CORRECTION

Dear Ms Pynchon,

I write concerning the following statement on your website:

I looked this case up on the L.A. Superior Court's website. Assuming I have the right case number (BC353567), this appears to be a default judgment, a fact not mentioned in the press
release.

The statement is incorrect, although I think I understand the source of the error.  There were four iFreedom defendants in the case as initially filed:  Timothy Ringgenberg and the three corporate
entities.  One of those corporate entities defaulted.  The other three moved to compel arbitration.  The $4.1 billion judgment confirmed the arbitration award against the three arbitrating defendants.  It was
not a default judgment against the defaulting defendant.

I would be grateful if you would make the correction.

Many thanks.

From the California Punitive Damages Blog:

UPDATE: I looked this case up on the L.A. Superior Court's website. Assuming I have the right case number (BC353567), this appears to be a default judgment, a fact not mentioned in the press release.

UPDATE FROM THE LOS ANGELES DAILY JOURNAL -- FULL ARTICLE FOR SUBSCRIBERS AT LINK WITH COMMENTARY FROM SETTLE IT NOW'S GOOD FRIEND AAA ARBITRATOR JAY MCCAULEY (excerpt of DJ article below):

Arbitrator William F. McDonald, a retired Orange County Superior Court judge, found iFreedom Communications International Holdings Limited, and its founder, Timothy Ringgenberg, liable for more than $975 million in compensatory damages and awarded nearly $3 billion in punitive damages, as well as interest and penalties, to Paul Thomas Chester.

As chief marketing officer for iFreedom, Chester was promised commissions of 5 percent on the company's gross revenue. When he did not receive the compensation and confronted iFreedom, Chester was terminated without cause, according to his attorneys, Scot Bernstein and Steve Buchwalter.

Ringgenberg concealed data on gross revenue during discovery, even after McDonald ordered him to turn it over, the arbitrator found. Chester's award was therefore based on information Ringgenberg presented to the company's shareholders, including monthly revenue of $535,000 and monthly growth rates of 10 percent to 20 percent.

                                    *                    *                    *

Bernstein said the award illustrates how quickly damages, interest and penalties against an employer can snowball into a large sum. In arbitration, awards are most often binding.

Some employers, Buchwalter said, might now rethink whether arbitration agreements are in their best interest.

But for many businesses, the benefits of arbitration will continue to outweigh the risks, said Jay McCauley, an arbitrator on the American Arbitration Association's employment panel, who is not affiliated with this case.

With binding arbitration, "the good side is you're done," he said. "The bad side is if the result comes out big and contrary to what you've expected, there's no place to go. You're flying on a trapeze without a safety net.

"Some employers may say, 'We still like the benefits of arbitration - avoid the jury, faster hearings, someone who knows the case - but boy, maybe we should think twice about having no safety net at all, no chance when things go wayward,'" he said.

All I have now is the Plaintiff's attorneys' own press release.  Excerpt below.

SACRAMENTO, Calif., June 2 /PRNewswire/ -- Released today by Law Offices of Scot D. Bernstein, A Professional Corporation, and Law Offices of Steve A. Buchwalter, P.C.: In what may be a record, the Los Angeles County Superior Court has issued a $4.1 billion judgment confirming a JAMS arbitration award. The defendants, including iFreedom Communications International Holdings, Limited, and its founder, Timothy Ringgenberg, were found liable for compensatory and punitive damages in an employment dispute with Paul Thomas Chester, their former Chief Marketing Officer.

Mr. Chester became the defendants' Chief Marketing Officer in June 2004. The defendants' promises to pay him certain commissions and overrides on gross revenues, his right to receive company stock, and the other elements of hiscompensation package reflected his experience in building marketing organizations. "When the promised compensation was not forthcoming, Mr. Chester raised the issue with his employers. By then, the employers had obtained the benefits of Mr. Chester's knowledge and expertise, and they quickly terminated him without cause," Scot Bernstein said.

Mr. Chester sought the assistance of legal counsel. Due to the lack of cooperation from his former employers, Mr. Chester was forced to file suit. The defendants, in turn, moved to compel him to arbitrate the case pursuant to an arbitration clause in the employment agreement.

The arbitrator, a retired judge, determined that the defendants had obtained Mr. Chester's services by means of false representations and fraud. In addition to all unpaid salary, commissions, travel expense reimbursements, and compensation for unissued company stock and unreturned intellectual property, the arbitrator awarded statutory penalties, interest, attorneys' fees, and punitive damages equal to three times the compensatory damages. 

(I don't imagine this is something JAMS will want to crow about)

Here, by the way, is the 411 on the Defendant against whom this spectacular award was made (from Buisness Week)

IFreedom Communications International Limited provides communication services via the Internet using the Voice over Internet Protocol (VoIP) and Wireless Fidelity (WiFi) technology. The company offers Global Connect (GC), which is a global network providing voice communication services. iFreedom Communications is based in Hon Kong.