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Mar 23 2012

Hollywood Extortion IV: Pick and Choose Your Battles (Reality Steve Lawsuit)

This article is Part 8 of ongoing coverage of the Reality Steve Extortion Lawsuit.

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I got done watching Carbone’s latest video blog two hours ago. I have never tuned in to one of his live video blogs but the tweet he issued about having “a rough 24 hours” was ominous to me. All indications were that he had a good time in NYC but suddenly because he is back at home in Texas, he is having a rough time? Carbone certainly had time to write out one update before coming on to his video blog. I took it as a hint that perhaps I needed to tune in to his video blog “live” just in case there was something to write about.

And boy, was I squirming in my chair watching Carbone tonight. It was as “real” as anyone has seen him on-camera.  This was “Real Steve”, not “Reality Steve”. Carbone truly owned up to the stress and upset, and shared with his fans and audience how much the lawsuit is affecting him.  It twisted me up to see him that way but I respect him for it. It takes an incredible amount of courage to do that especially for guys. Seeing his pain actually motivated me to get this post out ASAP.

What you are witnessing is the attack and slow destruction of someone who is simply too good at what he does: entertainment reporting. What you are witnessing is a multi-million dollar, old-dinosaur, big media operation being threatened by a one-man, bootstrapped media show. Can you freaking believe this?

In fact, this has become a mini-reality show unto itself if you think about it. Carbone needs to get one of his friends and start filming the stuff that no one is seeing right now: the pain, the process, and the struggle.  Carbone never signed up to be on a reality show per se, but he is on a reality show, one of the “Bachelor” producers making.  It is time to take control of this and flip it around. Get that camera rolling and start recording his daily diaries into the camcorder. Launch a separate website spotlighting his new reality show called “The Legal Extortion of Reality Steve” or something. It would get some press very quickly. Have it be a mini-series and charge for admission.  Use the monies for legal fees. Be honest with the fans and readership that the money is used for a good cause.

The footage and the experience will be worth something AFTER this bullshit lawsuit is all over with. And if someone thinks what I just said sounds like a joke, let me be clear, I am not joking.

Enough of that for now, let’s get to work.

In my Hollywood Extortion III article, I summarized how the legal combatants have not even remotely gotten close to arguing and defending the central allegations of the lawsuit (tortious interference). I also stated that Carbone looked to be in good shape for the Main Event if it went that far. That is a BIG FAT IF, unless Carbone is bankrupted first.

In the docket, I saw all kinds of lawyer jockeying.  The original plaintiff lawyers (Linda Burrow & Tina Wong) who filed the complaint were replaced by someone who appears to be a Hollywood old-time lawyer, Michael J. O’Connor on December 16, 2011.

And then on January 25, 2012, a young attorney, Andrew W. DeFrancis was brought into the case presumably to assist. It is sheer speculation on my part, but I think that he was brought in because the case involves Internet and online issues. The younger attorney may be better qualified to deal with these matters than a Hollywood old-timer that sold his practice out to a big corporate firm.

On Carbone’s side, Brad Kizzia, Texas attorney, is working with Gregg Farley attorney from Los Angeles (as local counsel in California) so that Kizzia can work in California on Carbone’s behalf. Kizzia appears to be the lead attorney at the moment.

At this point, I am giving everyone fair warning, it is going to get a bit technical going forward. Only the brave and mighty dare proceed forward. You are entering into an eye-glazing zone. I am sorry but it’s important to share some of the gritty details.  All children (and many adults) should cover their eyes because I am going to attempt to describe this money-sucking, sideshow knife-fight the best and simplest way I can.

 

On January 20, 2012, defendants (Carbone and Reality Steve LLC) filed a motion to dismiss the case due to jurisdiction issues since Carbone resides entirely in Texas. Fine, no problem there. Unfortunately, plaintiffs fought back and claimed diversity issues. This means that because defendants are entirely in Texas and plaintiffs are entirely in California, plaintiffs are asking the federal district court in California to assert its authority to hear the case.

According to the docket, on January 20, 2012, a proceeding occurred in the judge’s chambers. The judge asked the plaintiffs to show why the case shouldn’t be dismissed given that Carbone and Reality Steve LLC reside in Texas yet the plaintiffs filed the lawsuit in California. As explained in the Civil Minutes, the judge asked the plaintiffs to find out who and where EVERY member of Reality Steve LLC resides since the plaintiff lawyers left that piece of information out in their effort to focus on Carbone directly and individually.

On January 25, 2012, the docket states that plaintiffs asked for more time to do jurisdictional discovery. That means they needed time to find out where all the defendant parties truly reside. They asked for 60-additional days.  Along with the 60-days, young attorney Andrew W. DeFrancis was brought in to assist the plaintiffs on their case.

DeFrancis submitted a series of exhibits consisting of copies of old posts from RealitySteve.com referencing Carbone’s references to living in California and a copy of the domain registration printout in an attempt to show that Carbone had a California presence. The problem here is that Carbone moved to Texas in 2006 and the earlier blog posts appear to be way prior to 2006. Carbone has publicly stated that he moved to Texas in 2006.  According to Carbone in his video interview in August 2010, RealitySteve.com was still a hobby for him and he wasn’t generating money.

 Regarding the domain registration, it appears to show Carbone’s old address. It is an easy mistake to make and easy to refute. Most people simply pay their $10-$15 annual domain renewal fee without ever thinking of changing the contact information on the domain registration.

On January 31, 2012, the judge granted the plaintiff request for 60-days.

On February 1, 2012, plaintiffs submitted their response and Exhibit on Yea Network LLC. A formal response by plaintiff argues that California has jurisdiction due the grounds of diversity. Defendant makes the argument that Carbone lives in Texas and the burden is disproportionate for him.

On February 9, 2012 the judge ordered the defendants to provide information of where the other member of Reality Steve LLC resided within 10 days.

On February 16, 2012, defendants provided a detailed response with exhibits.

On February 24, 2012, the judge was satisfied and found the information he received sufficient even though the name of the owner behind Yea Network was never revealed. The judge determined that the parties were completely diverse for purposes of diversity jurisdiction.

 

I typed this chronology in painful detail to let everyone know how tedious the fight has become at $350-$400/hour.  All of this just to determine which court and WHERE to deal with the lawsuit Complaint!

Nearly a month has transpired without court docket activity but clearly something is happening behind the scenes. Carbone stated that settlement attempts have been made but found the language of the settlement agreement unsatisfactory. The back and forth of the language is a crock-pot process.  It is a slow-cook process wearing Carbone down while racking up the billable hours.

From what little I know, plaintiffs are motivated to settle with Carbone.  Carbone also appears to want to settle but he rightfully doesn’t want to pay a high price that will effectively cripple his career in blogging, reporting, or anything communication related.

Having spoken with attorney Oscar Michelen about similar situations when a smaller, less-resourced individual or business goes up against a much larger and better-financed opponent in court, you have to look at where the most essential battle needs to take place.

We believe in a common philosophy: pick and choose your battles. Many people say “fight them every step of the way” which sounds really good to the ear but can be financial suicide to your bank account and credit standing. Justice is not cheap. All this money and effort should be used for the Main Event, not the side fights.

Aside from travel issues, maybe it is time for Carbone to explore his options and reconsider his position and simply agree to fight in California altogether.  I know there are some downsides to this but he has to weigh out how much benefit he truly gets by moving it to Texas.

By simply “giving” the plaintiffs what they want (a fight in California), Carbone can stop and get out of the financial bleeding on the money-draining sideshow and move on to the more important matters at hand.  I would consider filing a countersuit, suing for legal fees incurred, and asking for punitive damages for filing a frivolous lawsuit against him. Admittedly, punitive damages will be difficult to get but you might as well add it to the countersuit.

But the bottom line is to get in front of the judge ASAP and get a resolution so he can move on with his life. Since Carbone never paid anyone for information and the plaintiffs have no proof or smoking gun, he stands a good chance of winning.

What I am proposing may sound radical, but it can potentially throw the other side off-balance and more importantly, conserve his financial resources for the bigger, more important battle down the road.  Sometimes you have to be willing to give in to a few smaller battles to win the larger war.

 

 

3 comments

  1. mizmak

    I look forward to your articles and this one was excellent as usual.

    1. Matthew Chan

      Thank you.

  2. JoJoBee

    Do you know any hard-hitting sales/marketing geniuses? Noticed that Steve was drinking a Coors Light in his video. Seems to me Steve could get a serious endorsement deal (to help with legal costs, of course), or at the very least support from Coors, provided they aren’t the ‘official’ vendor for the Bachelor franchise. Just a thought…

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