Ref D - 1/30/2011 Universal Settlement Offer

[johnkarls]

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Date – January 30, 2011

To – peter.obstler@bingham.com

cc – jmitchell@ReedSmith.com; B.Hovis@MPGLAW.com; david.balabanian@bingham.com; jimfrench@compuserve.com

Subject –Lawsuit Withdrawal Offer

Attachments:
(1) Wachovia-WellsFargo – 12/6/2010 Petition to Cal Supreme Court
(2) Wachovia-WellsFargo – 1/6/2010 Reply to Wach-Wells Answer to 12/6/2010 Petition
(3) Mellon-Bank/NY – 1/24/2011 Petition to Cal Supreme Court

[Editorial Note – Attachments (1) and (2) are contained in Reference E on the Reading Liberally Bulletin Board and Attachment (3) is the contained in Reference A.]

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Text of E-Mail =

Peter Obstler, Esq., Bingham McCutchen LLP –
Mellon/Bank of NY - pending in California Supreme Court

cc:

Jonah D. Mitchell, Esq., Reed Smith LLP –
Wachovia/Wells Fargo - pending appeal to the U.S. Supreme Court
Bank of America - stayed in California Superior Court
ABN Amro -stayed in California Superior Court
Merrill Lynch - stayed in California Superior Court

Barry D. Hovis, Esq., Musick, Peeler & Garrett LLP –
Bear Stearns - stayed in California Superior Court
JP Morgan Chase - stayed in California Superior Court

David M. Balabanian, Esq., Bingham McCutchen LLP –
AIU Insurance - stayed in California Superior Court

James French, Esq., French & Lyon LLP –
HSBC Bank - stayed in California Superior Court

Dear Peter:

Re: Lawsuit Withdrawal Offer

On Friday, a copy was received of the Denial of the California Supreme Court to permit an appeal to that court of the decision of the California Court of Appeal in the Wachovia Bank/Wells Fargo lawsuit which is not only “separate and inherently unequal” since it is unpublished and un-citable, but is also “separate and demonstrably unequal” since it is diametrically opposed to the two most recent decisions of the California Court of Appeal that recognized and honored the well-established common-law principle that the unauthorized taking of “intangible interests” that are “merged with, or reflected in, something tangible” constitutes conversion. Freemont Indemnity Company v. Fremont General Corporation, et. al., 55 Cal.3d 621, 638, 148 Cal.App.4th 97 (Cal.App. Second Dist. 2007) and Thrifty-Tel, Inc. v. Bezenek, 54 Cal.3d 468, 472, 46 Cal.App.4th 1559 (Cal.App. Fourth Dist. 1996).

Indeed, the Freemont opinion even stated (ibid, p. 638) “Section 242 of the Restatement Second of Torts, published in 1965, states: ‘(1) Where there is conversion of a document in which intangible rights are merged, the damages include the value of such rights.’”

The Freemont court proceeded to justify at great length an expansion of the common law conversion-of-intangibles rule to a U.S. tax loss which the court specifically found never to have been reflected in anything tangible, while the Thrifty-Tel court decided that it was unnecessary to expand the common law conversion-of-intangibles rule to a computer-access code which the court specifically found never to have been reflected in anything tangible, on the ground that a jury verdict for conversion could be justified as trespass which had not been pled.

Rather than proceed at this point to repeat all of the argumentation on the merits contained in the briefs filed with the California Supreme Court – for your convenience there is attached hereto the salient components of the Wachovia/Wells Petition for Review filed December 6th and, since my e-mail software permits only a maximum of five attachments, there will be attached to another e-mail to follow shortly the salient components of the Reply to the Wachovia/Wells Answer filed January 6th and there will be attached to a second e-mail to follow shortly the salient components of the Mellon/Bank of NY Petition for Review filed this past Monday.

*****
However, it is important to note several pivotal procedural irregularities that occurred in the California Court of Appeal.

The First Division of the Court of Appeal announced in an opinion in a related case issued two months before the hearing in Wachovia/Wells that they had already reached a decision in Wachovia/Wells favorable to the defendants. In response to a Motion to Recuse all of the judges of the First Division, Presiding Judge William McGuiness temporarily assigned Justice Maria Rivera from the Fifth Division to conduct the Wahcovia/Wells hearing with Justices Robert Dondero and Sandra Margulies who had signed the opinion two months earlier saying they had already reached their decisions. (First Division Presiding Justice James Marchiano who had also signed the earlier opinion and Justice Kathleen Banke who had originally been scheduled to replace him for the Wachovia/Wells hearing apparently both recused themselves requiring the assignment of Fifth Division Justice Maria Rivera by Presiding Judge William McGuiness.)

Presiding Judge William McGuiness then presided personally over the Mellon/Bank of NY hearing which followed several weeks later. On his three-judge panel was Justice Martin Jenkins.

Justice Martin Jenkins interrupted my oral argument to ask you, Peter, how you would respond to my arguments that (1) the Freemont and Thrifty-Tel opinions had recognized and honored the well-settled common law rule that the unauthorized taking of a document containing ideas is conversion, and (2) well within this rule was the FAC alleging that not only was my Trade Secret required to be contained in a document but that my Trade Secret was so complicated that it could not be comprehended in the absence of a document containing transactions steps, diagrams and technical analysis.

As you know, Peter, I have always enjoyed our association immensely not only because you have been so pleasant, but also because you have maintained an impeccable level of integrity. You will recall that you had no response for Justice Martin Jenkins with respect to the Freemont and Thrifty-Tel decisions. And that you speculated outside the hearing room afterwards that your interchange with Justice Martin Jenkins would result in a reversal of the Superior Court. And that you speculated further that an internal split within the First Appellate District regarding Wachovia/Wells on the one hand and Mellon/Bank of NY on the other would produce a virtual guarantee that the California Supreme Court would accept appeals in both cases to resolve the conflict.

As it turned out, you need not have worried. Justice Martin Jenkins was only the “Uncle Tom” of Presiding Judge McGuiness whose obvious objective was to justify his own complicity in the Wachovia/Wells Denial of Due Process with decisions in both Wachovia/Wells and Mellon/Bank of NY that are unpublished and un-citable – for the obvious reason that they are diametrically opposed to well-settled law including the recent Court of Appeal decisions in Freemont and Thrifty-Tel.

As you seemed to agree in our conversation after the Mellon/Bank of NY hearing, the unpublished and un-citable procedure can easily be employed as a segregated toilet down which can be flushed opinions that are not only “separate and inherently unequal” but are actually “separate and demonstrably unequal.”

It would appear that Justice Martin Jenkins was well aware that he had been selected to serve as the hearing panel’s “Uncle Tom” and his interchange with you was merely a pang of conscience that could not be repressed before he signed off on placing an Orwellian Mellon/Bank of NY opinion in the segregated toilet for the California Supreme Court to flush.

*****
For your colleagues, Peter, there is another important aspect of this imbroglio that requires consideration.

You will recall that after Superior Court Judge Charlotte Woolard’s hearing on 11/12/2009 fourteen months ago which had followed her granting, on her own motion, leave to amend the original complaint, you were incredulous that I had not simply added an allegation of a misappropriation of the trade secret in addition to the allegation of conversion of the trade secret.

By way of background, you will recall that unlike Reed Smith in Wachovia/Wells, you had raised the issue of preemption under the California Trade Secrets Act and had conceded in oral argument that conversion is not preempted in the case of a theft in the U.K. by a U.K. citizen and a U.K. corporation and the conveyance of the stolen material to two banks headquartered in states that had not adopted the Uniform Trade Secrets Act.

I explained first that it has been clear from the outset with the ad hominem attacks by Reed Smith in connection with the first hearing in these lawsuits (Reed Smith was admonished by Judge Curtis E.A. Karnow for having made the attacks), that I have “no horse in this race” – that 100% of the proceeds from any and all of these cases had long since been pledged in legally-binding fashion for the education of inner-city children. (Indeed, Reed Smith made more ad hominem attacks in the Answer they filed on December 27th with the California Supreme Court that my pledge was not legally-binding with typically-unsupported legal arguments that were diametrically opposed to well-settled case law.)

As we have all known from the outset, (1) Barclays admitted that they stole the Trade Secret and used it, as described in the Wall Street Journal article attached to the various complaints, in deals that they implemented with the 15 sets of defendants, (2) Barclays’ S.E.C. filings show that they had approximately $21 billion of their own income taxes to sell as U.S. foreign tax credits, (3) Barclays admitted that none of the 15 sets of defendants showed any interest in whether Barclays actually owned the Trade Secret as confirmed by the lack of any representation or warranty in any of the contracts and, therefore (4) treble punitive damages for the reckless behavior of the 15 sets of defendants in accepting the stolen property produces the estimate of $84 billion in lawsuits, or 10 million California inner-city children in “I Have A Dream”® or IHAD-style programs providing tutoring/mentoring K-12 with a guarantee of college tuition (though, of course, the actual amount could be much higher if Barclays also sold income taxes of other foreign taxpayers to the 15 sets of defendants as U.S. foreign tax credits).

With that background, I answered your question why I had not amended the original complaint to add an allegation of misappropriation of a trade secret by saying that the 10 million California inner-city children are entitled to the same Equal Protection of the Law under the Fourteenth Amendment to the U.S. Constitution as America’s first-class citizens.

Then I repeated what had been said to Gwen Ifill, Helene Cooper, Cynthia Tucker and 40 other news-media stars in two different sets of pleas to shine the same spotlight on these legal cases as they routinely shine at the request of David Boies on his cases.

What was said to the Gwen Ifills of the world was that any person or corporation that steals a Trade Secret with full knowledge that 100% of the proceeds from the exploitation of that Trade Secret are pledged in legally-binding fashion to provide 10 million American inner-city children with a real future, rather than merely perpetuating America’s permanent “untouchable” caste, is so morally bankrupt that they would not hesitate to provide back-dated false assurances of ownership of the Trade Secret that could be placed by some unknown clerk in the records of each of the 15 sets of defendants so that the back-dated false statements could be introduced into evidence as business records without anyone even having to perjure themselves.

Obviously, the judges involved in these lawsuits have been trying to bully me into accepting second-class justice on behalf of the 10 million California inner-city children, so that the judges can piously pity the results of zero monetary damages from denying them the rights enjoyed by first-class American citizens under the law of conversion that apply even if the defendants can prove that they had no actual knowledge of the theft.

In other words, why are heirs of Holocaust victims whose fine art was stolen by the Nazis entitled to sue the current holders of that fine art even if the current holders are able to prove a lack of knowledge of the theft by the Nazis, entitled to first-class treatment under the law while the rights of 10 million California inner-city children are placed in a segregated toilet and flushed away?

*****
With last week’s decision by the California Supreme Court, no stone has been left unturned.

(1) The California Superior Court has effectively asked, before trying 15 sets of cases, whether the California Court of Appeal is willing to grant the 10 million California inner-city children the same legal rights enjoyed by first-class American citizens, (2) the California Court of Appeal has answered by placing the rights of the 10 million California inner-city children in a segregated toilet, (3) the California Supreme Court has affirmed that answer by flushing the segregated toilet, and (4) the U.S. Supreme Court has already approved such behavior in their denial last September of an appeal petition in the Karls v. Goldman Sachs, et. al. litigation in line with their well-known unwillingness to accept appeals from pro se plaintiffs.

It is true that the Mellon/Bank of NY Petition for Review filed last Monday involves your admissions that Freemont and Thrifty-Tel recognized and honored the well-settled law of conversion regarding intangible property and that my FAC was well within that well-settled rule – but the law is the law and admissions should carry no greater weight with the Supreme Court than the law itself. It is also true that Mellon/Bank of NY involved a FAC making absolutely clear that the conversion claim was well within the rule recognized and honored by the Freemont and Thrifty-Tel courts, while Superior Court Judge Karnow had not permitted any amendment to the Wachovia/Wells complaint in order to compel an appeal to the Court of Appeal. But, again, that should have no bearing on what the law is and, indeed, the Court of Appeal opinions in both Wachovia/Wells and Mellon/Bank of NY paid no attention to the difference in issuing Orwellian opinions that claimed that both Freemont and Thrifty-Tel stand for precisely the opposite of what they actually stand for if anyone bothers to read the opinions.

Accordingly, I am herewith bowing to reality that the chances of the 10 million California inner-city children to obtain the same justice routinely given to first-class American citizens is not merely a rounding error, but rather has now been demonstrated to be absolute zero. In other words, that Court of Appeal Presiding Judge William McGuinnes will follow human nature in ensuring that his past actions are justified and that, inter alia, Justice Martin Jenkins will never again be assigned to one of these cases now that he has served his “Uncle Tom” function.

Therefore, your clients and the clients of your colleagues listed above are herewith offered a withdrawal of each of the remaining lawsuits.

However, as a matter of principle none of the sets of defendants will be reimbursed any costs because their legal position on the merits was an abomination to the constitutional rights of the 10 million California inner-city children.

The defendants in each pending action can decide independently whether to accept a withdrawal.

However, the deadline for doing so will be 11:59 pm PST on this coming Friday, February 4th.

Accordingly, any set of defendants that has not accepted will, going forward, be merely trying to recover its costs.

And although I will admit that it is now clear that your and their chances of ultimately prevailing under America’s Apartheid “Justice” System are 100%, I consider it an honor and privilege like Ghandi’s followers to require my head to be bashed in.

(Indeed, I have quite a few friends who would like to have the honor and privilege of paying any costs that are levied, but I will reserve that right for myself.)

Thank you for your consideration.

Anyone wishing to accept the offer should reply to this e-mail address by the deadline with a copy of their proposed withdrawal document which, if confined to the minimum verbiage necessary to accomplish the withdrawal without payment of any costs, will be signed and returned for filing.

Sincerely,

John S. Karls

PS – Prior to receiving the notice from the California Supreme Court, I and my friends were rather relishing the idea of according the U.S. Supreme Court another opportunity to disgrace itself by failing to halt, at least partially, the Holocaust that is occurring in America’s inner cities by according Equal Protection of the Law to the 10 million California inner-city children. However, if both Mellon/Bank of NY and Wachovia/Wells decide to proceed, it appears that the timing will be propitious to include all four sets of defendants in the same Cert Petition similarly to the way the Supreme Court rules permitted Goldman Sachs, Citicorp and ING Bank to be included in the same Cert Petition.

[johnkarls]

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