Last month I wrote about a default judgement in a Malibu Media case: an Illinois judge expressed a concern that all these lawsuits are designed to be a secondary revenue stream for rightsholders rather than a legitimate recovery of lost sales. As a result, he awarded the minimum amount allowed by law, $750 per work, $9,000 in total (plus attorney’s fees).
Regarding the “per work” part of the law, I noted that
[…] Lipscomb found a bonanza in the fact that for the purpose of the statutory award the law doesn’t differentiate between a multi-million full-budget movie and a cheap, plotless porno flick illegally filmed at the pornographers’ home in a course of hours. Thus, the judge couldn’t award less even if he wanted. This loophole guarantees that the shakedown business stays profitable no matter what.
US Federal Judge
Sheri Polster Chappell
It seems that I was too pessimistic: today Judge Sheri Chappellawarded a $6,000 default judgement (plus $1,657.00 in fees and costs) for 47 “works” in Malibu Media v. Danford (FLMD 14-cv-00511). She reasonably ignored the overblown claim of multiple infringements, thus patching a loophole Keith Lipscomb has been abusing for years. In addition, the judge questioned the “lost revenue” hype copyright trolls are so accustomed to pulling out of thin air (emphasis is mine):
Malibu Media asserts in this instant case, the infringement was committed willfully. Specifically, Malibu Media seeks $1,500 per work in statutory damages. Since Malibu Media alleged Danford infringed 47 works, Malibu Media seeks a total of $70,500 in statutory damages. Malibu Media argues this amount is reasonable because Danford aided other participants through the BitTorrent system to infringe its copyright and caused the lost sales of its content which likely exceed lost sales of $70,500 or more.
The Court, however, finds a statutory award of damages of $70,500 would provide Malibu Media a windfall and therefore is not warranted here.Clever Cover s, Inc., 554 F. Supp. 2d at 1313 (“statutory damages are not intended to provide a plaintiff with a windfall recovery.”) […]. Here, Malibu Media failed to provide any evidence of its own lost sales, profits, or licensing fees as a result of the infringement to assist the Court in determining the appropriate amount of statutory damages to award.
Similarly situated courts addressing statutory damages where a defendant has downloaded copyrighted materials through a BitTorrent system have assessed damages of approximately $6,000 based on an inference of willfulness.
The judge refers to three non-porn cases where there was an award of $6,000 per a single movie, and concludes:
Nothing about this case materially distinguishes it from cases in which damages in the range of $6,000 have been awarded. In light of the facts and circumstances in this case as well as other similarity situated cases within this district, the Court finds a statutory award of $6,000 is appropriate.
I hope that this is the beginning of a pattern that will bring more or less reasonable numbers into the game, thus rendering the shakedown business model less profitable.
It is worth repeating that while in this particular case the default judgement was far less than a typical settlement demand in a Malibu Media case, relying on a favorable default is not a good idea. We saw default judgments that exceeded $100K.
I am requesting a Pro Bono attorney because I am unemployed and on Medicaid. For the last 28 years I have been suffering from chronic Lyme disease and now cancer as well. I cannot afford an attorney and this case has been causing me a great deal of additional emotional stress. Please help.
I am willing to provide tax returns and any doctor’s documents showing the state of affairs that I’m in. Keep in mind I am not even the subscriber of the IP address in question.
You know what… I don’t have an illusion that the crooks will drop this lawsuit. This is not the first time a disgrace like this happened (and continues to happen). Sure, according to Keith Lipscomb, “Prenda’s story [is] not Malibu Media’s story by any stretch.”
Today the crooks let this guy go. Did this post help? I don’t know… While I hope it is the case, it is rather irrelevant: what’s important is that the nightmare is over for Andrew. I wish him all the best.
On Friday 4/24/2014, ILND Judge Robert M. Dow Jr granted the plaintiff’s motion for default judgement¹ in Malibu Media v. Jack Funderburg (ILND 13-cv-02614). While default judgments are (sadly) not really big news these days (such outcomes are an integral part of XArt’s secondary revenue stream), this order stood out for a couple of reasons.
US Federal Judge
Robert M. Dow Jr.
In addition to the attorney fees ($2,525), the judge awarded the minimum statutory damages possible: $750 per work ($9,000 total), despite the fact that the plaintiff asked for three times more. The explanation of why the plaintiff doesn’t deserve more is heartwarming (citations omitted, emphasis is mine):
Plaintiff requests $27,000 in statutory damages, which amounts to $2,250 per film. It argues that this request is reasonable, as Defendant’s alleged willful infringement permits the Court to impose statutory damages as great as $150,000. See 17 U.S.C. § 504(c)(2). In addressing Plaintiff’s request, the Court notes growing judicial concern with “the rise of so called ‘copyright trolls’ in the adult film industry, meaning copyright holders who seek copyright infringement damages not to be made whole, but rather as a primary or secondary revenue stream and file mass lawsuits against anonymous Doe defendants with the hopes of coercing settlements.” As an actual producer of pornographic films, Malibu Media is unlikely a non-producing troll that purchases the right to bring lawsuits against alleged infringers. As an enforcer of pornographic copyrights, however, Plaintiff is among the entities that courts are concerned may be “inappropriately using the judicial system to extract quick and quiet settlements from possibly innocent defendants paying only to avoid embarrassment.” The Court is aware of Plaintiff’s extensive history of litigation in the last three years alone. Without drawing any conclusions as to this Plaintiff’s business model, the Court considers the concerns that other courts have expressed in evaluating requests to enter large damage awards with no relationship to actual damages sustained by a plaintiff. To the extent that these concerns reflect industry-wide trends, they counsel against awards that are triple the statutory minimum, as a default judgment imposing significant statutory damages may overcompensate plaintiffs in these circumstances.
The first good thing is that the judge clearly articulated a concern regarding Malibu Media’s abuse of the court system — the abuse that another judge called much less politely: “essentially an extortion scheme.” Judge Dow specifically called Malibu Media / XArt a “troll” (albeit not a “non-producing troll”), a title Lipscomb & Co and their “clients” so comically claim doesn’t apply to them.
The second good thing is that given his concern about “overcompensation,” the judge seemingly remembers that the rationale behind the statutory damages is to approximate real losses (when it is difficult to assess them) — the fact that many judges forget about.
There are two bad things I want to mention, and both are not related to this particular ruling, but to every default judgement in Malibu Media cases.
The first is the default judgement per se. Judgements like this make me sad because defaults are easily avoidable. While in this particular case the judgement is approximately equal to a typical Malibu’s ransom demand, playing this lottery is dangerous for defendants: default judgements around the country lack consistency, and there were cases when some judges awarded more than $100,000.
The second bad is that Lipscomb found a bonanza in the fact that for the purpose of the statutory award the law doesn’t differentiate between a multi-million full-budget movie and a cheap, plotless porno flick illegally filmed at the pornographers’ home in a course of hours. Thus, the judge couldn’t award less even if he wanted. This loophole guarantees that the shakedown business stays profitable no matter what.
Now, the worst part of this order. For some unexplainable reason Judge Dow decided to resurrect the zombie of contributory infringement (citations omitted, emphasis is mine):
Lastly, Plaintiff also asks the Court to (a) permanently enjoin Defendant from directly or contributorily infringing Plaintiff’s copyrights under federal or state law […]
Plaintiff also states a plausible claim for contributory copyright infringement. “A defendant is liable for contributory copyright infringement when it with knowledge of the infringing activity, induces, causes, or materially contributes to the infringing conduct of another.” Plaintiff alleges that Defendant contributed to the infringing conduct of other BitTorrent users by participating in the BitTorrent swarm—a group of users uploading and downloading bits from each other simultaneously. Plaintiff contends that Defendant’s knowledge can be inferred from his use of the platform, as it is frequently used to share unlicensed content, and the fact that the film was free. Based on these allegations, Plaintiff alleges a plausible claim of contributory copyright infringement.
The eye-popping fact here is that the plaintiff never pled contributory infringement (here is the amended complaint).
The only explanation I can think about is that Judge Dow’s clerk, while preparing this order, dropped all his papers, and the pages from different complaints by different plaintiffs ended up shuffled.
Once again the courts continue to extend liability for BitTorrent infringement to the account holders and subscribers. The lesson: If you pay the bill, make sure no one is using BitTorrent.
The Judge appears to have brought an alternative finding of contributory infringement to this opinion on their own based on the evidence.
I have no idea what evidence the author is talking about, and the card sharping here is astonishing: it’s an impossible stretch from “contributing” by actively participating in a swarm as the judge said (essentially directly infringing) to an Orwellian notion that those who pay the bill have a duty toward porn purveyors and may be held liable.
I understand that Lipscomb would be happy to be able to shake down account holders without a need to prove anything… However, I think that this strange paragraph in the judge’s order is an isolated hiccup, most likely an error, and not a trend: any defense attorney will be able to kill the contributory infringement zombie for good in adversarial proceedings… which brings us to the same conclusion over and over again:
If a lawsuit is filed against you, ignoring it won’t make it go away, and you may end up dealing with collection agencies, which have much sharper teeth than our petty extortionists.
This time Lipscomb’s local representative in New York, Jacqueline M. James, “on behalf” of a serial filer of shakedown lawsuits, purveyor of illegally filmed “barely legal” pornography Malibu Media/ XArt, did something so overreaching that I think that the involvement of civil liberty groups such as EFF is warranted.
I don’t know if it was Ms. James’s idea or something cooked in the Miami kitchen, but a few weeks ago she started faxing and mailing proposed orders to the NYSD courts where more than a hundred of Malibu Media cases were pending.
The orders in question directed putative defendants to preserve evidence. Some law clerks and judges rightfully ignored such blatant shortcut attempts, but other lazy ones simply signed them without even reading (otherwise I can’t explain how a legal professional can possibly miss the last paragraph — I’ll get to it shortly).
To say that the language of these orders is grossly overreaching is an understatement. First of all, such orders are not necessary because any defendant, once aware of a lawsuit against him or her, already has a duty to preserve all the relevant evidence. So one of the apparent goals of smuggling this travesty was inducing FUD on the Does, innocent or not, strong-arming them to settle out-of-court.
Historically courts were more or less lenient to individual parties who continued using their computers during the course of litigation. Only specific, deliberate spoliation was frowned upon. For example, recently in Malibu Media v. Harrison (INSD 12-cv-117), Judge Dinsmore ruled that because the defendant destroyed his hard drive without intent to conceal his wrongdoing, he didn’t deserve sanctions:
[…] the Court concludes that Defendant did not destroy the hard drive in bad faith. No direct testimony establishes that Defendant did so, and the circumstances of the destruction as outlined above do no warrant an inference that Defendant destroyed the hard drive for the purpose of hiding adverse information. As such, Plaintiff has not carried its burden to prove bad faith destruction of evidence, and Plaintiff’s motion for sanctions is DENIED.
In any case, it is a common sense that good faith in preserving the data doesn’t require a Doe to stop using his computers, phones and other electronic devices. It would be simply unthinkable in this day and age. And the quote above indicates that even if a spoliation is alleged, it’s the plaintiff who bears the burden of proof.
Yet read one of the identical preservation orders smuggled by James. According to it, a Doe, innocent or not, should either pay thousands for hiring an imaging expert (or even tens of thousands if he/she has many devices/hard drives — more than a typical Malibu’s settlement offer!), or such an innocuous operation as deleting a browser cookie might result in sanctions.
But that’s not all. The most egregious is the last paragraph:
Defendant is also ordered to provide Plaintiff of a complete inventory of all Hard Drives and third party cloud storage services in Defendant’s possession, custody, or control.
This is nothing else but a discovery order issued prior to the Rule 26(f) conference. And that runs afoul of the Rule 26(d):
(d) TIMING AND SEQUENCE OF DISCOVERY.
(1) Timing. A party may not seek discovery from any source before the parties have conferred as required by Rule 26(f), except in a proceeding exempted from initial disclosure under Rule 26(a)(1)(B), or when authorized by these rules, by stipulation, or by court order.
(2) Sequence. Unless, on motion, the court orders otherwise for the parties’ and witnesses’ convenience and in the interests of justice:
(A) methods of discovery may be used in any sequence; and
(B) discovery by one party does not require any other party to delay its discovery.
Both conferring requirement and, more importantly, the motion requirement were ignored. This is mega overreaching. Arguably, the early discovery order exempts Malibu Media from the conferring requirement, but it is a stretch. In any case, such an Order has to be motioned: an answer has to have been filed (issue joined), so a Doe Defender can oppose such a motion for interrogatories.
In any case, this is inherently unfair. The order was issued when the Doe didn’t have a notice about a lawsuit filed against him yet, so he could violate it before even knowing it. Franz Kafka is rolling in his grave.
It is fair to note that at least one judge (or his clerk) paid attention to what was submitted via a back door: Judge Karas removed the offending paragraph before signing:
At this moment I don’t have time and energy to enumerate all the cases, in which this poisonous order was injected, maybe I will post an update tomorrow.
Shame to the judges and law clerks for signing this overreach, brazen orders. Shame… well, I almost automatically wrote “…to Lipscomb and James,” but stopped short: it would assume these guys have a quantum of dignity. They don’t.
Thanks to Raul and the community for contributing ideas/research/explanations for this post.
I would understand a case when a law firm was dissolved for not paying proper fees on time (which was the most likely reason here), but diligent steps were promptly taken to correct the problem. Unlike a voluntary dissolution, this kind of situation is mendable. I waited for the correction to happen for six months, but it seems that Ms. Schulz simply doesn’t care.
Note that in every case she filed at least five documents, all signed as “Schulz Law, P.C.,” so essentially she deceived the court more than 600 times.
These people are not only evil in their assault on the productive population, but also sloppy and disrespectful to the tribunal.
I just found out that the involuntarily dissolution problem is now moot as Ms. Schulz started filing using a new entity in her signature block, “Media Litigation Firm”:
This doesn’t excuse the deceit: for nearly six months Schulz had been knowingly submitting false information to the court (and to the IARDC: she apparently found time and money to renew her bar registration), so this is an update, not a correction.
“Media Litigation Firm,” yet another beast’s head, was registered by a Chicago attorney James T. Derico, Jr. of Derico & Associates, P.C. on 4/06/2015 using his firm’s address. I have no idea how this attorney is related to the shakedown cartel. Time will tell.
Malibu Media v. Tashiro (INSD 13-cv-00205) is an eventful case (228 documents so far), one of the few “cases to watch” — mostly copyright shakedown lawsuits in which defendants didn’t succumb to extortionists’ threats and decided to hire competent attorneys to fight back. Some of these cases (and this case in particular) have all the prospects to end up in front of a jury in the first trial of this kind¹.
Mark J. Dismore
I wrote about this case in the past: a sad story in which morally dead attorneys “on behalf” of jaded pornographers tried to extort money from an Indiana resident by threatening to destroy her life. Ironically, the defendant Kelly Tashiro is a nurse — a profession dedicated to saving lives.
After the trolls realized that their case against Kelley is weak, they pointed their finger at her husband Charles, adding him as a defendant on 5/15/2014. Phillips began representing Charles too, and the newly added defendant also maintained his innocence since then. No evidence of XArt’s smut was ever found on the household hard drives by the Malibu’s expert.
As in virtually every case, when it turned out that the trolls had neither facts nor law to pound, they universally played the spoliation/perjury card, dangerously moving into the criminal law domain. Apparently, alleging criminal actions has more leverage in wrestling defendants into submission than does weaponizing the stigma attached to “barely legal” hardcore pornography.
On 1/29/2015 a big milestone — an evidence hearing — was set to happen. Not trusting his stooge Paul Nicoletti to handle the matters, Keith Lipscomb himself (with an associate) flew to Indianapolis.
On the eve of this hearing, seemingly sensing the gravity of the accusations of potentially criminal conduct, Charles Tashiro rather unexpectedly invoked the Fifth Amendment right to avoid testifying about certain matters. As a result, the hearing was essentially cancelled.
The trolls went postal. A motion to sanction both Charles Tashiro and Jonathan Phillips was filed shortly thereafter. Lipscomb and Co accused Phillips of orchestrating the “sabotage” of the hearing and wanted more than $15,000 from the defendant and his former counsel.
After the botched hearing, citing the conflict of interest, Phillips withdrew as Charles Tashiro’s attorney. Erin Russell appeared on behalf of Charles shortly after.
On 3/16/2015 Phillips responded, calmly explaining the rationale behind the events that pissed off the trolls so much.
Russell’s straightforward response resulted in a pure hysteria: it is hard to read 4/13/2015 Malibu’s reply in support without experiencing pain from rolling eyes exceedingly hard. As Raul put it in 140 characters or less,
I didn’t elaborate the details of the original Malibu’s Motion for Sanctions. In short, the trolls threw everything they could at the wall in a hope that something would stick. They demanded sanctions based on FRCP 37, 28 U.S.C. § 1927, the court’s inherent authority, FRCP 16, you name it…
We anticipated that the motion would be denied as meritless, but in today’s Report and Recommendations, Magistrate Dinsmore exceeded our hopes: he denied each and every claim, sometimes harshly (“This argument borders on the absurd”), and his thorough arguments didn’t leave a lint of hope for success of possible trolls’ objections to this R&R and/or Bar complaints against Phillips.
Motion for sanctions: the pot calls the kettle black
What would arrogant megalomaniac like Keith Lipscomb do when he is royally fucked up? He’d blame the opposing counsel! It happened so many times that it’s not funny anymore. Jonathan Phillips and Morgan Pietz were accused of being members of a “fanatical Internet hate group,” Gabriel Quearry tweeted the fact that XArt owners are filthy rich to “pirates,” and Jason Sweet was declared a “well known anti-copyright lawyer.” It seems that daring to interfere with a well-oiled extortion machine while being ethically and professionally superior to crooks from 2 South Biscayne penthouse will most definitely result in a couple of disparaging labels.
On 3/25 Lipscomb filed a motion for sanctions against the defense counsel. You have to read it to believe. Meriam-Webster must consider another example to illustrate the entry for the word Chutzpah. Essentially, the troll claims that it was Conlin’s fault that her innocent client was humiliated by the accusations of torrenting “barely legal” pornography. It was her fault because… she withheld some of the exculpatory evidence proving her client’s innocence — in a conspiracy to ramp up attorney fees:
Unfortunately for Plaintiff, undersigned, and this Court, Conlin’s scheme caused a tremendous amount of wasted effort, time, and money. Through this motion, Plaintiff seeks compensation for its wasted efforts. Specifically, Plaintiff requests an order holding Conlin liable for the costs and fees Plaintiff incurred since September 2014, at which time Roberto would have been dismissed but for Conlin’s deliberate withholding of exculpatory evidence.
Really? We all know how Lipscomb behaves when clear and unambiguous prove of innocence is presented:
Respectfully, you should counsel [the defendant] that when he loses, he will lose everything he owns and owe my clients hundreds of thousands of dollars. Mark these words, your client’s decision to reject a walk away will be the worst decision he will ever make.
So, Mr. Lipscomb and Ms. Kennedy, cut he bullshit, please.
Suspiciously, this motion was promptly publicized by Law 360, a news outlet popular among lawyers. It was published at 12:37 PM without giving Conlin a reasonable chance to express her opinion: a request for comment was sent at 11:44 am, when she was on a deposition. Yet Keith Lipscomb was readily available for a comment:
M. Keith Lipscomb of Lipscomb Eisenberg & Baker PL, an attorney for the company, told Law360 on Wednesday he couldn’t comment on the specific case, but that “Malibu Media and other copyright owners pursuing BitTorrent infringement claims have expressed growing frustration with the very small minority of the BitTorrent defense bar who are litigating in bad faith and unethically.”
You now… unlike those defense attorneys, Keith Lipscomb and his minions abused local law loopholes, forged signatures, threatened to ruin a life of a wrongly accused person (knowingly), targeted a 75 years old who suffers from cancer and has mentally disabled children, not to mention myriad of derailed lives — many over illegally produced obscene videos. Yet according to our “hero,” if you go to 2 South Biscayne Penthouse you won’t be able to close your eyes and spit without surely hitting a paragon of ethics.
Ironically, this motion was filed without any attempt to confer with Conlin, in a clear violation of Rule 3.01(g), and as such I think it doesn’t have any chance of being granted.
Judge agrees that trolls’ demands are overboard, grants protective order
Now, good news. As I reported a month ago, Cynthia Conlin and Brad Partick filed a motion for a protective order against a patently overboard request to access defendant’s parents’ electronic devices. Today this motion was granted, which means that the judge ultimately agreed that Lipscomb’s arrogant belief that he is entitled to rudely intrude citizen’s privacy at will is a delusion.
As set forth in the Motion and discussed at the hearing, neither Federal Rule of Civil Procedure 34 nor governing Eleventh Circuit authority permit unrestricted access to a party’s database compilations and/or computer hard drives.
Over the next 10 days I will be on a vacation and most likely won’t be prompt in posting updates.
On 3/26/2015 Conlin withdrew the defendant’s Answer to Amended Complaint and Counterclaims. Here is why: she seemingly realized that while in the new complaint Lipscomb, per judge’s order, formally added Angel Roldan as a defendant, he de factosubstituted his son, as the entire complaints doesn’t mention Roberto at all (except in the caption).
[…] although Plaintiff created the guise of maintaining Roberto Roldan as a Defendant by keeping him in the caption, it effectively dropped him as a party — which is what the Court explicitly told Plaintiff to not do. This Court expressly had ordered: “[T]he Court will not permit Plaintiff to drop Roberto Roldan as a party to this action.” According to a reading of the second amended complaint, as well as the 11th Circuit jurisprudence as shown in Welch and Lundgren, Plaintiff did exactly what the court ordered it to not do. In other words, it violated the court’s order. As the second amended complaint speaks for itself, clear and convincing evidence is shown.
Conlin asks to strike the second amended complaint and enter a final judgment in favor of Roberto, thus declaring him a prevailing party: a necessary condition of eligibility to attorney fees.
Yesterday Cynthia Conlin responded to Lipscomb/Kennedy/Shatz’s motion for sanctions. Unlike the hysterical Malibu’s missive, this response is level-headed, argumentative and worth reading in full, so rather than re-telling it and pulling out blockquotes, I embed it below:
Malibu Media v. John Doe (OHSD 14-cv-00493) is one of the cases I list on the “Cases to watch” page. A mere fact that the defendant is represented by Jason Sweet means that it is worth attentively watching how this case progresses.
I wrote about this lawsuit half a year ago. That post was mainly about the defendant’s argument that the plaintiff didn’t need to know the Doe’s identity because his/her attorney would happily accept the service. The motion exchange revealed that Malibu’s local Yousef Faroniya is merely a stooge who files shakedown lawsuits and forwards email to/from the troll center in Miami. Not surprisingly, he avoids talking to the opposite party’s attorneys at all costs; hence I named the post “Copyright troll Yousef Faroniya and his telephonophobia.”
Normally I would edit the post to append a new information, but because at least three major events happened since my last update, a new article is appropriate. These events are:
the judge’s order denying the defendant’s motion to quash, and striking parts of the plaintiff’s complaint;
the defense’s motion to dismiss for failure to timely serve;
the plaintiff’s violation of the court’s order and the resulting motion to show cause.
The judge denies the motion to quash yet expresses concerns
US Federal Judge
Unfortunately, Judge Timothy Black was not persuaded by Sweet’s argument and on 1/21/2015 ruled that the plaintiff is entitled to know the defendant’s identity. Nonetheless, while the judge didn’t explicitly order not to identify the defendant publicly at that time, the tone of the order suggested the assumption that the defendant would proceed pseudonymously.
Denying the motion to quash didn’t mean that Judge Black was happy with the plaintiff’s conduct. The following paragraphs from the complaint piqued his attention:
25. IPP’s software also logged Defendant’s IP address being used to distribute third party files through BitTorrent. This evidence indicates that Defendant engaged in BitTorrent transactions associated with 2732 files between 06/23/2013 and 05/13/2014. Collectively, this evidence is referred as the “Additional Evidence”.
26. Plaintiff has the Additional Evidence on a document and can produce it.
27. The Additional Evidence demonstrates that Defendant is a persistent BitTorrent user.
28. Many of the titles to the third party works may also be relevant to proving Defendant is the infringer because they correlate to the Defendant’s hobbies, profession, or other interests.
Those who follow these cases remember that Malibu Media and its attorney Mary K. Schulz was sanctionedtwice in Wisconsin for filing an infamous irrelevant and scandalous “exhibit C” — the list of filenames, many of which are embarrassing, purportedly shared from the defendant’s IP address. The judge thought that the above paragraphs from the complaint are nothing but a concealed “Exhibit C,” so he sua sponte ordered to strike this travesty:
Finally, the Court sua sponte raises what appears to be a remnant of one of Plaintiff’s particularly controversial litigation practices. Plaintiff’s complaint makes the seemingly off-hand allegation that IPP International UG logged Defendant’s IP address distributing 2,732 third-party files through BitTorrent. Plaintiff euphemistically describes this as “additional evidence” that Defendant is a persistent BitTorrent user and that “[m]any of the titles to the third party works may also be relevant to proving Defendant is the infringer because they correlate to the Defendant’s hobbies, profession, or other interests.” Plaintiff advises that it has this “additional evidence” on a separate document and gratuitously offers to produce it upon request.
Plaintiff presumably did not attach this document to its complaint because its lawyers have been sanctioned for the same. This attachment, the sequentially numbered Exhibit C, “consistently includes far more disturbing lewd, unusual and unredacted titles of pornographic films allegedly downloaded by the defendant than those belonging to plaintiff.” Courts concluded that the sole purpose of this exhibit was to “harass and intimidate defendants into early settlements by use of the salacious nature of others’ materials, rather than the merit of its own copyright claims.”
Although Plaintiff did not attach Exhibit C to its complaint, references to its existence and thinly-veiled threats of its production demonstrate that “these cases are fraught with circumstances that could embarrass the putative defendant should they become public and strongly influence his or her decision to settle even a meritless suit just to make the case go away before being publicly associated with their client’s film.” The alleged infringement of third-party copyrights is “immaterial to the allegations in the complaint.” Further, “the exhibit is merely a list of filenames, and it likely constitutes ‘immaterial, impertinent, or scandalous matter’ that should be stricken from the complaint.”
Accordingly, the Court STRIKES paragraphs 25-28 from the complaint.
Service games and motion to dismiss for failure to serve
The judge’s order also gave the plaintiff additional 38 days to serve the defendant.
The troll got a hold on the defendant’s identity on 2/2/2015. A reasonable bystander would think that Malibu would rush to serve, right? Wrong. The defendant was not served by the 2/28/2015 deadline. Why? Maybe because Lipscomb’s back office is not that good with the logistics, maybe because the trolls are spoiled by the majority of gullible judges who rubberstamp extensions without asking questions, or maybe because Lipscomb was scared of the prospect of the defendant answering the complaint, which would close the backdoor of the voluntary dismissal cut-and-run.
Moreover, after an email sent to the defense attorney strategically on Friday night before the deadline, the troll had an audacity to ask the judge for another extension.
Note that this motion lists seven other Malibu cases from this district in which the deadlines to serve passed.
What judge immediately did is encouraging: not only did he sua sponte expedite the briefing of this motion, setting a tight schedule (troll’s memorandum contra due by 3/18/2015; defense’s reply memorandum — by 3/23/2015), he also issued an order to show cause in one of other Malibu cases assigned to him, in which the defendants were not served past deadline.
The troll reveals the defendant’s name and address in violation of the judge’s order
Two days after the defendant’s motion to dismiss, on 3/13/2015, Malibu filed an amended complaint, and the exhibits, purposefully or not, displayed the defendant’s name and address, which was a clear violation of the 2/26/2015 judge’s order granting plaintiff’s motion to file the amended complaint and summons:
[…]The Clerk is DIRECTED to issue the summons under seal. The Court establishes the following procedure to balance Defendant’s privacy interests with the presumption of open judicial proceedings. Simultaneously with filing its proposed summons under seal, Plaintiff shall also file a Reference List and an amended complaint. The Reference List, which shall be filed under seal, must contain Defendant’s name and any other identifying information that Plaintiff deems necessary to the prosecution of its case, as well as an appropriate identifier that uniquely corresponds to each item listed. See Fed. R. Civ. P. 5.2(g). The amended complaint and all subsequent filings shall be publicly filed and must refer to Defendant only as John Doe and use the identifier provided in the Reference List for other identifying information. The Court reaffirms the other directives set forth in the 1/21/15 Order. (Doc. 20 ).
In his motion, Jason Sweet claimed that what happened was not a mistake, but a deliberate premeditated action:
On March 13, 2015, Plaintiff, in violation of the Court’s repeated Orders, filed an unredacted summons and reference list with John Doe’s name and address plainly visible. See Docs. 24 & 25. By choosing to file these documents at 8:00 PM on a Friday evening, Plaintiff intentionally chose a time when it would be difficult to correct, and the embarrassment alone might cause John Doe to seek a non-trial disposition just to end the matter. More so, the documents are dated March 12, 2015, further compounding the inference that Plaintiff intentionally waited until Friday evening to file them. Nor is this the first time Plaintiff has indicated a willingness to employ this tactic against Does who refuse to settle.
To substantiate his claims, Sweet listed three other Lipscomb’s cases, in which the defendants’ identities were “mistakenly” publicized.
Judge Black didn’t procrastinate, and today he issued an order to show cause why the troll shouldn’t be sanctioned for a blatant violation of the court’s order:
It all boils down to evidence. If there is no evidence whatsoever, an attentive and diligent judge won’t allow a case assigned to him to linger – he will rule summarily in defendant’s favor. That’s exactly what happened today. An experienced cardsharper Malibu Media (M. Keith Lipscomb) didn’t convince the judge that the proof of infringement (or, more precisely, the lack thereof) elevates to a necessary level of controversy that requires a jury trial.
The most hilarious part is that the defendant wasn’t even represented — he fought pro se instead. This tells volumes about the quality of Malibu’s “investigation” and “proof.” What we witness is a bluff on a massive scale, nothing more.
This is a relatively new case, filed by a copyright troll Christopher Fiore (or to be precise, by the Miami’s troll center using Fiore’s ECF login) on 2/28/2014 — Malibu Media v. John Doe (PAED 14-cv-01280). The defendant decided to fight rather than to pay up: on 4/3 he filed a motion to dismiss the action and quash the subpoena, which was denied on 5/19. As it happens in these shakedown cases, trolls obtained the Doe’s identity and started pressuring him to settle outside of the court: well-oiled extortion machinery in action, nothing new.
The Rule 4(m)’s 120-day time window to serve the defendant was about to expire three weeks after Comcast sold out its customer’s identity to the troll, so on the last day (6/30/2014) the troll moved for an extension in order to have more time to apply pressure. That extension was granted on 7/9, setting 7/30 as a new service deadline. Business as usual: the majority of judges rubber-stamp those extension motions without reading, and they do it again and again.
(m) We find that Malibu’s failure to serve within the time we specified was not reasonable because it knew the defendant’s identity for three weeks before the expiration of the Rule 4(m) period and offers no reason for its failure to serve him, and accordingly we find that Malibu has not shown good cause;
(n) However, we will exercise our discretion under McCurdy and grant Malibu a last extension to August 11, 2014 to serve the defendant, after which this matter will be dismissed without prejudice;
So the defendant was served, and he answered the complaint on 9/2/2014, denying any wrongdoing.
Because of this judge’s intolerance to frivolous delays, this case progressed rather quickly: the defendant submitted his hard drives to Malibu’s “expert” Patrick Paige, who searched and… found nothing. Well, he found some evidence of Bittorent activity from 2010 and a file with the name “Angelica – Good Night Kiss,” which is the name of one of XArt’s hardcore porn flicks. Paige didn’t specify that this file contained the entire movie or even a part. Do you believe that if it was the case, the trolls wouldn’t shout about it? Me neither. This file certainly wasn’t a media file (or a piece) — as the defendant explained later, it might have been a Google cache of a search resulted from a research after the defendant was hit with the lawsuit.
Also, there was an evidence of USB drives connected to defendant’s computers, and those drives were not offered for inspection. Of course the trolls cried “spoliation!” This hysterical accusation didn’t have any effect on the judge, as we will soon see. The defendant himself didn’t oppose to supplying the portable drives — he didn’t think that he did something wrong at all: initially he was only asked for hard drives. He even offered the USB drives for inspection later.
So, having nothing in their hands, the trolls proceeded to pound the proverbial table — they subpoenaed Comcast for the defendant’s data usage and possible DMCA notices. Such request is essentially an admission of the king’s nakedness: the only reason for requests like this is to continue the pressure in a hope that a troll’s victim will break down and pay the ransom. This is not a new strategy.
Scroll down, and you will see that the judge was not impressed either by the spoliation claims, or by the “circumstantial evidence” (an unethical tactic, for which Malibu was sanctioned in the past):
That Malibu Media chose not to ask for the missing storage devices after their existence became evident to its expert in no way bolsters its hollow claim. Nor are we impressed by the histrionics over alleged spoliation. Malibu Media, as the party seeking a spoliation sanction, bears the burden of proving there has been spoliation. […] Malibu Media makes much of what it called “additional evidence,” that is, indications that Doe used his computer to infringe others’ works between 2005 and 2010 — well before the period at issue in this case — and then sought to scrub the traces. Such efforts do nothing to establish Malibu Media’s claim as to its copyrighted works. It is well-established that the statute of limitations to bring claims under the Copyright Act is three years. 18 U.S.C. § 507(b). Therefore, the use and ownership of Doe’s computers before 2011 are irrelevant here as a matter of law. […]
On 12/16/2014 the defendant was deposed; he stayed strong and maintained his innocence.
So, finally, both Malibu and the defendant filed the motions for summary judgment (both under seal), and today Judge Dalzell granted the defendant’s one, denied the plaintiff’s. The Memorandum and Opinion is beautiful in its detailed debunking of plaintiff’s grossly unsubstantiated claims:
[…] Malibu Media cannot prevail here because it does not identify any evidence upon which a jury could reasonably find for it. Malibu Media has failed to raise a genuine issue of material fact as to its copyright claims. As is well-established, a fact is “material” if it “might affect the outcome of the suit under the governing law.” […] None of plaintiff’s responses in opposition is material in the absence of evidence that Doe downloaded or distributed any copyrighted Malibu Media works-a complete failure of proof concerning the essential element of its claim. Malibu Media has failed to show that there is a genuine issue for trial.
Plaintiff’s efforts to shift its burden of proof onto the defendant are unavailing. However troubling Doe’s evasive and shifting answers may be, none animate “disputes over facts that might affect the outcome of the suit” that would preclude summary judgment. […] We will therefore grant Doe’s pro se motion for summary judgment.
I decided to look at the other Malibu cases assigned to Judge Dalzell that were dismissed on July 2014 and later. It turned out that all the cases assigned to this judge are currently closed, and only two from the list were settled, the other defendants are apparently dismissed solely because the cases were assigned to an “inconvenient” judge: I have an impression that the coward trolls ran from this judge at the first opportunity. In my opinion, this is a blatant judge shopping. Correct me if I’m wrong:
Is it a fraud if an attorney files a motion for extension of time to serve a defendant two full days after the said defendant was already served? If it was done intentionally — definitely yes. I don’t believe it was the case, though, when a copyright troll Paul Nicoletti asked the court to extend the time to serve at 3:45 pm on Monday, 11/10/2014, while the defendant was already served at 11:45 am on 11/8/2014 (Malibu Media v. David Grant, INSD 14-cv-00740). He simply didn’t know, and didn’t bother to pick up the phone and check. No, it was not a fraud this time, but a total lack of diligence, an essential quality of an attorney. Well, this is hardly surprising: once a crook, always a crook. In addition, Nicoletti didn’t notify the court once the blooper was discovered, and after over a month passed since the service, a motion for default judgment was hastily filed; this motion mentions the actual service date.
Note that Nicoletti filed three motions for extension of time in this case. Trolls’ MO is to delay proceeds as much as possible (sometimes to the extent that would surprise Kafka), and if/when finally served, defendant doesn’t answer in 21 days, the troll immediately fileds for a default.
There is actually an explanation to what has happened in this particular case. When I started investigating, I found out that the process server didn’t communicate with Nicoletti at all: she took an order and reported the execution of the service (on November 10 at 2:35 pm) to an individual named Mike Thornton — Keith Lipscomb’s former non-attorney extortion officer who currently coordinates shakedown activities behind the scenes out of a Chicago Western suburb. Today Lipscomb is shy to mention the wild times of mass extortion lawsuits, including his abuse of Florida’s Pure Bill of Discovery (thanks to this loophole, he and John Steele made an obscene amount of money robbing US citizens). At that time Mike Thornton, falsely claiming that he was an attorney, intimidated and harassed people over the phone, wrestling them into paying ransoms (just like Prenda’s Mark Lutz).
Here is what people said about Mike Thornton in 2011:
Nasty little man… made me believe he was an attorney although he didn’t say that. Trying to strong arm me into paying over $2300 for downloading a movie… College Cock Hounds… I am 56 yrs old married for 20+ years. I don’t think so. Threatens me with litigation… $30,000.00.. My answer was to go ahead and sue me. I will see them in court. Would not give me his company name. He is or was a debt collector. He does not have attorneys in any other state than Florida. His name is Mike Thornton. He will intimate you if he can.
This guy subpoenaed my ISP for records from an attorney named Ryan Stevens in Arizona. He then called me and claimed he had proof that I had illegally downloaded porn and his clients were willing to settle out of court for $25.000. I told him I had done no such thing and wasn’t paying anything. He then got loud and abusive and said that he would take it to court and make this accusation public record if I didn’t settle. I told him #1 I did no such thing, #2 I am an disabled vet and he could not sue me and get anything. He then said he would turn the evidence over to the authorities and I would be prosecuted for a felony. He called me from 818-292-8194 in California. There were 250 IP addresses on the subpoena. Can anyone tell me what the real deal is with this guy, how this played out for you, and how I can shut this guy down?
Demanding money in exchange for not reporting a crime is the textbook definition of criminal blackmail, and still, Lipscomb & his gang has been clandestinely employing this sleazeball all the time. Another “negotiator” from the past, Elizabeth Jones, is also still employed, despite the trolls’ attempts to make an impression that she retired.
As for Nicoletti, this episode suggests that local trolls can’t even fart without the Troll Center permission: I heard stories about local attorneys not answering defense’s simplest questions for weeks. While it is obvious that local representatives are not really involved, if they sign their names on pleadings and motions (even without reading), it’s a fair game to call them unprofessional.
Mike Thornton deletes his email account
I’m actually not convinced that “Mike Thornton” is a real name, neither am I sure about “Anthony Palmer” (another “collector” from 2012) and “Elizabeth Jones.” All the three names are too common.
The email firstname.lastname@example.org was apparently deleted after the crooks discovered that I’m aware of its existence. That raises brows. I urge government investigators to subpoena this account while the information is retained by Google. Thornton’s IP address was 184.108.40.206 at 14:50 on 1/15/2015.
Thanks to Raul for discovering the discrepancy in the docket.