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Court of Appeal:
No Error in Barring Company Chief From Portions of Trial
Justice Chaney Says Order Did Not Offend Due Process, Under the Circumstances
By a MetNews Staff Writer
The Court of Appeal for this district held on Friday that due process was not abridged by an order of Los Angeles Superior Court Judge Teresa A. Beaudet barring the president of the plaintiff corporation from portions of a trial in an action against Yelp.
James Demetriades, the principal of plaintiff Multiversal Enterprises-Mammoth Properties, was excluded from the courtroom while discussions took place of Yelp’s source code for filters designed to block illegitimate reviews of businesses—such as those posted by competitors or by employees of the businesses being reviewed. Multiversal, which owns restaurants in Mammoth Lakes, contended that favorable reviews were wrongfully excluded, and sought, under consumer protection laws, to bar Yelp from proclaiming the accuracy of its filters—or “recommendation software.”
Beaudet ordered the ejectment of Demetriades while the source codes were discussed because there was concern over what he would do with the information.
Demetriades was a software developer. He boasted that he had founded “the largest integration software company in the world with a couple hundred million, about the size of Yelp, couple hundred million in revenue” and, through various companies, has “access to hundreds of developers.”
(He founded SeeBeyond which he sold in 2005 for $386 million. It is now part of Oracle.)
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JAMES DEMETRIADES entrepreneur |
Chaney’s Opinion
Court of Appeal Justice Victoria Chaney of Div. One said in Friday’s opinion that Beaudet issued the order “to protect against the risk of misappropriation of Yelp’s trade secret presented by Demetriades’s desire and ability to circumvent Yelp’s recommendation software.”
She wrote:
“Due process does not confer upon a civil party an absolute right to be physically present at trial….On the contrary, a trial court has discretion to exclude a party from trial….
“In a civil matter, a party’s right to be present at trial can be protected when the party is represented by counsel.”
No Prejudice
Addressing the fact situation at hand, Chaney said:
“Here, Multiversal was represented by counsel and afforded the right to have its expert present during the portion of trial from which Demetriades was excluded, accommodations the Supreme Court has deemed sufficient in civil proceedings….Through Multiversal’s attorney and expert, Multiversal had the opportunity to call witnesses, to cross-examine adverse witnesses, and to make real-time assistance available to counsel. Nothing in the record suggests that any matter of importance was overlooked due to his absence.
“Further, the record reflects that Demetriades has a background as a software developer and corporate executive, with access to software companies and ‘hundreds of developers.’ It further reflects that he actively made successful efforts to undermine Yelp’s review screening process by inducing employees to submit false reviews. The trial court could reasonably conclude that Demetriades would benefit from access to Yelp’s trade secret information.”
The jurist said Multiversal, in appealing from the adverse judgment, failed to show how it was prejudiced by Demetriades being excluded. While it asserted that he would have lent “valuable assistance” in “navigating the technical testimony,” the appellant did not show that its lawyer and its expert were crippled without him.
Supreme Court Decision
Multiversal cited the California Supreme Court’s 1999 decision in NBC Subsidiary (KNBC-TV), Inc. v. Superior Court which proclaims that, with narrow exceptions, court proceedings must be open to the press and public. Chaney responded:
“NBC is inapposite. There, the court in a civil trial excluded the public and press from all courtroom proceedings held outside the presence of the jury….Here, no substantive courtroom proceedings were closed—Demetriades was merely excluded from them.”
The case is Multiversal Enterprises-Mammoth Properties v. Yelp, 2022 S.O.S. 383.
Arguing unsuccessfully for Multiversal were Robert M. Waxman and David N. Tarlow of Ervin Cohen & Jessup. Thomas R. Burke, Nicolas A. Jampol, Diana Palacios; and Aaron Schur of Davis Wright Tremaine represented Yelp.
Earlier Opinion
Friday’s opinion was the second one in the case. On July 24, 2014, Div. One, in an opinion by then-Justice Jeffrey Johnson (since removed from the bench), reversed an order by Los Angeles Superior Court Judge Yvette M. Palazuelos granting Yelp’s anti-SLAPP motion.
Johnson said in Demetriades v. Yelp, Inc. that “the commercial speech exemption of [Code of Civil Procedure] section 425.17, subdivision (c) applies to Yelp’s statements concerning the accuracy and efficacy of its review filter, and therefore find the trial court erred in granting Yelp’s special motion to strike under section 425.16.”
Yelp contended that Demetriades had no standing in the case, and Johnson agreed, indicating that on remand, Multiversal could be substituted as the plaintiff.
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