Laura Loomer Owes $124k In Legal Fees After Losing Lawsuit Over Having Her Twitter Account Reported And Banned

from the $124,000-more-expensive-than-just-letting-the-ban-ride dept

Alt-right "personality" (I guess?) Laura Loomer keeps filing lawsuits and losing them. Loomer seems to believe it's legally actionable to be moderated by social media services. No court has agreed with her. Between Section 230 and the First Amendment, Loomer doesn't have a case. Oblique approaches -- like claiming getting kicked off Twitter is tortious interference in a (nonexistent) business relationship (Loomer and Twitter, according to Loomer, but definitely not according to Twitter) -- haven't been any more successful.

Grasping at straws and switching attorneys in midstream hasn't helped matters. This case involved Loomer trying to sue CAIR (Council on American-Islamic Relationships) and Twitter in Florida, claiming CAIR's reporting of her Twitter account tortiously interfered with Loomer's get-rich-quick plan of being extremely extremist online. It only took six pages for a federal judge to dismiss Loomer's baseless claims.

By the time that dismissal happened, it was too late for Loomer. Seven months after the lawsuit was filed (in October 2019), CAIR approached Loomer and suggested a settlement under Florida state law -- one that would have been much cheaper for Loomer. Loomer refused. That has turned out to be a very expensive decision. (h/t Techdirt reader Thad)

The court [PDF] says the offer of judgment complied with Florida law and could have provided Loomer a quicker, cheaper way to step away from her doomed litigation. Loomer argued the offer wasn't proper because she was seeking injunctive relief in addition to monetary damages. A judgment offer would obviously have short-circuited injunctive relief. But the court points out Loomer only mentioned an injunction in the complaint and never bothered to follow up on seeking this particular form of relief.

I find that the true relief sought against the CAIR Defendants in the Amended Complaint was only monetary damages and that the Amended Complaint makes only a “passing reference” to equitable relief. The only equitable relief directly mentioned in Plaintiffs’ complaint is a summary request for “preliminary and permanent injunctions to prevent defendants from continuing their unlawful conduct.” ECF No. 1-2, at 41. During the 8 1/2 month period between the filing of the Amended Complaint (March 3, 2019) and the District Court’s dismissal order (November 19, 2019), Plaintiffs never filed a motion for a preliminary injunction or temporary restraining order. This evidence circumstantially shows that Plaintiffs were not actually pursuing equitable relief. And, in addition to Plaintiffs not seeking an injunction, the Amended Complaint is framed in terms of monetary damage; it repeatedly and exclusively alleges economic harm to Plaintiffs “in an amount to be proved at trial.”

Monetary it is! But not the way Loomer hoped. After doing some back-of-the-filing-envelope math bringing hourly rates down from their DC levels (where CAIR is HQed) to Florida levels (where the lawsuit was originally filed), the court has some bad news for a plaintiff who arguably doesn't have enough cash on hand to buy new tires.

Accordingly, Defendants’ Motion is GRANTED IN PART and DENIED IN PART. Plaintiffs shall reimburse Defendants:

Attorneys’ Fees: $123,761.65 allocated as follows:

CAIR Foundation, Inc. $117,297.90

CAIR Florida, Inc. $6,463.75

Costs: $661.72

That's how much being this wrong costs someone who's so sure they're right they blow off a cheaper offer made months before the attorneys' fees really started racking up. I don't know how many people are still interested in Loomers' windmill tilts, but I have to imagine an eighth of a million puts a pretty good dent in her legal warchest.

Filed Under: content moderation, fees, florida, laura loomer, legal fees
Companies: cair, twitter

Devin Nunes' Favorite Lawyer On The Hook For Over $20k In Sanctions

from the pay-up-biss dept

Last month we wrote that Rep. Devin Nunes' favorite lawyer, Steven Biss, who has been filing frivolous, vexatious SLAPP suit after frivolous, vexatious SLAPP suit, was finally facing some sanctions. The specific case did not directly involve Nunes, but rather one of his aides, Derek Harvey, who had filed a ridiculous SLAPP suit against CNN. As we wrote last month, the court had easily tossed the original lawsuit and warned Biss not to file an amended complaint unless he had a credible legal theory. Biss did not have a credible legal theory, but he still filed an amended complaint. And thus, the court issued sanctions, saying that Harvey, Biss and other lawyers would be on the hook for CNN's legal fees.

The latest filing in the case is the bill coming due. Harvey and Biss need to pay CNN $21,437.50 in legal fees (and an additional $52.26 in costs and expenses). That might not seem like that much in the grand scheme of things (especially for a lawyer who has claimed his client, Devin Nunes, is owed over a billion dollars for defamation, but it is still real money that someone is going to need to pay -- though it remains an open question as to who is actually going to pay it).

There's not much to see in the ruling itself, as it basically says that the fees CNN's lawyers outlined are within the standards that the court's local rules say are "presumptively reasonable." The lawyers admit that they're actually asking for less than they normally charge in order to keep them "reasonable" in the Court's eyes, and the Court basically says "sounds good."

It does often seem that lawyers who file tons of frivolous and vexatious lawsuits are able to get away with it for a while, with courts giving them many, many chances and being extremely reluctant to issue sanctions. And, even when sanctions are issued, they tend to be relatively low. However, with such repeat offenders, we've often seen that courts across the country take notice, and once one court has sanctioned this kind of behavior, it can open the floodgates. We'll see what happens in other Biss lawsuits.

Filed Under: derek harvey, devin nunes, legal fees, sanctions, slapp, steven biss
Companies: cnn

As Steven Biss Continues Filing Bogus SLAPP Suits, He Finally Gets Sanctioned In Case Involving Devin Nunes' Aide

from the how-is-this-not-the-norm-yet? dept

Lawyer Steven Biss has built up quite a reputation for himself over the past few years, especially in filing highly questionable, obviously bogus SLAPP suits on behalf of Rep. Devin Nunes and a rotating cast of characters in and around Trumpist orbits. For example, he just recently was the lawyer for Jack Flynn, the brother of disgraced (briefly) former National Security Advisor Michael Flynn, in suing CNN for pointing out that the Flynns had repeated some standard QAnon conspiracy nonsense in a video recorded at a family barbecue, and posted online with some QAnon hashtags. Jack was in the video which was then featured in a CNN story about QAnon. The crux of the defamation claim is this:

In the piece, O’Sullivan falsely claimed that “where we go one, we go all” was an “infamous QAnon slogan promoted by Trump’s first National Security Advisor Michael Flynn”.

The lawsuit tries to argue that "where we go one, we go all" is not in fact a QAnon slogan (they claim that the phrase goes back to John F. Kennedy -- ignoring the fact that today it absolutely is associated with QAnon as are the hashtags that Flynn used in posting it). The lawsuit is laughable and is likely to be laughed out of court like every other Biss SLAPP suit.

Speaking of which, days later, in yet another Biss SLAPP suit, a court finally sanctioned Biss. This case loosely involves Nunes, even though Nunes is not technically a party to the case. Instead, it involves one of Nunes' top advisors, Dereck Harvey. You might recognize Harvey from another story, about the time when Biss sent a letter on behalf of Nunes... threatening to sue fellow Congressional Rep Ted Lieu. In that story, we noted that just as Nunes was threatening Lieu, Congress had released a bunch of documents showing how Nunes' aide Harvey had worked with the since indicted Lev Parnas to try to set up some meetings between former Ukranian officials and Nunes.

That takes us to the present case. Back in October, Harvey sued CNN and Parnas over statements that were made on CNN, based on statements from Parnas and his lawyer, Joseph Bondy, about alleged efforts by Harvey to set up meeting with those very same former Ukrainian officials and his boss, Nunes. In February, the case was dismissed against CNN -- noting that the complaint failed to describe how the statements were defamatory, and a bunch of them weren't even about Harvey himself (which they'd need to be in order to be defamatory).

The judge gave Biss and Harvey a chance to file an amended complaint, which they did, at the very last minute.

Anyway, it would appear that the judge is not impressed by Biss's lawyering here, taking just a few weeks to dismiss the case and tell Harvey and Biss they're on the hook for CNN's legal fees. As the court notes, this whole case really seems to be a sort of Nunes-lawsuit-by-proxy:

As this Court previously explained, Harvey’s suit is at heart, a continuation of litigation of Congressman Nunes with respect to media coverage of his own political efforts in support of former President Trump... In fact, this Court was hard pressed to see how several of the allegedly defamatory statements cited in Harvey’s original Complaint had much to do with the Plaintiff at all, as they focused almost entirely on the actions of Congressman Nunes....

Also, as was found in the original dismissal, most of the statements in question were not actually defamatory:

It was also unclear to this Court how the statements at issue were in fact defamatory in nature, tending to “expose a person to public scorn, hatred, contempt, or ridicule.”... Harvey was acting as a Senior Advisor to Nunes, the “leader of the Republican opposition” to the first impeachment of former President Trump, and the public record includes House Republicans’ statements that there was “nothing wrong with asking serious questions” about the Bidens and their dealings with Ukraine. To suggest it was defamatory for CNN to state or otherwise imply that Harvey was assisting Nunes in his investigation of a political rival is simply without merit.

The point of an amended complaint after the initial complaint has been dismissed without prejudice is to fix the problems with the complaint (i.e., fixing the deficiencies that resulted in the case being dismissed). But it appears that didn't happen here and the judge seems to recognize that almost no effort was made here at all, other than to drag out the case.

The Plaintiff has done nothing to address this Court’s concerns that the statements have little do with Harvey at all. The statements allege nothing more than that Harvey was a source of information about Congressman Nunes or an unnamed subordinate acting in compliance with the orders of his superior.... The Plaintiff has also failed to address the fact that none of the statements are materially false... Adding the phrase “materially false” to certain paragraphs of the Amended Complaint does not change the substance of the statements, or the facts related to this case. See Iqbal, 556 U.S. at 678 (“Threadbare recitals of elements of a cause of action, supported by mere conclusory statements, do not suffice.”) The Plaintiff did omit a portion of what is now alleged as Statement 5 that this Court held was clearly unactionable due to its status as an opinion.... However, with respect to Statement 5, Harvey still fails to state a claim on the bases that the statement only references Harvey as a source of information about Congressman Nunes and is not materially false.

Harvey made some additions to his Amended Complaint that were presumably meant to address this Court’s concerns that none of the statements were actually defamatory. For example, Harvey added allegations that CNN’s publications “could cost him his security clearance and subject him to discipline.” ... He also asserts that CNN’s reporting falsely accused him of publishing “derogatory statements concerning Nunes—Plaintiff’s superior” and that the accusations “were highly prejudicial” to his employment with the congressman.... Theses additions do not aide the Plaintiff’s case.

There's also the issue of actual malice. Harvey tries to argue that he's not a public figure so the actual malice standard doesn't matter, but as the court said in its original ruling, under 4th Circuit precedent, he clearly is. So then, there's this attempt to challenge the actual malice standard that the judge is (rightly) having none of:

Harvey’s next argument regarding actual malice is even less meritorious. Harvey asks this Court to completely ignore Supreme Court precedent and reconsider what he asserts to be an outdated actual malice standard established by New York Times Co. v. Sullivan... As Plaintiff’s counsel has already once been instructed, “for obvious reasons” a district court cannot simply overturn a decision of the Supreme Court. The actual malice standard as articulated by the Court in Sullivan controls in this case, and for the same reasons detailed in this Court’s earlier opinion, Harvey has failed to state a plausible claim that CNN and its reporters made any of the statements at issue with actual malice.

You almost get the feeling these batshit crazy cases are an attempt to get a case up to Clarence Thomas, given his well publicized desire to get rid of the Sullivan standard.

Either way, the court decides that this weak showing is easily sanctionable:

In the previous Memorandum Opinion, this Court specifically stated that Plaintiff Harvey was permitted to file an Amended Complaint if he possessed facts to cure the “manifest deficiencies” addressed in that opinion by March 4, 2021.... This Court also specifically warned that such Amended Complaint would be subject to dismissal if the Plaintiff failed to cure the noted deficiencies.... Nevertheless, after the clerk’s office of this Court had closed and just hours before the deadline of midnight on March 4, 2021, the Plaintiff filed an Amended Complaint nearly identical to the original Complaint filed in this case and thoroughly discussed in this Court’s Memorandum Opinion. As the above analysis explains, the Plaintiff did not cure any of the deficiencies noted by the Court. The filing of such an Amended Complaint is the sort of bad faith courts have repeatedly found to merit sanctions under 28 U.S.C. § 1927 and the courts’ inherent power to sanction.....

... This Court finds that Plaintiff Harvey’s filing of the Amended Complaint unreasonably multiplied the proceedings in this case, and this Court is satisfied that it is appropriate to impose a sanction as to the Plaintiff and his counsel under this court’s inherent authority

The end result is that a combination of Harvey, Biss (and a third lawyer in the case who was seeking to get off the case) are on the hook for CNN's legal fees in the case. Of course, since it's never been clear who has been paying Biss for all these lawsuits in the first place, it remains unclear who will be paying the sanctions as well.

Filed Under: 1st amendment, actual malice, defamation, dereck harvey, devin nunes, free speech, jack flynn, legal fees, michael flynn, sanctions, slapp, steven biss
Companies: cnn

I'd Bet Ted Cruz Will Start Supporting Section 230 Once He Realizes He's On The Hook For Parler's Legal Expenses

from the put-your-money-where-your-mouth-is,-ted dept

Senator Ted Cruz now loves Parler, the Twitter alternative that a bunch of Trump fans mistakenly believe won't moderate content. We've already shown that's false. However, there's another issue with Parler that some are calling out -- which is that you run a risk if you agree to that site's user agreement, because of the following that is buried as #14 on the user agreement:

You agree to defend and indemnify Parler, as well as any of its officers, directors, employees, and agents, from and against any and all claims, actions, damages, obligations, losses, liabilities, costs or debt, and expenses (including but not limited to all attorneys fees) arising from or relating to your access to and use of the Services. Parler will have the right to conduct its own defense, at your expense, in any action or proceeding covered by this indemnity.

Now, as we've discussed in the past, many social media sites have indemnity clauses, though they're often much more limited (also, in looking now, I'm pleasantly surprised that it looks like a few have removed indemnity clauses altogether -- I can't find one in Twitter or Tumbler's current terms for example). We've also discussed why people should be wary of many indemnity claims.

Parler's indemnity clause was first called out by @TheWolfLawayer on Twitter, and then later by The Verge's Editor in Chief, Nilay Patel, who called it a "reverse 230 clause."

I wouldn't quite call it a "reverse 230 clause" and I think that some of the screaming about this clause is a bit overblown (again, many other platforms have similar indemnity clauses, though many are at least a bit more limited to situations where the users actually violated some law).

However, this clause should make Ted Cruz and every other Parler user huge supporters of Section 230. Now, we already know that Cruz hates Section 230, has misinterpreted it frequently, and has supported calls to get rid of it, falsely believing that this will somehow stop content moderation from being used against Nazis or something.

But here's the thing: since Ted Cruz is now on the hook if anyone sues Parler over Ted Cruz's speech on that platform... well, then Ted Cruz might want to become a big supporter of Section 230 right quick. Because it will be Section 230 that gets such a lawsuit tossed out quickly and relatively inexpensively. Without Section 230 -- even if the case is frivolous -- Parler's legal fees (by which, thanks to this legal agreement, we mean Ted Cruz's legal fees) would be much, much higher, because the lack of 230 would create a procedural mess, which would likely extend any court case greatly, and rack up Cruz's legal fees.

This is not to suggest that anyone should or would file such a lawsuit against Parler, but seeing how many misdirected cases we've seen filed against sites like Twitter over users' speech on that platform, it wouldn't be surprising if Parler eventually faces similar such lawsuits. And, if that's the case, any of its users (including Cruz) will then be in deep shit if they don't have 230 helping to reduce their legal liability.

So, Ted, maybe drop the nonsense and the lying about 230, and recognize: Section 230 protects you too, especially given your new favorite social media's excessive terms of service.

Filed Under: indemnification, legal fees, section 230, ted cruz
Companies: parler

Malibu Media's Former Law Firm Says The Copyright Troll Has Been Screwing It Out Of Settlement Payments

from the trollololololol dept

Few things are more satisfying than watching copyright trolling efforts disintegrate. Prolific abuser of the court system, Malibu Media, has been slowly self-destructing over the past few years.

In 2016, Malibu Media sued its legal reps because they were at least as corrupt as Malibu Media is. From the filings, it appeared attorney Keith Lipscomb wasn't sharing the settlements he extracted from alleged pirates. Malibu's new reps, Pillar Law Group, filed the suit for Malibu. In the court documents, Lipscomb said he felt the copyright trolling business model had outlived its usefulness and was no longer profitable. While this was likely true, it also did double duty as an excuse for Lipscomb's failure to send Malibu its cut of the settlements.

The relationship with Pillar Law only lasted until last summer. As Fight Copyright Trolls notes, X-Art'/Malibu's owner is now engaged in a legal dispute with the law group in the Los Angeles County Court.

Roughly about the same time this suit was filed, Malibu was sued by two investors who were promised half of all settlements and half of all profits from Malibu's media. Apparently, they haven't been paid either.

This leads us to the current litigation, brought by Malibu's most recent legal reps. Once again, the non-sharing of settlement funds is the issue.

Lomnitzer Law has followed suit and sued Malibu for breach of contract demanding $280,058.32 plus interest (The Lomnitzer Law Firm, P.A. v. Malibu Media, LLC, FLSD 20-cv-80027-RKA):

Beginning at a date presently unknown, Malibu instructed attorneys in various jurisdictions that were representing Malibu in the nationwide litigation that was being coordinated by the Firm to by-pass the Firm and to remit settlement monies from such litigation other than to the Firm while still expecting the Firm to pay court filing fees, process server fees, etc., all incurred for and on behalf of and for the benefit of Malibu.

Good old Malibu: against the notion of sharing right up until the bitter end. God, I hope it's the end. Soon. And a super-bitter ending at that.

Let's not line up to applaud the numerous entities that have sued Malibu Media for being fraudulent. They all got in bed with Malibu at one point. It was only when they personally got screwed that they decided to distance themselves from this syphilitic troll. If this mesh network of litigation can somehow find a way to bankrupt everyone involved, we'll all be better off.

Filed Under: copyright trolls, legal fees, scams
Companies: lomnitzer law, malibu media, pillar law group, x-art

Appeals Court Smacks Down Patent Troll Blackbird, Orders It To Pay $363k In Attorneys Fees To Company It Sued

from the take-that dept

Remember Blackbird Technologies? This was the patent trolling firm made up almost entirely of lawyers who insisted they weren't a law firm... they just bought up patents for basically nothing and then threatened and/or sued a bunch of companies claiming patent infringement. A few years back it was suing basically everyone over some dubious patents. But it made a pretty massive strategic error in suing Cloudlfare because Cloudflare decided to fight back, not just to win its case, but to invalidate as many Blackbird patents as possible, while simultaneously reporting the ethics violations involved in pretending not to be a law firm when you really are (and in what appeared to be trying to purchase the bare right to sue, rather than the actual full patent rights).

That process ended poorly for Blackbird, who lost in court and on appeal, in a fairly demeaning way (the courts gave Cloudflare a complete and total victory -- and the appeal was even ruled upon within days of the hearing, which is almost unheard of in such cases). It still cost Cloudflare hundreds of thousands of dollars, but Blackbird had lost many of its employees and had cut back significantly on filing new lawsuits.

And now it's in even more trouble. The Court of Appeals for the Federal Circuit (CAFC, the appeals court that handles all patent cases) has upheld a lower court's order telling Blackbird it needs to pay $363,243.80 in legal fees to one of the companies it tried to shake down, Health in Motion LLC (HIM). The court clearly sees what's going on here, and its recounting of how Blackbird tried to get out of the case is... really something to behold. First, Blackbird sued and, following the typical patent trolling playbook, asked for $80,000 to settle. That number is (purposely) significantly less than it would take to fight the case in court. That's how the whole patent trolling shakedown process works. Sue, and then offer to settle for less than it would cost the defendant, even if they won the case. But HIM also decided to fight back and told Blackbird that it should pay them for having to waste this time on lawyers. From the CAFC summary, this is a fun read (if you're confused "Appellees" is HIM, the defendant in the case):

In June 2017, Blackbird offered to settle its case against Appellees for $80,000.... Appellees declined Blackbird’s offer, explaining that Blackbird’s “infringement allegations lack[ed] merit” “[i]n view of the substantial differences between what is claimed in the [’]976 [p]atent and the accused device,” .... Appellees also explained that they “believe[d] there [was] a strong likelihood” that Blackbird would be ordered to pay Appellees’ attorney fees, and countered with a settlement offer that included, inter alia, Blackbird “mak[ing] a payment of $120,000” to Appellees.

In October 2017, Blackbird made another settlement offer, this time for $50,000... (“Blackbird’s counsel . . . made an oral offer to settle the case if [Appellees] paid Blackbird $50,000.”). Again, Appellees declined.... In April 2018, Blackbird offered to settle yet again, this time for $15,000.... Appellees once again declined, “maintain[ing] their request that Blackbird pay a portion of [Appellees’] expenses[.]”... Later that same month, and again the following month (May 2018), Blackbird offered “a ‘walk-away’ settlement whereby [Appellees] would receive a license to the [’976] patent for zero dollars, and the case would be dismissed.”.... Once again, Appellees declined.... (Blackbird’s Vice President and Head of Litigation stating that “[Appellees], through counsel, have rejected all settlement offers by Blackbird . . . , including the zero-dollar ‘walk-away’ offer. . . . I understand the reasoning for this to be that [Appellees] have a belief that they will ultimate[ly] be awarded their legal fees after judgment in this matter”).

This is amusing. It's basically "Pay us $80k to go away." "No, fuckers, how about you pay us $120k." "Okay, how about $50k to go away." "No. You pay us." "$15k?" "No, you pay us!" "Okay, how about we just walk away for nothing." "No, dammit, you pay us."

Given that Blackbird's trolling strategy flopped pretty spectacularly, they then tried strategy two: run away!

In May 2018, shortly before discovery was scheduled to end, Appellees filed a motion for summary judgment.... Blackbird opposed... but, after Appellees’ motion was fully briefed, and without notifying Appellees in advance, Blackbird filed a notice of voluntary dismissal with prejudice... executed a covenant not to sue,... and filed a motion to dismiss for lack of subject matter jurisdiction.... (Appellees’ lead counsel explaining that “Blackbird’s counsel never mentioned that he intended to file a covenant not to sue. . . . Blackbird surprisingly filed a Notice of Dismissal, Covenant Not to Sue[,] and Motion to Dismiss”);... (Appellees’ counsel stating that Appellees “didn’t even get a call from Blackbird, [Appellees] just saw . . . on the [CM/]ECF [system] that [Blackbird] had filed these documents dismissing the case”).

That, right there, is Blackbird realizing "oh fuck, we're screwed."

The court notes that in "exceptional" cases,the courts may award legal fees. And this was an exceptional case.

Considering the “totality of the circumstances,” the District Court found that Blackbird’s case against Appellees is “exceptional within the meaning of [§] 285 and Octane Fitness.”.... Specifically, the District Court determined that Blackbird’s case against Appellees is “exceptional” because it “stand[s] out from . . . others with respect to” both “the substantive strength of [Blackbird’s] litigation position” and “the unreasonable manner in which the case [was] litigated” by Blackbird.... The District Court also found that “granting a fee award [was] warranted” in this case “to deter future abusive litigation.”... Finally, the District Court concluded that Appellees’ requested award of $363,243.80 was reasonable considering each attorney’s “comparable skill, experience, and reputation.”

And, as the CAFC notes, all of that was exactly right. I won't go through the full smackdown, but let's just say that CAFC found Blackbird's arguments "unpersuasive." Blackbird tried to argue that it couldn't have possibly known that its "litigation position was purportedly weak," but the court highlights that this is belied by the company's own actions.

...the exercise of even a modicum of due diligence by Blackbird, as part of a presuit investigation, would have revealed the weaknesses in its litigation position.

It also mocks Blackbird's silly claim that it only would have known that its legal position was weak if it was on notice from the court. As CAFC basically says, Blackbird's own actions disprove this claim:

It is also unclear what effect, if any, notice would have had on Blackbird’s conduct, as Blackbird waited until the “eve of trial” to dismiss its suit... despite being aware of Appellees’ non-infringement contentions months before....

At a minimum, Blackbird was aware of Appellees’ intention to seek attorney fees and expenses as early as December 2016, when, in answering Blackbird’s Original Complaint, Appellees requested attorney fees and expenses..... While this request may not have provided the “focused” and “supported” notice that we have looked for in other cases... it undermines Blackbird’s attempt to blame others, including the District Court, for it being purportedly unaware of the weaknesses in its litigation position. Accordingly, the District Court did not abuse its discretion in determining that this case “stands out” with respect to the lack of substantive strength in Blackbird’s litigation position.

Also, CAFC notes, it wasn't just Blackbird's laughably weak legal position that made this "exceptional." Blackbird's actions very much contributed to that decision, including its pursuit of "nuisance value settlements" (i.e., trolling).

The District Court did not limit its findings to the substantive strength of Blackbird’s litigation position, and further determined that Blackbird’s case against Appellees was “exceptional” because Blackbird “litigated . . . in an unreasonable manner.” ... The District Court made multiple findings to support this determination... each of which is supported by the record. First, the District Court found that Blackbird “made multiple settlement demands that were far less than the anticipated cost of defense,” i.e., nuisance value settlement offers.... By its own admission, Blackbird made a series of decreasing settlement offers... each of which was significantly less than the cost of litigation ... (Appellees’ litigation costs totaled at least $363,243.80).

Second, the District Court found that Blackbird unreasonably “delayed in producing documents, withheld many documents until after [Appellees] took [Blackbird’s] deposition[,] and completely failed to produce other responsive documents.”... Again, the record supports the District Court’s findings; indeed, the record shows numerous, unexcused delays by Blackbird in producing documents... as well as Blackbird’s attempts to withhold responsive documents entirely, without notice or excuse, until Appellees learned of the documents during depositions... (Blackbird admitting that it “had the documents in-house” yet failed to produce them),... (Blackbird admitting “[t]hat [it] is true” that “documents identified in th[e] deposition” have never been produced). While Blackbird subsequently implied that some of these documents might be privileged... Blackbird has failed to identify in the record any such assertion of privilege prior to the depositions.

Finally, the District Court determined that Blackbird had unreasonably “filed a notice of dismissal, covenant not to sue, and motion to dismiss without first notifying [Appellees’] counsel, on the same day pretrial submissions were due and shortly before [Appellees’] motion for summary judgment was to be decided.” ... The record supports these findings.... Accordingly, the District Court did not abuse its discretion in determining that this case stands out with respect to the manner in which Blackbird litigated.

Also, the court points out, Blackbird is a damn patent troll who does this type of stuff all the time:

In addition to its findings as to the substantive strength of Blackbird’s litigation position and conduct during litigation, the District Court found that “granting a fee award [was] warranted” in this case “to deter future abusive litigation.”... (explaining that Blackbird “has filed over one hundred patent infringement lawsuits, and none have been decided, on the merits, in favor of [Blackbird]”)

From there, the court looks at the requested attorneys fees and finds them perfectly reasonable... and concludes that Blackbird needs to pay up to the tune of $363,243.80.

Filed Under: cafc, legal fees, patent troll, patents, shakedown, vexatious
Companies: blackbird, health in motion

SLCC/FanX Gets A Stay On $4 Million In Legal Fees For SDCC Pending Appeal

from the by-a-thread dept

The whole saga of the trademark dispute between the famous San Diego Comic-Con comics convention and the smaller Salt Lake Comic Con has been a long and stupid one. Despite everyone with a working brain knowing that the term "comic-con" is both generic and descriptive, SDCC has a trademark on the term that it managed to wield like a legal sword attempting to slay SLCC. While a jury trial returned only a $20k judgement, the court then awarded $4 million in legal fees in favor of SDCC, arguing that SLCC's legal team attempted to jam up the trial process and timeline with its tactics. After all of this, SLCC changed its name to FanX, a whole bunch of other conventions proactively changed their own names, and FanX promised to appeal everything.

But it was an open question if SLCC/FanX would survive long enough for the appeal to take place. A $4 million dollar payout to SDCC, according to SLCC, would simply have crippled it and put it out of business altogether. This was the argument made to the appeals court, in which SLCC/FanX asked for a stay on the payments pending the appeal process. Fortunately, the court agreed to delay the attorney's fees payments.

With the judgment set to come due Oct. 22, FanX organizers sought a stay from the 9th Circuit Court of Appeals last week, arguing paying the bill in full now would "destroy" the business, hurt Utah's economy and prevent them from continuing with their appeal.

However, organizers argued that if they were allowed to wait to pay, FanX would be able to continue operating and, if they ultimately lose their appeal, they could pay the judgment in full.

In FanX wins the appeal, the judgment could be invalidated.

And not just that, but FanX is also seeking to have the entire verdict that resulted in this award appealed as well, arguing that its lawyers were prevented from making sound arguments that "comic-con" is a generic term, which it absolutely is.

But two things should be immediately obvious. First, this stay is perfectly just. A legal fees award that would cripple a party from defending itself on appeal is the sort of thing that seems purely outside the realm of how the legal process is supposed to work. The second is that this attorney's fees award is absolutely just as bonkers as I claimed it was when it was announced. To have that kind of number in fees awarded attached to a judgement that was in the five figures breaks all barriers of simple common sense.

At least this way, we'll get to see FanX take this to appeal.

Filed Under: comic con, comic conventions, legal fees, trademark
Companies: salt lake comic con, san diego comic-con, sdcc

Appeals Court Sticks Trolling 'Stupid Patent' Winner With $43,000 In Legal Fees

from the nominal-East-Texans-to-experience-lifestyle-changes dept

Winning the never-coveted "Stupid Patent of the Month" award is no honor. In fact, it sometimes enrages recipients to the point of sueball-throwing. But there is definitely a large amount of schadenfreude to be enjoyed by onlookers -- perhaps no more so than in the case of 2015 "SPotM" winner, conspiratorially-monikered Rothschild Connected Devices Innovations, LLC (whose limited liability fails to save it).

Rothschild "invented" a method of hooking up a mixing device to the internet to allow consumers to produce custom blends of their own. Prior art should have invalidated it, but didn't. Instead, the stupid patent allowed Rothschild to go after anyone who allowed users to customize anything over the internet. In one case, Rothschild applied its super-vague patent to a remotely accessible thermostat, arguing this was patent infringement because it allowed users to remotely customize temperatures. To cap off its troll pedigree, Rothschild filed all of its infringement lawsuits in the Eastern Texas District.

Now it's being told by the Federal Circuit Court of Appeals it must shell out some money for its disingenuous claims and litigation. (h/t The Technologist) As the opinion details, Rothschild tried to dismiss the lawsuit once it became apparent it wasn't going to win. The defendant served Rothschild with notice the patent would likely be found invalid after examination, as its first patent claim was ineligible for protection under federal law. ADS (the defendant) offered to settle for $43,000 in legal fees. Rothschild refused.

ADS then filed a motion to dismiss, using the same information it had given to Rothschild. It also included prior art that further bolstered its claims about the patent's lack of validity. Rothschild quickly moved to dismiss the case, hoping to avoid both a settlement or being stuck with paying the defendant's legal fees. This attempt failed.

ADS moved to block the dismissal, detailing Rothchild's long history of patent trolling. From the decision [PDF]:

ADS opposed and filed a cross-motion for attorney fees pursuant to § 285,4 see J.A. 249, based on its view that Rothschild’s suit was objectively unreasonable because Rothschild knew or should have known that claim 1 covers patent-ineligible subject matter under § 101 and is anticipated by prior art under § 102(a)(1), see J.A. 261–64. ADS also argued that Rothschild did not intend to test the merits of its claim and instead filed this and over fifty other lawsuits in the District Court to “‘exploit[] the high cost to defend complex litigation to extract nuisance value settlements’” from various defendants.

The district court, however, granted the motion to dismiss and stated Rothschild's abuse of its likely-invalid patent was evidence of nothing. The Appeals Court reverses this decision, pointing out the lower court ignored evidence and statements presented to it by ADS almost as much as Rothschild did.

The District Court clearly erred by failing to consider Rothschild’s willful ignorance of the prior art. In its Safe Harbor Notice and Cross-Motion for attorney fees, ADS included prior art that purportedly anticipates claim 1 of the ’090 patent. In response to ADS’s Cross-Motion for attorney fees, Rothschild submitted two affidavits relevant here. In the first, Rothschild’s counsel stated that he had “not conducted an analysis of any of the prior art asserted in [the] Cross[-]Motion to form a belief as to whether that prior art would invalidate” the ’090 patent. In the second, Rothschild’s founder echoed these statements. However, in the same affidavits, Rothschild’s counsel and founder both assert that they possessed a “good faith” belief that the ’090 patent “is valid.” It is unclear how Rothschild’s counsel and founder could reasonably believe that claim 1 is valid if neither analyzed the purportedly invalidating prior art provided by ADS. More problematic here, the District Court did not address these incongruent statements in its analysis.

[...]

In his declaration, Rothschild’s counsel states that he “reviewed publicly available information regarding ADS’s products and, in good faith, made a determination that the accused products infringed at least claim 1 of the [’090 patent].” Rothschild’s founder makes similar statements in his declaration. However, neither Rothschild’s counsel nor its founder supports their declaration statements with examples of websites, product brochures, manuals, or any other publicly available information that they purportedly reviewed. The conclusory and unsupported statements from Rothschild’s counsel and founder that claim 1 of the ’090 patent is valid have no evidentiary value.

As for Rothschild's long history of East Texas trolling, the Appeals Court has this to say:

According to ADS, Rothschild has asserted claim 1 of the ’090 patent in fifty-eight cases against technologies ranging from video cameras to coffeemakers to heat pumps. Appellant’s Br. 9. Further, ADS contends that Rothschild has settled the vast majority, if not all, of these cases for significantly below the average cost of defending an infringement lawsuit.

The District Court rejected ADS’s contention, finding “the fact that a patentee has asserted a patent against a wide variety of defendants and settled many of those cases . . . does not alone show bad faith.” The District Court based this aspect of its analysis on a clearly erroneous assessment of the evidence. The District Court predicated its finding on “the absence of any showing that [Rothschild] acted unreasonably or in bad faith in the context of this suit.” However, as explained above, that ancillary finding improperly rests upon statements from Rothschild’s counsel and founder that have no evidentiary value. Therefore, in the absence of evidence demonstrating that Rothschild engaged in reasonable conduct before the District Court, the undisputed evidence regarding Rothschild’s vexatious litigation warrants an affirmative exceptional case finding here.

This being an "exception case," ADS is entitled to legal fees. The $43,000 Rothschild tried to duck by dismissing the suit is awarded to the defendant on reversal.

This will hopefully be the beginning of the end for this patent troll. A Supreme Court decision shutting down forum shopping -- primarily by making the Eastern District of Texas far more difficult to exploit -- should drive another nail into Rothschild's coffin. I'm sure it never had any intention of paying anything out to anyone, as is the nature of all IP trolling operations. Once the judgments start going the other way, it's difficult to continue to capitalize on this super-shady "business model."

Filed Under: cafc, frivolous filings, lawsuit, legal fees, patents
Companies: rothschild connected devices innovations

Why The Latest Supreme Court Ruling In Kirtsaeng May Have A Much Bigger Impact On Copyright & Fair Use

from the phrasing-matters dept

Earlier this month, we wrote briefly about the Supreme Court's second Kirtsaeng ruling, which focused on the issue of fee shifting in copyright cases. We didn't spend that much time on it (and hadn't covered the run up to the Supreme Court either). We had basically assumed that the first Kirtsaeng ruling from the Supreme Court, about whether or not the First Sale Doctrine applied to goods outside the US, was the real legacy of the Kirtsaeng fight, rather than a more mundane issue about fee shifting -- especially when the more recent Kirtsaeng ruling was basically just "courts need to look at more than just if the original lawsuit was 'objectively reasonable'" (but fails to give much guidance about what else should be looked at). Yes, we noted, this may ward off some bogus copyright lawsuits, depending on what standards the courts start to coalesce around, but there wasn't much big news in the ruling.

However, copyright expert Jonathan Band spotted something important that many folks missed. Buried within the ruling are some statements about the purpose of copyright that may become quite useful in future cases. Specifically, it looks like the Supreme Court has just blessed the fact that copyright should encourage people to build upon existing works, and appears to be giving a nod to a broad interpretation of fair use that says that building on the works of others is a key part of the purpose copyright itself.

The Court quoted its 1994 decision in Fogerty v. Fantasy that “copyright law ultimately serves the purpose of enriching the general public through access to creative works.” The Court then stated, “the statute achieves that end by striking a balance between two subsidiary aims: encouraging and rewarding authors’ creations while enabling others to build on that work.”

The Court’s focus on the subsidiary aim of “enabling others to build on that work” goes beyond its previous pronouncements concerning how to achieve the objective of enriching the public through access to works. In 1984, in Sony v. Universal, the Court recognized that defining the appropriate scope of copyright protection “involves a difficult balance between the interests of authors and inventors in the control and exploitation of their writings and discoveries on the one hand, and society’s competing interest in the free flow of ideas, information, and commerce on the other…” In 1991, in Feist v. Rural Telephone, the Court stated that “copyright assures authors the right to their original expression, but encourages others to build freely on the ideas and information conveyed by a work.”

Thus, in these earlier cases, the Court discussed building on “the ideas and information conveyed by a work.” But in Kirtsaeng, the Court did not limit the reuse to “the ideas and information conveyed by a work;” rather, it more broadly addressed building “on that work.” Presumably the Kirtsaeng Court was referring not only to the ideas and information in the work, but also the expression in the work–to the extent use of the expression served “the purpose of enriching the general through access to creative works.” In other words, the Kirtsaeng Court was referring to fair use and other exceptions and limitations in the Copyright Act.

Band notes that hopefully this will help serve as a reminder to Congress about the important public interest objectives built into copyright. But I think it may start to show up in lots of other fair use lawsuits as well...

Filed Under: copyright, creativity, culture, fair use, legal fees, sudap kirtsaeng, supreme court

Appeals Court Says Trademark Bully/HIV Denialist Must Pay Defendant's Legal Fees

from the beating-back-the-bullies dept

Almost three years ago, a team of pro bono attorneys (D. Gill Sperlein, Paul Alan Levy, Gary Krupkin and Neal Hoffman) took up the defense of Jeffrey DeShong, an HIV-positive blogger who had been served a bogus trademark infringement lawsuit by Clark Baker, a retired LAPD officer who spends his free time defending people who have hidden their HIV-positive status from sexual partners.

Baker had no legal basis for his claims, but was obviously hoping airy claims of Lanham Act violations based on URL similarities would be all that was needed to shut up a vocal critic. He was wrong. The lawsuit was tossed in the pleading stages by the district court and that decision was upheld by the Fifth Circuit Court.

What the appeals court did not address the first time around -- shifting legal fees to the vexatious litigant -- has now been addressed. The Fifth Circuit Court of Appeals, at the urging of DeShong's defense team, has taken a new approach to its standard for fee shifting in obviously bogus lawsuits. Paul Alan Levy explains:

The federal court in Dallas readily dismissed the trademark claims on the face of the complaint, then declined to retain jurisdiction over the state-law defamation claims; in that way, the trial judge avoiding having to address DeShong's anti-SLAPP motion. But even though our path to overruling the Fifth Circuit's rule got easier when the Supreme Court held, in Octane Fitness, that the term "exceptional cases" in the Patent Code is not limited to lawsuits brought in bad faith, the trial judge was unwilling to buck clear Fifth Circuit precedent: he denied our fee motion relying on the Fifth Circuit's bad faith standard. Today, however, the Fifth Circuit held that its previous bad faith standard (and its requirement of clear and convincing evidence) has been effectively superseded by the Supreme Court's ruling in Octane Fitness. Henceforth, "an exceptional case is one where (1) in considering both governing law and the facts of the case, the case stands out from others with respect to the substantive strength of a party's litigating position; or (2) the unsuccessful party has litigated the case in an 'unreasonable manner.'"

This new standard will make it easier for defendants facing SLAPP-type lawsuits to retain counsel, as there's a significantly better chance for fee awards once courts have examined the case. Levy, however, notes that this won't help much in this lawsuit, as the trademark bully filed for bankruptcy while the appeal was pending. This not only means it's highly unlikely the $50,000 in fees requested will ever make their way to DeShong's defense team, but the filing also allowed Baker to drag out the appeals process for an additional year.

This outcome doesn't help the defense team's bottom line but for free speech defenders like Paul Levy and his partners in this case, the precedent set here is the bigger win. This should act as a deterrent against future acts of censorship-via-litigation in the Fifth Circuit's jurisdiction and lays another brick on the path towards a unified judicial stance against censorship through litigation.

Filed Under: clark baker, hiv denial, jeffrey deshong, legal fees, trademark, trademark bully