Free Complaint - District Court of Delaware - Delaware

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UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA JOSEPH N. GIELATA, Plaintiff, v. SEAN P. LUGG, individually and in his official capacity as Deputy Attorney General for the State of Delaware, THE STATE OF DELAWARE, ANDREA L. ROCANELLI, individually and in her official capacity as Chief Counsel of the Office of Disciplinary Counsel for the Supreme Court of Delaware, and THE OFFICE OF DISCIPLINARY COUNSEL FOR THE SUPREME COURT OF DELAWARE, Defendants. VERIFIED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF; DAMAGES FOR CIVIL RIGHTS VIOLATIONS; MALICIOUS PROSECUTION; INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS

Civil Action No. _________________

JURY TRIAL DEMANDED

Plaintiff Joseph N. Gielata ("Plaintiff") as and for his Complaint in the above-captioned action, alleges as follows: I. Preliminary Statement 1. This action involves out-of-control officials of the State of Delaware (the "State"),

beholden to private corporations, with an ax to grind, whose actions threaten to deprive Plaintiff of his federal constitutional rights and irreparably harm him, his clients, and his reputation. 2. Plaintiff is a Delaware attorney whose law practice is devoted to the

representation of individuals defrauded by unscrupulous corporations. Plaintiff is involved in litigation against some of the State's largest employers, making Plaintiff an unwelcome presence in the State. After drawing the ire of one of the State's public servants, Plaintiff became the target of a vendetta and was singled out for prosecution.

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3.

The sequence of relevant events angering State officials began when Plaintiff

accepted a pro bono engagement in connection with a contract dispute between PayPal, Inc., a corporation incorporated in Delaware ("PayPal"), and an individual residing in Pennsylvania (the "Counterparty"). Plaintiff filed suit against PayPal on the Counterparty's behalf in the Delaware Justice of the Peace Court. 4. PayPal retained counsel who, after contentious interactions with Plaintiff,

appealed to Defendant Andrea L. Rocanelli ("Rocanelli"), who was formerly associated with PayPal's counsel but presently serves as Chief Counsel of the Office of Disciplinary Counsel for the Supreme Court of Delaware (the "ODC"). Rocanelli occupies a State position of

unparalleled power over Delaware lawyers. Despite her conflict of interest, Rocanelli thereafter initiated a harassing inquiry into Plaintiff's actions, with immediate and catastrophic repercussions for Plaintiff's career and family. Not content to merely harass Plaintiff, Rocanelli also lobbied the Delaware Department of Justice to initiate a criminal investigation into the contractual controversy between PayPal and the Counterparty, to see if Plaintiff could somehow be indicted. An indictment of Plaintiff would allow Rocanelli to cripple Plaintiff's law practice without proving any misconduct by automatically suspending Plaintiff's law license. 5. Subsequently, Delaware's Office of the Attorney General (the "AG Office"),

initially through Deputy Attorney General Stuart Sklut and then through defendant Deputy Attorney General Sean Lugg, launched a broad investigation to assemble, by any means necessary, a criminal prosecution of Plaintiff, despite the absence of any crime or victim. 6. Rocanelli subsequently launched a second, unrelated probe of Plaintiff, once

again at the behest of another former colleague. This second probe, as baseless and improper as

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the first, was commenced just two weeks after Plaintiff commenced a lawsuit involving a corporation where Rocanelli's husband was an executive. 7. Finally, Rocanelli got her wish. The AG Office recently indicted Plaintiff by

shoehorning a contract dispute into a felony theft statute. Through the ODC, Rocanelli has already petitioned the State to immediately suspend Plaintiff's law license, even though the indictment does not even state a cognizable crime. Thus, PayPal will have succeeded in snuffing out its legal opponent by wrongfully exploiting the State's vast powers. That Plaintiff has not committed any crime will not matter, as the indictment alone will neutralize his ability to represent aggrieved individuals and irreparably tarnish, if not end, his legal career. 8. The indictment and Rocanelli's vindictive petition came just as Plaintiff was

visiting family over 5,000 miles away in a small town in South America. Rocanelli, who knew that Plaintiff would be outside the country, and the Defendants seized this opportunity to pounce and quickly cripple Plaintiff without any opposition. Immediately upon learning of these

developments, Plaintiff rushed back to the United States. Upon debarking from a plane in Miami on Saturday, July 30, 2005, Plaintiff was detained by agents with the federal Department of Homeland Security, as a result of the indictment. Plaintiff was detained, searched and

questioned thoroughly, and only after the local police department declined extradition was Plaintiff released. 9. Plaintiff seeks temporary, preliminary, and permanent injunctive relief with Unless the

respect to the above-mentioned State course of conduct (the "Prosecution").

Prosecution is immediately enjoined, Plaintiff will suffer irreparable injury because his law license will be automatically and indefinitely suspended, his clients will be stripped of their

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chosen counsel, all of Plaintiff's cases (all accepted pro bono or on contingency) will be effectively terminated, and his reputation will be forever tainted. 10. For the State to incapacitate Plaintiff's ability to practice law upon indictment

alone, without any conviction, without an adequate hearing, without determining whether the indictment even states a crime, violates Plaintiff's right to due process and, accordingly, the State's automatic suspension rule should be invalidated as unconstitutional. 11. Plaintiff also seeks (i) declaratory relief affirming the terms of the PayPal

contracts at issue in the Prosecution and (ii) damages for malicious prosecution and intentional infliction of emotional distress in connection with the Prosecution. II. Jurisdiction And Venue 12. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C.

§§ 1331, 1343, and 2202, 42 U.S.C. § 1983 and the All Writs Act, 28 U.S.C. § 1651. 13. This Court has supplemental jurisdiction pursuant to 28 U.S.C. § 1367 to

adjudicate Plaintiff's state law claims because they arise out of the same set of facts and circumstances that give rise to Plaintiff's federal claims asserted herein. 14. The venue of this action is proper in the Eastern District of Pennsylvania pursuant

to 28 U.S.C. § 1391, as a substantial part of the events giving rise to the claims occurred in the State of Pennsylvania, Plaintiff resides in this District and each of the Defendants is within 100 miles of this District.

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III.

Parties 15. Plaintiff was an individual residing in the County of New Castle, State of

Delaware through February 2005, and thereafter in the County of Delaware, State of Pennsylvania. Plaintiff, who presently practices law out of his own office in Delaware, has extensive experience in the prosecution of securities class actions and derivative litigation in state and federal courts across the country. He was previously associated with the two plaintiffs' law firms. 16. Upon information and belief, Defendant Andrea L. Rocanelli ("Rocanelli") is and,

at all times relevant hereto, was an individual residing in the State of Delaware. 17. Upon information and belief, Defendant Sean P. Lugg ("Lugg") is and, at all

times relevant hereto, was an individual residing in the State of Delaware. 18. Defendant State of Delaware is a state of the United States of America. The

Delaware Department of Justice, embodied by Attorney General M. Jane Brady and her deputies, was created by statute to provide legal and prosecutorial services to the State. Both the AG Office and the Supreme Court of Delaware are arms of the State. 19. Defendant Office of Disciplinary Counsel ("ODC") is an arm of the Supreme

Court of Delaware and is responsible for, among other things, regulating the practice of law within the State of Delaware. In this capacity, the ODC, under defendant Rocanelli, is charged with evaluating, investigating, and prosecuting alleged lawyer misconduct.

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IV.

Statement of Facts A. 20. PayPal's Money Back Guarantee Scam On September 18, 2002, PayPal launched a Money Back Guarantee ("MBG")

program for buyers using PayPal to purchase goods online. According to PayPal's website: When you make a payment on the PayPal website, you can now buy a Money Back Guarantee to protect your purchase of physical goods on selected transactions. If you purchase the Money Back Guarantee, you will have the option to return your merchandise to PayPal in exchange for a reimbursement (not including the Guarantee fee), provided that you file a complete reimbursement request within 45 days of payment. This program will only be offered for tangible goods transactions of less than with pre-qualified sellers. PayPal may take additional criteria into account in deciding whether to offer the Money Back Guarantee on a particular transaction. You will know if a transaction qualifies when you get to the Confirm Payment Details page. If we are offering the Money Back Guarantee, you will see a check box quoting the price of the Guarantee for that transaction. Just click on the box before you send payment. For more complete information about the Money Back Guarantee and its specific exclusions and fees, please go to the Money Back Guarantee Policy of the User Agreement. [Emphasis added.] 21. According to PayPal's MBG Policy: PayPal's Money Back Guarantee program, which applies to selected physical goods transactions for less than $1,000, ensures that if you buy the Guarantee, you will be satisfied with your purchase or have an option to resell the merchandise to PayPal for the price you paid for it for the first 30 calendar days following the date of payment or seven days after receipt, whichever is earlier. [Emphasis added.] 22. Thus, the MBG is nothing more than a put option contract. Such a contract gives

the holder the right to sell some underlying item (a "Covered Object") at a specified price within a specific time period. For instance, according to the online "Investors Glossary," in the -6-

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securities market a "put is an option contract that gives the holder the right to sell a certain quantity of shares of a specified security at a specified price within a specific time period." See http://glossary.reference-guides.com/Investors/Put_Option_Contract/ (viewed on 7/31/05). 23. A true copy of the MBG Policy, as amended, is annexed hereto as Exhibit "1" and

incorporated by this reference. The MBG Policy provides that a Covered Object is any good except for the following: "[a] Items that have been damaged by the buyer, [b] Apparel items that have been worn or washed, [c] Media products such as DVDs, CDs, video and audio cassette tapes, video games and other software, etc., [d] Stored value cards (e.g. phone cards, gift cards, etc.) of any kind, [e] Hazardous materials including but not limited to chemicals, explosives, flammables, poisons, and gases, [f] Firearms, explosives, or ammunition of any sort including but not limited to guns, rifles, and bombs, [g] Illegal/contraband goods, [h] Animals, plants, or any parts thereof, [i] Motorized vehicles of any kind, including but not limited to automobiles, motorcycles, boats, and airplanes, [j] Recalled products, [k] Consumables and perishables, [l] Land, buildings, structures, or real estate properties, lots or improvements, [m] Items weighing more than 70 pounds, [n] Items that, when packed, exceed 130 inches in combined length and girth (the combined length and girth is length plus twice the height plus twice the width), and [o] Virtual or intangible items." See MBG Policy § 1.iii.3. 24. PayPal does not consider the MBG to be insurance. After all, PayPal has not

registered with any state insurance agency to sell insurance. Also, nowhere does PayPal refer to the MBG as insurance. 25. On July 2, 2003, The Register, a United Kingdom publication, published an

article entitled "Anyone ever managed to claim on PayPal's Money Back Guarantee?":

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The perfect insurance company would have thousands of customers paying for its services but never claiming. But then that's a fantasy scenario. Or it was anyway before PayPal managed to fit for a second time into a legal grey area with its Money Back Guarantee service. In March this year, the US Federal Deposit Insurance Corporation decided PayPal was not a bank or savings association since it does not accept deposits as defined by federal law. The decision angered thousands of customers who had seen their money fall into PayPal's coffers without an adequate explanation or appeal process. Now it seems that the same question will be posed over whether PayPal is an insurance company and so forced to comply with all the laws that are placed upon them. At least one US State is concerned over PayPal's Money Back Guarantee that it introduced in September 2002. There is good reason to be. Because, while PayPal is charging people on average six per cent of the cost of the transaction for its "guarantee", we find it extremely hard to imagine a scenario in which it would ever be required to pay out. There are plenty of opportunities for a claim to be filed but thanks to an over-complex process and restrictive time element in the "guarantee", it would seem that PayPal has simply built its own press to print its own online money. If you live in the US and choose to buy a good online using PayPal, you may well be offered the choice of its Money Back Guarantee. This states that for around six per cent the cost of the transaction, you will get your money back through PayPal if you are unhappy with the goods you get or if they don't arrive. For people nervous of buying online this may seem like a logical step to take. However, a closer inspection of the terms and conditions attached show that the chances of you ever managing to claim back on this service are tiny. First the restrictions: The good must be under $1,000. Fair enough. It must be a physical good that you have bought and not hired/leased etc. Okay. It can't have been damaged or worn by you. It can't weigh more than 70lbs. It cannot be more than 130 inches in overall size, which in reality means a rectangle about twice your desk length, so pretty big.

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No DVDs, CDs, videos, games, software, value cards, hazardous materials, ammunition, animals, plants, any form of motorised transport or consumables. Okay, you must make your claim within 30 days of paying for the good or within seven days of receiving it - whichever is earlier. So, if you ordered something and were given a 21-day delivery time, you have nine days from the day they are late to when you have to claim. More likely though you will be given a 28-day delivery time, meaning you have just two days to apply once it has passed their agreed delivery date. If they deliver to you on the 27th day and you aren't happy, you still only have three days to make a claim to PayPal. Before you make any claim to PayPal though you have to have tried to sort it out the situation with the seller personally or the PayPal "guarantee" is not valid. So - best case scenario - if you are lucky enough to be on a 14-day delivery and you call on the 15th day to complain and they promise it will be within you within three days and it doesn't turn up, you still have 11 days to claim on your PayPal guarantee. Most likely though, you'll be on 21-day and you'll have just three days. Or 28 days, in which case you can forget it. Equally, if you get your goods and you're not happy with them, if they promise to send a replacement, they'd need to send it within six days and you to immediately go to PayPal if you're not happy. If you have the good fortune to fit in with any of these scenarios, all you need to do is send the item to PayPal and it will give you a full refund. Of the money you paid the seller anyway. You will not get back the guarantee money back and you will have to pay the cost of sending the good to PayPal. Presuming of course you have supplied all the paperwork. You will need to have filled in an online form. And then to send a properly completed reimbursement form with the transaction ID and a written explanation of why you are using the guarantee. Plus of course a printout of the website page where you bought it from. And the auction listing and email and invoice to prove how much you had paid. You need to supply tax and shipping terms with this as well. You better hope you haven't thrown away any of the packaging because that also needs to be sent to PayPal. Plus copies of all correspondence you have had with the company. If you do all this within the allocated time span, PayPal will consider your request.

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It does reserve the right to decide how much of the fee it will refund though. If it does decide to pay only part of the reimbursement, you have no appeal, its decision is final. So you buy a jumper for $50 and pay PayPal $3 for its guarantee scheme. It arrives bang-on 21 days later. It's not the size you ordered. You call up the company and tell them. They ask you to send it back and they will send you a new one. You aren't happy with it - oh no, hang on, the guarantee's not valid because it's a different item. Go back. They say they're sorry, they will send you another. You wait for five days. Nothing. You call again. They promise it'll be there on Monday. You've already passed the guarantee's date. But wait - you didn't believe them and you decided immediately to send your jumper to PayPal and get the money back. So you go to the PayPal website and send an online complaint. Then you print off the reimbursement claim form and fill it in. You pack the jumper up, with the original packing. You go to the company's website and go to the right page and print if off. You print off the email they sent you confirming the order. You stick all this in a bag and pay $5 to send it to PayPal. PayPal gets it just in time and emails you back two weeks later to tell you they aren't paying anything because there's no evidence that you contacted the company in question. They keep the jumper. Okay, so you remembered to write on a piece of paper all the details in your phone conversation - when you made it, who it was to, what was discussed. PayPal tells you that you didn't try hard enough to sort out the problems. It keeps the jumper, no money. Okay, PayPal believes you that they weren't trustworthy and you get the full $50 back. And it only cost you $8 and six hours of chasing to get it. Of course this scenario is pretty unlikely anyway because PayPal only allows its guarantee to be put on top of goods from certain sellers - namely, those sellers that has been trading through PayPal for at least five months and have a very high record of delivering the right goods on time. Those companies themselves have to opt out of the guarantee system as it is automatically added to those services that PayPal deems safe enough to offer a guarantee service on. Now, no insurance company in the world would offer such terms as one court challenge would see them thrown out for being unreasonably restrictive. But is PayPal an insurance company? Does it again exist in legal no man's land?

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Under US law it would have to be shown to be collecting a pool of money with which to pay for the losses of a few. It would also have to go through a third party that makes the guarantee. Neither of these appear to apply to PayPal yet it is clearly offering what people would consider to be an insurance service. The problem is that PayPal really is its own separate entity. It merely appears to be a bank and an insurer but because it takes and pays out money and offers guarantees on goods purchased. In law, however, thanks to the gap opened up by the Internet, it is currently not either. This means that there will continue to be hundreds of angry customers who feel cheated but who have no legal recourse. Only yesterday a reader complained to us that he had sold two items on eBay through PayPal for £75. He tried to transfer this into his UK bank account. PayPal sent an email a week later saying the transfer had been rejected. The PayPal account now said £61. His bank denied any such rejection of transfer. So PayPal appears to be at fault and charged £14 for the pleasure. If past experience is anything to go by, he won't get it back. This is just one very small story of hundreds dotted all over the Internet. And these stories will continue until either a) the law changes to pull in PayPal and force it to follow the laws and regulations everyone else is subjected to or b) people learn the fine distinction between PayPal and the institutions they instinctively trust. [Emphasis added.] B. The Subject Transactions: PayPal Flagrantly Dishonors Its Contracts On or around November 16, 2003, Plaintiff purchased three Covered Objects Plaintiff used PayPal's electronic payment service to transmit the

26.

from the Counterparty.

agreed-upon purchase price, for which PayPal received a fee. Plaintiff transmitted the purchase price separately for each Covered Object. Each time, PayPal offered the MBG to Plaintiff for a fee. Neither the terms of the MBG Policy nor the fees requested by PayPal were negotiable. Plaintiff agreed each time to pay PayPal the requested fee for the MBG and agreed to be bound by the terms of the MBG Policy. Each time, PayPal notified Plaintiff that he had "purchased

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PayPal's Money Back Guarantee coverage... For specific terms and exclusions, view the PayPal User Agreement." Thus, three separate MBG contracts were created. 27. Plaintiff received the three Covered Objects and, within the time period provided

in the MBG Policy, Plaintiff exercised the resale option pursuant to the MBG contracts. 28. With respect to each resale option exercised, PayPal notified Plaintiff as follows: Dear Joe Gielata, Thank you for contacting PayPal. Our investigation of the following reimbursement request is now complete. [...] Because your request was valid, we have reimbursed you for the full amount of your coverage under PayPal's Money Back Guarantee program. [...] This case is now closed and no further action is required of you at this time. For more information about the Extended Money Back Guarantee, please see the PayPal User Agreement at: http://www.paypal.com/us/cgi-bin/webscr?cmd=p/gen/ua/uaoutside Sincerely, Erica PayPal Guarantee Department 29. 30. Thus, PayPal willingly paid Plaintiff the amount contractually due. Subsequently, on December 18, 2003, the Counterparty purchased a Covered

Object from Plaintiff. PayPal offered the Counterparty an MBG put option contract on the

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purchase, which the Counterparty accepted, paying PayPal its requested fee (the "December Contract"). Pursuant to the December Contract, the Counterparty timely exercised the resale option and complied with all terms of the contract. However, PayPal, without explanation, reneged on its obligation to pay the Counterparty the amount specifically agreed upon in the December Contract. 31. PayPal similarly reneged on two other MBG put option contracts entered into

between PayPal and the Counterparty, in connection with purchases from Plaintiff. C. Battling PayPal: The Initial Litigation 32. On or around March 19, 2004, the Counterparty, through the Plaintiff, filed a

small claims complaint against PayPal in the State's Justice of the Peace Court, seeking to enforce PayPal's obligation under the December Contract and other relief (the "PayPal Lawsuit"). 33. By letter to Plaintiff dated May 17, 2004, Michelle Squires, a Senior Litigation

Paralegal with PayPal, advised that PayPal intended to file a motion to compel arbitration in connection with the PayPal Lawsuit. The letter failed to mention that the mandatory arbitration provision in PayPal's user agreement had already been struck down by a federal court in California. 34. PayPal never moved to compel arbitration. Instead, PayPal retained a prominent

Delaware corporate law firm (the "Delaware Firm") to represent it in the PayPal Lawsuit. 35. After some contentious interactions with the Delaware Firm, Plaintiff voluntarily

dismissed the PayPal Lawsuit on June 16, 2004, with the intention of re-filing as a class action

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on behalf of all persons who had been duped into purchasing MBG option put contracts which PayPal reneged upon. Plaintiff advised the Delaware Firm of this possibility on June 21, 2004. D. Class Action Sellout: PayPal Attempts to Evade Massive Liability 36. On or around July 29, 2004, both the Counterparty and Plaintiff received the

following "Notice of Pendency of Class Action and Proposed Settlement", dated July 12, 2004: IF YOU OPENED A PAYPAL ACCOUNT BETWEEN OCTOBER 1999 AND JANUARY 2004, YOU MAY BE ENTITLED TO A PAYMENT FROM A CLASS ACTION SETTLEMENT. PLEASE READ THIS NOTICE CAREFULLY. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION In re PayPal litigation Case No. CV-02-01227-JF (PVT) NOTICE OF PENDENCY OF CLASS ACTION AND PROPOSED SETTLEMENT [...] 8. WHAT AM I GIVING UP IF I PARTICIPATE IN THE SETTLEMENT? If you do not exclude yourself from the class and the settlement is granted final approval, the judgment entered upon approval of the settlement will dismiss the lawsuit with prejudice, and will release any and all claims, demands, rights, liabilities, and causes of action of every nature and description whatsoever, known or unknown, matured or unmatured, at law or in equity, existing under federal or state law, that were or could have been asserted in the Litigation against the Released Persons, including without limitation, claims under the Electronic Fund Transfer Act, California Business and Professions Code §§ 17200 et seq.; the California Consumers Legal Remedies Act, -14-

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Cal. Civ. Code §§ 1750 et seq.; and for PayPal's alleged conversion, breach of the User Agreement or other contract, money had and received, unjust enrichment, and negligence under California law or any other state or federal law arising out of, among other things, PayPal's restriction or limitation of accounts; PayPal's dispute resolution policies, practices and procedures; PayPal's debit of accounts following the receipt of chargebacks, buyer complaints, reports of unauthorized access or in connection with its Seller Protection Policy, Buyer Complaint Process or Buyer Protection Policy; PayPal's alleged conversion of funds; and PayPal's compliance with the Electronic Fund Transfer Act, 15 U.S.C. §§ 1693 et seq., or any similar legislation arising under the laws of any state. You will be permanently barred from bringing any such claims that arose prior to February 1, 2004. With regard to accounts that were limited prior to February 1, 2004, however, you will not be releasing claims to recover any balance that remained in the account 180 days after the account was initially limited. In summary, if you do not exclude yourself, you will not be able to sue, continue to sue, or be part of another lawsuit against PayPal relating to the legal issues in this case. You will be bound by all proceedings, orders, and judgments entered in connection with the settlement, whether favorable or unfavorable, and will be represented by the Representative Plaintiffs and Class Counsel for purposes of the settlement. If you do not exclude yourself from the class, and the settlement is granted final approval, your claims against PayPal and its affiliates will be released as described above. If you are a class member, you may, if you wish, appear in this lawsuit through your own attorney at your own expense. You need not do so to participate in the settlement, however. [...] 12. CAN I COMMENT ON THE SETTLEMENT? If you decide to remain in the class, and you wish to comment in support of or in opposition to the settlement or Class Counsel's motion for attorneys' fees and expenses, you may do so by mailing or delivering your written (non-email) comments, such that they are RECEIVED on or before September 3, 2004, as follows: (1) the original must be sent to the Court at the following address: Clerk of the Court United States District Court for the Northern District of California

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280 South First Street San Jose, California 95113 and (2) copies must be sent to Co Lead Counsel and PayPal's counsel at the addresses listed in Section 9, above. Your written comments must contain your name and address; be signed by you; and include the reference In re PayPal Litigation, Case No. CV-02-1227-JF (PVT). If you wish to appear and present your comments orally at the hearing, your written comments must contain a notice that you intend to appear and be heard, a statement of the position you intend to present at the hearing, and any supporting arguments. If you do not comply with the foregoing procedures and deadlines for submitting written comments or appearing at the hearing, you will not be entitled to be heard at the hearing; contest or appeal from approval of the settlement or any award of attorneys' fees or expenses; or contest or appeal from any other orders or judgments of the Court entered in connection with the settlement. 13. HOW CAN I GET MORE INFORMATION ABOUT THE SETTLEMENT? You can get more information by writing Plaintiffs' Co-Lead Counsel electronically or by first class mail at: [email protected] Girard Gibbs & De Bartolomeo LLP 601 California Street, Suite 1400 San Francisco, California 94108 Wolf Popper LLP 845 Third Avenue New York, NY 10022 This notice is a summary and does not describe all details of the settlement. For full details of the matters discussed in this notice, you may wish to review the Settlement Agreement dated June 11, 2004 and on file with the Court or visit https://www.paypal.com/settlement/. Complete copies of the Settlement Agreement and all other pleadings and papers filed in the lawsuit are also available for inspection and copying during regular business hours, at the Office of the Clerk of the Court, United States District Court for the Northern District of California, 280 South First Street, San Jose, California 95113. [Emphasis added.]

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37.

Troubled by the terms of the proposed settlement, and the unusually broad release

proposed therein (potentially covering the claims in the PayPal Lawsuit), Plaintiff began questioning the class counsel and drafting a solicitation to recruit objectors to the proposed settlement. Plaintiff sent the following email, pursuant to the settlement notice: Date: Mon, 2 Aug 2004 19:34:44 -0700 (PDT)

From: "Joe Gielata" Subject: To: Claims Tally [email protected]

Thus far, how many claims have been submitted? How many are Statutory Damage claims? How many are Short Claim Forms? How many are Long Claim Forms? Thank you. 38. The next day, on August 3, 2004, Plaintiff sent the following email anonymously: To: [email protected] Subject: claim site questions To Whom It May Concern, 1) Why doesn't the claims site include an exclusion form? 2) Why doesn't the claims site offer any electronic submission of objection(s)? 3) Why doesn't the claims site set forth a breakdown of the claims submitted into the 3 categories of claims pursuant to the plan of allocation? 4) Why doesn't the claims site make available the operative complaint in this case? 5) Why doesn't the claims site make available the docket or any of the relevant pleadings? -PayPal Settlement class member

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39.

The never-completed draft of Plaintiff's solicitation to potential objectors to the

class settlement is reproduced below in full: Anyone reading the PayPal settlement can see that the settlement is plainly unacceptable because: 1) Attorneys win millions, but anyone PayPal damaged will get little or nothing. 2) The settlement would allow PayPal to block almost ANY legal claim by ANY PayPal user. 3) The TRUE settlement amount- less than $4 million after attorneys' fees and taxes!- is inadequate and amounts to: a) less than 0.008% of the company's current net worth- over $50 billion; b) less than 0.2% of the company's gross profit last year of $1.75 billion; c) less than 0.2% of the company's total cash of $2.14 billion. 4) The claims process is unfair and incompetently administered. If you agree with these objections (detailed below), PLEASE SEND AN EMAIL to [email protected] with your real name AND PayPal user name so that I can let the judge know that a significant number of class members agree with these objections. If you agree with these objections, YOU WILL STILL BE ENTITLED TO RECOVER MONIES FROM THE SETTLEMENT AND YOU WILL NOT WAIVE ANY RIGHTS. Here are the details of each of my objections: 1) ATTORNEYS GET MILLIONS, BUT ANYONE PAYPAL DAMAGED WILL GET LITTLE OR NOTHING The settlement provides that the plaintiffs' attorneys will receive $3.49 million in fees and expenses, in cash and with no contingencies. However, there is practically no way to determine what persons covered by the settlement will receive. Moreover, the administration of the settlement has thus far hindered any effort to clarify what any individual claimant might receive. This is unacceptable because someone who would submit a claim if she expects to receive, say, $50 might not submit a claim, or might submit a claim differently (i.e., as a different category of claimant), or might exclude herself from the settlement, if she expects to receive less than a dollar. We can make some extremely rough estimates about what claimants will actually receive. PayPal has nearly 50 million account members. Assuming that only 1% of these members make claims (a very conservative figure given the percentage of class members making claims in previous settlements reached by the plaintiffs' attorneys here), the total number of claims would be 500,000. Let's further assume that the breakdown of claims will be as follows: 5% Long Form Claimants, 35% Short Form Claimants, and 60% Statutory Damage Claimants. (We can't know the current breakdown because THE SETTLEMENT ADMINISTRATOR REPEATEDLY IGNORED OUR REQUESTS FOR THIS INFORMATION.) Based on this breakdown, Long Form Claimants would each receive about $86.00, Short Form Claimants would each receive about $12.29, and Statutory Damage Claimants would each receive about $3.33. (These amounts are NOT adjusted to reflect taxes- for more on this see the section below calculating the TRUE settlement amount.)

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These amounts are inadequate on their face. As the plaintiffs' operative complaint alleges, members of the putative class have been damaged in a variety of ways. Their accounts have been frozen without notice or any semblance of due process. Their small businesses have been interrupted or even destroyed. They have missed opportunities due to restricted or terminated accounts. They have sought in vain to figure out why PayPal was restricting or terminating their accounts. Because lead lawyers have not made an adequate effort to estimate the number of claimants, the class notice fails to estimate the potential size of the aggregate damages experienced by the class, or the potential aggregate recovery for individual plaintiffs. As shown below, the lead lawyers are keeping quiet to better their chances for an easy payday. Many, but not all, of the adversely-affected class members did not suffer enough damage to justify the cost of hiring attorneys, and in that respect the class mechanism makes sense under these circumstances. However, the lead lawyers for the class apparently made no effort to separate those with small claims from those with substantial claims. It does not appear that the lead lawyers made any attempt to ascertain sub-classes of plaintiffs and prosecute this case on behalf of each sub-class. As other mass tort lawyers have discovered in fen-phen and asbestos litigation, there are alternative solutions to proceed to trial with sub-classes of plaintiffs. The egregiousness of PayPal's behavior here would astonish any jury and likely yield punitive damages (where available) far in excess of compensatory damages. However, the lead lawyers apparently did not consider taking any sub-classes of plaintiffs to trial. By casting the widest net possible in its class definition, the lead lawyers have done a disservice to millions of PayPal account members who have viable and valuable claims that will be released with this inadequate settlement. PayPal will obtain through the proposed settlement a release against those with no claim at all, or less than $10 in potential recovery, as well as those who may have $10,000 claims. Due to the variety of misconduct on a massive scale, class members are entitled to legal remedies under federal statutes, state consumer protection statutes and the common law. Some of these legal remedies provide TREBLE DAMAGES or PUNITIVE DAMAGES. However, empowered by the proposed settlement, PayPal will silence the potential tsunami of claims by causing millions of potential class members to release all their potential claims with one relatively minor payment. Almost as important, the class notice completely fails to show what potential claimants might receive based on different assumptions- such as the number of total claimants and the breakdown of claimants. Informative tables, which could have been included in the class notice or on the settlement website, could have been as simple as the following: 5/35/60 Breakdown ­ all amounts are pre-tax
# claimants 100,000 300,000 500,000 1,000,000 1,500,000 3,000,000 5,000,000 10,000,000 5% Long Form $430.00 $143.33 $86.00 $43.00 $28.67 $14.33 $8.60 $4.30 35% Short Form $61.43 $20.48 $12.29 $6.14 $4.10 $2.05 $1.23 $0.61 60% Statutory Damages $16.67 $5.56 $3.33 $1.67 $1.11 $0.56 $0.33 $0.17

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10/40/50 Breakdown ­ all amounts are pre-tax
# claimants 100,000 300,000 500,000 1,000,000 1,500,000 3,000,000 5,000,000 10,000,000 10% Long Form $215.00 $71.67 $43.00 $21.50 $14.33 $7.17 $4.30 $2.15 40% Short Form $53.75 $17.92 $10.75 $5.38 $3.58 $1.79 $1.08 $0.54 50% Statutory Damages $20.00 $6.67 $4.00 $2.00 $1.33 $0.67 $0.40 $0.20

15/45/40 Breakdown ­ all amounts are pre-tax
# claimants 100,000 300,000 500,000 1,000,000 1,500,000 3,000,000 5,000,000 10,000,000 15% Long Form $143.33 $47.78 $28.67 $14.33 $9.56 $4.78 $2.87 $1.43 45% Short Form $47.78 $15.93 $9.56 $4.78 $3.19 $1.59 $0.96 $0.48 40% Statutory Damages $25.00 $8.33 $5.00 $2.50 $1.67 $0.83 $0.50 $0.25

However, plaintiffs' counsel knew or should have known that such information would dissuade many class members from accepting the settlement or making a claim. This materially misleading nondisclosure has artificially depressed the number of objectors as well as the number of class members choosing to exclude themselves. 2) THE SETTLEMENT WOULD ALLOW PAYPAL TO BLOCK ALMOST ANY LEGAL CLAIM BY ANY PAYPAL USER PayPal's parent company made a gross profit of $1.75 billion last year, or $4.79 million per day. In other words, at this rate it will take less than 2 days for PayPal's parent company to receive enough profit to pay for this entire settlement. In return, PayPal will receive a broad release covering about 40 million account members. Under the settlement agreement, class members who do not exclude themselves from the settlement release "any and all claims, demands, rights, liabilities, and causes of action of every nature and description whatsoever, known or unknown, matured or unmatured, at law or in equity, existing under federal or state law" against PayPal. This settlement releases everything but the kitchen sink in return for payments that are nominal from PayPal's perspective as well as from the perspective of individual class members. The public policy of allowing defendants to buy complete peace in the legal system must be disregarded here because this settlement gives to PayPal a priceless tool against countless plaintiffs. Just as PayPal's abuse of mandatory arbitration was observed and ruled against by the judge in this case, PayPal's attempt to purchase a limitless release at a bargain price, in collusion with the lead attorneys here, should be rejected. Plaintiffs and defendants should continue to litigate this important case until a more satisfactory outcome can be reached. At the very least, the issue of class certification should be decided by the judge. If class certification is rejected, then the case will effectively end, but at least the individual claims of class members will not be released. If the class is certified, then -20-

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plaintiffs will wield considerably greater leverage with which to proceed to trial or negotiate a superior settlement. If the lead lawyers concede that they do not believe they can win class certification, then the Court should appoint other lead lawyers better able to handle this task. However, the current settlement splits the baby at best. At worst, PayPal will pay a nominal amount to end the case and at the same time obtain a general release covering tens of millions of account members, a priceless weapon in countless pending and potential disputes. Notably, even if a future dispute is not covered by this release, PayPal will likely assert that the dispute has been released (just to be on the safe side). This case was initiated because of PayPal's callous treatment of its members, including unilaterally freezing accounts without any reasonable basis or due process, ignoring complaints, and other assorted misconduct. The release this settlement offers to PayPal will exacerbate these concerns, not alleviate them. More than ever, PayPal will be able to tell its users to go to hell. 3) THE TRUE SETTLEMENT AMOUNT- LESS THAN $4 MILLION AFTER ATTORNEYS' FEES AND TAXES!- IS INADEQUATE The average federal tax rate of US taxpayers is about 15%. State income tax rates are as high as 10% in California or New York, among others, but let's just add 5% to the federal rate to assume an average combined tax rate of 20%. Unfortunately, current tax law does not permit individuals to deduct attorneys' fees. Settlement payments are taxed BEFORE the attorneys' fees are paid. Thus, a settlement payment of $100 minus 20% in taxes is $80, and if attorneys' fees are $30, then the total received is $50 after attorneys' fees and taxes. In our case, the aggregate settlement payment is $9.25 million, of which $3.49 million are for attorneys' fees and expenses. The tax due is roughly 20% of the $9.25 million, or $1.85 million, and after subtracting attorneys' fees and expenses, the total amount to be received by all class members will be $3.91 million. Nowhere in the class notice is this impact of taxes described. Not once does the class notice or the settlement website mention that the total amount to be received by all class members will be reduced by 57.7% once taxes and attorneys' fees are figured in. Instead, the lead attorneys seek to take credit for achieving a $9.25 million settlement, even though the REAL benefit to be distributed to class members will be $3.91 million at most. Clearly, the absence of the significant impact of taxes constitutes at least a materially misleading nondisclosure in the class notice and reaffirms the inadequacy of the settlement. The class notice also fails to advise potential me mbers of the class of the size of the settlement as compared to various informative metrics. Defendants' ability to pay is a significant factor in any decision by plaintiffs to settle, and here the immense financial capacity of PayPal's parent weighs against the adequacy of the settlement. As described above, the true settlement amount- less than $4 million after attorneys' fees and taxes- amounts to: a) less than 0.008% of the company's current net worth- over $50 billion; b) less than 0.2% of the company's gross profit last year of $1.75 billion; c) less than 0.2% of the company's total cash of $2.14 billion. The class notice offers none of this information, which would allow class members to assess the adequacy of the settlement against defendants' ability to pay.

4) THE CLAIMS PROCESS IS UNFAIR AND INCOMPETENTLY ADMINISTERED

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CONCLUSION For all the foregoing reasons, the proposed settlement leaves much to be desired (see suggested improvements below) and leaves numerous unanswered questions (see some unanswered questions below). Unless the judge reviewing the fairness of this settlement can get complete and satisfactory answers to all these questions and correct the deficiencies of the settlement, perhaps through the suggested improvements offered below, then the settlement should be rejected and the lead attorneys' request for fees must be denied. UNANSWERED QUESTIONS If there are over 2.15 million valid Short-Form claims, then the award per claimant would be less than one dollar- but according to the settlement, no amount under a dollar will be awarded. Apparently, the entire Short-Form Fund would then shift over to the Long-Form Fund. But what if the aggregate amount awarded to all Long-Form claimants is less than $4.3 million (the combined amount allocated to Long-Form and Short-Form claims)? If there are over one million Statutory Damages claims, then the award per claimant would be less than one dollar- but according to the settlement, no amount under a dollar will be awarded. What would then happen to the $1 million of the settlement fund allocated to Statutory Damages Claimants? SUGGESTED SETTLEMENT IMPROVEMENTS Reject the settlement and instruct the parties to litigate class certification. Reject the settlement and appoint new lead counsel for sub-classes. Restrict the release to class members with claims less than $100. Add contingencies to attorneys' fee award. Do not allow the settlement to release PayPal from claims by Long-Form Claimants whose claims are rejected by the arbitrator. For Long Form Claimants, restrict the release to Long Form Claimants with claims less than thrice the average award to Long Form Claimants. Thus, if Long-Form Claimants receive on average $100, then all potential claims by Long-Form Claimants would be released EXCEPT for those with claims exceeding $300. Reject the settlement unless PayPal agrees to pay attorneys' fees separate from and on top of the $9.25 million settlement amount. Reject the settlement unless PayPal agrees to withdraw the $1.00 fee for handling and sending checks for claim awards and pay for said expense on its own. Postpone the settlement until the lead lawyers and settlement administrator communicate to potential class members the procedure and rules for Long-Form Claimants. Postpone the settlement until the lead lawyers and settlement administrator communicate to potential class members updated information on the breakdown of claims on an ongoing basis. Postpone the settlement until the lead lawyers and settlement administrator communicate to potential class members estimates of claim awards based on various inputs (number of total claimants and the breakdown of claimants). 40. Regrettably, the above solicitation would never see the light of day.

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E. The ODC Steps In to Assist PayPal 41. On or around August 16, 2004, Plaintiff received a letter from defendant

Rocanelli, dated August 12, 2004, on behalf of the ODC. Acting upon a complaint by the Delaware Firm, Rocanelli launched an extensive but bogus probe into Plaintiff's actions. Unbeknownst to Plaintiff, Rocanelli was formerly an attorney with the Delaware Firm. Rocanelli never disclosed this fact to Plaintiff, nor apparently did she consider whether this relationship might cloud her judgment with respect to civil litigation between parties represented by the Delaware Firm and Plaintiff. 42. The very next day, Plaintiff met personally with Rocanelli-- their first and only

personal encounter-- in order to explain the contractual underpinnings of the PayPal Lawsuit, as well as his concerns about PayPal's proposed class action settlement. Revealing her

unmistakable animus, Rocanelli rejected this explanation out of hand and severely castigated Plaintiff for disrespecting the Delaware Firm. She expressed her belief that Plaintiff was out of line and saw himself as a "cowboy" in fighting against corporate misconduct, a role she considered distasteful and inappropriate. The thrust of Rocanelli's objection was: "That's not the way we do things around here in Delaware." She refrained from expressing an explicit opinion as to the propriety of challenging PayPal's class action settlement, although her opposition to such a course of action was obvious to Plaintiff. As the meeting ended, Rocanelli coldly advised Plaintiff to retain counsel and inform his then-employer of her probe. 43. That day, Plaintiff advised his then-employer, a class action law firm, of

Rocanelli's inquiry. Fearing Rocanelli's well-known vindictiveness, the law firm immediately placed Plaintiff on a leave of absence. On or around this day, Rocanelli contacted the AG Office

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to recommend that it initiate a criminal inquiry into the circumstances surrounding the PayPal Lawsuit. Any sort of criminal charge would give Rocanelli incredible leverage to restrict

Plaintiff's ability to continue practicing law. 44. The very next day after Plaintiff's August 17 meeting with Rocanelli, Plaintiff

received the following email from the class counsel in PayPal's class action litigation: From: Finkel, Robert Sent: Wednesday, August 18, 2004 11:44 AM To: Gielata, Joseph; [email protected]; [email protected]; [email protected] Cc: PAYPAL Subject: RE: PP -- Joseph Gielata Joseph Gielata, Esq. Milberg Weiss Dear Mr. Gielata: The following are responses to your questions. 1) Why doesn't the claims site include an exclusion form? The notice requires exclusion forms and other documents to be hard copy mailed. I have received some email exclusions and I intend to recommend that the District Court accept them as valid exclusions. The notice clearly states the procedures to be followed for hard copy mailing an exclusion. Including exclusion forms to be printed and sent in by U.S. Mail on the official settlement website may have appeared to be "soliciting opt-outs" and, for that reason, it was not considered to be a realistic option. 2) Why doesn't the claims site offer any electronic submission of objection(s)? The notice requires that objections be filed with the District Court. Again, these procedures are clearly described in plan English and non-burdensome. Filing of documents with the District Court are governed by Court rules and customarily cannot be done by email.

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3) Why doesn't the claims site set forth a breakdown of the claims submitted into the 3 categories of claims pursuant to the plan of allocation? We will not know how many valid claims are filed until the end of the claims process. As you know, in class actions of this nature, settlement administrators do not customarily begin the costly and time consuming review of claim forms until the settlement receives court approval. It is reasonable to assume that because of the large number of notices that were emailed that a large number of claims will be filed in all three categories. The settlement documents inform class members that if they have claims they are able and willing to document, they can file a long form claim. If their claim is small and they are willing to accept up to $50 and do not want to or cannot document their claim, they should file a short form claim. Class members who do not have money damage claims are instructed to file statutory damage claims. 4) Why doesn't the claims site make available the operative complaint in this case? You are the first class member that has asked for the complaint. I have attached it as a pdf file. The allegations of the complaint are described in the settlement documents and (as you can see) are provided to those class members upon request. 5) Why doesn't the claims site make available the docket or any of the relevant pleadings? I have attached the docket as a pdf file. The Court file is voluminous. Any documents will be provided to class members on request. Robert Finkel Wolf Popper LLP 212.451.9620 45. Notably, class counsel wrote to Plaintiff at his employer's email address,

signifying that class counsel had somehow identified Plaintiff as the author of the anonymous email, set forth above, inquiring about the proposed settlement. Plainly, class counsel viewed Plaintiff as a threat to neutralize.

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46.

Coming just one day after Plaintiff was forced into a leave of absence due to

Rocanelli's inquiry, and after Rocanelli's excoriation of Plaintiff, Plaintiff saw the writing on the wall: Rocanelli would not look kindly upon Plaintiff objecting to PayPal's class action settlement. Plaintiff decided against risking further confrontation with Rocanelli by following through with his objection. Thus, PayPal averted a potentially significant obstacle and gained a sweeping release against liability. Rocanelli's intervention had saved the day for the client of her former employer. 47. 48. 49. Unbowed, Plaintiff moved on. In early 2005, Plaintiff hung out his own shingle as a solo practitioner. Shortly after setting up his law office, Plaintiff distributed the following

solicitation regarding potential claims against certain officers of eBay, Inc., PayPal's parent company: Advertising Material ATTORNEY INVESTIGATES WHETHER WHITMAN MUST RETURN OVER $100 MILLION TO EBAY WILMINGTON, DELAWARE - March 10, 2004 Shareholder attorney Joseph N. Gielata has commenced an investigation into whether eBay's accounting restatement in 2003 obligated eBay's CEO Meg Whitman to return to the company hundreds of millions of dollars in compensation and stock sales. In its 2002 annual report, released in 2003, eBay quietly restated its pro forma earnings, revising upwards its reported pro forma losses for 2001 and 2000 by 743% and 26%, respectively. The company has never disclosed the reasons for these prior period adjustments. In effect, the restatement revealed that eBay's financial statements for 2001 and 2000 were materially false and/or misleading when issued. While eBay issued defective financial statements, its market valuation soared and Whitman sold over $100 million in stock.

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However, Whitman may be obligated to return this windfall to eBay. Under the Sarbanes-Oxley Act of 2002, the CEO and CFO of a public company must return certain compensation and proceeds from stock sales to the company if it prepares an accounting restatement as a result of misconduct. Under the corporate law of Delaware (where eBay is incorporated), a shareholder may be able to enforce this forfeiture statute on the company's behalf. Also, eBay's directors may be liable if they failed to investigate or pursue such forfeiture. If you have owned eBay stock continuously since 2002 and would like to learn more about this claim, please contact Joe Gielata at [email protected] or (302) 798-1096. His office address is 501 Silverside Road, Suite 90, Wilmington, Delaware 19809. Mr. Gielata is licensed to practice law in Delaware. Advertising Material 50. Thus, PayPal's parent company would continue to view Plaintiff as a viable and

dangerous adversary, but one who could be eliminated with Rocanelli's assistance. F. Fighting Other Corporate Malfeasance: The JPMorgan Litigation 51. 52. JPMorgan Chase & Co. ("JPMorgan") is one of the State's largest employers. On March 17, 2005, Plaintiff commenced a class action against JPMorgan and

certain of its present and former directors (the "JPM Litigation"). The operative complaint in the JPM Litigation alleges that JPMorgan shareholders were duped into approving a $57 billion merger with Bank One Corporation in 2004. Unbeknownst to them, JPMorgan's CEO had rejected a $50 billion deal to save his CEO title for 2 years more. JPMorgan shareholders paid for the $7 billion difference without having been told of the better offer. Plaintiff's clients assert claims under Sections 10(b), 14(a) and 20(a) of the Securities and Exchange Act of 1934 [15 U.S.C. §§ 78j(b), 78n(a) and 78t(a)], Rules l0b-5 and 14a-9 promulgated thereunder by the SEC [17 C.F.R. §§ 240.l0b-5 and 240.14a-9], Sections 11, 12(a)(2) and 15 of the Securities Act of

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1933 [15 U.S.C. §§ 77k, 77l(a)(2) and 77o], and pendent common law claims for breach of fiduciary duty. 53. The JPM Litigation seeks no less than $10.5 billion in compensatory damages and

punitive damages of no less than nine times compensatory damages, for a total of $105 billion. Plaintiff accepted the engagement on contingency and, of any funds recovered, anticipates receiving a reasonable percentage ­ in any event, no less than 5 percent. 54. On March 18, 2005, a rival shareholder lawyer (the "Rival Lawyer") in a state

court class action related to the JPM Litigation sent a letter to Vice Chancellor Stephen P. Lamb, of the State's Court of Chancery, objecting to Plaintiff's actions in the JPM Litigation. A true copy of the letter is annexed hereto as Exhibit "2" and incorporated by this reference. In a cheap tactical gambit, the Rival Lawyer copied Rocanelli on the letter. 55. The Rival Lawyer had previously been an attorney with the Delaware Firm and

had been a colleague of Rocanelli. The Rival Lawyer and Rocanelli knew each other and had worked together. Further, the Rival Lawyer was aware of Rocanelli's probe into Plaintiff because Plaintiff had previously worked for the Rival Lawyer. Thus, the Rival Lawyer copied Rocanelli on his letter only because he knew that Rocanelli would seize upon it as an excuse to further harass Plaintiff and interfere with his law practice. 56. The Rival Lawyer's letter was presented not only to Vice Chancellor Lamb, but

also to the district court judge in the JPM Litigation and to the State's Supreme Court. Each and every time, the letter was completely ignored in written opinions by the State's Court of Chancery, the federal district court of Delaware, and the State's Supreme Court, indicating that no court took seriously the Rival Lawyer's insinuations.

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57.

On June 21, 2005, the district court appointed Plaintiff lead counsel in the JPM

Litigation. On August 1, 2005, briefing on defendants' motion to dismiss (a crucial phase in any securities fraud class action) in the JPM Litigation was completed. G. The Last Straw: The MBNA Litigation 58. Rocanelli's bad-faith harassment of Plaintiff escalated dramatically in June 2005.

On or around June 6, 2005, partnering with another law firm, Plaintiff filed a derivative lawsuit against certain directors and executives of MBNA Corporation (the "MBNA Litigation"). 59. 60. MBNA Corporation is one of the State's largest employers. Unbeknownst to Plaintiff, Rocanelli's husband was an executive of MBNA

Corporation. This allegation is made upon belief and the following information: (i) MBNA's March 19, 1999 annual report indicating that Thomas D. Veale was a company operating executive, (ii) the absence of any publicly available information indicating that Veale is no longer an MBNA executive, (iii) a December 29, 2003 newspaper article in The News Journal reporting Rocanelli's married status, and (iv) Delaware property records indicating that Veale and Rocanelli have purchased and sold homes together, indicating that Veale is Rocanelli's husband. 61. The filing of the lawsuit involving the MBNA Corporation was the last straw for

Rocanelli. Not only had Plaintiff challenged Rocanelli's former employer (the Delaware Firm) and her former colleagues (including the Rival Lawyer and others); now Plaintiff was challenging her husband's own employer. Her earlier animus towards Plaintiff transformed into a vendetta armed with the vast powers of the State. By any means necessary, including those

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available to her as a State official, Rocanelli would retaliate by destroying Plaintiff's ability to practice law. H. The ODC Steps In Again, This Time to Assist the Rival Lawyer 62. By letter dated June 16, 2005, Rocanelli informed Plaintiff that the ODC had

initiated a second probe into Plaintiff's conduct, this time in connection with the JPM Litigation. Curiously, Rocanelli's letter arrived the same day that defendants in the JPM Litigation filed their motion to dismiss the operative complaint in that action. Again, Rocanelli's uncanny timing interfered with ongoing civil litigation. 63. Citing the Rival Lawyer's letter, dated nearly four months before and which had

been circulated and ignored by multiple courts, Rocanelli demanded that Plaintiff "provide a written explanation for [his] professional conduct in direct response to the allegations set forth in [the Rival Lawyer's] letter dated March 18, 2005 addressed to the Honorable Stephen P. Lamb, a copy of which is enclosed. Please include specifically how you fulfilled your obligations

pursuant to Rules 1.1, 1.2, 1.6, 1.9, 3.1, 3.3, 4.1 and 8.4 of the Delaware Lawyers' Rules of Professional Conduct." Other than appending and adopting the Rival Lawyer's insinuations, Rocanelli did not articulate in any way that Plaintiff had committed any particular misconduct. 64. Thus, Rocanelli had once again interfered in civil litigation on behalf of a former

colleague. Further, this additional harassment in the form of yet another bogus probe came only two weeks after Plaintiff had filed a lawsuit against her husband's employer. But Rocanelli's most audacious retaliatory move was yet to come. 65. On July 15, 2005, Plaintiff responded to Rocanelli's June 16 letter:

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Dear Ms. Rocanelli: This will respond to your June 16, 2005 letter requesting a response to the March 18, 2005 letter from Seth D. Rigrodsky of Milberg Weiss Bershad & Schulman ("Milberg Weiss") to Vice Chancellor Stephen P. Lamb (the "Letter") in connection with the above-captioned litigation (the "Chancery Action"). Thank you for the additional time to respond. The Letter does not articulate any conflict of interest or any other violation of the Rules of Professional Conduct. Both the Court of Chancery and the District of Delaware have already disregarded the Letter in their written opinions. In opposition to my clients' request for leave to file an amici curiae brief in the Supreme Court appeal of the above-captioned litigation, Mr. Rigrodsky has, in a third bite at the apple, appended the Letter and, in a fourth bite at the apple, served the ODC with the opposition brief. Without predicting the Supreme Court's response, the Letter is wholly meritless, for the reasons set forth below. There Is No Conflict. The critical defect in the Letter is that the interests of the putative class in my clients' action (the "Federal Action") are identical to the interests of the putative class in Milberg Weiss's action. There simply is no conflict of interest. In order for a conflict of interest as to former clients to exist, Milberg Weiss must establish, among other things, that my representation of Samuel Hyland a