FORTUNE SMILES
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...”