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“You cannot escape the responsibility of tomorrow by evading it today.”
Abraham Lincoln
As you may recall, M. Keith Lipscomb’s porn extortion enterprise hit a bump in the road last October when Judge Baylson of the Eastern district of Pennsylvania, more or less, directed Lipscomb to bring some of his copyright troll lawsuits to a verdict so as to ascertain whether these lawsuits were legitimate or not. Of course this direction is contrary to the usual porn copyright business model, which is to obtain the personal identifying information of the person who pays the ISP bill, harass the shit out of said person to pay thousands to settle, and then dismiss the lawsuit once it gets either (a) uncomfortable due to heightened judicial scrutiny or (b) grows stale with the maximum settlements deemed achieved. Aside from the Fantalis matter in Colorado this is the first lawsuit in which a copyright troll’s evidence will be tested in a court of law. Accordingly, SJD and others have been reporting on this lawsuit as it progresses and SJD’s coverage is here, here, here, and here.
Question: How do you gather and refine your evidence to prepare for a trial (the first of its kind in the US) which is set to begin on June 10th? Answer: If you are M. Keith Lipscomb, in the most overreaching and last minute fashion humanly possible.
A more recent example of this overreaching and slipshod trial preparation was disclosed last week when Lipscomb filed an Emergency Motion to allow the plaintiff entry into John Doe 16’s home for the purpose of making forensic copies of his hard drives. The basis for this motion is that the copies of the hard drives previously provided by this party are unreadable which Lipscomb just discovered on April 30th due to the illness and resulting death on April 26th of one of his two experts witnesses. Conspicuously absent from this motion is an affidavit from the surviving expert witness explaining why the copies are unreadable and when this problem was discovered.
Keep in mind the trial is set to begin on June 10th and discovery should have been completed some time ago.
In opposition to this motion the attorney for John Doe 16, Ronald Smith, points out with well-deserved indignation that Lipscomb’s expert witnesses had been sitting on these supposedly unreadable copies for 4 months!
It appears unequivocal that Defendant’s counsel first learned of this problem on May 1, 2013, after the scheduling of this case for Trial. How or why, with a period of over four months, could the parties not be made aware of the difficulty in discovery and now at the midnight hour request an opening of the discovery process when trial is only days away. At this late juncture, not only has Defendant’s counsel for John Doe 16 been prejudiced, but perhaps other counsel in this matter who have indicated that they have had no choice but to settle.
Furthermore defense counsel underlines what by now is obvious:
Plaintiff’s counsel has been egregious in the handling of this case and at this late date the rewarding of and opening of discovery will not only penalized John Doe 16 but the other parties as well.
A telephone conference is scheduled for tomorrow regarding this example of sloppy and overreaching trial preparation and let’s hope that Judge Baylson is not in a forgiving mood.
While I was concentrating on John Steele’s criminal organization, I’m afraid other trolls have been feeling neglected, especially a mega villain Keith Lipscomb. To rehabilitate myself, I looked into my backlog and found this gem.
Back in November, in a slow-moving class action lawsuit (Jennifer Barker and Sabree Hutchinson v. Copyright Trolls, KYWD 12-cv-00372), plaintiffs’ attorney Kenneth Henry used a pretty mild description of what Keith Lipscomb and his gang have been doing for about two years:
To bastardize the litigation process and abuse the court system as the Defendants have done, and now to object to the taking of early discovery vis-à-vis their claim that this Court lacks personal jurisdiction over them is yet another display of the Defendants’ total disregard for the courts and the rights of those with whom they deal.
In my (and not only my) opinion, Mr. Lipscomb’s “business” is better described as an extortion racket rather than a mere “bastardization of the litigation process.” Yet Lipscomb took an offense and demanded to strike that reasonable assessment from Henry’s motion:
Plaintiffs repeated accusations that Defendants are “bastardiz[ing] the litigation process” and have purposefully abused the court system in order to harass innocent individuals nationwide are baseless and unwarranted.
[...]
Accordingly, the language “bastardization of the litigation process” should be struck.
And this is not ironic enough: this man shakes down many thousands (a significant part of whom are innocent) over obscene material; his evidence is flimsy at best; and his fee-splitting agreements with porn purveyors and unlicensed foreign IP address harvesters are undeniably unethical. This man, in addition to having become furious over a dictionary word, was also offended when Henry called him “obviously not a Bible scholar”:
[...] the first page of Plaintiffs’ reply exclaims, “[o]bviously, counsel for the Defendants are not Biblical scholars.” This is deeply offensive. Undersigned was raised a Christian, was active in Campus Life and Campus Crusade (now known as “Cru”) in high school and college respectively, and used undersigned’s only preemptory waiver to ensure enrollment in an always oversubscribed biblical law class while attending The Cornell Law School. Undersigned is currently a member in good standing of the First Presbyterian Church in Fort Lauderdale, Florida and is a regular attendee at services.
Here we are: an indefinitely greedy person who indiscriminately assaulted many elderly, poor and sick, a person who lies each time he opens his mouth, a coward who loves to spill his saliva threatening fellow attorneys, demonstrates that he has a thin skin in unexpected places.
It evades me how this man can reconcile his purported Christianity with the fact that the public in general reasonably thinks that copyright trolling is a labor of Satan. Maybe people of faith chime in and explain. Until then I cannot get rid of the vision of Lipscomb’s famous relative turning in his grave.
Question for the community
Given the passionate and articulate pleading embedded above, it seems that M. Keith Lipscomb manages to conflate two incompatible things: a Christian worldview and “theft via extortion” (a.k.a. porn copyright trolling). I meditated on this paradox and cannot think about but two explanations, unless I am totally wrong. What do you think?
We often say that trolls abuse the judicial system. What a copyright troll and a fraudster Paul Nicoletti (Keith Lipscomb’s local counsel in Michigan) has done in Patrick Collins, Inc. v. John Does 1-21 case (12-cv-12596) cannot be simply called an “abuse.” It’s an attempted rape. To the best of my knowledge, no troll ever dared to show the middle finger to a judge as explicitly as Nicoletti did a couple of weeks ago.
Federal Judge Arthur J Tarnow
The case in question was filed on 6/14/2012 — a typical porn copyright shakedown case: Nicoletti moved to subpoena four ISPs to obtain the subscriber information of alleged file-sharers of a pornographic film “Busty construction girls.”¹ Unlike some other states that do not welcome trolls anymore, Michigan is currently a volatile battleground: judges there still rule inconsistently. The judge on this case, Arthur J. Tarnow, was among those who seemingly understood the predatory nature of lawsuits like this one. So, he put the brakes on the scam, issuing a harsh order on 8/28/2012. In particular, he ordered (emphasis is mine):
(1) Plaintiff may serve a subpoena pursuant to Rule 45 of the Federal Rules of Civil Procedure on John Doe #1, IP Address 97.69.173.120, through his or her ISP, Bright House Networks, to obtain the name, address, and Media Access Control address for John Doe #1. Plaintiff is not permitted to seek or obtain the telephone numbers or email addresses of John Doe #1, or to seek or obtain information about any potential John Doe defendant other than John Doe #1. Plaintiff’s counsel is directed to attach a copy of this Order to the subpoena.
[...]
(4) Absent any motion to quash or objection, the ISP shall produce the information sought to the Court, not the Plaintiff, ex parte and under seal. Said information will be provided to counsel for Plaintiff at a status conference to be scheduled by the Court.
(5) Plaintiff may only use the information disclosed pursuant to the subpoenas for the purpose of protecting and enforcing Plaintiff’s rights as set forth in the Complaint.
Not a slightest trace of ambiguity: the judge ordered to subpoena the ISP for a single IP address and proceed with naming the defendant.
So, our crook indeed proceeded with the subpoena and obtained the name of John Doe #1 on 10/26/2012: Bright House, accustomed to delivering information directly to trolls, messed up and sent the info to Nicoletti instead of the court chambers. Prior to that, on 10/12/2012, at the day when the time to serve, permitted by the Rule 4(m), elapsed, Nicoletti applied for an extension (until 11/12/2012). I do not see in the docket any order pursuant this request. Nicoletti finally filed the amended complaint on 12/26/2012 (two months after receiving the name from the ISP), and that complaint showed the defendant’s name. It is not clear how the troll got this name: he claimed that he deleted the email that he received from the ISP, and there is no indication of the status conference, during which defendant’s name and address were supposed to be handed over to Nicoletti.
When glancing over the amended complaint, I experienced a sudden strike of déjà vu: next to the defendant’s name we see “and John Does 2-21.” The judge unambiguously severed the other Does, and I do not see any order reversing this decision. Am I blind? Moreover, the amended complaint is exactly the same as the original: the only difference is the defendant’s name, which caused a change in two paragraphs of the text. Compare yourself:
Theoretically it is possible that the record of a conference is missing, and during that conference the judge changed his mind, but I really doubt this: a decision like this must be documented. Knowing that the crooks (especially Nicoletti) are both sloppy and impudent, I can thing of the following explanation: seeing the lack of the judge’s attention to the case, as well as the apparent absence of a defendant’s reaction (as the defendant was notified by ISP, he could move to quash the subpoena, pro se or with the help from an attorney), Paul Nicoletti decided to smuggle the initial list in a hope that the judge won’t notice.
If this is the case, then I repeat one more time: troll Nicoletti insulted the judge and attempted to rape the court system. If Judge Tarnow does not admonish the troll (and refer him to the Michigan Bar for investigation), we should expect even more shameless assaults.
Also, I think that Judge Baylson, who presides over the headline-grabbing bellwether trial (same trolls and plaintiffs) in Pennsylvania, must be notified about this event, as I do not believe that Nicoletti acted on his own accord: the Mafioso clan’s “godfather” Keith Lipscomb, if was not the initiator of this particular swindle, at least was certainly informed.
Clarification
These 20 IP addresses are just an appendix to the amended complaint, this is not a motion for a renewed discovery, so one can say that it is not a big deal, and that these addresses were attached for illustration purposes only. Not so simple. Firstly, I never saw this type of “complaint amendment” before: in other cases, if every Doe except for #1 was severed, all the amended complaints I saw would list just this one defendant. So it is an insult and “f’you” to the judge. Secondly, it may be a “camel’s nose in the tent,” and the crook is testing the limits and indeed intends to move for a new discovery. In any case, this is the first time I see this kind of crookery, and wanted to bring some light to it. There is no limit to how low these guys can stoop.
Kudos to innocentbystander in the state discussions for bringing this to our attention.
Big thanks to Raul for the account.
I do think, even without asking for further discovery, that is a major dirty trick. The amended complaint still wants to re-join the defendants and “find them jointly and severally liable for the direct infringement of each other Defendant.”
And it will not look good to a Doe that RFC says they have been added back to the complaint. Let’s also remember that one extra panicky Doe who settles can be several thousand dollars into the troll pockets. That’s plenty to help with expenses even of a failed amended complaint.
It’s easy to imagine the Nicoletti/Lipscomb gang taking this kind of ruling to the other Does, and ramping up their threats. Troll might say in their demand “SEE, the Judge already found you GUILTY. You, Ms. Doe, would have no chance of winning in court.” Further, through Brighthouse’s unwise delivery of information to the trolls, they have Doe contact info already. Even if they are admonished by the not to use this information, trolls can claim they discovered addresses through other means.
Anyway, the Nicoletti/Lipscomb troll gang would gain extra ammunition for their demands, while having a precedent for joinder being re-considered by a court.
Finally, it should be noted that it is no accident that a sneaky underhanded filing was slipped in during a Holiday week, Regular staff equipped to quickly recognize a sneaky maneuver might be away. History has shown that beneficial timing for troll legal actions is not an innocent coincidence.
Update
1/11/13
Wow. I knew that the trolls read my blog first time in the morning, but did not expect one particular scumbag, Paul Nicoletti, to react so quickly. Look at this motion, filed in less than 24 hours after this post was published:
¹ By the way, while the copyright is issued in Patrick Collins’ name, the list of IP addresses states that this copyright belongs to Malibu Media. This is not surprising: such mistakes are inevitable if the same handful of attorneys file hundreds of cases. If it is hard to manage these cases during the filing phase, it is simply impossible to properly litigate them… if they were ever intended to be litigated. Of course, they were not: the sole goal of cases like this is to obtain subscriber addresses and phone numbers for the subsequent acts of extortion.
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.
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.
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.
The title says it all. It was rather unexpected, yet this ordeal over for Jeff and his family, and I’m happy for them. It would be hypocritical not to admit some sadness: everyone hoped for the inevitable (and absolute) victory that would send its healing ways across the country. As a matter of fact, it is a victory to a certain extent. Fantalises advanced further than any other pro se (and not only) defendant and did a Herculean job organizing existing defense ideas and coming up with novel ones. Everyone here thinks they are heroes. And a neat library of examples, ideas and templates does not go anywhere.
Wow! I never saw this coming after the heated week or so of filings from both Kotzker and Fantalis! Simply amazing, to say the least. I have been following this case since the beginning with great interest, read every filing in its entirety, so I am very happy to see this kind of ending.
To be clear, despite not being privy to the terms of the settlement, we can know with 100% certainty they were very favorable to Jeff Fantalis.
Let’s take a look at the facts of the last week and see who was sweating:
Malibu Media was ordered to begin production of documents on November 9 to be completed by November 26, 2012. This includes:
Any documents describing flaws of deficiencies the company uses to identify IP addresses.
ALL communications between Mailbu Media and Lipscomb.
ALL communications between Malibu Media and any “enforcement” trolls.
Retainer agreement between Kotzker and Malibu Media.
Any agreements between Malibu Media, IPP, Tobias Fieser, Brigham Field and Colette Leah. Remember the judge said if it is a contingency agreement, then there will be a problem. Guess what: It’s probably a contingency agreement!
Also remember that the judge ordered Kotzker to send the fee agreement between Kotzker/Lipscomb/Malibu Media to his personal chambers for him to review. Want to guess if there’s something they don’t want the judge to see in there?
Oh yeah, and what about Collette Leah making obviously, provably false statements in a sworn document. I’m betting she never even read the document, signed it, and it was a big shock to her when Lipscomb/Kotzker informed her that she was about to be brought in on perjury charges. Maybe this was the point Malibu Media decided to settle?
Finally, remember that Kotzker admitted he could no longer take on any more cases in CO because litigating this one single case was taking too much of his time. Thus the troll extortion operation in Colorado effectively was about to grind to a halt due to a single doe fighting back.
Or how about Fantalis’ most recent filing, which accuses Malibu Media of double dipping in recovery by collecting more than the maximum statutory limits? Want to guess that they have already been made whole through settlements, and they would like to continue extorting money for the same films which they have already been compensated for?
It’s quite clear that Malibu Media was completely fucked in this case before trial even began. Even though we didn’t get to see this go to trial, we still learned a great deal about Malibu Media and their operation, and how far they are willing to go to prevent ANY trial from EVER reaching discovery, let alone a jury, despite the fact that they demand a jury trial in every single one of their complaints.
Most importantly, when a defender says “The trolls never want to go to trial” the Troll can no longer point to Fantalis’ case and say “Look, this one’s moving along.” Now this is more ammo for the defender who can now say “They had the chance to go to trial, and right when they were forced to produce discovery, they settled. Any claims that they want to litigate these cases are complete lies.”
So I guess our next best hope to see something like this go to trial is the PA Bellwether. Here’s hoping we actually see some discovery there before they settle and dismiss, as we can all expect will happen.
You forgot the comment the judge said where if a jury found any of the films obscene they would not be copyrightable. IMHO, this was huge. Can you imagine if this actually went to trial and the result was they were not copyrightable (what are the chances the jury wouldn’t find them obscene)!? That would be used in every defense going forward. [...]
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:
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:
This motion is a real beauty. Fantalis is basically arguing 3 points:
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.
Plaintiff is dropping charges and changing theories midstream to prejudice discovery proceedings.
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.
By Raul
The following was meant to be an update to the Saturday’s post “Malibu Media’s massive fraud“, but given the update’s size, I thought it would be more reasonable to make a separate post, especially given that the subject is really “a bomb.”
On November 12, 2012 defense counsel, Jeffrey Thennisch, delivered to the doorstep of troll Paul Nicoletti a thermonuclear device cleverly disguised as a motion to dismiss Malibu Media’s complaint (embedded below) coupled with simultaneous applications to the Copyright Office to cancel the copyright registrations of Malibu Media to the 15 registrations at issue in this lawsuit. The motion itself is highly legalistic and technical but it essentially boils down to the fact that Malibu Media has absolutely no legal right to sue for copyright infringement in this lawsuit as its copyright registrations are defective/fraudulent or in Thennisch’s summation:
Brigham Field
…in response to the standing issue raised by the Doe Defendants, the named Plaintiff, realizing the “defect” in the specific Copyright Registrations asserted in this action on June 14, 2012, filed Supplemental Registration Forms CA for “the Works” on September 13, 2012 (see Exhibit C) all based upon a subsequent assignment which now alleges that “the Works” were, in fact, created by a current non-party individual named Brigham Field and transferred through an assignment of copyright to Malibu Media, LLC after the company was formed. Essentially, the named Plaintiff’s response to the standing issue raised by the Doe Defendants was to create and file an “after-the-fact” assignment document before the U.S. Copyright Office in the hopes of recreating standing. However, standing must exist when this action was commenced. Here, the September 13, 2012 document and assignment (see Exhibit 2:12-cv-12586-PJD-MJH Doc # 41 Filed 11/12/12 Pg 7 of 23 Pg ID 499 2D) from Brigham Field to Malibu Media LLC assigns the rights, title and interest in “the works” but does not specifically include any right(s) to sue for past infringements. This is now fatal.
Thennisch further argues that even if this lawsuit is not dismissed it should be put on hold until the Copyright Office can evaluate the validity of Malibu Media’s copyright registrations while invoking the notorious Righthaven litigation:
Perhaps more simply stated, the named Plaintiff, Malibu Media, LLC, filed this case on June 14, 2012 bringing multiple copyright infringement counts against at least thirteen (13) different parties without ever disclosing the fact that the non-party individual, Brigham Field, who we are now told is/was the “real” owner of the asserted rights — “may” have simply assigned such rights to Malibu Media, LLC. This is what the Plaintiff’s own September 13, 2012 documents at Exhibit D clearly state. However, Exhibit D does not include any attempt by Mr. Field to assign or transfer the right to bring such copyright infringement actions from himself, the individual, to Malibu Media, LLC or any other entity. In short, the named Plaintiff does not function as the legal or beneficial owner of any of the asserted rights and simply lacks the legal ability to bring the present claims which Malibu Media, LLC — not Brigham Field — filed before this Court on June 14, 2012. Most notably, “the right to sue for past infringement can be transferred to another party so long as it is expressly included in the assignment along with an exclusive right. Righthaven LLC v. Hoehn, 792 F.Supp.2d 1138 (D.Nev.2011) citing Silvers, 402 F.3d at 889-90. Nothing the Plaintiff has presented includes such a right.
Turning to the requests to cancel Malibu Media’s copyright registrations, there are a lot of fun quotes but this is my favorite is point 1, in which Thennisch points out that the registrations are a “canard” as it is a “factual, legal and metaphysical impossibility” for Malibu Media to be an “employer for hire”. Likewise, Thennisch points out that:
…Malibu Media has filed multiple copyright infringement proceedings throughout the United States against viewers of this “adult” content, as John Doe defendants, to extract settlements based upon issued copyright registrations which defy cognitive comprehension of the Julian calendar. In short, and with great respect, the Library of Congress is being used and pandered as a tool to effectuate the business plan of a pornogragher… the U.S. Constitution deserves better than this.
By last count, Malibu Media has filed 365 lawsuits across the USA in 2012, suing 6,000 individuals (hat tip to Morgan Pietz, Esq., for the figures). Think of the fear, angst and sleeplessness generated by this hurricane of lawsuits. Also ponder the millions of dollars generated in settlements.
But what if it is all a cruel charade with the lawsuits premised on nothing more than a gigantic fraud targeting the American public and the federal judiciary?
Such is the question presently before the Honorable Judge Michael J. Hluchaniuk in the Eastern District of Michigan in the lawsuit entitled Malibu Media v. John Does 1-13 (2:12-cv-12586).
Copyright troll
Paul Nicoletti
This lawsuit was commenced on June 14, 2012, with the filing of a complaint against the John Does for allegedly engaging in the copyright infringement of 15 pornographic movies, of which Malibu Media possessed the exclusive copyrights.
The attorney representing Malibu Media in this lawsuit is Paul Nicoletti¹. Nicoletti moved for expedited discovery to subpoena from ISPs the personal information of the John Does, so that the extortion game could commence, and on July 9, 2012 Judge Duggan granted the motion. Shortly thereafter, on August 17, 2012, defense attorney, Jeffrey Thennisch, filed a motion to quash on behalf of John Doe #11 in which he first pointed out the fraud of Malibu Media (emphasis and link are mine):
Plaintiff’ copyright registrations … list Malibu Media, LLC as the “employer for hire” on all of the allegedly infringed copyrighted works. 14 out of the 15 of the copyrighted works were created and published either in 2009 or 2010. But Malibu Media, LLC was not registered with the State of California and therefor did not exist as an entity which could be an employer, until February 8, 2011.
Likewise, another defense attorney, Hattem Beydoun, filed a similar motion on behalf of John Doe #1 on August 23, 2012, reiterating the fraud:
The Plaintiff believes and asserts that it acquired ownership of the film copyrights as the “employer for hire” … However, this is impossible as the Plaintiff did not exist until February 8, 2011 and all 15 works were published prior to Plaintiff’s date of creation. Therefore, Plaintiff could not have employed anyone to create the films and cannot claim ownership through 17 U.S.C. § 201(b).
The motions were referred to Magistrate Judge Michael J. Hluchaniuk on August 24, 2012 who on October 5, 2012 made an Order for Supplemental Briefing on this issue because:
Doe # 4 and # 11 invite the Court to issue a show cause order requiring plaintiff to demonstrate it properly owns the copyright interests it is pursuing in this litigation. Plaintiff argues it has standing to pursue such a claim while acknowledging there are some “errors” in the copyright registration process… During oral argument on this motion on September 28, 2012, counsel for plaintiff offered to demonstrate any errors in the copyright registration process had been or will be cured while acknowledging that a plaintiff prosecuting a copyright infringement claim must be the owner of the copyright.
Meanwhile, down in Florida, Nicoletti’s master Keith Lipscomb, was trying to paper over the fraud by miraculously locating 2 undated assignments in which the porn creator, Brigham Field, allegedly assigned his interest in the 15 questionable porn titles (amongst other porn titles for a total of 17) to Malibu Media.
Lipscomb also caused to be filed a bunch of Copyright Office Form CAs for Supplemental Registrations which are all dated September 13, 2012, which he hoped was sufficient to make this obvious fraud disappear.
Nicolletti summarized this frenzied activity to the court on October 19, 2012 as follows:
Malibu Media, LLC owns http://www.x-art.com (“X-Art”), a website where subscribers can join and view movies created and directed by Brigham Field. Each of the 15 movies listed on the Complaint can be found on X-Art. Brigham Field co-owns Malibu Media, LLC with his wife Colette. Malibu Media, LLC was specifically created by Brigham and Colette as a limited liability corporation for X-art on February 8, 2011.
Brigham intended for Malibu Media, LLC to own the copyrights for the movies he created and sold via subscription through the X-art website. Because Brigham Field’s current arrangement with the company renders each work as a work for hire, all of the copyrights were mistakenly registered in that fashion. Upon learning of the mistake in the copyright registrations, and realizing that he was the owner of the copyrights and not Malibu Media, Brigham Field, through an assignment agreement, transferred all ownership rights in the copyrights to his company. The transfer was recorded with the United States Copyright Office. ..At the same time, counsel for Malibu Media, LLC filed form CAs with the Copyright Office correcting the registrations. There was a slight delay in filing the form CAs because each form requires a submission of the actual registration certificate. For some of the works, certificates had been misplaced and needed to be reissued, which can take 4 to 8 weeks. Upon receiving the registrations, on September 13, 2012, Malibu Media’s counsel filed the corrections, explaining the error.
There you go! Fraud on the John Does and on the court are nicely swept under the rug, right? Wrong, according to defense counsel, Thennisch, because:
The copyright registrations are defective by reason of the undisputed fact that Malibu Media could not be an “employer for hire” because it did not exist at the time of the registrations.
The Supplemental Registrations are insufficient, as a matter of law, to cure these defective copyright registrations.
The assignments from Brigham Field to Malibu Media did not assign the right to sue for infringements prior to September 13, 2012 and, accordingly, Malibu Media had no lawful right to sue anyone prior to September 13, 2012 much less settle with any of the John Does.
For the sake of argument, assuming the September 13, 2012 Supplemental Registrations cure the defective copyright registrations, Malibu Media had no lawful right to sue anyone prior to September 13, 2012 much less settle with any of the John Does.
This matter is fully submitted and the parties are awaiting Judge Hluchaniuk to make a determination.
It is reasonable to guess that Lipscomb attempted to remedy the fraud and cure the defective copyrights registrations to all of Brigham Field (?) or Malibu Media’s (?) porn titles on September 13, 2012. But what about the in excess of 300 lawsuits filed prior to that date that Malibu Media may not have had the lawful right to file? The millions in settlement monies obtained prior to that date on arguably false pretenses? At the very least Malibu Media is at risk of facing a future class action lawsuit and, at the worse, being subjected to a criminal inquiry. Karma works in mysterious ways.
¹ As tempting as it is to go off on a tangent pointing out Mr. Nicoletti’s colorful history I will refrain. However a cursory Google search will quickly reveal that this copyright troll is atypical in that individuals and entities have questioned his professionalism and ethics prior to his entry into the odious extortion scam known as copyright trolling.
Second Amended Answer; discovery sabotage; hearing on the Motion to Compel
If you follow the news, you certainly know that the people of Colorado have just voted in favor of legalizing marijuana for recreational use. That may help the number one Colorado copyright troll Jason Aaron Kotzker in more than one way:
He finally can legally possess the substance that can boost thinking outside the box and help generating new ideas how to dodge discovery: Kotzker’s outright denial has become boring.
After the hearing on Fantalis’s Motion to Compel this past Monday, Kotzker definitely needs some sweet smoke in order to avoid extra expense on toilet paper (and extra pants).
I’ll talk about the hearing in a while, but first let’s recap what has happened on this case since the last time I posted about it.
Originally Fantalis filed the first version of the Second Answer and Counterclaim earlier in August with some procedural violations (without first filing a motion to obtain court’s permission). Kotzker succeeded in striking this first version (actually, it was a stipulation).
Yet it was a Pyrrhic victory for Kotzker: Fantalis later repeated the procedure, following the rules this time: got judge’s permission and filed a much better document given extra time and a never-ending flow of new information and ideas.
You can skim over other filings, but without reading the Second Answer and Counterclaim you cannot be fully engaged in the discussions. In addition, if you are a defendant in any other copyright shakedown lawsuit, this document is your Holy Book: it lists most of the basic defense ideas, and is written in English, not Legalese. Finally, if you are a casual web surfer, who stumbled upon this blog for the first time, you will find a near perfect explanation of the copyright trolling scam anatomy. While this site (as well as Rob Cashman’s and DieTrollDie’s ones) has a larger mass of relevant information, this information is dispersed over posts, pages and comments. The FAQ was designed to explain troll’s kitchen, but it is admittedly outdated. Given that, I cannot imagine a better “crash course about copyright trolling” than this document:
Unfortunately, because Fantalis is a pro se defendant, he is not allowed to file documents electronically, and therefore all his masterpieces are printed-mailed-scanned, i.e. they are not selectable/copy-pasteable/searchable. I may try to run some through OCR software: I feel a duty to preserve some of these documents for posterity (whatever posterity is) Update: I replaced the embedded document with an OCR’d one, thanks to a good guy who emailed me offering his help.
On 11/02 Kotzker/Lipscomb filed an opposition to this document.
Trolls continue sabotaging discovery
During the phone conference that Judge Baylson had over the Bellwether trial in Pennsylvania, Keith Lipscomb (Kotzker’s “boss” and the extortion scheme mastermind) mentioned this lawsuit as one in a “very advanced stage.” In the post about that conference, I joked that Lipscomb must have meant an advanced stage of discovery dodging. Funny that at that time I did not know the facts described in the following paragraphs yet!
If you look at the barrage of motions, replies, and objections filed at the end of October/ beginning of November, you will understand the full extent of trolls’ despair: they do everything thinkable and unthinkable to avoid answering direct questions. No one is surprised: the truth may be too damning and is capable of not only torpedoing this particular case, but also sinking the entire USS Lipscomb.
On 10/29 Kotzker attempted to delay the procedure and filed his Motion to Modify Schedule (was denied on 11/05).
On 11/02 Kotzker filed for an extension to file his Opposition to the Motion to Compel. Fantalis opposed). Nonetheless, Plainfiff’s opposition was granted on 11/05 during the hearing. I suggest reading the Fantalis’s reply: it called out Kotzker on his obvious sabotage. Fantalis arrived at a simple conclusion that everyone here knows already, he just put it nicely:
It has been Defendant’s position since the very beginning that Plaintiff has neither the desire nor the capability to litigate the case against the Defendant or any of the thousands of other defendants Plaintiff has sued around the country.
On 11/5 Kotzker filed a Motion to Strike Affirmative Defenses. This was clearly a move to try to substantially limit discovery. As discovery may be taken on claims as well as defense, Malibu Media wants to limit Fantalis’s affirmative defense, and hence the discovery associated with it. A really desperate move, and of course Fantalis is expected to file an opposition.
Monday Hearing: good news overall
As I noted earlier, during this hearing, plaintiff’s Motion for an Extension to File his Opposition to Motion to Compel was granted (but read further to understand that it was not that important).
Another motion that the judge has granted was Kotzker’s Motion to Stay Discovery — pending resolution of Malibu’s Motion to Dismiss. It is not an extraordinary ruling, as there is a lot of case law that says that this is an acceptable arrangement. However, the judge only partially granted this motion, and then he went thought each request for discovery and told the plaintiff exactly what it had to produce or answer. That is why the meeting lasted for almost 4 hours.
At this moment you may start thinking that Kotzker had an upper hand, but do not be so quick: the real fun has just started. The following micro-events shaped the hearing, and many things went downhill for the trolls from here:
The Judge got Kotzker to admit “on the record” that an IP address does not equal a human.
Fantalis brought to the Court’s attention that Koztker had missed a ton of deadlines. In particular, Fantalis contested that some of the “handful” of documents turned over by Malibu Media should not have been marked confidential, and Kotzker has still failed to respond, even though the protective order in the case sets a hard deadline. The judge ordered Kotzker to respond by Wednesday or he would entertain a motion to dismiss the case for failure to prosecute. (This is an extreme remedy, especially when Kotzker is in Court for 4 hours and the judge still says he is not prosecuting the case — any attorney in his place would be sweating out gallons hearing that.) When the judge pressed Kotzker about missing so many deadlines, the troll said he would not take on any more cases.
The judge ordered the fee agreement between IPP (a German “forensic” company that harvests IP addresses from Bittorent trackers using super-secret software) and Malibu to be turned over to Fantalis. He said if it is a contingency agreement, then there will be a problem. It is against the standards of professional conduct to share a contingency fee with anyone apart from the attorney or lawfirm. (This could get ugly.)
The judge said that Kotzker’s and Lipscomb’s fee agreements with each other and Malibu Media were likely privileged, but the judge was suspicious enough that he ordered them sent to his personal chamber for review!!! This is huge. I do not remember the exact numbers, but anything past a 30% contingency is considered outside the norm, and anything approaching 40-50% is a big problem. If it is really a 9:1 contingency, it would not only be obviously unethical (and the judge would report it to the state bar), but it could actually be illegal.
Fantalis noted that some of Malibu Media’s responses, signed and attested to by Malibu Media’s co-owner Colette Leah appeared to be false (who knows if she ever really saw them: according to the comment she once left on this forum, she is just a brainless puppet in Lipscomb’s hands). The judge indicated that if defendant could substantiate that the responses were false (which he can and is in the process of doing) then Colette Leah could be brought in on potential perjury charges. At that point, Malibu owners are going to be put under oath, and the proverbial aromatic substance will hit the fan!
The Court directly told Jason Kotzker that if the jury found any of the “works” to be obscene, these “works” would not be subject to copyright protection. WOW. Marc Randazza must be saying some words at this moment: those words that usually cause 99% of normal people instinctively cover their ears.
And the icing on the cake: Fantalis has offered up his computers to Koztker and the judge “Maness style.” Malibu Media failed to take Fantalis up on his offer (surprise!).
Update
At the time of the writing of this post I was aware about Fantalis’s surreply calling out a trolls’ major fallacy: advocating joinder during the mass phase, but shying away from it when it comes to derivative individual lawsuits. I did not want to overburden this post and planned an update. Fortunately, one of the most active and articulate regulars wrote a nice analysis in the comments, which I converted to a post:
