Team Prenda Slammed Again, Found In Contempt; Judge Blasts Their Attempts To Plead Poverty

from the nice-try,-guys dept

It's been a little while since we had a Team Prenda update, but suffice it to say, judges still don't seem to be buying their brand of bullshit, even as they get more and more desperate. The latest is the followup in the Lightspeed case in which Team Prenda made the incredibly poorly thought-out move of dragging Comcast and AT&T into the proceedings. Not only did Judge Patrick Murphy find that Team Prenda flat out lied to the court, he hit them with an order to pay $261,025.11 in attorneys' fees for wasting everyone's time.

Team Prenda has been avoiding paying that ever since. There was an amusing hearing back in February in which they weakly sought to justify the non-payment, first quibbling with Judge David Herndon that the original order to pay up was a "money judgment" rather than an order, in the belief that this would give them more flexibility in paying. That ridiculous argument was more or less dismissed out of hand by Judge Herndon quickly. Following that, John Steele and Paul Hansmeier specifically tried to plead poverty, arguing that they simply couldn't pay the amount. Judge Herndon said, effectively, okay: prove it. And while they filed documents that attempt to prove that, Judge Herndon is not buying it at all. In a ruling earlier this week finding Paul Duffy, John Steele and Paul Hansmeier in contempt, Herndon noted that even in filing financial statements, it appeared they were trying to deceive the court:

In the case where there has been no attempt to comply with the Court's order, plaintiff's counsel must show a "complete inability to pay." ... Plaintiff's counsel, "stated differently, . . . [has] the burden of establishing clearly, plainly, and unmistakably that compliance is impossible." ....

The Court finds that plaintiff's counsel has not met its burden. They submitted incomplete, and to say the least suspicious, statements of financial condition. Attached to each statement was a letter from their certified public accountant ("CPA"). In these letters, the CPA indicates a departure from generally accepted accounting principles. He further notes that plaintiff's counsel elected to omit substantially all of the disclosures required by generally accepted accounting principles. The Court finds these statements insufficient to establish plaintiff's counsel's inability to pay.

Given all that, he notes that Team Prenda "significantly violated an unambiguous order of the Court" and has tacked on an additional 10% to the original order, giving them until March 31st to pay up... or the amount will keep going up at $500 per attorney per day (so $1,500 more per day). After another 30 days, the amount will increase to $1,000 per attorney per day. Hansmeier is already begging for a reconsideration, but given how many times these guys have been called out for attempted deceptions in court, it seems unlikely he's going to have much luck.

Filed Under: anthony smith, contempt of court, david herndon, john steele, lightspeed, paul duffy, paul hansmeier
Companies: lightspeed, lightspeed media, prenda, prenda law

Judge Slams Prenda And Paul Duffy; Calls Them Out For Lying And 'Duplicitous Behavior'

from the not-going-well dept

We recently wrote about Judge John Darrah in Northern Illinois agreeing to sanction Paul Duffy of Prenda Law for some of his egregious behavior in filing a defamation lawsuit against Paul Godfread, Alan Cooper and a bunch of internet commenters. Today, Darrah released his ruling explaining all of this, and to put it kindly, he's not buying what Duffy is selling. Even without needing to get into the lack of an actual defamation case there is here, the judge has multiple reasons for issuing sanctions and completely rips Duffy to shreds for not just the questionable filing of the lawsuit in the case, but the attempt to cover up -- by flat out lying to the court -- how ridiculous the whole thing was.

As you may or may not recall, Duffy tried to keep the case in state court by doing a little trick whereby they added Paul Hansmeier's law firm, Alpha Law Firm, in an amended complaint (which would keep the case in state court since both the defendants and one of the plaintiffs would all be in Minnesota). Yet, as it quickly came out, the amended complaint was done through questionable means -- by apparently misrepresenting information to the court clerk, who told the court that Prenda's lawyer had misled her. So that attempt to keep it in state court totally failed, but Duffy then (on top of that) lied about the situation to the federal court.

Judge Darrah points basically all of this out and rips Duffy to shreds in the ruling. A few choice quotes:

When pressed, at the remand hearing on August 14, 2013, Duffy, counsel for Prenda, admitted he “filed substantially the same motion in the Southern District.”.... As discussed above, when asked what the Southern District of Illinois said about the motion, Duffy stated to the Court: “They denied the motion. They indicated - - the Court indicated that on the four corners of the complaint, it stated that it was a Minnesota corporation. However, the complaint also states that its principal place of business is in Minnesota.” .... However, the record reflects that the Southern District of Illinois Court said nothing of the sort. Duffy had the opportunity to address this lie in his response to the Motion for Sanctions and did not. To fabricate what a federal judge said in a ruling before another court falls well outside the bounds of proper advocacy and demonstrates a serious disregard for the judicial process.

Following this duplicitous behavior before the Court, Duffy sought to withdraw the renewed motion for remand, generously explaining that the reason for the withdrawal was “due to the apparent confusion arising from [the] motion.”...

[....] Prenda, through its counsel, Paul Duffy, filed a response to the Motion for Sanctions. In it, they argue that “Defendants have made no showing that attorney Hoerner was aware that service had been accomplished at the time he attempted to file the amended complaint.” (Resp. to Motion for Sanctions at 10 (emphasis added).) Demonstrating Hoerner was aware that service had been accomplished is not necessary to determine the deception inherent in Hoerner’s affirmative (and false) representation to Kent that service had not been accomplished.

Indeed, rather than explain their conduct, they seek to attack the form and procedure by which Defendants filed their Motion for Sanctions. Prenda contends it is entitled to the safe harbor provision under Fed. R. Civ. P. 11(c)(2), which provides that a motion for sanctions may not be filed “if the challenged paper, claim, defense, contention, or denial is withdrawn or appropriately corrected within 21 days after service . . . .” Here, however, Prenda does nothing to explain or withdraw its assertions regarding what the Southern District of Illinois purportedly said about Alpha. Moreover, in its motion to withdraw the renewed motion for remand, Prenda continues to stand on its rejected assertions, insisting that “there was not diversity jurisdiction in this Court” and that Prenda “vehemently disagrees with representations made by Defendants . . . regarding its motion, but nevertheless due to the apparent confusion arising from Plaintiff’s motion, Plaintiff seeks to withdraw it.” .... The purpose of Rule 11 is to, in part, emphasize “the duty of candor by subjecting litigants to potential sanctions for insisting upon a position after it is no longer tenable.” Fed. R. Civ. P. 11 1993 Advisory Committee’s Notes (1993 Amendments) (emphasis added). Moreover, sanctions under Section 1927 and pursuant to the Court’s inherent authority are not subject to the safe harbor provision.

[....] Grasping at straws, Prenda next asserts Defendants failed to serve their Rule 11 motion pursuant to Fed. R. Civ. P. 5 and that “Duffy has never consented in writing (or otherwise) to accept service of papers via electronic means.” ... This is clearly rebutted by the docket itself, which indicates that Duffy is an E-Filer of the Northern District of Illinois. “[S]ubject to the provisions of Fed. R. Civ. P. 5(b)(3), the Notice of Electronic Filing constitutes service under Fed. R. Civ. P. 5(b)(2)(D) . . . as to all E-Filers in a case assigned to ECF.” .... Therefore, whether or not Duffy realizes it, as an E-Filer, he has accepted service by electronic means.

[....] In a final act of audacity, Prenda, in response to Defendants’ Motion for Sanctions, contends that the “Court should award Prenda the fees it incurred in defending against Defendants’ patently frivolous motion.”

Needless to say, the court rules in favor of sanctions, noting Duffy's "unreasonable and vexatious conduct."

Filed Under: john darrah, paul duffy, paul hansmeier, sanctions
Companies: alpha law firm, prenda, prenda law

Confused Law Professor Cites Fraudulent Prenda Win As 'Proof' That There's No Problem With Statutory Damages

from the uh-what dept

The good folks over at EFF have a good review of the House Judiciary Committee's recent hearing on the scope of fair use, which we discussed earlier. It's a good read, but there's one note towards the end which is really incredible. One of the panelists, June Besek, of Columbia University, has been defending ridiculous statutory damages by arguing not only are they reasonable, but also that courts can handle circumstances where the damages awards should be lower based on circumstances.

However, as EFF points out, Besek's argument here is suspect, given that she just a few weeks ago sent a letter on this issue in response to the Commerce Department's green paper on copyright, in which she defends current statutory damages practices... by pointing to a ruling in a Prenda case making a defendant pay $6,000. Specifically, her letter notes the following:

There is no satisfactory rationale at this time for singling out individual file-sharers with regard to statutory damages. The majority of reported cases against individual file-sharers have been resolved on summary judgment or on default, with the statutory damage awards under $10,000.

And after the $10,000 is a footnote, where she points to three cases where courts granted awards of ~$6,000, including AF Holdings v. Bossard. You might recognize the name AF Holdings, better known as the shell company set up by Prenda Law which has been accused by multiple courts of being engaged in forgery and fraud in shaking down people into paying up. This seems like an odd choice for Besek to choose to support her position that statutory damages are not a problem, given that Prenda/AF Holdings has been using the threat of statutory damages on its bogus copyright claims to shake down millions of dollars from people without ever going to court.

In fact, the AF Holdings/Prenda fiasco is a perfect example of why statutory damages are so dangerous. They allow a new category of copyright trolls to go around sending out threat letters threatening the possibility of $150,000 awards, which lead many, many people to just pay up rather than go to court. For Professor Besek to use Prenda/AF Holdings as an example of how the system is working, at the very same time that the folks behind it are facing sanctions from multiple courts, have been referred to law enforcement and multiple local bars for discipline for their fraudulent actions, which were almost entirely predicated on using the threat of crazy statutory damages to make people cough up thousands of dollars is laughable.

And, it's not like Professor Besek used this example back when there was still some uncertainty about Prenda. She used in just a couple weeks ago, months after multiple courts had outlined the fraud AF Holdings was involved in. The fact that she would use that as an example of statutory damages working as intended suggests she is either ridiculously uninformed or dangerously confused about how statutory damages are used in practice.

Filed Under: copyright, fair use, june besek, statutory damages
Companies: af holdings, columbia university, prenda

Yet Another Court Not Happy With A Prenda Lawyer

from the order-to-show-cause dept

It's been, what, a week or two since we had a story about a judge somewhere being pissed off at Prenda/AF Holdings? You may recall that, over in Georgia there was one of the many AF Holdings/Prenda cases that was a bit more bizarre (if you can believe it) than the others. That is, in part, because rather than having the usual Paul Duffy/Paul Hansmeier/John Steele triumvirate doing the laughably bad lawyering, you had something... worse. Back in the early days, Team Prenda would hire local lawyers to represent them, and down in Georgia they found themselves with quite a peach in Jacques Nazaire, a lawyer who advertised his willingness to pop into court on your behalf via Craigslist, matching the sort of "go get 'em" attitude that Team Prenda seemed to appreciate.

This was yet another case where when the going got tough, AF Holdings/Prenda tried to turn tail and run by dismissing the case, but the defendant, in this case a guy named Rajesh Patel, fought back and sought sanctions from AF Holdings for the bogus lawsuit it had initially filed -- and the whole "forged" copyright assignment by Alan Cooper. Nazaire turned the whole thing into an ongoing circus. Soon after the fight over sanctions began in this case, Judge Wright in California famously issued his big ruling, calling out Team Prenda and AF Holdings for a variety of misdeeds. Patel's lawyer, Blair Chintella, sought to add that ruling to the record, leading Nazaire to bizarrely argue that the Judge in this case should ignore that California ruling because California recognizes gay marriage. Later, he tried again with a bizarre and nonsensical claim about hackers being after him. Then, he sought to file all future documents under seal because some of you people in our comments (yup, Techdirt comments were filed as a part of the case) said mean stuff about him and that was mean.

Throughout all of this, Chintella kept seeking additional evidence via discovery -- which Nazaire repeatedly appeared to ignore completely, or file nonsensical arguments why he wasn't going to comply. Elsewhere, though, Chintella was able to dig up a a series of recordings from GoDaddy customer service in which the same individual identified himself as John Steele, Alan Cooper and Mark Lutz in different calls. He also got Comcast to reveal that a key IP address that was presented in another case as being the IP address that uploaded the content in question, directly belonged to John Steele and Paul Hansmeier, further confirming that they were uploading their own works to file sharing sites (calling even further into question the legality of what they were doing with Prenda).

Oh, and Chintella sought to depose Mark Lutz, the purported head of AF Holdings, who simply didn't show up -- the start of a now repeating pattern of Lutz disappearing rather than showing up when required to by a court.

Still with documents flying back and forth, the judge eventually angrily told both sides to shut the hell up and to stop filing anything.

Having completed the other business he was working on, Judge William O'Kelley of the district court in Northern Georgia, has finally ruled in this case and he's still not at all pleased. He's clearly angry with both lawyers, but the majority of his anger is directed at Nazaire, whom he repeatedly upbraids for a variety of problematic actions. The end result is that he's clearly threatening sanctions, potentially against both lawyers, and will hold a hearing in which both lawyers will need to show cause why they should not be subject to such sanctions. But that's not all. He has also ordered Nazaire to produce the original copyright assignment allegedly signed by Alan Cooper, which is at the heart of this matter. O'Kelley does not appear at all interested in hearing any excuse for not showing up with the original. Among a variety of things he orders to happen for the hearing, the one bit he italicizes is the following:

Specifically, plaintiff must produce the original assignment agreement for inspection.

Note the "must" in there. Somehow, I doubt that he's going to be satisfied.

The Judge is clearly unhappy about Mark Lutz not showing up, and finds Nazaire's excuses to be ridiculous:

Plaintiff’s excuses for Lutz’s failure to attend the deposition are beyond frivolous. Plaintiff’s “justification” for the failure of plaintiff’s managing member to attend his deposition is that Lutz “has been deposed before,” which plaintiff considers sufficient to conclude that “the defense wants Mr. Lutz to fly to Georgia by his own expense for the sole purpose of being humiliated.” ... (“Mr. Lutz has every reason not to appear at a deposition which may also be attend [sic] by individuals who follow a website named dietrolldie and which has identified him as a troll as well.”) (emphasis in original)). However, Lutz was never deposed in this case. The fact that this would not have been Lutz’s first deposition on his relationship to AF Holdings is irrelevant. The fact that there are individuals on the internet adverse to plaintiff’s litigation strategy is irrelevant. However, the court’s ability to address blatant and willful discovery violations is very relevant.

The court finds that Lutz failed to attend a properly noticed deposition and that Lutz’s failure to attend was not justified. Rather than provide any meaningful explanation for Lutz’s failure, plaintiff offered bizarre tangents about how “any new deposition of Mr. Lutz or any interrogatories or any production responses will be sought solely for the purpose of providing a good laugh for” several websites.

He further notes that the law requires him to impose attorneys' fees in this situation, though he'll figure out how much after the show cause hearing. Of course, I'm wondering if Mark Lutz will ever make a reappearance. As we noted recently, while his signature showed up on a recent document, he still hasn't explained another one of his mysterious disappearances, which Team Prenda insisted he would explain.

While Judge O'Kelley makes it clear he's not interested in rehearing stories of Prenda/AF Holdings' actions elsewhere, he's solely focused on misconduct in this case, and he certainly suggests there's been a fair amount of that. Beyond calling out Nazaire for arguments that are "legally frivolous and generally incomprehensible," as well as "nothing more than disjointed assertions that are completely immaterial to the case," the judge has a long list of things he's concerned about and wants to hear Nazaire try to explain:

• Nazaire's failure to properly disclose everyone who had a financial interest in the matter
• Nazaire's potential failure to properly list all of the lawyers working on the case (earlier, the judge highlights that when Nazaire filed the complaint, he appeared to use Brett Gibbs' email and phone number.)
• Nazaire's "failing to make a reasonable inquiry into the facts and the law before filing this case."
• And also "whether Nazaire facilitated vexatious and frivolous litigation by maintaining a meritless suit, filing frivolous and unwarranted motions, and making frivolous and unwarranted objections to defendant's discovery requests."

And those are just the issues directed at Nazaire himself. There are separate issues concerning AF Holdings, mainly concerning potential sanctions for a variety of activities, but also whether (as other courts have found) the company committed fraud on the court by filing a case where they had no standing, based on a forged copyright assignment.

The Judge also scolds Chintella for "a lack of familiarity with basic evidentiary and procedural rules" and also asks him to further explain the effort to crowdfund money to hold Lutz's deposition. Nazaire suggests this is sanctionable, and while O'Kelley seems unsure exactly what the problem is, he wants to hear Chintella's defense of this action.

Judge O'Kelley also adds the following "note of caution" which suggests he's not interested in any kinds of games, though given Prenda's history, they seem almost unable to avoid trying to play games. It will be a measure of incredible self-restraint for them to actually abide by the following:

In case this order did not adequately drive the point home earlier, the court is not pleased with how this litigation has progressed. Failure to attend the show cause hearing will not be well received. Failure to attend will result in severe sanctions and may result in referral to the State Bar of Georgia. Failure to directly address the court’s concerns will result in equally severe sanctions.

Notwithstanding this court’s prior order prohibiting the parties from filing additional motions, the parties may file a supplemental brief addressing the court’s concerns to the extent that the supplemental brief provides facts not already present in the record. The parties are strongly encouraged to bring any relevant evidence to the show cause hearing. Specifically, plaintiff must produce the original assignment agreement for inspection. If a party wishes to present testimony that it deems critical to its case, the party should be prepared to solicit that testimony through a live witness. The parties are on notice that they may not use affidavits as a means to circumvent cross examination.

Can't wait to see how that hearing turns out.

Filed Under: blair chintella, jacques nazaire, john steele, mark lutz, paul hansmeier, rajesh patel, william o'kelley
Companies: af holdings, prenda, prenda law

Prenda's Paul Duffy Claims To Be 'Too Devastated' By Nelson Mandela's Death To Comment

from the wtf dept

Yesterday, lawyer Nick Ranallo, one of the many lawyers who's been instrumental in taking down Prenda Law, filed a notice in the Navasca case, saying that they (he and his client, Joe Navasca) were satisfied that Prenda had paid up the attorneys fees owed, which Judge Chen had ordered back in July. The amount was $22,531.93, which is significantly less than other courts have told Prenda to fork over in other cases (totaling up to about $500,000 last I'd checked), and it appears that Team Prenda decided to fork over the cash, perhaps out of the nearly $2 million the company took in last year.

But the really incredible part in this is that when reporter Joe Mullin, from Ars Technica, reached out to Prenda's Paul Duffy to comment on whether or not Prenda had paid up the fees, Duffy responded in the most bizarre way possible:

I hope you are doing well. I am devastated by the loss of Nelson Mandela and I hope you join with President Obama in remembering his legacy. He ranks with Mohandes Ghandi, Dr. King and President Kennedy in the struggle for human rights over the past 50 years. There are larger issues than the ability to steal porn... You seem like a nice guy. Thanks.

Yes, the copyright porn trolling lawyer, whose firm has been implicated in setting up bogus honeypots to shake people down, in forging signatures and in efforts to publicly embarrass people (oh, and whose wife more or less admitted that her husband was engaged in interstate extortion) is now claiming that he's "devastated" by the loss of Mandela, and talking about "the struggle for human rights." That's a laugh. I'd guess he's a bit more devastated about the hundreds of thousands of dollars he's on the hook for and the criminal and tax evasion charges he may be facing before very long.

Filed Under: joe navasca, nelson mandella, nick ranallo, paul duffy
Companies: prenda, prenda law

Court Says Team Prenda 'Flat-Out Lied' To Court; Hits Them With $261k More In Attorneys' Fees To Pay Up

from the boom dept

Another court, another set of problems for Team Prenda: Paul Hansmeier, Paul Duffy and John Steele are certainly in trouble, and the damage just keeps adding up. Following yet another big loss for Team Prenda in Illinois, in Lightspeed Media v. Anthony Smith, we noted that Prenda's ridiculous decision to sue Comcast and AT&T for failing to hand over names in that case was backfiring in a big way, since both of those companies asked for attorneys' fees as well. Duffy, Hansmeier and Steele did their usual dance: filing motions arguing that none of them did anything wrong, that the ruling should be overturned, and (of course) that there was a violation of due process because they weren't informed about these proceedings. This is basically the same crap they file every time.

Southern District of Illinois Judge Patrick Murphy is having none of that. In a scathing opinion he rips to shreds the arguments of Duffy, Hansmeier and Steele. Beyond noting the basic procedural deficiencies in their own filings (once again, they don't seem to actually understand the law and just fling as much shit at the wall as possible, and the judge clearly recognizes this), he also appears to be well aware of the larger scam Team Prenda has been pulling. There's a long discussion about the claim that Hansmeier and Steele weren't properly served, in which the judge makes it clear this is simply beyond belief. Here's just a snippet of a much longer discussion:

First and foremost, Steele’s claim that he never got notice of Smith’s motion for fees is baseless. A review of CM/ECF records reveals that notice of Smith’s motion for attorney fees (Doc. 61) went to numerous email addresses, including: docket@wefightpiracy.com—an email address used by both Steele and Paul Duffy. Therefore, it is irrefutable that Steele had actual notice of Smith’s motion for attorney fees prior to the Court’s order granting the motion.

The judge also points out the tremendous evidence that Steele, Hansmeier and Duffy are working quite closely together on all of this anyway.

Aside from being from the same firm, there is other evidence suggesting these three men worked in concert with one another. First, Duffy, Steele, and Hansmeier used each other’s CM/ECF login information, and/or filed documents on behalf of one another. For example, both Steele and Hansmeier used Duffy’s CM/ECF login information to enter their appearances, or Duffy attempted to do so for them (See Doc. 11, 15); Hansmeier also used Steele’s CM/ECF login information to file his motion to continue, or Steele filed it on Hansmeier’s behalf (Doc. 73). Second, the similarities in documents filed by Duffy, Steele, and Hansmeier indicate an ongoing relationship. For example, in the instant motions to vacate/reconsider, the three men use identical formatting from the caption, to the font, and the signature block, and the substance is largely the same...

Then, of course, there's the citation to the numerous other cases that have found against Team Prenda, and noted that those three are clearly in control. The judge also notes that even if they didn't have notice, they clearly had notice in time for a later hearing and still their filings did not state any actual grounds for relief. Basically, the judge points out that they absolutely knew about all of this, and he won't overturn the original decision because for all the shit they threw at the wall, none of it actually stuck.

But then the judge goes further. He calls them liars. He doesn't dance around it. He flat out calls them on it.

The Court also finds that Duffy, Hansmeier, and Steele exhibited a “serious and studied disregard for the orderly process of justice.” .... These men have shown a relentless willingness to lie to the Court on paper and in person, despite being on notice that they were facing sanctions in this Court, being sanctioned by other courts, and being referred to state and federal bars, the United States Attorney in at least two districts, one state Attorney General, and the Internal Revenue Service. For example, at the November 13 hearing, Hansmeier skirted the Court’s direct questions, Steele made feigned protestations, and both flat-out lied about their association with Prenda Law, Inc. in the face of documentary evidence on the record in this case, and their sworn declarations in other cases.

In the end, the judge grants all the requests for attorneys' fees, adding yet another $261,025.11 to the rapidly increasing total from other cases. I imagine it won't end there, though it's unlikely anyone will see any of that money. Instead, we're all still waiting for the main act, when the criminal charges almost certainly arrive.

Filed Under: anthony smith, john steele, lies, patrick murphy, paul duffy, paul hansmeier
Companies: lightspeed, lightspeed media, prenda, prenda law

Latest Team Prenda Shenanigans: Arguing Nevis Law Applies In California; Also Mark Lutz Makes An Appearance... Sorta

from the good-luck-with-that-argument dept

John Steele and Paul Hansmeier (who various courts have made clear, make up the core of "Team Prenda") are engaged in so many different lawsuits in which they're getting hit with so many different orders to pay up for their questionable behavior that it may be difficult to keep up. However, in Northern California last month, Judge Edward Chen ruled that Steele and Hansmeier are liable for sanctions and attorneys' fees awarded against "AF Holdings," the semi-mysterious shell company set up in Nevis, which many people (including courts) have recognized was almost certainly set up by Steele and Hansmeier themselves as some sort of way to (a) hide the fact that they were representing themselves and (b) to hide where the money goes. Of course, as court after court has seen through this charade, things aren't looking good for Steele and Hansmeier who should be fearing the eventual law enforcement response to all of this, which is almost certainly approaching.

However, they just can't resist fighting the fight, because that's what they do. When backed into a complete corner, Steele and Hansmeier tend to go into attack mode, trying any and every argument they can possibly think of, no matter how insane. But, and here's the key, they make those arguments with extreme confidence, as if only a moron would think they were wrong. The reality, of course, is that almost all of their claims are laughable. Take for example, the latest one in response to Judge Chen's ruling. Steele and Hansmeier have filed very, very similar filings that (among a few other arguments) try to argue that they cannot be found to be considered the "alter ego" of AF Holdings because Nevis law says that can only be done with the permission of the people being claimed to be the alter ego.

Under Nevis law, accordingly, a person may become an alter ego of a limited liability company only with his or her express consent.

Yes, AF Holdings was registered in Nevis, but if Steele and Hansmeier automatically think that means they can avoid liability in California, their legal skills are even worse than previously expected. Remember AF Holdings was the one who sued first... in California. The issue here is who is responsible for the absolutely bogus lawsuit. And the Court has very good reason, and significant evidence to support, that it's John Steele and Paul Hansmeier. Pretending that registering the company in Nevis somehow gives them a get-out-of-jail-free card is laughable.

Meanwhile, across the country, in the one case where Prenda actually seemed to be having some success, in front of former RIAA lobbyist Beryl Howell, John Steele has withdrawn as counsel and substituted Prenda buddy Paul Duffy. That, alone, isn't particular noteworthy -- these three guys seem to pass around cases like a group of high school kids under the bleachers passing around a joint. However, what is noteworthy is that in filing this, Steele notes that the "Plaintiff consents to Attorney Steele's withdrawal in this matter, as noted by his signature below." Who's the plaintiff? Why, it's the very same AF Holdings. And whose "signature" is it? Why, it's "Mark Lutz." And the date of the signature is... November 5th.

That's interesting. Because back at the end of September, Mark Lutz continued his magic disappearing act by not appearing in a Minnesota court, despite being ordered to be there. Hansmeier was given until the next day to explain the disappearance, and filed a substance-free brief that basically said, "I'm sure Lutz has a good reason, which he'll tell you about when he can." Specifically, Hansmeier told the court:

Based on my prior experience with Mr. Lutz, including Mr. Lutz's in-person attendance before this Court on August 5, 2012, I believe that Mr. Lutz will be able to provide a good-faith reason for failing to make his flight to Minnesota.

While there has been plenty of activity in the docket for this case (including Hansmeier's weak attempt to get magistrate judge Franklin Noel kicked off the case), there has been nothing from Lutz since Hansmeier's promise on October 1st that Lutz would explain what happened. In fact, he hasn't appeared anywhere.

But... suddenly his signature appears on November 5th in a different circuit? Hmm. It would appear he's fairly tardy in getting in his explanation. Of course, there's been some chatter on Twitter wondering if this is really Lutz's signature. We have examples of his actual signature on previous filings, so you can compare. Here's the latest one, supposedly from November 5th: And here's his notarized signature from May 2nd: My gut reaction is that those were not written by the same person, but I'm not a handwriting expert, so we'll give Lutz the benefit of the doubt. I found another Lutz signature that looks more like the first, but it's not notarized -- and I've got a lot more confidence in the notarized version.

Of course, here's the issue. If we give Steele and Lutz the benefit of the doubt here that the signature is legitimate -- and I'm willing to do exactly that -- it would appear that they've got a different problem to deal with: the fact that Lutz never explained his absence in Minnesota. I'm trying to think if there's any other option. Either Lutz has flat out ignored a court order in Minnesota, or someone forged his name in DC. If anyone can come up with any other option, I'm all ears. I guess there's the possibility, also, that both things are true -- that he both ignored a court order and had his signature forged -- but that doesn't make the situation any better...

Filed Under: edward chen, franklin noel, john steele, jurisdiction, mark lutz, nevis, paul hansmeier, signatures
Companies: af holdings, prenda, prenda law

Paul Hansmeier Dismisses Case That His 'Client' Claims Was Filed Without Her Permission

from the about-time dept

So, remember how Paul Hansmeier's latest scheme has been to file a bunch of cases against small businesses, claiming their websites violated the Americans with Disabilities Act? The same lawyer who is getting slammed by courts all over the country for his shady copyright trolling practices appeared to be up to a new form of trolling -- a view that was strongly supported when one of the plaintiffs in one of these ADA cases, Lily Poss, claimed that she had "no idea" that Hansmeier was filing lawsuits on her behalf. That's a major no-no by a lawyer already very deep in trouble. And it took all of about a day for Hansmeier to file to dismiss the case in which he "represented" Poss -- though he did so "without prejudice," meaning that the case could potentially be refiled again in the future.

Update: And... another one's gone too.

Filed Under: ada, disabilities, lawsuits, lily poss, paul hansmeier, trolling
Companies: class justice, prenda, prenda law

Comcast And AT&T Want Their Cut From Prenda Too

from the welcome-to-the-big-leagues dept

Last week, we noted that yet another court had ruled against Prenda. In this case, rather than their own shell companies, Prenda was representing Lightspeed, a porn company which already had a questionable reputation. Also, this was a case where Prenda tried to use a "hacking" claim rather than a straight copyright claim, in an attempt to get the case in state court, rather than the more savvy federal courts. Finally, when the ISPs protested having to turn over names, the brilliant Prenda strategy was to sue the ISPs as well. So, now that the court found "the litigation smacked of bullying pretense," it's not just the random guy, Anthony Smith, seeking legal fees... but Comcast and AT&T as well. Late last week, Comcast and then AT&T each asked for John Steele, Paul Hansmeier and Paul Duffy (by name) to each pay their attorneys' fees as well. And, as you might imagine, they have some pricey attorneys. Comcast's filing goes into quite a bit of detail about the questionable actions taken by Team Prenda in this case (and in other cases). AT&T's filing is much shorter and more or less says "you already know what these guys have been up to, so no need to repeat it here."

Not surprisingly, Hansmeier quickly filed an angry response, arguing that there is no possible reason why he should have to pay attorneys' fees, and even arguing that there's still no evidence of wrongdoing... by himself (leaving the others out to dry). Basically, he argues that while he was involved with the case briefly, none of his actions were the problematic ones. He also claims that the requests for attorneys' fees isn't timely, since Team Prenda had dismissed the case six months ago -- leaving out the ruling from just last week which found Team Prenda's actions problematic and subject to attorneys' fees. Amusingly, he also argues that Comcast laying out in great detail all of the bogus actions of Team Prenda in this case, as well as how multiple other judges have called out their behavior and alerted law enforcement about their activities for criminal investigation, is nothing more than an ad hominem attack.

Sorry, Paul, if someone calls you a morally bankrupt scamming loser -- that would be an ad hominem attack. Comcast laying out in great detail how judges have ruled that you committed fraud on the court in very similar cases, and ordered you to pay attorneys' fees (while also alerting law enforcement, the IRS, local legal bars and others to investigate), is presenting relevant information to the court. It might help to learn the difference.

Filed Under: anthony smith, attorneys fees, john steele, paul duffy, paul hansmeier, steve lightspeed
Companies: at&t, comcast, lightspeed, prenda, prenda law

Turns Out Paul Hansmeier's ADA Lawsuits Were Filed Without Knowledge Of The Plaintiffs

from the is-he-just-looking-to-pile-on-more-problems? dept

Last week, we wrote a couple times about Paul Hansmeier's new lawsuit strategy, which had some similar characteristics to ones he's had in the past: they appear to be nuisance lawsuits designed to quickly extract settlements, rather than for any legitimate legal reason. He had done this in the past, obviously, with copyright trolling, but then again with class action lawsuits. The latest round involved claimed Americans with Disabilities Act (ADA) violations, mainly arguing that various small business websites violated the ADA.

Remember, with the copyright cases, Hansmeier is now in trouble for being involved in bogus shell companies and forged signatures. With the class action objections, his clients were mostly close family members. Some of our commenters quickly speculated about whether or not the "clients" in these ADA cases were real... or, if they were, if they knew the lawsuits existed. Well, wonder no more. A local newspaper, The Mankato Free Press, has quite a story, detailing how at least one of the clients had absolutely no idea that Hansmeier was filing lawsuits on her behalf:

The plaintiff named in the Family Dentistry lawsuit is Lily Poss, a visually impaired woman from North Mankato. Poss said she supports the organization's mission statement. However, she's not sure she can support Hansmeier after learning about the tactics he's using.

Poss had no idea that lawsuit, nor another one involving a business called Bancwest Investment Services, had been filed in her name. It was her understanding she would be providing information about websites that would be used to educate businesses, she said. She said it was possible that lawsuits would be filed if businesses didn't comply, but she didn't realize Hansmeier and Class Justice would be going after small businesses such as Family Dentistry.

The article notes that Poss signed up for this after getting a call from a cousin she hadn't spoken to in years -- named Allan Mooney. You may recall that name from previous Prenda lawsuits, where it was spelled many different ways (Allan Mooney, Alan Mony, Alan Moony, etc), and who later told a reporter that he didn't know he was involved in these lawsuits. Of course, now you have to wonder about that if he's signing up his long lost cousins for the latest wacky scheme from Hansmeier to shakedown companies.

Hansmeier, quite incredibly, is claiming that he's working for the good of disabled people, tossing out this astounding line:

"We consider ourselves to be an advocacy association more than we consider ourselves a law firm," he said. "With the porn reputation, I wanted to shift my focus and focus on something more positive. We're really focused on doing it right so anyone who hears about us says, 'Yeah. This is the right way to go about it.'"

I know. Stop laughing. Of course, no one thinks this is the right way to go about it. The same reporter asked Ken Rodgers, the past president of the American Council of the Blind chapter in Minnesota, who agreed that websites that were hard for the blind to read can be a problem, but also made clear that he did not support what Hansmeier was doing at all, and, in fact, felt that it was just another way to squeeze money out of companies:

"Is he trying to make websites accessible, or is he just banking on the lawsuit revenue?" Rodgers said. "All this is doing is making the attorney wealthy, not fixing the problem. I would much rather have somebody make a business case to a business that has a website."

Furthermore, for all of Hansmseier's claims of doing "advocacy" work, when the reporter asked him to detail what advocacy organizations he's working with, he couldn't name any.

Filing a lawsuit on behalf of a client who hasn't actually agreed to be a part of that lawsuit could be a huge problem (though Hansmeier likely has bigger problems ahead on the priority list). Also, there's at least some potential that these plaintiffs may end up on the hook for attorneys' fees for the filing of bogus lawsuits.

Either way, you have to imagine that the almost certainly ongoing criminal investigation of Hansmeier's activities detailing the list of things he's done, the fact that he's continued to work on questionable schemes like this one, even after being slammed in courts all over the country for previous activities, won't reflect well on him.

Early on, I mentioned that Steele and Hansmeier really reminded me of some people I knew who were absolutely positive they were smarter than everyone else, when they really weren't. It's like they're playing chess by thinking they're the best chess players in the world because they can think one move ahead, while the people they're playing against can clearly see many moves ahead. It's astounding that they don't realize that each move they make only makes things worse and worse and worse.

Filed Under: ada, disabilities, flint million, lily poss, paul hansmeier, shake downs
Companies: class justice, prenda, prenda law