Professional Documents
Culture Documents
INTRODUCTION
On or about April 8, 2015, Terry Bollea filed a motion to add a claim for punitive
damages entitling him, upon success of the motion, to financial worth discovery of the1
1
* * *ELECTRONIC ALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY***
Defendants. Aware of this, on April 22, 2015, Gawker proposed a streamlined discovery process
to which the Court agreed. Ex. I.1 On May 29, 2015, this Court granted Terry Bolleas motion
to add a claim for punitive damages and denied the motion of Gawker Media, LLC (Gawker)
and the two individual defendants (collectively Gawker Defendants) for summary judgment on
that claim. Ex. 2. Accordingly, the Court also granted Mr. Bolleas request for discovery of
Gawker Defendants respective net worths. Ex. 3. After Gawker Defendants failed to produce
relevant and responsive documents, Mr. Bollea moved to compel, and the motion was granted in
part on July 20, 2015, with Gawker Defendants ordered to produce additional documents. Ex. 4;
Ex. 5.
Gawker Defendants, as they have so many times during this litigation, have again
obstructed legitimate discovery and failed to produce responsive documents required under the
Courts July 20, 2015 order. The omitted items include the following:
The Transfer Pricing Study. The Court ordered Gawker Defendants to produce the
governing documents and intercompany agreements between Gawker, Kinja and Gawker Media
Group, Inc. When the Gawker Defendants produced a licensing agreement, it revealed that the
fee used to transfer all of Gawkers profits to Kinja is calculated pursuant to a transfer pricing
study. Gawker Defendants refuse to produce this economic analysis / transfer pricing study that
they performed to determine the license fee that Gawker pays to Kinja, the Hungarian sister
company which purports to own the intellectual property utilized by Gawker to generate its
millions of dollars in annual profits. Pursuant to its license, Gawker pays millions of dollars to
Kinja every year, which substantially affects its net worth. Thus, Mr. Bollea is entitled to
determine how the fee Gawker is paying Kinja is calculated and whether it actually corresponds
to their actual value or is a sham to reduce Gawkers net worth.12
1Unless otherwise noted, exhibits are to the concurrently filed Affidavit of Charles J. Harder.
2
The recent revelation that this transfer pricing study exists should result in sanctions.
This study was requested over and over again in discovery, and Gawker Defendants deliberately
concealed it.
and subsidiary of Gawker Media Group, Inc., licenses intellectual property rights to Gawker
Media, LLC and is paid millions of dollars per year for those rights. If these rights are priced
based on their actual value, similar to an arms-length transaction with any IP licensor, that would
be one thing, but if they are overpriced, as Mr. Bollea strongly suspects, this scheme would
permit Gawker Media, LLC to artificially reduce its net worth.4
The Gawker-Kinja license agreement expressly states that the license fee is based on a
transfer pricing study contained in a document bearing the name of the Mayer Brown law firm.
Ex. A Conf. Aff. C. Harder. Mr. Bollea previously requested this study, and Gawker Media,
LLC responded that no non-privileged documents exist. As part of a large privilege log that
they produced, Gawker Defendants listed the document, but misleadingly described it as an
economic analysis in order to conceal it and prevent its discovery. Ex. 6.
After several meet and confer letters, Gawker Defendants expressly stated that they were
claiming that the transfer pricing studythe valuation of the intellectual property rights that
Gawker Media, LLC licenses from Kinja, KFT and pays millions of dollars foris protected by
the lawyer-client privilege. Ex. 7.
Gawker Defendants position is completely contrary to Florida law. Florida law provides
that a precondition to the assertion of the lawyer-client privilege is the provision of legal advice,
a doctrine that is specifically conceived to prevent what Gawker Defendants are doing here:
cloaking non-legal advice in the privilege by routing it through a law firm. [W]here a lawyer is
engaged to advise a person as to business matters as opposed to legal matters, or when he is
employed to act simply as an agent to perform some non-legal activity for a client the authorities
uniformly hold there is no privilege." Skorman v. Hovnanian, 382 So.2d 1376, 1378 (Fla. 4th
DCA 1980) (emphasis added).
A persuasive federal case holds that this rule applies to law firms providing asset
valuations. In re Asousa Partnership, 2005 WL 3299823 (E.D. Pa. Nov. 17), involved a
discovery request for e-mails concerning an appraisal of a companys assets. The appraisal was
routed through a law firm to create a privilege claim. The Court rejected the privilege claim:
Even assuming communications from Liegel fall within any attorney-client privilege between H
& W and Smithfield, the subject of these e-mails is an appraisal of Pennexx assets by Valuation
Research. While Liegel states that H & W is the party engaging [Valuation Research's]
services, other e-mails make it abundantly clear that this was a ghost-hiring on Smithfield's
behalf to create the appearance of attorney-client privilege over the appraisal, as was H & W's
subsequent receipt and laying of hands upon the report.... Liegel's communication with H &
W is not for the purpose of Smithfield securing legal advice/services, and the privilege does not
attach.
Asousa Partnership is directly on point here. Mayer Brown is a major law firm and is in
the business of providing legal advice, not asset valuations. In addition, even if it did provide an
asset valuation, it would not be protected by the lawyer-client privilege because it would not
constitute legal advice. It is clear that having the transfer pricing analysis originate from
Mayer Brown was a ghost hiring for no other purpose than to create a phony privilege claim.
Gawker Defendants should therefore be compelled to produce all transfer pricing studies.
III.
responsive to Mr. Bolleas request for discovery of Dentons irrevocable family trust
documents. Ex. 5. The request on which the Court entered its order compelling production
read as follows: Mr. Bollea is entitled to documents sufficient to show the ownership interests
and voting rights of the trust that owns certain shares of GMGI, as well as the consideration paid
for such shares, the date of creation of the trust, and the date that the shares of GMGI were
deposited into the trust. These documents are necessary to value Dentons ownership interest in
GMGI. Ex. 4.
Importantly, the shares in the trust were originally owned by Mr. Denton and were
transferred by him into the trust, which ostensibly benefits his own close family members.
Ex. B Conf. Aff. C. Harder (Denton Tr.) (Q. And were you the grantor of those shares. A. They
were originally my shares, yes. {id. at 152:14-17); Q. Who were the beneficiaries of the trust.
A. My niece and two nephews. {id. at 153:20-22); Q. Who is the trustee. A. My sister. {id.at
154:6-7)). While Denton denies having any control over the trust, he could not recall any
instance of his sister voting the trusts shares. {Id. at 155:23-156:8.)
Further, despite Dentons denials of control, at least two media articles profiling him,
written by reporters who interviewed him for the articles, have quoted or paraphrased him as
saying that he has majority ownership and control of Gawker through his shares and the shares
controlled by the family trust. Ex. 8 (Lloyd Grove, The Gospel According to Nick Denton- What
Next for the Gawker Founder, The Daily Beast (Dec. 14, 2014): Personally and through a
family trust, Denton says he owns 68 percent of his privately-held, Cayman Islands-registered
company.); Ex. 9 (Allyson Shontell, Gawker Media Generated $45 Million in Net Revenue Last
Year And I t s Raising a $15 Million Round o f Debt, Business Insider (Jan. 28, 2015): Through a
family trust, Denton owns 68% of the company. He says insiders own 90% of Gawker Media.).
Mr. Denton claimed in his deposition that he was misquoted by these two separate reporters in
these two separate publications. This claim is not worthy of beliefit is clear that Denton was
telling reporters he had a controlling interest in the company because the family trust is just a
mechanism by which he does, indeed, hold such control.
Gawker Defendants have flatly disobeyed this Courts order, asserting that neither
Denton nor Gawker Media, LLC has control over trust documents. This argument is based on
an overly-narrow conception of control. Whether documents are within a partys control is
broadly construed and includes whether the party has the right, authority, or practical ability to7
obtain the materials sought on demand. Saewitz, 79 So.3d at 834; see also Costa v. Kerzner
Intern. Resorts, Inc., 277 F.R.D. 468, 47071 (S.D. Fla. 2011).
Gawker Defendants have provided no evidence whatsoever that Denton or Gawker lack
the practical ability to obtain Dentons family trust documents on demand. In fact, Mr. Denton
admitted at his deposition that he could obtain information about the trust. (Q.... Because I
dont have an understanding of when the trust was created or when the... family actually
acquired ownership in the shares through the trust..., we dont have that information. You have
access to that information; is that correct? A. I can get that information, yes.) (Ex. B Conf.
Aff. C. Harder (Denton Tr. at 158:7-15), emphasis added).
There is no doubt that the family trust documents are of crucial relevance to the issue of
Dentons net worth. Denton owns a plurality of the shares in GMGI; if his shares are added to
those purportedly owned by his family, he owns a majority. Thus, the trust documents will show
whether Denton truly controls those shares and whether his GMGI shares are subject to a control
premium and thus worth more.
IV.
pricing study with a misleading designation in a lengthy privilege log. Now, they have made
clear that they are claiming that a study valuing intellectual property assets was somehow legal
advice because it was routed through a law office. Further, Gawker Defendants are claiming
that Gawker and Denton cannot obtain trust documents that they were already ordered to
produce and can clearly obtain if they wished to. Accordingly, Gawker Defendants are engaged
in a transparent effort to prevent legitimate discovery, and as a result, Mr. Bollea has once again
been forced to file a motion to obtain discovery that should have already been produced, in order
to defeat meritless make-work objections. This is the continuation of a three year long pattern
and practice of obstruction of legitimate discovery by Gawker Defendnats. Mr. Bollea therefore
respectfully requests that Gawker Defendants be required to bear the fees of the Special
Discovery Magistrate in this matter, and that Gawker Defendants pay a monetary sanction of
$11,485 to Mr. Bollea to reimburse Mr. Bollea for attorneys fees which would never have been
incurred but for Gawker Defendants obstruction.
V.
worth depositions. At that time, the parties were a few days away from commencing the trial which appeared to be the reason for the Courts denial of this request.
Now that the trial has been continued, this timing factor is no longer a concern.
Mr. Bollea discovered a number of significant facts through the discovery ordered on July 20,
2015, and should be permitted brief additional examinations of Gawker Defendants to address
these newly discovered facts, as well as obtain updated financial worth information from
defendants. Gawker Defendants produced some of the most significant documents regarding net
worth after their depositions. Mr. Bollea should be permitted an opportunity to follow-up on
these developments.
VI.
CONCLUSION
For the foregoing reasons, the Special Discovery Magistrate should recommend that
Gawker Defendants be ordered to produce all transfer pricing studies relating to the rights fees
paid to Kinja, KFT for intellectual property licenses, and documents sufficient to show the
ownership interests and voting rights of Dentons family trust, as well as the consideration paid
for shares in GMGI, the date of creation of the trust, and the date that the shares were deposited
into the trust. Gawker Defendants should further be sanctioned in the amount of $11,485 and
required to bear the costs of the Special Discovery Magistrate in hearing and determining this
motion. Finally, Mr. Bollea should be permitted to conduct follow-up depositions of Gawker
Media, LLC and Nick Denton, questioning them about any documents produced after the
previous depositions, and any related matters.
Dated: October 9, 2015
Respectfully submitted,
/s/ Kenneth G. Turkel_________________________
Kenneth G. Turkel, Esq.
Florida Bar No. 867233
Shane B. Vogt
Florida Bar No. 0257620
BAJO | CUVA | COHEN | TURKEL
100 North Tampa Street, Suite 1900
Tampa, Florida 33602
Tel: (813)443-2199
Fax: (813) 443-2193
Email: kturkcl@bajocuva.com
Email: svot@baiocuva.com
-andCharles J. Harder, Esq.
PHVNo. 102333
Douglas E. Mirell, Esq.
PHVNo. 109885
Jennifer J. McGrath, Esq.
PHVNo. 114890
HARDER MIRELL & ABRAMS LLP
132 South Rodeo Drive, Suite 301
Beverly Hills, CA 90212-2406
Tel: (424) 203-1600
Fax:(424)203-1601
Email: chardcf@hmarirm.com
Email: dmirell@hmafirm.com
Email: jmcarath@hmanrm.com
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HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by
e-mail via the e-portal system this 9th day of October, 2015 to the following:
Barry A. Cohen, Esquire
Michael W. Gaines, Esquire
The Cohen Law Group
201 E. Kennedy Blvd., Suite 1950
Tampa, Florida 33602
bcohen@tampalawfirm.com
maaincs@tampalawfirm.com
ihalle@tampalawfinn.com
mwalsh@tampalawnrm.com
Counsel for Heather Clem
Allison M. Steele
Rahdert, Steele, Reynolds & Driscoll, P.L.
535 Central Avenue
St. Petersburg, FL 33701
amnestee@aol.com
asteele@rahdertlaw.com
ncampbell@rahdertlaw.com
Attorneys for Intervenor Times Publishing
Company
Timothy J. Conner
Holland & Knight LLP
50 North Laura Street, Suite 3900
Jacksonville, FL 32202
timothv.conner@hklaw.com
11
12
attorney duly licensed to practice before all courts of the State of California, among other courts.
I am a partner at the law firm Harder Mirell & Abrams LLP, counsel (admittedpro hac vice) for
Plaintiff Terry Gene Bollea, professionally known as Hulk Hogan. The statements made herein
are based on my personal knowledge.
ELECTRONICALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY*
2.
Attached hereto as Exhibit 1 are true and correct exceipts from the transcript of
Attached hereto as Exhibit 2 are true and correct exceipts from the transcript of
5.
Attached hereto as Exhibit 4 is Plaintiff Terry Bolleas June 22, 2015 Motion to
Compel.
6.
7.
Attached hereto as Exhibit 6 are true and correct excerpts from defendant Gawker
What Next for the Gawker Founder (Lloyd Grove, The Daily Beast, Dec. 14,2014).
10.
Net Revenue Last Year and I t s Raising a $15 Million Round o f Debt (Allyson Shontell, Business
Insider, Jan. 28,2015).
11.
the Gawker document production, the meet and confer process, and this motion. Ms. McGrath
worked for at least four hours. Her billing rate is $525. Mr. Esper worked for at least seven
hours. His billing rate is $495. In addition, Shane Vogt, from Bajo Cuva Cohen Turkel, worked
for one hour on this matter, and his regular billing rate is $415. I have worked at least one (1)
hour on this matter. My standard billing rate, and billing rate in this case, is $550 per hour. In2
addition, I expect Mr. Esper will work at least five (5) hours on reviewing the Opposition papers
and preparing the Reply Brief; Mr. Vogt and I will each spend at least one (1) hour on the same;
I will spend one (1) hour to prepare for the hearing on this matter; and Mr. Vogt and I will spent
one (1) hour to attend and present oral argument at the hearing on this matter before the Special
Discovery Magistrate. These rates are consistent with the rates charged for legal seivices of a
comparable nature, performed by lawyers with similar experience, reputation, ability, skill and
expertise. Accordingly, Mr. Bollea has incurred, and reasonably expects to incur, monetary
sanctions in the amount of $11,485, in connection with this matter, to reimburse Mr. Bollea for
the fees incurred.
12.
The amount of time expended on this matter was reasonably necessary to achieve
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Item #5910
Exhibit 1
* * *ELECTRONICALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY***
1
IN THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT
OF THE STATE OF FLORIDA, IN AND FOR PINELLAS COUNTY
vs.
HEATHER CLEM; GAWKER MEDIA, LLC,
aka GAWKER MEDIA, et al.,
Defendants.
---------------/
DATE:
TIME:
PLACE:
REPORTED BY:
Pages 1 - 113
_____________________________________________________________________ 51
MR. TURKEL:
jurisdictional stuff?
MR. HARDER:
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financial worth.
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MR. HARDER:
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punitive damages.
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THE COURT:
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MR. BERLIN:
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Sure.
I have a suggestion which may be
helpful.
MR. HARDER:
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gotten that.
So we haven't
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MR. BERLIN:
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MR. HARDER:
________________________________________________________________52
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MR. BERLIN:
No.
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What I
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29th.
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And we can
_____________________________________________________ 53
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things.
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THE COURT:
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have m n n e d e a r n o t h e r
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THE COURT:
MR. BERLIN:
THE COURT:
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Not yet.
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So -- and personally
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Montana.
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MR. HARDER:
17th.
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MR. BERLIN:
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that.
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coordinating now.
THE COURT:
MR. BERLIN:
THE COURT:
up May 29th.
can't, we can't.
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MR. BERLIN:
And
I gave
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We understand.
I want to
It's being
And we understand by
________________________________________________________________59
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MR. TURKEL:
When you
discovery.
THE COURT:
frames.
He's saying if
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we give up giving it
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discovery.
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MR. BERLIN:
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adjudicate that.
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THE COURT:
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60
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we hri v c t . r . o
t..o r e s o l v e o b j e c t , i o n s
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agreeing
to.
And w h a t t h e y ' r e
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the Court.
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That's,
MR. Bi i i f i j l d:
fine.
dmcje,
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just
of ;
s o v; e' r e ( t e a r ,
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motion,
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resolve
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29th,
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no t h a t
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t.hat
ready
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ready to prounce.
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it,
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bwt. h e ' s
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that
t h e n on t r i e
staff
ready-
he';-: g o i n g t o - -
if
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MR. TURKEL:
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Judge?
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MR. BERLIN:
In all seriousness,
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Your Honor
THE COURT:
MR. TURKEL:
Judge.
each other.
We're fine.
MR. BERLIN:
Friday.
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She's going to
MR. TURKEL:
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MR. BERLIN:
sense.
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MR. HARDER:
my
THE COURT:
MR. BERLIN:
Just a second.
in Hungary or --
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THE COURT:
over there.
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MR. TURKEL:
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Budapest, Judge.
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MS. DIETRICK:
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THE COURT:
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MR. HARDER:
Great.
My only question, Your Honor,
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time.
________________________________________________________________ 64
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I don't know.
date.
MR. TURKEL:
It takes us 20 minutes to
Your Honor.
THE COURT:
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MR. TURKEL:
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THE COURT:
I think
He's
Yes, Judge.
A couple things.
On the motion
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MR. BERLIN:
Also, on the
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today.
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THE COURT:
one binder.
I understand.
Exhibit 2
* * *ELECTRONICALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY***
Plaintiff,
v.
HEATHER CLEM; GAWKER MEDIA, LLC;
et al.,
Defendants Motion for Summary Judgment on Punitive Damages, dated May 27, 2015. The
Court also considered the Court file, and heard argument of counsel, and is otherwise fully
advised. Accordingly, the Court FINDS:
(1)
Pursuant to section 768.72, Florida Statutes, Mr. Bollea seeks leave of Court to
add claims for punitive damages against Gawker Defendants by interlineation to his First
Amended Complaint.
(2)
Mr. Bollea filed his Motion for Leave to Add a Claim for Punitive Damages on
April 3, 2015. In support, on April 3, 2015, Mr. Bollea filed 42 exhibits, including deposition
testimony, responses to requests for admissions, and other documentary evidence.
(3)
On May 8, 2105, Gawker Defendants filed their Motion for Summary Judgment
on Mr. Bolleas Proposed Claim for Punitive Damages, as well as a Combined Brief on Punitive
Damages and a Statement of Undisputed Material Facts on Punitive Damages.
(4)
Pursuant to Rule 1.190(f), Fla. R. Civ. P., the hearing on Mr. Bolleas Motion for
Leave to Add Claim for Punitive Damages was held more than twenty (20) days after Mr.
Bolleas Motion for Leave to Amend to Assert a claim for Punitive Damages and supporting
evidence were filed and served.
(5)
In order to add a claim for punitive damages, Mr. Bollea must make a
reasonable showing through evidence in the record or proffered that would provide a
reasonable basis for recovery of such damages. See Fla. Stat. 768.72(1).
(6)
On April 3, 2015, Mr. Bollea filed evidence in the record, which this Court has
carefully reviewed, which establishes a reasonable basis for the recovery of punitive damages
against Gawker Defendants.
(7)
establish a reasonable basis upon which a reasonable jury could find clearly and convincingly
that punitive damages are warranted in this case.
It is thereupon, ORDERED and ADJUDGED that:
(1)
Mr. Bolleas Motion for Leave to Add a Claim for Punitive Damages is
GRANTED.
(2)
Mr. Bollea may re-file his First Amended Complaint containing a claim for
as amended by interlineation, is required, and Gawker Defendants are deemed to have denied
Mr. Bolleas claim for punitive damages.
(4)
DENIED.
Exhibit 3
* * *ELECTRONICALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY***
1
IN THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT
OF THE STATE OF FLORIDA, IN AND FOR PINELLAS COUNTY
TERRY GENE BOLLEA, professionally
known as HULK HOGAN,
Plaintiff,
vs.
DATE:
TIME:
PLACE:
BEFORE:
Pages 1 to 131
______________________________________________________________ 113
1
3
4
THE COURT:
MR. BERLIN:
Yes.
On the discovery -- Your Honor, as
we'd get
10
11
12
13
requests.
14
15
Mr. Thomas about this, and they both said that this
16
is unheard of.
17
18
19
20
21
22
23
24
25
______________________________________________________________ 114
1
you're worth.
And
10
11
12
13
14
15
voluminous discovery.
16
17
18
19
20
top of page 4.
21
22
worth.
23
24
25
115
1
one.
and we've
part of
10
11
12
13
14
15
16
THE COURT:
17
18
on one by one?
19
20
MR. BERLIN:
Yeah.
21
THE COURT:
22
MR. BERLIN:
Right.
-- I don't know that there is, you
23
24
give those.
25
116
10
Somebody
11
on the subject.
12
13
14
more narrow.
15
16
17
18
19
20
it.
21
One of them
22
23
24
25
And we think
And I
______________________________________________________________ 117
1
Tuesday.
6
7
8
9
10
11
12
13
That's
this.
14
15
16
17
18
memorializes that.
19
20
that.
21
22
23
subject, so --
24
THE COURT:
25
MR. BERLIN:
Thank you.
Thanks.
______________________________________________________________ 118
1
THE COURT:
MR. VOGT:
THE COURT:
I get to tell --
MR. VOGT:
THE COURT:
10
MR. VOGT:
11
THE COURT:
12
MR. VOGT:
13
case.
14
15
16
discovery.
17
18
19
20
21
22
23
24
25
damages.
____________________________________________________________________ 1 1 9
this case.
10
absolutely fine.
11
12
13
14
15
16
17
18
19
20
punitive damages.
And
21
22
23
information.
24
25
You get
____________________________________________________________________ 1 2 0
under oath.
important subject.
process.
10
11
12
This is where --
13
THE COURT:
14
backup.
15
MR. VOGT:
16
THE COURT:
Pardon me?
They're giving you, though, the
17
backup.
18
19
20
company is worth.
21
MR. VOGT:
They're
22
23
24
25
THE COURT:
Here is my concern.
Our
____________________________________________________________________ 1 2 1
MR. VOGT:
THE COURT:
MR. VOGT:
THE COURT:
punitive damages.
10
11
12
there.
13
MR. VOGT:
14
THE COURT:
15
16
17
18
19
to.
20
MR. VOGT:
21
22
time left.
23
24
25
122
10
11
THE COURT:
Thank you.
12
MR. VOGT:
13
THE COURT:
14
All right.
I'm sorry.
I cut it short.
that?
15
MR. BERLIN:
16
THE COURT:
I think here
I think
17
18
19
20
21
22
23
24
25
123
1
further inquire.
MR. BERLIN:
two things.
ten.
10
depositories.
11
12
13
14
15
16
17
What we're
18
19
20
21
22
23
24
25
Right?
124
1
T h e y ' v e a l s o now a s k e d f o r d e p o s i t i o n s
o f each
o f t h e p e o p l e on t h a t
them f o r t h e end o f J u n e .
com bination,
But i f
a n s w e r t h e q u e s t i o n w h a t a r e y o u w o r t h w i t h o u t some
a d d itio n a l piece
th at
Your H onor,
10
A nd,
y o u know,
the
w h i l e t h a t w ould seem v e r y u n l i k e l y .
in fo rm atio n ,
th a t's
s u b j e c t and w e 'v e s c h e d u le d
of in fo rm atio n ,
a n d we o b j e c t t o
and th e y want to
I h a v e no o b j e c t i o n
th at th a t's
to
come b a c k t o
th at.
what y o u 'r e h e re
I th in k
for --
11
THE COURT:
R ig h t.
12
MR. BERLIN:
13
THE COURT:
14
--
to re so lv e th a t d is p u te ,
A ll r ig h t .
so - -
Thank you.
15
16
17
18
19
20
wanted?
21
22
MR. BERLIN:
the 2nd.
23
THE COURT:
24
MR. BERLIN:
25
3rd?
If I could look at Ms. Smith and
find out.
125
1
MS. SMITH:
3
4
I think, yes.
MR. BERLIN:
10
depositions.
If we can do Thursday or
11
THE COURT:
12
MS. SMITH:
13
THE COURT:
Okay.
14
MR. BERLIN:
15
that production, so --
16
THE COURT:
17
MR. BERLIN:
18
I'm sorry.
Yes, I'm sorry as well.
apologize.
19
THE COURT:
20
Thursday.
21
the
22
So -- all right.
MR. BERLIN:
So by 5:00
All right?
And with
23
24
25
126
1
2
MR. BERLIN:
THE COURT:
MR. BERLIN:
Yes.
My understanding, again, this is
10
11
12
13
jury.
14
THE COURT:
15
going to go forward.
16
17
18
19
information.
20
decision.
21
22
MR. TURKEL:
23
to do it that way.
24
25
Exhibit 4
* * *ELECTRONICALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY***
hearing, the parties agreed and the Court ordered that Gawker Defendants would provide certain
financial worth discovery to Mr. Bollea, with the caveat that Mr. Bollea would be entitled to seek
additional discovery if Gawker Defendants responses were incomplete. Most notably, Gawker
Defendants were required to provide documents sufficient to show... Gawkers, Dentons and
Daulerios actual and estimated net worth. Mr. Bollea was hopeful that Gawker Defendants
would, as promised, provide discovery sufficient to determine their net worth. Unfortunately,
this has not occurred.
Gawker Defendants instead produced minimal, incomplete documentation, and general,
unsubstantiated testimony regarding their net worth. They produced some tax returns. They
produced some financial statements. They produced some year-end, undetailed account
statements. Gawker Defendants produced as little information as possible while still attempting
to make it appear as if they were complying with the Courts order.
Many of the documents Gawker Defendants produced demonstrate that other relevant
documents exist that were not provided to Mr. Bollea. Additionally, on June 16-17, 2015, Mr.
Bolleas counsel incurred the cost and expense of preparing for and traveling to New York to
take the depositions of Gawker Defendants regarding their net worth. These depositions
confirmed that Gawker Defendants failed to produce numerous documents that are necessary
and relevant to establishing their net worth. Many of these documents are easily accessible by
Gawker Defendants on their computers and other devices.
the following, discoverable documents exist, which Gawker Defendants failed to produce:
1.
Written valuation(s) of Gawker-affiliated companies: In early 2015, Gawker
explored debt financing through Young America Capital, Inc. (YAC). As part of that
process, Gawker provided, or YAC prepared, a written valuation of Gawker Media
Group, Inc. (GMGI), including its wholly owned assets, Gawker and Kinja, KFT
(Kinja). It is commonplace for such valuations to be prepared during debt financing
efforts. Yet Gawker Defendants failed to produce this written valuation related to its
2
debt financing efforts through YAC, or any other written valuations of Gawker-affiliated
companies. All should be ordered produced.
2.
Written future financial projections: As part of its involvement with YAC,
Gawker provided YAC with various future financial projections for the company.
Gawkers corporate designee, COO and acting CFO Scott Kidder, testified that he
prepared various financial projections during 2014-2015. Mr. Kidder also confirmed that
he maintains copies of these projections on his computer. However, none of these
projections were produced. Mr. Bollea is entitled to all financial projections for GMGI,
Gawker and Kinja prepared during 2014 through 2015.
3.
Financial Information Provided to The Brenner Group: Mr. Denton produced
certain reports from The Brenner Group, which valued certain GMGI stock. Yet GMGI,
Gawker and Kinja provided financial projections and other financial documents and
information to The Brenner Group for use in its valuation. None of those financial
projections, or the other financial information and documents were produced to Mr.
Bollea. Mr. Bollea is entitled to these documents because they can be (and actually were)
used to assist in the valuation of GMGI, Gawker and Kinja.
3.
GMGIs tax returns: None of GMGIs tax returns have been produced. Mr.
Bollea is entitled to these documents to assist in the valuation of defendant Nick Dentons
ownership interest in GMGI, which is his largest asset.
4.
Kinjas and GMGIs bank statements: None of these bank statements have
been produced. Mr. Denton and Mr. Kidder confirmed at their depositions that these
entities have bank accounts. Mr. Bollea is entitled to the statements from these bank
accounts to value Mr. Dentons ownership interest in GMGI, including GMGIs
subsidiaries, Gawker and Kinja, and their assets.
5.
Kinjas tax returns: Kinja is a Hungarian corporation to which Gawker transfers
millions of dollars each year (constituting all or nearly all of Gawkers profits). Kinja
files tax returns in Hungary. However, Kinjas tax returns have not been produced.
These documents are necessary to value Mr. Dentons ownership interest in GMGI,
which owns 100% of Kinja.
6.
Dentons financial information sent to JP Morgan: Mr. Denton recently
obtained a $2 million mortgage on his New York apartment, and used the proceeds for
renovations and other expenditures. However, Mr. Denton failed to produce copies of his
financial information and application to JP Morgan for the $2 million mortgage. Mr.
Bollea is entitled to this documentation, which will include the net worth and financial
information that Mr. Denton himself provided to JP Morgan in connection with his
mortgage.
7.
Dentons National Financial Services accounts: Mr. Denton failed to produce
account statements for his National Financial Services account(s), as listed in his tax
returns, which generated over $4,600 in interest in
alone. Mr. Bollea is entitled to
this documentation to determine the value of Mr. Dentons assets.
8.
Dentons foreign bank account statements: Mr. Denton lists several foreign
bank accounts on his 2012 tax return. However, he failed to produce any bank statements
from any of these accounts.
9.
Governing documents associated with GMGI, Gawker and Kinja: Mr.
Denton and Gawker failed to produce any operating agreements, shareholder agreements,
stock option agreements, buy-back agreements, by-laws and similar agreements or
governing documents associated with GMGI, Gawker and Kinja. These documents are
necessary to value Mr. Dentons stock, as well as to determine whether there is any
control premium associated with it.
10.
Gawker, GMGI, and/or Kinja insurance policies: Mr. Denton and Gawker
failed to produce insurance policies for Gawker, GMGI and/or Kinja providing for key
man insurance, renters insurance, or business loss insurance. These policies are relevant
to determining the value of GMGI and Gawker, as well as their assets and business
operations. Mr. Bollea is entitled to these materials.
11.
Silicon Valley Bank construction loan documents: Gawker failed to produce
documents associated with the recent $8 million construction loan Gawker obtained from
Silicon Valley Bank (SVB) to construct its new offices located at 114 Fifth Avenue.
These documents would include, but not be limited to, loan applications, financial
disclosures, promissory notes, loan agreements, guarantees, financial covenants and
conditions, and related materials. Mr. Bollea is entitled to these documents to value
Gawker and GMGI.
12.
Financial disclosures re: 114 Fifth Avenue lease: Gawker, Kinja and/or GMGI
provided financial disclosures to their new landlord in connection with the negotiation
and execution of the new lease for 114 Fifth Avenue. Mr. Bollea is entitled to these
financial disclosures.
13.
Kinj a/Gawker Inter-Company Development Agreement, Royalty Agreement,
and related documents: Mr. Denton and Gawker failed to produce the Inter-Company
Development Agreement between Kinja and Gawker, and any similar agreement(s)
relating to the loaning out of one companys employees to the other company, as well as
the Royalty Agreement between Kinja and Gawker, which provides the basis for Gawker
transferring a large percentage of its profits to Kinja each year. They have also failed to
produce copies of documents sufficient to establish how the royalty payment from
Gawker to Kinja is calculated each year, and the services provided in exchange. Mr.
Bollea is entitled to these agreements and documents to assist in the valuation of Gawker
and GMGI.
14.
Dentons Loans/Investments: Mr. Denton failed to produce any documents
evidencing loans to or investments made by Mr. Denton in GMGI, Gawker, or Kinja.
Mr. Denton testified that such documents exist.
15.
International licensing agreements: The only source of revenue for the Gawker
entities, aside from the revenue generated by Gawker, is from international licensing
agreements. These Licensing Agreements between Kinja and other companies for
international licensing of Gawker content and/or Kinja intellectual property have not
been produced.
16. Monthly financial reports to SVB: Mr. Kidder confirmed at his deposition that
Gawker is required to provide monthly financial reports to SVB, under the terms and
conditions of covenants in the contracts governing Gawkers line of credit and notes.
These monthly financial reports prepared by Mr. Kidder and provided to SVB were not
produced.
17.
Documents associated with a GMGI stock split in 2013: were not produced.
18.
19.
Capitalization tables: Only one capitalization table or cap table for GMGI
was produced. Mr. Bollea is entitled to cap tables for Gawker, GMGI and Kinja, from
2011 through the present to trace the ownership of the companies.
20.
Board meeting minutes: Mr. Bollea is entitled to all board meeting minutes
reflecting the discussion of Gawker, Kinja or GMGIs financial condition, loans, stock
prices, royalty payments, offers to buy GMGI or any interest therein, debt financing, and
valuations of GMGI, Gawker and/or Kinja during 2014-2015.
21.
Gawker and GMGIs state and local income tax returns: were not produced.
22.
Dentons prenuptial agreement: Mr. Denton did not produce his prenuptial
agreement, including any financial disclosures by Mr. Denton associated with it. Under
New York law, Mr. Denton was required to disclose his net worth in connection with this
agreement. See McKenna v. McKenna, 994 N.Y.S.2d 381, 383 (A.D. 2014). Mr. Bollea
is entitled to these recent disclosures.
23.
Dentons Citibank international account statements: Mr. Denton failed to
produce copies of statements from 2012 to the present for his Citibank international
account, which is listed on Mr. Dentons 2011 tax returns.
24.
Dentons Fidelity investment accounts: Mr. Denton failed to produce
statements from 2012 to the present for all of his Fidelity investment accounts. These
accounts generated over $ 11,000 in interest in a calendar year, and clearly contained
significant amounts of money.
25.
Dentons New York apartment insurance policies: Mr. Denton failed to
produce copies of insurance policies associated with his New York apartment, as well as
a detailed description of, and values for the contents of, the apartment. Although Mr.
Denton testified otherwise during his deposition, his mortgage requires him to maintain
this insurance.
26.
27.
Dentons U.S. treasury bonds statements: Mr. Denton did not produce
statements for his account that contained $440,000 in U.S. treasury bonds and other
34.
Reports and notes of pitch meetings and meetings held with prospective
purchasers or financiers who sought to buy Gawker or GMGI or a portion thereof:
were not produced. Mr. Denton testified that at least two of these meetings took place,
and the value of GMGI was discussed in at least one of the meetings. These documents
should include, but are not limited to, all documents associated with the meeting held last
year at which an offer was made to purchase GMGI. These documents should also
include, but are not limited to, all documents associated with the presentations YAC
provided to two potential investors in connection with efforts to obtain debt financing
for Gawker. They should also include the presentation itself (i.e., Powerpoint), and any
investor information materials or offering documents. Gawker Defendants also should be
required to provide Mr. Bollea with the names of the potential investors and the Media
Company that made the offer to purchase GMGI last year (which Mr. Denton refused to
disclose during his deposition).
All of this information is discoverable. In Tennant v. Charlton, 377 So.2d 1169, 1170
(Fla. 1979), the Florida Supreme Court quoted with approval the opinion in Donahue v. Hebert,
355 So.2d 1264, 1265 (Fla. 4th DCA 1978), on the proper scope of net worth discovery: The
search for forgotten or hidden assets is of the essence of the discovery process. The whereabouts
of assets disclosed by a recent income tax return, or shown on a recent financial statement
furnished in another situation when the current litigation was not envisioned is very definitely
appropriate inquiry as is the bona Tides of the recent disposition of assets. These are routine
inquiries for every knowledgeable trial lawyer in cases in which the financial resources of a party
is a relevant issue. One must be afforded reasonable latitude in double and cross checking a
party's statements about his current net worth. This, of course, can be done by reviewing income
tax returns, recent financial statements, and the myriad of other sources of financial
information.
Mr. Bollea is entitled to information that allows him to determine Gawker Defendants
net worth. In the case of Gawker, that includes projections of future revenue (which could affect
the value of the company), and financial information provided to potential financiers and
professionals engaged to value the company, as well as tax return information. In the case of Mr.
Denton, it includes financial information provided to mortgage lenders, bank account
information, and information regarding the value of the companies in which he holds stock. This
also includes the value of GMGI and its subsidiaries, as Mr. Dentons shares in that company are
by far the most valuable single asset he holds. As such, this especially includes information
regarding the family trust into which Mr. Denton has testified that he has transferred a significant
portion of his main assets - his shares in GMGI.
Defendants representations as to what any of these assets are worth (and whether they are in the
possession of the Gawker Defendants)under Tennant and Donahue, he is entitled to test and
verify Gawker Defendants assertions.
For the foregoing reasons, the motion to compel should be granted. Moreover, because
Gawker Defendants failed to produce documents within their possession, custody and control to
which Mr. Bollea is clearly entitled, Gawker Defendants should be required to appear for the
completion of their financial worth depositions once they have provided full and complete
financial worth discovery. Mr. Bollea also respectfully requests that the Court consider ordering
these depositions to take place in Pinellas County, Florida, so that he is not be forced to pay the
cost and expense of traveling to New York again to complete these depositions. Alternatively,
Mr. Bollea respectfully requests the Court consider requiring Gawker Defendants to pay for the
costs associated with travel, including attorney time, incurred in completing these depositions.
Respectfully submitted,
/s/Kenneth G. Turkel________________________
Kenneth G. Turkel, Esq.
Florida Bar No. 867233
Shane B. Vogt
Florida Bar No. 0257620
BAJO | CUVA | COHEN | TURKEL
100 North Tampa Street, Suite 1900
Tampa, Florida 33602
Tel: (813)443-2199
Fax: (813)443-2193
Email: k t u r k c l @ b a i o c u v a . c o m
Email: svogt@baiocuva.com
- and -
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by
E-Mail via the e-portal system this 22nd day of June, 2015 to the following:
Barry A. Cohen, Esquire
Michael W. Gaines, Esquire
The Cohen Law Group
201 E. Kennedy Blvd., Suite 1950
Tampa, Florida 33602
bcohcn@tampalawfirm.com
mgaincs@lampalawnrm.com
jha 11c@ta mpa 1awfi nn .com
m w a lsh @ ta m p a la w n rm .co m
kbrown@tlolawfirm.com
10
Exhibit 5
* * *ELECTRONICALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY***
Plaintiff,
vs.
HEATHER CLEM, et al..
Defendants.
/*
in part and denied in part. Gawker shall provide 2015 bank statements for
GMGI and Kinja.
Request Nos. 17, 18 (documents regarding GMGIs stock split and the
Gawker stock option plan): Requests granted.
and inter-company
Request No. 21 (Gawker and GMGIs state and local income tax
returns): Request denied, except that Gawker Defendants shall provide a
written verification that Gawker Media, LLCs state and local tax returns for
2011-2013 reflect the same income and expense information that appears on
its federal returns.
Request
Request Nos. 30, 31 (transaction details for bank statements and every
monthly statement for each account since 2011): Requests denied.
Request No. 32 (Dentons irrevocable family trust documents): Request
granted.
Request No. 34 (Reports and notes of pitch meetings and meeting held
with prospective purchasers or financiers who sought to buy Gawker or
GMGI or a portion thereof): Request granted in part and denied in part.
Gawker shall provide presentation materials used in any pitch meetings and/or
any other meetings held with prospective purchasers or financiers.
ORIGINAL SIGNED
Pamela A.M. Campbell
Circuit Court Judge
Exhibit 6
* * *ELECTRONICALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY***
CONFIDENTIAL
CC
From
To
D ate
Subject
Privilege Type
Gaby Darbyshire
1
H eath er Dietrick
Nicholas Soivilien
STL
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<jam ie@ gaw ker.co m >
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Jesse M a
<jesse@ gaw ker.com >
Jesse M a
Fwd: C&D
AC, W P
AC, WP
AC, WP
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AC, W P
skidder@ gm ail.com
AC, W P
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AC, WP
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Jamie M elen d ez
6
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11
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14
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Jamie M elendez
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H eath er Dietrick
< hdietrick@ gaw ker.com >
H eath er Dietrick
< hdietrick@ gaw ker.com >
Page 1
CONFIDENTIAL
3/28/20 14
Neetzan Zim m erm an
< neetzan@ gaw ker.com >; Legal
2532
Jesse M a
<jesse@ gaw ker.com >
Tornado Photos
AC, WP
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2533 undated
John Duncan
2534
M a y e r Brown LLP
Economic Analysis
Page 172
Exhibit 7
* * *ELECTRONICALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY***
Dear Seth:
This letter concerns the financial worth discovery conducted by Mr. Bollea pursuant to
the Courts July 20, 2015 Order compelling production of documents. Such discovery remains
incomplete, and we write in the hopes of informally resolving the issue and avoiding a motion.
Missing trust documents. Gawker and Mr. Denton are in violation of the Courts July
20, 2015 Order requiring that they turn over all documents relating to his family trust which
would show the extent of his control over that trust, including trust documents, documents that
show the grantor, trustees, beneficiaries, and terms of the trust, shareholder voting rights, and
documents evidencing the consideration originally paid for the shares, date of creation of the
trust, and date shares in GMGI belonging to Mr. Denton were deposited into the trust. All of
these documents were clearly requested in Mr. Bolleas motion to compel, and Mr. Bolleas
motion was granted in full. However, no such documents were produced and Mr. Denton
contends in his Affidavit that he do[es] not have the documents memorializing the trust
The requested documents, however, go beyond those that merely memorialize the trust.
Moreover, any documents within the possession of Mr. Dentons counsel (who presumably do
possess copies of a trust created at the behest of Mr. Denton), or anyone else who can readily
make the documents available to Mr. Denton upon his request, are clearly within Mr. Dentons
custody and control and should be produced. Without these documents, it is impossible to fully
test the veracity of Mr. Dentons claim that he does not control the shares in the trust and thus
that his shares in GMGI (by far his largest asset) are not subject to a control premium.
Je n n i f e r J. M c Gr a t h O f
H a r d e r M i r e l l & A b r a m s LLP
cc:
LEVINE SULLIVAN
K O C H & SC H U LZ, LLP
1899 L Street, NW
Suite 200
Washington, DC 20 03 6
(202) 5 0 8-1 100 | Phone
(202) 8 6 1-9 888 | Fax
Seth D. Berlin
(202) 508-1122
sberlin@ lskslaw .com
N e w York
P h ila d e lp h ia
D enver
| LEVINE SULLIVAN
I KOCH & SCHULZ, LLP
Jennifer J. McGrath, Esq.
September 17, 2015
Page 2
worth tens of millions of dollars, so continuing to seek records for closed accounts that once held
much more modest sums that are not material to his current financial worth serves no valid
purpose in connection with presenting plaintiffs case on that issue.
Transfer Pricing Studies. Gawker again confirms its response to RFP No. 140 that it
has no non-privileged documents responsive to this Request.
Latest Statement for Each Account. Mr. Denton will provide, by February 15, 2016,
the account statements for his active accounts for the period ending January 30, 2016.
Although you have repeatedly declined our invitations to discuss such matters informally,
I am willing to meet and confer about the above at a mutually-convenient time. In that regard,
and consistent with my comments above, please note that I will be out of the office on Tuesday
and Wednesday, September 22 and 23 in observance of Yom Kippur. Thank you.
Sincerely,
LEVINEfSULLIVAN KOCH & SCHULZ, LLP
HARDER
MIRELL&
ABRAMS
Dear Seth:
I write in response to your letter dated September 17, 2015.
First, we reject your claim that we are imposing unreasonable time periods to respond to
correspondence. Presumably, you were already aware of Gawkers positions with respect to all
the matters raised in my letter; therefore, it was certainly reasonable to seek a response within
four days of receipt of my letter. (In any event, if you needed a bit of extra time to respond due to
your being out of the office, you could have easily requested it as a matter of professional
courtesy.)
Second, the fact that the trial date is in March does not mean that discovery must be
delayed and pushed up against the trial date. In fact, this discovery was first ordered in May, and
it is now September and Mr. Bollea still does not have relevant documents on the net worth
issue.
Third, on the merits of the enumerated discovery issues, we respond as follows:
Trust Documents. Gawker and Denton are relying on an over-narrow definition of
control. We highly doubt that Denton cannot obtain documents relating to his family trust, a
trust that has a substantial interest in a multi-million dollar corporation which comprises the bulk
of his net worth. Defendants have asserted dubiously narrow definitions of control in the past
in this litigation (with respect to Kinja documents), and the Court rejected them. The Court has
already ordered the production of these documents over Gawkers and Dentons objections, and
unless your clients agree to comply with this order, we intend to obtain an order that specifically
Je n n i f e r J. M c Gr a t h Of
H a r d e r M i r e l l & A b r a m s LLP
cc:
LEVINE SULLIVAN
K O C H & SC H U LZ, LLP
1899 L S treet, NW
S u it c 2 0 0
W a s h i n g t o n , DC 2 0 0 3 6
(2 0 2 ) 508-1 1 00 1P h o n e
( 2 0 2 ) 8 6 1 - 98 8 8 | F a x
S e t h D. Ber l i n
(2 0 2 ) 5 0 8 - 1 1 2 2
Washington
N e w York
P hiladelphia
D enver
LS K S
LEVINE SULLIVAN
KOCH & SCHULZ, LLP
Jennifer J. McGrath, Esq.
September 21, 2015
Page 2
As you know, I will be out of the office tomorrow and Wednesday in observance of Yom
Kippur. But I should generally be available on Thursday or Friday to discuss the foregoing.
Thank you.
Sincerely,
LEVINE SULLIVAN KOCH & SCHULZ, LLP
Exhibit 8
* * *ELECTRONICALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY***
Th e Gospel According to N ick Denton W hat Next For Th e Gawter Founder? - Th e Daily Beast
12/15/2014
A n d r e w H u r r e r /B lo a m h e r y / G e tty
EMPEROR
Lloyd
Grove.
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12/15/2014
The Gospel According to N ick Denton What Next For T h e G a w te r Founder? - The D aily Beast
problem of his nihilism, former employee Moe Tkacik once told The N e w
Y orker about her boss.
Other peoples emotions are alien to him, another Denton underling, Choire
Sicha, said in the same article.
I think hes a total dick, TechCrunch founder Michael Arrington told me back
in 2 0 0 8 . I think hes amoral. I dont think he has any sense of right and wrong,
and hell do anything he can to make money and have a successful blog.
Yet the Nick Denton who greets me at the Nolita headquarters of Gawker
Mediathe Manhattan startup he founded on a shoestring, but which has
grown 1 2 years later into a $ 4 0 million-a-year company with some 3 0 0
employees on five continentswould seem to bear little resemblance to the
greedy sociopath of common caricature.
Im a constructive person, he insists. I like to build things. Im a sand castle
building kid who cant understand why other boys would want to kick the castle
down. I hate internal disputes and internal dissention and I will make every
effort to eliminate that.
Never mind that Gawker.com, Dentons original gossip blog, sharpened its teeth
on internal disputes, the mockery of the Manhattan media elite, and the
kicking-down of castlesan entertainingly brutish sensibility fueled by
understandable resentment, given that Denton barely paid his young charges
and worked them half to death.
(Back when I wrote a column for the New York Daily N e w s, I was a frequent
Gawker target; after I lost that job, Gawker reportednot inaccuratelythat I
might pass unnoticed, appearing to be any number of undistinguished and
fleshy middle-aged white men. Denton, laughing, says today: That seems
relatively generous.)
Denton, who speaks in the clipped cadence of the Oxford-educated Brit he is,
has built quite a castle. The Gawker Media empire consists of eight blogs
boasting 1 2 5 million unique visitors per month and devoted to sports
(Deadspin ), automobiles (Jaloprdk ), science fiction (io9 ), video games (K otaku ),
design and technology (G izm odo ), user-friendly software (Lifehacker ), and
womens interests (Jezebel).
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12/15/2014
The Gospel According to Nick Denton What Next For T h e G a w te r Founder? - Th e D aily Beast
Denton talks excitedly of his plans to move Gawker Medias headquarters next
year to a luxuriously renovated building on Fifth Avenue and 1 7 th Street in
Manhattans Flatiron neighborhood, complete with a two-story entertainment
and event venue.
I came out
completely to
everybody 16
years ago. It
changes the
climate, it
changes the
weather, it
changes the
entire
environment.
12/15/2014
Th e Gospel According to N ick Denton W hat Next For T h e Gawter Founder? - T h e D aily Beast
12/15/2014
The Gospel According to NickDenton What Next For The Gawker Founder? - Th e Daily Beast
12/15/2014
The Gospel According to NickDenton What Next For The Gawker Founder? - Th e Daily Beast
*On how Denton acquired his crisis management insights: Its partly to do
with being out and being gay, and seeing the transformation that takes place. I
came out completely to everybody 1 6 years ago. When you realize that if you
own your own story, if you say it yourself, it has a transformative effect, and
youre no longer a closeted homo waiting for that moment when somebody is
going to call you out, and you actually take that initiative rather than being
dragged out. It changes the climate, it changes the weather, it changes the
entire environment.
*On the person chosen to replace Frank Foer as TNRs editor in chief, Gabriel
Snyder, who worked for Denton in 2 0 0 9 as Gawkers top editor: He was a
poor one. He hired some good people, he worked really hard, but he didnt have
any story aggression. (Snyder didnt respond to emails from the Daily B east.)
*On the recent flap in which a top executive of the Uber ride-sharing network
suggested at a private New York dinner that it might be advisable to hire
opposition researchers to investigate Uber critic Sarah Lacy, editor of the tech
site P andoD aily : That was such a nonsense scandal. What do you think these
PR people, at least the good ones, are doing anyway? Theyre dropping ideas
for stories, and a good journalist is always looking for people to dish on
competitors or dish on enemiesthats where all the good information is.
As for Lacywho worked with Michael Arrington at TechCm nch when he was
a frequent victim of Dentons tech biz blog Valley w a g (which these days is
folded into Gawker.com)I think Arringtons place has been taken by Sarah
Lacy. In terms of somebody whose journalistic power has gone to their head,
that makes her a perfect target for satire.
Lacy retorts: Ive pretty much run out of things to say about Nick Dentons
obsession with my life. But I guess Ubers [co-founder] Travis Kalanick will be
happy to know theres always a home for stories about me on Gawker.
*On his abiding love for the United States: Im married to an American so Im
staying in America. Im going to become a citizen, though I have to check out
the tax consequences first.
*On his political beliefs, although he doesnt bother to vote: My politics are
that I like to get things done, so I am centrist and, for obvious reasons, Im
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The Gospel According to NickDenton What Next For The Gawker Founder? - Th e Daily Beast
12/15/2014
socially liberal. I dont really believe that the governmentor, in fact, any kind
of hierarchical organizationis very good at delivering any kind of service. As
for his views on abortion, Theres no advantage to me of going there. I dont
have conventional liberal views on abortion, no.
*On the prospect of parenthood: Probably yes.
*On his philosophy of the digital media business: The real secret of success is
to avoid the herd. This is a new medium. Its developing pretty rapidly and
there are relatively few people who understand it and have a real sense of how
everythingmobile, personalization, desktop, interactive comments, blogginghow all these pieces are going to fit together. A lot of people who seem to know
what theyre talking about dont.
And if you spend all your time reading Twitter and the Internet trades, you
will veer this way and that, and youll be latching on to the latest trends and
spouting the latest buzzwords and talking about millennials and engagement
and youll lose sight of who you are and end up with soulless properties.
*In defense of nihilism: Some of our younger staff, particularly on a site like
Gawker, can be a little nihilistic. I think with that generation, so many of their
hopes have been so dashed that nihilism is really a natural response. Does the
Internet make for a better world? Not really.
The Internet has made for as much toxic discussion as it has for mutual
understanding. And what were those other hopes? Oh right, Obama. That
didnt really work out for people. And jobs arent that plentiful and career paths
arent there. Even in journalism, the career path from blog to magazine to book
to a comfortable lifethat doesnt realty exist.
So, in the young Manhattan intelligentsia, nihilism is actually pretty standard.
And one has to fight against that and create some haven for optimism. And
thats really hard to do.
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12/15/2014
The Gospel According to NickDenton What Next For The Gawker Founder? - Th e Daily Beast
'Game of Thrones'
Cast Before The Big
Show
MTV. COM
FHAT U K I 5, A O I,,C ( ) M
00#f20
Exhibit 9
* * *ELECTRONICALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY***
1/28/2015
BUSINESS
IN S ID E R
ALYSON SHONTELL
JAN. 28, 2015, 7:47 AM
Nick Denton
orders the
shrimp linguine.
He doesn't look
at Balthazar's
menu; the
media mogul
frequents the
restaurant and
everyone from
the hostess to
fellow diners
knows who he is.
Denton
personally owns
just under 5 0 %
Business I aside r
of Gawker
Nick Denton
Media, a
company he
founded and
bootstrapped in
the early 2 0 0 0 s, before Facebook was a semi-reliable traffic hose forpublishers and
banner ads generated meaningful revenue. Through a I'amilv lnisi. ^ ^ ^ ^ K n s 68%
The board currently consists of himself and Gawker's CTO Tom Plunkett, although
Denton is looking to add three new, strategic faces to his table. Union Square Ventures'
Fred Wilson was one person he considered as an advisor, although they haven't found a
way to work together yet.
http://vwvw.businessinsider.com/gawter-media-raising-money-2015-1
1/5
1/28/2015
Aside from a casual conversation or two, Denton says he has never been tempted to sell
his site, which is worth at least $ 2 5 0 million based on the company's 2 0 1 4 net revenue of
$ 4 5 million. But growing Gawker Media hasn't always been easy.
Denton admits that while his company's traffic increased 2 0 % last year to almost 5 0 0
million monthly pageviews and 1 3 0 million unique visitors, Gawker wasn't producing its
strongest content.
"Editorial traffic was lifted but often by viral stories that we would rather mock," Denton
lamented in a recent company-wide memo. "We were nowhere on the Edward Snowden
affair. We wrote nothing particularly memorable about NSA surveillance. Gadgets felt
unexciting. Celebrity gossip was emptier than usual."
In a matter of months, Gawker's entire Valleywag editorial team turned over. Gizmodo,
which was once a category leader in tech and gadget news, lost key writers and suffered
from competition with other up-and-coming publications like The Verge. Annalee Newitz,
who ran Gawker's tech blog i09, was recently placed at the helm of a combined iOq and
Gizmodo entity to oversee a turn-around.
Earlier in 2 0 1 4 , Denton himself felt a little burnt out. He took a sabbatical following his
May wedding. But he says he returned refreshed, with an action plan.
That action plan included promoting six of his staffers to managing partners; they now
share Denton's role at the top of the organization. Heather Dietrick took over Denton's
role as Gawker's President; Erin Pettigrew leads Strategy; Tommy Craggs is executive
editor of all 8 Gawker websites, including Jezebel and Deadspin; Scott Kidder is COO;
Andrew Gorenstein is President of Advertising; Tom Plunkett is CTO. Most business
decisions between the seven leaders are now made in a massive group text messaging
chain.
From a revenue perspective, things at Gawker have never been better. Even Gizmodo,
which has stumbled, has played an integral role in the company's e-commerce efforts.
Last year, Gawker Media's gross e-commerce revenue exploded to $ 1 0 0 million, netting
it about $ 1 0 million, paired with $ 3 5 million in traditional advertising revenue. Gawker's
e-commerce product, headed up by long-time employee Erin Pettigrew, primarily places
affiliate links in articles about products that can be purchased on sites like Amazon.
Skimlinks helps Gawker monetize this referral traffic.
Ryan Brown, Gawker's VP of Business Development, says Cyber Monday and Black
Friday were "like the Super Bowl" for Gawker's commerce team, which spent months
planning ways to promote the best holiday deals. This past Saturday, an Amazon Prime
promotion Gawker ran generated 2 5 , 0 0 0 subscriptions.
http://www.businessinsider.com/gawter-media-raising-money-2015-1
2/5
1/28/2015
$50,000,000
$45,000,000
$40,000,000
$35,000,000
$30,000,000
$25,000,000
$ 20,000,000
$15,000,000
$10,000,000
$5,000,000
$0
2010
2011
Com m erce & Licensing
2012
2013
2014
Direct Advertising
Q uicker Media
Gawker's revenue over the past few years. E-commerce became meaningful during
2014.
Denton has never raised traditional capital from a venture firm or corporation, but his
2 0 1 5 plan does include raising millions of dollars of debt from a few banks and funds.
Denton says the amount will be "less than 1 0 % of the company's open-value market of
equity," likely $ 1 5 million. And he promises Gawker will still be "beholden to no one."
"[The financing is] not particularly aggressive," says Denton. "We've been almost
embarrassingly under-leveraged and conservatively run!" Young America Capital is
leading the process.
http://www.businessinsider.corrVgawter-media-raising-mone^2015-1
3/5
1/28/2015
90
700
80
600
70
500
60
400
SO
Venture Capital Railed (milliom)
ComScore Audience (December)
300
30
200
20
100
10
( h n v k c r Media
The cash will be used to further growth and continue transforming Gawker from a
publisher into a platform like Twitter or Facebook.
"We will be the first online media company to create its own technology, rather than be
reduced to a content provider subject to someone else's algorithm," Denton wrote in his
memo.
Kinja, which turns every commenter into a blogger, was one innovative attempt to turn
Gawker into a platform. This year, Denton is energized by the intersection of mobile
messaging and media, and he is eager to figure out how Gawker can create sharable
content for phones. He also wants to experiment with new ways to seed, test, and spread
content online.
While 2 0 1 4 was a year of growth for Gawker, Denton pledges that
2015
will be better.
"For a good 1 2 months from the summer of 2 0 1 3 I was variously betrothed, distracted,
obsessed by Kinja, off on honeymoon, off on sabbatical. I'm not sorry for that. For ten
years, I've danced with this octopus," Denton wrote honestly to his staffers. "I have now
a balanced team of partners whose capabilities are widely acknowledged. These are six
people I can confide in. I am happy to share power with them. We will be candid with
each other. The drift this year: it will never happen again."
* Copyright 2015 Business Insider Inc. All rights reserved.
http://www.businessinsider.com/gawter-media-raising-money-2015-1
4/5
1/28/2015
http://www.businessinsider.com/gawter-media-raising-money-2015-1
5/5
Case No.:
12012447-CI-011
1
This includes: Gawkers income statements for every year since 2011, plus for the
period January through April 2015; Gawkers balance sheets for every year since 2011, plus for
the period January through April 2015; Gawkers statements of cash flow for every year since
2011, plus for the period January through April 2015; Gawkers statement of accounts
receivable; all of Gawkers federal tax returns since 2011; all of Nick Dentons federal tax
returns since 2011; all available W2 forms for Denton since 2011; lengthy valuation reports
(each running to more than 70 pages) of Gawker Media Group, Inc. (GMGI), from 2012, 2013,
and 2014, by The Brenner Group, an independent third party, each including more than a dozen
exhibits containing detailed financial information considered by the Brenner Group in
completing its valuation; financial statements of GMGI, audited and/or reviewed by CPA firm of
Citrin Cooperman for 2011, 2012, 2013, and 2014; the most recent capitalization table showing
ownership interests in GMGI; Gawkers leases for its former and current office spaces; a 2013
independent appraisal of Dentons Manhattan condominium, showing its value; a recent
mortgage statement for Dentons condominium showing the amount still owed; recent bank
statements for each of the Gawker Defendants current accounts, plus end-of-year account
statements for each year available back to 2011; stock certificates showing various investments;
bank statements showing payments between Gawker and Kinja, KFT; Gawkers operating
agreement; Gawkers promissory notes and loan statement; compliance certificates submitted by
Gawker to Silicon Valley Bank (SVB) in connection with Gawkers loan; the most recent
amendment to the loan and security agreement with SVB; Memorandum and Articles of
Association for GMGI; various agreements between Kinja and Gawker, including their
Intercompany Services Agreement, their License Agreement, and their Development Agreement;
the 2009 GMGI stock plan, along with a stock-related board resolution and meeting minutes; and
a pitch book containing significant financial data.
1
***ELECTRONIC ALLY FILED 11/12/2015 09:30:21 AM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY***
ARGUMENT
A.
almost a year before the publication at issue in this case - by the law firm Mayer Brown, LLP.
See Mot. at 4-6. Although Bollea inexplicably has chosen to call this analysis The Transfer
Pricing Study and claims he was misled because Gawker referred to it as an Economic
Analysis, id. at 2, 4, the report prepared by Mayer Brown is titled Economic Analysis of
Royalty Payments Between Gawker Media LLC and Blogwire Hungary KFT, as reflected in
one of the exhibits submitted by plaintiff. See Conf. Harder Aff, Ex. A. The Mayer Brown
Report contains legal advice about the legal effects of royalty rates Gawker pays to license
intellectual property from its sister company, Kinja, KFT. Gawker has withheld this document
on grounds of attorney-client privilege ever since plaintiff first requested it more than a year-anda-half ago. Now, plaintiff belatedly claims that Gawker should be ordered to produce it, but the
arguments he offers misstate both the facts and the law.
First, plaintiff argues that Mayer Browns Report is a valuation of intellectual property,
which is not subject to the attorney-client privilege. Mot. at 3, 5. To make this argument,
plaintiff speculates that Gawker is cloaking non-legal advice . . . by routing it through a law
firm, and that Mayer Browns retention was a ghost hiring for no other purpose than to
[enable Gawker to] create a phony privilege claim. Id. at 5-6. This outrageous contention that a major law firm conspired with Gawker to concoct a privilege claim - has no foundation
whatsoever. In fact, plaintiffs own motion attaches another document that explains the nature of
Mayer Browns analysis, stating that Mayer Brown analysed the appropriate arms length
pricing for the royalty payable by [Gawker] to [Kinja] with respect to intellectual property3
associated with Gawkers brand. See Conf. Harder Aff., Ex. A, at 1 (Gawker 28910 C)
(providing additional information about Mayer Browns analysis and the nature of its Report,
including that it was based on recognizing the importance of maintaining an arms length
relationship and pricing the royalty hereunder in accordance with arms length terms). While
Gawker will not waive the privilege by revealing the substance of Mayer Browns advice, it will
state for the record that the analysis (a) was prepared in December 2011 by Mayer Brown
attorney Charles S. Triplett (who had previously served as an attorney in the IRSs Office of
Chief Counsel), and (b) provided Gawker with legal advice under Section 482 of the Internal
Revenue Code and regulations interpreting that section, which govern an appropriate arms
length standard for transactions and allocations between companies that are owned by a common
parent corporation. Such advice falls squarely within the attorney-client privilege. See, e.g., In
re Grand Jury Subpoena Duces Tecum Dated Sept. 15, 1983, 731 F.2d 1032, 1037 (2d Cir. 1984)
(Tax advice rendered by an attorney is legal advice within the ambit of the privilege.); New
Phoenix Sunrise Corp. v. C.I.R., 408 F. Appx 908, 919 (6th Cir. 2010) (advice provided by
outside counsel on tax issues is privileged); Ross v. UKILtd., 2004 WL 67221 (S.D.N.Y. Jan. 15,
2004) (same); U.S. v. Chevron Texaco Corp., 241 F. Supp. 2d
also Chevron Texaco Corp., 241 F. Supp. 2d at
outside counsel are presumed to be made for the purpose of obtaining legal advice.).2
The two cases cited by plaintiff are inapposite. One, Skorman v. Hovnanian o f Florida,
Inc., 382 So. 2d 1376 (Fla. 4th DCA 1980) (cited in Mot. at 5), stands for the unremarkable and
irrelevant proposition that business advice is not subject to the attorney-client privilege. The
other, In re Asousa P ship, 2005 WL 3299823 (Bankr. E.D. Pa. Nov. 17, 2005) (cited in Mot. at
5), held that an appraisal done by a valuation company (not a law firm) was not privileged
simply because the partys outside counsel was copied on its transmittal. Id. at *10-11. Here,
the Report was prepared by attorneys at Mayer Brown for the purpose of providing legal advice.
No other party was involved in the creation of the document, and Mayer Brown was not a
conduit of any kind. Id. at *4.
4
Second, plaintiff claims that he needs Mayer Browns Economic Analysis Report to
determine how the fee Gawker is paying Kinja is calculated. Mot. at 2. This claim also is not
correct. Plaintiff already knows how the fee Gawker is paying Kinja is calculated and how much
money is being paid because the formula is set out in the licensing agreement attached to
plaintiffs motion. See Conf. Harder Aff., Ex. A at Article VI (GAWKER 28912 C). In
addition, Gawker has produced reams of documents detailing the actual dollar amounts it has
paid to Kinja since 2011, including its balance sheets and bank records reflecting each of those
individual transactions. Plaintiff does not need to invade the privilege of the Mayer Brown
Report to understand the amounts that Gawker pays to Kinja, even assuming that plaintiff needs
that information at all to assess Gawkers overall financial worth.
Finally, plaintiff misstates the record when he claims that Gawker somehow misled him
about the existence of Mayer Browns Report. The existence of this Report was not a recent
revelation. Mot. at 3; see also Mot. at 2 (falsely stating that Report was not revealed until
July 2015). Gawker disclosed the Mayer Brown Report more than 18 months ago - in March
2014 - when it listed the document on its privilege log. See Mot., Ex. 6. That log stated
explicitly that Gawker had withheld as privileged a document titled Economic Analysis written
by Mayer Brown LLP and dated 12/11/2011. Id.
Gawkers corporate representative, Scott Kidder, also referenced the Report in April
2015 at the second of his three depositions. While maintaining the substance of the Report as
privileged, Kidder specifically and repeatedly referenced it in his testimony. When asked about
the people involved in deciding the terms of the fee for the royalty agreement between Gawker
Media and Kinja, Kidder explained that Mayer Brown was hired to prepare a study to
make sure that there were terms appropriate for an arms length transaction. Ex. 1 (Kidder
Dep.) at 144:10-17. Kidder further testified that Mayer Brown offered legal advice about what
is an appropriate arrangement. Id. at 145:2-10.
Plaintiff was not misled about the Report. He simply chose not to inquire further about it
on either of these occasions. His belated effort to compel the Reports production now - and
then to conduct a fourth deposition of Gawker as a result - should be rejected. The Report is
both privileged and has no bearing on plaintiffs ability to assess Gawkers financial worth.
B.
Denton Does Not Have Possession, Custody or Control of the Trust Documents,
and They Are Unnecessary In Any Event.
Plaintiff next argues that the Court should compel Gawker and Denton to produce certain
trust documents that do not involve either of them and that are not under their control. The trust
was established by Dentons father, who created the trust for the benefit of his grandchildren
(Dentons niece and nephews) and named Dentons sister as the trustee. Denton is not involved
in the trust at all. See Ex. 2 (Affidavit of Nick Denton, attesting that he is not a trustee or
beneficiary of the trust and do[es] not control it); see also Conf. Harder Affi, Ex. B at
153:20-22, 154:6-7 (Denton testifying about trustee and beneficiaries). Simply stated, Denton
was not the grantor/creator of the trust (his father was), he is not a beneficiary of the trust (his
>
nieces and nephews are), and he is not the trustee (his sister is). Given these undisputed (and
indisputable) facts, plaintiffs argument for seeking to compel the trust documents misses the
mark. His motion should be denied for at least two reasons.
>
Plaintiff misstates the record by claiming that Denton transferred [the shares] into the
trust. Mot. at 7. Denton never testified that he established the trust or transferred the shares
into the trust - in fact, plaintiffs counsel never asked those questions. Moreover, during the
deposition, Dentons counsel objected to plaintiffs counsels use of the term grantor in her
questions, expressing his concern that Denton might get tripped up on the meaning of that legal
term. Conf. Harder Affi, Ex. B at 152:20 - 153:3.
6
First, the trust documents plaintiff seeks are not within Dentons possession, custody, or
control. It is uncontested that Denton does not possess or have custody of the trust documents.
As Denton has attested under oath, I do not have the documents memorializing the trust. Ex.
2; see, e.g., Discovery, Civ. Prac. FL-CLE, 16.67 (it is clear that a party may not be required
to produce matters the party does not have) (citing Fritz v. Norflor Constr. Co., 386 So. 2d 899
(Fla. 5th DCA 1980)). This is consistent with the brief exchange between the Court and
Dentons counsel at a prior hearing, in which the Court expressed its view that [sjomewhere
along the way, he would have a record if its his, and Dentons counsel explained that Its not
his. Thats what Im saying. Ex. 3 (June 29, 2015 Hrg. Tr.) at 135:19-22; see also id. at
135:16-18 (MR. BERLIN: Well, I dont know that he has any documents to give, Your Honor,
because hes not the trustee; hes not the beneficiary.).4*7
Denton also does not have control over the documents. The Florida Supreme Court has
interpreted control to mean that a party has the authority to gain access to the records. S.
Bell Tel. & Tel. Co. v. Deason, 632 So. 2d 1377, 1388 (Fla. 1994) (emphasis added); see also
Discovery, Civ. Prac. FL-CLE, 16.67 (The concept of control has generally been held to
mean the legal right to obtain the requested documents.). Likewise, the Eleventh Circuit has
explained that [cjontrol is defined not only as possession, but as the legal right to obtain the
documents requested upon demand. Searock v. Stripling, 736 F.2d 650, 653 (11th Cir. 1984)
(emphasis added); accord Fin. Bus. Equip. Solutions, Inc. v. Quality Data Sys., Inc., 2008 WL
4 In that same vein, while the Court granted plaintiffs motion to compel plaintiffs
requests related to trust documents, those requests were limited to any trust in which Denton
personally was the grantor, settlor, trustee, beneficiary or in which [he has] or had any
interest, Ex. 4 at 13 (Financial Worth RFP to Denton No. 42), or any . . . trusts in which YOU
have an interest, id. at 11 (Financial Worth RFP to Denton No. 33). Plaintiffs contention that
these requests extend to trusts in which Denton is uninvolved, or that Denton should be
sanctioned for not producing documents he does not have, is not well taken.
7
4663277, at *2 n.5 (S.D. Fla. Oct. 21, 2008).5 Here, plaintiff has made no factual or legal
showing that Denton has a legal right to obtain records concerning a trust for which he was not
the grantor and of which he is neither the trustee nor the beneficiary. While the law requires a
party to produce documents maintained by his agents (such as, for example, his attorney or his
publicist), plaintiff has cited no case suggesting that a party has the legal authority to demand
that his relatives give him their documents.
Instead, plaintiff claims that Denton has the practical ability to obtain the materials
sought on demand, and therefore he must do so. Mot. 7-8 (quoting Costa v. Kerzner Intl
Resorts, Inc., 277 F.R.D. 468, 471 (S.D. Fla. 2011)). Plaintiffs claim is based on a
mischaracterization of both the law - the cited case deals with entities within a corporate family
- and Dentons deposition testimony. Denton never said that he could obtain the trust
documents. Rather, as the deposition excerpts attached to plaintiffs motion plainly show, when
asked when the trust was created and when his family actually acquired the shares in the
trust, Denton explained that he thought he could get that information. Conf. Harder Aff., Ex.
B at 158:7-15. Plaintiff never asked whether, and Denton certainly never testified that, he could
or would obtain the trust documents. In any event, the fact that a party could obtain a document
if it tried hard enough and maybe if it didnt try hard at all does not mean that the document is in
its possession, custody, or control; in fact it means the opposite. Chaveriat v. Williams Pipe
Line Co., 11 F.3d 1420, 1427 (7th Cir. 1993).5*8
5 When construing Florida Rules of Civil Procedure, Florida courts may look to federal
case law construing similar or identical Federal Rules of Civil Procedure, such as this case where
Florida Rule of Civil Procedure 1.350(a) is similar to Federal Rule of Civil Procedure 34(a).
Saewitz v. Saewitz, 79 So. 3d 831, 834 n.3 (Fla. 3d DCA 2012) (citing Ferrigno v. Yoder, 495
So. 2d 886, 887-88 (Fla. 2d DCA 1986)).
8
Finally, trust documents in which Denton is not involved would not shed any additional
light on his financial worth. Plaintiff claims that the trust documents are necessary to establish
that Dentons own shares of GMGI are worth more if has a controlling interest in GMGI. Mot.
at 7. Although the Gawker Defendants believe that it makes no sense to argue that Denton is
worth more because of assets held by family members, plaintiff remains free to make this
argument at trial. The point of that argument is that those family members (his niece and
nephews) also own shares of the company, but that fact is both undisputed and already the
subject of sworn deposition testimony and substantial other evidence. As a result, the actual trust
documents, which Denton does not have, are entirely unnecessary for plaintiff to be able to make
his argument.
C.
and Denton to appear for more depositions - a third deposition of Denton, and a fourth
deposition of Scott Kidder, Gawkers corporate representative. But the Court, on June 29, 2015,
rejected plaintiffs earlier request for this same relief. Ex. 3 ( June 29, 2015 Hrg. Tr.) at 139:16
(THE COURT: Were done with depositions.). Nothing has changed. Gawker and Denton
have already provided extensive testimony and documents about their financial worth at multiple
depositions, and further depositions are neither necessary nor justified.
Plaintiff also argues that he should get additional depositions because Gawker produced
certain documents after the financial worth depositions. Putting aside the fact that this argument
was already rejected by this Court on June 29, his argument ignores the facts that plaintiff waited
until just before the discovery cut off to seek punitive damages and to ask for financial worth
discovery, and that the Gawker Defendants facilitated that discovery even before the punitive
damages motion was adjudicated. Moreover, both the Mayer Brown study and the trust
involving Dentons extended family were well known to plaintiff long before the financial worth
depositions were conducted. Plaintiff should not be able to sit on his hands, have the Court deny
an earlier request for additional depositions, and then be able to move once again for the same,
already-rejected relief.
D.
are obstructing discovery by (1) having buried the Mayer Brown Economic Analysis Report,
even though Gawker listed it on its privilege log and it was the subject of deposition testimony
by its corporate designee, and (2) failing to produce trust documents that Denton does not have.
Mot. at 8. For the reasons stated above, these arguments are baseless as a matter of fact and law.
As a result, and as more generally explained in the Gawker Defendants Opposition to Plaintiffs
Motion for Attorneys Fees and Costs in connection with 15 prior discovery motions, plaintiffs
fee request is without merit.
CONCLUSION
For the foregoing reasons, plaintiffs motion should be denied in its entirety.
Dated: November 12, 2015
Seth D. Berlin
Pro Hac Vice Number: 103440
Michael Sullivan
Pro Hac Vice Number: 53347
Michael Berry
Pro Hac Vice Number: 108191
Alia L. Smith
Pro Hac Vice Number: 104249
Paul J. Safier
Pro Hac Vice Number: 103437
LEVINE SULLIVAN KOCH & SCHULZ, LLP
1899 L Street, NW, Suite 200
Washington, DC 20036
Telephone: (202) 508-1122
Facsimile: (202) 861-9888
sberlin@lskslaw.coin
mberrv@lskslaw.com
msullivan@lskslaw.eom
asmith@lskslaw.com
psafier@lskslaw.com
11
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 12th day of November, 2015,1 caused a true and
correct copy of the foregoing to be served via the Florida Courts E-Filing Portal on the
following counsel of record:
Kenneth G. Turkel, Esq.
kturkel@BajoCuva.com
dhonslon@houslonallaw.coni
shane.vout@BaioCuva.com
12
EXHIBIT 1
TO
OPPOSITION TO PLAINTIFFS MOTION TO COMPEL
ADDITIONAL FINANCIAL WORTH DISCOVERY
***ELECTRONIC ALLY FILED 11/12/2015 09:30:21 AM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY***
SCOTT
KIDDER - 4/14/2015
Page 1
-against-
Plaintiff,
Case No.
12012447 CI-011
Merrill Corporation
800-826-0277
www.deposition.com/southern-California.htm
SCOTT
KIDDER - 4/14/2015
Page 2
1
2
3
4
5
A P P E A R A N C E S :
HARDER MIRELL & ABRAMS LLP
Attorneys for Plaintiff
1925 Century Park East, Suite 800
Los Angeles, CA 90067
BY:
7
8
9
10
11
12
13
14
15
ALSO PRESENT:
ADAM KOWALCZYK, Videographer
HEATHER L. DIETRICK, Gawker Media
16
17
18
19
20
21
22
23
24
25
Merrill Corporation
800-826-0277
www.deposition.com/southern-California.htm
SCOTT
KIDDER - 4/14/2015
Page 144
SCOTT KIDDER
13:08:26
13:08:29
13:08:29
13:08:33
13:08:35
13:08:38
13:08:43
13:08:48
13:08:49
Q.
10
13:08:56
11
13:09:03
12
13:09:05
13
A.
13:09:09
14
13:09:12
15
13:09:14
16
13:09:17
17
18
13:09:25
19
13:09:27
20
say.
13:09:29
21
Q.
So just so I understand.
It
13:09:22
The terms
13:09:34
22
13:09:38
23
13:09:42
24
13:09:50
25
Merrill Corporation
800-826-0277
www.deposition.com/southern-california.htm
SCOTT
KIDDER - 4/14/2015
Page 145
1
2
SCOTT KIDDER
A.
13:09:51
13:09:53
13:09:55
13:10:00
13:10:04
13 : 10 : 06
13:10:08
13:10:11
13:10:15
would happen.
13:10:16
10
11
13:10:18
12
13:10:23
13
13:10:25
14
13:10:27
15
16
13:10:32
17
13:10:33
18
Q.
13:10:30
13:10:37
19
20
13:10:44
21
13:10:48
22
13:10:51
23
13:10:53
24
25
A.
Other than
which I just...
Merrill Corporation
800-826-0277
www.deposition.com/southern-california.htm
13:10:40
13:10:59
SCOTT
KIDDER - 4/14/2015
Page 277
SCOTT KIDDER
THE VIDEOGRAPHER:
1 7 :25:02
1 7 :25:05
1 7 :25:07
of Scott Kidder.
1 7 :25:11
(TIME NOTED:
1 7 :25:14
5:25 P.M.)
SCOTT KIDDER
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Merrill Corporation
800-826-0277
www.deposition.com/southern-California.htm
SCOTT
KIDDER - 4/14/2015
Page 278
1
2
3
C E R T I F I C A T E
STATE OF NEW YORK
4
5
)
: ss.
6
7
10
11
~l2
13
14
15
1
A'
1b
17
18
19
hand this
22^
day of
2015.
20
21
22
23
WILLIAM VISCONTI
24
25
800-826-0277
Merrill Corporation
www.deposition.com/southern-calif ornia.htm
EXHIBIT 2
TO
OPPOSITION TO PLAINTIFFS MOTION TO COMPEL
ADDITIONAL FINANCIAL WORTH DISCOVERY
***ELECTRONIC ALLY FILED 11/12/2015 09:30:21 AM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY***
CONFIDENTIAL
vs.
HEATHER CLEM; GAWKER MEDIA,
LLC aka GAWKER MEDIA; et al..
Defendants.
_______________ ________________
Nick Denton, hereby declare under penalty of perjury that the following is true and
2.
I submit this Affidavit in connection with courts ruling on June 29, 2015,
regarding additional financial worth discovery in response to plaintiffs Motion to Compel Full
and Complete Financial Worth Discovery (Plaintiffs Motion).
3.
the coverage provided on the entire building generally by the condominium association). I verify
that I do not have insurance on the contents of my Manhattan condominium.
4.
I verify that the bank statements and related information being produced herewith
represent all the documents responsive to the requests numbered 7, 8, 23, 24, 28, and 29 in
Plaintiff s Motion that I have been able to access or otherwise locate after a diligent search. The
screenshot of text messages shows the current currency balances of my Citibank account.
CO NFIDENTIAL
5.
I verify that I do not have the documents memorializing the trust that is the
dnton
STATE OF NEW YORK
COUNTY OF NEW YORK
The foregoing Affidavit of Nick Denton was SWORN TO AN D SUBSCRIBED before
CL-Jj.
KAVITHA REDDY
NOTARYPUBLICSTATEOF NEWYORK
EXHIBIT 3
TO
OPPOSITION TO PLAINTIFFS MOTION TO COMPEL
ADDITIONAL FINANCIAL WORTH DISCOVERY
***ELECTRONIC ALLY FILED 11/12/2015 09:30:21 AM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY***
1
IN THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT
IN AND FOR PINELLAS COUNTY, FLORIDA
CIVIL DIVISION
Plaintiff,
Case No.
12-012447-CI-011
VS .
HEATHER CLEM; GAWKER MEDIA,
LLC, a ka GAWKER MEDIA, et
a l .,
Defendants.
/
June 29,
2015
TIME:
9 : 29 a.m.
PLACE:
REPORTED BY:
Aa r o n T. P e r k i n s , RPR
Notary Public, S ta te of
F l o r i d a a t Large
Pages 1 t o
to
1 2 : 4 0 p. m.
151
APPEARANCES:
2
3
4
5
6
7
8
9
10
11
12
13
14
15
APPEARANCES CONTINUED:
16
17
18
19
20
21
22
23
24
25
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
ALSO PRESENT:
Heather L. Dietrick,
President and General counsel for The Gawker
Media Group
Alison Steele, Esquire
Rahdert, Steele & Reynolds, P.A.
535 Central Avenue
St. Petersburg, Florida 33701
Anna M. Phillips, Tampa Bay Times
24
25
135
1
luxury car.
something else.
about.
THE COURT:
deny it.
10
All right.
11
12
argument?
13
14
MR. BERLIN:
documents.
15
THE COURT:
16
MR. BERLIN:
17
18
19
20
21
22
THE COURT:
saying.
23
THE COURT:
24
All right.
25
139
1
financing.
provided.
provided.
8
9
MR. BERLIN:
If there is some
10
11
12
13
THE COURT:
Okay.
14
MR. VOGT:
15
THE COURT:
16
So it looks
17
18
19
docket.
20
21
really hard.
22
23
aspect of it.
24
Okay.
25
MR. BERLIN:
151
1
REPORTER'S CERTIFICATE
2
3
4
STATE OF FLORIDA
COUNTY OF HILLSBOROUGH
5
6
7
8
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
EXHIBIT 4
TO
OPPOSITION TO PLAINTIFFS MOTION TO COMPEL
ADDITIONAL FINANCIAL WORTH DISCOVERY
***ELECTRONIC ALLY FILED 11/12/2015 09:30:21 AM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY***
33.
For the time period beginning January 1,2011, to the time of the response to this
For the time period beginning January 1, 2011, to the time of the response to this
Request, any and all DOCUMENTS showing any and all ownership and/or other interests YOU
hold, for yourself personally and/or on behalf of GAWKER, KINJA or GMGI, in real estate
(including both ownership and leasehold interests), any interests in other businesses, and/or any
other form of investment, including without limitation DOCUMENTS sufficient to show the fair
value and/or fair market value or worth of any and all such interests.
35.
or from YOU (individually, jointly, or otherwise), for yourself personally and/or on behalf of
GAWKER, KINJA or GMGI, during any part of the period of January 1, 2011 to the time of the
response of this Request, including DOCUMENTS sufficient to show the terms of all such
leases, the location of the property(ies), the amount of rent paid, the owner of the property(ies)
and the duration of the lease(s).
36.
DOCUMENTS sufficient to show any and all ownership interests YOU hold
(either individually, jointly, or otherwise, for yourself personally and/or on behalf of GAWKER,
11
42.
GAWKER, KINJA or GMGI, are or were the grantor, settlor, trustee, beneficiary or in which
YOU have or had any interest, legal or equitable, at any time from January 1, 2011, until the time
of the response to the Request.
43.
YOUR assets upon YOUR demise including, without limitation, wills and testamentary trusts.
44.
45.
keep in a safe or similar apparatus, regardless of the location of such safe or apparatus for
yourself personally and/or on behalf of GAWKER, KINJA or GMGI.
46.
All DOCUMENTS showing the source of funds YOU have used to pay any
any property valued at more than $1,000 in which YOU have participated since 2011.
48.
For the time period beginning January 1,2011, to the time of the response to this
For the time period beginning January 1,2011, to the time of the response to this
13
91.
provided any benefit to YOU, KINJA and/or GMGI at any time from January 1, 2011 to present.
92.
provided any benefit to YOU, KINJA and/or GAWKER at any time from January 1, 2011 to
present.
21
EXHIBIT A
(to Plaintiffs Second Amended Notice of Hearing)
***ELECTRONICALLY FILED 11/17/2015 01:49:12 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY***
Tampa
601 South Boulevard, Tampa. FL 33606
ph 813-984-3060 fax 613-384-3070 toll free 866-395-7100
h i, t s a a. c v _____ __ __
Lo [ C E
South Florida
401 SE 12th Street. Sle 300. Fort Lauderdale, FL 3331c
ph 954-703-3416 fax 954-400-5415
8461 Lake Worth Roaa, St=. 114, Lake Wortti, FL 33467
ph 561-34C-1433 fax 561-340-1432
4rrov [blavhpjt,com
Gregg D. Tliomas
Direct Dial: (813) 984-3066
gthomas@tlolawfirm .com
Gregg D. Thomas
Enclosures
cc:
Counsel of Records (cover letter and binder index only)
vs.
HEATHER CLEM; GAWKER MEDIA,
I.LC aka GAWKER MEDIA; et aL
Defendants.
D escription
Gawkers income statements for every year since 2011, plus for the
period January through April 2015
[G aw ker IS323, 28223-28224)
Gawkers balance sheets for every year since 2011, plus for the period
January through April 2015
Gawker's statements of cash flow for every year since 2011, plus for the
period January through April 2015
(Curate 2 8 2 2 3 - 2 8 2 3 3 ]
oj
All available W2 forms for Nick Denton and A.J. Daulerio since 2011
[ G r a k e r 2850I-2S 5I 1]
i
i
[D e m o n 1 0 4 -3 2 0 ]
10
(G a w k e r 2 4 3 4 8 -2 4 3 S 8 ]
11
104]
12
[A JD 069]
Gawkers leases
13
IG a w k e r 2 8 2 3 8 - 2 8 4 8 0 ]
14
| D e m o n 0 2 9 -6 7 ]
15
16
17
18
IG a w k e r 243S 9 - 24378]
2S4S7J
19
:o