Protip: Don’t Send Emails Threatening to “Inflict the Maximum Amount of Financial Pain” Allowed By Law

January 3, 2014 · by Venkat Balasubramani · in Content Regulation, Marketing

Dr. Karan wanted to open a call center in India to assist doctors in handling patient calls. He entered into agreements with Computech and mLogica, two entities owned by his childhood friend, Amit Okhandiar. Under the agreement, the two entities would develop or customize software to suit Karan’s needs.

Karan apparently became unreasonable down the road, demanding numerous changes, being less than cooperative in the testing process, and delaying payments, including to third party contractors. For whatever reason, Karan had it out for Okhandiar. He created and used the “amitchutia” @ gmail email address. (Chutiya has pejorative connotations in Hindi, as noted by the court. Sadly, the court did not reference the Urban Dictionary on this point.)

[Pro Tip No. 1: avoid choosing a pejorative email address when embarking on a course of bad conduct.]

Using this address he sent an email to Okhandiar advising that he would:

work night and day to inflict the maximum amount of financial pain that is allowed under the law.

[Pro Tip No. 2: don’t send emails threatening to “inflict the maximum amount of financial pain that is allowed under the law.”]

In March 2009, Karan sent an email demanding money from Okhandiar and others at mLogica – if he did not receive a full refund within five business days, he threatened to sue for $350,000 and punitive damages. Karan later obtained access to a batch of email addresses relating to mLogica and made good on earlier threats. In an email blast to many of mLogica’s customers, including Sybase, one of its most important ones, Karan said that Okhandiar siphoned off work and customers for himself while at Sybase. He also said that he contracted with Okhandiar for software but Okhandiar failed to deliver. The email included a link to Karan’s blog, which stated that Okhandiar did not pay his vendors and, that Okhandiar allegedly:

lured me into giving business to him for CRM development and then failed to deliver it…. [¶] He cheated me of 65k and that led to a total loss of 400k for my start up business in Pune, India. …

this man knows only how to cheat others and siphon money for his own greed. My painful experience leads me to advise you to stay away from doing any business with his companies.

[Pro Tip No. 3: making indefensible factual allegations is probably not a great idea under any circumstances, but particularly if they follow your threat to inflict the “maximum amount of financial pain”.]

Okhandiar and mLogica presented ample evidence of its revenues and profits and, at trial, adduced testimony from a former Sybase employee, mLogica employees, and expert witnesses to the effect that mLogica had significant revenues (and even greater prospects) and that the email from Karan caused a turn in its fortunes. The present value of those anticipated profits over the next three years would be $7.68 million. The jury awarded mLogica and Okhandiar each $1.23 million and the court entered judgment for a little more than half this amount, indicating that it would not permit a duplication of damages.

On appeal, Karan challenged causation. The court easily rejects Karan’s arguments, noting that there was a wealth of evidence as to mLogica’s prospects, and the email from Karan (“[g]iven Karan’s childhood relationship with Okhandiar, . . . the unkindest cut of all”) is the sole explanation for mLogica’s deterioration in fortune. The tone of the court’s opinion was downright stinging to Karan’s position, intimating that it would have granted sanctions to the plaintiffs if they had requested them.

We’ve seen a slew of defamation lawsuits fail because statements made online were merely opinion, hyperbole (when taking into account the coarseness of online discussions), or arguments about disputed facts that are supported by links. This case affirms that the good old fashioned defamation claim is alive and well, even when such a claim is based on statements made online or via email.

It’s unclear what Karan was thinking, or more likely not thinking, but the court has little patience for his position. While the court notes that Karan does not even attempt to defend the veracity of his statements on appeal, in passing, it notes also that: (1) contrary to his allegations about his company having spent $500,000 that was invested, “the record indicate[d] more than half that money was spent on his wife’s business-class trips to India and lengthy five-star hotel stays, and Karan’s car payments” and (2) although his brief alleges that Karan was a paragon of patience and good faith, the court says to the contrary that the record indicates “Karan was impossible to deal with for nearly all involved .. even a charitable read of his profanity-laced emails to mLogica staff does not evince a patient Karan or good faith efforts on his part to do anything but escalate conflict.”

Ouch.

Case citation: mLogica, Inc. v. Karan, G047285 (Cal. Ct. App. Dec. 30, 2013) [pdf]

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