Porn Valley- In a very under publicized lawsuit, former Appellate Judge Richard C. Neal has ruled that Larry Flynt Productions (LFP), wrongfully terminated L.A. based Giant Mobile as its exclusive distributor of adult content for mobile telephones.

Judge Neal reached his decision after an approximately two week trial.

According to a company statement, Giant Mobile said it “had secured a long-term exclusive contract for Hustler brand adult content for mobile phones long before mainstream companies in the United States recognized the potential use of such adult content in Europe and Asia, where downloading adult fare on mobile phones is lawful.”

However Giant Mobile claimed that LFP fabricated an excuse to terminate Giant’s exclusive rights so it would be free to enter a more lucrative deal with another distributor.

According to Giant Mobile, which filed the lawsuit in April, 2006, not only did LFP renege on its two-year-old agreement with Giant, to make matters worse, Giant discovered that LFP and its new licensee were undermining Giant’s relationships with its distributors of adult mobile content even before LFP sought to terminate its agreement with Giant.

Giant believed that once Michael Klein (President, LFP Broadcasting, LLC) took over the reigns at LFP, “He went out of his way to disrupt Giant’s existing relationship with LFP, cut Giant out of the marketplace and deny it any credit for helping to establish the Hustler Mobile brand.”

Giant sought over $23,000,000 in damages based upon LFP’s failure to honor its licensing agreement with Giant. A spokesman for Giant Mobile said,
“We always thought Hustler owner Larry Flynt was an honorable guy. We trusted him. It is a shame Larry is letting Michael Klein ruin his reputation as a straight shooter. We hope that once he has all the information in front of him, Larry will do the right thing.”

The lawsuit was filed with a private arbitration organization called JAMS, which provides retired trial judges as arbitrators in business disputes.

After hearing extensive evidence, Judge Neal agreed that LFP had wrongfully terminated Giant’s exclusive distribution contract.

Sirus Ahmadi, Giant Mobile’s Chairman of the Board, stated that Judge Neal vindicated Giant Mobile’s rights in a number of ways.

“First,” noted Ahmadi, “Judge Neal saw right through LFP’s blatant attempt to fabricate excuses as to why Giant Mobile’s rights were terminated. Second, Judge Neal awarded Giant Mobile a significant sum of lost profits as a result of LFP’s breach of the Exclusive Distribution Agreement; and third, Judge Neal’s ruling supported Giant Mobile’s contention that it successfully built demand for Hustler mobile content in Europe and that is was in fact one of the most pre-eminent distributors of such content in Europe and Asia.”

According to Ahmadi, Giant Mobile was motivated to challenge LFP because it had attempted to damage Giant’s reputation in the mobile industry and Giant did not want to let Larry Flynt get away with breaching the contract “just because of Flynt’s reputation as a tough guy.”

Ahmadi expressed gratitude to his legal counsel, Russ, August & Kabat, for putting together a great case against LFP. “The challenge,” noted Ahmadi, “was to prove that LFP simply made up its mind to get out of our Agreement when it was ready to obtain a better deal from another company.

The Russ firm found former LFP employees who were willing to testify about LFP’s plan and the rest is history.”

Giant Mobile is currently distributing Digital Desire and Teravision, Inc. content throughout the US, Europe, South America and Asia. In addition, Giant Mobile develops games for mobile distribution, sub-licenses content to video game publishers for use in video games, and develops mobile distribution and billing platforms for companies seeking this type of technology.