How Publicis' Digital Defense Was Undone By The Most Analog Of All Media: A Paper Clip

They say justice is blind--but sometimes, justice has a keen eye for some seemingly trivial, but apparently decisive, detail. That's what some high-level Publicis executives and their legal counsel discovered when they appeared before New York County Supreme Court Justice Charles E. Ramos on Dec. 20, 2007. Publicis was there to make a case for a temporary restraining order that would have stopped Donovan Data Systems from pulling the plug on processing media buys for Publicis' Starcom MediaVest unit on Dec. 31, 2007, when a three-year contract with Donovan expired. What they got was a lesson in how to properly collate courtroom documents.

"Plaintiff, I am a little disappointed to say the papers--the paper clip is nice," Ramos said, after rifling through SMG's documents. "I would like tabs, exhibits and backs. This is a hell of a way to put papers in the Supreme Court of the State of New York. This is not a dispute that started yesterday. I am embarrassed by the papers."



After hearing the judge's introductory remarks, a key member of the Publicis team turned to his attorney, John Verhey, and said, "What's all this about paper clips?" Then he thought to himself: "That's it, we're screwed."

And that's pretty much the way the hearing resolved, as Ramos shot down all of SMG's arguments for granting a restraining order that would have required Donovan to continue processing its media buys, even as it transitioned to a parallel, competing media processing system being launched by Donovan rival MediaBank.

Verhey apologized about the paper clips, but it didn't seem to affect the judge's demeanor or disposition. He went on to deny the motion without hearing any testimony. He also admonished the Publicis team for waiting so long to petition the court on other grounds, including its claim that Donovan had misappropriated a highly sensitive document containing numerous SMG trade secrets and financial data, even though those disclosures were made in May 2007. That led to a breakup between the two firms and an ongoing arbitration process under the American Arbitration Association.

The Court: "Why did you wait until the end of December to ask me for relief?"

Verhey: "We're not asking the court for relief. We're asking the arbiters."

The Court: "You are coming here to extend--to use the default provision to extend the contract for 18 months? Where were you in June, July, August, September, October, November? That ground is denied."

In a final appeal, Verhey argued that unless the order was granted to extend the length of Donovan's services, SMG would not be able to finish processing, reconcile and pay media vendors for "$2 billion" worth of media buys that had been initiated in Donovan's system. "They're not going to get paid if the contract is not extended," Verhey told the judge.

Asked by the judge whether Donovan had complied with the terms of its contract and downloaded all the data necessary to reconcile and pay for those media buys, Donovan's attorney James K. Leader said it had. Judge Ramos denied the final ground from the Publicis team, making Dec. 31, 2007 a drop-dead date for $2 billion worth of media processing.

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