Tuesday, January 22, 2002
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Cooley Godward Hit by MP3.com Legal Malpractice Suit
By a MetNews Staff Writer
MP3.com has sued the law firm of Cooley Godward for malpractice, alleging that poor legal advice and representation by the firm resulted in the company paying more than $175 million in judgments resulting from copyright infringement lawsuits.
In a complaint filed in Los Angeles Superior Court Friday, MP3 alleges that Cooley incorrectly told the Internet music provider it had a viable legal defense to copyright infringement lawsuits, and that the law firm refused to testify about the advice in court, preventing a defense that could have protected MP3 from liability.
Attorney Allan Browne of the Beverly Hills law firm of Browne & Woods, who represents MP3 in the suit, said the Cooley firm grossly mishandled the case.
“Consumers and small businesses have a right to expect their professional advisors, particularly their lawyers, to correctly guide them from running afoul of the law as investments and businesses are being built,” Browne said. “Cooley’s legal advice sadly fell well below what the standard of care advises.”
The complaint alleges that MP3 sought legal advice from Cooley, a firm that focuses its practice on intellectual property law, on the lawfulness of the company prior to its launch January 2000.
Later that month, MP3 was sued by Universal Music Group for copyright infringement and Cooley represented the company at trial. A U.S. district judge found the company liable for willful copyright infringement in April 2000, and in November of the same year MP3 paid the plaintiff $53.4 million.
Several derivative and class action lawsuits were filed against MP3, for which Cooley no longer provided representation, and MP3 was ordered to pay judgments resulting from all lawsuits totaling over $175 million, according to the suit.
The lawsuit seeks recovery of the lost money as well as punitive damages.
Mark Pitchford, chief operating officer for Cooley Godward, declined comment on specific allegations mentioned in the lawsuit, but said he would the provide the comment he was giving all news agencies.
“We don’t believe the claims [comport] with the facts,” Pitchford said. “The claims are frivolous and we will aggressively defend [the suit].”
The allegations revolve around the My.MP3.com service that allowed users to listen to songs they already owned on their computers without manually uploading the songs from their own hard copies.
MP3 alleges that Cooley attorney Michael Rhodes, of the San Diego office, falsely represented that the firm had secured expert opinion testimony that there were “strong and viable defenses to any legal action challenging the My.MP3.com service as an infringing use under federal copyright law.”
MP3 further alleges that Rhodes failed to advise them that the firm would not provide an advise of counsel defense. In copyright actions, there is a difference if a person infringes copyright law in good faith, Browne said.
MP3 could have avoided the willful infringement finding by the judge in the UMG case, if Rhodes or another Cooley attorney would have taken the stand and told the court the firm advised MP3 to act as it did, Browne said.
“Had MP3 known that Cooley would shrink from testifying to the advice previously given and upon which MP3 relied in launching its My.MP3.com service, MP3 would not have made said launch in the manner it did,” the complaint reads.
Browne added that this is the largest malpractice case in California he has ever seen or heard of in his 30 plus years of experience as a litigator in the state.
MP3’s board of directors includes the CEOs of Gateway Computers, Electronic Arts and Cox Broadcasting, Browne said, adding:
“Now why would they do anything to besmirch their reputation or put themselves in economic jeopardy unless they had some assurance this would be a winner?
“Let’s face it, Cooley blew it,” he said. “They absolutely blew it.”
Copyright 2002, Metropolitan News Company