16 May 2000
Source: Frankfurt, Garbus, Klein & Selz, for
2600.
See related files:
http://www.eff.org/pub/Intellectual_property/DVD/
http://eon.law.harvard.edu/openlaw/dvd/
http://www.2600.com
http://cryptome.org/cryptout.htm#DVD-DeCSS
Contents
Michael Frankfurt Declaration
[Michael Frankfurt Declaration]
Martin Garbus, Esq. (MG 6261)
Edward Hernstadt, Esq. (EH 9569)
FRANKFURT, GARBUS, KLEIN & SELZ, P.C.
488 Madison Avenue
New York, New York 10022
(212) 826-5582
Attorneys for Defendant Eric Corley a/k/a
EMMANUEL GOLDSTEIN
UNITED STATES DISTRICT COURT |
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| _______________________________________________
UNIVERSAL CITY STUDIOS, INC., Plaintiffs, - against - SHAWN C. REIMERDES, ERIC CORLEY a/k/a "EMMANUEL GOLDSTEIN" and ROMAN KAZAN, Defendants _______________________________________________ |
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00 Civ. 0277 (LAK)
DECLARATION OF MICHAEL FRANKFURT IN OPPOSITION TO PLAINTIFFS' MOTION TO DISQUALIFY |
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I, MICHAEL P. FRANKFURT, declare under penalty of perjury that the foregoing
[in original, probably "following"] is true and correct:
1. I am the Managing Partner of Frankfurt, Garbus, Klein & Selz, P.C. ("FGK&S"), as well as a member of the firm's Management Committee. I submit this declaration in opposition to the motion by plaintiff Time Warner Entertainment Company, L.P. ("Time Warner") to disqualify FGK&S from continuing to represent Eric Corley a/k/a Emmanuel Goldstein in this case. I am fully familiar with the facts set forth herein.
2. FGK&S has a well-known and well-deserved reputation as a law firm with expertise in all facets of the entertainment and media industry, including the motion picture business. While FGK&S attorneys sometimes represent movie companies themselves, we more often represent individuals and small businesses who have dealings or disputes with those companies, including producers, directors, screen writers, musicians, performers, independent record labels and others. The purpose of this declaration is to set forth in some detail FGK&S's history with respect to our representation of Time Warner (and/or its divisions and affiliates)(1) as well as our representation of clients in matters adverse to Time Warner.
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1. For purposes of this Declaration, except as specifically described herein, the term "Time Warner" shall refer to Time Warner Entertainment Co., L.P. as well as to its subsidiaries, affiliates, divisions and predecessor entities.
3. For a period of time extending into the mid-1990's, FGK&S represented Time Warner in a number of litigations, including the defense of several defamation cases brought against Time Warner involving its magazines and books. Throughout this period, FGK&S also was involved in transactions and other matters in which we represented individuals or entities in negotiations with Time Warner or otherwise with interests adverse to Time Warner.
4. Beginning in October 1996, FGK&S represented Bloomberg L.P. in a highly-publicized case brought by Time Warner challenging efforts by the City of New York to permit programming created by Bloomberg and Fox News to be carried on the City's educational and governmental channels. Time Warner Cable of New York City, a division of Time Warner Entertainment Company, L.P. et al. v. Bloomberg L.P. et al. 96 Civ. 7736 (DLC). At the commencement of the litigation, Time Warner objected to our representation of Bloomberg, and one of its attorneys told my partner Martin Garbus that our firm never would work for Time Warner again. Nonetheless, no motion to disqualify ever was made, and FGK&S proceeded to represent Bloomberg in the preliminary injunction proceedings in the Southern District of New York and in the appeal from those proceedings in the Second Circuit.
5. Since the Bloomberg case, FGK&S has been involved in literally dozens of transactions in which our clients have been adverse to Time Warner. These matters include employment agreements, writer's agreements, series development deals and numerous other transactions for executives, writers, producers, performers and others with Time Warner entities such as Warner Books, HBO, CNN, Telepictures and Warner Brothers. FGK&S attorneys in our Advertising Group deal on almost a daily basis with rights issues involving negotiations for film clips or music rights with Time Warner entities such as Turner and Warner/Chappell Music.(2) We also have in the past and continue to represent clients in disputes with various Time Warner entities such as Time Inc.'s Magazine Group, D.C. Comics and Warner Special Products.
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2. In order to protect the confidentiality of our clients, we do not believe that it is appropriate to provide extensive details about these matters. We will, at the Court's request, provide additional information and documents in camera.
6. In addition, we have been adverse to Time Warner in litigations, including some that have taken place in recent months. For example, in the Fall of 1999, just prior to the start of the Stouffer Action, we commenced an arbitration proceeding on behalf of an individual named David Bohrman against CNN America, Inc., a subsidiary of Time Warner. The dispute arose out of Mr. Bohrman's claim that his employment contract had been breached. The matter was settled in early November 1999 after a mediation process in which CNN was represented by outside counsel.
7. At present, FGK&S is representing defendant advertising agency Frierson, Mee & Kraft in a case in an action commenced by Time Inc. in March 2000 to recover over $800,000 for alleged print media advertising services rendered under a contract. The case captioned Time Inc. v. Beautyscene.com and Frierson, Mee & Kraft, Inc. Index No. 601134/00 currently is pending in the Supreme Court, New York County. On about April 3, 2000, FGK&S filed an answer on behalf of Frierson, Mee & Kraft along with discovery demands. Time Inc. is represented in that matter by its Assistant General Counsel Milton Williams. It has not questioned our involvement in the case.
8. On about March 1, 2000, FGK&S filed a Notice of Opposition on behalf of its client The Freakies Company in the Trademark Trial and Appeal Board of the United States Patent and Trademark Office captioned the Freakies Company v. Time Warner Entertainment Company, L.P. et al. Opposition No. 117,594(3) to Time Warner's application to register the name FREAKAZOID! for clothing items. On April 26, 2000, in a telephone conversation with Nils Montan of Warner Brothers, my partner Edward Rosenthal granted Time Warner a sixty (60) day extension in which to answer or otherwise respond to the Opposition. This is the same Time Warner attorney with whom Mr. Rosenthal has been dealing with respect in the Stouffer Action. Neither he not anyone else at Time Warner has questioned our involvement in this matter.
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3. The full name of the case is The Freakies Company v. Time Warner Entertainment Company, L.P., American Television and Communications Corporation, Capital Cablevision Systems, Inc., Memphis Catv, Inc., People's Cable Corporation, Time Warner Operations Inc., Warner Communications Inc., Warner Cable Communications Inc.
9. At the same time, we continue to be involved in other matters where, as with the Stouffer Action, our clients are aligned in interest with Time Warner. For example, we represent General Licensing Company in a claim brought by Twentieth Century Fox arising out of the use of photographs in a book published by Warner Books, a Time Warner entity, about the television program Ally McBeal. Because General Licensing indemnified Warner, we have been handling this matter on behalf of both General Licensing and Warner Books, and have consulted with Warner's inside counsel on a regular basis about resolution of the matter.
10. In addition, both prior to and since the commencement of the Stouffer Action, we have represented clients with claims against Time Warner or positions directly adverse to Time Warner in matters that have not (at least yet) resulted in lawsuits but have involved threatened litigation with Time Warner. To the best of my knowledge, except as set forth above, no one at Time Warner has ever questioned or challenged our involvement in these matters.
Dated: New York, New York
May 15, 2000
MICHAEL P. FRANKFURT
[Edward Rosenthal Declaration]
Martin Garbus, Esq. (MG 6261)
Edward Hernstadt, Esq. (EH 9569)
FRANKFURT, GARBUS, KLEIN & SELZ, P.C.
488 Madison Avenue
New York, New York 10022
(212) 826-5582
Attorneys for Defendant Eric Corley a/k/a
EMMANUEL GOLDSTEIN
UNITED STATES DISTRICT COURT |
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| _______________________________________________
UNIVERSAL CITY STUDIOS, INC., Plaintiffs, - against - SHAWN C. REIMERDES, ERIC CORLEY a/k/a "EMMANUEL GOLDSTEIN" and ROMAN KAZAN, Defendants _______________________________________________ |
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00 Civ. 0277 (LAK)
DECLARATION OF EDWARD ROSENTHAL IN OPPOSITION TO PLAINTIFFS' MOTION TO DISQUALIFY |
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I, EDWARD H. ROSENTHAL, declare under penalty of perjury that the foregoing [in original, probably "following"] is true and correct:
1. I am a member of Frankfurt, Garbus, Klein & Selz, P.C., ("FGK&S"), the attorneys for defendant Eric Corley, a/k/a/ Emmanuel Goldstein in the above-named action. I submit this declaration in opposition to the motion by plaintiff Time Warner Entertainment Company, L.P. ("Time Warner") to disqualify FGK&S from continuing to represent Mr. Goldstein in this case. I am fully familiar with the facts set forth herein.
2. The purpose of this declaration is to describe to the Court the circumstances surrounding FGK&S's attenuated representation of Time Warner in another case pending in the Southern District of New York, Scholastic Inc., et al. v. Stouffer, 99 Civ. 11480 (AGS) (the "Stouffer Action"), and the reasons why this attenuated representation does not create a conflict of interest in this case.
Our Long-Term Relationship With Scholastic
3. Some brief background may be useful to put the Stouffer Action in its proper perspective. First, Scholastic has been one of FGK&S' most significant clients for many years. We have handled a wide variety of transactional work for Scholastic in the areas of entertainment, licensing, merchandising, publishing and intellectual property. Among other things, we handle Scholastic's domestic and international trademark registration and enforcement work.
4. FGK&S also has represented Scholastic in numerous litigations. At this time, we are representing Scholastic in other lawsuits pending in this District including Scholastic v. Applied Software Solutions, Inc., 00 Civ. 1775 (RCC) (trademark infringement, dilution and cybersquatting) and Scholastic v. Illawarra College of Sports Education Limited, 00 Civ. 1901 (MGC) (trademark infringement, dilution and cybersquatting). Over the past few years we have represented Scholastic in other cases, including a case in which the Second Circuit last year affirmed a grant of summary judgment dismissing a copyright/trademark infringement claim involving the Goosebumps series of books. Speirs et al v. Scholastic Inc. et. al, 199 F.3d 1323 (2d Cir. 1999), aff'g, 28 F. Supp. 862 (S.D.N.Y. 1998)). We also have handled contested matters for Scholastic before the Trademark Trial and Appeal Board of the United States Patent and Trademark Office. I personally have been involved in many of these matters and litigations and am in contact with Scholastic's legal department almost on a daily basis.
5. Scholastic holds the United States publishing rights to the enormously popular "Harry Potter" series of children's books written by J.K. Rowling. The books tell the story of a boy named Harry Potter who lives a normal enough life, sleeping in a tiny room under the stairs in the home of his hated Aunt Petunia, Uncle Vernon, and cousin Dudley, all of whom are "Muggles" (humans without any magical abilities), until his eleventh birthday, when he begins to receive letters from a friendly giant named Hagrid inviting him to attend the Hogwarts School of Witchcraft and Wizardry. Over the course of the three books published to date, Harry makes new friends and has many adventures. Rowling is the owner of the copyrights in all three Harry Potter books as well as all trademarks and service marks associated with the books.
6. Pursuant to an agreement with Rowling, Time Warner is the owner of the film rights to two of the Potter Books, Harry Potter and the Sorcerer's Stone and Harry Potter and the Chamber of Secrets, together with ancillary merchandising rights. I never have seen or reviewed the license agreement between Rowling and Time Warner, but my understanding is that all of Time Warner's rights are derivative of Rowling's and that the agreement contains warranties, representations and other provisions typically found in such a document.
The Initiation of the Stouffer Action.
7. In late August 1999, Scholastic was contacted by a Pennsylvania resident named Nancy Stouffer, who claimed that she had used "Muggles" in a book entitled "Rah and the Muggles" (which she claimed had been published in 1984) and that her trademark rights and copyrights had been infringed by the Harry Potter books.(1) In early September, Scholastic received a letter from Ms. Stouffer detailing her claim of what she described as copyright and trademark infringement. A copy of this letter is annexed as Exhibit A.
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1. The "Muggles" in Ms. Stouffer's book are described as tiny, hairless creatures who live on the continent of Aura in a post-nuclear holocaust world set hundreds of years in the future.
8. I first learned of Ms. Stouffer's allegations toward the end of September 1999 when I was asked by Scholastic to host and participate in a meeting proposed by Ms. Stouffer to discuss her claims. On October 12, such a meeting was held in FGKS&S's offices. It was attended by three representatives of Ms. Stouffer, including her husband, David Stouffer, a man named Kenneth Curtis who was described as being her agent and Joseph Tesoriere. During that meeting, Scholastic explained (as it had in previous communications with Stouffer and her representatives) that based on the information and materials provided, it did not appear that Stouffer had any trademark or other rights in the name "Muggles." I attended the meeting, as did two in-house attorneys from Scholastic.
9. Time Warner did not participate in the October 12 meeting at our offices, nor did anyone at FGK&S have any contact whatsoever with Time Warner concerning Ms. Stouffer's claims at this point or, indeed, at any point prior to the commencement of the Stouffer action as described below. Moreover, Time Warner was not mentioned by Ms Stouffer in any of her letters to Scholastic or, to the best of my knowledge, in any of the communications concerning her claims.
10. On about November 1, 1999, I received a letter dated October 27, 1999 from Kevin R. Casey of the Valley Forge, Pennsylvania law firm of Ratner & Prestia again asserting Ms. Stouffer alleged rights in "Muggles" and claiming that Scholastic had violated Ms. Stouffer's rights. A copy of this letter is attached hereto as Exhibit B. Once again, this letter was directed to FGKS as representing Scholastic, and Time Warner was not mentioned. By letter dated November 9, 1999, I responded to Mr. Casey's letter on behalf of Scholastic and J.K. Rowling. A copy of this letter is annexed hereto as Exhibit C .
11. Late on Friday afternoon, November 19, 1999, I received a telephone call from Charles Deull, Senior Vice President and General Counsel of Scholastic. I was told that Scholastic had learned that Ms. Stouffer had contacted the New York publisher Simon & Schuster, had made claims to ownership of "Muggles" and had stated that she intended to commence litigation against Scholastic and Ms. Rowling. In that conversation, Mr. Deull asked FGK&S to prepare a declaratory judgment action against Ms. Stouffer to be filed first thing Monday morning, November 22.
12. In that same telephone conversation, or perhaps in a subsequent conversation that evening, Mr. Deull told me that he thought we should include Time Warner as a named plaintiff in the action because Time Warner owned the film and merchandising rights in certain Harry Potter books and these rights were implicated by Ms. Stouffer's claims. Mr. Deull told me that he would contact Time Warner that evening or over the weekend and would let me know as soon as he could whether Time Warner wanted to be included as a plaintiff. Pursuant to a suggestion made by Mr. Deull that Friday evening, I spoke with Claudia Ray of the New York office of the law firm O'Melveney & Myers and obtained a copy of a complaint for copyright infringement that had been drafted by that office and filed in this District captioned J.K. Rowling and Time Warner Entertainment Company, L.P. v. Andrews McMeel Publishing Company. Many of the allegations made in the complaint in the Stouffer Action, including those concerning the relationship between Time Warner and J.K. Rowling, were based upon the allegations in the Andrews McNeel complaint.
13. Over the weekend, I had numerous telephone conversations with Mr. Deull and other lawyers at Scholastic and sent several drafts of a proposed complaint. I did not communicate in any way with Time Warner. At some point during the weekend, I was instructed by Scholastic to include Time Warner as a plaintiff in the action.
14. On November 22, 1999, the complaint in the Stouffer Action was filed in this District. In the complaint, plaintiffs Scholastic, J.K. Rowling and Time Warner sought a declaratory judgment that none of them had violated any of Ms. Stouffer's alleged rights. Plaintiffs also brought affirmative claims against Ms. Stouffer under section 43(a) of the Lanham Trademark Act for making false statements and representations. A copy of the complaint in the Stouffer Action is annexed hereto as Exhibit D. To the best of my recollection, I did not have a single conversation or other communication with anyone at Time Warner with respect to Ms. Stouffer's claims until after the Stouffer Action was filed.
Time Warner's Limited Involvement
15. Subsequent to the filing of the Stouffer Action, I have had several conversations with an attorney named Nils Victor Montan who, upon information and belief, is Senior Intellectual Property Counsel in the California offices of Warner Brothers. Most of these conversations have consisted of keeping Mr. Montan apprised of the procedural status of the Stouffer Action and another action Ms. Stouffer has filed against Scholastic, J.K. Rowling, Time Warner, Hasbro and Mattel(2) for trademark infringement and other alleged misconduct in the United States District Court for the Eastern District of Pennsylvania (the "Pennsylvania Action").(3)
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2. Upon information and belief, Hasbro and Mattel were licensed by Time Warner with respect to the Harry Potter properties.3. At this point, there has been no activity in the Pennsylvania Action, except that (a) service of the complaint has been acknowledged by defendants and (b) Elizabeth Ainslie of the firm of Schnader, Harrison, Segal & Lewis LLP, acting on behalf of all defendants, has obtained an extension of the time in which defendants must respond to the complaint until June 7, 2000.
16. Many of my communications with Mr. Montan related to the fact that Ms. Stouffer filed a motion to dismiss the Stouffer Action for lack of personal jurisdiction and that Judge Schwartz had permitted us to take limited discovery on the issue of Ms. Stouffer's contacts and activity in New York. Pursuant to Judge Schwartz's order, I took the depositions of Ms. Stouffer and her agent Frank Curtis and obtained documents relevant to the issue of jurisdiction. Time Warner did not attend those depositions nor did it participate in the preparation thereof. Moreover, while we sent Mr. Montan copies of all of the papers served by both sides with respect to Ms. Stouffer's motion to dismiss, neither he nor anyone else at Time Warner participated in any way in the drafting of the papers or had any input of any nature. By contrast, inside counsel at Scholastic read and commented upon the deposition transcripts as well as the drafts of the papers we prepared in opposition to Ms. Stouffer's motion.(4)
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4. I have reviewed my time records with respect to the Stouffer Action and they confirm that I had numerous conversations and communications with in-house counsel at Scholastic and virtually no contact whatsoever with Mr. Montan. If the Court so requests, we would submit these records for in camera inspection.
17. The only discussions or other communications I ever had with Mr. Montan (or, indeed, anyone at Time Warner) that could be considered in any way substantive involved ensuring that the position of the plaintiffs in the Stouffer Action was consistent with other matters in which Time Warner was involved concerning the "Muggles" marks. But again these interactions, all of which took place within a two-day period in March and involved less that two hours of my time, were extremely limited and did not involve obtaining any information that was proprietary or confidential to Time Warner as opposed to information also known to our other clients, Scholastic and J.K. Rowling.
18. To the best of my knowledge, no one at FGK&S other than myself has had any conversations or communications with anyone at Time Warner about the Stouffer Action.
19. Thus FGK&S's representation of Time Warner as an additional plaintiff in the Stouffer Action has been extremely limited and secondary. Time Warner has not been billed, nor has it paid any costs or fees, with respect to that case. Our bills have been and will continue to be paid by Scholastic. Neither I nor anyone at FGK&S has met with any Time Warner attorney concerning the matter. Time Warner has not offered any substantive or even editorial comment on any of the papers we have submitted. Time Warner's interests are completely consistent - indeed, they are in lock-step - with our long-time client Scholastic. As a result, Time Warner's role in the Stouffer Action has been, from the very start, completely passive.
20. For all of these reasons, when FGK&S was asked to become involved in the instant action, which had been commenced by eight major motion picture companies and involved encryption technology and an interpretation of the recently enacted Digital Millennium Copyright Act, neither I nor anyone at FGK&S believed that our attenuated, indirect involvement with Time Warner in the Stouffer Action created a conflict. The cases involve completely different factual and legal issues. Moreover, as described in the accompanying declaration of Michael Frankfurt, there is a long history of FGK&S representing clients in matters, including litigations, adverse to Time Warner without complaint.
Time Warner Asserts That There Is A Conflict
21. On April 12, 2000 I received a telephone call from Katherine Chilton of Time Warner, with whom I never had previously spoken. When I returned the call that day, Ms. Chilton informed me that Time Warner believed that FGK&S's representation of Time Warner in the Stouffer Action created a conflict with respect to our involvement in the instant case. I promised Ms. Chilton to review the matter and to call her back. On April 14, 2000, I called Ms. Chilton and informed her that because the cases involved completely separate legal and factual issues, I did not believe there was any conflict. I suggested that if Time Warner had any concern, it could retain separate counsel which, given the procedural status of the Stouffer Action, would not prejudice Time Warner in any way. This conversation was followed by the letter to Ms. Chilton dated April 20, 2000, a copy of which is annexed as Exhibit E. We did not hear from Time Warner again on this subject until it made the motion to disqualify FGK&S in this case.
22. I have never discussed the above-named action with anyone at Time Warner, nor have I had any conversations, communications or other access to any information from Time Warner about the instant case, or with respect to the Digital Millennium Copyright Act or DVD technology.
23. While FGK&S does not believe that there is any conflict whatsoever with respect to these matters, in light of Time Warner's position, we have moved to be relieved as counsel to Time Warner in the Stouffer Action. A copy of our motion papers are attached as Exhibit F. Time Warner has requested that its time in which to respond to this motion be adjourned pending this Court's decision on the disqualification motion. FGK&S did not oppose this request. Judge Schwartz has informed counsel that FGK&S's application to withdraw in the Stouffer Action has been referred to this Court.
Dated: New York, New York
May 15, 2000
EDWARD H. ROSENTHAL (ER 8022)
[Martin Garbus Declaration]
UNITED STATES DISTRICT COURT |
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| _______________________________________________
UNIVERSAL CITY STUDIOS, INC., Plaintiffs, - against - SHAWN C. REIMERDES, ERIC CORLEY a/k/a "EMMANUEL GOLDSTEIN" and ROMAN KAZAN, Defendants _______________________________________________ |
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00 Civ. 0277 (LAK)
DECLARATION OF MARTIN GARBUS IN OPPOSITION TO PLAINTIFFS' MOTION FOR DISQUALIFICATION |
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Martin Garbus, pursuant to 28 U.S.C. 1746, hereby declares under penalty of perjury that the following is true and correct:
1. I am a member of Frankfurt, Garbus, Klein & Selz, P.C. ("FGK&S") and submit this declaration in opposition to the motion by plaintiff Time Warner Entertainment Co., L.P. ("Time Warner") to disqualify FGK&S from representing the defendants in this action because of a supposed conflict of interest. I make this declaration on the basis of personal knowledge, except where otherwise noted. This declaration also incorporates by reference all other papers I have filed in this case.
Introduction
2. Time Warner has made this motion for purely tactical reasons, to place the defendants at a severe disadvantage with a preliminary injunction in place. Although its counsel admits it was aware of the conflict as early as March 14, 2000, Time Warner waited six weeks to move for disqualification, making its application only after it had failed to force us to an immediate trial, we had served voluminous discovery requests on the plaintiffs and plaintiffs had served us with a motion to expand the injunction. Having gauged our seriousness and aggressiveness, Time Warner wants us out. It is suddenly aware that with a full explanation of the facts, this case becomes very simple, and that it may well lose.
3. Time Warner and the other plaintiffs surely know how devastating our disqualification would be to defendants, who will be forced to find a third set of lawyers and educate them about the complex technical issues in this case, all in the midst of a shortened pre-trial schedule (the trial date is now scheduled for July 2000) and a full-bore discovery battle with eight of the most powerful entertainment corporations in the world. They also know how difficult the relatively impecunious defendants will find it to locate new lawyers who share both our qualifications and our willingness to work for a reduced fee. Time Warner's transparent attempt to strip defendants of competent, aggressive counsel of their choice at a critical stage of this case should not be countenanced. The disqualification motion should be swiftly denied.
FGK&S's Qualifications To Handle This Case
4. This case involves highly technical facts as well as first impression legal issues involving the new Digital Millennium Copyright Act (the "DMCA"). The plaintiffs have enormous resources, and an enormous amount of money at stake. In order to properly defend this case the defendants must have a firm that practices in the highly specialized fields involved in the case and, given the defendants' limited budget, that is committed to throwing its resources into the case for severely reduced compensation. It must be more than just an intellectual property practice. It must be a firm that, while it represents media companies and copyright holders, is still willing to do legal battle with, among others, Time Warner, a very substantial company in the field.
5. FGK&S, with 45 lawyers and now over 20 years old, specializes in the substantive areas covered by this litigation. We have been retained by media clients large and small, some of them leaders of the industry, to litigate and counsel in the Southern District, the Second Circuit and other courts on such highly relevant issues as copyright law, Internet law, trial practice and the use of new computer techniques in complex cases to track large numbers of documents. One of my partners has written a leading text in the field, others lecture at law schools. Many of us sit on various Bar Association committees that discuss issues in this case. My colleague Ed Hernstadt, who is working with me on this matter, is particularly well versed in computers and computer law issues.
6. I was admitted to the New York Bar in 1960. I have always been only a litigation and trial lawyer and the majority of my work has involved substantive areas directly related to this case. I am knowledgeable about copyright, having handled many copyright lawsuits during the past 40 years (last month I addressed the Copyright Society on topics related to this case, and will speak this month on copyright issues before the Association of the Bar of the City of New York). I have also tried and otherwise handled cases dealing with serious issues of constitutional law, including the First Amendment. The articles and books I have written relate to, among other things, trial techniques appropriate for this lawsuit as well as appropriate substantive concepts. I have also given CLE lectures at various Bar Association meetings and seminars on some of the concerns raised by this matter.
7. This case calls on other areas of my experience and expertise which are virtually unique. There are presently cases in California, Connecticut and New York. The plaintiffs have sent perhaps hundreds of threatening letters throughout the country. I have spoken to some of the recipients. Plaintiffs have succeeded in intimidating many people and forcing them to surrender fundamental First Amendment rights. The issues in this case are going to be litigated throughout the country in state and federal trial courts and in federal and state appellate courts. It is one of my tasks to coordinate those cases, select how they are to be litigated and work with counsel. This requires knowledge of: how to work well, effectively and at minimum cost to the client with cooperating counsel in different states with different levels of experience; how to conduct test case constitutional litigation; and, most importantly, how to prioritize -- that is, how to determine which cases to defend and which not to.
8. I have had substantial experience in coordinating and developing free speech and constitutional cases throughout the United States. Indeed, I have held public and private legal positions that specifically prepared me and my firm to handle the difficult and far-flung task of coordination needed here. I was Associate Director and Legal Director of the American Civil Liberties Union, and First Director of the tax free wing of the American Civil Liberties Union, the Roger Baldwin Foundation. I also was appointed Co-Director of the Columbia University Center on Social Policy and Law, which selected cases and fact patterns for the constitutional legal struggle defending the War on Poverty, and I worked with hundreds of government and non-government lawyers in pursuing those cases. In addition, I was a member of the Board of Directors of the Lawyers Constitutional Defense Committee (LCDC), which had offices in the South during the civil rights movement. In that capacity, I worked with lawyers litigating constitutional issues in Georgia, Alabama, Mississippi and Louisiana, and later on helped coordinate extensive prison litigation in half a dozen states. Finally, I was for years general counsel for Cesar Chavez and United Farm Workers' Union, litigating free speech issues throughout the United States in support of the national boycott. As a result of this experience, I have participated in hundreds if not thousands of cases raising constitutional issues -- the exact kind of experience required here.
9. In addition to having lawyers with the litigation skills and substantive knowledge needed to counteract those of plaintiffs' counsel, defendants also need to respond to the very public attacks which the plaintiffs have made on them, calling them "thieves" and "pirates." Because I have considerable experience dealing with the media (I have, among other things, authored three books, been a writer for the New York Times and other print media, a television commentator for NBC and for various radio, television and dot.com companies), I have access to the media and am able to challenge plaintiffs' charges and the public perceptions they seek to create. Indeed, consistent with DR 7-107(A), which permits me to "make a statement that a reasonable lawyer would believe is required to protect a client from the substantial prejudicial effect of recent publicity," my representation of the media defendants and legal work on the case have been the subject of articles in the New York Times and Village Voice. I also have appeared on Rivera Live, News2 and other TV shows to discuss the case.
FGK&S' Retention and Work on This Case
10. The defendants retained FGK&S in early March 2000, after a search for counsel that I understand lasted several weeks. For the reasons already stated, our firm recognized it had the expertise and resources needed to handle this case successfully. We also recognized that the defendants and the civil liberties organization assisting them, the Electronic Frontier Foundation ("EFF"), had a limited budget for handling this matter. Because of the serious First Amendment issues raised by plaintiffs' claims, we agreed to take the case on a reduced fee basis.
11. When we were retained, a preliminary injunction was already in place, and plaintiffs' counsel was pushing hard for an immediate trial, although no discovery had been conducted. Plaintiffs had been involved in preparing the case for months. The plaintiffs in the related California case (filed before this one) are similar to the plaintiffs here; moreover, many of the issues are similar although it is framed as a state trade secrets case. The law firms which plaintiffs had retained are highly regarded intellectual property firms which, I believe, had already accrued as much as $1.5 million in legal fees and expenses. We knew we had to do, in a short time, an amazing amount of catch-up work.
12. FGK&S did what it had to do, devoting substantial time and effort to rapidly learning this technically complex case. Mr. Hernstadt and I have worked more than full-time on this matter since it came in. We have worked closely with EFF attorneys and the defendants finding out about DeCSS and the other technical aspects of this case. We have spoken to nearly 100 potential witnesses, including computer engineers, programmers, journalists and legal and technical experts throughout the world. We have prepared 20 declarations and have engaged in substantial motion practice, opposing plaintiffs' motion to expand the preliminary injunction and cross-moving to vacate that injunction. Our motion papers were so extensive that plaintiffs applied to the Court for, and were granted, an extension of time to file their opposition and reply papers. Moreover, with the help of paralegals, research assistants and our firm librarian, we have gathered boxes of relevant documents from our clients, public records and other sources. More documents are needed. To that end, we have served numerous deposition notices and document requests on both the plaintiffs and third party witnesses. We are about to begin to take the depositions we need and to analyze the documents that are being produced. We have already accrued substantial legal fees, even at the reduced rates. The work we have done is impossible to duplicate.
13. Time Warner now seeks to throw us out of the case. As it well knows, this will force the plaintiffs to renew their search for a lawyer, to spend weeks educating their new lawyers about the case, and to pay more legal fees and costs to do so. Because there is a preliminary injunction in place and the time allotted for discovery is short, this will give plaintiffs an enormous and unfair tactical advantage. This tactical advantage would be especially unfair given the Court's May 12, 2000 order advancing the trial date five months and directing expedited discovery.
The Stouffer Action
14. A good while after taking on this case, I learned that my partner, Edward Rosenthal, nominally represents Time Warner in Scholastic, Inc. v. Stouffer, 99 Civ. 11580 (AGS) (the "Stouffer Action" or "Stouffer"), a trademark lawsuit concerning the use of the term "Muggles" in the Harry Potter children's book series. Stouffer involves different legal issues, different media, different facts and different contract rights than this case. I never worked on the Stouffer Action, and Rosenthal never worked on this case. Indeed, until the conflict of interest issue arose, I had never even discussed Stouffer with Rosenthal, and he had not discussed this case with me. Neither I nor anyone else at FGK&S has received confidential information about Time Warner from Rosenthal or anyone else.
15. I circulated a conflicts check memorandum when we agreed to represent the defendants herein; by then, we had been involved in Stouffer for several months. Still, our primary relationship in Stouffer was with our long-time client Scholastic, Inc. Because the case came in as a Scholastic matter, because Time Warner was added as a plaintiff at the last moment (and after we had already been handling the case for many weeks), and because Time Warner was not paying the fees in the case, our internal records did not show us as representing Time Warner. Nor did we have any reason to believe that our firm might represent Time Warner; I have understood for many years that FGK&S is not on the Time Warner approved list for outside counsel. I did not become aware of Time Warner's connection to Stouffer until Rosenthal told me in mid-April that Time Warner was asserting that FGK&S had a conflict of interest.
16. Rosenthal explains in his accompanying Declaration why he did not react to my conflicts check memo. He is correct when he asserts that our firm had represented a number of clients adverse to Time Warner and its subsidiaries and affiliates in the months both before and since we had begun the Stouffer Action. Time Warner had not once asserted a conflict.
17. It also must be understood that there is a history of animus between me and Time Warner. Several years ago, I appeared on behalf of Bloomberg L.P., a financial news service, in a federal lawsuit concerning a decision by the City of New York to allow commercial news services, such as Bloomberg and Fox News, to utilize public access cable channels after Time Warner, which operated the cable system, had refused to grant them access to other channels. Because FGK&S had done work for Time Warner in the past, albeit on unrelated matters, the corporation's lawyers were furious with me for opposing them in that litigation, even though there was no conflict of interest under the Disciplinary Rules. One Time Warner attorney told me that Time Warner would never hire me or FGK&S again.
18. This issue arose again in late 1998, when former CNN producer April Oliver asked me to represent her in a dispute in which she was a co-defendant with CNN, a Time Warner entity. Ms. Oliver and CNN had been sued for libel by U.S. military officials who questioned a report Ms. Oliver had produced on operations in Laos during the Vietnam war. Time Warner threatened Ms. Oliver with loss of her indemnification and payment of her counsel fees if she chose me to represent her. Time Warner made clear that it would not approve me as her lawyer, but refused to give a written reason. My understanding from informal talks with Time Warner attorneys was that their decision reflected lingering resentment over my work for Bloomberg.
19. The decision to target me in the current case, to the great detriment of defendants, also should be viewed in this context. Indeed, I estimate that more than 100 people at Time Warner, including dozens of lawyers, know about my role in both Bloomberg and April Oliver. One of those people is Chris Bogart, Time Warner's general counsel, who while at the law firm of Cravath Swaine & Moore was one of my adversaries in the Bloomberg matter. In my view, Time Warner's sudden effort to oust me from the Universal Action has nothing to do with my firm's work on Stouffer, and everything to do with personal animus towards me.
Time Warner Waits to Raise The Conflict Issue
20. At a conference on the record on May 2, 2000, Time Warner's counsel admitted that Time Warner was aware of the purported conflict of interest caused by Stouffer as early as March 14, 2000, shortly after we appeared in the case. See Transcript of 5/2/2000 Conference (attached as Exhibit A) at 17.
21. Ed Hernstadt and I appeared at a scheduling conference on March 20, 2000. Time Warner's attorneys said nothing about a conflict then. Rather, they pushed hard for an immediate trial of this matter, and objected to our requests for discovery. The Court overruled Time Warner's objections and permitted us to take discovery as long as we did so expeditiously.
22. On or about April 3, 2000, we served deposition notices and substantial document requests on the eight plaintiffs (including Time Warner). At the end of April, we served substantial document requests on the plaintiffs and several non-party witnesses, who we also served with deposition subpoenas.
23. This apparently galvanized Time Warner. Within a few days, on or about April 12, 2000, Rosenthal received a telephone call from an in-house Time Warner attorney, informing him that Time Warner believed FGK&S had a conflict of interest and demanding that FGK&S disqualify itself from representing the defendants in this case.
24. Our firm retained Hal R. Lieberman, former Chief Counsel for the Departmental Disciplinary Committee for New York's First Judicial Department, to analyze this problem. After discussing the matter with him, we informed Time Warner that we had no disqualifiable conflict and would not withdraw as defense counsel in this case. We did ask Time Warner to allow us to withdraw from the nominal representation in Stouffer. Thus far, Time Warner has not responded to our request, which was formalized in our motion to withdraw.
25. Time Warner did not file its motion to disqualify FGK&S until April 26, 2000, six weeks after it learned about the conflict. When asked by the Court at the May 2, 2000 conference why it waited so long, its counsel responded:
"The lawyers that are in this case are not in any way involved in the other case [Stouffer] and there are an awful lot of lawyers there [at Time Warner] and they are frequently out of the office. I think it took several weeks to circulate, and then the lawyer involved in the other case and in this case understood that they had this conflict. . . . So it took several weeks as it ordinarily would in an organization like Time Warner with tens of divisions and tens of subsidiaries and a ton of lawyers for them to understand there was a conflict." Conf. Tr. at 17-18 [See Ex. A].
26. This tells only a small part of the story. Time Warner immediately followed its motion to disqualify with a letter requesting that all discovery be stayed until the motion is decided. In this letter, attached as Exhibit B, Time Warner volunteered to ensure that, once FGK&S was disqualified, all discovery would be completed within the original deadlines provided by the Court. That, of course, would place maximum pressure on defendants, forcing them to find and educate new counsel while racing to complete discovery within the Court's original, shortened discovery schedule. Time Warner's tactical trap, however, did not close: the Court denied the application to stay discovery, and ordered the depositions of all plaintiffs except Time Warner to go forward. See Conf. Tr. at 20-27 (Ex. A).
27. In any event, the statement by Time Warner's counsel shows the practical absurdity of this disqualification motion. The statement makes clear that the Time Warner divisions in charge of this case and Stouffer are different, staffed by different people engaged in different, unrelated tasks. Other facts show that FGK&S's relationship with Time Warner is nominal at best. Under these circumstances, Time Warner's claim of conflict truly exalts form over substance. Certainly, there is no danger that Time Warner will be harmed by our continued representation of the defendants here, or that confidential Time Warner information will be used against it in this case. Indeed, Time Warner's motion papers make no concrete claim of harm at all, and its attorney admitted at the May 2 conference that the only harm the corporation will suffer from our continued representation of defendants is to "principal" [sic]. Conf. Tr. at 19-20. The truth is this: Time Warner has made this motion for the sole purpose of gaining a strategic advantage against a far less powerful adversary. That stratagem should be rejected, and the motion to disqualify denied.
Executed on May 15, 2000
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Martin Garbus
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