See You in Which Court?
When people complain about “Big Tech,” they’re not just talking about the size of companies like Google, Amazon, Apple, and Facebook. They’re also pointing at the small number of individuals who control the digital giants that control our online lives. That’s one reason Jeff Bezos and Mark Zuckerberg are household names: they personify oligarchic power over the internet and, in many senses, our country.
The conservative-backed social media platform Parler, according to interim CEO Mark Meckler, wants to achieve “independence from the Big Tech oligarchy.” After his company was kicked off the Amazon cloud in the wake of the Capitol riot, Meckler determined that he needs to build an alternate online ecosystem that is “not going to be cowed by the woke mob.” In Meckler’s vision, this ecosystem will involve different cloud service providers, different banks, different payment processors—an entire universe of like-minded business partners “up and down the technology stack.”
But if Meckler succeeds, the result may end up mirroring an aspect of Big Tech that he now criticizes. Court filings in the ongoing, increasingly intricate saga of Parler v. Amazon suggest that Meckler’s company is controlled by someone who could well be considered an American oligarch, too.
Worse, according to allegations made by Amazon last week, Parler may be obscuring how much power this individual, the billionaire heiress and right-wing donor Rebekah Mercer, wields at the upstart social media site that’s been a gathering spot for right-wing extremists.
These new filings come as the fight between Parler and Amazon remains focused on one very specific and, to outsiders, rather bland question: Should the two companies be conducting their legal battle in federal or state court?
To explain how things got hung up on this particular question requires some quick backstory:
In January, Parler sued Amazon in federal court, accusing the online retailer and cloud services provider of committing antitrust violations and illegal business interference when it suspended Parler from the Amazon cloud. But then in March, in a maneuver Amazon says reeks of “gamesmanship” and “judge shopping,” Parler dropped its federal lawsuit and filed a new lawsuit against Amazon in Washington state court. Parler’s move came after an adverse early ruling from a federal judge, Barbara J. Rothstein, who said there appeared to be little likelihood of Parler prevailing on its claims, given that Parler’s evidence ranged from “faint and factually inaccurate” to “dwindingly slight.”
Parler’s new state lawsuit, according to Amazon, “concerns the same events, alleges the same basic facts, and asserts two of the same claims.” (Among them that Amazon breached its contract with Parler when it kicked Parler off its cloud services.)
Amazon swiftly exercised its right to try and pull Parler’s new state lawsuit back into federal court, where Parler’s claims had already been given a cool reception. Now, Parler is trying mightily to get itself and its lawsuit back into state court, specifically a state court located in Seattle, where one can imagine a jury being quite open to arguments about Amazon being a Big Tech monopolist that “pulled Parler’s plug” and then decided to “kick Parler while it was down.”
In this tussle over venue, the question of Parler’s true ownership structure has suddenly become very important.
When it yanked Parler’s new lawsuit into federal court, Amazon noted that the two companies are based in different states. If true, this would seem to satisfy a basic requirement for this type of federal court action. In support of the idea that the two companies are from “diverse” states, Amazon pointed to Parler’s very first filing in its initial federal lawsuit, in which an attorney for Parler wrote: “Parler LLC is a Nevada limited liability corporation with its principal place of business in Henderson, Nevada.”
Amazon is headquartered in Seattle and incorporated in Delaware. Presto: the companies are from “diverse” states. Or so it seemed.
In a corporate disclosure statement Parler had to file in federal court in March, the company appears to have added a new wrinkle by sharing additional details about its ownership structure. In its original corporate disclosure statement in January, Parler had told a federal judge that it’s owned by an entity called NDM Ascendant LLC. It further disclosed that the members of NDM Ascendant LLC are Rebekah Mercer and the Rebekah Mercer 2020 Irrevocable Trust.
But after Parler filed its new federal court disclosure statement in March (sealed at Parler’s request), Amazon revealed in its own filings that Parler’s second disclosure statement sheds additional light on the box-within-box-within-box structure of NDM Ascendant. “The Rebekah Mercer 2020 Irrevocable Trust has two trustees,” Amazon claims, citing Parler’s own disclosures. “Including J.P. Morgan Trust Company of Delaware.”
That’s significant, Parler has been arguing to Amazon in private emails now submitted to the court, because it means both Amazon and Parler have ownership ties to Delaware. And if both companies are Delaware companies, that violates the rule that parties in this type of federal action need to be from “diverse” states.
To which Amazon has been responding, essentially: Prove it.
“It is difficult to conjure a less sympathetic movant,” Amazon says of Parler in its recent filings. Amazon is now asking a federal judge to force Parler to turn over documents that would explain exactly when the J.P. Morgan Trust Company of Delaware became a trustee of the Rebekah Mercer 2020 Irrevocable Trust.
Amazon also wants to know “the state where each beneficiary of the trust is domiciled.”
According to Parler’s former CEO, John Matze, NDM Ascendant LLC is merely “Mercer’s alter ego.” Matze said this in a separate lawsuit he filed against Mercer and Parler last month in Nevada, in which he claims his shares in the company were wrongly taken from him when he was pushed out as CEO. In that lawsuit Matze also says the opaquely named NDM Ascendant LLC was designed “to mask” Mercer’s stake in the social media venture and he describes Mercer as “a resident of New York.”
If Amazon ends up discovering that all Parler ownership roads end up leading directly to Rebekah Mercer, and if Mercer is indeed living in New York, then that could complicate Parler’s claim to Delaware citizenship.
Parler attorney Angelo Calfo did not respond to two calls from Wild West requesting comment on Parler’s ownership structure, but he told The Seattle Times: “This is a ginned-up effort to try to throw mud at Parler, when Parler has been completely clear about its ownership.”
At the same time, Calfo is effectively telling Amazon, the federal judge, and The Seattle Times that if Amazon can’t figure out the inner-workings of NDM Ascendant LLC, that’s Amazon’s problem. Amazon is the one trying to place this lawsuit in federal court, and under the law, Calfo argues, Amazon “bears the burden” of proving the parties are from different states.
Fine, says Amazon, except that Calfo and Parler aren’t providing key information that Amazon needs in order to fully understand the inner-workings of NDM Ascendant LLC—“information that is in Parler’s exclusive control,” Amazon noted in a recent filing, and “has been purposely concealed from the public.”
On top of that, Amazon says, using italics in its court filing for emphasis: “Parler itself failed to discover this information” (until recently).
Will the oligarch-controlled Amazon succeed in getting Parler to reveal just how much it may be controlled by its own oligarch?
Federal Judge Barbara Rothstein, who’s already expressed a dim view Parler’s claims, will be deciding.
Some of the things I’ve been reading this week:
• A nationwide push for flimsy privacy laws — The Markup looks at how tech giants are promoting “weak” digital privacy laws in states around the country in an effort to “preempt stronger protections.” One of the places this investigation looks at: Washington State.
• Josh Hawley’s antitrust plan — It would ban mergers and acquisitions for companies worth more than $100 billion. And while a few other Republicans might support him in this, “the broader party would need a sea-change in thinking to embrace it,” says Axios.
• “Earth’s best employer” — That’s what Jeff Bezos, in his last letter to shareholders, says he wants Amazon to become.
• “Feed the algorithm” — A former member of the alt-right explains how easy it is to spread hate on YouTube.
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