Guardaley | X-Art
Defense attorney asks to sanction Malibu Media and Mary Schulz for unethical witness’ contingency interest
In my previous post, speculating on why Lipscomb/X-Art have been fighting nail and tooth to dodge the discovery, I mentioned Lipscomb’s admission that Bittorent “forensic expert” IPP International is paid “pursuant to oral contingency fee agreement.” I mocked the “oral” part, which does not pass the smell test: give me a single example when an attorney “orally” agrees with a critical entity in a case involving millions of dollars. I did not corroborate the “contingency” piece. Today a defense attorney Jonathan Phillips filed a motion to bar testimony of IPP and for an order requiring Malibu to show cause why it and its counsel should not be sanctioned. And “contingency” is at the heart of this motion:
Malibu Media, LLC (hereinafter “Malibu”) makes use of a contingent-fee witness who unlawfully engages in private detective operations in the State of Illinois. The blatant ethical violations by Malibu’s counsel in allowing such behavior are compounded by the likely violation of the Federal Antigratuity Statute by counsel or Malibu. For these reason, IPP should not be allowed to offer any testimony in this case. Further, Malibu should be ordered to show cause why Malibu and Attorney Schulz should not be sanctioned for the abusive litigation tactics that resulted in the vexatious multiplication of these proceedings.
Phillips sites a vast case law on the issue, yet even without diving into the depths of Legalese, any layman can understand the simple and intuitive basis of the issue: incentivizing a witness by offering a percentage cut of the shakedown proceeds is unethical to say the least:
To begin with, it is a violation of federal law, punishable by imprisonment, to offer to pay for testimony. 18 U.S.C. §201(c)(2). If done “corruptly,” there is also a violation of §201(b)(3) of the same statute. Such testimony is patently against public policy. Hamilton v. General Motors Corp., 490 F.2d at 228-229. To allow such testimony into this tribunal would be manifestly unjust. At this time, it is not known whether Attorney Schulz, Malibu, or some other unidentified third-party is paying for the testimony, but it remains unethical and illegal. For this reason, the testimony should be barred.
American Bar Association’s Rules of Professional Conduct also unambiguously prohibit this type of behavior:
A lawyer shall not […] falsify evidence, counsel or assist a witness to testify falsely, or offer an inducement to a witness that is prohibited by law;
In addition, Phillips argues that IPP evidence is also inadmissible because the very status (or lack thereof) of IPP (as a licensed detective agency) runs afoul of the Illinois 225 ILCS 447/5-10 statute:
(a) It is unlawful for a person to act as or provide the functions of a private detective, private security contractor, private alarm contractor, fingerprint vendor, or locksmith or to advertise or to assume to act as any one of these, or to use these or any other title implying that the person is engaged in any of these activities unless licensed as such by the Department […].
Finally, the defendant alleges that “The entirety of this litigation is abusive,” and “regardless of merit, all activities in this case are sanctionable as harassment.”
Undeniably, these alleged blatant violations of ethics, law, and common sense hygiene warrant sanctions. And sanctions are requested:
[…]JOHN DOE subscriber assigned to IP Address 24.14.81.195 respectfully requests that this Honorable Court:
A. Issue an Order barring any and all testimony and evidence from IPP International U.G., aka IPP Limited, or any of its employees, agents, contractors, or owners, in these proceedings;
B. Issue an Order requiring Malibu Media, LLC to show cause why it, and its counsel, Attorney Schulz, should not be sanctioned for their respective activities and behavior;
C. If such sanctions are awarded, issue an Order requiring Malibu Media, LLC or Attorney Schulz to pay the costs, including attorney’s fees and expenses, for all unreasonably and vexatiously multiplied proceedings, to wit, the entirety of the case after early discovery; and
D. Any other relief this Court deems equitable and just at this time.
Exhibits:
- Exhibit A: Plaintiff’s Responses to Defendant’s First Set of Interrogatories.
- Exhibit B: Plaintiff’s Fed. R. Civ. P. 26(a) Disclosures.
Defense attorneys mostly abandoned motions to quash subpoenas because those motions were rarely granted. Maybe this new approach will breath a new life into the MTQ practice: in my opinion, ex-parte discovery based on information obtained unethically (or even illegally) should be quashed easily.
Update
01/15/2014, by Raul
Phillips has made a very similar move in INSD (Malibu Media, LLC v. Tashiro, 1:13-cv-00205) with a motion in limine to bar the testimony of IPP and a motion to impose sanctions on Lipscomb”s local troll, Paul Nicolletti, noting that:
Likewise, this is hardly Attorney Nicoletti’s first turn to sanctionable conduct. For example, in Prud’Homme v. Katzman, Attorney Nicoletti appealed the trial court’s order awarding Defendants $5,000.00 for the filing of a frivolous lawsuit No. 188674, LC No. 95-021074-CK (Mich. Ct. App. 4th Dist. Mar. 7, 1997) (unpublished), attached as Exhibit A. The Appellate Court affirmed, stating that “Notably, there was evidence that plaintiff’s counsel put forth his estoppel theory after defendants’ counsel had pointed out the deficiencies in the initial complaint.” Id. at 2.; Only a few years later, in Ansley v. Conseco Fin. Serv. Corp., et al., Nicoletti was sanctioned for putting forth a frivolous defense. No. 323266 (Mich Ct. App. Dec. 17, 2002) (unpublished), attached as Exhibit B. It is respectfully submitted that Attorney Nicoletti is lacking in credibility to assert that he would not vexatiously or unreasonably multiply proceedings, or engage in abusive litigation.
Fight © Trolls 
This might be the case where Lipscomb/Shulz drop all pretenses of civility and do a full Prenda.
Hope this post gets lots of views by Doe Defenders as it is the best offensive move I have seen in a very long time.
Yes, this strategy is promising. Happy to see trolls are attacked from different fronts. Stalingrad kettle. Pietz advances on the 2257 flank, and Overhauser has an interesting strategy too. Will write about it tomorrow.
i’m looking forward to seeing these guys fall very far. thanks SJD!
We’ve mentioned this idea before, it is nice to see it taking root into something.
One also wonders if anyone has ever seen an IPP contract, wondering if it has the same honeypot clause as Guardaley.
Wouldn’t that dampen the spirits of MM.
They didn’t even dwell on another issue: the primary reason for picking a foreign investigator is to make a deposition too difficult and expensive to contemplate. Picking a tiny, unknown company (probably one or two guys working a sideline business out of their homes) is part of that strategy.
So Colette Fields, aka Leah, aka Pelissier could be facing some prison time. Who could have ever predicted this? LOL
The unethical relationship between lawyer filing lawsuits and Guardley, UK is what drove both of them into bankruptcy. It’ll be very interesting to see Lipscomb try to weasel his way out of this pickle.
Phillips has made a very similar move in INSD with a motion in limine to bar the testimony of IPP AND a motion to impose sanctions on Lipscomb”s local troll, Nicolletti, noting that:
“Likewise, this is hardly Attorney Nicoletti’s first turn to sanctionable conduct. For example,
in Prud’Homme v. Katzman, Attorney Nicoletti appealed the trial court’s order awarding Defendants $5,000.00 for the filing of a frivolous lawsuit No. 188674, LC No. 95-021074-CK (Mich. Ct. App. 4th Dist. Mar. 7, 1997) (unpublished), attached as Exhibit A. The Appellate Court affirmed, stating that “Notably, there was evidence that plaintiff’s counsel put forth his estoppel theory after defendants’ counsel had pointed out the deficiencies in the initial complaint.” Id. at 2.; Only a few years later, inAnsley v. Conseco Fin. Serv. Corp., et al., Nicoletti was sanctioned for putting forth a frivolous defense. No. 323266 (Mich Ct. App. Dec. 17, 2002) (unpublished), attached as Exhibit B. It is respectfully submitted that Attorney Nicoletti is lacking in credibility to assert that he would not vexatiously or unreasonably multiply proceedings, or engage in abusive litigation.”
Docket is here: http://ia601608.us.archive.org/33/items/gov.uscourts.insd.44724/gov.uscourts.insd.44724.docket.html
Thanks, Raul, I updated the post.
Any news on today’s hearing? There was a hearing today at 2PM
I’ll ask Jonathan Phillips. I don’t expect an answer till late night though: most likely he is driving back to Peoria from Chicago.
Can we get a full write up on this because here it comes… HERE COMES THE BOOM:
ORDER entered by the Honorable Geraldine Soat Brown on 1/22/2014: Motion hearing held. For the reasons stated on the record, Defendant’s Motion to Compel 24 is granted in part and denied in part, as outlined herein. Defendant’s Motion to Bar 27 is taken under advisement. By 2/5/14, plaintiff shall file a response to that motion, and, if plaintiff seeks protection for the allegedly confidential materials ordered herein to be held “attorneys’ eyes only,” plaintiff shall file a motion for protective order with supporting evidence and authority, including addressing the issues discussed herein. Plaintiff’s failure to file the motion will be deemed a waiver of any claim of confidentiality. Defendant’s reply in support of his Motion to Bar and opposition to plaintiff’s anticipated motion for protective order shall be filed by 2/19/14. In those filings, all references to the specific terms of any agreement with IPP International UG shall be redacted from the publicly filed version, with an unredacted version filed under seal, pending the disposition of the anticipated motion for protective order. Plaintiff shall serve verified supplemental interrogatory answers and produce responsive documents by 2/5/14. Status hearing set for 3/19/14 at 2:00 p.m. [For further detail see attached order.] Notices mailed by Judicial Staff. (psm, ) (Entered: 01/23/2014)
Yesterday I wrote a short update here: it features the actual order. Too busy at the moment, but maybe I’ll go paragraph by paragraph.
Can we get an update on this? Filed 2/12/2014 “MEMORANDUM by Malibu Media LLC in Opposition to motion to bar”
Filed 2/7/12 “MOTION by Defendant John Doe for order to show cause why Malibu Media, LLC should not be held in contempt”
I’ve having trouble accessing these docs
I’ll post an update when I have a chance. Motion to show cause can be found here (Exhibit A). Yesterday’s memorandum is sealed (an identical motion was filed in INSD, Toshiro case), but you can imply what it is about from the exhibit names. Cornered hyena hisses:
I was able to access the documents.
Malibu says that IPP doesn’t need to be licensed in IL because “Neither
operates in Illinois. Neither has an employee or agent in Illinois. Id. Neither conducts business
in Illinois. Id”
The INSD case with Tashiro is getting interesting. Judge granted telephone deposition of husband and 4 neighbors. 3 of the. Have already been served and will be deposed on 2/25 and 2/26. Looks like defendant is willing to take this to the end and Nicoletti is as well. Could be a defining case but I can’t imagine what Tashiro must be going through now that neighbors are involved as well.
Hope this plays out to the end, but my guess is it will be settled with both party bearing their own cost. IMO, the defendant’s lawyer really went for the Nicoletti’s jugular and he had no choice but to fight back. Wonder if Lipscomb is helping out at all seeing Nicoletti is really a one man firm. His daughter was actually working there too (not only as an intern as the linkedin profile suggests) last year after her Cooley law graduation. Surprisingly (or maybe not so), if you look for Amanda Nicoletti, her linkedin profile starting Jan 2014 has her working as an Underwriter II in Shore Financial Services. Last year, she’s a “lawyer” specializing in copyright laws and infringement but no longer appearing as her experience. Instead choosing the path of dear old mom and pop in financial where old pop was entangled in the title closing business where he was used by Fifth Third for mortgage fraud. The irony. I mean would you as a financial company hire the daughter of a man, lawyer no less, who may have knowingly broken the law? Of course Nicoletti is quick is point out he counter-sued Fifth Third for $50 million dollars. Who js right, who is wrong? Who knows for sure since suit was dismissed in this particular case. But unfortunately for others involving Nicoletti, not so. Just take a look at findings from the Tashiro case as well as on ripoffreports. There is a woman and her family there literally stalking Nicoletti online where he goes.
Defense’s efforts are tainted by the allegations of spoliation, which are, if true and proven, will cause a serious damage. Paige affidavit has gaping holes though: he is not an expert if he makes very ignorant statements (I don’t want to give ammo to the scumbags by explaining).
Regardless, look at Tashiro’s twitter account: this family is an average hardworking suburban household, and our jaded pornographers and greedy lawyers have absolutely no humanity because of the attempts to ruin this family.
SJD, based on what you said, it is surprising this case went so far as compared to the other typical Nicoletti case. If the family doesn’t have much money, I see them settling a long time ago and Nicoletti would have accepted it and move on to bigger fishes. The fact that he pushed on, perhaps as I said, maybe defence went after Nicoletti and now it is a pissing match as well as see who blinks first. However, I won’t be surprised if Tashiro settled with Nicoletti accepting pennies on the dollar on the side but with the stipulation defendant admits guilt, have judge award $2250/file similar to Bellwether just to have another notch under his belt to further intimidate others.
Looking at her case, she’s still one of those with Exhibit C which was striken. Actually, having Exhibit C could prove beneficial because plaintiff claims 100% accuracy. My Exhibit C is clearly wrong. Even working under the assumption, I have a BT client installed, the stuff shown in Exhibit C clearly shows a profile of someone else. We all know Lipscomb and Schultz have tried to defend Exhibit C as a way to further proof the guilty party with such things as sports related download, games, books (perhaps language to indicate ethnicity) etc. My Exhibit C if I have to profile someone, shows the infringer ad someone in their 20-30s, plays lots of Windows games, love young genre sitcoms and in general a Windows users (tons of Windows EXE file).
I’m sure even if I am much older , don’t care for any of the shows (my Netflix and Amazon Prime video viewing habits clearly indicates what genre movie/tv shows I’m into – being both Netflix and Amazon Prime subscriber way before the suit date), don’t have a PC (last computer purchased was an iMac in 2009), no way they can find a Windows registration at Microsoft (unlike the Doe at Bellwether), and not a computer gamer in any sense. Even so, plaintiff would argue spoliation I’m sure.
Anyway…
If plaintiff claims 100% accuracy, then I would imagine a lawyer can simply find one item out of the hundreds of items listed in Exhibit C that is so improbable that the judge would have to suspect the accuracy of their tracking software.
Futhermore, I willing to bet the first infringement noted is well after the first item in Exhibit C. Basically, Malibu Media did not hire IPP to investigate, instead malibu media merely shops for this info (my hypothesis), and IPP is too lazy to properly provide a “clean” Exhibit C by simply matching the first date of infringement. Rather they prob felt more the better.
There are a few cases my district where the judge allowed 3rd party supoena but for the first time, the judge is forcing the info to be turned over to him. Once the judge has the info, he told Nicoletti to not contact the defendant, but gave him the name and told him he must amend the lawsuit and file suit against the Doe now that he is known within 5 days. Nicoletti just ignores it and let it go.
This case:
http://www.rfcexpress.com/lawsuits/copyright-lawsuits/michigan-eastern-district-court/602399/malibu-media-llc-v-john-doe-subscriber-assigned-ip-address-98-250-79-56/summary/
Wow, I’m left speechless after reading the latest on Tashiro case. First, we all know the infamous Feiser declaration where Tobias Feiser claims he downloaded “bits” and actually watched each and every claimed infringement videos. How he’s able to watch every single video to make the determination is unclear. He must be a superhuman rather than the obvious rubber-stamping campaign.
Anyway, here’s defendant’s response to the original motion to bar IPP’s testimony. To be clear, cases filed in 2011, 2012, 2013 have mostly included IPP and Feiser Declaration (in some cases, it was another rubber stamping by another individual). Most MTQ claims that IPP is not a licensed private investigator and even Plaintiff lawyers have stated even though IPP is not licensed, no implied license is needed (false!) because IPP is not based in US, and have no business presence in each of the states it is bringing suit. Now, here comes Nicoletti with this new revelation.
Shock! What’s up with the Feiser declaration then?? It was based on this Feiser Declaration that he is an employee of IPP, whose company was contracted by Malibu to track copyright infringements, and he indeed download some “bits” and watched videos. His own declaration “I viewed each Movie side-by-side with the corresponding digital media file …”
So, now instead of Feiser, we get a patzer (pun intended). Even if Patzer designed the software to be used, shouldn’t it be the person who was actually used the software be deposed to ensure he did it correctly? It is almost like a robber buys a gun, goes rob a bank, and the prosecutor wants to question the gun maker instead of the robber.
Clearly (my opinion), IPP wants a bigger piece of the pie and Malibu simply feels it is better to have a patzer (pun intended) locally to do the dirty work. Still, it is not clear if Patzer merely provided the hardware/software for companies like IPP who then uses it to search out infringements, OR is Patzer already automatically track each and every torrent from popular torrent sites and simply storing the data to be “purchased” by IPP?
1. The Motion was brought because of Malibu’s clear and unequivocal statements that IPP INT UG, a/k/a IPP International UG, f/k/a “IPP, Ltd.” and its agents were going to testify as to the investigation of Tashiro’s IP address (ECF Doc. 59-1,p . 1-2, 59-2, p. 1), combined with the facts that IPP was being paid pursuant to a contingency fee agreement (ECF Doc. 59-1) and was operating unlawfully as a private detective in this state. (ECF Doc 59, p. 7). At the time the Motion was brought, Malibu had been less than forthright with the facts surrounding the investigation, but since some of the fog has lifted, continuing forward with the Motion appears counter-productive.
2. Since the Motion was filed, Malibu has peeled off another layer of the mystery as to how its business-litigation model proceeds forward. Suddenly, Malibu has disclosed that Mr. Patzer is actually responsible for the software being run on IPP’s servers. (ECF Doc. 73, p. 7). This is in contravention of the Declaration of Tobias, which stated that he
Case 1:13-cv-00205-WTL-MJD Document 94 Filed 03/11/14 Page 2 of 2 PageID #: 805
monitored the BitTorrent network and “effectuating” the investigation. (ECF Doc. 3-2, ¶¶ 6, 12). Tashiro was moving forward in this case based upon the clear and unequivocal statements of this declaration, and elsewhere.
3. Indeed, even upon providing corrected Rule 26 disclosures, Malibu failed to identify Mr. Patzer. (ECF Doc. 64-4). In fact, Mr. Patzer has not been disclosed in any expert witness disclosure.
4. Accordingly, based upon the current understanding of Malibu’s approach to this litigation, and after layers of obfuscation have been peeled away, it appears (although not disclosed appropriately) that Mr. Patzer will be testifying to the matters that were the subject of the Motion. Thus, there is no need to waste Tashiro’s resources, or the resources of this Court, barring testimony that Malibu has stated will not be put on by IPP or its representatives.
WHEREFORE, the Defendant, KELLEY TASHIRO, withdraws her Motion to Bar Testimony
of IPP International UG (ECF Doc. 58).