Archive for the ‘Community contributions’ Category

March 11 hearing: another story by a witness

Posted: March 12, 2013 by SJD in Community contributions, Coopergate, Prenda
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Yesterday I wrote that I would not be coming up with a story about yesterday’s eventful day. I provided a couple of links to eloquent, well thought pieces, especially by Megan Geuss (ArsTechnica) and Ken “Popehat” White. Yet this morning an anonymous commenter, who attended the hearings, shared his own story, which belongs to a post, not a comment. Even though we will eventually obtain and publish the transcript, personal perspectives of attendees are invaluable: only facts can be redundant, not impressions.

By Anonymous

No.

Gibbs did not have Wright wrapped around his finger. Believe me nobody who’s touched Prenda or their shells (that are “not even shells” in Wright’s words) should feel safe.

The tone of the hearing was set when Wright opened by calling out Prenda’s attorney:

    “ARE THEY HERE!?”

    “No.”

    “HAVE A SEAT!”


Federal Judge Otis D. Wright

That was basically all he wanted to hear, although there was a brief exchange that established they were supposedly available by phone (whether that would be a domestic or international call was not established). She took a dressing down for the last minute filing tricks, but the bottom line is Wright did not dignify their gamesmanship by letting their attorney make excuses, he did not waste time grinding through their objections, he said they had been given an opportunity to explain themselves, and since they chose not take that opportunity, he moved on. I can only imagine what she is thinking after sitting through that hearing, because I’m sure they didn’t fill her in on the backstory.

The next order of business was calling out Hansmeier’s deposition. The judge dismissively tossed a copy on the desk in front of him (seriously) and said he spent the weekend reading it and it was the most revealing document thus far. Wright was extremely upset with that deposition. Extremely.

“Someone has an awful lot to hide.”

Hansmeier is probably in trouble.

The rest is incomplete and not very chronological, just salient points:

Wright used the phrase “the lawyers have a pecuniary interest.”

He noted that none of these companies file tax returns.

The fact that LiveWire has no office, just a P.O. box in DC, came up. Gibbs’ lawyer started to make an attempt to make this sound legit, but then he said something about it being a “cloud office,” there were derisive snorts, and he just kind of gave up.

Wright took several specific shots at Prenda’s credibility. The word “lie” was used. And “fraud.” A few times when Gibbs was trying to pass blame to avoid giving a straight answer, Wright admonished him for doing “all the stuff that you do” to redirect responsibility. Expect a defamation suit against Judge Wright to be forthcoming…

Alan Cooper of Minnesota was there. He confirmed the bits we’ve heard, that Steele bragged about his copyright litigation plans, Steele’s goal was $10,000/day for sending letters, told Cooper not to answer any calls related to Steele’s companies. Denied knowledge of all of Steele’s uses of the name “Alan Cooper.” Basically, it confirmed what we had already heard and read in his letter, but no doubt putting this on the record, under oath, in front of this judge was very damaging to Prenda. Gibbs’s attorneys appeared to begin to counter Cooper’s testimony by asking Cooper if he had called Steele and left a voicemail asking “how are my porn companies doing?” Cooper simply said “no” and they gave up. This must have been a reference to the “iPhone record function” Steele was blabbering about on Twitter, but if there is anything there, Gibbs’s attorneys did not think it was worth pursuing. By that point Steele’s credibility had been shredded, and Pietz had played several voicemails of Steele threatening Cooper with more litigation, so I assume that if a recording (of someone) exists Gibbs’s attorneys do not have a copy and decided not to gamble on Steele’s word.

During the break Mitch Stoltz told us EFF took care of Cooper’s travel arrangements, so those guys deserve all our thanks and if you wanted to find a way to help with Cooper’s travel arrangements, make a donation to the EFF.

A new revelation that came out while Gibbs was under oath is that he was briefly a W2 employee of one or more of the shells, I think it was LiveWire and/or AF Holdings, but it’s so convoluted with the “mergers” and everyone owning everyone that it was hard to keep straight. That contradicted his prior statements that he had only ever been a 1099 employee. Of course he was never paid while he was on the payroll, and it was strange, he sounded like he was bewildered by the fact he had been an employee, like maybe they did that without telling him first too? Since he was under oath at the time he was perhaps less likely to be BS’ing at that point, but that was the story regarding his surprise “in-house counsel” job.

Wright dug into Gibbs quite a bit for pathologically failing to file notices of related cases, and Gibbs’ persistent confusion of “joinder” vs. “related” for filing purposes. He did a bit of digging into Gibbs weak and apparently inaccurate justification of his “investigation” of the properties. Wright said he had used Google Earth himself to take a look, so Gibbs ended up claiming that when he looked at maps of those addresses, the maps he saw had a different angle that totally gave the impression the house was surrounded by emptiness. It was not convincing.

For the juicier issues of Prenda’s decision-making process, Gibbs pretty much just passed the blame on to “senior members” with lots of “decisions were made” type responses. After all our speculation that Duffy is a nominal figurehead, it was very interesting to hear Gibbs talk about who gave his marching orders. It sounded like he basically never talked to Duffy, maybe once or twice was the impression I got. Even after the firm supposedly changed ownership and Duffy took over, whenever Wright asked who was giving instructions and making decisions, it was always Steele and Hansmeier. No matter where we were in the timeline or who was supposed to be the owner of what, whenever Gibbs was asked who gave him orders it was “Paul and John,” and according to my notes the order Gibbs spoke was “Paul and John,” which may be revealing: certainly Hansmeier has more direct involvement than I had believed to be the case. As they got to the newer entities, Lutz’s name was sprinkled in here and there, almost as if they were still in the process of reconstructing the story to shift more responsibility (read: blame) to Lutz. In any case, it was enough to make me wonder if Duffy is even a real person, or if he has had his identity misused too or what, because he doesn’t seem to do anything, so it doesn’t make sense that he would put his name on this powder keg of risk (unless of course he is getting fat checks, which may well be).

I will grant that Gibbs did a somewhat successful job of looking duped and misled. He was even asked directly if he felt duped by Wright, and after a surprisingly long pause said “in a way.” Not that I believe this could be true after two years of working with Paul and John, but I think he pulled it off. There were one or two points that even made me feel a bit of sympathy for him. For example, according to Gibbs’s testimony, many of the recent dunning letters bearing his signature that have been sent out for cases in other states used a stamp of his signature without his permission. He claims this began after he had decided to get out and sever ties with the firm, and that he told Lutz and Steele to stop (of course he didn’t notify any courts or authorities…). It sounded like a possible carefully constructed CYA, but given Steele’s vindictiveness it may well be that Gibbs is a “victim” in the sense that Steele has been attempting to set Gibbs up for even more trouble. Gibbs deserves every bit of trouble he may get, but I don’t want Steele to be allowed to weasel out of his own share of responsibility by using Gibbs’s name instead of his own. I can also believe that Gibbs did not know about the Alan Cooper and other possible forgery issues.

For the most part, the specific issues for which Gibbs was present became a sideshow. His attorneys kept returning to them, because that appeared to be all they were prepared for. My guess is they have absolutely no idea how deep the rabbit hole goes, but if they do know they have not had time to prepare excuses for the past two years of shenanigans, and they were overwhelmed. They had canned responses to the points on the OSC, but Wright was far more interested in digging into Prenda’s overall pattern of behavior and business model. Gibbs’s attorneys were unprepared to field those questions, and they occasionally offered up some objection that Wright’s line of inquiry wasn’t relevant to the OSC, but Wright rebuffed them by stating his concern was now patterns of practice and fraud upon the court. The last words from Gibbs’ counsel were an obviously prepared statement that seemed awkwardly out of place given the turn the hearing had taken; I believe they expected to show up, run through a prepared script, and call it a day. They are probably wondering what the hell happened.

What struck me as ominous for Gibbs and especially the rest of Prenda is that Morgan Pietz and Nicholas Ranallo appeared well prepared to go into greater depth to establish that Gibbs was working in more than an “of counsel” role, to argue the jurisdictional issues of the other Prenda guys, etc. But Wright really wasn’t interested in hearing more. But I don’t mean he didn’t find it relevant or convincing, more like he had made up his mind that this circus has gone on long enough. I would sum up his attitude at this point as “Why bother? I don’t need to hear this.” It was as if Wright was satisfied that he had more than enough for… Whatever comes next… And when he got to that point he was just done.

To me, the absolute standout moment of the day was when Gibbs stepped down from the witness box and Wright said “Good luck to you.” You had to be there to appreciate the menace in his voice.
For now, we can only guess what Gibbs might need that luck for.

Personally, I think Lady Justice is practicing her dropkicks.

Update

Here are another hearing attendee’s observations:

By jw

Since you ask for more impressions/observations, here are some from my own non-legal-expert perspective:

  • Many have noted the judge did not seem amused. While that is generally accurate with respect to Prenda’s (allegedly) fraudulent, deceptive, evasive practices, there were times at which the judge stifled laughter in apparent amusement. In particular: when he had to correct Waxler for saying the client “retains” attorneys; when Pietz corrected his use of the word “porno” with “adult entertainment.”
  • There was a nice moment in which, just before breaking for a 10-minute recess, the judge almost tenderly said “I hate to stop you [to Pietz]. But, since I care more about her [referring to the court reporter] than this case, and she has been going non stop since this started, we are going to break for 10 minutes.”
  • At one point, the judge asked Gibbs, under oath, if he understood his question, and then added, “Because I can hear you now… ’compound!’…”, making a joke about Gibbs’ extensive objections in the ~300 page deposition of Feb 19.
  • I was careful to observe Heather Rosing (attorney for Steele, Hansmeier, van den Hemel, and Duffy) throughout the hearing, since she got shot down so harshly by Wright at its opening. She was quite active throughout, talking animatedly to two other gentlemen who accompanied her there, and taking copious notes. She also at some point, spoke with Gibbs’s attorneys in an effort to apparently join forces to get them to contact her clients by phone. Though a phone appearance never happened, it seemed for a bit like they were trying to make it a real possibility. For what it’s worth, and this is only my impression, Rosing seemed a bit stunned by the revelations offered at the hearing, as if she hadn’t had the full story when she filed that ex parte motion… I wouldn’t be terribly surprised if she withdrew after yesterday’s revelations.
  • All the talk about popcorn, one might think there would have been a carnival atmosphere to the hearing. But it was really intense, people were quite glued to the proceedings, and very quiet. And, based on Wright’s demeanor and his strict no-food policy, it would have been terrifying to try to eat popcorn in there! I was even a bit scared to take a sip of my water in the room.
  • I have never been to a hearing before, so maybe court clerks are always awesome. But I have to say, I was really impressed by the court clerk running the show. She was a well-dressed, petite woman who was extremely attentive and obviously very on top of things in the room — keeping track of all the exhibits, etc. Wright’s two clerks (sitting behind the defense’s table… I think that’s who they were), were also interesting to watch. At one point, one of them, dressed very nicely in a purple tie and grey suit, handed Pietz his own flow chart Prenda diagram to use on the overhead “document reader” thingie when Pietz was having difficulty with the display from his iPad.
  • There were a bunch of reporters in the room. I noticed one young woman from the LA Times, who said at the very end of the hearing “I have a lot of reading to do.”
  • Wright clearly likes and respects all of the people that work for him, and vice versa.
  • Gibbs’s attorneys were making fun of Morgan (to themselves — I was just sitting behind them, watching closely) as he brought forward more and more evidence showing that Wright probably has jurisdiction over Steele and Hansmeier. It seemed like they were just saying it was overkill. The judge, however, seemed to appreciate Pietz’s efforts. At the end of the jurisdictional stuff, the judge said it was time for Plaintiff to go, and noted that they obviously would have no objection to the evidence Pietz brought forward to support Wright’s jurisdiction over Steele and Hansmeier, “Otherwise, he’s in [looking directly at Gibbs].”
  • I thought it was noteworthy that during Pietz’s questioning of Gibbs, Gibbs admitted that Steele and probably Hansmeier have his email passwords, and also his ECF password, allowing them to send emails as Gibbs, read all emails Gibbs receives (attorney-client privilege??) and submit things to the court as Gibbs. Apparently Gibbs also received emails to other attorneys (I can’t remember their names, one in Nevada…) and then was supposed to forward them on to the actual attorneys. When all this was being revealed, Judge Wright sat back in his chair and frowned.
Update 2

3/13/2013

Transcripts of the voicemails John Steele left on the Alan Cooper’s phone are available. As Dark Moe tweeted after the hearing,

…and another thing: The voicemail messages from Steele bothered me. Cooper did nothing to deserve being threatened with a lawsuit.

It’s sickening. Wish you could have heard the messages. My lawyer was moved over it. Couldn’t believe what he was hearing.

Before reading the following, make sure you allocated enough time to have a shower afterwards.

“I’ve seen John Steele preaching”: an insightful comment from a slashdot.org discussion

Posted: January 2, 2013 by SJD in Community contributions, Prenda
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By a slashdot.org regular SmallFurryCreature

Foreword by SJD:

My Friday’s post, as well as Copyright Clerk’s article on the same topic (Judge Write granting Morgan Pietz’s motion to interrogate Prenda regarding its allegedly fake clients) were featured on the main page of slashdot.org and generated a significant amount of comments. I can’t resist copying one particular comment here. Although most of the thoughts and conclusions expressed in this piece can be found throughout our site, it is nice to hear a story from a “semi-insider,” a story that expresses views similar to ours, a story that confirms that those adult producers who succumb to trolls’ preaching shoot themselves in the foot and risk losing much more than gaining from cooperation with troll lawyers. Interestingly, a very bold confirmation of this thesis is taking place as we speak: Prenda has hastily dismissed all the lawsuits filed “on behalf” of Sunlust Pictures, whose principles Daniel Weber and Sunny Leone are apparently in the process of cutting all the ties with Prenda after all the embarrassment, unwanted publicity, and potential perjury charges.

I replied to this comment on Slashdot, articulating my interest in reposting it, but the author did not react. I assume that he does not mind, but if he does, or, alternatively, wants to amend the text, I will respect his wishes.

 

I have worked for the porn industry and seen this guy preaching at industry conventions, once supposedly on a forum that was to discuss how to approach copyright infringement as a porn company/copyright holder. (There are other approaches: the best working is focusing on having your customers become loyal fans of your brand, so they want to pay, beg you to pay.)

It wasn’t a discussion really, as I sat by as a 3rd party (I do servers for whatever reason you might have and I make the same amount whether those servers are paid for by copyright owners, commercial pirates, amateurs or cat pictures) and was amazed to see him preach to the converted… well… up until the point you start asking for numbers. There are a lot of porn producers, a shit load more content and a near infinite amount of downloaders. The internet may consist of cat pictures but torrents are for porn. Yet he has done at the time only a few thousand cases. That is nothing! It ain’t even a drop in the bucket. The RIAA was doing vastly more cases.

While the audience was agreeing with him, you could see most didn’t have a clue as to the real issues and the developments with regards to copyrights and enforcing them. The porn industry likes to pride itself on being cutting edge, VHS, online payments but really that is just a tiny segment, the rest are slobs who figured out: sex sells. The moment the forum was over, I talked to some porn producers and asked what they though considering judgment like the then current claim of movie copyright infringement costing several times more than the entire world economy.

Or the cases of suing children, veterans and other people who might get the sympathy of the public. If the public chooses the side of dirty pirates against wholesome music executives… what chance does a porn peddler stand? Most porn producers are well aware that they are skirting the edge of public acceptance, they know they can only accept credit cards if they meet the decency requirements of the processing company, can only host with parties that accept adult content. They didn’t like it one bit when I linked them on my tablet to some John Steele publicity stunts, no porn company wants attention from Fox News about harassing some grandma who left her WiFi open as it was installed by her grandson who died in Afghanistan. No thank you sirree, that is not worth gathering a few bucks, especially when all the lawyer fees have been paid you end up owing the lawyer for bad publicity.

That I wasn’t the only doom spreader for dealing with John Steele is proven by the fact only a handful of companies deal with him. When you talk to him, he does his name justice Google his picture, say his name and what you think he will be like is how he is. A boisterous overconfident man who speaks so loud that he doesn’t hear anyone asking him to explain some details about cases thrown out of court and how does not quite work on a contingency basis (he gets more if he wins but he always get paid), how a settlement doesn’t include paying lawyer fees. If you lose in court and are ordered to pay $5,000 in damages, you often also have to pay lawyer fees. If you settle for $1,000, that is it, the lawyer still wants paying. John Steele certainly does.

It is no secret that copyright infringement happens, on a massive scale. And porn has an issue the mainstream media does not have. I once came up with a nice way to put but we are all males here so here it is: “You can cum on a trailer”.

Some Hollywood movies have trailers that tell you the entire movie and a few where the trailer is better than the movie but on the whole, the trailer makes you hungry for more.

In porn, the trailer is enough for most and just makes you sleepy. Watching a full movie on YouTube is a hassle (well it was until they removed the ten minute limit) but for porn tubes… how many minutes do you need? Oh wait, I forgot my audience. Seconds?

Sharing the entire movie on a torrent is far less of an issue to the industry then all those porn tube sites that contain more than enough to satisfy the audience. A teaser site can be enough.

But despite all this and free amateur (real, not paid for) content, the industry is doing just fine. John Steele isn’t needed. He tries to sell himself strongly to the industry but once the producers have left the hall and are outside the reach of his preaching, common sense sets in. And John is angry about that, he is trying to save the industry, all this money out there you can get from people downloading your movie.

He ain’t a happy bunny at all. A Forbes’ article is hardly the first look at his practices. When you talk to him directly or hear him speak (and he talks so fast and loud he can drown out anyone else) he is recovering fortunes for poor abused porn producers. In reality, it is a few bucks most of which go to him, and most of the industry refuses to deal with him. They might agree with him, but even the most rabid “oh my god they are stealing” producer I talked to, much preferred not to be in the spotlight like this and the bigger producers preferred simpler approaches to fight copying by focusing on engaging users with fresh content and see their back catalog as advertising.

To most porn producers, the guy who only needs a few seconds of porn is not their customer, they want the fan, the enthusiast, the one who refreshes his browser every 2 seconds when new content has been announced and writes reviews of the performers on the forum. These fans have no issue paying each month; it is their offering to their church. It was fun to see this lawyer and others like him try to sell copyright protection when all the business cases showed that the porn companies that do best are those who focus on their paying customers and ignore how much of their content is available on torrents. As long as the torrents are a week or more behind, they know their paying customers will keep paying.

John Steele is pursuing a business model that the industry does not support, and it doesn’t want the attention it is generating. I happen to have talked to some of the guys behind the content he is actually suing over and these are the most right wing nutcases you could ever hope to avoid. The majority of porn producers stay well clear. They listened to their geeks and saw how what was not working for mainstream content also would not work for them.

Copyright troll M. Keith Lipscomb loses on home turf, traditionally troll-friendly Tampa court

Posted: December 7, 2012 by Raul in Community contributions, Lipscomb
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By Raul

Attorney M. Keith Lipscomb operates a nationwide copyright infringement lawsuit machine out of the offices of Lipscomb, Eisenberg & Baker, PL in Miami, Florida. It is widely assumed that he directs and oversees the operations of a small army of copyright troll attorneys who range from California to New York and terrorize United States citizens with their porn copyright infringement lawsuits which have been judicially declared “essentially an extortion scheme.” Indeed these copyright troll attorneys have been judicially compared to predatory locusts.

For Lipscomb the most fruitful judicial district to ply his predatory extortion racket has been the Federal District Court for the Middle District of Florida (FLMD). Since March of 2011 his law firm has filed countless porn copyright infringement lawsuits against countless “John Does” and has extracted millions of dollars in settlement monies (an educated guess, admittedly).

The reason for this is clear: the FLMD welcomes copyright troll lawsuits. Judges from this district have never refused Lipscomb’s motions to expedite discovery to ascertain the personal info of the “John Does” so they can be harassed into settlements. Likewise no judge from this district has granted a “John Doe” motion to sever the numerous “John Does” from the main lawsuit as is frequently granted in other judicial districts for a variety of reasons but which has the effect of dampening the explosion of these types of lawsuits. Accordingly as of today the FLMD hosts “83 copyright cases against 11,597 John Does”. So, you could say, things were going great for Lipscomb with the lawsuits going out one door and the settlements coming in another — until today.

James David Whittemore
U.S. District Judge
James David Whittemore

Thanks in no small part to the efforts of Cynthia Conlin, Esq., the Hon. James D. Whittmore granted her motion to sever in the lawsuit entitled Malibu Media v. John does 1-28 (12-cv-01667). Judge Whittmore’s Order read a lot like that of Judge Young of the District Court of Massachusetts in Third Degree Films v. Does 1-47 (MAD 12-cv-10761). In fact Conlin cited the MAD case as Supplemental Authority and Judge Whittemore cited it approvingly in his Order.

The Order itself approves of the copyright troll theory of “swarm joinder” which the judge notes has been disapproved of by many other federal justices. Nonetheless he moves on to grant severance on the ground that joinder of so many “John Does” violates Federal Rules of Civil Procedure 21 for essentially two reasons.

Reason One:

The likelihood of multiple unrelated motions and defenses leads to a conclusion that there are few, if any, litigation or judicial economies to be gained by joining these claims, notwithstanding the allegations that the Doe Defendants participated in the same swarm.

Reason Two:

By filing a single lawsuit against twenty-eight defendants, Malibu has paid only $350 in filing fees, rather than the $9,800 it would have paid if the lawsuits had been brought separately.

The judge notes that filing fees provide a “threshold barrier” against the filing of meritless or frivolous lawsuits which he finds is an appropriate reason for Malibu Media to start filing separate lawsuits. Additionally the judge observes that:

By filing multi-defendant complaints, Malibu’s lawsuits have deprived the court of hundreds of thousands of dollars in much needed revenue, while burdening the docket with cases that are difficult to manage, in the traditional sense, without extraordinary judicial time and labor. Severance will enable efficient management of each case, preserve the purpose of filing fees and protect the docket against problematic filing practices.

In conclusion the judge holds that:

Although joinder is permissive under Rule 20(a)(2), concerns of fairness, prejudice, expedience, cost, practicality, and case management warrant severance of the individual claims.

We can only hope that other justices of the FLMD will see the wisdom of this approach and follow suit.

12/07 Cynthia Conlin comments:

Raul, this is an awesome post! Thank you for the credit but I need to make a correction. Although I did file a motion in the case for one of the Does (my Doe is #7 in this case), the first motion filed, and the one that was granted, in this case was by Attorney Michael Savage, who practices out of Punta Gorda, Florida. He filed the motion on behalf of Doe No. 2. Also, I think that Whittemore considered not only the motions in this case, however, but also motions filed in other Middle District cases from William Wohlsifer (Tallahassee), Daniel Simon (Miami), Daniel Tamaroff (Miami), Graham W. Syfert (Jacksonville), as well as myself — we’ve all been filing a TON of motions in the Middle District of Florida, and Whittemore has been seeing these cases for many months now. This order was a long time coming, and I can tell he and his law clerks put lot of thought was put into it.

 

Happy Holiday Season to All!

 

     Substitute Lipscomb for Old Grinch:

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.

Joinder or no joinder? Can’t have both

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

Six strikes: copyright trolling without courts

Posted: October 22, 2012 by SJD in Community contributions, Digital freedom
Tags: , , , , , , , , , , ,
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By TAC

The Center for Copyright Information. Sounds good doesn’t it? A place where you can get information about Copyright. But it isn’t. This unholy alliance between the copyright cartels and ISPs, is trying to create laws they control.

The plan

A third party company is going to monitor torrents of popular files, record IP addresses, and submit those matching member ISPs to the ISP. The ISP then sends a Copyright Alert System notice to the person who pays the bill. They want you to think of them as helpful notices, like when the bank alerts you to possible fraud on your account. When you get your 4th, 5th or 6th notice… things change. The ISPs each get to pick their own methods of “Mitigation Methods”, while there is no common system of these in place, they can include:

  • throttling down your speed;
  • sending you a scary message that the cartels can sue you and they will gleefully hand over your details if a court orders it;
  • blocking popular websites until you complete an educational program about copyright.

They claim disconnection is not a possible option.

Now if you think you got one of these notices in error, you can challenge the notice. You have to pay $35 to them, and pick one of a few limited responses they allowed you. This is then reviewed by an Arbitrator, who decided if the notice is legit or not.

Lets go over some of the problems here

The company gathering the information is MarkMonitor who acquired DtecNet. Lets then look at their amazing history:

If this is such a wonderful system, why all the secrecy? Given the RIAA’s wonderful history with this sort of tech… One would think they would be much more open about it to remove any doubts as to how the system works and how accurate it is. But instead we have a secret system, pushing different punishments on consumers on mere allegations, and it costs you money to challenge their findings with an arbitrator who I have severe reservations about being able to crawl through code to verify the veracity of statements being made.

But then these are the same people who wanted to break the Internet to protect an outdated business model, have ICE running raids of websites, went after a $10 Million government handout to make sure they could get ICE to do more, wanted police to have the right to search mp3 players and make sure all of the music was licensed, and a bunch of other really stupid stuff.

Here is the really sick thing…

The IP gathering here is the same as what the trolls are doing now. Except the cartels don’t have to pay $350 to file a case.
They don’t have to even prove any uploading or downloading happened. (Not that they could as IP spoofings been around since the first time the RIAA sued everyone on the Internet.)

They don’t have to send out a DMCA notice affirming the facts.
They just have to say your subscriber did it… and you get a black mark against your name.
Doesn’t matter if your Wi-Fi was open or hacked, you are at fault.
Doesn’t matter if it was the neighbors’ kid visiting, you are at fault.
Doesn’t matter… you are always at fault because the ISP’s Terms of Service and Acceptable Use Policies are the “law.”
This also allows them to avoid having to prove who did it, and get bogged down in justice and fairness.

But wait, TAC, where is the Government stopping this obvious antitrust case?

“The joining of Internet service providers and entertainment companies in a cooperative effort to combat online infringement can further this goal and we commend them for reaching this agreement. We believe it will have a significant impact on reducing online piracy,” said U.S. Intellectual Property Enforcement Coordinator Victoria Espinel.

They picked a “board” to help them deal with privacy issues and such, and they are very clear that the cartels never know the names… except they are ignoring some of what the board is saying and the board is rubber stamping this monstrosity.

But wait, TAC, they had experts look over their system and prove it was accurate!

Yeah.. about that “expert”… Ernesto at TorrentFreak.com followed a tip I submitted about them formerly being lobbyists for the RIAA. And he uncovered something I had missed…

Stroz Friedberg is indeed a technology expert, but the group was also the RIAA’s lobbying firm for half a decade.

Between 2004 and 2009 Stroz Friedberg lobbied extensively in Washington on behalf of the RIAA. This consulting job earned the company more than half a million dollars ($637,000).

One of the leading lobbyists on record was Executive Managing Director Beryl Howell, who lobbied U.S. Congress and Senate for copyright laws regarding digital music.

Now if you follow copyright trolls you know the name Beryl Howell and curse it like the rest of us do. She believes that an IP address is a proof of infringement, that ISPs aren’t doing enough to stop “piracy,” and that people don’t have the right to fight against copyright trolls getting their names to try and extort money.

So the promised review of the tech… done by a company who the RIAA pays well… Not the guys who tore apart IP monitoring at the University, but people who stand to lose a client.

Yep… seems legit to me.

What can we do?

So it might be time to reach out to those morons you voted for, and ask them why corporations get to make their own laws now.
Copyright law and the overreach with it has gotten stupid… but this one this takes the cake.
Why are we letting them slip SOPA into being the law of the internet?
Why are we allowing accusations to be taken as fact?
Why are we paying billions to fund companies who are supposed to be supplying the digital super highway, who instead are going to become the private enforcer of the copyright cartels?

They call the program “6 strikes,” because Americans would riot if they tried 3 strikes here. They quickly claimed disconnection was off the table, yet the words still exist in the memorandum of understanding they signed to form this.

Take a look at 3 strikes around the globe, and see the abject failure it has become.

  • The French are going to abandon their vaunted program after taking one customer to court… who had to pay for his wife downloading music… because it was his connection. He didn’t know, wasn’t involved, but he was punished as if he had done it.
  • In New Zealand they just dropped their first case after turning it into a giant clusterfuck. The young lady who’s name is on the bill and claims innocence is left hanging after wasting time, effort and money to defend her good name against a claim that suddenly wasn’t 100% perfect. But they did manage to compute damages she should pay… except those were nowhere in the law allowing their 3 strikes program and it was an arbitrary inflated number… sort of like a copyright trolls “win” where they talk about the huge amount they won on paper to scare other people into settling the case for less.

A copyright troll can capture an IP address, but then they have to go to court, file a lawsuit and have the case tried on the merits. (Well, in a perfect world.)

Why are we allowing the cartels to make allegations, based on secret methods, and get the ISPs to do anything all? Corporations do not get to make laws and force them on people, they have to do it the old fashioned way… they have to bribe the Congress. Remind your congresscritter today that the elections are coming and if they don’t act to stop this… maybe their replacement will.

I’m TAC… I think this is fucking horrible, and if you agree you will tell friends, family, and your congresscritter this is wrong and needs to be stopped. Some of these ISPs are the only game in town in many areas, so we can’t vote with our wallets.

End the cartels reign of terror, or learn to accept only what the cartels decide your allowed to access on the net.


 

Raul on “Stupid America” radio show

Posted: September 4, 2012 by SJD in Community contributions, Press
Tags: , , , , , ,
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On August 7, 2012 our very own Raul made a live guest appearance on the Stupid America Internet radio show created and hosted by Jeremy Stillwagner. Raul was talking about… well, you know what he was talking about: copyright trolls, our sites (fightcopyrighttrolls.com and dietrolldie.com), why and how we help to destroy this mob-like “business.”

Regular readers of this site probably won’t hear anything new, but because the target audience of this show most likely never heard about the issue, and due to the host’s and Raul’s efforts, the program turned out to be very informative and easy to follow — “copyright trolling for dummies” I would say.

I recommend downloading the mp3 of this show and listening while driving, strolling or just sitting and staring at the wall. Send the link to your friends — so they would learn about the ongoing unprecedented abuse of the court system; spread the word.

Download this show.

Copyright troll Christopher Fiore files an opposition… to his own pleading, per judge’s order

Posted: August 31, 2012 by SJD in Community contributions, Lipscomb
Tags: , , , , , , , , , , ,
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by AC

I thought that one of today’s comments deserved a separate post: it is well-written and the discussed document is indeed interesting.

Here’s an interesting case I’ve been following in Pennsylvania: Malibu Media, LLC v.John Does 1-22 (5:12-cv-03139).


Copyright troll Christopher Fiore

The Judge’s order was posted the other day, which severed all Does except one from the case, ordering Fiore to refile separately. That’s great news, but what was even more interesting about this case was how that came about. I haven’t seen it talked about much yet so here’s the overview:

Troll Fiore submitted an opposition on 7/20/2012, which triggered Judge Timothy J. Savage to issue the following order on 7/24/2012:

AND NOW, this 24th day of July, 2012, upon consideration of the Plaintiff’s Memorandum in Opposition to Defendant’s Motion to Dismiss and/or Sever Complaint, it is ORDERED that no later than August 8, 2012, the plaintiff shall file a supplemental memorandum in which it shall cite each case within the Third Circuit holding contrary to the cases cited in the plaintiff’s memorandum.

And another order on 7/31/2012:

AND NOW, this 31st day of July, 2012, upon consideration of the Plaintiff’s Motion for Clarification (Document No. 12), it is ORDERED that the motion is GRANTED.

IT IS FURTHER ORDERED that the Order of July 24, 2012 refers to all BitTorrent copyright infringement cases and similar copyright infringement actions.

So essentially, Judge Savage asked Troll Fiore to argue against himself. Fiore submitted his memorandum on 8/8/2012 and cites at least a dozen cases where joinder was held improper, but he does his best to try and make it seem like really the issue is up in the air and it should fall on his side.

This is probably the funniest document I’ve ever read. You can just feel the cognitive dissonance on the pages. He’s very quick to point out why the cases he cites are wrong, but maybe he made the mistake of citing one of Savage’s own decisions that found joinder improper. Either way, Savage was not swayed, as we have seen, and Fiore failed. But this document will be very interesting for future motions to sever, where we can use the trolls own words against him.

As the question about pornography’s eligibility for copyright protection becomes hot, Marc Randazza attempts to put down the fire… he helped to ignite

Posted: August 16, 2012 by SJD in Community contributions, M. Randazza
Tags: , , , , , , , , ,
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I am aware of at least five occasions, when the question “is pornography eligible for copyright protection?” was raised in court documents by defendants, attorneys and even judges over the past year. When Steven Yuen, in his counter attack on Prenda and Hard Drive Productions, introduced this idea as an affirmative defense, it caused a mini-hurricane in online media, especially in that connected to the adult entertainment industry. Indeed, this industry is religiously fearful of consumer piracy, and it takes for granted that file sharing is the main reason behind the Smut Empire’s decline over the last decade. No surprise that almost every industry insider believes that losing copyright protection would forever devastate the magic kingdom of fake boobs and artificial moans. Marc Randazza, who made his name as a free speech advocate and a defender of copyrights on such timeless masterpieces as Jeff Cums in Colby’s Mouth, was not silent at that time either, but he stopped short of entering the legal arena and venting his righteousness in courts.

This week something has seemingly changed: a similar suggestion — that copyright does not cover obscene materials — has prompted Randazza to intervene. This clause was just one of many defenses found in the counterclaim filed by a pro se defendant from Colorado Jeff Fantalis. In response, Randdazza, formally representing the First Amendment Lawyers Association (FALA), filed an amicus curiae brief. This document is an interesting read, although, just like the majority of the latest Randazza’s write-ups, this one did not avoid his hallmark hypocrisy. For example, he writes about the consequences of copyright abolishment for pornography:

The casualties of such legal poison will be far-reaching and indiscriminate,

In fact, the same statement is quite applicable to Randazza’s activities as a copyright troll.

Although I said that “something has changed,” I don’t believe that any single event has triggered the involvement of Randazza/FALA; it was rather an emerging pattern that woke up the man who is capable of seeing that the legal foundations of the porno industry are not as solid as they seem, and if nothing is done, things may turn out grim for pornographers. Ironically, our “visionary” is among those people who helped escalating this problem in the first place.

I’m never tired of repeating that those adult producers who have sided with copyright trolls and approved terror and extortion, are not only shooting themselves in the foot, but also pushing their colleagues towards a dangerous chasm. It is very upsetting, because the majority in this industry understands the perils of the indiscriminate assault on the customer base. This smarter part of the industry regards the actions of few lowlifes as shortsighted and moronic.

Many copyright troll victims are not silent lambs and they often push back and, not surprisingly, employ methods they find handy, not necessarily the methods that Legalese-speaking trolls expect. Questioning whether porn should enjoy the copyright protection is one of “asymmetric” responses, and only a tip of the iceberg, although this particular tip is big enough to nickname the entire adult entertainment industry ship Titanic.

The fact that Randazza has entered a lawsuit filed by the very people that he and his caste loathes (Lipscomb and his goon Kotzker), tells how far trolls managed to wander in their industry-destructing quest.

I would love to make sure that the rest of the FALA is aware of the following irony: out of more than 180 members, the one who hurried to defend the rights of the Smut Guild is one of those responsible for the emerging mess.

So… there is not much else to add. I just want to stress one more time that my speculations are not about the copyrightablity of porn per se, but about the reasons why this battle is currently raging on and who has started it. If I was alone in my conclusions, I would probably feel uncomfortable making such bold statements, but as I look around, I see that the majority thinks the same way. Below are just two random comments out of many from the discussion board:

Drifter 2012/08/14 at 3:25 pm wrote:

Randazza and the other copyright trolls brought this on themselves by abusing the court system with their predatory litigation practices. While I am definitely not one for censorship or limiting the ability of people to create works, even adult ones, I cannot help but be amused that the court system that the trolls and their adult film clients abused so egregiously of late could now potentially destroy them all if pornography is ruled to be uncopyrightable. That’s what they get for being greedy shortsighted douchebags.

Anonymous on 2012/08/14 at 4:04 pm wrote:

Exactly. I doubt anyone would have seriously considered this issue if not for copyright trolling by the adult industry. Even if they were filing copyright lawsuits along traditional lines (copied script, going after bootleggers who are profiting from selling copies, etc.) this probably would never have come up. But now that we have seen the adult industry turn to copyright law to run a criminal, for-profit extortion scam, we even have judges spontaneously questioning the copyrightability of porn. I think what we are seeing here is the judiciary acting like a parent trying to reign in a child, basically saying “look, we gave you guys a little more privilege and responsibility, we thought you had grown up enough to handle it, but it looks like maybe we’re going to have to take it back.” Copyright trolls have been pushing the legal system to its limits, daring courts to find ways to stop them, and this is what they have provoked in response. To have a judge spontaneously question the copyrightability of porn must have these guys shitting bricks, as it is a very clear warning that the judiciary’s patience is running out. I’ll bet if you looked at all copyright lawsuits brought be the porn industry in US history, by now less than 10% of them are non-trolling lawsuits, so clearly this is an industry that has shown a lack of respect for its access to the courts.

I do not believe pornography should be treated any differently than other media, and I doubt porn would be found to be uncopyrightable if this went all the way to the Supreme Court. The danger here for xbiz and the trolls isn’t whether the ultimate outcome would be in their favor on not, but that they have now crossed into the danger zone of provoking the legal battle that will cost them years in court and millions in attorney’s fees. The funny part is that the trolls won’t be the ones who suffer the most for their own bad behavior. Sure, if this shuts them down they’ll lose out on potential future troll revenues but they won’t pay out of pocket; they’ll slink off with their cash and leave the bigger players in the adult industry, who have the most to lose, to pay the legal bills.

I’ll give Randazza credit, at least he’s on the forefront here after being one of the players responsible for stirring shit up as a copyright troll. Don’t expect to see guys like John Steele, Mike Meier or Ira Siegel jumping in to clean up their own mess (not that they could do more good than harm if they tried). But Marc is a guy I expect to see in it to the end.

Trolls have summoned even more potentially destructive forces

Last thought and yet another long quote from Reddit. This time the author analyzes another grave problem (courtesy of copyright trolls) that adult industry will have to deal with earlier or later.

dendropsophus says:

Adding to your argument about harm done to the industry, remember that porn used to be very much a mob-run business (Deep Throat was financed and distributed by the Mafia). Much like the casinos in Las Vegas, the adult business has made a huge effort over the years to dissociate itself from that image and rebrand itself as professional, honest, and legitimate.

But a lot of older people, many of whom vote and live in Florida, the swing state par excellence, remember how things used to be. If the copyright-shakedown racket proliferates enough that the subject gets some more mainstream media coverage (or if enough victims like Fantalis are not too ashamed to fight back), the industry’s image could suffer enough damage that the legal and political climate surrounding obscenity could shift very quickly. (Expect to see more pandering similar to Romney’s advocacy of mandatory porn filters on computers, but from both major parties.)

It’s inevitable that free downloads will continue to get easier and more anonymous, and the adult industry has to adapt to that. But ethically-challenged extortion rackets are a real (and avoidable) existential threat to their business, and more people who work in the industry need to realize that.

I hope that those who work in the industry, those who at least try to listen to us, and not to convenient straw men (“boo! you defend thieves!”), understand that we are not enemies. Even occasional file sharers are not their enemies either, and those “pirates” (read: potential customers) don’t deserve such a cruel and disproportionate punishment they receive. The real enemies of both consumers and the entertainment industry are worm-tongued trolls who care about nothing but a quick buck at the expense of ruined careers, families, and lives on one side; and failed businesses on the other.

Update

08/23/2011

Jeff Fantalis filed an opposition to FALA’s (in fact Randazza’s) amicus curiae brief. He argues two main points:

1. It is not appropriate to ask a judge to rule sua sponte on the porn copyrightability issue, which is essentially a jury question: obscenity is a community standard and only jury can decide.

2. [Most important] Fantalis points to the obvious financial interest of FALA in the outcome of this litigation, which is clear even from the reading of the brief itself: FALA have been representing adult industry for a long time, and many of its lawyers participated in copyright trolling.

For FALA, this case isn’t about freedom of speech; it’s about money.

Couldn’t agree more.

Judge Marrero: Pornography may not be entitled to copyright protection

Posted: August 13, 2012 by Raul in Community contributions, M. Randazza
Tags: , , , , , , , ,
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By Raul

When one confronts a “blizzard of civil actions brought by purveyors of pornographic films alleging copyright infringement by individuals utilizing a computer protocol known as BitTorrent,” it appears as if Federal District Court judges are looking for more reasons to grant severance as a way to discourage these lawsuits. As Judge Otis D. Wright of the CACD observed:

The federal courts are not cogs in a plaintiff’s copyright-enforcement business model. The Court will not idly watch what is essentially an extortion scheme, for a case that plaintiff has no intention of bringing to trial. By requiring Malibu to file separate lawsuits for each of the Doe Defendants, Malibu will have to expend additional resources to obtain a nuisance-value settlement—making this type of litigation less profitable. If Malibu desires to vindicate its copyright rights, it must do it the old-fashioned way and earn it.

When Virginia-based copyright troll Mike Meier began filing lawsuits in the Southern District of New York (SDNY) back in December of 2011, I wondered if he paused to consider the implications of what he was doing or whether he was too busy counting the rewards he would reap. The implications are that the SDNY is arguably the most prestigious District Court in the nation (sorry, DDC, NDIL and CACD), because it hears and rules on some of the most high profile and complex cases in the federal judicial system. Accordingly, other District Courts will more often than not look to the SDNY when deciding a similar matter. For reasons known only by him, Marc Randazza had his theory of vicarious negligence kicked to the curb in the SDNY, while pursuing a copyright troll lawsuit in the SDNY. Randazza is a very smart guy, and he is aware of the implications. Based upon the determination in this case, it is more than reasonable to forecast that other lawsuits, which rely upon this theory of liability, either in whole or in part, will also be summarily dismissed in the future.

Regarding reasons to grant severance in a copyright troll lawsuit, Meier’s track record in the SDNY has given other District Courts several reasons to grant severances, which they are using on a weekly basis (it seems):

  1. On 1/3/20120 in the lawsuit entitled Digital Sin v. Does 1-176 (12-cv-00126) SDNY Judge Nathan referenced a 1-17 hearing during which Meier incredibly admitted to a 30% mismatch between infringer and subscriber in identifying IP addresses. Judges across the nation are using this as a plank of their platform to grant severance.
  2. Likewise and out of the same determination, Meier admitted to hearing “horror stories out there, telling what some law firms have done. For example, they have called and harassed the John Doe defendants.” This has since been translated into “abusive litigation tactics” in many subsequent judicial determinations across the nation granting severance.
  3. On 05/15/2012, in the lawsuit entitled Digital Sins v. Does 1-245 (11-cv-08170), a SDNY judge McMahon was the first judge to point to the fact that by joining oodles of potential plaintiffs in a lawsuit with a $350 filing fee, copyright trolls were ripping of the federal government. Once again, this reason to grant severance now resounds across the nation.
  4. Additionally, in the same lawsuit Judge McMahon observed that she had no faith in Meier’s geo-location technology, which she drilled home at a later date. Not surprisingly, this has also become another nationwide plank, granting severance in many determinations across the nation.

To the glee of us who are opposed to this predatory and shameless business model, Meier has continued to soldier on in the SDNY, but he has now blundered into an area, where both sides of this fight need to pause and assess the stakes. To put it bluntly, Meier has so aroused the ire of the SDNY, that First Amendment rights are potentially being placed on the sacrificial altar of the “quick buck.”


Federal Judge Victor Marrero

On 7/31/2012, in the lawsuit entitled Next Phase Distribution v. Does 1-27 (12-cv-03755), Judge Marrero who is no novice when it comes to overreaching handed down a Decision and Order, severing Does 2-27, and while touching on a lot of the customary reasons, added a new one:

Finally, the court recognizes that if the Motion Picture is considered obscene, it may not be eligible for copyright protection … Accordingly, the court recognizes that joining 27 defendants, a substantial number of whom may have no liability in this case, in a copyright infringement case when the copyright itself might be deemed invalid, could prove to be a costly and futile exercise for Nest Phase and the Court, and a damaging and unnecessary ordeal for the John Does.

This may just be a warning shot across the bow, but xbiz should take notice and put pressure on the small percentage that engage in this noxious extortion scheme before your freedom to create is undermined by the few. Based on the above, I predict future determinations severing Does, making use of this reasoning, which is problematic to say the least.

 

To end on a lighter note, I’m sending this out to the Frat Boy Trolls in response to the last week email (NSFW):

 

Featured comment

houstonlawy3r says:
August 13, 2012 at 10:10 pm

This is probably one of the best articles I have read yet. Quite frankly, after reading your article, I feel compelled to write something up as well because this is a momentous order (especially considering what Judge Howell just did in DC elevating the issue to a higher court).

The problem is that there is nothing to write because you’ve covered it all in a way that cannot be matched. Good for you. :) I would advise all readers to read the order and take this one seriously. The dominoes are falling and I suspect (and hope) this issue is coming to a resolution.

Rob came up with an article soon after this comment. The article compliments Raul and complements Raul’s observations.

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