Case 5:18-md-02834-BLF Document 733 Filed 03/18/22 Page 1 of 8
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`MICHAEL G. FLETCHER (SBN 70849)
`mfletcher@frandzel.com
`CRAIG A. WELIN (SBN 138418)
`cwelin@frandzel.com
`BRUCE D. POLTROCK (SBN 162448)
`bpoltrock@frandzel.com
`FRANDZEL ROBINS BLOOM
`& CSATO, L.C.
`1000 Wilshire Boulevard, Nineteenth Floor
`Los Angeles, California 90017-2427
`Telephone: (323) 852-1000
`Facsimile: (323) 651-2577
`
`Attorneys for Third Parties BRILLIANT
`DIGITAL ENTERTAINMENT, INC.;
`EUROPLAY CAPITAL ADVISORS, LLC;
`CLARIA INNOVATIONS, LLC
`
`
`
`J. DAVID HADDEN (CSB No. 176148)
`dhadden@fenwick.com
`SAINA S. SHAMILOV (CSB No. 215636)
`sshamilov@fenwick.com
`MELANIE L. MAYER (admitted pro hac
`vice)
`mmayer@fenwick.com
`TODD R. GREGORIAN (CSB No. 236096)
`tgregorian@fenwick.com
`RAVI R. RANGANATH (CSB No. 272981)
`rranganath@fenwick.com
`FENWICK & WEST LLP
`Silicon Valley Center
`801 California Street
`Mountain View, CA 94041
`Telephone:
`650.988.8500
`Facsimile:
`650.938.5200
`
`Counsel for AMAZON.COM, INC.,
`AMAZON WEB SERVICES, INC., and
`TWITCH INTERACTIVE, INC.
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`SAN JOSE DIVISION
`
`Case No.: 5:18-md-02834-BLF
`Case No.: 5:18-cv-00767-BLF
`Case No.: 5:18-cv-05619-BLF
`
`JOINT STATEMENT RE AMAZON’S
`MOTION TO COMPEL PRODUCTION
`OF DOCUMENTS FROM THIRD
`PARTIES BRILLIANT DIGITAL
`ENTERTAINMENT, INC., EUROPLAY
`CAPITAL ADVISORS, LLC, AND
`CLARIA INNOVATIONS, LLC
`
`IN RE: PERSONAL WEB TECHNOLOGIES,
`LLC ET AL., PATENT LITIGATION,
`
`AMAZON.COM, INC., and AMAZON WEB
`SERVICES, INC.,
`Plaintiffs
`
`v.
`PERSONALWEB TECHNOLOGIES, LLC and
`LEVEL 3 COMMUNICATIONS, LLC,
`Defendants.
`
`PERSONALWEB TECHNOLOGIES, LLC, and
`LEVEL 3 COMMUNICATIONS, LLC,
`
`Plaintiffs,
`
`v.
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`TWITCH INTERACTIVE, INC.,
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`Defendant.
`
`JOINT STATEMENT RE
`AMAZON’S MTC RFPS
`
`
`
`
`
`CASE NOS. 5:18-md-02834-BLF,
`5:18-cv-00767-BLF, and
`5:18-cv-05619-BLF
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`ATTORNEYS AT LAW
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`FENWICK & WEST LLP
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`Case 5:18-md-02834-BLF Document 733 Filed 03/18/22 Page 2 of 8
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`I.
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`AMAZON’S STATEMENT
`Amazon asks the Court to compel Brilliant Digital Entertainment, Inc. (“Brilliant Digital”),
`Claria Innovations, LLC (“Claria”), and Europlay Capital Advisors, LLC (“Europlay”), insider-
`investors of PersonalWeb Technologies, LLC (“PersonalWeb”), to produce documents in response
`to subpoenas seeking information about their relationship and financial dealings with PersonalWeb.
`The Court previously ruled that PersonalWeb’s misconduct made this case exceptional, and it
`ordered PersonalWeb to reimburse Amazon’s fees and costs. (Dkts. 643, 648, 656.) But further
`misconduct by PersonalWeb and its principals, affiliates, and attorneys has prevented Amazon from
`collecting even a dollar of the Court’s $5,403,122.68 judgment. (Dkt. 708.) There are two basic
`elements to the scheme:
`1. PersonalWeb refused to comply with the Court’s post-judgment discovery orders.
`PersonalWeb refused to pay the judgment, post a supersedeas bond, or respond to discovery
`requests, and refused to comply with two different court orders (Dkts. 664, 704) directing
`PersonalWeb to produce documents and respond to interrogatories. PersonalWeb’s response
`instead was to “fire” its counsel Stubbs Alderton, but only from aspects of this case that concerned
`judgment enforcement. (Stubbs Alderton continued to act as counsel of record as to patent matters,
`and it remains an investor in PersonalWeb with a financial interest in these litigations.) When the
`Court rejected this attempt to evade its authority (Dkt. 685), Stubbs Alderton sought to withdraw
`unconditionally, leaving PersonalWeb in contempt of the Court’s orders and effectively beyond its
`jurisdiction. (Dkt. 688.) Amazon has received only a small production of outdated bank records
`collected without meaningful supervision by Stubbs Alderton. (See Dkt 717.)
`2. PersonalWeb’s principals used its shell-company affiliates to obtain a state court
`receivership over PersonalWeb. The subpoenaed entities are PersonalWeb’s shell company
`investors who serve the same principals.1 The Court’s original fee order prompted this group to
`trigger an asset protection scheme. They demanded that PersonalWeb immediately “repay” $19
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`ATTORNEYS AT LAW
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`FENWICK & WEST LLP
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`1
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`1 All three have the same beneficial owners as PersonalWeb: Claria owned 99% of PersonalWeb
`and had governing authority when PersonalWeb was formed; Kevin Bermeister, the Non-Executive
`Chairman of PersonalWeb, founded Brilliant Digital; and the former chairman and CEO of BDE,
`Kevin Bermeister’s cousin Mark Dyne, founded Europlay. (See Dkt. 717-3 at 3.)
`CASE NOS. 5:18-md-02834-BLF,
`5:18-cv-00767-BLF, and
`5:18-cv-05619-BLF
`
`JOINT STATEMENT RE
`AMAZON’S MTC RFPS
`
`
`
`

`

`Case 5:18-md-02834-BLF Document 733 Filed 03/18/22 Page 3 of 8
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`million in “loans” that do not mature until December 31, 2022. (See id.) They then requested a
`California state court appoint a receiver for their benefit and enjoin any other creditor from
`enforcing claims against PersonalWeb. (Dkt. 717-2.) PersonalWeb’s President Michael Weiss
`signed a declaration prepared on the stationery of the insiders’ counsel consenting to the receiver
`and the injunction. (Dkt. 717-4.) Brilliant Digital and the other insiders are now using the
`receivership to “lend” PersonalWeb additional funds to pay its ongoing business expenses
`(including paying attorneys to continue to pursue claims against Amazon, its customers, and others
`such as Google and Facebook), without paying any of the judgment. (Dkts. 717-7 & 717-8.) Even
`more troubling: the state court ordered the receiver to assume control of the “Collateral,” which
`consists of these legal claims. (Dkt. 717-7.) But the receiver has confirmed that beyond providing
`“big picture” guidance, he has not done so. Instead, he has simply let PersonalWeb’s principals
`(and potentially others, like the insider entities here) continue to run the litigations themselves.
`None of the original state court filings disclosed to that court that PersonalWeb and the insider-
`plaintiffs had the same beneficial owners, or that this group was colluding to prevent PersonalWeb’s
`major creditor, Amazon, from collecting the judgment.2
`Motion to Compel. The scope of post-judgment discovery is “very broad,” with a
`“presumption [] in favor of full discovery of any matters arguably related to the creditor’s efforts
`to trace the debtor’s assets and otherwise to enforce its judgment.” A&F Bahamas, LLC v. World
`Venture Grp., Inc., No. CV 17-8523 VAP (SS), 2018 WL 5961297, at *2 (C.D. Cal. Oct. 19, 2018)
`(citations omitted). And Amazon is entitled to explore corporate relationships and transfers in
`pursuit of alter ego theories. Code Civ. Proc. § 187; Yolanda’s, Inc. v. Kahl & Goveia Commercial
`Real Estate, 11 Cal. App. 5th 509, 512, 515 (2017) (permitting discovery on the relationship
`between the debtor and related parties to establish possible alter ego liability).3 Amazon’s
`
`
`2 In other words, PersonalWeb (i.e., Weiss and Bermeister) have colluded with the insiders (i.e.,
`Bermeister and his family) to try to place PersonalWeb beyond the reach of this Court’s judgment
`while it continues to pursue its business in the normal course.
` Post-judgment discovery is governed by Fed. R. Civ. P. 69(a)(2), which provides, “In aid of the
`judgment or execution, the judgment creditor…may obtain discovery from any person…as
`provided in these rules or by the procedure of the state where the court is located.” (emphasis
`added).
`
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`JOINT STATEMENT RE
`AMAZON’S MTC RFPS
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`2
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`5:18-cv-00767-BLF, and
`5:18-cv-05619-BLF
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`FENWICK & WEST LLP
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`subpoenas seek documents about the relationship of the insider-investors, their financial dealings
`with PersonalWeb, and their involvement in the litigation that resulted in the fee award. (See Exs.
`1-3.) The subpoenaed insiders provided only boilerplate objections. (See Exs. 4-6.)
`The insiders contend that they do not have to produce documents due to the state court
`injunction. This objection is baseless. The District Judge already confirmed on the record that the
`state court injunction does not restrict this Court’s jurisdiction and that the Court can continue to
`issue post-judgment discovery orders. (Dkt. 725 at 3, 13.4) That in and of itself is sufficient, but
`the preliminary injunction also simply does not apply to this action or to the discovery requests at
`issue. First, clause (b) exempts from the injunction “any pending enforcement actions by Defendant
`PersonalWeb concerning it intellectual property claims.” (See Dkt. 717-6 at 4.) PersonalWeb
`initiated this action involving intellectual property claims and the preliminary injunction therefore
`does not purport to enjoin proceedings in this Court. Second, the subpoenas seek discovery from
`non-parties; they simply do not implicate the receivership or the disposition of any PersonalWeb
`assets. (See id.)
`
`STATEMENT OF BRILLIANT DIGITAL, CLARIA, AND EUROPLAY (“THIRD
`PARTIES”)
`
`II.
`
`On May 10, 2021, the Los Angeles Superior Court (Van Nuys) (“Receivership Court”), in
`pending Case No. 21VECV00575, Brilliant Digital Entertainment, Inc., et al., v. PersonalWeb
`Technologies, LLC, et al. (“Receivership Action”) appointed Robb Evans and Associates LLC
`(“Receiver”) as Receiver over Personal Web, pursuant to the Receivership Court’s Order for Ex
`Parte Immediate Appointment of Receiver (“Receivership Order”). The Receivership Court is the
`first and only court to date to have taken jurisdiction over the secured creditors of PersonalWeb,
`PersonalWeb itself, and all of the assets of PersonalWeb, and the subject of the interrelationships
`between and among those parties and those assets. On June 1, 2021, the Receivership Court entered
`its Order for Entry of Preliminary Injunction in Aid of the Receiver (“Injunction Order”), which
`
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`4 At the last case management conference, the District Judge suggested (without taking any position
`on the merits) that Amazon could pursue a second motion to compel compliance along with a
`request for contempt sanctions against both PersonalWeb and Stubbs Alderton. (Dkt. 725 at 10.)
`Amazon is currently considering its options in this regard.
`
`JOINT STATEMENT RE
`AMAZON’S MTC RFPS
`
`
`
`3
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`CASE NOS. 5:18-md-02834-BLF,
`5:18-cv-00767-BLF, and
`5:18-cv-05619-BLF
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`ATTORNEYS AT LAW
`
`FENWICK & WEST LLP
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`
`
`

`

`Case 5:18-md-02834-BLF Document 733 Filed 03/18/22 Page 5 of 8
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`confirmed the Receiver’s appointment and enjoined certain actions by PersonalWeb, its creditors,
`judgment holders, and others. Amazon has had notice of and received service of the Injunction
`Order. The Subpoena violates the Injunction Order, which Order provides, in part:
`
` …
`
` IT IS FURTHER ORDERED that except by leave of this Court, during the pendency of
`the receivership ordered herein, Defendant PersonalWeb, and all of its customers,
`principals, investors, collectors, stockholders, lessors, other creditors, judgment holders,
`and other persons seeking to establish or enforce any claim, debt, right, lien, or interest
`against Defendant PersonalWeb, or any of its subsidiaries or affiliates, and all others acting
`for or on behalf of such persons, attorneys, trustees, agents, sheriffs, constables, marshals,
`and any other officers and their deputies, and their respective attorneys, servants, agents,
`and employees, be and are hereby stayed from:
`
`(a)
`Commencing, prosecuting, continuing, or enforcing any suit, judgment, lien,
`levy, or proceeding against Defendant PersonalWeb, or any of its subsidiaries or affiliates,
`except such actions may be filed to toll any applicable statute of limitations; …
`
` … (d) Using self-help or executing or issuing, or causing the execution or issuance of
`any court attachment, subpoena, replevin, execution, levy, writ, or other process for the
`purpose of impounding or taking possession of or interfering with, or creating or enforcing
`a lien upon, any property, wheresoever located, owned by, claimed by, or in the possession
`of Defendant PersonalWeb, or any of its subsidiaries or affiliates, or the Receiver appointed
`pursuant to this Order or any agent appointed by said Receiver; and
`
`(e)
`Doing any act or thing whatsoever to interfere with the Receiver taking control
`or possession of, or managing the property subject to this receivership; or in any way to
`interfere with the Receiver; or to harass or interfere with the duties of the Receiver; or to
`interfere in any manner with the exclusive jurisdiction of this Court over the property and
`assets of Defendant PersonalWeb, or its subsidiaries or affiliates. …
`
`A court appointing a receiver has exclusive jurisdiction over receivership property.
`(O’Flaherty v. Belgum (2004) 115 Cal.App.4th 1044, 1062, citing 2 Clark on Receivers (3d
`ed.1959), § 548(a), p. 889.) Further, “it must be held, in conformity with the general rule of comity
`established by a long line of authority, that the court which first takes the subject matter of a
`litigation into its control for the purpose of administering the rights and remedies with relation to
`specific property obtains thereby jurisdiction so to do, to the exclusion of the exercise of a like
`jurisdiction by other tribunals …” (Cutting v. Bryan (1929) 206 Cal. 254, 257 [state court quiet
`title action dismissed where federal receivership action filed first].) This principle applies to both
`federal and state courts. (Princess Lida of Thurn and Taxis v. Thompson (1939) 305 U.S. 456, 466,
`59 S.Ct. 275, 280 [“[T]he principle applicable to both federal and state courts [is] that the court first
`assuming jurisdiction over property may maintain and exercise that jurisdiction to the exclusion of
`the other …”].)
`
`JOINT STATEMENT RE
`AMAZON’S MTC RFPS
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`4
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`CASE NOS. 5:18-md-02834-BLF,
`5:18-cv-00767-BLF, and
`5:18-cv-05619-BLF
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`ATTORNEYS AT LAW
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`FENWICK & WEST LLP
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`ATTORNEYS AT LAW
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`FENWICK & WEST LLP
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`5
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`On August 10, 2021, Amazon moved to intervene in the Receivership Action, and as set
`forth in the proposed Complaint in Intervention specifically sought to involve Third Parties (and
`Monto Holdings Pty LTD ["Monto"]) in the Amazon disputes with PersonalWeb. On November
`17, 2021, the Receivership Court denied Amazon’s intervention motion because, in part, Amazon
`has alternative ways to assert it positions as to PersonalWeb, and the secured creditors, in the
`Receivership Action. Then, on January 14, 2022, Amazon filed a Petition for Writ of Supersedeas
`with the California state Second District Court of Appeal (“2DCA”), seeking to stay the
`Receivership Action pending Amazon’s appeal of the intervention denial order. Amazon again lost,
`the Court of Appeal having denied the writ petition on February 17, 2022. But, Amazon’s appeal
`of the intervention denial order remains pending with the 2DCA. Amazon also has pending in the
`Receivership Court its motion to stay the action. Amazon has invoked the jurisdiction of both the
`Receivership Court and the 2DCA with respect to these disputes.
`The Subpoena is also improper discovery under the doctrines of federalism and comity to
`be shown by a federal court to a state court, and under Fed. R. Civ. P. 69(a)(2), which not only is a
`contempuous violation of the Injunction Order by Amazon and its legal counsel, but also seeks to
`circumvent Amazon’s two Receivership Action losses regarding its attempt to intervene to become
`an active litigant in the state court at this time - because doing so would interfere with the
`Receivership. The Subpoena is also an improper “end run” to the discovery Amazon wants in the
`Receivership Action, but to which it is not entitled - at this time - because it is not a party to the
`Receivership action as a result of the Receivership Court’s denial of leave to intervene, and it is
`premature in the Receivership Action for any such litigation activities, under the rulings of the
`Receivership Court and the 2DCA.
`The Subpoena further appears to be an attempt by Amazon to disrupt and interfere with the
`funding of the Receivership by plaintiffs in the Receivership Action (Third Parties and Monto)
`(“Secured Creditors”), and the duties of the Receiver. On December 8, 2021, the Receivership
`Court granted Receiver’s motion authorizing the Receiver to borrow money from the Secured
`Creditors and issue receivership certificates therefor in an aggregate amount up to $1,000,000 to
`fund litigation that could ultimately result in a very significant recovery for PersonalWeb. This not
`CASE NOS. 5:18-md-02834-BLF,
`5:18-cv-00767-BLF, and
`5:18-cv-05619-BLF
`
`JOINT STATEMENT RE
`AMAZON’S MTC RFPS
`
`
`
`

`

`Case 5:18-md-02834-BLF Document 733 Filed 03/18/22 Page 7 of 8
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`only appears to be an attempt by Amazon to disrupt that funding by causing the Secured Creditors
`to spend money, notwithstanding the Injunction Order, dealing with Amazon’s Subpoena, but is an
`actual attempt to disrupt the funding in the Receivership Action. The receivership assets are IP
`litigation proceedings that are the secured creditors collateral, MAINLY AGAINST AMAZON.
`This is a direct attack to disrupt that litigation and its funding.
`
`Respectfully submitted,
`FENWICK & WEST LLP
`
`Dated: March 18, 2022
`
`By: /s/ J. David Hadden
`J. DAVID HADDEN
`
`Attorney for AMAZON.COM, INC., AMAZON
`WEB SERVICES, INC., and TWITCH
`INTERACTIVE, INC.
`
`
`
`
`
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`Dated: March 18, 2022
`
`FRANDZEL ROBINS BLOOM & CSATO, L.C.
`
`
`
`By: /s/ Bruce D. Poltrock
`BRUCE D. POLTROCK
`
`Attorney for Third Parties BRILLIANT
`DIGITAL ENTERTAINMENT, INC.;
`EUROPLAY CAPITAL ADVISORS, LLC;
`CLARIA INNOVATIONS, LLC
`
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`
`
`
`
`JOINT STATEMENT RE
`AMAZON’S MTC RFPS
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`5:18-cv-00767-BLF, and
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`Case 5:18-md-02834-BLF Document 733 Filed 03/18/22 Page 8 of 8
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`CERTIFICATION OF CONCURRENCE IN FILING
`I, J. David Hadden, am the ECF user whose identification and password are being used to
`file this Joint Statement. In compliance with N.D. Cal. Civil L.R. 5-1(h)(3), I hereby attest that
`Bruce D. Poltrock has concurred in this filing.
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`Dated: March 18, 2022
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`/s/ J. David Hadden_____
`J. DAVID HADDEN
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`JOINT STATEMENT RE
`AMAZON’S MTC RFPS
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