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Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by grellas on Wednesday May 08, 2013 @07:20PM (#5677731)
The key to understanding this lawsuit lies in a technical point having nothing to do with the merits of the claims and which appears at pages 35 through 37 of the complaint.

In that section, the plaintiff, Think Computer Corporation, "respectfully requests that Civil Local Rule 3-9(b) be retired, or that Plaintiff be exempted from the Rule given its particular ownership [i.e., owned 100% by one individual] and tax structure [i.e., status as a Sub S corporation]."

The Civil Local Rules are the rules used by the federal court in the Northern District of California to regulate its proceedings procedurally, specifying who needs to do what in connection with the filing and prosecution of lawsuits in this court. These rules have the force of law and litigants who ignore them do so at their peril.

Rule 3-9(b), which the plaintiff asks be "retired," states that a "corporation . . . or other such entity may appear only through a member of the bar of this Court."

In other words, a corporation cannot represent itself in a lawsuit of this type and Think Computer Corporation has filed this action without an attorney representing it while purporting to represent itself in obvious violation of this rule.

A few comments about what I think this signifies:

1. The plaintiff's principal is a spirited individual who has very definite ideas about the money transmission laws and who feels highly aggrieved by the impact that California's 2010 law has had on his company.

2. Those ideas about these laws are, in my view, quirky ones that take significant liberties in interpreting how laws work. In other words, without detailing particulars, I believe that Mr. Greenspan's views of these laws will likely not hold up when tested formally in a court of law.

3. Point 2 above, coupled with the complaint's wild swinging out at multiple parties on dubious theories of liability, is the most probable explanation of why there is no lawyer representing the plaintiff in this action.

4. To sue investors basically for having chosen to fund high-profile startups that the plaintiff deems "unlicensed money service businesses" is flaky and will never hold up. If the action is not bounced for violation of Rule 3-9(b), it will be out the gate as to these defendants on grounds that it does not state a cognizable claim for legal relief.

5. To sue the startups themselves for allegedly providing unlicensed money services is also quite dubious. The money transmitter laws are basically laws that give state governments the authority to require that bonds be provided, that minimum capitalization requirements be met, and that other precautions taken, to ensure that whoever handles escrowed monies takes prudent steps to protect those whose funds are entrusted to them. If these laws are violated, the state authorities have the power to take legal actions to enforce them. Nowhere is there any express private right of action that gives any private citizen the right to file suit complaining about alleged violations of these laws. Therefore, it is a stretch for any private party such as Think Computer to seek damages, injunctive relief, or any other form of legal remedy owing to alleged violations of the money transmitter laws.

6. There are conceivably some legal remedies that might work if the facts support them, one of them being for false advertising claims under the Lanham Act (which is one of the claims asserted here). One competitor can indeed sue another competitor for private damages and other relief if the other competitor is gaining an unfair competitive advantage by falsely advertising that its products or services do something that is material to the customer's decision to use that product or service. Here, the result would turn on the ability to show that the parties sued are in fact engaged in false or deceptive advertising. Even here, however, the case is likely sketchy, in my view, from a quick review of the allegations made.

All in all, this is a most unusual case filed by an unrepresented party that cannot legally represent itself in the forum chosen and resting on legal theories that are a real stretch in most cases. I believe Mr. Greenspan is both sincere and passionate about what he believes but what he asserts is really a case to be made to the legislative policy-makers, not to the courts. There may indeed be incredible unfairness in the way in which these laws are framed and applied. But that does not mean a private party should be able to indiscriminately sue anyone around who happens to be offering services that involve some form of money handling, or their investors, for the results of the existing system. That in itself in not only a stretch but an abuse. Wrong parties, wrong framing. The action should therefore be dismissed forthwith by the plaintiff as having been ill-considered. If it is not, it will be dismissed by the court in fairly short order.

Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by rayiner on Wednesday May 08, 2013 @08:01PM (#5677951)
The complaint read more like a screed about everything that's wrong with America than a sincere attempt at obtaining relief.

That said, I'm a little bit sympathetic to the Rule 3-9(b) thing in this context. Even if he was serious, who would take the plaintiff's side of this case on contingency?

As an aside, I think Aaron would make a great plaintiff's lawyer. Combative, self-righteous, with a ton of "burn things down" energy. This is not a negative aspersion on his character--I think it's quite admirable in a way...

Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by will_brown on Wednesday May 08, 2013 @11:44PM (#5678679)
>Even if he was serious, who would take the plaintiff's side of this case on contingency?

I know I would take this case on contingency if the Plaintiff would agree to Amend the Complaint to Qui Tam. I could not just do it though, I would have to be admitted Pro Hac Vice. I imagine any other Plaintiff's attorney with experience in Qui Tam cases is thinking the same thing.

Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by redthrowaway on Wednesday May 08, 2013 @07:52PM (#5677895)
Excellent analysis as always, thanks. I was going to facetiously suggest you start billing HN for your services, but I then thought it might be an idea for you to throw a bitcoin address in your profile in case someone feels like sending you a tip.
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by tptacek on Wednesday May 08, 2013 @08:17PM (#5678010)
It's funny, I was thinking literally the exact same thing. I just put some money onto Watsi, and I think I'll keep doing that every time we get 'grellas top-post.
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by pg on Wednesday May 08, 2013 @10:17PM (#5678395)
Or startups could just hire him as their lawyer. Parse did and they are happy customers.
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by carbocation on Thursday May 09, 2013 @12:39AM (#5678864)
I did as well, and I found Grellas and his team to be fantastic to work with. I probably owe it to him to submit a more thoughtful, in-depth write-up.
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by tptacek on Wednesday May 08, 2013 @11:05PM (#5678555)
Those of us now shackled to a different team of lawyers will have to make due with tokens of our appreciation. :)
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by redthrowaway on Wednesday May 08, 2013 @10:57PM (#5678521)
The point of non-mandatory tipping though is that it feels good for both the sender and the receiver. It gives the sender the warm fuzzies for giving even a trivial amount, and the receiver gets a concrete demonstration that their efforts are appreciated. Hiring someone to do a job certainly pays better, but its transactional nature negates the mutual emotional benefit of a token of appreciation freely given.
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by larrys on Wednesday May 08, 2013 @11:57PM (#5678728)
I don't have the reference (or a link) but I remember pretty clearly that (might have been Cialdini or similar) a principal where attorneys would do for free what they wouldn't do for, say, $50 per hour.

As an example I serve on the board of a condo and I'm paid $0. Most likely if I was told I would be given $25 for every meeting I would think "my time is worth more than that" and it would actually be a negative (figures arbitrary.)

Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by redthrowaway on Thursday May 09, 2013 @12:15AM (#5678789)
As soon as you bring compensation into the equation, people measure it against what they expect they should be compensated.

I saw a thread on reddit earlier discussing Dennis Rodman's entreaty for Kim Jong Un to "do him a solid" and release the American who was arrested for photographing homeless children in North Korea. One of the commenters argued that this actually could work, due to the Korean principle of "Jeong", or helping out friends simply for the sake of helping. An appeal to Kim's rational best interests would be measured against his own appraisal thereof, but a personal request from a friendly acquaintance doesn't carry with it that baggage of zero-sum gamesmanship, and so is more likely to be heeded. It was an interesting argument, and I certainly don't think the concept is limited to Koreans.

Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by larrys on Thursday May 09, 2013 @10:46AM (#5680678)
""do him a solid""

"or helping out friends simply for the sake of helping"

To expand on this and bring in the theory of reciprocity to the discussion. By doing the solid for Rodman, Kim Jong Un gets access also to something money or power can't buy that he may want going forward (other american basketball players).

But here's an interesting thing that I have learned over time about doing "solids" for people. You have to cash in the solid rather quickly in general. That small thing [1] that you helped someone out with 10 years ago isn't as likely to get you a return favor as something you did two weeks ago.

I'm trying right now to get something that <large co you've heard of and most certainly use> controls that money can't buy because they don't need money. So I'm working another angle whereby I try to find something that someone else needs that has some influence over them to get them to give me what I want in exchange for the favor that the party that has the influence wants. I suspect that when Bill Clinton tried to get Led Zepelin to play the concert he might have succeeded if there was something that the group needed that he could help out with. (Say theoretically an issue that access to key legislators could help with.)

http://www.nypost.com/p/news/local/bill_failed_zep_lomacy_ow...

[1] Meaning you didn't save someone's life I'm not sure how this would apply to Rodman and hostages it's all a matter of situation and degree.

Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by tzs on Thursday May 09, 2013 @03:14AM (#5679200)
> The point of non-mandatory tipping though is that it feels good for both the sender and the receiver. It gives the sender the warm fuzzies for giving even a trivial amount, and the receiver gets a concrete demonstration that their efforts are appreciated.

Note, though, that for tipping systems where the tip is not cash or something reasonably equivalent to cash, the receiver might find the tip annoying.

For instance, I would overall be unhappy if someone on Reddit gave me Reddit Gold. Sure, I'd be flattered that they liked my comment enough to want to reward me, but I've looked at Gold and did not really see anything in it that I was interested in. I'd certainly get much less out of Gold than the giver thought I'd get, and I'd end up feeling that I had just wasted their gift, and I'd feel bad. I actually wish Reddit had an option one could set to disable the ability of one's account to be given Gold.

Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by ralphleon on Wednesday May 08, 2013 @11:08PM (#5678568)
PlanGrid did as well! Highly recommended.
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by andrewljohnson on Thursday May 09, 2013 @12:41AM (#5678869)
Grellas has been our lawyer since 2008, we also highly recommend.
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by argumentum on Monday May 13, 2013 @06:11AM (#5697947)
Same here!
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by homosaur on Wednesday May 08, 2013 @09:07PM (#5678186)
I'd throw in .01 or .02 BTC (what are we to call these, Bitcents?) for that, I tried to read the complaint but simply don't know enough about law, especially CA law, to interpret this until I read his comment. HN's greatest attribute is the wealth of experts in different fields that are here to help elucidate these complicated things for we the confused.
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by TheAntipodean on Wednesday May 08, 2013 @09:25PM (#5678239)
I believe the preferred naming for 0.01 BTC is a Satoshi [1]. They were named such to honour the author of the original paper.

[1] Third sentence: http://en.wikipedia.org/wiki/Bitcoin

Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by tetrad on Wednesday May 08, 2013 @09:40PM (#5678279)
0.01 BTC is in fact a bitcent, and a Satoshi is much smaller (0.00000001 BTC)

https://en.bitcoin.it/wiki/FAQ#What_do_I_call_the_various_de...

Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by TheAntipodean on Thursday May 09, 2013 @02:54AM (#5679148)
Thank you for clarifying that. My mistake!

Round two!

Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by redthrowaway on Wednesday May 08, 2013 @11:00PM (#5678536)
A Satoshi is defined as 10 ^ -8 BTC. Actually, it's more accurate to say that a Bitcoin is defined as 10^8 Satoshis, as the Satoshi is the actual atomic unit of exchange.
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by TheAntipodean on Thursday May 09, 2013 @02:53AM (#5679146)
Ahh thank you for clarifying that. My mistake.
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by anateus on Wednesday May 08, 2013 @09:32PM (#5678261)
The sidebar on the right mentions that a Satoshi is actually 0.00000001 BTC
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by TheAntipodean on Thursday May 09, 2013 @02:54AM (#5679150)
Thank you. Round 3 =]
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by greatreorx on Wednesday May 08, 2013 @09:17PM (#5678215)
> Nowhere is there any express private right of action that gives any private citizen the right to file suit complaining about alleged violations of these laws.

I thought California 17200 allows for private citizens to sue on behalf of the general public and that no actual injury against the plaintiff is required. Is there something different about this case?

(below quote and link for other HN readers, I'm sure grellas is familiar.)

"Thus the statutory language allowing actions to be brought "by any person acting for the interests of itself, its members or the general public" effectively deputizes the world to find and bring environmental violators to the bar of justice."

http://www.envirolaw.org/Library/17200tools.html

Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by tzs on Thursday May 09, 2013 @02:52AM (#5679140)
The page you link to at envirolaw.org is out of date by almost a decade. It is discussing the law as it was before Proposition 64. Proposition 64, which passed in 2004, among other things changed the part of section 17204 which said "any person acting for the interests of itself, its members or the general public" to "a person who has suffered injury in fact and has lost money or property as a result of the unfair competition".
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by MWil on Wednesday May 08, 2013 @09:19PM (#5678225)
that's what I just posted, it sounds more like a qui tam like action except he should be convincing the state/govt to act
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by kodablah on Wednesday May 08, 2013 @07:32PM (#5677792)
Is there any avenue for a company who might see themselves as a victim of their competition ignoring/abusing laws for a competitive advantage?
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by tzs on Wednesday May 08, 2013 @07:50PM (#5677884)
In this case, I don't think we even reach that question. When Greenspan's business did not obtain the appropriate license, it left the money transmission business, making it hard for me to understand how the remaining money transmission businesses (assuming that they actually are money transmitters) are his competition.
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by kodablah on Wednesday May 08, 2013 @07:57PM (#5677930)
Maybe not presently, but my takeaway is that he accuses his would-be competition (and those funding them) of not following the law. I am not familiar with the law enough to know whether you can play the well-they-don't-have-to card.

But my question still stands, is there any recourse for a company who believes it is held to a double standard with regards to direct competitors?

Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by tzs on Thursday May 09, 2013 @02:56AM (#5679154)
I believe such a company could sue for unfair competition in California (but talk to an actual lawyer before acting on this belief--I am not a lawyer). The key is that it has to have actually been injured by the action of the competitors.
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by caf on Wednesday May 08, 2013 @09:27PM (#5678244)
They might be able to seek a writ of mandamus compelling the appropriate authority to enforce the law.
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by mkbrody on Wednesday May 08, 2013 @07:35PM (#5677808)
Great synopsis. However, maybe this is more of a publicity stunt? He probably knows the case isn't going to work out in his favor, but perhaps he thinks the headlines will.
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by chc on Wednesday May 08, 2013 @08:56PM (#5678148)
Aaron has been banging on about this for a long time — you can check his posting history here if you doubt his integrity. I think he really does sincerely believe these companies are doing something against the rules and hopes to get a ruling on the matter, either forcing them to follow the rules or creating an explicit exemption that Aaron can use for his own company.
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by thaumaturgy on Wednesday May 08, 2013 @10:17PM (#5678393)
Aaron's concern over the law has been dismissed out-of-hand over and over again on forums like HN. It must be maddening to build a successful business, then have a new law come up that regulates your business out of its market, and then see other people build businesses that should be subject to the same regulation but aren't because the law isn't being enforced fairly.

I'd expect that his position at this point is that he wants other people to care about this as much as he does, and if they won't, then he'll do his level best to force them to care about it.

I'm concerned about Aaron though. I like the guy, inasmuch as I can like anyone I've never met, and I worry that he's going to put himself into an unrecoverable position fighting this fight -- that it will ruin him financially, or worse still, harm his mental or physical health.

It's a terrible damn situation. It unfortunately is probably also unwinnable. That's totally unfair to Aaron, but sometimes life's like that. You have to know when to fight and when to fall back. In his place, if I could, I'd probably give everybody the finger and move to another country and restart operations there.

Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by lettergram on Wednesday May 08, 2013 @08:32PM (#5678068)
I think your explanation is excellent, however I disagree on one point:

"I believe Mr. Greenspan is both sincere and passionate about what he believes but what he asserts is really a case to be made to the legislative policy-makers, not to the courts."

The courts are the place where any man should/can make a difference in the country. For example, I can bring forth a lawsuit to fix something I think is wrong and if my claim is justified the justice system can over rule a governor, state house/senate, or if it makes it federal the President. Also I am pretty sure you can not sue a policy maker so this may be his only option.

Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by mpyne on Wednesday May 08, 2013 @09:15PM (#5678213)
He wouldn't be saying to sue the policymakers, he's be saying to have the policymakers change the policy.

But with that in mind my understanding of the courts is that they try to stay away from "judicial activism", and if they can't do that they try to limit it to tearing down bad laws instead of forming up new ones, as would have to be done here to find the defendants liable.

Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by mjcohen on Wednesday May 08, 2013 @09:20PM (#5678227)
Except for the current supreme court.
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by nostrademons on Wednesday May 08, 2013 @09:48PM (#5678307)
...and the one before that, and the one before that, and so on back to Marbury vs. Madison.
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by sillysaurus on Wednesday May 08, 2013 @07:31PM (#5677783)
Do you think this action has any chance of any positive outcome? I.e. is there realistically any way this could produce any positive benefit for Mr. Greenspan whatsoever?
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by thwest on Wednesday May 08, 2013 @10:16PM (#5678390)
>>> If these laws are violated, the state authorities have the power to take legal actions to enforce them. Nowhere is there any express private right of action that gives any private citizen the right to file suit complaining about alleged violations of these laws.

What? Why is this the case? Is this the same reason why citizens/competitors/the Sierra Club can not sue BP or Massey Energy for pollution or workplace safety violations? (If 50% of the damages came out of the EPA/OSHA chief regulator's salary I would get behind these suits.) Is there a distinction here between suing the violators than suing the government? Civil suits are for more than contract enforcement, right? What are the general legal terms I should be searching with to learn more?

Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by berberous on Wednesday May 08, 2013 @10:30PM (#5678430)
You can start off with "cause of action" and "standing".
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by personalcompute on Wednesday May 08, 2013 @09:42PM (#5678286)
Strong corroboration from the source for your first point: http://www.aarongreenspan.com/writing/essay.html?id=60
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by larrys on Thursday May 09, 2013 @12:01AM (#5678739)
"a corporation cannot represent itself in a lawsuit of this type"

Had that happen a few years ago in a different state. Cost us about $2000 in legal fees and the case was dismissed.

Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by MWil on Wednesday May 08, 2013 @09:18PM (#5678221)
Qui tam? but that would be more like he was convincing the govt to take up a criminal case and not "I was personally damaged here and here's why I deserve relief"
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by will_brown on Wednesday May 08, 2013 @11:37PM (#5678655)
My first though was this appears to be Pro Se. When that was confirmed I thought this guy needs an attorney because he is in way over his head. Finally, I thought a smart attorney could amend this Complaint to be a Qui Tam and actually give the Defendants cause for concern.
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by MWil on Wednesday May 08, 2013 @09:18PM (#5678222)
but then (and I only got through a bit of the reading) he could have just come out and said that...
Re:Aaron Greenspan sues Facebook, Sequoia, Andreesen, YC, ot... by joewee on Thursday May 09, 2013 @05:08AM (#5679453)
Wow, thanks for the breakdown!

Do you represent any of the parties named in this? I think the answer is obvious, but thought I should ask anyway.