For Question 3: The gap in the contract is the lawsuit itself: that Angels Baseball is using two location modifiers in the team name. Why was this gap not closed?
For Question 4: There are 4 outcomes possible at the time the injunction was requested:
Injunction awarded (team name for 07 season: Anaheim Angels) + City wins (team name stays Anaheim Angels): The only name change that happens here is the team’s announced new name of Los Angeles Angels of Anaheim, but not a single game is played. Any costs associated are what you believe the baseball team’s claimed costs are.
Injunction award (07 season: Anaheim Angels) + team wins (name change in 08 season to Los Angeles Angels of Anaheim): The costs here are the same as that were realized, just one season later, plus whatever you believe of the defendant’s testimony.
Injunction denied (07 season: LAAoA) + City wins (team name reverts to Anaheim Angels): here two name changes occur. Without a doubt this is the costliest. One season under a different name has a ton of intangible costs (to fans, mainly) plus whatever actual monetary costs.
Injunction denied (07 season: LAAoA) + team wins (name stays LAAoA): this is what actually happened.
A key portion of this question is that you identify the expected costs of awarding/denying the injunction. It’s important to note that the dissenting opinion basically states that the probabilities of the City winning (cases 1. and 3.) are different depending on if the injunction was awarded or denied. Basically because 3 is so much more costly (particularly than 4) that you have to rule for the team.