At a trial next month to determine how much LimeWire owes record companies for infringing copyrighted songs on its file-sharing platform, the plaintiffs will get a chance to investigate LimeWire founder Mark Gorton's net worth and whether he attempted to hide assets six years ago to avoid paying damages in a copyright lawsuit.
The record industry is prepping for a May battle that will attempt to punish LimeWire to the tune of tens of billions of dollars.
Late last week, U.S. District Court Judge Kimba Wood ruled that despite the fact that introduction of a defendant's net worth is typically too prejudicial for a jury, she will allow RIAA lawyers to talk about Gorton's financial condition next month.
In June 2005, Gorton made several transactions, including moving his company's interest in LimeWire into a family limited partnership and other personal assets into five other family limited partnerships. The plaintiffs argue this was a fraudulent attempt on Gorton's part to protect his own assets from potential debtors. LimeWire countered that the moves might be relevant, but evidence should be excluded unless and until the jury determined that punitive damages are warranted.
Judge Wood is allowing the evidence to be presented much earlier, finding it to be relevant to the plaintiffs' efforts to prove its case.
Separately, Gorton was handed another loss by the judge.
Gorton wished to introduce testimony that during LimeWire's heyday, he had a "feeling" that "LimeWire was not at great legal risk" and that he had "a hard time" seeing LimeWire as "an illegal thing or something for which I'm liable."
LimeWire hoped to make this "gut feeling" a defense against accusations it was operating in bad faith, but since LimeWire has persistently blocked attempts to gain information about Gorton's state of mind at the time, citing privilege to shield communications with legal advisors, Judge Wood says that it would be unfair to allow LimeWire to have an advantage in arguments over good vs. bad faith. She's not allowing such testimony.