Contract disputes? Sure. Missed rent payments? Yeah. An asinine squabble over the name and web address of your company? That’s the story of yet another bizarre and oddly fascinating legal dispute for startup automaker Faraday Future that, given its relatively small amount of at least $210,000, could point to rumored financial struggles.
In November, a 10-page complaint was filed against Faraday in San Francisco County Superior Court by a company that essentially acts as a broker for acquiring domain names. The filing describes what seems to be the genesis of how FF wound up with its name, as well as the company’s website, and pins a $210,000 claim on the start-up for allegedly failing to pay the broker, Domains Cable, a commission for the deal to purchase FF.com.
The complaint asks for economic damages in an “amount to be proven at trial but not less than $210,000, representing a 15 percent commission on the $1,400,000 transaction,” along with miscellaneous costs and expenses of the suit.
A spokesperson for Faraday told Jalopnik “we do not comment on litigation matters.” The company, in a brief response filed last month in court, denied the allegations and asked a judge to dismiss the complaint and enter a judgment in favor of FF.
But John O’Connor, the plaintiffs’ attorney, said the complaint is a straight-forward dispute between a broker and a client.
“[Faraday] went around the broker, there’s nothing mysterious or elusive about it,” he told Jalopnik. “I don’t think it requires the kind of discovery that one would get in an antitrust suit or an intellectual property suit. This is a pretty straightforward case.”
In early 2015, the complaint—which can be viewed below—says, Faraday’s former head of corporate communications, Marcus Nelson, reached out to a longtime acquaintance regarding the purchase of a “suitable domain name” for Faraday Future.
According to the complaint, Nelson—who declined to comment—and acquaintance Suraj Rajwani entered into an “oral agreement,” where Rajwani would locate and purchase a domain name for Faraday. The complaint cites several alleged text messages between the pair, including one from April 2015, where Nelson told Rajwani that Faraday was operating in “stealth mode,” had a tentative name of “FF,” and that his first task was to name the company.
Soon after, the two batted around potential names for the automaker.
In a follow up text message on April 6, 2015, Mr. Nelson asked Mr. Rajwani about domain names that would make a great car company name. In that regard, Mr. Nelson suggested the name “Nova” as a potential option. Mr. Rajwani responded by asking what Faraday Future’s budget was for the purchase, and also indicated that he would follow up and provide a list of possible domain name options. The parties also discussed the possibility of purchasing other domain names, including amber.com, but subsequently decided not to purchase the Nova domain or amber.com.
A couple days later, the complaint says, Nelson and Rajwani discussed a fee for brokering a domain deal, and Nelson stated that Faraday Future likely wouldn’t offer equity as a form of payment. So he suggested that Rajwani should take “a fee on top” of the potential purchase, according to the complaint.
Rajwani allegedly followed up the next day with a list of potential domain names; Nelson responded in a text message with criteria for a suitable URL. According to the complaint, Nelson said:
Criteria is this: The company name is registerable
The trademark is registerable
The domain name (companyname.com) is registerable
The name should be easy to remember, good for internet marketing, without any negative connotations in English and Chinese
Nelson allegedly went on to say that Faraday needed a “quality” domain name that begins with F, better yet, “if it has two F’s in it.”
About a month later, according to the complaint, Rajwani told Nelson he believed that FF.com could be purchased for $1 million. After mulling it over—apparently with his supervisors, the complaint says—Nelson allegedly authorized Rajwani in writing to make an offer of $400,000 “immediately,” and asked: “think you could make that happen?”
Turns out, FF.com was owned by Bank of America. And if you’re wondering why the banking giant owned the FF domain, Nelson apparently did, as well. He allegedly told Rajwani: “wonder why they had it.”
Rajwani alleges in the complaint that he began to negotiate with Bank of America for the domain, first offering $150,000. The banking institution counter-offered with a slightly higher $2.5 million.
According to the complaint, Rajwani continued negotiations until mid-July 2015, when he informed Nelson in a text message that he brought the cost of FF.com down to $1.5 million. It’s here that the dispute between both sides appears to begin. From the complaint:
In the midst of negotiating for the purchase of FF.com from Bank of America, and after Mr. Rajwani had been working on the transaction for months, Mr. Nelson suddenly informed Mr. Rajwani that he had gone around him and was negotiating for the sale of FF.com.
In early August, Nelson allegedly told Rawjani that FF went directly to Bank of America to purchase the domain for $1.4 million and that he wouldn’t receive a commission. (Bank of America didn’t immediately respond to a request for comment, but a WHOIS history search confirms the company owned the FF.com domain until September 15, 2015.)
Nelson—who departed FF in October 2015—allegedly told Rajwani the deal transpired in such a fashion because his “bosses were getting freaked out that things were taking too long.”
Rajwani’s complaint then points to a statement on Nelson’s LinkedIn page that said, while he was running communications for FF, he negotiated and acquired “a new domain purchase (TBA) — saving $400,000,” which Rajwani claims “that much of these alleged savings resulted” from him “not being paid his commission on the transaction.” Nelson’s current LinkedIn profile now mentions that he negotiated and acquired the “new FF.com domain purchase.” (It wasn’t immediately clear where the $400,000 figure originated.)
For Faraday, the domain name squabble comes as questions continue to mount over the company’s viability. Last month, a $1.8 million suit was filed by a well-known special effects company in the car industry, and FF received a lukewarm response to a reveal presentation at the CES conference in Las Vegas for its first production vehicle. The company has said it’s planning to continue construction at a proposed $1 billion factory in Nevada sometime in the coming weeks.
O’Connor said his clients’ claim is an “indication of a firm that’s on a very tight budget.”
“One would not expect this of an expanding firm,” he told Jalopnik. “One would expect this behavior by a firm that is perhaps troubled.”