US Copyright Group Lawyers Suggest They're Allowed To Lie To People They're Demanding Cash From

from the perhaps-a-court-could-disabuse-you-of-that-notion dept

Thu, Jan 27th 2011 9:55am — Mike Masnick

Back in November, we wrote about how the lawyers behind US Copyright Group, Dunlap, Grubb & Weaver, were being sued for extortion, conspiracy and fraud. While we doubted the lawsuit would get all that far, it did seem to have a slightly stronger legal basis than similar lawsuits in the past, due mainly to the fact that the producers of Uwe Boll's Far Cry screwed up with the registration of the copyright, meaning that many of those sued could not be hit with statutory damages -- and yet DGW falsely claimed they could. While defenders of these pre-settlement "pay up or we'll sue" campaigns like to claim that it's not extortion if the party demanding the cash has a legitimate legal claim, it's a lot harder to make that case when they don't really have a legitimate legal claim, but simply say they do. That sounds a lot closer to extortion.

Ars Technica notes that DGW has filed a scathing response (though, oddly, Ars Technica does not provide the actual filing). Apparently, there are two key arguments made by DGW: First, that the guy suing, Dmitriy Shirokov, has no right to sue DGW, because they're just the lawyers "simply doing their job," and you can't sue for that:

"Although an attorney may be accused of defrauding opposing parties, knowingly committing discovery abuses, lying to the court, or purposely and maliciously defaming another individual, if it takes place during the course of litigation, the conduct simply is not actionable,"

That's quite a claim, in large part because it's misleading. DGW is playing a little game of misdirection, and assuming everyone else is stupid (a dangerous game for lawyers to play). The main problem is that the actions that DGW is being sued over here are not actually "during the course of litigation." The complaint is about the "pay up" threat letter, which is not directly a part of the litigation, but an attempt to avert litigation. To claim that demanding cash based on a factually incorrect legal claim is immune from a legal complaint seems like a stretch. If DGW's legal theories are correct here, it would mean that a lawfirm could resort to outright, blatant extortion, just so long as it somehow connected it to the threat of litigation. That's a plainly ridiculous outcome that I find hard to believe a court would buy.

Separately, DGW says that no "harm" has come to Shirokov since he hasn't actually settled. That, again, seems like a questionable tactic. If true, the only way that someone illegally or unfairly threatened could sue is if they first give in to the threat. It seems that just the threat itself, if it truly was made maliciously with false information for the purpose of getting people to pay up, should constitute clear harm in itself.

Of course, not all DGW's claims seem that crazy. On the question of racketeering and other criminal complaints, DGW points out that individuals can't bring criminal complaints, only the government can. This point goes in DGW's favor, and I'm a bit surprised that Shirokov's lawyers focused on criminal statutes in their complaint. However, the complaint covers plenty of areas that aren't criminal in nature, and there's no reason why the case shouldn't move forward on those issues.

Finally, DGW, in what appears to be becoming standard practice for the firm, is demanding sanctions against Shirokov and his lawyer for filing the lawsuit in the first place. Talk about obnoxious. DGW, in this filing, appear to be claiming both that they can effectively do whatever the hell they want to threaten someone if he doesn't pay up (so long as they can claim a loose association with ongoing litigation) -- and that anyone who then claims that this amounts to a form of fraud or extortion should be punished. In other words, it seems that DGW believes it can act beyond the law in the course of litigation, and anyone who sues them over it should be sanctioned.

Hopefully, a court sets DGW straight on all of that. I'm still not convinced this case will get very far. I'd be surprised if courts, while sympathetic to those charged in such "settle or we sue" lawsuits, went to the other extreme and claimed that the efforts behind them directly broke the law. I'd be thrilled if I'm proven wrong on this, but it just seems unlikely.

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Filed Under: copyright, extortion, fraud
Companies: dunlap grubb and weaver, us copyright group

43 Comments

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Christopher (profile), 27 Jan 2011 @ 10:00am

I wouldn't be too surprised if they went that far and said that this place violated the law, to be blunt. Legal filings are supposed to be about FACTS AND EVIDENCE.... not things that go well with lies.
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Anonymous Coward, 27 Jan 2011 @ 10:08am

You have to remember that in civil proceeding,the standards are a lot lower than in a criminal case. You can be not guilty of two murders, and still be found civilly liable (thanks OJ!).

The lawyers may not lie, but the information they are working from may not be 100%. They are acting at the behest of their clients.

If you have an issue, sue the clients, not the lawyers. Good luck with it, you would have a heck of a case to prove.
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average_joe (profile), 27 Jan 2011 @ 10:10am

USCG might want to brush up on the Model Rules of Professional Conduct. http://www.abanet.org/cpr/mrpc/mrpc_toc.html

Rule 8.4(c): It is professional misconduct for a lawyer to . . . engage in conduct involving dishonesty, fraud, deceit or misrepresentation.

Rule 4.1(a): In the course of representing a client a lawyer shall not knowingly . . make a false statement of material fact or law to a third person.
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Marcus Carab (profile), 27 Jan 2011 @ 10:29am

Re:
I think you missed the key point which is that these letters are not litigation. The lawyers might be protected when they bring an actual lawsuit on behalf of their clients, but that protection doesn't extend to these threat tactics that are used to avoid a lawsuit.

Remember, these are pre-settlement letters. A lawyer can obey instructions from a client to defend and enforce copyrights, and to pursue settlements whenever possible - but I don't think they can make entirely false threats based on incorrect information. Even if their client instructed them to do so, they would still bear a legal responsibility to, you know, not break the law.
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Anonymous Coward, 27 Jan 2011 @ 10:33am

Re:
"Proceedings"?

Once again, we haven't even gotten that far. There is no court case yet.
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duffmeister (profile), 27 Jan 2011 @ 10:40am

Re:
well said Joe!

This is going to be at issue if an example isn't made of these lawyers.
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Charlie Potatoes, 27 Jan 2011 @ 10:46am

A lying lawyer? ...
Frankly I am shocked at the suggestion.
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average_joe (profile), 27 Jan 2011 @ 10:55am

Re: Re:
This is going to be at issue if an example isn't made of these lawyers.

They can be censured, sanctioned, and/or disbarred for breaking the Model Rules by their state bar, regardless of where this class action goes, if anywhere.
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The eejit (profile), 27 Jan 2011 @ 10:55am

Re: A lying lawyer? ...
LAwyers legally cannot lie in a court of law. They are, however, very much liek faeries, in that even though they cannot outright lie, the truth can be twisted and contorted into almost any position with a grain of truth.
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Anonymous Coward, 27 Jan 2011 @ 11:16am

>>Separately, DGW says that no "harm" has come to Shirokov >>since he hasn't actually settled.

under same logic one cant be arrested for attempting a crime.

since no harm is done unless its actually comminted
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HothMonster, 27 Jan 2011 @ 11:31am

filing
The response filing "MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS DUNLAP, GRUBB &WEAVER, PLLC, THOMAS DUNLAP, AND NICHOLAS KURTZ�S MOTION FORSANCTIONS PURSUANT TO FED. R. CIV. P. 11" Can be found here: http://www.scribd.com/doc/47673588/Shirokov-v-DGW-Mot-Rule-11
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Anonymous Coward, 27 Jan 2011 @ 11:34am

"On the question of racketeering and other criminal complaints, DGW points out that individuals can't bring criminal complaints, only the government can. This point goes in DGW's favor, and I'm a bit surprised that Shirokov's lawyers focused on criminal statutes in their complaint."

Actually, this is not the case. The entire process of private prosecution involves individuals bringing criminal charges against another party, and may even conduct the entire case as the prosecutor.
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Anonymous Coward, 27 Jan 2011 @ 11:39am

Rules of Professional Conduct do say that in the course of representing a client a lawyer shall not knowingly make a false statement of material fact or law to a third person. The question is how to prove that, at the time the letter was sent, the lawyers KNEW it was false. This is harder to prove then some think. Of course an attorney must have a good faith belief in the truth of whatever the attorney is asserting. I have not read the letter so I cannot discuss everything the attorney asserted with confidence. However, according to the Ars Technica article I read, it seemed to indicate that the letters stated the maximum amount available under Title 17 for each infringing act. I don�t have the letter so I can�t be sure. Given the nature of this statement and the preference for settlement (many courts try to allow broad methods when settling to avoid crowding an already overloaded docket) this lawsuit might be an uphill battle. If the letter had said that they had reason to believe that the receiver of the letter could be held liable for $150,000 for the infringement of Far Cry, then the attorney would probably have a duty to investigate the registration, but since the attorney only made a statement of fact (the maximum amount available per infringing act under Title 17) this type of act might be given some latitude. Still sounds like a distasteful act to send these letters though!

PS - Does anyone have a copy of the letter?
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Anonymous Coward, 27 Jan 2011 @ 11:41am

Re: Re: Re:
Generally, one cannot be disbarred for violation of the model rules, only the rules as adopted in the jurisdiction they are licensed in. They are often very similar however.
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Marcus Carab (profile), 27 Jan 2011 @ 11:43am

Re:
A quick google suggests that, while there may still be some leeway in the law for private prosecution, it fell out of use decades and the courts have repeatedly set down rulings that all-but squash the practice. It seems to differ a little from state to state, but for the most part it doesn't happen anymore (the last time seems to have been in 1975)

I may be missing something - if a laywer would like to correct me, please do so :) I got my info here: http://www.constitution.org/uslaw/pripro01.htm
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Marcus Carab (profile), 27 Jan 2011 @ 11:45am

Re: Re: Re: Re:
one would hope that outright lies and "dishonesty, fraud, deceit or misrepresentation" are against the rules in every jurisdiction...
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AR (profile), 27 Jan 2011 @ 11:46am

Re: Re: Re:
I vote for disbarment. Then every one who received a letter should file a class action civil suit to permanently put them out of business and take every cent they have in damages. Just like they are threatening to do to the people.
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Jeff, 27 Jan 2011 @ 12:07pm

Re: "not actionable"
"Although an attorney may be accused of defrauding opposing parties, knowingly committing discovery abuses, lying to the court, or purposely and maliciously defaming another individual, if it takes place during the course of litigation, the conduct simply is not actionable,"

I think this quote is being misunderstood, particularly the phrase "not actionable." They meant not actionable in the manner sought by the plaintiff, namely, via an unrelated lawsuit in a different jurisdiction. Clearly the judge in the DC case or the DC or VA bar associations could take action against DWG.
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jeff, 27 Jan 2011 @ 12:17pm

Re: Re: not litigation?
How is this not litigation? The plaintiff in this MA case was one of the John Doe defendants in one of the DC cases. DWG sent out the settlement letters after identifying him as one of the John Doe defendants. Even though DWG did not first name him in the DC lawsuit there was ongoing litigation to which he was linked.

Are you suggesting that a defendant must be named before settlement negotiations can take place? Isn't it possible that a John Doe defendant would want the option to settle before actually being named in the suit for all of the world to see?
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Marcus Carab (profile), 27 Jan 2011 @ 1:15pm

Re: Re: Re: not litigation?
The letter is connected to litigation, but not directly. Litigation refers very specifically to a lawsuit: a civil action brought in a court of law

The point is that DWG is claiming protections that only apply to actions taken during litigation. The letters (which is what they are being sued over) are not part of any official litigation, but rather a precursor to it. Thus DWG does not enjoy those protections.
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average_joe (profile), 27 Jan 2011 @ 1:16pm

Re: Re: Re: Re: Re:
Most states just adopt the ABA Model Rules that I quoted as is. USCG could be subject to discipline in any jurisdiction where they are licensed to practice and also in any jurisdiction where the effect of their misconduct was felt. Since these settlement letters went out to many different jurisdictions, they'd be potentially liable in every single one of them.
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average_joe (profile), 27 Jan 2011 @ 1:30pm

Re:
I do have a copy of one letter they were using. I also have screenshots of the claims they were making on their website before they made it non-public. If I can find them, I'll post them. As I recall, they strongly intimated that the accused could be liable for $150K, but they never directly said that.

One fact you should keep in mind is that USCG registered the copyright for the "Far Cry" movie. They can hardly claim they didn't know the ins-nd-outs of it. The claim here is that the registration was fraudulent, first of all, since the wrong date was intentionally used. And second of all, even if the registration was not fraudulent, the settlement letters indicated that all of the accused were possibly on the hook for statutory damages.

The problem is, statutory damages were not on the table for all of the accused, and some were actually only potentially liable for actual damages. By sending out letters making the accused think that they were facing statutory damages, USCG committed further fraud. I doubt USCG did any of this on purpose, but it's a pretty amateur mistake for a group that advertises themselves as copyright experts.
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jeff, 27 Jan 2011 @ 1:47pm

Re: Re: Re: Re: not litigation?
"The letters (which is what they are being sued over) are not part of any official litigation, but rather a precursor to it."

how is this possible? How did DGW know the name and address of this guy in MA if they hadn't received that information from his ISP as a result of the John Doe lawsuit filed in DC?
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Richard (profile), 27 Jan 2011 @ 2:02pm

Re:
If you have an issue, sue the clients, not the lawyers. Good luck with it, you would have a heck of a case to prove.

Well in the UK it has been done successfully - so it can't be that hard.
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average_joe (profile), 27 Jan 2011 @ 2:16pm

Re: filing
Thanks for the link. You don't happen to have a link to their memo in support of their motion to dismiss, do you? It'd save me $3 on PACER...
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Anonymous Coward, 27 Jan 2011 @ 3:35pm

Re:
He received a letter threatening larger fines if he chose to challenge the accusation.

Threats = harm to me, especially if the accusation is false, but I'm not a lawyer.
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Anonymous Coward, 27 Jan 2011 @ 5:11pm

Re: Re: filing
http://www.scribd.com/doc/47696536/Motion-to-Dismiss

also, here is the settlement letter
http://www.scribd.com/doc/47696534/7-3
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average_joe (profile), 27 Jan 2011 @ 5:21pm

Re: Re: Re: filing
Many thanks.
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teknosapien, 27 Jan 2011 @ 5:59pm

Why is this such a shock
Lawyers that Lie
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TheRegulator (profile), 27 Jan 2011 @ 6:34pm

Maybe not so hopeless a case...
Mark,
It is true that in many cases lawyers can assert a defense of privilege or immunity against civil claims brought by a non-client (on the theory that they owe no duty to non-client), there are many exceptions. For example, lawyers can be sued for common law fraud and under the federal civil RICO statute in certain cases. The duty not to defraud others, including litigation opponents, is independent of any attorney-client relationship. Lawyers can also be sued for malicious prosecution and malicious defense in certain states (knowing and intentional filing of a groundless lawsuit or defense).
In many states it isn't necessary to prove actual damages in order to recover statutory damages under their unfair trade practice statutes. In fact the claimant need not be "in privity" with the lawyer (i.e., a client) or even a consumer, so long as the statute has been held to apply to lawyers, and the lawyer committed an unfair and deceptive act or practice. Attempted deception is such an act, and the issue of intent is one for the jury.
A good reference work is Mallen & Smith's Legal Malpractice, even if it is heavily biased in favor of lawyers and their malpractice carriers (not surprising, given that the authors are defense counsel for such carriers). Another good source is the monthly Current Reports supplement to the ABA/BNA Lawyer's Manual on Professional Conduct.
It will be interesting to see how this comes out.
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Dragos (profile), 27 Jan 2011 @ 11:35pm

DGW
Off-topic but sort of funny. Check the second paragraph in Dunlap's resume from the company's website:

http://www.dglegal.com/thomas-m-dunlap

It seems that he leaves the door open to sue anyone who might want to check his resume. So, take care!
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Anonymous Coward, 28 Jan 2011 @ 7:05pm

Fuck DGW. I'm broke so I dont care if they take me to court. I'll never pay those fags a cent.
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Anonymous Coward, 22 Feb 2011 @ 4:17am

Writing Washington Bar Members on Lawyers Conduct
Well I have Mass Mailings also - I have friends from garden club, church, bunco group, womens league, school and sports teams writing to the Washington Bar Members Board and also to Representatives/Congress in every state. On the ethics and conducts of US Copyright Group. Asking that congress place a monetary cap and take this out of the hands of lawyers. Universities will fine a first offense student $25.00 and get the parents involved which usually deters future downloading. US Copyright Group has put a minor in the mass group settlement mailing system. $ First time offences for minors and lawyers asking $2,900, not right! I want to ask those lawyers each of them especially men. Tell me about your childhood, your teen years.
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Anonymous Coward, 22 Feb 2011 @ 4:36am

Re: Writing Washington Bar Members on Lawyers Conduct
We will be also doing the Virgina Board and Representatives this week. Also on Dunlap's resume it states classes in electronic evidence (UK) after it. I wonder if he got this mass law suit mailing from UK. This sort of stuff happen over there and was one of the first. Wonder if there is any connection in prompting?
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Anonymous Coward, 22 Feb 2011 @ 4:42am

Thanks Marcus. Wish you were My BackBone right now!
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anonymous coward, 21 Mar 2011 @ 1:00pm

so much going on in this world of digital mayhem espepcially when people dont understand how important it is to read terms and conditions.Heard the good news yesterday that Hurtlocker cases were dropped seeing all the google search engines. Is this true? Glad I dont have to recruit my garden club , groups and friends in a writing campaingn now to members of the board complaining aboutt these guys. I still may write representatives askign them to get a better look at this copy infrigment era we are in and make things better,. before it gets so out of control. I hate writing letters. Thanks Us Copyright Group for dropping the cases adn the movie industry in rethinking nicer way.
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anonymous coward, 21 Mar 2011 @ 1:00pm

so much going on in this world of digital mayhem espepcially when people dont understand how important it is to read terms and conditions.Heard the good news yesterday that Hurtlocker cases were dropped seeing all the google search engines. Is this true? Glad I dont have to recruit my garden club , groups and friends in a writing campaingn now to members of the board complaining aboutt these guys. I still may write representatives askign them to get a better look at this copy infrigment era we are in and make things better,. before it gets so out of control. I hate writing letters. Thanks Us Copyright Group for dropping the cases adn the movie industry in rethinking nicer way.
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Anonymous Coward & alias -anoymous coward :, 22 Mar 2011 @ 6:44am

come to think of mayhem replaced with word 'alot to learn'
Lets see I said mayhem up there, I dont think its mayhem the word I need to use with the digital world its just there is so much out there and rules to follow and terms and conditions to understand and people need not trespass and download things that not suppose to be. I wont be writing Washgtn BrMembers or will any of my friends, I had instaneus thinking for a split second on Feb 22nd. Vent Vent vent. Thanks for allowing me to vent. I dont have anyone to talk to about this. so it was nice to have you.
I think the lawgroup is trying to stop it all. Never pulled it off anyway. All steam.
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Anonymous Coward & anonymous coward, 22 Mar 2011 @ 1:36pm

Re:
To make it clear.. I did not mean the lawgroup never pulled it off anyway. I meant wanting to complain and bark write telling about the mean settlement letters they sent. I never pulled that off is what i meant, getting around to writing. I lost so much sleep over all that even sleeping pills werent helping. Still a basket case with what they put me through. And I dont know a thing about this bitt torenet group or how to download except a photo. I sure hope they dont put people through what I went through. Its even harder when you are alone and have no one to talk to.
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Anonymous Coward/anonymous coward, 22 Mar 2011 @ 1:39pm

Some hacked my Anonymous Coward I did not write
Did someone Hack my Anonymous Coward account. I did not write this.? Are there two Anonymous Cowards>> ? how can that be.??
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anonymous coward, 22 Mar 2011 @ 2:25pm

Anonymous Coward I did not write/thre are 2 of us I guess with same name
we may be using the same password which would be bizzare. But Let me Be perfectly Clear... I did not Write on Jan 28thth 2011 7:05 pm.. I did not write the Fword-dont care take me to court-never pay f a cent. I have been using Anonymous Coward and anonymous coward lower case throughout this and had no idea there was another. So to keep things in sync... I did not write the f-word statment on Jan 28th 2011 7:05. Thank You
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HAHAHAHA, 26 Apr 2011 @ 10:06am

Re:
Yes you will
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Robert William, 5 Mar 2013 @ 3:49am

Lawsuits like these are based on the fact that it's much less expensive for an individual to settle rather than hire a lawyer and fight this process. We realize what a bad position that puts defendants like you in.
http://www.mycprcertificationonline.com/
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