Specht et al v. Google Inc et al

Filing 354

REPLY by Martin J Murphy to MOTION by Counter Defendants Andoid's Dungeon Incorporated, The, Andoid's Dungeon Incorporated, The, Erich Specht, Plaintiffs Andoid's Dungeon Incorporated, The, Android Data Corporation, Erich Specht to strike MOTION by Defendant Google 333 , MOTION by Defendant Google Inc for attorney feesMOTION by Defendant Google Inc for sanctions 314 (Murphy, Martin)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
ERICH SPECHT, an individual and doing business
as ANDROID DATA CORPORATION, and THE
ANDROID’S DUNGEON INCORPORATED,
Plaintiffs/Counter-Defendants,
v.
GOOGLE INC.,
Defendant/Counter-Plaintiff.

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Civil Action No. 09-cv-2572
Judge Harry D. Leinenweber

MARTIN MURPHY’S REPLY MEMORANDUM IN SUPPORT OF HIS
MOTION TO STRIKE [ECF 333] GOOGLE’S POST JUDGMENT MOTION
FOR SANCTIONS [ECF 314]
NOW COMES Martin Murphy, attorney for Plaintiffs, Erich Specht, an individual and
doing business as Android Data Corporation and The Android’s Dungeon Incorporated
(collectively, “Plaintiffs”), and for his reply in support of his motion to strike [ECF 333] states as
follows:
I.

THE FILING OF A NOTICE OF APPEAL MAY HAVE DIVESTED THIS
COURT OF JURISDICTION TO ENTERTAIN GOOGLE’S MOTION FOR
SANCTIONS
Before the Court may act on Google’s motion, it must first ascertain whether or not is has

jurisdiction over the subject matter. Insurance Corp. of Ireland v. Compagnie des Bauxites de
Guinee, 456 US 694 (1982). In Ireland, the Court held that:
Subject-matter jurisdiction … functions as a restriction on federal power, and contributes
to the characterization of the federal sovereign. For example, no action of the parties can
confer subject-matter jurisdiction upon a federal court. Thus, the consent of the parties is
irrelevant, California v. LaRue, 409 U. S. 109 (1972), principles of estoppel do not apply,
American Fire & Casualty Co. v. Finn, 341 U. S. 6, 17-18 (1951), and a party does not
waive the requirement by failing to challenge jurisdiction early in the proceedings.
Similarly, a court, including an appellate court, will raise lack of subject-matter
jurisdiction on its own motion. "[T]he rule, springing from the nature and limits of the
judicial power of the United States is inflexible and without exception, which requires

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this court, of its own motion, to deny its jurisdiction, and, in the exercise of its appellate
power, that of all other courts of the United States, in all cases where such jurisdiction
does not affirmatively appear in the record."
Id.
Under the criteria set forth in Overnite Transp. Co. v. Chicago Indus. Tire Co., 697 F.2d
789, 792 (7th Cir. 1983), it appears that this Court does not have jurisdiction over Google’s
motion. “It is a well established general rule that the perfection of an appeal "vests jurisdiction
in the court of appeals [and] further proceedings in the district court cannot then take place
without leave of the court of appeals." Overnite Transp. Co.at 792 citing Asher v. Harrington,
461 F.2d 890, 895 (7th Cir.1972). It is undisputed that no motions were pending before this
Court at the time the Notice of Appeal was filed. Thus, under the holding in Overnite, it appears
that the Court does not have jurisdiction to entertain Google’s § 1927 motion.

It is also

important to note that the Court permitted Novack and Macey LLP and Andrew Fleming to
withdraw from this case on February 3, 2011, without objection and without reservation. At no
time did Google ever ask the Court to reserve any right to file motions for sanctions against any
of the attorneys.
Accordingly, Google’s motion must be stricken for lack of subject matter jurisdiction and
prior notice. If, for any reason, the Court finds that it does have subject matter jurisdiction, then
the Court should find that Google’s motion for sanctions against Martin Murphy is insufficient as
a matter of Law, as set forth in the motion to strike and below.
II.

GOOGLE’S MOTION FOR SANCTIONS IS INSUFFCIENT TO STATE A
CLAIM
Google claims that “Murphy cites no authority for the proposition that Google is required

to provide such a breakdown [of excess costs, expenses, and attorneys’ fees allegedly incurred],

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and no such authority exists.” [Google Reply Memo.1 At p. 6]. Google is clearly wrong.
Authority for “Murphy’s” claim rests, first, with the plain language of § 1927 itself. Section
1927 provides, in relevant part, that:
Any attorney … who so multiplies the proceedings in any case unreasonably and
vexatiously may be required by the court to satisfy personally the excess costs, expenses,
and attorneys’ fees reasonably incurred because of such conduct.
28 U.S.C. § 1927.
Applying the plain language of the statute, Google must: identify the attorney it is
seeking to have sanctioned; detail the specific conduct of that attorney that allegedly
unreasonably and vexatiously multiplied the proceedings; and specify the amount of excess
costs, expenses and fees reasonably incurred. Because Google’s motion fails to do any of the
foregoing, it fails to meet even the most basic pleading requirements under § 1927. By grouping
all of the attorneys and parties together as a collective whole, Google’s motion does not identify
with any particularity, capable of an informed response, what party or attorney it is complaining
of. (See, for e.g., this Court’s dismissal sua sponte of the Corporate Defendants in this case.
Specht v. Google, Inc., 660 F. Supp. 2d 858, 865 (ND IL, 2009. The Court said that “the
Plaintiffs treat the numerous Defendants (other than Google) as a collective whole and do not
identify any specific act of infringement by any single Defendant or any service rendered or
product provided by any single Defendant … The FAC, thus, fails to place each Defendant on
notice as to its alleged wrongful conduct.”). While it is proper to group partners as a collective
whole, the same does not apply in this case where liability is individual and not vicarious. In its
motion Google is improperly attempting to group the plaintiffs and attorneys as a “collective

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Although titled a “Reply” Google Inc.’s Reply Memorandum in Support of its Motion
for Attorney’s Fees and Sanctions (“Google Reply”) is actually a reply in support of its motion
[ECF 314] and a response to the motions to strike [ECF 332, 333].

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whole” and not identifying the specific acts of each party or attorney which it claims to have
unreasonably and vexatiously multiplied the proceedings.
In addition, Google, without citing to any authority for its preposterous position, argues
that the Court may award costs and fees against Plaintiffs and their attorneys jointly and
severally. (Google’s Reply Memo. at 6). The law on this issue is crystal clear. Liability of an
attorney under § 1927 is direct, not vicarious. See, for e.g., FM Industries, Inc. v. Citicorp
Credit Services, Inc., 614 F.3d 335, 340-341 (7th Cir. 2010). Also, attorney fees may only be
awarded against a party in ‘exceptional’ cases under the Lanham Act. See, for e.g., Nightingale
Home Healthcare, Inc. v. Anodyne Therapy, LLC, 626 F.3d 958 (7th Cir. 2010). As set forth
previously, this is not an exceptional case warranting an award of attorneys’ fees against
Plaintiffs. Thus, under the holdings in Nightingale and FM Industries, attorneys’ fees may not
be awarded against an attorney under the Lanham Act or against a party as a sanction under §
1927.
Under the plain reading of § 1927, Google’s $1 million request is neither specific enough
to permit or warrant a response, nor reasonable enough to warrant consideration by this Court.
In addition to the plain language of § 1927, The Supreme Court in Roadway Express,
cited in the motion to strike [ECF 333], also requires that “fair notice” be given before attorney
fees can be awarded by a Court. Roadway Express, Inc. v Piper, 447 U.S. 752, 767 (1980).
Without setting forth specific allegations of misconduct against the parties or attorneys, Google
has failed to provide fair notice.
Accordingly, Google’s absurd statement that “There is no reason that both Plaintiffs and
their counsel cannot be responsible for the same fees – albeit on different bases,” (Google Reply
at p. 6) does not hold water.

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III.

GOOGLE’S MOTION FOR SANCTIONS IS UNTIMELY UNDER RULE 54 (d)
(2)
For the first time, in its response to the motions to strike, Google now argues that its

motion for sanctions is a Rule 54 (d)(2) motion. See, for e.g., “Indeed, Rule 54(d)(2)(C)
expressly provides that the Court “may decide issues of liability for fees before receiving
submissions on the value of services,” (Google’s Reply at p. 6) and “Rule 54(d)(2)(C) merely
requires that the Court “give an opportunity for adversary submissions on the motion.” (Google’s
Reply Memo. at pp. 7-8).
A Rule 54(d)(2) motion for fees is untimely, as set forth more fully in Plaintiffs’ motion
to strike [ECF 332], Plaintiffs Response in Opposition to Google’s Motion for Attorneys’ Fees
[ECF 347] and Plaintiffs’ Reply in Support of Motion to Strike (filed contemporaneously with
this Reply). Google’s motion for sanctions is predicated upon issues that were decided before
the Court entered Summary Judgment on December 17, 2010. Under Rule 54(d) any motion for
attorney fees and nontaxable costs must be filed no more than 14 days after entry of judgment.
Again, Google’s motion was not filed until March 11, 2011, 84 days after summary judgment
was entered. Accordingly, Google’s motion for attorney fees and costs as a sanction is untimely.
IV.

SANCTIONS SHOULD NOT BE AWARDED WITHOUT AN OPPORTUNITY
FOR A HEARING ON THE RECORD
The right to a hearing with witnesses is consistent with the Due Process and

Confrontation clauses of the Fifth and Sixth Amendments. Also, the Supreme Court in Roadway
stated that attorneys’ fees should not be awarded under § 1927 without fair notice and an
opportunity for a hearing on the Record. Roadway, at 767. As previously set forth, Google’s
motion does not provide fair notice. If, for some reason, the Court were to hold that Google’s
motion meets the fair notice requirements, then a hearing on the record is required in this case.

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Unlike a motion for attorneys’ fees under the Lanham Act, which is not a lawsuit, a
motion for sanctions is in essence a tort suit. Google is asking the Court to award it damages
based upon the alleged misconduct of Plaintiffs’ attorneys. The alleged misconduct is not part of
the record; rather it depends upon the introduction of evidence and testimony not previously
brought before the Court.
Google also claims that “Murphy has not identified any evidence that is relevant to the
issues before the Court.” (Google Reply Memo. at p. 8). As set forth in the Response [ECF 348],
this statement is not true. Although not previously spelled out in its motion, Google is now
accusing Martin Murphy of the following conduct:
a) Wrongfully naming the OHA Members as defendants;
b) Wrongfully naming Android, Inc. as a defendant;
c) Wrongfully naming Android co-founders, Rubin, White, Miner, and Sears as
defendants;
d) Moving for a TRO and preliminary injunction without legal basis: and
e) Wrongfully seeking the deposition of Page and Brin;
Nowhere does Google allege that any of the above actions delayed the case or caused
Google to incur any excess costs and fees. Instead Google argues that it should be awarded $1
million without regard for the law. None of the above actions delayed the case, the OHA
members, Android, Inc., and the four individuals were dismissed by the Court at the same time it
denied Google’s motion to dismiss. As set forth in the responses and below, the dismissals were
based upon perjured declarations. They did not delay the case or cause Google to incur any
unreasonable costs.

The motion for TRO and injunction were withdrawn after Google’s

attorneys persistently demanded a multi billion dollar bond. The motion for leave to take the

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deposition of Page was denied after Google’s objected. No subpoena or notice of deposition was
ever sent and it was actually Google’s objection that delayed the start of depositions for two
weeks. Accordingly, Google cannot legitimately argue that any of the alleged actions caused it
any delay or to incur any excess costs.
Google’s allegations are facially untrue and were knowingly pursued in bad faith by
Google’s attorney Herb Finn.

Google’s attorney, Mr. Finn has signed the motion and

accompanying memorandums in bad faith and must be sanctioned under Rule 11 for his
unconscionable conduct. As set forth in Martin Murphy’s Response to Google’s Motion for
Sanctions [ECF 348], there is a good faith basis for naming the OHA members, Android, Inc.,
the Android founding members; moving for the deposition of Page; and seeking a TRO and
preliminary injunction, because:
a. The OHA Is A Partnership As Alleged In The First Amended Complaint
Google now argues that “Murphy’s “partnership” argument is nothing more than an afterthe-fact argument concocted by Murphy.” (Google’s Reply Memo. at p. 15). That is not true.
The FAC clearly alleged that the OHA is a partnership and the OHA members were partners.
(See for e.g. Specht at 862 “On November 5, 2007, Google and the OHA, "a partnership or
business alliance of 47 firms," including the Corporate Defendants, launched a software product
called "Android." FAC ¶ 26.” (Emphasis Added). Thus, Google statement is patently false and
misleading and should be condemned.
b. Contrary To Their Sworn Declarations, The Four Individuals Are Personally
Profiting From Google’s Acquisition And Use Of Android
Google argues that the decision to add Android, Inc. and the four individuals was
unreasonable and vexatious because Plaintiffs only named them to get more damages. (See
Google’s Reply Memo. at p. 16). It was Martin Murphy’s duty as a lawyer to obtain all of

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Plaintiffs damages. An attorney that does not pursue damages that his client is entitled to would
be guilty of malpractice. The four individuals were and are still personally profiting from the
sale of Android devices. The four individuals sold a bankrupt company to Google for $71
million with $59 million of that purchase price directly related to the sale of Android devices.
With a complete disregard for Plaintiffs trademark rights, the individuals used and encouraged
Google and the OHA members to use the name Android for their operating system.

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payments to the individuals were contingent on the sale of Android products culminating in the
sale of 50 million phones. Andy Rubin proudly admits that the decision to use the name Android
was his. Two of the other three individuals admitted that they were complacent with Andy
making all of the naming decisions.
Google’s argument, that it was wrong to name the individuals, ignores the fact that the
only reason the Court dismissed Android, Inc. and the four individuals was based upon the
perjured statements of the four individuals. Thus, Andy Rubin, Chris White, Nick Sears and
Rich Miner need to explain the false statements they made to this Court. The four individuals
personally sold Android to Google for $71 million and falsely declared to this Court that they
were not personally involved in the sale. [ECF 348, Exhibit 7]. By falsely alleging that they
were improperly named as defendants and filing false declarations, they are material fact
witnesses and their attendance should be compelled to appear and answer for their illegal
conduct. [ECF 75-2, 75-3, 75-4, 75-5, and 314 at p. 2, item (c)]. In his declaration to this Court,
Rubin also declared that Android, Inc. has no assets of its own and carries on no business as a
corporation. However, this declaration directly conflicts with the corporate filings made by
Android, Inc. a little more than a month before this lawsuit was filed.

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c. According to The Annual Report Filed With The California Secretary of State,
Google Was Operating Android Through Its Wholly Owned Subsidiary,
Android, Inc.
Android, Inc. was properly named a defendant in the FAC. Android, Inc. is a subsidiary
of Google which according to its March, 2009, corporate filings with the California Secretary of
State was in the MOBILE OPERATING SYSTEM AND APPS business. In March 2009,
Android, Inc. filed a corporate report with the California Secretary of State. The report was
signed under oath and stated that Android, Inc. is in the. MOBILE OPERATING SYSTEM
AND APPS business [ECF 348, Exhibit 6]. The report lists Google’ Mountain View, California,
address as Android, Inc.’s principal place of business. Android Inc.’s corporate filing identifies
three officers of Android, Inc., including Google’s General Counsel, John Kent Walker, as
president/secretary; Lloyd Martin, Google’s Finance Director, as chief financial officer; and
Donald S. Harrison, Deputy General Counsel at Google, as assistant secretary. The corporate
filing is signed under oath by Donald S. Harrison, Assistant Secretary. Accordingly, at the time
the complaint was filed, a good faith basis existed for believing that Android, Inc. was a
functioning entity and that Google was operating its Android business through Android, Inc..
d. According To Google’s Own E-Mails, Sergey Brin and Larry Page Approved
The Android Name
Whether directly sanctioning it or by passively approving it, Sergey Brin and Larry Page
approved the Android mark. Despite the fact that no notice of deposition or subpoena was ever
issued to these two individuals, Google now complains that these two high level executives were
improperly singled out for deposition. As discovery showed, Page and Brin were properly
identified and are material fact witnesses to Google’ adoption of the Android mark. Contrary to
what Google is now arguing, Brin and Page personally participated in the decision to name
Android and are relevant fact witnesses to this motion. Larry Page is now the CEO of Google.

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Page was personally involved in the negotiations to purchase Android. Page and Brin were the
most senior executives at the Android naming meeting along with six lower level employees. As
the most senior executives personally involved in the branding decision, their testimony is
relevant to the issues raised by Google. Specifically: Were Mr. Page and Mr. Brin involved in
Google’s selection or adoption of its Android trademark?” The allegation that they were not
contradicts the e-mail from Google dated October 17, 2007, that states that Page and Brin were
involved. [ECF 347, Exhibit 8] The two individuals bear responsibility for the decision to name
Android. By singling out Page and Brin, in its motion for sanctions, and lying about their
involvement in Google’s adoption of the Android mark, Google has made them material fact
witnesses and their attendance at the hearing should be compelled. [ECF 314 at p. 2, item (b)].
Mr. Finn’s allegations to the contrary are a further attempt to mislead the Court and again should
be condemned.
e. Richard Harris, Google’s Attorney’s Outrageous Multi-Billion Dollar Bond
Demands Made It Clear That Google Would Not Be Open to Any Attempts To
Compromise On A TRO And Preliminary Injunction
As previously stated, the purpose of the TRO and Preliminary Injunction was to stop
Google from representing that it owned the Android mark and promoting the Android mark at an
upcoming convention.

The motion was subsequently withdrawn in part because of

misrepresentations made to the Court by Mr. Harris, Google’s attorney, in an attempt to inflate
the size of the bond into the stratosphere. From the outset, Google made it clear that it was going
to be all or nothing. Mr. Harris’ insisted that Android was a multi billion dollar business and
nothing less than a bond in the area of a “TARP” installment would stop Google from claiming
complete ownership of the name. Google would not agree to any compromise, not even a
disclosure on its website that there was pending litigation regarding the mark. (May 21, 2009

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Trans. of Proc. at 5:5-13). Google’s all or nothing ultimatum, eventually convinced Plaintiffs
that Google would never be reasonable. Interestingly though, Google has attempted to distance
itself from the factual admissions made by its attorney that Android is a hugely profitable multibillion dollar business. Google has denied any knowledge of the factual basis for its attorney’s
representations to this Court. The following is just one of several examples where Mr. Harris, an
officer of the Court, made a representation to the Court that Google denied:
Mr. Harris: There are millions of products out there that when you fire the up
specifically say “Powered by Android” or talk about the Android OS, or operating
system, or software …
May 21, 2009 Transcript of Proceedings at 5:2.
Contrast Mr. Harris’ representation, to the Court, with Google’s answer to the Second
Amended Complaint:
48.
There are millions of products on the market that specifically say “Powered by
Android” or otherwise mention Google’s Android products and/or services.
Answer: Google has neither knowledge nor information sufficient to form a belief as to
the allegations of this paragraph and consequently denies the same.

At the second deposition of Martin Murphy, Google’s attorney and Mr. Harris’ cocounsel, Cameron Nelson, quoting ¶ 48 of the SAC, asked; what was the factual basis for the
allegation in ¶ 48 that “There are millions of products on the market that specifically say
“Powered by Android” or otherwise mention Google’s Android products and/or services?”
When Martin Murphy answered that it was a quote from Mr. Harris, Mr. Nelson looked over to
Mr. Finn who just shrugged. It is not clear whether Mr. Harris’ representations to the Court were
lies or whether Google lied when it denied any information regarding the admission. Either way,
there is a factual dispute regarding the propriety of Plaintiffs’ motion for a TRO and the

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subsequent withdrawal of that motion and Mr. Harris a material fact witness on that issue and
should be compelled to testify at any hearing on the motion for sanctions.
Google has made an issue of this matter and Mr. Harris should be compelled to answer
for his lie or explain why he did not share the information he knew with Google, his co-counsel,
or Plaintiffs.
WHEREFORE, for the reasons set forth above and in the Motions to Strike, Google’s
motion for sanctions against Martin Murphy should be stricken or denied. If for any reason, the
Court is considering entertaining Google’s motion for sanctions, then Martin Murphy requests
that a hearing with relevant witnesses and evidence be conducted on the record.

Respectfully submitted,
Martin Murphy
By:
Martin J Murphy
2811 RFD
Long Grove, IL 60047
[phone]
[e-mail]

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/s/Martin J. Murphy

CERTIFICATE OF SERVICE
Martin J. Murphy, an attorney, certifies that he caused copies of the foregoing to be
served by electronically filing the document with the Clerk of Court using the ECF system this _
_9_ day of June, 2011.

/s/ Martin J. Murphy

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