In a major development in the bitter court fight over the founding of the Huffington Post, a New York judge has for the second time refused the request of media moguls Arianna Huffington and Ken Lerer to dismiss the case. The new ruling also expands the scope of the case to include claims of fraud and unjust enrichment. – Judge allows case over HuffPo ownership to go forward, adds fraud claim
NEW YORK Supreme Court Judge Charles Ramos refused for the second time to throw out the case against Huffington Post new media honchos Arianna Huffington and Ken Lerer brought by Peter Daou and James Boyce. What has turned into raging court battle has now gotten even more interesting and potentially damaging for HuffPost, with a blockbuster development, because the judge has allowed “fraud and unjust enrichment” to be added to the case.
To refresh what’s happened, in 2011 Peter Daou and James Boyce filed a lawsuit alleging that they’d presented the idea for the site that became Huffington Post in 2004. It’s based on their assertion that Arianna Huffington and Ken Lerer subsequently cut them both out of the deal, then launched Huffington Post as their own idea the next year, in 2005.
Supreme Court Judge Charles Ramos threw out 7 or 8 claims in 2011, but sustained one, “idea misappropriation.”
Daou and Boyce subsequently filed an amended complaint, with the latest development adding fraud and unjust enrichment to the case, with New York Supreme Court Judge Charles Ramos’s letter stating bluntly that Daou and Boyce have “adequately alleged,” among other things, that Arianna Huffington and Ken Lerer “stole the idea and developed it with another person.”
“Plaintiffs have adequately alleged that defendants took the information that plaintiffs provided, secretly shared it with another person, camouflaged the origin to make it appear as it came from that other person and, in effect, stole the idea and developed it with that other person,” Ramos wrote in letting Daou and Boyce go forward with the fraud claim.
This is stunning in implication, though the case is not won by any means. However, it is the second time the judge refused to dismiss the case, but this time also decided that Daou and Boyce had proved further allegations enough to expand the current complaint.
Huffington Post released a statement on the ruling, which is below, as is the ruling itself.
“The court has made only a preliminary decision based solely on the uncontradicted allegations of the complaint and without any consideration of the proven facts,” a Huffington Post spokeswoman said. “As we have said from day 1, there is no merit to these allegations. They are make believe. With this ruling, we will now be able to move for summary judgment and lay out the actual evidence in this case. We look forward to the opportunity to present the full record to the court.”
TM NOTE: I am former Huffington Post contributor, with my pieces regularly featured on the front page and the politics page until AOL purchased the site and I chose to no longer write for the site. Peter Daou is a colleague of mine of many years. James Boyce and I worked together on former Senator John Kerry’s Patriot Project and Boyce has also cross-posted “Journey” posts on this site.