Trial court case;
According to the plaintiff:
This is an action for unfair business practices and defamation. Defendants, who are certain unidentified individuals and/or entities, acting alone or in concert with others, have deliberately engaged in relentless misinformation campaigns in an effort to denigrate Plaintiff's business in order to reap profits for themselves.
(Complaint, docket #2, at 1 (October 5, 2005))
Defendants are trying to hide behind California's Anti-SLAPP law to escape responsibility for deliberately posting fabricated press releases, SEC filings, and emails on Yahoo!'s Finance Message Board about Eagle Broadband's financial health and business operations to harm the company financially and to drive its stock price down.
(Opposition to anti-SLAPP motions, docket #23, at 1 (January 20, 2006))
According to some of the defendants:
This lawsuit is an effort by a financially troubled company to silence its critics and a public relations ploy (filed two weeks before the annual shareholders' meeting) to create an illusion that its management is looking out for shareholders' interests.
(Reply memo of Does 4 and 5 re: motion to strike, docket #35, at 1 (February 15, 2006))
The plaintiff in this case seeks to distract the investing public and the court from the simplest and most direct explanation for a decline in the price of their shares: a lack of faith in the company's long-term prospects for growth – or even viability as an organization, together with the company's consistent pattern of issuing additional shares, thereby deflating the value of existing shares.
(Reply memo of Does 2 and 3 re: motion to strike, docket #39, at 1 (February 16, 2006))
For the benefit of anyone researching any of the issues involved in
this case, I've put together this web site,
http://eagle.petrofsky.org. It is a compilation of
information from the web sites of the courts that are involved in the
case, with the addition of many of the court records
that the courts do not make available online. I
obtained some of the records from the courts (mostly on paper, from which I
scanned them into electronic form) and some from parties' counsel,
whose help I appreciate.
These pages could very well be out of date at the time you are reading them. For current docket information, please follow the links to the court web sites.
Please direct any questions or comments about this site to Al
<email@example.com>. (To answer
one question: No, I am not a party to this case. At least, I don't
believe I am, but I suppose it's impossible to say so definitively
when most of the parties have only been identified as Does 8 through
25. I can say that I have never used any of the seven pseudonyms
named in the complaint, that I have never had any pecuniary interest
in Eagle Broadband, and that I hadn't even heard of Eagle Broadband
until I read a news report about this case.)
Links to the pages on this site:
The first two are part of efforts by Thomas Mould (Doe 5) to collect the $66,451.68 judgment against Eagle that was filed on August 9, 2006:
At the time Mould filed his lien in California (in October 2006), there was at least one outstanding lien in Texas against an Eagle subsidiary:
(The other lien mentioned in that schedule was a $100,798.82 tax lien against subsidiary D.S.S. Security, Inc., filed in Harris County on January 10, 2006 (file #Z017725), which was released on February 28 (file #Z118857).)
H. Dean Cubley was Eagle Broadband's Chief Executive Officer from March 1996 to October 2003, and then its Chief Technology Officer from October 2003 to September 2004. He was also a member of the board of directors from March 1996 to September 2006.
In October 2005, Eagle Broadband alleged in its Eagle vs. DOEs complaint that Daniel Berger (Doe 3), in September 2004, had "deliberately posted false and misleading information concerning the trading activity of Dr. H. Dean Cubley, the company's then Chief Technology Officer[,] on the Yahoo! Finance message board to undermine public confidence in Eagle Broadband" (p. 8:22-24).
Something that it seems would undermine public confidence in Eagle Broadband a good deal more than a statement that Cubley had been selling stock would be a statement that Cubley had been practicing fraud. Eagle itself would later make just such a statement about Cubley, on September 15, 2006. (One month later, Eagle dropped its complaint against Berger.)
Cubley sued Eagle for breach of contract, and in its answer Eagle wrote: "the contract sued upon (the 'Cubley Note') was induced by fraud. ... As a result of the fraud practiced by Plaintiff [Cubley] in the inducement of Defendant's agreement to enter into the Cubley Note, Defendant seeks an order of the Court setting aside the Cubley Note as unenforceable." (p. 1-2)
The contract at issue, which was attached to Cubley's petition, was executed on December 10, 2003. It was filed a year later with the SEC, as Exhibit 10.16 to the Form 10-K/A filed on December 29, 2004.
In the final judgment on June 20, 2007, the court ordered that "H. Dean Cubley is awarded final judgment against Eagle Broadband, Inc. as follows: the unpaid balance of the Promissory Note in the amount of $1,923,052.59; plus interest in the amount of $814,113.41 through March 1, 2007; plus additional prejudgment interest accruing at the rate of 18% from March 1, 2007 through date of this judgment; plus attorney's fees in the amount of $51,489.48; plus costs of suit totaling $1448; and post-judgment interest accruing at the rate of 18% compounded annually from the date of this judgment until the total amount of this judgment is paid in full".
The case is H. Dean Cubley vs. Eagle Broadband, Inc., Cause No. 2006-52676 in the District Court of Harris County, Texas, 333rd Judicial District, Judge Joseph J. Halbach, Jr..
Here are a few of the case documents (retrieved from
It appears that among the underlying issues in the Eagle Broadband v. Does case are the past possibility and the future possibility of class-action shareholders' suits against Eagle Broadband and/or its officers and directors.
In Roy Thomas Mould's (Doe 5's) February 14, 2006 declaration, he contended that Eagle's suit was brought partly in retaliation for Mould having "publicly suggested a shareholders' lawsuit" in messages he posted to Yahoo in March 2005. (See paragraph 17 of his declaration, and Exhibits P, Q, and R to Clifford's declaration.) Although those March 2005 messages did not culminate in any shareholders' suit against Eagle, Mould has actually filed a class-action shareholders' suit against at least one other publicly traded corporation and some of its officer/directors.
PainCare Holdings, Inc. (AMEX ticker: PRZ) announced on March 15, 2006 that it would be restating its financial results for the previous five years. Six days later, Mould was the first of many shareholders to file a suit against PainCare and its CEO and CFO. A group led by Mould then made one of several bids to be named the lead plaintiff in the consolidated class action. In an order filed on July 28, the court instead selected The Employees' Retirement System of the Government of the Virgin Islands as the lead plaintiff.
The case caption is now In re PainCare Holdings Securities Litigation,
Case No. 6:06-cv-362 in the United States District Court, Middle District of Florida.
Links to a few of the documents: docket; complaint; motion; declaration; report; order.
A question about California's anti-SLAPP statutes, as amended in 1999, was whether or not an appeal from a denial of a defendant's anti-SLAPP motion (such as the appeal in Eagle Broadband v. Does on May 8, 2006 by Richard Williams a/k/a DOE 4) automatically stays all further trial court proceedings on the merits. The Second Appellate District held in 2002 that such an appeal automatically effects a stay (Mattel, Inc. v. Luce, Forward, Hamilton & Scripps, 99 Cal. App. 4th 1179 (2002)), but the Sixth Appellate District, ruling in 2003 on a case from Santa Clara County, disagreed (Varian Medical Systems, Inc. v. Delfino, 113 Cal. App. 4th 273 (2003)). The California Supreme Court addressed the issue on March 3, 2005, ruling that "we agree with Mattel ..., and hold that an appeal from the denial of an anti-SLAPP motion automatically stays further trial court proceedings on the merits", and immediately added in a footnote that "Such an appeal does not, however, stay proceedings relating to causes of action not affected by the motion." (Varian Medical Systems v. Delfino, No. S121400, 35 Cal.4th 180, 195, slip op. at 14, footnote 8 (2005)).
The March 7, 2006 ruling in the Eagle case cites a California appellate court decision from May 5, 2005 in a similar case, Ampex Corp v. Cargle, No. A106345, 128 Cal.App.4th 1569, slip op. (2005), . That decision mentions an earlier unpublished opinion regarding the same trial court case: Ampex Corp v. Cargle, No. A099344, slip op. (April 30, 2003).
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