XonDemand Default Judgment Looms as Attorney Seeks to Withdraw

LOS ANGELES —  XonDemand.com, which was hit with an infringement suit by Private Media Group last year, could face a default judgment worth millions in the case if it doesn't arrange replacement counsel for a hearing set on Monday.

Industry attorney Clyde DeWitt, who originally was hired to defend the video-on-demand site after Private sued it for allegedly streaming content for more than three years after a 50 percent revenue-sharing contract was terminated in 2007, has asked a federal judge to withdraw from the case.

DeWitt, in several motions to a federal court, said that he's had difficulties with his client, XonDemand, because the company has only paid a fraction of its attorneys fees and that he's been having difficulty communicating with the company.

"To  the  surprise  of  the  undersigned  counsel, some time  following the settlement conference in this case on Feb. 2, 2011, when the undersigned needed to contact his client, XonDemand,  effectively vanished, becoming totally incommunicado," DeWitt told the court. "Finally, on June 3, 2011, the individual who has been the contact person for XonDemand since the inception of his representation called undersigned. 

"He explained that XonDemand had no ability or intent to satisfy any significant part of the outstanding balance of its monies owed to the undersigned, nor any intent whatsoever to pay for future representation.  Moreover, the client instructed  the  undersigned  to  do  nothing  further  in  the  case,  as  a  result  of  which  the undersigned has no authority  to  further  act  on  behalf  of  the  client. Accordingly,  the undersigned has no choice but to withdraw."

DeWitt, who told XBIZ on Friday that he's "not in a position to comment" on the case or his motion to withdraw as counsel for the company, also told the court that he later was able to wrangle a settlement agreement with Private but that XonDemand rejected the deal unless additional terms were added.

"As I expected, [Private] would not accept," he said.

Private spokesman Jason Tucker told XBIZ that the settlement deal on the table included the transfer of XonDemand.com to Private.

"It was as simple as that," Tucker said. "We said, look, we've got the Gamelink site, and we'd be willing to drop the copyright infringement charge and take over [XonDemand]. The settlement agreement was all there, but we never got the signature. We haven't heard from XonDemand since."

In the suit, Barcelona-based Private  said it discovered  that XonDemand was "committing over 30 separate instances of copyright infringement and over 1,000 separate and distinct instances of trademark infringement" by continuing to rent Private videos by the minute or flat rate after a deal between the two companies was terminated.

XonDemand contended it never received a termination letter, all the while paying commissions to Private, and that it removed content "immediately after someone at XonDemand learned of this lawsuit."