LAS VEGAS—Liberty Media lawyer Marc Randazza responded today to Oron.com's emergency motion seeking access to $375,000 for lawyers and operating expenses and an extra week to prepare to for the hearing on the plaintiff's demand for a preliminary injunction against the Hong King-based file locker service. In a partial opposition to the Oron motion, Randazza argued that Oron is unnecessarily seeking far more money than it needs.
"Oron has sought leave from this Court to withdraw nearly $400,000 in funds to represent itself for, at most, ten (10) days," asserts Randazza. "This is an exorbitant amount of money for such a short period of time. Moreover, Oron fails to provide this Court with any basis, calculations or rationale for how it concluded that this fantastic sum was necessary. Further, Oron claims that it has no other funds, when the Plaintiff is in possession of a statement provided by PayPal, Inc., showing more than $5 million have passed through FF MAGNAT’s account (Exhibit C).
"Furthermore," he continues, "the Plaintiff has information suggesting that Oron has multiple other accounts and stashes of funds from which it could draw this amount of money. (Exhibits D-G) Yet Oron wants to withdraw funds from PayPal—the one banking institution over which this Court likely has jurisdiction. Oron’s deception is transparent."
The response claims that in asking the court for permission to access "$25,000 per day over the next week in order to brief and prepare for its hearing on the order to show cause regarding Plaintiff’s requested preliminary injunction," Oron is seeking "nearly enough money over the next week to see the average litigation case through trial and appeal."
Randazza further states, "It is unreasonable for Oron to demand a nearly $400,000 withdrawal from its known accounts for payment of its attorneys’ fees and operating expenses when, according to Oron’s counsel, that amount is purportedly very close to Oron’s value as a going concern. Specifically, Oron’s counsel represented that a settlement demand of $500,000 was 'an unreasonable amount' to the defendants and “more than the company itself was worth” in previous discussions (See Exhibits A and B)."
Randazza continues, "For all of Oron’s rhetoric, Defendants have not provided this Court with any evidence that the services it offers will be disrupted, and its business harmed, if it does not withdraw the requested funds. Defendants have also not provided the Court with a schedule of their attorneys’ fees for the Court or LMH to evaluate their reasonableness. While the Defendants’ motion discusses for nearly 20 pages the alleged harms it will suffer without the immediate withdrawal of $375,000, it engages in a calculated misdirection: Oron creates a sense of urgency without providing any evidence or relevant facts that actually substantiate any harm whatsoever."
Randazza also targets Oron's credibility by arguing that Oron's request for relief "smack of impropriety" in light of his claim, supported by exhibits, that "[Libery Media] has received an accounting of Oron’s assets for the account associated with the e-mail address 'firstname.lastname@example.org.' A true and correct copy of this subpoena response is attached as Exhibit C. On the first page of this report, PayPal states that Oron has received more than $5,000,000, with a current balance of more than one million Euro—well in excess of $1,000,000.
"The court should contrast these provable assets in just one of Defendants’ PayPal accounts to Oron’s prior representations that the company is worth less than $500,000 (Exhibit B)," he says, adding, "This creates a serious question as to what the Defendants’ assets truly are, and what degree of credibility should be given to their statements without sworn testimony and authenticated records."
Adding fuel to that fire, Randazza takes direct aim at Oron's business model, stating, "Oron’s funds are all the proceeds of an illegal enterprise. At the upcoming hearing, the Plaintiff is prepared to present evidence to support this. Furthermore, the Plaintiff intends to present a witness who can testify to the fact that Oron.com, with its promises of anonymity for its users, is a repository for child pornography, as well as infringing content. It owns and operates indexes of this material on forumophilia.com and pornbb.com.
"Accordingly," he continues, "Oron has filled its coffers with at least $5 million in ill-gotten gains derived from monetizing wholesale copyright infringement and the distribution of illegal child pornography. Now, with only $1.6 million of this cache located, Oron wants the Court to permit it to dissipate nearly $400,000 in one week. It should not do so."
The filing identifies the aforementioned witness as Takedown Piracy's Nate Glass.
Sounding a loud alarm regarding the potential outcome if the court agrees to Oron's emergency request, Randazza writes that even if the $38,000,000 sought by Liberty for statutory damages is reduced to $6,000,000 if the infringement is not found to be willful, "The equitable relief of disgorgement of ill-gotten profits will be impossible to effect if Oron manages to sweep its illegal profits into hidden bank accounts or other places where criminals hide their money. MegaUpload, a file locker service with an affiliate program similar to Oron’s, was recently indicted by the U.S. Department of Justice along with its principals on counts of racketeering and money laundering, distinct from its widespread copyright infringement. The only difference between Megaupload and Oron is that Oron is even more brazenly violating the law."
The plaintiff has agreed to extend the briefing schedule by one week, though "upon the conditions that a) the current TRO remains in effect, and b) at the conclusion of the briefing, an evidentiary hearing on the plaintiff’s motion for preliminary injunction, this Court’s order to show cause is held."
If funds are to be released to Oron, Randazza concludes, "defendant must provide the Court a full accounting of its assets—including its incoming revenue... Only then will the Court be able to engage in the proper analysis of what funds may be released to preserve the plaintiff’s right to recovery."
The partial opposition to Oron's emergency motion can be accessed here.