Litigators of the Week: This Kirkland & Ellis Trio Won’t Let Charter Communications Misconduct-Happy Litigation Opponent Off the Hook
The Am Law Litigation Daily named Kirkland partners Judson Brown, Thomas Weir and Paul Weeks as "Litigators of the Week," and discussed their win for client Charter Communications in a case against Optymyze.
Rarely do you argue that your opponent shouldn’t be allowed to drop their claims.
Then again, rarely, at least, hopefully rarely do you run into a litigation opponent that openly defies court orders, is found to have tampered with chat messages to try to hide that fact, and who tries to drop counterclaims without prejudice rather than face a hearing on the issue of whether false statements in those counterclaims warrant dismissal with prejudice.
Those were the wild circumstances facing a Kirkland & Ellis team led by Judson Brown, Thomas Weir and Paul Weeks and their client Charter Communications in a case against Optymyze, a company controlled by Mark Stifler that provides the cloud-based platform that Charter uses to its calculate commission-based compensation for thousands of its employees and vendors.
Vice Chancellor Travis Laster on Monday refused Optymyze’s dismissal-without-prejudice gambit. “The unrebutted record evidence clearly and convincingly establishes that Optymyze and Stiffler have engaged in misconduct that is egregious enough to warrant dismissal of Optymyze’s counterclaims under Rule 41(b),” he wrote, dismissing their counterclaims with prejudice. The ruling also put Optymyze on the hook for Kirkland’s fees for fending off the counterclaims.
Lit Daily: Who is your client and what was at stake here?
Judson Brown: Our client is Charter Communications. Over two years ago Optymyze threatened to terminate Charter’s access to cloud-based services used to calculate and make commission payments to thousands of Charter employees. We mitigated that threat with a TRO in December 2018. But Optymyze concocted creative ways to disregard the order and engaged in a months-long effort to impact services and interfere with Charter’s business. While the client managed the disruption to minimize the business impact as much as possible, we pursued relief in the court. We filed multiple motions to enforce the TRO – which were granted, with sanctions—and ultimately had to prevail on a motion for contempt against Optymyze and its founder in order to bring some stability to the situation.
Tom Weir: Once it became clear that Optymyze’s efforts to evade the TRO were not going to work, it shifted gears and brought counterclaims against Charter seeking substantial fees for alleged overuse of the services. Optymyze’s counterclaims were premised on allegations that were belied by Optymyze’s internal documents, which we obtained in discovery during the TRO-related proceedings. We moved to dismiss those counterclaims, arguing Optymyze and its founder knowingly made false allegations to the court. The court’s decision this week affirmed our position and dismissed Optymyze’s counterclaims with prejudice.
How, might I ask, did this case end up at the point where you were arguing against allowing the court to dismiss your opponent’s counterclaims?
Paul Weeks: We actually weren’t opposed to dismissal of the counterclaims, but we were opposed to Optymyze’s attempt to dismiss its claims without prejudice. This had been a bitter fight for nearly two years and had consumed significant party and judicial resources. Along the way, the court acknowledged the evidence we amassed—including numerous Optymyze internal documents—was clear and convincing, but gave Optymyze a chance to present its side of the story at an evidentiary hearing, following further discovery. From there, the facts only got worse for Optymyze, as we uncovered blatant, extensive spoliation by Optymyze and its founder, and Optymyze sought to avoid depositions altogether. Reading the writing on the wall, Optymyze tried to dismiss its counterclaims without prejudice, but we wanted a dismissal on the merits to avoid Optymyze filing its claims anew in an action that was not tainted by its extreme misconduct.
Who all is on your team and how have you divvied up the work?
Brown: We had a tremendous team all around. In addition to the three of us, Kristen Bokhan, Katherine Canning, and Abby Hollenstein played invaluable roles. And John DiTomo and Dan Menken of Morris, Nichols, Arsht & Tunnell LLP were integral members of the team throughout the saga, helping us navigate Delaware practice as we were often in uncharted waters. As with all good successes, this was definitely a team effort across the board. The first four months were punctuated by numerous emergency filings precipitated by Optymyze’s misconduct. Those were always all-hands-on-deck efforts to pull together filings and evidence to reveal Optymyze’s latest gambit. And later in the case, after the court gave Optymyze an opportunity to salvage its claims, our industrious associates pieced together a spoliation story that was nearly unfathomable. Through incredible sleuthing, they cobbled together compelling evidence that Optymyze and its founder may have altered and deleted documents concerning their ongoing misconduct. The full team then worked to develop and execute a strategy to prove—through discovery of native files and expert testimony—this extensive spoliation.
Vice Chancellor Laster highlights what he calls “severe and pervasive misconduct” by your opponent in the case. What stands out most to you from that list?
Weir: It’s difficult to pick just one, as the misconduct here was truly egregious. Perhaps the worst was when Optymyze and its founder shut off Charter’s access to Optymyze services, well after the TRO had been entered. Less than four hours after a hearing where the court found Optymyze had intentionally violated the TRO for the second time in two months, Optymyze shut off Charter’s access to the platform. The shutdown was bad enough, and the client had to manage the disruption through the herculean efforts of its internal team. Optymyze and its founder only compounded their misconduct by falsely telling the court that they took the system down temporarily to address problems that Charter had caused. As discovery revealed, Optymyze’s founder had gloated, internally and externally, that he ordered the shutdown to deliberately thumb his nose at the Court and try to extort a lucrative payment from Charter.
Weeks: A standout moment, for me, was when Optymyze’s founder and CEO abruptly ended his deposition, never to return. It was one of the last major events in the litigation. The entire purpose was to give him an opportunity to explain his misconduct and save Optymyze’s counterclaims. But it took multiple motions and the court’s involvement just to arrange the deposition. We conducted it remotely, with the witness in London and our team in the United States. After two and a half hours, he walked off camera unannounced, returned after 20 minutes to say he could not continue that day but agreed to come back the next morning, and then never returned.
What can litigants who are pursuing a case centered around injunctive relief take from your experience here?
Weir: I would hope that other litigants won’t have to deal with an adversary like ours who has been intent on violating court orders, repeatedly. But as this case proves, you cannot give up and must continue pushing forward with faith in the judicial process. There were many times where it was unclear what more we could do when the other side was willing to thwart the injunction without regard to the consequences. Optymyze thought it could simply disregard the court’s jurisdiction with corporate shell games and more shenanigans. Rather than throw up our hands, we dug in and used creative litigation approaches to force compliance.
Weeks: Developing relationships with the impacted personnel at the client is critical to telling the story, particularly to support the injunctive relief we obtained here. We had a great working relationship with the individuals at Charter who relied on these services every day. Their support allowed us to demonstrate to the court why it was so important to maintain access to these services in spite of Optymyze’s efforts to interfere with the business.
What can they learn about dealing with an opponent who continually defies court orders?
Brown: We were blessed to have a client that was unwilling to concede when Optymyze continued to try to impact their business despite the court’s orders. That mindset was critical. The other advantage we had was a consistent team with a deep understanding of the facts and history of the case. Optymyze changed counsel numerous times during the litigation and often found themselves taking positions at odds with those they had taken previously. Our continued ability to highlight those inconsistencies for the court worked to our advantage throughout.
What remains pending in this case?
Weeks: We are still assessing our options, but we have pending declaratory judgment and damages claims against Optymyze, in addition to quantifying the latest sanctions and fee awards.
What will you remember most about this particular chapter?
Brown: Our team’s discovery that Optymyze’s founder and CEO had personally altered hundreds of internal messages prior to their production in an attempt to hide his misconduct and diminish his central role in orchestrating Optymyze’s nefarious strategy. It started with some exemplary fact-development work by our associates who followed a lead on some documents that seemed fishy. From there, the entire team came together to develop that story and use it to our best advantage.
Weir: The final briefing that led to the court’s recent order dismissing Optymyze’s claims with prejudice stands out to me. On a tight timeframe, our team thoroughly distilled the saga of the previous two years—a story that is hard to believe. I was impressed by and proud of our team’s ability to quickly compile a massive, high-quality brief, which helped achieve the result we wanted.
Weeks: I will remember our team’s relentless efforts in the early days of the litigation to put a stop to all of the games occurring despite the court’s order. It really was a game of whack-a-mole: each time we stamped out one, another seemed to pop up. Every time, we developed the necessary facts quickly and told the story effectively. That work eventually allowed us to bring some stability to the situation.