Prenda Actually Wins A Round; Order To Pay Back Settlements Tossed In Minnesota

from the well-that's-unfortunate dept

Mon, Mar 31st 2014 3:50pm — Mike Masnick

For months now, we've been covering how Prenda had been losing pretty much every one of its legal fights concerning its fraudulent copyright trolling practices. I guess it was bound to happen sooner or later, but Team Prenda has bounced back with an actual victory. You may recall that one of the (many) key Prenda cases was taking place in Minnesota, where magistrate judge Franklin Noel, becoming aware of what was happening with Prenda in other courts had reopened a bunch of Prenda (via AF Holdings) cases in Minnesota to explore if Team Prenda had committed fraud upon the court. Noel dug in, demanding actual answers to various questions that Team Prenda had avoided in other cases, eventually ruling against Team Prenda and (importantly) ordering the law firm to pay back all the settlement money it had taken in via those cases.

Well, it appears that's all for nothing now. Judge Joan Ericksen has apparently stepped in to put magistrate judge Noel in his place, pointing out that he went way beyond what a magistrate judge is allowed to do and then actually siding with Prenda lawyer Paul Hansmeier in saying that the fact that team Prenda forged Alan Cooper's signatures on the copyright assignment isn't fraud on the court... and, in fact, saying that it basically doesn't matter at all. First, as to a mere magistrate judge sniffing out these problems, judge Ericksen isn't having any of it:

AF Holdings consistently objected to the magistrate judge’s authority to determine whether it had committed a fraud on the Court. The magistrate judge had no such authority. See Reddick v. White, 456 F. App’x 191, 193 (4th Cir. 2011) (per curiam) (“A motion for sanctions under the district court’s ‘inherent’ power is not a pretrial matter under Ã‚Â§ 636(B)(1)(a). Magistrate judges have no inherent Article III powers—they have only those powers vested in them by Congress. Congress has not created statutory authorization for magistrate judges to exercise inherent Article III powers.”

Furthermore, Ericksen points out that, as a magistrate judge, Noel can't really make an order like he did (which is likely accurate), but instead can just make a recommendation for a "real" judge like Ericksen to review. And Ericksen just doesn't seem concerned about the forgery, lying and other shenanigans from Team Prenda.

Cooper’s signatures were immaterial to the decision that granted AF Holdings expedited discovery.... AF Holdings’ submission of the agreements with Cooper’s signatures—legitimate or not, authorized or not—to evince the transfer of the copyrights to AF Holdings did not amount to a fraud on the Court.

It's somewhat disappointing to see a court not all that concerned that an effort that involved forgery is really no big deal, especially when it was about copyright trolling, a practice of abusing the court system to hound people into paying up to avoid having to fight a lawsuit.

That's unfortunate, but given how many other courts have ruled on Prenda's efforts and the multiple referrals to state bars, DOJ and others, I would imagine that this is merely a slight and brief reprieve for Team Prenda.

Erickson Ruling (PDF)Erickson Ruling (Text)

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Filed Under: alan cooper, copyright, copyright trolling, franklin noel, joan ericksen, john steele, paul duffy, paul hansmeier
Companies: af holdings, prenda, prenda law

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That One Guy (profile), 31 Mar 2014 @ 3:33pm

So what does count then?
AF Holdings� submission of the agreements with Cooper�s signatures�legitimate or not, authorized or not�to evince the transfer of the copyrights to AF Holdings did not amount to a fraud on the Court.

If forging documents and signatures, then used to sue or extort via threats to sue aren't considered 'fraud on the court', I have to wonder just what does reach that insanely high bar?

They presented fraudulent, intentionally fraudulent at that, evidence to the court to get them to do something, if blatant lying like that isn't considered fraud, then I can't imagine what more they could do that would count to a judge like that.
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kenichi tanaka (profile), 31 Mar 2014 @ 4:04pm

I hate to side with Prenda Law on this but Judge Ericksen is correct on this one. While the courts can put a stop to Prenda's settlement letters going forward, forcing Prenda to pay back that settlement money that had already been paid to Prenda was a step over the lines.

I'm all for stopping these law firms from actions like this but to force them to pay back monies they have already collected? The courts only have the ability to stop further collection efforts, not to force Prenda to send back monies already collected.

Their fraud on the court is one thing, it doesn't affect what they are legitimately collecting from filesharing users.
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Anonymous Anonymous Coward, 31 Mar 2014 @ 4:04pm

Re: So what does count then?
INPUT: Prenda lawyer plead poverty against other santions

INPUT: Judge let's Prenda slide on forgery

OUTPUT: Where has Prenda's money gone? Long time passing...

With apologies to Simon and Garfunkel.
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Mason Wheeler (profile), 31 Mar 2014 @ 4:08pm

Legitimately?
it doesn't affect what they are legitimately collecting from filesharing users.

That word, I do not think it means what you think it means.
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Anonymous Coward, 31 Mar 2014 @ 4:10pm

For those wondering why it seems to take so long to deal with Prenda and other such trolls, this is why. If they don't dot all the i's, cross all the t's, and be careful to stay within the bounds of what they're allowed to do, the trolls will be able to wiggle out of justice on technicalities just because one part was screwed up.
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That Anonymous Coward (profile), 31 Mar 2014 @ 4:14pm

Re:
They would not be collecting anything in those cases if the court had been made aware of the fraudulent documents filed in the case... or maybe it still wouldn't matter.
Lawyers would NEVER knowingly do exactly what Prenda has done time and time again in court after court, so it doesn't matter.

See cause one might think that a sham transfer with a fake name to a corporation might give rise to the idea that the accused never got to face their accuser. This shame document made it difficult for anyone to challenge and facts in the case. How can one investigate when the ownership is hidden? How are we to know there isn't another document in a folder somewhere where 'Alan Cooper' sold off the copyrights to someone else and they kept suing while not owning the rights to do such.

Must protect the legal system... even at the expense of the people it victimized. Which is why it is nice that even with all of the other details now known about this, the victims if they wanted to try and sue to get back their money now can't bother to argue that the case was a shame because fraudulent documents don't matter in that district.
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sorrykb (profile), 31 Mar 2014 @ 4:32pm

Re: Re: So what does count then?
And additional apologies to Pete Seeger?
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Anonymous Anonymous Coward, 31 Mar 2014 @ 4:38pm

Re: Re: Re: So what does count then?
Whoops, and Pete Seeger too.
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Jay (profile), 31 Mar 2014 @ 4:43pm

Taking a scoop off Bullshit Mountain...
Okay...

I'm all for a few corrections, but the big questions upon the court are not being answered and from what's been said, it's just a little bit off the top of all of the problems of Prenda.

I can't help but think that Prenda is breathing a sigh of relief right as they fall over the edge into the volcano.
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vegetaman (profile), 31 Mar 2014 @ 4:48pm

Re: So what does count then?
Well, since apparently lying to Congress under oath isn't perjury, I guess falsifying a signature on official court documents isn't either?

At least... Provided you meet the following criteria:

1) You are an Elite, or
2) You are a Corporation, or
3) You are a Lawyer, and
4) You are not just a regular citizen
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alternatives(), 31 Mar 2014 @ 4:53pm

Re:
Their fraud on the court is one thing, it doesn't affect what they are legitimately collecting from filesharing users.

Unless how they got the judgements is via fraud on the courts.
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sophisticatedjanedoe (profile), 31 Mar 2014 @ 4:54pm

BREAKING: As you know, today is a deadline to pay #260K in the Lightspeed case.

Emboldened by today's Erickson's ruling, Steele, Hansmeier and Duffy paid their debt in full... in cash... in 70 dollar bills.
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That One Guy (profile), 31 Mar 2014 @ 4:56pm

Swap a few words and re-read
It only takes a few minor substitutions to see how that idea doesn't quite hold up.

'While the courts can put a stop to a [scam artist's] ['settlement'] letters going forward, forcing the [scam artist] to pay back that ['settlement'] money that had already been paid to [them] was a step over the lines.

I'm all for stopping these [scam artists] from actions like this but to force them to pay back monies they have already collected? The courts only have the ability to stop further collection efforts, not to force [scam artists] to send back monies already collected.'

"Well I'm terribly sorry the plaintiff managed to scam you out of your life savings using fraudulent legal threats, but since he's got the money now, I'm afraid you're out of luck, all I can do is tell him in a stern voice not to get caught doing it again."

That seem like a fair thing to you? It may or may not be legal, I couldn't say for sure either way, but allowing someone to keep the money they conned/threatened/extorted out of their victims certainly doesn't seem to me like how things should go, unless the punishments they suffer are extensive enough to make them lose at least as much as they managed to con out of people, so at the very least they aren't coming out of it with a net gain.
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Anonymous Coward, 31 Mar 2014 @ 4:58pm

Yet another example (like a story I read earlier about the DuPont Heir getting off with a slap on the wrist) of how the further up the legal and political system you go, the less likely you are to get a fair deal in this country anymore.

I have neither respect nor faith in either the legal or political system in this country anymore. I'd probably move if it weren't for the fact all the countries I might consider moving to didn't kowtow to the US at every turn.
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That One Guy (profile), 31 Mar 2014 @ 4:59pm

Re: Re: So what does count then?
Have a 'sad but true'/insightful vote for that one, think you nailed it there.
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Mike Masnick (profile), 31 Mar 2014 @ 4:59pm

Re:
I'm all for stopping these law firms from actions like this but to force them to pay back monies they have already collected? The courts only have the ability to stop further collection efforts, not to force Prenda to send back monies already collected.

Their fraud on the court is one thing, it doesn't affect what they are legitimately collecting from filesharing users.

Except the ruling is not about that at all. It was just about whether or not there was fraud on the court. So your analysis makes no sense.
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sophisticatedjanedoe (profile), 31 Mar 2014 @ 5:02pm

Another note (bold emphasis is mine):
(�Courts have held that, in situations where �the copyright [author] appears to have no dispute with its [assignee] on this matter, it would be anomalous to permit a third party infringer to invoke [Section 204(a)�s signed writing requirement] against the [assignee].�� (alterations in original)); Jules Jordan Video, Inc. v. 144942 Canada Inc., 617 F.3d 1146, 1157 (9th Cir. 2010) (�When there is no dispute between the copyright owner and transferee, it would be unusual and unwarranted to permit a third-party infringer to invoke � 204(a) to avoid suit for copyright infringement.� (internal quotation marks omitted)).

Albeit it is a case law reference, it is, IMO, still insulting to use the term �infringer� affirmatively, while no determination on the merits against defendants has been made, neither as a judgment, nor a jury verdict.
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alternatives(), 31 Mar 2014 @ 5:07pm

Re: Re: So what does count then?
4) You are not just a regular citizen

No, if you are a regular citizen liar that doesn't get you nailed for perjury either.
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kenichi tanaka (profile), 31 Mar 2014 @ 5:10pm

You guys keep forgetting that these file-sharers downloaded porn illegally. They got caught. Then they received a settlement letter. They paid the small settlement.

So, where was the fraud?

Just because Prenda Law is misleading the courts regarding their appearances and testimony doesn't mean it has anything to do with the monies they received.
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KevinEHayden (profile), 31 Mar 2014 @ 5:10pm

University of Minnesota
Interestingly enough, it seems that Judge Ericksen and Paul Hansmeir's father, Gordon, both attended University of
Minnesota around the same time. I wonder if they know each other?
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sophisticatedjanedoe (profile), 31 Mar 2014 @ 5:14pm

Re:
If $3,400 is a "small settlement" in your book, be my guest: there is a PayPal donation button on my site.
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sophisticatedjanedoe (profile), 31 Mar 2014 @ 5:15pm

Re: University of Minnesota
It was my first thought, but the graduation years are way apart... 1973 v 1981.
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Anonymous Coward, 31 Mar 2014 @ 5:26pm

Re: Re: Re: So what does count then?
don't bet on it, serf!
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That One Guy (profile), 31 Mar 2014 @ 5:41pm

Re:
Yeah, it's not nearly as cut and dried as that.

First of all, there was good evidence that Prenda themselves(Steele in particular if memory serves) had posted the files in question, so that people would download them and they could then turn around and threaten to sue those that did so.

https://www.techdirt.com/articles/20130603/02204423292/new-anti-prenda-court-filing-lays-out-tons -evidence-suggesting-john-steele-uploaded-videos-to-bittorrent-himself.shtml

http://www.techdirt.com/ articles/20130815/12351224190/comcast-confirms-that-steele-hansmeier-controlled-ip-address-used-to-s eed-content.shtml

So, strike one.

Second, all they were basing their lawsuits and threats of lawsuits on were IP addresses, which numerous courts have found to not be enough to positively identify someone. Add to that, the 'program' they used to gather the IP addresses was, again if memory serves, one run by a friend of Prenda, and one that they refused to let anyone check for accuracy.

Strike two.

Finally, just because someone paid, does in no way mean they were guilty. If presented with the choice of coughing up a few hundred, or even thousand dollars, or going to court, with the massive costs of time, money, and effort that involves even if you win, a lot of people are going to chose #1, even if they are completely innocent and know it.

Furthermore, by suing over porn titles, people are given yet another reason to just pay rather than go to court, as even if they are completely innocent, they'll still be on record as accused of downloading porn(with some very... 'creative' titles I believe), something many people would be more than 'happy' to pay to avoid.

Strike three, that argument's out.
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Anonymous Coward, 31 Mar 2014 @ 5:43pm

This isn't good for Prenda
The best outcome for Prenda is to lose all of its court cases, be compelled to pay back all funds, and have its attorneys disbarred. Maybe plead a charge or two, pay a fine (attorneys don't go to prison) and be done with it.

Why?

Because if that happens, then everyone watching will probably be satisfied that some semblance of justice has been done and that they've been punished sufficiently for their many, MANY crimes.

And if it doesn't?

I suspect that by and by, anonymous will take an interest. As you might have noticed, they tend to react eventually and inevitably to injustice. And I would really, really not want to be any of the Prenda principals if and when anonymous decided to turn its attention their way.
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Anonymous Coward, 31 Mar 2014 @ 6:20pm

Re:
You guys keep forgetting that these file-sharers downloaded porn illegally.

No, I'm rather sure I remember that part.

They got caught.

Honey pots will do that.

Then they received a settlement letter.

As part of the scheme.

They paid the small settlement.

And somehow that makes the whole process 'not a fraud'?
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sophisticatedjanedoe (profile), 31 Mar 2014 @ 6:21pm

Re: Re:
Strike four: "Plaintiff" AF Holdings is a pure sham, no such company ever existed on this planet. If filing a lawsuit for a bogus plaintiff is not a fraud upon the court, that what is?
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Anonymous Coward, 31 Mar 2014 @ 6:22pm

Re: Re: Re: Re: So what does count then?
I've watched it happen with one local serf.

Perjury seems to be for serf VS government official.
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My Name Here, 31 Mar 2014 @ 6:47pm

Finally, good news for a change. It is encouraging to see that judges know their place and facilitate the enforcement of copyright.
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That One Guy (profile), 31 Mar 2014 @ 6:50pm

Re:
Yeah, keep pretending that has anything to do with what Prenda was doing, maybe eventually someone who hasn't read anything about them will believe you.
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Wally, 31 Mar 2014 @ 6:55pm

It's somewhat disappointing to see a court not all that concerned that an effort that involved forgery is really no big deal, especially when it was about copyright trolling, a practice of abusing the court system to hound people into paying up to avoid having to fight a lawsuit.

Couldn't be any more disappointing than a judge overstepping his or her bounds of power and due process thus giving scum like Prenda/AF Holdings a leg up...
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Anonymous Coward, 31 Mar 2014 @ 7:15pm

Re:
Isn't there a law about "profiting from a crime"
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That Anonymous Coward (profile), 31 Mar 2014 @ 8:33pm

Re:
The others got most of it, you also managed to miss that Prenda was publishing peoples names on their website calling them guilty before the case ever got heard to increase the pressure to make them settle.
You missed that their 'neverwrong' system "caught" at least 1 woman who did nothing wrong... and only after the media started asking questions they magically corrected that error after hounding her day and night to pay them for a 'crime' she didn't commit.
You missed the flat out lies in their settlement letters, misrepresenting the law to ratchet up the pressure. One might question how an officer of the court is allowed to LIE about the law.

Didn't you hear? They claim they got NO MONEY. They all worked for free.
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Anonymous Coward, 1 Apr 2014 @ 12:36am

Re:
horse with no name just can't stand it when due process is enforced.
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Rikuo (profile), 1 Apr 2014 @ 12:39am

Re:
Wow, so you don't care at all about all the fraudulent dealings that Prenda have been up to. No, all that doesn't matter, as long as copyright is enforced
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Anonymous Coward, 1 Apr 2014 @ 3:15am

Re: Re:
Mike Masnick just hates it when copyright law is enforced.
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techflaws (profile), 1 Apr 2014 @ 3:33am

Re: Re: Re:
You mad, bro?
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Anonymous Coward, 1 Apr 2014 @ 4:19am

seems to me that rather than being pulled to one side by Prenda, she needs pulling to one side by other members of her profession and brought completely up to speed and then firmly put in her place with a little 'do you want to keep your job?' question tagged on the end.
she is behaving like a certain judge who has sat on copyright trials after being a copyright industry employee, got a touch of bias from somewhere!
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the truth, 1 Apr 2014 @ 4:25am

women and power....
Women past a certain age should not hold so much power! Think what you like but the fact is women are a million times more brutal that men when in power! Especially after that time in life when they dry up and become bitter against the world.

Human nature
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Anonymous Coward, 1 Apr 2014 @ 4:26am

Gooooo US justice system. You're making us proud.

In a half logical world, Team Prenda would be jailed. But not in the mighty US of A, no siree. There, they get paid to keep going. Well done.
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Anonymous Coward, 1 Apr 2014 @ 4:58am

Re: Re: Re: So what does count then?
Hate to burst your bubble, but most people of the "regular citizen" type are not afforded their day in court. They are subjected to the plea bargain meat grinder and go directly to jail without passing GO.
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Anonymous Coward, 1 Apr 2014 @ 5:01am

Re: Re: Re:
So - enforcing copyright law is synonymous with fraud ... sounds about right.
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Anonymous Coward, 1 Apr 2014 @ 5:11am

Re:
(Sympathy For The Devil playing in the background)

Affluenza is a real disease and it seems to be communicable. Recent theories suggest that the debilitating disease is transmitted from person to person via money. The more money you have, the more likely you are to contract the disease.

Scientists at the Center for Disease Control are working closely with members of Congress in order to better understand the epidemic and develop a cure.
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Anonymous Coward, 1 Apr 2014 @ 5:18am

Re:
You keep forgetting that IP Addresses can be spoofed, subnets can leached and your goddess Prenda never proved anything in a court of law, they simply extorted money from their victims.

So, where is the fraud you ask .. if you refuse to look for something, it is likely that you will not find it.

Just because someone is a bad actor doesn't mean they deserve scrutiny, amirite?
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Anonymous Coward, 1 Apr 2014 @ 5:21am

Re: women and power....
Sexist idiot makes stupid remark, film at eleven.
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Anonymous Coward, 1 Apr 2014 @ 7:12am

Re: Re:
The cure is surprisingly simple - nuke it from orbit, it's the only way to be sure.
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Anonymous Coward, 1 Apr 2014 @ 9:35am

Re: Re: Re: Re: So what does count then?
One can get their day in court. It may just take 1.5 to 2 years. The idea seems to be you may beat the time, but you won't beat the ride.
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ArJayK (profile), 1 Apr 2014 @ 9:44am

Darn! There goes their perfect record.
Statistically speaking, I guess it had to happen sometime. I guess it's "A Million monkeys with typewriters ..." time.
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That One Guy (profile), 1 Apr 2014 @ 10:42am

Re: Re:
...as long as the appearance of copyright is enforced.

Slight change needed there, Prenda's actions had nothing to do with 'enforcing copyright', that was just the legal fiction they spun to justify their actions.
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Gerardo, 1 Apr 2014 @ 12:47pm

Totally off offf offfff topic. popehat anonymous
Has Popehat been hacked? I got an anonymous banner this afternoon.
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Gwiz (profile), 1 Apr 2014 @ 1:50pm

Re: Totally off offf offfff topic. popehat anonymous
Has Popehat been hacked? I got an anonymous banner this afternoon.

Looks that way to me.

www.popehat.com is showing an Anonymous banner with the window title of "You've been hacked by Anonymous" and all sub-pages are returning 404 errors.
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Zonker, 1 Apr 2014 @ 3:30pm

Watch as Prenda, emboldened by this ruling and always too clever by half, attempts to pay their upcoming sanctions with a forged check. Claims this is not a fraud on the court referencing this ruling and because the matter was settled with the forged check they do not have to repay the sanction. Watch the court rule that since it is the court/lawyers that have been defrauded instead of the common folk that Prenda *has* committed fraud on the court and *must* pay up.
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James, 1 Apr 2014 @ 4:11pm

http://www.amazon.com/b?_encoding=UTF8&site-redirect=&node=1000&tag=tabbooingcom-20& linkCode=ur2&camp=1789&creative=9325
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Gwiz (profile), 1 Apr 2014 @ 5:39pm

Re: Re: Totally off offf offfff topic. popehat anonymous
I now officially hate April Fool's Day.
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Anonymous Coward, 1 Apr 2014 @ 6:18pm

Re:
Just Sayin' just hates it when due process is enforced.
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That One Guy (profile), 2 Apr 2014 @ 2:01am

Re: Re: Re: Totally off offf offfff topic. popehat anonymous
Only now? You might as well call it 'Trust nothing day', it'd be more accurate.
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Pragmatic, 3 Apr 2014 @ 6:03am

Re: Legitimately?
What Mason Wheeler says. How do we know it's legitimate? TAC has been on the end of this, and it wasn't legitimate in his case.
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Pragmatic, 3 Apr 2014 @ 6:10am

Re:
Old grannies, dead people and small children have been targeted in the same way and for the same reason (by the **AAs in other filesharing cases). Was that legitimate? No. IP address is not proof of infringement, and that's what they were using to go after a string of Does. Assume for the moment that you're right.

TAC (That Anonymous Coward - the guy with the Guy Fawkes mask as an icon) was one of the Does unfairly targeted - based on IP address alone. That's all they had on him. I believe him when he says he didn't do it. Don't you?

The only evidence to the contrary is an IP address. That's not proof of anything other than the presence of an internet connection. Have you ever tried to track down an individual via their IP address. Go on, try. Let us know how you get on.
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Pragmatic, 3 Apr 2014 @ 6:14am

Re: Re:
Behold thy god, his name is Copyright and all shall bow before him, particularly pirate-people who promote open source, etc. Those guys. He hates them.

*Green smoke billows at the front and nearby, a shoe pokes out from behind a twitching curtain*

Pay no attention to the man behind the curtain. Copyright the Great and Terrible has spoken!
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Pragmatic, 3 Apr 2014 @ 6:16am

Re:
It's that one time someone got annoyed and slapped a jerk. But that's assault. The letter of the law V the spirit of the law...
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Pragmatic, 3 Apr 2014 @ 6:16am

Re: women and power....
Something you want to share with the group, bub?
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Anonymous Coward, 7 Apr 2014 @ 8:46pm

http://madisonrecord.com/issues/332-class-action/263809-seventh-circuit-hears-arguments-in-prenda-at torneys-appeal-over-261k-sanction-order-judge-says-lightspeed-record-is-troublesome
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