IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

MEDFORD DIVISION 

THE ORIGINAL TALK RADIO 

NETWORK, INC., an Oregon 

corporation; TALK RADIO 

NETWORK ENTERPRISES, LLC, 

an Oregon limited liability 

Company; TALK RADIO NETWORK 

ENTERTAINMENT, INC., an . 

Oregon corporation; TALK 

RADIO NETWORK-FM, INC., a 

Delaware corporation; 

AMERICA'S RADIO NEWS 

NETWORK, a Nevada Corporation,) 

Plaintiffs and 

v. 

Counterclaim 

Defendants, 

JOSEPH M. ALIOTO, 

individually and doing 

business as the ALIOTO 

FIRM, 

PANNER, J. 

Defendant and 

Counterclaim 

Plaintiff. 

LAW 

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No. 1:13-cv-00759-PA 

ORDER 

This matter comes before the Court on Defendant's Motion for 

Summary Judgment (#205) and Plaintiffs' motion for sanctions 

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Case 1:13-cv-00759-PA Document 247 Filed 10/29/14 Page 1 of 8
(contained in #209). Both motions are DENIED. 

Background 

Plaintiffs and counterclaim defendants in this matter are I 

The Original 1alk Radio Network, Inc., Talk Radio Network 

Enterprises, LLC, Talk Radio Network Entertainment, Inc., Talk 

Radio Network-FM, Inc., and America's Radio News Network 

(collectively "Plaintiffs"), all of whom are companies which 

produce syndicated news and talk radio pr?grams: Defendant and 

counterclaim plaintiff is Joseph Alioto, an attorney specializing 

in antitrust litigation. 

In 2011, Plaintiffs became concerned about the practices of 

Dial Global ("Dial"). Plaintiffs believed Dial was violating 

antitrust laws and that Dial's conduct would shortly drive 

Plaintiffs out of business. Plaintiffs sought to retain 

Defendant to represent them in an antitrust action against Dial. 

After reviewing their case, Defendant agreed to represent 

Plaintiffs. Plaintiffs contend Defendant promised to prosecute 

their case against Dial vigorously and promptly file a .complaint. 

On February 10, 2012, Defendant drew up a Fee Agreement, which he 

sent to Plaintiffs. The relevant terms of the Fee Agreement 

were: 

1) The scope of the representation was for Plaintiffs 

against Dial. 

2) Plaintiffs would pay Defendant a "$500,000 non-deductible 

non-refundable true retainer" to be paid in installments. 

The~first installment of $150,000 was due immediately, with 

$100,000 installments due on March 26, 2012, May 7, 2012; 

2 - ORDER. 

Case 1:13-cv-00759-PA Document 247 Filed 10/29/14 Page 2 of 8
and June 18, 2012. A final $50,000 installment was due on 

July 30, 2012. 

3) Defendant would be paid on a contingency basis. He would 

receive 25% of anything recovered before filing the 

complaint, 33.33% of anything recovered after filing the 

complaint, and 40% of anything recovered after the 

commencement of trial. 

4) Plaintiffs would pay $25,000 into a separate fund for 

Defendant's costs. 

5) If Plaintiffs withheld their consent to settle the case 

for an amount Defendant believed to be reasonable, Defendant 

would be permitted to withdraw. 

Plaintiffs signed the agreement and returned it to 

Defendant, along with the initial payment of $150,000 and the 

$25,000 cost fund. Plaintiffs subsequently made the March 26. 

payment of $100,000. 

Defendant and Plaintiffs engaged in settlement negotiations 

with Dial. Dial offered Plaintiffs concessions, the value of 

which is disputed by the parties. Plaintiffs repeatedly demanded 

that Defendant file the complaint, which Defendant refused to do. 

In May 2012, Plaintiffs claimed that Defendant had breached the 

contract by failing to file the complaint. Plaintiffs withheld 

payment of the May 7 and June 18 installments of the retainer and 

advised Defendant that they would immediately transfer the funds 

if Defendant filed the complaint again~t Dial. Defendant again 

declined to file the complaint. 

On June 8, 2012, Defendant s~nt Plaintiff~ a letter stating 

that Defendant had elected to withdraw from his representation, 

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Case 1:13-cv-00759-PA Document 247 Filed 10/29/14 Page 3 of 8
citing differences of opinion on strategy and tactics and 

Plaintiffs' refusal to p~y the May 7 retainer installment. 

Plaintiffs did not accept the withdrawal and advised Defendant 

that the withdrawal would be prejudicial to them. Despite 

Plaintiffs' protests, Defendant withdrew. 

Plaintiffs then filed their complaint against Dial in 

district court in California. Plaintiffs retained different 

counsel to represent them in that action. 

was transferred to New York and has since 

The case against Dial 

settled. 

Plaintiffs demanded the return of the money they had paid to 

Defendant. Defendant refused, although he did ultimately return 

the balance of the cost fund account after Plaintiffs filed this 

action. 

Legal Standard 

Summary judgment is appropriate, "if the movant shows that 

there is no genuine dispute as to any material fact and the 

movant is entitled to judgment as a matter of law." Fed. R. Civ. 

P. 56(a). Whether or not a fact is material is determined by the 

substantive law on the issue. T.W. Elec. Serv., Inc. v. Pac. 

Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987). There 

is a genuine dispute if the evidence is such that a reasonable 

jury would return a verdict for the nonmoving· party. Anderson v. 

Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party 

has the burden of establishing the absence of a genuine issue of 

material fact. C~lotex Corp. v. Catrett~ 477 U.S. 317, 323 

(1986). 

Special rules of construction apply to evaluating summary 

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Case 1:13-cv-00759-PA Document 247 Filed 10/29/14 Page 4 of 8
judgment motions: (1) all reasonable doubts as to the existence 

of genuine issues of material facts should be resolved against 

the moving party; and (2)_ all inferences must be drawn in the 

light most favorable to the nonmoving party. T.W. Elec., 809 F.2d 

at 630-31. 

Discussion 

I. Applicable Law 

Defendant renews his argument that the law of California 

should apply to this case. 

When sitting in diversity, a federal court must apply the 

conflict-of-law rules of its forum state to determine which law 

governs the dispute. See Mortensen v. Bresnan Communs., LLC, 722 

F.3d 1151, 1161 (9th Cir. 2013). Under Oregon conflict-of-law 

rules, the "necessary threshold determination [is] . whether 

there is a material difference between Oregon substantive law and 

the law of the other forum. Waller v. Auto-Owners Ins. Co., 174 

Or. App. 471, 475 (2001). Where no material difference exists, 

courts will apply the law of Oregon regardless of the relative 

significance of the relationship between the dispute and the 

alternative forum. See Angelini v. Delaney, 156 Or. App. 293, 

300 (1998). 

It is the burden of the party advocating for the application 

of a different forum's law to identify material differences 

between the law of Oregon and the law of the alternative forum 

and Oregon courts will apply Oregon law in the event no party 

identifies material distinctions, without regard to whether such 

d_istinctions actually exist. Id. "[I] t is not [the] obligation 

[of the co~rts] to cast around the law of California in quest of 

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Case 1:13-cv-00759-PA Document 247 Filed 10/29/14 Page 5 of 8
possible material differences." Id. 

If a material difference is found to exist, courts must then 

consider the states' relative connection to and interest in the 

litigation. Lilienthal v. Kaufman, 239 Or. 1, 14-5 (1964). When 

the interests of neither jurisdiction are clearly more important 

than those of the other, "the public policy of Oregon should 

prevail and the law of Oregon should be applied." Id. at 16. 

Defendant argues that, under Lilienthal, he is not required 

to "expressly concede" a conflict of law, but need only contend 

that, under the laws of California, he "would probably recover." 

This misapprehends the procedural situation in Lilienthal and 

would invert Oregon's well-established conflict-of-law test. In 

Lilienthal, it was the plaintiff who sought to apply California 

law in Oregon courts, while the defendant sought to apply Or~gon 

law. Lilienthal, 239 Or. at 3. The Oregon_Supreme Court 

determined that, although the defendant "did not expressly 

concede that under the law of California the defendant's 

obligation would be enforceable," the defendant's counsel stated 

that "if this proceeding were in the courts of California, the 

plaintiff probably would recover." Id. at 5. 

Plaintiffs in this case, like the defendant in Lilienthal, 

oppose the application of California law. Unlike the Lilienthal 

defendant, Plaintiffs have made no concessions, express or 

implied, about the likely outcome of this case under California 

law. It remains Defendant's burden, as the party advocating for 

the applicatlon of California law, to identify material 

differences between the laws of Oregon and California. Spirit 

Partners, LP v. Stoel Rives, LLP, 212 Or. App. 295, 301 (2007). 

6 ~ ORDER 

Case 1:13-cv-00759-PA Document 247 Filed 10/29/14 Page 6 of 8
Turning then to the threshold test, Defendant argues that.a 

material difference might exist between the laws of California 

and Oregon with regard to the validity of true retainers. 

Defendant ackn6wledges that Oregon law recognizes "nonrefundable" 

and."earned on receipt" retainers, but argues that Oregon law 

"may be interpreted in such a way that it could conflict with 

California law." I previously held that such a showing does not 

satisfy the threshold requirement of demonstrating a material 

difference between the laws of Oregon and California. I see no 

reason to disturb that ruling in light of Defendant's renewed 

motion. It is Defendant's burden to show that a material 

difference does exist, not merely that it might. Accordingly, 

Oregon law will govern this case. 

II. Defendant's Motion for Summary Judgment 

Defendant moves for summary judgment on his counterclaim for 

breach of contract. Defendant previously moved for summary 

judgment on this claim in his Amended Motion for Summary Judgment 

(#118) and I denied the motion (#137). I see no reason to 

disturb that ruling. Defendant's motion is DENIED. 

III. Plaintiffs' Request for Sanctions 

Plaintiffs' Response to Defendant's Motion for Summary 

Judgment (#209) also contains a "request" that t~e Court order 

sanctions against Defendant for submitting declarations in bad 

faith or for the purpose of delay. Although Plaintiffs call 

their aciion a "request," it is more properly classified as a 

motion. 

Local Rule 7-1(b) forbids combining a motion with any 

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Case 1:13-cv-00759-PA Document 247 Filed 10/29/14 Page 7 of 8
response, reply, or other pleading. 1 Plaintiffs' motion for 

sanctions is subject to denial on that basis alone. See Cantley 

v. DSMF, Inc., 422 F. Supp. 2d 1214, 1223 (D. Or. Mar. 20, 2006) 

Furthermore, even if Plaintiffs' motion for sanctions had been 

properly presented, there is no evidence that Defendant's 

declaration was submitted in bad faith or for the purpose of 

delay. Plaintiffs' motion ii DENIED. 

Conclusion 

Defendant's Motion for Summary Judgment (#205) is DENIED. 

This case shall be governed by Oregon law. Plaintiffs' request 

for sanctions (contained within #209) is DENIED. 

IT IS SO ORDERED. 

DATED this~ day of October, 2014. 

a~~ Owen .M. Panner 

United· States District Judge 

1

I note that the Court.·previously advised Plaintiffs of the 

requirements of LR 7-1(b) when they submitted their coffiPined 

Supplemental Motion for Judgment Notwithstanding the Verdict and 

Plaintiffs' Response to Defendants Motion for Judgment (#193). 

8 - ORDER 

Case 1:13-cv-00759-PA Document 247 Filed 10/29/14 Page 8 of 8