Guardaley | X-Art

Lipscomb & X-Art have a lot to hide. And a lot to fear

Copyright troll M. Keith Lipscomb sits on damning evidence. It was clear more than a year ago — when he settled with Jeff Fantalis to avoid devastating discovery — after numerous evasive maneuvers. It is even clearer now as Lipscomb continues to try to dodge reasonable discovery requests with childish obduracy.

I talked to some defense attorneys, and many expressed concerns regarding Malibu Media stonewalling reasonable discovery efforts. According to those attorneys’ experience, the extent of resistance is uncommon given the nature of the requested documents.

The only plausible explanation of this unusual stubbornness is the following: Lipscomb’s shakedown enterprise is built upon lies, and calling those lies out constitutes existential threat to the extortion racket.

Embedded below is a motion to compel Malibu Media to respond to discovery requests filed by a defense attorney Jonathan Phillips in Malibu Media v. John Doe (NDIL 13-cv-06312) on January 7.

Evasiveness
Copyright troll
Mary K. Schulz

First, Philips describes his futile effort to contact plaintiff’s attorney, a Lipscomb’s local in Illinois, Mary K. Schulz in order to address inadequate responses to his earlier discovery requests:

Lead counsel for Doe, Jonathan LA Phillips, has repeatedly attempted, in good-faith, to reach opposing counsel via telephone for a discussion to resolve the current dispute. Doe framed the issue in a written letter, and then repeatedly attempted to reach opposing counsel for personal consultation regarding the same. To date, Doe has received no response of any kind despite Attorney Schulz, in the meantime, issuing discovery in this case and filing at least six new cases for Malibu.

As a matter of fact, Schulz filed 21 case, not 6, on January 7. Schulz’s behavior exhibits not only chronic lack of ethics, but utter unprofessionalism. Add two recent sanctions imposed against this attorney, and it will be clear that she is a “great” litigator to hire.

Also, read Phillips’s letter to Schulz, where he calls out contradictions in Plaintiff’s answers to interrogatories (remember Mark Twain’s “If you tell the truth, you don’t have to remember anything”?):

What truths do trolls want to hide?

This motion addresses two major pieces of information that Lipscomb doesn’t want to share. There are many smaller issues, but these two are critical.

1. IPP International: plaintiff’s “expert”

Malibu repeatedly refuses to turn over information regarding IPP International UG’s investigation of Doe, and “other peer infringers,” due to burden and confidentiality concerns.

The bullshit justifications behind these refusals are not surprising. The actual reason is simple: trolls are scared to uncover the methodology employed by amateur foreign “investigators”: IPP is in fact an alter-ego of infamous German troll Guardeley, and its methods had been found flawed by a Berlin court. The software they use is an open-source Shareaza, hastily modified by a script kiddie. In addition, there are more and more suspicions that IPP actually creates honeypots by seeding the movies in question.

Being open and upfront regarding the methods is a prerogative of a professional and honest investigator. Just compare the artificial opaqueness of IPP to openness of Delvan Neville’s affidavit in a Prenda case.

2. Payment agreements

It is not a secret that any copyright trolling enterprise is run by “forensic experts” and lawyers. Plaintiffs are at the bottom of the food chain. Indeed, a popular radio host Adam Curry claims that X-Art’s owner Brigham Field admitted that he receives only 10% cut of the extortion proceeds. Yet this fact is not supported by public documents yet. This is why it is imperative to beat Lipscomb’s resistance and uncover the financial dirty laundry.

Answering to the questions about how IPP International is being paid, the plaintiff replied:

Pursuant to an oral contingency fee agreement, IPP International UG is entitled to a small portion of the proceeds from the resolution of this case in consideration for the services it provided.

Are you kidding me? A lawyer engaged in an “oral contingency fee agreement” with a critical party of a multi-million shakedown business? This assertion is an insult to the intelligence of the defendant, the lawyer community and the judge. Hence, Phillips argues:

IPP International UG is a “fact witness” who is being paid pursuant to an “oral contingency fee agreement.” Exh. E, p. 2, Resp. 1. No reason is provided why IPP’s compensation information is confidential. In fact, to allow an expert witness’s fees to not be released would deprive the jury of the ability to judge credibility. Further, Malibu has not provided any proposed protective order, even if it were protectable. With no reason provided, Malibu has refused to disclose the percentage, or amount of proceeds, it will receive from this case.

Another financial-related issue is the amount of settlements collected for a particular copyrighted work. No matter how draconian statutory fees are, they cannot pile up indefinitely, and a rights holder can only collect one per movie. Not surprisingly, Lipscomb fights tooth and nail in order to conceal the amount of money he stole from the population as it may prove the suspicion that he is milking the same cheap porno flicks over and over again.

I hope that a bogus confidentiality concern won’t fly with the judge, as

With regards to confidentiality of its proceeds from cases involving the same peer infringers as disclosed in its Rule 26(a) disclosures, Malibu objects, stating, “Each of the settlement agreements contains a confidentiality clause which prohibits Plaintiff from disclosing the doe defendant’s name and the terms of the Agreement.” Exh. F, p. 3, Resp. 4. Malibu complains that disclosure would “spawn an avalanche of irrelevant litigation.” Id. Doe’s defense against a $3.6 million dollar suit simply cannot be handicapped by agreements that Malibu made with third-parties. Further, Malibu’s settlement agreements are unenforceable under Seventh Circuit law and contrary to public policy. Union Oil Company of Cal., 220 F.3d at 567 (“Calling a settlement confidential does not make it a trade secret, any more than calling an executive’s salary confidential would require a judge to close proceedings if a dispute erupted about payment…”). If there truly needs to be an avalanche of litigation, Malibu is simply having to lie in the bed it has made.

Exhibits:

  • Exhibit A: Letter explaining position on each objection sent to Attorney Schulz by email. Letter informed Attorney Schulz when to expect call.
  • Exhibit B: Email follow up to telephone call to Attorney Schulz. Set a new time for call and asked for notice if the time was not convenient.
  • Exhibit C: Email follow-ups to telephone call to Attorney Schulz. Set new time for call and asked for notice if the time was not convenient. Email referenced severe weather and offered one additional call. Second email noted that Attorney Schulz was able to serve discovery, but would not take discovery dispute calls.
  • Exhibit D: Email follow up to Attorney Schulz discussing no voicemail pickup, and inviting a call back.
  • Exhibit E: Plaintiff’s Responses to Defendant’s First Set of Interrogatories.
  • Exhibit F: Plaintiff’s Responses to Defendant’s First Set of Requests to Produce.
  • Exhibit G: Plaintiff’s Fed. R. Civ. P. 26(a) Disclosures.
  • Exhibit H: Plaintiff’s Response to Defendant’s Firt (sic) Set of Request for Admissions.
More efforts are underway

While I was concentrating on one particular motion to compel, it is not the only effort to force Lipscomb/XArt/IPP to reveal their shady dealings. In INSD (Malibu Media v. Harrison — DieTrollDie covered this case in detail), Gabriel Quearry filed a similar motion (and a supporting brief) as a result of Lipscomb’s/Nicoletti’s attempts to dodge the discovery. Interrogatory and discovery questions here are slightly different from those in Phillips’s motion, which makes me happy that many legal minds work independently to topple the troll.

I believe I saw more efforts of this kind, and I will update this post once I find the documents.


It is quite clear to me that earlier or later Lipscomb will fail under the weight of his own hubris. Avoiding a disaster in the Fantalis case and acquiring a false sense of invincibility from the mock Bellwether trial led Lipscomb to believe that he can always outfox both the system and all the other attorneys. Or, at the very least, he can buy his way out.

While the latter may be true, and I won’t blame a Doe who accepts a sizeable chunk of money to put all the dirt behind him, the former is an illusion: things have changed, and now there are many intellectually and ethically superior attorneys who genuinely want to exterminate the vermin that caused the legal plague of copyright trolling.

Update

1/23/2014

Initially hearing was set to 1/15/2014, but for some reason was continued to 1/22/2014.

On 1/22/2014 Judge Brown granted defendant’s motion to compel, which is a very welcomed news. Congratulations to Jonathan Phillips!

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Discussion

15 responses to ‘Lipscomb & X-Art have a lot to hide. And a lot to fear

  1. The judge should tell Lipscomb if he wants $3.6 million dollars, he will have to earn it. But we already know he will settle before this goes to trial.

    Judging by the photo, Shulz is a troll from Wisconsin that never learned how to use a phone.

  2. When I first read the answers that Troll Schulz provided (Exhibit H), I was shocked she would put name to such a document. Seeking millions of dollars ($1.5K per infringement) from a defendant and your response/answers is barely 4 pages???….. Even if you take into account that Malibu Media may consider some of the information privileged, the responses to most of the requests are seriously insulting to the court and the defendant. Either Troll Schulz truly doesn’t have a clue about these cases (how the infringement happened, the background/technical details, & what they mean.) or she is simply a tool of Lipscomb and this business model. I personally think it is a combination of both.

    Response 1 & 3.
    Troll Schulz denies that the public IP address is the only thing their investigation disclosed prior to filing the complaint. Fair enough, they probably also recorded the BitTorrent client used (software and version), the “Exhibit C” file lists (associated to the IP address and BT client), Location of the IP address (geolocation), ISP that owns the net-block the IP is part of, and other information primarily tied to the IP address. If that is so, respond with such information.

    Response 5.
    Here Troll Schulz objects because it poses a hypothetical situation and asks Plaintiff to speculate. What about “Response 2.,” where Plaintiff has no problem speculating they will show by a preponderance of evidence that Defendant was the infringer. The only thing “Request 5.” asks is if no evidence is found on Defendants system/equipment (showing BT usage/infringement), nobody in the household admits to it, or identifies the infringer, they may never know who did this. I hope they don’t think “Exhibt C” on its own is a preponderance of evidence.

    Response 7.
    This answer is another said joke (actually a lie IMO). Malibu Media/Troll Lipscomb knows that there have been criminal cases where a subscribers WiFi Internet connection was used by a neighbor (subscriber didn’t know it was happening) to download child porn. The police executed a search warrant and found the subscribers were not at fault or involved in the criminal activity. Hell, Lipscomb could simply do a search on my site and find a couple cases – and don’t tell me you don’t stop by on occasion. A big successful law firm such as his would have NO problem finding such cases.

    Response 8.
    Another said denial – various Malibu Media/X-Art movies are out on porn tube sites. Yes they are not the high-def content of the BT downloads, but they are still the same movies. Do you think Malibu Media would not go after people who were seeding low-res versions of their movies via BT???

    Response 11.
    This was a truly laughable response. The Defendants asks if they do any financial calculation as to the earning potential of the defendant over a 20-year period. This question is likely to determine if Plaintiff’s efforts are focused on “Who can pay,” verses stopping the piracy of Plaintiff’s movies. The funny part of the response is Troll Schulz claims they cannot even do this prior to the complaint being filed – only knows the public IP address. True, but they didn’t ask if it was done prior to the complaint filing. Is it done at all – after they obtain the ISP subscriber information? I will bet you they do. How else are you going to effectively negotiate with a defendant when they claim they don’t has the money or assets to pay a settlement??? Would they want to know if a defendant/family has a $85K a year income, a $250K house??? Verses an individual making minimum wage at McDonalds??? And to claim this response is a privileged “work product.” For shame!!! I have no doubt that troll Lipscomb and associates tailor their efforts to get the most money for their efforts.

    One part of attorney Phillip’s letter to Schulz (Exhibit A) that was a delight to read was – “I am seeking the raw data and a copy of the software IPP uses.” A copy of IPP software! I bet that gave Troll Lipscombs the shivers. 🙂

    As I have stated with 6881 Forensics (Prenda), if the BT monitoring software and people running it are found to be lacking/substandard, it will kill cases at the early stages and make things much harder for the Trolls. Keith Lipscomb made a big deal in the PA Bellwether trial about truth and why they do not fear it – time to put your money where your mouth is Keith.

    “But as the evidence will show here today, while plaintiff the burden of proof, plaintiff had a huge advantage, the truth. And as Edward Counsel said, “Truth is both arms and armor.”

    As for arms Malibu Media’s allegations are true. As far as armor, Malibu Media fears no attack because it comes to court with clean hands, knowing its actions are legal and its fight against online piracy is righteous.” [Page 16 – Bellwether Trial Transcript, ECF #205, 2:12-cv-02078-MMB]

    DTD 🙂

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