Archive for February, 2013

After Judge Wright’s strong Order to show cause why copyright troll Brett Gibbs should not be severely sanctioned for all his troubles (Ingenuity v. Jon Doe — CACD 12-cv-08333), both parties — Gibbs (via a newly hired law firm “primarily defending lawyers in malpractice actions”) and Morgan Pietz have exchanged intensive pleadings. Gibbs has seemingly decided to save his ass by throwing the troll masterminds under the bus, while Morgan Pietz, having only a couple of hours before the filing deadline, wrote one of his best briefs explaining Gibbs’s and Prenda’s fraudulent, possibly criminal, activities.

Gibbs, while pointing his finger to Prenda, has been choosing his words carefully though, and employing so painfully familiar weaseltalk, managed not to call the real criminals by name.

Judge Otis Wright, tired of the said weaseltalk, issued yet another order yesterday, consolidating five Prenda’s cases for the purpose of the March 11 sanctions hearing, and mandating Gibbs to answer simple questions directly and unambiguously (a skill that this miserable troll is obviously lacking):

Brett Gibbs is hereby ordered to respond to the following questions in a separate brief, to be submitted by March 1, 2013:

  • The names and contact information of the “senior members of the law firm that employed Mr. Gibbs in an ‘of counsel’ relationship.” (Gibbs Resp. 2.);
  • The names and contact information of the persons who make “strategic decisions . . . whether to file actions, who to sue, and whether to make a certain settlement demand or accept an offer of settlement.” (Gibbs Resp. 2.);
  • The names and contact information of the “owners of these copyrights.” (Gibbs Resp. 2.) If these owners are business entities, then provide in addition the names and contact information of the principals of these entities.
  • The names and contact information of the principals of AF Holdings LLC and Ingenuity 13 LLC.

 

I envision Gibbs whining about such a short time given to him to produce answers. Yet, just stop and think for a moment: how long would it take to answer these questions for an honest attorney employed by a reputable law firm that conducts legal and respectable business? Five minutes? Ten?

Additionally, the judge ordered that

The parties may each file a supplemental brief, limited to five pages, addressing the issues raised in the parties briefs submitted on February 19, 2013. These supplemental briefs shall be filed by March 4, 2013.

So, expect more crocodile tears from one side and the sound of a hammer hitting another nail in the coffin of copyright trolling from the other.

Last, but not least, Judge Wright is damn serious about burying Prenda:

Further, Mr. Gibbs is reminded to appear in person at the March 11, 2013 hearing.

I would say it is safe to buy non-refundable tickets to Los Angeles if you want to attend one of the most important hearings in the history of Prenda’s downfall. And, in the meantime, John Steele and Paul Hansmeier will have a lot of uncomfortable talking to do during this weekend in Utah.

In other news

I hope you did not miss Arstechnica’s feature story about Raul, DieTrollDie, Morgan Pietz and yours truly:

 

Update

3/1/2013

Brett Gibbs replied to the Judge Wright’s order (embedded above) in the evening of March 1st, 2013:

  • John Steele and Paul Hansmeier were correctly named as the “senior members” of Steele Hansmeier PLLC / Prenda Law / LW Holdings LLC (“Livewire“). Paul Duffy was mentioned as Prenda’s sole principle.
    • Gibbs refused to provide their personal addresses and phone numbers in an open document, citing the publicly advertised number and Washington DC’s virtual office instead. Agreed to file the personal information under seal.
  • Gibbs claimed that “upon information and belief” both AF Holdings and Ingenuity 13 were organized “under the laws of St. Kitts and Nevis,” provided the address (Springates East, Government Road, Charlestown, Nevis — the address that is a “home” to a shitload of companies).
  • Mark Lutz was identified as a CEO of both fake corporations. He lives and works in Las Vegas, his address is not known to Gibbs, only the phone number. Agreed to file the phone number under seal.
  • One copyright (“Popular Demand”) was transferred from Heartbreaker Films LLC to AF Holdings, the other two copyrights (“A Peek Behind the Scenes at a Show” and “Five Fan Favorites”) were assigned to Ingenuity 13 directly (it is not clear who was the initial owner: naturally Ingenuity 13 did not produce the smut).
  • Neither Alan Cooper nor Salt Marsh has been mentioned at all.

 

First reaction

Mysterious Anonymous commented:

Gibbs’ response to the request for contact information is filed. Total load of crap, i.e. he doesn’t provide the contact information requested “out of an abundance of caution” and wants to file it under seal.

I called that.

These guys are so pathetic, using public resources to play the blackmail, pay us or else we name and shame game and of course they don’t want anyone to know who they are. I’m sure, given the documented shadiness of everything Steele has touched, Judge Wright considered the possibility that lots of people want a piece of these scumbags, and if he wanted to give Gibbs the option to file under seal, he would have.

It is also clear that Lutz is being set up as the fall guy. Why else would he suddenly become CEO of all of the Steele’s creations? No wonder he had the sense to try fleeing to Mexico, too bad that didn’t work out for him, soon he’s probably going to wish he stayed in spite of the muggings and jail and whatever the hell other trouble he got himself into. I would suspect Lutz is being used as their fake CEO without his knowledge or permission a la Cooper, but since he is still making calls and should be able to use the Internet, there’s no way he doesn’t know. That may explain why he’s calling as Jeff Schultz or whatever, it would be kinda weird for the CEO of a real company to make dunning calls personally.

Nice try guys but with all the dirt Pietz and Ranallo dug up regarding Steele’s ties to these frauds, I somehow doubt he is going to forget about the Alan Cooper thing just because they say Lutz is CEO now. It’s looking like Gibbs really is backed into a corner here, for some reason he is not willing to dox these guys even to save his own ass, but Wright does not seem likely to put up with this crap.

Update 2

3/4/2013
As directed by Judge Otis Wright, at least one of the parties, Morgan Pietz submitted his last (before the hearings) brief in support of sanctions. At the same time, Cory Doctorow posted his very emotional article on BoingBoing. In my mind these two write-ups are mysteriously connected. Connected by a clear message from the bottom of the heart of every honest individual: “Enough is enough!”

(See also Pietz’s declaration and exhibits that include a diagram of Prenda cobbleweb and wi-fi coverage maps similar to one we posted recently.)

A bit later, Gibbs filed his brief (via counsel). Nothing to comment on here, except the fact that the course on trying to clean himself up by blaming Prenda for all the wrongdoings was unambiguously confirmed:

[…]the Pietz Response relies on guilt by association in attempting to assail Mr. Gibbs for his mere association with, and the alleged activity of, Steele Hansmeier PLLC (“S&H”) and Prenda Law, Inc. (“Prenda”).

Mr. Gibbs no longer has a relationship with Prenda or Livewire Holdings LLC. He is no longer counsel of record for any cases involving Ingenuity and is counsel of record in one case for AF Holdings pending AF Holdings retaining new counsel.

Media coverage
2/22/2013 Update: this fraud is seemingly grounded shortly after it took off (scroll to the bottom of the post).

Over the last couple of days, I started receiving disturbing reports about a new copyright extortion outfit, “Internet Copyright Law Enforcement Agency.” The con artists behind this “company” have been mass-sending demand letters threatening that those who won’t pay $495 by a certain date, “will be fingerprinted, photographed, and held in jail until you are arraigned in court.”

Internet Copyright Law Enforcement Agency

 

According to confidential reports, the IP addresses and file titles (this scam deals with music, not films) are not made-up (to the extent of the reliability of collection methods, of course). Therefore, either the crooks indeed work with an IP monitoring company or use home-brewed methods (can be as simple as running an out-of-box Bittorent client and analyzing logs). Collusion between former owners of the file sharing sites and this scam outfit is also a possibility. At this moment, it is an open question how this outfit managed to translate IP addresses into the subscribers’ personal information. This is very disturbing.

What is unusual and what places this scam far beyond even Prenda Law on the brazenness scale, is the nature of the threats. Unlike the majority of US copyright trolls, who abuse copyright law but manage to balance on the edge of legality, ICLEA undeniably crosses the line by threatening its targets with criminal prosecution.

The most despicable existing troll operations (Prenda, Lipscomb, CEG-TEK, etc.) never endangered their lucrative shakedown scheme by wandering into a clearly criminal domain. There is a very scarce and scattered evidence of some callers making threats of criminal prosecution (those are mostly collection agents to whom Lipscomb outsourced harassment), but I believe those threats are not indicative and most likely were not approved by troll masterminds.

Back to ICLEA. The majority of those who dealt with copyright trolls, including lawyers, immediately recognized the fraud. The address listed on the website is a rented “virtual office,” calls go to voicemail, etc. I believe that these crooks will be busted very soon, but since I am concerned about uneducated, easily scared victims, I have decided to write about it in order to utilize the high visibility of this site to search engines, so potential victims would find this warning:

Internet Copyright Law Enforcement Agency is a scam; this “company” is engaged in criminal extortion — these letters are sent through the mail so they constitute mail fraud and wire fraud. This crosses the line of criminality because this outfit impersonates law enforcement and falsely threatens its victims with criminal prosecution.

Don’t even think about cutting a check to the criminals: they will be history very soon.

Below is the text of the letter, found on The Internet Patrol Site. I will replace it with a scan of an actual letter when/if I get one.

Re: Illegal Internet activity resulting in potential criminal and/or civil charges Internet Copyright Law Enforcement Agency v. John Doe
Case ID 12345 Confirmation 67890

If this matter is not settled by Friday, March 1, 2013, you may lace potential felony criminal and/or civil charges filed against you. If you are arrested for felony criminal copyright infringement you will be fingerprinted, photographed, and held in jail until you are arraigned in court.

Dear Mr. Doe,

My name is David Walsh and I am a Senior Copyright Law Enforcement Officer with the Internet Copyright Law Enforcement Agency, an international organization that has been charged with enforcing copyright laws on the Internet worldwide. We work with law enforcement agencies and strategic partners around the world to enforce copyright laws, and to help prosecute individuals and companies who violate these laws.

We have identified illegal Internet activity involving copyright crime occurring by either you, or someone in your household such as a spouse, child, or roommate. Under the United States No Electronic Theft (NET) Act, penalties for willfully infringing copyright law can include a felony criminal conviction that can result in imprisonment, and/or fines of up to several million dollars:

17 U.S.C.§506(a). Penalties for criminal infringement, set forth in Title 18 of the U.S. Code, are a felony conviction entailing up to five years imprisonment and/or a fine of up to $250,000. In addition to a criminal conviction and fine, copyright holders can also file a civil court case against the copyright infringer. 17 U.S.C. § 504(c)(2). In a civil case where the court finds that infringement was committed willfully, the court can award statutory damages of up to $150,000 per infringement.

The copyrighted materials outlined below in the Evidence section of this notice are a small sample of the materials that have been illegally downloaded and shared through your Internet account. As the Internet Service Provider (ISP) account holder, you are legally liable for what occurs over your Internet connection. Evidence collected against you includes the correlation of your IP (Internet Provider) address listed in this notice at the time that the copyright crime we identified was committed.

Evidence: Internet Copyright Law Enforcement Agency v. John Doe

File Name: Equinox (Skrillex).mp3
Copyright Holder: Psychopathic Records
File Size: 2.1 MB
Date Downloaded: Monday, April 23, 2012 – 5:58 PM Software/Network: FrostWire (BitTorrent)
IP Address: 66.85.235.51

File Name: Cee Lo Green – Fuck You.mp3
Copyright Holder: Elektra Records
File Size: 3.5 MB
Date Downloaded: Saturday, November 19, 2011 – 11:59 PM Software/Network: FrostWire (Gnutella)
IP Address: 66.85.235.51

As you can see by the Evidence we have against you, the copyright crime you committed was done through P2P (Peer-To-Peer) file- sharing software. P2P file-sharing software allows Internet users to share music, movies, software, and other types of files. Some examples of P2P software include LimeWire, FrostWire, Cabos, uTorrent, BitTorrent, Vuze, and Ares. Even if you purchased the file – sharing software or subscription to a website, the rights you purchased were for the file-sharing software or subscription itself and not the rights to download, upload, or otherwise share copyrighted materials.

Claiming that you were not aware that you were committing a copyright crime by sharing the files listed in this notice does not absolve you of criminal and/or civil liability, and you are still liable for copyright infringement. In fact, if you read the fine print and/or user agreement associated with the file-sharing program you used or subscription you purchased, you will likely find a clause that places the liability on you as the end user and references the fact that downloading, uploading, or otherwise sharing copyrighted materials is illegal.

If you cannot locate the files listed in this notice, someone with access to your computer may have deleted the files. Either way, you can still be held criminally and/or civilly liable, as a crime has already been committed. Electronic evidence collected against you can still be used to prosecute you, even if the files have been deleted from your computer.

At this point, no criminal and/or civil charges have been filed against you, however if this matter is not settled by Friday, March 1, 2013 then you may face serious potential criminal and/or civil charges filed against you. If you are arrested for felony criminal copyright infringement you will be fingerprinted, photographed, and held in jail until you are arraigned in court.

We are providing you with an opportunity to settle this matter and will accept the sum of $495 to avoid any potential further action from being taken against you. If you act promptly you will help avoid being named as a Defendant in a potential criminal and/or civil lawsuit that can result in a felony criminal conviction causing imprisonment, and/or fines of up to several million dollars. You can pay the settlement amount of $495 and avoid further action from being taken against you by following these steps:

(1) Read and sign the Settlement Agreement included with this notice.

(2) Prepare a check or money order in the amount of $495 made payable to “Net Tech Division/Internet Copyright Agency”. Be sure to reference Case 12345 on your method of payment.

(3) Mail the signed Settlement Agreement along with your settlement payment to:

Internet Copyright Law Enforcement Agency Net Technology Division
1455 Pennsylvania Ave NW, Suite 400 Washington, DC 20004

We will contact you once we receive your Settlement Agreement and payment to confirm that no criminal and/or civil action will be taken against you, along with providing you with steps you can take to help avoid any future legal entanglements.

Enclosed please find a sheet containing answers to questions you may have and a Settlement Agreement. We look forward to your settling this matter before criminal and/or civil action is taken against you.

Sincerely,

David Walsh
Senior Copyright Law Enforcement Officer
Internet Copyright Law Enforcement Agency
E-mail: dwalsh@copyrightlawenforcement.com

Now the good news: frauds like this inevitably draw attention of the law enforcement. Public also becomes more aware of these scams’ existence. Thus, the “classic” copyright trolls increasingly find themselves in an uncomfortably open area under the bright spotlights. LiveWire Holdings, for instance, is not registered anywhere in the US, and it uses a virtual address in Washington, DC; this fact alone can trigger law enforcement’s sensors previously not tuned to respond to such signals.

We help to accelerate trolls’ downfall, but what will ultimately bury copyright extortionists is their own greed. Over the course of the human history, greed has been killing criminal organizations much more sophisticated than copyright trolling operations.

Update

2/22/2013

Busted!

Thanks to Mike Masnick and others for alerting me about the apparent shutdown of the fraudulent operation. Currently the website of the “Internet Copyright Law Enforcement Agency” looks like this:

It was quick. To the best of my knowledge, many people, including lawyers, reported or called/emailed “David Walsh” threatening to report this fraud to the FBI and other authorities. While I’m glad it turned out this way, many disturbing questions remain. It is still not clear how the scam artists managed to link IP addresses to identities. There are suspicions linking this operation to the “Limewire Settlement” scam, so it is possible that both IP addresses and identifying information were fished at that time.

Impersonating a government agency

While searching Google cache, I found out that yesterday’s version of the website was pretty mild in comparison to what the crooks had earlier. There is a pretty damning evidence that the impersonation of a government agency was an essential part of the fraud (see the cached version of “Home” and a picture of a police arrest on the next page). Also note an attempt to solicit snitching: the “Report copyright crime” page was not included into the yesterday’s version.

ICLEA archive:

Media coverage
Saying that judges rarely use words “incarceration,” “fraud,” “automatic bench warrant” in an order to show cause would be an understatement. Nonetheless, Judge Otis Wright did just that in Ingenuity v. Jon Doe (CACD 12-cv-08333). Tired of apparent Prenda Law’s fraudulent activities, he ordered its counsel Brett Gibbs to explain his and his law firm’s behavior at a hearing set for March 11. Additionally, he allowed parties (Brett Gibbs and Morgan Pietz) to file briefs before February 19. A deposition of Prenda by Morgan Pietz was set to proceed on the same date.

Brett Gibbs tries to play a pity card, points finger at “Prenda senior people”

Copyright troll Brett Gibbs

A couple of hours before the deadline, Brett Gibbs filed his declaration through a newly hired law firm Waxler Carner Brodsky LLP, which has been “primarily defending lawyers in malpractice actions.” Although it was a relatively wise move (akin to an old lawyer’s saying that “a lawyer who represents himself in a court has a fool for a client”), the result was a pile of horse manure that does not pass a common sense scrutiny. The funny thing is that this spectacular failure does not characterize Gibbs’s defenders, it’s just too much lying to explain: no star attorney is capable of coming up with a credible story painting Gibbs an innocent kid deceived by evil grown-ups.

Regardless, the main huge news is that Brett has given up his stubborn loyalty and has started pointing his finger at Prenda’s “senior members” (Paul Hansmeier and John Steele):

I am and have never had an ownership interest in the copyrights involved in the Copyright Litigations. As discussed in greater detail below, I did not make strategic decisions like whether to file actions, who to sue, and whether to make a certain settlement demand or accept an offer of settlement in the Copyright Litigations. These types of decisions were made by the clients, after consulting with senior members of the law firms that employed me in an “of counsel” relationship.
[…]

I have never had a financial or fiduciary (i.e., ownership) interest in AF Holdings. AF Holdings was a client of S&H and then Prenda. The face-to-face and direct interactions between S&H and later Prenda with AF Holdings were handled by the senior members of the law firms and not me.
[…]

I have never met Alan Cooper, and do not know what the extent of Mr. Cooper’s role is in AF Holdings aside from seeing a signature from an “Alan Cooper” on the copyright assignments and pleadings.
[…]

I first became aware of a question regarding the identity of Alan Cooper when it was raised by Mr. Pietz.
[…]

I confirmed the existence of the client-executed verification either by seeing a copy of the signed verification, or at the very least, being informed by a representative of S&H or Prenda that a signed verification was in the possession of S & H or Prenda.

The explanation of the reason how Alan Copper’s fraudulent signature was verified by Gibbs and why he failed to present the original is simply stunning. Sure, it is a credible and sufficient reasoning that will clear Mr. Brett’s name so he will avoid sanctions:

In Case No. 84, Mr. Pietz first asked for a copy of Mr. Cooper’s verification to the petition to perpetuate testimony on or about December 2012, well after the petition had been discharged. Given the length of time since the case was discharged, I was informed and understand that S&H (and later Prenda) no longer has a copy of Mr. Cooper’s verification to the petition to perpetuate testimony.

Just a week earlier Steele and Hansmeier decided to delegate Gibbs’s responsibilities to Michael Dugas. After two and half years of collaboration, they have thrown Brett under the bus, so no surprise that his loyalty has evaporated quickly.

I’ll leave it to a reader to go through unconvincing excuses, which are not as entertaining as those that another troll’s mob mastermind, Keith Lipscomb, poured on Judge Baylson last fall.

 


Click to enlarge

[2/21/2013 update] It is not remotely funny anymore that Brett (to whom we already gave an honorable nickname “Pinocchio”) is lying without even thinking about the possibility of anyone doing some basic fact checking. Here is an example (thanks to a commenter for noticing):

From Gibbs’s declaration:

31. In addition, in order to rule out neighbors of the 1411 Paseo Jacaranda, Santa Maria, California 93458 location utilizing the internet connection, I performed a Google map search and obtained a satellite picture of the corner house located at 1411 Paseo Jacaranda, Santa Maria, California 93458. A further public search revealed that the house was approximately 1,200 sq. ft. which sat on a 6,534 sq. ft. lot. Considering the position of the house on the lot, and its position away from the neighboring houses, it seemed clear that, should the household have wireless internet, it would not have been accessible by the neighbors.

Alright. A typical wireless range is from 50 to 100 m. Look at the map: green circle’s radius is 50 m, and yellow — 100 m. So we are talking about 10-30 households capable of utilizing the wireless connection in question.

Can’t help noticing another funny argument in Gibbs’s declaration:

[…] the inconsistency did not prevent a prima facie showing of copyright ownership because the law only requires the assignment to he signed by the assignor. Given the court’s finding that the copyright assignment in Case No. 3335 was prima facie valid despite an issue regarding whether the assignee had properly executed the assignment. I had and have a good faith belief that the assignments in Case No. 6636 and 6669 are valid despite any alleged issue regarding the identity of Alan Cooper.

Or, as scruuball translated it to Twitter’s 140,

It doesn’t matter that we forged a signature, because we didn’t need it in the first place! Hah!

To our surprise, there is a certificate of AF Holdings’ incorporation, but the quality of the copy is poor, and I’m afraid that given St. Kitts’ secrecy laws, there is no way to validate that it is authentic. Even if it is real, this does not negate the fact that AF Holdings is a shell entity “owned” by Prenda. Note that nothing of this kind was presented for another fraudulent entity, Ingenuity 13.

The fact that Brett Gibbs has lawyered up has more significance: it will be easier for him to cut a deal with an Attorney General and (relatively) save his ass while allowing putting the major culprits behind the bars.

Morgan Pietz replies to Judge Wright’s OSC. One word: “Wow”

Defendant’s attorney Morgan Pietz had just an hour to review Gibbs’s weaselspeak. Admittedly, Morgan wrote the bulk of his response in advance, but still he managed to add thorough debunking of Gibbs’s whining. It’s impossible to pull pieces from this document, it is a must read from the first line to the last. It has is all: a long history of Prenda’s crookery, calling out lies and contradictions in Gibbs’s declaration, examples of more identity theft, damning revelations during the deposition of Paul Hansmeier (who, like a “boss” in an action computer game, appeared in the last episode).

I only want to quote the beautiful conclusion (links supplied):

The conduct of Prenda and its “of counsel” Mr. Gibbs in these cases undermines the integrity of the courts and the public’s confidence in the justice system. Here, Prenda has shown is that it is willing to do just about anything to obtain grist for its national “settlement” mill. Repeatedly, in hundreds of actions filed in courts across the country, Prenda has resorted to misrepresentations, halftruths, and questionable tactics, if not outright fraud, forgery, and identity theft. Until now, Prenda has gotten away with quite a lot of these kinds of tactics because it simply abandons its lawsuits, via a voluntary dismissal, after obtaining subpoena returns, and some settlements. Indeed, as noted above, Mr. Gibbs is already at it again, now sending out demand letters on behalf of Guava, LLC, which is now purportedly owned by Livewire Holdings, LLC not a mystery trust. Exactly who is responsible for the worst of Prenda’s actions here may not yet be clear, but this is the archetypical type of case, where there is a pattern of bad action that is done in such a way to avoid scrutiny, where a major sanctions is appropriate as a deterrent. This Court is urged not to go easy on Mr. Gibbs or Prenda Law.

 

Many paragraphs in this brief deserve separate posts, and sure we will continue shedding the light on Prenda and its epic downfall until the fraudsters cease their criminal activity and are severely punished.

Followup
Media coverage
By Raul

For some time now federal judges across our nation have expressed uneasiness with a copyright troll’s bald assertion that in a porn copyright infringement complaint an IP address equates with the alleged copyright infringer. This concern was famously voiced by Magistrate Judge Gary Brown of he Eastern District of New York who noted:

[I]t is no more likely that the subscriber to an IP address carried out a particular computer function — here the purported illegal downloading of a single pornographic film — than to say an individual who pays the telephone bill made a specific telephone call.

Likewise, Judge Otis Wright in the Central District of California put his concern in this regard a little more bluntly:

An IP address alone may yield subscriber information, but that may only lead to the person paying for the internet service and not necessarily the actual infringer, who may be a family member, roommate, employee, customer, guest, or even a complete stranger. […] And given the subject matter of AF Holdings’s accusations and the economics of defending such a lawsuit, it is highly likely that the subscriber would immediately pay a settlement demand — regardless whether the subscriber is the actual infringer. This Court has a duty to protect the innocent citizens of this district from this sort of legal shakedown, even though a copyright holder’s rights may be infringed by a few deviants. Thus, when viewed with the public interest in mind, the Court is reluctant to allow any fishing-expedition discovery when all a plaintiff has is an IP address — the burden is on the plaintiff to find other ways to more precisely identify the accused infringer without causing collateral damage.

See also, Rob Cashman’s excellent analysis of this issue.


Federal Judge Barry Ted Moskowitz

Finally, however, in the Southern District of California Judge Barry Moskowitz has found that an IP address, alone, is insufficient to support a complaint for copyright infringement. The lawsuit is AF Holdings v. Rogers (CASD 12-cv-01519) brought by the infamous Prenda Law Firm http://fightcopyrighttrolls.com/category/clans/prenda/. The complaint alleges copyright infringement, contributory copyright infringement, and negligence. On 11/20/2012 Mr. Rogers, the defendant pro se, filed his motion to dismiss the complaint for failure to state a claim (I believe the motion was cribbed from the one filed by attorney Nick Ranallo in another AF Holdings lawsuit). Subsequently on 12/3/2012 Prenda filed its response in opposition to the motion. Judge Moskowitz made his Order granting in part motion to dismiss on 1/29/2013. Addressing the copyright infringement and contributory copyright infringement, the judge notes that:

[…] the Court is concerned about the lack of facts establishing that Defendant was using that IP address at that particular time. Indeed, the FAC does not explain what link, if any, there is between Defendant and the IP address. It is possible that Plaintiff sued Defendant because he is the subscriber to IP address 68.8.137.53. (The Court notes that it is actually unclear whether the IP address is registered to Defendant). As recognized by many courts, just because an IP address is registered to an individual does not mean that he or she is guilty of infringement when that IP address is used to commit infringing activity.

Furthermore, the judge is concerned that:

Because the subscriber of an IP address may very well be innocent of infringing activity associated with the IP address, courts take care to distinguish between subscribers and infringers. Courts limit discovery regarding Doe defendants in BitTorrent cases to ensure that potentially innocent subscribers are not needlessly humiliated and coerced into unfair settlements.

Accordingly, the judge determines that (emphasis supplied):

Due to the risk of “false positives,” an allegation that an IP address is registered to an individual is not sufficient in and of itself to support a claim that the individual is guilty of infringement.

Judge Moskowitz next finds and orders (emphasis supplied):

As mentioned above, Plaintiff alleges that Defendant, using IP address 68.8.137.53, participated in the swarm that downloaded and distributed the Video on May 7, 2012. Under Rule 11(b)(3), Plaintiff’s counsel certified that to the best of his knowledge, this factual contention has evidentiary support. However, due to the potential for abuse in these types of cases, the Court wants to make sure that Plaintiff’s contention is supported by evidence that goes beyond the identity of the subscriber to the IP address. Therefore, the Court orders Plaintiff to provide a more definite statement setting forth the factual basis for its allegation that Defendant used IP address 68.8.137.53 to infringe its copyright. [Footnote:] In its Opposition, Plaintiff states in a footnote that “Plaintiff’s allegations and identification of Defendant are based off of much more information than a lone IP address…” Plaintiff does not, however, specify what information it has.

The judge next summarily dismisses Prenda’s idiotic negligence claim as follows:

Plaintiff’s claim fails because there is no underlying duty. One who fails to act to protect another is generally not liable for breaching a duty unless there is a special relationship giving rise to a duty to act. […] There is no special relationship between Plaintiff and Defendant which gives rise to a duty on the part of Defendant to ensure, through heightened security measures and hawkish monitoring of internet usage, that nobody uses his internet connection to infringe Plaintiff’s copyright.

 

Returning to the claims of copyright infringement and contributory infringement, of course, Prenda had no further evidence as to the identity of the infringer other than the IP address, so on 2/6/2013 it dismissed the complaint without prejudice.

With the recent explosion of individual copyright infringement shakedown lawsuits, now clogging the dockets of federal courts across the country¹, it is expected that this Order will be cited often by defense attorneys and the courts to justify the dismissals of these predatory lawsuits. In fact, the mere mention of this powerful Order in another Prenda lawsuit (Lightspeed Media Corp. v. Shashek, ILSD 12-cv-00860), caused Prenda to dismiss that case the next day (2/14/2013).

 

Media coverage

 


¹ Indeed, besides suing the aged, impoverished and infirm, Prenda sues the dead.


Pornographer Paul Pilcher

Poor sleazeball Paul Pilcher! How many times the owner of an illegal¹ porn studio Hard Drive Productions cursed the day when he met a copyright troll John Steele (Prenda Law) and fell for his sweet promises? While this lopsided collaboration brought some dirty money to Pilcher’s coffers, this extortion campaign had a sizeable downside for the pornographer. Besides bad publicity and the fact that most of the loot ended up in Prenda’s pockets, this endeavor resulted in two countersuits from the victims: Liuxia Wong v. HDP (CAND 12-cv-00469) is now settled, and Seth Abrahams v. HDP (CAND 12-cv-01006) is dismissed by the judge but is currently on appeal.

Today a Minneapolis attorney Scott Flaherty filed yet another lawsuit (MND 13-cv-00380) on behalf of a Minnesota resident Nathan Abshire, who was initially a part of the infamous Hard Drive Productions v. Does 1-1,495 (DCD 11-cv-01741) lawsuit in the District of Columbia. After political games in this corrupt district resulted in unmasking all the Does in September 2012, Prenda started sending ransom letters, and its paralegal Mark Lutz (who sometimes lies identifying himself as “Jeff Schultz”) has been extensively harassing Nathan over the phone:

Hard Drive continued to propose various unacceptable settlement proposals, usually through its counsel Jeff Schultz. Hard Drive’s most recent proposal is a letter dated February 6, 2013. Attached as Exhibit 3 is a true and correct copy of the 2/6/13 Letter.

The complaint asks that the Court issue an order

  • …declaring that Plaintiff is not liable to Hard Drive for copyright infringement;
  • …declaring that Hard Drive’s purported copyright on its Work is unenforceable or invalid;
  • …awarding Plaintiff costs, disbursements, and expenses including reasonable attorney fees as authorized by law including 17 U.S.C. § 505, as appropriate together with interest; and that this Court issue such other and further relief as may be just and equitable.

Litigating with the scumbags is not a pleasurable occupation and the outcome is far from certain (in part because ineligibility of pornography for copyright protection is asserted: expect Marc Randazza on a white horse). Nonetheless, I am happy to see that a former troll victim did not succumb to shallow threats and did not pay up. Neither did he choose to enter an unethical and possibly criminal agreement to defraud the court, but instead he decided to fight back defending his dignity. I hope that he will prevail and will be compensated for his troubles at the end.

 

I had a dream that thousands of lawsuits are filed against those porn purveyors who have been assaulting the society with frivolous lawsuits, which would force them out of business. As for the worst troll lawyers (Steele/Hansmeier and their gang in particular), they went too far and do not deserve such an easy way out; they should be pursued criminally.

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Updates

 


¹Production and distribution of obscene material is illegal in the state of Arizona. Nonetheless, since, to the best of my knowledge, this law was never enforced, adult production is flourishing in the open (courts have yet to decide if pornography falls under the definition of “obscene”). Besides Hard Drive Productions, the best known pornographers are CP Productions and Lightspeed Media: all of them have been involved in copyright trolling, and because of the bad publicity and other troubles, I tend to believe that today their owners regret about their bad decision.

The Court hereby orders Brett L. Gibbs, attorney of record for AF Holdings LLC and Ingenuity 13 LLC, to appear on March 11, 2013, at 1:30 p.m., to justify his violations of Federal Rule of Civil Procedure 11 and Local Rule 83-3 discussed herein.


Federal Judge Otis D. Wright II

That’s how Judge Otis Wright starts his “Order to show cause re sanctions for rule 11 and local rule 83-3 violations.” Not that it was totally unexpected, but the language of this order is something that will definitely make Brett Gibbs (and other Prenda’s racketeers) take an urgent trip home to change their underwear.

Judge Wright starts his order with enumerating various Gibbs’s abuses, then proceeds with an angry tirade, condemning trolls’ “business model,” specifically the weakness of the “evidence” that is used to harass their victims with the purpose of extorting settlements from their targets (including many innocents):

To allege copyright infringement based on an IP snapshot is akin to alleging theft based on a single surveillance camera shot: a photo of a child reaching for candy from a display does not automatically mean he stole it. No Court would allow a lawsuit to be filed based on that amount of evidence.

What is more, downloading data via the Bittorrent protocol is not like stealing candy. Stealing a piece of a chocolate bar, however small, is still theft; but copying an encrypted, unusable piece of a video file via the Bittorrent protocol may not be copyright infringement. In the former case, some chocolate was taken; in the latter case, an encrypted, unusable chunk of zeroes and ones. And as part of its prima facie copyright claim, Plaintiff must show that Defendants copied the copyrighted work. Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991). If a download was not completed, Plaintiff’s lawsuit may be deemed frivolous.

[…]

The Court has previously expressed concern that in pornographic copyright infringement lawsuits like these, the economics of the situation makes it highly likely for the accused to immediately pay a settlement demand. Even for the innocent, a four-digit settlement makes economic sense over fighting the lawsuit in court—not to mention the benefits of preventing public disclosure (by being named in a lawsuit) of allegedly downloading pornographic videos.

The judge demands that Gibbs addresses two allegations during the appearance on March 11:

  • Failure to comply with the Court’s discovery order.
  • Fraud on the Court.

 

The latter allegation is related to the Alan Cooper saga that we have been diligently covering over the last 3 months. Definitely, Judge Wright has no slightest intention to let this issue go away, no matter how hard Gibbs tried him by multiple temper tantrums, attempts to remove the judge, and childish urge to simply run away from the tough questions:

If Mr. Gibbs or Mr. Pietz so desire, they each may file by February 19, 2013, a brief discussing this matter. The Court will also welcome the appearance of Alan Cooper—to either confirm or refute the fraud allegations.

Moreover, the decision not to sanction “plaintiffs” suggests that Wright believes that the alleged identity theft is not a mere conspiracy theory; he is seemingly convinced that Prenda made up AF Holdings and Ingenuity 13, and therefore Gibbs and his bosses have actual financial interest in the numerous lawsuits. Failure to disclose such interest is a fraud by itself:

The Court declines to sanction Plaintiffs AF Holdings LLC and Ingenuity 13 LLC at this time for two reasons: (1) Mr. Gibbs appears to be closely related to or have a fiduciary interest in Plaintiffs; and; (2) it is likely Plaintiffs are devoid of assets.

But the most damning language that I mentioned above is in the last paragraph: when a judge says “imprisonment” and “bench warrant for contempt” in an order to show cause, it is hard to underestimate the seriousness of the situation Gibbs dug himself in (emphasis is mine):

Based on the evidence presented at the March 11, 2013 hearing, the Court will consider whether sanctions are appropriate, and if so, determine the proper punishment. This may include a monetary fine, incarceration, or other sanctions sufficient to deter future misconduct. Failure by Mr. Gibbs to appear will result in the automatic imposition of sanctions along with the immediate issuance of a bench warrant for contempt.

 

Wow. Like the previous powerful ruling by the same judge, this order will definitely send tsunami waves across the US federal districts.

Related
Followups
Media coverage

While I was concentrating on John Steele’s outfit, I’m afraid other trolls have been feeling neglected, especially a mega villain Keith Lipscomb. To rehabilitate myself, I looked into my backlog and found this gem.

Back in November, in a slow-moving class action lawsuit (Jennifer Barker and Sabree Hutchinson v. Copyright Trolls, KYWD 12-cv-00372), plaintiffs’ attorney Kenneth Henry used a pretty mild description of what Keith Lipscomb and his gang have been doing for about two years:

To bastardize the litigation process and abuse the court system as the Defendants have done, and now to object to the taking of early discovery vis-à-vis their claim that this Court lacks personal jurisdiction over them is yet another display of the Defendants’ total disregard for the courts and the rights of those with whom they deal.

In my (and not only my) opinion, Mr. Lipscomb’s “business” is better described as an extortion racket rather than a mere “bastardization of the litigation process.” Yet Lipscomb took an offense and demanded to strike that reasonable assessment from Henry’s motion:

Plaintiffs repeated accusations that Defendants are “bastardiz[ing] the litigation process” and have purposefully abused the court system in order to harass innocent individuals nationwide are baseless and unwarranted.

[…]

Accordingly, the language “bastardization of the litigation process” should be struck.

And this is not ironic enough: this man shakes down many thousands (a significant part of whom are innocent) over obscene material; his evidence is flimsy at best; and his fee-splitting agreements with porn purveyors and unlicensed foreign IP address harvesters are undeniably unethical. This man, in addition to having become furious over a dictionary word, was also offended when Henry called him “obviously not a Biblical scholar”:

[…] the first page of Plaintiffs’ reply exclaims, “[o]bviously, counsel for the Defendants are not Biblical scholars.” This is deeply offensive. Undersigned was raised a Christian, was active in Campus Life and Campus Crusade (now known as “Cru”) in high school and college respectively, and used undersigned’s only preemptory waiver to ensure enrollment in an always oversubscribed biblical law class while attending The Cornell Law School. Undersigned is currently a member in good standing of the First Presbyterian Church in Fort Lauderdale, Florida and is a regular attendee at services.

 

Here we are: an indefinitely greedy person who indiscriminately assaulted many elderly, poor and sick, a person who lies each time he opens his mouth, a coward who loves to spill his saliva threatening fellow attorneys, demonstrates that he has a thin skin in unexpected places.

It evades me how this man can reconcile his purported Christianity with the fact that the public in general reasonably thinks that copyright trolling is a labor of Satan. Maybe people of faith chime in and explain. Until then I cannot get rid of the vision of Lipscomb’s famous relative turning in his grave.

Question for the community

Given the passionate and articulate pleading embedded above, it seems that M. Keith Lipscomb manages to conflate two incompatible things: a Christian worldview and “theft via extortion” (a.k.a. porn copyright trolling). I meditated on this paradox and cannot think about but two explanations, unless I am totally wrong. What do you think?

Sounds familiar? Yes! Nick Ranallo in California successfully tried this strategy. Well, one may challenge my definition of “success”: at the end of the day, while the judge granted Nick’s motion, no bond was posted, and I doubt it will ever be. Nonetheless, the persistence of Prenda and its Californian shakedown ambassador counsel Brett Gibbs, with which they have been trying to weasel out, indicates a success on its own, as it clearly shows that the king is naked, and the clowns cannot even put the money where their proverbial mouth is. Much less are they capable of inflicting any real harm (beyond harassment and unsubstantiated threats) to anyone who cares to lift his or her finger in opposition.

So, the Eastern Front has been opened by Booth Sweet LLP (AF Holdings, LLC v. ChowdhuryMAD 12-cv-12105):

Nobody has forced AFH to file this suit when it did, based on the objectively weak evidence that it has chosen to proceed with. There is no reason to allow AFH to escape all responsibility for its actions and decisions in this case. As such, Chowdhury respectfully requests the court to order Plaintiff, AF Holdings, to post an undertaking in the amount of $60,000.

I hope that the motion will be granted. Regardless, as usually, a memo accompanying this motion is an excellent, refined iteration of a guide to Prenda’s shameful history of deception and abuse.

Taken together: (i) the facts averred by Mr. Cooper; (ii) Prenda’s attempts to stonewall on the question of whether there was another Alan Cooper who was the true principal of AF Holdings and Ingenuity 13, or answer any other questions on these matters; (iii) allegations of a previous straw plaintiff in the MCGIP cases and the affidavit of Mr. Merkel; and (v) the facts revealed in the Florida hearing transcript in Prenda’s Sunlust case wherein Prenda attempted to pass off its paralegal as the corporate representative of the plaintiff, suggest a pattern of deception with respect to who is really behind these lawsuits. To paraphrase a popular meme: “Plaintiff Prenda Law retained Prenda Law as its counsel, who in turn retained Prenda Law to use Prenda Law’s forensic software to identify infringers.”

 

The collection of exhibits is good and ready to use in any pleading that involves frivolous lawsuits filed by Prenda’s scam artists:

 

Interestingly, yet another troll’s lie has been called out (footnote 17):

On Prenda’s website and in correspondence to subscribers and counsel, Paul Duffy holds himself out being licensed to practice in Massachusetts. A call to the BBO confirmed that Atty. Duffy, as he already knows, has not been licensed in the Commonwealth since 1995.

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