In Re: Webloyalty.com, Inc., Marketing and Sales Practices Litigation

Filing 36

In Re: Webloyalty.com, Inc., Marketing and Sales Practices Litigation

Doc. 36

Case 1:07-md-01820-JLT

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Filed 03/05/2007

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UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

JOE W. KUEFLER, Individually and on

Behalf of All Others Similarly Situated
Plaintiff,
vs.

) No.06-CA-11620-JLT ) ) CLASS ACTION ) )
)

) )
)

WEBLOY ALTY.COM, INC., et aI.,

Defendants.

) )
)

DECLARATION OF DAvin J. GEORGE
Pursuant to 28 U.S.C. § 1746, I, David J. George, hereby declare under penalty of

perjury

that the following declaration is true and correct:
1. My name is David J. George.
2. I am over twenty-one years of age, and am fully competent to make the statements

contained in this Declaration.
3. I am a Partner with the law firm ofLerach Coughlin Stoia Geller Rudman & Robbins

LLP ("Lerach Coughlin") working out of our firm's Boca Raton, Florida office.
4. I have practiced law for sixteen years and I am A V rated by Martindale-HubbelL.

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5. Lerach Coughlin is co-counsel for the plaintiff Joe W. Kuefler ("Mr. Kuefler") in the

above-captioned class action, along with the Boca Raton, Florida law firm of Lee & Amtzis, P.L.

("Lee & Amtzis") and the North Dartmouth, Massachusetts law firm of Philips & Garcia, LLP
("Philips & Garcia").

6. In addition to this case, we are co-counsel with Lee & Amtzis and Philips & Garcia

with respect to two other virtually identical class actions brought in the District of Massachusetts
against Defendant Webloyalty.com, Inc. ("Web

loyalty") and various of its retailer partners,

including Justflowers.com and Priceline.com.
7. There is a fourth virtually identical case which was brought against Webloyalty and

an additional retailer partner, 123injets.com, which was originally brought in the Northern District of

California by Wexler Toriseva Wallace LLP ("Wexler Toriseva") and its co-counsel, McCallum
Hoaglund Cook & Irby LLP ("McCallum Hoaglund") and Green Welling LLP ("Green Welling").
8. Recently, the Judicial Panel on Multidistrict Litigation issued an order

transferrng all

of

the Web

loyalty cases to the District of

Massachusetts. As a result of an agreement among counsel

for plaintiffs in the various Webloyalty matters, it is our intention to petition this Court for
appointment of Lerach Coughlin and Wexler Toriseva as co-lead counsel for plaintiffs in all of

the

Webloyalty cases, with Philips & Garcia acting as local counseL.
9. Although there are more than a dozen lawyers working on this case and the related

Webloyalty cases, I had primary and supervisory responsibility for the prosecution of

this case at all

times relevant to the issues raised in Defendants' Motion for Sanctions filed with this Court on
February 20, 2007 (the "Motion for Sanctions") (Dkt. No. 30), and take full responsibility for the

circumstances which culminated in the premature service of a subpoena (the "Subpoena") on the
Connecticut Better Business Bureau (the "BBB") as well as our failure to timely serve the Subpoena

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on Defendants.

10. I submit this Declaration in opposition to the Motion for Sanctions. As explained

herein and in our Opposition to Defendants' Motion for Sanctions (the "Opposition"), the Motion for

Sanctions, in addition to all but calling me a liar, contains substantial distortions of the truth
regarding the circumstances which resulted in the premature service of

the Subpoena on the BBB

and our failure to timely serve the Subpoena on Defendants.

11. To be clear, I will not attempt to justify the innocent errors which caused this
situation. The Subpoena should not have been issued. However, I do submit that the fact that there

has been no prejudice whatsoever to Defendants, because the Subpoena was withdrawn and not a

single document was produced, is a very strong indication that the Motion for Sanctions and
Defendants' audacious request for "relief' is driven not by a need to remedy any prejudice that they

have suffered, but instead to exploit this situation in order to gain an unfair advantage in these
proceedings.
12. On Januar 11,2007, the Subpoena was served on the BBB. While there is a litany

of circumstances that aligned to allow the Subpoena to be issued prematurely, there is little point in

dissecting them here. Plaintiff s counsel wil not make excuses or seek to lay blame. Instead,
Plaintiffs counsel reiterates that the errors were just that, errors, and not an attempt to obtain
discovery covertly or surreptitiously or to circumvent the authority of the Court.

13. While I do not recall the exact date upon which I learned that the Subpoena had been
served, until January 30, 2007, I did not realize that the Subpoena should not have been served and I

was under the mistaken beliefthat Defendants' counsel had been served with the Subpoena and did
not have any objections to the production of

the documents being sought. As a result, my colleague,

Stuart Davidson ("Mr. Davidson") and counsel for the BBB had several discussions regarding the

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number of responsive documents in the possession of the BBB, as well as the means and timing of
the production. I was included in some but not all of

those conversations.

14. On January 30, 2007, I realized not only that the Subpoena had not been served on
Defendants' counsel but that, in any event, the Subpoena had been issued prematurely.
15. Accordingly, on that very same day, I called Defendants' counsel, Gabrielle

Wolohojian ("Ms.Wolohojian"), explained that the Subpoena had been erroneously issued and
inadvertently not served, and attempted to resolve these errors so that Defendants would not be
prejudiced in any way.
16. To be clear, and contrary to the assertions in the Motion for Sanctions, I did not claim
during the January 30, 2007 telephone conference with Ms. W olohojian (or in the subsequent e-mail

confirmation) that I did not know that the Subpoena had been issued. Instead, I acknowledged the erroneous issuance of the Subpoena and explained that it was through internal miscommunication
that the Subpoena had not been served on Defendants.
17. Defendants now attempt to distort and manipulate the substance and context of

the

January 30, 2007 telephone conference and e-mail in order to attempt to convince the Court that I
was attempting to avoid rectifying the erroneous issuance of

the Subpoena - essentially, Defendants

are calling me a liar ("(i)t was diffcult, if not impossible, to reconcile the history of numerous

contacts and continued efforts by Plaintiffs counsel to obtain documents from the BBB with
Plaintiff s counsel's statements that service of

the subpoena on the BBB was "inadvertent" and "due

to internal communications issues"). Motion for Sanctions at Pages 5-6.
18. It was my expectation, when I called Ms. Wolohojian on January 30, 2007, counsel

for parties having previously had only the most professional of dealings, that she would understand

and accept that the issuance of and failure to serve the Subpoena were innocent errors. I believed

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that because the errors were disclosed to Ms. Wolohojian at the earliest possible opportunity, and
remedied, and because not a single document was obtained pursuant to the Subpoena, that the issue

would be closed. Indeed, given the fact that no documents had been produced by the BBB, I
anticipated that Ms. Wolohojian would either raise objections to the documents being sought in the

Subpoena, ask to have the Subpoena abated until the Court held a case management conference, or
simply agree that the documents would be produced by the BBB so long as copies were provided to

Defendants.
19. Rather than any of those alternatives, Defendants and Defendants' counsel chose

instead to attempt to parlay this innocent mistake by Plaintiff s counsel into leverage to coerce
Plaintiff

into withdrawing his Rule 56(f) Motion. This outrageous demand was first communicated
that e-mail is attached

to me in an e-mail from Ms. Wolohojian dated January 31, 2007. A copy of

to the Declaration of Gabrielle R. Wolohojian dated Februar 20, 2007 (the "Wolohojian
Declaration") as Exhibit 4.
20. I was so taken back by this outlandish demand that I actually thought it was ajoke

and attempted to reach Ms. Wolohojian by telephone to see if

that was the case.

21. Unable to reach Ms. W olohojian by telephone, I wrote to her on February 1, 2007.
In that letter, a copy of

which is attached to the Wolohojian Declaration as Exhibit 5, I agreed that,

as requested in Ms. Wolohojian's January 31st e-mail, the Subpoena should be considered

withdrawn. However, as to the demand that the Rule 56(f) Motion be withdrawn, I wrote:

Second, we wil not withdraw our Rule 56(f) motion. Your clients have taken the position that the "disclosures" that they "provide" to consumers are sufficient to justify the unilateral imposition of recurring monthly fees to tens of thousands of unsuspecting milions of dollars in revenue. The Rule 56(f) motion was consumers, reaping hundreds of fied in order to allow us to undertake the discovery to respond to a premature summary

judgment motion. We firmly believe that such class-wide discovery wil result in
overwhelming evidence to supplement what we have already learned in our pre-suit investigation - that Webloyalty's "customers" are being duped into "subscribing" for

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services that they do not want and are being charged without their knowledge and consent (a your clients simply required consumers to recircumstance that could be instantly cured if enter their credit or debit card numbers as a conditon to being "enrolled'). Such evidence wil go to the very heart of your clients' motion for summary judgment.

As to your not so veiled threat to fie some motion if we do not acquiesce to your ridiculous demands, go ahead and fie whatever motion you see fit.
22. In response, on February 5, 2007, Ms. Wolohojian wrote to me and reiterated her

demand that the Rule 56(f) Motion be withdrawn. The gist of the February 5, 2007 letter was,

essentially, to call me a liar, to miscast my disclosures of the circumstances surrounding the
Subpoena as evidence of an intentional act, and, presumably, to create a document that Defendants

could later show to this Court in an attempt to justify the filing of the Motion for Sanctions and its

request that the Court punish an innocent mistake by not allowing Plaintiff to take any discovery
whatsoever. A copy of

the Ms. Wolohojian's February 5, 2007 letter is attached to the Wolohojian

Declaration at Exhibit 6.
23. In response, on February 6, 2007, I again wrote to Ms. Wolohojian and declined to

acquiesce to the demand for withdrawal of the Rule 56(f) Motion. In so doing, I reminded Ms.
Wolohojian that the Subpoena had been withdrawn, that no documents had been produced by the

BBB and that the only information that Plaintiff had obtained that originated from the BBB Webloyalty's unsatisfactory business rating and the huge number of consumer complaints - had

been obtained, without the necessity of a subpoena, from the BBB's website. A copy of my
February 6, 2007 letter is attached to the Wolohojian Declaration at Exhibit 7.
24. In addition to my various communications with Ms. Wolohojian, I also instructed Mr.

Davidson to inform the BBB not to produce any documents in connection with the Subpoena.

Specifically, on February 1, 2007, Mr. Davidson sent counsel for the BBB a letter advising as
follows:

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As we discussed this morning, in light of an error by us, having prematurely served the subpoena on the (BBB), we are requesting that the BBB abate the production of any documents in response to the subpoena until further notice from us. We wil either resolve any issues relating to the BBB subpoena with defense counsel now, or wil address them with the Court at the appropriate time. In any event, we expect that we wil be in a position to reach out to you within the next few weeks.

A copy of Mr. Davidson's February 1, 2007 letter is attached hereto as Exhibit A.
25. Later that same day, after reviewing Ms. Wolohojian's letter, wherein she requests

that we formally withdraw the Subpoena, I instructed Mr. Davidson to send a second letter to
counsel for the BBB, advising as follows:

Further to our conversation this morning regarding the subpoena served on the (BBB) in the above-referenced action, and in light of our error and defendants' request that we withdraw the subpoena, please consider this letter as a formal
withdrawal of

the subpoena. In the event we are permitted by the Court to re-issue

and re-serve the subpoena at a later date, I will contact you or Rick Harris at the appropriate time to request that your firm accept service.
A copy ofMr. Davidson's second February 1, 2007

letter to counsel for the BBB is attached hereto

as Exhibit B.
26. As a result, and as admitted by Defendants, the BBB never produced a single

document in response to the Subpoena.
I have read the foregoing Declaration, and the statements set forth herein are, to the best of my knowledge, true and correct.

FURTHER DECLARANT SA YETH NAUGHT

Dated: this 5th day of March, 2007.

Isl David J Geolfze David J. George

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CERTIFICATE OF SERVICE
I hereby certify that on March 5, 2007, I electronically fied the foregoing document with the

Clerk of the Court using CM/ECF. I also certify that the foregoing document is being served this
day on all counsel of record or pro se parties identified on the attached Service List in the manner
specified, either via transmission of Notices of

Electronic Filing generated by CM/ECF or in some

other authorized manner for those counselor paries who are not authorized to receive electronically
Notices of

Electronic Filing.

Isl David J Georze David J. George

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Mailing Information for a Case 1:06-cv-11620-JLT
Electronic Mail Notice List
The following are those who are curently on the list to receive e-mail notices for this case.
. Stuart A. Davidson

sdavidson~lerachla w .com e _ fie _ f1~lerachlaw.com
. Andrew J. Garcia

agarcia~phillipsgarcia.com dmedeiros~philipsgarcia.com;info§phillipsgarcia.com
. David J. George

dgeorge~lerachlaw.com e _fie _ f1~lerachlaw.com
. Eric A. Lee

lee~leeamlaw .com zal1en~leeamlaw .com;leeamlawecf~gmaii.com
. Joan S. Mitrou

Joan.Mitrou~wilmerhale.com
. Carlin J Philips
cphilips~phillipsgarcia.com dmedeiros~phil ipsgarcia.com;info~phillipsgarcia.com

. John J. Regan

john.regan~wilmerhale.com
. Gabrielle R. Wolohojian

gabrielle. wolohoj ianêwilmerhale. com

Manual Notice List
The following is the list of attorneys who are not on the list to receive e-mail notices for this case (who therefore require manual noticing). You may wish to use your mouse to select and copy this list into your word processing program in order to create notices or labels for these recipients.
Co Nichole Gifford Rothwell, Figg, Ernst & Manbeck, P. C. Suite 800 1425 K Street, NoW. Washington, DC 20005
Michael L. Greenwald Lerach Coughlin Stoia Geller Rudman & Robbins LLP
Sui te 500

120 E. Palmetto Park Road Boca Raton, FL 33432
Steven Lieberman Rothwell, Figg, Ernst & Manbeck 1425 K Street, NoW. Suite 800 Washington, DC 20005

Anne Mo Sterba

Case 1:07-md-01820-JLT
Rothwell, Figg, Ernst & Manbeck
1425 K Street, N. W 0

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Suite 800 Washington, DC 20005