Carreon seeks temporary restraining order in Carreon v. Inman, proposed settlement

This evening, Charles Carreon filed for a temporary restraining order, asking a Federal court to order IndieGoGo not to transfer the raised money to Inman or the charities themselves.  Here are the documents, courtesy of RECAP:  Carreon’s declaration and exhibits, the memorandum of points and authorities, and the proposed order.

UPDATE: Indiegogo responds.  Their opposition, with declaration of Indiegogo’s counsel (with an earlier copy of Carreon’s application here) and declaration by Indiegogo’s CEO.  More below — and Ken at Popehat’s update analyzing Indiegogo’s response is much more coherently brutal than mine.

UPDATE: Inman and the EFF file their response! Covered in a follow-up post here.

UPDATE (July 2, 2012): Court files order suggesting it is inclined to dismiss Carreon’s TRO application as moot.  The Court requested that Inman provide proof that the two remaining checks have been turned over to the charities, which would mean that Carreon’s TRO would accomplish nothing and should be dismissed.  More at Popehat.

More: the anonymous author of satirical website Charles-Carreon.com has filed a lawsuit against Carreon seeking declaratory relief.  Now, Carreon faces the formidable Paul Alan Levy of Public Citizen. Again, Popehat has the details.

Initially, a few things jump out at me.

First, Carreon made at least one erroneous statement of fact in his declaration (a document, if you’re unfamiliar, which is signed under penalty of perjury).  The most glaring is that he states:

Based on what I saw on page one of Exhibit B, I understood that if I clicked to contribute, Indiegogo would give $5 to ACS and $5 to NWF. [...] With the expectation that I would be making a tax-deductible donation to two widely respected, trustworthy charities dedicated to the elimination of cancer the protection of wildlife, respectively, I donated $10 to the Bear Love campaign, and received the receipt attached as Exhibit C.

That’s plainly belied by the exhibit, which demonstrates that he made the donation at 9:23PM the night before he filed the lawsuit, which alleged that people would be deceived into thinking their entire donations were going to the charities. He implies (at a minimum) that he thought it was all going to the charities and that his donation would be tax-deductible.  It’s highly unlikely that Carreon had not already written the 22-page complaint (again, filed the very next day) noting that “[t]he Indiegogo contract provides that it will keep 9% of the Charitable Fund and pay the remainder to Inman.”  Plainly, his motivation in donating lies bare: to get standing to sue Inman and Indiegogo.  Any pretense that he was unaware that Indiegogo would deduct a slight service fee is laughable.  In fairness to Carreon, the initial complaint did not allege that contributors would be deprived of a tax deduction, as that was added in the amended complaint.

Note also that the paltry $10 Carreon gave to the campaign is about 2.8% of the fee he paid to file the lawsuit over his $10.

Second, Carreon proposed to settle the dispute with IndieGoGo.  He includes among his exhibits a proposal to letter to IndieGoGo, which includes, in part:

Plaintiff is willing to resolve this entire matter by stipulation that will accomplish the stated purposes of the Bear Love campaign as defined by Mr. Inman, except as follows:

  •  No portion of the Charitable Fund shall be disbursed to Mr. Inman.
  •  The entire Charitable Fund will be disbursed 50/50 to ACS and NWF.

Third, I am attempting to work with ACS and NWF to assure that all of the 14,406 Bear Love campaign donors will receive receipts for their tax-deductible donations, which they of course would not receive if the money were disbursed to Mr. Inman. As I explained, based upon my non-specialist knowledge of tax law, if Mr. Inman were to receive the Charitable Fund and donate the funds to ACS and NWF, Mr. Inman, rather than the Bear Love campaign donors, would receive the tax deduction, a form of unjust enrichment that would inure to his benefit and to their detriment.

 

Fourth, if the matter can be resolved by stipulation, Plaintiff will waive: (a) his argument that Indiegogo is not entitled to receive the $8,800.56, i.e., four percent (4%) of the Charitable Fund because it is not a registered charitable fundraiser, as alleged in ¶ 60 of the FAC; (b) his prayer for relief seeking an injunction to restrain Indiegogo to “halt all ongoing campaigns on the Indiegogo site currently operating in violation of California law and hold all funds in charitable trust until Indiegogo registers with the California Attorney General as a charitable fundraiser and in all other ways complies with California law regulating charitable fundraising;” and, (c) his claim for an attorney’s fee as a public attorney general.

This, I think, demonstrates the motivation behind the suit: keep Inman from taking a photograph with the money and humiliating Carreon further.  [Edited to add:] The settlement would come at the expense of what Carreon professes to be his true motive: preventing a portion of donors’ funds from being diverted to IndieGoGo as part of their fee.  Furthermore, I think it shows that Carreon is feeling some weakness about the lawsuit and is looking for a graceful way to exit, at least with regard to the claims against the charitable fundraisers.  Except Inman.

Further, the paranoia continues, as Carreon says in his declaration that he wondered whether Inman was intending to divert some of the contributions to organizations affiliated with him.  Inman had suggested that he might pick two other charities to add to the list, after the fundraiser had unexpectedly raised far more than the  $20,000 initially sought:

At that point I thought: “This is a bait and switch campaign.” Bear Love campaign donors didn’t simply designate Inman to receive and disburse donations according to his liking. We had donated to two charities — ACS and NWF – and no others. Thus, I further asked myself: “I wonder who those other two charities are that he is talking about? Perhaps they are affiliated with Inman?”

 

Carreon makes a more direct suggestion that Inman has malicious motives — that Inman will embezzle some of the proceeds — in the Points and Authorities:

The intended beneficiaries of the fund, ACS and NWF, clearly will benefit from receiving the money without using Inman as an unneeded intermediary, avoiding the risk that he may attempt to extract an unlawful post-hoc fundraising fee.

Carreon’s implication that Inman intended to somehow profit off of the fundraiser isn’t substantiated.

Carreon also claims that Inman is deliberately misleading his readers into thinking that Inman and Carreon had compromised on the issue of how the charitable money should be distributed.  Inman wrote on his blog (emphasis added):

Previously I stated that because the amount raised was so much larger than expected I was going to divide the money into four charities instead of two, but unfortunately Carreon’s lawsuit claims that I’m holding an ‘illicit fundraiser’ and not donating money where I said I would. To avoid further litigation with him, I decided to split the money between the original two charities.

Carreon, meanwhile, complains that this statement falsely implies that a compromise had been reached or otherwise “forced upon” Inman by Carreon.  That’s simply not true: Inman does not imply that an agreement has been reached and his decision to split the money between the original two charities was a direct result of Carreon’s lawsuit.

Lastly, Carreon responds to Inman’s criticism that a temporary restraining order would slow down the distribution of the money to the charities, arguing:

However, the only thing that will slow down the process of getting the money to NWF and ACS is allowing Indiegogo to send the check to Inman, so he can cash it and pose for his
photograph alongside a stack of U.S. currency[.]

Which is likely to slow down distribution of the funds the longest: a restraining order preventing IndieGoGo from allocating the money “to any other person or entity” until after a trial, or Inman taking a picture next to a stack of cash and sending two checks to the NWF and ACS?

Wrap your head around that.

[Edited to add:]  For that matter, which is more likely to disrupt the intentions of the donors: the money being directly allocated to the charities after being tied up for months or years in litigation, or Inman taking a photo and sending the money to the charities?  A substantial amount of the donations were given during the time that Inman was suggesting that he might add two other unidentified charities, indicating that donors were interested in funding Inman’s kiss-off, with the guarantee that their money would go to some worthy (if unknown) cause.

UPDATE: Indiegogo responds. Their opposition is here.

Indiegogo points out what was on their website all along: the money was already transferred by dayCarreon filed his TRO application.  What’s more is that Indiegogo says Carreon knew that before he filed it — because they told him.  Granted, Carreon’s TRO seeks to restrain the money no matter where it is, but — at most — Indiegogo only retains the service fee they take as part of the contract:

Indiegogo’s share of that money is $8,800.96, and Carreon’s donation was $10.

But here’s the kicker: the charities already have the money.  At least — the money that was contributed by credit card.  Inman had already requested that Indiegogo cut checks to the NWF and American Cancer Society.  So they did.  In other words, there’s nothing left to restrain — except, of course, the taking of the picture, and perhaps whatever money Inman received via Paypal, unless that’s already been turned over to the charities, too.

And what about the picture? Indiegogo doesn’t tip its hand as to what’s happening with that. We’ll have to wait for Inman’s lawyers to weigh in.  My own pure speculation is that Inman may have negotiated with the charities to give them the money first, then take a picture with it.  Or take a picture with the Paypal money alone.  But we’ll have to wait to see.

That essentially decimates most of Carreon’s claims.  The money’s already been turned over to the charities, which was Carreon’s purported goal.  Further, Carreon’s own exhibits reveal that he’s willing to drop his complaints about whatever money Indiegogo collected, or whether Indiegogo was was properly registered with the state of California.  All that’s left, then, are Carreon’s complaints that Inman wasn’t properly registered, his invented “cyber-vandalism” tort, and his trademark claims against a Twitter imposter.

Indiegogo also slams Carreon’s claim that Inman will be unjustly enriched by a tax writeoff, calling it frivolous:

As for the tax write-off, Carreon’s assertions are pure speculation. They are unsupported by any citation to the tax code, any declaration of a competent tax professional, or anything else. On a motion for extraordinary relief on which Carreon bears the burden, they should be disregarded entirely. In any event, the contention that Inman would be unjustly enriched by a $200,000 tax deduction appears frivolous on its face. Any deduction Inman may have been able to take as a result of this campaign would be offset by at least an equivalent increase in income, thus leaving Inman at break-even or worse.

In other words, prepare for a Rule 11 motion for sanctions.

Indiegogo also questions whether Carreon has standing to assert claims on behalf of the other 14,000+ donors, noting that the case is not a class action.

Lastly, Indiegogo calls out Carreon’s TRO application as needless gamesmanship designed to attempt to secure an unfair advantage in the lawsuit (emphasis added):

Finally, the timing of Carreon’s application demonstrates that there is no irreparable harm here. Carreon’s complaint was filed over two weeks ago. At that point, both the end date of the BearLove campaign and the timeframe for disbursement of the money to Inman after the end date (within five business days) were known to Carreon. Indeed, Carreon’s original complaint cites the campaign end date and the same set of Indiegogo terms and conditions that contain the timeframe for disbursement. [...] Carreon could have applied for a TRO immediately. Instead, he waited to serve his papers until the middle of the period of time in which disbursement was to occur, presumably in an effort to manufacture an emergency. The Court should not countenance this gamesmanship.

Indiegogo concludes:

This case has little to do with preserving anything for a charitable purpose. Instead, it stems from a personal dispute between Carreon and Inman, and perhaps some ill-behaved readers of Inman’s “Oatmeal” website. Carreon is using that dispute to attempt to interfere with a charitable fundraiser that has raised over $200,000 for unquestionably good causes, in the process embroiling three innocent co-defendants – including two charities – in expensive litigation in federal court. The public interest cannot favor expending judicial resources to issue and enforce [an] injunction in a case like this.

More to come as I dig in further.  Whatever I find, I’m sure Ken at Popehat will find more and say it better.  In the meantime, please consider donating to another IndieGoGo fundraiser to raise funds for the Electronic Frontier Foundation, which is representing Inman, and Americans for the Arts.

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  • http://censoriousdouchebag.wordpress.com censoriousdouchebag

    I donated to see him next to the stack of money, as he clearly listed in his request for donations. So Carreon is now hindering the purpose of my donation. :-(

    • http://www.facebook.com/delvan.neville Delvan Neville

      A dunk tank with some manager or principal or other similar individual is a very common example of this same sort of fundraiser. Carreon wants to cheat us out of the dunk tank when we all (including him) paid to throw a ball! His Indiegogo campaign clearly links “More Information” for those contributors that had somehow reached the campaign page without viewing the blog post first: Carreon himself donated to have this picture taken.

    • Pat M.

      Sue him!

  • Hannah

    Dear God. Really, in all seriousness, Carreon should see a psychologist. He is clearly in need of some therapy. I’m not even being remotely sarcastic.

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  • http://rakiura.wordpress.com rakiura

    This is a classic “bait and switch” by Carreon, whereby he is trying to convince people he’s really a caring champion of the people, with only their best interests at heart; by acting like a self-centred douchebag, and wasting other peoples time.

    Really hoping for a dismissal so this whole debacle can end with an emphatic hammerblow that is a pile of $210k on a polaroid, and two massive chunks of cash reaching their destination unmolested.

  • FreddieA

    So …. Carreon is trying to make Inman change the terms of the entire Indiegogo campaign by preventing Inman sending a photo of the raised cash to FunnyJunk and Carreon …. perhaps thus raising the possibility of Carreon suing Inman for not doing what he promised to his donors (including Carreon) when they donated money?

  • jonnosan

    I agree – I actually don’t care whether or not the money I donated to Inman goes to the charities, but I _will_ feel very cheated if Inman does not take the promised photo of the pile of cash and send it along with the drawing of Funnyjunk’s mother.

  • http://winterdark.wordpress.com BitOBear

    Do keep in mind that Inman is not scheduled to be -in- the picture, he has said that his intent is to -take- the picture. While it would be possible to both take and be in the picture using a bulb or timer, I don’t think he thought that deeply about it.

    Carreon’s attempt to rewrite things to make it look like Inman is going for the egoist action of being photographed posing next to a large stack of currency is either an incompetent inability to process detail, or a deliberate lie to the court to make it look like Inman is doing an ego-shot photo.

    • Jack S

      But it would be far better if he did. It would be so much better if he took the photo in a bathtub filled with the money with stuffed representations of various animals and “cancer” along with various oversized showering accessories (shower cap, luffa on a stick, etc.). Of course, the picture of funnyjunk’s collective mother in the background!

      • ligne

        oh, that would be a thing of great beauty!

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  • Joe

    Mr. Inman, rather than the Bear Love campaign donors, would receive the tax deduction, a form of unjust enrichment that would inure to his benefit and to their detriment.

    First I contributed to the Bear Love campaign knowing full well it was NOT tax deductible. Nowhere was it mentioned that it was – either on Inman’s site or on Indiegogo. At some point we have to hold people accountable for actually reading things. I somehow doubt anyone who contributed really cares if it is tax deductible or not.

    Secondly, Carreon doesn’t know spit about the tax situation. As far as I can see, there is only one possible scenario on how the funds raised could be treated from a tax perspective if the funds were disbursed first to Inman. Namely that it is treated as income and then deducted as a charitable contribution with the end result being his tax rate stays the same. Now let’s assume I’m wrong about that and that Inman does get a neat little extra tax break for doing this. Who the hell cares about that except Carreon? Does Carreon really think the rest of us would begrudge Inman an additional tax break for initiating this campaign – not forgetting of course that Inman has invested his time and talent to do this – all without direct compensation?

    Third, I contributed specifically BECAUSE I wanted to see a picture of the money sent to FunnyJunk. I contributed specifically to say F.U. to FunnyJunk and Carreon. Why should Carreon’s rights for his paltry $10 exceed mine when my contribution was significantly larger than his by about 20x. Carreon is trying to say it is illegal to create a charitable contribution drive based on spite or hate or some other such nonsense. Yet, there is no law anywhere expressly prohibiting this. I would think technically all that contributed could file a class action against Carreon for disrupting the purposes for which they expressly donated. I know I’d be happy to be part of that, and I think it should be done to teach Carreon a lesson.

    Fourth, it’s ridiculous to assume anyone who contributed is going to care whether the disbursement to the charities is delayed a week in order for Inman to take a picture. A few days delay is far less than the months or years delay being caused by Carreon by tying this all up with his ridiculous lawsuit. Seriously does anyone think the two charities will begrudge Inman a week to take some photographs of some money they would not have received otherwise? Really?

    • http://www.kitcameo.artfire.com KitCameo

      That class action idea; I really really love it. I wasn’t one of the contributors, so I stand to gain nothing but entertainment value from it, but I really think that idea should be spread out among the donors. It might just have the power to stop Carreon in his tracks.

  • http://twitter.com/jaydeflix John Eddy (@jaydeflix)

    While I didn’t think Inman would try to abscond with the money, I was a little annoyed by the ‘Two charities to be named later’.

    Scientology is a 501.c.3, and I wouldn’t want to donate to them. I don’t donate to Komen because of the Planned Parenthood thing. And I don’t expect people who don’t support a woman’s right to choose to want to donate to planned parenthood.

    I’m pretty sure if you looked hard enough, you could find legitimate 501.c.3′s that you, personally, would not want to fund because of moral, religious, personal or even batcrap crazy convictions.

    I donated, but only after Matt decided to just stick to the original two charities.

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  • http://marklyon.org Mark Lyon

    Would it be useful for other donors to provide affidavits outlining exactly what we believed when participating in the Bear Love campaign?

    I personally donated $11 on June 11 with the intent that (1) my money would be photographed at the end of the campaign, along with the money contributed by other donors, (2) that the photograph of the funds and cartoon would be sent to FunnyJunk and its censorious douchebag of an attorney, (3) that the donations (less IndieGoGo’s fees) would not personally profit TheOatmeal and would be given by him as donations to certain charities.

    I would be deeply saddened if the promised photographing and mailing did not take place before the funds are transmitted to the charities. This step was a significant contributing factor to my desire to participate in the campaign.

    I was clearly aware of IndieGoGo’s fee structure before donating and expected that a small portion of my donation would be paid to IndieGoGo for their services. At no time did I desire, expect, anticipate – nor was I promised – that my donation would be tax-deductible. At no time did I labor under belief that the Bear Love Campaign was sponsored or approved by any entity other than TheOatmeal.

    I have no reason to doubt that Mr. Inman will perform the promised actions with the donated funds and look forward to seeing the photograph he sends to FunnyJunk once the funds are in his possession.

    I also hope that Mr. Carreon one day receives the assistance of the mental health professionals that he clearly needs.

  • Basil Forhtrightly

    The comments in the BearLove Good, Cancer Bad frequently mention Carreon and his legal shenanigans, and are clear evidence that many folks purpose in donating was not charitable intent per se, but rather to stand with Inman in expressing disdain for the demand letter, and subsequently for the lawsuit.

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  • http://twitter.com/jaydeflix John Eddy (@jaydeflix)

    Basil, I would say that’s suspect.

    Speaking for myself:

    I would not have given if there was not a charitable end.
    I would not have given if I didn’t know what the charities were.
    I would not have given if I didn’t approve of/support the charities.

    Expressing disdain for Carreon was…. well, not secondary, but was definitely a factor.

    The photo was secondary (tho expected).

    I didn’t expect a tax deduction.

  • http://www.andrewberryman.com Andrew Berryman

    Do we have a new Jack Thompson for everyone to despise?

    • http://twitter.com/jaydeflix John Eddy (@jaydeflix)

      I literally spent 20 minutes trying to remember Jack Thompson’s name last night before giving up. Wonder what he’s been up to….

      (I bet if we say his name one more time, he’ll show up like the Candyman…..)

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  • http://www.facebook.com/profile.php?id=100003406563607 Eye

    I guess my thinking is more as foolwls:!. She is incapable of engaging in rational discourse with the internet. So we’re not going to talk to her and cause her to have moment of clarity where she realizes how CC was acting as a censor and she was acting nuts. 2. She has no ability to hurt us. CC tried to hurt “us” (the internet folk) by going after the Does, but Public Citizen is shutting that avenue of attack down.3. The Carreons are setting up whole websites about this to get attention from it. Basically we’ve feeding her with attention (which she wants), making her feel important (look at ALL these people out to get me because I’m such a great activist), and increasing the crazy. The only real winner is Ars who gets to write an article (and thus pageviews) every time she posts a stupid rant. It’s just kind of devolved into troll vs troll in a way at this point in my mind. She’s a fun squeaky toy to bat around for awhile, but she has no variety. No matter how this ends, TC is claiming victory. She’ll sit there in her house in Tuscon and talk about how badass she was because the Illumanti never did dare send a hit squad after her. If she ends up in the psych ward, it was a victory because she was so dangerous the shadow government locked her away to hide the truth. I see refusal to engage her as the strongest message. “Your husband lost all his court cases, The Oatmeal got its money, even Public Citizen kicked you in the nuts, and none of us even care to engage you because you’re a irrelevant loser.” Basically I feel she can’t tell the difference between negative and positive attention, she just loves attention.

  • http://www.facebook.com/profile.php?id=100003406549051 Lucas

    The thing that really pssies me off about people like this whining about “distributed reputation attacks” or “internet mobbing” is that that kind of thing really does happen it just didn’t happen to them. There are plenty of cases of decent people being viciously hounded by an “internet mob” in order to shut down what they are saying. The most recent one I have seen was the coordinated attack on Anita Sarkeesian by a bunch of misogynistic gamers who were offended that she was trying to raise money to produce a series of videos analyzing the way female characters are treated in video games. A group of at least a dozen people coordinated an attack involving rape and death threats sent through pretty much every digital channel where she could be expected to receive messages, attempts to shut down her Kickstarter campaign by claiming it was terrorism, DDoS attacks on her website and pornographic vandalism of the Wikipedia page about her. As horrible as that was, there are already existing remedies for what happened to her. She worked through existing channels to keep the Kickstarter going, repair the Wikipedia page, and improve security on her website. She calmly talked about what was happening on her Kickstarter page and on her website, making the point that no one should have to put up with this and that she wasn’t going to let it stop her project. The attacks got media attention, and ultimately her Kickstarter raised over 26 times the money she needed from almost 7,000 supporters. I have no idea what legal remedies she is seeking, because she’s not talking about it. (The only comment she has made is that a few “scarier things” have happened than what she described, but that she is safe and “working with authorities to deal with it.”)