Complaint in Confederate Motors v. Siler

8/9/2019 Complaint in Confederate Motors v. Siler

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IN THEUNITED STATES DISTRICT COU RTFOR THENORTHERN DISTRICT O F ALABAMASOUTHERN DM SIO NCONFEDERATE MOTORS, M C., )

Plaintiff,V S

))) Civil Action No.1)WES SILER; GRANTRAY; J A L O P N K C O M ; )

andGAWKER MEDIA LLC, )))DEFENDANTS. )

v l c R n m D CO MPL AIN Tparties

1. Plaintiff, Confederate Motors, Inc. (hereinafter 'CMI"), is a corpora tionorganized and existing under the law s of the State of Delaware, having itsprincipal o f ic e and place of business in the S tate of Alabama.

2. The Defendant,GAWKERMEDIA, LLC, is a corporation organized andexisting under the laws of the State of Delaware, having its principal place ofbusiness in the State of New York. Defendant, WES SILER, is an individualand resident of the State of New York. Defendant, Grant Ray, is an individualand resident of the State of New York. Defendant, Jalopnik.com, is a whollyowned subsidiary of Defendant, Gaw ker Media LLC.

Jurisdiction3. This H onorable Court has jurisdiction of this action pursuant to 28U.S.C. $

1332because the matter in controversy exceeds the sum or value of $75,000,exclusive of interest and costs, and is between c itizens of different states.

FILED2009 May-14 PM 04:02U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 2:09-cv-00949-JEO Document 1 Filed 05/14/09 Page 1 of 11


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4. The acts or omissions made the basis of this civil action were specificallydirected at the Plaintiff in Jefferson County, Alabama.

5 . Venue and jurisdiction are proper and la*l in this Honorable Court based onthe intentional actions of the Defendants which targeted the forum state and,therefore, created sufficient foresee ability of a civil action in Alabama.Calder et a1 v. Jones 465 US. 783, 790 (1984). Furthermore, damagesoccurred in Alabama, the Alabama Plaintiff maintains its primary offices inAlabama, the defendant focused its activities against the plaintiffs businesslocated in Alabama, and the products and persons being defamed are inAlabama

Facts6. The Plaintiff, CMI is engaged in the business of manufacturing and selling

highperformance motorcycles.7. On or about April 9", 2009 the Defendant, Wes Siler, posted an article on the

website known as Jalopnik.com., Jalopnik.com is an entity and a Defendant inthe case at bar along with its owner Gawker Media LLC. The article titled"Confederate Motorcycles: MotoTerminators Come to Life," a copy of whichis attached hereto as Exhibit"U tates that the Plaintiffs products areunreliable and specifically attacks the Plaintiff Corporation qs an Alabamabusiness unfit to do business in the State of New York.

8. These intentionally misleading statements are the basis of the libel claimagainst Defendants, Siler, Ray, Gawker and Jalopnik.com. Two months priorto the posting of the article, Defendant Ray, who is an employee of Defendant,



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Gaw ker Media, LLC, sent an e-mail to the Plaintiff Corporation which statedrevenge would be so ught for Pla intif fs unw illingness to a llow the Defendantthe use of a motorcycle for a trade show. (Attached as Exhibit '73")

9. Defendant Ray is a form er employee of the Plaintiff who left after HurricaneKa trina The result of the threat was the article published on the heels of theNew York Auto Show where the Pla intif fs products were displayed. There isa concerted effort by all Defendants to disparage the Plaintiff. On A pril 14",2009 the D efendants received a w ritten demand to remov e the offendingarticlewithin en days. As of May 1 ", 2009 the article is still beingpublished on the website. (See e-mails attached as Exhibit "C")

10. The offending language in the article states "In fact, it's surprising to see themat the New York Auto S how today since last we heard the Alabam a-basedcompany was being sued soheavily in state courtsby disgruntled owners thatthey were unable to do business here." The m isleading implication is thatCMI has been repeatedly sued in m any state cou rts by disgruntled owners.The undisputed facts are that neither CMI nor its predecessor in interestConfederate Motor Company , Inc. (hereinafter 'CMC ') has ever been sued inthe State Court of New Y ork by an owner. The onlyproceeding ever filedagainst the Plaintiff in the State of New York is an arbitration action forfailure to repair in a timely fa shion (ninety days) which was the result ofHurricane Katrina and CMI's resulting loss of inventory. Furthermore, theonly civil actions filed against CM I or CM C are the ordinary suits normallyassociated with transacting business. The Plaintiff was required to file a



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"Jumbo 8-K" with the United States Securities and Exchange Commissioncontemporaneously with its recent reverse merger with a publicly tradedcorporation. The filing of an "8-K" requires the disclosure of all materiallawsuits under penalty of federal law. The Plaintiff had no lawsuits todisclose. The Defendants were aware, or should have been aware of this factbefore they published this article which has been viewed by at least twentyfive thousand people.

11. The Plaintiff has received numerous inquiries ftom shareholders regardingthis article and the result is a loss of shareholder confidence. This isparticularly damaging to the Plaintiff because the company was listed as apublicly traded corporation in February, 2009. The quotation set forth abovenot only proves that the intentional actions of the defendants were directed tothe fonun state but also shows the misleading nature of the article itself.Publishing false statements about an entity's ability to perform its statedbusiness purpose amounts to libelper se and intentional interference withbusiness relations.

12. Defendant, Ray, by and through his business partner, Defendant, Wes Siler,has begun to make good on his threat to damage the Plaintiff through anegative publicity campaign (See Exhibit"Bn).

COUNT 1-LIBELPER SE(DefendantsSiler,JalopnkeomandGawkerMedia)



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13. Plaintiff realleges all prior avermentsas if fully set forth herein.14. Defendants intentionally published or caused to be published false,

defamatory and intentionally misleading statements to the detriment of thePlaintiff.

15. Said statements directly impugned the Plaintiffs fitness to conduct its trade orenterprise.

16. The defamatory statements were communicated to the motorcycle industryand the general public via the Internet site known to the Plaintiff as"Jalopnik.com."

17. The Plaintiff has been specially harmed as a result of the false and misleadingstatements which the Defendants knew or should have known were false.

18. The Defendants, Siler, Jalopnik.com, Gawker Media LLC are guilty of LIBELPER SE.

Wherefore, plaintiff hereby demands an award of compensatory and punitivedamages to be determined by a struckjury and any other relief as the Court deemsproper.

COUNT2 -TORTIOUS -NCE WITH BUSINESS RELATIONS(AllDefendants)

19. Plaintiff realleges all prior averments as if fully set forth herein.



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20. A business relation and agreement existed between the plaintiff and itscustomers and potential customers with the full knowledge of the defendant.

21. The Defendants intentionally interfered without justification with said relationto the detriment of the Plaintiff.

22. The Defendants, Siler, Ray, Jalopnik.com and Gawker Media LLC are guiltyof tortious interference with business relations.

Wherefore, plaintiff hereby demands an award of compensatory and punitive

damages to be determined by a struck jury and any other relief as the Court deemsproper.

COUNT3- GROSS NEGLIGENCE(DefendantsSi, alopnik.com andGawkerMedia)

23. Plaintiff realleges all prior averments as if fully set forth herein.24. The Defendants willfilly failed to confirm the validity of unsubstantiated

comments made the basis of the offending article.25. Plaintiff lost revenues associated with sales of the motorcycles which were not

sold as a result of the Defendants' misrepresentations.

26. The Defendants, Siler, Jalopnik.com and Gawker Media are guilty of grossnegligence.



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Wherefore, plaintiff hereby demands an award of compensatory and punitivedamages to be determined by a sh-uck ury and any other relief as the Court deemsproper.

COUNT 4 -LIBELPERQUOD(All Defendants)

27. Plaintiff realleges all prior averments as if fully set forth herein.28. The Defendants have published a malicious article which tends to harm the

reputation of the Plaintiff.29. The Plaintiff is not a public figure or public official.30. The Defendants acted with malice andlor reckless disregard for the veracity of

the offending statements made.3 1. The Defendants, Siler, Ray, Jalopnik.com and Gawker Media are guilty of

libel per quod.32. The Plaintiff was proximately damaged by loss of customers, sales and

investor confidence.

Wherefore, plaintiff hereby demands an award of compensatory and punitivedamages to be determined by a struckjury and any other relief as the Court deemsproper.

COUNT5 -PRELIMINARY INJUNCTION(AllDefendants)



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33. Plaintiff realleges all prior averments as if fully set forth herein.34. Plaintiff has suffered injury and damage and there is a substantial likelihood

that it will continue to suffer substantial injury and damage by the conduct ofthe Defendants during the pendency of the lawsuit if Defendants are notrestrained kom publishing the libelous comments.

35. Plaintiffhas suffered, and will continue during the pendency of this lawsuit tosuffer, lost revenues and sales to which it is entitled if this Honorable Courtdoes not immediately restrain defendants fiom further libelous statements.

36. The public interest will only be served by the issuance of a preliminaryinjunction. Without the injunction, defendants will continue to injure theongoing business and goodwill of CMI.

37. Immediate injunctive relief is therefore appropriate.

Wherefore, plaintiff hereby requests a preliminary injunction and any other relief asthe Court deems proper.

m e r orRelief

WHEREFORE, having pled its causes of action against defendants, plaintiff,Confederate Motors, Inc. respcclrully requests:

A. An award of actual damages fiom defendants in an amount to be proven at trial;B. An award of actual damages caused by the defendants' tortuous interference with

CMI's business;



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C. An award of punitive damages for the defendants' libelous statements;D. An award of punitive damages for the willful, wanton and wrongful conduct;E. A preliminary and permanent injunction enjoining defendants, Siler, Ray,

Jalopnik.com and G awker Media LLC from continuing to publish false anddisparaging statements which impugned the p lai nti ffs fitness to transact itsbusiness purpose;

F. An award of such further relief as the Court deems proper.G. The Plaintiff hereby reserves the right to amend this complaint as discovery in

this matter continues.Respectfully submitted,&&=G. C ance TurnerW e r d Counsel,Confederate Motors,Inc.Bar NO. ASB-4942-T75T

OF COUNSEL:G. Chance Turner (TUR-055)2 North 20" Street, Suite 1150Birmingham,AL 35203(205) 986-3729(205) 986-3725 (fax )PLAINTIFI -BY REQUESTSTRIALBY STRUCKJURY.



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Please serve the Defen dants as follows:Bv CertifiedMail:

WES SlLER338 Be ny StreetApt. 7SWBrooklyn, NY 11211-5176GRANTRAY252 KinglandAvenue 2RBrooklyn, NY 11222-4323GAWKERMEDIALLC76 Crosby StreetNew York, NY 10012JALQPN1K.COM76 Crosby StreetNew York, NY 10012



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VERIFICATION

STATEOFALABAMA 1COUNTYOF JEFFERSON )

MatthewChambers, being duly swornon his oath, states that he is CEO of ConfederateMotors, Inc., has authoriv fromConfederateMotors, Inc. to signmd verify theVerifiedComplaint, has read the foregoingVerifiedComplaintand that the statementscontainedtherein are true and accuratebased on personal knowledge unless otherwise stated./--Subscribed and swornto beforeme this@day 2009.

My CommissionExpires:C I- .



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EXHIBIT "A"


N.D. OF ALABAMA

Case 2:09-cv-00949-JEO Document 1-1 Filed 05/14/09 Page 1 of 2


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Among ail the shiny concept ca n at the New York Auto Show, there's also three bikes. Confederate'sWraith, Fighter and Hellcat are scaly p i e m of rolling robotic art.

And we mean rolling literally, because, according to anecdotal evidence from multiple owners and form eremployees, Confederate's motorcycles have pmven so unreliable that you 'll probably have to push them. I nfad, t's surprising to see them at the New York Auto Show today since last we heard the Alabama-basedcompany was being sued so heavily in state courts by d is g~ nt le d wners that they were unable to dobusiness here.

Seen here is the new version of the once aesthetically pure Confederate Wraith, the old stalwart of thecompany's stable, the Hellcat, and the only-sold-through-Neiman-MarcusConfederate Fighter.



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EXH IBIT "BB"


N.D. OF ALABAMA



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Grnail - FW: F o r m Through Func t ion

- 1 -

Page 1o f 1

Chance Turner

FW: FormThrough Function1messageMatt Chambers To: [email protected] Mon, Apr 13,2009 a t 9:12 AM

From: Gmnt Ray [mailto:[email protected]]Sent: Tue 1/13/2009 11:51 AMTo: Matt ChambersSubject: Form Thmugh FunctionHere's a list of some o f the brands being represented at the partythat have RSVP'd so far. Some are big. Som e are small and veryinfluential. If you continue this paranoid delusion of me sabotaging abrand IHELPED BUILD and refuse HFL the showing of a W raith, it WlLLbe the worst m arketing mistake you will EVER make.BMW, New York Times, Harley-Davidson, Kawasaki. The Piaggio Group,Suzuki, Ralph Lauren, Marc Jacobs, the AMA, Flavorpill, Freeman'sSporting Club, Eva Gentry, Jet Blue, Gawker, Next New Networks,Alpinestars, Dianese, Esquire. Ducati. Milk Studios, The StandardHotel. NASCAR, Cool Hunting, TheHappyCorp, DireM:Art, Christies,Grey, M N . Models, actors, directors, ar t directors, designers, etc.



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EXHIBIT "C"


N.D. OF ALABAMA



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Gmail - ConfederateMotorcycles:MotoTermhators Come to L if e Page 1o f 5

Chance Turner

Confederate Motorcycles:MotoTerminators Come to Life10 messages

~ ~ ~-Chance Turner Mon, Apr 13,2009 at 400 PMTo: [email protected]: [email protected], [email protected]: [email protected], Joseph-work


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Gmail - ConfederateMotorcyc1es:MotoTerminators Come to Lif e Page 3 o f 5

[Quoted text hdde i l ]

Gaby Darbyshire Tue, Apr 14,2009 at 9:29 AMTo: Chance Turner Cc: Wert Ray . Wes Siler Mr Turner,I trust you are referring to this article?

Jalopnik is a publication that writes about autos and the auto industry. We have every right to write bothglowing reviews and critical reviews of autos. Nothing we have stated in this article is a false statement offact about the craftsmanship or performance of the bikes. All we have stated is that there is some generallywell-known question about the reliability of the machines. Our opinion -that it is surprising to see them at theAuto show - is simply that: mere opinion.We have not stated that CMI has been sued in New York. We said that it has been sued in "state courts", notspecifically in New York State. If you are telling me categorically that CMI has never been sued in any statecourt at any time, we are very happy to append an update to the post accordingly. But that would seem not tobe the truth, given the long list of lawsuits that we know of in LA, which have ust been transferred to AL:James Eric Reed vs. Confederate Motorcycles Inc., monies due.Ford Motor Credit Co. vs. Confederate Motorcycles Inc., executow processCrane Technologies Group vs Confederate ~otorcyclesnc , open accountGE Capltal Colonial Pacliic Leaslng vs Confederate Motorcycles Inc., damagesCiticapital Commercial Leasing Corp. vs. Confederate Motorcycles Inc., possessory action.Citicapital Commercial Leasing Corp. vs. Confederate Motorcycles Inc., possessory actionWe can certainly clarify the post with links to these lawsuits and make sure the readers are 100% clear thatthere are, however, no suits pending in New York State. Please let me know if you would like us to do that.Regards,Gaby Darbyshire[Quoted text hdden i+++Gaby Darbyshire I COO I (t) 646 214 8113 1(9917 591 7090Gawker Media LLC ::Gawker Technology LLC :: Gawker Entertainment LLCThis message may contain attorney client privileged andlor confidential information intended only for the addressee. Ifyou receive it in error, please delete it from your system and notify the sender. Thank you. '

.. . .Chance Turner

.Tue, Apr 14,2009 at 4:00 PM

To: Gaby Darbyshire Cc: [email protected], Joseph-work ,Kelly Marshallhttps://mail.google.com/maill?ui=2&ik=52674Oel 1c&vie~t&search=inbox&th=l20a147.. 5/7/2009



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Gmail - ConfederateMotorcyc1es:MotoTerminatorsCome to Li fe Page4 of 5

Gaby Darbyshire:Ido not conduct litigation over the Internet however, Iwill say your understanding of the law is woefullyinadequate. You and your affiliates have no right to publish deliberatety misleading statements and falseclaims concerning a corporation's ability to transact business. You, and your agents, have committed libel perse,and Iwill pursue a civil action to recover damages for interference with business relationships, libel,defamation and any other relief to which my client is entitled. I ereby reiterate my demand thatyou retract the offending article within ten days.Also, your misguided assertion concerning Confederate Motorcycles 1nc.has nothing to do with my client,Confederate Motors, Inc. ('CMI') or its predecessor, Confederate Motorcycle Company, Inc.(hereinaRer'CMC). CMI has no affiliationwith the defunct corporation, Confederate Motorcycles Inc. Any attempt to linkto two entities shall be included n my lawsuit In my opinion, your ability to research "journalistic" sources isequalled only by your ability to research legal proceedings.

G. ChanceTurnerGeneral CounselConfederate Motors, Inc.2 North 20th StreetSuite 1150Birmingham, AL 35203(205) 986-3729 (telephone)(205) 986-3725 (facsimile)[email protected][Quoted text hidden]

From: ChanceTurner [[email protected]]Sent: Tue4/14/2009 4:00 PMTo: Gaby DarbyshireCc: Matt Chamben, Joseph M i i I ; Kelly MarshallSubject: e: Confedera& Motorcydes:MotoTennlnators Comeb ife[Quoted text hidden]

Gaby [email protected]~ Tue, Apr 21,2009 at 4:35 PMTo: Chance Turner Cc:Wert Ray , Wes Siler wes@jalopnikcom>



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Gmail - ConfederateMotorcyc1es:MotoTerminato~s ome toLife Page 5 o f 5

I annot be bullied into removing legitimate criticism of motorcycle products that were and are marketedunder the Confederate product brand name, regardless of the convoluted name changes and closures andreincorporations and bankruptcies of all of the related companies. If you are telling me that your client hasnothing to do with actual Confederate Motorcycles, the products, then Iam at a loss to know why youcontacted us in the first place, but I'd advise you to sort out the confusion in the marketplace if here isanother company that sells Confederate branded motorcycles.We never mention Confederate Motorcycles, Inc. in the article. We don't name any company namespecifically. We are simply talking about the products themselves, the Confederate Motorcycles.But if you want to go there. a?d you don't like the cases I isted in my last email, then fine, let's dispensewiththose and instead talk about the Barlow case, which is on point in New York It's against "Confederate MotorCo. Inc". The company is now called "Confederate Motors, Inc." - i.e. your client - after the reverse merger ofthe two, but the suit pertains to a product that was sold under the same brand by both companies.So, if you are simply saying that we should revise the article to more accurately name the producer of theConfederate motorcycles Confederate Motors, Inc. -your client - we can cedainly do that It won't change thesubstance of our story but I am happy to help with that Please confirm that that is what you want.If not, well, Idon't really want to go down this path and turn this whole thing into a bigger story, and Iampretty sure your client is not best Sewed by doing so. But you must do as you see fit in your client's interestsRegards,Gaby[Quoted ext hiddenl

.- . ..-- ~ .,,. .,,.Chance Turner [email protected]> Tue, Apr 21,2009 at 4:43 PMTo: [email protected],Joseph-work

[Quoted text hidden1

From: Chance Turner [mailto:t~~rnerlaw@gmaii,com]Sent:Tue 4/21/2009 4:43 PMTo: Matt Chamben; Joseph M i i e l lSubject. Fwd: Confederate Motorcycles:MotoTenninatorsCome to Life[Quoted text hidden]


Documents

Complaint in Confederate Motors v. Siler