Arbitrator cites Randazza’s “clear and serious breaches of ±duciary duty” in judgment against him (Full Interim Award can be viewed at http://www.LibertyVsRandazza.com)
Las Vegas, NV - A two and a half year arbitration dispute between Excelsior Media and Liberty Media Holdings - the parent company of the “Corbin Fisher” brand - and their former in-house general counsel, Marc Randazza, resulted in an award in favor of the companies and against Randazza on June 3, 2015, with the arbitrator determining Randazza had violated his fiduciary duties owed to them as their attorney and employee, committed numerous ethical violations, breached his employment contract, and caused them hundreds of thousands of dollars in damages over the course of his employment and on through the binding-arbitration proceedings.
The dispute between Randazza and his former employer and client began on August 13, 2012, when company executives discovered Randazza had attempted to secure for himself a $75,000 bribe from an opposing party in copyright infringement litigation.
According to the arbitration’s award, “… Mr. Randazza had been involved in and
successfully concluded negotiations for a bribe in the amount of $75,000, to be paid to Mr. Randazza by the other side in connection with resolution of high-importance litigation…”.
Randazza’s reaction to the discovery of his attempts to secure this bribe was to wipe his company-issued laptop of all data, refuse to hand over the company’s legal files, seize approximately $550,000 worth of the company monies being held in his client trust account, and resign his employment from the company.
Randazza followed up these acts with an arbitration demand, attempting to sue the companies for severance pay and millions in damages over what the arbitrator would ultimately determine were “… disputed, disproved, and unproved allegations…” of discriminatory conduct and sexual harassment against him.
Seeing through Randazza’s claims of discrimination and sexual harassment, the arbitrator - a former federal magistrate judge - ruled “… Mr. Randazza made highly-charged, sexually based ‘core allegations’… which were in the main disproved or not proved.
That failure of proof undermined and impaired Mr. Randazza’s credibility concerning all of his testimony and his claims related to his contentions.”
From the outset, the companies contended Randazza’s claims of discrimination and harassment were entirely fabricated, with Randazza’s goal being to overwhelm his former employer and clients with legal expenses and use the outrageous allegations to intimidate them into capitulation and a settlement.
The arbitrator would eventually agree, in full, with the companies, stating in the award, “The evidence established at hearing was that Mr. Randazza intended that his allegations would induce the company to authorize a settlement ±nancially favorable to Mr. Randazza.”
The arbitrator continued, “Mr. Randazza’s miscalculation… led to an ultimately successful counterattack by E/L, via counterclaims in this arbitration, centering on ethical and legal challenges to Mr. Randazza’s conduct as the company’s general counsel and litigation counsel during his employment by E/L.”
Once the arbitration was underway, the companies went on to discover numerous other instances of misconduct, ethically-prohibited actions, and violations of his employment agreement by Randazza, giving rise to the counterclaims brought against him.
The companies’ counterclaims against Randazza involved repeatedly engaging in attempts to secure bribes from multiple opposing parties in litigation, the illegal use of a hacker to access [prior adverse party] Oron’s computer data, engaging in a host of prohibited conflicts of interest (including representing Liberty’s competitors and tube sites violating Liberty’s copyrights), concealing his representation of adverse parties from the company, building up his personal legal practice in violation of his employment agreement, spoliation of evidence to cover up his ethical violations (including erasing data on company-owned laptops and seizing a company-owned iPhone), and taking
control of client funds in his trust account.
The arbitrator ruled in favor of the companies on all its counterclaims, determining Randazza had indeed engaged in these egregious acts and, in doing so, caused considerable harm to his former employer and client.
The companies’ expert witness in the case, the past Chairman of the Nevada State Bar Committee on Ethics and Professional Responsibility, testi±ed in the arbitration that Randazza’s use of a hacker to illegally access Oron’s privileged e-mails with their attorneys and other con±dential information was one of Randazza’s most glaring ethical
The expert witness would also provide substantial testimony regarding the inappropriate, unethical, and prohibited attempts by Randazza to secure bribes for himself and his engagement in numerous con²icts of interest while representing and being employed by the company.
During the course of his full-time, salaried employment with the company from June 2009 through August 2012, Randazza took on numerous outside clients and built up his private practice, in violation of his employment agreement with the company.
In his ruling, the arbitrator determined Randazza’s work for outside clients was
“significantly beyond the contractually-permitted scope under his employment agreement”, further specifically pointing out such work was “undisclosed (and thus unconsented-to)” and many of these clients’ “interests were actually and
potentially adverse to E/L’s interests”.
The companies argued, and the arbitrator ruled, “The extent of Mr. Randazza’s
contractual material breaches made them also breaches of Fduciary duty”.
Included among these con±icts of interest, all of which the company argued and the arbitrator agreed Randazza had failed to disclose and had attempted to conceal, was Randazza’s representation of XVideos/XNXX, a tube site on which Liberty’s copyrighted material was regularly being discovered.
Ironically, while a full-time employee of the company in 2009, Randazza had spent signiFcant time researching XVideos/XNXX’s corporate structure and ownership as the company was considering Fling suit against them for copyright infringement.
Unbeknownst to his employer and client, Randazza would abandon any efforts at
representing them against XVideos/XNXX, and instead would become XVideos/XNXX’s attorney in exchange for a 5-Fgure retainer fee.
Over the course of nearly 3 years, when informed by his fellow coworkers of infringements of Liberty’s copyrights being discovered on XVideos/XNXX properties, Randazza would direct inquiries, claim the tube site(s) was insulated from litigation, and that Corbin Fisher material being discovered on the tube site(s) was even “fair use” - while not disclosing he’d taken the tube site(s) on as his own clients mere months after becoming a full-time employee.
During the arbitration, Randazza admitted that when company executives decided he should look at Fling suit against XVideos/XNXX for copyright infringement, he ended up disclosing their plans to XVideos/XNXX and tipping them off that a suit was being considered.
The arbitrator had considerable amounts of evidence upon which to base his findings, including material recovered by a forensic examiner hired by the company to retrieve data from the company-owned laptop Randazza wiped and the company-owned iPhone he was issued, tens of thousands of e-mails, text-message transcripts, and other documents discovered and presented through the course of the arbitration.
The arbitration proceedings also included video-taped and transcribed depositions, and 5 consecutive full days of in-person hearings.
The arbitrator would reference much of the evidence, as well as Randazza’s own questionable conduct during the arbitration, in his rulings against him.
Stating Randazza’s failure of proof of his allegations against the companies “undermined and impaired Mr. Randazza’s credibility concerning all of his testimony and his claims and related contentions”, the arbitrator went on to reference con±icting statements and testimony Randazza made in the arbitration, as well as in statements to a state bar in response to a complaint the companies had Fled against him, and in sworn statements to Nevada’s Equal Opportunity Employment Commission.
After the June 3, 2015 ruling by the arbitrator, at least one state bar has reopened an investigation in to Randazza’s conduct, with disciplinary action being a possible outcome.
Due to the nature and extent of Randazza’s breaches of Fduciary duty against his former employer and client, the arbitrator awarded considerable damages to the companies.
Ruling they were entitled to damages for spoliation and conversion (regarding the improper seizure by Randazza of client funds held in his attorney trust account and destruction of evidence on company-owned computers); the companies were entitled to recover damages “at least in the amount of $275,000” resulting from Randazza’s improper conduct during litigation against Oron (including Randazza’s attempts to solicit, arrange, and secure personal bribes from them and his use of a hacker against them without his client’s knowledge or authorization); Randazza was unjustly enriched by pursuing and acquiring monies for and to himself from multiple 3rd parties without his employer’s knowledge when he was supposed to be working on their behalf; the companies are entitled to disgorgement for the considerable amount of time Randazza was employed by them and receiving salary and bonuses, while actually performing work for other clients; the arbitrator also ruled Randazza had to promptly release all of the companies’ funds being improperly held in Randazza’s client trust account.
The arbitrator further ordered the prompt initiation of an audit of Randazza’s trust accounts, and the return of a company laptop Randazza continued to retain.
As of July 8th, 2015, Randazza had still failed to meet most all of the conditions of the arbitrator’s ruling.
The full Interim Award can be viewed at http://www.LibertyVsRandazza.com.
It can also be downloaded at http://www.LibertyVsRandazza.com/IAA_Award_Against_Randazza.pdf
Inquiries may be directed to firstname.lastname@example.org
Excelsior Media and Liberty Media Holdings are involved in the production, ownership, and distribution of adult content primarily under the “Corbin Fisher” brand. Marc Randazza was the salaried, in-house General Counsel for the companies from June 2009 to August 2012.