Kleiman v. Wright: Jury Deliberations Continue in Week 2

The jury in Ira Kleiman’s lawsuit against Craig Wright asked questions during their first day of deliberations, but did not come to a decision on any of the claims.

AccessTimeIconNov 30, 2021 at 12:47 a.m. UTC
Updated May 11, 2023 at 4:11 p.m. UTC
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MIAMI — A federal jury has not yet reached a verdict after deliberating Monday in the federal civil trial of Kleiman v. Wright, which is now in its fourth week. However, a question posed by the jury suggested they are not comfortable valuing bitcoin.

“Many of us do not feel comfortable adjcating [sic] an amount,” they wrote in a note that was read aloud Monday afternoon by U.S. District Judge Beth Bloom, of the Southern District of Florida.

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  • The civil case pits Dr. Craig Wright, an Australian man who claims to have invented bitcoin, against Ira Kleiman, the brother of the late Dave Kleiman, a computer forensics expert from South Florida. The jury began deliberating the case last week.

    There are two plaintiffs in the case: Dave Kleiman’s estate (of which Ira is the personal representative) and W&K Info Defense Research, LLC, a Florida limited liability company incorporated by Dave in 2011. (Ira is currently listed as a manager of the company.) Plaintiffs allege that Dave and Wright had a partnership to invent and mine bitcoin, and thus the estate and the business are entitled to bitcoin and intellectual property created under the partnership.

    Plaintiffs have asked for $36 billion (representing the value of bitcoin at issue), plus $126 billion (representing the value of intellectual property at issue, though this amount could be tripled if the jury finds for civil theft) and $17 billion in punitive damages.

    The jury deliberated most of the day, but at 2:17 p.m. ET asked for a simple definition of the word “conferred.” The word is referenced in jury instructions, which explain that both plaintiffs in the case have asserted claims of unjust enrichment against Wright.

    To prevail on this count, plaintiffs would need to have proven certain points by a preponderance of the evidence: that David Kleiman and/or W&K conferred a benefit on Wright; that Wright voluntarily accepted and retained that benefit; and that it would be inequitable or unfair for Wright to retain the benefit without paying the value of the benefit to the Estate of David Kleiman and/or W&K.

    The jurors also sent a note asking, “How much of intellectual property does W&K currently have under the estate? Do we need to select an amount for bitcoin and intellectual property?”

    They also asked, “When answering yes to a question requiring an amount, must we follow a certain formula or can we leave it blank? Many of us do not feel comfortable adjcating [sic] an amount.”

    The judge and attorneys for both sides debated how to answer, with the assumption that jurors had misspelled “adjudicating.”

    Ultimately, Bloom told the jurors that all evidence has been received, that they should rely on their collective memories and that they should refer to jury instructions, which state, “If you find for the Estate of David Kleiman and/or W&K on any of its claims, you must consider the matter of damages. Generally, you should award an amount of money that the preponderance of the evidence shows will fairly and adequately compensate the Estate of David Kleiman and/or W&K for its damages.”

    Finding damages

    The instructions describe particulars for each count alleged in the complaint.

    For the count of breach of partnership (which is alleged by the estate but not by W&K), if the jury finds a partnership existed it must determine the quantity of any bitcoin, if any, owned by the partnership, the current value of that bitcoin and award the estate 50% of that value unless the jury finds that Kleiman and Dave Wright agreed on a different amount. Likewise, the jury must determine the same for intellectual property.

    For breach of fiduciary duty (which is alleged by W&K, but not by the estate) , the jury should award W&K damages “calculated as of the time the Defendant breached his fiduciary duty to W&K; for unjust enrichment, either plaintiff would be “entitled to an amount of money equal to the value of the benefit conferred upon the Defendant and attributable to his wrongdoing.”

    The other counts are alleged by both parties. For the count of conversion, the jury should award the estate or W&K the quantity of assets, if any, that were converted and their value. “Plaintiffs are entitled to the highest value of the assets between the time of conversion and the date of your verdict,” the instructions say.

    For civil theft, the jury is to award “an amount of money, if any, that the clear and convincing evidence shows are the actual damages sustained by the Estate of David Kleiman or W&K.” Again, “the highest value of the assets between the time of conversion and the date of your verdict” is to be used.

    For either fraud or constructive fraud, instructions say the jury should award the estate or W&K “the amount of any damages calculated as of the time the Defendant committed the fraud or the constructive fraud.” For unjust enrichment, either plaintiff would be “entitled to an amount of money equal to the value of the benefit conferred upon the Defendant and attributable to his wrongdoing.”

    If the jury finds for the estate or W&K on the counts of conversion, fraud and/or constructive fraud claims, it must decide whether to award punitive damages – meant to punish and deter others from similar actions.

    These are warranted against Wright if the jury finds “by clear and convincing evidence that he engaged in intentional misconduct or gross negligence, which was a substantial cause of damage to the Estate of David Kleiman or W&K.”

    Intentional misconduct is defined to mean that Wright had “actual knowledge of the wrongfulness of the conduct and that there was a high probability of injury or damage to the Estate of David Kleiman or W&K and, despite that knowledge, the Defendant intentionally pursued that course of conduct, resulting in injury or damage.”

    “Gross negligence” means the Defendant’s conduct was so reckless or wanting in care that it constituted a conscious disregard or indifference to the life, safety or rights of persons exposed to such conduct.

    The jury can decide the amount of punitive damages. It was instructed to consider:

    • The nature, extent and degree of misconduct and the related circumstances, including “whether the wrongful conduct was motivated solely by unreasonable financial gain; whether the unreasonably dangerous nature of the conduct, together with the high likelihood of injury resulting from the conduct, was actually known by the Defendant;whether, at the time of damage, the Defendant had a specific intent to harm a Plaintiffand the conduct of the Defendant did in fact harm a Plaintiff”; and
    • The financial resources of the Defendant.

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     Deirdra  Funcheon

    Deirdra Funcheon is a freelance journalist based in Miami.


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