Posts Tagged ‘legal extortion’

Script anachronism sinks idea-theft claim

Writers Ronnie Niederman and Judith Shangold sued Disney, claiming that in publishing “Summerland,” a novel by author Michael Chabon with a baseball theme, the entertainment giant’s Miramax Books subsidiary had ripped off one of their own 1995 idea submissions to Disney. Trouble is, the theatrical plot they claimed to have submitted in 1995 contained numerous references to the Palm Pilot personal organizer, a product not introduced until 1997. Citing “voluminous, independent and irrefutable evidence” that the plaintiffs did not create the treatment at the time they said they did, federal judge William H. Pauley concluded “that there was ‘clear and convincing’ evidence that the plaintiffs had committed a fraud on the court and ‘manipulated the judicial process.'” He dismissed their case and ordered them to pay Disney’s legal fees in an amount to be determined later. (Mark Hamblett, “Judge Blasts Bogus Proof, Rejects Claim Against Disney”, New York Law Journal, Jan. 18). Jonathan Edelstein comments at Head Heeb (Jan. 21).

Update: Indictments in Roberts sex/extortion case

We reported June 13, 2004:

According to a story in the San Antonio Express-News, husband-and-wife legal partners Ted H. and Mary Schorlemer Roberts received money in a curious sequence of events. Mary, claiming to seek “no strings” discreet encounters, would seduce men over an Internet dating service. Ted would then write the men (in legal documents sometimes typed by Mary) and notify them that he planned to seek intrusive and public civil discovery to investigate whether the affair brought forward potential causes of action that were flimsy at best; the men would pay tens of thousands of dollars for a release and confidentiality agreement.

The Roberts couple’s bankruptcy trustee has since sued the Express-News over the story, on the theory that it “invaded their privacy, inflicted emotional distress and drove them into bankruptcy.” But a Texas grand jury has voted to indict the two on three charges of “theft” (which, in Texas, encompasses extortion); the FBI decided that federal charges weren’t possible. The Roberts couple’s attorney predicts they’ll be exonerated. “You can rest assured that I believe that lawyers are held to the same standards as everyone else in the community,” Bexar County District Attorney Susan Reed said. “The law doesn’t carve out the word ‘lawyer'” for special protection.” (Maro Robbins and Joseph S. Stroud, “Pair facing extortion indictment”, San Antonio Express-News, Sep. 1). The story does not detail what happened to the Roberts’ former partner, Robert V. West III, who originally brought the allegations to light; in return, the Roberts sued him and the Texas bar chose to investigate West rather than the Roberts.

The old Curmudgeonly Clerk weblog explored the legal legitimacy of the underlying Roberts lawsuits back in 2004.

In the original story, the newspaper asked Texas law professor and legal ethics specialist John Dzienkowski if legal ethics prohibited the Roberts’ tactics. “In the spectrum of Rambo litigation, and in the spectrum of trying to push people a little bit, just sending that piece of paper is probably on the mild side,” said Dzienkowski. “That’s why ethically I don’t really see a problem with it.” But who says reform of the legal profession is needed?

Says he owns “stealth”, “hoax”, “chutzpah”

Abuses of trademark law:

Over the last few years, Leo Stoller has written dozens of letters to companies and organizations and individuals stating that he owns the trademark to “stealth.” He has threatened to sue people who have used the word without his permission. In some cases, he has offered to drop objections in exchange for thousands of dollars. And in a few of those instances, people or companies have paid up….

Mr. Stoller owns and runs a company called, which offers, among other things, advice on sending cease-and-desist letters and Mr. Stoller’s services as an expert witness in trademark trials. Through Rentamark, Mr. Stoller offers licensing agreements for other words he says he owns and controls, such as bootlegger, hoax and chutzpah, and sells t-shirts and other merchandise through what the Web site calls its “stealth mall.”

Stanford lawprof Mark A. Lemley says Mr. Stoller’s sweeping claims are “based on a misunderstanding of how trademark law works” and that courts would be unlikely to assign liability unless a rival company’s use of a word led to consumer confusion with some product or service offered by his enterprises. However, many companies he has targeted are reluctant to incur the legal fees involved in defending their use of the words; one of his companies appeared before one federal judge in Chicago 33 times between 1995 and 1997 alone to assert its rights. (Colin Moynihan, “He Says He Owns the Word ‘Stealth’ (Actually, He Claims ‘Chutzpah,’ Too)”, New York Times, Jul. 4).

BlackBerry squeezed

The Canadian maker of the wireless email device in March agreed to pay $450 million to settle the claims of NTP, a company which manufactures nothing and instead makes its way in the world by asserting rights in old patents. Not all is sweetness and light, however: “Critics of the patent system maintain that these companies — called ‘patent trolls’ by their detractors — rely on excessively broad patents, particularly for software, that should never have been granted in the first place.” For more on the controversy over patent-licensing firms, see various posts on our technology and intellectual property page. (Ian Austen and Lisa Guernsey, “A Payday for Patents ‘R’ Us”, New York Times, May 2).

More on the $105 million Aramark verdict

We previously reported (Jan. 21) on Daniel Lanzaro’s drunk driving accident litigation; the little girl he paralyzed won a $105 million verdict against Aramark over beer sales at Giants Stadium because Lanzaro did some of his drinking there that day, in part by bribing a beer vendor to ignore Aramark’s two-beer-per-purchase rules. (Before the game, Lanzaro purchased a six-pack of Heineken; he did some drinking at two strip-clubs after the game, as well.) The New Jersey Law Journal has more on the case:

  • The NFL defendants settled for $700,000, despite prevailing on a summary judgment motion;
  • Judge Richard Donohue excluded evidence that Antonia Verni’s father might have prevented the injuries to his daughter had he put the two-year-old in a car seat rather than an adult seat-belt;
  • Verni also sued Toyota; Verni’s Corolla didn’t fare well when Lanzaro’s pickup slammed into it head-on, and Toyota paid $190,000 to get out of the case;
  • There’s collateral litigation to be had among plaintiffs’ family members and sets of lawyers over who gets the money. And, of course, there will be an appeal.

As previously reported, the judge also excluded evidence of Lanzaro’s two previous drunk-driving arrests. (Henry Gottlieb, “In Wake of Record $105M Verdict, Fee Fights and Coverage Contests Emerge”, Feb. 2; Wayne Coffey, “Wasted Innocence”, NY Daily News, Jan. 30; Kibret Markos, “Expert backs beer vendor”, The Record, Jan. 12). As famous sportswriter/treacle-author Mitch Albom notes, “Either your stadium goes dry, or people will leave drunk.”

A correction: we previously reported that the entire $135 million verdict was awarded against Aramark; in fact, $30 million of the verdict is damages against the drunk driver, Daniel Lanzaro, who had already settled for the limits of his insurance coverage. Aramark’s share is $30 million compensatory, $75 million punitive, and about $6-7 million in interest, with the interest continuing to accumulate. After he settled with the plaintiffs, Lanzaro changed his story to be more favorable to the Vernis’ case. (Ana M. Alaya, “Lawyer for Giants Stadium beer vendor loses bid for mistrial”, Newark Star-Ledger, Jan. 13).

An additional thought: A big argument for plaintiffs at trial was the claim that Aramark, which serves to the two million or so fans who attend football games at Giants stadium each year, had been averaging about seven complaints a year for selling beer to drunks, but only took disciplinary action a fraction of the time. The press hasn’t covered Aramark’s response to this assertion, but one wonders if fear of employment litigation stayed its hand. Earlier damned-if-you, damned-if-you-don’t files include Aug. 30.

Another point: A reader writes to note that Aramark was probably selling watered-down beer, which would be further evidence that post-game drinking was responsible for Lanzaro’s .266 blood-alcohol level, though, again, it shouldn’t matter: Aramark didn’t make the guy drive drunk.

Marshall, Texas: Patent Central

“In the last several years, patent lawyers have flocked to Marshall, a small northeastern Texas town of 25,000, because of its speedy court process, patent-enthusiastic judges and juries considered ideal for hearing intellectual property cases. This year alone, the court has seen 59 patent cases, more than triple the total in 2003, which saw just 14 patent suits.” Intel made a $150 million payout after adverse rulings by a Marshall judge, and Cisco is currently being sued in what plaintiff’s lawyers hope will be a big-payout case.

Among those who defend the venue against critics is Charles Baker of Houston’s Porter & Hedges, who concedes “that some defense attorneys are afraid to try cases there because of its pro-plaintiff reputation, which he disagrees with. He said that the [court’s] rocket docket also turns off some defense lawyers who feel pressured to produce evidence quickly, leaving little time for preparation.” Curiouser and curiouser: “Baker said that Marshall’s large elderly population also provides a good jury pool for intellectual property cases. ‘There are a lot of old people who don’t have a problem with sitting weeks at a time and listening to complicated issues,’ Baker said.” (Tresa Baldas, “Texas IP Rocket Docket Headed for Burnout?”, National Law Journal, Dec. 28)

For a very different view of the reasons for Marshall’s popularity, check out M. Craig Tyler (Wilson Sonsini), “Patent Pirates Search for Texas Treasure”, Texas Lawyer, Sept. 20 (PDF): “Juries in East Texas, unlike those in Houston, Dallas or Austin, are much less likely to have a member with any technical training or education, which exacerbates the problem from the defense perspective, but makes East Texas federal courts an attractive venue for would-be plaintiffs, who know that the jury will, instead, gravitate toward softer or superficial issues that are difficult to predict.” The result is to facilitate the activities of what Tyler calls “patent pirates”: enterprises that exist to file patent suits rather than to manufacture products, and which benefit from asymmetrical costs of litigation (discovery in a patent case can cost the manufacturer-defendant a million dollars or more, while the plaintiff license-holder may have few or no documents worth discovering).

According to Tyler, a “simple, nonspecific complaint”, which need not identify any infringing products sold by the defendant, “has a nuisance value of a few hundred thousand dollars the minute it is filed and served.” Tyler’s outspoken article in turn drew a response: Michael C. Smith, “”Patent Pirates” Only Exist in Neverland”, Texas Lawyer, Oct. 10 (PDF).

“Sex, lawyers, secrets at heart of sealed legal case”

According to a story in the San Antonio Express-News, husband-and-wife legal partners Ted H. and Mary Schorlemer Roberts received money in a curious sequence of events. Mary, claiming to seek “no strings” discreet encounters, would seduce men over an Internet dating service. Ted would then write the men (in legal documents sometimes typed by Mary) and notify them that he planned to seek intrusive and public civil discovery to investigate whether the affair brought forward potential causes of action that were flimsy at best; the men would pay tens of thousands of dollars for a release and confidentiality agreement. (As the law firm’s web site puts it, “We believe in a team approach.”) Because of Texas’s permissive legal ethical rules, prosecutors decided they couldn’t pursue extortion charges; state law permits Roberts to bring “creative” claims and to take discovery in advance of filing a lawsuit, and the prosecution had no way of proving that Roberts’s intent in submitting the documents was a bluff rather than a “legitimate” lawsuit.

The newspaper found out only because another lawyer, Robert V. West III, sought to raise the scheme as part of a separate business dispute with the Roberts; fans of poetic justice will note that the Roberts accuse West of blackmail, and brought disciplinary charges against West and his lawyer to the state bar. The bar is investigating West, but, apparently, not the Roberts. Everyone involved denies any wrongdoing. Roberts unsuccessfully brought suit to prevent publication of the story, but the court records remain sealed. (Maro Robbins and Joseph S. Stroud, Jun. 13) (via Bashman).