Case 5:18-md-02834-BLF Document 919 Filed 12/05/23 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
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`Counsel for AMAZON.COM, INC.,
`AMAZON WEB SERVICES INC., and
`TWITCH INTERACTIVE, INC.
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`SAN JOSE DIVISION
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`IN RE: PERSONALWEB TECHNOLOGIES,
`LLC ET AL., PATENT LITIGATION,
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`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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`
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`Case No. 5:18-md-02834-BLF
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`Case No. 5:18-cv-00767-BLF
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`Case No. 5:18-cv-05619-BLF
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`RESPONSE OF AMAZON.COM, INC.,
`AMAZON WEB SERVICES, INC., AND
`TWITCH INTERACTIVE, INC. TO
`PERSONALWEB’S SUPPLEMENTAL
`OPPOSITION TO MOTION FOR
`FURTHER SUPPLEMENTAL FEES
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`PERSONALWEB TECHNOLOGIES, LLC and
`LEVEL 3 COMMUNICATIONS, LLC,
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`Plaintiffs,
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`v.
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`TWITCH INTERACTIVE, INC.,
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`Defendant.
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`ATTORNEYS AT LAW
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`FENWICK & WEST LLP
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`RESPONSE TO PERSONALWEB’S SUPP OPP TO
`MOTION FOR FURTHER SUPPLEMENTAL FEES
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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 919 Filed 12/05/23 Page 2 of 4
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`The Court afforded PersonalWeb an opportunity to show why the Court should deduct fees
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`that Amazon spent litigating alter ego issues. (Dkt. 913 (Tr. 11/16/23) at 12:20-14:10, 25:19-25.)
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`To that end, the Court instructed the parties to attempt to reach an agreement concerning at least
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`the amount of fees corresponding to the objection. (Id. at 26:1-12, 27:6-11; see also Dkt. 912.)
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`The parties conferred but did not reach agreement. Consequently, Amazon now responds to
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`PersonalWeb’s supplemental brief.
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`1.
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`There Should Be No Deduction.
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`Amazon respectfully submits that there should be no deduction. The disputed fees relate to
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`discovery taken to support Amazon’s attempt to enforce the judgment in this case. (Declaration of
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`Todd R. Gregorian, ¶ 3.) That work continues to focus on core issues related to enforcing a
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`judgment, including PersonalWeb’s assets and liabilities, PersonalWeb’s relationship with its
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`principals and to other entities, and transfers among those persons and entities. Understanding
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`these financial interrelationships is necessary, for example, to trace PersonalWeb’s assets and
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`identify potential fraudulent transfers—i.e., issues that are independent of (even if they overlap
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`with) an alter ego theory. (Id.) And all of this work became necessary only because of
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`PersonalWeb’s collusion with its principals and the subpoenaed third parties to manufacture
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`insolvency. To be sure, alter ego is one potential theory that Amazon has pursued in discovery;
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`Amazon planned to pursue that theory in this case via a motion to add alter egos to the judgment,
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`and, though it hopes to avoid this outcome, could still do so at least as to individuals and entities
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`not named in the state proceeding. See Fed. R. Civ. P. 69; Cal. Civ. Proc. Code §187; (Gregorian
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`Decl., ¶ 4). It is perverse for PersonalWeb to assert now that this work relates solely or even
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`primarily to a different “case” just because its principals filed a separate declaratory judgment suit
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`against Amazon claiming that they are not the alter egos of PersonalWeb.1 It cannot possibly be
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`the case that a party can immunize itself from a fee award by unilaterally filing a new case
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`1 That case was filed on February 27, 2023, well after Amazon propounded subpoenas on the
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`PersonalWeb “investors” in winter-spring 2022 and completed most of the work reflected in the
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`disputed billing entries. (Dkts. 871-7 at 122-134; 733-1, 733-2, 733-3, 771-1.)
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`RESPONSE TO PERSONALWEB’S SUPP OPP TO
`MOTION FOR FURTHER SUPPLEMENTAL FEES
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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 919 Filed 12/05/23 Page 3 of 4
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`addressing overlapping issues. To the contrary, where discovery has a dual purpose (i.e., it is useful
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`for a patent litigation and in another proceeding), the Federal Circuit has deemed fees relating to
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`that discovery recoverable. See Monolithic Power Sys., Inc. v. O2 Micro Int’l Ltd., 726 F.3d 1359,
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`1369-70 (Fed. Cir. 2013).
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`Elsewhere, PersonalWeb has conceded the point. At the motion hearing, PersonalWeb’s
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`counsel argued that disentangling these issues is impossible:
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`[I]t’s largely impossible to untangle certain aspects of this discovery to the point
`that actually -- PersonalWeb’s position is that any fees incurred in pursuit of the
`alter ego -- the alleged alter egos, secured creditors assets or information, is not
`available to Amazon.
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`(Dkt. 913 (Tr. 11/16/23) at 13:8-12 (emphasis supplied).) And this flip-flopping (a common theme
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`in this case) gets worse. PersonalWeb’s principals forcefully objected to the use of discovery from
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`this case in the state court proceedings, compelling Amazon to seek a modification of this Court’s
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`protective order. (Dkt. 858.) By now asking for a further discount of over $560,000.00,
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`PersonalWeb seeks to immunize itself from fees of its own creation. Having dug its hole even
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`deeper, it now pleads for a ladder from this Court. But to give one would create the very “new road
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`map” for bad actors that this Court is trying to avoid. (Dkt. 913 (Tr. 11/16/23) at 23:1-10.)
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`2.
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`If There Is to Be a Deduction, It Should Be Far Less Than What PersonalWeb
`Claims.
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`PersonalWeb has taken this second chance to substantiate its objection as an opportunity to
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`try to cleave off fees wholly unrelated to the alter ego issue. This is evident in many of the billing
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`entries PersonalWeb identified, which reflect work that relates to tasks either unrelated to the alter
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`ego issue or overlapping with other issues, e.g., seeking enforcement discovery from the
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`PersonalWeb “investors,” dealing with PersonalWeb’s receiver, and opposing withdrawal of
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`PersonalWeb’s prior counsel. (See, e.g., Dkt. 911-1 at 3 (Feb. 4, 2022: “Conduct legal and factual
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`research on subpoenas to PersonalWeb investors (2.0); Discussions regarding receivership with
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`team and receiver (0.4).”); id. (Feb. 10, 2022: “Attention to judgment enforcement issues including
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`subpoenas to insider investors and Stubbs proposed motion to withdraw as counsel.”); id. at 191
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`(Dec. 5, 2022: “Analyze PersonalWeb document production, coordinate review with team, and
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`RESPONSE TO PERSONALWEB’S SUPP OPP TO
`MOTION FOR FURTHER SUPPLEMENTAL FEES
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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 919 Filed 12/05/23 Page 4 of 4
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`conduct records research.”).) During the hearing, Amazon explained that it agreed that there must
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`be a cut-off date for fees litigation in this Court, and that the filing of the alter ego case seemed to
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`be a natural place. (Dkt. 913 (Tr. 11/16/23) at 16:16-17:2.) But that was a concession to the need
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`to end fee litigation in this Court; it was not a concession that PersonalWeb has any valid objection
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`to the fees requested for work performed in this case.
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`PersonalWeb argues that all judgment enforcement work after August 3, 2021 pertained
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`exclusively to alter ego because Amazon “should have” known then that PersonalWeb was
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`insolvent and there was no other means to enforce. (Dkt. 910 at 2:25-27.) But that is wrong. Not
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`only did Amazon have to fight for months after that date to obtain information about the
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`receivership, to this day Amazon has no guarantee that the receiver took possession of all
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`PersonalWeb’s assets. (See Gregorian Decl., ¶ 9; Ex. B.) PersonalWeb’s principals continue to
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`refuse to certify that they have turned everything over to the receiver. PersonalWeb’s argument
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`about discovery from Messrs. Bermeister and Markiles pertaining only to alter ego is incorrect for
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`the same reasons. (See Dkt. 910 at 4:3-22.) Mr. Bermeister ran PersonalWeb and Mr. Markiles
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`designed its asset protection scheme and manages two of its “investors.” Discovery from and about
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`these individuals, as well as “PersonalWeb’s corporate structure” and the “loans between
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`PersonalWeb and the Secured Creditors,” was necessary to uncover concealed assets and identify
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`fraudulent transfers.
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`Given all this, if the Court imposes a deduction, Amazon proposes the approach in its
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`declaration, consisting of excluding entries that relate solely to alter ego issues, plus a percentage
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`of the entries that pertain to review of documents from the PersonalWeb “investors.” Such an
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`approach fairly accounts for the potential use of these documents in the state court alter ego action.
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`Dated: December 5, 2023
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`FENWICK & WEST LLP
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`By: /s/ Todd R. Gregorian
` Todd R. Gregorian
`Attorney for Amazon.com, Inc.,
`Amazon Web Services, Inc., and
`Twitch Interactive, Inc.
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`RESPONSE TO PERSONALWEB’S SUPP OPP TO
`MOTION FOR FURTHER SUPPLEMENTAL FEES
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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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