FILED |
eat se
Superior Court of California DEC.12 2023
David W. Say, Excuie OfeUCirkct Cut
County of Los Angeles iy A Gonaasen, Deputy
Department 61
DAVID CARDE, Case No.: 22STCVO7817
Plaintiff Hearing Date: November 30, 2023
v, Heaney BoTING RE:
ENDEAVOR GROUP HOLDINGS, INC., et [DEFENDANN ENDEAVOR GROUP
HOLDINGS, INC.’$ MOTION FOR
al, SUMMARY JUDGMENT.
Defendants.
EFENDANT ENDEAVOR GROUP
(OLDINGS, INC.’S MOTION TO SEAL,
Defendant Endeavor Group Holdings, Inc.’s Motion for Summary Judgment is GRANTED.
Defendant Endeavor Group Holdings, Inc.’s Motion to Seal is GRANTED.
Defendant to give notice.
I. OBJECTIONS
Defendant Endeavor Group Holdings, Ine. (Defendant) objects to various portions of the
declaration of Plaintiff David Carde (Plaintiff submitted in opposition to the present motion for
summary judgment. Objections No. 3, 6, 16, 18, 22, 37-39, 45, 46-57, 61, 64, 82, 84, 89, 92, 98,
117, are SUSTAINED, as Plaintiff purports to offer expert testimony on matters for which has
shown no qualification to opine.
(@) A person is qualified to testify as an expert if he has special knowledge, skill,
experience, training, or education sufficient to qualify him as an expert on the
subject to which his testimony relates. Against the objection of a party, such special
knowledge, skill, experience, training, or education must be shown before the
witness may testify as an expert
(b) A witness’ special knowledge, skill, experience, training, or education may be
shown by any otherwise admissible evidence, including his own testimony.
'¥ (Evid. Code 720.)
s 10[Thhe qualifications of an expert must be related to the particular subject upon
which he is giving expert testimony. Consequently, the field of expertise must be
carefully distinguished and limited, and qualifications on related subject matter are
insufficient
‘The foundation required to establish the expert's qualifications is a showing that the
expert has the requisite knowledge of, or was familiar with, or was involved in a
sufficient number of transactions involving the subject matter of the opinion,
Whether a person qualifies as an expert in a particular case depends upon the facts
of the case and the witness's qualifications. The determinative issue in each case is
whether the witness has sufficient skill or experience in the field so his testimony
would be likely to assist the jury in the search for truth.
(Howard Entertainment, Inc. v. Kudrow (2012) 208 Cal.App.4th 1102, 1115, internal quotation:
alterations, and citations omitted.)
Plaintiff does not identify his particular area of expertise, but his testimony under the heading of
“Expert Qualifications” is as follows. He has “cognitive abilities” which enable him “to see
patterns amongst noise in data that others do not see.” (Carde Decl. 3.) Plaintiff “accumulated a
multi-decade deep dive into patterns in the entertainment industry.” (Carde Decl, 7.) At an
“early age,” Plaintiff watched movies with his grandfather and read Variety and The Hollywood ,
Reporter. (Carde Decl. 4 8.) He is an “autodidact” who taught himself finance. (Carde Decl. § 9.)
At an unspecified date he obtained a job as “special advisor to the CEO” at an unspecified studio
after meeting the CEO in a parking lot. (Carde Decl. § 9.) Nine months before the release of the
film Out of the Furnace in 2013, he expressed concerns about its “potentially disastrous” release
in an email. (Carde Decl. 4 11.) At this studio, Plaintiff worked on “various challenged projects,”
and witnessed the rise of concerns within the entertainment industry about the threat of
technology companies, such as YouTube. (Carde Decl. § 12.) Also in 2013, he advised against
the company licensing its content to Netflix for an up-front fee. (Carde Decl. § 13!) Plaintiff has
thought a great deal about “network effects,” and has read George Gilder’s book, Life After
Television. (Carde §§ 14-17.)
In Howard Entertainment, it was held that the trial court had abused its discretion in not
permitting a witness, Bauer, to testify as an expert on personal manager contracts, when the
following summary described his qualifications:
Bauer has been in the entertainment industry from 1974 through the present as an
executive in business affairs, talent agent, and personal manager. He has obtained
employment for actors, directors, writers, and producers. He was president of a
prominent talent agency. He has discussed extensively entertainment matters with
Persons in the entertainment business. He represented as a talent agent actors who
were represented by personal managers. He was familiar with specific instances
concerning the payment of personal managers **166 after termination of their
representation. He discussed the matter with attorneys at a prominent entertainment
law firm, He personally was a party to agreements like the one in issue here.
u(Howard Entertainment, supra, 208 Cal.App.4" at p. 1116.)
Plaintiff's testimony is not like that described in Howard Entertainment, and he has not
established, in the face of Defendant's objections, his qualifications to testify as an expert
conceming either “network effects” or customs and practices in the entertainment industry
related to idea submissions. Plaintiff does not identify the particular subject to which his
expertise pertains, identifies no credentials related to any such subject, and offers only a broad
description of his experience devoid of specific duties, employers, transactions, or dates. Plaintiff
offers only that he was a special assistant to a CEO for an uncertain duration, during which time
he predicted the failure of one movie and the threat posed by Netflix to entertainment companies
He does not demonstrate special knowledge, skill, experience, training, or education sufficient to
qualify him as an expert on the subject to which his testimony relates, except insofar as the
‘matters he identifies informed his decision to write and deliver the analysis that is the subject of
this litigation,
Defendant's Objections No. 19-21 and 115-116 are also SUSTAINED, as Plaintiff offers no
foundation in personal knowledge for the qualifications or knowledge of Michael Giordano.
Plaintiff also offers no foundation for his testimony, save hearsay, concerning the distribution of
the 2021 prospectus, the geolocation data associated with various IP addresses, or the relation of
the Evernote program to Endeavor’s own IT department oversight. Thus Objections No. 81, 103,
111, and 112, are also SUSTAINED. The remaining objections are OVERRULED.
Plaintiff in tum objects to material submitted by Defendant in its reply. Objection No.1, 3, and 4
are SUSTAINED, as these materials consist of hearsay statements by counsel for a non-party.
The other objections are OVERRULED.
Il. SUMMARY JUDGMENT
A party may move for summary judgment “if itis contended that the action has no merit or that
there is no defense to the action or proceeding.” (Code Civ. Proc. § 437c, subd. (a).) “[]fall the
evidence submitted, and all inferences reasonably deducible from the evidence and
uncontradicted by other inferences or evidence, show that there is no triable issue as to any
‘material fact and that the moving party is entitled to judgment as a matter of law,” the moving
party will be entitled to summary judgment. (Adler v. Manor Healthcare Corp. (1992) 7
Cal. App.4th 1110, 1119.) A motion for summary adjudication may be made by itself or as an
alternative to a motion for summary judgment and shall proceed in all procedural respects as a
motion for summary judgment. (Code Civ. Proc. § 437¢, subd. (£)(2).)
‘The moving party bears an initial burden of production to make a prima facie showing of the
nonexistence of any triable issue of material fact, and if he does so, the burden shifts to the
opposing party to make a prima facie showing of the existence of a triable issue of material fact,
(Aguilar v. Atlantic Richfield Co. (2001) 25 Cal 4th 826, 850; accord Code Civ. Proc. § 437c,
subd. (p)(2).)
12Once the defendant has met that burden, the burden shifts to the plaintiff to show that a triable
issue of one or more material facts exists as to that cause of action or a defense thereto. (Aguilar,
supra, 25 Cal.4th at 850.) The plaintiff may not rely upon the mere allegations or denials of its
pleadings to show that a triable issue of material fact exists but, instead, shall set forth the
specific facts showing that a triable issue of material fact exists as to that cause of action or a
defense thereto. (Ibid.) To establish a triable issue of material fact, the party opposing the
motion must produce substantial responsive evidence. (Sangster v. Paetkau (1998) 68
Cal.App.4th 151, 166.)
Defendant Endeavor Group Holdings, Inc. moves for summary judgment on Plaintiff David
Carde’s solitary claim for breach of implied-in-fact contract. Defendant argues that Plaintiff
cannot demonstrate the existence of such a contract, since the analysis upon which this lawsuit is
based was submitted without any express condition of payment and contrary to the express
policies against solicitation contained on Defendant's website. (Motion at pp. 17-19.) Defendant
also argues that Plaintiff cannot prove that Defendant actually used his submission, since those
involved in the IPO that followed the submission have denied reading it, and the only evidence
of its use suggests that it was saved on a separate server by one of its recipients, who thereafter
did not share the item. (Motion at pp. 19-22.) Defendant finally argues that there is no
substantial similarity between Plaintiff's submission and its eventual IPO materials, beyond their
joint use of common business jargon. (Motion at pp. 22-26.)
“[FJor an implied-in-fact contract one must show: that he or she prepared the work; that he or she
disclosed the work to the offeree for sale; under all circumstances attending disclosure it can be
concluded that the offeree voluntarily accepted the disclosure knowing the conditions on which it
was tendered (ie, the offeree must have the opportunity to reject the attempted disclosure if the
conditions were unacceptable); and the reasonable value of the work.” (Faris v. Enberg (1979)
97 Cal.App.3d 309, 318.) “[T]he existence of an implied contract is a question of fact, not law.”
(Ghazarian v. Magellan Health, Inc. (2020) 53 Cal.App.Sth 171, 191.)
“In an idea submission case such as this, to prevail on a cause of action for breach of implied-in-
fact contract, plaintiffs must show (1) they clearly conditioned the submission of their ideas on
an obligation to pay for any use of their ideas; (2) the defendants, knowing this condition before
the plaintiffs disclosed the ideas, voluntarily accepted the submission of the ideas; and (3) the
defendants found the ideas valuable and actually used them—that is, the defendants based their
work substantially on the plaintiffs’ ideas, rather than on their own ideas or ideas from other
sources.” (Spinner v. American Broadcasting Companies, Inc. (2013) 215 Cal.App.4th 172,
184.) “In the absence of direct evidence, “use” of an idea can be inferred from evidence showing
the defendant had access to the plaintiffs idea and the parties' ideas are similar.” (Ryder v.
Lighistorm Entertainment, Inc. (2016) 246 Cal.App.4th 1064, 1073.)
‘The purpose of the substantial-similarity analysis is to answer the question whether
the defendant copied the work of the plaintiff. Ordinarily, similar elements between
known work of the plaintiff and the defendant's work will, depending on the degree
of uniqueness and originality of the element, support such an inference. However,
where defendant owns a prior work containing the same elements, he has no reason,
beyond the illicit thrill of copyright infringement, to copy wrongfully from another
what he could legally copy from himself. Therefore, where an element occurs both
13in the defendant's prior work and the plaintiff's prior work, no inference of copying
can be drawn,
(Ryder v. Lightstorm Entertainment, Inc. (2016) 246 Cal.App.4th 1064, 1075.)
Defendant's presentation of the facts is as follows. On September 30, 2019, Michael Giordano
sent the following email to Ari Emanuel, Defendant's CEO, stating as follows:
Ari,
My friend and client (to the extent Disney/Fox allows me to have clients!) David
Carde took it upon himself to write an analysis of your upcoming IPO, based on
VC Bill Gurley’s (Benchmark Capital) defense of Uber’s valuation and Bharat
Anand’s theories on digital media.
David believes that with applied AI & machine learning, Endeavor is poised to
become a $100 Billion company due to network effects, which I know has to make
you smile.
His write-up is attached,
Best,
Mike Giordano
(Motion Exh. 4.)
The attached analysis, authored by Plaintiff, was entitled “An Altemative Look at Endeavor’s
Potential Valuation & Why it Can be Worth Greater than $100 Billion.” (Jbid.) The opening
page depicts a cyclical diagram around a central phrase — “The Content Conversation” —
around which revolve four bubbles — “Talent,” “Owned & Operated Assets,” “New Categories
& Markets,” and “New Talent” — connected by arrows overlaid with the words, “Network
Effects.” (Ibid.) The thesis of the analysis states that “the major contributor to the valuation of
Endeavor is the ability to create synergistic connections through a network effect.” (Jbid) The
analysis states that Defendant is “[a] network-effects partner to clients in that clients ‘plug into”
an infrastructure of tools which combine human intelligence with technology, as well as direct to
consumer (‘DTC’) offerings — leveraging the ‘integrated’ verticals of the platform to create
value (and freedom) for clients.” (/bid.) The analysis argues that Defendant “is well positioned to
become a DTC [direct-to-consumer] SaaS [software-as-a-service] company.” (Ibid.) Plaintiff in
the analysis states that he will discuss the importance of patterns, including the necessity of
“update” to the work of Joseph Campbell’s The Hero with a Thousand Faces to account for
recent media trends. (bid.) The analysis suggests that Defendant could use its “disparate” assets
and “infrastructure” to monetize new fields of content — such as by using one of Defendant's
prime clients, Dwayne Johnson, to launch “en-route entertainment” for self-driving cars,
educational content for children, or virtual-reality tourism. (Ibid.) Plaintiff's analysis discusses
how Defendant can use its infrastructure to bundle content directly to consumers and attract new
clients to itself. (/bid.) Plaintiff describes this as “a massive network effect whereby as Endeavor
takes market share and creates synergistic connections, it puts itself in position to take even more
market share.” (/bid.) The analysis concludes with a “key point,” namely that Defendant's
“infrastructure and optionality are the drivers of value and with the right decisions by
management, this company is just at the beginning of how big and impactful it can be.” (Ibid.)
14Emanuel claims to have never read the email, and that it was automatically deleted as unread.
(Emanuel Decl. § 6; Wells Decl. 7.)
On September 30, 2019, Giordano forwarded the previous email to Ari Greenburg, president of
the Endeavor subsidiary, William Morris Endeavor Entertainment, LLC (WME). (Motion Exh.
1.) That email stated
Ari, I thought you might appreciate the attached analysis, written by my friend and
“client” David Carde, who has a true knack for identifying diamonds in the rough
(which I’ve seen him do time and time again). As you can see below, I also tried to
share this with AE two weeks back, though I’m sure he’s had bigger fish to fry
Best,
Mike
(Motion Exh. 1.) Greenburg did not respond to this email, but forwarded it to Evernote, a file-
keeping software. (Motion Exh. 2; Greenburg Decl. 8.) Greenburg states that he does not recall
reading or opening the essay and denies that he ever printed or shared it. (Greenburg Decl. $9.)
Defendant states that both itself and WME had non-solicitation policies in effect at the relevant
times, which disclaimed any custom of accepting unsolicited submissions, all accessible on their
respective websites (Braun Decl. {fj 10-11, Exhs. 10-12.) Defendant’s policy states that it “does
not accept submissions of any kind through the Website . . . or otherwise.” (Braun Decl, Exh,
10.) WME’s website states, “Please note we operate exclusively by referral and do not accept
unsolicited materials or solicitations of any kind. Any unsolicited materials received will be
returned, unread or destroyed at our discretion.” (Braun Decl. Exh. 11.)
Defendant argues that its materials published prior to the receipt of Plaintiff's unsolicited
submission made reference to the very “network effects” that Plaintiff claims to have introduced
to them. Defendant cites various pre-submission publications in which its executives refer to the
company as a “platform” which would take advantage of “network effect{s].” (Braun Decl. Exh
5; Bina Decl. Exh. 28, 29, 36.) One 2019 item stated that Defendant’s “unique platform enables
[talent] to connect with each other and our IP and owned assets in ways that are far more
‘meaningful than if approached in isolation.” (Braun Decl. Exh. 5.) Defendant argues that these
pre-submission statements indicate that they already had access to the ideas advanced within it.
(Opposition at pp. 24-26.)
Plaintiff in opposition contends that his analysis expressed the idea of “network effects” in a
manner different than that previously advanced by Defendant, which referred to network effects
among users of a given company’s service, rather than network effects created by a client’s
access to various properties within a company’s “architecture.” (Opposition at pp. 12-14.)
Plaintiff contends that this is shown by a comparison between the diagrams used by Defendant in
its withdrawn 2019 IPO materials, which showed the “integrated capabilities” of its clients and
brands through hub-and-spoke diagrams, and the materials used in the later 2021 IPO, which
illustrated the “network effects” of its various properties through eyclical, arrow-driven
v= diagrams. (Carde Decl. §{ 69-73.) Plaintiff further argues that direct evidence of access can be
'Y shown by materials produced through subpoena by Evernote, which indicates activity
‘k _ Surrounding his analysis in Greenburg’s Evemote account. (Opposition at pp. 11-12.)
s 15Defendant's argument concerning the absence of an implied-in-fact contract is persuasive. Such
a contract is not created by the mere submission of an idea; Plaintiff must show that he clearly
conditioned the submission of his analysis on an obligation to pay for its use, and that
Defendant, knowing this condition before the plaintiffs disclosed it, voluntarily accepted the
submission of the analysis. (Spinner, supra, 215 Cal.App.4th at p. 184.) Neither Giordano’s
emails nor Plaintiff's analysis contained anything indicating to their recipients that the analysis,
was submitted in the expectation of payment.
Plaintiff argues that this position was rejected in the order overruling Defendant's prior
demurrer. (Opposition at pp. 16-17.) But a demurrer takes as true the allegations of a complaint,
while a party opposing a motion for summary judgment must, if the moving party carries theit
burden, produce “substantial responsive evidence” creating a triable issue of fact. (Sangster,
Supra, 68 Cal.App.4th at p. 166.) Plaintiff's Complaint alleges, “In the entertainment industry, it
is axiomatic and a custom and practice that when ideas and intellectual property are submitted
through representation, those materials may not be used by the recipient for free, but rather
compensation will be required for any use.” (Complaint 34.) The Complaint promised to
support this assertion with “expert testimony about this custom and practice.” (Complaint § 34.)
But in response to the present motion, the only evidence that Plaintiff has presented of this
custom and practice is the very same allegation from his complaint, copied and pasted into his
declaration. (Carde Decl. 4 19.) As discussed with reference to Defendant's objections to
Plaintiff's opposition materials, Plaintiff offers no foundation in his own knowledge, skill,
experience, training, or education that would qualify him to testify to the custom that he claims.
Plaintiff moreover does not address the express policies of both Defendant and WME against
unsolicited materials. These policies warned against unsolicited materials “of any kind,” Braun
Decl. Exhs. 10-11.) Although Plaintiff argues that the WME policy states that it operates
“exclusively by referral,” Defendant’s policy contained no such language, and in any event this,
clause is immediately followed by the language, “and [we] do not accept unsolicited materials or
solicitations of any Kind.” There are thus no triable issues of fact as to the existence of an implied
in fact contract based on Plaintiff" submission of the analysis.
‘The motion is therefore GRANTED.
IM. MOTION TO FILE UNDE!
AL,
‘The court may order that a record be filed under seal only if it expressly finds facts that
establish:
(1) There exists an overriding interest that overcomes the right of public access to
the records
(2) The overriding interest supports sealing the record;
. (3) A substantial probability exists that the overriding interest will be prejudiced if
3 the record is not sealed;
16(4) The proposed sealing is narrowly tailored; and
(5) No less restrictive means exist to achieve the overriding interest.
(California Rules of Court (“CRC”) Rule 2.550, subd. (d),)
A party moving to seal records must make a sufficient evidentiary showing to overcome the
presumed right of public access to the documents. (See Huffy Corp. v. Superior Court (“Huffy”)
(2003) 112 Cal.App.4th 97, 108.)
Defendant moves to seal the following items submitted in support of its motion for summary
judgment: 91) a line of Ari Greenburg’s declaration which references his private email address;
2) aportion of Exhibit 24 to the declaration of Jessica Stebbins Bina, which contains the same
email address; and (3) portions of the declaration of Richard Wells referencing the same email
address and discussing Defendant’s cybersecurity policies. (Motion at p. 2.) These items have
been designated “confidential” pursuant to the protective order entered in this case.
Defendant argues that failing to order the sealing of Greenburg’s private email address could
result in him being subject to harassment. (Motion at p. 5.) Defendant further argues that the
information related to Defendant’s cybersecurity policies would be harmful to Defendant if
permitted to be disclosed. (Motion at pp. 5-6.) The motion is supported by the declaration of
Courtney Braun, WME’s executive vice president and general counsel, who testifies that
publishing Defendant's cybersecurity policies would constitute a security risk. (Braun Decl. 6.)
Defendant has shown the existence of an overriding interest that will be prejudiced if sealing is
not ordered as requested. Moreover, the relief requested consists of limited redactions and is
narrowly tailored to accommodate the interests identified, which cannot otherwise be protected. _
‘The motion to seal is GRANTED.
Dated: December 12, 2023
Judge of the Superior Court
7