Righthaven Completely Stops Showing Up In Court, Loses Key Case, Key Appeals And 'Big Name' Lawyer Who It Still Owes Money To

from the death-of-righthaven dept

Mon, Mar 26th 2012 3:33am — Mike Masnick

Over the past few weeks there's been some more Righthaven news, as the company has continued the trend it started last year of not showing up and missing deadlines. Now it appears that it's just completely given up. CEO Steve Gibson is working at another job (while being investigated by the Nevada Bar) and main lawyer Shawn Mangano apparently has completely stopped responding to all attempts to contact him, even by the court. All this has resulted in the key appeals in its cases to be dismissed "for lack of prosecution." Last Thursday it also had a key case closed, with prejudice, driving another (yes another) nail in its already buried coffin.

Also, you may recall that, last summer, Righthaven trumpeted the fact that it had hired famed copyright maximalist lawyer Dale Cendali to help with some of the cases -- including this key one against the Pahrump Life blog. This hiring was part of why Gibson insisted that the courts respected Righthaven (even as they were losing case after case). Cendali is considered a bigshot in some copyright circles, leading some to think that Righthaven might actually have some ability to pull out of its tailspin. However, the sum total of her contributions to Righthaven's legal fights appears to have been a ridiculous filing last summer in which she tried to compare Righthaven to patent trolls -- an argument the court later found entirely unconvincing.

Cendali has now said she's withdrawn from all Righthaven cases, even though her name still appears officially as counsel for the company in one of the recently dismissed appeals. She claims that she was really just hired for couple small issues which she completed last summer (such as the filing mentioned above) and had been told that Mangano would handle the rest of the cases. She also has told the court that Righthaven hasn't paid her firm what it owes. Actually, other than the initial retainer, she says Righthaven't hasn't paid any other legal fees. In other words, Righthaven paid the initial retainer fee so it could blast out the fact that it hired her... and then refused to pay for any of the actual work she did. Par for the course for Righthaven.

Either way, with the dismissals of the key appeals, as well as the Pahrump Life case -- which was considered a key fight -- combined with the fact that pretty much everyone involved with Righthaven seems to have moved on to other things and is flat out ignoring anything Righthaven-related, when do we finally get to call the official time of death for Righthaven?

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: copryight, dale cendali, shawn mangano, steve gibson
Companies: righthaven

29 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

That Anonymous Coward (profile), 26 Mar 2012 @ 4:00am

I'm saddened to see them go... but that might only because I was hoping they would take the **AA's as clients and then implode.
[ link to this | view in thread ]
Karl (profile), 26 Mar 2012 @ 4:28am

Piercing the corporate veil
Wasn't there some talk a while back about "piercing the corporate veil," and allowing Righthaven defendants to go after Steve Gibson and Stephens Media directly?

What ever happened with that? The laws about "piercing the corporate veil" are handled by state laws in the Eighth Circuit, and it is notoriously difficult to do in Nevada.

However, since outright fraud was committed here, it might be possible. Anyone know any details?
[ link to this | view in thread ]
Matt, 26 Mar 2012 @ 4:30am

What are the wider implications of Righthaven's ultimate decline? Was this a company that just got everything wrong or have specific legal clarifications been made and precedents been set along the way? What are the implictions for others who may try the same approach either now or in the future?
[ link to this | view in thread ]
That Anonymous Coward (profile), 26 Mar 2012 @ 4:46am

Re:
Lying to courts is a bad thing.
Sham transfers of only the nonexistant right to sue are bad things.
Not disclosing who has interests in the case is a bad thing.
An entire article being reposted was declared as fair use.

And I would guess from some of the quotes attributed to one of the lawyers calling courts slamming him in rulings advice & guidance, Cocaine is a hell of a drug.
[ link to this | view in thread ]
Anonymous Coward, 26 Mar 2012 @ 5:03am

I am knocking on havens door.
[ link to this | view in thread ]
That Anonymous Coward (profile), 26 Mar 2012 @ 5:06am

Re: Piercing the corporate veil
I think the path might be more confused than that.
From reading other articles on VegasInc it looks like rather than pay a $5000 sanction from the court that they could afford, they instead funneled the money to a 3rd party.

http://www.vegasinc.com/news/2012/feb/28/righthaven-misses-more-deadlines-faces-new-contem p/

"Opsahl wrote in his declaration that his review of the Righthaven bank statement shows it had more than enough money on Aug. 11 to pay the $5,000 sanction � but instead made a $4,475 payment to an entity called Stephens Investments Holdings."

Who it seems uses the money to lobby on Securities and Investments.
http://www.opensecrets.org/lobby/clientsum.php?id=D000057184&year=2011

It looks like they just created Rightshaven to take the fall when it all went bad. The fact that money was being funneled out holds with how I expected them to operate. The money as it came in would vanish quickly out making sure that there would be nothing left should it go south.

I would expect piercing the veil would gain some ground after the bar is finished looking at Gibson. I am willing to bet the Stephens will have layers upon layers to protect themselves from anything bad happening to them, and Gibson testifying could really ruin their best laid plans.
[ link to this | view in thread ]
Anonymous Coward, 26 Mar 2012 @ 5:11am

Righthaven should hire Marco Tempest the cyber illusionist and use some of his open sorcery :)

The good is that we now know that there are limits that even judges are uncomfortable crossing although Righthaven is a extreme case of bad management and bad layering.
[ link to this | view in thread ]
ottermaton (profile), 26 Mar 2012 @ 5:25am

It's obvious ...
It's obvious that the whole reason Righthaven can't continue is that all the pirates stole all the money from the artists who would be normally paying Righthaven to represent them ...

Er, wait ... what?
[ link to this | view in thread ]
G Thompson (profile), 26 Mar 2012 @ 5:44am

The amount of face palm that is in this whole debacle is to the point of self flagellation.

The problem is the amount of wrongness that Righthaven has shown is astounding and I'm not sure that there is precedent for what any court or bar Association could and more to the point will (they are in a bind in that they basically have to now) do to them.

That's before we talk about the allegations of ineptitude and trading whilst insolvent.

I feel for the Investigators that have to wade through this shameful episode by Attorney/Solicitors who should of known better. And that includes Cendali, she has questions to answer as well.
[ link to this | view in thread ]
That Anonymous Coward (profile), 26 Mar 2012 @ 5:48am

Re:
http://ajtnz.deviantart.com/art/X-Facepalm-Motivational-191314155

this seems like almost enough...
[ link to this | view in thread ]
Anonymous Coward, 26 Mar 2012 @ 6:08am

The courts are just giving their opponents guidance. Righthaven will have this locked down in no time and will come out victorious.
[ link to this | view in thread ]
DannyB (profile), 26 Mar 2012 @ 6:19am

Re: Re: Piercing the corporate veil
> "Opsahl wrote in his declaration that his review of the
> Righthaven bank statement shows it had more than enough
> money on Aug. 11 to pay the $5,000 sanction � but instead
> made a $4,475 payment to an entity called Stephens
> Investments Holdings."

Isn't that just ordinary Hollywood Accounting?

Avatar can't pay any royalties because it wasn't profitable. It's not that they didn't have Billions in the bank, it's that they had to pay most of that as a fee for, um, something, to the investors.

Why would it surprise anyone that other copyright scoundrels would use the same underhanded practices?
[ link to this | view in thread ]
That Anonymous Coward (profile), 26 Mar 2012 @ 6:21am

Re: Re: Re: Piercing the corporate veil
Its one thing to screw people who just have bad contracts, its another to flip off a court and move assets.
[ link to this | view in thread ]
G Thompson (profile), 26 Mar 2012 @ 6:30am

Re: Re:
Ha.. love it

A Hat Tip from The G33K is in order (First entry)
[ link to this | view in thread ]
Call me Al, 26 Mar 2012 @ 6:35am

Re: Re: Piercing the corporate veil
It makes me wonder whether there should be some kind of audit of their finances, although I have no idea if that is legal in the context I'm thinking of.

The way I see it is that their debts should be paid in the order in which they accrued. So if they were sanctioned before the amount to Stephens Investments was invoiced then the sanction should have been paid first. Notice I'm going with invoiced rather than paid here, if the demand from Stephens Investments pre-dates the sanction then it would go there first.

The way it looks from your comment is that they were sanctioned and then arranged their finances after the fact to make it seem like there was not sufficient cash to cover the sanction. In my view that is a crock of...
[ link to this | view in thread ]
That Anonymous Coward (profile), 26 Mar 2012 @ 7:03am

Re: Re: Re: Piercing the corporate veil
Stephens Investments Holdings looks to be a holding company for the Stephens Family who were cocreators of Rightshaven and some of the newspapers represented by them.
It was a nifty way to funnel money out.

The payment to the Holding company was made AFTER the court sanction, as was shown by a review of their records that they had to use the court to pry out of them. The $5K didn't even begin to come close to the $138K (IIRC) they owed the defendant in that case.
[ link to this | view in thread ]
That Anonymous Coward (profile), 26 Mar 2012 @ 7:05am

Re: Re: Re:
*dance dance dance*
[ link to this | view in thread ]
Overcast (profile), 26 Mar 2012 @ 7:24am

Pretty typical ending of a scam.

This was nothing but a scam all along, now it's time to pay the piper - these clowns should serve time or at least pay some hefty fines for contempt of court and abuse of process.
[ link to this | view in thread ]
Anonymous Coward, 26 Mar 2012 @ 8:38am

"when do we finally get to call the official time of death for Righthaven?"

The question is, will all the minimum wage Techdirt shills that kept on insisting, all along, that Righthaven will eventually win this, admit that they were wrong?
[ link to this | view in thread ]
Anonymous Coward, 26 Mar 2012 @ 8:58am

Re:
We aren't wrong. Righthaven is just waiting until the right moment to mount their spectacular defense.
[ link to this | view in thread ]
That One Guy (profile), 26 Mar 2012 @ 9:12am

Re: Re:
I'll save both them, and the embarrassed to hear it judge time: the 'it was all a bad dream' thing only works in movies/books(and only barely then), so I'm afraid they won't be able to duck out of it that easy.

Likewise, I'm fairly sure the 'my evil twin did it', 'the devil made me do it'(though considering whose interests they were fighting for, that one would actually be kinda true) and similar excuses also won't work, though they are more than welcome to try any of those, a comedic act can always use new jokes to freshen things up.
[ link to this | view in thread ]
Anonymous Coward, 26 Mar 2012 @ 11:06am

Re: Re:
(65 years later, after the business has long ceased to exist and half its members died of old age)

They'll regroup one day, appeal the case, and win!!!

Cough, Cough, Cough ... where are my false teeth!!!
[ link to this | view in thread ]
TtfnJohn (profile), 26 Mar 2012 @ 12:14pm

Re: Re: Re:
Where you left them last night in your mug of beer. ;-)
[ link to this | view in thread ]
McFortner (profile), 26 Mar 2012 @ 1:35pm

I believe that Cendali's exact quote was "Righthaven? Righthaven who? I don't know any Righthaven."
[ link to this | view in thread ]
Anonymous Coward, 26 Mar 2012 @ 5:44pm

Am I the only one who sniggered at the above typo of Righthaven as Righthaven't?

They Righthaven't got a clue!
[ link to this | view in thread ]
Wayne, 27 Mar 2012 @ 8:35am

Still waiting for Sherman Fredericks and Steve Gibson to explain how Righthaven has an ace up their sleeve and its going to surprise us all and how this is just the judges giving Righthaven lawyers guidance. Seriously, anyone who used Righthaven should sue them for incompetence.
[ link to this | view in thread ]
luca, 27 Mar 2012 @ 8:36am

time to start punishing the people who do this trolling in a mean, violent phisical way.

A bullet in the leg, or hitting their family, including their kids, anything violent will do.

We need to make an example of one of these guys, and surely others will think twice before pulling this shit, but if they do, another bullet will take care of them.
[ link to this | view in thread ]
Anonymous Coward, 27 Mar 2012 @ 4:21pm

This article is protected by Havenright�
[ link to this | view in thread ]
happeh, 28 Mar 2012 @ 2:38am

Righthaven never wanted to win. It was a game to knock websites off of the internet.

I saw 3 or 4 forums closed down because of lawyer issues. What does that mean now that Righthaven has closed down?

All of those forums closed for no reason at all. They could have stayed open because the copyright threats have turned out to be meaningless.

Righthaven and the people they worked for accomplished exactly what they set out to do. It does not matter that it was fear that closed those websites down instead of a Righthaven lawsuit. Those places are closed forever and their communities have been scattered across the internet.
[ link to this | view in thread ]