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AN INTRODUCTION TO FEDERAL DISCOVERY PRACTICE WITH FULL MILITARY METAPHORS

Discovery under the Federal Rules of Civil Procedure could be described in a number of ways. It might be described as a labyrinthine castle in which many young attorneys become lost, billing countless hours and still unable to find the essential facts of their case. On the other hand, it might be described as a massive siege machine, which if deployed with implacable determination and sufficient attorney time, can breach the walls of many a sturdy citadel.

First, we have the general disclosure provisions of Rule 26. This rule lays down the guidelines for discovery, and tells the lawyers what they can expect the court to require the other side to produce in the course of litigation. All parties to the litigation are required to disclose, right at the outset, the documents and witnesses they intend to use to prove their case.

From a strategic point of view, Rule 26 disclosures might be likened to getting your enemy’s map of the battlefield. However, since this is a forced disclosure, you can expect it to be rather sketchy, more of an exercise in trying to avoid telling the other guy anything he doesn’t already know than the open-handed business of “laying your cards on the table,” which young attorneys sometimes think is the right way to go. Indeed, some law school teachers will even tell you this sort of thing: “Tell the other guy about your case. Let him poke holes in it. Then you know where to shore things up. Maybe you’ll learn something from him or her in the process.”

The only problem with this idea is that if you don’t know the strong and weak points of your case in advance, or what the other guy already knows, you are likely going to hurt yourself by making uninformed disclosures. Additionally, you should make the other guy show you his case before you even consider disclosing yours. Finally, since deception is one of the major skills to apply in the art of war, even the truths you disclose should serve to mislead your opponent in some way. For example, you can win points for candor by “revealing” things the other guy already knows. You then act surprised when he discloses that he already knows these things, flattering him for his perceptivity and astuteness. This type of exchange works wonders for relationships and costs your client nothing but maybe the price of a few drinks.

Within the context of the general discovery rules, if the compelled disclosures are a map, then the artillery is the Rule 34 document demand. Like artillery, if you target it well, you can score a direct hit and request damning documents that the other side is powerless to hold back. Carelessly drafted document demands can be attacked on grounds of vagueness, burdensomeness, and a host of other defects. Requests for “every document,” may produce far less than one hoped. Indeed, no matter how good the artillery gunners are, you’re going to have to send in infantry units to follow up. Additionally, document demands are like artillery in that they are slow to reload and retarget. Generally a request for documents will remain unanswered for at least 30 days, and thus, as the time allowed for discovery begins to run out, the delaying tactics to avoid producing necessary documents become more and more crucial, and your demands for production must necessarily become more forceful.

Another favored discovery tool for experienced litigators is the famous “request for admission.” Doing requests for admissions is a lot like playing “battleship.” In litigation, if somebody admits something, on the record and under oath, it relieves the other party of any duty to prove the fact that has been admitted. I like requests for admissions because of their psychological effect. Like document demands, they require a response within 30 days, but they have a much nastier consequence for non-compliance. If your lawyer fails to respond to a document demand, he gets either a nice phone call or a nasty letter from the other guy, asking him when he is going to get the damn documents. If your lawyer forgets to respond to requests for admissions, they are “deemed admitted.” So the lawyer can’t ignore them. And since requests for admissions require the client’s response under oath, the lawyer has to get together with his client to discuss the requests long before the time to send responses. In my experience, this makes lawyers do what they hate the most: call the client, send him the requests for admissions, and engage in a detailed discussion of the facts of the case.

The last type of annoying paper you can send your adversary is an interrogatory, a written question that his client has to answer under oath. Depending on who is sending the interrogatories, they can operate as well-targeted sniper bullets pinning the adversary down to a fixed position, or forcing him to seek refuge in a cover story. On the other hand, some people dispatch a set of interrogatories like an invasion of lice that do little more than irritate the enemy soldiers. Many insurance defense firms, for example, send out vague interrogatories that are dangerous only if you don’t provide a response of some sort.

My philosophy of responding to interrogatories is to answer in a manner both verbally extensive and factually spare. But sometimes I like to answer with such brevity as to be arch: “Irrelevant. You know the answer already.” Discovery judge Patricia Trumbull described my answer as “smart-alecky” when I answered Cohen’s question asking “who” knew some facts with the blunt response, “You know who.” Hey, they did know who. I understand what Judge Trumbull meant, though . . . more ink, less attitude, Mr. Carreon. Let’s try, “Such facts are already within the knowledge of the propounding party.”

After paper discovery, we come to the true cruise missile/attack fighter/helicopter gunship of litigation, the deposition. A deposition is always a costly process. For the lawyer, it usually means a full day of work, not counting travel. For the client, it means, at a minimum, paying for the court reporter, the lawyer’s time, travel, witness fees, costs of videotaping, and the cost of producing the transcript.

A cruise missile type deposition is where there is one witness out there who knows a key fact or set of facts. You know they know it, and so does the other guy. It’s just a matter of getting it on the record before trial so that you’re sure the witness is going to say what you think he will, you won’t be screwed if you can’t manage to get him to the trial itself, and you can finally stop arguing with the other guy about what this witness is going to say. It’s expensive, but if you target it accurately, it hits the target, and when the deposition is over you have secured that position on the map.

A jet-fighter deposition is where you are relatively sure that there are a large number of issues to be nailed down with a witness, because they were in a good position to know things that you now want to establish in your case. A good example would be a nurse in a medical malpractice case, or a mid-level banking employee in a bank fraud case. Merely because of where they stood, they had to observe necessary things, but they will likely be difficult to ferret out and nail down. So for the jet-fighter type mission, you pack a lunch, as detailed a map as you can, a list of targets, questions, and as much ammunition, I mean paperwork, as you can possibly carry. Your hope is that when you see your target you will know it, and you will find the right weapon to take it out. These types of depositions often take a full day, as you keep flying over the terrain, trying to pick up clues and respond by establishing your version of events, or the opposite of the other guy’s version, whichever is appropriate.

Finally, we have the helicopter gunship deposition. This is where you know that you’re dealing with a hardened adversary’s emplacement. We’re talking about top level tobacco executives, malpracticing surgeons, and defendants like Cohen, who have all the advantages of wealth, inertia and cynicism. A helicopter gunship deposition continues until the witness is exhausted, all of the documents have been discussed twice, every crucial question has been asked at least three times and objected to twice, and the court reporter has started to talk about her babysitter.

Most litigators with five years experience have been through all of these types of depositions, and are familiar with them. Cohen introduced me to a new type of deposition, however. This is the decoy deposition. Like a decoy duck, the decoy deposition has no substance beyond appearance. A decoy duck may float, look and perhaps even quack like a duck, but it is fake. The same is true of decoy depositions.

AN ARMADA OF DECOYS

I recently heard a news report about Amnesty International trying to restrict the sale of torture devices. I heard about stun belts, tasers, compliance batons, self-tightening handcuffs, and other nasty devices. Fortunately, aside from being handcuffed briefly by the LAPD after a motorcycle accident in which I was injured and my motorcycle damaged, I have never been subjected to any of those devices. Aside from being kicked in the ass for years during military school, and having the aforesaid LAPD try to break my arms just before they handcuffed me, I have rarely been the victim of intentional efforts to cause me suffering.

No, in order to bring the experience of torture into my own life it has been necessary to purchase a fax machine. Why a fax machine, you ask? Because using a fax machine, that I had to pay for, my legal adversaries are able to instantaneously beam into my office scores of pages of accusations, challenges, arguments, and other terrifying things. The other guy can spend months pulling together information, gathering it into an attack refined through hours of dedicated effort. And the whole thing pops into your office in ten minutes, neatly typed, meticulously argued, carefully proofread, arrogantly signed.

Every lawyer’s favorite time to send a fax stuffed with powerful toxins and terrifying portents is 4:48 p.m., Friday afternoon. That way they can screw up your whole weekend. Most fax machines ring before they begin to fuck up your life. Then, like a loyal servant who has become a mouthpiece for the enemy, they begin to spit out just what you did not want to see, packaged for your consumption by the last person you wanted to hear from, the other guy.

So it was that, on the evening of November 12, 1999, the fax machine began to disgorge its ill-omened load of paper, faxed directly from Duboff, Dorband, Cushing & King. What popped out was a flotilla of decoy depositions. Without the slightest preliminary discussion, Cohen had announced his intention to take nine different depositions at locations around the globe so far separated that I doubted any two were in the same time zone. The names of the people were unusual, like Thanin Sacchasiri. His deposition, the first of the nine, was set for December 3, 1999, in Bangkok. Then there was Eliyahue Roussos, whose deposition was scheduled for December 16th, in Tel Aviv, in the morning. During the afternoon of the 16th, Dorband planned to depose Ami Dvash in Haifa, presumably a short but dusty cab-ride and a couple of roadblocks away through what was not then an actual war zone. I was vexed that three depositions were scheduled in Moscow, which seemed too much like a great place for me to last be heard of. On the bright side, the junket was scheduled to conclude on December 22nd in Athens, so I could probably celebrate Christmas in flight on the way back to Oregon.

I gathered up and reviewed the pages that had piled up in the tray of the fax machine and spilled over onto the floor like toxic waste. After assembling the pages I got the drift pretty quickly. Cohen wanted to give me “diesel therapy.” This is a term that federal prisoners use to describe the kind of treatment you sometimes get from the Bureau of Prisons if you’re a naughty prisoner, or if you’re just unlucky. The United States Marshal Service has a fantastic fleet of trucks and buses in which they move prisoners all over the country. Sometimes prisoners spend more time on the road than they do in jail. The process is tiring, soul-wearying, and guaranteed to wear down the spirit of the most hardened prisoner. Being in jail is bad, but being imprisoned in transit is even worse. Cohen wanted to chain me to his deposition schedule and soak up Gary’s entire litigation budget before he got a chance to pursue any of his own discovery. Making things worse, all of these depositions were during my time that I’d already scheduled for Cohen’s deposition. Finally, these depositions were happening during the holiday season right before Y2K, when airports, hotels and the skies themselves would be jammed with vacationing civilians. I could smell the jet fuel already.

Never had I heard of anyone abusing the discovery process so blatantly. Around the same time as the decoy depositions, Cohen also served subpoenas on Gary’s doctor, three of his former attorneys, and five former business associates. All were to take place during the same one-month time period. Gary was willing to throw me at the task. He was a millionaire now, and if necessary, he would match Cohen penny for penny. However, I would rather have hung by my thumbs for a designated period of time than pursue this useless “discovery.”

I imagined the nine decoy depositions as intercontinental ballistic missiles, arcing across the globe from their various launching pads, converging on my desk. I had to bunker in to survive the attack, and began building a hardened emplacement, which in Federal discovery comes in the form of a “motion for protective order,” under Rule 26. Of course the motion would be granted, because Cohen’s tactic was transparently outrageous, but it would be a lot of work to write it. I would win, but I wasn’t going to get a whole lot of sleep until the motion was filed.

THE EXTRA-LEGAL PARALEGAL

I arrived with my wife and daughter in San Francisco a few days before Thanksgiving 1999. It was raining at the airport, where we parked on the roof. We wheeled their luggage into the international terminal while dodging the falling drops. In 26 years, my wife Tara and I had been separated rarely for more than a few days, and now she was leaving with my 18-year old daughter for Kathmandu, Nepal. Ana would be spending several months in a Tibetan language and Buddhist studies program. They were excited and looking forward to the adventure. I was looking forward to spending all my time on Sex.Com. Like the gravity pull of a black hole, Sex.Com had started to rip apart the stitches of my life. As Ana and Tara drifted past the event horizon, I was confident I would see them on the other side. For the moment, Dorband’s decoy depositions were the largest objects on my view screen, and I desperately needed to get my shield up.

After spending a decent interval at the airport, mourning the departure of my loved ones and having a drink, I headed into the city to meet with Gary and a guy named Mark Irvine. Gary was thrilled to have me all to himself, and he’d even hired Mark, a paralegal, to help me prepare the motion. Part tenant’s rights advocate, part pro-se litigator, Mark was tall, blonde-haired, apparently sincere, a veteran with a liberal prescription for pain killers and the noisiest laptop computer I have ever heard. Gary had used him in his unsuccessful fight to retain the Fulton Street apartment from which he had been evicted recently.

Mark introduced me to the Hastings Law School Library in downtown San Francisco. He thought it was a wonderful place, and I liked the printer setup for laptop computers. We labored there together for a couple of days cranking out the motion for protective order. Mark surfed the Internet to find out approximately how much it would cost and how many hours I would have to spend on airplanes to cover all of these depositions. The totals were impressive. My motion informed the judge that I would have to fly 222 hours, and Gary would have to spend around $17,000 on airfare. After adding in the cost of paying me at my reduced hourly rate, the total cost to Gary of defending the decoy depositions would be over $70,000.

In addition to arguing that the decoy depositions were intended to obstruct Gary’s efforts to obtain discovery against Cohen, and to waste attorney time and money, we filled the judge in on a few other details. Many foreign nations do not take kindly to the American deposition procedure. Some countries consider that people who take depositions in their country are undertaking unlawful judicial acts without authorization. (Perhaps some governments think Americans conduct depositions like the locals conduct their own “judicial investigations,” but I think this assumption is unwarranted, as there have been no Amnesty International accusations against the American civil justice system.) In any event, you can get thrown in jail for conducting a deposition in the wrong country. Since a number of these depositions were scheduled in countries with completely undemocratic legal systems, such as Moscow and Greece, I thought I’d push the “risk, danger, burden” angle for all it was worth. It was my life, after all.

We also pointed out to the judge that Cohen was obviously trying to get deposition testimony from people who would refuse to appear at trial. Even a Federal District Court subpoena has no power outside U.S. territorial limits. “Extraterritorial witnesses” cannot be compelled to appear at trial. However, their depositions can be submitted on the grounds that they are “unavailable,” i.e., outside of the jurisdictional power of the subpoena. Thus, Cohen figured he could notice the depositions, get the testimony, use it at trial, and never have to present these witnesses before a jury. If I failed to attend the depositions, they could go forward without cross-examination, and an uncross-examined deposition, admissible at trial, is a ticking bomb you have not even had the opportunity to try and disarm.

To up the risks and increase the pressure, Dorband used a tactic he was often to repeat. He insisted that I get all my motions for protective order filed by November 24, 1999, or he was going to book all of his plane reservations in anticipation of proceeding with the trip. Thus, I was under the gun to produce the motion for protective order within that time frame. Two full days were required to prepare the motion, writing, researching, adding exhibits, and finalizing all the paper. What’s ironic and painful about writing a motion for protective order is that, in order to get the protective order, you need to show it would be “burdensome and oppressive” to go forward with the discovery. Meanwhile, the whole time you are writing the motion for protective order, you are burdened and oppressed.

When the work was done, everything prepared, filed and sent off, Mark Irvine and I had sushi together. He was affable and intelligent. I thanked him several times for his hard work on the project, and anticipated that we would work together in the future. Unfortunately, a few weeks later, he and Gary had a major falling out. He ultimately sued Gary for stealing his shirt and some prescription medications. But the big claim he asserted was that Gary had induced him not to go to law school in exchange for the promise to pay for his law school education if he would work on the Sex.Com case instead. This allegation sounded so crazy and absurd that it was hard to believe when I saw it in Irvine’s complaint. In retrospect, however, anything seems possible.

After a brief effort to mediate the decaying relations between Mark and Gary, I gave up. But Gary wasn’t through with him. After defeating Mark’s lawsuit with an onslaught of legal firepower wielded by the redoubtable Steve Sherman, Gary pursued a jihad to ban Irvine from the legal system as a “vexatious litigant.” To me, this seemed like taking a cane from a blind man, since Irvine didn’t do much else but sue people. For Gary, it was like target practice for a budding Billy the Kid. He was growing up, and the world would hear about him.

WE’RE NOT GOING TO BANGKOK (OR ATHENS, MOSCOW, HAIFA, ETC.)

In the United States Federal District Courts, some judges are appointed by the President, confirmed by Congress, and serve for life. We call them “Article III judges” because their offices were established by Article III of the U.S. Constitution. Article III judges are not required to adjudicate the discovery squabbles that inevitably erupt in litigation. Federal Magistrate judges, who are not appointed by the President or confirmed by Congress, referee the verbal jousting matches between attorneys squabbling over what documents shall be produced, what witnesses shall be deposed, and what interrogatories shall be answered. The Magistrate assigned to hear discovery motions in our case was Patricia Trumbull.

On January 11, 2000, we had our first discovery hearing with Judge Trumbull. I had five motions on calendar that day, which is like serving the Judge five Big Macs at once. One is fine, two is too many, but for god’s sake, five! Still, it was the only thing we could do -- Cohen had barged into the discovery arena, demanded to use all the time deposing his witnesses around the world, wanted my client’s medical records because Gary said his medications caused memory problems, and wanted the records of two of his former trial lawyers -- Katie Diemer and Sheri Falco -- and one of his corporate lawyers -- Aaron Alter. When we filed our motions on November 24th, they effectively blocked all the depositions from going forward until the Judge made her decision, and although we would have liked the decision earlier, she was taking her time.

I didn’t think I was going to have a difficult battle on the motion for protective order to prevent the extraterritorial depositions. I thought Judge Trumbull would immediately perceive the entire stratagem for what it was, and grant a protective order. I was surprised when she led off with a mini-lecture about how this courthouse was very familiar with disputes involving international discovery, and there was nothing unusual about them. The suggestion was that, should it be necessary to take international discovery in a large-stakes Internet case, the parties would simply have to ante-up to meet the demands of litigation.

Why could I simply not attend the depositions by telephone, Judge Trumbull wanted to know? I had an answer ready: Because the whole case was about fraud, because the Sex.Com domain name had been stolen by use of a forged letter, because Cohen had been convicted of bankruptcy fraud and impersonating attorneys in the past, and because, most importantly, we could not trust Cohen to present witnesses who really were who he claimed they were. As I pointed out to the judge, “there could be anyone on the other end of the telephone.”

The judge had another question. “What good will it do you to be there?”

I told her I could “ask them for their driver’s license, and compare it with the person who was sitting in front of me.” This argument was successful. At the end of the hearing, the judge granted a protective order, telling Cohen’s attorney that he could proceed with the depositions wherever he wanted, but full videoconferencing had to be arranged for Kremen’s attorney at Cohen’s expense. In effect, the judge called Cohen’s bluff. Immediately after the hearing, Dorband told me that if he had to pay for videoconferencing, he’d just skip the depositions, and submit signed declarations instead.

So there we were, no trip to Bangkok, or elsewhere. And as for Gary’s medical records, we won that protective order too. Gary’s former lawyers, Judge Trumbull said, would have to submit to deposition, but as it happened, Dorband never followed up on them.

Thus, at great cost of time and energy, we were able to obtain a commonsense result. Courthouses are wonderful places to waste time in furious activity. On January 11th, that furious activity resolved itself into precisely the result I wanted: nothing. Cohen got no documents, no depositions, no medical records, and I got no diesel therapy. Sometimes just not getting smashed is a big win.

The subtler, but more important win occurred on the battlefield of Judge Trumbull’s mind. It is hard to convince a judge that your adversary is acting in bad faith. Judges presume that discovery devices are generally used for legitimate purposes, and that when a dispute kicks up it’s probably the fault of both parties. Winning with Judge Trumbull meant convincing her that I was wearing the white hat.

In written court filings, of the sort I sent to Judge Trumbull, I always led with Cohen’s criminal fraud convictions, and referred to “the forged letter” and the “stolen domain name.” Good trial lawyers control the language of a case by producing accurate sound bites that sell a concept in a short phrase. If a guy cheats people, call him a con-man! If no one disputes that the letter is a forgery, call it a forged letter! If property was taken from an unwilling donor without compensation, call it a theft! The subject of the case was blatant theft by deception, so I was justified in using direct language. Cohen’s act of theft was unconscionable, and righting the wrong was self-evidently just. This was not ordinary commercial litigation -- it was a civil prosecution.

For years Cohen was able to cynically deploy the legal system against Gary and many others, using the profits from Sex.Com, a fire hose of cash, to present a very aggressive defense, while cloaking his ruthless tactics behind a plea for fairness: “Sure, I’m an ex-conman, but I’ve paid my debt to society. Pornography is just a business, and I’m just a businessman.” To me it was a transparent tactic. I still had to sell that to the judges. At that hearing, Judge Trumbull began to see the first glimmerings of my vision, and a portion of her mind changed from Cohen territory to Kremen territory.

MAKING LEMONADE

We’re all familiar with the saying, “When life gives you lemons, make lemonade.” When my fax machine sprang to life, and started spewing out a lawsuit against Gary Kremen, alleging multiple tortuous acts, and seeking $9 million in damages, this was clearly an incoming shipment of lemons. This lawsuit was procedurally presented as a “counterclaim” by “counter-plaintiffs” Cohen, YNATA and Sandman Internacional. A counterclaim is no different in its effect upon the “counter-defendant” than a regular lawsuit, and gives the “counter-plaintiff” full rights of discovery and other procedural devices for wreaking havoc. As it was still spewing out of the fax machine, I called Gary and told him that Cohen was cross-claiming against him for $9 million for Defamation, Unfair Competition, and Cybersquatting. Then I had a question: “Gary, do you have insurance for your business activities?” Yes, he thought he did. I told him to fax me his policy immediately.

Gary may have had trouble finding some documents, but he had his State Farm insurance policies to me within hours. It looked very good. He had one policy for $1 million in coverage, and another for $300,000. They both covered slander, that is, defamation. I called Gary back with the happy news. We would be making lemonade, and State Farm was buying the sugar!

Of course, as the old adage goes, “there’s many a slip twixt the cup and the lip,” and State Farm might have very different ideas about springing for our lemonade party, but I knew once Gary understood the principles of insurance bad faith law, his burning sense of urgency would get us either a defense or a hell of a lawsuit against State Farm. Because insurance companies don’t always like to defend you when a guy like Cohen, worth maybe hundreds of millions, sues you because you called him a thief. Or they might not defend you very aggressively. The key to getting a good, vigorous defense, worth hundreds of thousands of dollars, is knowing the law of insurance bad faith.

I learned about insurance bad faith first from Steve Schiffrin, a much-published author on freedom of speech and the First Amendment who now teaches at Cornell Law School. Steve was brilliant, way too brilliant in fact to be fully appreciated by a classroom of 75 new law students lucky enough to learn basic tort law from a bona fide fucking genius. Steve was what you’d call pudgy, with thinning, sandy hair, and the complexion of a guy who rarely–if ever–goes to the beach. He was sweetly sarcastic, and enjoyed dealing legal propositions with a broad outward sweeping movement of his right arm, hand extended, palm upward, with a satisfied pursing of his lips, and eyebrows contracting to make the point.

Steve introduced us to insurance bad faith law as the place where the law of torts -- which deals with legal wrongs between strangers -- collides with the law of contracts, which deals with legal disputes between contracting parties. You often get more in damages for tort cases, where you recover the entire loss, including things like pain, suffering, and emotional distress, than in contract lawsuits, where damages are usually limited to the face amount of the contract.

Steve introduced us to the case of Crisci v. Security Insurance. In that case, an elderly Italian widow named Rosina Crisci owned a rental with a second floor walkup, which was insured by Security Insurance for $10,000. She also had a very hefty female tenant. One day the stairs broke and the hefty lady fell straight through, leaving her hanging in midair, which caused physical injury and a “severe psychosis.” She had no prior history of mental problems. The hefty lady’s lawyers sued the landlady, and Security Insurance appointed lawyers to defend Mrs. Crisci. The lawyers who Security hired scoffed at all of the plaintiff’s settlement demands, which started at $400,000, but dropped to $10,000, and even lower, to $9,000. Even though Security’s expert physicians predicted a verdict in excess of $100,000, the company offered only $3,000 for the physical injuries, refusing to pay “one cent” for the psychological injuries. Mrs. Crisci offered to kick in $2,500 if Security would pay the $6,500 difference between that and the final $9,000 demand, but Security rebuffed this opportunity as well.

The hefty lady went to trial and got the $100,000 trial verdict Security’s doctors had warned about. Her lawyers collected $10,000 from Security, the full amount of the insurance coverage, and then reached a settlement with poor Mrs. Crisci, who lost everything. As the California Supreme Court put it, Mrs. Crisci, “an immigrant widow of 70, became indigent. She worked as a babysitter, and her grandchildren paid her rent. The change in her physical condition was accompanied by a decline in physical health, hysteria and suicide attempts. She then brought this action.”

Mrs. Crisci sued Security for “breach of the covenant of good faith and fair dealing.” This “covenant” imposes a duty on the contracting parties to “do everything necessary to achieve the purposes of the contract, and nothing to defeat those contractual purposes.” The California Supreme Court held that the covenant of good faith and fair dealing was especially important when it comes to an insurance contract, because it is a contract for personal security and peace of mind. Thus, the court found that by rejecting a settlement demand within policy limits ($10,000 or less) when it was reasonably clear Mrs. Crisci would lose far more at trial, Security violated the covenant of good faith and fair dealing. Therefore, Security was subject to “extra-contractual damages,” that is, (gasp) the full $100,000 Mrs. Crisci got hit for at trial, plus Mrs. Crisci’s emotional distress, plus some punitive damages. This is now called “opening the policy,” and is justified on the grounds that it is the only way to teach insurance companies to not take risks with their insured’s interests, thinking “well, worst comes to worst, we just pay the policy limits.” Instead, they must settle every case as if they were going to have to pay the whole adverse verdict, for only then are they acting fairly.

During my first year at UCLA Law School, I completely missed the significance of Steve Schiffrin’s lecture on the Crisci case. But it became my daily bread at Mazursky, Schwartz & Angelo, where I worked on large claims, like Gary Lehto’s, who was rendered paraplegic when his car was rear ended by a car driven by a career drunk and owned by his drunken dad. Allstate screwed that case up when it refused to settle for the $25,000 policy unless Lehto gave a release to both father and son. Mr. Lehto’s final verdict was for $3.5 Million. An insurance company must treat these “over-limits” cases with the greatest solicitude, because if an insurance adjuster refuses to settle a multi-million dollar case for $25,000, Mrs. Crisci’s descendants may well have their way with the insurer’s assets.

At MS&A, we wanted them to refuse to settle. Sometimes we’d get a case on referral from other, no-name plaintiff lawyers who had been rebuffed by the insurers. When the adjusters saw MS&A on the case, their whole attitude would change. They would become eager to pay what had been out of the question before. My standard tough-guy response to these last-minute converts was, “In the future, always settle with a schmuck if you can. You missed your chance this time.”

Gary’s insurance policies for $300,000 and $1 Million were utterly dwarfed by the liability risk presented by Cohen’s $9 Million claim. Thus, even if Cohen only nicked Gary for a sixth of his total $9 million damages demand, it would exceed the value of both policies combined. You can see how that excess potential makes the risk of refusing to defend Gary one that State Farm would consider carefully. If Cohen got a $9 million verdict against Gary, because State Farm refused to defend him, Gary could sue State Farm for the loss, or even sell Cohen his right to sue State Farm. With this kind of leverage, the insurer must step up to the plate and defend.

The insurer then has one more decision to make -- whether or not to “reserve its rights.” By “reserving its rights” the insurance company says to its insured, “Okay, I’ll pay for your lawyer to defend this claim, but it may not really be covered under your policy, so I’m not promising to pay the verdict if you get hit, although I’ll defend you until then.” If an insurance carrier “reserves its rights,” their insured is actually benefited in two ways. First, the carrier must then pay for a lawyer, chosen by the insured, to advise the insured how to deal with the insurance carrier. Second, the insured also gets to pick their own lawyer for the main defense, rather than having the insurance carrier pick one of their “panel counsel.” So reserving rights can get expensive for an insurer.

State Farm at first denied coverage altogether under the $1 Million policy, and agreed to defend under the $300,000 policy, while reserving its rights. Thus, I tried to arrange to have State Farm retain the best First Amendment and speech law firm I knew of, Irell & Manella in Century City, Los Angeles. Irell & Manella thinks of itself as a firm that combines stellar intellectual firepower with a take-no-prisoners litigation ethic, basically promising to take your adversary on a rocket ride to hell. Actually, they are famous for delivering on this boast, and billing in a manner commensurate with their achievements. I clerked there when I was at UCLA, so I put a call through to partner Morgan Chu, who I figured was probably still representing ABC on speech issues. He put me in touch with his associate, David Codell, a 1999 magna cum laude Harvard graduate and a gem. David was interested in the case, so I started trying to get them onboard as Gary’s attorneys to defend against Cohen’s cross-complaint.

The plan to hire Irell & Manella was looking good until Jose Guillermo, the State Farm adjuster who had been assigned to the case, realized who they were and how much they charged. Their billing rates were way out of line with State Farm’s usual rates for insurance defense counsel. So State Farm withdrew its reservation of rights under the $300,000 policy. This decision was a no-brainer. Simple arithmetic. Better to be on the hook for $300,000 indemnity than pay for separate counsel, plus the cost of Irell & Manella’s rocket fuel. State Farm was then able to select one of its own panel attorneys, rather than have me make the choice for them.

State Farm hired Richard Diestel for the job. Initially, Rich was not taken with the case. I don’t think he had any intention of becoming involved in what he thought of as pornography law, and his involvement with defamation cases seemed neither deep nor extensive. However, it was my job to get him to spend abundantly from the great big bag of State Farm money, and Rich had an obligation to provide Gary with the best defense against Cohen’s counter-claims that could be mustered. It would not be long before he felt the sting of Gary’s emails, cell phone calls, and abrasive letters. He was in no way ready to start representing Gary Kremen in Cohen v. Kremen, but that had nothing to do with it. He was in the ring, Bob Dorband was in the other corner, and the bell had just rung. “Rich,” I told him, “you are going to make a lot of money on this case.”

WHERE’S THE DOGBITE?

Cohen bought himself a load of trouble when he alleged defamation against Kremen, claiming that Kremen had falsely called Cohen a thief by accusing him of “stealing Sex.Com” in an interview with WiredNews.com Magazine writer Craig Bicknell. The wonderful thing about having to defend a defamation claim, and having an insurance lawyer to help you do it, is that truth is a defense to defamation. Gary could win the defamation claim by proving that Cohen really had stolen Sex.Com. That’s how it became Rich Diestel’s job to prove that Gary Kremen was speaking the truth when he said Cohen had stolen the domain name. Cohen had created a two-front war. We now had two guns instead of one. Best of all, Diestel had an unlimited supply of ammunition and a directive to keep expending it until the threat of Cohen’s counter-claim was extinguished.

Still, Rich was a little slow on the trigger. While he wouldn’t ever really say it out-and-out, he must have been extremely uncomfortable with the case. His discomfort is perhaps best explained by a remark Rich made about how State Farm adjusters were reacting to the wave of Internet cases they were having to defend based on a simple homeowner’s insurance policy. Lots of tech businesses having been launched from bedrooms and garages, these cases generated a type of case load for the insurance adjusters that they hadn’t previously seen. According to Rich, when confronted with a case like Sex.Com, the adjusters were wont to ask, “Where’s the dogbite?” Rich was describing his own reaction, as well.

Rich likes simple stories. Simple stories like, “my client’s dog bit the neighbor’s kid.” The nice thing about a story like that is, it’s easy to investigate. You can find out that the kid was always torturing the dog, that he isn’t doing well in school, and that he stuttered even before he was bitten. You can get the kid’s medical records, his school records, and the dog’s veterinarian records. There is a limited universe of facts, a limited number of witnesses, and you can tell when your job is done.

By contrast, the Sex.Com story, being primarily the creation of Stephen M. Cohen, was replete with switchbacks and confusion, with more corporations than you could shake a stick at, with forged documents and prison records, and imaginary witnesses scattered over the globe. Cohen’s skein of lies frustrated Rich, even as it obsessed Gary. Rich thought it would be difficult to win using a trial story that was difficult to comprehend, let alone explain.

Before you sell your case to the judge or jury, you have to at least be able to sell people like Rich, who have been paid to agree with you. To sell Rich, I had to master all of the available facts, and render them in a simple, convincing story: “Cohen is a crook, he stole Sex.Com, and he’s hiding the money in a bunch of phony corporations.” Once I was able to articulate that story, and support it with documents and testimony, Rich bought it. What he bought even more was the fact that Bob Dorband, Cohen’s lawyer, was one of the trickiest rascals to ever walk up the courthouse steps. Bob tied Rich’s tail in a knot so many times that it made Rich furious toward the end of the case. That was when the lemonade really started flowing. Once Diestel was pissed.

Rich got along well with witnesses. I won’t say he got as much information out of a witness as I did, when we did depositions together, but I think witnesses generally tended to feel more comfortable with him. That was a good thing, because they would open up, and I could get more stuff. Rich was the kind of guy that you could stolidly share some hotel food with, while swapping the occasional war story, and cursing Dorband and Cohen. “That’s fucking bullshit.” That’s the sort of thing that Rich Diestel would say. He said it more often and with increasing conviction as the case wore on.

Diestel’s investigator, Phil Stuto, did some good work, too. He interviewed several of Cohen’s ex wives, and found a dying witness by the name of Arnaldo Peralta, whose name Cohen had forged in order to obtain Mr. Peralta’s “permission” to incorporate a California company with the name of Omnitec, since Mr. Peralta already operated a company with a confusingly similar name -- Omni-Tech. Stuto was also the only person to get a trip to the Islands out of this case. He seized his opportunity, early in the case, and promptly got his ass to the British Virgin Islands to check out Cohen’s phony corporations. He didn’t learn anything, but then again, it was never clear why he was going in the first place.

Once discovery reopened, Diestel gave us additional moral high ground with Judge Trumbull. Many judges are more sympathetic to a plea for more discovery from a defendant who is being pressed with the threat of damages. Somehow it seems unfair to allow someone to be sued for damages and prevented from getting evidence to prove or disprove those claims. So Diestel, in his position as Gary’s defender against a claim for $9 Million, had a strong interest in finding out just how Cohen had incurred those damages. As lost profits, presumably. To verify those, we needed to see financials. Since Cohen had no intention of producing any accurate financial documents, our strategy was first, to file motions to compel production of documents and attendance of witnesses, second, to attempt to enforce those orders, and third, to file new motions to compel compliance when Cohen inevitably failed to comply. A judge can only tolerate so much disrespect of her orders. With both Diestel and myself filing motion after motion, it wasn’t long before we were regularly able to recount an increasingly familiar tale of woe to an increasingly sympathetic Judge Trumbull. We gained momentum as the judge resolved one discovery battle after another in our favor. As we banked each victory, we had the piles of paperwork, the airline tickets and deposition expenses, the sixteen hour days to show we’d paid for each order dearly. In litigation, there is no substitute for pushing ahead aggressively in discovery. Diestel shared that burden with me like no one else.

Throughout the case, it was good to have a dignified guy like Rich Diestel standing there, employed by the most legitimate entity in the world, an insurance company, denying everything, admitting nothing, and insisting that he’s going to get a complete dismissal of all claims. That stuff really cuts some ice with judges and juries, even when it’s a bad case. And when a guy like that is plainly in the right, he is unbeatable.

In this case, Diestel was blessed with luck. He didn’t have to compromise one damned thing. He participated in the total defeat of Cohen’s position in a case that will impart a flavor of the exotic to his entire career. You wonder what could ever make him want to go back to doing dogbites.

RENT-A-NERD

Henry Ford once made a comment about experts. It happened when he sued a man for slander who had said he was ignorant. Trying to prove that Ford was in fact stupid, the lawyer pressed Ford about some obscure point of history or science. Ford shot back that he saw no reason to clutter his mind with that type of information when he had “a row of push buttons” on his desk, pushing any one of which would put innumerable experts in all areas of human knowledge at his fingertips. If that was ignorance, then, well, he was stupid. You can imagine he got the better of the argument with the jury. To possess experts at your command, apparently, is better than to know something yourself.

We needed an expert. Gary found one. Affectionately, I call her a nerd. Ellen Rony is never so comfortable as when she has her Apple notebook computer on her lap, sitting in her solarium, culling through a few hundred emails from the friends in her vast global community. She corresponds with the luminaries of the Internet universe. Even the fearsome Phil Sbarbaro, longtime lawyer for NSI, called her a friend. Well, of course that was before he’d threatened to cut off her toes, but what’s a few digits between friends? No, Ellen might look like any other single mom with a dog in a suburb north of the Golden Gate Bridge, but the sleek profile of her pampered BMW suggested she had potential as a litigation weapon.

Ellen was the author of the Domain Name Handbook. Gary got a copy of the book for me, which comes with a CD-rom. Ellen was an Internet buff who had gotten so into chronicling the history of NSI that she actually had stuff saved off their old web pages that couldn’t be found anywhere else. This made me aware of something I had been worrying about -- the evanescence of the Internet record. The thought immediately casts an Orwellian shadow across the mind. Ellen Rony brought me face to face with the fact that the Internet had completely eliminated the need for the cutting and pasting department that was a necessary part of the Newthink/Newspeak system in the novel 1984. In Orwell’s novel the future was routinely rewritten, but the paperwork was immense. Entire newspapers had to be rewritten and reprinted, archived for history’s sake, then revised again. I remember in reading the novel that the very cumbersomeness of the process comforted me, as I thought that it would be impossible to accomplish that kind of historical revisionism. The paper record was a bulwark against it. And here, the Internet had destroyed one more barrier to deception, dissimulation, and alteration of the historical record. Truly, if corporations control the Internet, history is in unsafe hands.

Ellen’s book is not the sort of thing you would ordinarily find piling up next to my bed. Even if I want to study cyberspace, I’d rather read cyberpunk science fiction and see what rubs off that way. Ellen’s book had some good facts in it. Mind you, none about Sex.Com. The only mention of Sex.Com in Ellen’s book mistakenly states that it was originally registered by Cohen’s company, Sporting Houses Management Corporation. However, Ellen could not be faulted. She took the information directly from NSI’s website. According to Ellen, NSI should have listed Kremen as the original first-time registrant, with Sporting Houses Management coming later. For some reason, NSI deleted Kremen’s registration so completely that all records of the original registration were obliterated. Orwellian, again.

After reading a few chapters of Ellen’s book, I found some useful stuff. Particularly I liked her clear and simple statement that the term dot-com had been invented by John Postel in 1984. This was useful in debunking a defensive claim that Cohen had engineered using the trademark laws to validate his theft of Sex.Com. Cohen claimed he acquired a trademark in Sex.Com by “using it in commerce” since 1979 as part of a computer bulletin board operation. So citing Ellen’s book enabled me to argue early and often that Cohen’s claim was absurd, since “dot-coms hadn’t even been invented in 1979.”

Gary and I first met Ellen at a little restaurant on the water in Sausalito. Gary comes from the don’t drink at lunchtime ethic, but with the bright afternoon sun shining off the water, the three of us enjoyed our drinks. I forget what Ellen had, but it was something fruity and festive. I presume I had a Bloody Mary, your standard alcohol breakfast. My modus operandi with Gary was to back him up in all his flamboyant assertions about having lots and lots of money, to look well fed and well tended, and ask a few good questions. We wanted to recruit Ellen for our team because, as I repeatedly told her, she was the only person who could lay claim to being a published authority about the history and operation of NSI.

As with many a person, we were able to forge an alliance with a legitimate mainstream authority because we had taken the moral high ground. We circulated the third amended complaint widely to journalists and industry people like Ellen. Right there in the document Gary declared he was not a pornographer, and his site would not have been what Sex.Com had become. Gary enjoyed pitching this concept to Ellen, and his charisma caught fire as he did so, making him genuinely charming. His site would have been a far more wholesome, high-minded affair. This had an important effect on Ellen, who has a young son, Alexander, and hadn’t given much thought to pornography prior to our meeting. Gary’s presentation put her mind at rest, allowing her to concentrate on her field of expertise -- explaining exactly how Cohen had managed to get NSI to transfer the name, and why that was every bit as much NSI’s fault as it was Cohen’s. At first, Gary paid Ellen, but eventually, State Farm started picking up the tab, because after all, we couldn’t prove the case without her.

NSI, SORCERY, AND I

The practice of the trial arts can be analogized to sorcery, which allows us to see the marks left on the modern lawyer’s psyche by the medieval mold in which it was forged. The witch trials were, first and foremost, trials. The prosecutors who conducted them were priests. All the participants in those charged events were involved in a web of supernatural projections, but the influence of rationality was also felt. Much of the same dynamic inspires modern courtroom action, hidden beneath a veneer of modernity.

The courts use special language to inspire solemnity and add weight to the process. Papers are not merely mailed or delivered, they are “served” on the opposing party. One doesn’t simply start a lawsuit, one “commences the action.” Once started, the proceedings continue until “judgment.” Judges often refer to themselves in the third person, delivering rulings in the capacity of “the Court.” In many courts, lawyers are expected to show an exaggerated politeness, a courtly style if you will. There is still room for the use of an apt Latin phrase in argument before a judge.

Seen as sorcery, the trial lawyer’s filings with the court operate as spells to destroy the foe. For the lawyer as sorcerer, the defendant is a demon who must be “summoned” and thus brought within the “jurisdiction of the court” that can pass judgment upon him. Until the lawyer places a person under the court’s jurisdiction, he relates to him just like anyone else. Once a lawyer establishes jurisdiction over someone, he may deal with that person using the power of the court. Using that power, a lawyer can dispossess a person of their property, detain and imprison them, end the bonds of matrimony, sentence to death and otherwise modify the earthly relations of the members of our society. The business has very little to do with kindness and much to do with compulsion.

In criminal prosecutions, the prosecutor establishes jurisdiction over the defendant by arresting him. The act of arrest establishes the court’s authority. In civil cases, the formal service of the summons and complaint on the defendant establishes the court’s jurisdiction. After jurisdiction is established, the defendant is held in a magic circle, and ignores the court’s directives at his or her peril. When thinking as a sorcerer, all cases are magical contests, and all procedural devices are viewed as spells. A motion to dismiss, for example, is a “terminating spell,” as is a motion for summary judgment.

If you go about summoning demons and putting them under the court’s jurisdiction, you quickly learn they don’t like it. They try to break out of the magic circle in which you’ve confined them. They curse at you. The complaint is the first spell where you allege that the demon committed certain wrongs that the court is bound to redress. This spell must be constructed to meet formal requirements. The lawyers for the demons (defendants) often first move to dismiss the complaint on pedantic grounds, using legal erudition to argue that the complaint does not recite the “elements of the claim” in the proper fashion, or that it has been filed too late, or that this demon is immune to that spell. The beginning of adequate plaintiff-side sorcery is building an excellent complaint that will hold even a nasty demon. A good complaint anticipates some defenses that will be raised and heads off objections. Thus, when the inevitable motions to dismiss arrive, the plaintiff sorcerer can defend the complaint with arguments thought out before the complaint was even filed.

NSI didn’t bother with motions to dismiss like the ones that Cohen hurled at Gary’s first four complaints. NSI did what classy defendants do–it filed an answer to the complaint, saving its thunder for the Big Kahuna, the Motion for Summary Judgment. When I first went to work in the trenches of sorcery as a young apprentice, it was commonly said that motions for summary judgment were rarely granted. This no longer seems to be true. Years of tort reform rhetoric has made judges more willing to terminate cases and free civil demons who in the past would have been required to stand trial. Particularly in the Federal courts, a Supreme Court case called Cellotex gave federal judges a shot of testosterone that made them more willing to dismiss lawsuits at summary judgment. NSI is a big winner under this policy change. As of 1999 NSI had won virtually every lawsuit against it via summary judgment, which made about eighty wins in a row. So I was not looking forward to receiving NSI’s motion for summary judgment.

NSI filed its motion for summary judgment in mid-December, 1999. NSI’s take on the case was simple. NSI admitted that Gary had been the first to register the domain name. NSI admitted it had transferred the domain name to Cohen, in response to the October 15, 1995 forged letter that appeared to be from Online Classifieds, Inc. However, NSI claimed it “did not know anything about Ms. Dimmick’s relation with plaintiff,” and thus had no idea that the letter was forged. NSI also argued that Gary didn’t have a contract with NSI, because Gary had paid nothing for Sex.Com, and “the domain name registration application is... devoid of any language indicating any expectation of a quid pro quo.” NSI also argued that since domain names were “not property,” Gary had no rights to the name arising separately from contract. Thus, argued NSI, Gary’s problem was with Cohen, and NSI should just be dismissed from the case. As spells go, NSI’s motion for summary judgment had very good prospects for getting the nod from the judge, the arbiter of our magical contest.

When the dark cloud of summary judgment looms, however, and things look bleak, the plaintiff sorcerer initiates a two-fold course of action: (1) Buy time, and (2) Build the record. Thus, the first and most important spell after filing complaints is the “time spell.” One must deprive an opponent of the pleasure of making things happen on his or her schedule. And one must free oneself of the pressure of working on a deadline imposed by the other guy. If bad things are about to happen, your first battle cry is, “Not now!” Later you will have time to build the record, write your arguments, and organize your evidence.

As soon as I got the motion from NSI, I looked it over to learn what new, additional facts I didn’t have that would enable me to defeat the motion. I then wrote Dave Dolkas, NSI’s counsel of record, a letter asking him for an extension of time to oppose the motion while I gathered those facts through discovery. Naturally, he wouldn’t give me the extra time, so I filed a motion under Rule 56(f), asking the judge to give me more time. I wrote a skeleton of what my bigger opposition would be, mainly emphasizing how much I needed to get these additional facts that I didn’t yet have, and thus my need for more time. Under 56(f), the judge is basically always supposed to give you that time.

Usually, when you file a 56(f) motion, the judge will just reschedule the hearing on the motion for summary judgment so you can complete the discovery you claim will enable you to prepare the opposition. That had been my uniform experience up until this case. However, this time, something new happened. Judge Ware kept the hearing on NSI’s motion scheduled for January 24, 2000, and scheduled my motion for more time to be heard at the same time. This meant that on January 24th, the judge could either give me more time or grant NSI’s motion for summary judgment.

On January 24th, I stood in front of Judge Ware. He was very pleasant, but got right to the point -- he didn’t see how he could hold NSI liable if its people were duped by Cohen’s forgery. Judge Ware likes to question the advocates. He asked me whether the letter was a forgery, and whether NSI was taken in by Cohen’s deception. I answered that the letter was a forgery, and that NSI may have been taken in by it, but there was some evidence to indicate that NSI conspired with Cohen to aid in the theft of Sex.Com. Judge Ware asked what evidence that was. I felt like I was standing in front of locomotive that was just pausing briefly before running me over. Well, I told Judge Ware, there was a man named Lee Fuller in Riverside, California, who told me Cohen had told him “he had a girlfriend at NSI, and he could get any domain name he wanted.” Judge Ware questioned further. Had I spoken to this Lee Fuller myself, directly? Yes, I confirmed, I had. I felt as if the locomotive shifted into neutral, although its engines were still throbbing, while I held it at bay with a slender reed. Because of that slender reed, Judge Ware said he would give me more time to conduct discovery into whether “the domain name Sex.Com was not transferred by Network Solutions in the normal course of business.” Part one of the twofold strategy was complete -- I had more time. Now for part two -- building the record through discovery. Judge Ware could help there, too.

Remembering Judge Ware’s willingness to order Gary to resume his hastily adjourned deposition, I asked Judge Ware to allow me to take the depositions of appropriate persons at NSI. Judge Ware questioned further. Who would I depose, and what would I ask? I would want to question the human resources manager of NSI, at least, I said. No, said the Judge, he wouldn’t allow me to pry into the sex lives of people at NSI; however, if I wanted Cohen’s deposition, Judge Ware volunteered, he would order that to take place. I could hardly believe this was happening. Dorband had been stonewalling on producing Cohen, but I hadn’t filed a motion to compel him to appear at deposition, and here the judge was just offering it. Yes, I responded, I wanted to do that, and an order would be a big help. No problem, said the Judge. Where do you want to take the deposition? San Diego, I responded. Fine, said the Judge, and he ordered Cohen to appear for deposition “at the Edward J. Schwartz United States Courthouse on February 3, 2000 at 9:00 a.m. for a deposition” covering “any matters pertaining to this litigation.”

Judge Ware gave us until February 14, 2000 to file an opposition to NSI’s motion for summary judgment. That gave me just shy of three weeks to prepare for and depose Cohen, prepare an expert declaration from Ellen Rony, and build my record in opposition. When I left the courtroom, I could still feel that locomotive idling on the track, waiting to resume its advance.

TO THE COURT OF PUBLIC OPINION

I’ve made a few speeches on courthouse steps, and always been dissatisfied with the results. Reporters never seem to agree with me about what is important about the case. The best policy in dealing with the press is to formulate a sound bite that is witty enough to be quotable, and coherent enough that they can’t cut out a part and distort it. In Southern Oregon, I tried to sound folksy, as well. When a reporter for a Medford television station asked for a quote about a victim’s rights initiative, I said: “It’s kind of like a TV dinner. Some parts of it look pretty good, and other parts you wouldn’t feed to your dog, but when you read the ingredients, you don’t want any of it.” This was quoted accurately and completely by the TV news, the Portland paper, and the local paper.

Gary was eager to do a press release. He thought it would win the case if enough people realized that, as Gary put it, “the guy stole it!” He believed NSI would be impelled by public opinion to return Sex.Com. That seemed an unlikely result to me, but I didn’t oppose doing a press release. The case was news, and I had a legitimate legal reason for wanting to provide notice to the public that Cohen didn’t lawfully own Sex.Com -- I didn’t want him to be able to sell it to an “innocent buyer” who could then try to claim “bona fide purchaser” status, entitling the “BFP” to retain control of the name. Cohen was already making that argument with respect to the corporate alter-ego defendants, YNATA, Ocean Fund, and Sandman Internacional. The more people that knew Sex.Com was stolen, the less tenable it would be for Cohen to stage a BFP defense with new “innocent buyers.”

I hired a friend to help me put together an email list of high-tech reporters, and together we wrote an email press release of several pages, detailing the essence of the case as we knew it. The release accused Cohen of stealing Sex.Com, and announced that he was a convicted felon who had served time in Federal Prison. Just a couple of days before Cohen’s February 3rd deposition, I hit ‘send’ on my email and fired the press release off to a list of around thirty reporters. The reverberations of that act would be felt for some time.

STEPHEN MICHAEL COHEN

On February 3, 2000, I woke up in my favorite hotel, the Hilton Torrey Pines, San Diego. Every time I go there, it is blessed with the same fresh smell of sea air, the sound of rolling waves gently sighing somewhere out beyond the balcony in the warm light. The rooms are homey and modern, in cool, well-matched colors. The air is fresh with the scent of huge eucalyptus trees. I was glad Gary had gotten to be a millionaire. The last time I stayed at the Torrey Pines was ten years before, when I tried my first case, so it had nostalgic associations. It was a good place to start a hard day. A Sikh drove me to Beth Ballerini’s court reporting office on Kettner Boulevard, where the tough part began.

There was Dave Dolkas, with a goatee and a laptop, and Bob Dorband looking fresh-faced and unflappable in his shirt sleeves, settled in behind the conference table, ready to rock. Bob Dorband is a charming man, not very big, with a full head of white hair that appears not to have gone grey so much as to have been chosen in precisely the same color as Mozart’s wig in the movie Amadeus. And while Dorband has never displayed Tom Hulz’s trademark manic Mozart laugh, that high-pitched yip that cracked up whole audiences the world over, Bob Dorband’s speech pattern does resemble the warm, convincing tone Mozart would use when he stretched the truth. Insidious, bedeviling, a tone to set your teeth on edge. Bob has a way of presenting his position so well that you feel foolish opposing him. Your own position starts slipping away like teflon under your fingers. He gives you argumentative vertigo.

And there, to my right as I walked in the door, at the head of the eight foot conference room table, sat a man with an incredibly ugly tie. The man with the very ugly tie also wore a very satisfied look. The look was one of those embryonic grins that seems about to gestate rapidly and cover the entire face with a giant smile of satisfaction. It was one of those looks that seemed to say, “C’mon, you’re dying to know what I’m smiling about, so ask me.” The smile was on the face of a good-sized Jewish man who overall looked humpty-dumptyish, although not grotesque, but more Bob Hoskinsy. And with a Bob Hoskinsy close-cropped haircut. Hoskins could probably do this role perfectly. Just cut the English accent, flatten the tone so it drops back in the throat, and blur it over with an American accent somewhere between Jersey and Newport Beach. It is a voice that lays out just the facts, ma’am. It is a voice that says he is not here to screw around, that he is too big for that, and that we should just get this over with because it’s a joke. The tie was red and black, pure strawberry red, India-ink black, with pleats in it. That tie was like the last thing a bug sees before it gets squashed flat by a flyswatter. I was not among friends.

Except Rich Diestel. And of course there’s Beth Ballerini, the proof of God’s mercy to the numerous San Diego attorneys who patronize her, no doubt because of her absolutely unfailing good cheer, casual blonde ambition, and total accuracy in preparing deposition transcripts. And meet the videographer, Jerry, a bit of a silver-haired guy who’s seen it all, most recently from behind the lens of a large legal videotape unit with dials and a backup videotape, provided courtesy of State Farm Insurance. Gee, I guess we’re all here, so we might as well start.

Right after Beth swears Cohen in, Dorband starts with a sort of soft left jab. “Charles, before we begin.”

I respond, “Sure.”

Dorband: “I’d like to bring up something that came to my attention yesterday, which was the filing of a press release apparently that came from your office. And are you acknowledging that there was a press release?”

Backing up, elbows forward, gloves high, I respond, “I’m not here to answer questions, Bob -- What’s your concern?”

Just getting wound up, Dorband starts with the body blows: “The timing of the press release was highly suspect. It happened the day before Mr. Cohen’s deposition.... The fact that this press release was issued I think is highly unethical and improper and an attempt to disturb my client’s ability to testify at the deposition today.”

Ouch! Unethical. I hate that word. It always means that things have become intensely personal. For unethical conduct the Bar can yank your ticket, pull your card, take the “esquire” right off the end of your name. And there was no doubt that playing with the news media put you right into an area where ethics could be an issue. I’d come out of prior media encounters with no more mishap than being misquoted, misinterpreted and subtly maligned. I hadn’t really thought it would be any different in this case, which was of course willfully stupid, because Cohen had already cross-claimed against Gary for defamation with respect to the Wired article. What was I thinking? Without realizing it, I was taking risks I’d never planned on, like a cabbie who gets caught up in a chase scene in some crazy movie, and ends up driving like Dale Earnhardt on his last lap, all because someone said, “Follow that car.”

But I’m not thinking about ethics for long. At that point, it’s a little bit after 9:00 a.m., I’m jack-full of Starbucks Americano, the judge told Cohen to be here, so he wouldn’t dare try and walk, and I’ve got to make this work.

Dorband lays out his proposal: “We will proceed with the deposition. If there are questions of a personal nature that my client feels uncomfortable in answering, we will reserve our rights to answer those questions at a later date after the judge has been able to rule on whether we can trust that the information that is going to be given in this deposition and in this proceeding will be kept confidential.”

Although Dorband didn’t have the right to demand confidentiality for this presumptively public proceeding, my back was against the wall. I had to get Cohen’s testimony, or all of the expense of flying to San Diego, and most of the advantage of having Judge Ware order the deposition to take place at all, would be lost. So I cut the deal. It would all go forward under wraps.

I felt like I was in a boxing ring. I am no boxer, being more of a tuck and roll Aikido type myself, but my dad was a professional boxer in his late teens and early twenties until a bout with TB forced him to hang up his gloves. His aggressive drive to compete in multiple weight-classes weakened his health. He told me he could lose or gain up to 20 pounds in a few weeks time. In the end, he said TB was a blessing. Good thing he caught it, or he’d have ended up like those other old Mexican boxers we’d run into on Sunday morning, shopping for tortillas and menudo in Phoenix. He’d point out a fellow with a loping stride and a slightly foolish grin and say, “Ring a bell next to that one and he’ll put up his dukes, asking ‘where’s the fight?’” He loved the sport and skill of boxing, but regretted its human toll. From this perspective, he taught me his fundamental rules -- keep your guard up, use lots of short jabs and very few big swings, and train for endurance so when you need to, you can outrun the other guy and the clock. Above all, avoid hits to the head. My dad sat in the back row during my first trial down in San Diego. On February 3, 2000, he was in a nursing home, silent among his 90 years of memories. I would fight this one for him.

The bell rang. I stepped forward from my corner, my father’s cautious voice in my ear. Cohen sat smirking, his bulk a silent challenge. He wasn’t here to box. He was a sumo wrestler with tentacles. He wanted to wrap one of those long sucker tentacles around me, lock me in stupid wordplay, make Beth’s fingers type endless bullshit, and squeeze the life out of my expiring body. Out of breath, out of words, my lifeless corpse would float to the surface. I could see that fate looming before me, to be left like flotsam in the wake of a remorseless con man who was absolutely detached from any personal issues I could affect. Cohen was above the fray. Dorband was just security. I was a nuisance, being evicted from a place I didn’t belong. Contempt rolled off Cohen like fog off the slopes of a mountain. Like a mountain, he shrugged at the insignificance of it all.

Cohen was what Francis Wellman calls “the perjured witness” in his book The Art of Cross-Examination. Wellman advises fast questioning to trip up the liar, because he “can’t make up lies as fast as you can make up questions.” To ask questions fast, you have to know what you’re going to ask. You need a list of questions. But if you put together a questionnaire, you may not listen to the answers you’re actually getting. If a smart witness understands that you’re working off a questionnaire, and you fail to explore the details of areas before moving on, they realize they can keep things from you, and you won’t notice it. They start to nod along with you, allowing you to believe what they want you to believe, knowing that once they get through an area, you are not likely to return to it. So a deposition is not conducted like an oral questionnaire. You must stay loose, and adapt your questions to the rhythm of the witness. One way is to hook your next question to their last answer. You do it like this:

CARREON: “Does he work with a firm?”

A. “Yes.”

CARREON: “Which firm is that?”

A. “Hochman & Cohen.”

At first, the witness has to go along with it to get your rhythm started. But the rhythm feels safe and harmless. Since the witness is on the other side of a push-me-pull-you setup, they feel somewhat in control. They relax, you can begin to take advantage of it, pulling harder here, pushing harder there, without engendering too much resistance. Pretty soon you are sawing through the facts, and with luck your adversary is going along with it, lulled by the fact that his client appears to be okay with it. That’s how it’s supposed to work.

With Cohen, of course, nothing works right. Take this typical piece of questioning about Ocean Fund International:

CARREON: “What ownership interest did you have in Ocean Fund International?”

COHEN: “Stock.”

CARREON: “How much?”

COHEN: “I don’t recall.”

CARREON: “Were you the majority shareholder at any time?”

COHEN: “No.”

CARREON: “Who was the majority shareholder?”

COHEN: “It’s ambiguous.”

CARREON: “It’s ambiguous? What part of majority don’t you understand?”

COHEN: “What part of time do you not understand?”

CARREON: “When Ocean Fund was created... the approximate date?”

COHEN: “I can’t even do that. I think -- I believe it was in the year 1996 or -- 7, but I’m not quite sure.”

CARREON: “Did you have to sign any papers in order to participate in the creation of Ocean Fund International?”

COHEN: “I probably did.”

CARREON: “And do you remember what the nature of those papers was?”

COHEN: “No, I do not.”

Cohen used my speedy rhythm to short-change me on information. As I learned things, I had to backtrack and pick them up and restart my questioning. Ordinary witnesses usually try and make the truth plain for you. Their biggest problem is mixing what they know with what they believe. Usually they know a lot less than they think they do, but they are so confident of the truth of it that they’ll just throw their whole story in front of you. You can pick out the pieces of hearsay, opinion and prejudice, leaving the diminished resultant facts for your use. An honest witness will fill you in on the who, where, what, why and when with a rounded, all-encompassing response, but I got none of that from Cohen. Check out his smooth denial here, where he claims to own no portion of several companies which are all owned by his offshore holding company YNATA:

CARREON: “Tell us what you know about what YNATA Corporation owns in terms of interests, financial interests in other corporations, please.”

COHEN: “Other than the corporations that I have listed which were Omnitech International, First City Financial, Sandman Internacional, Oceantel, those are the companies that I am aware of.”

CARREON: “Do you have any ownership in any of those companies?”

COHEN: “No.”

If an average witness had once held stock in these companies and later sold it, he would say so straight out. But Steve made me dig it out of him:

CARREON: “Have you at any time held an ownership in any of those companies?”

COHEN: “Yes.”

CARREON: “Which of those companies did you have an ownership interest in at some time.”

COHEN: “All of them.”

So now I just have to find out when he sold the stock, and then we’ll work our way back to when he bought it. Witness my attempt:

CARREON: “When did you cease to own Ocean Fund stock?”

COHEN: “1999.”

Great, I found out when he sold it. Now to just find out to who, and for how much.

CARREON: “Who did you sell it to?”

COHEN: “I sold it back to the corporation.”

CARREON: “For how much?”

COHEN: “I’m not sure of the exact amount.”

CARREON: “Can you please give me an estimate?”

COHEN: “No.”

When faced with an inability to estimate, a lawyer tries to help by holding up a “yardstick”:

CARREON: “Can you please come to the nearest $10,000?”

COHEN: “No.”

CARREON: “Nearest $100,000?”

Dorband interjects: “You don’t have to guess.”

Cohen takes the hint: “I’m not going to guess.”

CARREON: “I’m not asking you to guess. You can’t come to the nearest $10,000 and you can’t come to the nearest $100,000; is that correct?”

COHEN: “Yes.”

CARREON: “That would require you to guess. Can you come to the nearest $500,000?”

COHEN: “Yes.”

I’m thrilled. I’ve got the “when,” the “who,” and I’m about to get the “how much” to the nearest 1/2 million, (it’s gonna be a big number), so the shell game is almost over. I point at the shell with satisfaction:

CARREON: “And can you please give me that number, your best estimate?”

COHEN: “No.”

CARREON: “And why is that, sir?”

COHEN: “Because there’s a confidentiality agreement between myself and the other parties.”

Cohen grins as he lifts the shell, revealing nothing, and scoops up the winnings. It was like trying to hit an enemy in a nightmare. My punches felt weak and horribly ineffectual. If we’d been in trial, the judge would berate Cohen for his uncooperativeness, and the jury would dock him points for arrogance. But it was only a deposition, and lawyers are expected to extract facts in the face of resistance. When they fail in the effort, it can be pathetic. I remember hearing Oliver North humiliate special prosecutor Arthur Liman during the Iran-Contra hearings. North disarmed Liman simply by admitting he had lied under oath previously, while insisting that he was telling the truth under oath at the time. Usually, contentions like North’s fall flat, indicting the witness as a perjurer and undermining all credibility. But North was a gifted liar, and his justification -- that he’d lied to fulfill his patriotic duty -- will go down in history as one of the most successful public shellackings a lawyer has ever received at the hands of a felon. Voice choking and eyes watering, North convinced a nation of gullible viewers that lying was virtue and admitting it now was proof of his bravery. The lie slipped from Liman’s grasp, and further efforts to pin North down were, as they say, like trying to nail jello to a wall. Due to this performance, North was spotted as a promising Republican talent, and made his run for Congress.

Cohen’s deft economy in dispensing the truth, and his ability to entomb each needle of fact within a bale of misleading hay, should qualify him for some kind of position in government. He had a perverse grasp of corporate law, and an amateurish willingness to exploit the complexities created by multiple, overlapping corporations. In Cohen’s universe of puppet companies, nothing was what it seemed, every sleeve had a trick up it, and there was always another wrinkle to be explored.

Ultimately, Cohen’s testimony about his shell corporations became unbelievably tangled and incomprehensible, simply because his deposition was taken so many times that his lies became absurdly complex. In the end, Francis Wellman was proven right, except it wasn’t so much that Cohen couldn’t make up answers as fast as we could make up questions, but rather that his ability to make up credible lies diminished as he told more of them. Even as the contradictions became more numerous and blatant during depositions that continued in July, August, September and November, Cohen would never admit to having lied. He would just shake his head patiently once again to explain precisely how we had misunderstood him. He moved, as we say in the vernacular, from dazzling us with brilliance to baffling us with bullshit.

Near the end of the case, Cohen’s construct of lies became an absurd machine, a demented battle android half shot away by enemy fire, able to do little more than limp forward with hard-wired sincerity, entreating, “You do not understand... repeat... let me explain...” But on February 3, 2000, at around 10:30 in the morning, that battle droid was in fine form, and my punches were landing on solid armor.