Coupons, Inc. v. Stottlemire

Filing 133

Motion to Summarily Enforce Settlement Agreement filed by John Stottlemire. Motion Hearing set for 2/24/2009 10:00 AM in Courtroom 2, 5th Floor, San Jose. (Stottlemire, John) (Filed on 1/20/2009) Text modified on 1/22/2009 conforming to posted document caption (bw, COURT STAFF).

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Coupons, Inc. v. Stottlemire Doc. 133 1 John A. Stottlemire 4509 Wayland Court 2 High Point, NC 27265 Telephone: (614) 358-4185 3 Email: johna@stottlemire.com Defendant, pro se 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MOTION TO SUMMARILY ENFORCE SETTLEMENT AGREEMENT No. 5:07-CV-03457 HRL UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION COUPONS, INC., a California corporation, ) ) Plaintiff, ) ) v. ) ) JOHN STOTTLEMIRE ) ) Defendant ) ) ) ) Case No. 5:07-CV-03457 HRL DEFENDANT'S NOTICE OF MOTION AND MOTION TO SUMMARILY ENFORCE SETTLEMENT AGREEMENT Date: Time: Courtroom: Judge: February 24, 2009 10:00 AM 2, 5th Floor Hon. Howard R. Lloyd -i- Dockets.Justia.com 1 2 TO ALL PARTIES AND THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE that on February 24, 2009, at 10:00 a.m., before the Honorable 3 Howard R. Lloyd, United States Magistrate Judge, in Courtroom 2, 5th Floor, 280 South 1st Street, 4 San Jose, California defendant John Stottlemire ("Stottlemire") will move for an order summarily 5 enforcing the parties' settlement. The motion will be made on the ground that the Plaintiff 6 Coupons, Inc. ("CI") and Stottlemire entered into a binding and enforceable settlement of this 7 matter in its entirety on November 13, 2008, and the court has the power to summarily enforce the 8 settlement. 9 The motion will be based upon this notice of motion and motion, the accompanying 10 memorandum of points and authorities, the Declaration of John Stottlemire, and upon such other 11 oral or documentary evidence as may be presented at the hearing of this motion. 12 13 14 15 Dated: January 20, 2009 16 17 18 19 20 21 22 23 24 25 26 27 28 MOTION TO SUMMARILY ENFORCE SETTLEMENT AGREEMENT No. 5:07-CV-03457 HRL Respectfully submitted, /s/ John Stottlemire Defendant, pro se - ii - 1 2 INTRODUCTION CI and Stottlemire ("the parties") settled this matter in its entirety on November 13, 2008 3 pursuant to Early Neutral Evaluation ("ENE") with the evaluator, Harold McElhinny. The parties 4 have an enforceable settlement. Yet, apparently motivated by settlor's remorse, CI is attempting to 5 renege on the settlement by claiming Stottlemire committed a material breach of the settlement 6 agreement. 7 One of the settlement terms included the parties' agreement that the terms of the settlement 8 would remain confidential. CI claims Stottlemire caused a material breach in the confidentiality 9 term of the agreement by disclosing facts which would become public knowledge. Claiming 10 Stottlemire materially breached the confidentiality term of the agreement, CI informed the Court 11 that it had rescinded the agreement on November 24, 2008. CI has made no other claims against 12 Stottlemire in its justification for rescinding the settlement agreement. 13 Under well-established law, a party has no authority to rescind a contract when the terms of 14 the contract preclude rescission. CI told Stottlemire on November 17, 2008 that it intended to 15 make public that it was dismissing this action against Stottlemire, and that the dismissal was with 16 prejudice. On November 26, 2008, CI informed Stottlemire that it was "fine with making 17 everything public regarding the settlement." CI made this admission without restriction. In this 18 light, CI claims as a result of Stottlemire posting a single comment on his website and releasing 19 information which allegedly made public the terms of the settlement it has rescinded the settlement 20 agreement and now proceeds with its litigation against Stottlemire. Even if all of CI's claims 21 (detailed infra) were true, CI interpreted the terms of the settlement agreement and concluded 22 "regardless of what happens in the future", the settlement agreement remains in full force and in 23 effect. Stottlemire therefore requests the Court grant this motion to enforce summarily the parties' 24 settlement. 25 26 A. 27 FACTS REGARDING SETTLEMENT CI's Previous Attempts to Settle Prior to ENE, CI sought settlement on multiple occasions. As a term to settlement CI 28 demanded Stottlemire promise he not manufacture, offer or use any technology or service to MOTION TO SUMMARILY ENFORCE SETTLEMENT AGREEMENT No. 5:07-CV-03457 HRL -1- 1 circumvent the technological measures CI put into place to limit the number of prints for its online 2 coupons. CI's technological measure places limits on the number of times a consumer can print 3 coupons. This limitation is based upon the number of computers a consumer has access to. CI 4 does not attempt to limit the individual consumer. Thus, Stottlemire has always believed that use 5 of technology which prevents CI from identifying consumer's computers is not in violation of any 6 law. Stottlemire has refused to settle this litigation with CI unless CI remove the term from the 7 settlement agreement. 8 B. 9 Stottlemire's Misgivings Towards Settlement In addition to the above, Stottlemire has always thought CI's decision to file this action 10 with the Court has been an act of malicious prosecution and abuse of process. Stottlemire has, on 11 several occasions, informed CI that to settle this matter CI must agree to compensate Stottlemire. 12 Stottlemire sought damages he would receive if Stottlemire were to file and ultimately prevail on 13 an action of malicious prosecution. CI has always stated it would not compensate Stottlemire. 14 Settlement discussions have never proceeded beyond this disagreement. 15 CI claims Stottlemire gave up his claim for malicious prosecution when the Court denied 16 Stottlemire's Motion to Dismiss CI's Third Amended Complaint. CI bases this claim on the lack 17 of demands by Stottlemire during the seven day period between the Court's order denying 18 Stottlemire's motion and the parties' participation in ENE. CI's presumptions are inaccurate. 19 Until the parties settled this matter at ENE, Stottlemire continued to request on his personal blog 20 that CI compensate him for a possible action of malicious prosecution. Simply because 21 Stottlemire did not repeat his demands to CI verbally does not indicate Stottlemire had abandoned 22 his claim. 23 C. 24 Stottlemire's Motivation to Settle Stottlemire became motivated to settle this action because of his relocation to North 25 Carolina. One day after the Court ruled on his motion to dismiss, Stottlemire's wife was offered 26 and accepted a position for employment in North Carolina. During the next six days, while 27 preparing for ENE, Stottlemire had numerous in depth discussions with his wife in regards to 28 settlement with CI. Stottlemire and his wife decided, if CI were to accept terms which did not MOTION TO SUMMARILY ENFORCE SETTLEMENT AGREEMENT No. 5:07-CV-03457 HRL -2- 1 include any promises by Stottlemire then Stottlemire would settle this lawsuit with CI. Stottlemire 2 and his wife made this decision based upon the amount of resources it would require should 3 Stottlemire continue litigation with CI while living in North Carolina. 4 D. 5 The Settlement In this light, during ENE, Stottlemire offered to settle the litigation. The terms Stottlemire 6 offered CI were (1) Stottlemire would stipulate to a dismissal with prejudice if (2) CI would agree 7 to keep the terms of the settlement confidential. CI countered Stottlemire's offer to settle. CI 8 stated they would settle under Stottlemire's proposed terms if Stottlemire would agree not to 9 pursue an action against CI for malicious prosecution. Stottlemire had full knowledge that an 10 action against CI for malicious prosecution could only be pursued if the lawsuit was terminated 11 favorably in Stottlemire's favor. Settlement of the lawsuit does not qualify as being terminated in 12 Stottlemire's favor so Stottlemire agreed and the parties settled. 13 The final terms the parties agreed to are: (1) CI would dismiss this action against 14 Stottlemire with prejudice, (2) Stottlemire agreed to stipulate to the dismissal, (3) CI and 15 Stottlemire would exchange mutual general releases in standard form, (4) CI and Stottlemire 16 would bear their own individual attorney's fees and costs, and (5) the terms of the settlement 17 would remain confidential. (See Attachment A, hereto). 18 E. 19 Actions After Settlement On November 14, 2008, CI filed with the Court a letter. The letter stated in part (1) the 20 parties participated in a successful ENE, and (2) the parties had signed an agreement to settle. 21 (Docket number 110). 22 On November 17, 2008, via email, CI sent Stottlemire two documents. The documents 23 were titled "Mutual Release of Claims" (hereinafter "Release") (Attachment B, hereto) and 24 "Stipulation for Dismissal with Prejudice Pursuant to Settlement Agreement" (hereinafter 25 "Stipulation") (Attachment C, hereto). The email received by Stottlemire stated that once CI and 26 Stottlemire agreed on final wording of the documents an exchange of signatures would take place 27 on the Release and then the Stipulation would be filed (See Stottlemire Declaration ¶ 3). CI made 28 no indication they would file the Stipulation under seal or that the Stipulation would be redacted. MOTION TO SUMMARILY ENFORCE SETTLEMENT AGREEMENT No. 5:07-CV-03457 HRL -3- 1 Stottlemire had every reason to believe the Stipulation would be filed in the same manner as all 2 other documents have thus been filed and the public would have access to them. In this light, 3 Stottlemire believed with good cause either (1) CI's agreement to dismiss this action against 4 Stottlemire with prejudice was not subjected to the confidentiality clause of the settlement 5 agreement, or (2) CI was requesting an alteration of the settlement agreement whereby allowing 6 the parties to disclose to the public CI was dismissing this action against Stottlemire with 7 prejudice. Stottlemire believed this since it would be impossible for the parties to file the 8 Stipulation without the public having complete access to the information contained therein. A 9 short 17 minutes after receiving the documents, Stottlemire responded to CI and requested the 10 Release be edited (See Id. ¶ 4). The edits Stottlemire requested were limited to a clause that 11 neither party had previously assigned its claims to any third party and that CI defend, indemnify 12 and hold harmless Stottlemire (See Id.). Stottlemire did not request any changes to the Stipulation 13 and agreed the Stipulation would be filed in the same manner as all previous documents had been 14 filed, thus, the public would have unrestricted access to the document and its contents. 15 On November 19, 2008, Stottlemire posted an entry to his blog. The entry Stottlemire 16 posted stated: 17 18 19 "As long as Coupons, Inc. complies with the confidential settlement agreement, the action against me will be dismissed with prejudice. Dismissal with prejudice means that Coupons, Inc. will be unable to file this action again. The letter Coupons, Inc. sent the Court to confirm the above can be viewed here: Link (PDF)." 20 If a visitor to Stottlemire's blog clicked on the "Link (PDF)" hyperlink, the visitor would have 21 seen a copy of the letter CI sent the Court on November 14, 2008 (Docket number 110) (See 22 Stottlemire Declaration ¶ 5). As a result of posting this entry to Stottlemire's blog, Stottlemire 23 caused a copy of the entry to be mailed to persons who subscribe to his blog. One person who 24 received the email was David Kravets, a wired.com journalist. 25 Also, on November 19, 2008, CI emailed Stottlemire and informed Stottlemire they could 26 not and would not agree to the defend, indemnify, and hold harmless clause Stottlemire requested. 27 CI attached a copy of its revised Release (Attachment D hereto) to the email and told Stottlemire 28 that they would file the previously agreed upon Stipulation as soon as they received Stottlemire's MOTION TO SUMMARILY ENFORCE SETTLEMENT AGREEMENT No. 5:07-CV-03457 HRL -4- 1 signature on the Release. Within 40 minutes of receiving the email from CI, Stottlemire signed 2 and sent the Release to CI via email (See Stottlemire Declaration ¶ 6, 7). 3 On November 20, 2008, David Kravets, the wired.com journalist, called Stottlemire and 4 requested he comment further on the blog entry he had received. Stottlemire told David Kravets 5 that he was unable to discuss the terms of settlement since they were confidential but would 6 answer any other questions he had. During his conversation with David Kravets, Stottlemire made 7 clear (1) the Court did not rule on the issues surrounding the litigation, and (2) CI upgraded their 8 software in December 2007 and the instructions which were central to the litigation no longer had 9 any effect on the number of coupons consumers could print through CI's website. David Kravets 10 responsibly reported both of these points when he published his blog entry at wired.com's website 11 (Id. ¶ 8). In addition to the points above, Stottlemire was asked to provide an overview of the 12 litigation. Stottlemire's statement released to David Kravets and ultimately published stated: 13 14 15 "Without being represented by an attorney, I defended myself in federal court against a company who solicited the services of two separate law firms, and in my opinion, I kicked their ass. By refusing to succumb to their bullying tactics, I continued to assert my innocence and fought the claims Coupons, Inc. filed against me." 16 The statement does not disclose any term of the settlement agreement, instead the statement 17 describes Stottlemire's opinion of his performance during the entire course of litigation as a pro se 18 defendant (Id. ¶ 9). 19 On November 21, 2008, Wendy Davis, a journalist with mediapost.com, contacted 20 Stottlemire and asked Stottlemire to comment on the litigation after she had read the posting made 21 by David Kravets at wired.com. Wendy Davis' questions to Stottlemire were limited is scope to 22 Stottlemire's pro se status. As a result of the conversation, Wendy Davis posted an entry to 23 mediapost.com where Stottlemire is quoted as saying: "I knew I was right, and I couldn't afford 24 an attorney. I spent many nights in front of the computer researching case law and writing briefs 25 and rewriting briefs." The mediapost.com blog entry also responsibly reported (1) the Court did 26 not rule on the merits of the case and the Court did not decide if Stottlemire's actions violated the 27 DMCA, and (2) CI changed its software so that Stottlemire's instructions central to this lawsuit no 28 MOTION TO SUMMARILY ENFORCE SETTLEMENT AGREEMENT No. 5:07-CV-03457 HRL -5- 1 longer had any effect on the number of coupons a consumer could print from CI's website (Id. ¶ 2 10). 3 Also, on November 21, 2008, Stottlemire emailed CI. Stottlemire's email to CI stated that 4 he had signed and returned the Release as per the agreement and inquired as to when CI planned to 5 file the Stipulation. In reply to Stottlemire's email, CI stated that Stottlemire had breached the 6 confidentiality term of the settlement agreement by (1) Stottlemire's comment on his website, (2) 7 Stottlemire's statement that he "kicked ass", (3) Stottlemire disclosing that the case was dismissed 8 with prejudice, and (4) Stottlemire's direct or indirect communication with various bloggers (Id. ¶ 9 13). CI also stated that it would not file the Stipulation unless Stottlemire agreed to repair the 10 alleged breach. To repair the breach, CI demanded Stottlemire release a statement which would be 11 authored by CI. The statement CI demanded Stottlemire release would have required Stottlemire 12 to mischaracterize the litigation, make admissions which were untrue and interpret previous orders 13 by the Court in a manner which could not be construed as factual interpretations. As an example, 14 CI required Stottlemire to "specifically explain the court's of how and why both sections 1201(a) 15 and section 1201(b) [of Title 17] are applicable" (Id) although the Court's decision limited its 16 analysis of CI's claims and stated that CI should be given a chance to prove both sections of Title 17 17 are applicable. 18 Consequently, Stottlemire and CI exchanged several emails over the next four days. 19 Stottlemire held that, as a result of CI's decision to file the Stipulation in a manner which would 20 allow the public complete access to the Stipulation. Stottlemire was authorized to announce the 21 Stipulation would be filed and the contents of the Stipulation. Claiming Stottlemire's argument 22 was without merit, CI analyzed the Release Stottlemire signed and stated that even if CI had 23 breached the agreement as Stottlemire had contended, the agreement remained in full force and 24 Stottlemire was not authorized to release facts he had released. CI argued Stottlemire "signed a 25 mutual release which provided that Coupons and Stottlemire each further represent, warrant and 26 agree that the Settlement Agreement shall remain in full force, and in effect, notwithstanding the 27 occurrence of any possible changes or differences in material fact. [Stottlemire] represented and 28 MOTION TO SUMMARILY ENFORCE SETTLEMENT AGREEMENT No. 5:07-CV-03457 HRL -6- 1 warranted that [he] would maintain the confidentiality, regardless of what happens in the future." 2 (Id. ¶ 14). 3 CI's own analysis of the Release agreed upon by CI and Stottlemire require that CI uphold 4 its contractual obligations. CI must file the Stipulation and release Stottlemire from all claims 5 related to this action. CI agreed to a Release which provided that CI and Stottlemire each further 6 represent, warrant and agree that the Settlement shall remain in full force, and in effect, 7 notwithstanding the occurrence of any possible changes or differences in material fact. CI 8 represented and warranted that it would file the Stipulation and release Stottlemire from all claims 9 regardless of what happens in the future. 10 11 A. 12 Settle 13 It is well settled that a district court has the equitable power to summarily enforce an LEGAL ANALYSIS The District Court has the Equitable Power to Summarily Enforce the Agreement to 14 agreement to settle a case pending before it. Callie v. Near, 829 F.2d 888 at 890 (9th Cir. 1987). 15 Complete settlement agreements are those where there is no disputed "material facts concerning 16 the existence or terms of an agreement to settle." Id. 17 In the present matter, the existence and terms of the agreement to settle are indisputable. 18 The parties reached a complete settlement agreement on November 13, 2008 and there were no 19 material terms left to be negotiated: the parties agreed that CI would dismiss the lawsuit with 20 prejudice, that Stottlemire would stipulate to the dismissal, that CI and Stottlemire would release 21 one another from all known and unknown claims, that each party would bear their own costs and 22 that the term of the agreement would remain confidential. There is no need for an evidentiary 23 hearing where material facts concerning the existence or terms of an agreement to settle are not in 24 dispute. Doi v. Halekulani Corp., 276 F.3d 1131 at 1138 (9th Cir. 2002). Here, both parties have 25 admitted to the existence of the settlement on numerous occasions and neither party can deny that 26 it signed the agreement during the ENE conducted on November 13, 2008. Since both parties 27 made representations to the court that agreement had been reached, there can be no factual dispute 28 that the settlement had been consummated, and the court is empowered summarily to require the MOTION TO SUMMARILY ENFORCE SETTLEMENT AGREEMENT No. 5:07-CV-03457 HRL -7- 1 parties to comply with their representations without holding a hearing. See Id. at 1139, citing 2 Vari-O-Matic Machine Corp. v. New York Sewing Machine Attachment Corp., 629 F. Supp. 257 at 3 259 (S.D.N.Y. 1986). 4 The authority of a trial court to enter a judgment enforcing a settlement agreement has as 5 its foundation the policy favoring the amicable adjustment of disputes and the concomitant 6 avoidance of costly and time consuming litigation. Dacanay v. Mendoza, 573 F.2d 1075 at 1078 7 (9th Cir. 1978). Agreements settling litigation are "solemn undertakings, invoking a duty upon the 8 involved lawyers, as officers of the court, to make every reasonable effort to see that the agreed 9 terms are fully and timely carried out." Aro Corp. v. Allied Witan Co., 531 F.2d 1368 at 1372 (6th 10 Cir. 1976). Public policy strongly favors settlement of disputes without litigation. Id. 11 B. 12 A Settlement Agreement is a Contract under California Law An agreement to settle a federal case is a contract governed by the applicable state law. 13 See Kokkonen v. Guardian Life Insurance Co. of Am., 511 U.S. 375 at 381, 128 L.Ed. 2d 391, 114 14 S. Ct. 1673 (1994). Under California law, a settlement agreement is a contract, and the legal 15 principles which apply to contracts generally apply to settlement contracts. Gorman v. Holte, 164 16 Cal. App. 3d 984 at 988 (1985); Jeff D. v. Andrus, 899 F.2d 753 at 759 (9th Cir. 1989) ("An 17 agreement to settle a legal dispute is a contract and its enforceability is governed by familiar 18 principles of contract law."). Compromise settlements are governed by the legal principles 19 applicable to contracts generally. T.M. Cobb Co. v. Superior Court, 36 Cal. 3d 273 at 280 (1984). 20 "A settlement agreement is treated as any other contract for purposes of interpretation." 21 United Commer. Ins. Serv. v. Paymaster Corp., 962 F.2d 853 at 856 (9th Cir. 1992). Under 22 California law, the determination of the existence or terms of an agreement is made by reference to 23 the objective intent of the parties. United Commercial Ins. Serv., Inc., 962 F.2d at 856. Objective 24 intent is "the intent manifested in the agreement and by surrounding conduct[,] rather than the 25 subjective beliefs of the parties." Id. In other words, the parties' "outward manifestation or 26 expression of assent is controlling." Binder v. Aetna Life Ins. Co., 75 Cal. App. 4th 832 at 851, 89 27 Cal. Rptr. 2d 540 (1990). Here, the parties' objective intent in the settlement agreement and 28 surrounding conduct indisputably shows the existence and terms of the settlement reached on MOTION TO SUMMARILY ENFORCE SETTLEMENT AGREEMENT No. 5:07-CV-03457 HRL -8- 1 November 13, 2008. Moreover, in CI's letter to the Court on November 14, 2008, CI informed the 2 Court that it settled the case. 3 C. Parties Cannot Escape Their Obligation By Refusing to Sign a More Formal Writing 4 Required by the Terms of the Settlement 5 Where "the terms of the contract are in the first instance definitely agreed upon and 6 completed, then the mere fact that immediately thereafter they agree to evidence the contract by a 7 written instrument does not interfere with the force and effect of the oral agreement." Nolte v. 8 Southern California Home Bldg. Co., 28 Cal.App.2d 532 at 535 (1938). In the case of Fly v. 9 Cline, 49 Cal.App.414 at 425 (1920) the court, in commenting upon an oral settlement agreement, 10 said: 11 12 13 14 15 "It may be condeded that where the minds of the parties have met respecting the terms and conditions of the more formal writing that is to be executed by them, and the agreed terms of the contract thereafter to be executed are certain and in all respects definitely understood and agreed upon in advance, either orally or by informal writing, there is in such case an obligatory contract dating from the making of the earlier agreement." Parties cannot escape their obligation by refusing to sign a more formal writing required by 16 the settlement. Alipo v. Secretary of the U.S. Army, 1998 U.S. Dist. LEXIS 6360 (N.D. Cal. 1998). 17 Here, like Alipo, the parties reached an enforceable agreement, that is, their agreement was 18 complete. While the parties signed the Settlement Agreement, CI's refusal to sign the formal 19 Release is not a legitimate basis for the Court not to enforce the settlement. 20 A litigant can no more repudiate a compromise agreement than he could disown any other 21 binding contractual relationship, Dacanay v. Mendoza, 573 F.2d 1075 at 1078 (9th Cir. 1978). 22 Here, the November 13, 2008 Settlement Agreement signed by the respective parties confirm 23 acceptance of the Settlement Terms: CI agreed to dismiss the lawsuit with prejudice it had filed 24 against Stottlemire; Stottlemire agreed to stipulate to the dismissal; CI and Stottlemire agreed to 25 sign a complete release of all claims known and unknown; CI and Stottlemire agreed to bear their 26 own costs associated with the lawsuit; and CI and Stottlemire agreed to keep the terms of the 27 settlement confidential. 28 MOTION TO SUMMARILY ENFORCE SETTLEMENT AGREEMENT No. 5:07-CV-03457 HRL -9- 1 CI also filed a letter with the Court, affirming the settlement and informing the Court that a 2 more detailed settlement would be executed shortly. The letter did not state that the parties merely 3 had an agreement in principal, or were engaged in further settlement negotiations. Rather, CI 4 stated, through its attorney of record, that it settled. The agreement to execute a more detailed 5 settlement, and the exchange of drafts and revision of same, does not affect the validity, or 6 enforceability, of the settlement. Alipo v. Secretary of the U.S. Army, 1998 U.S. Dist. LEXIS 6360 7 (N.D. Cal. 1998). 8 To date, CI's only articulated basis for its refusal to go forward with the settlement is 9 Stottlemire's alleged breach of the confidentiality term of the agreement. CI claims Stottlemire 10 breached the agreement by disclosing "a dismissal with prejudice in return for no money" (See 11 Coupons' Opposition to Defendant's Motion to Stay Discovery (Document 129) Page 1, Lines 812 9). CI's claim that Stottlemire breached the confidentiality term of the settlement agreement are 13 without merit. Prior to CI's admission that it "is fine with making everything public regarding the 14 settlement," Stottlemire has never stated that the dismissal with prejudice was given in return for 15 no money. Although CI has made this claim many times over the past two months, CI has yet to 16 attach evidence to any of its pleadings to support its claim. Evidence simply does not exist. CI 17 claims Stottlemire has admitted to the breach by his silence, but this is not true. Instead, 18 Stottlemire refuses to address CI's accusations because they are premature. Neither of the pending 19 motions require Stottlemire to admit or deny CI's allegations for the Court to rule upon them. The 20 time to address CI's allegations was not ripe. Stottlemire responded to the motions without 21 deviating from the issues the motions raised. 22 D. 23 CI's Analysis of the Severability of the Settlement Agreement Regardless of CI's claims that Stottlemire breached the Settlement Agreement, CI has 24 entered into an agreement which precludes rescission of the agreement. CI cannot escape its own 25 analysis of this fact, regardless of what happened after CI agreed to the terms of the settlement 26 agreement. CI must release Stottlemire of all claims, known and unknown that CI has against him. 27 In its November 23, 2008 email CI fully explained its understanding of the clause within 28 the Release which precludes rescission of the Settlement Agreement. CI argued that Stottlemire MOTION TO SUMMARILY ENFORCE SETTLEMENT AGREEMENT No. 5:07-CV-03457 HRL - 10 - 1 represented and warranted that he would maintain the confidentiality of the settlement agreement, 2 "regardless of what happens in the future". CI made this analysis in view of Stottlemire's 3 argument that CI and Stottlemire jointly agreed by their actions that the confidentiality term of the 4 Settlement Agreement did not apply to the Stipulation. CI cannot escape the standards CI has held 5 Stottlemire to. CI's own analysis must also apply to CI. CI has represented and warranted that it 6 would release Stottlemire of all claims, "regardless of what happens in the future." Therefore, it 7 must release Stottlemire. This Court should order enforcement of the settlement agreement. 8 9 CONCLUSION The parties have a complete settlement enforceable by this Court. However, CI now 10 refuses to comply with the settlement ignoring its own analysis for claiming Stottlemire's actions 11 violated the terms of the settlement agreement. CI agreed to the terms and that the terms should 12 remain in force "regardless of what happens in the future." Bound by this restriction, CI cannot 13 rescind a settlement agreement because of an event that happened in the future, that is, 14 Stottlemire's purported breach. 15 Stottlemire therefore respectfully requests that the Court summarily enforce the settlement 16 and require CI to sign the Release and deliver a signed stipulation of dismissal with prejudice. 17 18 19 20 21 22 23 24 25 26 27 28 MOTION TO SUMMARILY ENFORCE SETTLEMENT AGREEMENT No. 5:07-CV-03457 HRL - 11 - ATTACHMENT A ATTACHMENT B MUTUAL RELEASE OF CLAIMS This Mutual Release of Claims is entered into by and between Coupons, Inc. ("Coupons") and John Stottlemire ("Stottlemire"). Coupons filed a civil lawsuit for money damages and injunctive relief against Stottlemire captioned "Coupons, Inc. v. John Stottlemire, et al.," United States District Court, Northern District of California, case number 5:07-CV-03457 HRL ("the Action"). On November 13, 2008, at an Early Neutral Evaluation conducted by Harold McElhinny, Coupons and Stottlemire executed a Settlement Agreement, which provides as follows: 1. 2. 3. 4. 5. Coupons, Inc. will dismiss its pending lawsuit against Stottlemire with prejudice; Stottlemire agrees to stipulate to the dismissal; The parties will exchange mutual general releases in standard form; Each party will bear its own attorney's fees and costs; and The terms of the settlement will remain confidential. Therefore, in accordance with paragraph 3 of the Settlement Agreement, Coupons and Stottlemire agree as follows: Coupons and Stottlemire, and each of them, both individually, on behalf of any of their respective present or former parent, subsidiary or affiliated companies, if any, and on behalf of all of their respective present or former agents, partners, spouses, owners, principals, shareholders, joint venturers, officers, directors, servants, employees, independent contractors, predecessors, successors, heirs, trustees and assigns, do hereby fully and forever release and discharge each other, each others' subsidiaries, affiliates and parent companies, and all of each others' respective present or former agents, partners, spouses, owners, principals, shareholders, joint venturers, officers, directors, servants, employees, predecessors, successors, heirs, trustees and assigns, insurers, reinsurers, attorneys, and 1 MUTUAL RELEASE OF CLAIMS 22675\1766955.1 sureties, of and from each and every claim, demand, action, cause of action, loss, cost, expense or element of damage, of every kind and character, known or unknown, contingent or certain, past, present or future, including but not limited to any claim for malicious prosecution, which arises out of, relates to, or in any way concerns the Action, the allegations contained in the Action, or any defenses or counterclaims which could have been brought in the Action. In entering into the Settlement Agreement, and the mutual releases provided herein, it is the intent of Coupons and Stottlemire, on behalf of themselves, on behalf of their respective present or former parent, subsidiary or affiliated companies, if any, and on behalf of all of their respective present or former agents, partners, spouses, owners, principals, shareholders, joint venturers, officers, directors, servants, employees, predecessors, successors, heirs and assigns, to waive all rights and benefits which any of them may have had under California Civil Code §1542, which provides: A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. Coupons and Stottlemire each acknowledge that there is a risk that the damages, injuries, costs, expenses or losses which they believe they may have suffered or will suffer, with respect to the foregoing matters, may later turn out to be other than, of a different character from, or greater than, those now known, suspected or believed to be true. Further, other facts upon which Coupons and Stottlemire may be relying in entering into the Settlement Agreement may later turn out to be other than, or different from, those now known, suspected or believed to be true. Coupons and Stottlemire each acknowledge that in entering into the Settlement Agreement, and the mutual releases provided for herein, they have expressly agreed to assume the risk of such possible 2 MUTUAL RELEASE OF CLAIMS 22675\1766955.1 unknown damages, claims, demands, actions, or causes of action, or such possible changes or differences in material fact. Coupons and Stottlemire each further represent, warrant and agree that the Settlement Agreement shall remain in full force, and in effect, notwithstanding the occurrence of any possible changes or differences in material fact. DATED: COUPONS, INC. By:____________________________________ Lauren Segal, General Counsel DATED: _______________________________________ John Stottlemire 3 MUTUAL RELEASE OF CLAIMS 22675\1766955.1 ATTACHMENT C 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Farella Braun & Martel LLP 235 Montgomery Street, 17th Floor San Francisco, CA 94104 (415) 954-4400 Neil A. Goteiner (State Bar No. 083524) Dennis M. Cusack (State Bar No. 124988) Carly O. Alameda (State Bar No. 244424) Farella Braun & Martel LLP 235 Montgomery Street, 17th Floor San Francisco, CA 94104 Telephone: (415) 954-4400 Facsimile: (415) 954-4480 E-mail: ngoteiner@fbm.com, dcusack@fbm.com, calameda@fbm.com Attorneys for Plaintiff COUPONS, INC. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION COUPONS, INC., Plaintiff, vs. JOHN STOTTLEMIRE, and DOES 1-10, Defendants. Case No. 5:07-CV-03457 HRL STIPULATION FOR DISMISSAL WITH PREJUDICE PURSUANT TO SETTLEMENT AGREEMENT Plaintiff Coupons, Inc. and Defendant John Stottlemire hereby submit this Stipulation to dismiss this case with prejudice. WHEREAS, the parties participated in an Early Neutral Evaluation with Harold McElhinny on November 13, 2008, and entered a Settlement Agreement at that time; and WHEREAS, the Settlement Agreement provides among other things that Coupons, Inc. will dismiss the case with prejudice, and that Mr. Stottlemire will stipulate to the dismissal; STIP FOR DISMISSAL 5:07-CV-03457 HRL 22675\1767135.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Farella Braun & Martel LLP 235 Montgomery Street, 17th Floor San Francisco, CA 94104 (415) 954-4400 IT IS HEREBY STIPULATED by and between the parties hereto that this action shall be dismissed in its entirety, with prejudice. Dated: November 18, 2008 FARELLA BRAUN & MARTEL LLP By: Dennis M. Cusack Attorneys for Plaintiff COUPONS, INC. Dated: November 18, 2008 By: John Stottlemire Defendant, pro se ORDER Good cause appearing therefor, IT IS HEREBY ORDERED that this case is dismissed in its entirety, with prejudice. DATED: The Honorable Howard R. Lloyd Judge of the United States District Court STIP FOR DISMISSAL 5:07-CV-03457 HRL -2- 22675\1767135.1 ATTACHMENT D MUTUAL RELEASE OF CLAIMS This Mutual Release of Claims is entered into by and between Coupons, Inc. ("Coupons") and John Stottlemire ("Stottlemire"). Coupons filed a civil lawsuit for money damages and injunctive relief against Stottlemire captioned "Coupons, Inc. v. John Stottlemire, et al.," United States District Court, Northern District of California, case number 5:07-CV-03457 HRL ("the Action"). On November 13, 2008, at an Early Neutral Evaluation conducted by Harold McElhinny, Coupons and Stottlemire executed a Settlement Agreement, which provides as follows: 1. 2. 3. 4. 5. Coupons, Inc. will dismiss its pending lawsuit against Stottlemire with prejudice; Stottlemire agrees to stipulate to the dismissal; The parties will exchange mutual general releases in standard form; Each party will bear its own attorney's fees and costs; and The terms of the settlement will remain confidential. Therefore, in accordance with paragraph 3 of the Settlement Agreement, Coupons and Stottlemire agree as follows: Coupons and Stottlemire, and each of them, both individually, on behalf of any of their respective present or former parent, subsidiary or affiliated companies, if any, and on behalf of all of their respective present or former agents, partners, spouses, owners, principals, shareholders, joint venturers, officers, directors, servants, employees, independent contractors, predecessors, successors, heirs, trustees and assigns, do hereby fully and forever release and discharge each other, each others' subsidiaries, affiliates and parent companies, and all of each others' respective present or former agents, partners, spouses, owners, principals, shareholders, joint venturers, officers, directors, servants, employees, predecessors, successors, heirs, trustees and assigns, insurers, reinsurers, attorneys, and 1 MUTUAL RELEASE OF CLAIMS 22675\1766955.1 sureties, of and from each and every claim, demand, action, cause of action, loss, cost, expense or element of damage, of every kind and character, known or unknown, contingent or certain, past, present or future, including but not limited to any claim for malicious prosecution, which arises out of, relates to, or in any way concerns the Action, the allegations contained in the Action, or any defenses or counterclaims which could have been brought in the Action. In entering into the Settlement Agreement, and the mutual releases provided herein, it is the intent of Coupons and Stottlemire, on behalf of themselves, on behalf of their respective present or former parent, subsidiary or affiliated companies, if any, and on behalf of all of their respective present or former agents, partners, spouses, owners, principals, shareholders, joint venturers, officers, directors, servants, employees, predecessors, successors, heirs and assigns, to waive all rights and benefits which any of them may have had under California Civil Code §1542, which provides: A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. Coupons and Stottlemire each acknowledge that there is a risk that the damages, injuries, costs, expenses or losses which they believe they may have suffered or will suffer, with respect to the foregoing matters, may later turn out to be other than, of a different character from, or greater than, those now known, suspected or believed to be true. Further, other facts upon which Coupons and Stottlemire may be relying in entering into the Settlement Agreement may later turn out to be other than, or different from, those now known, suspected or believed to be true. Coupons and Stottlemire each acknowledge that in entering into the Settlement Agreement, and the mutual releases provided for herein, they have expressly agreed to assume the risk of such possible 2 MUTUAL RELEASE OF CLAIMS 22675\1766955.1 unknown damages, claims, demands, actions, or causes of action, or such possible changes or differences in material fact. Coupons and Stottlemire each further represent, warrant and agree that the Settlement Agreement shall remain in full force, and in effect, notwithstanding the occurrence of any possible changes or differences in material fact. Coupons and Stottlemire further represent and warrant that they have not sold, assigned, conveyed or transferred to any other person or entity any of the claims, demands, actions or causes of action which each of them are releasing, or purport to be releasing, pursuant to the provisions of this Agreement. DATED: COUPONS, INC. By:__________________________________ Lauren Segal, General Counsel DATED: ____________________________________ John Stottlemire 3 MUTUAL RELEASE OF CLAIMS 22675\1766955.1 1 John A. Stottlemire 4509 Wayland Court 2 High Point, NC 27265 Telephone: (614) 358-4185 3 Email: johna@stottlemire.com Defendant, pro se 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 I, John Stottlemire, hereby declare: 1. I am the Defendant in this action. I state all facts herein of my own firsthand UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION COUPONS, INC., a California corporation, ) ) Plaintiff, ) ) v. ) ) JOHN STOTTLEMIRE ) ) Defendant ) ) ) ) ) ) Case No. 5:07-CV-03457 HRL DECLARATION OF JOHN STOTTLEMIRE IN SUPPORT OF DEFENDANT'S MOTION TO SUMMARILY ENFORCE SETTLEMENT AGREEMENT Date: Time: Courtroom: Judge: February 24, 2009 10:00 AM 2, 5th Floor Hon. Howard R. Lloyd 19 knowledge, and if called as a witness, I could and would competently testify thereto. 20 21 2. 3. Dennis Cusack is an attorney of record representing Coupons, Inc. in this matter. On November 17, 2008 I received an email from Dennis Cusack. Attached to the 22 email were two documents. The documents attached were entitled "Mutual Release of Claims" 23 and "Stipulation for Dismissal with Prejudice Pursuant to Settlement Agreement". In the email, 24 Dennis Cusack stated that once we had agreed upon final wording of the documents an exchange 25 of signatures would take place on the Mutual Release of Claims and then the Stipulation for 26 Dismissal would be filed. A true and exact copy of the email I received from Dennis Cusack is 27 attached to this declaration as Exhibit A. 28 Declaration of John Stottlemire in Support of Defendant's Motion to Summarily Enforce Settlement No. 5:07-CV-03457 HRL -1- 1 4. Seventeen minutes after receiving the email attached as Exhibit A to this 2 declaration I replied to Dennis Cusacks' email. In my reply I requested Coupons, Inc. include two 3 additional clauses to the Mutual Release of Claims. The two additional clauses I asked Coupons, 4 Inc. to include are 1) that neither party had assigned the claims to any third party, and 2) that 5 Coupons, Inc. defend, indemnify and hold me harmless from all claims which were subject to this 6 lawsuit. A true and exact copy of the email I sent Dennis Cusack is attached to this declaration as 7 Exhibit B. 8 5. On November 19, 2008, I posted an entry to my personal blog which stated "As 9 long as Coupons, Inc. complies with the confidential settlement agreement, the action against me 10 will be dismissed with prejudice. Dismissal with prejudice means that Coupons, Inc. will be 11 unable to file this action again. The letter Coupons, Inc. sent the Court to confirm the above can 12 be viewed here: Link (PDF)." Any person who clicked on the words "Link (PDF)" would have 13 seen the letter Coupons, Inc. filed with the Court on November 14, 2008. This letter is Document 14 number 110 on the Court docket. 15 6. On November 19, 2008, I received an email from Dennis Cusack which stated that 16 Coupons, Inc. would not agree to the defend, indemnify and hold harmless clause I had requested 17 be added to the Mutual Release of Claims. A true and exact copy of the email I received from 18 Dennis Cusack is attached to this declaration as Exhibit C. 19 7. Later that same evening, I received an email from Dennis Cusack that included a 20 revised copy of the Mutual Release of Claims and Dennis Cusack stated that he would file the 21 Stipulation for Dismissal as soon as I signed and returned the Mutual Release of Claims. I emailed 22 a signed copy of the Mutual Release of Claims within 40 minutes of receiving the email from 23 Dennis Cusack. A true and exact copy of the email I received from Dennis Cusack is attached to 24 this declaration as Exhibit D. 25 8. On November 20, 2008, I was interviewed by David Kravets. David Kravets is a 26 journalist who publishes articles for wired.com. During the interview I told David Kravets that I 27 could not discuss the terms of the settlement since they were confidential, that the Court did not 28 Declaration of John Stottlemire in Support of Defendant's Motion to Summarily Enforce Settlement No. 5:07-CV-03457 HRL -2- 1 rule on the issues surrounding the litigation and that Coupons, Inc. upgraded their coupon printer 2 software and that because of Coupons, Inc.'s upgrades the instructions central to the litigation no 3 longer had any effect on the number of coupons consumers could print through Coupons, Inc.'s 4 website. As a result of this interview, David Kravets published a blog entry at wire.com. The blog 5 entry by David Kravets makes certain to report each of the facts I provided David Kravets during 6 the interview. A true and exact copy of the blog entry published by David Kravets is attached to 7 this declaration as Exhibit E. 8 9. During the interview, David Kravets also asked me to provide an overview of the 9 litigation. I provided David Kravets the following statement as a result of his request: "Without 10 being represented by an attorney, I defended myself in federal court against a company who 11 solicited the services of two separate law firms, and in my opinion, I kicked their ass. By refusing 12 to succumb to their bullying tactics, I continued to assert my innocence and fought the claims 13 Coupons, Inc. filed against me." David Kravets published the exact statement I released in his 14 blog entry. 15 10. On November 21, 2008, Wendy Davis, a journalist from mediapost.com contacted 16 me and asked if I would comment on the litigation. Wendy Davis told me she learned of the 17 litigation by reading the blog entry posted by David Kravets. All of Wendy Davis' questions were 18 limited to my being a pro se litigant and she did not ask any questions about the settlement. A true 19 and exact copy of the blog entry posted by Wendy Davis as a result of my interview with her is 20 attached to this declaration as Exhibit F. 21 11. On November 21, 2008, I sent an email to Dennis Cusack asking when he intended 22 to file the Stipulation for Dismissal. 23 24 12. 13. Neil Goteiner is an attorney of record for Coupons, Inc. On November 21, 2008, Neil Goteiner emailed me and stated that they had no 25 intention of filing the Stipulation for Dismissal. The email further claimed that I had breached the 26 settlement agreement executed on November 13, 2008. A true and exact copy of the email I 27 received from Neil Goteiner is attached to this declaration as Exhibit G. 28 Declaration of John Stottlemire in Support of Defendant's Motion to Summarily Enforce Settlement No. 5:07-CV-03457 HRL -3- 1 14. On November 23, 2008, Neil Goteiner emailed me and explained in detail his 2 interpretation of the "Non-Severability" clause of the Mutual Release of Claims. A true and exact 3 copy of the email I received from Neil Goteiner is attached to this declaration as Exhibit H. 4 I declare under penalty of perjury under the laws of the United States of America that the 5 foregoing is true and correct. Executed this 20th day of January 2009 at High Point, North 6 Carolina. 7 8 9 Dated: January 20, 2009 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Declaration of John Stottlemire in Support of Defendant's Motion to Summarily Enforce Settlement No. 5:07-CV-03457 HRL /s/ John A Stottlemire Defendant, pro se -4- EXHIBIT A John Stottlemire From: Sent: T o: Cc: Subject: Attachments: John: Attached are two documents called for by the Settlement Agreement: a Mutual Release; and a Stipulation for Dismissal. Please let me know if you have any questions or concerns. Once we're agreed on final wording, we can arrange for an exchange of signatures on the Mutual Release, and then file the Stipulation. Dennis DCusack@fbm.com Monday, November 17, 2008 7:42 PM jstottl@comcast.net lsegal@couponsinc.com mutual release and stip for dismissal Mutual releases.DOC; Stip for dismissal.DOC Dennis M. Cusack Attorney at Law ______________________________ Farella Braun + Martel LLP RUSS BUILDING 235 MONTGOMERY STREET SAN FRANCISCO / CA 94104 ______________________________ T 415.954.4400 D 415.954.4475 F 415.954.4480 www.fbm.com <<Mutual releases.DOC>> <<Stip for dismissal.DOC>> _________________________________________________________________________ This e-mail message is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply e-mail and destroy all copies of the original message. Thank you. Farella Braun + Martel LLP 1 EXHIBIT B John Stottlemire From: Sent: T o: Subject: John Stottlemire [jstottl@comcast.net] Monday, November 17, 2008 7:59 PM 'DCusack@fbm.com' RE: mutual release and stip for dismissal A "mutual general release in standard form" normally contains three sections pertaining to the release. 1) Release from claims. 2) Assignment of claims. 3) Defend, indemnify and hold harmless. While the document you provide contains a release of claims, there is no assignment or defend, indemnify and hold harmless sections. I will sign the document as soon as those sections are added. -john From: DCusack@fbm.com [mailto:DCusack@fbm.com] Sent: Monday, November 17, 2008 4:42 PM To: jstottl@comcast.net Cc: lsegal@couponsinc.com Subject: mutual release and stip for dismissal John: Attached are two documents called for by the Settlement Agreement: a Mutual Release; and a Stipulation for Dismissal. Please let me know if you have any questions or concerns. Once we're agreed on final wording, we can arrange for an exchange of signatures on the Mutual Release, and then file the Stipulation. Dennis Dennis M. Cusack Attorney at Law ______________________________ Farella Braun + Martel LLP RUSS BUILDING 235 MONTGOMERY STREET SAN FRANCISCO / CA 94104 ______________________________ T 415.954.4400 D 415.954.4475 F 415.954.4480 www.fbm.com 1 <<Mutual releases.DOC>> <<Stip for dismissal.DOC>> _________________________________________________________________________ This e-mail message is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply e-mail and destroy all copies of the original message. Thank you. Farella Braun + Martel LLP 2 EXHIBIT C John Stottlemire From: Sent: T o: Cc: Subject: John: While we're willing to acknowledge that we've not assigned any claim being released, Coupons is not willing to indemnify you against claims by third parties. Such a provision would be highly unusual in a case such as this and is not part of a standard mutual release. We'll add the acknowledgment of non-assignment and forward a revised release. Dennis Dennis Cusack Farella Braun + Martel LLP 415-954-4475 DCusack@fbm.com W ednesday, November 19, 2008 9:19 PM jstottl@comcast.net NGoteiner@fbm.com Settlement _________________________________________________________________________ This e-mail message is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply e-mail and destroy all copies of the original message. Thank you. Farella Braun + Martel LLP 1 EXHIBIT D John Stottlemire From: Sent: T o: Cc: Subject: Attachments: John: Per our exchange of emails today, I'm attaching a revised Mutual Release, which adds at the end an acknowledgement that claims each of us is purporting to release have not been assigned. Please sign and PDF/mail to me. When we receive your signature, we'll file the Stipulation for Dismissal. Thank you. Dennis <<1766955_1.DOC>> DCusack@fbm.com W ednesday, November 19, 2008 11:32 PM jstottl@comcast.net lsegal@couponsinc.com Revised Mutual release 1766955_1.DOC _________________________________________________________________________ This e-mail message is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply e-mail and destroy all copies of the original message. Thank you. Farella Braun + Martel LLP 1 EXHIBIT E Coupon Hacker Defeats DMCA Suit | Threat Level from Wired.com Page 1 of 4 All Wired « Bush Admin Rejects NYPD Spying Proposals as Illegal | Main | State Can Ban Prescription Data Mining, Appeals Court Rules » Coupon Hacker Defeats DMCA Suit By David Kravets November 20, 2008 | 7:00:50 PM A California online coupon generating company is dropping its Digital Millennium Copyright Act lawsuit against a man sued for posting commands allowing users to print an unlimited number of valid coupons. John Stottlemire was sued last year after posting the commands to his tenbucks.net and other websites. He was accused of posting code and instructions allowing shoppers to circumvent copy protection on downloadable, printable coupons from Colgate, General Foods and others for everything from cereal to soap. Mountain View, Calif.-based Coupons Inc. argued Stottlemire was no different from cracks like "DVD Jon" Johansen's program, DeCSS, which allowed the duplication of encrypted DVDs. "Without being represented by an attorney, I defended myself in federal court against a company who solicited the services of two separate law firms," Stottlemire said. "And in my opinion, I kicked their ass. By refusing to succumb to their bullying tactics, I continued to assert my innocence and fought the claims Coupons Inc. filed against me. " The 43-year-old Fremont, Calif., man insisted he did not circumvent any technology and instead found a weakness in Coupons Inc.'s software. Removing the key to the software's program limiting coupon production allowed users to acquire an unlimited number of coupons with unique, functioning serial codes. Coupons Inc. declined comment. Terms of the dismissal were not made public. They do not require Stottlemire to remove the workaround, which is still published here. Despite the settlement, the legal question at issue remains unsettled ­ whether Stottlemire's actions were unlawful under the DMCA. The 10-year-old law prohibits circumventing technology to work around measures to prevent the duplication of what Coupons Inc. claimed were copyrighted materials. The question may be a moot point, at least for now. Coupons Inc. has countered Stottlemire's workaround, which no longer works. Photo: JasonJT's Photostream See Also: Digital Millennium Copyright Act of 1998 Years Later, Misunderstood DMCA is the Law That Saved the Web ... DMCA Abuser Apologizes, Will Take Copyright Law Course Universal Says DMCA Takedown Notices Can Ignore 'Fair Use ... Stifled by Copyright, McCain Asks YouTube to Consider Fair Use ... Congress Moves to Reshape DMCA Air Force Cyber Command's New Weapon: DMCA Notices Google, EFF Applaud Veoh DMCA Ruling Judge Who Signed 'Torture Memo' Blasts DMCA Sentence EFF and U.C. Berkeley Defend Accused Coupon Hacker in DMCA Suit ... Universities Baffled By Massive Surge In RIAA Copyright Notices ... DMCA Abuser Retracts Ethan Ackerman Clarifies Copyright Takedown Stories The 10 Kevin Poulsen | e-mail David Kravets | e-mail Kim Zetter | e-mail Ryan Singel | e-mail Yahoo! Buzz Stumble ShareThis http://blog.wired.com/27bstroke6/2008/11/a-california-on.html 1/19/2009 Coupon Hacker Defeats DMCA Suit | Threat Level from Wired.com Page 2 of 4 Obama to Defend Telco Spy Immunity Child Porn Laws Used Against Kids Who Photograph Themselves High Court OKs Illegal Searches Based on Computer Errors Hardware Hacker Charged With Selling Cable Modems That Get Free Broadband -Update Despite RIAA Loss, File Sharers Face Hefty Fines This post's pheedo code is causing your feed to be invalid. line 335, column 82: XML parsing error: :335:82: not well-formed (invalid token) [help] ... hdo?s=d4d892e6d6d809c0e6752be3967d01a1&p=1"> Posted by: Tom | Nov 20, 2008 11:18:19 PM OUtstanding. Nice to see the "little guy" come out on top every now and then. jess http://www.anonymity.at.tc January 2009 Posted by: John Davis | Nov 21, 2008 4:59:23 PM Sun Mon Tue Wed Thu Fri Sat Hello Here is a new brand website for social bookmarking which is very fast updating in google, yahoo, msn. so use this website for your bookmarks. http://www.yuppmarks.com 5 6 7 1 8 2 3 4 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Posted by: viz | Nov 21, 2008 11:57:47 PM 25 26 27 28 29 30 31 POST A COMMENT Name: Email Address: (Not Required, Not Published) RIAA Appealing Decision Allowing Internet Broadcast of File Sharing Court Hearing Bullies Worse than Predators On Social Networks Despite RIAA Loss, File Sharers Face Hefty Fines Comments: Terror at 37,000 Feet Obama to Defend Telco Spy Immunity Child Porn Laws Used Against Kids Who Photograph Themselves High Court OKs Illegal Searches Based on Computer Errors Online Burger Promotion Pulled After Going Too Viral In Internet First, RIAA File Sharing Hearing to Be Webcast Post See more Threat Level State Department Passport Snoop Faces Little or No Jail Time 2008 Republican National Convention (3) AM-FM Royalties (1) Announcements (15) Apple, iPhone (2) BitTorrent (23) Black Friday (1) Black Hat (6) Breaches (36) California Fires (6) http://blog.wired.com/27bstroke6/2008/11/a-california-on.html 1/19/2009 Coupon Hacker Defeats DMCA Suit | Threat Level from Wired.com Page 3 of 4 CCC (20) Censorship (53) Citibank (7) Connectivity and Broadband (2) Copyright Czar (1) Copyrights and Patents (67) Cover-Ups (45) Crime (173) Crypto (12) Cybarmageddon! (29) Cyberbullying (1) Cybersecurity (21) Darkmarket (7) DefCon (23) Digital Millennium Copyright Act (4) Disasters (3) DNC 2008 (14) E-Voting (97) Early Termination Fees (1) Election '08 (566) Fed Blotter (9) Forensics (6) Gists (3) Glitches and Bugs (49) Hacks and Cracks (192) Hamburger Helper (1) Hans Reiser Trial (117) Hot Planet (25) Identification (52) Identity Theft (1) Information Sharing (5) Intellectual Property (52) ISP Privacy Survey (10) Kickbacks (8) Lori Drew Trial (23) Mobile Phone Unlocking (2) MPAA Litigation (3) Network Neutrality (33) NSA (175) Online Pharmacies (1) Online Political Campaigns (19) Patents (2) Phreaky Phriday (3) Politics (84) Porn (19) Privacy (146) Propaganda (2) Revolving Door (3) RFID (5) RIAA Litigation (81) RNC08 (3) RSA Conference (8) Spam and Phishing (8) Spooks Gone Wild (63) Sunshine and Secrecy (98) Surveillance (171) http://blog.wired.com/27bstroke6/2008/11/a-california-on.html 1/19/2009 Coupon Hacker Defeats DMCA Suit | Threat Level from Wired.com Page 4 of 4 Tech Companies in China (10) The Courts (80) The Ridiculous (21) Threats (52) ToorCon (8) Virginia Tech shootings (32) Watchlists (33) Wikiwatch (3) Yo Ho Ho (2) Stay connected with Wired Mobile: Tech News, Gadget Reviews, and Special Offers - all delivered to your mobile device. Add Threat Level to your favorite feed reader. Find more Wired.com feeds, including web-based news reader feeds, here. California Noncompete Experienced Los Angeles-based Specializing in Non Compete Laws. - www.gindylaw.com Free Grocery Coupons Free Coupons for 1,000s top brands! Save money free printable coupons. - www.ShopAtHome.com Christian Mom Makes 5k/mn How a Christian Mom makes $5000 a month with Free Government Grants. - Grants247.com Coupons & Coupon Codes Free Online Coupons, Coupon Codes Printable Grocery Coupons and more. www.CouponWinner.com/Coupons Ads by Google Corrections | Sitemap | FAQ | Contact Us | Wired Staff | Advertising | Press Center | Subscription Services | Newsletter | RSS Feeds web sites: Webmonkey.com | Reddit.com | ArsTechnica.com | Epicurious.com | NutritionData.com | Concierge.com | HotelChatter.com | Jaunted.com | Style.com | Men.Style.com | Flip.com Subscribe to a magazine: Condé Nast web sites: © 2008 CondéNet, Inc. All rights reserved. Use of this site constitutes acceptance of our User Agreement and Privacy Policy http://blog.wired.com/27bstroke6/2008/11/a-california-on.html 1/19/2009 EXHIBIT F MediaPost Publications - Coupons Inc. Settles Case Against Hacker - 11/24/2008 Page 1 of 2 Publications Events Directories Classifieds Research Community Welcome John Stottlemire | My Account | Sign Out HOME · MANAGE SUBSCRIPTIONS · MEDIA KIT Home > Search > Online Media Daily > Monday, Nov 24, 2008 ADVANCED SEARCH Coupons Inc. Settles Case Against Hacker by Wendy Davis, Monday, November 24, 2008, 7:00 AM Article Comments An online coupon distributor has settled a closely watched case against a programmer who told Web users how to get around code designed to limit the number of times that coupons could be printed. The details of the settlement between the company, Coupons Inc., and the programmer, John Stottlemire, are confidential. But Stottlemire said that the lawsuit against him will be withdrawn with prejudice (meaning that it can't ever be filed again) as long as he complies with the agreement. Coupons Inc. did not respond to a request for comment. The Mountain View, Calif.-based Coupons Inc. provides technology that enables companies to deliver coupons directly to consumers at corporate Web sites, through banner ads and in e-mail messages. Coupons Inc. bundles its programs with software that aims to restrict users' ability to print multiple copies of the vouchers. The dispute between the company and Stottlemire began last July, after the Fremont, Calif. resident posted instructions for expunging the code that restricted the number of copies that could be printed. He also allegedly offered downloadable software that would remove Coupons' code. Coupons Inc. then filed suit against Stottlemire in federal district court in San Jose, for allegedly distributing tools that circumvented the company's digital rights management program. TOOLS EMAIL SUBSCRIBE PRINT RSS REPLY SHARE RELATED ARTICLES 1. Managing ROI On A Shrinking Budget 2. Survey: Web Video Beats TV Among Respondents Ages 18-24 3. House Approves Funds For Broadband Expansion 4. Motionbox Raises $6 Million, Gets New CEO 5. BrightRoll: Video Ad Rates Fell 25% In Q4 TAGS: Legal, Online AUTHORS » Mark Walsh » Wendy Davis » Gavin O'Malley » Laurie Sullivan » Tameka Kee » Joe Mandese » Tanya Irwin » David Goetzl » Karlene Lukovitz » Erik Sass ARCHIVES MOST READ 1. Incident Sends Airline's Social Media Index Soaring 2. Clear Channel Revamps, Cuts 3. Kraft Fast-Forwards Functional Foods 4. Hyundai Likely To Tout Assurance Program In Bowl 5. TCA: ABC Notes Poor Fall Performance, Rethinks Late Night » January 2009 » December 2008 » November 2008 » October 2008 » September 2008 » August 2008 » All Archives Because the lawsuit was resolved, the court did not decide whether Stottlemire's work-around violated the Digital Millennium Copyright Act. That law prohibits trafficking in technology that circumvents software that restricts access to copyrighted material. But digital rights advocates say that the law does not ban mere discussions about the software. Stottlemire took the position that Coupons Inc. had hidden its restrictive files on users' computers, and that he was just offering instruction on how to delete those files. "Through the use of hiding files and registry keys on a computer, in areas normally reserved for the Windows operating system ... Coupons, Inc. attempts to control access to coupons it offers to the public," he wrote on his blog tenbucks.net in July of 2007. He added that no special software was needed to purge those keys. "The only tool required is the delete button on your keyboard ... and knowledge of where these unprotected files lie." Coupons Inc. eventually changed its methods to defeat Stottlemire's work-around. Stottlemire, who is not a lawyer, said he decided to represent himself after learning that lawyers' fees could quickly total in the six figures. "I knew I was right, and I couldn't afford an attorney," he said. "I spent many nights in front of the computer researching case law and writing briefs and rewriting briefs." Recent Online Recent Online Media Daily Articles Expert: Big Brands Have Big Search Challenges BrightRoll: Video Ad Rates Fell 25% In Q4 Jan 16, 7:00 AM Large brands have unique challenges managing paid search advertising campaigns, according to Chris Sherman, executive editor... Jan 16, 7:00 AM https://www.mediapost.com/publications/index.cfm?fa=Articles.showArticle&art_aid=952... 1/19/2009 MediaPost Publications - Coupons Inc. Settles Case Against Hacker - 11/24/2008 Page 2 of 2 Average pre-

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