Filed: New York County Clerk 08/14/2013 Index No

FILED: NEW YORK COUNTY CLERK 08/14/2013 INDEX NO. 651997/2010 NYSCEF DOC. NO. 84 RECEIVED NYSCEF: 08/14/2013

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY

PETER DAOU and JAMES BOYCE, Plaintiffs, Index No. 651997/2010 Hon. Charles E. Ramos

ARIANNA HUFFINGTON, KENNETH LERER, Motion Sequence # 005 and THEHUFFINGTONPOST.COM, INC., Defendants. ORAL ARGUMENT REQUESTED

MEMORANDUM OF LAW IN SUPPORT OF THE MOTION FOR SUMMARY JUDGMENT OF DEFENDANTS ARIANNA HUFFINGTON, KENNETH LERER, AND THEHUFFINGTONPOST.COM, INC.

PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 Avenue of the Americas New York, NY 10019-6064 (212) 373-3000

Attorneys for Defendants Arianna Huffington, Kenneth Lerer, and TheHuffingtonPost.com, Inc. TABLE OF CONTENTS

Page

Preliminary Statement 1

Statement of Facts 3

The Parties 3

The Internet Landscape in Late 2004 to Early 2005 5

Plaintiffs' Website Idea Proposal 7

Plaintiffs' Communications with Defendants about the Alleged Idea 8

Defendants' Development of The Huffington Post 11

Plaintiffs' Post-Launch and Pre-Suit Actions 12

Procedural History 13

Argument 14

I. PLAINTIFFS' CLAIMS FAIL BECAUSE

THEIR ALLEGED IDEA WAS NOT NOVEL 15

A. Plaintiffs' Alleged Website Idea Was Not Novel 17

1. Plaintiffs' Combination of Pre-Existing Elements Is Not Novel as a Matter of Law 17 2. The Combination of Elements Allegedly Proposed By Plaintiffs Existed Prior to November 2004 19 II. PLAINTIFFS' CLAIMS FAIL FOR A HOST OF OTHER REASONS 23

A. The Idea Misappropriation Claim Is Time-Barred and Deficient 23

B. Plaintiffs' Fraud Claim Is Insufficient as a Matter of Law 25

1. Defendants Did Not Make False Statements with a Present Intent to Deceive 25 2. Defendants' Alleged Statements Were Not Intended to Induce Reliance 27 3. Plaintiffs Did Not Justifiably Rely on Defendants' Statements 28 C. Plaintiffs' Unjust Enrichment Claim Is Insufficient as a Matter of Law 29

Conclusion 30

n TABLE OF AUTHORITIES

Page(s) Cases

Am. Bus. Training Inc. v. Am. Mgmt. Ass 'n, 50 A.D.3d 219 (1st Dep't 2008) 14, 15

Am. Bus. Training v. Am. Mgmt. Ass 'n. No. 0603909/2002, 2006 WL 5436824 (Sup. Ct, N.Y. Co., Feb. 2, 2006), affd, 50 A.D.3d 219 (1st Dep't 2008) 16

Bey Constr. Co. v. Yablonski, 76 A.D.2d 875 (2d Dep't 1980) 23

Brandwynne v. Combe Int 7 Ltd., 74 F. Supp. 2d 364 (S.D.N.Y. 1999) 16

Brick v. Cohn-Hall-Marx Co., 276 N.Y. 259(1937) 23

Brown v. Lockwood, 76 A.D.2d 721 (2d Dep't 1980) 25

Demas v. Levitsky, 291 A.D.2d 653 (3d Dep't 2002) 23

Dolgoff Holophase, Inc. v. E.I. du Pont de Nemours & Co., 212A.D.2d661 (2d Dep't 1995) 23

Downey v. Gen. Foods Corp., 31N.Y.2d56(1972) 14

Educ. Sales Programs, Inc. v. Dreyfus Corp., 65 Misc. 2d 412 (Sup. Ct, N.Y. Co., 1970) 15, 16, 25

Putter v. Paramount Pictures, Inc., 69 N.Y.S.2d 438 (Sup. Ct, N.Y. Co., 1947) 16

Georgia Malone & Co. v. Rieder, 86 A.D.3d 406 (1st Dep't 2011) 30

IDT Corp. v. Morgan Stanley Dean Witter & Co., 12N.Y.3dl32(2009) 23

Kavanau v. Courtroom Tel. Network, No. 91 Civ. 7959, 1992 WL 197430 (S.D.N.Y. Aug. 3, 1992) 16, 17

in Lama Holding Co. v. Smith Barney, 88 N.Y.2d 413 (1996) 25

Lanzi v. Brooks, 54 A.D.2d 1057 (3d Dep't 1976), ajf'd, 43 N.Y.2d 778 (1977) 25

Lapine v. Seinfeld, 31 Misc. 3d 736 (Sup. Ct.,N.Y. Co., 2011) 15,24

Mandarin Trading Ltd. v. Wildenstein, 16N.Y.3d 173 (2011) 29,30

Marraccini v. Bertelsmann Music Group, 221 A.D.2d95 (3d Dep't 1996) 15

Murray v. Nat'I Broad. Co., Inc., 844F.2d988 (2dCir. 1988) 14, 16,17, 18

Non-Linear Trading Co. v. Braddis Assoc., 243 A.D.2d 107 (1st Dep't 1998) 25

Norwood v. Cicatelli, N.Y.L.J., Sept. 12, 1991, at 22, col. 5 (Sup. Ct, N.Y. Co., 1991) 15, 24

Oasis Music, Inc. v. 900 U.S.A., Inc., 161 Misc. 2d 627 (Sup. Ct, N.Y. Co., 1994) passim

Paul v. Haley, 183 A.D.2d44 (2d Dep't 1992) 14, 15, 16

Powers Mercantile Corp. v. Feinberg, 109 A.D.2d 117 (1st Dep't 1985), affd, 67 N.Y.2d 981 (1986) 23

Ring v. Estee Lauder, Inc., 702 F. Supp. 76 (S.D.N.Y. 1988), ajf'd, 874 F.2d 109 (2d Cir. 1989) 17

Sanyo Elec. v. Pinros & Gar Corp., 174 A.D.2d 452 (1st Dep't 1991) 25

Shea v. Hambros PLC, 244 A.D.2d 39 (1st Dep't 1998) 25

Victor G. Reiling Assocs. v. Fisher-Price, Inc., 450 F. Supp. 2d 175 (D. Conn. 2006) 17

IV Statutes and Rules

CPLR§ 213(1) 23

CPLR§ 214(4) 2,23 Preliminary Statement

Plaintiffs' claims for idea misappropriation, fraud and unjust enrichment — all founded on the alleged theft of Plaintiffs' idea for a website — cannot survive summary judgment because the record evidence establishes that Plaintiffs' alleged idea, long in the public domain, does not meet the requisite standard of novelty under New York law. Nor is there support in the record for the remaining elements of Plaintiffs' claims. Thus, this action should be dismissed.

Defendants Arianna Huffington and Kenneth Lerer are the founders of The Huffington

Post, an Internet newspaper, which today is one of the most widely read sites on the Internet.

Huffington and Lerer joined forces in 2004 to develop a website featuring breaking news and a group blog to counter and complement the emerging partisan blogosphere and traditional media.

In November and December 2004, Plaintiffs, who first encountered Huffington during the 2004 presidential campaign, proposed to Defendants and others an idea for a political consulting firm and a Democratic-leaning news and blogging site. After a handful of written communications and one breakfast among the parties following their attendance, with over two dozen other people, at a Huffmgton-hosted gathering about the future of the Democratic Party, Huffington and Lerer decided not to work with Plaintiffs. Working publicly with their longtime colleagues and without Plaintiffs, Defendants built The Huffington Post and launched it in May 2005.

As the record shows, between The Huffington Post's launch and August 2010 (when

Plaintiffs first raised their claims with Huffington) — a period of nearly six years — Boyce and

Daou never claimed to be the creators of The Huffington Post. They never objected to the site's launch or continued operation. They never asked for credit. They never asked for money. They never took a single action to suggest to Huffington or Lerer, to the public, or to a court that

Defendants had stolen their idea for The Huffington Post or had in any way wronged them.

Instead, as the evidence shows, Plaintiffs (like thousands of others) blogged regularly, and for free, at The Huffington Post, continued to seek out other opportunities to work with Defendants, unequivocally credited Defendants for the site's invention, and at every step publicly praised

Defendants for developing the site.

Notwithstanding their actions that belie their litigation claims, Plaintiffs filed this suit in

2010, contending that Defendants misappropriated their idea for a website combining five elements: a group blog featuring notable personalities, non-partisan news aggregation, scoops and exclusives, issue-specific webpages, and online community building. They further allege that, through false promises that they would work together to build the website, Huffington and

Lerer defrauded them of their idea, unjustly enriching themselves. As the evidence developed over two years of fact and expert discovery makes clear, there is no support for Plaintiffs' claims.

First and foremost, Plaintiffs have not established, and cannot establish, the novelty of their idea — a failure that is fatal to each cause of action. The standard for novelty under New

York law is settled and stringent: Plaintiffs bear a heavy burden and must show that their idea was truly innovative and not a mere variation on existing ideas. The combination of pre-existing elements, what Plaintiffs allege here, is not novel as a matter of law. The record is clear, and

Plaintiffs concede, that each of the elements of their alleged idea existed in varying forms, on countless websites, prior to November 2004, when Plaintiffs disclosed their idea to Defendants.

Moreover, the very combination Plaintiffs allege as their novel idea also existed prior to

November 2004: Many websites contained all five of Plaintiffs' elements in combination (and dozens more used some combination of them). The only distinctions Plaintiffs muster are immaterial variations of long-used ideas that cannot sustain the required showing of novelty.

Plaintiffs' claims fail for additional reasons. Plaintiffs' idea misappropriation claim is barred by the three-year statute of limitations of CPLR § 214(4), and the undisputed evidence demonstrates that the parties did not have the requisite legal or confidential relationship necessary to support such a claim. As for the fraud claim, there is no evidence that Huffington or

Lerer acted with a present intent to deceive or made statements to induce Plaintiffs' reliance; nor did Boyce and Daou, who publicly declared to the world in their pre-litigation statements that

Defendants — not Plaintiffs — created the idea for The Huffington Post, ever rely on such statements. Finally, because the record is clear that Plaintiffs voluntarily shared their alleged idea with Defendants, Defendants were not unjustly enriched at Plaintiffs' expense.

Statement of Facts1

The Parties

Huffington, the President and Editor-in-Chief of The Huffington Post Media Group, is an author and a prominent political commentator. (Fagen Aff2 Ex. 1 at 32:8-21; Ex. 2; Ex. 3 at

HUFF 5927.) From 1998 to 2004, she ran AriarmaOnline.com, a website featuring a blog with reader comments, her syndicated columns, and a discussion forum. (Ex. 1 at 24:14—25:12; see also http://ariannaonline.huffingtonpost.com/.) Lerer, a Managing Director at Lerer Ventures and Chairman of Buzzfeed, was a co-founder of corporate communications firm Robinson Lerer

& Montgomery, where he advised clients such as Microsoft, and an executive at AOL-Time

Warner. (Ex. 4 at 20:4-15, 21:19-22:16, 24:6-25; Ex. 3 at HUFF 5927.) Since the early 2000s, he has been involved in several political causes and Internet ventures, including StoptheNRA. com and Tom's Petition. (Ex. 4 at 20:10-11, 22:17-23:7, 78:3-12; Ex. 5 at 89:6-90:23.)

In the second half of 2004, Huffington, a celebrated networker, talked to her long-time colleague Roy Sekoff, Andrew Breitbart (her former researcher who then worked for the Drudge

1 The undisputed facts relevant to this motion are set forth fully in the accompanying Rule 19-a Statement of Uncontested Material Facts In Support of Defendants' Motion for Summary Judgment. 2 Citations to the "Fagen Aff." and to Exs. 1-54 refer to the Affirmation of Leslie Gordon Fagen In Support of Defendants' Motion for Summary Judgment, dated August 6, 2013. Report), and Lerer about expanding her existing online presence in a way that married her interest in the world of Internet opinion — the "blogosphere" — and her well-established offline connections. (Ex. 1 at 22:5-23:3, 171:4-21, 174:8-14; Ex. 7 at 34:10-14, 122:2-18, 127:2-10;

Ex. 5 at 46:12-23; Ex. 6 at 280:19-21.)

Around the same time, Lerer was looking for new web-based projects. (Ex. 4 at 78:3-20;

Ex. 5 at 59:12-60:13, 91:16-93:15.) Frustrated by the Drudge Report's impact during the 2004 campaign, Lerer was interested in "starting something that would be like the Drudge Report," but with a progressive agenda. (Ex. 4 at 28:7-13, 78:13-80:25; Ex. 5 at 136:7-19.) In the fall of

2004, before the election, he discussed this possible venture with Huffington and his Internet colleague Jonah Peretti, who became a founding partner in The Huffington Post. (Ex. 4 at 28:7-

16, 77:20-81:21, 131:7-15, 132:9-133:8; Ex. 1 at 174:8-14; Ex. 5 at 48:18^19:8, 91:16-93:15.)

In late 2004 and early 2005, Huffington and Lerer developed The Huffington Post, which launched on May 9, 2005. (Ex. 4 at 69:13-21, 97:8-21; Ex. 1 at 84:19-85:18, 198:9-12; Ex. 8.)

Today, The Huffington Post features original reporting, news aggregation and curation, a group blog, and a vibrant commenter community. {See www.huffingtonpost.com; Ex. 4 at 68:18-

69:4.) In 2011, AOL purchased The Huffington Post. (Ex. 1 at 217:14-16; Ex. 4 at 116:9-22.)

Plaintiffs are consultants. (Ex. 6 at 8:15-17; Ex. 10 at 25:5-26:6.) Boyce worked in advertising for approximately 15 years. (Ex. 6 at 22:6-10, 24:8-26:22; Ex. 11 at HUFF 4830-

31.) From November 2003 to November 2004, he was an unpaid Senior Advisor to the presidential campaign of Senator John Kerry. (Ex. 6 at 27:19-30:23; Ex. 12; Ex. 11 at HUFF

4831.) Daou, a former musician and producer, also worked on the Kerry campaign, first as a volunteer and then as an online communications advisor. (Ex. 10 at 14:23-16:7, 19:9-20:7; Ex.

11 at HUFF 4829-30.) In November 2004, after the election, he launched the Daou Report, a "blog of blogs." (Ex. 10 at 28:17-20, 37:15-39:19.) From 2006 to 2008, Daou was the senior blog and digital advisor to the Senate campaign of Senator Hillary Clinton and the Internet

Director for Senator Clinton's presidential campaign. (Id. at 23:4-25:4.)

Plaintiffs met while working for Senator Kerry. (Ex. 10 at 47:15-48:3.) And it was during the 2004 campaign and its aftermath that they first had contact with Defendants. (Ex. 6 at

56:6-16, 220:12-223:8; Ex. 10 at 51:19-52:12, 54:7-55:3; Ex. 4 at 40:8-18.) From 2005 until

2010, when they filed this lawsuit, Plaintiffs, like thousands of others, were unpaid bloggers on

The Huffington Post. (Ex. 6 at 153:2-7; Ex. 10 at 318:15-319:2; Ex. 1 at 199:22-200:8,

342:13-343:23; see also Ex. 7 at 139:11-140:13; Ex. 9 at 190:2-6; Ex. 50 at 7.)

The Internet Landscape in Late 2004 to Early 2005

The 2004 campaign was closely chronicled by, and fought in the pages of, news websites and the political blogosphere, including on traditional media sites like NYTimes.com, blogs like

DailyKos.com, and, perhaps most prominently, the Drudge Report. (See Ex. 13; Ex. 4 at 78:23-

25, 80:17-24.) The Drudge Report's website launched in 1997 and became a national sensation in 1998 when it broke the Monica Lewinsky story. (Ex. 14 at HUFF 4852-53; Gordon Aff.3 Ex.

A at 23, 40; Ex. 10 at 106:25-108:16.) The site became a go-to source for headlines and a disseminator of rumors and talking points — particularly from the political right. (Ex. 14 at

HUFF 4852-53; Gordon Aff. Ex. A at 23, 40; Ex. 10 at 69:11-70:9, 106:25-108:16.) Plaintiffs concede that their website concept was intended to provide a liberal alternative to the Drudge

Report — a common goal among progressives, particularly during and after the 2004 campaign

(and, in fact, already implemented). (Ex. 10 at 69:13-70:3, 143:2-144:13; Ex. 19 at 167:15-

3 Citations to the "Gordon Aff." refer to the Affidavit of Professor Richard E. Gordon In Support of Defendants' Motion for Summary Judgment, dated July 30, 2013. 169:7; Ex. 14 at HUFF 4853; Ex. 52 f 21; see also Ex. 4 at 78:1-79:8; Ex. 5 at 48:18-49:8,

134:17-25; Ex. 20 at 42:1^13:3, 53:8-22; Ex. 21 at 38:24-40:22; Ex. 22; Ex. 23 at PROD 2077.)

Drudge may have been the web's most famous purveyor of news and opinion, but hundreds of other websites crowded the Internet in the early 2000s. They included a wide variety of blogs and group blogs providing commentary on politics, technology, and culture, among other topics, such as DailyKos.com and MyDD.com (Gordon Aff. Ex. A at 8-21; Ex. 5 at

132:24-134:2, 135:2-135:6; Ex. 10 at 86:6-90:15, 116:3-21, 118:3-8); websites that aggregated and republished news from sources around the web such as AlterNet.org and Metafilter.com

(Gordon Aff. Ex. A at 22-27; Ex. 5 at 132:3-134:25; Ex. 10 at 103:6-24, 118:9-12, 143:10-

144:13); sites with issue-oriented pages that organized content by topics of interest to readers, including business or the Iraq War, such as Slashdot.org and MSNBC.msn.com (Gordon Aff. Ex.

A at 28-38; Ex. 10 at 106:6-11, 118:16-18); sites that featured scoops and exclusive content — a core audience-building strategy for media websites and one of the fundamentals of journalism

— such as CBSNews.com and AlterNet.org (Gordon Aff. Ex. A at 40^15; Ex. 5 at 132:24-

134:2; Ex. 10 at 71:11-21, 106:20-108:16, 118:22-25); and websites that developed online communities through commenting, message boards, discussion forums, and other means of promoting reader interaction and engagement, such as Democratic Underground and Salon.com

(Gordon Aff. Ex. A at 45-52; Ex. 5 at 132:24-134:16; Ex. 10 at 110:5-111:21, 113:2-21,

118:13-16).

Dozens of websites in November 2004 also combined two or more of these features in varying forms. (Gordon Aff. Ex. A at 54-62; Ex. 4 at 186:19-187:24, 190:15-193:7, 198:10-20;

Ex. 1 at 153:16-154:4; Ex. 5 at 132:24-136:24, 143:6-20; Ex. 9 at 166:16-167:22; Ex. 10 at

69:24-70:3, 87:23-88:13, 107:10-108:16, 113:14-17.) Defendants' expert. Professor Richard E. Gordon, documented at least eight websites, and likely many others — AlterNet.org,

CBSNews.com, DailyKos.com, FoxNews.com, MSNBC.msn.com, Salon.com, TownHall.com, and Guardian.co.uk — that, as of November 2004, included, in combination, a collective of blogs, notable writers and commentators, news, exclusive content, issue-oriented coverage, and community features. (Gordon Aff. Ex. A at 54-62.)

Plaintiffs' Website Idea Proposal

In November 2004, Plaintiffs allegedly developed an idea for a "new kind of progressive news-reporting and group blogging website designed to promote and enhance Democratic causes" that would counter conservative media, including the Drudge Report. (Ex. 52 f^f 20-21.)

Plaintiffs' Alleged Idea

Plaintiffs' alleged idea is a "combination" of five elements: (1) "a collective of blogs by notable personalities (i.e. a 'group blog')," (2) "non-partisan news aggregation," (3) "issue- specific web pages," (4) "scoops and exclusives derived from the parties' existing relationships with political and media insiders," and (5) "online community-building (a 'gathering place')."

(Id. Tnf 1, 45^16; Ex. 49 f 25; see also Ex. 6 at 70:14-19, 81:24-82:18.)

Plaintiffs' 2004 Proposals

Plaintiffs assert that the idea's "core components" were identified in and conveyed to

Defendants in "memoranda, verbal communications and emails in November and December

2004" — including in Plaintiffs' "1460 Memo." (Ex. 52 fflf 1, 22; Ex. 6 at 79:19-80:22; Ex. 10

4 Professor Gordon is a journalist of two decades who, in 1995, directed the development of the website for the Miami Herald, where he was the first online director. (Gordon Aff. Ex. A at 1-2.) He is now a professor, founder of the graduate program in new media journalism, and director of digital innovation at Northwestern University's Medill School of Journalism, Media, Integrated Marketing Communications. (Id.) at 75:3—77:7.) The 1460 Memo described two related business opportunities: a network of websites and a Democratic Party-focused political consulting firm.5 (Ex. 15 at PROD 294.)6

With respect to the website, the 1460 Memo proposed the creation of www.fourteensixty.com, which would "highlight the daily news; be utilized to drive the business cycle by including 'scoops' generated by the founder's contacts within the Democratic Party and

Democratic leadership and will become a gathering place for Democrats online." (Id. at PROD

295.)7 Plaintiffs also proposed a separate "ring of sites" focusing on specific issues, which would circle and link to www.fourteensixty.com and would be circled by another ring — "the

1460 blogs," including the Daou Report. (Id. at PROD 295-96.)

In November 2004, Plaintiffs created several drafts of the 1460 Memo. (Exs. 11, 14-17.)

In one version, Plaintiffs reinvented their evolving concept and proposed something "much more aggressive and dastardly": an "infiltration operation" through which 1460 would create false- front right-wing blogs in order to rile up the progressive base and would raise money from conservative readers to support 1460's "operations against [the right wing]." (Ex. 17 at HUFF

4881, 4885-86.) This plan also proposed an "interactive blog" in which celebrities and the public could "debate in real time versus a member of the opposition." (Id. at HUFF 4883.) The last iteration of Plaintiffs' alleged idea was a December 7, 2004 "rough proposal." (Ex. 18.)

Plaintiffs' Communications with Defendants about the Alleged Idea

After telling Huffington about 1460 by phone, Boyce sent Huffington a draft of the 1460

Memo on November 14, 2004, and a second draft several hours later. (Ex. 15; Ex. 14; Ex. 6 at

212:25-215:5.) Boyce sent her another draft on November 15, 2004, and the "dastardly" version

5 The Huffington Post never had a campaign consulting group. (Ex. 1 at 124:10-20; Ex. 6 at 255:8-22.) 6 Defendants cite here to the first version of the 1460 Memo sent to Huffington. (Ex. 15.) Corresponding cites to the other drafts of the 1460 Memo are in Defendants' Rule 19-a Statement of Uncontested Material Facts. on November 19, 2004. (Exs. 11, 17.) Although the record contains no e-mails from Huffington in response to Boyce's messages, Plaintiffs contend (notwithstanding this Court's dismissal of their contract claims) that — sometime, somewhere, and somehow — Huffington agreed to participate in the project after Boyce sent her the second 1460 draft on November 14, 2004. (Ex.

52 128; Ex. 6 at 48:6-10; Ex. 10 at 346:7-11; see also Ex. 50 at 6-7, 13-14; Ex. 53 at 10-12.)

Huffington was among many people, including Kristen Breitweiser and Owen Hannay of

Slingshot, with whom Plaintiffs shared their alleged idea. (Ex. 11; Ex. 24; Ex. 6 at 229:13-

230:12, 233:9-234:21, 273:2-24, 337:15-338:9; Ex. 10 at 160:3-161:14, 237:17-238:2.)

The December 3, 2004 Meeting and December 4, 2004 Breakfast

On December 3, 2004, Huffington hosted a meeting at her Los Angeles home attended by approximately 30 people. (Ex. 25; Ex. 1 at 290:15-292:8; Ex. 4 at 27:13-25.) Huffington invited Lerer and several other guests. (Ex. 1 at 185:4-11; Ex. 4 at 27:7-28:16.) She also invited Boyce, and, at Boyce's suggestion, Daou, whom Huffington had never before met in person. (Ex. 25; Ex. 10 at 51:19-52:12; Ex. 6 at 263:8-264:2; Ex. 1 at 293:13-25.)

The December 3 meeting was a discussion about "rebranding the Democratic Party" and featured speakers on messaging and grass roots organization. (Ex. 25; Ex. 6 at 260:20-261:2;

Ex. 9 at 81:4-14; Ex. 7 at 75:3-78:4.) Boyce, along with three co-presenters, was a scheduled speaker, while Daou participated in the group discussion. (Ex. 25; Ex. 6 at 265:10-266:25; Ex. 7 at 75:3-76:4; Ex. 23.) Notes of the meeting reveal that neither Boyce nor Daou presented their website idea to the group, but Laurie David, an eventual investor in The Huffington Post, remarked that Democrats needed their "own Drudge." (Compare Ex. 23 with Ex. 49 fff 25, 31-

32; see also Ex. 10 at 176:9-184:7; Ex. 6 at 265:10-266:25.)

7 Plaintiffs described fourteensixty.com as "a Democratic-leaning site with enough non-partisan news so as to appear more mainstream than it truly is." (Ex. 15 at PROD 294-95.) After the December 3 meeting, and further to their conversations during the campaign,

Huffington and Lerer met alone in Huffington's study and agreed to move forward with developing a website that combined elements of the Drudge Report and Huffington's real-world gatherings. (Ex. 4 at 47:17-48:6; Ex. 1 at 171:8-21, 180:18-183:5; see also Ex. 9 at 60:7-21.)

Huffington and Lerer recalled that the December 3 meeting helped to crystallize the project that they had been discussing in the prior months. (Ex. 1 at 180:18-182:10; Ex. 4 at 132:9-19.) On the evening of December 3, Larry and Laurie David hosted a dinner for several participants in the earlier meeting, including Huffington and Lerer; Plaintiffs did not attend. (Ex. 1 at 208:11-

209:5; Ex. 4 at 36:16-37:16.)

On December 4, 2004, Huffington hosted Plaintiffs and Lerer for breakfast. (Ex. 6 at

275:2-25; Ex. 10 at 185:25-196:9; Ex. 1 at 299:4-300:4; Ex. 4 at 41:7-43:8.) Plaintiffs allege that, at the conclusion of the meeting, the parties shook hands and agreed to work together — an assertion that Defendants deny. (Ex. 52 143; Ex. 54 1 43.) It is undisputed that the parties never entered into a written agreement (Ex. 6 at 296:2-22; Ex. 10 at 232:21-235:11), and this Court has found on two occasions that no agreement existed between the parties with respect to

Plaintiffs' alleged idea (Ex. 50 at 6-7, 13-14; Ex. 53 at 11-12). The December 4 breakfast was the last time that Daou, Boyce, Huffington, and Lerer were ever together. Daou never again spoke to Lerer. (Ex. 10 at 55:21-56:2.) Daou and Huffington also never again communicated about Plaintiffs' website idea. (Ex. 10 at 52:20-54:6, 254:7-255:2, 260:8-261:13.)

The December 7, 2004 "rough proposal"

On December 7, 2004, Boyce sent Lerer a new "rough proposal" outlining the

"development of an Arianna-focused 'left wing drudge' site" and the "creation of a 'political strategy group.'" (Ex. 18 at HUFF 4262; see, supra, p. 8.) Boyce envisioned a business in

10 which Lerer and Huffington were the "senior partners," Boyce's "position would be determined by [Defendants]," and Daou's role still needed to be "clarified." (Ex. 18 at HUFF 4264.) Upon receipt of the e-mail, only three days after the parties' December 4 breakfast, Lerer forwarded it to Huffington with the message, "we should talk before I get back to him. This doesn't work for me on many levels." (Id. at HUFF 4261.) Boyce and Lerer never again communicated about

Plaintiffs' alleged idea. (Ex. 6 at 314:15-315:2; Ex. 4 at 144:5-10.)

The So-Called "Follow-Up" Communications

The record reveals no further written communications between the parties about

Plaintiffs' alleged idea. The December 17, December 20, and December 22, 2004 e-mails cited in the Amended Complaint as "Defendants' requests" are internal e-mails between Plaintiffs and contain no communications whatsoever from Defendants. (See Exs. 26, 27, 28.)

Defendants' Development of The Huffington Post

Huffington and Lerer — joined by Peretti, Sekoff, Breitbart, and Huffington's former researcher Colin Sterling — worked tirelessly to conceptualize, develop, fund, promote, and build the website that became The Huffington Post. (Ex. 1 at 185:24-190:6, 196:19-197:10,

198:9-199:21, 200:9-20; Ex. 4 at 90:18-93:4, 95:21-99:8; Ex. 5 at 17:5-14, 19:10-26:2,

100:11-102:13, 112:13-113:9, 130:16-18; Ex. 9 at 55:16-22, 56:10-21, 172:16-18, 240:15-

243:16; see also Exs. 3, 30-33.) Plaintiffs did nothing. (Ex. 1 at 331:19-24; Ex. 4 at 184:20-24;

Ex. 9 at 186:18-187:2, 235:14-236:21; Ex. 6 at 106:8-23, 178:2-7, 204:12-207:21, 325:7-24.)

The Huffington Post launched on May 9, 2005, featuring news, a group blog, and a media criticism section called "Eat the Press." (Ex. 1 at 84:19-89:11; Ex. 4 at 68:14-69:21; Ex. 5 at

131:23-132:9; Ex. 8.) The site later enabled reader comments and added verticals (or topic sections). (Ex. 1 at 88:13-24, 101:20-102:7; see also Gordon Aff. Ex. A at 69.) At launch. The

11 Huffington Post joined dozens of news and information websites with similar features. (See, supra, pp. 5-7.) What made The Huffington Post unique and successful, however, was its execution by its talented staff, its mix of voices derived from Huffington's contacts, and its ability to innovate technologically through its proprietary publishing platform, including its development of search-engine optimization techniques and other traffic-driving measures. (Ex. 1 at 155:21-156:14, 199:2-14; Ex. 4 at 67:15-18, 187:6-24, 190:24-192:24, 195:10-15, 196:18-

23; Ex. 5 at 22:15-26:2, 37:7-42:18, 127:12-131:7, 137:12-138:18; Ex. 7 at 72:5-14, 116:11-

117:13; Ex. 9 at 169:6-170:20.)

Plaintiffs' Post-Launch and Pre-Suit Actions

Since the launch of The Huffington Post, Plaintiffs were unpaid bloggers, like thousands of other individuals, and they referred about a dozen bloggers to the site. (Ex. 6 at 153:2-7; Ex.

10 at 318:15-319:2, 342:7-9; Ex. 1 at 199:22-200:8, 331:25-332:13, 342:13-343:23; see also

Ex. 7 at 139:11-140:13; Ex. 9 at 186:18-190:6, 206:7-21; Ex. 50 at 7.)

Prior to August 2010, when they first asserted their claims, nearly six years after the alleged events, Plaintiffs never claimed that Defendants had misappropriated their website idea and cut them out of the development of The Huffington Post; nor did they seek compensation from Defendants or credit for the site. (Ex. 6 at 112:17-114:22, 126:20-127:15; Ex. 10 at

260:8-264:15, 313:20-314:12, 343:22-345:10; Ex. 9 at 236:16-21, 237:19-238:7.) Instead,

Plaintiffs' public and private statements were only complimentary to Huffington and Lerer, whom they repeatedly credited as the site's founders and developers. For example, in an August

2005 blog post, Boyce gave all credit for The Huffington Post to Huffington, acknowledging that, "[i]n early December [2004], the concept for this site crystallized in Arianna's mind." (Ex.

12 35.) Later, Boyce called himself "a proud and passionate supporter of The Huffington Post since it was just a twinkle in Arianna and Kenny's eyes." (Ex. 42; see also Exs. 39, 43.)

Tellingly, in 2006, when Boyce was misidentified on MSNBC as a Huffington Post "co- founder," he corrected the title to "contributor" or "original contributor" and sent the correction, with an apology for the misidentification, to Sterling. (Ex. 40.) Two years later, in a congratulatory e-mail to Huffington about The Huffington Post's traffic growth, Boyce again confirmed that he was not one of the site's founding fathers: "when I tell the story of that amazing meeting almost 4 years ago, I say that I was in the room for the conception but not actually in the bed." (Ex. 22.) In still other public posts and communications. Plaintiffs praised

Huffington personally, revealed their continuing warm relationships with her, and continued to seek out opportunities to work with Defendants. (See Exs. 34, 36, 37, 39, 41, 44.) Indeed, in

2006, Boyce, the purported co-creator of the idea for The Huffington Post, submitted his resume to The Huffington Post. (Exs. 12, 38.)

Procedural History

Plaintiffs filed their initial complaint on November 15, 2010.8 On October 7, 2011, the

Court granted Defendants' motion to dismiss with respect to seven of Plaintiffs' eight claims, sustaining only the idea misappropriation claim. (Ex. 50 at 6-17.) In its decision, the Court found that "the parties' actions since 2004 have been inconsistent with their alleged co-venturer relationship," with Plaintiffs "admittedly...not...involved in the management and financing of the Huffington Post, and prior to this lawsuit,...not attempt[ing] to assert their purported ownership rights but rather,...contribut[ing] as unpaid bloggers." (Id. at 7.) Plaintiffs filed an

The Complaint asserted eight causes of action: breach of contract, breach of fiduciary duty, idea misappropriation, breach of implied contract, unjust enrichment, quantum meruit, fraud, and negligent misrepresentation. (Ex. 491| 54-111.)

13 Amended Complaint on May 21, 2012, which asserted claims for idea misappropriation, fraud, breach of implied contract, and unjust enrichment. (Ex. 52 ^f 91-115.) On February 14, 2013, the Court granted Defendants' motion to dismiss with respect to the breach of implied contract claim, but denied the motion as to the other three claims. (Ex. 53 at 4-13.) For nearly two years, the parties engaged in extensive fact and expert discovery. Plaintiffs filed their Note of Issue and

Certificate of Readiness on June 7, 2013, and pursuant to the parties' agreed-upon schedule, this motion followed.

Argument

New York law is settled that "[l]ack of novelty in an idea is fatal to any cause of action for its unlawful use."9 Downey v. Gen. Foods Corp., 31 N.Y.2d 56, 61 (1972) (dismissing idea misappropriation and fraud claims) (emphasis added); Am. Bus. Training Inc. v. Am. Mgmt.

Ass'n, 50 A.D.3d 219, 225 (1st Dep't 2008) (dismissing idea misappropriation, unjust enrichment, and fraud claims because "concept that is not novel cannot be 'property' owned by

[plaintiff], and plaintiff cannot be defrauded of property that [it] does not own," and lack of novelty "precludes relief on the unjust enrichment theory").10 Novelty is an issue of law appropriately decided on summary judgment. Am. Bus. Training, 50 A.D.3d at 223; see also

Paul v. Haley, 183 A.D.2d 44, 53 (2d Dep't 1992); Ex. 50 at 11-12. Plaintiffs bear the burden of proving novelty; they '"cannot rest on mere assertions of novelty and originality,' but must instead 'demonstrate some basis in fact for those claims.'" Paul, 183 A.D.2d at 53; Am. Bus.

9 The Amended Complaint makes clear that all of Plaintiffs' claims are premised on the assertion that Defendants "stole the idea for The Huffington Post." (Ex. 52 f 1; see also id. f 3 ("theft of Plaintiffs' idea"), ^ 38 (Plaintiffs "conceived of and presented...the idea for The Huffington Post" to Defendants), 1 50 (alleging, in connection with fraud claim, that Defendants "intended...to misappropriate the idea for the website"), IK 93-100 (fraud claim premised on alleged misappropriation of "Plaintiffs' Website Idea"), fflf110-1 5 (alleging that Defendants were enriched by "disclos[ure of] the Plaintiffs' Website Idea").) 10 See also Murray v. Nat'l Broad. Co., Inc., 844 F.2d 988, 994 (2d Cir. 1988) (affirming dismissal of idea misappropriation, fraud, and unjust enrichment claims).

14 Training, 50 A.D.3d at 223 (novelty is plaintiffs burden). As set forth below, the record contains no evidence supporting Plaintiffs' conclusory claim of novelty of their website idea or the remaining elements of their claims.

PLAINTIFFS' CLAIMS FAIL BECAUSE THEIR ALLEGED IDEA WAS NOT NOVEL

Under New York law, only those ideas reflecting "genuine novelty and invention" are novel. Educ. Sales Programs, Inc. v. Dreyfus Corp., 65 Misc. 2d 412, 416 (Sup. Ct., N.Y. Co.,

1970). A non-novel idea is in the public domain and contains no enforceable property right. See

Am. Bus. Training, 50 A.D.3d at 222; Oasis Music, Inc. v. 900 U.S.A., Inc., 161 Misc. 2d 627,

631 (Sup. Ct., N.Y. Co., 1994). Courts apply a "stringent test" for novelty to allow the "free exchange of ideas." Paul, 183 A.D.2d at 53.

An idea that is only a "variation on a basic theme" is not novel. Oasis Music, 161 Misc.

2d at 631, 633 (components of idea for interactive game were only variations on existing themes, not novel); see also Marraccini v. Bertelsmann Music Group, 221 A.D.2d 95, 98 (3d Dep't

1996) (proposal was "creative variation on [the] theme" of music video channel with marketing of merchandise through home shopping, not novel); Lapine v. Seinfeld, 31 Misc. 3d 736, 746

(Sup. Ct., N.Y. Co., 2011) ("idea of hiding healthy ingredients in foods likely to be accepted by children was, at best, a creative variation on preexisting ideas"); Norwood v. Cicatelli, N.Y.L.J.,

Sept. 12, 1991, at 22, col. 5 (Sup. Ct, N.Y. Co., 1991) (idea to have HIV-positive women counsel other HIV-positive women was "merely an adaptation of a previously existing idea used by such groups as Alcoholics Anonymous"). Nor is the "clever or useful adaptation of existing knowledge," or the "mere compilation of or expansion of existing or obvious elements adapted

15 into a new package, novel.11 Educ. Sales, 65 Misc. 2d at 416 ("Improvement of standard technique...or the mixture of known ingredients in somewhat different proportions — all the variations on a basic them[e] — partake more of the nature of elaboration and renovation than of innovation."); see also Kavanau v. Courtroom Tel. Network, No. 91 Civ. 7959, 1992 WL

197430, at *6 (S.D.N.Y. Aug. 3, 1992) ("mere compilation of and expansion on existing television elements...fails to satisfy the test for novelty under New York law"). The unique execution of an idea also is not novel. See Murray, 844 F.2d at 992 ("While NBC's decision to broadcast The Cosby Show unquestionably was innovative in the sense that an intact, nonstereotypical black family had never been portrayed on television before, the mere fact that such a decision had not been made before does not necessarily mean that the idea for the program is itself novel."); Kavanau, 1992 WL 197430, at *5 ("Although [the] proposal was more developed and more definitive than pre-existing plans..., and thus in a layman's sense it may have been new or novel, it was not the first such idea and therefore it cannot meet the test of novelty under New York law."). Thus, to be novel and protectable, an idea must be "truly innovative." Paul, 183 A.D.2d at 53; see also Educ. Sales, 65 Misc. 2d at 416.

Because of this high burden, claims premised on purportedly novel ideas routinely do not survive summary judgment. See, e.g., Am. Bus. Training v. Am. Mgmt. Ass'n, No.

0603909/2002, 2006 WL 5436824 (Sup. Ct., N.Y. Co., Feb. 2, 2006) (granting summary judgment because idea for five-day MBA course was not novel because no component was original and length of course did not render it unique), affd, 50 A.D.3d 219 (1st Dep't 2008); see

11 See also Futter v. Paramount Pictures, Inc., 69 N.Y.S.2d 438, 440 (Sup. Ct., N.Y. Co., 1947) ("[M]erely combining...obvious elements cannot convert a general idea, which is not novel, into a unique concept."); Brandwynne v. Combe Int'I Ltd., 74 F. Supp. 2d 364, 376 (S.D.N.Y. 1999) ("Even assuming, arguendo, that plaintiffs provided a compilation of elements never before offered to the public, plaintiffs' idea nevertheless lacks novelty because a combination of pre-existing elements is not considered 'novel.'").

16 also Kavanau, 1992 WL 197430, at *6 (granting summary judgment because "mere compilation of and expansion on [five] existing television elements" did not satisfy novelty test).12

A. Plaintiffs' Alleged Website Idea Was Not Novel

Plaintiffs' alleged idea falls far short of the stringent novelty standard for several reasons.

1. Plaintiffs' Combination of Pre-Existing Elements Is Not Novel as a Matter of Law

Plaintiffs' sole claim to novelty is a combination of five pre-existing website elements: a group blog featuring notable personalities, non-partisan news aggregation, scoops and exclusives, issue-specific webpages, and online community building. (Ex. 52 ^ 1, 45^-6

("concrete idea for this specific combination of elements was entirely novel"); Ex. 19 at 71:4-18

("combination of elements [proposed by Plaintiffs] did not exist anywhere on the web at that point"); see also Ex. 10 at 120:4-8.)

As set forth above, the mere combination of pre-existing elements is not novel as a matter

i o of law. Critically, Plaintiffs concede that each of the individual elements —in many different forms — of their alleged idea existed on the web before November 2004. Daou and Plaintiffs' purported expert admit that blogs and group blogs, non-partisan news aggregation, issue- specific pages, scoops and exclusives, and online community building were widely used prior to

12 See also Murray, 844 F.2d at 992-94 (idea to combine traditional sitcom with depiction of middle-class African-American family not novel as matter of law); Ring v. Estee Lauder, Inc., 702 F. Supp. 76, 78 (S.D.N.Y. 1988), ajfd, 874 F.2d (2d Cir. 1989) (idea to videotape in-store makeovers not novel because makeovers were common promotional technique and videos had been marketed for self-improvement techniques); Oasis Music, 161 Misc. 2d at 632-35 (no novelty where all elements of idea for interactive game pre-existed). 13 Victor G. Reiling Assocs. v. Fisher-Price, Inc., 450 F. Supp. 2d 175, 180 (D. Conn. 2006), on which Plaintiffs have previously relied for the proposition that an innovative idea to combine existing elements may be novel, is distinguishable. There, the "evidence suggested that, regardless of whether projection or other image devices had been used before, the idea of an image-displaying device on the backpack of an action figure . . . had not been previously used." Id. at 182. Unlike Plaintiffs' combination of existing elements, the idea in Reiling was concrete, specific, and had not previously been used by toy manufacturers. 14 Plaintiffs' purported expert, Dr. Jennifer Golbeck, is an associate professor at the University of Maryland's College of Information Studies. (Ex. 19 at 20:25-21:13.) Her research background is in computer science, and

17 November 2004. (Ex. 10 at 86:6-87:9, 103:6-24, 106:6-11, 106:20-107:20, 110:24-111:21,

112:21-113:21, 118:3-25; Ex. 19 at 117:17-25, 165:18-167:8, 192:10-193:10, 216:18-23,

224:4-13; see also Gordon Aff. Ex. A at 8-52.) Indeed, Daou acknowledged that he did not claim that the idea for any element was stolen from him. (Ex. 10 at 120:8-10 ("I'm not saying that the idea of the blogs was stolen from me, that would be absurd."), 121:21-122:6 ("the idea of the issues [sic] specific web page or pages on a site certainly was not stolen from me.").)

Recognizing that each of the combined elements long predated Plaintiffs' alleged idea,

Plaintiffs' expert dressed those elements with some detail in an unavailing attempt to distinguish them from the numerous pre-existing examples identified by Defendants. (See Gordon Aff. Ex.

A at 8-52.) Thus, Plaintiffs' expert described the idea as: (1) a group blog featuring a "wide range" of outside notable personalities and celebrities, (2) "curated" news aggregation designed to serve a political purpose, but with a "veneer" of impartiality, (3) online community building that includes an intention that the site will become a "gathering place" for Democrats, who will interact with each other on the site and form a "true community," (4) issue-specific pages that do not just organize content, but become "a gathering place online for their respective communities" and "defend and drive opinion on issues," and (5) scoops and exclusives derived from the founders' political connections that were an "important" and "continuing" or "regular" part of the site's content. (Ex. 19 at 130:14-132:5, 137:2-10, 139:21-141:12, 166:11-167:8, 175:15-

176:15, 185:17-24, 189:5-190:17, 191:21-192:7, 196:11-20, 209:13-210:2, 225:2-24, 228:24-

230:13.) But these "details" are nothing more than ways to execute the elements alleged in the complaint, see Murray, 844 F.2d at 992, or are at most variations on long-existing ideas, see

Oasis Music, 161 Misc. 2d at 631, and do not suffice to convert a non-novel idea long in the

she has no expertise in online or offline journalism. (Id. at 13:9-19:2, 22:2-23:24, 26:25-28:2, 32:21-33:18.) Defendants reserve all rights with respect to Dr. Golbeck's qualification as an expert in this case.

18 public domain to one that meets the high novelty standard under New York law. Most important, Plaintiffs' expert still admitted that news aggregation, issue-specific pages, scoops and exclusives, and online community building, as she claims Plaintiffs proposed these elements, were all in the public domain prior to November 2004. (Ex. 19 at 166:11-169:7, 192:10-193:10,

216:18-23, 220:14-221:12, 224:4-13.)

Thus, the only aspect of the individual elements of Plaintiffs' alleged idea that Dr.

Golbeck would not concede already existed is the group blog featuring a "wide range" of

"outside" notable personalities. (Ex. 10 at 118:3-119:13; Ex. 19 at 76:13-77:3, 137:2-10,

140:2-23.) Plaintiffs' expert admitted that celebrities and notable personalities were blogging prior to November 2004, including on group blogs on both MSNBC.msn.com and Prospect.org.

(Id. at 137:11-19, 140:3-10, 143:14-24, 149:24-151:7). In her deposition. Dr. Golbeck tried to distinguish the group blog on MSNBC — which she admitted included notable personalities and

"top Democratic thinkers," the very elements alleged in Plaintiffs' Amended Complaint — by arguing that the group blog did not include a "wide" enough range of notable personalities, and that the bloggers — including Pat Buchanan, Joe Trippi, and Willie Brown — were not sufficient

"outsiders" because they "were connected in one way or another" with NBC. (Id. at 134:8-17,

139:21-141:12, 149:24-157:3.) But even if valid distinctions (and they are not), the idea to have a larger number or a wider range of notable personalities blogging for a site was, at best, a mere variation on, or a different way to execute, the pre-existing idea and, as a matter of law, cannot support a finding of novelty. (See cases cited, supra, pp. 15-16.)

2. The Combination of Elements Allegedly Proposed By Plaintiffs Existed Prior to November 2004

If that were not enough, the very combination of elements allegedly proposed by

Plaintiffs also already existed prior to November 2004. Plaintiffs' own contemporaneous

19 communications, including the 1460 Memos, acknowledge that their alleged idea derived from several existing websites combining news reporting, blogging, scoops, issue-oriented pages, and community features, including the Drudge Report and Daily Kos. (Ex. 15 at PROD 294-295;

Ex. 14 at HUFF 4852-53, 4855; Ex. 11 at HUFF 4821, 4824-25; Ex. 16 at 5-6, 8; Ex. 28 at

PROD 653; Ex. 18 at HUFF 4262.) Moreover, the Amended Complaint described Plaintiffs' alleged idea as a "new kind of progressive news-reporting and group blogging website" (Ex. 52

If 20 (emphasis added)), acknowledging that the idea was nothing more than a variation on existing sites. See Oasis Music, 161 Misc. 2d at 634 (plaintiff acknowledged that its idea was based on public-domain concepts and failed to demonstrate novelty where communications described idea as "combining the action of 'Miami Vice' with the interactive structure of computer games" and as "a 'Dungeon and Dragons' type adventure").

Moreover, Defendants identified eight websites that combined all five of the elements in various forms and executions, as well as dozens of other sites with combinations of two elements, three elements, and four elements. (Gordon Aff. Ex. A at 54-62.) The sites with all of the elements of Plaintiffs' alleged idea include (among likely many others):

• AlterNet.org included: (1) a group blog and a "Columnists" section featuring notable writers; (2) "Top Stories" and "News Logs" that aggregated news; (3) issue-specific pages on topics such as the War in Iraq; (4) periodic scoops and exclusives; and (5) discussion forums. • CBSNews.com included: (1) an opinion section with posts from CBS personalities and a section that republished posts from The New Republic, among others; (2) aggregated news from wire services; (3) issue-specific pages on topics such as the War on Terror; (4) periodic scoops and exclusives; and (5) a discussion board. • DailyKos.com included: (1) two group blogs written by Kos and other contributors; (2) news aggregation on its home page; (3) issue-specific pages on topics such as the Bush Administration; (4) periodic exclusive stories; and (5) an active commenter community. • FoxNews.com included: (1) "Fox Blogs" by its TV personalities; (2) aggregated news from the Associated Press; (3) issue-specific webpages on topics such as Politics and Health; (4) exclusive content in the "Only on Fox" area of its home page; and (5) reader comments published on selected blog posts.

20 • MSNBC.msn.com included: (1) the Hardblogger group blog and other blogs; (2) news aggregation from multiple sources; (3) issue-specific pages on topics such as Race in America; (4) regular exclusive stories; and (5) a "Letters to MSNBC" section that encouraged reader comments and ran selected examples. • Salon.com included: (1) the "Salon Blogs" group blog and a "Columnists" section featuring notable writers; (2) aggregated news from the Associated Press; (3) issue- specific pages and "Hot Topics" pages; (4) scoops and exclusives; and (5) the "Table Talk" forum and the WELL, a pioneering online service acquired by Salon in 1999. • TownHall.com included: (1) the "Conservative Weblog" group blog and a "Columnists" area featuring notable writers; (2) a News Wire page that aggregated news from Cybercast News Service and linked to other sources; (3) the "Today's Issues" section, which organized content by topics such as Taxes; (4) scoops and exclusives; and (5) user comments solicited by and published on the site. • Guardian.co.uk included: (1) a group blog written by Guardian staff; (2) aggregated news from wire services; (3) issue-specific "Special Reports" pages and pages dedicated to traditional news categories; (4) periodic scoops and exclusives; and (5) user comments on the news blog and discussion boards.

(Gordon Aff. Ex. A at 1-2, 54-62.)

Plaintiffs' expert's only responses to the sites are distinctions that are at best variations on pre-existing ideas or ways to execute an existing idea that are immaterial and cannot support a finding of novelty. For example, Dr. Golbeck admitted that AlterNet had a group blog (Ex. 19 at

158:12-21), featured a "wider" range of notables (id.), included curated news aggregation from a political point of view (id. at 173:10-13), included online community-building as purportedly described by Plaintiffs (id. at 192:10-193:6), had issue-specific pages designed to drive opinion

(id. at 220:14-221:12), and featured "important" scoops and exclusives (id. at 234:13-24). Thus, the only distinctions identified between AlterNet and Plaintiffs' alleged idea were that the group blog and notable personalities (writing a collective of opinion pieces called "columns" instead of blogs) appeared on different pages (id. at 162:3-15), that AlterNet included summaries of the news it aggregated in addition to linking out to third-party sites (id. at 171:2-173:24), and Dr.

Golbeck's baseless conjecture about the intentions behind the site (e.g., whether the site was intended to appear impartial or whether issue pages were intended to "live in and of themselves")

21 (id. at 171:2-17, 219:25-221:12, 225:20-24, 229:13-230:13, 233:8-15) — again, all immaterial as a matter of law. (See cases cited, supra, pp. 15-16.)

Dr. Golbeck's attempts to distinguish MSNBC are similarly unavailing. She admitted that MSNBC had a group blog featuring notable personalities (Ex. 19 at 149:24-150:9, 151:4-7), included non-partisan news aggregation (id. at 173:23-24), had community features (id. at

195:5-10), had issue-specific pages (id. at 219:5-8), and featured scoops and exclusives as a regular or continuing part of the site (id. at 234:25-235:5). But, again relying on immaterial details, she claimed that MSNBC's group blog did not have a "wide range" of notable personalities because it featured bloggers "connected in one way or another with NBC or

MSNBC" (id. at 150:12-151:22), that the site's news aggregation was "not curated in a way that you're trying to advocate for a certain political perspective" (id. at 173:25-176:15), that the community features were not designed to "build true community" (id. at 195:11-17),15 and that the issue-specific pages were organizational, not "advocating for a particular position" (id. at

221:13-21). These distinctions, too, are nothing more than variations on pre-existing ideas and cannot support a claim for novelty. (See, supra, pp. 15-16.)

Finally, even if all of the elements had not previously been combined in this form or with these variations, to do so would have been obvious because, as demonstrated, the elements of

Plaintiffs' alleged idea existed prior to November 2004 in various combinations, and all of

Plaintiffs' claimed elements had deep historical roots (alone and in combination) in journalism.

(See, supra, pp. 5-7; Gordon Aff. Ex. A at 21-22, 27-28, 39^10, 45, 52-53; Ex. 19 at 79:23-

80:2 (acknowledging that where combination of pre-existing elements is "relatively

15 Dr. Golbeck admitted that she did not speak to the creators of MSNBC — or any other sites — to determine whether or not the sites were designed to build "true community." (Ex. 19 at 195:18-20.) She also acknowledged that MSNBC may be perceived as having a particular political leaning. (Id. at 177:4-13.)

22 obvious...you need something on top of it" for idea to be novel).) Simply put, nothing about

Plaintiffs' alleged idea was innovative, and thus it was not novel under the law.

II.

PLAINTIFFS' CLAIMS FAIL FOR A HOST OF OTHER REASONS

A. The Idea Misappropriation Claim Is Time-Barred and Deficient

First, where, as here, the claim asserts an injury to property. New York courts apply the three-year statute of limitations under CPLR § 214(4) to causes of action alleging misappropriation — whether of ideas, trade secrets, or business opportunities. See IDT Corp. v.

Morgan Stanley Dean Witter & Co., 12 N.Y.3d 132, 141 (2009) (confidential, proprietary business information); Demas v. Levitsky, 291 A.D.2d 653, 658 (3d Dep't 2002) (research idea);

Powers Mercantile Corp. v. Feinberg, 109 A.D.2d 117, 119-20 (1st Dep't 1985) (business opportunity), affd, 67 N.Y.2d 981 (1986).16

Because idea misappropriation is a tort, the claim accrues — and the statute of limitations begins to run — when "the claim becomes enforceable, i.e., when all elements of the tort can be truthfully alleged in a complaint." IDT Corp., 12 N.Y.3d at 140. Accordingly, the last possible date that the claim could have accrued here is the date The Huffington Post launched, on May 9,

2005. Plaintiffs admit that they knew of the alleged misappropriation by this date, and likely knew earlier, by January 2005. (Ex. 10 at 253:15-255:13, 263:7-17, 302:17-24, 304:2-25,

16 One Second Department case is an outlier. In Dolgoff Holophase, Inc. v. E.I. du Pont de Nemours & Co., 212 A.D.2d 661 (2d Dep't 1995), the court concluded, without analysis, that the six-year period under CPLR § 213(1) applied to bar plaintiffs idea misappropriation claim and other claims. 212 A.D.2d at 662 (citing Bey Constr. Co. v. Yablonski, 76 A.D.2d 875, 876 (2d Dep't 1980) and N.Y. CPLR § 213(1)). Bey, however, examined the statute of limitations for an action on a constructive trust, not an idea misappropriation claim. See Bey Constr., 76 A.D.2d at 876. In addition, CPLR § 213(1) is the catch-all statute for "an action for which no limitation is specifically prescribed by law." CPLR § 214(4), however, "specifically prescribes" a three-year period for "an action to recover damages for an injury to property." The "essence" of Plaintiffs' misappropriation claim is an injury to property, and thus CPLR § 214(4) should apply. See, e.g., Brick v. Cohn- Hall-Marx Co., 276 N.Y. 259, 264 (1937) ("[I]n applying the Statute of Limitations we look for the reality, and the essence of the action and not its mere name.").

23 312:15-314:2; Ex. 6 at 105:6-106:23, 120:25-121:7, 296:23-297:4; see also Ex. 29.) Plaintiffs first brought their claim on November 15, 2010, and thus the claim is time-barred.

Second, the evidence also shows that no legal relationship — fiduciary, express, implied- in-fact, or quasi-contract — existed between Plaintiffs and Defendants. To succeed on their idea misappropriation claim, Plaintiffs must prove that the parties had the requisite legal relationship, in the form of a fiduciary relationship (sometimes called a "confidential relationship") or "based on an express contract, an implied-in-fact contract, or a quasi-contract." Oasis Music, 161 Misc.

2d at 631; Lapine, 31 Misc. 3d at 743; Norwood, N.Y.L.J., at 22, col. 5. This court dismissed, and Plaintiffs did not re-plead, the breach of contract and breach of fiduciary duty claims from

Plaintiffs' first complaint, and this Court has twice dismissed Plaintiffs' breach of implied contract claim. (See, supra, pp. 13-14.) And, as Plaintiffs concede, they had no written agreement — regarding any subject — with Defendants. (See, supra, p. 10.) Thus, Plaintiffs must show that Defendants, expressly or through a course of dealing, agreed to a "confidential relationship." See, e.g., Oasis Music, 161 Misc. 2d at 631 (confidential relationship existed where parties signed confidentiality agreement).

Here, Boyce and Daou concede that the parties had no confidentiality or non-disclosure agreement and that Defendants never expressly agreed to keep Plaintiffs' proposals confidential.

(Ex. 10 at 159:3-160:2; Ex. 6 at 241:25-242:4.) Although Plaintiffs claim that they expected

Defendants to keep the 1460 Memo confidential (Ex. 6 at 240:12-241:24), Plaintiffs' subjective expectation is insufficient to create the required relationship — particularly where, as here,

Plaintiffs' conduct belies any expectation of confidentiality. Plaintiffs themselves did not maintain the purported confidentiality of their alleged idea or mark their written proposals as

24 confidential. (Ex. 10 at 159:23-160:2; Ex. 6 at 242:5-8.) Further, Boyce and Daou shared and

1 7 discussed the 1460 Memo with many other individuals. (See, supra, p. 9.) B. Plaintiffs' Fraud Claim Is Insufficient as a Matter of Law

Plaintiffs' fraud claim fails on multiple fronts.18

1. Defendants Did Not Make False Statements with a Present Intent to Deceive

Under New York law, a statement of future intent, promise, or expectation is not actionable as fraud absent a present intent to deceive. See Non-Linear Trading Co. v. Braddis

Assoc, 243 A.D.2d 107, 118 (1st Dep't 1998); Sanyo Elec. v. Pinros & Gar Corp., 174 A.D.2d

452, 453 (1st Dep't 1991). Here, each alleged false statement is a promissory statement of future intent to work together to develop Plaintiffs' alleged idea. (Ex. 52 ]ffj 28, 32, 43, 70; see also Ex.

10 at 345:14—347:6.) Thus, Plaintiffs must establish that Defendants, at the time, never intended to carry out their alleged promises. See Non-Linear Trading Co., 243 A.D.2d at 118; Brown v.

Lockwood, 76 A.D.2d 721, 732 (2d Dep't 1980). Defendants' failure to follow through on the alleged promises is insufficient to prove a present intent to deceive. Brown, 76 A.D.2d at 732-

33; see also Lanzi v. Brooks, 54 A.D.2d 1057, 1058 (3d Dep't 1976) ("[A]ny inference drawn from the fact that the expectation did not occur is not sufficient to sustain the plaintiffs burden of showing that the defendant falsely stated his intentions."), affd, 43 N.Y.2d 778 (1977).

17 Plaintiffs' alleged idea also does not satisfy the concreteness element of an idea misappropriation claim. Under New York law, "[ijdeas not reduced to concrete form are not protected." Educ. Sales, 65 Misc. 2d at 417 (granting summary judgment where idea was "clearly... quite malleable and not in such fixed and concrete form as to indicate a protect[a]ble idea"). As Plaintiffs allege, no one communication contained their idea; it was conveyed in a series of "memoranda, verbal communications and emails in November and December 2004." (Ex. 52 11.) And the document alleged to have the "core" elements of Plaintiffs' idea — the 1460 Memo — was an evolving document of which at least five versions exist. (Exs. 11, 14-17.) 18 To prevail on the fraud claim, Plaintiffs must establish (1) a misrepresentation or omission of material fact that was false and known to be false by the defendant, (2) made for the purpose of inducing plaintiffs to rely upon it, (3) justifiable reliance by plaintiffs on the misrepresentation or material omission, and (4) injury. Lama Holding Co. v. Smith Barney, 88 N.Y.2d 413, 421 (1996). If a single element is lacking, the claim must be dismissed. Shea v. Hambros PLC, 244 A.D.2d 39, 46 (1st Dep't 1998).

25 Plaintiffs allege that Defendants' present intent to deceive was demonstrated by their supposed assembly of a "secret team," with whom they shared Plaintiffs' alleged idea, to develop the website without Plaintiffs' involvement; by their purported requests for additional plans from

Plaintiffs; and by their "cover-up" of Plaintiffs' role in the site's creation. (Ex. 52 ^flj 52-53, 59,

69-77.) The record shows that each assertion is contrary to fact, and thus no inference of a present intent to deceive may be drawn from them.

First, the record does not support the assertion that Defendants assembled a "secret team" to develop the website idea without Plaintiffs. On the contrary, Huffington and Lerer had been talking to Sekoff, Breitbart, and Peretti — with whom they had worked for years — about various projects since mid-2004, long before Boyce sent Huffington a copy of the 1460 Memo.

(Ex. 1 at 22:5-23:3, 171:4-21, 174:8-14; Ex. 7 at 34:10-14, 122:2-18, 127:2-10; Ex. 4 at 28:7-

16,77:20-81:21, 131:7-15, 132:9-133:8; Ex. 5 at 48:18^19:8, 59:12-60:13, 88:22-93: 15.) And the fact that Sekoff, Breitbart, and Peretti were working with Defendants was no secret to

Plaintiffs. (Ex. 10 at 192:23-193:4, 194:4-195:4; Ex. 52 1 104(e).) Plaintiffs admit that they knew by January 5, 2005 that Huffington and Breitbart were working together on the site that would become The Huffington Post. (Ex. 10 at 254:15-20; Ex. 29.) Sekoff was Huffington's closest colleague and involved in all of her projects. (Ex. 7 at 32:16-21.)

Second, every one of Defendants' purported follow-up requests of December 17,

December 20, and December 22, 2004 (Ex. 52 fflf69-71 ) are internal communications between

Boyce and Daou and do not include express requests from Defendants. (Exs. 26, 27, 28.) The record contains no further written communications between the parties about Plaintiffs' alleged idea after the December 7, 2004 "rough proposal."

26 Third, there is not a stitch of evidence in the record that Defendants plotted to or engaged in a cover up of their supposed misappropriation of Plaintiffs' alleged idea. (Ex. 52 ^flf 75-77.)

Plaintiffs' only claimed support for their theory is a set of meeting notes, dated March 29, 2005, summarizing a conversation among Huffington, Lerer, Breitbart, and Sekoff about how to describe The Huffington Post and the origins of the project to the press. (Id.; Ex. 46.) Rather than reveal the "deliberate creation of a false and fraudulent 'narrative' to explain the origin of the idea for The Huffington Post" (Ex. 52 ^f 75), the minutes plainly show the principals

"questioning [them] selves" about how to "pitch[] to media outlets the story that [they] would like to be published" about The Huffington Post — a routine operational step taken in preparation for the launch of any new venture (Ex. 7 at 45:21-46:19; see also Ex. 46). Indeed, Yehuda

Sugarman, the research assistant who prepared the minutes, testified that no one ever told him that the minutes were created for the purpose Plaintiffs surmise and that he had never even heard of Daou or Boyce, let alone transcribed the minutes of an elaborate cover-up designed to wipe them from existence. (Ex. 45 at 63:2-64:20, 65:6-16.)

2. Defendants' Alleged Statements Were Not Intended to Induce Reliance

Plaintiffs also cannot show that Defendants' alleged statements were intended to induce reliance. Plaintiffs' theory is belied by the chronology of events. They claim that Defendants induced them to share their alleged idea by promising to participate in the development of the website, but it is indisputable that Boyce shared Plaintiffs' alleged idea with Huffington on

November 14, 2004, in two separate e-mails, before any alleged misrepresentations by

Defendants. (Ex. 52 fflf 26-28; Exs. 14, 15.) As Boyce's November 14, 2004 e-mail — noting that Plaintiffs want to "talk about [Huffington's] role"— shows, and as Boyce conceded at this deposition, Huffington had not yet agreed to "participate" in the 1460 project. (Ex. 14; Ex. 6 at

27 48:6-10; see also Ex. 52 \ 28 (Boyce updated memo on November 15 to reflect Huffington's

"agree[ment]").) Defendants could not have induced Plaintiffs to share their alleged idea because Boyce disclosed it to Huffington before Defendants made any alleged false statements.

Nor is there any evidence supporting Plaintiffs' bald claim that "Huffington and Lerer, and their agents, continued to remain in contact with Plaintiffs and continued to solicit ideas and business plans for the website," for the purpose of inducing reliance. (Ex. 52 | 73.) The parties never met again after December 4, 2004 (see, e.g., Ex. 10 at 55:21-56:2), and there are no written communications among the parties about Plaintiffs' alleged idea after December 7, 2004.

Furthermore, Plaintiffs' claim that Huffington sent articles to Daou between December 2004 and

February 2005 for the purpose of "lulling Plaintiffs into the false belief that they were working together" has not a speck of support. (Ex. 52 ^ 73.) As Huffington testified, the articles were copies of her syndicated columns, which she sent to several people for posting on their respective websites (such as the Daou Report, Talking Points Memo, and the Drudge Report), and they had nothing to do with The Huffington Post. (Ex. 1 at 258:19-259:14; see, e.g., Ex. 48.) Daou also admitted that, by January 2005, he suspected that Defendants had proceeded without him (Ex. 10 at 253:15-255:13, 263:7-17, 302:17-24, 304:2-25, 312:15-314:2; see also Ex. 29); thus,

Huffington's distribution of her columns hardly could have lulled Daou into believing that he and Huffington were partners in the website, when he already had concluded otherwise.

3. Plaintiffs Did Not Justifiably Rely on Defendants' Statements

The record evidence shows that Plaintiffs' conduct in the six years between the launch of

The Huffington Post and their filing of this lawsuit was wholly inconsistent with justifiable reliance on Defendants' purported representations that they would work together. In the nearly six months between the parties' last communications about Plaintiffs' alleged idea and the

28 launch of The Huffington Post — an event that received extensive pre-launch publicity, including in the New York Times — Plaintiffs never raised their claims with Defendants and never objected to their purported exclusion from the website. (See, supra, p. 12; see also Ex. 47;

Ex. 50 at 7 ("the parties' actions since 2004 have been inconsistent with their alleged co-venturer relationship").) And in the months and years after the site's launch. Plaintiffs sought out additional opportunities to work with Defendants and regularly blogged on the site, like thousands of others, using The Huffington Post as a platform for their own ideas, projects, and business ventures. (See, supra, pp. 5, 12.) They also praised Huffington and Lerer and, without reservation, gave them credit for developing the site. (See, supra, pp. 12-13.) Plaintiffs also never claimed to be founders of The Huffington Post or sought compensation or credit from

Huffington and Lerer until the eve of filing this lawsuit. (See, supra, pp. 12-13; see also Ex. 52

Iflj 81, 90.) These are not the actions of individuals relying on a purported agreement to build a website, with Huffington and Lerer, as "co-founders." Plaintiffs acknowledged that they knew that Defendants were working with others on the website by January 2005 and, at the latest, knew by May 9, 2005 that The Huffington Post had launched without them. (See, supra, pp. 23,

26, 28.) Plaintiffs do not cite a single statement or action by Huffington or Lerer in furtherance of a scheme that would have permitted Plaintiffs' alleged reliance after January 2005 — at which point the facts could not have been clearer that the parties were not working together, a fact

Boyce and Daou plainly understood. Nor did the parties have the kind of confidential, fiduciary, or contractual relationship that would have justified such reliance. (See, supra, pp. 24-25.)

C. Plaintiffs' Unjust Enrichment Claim Is Insufficient as a Matter of Law

Plaintiffs also cannot raise a triable issue of fact as to whether Huffington and Lerer were unjustly enriched at Plaintiffs' expense. See Mandarin Trading Ltd. v. Wildenstein, 16 N.Y.3d

29 173, 182 (2011) (plaintiff must show that "(1) [defendant] was enriched (2) at [plaintiffs] expense, and (3) that 'it is against equity and good conscience to permit [defendant] to retain what is sought to be recovered'"). Boyce and Daou voluntarily disclosed their alleged idea to

Huffington and Lerer before they allegedly agreed to be involved in the project, and the evidence shows that, contrary to Plaintiffs' allegations, Boyce and Daou never provided additional ideas and plans to Huffington or Lerer at their request after December 7, 2004. (See, supra, pp. 11,

26.) Thus, Plaintiffs provided no services — and therefore no benefits — to Defendants, as they must have done to sustain a claim for unjust enrichment. In addition, for the reasons discussed above (see, supra, pp. 24-25), Plaintiffs cannot establish a relationship among the parties that could have induced reliance. See Mandarin Trading, 16 N.Y.3d at 182; Georgia Malone & Co. v. Rieder, 86 A.D.3d 406, 408 (1st Dep't 2011).

Conclusion

For all of the foregoing reasons, this Court should grant summary judgment in favor of

Defendants dismissing the Amended Complaint in its entirety.

Dated: August 6, 2013 New York, New York

PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP

Lynjyfe. Bayajrd Hallie S. GoldWt Rachale C. Miller

1285 Avenue of the Americas New York, NY 10019-6064 (212)373-3000

Attorneys for Defendants Arianna Huffington, Kenneth Lerer, and TheHuffingtonPost. com, Inc.