Topic: Legal

Legal side of Reputation Management

Esports at the 2022 Asian Games 0

esports at Asia Games 2022In 2022, archers, swimmers, cyclists, and — for the first time — gamers will be participating in the same major sporting event — the Asian Games.

Here Come The Esports Athletes

The Olympic Council of Asia announced that esports will be medal events at the 2022 Asian Games held in Hangzhou.

With close to 10,000 athletes competing, the Asian Games are the second biggest sporting tournament in the world after the Olympics.

Why the inclusion of esports? The Council stated that “the rapid development and popularity of this new form of sports participation among the youth” influenced its decision to include digital events at the Asian Games.

Though the full list of games has yet to be released, we do know that the 2018 demonstration matches will be FIFA 2017, a real-time strategy game and a MOBA (Multiplayer Online Battle Arena).   Speculation is that MOBA games like DOTA2 and League of Legends will see some action because both have hundreds of millions of monthly online players.

The International Olympic Committee has yet to recognize the International Esports Federation. Nor has the Federation petitioned to become an Olympic event. But, could it happen? With the niche on the rise, it very well may.

Esports Investments

In 2016, industry watchers estimated that esports had a global audience of over 200 million, with revenues exceeding $300 million.

In fact, not only are esports venues opening across the United States, but industry leaders are starting to invest, heavily, in the niche. To wit, Alisports — Alibaba’s gaming arm — announced a partnership with the Olympic Council of Asia. That’s in addition to the Chinese online retailer’s $150 million investment in the International Esports Federation — a sign of big things to come.

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Kelly / Warner helps esports athletes and teams with all manners of business and legal needs, including, but not limited to, contract negotiations, endorsement deals, and litigation assistance.

Got questions? Get in touch with one of our esports business agents, today.

The post Esports at the 2022 Asian Games appeared first on Kelly / Warner Law | Defamation Law, Internet Law, Business Law.


Source: Kelly Warner Law

Will Technology Destroy Our Democracy–or Save It? A Series of Papers at The Atlantic 0

The decade-old book The Victorian Internet recaps the rise and fall of the telegraph. The telegraph was supposed to connect people together, but instead it played a crucial role facilitating ever-more-destructive wars. The author wrote: “That the telegraph was so widely seen as a panacea is perhaps understandable. The fact that we are still making the same mistake today is less so.”

Back in the 1990s, I completely embraced Internet utopianism. For anyone who thought that bad speech could be cured by more speech, the Internet offered the ultimate elixir: the (theoretical) democratization of publishing, the inclusion of more voices, and a true marketplace of ideas.

My romanticization of the Internet has faded over the years, but no single development spoiled my utopianism as much as the election of Trump. How did we as a country make such a terrible mistake? It’s easy to blame the technology that was supposed to save us. Democracy is surely unraveling due to filter bubbles, “fake news,” data breaches and publication of secrets, and the ability to game viral content.

Still, I’m not prepared to abandon my utopianism. (I’m from the Silicon Valley, after all!) If technology is part of the problem, why can’t it be part of the solution? This is a Big Question–bigger than I (or any single expert for that matter) can definitively answer. But it’s a question we need to answer, and quickly. The stakes are too high not to get this right.

Spurred by the Big Question, my colleague Irina Raicu from SCU’s Markkula Center for Applied Ethics, Adrienne LaFrance of The Atlantic, and I collectively solicited a couple dozen really smart “thinkers” to each provide a short essay outlining one idea about how technology might help improve or repair our democracy. We got a phenomenal response from people I really want to hear from. As a result, The Atlantic is publishing this collection of essays under the heading “Can Technology Rescue Democracy?”, one a day, over the next few weeks. See the project’s main page. I hope you’ll follow along, join in the debate about the merits and wisdom of each easy, and take affirmative steps to embrace and implement the ideas you like best.

The first three entries in the series:

* The Next Great Experiment: the introductory essay by Adrienne, Irina and me: “Despite the unanimous sense of urgency, the authors of these essays are cautiously optimistic, too. Everyone who participated in this series believes there is hope yet—for democracy, and for the institutions that support it.”
* Lessons From Isaac Asimov’s Multivac, by my colleague Shannon Vallor from SCU’s Philosophy Department: “Technology’s threat to democracy is not, at its root, that of poorly designed systems (though certainly design improvements can be made). The real threat is when technical progress is relied upon as a substitute for moral progress in cultivating the civic virtues, norms, and values that sustain functional democracies.”
* American Discourse, Version 1.2, by Harvard Law professor Jonathan Zittrain: “Facebook and Twitter should version-up the crude levers of user interaction that have created a parched, flattening, even infantilizing discourse. For example, why not have, in addition to “like,” a “Voltaire,” a button to indicate respect for a point—while disagreeing with it? Or one to indicate a desire to know if a shared item is in fact true, an invitation to librarians and others to offer more context as it becomes available, flagged later for the curious user?”


Source: Eric Goldman Legal

VPPA Still Doesn’t Protect App Downloaders–Perry v. CNN 0

IMG_5662Plaintiff sued CNN under the Video Privacy Protection Act, alleging that CNN wrongly disclosed plaintiff’s viewing records without plaintiff’s consent. The allegation is that plaintiff used the CNN app, which records viewing history, and CNN sent this information to Bango, a third party data analytics company. CNN allegedly disclosed to Bango the viewing activity along with the MAC address (a unique string of numbers associated with plaintiff’s device). Bango then allegedly used the information to link the user’s MAC address to other information and built a profile of plaintiff that includes the name, location, phone number, email address, and payment information, combined with the viewing history that CNN disclosed.

Standing: CNN argued that Spokeo v. Robins deprived plaintiff of standing because plaintiff did not allege any harm apart from the wrongful disclosure in question. The court rejects CNN’s reading of Spokeo. In this court’s view, Spokeo recognized that statutory harm alone can suffice where the legislature demonstrates a clear intent to create cognizable injury through the statute. That was the case here. The court cites to the rationale for passing the statute in the first place–the wrongful disclosure of then-nominee Bork’s videotape viewing records. The court also looks to the common law history of privacy torts and notes that in many circumstances, mere disclosure alone, even without misuse of information, is actionable. Thus, plaintiff does not have to show any more injury than wrongful disclosure to have Article III standing.

Whether plaintiff is a subscriber: The second and dispositive question is whether plaintiff is a “subscriber” as defined by the statute. The limited case law on the issue recognizes plaintiff as a subscriber either where the plaintiff pays to obtain the content or where there is some sort of ongoing subscription relationship. Plaintiff initially alleged in district court that he downloaded the free app and this was the extent of his relationship. This was insufficient under another Eleventh Circuit case (Ellis v. Cartoon Network). This time around, plaintiff alleges that he paid for a premium cable package that entitled him to get “premium content” on his devices, and this satisfied the necessary ongoing relationship. The court says this is still insufficient:

[the] ephemeral investment and commitment associated with [plaintiff’s] downloading of the [app,] even with the fact that [plaintiff] has a separate cable . . . subscription that includes CNN content, is simply not enough to consider [plaintiff] a subscriber under Ellis.

Accordingly, the court declines to reach the issue of whether the information disclosed by CNN is “personally identifiable information” under the VPPA.

__

Whether the Court’s ruling in Spokeo v. Robins would push back the wave of impending privacy litigation was an open question following Spokeo. I think this question can be decisively answered in the negative. It’s rare to see a dismissal on standing grounds supported by Spokeo, and most of those cases would have not satisfied standing pre-Spokeo anyway.

As to the court’s reading of the term “subscriber,” there’s a tension there between reading the statute broadly to protect consumers on the one hand, and facilitating crushing privacy lawsuits on the other. There’s also of course the difference between the state of affairs when the statute was passed (e.g., before Netflix) to the changing landscape of content consumption today. You can certainly argue that content nowadays often involves a non-monetary quid pro quo, so looking to whether the consumer pays money is a poor metric. But it’s certainly a bright line. And as this case illustrates, the “ongoing relationship” test spelled out by Ellis and applied here is vague at best.

Ultimately, it’s a loss for the privacy bar, but courts continue to struggle with aspects of the statute to reach this result.

Case citation: Perry v. CNN, No. 16-13031 (11th Cir. Apr. 27, 2017)

Related posts:

Important and Troubling Video Privacy Protection Act (VPPA) Ruling From First Circuit–Yershov v. Gannett

App Users Aren’t “Subscribers” Under the VPPA–Ellis v. Cartoon Network

9th Circuit Rejects VPPA Claims Against Netflix For Intra-Household Disclosures

Court Rejects VPPA Claim Against Viacom and Google Based on Failure to Disclose Identity

Court Says Plaintiff Lacks Standing to Pursue Failure-to-Purge Claim Under the VPPA – Sterk v. Best Buy

Judge Dismisses Claims Against Pandora for Violating Michigan’s Version of the VPPA – Deacon v. Pandora Media

Ninth Circuit Rejects Video Privacy Protection Act Claims Against Sony

AARP Defeats Lawsuit for Sharing Information With Facebook and Adobe

Lawsuit Fails Over Ridesharing Service’s Disclosures To Its Analytics Service–Garcia v. Zimride

Android ID Isn’t Personally Identifiable Information Under the Video Privacy Protection Act

Minors’ Privacy Claims Against Viacom and Google Over Disclosure of Video Viewing Habits Dismissed

Video Privacy Protection Act Plaintiffs Can Proceed Against Hulu Absent Showing of Actual Injury

Judge Boots Privacy Lawsuit Against Pandora but Plaintiffs Can Replead – Yunker v. Pandora

Split 9th Circuit Panel Approves Facebook Beacon Settlement – Lane v. Facebook

No Privacy Claim Against Netflix for Disclosing Viewing Histories and Instant Queue Titles Through Netflix-Enabled Devices — Mollett v. Netflix

Court Declines to Dismiss Video Privacy Protection Act Claims against Hulu

Granick on CISPA’s Deficiencies (With Some of My Own Comments)

Seventh Circuit: No Private Cause of Action Under the Video Privacy Protection Act for Failure to Purge Information–Sterk v. Redbox

Jan.-Feb. 2012 Quick Links, Part 6 (Privacy and more)

Redbox Can be Liable Under the Video Privacy Protection Act for Failure to Purge Video Rental Records — Sterk v. Redbox

Beacon Class Action Settlement Approved — Lane v. Facebook


Source: Eric Goldman Legal

Catching Up On Some Recent Click Fraud Rulings 0

After all of the excitement over click fraud a decade ago, we don’t often see click fraud cases any more. However, just in the past couple months I’ve seen 3 rulings that I wanted to share with you.

Wickfire, LLC v. Woodruff, 2017 WL 1149075 (W.D. Tex. March 23, 2017). The complaint.

This case involves click fraud and other online marketing shenanigans. It leads to a major damages award for the plaintiff. The parties are both SEMs. Wickfire claimed that TriMax “(1) placed fraudulent advertisements on Google AdWords that falsely designated Wickfire as their origin in violation of the Lanham Act, and (2) engaged in “click fraud” and placed fraudulent advertisements to intentionally interfere with Wickfire’s current and prospective contractual and business relationships, and they did so as part of a conspiracy to harm Wickfire.” TriMax made various counterclaims.

The case proceeded to a jury trial. “The jury returned a unanimous verdict in favor of Wickfire, finding Defendants TriMax, Laura Woodruff, WREI, and Josh West (1) misrepresented Wickfire as the source of advertisements by placing advertisements containing identifying information distinctive of Wickfire in a manner that was likely to cause confusion; (2) intentionally interfered with Wickfire’s existing contracts; (3) tortiously interfered with Wickfire’s prospective business relationships; (4) were part of a conspiracy that damaged Wickfire; and (5) acted with malice or gross negligence. The jury awarded Wickfire $2,318,000.00 in compensatory damages as a result of Defendants’ intentional interference with Wickfire’s existing contracts and prospective business relationships.” TriMax’s counterclaims failed.

Regarding click fraud, the court acknowledges the semantic confusion:

Although the witnesses at trial testified to varying definitions of “click fraud,” the parties use the term in their claims to mean the practice where an individual clicks on a competitor’s ad to drive up the competitor’s cost of advertising and prematurely exhaust the budget. Once a competitor’s ads disappeared, the individual committing click fraud can then win the bid.

The court says:

the jury heard evidence Defendants clicked on Wickfire’s online advertisements for 12 to 14 hours a day over a period of months for the sole purpose of forcing Wickfire to pay for the clicks, and this clicking, which ultimately resulted in 4,080 clicks, could have run Wickfire out of business. Moreover, Wickfire has provided sufficient support for the proposition that click fraud is unlawful [citing Findwhat Investor Group v. Findwhat.com, 2011 WL 4506180 (11th Cir. Sept. 30, 2011) and Menagerie v. Citysearch].

TriMax argued in its counterclaims that Wickfire had engaged in predatory bidding. It doesn’t work:

TriMax claims Wickfire manipulated the Google AdWords auction by engaging in “predatory bidding.” Wickfire allegedly did this by (1) running indirect ads below TriMax’s direct ads that linked customers to a website called WebCrawler.com (eventually Wickfire would begin linking these indirect ads to its own website, TheCoupon.co, rather than WebCrawler.com), (2) “plac[ing] exorbitantly high bids on its Webcrawler ads” which caused TriMax’s cost-per-click to “skyrocket,” and (3) once TriMax’s budget was exhausted and its ad campaign paused, Wickfire placed its own direct ads “which easily won the auctions due to the lack of competition from TriMax.” Additionally, in support of its unclean hands defense, TriMax claims Wickfire used tracking identifiers similar to those used by TriMax to make it look like TriMax, not Wickfire, was the predatory bidder.

According to Wickfire, TriMax’s increased costs resulted from its own overbidding, not tortious interference from Wickfire. As Wickfire explains, TriMax alone controls its bids; TriMax has never been charged more than it bid, and this bidding strategy was equally open to TriMax. Wickfire therefore maintains this so-called practice of “predatory bidding” simply constitutes legitimate competition.

The facts in the opinion were a little garbled, so I couldn’t easily tell why TriMax’s predatory bidding claim failed yet Wickfire, which appeared to allege similar conduct, found success. I’m sure there are some key factual differences that persuaded the jury.

There is also some wacky discussion about Wickfire’s unique affiliate tracking code achieving secondary meaning and becoming an enforceable trademark. Ugh.

Satmodo v. Whenever Communications, 2017 WL 1365839 (S.D. Cal. April 14, 2017).

The litigants compete in the satellite phone retailing business. The court suggests that it’s a fiercely competitive business. Both parties engage in search engine marketing. The plaintiff alleges that the defendant deliberately engaged in competitive click fraud to drain its SEM budget. “Plaintiff believes that Defendants are utilizing automated means and rotating through proxy servers in order to avoid detection.” The court discusses several claims:

CFAA 1030(a)(4): “Plaintiff asserts two theories alleging how Defendants acquired improper access: (1) violating the terms and conditions of the search engine’s advertising contracts, and (2) accessing Plaintiff’s website after Plaintiff blocked various IP addresses and asked Defendants to cease.” The court rejects the TOS prong per Power Ventures and Nosal, but the C&D letter was good enough to delimit access.

Still, the CFAA claim gets tossed because the plaintiff didn’t adequately show how the defendant accessed its computers. In a footnote, the court explains “Plaintiff’s opposition explains that clicking on the advertisements on the search engines resulted in Defendants being redirected to Plaintiff’s website, servers, and computers. However, Plaintiff fails to allege this information in its complaint.” The Cal. Penal Code 502 claim fails for the same reason.

CFAA 1030(a)(5): the court says the plaintiff didn’t show how “their data was destroyed, their computer system was harmed, or there was an inability to access their own computer data.”

California UCL: “The crux of Plaintiff’s complaint focuses on Defendants’ alleged click fraud scheme, which takes Plaintiff, “one of its main competitors, out of the marketplace for a period of time, all to the Defendants’ benefit.” These allegations, taken as true, allege unfair conduct that violates the spirit of antitrust laws and significantly threatens competition.”

Intentional Interference with Prospective Economic Relations. “Plaintiff does not allege any facts that show the existence of any specific economic relationship with identifiable third parties.”

In contrast to the Wickfire case, this plaintiff seems to be struggling to find a workable theory to challenge competitive click fraud.

Havensight Capital LLC v. Facebook, Inc., 2017 WL 1507491 (Cal. Ct. App. April 27, 2017):

On several occasions, plaintiff purchased online ads for its business on the Facebook social networking site in order to gain website visits to a single specified website address. According to plaintiff, Facebook has a tool called Ads Manager that shows customers the number of website clicks generated from the ads customers place with it. Google has a similar tool called Google Analytics, which tracks and reports website traffic. After comparing data from Facebook’s Ads Manager to similar data from Google Analytics, plaintiff observed that Ads Manager tallied a visit count to its website that was 30 percent higher than that shown by the Google Analytics data, even though the Google tool measures total visits, not just visits from Facebook, as does Ads Manager. From this disparity, plaintiff asserts defendant is deliberately over-inflating the amount of visits generated from its site. Plaintiff also alleges that defendant has charged it varying amounts per click. For example, the charges ranged from 67 cents per click to 25 cents per click on two different days in 2015. Plaintiff asserts defendant’s conduct resulted in the denial of multiple venture capital funding requests.

The appeals court upholds a dismissal of the lawsuit.

Bonus Track #1: Tropical Sails Corp. v. Yext, Inc., 2017 WL 1048086 (SDNY March 17, 2017)

Yext provides the “PowerListings” service, which enables “subscribers to track their business listing information (e.g., business name, address, and telephone number) across a number of online business directories—or internet Yellow Pages—that partner with Yext.” To drum up business, Yext offers prospective customers a free way to check how their listings are faring on existing sites. When using this tool, Yext presents a list of “Location Data Errors Detected.” The court explains:

For customers not already subscribed to Yext’s PowerListings service, the PowerListings scan reported “not standing out” under the “Special Offer” column and “unverified listing” under the “Status” column for every single online directory in the list. In addition to totaling any entry missing entirely from a directory and any discrepancy in the business name, address, or telephone number as an error, the PowerListings scan counted each “not standing out” and “unverified listing” as an error. The PowerListings scan contained between forty and sixty online directories, meaning that for all customers not subscribed to PowerListings at the time they ran the PowerListings scan, by design, the scan showed at least eighty to 120 errors.

The plaintiff, Tropical Sails, used this scanning tool and unsuccessfully tried to update the business listings manually to reduce the Yext-reported errors. Eventually it decided to subscribe to Yext after a salesperson called. The arrangement was not successful: “the PowerListings service generated ‘zero calls, zero inquiries, or zero leads from all these directories.’” Tropical Sails didn’t renew the subscription, and then it sued Yext (in a putative class action) for fraud/fraudulent inducement, unjust enrichment, and violations of N.Y. General Business Law §§ 349-50.

The court says that Tropical Sails qualifies for most elements of class formation, except that individual questions of fact predominate. Still, the outcome isn’t all good news for Yext. The court denies Yext’s summary judgment to dismiss Tropical Sails’ individual claim, plus it’s never good when a customer reports “zero calls, zero inquiries, or zero leads.” I know business directory listings are popular tools among online marketers because they are easy things to measure (see, e.g., the Kent report in the Larsen v. Larson case I blogged about), but I routinely wonder how much traffic these business directories actually get (other than from SEMs checking their positioning) and if/when it’s worth businesses investing in improving their business directory exposure.

Bonus Track #2: MacFarland v. Le-Vel Brands LLC, 2017 WL 1089684 (Tex. Ct. App. March 23, 2017)

MacFarland runs the Lazy Man and Money website, allegedly with 4M visitors (total? per month? per day?). He posted an article “Is Le-Vel Thrive aScam?” Le-Vel is a multi-level marketer. It sent a demand letter claiming defamation. MacFarland edited the letter but didn’t remove it. At issue is whether MacFarland qualifies for Texas’ anti-SLAPP law. The trial court ruled against MacFarland, but the appellate court easily reverses on all points and gives MacFarland the win and his attorneys’ fees. Let’s hear it for robust anti-SLAPP laws!

More Click Fraud Posts

* Facebook Beats Class Certification in Click Fraud Case
* Google Sued for Click Fraud for the First Time in Years–123 Lock and Key v. Google
* Facebook Gets Partial Win in Click Fraud Lawsuit
* Citysearch Click Fraud Class Certified–Menagerie v. Citysearch
* Facebook Sued for Click Fraud–RootZoo v. Facebook
* Securities Fraud Case Premised on Click Fraud Allegations Dismissed–Brodsky v. Yahoo
* Lambotte’s Click Fraud Lawsuit Against IAC Survives Motion to Dismiss
* Stockholder Derivative Action Against Yahoo Based on Click Fraud Rebuffed–Brodsky v. Yahoo
* Citysearch Sued for Click Fraud–Lambotte v. IAC
* Click Fraud Talk at SMX West
* Lead Fraud (A Cousin of Click Fraud)–NetQuote v. Byrd
* Click Fraud Resources
* Miva Securities Litigation Rejects Most Click Fraud/Syndication Fraud Claims
* Click Fraud Lawsuit Survives Motion to Dismiss–Payday Advance v. FindWhat
* Click Fraud Presentation
* Google Click Fraud Settlement Approved
* Yahoo Click Fraud Settlement Preliminary Approval
* Google Click Fraud Report
* AIT Click Fraud Lawsuit Stayed
* Lane’s Gifts Click Fraud Lawsuit Near Settlement
* Lane’s Gifts Click Fraud Lawsuit Back to State Court
* Lane’s Gift Click Fraud Complaint
* Click Fraud Lawsuit–Click Defense v. Google
* Update on Click Fraud Lawsuit
* Lostclicks.com and Click Fraud


Source: Eric Goldman Legal

ALERT! Charles “Chuck” Rodrick, aka Charles Gilson 0

Attorney Daniel R. Warner terminated Charles Rodrick as a client in October of 2013.  However, to date, Mr. Rodrick continues to spend an extraordinary amount of time and effort publishing disparaging information on various websites, including the bar complaint he filed against Daniel Warner — even though the bar complaint (filed in September of 2015) was dismissed on January 20, 2016. See http://www.scribd.com/doc/296766387/Daniel-R-Warner-Kelly-Warner-Law-Official-Dismissal-of-Bar-Charge-Letter.

Below is a portion of the response that was sent to the State Bar of Arizona that led to the dismissal of Mr. Rodrick’s baseless bar complaint.  This is being published because it clearly rebuts many of the false allegations Chuck Rodrick has published.

Also, it appears that Mr. Rodrick has recently teamed up Richard Andrew Gorman to wage a smear campaign against attorney Daniel R. Warner and attorney Aaron M. Kelly, as well as Kelly / Warner. On behalf of a client, Daniel Warner sued Richard “Rich” Gorman, Brand.com, Inc., and related companies for defamation in Pennsylvania.  A separate article will be dedicated to this new smear campaign in the very near future. Indeed, the attorneys at Kelly / Warner know what defamation feels like.

RESPONSE (PARTIAL) THAT LED TO THE DISMISSAL OF RODRICK’S BAR COMPLAINT

[note: Even though the following is public record, the firm has elected to redact certain information.]

November 3, 2015

VIA E-MAIL AND U. S. MAIL

Hunter F. Perlmeter, Esq.

Staff Bar Counsel – Litigation

State Bar of Arizona

4201 North 24th Street

Suite 100

Phoenix, AZ  85016-6266

 

Re:     File No. 15-2075

Charles Rodrick, Complainant

Daniel R. Warner, Respondent

 

Dear Mr. Perlmeter:

This is our initial response on behalf of Daniel R. Warner (“Mr. Warner”) in the above-referenced matter.  Thank you for giving us additional time to prepare this response.  Mr. Warner denies that he has violated the Arizona Rules of Professional Conduct (generally, the “Ethical Rules,” or specifically, “ER x”).

FACTUAL BACKGROUND

The Charge is Part of a Pattern of

Conduct by Complainant

As an initial matter, it comes as no surprise to Mr. Warner that Complainant is pursuing allegations of ethical impropriety against him.  Complainant first threatened Mr. Warner with a bar charge two years ago, when Mr. Warner advised him that he would be withdrawing from his representation of Complainant due to Complainant’s failure to pay for legal services.  Complainant’s goal then became to extort free legal services from Mr. Warner.  His goal now is to ruin Mr. Warner’s professional reputation through the dissemination of lies.

The claim that Complainant had made a “decision to move past” Mr. Warner’s alleged misconduct and filed this charge only as a result of the June 11, 2015 blog post is blatantly false.  Several weeks before the June 11, 2015 blog post on Mr. Warner’s website, Complainant began posting false and defamatory statements about Mr. Warner on yelp.com (see Ex. 1) and ripoffreport.com (see Ex. 2).  Thereafter, on May 22, 2015, Complainant sent an email to Mr. Warner, stating:

Didn’t want you to think I forgot about you. Your malpractice suit is coming soon. Just adding up the damages. I plan on going after your license as well. This suit will also be very Public so the public is aware of how the Kelly Warner firm really operates. See ya soon.

[Ex. 3.]  Complainant has since proceeded with the promised public-smear campaign of Mr. Warner (and others) through two websites that he launched earlier this year, “courtkey.com” and “barcomplaint.com,” with this bar charge at the center of those efforts.  [See Excerpt from Courtkey.com, Ex. 4; see Excerpt from Barcomplaint.com, Ex. 5.]

Thus, despite his claim to the contrary, Complainant did not file this bar charge in response to the June 11, 2015 blog post.  He filed it because he is angry Mr. Warner would not represent him for free.  He submitted it with the objective and intent to post it online and make Mr. Warner look “guilty” in the eyes of the public before the State Bar even started its investigation.  He submitted it to further defame and harass Mr. Warner, just as he promised he would do as part of his attempt to extort Mr. Warner two years ago.

Overview of Mr. Warner’s Representation of Complainant

Complainant initially retained Mr. Warner to prosecute a defamation lawsuit against Complainant’s ex-wife (Lois A. Flynn (“Flynn”)) and her boyfriend (David Michael Ellis (“Ellis”)), as well as other individuals.  Complainant claimed to be involved in the development of some “mugshot” websites, which focused on publishing mugshot photos and information about sex offenders (the “Websites”).  Complainant denied being the owner of the Websites.  The Websites offered the individuals who were published on the Websites an opportunity to have their mugshots removed without any questions in exchange for a payment of approximately $500.  Two of the individuals who were published on the Websites refused to pay the removal fee and became confrontational with Complainant.  When the conflict with these individuals escalated, Complainant was in the middle of a long and contentious divorce.  These individuals found out about the divorce and contacted Flynn and Ellis for information, which the individuals obtained and then published on another website.  Complainant maintained that the information published on the website was false and defamatory, and he sought Mr. Warner’s representation to take legal action against Flynn, Ellis, and the two individuals.

Complainant sought to achieve several goals in pursuing litigation, including, but not limited to, gathering evidence in the lawsuit to be used in his divorce proceeding, getting the individuals to take down the information they had posted, as well as pursuing monetary compensation against Ellis.  Complainant was also concerned about his girlfriend’s reputation because information about her was also posted on the website.

Because of the contentious nature of the relationship among the parties, Mr. Warner required a retainer of $15,000.  Complainant briefly attempted to negotiate a lower amount for the retainer, but Mr. Warner declined that request given the highly contentious nature of the case.  Complainant boasted about being a seasoned litigant who was in the middle of one of the county’s longest divorce proceedings in history and that he understood why a retainer was being required, but also said he thought the defendants would quickly settle.  In response, Mr. Warner emphasized the uncertainty of a quick settlement, given the level of animosity among the parties.  Complainant ultimately paid the $15,000 retainer.

* * * *

On January 28, 2013, Mr. Warner filed the complaint in Maricopa County Superior Court, Case Number CV2013-003800 (the “State Case”).

* * * *

Throughout the attorney-client relationship, Mr. Warner continued to give Complainant the benefit of the doubt—time after time.  Besides Complainant’s alleged ownership of the extortion Websites, Mr. Warner became suspicious of Complainant after finding out that he was in fact a convicted felon and changed his name in an attempt to mask his criminal record.  This was significant because the complaint specifically identified statements as false and defamatory pertaining to Complainant being a convicted felon, being involved in fraud, and being a con-man.  An opposing party in the case sent Mr. Warner evidence that Complainant had a prior felony conviction, which involved a fraud scheme involving cable boxes, approximately three months after filing the lawsuit.  [See Ex. 7.]  Complainant, however, explained that the conviction happened when he was very young and that he was unaware he had been convicted of a felony based on what he said his attorney told him about the plea.  He also had what Mr. Warner believed to be a viable explanation for his name change.  Mr. Warner continued with the representation because other statements on the website appeared to be actionable.

It was not long, however, before Complainant again broke Mr. Warner’s trust.  Initially, Mr. Warner first required that payment be made pursuant to the terms of the fee agreement.  Then, as an accommodation due to Complainant’s alleged financial situation related to his divorce, Mr. Warner provided significant reductions to a few bills.  Then, as another accommodation, Mr. Warner agreed to provide legal services on credit.  Then, as another accommodation, Mr. Warner agreed to allow Complainant to pay invoices issued the previous month on the 22nd of the following month, well outside the 30-day payment period set forth in parties’ fee agreement.

Up until this point, there had never been any problems or disputes with billing as indicated by Complainant in his email dated July 8, 2013, in which he stated, “Dan we have never had a billing issue.”  [Ex. 8.]  Also, to the extent there may have been some payment issues, there were no disputes, and all issues had been resolved without incident.  More specifically, Complainant accepted responsibility for being late with payment after being given these accommodations and assured Mr. Warner that the “next [invoice] will be paid on time.”  [Ex. 9.]

The situation changed abruptly near the end of September 2013.  At that time, Complainant started unreasonably scrutinizing Mr. Warner’s bills, demanding reductions, and refusing to pay anything more until reductions were provided.  [See Ex. 10.]  Mr. Warner became increasingly concerned about Complainant’s sudden change in behavior.  Nevertheless, Mr. Warner once again gave Complainant the benefit of the doubt and provided him with a $1,500 discount in an attempt to salvage the attorney-client relationship.  [See id.]  Despite that courtesy, Mr. Warner was continuously required to ask Complainant to pay past-due invoices.  [See Email to Complainant, Ex. 11 (“I sent you these invoices at the beginning of the month and specifically told you that we could not have a reoccurrence of last month.”).]
Shortly after Complainant’s sudden discontent with billing, Mr. Warner learned that the Websites could no longer process payments due to the credit card companies’ stance on these types of websites:

Asked two weeks ago about its policies on mug-shot sites, officials at MasterCard spent a few days examining the issue, and came back with an answer.

“We looked at the activity and found it repugnant,” said Noah Hanft, general counsel with the company. MasterCard executives contacted the merchant bank that handles all of its largest mug-shot site accounts and urged it to drop them as customers. “They are in the process of terminating them,” Mr. Hanft said.

PayPal came back with a similar response after being contacted for this article.

“When mug-shot removal services were brought to our attention and we made a careful review,” said John Pluhowski, a spokesman for PayPal, “we decided to discontinue support for mug-shot removal payments.”

American Express and Discover were contacted on Monday and, two days later, both companies said they were severing relationships with mug-shot sites. A representative of Visa wrote to say it was asking merchant banks to investigate business practices of the sites “to ensure they are both legal and in compliance with Visa operating regulations.”

On Friday, Mr. D’Antonio of JustMugshots was coping with a drop in Web traffic and, at the same time, determining which financial services companies would do business with him. “We’re still trying to wrap our heads around this,” he said.

See New York Times Article, Ex. 12, at 9-10.]  Unfortunately, rather than be honest and discuss his inability to fund the litigation as a result of the credit card companies’ new policy, Complainant began manufacturing grievances in an attempt to gain leverage over Mr. Warner and obtain as much in free legal services as possible before representing himself pro per. . . .

* * * *

Before losing the ability to receive payments from his mugshot Websites, Complainant . . . was very happy. . . .  This is not only demonstrated by the fact that they hired Mr. Warner to defend them in another lawsuit that was filed in late March 2013 in the U.S. District Court, Central District of California, Western Division, Case Number 5:13-cv-00514-JGB (the “Federal Case”), but also by numerous emails to Mr. Warner expressing their satisfaction with his services.  For example:

 

  1. On March 26, 2013, Complainant stated: “Looks like we have his attention 🙂 Nice Job.” [ 14.]

 

  1. On March 26, 2013, Complainant stated: “He has pressure on him now. Nice job.”  [ 15.]

 

  1. [ ]

 

  1. On April 25, 2013, Complainant stated: “Nice job dan.” [ 17.]

 

  1. On April 25, 2013, Complainant stated: “Again nice job here.” [ 18.]

 

  1. [ ]

 

  1. On May 7, 2013, Complainant stated: “It is nice to deal with a true professional. I like your style.” [ 20.]

 

  1. [ ]

 

  1. On May 14, 2013, Complainant stated: “Nice Depo Today!” [ 22.]

 

  1. On May 17, 2013, Complainant stated: “Awesome!” [ 23.]

 

  1. On June 10, 2013, Complainant stated: Your “[r]esponse looks great as usual.” [ 24.]

 

  1. On June 27, 2013, Complainant stated: “Looks good. . . . Nice Job on Cali Case.” [ 25.]

 

  1. On July 12, 2013, Complainant stated: “I like the pressure and the way you did it.” [ 26.]

 

  1. On September 9, 2013, Complainant stated: “That was awesome.” [ 27.]

 

Additionally, even after being unable to receive payments from the Websites, Complainant remained pleased with Mr. Warner’s work product.  [Sept. 26, 2013 Email, Ex. 28 (“Looks awesome!”); Sept. 30, 2013 Email, Ex. 29 (“Your response to continue settlement conference . . . [w]as good.”).]  It was not until late October 2013, when Mr. Warner informed Complainant that he would no longer work on credit, that Complainant’s praise of his work product turned to allegations of unethical conduct.

* * * *
CONCLUSION

For the reasons stated herein, we respectfully request that you dismiss the bar charge in its entirety for lack of probable cause.

Very truly yours,

JENNINGS, STROUSS & SALMON, P.L.C.

By

J. Scott Rhodes

The post ALERT! Charles “Chuck” Rodrick, aka Charles Gilson appeared first on Kelly / Warner Law | Defamation Law, Internet Law, Business Law.


Source: Kelly Warner Law