The Sex.Com Chronicles, by Charles Carreon

Identified as a trouble maker by the authorities since childhood, and resolved to live up to the description, Charles Carreon soon discovered that mischief is most effectively fomented through speech. Having mastered the art of flinging verbal pipe-bombs and molotov cocktails at an early age, he refined his skills by writing legal briefs and journalistic exposes, while developing a poetic style that meandered from the lyrical to the political. Journey with him into the dark caves of the human experience, illuminated by the torch of an outraged sense of injustice.

Re: The Sex.Com Chronicles, by Charles Carreon

Postby admin » Fri Jun 13, 2014 1:36 am


The cornerstone of Gary’s claim to ownership of Sex.Com was a simple principle known to every schoolchild– he was first in line. This principle is universally used to distribute benefits in a civilized society, and NSI had used it to distribute domains. If being first in line meant nothing, or if it could be overridden by theft, we were on the way to anarchy. Well aware of its importance, judges have boiled it down to a pithy aphorism -- “First in time, first in right.” The principle had often been applied to real estate and water rights, as in Yuba River Power Company, where the California Supreme Court held that the first person to register a water right owned the right, over and against a claim jumper who dug a ditch upstream from the original claimant’s point of diversion. Yuba River was an old case, though, dating back to the early days of California law, and no court anywhere had applied its holding to the registration of Internet domains, so the argument was far from certain to prevail. Still, as principles go, it was among the most solid, and I was determined to stake the case on it. Our entire system of resource allocations was built on it, so whenever anyone asked me why Gary should win the case, I had my answer ready -- he was first in line.

Katie Diemer had filed three complaints, and seen all three dismissed. She had adequately articulated Gary’s status as the first to register, but that alone was insufficient. We had to argue that by being “first in time,” Gary had become “first in right,” to hold the registration of Sex.Com. A magic word was required, and that magic word was “property.” Being first in line had given Gary property rights in Sex.Com, something that Katie’s complaints had never specifically alleged, even though the newspapers were daily announcing domains selling for large amounts of money. Wallstreet.Com had sold for $1 Million, and Business.Com for $7.5 Million.

This part of the argument was well supported by California law, that defines property as “everything capable of being owned.” Sex.Com was obviously capable of being owned, and the owner had the power to control the most popular webpage on the Net. The way I saw it, Sex.Com was a property magnet, drawing in other pieces of property in the form of credit card subscriptions to Internet pornography, bringing in $24.95/month. Sex.Com was a node, an in-drawing spiral galaxy of credit transactions generating a white hole of cash that was gushing into Cohen’s pockets. In June 1999, Cohen put out a press release that stated:

“Sex.Com boasts over 9-Million members who pay $24.95 per month for access to the world’s largest sex-related Internet site, which receives more than 146-Million unique ‘hits’ daily. Advertisers on the 1,000-page-deep porn site pay up to 1.5 Million monthly to display their banners. For premium ad space, there is a waiting list of over one year.”

You do the math. That’s a lot of money for a country boy. The way I saw it, all of those credit card transactions were Gary’s property. It’s an old principle in property law that property owners hold not just the rights to the property itself, but all “appurtenant” rights. In other words, you don’t just own the cow, you have a right to the milk. So if property is wrongfully taken, the owners should receive “restitution” of everything that was lost -- not just the cow, but all of the milk the thief got from her while they were deprived of possession. Why? Because any other rule would encourage people to steal, by allowing them to keep all the benefits produced during the time they held the property unlawfully.

This theory of restitution had not been emphasized in the prior complaints. However, it was very clear that under the California Unfair Business Practices Act, the court could order restitution of money wrongfully obtained.

Restitution was essential to Gary’s case, because it would have been impossible to show that Gary would have made anywhere near the money that Cohen made from operating Sex.Com. Cohen, after all, was a criminal, familiar with the adult industry and its profit potential. He knew the players, didn’t take crap from anyone, and made money with the ruthless effectiveness of a con man who wouldn’t know regret if it ran over him in the street. Cohen allowed some of the hardest core pornography to be shown on Sex.Com without even a cursory check to determine whether the user was an adult.

The theory of restitution says that if you let the people keep the profit they make from using stolen property, it will encourage people to steal, because they will get the value of the property for as long as they are able to hold on to it. To explain this better, I had a story. When I was a kid living in Valencia, Spain one summer, some guys stole the bus that ran from town to the beach. They operated the bus all day long, and collected all the fares. At the end of the day they were arrested. Do you think the judge just gave the bus back to the bus company and let the thieves keep the fares they collected? Of course not. The bus company owned the bus and the fares.

Pushing the property angle improved our claim against NSI. If Sex.Com was property, and Gary was the owner by virtue of being the first to register the domain name, then NSI should have some obligation to Gary to protect his property from being transferred to another person without his permission. Just as there had been a land rush on the American frontier, there had been a land rush in cyberspace. Gary had been an early prospector, who identified a valuable claim and staked it. NSI had been hired by the government to serve as the land office in cyberspace. When Gary recorded his registration, NSI assumed a duty to dispose of that property only according to his wishes, because he had sole authority over it as the owner.

These rules of law go back a long ways. It is well established that if you leave personal property with someone to take care of, such as a horse or a saddle, they have a duty to take care of it for you. This makes you the “bailor,” and the person receiving your property the “bailee.” When someone performs a bailment for pay, that is called a “bailment for consideration,” and if the bailee mistakenly gives the property to the wrong person, they are responsible for conversion of the property. Liability for conversion is pretty much absolute. According to California case law, a parking lot attendant that gave a parked car back to a passenger to drive was responsible for conversion when the passenger crashed the car. It was no defense for the parking lot that the attendant was perhaps reasonable in releasing the car to the passenger. The terms of the bailment were that it should only be released to the person who deposited the car and had the ticket. The passenger did not have the ticket.

Significantly, in our case, neither did Cohen. NSI had granted Cohen authority that only Gary had. Gary created the domain name by thinking it up, deposited it with NSI for safekeeping by registering it, and as the administrative contact, was the only person with a right to change the registration.

Nevertheless, Katie had not pled a claim for conversion against NSI. Perhaps she thought that in order to be liable for conversion, NSI had to show some intent to convert the property, or some desire to join with Cohen’s wrongful intent. Lawyers unfamiliar with the law of conversion are apt to make this mistake, but I had tried a case in Portland a few years earlier in which my clients were charged with conversion, and I knew it to be a claim that is deadly in its simplicity. The absence of wrongful intent is no defense if the property was someone else’s, and it was taken without authority.

NSI had been well aware of the dangers that lay down the path if they ever admitted that domain names were property. NSI having been in the Internet business a lot longer than I, had firmly taken the position that domain names are not property. In a series of judicial decisions, NSI had gotten judges to agree that domain names were more like toll-free telephone numbers, which could also be arranged to read “1-800-Sue-Them.” Users of 800-numbers had lost the battle to establish 800 numbers as property long ago, and NSI had been pushing the analogy ever since. NSI suffered a brief setback when a Virginia judge found that domain names could be seized by creditors to satisfy a money judgment. However, a year later the Virginia Supreme Court reversed the decision, finding a domain name to be more like a telephone number than an item of personal property. Strangely enough, in mid-2000, NSI began appropriating and auctioning off the domain names of registrants who had failed to pay their registration fees. This seemed an awful lot like seizing property to satisfy a debt, but who am I to judge?

Indeed, it would be for Judge Ware to decide, and I was not excited by the prospect of going toe-to-toe with NSI over the property issue. Even as news stories heated up the environment with stories about domain names selling for five and six figures, I was acutely aware that the temperature in the courthouse was a few degrees lower.

I hit the books hard for days on end, digging through case law for rulings that would help us out. I found a few. In addition to Yuba River establishing a property interest in being the first to register a water right, there was Kalitta Flying Services, that determined engineering drawings were property subject to conversion. And there was Thrifty-Tel v. Bezenek, a case the judges grappled with the interface of technology and law in a case that could only come out of California.

Thrifty-Tel was a phone company that sued two kids who had tried to gain free long-distance access by staging a brute force attack -- firing huge numbers of random passwords–at Thrifty-Tel’s computer. The clumsy hack slowed the long distance system down considerably, which Thrifty-Tel alleged as damages in a suit for trespass. On appeal, a verdict for Thrifty-Tell on conversion was upheld, and the court explained that the cyberattack was a “trespass to chattels,” for which damages could be awarded. The kids had trespassed because each random number was a physical thing, an electron packet, trespassing on Thrifty-Tel’s computer. Since the computer was an item of personal property, not a parcel of real estate, what had happened was actually a “trespass to chattels.” The last time I heard about chattels was in the Taming of the Shrewby Shakespeare, when the husband tells his unruly wife that she is but a chattel. A more concrete example of trespass to chattels would be someone borrowing and returning a delivery-man’s bicycle. But here was the California appellate court, exhuming this ancient cause of action out of dusty books that no one had opened in a long time.

The court had gone back to the future to find a cybertort to fit the need of the day. Further research showed that trespass to chattels had turned out to be a handy cybertort. Intel deployed it successfully to prevent a disgruntled former employee from spamming Intel workers with negative information about the company. Judge Whyte in the San Jose courthouse had ruled in Intel’s favor in that case.

I agreed with the court’s conclusion in Thrifty-Tel v. Bezenek that random numbers are really packets of electrons, and that bombarding someone’s computer system is a physical invasion. I questioned Gary about how the Internet worked, forcing him to provide facts about the engineering and architecture of the system. Again and again I looked at the maps of the domain name servers, the long lines making a net over the globe, imagining the flows of communication as concrete data packets moving through telephone wires, fiber optic cables, Cisco routers, Sun servers, and into the offices, dens and garages of the world. I saw the faces of all those net-heads out there, basking in the monitor’s glow as they journeyed through cyberspace, the artificial world that we had created.

I’ve been reading science fiction since I was a kid, and still have my original paperback copy of William Gibson’s Neuromancer, where the word “cyberspace” first appeared in print. I knew that what happened to Sex.Com in this lawsuit was going to make a mark on the face of the Internet. Given the way that porn had taken to the Net, Sex.Com was obviously the world’s most valuable Internet domain name. Since value is a characteristic of property, the more valuable something is, arguably, the more likely it is to become property. Being the most valuable domain, Sex.Com presented the best-case scenario for a judicial finding that domain names are in fact property. The eyes of the world would be upon this case. Indeed, they already were.

The case had garnered major tech-media attention when Wired.Com published Craig Bicknell’s The Sordid Saga of Sex.Com just before Gary and I met. The article was favorable to Gary’s position, while expressing appropriate skepticism for what looked like a long shot. We wanted to maintain that buzz, and a good way to get more publicity about a lawsuit is to send copies of the complaint to reporters. So you want the complaint to be interesting, lively, informative, hell, well-written! Under California law, anything you say in a complaint is absolutely privileged, which means it cannot be the basis for a defamation lawsuit, even if absolutely false. So your complaint can be the basis of a news article about all the claims you have alleged. The complaint told the story of the origin of the Internet itself, Cohen’s criminality, his use of the forged letter to steal Sex.Com, and the fabulous wealth that was now flowing his way as the result of the theft. Following the lead established by Thrifty-Tel v. Beznick, I concretized everything. I described all of the electronic credit card transactions that were happening via Sex.Com as “data packets” that were appurtenant property of Sex.Com. I emphasized the relationship, as it were, between the milk and the cow.

I charged NSI with conversion on two grounds: first, that NSI was the bailee of Sex.Com for the benefit of Kremen, the bailor. Second, I alleged that NSI and Cohen had conspired to convert the Sex.Com domain name. This second allegation had a reasonable basis in fact, because Cohen had been quoted as saying that he had a “girlfriend at NSI,” who could get him any domain name he wanted. Gary had heard this from Lee Fuller, an adult website operator who had a cubicle next to Cohen’s at Midcom Corporation in 1995, when Cohen faxed the forged letter to NSI.

To strengthen our claims against Cohen, I built up the California Unfair Business Practices claim. This claim arises under California Business & Professions Code § 17200, a mainstay of California business tort law. This is a very broad statute that basically makes it unlawful to do anything unlawful. I’m not kidding. If you can find anything else unlawful that a defendant did, in a business context, you can probably also make a claim under California Business & Professions Code § 17200. And under that law, the court can grant you all kinds of fantastic relief. The court can order the disgorgement of unlawful profits. The court can grant attorney’s fees, and punitive damages. The only thing the court can’t give you is a jury trial on that claim. But that’s a small price to pay for all the other benefits.

Unfortunately, Cohen had scored an effective hit against the Unfair Business Practices claim, when he convinced Judge Ware that Gary had to allege some sort of injury to “consumers” in order to state an Unfair Business Practices claim. This was simply incorrect, but Katie had failed to counter it in her opposition to the motion to dismiss, and the judge had gone along with Dorband’s argument, dismissing the claim. I didn’t want to fly straight back through the opposition of the court’s prior ruling, and thus decided I had to allege some consumer injury resulting from Cohen’s operation of Sex.Com. So, I took a look at the Sex.Com site, clicked on the banners found there, and learned what I needed to know. Like other porn operators, the advertisers on Cohen’s site were engaging in mousetrapping, which causes a single click on the banner to trigger a sneaky bit of coding that commandeers your browser and funnels you into an endless loop of advertising banners from which there is no exit except to shut off your computer. After a mousetrapping session, your hard-drive needs a shower, and it is usually a good idea to delete all the temporary Internet files and reboot. You should run one of those pop-up purging programs, so that no innocent member of your family will be exposed to graphic sexual content. That sounded like consumer injury to me. Since it was common knowledge that the pornography site operators would often elicit and resell information such as birthdates, email addresses and credit information, I alleged this as a source of consumer injury. Finally, I alleged that Cohen was inflating advertising rates at Sex.Com by circulating inflated traffic figures via press releases. This qualified as consumer injury, because pornography sites are consumers of advertising.

I also gave the breach of contract claim against NSI an injection of steroids. This claim looked anemic, because the only documents that you could call a contract were the email registration from Gary and his certified mailing of the printout. Gary hadn’t paid to register Sex.Com, because registration was free. Any lawyer would look at it and say, “where’s the consideration?” When talking contracts, consideration doesn’t mean good manners, but rather Gary’s payment of something having value. If you don’t have to pay for your contractual rights, you don’t get any. Consideration can be as little as “a peppercorn,” but it must be there. In Gary’s case, I’d found a peppercorn of value. Although Gary hadn’t paid for the privilege of registering Sex.Com, he had surrendered personal information -- his name, phone number, email and home address. He thus became one of the ever-increasing database of domain name registrants that NSI’s initial public offering prospectus touted as a source of continuing value. Free registrations came swiftly to an end in mid-1995, and the registrants’ payment of fees became part of a swelling juggernaut of financial benefit that converted NSI into a stock market darling on the strength of registration revenue alone.

When you write a complaint alleging unusual facts that don’t fit the mold of past cases, you have to engage in imaginative pleading. To get past the complaint stage, you must recite the legal formula and confidently assert the things you hope to prove. It takes a lot of legal research and careful writing. In the four days before the filing, I spent about fourteen hours a day at the USF law library, leaning over my laptop, smelting down ideas and forging them into arguments. Pounding facts and law together, I felt like Vulcan hammering in his forge, tempering and sharpening his weapons. An argument is a pointy thing, and the point always goes toward your enemy. The sharpness of the point is comforting to him who holds the spear.

The third amended complaint ran to 43 pages. As it developed, I shared the progress with Gary. We talked over the cell phone during the day, and back at his apartment we’d go over revisions in the evening. You can only convince a client that you are sincere by actually doing the job, and I was doing it. My only problem was that my 43 page opus kept needing further revisions. The time to get the final filing together was fast approaching. And computers can always tell when you’re nervous, can’t they?
Site Admin
Posts: 27899
Joined: Thu Aug 01, 2013 5:21 am

Re: The Sex.Com Chronicles, by Charles Carreon

Postby admin » Fri Jun 13, 2014 1:36 am


Now, all of the time that I had been working on this third amended complaint, and thinking all these high falutin’ legal thoughts, I had not been Gary’s attorney of record in the case. Katie Diemer, Sheri Falco, and Joel Dichter remained in position. Strictly speaking, Gary Kremen wasn’t supposed to be filing anything but an opposition to Cohen’s pending motion to dismiss. Judge Ware had told Katie Diemer that if she wanted to file a third amended complaint, she would have to give him a copy of it so he could look at it, according to the “local rule,” and approve it for filing.

When faced with a motion to dismiss that has a serious likelihood of final success, you really need to come up with a good amended complaint. It’s less work than writing an extensive argument, and as a practical matter, motions to dismiss are often granted “in part,” so you end up having to “re-plead” your complaint anyway. So why not just write it and make the other lawyer’s arguments irrelevant? Besides, I didn’t want to defend Katie’s complaint, which didn’t tell much of a story and omitted all mention of my precious “data packets” of property. So I focused all my energies on submitting the “proposed” third amended complaint to Judge Ware. Of course, I still needed to file at least a nominal opposition to the motion to dismiss, and also an “association of counsel,” to establish my official role as “counsel of record,” before attempting to file any papers at all. I had allotted a small amount of time to prepare those in a pro forma fashion after I got done drafting the Third Amended Complaint.

So there I was, in Gary’s living room, working on my laptop, and printing out legal documents on a cheap HP inkjet printer. I got the association of counsel cranked out, but as I was trying to hack out the opposition to the motion to dismiss, my poor old laptop was breathing really hard. Characters were taking seconds to appear on the screen, and finally it just froze up, swallowing the document into the void. Bob Deschl, Gary’s pizza delivery man and computer jack of all trades, tried heroically to resuscitate it, but it was no use. I had cut it too close, and it was time for me to jump in my car, fight my way through traffic from San Francisco to San Jose, and file what I had prepared. And I had to leave early to pick up my daughter, who was arriving at the San Jose train station that same afternoon.

I also wanted to drop by and leave copies of everything with Katie Diemer, whose office was just a few blocks from the federal courthouse, and mooch a few photocopies off her while I was at it, since I hadn’t had time to make any. Now this was an interesting situation. I hadn’t talked to Katie in weeks. She’d been ordered by the court to file an opposition on or before July 12, 1999. Something in my bones told me she was just sitting on her butt, doing nothing. If that was the case, I wanted to catch her at it, and it wouldn’t be bad to have a witness. Since Ana’s train was arriving at 2:30 p.m., she could be that witness. It seemed like the timing would all work out, since the courthouse closed at 4:00 p.m.

I picked up Ana, right on schedule, and headed over to Katie’s office, a big gold cube on Santa Clara, the main drag in San Jose. The receptionist and the secretary were very nice, and sat us down in the conference room. We thought Katie was going to come walking in any minute, but then a funny thing happened. She called me on my cell phone. So there I am, sitting in Katie’s conference room, talking with her on my cell phone while she is sitting in her office. Finally, after a few minutes I tell her, “I’m sitting here in your conference room.” She sounded like I had just put my hands in a place where they shouldn’t be. Her voice went up an octave, “You’re in my office?!” I explained to her that yes, I was, and that I was going to file some documents in the case. After a few more minutes of talking, Katie declared that it was silly for us to be talking like this, and I invited her to come down and meet me in her conference room.

When things like this happen, you’re always glad there’s someone around to talk to about it later. You can check your impressions against theirs, and in this case, it was fun to get Ana’s impressions of Katie Diemer, which confirmed my own. Katie presented as a tall, rather imposing woman in a dark, tightly contained suit that was not entirely unflattering. A frizzy explosion of flaxen hair reaching to below the shoulders. A slightly puffy face with a severe expression covering over what seemed to be a lot of nervousness.

I gave her the documents and let her know what I was doing. Clearly, it wasn’t the way you usually do things. When a client replaces his lawyers, you almost always do it by filing an agreement in writing between the client, the outgoing lawyer, and the incoming lawyer, called a “substitution of attorney.” But in this case Katie had told Judge Ware that she was “unable to act” because of a “conflict of interest” existing between Gary Kremen and other people whose names she did not mention. These were of course Ron Levy and Seth Warshavsky, and she told the judge that she would tell him whatever more he needed to know in a secret, “in camera” hearing that Cohen’s lawyers would not be allowed to attend. Judge Ware hadn’t accepted Katie’s offer to discuss the grisly details of the conflict of interest, however, instead ordering her to file an opposition. Which Katie was not doing. She was going to stand on her claim that she “could not act” and watch the case die. Gary was therefore justified in doing whatever was needed to break the logjam, including hiring a stealth-attorney to flip a filing over the transom at the last possible moment. So I had no apologies for my presence.

Katie admitted she had no opposition to the motion to dismiss prepared. Only I, and the papers spread out on the conference table before me, could prevent Gary from losing Sex.Com forever, from having the gem slip through his fingers and down into the gutter of the legal system, from which it could never be retrieved.

But Katie wasn’t giving up. Did I know, she asked, who was running the litigation? Did I know about Seth Warshavsky and his company IEG? Did I know about the firm of Newman & Newman in Seattle, which represented Mr. Warshavsky? What I knew, I responded, was that none of these people was doing anything to keep the case from being dismissed, and I had to act. She told me that she had called Mr. Newman, and he was going to call back in just a few minutes. She asked me to please wait. It was 3:40 p.m., twenty minutes before the gates of hell were going to open up and swallow Gary’s claim to Sex.Com. I told her I had to go. She told me that it was only ten minutes to the courthouse, and I should really wait to talk to Mr. Newman. I told her I couldn’t. I got my copies from the secretary and headed over to the courthouse.

Once there, I was comforted by the sound of the clerk’s stamping machine putting the beautiful purple ink on my paperwork, “Received for Filing, July 12, 1999.” My baby was safe.

As we left the courthouse, it was closing. As we drove down the streets of San Jose a few minutes later, my cell phone rang. I had the pleasure of speaking with Derek Newman. Like Katie Diemer, he asked, “Do you know who is running this litigation?” My answer was simple, “I’ve always presumed it was Gary Kremen, the plaintiff.” Derek responded that wasn’t the whole story, and I said I understood that. But I wanted to end this interference, so I said “If you’re telling me that Gary Kremen is not the plaintiff in this action, and that he is merely masquerading as the plaintiff pursuant to some sort of agreement in which an undisclosed entity is the real party in interest, then I want to know it right now, so I can advise the court of it, because I will not be a party to any kind of deception of the court.” Our conversation ended a few moments later.

I had done it. I had wrested control of the case from the other attorneys. I had gotten past Steve Sherman’s nay-saying, Gary’s vacillating, and Katie Diemer’s obstructionism. I enjoyed a warm glow of triumph.

It would have been great to split town right then, but I had to finish up that opposition to the motion to dismiss that I’d lost in my laptop crash. Ana and I spent the night in a Best Western, and the next morning, as early as I was able to stir myself, I started finishing up the opposition to the motion to dismiss. But since it was one day late, I also had to write a motion under Rule 6(b). I call these “motions to deem timely filed,” because “deem” is a magical word that reminds the judge that when he says so, a late filing becomes timely. But the writing project took too long, and as going out for breakfast turned into checking out at noon, Ana’s mood got grumpy. At age seventeen, hunger can attack ferociously, and as we left San Jose in the two-p.m. heat, I was apologizing for the litigation lifestyle and promising a great sushi dinner in Walnut Creek by way of atonement.

With the last of my paperwork filed, Ana and I were free to head for Oregon. It’s a lovely feeling when you’ve done your work, and you can finally rest. Filing a complaint is an act of war. You have to work yourself up to it, and you know it’s only the beginning of a lot of trouble that you’re heading straight into for the hope of victory. I guess that’s why you send armies forth with flags, banners, trumpets and beautiful maidens waving. After getting close to the action in Katie’s office, Ana was jazzed on the intrigue that enveloped the case, so she was cheering me on eagerly.

As we poked along through the Silicon Valley traffic jam, we compared notes and listened to heavy metal teen angst tunes off the “American Werewolf in Paris” soundtrack, enjoying the sounds of rage and destruction, then switching over to the sweet sounds of Frank Black as we neared Walnut Creek. There, at Tokyo Lobby, our favorite sushi bar, we unwound with the natives, enjoying excellent sushi, multiple color TVs, and impeccably polite service from the very Japanese waitresses, in short, a heroic repast. Afterwards, we got lattes from the Starbucks across the street and resumed our course for Oregon. By midnight, we were back in the cool mountains, seeing the bright stars.
Site Admin
Posts: 27899
Joined: Thu Aug 01, 2013 5:21 am

Re: The Sex.Com Chronicles, by Charles Carreon

Postby admin » Fri Jun 13, 2014 1:37 am


There’s a useful saying to use with clients when nothing is happening, but you believe that they will get justice some day in the distant future: “The wheels of the law grind slow, but they grind exceedingly fine.” Perhaps it was Tulkinghorn, the old lawyer who ended up being murdered in Bleak House, who uttered this Dickensian phrase. In any event, you’ll note that it’s a long time from July 12, 1999, when the motion to file a third amended complaint was actually handed to the clerk in San Jose, and October 4, 1999, when Judge Ware finally ruled on the motion. During that time, I reversed course on my move to Southern California, and moved back to Oregon.

I had decided Sex.Com was the most important piece of legal business I was likely to stumble across, that Ventura County wasn’t as hoppin’ as I thought, and what the hell, if Bob Dorband lived in Oregon, it would all make sense in some weird way. After all, if Cohen had an Oregon lawyer, that must be a good thing, so Gary could have one, too. I got a space at 800 West 8th Street, upstairs from my old friend Peter Carini, a Southern Oregon criminal defense lawyer with New York style and a stellar trial record. The building was right across from the courthouse, and was owned by Lee Werdell and John Hanson, another couple of trial lawyers in the Oregon tradition. Typical Oregon legal maxims would be: Lay traps! Bushwhack! Win! Smile! Oregon trial lawyers can be inspiring companions.

If you want to wake up every morning and know that someone is going to be studying everything that you have done in order to find fault with it and accuse you of screwing up, you should definitely become a trial lawyer. This experience will become your daily fare. I don’t know if other people will admit it, but I still experience fear when I see envelopes printed with my adversary’s letterhead on them, or when I see alien paper coming through the fax machine. It’s nasty. You know they don’t mean you any good, they want to rip your heart out, decorate their den with your entrails, soak your grave with cheap whiskey, and dance all over it in hobnailed boots.

For a sole practitioner, there are additional problems. You have neither the prestige of being with a large firm nor their deep pockets. Some lawyers figure they can probably scare you away from the meat if they just growl loud enough. So the first stage when lawyers encounter each other is a little bit like the opening scene in 2001, A Space Odyssey, where two types of apes face off at the watering hole, and the facial expressions get really nasty.

Bob Dorband has mastered watering hole etiquette. In person he is unflappable, pleasant and cool. On paper, his fangs show and drip. Frankly, he scared the bejeezus out of me with his first letter. Dorband’s letter alleged a species of wrong that you have to be a lawyer to appreciate -- he claimed that local rules required me to file a motion for reconsideration of the court’s prior dismissal of the RICO claim before moving for leave to amend the complaint. My attempt to end-run the local rules, he claimed, was subject to monetary sanctions under Rule 11 of the Federal Rules of Civil Procedure. Today it’s easy to laugh at Dorband’s toxic pettifoggery, but back then I chose the safer expedient of sending him a conciliatory letter with a taste of steel, assuring him I was right on every issue, and had never been sanctioned so much as $1 in 13 years of practice, a record I intended to preserve.

My show of courtesy was strategic. I wanted to minimize the energy spent exchanging nasty letters, because arguing with other lawyers isn’t the point of litigation. The point is to get favorable court decisions, one after the other, all the way to final victory.

The first favorable decision came on October 4, 1999. I drove to San Francisco and crashed at Gary’s. The next morning Gary and I went to court in his car -- yeah, the same old beater I had first seen in Carpinteria, still no stereo, still no paint job. We headed upstairs to Judge Ware’s 4th floor courtroom. It’s a nice courtroom, not too big, with a gallery that probably accommodates 60 people. We walked in, and the place was jammed. The gallery was stuffed, the jury box also filled. The judge had put us at the end of the calendar, so we would be the last attorneys to make oral argument. In a complex case, this is a signal that the judge wants to give the argument plenty of time, presumably because he’s interested.

Being last to argue also gives you plenty of time to size up the judge. Does he listen? Does he question? Does he allow argument or cut it off? I was immediately charmed. Judge Ware is a handsome and congenial man, with warm African features of mahogany color. His voice is gentle and respectful. He rarely barks, almost never contorts his features, and treats everyone with respect.

When Dorband and I rose to argue the case, the judge let us know who the spectators were. They were two classes of students he was teaching at the local law schools. He had distributed copies of our court papers to them as part of their study, and they were attending to get a little education in courtroom procedure. After we concluded with our arguments, the judge informed us, we would “go off the record,” and the law students would be allowed to ask questions.

The formal argument was polite, and proceeded much as I had expected. Federal judges, when presented with a properly prepared motion to amend a complaint, are supposed to “interpret the rules liberally,” so that “substantial justice can be done on the merits.” In other words, plaintiffs shouldn’t be cut off at the knees before they have an opportunity to present evidence to support their claim.

But Dorband had a good point. He had already won a motion to dismiss several important claims. Motions to dismiss are intended to “narrow the issues” to be explored in formal discovery, and to “simplify the case” before trial. This means that you should proceed from more claims to less, as the issues get eliminated. A plaintiff, some judges reason, shouldn’t come into court with one theory of law, and when faced with motions to dismiss, respond with a sort of hydra defense, sprouting two claims for each one that is cut off. The judge had dismissed the racketeering claim, and Katie Diemer had acquiesced in that ruling, filing no racketeering claim in the second amended complaint; nevertheless, here we were alleging racketeering again. And there were other fun claims thrown in there, too. The new claim for conversion and conspiracy to convert against NSI. A claim for “slander of title” on the theory that Gary held title to Sex.Com and Cohen had slandered his title by claiming to be the true owner.

Throughout the argument, Dorband was fiercely eloquent, arguing for his “narrow the pleadings” approach, and suggesting directly and indirectly that Kremen was the real shyster here. Judge Ware took it all in stride. He questioned me gently, with a touch of humor, about why I had filed the racketeering claim again, after Diemer had allowed it to lapse. Was I asking him to ignore precedent and permit the reallegation? I conceded that he would have to go against precedent, but that it was justified. He seemed pleased with my candor, granting the motion, except as to the racketeering claim.

Afterwards, the students asked a few questions. That was a touchy situation. How could we be off the record? Sure, the court stenographer wasn’t writing this down, but the judge was hearing it all. And some of them had pointed questions. One young lady started talking about the statute of limitations, and I didn’t feel at all comfortable with that. The novelty of the experience was disorienting. Dorband took refuge in talking about “hypothetical” facts, and the questioning ended quickly.

Fortune had smiled. The judge had delivered my baby. She was breathing, her eyes were bright, her cheeks were rosy. The fight for Sex.Com was on in earnest.

But that didn’t mean Gary was happy. He felt cheated because Judge Ware had again rejected the racketeering claim. Gary couldn’t understand how the “Racketeer Influenced and Corrupt Organizations Act,” aka “Civil RICO” didn’t apply to Cohen. He didn’t understand that few judges approve of Civil RICO claims. This law was criminal in its origins, draconian in its provisions, and in the eyes of conservative scribes, threatened to turn every securities salesman into a mobster.

On the way back to the office, Gary started a fight, demanding that I sue someone or other that I really didn’t want to sue. He fired me. He hired me back. We arrived in San Francisco at his office, and although I had briefly ceased to be his lawyer, by the time we got inside, he regretted his brief intemperance, and things were back to normal.

Of course, normal with Gary Kremen is not normal at all. Things were looking great for him, but not so great for me. He owed me over $11,000 at that point, and $1,500 of that was out-of-pocket costs. I had sent him a simple agreement to sign, but he kept saying he wanted to come up with a more formal, lengthy agreement. He had something in mind of the sort he had entered into with Warshavsky and Levy, involving the creation of a new corporation that would receive the Sex.Com ownership interest once the litigation was successful. But I told Gary that wouldn’t fly. It didn’t look like that had worked out so well for Warshavsky and Levy, so I had a simple solution -- a present grant of my 15%. Like I own 15% now. We had talked and re-talked this in the preceding months. We were obviously at a high water mark for the attorney-client relationship, and if this boat was going to float, it would have to be now. As Shakespeare said, “There is a tide in the affairs of men...”
Site Admin
Posts: 27899
Joined: Thu Aug 01, 2013 5:21 am

Re: The Sex.Com Chronicles, by Charles Carreon

Postby admin » Fri Jun 13, 2014 1:37 am


Although Lewis Carroll was a mathematician, lawyers love his writings. Alice’s world of absurd characters and paradoxical declarations perfectly mirrors the arbitrary realm of “The Law.” In Wonderland, as in law, things are often so just because they are. Also in law, logic is subordinate to authority. For Alice, things were not always so strange. Once she was a normal girl in a normal world. It all changed when she fell down the rabbit hole. My life changed when I fell into that dot that divides Sex.Com precisely in twain. In chaos theory, they talk about “strange attractors,” vortices of force that generate order and disorder in equal shares. Like a force of myth or legend, Sex.Com distorts reality, makes all things believable and nothing incredible. Just to go after it was to join in a fabulous quest. Or so I thought.

It’s the intoxication of advocacy. When you are fully charged up, totally committed to the advocate’s role in an important case, the energy changes. The atmosphere will almost start to shimmer. You are speeding ahead, plying a sword that is both immensely heavy and totally maneuverable. You feel the enemy on the other side, as he parries your blow, and your opposed wills clash like ringing steel. The blades dance, you thrust, evade, lure his edge and seek the opportunity to strike. It’s a game you play for a living, and it feeds your body and soul. You identify with your victories, and each victory contains the energy you need to move on to the next one. Along the way, you make a living, but the victories themselves are worth far more than the money you’re paid.

And that’s my problem. I enjoy it so much I’ll practically do it for free. I’ve spent too much time treating cases like motorcycles that you can kick-start and tear ass all over the dirt in. I’ve come to see clients and witnesses as fuel to burn, weapons to deploy, and obstacles to be destroyed. Sex.Com was like a big, fire-breathing road rocket with 100,000 cc’s ready to blast off like a George Lucas creation hitting hyper-drive with the Empire in hot pursuit. God, I wanted to ride that thing, but it was dead stock still. In October 1999, Gary had no gas money. The time left to take discovery was ticking down, and Gary wasn’t doing much but getting behind on his legal bill, so two things had to happen. He had to find some money, a lot of it, and I had to find a way to make it until he did.

We came up with an agreement that hung on a big if. I would keep working on the case if he promised to pay me $55,000 when he got a few million bucks out of a stock IPO that he was sure would be happening within the next few months.

You can imagine what your wife says when you come home with one of these agreements. She’s like, “An IPO?” And you’re like, “Yeah, you can make a lot of money on them.” You reassure her that you’re not going to put another 500 hours into this case and have nothing but an unfulfilled promise to show for it. She squints her eyes and shakes her head with a tight smile on her pretty lips. I have a small collection of worthless agreements to show for lots of work done free, so this is a bit of a sore point with her.

But I had to go on. I was down the rabbit hole, where things just get “curiouser and curiouser.” It seemed curious enough to a lot of people when, just five months after I had moved to Carpinteria and put an Ojai address on my stationery, I was back in Medford, Oregon, renting office space with my old friend Peter Carini across from the courthouse. “So what about Ojai?” they would ask. The answer was always the same. I had a big case that I was working on now, and I needed to focus on it and keep costs down.

Peter thought I was crazy. He’d saunter into my office in his tailor-made suit, snugly buttoned over a custom shirt and matching tie, ask me about the case and act interested. But when his true feelings came out, he just shook his head and snorted. The whole thing was going to come to nothing, and it was sad because I was pouring my soul into it. Of course, he wouldn’t say this straight out, instead expressing disappointment that I wouldn’t throw in with him full-time in the criminal defense biz. Peter is the undisputed king of Southern Oregon DUI, with sights set on the statewide crown. With me handling drug cases, we would’ve been unstoppable. His disappointment was visible.

The office was a fun place. My daughter Maria, who had stayed in Oregon when the rest of us moved to California, was Peter’s secretary, so I got to spend time with her. I had an upstairs space with good sun from big windows to the north and west, and a nice view of the parking lot and the blue Oregon horizon. I could drink beer on the landing and look at the backside of the old courthouse. It got good sun from big windows to the north and west. I brought in my huge oak library table desk, set up the computer and my new three-in-one HP 3100 faxer, scanner, printer, a beast that is still in service to this day, and now, surely, I was ready for anything.

It was good to be around people, too, because even though they take up your time, they give you ideas. Also, the marveling tone of a couple of secretaries like Kim and Teresa can really make you feel smart, which feeds your desire to go engage in more exploits. Lee Werdell was a serious trial lawyer who had an associate named Sue Whatley, who was not good at getting up in the morning but liked to work late. We became good friends, and I started to give her small projects on the case. John Hanson loved to wander into my office and ask questions with this wide-eyed look, while poking through my mail. He was generous with his praise, telling me I was farsighted and this was all going to come in really big for me. He complained a bit about my excessive use of the fax paper, so I bought my own fax machine.

My office quickly took on the look of a paper nightmare. I had four Bekins boxes of documents from Katie Diemer’s copy of the file, an endless stream of works in progress, storms of paper coming from Dorband and Dolkas. I attached a satellite to the roof of the building for faster Internet access. Gary wanted to give me an even bigger dish that he planned on getting from Hughes Engineering as part of a consulting deal. Fortunately, I was able to simply transition to DSL. It was too much work, for too little money. But the New Economy was hitting on all cylinders. IPOs were blasting off everyday, like volleys of spaceships lighting up the sky, heading for new planets. I had a piece of that new world. I was reading Wired, surfing the Net, and talkin’ tech like nobody’s fool. I was filing papers, writing, talking and emailing like a son of a gun.

And then it happened. Gary became a millionaire. A company called Interwoven went public on October 8, 1999. Gary was in a position to cash in nearly immediately. Unlike many of the other stockholders, his holdings were not under any sale restriction, and thus could be sold immediately. That was great, because after an IPO, a lot of stocks spike up in value, but by the time the restrictions are lifted, they’ve taken a slide. Selling sooner is often better. But the transfer agents, the people who actually give you your stock, so you can turn it into money, weren’t cooperating. They didn’t like the idea that anyone wasn’t under sale restriction.

So I shook the money tree, calling the lawyers for the transfer agents, implying threat as politely as I could, while Gary played the crazy client. He would call up the transfer agents and threaten lawsuits. Then I would pick up the other end and apologize for my client’s untoward behavior, but emphasize that his frustration was understandable, given that his stock had no restriction and he should be allowed to sell it immediately. Dot-commers got away with murder in those days, so it was kind of like cleaning up after a bratty kid -- all smiles and apologies.

After about a week of heckling the transfer agents, the money broke loose for Gary, but as became our usual pattern, I then had to break my share loose from him. Gary wanted to pay me, but he also wanted me to promise to sue more people. I had some serious concerns about adding more defendants in the case. We had already sued a bank in the British Virgin Islands, and a bank officer, Andrew Keuls, but I had never served them with the lawsuit, so they had never appeared. I didn’t want more defendants appearing. Too many defendants make a case completely unmanageable, as more and more lawyers show up to beat up on the plaintiff’s lawyer. I couldn’t afford this risk, and drew the line. It would not be a good idea to seek to amend the complaint to allege more claims against new defendants. Gary almost fired me again, threatening right up to the line. I knew that if he fired me, I’d never get paid for the work I’d already done, which amounted to several hundred hours. It was like tying a rope to restrain an oil tanker that was gently drifting away. Gary was a millionaire now, and could have any lawyer he wanted. But we talked it through. The rope held. He wire transferred $55,000 to my account. Peter couldn’t believe it.

I could hear the jet fuel flowing into that big red road rocket with the 100,000 cc engine as I settled into the cockpit. I was surrounded by the armored embrace of an Internet war chariot. Scanning the instrument panel, all my weapons were available at a touch. The visor slowly lowered over my eyes, and through it I could see the beautiful designs of war, and in the corner of my vision, a clock pulsing down the months, weeks, days and minutes left to win the game. My hands rested firm on the controls as I and the whole machine gently became weightless.

It’s happening now. Judge Ware is clearing me for takeoff, thumbs up, wearing an aviator cap. Near the starting line, I see a young girl. Is it Alice, poised to drop her hanky, announcing the start of the contest? Do I hear Baby Sex.Com crying out for me to save her? Is that dragon Steve Cohen, oozing smoke, holding her captive? Is that Black Knight Bob Dorband? What’s that racket? Down at the end of the runway, frantically gesturing with her crown askew and her sceptre held high -- The Red Queen! No, it’s Gary screaming “Off with their heads! Off with their heads!” I’ve already hauled back on the throttle. I hurtle past Gary, past the dragon and Baby Sex.Com, then past Judge Ware’s smiling face as big as the sun as I clear the runway, watching the blue get bigger in front of me -- heading for the open sky.
Site Admin
Posts: 27899
Joined: Thu Aug 01, 2013 5:21 am

Re: The Sex.Com Chronicles, by Charles Carreon

Postby admin » Fri Jun 13, 2014 1:38 am


Gary had to finish his deposition. I had been holding out on this, despite repeated demands from Cohen’s and NSI’s lawyers. At the October 4th hearing, when Dorband said that Gary was refusing to finish his deposition, Judge Ware showed one of his notable traits -- a willingness to order people to do things despite no motion being on calendar, and with no notice to the party about to be ordered to do something, that the issue would be coming up. Immediately upon hearing that Gary’s deposition hadn’t been concluded, Judge Ware ordered it to proceed within 30 days. Maybe that’s one of the reasons why Gary was feeling crabby on the way back from the hearing.

Depositions adjourned under hasty circumstances often lead to problems. Having read the first and second days of Gary’s deposition transcripts carefully, I had established to my satisfaction that he never said anything to contradict the “Dr. Ruth” strategy. Gary’s sketchy, one-page doodle of a business plan had been briefly identified in his first two days of deposition, and referred to casually. It made no mention of Dr. Koop, Dr. Ruth, or a “kinder, gentler Sex.Com,” as Wired Magazine referred to it years later in April, 2001. By the time we showed up at Gary’s deposition, Dorband and Dolkas were aware of this new twist in the moral high ground, because it had been specifically alleged in the third amended complaint.

I bet they were kicking themselves that they hadn’t “gotten Gary in cement” on this issue during the first two days of deposition, when it would have been easy. They had been operating on the supposition that if Gary had ever gotten around to it, he would have operated a pornography site. It didn’t seem to have occurred to anyone that Gary, not being a pornographer, might have done something different with it, based on his fundamental inclination. That inclination was evident in his other ventures, like Match.Com, that Gary was creating while Cohen was building Sex.Com into a pornography website. Match.Com expressed Gary’s own desire to get a date, and ultimately became the world’s most successful dating site. Match.Com was acquired by Cendant Corporation for $50 million. Not that Gary got any of that money -- he had already been forced out of the company by that time.

Gary and his friend Kevin Kunzelman would often remark that they had played their positions in Match badly. But few people knew of this wrinkle in the story and Gary would never reveal it, finding it politic to be perceived rich even when he wasn’t. Cohen learned the truth about Match, and would deride Gary for it: “He didn’t make any money out of that!” But what good did it do? Most tech-groupies believed otherwise. And unlike pornography, dating was part of a wholesome, American lifestyle. prided itself on being a site where people actually met and married. Match gave credence to the “wholesome Sex.Com” scenario.

Gary handled his third day of deposition well, maintaining the truth of what was alleged in the third amended complaint, that if he had developed the Sex.Com website, he would have done so differently, and in a manner to serve the public interest. I was relieved that there was no nasty cross-examination on this issue. It was more a disbelieving silence. If I had been cross-examining Gary on this topic, I would have been much tougher on him, examining the one-page business plan in greater detail, and challenging him to indicate where it reflected his kinder, gentler intentions. But such questioning was not done. Neither Dorband nor Dolkas attempted to nail Gary down about when he had originated the Dr. Ruth approach, whether that had been before or after he prepared his one-page business plan, whom he had disclosed this plan to, and what objective evidence there was to show that he ever had such an intention.

Gary’s claim was barely questioned, on the assumption, I presume, that it was so preposterous no one would believe it. What Dorband and Dolkas didn’t think was that the story would be circulated so widely in the press, and be credited by a judge. As the months went by, this story proved to have legs. Some people poked fun at the notion, but Judge Janice Stewart of Portland discussed the Dr. Ruth theory in her thirteen-page opinion halting the RICO lawsuit Cohen later filed against Kremen and myself. The fact is, Gary carried off his white-hat schtick with understated élan.

The fourth day of Gary’s depo was another story. Gary had pushed himself to the limit the night before, and was exhausted. Sitting in front of Dorband and Dolkas, with the videotape running, Gary was goggle-eyed and bleary, his thinning black hair looked sticky, his sweatshirt more worn than usual. Dorband led off with a roundhouse. I’m sure he realized he should have asked the question long before, but there’s never a bad time to ask someone, “Are you taking any drugs that might impair your memory?” I don’t flinch. No worries. I’m thinking Gary will answer “no,” of course, because he could remember an IP address or the last email you sent him regardless of his condition.

Gary answered, “Maybe.” Worries. This is called “opening the door” to areas of inquiry that should be kept shut. Dorband continued his questioning. I felt like a security system vainly bleeping “intruder” to an unresponsive occupant. I wanted to stop everything, but the video was running. Dorband asked the nature of the drugs involved, and Gary described an assortment of tranquilizers. Then Dorband asked the identity of Gary’s psychiatrist. I hesitated before failing to object. The name popped out of Gary’s mouth, and immediately I was kicking myself. I objected to all questioning about diagnosis, treatments or complaints, and instructed Gary not to answer them, but it was too late to prevent the inevitable: a subpoena from Dorband to the good doctor for Gary’s medical records.

When the doctor received Dorband’s subpoena, I successfully moved the court for an order to quash it, thus protecting Gary’s psychological records from disclosure. After the danger was past, Gary had the chutzpah to claim his “maybe” answer was good for him, because he didn’t say his medications did cause memory problems, just that they might. He thought this was good, because it would give him wiggle room to adjust his prior testimony. Unfortunately, there would be no wiggle room left, or any matter left to the imagination, if the records were out in the open. And the judge could easily have required the doctor to produce them. We had dodged a bullet, and now Gary was trying to out-lawyer me. At least the ordeal was over.
Site Admin
Posts: 27899
Joined: Thu Aug 01, 2013 5:21 am

Re: The Sex.Com Chronicles, by Charles Carreon

Postby admin » Fri Jun 13, 2014 1:38 am


While Gary was developing his dating and classifieds ads websites, Cohen was executing a well-planned strategy to make his theft secure by acquiring a trademark in Sex.Com from the U.S. Patent & Trademark Office (the “USPTO”). On May 20, 1996, seven months after Cohen sent the forged letter, one of his lawyers, Leonard Duboff of Portland, filed USPTO Service Mark Application #751-6638. Although many people scoffed at the notion of trademarking “Sex,” on the grounds that it was “merely descriptive of the product,” Duboff almost did it. The key to his near-success was Cohen’s willingness to swear in his official trademark declaration that, based on his prior use of the mark in commerce, Sex.Com had become “distinctive,” despite its descriptive character. Based on Cohen’s declaration, the USPTO examining attorney concluded that Sex.Com was a valid trademark, and ordered it “published for opposition” in the Trademark Gazette. Gary then learned of the application, and Sheri Falco filed an opposition.

When I took over the case, I sent the USPTO a copy of the third amended complaint, which caused the USPTO to suspend proceedings. Still, the mere fact that the USPTO had approved Sex.Com for publication was troubling, because one thing was becoming increasingly clear in the legal world–trademark ownership trumps the mere registration of the domain name. If Cohen could establish that Gary had registered the domain name in violation of Cohen’s pre-existing trademark, then Gary would be a cybersquatter, with no rights to the name at all. Cohen’s cross-complaint against Gary alleged a cybersquatting claim under the new anti-cybersquatting law. So Cohen’s “trademark defense” was very much a live issue.

We got the complete Sex.Com trademark application file from the USPTO. Cohen’s application included documents that claimed to show he had used Sex.Com as part of an online business called the French Connection BBS. The file contains a series of documents that tell a believable story of events that never happened. Without anyone to contradict those facts, it’s not surprising the USPTO examining attorney was deceived.

The USPTO awards trademarks only to those who show that they generate revenue from use of the trademark, so Cohen had to do the numbers for his imaginary business activity. Looking over his shoulder on March 19, 1997, we would have seen him seated at his computer, typing this:

I, STEPHEN M. COHEN, declare that:

1. I am the owner of the website and am making this declaration in the belief that the trademark “SEX.COM” has become distinctive of the services of my website by reason of my substantial and continued use in commerce of the mark for at least seventeen (17) years immediately before the date of this statement. Prior to use of the mark on my website, it was used on my electronic bulletin board.

2. The mark SEX.COM is recognized in the trade and by consumers of my services indicating my services.

3. Income from services performed under the SEX.COM mark since its introduction has been as follows:

1979: $4,872
1980: $11,370
1981: $13,770
1982: $15,320
1983: $14,780
1984: $15,270
1985: $18,550
1986: $21,990
1987: $41,020
1988: $57,720
1989: $68,010
1990: $72,233
1991: $88,670
1992: $62,450
1993: $84,950
1994: $97,010
1995: $186,440

As an inspired piece of imaginative writing, this apparently dry statement of numerical income would not seem to rank high; however, upon further consideration, the subtleties appear. No one can fail to notice that business has improved steadily over the years without any notable alteration in the trend except for a brief stumble, from $88,670 to $62,450 in 1992, when Cohen suffered minor business interruption due to his induction into Club Fed. Nor could anyone miss the run of double numbers that seems to put the whole column in motion. Each number is a helpless conscript in Cohen’s war against reality. Take $72,233, a royal number if ever there was one, who appeared, like a state dignitary on the wrong floor of an apartment building, in the decade-marking year 1990. Compare Cohen’s highjacking of this regal figure with his induction of the hard-working $15,270, who rang in solid returns for 1984. Finally, in 1995, the year he stole Sex.Com, like the sun separating the clouds, his numbers break into six figures, a sign of much better days to come. History is thus manufactured by those bold enough to seize it while others are napping.

When I started practicing as a lawyer in L.A., trademark law wasn’t cool. Anything to do with the USPTO was considered deadly dull, to be avoided by a smart associate at all costs. Patent and trademark lawyers were considered nerds, and the only sexy intellectual properties were music, movies and software. Nevertheless, after two years in the L.A. litigation department of the venerable Morgan, Lewis & Bockius, I was lured by substantially higher pay to a New York firm that did the trademark enforcement work for Louis Vuitton, the famous luxury goods manufacturer.

Our receptionist at the firm, the lovely African goddess Donna Grimes, loved to say every syllable of the firm name: “Hello, Reboul, MacMurray, Hewitt, Maynard and Kristol,” she would brightly recite every time she answered the phone. The job was politically incorrect. I spent much of my time filing lawsuits against people who sold luggage that looks exactly like Louis Vuitton, complete with the intersecting “LV” logo, but is actually counterfeit, manufactured in Korean linoleum factories. These lawsuits were necessary to avoid the damaging effects on the brand that result when a Beverly Hills matron mistakenly grabs the cleaning lady’s purse off the counter on her way to meet with her charity group, and ends up trying to pay for lunch at an exclusive eatery with a handful of bus tokens. Thus, I worked hard to get the fake stuff out of the garment district chop shops and South Central LA swapmeets in order to keep prices for the real stuff high at Neiman Marcus, Saks 5th Avenue and other trendy outlets.

I called this job “keeping the world safe for luxury goods,” and learned the usual MO for the trademark enforcement lawyer, which is a sort of rinky-dink imitation of undercover narcotics work. Certainly it has a similar effect, keeping prices high by suppressing the sale of contraband. I often refer to the DEA as the Office of Narcotics Price Maintenance. Like the DEA, we hired trademark narcs and set up buy-and-bust operations. First we hired private investigators to “make buys” of the infringing merchandise, then we would use these paid informants to swear out an application for a search and seizure order, which would be secretly issued by an obliging federal judge. With a crew of off-duty LAPD and a stack of paperwork about three inches thick, we would head over to the infringer’s place of business, then and there to take the phony luggage into custody, leaving sad-faced Koreans with a stack of legal documents and nothing left to sell. This was called a good day.

One day I had too much of a good thing. The night before I’d seized a bunch of luggage from a gal named Melissa, who was selling through Tupperware-type house parties. She was a nice blonde gal with about six years of partying on her thin Mayflower features. She had good quality fake LV. Because of the controlled setting, I went alone with only one cop, a cool-handed off-duty LAPD homicide detective. Our narc, Jodi, ushered us into Melissa’s living room and we saw all the tan and brown leather LV logos. The homicide dick is standing behind me as I move forward with a stack of papers. Melissa smiles her “Hello, gentlemen” smile, but it freezes on her face, and she follows up with “What’s goin’ on?” She looks incredulous. Jodi’s having a hard time, but she stays professional. I give Melissa the paperwork and explain why we have to take the stuff. I put the fake LV in the back of my car, street-value around $10,000 dollars.

The next morning I went downtown to do another, much bigger raid. I drove my car, a turquoise-blue late-seventies Dodge Swinger with a white vinyl top, to a loading dock near Santee Alley in the L.A. garment district. There, by pre-arrangement, I met my crew -- a half-dozen off-duty cops, my boss Andy Tashman, and the disgruntled Mexican worker who was tired of making $25/day working for the big LV pusher. This guy, who told me the job was a step up from selling Mexican popsicles for $8 a day, had signed an affidavit fingering five different locations. I left my Swinger with Melissa’s luggage in the back seat. That day we seized about $200,000 worth of luggage from three locations, packing it into big trucks for transport.

When I got back to my car, though, I not only had three parking tickets, I had an empty back seat. A Swinger is a two-door style, and the two doors are easy to pop with a slim-jim. Someone had done it. No evidence against Melissa. I had to report to the judge the status of the lost evidence, so I buried the information in a declaration that I handed to Melissa when she showed up at the post-seizure hearing. Any lawyer seeing the loss of the evidence, would’ve hit the sirens and the overhead lights, and had me up against the wall. My case against Melissa would’ve evaporated. It might be difficult to prove Melissa’s LV was counterfeit, now that I’d lost it. But Larry Lydick, Senior Judge, never mentioned the disappearance of the evidence at the court hearing, choosing instead to lecture Melissa about the error of her ways. I felt like the abyss had yawned open, then shut, swallowing only Melissa.

I left Reboul after barely a year doing this kind of work. At the Christmas party in New York City that year, a partner asked me how I was enjoying “the Vuitton work.” With a chipper smile I responded without hesitation, “Oh, it’s great. I love making Korean women cry.” The partner laughed wryly, and several other lawyers raised their champagne glasses and murmured assent to second my candor. Still, I’ve often said we learn the most from the worst jobs, and what I’d learned at Reboul proved useful early on in the Sex.Com case, when Gary and I performed a search of all the computerized docketing records of the United States Federal Court system, looking for any cases in which a Stephen Michael Cohen had been a party.

Our search turned up a large number of lawsuits involving Cohen, including one called Ashton-Tate v. Stephen Michael Cohen, John Cook and the French Connection. Indeed, Cohen had identified this case in his Rule 26 disclosures, but without providing the case number. I knew it was a trademark and copyright enforcement lawsuit filed by the SPA, the Software Protection Association, to seize computers that were being used to sell pirated software. As it happened, while at Reboul, I also worked for the SPA. So I subpoenaed the records from Howard, Rice, the big Bay Area lawfirm that had represented the SPA. A paralegal was able to retrieve a box of documents including a videotape. For a few hundred bucks, she sent me the lot.

The box contained printouts of what appeared on the computer screen when you dialed up the French Connection back in 1989. These were made by the SPA investigators, who signed declarations filed with the court, describing the business operations of the French Connection. Private investigator Richard Klaus’s declaration said he’d met Cohen, who took him to the address of Midcom in Orange County, showed him a million dollars worth of computers, and told him they were running the French Connection. The Klaus declaration also stated that the French Connection charged a $15/month membership fee, for which the user obtained access to a large database of pirated software. The French Connection had no sexual content. It was a supermarket for stolen software, including some of the big moneymakers of the day, like Lotus 1-2-3, WordStar and Word Perfect. Best of all, the videotape showed Richard Klaus dialing up the French Connection on a personal computer, revealing how the system worked. It did not, at any point, open a portal into a world of online porn.

The box also contained a news story from an Orange County newspaper, detailing how Cohen had been charged by the City of Tustin with running a house of prostitution. Some of the jury believed him when he said no, it was a private swing club, because he was acquitted. Although the French Connection in the eighties was never what Cohen later claimed it was, but rather what Klaus’s videotape shows, Cohen reimagined events, blurring the line between the Tustin swinger-club activity and the French Connection, to gin up a plausible story for claiming that Sex.Com was his based on prior use. Cohen’s claim that he began using Sex.Com five years before domain names were invented in 1984 was not a gaffe, but part of the big-lie strategy. The way Dorband explained it, “.com” was a file ending, like “.doc” or “.exe,” and Sex.Com was a “service” that earned money and became distinctive. I think I got more benefit from the SPA’s suit against the French Connection than the SPA did. Cohen gave the SPA lawyers the runaround for months, dodging service of process, pretending to be a lawyer named “Frank Butler” for purposes of delay, and promising to settle, but never signing the settlement papers. The file was ultimately closed for lack of action. Although originally filed under seal by the SPA, by 1999 the seal had been lifted, so I looked forward to showing the documents to Cohen at his deposition.

To nail it all down, I wanted to find Richard Klaus. My private investigator, Paul Nyland of Beverly Hills, traced Klaus to a pair of P.O. Boxes in Chloride and Bullhead City, Arizona. I sent him two Express Mail letters, one to each mailbox, but he never answered. I was disappointed, since I wanted to go to Chloride, having never been there. I often wondered who Klaus was hiding from.
Site Admin
Posts: 27899
Joined: Thu Aug 01, 2013 5:21 am

Re: The Sex.Com Chronicles, by Charles Carreon

Postby admin » Fri Jun 13, 2014 1:39 am


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.
Site Admin
Posts: 27899
Joined: Thu Aug 01, 2013 5:21 am

Re: The Sex.Com Chronicles, by Charles Carreon

Postby admin » Fri Jun 13, 2014 1:39 am


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.
Site Admin
Posts: 27899
Joined: Thu Aug 01, 2013 5:21 am

Re: The Sex.Com Chronicles, by Charles Carreon

Postby admin » Fri Jun 13, 2014 1:39 am


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.
Site Admin
Posts: 27899
Joined: Thu Aug 01, 2013 5:21 am

Re: The Sex.Com Chronicles, by Charles Carreon

Postby admin » Fri Jun 13, 2014 1:40 am


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.
Site Admin
Posts: 27899
Joined: Thu Aug 01, 2013 5:21 am


Return to Carry On with Carreon

Who is online

Users browsing this forum: No registered users and 1 guest