Huff ..... Huff ..... Huffington Post!
Good Day Readers:
Another well-researched and written article from Vanity Fair. During mid-November last year Messrs Daou and Boyse lauched a $350 million lawsuit against Huffington Post naming Arianna Huffington and Kennith Lerer who were instrumental in founding and financing the enormously successful website. Their claim - they too were significantly involved in it's creation but have subsequently been cut out. The Defendants had until January 19, 2011 to file a Statement of Defence.
If you go to the link at the end of the article you'll find a 15-page document the Plaintiffs submitted (Exhibit A) as proof of their early participation in what was to become The Huffington Post.
While not lawyers we are familiar with the concept of "latches" which is to say courts take a dim view of anyone who has a right but doesn't excerise it for a long period of time. Closer to home, we have the Manitoba Metis Federation's land claim which was heavily criticized by a Court of Queen's Bench Justice for not being brought forward years ago. Then there was Alex Chapman in the Associate Chief Justice Lori Douglas-Anthony King scandal who waited more than 6-years before deciding to go public.
In the case at hand, the Plaintiffs waited over 6-years before filing their lawsuit even blogging for the HP during part of that time. This does not bode well for them.
Sincerely,
Clare L. Pieuk
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Right, James Boyce and Peter Daou in New York City. Left, Arianna Huffington. Boyce and Huffington were once rumored to be sleeping together. (They weren’t.) By Robyn Twomey (Huffington); by Julian Dufort (Boyce and Daou).
Democratic political consultants Peter Daou and James Boyce, both 45, reached the point of no return last November 15. On that day, they sued Arianna Huffington, the doyenne of Democratic dish, for failing to acknowledge what they claim was their critical role in the creation of the Huffington Post, her online juggernaut. The two men say their lawsuit, or its timing, had nothing to do with The Social Network, David Fincher and Aaron Sorkin’s brilliant movie about the legal battles over the founding of Facebook, which had hit theaters a few weeks earlier. Both point out that their first communications to Huffington about the matter occurred at the end of August. But the question still lingers: Why then?—since the two men had never uttered a word to Huffington about their claim for nearly six years and blogged for her during that time.
Daou, the former Internet director for Hillary Clinton for President, whom The New York Times once described as “one of the most prominent political bloggers in the nation,” says the dénouement came for him when he picked up a March 2010 Wired magazine profile of Andrew Breitbart, the conservative blogger and agent provocateur, in which Breitbart brashly claimed that he had created the Huffington Post. “I drafted the plan,” Breitbart said definitively. “They followed the plan.” When Wired asked Huffington to respond to Breitbart’s statement, she could barely contain herself. Although admitting that he helped with the strategy, Huffington said that Breitbart “wasn’t present” at the seminal December 3, 2004, meeting at her Brentwood mansion, where the idea for the Huffington Post was hatched—and therefore could not possibly have been the originator.
In her pointed response, Huffington made no mention of Daou or Boyce, who were at the all-day gathering of the 30 or so influential progressives and Hollywood types—including comedian Larry David and his then wife, Laurie, Hollywood mogul David Geffen, movie producer Brian Grazer, screenwriter Sorkin, legendary TV producer Norman Lear, actress Meg Ryan, and David Thorne, a close friend and former brother-in-law of John Kerry and Obama’s ambassador to Italy—trying to figure out how to win back the White House. “Arianna put together this room,” Boyce recalls. “It was a very powerful room. There’s never been a room like that before.”
Daou and Boyce say that they were the ones who conceived of “a Democratic equivalent of the Drudge Report”—a shorthand description of what the Huffington Post is all about—and called it www.fourteensixty.com (for the number of days between presidential elections). According to their 15-page November 14, 2004, memorandum about “1460,” which Boyce gave Huffington before the December 3 meeting, the core objective of the Web site was to “use the potential of the Internet to the fullest extent possible to continue the momentum started during the [2004 presidential] campaign and re-organize the Democratic Party from the outside in, not the inside out.” Daou and Boyce say that they presented their general thoughts about 1460 at the December 3 meeting. (Full disclosure: Boyce has worked as a consultant for Vanity Fair.)
The lawsuit has all the makings of the kind of gossipy soap opera among onetime friends that often lands on the digital pages of Web sites like the Huffington Post. There is a delicious Schadenfreude about the dispute, and the questions raised are profound: Did Huffington and Huffington Post co-founder Kenneth Lerer take ideas from Daou and Boyce—ideas the two men call “groundbreaking”—without properly compensating or acknowledging them? Or is this just a case of sour grapes, with Daou and Boyce looking to cash in on the hard work of Huffington and Lerer now that the site is successful and valuable?
There is little question anymore that the Huffington Post is a big deal and has helped Huffington, 60, transform herself from a nationally syndicated columnist and flaky, washed-up 2003 candidate for governor of California into a Washington–Hollywood–New York power broker and one of the most sought-after political commentators on the scene today. In 2009, Forbes named her the 12th-most-influential woman in the media.
The Huffington Post has 26 million unique visitors a month, according to the research firm ComScore, and is one of the top 10 current-events and global-news sites in the United States. In October 2008—not exactly a robust time for the market—The New York Times reported estimates that valued the Huffington Post at $200 million. (These days, the unconfirmed value is closer to $350 million, based on expected 2011 revenue of $60 million.)
Daou says he had stewed for some time about not being credited for his role in the Huffington Post’s creation, and then “I was reading about Breitbart. And I hit that part and I said, ‘You know, damn, this is the last straw.’ [Huffington and Lerer] had claimed credit before and every time it just burned. It was like ‘Really? Are you completely erasing us from so essential a part as to how this whole thing came about?’”
He thought about picking up the phone and calling Huffington or e-mailing her to suggest that they just sit down and talk rationally about what had happened once and for all. “We’ve been friends all this time,” he continues. “Essentially the Huffington Post is our family I mean, these were my people. This was my community. This was a Democratic-activist community. It’s a very small, tight-knit community. I love all those people. They worked their asses off to make this site successful. So, it’s like sometimes you have beef with family, sometimes you have beef with a friend. And this was one of those situations.”
Daou spoke with a few lawyers. “They all said the same thing: ‘You have a legal claim if you want to assert it,’” he says.
He called Boyce, a peripatetic strategist and the founder of Common Sense New Media Strategies, a consulting firm for progressive causes, companies, and candidates. Daou and Boyce had met and become friends on the failed Kerry presidential campaign, for which Daou had been paid to direct “blog outreach” and “online rapid response,” and Boyce was an unpaid senior adviser and the chief of staff to Kerry’s brother, Cam.
“It was a flash moment with James, too,” Daou says. “It’s like ‘Yeah, this thing’s been burning me the whole time.’”
The two men hired Partha Chattoraj to see if they could right the perceived wrong. A graduate of Harvard and Yale Law School and a former associate at Wachtell, Lipton, he had set up a small litigation practice in a nondescript office tower on East 40th Street, in Manhattan, in 2007. “It fully dawned they just weren’t going to do the right thing,” Daou explains. “We needed to go there and say to Arianna, ‘Look, you’ve got to make this right. We can’t let that stand.’ And whatever. The chips will just have to fall. I mean, if this becomes a big confrontation, well, it is what it is. We went in with eyes wide open.”
The Facebook Effect
Hoping to avoid litigation, if possible, they sent a long e-mail to Huffington, which Chattoraj reviewed, on August 30. “As we hope you know, both of us value your friendship greatly,” they began. “We have done everything we can to help promote and provide content for HuffPost from the very early days and to bring as many good bloggers to the site as possible. In the context of our friendship with you, we are writing to find some resolution to an open issue that has been of great concern to us ever since we met with you and Kenny [Lerer] at your house in early December 2004 and conceived the Huffington Post together.”
They then gave their version of the details of their role in the December 3 meeting and the breakfast meeting the four of them had the next morning at Huffington’s home—where Boyce was staying—“to discuss our concrete plans for next steps,” done “with the understanding that we were sharing with you ideas and specific plans that we had spent considerable time refining in the lead-up to that larger meeting the previous day. We were both extremely pleased and encouraged by the fact that over the course of that long breakfast we were able to conceive and plan what has become the Huffington Post.”
(Page 2 of 5)
They went on to describe how “unhappy and deeply disappointed” they were “in subsequent weeks and months” when they discovered they were “not included in the continuing development of our ideas, concepts and plans.” True, for years they had “kept silent about our feelings,” partly because “both of us had relationships with third parties who would be harmed if we were to provoke a dispute over this issue” and partly because, “in our hearts, both of us expected, year after year, that the situation would be rectified, because we genuinely believed that you would do the right thing, recognize our early, crucial role in the creation of the site, and acknowledge the partnership understanding we all had after that critical meeting of the four of us.” They wrote that with their previous professional obligations resolved they could finally share how they had been feeling for years. “All we want is to find closure and an equitable resolution of our belief that the partnership we formed and the ideas and plans we contributed to the genesis of the Huffington Post should be recognized in a tangible way.”
On September 7, after Labor Day, Huffington responded. She was incredulous. “I read your email,” she wrote. “I must say, it left me speechless. Your suggestion, after nearly 6 years, that you understood all along that we were in a ‘partnership’ to create and operate the Huffington Post is stunning. And ridiculous. We never entered into any partnership or other agreement with you—either written or oral—concerning ownership of the Huffington Post. During all these years, you never shared in any financial obligation or risk relating to the Huffington Post. You never participated in any kind of management at the Huffington Post. You never shared in or asked for any financial or management information. Hardly a partnership.”
Two days later, the men wrote Huffington again. “It’s unfortunate that you characterized our good faith effort to raise a sensitive subject as ‘ridiculous,’” they wrote. “We’re approaching you as friends, seeking to find an equitable resolution to something that has troubled us.” They noted that, in Huffington’s response, she did not “dispute” any of the “events leading up to and surrounding the meeting we had in your house. There was a reason we sat down with you and Kenny the day after the larger meeting—to develop the website concept we proposed the day before, where we spoke forcefully and shared our specific ideas about the need for a ‘liberal Drudge.’ You’ve mentioned publicly [in Inc. magazine, in February 2010] that in the meeting at your house [you] ‘discussed creating a platform that would be a combination of 24/7 news and a collective blog. That was the beginning of the Huffington Post.’ Indeed it was.”
They reminded Huffington they were “seeking closure” and “what’s fair and equitable based on our initial idea, our agreement during the meeting, and our contributions. We think given the facts about the conception, creation and launch of the site, that in the spirit of friendship and fairness, there should be recognition of our role in the process.”
According to Daou and Boyce, nearly two weeks went by without a response from Huffington, and the two figured she was busy promoting her new book, Third World America, about the dissolution of the American Dream. (The editor of this magazine was a co-host with Tom and Kathy Freston of a party celebrating the book.) On September 21, Boyce re-sent the September 9 e-mail to Huffington. “Please let us know if you have any additional thoughts past your first response,” Boyce wrote. The next evening, Huffington responded. “I’m so sorry but there is nothing for me to say,” she wrote. She directed them to contact her lawyer, the litigator Leslie Fagen, at Paul, Weiss, in New York. “If this is how you wish to proceed,” Boyce replied to Huffington, “Peter and I will respect your wishes.”
So it was war. Two weeks after the Democrats’ “shellacking” in the midterm elections, Daou and Boyce filed their lawsuit against Huffington, Lerer, and TheHuffingtonPost.com, Inc., alleging breach of contract, idea misappropriation, and unjust enrichment, among other charges. They are seeking both recognition and an unspecified amount of financial damages, although they say any money they end up collecting, after legal fees, will be used “to support progressive causes and citizen journalists and bloggers who are active in support of those causes.” Huffington and Lerer have until January 19 to respond formally to the complaint in court.
Huffington’s informal, out-of-court response to the lawsuit was a simple one: Not so fast, guys. It was classic Huffington. “We have now officially entered into Bizzaro World,” she and Lerer wrote in a statement released to the Web site Politico after the lawsuit was filed. “James Boyce and Peter Daou, two political operatives who we rejected going into business with or hiring 6 years ago, and who had absolutely nothing to do with creating, running, financing, or building the Huffington Post, now concoct some scheme saying they own part of the company. Adding to the weird: first they tried to cash in, demanding we pay them to keep their ludicrous claim quiet. Of course, we refused. Then they said they’d go away for just a little money. Again, we refused. Now they’re saying all they want is a donation to ‘progressive causes.’ How noble. Boyce and Daou’s claims are pure fantasy.”
The “Bizzaro World” statement makes Daou and Boyce apoplectic. We are sitting in Boyce’s cramped room in the nearly hip Roger Williams hotel, on lower Madison Avenue, in Manhattan. An air of righteous indignation fills the room. While the Beirut-born Daou is lithe, with close-cropped hair and perpetual stubble, Boyce, who grew up in Back Bay, Boston, and went to Groton and Duke, has a mane of swept-back white hair and an athletic build. Daou, a former jazz pianist and record-company executive, served in the Lebanese Forces. Boyce, who was involved in the start-up of Slingshot, an early and still-prominent new-media advertising agency, is a golf fanatic and tells stories about playing games of one-on-one horse with Duke basketball players.
Of the two, Boyce is the alpha male. But Daou is no wallflower. “Their statement that we made a financial claim, or a financial demand ‘to keep their ludicrous claim quiet,’ is an absolute lie,” Boyce says. “We made no financial demand. Their claim that we then made a second financial claim that was less is an absolute lie The claim that we had absolutely nothing to do with creating, running, financing, or building the Web for the Huffington Post is false.”
Daou tries to interject a comment, but Boyce cuts him off. “Can we finish this please?” he says to Daou.
Boyce then reads from Huffington’s public statement and dissects each sentence. At the “adding to the weird” line, he exclaims, “That’s defamation. We did not demand anything. You see the letter. There’s no demand. We did not make a demand at all. We asked to speak to her. That is false.” Daou and Boyce want to add a claim for libel to their suit, but for the time being they have decided to remain focused on the alleged offenses at hand.
They are steaming.
Political Connections
There once was a happier time. Boyce says he met Huffington during the Kerry campaign, for which they held fund-raisers at her mansion, and got her into the Kerry-family box at the Democratic convention. “I talked to her all the time,” Boyce says. “She’s the best networker in the history of the world.” She introduced him to Laurie and Larry David and Lyn and Norman Lear. “Only about five people could call her house for whom Arianna was always to be disturbed to take those calls,” he remembers. “I was one of the five people.” Some even thought they were sleeping together. (They weren’t.) “We just hit it off,” he says. “She does think about things the way I do.”
On Election Day 2004, after attending a Bruce Springsteen concert for Kerry the night before, he, the Davids, and Kristen Breitweiser, a 9/11 widow and political activist, were visiting polling places in Ohio before boarding a private jet to fly to Boston. Although the exit polls seemed to indicate that Kerry would win the election, Boyce remembers, David Thorne was pacing the rooms at the Westin Hotel, in Copley Square—where the campaign leaders had holed up to watch the election returns—and complaining, “It’s not closing like it should.”
(Page 3 of 5)
Around four a.m., the Kerry brain trust made the decision that Kerry could not win and that he should call Bush and concede. “I walked into the hallway,” Boyce remembers. “I got out my cell phone. First person I called was Arianna. And I called her on her private number at the house, and I just remember telling her, and I was crying.” Huffington tried to comfort Boyce. “Baby, baby, don’t worry, don’t worry,” she told him. “You tried so hard.” Boyce recalls saying over and over, “Yeah, but we lost.”
The memory of the loss still hurts him. “I just remember standing in that hallway talking to her [on the phone]. And it was awful. It was just awful,” he recalls. Boyce says he learned two lessons from the Kerry campaign: Republicans “play the game differently, and the Democratic ‘strategists’ in Washington are absolute idiots.”
After licking his wounds, Boyce got to thinking. “How the fuck did we lose?” he recalls wondering. “I mean, how did that possibly happen? You know what went wrong?” He began reflecting on what could be done differently next time. He says he started talking with Thorne about the campaign’s e-mail list of three million Kerry supporters, a valuable asset. “It was almost certainly the largest political list in the world,” he says. “Definitely the largest Democratic list in the world.” He remembers coming across a statistic—whether true or not is unclear—that in the last 24 hours of the election some 36 million people had visited the Drudge Report. The numbers swirled in his head—125 million voters, 36 million people on Drudge, and the election was lost because of around 100,000 voters in Ohio—and he had his eureka moment: “John Kerry lost that election because he did not have a Drudge,” he says. “That’s why we lost.”
1460 was born.
“The idea was that it was going to be a Web site, and it was going to be a Democratic site,” he says. “I really looked at it like a tool for the Democratic Party. This was going to be our Drudge. And we were going to do what Drudge did, but for the left.” He envisioned a site that was both an aggregator of news and a place where leading progressives—like the Davids, Breitweiser, and liberal lawyer Alan Dershowitz—could share their views directly with the site’s visitors. Ten days after the election, with Daou’s help, Boyce had a draft of the plan for the 1460 Web site.
Boyce says he showed his proposal for the “liberal Drudge” both to Thorne—who had just sold Body & Soul magazine to Martha Stewart’s company for $6 million and had the Kerry campaign’s e-mail list—and to Huffington, his friend with the Hollywood connections. He says he and Thorne discussed how to go about creating the Web site and how to use the e-mail list. Huffington—who, according to the proposal, had “agreed to serve as a Strategic Advisor to 1460 and invest in the company, taking a preferred equity position in exchange for capital and time contribution”—urged Boyce to talk to Lerer, whom he had never met but whom Thorne knew and Daou had spoken with during the campaign. “You’ll love Kenny,” she told Boyce, who then wrote Daou: “Arianna thinks Kenny Lerer will give us the funds we need.”
The next time he was in New York, in mid-November, Boyce says, he met Lerer at his office. He did not give Lerer a copy of the 1460 document or talk about the idea specifically, other than to say that he and Daou had an idea for a Web site. Daou was to meet Huffington for the first time on November 30 in New York City to expand on their thinking for 1460, but Huffington canceled the meeting. By then she had already told Boyce that she was planning the December 3 meeting at her house to bring together “the smartest and best people” in the Democratic Party “to figure out what we should do next.” Huffington’s friends Callie Khouri (winner of the 1991 Academy Award for best screenplay for Thelma & Louise) and Victoria Hopper (the fifth wife of the late actor Dennis Hopper) had suggested the idea for the gathering to Huffington, and they were organizing it together. “Arianna, you’ve got to let me bring Peter Daou and David Thorne,” Boyce recalls he told Huffington when he heard about the December 3 meeting. “It is all about the Internet. O.K.? All about the Internet.”
The December 3 meeting was billed as an opportunity for “Rebranding the Democratic Party,” and the idea was that, “with the right message and the right strategies,” the Democrats could regain power in 2006, much the way the Republicans had done in 1994, “but only if they finally learn from three consecutive defeats (2000, 2002, 2004) and offer a bold alternative vision to the country.” Boyce and Thorne (and two others) were on the agenda, after lunch, to discuss “Reinventing Political Campaigns” by leading a discussion on how “to break the stranglehold of the professional consulting losing class” and how to “use the Internet in a central role—to spread the message, fundraise and build citizen participation.”
Many of the participants seem to remember few of the details of the December 3 meeting, which is not surprising, because, as a transcript of it given to me by Chattoraj shows, it was mainly a gab session for Democratic breast-beating over the Kerry loss and cheerleading for the future. (Of the idea for 1460, Larry David, who is an investor in the Huffington Post, says, “All I remember is Arianna telling me about this on a number of occasions and feeling sorry for her because I thought it was such a terrible idea.”) As Boyce is happy to exclaim over and over, “Kenny Lerer did not say one word in that meeting.” (Lerer would not comment for this article.) That’s true, according to the transcript, but curiously it also shows that Boyce himself said almost nothing and Daou didn’t contribute much more, beyond a few short comments exhorting the Democrats to exploit the Internet, such as “We need to develop a dominant position within the Internet. But Washington doesn’t have a clue. They don’t know what a powerful force has been started.” Boyce and Daou made no presentation about 1460 to the group.
According to the complaint, the movie director Robert Greenwald e-mailed Daou four days after the meeting about his ideas for “our Drudge.” Tom Freston, a founder of MTV (who with his wife, Kathy, had introduced Lerer and Huffington to each other at a restaurant in Manhattan in 2003, but who has never met Boyce or Daou), points out, however, that the idea for a “liberal Drudge” was not the “most innovative idea in the world” at that time.
Creation Myths
The next morning, December 4, Huffington, Lerer, Daou, and Boyce met for breakfast at Huffington’s house and “confirmed in detail,” according to the complaint, “Peter’s and James’ concrete ideas and plans for the proposed website. They agreed that the website should highlight Huffington’s personality more effectively than her then-existing website at ‘ariannaonline.com.’” They spoke about getting “scoops” and “exclusives” from their contacts in the media and the Democratic Party and recommended that “luminaries and public figures should be invited to blog on the planned liberal website.” They spoke about hiring viral-marketing specialist Jonah Peretti. Huffington mentioned hiring Breitbart, then at the Drudge Report, to help, too. (Daou and Boyce recall thinking it strange at the time that Huffington would suggest hiring a conservative blogger.) They had a quick discussion about what the name of the site should be, considering “The Stassinopoulos Report” (Huffington’s maiden name), “Arianna’s on Fire,” and “Arianna Says,” but agreed that a separate session to brainstorm the name should be convened.
According to the complaint, as the breakfast meeting broke up, they “all shook hands,” and Huffington said, “It will be great to work together.” After the December 4 meeting, “Peter and James believed they were partners with Huffington and Lerer in a joint venture to develop the website.”
(Page 4 of 5)
For the next three weeks or so, Daou and Boyce worked diligently to perfect their ideas for the new Web site, they say—drafting memorandums and strategic plans and speaking on the phone with Huffington and Lerer. On December 7, Boyce and Daou sent “a follow-up memo” that attempted to set out responsibilities going forward, including what Boyce and Daou would do as the executives of the site. As for Huffington and Lerer, “they were going to kind of be senior partners—they’re substantially older than us,” Boyce explains. After receiving the December 7 document, Lerer began voicing his doubts about Boyce and Daou to Huffington. “We should talk before I get back to him,” he wrote her in one December 7 e-mail. “This doesn’t work for me on many levels.” Boyce and Daou were not aware of Lerer’s views or the timing of his e-mail. (Evidently, Lerer “just dislikes Peter,” Boyce says, because Daou did not pay enough attention to Lerer’s ideas during the Kerry campaign.)
On December 12, according to the complaint, they wrote to Thorne stating “they had entered into a partnership with Huffington and Lerer to develop a liberal news aggregation and blogging website.” They explained the site would be “financed in partnership with Kenny Lerer” and combine “politics, Hollywood, and more in a fun, informative, progressive site that capture’s Arianna’s fiery personality.”
Notwithstanding Lerer’s December 7 e-mail, 10 days later, according to the complaint, Huffington and Lerer asked Daou and Boyce to provide “a refined blueprint and strategic plan for the Huffington Post” and “to begin constructing the site.”
Three days later, Huffington told Boyce that Lerer would fund the site for six months based on the budget and the strategic plan that Boyce and Daou were working on—and which they provided to Huffington on December 22, including an estimate that to run the site for six months would cost between $200,000 and $270,000.
Then the scent went cold. “Meanwhile, Huffington and Lerer took what Peter and James had given them, and over the subsequent weeks and months, used those ideas, plans and materials to raise at least $2 million for the prospective website, without informing or crediting Peter or James,” according to the complaint, “or giving them the opportunity to invest their own resources or raise their own financing for the website.” In January 2005, Huffington and Lerer hired Breitbart away from Drudge and then “caused the website, based on Peter’s and James’ ideas, initial business plan, and strategic insights, to be developed without the participation of Peter and James.” Jonah Peretti was named a “Founding Partner.” Says Daou without equivocation, “The Huffington Post would not exist without James and me.”
Mario Ruiz, the suave media-relations man for the Huffington Post, responds, “According to Boyce and Daou, six years ago they created the Huffington Post but got cut out of the deal. And then did nothing about it. For six years. Six years! If they really thought they owned part of HuffPost, over the last 72 months wouldn’t they have contacted us to complain? Asked us to credit them somewhere on the site? Demanded to participate in the project? Insisted on getting stock? Something? Anything?! In short, wouldn’t they have acted like owners rather than doing nothing for more than half a decade while the real owners did all the work, invested all the money, and took all the risk? Of course they would have. And the reason they didn’t is because they knew then—and know now—that they have absolutely no claim to ownership.”
Huffington declined to comment for this article, and she made no mention of Daou and Boyce and their lawsuit when she was interviewed in mid-December by the Financial Times. There, however, Simon Schama described her version of the birth of the Huffington Post: “She could see ‘how conversation’ about politics ‘was moving online’ and wanted ‘to create a platform’ that would organize its speakers and its audience. But she was also motivated by a strong sense that the old media had betrayed their calling by complaisance.”
For his part, Breitbart said the fighting among the four protagonists amuses him, especially since Huffington fired him after six months. Although he had not read the complaint, he said with barely repressed glee, he stands by what he said in Wired—that he was the creator—as “100 percent truthful,” and he looks forward to “being deposed on this matter. I will set the record straight. There’s a long history that could be found in documentation and e-mails in Arianna Huffington’s possession that will be very helpful and illuminating.” He added that “there is nobody who likes a courtroom drama more than me” and “all I know is what I did and what my role was. I am finding this all to be bizarrely poetic.”
The Huffington Post launched on May 9, 2005, without Daou or Boyce as investors or employees. “The site as it launched implemented all of Peter’s and James’ ideas, even down to the inclusion of specific political celebrity bloggers whom Peter and James had suggested, and including a unique combination of features described in the blueprint,” according to the complaint.
Boyce and Daou’s initial proposal for 1460 is their strongest argument for having had a role in creating the Huffington Post. But to say it was a “blueprint” for the site is an exaggeration. A third of the proposal recounts the successes of the Kerry campaign in using the Internet and the corresponding success of the Republicans with the Drudge Report. Much of the rest merely describes ideas about the Internet that were much in circulation at the time: for instance, news delivered by aggregating stories from Web sites—a clear take on the Drudge Report, but a practice that was seen in the earliest days of the Internet with such Web sites as NewsNow. Several pages were devoted to “a ring of sites that … will become gathering places online”—an idea that seems not to have been incorporated in the Huffington Post. The idea of celebrity bloggers was hardly original, and although a few people Daou and Boyce suggested, such as Alan Dershowitz and Kristen Breitweiser, did make it onto the site, most of the early bloggers, such as Walter Cronkite, Tina Brown, Mike Nichols, Jon Corzine, Ellen Degeneres, David Mamet, and John Cusack, appear nowhere in their proposal.
Both Daou and Boyce have regularly blogged for the Web site, and Boyce—the more frequent contributor of the two—filed his last post on October 7, 2010. When Boyce appeared as a political commentator on cable television, including MSNBC, he would talk up the Huffington Post. In December 2008, The Wall Street Journal observed that Daou’s blog on the Huffington Post attracted readers to the site, especially for his “musings on the role the Internet played in the national elections.”
Indeed, until the August 30, 2010, e-mail to Huffington, neither Daou nor Boyce ever voiced any frustration with her or Lerer about being cut out of the Huffington Post creation myth.
This fact, more than any other, seems to weaken their case. What really gets Huffington’s goat about Daou and Boyce, according to someone who knows her well, is their chutzpah. “The fact that you mention the Facebook matter—the day Facebook went up, you had claims made against it. That’s only human nature,” this person says. “If they really thought they had created the Huffington Post, when the Huffington Post was launched, they would not have said anything? They would not have sent a single letter but kept blogging on the Huffington Post? Can you imagine the equivalent in Facebook? Can you imagine the people who claim they created Facebook creating a Facebook account and then participating in what they thought was stolen from them? It defies human nature. It is the point of all this for which there is no answer.”
Daou and Boyce say they were busy working with clients who might have been offended by a public confrontation with Huffington. They are anxious to drive home that they believe their case is an ethical issue. “At the fundamental level, it is wrong to take someone’s ideas, take someone’s efforts, take someone’s work, take someone’s vision, and then completely claim it as your own and not recognize that those people helped,” explains Boyce as he paces back and forth in his room at the Roger Williams.
(Page 5 of 5)
Boyce finally gives Daou some airtime, and the coiled cobra lunges: “We’re basically saying, something happened back then and it was wrong. We came [up] with the idea. We all shook hands. We’re going to build it together. We started presenting budgets. We wanted to reach the point where we operationalize it and put it into writing and incorporate it. We did this thing together. And you just walked away. There was never a rejection.”
“In the end, it’s about doing the right thing,” Boyce says emphatically.
http://www.vanityfair.com/business/features/2011/02/huffington-documents-201102
Another well-researched and written article from Vanity Fair. During mid-November last year Messrs Daou and Boyse lauched a $350 million lawsuit against Huffington Post naming Arianna Huffington and Kennith Lerer who were instrumental in founding and financing the enormously successful website. Their claim - they too were significantly involved in it's creation but have subsequently been cut out. The Defendants had until January 19, 2011 to file a Statement of Defence.
If you go to the link at the end of the article you'll find a 15-page document the Plaintiffs submitted (Exhibit A) as proof of their early participation in what was to become The Huffington Post.
While not lawyers we are familiar with the concept of "latches" which is to say courts take a dim view of anyone who has a right but doesn't excerise it for a long period of time. Closer to home, we have the Manitoba Metis Federation's land claim which was heavily criticized by a Court of Queen's Bench Justice for not being brought forward years ago. Then there was Alex Chapman in the Associate Chief Justice Lori Douglas-Anthony King scandal who waited more than 6-years before deciding to go public.
In the case at hand, the Plaintiffs waited over 6-years before filing their lawsuit even blogging for the HP during part of that time. This does not bode well for them.
Sincerely,
Clare L. Pieuk
__________________________________________________
Business
Huffing and Puffing
Huffing and Puffing
Reminiscent of Facebook’s Mark Zuckerberg, Arianna Huffington is being sued by two political consultants, Peter Daou and James Boyce, who claim a critical role in creating her top-ranked Web site, the Huffington Post. So what exactly happened in the fall of 2004 when Huffington, Daou, Boyce, and such liberal lights as David Geffen, Larry David, and Norman Lear discussed a Democratic answer to the Drudge Report? And why did the two men wait nearly six years to claim credit? The author walks back their she-said-we-said collision.
By William D. Cohan•Photograph by Julian Dufort February 2011
Right, James Boyce and Peter Daou in New York City. Left, Arianna Huffington. Boyce and Huffington were once rumored to be sleeping together. (They weren’t.) By Robyn Twomey (Huffington); by Julian Dufort (Boyce and Daou). Democratic political consultants Peter Daou and James Boyce, both 45, reached the point of no return last November 15. On that day, they sued Arianna Huffington, the doyenne of Democratic dish, for failing to acknowledge what they claim was their critical role in the creation of the Huffington Post, her online juggernaut. The two men say their lawsuit, or its timing, had nothing to do with The Social Network, David Fincher and Aaron Sorkin’s brilliant movie about the legal battles over the founding of Facebook, which had hit theaters a few weeks earlier. Both point out that their first communications to Huffington about the matter occurred at the end of August. But the question still lingers: Why then?—since the two men had never uttered a word to Huffington about their claim for nearly six years and blogged for her during that time.
Daou, the former Internet director for Hillary Clinton for President, whom The New York Times once described as “one of the most prominent political bloggers in the nation,” says the dénouement came for him when he picked up a March 2010 Wired magazine profile of Andrew Breitbart, the conservative blogger and agent provocateur, in which Breitbart brashly claimed that he had created the Huffington Post. “I drafted the plan,” Breitbart said definitively. “They followed the plan.” When Wired asked Huffington to respond to Breitbart’s statement, she could barely contain herself. Although admitting that he helped with the strategy, Huffington said that Breitbart “wasn’t present” at the seminal December 3, 2004, meeting at her Brentwood mansion, where the idea for the Huffington Post was hatched—and therefore could not possibly have been the originator.
In her pointed response, Huffington made no mention of Daou or Boyce, who were at the all-day gathering of the 30 or so influential progressives and Hollywood types—including comedian Larry David and his then wife, Laurie, Hollywood mogul David Geffen, movie producer Brian Grazer, screenwriter Sorkin, legendary TV producer Norman Lear, actress Meg Ryan, and David Thorne, a close friend and former brother-in-law of John Kerry and Obama’s ambassador to Italy—trying to figure out how to win back the White House. “Arianna put together this room,” Boyce recalls. “It was a very powerful room. There’s never been a room like that before.”
Daou and Boyce say that they were the ones who conceived of “a Democratic equivalent of the Drudge Report”—a shorthand description of what the Huffington Post is all about—and called it www.fourteensixty.com (for the number of days between presidential elections). According to their 15-page November 14, 2004, memorandum about “1460,” which Boyce gave Huffington before the December 3 meeting, the core objective of the Web site was to “use the potential of the Internet to the fullest extent possible to continue the momentum started during the [2004 presidential] campaign and re-organize the Democratic Party from the outside in, not the inside out.” Daou and Boyce say that they presented their general thoughts about 1460 at the December 3 meeting. (Full disclosure: Boyce has worked as a consultant for Vanity Fair.)
The lawsuit has all the makings of the kind of gossipy soap opera among onetime friends that often lands on the digital pages of Web sites like the Huffington Post. There is a delicious Schadenfreude about the dispute, and the questions raised are profound: Did Huffington and Huffington Post co-founder Kenneth Lerer take ideas from Daou and Boyce—ideas the two men call “groundbreaking”—without properly compensating or acknowledging them? Or is this just a case of sour grapes, with Daou and Boyce looking to cash in on the hard work of Huffington and Lerer now that the site is successful and valuable?
There is little question anymore that the Huffington Post is a big deal and has helped Huffington, 60, transform herself from a nationally syndicated columnist and flaky, washed-up 2003 candidate for governor of California into a Washington–Hollywood–New York power broker and one of the most sought-after political commentators on the scene today. In 2009, Forbes named her the 12th-most-influential woman in the media.
The Huffington Post has 26 million unique visitors a month, according to the research firm ComScore, and is one of the top 10 current-events and global-news sites in the United States. In October 2008—not exactly a robust time for the market—The New York Times reported estimates that valued the Huffington Post at $200 million. (These days, the unconfirmed value is closer to $350 million, based on expected 2011 revenue of $60 million.)
Daou says he had stewed for some time about not being credited for his role in the Huffington Post’s creation, and then “I was reading about Breitbart. And I hit that part and I said, ‘You know, damn, this is the last straw.’ [Huffington and Lerer] had claimed credit before and every time it just burned. It was like ‘Really? Are you completely erasing us from so essential a part as to how this whole thing came about?’”
He thought about picking up the phone and calling Huffington or e-mailing her to suggest that they just sit down and talk rationally about what had happened once and for all. “We’ve been friends all this time,” he continues. “Essentially the Huffington Post is our family I mean, these were my people. This was my community. This was a Democratic-activist community. It’s a very small, tight-knit community. I love all those people. They worked their asses off to make this site successful. So, it’s like sometimes you have beef with family, sometimes you have beef with a friend. And this was one of those situations.”
Daou spoke with a few lawyers. “They all said the same thing: ‘You have a legal claim if you want to assert it,’” he says.
He called Boyce, a peripatetic strategist and the founder of Common Sense New Media Strategies, a consulting firm for progressive causes, companies, and candidates. Daou and Boyce had met and become friends on the failed Kerry presidential campaign, for which Daou had been paid to direct “blog outreach” and “online rapid response,” and Boyce was an unpaid senior adviser and the chief of staff to Kerry’s brother, Cam.
“It was a flash moment with James, too,” Daou says. “It’s like ‘Yeah, this thing’s been burning me the whole time.’”
The two men hired Partha Chattoraj to see if they could right the perceived wrong. A graduate of Harvard and Yale Law School and a former associate at Wachtell, Lipton, he had set up a small litigation practice in a nondescript office tower on East 40th Street, in Manhattan, in 2007. “It fully dawned they just weren’t going to do the right thing,” Daou explains. “We needed to go there and say to Arianna, ‘Look, you’ve got to make this right. We can’t let that stand.’ And whatever. The chips will just have to fall. I mean, if this becomes a big confrontation, well, it is what it is. We went in with eyes wide open.”
The Facebook Effect
Hoping to avoid litigation, if possible, they sent a long e-mail to Huffington, which Chattoraj reviewed, on August 30. “As we hope you know, both of us value your friendship greatly,” they began. “We have done everything we can to help promote and provide content for HuffPost from the very early days and to bring as many good bloggers to the site as possible. In the context of our friendship with you, we are writing to find some resolution to an open issue that has been of great concern to us ever since we met with you and Kenny [Lerer] at your house in early December 2004 and conceived the Huffington Post together.”
They then gave their version of the details of their role in the December 3 meeting and the breakfast meeting the four of them had the next morning at Huffington’s home—where Boyce was staying—“to discuss our concrete plans for next steps,” done “with the understanding that we were sharing with you ideas and specific plans that we had spent considerable time refining in the lead-up to that larger meeting the previous day. We were both extremely pleased and encouraged by the fact that over the course of that long breakfast we were able to conceive and plan what has become the Huffington Post.”
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They went on to describe how “unhappy and deeply disappointed” they were “in subsequent weeks and months” when they discovered they were “not included in the continuing development of our ideas, concepts and plans.” True, for years they had “kept silent about our feelings,” partly because “both of us had relationships with third parties who would be harmed if we were to provoke a dispute over this issue” and partly because, “in our hearts, both of us expected, year after year, that the situation would be rectified, because we genuinely believed that you would do the right thing, recognize our early, crucial role in the creation of the site, and acknowledge the partnership understanding we all had after that critical meeting of the four of us.” They wrote that with their previous professional obligations resolved they could finally share how they had been feeling for years. “All we want is to find closure and an equitable resolution of our belief that the partnership we formed and the ideas and plans we contributed to the genesis of the Huffington Post should be recognized in a tangible way.”
On September 7, after Labor Day, Huffington responded. She was incredulous. “I read your email,” she wrote. “I must say, it left me speechless. Your suggestion, after nearly 6 years, that you understood all along that we were in a ‘partnership’ to create and operate the Huffington Post is stunning. And ridiculous. We never entered into any partnership or other agreement with you—either written or oral—concerning ownership of the Huffington Post. During all these years, you never shared in any financial obligation or risk relating to the Huffington Post. You never participated in any kind of management at the Huffington Post. You never shared in or asked for any financial or management information. Hardly a partnership.”
Two days later, the men wrote Huffington again. “It’s unfortunate that you characterized our good faith effort to raise a sensitive subject as ‘ridiculous,’” they wrote. “We’re approaching you as friends, seeking to find an equitable resolution to something that has troubled us.” They noted that, in Huffington’s response, she did not “dispute” any of the “events leading up to and surrounding the meeting we had in your house. There was a reason we sat down with you and Kenny the day after the larger meeting—to develop the website concept we proposed the day before, where we spoke forcefully and shared our specific ideas about the need for a ‘liberal Drudge.’ You’ve mentioned publicly [in Inc. magazine, in February 2010] that in the meeting at your house [you] ‘discussed creating a platform that would be a combination of 24/7 news and a collective blog. That was the beginning of the Huffington Post.’ Indeed it was.”
They reminded Huffington they were “seeking closure” and “what’s fair and equitable based on our initial idea, our agreement during the meeting, and our contributions. We think given the facts about the conception, creation and launch of the site, that in the spirit of friendship and fairness, there should be recognition of our role in the process.”
According to Daou and Boyce, nearly two weeks went by without a response from Huffington, and the two figured she was busy promoting her new book, Third World America, about the dissolution of the American Dream. (The editor of this magazine was a co-host with Tom and Kathy Freston of a party celebrating the book.) On September 21, Boyce re-sent the September 9 e-mail to Huffington. “Please let us know if you have any additional thoughts past your first response,” Boyce wrote. The next evening, Huffington responded. “I’m so sorry but there is nothing for me to say,” she wrote. She directed them to contact her lawyer, the litigator Leslie Fagen, at Paul, Weiss, in New York. “If this is how you wish to proceed,” Boyce replied to Huffington, “Peter and I will respect your wishes.”
So it was war. Two weeks after the Democrats’ “shellacking” in the midterm elections, Daou and Boyce filed their lawsuit against Huffington, Lerer, and TheHuffingtonPost.com, Inc., alleging breach of contract, idea misappropriation, and unjust enrichment, among other charges. They are seeking both recognition and an unspecified amount of financial damages, although they say any money they end up collecting, after legal fees, will be used “to support progressive causes and citizen journalists and bloggers who are active in support of those causes.” Huffington and Lerer have until January 19 to respond formally to the complaint in court.
Huffington’s informal, out-of-court response to the lawsuit was a simple one: Not so fast, guys. It was classic Huffington. “We have now officially entered into Bizzaro World,” she and Lerer wrote in a statement released to the Web site Politico after the lawsuit was filed. “James Boyce and Peter Daou, two political operatives who we rejected going into business with or hiring 6 years ago, and who had absolutely nothing to do with creating, running, financing, or building the Huffington Post, now concoct some scheme saying they own part of the company. Adding to the weird: first they tried to cash in, demanding we pay them to keep their ludicrous claim quiet. Of course, we refused. Then they said they’d go away for just a little money. Again, we refused. Now they’re saying all they want is a donation to ‘progressive causes.’ How noble. Boyce and Daou’s claims are pure fantasy.”
The “Bizzaro World” statement makes Daou and Boyce apoplectic. We are sitting in Boyce’s cramped room in the nearly hip Roger Williams hotel, on lower Madison Avenue, in Manhattan. An air of righteous indignation fills the room. While the Beirut-born Daou is lithe, with close-cropped hair and perpetual stubble, Boyce, who grew up in Back Bay, Boston, and went to Groton and Duke, has a mane of swept-back white hair and an athletic build. Daou, a former jazz pianist and record-company executive, served in the Lebanese Forces. Boyce, who was involved in the start-up of Slingshot, an early and still-prominent new-media advertising agency, is a golf fanatic and tells stories about playing games of one-on-one horse with Duke basketball players.
Of the two, Boyce is the alpha male. But Daou is no wallflower. “Their statement that we made a financial claim, or a financial demand ‘to keep their ludicrous claim quiet,’ is an absolute lie,” Boyce says. “We made no financial demand. Their claim that we then made a second financial claim that was less is an absolute lie The claim that we had absolutely nothing to do with creating, running, financing, or building the Web for the Huffington Post is false.”
Daou tries to interject a comment, but Boyce cuts him off. “Can we finish this please?” he says to Daou.
Boyce then reads from Huffington’s public statement and dissects each sentence. At the “adding to the weird” line, he exclaims, “That’s defamation. We did not demand anything. You see the letter. There’s no demand. We did not make a demand at all. We asked to speak to her. That is false.” Daou and Boyce want to add a claim for libel to their suit, but for the time being they have decided to remain focused on the alleged offenses at hand.
They are steaming.
Political Connections
There once was a happier time. Boyce says he met Huffington during the Kerry campaign, for which they held fund-raisers at her mansion, and got her into the Kerry-family box at the Democratic convention. “I talked to her all the time,” Boyce says. “She’s the best networker in the history of the world.” She introduced him to Laurie and Larry David and Lyn and Norman Lear. “Only about five people could call her house for whom Arianna was always to be disturbed to take those calls,” he remembers. “I was one of the five people.” Some even thought they were sleeping together. (They weren’t.) “We just hit it off,” he says. “She does think about things the way I do.”
On Election Day 2004, after attending a Bruce Springsteen concert for Kerry the night before, he, the Davids, and Kristen Breitweiser, a 9/11 widow and political activist, were visiting polling places in Ohio before boarding a private jet to fly to Boston. Although the exit polls seemed to indicate that Kerry would win the election, Boyce remembers, David Thorne was pacing the rooms at the Westin Hotel, in Copley Square—where the campaign leaders had holed up to watch the election returns—and complaining, “It’s not closing like it should.”
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Around four a.m., the Kerry brain trust made the decision that Kerry could not win and that he should call Bush and concede. “I walked into the hallway,” Boyce remembers. “I got out my cell phone. First person I called was Arianna. And I called her on her private number at the house, and I just remember telling her, and I was crying.” Huffington tried to comfort Boyce. “Baby, baby, don’t worry, don’t worry,” she told him. “You tried so hard.” Boyce recalls saying over and over, “Yeah, but we lost.”
The memory of the loss still hurts him. “I just remember standing in that hallway talking to her [on the phone]. And it was awful. It was just awful,” he recalls. Boyce says he learned two lessons from the Kerry campaign: Republicans “play the game differently, and the Democratic ‘strategists’ in Washington are absolute idiots.”
After licking his wounds, Boyce got to thinking. “How the fuck did we lose?” he recalls wondering. “I mean, how did that possibly happen? You know what went wrong?” He began reflecting on what could be done differently next time. He says he started talking with Thorne about the campaign’s e-mail list of three million Kerry supporters, a valuable asset. “It was almost certainly the largest political list in the world,” he says. “Definitely the largest Democratic list in the world.” He remembers coming across a statistic—whether true or not is unclear—that in the last 24 hours of the election some 36 million people had visited the Drudge Report. The numbers swirled in his head—125 million voters, 36 million people on Drudge, and the election was lost because of around 100,000 voters in Ohio—and he had his eureka moment: “John Kerry lost that election because he did not have a Drudge,” he says. “That’s why we lost.”
1460 was born.
“The idea was that it was going to be a Web site, and it was going to be a Democratic site,” he says. “I really looked at it like a tool for the Democratic Party. This was going to be our Drudge. And we were going to do what Drudge did, but for the left.” He envisioned a site that was both an aggregator of news and a place where leading progressives—like the Davids, Breitweiser, and liberal lawyer Alan Dershowitz—could share their views directly with the site’s visitors. Ten days after the election, with Daou’s help, Boyce had a draft of the plan for the 1460 Web site.
Boyce says he showed his proposal for the “liberal Drudge” both to Thorne—who had just sold Body & Soul magazine to Martha Stewart’s company for $6 million and had the Kerry campaign’s e-mail list—and to Huffington, his friend with the Hollywood connections. He says he and Thorne discussed how to go about creating the Web site and how to use the e-mail list. Huffington—who, according to the proposal, had “agreed to serve as a Strategic Advisor to 1460 and invest in the company, taking a preferred equity position in exchange for capital and time contribution”—urged Boyce to talk to Lerer, whom he had never met but whom Thorne knew and Daou had spoken with during the campaign. “You’ll love Kenny,” she told Boyce, who then wrote Daou: “Arianna thinks Kenny Lerer will give us the funds we need.”
The next time he was in New York, in mid-November, Boyce says, he met Lerer at his office. He did not give Lerer a copy of the 1460 document or talk about the idea specifically, other than to say that he and Daou had an idea for a Web site. Daou was to meet Huffington for the first time on November 30 in New York City to expand on their thinking for 1460, but Huffington canceled the meeting. By then she had already told Boyce that she was planning the December 3 meeting at her house to bring together “the smartest and best people” in the Democratic Party “to figure out what we should do next.” Huffington’s friends Callie Khouri (winner of the 1991 Academy Award for best screenplay for Thelma & Louise) and Victoria Hopper (the fifth wife of the late actor Dennis Hopper) had suggested the idea for the gathering to Huffington, and they were organizing it together. “Arianna, you’ve got to let me bring Peter Daou and David Thorne,” Boyce recalls he told Huffington when he heard about the December 3 meeting. “It is all about the Internet. O.K.? All about the Internet.”
The December 3 meeting was billed as an opportunity for “Rebranding the Democratic Party,” and the idea was that, “with the right message and the right strategies,” the Democrats could regain power in 2006, much the way the Republicans had done in 1994, “but only if they finally learn from three consecutive defeats (2000, 2002, 2004) and offer a bold alternative vision to the country.” Boyce and Thorne (and two others) were on the agenda, after lunch, to discuss “Reinventing Political Campaigns” by leading a discussion on how “to break the stranglehold of the professional consulting losing class” and how to “use the Internet in a central role—to spread the message, fundraise and build citizen participation.”
Many of the participants seem to remember few of the details of the December 3 meeting, which is not surprising, because, as a transcript of it given to me by Chattoraj shows, it was mainly a gab session for Democratic breast-beating over the Kerry loss and cheerleading for the future. (Of the idea for 1460, Larry David, who is an investor in the Huffington Post, says, “All I remember is Arianna telling me about this on a number of occasions and feeling sorry for her because I thought it was such a terrible idea.”) As Boyce is happy to exclaim over and over, “Kenny Lerer did not say one word in that meeting.” (Lerer would not comment for this article.) That’s true, according to the transcript, but curiously it also shows that Boyce himself said almost nothing and Daou didn’t contribute much more, beyond a few short comments exhorting the Democrats to exploit the Internet, such as “We need to develop a dominant position within the Internet. But Washington doesn’t have a clue. They don’t know what a powerful force has been started.” Boyce and Daou made no presentation about 1460 to the group.
According to the complaint, the movie director Robert Greenwald e-mailed Daou four days after the meeting about his ideas for “our Drudge.” Tom Freston, a founder of MTV (who with his wife, Kathy, had introduced Lerer and Huffington to each other at a restaurant in Manhattan in 2003, but who has never met Boyce or Daou), points out, however, that the idea for a “liberal Drudge” was not the “most innovative idea in the world” at that time.
Creation Myths
The next morning, December 4, Huffington, Lerer, Daou, and Boyce met for breakfast at Huffington’s house and “confirmed in detail,” according to the complaint, “Peter’s and James’ concrete ideas and plans for the proposed website. They agreed that the website should highlight Huffington’s personality more effectively than her then-existing website at ‘ariannaonline.com.’” They spoke about getting “scoops” and “exclusives” from their contacts in the media and the Democratic Party and recommended that “luminaries and public figures should be invited to blog on the planned liberal website.” They spoke about hiring viral-marketing specialist Jonah Peretti. Huffington mentioned hiring Breitbart, then at the Drudge Report, to help, too. (Daou and Boyce recall thinking it strange at the time that Huffington would suggest hiring a conservative blogger.) They had a quick discussion about what the name of the site should be, considering “The Stassinopoulos Report” (Huffington’s maiden name), “Arianna’s on Fire,” and “Arianna Says,” but agreed that a separate session to brainstorm the name should be convened.
According to the complaint, as the breakfast meeting broke up, they “all shook hands,” and Huffington said, “It will be great to work together.” After the December 4 meeting, “Peter and James believed they were partners with Huffington and Lerer in a joint venture to develop the website.”
(Page 4 of 5)
For the next three weeks or so, Daou and Boyce worked diligently to perfect their ideas for the new Web site, they say—drafting memorandums and strategic plans and speaking on the phone with Huffington and Lerer. On December 7, Boyce and Daou sent “a follow-up memo” that attempted to set out responsibilities going forward, including what Boyce and Daou would do as the executives of the site. As for Huffington and Lerer, “they were going to kind of be senior partners—they’re substantially older than us,” Boyce explains. After receiving the December 7 document, Lerer began voicing his doubts about Boyce and Daou to Huffington. “We should talk before I get back to him,” he wrote her in one December 7 e-mail. “This doesn’t work for me on many levels.” Boyce and Daou were not aware of Lerer’s views or the timing of his e-mail. (Evidently, Lerer “just dislikes Peter,” Boyce says, because Daou did not pay enough attention to Lerer’s ideas during the Kerry campaign.)
On December 12, according to the complaint, they wrote to Thorne stating “they had entered into a partnership with Huffington and Lerer to develop a liberal news aggregation and blogging website.” They explained the site would be “financed in partnership with Kenny Lerer” and combine “politics, Hollywood, and more in a fun, informative, progressive site that capture’s Arianna’s fiery personality.”
Notwithstanding Lerer’s December 7 e-mail, 10 days later, according to the complaint, Huffington and Lerer asked Daou and Boyce to provide “a refined blueprint and strategic plan for the Huffington Post” and “to begin constructing the site.”
Three days later, Huffington told Boyce that Lerer would fund the site for six months based on the budget and the strategic plan that Boyce and Daou were working on—and which they provided to Huffington on December 22, including an estimate that to run the site for six months would cost between $200,000 and $270,000.
Then the scent went cold. “Meanwhile, Huffington and Lerer took what Peter and James had given them, and over the subsequent weeks and months, used those ideas, plans and materials to raise at least $2 million for the prospective website, without informing or crediting Peter or James,” according to the complaint, “or giving them the opportunity to invest their own resources or raise their own financing for the website.” In January 2005, Huffington and Lerer hired Breitbart away from Drudge and then “caused the website, based on Peter’s and James’ ideas, initial business plan, and strategic insights, to be developed without the participation of Peter and James.” Jonah Peretti was named a “Founding Partner.” Says Daou without equivocation, “The Huffington Post would not exist without James and me.”
Mario Ruiz, the suave media-relations man for the Huffington Post, responds, “According to Boyce and Daou, six years ago they created the Huffington Post but got cut out of the deal. And then did nothing about it. For six years. Six years! If they really thought they owned part of HuffPost, over the last 72 months wouldn’t they have contacted us to complain? Asked us to credit them somewhere on the site? Demanded to participate in the project? Insisted on getting stock? Something? Anything?! In short, wouldn’t they have acted like owners rather than doing nothing for more than half a decade while the real owners did all the work, invested all the money, and took all the risk? Of course they would have. And the reason they didn’t is because they knew then—and know now—that they have absolutely no claim to ownership.”
Huffington declined to comment for this article, and she made no mention of Daou and Boyce and their lawsuit when she was interviewed in mid-December by the Financial Times. There, however, Simon Schama described her version of the birth of the Huffington Post: “She could see ‘how conversation’ about politics ‘was moving online’ and wanted ‘to create a platform’ that would organize its speakers and its audience. But she was also motivated by a strong sense that the old media had betrayed their calling by complaisance.”
For his part, Breitbart said the fighting among the four protagonists amuses him, especially since Huffington fired him after six months. Although he had not read the complaint, he said with barely repressed glee, he stands by what he said in Wired—that he was the creator—as “100 percent truthful,” and he looks forward to “being deposed on this matter. I will set the record straight. There’s a long history that could be found in documentation and e-mails in Arianna Huffington’s possession that will be very helpful and illuminating.” He added that “there is nobody who likes a courtroom drama more than me” and “all I know is what I did and what my role was. I am finding this all to be bizarrely poetic.”
The Huffington Post launched on May 9, 2005, without Daou or Boyce as investors or employees. “The site as it launched implemented all of Peter’s and James’ ideas, even down to the inclusion of specific political celebrity bloggers whom Peter and James had suggested, and including a unique combination of features described in the blueprint,” according to the complaint.
Boyce and Daou’s initial proposal for 1460 is their strongest argument for having had a role in creating the Huffington Post. But to say it was a “blueprint” for the site is an exaggeration. A third of the proposal recounts the successes of the Kerry campaign in using the Internet and the corresponding success of the Republicans with the Drudge Report. Much of the rest merely describes ideas about the Internet that were much in circulation at the time: for instance, news delivered by aggregating stories from Web sites—a clear take on the Drudge Report, but a practice that was seen in the earliest days of the Internet with such Web sites as NewsNow. Several pages were devoted to “a ring of sites that … will become gathering places online”—an idea that seems not to have been incorporated in the Huffington Post. The idea of celebrity bloggers was hardly original, and although a few people Daou and Boyce suggested, such as Alan Dershowitz and Kristen Breitweiser, did make it onto the site, most of the early bloggers, such as Walter Cronkite, Tina Brown, Mike Nichols, Jon Corzine, Ellen Degeneres, David Mamet, and John Cusack, appear nowhere in their proposal.
Both Daou and Boyce have regularly blogged for the Web site, and Boyce—the more frequent contributor of the two—filed his last post on October 7, 2010. When Boyce appeared as a political commentator on cable television, including MSNBC, he would talk up the Huffington Post. In December 2008, The Wall Street Journal observed that Daou’s blog on the Huffington Post attracted readers to the site, especially for his “musings on the role the Internet played in the national elections.”
Indeed, until the August 30, 2010, e-mail to Huffington, neither Daou nor Boyce ever voiced any frustration with her or Lerer about being cut out of the Huffington Post creation myth.
This fact, more than any other, seems to weaken their case. What really gets Huffington’s goat about Daou and Boyce, according to someone who knows her well, is their chutzpah. “The fact that you mention the Facebook matter—the day Facebook went up, you had claims made against it. That’s only human nature,” this person says. “If they really thought they had created the Huffington Post, when the Huffington Post was launched, they would not have said anything? They would not have sent a single letter but kept blogging on the Huffington Post? Can you imagine the equivalent in Facebook? Can you imagine the people who claim they created Facebook creating a Facebook account and then participating in what they thought was stolen from them? It defies human nature. It is the point of all this for which there is no answer.”
Daou and Boyce say they were busy working with clients who might have been offended by a public confrontation with Huffington. They are anxious to drive home that they believe their case is an ethical issue. “At the fundamental level, it is wrong to take someone’s ideas, take someone’s efforts, take someone’s work, take someone’s vision, and then completely claim it as your own and not recognize that those people helped,” explains Boyce as he paces back and forth in his room at the Roger Williams.
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Boyce finally gives Daou some airtime, and the coiled cobra lunges: “We’re basically saying, something happened back then and it was wrong. We came [up] with the idea. We all shook hands. We’re going to build it together. We started presenting budgets. We wanted to reach the point where we operationalize it and put it into writing and incorporate it. We did this thing together. And you just walked away. There was never a rejection.”
“In the end, it’s about doing the right thing,” Boyce says emphatically.
http://www.vanityfair.com/business/features/2011/02/huffington-documents-201102
posted by Clare L. Pieuk at 7:25 PM
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