Re: 8/30/00 - [ZSUN] Defendant Schneider files complaint against Atty Timothy Blackford to California State Bar
Floyd Schneider
XX XXXXXX XXXXXXXXX XXXX
XXXXXX, XX XXXXX
Tel XXX.XXX.XXXX
Fax XXX.XXX.XXXX.
floyd3491@aol.com
August 30, 2000
California State Bar
180 Howard Street
San Francisco, CA 94105
Attention: Attorney Complaint Division
Re: Cragun v. Does
San Diego Superior Court Case No. 730826
ZiaSun Technologies, Inc v. Schneider, et al.
Case No. C00-1612 PJH, USDC ND CA
Dear Sir/Madam:
I am a defendant in both of the above matters. These are “cybersmear” lawsuits, i.e., I and others are alleged to have made defamatory statements about the plaintiffs through Internet chatrooms. This complaint concerns actions taken by Timothy Blackford, attorney for plaintiff in the San Diego action. Mr. Blackford is associated with the law firm Gray Cary Ware & Freidenrich LLP, 401 B Street, Suite 1700, San Diego, CA 92101, tel 619-699-2700, fax 619-236-1048. My attorney is James A. Shalvoy, 1201 Morningside Drive Suite 215, Manhattan Beach, CA 90266, tel 310-796-0447, fax 310-796-0277.
The complaint in the San Diego action was filed on or about May 14, 1999. It alleges that I made false statements about the plaintiff, Bryant Cragun, through Internet chatrooms. The complaint fails to allege what the statements consisted of, who made them, or how they are false. The complaint alleges unfair and deceptive business practices under the California Business and Professions Code. Although this matter has been pending for over a year, and extensive discovery has been propounded and responded to, plaintiff has yet to disclose a single actionable statement made by me. A motion to compel Mr. Cragun to disclose this information, and for sanctions against him and his law firm, will be heard September 22, 2000.
On or about January 27, 2000, Mr. Cragun applied ex parte for a temporary
California State Bar
August 30, 2000
Page 2
restraining order against me. The basis for the application was that I was allegedly issuing Internet press releases regarding ZiaSun Technologies, Inc., a company with which Mr. Cragun is associated, based on false facts, but designed to resemble legitimate analyst positions released by ZiaSun itself. See Memorandum Of Points And Authorities In Support Of Plaintiff’s Application For Temporary Restraining Order, p. 6 therein; see also Declaration Of Timothy S. Blackford In Support Of Plaintiff Bryant Cragun’s Application For Temporary Restraining Order, para. 10-11, exhibits 1-2.
Exhibits 1 and 2 attached to Mr. Blackford’s declaration are the allegedly false “press releases” issued by me. The words “Company Press Release” at the top of each release, however, were not put there by me. They were put there by Yahoo. I sent the press releases to Business Wire without the words “Company Press Release” on them. A copy of the press releases sent by me to Business Wire are attached hereto as exhibit A. You will note that they do not contain the words “Company Press Release.”
Business Wire then sent the press releases over the Internet to many portals, one of them being Yahoo. Yahoo added the tag line “Company Press Release” above the body of the release without my authorization, knowledge, or consent.
On January 31, 2000, the San Diego Superior Court entered a temporary restraining order against me. The alleged use by me of the words “Company Press Release” played a large part in the court’s decision. In the TRO, drafted by Mr. Blackford’s firm, the court stated:
“IT IS FURTHER ORDERED that Floyd D. Schneider is hereby enjoined and restrained from publishing, whether electronically, in writing, orally, or otherwise, any statements using the line “Company Press Release” or mentioning Cragun or ZiaSun in the heading or subheading of any statement without disclosing in the heading or subheading in clear language that this release is not issued or authorized by either Cragun or ZiaSun (emphasis added).”
Upon being served with the TRO, I immediately contacted Mr. Blackford and advised him that I was not responsible for putting the words “Company Press Release” on the subject press releases. See the e-mail from me to Mr. Blackford dated February 6, 2000 attached hereto as exhibit B that states:
“This is business wires response to me in a email about the ‘Company Press Release’ that you to the judge in the Bryant Cragun Law suit that I had put in my press release of Jan. 1 and jan 3 of 2000 to make it look like a official Ziasun press release. For the record what you told the judge was not the truth.
California State Bar
August 30, 2000
Page 3
“In regard to the below reference to Yahoo’s placement of the words “Company
Press Release”, that is an issue that you need to take up with Yahoo directly as they are the ones who add that tag line above the release, not Business Wire (emphasis added). [Signed] Phyllis Dantuano, Vice President, New York Regional Manager, Business Wire/New York, 212-752-9600, phyllis@bizwire.com”
Notwithstanding Mr. Blackford’s knowledge that I was not responsible for putting the words “Company Press Release” on the press releases, he allowed a sworn declaration by Mark Harris to be used in support of a preliminary injunction against me that repeated this false assertion, i.e., that I was responsible for utilizing a format and language that made it appear that the press release was issued by ZiaSun. See Declaration of Mark Harris In Support Of Motion For Preliminary Injunction, para. 2-3. A preliminary injunction was subsequently entered by the court against me on February 15, 2000 based on this knowingly false declaration drafted by an attorney at Gray Cary Ware & Freidenrich LLP, and after I had advised Mr. Blackford of its falsity. That injunction remains in effect today. I was not represented by counsel at the time these actions took place.
Although I am layman, I understand that it is a violation of the California Rules of Professional Conduct for a lawyer to suppress evidence that he has a legal obligation to produce:
“A member shall not suppress any evidence that the member or the member’s client has a legal obligation to reveal or produce.” Rules of Professional Conduct, Rule 5-220.
In light of the language in the TRO, it is clear that Mr. Blackford and the other members of his firm had a duty to advise the court that the words “Company Press Release” were not put on the subject press releases by me when it applied for the preliminary injunction. Mr. Blackford failed to do so, even after he was advised of this in writing by me prior to the hearing on the preliminary injunction.. Instead, Mr. Blackford and other attorneys in his firm concealed this information from the court and wrongfully obtained the preliminary injunction.
I understand that these actions may also constitute a violation of CCP 128.7 which requires all allegations and factual contentions in a pleading to have evidentiary support.
I bring this matter to your attention as the disciplinary arm of the State Bar and, more importantly, in light of the recent Wall Street Journal article regarding Mr. Cragun. (“Hot For U.S. Stocks, Foreigners Get Burned In Regulatory Limbo, WSJ, August 16, 2000, page 1.) California State Bar
August 30, 2000
Page 4
A copy of the article is attached hereto as exhibit C. As you can see, Mr. Cragun is associated with a shadowy world of stock manipulators and scam artists. He obviously will not hesitate to say anything if it will further his interests. As officers of the court, however, Mr. Blackford and the other attorneys in his firm are held to the higher standard of telling not only the truth, but the unvarnished truth. They have fallen woefully short of that standard.
I have instructed my attorney to pursue all available remedies for the damages I have suffered from Mr. Blackford’s illegal and unethical actions, including seeking dissolution of the preliminary injunction and sanctions under CCP 128.7.
Please contact me or my attorney, James A. Shalvoy, if I can provide you with any additional information.
Very truly yours,
Floyd Schneider
FS/hs
EXHIBIT A
(Copy of press releases sent to business wire without the words “Company Press Release” on them)
EXHIBIT B
(copy of e-mail to Blackford re the press releases)
EXHIBIT C
(copy of WSJ article)
Originally posted at: Message 14344068 |
