Archive for November, 2012

Copyright troll Prenda Law is accused of using a stolen identity for their offshore plaintiffs

Posted: November 30, 2012 by SJD in Coopergate, Prenda
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Prenda Law has been suing alleged porn pirates for almost two years. Little by little, the name of this law firm became known not only to those who were affected by its predatory practice, but also to a wider public. A narcissist John Steele never ran away from extra publicity, and the peak of his media exposure was a recent Forbes’ article “How Porn Copyright Lawyer John Steele Has Made A ‘Few Million Dollars’ Pursuing (Sometimes Innocent) ‘Porn Pirates’ “ by Kashmir Hill.

The rather long list of “People Most Hated By The Internet” — that guy who sued the Oatmeal, RIAA, Hunter Moore, Julia Allison, Violentacrez… — would be incomplete were it not to include John Steele. Steele is a lawyer who has partnered with the pornography industry to go after “pirates” who download their XXX films without paying for them. He has filed over 350 of these suits, and says he is currently suing approximately 20,000 people.

As a shakedown enterprise, Prenda is a complex organization and has many “clients” (I use quotes to emphasize the fact that, unlike a normal legal practice, it were not clients who shopped for legal representation and found Prenda Law, but the other way around: John Steele and others actively “hunted” for porn copyright holders in order to lure them into a lucrative semi-legal and obviously immoral schemes of monetizing copyright infringement of cheap pornography “works”).

While, just like other troll enterprises, Prenda uses real copyright holders like CP Productions, Sunlust Pictures etc., its masterminds, Paul Hansmeier, and Brett Gibbs were not as lucky as Keith Lipscomb, who has been able to milk Brigham Field and Colette Leah on a massive scale, giving them only a 10% cut of the settlement ransom money and keeping the rest. Prenda’s “real” clients wanted their “fair” (as if anything in in this “business” is fair) share, and infinitely greedy Prenda naturally always looked for ways to avoid sharing its loot.

First it was MCGIP, a mini-Righthaven, as Nicholas Ranallo, an attorney who defends victims of bittorent shakedown cases, nicely put it. Shortly after Nick’s article was published in TorrentFreak, MCGIP quietly ceased to exist. Although the idea of procuring copyrights for a sole purpose to mass-sue alleged bittorent file-sharers is obviously lucrative, doing it on the US sole right after the Righthaven fiasco was not wise.

So, our con artists went offshore. Two companies emerged out of the crooked minds of Paul Hansmeier and John Steele: Inguenity 13 and AF Holdings, both registered on St. Kitts and Nevis, a secrecy haven, where even attempting to uncover identities of business owners is a criminal offense.

Although it was obvious who the real owner of these companies was, it was really hard to proof due to the reasons mentioned above. Yet every criminal makes a fatal mistake in his career. And that mistake was involving the guy named Alan Cooper, a caretaker of John Steele’s inherited property in Minnesota. Steele asked him for some chores here and there, to answer the phone, etc., but little by little the crooks started using his name in official papers — as a manager for both offshore companies — and according to the letter embedded below, since Alan did not give them a permission to do so (and basically was not even aware of their actions), essentially committed an identity theft, lying under oath on multiple occasions, and forging Alan’s electronic signature (see the exhibits).

When Alan became aware of it, he lawyered up and filed the following letter in at least four of the fraudulent AF Holdings v. Doe cases (12-cv-02687, 12-cv-02688, 12-cv-02689, and 12-cv-01449). Read it. If it is not the beginning of Prenda’s end and does not prompt a massive federal investigation, I don’t know what to say…

To this date, AF Holdings filed 208 fraudulent copyright cases, Ingenuity 13 — 52.

“Alan Cooper” is not a rare name, and there is a small chance that another Alan Cooper exists and “serves” as a CEO of those two offshore companies, but given the circumstances, is anyone here willing to bet on it?

Update

12/4/2012
It took only five days for a troll Michael Dugas to react to Alan Cooper’s letter with a two-paragraph statement. Of course, the fraudster denied everything outright (what would you expect, “yes, we’ve been naughty, Your Honor”?):

I write to respond to the November 29, 2012 letter filed with the Court by Attorney Paul Godfread. In his letter, Attorney Godfread accuses AF Holdings LLC of being a sham corporation and fraudulently holding his client out as its CEO. Both of these accusations are categorically false.

Attorney Paul Godfread filed an identical letter in a similar case currently pending before the Honorable Judge Joan N. Erickson. In a text entry, the Court indicated it reviewed the letter and “will take no action on [Attorney Godfread’s] request.” Plaintiff respectfully requests that the Court reach similar decision.

This phrase suggests how bad Mr. Dugas is as an attorney (professionalism is not a quality of the highest priority for running an extortion scam). He should know that Judge Erickson’s statement simply translates to “Godfread has to make a Rule 24 motion to intervene before the court can take an action one way or the other.” Nothing more, nothing less.

Dugas’s letter ends with unsubstantiated threats towards Mr. Cooper’s attorney Paul Goldfread:

By way of separate action, Plaintiff will address Attorney Godfread’s egregious behavior.

…which is funny because Mr. Goldfread is protected by the litigation privilege… but we all know that making unsubstantiated threats is the very core of Prenda’s business, so no surprises here.

If this is all that the crooks could come up with in their defense in five days, all I hear is a fan’s circular frequency steadily increase in premonition of something hitting the blades very soon.

1/4/2013
One of four cases where Alan Cooper’s “Letter to District Judge” was filed (12-cv-02688), was dismissed with prejudice. Usually such dismissal means settlement, but I’m skeptical in this case. First, it is strange to settle while there is a substantial probability that AF Holdings is a fake company, and the instant case is the instant fraud. Second, while allowing the discovery, Judge Graham established at least one safeguard, which I’m sure Prenda crooks did not cheerfully welcome:

Within one day of extending any offer to settle to John Doe or having any other contact with John Doe, Plaintiff shall disclose the offer or contact to the Court by filing under seal a copy of (1) any written communication or (2) a transcript of any oral communication. Plaintiff shall also send a courtesy copy of each sealed document to the Court’s chambers.

Media coverage
  • TechDirt: John Steele’s Property Caretaker Intervenes In Copyright Trolling Case, Alleging Identity Theft by Mike Masnick.
    • Related posts
  • 1/15/2013: Prenda’s motion to disqualify Judge Otis Write has been denied.

    • A hearing transcript or a comedy screenplay? A must-read for those who think about settling

    Posted: November 30, 2012 by SJD in Prenda, Sunlust fiasco
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    On Tuesday, November 27, 2012 one of Prenda’s individual trolling cases, Sunlust Pictures LLC, v. Nguyen, (12-cv-01685) was dismissed by Judge Mary Scriven with fireworks (emphasis is mine):

    Judge Mary Scriven
    Federal Judge Mary Scriven

    The case is dismissed for failure to appear at this hearing, for failure to present a lawful agent, for attempted fraud on the Court by offering up a person who has no authority to act on behalf of the corporation as its corporate representative, and the Court will hear, by motion, a motion for sanctions and fees against this Sunlust entity and everyone affiliated with it, including a motion against Mr. Wasinger for his purposeful failure to appear at this hearing.

    And a motion will also be heard on Mr. Duffy for his lack of candor in relation to his connection with this matter based upon the representation of Mr. Torres that he was contacted by the Prenda Law Group or Prenda Law, Inc. for the purpose of being retained as local counsel in this case and that was not presented to the Court in this purportedcorrespondence. The case is dismissed.

    I intend to advise the other Judges in the Courthouse of the nature of this matter and may refer this matter to the Florida Bar for further proceedings.

    What preceded this ruling is an unreal, Kafkaesque hearing, that I offer for your enjoyment below. I read this transcript in a gym on a treadmill a couple of hours ago collecting strange looks from the gymgoers: my uncontrollable giggles and gasps were probably too loud.

    THE COURT: Mr. Lutz, who is the individual who you just spoke to in the Courtroom with you?
    MR. LUTZ: Sorry?
    THE COURT: Who is that behind you?
    MR. STEELE: Your Honor, my name is John Steele.
    THE COURT: Who are you?
    MR. STEELE: I’m an attorney, but not involved in this case.
    THE COURT: You’re an attorney with what law firm?
    MR. STEELE: I’m not an attorney with any law firm right now [...]

    During the entire hearing, the judge’s attempted to understand who was who in this comedy with everthickening plot. Despite that it was apparently the only actual agenda, I am not sure that the judge succeeded in figuring that out. The only thing that she seemingly got right is that she dealt with a bunch of fraudsters, and very sloppy ones. I hope that she will carry out her intentions to alert other judges and to ask the Florida Bar to conduct yet another investigation.

    Although both this hearing and the resulted dismissal were based on procedural questions, if you want to learn about the merits (or the lack thereof, to be more precise) of this case, read an excellent motion to dismiss written by the defense counsel Graham Syfert.

    Please set sharp things aside, do not eat and drink, and sit firmly and comfortably, so you cannot fall and injure yourself. Laughs are guaranteed (not for Steele though: I am sure that some unpleasant phone conversations ruined his evening).

    After you wipe off your tears and your hiccups subside, I will have a question for you. I am waiting.

    Ready?

    Girls and boys, ladies and gentleman, senior citizens!

    Do you understand that the clowns that appeared in this comedy are the very same people that manage to terrorize tens of thousands and to induce fear so irrational, that many, prior to understanding what’s going on, reach out their checkbooks and write four-figure amounts on the checks? How can it possibly happen?
    Appendix. Prenda and Florida: a love story

    Many things happened since my article/informal interview with Graham Syfert “Who and where is Prenda Law? What happened to John Steele?” written in May, but you do not need to follow all the intrigues, just one fact is enough to know. This fact is: Prenda has tried and failed to secure nine local counsels in Florida:

    • Joanne Diez: filed one case, it is not implausible that her name was used without her consent.
    • R.B.: the guy I don’t want to name, because John Steele has committed an identity theft and used his letterhead /email without his permission.
    • Joseph Perea: was an integral part of Prenda, officially left it, although continues trolling, investigated by the Florida Bar (initiated by multiple parties).
    • George Banas: resigned.
    • Maurice Castellanos: resigned.
    • Matthew Wasinger: resigned.
    • Jonathan Torres: resigned.
    • Alan Greenstein: a current counsel, but for how long will he hold the ground? :)

    Every time a new guy understood that the newly acquired stink he couldn’t get rid of is exuded by Prenda Law, he ran away as quickly as possible. Even 75% contingency fee cannot persuade local lawyers to stain their future careers by associating themselves with a lawfirm that is actively investigated by the Florida Bar Association, and is expected to be investigated criminally in the nearest future.

    Media coverage
    Followups

    POLICY LETTER TO JUDGES AND LAWMAKERS ON COPYRIGHT INFRINGEMENT LAWSUITS RELATING TO BITTORRENT USE AND THE "PIRACY" PROBLEM.

    Posted: November 28, 2012 by SJD in Reblogged
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    Reblogged from TorrentLawyer™ - Exposing Copyright Trolls and Their Lawsuits:

    This post is off-topic as far as reporting on bittorrent cases go, but I was thinking this morning about a better solution to copyright holders suing defendants for $150,000 per infringed title.

    I have included a .pdf of this letter both here and on the blog's POLICY page with my signature which I am comfortable for people to forward over to lawmakers, judges, etc.  

    Read more… 2,863 more words

    Long overdue update on Guava v. Skyler Case (Prenda’s Cook County lawsuit)

    Posted: November 27, 2012 by SJD in Guava/Lightspeed, Prenda
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    Exactly two months ago, I wrote about one of the Prenda’s most brazenly frivolous case — Guava v. Skyler Case (2012-L-007363) and its “cousin” — Arte De Oaxaca v. Stacey Mullen (12-L-9036). That post ended with a report from the September 25 hearing, and the report was very promising: the subpoenas were stayed, Judge Tailor was angry: he seemingly clearly understood the real goals of the game that Prenda has been playing in his court, and he did not like it. He even suspected the collusion between Prenda and the defendant’s lawyer, Adam Urbanczyk, and did not hesitate to openly inquire about it. The next hearing date was set to October 26 (and was later moved to November 4), and the agenda was to discuss the motions to quash, the majority of which were filed by the alleged “co-conspirators,” represented by attorney Erin Russell.

    Some developments took place between these two hearings. These developments help to understand what eventually happened at the November 4 hearing and after it.

    Prenda’s enemy #1

    Erin Russell became John Steele’s Enemy #1 around the September hearing. Why? Because, as John believed, she brought too much publicity to what was going on in the obscure (on the national level) Cook County court, and (again, according to his beliefs) she informed the judges (or at least one judge — Tailor) about the real nature of these cases. No surprise that this knowledge jeopardized Prenda’s to-be smooth shakedown campaign, in which, as the blackmailers believed, nothing could go wrong, and the names of the putative extortion targets would be obtained without any opposition. The entire operation was supposed to fly smoothly under the radar of the public eye.

    Was Steele right about the Erin’s role? My opinion: yes and no.

    • Yes. Erin indeed filed damn good motions that explained the scam in detail, and the judge obviously listened to her.
    • No. If Erin was not involved at all, someone else would open the judge’s eyes, and there is no way the blogosphere would not notice such a brazen assault on the judicial system: for instance, I started receiving hints long before the September events.

    Anyway, you can look yourself how pissed off Steele was. The following sheer hysteria in one Steele-written, Duffy-signed document makes it clear: this apparently experienced and talented lady-lawyer appeared to botch a lucrative scam, and she had no intention to go away.

    Defendants’ role in the conspiracy

    I’m not talking about thousands of alleged “co-conspirators,” but about the two “official” defendants in these cases, both represented by allegedly anti-troll EFF-listed attorney Adam Urbanczyk. The sequence of events in both cases was eyebrow-raising to say the least: Prenda and the defense signed an agreed order allowing the crooks to subpoena ISPs for subsequent shakedown without any opposition whatsoever, and without any court-imposed safeguards. Remember, in underfunded state courts, if adversaries agree on something, judges are more than happy to sign it: in many cases, judges do not even read what they sign. The Arte of Oaxaca case’s development was even more bizarre: such astonishingly short was the time span (two business days) between the complaint and the agreed order, which was signed prior to the defendant’s Answer, prior even to a formal appearance of the defense counsel!

    One more bad-aftertaste-inducing incident took place on October 1, followed by a motion where Erin described Adam’s allegedly less-than-noble behavior:

    Not a surprise that Adam immediately offered his side of the story, effectively calling Erin a liar, he even wrote a long and (sorry, Adam) unconvincing blog post about this ordeal.

    In the meantime, Mr. Adam Urbanczyk continues to play a role of a diligent defense counsel, even though all his filings are rather toothless, and it is hard to brush off an impression that he acts in a major fear of angering John Steele and his gang.

    Urbanczyk even filed an official deposition notice that listed mind-bogging 10 (!) questions, every one of which can be answered by anyone leisurely following this case after massaging the information this blog’s community managed to gather. Just compare this discovery request (which looks more like an example from a legal textbook) with the set of 300+ harsh discovery questions Jeff Fantalis presented to the trolls. (Fantalis’s questions ultimately led to Malibu Media paying its way out of disaster.)

    What is Guava?

    Before I continue to the November hearing, it is worth to remind that Guava is nothing else but Lightspeed Media. Remember, Adam Urbanzcik told us:

    Guava, LLC, as we know it, is a rights-holding company and the case pending in the Circuit Court of Cook County is somewhat of a spiritual successor to the infamous 11-L-0683 Lightspeed Media case filed late last year in St. Clair County, Illinois. It is our understanding that Prenda’s experience with Lightspeed Media’s representatives being personally identified and threatened as a result of the lawsuits (the 11-L-0683 case, and others) has led to its clients forming these even more ambiguously-titled entities to (relatively) save face.

    So it is clear that Lightspeed = Guava. Note that “Guava LLC” is an entity that most likely was never registered and does not exist — we could find a slight trace of it. If this this guess turns to be correct, there may be grave consequences for both Lightspeed (which is on sale as a company) and Prenda. Regarding Adam’s comment cited above, I object to using the word “spiritual” — these people have no soul, hence nothing about them can be described as “spiritual.”

    Another solid proof of Guava/Lightspeed equivalency is a release agreement I received from a guy who had settled. I cannot publish this document in its entirety (as a matter of fact, I have only a fragment that the guy sent to me using TOR), but the line that connects both fraudsters is worth displaying:

     

    Also, rewinding fast forward, Steele said the following during the November 4 hearing. My mind is reeling: just imagine a judge hearing all this crap (the wording is not exact, restored from a witness’ memory, but the meaning is correct):

    Guava owns protected computers, but the files stored in that computers contain copyrighted stuff, and the copyrights belong to a third company. Guava goes after people because of hacking, but that third company, which also happens to be our client, may say: look, this IP address infringed our copyright, so we may decide to go after the same IP for copyright infringement.

    So what does it mean? If you are not at work (not safe due to a lot of bad taste signatures and avatars!), visit this GFY thread, where Steve Lightspeed tried to brag about his “forensic” software, Arcadia Security’s THIEF 2.0., but instead of receiving a bubble bath of cheers, he was ridiculed by his peers, specifically because of the purported accuracy of his homemade scripts. So, since Plaintiff’s principal, Steve Jones, retained a script kiddie Steve Jones to use Steve Jones’s “forensic” software in Guava/Arte de Oaxaca cases, even setting the obvious conflict of interest aside, it can be safely guaranteed that at least half of the folks who received ransom letters, has nothing to do with the alleged “hacking.” Why feds don’t look into this, puzzles me. Or do they?

    November 4th hearing

    On October 24, two days before the hearing, Paul Duffy called the court clerk and asked to postpone the hearing because he “needed surgery.” Those who are not burdened with such funny qualities as honesty and integrity, often have an upper hand since they can lie appealing to empathy and get what they want. I have no idea if Duffy actually needed/had a surgery — it is not so difficult to check, but I bet he did not. Even more, his purported health issues are absolutely irrelevant: it is a common belief that Paul Duffy is a no one, a nominal president of Prenda, a patsy, that he does not write motions, does not argue in courtrooms, does not reply to emails. During both hearings, he did not open his mouth besides naming himself at the beginning.

    I suspect that the real boss is not even John Steele, but rather Paul Hansmeier: Steele brought him to the hearing and communicated with him all the time, while Paul did not pronounce a word during the entire hearing.

    The postponement was entirely strategic: by October 26 the dismissal of Erin’s clients was not finalized and she would clearly had a voice. On November 5, every one of Ms. Russel’s clients was dismissed (to the best of Prenda’s knowledge), and Steele could not resist a tirade in front of the judge (the wording is not exact, but the meaning is):

    …it is not clear what this woman is doing here: her clients were not parties in the first place, and did not have standing to question subpoena, and now they are doubly non-parties after being dismissed.

    He then even suggested that Erin had been seeking a cheap fame by means of being related to a case that has drawn national attention (his words). Well… I would say that it is a very questionable honor to have any, even most distant business with Mr. Steele: it is rather burdensome to take an emergency shower (the urge is overwhelming!) after being in the same room with this paragon of ethics.

    The hearing was rather short: Erin’s motions were ruled moot, and the next hearing on the other two motions by the “co-conspirators” represented by Jeffrey Antonelli and another attorney was postponed until December 12. The subpoena stay was not lifted (which is good). Here is the order.

    There is still hope that Judge Tailor knows what to do with this shame of a case, we will see. Note that phrase in the order “If all the pending motions to quash are withdrawn [...] plaintiff may motion this court for his [...] lifting of the stay” was added by the plaintiff, and, unlike I thought initially, does not mean much.

    What happened to the dismissed “co-conspirators”?

    All of them are being sued in federal courts all over the country. Prenda used its goons to file at least ten cases. I’ll talk about them below in more detail.

    It is hardly a rational cause of events. Steele’s ego told him to vindicate Erin whatever it costs. First, let us see some of the statements widely believed to be tweeted by Steele. Of course, there is no strict proof (and he even mocked his correspondents: “What you know vs what you can prove little mice!“), but given his inside knowledge, his hallmark unique grammar mistakes, and the fulfillment of the promises, I’m 99% sure: it is John Steele.

    So, his drunken rage resulted is some tweets that, if proven, in a normal country would cost a lawyer his license (the last one is especially egregious):

    • I bet Mitch Goldstein is happy to have hired atty Russell.This is what happened 6 hours after her representation letter http://wefightpiracy.com/userfiles/GoldStein%20(IL).pdf
    • @ThatAnonDude @Raul15340965 Yep, the Bull has huge balls. And her first two people we sued just settled! Hmmm, suing individuals is nice!
    • @ThatAnonDude @ThePirateSlayer Ask Erin how that conversation with Mitch Goldstein went when he fired her, hired new atty and settled. SLAP!
    • I wonder if 32 individual cases are currently popping up around the country right now for people represented by one particular IL atty:)
    • Another former E.R. client in IL begging to settle, claiming their former atty never let them know the risks of fighting. Mmm, malpractice?
    • @ThatAnonDude @CopyrightCat I just hope that none of the pirates ever cut a deal to get off in exchange for providing info on certain attys.

    (See the entire collection of [supposedly] John Steele’s tweets — unfortuately without the context, out of conversations — here, here, and here.)

    In addition, John appeared in the comment section and left the following turd from IP address 64.190.14.220 on October 4, 2012 at 5:48 pm:

    I’ll take my medicine when things don’t go my way. I give credit to Erin Russell, although she was as surprised as I was the judge stayed the discovery. Don’t worry, all the info was already back except for one ISP. Oh, BTW, you pirates will note there is a new pleading in the Guava case withdrawing the IP’s of all of Erin’s clients from discovery. I wonder why? ? ? Hmmmm. Its a puzzle. Here is a clue. Check http://wefightpiracy.com/suits-against-individuals.php tomorrow at 5pm.

    Again, congratulations Erin, I’m sure the rest of your clients will be as happy as Mitch Goldstein is in a couple of days.

    As it is often said, no comments necessary. However, I cannot help quoting one comment from a reader:

    Anonymous says on October 5, 2012 at 4:45 pm

    Steele is trying to make it look like filing against Erin’s clients in federal court is a “revenge” tactic directed at them, to make things tougher on them, but it is really pragmatic and a sign of desperation.

    If all of Erin’s clients are dismissed from the state case and put in a federal case instead, that means she isn’t there to monkey with his state case anymore, and he can show up with Adam and they can collude unopposed (although it may be a bit too late for that as this judge seems to know what’s up). THAT is the real game here, to be able to show up in court with his buddy and be the only two who get to have a say in how the case plays out.

    The fact that this is a 5-Doe case and not 5 named cases is a giveaway, he’s trying to reduce the risk and cost associated with this move. Naming the Does raises the stakes and filing 5 suits costs 5 times as much. Don’t be surprised if he doesn’t even bother to follow up on the 5-Doe case, lets it go 120 without service and it gets dismissed or he dismisses it. As long as their lawyer stays out of the courtroom in the Guava state case he doesn’t care.

    So, in the end we see that John is just being a pussy as usual and can’t deal with a case when there is opposing counsel, especially if he’s getting his ass beat by a girl.

    Erin should go thermonuclear on this bullshit. I would further suggest that this is getting way beyond sanctionable conduct.

    Federal Guava cases

    There are 10 federal Guava cases that list 1 to 3 “proper” IP addresses, the ones located in a particular state, yet majority, if not all of those complaints also demand the entire set, the same 34 IP addresses to be subpoenaed (actually 33 — one of the addresses is erroneously listed twice in all four complaints):

    Essentially, the fraudsters have duplicated their discovery requests in up to ten different jurisdictions simultaneously (is that even legal?), and it looks like at least four of those districts gave them what they wanted, probably unaware of what they are doing elsewhere. If the info has not been purged yet on the ISP end, they’ll get the names of the subscribers for up to 33 IP addresses courtesy of judicial laziness in AZ, MA, CT, and GA.

    Note that time stamps are missing from the pleadings.

    There are some unique developments in every one of these cases, but this post is already obscenely long. It would be nice to have a follow-up analysis (or at least simple reporting) of these developments. Any volunteers? Also, I will be grateful if you report any inaccuracies in this post.

    The only thing I can’t help noticing is one particular blooper that appears in more than one complaint: some of these cases have been openly declared as copyright lawsuits. For instance, in the Alabama case’s complaint, we read on p. 2:

    This Court has personal jurisdiction over the Defendant because, upon information and belief, they either reside in or committed copyright infringement within the State of Alabama.

    This sloppiness has undermined Prenda bosses’ hard work of bulshitting courts — making them believe that copyright has nothing to do with the CFAA lawsuits. Only recently Steele, with foam dripping from his mouth, opposed Jason Sweets’ statement that Lightsped’s cases are essentially copyright actions:

    Even the most inattentive review of the Complaint clearly demonstrates that this is not a copyright action. Smith chooses to ignore that fact and premises his Motion on arguments that, even if they were correct (which they are not), would be properly argued in an action involving claims for copyright infringement. Smith could have avoided needlessly wasting the Court’s time if he had based his arguments on what is actually in the Complaint, rather than what he may have been charged with if he were in a copyright case action.

    [...]

    Smith needn’t have bothered making the vast majority of the arguments in his motion, because this is not a copyright case. This case is about computer hacking and theft…

    Apparently, Steele has neglected to inform his minions that mentioning copyright is a big no-no. Consequently, poor underemployed wannabe lawyers roam on legal fields like goats whose owner failed to tie them.

     

    We will continue following these cases and their eventual downfall. Visit this page again: I will post updates.

     

    12/12/2012 Update

    Today’s Guava case management conference was super-quick: Duffy and Urbanzcyk (only those two presented, Steele has a bigger headache to address) said to Judge Tailor that they deposited their “clients”. The judge “thumbed nose at additional subpoenas” (in witness’ words) and set the next hearing to 1/16/2013: at that date he wants to see the transcripts of the said depositions, as if he does not believe that they were genuine (or even performed at all). I asked some lawyers, and they confirmed: such an order is rather extraordinary.

    1/16/2013 Update

    Today’s hearing, according to a witness, was quick: Judge Tailor once again reiterated his usual concerns about the case and ordered both sides to present deposition transcripts by 1/30/2013. Subpoenas are still stayed. It’s a one-line order:

    Transcripts of both plaintiff’s and defendant’s depositions shall be provided to the court by Jan 30,2013

    Next hearing is set to 2/20/2013, 9:20 am.

    Media coverage
    Followup
    Relevant pages
    • All the documents from the state “hacking,” allegedly collusive cases are located on this page. A discussion is going on there as well.

    Happy Thanksgiving

    Posted: November 22, 2012 by SJD in Not so serious
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    Happy Thanksgiving, everyone! I’m so grateful to everyone involved in the fight against copyright trolls: lawyers, regular commenters and contributors, even newbie Does who were scared after receiving a Halloween card from the crooks, but met us and calmed down, resolving not to feed the extortion machine.

    Thank you, everyone!

    Enjoy the song with an appropriate title “Thank you.”

     

    It takes only 6 minutes to walk from the House of Blues, where the magic took place, to the Troll Central at 161 North Clark. A different kind of “magic” happens there: Prenda Law throws a karaoke party and a special guest Daniel Ruggiero sings in Jersey anything’s legal as long as you don’t get caught. Their superband “AF Holdings” plays loud Halloween music, not knowing that the cover hiding the fraud it is based on has already developed serious cracks and is about to break.

    Back-of-the-napkin arithmetic: how much trolls are willing to pay when a defendant endangers their shakedown “business”?

    Posted: November 20, 2012 by SJD in Community contributions, Lipscomb, Malibu Media v. Fantalis
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    by Doecumb

    I’ve done some back-of-the-napkin arithmetic to make to estimate numbers in the Fantalis settlement. I won’t give too many details, to avoid encouraging any greedy would be trolls. It’s reasonable to assume that the overlord of the Lipscomb/Malibu/Patrick Collins/others gang is getting at least 50% of the collections. Different significant bad actors, including the apparent plaintiffs, are getting more like 10% shares. The number of Does allegations is much more than 10,000. Roughly half of Does have been settling, and the settlements are usually thousands of dollars.

    Fantalis constructed thorough arguments. If he were very wealthy, he would be able to hire high powered lawyers or use influence to have allegations withdrawn. If he were very poor, there would be no financial assets for the trolls to chase. Fantalis has proven he’s determined. It would take a significant settlement to persuade him.

    Lipscomb or the scheme overseer surely sees many ways revelation on the way to trial can stop the whole money machine. For instance, the troll lawyer contingency fee might be 90% of collections. Some plaintiff businesses may be revealed to be shell companies expressly set up by plaintiff and/or counsel immediately prior to allegations. The case load of the local attorneys may be unmanageable for anything except phone harassment of Does to collect quick settlements. Evidence of extreme false allegation cases may get into the record. Sensitive information about plaintiff finances or activities may be revealed. The quality of the supposed forensic tracking software may be evaluated. The reputation of the so-called forensic firms will also be questioned. The possibilities of I.P. hacking or mis-identification will be presented. And so on.

    The overseers may be nasty but some have shown cunning. They must have done the calculation already about how much its worth for them to buy out Does who countersue, when abuses of the trolling scheme are close to surfacing. They may decide it’s a tiny percent of their earnings, or a small fraction.

    Here’s the ballpark: A tiny percent of the overlord troll’s collections is in the $100,000 range. A few percent or more is in the $500,000 range, a fraction much more than a few percent gets above a million $. In a troll’s shoes, the greater the threat, the more it’s worth to keep a profitable business going.

    Malibu Media has settled the matter with Jeff Fantalis

    Posted: November 15, 2012 by SJD in Lipscomb, Malibu Media v. Fantalis
    Tags: , , ,
    66

    The title says it all. It was rather unexpected, yet this ordeal over for Jeff and his family, and I’m happy for them. It would be hypocritical not to admit some sadness: everyone hoped for the inevitable (and absolute) victory that would send its healing ways across the country. As a matter of fact, it is a victory to a certain extent. Fantalises advanced further than any other pro se (and not only) defendant and did a Herculean job organizing existing defense ideas and coming up with novel ones. Everyone here thinks they are heroes. And a neat library of examples, ideas and templates does not go anywhere.

    Previous coverage
    Featured comment

    AC on 2012/11/16 at 10:59 am:

    Wow! I never saw this coming after the heated week or so of filings from both Kotzker and Fantalis! Simply amazing, to say the least. I have been following this case since the beginning with great interest, read every filing in its entirety, so I am very happy to see this kind of ending.

    To be clear, despite not being privy to the terms of the settlement, we can know with 100% certainty they were very favorable to Jeff Fantalis.

    Let’s take a look at the facts of the last week and see who was sweating:

    Malibu Media was ordered to begin production of documents on November 9 to be completed by November 26, 2012. This includes:

    • Any documents describing flaws of deficiencies the company uses to identify IP addresses.
    • ALL communications between Mailbu Media and Lipscomb.
    • ALL communications between Malibu Media and any “enforcement” trolls.
    • Retainer agreement between Kotzker and Malibu Media.
    • Any agreements between Malibu Media, IPP, Tobias Fieser, Brigham Field and Colette Leah. Remember the judge said if it is a contingency agreement, then there will be a problem. Guess what: It’s probably a contingency agreement!

    Also remember that the judge ordered Kotzker to send the fee agreement between Kotzker/Lipscomb/Malibu Media to his personal chambers for him to review. Want to guess if there’s something they don’t want the judge to see in there?

    Oh yeah, and what about Collette Leah making obviously, provably false statements in a sworn document. I’m betting she never even read the document, signed it, and it was a big shock to her when Lipscomb/Kotzker informed her that she was about to be brought in on perjury charges. Maybe this was the point Malibu Media decided to settle?

    Finally, remember that Kotzker admitted he could no longer take on any more cases in CO because litigating this one single case was taking too much of his time. Thus the troll extortion operation in Colorado effectively was about to grind to a halt due to a single doe fighting back.

    Or how about Fantalis’ most recent filing, which accuses Malibu Media of double dipping in recovery by collecting more than the maximum statutory limits? Want to guess that they have already been made whole through settlements, and they would like to continue extorting money for the same films which they have already been compensated for?

    It’s quite clear that Malibu Media was completely fucked in this case before trial even began. Even though we didn’t get to see this go to trial, we still learned a great deal about Malibu Media and their operation, and how far they are willing to go to prevent ANY trial from EVER reaching discovery, let alone a jury, despite the fact that they demand a jury trial in every single one of their complaints.

    Most importantly, when a defender says “The trolls never want to go to trial” the Troll can no longer point to Fantalis’ case and say “Look, this one’s moving along.” Now this is more ammo for the defender who can now say “They had the chance to go to trial, and right when they were forced to produce discovery, they settled. Any claims that they want to litigate these cases are complete lies.”

    So I guess our next best hope to see something like this go to trial is the PA Bellwether. Here’s hoping we actually see some discovery there before they settle and dismiss, as we can all expect will happen.

    Another commenter adds an important bullet point:

    You forgot the comment the judge said where if a jury found any of the films obscene they would not be copyrightable. IMHO, this was huge. Can you imagine if this actually went to trial and the result was they were not copyrightable (what are the chances the jury wouldn’t find them obscene)!? That would be used in every defense going forward. [...]

    Joinder or no joinder? Can’t have both

    Posted: November 14, 2012 by SJD in Community contributions, Lipscomb, Malibu Media v. Fantalis
    Tags: , , , , , , , ,
    13

    By AC

    Malibu Media v. Fantalis et al: another update

    We continue to cover one of the most important battlegrounds against copyright trolls, Malibu Media, LLCv. Jeff Fantalis et al lawsuit (12-cv-00886). If you don’t know what it is about, please consider reading the previous posts on the topic:

     

    Motion denied on technicality, resubmitted

    On 11/7 Jeff Fantalis filed a motion for leave to file surreply to Kotzker’s objection to Fantalis’ objection to the entry of Default Judgment against Bruce Dunn (whew… the back and forth is really getting extreme). The motion was denied on a technicality:

    Defendant Fantalis’ Motion for Leave to File Surreply [filed November 5, 2012; docket #107] is denied without prejudice for failure to comply with D.C. Colo. LCivR 7.1A, which states,

    • The court will not consider any motion, other than a motion under Fed. R. Civ. P. 12 or 56, unless counsel for the moving party or a pro se party, before filing the motion, has conferred or made reasonable, good-faith efforts to confer with opposing counsel or a pro se party to resolve the disputed matter. The moving party shall state in the motion, or in a certificate attached to the motion, the specific efforts to comply with this rule.

     

    It looks like Fantalis has all but given up on trying to confer with Kotzker before filing. So Fantalis went and conferred with Kotzker, and needless to say Kotzker objected. So, Fantalis refiled the motion having fulfilled the technicality:

    Calling out fallacy

    This motion is a real beauty. Fantalis is basically arguing 3 points:

    1. Kotzker cannot argue that defendants are jointly and severally liable (JSL) in the complaint to minimize filing costs, and then later turn around and argue the defendants are independent from one another to maximize damages.
    2. Plaintiff is dropping charges and changing theories midstream to prejudice discovery proceedings.
    3. Plaintiff cannot collect twice on recovery.

     

    1

    So I know we all love to argue that swarm theory of joinder is bogus, and I still agree with this because in many cases it kills the troll business model before it begins: suing individuals one by one is not a profitable business model.

    However, many districts like the theory, and many subpoenas are being granted under it. So it seems counterintuitive that in fact, the swarm theory of joinder has some benefits if a case has proceeds past the initial ex parte discovery phase that Fantalis is now trying to take advantage of, and some downsides Kotzker is trying to avoid. Also see Rob Cashman’s post, which explores this line of argument more fully.

    Fantalis claims that Kotzker cannot argue that defendants are JSL in the complaint, and then turn around and argue they are not at the current stage. Plaintiff benefited in those early stages because it allowed them to file a single complaint against 30 Does, and get all their information with one subpoena. Now, they want to argue the opposite, because if they are JSL, then Malibu Media can only collect $150,000 among the 30 Does, instead of $150,000 from each.

    In reliance on these sworn statements [on JSL], the Court permitted Plaintiff to proceed with filing a single case against 30 anonymous defendants and granted Plaintiff’s request for expedited discovery to uncover their personal identifying information [...]

    However, Plaintiff’s interests have now changed. Plaintiff has achieved its goal: it obtained their personal identifying information of the Does and has obtained settlements from many of them. It got a settlement from Deus and a default against Dunn. Now Plaintiff simply seeks to maximize the amount it can collect from this lawsuit with as little public exposure as possible. Therefore, it is dropping any claims that would require it to reveal its own financial interests — hence, dropping its claim for actual damages — and is dropping the claim for contributory infringement because in that way, it can attempt to collect maximum statutory damages separately from each individual infringer.

    Fantalis argues that plaintiff is estopped (a tool courts invoke to prevent the “improper use of judicial machinery”) from abandoning its previous allegations, on the grounds that it cannot hold two opposing points of view especially when the previous point of view was accepted by the court (they granted ex parte discovery based on swarm theory of joinder), and would prejudice the other party.

    2

    So as many of us suspected, Kotzker is now shifting tactics to avoid discovery and collect maximum damages for the Malibu Media. The charge dropped was contributory infringement, and Kotzker is now electing to take only statutory damages. This is important because

    [B]y dropping the claim of contributory liability and demand for actual damages, Plaintiff has avoided providing discovery in response to any questions that might conceivably touch on anything but direct infringement and statutory damages until a decision is made on Plaintiff’s motion to dismiss. Moreover, Plaintiff seeks to gain an unfair advantage by avoiding this claim of contributory liability: namely, it seeks to avoid having to engage in a hearing on the issues of damages.

    This is very important, because as we learned from Troll Nicoletti, and as we expected all along, Malibu Media is just a shell corporation whose sole existence is to contract works from Brigham Field and then sue individuals who download them. Ultimately, Brigham Field and other stakeholders in Malibu Media do not want to be exposed to liability through these lawsuits. Thus, they hope to limit and confound discovery of the financial workings of Malibu Media.

    3

    Finally, Fantalis argues that Malibu Media is not allowed to collect twice for the same infringement. The default on Bruce Dunn was ordered at $2,500 in statutory damages + $739.26 in attorney’s fees, for a total of $3,239.26 (which is funny on 2 counts. 1) it’s significantly less than the $30,000 they were requesting and 2) it’s less than the typical $3400 Prenda asks for settlement. I believe Malibu Media settles for between $7000 and $10000 for these multiple infringement suits. In this case, not even answering the summons is more economical than settling).

    Fantalis also counts Dues in this action, and 8 other Does who settled in the previous action. Thus Malibu Media has recovered at least nine separate settlements for the same alleged act of infringement. Again they argued originally that the defendants were JSL. Accordingly:

    Copyright infringement is in the nature of a tort, for which all who participate in the infringement are jointly and severally liable… under elementary principles of tort law a plaintiff is entitled to only one recovery for a wrong. Payments made in partial satisfaction of a claim are credited against the remaining liability.

    Thus Malibu Media can only recover a total of $150,000 for the infringement from all Does combined if they are JSL. Now Kotzker is trying to pivot and say “No wait… these were separate acts, and we want $150,000 from each individual.” This position also prevents Kotzker from having to divulge settlement info related to the infringement to the court.

    Further, it seems to me that if they want to argue that all members of the swarm for all time are JSL (as they argue in their complaints), settlements from any suit across the country for the infringement of a given film in the same swarm should be credited toward the same $150,000 total, not just the current action. After all, if defendants in the swarm in the same district spanning months of time are JSL, then any member in the swarm in any district at any time is JSL. But that is my own conjecture.

    Finally, I leave you with this passage from the motion, which sums the whole piece up nicely (emphasis added):

    As noted above, the allegations of Plaintiff’s Complaints against defendant… were very clear: these defendants are jointly and severally liable; they participated together in one massive, collective activity; and they could not possibly have acted alone because this was such a huge undertaking — in fact, the very nature of the technology requires concerted action. Thus, for Plaintiff now to say that each act of infringement was discrete and unique is not only disingenuous, it gives the lie to the entire foundation of Plaintiff’s cases across the nation. Either the defendants worked together or they didn’t. Either they participated in the BitTorrent or they didn’t. This is a question of fact without which Plaintiff cannot succeed in its case: if Plaintiff wants to concede this issue, it should be required to dismiss its entire case against Defendant. The fact that Dues settled and Dunn defaulted does not change Plaintiff’s burden on this score.

    So what’s it going to be Kotzker? Joinder or no Joinder? Can’t have both.

    An explosive mixture of emotions and reason — the future that copyright trolls will deal with

    Posted: November 13, 2012 by SJD in Prenda
    Tags: , , , , , , , , ,
    14
    A defendant’s curt answer to trolls’ frivolous allegations

    Today DirTrollDie wrote about the eight Arizona individually named cases brought by Prenda Law.

    I don’t want to substitute for that informative post, I recommend reading it in its entirety. What I want is to give a bit more publicity to one particular document — an Answer and Counterclaim filed by one of the Prenda’s targets, a pro se defendant David Harris (those who follow this blog has a pleasure of meeting him, although his name was not public at that time).

    Although it lists undeniably strong arguments, this document is harsh, bordering rude. But it is certainly written right from the heart, unlike trolls’ filings that come from an empty space located where normal people have a vital organ responsible for telling right from wrong.

    Defendant begins:

    In the instant case these parasitical mutants of society, the masters of exploitation and experts of deception, the epitome of greed has bolstered their arrogant delusions of being untouchable to the point that they have rendered themselves completely vulnerable to the very court system that they rely upon to execute leverage against their victims. Watch as the veil is pulled back exposing the bitterly ugly evil that is this Copyright Troll.

    Arizona continues to amaze me: first it was Adam Sekora, who continues to confuse (and scare) extortionists by his unusually strong resolution to fight to the end and win. And now we have David with his Answer. Oh, I almost forgot about Arizona’s Attorney General calling trolls’ MO “extortion” on camera.

    I hope that the judge will be lenient to layman’s ways of defending his dignity and will concentrate on the solid arguments in his pleadings, not only on emotions. On the other hand, Steele and his gang should not dismiss these emotions and be scary, very scary. Because when hundreds and thousands of their victims overcome their initial fear, their wrath may damage more than crooks’ insect-size karmas.

    My hat tip to David: needless to say, while I wish him the best of luck and to prevail in this case, I’m not too much worried about him: this man obviously can stand for himself. So far, trolls managed to avoid disturbing this kind of people en masse, in part because too many fighters preferred to ignore the entire ordeal while being anonymous parties of mass shakedown cases. Things change when such people are confronted directly. Trolls’ “luck” with mass cases was accompanied by a fatal fatigue — a false belief that people are generally defenseless sheep and can be effortlessly fleeced. You can guess that I have no desire to de-illusion the crooks: let them find out the reality the hard way.

    Updates

    Malibu Media’s massive fraud: an update

    Posted: November 13, 2012 by Raul in Lipscomb
    Tags: , , , , , , , , , ,
    8
    By Raul
    The following was meant to be an update to the Saturday’s post “Malibu Media’s massive fraud“, but given the update’s size, I thought it would be more reasonable to make a separate post, especially given that the subject is really “a bomb.”

    On November 12, 2012 defense counsel, Jeffrey Thennisch, delivered to the doorstep of troll Paul Nicoletti a thermonuclear device cleverly disguised as a motion to dismiss Malibu Media’s complaint (embedded below) coupled with simultaneous applications to the Copyright Office to cancel the copyright registrations of Malibu Media to the 15 registrations at issue in this lawsuit. The motion itself is highly legalistic and technical but it essentially boils down to the fact that Malibu Media has absolutely no legal right to sue for copyright infringement in this lawsuit as its copyright registrations are defective/fraudulent or in Thennisch’s summation:

    Brigham Field
    Brigham Field

    …in response to the standing issue raised by the Doe Defendants, the named Plaintiff, realizing the “defect” in the specific Copyright Registrations asserted in this action on June 14, 2012, filed Supplemental Registration Forms CA for “the Works” on September 13, 2012 (see Exhibit C) all based upon a subsequent assignment which now alleges that “the Works” were, in fact, created by a current non-party individual named Brigham Field and transferred through an assignment of copyright to Malibu Media, LLC after the company was formed. Essentially, the named Plaintiff’s response to the standing issue raised by the Doe Defendants was to create and file an “after-the-fact” assignment document before the U.S. Copyright Office in the hopes of recreating standing. However, standing must exist when this action was commenced. Here, the September 13, 2012 document and assignment (see Exhibit 2:12-cv-12586-PJD-MJH Doc # 41 Filed 11/12/12 Pg 7 of 23 Pg ID 499 2D) from Brigham Field to Malibu Media LLC assigns the rights, title and interest in “the works” but does not specifically include any right(s) to sue for past infringements. This is now fatal.

    Thennisch further argues that even if this lawsuit is not dismissed it should be put on hold until the Copyright Office can evaluate the validity of Malibu Media’s copyright registrations while invoking the notorious Righthaven litigation:

    Perhaps more simply stated, the named Plaintiff, Malibu Media, LLC, filed this case on June 14, 2012 bringing multiple copyright infringement counts against at least thirteen (13) different parties without ever disclosing the fact that the non-party individual, Brigham Field, who we are now told is/was the “real” owner of the asserted rights — “may” have simply assigned such rights to Malibu Media, LLC. This is what the Plaintiff’s own September 13, 2012 documents at Exhibit D clearly state. However, Exhibit D does not include any attempt by Mr. Field to assign or transfer the right to bring such copyright infringement actions from himself, the individual, to Malibu Media, LLC or any other entity. In short, the named Plaintiff does not function as the legal or beneficial owner of any of the asserted rights and simply lacks the legal ability to bring the present claims which Malibu Media, LLC — not Brigham Field — filed before this Court on June 14, 2012. Most notably, “the right to sue for past infringement can be transferred to another party so long as it is expressly included in the assignment along with an exclusive right. Righthaven LLC v. Hoehn, 792 F.Supp.2d 1138 (D.Nev.2011) citing Silvers, 402 F.3d at 889-90. Nothing the Plaintiff has presented includes such a right.

    Turning to the requests to cancel Malibu Media’s copyright registrations, there are a lot of fun quotes but this is my favorite is point 1, in which Thennisch points out that the registrations are a “canard” as it is a “factual, legal and metaphysical impossibility” for Malibu Media to be an “employer for hire”. Likewise, Thennisch points out that:

    …Malibu Media has filed multiple copyright infringement proceedings throughout the United States against viewers of this “adult” content, as John Doe defendants, to extract settlements based upon issued copyright registrations which defy cognitive comprehension of the Julian calendar. In short, and with great respect, the Library of Congress is being used and pandered as a tool to effectuate the business plan of a pornogragher… the U.S. Constitution deserves better than this.

     

    Once Nicoletti clambers out of his bomb shelter we will see how he responds to this unprecedented onslaught.

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