Case 5:18-md-02834-BLF Document 742-11 Filed 04/22/22 Page 1 of 10
`Case 5:18-md-02834-BLF Document 742-11 Filed 04/22/22 Page 1 of 10
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`EXHIBIT 10
`EXHIBIT 10
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`TODD R. GREGORIAN (CSB No. 236096)
`tgregorian@fenwick.com
`CHRISTOPHER S. LAVIN (CSB No. 301702)
`clavin@fenwick.com
`FENWICK & WEST LLP
`555 California Street, 12th Floor
`San Francisco, CA 94104
`Telephone:
`415.875.2300
`Facsimile:
`415.281.1350
`
`Michael J. Baratz (Pro Hac Vice)
`MBaratz@steptoe.com
`Steven Davidson (Pro Hac Vice)
`sdavidson@steptoe.com
`STEPTOE & JOHNSON LLP
`1330 Connecticut Avenue, NW
`Washington, D.C. 20036
`Telephone:
`202.429.6468
`Facsimile:
`202.261.0557
`
`ATTORNEYS FOR AMAZON.COM, INC.,
`AMAZON WEB SERVICES, INC., and
`TWITCH INTERACTIVE, INC.
`SUPERIOR COURT OF THE STATE OF CALIFORNIA
`COUNTY OF LOS ANGELES, NORTHWEST DISTRICT (VAN NUYS)
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`BRILLIANT DIGITAL ENTERTAINMENT,
`INC., a Delaware corporation; EUROPLAY
`CAPITAL ADVISORS, LLC, a Delaware limited
`liability company; CLARIA INNOVATIONS,
`LLC, a Delaware limited liability company; and
`MONTO HOLDINGS PTY LTD, an Australian
`company,
`
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`v.
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`PERSONALWEB TECHNOLOGIES, LLC, a
`Texas limited liability company; and DOES 1
`through 100, Inclusive,
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`Defendant.
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`Plaintiff,
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` Case No.: 21VECV00575
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`NOTICE OF MOTION AND MOTION
`FOR STAY PENDING APPEAL BY
`AMAZON.COM, INC., AMAZON WEB
`SERVICES, INC., AND TWITCH
`INTERACTIVE, INC.; MEMORANDUM
`OF POINTS AND AUTHORITIES
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`Date Action Filed: April 27, 2021
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`DATE: April 27, 2022
`TIME: 8:30 AM
`DEPT: U
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`RESERVATION ID: 353103174119
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`NOTICE OF MOTION AND MOTION FOR STAY PENDING
`APPEAL; MEMO OF POINTS AND AUTHORITIES
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`Case No.: 21VECV00575
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`Electronically FILED by Superior Court of California, County of Los Angeles on 12/13/2021 12:44 PM Sherri R. Carter, Executive Officer/Clerk of Court, by A. Boyadzhyan,Deputy Clerk
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`Case 5:18-md-02834-BLF Document 742-11 Filed 04/22/22 Page 3 of 10
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`NOTICE OF MOTION
`TO THE COURT, ALL PARTIES AND THEIR COUNSEL OF RECORD:
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`PLEASE TAKE NOTICE THAT, at an upcoming date at the Court’s discretion per the Joint
`Stipulation and [Proposed] Order submitted on November 29, 2021, at 8:30 AM PT, in Superior
`Court of California, County of Los Angeles (Northwest District), 6320 Sylmar Ave., Van Nuys,
`CA 91401, before Department U, Amazon.com, Inc., Amazon Web Services, Inc., and Twitch
`Interactive, Inc. (collectively, “Amazon”) will move this Court for a stay pending appeal of this
`action. This application is made on the grounds that Amazon intends to appeal this Court’s denial
`of its motion for leave to intervene in this action and an automatic stay is warranted under Code of
`Civil Procedure § 916. In the alternative, Amazon seeks a discretionary stay.
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`This application will be based upon this notice, the memorandum of points and authorities
`in support, the records and filed in this action, and any further evidence and argument that the Court
`may receive at or before the hearing.
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`Dated: December 2, 2021
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`FENWICK & WEST LLP
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`By: /s/ Todd R. Gregorian
`Todd R. Gregorian
`
`Attorneys for AMAZON.COM, INC., AMAZON
`WEB SERVICES, INC., and TWITCH
`INTERACTIVE, INC.
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`NOTICE OF MOTION AND MOTION FOR STAY
`PENDING APPEAL; MEMORANDUM OF POINTS AND
`AUTHORITIES
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`MEMORANDUM OF POINTS AND AUTHORITIES
`On November 17, 2021, the Court denied the motion of Amazon.com, Inc., Amazon Web
`Services, Inc., and Twitch Interactive, Inc. (collectively, “Amazon”) for leave to intervene as
`plaintiff-creditors in the receivership action filed by insider plaintiffs Brilliant Digital
`Entertainment, Inc., Europlay Capital Advisors, LLC, Claria Innovations, LLC, and Monto
`Holdings Pty Ltd. (collectively, “Insiders”) against defendant PersonalWeb Technologies, LLC
`(“PersonalWeb”). The Court’s decision denying intervention is appealable as it “finally and
`adversely determines the right of the moving party to proceed in the action.” Noya v. A.W. Coulter
`Trucking, 143 Cal. App. 4th 838, 841 (2006). Amazon intends to appeal and moves for a stay of
`the entry of judgment pending the outcome of the appeal.
`FACTUAL BACKGROUND
`I.
`The Court is familiar with the core issue in this case: all of PersonalWeb’s tangible and
`intangible assets have been pledged as collateral for the approximately $19 million of purported
`loans issued by Insiders, and PersonalWeb owes Amazon approximately $5.4 million on a judgment
`based on an attorneys’ fees and costs award issued by the United States District Court for the
`Northern District of California after Amazon prevailed in patent litigation (and was affirmed by the
`Federal Circuit). Amazon alleges that all four secured creditors are insiders, with the same
`beneficial owner as PersonalWeb, and that the swift action taken to shift PersonalWeb’s assets into
`the receivership was intended to thwart Amazon’s efforts to collect the judgment. Amazon
`therefore sought to intervene as a plaintiff-creditor, because it has an interest in the property
`involved in this litigation (the assets of PersonalWeb) and is so situated that any judgment rendered
`in its absence, prioritizing the claims of Insiders, may well impair or impede Amazon’s ability to
`protect that interest.
`On August 27, 2021, 17 days after Amazon filed its motion for leave to intervene, Insiders
`and PersonalWeb filed a stipulation for entry of judgment in favor of Insiders and against
`PersonalWeb that remains pending before the Court. If judgment is entered, and the assets are
`dispersed to Insiders and spent, it might be impossible to unscramble the egg even if Amazon
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`NOTICE OF MOTION AND MOTION FOR STAY
`PENDING APPEAL; MEMORANDUM OF POINTS AND
`AUTHORITIES
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`Case 5:18-md-02834-BLF Document 742-11 Filed 04/22/22 Page 5 of 10
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`prevailed on its appeal and was granted leave to intervene. A stay is necessary to preserve the status
`quo until Amazon’s appeal has been resolved and would permit all interested parties to know that
`the assets would only be distributed once, after all issues were resolved.1
`ARGUMENT
`II.
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`The Denial of a Motion to Intervene Is Appealable as of Right.
`A.
`Amazon is entitled to appeal this Court’s order denying the motion to intervene. “‘An order
`denying a motion to intervene is appealable when it finally and adversely determines the right of
`the moving party to proceed in the action.’” Crestwood Behavioral Health, Inc. v. Lacy, 70 Cal.
`App. 5th 560, 572 (2021) (citing Noya v. A.W. Coulter Trucking 143 Cal. App. 4th 838, 841 (2016));
`see also Hodge v. Kirkpatrick Dev., Inc., 130 Cal. App. 4th 540, 547 (2005) (“An order denying a
`motion for leave to intervene is directly appealable because it finally and adversely determines the
`moving party’s right to proceed in the action.” (emphasis added)). Here, the Court’s denial of
`Amazon’s motion to intervene finally and adversely prevents Amazon from proceeding in the
`action and is thus appealable.
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`A Stay Pending Appeal Is Justified.
`B.
`Amazon is entitled to an automatic stay pending appeal under Code of Civil Procedure
`§ 916. Cal. Code Civ. P. § 916(a) (“[T]he perfecting of an appeal stays proceedings in the trial
`court upon the judgment or order appealed from or upon the matters embraced therein or affected
`thereby, including enforcement of the judgment or order . . . .”). In the alternative, Amazon is
`entitled to a stay subject to this Court’s discretion to stay proceedings in the interests of justice and
`to promote judicial efficiency. See Daly v. San Bernardino Cty. Bd. of Supervisors, 11 Cal. 5th
`1030, 1039 (2021); Reed v. Super. Ct., 92 Cal. App. 4th 448, 454-55 (2001); Cal. Code Civ. P.
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`1 While it appears PersonalWeb’s 84 claims against Amazon and its customers (the “Kessler
`Cases”), now pending as a certiorari petition before the Supreme Court, may constitute the bulk of
`the assets in the Receivership, there are also “a series of cases filed by PersonalWeb against various
`companies including Google, You Tube, Facebook, EMC, VMware and Apple, Inc.” relating to
`Section 101 of the Patent Act (the “101 Cases”). Declaration of M. Val Miller in Support of
`Receiver’s Motion for an Order Authorizing Issuance of Receiver’s Certificates (“Miller Decl.”)
`¶¶7–8. Both the Kessler Cases and the 101 Cases would continue to be litigated, even if the stay
`requested by Amazon were granted, as the Receiver’s Motion demonstrates.
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`PENDING APPEAL; MEMORANDUM OF POINTS AND
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`Case No.: 21VECV00575
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`§ 918. To be clear, Amazon seeks a limited stay precluding the entry of the stipulated judgment
`(or any judgment), or disbursement of any assets to Insiders, pending Amazon’s appeal. Amazon
`does not seek a stay of other activities by the Receiver, such as the Receiver taking prudent steps
`to marshal assets for the benefit of all creditors or requesting receiver’s certificates.
`“The purpose of the automatic stay provision of section 916(a) ‘is to protect the appellate
`court’s jurisdiction by preserving the status quo until the appeal is decided.’” Varian Med. Sys.,
`Inc. v. Delfino, 35 Cal. 4th 180, 189 (2005) (quoting Elsea v. Saberi, 4 Cal. App. 4th 625, 629
`(1992)). “‘The [automatic stay] prevents the trial court from rendering an appeal futile by . . .
`conducting other proceedings that may affect it.’” Id. (quoting Elsea, 4 Cal. App. 4th at 629). Such
`a stay is triggered where, as here, the “postjudgment [or postorder] proceedings on the matter would
`have any effect on the ‘effectiveness’ of the appeal”—an effectiveness eviscerated if the very
`purpose of the appeal is to avoid the need for that proceeding (thereby leading to an “inherently
`inconsistent” outcome). Id. at 189–90 (quoting In re Marriage of Horowitz, 159 Cal. App. 3d 377,
`381 (1984)).
`Here, Amazon is entitled to an automatic stay because the instant proceedings are embraced
`and will be affected by the issue being appealed. Amazon’s Motion was directed to the disposition
`of PersonalWeb’s assets, challenging the prioritization of Insiders’ claim to the assets under the
`doctrine of equitable subordination. If the Court of Appeals finds that Amazon’s intervention is
`proper and Amazon succeeds on the merits upon remand, Insiders’ claim would be subordinated to
`Amazon’s claim, as unsecured creditors take priority over the Insiders, which are all owned and
`controlled by the same ultimate beneficial owner. However, if the assets are dispersed first to
`Insiders and are insufficient to satisfy both Insiders and Amazon—as the Receiver’s Motion for an
`Order Authorizing Issuance of Receiver’s Certificates indicates may be the case—Amazon’s appeal
`would be rendered ineffective and moot. Accordingly, the automatic stay provision under § 916(a)
`is triggered and Amazon is entitled to a stay pending appeal.
`Assuming arguendo the Court finds an automatic stay is not warranted, the Court has “the
`power to issue discretionary stays” where “‘the fruits of a reversal would be irrevocably lost unless
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`NOTICE OF MOTION AND MOTION FOR STAY
`PENDING APPEAL; MEMORANDUM OF POINTS AND
`AUTHORITIES
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`the status quo is maintained.’” Daly, 11 Cal. 5th at 1039 (quoting People ex rel S. F. Bay etc. Com.
`v. Town of Emeryville, 69 Cal.2d 533, 537 (1968)); see also Veyna v. Orange Cty. Nursery, Inc.,
`170 Cal. App. 4th 146, 157 (2009) (“An application for a stay of a judgment should, wherever
`possible, be made first in the superior court.”).
`If this Court enters the stipulated judgment in favor of Insiders in advance of the appeal,
`Amazon will be irreparably harmed. Amazon would be unfairly precluded from disputing issues
`of legal liability and damages because the controversy would be rendered moot. Where, as here,
`the question on appeal involves a “difficult question[] of law” and is the only means available to
`“preserve . . . the fruits of a meritorious appeal,” good cause exists for this Court to stay the instant
`proceeding. Daly, 11 Cal. 5th at 1039; see id. at 1051 (“The goal of a stay is to preserve the status
`quo while a court determines the merits of the appeal; issuance of the stay cannot depend on the
`assumption that the appeal will fail.”). Furthermore, Insiders would not be prejudiced by a stay of
`the entry of judgment. Should a stay be entered, the Receiver could continue to marshal assets for
`the benefit of all creditors, as evidenced by the Receiver’s Motion for an Order Authorizing
`Issuance of Receiver’s Certificates (requesting funds to pay attorneys’ fees and thus allow the
`litigations that form the basis of the collateral to continue). Insiders have repeatedly amended and
`re-stated the loans over the last decade, most recently in 2019 with a maturity date of December
`31, 2022, and only recently declared a default. Time is not of the essence, and Insiders will not be
`prejudiced if the actual foreclosure of the collateral—which is already secure inside the
`Receivership—is stayed until the completion of Amazon’s appeal.
`III. CONCLUSION
`Amazon intends to establish on appeal that it has a direct interest in this litigation, “of such
`direct or immediate character, that [Amazon] will either gain or lose by the direct legal operation
`and effect of the judgment,” and should therefore be permitted to intervene. Simpson Redwood Co.
`v. State, 196 Cal. App. 3d 1192, 1200 (1987) (citation omitted). Amazon requests that this Court
`stay entry of judgment in this matter pending Amazon’s appeal.
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`PENDING APPEAL; MEMORANDUM OF POINTS AND
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`Case 5:18-md-02834-BLF Document 742-11 Filed 04/22/22 Page 8 of 10
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`Dated: December 2, 2021
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`FENWICK & WEST LLP
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`By: /s/ Todd R. Gregorian
`Todd R. Gregorian
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`Attorneys for AMAZON.COM, INC., AMAZON
`WEB SERVICES, INC., and TWITCH
`INTERACTIVE, INC.
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`PENDING APPEAL; MEMORANDUM OF POINTS AND
`AUTHORITIES
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`Case 5:18-md-02834-BLF Document 742-11 Filed 04/22/22 Page 9 of 10
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`PROOF OF SERVICE
`The undersigned declares as follows:
`I am a citizen of the United States and employed in Santa Clara County, State of California.
`I am over the age of eighteen years and not a party to the within-entitled action. My business
`address is Fenwick & West LLP, 801 California Street, Mountain View, CA 94041. On the date
`set forth below, I served a copy of the following document: NOTICE OF MOTION AND MOTION
`FOR STAY PENDING APPEAL BY AMAZON.COM, INC., AMAZON WEB SERVICES, INC., AND
`TWITCH INTERACTIVE, INC.; MEMORANDUM OF POINTS AND AUTHORITIES on the interested
`parties in the subject action by placing a true copy thereof as indicated below, addressed as follows:
`
`
`Michael Gerard Fletcher
`Craig A. Welin
`Bruce David Poltrock
`Frandzel Robins Bloom & Csato, L.C.
`1000 Wilshire Boulevard, 19th Floor
`Los Angeles, CA 90017-2427
`mfletcher@frandzel.com
`cwelin@frandzel.com
`bpoltrock@frandzel.com
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`Attorneys for Plaintiffs
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`Ronald Richards
`Law Offices of Ronald Richards & Associates, A P.C.
`P.O. Box 11480
`Beverly Hills, CA 90213
`ron@ronaldrichards.com
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`Attorneys for Defendant
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`Alan M. Mirman
`Michael E. Bubman
`Mirman, Bubman & Nahmias, LLP
`21860 Burbank Blvd., Suite 360
`Woodland Hills, CA 91367
`amirman@mbnlawyers.com
`mbubman@mbnlawyers.com
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`Attorneys for Receiver
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`
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`BY ONLEGAL ELECTRONIC ONLINE COURT SERVICES: The document was sent
`by electronic service by transmitting a true and correct pdf version via each individuals’ email
`addresses(s) through OneLegal Electronic Online Court Services.
`
`
`BY E-MAIL: The document was sent electronically via email at the email address(es)
`indicated on the attached service list, under C.C.P. § 1010.6, C.R.C. Rules 2.251 and 3.751,
`and First Amended General Order – In Re Los Angeles Superior Court – Mandatory
`Electronic Filing For Civil.
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`I declare under penalty of perjury under the laws of the State of California and the United
`States that the above is true and correct.
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`Date: December 2, 2021
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`/s/ Marti Guidoux
`Marti Guidoux
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