Righthaven Charged With Racketeering In Somewhat Epic Filing
from the novel-or-court-ruling dept
Karl points us to the news that the lawyers for one of the people sued by Righthaven, one Dana Eiser, have filed what can only be described as an absolutely epic answer and counterclaim lawsuit in the case in South Carolina, raising an astounding 56 (count 'em) defenses. The 119-page filing, which is embedded below is worth a read. As Karl points out, some of it is pretty far out there (with some parts being simply wrong), but it does make for entertaining reading, with some new and interesting claims about some of Righthaven's actions.The point that's getting a lot of attention is the fact that the filing raises a racketeering charge against Righthaven under the RICO Act, claiming that using sham copyright transfers to shake people down for money is good, old-fashioned racketeering:
The extortion tactics and fraudulent conduct detailed in this Complaint each constitute a predicate act under RICO of (1) extortion, because such communication were threats intended to obtain money or property premised upon legal action that was a complete sham; and (2) fraud, because each mailing, phone call, and email furthered and executed the scheme to defraud Righthaven�s targets.While I actually think there's a half decent argument here given Righthaven's actions, I just can't see any judge really buying the racketeering claim. Such claims have been made in the past against the RIAA for its mass lawsuits, and they didn't seem to go anywhere. I doubt that will change here, but it would be a pleasant surprise if they did.
Righthaven has a knowing, willful, and specific intent to defraud its targets into entering into settlement agreements under the threat of fraudulent claims.
Some other interesting tidbits from the filing:
- The filing highlights that all three of Righthaven's clients have admitted to the press that they decide who to sue, not Righthaven, again indicating that Righthaven is not the actual copyright holder here:
Officers of each of these client entities have publicly stated that the media entities, not Righthaven, have the right to dictate who can and cannot be sued.
In an article appearing in the Arkansas Democrat-Gazette, Stephens Media LLC�s General Counsel Mark Hinueber is quoted as saying �I can tell Righthaven not to sue somebody.� ...
In the same article, WEHCO Media�s President Paul Smith is quoted as saying that if Righthaven discovers someone has violated WEHCO�s copyright, �it would be [WEHCO�s] decision whether or not to move forward with it[.]� ...
Finally, in The New York Times, MediaNews Group�s Vice President Sara Glines stated that MediaNews Group �reviewed every violation and only approved actions against sites that carried advertising and were not charities.� - In fact, Eiser takes the above quotes even further. Because this particular lawsuit was over MediaNews (Denver Post) content, and the site that the material was reposted to does not have advertising, she claims that there can be no lawsuit, since Glines (above) noted that they do not approve lawsuits against sites with no advertising. She uses this over and over again to claim a lack of standing to sue, promissory estoppel (i.e., the company promised not to use Righthaven to sue certain sites, but then did so anyway) and that Glines/MediaNews had issued a waiver of sorts. I don't see how this would carry much legal weight, but it is amusing in suggesting that MediaNews was less than truthful.
- There definitely are mistakes in the filing. Whoever wrote it, seems wholly unfamiliar with the nature of the "work for hire" doctrine, and confused about when it would apply.
- It claims that the main lawyer that Righthaven has used in many of its cases, Steve Ganim, is only on the Florida bar, and not allowed to practice law in Nevada, despite doing so. Eiser uses this to claim that Ganim and Righthaven are engaged in the unauthorized practice of law in Nevada. The filing also claims that when another defendant brought this information to light, "Righthaven attorney Shawn Mangano threatened a frivolous defamation action against Leon to shut him up." This would be amazing, if true.
- The filing claims that after a judge indicated support for the claim by the EFF and others that Righthaven is probably not open to winning lawyer's fees in its cases, because its lawyers are in-house, that it suddenly started hiring outside counsel for its lawsuits.
- As others have done, Eiser claims that the Denver Post's "sharing" tools give her an implied license to share the works.
- Eiser claims that "under 20" people saw the article posted to the website, raising questions about how much "damage" was actually done.
Even if it could show that every single person who read the Rosen Letter on the Lowcountry 9/12 Project blog would have read it at The Denver Post instead, only then would any actual damages be shown, and they would be in the neighborhood of 40 cents.
The South Carolina Supreme Court was offended by a case over five cents in 1918.
Adjusting for inflation, five cents in 1918 was worth 72 cents in 2010, when the alleged damages were sustained.
The approximately 40 cents of damages suffered (not even by Righthaven) is well within the rule of de minimis non curat lex. - Eiser tries a First Amendment claim, saying that the use was for communicating ideas. This argument is one that I find interesting, but is clearly dead in the water. The courts have been pretty blind on First Amendment implications of copyright law, and they're certainly not going to jump in now on a case like this.
- Eiser tries to bring up the famed BMW v. Gore case to say that statutory infringement rates are illegal. This argument has been made before (in the Jammie Thomas and Joel Tenenbaum cases) without much luck. I can't see them suddenly getting a sympathetic ear here either.
- Eiser claims that Righthaven is technically a debt collector, and that it does not follow proper procedures and laws as a debt collector.
- We've discussed a few times how bizarre it is that Righthaven demands the publisher's domain name in each lawsuit it files, despite that not being a standard remedy (or a reasonable remedy) for copyright lawsuits at all. In this filing, Eiser suggests that this attempt to get others' domain names is effectively a form of illegal cybersquatting on those sites. That one also sounds like a big stretch, but an interesting idea.
- There's another big reach, claiming an antitrust (Sherman Act) violation in seeking to stomp out competitors through a fraudulent claim. Again, a nice try at a novel legal theory, but one unlikely to get very far.
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Filed Under: copyright, dana eiser, newspapers, racketeering
Companies: righthaven
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Turn About is Fair Play
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A tried and true strategy:
Good on 'em! I hope they win some against the Righthaven schmucks.
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Re: A tried and true strategy:
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Re: Re: A tried and true strategy:
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Kick 'em while they are down.
Given what has been revealed about Righthaven, I think:
The extortion tactics and fraudulent conduct detailed in this Complaint each constitute a predicate act under RICO of (1) extortion, because such communication were threats intended to obtain money or property premised upon legal action that was a complete sham; and (2) fraud, because each mailing, phone call, and email furthered and executed the scheme to defraud Righthaven�s targets.
Righthaven has a knowing, willful, and specific intent to defraud its targets into entering into settlement agreements under the threat of fraudulent claims.
Sums it up well, and may have a good chance.
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It's a non-starter, someone trying to jump and piss on their graves before they are buried.
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Re:
or they KNEW it was fraudulent because they were threatening lawsuits with the specific intent of getting settlements, no actual judgement
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Accident lawyers...
Uh, yeah, because those are **law firms**. It is legal for law firms to represent clients on contingency. Rightaven is not law firm but an independent corporation. It is not legal to act like a law firm, to represent clients in litigation for a contingency fees, if you aren't one.
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Re: Accident lawyers...
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And, while they are at it they should also name the copyright owner in the RICO claim for the same reasons because the same facts could show a conspiracy - particularly the ability to select and approve defendants. They all used the wires (mail, phone, email) to transmit the threats so I cannot see how they would fail to state a claim (which is different from winning).
Finally, an investigation into the ethics rules of the Fed. Ct in Nevada and the Florida rules on professional conduct may lead to further claims and perhaps even a disciplinary action.
All told enough to make the Copyright Club take notice and avoid similar plans.
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Right about "work for hire."
A free-lancer can sign away their copyright to their client, and then the work can be *called* "work for hire," but absent such a specific copyright transfer the newspaper does not own the copyright. And, AFIK, the newspaper never provided proof of such an agreement.
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Re: Right about "work for hire."
They're not just demanding that a work-for-hire contract be shown. They're actually claiming that Stephens' claim on the copyright is fraudulent. And they are basing it on nothing more than the fact that the author wasn't actually an employee at the time.
In fact, work-for-hire contracts are incredibly common among freelance artists (graphic designers, studio musicians, commercial actors, etc). In general, if a work is commissioned by an employer, there's a good chance that it involved a work-for-hire contract. Hiring a freelance journalist to write op-ed pieces would be just such a situation (though of course it's not necessarily so).
A free-lancer can sign away their copyright to their client, and then the work can be *called* "work for hire," but absent such a specific copyright transfer the newspaper does not own the copyright.
Actually, if they sign away the copyright post-creation, it's more likely an "assignment." Either way, the newspaper owns the copyright, but there is one major difference: copyrights that are assigned can be reclaimed by the original artist after thirty-five years, regardless of the contract. Works made for hire cannot.
That's why musicians were up in arms when Mitch Glazier secretly designated all sound recordings as works for hire when he was a Congressional staffer (and before he became Senior VP of the RIAA).
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Re: Re: Right about "work for hire."
Work for Hire requires an employment relationship (employee/employer). It automatically vests the copyright in the employer. Anything else is by way of post-creation assignment. If the contract only attempted to claim WFH and there was no actual employer/employee relationship (e.g. no withholding, etc) then there is NO transfer of the copyright. It is for this reason that I was taught to have both a WFH and a separate assignment in every contract creating IP.
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Re: Re: Re: Right about "work for hire."
From what I can gather, this is not quite true.
It is true that there has to be some sort of "employee-employer" relationship. But this does NOT have to be of the type we typically think about, e.g. an employee that is listed as such on your tax returns.
Say, for example, that your local McDonald's wants to have a logo. You, as the designer, decide to do it. McDonald's would then hire you, as an outside contractor, to design their logo. In the contract you sign, it would most likely be clear that the logo design was done solely at McDonald's request, that it was a work for hire, and that McDonald's is to be considered the "author" for copyright purposes.
McDonald's could do this without legaly hiring you as an "employee." For example, they wouldn't be required to pay for your health insurance. Nonetheless, that logo does not belong to you, but to McDonald's, and no judge in the land would claim differently.
For industries that have a high rate of independent contracting - like, say, newspapers - these sort of contracts are standard. Just because you're an independent contractor does not mean that an employee-employer relationship does not exist; and it does not mean that the work could not then be considered a work-for-hire.
That's all I'm saying. The person who wrote up this filing does not seem to get this.
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Even more twists
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Here, on the other hand, it seems conceivable it could lead to an actual subpoena, which I suspect would reveal that Righthaven was simply incompetent and didn't know that the relevant precedents meant they had no standing to sue.
Of course, it might also reveal that Righthaven decided to continue sending threats out after it knew that the copyright assignment was a sham, in which case there might be a case.
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How can I donate to her suit?
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Re: Righthaven
This shakedown racket is shut down for good.
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For the "public" the better result would thus have been to uphold standing and then dismiss on fair use or some other substantive grounds.
PRK
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Re: Re: Re: Righthaven
The issue that Payback Time brings up is not quite the issue of standing.
If you didn't know, Stephens Media themselves never registered the copyrights. That means the first time a copyright on the articles was ever filed with the copyright office, was the time that Righthaven did it.
When Righthaven filed the copyright, they in fact did not have any right to do so. Thus, the fundamental copyright on the article itself is invalid. Does this mean that Stephens, who is actually the copyright owner, cannot now file for a copyright on the work? Especially since Stephens (the owner) did not file any copyright claim within the deadline set by the Library of Congress?
It's actually a good - if wholly technical - question. I honestly don't know the answer. I'm guessing that a judge would rule that copyright was filed, but retained by Stephens. That's just a guess, though.
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Re: Re: Re: Re: Righthaven
Stephens "assigned" the rights to Righthaven within three months after publication. The three months have passed since then, and after three months, the assignment was found to be invalid.
In the words of the Copyright Office (PDF): "If registration is made within three months after publication of the work or prior to an infringement of the work, statutory damages and attorney�s fees will be available to the copyright owner in court actions. Otherwise, only an award of actual damages and profits is available to the copyright owner."
Does this mean that nobody can ever demand statutory fee's or attorney's fees, since (by definition) any legitimate registration was not made within three months of publication?
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Trite slang
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Re: Trite slang
. . . I'm semi-serious. Of course, the english word 'epic' itself wasn't around, but the use of the same word to mean both "grand or heroic in nature" and "impressive"/"awesome" has been.
In any case, Mike is using it in the non-slang way: The filing, at 119 pages and 52 defences, is, in fact, "grand in nature".
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Ohwait...
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I mean, yes, most of them are d4's, but some of its hitdice might be d12's.
I pity the fool who has to read that backstory!
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Righthaven vs RIAa
Surely the RIAA doesn't own the copyrights. Is the RIAA just the enforcement arm of the labels and not actually party to the lawsuits?
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Re: Righthaven vs RIAa
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Practicing Law - License
I cannot imagine that the attorney was not admitted for the case. The court would not have permitted him to speak otherwise.
The violation, if any, would be a violation of Nevada law and would be for the Nevada authorities to deal with.
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Domain Names
The proper action would be under the ACPA seeking Reverse Domain Name Highjacking - not for some potential cybersquatting claim (that would be based on their having succeeded and obtained the domain and then used it). Under the ACPA, a RDNH action is permitted when there has been a legal threat to recover a domain name AND the plaintiff/claimant has no trademark. It is a declaratory relief action.
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