Re: The Sex.Com Chronicles, by Charles Carreon
Posted: Fri Jun 13, 2014 1:41 am
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.
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.