins: If you're stating a holding that you intend to rely on the motions in limine as ordered
unless there's reason to revisit them and we don't need to reargue them to preserve anything, we're
happy to do that, and then only reargue if there's new issues that need to be raised.
Judge: That's what I normally do. What I normally do is the rulings stand unless -- there are times
when a motion in limine is really in advance, it can be changed. But normally it's because something
occurs during the trial or some case comes down or something that changes, and then the court can
reconsider it.
Ms. Strong: There is something I would like to do for the record, your honor, with respect to
endorsements. I would just like to submit pages 173 through 191 of erk's deposition in full for the
record, your honor, because it will demonstrate that he does not have a reliable methodology for that.
We'll submit it later. I just want to let you know.
Judge: Is it attached to the original motion?
Ms. Strong: Not in full, your honor. We'll do it later.
Mr. Panish: They can submit whatever they want to the court.
Ms. Stebbins: One other brief thing, just because it affects something happening tomorrow, as your
honor will recall, Plaintiffs late added Grace Rwaramba to their witness list, and your honor ordered
that unless she be deposed, she not be permitted to testify. We have begun her deposition, are
completing it tomorrow. My understanding is that Plaintiffs intends to call her live maybe -- I think
she's not available next week, but shortly thereafter. The issue is that Ms. Rwaramba is refusing to
provide her current address or contact information at the deposition. I would like the -- the court to
order Plaintiffs to provide any contact information they have; and, also, I didn't know if court was dark
tomorrow, if I could call in. In the events that the witness continues to refuse to provide it, I might call
and ask for a ruling.
Mr. Boyle: Your honor, Ms. Rwaramba has a lawyer. They have the lawyer's contact information. The
depo is going on tomorrow at her lawyer's office.
Ms. Stebbins: We have taken it up with her lawyer, your honor. It may come up tomorrow afternoon
at the deposition, I don't know if your honor will be here if we needed to call in and get a ruling or
something.

Judge: What is the concern about her address? What do you need her address for?
Ms. Stebbins: We may need to follow up with her.
Judge: For what?
Ms. Stebbins: For instance, if -- she's stating at the moment that she's not a California resident
anymore, so if we need to find her in another state -- she testified -- perhaps I should have begun with
this -- that she intentionally evaded service for two and a half years.
Judge: Why don't you ask her attorney if her attorney would accept service on her behalf.
Ms. Stebbins: He said he could not, so I need an address for her.
Judge: Then maybe you can discuss that with her and say if the attorney won't agree to accept service
on her behalf, then the alternative is she has to disclose her address.
Mr. Panish: Shouldn't her attorney be here to be representing her instead of these discussions? She's
being prejudiced with no representation here.
Ms. Stebbins: My question was will the court be in session --
Judge: You're her lawyer, I guess, since you're making an argument for her.
Mr. Panish: We have an unrepresented party and counsel is making arguments without notice to the
party. Is that proper?
Mr. Boyle: About home address.
Ms. Stebbins: What I'm asking is if the court will be here tomorrow, in the event an issue arises, then I
could call in with Ms. Rwaramba and her counsel on the phone.
Judge: I'll be here in the morning only.
Ms. Stebbins: The depo starts at 2:00 and goes until 5:00. If there's an issue, we'll figure it out. When
she's on the stand, perhaps we can get it resolved then.
Mr. Putnam: If she's on the stand, it doesn't matter.
Ms. Stebbins: I'm afraid we're going to lose her after tomorrow afternoon and she's going to go into
hiding again like she did, admittedly, for two and a half years. Perhaps it won't be an issue.
Mr. Panish: Can we go home?
Ms. Stebbins: I'm a little annoyed by the fact that she told me she intentionally evaded service and --
Judge: Give her a subpoena.

Mr. Boyle: And Mr. Anschutz evaded service. I was at his condominium at the reserve at palm desert,
I was trying to serve him, and he was evading, and had security people there. Do you want me to give
his address on the record, Mr. Anschutz?
Ms. Stebbins: I don't think this has anything to do with Mr. Anschutz.
Mr. Panish: Well, you're talking about evading service.
The clerk: Counsel, don't talk to each other, talk to the court.
Mr. Panish: Goodnight.
Ms. Stebbins: Your honor, have a good evening. The court is dark tomorrow afternoon, yes?
Judge: It is. I'm not available tomorrow afternoon. In the morning, I'm available.
Ms. Stebbins: Thank you, your honor.
Ms. Strong: Thank you, your honor.
Mr. Boyle: Thank you.
Mr. Panish: Thank you, your honor.
(Court adjourned to Monday, July 15, 2013)