THE HAIL OF LEAD
As I mentioned earlier, Gary liked the fact that I carried around the “Art of War.” This book confronts the most difficult problem for a military strategist -- how to make people fight. Sun Tzu was well aware that soldiers are mostly just peasants in uniform, who don’t really want to get up one morning, march off to distant lands, leaving their wives, children and crops behind unattended, so that they can risk life and limb while trying to kill other peasants and burn down their villages, all for the apparent benefit of a lord who lives in a castle. Thus, Sun Tzu’s book is full of strategies about how to get people to fight, how to move them into a position where they have no choice, and how to give them the courage that is necessary to win. Soldiers lose courage when there are no victories, and lose resolve when the war drags on too long. As Sun Tzu says in one chapter, “I have heard of some campaigns that were clumsy and swift, but I have not heard of any campaigns that were lengthy and skillful.”
One evening in Gary’s apartment I was reading to him aloud from another strategy classic, Clausewitz’s “On War.” I came to a section where Clausewitz explained that, in order to induce surrender, it is necessary that every day bring the opponent news of a new defeat, and that there be no end in sight to the daily drumbeat of failure. Gary quickly seized this idea, and translated it into “Every day has got to be a bad day for Cohen.”
I coined the term “hail of lead” to describe a process of sustained attrition dedicated to two purposes. First, to build a favorable record of legal victories with the discovery judge. Second, to keep Bob Dorband so busy he couldn’t do discovery against us. To accomplish these goals, I deployed every weapon available in the discovery vault -- document demands, depositions, interrogatories and requests for admissions. Still, I needed Cohen’s help to make the strategy effective because when a party complies with discovery, it’s not as good a weapon, since there’s nothing to see the judge about. But if a party is non-compliant, like Cohen, and you can keep hauling his lawyer in front of the judge repeatedly, you can build a record of noncompliance, and even get the case dismissed. But the process is labor-intensive.
Victory in discovery is a multi-step process: first you send out the demand for discovery, second you follow-up with a series of letters and phone calls to show that the other guy isn’t responding, and third, you file a motion with the judge to compel them to comply with your demand. That’s like breaching the walls of the castle. Then there are three more steps, analogous to storming the breach, overwhelming the defenders, and securing control. The opposing party tries to plug the breach by filing an opposition, where he explains that his client is acting totally reasonable in refusing to respond to this ridiculous discovery demand. You go mano-a-mano now, writing and filing a reply brief to rebut these opposing contentions. Finally, you get to the hearing and ask the judge to declare you the victor. Since the rules of discovery are pretty liberal, you should almost always win. If you can’t get good at this game, give up civil law, because the good documents don’t come easy. In fact, give up trial law altogether, because unless the other guy is a total bumbler, you’re going to discover nothing that he doesn’t want you to. But if you get good at it, you will have the power to make every day a bad day for the other guy.
Now for the other purpose of the hail of lead: to keep Cohen out of our business. There were witnesses we didn’t want Cohen to contact, documents we didn’t want him to see. Most of these witnesses and documents pertained to the time period after Gary registered the name in May 1994, and before he filed suit in 1998.
When Gary registered Sex.Com, it was almost a lark. The sort of thing one nerd would say to another: “Guess what I did today? I registered Sex.Com with the Internic.” Standard response: “Good move, dude.” Net dollars earned: zero. It was that sort of thing. Gary didn’t see Sex.Com as a moneymaker in 1994, or he would have put it to work. How did Gary plan to make money in those days? He was one of many Stanford MBAs angling for venture capital in the boardrooms and computer labs of the Bay Area, where a saleable idea could garner millions in investment dollars. Using Online Classifieds, Inc. as his business moniker, Gary registered domain names for things other than sex, like Autos.com, Classifiedads.com, Jobs.com, and that sort of thing. Gary paid $2,000 to buy Match.com to create a dating site. An article in Forbes, the so-called “capitalist tool,” gave Gary a full write-up, showcasing him as a wunderkind whose bright idea could turn the profitless Internet into a cash proposition: present the classified ads section of your daily newspaper as an online product, and take bread right out of the mouths of Hearst Corporation and Rupert Murdoch. In 1994, this kind of bold idea launched careers.
Gary’s career had been launched. Online Classifieds, Inc. morphed into Electric Classifieds, Inc. With his Stanford degree and high-tech friends like Kevin Kunzelman and Peng Ong, Gary was able to garner venture capital financing from big names like Ron Posner, even roping in Aaron Alter of the famous Wilson, Sonsini law firm to do the corporate paperwork.
Electric Classifieds, Inc., the new corporation, took all of the assets of the old Online Classifieds, Inc. Kremen was for a time CEO of Electric Classifieds, Inc., and he directed the registration of new domain names, sometimes using fanciful corporate identities of non-existent companies as the name of the registrant. Dorband extracted this little nugget from Kevin Kunzelman at a deposition. Kevin, a former Electric Classifieds executive, didn’t intend to give Cohen any ammunition by saying this, but it definitely didn’t help our case. You see, Cohen argued, the business of registering speculative domain names was what Electric Classifieds was all about -- if it acquired all of Online Classifieds’ property, then it must have acquired Sex.Com. If Electric Classifieds had acquired Sex.Com, then Kremen could not sue for the loss of something he didn’t own. Certainly Electric Classifieds had shown no interest in filing suit, and was, effectively, defunct. It had changed its name to “Instant Objects,” and remained a California corporation with former CEO Mark Elchinoff as its Director. And the statute of limitations as to Electric Classifieds, Inc. had long since run. By this analysis, Cohen should get off scot-free.
There was only one way to avoid the problem, and that would be to contact all the upper-ups who had been involved with Electric Classifieds, Inc., and get them to swear that Gary had not given the company Sex.Com, but rather that it had remained his personal property. Of course, you can imagine this was a very delicate process. While Gary was absolutely certain he had not given Sex.Com to Electric Classifieds, we had only one declaration under oath to that effect, signed by his old friend Peng Ong. Peng, as Gary never tired of mentioning, was a billionaire, and had signed the declaration even before I got involved in the case. But the rest were wildcards. I mean, how do you go up to someone and say, “Hey could you swear under oath that I didn’t give you something worth millions of dollars?” The finest and most moral of persons might wonder at your motivation in asking such a question, and if even one demurred and said, “I better talk to my lawyer about that,” you might find your whole proposition going to hell in a handbasket.
We needed to nail down the ECI insiders, but not rile them up. And we sure didn’t want Cohen taking their depositions. He noticed the depositions of a Wilson, Sonsini attorney, and Peng Ong. Cohen teased that he knew Mark Elchinoff did not like Kremen. Indeed, Elchinoff and Kremen were not on good terms, and Gary didn’t want to ask him for a declaration. I had to give Gary the opportunity to contact the ECI insiders in the meantime, and keep Dorband from taking their depositions.
We made the field of battle so hostile for Cohen that he could only respond to our attacks. With the hail of lead we kept Dorband running for cover all the time. Gary took up the concept with a vengeance. It could be utilized at every turn. We sent out pointed discovery demands, followed up on them tenaciously, and always filed motions to compel. We sent out press releases, talked to reporters, dug up court records to expose more of Cohen’s criminal past, and contacted anyone who might hate Cohen to obtain their assistance. “I want more lead!” became Gary’s unvarying demand for action, not theory, for execution, not plans. In his mind, he was astride a fierce war-horse, spurring it from one gun-emplacement to the next, saber held high, urging each crew to fire a full load straight at the enemy ranks. Wreathed in the smoke of battle, rocked by each thunderous cannonade, Gary smiled with glee. He knew he had them on the run. That was a good time to fire more lead! And whenever the silence of the guns reminded Gary that Cohen might be enjoying a moment of peace, he’d rouse us to fire another volley with his one-word imperative -- “Lead!”