IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF VIRGINIA Alexandria Division Roadrunner Computer Systems, Inc. Plaintiff v. Network Solutions, Inc. Defendant Civil Docket No. 96-413-A ROADRUNNER COMPUTER SYSTEMS INC.'S OPPOSITION TO NETWORK SOLUTIONS INC.'S MOTION FOR SUMMARY JUDGMENT Defendant Network Solutions, Inc. ("NSI"), has moved for summary judgment on the complaint in the above-action on the grounds that issues raised therein are moot. Plaintiff Roadrunner's Computer Systems, Inc. ("RCS") opposes this motion. This cases arises out of the unilateral adoption of a domain name dispute policy by NSI, which has contracted with the National Science Foundation to supply registration services for portions of the Internet, and the ex post facto application of that policy to try to take the domain name "roadrunner.com" away from RCS and give it to Time Warner Communications, Inc. NSI now asserts that Time Warner has withdrawn its challenge to RCS' continued use of the domain name, and that RCS' law suit against NSI is therefore moot. NSI's motion is flawed for two reasons. First, there is no evidence presented that Time Warner has withdrawn its challenge to RCS' continued use of the domain name. Second, even if Time Warner were to withdraw its challenge, this would not render RCS's dispute with NSI moot. Thus, NSI's motion should be denied. Moreover, NSI has so breached the duty of candor owed to the Court in its presentation of the pending motion, that RCS should be awarded its costs and attorneys fees for responding to this motion. I. There is No Cognizable Evidence Presented That Time Warner Has Withdrawn Its Challenge Since the inception of this litigation, RCS has maintained that there is no real dispute between RCS and Time Warner concerning RCS' use of the roadrunner.com domain, because RCS' use does not constitute trademark infringement and because Time Warner has never accused RCS of trademark infringement during discussions concerning use of the domain name. Rather, it is and has been RCS' contention that this entire suit arises from Time Warner attempting to take advantage of NSI's ill-conceived policy, notwithstanding the absence of any colorable legal basis to restrict RCS activities. NSI answered this contention by asserting that there was a dispute between Time Warner and RCS. This allegation was apparently based on the November 27, 1995 letter to NSI from Baker and Hostetler, outside counsel representing Time Warner, which is attached to the Declaration of David M. Graves as Exhibit A, in which the allegation is made that "the utilization of [the roadrunner.com domain name] is a violation of state and federal law." At the time the Complaint and Amended Complaint were filed, RCS was unaware of this letter because NSI had not provided a copy of the letter to RCS. Now, NSI asserts that Time Warner has withdrawn its challenge. The sole evidence submitted in support of this contention is the declaration of Grant L. Clark, Corporate Counsel for NSI's parent company. This declaration states as follows: In my conversation with Mr. Montan [counsel for Time Warner], I requested that Mr. Montan on behalf of Warner Brothers provide NSI with a letter or statement to the effect that the registration and use by plaintiff of the "roadrunner.com" was causing legal harm to Warner Brothers. I also requested that Mr. Montan make an equivalent oral representation to the same effect. Mr. Montan declined both requests. I then sent a confirming letter to Mr. Montan. On its face, this statement does not support that statement made in NSI's Memorandum that "counsel for Time Warner informed counsel for NSI that Time Warner no longer challenges RCS's registration and use of the subject domain on the Internet." (Memorandum, Page 3). Instead what it says is that Mr. Montan declined to provide the statement requested by Mr. Clark. These two are not one and the same thing. NSI has simply chosen to treat Mr. Montan's decision not to provide a statement (which incidently is not required under the NSI Policy) as equivalent to an express withdrawal of the challenge. Wishful thinking is not a substitute for admissible evidence, however. There being no support for the key factual allegation on which NSI's motion is premised, it should be denied. II. NSI and Its Attorneys Have Breached Their Ethical Obligations and Violated Rule 11 By Intentionally Distorting and Concealing Facts The lack of congruence between the facts as argued in Memorandum and as presented in the Declaration of Grant Clark is regrettable, but taken as an isolated instance is probably insufficient to warrant sanction. NSI did not stop at mere distortion, however. In addition, NSI's Motion omits any mention of a letter sent by facsimile by Mr. Montan to Mr. Clark on May 31, in response to the confirmatory letter. A copy of this letter is attached to the Declaration of Carl Oppedahl as Exhibit A. This letter states that: The reason why Warner Bros. is not in a position at this time to send you a letter or statement, or to make an equivalent or oral representation to you regarding the use by Roadrunner Computers, Inc. of the domain name "Roadrunner.com" is that Warner Bros. is presently engaged in attempting to negotiate a settlement agreement with Roadrunner Computers, Inc. At this time I cannot predict with certainty whether the settlement negotiations will, or will not, ultimately result in a satisfactory settlement agreement being reached and executed between the parties. I am concerned that, at this delicate stage of the settlement negotiations, it could be prejudicial to Warner Bros. to reiterate or reinforce any claims against Roadrunner Computers, Inc. alleging legal harm at this time. To do so might be viewed as a sign of renewed hostilities and might therefore derail our settlement discussions. It is for this reason that I am not in a position at this time to provide you with the letter, statement or oral representation that you requested. This is not in any way intended, and should not be construed, as an express or implied waiver of acknowledgment by Warner Bros. of any weakness as to its legal rights, remedies and defenses in relation to the Roadrunner Computers, Inc. or its activities. (emphasis added) Thus, NSI was aware when the motion was filed that RCS and Time Warner had not reached a settlement agreement, and that Warner Bros. was not waiving anything. To fail to disclose this letter to the Court, and to so distort the meaning of the conversation between Mr. Clark and Mr. Montan to suit its own needs is an egregious breach of the duty of candor owed to this Court. In view of this conduct, pursuant to Fed. R. Civ. P. 11(c)(1)(B), the Court may enter an order to show cause why sanctions equal to RCS's costs and attorneys fees in responding to this motion should not be awarded. III. Even If Time Warner and RCS Do Reach a Settlement, RCS's Complaint Against NSI Is Not Moot According to NSI, if RCS and Time Warner resolve their dispute, there will no longer be a justiciable controversy. This is incorrect. RCS has alleged that NSI has a contractual obligation to RCS (as a domain name registrant) to administer the Internet in a fair and evenhanded manner, and that NSI has breached this duty by implementing an arbitrary policy which unfairly and summarily deprives domain name owners of the use of their domain, and by applying this policy to which RCS never agreed to RCS. RCS has further alleged that it has been injured as a result of this breach, and requested an award of monetary damages. In response, NSI has acknowledged payments from the National Science Foundation in excess of $5 million for performing the domain name registration services, but denies that it has any duty or obligation to RCS (or any other domain name registrant) to act fairly in performing this task. Roadrunner has already been injured as a result of NSI's adoption and implementation of an unfair and unreasonable policy. These injuries include attorney fees in excess of $20,000, and expenses and business disruption associated with the development of contingency plans in response to repeated threats by NSI to terminate the roadrunner.com domain. These [are] injuries which were proximately caused by NSI's Policy, and will not go away because Time Warner withdraws its challenge. Thus, these claims are not moot. In fact, the very case which NSI cites as supporting a finding of mootness, Fleming v. Workers' Compensation Comm. of the Commonwealth of Virginia, 878 F.2d 852, 859 (E.D. Va. 1995) expressly did not dismiss the case as to the defendant (USF&G) against whom there was a claim for money damages, even though the need for injunctive relief in the Fleming case was past. Furthermore, RCS seeks a declaratory judgment that the NSI Policy created after RCS registered its domain name is not applicable to RCS. This remains a real issue in dispute between the parties because there are other parties with trademark registrations for the name "roadrunner," (See Declaration of Carl Oppedahl, Exhibit C), and because RCS has stated in its motion that it is only "in the absence of a formal complaint by Time Warner, or any other third party," that NSI will not take further action under the Policy with respect to RCS' domain. (Declaration of David M. Graves, ¶7.) Having once run the gauntlet of NSI's Policy, and incurred the expenses of opposing the policy, RCS should not be required to hang in a limbo of uncertainty wondering if there are going to be other challenges made. In fact, it is the resolution of just such uncertainty which is the purpose of a suit for declaratory judgment. Burnham v. West, 1988 U.S. Dist. LEXIS 17997 (E.D. Va. 1988). Copy attached. Thus, the issue of whether or not the NSI Policy applies to RCS is ripe for decision, and would not be moot even if RCS and Time Warner do reach a settlement leading to withdrawal of the Time Warner Challenge. CONCLUSION The fundamental premise underlying NSI's motion, namely Warner Brothers' alleged withdrawal of its challenge, is supported by no evidence and is in fact based on a misrepresentation of the facts which should warrant the imposition of sanctions. Furthermore, even if RCS and Warner Brothers were to reach an agreement leading to the withdrawal of the challenge, RCS's claims that NSI (1) had a contractual duty to RCS which it breached and (2) tortiously interfered with RCS's contractual relationships with RCS's customers would not be moot unless NSI agreed to pay the damages claimed by RCS for injuries suffered as a result of enforcement of the NSI Policy. Similarly, RCS's claim for declaratory relief is not moot because RCS stands at risk of continuing injury due to business uncertainty while the threat of further application of the Policy continues to loom over its head. This claim could only be rendered moot by NSI's agreement that the NSI Policy is not applicable to RCS or by the creation of a new Policy which the Court and RCS agree meets the requirements of being fair and even-handed in its treatment of domain name registrants, including [RCS]. NSI's Motion for Summary Judgment should therefore be denied. Respectfully submitted, ROADRUNNER COMPUTER SYSTEMS, INC. By Counsel ________________________________ Kathleen J.L. Holmes, Va. Bar No. 35219 Murphy McGettigan Richards & West, P.C. 225 Reinekers Lane, Suite 700 Alexandria, VA 22314 (703) 549-5353/ (703) 683-2941 [fax] Of Counsel: Carl Oppedahl, Esq. Oppedahl & Larson 1992 Commerce Street, Suite 309 Yorktown Heights, NY 10598-4412 (914) 245-3252/(914) 962-4330 [fax] Counsel for plaintiff