Legal Letter to JM on behalf of Turtle Hill

Mr. Mach:

Re:       Open Letter[1] Regarding Violations of the Non-Competition Clause of the February 1, 2018 Purchase and Sale Agreement Between You and Turtle Hill Events, Inc.

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[1]           We send this letter publicly because we feel an obligation to assure the community we are living up to our obligations in taking over your tainted events and to be transparent throughout this process.  We also ask members of the community reading this to bring any further violations of the Agreement they may be aware of to our attention. 

            My firm and I represent Turtle Hill Events, Inc. (“Turtle Hill”).  Reference is made to the “Purchase and Sale Agreement” you signed and dated February 1, 2018 (the “Agreement”), which is annexed hereto as Exhibit A.  Capitalized terms not otherwise defined herein shall have the meaning assigned to them in the Agreement.  While written addressing “you” for grammatical and narrative convenience (“you” here should be understood to reference all parties encompassed by the term “Seller” in the Agreement), this letter should obviously be read and discussed with your counsel on this matter, whether that counsel remains Attorney XXXX or has since changed, and should not be understood in any way as an attempt to communicate around counsel.

We write in regard to your recent flurry of Facebook posts reflecting an apparent complete disregard of our Agreement.  Three particularly notable posts are attached hereto as Exhibits B (the “Book on Kink Posts”) and C (the “Evil Expo Post”).  At the risk of stating the obvious, the Personal and Seller Non-Competition clauses of the Agreement prohibit you from doing anything like what you have implied and stated you are doing in the Book on Kinks and Evil Expo Posts.  Agreement at ¶¶ 7-8.  Particularly because any and all of Turtle Hill’s legal fees incurred in the enforcement of the Agreement are unambiguously your sole responsibility under the Agreement, my client has been hesitant to aggressively assert its rights.  It appears that these Posts are also part of a larger course of conduct intended to slowly violate the spirit and the letter of the Agreement, with the hope that no one notices.  Let us clear that up:  We have noticed.

We therefore now demand that (1) you cease and desist from any and all activities that violate, or suggest you intend to violate, the Agreement; (2) you publicly and specifically reaffirm your commitment to following the letter of our Agreement, and (3) you pay our legal fees pursuant to the Agreement.  To that end, an invoice for the legal services I have provided to date is annexed hereto as Exhibit D. 

Additionally, while we have no intention of simply running up legal fees needlessly, please do consider this your notice that our next step — should you not comply with our reasonable demands — is filing civil action to enforce the Agreement.  As I am sure counsel will explain to you, civil litigation can be extraordinarily expensive, particularly where, as here, there are numerous parties whose depositions might be relevant and years of corporate and personal records subject to electronic discovery.[1]  While my client has little interest in that particular headache for its own sake, Turtle Hill also feels it has certain community obligations having taken over the event that was ground zero for your sexual misconduct over any number of years, and specifically considers ensuring your compliance with both the Personal and Seller Non-Competition clauses of the Agreement to be chief among those obligations.  You may, therefore, expect those clauses to be fully enforced.

ARGUMENT

            The Agreement unambiguously imposes two non-competition obligations on you:  a personal obligation (¶ 8) and a corporate obligation (¶ 7).  Since the personal obligation is broader and unambiguously applies to you (it is even titled the “Jeff Mach Personal Non-Competition” clause), we will primarily discuss that clause herein, but you should know that the corporate clause also applies in many of the same ways.  The personal clause provides, in relevant part:

“Jeff Mach Personal Non-Competition.  Jeff Mach agrees that [he] … will not produce any kink or fetish related events for ten years.”

Agreement at ¶ 8 (emphasis added).  See also Agreement ¶ 7 (“Seller agrees that Seller … will not create or produce kink or fetish events in the next three years.”).  The Non-Competition clause was included in the contract expressly because of broad community concern that you would engage in exactly the sort of attempted “come back” you are engaged in now.

At the risk of stating the obvious, it has not yet been 10 (or even three) years.  And yet, despite your obligations under the Agreement, you have posted the following:

1.      “If you want to: (a) read my new book on kink, or (b) be invited to my birthday party, message me and I’ll reply in the morning.”  Exhibit B.

2.       “Evil Expo. Coming to New Jersey, January, 2020. Time to pay off the people screwed over by the last company, address problems, build solutions, and create a new generation of events. Email me to be a part. jeff@jeffmachevents.com.”  Exhibit C.

Other posts of recent vintage include calls for performers, PR professionals, a search for public venues in which to discuss your new events, and requests for assistance in finding “the best kink books out there.”  In short, it is clear from your online presence that you are publicly returning to the production of events, including and especially, kink and fetish related events.  Moreover, even if the “new generation of events” you are building up somehow does not involve explicitly kink or fetish events (some of the photographs on the WordPress page you parked at evilexpo.com are suggestive of kink/fetish aesthetics, at the least), you are obviously and intentionally — especially by simultaneously advertising your new venture and kink book — creating the perception that your new events will be kink or fetish “related.”

            As Turtle Hill made clear to you in negotiations and when you signed the Agreement, the mere fact of Turtle Hill associating themselves with you in any way was itself consideration for the Agreement.  That is, your engagement in this space is so toxic that in order to be willing to take over an event previously associated with you, Turtle Hill required assurances that neither you, nor any company you even had a stake in would return to the space.[2]  These terms are not, in any sense, overly onerous or unconscionable under New Jersey law.  See Fleckenstein Bros. Co. v. Fleckenstein, 76 N.J.L. 613, 614 (1908) (25-year non-compete agreement is enforceable where agreed to by owner/manager of a business as part of the sale of that business); Kadi v. Massotto, No. A-2555-07T2, 2008 N.J. Super. Unpub. LEXIS 2008, at *26 (App. Div. Nov. 10, 2008) (enforcing non-compete that prohibited “doing business in any state east of the Mississippi for five years, and in the New York metropolitan area for ten years”).[3]

Finally, owing to your public efforts to thwart the Agreement, we now find ourselves in exactly the situation the Agreement was crafted to prevent.  That is, in the eyes of the community, to the extent you now attempt to return to the kink and fetish event space, we are left having been “told so” by those who said it was foolish to bother with the Agreement.  Thus, we now turn to the Agreement and demand you perform.  To that end, please further advise your Cosigners on the Agreement (that is, your parents, against whom we will seek to collect if you are unable to pay our damages and fees) that they too may have liability arising under the Agreement should you not comply now with our demands.  These demands are not intended to in anyway cabin or limit the scope of our damages under the Agreement, and should instead be viewed as a good faith attempt to compromise.  These demands represent the minimum you must do to make us willing to walk away without fully and publicly vindicating our rights.

THEREFORE, we now demand:

1.      You cease and desist from any and all activities that violate, or suggest you intend to violate, the Agreement. Not only does this demand include the hosting of any explicitly “kink or fetish related” party of any kind, private or otherwise, but because of the public impressions on this matter that you have carefully cultivated, we must also demand you host no events whatsoever.  We also understand your publication of any materials whatsoever regarding kink or fetish related events that do not explicitly and prominently (i.e., on the cover of a book or in the beginning of a post) disclaim any intention to produce or host events at any point prior to February 1, 2028 to be a statement that you intend to violate the Agreement.  Such publication therefore damages our standing in the community in a way remediable at law.

2.      You publicly and specifically reaffirm your commitment to following the letter and spirit of the Agreement.  Given the history outlined herein suggesting that you are slowly testing the limits of what you can get away with, we expect and demand you make publicly clear that you understand the terms of our Agreement, and that you will be following its proscriptions carefully in the future.  For this purpose, a statement on your public Facebook account will suffice.  Anything less than that is, owing to your particular history vis-à-vis respect of boundaries and consent, entirely unacceptable.  I assure you that the parallels between your present testing and subsequent violation of boundaries and the “circumstances” surrounding your need to sell GKE are lost on neither me nor my client.

3.      You pay Turtle Hill’s legal fees, pursuant to the unambiguous terms of the Agreement.  My ordinary hourly rate and hours spent to date on this matter are unquestionably reasonable and proportional to the needs of the matter.  Therefore, my client considers the invoice provided to you as Exhibit D to be fully your responsibility.  You may have your attorney contact me to discuss remitting payment, or you may do so yourself.  Turtle Hill and I will expect payment to be made in full no later than thirty days from the date of this letter.

If you do not fully satisfy these demands, as I have stated above, we feel we have no option but to commence civil litigation.  We will expect a formal and public written assurance that you intend to fully comply no later than 5:00 p.m. on Friday, January 4, 2019.  That assurance may be submitted to me via email.  We will further expect every element of compliance to be complete by thirty (30) days from the date on this letter (that is, by the close of business on Tuesday, January 29, 2019—if you intend to comply, but believe this timeframe is unreasonable, we are happy to discuss that).  Barring that, we will begin litigation, and immediately seek a preliminary injunction.  In that connection, please also be advised that the appropriateness of preliminary orders in cases like this, prohibiting exactly the sort of conduct you are engaged in, is long and well-settled in New Jersey.  See, for example, Scherman v. Stern, 93 N.J. Eq. 626, 631 (1922) (upholding preliminary injunction enforcing non-competition clause because “[i]t cannot be said that the public suffers an injury in being deprived of the privilege of buying candy, stationery and tobacco of the defendants who, according to the present showing, attempted to carry on the business in violation of their solemn obligation not to do so”); LifeCell Corp. v. Tela Bio, Inc., 2015 N.J. Super. Unpub. LEXIS 1608, *134 (“[j]udicial enforcement of non-competition provisions … serves the public interest by promoting stability and certainty in business and employment relationships.”)

            Nothing in this letter is intended to waive any of my clients’ rights or remedies, whether at law or in equity, all of which are expressly reserved.

                                                                                    Yours, &c.,

J. Remy Green

Cohen&Green P.L.L.C.

Enclosures.

cc: 

XXXXXXX

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[1]           Please also consider this to be notice that litigation is unambiguously contemplated at this point, and all electronic information that could lead to relevant evidence should be preserved and any automatic deletion policies must be halted on pain of default, adverse inference at trial, or other discovery sanction.  See e.g., Pegasus Aviation I, Inc. v. Varig Logistica S.A., 26 N.Y.3d 543, 548 (2015).  To that end, while document preservation obligations likely arose much earlier than now, we hereby put you on notice that you should anticipate litigation and immediately take all necessary steps to preserve all documents that could possibly be relevant in a litigation in this matter, including but not limited to:  FetLife messages, posts, and profiles; social media profiles, posts and messages; emails; text messages; archive copies of any Snapchat, Instagram, Signal, or other self-deleting messages; records of any kind of any event you have considered hosting or producing, and any records whatsoever of or relating to the “circumstances” we both understood to be referenced in Agreement by the phrase “owing to circumstances surrounding this sale, including but not limited to, Mach’s reputation in the community, and the tenuous situation with his event, Wicked Faire, the fact of [Turtle Hill’s] purchase of GKE is itself good and valuable consideration given to Mach.”  Agreement at 2.  See also, October 14, 2018 WordPress Post, available at https://jeffmach.wordpress.com/(noting a “collection of allegations” regarding business and sexual practices — though confusingly also asserting that you have not “even been accused of sexual assault” — and explicitly anticipating litigation).  To the extent you are remotely unclear on what we mean by the “circumstances,” we are more than happy to clarify publicly.

            While this is obviously a matter between you and your attorney, as a matter of best practices, I personally advise my clients to have a specialist image their laptops and phones, in order to preserve the current state of any data they may have wittingly or unwittingly deleted in the past few months, so that it can be recovered later if necessary.  The additional money spent now is well worth the protection it buys from a spoliation motion. 

[2]           This is further reflected in the differing scope and structure of the two non-compete clauses in the Agreement.  Non-competes that cover more parties are scrutinized more closely by courts, and therefore must be narrower in scope.  The non-competition clause that covered all JME staff and any associated entities was written to cover only three years, and specifically “kink or fetish events,” while the clause personal to you lasted “ten years” and covered more conduct in prohibiting production of even “kink or fetish relatedevents.”  Agreement at ¶ 7-8 (emphasis added). 

[3]           Cf. also, W.L. Rife, Inc. v. Barto, No. A-1944-13T4, 2015 N.J. Super. Unpub. LEXIS 2056, at *14-15 (App. Div. Aug. 26, 2015) (directing evidentiary hearing on whether an enforceable oral agreement existed where the party claiming the agreement was “so one-sided that it would defy logic for him to have accepted them” where agreed to close his competing business; accept an onerous non-competition clause; direct his customers to the Company (regardless of whether they were Company customers before); forfeit his stock in the Company yet continue to guaranty its debt up to $200,000; pay $30,000 to the Company, secured by a mortgage on his home; and agree broadly to indemnify and hold plaintiffs harmless for any other damages caused by actions alleged in the verified complaint”).  In comparison, this Agreement was in writing, bears your signature, and has nothing like the onerous terms at issue in Barto. 

Indeed, even where the scope of a non-compete is found overbroad, the Solari rule (so-named for the New Jersey high court decision of that name) means that even an overbroad non-compete clause “would be enforced to the extent reasonable in time and space, despite the fact that it had been drafted in broader, unenforceable terms.”  Maw v. Advanced Clinical Communs., Inc., 179 N.J. 439, 456 (2004) (Zazzali, J. dissenting), interpreting Solari Indus., Inc. v. Malady, 55 N.J. 571, 585 (1970).  Thus, you can be assured that, regardless of what your lawyers might be able to achieve in litigation, even on the best day before the most favorable judge, there will still be some non-compete clause prohibiting what you are doing now.