Prenda Continues Character Assassination Of Alan Cooper

from the do-they-think-this-helps-them? dept

You may recall that Prenda briefly tried a strategy of claiming that Alan Cooper was mentally unstable and off his meds in trying to explain to Judge Otis Wright why Cooper said he had absolutely nothing to do with AF Holdings, despite his purported signature being on court documents as the representative from the company that Judge Wright and many others have said is clearly a shell company owned and controlled by Prenda lawyers John Steele, Paul Hansmeier and Paul Duffy. The whole "off his meds" argument didn't get much play in Wright's courtroom, but apparently Prenda hasn't given up on that strategy.

Last week, in yet another Prenda case, this time in Arizona, a local lawyer hired by Prenda, named Steven Goodhue, decided to double down with fanciful tales of Alan Cooper. In this case, the judge, G. Murray Snow, read Judge Wright's order and rightfully pointed out that it raised serious questions about the case in his courtroom, and asked Prenda/AF Holding to explain why the whole case shouldn't be dismissed. There will be hearing on this on Friday, but in the meantime, Goodhue decided to file a response that has to be read to be believed. In this case, another mysterious name showed up besides just Cooper's: Raymond Rogers. Goodhue responds to questions about who signed the documents by insisting that it's exactly who it said on the document:

The persons who signed Exhibit B to Plaintiff’s complaint are Raymond Rogers and Alan Cooper. Although Cooper has repudiated his corporate representative status, Cooper’s repudiation lacks credibility for the reasons set forth herein.

And then we dig into why Goodhue/Prenda insists Cooper is not credible, which goes deep into conspiracy theory territory, implying that EFF is somehow paying off Cooper to come out against Prenda:

Alan Cooper’s repudiation of his corporate representative status is not credible. To put Cooper’s repudiation in its proper context, the Court might consider the following questions: (1) why is an individual from Northern Minnesota testifying before courts across the United States in copyright infringement actions; (2) how is he paying for all of this; and (3) when did he get his start? Cooper’s testimony at a March 11, 2013, hearing before Judge Wright provided some clues.

Well, the answer to the first question is fairly easy: he was testifying in California (as far as I know the only court "across the United States" that Cooper has testified in) because Judge Wright ordered him to show up, along with Team Prenda, who chose not to show up. As for paying for that one trip, it's already been stated that EFF paid for that trip, but I don't see how that's damning in any way. Cooper had to show up one way or the other, and EFF covered his travel budget.

At the hearing, Cooper revealed that he first became involved in this nationwide effort when he received an anonymous text message with contact information for EFF panel attorney, Paul Godfread. The text message informed Cooper that he needed to contact Godfread to avoid serious liability.... Shortly thereafter, Cooper, through attorney Godfread, filed a lawsuit against attorney John Steele and others seeking $4.6 million in damages for the misuse of his name.... Contemporaneously with those efforts, EFF panel attorneys from across the nation began using Cooper’s repudiation to launch collateral attacks on Plaintiff’s copyright infringement lawsuits.... These attacks met with limited success, with one notable exception—the sanctions order issued by Judge Wright. EFF panel attorneys paid for Cooper and Godfread to fly from Minnesota to the Los Angeles, California hearing before Judge Wright and Cooper was escorted around at the hearing by an EFF staff attorney who has spearheaded the EFF’s efforts to stymie copyright enforcement nationwide.

This is a bit of revisionist history, but it ignores the key point: which is that someone whom Prenda/AF Holding insisted he had signed a key document, explained that he never had, and presented quite detailed info suggesting that John Steele had been signing his name. And, let's not forget evidence in other cases that John Steele clearly claimed to be Alan Cooper at times. All of that seems relevant. The fact that lots of courts were alerted to the same possible fraud on the court isn't "collateral attacks," it's relevant information in multiple cases involving what appears to be pretty blatant and outright fraud.

The filing digs deeper into the conspiracy theory, arguing that Godfread is representing Cooper just to boost his own business, which is the type of claim you make when you're completely desperate and have no real argument. From there it descends into a massive character attack on Alan Cooper. It lays out Cooper as being a close friend of Steele's who "joined Steele’s family for dinner over 100 times" and "babysat Steele’s daughter," but who ran into some financial difficulties and asked Steele for any job leads. He then claims that Steele explained the whole copyright trolling business to Cooper, and Cooper wanted to get in on it, with Steele's help, though eventually he didn't go that route:

Steele described the litigation and his business to Cooper. At some point in early 2011, Steele and Cooper discussed how a friend of Steele’s was exploring opportunities relating to purchasing and marketing adult content. Cooper expressed interest in learning more about these opportunities and Steele offered to help him learn more. Eventually, Steele and Cooper agreed that Steele would help Cooper form a business entity that would allow Cooper to pursue these opportunities. He spoke to Steele many times about this project. Cooper was overheard by his long time friend, Brent Berry, asking Steele, “How’s my porn company doing?” He further joked about never having to worry about having beer money again. Cooper’s then-wife was against Cooper’s participation in the adult industry. They regularly fought about this issue, and these fights were overheard by multiple people, including Steele and a mutual friend, Jason Flesher.

Those statements about "how's my porn company doing?" came out in that earlier filing, but many people noted that if Cooper was actually running the company, that's not the kind of question he would ask, so it only served to raise more questions about Prenda/Steele's involvement. So, in this filing, they try to work around that by claiming that Cooper wasn't talking about AF Holdings, but about a different company Steele was supposedly going to set up for him, but that never actually happened. Again, if that's true, that doesn't make any sense, because if he didn't go forward with it, why would he ask how his "company" was doing?

Cooper ended up not moving forward with the ideas Steele proposed to him, but he continued to express interest in connecting with people in the industry to learn more about the business. Steele offered to introduce Cooper to Mark Lutz, who operated two companies, AF Holdings, LLC and Ingenuity13, LLC. Id. Specifically, Steele informed Cooper that he could volunteer as a corporate representative for these companies in order to gain exposure to the industry and people who could help him. Id. In this way, Cooper could identify opportunities for himself, and possibly develop partnerships with industry insiders. Cooper participated in a limited number of transactions in the latter half of 2011, including acknowledging two assignment agreements on behalf of AF Holdings, LLC.

Again, this doesn't make any sense. Being the "corporate representative" does nothing to help him get more exposure in the industry, and of course this directly contradicts Cooper's own testimony and claims. From there, we go deeper into the character assassination of Cooper. The filing makes some fairly serious allegation against Cooper including that he was "usually inebriated and acting aggressively," threatening people staying in Steele's cabins, that he was constantly asking Steele for money and coming up with "half-baked business ideas." Then he accuses Cooper of outright theft and property destruction:

In September 2012, due to this worsening behavior, Steele asked Cooper to leave his property... Cooper was extremely upset and embarked on an extensive campaign of revenge.... Cooper used a chainsaw to remove large portions of load-bearing walls in Steele’s guest cabin, tore down nearly every interior wall in the guest cabin, stole 4 rifles, 1 shotgun and 5 pistols Steele stored on his property, threatened prospective buyers of Steele’s property, cut down significant acreage of wood and unlawfully removed it from Steele’s property, and stole hundreds of items, including tools, equipment, lumber, and virtually every item that was not bolted down in Steele’s kitchen. Id. Cooper even stole a large trailer of Steele’s that Cooper used to haul away entire rooms of furniture from Steele’s cabin.

Those are pretty serious charges, and I wonder if there's a police report to support those claims filed at the time. Steele further claims that Cooper demanded "a lot of money" from Steele or that "he would be sorry for kicking him out," and a couple months later, Cooper and Godfread carried through with their threats. They also claim that "Over time, Cooper’s accusations against Steele and Plaintiff have changed." Having followed this case pretty closely, I've yet to see any changes to the accusations. I've seen Steele's story change repeatedly, but not Cooper's.

Also, given the character attacks on Cooper, it seems odd that Goodhue/Prenda/Steele appear to be arguing (1) Cooper is mentally unstable, unable to hold down a job, not very intelligent or capable and (2) that he's masterminded a huge sneaky scam that involves first having Steele get him involved in copyright trolling, and then turning around and shaking down Steele for forging his name on various documents. The first doesn't match very well with the second.

At this point, it's clear that at least one person is clearly flat out lying in the various cases concerning Alan Cooper, and despite the character assassination attempts, I'd argue that Cooper has been significantly more credible from the outset.

Filed Under: alan cooper, arizona, g. murray snow, john steele, otis wright, paul duffy, paul hansmeier, steven goodhue
Companies: af holdings, prenda, prenda law

Ex-Prenda Lawyer Brett Gibbs Pleads Poverty To Judge Wright

from the like-the-folks-you-shook-down? dept

While Brett Gibbs has "parted ways" with Prenda and its copyright trolling, from all appearances he was an instrumental part of many of its efforts. Of course, the three main players, John Steele, Paul Hansmeier and Paul Duffy, were quick to throw Gibbs under a bus in Judge Wright's courtroom after Gibb's repeatedly told courts that he was little more than a puppet for Steele and Hansmeier. In Judge Wright's order, however, he lumped Gibbs in with Steele, Hansmeier and Duffy as being jointly and severally liable for the amount owed.

While Judge Wright's most recent order told Gibbs to officially withdraw from the cases, it doesn't mean that Gibbs has been let off the hook for payment. In response, it appears that Gibbs is basically begging Judge Wright for mercy, highlighting that he's completely broke and has expensive medical bills due to his brain cancer. It is a sob story, and you do feel bad for the guy... but then you remember some of his actions during the course of all of these cases, including more than a few absolutely ridiculous claims and tactics in this case and in how he dealt with opposing counsel. And, of course, there's the fact that he was involved in an operation that is being widely accused (by a federal court judge, among others) of perpetrating a massive shakedown scheme, threatening people with a lawsuit for gay porn if they don't pay up.

Yes, it's sad that Gibbs got brain cancer. I don't wish that on anyone. And it's sad that he's got less than $500 in his bank account and over $50,000 in debts. But, perhaps he should have thought of all of that before getting involved in a scheme that threatens thousands of people with highly questionable lawsuits if they don't pay up. Still, the main targets of Judge Wright's focus are clearly Steele, Hansmeier, and Duffy, so it'll be interesting to see if he agrees to let Gibbs off the hook in some manner.

Filed Under: brett gibbs, john steele, otis wright, paul duffy, paul hansmeier
Companies: prenda, prenda law

Prenda Lawyer Says Georgia Court Should Ignore Judge Wright's Order Because... Look! Hackers!

from the great-moments-in-lawyering dept

Remember Jacques Nazaire? He's the local counsel for Prenda in a case in Georgia who was trying desperately to get the judge there to ignore Judge Wright's order in California, which lays out how Prenda's lawsuits are highly questionable, and likely against the law. He was so desperate that he said the judge should ignore the ruling in California because California recognizes gay marriage, among other differences, despite that having nothing to do with anything related to the actual case (which covers federal copyright laws, rather than state laws, and which was filed in the case to provide additional background, rather than as any sort of binding ruling).

Well, it appears that Nazaire seems to believe that if he just keeps telling the court crazier and crazier things, perhaps it will ignore Judge Wright's ruling. The latest filing tries, once again, to give the judge in Georgia a reason to ignore Judge Wright's ruling, but again it doesn't make much sense. The filing is rambling and somewhat wacky, seemingly trying to argue that, even though Prenda and AF Holdings are implicated in both cases, they're completely and totally unrelated. He also seems to argue that these filings are just designed to rack up higher billing fees. Note, for example, the slightly paranoid use of capital letters:

That motion was NOT written by the undersigned; nevertheless the defense has filed it in THIS docket apparently for two reasons. 1) to bill for the same and 2) to give THIS Court the impression that either the undersigned or a friend of his drafted and filed the same.

But where it gets really wacky is when Nazaire just starts tossing in totally random claims about hackers:

Why would the defendant in this case file a copy of a motion (ECF No. 31, Defendant’s Exhibit B) from the California case and into THIS docket when that motion has nothing to do with this case?

The undersigned does not know the answer to that question. However, it must be noted that defendants (not the one herein) in these types of cases, typically employ various crafty and intimidating schemes against prosecutors and plaintiff’s attorneys. A newspaper article mentioning other types of intimidation is attached hereto as Plaintiff’s Exhibit A.

What is Exhibit A, you ask? Why it's a random story about hackers claiming to be a part of Anonymous hacking into Paypal. What does that have to do with anything? The answer is nothing.

Here's what I find most incredible about Nazaire's line of reasoning. It is basically "please ignore this other case where the same companies that I'm working for have been called out for fraud on the court, because that's totally unrelated, even though they're the same companies" while at the same time saying "we can't trust anything the defense says because, hackers! And, as proof, here's a random totally unrelated story about hackers."

He goes on to suggest that these hackers are after him, because some moron sent him a stupid email.

Furthermore the undersigned has been personally harassed by these types of defendants (not the defendant in this instant case nor the individuals listed in Exhibit A) because of THIS case alone. (Please see Plaintiff’s Exhibit B attached hereto).

Exhibit B is a silly email from someone using the email address "evilpiratemonkey@gmail.com" saying:

You are about it get justifiably screwed by the justice system.

It's nice to see.

You aren't very smart, are you?

Of course, this is a stupid email by whoever sent it, but it's hard to see how that's necessarily "harassment," nor does it show that the person who sent that email is one of "these types of defendants." It's just a stupid email from someone mocking Nazaire (the email address should have been a giveaway on that front).

Either way, if I'm the judge in this case, each of these filings only makes me more interested in whatever must be in Judge Wright's order...

Filed Under: georgia, hackers, jacques nazaire, otis wright, rajesh patel
Companies: prenda, prenda law

Bad Day For Prenda Continues: Judge Rejects Stay, Adds $1k Per Day For Each Day They Don't Pay Up

from the couldn't-happen-to-a-nicer-bunch-of-people dept

Prenda's not having a very good day (or month, for that matter). We noted yesterday that Paul Hansmeier had asked the appeals court to put a stay on the attorney's fees awarded by Judge Otis Wright in California. The court rejected the request, partly on procedural grounds, noting that you have to put in the request at the district court first, not jumping the gun and going straight to the appeals court. Soon after that, the lawyer representing many of Team Prenda, Heather Rosing, filed for a stay in the district court, claiming that Prenda was "deprived of due process."

Judge Wright made quick work of this, noting the filing irregularity, and the pattern of seeking "eleventh-hour pleas for relief," and then rejected the request, and added a $1,000 per day penalty for every day that they fail to put up a bond in the amount owed. Oh yeah, also he asks them to explain to the court why they didn't pay up as ordered. Might as well include the full text here:

Prenda Law, Inc., through its attorneys at Klinedinst PC, filed a notice of appeal to the Ninth Circuit. (ECF No. 157.) Oddly, to this notice of appeal, Prenda attached an ex parte application seeking a stay of enforcement of the Court’s May 6, 2013 Order Issuing Sanctions. (ECF No. 157-1.) Not only was this application improperly filed; but once again, Prenda resorted to an eleventh-hour plea for relief.

Even assuming this application was properly filed, the Court finds no basis to grant Prenda’s request. Under the Court’s order, Prenda, along with John Steele, Paul Hansmeier, Paul Duffy, Brett Gibbs, AF Holdings LLC, and Ingenuity 13 LLC, were required to pay by May 20, 2013, an attorney’s-fee award of $81,319.72. By filing this application, it appears no such payment was made.

Instead, an emergency motion was filed with the Ninth Circuit to stay enforcement of the order. That motion was promptly denied. (ECF No. 150.) Prenda now seeks to remedy a problem of their own making. By refusing to pay, or at least refusing to post a supersedeas bond, Prenda (and the other parties) cannot establish that it “is without fault in creating the crisis that requires ex parte relief, or that the crisis occurred as a result of excusable neglect.” Mission Power Eng’g Co. v. Cont’l Casualty Co., 883 F. Supp. 488, 492 (C.D. Cal. 1995). Prenda’s application is therefore DENIED.

Further, Steele, Hansmeier, Duffy, Gibbs, AF Holdings, Ingenuity 13, and Prenda are hereby ORDERED TO SHOW CAUSE why they have contravened the Court’s order to pay the attorney’s-fee award. The Court hereby imposes a penalty of $1,000 per day, per person or entity,1 until this attorney’s-fee award is paid or a bond for the same amount is posted. This penalty shall be paid to the Clerk of Court on the same day the attorney’s-fee award is paid or the bond is posted. This penalty must be paid unless it is evident that the award was paid or the bond was posted on or before May 20, 2013. Failure to comply will result in additional sanctions.

Upon motion and posting of a supersedeas bond, the Court will stay execution of the attorney’s-fee award. Fed. R. Civ. P. 62(d).

Finally, as a housekeeping matter, the Court requests Brett Gibbs to file requests for withdrawal of attorney in this and the related cases. Brett Gibbs appears to have withdrawn from these cases. (OSC Hr’g Tr. 87:1–8, Mar. 11, 2013 (“I am no longer employed by Prenda or any other corporation or LLC that is involved in these cases.”).) Given the circumstances and the relationship between Gibbs and his clients, the Court will approve his requests for withdrawal.

IT IS SO ORDERED.

And so it is. Perhaps, rather than spending so much time talking to the press, John Steele should have been counting his pennies to pay up.

Filed Under: brett gibbs, john steele, otis wright, paul duffy, paul hansmeier, prenda
Companies: ingenuity 13, prenda, prenda law

Prenda's Paul Hansmeier Asks Appeals Court To Delay Sanctions; Appeals Court Says 'No, Try Again'

from the another-failure dept

Well, well. Some Prenda supporters (shockingly, they exist) in our comments have been arguing that Judge Otis Wright's order against Team Prenda is the sign of a rogue judge who will get overturned. Of course, similar actions underway in other district courts suggest otherwise. On top of that, it would appear that the 9th Circuit appeals court doesn't seem too concerned about Judge Wright's order on a first pass either. Late last week, Paul Hansmeier, one of the key Prenda players, asked the appeals court to delay the requirement to pay sanctions so that he could get a proper appeal together. Of course, perhaps rather than putting together 30 pages protesting about the sanctions, Hansmeier should have been putting together a real appeal (or, as it turns out, reading how to file a stay pending appeal). The filing is certainly amusing. He whines about the lack of due process and the possible "reputational injury" this might cause.

Morgan Pietz, the lawyer who has been opposing Prenda in this matter (and, obviously, who would receive the bulk of the attorney's fees ordered), filed a very short and to the point brief saying he was actually fine with a stay on the payment, pending appeal, of course, but he wanted Hansmeier to first post a bond to show that the payment could be made. He also noted that he would have been happy to make this concession to Hansmeier if Hansmeier had just contacted him to let him know he was filing the brief requesting the stay. That's actually kind of a key point. Judges generally want the various lawyers to talk to each other about what's happening before surprise briefs are filed like this -- and so pointing out that Hansmeier filed a 30 page brief asking for the stay without even letting Pietz know about it probably won't be looked at too kindly by the court. As Pietz points out, there is very real concern about whether or not Prenda will ever actually pay up if they don't put up a bond.

The need for a substantial bond to secure payment of costs and fees from Prenda is not an idle request. Prenda Law, Inc. and its associated lawyers are an organization that is rapidly falling apart. They have dismissed the vast majority of their pending court cases across the country—cases which are their sole source of revenue. Meanwhile, as the days go by, they are increasingly being hit with new motions and orders to show cause for sanctions in various courts where they have tried, with mixed success, to escape from the consequences of their actions. Further, the lawyers and the entities involved here are likely the subject of potential criminal investigations, including an IRS investigation, flowing from the court’s formal referrals in the sanctions order below. In short, there may not be any solvent persons around to collect from for much longer. Further, as will be detailed in briefing on the merits, the lawyers’ interests in these cases (as well as their assets, one presumes) are hidden behind a web of Nevis LLC’s and mysterious offshore trusts. These are all complicated factual issues, with which the district court is already familiar, which is why the district court should set the amount and terms of the bond

Pietz also points out that the "reputational harm" argument is silly, because everyone already knows about it.

Either way, the Appeals Court wasted little time in saying "no," mainly because Paul Hansmeier, who presents himself as an accomplished lawyer, appears not to know the first thing about filing a stay pending appeal.

Appellant's emergency motion for a stay of the district court’s May 6, 2013 sanctions order is denied without prejudice to renewal, if necessary, upon the filing and disposition of such request in the district court. See Fed. R. App. P. 8(a)(1).

The rule in question says that if you're going to ask for such a stay, you have to first ask in the district court, rather than going straight to the appeals court. I would imagine that if Hansmeier had talked to Pietz, Pietz might have made that point as well. The deadline to pay up is tomorrow, though now it seems like Hansmeier may need to go ask Judge Wright for a stay in the matter if he wants to avoid having to pay up.

Of course, that's not the only trouble Hansmeier is facing from the 9th Circuit, who now appears rather aware of Hansmeier's reputation. You may recall that Hansmeier has also been involved in the sketchy practice of protesting class action settlements in the hopes of getting paid off to go away (in one letter he directly asked for $30,000 to go away). The appeal of one of those class action settlement battles is happening in this very same 9th Circuit, and Hansmeier had applied to be admitted in the 9th Circuit, where he cannot currently practice. As pointed out by Popehat, the court has taken notice of Judge Wright's order and told Hansmeier that he needs to clear up that before it will admit him. As Ken White noted:

In other words: no, Paul, you can't have admission to the Ninth Circuit until this is cleared up, and we won't let you represent a client before us in the interim.

Actions have consequences.

Filed Under: 9th circuit, appeal, otis wright, paul hansmeier, prenda, sanctions
Companies: prenda, prenda law

John Steele: I'm Just A 'Business Development' Guy Who Has Nothing To Do With These Lawsuits

from the keep-digging dept

As I've said, John Steele reminds me of some folks I've met who think they're smarter than everyone else and have outsmarted the whole system. They tend to believe they can talk their way out of anything. And while he pled the Fifth (or, had his lawyer say he was going to) when he had a chance to talk in court, he sure has been talking a lot since then to the press. The latest is a long interview done with Joe Mullin at Ars Technica, where Steele, once again, seems to think he can talk his way out of anything.

There's so much ridiculousness in there. Let's hit just a few of the high points, but then go read the full interview to find your own favorite moments.

He talks about "battle-stations"? That tells you something about where this judge is coming from. In the same sentence he talks about attorneys having "moral turpitude," he uses Star Trek terms to describe it? It's really beneath the dignity of the court.

John Steele is talking about something that's "beneath the dignity of the court"? Really? Anyone who has followed his efforts would laugh at that line considering everything he's done that's way beneath the dignity of the court, which is why he's now in the position he's in with Judge Wright's ruling.

As for the needs of the many outweighing the needs of the few [a Star Trek quote at the top of Judge Wright's order]—that's not [how the legal system works]. If the needs of the few didn't matter, black people wouldn't vote in most Southern states.

Yeah, that's right, Steele, align your situation with American slavery. Your situation is so analogous to slaves picking cotton in the South. Judge Wright is just trying to keep you down, huh?

The deposition that [former partner] Paul Hansmeier gave wasn't even certified. It shouldn't have even been allowed to be used. There are hundreds of problems with this order in my view.

Note that he doesn't claim that Hansmeier didn't say everything that was said, which really helped show how screwed up the whole situation was. Just that it wasn't certified... tap dance, tap dance.

I—and others involved—have been in front of hundreds of judges. This is the first judge that has ever sanctioned anybody involved with Steele Hansmeier, Prenda Law, or whatever.

Sanctioned, yes. But plenty of other judges have called out these practices as highly questionable for years. Sanctions are an extreme step, but plenty of judges have clearly questioned Steele's practices. And, other judges have claimed that he was involved in fraud on the court. It's just that they're still investigating.

I think the judge knows we're going to appeal. He wrote that the sanctions were designed to cost just less than [an effective appeal]. Look, you may hate me and the litigation that's gone on in the past, but most people have to be a little nervous when a judge puts out a number and says that.

Uh, the whole point of that was to highlight the nature of Prenda's trolling scheme. To turn that around and suggest that that's a problem is hilarious. Steele seems to think that everyone in the world is a complete moron and he's the only one with functioning brain cells.

Steele: Not until I received an order to show cause. I've spoken to some of the other people [involved], and they're in a similar situation. I didn't know about this until February of this year. Until March I hadn't read a single pleading in this case. I, quite frankly, had never been involved in any case in California.

If there was evidence I was involved and [Prenda Law lawyer] Paul Duffy was involved in more than just the somewhat supervisory role of Brett Gibbs, then that evidence would have come out.

Ars: Brett Gibbs testified at the March hearing that you and Hansmeier were "senior partners" at Prenda Law. He says you were supervising. Were you?

Steele: No. Absolutely not. Where's the evidence that we supervised Brett Gibbs? Where are the e-mails?

Ars: Gibbs testified that you were in control of these entities. You ran them. You initiated cases, you settled cases.

Steele: Where are the documents showing that I own any of these entities? I've never even heard of a couple of them.

This exchange is amazing on so many levels. Let me summarize it: "I knew nothing! There's no evidence I knew anything!" "Um, there's direct testimony from the person who knows you were involved." "Where is the evidence on something entirely different?!" Nice one, Steele.

Steele really likes this "where is the evidence?" line to respond to actual testimony against him. He uses it multiple times, including about Alan Cooper's signature, where again, he chooses his words carefully:

I'm well aware Mr. Cooper said he never signed those documents. He said it was a forgery—those were words the court used. I'm very comfortable with the facts, and everything in my possession leads me to believe that Mr. Cooper's involvement with AF Holdings was different than what he led the court to believe. It will ultimately come down to a "he said, they said." Nobody I'm aware of, including myself, has ever forged Alan Cooper's signature. That is a pretty outrageous claim.

And for the love of God, where is the evidence [of forgery]? If someone had found something, it would be on the front page of Ars Technica and half a dozen other sites within minutes. There's no way any of that evidence could exist. Because it's not true.

Notice that he's speaking very specifically about the forgery aspect, and not about the misrepresentation part of it. Hmm... Also, Steele doesn't seem to understand that testimony is evidence. So, yes, there is evidence. It's called the testimony in the court by Alan Cooper.

And then we find out what Steele is now claiming his real role is in all of this:

I work part-time with Livewire Holdings, one of the entities that Lutz owns. My role is on the business side. I acquire other adult content companies and deal with expanding the holding company. The main goal is to handle a lot of content and websites and to be involved in the adult space. For that, I'm paid a flat fee. I won't say how much, but it's a modest flat sum.

Right. And that's why you showed up in court in some of these cases and Gibbs said you gave him specific directions on the legal issues. Because you're in "business development."

Steele: I think they've done a few cases. I'm not involved with that litigation. I don't file anything. You know, what pirates oftentimes don't get is that this is not a huge moneymaker. I know from past experience at Steele Hansmeier that over half the clients we got never made any money off suing pirates.

Ars: Well, how much money have you made? Last year a Forbes reporter suggested you could have collected $15 million in settlements, and you responded by saying the actual figure was "more than a few million." Have you made millions of dollars suing people?

Steele: I wish I had. At the time my wife made some joke wanting to know where I hid the other $14.5 million. There are a lot of costs associated with litigation.

Again note how he tries to answer a different question. He already told Forbes the $15 million number was too high. Mullin is asking him about the "more than a few million" he already told another publication was the correct amount. And he responds by talking about the $15 million. This is not how you honestly answer questions. It's how you (very weakly) try to avoid responding to questions that you don't want to answer.

Ars: If you and Paul Hansmeier don't run AF Holdings, why would Hansmeier be the person who was sent to be deposed about AF Holdings?

Steele: I believe he went out as a favor. They needed a corporate representative, and he was authorized to provide that, for AF Holdings, for Mr. Lutz. You want to have a strong corporate representative to get up and deal with Mr. Pietz for seven hours. There's not a whole lot of people in a typical adult content company that can answer a lot of the questions that were asked.

Heh. No one goes to be a corporate representative in a big legal dispute "as a favor." And nice gratuitous attempt to attack Pietz thrown in for fun. Also, I wonder which of the questions "not a lot of people in a typical adult content company can answer" he is talking about. What about the one of who actually owns the company you represent? That one?

Ars: And so what is Paul Hansmeier up to? I called him to talk about the order, and he referred me to you.

Steele: I believe he deals with some class action type of litigation. He also helps me when I'm looking for acquisitions, he's got experience in that area. So he works essentially part-time for Livewire. It's on a project basis.

Funny stuff. Of course, Hansmeier has been called out for very questionable class action objections which appear to involve objecting at the last minute to try to upset a settlement that's about to go through and then seeking cash to go away. In fact, there's a letter where Hansmeier directly promises to go away for $30,000.

Anyway, as mentioned there's even more in there that we didn't get to. I hope Steele keeps talking though. I imagine bits and pieces of his various statements are likely to show up in various court cases going forward as well.

Filed Under: copyright trolls, john steele, otis wright, paul duffy, paul hansmeier
Companies: af holdings, livewire, prenda, prenda law

Prenda Lawyer Says Judge Wright's Order Is Inapplicable In Georgia Because California Recognizes Gay Marriage

from the wtf? dept

So, you may recall that as a part of Judge Otis Wright's Prenda sentencing, he ordered that a copy of the ruling be submitted in every other case involving Prenda:

For the sake of completeness, the Court requests Pietz to assist by filing a report, within 14 days, containing contact information for: (1) every bar (state and federal) where these attorneys are admitted to practice; and (2) every judge before whom these attorneys have pending cases.

In one Prenda case (involving AF Holdings again) in the Northern District of Georgia, the defendant, Rajesh Patel, and his lawyer, Blair Chintella, submitted Judge Wright's ruling themselves to the court in the case. As pointed out by Fight Copyright Trolls, Prenda's local counsel in Georgia, Jacques Nazaire has filed one of the most ridiculous filings we've ever seen yet in all of the Prenda filings. It argues that the court should not allow Judge Wright's order to be entered into the docket because California recognizes gay marriage and Georgia does not. I'm not joking.

The defendant has filed a copy of that Order hoping that it would be viewed as a mandate by this Court. However, the defendant’s attempts to issue this mandate should fail for the following reasons.

First and foremost the undersigned respects the California decision and believes that it was rendered in the best interest of the residents of California.

Nevertheless, this instant case is pending in a Georgia District Court and it is trusted that any decision rendered, whether for or against the plaintiff, will be done so in the best interest of the residents and practitioners of Georgia.

While this Court may or may not agree with some of the issues presented in the California case, unbeknownst to the defendant, the California case will not necessarily become a mandate on this Court. It is solely within the discretion of this Court to follow or not follow the decisions made in the California case.

The defendant should realize that California has different laws than Georgia, a different Governor than Georgia; a different legislative body than Georgia, different business needs than Georgia and different views than Georgia and as such all of its decisions cannot serve as a mandate for Georgia.

For example the California Courts have legalized gay marriage. Perry v. Schwarzenegger 704 F.Supp.2d 921 (N.D. Cal., 2010);Certified question, 628 F.3d 1191 (9th. Cir.); Answered 52 Cal.4th 1116 (2011) Affirmed, 671 F.3d 1052 (9th Cir.) Such a decision cannot serve as a mandate on Georgia Courts to legalize gay marriage as well.

It doesn't stop there. It notes that California courts have different immigration rules and (randomly) that NY has different gun rights. Basically, it throws out every hot button issue that stereotypical conservatives might disagree with stereotypical liberals on.

Of course, all of that is meaningless. While it's true that Judge Wright's ruling is in no way a precedential ruling for the Georgia court, it's still a ruling about federal law, not any specific state law. And the ruling itself is about flat out misconduct (including potential racketeering and tax evasion claims) by the plaintiff in this case, because of actions in a nearly identical case. That's not about California having a "mandate" over Georgia. It's about very relevant additional information that the court should know about.

Nazaire then goes on to list out a ridiculous parade of horribles that he claims would happen if the Georgia court "followed the aforesaid California Order" including that law firms wouldn't be able to use boilerplate text any more. This makes absolutely no sense at all. First of all, the inclusion of Judge Wright's order is not about having the Georgia court "follow" the order, but adding additional important information about the parties in this particular case. Separately, the idea that adding a California ruling into the docket suddenly means lawyers wouldn't be able to cut and paste any more... just doesn't make any sense at all.

Nazaire then tries to argue, incredibly, that there is no "proof beyond a reasonable doubt" that Alan Cooper's signature was forged. Earth to Nazaire: that ship sailed a long, long time ago. It also leads to this completely random attack on the EFF:

Prior to filing the document, the undersigned contacted Prenda Law to find out whether or not Mr. Cooper would be available to testify at trial but was advised that they could not locate Mr. Cooper. The undersigned was advised that Mark Lutz and Peter Hansmeier would be available to testify as witnesses. Had the undersigned realized that the Electronic Frontier Foundation was hanging with Mr. Cooper, he would have been able to track down Mr. Cooper and questioned him about the documents. It turns out that Mr. Cooper was a caretaker of one of the properties of a Prenda Law member and had left said property in August, 2012.

Therefore, even if the undersigned had placed a knife to the throats of each of Prenda’s members, none would have been able to give him Mr. Cooper’s contact information at the time on November 5, 2012 when Plaintiff commenced its law suit. It is certainly not the first time a company has lost contact with an agent (or alleged agent as stated).

Wow. Honestly, this one needs no commentary. It speaks volumes (of insanity) for itself.

And Nazaire is not done. He also argues that Patel's lawyer, Chintella, was "one of the two star witnesses in the California case" (which, um, isn't true) and then claims that this is an ethics violation in Georgia.

This whole filing really is quite remarkable, but certainly seems to fit in to the growing pile of "Prenda crazy" filings in various cases around the country.

Filed Under: blair chintella, california, copyright, copyright trolls, federal law, georgia, jacques nazaire, otis wright, rajesh patel
Companies: af holdings, prenda, prenda law

Why Prenda Has Been Able To Proceed For Years: The Whole Setup Was Too Brazen

from the people-didn't-believe-it dept

Nate Anderson, over at Ars Technica, has a good post discussing why Prenda has been able to continue its questionable legal practices for years, despite the fact that judges had been calling John Steele out years ago for this same activity. The real answer is in just how brazen Steele and his partners (mainly Paul Hansmeier and Paul Duffy) seem to have been in pursuing copyright trolling shakedowns. As we had discussed elsewhere, they had figured out ways to go after IP addresses by piling on legal loophole after legal loophole, often via state laws. Anderson has a summary that covers some of the efforts:

You could see just how devoted Steele and his partners were to their new business model, though, because even these kinds of warning shots didn't deter them. Steele's initial operation, which became Prenda Law in November 2011, continued to iterate. It filed cases in other Illinois federal districts downstate. It filed in Illinois state courts, jiggering the charges to match the venue (copyright infringement of this kind is a federal issue). It filed in Florida, attempting to use an arcane procedure called a "true bill of discovery" to obtain IP addresses. It filed in California. It tried out "reverse class actions" suits against alleged downloaders. It formed a company in Las Vegas (hiring a "CEO" named Mark Lutz) and set up trusts located offshore (in Nevis) in order to own porn copyrights. No pesky PR department or tentative CEO could hold up Prenda's litigation pain train if the law firm could simply ditch the client and go into business for itself.

Anderson further notes that they were never really stopped because these layers upon layers of tricks made it difficult to tease out what was really going on, and judges are happy to clear their dockets (something Team Prenda used to their advantage by quickly dismissing cases any time judges seemed to catch on to different elements):

How could the scheme go on for so long even as federal judges complained about fraud, as "John Doe" defendants complained repeatedly that they had no idea what the cases were about, and as critics complained about the injustice of the entire business model? The answer is that federal judges aren't generally investigators. Prenda had gone to great lengths to obscure what was really going on, who was doing what, and where the money went. Judges want to clear cases off their dockets and in rare cases will entertain sanctions motions, but to unravel something as complex as Prenda's behavior required a real investigation. Yet without more details, actual criminal investigators had very little to go on; most of the judicial complaints dealt with behavior in court, not public crimes.

So Prenda could essentially turn the entire US judiciary into a laboratory for incrementally refining its porn trolling techniques, testing venues, judges, corporate structures, collection procedures, and legal arguments, looking for perfection. And what it arrived at in the end had a certain devious logic to it. Even Otis Wright, the federal judge in Los Angeles who brought down Prenda's principals and referred them all for criminal and tax prosecution this week, had to concede the conceptual beauty of the system.

I think it actually goes even further than that. It's that most judges assume, quite reasonably, that the lawyers appearing before them are not piling upon layers of tricks to try to obscure what may just be criminal activity. Lawyers are given the benefit of the doubt that, while they may sometimes push the boundaries in advocating for a client, they are generally being honest with the court about what's happening. I think it was the sheer audacity of the overall effort by Team Prenda, that goes so incredibly far into loopholes upon loopholes, that most people -- especially judges -- wouldn't even think what was happening was possible. It's so far outside the reality they deal with. Lawyers may go a little overboard in court, but setting up a structure like this, which Judge Wright clearly believes is a direct fraud on the court, with a possible side dish of racketeering, is unbelievable.

I know that I was certainly skeptical of some of the more extreme claims about Steele and Prenda from early on -- and was even hesitant to write about some of the wilder assertions made on some anti-troll blogs. However, as more and more evidence started to come out concerning Steele and the others named in this case, it was hard to deny that something massive was going on, and various courts were finally starting to catch on to the fact that these weren't just over aggressive bad lawyers taking on dodgy cases, but rather something much bigger.

And while some other judges started down this path first, Judge Wright does deserve kudos for focusing in and really digging out a bunch of details pretty quickly once all of this started to become clear to him. Some joker has set up an IndieGogo campaign to erect a statute in honor of Judge Wright for this ruling. I think that goes a bit far, but the fact that he was willing to pursue this, where other judges just scolded Team Prenda and let them go, definitely deserves some recognition.

Still, all of this leaves open the fact that there is something of a bug in the legal system. These kinds of abuses are not easy to catch. It would be good if there were a better way to flag these kinds of abuses earlier in the process, before they can go as far as John Steele and Prenda appear to have been able to take these efforts.

Filed Under: copyright trolling, copyright trolls, john steele, otis wright
Companies: prenda, prenda law

John Steele, Silent In Court, Keeps Talking To The Press; Says New Lawsuits Are Being Filed

from the oh-really-now? dept

We had noted that Team Prenda (under new names) appeared to still be up to their old tricks, filing lawsuits and trying to get names to shake down with settlement demands. And you might have thought that with the big Judge Otis Wright ruling against them they might settle down. But, no, John Steele insists that Livewire Holdings -- the main shell company at the center of the fight -- is still filing new cases.

In an extended interview with AVN news, Steele goes even further than his earlier comments promising an appeal and complaining about Judge Wright:

“The hearing regarding me in March was 12 minutes long and there was no evidence or testimony admitted. I have never had any ownership interest in AF Holdings, Ingenuity13, or Prenda Law and no evidence otherwise was ever presented. I am not an attorney in this matter, and have never practiced law in California. In fact the first time I heard of this case was when Mr. Gibbs told me he got an Order to Show Cause in February 2013 regarding this case.”

He continued, “I would also comment that the attorneys representing myself, Paul Hansmeier, Paul Duffy, and the others were not allowed to make argument nor were we allowed to present witnesses. And normally with orders regarding sanctions, the Court will point to evidence, testimony, or something to explain the sanction. In this order, there is nothing.”

Again, this is pretty funny on multiple levels. The claim that he didn't even know about the case until February is almost laughable, especially considering that Gibbs noted that he took regular instruction on this very case from Steele. Furthermore, it's well known that Steele reads the various anti-copyright trolling blogs regularly -- and they've been following this case for quite some time. As for the claim that they "were not allowed to make argument," again, that's not true. Their lawyer told the Judge that they were pleading the fifth.

In another interview, with the LA Times (where the reporter appears to have spelled about half the participants' names wrong), Steele gamely predicts that "There's going to be a lot of egg on people's faces" after his appeal. We'll see about that.

But... back to the AVN story. Steele goes back to attacking the opposing lawyer, Morgan Pietz, Judge Otis Wright and (of course) the EFF. He then claims (incorrectly, mind you) that copyright holders are "winning the vast majority" of these kinds of trolling copyright cases. He's pretending that this is still about copyright trolling, not massive fraud on the court for which he's almost certainly about to be investigated by federal prosecutors for possible racketeering charges and tax evasion, because a federal judge has suggested that both areas need to be investigated. His only response to all of that is to say that the Illinois State Bar investigated him already and was okay with his actions. We'll see about that as well.

But the really amazing part is that, after insisting that he has nothing to do with these lawsuits, he tells AVN that Livewire Holdings, the master shell corporation involved in all of these shenanigans, is filing new cases this week:

For his part, Steele told AVN that it is his understanding that Livewire Holdings, one of the entities identified by Judge Wright—by way of an actual Prenda relationship chart included in the order—as being a member of the Prenda family, “is filing multiple new cases this week."

“Hopefully,” he added defiantly, “the pirate that got away in this matter will be caught and brought to justice down the road.”

I've said it before, but Steele really reminds me of people I've known who think they're a hell of a lot smarter than they really are. They think (1) that they've discovered a brilliant loophole that no one else could possibly figure out and (2) that they can talk their way out of anything. In Steele's case, each time he opens his mouth, it's likely he's digging himself a slightly deeper hole. He's hired expensive lawyers. You'd think they'd tell him to shut up already, because he's doing his own case a lot more harm than good. Of course, if it's true that Livewire is still filing new cases, after a federal judge has called them out on this behavior (and ordered his ruling be given to every court involved in any litigation involving Livewire and all of Team Prenda), that may come back to haunt him even more.

Filed Under: 5th amendment, appeals, john steele, otis wright
Companies: prenda, prenda law

John Steele Plans To Appeal Judge Wright's Order; Says Judge Is 'No Fan Of IP Law'

from the no,-he's-not-a-fan-of-abusing-IP-law dept

While Judge Otis Wright may have been careful to set the financial punishment for Prenda at just less than how much it will cost to appeal, it appears that will not stop John Steele from appealing. Apparently, Steele doesn't seem to recognize that speaking to the press given his current situation may not be that wise, because he told porn news publication Xbiz the following about his reaction to the ruling:

Steele on Tuesday told XBIZ that he plans on appealing Wright's order with the 9th U.S. Circuit Court of Appeals.

"Obviously we don't agree on the ruling," Steele said. "Judge Wright based his order on an eight-minute hearing where there was no testimony, no evidence introduced. Clearly Judge Wright does not like this type of litigation and he's no fan of intellectual property law."

Actually, Judge Wright did not base his order on just that eight-minute hearing (I believe it was actually 12 minutes, but who's counting?). He based it on all of the piles upon piles of evidence presented before that, combined with Steele and his partners' decision to refuse to testify. For Steele to now complain that "there was no testimony, no evidence introduced" is pretty laughable, since the reason there was no such information brought forth at that particular hearing was mainly due to Steele and his partners' own decision. However, there was plenty of testimony and evidence introduced previously, and Wright's order was based on that. The whole point of that last hearing was to give Steele, Hansmeier and Duffy a chance to respond to and refute that evidence. They did not do so. To now complain about it is pretty funny.

Separately, the argument that Judge Wright "is no fan of intellectual property law" is equally silly. Wright seems pretty clearly to be annoyed, not at intellectual property law itself, but by the clear abuse of those laws.

Filed Under: appeals, john steele, otis wright
Companies: prenda, prenda law