Prenda

Is Prenda winding down? Not until its principals are in jail

In a recent appeal to the U.S. Court of Appeals for the Ninth Circuit, Paul Duffy wrote:

Prenda Law is currently winding down its operations and is in the process of dismissing its remaining cases pursuant to the instructions of its clients [sic]. In some instances, the requests for dismissals are being opposed, resulting in delays and ongoing law and motion proceedings that have precluded Prenda Law from completely ceasing its operations.

Fortunately, everyone, including judges (well, except some either lazy or gullible ones), takes these words with a grain pound of salt. Whom do you want to deceive, Paul/John/Paul? Bullshitting a Court of Appeals is a very good idea. Go on, we are ready for an illustrious show.

So, while a San Diego law firm Klinedist has been doing its best to avoid unavoidable — a total destruction of SS Prenda — in a joke of a court that is located in St. Clair County IL, a brand new shake-down campaign is underway. Unbelievable chutzpah. In this judicial stinking hole, where even the chief judge is seemingly in bed with Prenda (Judge Baricevic signed a carte blanche “agreed order,” the document that no self-respecting judge would even consider signing), a new lawsuit/petition was filed on April 15: Peg Leg Productions v. Charter Communications. Who are the signers? Paul Duffy and Kevin Hoerner. Of course.

 

I don’t want even try to go into this garbage petition’s details, it is too obvious what’s going on here.

So, what the hell is “Peg Leg Productions”? A painfully familiar name offends our sight once again:

 

Let’s reiterate the dates (I’ll omit many secondary events: refer to a titanic job by John Henry, who organized all the events in a nice timeline):

  • April 2: Prenda principals plead the Fifth declining to answer questions about the bogus corporations and their roles in those corporations.
  • April 15: A new lawsuit/petition Peg Leg Productions v. Charter was conceived in a scandal-rigged St. Clair County court.
  • May 6: Fleet Admiral Judge Otis Wright slammed his massive hammer on the Prenda player’s heads.
  • May 28: An entity that managed to file a lawsuit 1.5 months earlier was finally created: Lutz & [unborn] Sons as a CEO.
  • June 14: In an “emergency” motion, ostensibly Paul Duffy stated that “Prenda is winding down its operations.” And please, John Steele, don’t insult judges’ intelligence once again, bullshitting that Lutz’s funny businesses are independent from Prenda; that you, Hansmeier, Prenda, and Lutz have nothing to do with each other.

I must give a credit to some sense of humor our crooks have shown: referring to a stereotypical pirate attribute is funny, and at the same time is an unambiguous hint to who is the actual pirate.

Update

6/17/2013

Today Morgan Pietz filed his response to Prenda’s “emergency” appeal that incorporates the same findings that are the subject of this post. I’m happy to note that Morgan came to the same conclusions: he illustrated that despite Duffy’s claims (made under oath), the stubborn facts do not corroborate those claims.

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Discussion

40 responses to ‘Is Prenda winding down? Not until its principals are in jail

  1. 1. Neither Prenda nor any of its henchpeople have anything pending before the CA Supreme Court or any California state court to my knowledge (although Gibbs and Duffy presumably will soon be required to answer to the California State Bar Court). The Ars Technica article you linked to correctly identified Duffy’s “emergency motion” as being directed to the U.S. Court of Appeals for the Ninth Circuit.

    2. Prenda’s henchpeople are its “principals” not “principles.”

  2. To add another layer of confusion the petition states that Peg Leg Productions is incorporated in Delaware and it was incorporated there on 1-30-13.

        • Whatever the case may be, it only matters if the issue is properly raised in the proceedings. In the answer, you simply state that can’t confirm or deny their statement regarding plaintiff being a Delaware corporation, then you ask for their corporate records, certificate of good standing, etc. in a request for document production. You probably don’t waste an interrogatory on it, since if they can’t produce the necessary corporate records, you can always motion for leave to file supplemental interrogatories on their corporate status and affiliations based on what you find (or don’t find) in the documents.

          In this case, it might not even get that far since they don’t specify what computer system was “hacked” or unlawfully entered. Just reading the pleadings, no defendant could know what website or computer system was “hacked”, so how can they defend themselves? Without that, a court could find that there is no prima facie showing — they haven’t plead all the elements necessary to state a proper complaint under the statute and could dismiss the complaint under rule 12(b)(6). This would most likely be without prejudice.

          However, Prenda (or whoever they claim to be in this case) doesn’t care whether this case ever gets past the initial filing. They’re looking for quick discovery order.

          What intrigues me about this one, though, is that they named an actual defendant (the ISP) rather than just the Does. If the ISP fights back, then “plaintiff” can amend their complaint to include the name of a hastily created password protected website., but I don’t see how they get their discovery en masse, given recent cases on joinder in similar cases (this seems weaker to me than in the bittorrent cases, because you can at least use the word “swarm” in those — it doesn’t mean much but has a better “ring” to it if you’re trying to convince non-technical person of the facial validity of the theory).

          If I had to guess as to how this would come out (not account for the looming sanctions shitstorm that’s looming over the various “players”), they might be able to get the name of the ISP’s subscribers that are within the court’s jurisdiction one by one. If those “does” start getting harassed for bittorrent downloads, a whole new batch of potential sanctions arises… and they just rinse and repeat under new names until the whole thing eventually bites them in the ass.

          Of course, none of this is a solicitation to provide legal services or is legal advice.

  3. Is this the part in the movie where the slightly unhinged vet runs into the room screaming “KILL IT, KILL IT WITH FIRE ITS THE ONLY WAY TO BE SURE!!!!!”

    So if Peg Leg didn’t exist when it brought the first lawsuit, shouldn’t it be tossed?
    Or are they just going to open multiple Peg Legs to keep people guessing.

  4. And Peg Leg merely licenses the content, so this is all CFAA claims. So this is the “hacking” version of the pay us or we tell people you like porn.
    I didn’t read far enough but whats the name of the website…
    they managed to screw up where their company is founded, did they forget to register a website for people to allegedly hack?

    • They didn’t name a website or anything. All they said was that usernames/passwords to their protected site were shared somewhere, and people used those to gain access to their content. In addition, they claim that the system was damaged, they put “hacking programs” on the servers, and gained access to “real customers” financial information. And of course, said there was a “civil conspiracy” to destroy their site basically.

      After all that, they simply put a list of nearly 1,000 IP addresses with a timestamp and a bunch of articles about anonymous and random hacking rings attacking banks and stuff. Because that is pertinent and all…

      No name of the website, no information about which does used what usernames/passwords, what content they stole, what programs they used, etc, etc. Nothing. I truly am shocked that Duffy signed this and that Peg leg is registered with Lutz – you would think after the shitstorm, they would know better to simply hire a different lawyer to sign it and pay a different corporate representative to use their name…

      • We discovered that one of the prior websites was run from a Comcast router, IIRC.
        Once again we have courts taking the word of lawyers are fact, even lawyers and principles who are facing charges of fraud upon a Federal Court.
        Hopefully someone who is targeted will give Judicial notice to the Judge “overseeing” this case and ask them why claims with no supporting evidence are accepted as fact.
        There would be no reason at all for the court, all the Does can claim innocene and the court should weigh that just the same.

  5. Peg Leg Productions LLC is registered in Delaware. I think SJD maybe was using the wrong search site. I wonder why it is also registered in Florida, too. FWIW, Delaware is known as a good state for corporations, for example, Google is a Delaware corp, despite being decidedly Californian.

    • OK, I don’t have time to dig deeper now, so I removed the Delaware part for the time being. Will revisit this part later. I have a gut feeling that a Delaware corporation is a different one.

  6. How can we tell who they are really after?

    I am a charter customer, but have only used BitTorrent to download Debian ‘Wheezy” / Fedora 16 and such ( GNU/Linux Distros ). And yes, the ISP has me on DHCP for connection.

    Can I get a log of IP Addresses issued to me from Charter?

    Or is this an attempt to find and locate blog readers / authors using criminal law?

    This is going way to far ….

    • That’s a question to Charter, they are one call away I suppose. I heard that other ISPs (don’t remember which) give this information to their customers.

      • Thanks for the response SJD,

        Called Charter Customer Service.

        Got two conflicting answers :

        1 : According to ‘Tech Support’, no logs of Residential Service ( DHCP ) IP Addresses are stored.
        The Business Accounts are issued Static IPs. A ( log / record / hosts file ) does exist for them.

        2 : Told to call Corporate Office / Legal, need a court order to get that info even for a customer requesting records of only IPs issued to the requesting customer. Was given an Out-Of-Service phone number for the Corporate Office.

        I hope that answer #1 is correct. It means this case will go to /dev/null fast.

        Is the EFF aware of this filing? This is one of their reform causes ( CFAA abuse ).

  7. It’s possible to have two independent corporations in different states, with the same name and same ownership. That might be worth something if you’re intending to confuse people, but not much. More common is that you have one business *incorporated* in Delaware, and then you *register* the same business in your home state. Incorporation in Delaware is the goal; home-state registration is a requirement of the home state. (In most states it’s possible to reverse the order: create the business in your home state, then incorporate in Delaware and transfer the business to the Delaware corporation and wind down the home-state one. That’s a common pattern when the business starts out unincorporated, but it’s normally a waste of time and money to incorporate twice. (Unless there are tax games to play, but that doesn’t seem likely in the case of Florida + Delaware.)

    • We still don’t know if Delaware’s corporation is Prenda’s. For example, here is a company(?) with the same name that obviously does not have anything to do with Prenda (thanks to Moe for the find).

      I don’t know how to learn who are the officers. I do know that this information is public, but not sure if Incorp (registered agent) is willing to share it for free. My hands are full, but I will appreciate if anyone tries to inquire.

  8. Anyone else confused by the glaring omission of the alleged websites name from the filing?
    They passed around user ids and passwords and this caused us huge damages…
    and some people installed programs on our site that did more damage.
    And anything else we can think of under CFAA.

    And here are several stories about Apple and real companies being hacked with inflated damages alleged to make ours look legit.

    We knew they were trading login ids on our systems, and never did anything to disable to logins for this period of time for known shared account details.

    Ummm yeah.

    • TAC,
      That is the M.O. for these “hacking” cases. I’ve noticed that they never include the names of the website or the files that have allegedly been distributed.

      SB

      • I’m not TAc, but my opinion is the following.

        There was no “hacking,” “intrusion” etc. whatsoever. It’s all fiction. No “protected systems” exist, never existed. All the IP addresses are the result of a swarm harvesting (after seeding). They cannot pursue copyright claims in a corrupt state court, thus they invented something that would fly on the state level. This is the only reason why it is CFAA — to keep cases under wraps in cronyism-plagued, corrupt St. Clair court.

        • I’ve not read it but isn’t CFAA a Federal Law which like Copyright Law requires a Federal Court?

          • Both: it does allow state level private action. Copyright, on the other hand, is unambiguously federal subject matter. As a matter of fact, Jason Sweet argued in the Lightspeed v Smith case that CFAA is bogus, and only a facade for underlying copyright case. Prenda was furious and fought this argument as hard as it could (yet of course Prenda’s big league geniuses are amateurs compared to Sweet, Ranallo, Pietz).

          • So without having to show that you have a real business, you can pursue claims of damage against your business.

            I guess they have managed to find yet another set of laws that allows for all sorts of abuse of the system.

      • So claims of a website can not be verified.
        One wonders if its another super duper website running off of a Comcast router.

        Is there a server farm/colo facility in that section of IL?

        Well they are all about the you “hacked” us, not the you “stole” content. Your hacking of using a login and password that worked in the system caused so much damage to the system.

        This claim has lots of problems that a court should force them to address before proceeding.

  9. So they no longer upload bits and pieces of their own works. Now they spread their own passwords around so that people will use them. Then they claim catastrophic damage to their systems.

    Face it, the internet is huge. You’d have to know exactly where to go and what to do to get what you want. The victims in the case were baited because that’s all the Prenda Parties know how to do.

    You set the trap and wait. If any of these guys had a real job they’d be out of work in no time.

  10. It is time for a counter suit. They admit that with no more information than a shared username and password the users were able to get not only to the movies that they are providing, but other users data and personal information. Obviously they did not show due diligence in protecting the users information.

    Of course you still have the problem of trying to figure out what website it is, and finding at least one legitimate subscriber to represent.

  11. Thinking about peg legs, I recollected a great story by a Czech genius Jaroslav Hašek (from his masterpiece Good Soldier Švejk)

    “About the Great Silver Medal for valour which at the beginning of the war was conferred on a cabinet-maker from Vávrova Street at Vinohrady, Mlíčko by name, because he was the first in his regiment to have his leg torn off by a shell. He got a peg leg and began to boast about his medal everywhere and to say he was the first and very first war cripple in the regiment. Once he came to the Apollo at Vinohrady and had a row with butchers from the slaughterhouse. In the end they tore off his peg leg and clouted him over the head with it. The man who tore it off him didn’t know it was an artificial one and fainted with fright. At the police Station they put Mlíčko’s leg back again, but from then on he was furious with his Great Silver Medal for valour and went and pawned it in the pawnshop, where they seized him and the medal too. He had some unpleasantness as a result. There was a kind of special court of honour for disabled soldiers and it sentenced him to be deprived of his Silver Medal and later of his leg as well…”

    “How do you mean?”

    “Awfully simple. One day a commission came to him and informed him that he was not worthy of having an artificial leg. Then they unscrewed it, took it off and carried it away.”

  12. Giving the complaint a quick once over; this looks like pretty much the exact same complaint as filed in the Spencer Merkle and Stacey Mullen cases. I guess if it ain’t broke don’t fix it, it doesn’t much matter much to them in the end if the complaint is valid or not if they get the names behind those IP addresses to send out a fresh batch of letters.

  13. I doubt this emergency stay will be successful, much like Pretenda’s last try at this I am sure they will be told to go thru the proper procedures and courts. This filing and Hansmeier’s I think were like Pretenda’s attempts at filing in multiple courts the same cases in hopes that something works, which is what we have with these two motions in different courts

    I think they know there stay has next to know chance of happening , so they had Hansmeier make a pathetic attempt to avoid any more sanction penalties. Pietz has played his cards very well, Prenda Got caught with it pants down in Judge Wrights court and they got spanked. Judge Wright smacked Prenda good with his order and sanctions expecially the costs just below what an appeal would cost ( love his sense of humor) once Judge Wright had Prenda take the fifth in his court Pietz had them.

    Steele’s fragile ego took a major beating in the press and he couldn’t handle that or all the heat, hence why they tried to put up this so called bond ( I am still a tad skeptical about what they really put forth to get this bond, I would be there is something that doesn’t look right there) Judge Wright’s order stating they had to work out stipulation of the bond requirements was perfect, who didn’t know they wouldn’t comply.

    Pietz email chain to work the details of the bond requirements to go forward in posting and getting him in agreement with the Prenda gang to go forward was a brilliant move by Judge Wright. Pietz got Steele’s ego all in a fluster and Duffy’s as well.

    The fact that almost everyone with team Prenda chose not to communicate with Pietz on the requirements ( except Gibbs of course) shows just how much Team Prenda is all still acting as one. Duffy did the communicating for everyone ( sans Gibbs) and his little temper tantrum reply to Pietz and then his bone headed fake spam e-mail rejection proved to only prove Pietz point about the stipulations for the bond and then why they should be re-enforced and a second amount added to the initial amount.

    Steele’s over inflated ego and Duffy’s brilliant manoeuver now have them on the hook for 238k LOL
    Pietz has played this perfect and Steele, Duffy and Hansmeier have walked right into the trap Pietz has laid.

    Now Pietz still has them on the ropes, and they are taking the hits hard, they still face a huge fincial penalty further sanctions and a date with the 9th circuit court of appeal, who love to ask questions and with the Prenda gang I am sure they are going to have a ton of them.

    The prenda gang sure seem to want to avoid Judge Wright and they are trying but looks like they aren’t going to escape him just yet.

    I sure wonder what the IRS Criminal Division thinks of all this especially with Duffy saying Prenda is winding down operation on it’s clients orders, so where did that money from the settlements go that was in Prenda’s account. You know the one where Hansmeier stated in his deposition that the client received no money and Lutz, never took any money and Prenda paid no money out to anyone, it stayed in the account for future litigation…So consider they are pleading poverty, where did that cash go… should be interesting to hear what the answers will be to the IRS.

    • You wrote “Pietz has played this perfect and Steele, Duffy and Hansmeier have walked right into the trap Pietz has laid.” I don’t agree with that characterization as I don’t see that Pietz has laid any trap. As far as I can see, he is playing this straight. “Laying traps” is something you do when you don’t have your bases covered and are in a losing position. Chess masters don’t work with traps: they don’t rely on their opponent making a really bad move by accident. Instead they work towards a situation where only bad moves are left.

      This is the end game. Unless somebody gets really tired, nothing surprising will happen any more. In chess, Prenda would already have given up, by far the most common ending of a chess game. Theoretically, you can’t worse than lose in a chess game, so hanging on at least costs you nothing. In practice, it costs you one of your most important resource, self-esteem.

      This looks like it is going to cost Prenda quite more than their self-esteem, but they are still at it. And it does not look like Pietz would lose attention in the end game.

  14. IIANAL, and I’m somewhat puzzled. Once Peg Leg discovered the multiple use of no-longer-secure ID/passwords coming in from IP addresses all over, didn’t they have a responsibility to try to mitigate their losses/damages by killing the ID’s being abused and going back to their original owners ? Isn’t “failure to mitigate” an affirmative defense ?

    • Peter,

      IANAL. The following response should not be construed as legal advice.

      Here is a link explaining some common copyright infringement defenses. http://www.unc.edu/~unclng/copyright-defenses.htm

      IMHO, “failure to mitigate” damages defense would not be as cogent nor convincing as “patent misuse/implied license.” The latter theories would be more effective at having the case thrown out entirely, while the former can be used to argue against the damages threshold of $5K in CFAA civil suit.

      These current events in courtrooms across America are indicative of our broken and antiquated IP laws!

    • Of course it’s an affirmative defense but talking about defenses at all is misunderstanding the fundamental nature of this extortion scheme. Going to court at all means you’ve already lost a great deal more – legal fees, sleep, reputation, etc. – than you’d lose just paying their nuisance value settlement. Which is why tens of thousands of these suits later, you can count the people who have done it on one hand.

      • Anonymous,

        I agree that using an affirmative defense is an admission and mitigation, but that’s the only way one could recoup legal fees and countersue for damages.

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