Yesterday a California defendant in Malibu Media v John Doe (CAND 16-cv-01005), via attorneys Nicholas Ranallo and Bruce May, filed a powerful motion for sanctions against Malibu Media and its attorneys Brenna Erlbaum and Brian Heit. The defendant alleged that filing an amended complaint without any evidence to back up its claims is frivolous and runs afoul of the F.R.C.P. Rule 11:
This Motion is made on the following grounds: On June 1, 2016, Plaintiff MALIBU MEDIA filed a First Amended Complaint alleging violations of the Copyright Act of 1976 against Defendant, knowing that Plaintiff did not have evidentiary support for its claims against Defendant, and despite having been advised by defense counsel of the following exculpatory evidence: Defendant denied ever downloading any of Plaintiffs films; a forensic examination of Defendant’s computers found no evidence of illegal downloading; Defendant was out of town on one of the dates in question; and dozens of other people had equal access to the Defendant’s Comcast internet account allegedly used to download Plaintiffs films.
Moreover, the defendant claimed that Malibu’s attorney Brian Heit deceived the defendant’s counsel by continuing to negotiate a possible dismissal while the amended complaint was already filed by Heit’s partner Brenna Erlbaum, which the plaintiff’s attorneys allegedly kept concealing from the defense for more than a week:
Plaintiff and its counsel acted in bad faith by engaging in litigation misconduct. While pretending to consider the exculpatory evidence offered by defense counsel, Plaintiff’s attorneys Brian Heit and Brenna Erlbaum affirmatively concealed the fact that they had already filed the First Amended Complaint, without evidentiary support. The motivation of Plaintiff and its attorneys was to extort a settlement from Defendant for a baseless claim by filing the First Amended Complaint and forcing Defendant to incur the expense and embarrassment of defending a claim of illegally downloading pornography.
I’m a big fan of the Hanlon’s Razor, so, contrary to the defense’s claims of malice, I’m skeptical that Brian Heit even knew that the amended complaint had already been filed, and hence I think he behaved as if it had not. First of all, the complaint was signed by Brenna Erlbaum, and there is a visible break-up between the Heit|Erlbaum partners: yesterday they deleted all the lawfirm’s social media accounts (Twitter, Facebook), and Ms. Erlbaum wrote in July to another defendant’s counsel that “I will no longer be working at Heit Erlbaum LLP.” Second, it is plausible that neither Heit nor Erlbaum file the Malibu Media documents with California courts themselves. This happened with other Malibu’s local representatives in the past. For example, in the course of the infamous Bellwether Settlement Conference, Keith Lipscomb (Malibu’s general counsel at that time) admitted on the record that Malibu’s Pennsylvania local attorney Christopher Fiore shared his ECF login with the troll center and did not control what was being filed on his behalf.
Plaintiff unilaterally dismissed the First Amended Complaint before Defendant appeared in the action, immediately after being served with Defendant’s Rule 11 Motion which demonstrated that the First Amended Complaint was filed without evidentiary support and for an improper purpose. By dismissing the First Amended Complaint in these circumstances, Plaintiff effectively admitted that the pleading had no merit and was filed for an improper purpose.
The defendant was not amused, and concurrently with the motion for sanctions, Ranallo asked the court to award $46,371.41 in fees and $3,020.41 in costs to the defendant as a prevailing party. The defense argued that it is irrelevant whether the dismissal was formally with or without prejudice: what is important is that Malibu cannot sue this defendant again without violating Rule 11.
This case exemplifies what Judge Otis Wright rightly labeled an “extortion scheme.” […] Denying attorneys’ fees to Defendant in these circumstances would allow Plaintiff and its counsel to escape unscathed, free to try the same “extortion scheme” on some other poor defendant. Awarding attorneys’ fees to Defendant would serve the purposes of the Copyright Act.
Yesterday Brian Heit (purportedly himself 1) filed two oppositions: a reply to Ranallo’s motion for sanctions and a reply to Ranallo’s motion for fees (accompanied by Heit’s declaration). In all three (mostly duplicative) documents the troll attempts to weasel out of the situation. Some table-pounding like “defendant liked South Park on Facebook” has already proven to be reckless (for instance, based on Facebook likes, pornographers and their lawyers seriously damaged reputation of a Florida student whose innocence was later proven beyond any doubt). Some instances of the pot calling the kettle black… nothing unexpected.
1 Emilie, haven’t you taught Brian to sanitize PDFs?
Mr. Heit seems to think that this Court should just take his word for it that Plaintiff has an “expert” who somehow ascertained these supposed facts. This exemplifies how Plaintiffs entire litigation strategy is based on junk science and rank speculation. Even if Plaintiff had submitted a competent declaration from its “investigator,” the fact remains that identifying the account holder for a Comcast account accessible to numerous people does not prove copyright infringement by any specific person. The Court should have little tolerance for Plaintiff and its counsel playing fast and loose when making factual assertions in a federal court lawsuit.
This case settled on 10/27. One doesn’t have to be a genius to deduct the direction of the money flow:
Minute Entry for proceedings held before Magistrate Judge Sallie Kim: Settlement Conference held on 10/27/2016. Case settled. Confidential terms of the settlement were placed on the record. Individual parties may only disclose the terms to a spouse, attorney, or accountant. All parties agreed to the terms as stated on the record, including a dismissal with prejudice. Only parties present at the settlement conference may obtain a copy of the FTR recording and/or transcript without a Court order. (SEALED FTR Time 2:30-2:33.) Plaintiff Attorney: Brenna Erlbaum and Brian Heit. Defendant Attorney: Bruce May. This is a text only Minute Entry (mklS, COURT STAFF) (Date Filed: 10/27/2016) (Entered: 10/27/2016)