Court To Prenda's John Steele: Okay, Now We'll Sum Up How Much You Cost Taxpayers And Need To Pay

from the the-saga-continues dept

Fri, Aug 19th 2016 8:38am — Mike Masnick

When last we left John Steele, one of the dynamic duo behind the massive copyright trolling scam once known as Prenda Law, he was being scolded by the 7th circuit appeals court (not the first appeals court to do so), for failing to abide by the court's own advice to "stop digging." But digging a deeper and deeper hole has always been in John Steele's nature, it seems. As we've mentioned in the past, Steele reminded me of a guy I once knew, who incorrectly believed that he was clearly smarter than everyone else, and thus believed (incorrectly) that he could talk and lie his way out of any situation if he just kept smiling and talking. That generally doesn't work too well in court -- especially when you're not actually that smart.

In that July ruling, the court upheld most of the money Steele and Paul Hansmeier were told to pay, and scolded them for directly lying about their ability to pay. It referred to Steele's "entire pattern of vexatious and obstructive conduct." However, as we noted, Steele kinda sorta "won" on one point, though even that win was a loss. One of the arguments that Steele's lawyer had made was that on the fine that the lower court gave him for contempt, the basis for that fine appeared to be under the standards for criminal contempt rather than civil contempt. Way back during oral arguments, the judges on the panel had asked Steele's lawyer, somewhat incredulously, if he was actually asking the court to push this over to be a criminal case rather than a civil one, and Steele's lawyer answered affirmatively.

And so, the court notes that the contempt fine "falls on the criminal side of the line," because "it was an unconditional fine that did not reflect actual costs caused by the attorneys’ conduct." So it tossed out the $65,263 fine, but noted that criminal contempt charges might still be filed (out of the frying pan, into the fire). Oh, and of course, it left open the idea that the lower court might go back and actually justify civil contempt fines. And it appears that's exactly what Judge David Herndon in the Southern District of Illinois has done. He's ordered Steele to show cause for why he should not be fined, and then details the basis for such a fine.

As a direct result of Steele’s misrepresentations, between January 29, 2014 and June 5, 2015, this Court expended a significant amount of time and effort addressing matters relating to Steele’s ability to pay the Fee Order. This includes the following: (1) reviewing, researching, and issuing orders resolving and/or reconsidering numerous motions stemming from the misrepresentations; (2) preparing for and holding hearings on February 13, 2014 (Doc. 123) and November 12, 2014 (Doc. 187); and (3) reviewing asset statements submitted by John Steele in support of his inability to pay claim.

Steele’s choice to make misrepresentations to this Court and to continue to press the issue of inability to pay necessitated all of the above. Steele’s misconduct resulted in an actual loss to this Court and, more importantly, to the tax payers. It is the tax payers who ultimately bear the cost of adjudicating Steele’s misrepresentations. See U.S. v. Dowell, 257 F.3d 694, 699-700 (7th Cir. 2001). Considering the real cost to this Court and to the tax payers, the Court may impose a sanction that compensates the taxpayers for the Court’s time....

The Court intends to impose a remedial sanction for the Steele’s misconduct, outlined in this Court’s June 5, 2015 Order (Doc. 199). The remedial sanction shall be a fine in an amount necessary to reimburse the Court for the costs incurred as a result of Steele’s misrepresentations to this Court....

So, yes, the tiny "victory" for Steele in having the contempt fine tossed out was short lived, as a new civil contempt fine appears likely to be on the way. And, who knows, perhaps criminal charges as well. Can't wait to see Steele try to talk himself out of this one too.

Lightspeed-Doc-229 (PDF)Lightspeed-Doc-229 (Text)

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Filed Under: 7th circuit, anthony smith, contempt, david herndon, john steele
Companies: lightspeed, prenda, prenda law

27 Comments

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rw (profile), 19 Aug 2016 @ 8:42am

Yea!!! More popcorn!
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Matt (profile), 19 Aug 2016 @ 8:51am

Warming up the popcorn machine now
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Glen, 19 Aug 2016 @ 8:56am

Gotta love those Pyrrhic victories.
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kallethen, 19 Aug 2016 @ 8:57am

Man, if he could only market those shovels he keeps using to dig deeper. We've yet to see him hit bottom.
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Norahc, 19 Aug 2016 @ 8:59am

Second Rule of Holes
Steele is obviously following the Second Rule of Holes, "Keep digging until you smell feet."
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GMacGuffin (profile), 19 Aug 2016 @ 9:10am

Schadenfreudelicious
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DannyB (profile), 19 Aug 2016 @ 9:21am

Re:
I for one am on Steele's side on this matter. I truly and sincerely hope he will get his wish . . .

of a criminal charge and conviction.

Dear Mr. Steele: for best results, please keep digging during the sentencing hearing.
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DannyB (profile), 19 Aug 2016 @ 9:23am

Re: Second Rule of Holes
Second rule of holes:

When you're in a hole, stop digging.

Steele rule of holes:

When you're an a-hole, stop digging.
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PRMan (profile), 19 Aug 2016 @ 9:50am

Re: Re: Second Rule of Holes
"When you're an a-hole, stop digging."

I think Steele's rule is:

When you're an a-hole, KEEP digging.
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DB (profile), 19 Aug 2016 @ 9:58am

Speculation about the costs...
I wonder if the clerks have already tabulated the cost to the taxpayers.

If so, is it possible that it's almost exactly $65,263 plus the additional expense of tabulating the expense plus the cost of the additional hearing?

And a prosecution for perjury.
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That Anonymous Coward (profile), 19 Aug 2016 @ 10:21am

So am I the only one expecting him to file something petulant 3 days late explaining how he can't possibly pay anything?

Pretty sure his current game is to keep court cases going so that the FBI doesn't finally arrest him.
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Anonymous Coward, 19 Aug 2016 @ 10:35am

Re:
I thought it was to keep the FBI et all laughing so hard they'd leave him out just to keep the laughs coming
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Ninja (profile), 19 Aug 2016 @ 10:53am

Re: Re: Re: Second Rule of Holes
That would infringe Johnny Walker trademarks. The fines are much higher if they are intellectual.
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Trails (profile), 19 Aug 2016 @ 10:58am

Re: Speculation about the costs...
Imagine if it comes back as more. That would be glorious.
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Groaker (profile), 19 Aug 2016 @ 11:11am

Re: Re: Speculation about the costs...
Shouldn't the fines and costs have to be more, considering that there was more litigation that blew up in Prenda's face.
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That Anonymous Coward (profile), 19 Aug 2016 @ 11:36am

Re: Re:
As they have taken to arresting their own CI's for recruiting jihadis, they need a win.
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Anonymous Coward, 19 Aug 2016 @ 11:43am

Enough with the civil penalties, already. Bring on the criminal charges.
Where are the DOJ, IRS, and state bars on that, anyway?
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Anonymous Coward, 19 Aug 2016 @ 11:47am

Such stinking bullshit!
The "Tax Payers" never catch a break.

We only ever see the mutha fuckin bill.

Companies break the law, the government gets the money via the fines, not the citizens who paid for this shit.

I wish the US Constitution literally stated that the Federal Government did not have the power to levy a fine period. Not for a fucking damn thing. If it is a big deal people can just go to fucking jail.

If peeps fuck up, they get a warning, if they keep fucking up, then we can discuss a short stay in stripes.

Fine have only brought more corruption to the system where they are now considered part of the operational budget and counted upon.
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mb (profile), 19 Aug 2016 @ 11:52am

Re:
The criminal charges should come, but perhaps they should also include MORE civil charges to cover the cost of his criminal incarceration. It's expensive to keep someone locked up in jail!
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That One Guy (profile), 19 Aug 2016 @ 12:20pm

The perks of being a (rotten) lawyer
As a direct result of Steele’s misrepresentations, between January 29, 2014 and June 5, 2015, this Court expended a significant amount of time and effort addressing matters relating to Steele’s ability to pay the Fee Order.

...

Steele’s choice to make misrepresentations to this Court and to continue to press the issue of inability to pay necessitated all of the above.

Funny, I'm pretty sure that anyone else wouldn't be accused of 'misrepresentations', they'd be on the hook for perjury charges for lying to the court.

Even now they're forced to treat him with kid gloves so he doesn't wiggle out on a technicality when anyone else would have had the hammer brought down on them long ago.
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Anonymous Coward, 19 Aug 2016 @ 2:55pm

oh, boy, prenda. has anybody mentioned popcorn yet? if not, i'll proudly be the first.
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Anonymous Coward, 19 Aug 2016 @ 4:20pm

Dwarven Rule to Digging:
Stop once you hit Hell.
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Anonymous Coward, 19 Aug 2016 @ 5:17pm

Re:
Suggested upcoming daily deals

Subject: "Techdirt's Salty Marsh Popcorn"

Description: A delicious lightly salted popcorn with extra, extra butter.
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Anonymous Coward, 19 Aug 2016 @ 5:28pm

John Steele's Plan
Keep digging until you can pay for the expenses with by selling the hole once it is deep and hot enough to be used by a geothermal power plant.
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LVDave (profile), 19 Aug 2016 @ 5:29pm

Re: The perks of being a (rotten) lawyer
For ANY judge who is even halfway aware of the lies this idiot has told the previous judges he's been before can STILL call these lies "misrepresentations" and NOT immediately slap Mr Steele in jail for perjury is a mystery to me.. Steele has been thumbing his nose at every judge he's been before regarding this Prenda nonsense. Not to mention, the fact he's not been disbarred is also unbelievable.. Pretty much tells me that even with a lying asshole like Steele, the US court system still applies "professional courtesy" to slime like Steele... You can BET if he wasn't a lawyer, he'd be behind bars already with his behavior...
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Anonymous Coward, 19 Aug 2016 @ 7:58pm

Re: Speculation about the costs...
You do realize that the clerks ALSO need to tabulate the cost of tabulating the previous cost, don't you?

Fortunately, the court is willing to accept an estimate, based on the "cost tabulation" tabulation cost, or we could be here forever...
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Ryunosuke (profile), 20 Aug 2016 @ 1:12pm

"... Starring John Steele as Batman, and Paul Hansmeier as the Boy Wonder. This week's episode, "Sometimes you just can't get rid of a bomb."
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