Steve Harvey Skates Away From $50 Million Lawsuit

January 30, 2017
By David Lee

DALLAS (CN) – A federal jury rejected a videographer’s $50 million claim against comedian and talk show host Steve Harvey, who refused to release video of his old comedy routines containing embarrassing material.

The jury deliberated for several hours before concluding on Thursday that plaintiff Joe Cooper never had a valid contract.

Cooper claimed he signed a deal with Harvey in 1993 in which his company, Close Up Video Productions, was named exclusive videographer for the Dallas-based Steve Harvey Comedy Club.

Cooper claimed the 120 hours of video were his exclusive property under the agreement.

“Harvey knew that Cooper intended to use his videos of Harvey’s performances to create videos that would be sold at retail,” the 2014 complaint stated. “Harvey did not disagree with Cooper’s plans, but requested that Cooper delay in selling videos using Harvey’s performances. Cooper understood that the release of the videos might interfere with Harvey’s plans for his career at that time. Cooper decided to delay his Harvey video project because the videos would become more valuable if Harvey became a bigger celebrity.”

The videos include a routine in which Harvey tells the audience to “go assault old white women,” according to news reports.

Harvey is host of the game show “Family Feud,” a nationally syndicated morning radio show and his eponymous TV talk show. He also was one of the stars in the hit stand-up comedy film “The Original Kings of Comedy” in 2000.

Jurors did not hear or view excerpts of the tapes. The trial occurred as Harvey was being blasted on social media for comments he made on his television show this month against Asian men and soon afterward meeting with President Donald Trump.

Jurors concluded that Cooper misappropriated Harvey’s name or likeness and that Harvey did not consent to the use of his identity. Determination of damages was not necessary, as the parties quickly entered into a settlement and ended the trial, according to court records.

From Courthouse News.

Damages Sought in Oculus Fight Doubles to $4B

January 30, 2017
By David Lee

DALLAS (CN) – Attorneys for video game publisher ZeniMax asked a Dallas federal jury to give it $4 billion during closing arguments Thursday in its case claiming Facebook’s virtual reality subsidiary stole its headset technology.

The request doubles the $2 billion the Rockville, Md.-based company originally asked for. ZeniMax and subsidiary id Software, of Richardson, Texas, sued Oculus VR and founder Palmer Luckey in May 2013, two months after Facebook bought Oculus for $2 billion.

ZeniMax claims Oculus and Luckey violated a nondisclosure agreement in the creation of the Oculus Rift virtual-reality headset and that Luckey relied on the help of id Software employees during Rift’s development.

Facebook CEO Mark Zuckerberg testified last week the final purchase price for Oculus was $3 billion, as additional payments were made to keep key employees and for performance bonuses. Oculus’ owners were reluctant to sell at first, having valued the company at $4 billion, Zuckerberg said.

ZeniMax’s attorney Tony Sammi, with Skadden Arps in New York, told jurors that Luckey was only a hobbyist and not a software expert. He said id Software co-founder John Carmack, who conversed with Luckey during development, was vital to what makes Rift a desirable virtual reality experience, Polygon.com reported.

Carmack is best known as lead programmer of id Software’s hit first-person shooter games Wolfenstein 3D, Doom and Quake. In 2013, he became chief technology officer at Oculus.

Sammi told jurors the final functionality of Oculus’ code came from Carmack and ZeniMax’s Rage VR testbed and Doom 3 BFG Edition, in violation of Luckey’s nondisclosure agreement. He asked for $2 billion in compensatory damages and $2 million in punitive damages, citing Facebook’s high net worth.

Defense attorney Beth Wilkinson, with Wilkinson Walsh in Washington, told jurors ZeniMax and id Software are jealous, angry and embarrassed. She said this is a case of “sour grapes.”

Wilkinson cited testimony by a forensics expert that there was no evidence of copying in Oculus’ code, as well as testimony by Carmack that Oculus never received actual source code for either the Rage VR testbed or Doom 3 BFG Edition.

During a combative direct examination last week, Luckey testified that he did not violate the nondisclosure agreement. He said that when he demonstrated his headset to investors in 2014, he executed the plaintiffs’ code through the headset but did not take the source code itself.

The jury is expected to deliberate for several days.

From Courthouse News.

Ponzi Receiver Can’t Take Mogul’s $88M

January 20, 2017
By David Lee

DALLAS (CN) – A Dallas federal jury Wednesday told the court-appointed receiver for R. Allen Stanford’s $7 billion international Ponzi scheme that he could not take $88 million from billionaire investor and film producer Gary Magness.

The seven-member jury unanimously concluded that Magness’ investment entities acted in good faith when they took out $88 million in loans from a Stanford affiliated bank in October 2008.

The jurors found the defendants had notice that Stanford’s certificate of deposit investment scheme may have been a fraud and failed to investigate, but that investigation would have been futile.

“An investigation would be futile if a diligent inquiry would not have revealed to a reasonable person that Stanford was running a Ponzi scheme,” the jury charge stated. “To establish futility the Magness parties are not required to prove that they actually conducted a diligent inquiry.”

Magness is chairman of Denver-based Magness Investment Group LLC, a private holding company that manages his investment portfolio and businesses. Magness and his wife, Sarah Siegel-Magness, founded Smokewood Entertainment, the production company behind the Oscar-nominated film, “Precious: Based on the Novel Push by Sapphire.”

He also owns Magness Land & Cattle and is a significant stockholder in the cable industry, according to his website.

Receiver Ralph S. Janvey, an attorney with Krage Janvey in Dallas, sued Magness for the money in February 2015.

Janvey has filed dozens lawsuits to claw back money investors lost to Stanford’s Ponzi scheme. Defendants have included the Miami Heat basketball team, New Orleans-based law firm Adams & Reese, Baton Rouge-based law firm Breazeale Sachse & Wilson, the University of Miami, Texas A&M University, the PGA Tour, the ATP tennis tour, and several Stanford entity investors, members and officers.

In April last year the Texas Supreme Court rejected Janvey’s claim against The Golf Channel for $6 million a Stanford entity paid for advertising. The court concluded the advertisements had “reasonably equivalent value” under Texas law.

Stanford is serving a 110-year prison sentence.

From Courthouse News.

Magellan Pipeline Pays $18 Million for 3 Oil Spills

January 20, 2017
By David Lee

TULSA, Okla. (CN) – Magellan Pipeline Co. will pay $18 million to settle U.S. Environmental Protection Agency claims for oil spills in three states.

Tulsa-based Magellan Pipeline spilled more than 5,000 barrels of gas, diesel and jet fuel in separate incidents in Texas City, Texas, Nemaha, Neb., and El Dorado, Kan., according to the Jan. 19 consent decree.

Magellan will pay a $2 million civil penalty and spend $16 million on its 11,000-mile pipeline system, Magellan’s pipelines transport fuel across 15 states in the central United States.

The EPA said 482 barrels were spilled in Texas City on Feb. 24, 2011, when a pipeline ruptured and near Pierre Bayou.

An unidentified third party’s heavy machinery struck two Magellan pipelines on Dec. 20, 2011, in Nemah, spilling 2,800 barrels spilling into nearby Jarvis Creek.

More than 1,800 barrels were spilled on May 4, 2015, when a pipeline in El Dorado ruptured and spilled into Constant Creek.

Magellan must complete its cleanup at Nemah, enhance training for its third-party damage prevention staff, update its information resources on selective seam corrosion, upgrade its integrity management plan and create a publicly accessible web page to report pipeline spills and the company’s responses.

From Courthouse News.

Dallas Attorney’s Death Called Accidental

January 20, 2017
By David Lee

DALLAS (CN) – The Dallas County medical examiner concluded Thursday that the death of prominent personal injury attorney Brian Loncar in the days after his teenage daughter’s suicide was due to an accidental cocaine overdose.

Loncar, 56, was found unresponsive in his Rolls-Royce outside his law office on Dec. 6. He was pronounced dead at nearby Baylor University Medical Center.

Two days earlier, Loncar had buried his 16-year-old daughter Grace, who shot herself on Nov. 26 after a years-long battle with depression.

Loncar died from the cocaine and secondary causes of heart disease, hypertension and high blood pressure, according to the medical examiner.

Loncar was known throughout Texas for his television commercials that ran for decades. Billing himself as the “Strong Arm,” Loncar spoke about how he would get money for his clients. In his last commercial, he said his staff was willing to drive anywhere in Texas to speak with prospective clients.

Loncar’s family said they accept the medical examiner’s findings, but already knew the cause of his death was “a broken heart” from Grace’s death.

“These are unimaginable losses for our family. Hopefully, these events will serve as heartbreaking reminders that we all need to reach out and care for our loved ones – every day,” the Loncars said in a statement Thursday. “Our family appreciates the outpouring of support as well as the efforts to give us the privacy and space we need to mourn Brian and Grace.  We are prayerful that the community will help us examine ways to prevent these types of tragedies from shattering another home and family.”

From Courthouse News.

Testy Arguments in $2 Billion Virtual Reality Case

January 19, 2017
By David Lee

DALLAS (CN) – The young founder of Facebook’s virtual reality subsidiary denied in federal court Wednesday that he violated a nondisclosure agreement at the heart of a $2 billion lawsuit over the creation of the Oculus Rift headset.

Palmer Luckey, 24, endured a combative direct examination by plaintiffs’ attorney Phillip Philbin before U.S. District Judge Ed Kinkeade.

The men talked over each other several times as Philbin read aloud sections of the 2014 agreement and related email messages, as a flustered Luckey complained about hearing excerpts instead of the broader conversation within several messages.

“I want to make sure I am accurately describing the content of my replies so they are not taken as something they do not mean,” Luckey told Philbin, a partner with Haynes Boone in Dallas.

ZeniMax Media, of Rockville, Md., and its subsidiary id Software, of Richardson, Texas, sued Oculus and Luckey in May 2014, two months after Facebook bought Oculus for more than $2 billion. They seek $2 billion for breach of contract, copyright infringement and unfair competition.

ZeniMax claims id co-founder John Carmack and other employees added physical hardware components and specialized software to Rift and that Luckey never obtained a license to use ZeniMax’s intellectual property. Rift appeared on store shelves in March 2016 for $599.

Carmack is best known as lead programmer of id’s hit first-person shooter games Wolfenstein 3D, Doom and Quake. In 2013, he became chief technology officer at Oculus.

Oculus attorneys told the court Wednesday that the software at issue had entered public knowledge, and so was not subject to the agreement.

Luckey testified that when he demonstrated his headset to investors in 2014, he executed the plaintiffs’ code through the headset but did not take the source code itself.

Facebook’s purchase made Luckey wealthy overnight. Forbes estimates his net worth is $730 million.

Luckey, who was home-schooled, created his first virtual reality headset, the PR1, in his parents’ Southern California garage when he was 17.

Philbin went after Luckey’s lack of a college degree, asking if he had a law or engineering degree.

“You don’t have a degree at all?” Philbin asked.

“No,” Luckey replied.

On cross examination, Oculus’ attorneys defended their client’s technical ability by asking about his early interest in electronics as a child. Luckey said his subscription to hobby magazine Nuts and Volts got him interested in virtual reality he created the PR1.

On Monday, Facebook CEO Mark Zuckerberg testified that he had no knowledge of whether Luckey had signed a nondisclosure agreement before Facebook bought Oculus.

Zuckerberg revealed that the final purchase price was $3 billion, as additional payments were made to keep key employees and pay performance bonuses.

Several tech billionaires never completed a college degree, including Apple co-founder Steve Jobs, Microsoft founder Bill Gates and Zuckerberg.

From Courthouse News.

Mark Zuckerberg Goes on the Record in Lawsuit

January 28, 2017
By David Lee

DALLAS (CN) — Facebook CEO Mark Zuckerberg on Tuesday testified in a courtroom for the first time ever, defending his company’s virtual reality subsidiary Oculus VR against claims its headset technology was stolen from a Dallas-area software developer.

Ditching his usual gray T-shirt and blue jeans, Zuckerberg wore a dark suit and tie as he testified for more than five hours before U.S. District Judge Ed Kinkeade.

“We are highly confident that Oculus products are built on Oculus technology,” the nation’s fourth-wealthiest man testified. Fortune estimates his net worth as $55.5 billion.

“The idea that Oculus products are based on someone else’s technology is wrong,” Zuckerberg said.

Video game publisher ZeniMax Media, of Rockville, Md., and its subsidiary id Software, of Richardson, Texas, sued Oculus and its founder Palmer Luckey in May 2014, two months after Facebook bought Oculus for more than $2 billion.

ZeniMax claims Oculus and Luckey violated a nondisclosure agreement, infringed on copyrights and competed unfairly.

“Defendants now stand to realize billions of dollars in value from ZeniMax’s intellectual property,” the May 21, 2014 complaint states. “Defendants never obtained a license for the use of ZeniMax’s property, nor any right to sell or transfer it to third parties.”

ZeniMax claims id Software co-founder John Carmack and other employees shared improvements to Oculus’ Rift headset “by adding physical hardware components and developing specialized software.”

Rift appeared on store shelves in March 2014, retailing for $599.

Carmack is best known as lead programmer of id’s hit first-person shooter games Wolfenstein 3D, Doom and Quake. In 2013, he became chief technology officer at Oculus.

Zuckerberg said he had never heard of ZeniMax before the lawsuit, and that after large acquisitions are announced, “all kinds of people come out of the woodwork to claim they own” intellectual property or other rights.

“I am aware of the claims,” he testified. “I am here because I believe they are false and I believe it is important to testify to that.”

Zuckerberg downplayed questions from ZeniMax attorney Tony Sammi, with Skadden Arps in New York, during a testy direct examination, in which Sammi said that Facebook’s due diligence for the purchase was rushed during a single weekend.

Zuckerberg said “we were not certain” about the deal until the end, and that $2 billion “is a lot of money” that caused a “big and contentious discussion” within Facebook.

He noted that Oculus was far smaller, with fewer employees in 2014, than WhatsApp and Instagram, two other companies Facebook has purchased.

Zuckerberg said he had no knowledge of whether Luckey had signed a nondisclosure agreement with ZeniMax. He denied that Carmack or any alleged concerns about being sued held up the deal.

“If you steal my bike, paint it and put a bell on it, does that make it your bike?” Zenni asked.

“No,” Zuckerberg replied.

Zuckerberg revealed that the final purchase price for Oculus was $3 billion, as additional payments were made to keep key employees and for performance bonuses. He said Oculus’ owners were originally reluctant to sell, having valued the company at $4 billion. He said they changed their minds when they became convinced the deal “would be really good for virtual reality and not just a good deal” for them.

Oculus said in a statement Tuesday that it is “eager to present our case in court.”

“Oculus and its founders have invested a wealth of time and money in VR because we believe it can fundamentally transform the way people interact and communicate,” the company said. “We’re disappointed that another company is using wasteful litigation to attempt to take credit for technology that it did not have the vision, expertise, or patience to build.”

From Courthouse News.