Case 5:18-md-02834-BLF Document 885 Filed 06/30/23 Page 1 of 4
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`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
`CHRISTOPHER S. LAVIN (CSB No. 301702)
`clavin@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
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`
`
`IN RE: PERSONALWEB TECHNOLOGIES,
`LLC ET AL., PATENT LITIGATION,
`
`AMAZON.COM, INC., and AMAZON WEB
`SERVICES, INC.,
`Plaintiffs,
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`v.
`PERSONALWEB TECHNOLOGIES, LLC and
`LEVEL 3 COMMUNICATIONS, LLC,
`Defendants.
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`
`
`PERSONALWEB TECHNOLOGIES, LLC and
`LEVEL 3 COMMUNICATIONS, LLC,
`Plaintiffs,
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`v.
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`TWITCH INTERACTIVE, INC.,
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`Defendant.
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`AMZ RESP. TO ADMIN.
`MOT. TO INTERVENE
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`
`
`Case No. 5:18-md-02834-BLF
`Case No. 5:18-cv-00767-BLF
`Case No. 5:18-cv-05619-BLF
`RESPONSE OF AMAZON.COM, INC.,
`AMAZON WEB SERVICES, INC., AND
`TWITCH INTERACTIVE, INC. TO
`ADMINISTRATIVE MOTION TO
`INTERVENE BY THE OWNER-
`INVESTORS WHO DIRECTED
`PERSONALWEB’S MISCONDUCT
`BEFORE THIS COURT
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`CASE NOS.: 5:18-md-02834-BLF;
`5:18-cv-00767-BLF; 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 885 Filed 06/30/23 Page 2 of 4
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`The parties seeking to intervene in this case are four investment and tax avoidance vehicles
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`for the individuals who own and run PersonalWeb. As detailed in Amazon’s other filings, Kevin
`Bermeister, Anthony Neumann, and Murray Markiles operated PersonalWeb and directed its
`misconduct before this Court. (See Dkt. 871-7 at 88-117, 190-230 (Exs. 6-10, 22-35).) When the
`Court ordered PersonalWeb to pay Amazon’s attorney fees, it was these individuals who used a
`fraudulent asset protection scheme to force PersonalWeb into receivership and frustrate the
`judgment. And although the court-appointed receiver should have run PersonalWeb thereafter,
`these same individuals somehow continued to manage its operations and control its behavior in this
`case—refusing compliance with court orders to provide discovery and manufacturing a fake
`“conflict” with Mr. Markiles’ law firm to try to leave PersonalWeb without counsel of record.
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`Messrs. Bermeister, Neumann, and Markiles have now sued Amazon in state court through
`the proposed intervenors for a declaration that those entities are not “alter egos” of PersonalWeb
`liable for the fee award. Amazon counterclaimed. Now Messrs. Bermeister, Neumann, and
`Markiles argue those counterclaims give them the right to speak to the Court also through these
`four additional shell companies that could one day be liable for a supplemental fee award if this
`Court issues one. (Dkt. 883.)
`The Amazon parties provide the following response:
`1.
`If the proposed intervenors are prepared to take responsibility for their conduct in
`this case, then Amazon has no objection to the request. In other words, if the proposed intervenors
`commit that—if the Court issues a supplemental fee award—they will secure it with a supersedeas
`bond pending appeal and guarantee payment, then Amazon agrees that they should be heard.
`2.
`Without such a commitment, there is no basis for the request and respectfully it
`should be denied. The proposed intervenors’ indirect interest in reducing PersonalWeb’s liability
`is already adequately represented by PersonalWeb, and the request is made for an improper
`purpose, as the proposed intervenors merely wish to stop funding the state court receivership (that
`they created to avoid the judgment) since it is no longer to their advantage.
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`ATTORNEYS AT LAW
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`FENWICK & WEST LLP
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`AMZ RESP. TO ADMIN.
`MOT. TO INTERVENE
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`1
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`CASE NOS.: 5:18-md-02834-BLF;
`5:18-cv-00767-BLF; 5:18-cv-05619-BLF
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`Case 5:18-md-02834-BLF Document 885 Filed 06/30/23 Page 3 of 4
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`“The most important factor in determining the adequacy of representation is how the interest
`compares with the interests of existing parties.” Arakaki v. Cayetano, 324 F.3d 1078, 1086 (9th
`Cir. 2003) (citing 7C Wright, Miller & Kane, § 1909, at 318 (1986)). “When an applicant for
`intervention and an existing party have the same ultimate objective, a presumption of adequacy of
`representation arises.” Id. (citing League of United Latin Am. Citizens v. Wilson, 131 F.3d 1297,
`1305 (9th Cir. 1997). To overcome that presumption requires “a compelling showing.” Arakaki,
`324 F.3d at 1086. Specifically, a “petitioner ordinarily must demonstrate adversity of interest,
`collusion, or nonfeasance.” Wilson, 131 F.3d at 1305 n.4.
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`Here, PersonalWeb and the proposed intervenors share the same objective of avoiding
`imposition of further fees. The proposed intervenors’ interest is as “investors” in PersonalWeb—
`it is indirect and based only on contingent future liability—and thus not typically of a type justifying
`intervention. See Gould v. Alleco, Inc., 883 F.2d 281, 285 (4th Cir. 1989) (“In a sense, every
`company’s stockholders ... have a stake in the outcome of any litigation involving the company,
`but this alone is insufficient to imbue them with the degree of ‘interest’ required for Rule
`24(a) intervention.”). But regardless, the proposed intervenors made no attempt to show that
`PersonalWeb has an adverse interest or is “colluding” against them. And they can make no
`“compelling showing” of nonfeasance where there is a court-appointed receiver charged with
`maximizing the value of the PersonalWeb estate, and PersonalWeb already has counsel at Lewis
`Roca—selected by the same investors (see Dkt. 766 at 4)—who is already preparing an opposition
`to the fee request.
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`Moreover, Messrs. Bermeister, Neumann, and Markiles have continued to direct
`PersonalWeb personally despite the receivership. The Court will recall that, while the May 2021
`receivership order empowered the receiver to manage PersonalWeb’s litigations, the receiver
`refused to displace these individuals. (See Dkt. 766 at 4 (PersonalWeb Receiver: “The Receiver is
`advised that PersonalWeb is in the process of retaining counsel to represent it in the District Court
`Action, which retention will be completed the week of July 25, 2022.” (emphasis supplied)); Dkt.
`762 (Hearing Tr. (6/23/22) at 7:6-8 (Stubbs Alderton: “Your Honor, the receiver has his own
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`AMZ RESP. TO ADMIN.
`MOT. TO INTERVENE
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`2
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`CASE NOS.: 5:18-md-02834-BLF;
`5:18-cv-00767-BLF; 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 885 Filed 06/30/23 Page 4 of 4
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`counsel, and his own counsel has refused to engage with us on the very issues before this Court
`today.”); Dkt. 707 (Hearing Tr. (7/20/21) at 11:20-22 (Stubbs Alderton: “More importantly, we
`find ourselves in the middle of a, of a conundrum here with respect to the service issue because
`where we stand with the client and what has been told to us.” (emphasis supplied)).) Amazon’s
`most recent information about this is from September 2022, when the investors refused to allow
`the receiver to file tax returns for PersonalWeb. (Ex. A.) During meet and confer, counsel for the
`proposed intervenors refused to provide any information about Messrs. Bermeister, Neumann, and
`Markiles’s ongoing involvement after that time—despite multiple requests made over weeks.
`Finally, what is happening here is that the investors want to stop funding the receivership
`they created, since it has already served its purpose of preventing enforcement of the Court’s
`judgment while PersonalWeb appealed the rulings in this and its other cases. They want to speak
`to the Court now through different shell companies, since those companies carry insurance that will
`presumably cover the fees. And they are willing to engage in yet another manipulation—creating
`a false impression that there is no money left to defend PersonalWeb—to bring that about. But the
`claim that the receivership will run out of money before PersonalWeb can oppose the supplemental
`fee motion is just not true. The receiver last reported nearly $50,000 in cash on hand as of its last
`report in April and may issue up to $1,000,000 in receiver certificates (Dkt. 883-4 at 3, 5), of which
`approximately $225,000 remains to be called (and the $1,000,000 limit could be increased by the
`Superior Court). Regardless, the proposed intervenors’ desire to stop paying for PersonalWeb’s
`lawyers is not a valid basis for them to intervene in the case.
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`Dated: June 30, 2023
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`FENWICK & WEST LLP
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`By: /s/ Todd R. Gregorian
` Todd R. Gregorian
`
`
`
`
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`Attorney for AMAZON.COM, INC.,
`AMAZON WEB SERVICES, INC., and
`TWITCH INTERACTIVE, INC.
`
`AMZ RESP. TO ADMIN.
`MOT. TO INTERVENE
`
`
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`3
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`CASE NOS.: 5:18-md-02834-BLF;
`5:18-cv-00767-BLF; 5:18-cv-05619-BLF
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`ATTORNEYS AT LAW
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`FENWICK & WEST LLP
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