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Case 3:16-cv-00999-HEH Document 27 Filed 04/06/17 Page 1 of 24 PageID# 276




CO., LTD. )
Plaintiff, )
v. ) Case No. 3:16-cv-999-HEH
Defendants. )

Defendant, Bennett Fidlow (Fidlow), by counsel, pursuant to Rule 13(b) of the

Federal Rules of Civil Procedure (the Rules), files the following counterclaims against

Plaintiff, Kylin Network (Beijing) Movie & Culture Media Co., Ltd., a Chinese

Corporation (Kylin).

Fidlow seeks compensatory damages, statutory damages (three-fold the damages

sustained), and punitive damages in an amount not less than $3,350,000.00, plus

prejudgment interest on the principal sum awarded by the Jury from December 29, 2016

to the date of Judgment at the rate of six percent (6%) per year, plus attorneys fees

pursuant to 18.2-500 of the Virginia Code (1950), as amended, plus costs incurred

arising out of Kylins defamation per se, insulting words, and business conspiracy.

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1. Fidlow is a citizen of Virginia. He is an attorney, licensed and in good

standing with the Bars of both Virginia and California. Fidlow is an entertainment

lawyer. He has been practicing entertainment law for over 28 years, specializing in the

areas of film, television, home entertainment, Internet & new media, and live theatre.

Fidlow provides advice to both corporate and individual clients on legal and business

matters relating to rights acquisition, development, financing, production, marketing,

distribution and other exploitation. His clients include studios, broadcast & cable

networks, management & talent agencies, and A-list talent, as well as start-up companies,

low-budget indie productions, and individual executives, producers and artists. Sample

clients include Sony Pictures, Columbia Pictures, 20th Century Fox, Universal Pictures,

MGM, United Artists, Screen Gems, Republic Pictures, Newmarket Entertainment,

Franchise Pictures, Mandalay Entertainment, Warner Bros. TV, Fox Family, Disney

Channel, USA Cable, Columbia Tristar Home Entertainment, Universal Home

Entertainment, Sony Worldwide Marketing, Playboy Entertainment, Clear Channel

Communications, Metropolitan Talent Agency, Polimedia Management, Dave Matthews

ATO Pictures, John Singleton, Vidal Sassoon, Tom Sizemore, Cloris Leachman, Peter

Fonda, writer and producer Daniel Pyne, book authors Sam Kashner, Nancy

Schoenberger, David Robbins, Dean King, NFL starter Evan Mathis (with the Eagles),

and many other high-profile companies and individuals. Fidlow also assisted in the

NBC/Vivendi Universal merger, the Sony acquisition of MGM, and in the sale of

Miramax by Disney. He is known for his work on such films as The Score, Hustle &

Flow, and Memento. Fidlow graduated from the Carnegie-Mellon University, Pittsburgh,

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PA, with a B.F.A., Theatre Production. He attended Columbia University in New York

City, where he earned his M.F.A. in Theatre Management. Fidlow obtained his Law

Degree (JD) from Hastings College of the Law in San Francisco, CA. He taught

Entertainment Law at the University of Richmond School of Law from 2006 2015. He

has published several articles and is a frequent guest speaker at universities and

entertainment industry seminars. He has served on the Board of Directors of the Central

Virginia Film Office, the Barksdale Theatre, the Childrens Museum of Richmond, the

Podium Foundation (inner-city high school literary program), and on the committees for

the Virginia Film Festival and the DC Independent Film Festival. Fidlow is highly

recognized by his peers, being the only Virginia Super Lawyer exclusively in the field

of Entertainment for the past eight (8) years. He is also in Whos Who Legal for

Entertainment, and is highly rated by Martindale-Hubbell. Until the campaign of public

defamation undertaken and orchestrated by Kylin and its agents in 2016, Fidlow enjoyed

an untarnished reputation.

2. Kylin is, upon information and belief, a Chinese corporation with a

principal place of business in Beijing, China.

3. Kylin operates and communicates through and using multiple inter-related

affiliates, agents, instrumentalities, alter egos, and stooges, some of whom masquerade as

thinly disguised separate and distinct corporations. Kylins alter egos, instrumentalities

and general agents and managers include James Pang a/k/a Hong Pang (Pang), Leo Shi

Young (Young), Kylin Pictures, Inc. and Kylin Pictures International, Inc.

(collectively, Kylin Pictures).

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4. Kylin and Kylin Pictures share managing agents, officers and directors,

share offices in Los Angeles, California, commingle assets, and undertake a common

business. Pang and Young are the directors of Kylin and Kylin Pictures. Pang is

President of Kylin and CEO of Kylin Pictures. Young is Secretary and CFO of Kylin

Pictures and is Head of Kylins U.S. Operations and a general manager and consultant

employed by Kylin.

5. Pang holds a Masters Degree in Arts Education and has been involved in

the film production and financing industries for over twenty (20) years. Young holds an

MBA from Fordham University (2005), an MA from the School of the Art Institute of

Chicago (1985), and a BA from Tsinghua University of Beijing (1982). Prior to Kylin

and Kylin Pictures, Young was the president and CEO of a failed solar product

manufacturer, Solar Enertech Corp. (OTC:SOEN).

6. At all times material to this action, Young and Kylin Pictures were acting

as agents, alter egos and instrumentalities of Kylin within the scope of their employment

and at the direction of Kylin.

Jurisdiction and Venue

7. The United States District Court for the Eastern District of Virginia has

subject matter jurisdiction over this action pursuant to 28 U.S.C. 1332. The parties are

citizens of different States and the amount in controversy exceeds the sum or value of

$75,000, exclusive of interest, costs and fees.

8. Venue is proper in the Richmond Division of the United States District

Court for the Eastern District of Virginia because Kylin filed this action in this Court and

is otherwise subject to personal jurisdiction in Virginia.

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Statement of the Facts

9. On or about April 5, 2014, Fidlow agreed to represent and provide

transactional legal services to Bliss Media Ltd. (Bliss) in connection with obtaining the

rights to produce Birth of the Dragon (BOTD), a film regarding deceased actor and

martial artist, Bruce Lee.

10. At all times relevant to this action, Bliss was owned and operated by Wei

Han (Han).

11. Bliss agreed to collaborate with Kylin on the financing and production of


12. On June 20, 2014, Bliss and Kylin executed a partnership agreement

evidencing their collaboration (the Partnership Agreement).

13. Fidlow prepared the Partnership Agreement as counsel for Bliss.

14. Fidlow did not represent Kylin in connection with the preparation or

execution of the Partnership Agreement.

15. The Partnership Agreement is in English.

16. Pang speaks fluent English. He spoke at the US-China Co-production

Film Summit held in Los Angeles on November 2, 2015. He has been interviewed by

English-language publications, including, and has answered questions

in perfect, unbroken English. See, e.g.,


17. In the November 8, 2016 interview with, cited above,

Pang described Kylin as follows: Kylin is a general partner of a fund company in China.

They use the fund to invest in movies and the fund also has LPs, limited partners, from

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some banks, from some VIP clients. The company has four funds for different purposes.

One fund is to invest in both movies and TV series. Another fund is made for three

movies. Theres another fund that is for P&A only. The fourth is for acquisitions.

18. Paragraphs 1, 2 and 3 of the Partnership Agreement provide as follows:

19. On or about June 25, 2014, Fidlow and Kylin executed a Legal Services

Agreement, pursuant to which Kylin engaged Fidlow to represent Kylin with respect to

the BOTD project.

20. The Legal Services Agreement is in English.

21. Paragraph 12 of the Legal Services Agreement states as follows:

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22. The Legal Services Agreement provides as follows:

23. Pang signed the Legal Services Agreement on behalf of Kylin.

24. From June through August 2014, Fidlow engaged in negotiations on

behalf of the Bliss-Kylin Partnership with QED Pictures, LLC (QED Pictures) for the

rights to BOTD.

25. During the negotiations, QED Pictures CEO, William H. Block

(Block), represented to Fidlow, inter alia, that QED Pictures owned the rights to


26. Fidlow reasonably relied on Blocks representations.

27. On August 6, 2014, the Bliss-Kylin Partnership and QED Pictures

executed a Production Financing Term Sheet (Financing Agreement) in connection

with BOTD.

28. The Financing Agreement is in English.

29. Pang signed the Financing Agreement on behalf of Kylin:

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30. Pang read the Financing Agreement before he signed the contract on

behalf of Kylin.

31. In paragraph 3 of the Financing Agreement, Bliss and Kylin (jointly

referred to as the Investor) agreed to finance production of BOTD in the total sum of

$10,000,000.00 (the Investor Contribution).

32. The Investor Contribution was payable as follows:

The Investor Contribution shall be funded in mutually agreed installments which

will be set forth in the Cash Flow Schedule; provided that the first installment
shall be in the non-refundable (but recoupable) amount of One Million U.S.
Dollars (US $1,000.000) (the Advance,,) and delivered to Producer within the
later to occur of (i) fifteen (15) days following full execution of this Term Sheet
and its attachments and (ii) delivery of the Dorgan Amendment and the R&W
Amendment to Investor, and the final installment shall be funded no later than
five (5) business days prior to the scheduled commencement of principal
photography, subject to the closing of all required financing agreements,
including the completion bond. Notwithstanding the foregoing, satisfaction of the
requirements of Paragraph 6(a) through 6(g) below are a pre-condition to funding
the remainder of the Investor Contribution after payment of the Advance.

33. Paragraph 6(f) of the Financing Agreement provides as follows:

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34. Paragraph 12 of the Financing Agreement provides as follows:

35. In paragraph 15(b) of the Financing Agreement, QED Pictures (the

Producer) made the following representations and warranties:

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36. Paragraph 16 of the Financing Agreement provides as follows:

37. The Financing Agreement negotiated by Fidlow on behalf of the Bliss-

Kylin Partnership fully protected Bliss and Kylins legal rights and interests.

38. Kylin paid $1 million to QED Pictures pursuant to and in reliance upon

the terms of the Financing Agreement.

39. Kylin claims that it also paid $1 million to Bliss, pursuant to the terms of

the Partnership Agreement, for the assistance Bliss provided in obtaining the rights to


40. No part of any money paid by Kylin to Bliss was ever paid or distributed

to Fidlow.

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41. Kylin claims that in February 2015, Kylin was advised by a former

principal of QED Pictures that QED Pictures never held any rights in BOTD, and the

actual rights holder was a separate entity called QED Holdings, LLC (QED Holdings).

42. On April 1, 2015, QED Holdings filed an action against Block, QED

Pictures and QED Pictures International (Case 2:15-cv-02390-GW-JEM) in the United

States District Court for the Central District of California (the QED Holdings Action).

43. In its complaint in the QED Holdings Action, QED Holdings alleged as


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44. On April 2, 2015, after he learned about the QED Holdings Action and in

order to protect the Bliss-Kylin Partnerships interests in the BOTD project, Fidlow

arranged for the filing of UCC-1 Financing Statements with the California Secretary of

State and the Delaware Secretary of State (UCC-1 Statements).

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45. On April 8, 2015 (April 8 Correspondence), outside counsel for Kylin,

Edward S. Labowitz, Esquire, notified Bliss that Kylin was terminating the Partnership

Agreement and the Financing Agreement based on alleged breaches by Bliss. In the

April 8 Correspondence, Kylin alleged misconduct, breaches of fiduciary duty and

breach of contract against Bliss and Fidlow, and demanded return of the $1.0 million

paid to Bliss under the Partnership Agreement.

46. In truth, Kylin objected to the UCC-1 Statements because Kylin had

secretly entered into a financing agreement with QED Holdings. Kylin intended to

breach the Partnership Agreement, and cut Bliss out of any further participation in the

BOTD project.

47. On April 17, 2015, Fidlow responded to the April 8 Correspondence on

behalf of Bliss (April 17 Correspondence). In the April 17 Correspondence, Fidlow

acknowledged receipt of the April 8 Correspondence, denied all allegations in the April 8

Correspondence, and informed Kylin that Bliss would not refund any amounts Kylin paid

to Bliss under the Partnership Agreement.

48. By letter dated July 15, 2015 to Fidlow (the July 15 Correspondence),

counsel for Kylin responded to Fidlows April 17 Correspondence. Kylins counsel

demanded the following from Bliss and Fidlow: (a) that Bliss confirm in writing

termination of the Partnership Agreement and refrain from any involvement in BOTD;

(b) immediate return of the $1 million fee paid by Kylin to Bliss under the Partnership

Agreement; (c) that Bliss terminate, release, or withdraw the UCC-1 Statements; and (d)

that Fidlow return all fees Kylin paid to him for legal services in connection with BOTD.

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49. On August 18, 2015, Kylin reiterated its April 8 and July 15, 2015

demands that Fidlow terminate the UCC-1 Statements and informed Fidlow that Kylin

intended to commence proceedings against Fidlow and others if Fidlow did not

immediately terminate the UCC-1 Statements.

50. By correspondence dated August 22, 2015, Fidlow responded to Kylins

August 18, 2015 correspondence by, inter aliai, denying Kylins false allegations.

51. On September 8, 2015, Kylin filed an action in California against Fidlow

(the Kylin California Action), alleging claims of legal malpractice, breach of fiduciary

duty, and fraud.

52. On May 16, 2016, ALPS Property and Casualty Insurance Company

(ALPS) filed an action against Fidlow, Kylin and others in the United States District

Court for the Eastern District of Virginia (the ALPS Action), seeking, inter alia, a

declaration that certain insurance policies issued by ALPS did not afford coverage to

Fidlow for the Kylin California Action.

53. On August 10, 2016, Pang and Young attended a mediation in Los

Angeles, California, between Kylin and Fidlow. Prior to the start of the mediation, a

process server served Pang with the complaint filed by ALPS in the ALPS Action. The

mediation was not successful.

54. At a September 22, 2016 hearing in the Kylin California Action, the

presiding judge enforced the forum selection clause in the Legal Services Agreement and

ordered that the Kylin California Action be stayed until January 18, 2017 for plaintiff

(Kylin) to proceed with its case in Richmond, Virginia.

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55. On September 28, 2016, Bliss and Kylin entered into a Confidential

Settlement Agreement and Mutual Release. Pang signed this agreement on behalf of

Kylin. Upon information and belief, this agreement is in English.

56. On October 25, 2016, ALPS moved for summary judgment in the ALPS

Action on its coverage claims.

57. Fidlow filed a non-opposition to ALPS motion for summary judgment.

58. On November 28, 2016, ALPS requested the Clerk to enter default against

Kylin as a result of Kylins failure to timely file a response to ALPS complaint.

59. On December 1, 2016, the Clerk entered default as to Kylin.

60. After the Clerk entered default as to Kylin in the ALPS Action, ALPS

moved for the entry of default judgment.

61. On December 9, 2016, Kylin finally appeared in the ALPS case. Kylin

filed a motion to quash service of process, motion to dismiss for lack of personal

jurisdiction, and a motion to set aside the Clerks entry of default. Kylins motions were

subsequently denied by the Court, and default judgment was entered against Kylin on

ALPS coverage claims.

62. On December 23, 2016, Kylin filed a complaint against Fidlow in the

United States District Court for the Eastern District of Virginia, Richmond Division.

63. Not content with resolving its differences with Fidlow in Court through

appropriate judicial processes, Kylin took its ill-will for Fidlow (and Bliss) to a different


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64. In December 2016, Kylin began a very public smear campaign against

Fidlow, the purpose of which was to injure Fidlow or attempt to injure Fidlow in his

business as an attorney.

65. Pang published multiple false and defamatory statements to Young, which

he directed Young to republish to the press. Young, acting in concert with Pang, made

statements to Yiyu Yule (or Yiyu Entertainment) (Yiyu), a Chines media publisher,

with the intent that Yiyu would print and publish the malicious statements.

66. On December 29, 2016, Yiyu published an article with the title:

(the Yiyu Article).

67. A certified English translation of Yiyu Article is attached as Exhibit A.

68. The Yiyu Article focuses on the Kylin California Action and the prior

dispute that had been settled confidentially between Kylin and Bliss.

69. Among other false and defamatory statements about Fidlow, the Yiyu

Article republishes the following false and defamatory statements by Kylin and its

agents, alter egos and instrumentalities, Young and Kylin Pictures:

a. that Bliss and Fidlow introduced QED Pictures (a fake company)

to Kylin as part of a scam to defraud Kylin and get money out of Kylin and get Kylin

into a Trap;

b. that the alleged scam was undertaken to increase the position and

benefits of Bliss at the expense of Kylin, e.g., Fidlow seriously infringed upon the

interests of Kylin in order to seek benefits [for] Bliss and Kylin lost 2 million US

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dollars in vain, but Bliss made a profit of 1 million US dollars because Fidlow didnt do

due diligence on this fake company that would have revealed the truth neither before

nor after Kylin and Bliss negotiated the investment agreement, so Kylin was kept in the

dark all the time;

c. that Bliss was the clear winner behind this absurdity [the filing of

the UCC-1 Statements] Why?;

d. that Kylin had reasons to suspect that Bliss and the attorney

Fidlow deliberately concealed the true information of the fake company in the past year

and intentionally set a scam to make Kylin suffer a loss of 2 million US dollars in vain,

while Bliss received a benefit of 1 million US dollars directly from it;

e. that In the opinion of Kylin, all these actions were aimed at

improving the position/interest of Bliss in the entire transaction and help it to become the

so-called copyright owner, because this is related to the producer's credit in the future

movies, and certainly relates to the 1 million US dollars received by Wei Han

previously; and

f. that Kylin had been led into a trap that was designed carefully

with the intention of fraud since June 2014.

70. The Yiyu Article and an English (Google) translation appears on the

Internet. The article may be accessed using a simple Google Search and translated into

English using Google Translate:



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71. Since its publication, the Yiyu Article has been republished in numerous

media outlets.

72. Given that Kylin and Fidlow are involved in litigation, it is evident that

Kylins extra-judicial false and defamatory statements are intended to harm Fidlows

reputation as part of a reprehensible business strategy. This malicious business practice

is intolerable.


73. Fidlow restates paragraphs 1 through 72 of this Complaint and

incorporates them herein by reference.

74. Kylin made and published to third-parties numerous false factual

statements, which are detailed verbatim above, about or concerning Fidlow without

privilege of any kind.

75. By publishing the statements to Yiyu, Kylin knew or should have known

that its defamatory statements would be republished over and over by third-parties to

Fidlows detriment. Republication by Yiyu was the natural and probable consequence of

Kylins actions and was actually and/or presumptively authorized by Kylin. Kylin is

liable for the republication of the false and defamatory statements by Yiyu under the

doctrine announced in Weaver v. Home Beneficial Co., 199 Va. 196, 200, 98 S.E.2d 687

(1957) (where the words declared on are slanderous per se their repetition by others is

the natural and probable result of the original slander.).

76. Kylins false statements constitute defamation per se. The statements

accuse and impute to Fidlow the commission of numerous crimes involving moral

turpitude and for which Fidlow may be punished and imprisoned, including, without

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limitation fraud, conspiracy, and aiding and abetting. The statements impute to Fidlow

an unfitness to perform the duties of an office or employment for profit, or the want of

integrity in the discharge of the duties of such office or employment. Kylins statements

also prejudice Fidlow in his profession or trade as an attorney.

77. Kylins false statements have permanently and irreparably harmed Fidlow

and his reputation.

78. Kylin acted with actual malice and reckless disregard for the truth for the

following reasons:

a. Kylin consciously published the statements outside the pending

litigation, during the pending litigation, and without there being a single finding of fact or

conclusion of law by the Court to support Kylins actions.

b. Kylins statements were knowingly false, with not a shred of

supporting evidence.

c. Kylin and its agents chose to manufacture and publish false

scandalous statements and use unnecessarily strong and violent language,

disproportionate to the occasion.

d. Kylin did not act in good faith because, in the total absence of

evidence, they could not have had an honest belief in the truth of their statements about


e. Kylin reiterated, repeated and published their false defamatory

statements to the press and enticed the press to republish, out of a desire to hurt Fidlow

and to permanently stigmatize him.

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79. Kylin lacked reasonable grounds for any belief in the truth of its

statements, and acted negligently in failing to determine the true facts.

80. As a direct result of Kylins defamation, Fidlow suffered substantial

damage and loss, including, but not limited to, pain and suffering, emotional distress and

trauma, insult, anguish, stress and anxiety, public ridicule, humiliation, embarrassment,

indignity, permanent damage and injury to his reputation, attorneys fees, costs, and other

out-of-pocket expenses in an amount to be determined by the Jury, but not less than



81. Fidlow restates paragraphs 1 through 80 of this Complaint and

incorporates them herein by reference.

82. Kylins insulting words, in the context and under the circumstances in

which they were written and used, tend to violence and breach of the peace. Like any

reasonable person, Fidlow was humiliated, disgusted, angered and provoked to violence

by the insulting words.

83. Kylins false and slanderous words are fighting words, which are

actionable under 8.01-45 of the Virginia Code (1950), as amended.

84. As a direct result of Kylins insulting words, Fidlow suffered damage and

loss, including, but not limited to, pain and suffering, emotional distress and trauma,

insult, anguish, stress and anxiety, public ridicule, humiliation, embarrassment, indignity,

permanent damage and injury to reputation, attorneys fees, costs, and other out-of-

pocket expenses in an amount to be determined by the Jury, but not less than


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(In The Alternative)

85. Fidlow restates paragraphs 1 through 84 of this Complaint and

incorporates them herein by reference.

[Fidlow alleges a claim of business conspiracy in the alternative. Recognizing the

strictures of the intra-corporate immunity doctrine, Fidlow alleges business conspiracy

only if the Jury finds that Pang, Young and Kylin Pictures were not agents of Kylin

acting in the scope of their employment]

86. Fidlows business as an attorney and his reputation are inextricable.

87. Beginning in December 2016 and continuing through the present, Kylin,

Pang, Young, and Kylin Pictures combined, associated, agreed or acted in concert

together (or attempted to do so) for the express purpose of injuring Fidlow in his business

and professional reputation through the publication and republication of false and

defamatory statements. In furtherance of the conspiracy and preconceived joint plan,

Kylin and its confederates orchestrated a scheme the unlawful purpose of which was to

defame Fidlow and destroy his reputation with colleagues and clients. Acting in concert,

Kylin utilized print media and the internet to publish, republish and spread the

defamation and character assassination.

88. Kylin acted intentionally, purposefully, without lawful justification, and

with the express knowledge that they was injuring Fidlows professional reputation.

89. Kylins actions constitute a business conspiracy in violation of 18.2-499

of the Virginia Code (1950), as amended.

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90. As a direct result of Kylins misconduct, Fidlow suffered damage and loss,

including, but not limited to, injury to his business, business property, trade and

professional reputation, attorneys fees, court costs, and other damages in an amount to

be determined by the Jury, but not less than $1,000,000.00.

91. In accordance with 18.2-500 of the Virginia Code, Fidlow seeks three-

fold the damages by him sustained in a sum to be determined by the Jury, but not less

than $3,000,000.00.

Fidlow alleges the foregoing based upon personal knowledge, public statements

of others, and records in his possession. Fidlow believes that substantial additional

evidentiary support, which is in the exclusive possession of Kylin and its agents and other

third-parties, will exist for the allegations and claims set forth above after a reasonable

opportunity for discovery.

Fidlow reserves his right to amend this Complaint upon discovery of additional

instances of Kylins defamation and wrongdoing.


WHEREFORE, Fidlow respectfully requests the Court to enter Judgment against

Kylin as follows:

A. Compensatory damages in an amount to be determined by the Jury, but

not less than $1,000,000.00;

B. Three-fold Damages in accordance with 18.2-500 of the Virginia Code

in the total sum of $3,000,000.00;

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C. Punitive damages in the amount of $350,000 or the maximum amount

allowed by law;

D. Prejudgment interest at the maximum rate allowed by law from;

E. Postjudgment interest at the rate of six percent (6%) per annum until paid;

F. Attorneys Fees and Costs;

G. Such other relief as is just and proper.


DATED: April 6, 2017


By: /s/ Steven S. Biss

Steven S. Biss (VSB # 32972)
300 West Main Street, Suite 102
Charlottesville, Virginia 22903
Telephone: (804) 501-8272
Facsimile: (202) 318-4098

Counsel for the Plaintiff

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I hereby certify that on April 6, 2017, a copy of the foregoing was filed

electronically using the Courts CM/ECF System, which will send Notice to all counsel

of record, and a copy was served electronically in PDF upon counsel for the Plaintiff.

By: /s/ Steven S. Biss

Steven S. Biss (VSB # 32972)
300 West Main Street, Suite 102
Charlottesville, Virginia 22903
Telephone: (804) 501-8272
Facsimile: (202) 318-4098

Counsel for the Defendants