10.26.10 7:10 PM ET
Irving Azoff Defends Ted Forstmann
I have been thinking lately about the litigation privilege while reading sensational postings on the Internet about my good friend Ted Forstmann, the chairman and CEO of IMG Worldwide, Inc. and the senior partner of Forstmann, Little & Co.
The lawyer’s litigation privilege generally provides that written or verbal statements made by attorneys during the course of a legal case are protected from civil claims. This absolute privilege allows lawyers to claim almost anything in court filings without fear that they will be sued for defamation.
There is good reason for this protection, which is an essential component of our jurisprudence system. When the litigation privilege is abused, however, serious damage can be done to a person’s reputation.
While widely recognized for his achievements in the investment industry, Teddy, as he is known affectionately among friends, is one of the most generous and compassionate people on the planet.
Indeed, Teddy will give the shirt off his back to a child in need. You won’t ever hear him talk about any of it, but here are just a few examples: Teddy visited Bosnia and had hundreds of war-injured children transported to hospitals in bordering Croatia. He worked with Nelson Mandela to provide education, shelter, and medical care to impoverished South African street children. In the United States, his annual “Huggy Bear Invitational” tennis tournament raises millions for camps for chronically ill children. Additionally, Teddy started The Children’s Scholarship Fund, contributing $50 million himself to finance scholarships for more than 100,000 children across the country.
Even if Teddy had called Federer before that match, what “inside” information could Federer possibly have served up to his friend? That he was feeling good?
So you can imagine my anger when I learned about a lawsuit filed earlier this month in Los Angeles by a person who is the antithesis of Teddy, accusing him of—among other things—being a racist and using inside information on one occasion in 2007 to bet on his friend Roger Federer.
Knowing Teddy as I do, I had no question that the allegations in the lawsuit are not only false but preposterous. When I spoke with Teddy, he was outraged and frustrated, and confirmed my belief.
Take, for example, the claim in the lawsuit that Teddy is a “racist” who made “derogative comments about blacks, Jewish people and other minorities.” Let me tell you about the Teddy I know. He adopted and raised two black South African sons now in their 20s. He is dating a well-known woman born in India whose skin is brown. There is a replica in Teddy’s office of a tin plate that Mr. Mandela used during his 27 years in a South African prison. It bears the hand-written inscription “To Teddy, Best wishes to a precious and generous friend. Nelson Mandela 19-7-99.”
The same goes for the fantastical allegations that Teddy called Federer before the men’s finals of the 2007 French Open and somehow got inside information that he then used to bet on Federer to win that match. Teddy has no recollection calling Federer before that match. But even if he did, what “inside” information could Federer possibly have served up to his friend? That he was feeling good? Teddy bet on Federer to win that match. (The amount he bet was miniscule compared to his net worth.) Federer lost the match and Teddy lost the bet. While on this subject, Teddy sponsored V.J. Singh on the PGA tour for more than 10 years, and that sponsorship was in the millions. That meant, of course, that Singh played every tournament with the name of Ted’s company on his shirt. Do you think for a moment Teddy didn’t root for him to win? Of course he did.
So who is making these wild claims? They come from a desperate and destitute individual named James Agate. I happen to know Jim Agate. Like Teddy, I played golf with him on occasion at Los Angeles-area country clubs. And, like Teddy, I was approached by Agate to do business with him.
I asked around about Jim Agate, and let’s just say what I heard was not very good. Based on that, I never did any business with him. In fact, I stopped seeing him. According to statements in the media and information provided to us, Agate has had 42 addresses in the last 20 years; has been evicted from several of those residences; has 19 judgments and liens filed against him; owes nearly $1 million in back taxes; and owns a printing firm that, until the last couple of months, had a suspended business license.
But that hasn’t stopped Agate and his attorney from taking advantage of the litigation privilege to ”leak” these lies about Teddy to the media in what I believe is nothing more than a thinly veiled attempt to get Teddy to pay Agate a large sum of money. What’s more, within a day or so after the lies in this lawsuit were republished on a popular website, Agate wrote Teddy: “I would greatly appreciate the opportunity to settle our dispute without (the lawyers’) interference…(One Internet news site) has already jumped on the story. The first amended complaint is in the public record. You should expect to be inundated with questions from…reporters.”
Had the false assertions made in this legal filing not been protected by the litigation privilege, they could have been subject to a defamation claim. (As it is, Teddy’s attorneys are in talks with law enforcement officials about whether extortion charges should be filed against Agate.) Indeed, Agate admitted in an April 2007 letter that he had been concocting lies and spreading false information about Teddy. He wrote: “I deeply regret falsely attacking your character and falsely describing your activities to many people. I apologize for all my erratic and harassing emails.”
No one should have to endure this form of harassment or injustice.
In this era of instant 24/7 news coverage, I believe the courts need to review this absolute litigation privilege and, at the very least, rein in abuses by making them extremely costly to both the lawyers and their clients.
Eleanor Roosevelt once said, “Freedom makes a huge requirement of every human being. With freedom comes responsibility.” If we are to protect our freedoms, we all need to live by Mrs. Roosevelt’s words.
Note: Ted Forstmann was a panelist at The Daily Beast’s Innovators Summit this past weekend in New Orleans.
Irving Azoff is executive chairman of Live Nation Entertainment and chairman and CEO of the Front Line Management Group, the world's largest music management firm.