A DISCUSSION OF LAW AND JOURNALISM

Quite Possibly, a Bad Rap

Ryan Leslie

By Ryan Morrison

Ryan Leslie is a lot of things. He’s a Harvard University alum who completed his schooling at age 19. He’s a record producer, an R&B singer, and a rapper with a large and loyal fan base. He’s even the founder of a successful media company. One thing he is not, however, is an attorney.

So when his backpack was stolen during a tour in Cologne, Germany, in 2010, he probably should have consulted a lawyer before uploading not one, but two YouTube videos offering rewards for his lost property. First, Mr. Leslie offered a $20,000 reward for the return of his bag containing a hard drive and laptop with beats and recordings invaluable to the musician. With no results, he upped the reward to $1,000,000.

When a German auto shop owner out on a dog walk found the bag containing the computer and the hard drive and demanded his million dollar reward, Mr. Leslie refused to pay because, he said, none of the information on the hard drive was retrievable. This started an offer/acceptance problem that would make a law student scream his mother’s name and pass out during a contracts exam.

Our legal system, in its infinite wisdom, takes a problem too complex for most lawyers and asks twelve individuals with no legal training to figure it out. And in a Manhattan federal court last November, a jury ordered Mr. Leslie to pay Armin Augstein, the man who found the hard drive, the full $1 million. Later, the court ordered Mr. Leslie to an additional $180,000 for interest that accrued between the finding of the laptop and the court’s decision. Various newspapers, most notably the New York Post, have ruthlessly mocked Mr. Leslie for trying to get out of paying what he promised.

We wrote about the case in November of 2011 and came to the conclusion, after reading the media headlines, that Mr. Leslie had to pay up.  But we’ve since had the opportunity to learn more about the case.

We talked to David DeStefano, the attorney for Mr. Leslie, and we’re not certain the correct decision was reached.

…But let’s take a look together, shall we?

In order for a contract to exist between two parties, there must be both an offer and an acceptance. An offer can be as simple as, “Find and bring me my hard drive and I’ll give you $1,000,000.” An acceptance is simply an agreement to the offer (“It’s a deal!”) or actual performance (“Here’s your hard drive.”).

Of course, things can get more complicated. “I returned your hard drive. I don’t know if it has any of the information you wanted on it anymore and it’s totally broken, but it’s still technically what you asked for. When can I expect my million?”

So let’s look at the exact offer from Mr. Leslie. In the original YouTube video posted on the subject, a man beside the rapper bluntly quickly explains that there was a theft, and then states, “We’re offering a $20,000 reward for the return of this bag.”  He hands Mr. Leslie the microphone. From Mr. Leslie:  “Last night the tools that I have to share with all of you, the videos I have of all the tours, the memories that we’ve made together, the music that I make, everything is gone. So if you have any information, if you seen anything, if you hear anything, get at me. Ryanleslielaptopreturn@gmail.com, and I’ll make sure to let you know how much I appreciate it.”

So yes, a direct offer of $20,000 is made for just the bag, but then Mr. Leslie explains that what he is seeking are the items within the bag, going even further and explaining he wants what’s within the items within the bag. It’s a regular case of “Inception.”

The judge believed this video meant “You give me my laptop, and you get $20,000.” But take a step back a moment and let’s use something we don’t normally use in the legal world: common sense. There is not a laptop on the planet that is worth 20,000 bucks. (Okay, maybe some space laptop from NASA is worth a kajillion dollars, but you know what I mean.) Clearly, Mr. Leslie wanted what was on the laptop.

Unfortunately for the musician, New York courts don’t care. “[C]ourts may not by construction add or excise terms, nor distort the meaning of those used and thereby make a new contract for the parties under the guise of interpreting the writing.” And, “the court should not find the contract ambiguous where the interpretation urged by one party would strain the contract language beyond its reasonable and ordinary meaning.” Simply put, if a contract’s language isn’t ambiguous, the plain meaning of the words prevail. (Of course, this may be the most ambiguous contract I’ve ever heard. But that’s just my opinion.)

But then Mr. Leslie made a second video which said the following: “In the interest of retrieving the invaluable intellectual property contained on his laptop and hard drive, Mr. Leslie has increased the reward offer from $20,000 USD to $1,000,000 USD.”

This new video stated that Mr. Leslie was increasing the existing reward offer, making clear that the true offer was for the intellectual property on the laptop, not the laptop itself, and certainly not just the bag. If I offer a reward for a lost textbook, should I have to pay the reward if someone returns the cover of the book with all the pages ripped out? If I offer you money to find my laptop, and you return a broken piece of scrap metal….well, what do you think?

When the musician received his hard drive back and was unable to access it, he tried to have it fixed so he could retrieve the music on it. But the hard drive was evidence for this case, and by trying to have it repaired (which also required reformatting and partitioning of the drive) Mr. Leslie tampered with the evidence, according to the court.

The judge told the jury to accept as fact that Mr. Leslie intentionally destroyed anything that was on the laptop himself.

That. Changes. Everything.

If Mr. Leslie received the laptop and destroyed the files himself, it wouldn’t be a big leap of logic to believe he did it to weasel out of paying his offered reward. But there was no evidence that is what happened. Instead, the music producer may well have been desperately trying to get the files needed to help his career continue to explode? When names like Kanye and Jay-Z are asking for files that were contained on that your drive, wouldn’t you try anything possible to access it?

The jury remained conflicted about this question, and during their deliberations asked the judge if they would be able to reward Mr. Augstein some money amount less than the $1 million. They were ordered to give an all or nothing decision, and eventually decided on “all.”  The judge is supposed to determine the law and the jury is supposed to determine the facts. Here, the fact-finding power was stripped from the jury, wrongfully in my opinion, and will be Mr. Leslie’s strongest chance for appeal.

“Contract law isn’t yet versed in its application of the very new and unique issues brought on by present technology,” says Mr. DeStefano. “This case is one of the most important modern tests for the fundamental concepts of contract law and addresses each element of contract formation.  Hard drive accessibility, data corruption, unilateral contracts formed through YouTube videos. This case really has it all.”

NOTE- February 13, 2013: An earlier version of this article said that Mr. Leslie sent out his laptop for repair. It was his hard drive.

Comments

19 Comments »

19 Responses

  1. Sean says:

    Very informative article. I agree with pretty much everything you say but we cant let the fact that its Ryan leslie blur our judgement. At the end of the day he offered 1mil for the return of his laptop. Thats what happened. Do I think the guy deserved his 1mil for returning the laptop, of course not, and it is probabaly fishy but an offer is an offer.

  2. Marilyn says:

    Sean — but the author’s point is a good one. If I offered $25 for the return of my textbook and you returned it with all the pages torn out except for the Table of Contents — clearly you didn’t REALLY return my textbook. If I had a lawyer make my offer for me of course it would explain that it had to have the substantial portion of the pages intact. But I didn’t have a lawyer. So do I owe you the money? I don’t think so. Same for Ryan Leslie. I admit I’m a fan but I really think I’m being objective about this.

  3. Gordon Locke says:

    The Court’s decision, based upon NY law is correct. An offer was made and increased. Nothing in the video, as related, made the offer contingent upon the information on the hard drive being recoverable. When Mr Augustein found and returned the computer, including the hard drive, the offer was accepted and the transaction completed. At that point, absent a showing that Mr. Augustein did something that changed the ability to access the hard drive, Mr. Augustein was, and is entitled to be paid.
    As a separate point, I do not understand how the interest and costs could have doubled the amount to be paid, from $1MM to $2 MM.

  4. FreddieKrueger says:

    Umm… the guy graduated from Harvard, but he’s not smart enough to make a backup of his hard drive? Sorry, but this doesn’t add up.
    And the guy can just file bankruptcy any way…
    Maybe the next article should be titled “Failing to back up your data can cost you a million bucks”

  5. Raymond P. Bilodeau says:

    Unless his Harvard degree included rescuing data from a severely mutilated hard drive, he should have had it examined by a professional data saver before he started working on it. If the professional had said, there’s nothing I or anyone else can do to recover the data, and my lawyer says not to touch it if there’s going to be a legal action. And there is the problem of a professional not making a backup of a hard drive. The real analogy of the hard drive to the pageless book is, who tore the pages out? Certainly not the finder.

  6. NYLAttorney says:

    You really need to read the decision before opining. (http://www.scribd.com/doc/110547483/Augstein-v-Leslie-11-Civ-7512-HB-S-D-N-Y-Oct-17-2012)

    The case is a simply reward offer case. Nothing complicated there, especially given that Leslie announced the million dollar reward, repeatedly, including on MTV. Nothing was strained, and nothing worng. The contract was interpreted just as Leslie wanted it to be (actually, he first claimed that nobody could take it seriously)– I will pay one million dollars for my invaluable intellectual property.

    The issue is spoliation, and your assumed facts just don’t match what seems to have occured. Leslie says that he got back his hard drive after Augstein gave it to the police (yes, Augstein went to the police), and could not retrieve the data. Months later, and after letters from an attorney for Augstein, Leslie apparently sent the hard drive to the manufacuter for a replacement under the manufacturer’s warranty. The manufacturer swears it was not asked to search for data, and nobody says the manufacuter lied. (Why would it?) It just sent Leslie new hard drive. (Let’s face it, data is always there and if your computer lost something that you say was worth one million dollars, or someone wanted one million dollars from you, you would take it to some company to try and get that data.)

    Using your example, someone returns the bag with your textbook. He did not look inside. He calls and calls looking for the reward. Months later he hires a lawyer(and in the case of Leslie, he waited 8 months before returning the hard drive to the manufacturer)you tell him that the pages were missing. He asks to see the book and you say you do not have it — “threw it away just a few weeks ago.” The law of spoliation levels the playing field. The pages are presumed to be there, and you can prove through other means that it was not. Maybe a friend saw the book. Maybe you have a pitcure. For Leslie, the data was presumed to be there. He had is chance to prove it was not.

    Read the decision and tell me — where does it mention that: “When the musician received his hard drive back and was unable to access it, he tried to have it fixed so he could retrieve the music on it. But the laptop was evidence for this case, and by trying to have it repaired (which also required reformatting and partitioning of the drive) Mr. Leslie tampered with the evidence, according to the court.” Similarly, from where do you conclude that “the music producer may well have been desperately trying to get the files needed to help his career continue to explode.” Facts not assumptions get trials. Leslie had his chance to present the facts.

  7. iris says:

    Reading dscision in link above. I don’t think the author did.

    “… documents that Avastor [the manufacurer] provided in response to Austein’s subpoena, thestatements by Jahret Sylvester, an employee at Avastor, and the records produced by Avastor indicate that a request for data recovery was not made by Leslie or anyone on his team…. Leslie does not dispute this.”

    I can’t beleive the judge was so easy on Leslie. Told jury that they assume that the data was on the hard drive when returned by Augstein.

    What does the case “one of the most important modern tests for the fundamental concepts of contract law and addresses each element of contract formation”? Don’t see it.

  8. T.R. says:

    Actually, the piece is very clear. It said that what Ryan Leslie said could have been true. I’ve seen the depositions and there’s lots more that could have been told in this article that would show that there are many reasons the case could be appealed. for instance, a computer sales associate (not a tech person) gave evidence that NYLAttorney goes on about.And the judge’s instructions to the jury: W R O N G.

    This was a great article.

    Though I agree that a Harvard grad should know better and should back up his work.

  9. J. Q. Commonsense says:

    Interesting opinion…thank you for posting the link, but……….

    NYLAttorney, looks like you need to reread the opinion.

    To answer your question: “However, Najafi, one of Leslie’s assistants, stated that he took the hard drive to a technician at TekServe and consulted a few other professionals, who all said the drive could not be repaired. Najafi Dep. at 11, 52–53.There is also a dispute regarding the sequence of events that surround the return of the drive to Avastor, the manufacturer. Najafi stated that he contacted Avastor and requested data retrieval but was later contacted by Avastor and told that the data could not be recovered. Pl.’s 56.1 ¶ 93;Def’s Resp. to Pl.’s 56.1 ¶ 89.”

    Looks like the manufacturer didn’t want to get sued for destroying a million dollar hard drive by accident. I’d be really curious to know what Najafi and Avastor said on the witness stand.

    Since the judge says the defendant’s team was negligent, isn’t a mandatory adverse inference too harsh of a sanction? That’s for people who purposely destroy evidence, clearly not the case here based on that opinion. It doesn’t even look like there was any proof that the hard drive that the man gave back the same hard drive that was stolen. And if Leslie says he couldn’t get any data off of it, how could anyone ever know? Way too harsh of a sanction…that doesn’t “level the playing field” NYLAttorney, it guts the defense. Burden shifting.

    As far as the data being on the drive: Did the finder even know if the “pages were in the book” when he found it? Did he say that he saw the music files? The NY Post says, the jury sent a note — ““We feel the $1 million is too high,” the jurors said in a note to Judge Harold Baer Jr. The judge told them that they had to choose to give the million — or nothing.” http://www.nypost.com/p/news/local/mil_or_bust_u0EcDbG1GNRnKFZ5x4NynI

    Seems to me if they believed the music was on the hard drive or could have been recovered that they should have had no problem awarding the money. Why send that note? Looks like they thought the man deserved something and they wanted to give him something, but not one million for a broken hard drive.

    And Iris – You did a convenient job of copy and pasting and [.......]‘ing the “quote” above. You have………..zero credibility.

  10. Ryan Morrison says:

    NYLAttorney,

    Thank you for taking the time to read my article and respond. At the end of the day, the court agrees with your position so I acknowledge I am certainly fighting an uphill battle by arguing the other side.

    That said, I take issue with a few of your points. First, you cannot say nothing is complicated here. This is law, things are always complicated. Especially when we are dealing with a loosely worded YouTube video and a German citizen who read about the offer after it had been translated. Not to mention that every part of this story sounds like something out of a bad Guy Ritchie movie. (Man walks dog in a downpour and decides to investigate a garbage bag he finds in the woods? I’d walk out of the theater if someone tried selling me that plot.)

    The decision also speaks against your point that “nobody says the manufacturer lied.” Leslie’s intern (or assistant, or whatever title he has) said exactly that, and Leslie admits that the intern was the one handling this even though the decision says Leslie himself did not dispute the manufacturer’s words.

    I also disagree with your statement, “let’s face it, data is always there.” That couldn’t be further from the truth. I’ve worked in the tech field for a good portion of my life and sometimes files really are gone. For good. Poof.

    Using the Turner case as justification, which the judge here did, the court makes what is, in my opinion, a strong leap by finding a sanction of adverse inference. This is something that should have clearly been left for the jury to decide as it IS the case. If Leslie received a laptop with the files and deleted them himself, then it’s a surefire win for Augstein. Why even hold the trial at that point?

    Yet, even WITH that, the jury asked the judge to give a lesser award. It is a shame that the jury was unable to serve the justice they determined to be fair, even after being stripped of their ability to determine fact.

    I have no dog in this race. My life does not change in the slightest regardless of who wins the case. But I hate to see people in positions of power use their authority to overstep. Here I believe the judge did that.

    Respectfully,

    Ryan Morrison

  11. NYLAttorney says:

    The law is not always complicated. It may seem so when people use straw man arguments and distractions, which is what i see Leslie having done here. In this caee the contract issue is simple.

    I did a little more research. The You Tube video is only loosely worded if you want it to be, and the reward was announced in German news, in German. Don’t see Leslie arguing it was ambiguous. Again, read the decison. Also, if you look at the briefs on PACER, you will see that the the intern did not say that the manufacturer lied. In fact, he had NO explanation for why his recollection was different than the documented evidence produced by the manufacturer. And guess what, the intern never testified at trial! Wonder why Leslie would not call him? Whatever the reason, the jury had only the manufacturer.

    As for data on the hard drive or laptop, trials deal with evidence. Also did not see Lelsie present an expert on this issue. According to the briefs on the summary judgment motion, the manufacturer testified that the data was almost certainly there and could have been recovered if asked. Nobody asked the manufacturer to search for data — at least according to the contemporaneous documentary evidence. (The idea that the manufacturer would lie would require a further leap of logic that it would falsify its own records.). Leslie had one million (dollars) reasons for not having the company search for data, and the same one million reasons to get rid of the hard drive before someone asled him for it in a litigation he knew was coming. The jury heard, I assume, the testimony of the manufacturer that in its experience the data would be recoverable.

    Also, the hard drive — the MOST CRITICAL piece off evidence in the case — was not destroyed until 8 months after the it was retuned., and just weeks after the plainitiff’s lawyer sent a demand letter. That is textbook (I.e., simple) spoliation. If Leslie deleted the files himself, the proper sanction would have been dismissal of the defenses, which is what plaintiff sought. This was negligent, at best, and Leslie was saved by the adverse inference. He coild get to the jury. Sanctions issues — compliance by parties of their obligations under law — is always for the judge, and not the jury.

    As for the amount of the award, I absolutely get it. Lelsie set the price. He said one million dollars. Juries are duty bound to gap follow evidence. What would the system be if juries did not do that?

    Finally, you should not be so quick to think that a federal judge engages In an abuse of power. This judge could have granted summary judgment against Leslie. He did not, and Leslie had his chance to prove his case at trial. The assistant, or any of the local companies the briefs say he testified that he visited coluld have been called. I don’t see any indication that the judge — in his abuse of power — kept them from taking the stand. Since you seem to have spoken to the Leslie attorney, did you ask him about that?

    All that said, I appreciate the article and debate,. Leslie says he will appeal. I can’t see it. Would not be surprised if he decides not to throw good money after bad. We shall see. He is a smart man. Yet if there is an appeal, perhaps I will be proven wrong. If there is an appeal, we can continue this dialogue.

  12. Seamus says:

    As anyone who followed this trial knows, Leslie’s first lawyer did a terrible job pretrial. That’s why he had to change lawyers only a few weeks before trial. Lots of what was admitted and what wasn’t, who was deposed and who wasn’t, is because of Leslie’s first lawyer.

    That’s the justice system, but that doesn’t mean Leslie got a ‘fair’ trial. He didn’t.

  13. NYLAttorney says:

    LOL.Seamus … let me get this right. Leslie’s first lawyer who was not at trial is responsible for what was “admitted and what was not admitted” at trial. Was that lawyer also responsible for not calling any witnesses? For not calling the intern?

    Think for a moment … How would the summary judgment decision had turned out without the intern’s testimony? Leslie’s defenses would have been struck and summary judgment would have been entered against him.

    The whole case revolved around the hard drive. As far as I can tell, everyone who touched the hard drive was deposed.. If Leslie’s lawyer did not put the intern on the stand, it must have been because he knew nobody would believe him/her.

    Also, look at PACER. Leslie’s first lawyer (maybe second) sought to get out many months before trial. Not sure why he waited so long to hire a new one. Why blame the lawyer when the facts and law are against you. Seems the attorneys all did as good a job as possible with bad facts — leslie made the Leslie’s team dumped the hard drive. Hat is w

  14. NYLAttorney says:

    Oops … Pushed send too quickly ….

    Also, look at PACER. Leslie’s first lawyer (maybe second) sought to get out many months before trial. Not sure why he waited so long to hire a new one. Why blame the lawyer when the facts and law are against you. Seems the attorneys all did as good a job as possible with bad facts — Leslie made the million dollar offer and repeated it on MTV, and Leslie’s team dumped the hard drive. That is why he lost.

    Again, can’t wait for appeal.

  15. Seamus says:

    I have a feeling, NYLAttorney, that you hope there’s not an appeal, LOL. You like the verdict just the way it stands. A little too much for an impartial observer, I’d say!

  16. NYLAttorney says:

    Just assumed there was an appeal, as the notice of appeal is on PACER, and no satisfaction of judgment. When I google the case and the interest award, the attorney says that he did not fight the motion he is appealing. Seems you may have inside track Seamus ….” As anyone who followed this trial knows, Leslie’s first lawyer did a terrible job pretrial. That’s why he had to change lawyers only a few weeks before trial. Lots of what was admitted and what wasn’t, who was deposed and who wasn’t, is because of Leslie’s first lawyer.”

    Perhaps this is the end of the story.

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  18. iris says:

    Guess what? Appeal dismissed apparently on procedural grounds.

  19. […] Blog postings appear frequently.  For example, LASIS posted ten articles between October 1 and October 19, 2013.  The “interesting” articles tend to receive the most comments from the blog’s readers.  For instance, an article about a famous R&B producer-musician who reneged on a $1,000,000 reward to the person who recovered his invaluable hard drive received 18 comments [Ryan Morrison, Quite Possible, A Bad Rap, Legal As She Is Spoke (February 11, 2013).] […]

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