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Archive for the ‘Federal Judges’ Category

ID-100157775Image courtesy of @artur84 / FreeDigitalPhotos.net

Much of the bittorrent world is saddened by the leaked news reports of the recent “Bellwether” case in the Eastern District of Pennsylvania (Malibu Media v. John Does, Case No. 5:12-cv-02088) where at least one defendant is reported to be facing close to $112,500 in damages plus attorney fees for the peer-to-peer downloads he is said to have taken part in. The plaintiff attorneys, along with Keith Lipscomb and others who have a vested interest in seeing bittorrent cases against internet users succeed are drinking champagne and celebrating their victory.

It is both my professional belief and my personal conviction that copyright trolling lawsuits are wrong, and while there is nothing illegal in suing a defendant for copyright infringement, doing so in my opinion is unlawful and morally corrupt. These lawsuits are nothing more than a STAGE SHOW to permit a behind the scenes SHAKEDOWN of accused interent users, whether or not they actually participated in the accused infringement. For G-d’s sake, the “guilty” so-called “criminal” defendant merely clicked on a link, and downloaded a title that was openly shared with thousands of other downloaders. To hit that defendant with a shock lawsuit where they face $150,000 statutory damages for a video that could have been purchased for a few bucks is a disproportionate punishment for the “crime” of downloading copyrighted films. Rather, instead of suing downloaders and letting the piracy continue, why not just end the piracy problem by issuing a DMCA take down notice to the bittorrent tracker? The alternative of sitting in bittorrent swarms and employing tracking software to track the IP addresses of who is downloading to me just seems like an abusive step to what would otherwise be a simple problem of making the torrent files go away so that unsuspecting downloaders couldn’t click on the links.

It is my conviction that copyright infringement lawsuits are wrong because it is simply immoral to shake down EVERY John Doe Defendant (yes, each one) with the threat of having to defend a lawsuit in federal court unless they cough up tens of thousands of dollars for downloads that the John Doe Defendant often did not even take part in. I have personally seen copyright trolls such as Malibu Media, LLC take large sums of money from defendants who did not do the download, but who were pressured into settling simply to avoid being named in a lawsuit. It is no secret that defending a case is sometimes significantly more expensive than settling a case.

Yet even with the pending resolution of this lawsuit, accused defendants across the U.S. in their own lawsuits should understand that this ruling will not be binding on other federal courts in other federal districts. Each federal court makes their own rules as to what constitutes copyright infringement, and what evidence is required to prove a defendant guilty when the so-called infringement happens via a bittorrent download. This is our job as attorneys — to know which districts have rules in favor of bittorrent users, and to know which districts have ruled in favor of the copyright holders. No doubt, the Eastern District of Pennsylvania will now become a favored spot to sue internet users accross the U.S. for copyright infringement.

Lastly, on a personal note, this case does not change the way a lawyer handles copyright infringement cases. At least in our Cashman Law Firm, PLLC, there is no silver-bullet approach — some defendants choose to settle, and many do not. Considerations as always involve 1) whether the download actually happened and the circumstances surrounding the accused activities, 2) the accused defendant’s willingness to fight and defend a copyright infringement lawsuit, 3) the accused defendant’s aversion to risk of having their name become public knowledge in a court proceeding, and 4) the accused defendant’s financial ability to take each of the various pathways we suggest.

In sum, not all guilty defendants settle, and not all non-guilty defendants fight.  It is simply a calculation and a risk assessment that is based on the client’s desires, the federal district in which the lawsuit is filed (taking into consideration past bittorrent cases filed in that jurisdiction), the judge who assigned to the case (taking into consideration his past rulings), and the plaintiff attorney (or more frequently, the local counsel’s) proclivity towards naming, serving, and taking defendants to trial balanced with their willingness to negotiate an amicable settlement should we decide to go that route.

Bittorrent cases [in their current form] have now been around for three (3) years, and now we have a verdict where a case has been taken to trial — by Malibu Media, LLC surprisingly enough.  When we started, there were no cases taken to trial, and now there is one.  Before the appearance in 2010 of the bittorrent cases, all we had to go on were the old Napster and Grokster cases, combined with the various lawsuits filed by the RIAA / MPAA and miscellaneous copyright infringement files dealing with the internet. Up until now we have been developing case law surrounding peer-to-peer downloads as each case matures. Now we are starting to get some clarity as to the law surrounding bittorrent use.

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Reblogged from Fight Copyright Trolls:

Click to visit the original post

We have been waiting for this moment for a long time. Congratulations to everyone involved, especially Morgan and Nick.

Media coverage

Read more… 480 more words

Sometimes there are no words other than silence to best express the thoughts I have about Judge Wright's order essentially referring John Steele and the Prenda Law Inc. gang to the IRS' Criminal Investigation Division (CID) for all the settlements on which no taxes were paid. There is one police agency that a criminal organization does not want to be contacted by, and that is the CID. The $81K in sanctions essentially funds the lead attorneys who spent time on this case. And, the referral to the bar associations means that the principals at Prenda Law Inc. may no longer have their law licenses shortly. In sum, there is not much for me to comment here, except to be silent, because the judge's order itself says all it needs to. Copyright trolling may seem profitable for the attorneys filing the lawsuits, but no money can compensate for the loss of freedom that one experiences when what was once a multi-million dollar law practice lands the principles in prison for tax evasion. This should be a lesson to all other copyright trolls out there. Judge yourselves accordingly.

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The Divide - New Copyright Trolls
For those involved in the R & D Film 1, LLC  cases across the US, I wanted to give you a heads up as to the “state of affairs” of those cases.

I have been watching R & D Film 1, LLC (a.k.a., “R&D Film 1“) since they began suing defendants for downloading the copyrighted title “The Divide.” [Whether they themselves have made ANY ATTEMPTS to take down the offending torrents using tools provided to them in the Digital Millennium Copyright Act (DMCA) is not the topic of this article.] 

R&D Film 1 lawsuits showed up in July, 2012, and now 37 weeks later, I am surprised they are still alive.

DRAMA IN THE EASTERN DISTRICT OF MISSOURI

The R & D Film 1, LLC v. Does 1-35 (Case No. 4:12-cv-01743) case has shaken a few people up, because it is unclear which defendants were dismissed, and which were named and served.

In January, Judge Jean Hamilton invoked Federal Rules of Civil Procedure, Rule 4(m), which gave R & D Film 1, LLC 120 days to name and serve defendants. As you know, this is a tool judges have at their disposal to dispose of cases which get stale — they are not forced to dismiss stale cases. This deadline according to the judge’s calculations passed on 3/29/2013, but according to the plaintiff attorney’s calculations, it passed on 4/9/2013.

On 4/11/2013, the judge issued an “Order to Show Cause” why this lawsuit should not be dismissed, plaintiff attorney Joel Samuels responded, “but judge, we DID name and serve certain defendants,” and then Samuels dismissed everyone else [Does 1,6,8,9,10,11,12,13,14,30, and 35] without prejudice. Obviously we haven’t seen the list of who was “named and served,” but I must believe that Samuels wasn’t lying to the judge. That would be a bad idea.

So this case is still in play, and our firm is watching it carefully because what happens in one R & D Film 1, LLC case affects their other cases. Of note in Missouri — these cases are beginning to age, and I suspect more judges will be imposing FRCP Rule 4(m). Already, in EACH OF THE CASES, the other plaintiff attorney Matthew Cutler has filed a “Request for an extension of time to name and serve defendants,” which have been granted by the respective judges. In his next round of requests, they may not be so forgiving.

CASES FILED BY MATTHEW L. CUTLER OF HERNESS & DICKEY IN THE EASTERN DISTRICT OF MISSOURI:
R & D Film 1, LLC v. Does 1-33 (Case No. 4:12-cv-01741)
R & D Film 1, LLC v. Does 1-39 (Case No. 4:12-cv-01742)
R & D Film 1, LLC v. Does 1-35 (Case No. 4:12-cv-01743)
R & D Film 1, LLC v. Does 1-14 (Case No. 4:12-cv-01754)

WESTERN DISTRICT OF WASHINGTON: NO DRAMA.

As you know, on January 8th, 2013, Richard Symmes sued a total of 315 John Doe Defendants in Washington. I wrote about it here in my “(WAWD) R&D Film 1, LLC hires Richard Symmes to file against 315 Defendants” article.

In the R & D Film 1, LLC cases in the Western District of Washington, the story is the same for all the cases. Judge Lasnik has taken over all the cases, and he has allowed R&D Film 1 to serve the ISPs with subpoenas. At this point I have no indication as to whether Judge Lasnik is actively copyright-troll friendly or whether he is simply unifying the proceedings and allowing all cases to proceed.

Interestingly enough, all the defendants appear to be Comcast subscribers, and notwithstanding the Six Strikes System (not to confuse Ira Siegel/CEG-TEK’s “CopyrightSettlements.com” system and the lawsuits of the copyright trolls), Comcast is forwarding the subpoenas to their subscribers. The problem is that all defendants here are IN WASHINGTON (meaning, jurisdiction is fine), so everyone calling me is asking about a motion to quash, but quashing is not the answer since they live in the state in which they were sued.

CASES FILED BY RICHARD SYMMES IN THE WESTERN DISTRICT OF WASHINGTON
(ALL ALIVE AND WELL):

R & D Film 1 LLC v. Does 1-46 (Case No. 2:13-cv-00050)
R & D Film 1 LLC v. Does 1-45 (Case No. 2:13-cv-00051)
R & D Film 1 LLC v. Does 1-41 (Case No. 2:13-cv-00052)
R & D Film 1 LLC v. Does 1-22 (Case No. 2:13-cv-00053)
R & D Film 1 LLC v. Does 1-51 (Case No. 2:13-cv-00054)
R & D Film 1 LLC v. Does 1-50 (Case No. 2:13-cv-00055)
R & D Film 1 LLC v. Does 1-44 (Case No. 2:13-cv-00056)
R & D Film 1 LLC v. Does 1-16 (Case No. 2:13-cv-00057)

ILLINOIS NORTHERN DISTRICT — “IN AND OUT” LIKE A BANDIT:

In the Northern District of Illinois, R&D Film 1 plaintiff attorneys Michael Hierl and Todd Parkhurt are literally “making away like bandits” with their quick “in-and-out” strategy in the courtroom.

As soon as either of these lawyers get the subscriber information from the ISP, they hit the John Doe Defendants, and they hit them hard, soliciting a number of settlements. As soon as they reach a certain pre-determined number of settlements, they immediately dismiss the case and get out of the court as quickly as possible. No judge oversight — they are “in and out” like a flash before any judge notices what they’ve done.

This is the same pattern for EVERY ONE OF THEIR CASES.  I have left my notes next to their cases (below) because I thought the pattern was telling of their strategy.

CASES FILED BY TODD S. PARKHURST & MICHAEL A. HIERL OF HUGHES SOCOL PIERS RESNICK & DYM LTD. IN THE NORTHERN DISTRICT OF ILLINOIS:
R & D Film 1, LLC v. Does 1-52 (Case No. 1:12-cv-05810) closed 4/4
R & D Film 1, LLC v. Does 1-20 (Case No. 1:12-cv-05817) closed 4/11
R & D Film 1, LLC v. Does 1-57 (Case No. 1:12-cv-05821) closed 4/17
R & D Film 1, LLC v. Does 1-62 (Case No. 1:12-cv-05822) closed 4/10
R & D Film 1, LLC v. Does 1-36 (Case No. 1:12-cv-05823) closed 4/18
R & D Film 1, LLC v. Does 1-88 (Case No. 1:12-cv-05825) not yet dismissed; last hearing was supposed to happen on 1/23. didn’t.
R & D Film 1, LLC v. Does 1-29 (Case No. 1:12-cv-05827) closed 4/17
R & D Film 1, LLC v. Does 1-20 (Case No. 1:12-cv-05828) closed 4/18

R&D Film 1, LLC v. Does 1-37 (Case No. 1:12-cv-09036) Still alive; Judge Matthew Kennelly denying motions to quash. Status hearing held and continued to 6/4/2013
R&D Film 1, LLC v. Does 1-92 (Case No. 1:12-cv-09039) Still alive; Status hearing held on 3/19/2013 and continued to 4/23/2013.
R&D Film 1, LLC v. Does 1-103 (Case No. 1:12-cv-09041) closed 3/20
R&D Film 1, LLC v. Does 1-66 (Case No. 1:12-cv-09043) Still alive; ORDER granting motion for leave to take discovery prior to Rule 26(f) conference.

NEW JERSEY DISTRICT — ALL CASES “DEAD”

New Jersey is where copyright troll cases die a quick death. If you remember, all of the Century Media, Ltd., Baseprotect UG, Ltd. cases, along with all of Jay McDaniel’s bittorrent cases were in NJ and they are now dead.

All the New Jersey R&D Film 1, LLC Cases were assigned to Judge Noel L. Hillman and referred to Magistrate Judge Ann Marie Donio. They have dealt all cases (below) a swift death by requiring that local counsel Stamatios Stamoulis explain to the court why each of these cases should not be SEVERED AND DISMISSED for improper joinder.

Essentially, these cases will fail because New Jersey does not buy into the “bittorrent swarm” theory that every downloader was part of the “same transaction or occurrence” as is required by the Federal Rules of Civil Procedure.

CASES FILED BY STAMATIOS STAMOULIS IN THE NEW JERSEY DISTRICT:
R & D Film 1, LLC v. John Does 1-28 (Case No. 1:13-cv-00482)
R & D Film 1, LLC v. John Does 1-103 (Case No. 1:13-cv-00483)
R & D Film 1, LLC v. John Does 1-104 (Case No. 1:13-cv-00484)
R & D Film 1, LLC v. John Does 1-105 (Case No. 1:13-cv-00485)
R & D Film 1, LLC v. John Does 1-31 (Case No. 1:13-cv-00486)
R & D Film 1, LLC v. John Does 1-28 (Case No. 1:13-cv-00487)

NOTE: NJ’s Dragon Quest Productions LLC v. John Does 1-100 (Case No. 1:12-cv-06611) will be affected (and likely killed) as a result of this as well.

In sum, it’s a battle ground, and R & D Films 1, LLC (sometimes spelled R&D Films 1, LLC in the case filings) is fighting to gain as many settlements as is possible. The fact that an Eastern District of Missouri attorney told the court that he named and served defendants indicates to me that R&D Film 1 is willing (maybe) to pay their attorneys to take this fight to the discovery level, if the copyright troll attorney is up for the challenge. Some clearly are not.

PERSONAL NOTE: I am waiting to see whether people were actually named and served (or not); I assume the lawyer’s statement is true because a lawyer would never lie to a court, would they? (#Prenda)

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While the Cashman Law Firm, PLLC and its clients were celebrating “freedom,” I am sure some of my readers will be wondering the fate of Prenda Law Inc. / Steele Hansmeier, PLLC / John Steele / Paul Duffy / Mark Lutz / Brett Gibbs et al. after their hearing today before Judge Wright.  Today was the big day where the world of those who have been injured by Prenda Law Inc.’s activities looked on to see their demise.

In sum, the hearing was short, and John Steele and his “gang” showed up as they were ordered to, but they decided to plead the Fifth Amendment to the United States Constitution rather than answer Judge Wright’s questions.  As a result, the judge did not allow them the pleasure of “pleading the fifth” as he appears to have no interest in lawyer gamesmanship.  Thus, after 12 minutes, he walked off the bench and ended the hearing.

While there was no immediate gratification for those who flew over to attend the hearing, in my opinion, “Popehat” described their fate better than I ever could:

“Prenda Law may still be standing. But it’s dead.”

I would be very surprised if I saw any further activities coming from this law firm. I expect that in a few days (if not sooner), Judge Otis Wright will write an order which will make any copyright troll shake in their boots, and it is my hopes that this order will serve as a warning shot to any of the other copyright trolls who go after individual downloaders using the tactics and corporate structures that Prenda employed.

It is my opinion (although I *am* still cautious until I actually see Judge Wright’s order,) this will likely be the end of Prenda Law Inc., John Steele, and Paul Duffy, as I expect that this will evolve into inquiries which will endanger their law licenses. I don’t think we’ll see the end of them, per se, as it is not so difficult to find a hungry lawyer who will agree to have his hand held while he lets others practice under his law license in the shadows.

On the other hand, I believe the result of this case (and Judge Wright’s influence over the the future penalties of unlawful copyright enforcement tactics) will force the bittorrent cases to evolve from its current state (which comprise mere pre-trial settlement “or else” tactics) to actually taking clients to court on the merits.  Also, while the inquiry in this case surrounded plaintiff copyright trolls who “invent” corporate figureheads, who seem to falsify copyright assignment documents, and who structure their business tactics to allow their activities to proceed with limited affects on the attorneys furthering their scheme) no doubt, this will be a damaging blow to those copyright holders who try to enforce their copyrights against individual downloaders.

Articles on the topic:
Forbes: Porn Copyright Lawyer John Steele, Who Has Sued More Than 20,000 People, Is Now The One In Legal Trouble

ArsTechnica: Prenda lawyers take Fifth Amendment; judge storms out: “We’re done” — Those in attendance describe Judge Otis Wright as “incandescently angry.”

TechDirt: Team Prenda Shows Up In Court, Pleads The Fifth… Angry Judge Ends Hearing In 12 Minutes

TorrentFreak: Prenda Copyright Trolls Plead the Fifth

Fight Copyright Trolls (SJD): Prenda trolls appear in Judge Wright’s courtroom only to plead the Fifth. Furious judge ends the hearing after 12 minutes

Follow-Up Articles:

ArsTechnica: Judge smash: Prenda’s porn-trolling days are over

Popehat: Prenda Law’s Attorneys Take The Fifth Rather Than Answer Judge Wright’s Questions

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A number of interested readers have wondered what my opinion was about Monday’s sanctions hearing against Prenda Law Inc., Brett Gibbs, John Steele, Paul Hansmeier, and the others [Case Cite: Ingenuity 13 LLC v. John Doe, Case No. 2:12-cv-08333, in the California District Court (Case Documents "Recap'd" here)]. Quite frankly, I read the #Prenda Twitter stream throughout the day just as many of you did.

Up front, there were some pretty good articles on the event, and as far as I am concerned, there is nothing substantive that I can add to what has already been written. I advise anyone affected by the AF Holdings, LLC cases (or any of Prenda Law Inc.’s so-called “trusts”) to read the following articles:

IN ORDER OF APPEARANCE:

In sum, it is my opinion that whatever the result, there was a lesson taught — that copyright trolls are not “above the law,” so to speak. As far as the effect of Monday’s hearing, we will not know the effect until we read Judge Wright’s order (which we do not expect to see for a few days). However, as for the applicability, the ruling will apply nationwide, and no doubt every court which hears their cases will probably receive a copy of the order.

There is a lot of mention of “trusts” when it comes to the Steele|Hansmeier organization.  I have a “love-hate” relationships with trusts. They form a wonderful legal alter-ego function when it comes to protecting assets and benefiting third party beneficiaries. However, in scenarios like this, I believe they are tools to break the law and hide from responsibility. The problem here is that I’m not so sure Steele and Co. could pull off having a trust without it being broken by the courts.

From what I have read, it is my opinion that there is too much involvement in the trust by all parties, and putting it simply, keeping the classic definition and rules of a trust, I’m not sure they’ve done it in a way which could withstand scrutiny. For example, I’m not sure who the grantor is, who the grantee (receiver of assets) is, and for which beneficiary or purpose was the trust formed. Are there any documents relating to the formation of the trust?  Are there any filings anywhere relating to the trust?  Also, who is the trustee who is in charge of directing and managing the funds of the trust? I would be worried of the parties mishandling the movement of the funds (the trust assets), and this is where they may get busted for playing the trust game… not to mention that I hear that nobody has filed taxes on this income and all the members are U.S. citizens? I can’t believe no taxes have been filed or paid, because if not, the IRS would be after them for tax evasion (and I have heard nothing of the sort happening).

As far as the Hansmeier deposition that nobody gets paid and that every lawyer gratuitously works for free without receiving an income, I call BS on that statement. It appears to me that he is playing semantics with the term “income” according to the tax code, and he can get in trouble the way he has maybe misused the term. No lawyer, as wonderful as any of them might be, would work for “no income.” Even Brett Gibbs. I assume there is some foreign trust account set up for each of them into which funds get deposited on a regular basis. And, those “offshore trusts” need to pay taxes just like any other legal entity.

My sadness from Monday’s events stem from the fact that Steel/Hansmeier/Duffy clan staying out of court was a very smart move. By staying as far away from the court as possible, Judge Wright was unable to swear them in, and he was unable to take their [what would likely have been incriminating] testimony. If he sanctions them, if he orders a bench order for their arrest (not likely), or if he does something to them, from a distance [and out of jail], they can easily appeal any order the judge makes, essentially eviscerating any legal authority Judge Wright may show.

I mentioned to a few other lawyers how queasy attorneys get when a judge speaks strong words. However, we all have been watching these cases for almost THREE YEARS NOW (come June), and I have never seen a judge do any damage to a copyright troll. Even Evan Stone, the prolific copyright troll out of Dallas, Texas — for sending subpoenas out before the judge gave authorization to do so, he was only sanctioned $10,000 (essentially one day’s income for Steele, according to Alan Cooper’s testimony, or three of Evan Stone’s settlements).

At the end of the day, unless the result of this hearing is a state bar disciplinary hearing (or more seriously, a criminal investigation if there was indeed “fraud” in the legal sense), and unless some lawyers lose their licenses, there will be no deterrance from Prenda Law Inc. (or any other copyright troll) thinking twice about their actions, and copyright trolling lawsuits will grow exponentially until enough people cry out, “this must be stopped!”

UPDATE (3/14/2013):

SJD reports that Judge Wright has ordered the Steele|Hansmeier gang to appear on 3/29/2013 based on “their pecuniary interest and active, albeit clandestine participation in these cases” (emphasis added).  He continues that “Not only does [their motion not to appear] lack merit, its eleventh-hour filing exemplifies gamesmanship”  (emphasis added).  Wow.  Further, the judge expanded his inquiry to impose sanctions not only to the original masterminds of these lawsuits, but to the so-called entities who are supposed to be separate and apart from their operation (they’re not).  He called Livewire Holdings LLC, and 6881 Forensics, LLC to be present at the hearing.  Now if these entities will be represented by the same Steele / Hansmeier / Duffy / Lutz characters (Hansmeier’s deposition already pegged paralegal Lutz as the CEOs of a number of these entities), this will look very bad for them.

NOTE: A commenter referred to this article (or me) as a “buzzkill,” and that got a good laugh out of me.  If you knew how much my reporting on these blogs represented how dull I sometimes am in real life, the humor of that comment is pretty on-point.  On this note, however, if you read Judge Wright’s order carefully, again, he’s only threatening sanctions.  Even if he imposes $1 million dollars in sanctions, I cannot imagine Steele and the others would pay it.  After all, they technically don’t “own” that money that is in the various trusts (#sarcasm).

Also see:

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Congratulations to the Cashman Law Firm, PLLC clients who have been dismissed from the BASEPROTECT UG, LTD. v. JOHN DOES 1-X (Case No. 2:11-cv-03621) and the CENTURY MEDIA, LTD. v. SWARM AND JOHN DOES 1-944 (Case No. 2:12-cv-03868) cases in the U.S. District Court for the District of New Jersey.

The politics leading to the dismissal of these cases is quite simple. Each of these cases lagged on for almost TWO YEARS with little progress being made against the hundreds of John Doe Defendants implicated in the lawsuits. After 178 documents were filed with the court in the Baseprotect case (whether they be motions to dismiss defendants who have settled, motions to quash, or administrative motions and/or hearing notes), eventually the case got stale.

On 2/26, Judge Joseph Dickson issued an ORDER TO SHOW CAUSE (which is usually indicative of a soon-to-be-dead case) as to why the court should not SEVER AND DISMISS all defendants except for John Doe 1.

In other words, Judge Dickson figured out that the John Doe Defendants in this case — the alleged co-defendants of the “same” bittorrent swarm — had download dates which were spaced so far apart that it was very unlikely that each of the hundreds of defendants participated in the “same swarm and the same time.” In other words, joinder was obviously deficient and the judge was about to break apart the case into a few hundred pieces telling plaintiff attorney Jay McDaniel that he better pay the $350 filing fee for each of the John Doe Defendants and file separate actions, or else he’s dismissing everyone except for John Doe #1.  The judge set the hearing date for 4/1.

In sum, McDaniel decided to cut his losses (which if you look at just how many people settled, you would conclude that this case was very profitable for him since its original filing on 6/23/2011), and without even waiting to attend the 4/1 hearing, he dismissed the case in its entirety.

Oh, and while he was at it, he also dismissed the Century Media, Ltd. case that same day.

Once again, congratulations to all who have been dismissed from these cases.

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“Oh what a tangled web we weave, When first we practise to deceive!”
- Sir Walter Scott, Marmion: Canto VI. (1771 – 1832)

My greatest effort in this blog is not to decide what to write about, but what NOT to write about. I’ve been very aware of John Steele’s issues in Minnesota (where he made an appearance for one of his cases, and was served by Paul Godfread’s process server on the Alan Cooper identity theft issue). I’ve also been aware of the issues as to whether AF Holdings, Guava, (and we won’t mention Ingenuity 13, or the older MCGIP lawsuits) are in fact entities or whether there is an bit of sham involved in their formation and/or the enforcement of the intellectual property they appear to hold. I have also noticed the clear trend from the smarter lawsuits where Steele moved from suing hundreds of John Doe Defendants to him suing smaller numbers of John Does (20-75) in smaller “under-the-radar” lawsuits, and then finally to the “John Doe” individual lawsuits, some of which ended up with named defendants who were not served, others where the defendants were actually served, and finally others where a defendant and his attorney agreed to allow Prenda to add hundreds of unrelated defendants to the lawsuits as potential co-conspirators.

Then when even the individual lawsuits looked to no longer be fruitful for him, I noticed the move from copyright enforcement to absurd tactics, some of which involved having Mark Lutz pose as a representative for a production company.  I noticed when Prenda had their own local counsel (Joseph Perea) shift titles to avoid unauthorized practice of law issues (e.g., in Florida), and I noticed when local counsel Brett Gibbs ended up as “of counsel” for Prenda Law Inc., only to later disavow association from the firm when federal Judge Otis Wright mentioned the word “jail.” These absurd tactics have gone even farther, most recently with the creation of the Livewire Holdings, Inc. entity (see, Part I; Part II) using fake pictures on their website for their so-called “partners,” and reports that Mark Lutz (Prenda Law Inc.’s former paralegal, now pictured as “partner” in the Livewire Holdings, Inc. site) is back at it, calling dismissed defendants using a fake name.  I almost fell off my chair when I read local counsel Brett Gibbs’ most recent declaration [under oath] that [he has been informed that] Mark Lutz was the CEO for AF Holdings, LLC (p.4, paragraph 7), and that he was also the CEO for Ingenuity 13, LLC (p.4, paragraph 8).  Really?!?

All of this drama (including the Minnesota lawsuit and the so-called fake Alan Cooper issue) are topics I have purposefully chosen NOT to write about for the sole reason that they do not help my clients or potential clients understand the issues surrounding the copyright infringement lawsuits they face when they receive a subpoena notice from their ISP in the mail.

Behind the scenes, as owner of the Cashman Law Firm, PLLC, I and my staff have spent literally months building up local counsel networks and researching each federal court’s rules to properly defend clients who are named as defendants in their copyright infringement lawsuits. I personally warned a number of copyright trolls that if they named my clients, myself and the attorneys I work with would find a way to make defending these cases affordable. So you can understand why I was amused when the principals at Prenda Law Inc. shifted from what looked to be a trend towards individual lawsuits against former John Doe Defendants to their more recent “world domination” shenanigans which led to widespread questions as to the identity of the “real” AF Holdings, LLC Alan Cooper, which of the copyright troll entities are real and which are shams, and then once caught, which led to the finger-pointing which began between their local counsel and other defense counsel, and then ultimately to the finger-pointing towards the principals at Prenda Law Inc. I’m happy that their lawsuits have gone nowhere these recent months, but personally I feel that their focus has shifted to “doubling down” on what appear to be outright lies rather than representing their clients to stop the piracy of their copyrighted films.  I often stop myself from asking, “wasn’t that the whole purpose of this grand charade?”  At least the war I thought I was fighting was to defend internet users from being subjected to copyright extortion-like lawsuits for the downloading or viewing of copyrighted movies and videos.

For these reasons, I really have nothing to say or comment because what Prenda Law Inc. / formerly, Steele|Hansmeier PLLC/ or more recently, the Anti-Piracy Law Group / John Steele / Paul Duffy / Brett Gibbs / former paralegal Mark Lutz (and their local counsel, many still disgruntled) have been doing and their antics have little-to-nothing to do with the so-called “rampant piracy” and the copyright infringement I thought they were here to stop.

So now John Steele and the entities he supposedly has nothing to do with are suing Paul Godfread, the real Alan Cooper (as opposed to the one they have not yet produced), along with all of the anti-copyright troll internet population, probably most notably, Sophisticated Jane Doe (
http://www.fightcopyrighttrolls.com
), Die Troll Die (
http://www.dietrolldie.com
), and probably a handful of others who have been hugely helpful to our law firm over the years through their reporting on Twitter. I could easily be part of this group of anti-copyright troll “Does” from all the posts I have written on his cases.

The problem with the “sue everyone for defamation” approach is 1) the elements of defamation are simply not there (as Forbes Magazine might report, John Steele is clearly a “public person” who has cast himself forth as being one of the foremost and first copyright trolls), 2) his lawsuits likely invoke the anti-SLAPP laws because they appear to have been filed to “create chilling effects and to stifle speech,” and most importantly, 3) people like Sophisticated Jane Doe, Die Troll Die, and the others blog and tweet anonymously. Thus, even if they figured out which IP addresses did the posting or the tweeting, the IP address will likely point to a private VPN service who have no ability to even know who these anonymous bloggers are.

In closing, there is not much to say about these lawsuits. Techdirt wrote about them here.  ArsTechnica wrote about them here.  Sophisticated Jane Doe wrote about them here. Copyright Clerk wrote about them here. Jordan Rushie wrote about them here. No doubt there will be many more articles, and no doubt there will be much more drama. However, as far as these lawsuits affect his copyright infringement and “hacker” lawsuits (the purpose for which I write this blog), I cannot see them affecting his lawsuits positively, and if anything, this was a misstep for Steele and his affiliates.


UPDATE (3/9/2013): DENIED.  Automattic, Inc. letter to Prenda Law Inc. (on behalf of WordPress.com sites) rejects Prenda’s attempts to ascertain the IP addresses of the anti-troll community citing five (5) deficiencies in their subpoena.  Other notable reasons for non-compliance with the subpoena include: 1) rights under the First Amendment to anonymous speech; 2) right to privacy; 3) subpoena (“outrageously”) overly broad; 4) subpoena seeks information that is not likely to lead to discoverable information.

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Many things just happened in the Central District of California which no doubt will affect many (if not all of the Ingenuity 13 LLC cases, along with all of the Guava cases, and the AF Holdings LLC) cases. In short, California is no longer a troll-friendly place to sue defendants for copyright infringement.

Looking at Judge Otis Wright’s order yesterday in the Ingenuity 13 LLC v. John Doe (Case No. 2:12-cv-08333) case in the U.S. District Court for the Central District of California, we learn many new things about “the law of bittorrent use.” I’ll go over these in separate headers.

RULE 1. IN ORDER TO SUE A DEFENDANT FOR COPYRIGHT INFRINGEMENT, YOU MUST PROVE THAT THE DEFENDANT DOWNLOADED THE ENTIRE COPYRIGHTED VIDEO.

I’ve always dumbed copyright infringement down into two elements: 1) “Access” to the copyrighted file, and 2) “SUBSTANTIAL SIMILARITY” to the copyrighted work.

Here according to the judge, a plaintiff catching a downloader in the act of downloading a file is no evidence that the file was actually downloaded. According to yesterday’s ruling, even a downloader downloading a viewable portion (e.g., a few second snippet of a copyrighted video) would still NOT be guilty of copyright infringement until the amount of the file downloaded rises to a “substantial similarity” to the original copyrighted work. In traditional copyright law, this means that copyright infringement happens when the downloaded file becomes substantially a “copy” of the entire original work.

Us lawyers have been bouncing around ideas as to what we think a judge might rule constitutes copyright infringement with regard to internet downloading and bittorrent use, and so we have been playing with the possibility that maybe having a viewable portion of the file downloaded might be sufficient, but NO. Sticking to black-and-white copyright law, the “substantial similarity” element applies in copyright law to bittorrent downloads as well (at least now in California federal courts), and according to this ruling, a plaintiff needs to demonstrate that the entire copyrighted video (not a fragment, a snippet, or a snapshot) was downloaded. This would absolve roughly 99% of accused downloaders across the U.S. who started to download a file, decided not to complete the download, and who got sued anyway.

RULE 2. A “SNAPSHOT OBSERVATION” OF AN IP ADDRESS ENGAGED IN DOWNLOADING AT THAT MOMENT IS INSUFFICIENT PROOF OF COPYRIGHT INFRINGEMENT

Here, all the evidence a copyright troll plaintiff has on a suspected defendant is that at a particular date and time (a “timestamp”), that particular IP address was engaged in the downloading of a particular copyrighted file.

Here, a “snapshot” of an IP address correlated with evidence from the subscriber’s internet service provider (“ISP”) [that it was the subscriber who was leased that IP address during the date and time the alleged activity took place] is insufficient proof that the download actually took place. The defendant could have merely entered the swarm and could be in queue to download his first byte of data. The defendant could be 10% done with the download and could have in his possession an unviewable fragment of the copyrighted video — hardly enough to rise to the level of “SUBSTANTIAL SIMILARITY” that is required in order to find a defendant guilty of copyright infringement. And, yet at the same time, that same snapshot could refer to a defendant having a download which is 99% complete.  A snapshot of an IP address in a bittorrent swarm is simply not conclusive that the downloader infringed the copyright.

The analogy the judge gives is taking a “snapshot” of a child reaching for a candy bar. In order to find someone guilty of copyright infringement, a plaintiff needs to prove that it is “more likely than not” that activity rising to the level of copyright infringement occurred. A snapshot places the defendant at the “scene of the crime.” It does not convict him for the unlawful act itself, and usually this is all the evidence a plaintiff copyright troll compiles when tracking a bittorrent swarm.

RULE 3. BEFORE SUING A DEFENDANT FOR COPYRIGHT INFRINGEMENT, YOU MUST DO A “REASONABLE INVESTIGATION” TO DETERMINE THAT IT WAS THE NAMED DEFENDANT WHO DID THE DOWNLOAD, AND NOT SOMEONE ELSE WITH ACCESS TO HIS INTERNET CONNECTION.

We have known for a while that the Prenda Law Inc. model of naming defendants is 1) find out who lives in the household, 2) name the prepubescent male member of the family as the defendant. I am sad to say that the Malibu Media, LLC and the Lipscomb cases appear to be following the same trend with their exculpatory letter “scare” strategy.  I am very happy to see a judge object to this tactic.

I want to point out that EVERY LAWSUIT ACROSS THE U.S. where the copyright troll (plaintiff) has named the ISP subscriber as the defendant with no further investigation suffers from this same flaw. We have been saying for months that being an ISP subscriber (and coincidentally the one implicated as the defendant in these cases) does not mean that you were the one who did the download (nor were you responsible for all activities that took place on your internet connection).

The judge described steps a plaintiff could take to rule out the possibility that it was not someone other than the defendant who did the download. For example, the plaintiff could drive up to the defendant’s house and see if there is wireless access (to eliminate the defense that it was a neighbor); they could track multiple instances of downloading and correlate them with times and dates the defendant was home; etc. etc. etc.

There is so much more on this topic that I could discuss that in my opinion could kill every copyright troll lawsuit out there. In sum, merely citing that an IP address assigned to the alleged infringer was engaged in an unlawful act does not mean that it was the ISP subscriber (the one paying the bills) who was engaged in that unlawful act. Failing to take that extra step of “putting the ISP subscriber at the keyboard at the time of the download” (or offering evidence to prove that it was the ISP subscriber himself who did the download, and not a neighbor or someone else in his household) would be fatal to any lawsuit.

IN SUM, this was a great decision, and I look forward to it being adopted by federal courts across the country. But, before everyone starts calling and assuming that this is “the law,” I want to point out that in 99% of the states across the U.S., what exactly constitutes copyright infringement when it comes to internet downloading via peer-to-peer networks is still largely undefined.

As of yesterday, this order is now considered “the law” or more accurately “case law” which is binding in the California federal courts. However, as to the federal courts of other states, this ruling is merely “persuasive” (which effectively means “suggestive”). A judge of any other state can read this ruling and agree, or disagree. Obviously my hope is that judges in other states will read this opinion and adopt the ruling in their own cases, but it is not “the law” until 1) Congress passes a statute which the Senate ratifies, and the President signs it into law, or 2) judges in each state rule in accordance with this opinion, making this “case law” one state at a time.

For more on this topic, Sophisticated Jane Doe wrote a great write-up on this case in her “Judge Otis Wright is fed up with Brett Gibbs’ and Prenda’s frauds, hints at incarceration” article. Anyone associated with the AF Holdings, LLC cases (or any of the others filed by Prenda Law Inc. [or their new "Anti-Piracy Law Group" entity]) should take notice of this ruling, and should file in their own cases what is known as a “JUDICIAL NOTICE” informing each judge of this order.

Lastly, no doubt Brett Gibbs might be in some serious legal trouble, and he might even face jail time for his actions in these cases for fraud upon the court. But, I hope the court recognizes that Brett Gibbs (as destructive as he has been to thousands of families over the past 2+ years) is merely local counsel to the larger “Prenda Law Inc.” entity who is run by players such as John Steele and his partners in his former Steele|Hansmeier PLLC firm.

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buffyIn a laughable attempt at a new copyright troll attempting to join the “me too” copyright infringement lawsuits that have been filed across the U.S., copyright troll attorney Sanjin Mutic [of the Mile High Law Office LLC; also on the board of the Triskele Foundation (thanks to SJD who did a good write-up on this)] stepped foot into the Colorado District Court without checking whether other more prolific copyright trolls (e.g., Jason Kotzker) have made a mess of cases in those courts already.  Within days of filing his “PHE, Inc. v. Does 1-105 (Case No. 1:12-cv-03342)” lawsuit against 105 defendants, U.S. District Judge William Martinez killed the lawsuit by severing and dismissing defendants 2-105.

This lawsuit would have been PHE, Inc.’s first attempt to extort thousands of dollars from each defendant who would have been accused of downloading “Buffy the Vampire Slayer XXX: A Parody.”

It should be noted that PHE, Inc. also appears to be the same entity that runs the “Adam & Eve Adult Sex Toy Store” (you can scroll to the bottom of the page to see the connection between them). Why a company as reputable as “Adam and Eve” would venture to produce parody pornography and open themselves up to lawsuits by the Buffy copyright holders is beyond me.

The judge’s opinion speaks for itself:

“This case is part of an ‘outbreak of similar litigation…around the country in which copyright holders have attempted to assert claims against multiple unknown defendants by joining them, in often large numbers, into a single action.’”

My favorite part:

“Our federal court system provides litigants with some of the finest tools available to assist in resolving disputes; the courts should not, however, permit those tools to be used as a bludgeon.”

Nice try, PHE, Inc.

P.S. – I thought it was funny that Paul Lesko of Simmons and Browder, LLC was also trying a PHE, Inc. case in the Missouri Eastern District Court.  That case is the PHE, Inc. v. Does 1-96 (Case No. 4:12-cv-02296) case.  

P.P.S. – Sanjin Mutic is an interesting copyright troll himself.  He is the attorney for the West Coast Productions, Inc. Colorado cases, specifically, West Coast Productions, Inc. v. Does 1-38 (Case No. 1:12-cv-02642 with Judge Heagarty) and West Coast Productions, Inc. v. Does 1-37 (Case No. 1:12-cv-02644 with Judge Watanabe).   The Triskele Foundation of which he is on the board of directors is focused on helping high school drop-outs; perhaps he helps them find jobs in the lucrative billion-dollar industry in which he thrives.  NOTE TO SELF: Was this comment offensive? Or is there just an inconsistency between someone who “helps high-school drop-outs” and who (at the same time) advocates for the porn industry?

UPDATE: 1/7/2013 – Techdirt article: “Company Behind Adam & Eve Discovers Quickly That Courts Are Now Hip To Copyright Trolling.”

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I don’t know how to say this other than in my field of work, it is not often that I am shocked.  I often speak to local counsel who get excited that they are handling a “porn” case.  Just a few days ago, I called one of Steele’s (a.k.a., “Anti-Piracy Law Group”) local counsel.  When I introduced myself, he said to me (with a boyish excitement), “Aren’t you the porn lawyer?” to which I responded, “Aren’t YOU the porn lawyer?!?”

Anyway, I cannot help but to generalize these cases into “okay, one more production company suing a college kid or husband for clicking on a link and viewing copyrighted materials.”  What I often forget is that there is usually some guy behind the scenes who has trailed so far into the world of pornography that he has opened up his own company, produced some porn videos, and now is suing defendants for their download.

The motive is usually the same.  Instead of “let’s punish these pirates” as they would like you to believe, their motive is rather, “let’s hit up as many people for thousands of dollars each until we get shut down by the courts.”  In my opinion, this was the motive of the Hard Drive Productions, Inc. lawsuits.

Digressing, the epic news of the day is that the Hard Drive Productions, Inc. v. Does 1-1,495 (Case No. 1:11-cv-01741) case has been dismissed.  Congratulations to the Cashman Law Firm, PLLC defendants who have been released from this case.  

I don’t need to go into details about the case history — it has been riddled with controversy since they started suing internet users 2+ years ago.  As far as the legal issues were concerned, this was a typical copyright infringement lawsuit plagued with the same procedural issues that most of the other cases of its time suffered from — improper joinder (defendants were not part of the same “swarm”), and improper jurisdiction (defendants were sued in a court which did not have personal jurisdiction over them because the DC court’s reach could not decide the case against most of the defendants who were implicated in the lawsuit because they lived outside of the court’s jurisdiction).

What surprised me about the Hard Drive Productions, Inc. case was not Hard Drive Productions, Inc., but the District of Columbia judges who made a political mess of these cases.  Judge Beryl Howell came on the scene making pro-copyright troll rulings, such as 1) “you don’t need to decide jurisdiction or joinder until a defendant is named and served in a lawsuit,” 2) an ISP cannot file a motion to quash on behalf of their subscribers, and 3) accused John Doe Defendants cannot file motions to quash until they are named as defendants in the case.  Mind you, she was a copyright lobbyist before she was appointed a federal judge.

Then in February, 2012, Judge Facciola came in with a ruling in the West Coast Productions, Inc. v. Does 1-1,434 (Case No. 1:11-cv-00055) case which I was sure was going to kill the Hard Drive Productions, Inc. case and all the other bittorrent cases in DC.  In his order, he ruled that “a defendant who does not live in the District of Columbia cannot be sued in the DC court because the DC court lacks jurisdiction over those defendants.”  However, at some point, it appears to me as if the RIAA/MPAA copyright lobby (probably by using Judge Beryl Howell as their mouthpiece) pressured Judge Facciola into giving into the copyright lobby’s pressure, and with a few contradictory rulings, he transitioned over to being Judge Beryl Howell’s sidekick in these cases.

Judge Bates also came in appearing to protect the procedural rights of the accused defendants who lived outside of DC, but once again, after what appeared to be some pressure from the RIAA/MPAA copyright lobby (once again, my educated guess is that Judge Beryl Howell was the force behind what happened), he was removed from the case which Judge Facciola took over.  Then, after some time, it appears as if Judge Bates too eventually caved in to the RIAA/MPAA copyright lobby (some refer to them as the “mafia,” or the copyright police), and on my September 27th, 2012 post, Judge Bates reversed his decision in Hard Drive Productions, Inc. case and let the “extortion” of the John Doe Defendants at the hands of John Steele and Co. (a.k.a., Steele Hansmeier PLLC, a.k.a., Prenda Law Inc., and now a.k.a., the ”Anti-Piracy Law Group”) continue.

So.  The story with this dismissal is not necessarily a Hard Drive Productions, Inc. story, but a story of the forces behind the public interest groups and lobbyists who pressure Washington to always rule in favor of the copyright holder, regardless of whether the copyright holder is a pornography company, or whether the copyright holder is involved in making B-movies.  Bottom line, these lobbyists insist that WASHINGTON MUST CONTINUE TO BE PRO-COPYRIGHT AND MUST CONTINUE TO RULE IN FAVOR OF THE COPYRIGHT HOLDERS, regardless of who the copyright holder is, or at what cost.

So as things stand in DC, there is still a split as to the rights of unnamed John Doe Defendants between the rulings of Judge Wilkins (relating to the “motion to compel” lawsuit by Prenda Law Inc. against Comcast relating to their Millennium TGA, Inc. cases [BTW, dismissed last week]) and the rulings of Judge Beryl Howell, because as you read, Judge Howell certified an interlocutory appeal to answer questions relevant to these cases, but it appears to me that someone is dragging their feet there in DC and hoping for a dismissal so that they don’t have to decide the issues.

Lastly, there is a lot of activity on Twitter as to the 28 or so defendants who have settled their case, and some anger directed at these anonymous defendants who have settled.  Quite frankly, they are not all anonymous.  What happened with these is that without warning, Prenda Law Inc. turned around and sued one of these defendants (or threatened to imminently sue these defendants) in lawsuits in their home states.  I understand that many, if not most of the defendants in the “Hard Drive Productions, Inc. v. John Doe” cases which were filed towards the end of 2011 probably settled (I’ve listed a few of the named defendants in the “At What Point Does a Copyright Troll Stop Being a Troll” article.)

In closing, people are asking me whether I think Hard Drive Productions, Inc. is dead, or whether this is just the next logical progression before a slew of defendants being named.  I must note that Hard Drive Productions, Inc. got their butts kicked quite a few times, especially with the Hard Drive Productions, Inc. v. John Doe, 3:11-cv-05634-JCS (Seth Abrahams) case and the Hard Drive Productions, Inc. v. John Doe, 4:11-cv-05630-YGR (Liuxia Wong) case, both in California.  If you look at the
http://www.rfcexpress.com
website, there have been ZERO filings since March, 2012.  A defendant must also understand that with the egos of these copyright troll attorneys, there is the saying, “As the ego of the attorney inflates, so does his hourly rate.

We also know there have been squabbles between Prenda Law Inc.’s local counsel and Steele, and we know that their own attorneys have been jumping ship (and in some cases even testifying against Prenda Law Inc. in their attempts to withdraw as local counsel.)  Thus, there are problems all around, so my best advise is to watch the
http://www.rfcexpress.com
website and see whether Hard Drive Productions, Inc. starts a flurry of lawsuits across the U.S. or not.  And remember — behind every lawsuit there is a person (joking using the term “person” to mean a human, a fictitious person (who might not exist), or an offshore entity) who needs to pay Steele’s legal fees so that he can pay for his Las Vegas lifestyle of traveling the country “not” representing his clients in these matters.

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