NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

(206) 274-2800

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COMPLAINT - 1

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

GEN ADS, LLC, a Washington limited

liability company; CARTMELL

HOLDINGS, LLC, a Washington

limited liability company; and

HILLSTROM EQUITIES, LLC, a

Minnesota limited liability company,

Plaintiffs,

v.

ANDREW BREITBART, an individual;

SUSANNAH BEAN BREITBART, an

individual; the BREITBART marital

community, a California marital

community comprised of ANDREW

AND SUSANNAH BEAN

BREITBART; BREITBART.COM,

LLC, a California limited liability

company; and BREITBART

HOLDINGS, INC. (f/k/a

BREITBART.COM, INC.), a California

corporation,

Defendants.

CASE NO.

COMPLAINT

Plaintiffs GEN ADS, LLC, CARTMELL HOLDINGS, LLC, and

HILLSTROM EQUITIES, LLC, file this Complaint against defendants

ANDREW BREITBART, SUSANNAH BEAN BREITBART, the BREITBART

marital community, BREITBART.COM, LLC, and BREITBART HOLDINGS,

INC., on personal knowledge as to their own activities, and on information

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 1 of 21
NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

(206) 274-2800

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COMPLAINT - 2

and belief as to the activities of others, as follows:

I. THE PARTIES

1. Plaintiff GEN ADS, LLC (“Gen Ads”) is a Washington limited

liability company with its principal place of business in Seattle, Washington.

2. Plaintiff CARTMELL HOLDINGS, LLC (“Cartmell Holdings”) is

a Washington limited liability company with its principal place of business in

Seattle, Washington, and is a Member of Gen Ads.

3. Plaintiff HILLSTROM EQUITIES, LLC (“Hillstrom Equities”) is

a Minnesota limited liability company with its principal place of business in

Minneapolis, Minnesota, and is a Member and Manager of Gen Ads.

4. Gen Ads, Cartmell Holdings, and Hillstrom Equities are referred

to collectively herein as “Plaintiffs”; and each individually is referred to as a

“Plaintiff”.

5. Defendant ANDREW BREITBART (“Andrew”) is an individual

residing in Los Angeles, California.

6. Defendant SUSANNAH BEAN BREITBART (“Mrs. Breitbart”) is

an individual residing in Los Angeles, California.

7. The BREITBART marital community is a California marital

community comprised of Andrew Breitbart and Susannah Bean Breitbart. 

All of the actions Andrew Breitbart took as alleged herein were undertaken on

behalf of himself, Mrs. Breitbart, and the marital community comprised thereof.

Accordingly, each of Andrew Breitbart, Mrs. Breitbart and the martial

community are liable for the damages Gen Ads suffered arising out of Andrew

Breitbart’s activities.

8. Defendant BREITBART.COM, LLC (“BL”) is a California limited

liability company with its principal place of business in Los Angeles County,

California.

9. Defendant BREITBART HOLDINGS, INC. (“BHI”) is a California

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 2 of 21
NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

(206) 274-2800

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COMPLAINT - 3

corporation with its principal place of business in Los Angeles County,

California. However, during most of the period relevant to the facts alleged

herein, BHI was a California corporation named BREITBART.COM, INC. On

December 30, 2005, Defendant Andrew Breitbart caused a Certificate of

Amendment to be filed with the California Secretary of State, which effected

an amendment to BHI’s articles of incorporation renaming the corporation

Breitbart Holdings, Inc.

10. Defendant Andrew Breitbart controls defendants BL and BHI.

11. Collectively, Andrew Breitbart, Mrs. Breitbart, the Breitbart

marital community, BHI, and BL, are referred to herein as “Defendants”; and

each individually is referred to as a “Defendant”.

12. Each Defendant aided and abetted the actions of the other

Defendants as set forth below, in that each Defendant had knowledge of those

actions, provided assistance and benefitted from those actions. Each of the

Defendants was the agent of each of the remaining Defendants, and in doing

the things hereinafter alleged, was acting within the course and scope of such

agency and with the permission and consent of the other Defendants.

II. JURISDICTION AND VENUE

13. This is a civil action seeking damages for breach of contract,

breach of the covenant of good faith and fair dealing, breach of fiduciary duty,

fraud, copyright infringement, and declaratory relief.

14. This Court has jurisdiction over the subject matter of this action

pursuant to 17 U.S.C. § 101 et seq. (copyright); 28 U.S.C. § 1331 (federal

question); and 28 U.S.C. § 1338(a) (copyright). In addition, this Court has

subject matter jurisdiction pursuant to 28 U.S.C. § 1332 because the parties

are citizens of different states and the amount in controversy exceeds

$75,000. This Court has supplemental jurisdiction over the state law claims

pursuant to 28 U.S.C. § 1367.

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 3 of 21
NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

(206) 274-2800

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COMPLAINT - 4

15. This Court has personal jurisdiction over the defendants and each

of them pursuant to FED R. CIV. P. 4(k)(1)(A) because each defendant could be

subjected to the jurisdiction of a court of general jurisdiction in the state in

which this Court is located, pursuant to RCW § 4.12.025, because: (i) each of

the defendants has done, and is doing, business in this state; (ii) the

defendants and each of them have engaged in unfair competition having an

effect in this state; and (iii) Andrew (on his own behalf and on behalf of his

marital community), BHI, and BL consented to jurisdiction here by entering

into agreements with Plaintiffs governed by Washington law, which require

that disputes arising out of or relating to such agreements be adjudicated in

King County, Washington.

16. This Court is the proper venue for this action pursuant to 28

U.S.C. § 1391(a)(3) because Defendants, and each of them, are subject to

personal jurisdiction in this judicial district, and pursuant to 28 U.S.C.

§ 1391(b)(2) because a substantial part of the events or omissions giving rise

to the claims occurred in this judicial district. Additionally, the contracts

between Plaintiffs, on the one hand, and Defendants, on the other hand, that

form the basis of Plaintiffs’ breach of contract claims provide that venue for

any litigation concerning the contract will be a court located in King County,

Washington.

III. FACTS

17. Gen Ads is an Internet advertising firm. Among other things,

Gen Ads sells (to third parties) advertising space on web sites operated by its

clients.

18. Defendant Andrew Breitbart became a member of Gen Ads

purportedly through Breitbart Holdings, Inc. However, Breitbart Holdings,

Inc. did not exist at the time the parties formed Gen Ads or signed the Gen

Ads Limited Liability Company Agreement (the “LLC Agreement”).

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 4 of 21
NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

(206) 274-2800

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COMPLAINT - 5

19. At the time the parties signed the LLC Agreement, Andrew

owned Breitbart.com, Inc., a California corporation.

20. A couple of months after the parties signed the LLC Agreement,

Andrew caused the filing of a Certificate of Amendment effecting the articles

of incorporation for Breitbart.com, Inc. to reflect the name of that corporation

as Breitbart Holdings, Inc.

21. Because Breitbart Holdings, Inc. did not exist at the time the

parties formed Gen Ads and signed the LLC Agreement, Breitbart Holdings,

Inc. could not be a member of Gen Ads.

22. Consequently, Defendants Andrew Breitbart, Mrs. Breitbart, and

the Breitbart martial community are together, personally and individually, a

member of Gen Ads.

23. Andrew is associated with Matt Drudge’s news web site the

Drudge Report, located on the Internet at <<www.drudgereport.com>>, which

reportedly receives more than 3 million unique visitors a month and

generates more than $1 million in advertising revenue annually.

24. In particular, Andrew controls certain content that appears on

<<drudgereport.com>>, as a consequence of which he has the ability to direct

traffic (i.e., Internet end users) from <<drudgereport.com>> to other web sites

(i.e., by inserting hyperlinks that end users click to be redirected to another

web site). 

25. Defendant BL, which Andrew controls, owns and operates the

Internet web site http://www.breitbart.com (the “Breitbart Site”). The

Breitbart Site was launched August 17, 2005, and almost immediately

became one of the most trafficked sites on the Internet, with a reported 2.64

million visits in its first month of operation.

26. Nearly all of the traffic on the Breitbart Site originated on

<<drudgereport.com>> because Andrew caused the traffic to be diverted from

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 5 of 21
NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

(206) 274-2800

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COMPLAINT - 6

<<drudgereport.com>> to the Breitbart Site.

27. Gen Ads was formed to, among other things, generate revenue

from the significant traffic at the Breitbart Site. 

28. Pursuant to Section 3.2 of the LLC Agreement, Gen Ads is

managed by Managers. A true and correct copy of the LLC Agreement is

attached hereto as Exhibit A.

29. The Managers of Gen Ads are purportedly Global DNS, LLC (as

general manager), Hillstrom Equities, LLC and Breitbart Holdings, Inc.

30. The LLC Agreement provides Gen Ads the exclusive right to sell

advertising on any web site operated by a Member. In particular, section 13.2

of the LLC Agreement provides, 

The Members hereby acknowledge that each Member has various

“Affiliates” (defined below) which own and operate various Web

properties (the “Affiliate Properties”). The Members hereby

acknowledge and agree that if any Affiliate Property desires to offer

third parties a rightto publish on an AffiliateProperty any material

that promotes a brand or a product or a service of such third party

through advertising banners, text links, buttons, jump pages and

similar promotional devices as well as all elements of a sponsorship

or promotion (“Advertising”), the Company shall have the right to

exclusively manage and supervise the sale of Advertising on the

applicable Affiliate Property in accordance with the agreement set

forth in Exhibit C attached hereto (the “Service Agreement”).

31. Defendant BL is an “Affiliate” of BHI as that term is defined in

section 1.2 of the LLC Agreement.

32. The Breitbart Site is an “Affiliate Property” as defined by the

LLC Agreement.

33. On November 11, 2005, Gen Ads and BL entered into an

Exclusive Advertising Services Agreement in relation to the Breitbart Site

(the “Advertising Agreement”). A true and correct copy of the Advertising

Agreement is attached hereto as Exhibit B.

34. The Advertising Agreement grants Gen Ads the exclusive right to

sell advertising on the Breitbart Site. Specifically, section 2 of the Agreement

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 6 of 21
NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

(206) 274-2800

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COMPLAINT - 7

provides:

[BL] hereby grants to GENADS the worldwide exclusive rightto sell

all Advertising on the [Breitbart] Site(s) at prices and terms solely

determined by GENADS during the term of this Agreement.

Accordingly, under no circumstances shall [BL] retain a third party

to solicit Advertisers for the [Breitbart] Sites (other than GENADS).

Further, [BL] shall not solicit to the exclusion of GENADS any

Advertisers unless approved in writing by GENADS. Exclusivity

under this Section 2 shall be subject to the terms of Section 5 of this

Agreement, and conditioned on [BL] receiving the Minimum Royalty

Payment pursuant to Section 6.3 of this Agreement.

35. Section 3 of the Advertising Agreement similarly provides:

[BL] represents, warrants, covenants and agrees: (e) not to engage,

contract with, license or permit any person, firm or entity (including

[BL] and its employees) other than GENADS and its employees to

sell, or represent [BL] for the sale of Advertising on the [Breitbart]

Site and to refer all advertising inquiries to GENADS.

36. BL is obligated by the Advertising Agreement to insert on the

Breitbart Site HTML or other code provided by Gen Ads to enable Gen Ads to

place advertisements on the Breitbart Site.

37. In November 2005, Gen Ads learned that BL had entered into an

advertising agreement with Reuters, a third party, for the placement of

multiple links on the Breitbart Site to promote the Reuters site (the “Reuters

Advertising”).

38. Indeed, Andrew was negotiating the agreement to place Reuters

Advertising at the time he was negotiating the Advertising Agreement and

LLC Agreement with Gen Ads, Cartmell Holdings, and Hillstrom Equities.

39. Andrew represented at the time he entered the Advertising

Agreement on behalf of BL, and the LLC Agreement, that he was not

negotiating with any third parties, but rather was only negotiating with Gen

Ads and its principals for an advertising deal.

40. Andrew omitted from his representations about exclusivity with

Gen Ads that he was negotiating with Reuters.

41. Pursuant to the agreement with Reuters, BL has included on the

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 7 of 21
NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

(206) 274-2800

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COMPLAINT - 8

Breitbart Site eighteen (18) pages devoted to promoting the Reuters news

service, with each such promotional page including news story teasers.

42. End users (i.e., consumers) cannot view the news stories

referenced by said Reuters Advertising teasers without clicking on a link, at

which time the end user is directed to the Reuters web site and away from the

Breitbart Site. Each story also has a text link to Reuters. Additionally, the

top of each page has a graphical link to Reuters.

43. BL collects a fee in consideration for placing the Reuters

Advertising on the Breitbart Site.

44. As a result of end users being redirected from the Breitbart Site

to the Reuters site, the value of advertising Gen Ads sells on the Breitbart

Site is reduced dramatically.

45. The Advertising Agreement defines “Advertising” as “the

material that promotes a product or a brand or a service through advertising

banners, text links, buttons, jump pages and similar promotional devices as

well as all elements of a sponsorship or promotion.”

46. The Reuters Advertising is “Advertising” as defined in the

Advertising Agreement.

47. The Advertising Agreement provides that Gen Ads is responsible

for collecting revenue generated by Advertising on the Breitbart Site, and

requires BL to make prompt payment to Gen Ads of any payment for

Advertising that is paid directly to BL rather than to Gen Ads.

48. On November 30, 2005, Gen Ads notified BL that the Reuters

Advertising constitutes “Advertising” under the Advertising Agreement, and

demanded that BL make payment to Gen Ads of any revenue received by BL

from Reuters in connection with the Reuters Advertising.

49. BL refused, and continues to refuse, to account to Gen Ads for the

revenues it has received and continues to receive from Reuters.

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 8 of 21
NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

(206) 274-2800

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COMPLAINT - 9

50. Section 4(e) of the Advertising Agreement gives BL the right to

consent or withhold consent as to the content of the advertisements delivered

to the Breitbart Site.

51. At the time the parties entered into the Advertising Agreement,

neither BL nor Gen Ads understood section 4(e) of the Advertising Agreement

to require Gen Ads to present advertisements to BL for approval prior to

placing such advertisements on the Breitbart Site. Rather, the mutual

understanding of Gen Ads and BL was that Gen Ads would place

advertisements on the Breitbart Site, and BL would instruct Gen Ads to

remove any advertisements to which it objected.

52. Prior to Gen Ads’s demand that BL account for the revenue

received for the Reuters Advertising, BL and Gen Ads acted in a manner

consistent with this understanding: BL instructed Gen Ads to remove certain

advertisements from the Breitbart Site after those advertisements had

appeared on the Breitbart Site, and never asked to review any

advertisements before Gen Ads placed them on the Breitbart Site.

53. Defendant Andrew induced Gen Ads to enter the Advertising

Agreement by representing that (1) Andrew would continue to cause traffic to

be directed from <<drudgereport.com>> to the Breitbart Site to the greatest

extent possible; (2) Andrew would not, for consideration, cause traffic to be

directed from <<drudgereport.com>> to any site other than the Breitbart

Site; and (3) GenAds would have the ability to sell at least five (5) advertising

locations on the Breitbart Site. 

54. Since November 2005, or earlier, Andrew has caused traffic to be

directed from <<drudgereport.com>> to Reuters. The hyperlinks to Reuters

on <<drudgereport.com>> include the same tracking code as the hyperlinks to

Reuters on the Breitbart Site. Accordingly, Andrew (directly or through one of

the other defendants) is receiving consideration from Reuters for the

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 9 of 21
NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

(206) 274-2800

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COMPLAINT - 10

advertising on <<drudgereport.com>>.

55. On December 23, 2005, BL (through its counsel) informed Gen

Ads that it would make available to Gen Ads only two (2) advertising

locations on the Breitbart Site, and demanded that Gen Ads comply with a

laundry list of unreasonable requirements to which Gen Ads had never

agreed.

56. In particular, BL demanded that Gen Ads provide all

advertisements to BL for its approval ten days prior to placing such

advertisements on the Breitbart Site; that advertisements provided by Gen

Ads not include video or audio, or include popovers or popunders, or be

duplicated on a single web page, or consist solely or primarily of text; that

“run of network” advertisements (i.e., advertisements that Gen Ads places on

additional sites for which it sells advertising space) appear in no more than

one advertising location on the Breitbart Site; and that Gen Ads provide

weekly statements signed “under penalty of perjury” certifying compliance

with BL’s restrictions.

57. BL’s unilateral demands are both unreasonable and inconsistent

with standard industry practice and the Advertising Agreement.

58. When Gen Ads advised BL that it lacked authority to impose such

requirements, BL asserted that Gen Ads would be in breach of the

Advertising Agreement if it did not comply with BL’s extracontractual

demands.

59. Gen Ads is, and at all relevant times has been, the copyright

owner under United States copyright law with respect to certain software

code entitled NEWSFEED CODE (the “Original Code”), which it uses to place

advertisements dynamically on a Gen Ads client site, such as the Breitbart

Site.

60. Gen Ads is informed and believes that defendants BL and

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 10 of 21
NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

(206) 274-2800

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COMPLAINT - 11

Andrew Breitbart, beginning sometime between December 14, 2005 and

January 3, 2006, without the permission or consent of Gen Ads,

misappropriated the Original Code by reproducing it and distributing it on

the Breitbart Site.

IV. FIRST CAUSE OF ACTION

BREACH OF CONTRACT

(By Gen Ads Against Breitbart.com, LLC)

61. Plaintiffs incorporate the allegations set forth in paragraphs 1

through 60 above as though fully set forth herein.

62. On or about November 11, 2005, Gen Ads and BL entered into a

written agreement.

63. Beginning on or about November 20, 2005, and continuing

through the present, BL breached the agreement by, among other things,

selling advertising space on the Breitbart Site to Reuters to the exclusion of

Gen Ads and failing to make payment to Gen Ads of revenue received from

Reuters.

64. Gen Ads has performed its obligations to BL as required by the

Advertising Agreement, except to the extent its performance was prevented

or excused by the conduct of defendant BL.

65. By engaging in the acts alleged herein, BL has breached its

obligations under sections 2, 3(b), 3(e), and 6.4 of the Advertising Agreement,

among others.

66. As a direct, proximate and foreseeable result of BL's breach of the

Advertising Agreement, Gen Ads has been damaged in an amount to be

determined at trial, but which Gen Ads believes exceeds $75,000.00.

67. Gen Ads is entitled to its reasonable attorney’s fees pursuant to

section 17 of the Advertising Agreement.

///

///

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 11 of 21
NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

(206) 274-2800

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COMPLAINT - 12

V. SECOND CAUSE OF ACTION

BREACH OF CONTRACT

(By Cartmell Holdings, LLC and Hillstrom Equities, LLC against all

Defendants except Breitbart.com, LLC)

68. Plaintiffs incorporate the allegations set forth in paragraphs 1

through 67 above as though fully set forth herein.

69. On or about September 1, 2005, Cartmell Holdings, Hillstrom

Equities and Andrew Breitbart (purportedly as Breitbart Holdings, Inc.)

entered into the LLC Agreement.

70. Breitbart Holdings, Inc. did not exist at the time Andrew

purported to execute the LLC Agreement on its behalf, and consequently,

Andrew is personally liable for BHI’s failure to honor its obligations under the

LLC Agreement.

71. The LLC Agreement provides Gen Ads the exclusive right to sell

advertising on any web site operated by a Member or an Affiliate of a

Member. 

72. Beginning in or about November 2005, and continuing through

the present, BHI and Andrew breached the LLC Agreement by allowing BL to

sell advertising space on the Breitbart Site to Reuters, to the exclusion of

Gen Ads and in derogation of Gen Ads’s exclusive right to sell advertising on

the Breitbart Site.

73. Cartmell Holdings and Hillstrom Equities have performed their 

respective obligations to Andrew and BHI as required by the LLC Agreement,

except to the extent their performance was prevented or excused by the

conduct of Defendants Andrew and/or BHI.

74. By engaging in the acts alleged herein, Andrew and BHI have

breached their obligations under section 13.2 of the LLC Agreement.

75. As a direct, proximate and foreseeable result of Andrew’s and

BHI’s breach of the LLC Agreement, Cartmell Holdings and Hillstrom

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 12 of 21
NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

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COMPLAINT - 13

Equities have been damaged in amount to be determined at trial, but which

each believes exceeds $75,000.00.

76. Andrew’s acts of breach, and his entry into the LLC Agreement,

were done on behalf of himself and his marital community. Accordingly,

Andrew Breitbart, Susannah Bean Breitbart and the Breitbart marital

community are jointly and severally liable for said breach of contract and the

damages caused thereby.

77. Cartmell Holdings and Hillstrom Equities are entitled to their

reasonable attorney fees pursuant to section 14.2 of the LLC Agreement.

VI. THIRD CAUSE OF ACTION

BREACH OF FIDUCIARY DUTY

(By all Plaintiffs against all Defendants except Breitbart.com, LLC)

78. Plaintiffs incorporate the allegations set forth in paragraphs 1

through 77 above as though fully set forth herein.

79. By virtue of their role as a Manager of Gen Ads, and as expressly

acknowledged by section 3.7 of the LLC Agreement, Andrew and BHI have a

fiduciary duty to Gen Ads and its Members.

80. As fiduciaries, Andrew and BHI owe Gen Ads the highest duty of

good faith and loyalty.

81. Pursuant to section 13.2 of the LLC Agreement, Gen Ads has the

exclusive right to sell advertising on Affiliate Properties, as that term is

defined by the LLC Agreement, and Andrew and BHI are obligated to cause

their Affiliate Properties to effectuate Gen Ads’s exercise of that right.

82. The Breitbart Site is an Affiliate Property.

83. Andrew and BHI breached their fiduciary duty to Gen Ads by

causing their Affiliate, BL, to enter into an agreement with Reuters to the

exclusion of Gen Ads, in derogation of their duties and in violation of the LLC

Agreement and the Advertising Agreement. By thus placing their own

interests ahead of those of Gen Ads, Andrew and BHI breached their

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 13 of 21
NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

(206) 274-2800

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COMPLAINT - 14

fiduciary duty of loyalty.

84. Andrew further breached his fiduciary duty to Gen Ads by

causing traffic originating at <<drudgereport.com>> to link directly to

Reuters, for which traffic he (directly or through another defendant) received

consideration from Reuters. Under his fiduciary duty, Andrew was obligated

to cause all such traffic to be directed to the Breitbart Site, and to account to

Gen Ads for any revenue generated thereby.

85. Andrew undertook the acts alleged herein on behalf of himself

and his marital community. Accordingly, Andrew Breitbart, Susannah Bean

Breitbart and the Breitbart marital community are jointly and severally

liable for said breach of fiduciary duty.

86. As a direct, proximate and foreseeable result of Andrew’s breach

of fiduciary duty, Plaintiffs have been damaged in amount to be determined

at trial, but which Plaintiffs believe exceeds $75,000.00.

VII. FOURTH CAUSE OF ACTION

BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING

(By Gen Ads Against Breitbart.com, LLC)

87. Plaintiffs incorporate the allegations set forth in paragraphs 1

through 86 above as though fully set forth herein.

88. Under Washington law, there is in every contract an implied

covenant of good faith and fair dealing, requiring each party to cooperate with

the other so that he may obtain the full benefit of performance.

89. Defendant BL has interfered with, obstructed, and otherwise

undermined Gen Ads’s ability to perform its obligations under the

Advertising Agreement.

90. When a visitor clicks on one of the links to Reuters that BL has

placed on the Breitbart site, the visitor leaves the Breitbart Site and is

directed to the Reuters site. As a result, that visitor generates no further

page impressions on the Breitbart Site. As a result, the visitor is prevented

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 14 of 21
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from clicking on any advertisements on the Breitbart Site. Accordingly, by

directing traffic away from the Breitbart Site to Reuters, BL reduced both the

overall traffic on the Breitbart Site and the click-through rate for

advertisements placed by Gen Ads, thus constraining Gen Ads’s ability to

obtain the full benefit of its performance under the Advertising Agreement. 

91. In addition, BL has imposed unreasonable, arbitrary and

burdensome requirements on Gen Ads’s performance under the Advertising

Agreement. BL’s conduct is calculated to cause Gen Ads to breach the

Advertising Agreement. BL’s calculation is evidenced by (among other things)

BL’s repeatedly asserting, without justification, that Gen Ads is in breach of

the Advertising Agreement for failure to comply with its unilaterally imposed,

extracontractual demands.

92. By this conduct, BL has violated the implied covenant of good

faith and fair dealing required by the Advertising Agreement

93. As a direct, proximate and foreseeable result of BL’s breach of the

implied covenant of good faith and fair dealing, Gen Ads has been damaged in

amount to be determined at trial, but which Gen Ads believes exceeds

$75,000.00.

VIII. FIFTH CAUSE OF ACTION

FRAUD

(By Plaintiffs Against Andrew Breitbart, Mrs. Breitbart, and the

Breitbart Marital Community)

94. Plaintiffs incorporate the allegations set forth in paragraphs 1

through 93 above as though fully set forth herein.

95. In or about August, 2005, defendant Andrew Breitbart falsely and

fraudulently represented to Gen Ads that (1) Andrew would continue to cause

traffic to be directed from <<drudgereport.com>> to the Breitbart Site to the

greatest extent possible; (2) Andrew would not, for consideration, cause traffic

to be directed from <<drudgereport.com>> to any site other than the

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 15 of 21
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505 Fifth Ave. S., Ste. 610

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Breitbart Site; (3) GenAds would have the ability to sell at least five (5)

advertising locations on the Breitbart Site; and (4) Andrew was not

negotiating with any third party for an advertising agreement (collectively

the “Representations”).

96. At the time Andrew made the Representations to Plaintiffs Gen

Ads, Cartmell Holdings and Hillstrom Equities, Andrew had no intention of

performing them.

97. Indeed, at the time Andrew was negotiating the Advertising

Agreement and LLC Agreement, he was secretly negotiating and planning to

enter into an agreement with Reuters for the same purpose as the

Advertising Agreement.

98. Andrew advised Gen Ads that he was discussing with Reuters an

agreement to provide content for the Breitbart site and that Gen Ads would

benefit from such content.

99. By making affirmative representations about Reuters, Andrew

created a duty to fully disclose the nature of his communications with

Reuters.

100. Andrew hid and failed to disclose to Gen Ads, Cartmell Holdings,

and Hillstrom Equities his activities in connection with Reuters, and in

particular that he was negotiating an agreement that would divert traffic

away from the Breitbart Site to the Reuters web site.

101. By diverting traffic away from the Breitbart Site to the Reuters

site, the value of advertising Gen Ads was negotiating to sell for BL would be

materially diminished.

102. Had Gen Ads, Cartmell Holdings, and Hillstrom Equities known

that Andrew was negotiating for a deal that would divert traffic away from

the Breitbart site (and thereby diminish potential advertising revenue), then

they would not have entered into the Advertising Agreement and LLC

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 16 of 21
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505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

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Agreement with Andrew and BL.

103. Additionally, Andrew hid and failed to disclose to Gen Ads,

Cartmell Holdings, and Hillstrom Equities that he planned to send traffic

from <<drudgereport.com>> to the Reuters site, which he would otherwise

have sent to the Breitbart Site, if his agreement with Reuters materialized.

104. Had Plaintiffs known of Andrew’s secret intent to send traffic to

Reuters, to the detriment of the Breitbart Site, from <<drudgereport.com>>

then Plaintiffs would not have entered into the Advertising Agreement and

LLC Agreement.

105. Shortly after entering into the LLC Agreement on behalf of BL

and the Advertising Agreement, Breitbart actually did send traffic from

<<drudgereport.com>> to the Reuters site which he otherwise would have

sent to the Breitbart Site.

106. As a result of the traffic Andrew sent to the Reuters site instead

of to the Breitbart Site from <<drudgereport.com>>, the value of advertising

Gen Ads sold on the Breitbart Site diminished substantially.

107. At the time Andrew made the Representations and at the time

Gen Ads entered into the Advertising Agreements, Gen Ads was ignorant of

Andrew’s secret intention not to perform and Gen Ads could not, in the

exercise of reasonable diligence, have discovered Andrew's secret intention.

108. At the time Andrew made the Representations and at the time

Cartmell Holdings and Hillstrom Equities entered into the LLC Agreement,

they were ignorant of Andrew’s secret intention not to perform and could not,

in the exercise of reasonable diligence, have discovered Andrew's secret

intention.

109. In making these Representations, Andrew induced Gen Ads to,

and Gen Ads in fact did, enter into the Advertising Agreement with BL and

BHI in reliance upon the representations. Had Gen Ads known the actual

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 17 of 21
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ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

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COMPLAINT - 18

facts, Gen Ads would not have taken such action.

110. In making the Representations, Andrew induced Cartmell

Holdings and Hillstrom Equities to, and they in fact did, enter into the LLC

Agreement with BL and BHI in reliance upon the Representations. Had

these parties known the actual facts, they would not have taken such action.

111. Plaintiffs’ reliance on Andrew’s representations was justified

because Andrew controls both BHI and BL, and was in a position to fulfill his

promises on behalf of BL if he so desired.

112. In doing the acts herein alleged, Andrew acted with oppression,

fraud, and malice.

113. Plaintiffs do not wish to rescind said agreements, but rather elect

to enforce them and recover its damages.

114. Andrew undertook the acts alleged herein on behalf of himself

and his marital community. Accordingly, Andrew Breitbart, Susannah Bean

Breitbart and the Breitbart marital community are jointly and severally

liable for said fraud.

115. As a proximate result of Andrew's fraud and deceit, Gen Ads was

induced to enter into an the Advertising Agreement and Cartmell Holdings

and Hillstrom Equities were induced to enter into an the LLC Agreement by

reason of which Plaintiffs have been damaged in an amount to be proved at

trial but which Plaintiffs believe exceeds $75,000.00.

IX. SIXTH CAUSE OF ACTION

COPYRIGHT INFRINGEMENT

(By Gen Ads Against Breitbart.com, LLC, Andrew Breitbart, Mrs.

Breitbart, and the Breitbart Marital Community)

116. Plaintiffs incorporate the allegations set forth in paragraphs 1

through 115 above as though fully set forth herein.

117. Gen Ads is, and at all relevant times has been, the copyright

owner under United States copyright law with respect to the Original Code,

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 18 of 21
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ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

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COMPLAINT - 19

which it uses to place advertisements dynamically on a Gen Ads client site,

such as the Breitbart Site.

118. The Original Code is copyrightable subject matter under the

Copyright Act, 17 U.S.C. § 101, et seq.

119. Gen Ads has complied in all respects with the provisions of the

Copyright Act and, on December 30, 2005, Gen Ads registered the copyright

in the Original code with the United States Copyright Office, and secured

Certificate of Registration No. TX 6-253-208, a copy of which is attached

hereto as Exhibit C.

120. Among the rights granted to Gen Ads under the Copyright Act

are the exclusive rights to reproduce the Original Code and to distribute the

Original Code to the public.

121. Gen Ads is informed and believes that defendants BL and

Andrew Breitbart, beginning sometime between December 14, 2005 and

January 3, 2006, without the permission or consent of Gen Ads, has used, and

continues to use, the Original Code to place advertisements on the Breitbart

Site.

122. In doing so, Andrew and BL violated Gen Ads’s exclusive rights of

reproduction and distribution and has infringed Gen Ads’s copyright rights.

123. Andrew undertook the acts alleged herein on behalf of himself

and his marital community. Accordingly, Andrew Breitbart, Susannah Bean

Breitbart and the Breitbart marital community are jointly and severally

liable for said copyright infringement.

124. As a result of the infringement by Andrew and BL of Gen Ads’s

copyrights and exclusive rights under the United States Copyright Act, Gen

Ads is entitled to statutory damages pursuant to 17 U.S.C. § 504(c) against

Andrew, BL, Mrs. Breitbart, and the Breitbart martial community. Gen Ads

is further entitled to its attorney’s fees and costs pursuant to 17 U.S.C. § 505.

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 19 of 21
NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

(206) 274-2800

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X. SEVENTH CAUSE OF ACTION

DECLARATORY JUDGMENT

(By Gen Ads Against Breitbart.com, LLC)

125. Plaintiffs incorporate the allegations set forth in paragraphs 1

through 124 above as though fully set forth herein.

126. BL claims that Gen Ads is obligated to comply with unreasonable,

arbitrary and burdensome requirements of performance under the

Advertising Agreement, and that Gen Ads’s failure to comply with such

requirements constitutes a breach by Gen Ads.

127. Gen Ads denies that it is obligated to comply with the

requirements unilaterally imposed by BL, and denies that it is breaching the

Advertising Agreement.

128. A justiciable substantial controversy exists between BL and Gen

Ads concerning their respective rights and duties under the Advertising

Agreement.

129. Gen Ads and BL have an existing legal relationship and genuine

rights and interests upon which this Court's judgment may effectively operate

with the force and effect of a final judgment at law or decree in equity.

130. This proceeding is genuinely adversary in character between Gen

Ads and BL.

131. A declaration by the Court would terminate the controversy

between Gen Ads and BL.

132. The parties suffer from uncertainty and insecurity with respect to

rights, status and other legal relations among them which can only be

remedied by the Court.

133. This substantial controversy is of sufficient immediacy and

reality to warrant the issuance of a declaratory judgment.

134. This Court has the power to declare the rights, status and other

legal relations between the parties pursuant to 28 U.S.C. § 2201, et seq.

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 20 of 21
NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

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135. Gen Ads desires a judicial determination of its rights and duties

under the Advertising Agreement, and a declaration that Gen Ads is not

obligated to comply with the requirements imposed by BL and is not in

breach of the Advertising Agreement.

XI. PRAYER FOR RELIEF

WHEREFORE, Plaintiffs respectfully request that the Court enter

judgment against Defendants, jointly and severally, and in favor of Plaintiffs,

as follows:

1. For damages in amount to be proven at trial;

2. For its attorney’s fees and costs incurred herein; 

3. For statutory damages for each infringement of the Original Code

pursuant to 17 U.S.C. § 504;

4. For an injunction prohibiting further infringement of the Original

Code pursuant to 17 U.S.C. § 502;

4. For its costs in this action;

5. For punitive and exemplary damages; 

6. For a declaration that Gen Ads is not required to comply with

BL’s purported compliance standards, and is not in breach of the

Advertising Agreement; and

7. For such other and further relief as may be just and proper.

Dated this 26th day of January, 2006.

Respectfully Submitted,

NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

By:

Derek A. Newman, WSBA 26967

Roger M. Townsend, WSBA No. 25525

Attorneys for Plaintiffs

Case 2:06-cv-00137-JLR Document 1 Filed 01/26/06 Page 21 of 21