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Archive for the ‘California (CA)’ Category

It has been almost a full day since yesterday’s historic Prenda flop where the attorney for Prenda Law Inc. (formerly, Steele|Hansmeier, PLLC and before that, Steele Law Firm PLLC) appeared to be woefully unprepared to overturn the sanctions that were ordered against Prenda Law and their team. (Flashback: “The 12 minute hearing and the end of Prenda Law Inc.” on 4/3/2013)

For those of you who missed it, you can watch the entertaining video here (fast forward to the tall guy).

As a quick recap, two years ago, Prenda Law was caught forging the name “Alan Cooper” on the copyright assignment documents which gave them the apparent authority to sue on behalf of their clients. The “real” Alan Cooper (John Steele’s gardener) who was the victim of identity theft hired an attorney, showed up at one of Prenda’s hearings, and served John Steele with his own lawsuit.

I don’t know how to explain what happened in a recap other than that the whole “house of cards” that was Prenda Law Inc. was unraveled — not because of the Alan Cooper forgery issue, but because John Steele couldn’t stay away from the cases when he successfully made the courts believe that he sold his Steele Hansmeier PLLC law firm to Paul Duffy. Shortly afterwards, he resumed making phone calls and openly running things himself, and he started showing up at hearings and speaking to the judges. This is what tipped off Judge Otis Wright to ask who the real parties in interest were in these lawsuits.

Personally, it jaded me a bit to see that after being caught (having their grand scheme exposed by good lawyers), the lawyers for Prenda continued their stories of misinformation by lying under oath in their depositions and in court proceedings. Further, I was annoyed when I learned about the scheme unfold in its entirety, including the creation of various offshore entities created to funnel settlement payments, and where Prenda peddled the blatant lie that Mark Lutz (the paralegal) was the mastermind behind the lawsuits.

Being behind the scenes when all this was happening, I was also hearing about issues of Prenda Law lying to, not paying, and in one notorious case, turning against their own local counsel who put their law licenses in jeopardy to file the lawsuits on Prenda’s clients’ behalf. Lastly, there were even more issues that I was privy to that never even made it into the courtroom, namely what appeared to be a credible accusation that Prenda Law Inc. was uploading and seeding their own clients’ content on the bittorrent networks — the same bittorrent swarms in which they sued the internet users for downloading the content they uploaded.

My own thought process was that the proper judicial response was 1) for the federal judges to serve as the “guardians of the gates” of the federal courts [e.g., to kill the copyright infringement cases as they are filed based on principles of improper joinder, etc.], and 2) to prevent the attorney(s) at this point from practicing law through the remedies of suspension and disbarment through their local bar associations. If the attorney persists, the attorney(s) should be charged with the unauthorized practice of law. Yet none of this happened. A lawyer (who for the purposes of this article will remain private) filed ethical charges against John Steele to have him disbarred, and in return, Steele filed ethical charges against him [a story for him to tell, not my secrets to tell].  Then, Steele at some point appeared to have voluntarily disbarred himself and retired from the practice of law, and his organization went inactive in the Illinois state registry. Yet his involvement in the cases persisted.

Thus, I was not surprised when Judge Wright wrote his order sanctioning John Steele, the Hansmeier brothers, and all those involved in the conspiracy. What surprised me was their hubris in that they continued fighting after they already lost. This is why I call the Prenda Law fiasco a “circus.” Everybody continues to argue in circles, but nobody goes to jail.

So, getting back to yesterday’s hearing (YouTube Link), there were THREE ITEMS that I took note of in what was perhaps the most entertaining 3-panel judge hearing I have ever seen.

ITEM 1) John Steele and the Hansmeiers were quite upset that Judge Wright implicated them as having broken criminal laws, and even though they were never charged for the violation of those laws (which I could only guess include identity theft [forgery], extortion, perjury, fraud, and perhaps even money laundering and/or racketeering). [NOTE: There were other acts allegedly committed, including the unauthorized practice of law, violation of countless ethical rules including compensating a non-attorney as a partner of the law firm, alleged tax evasion, and misuse of corporate structures after they were dissolved, etc.] Many of these acts if looked into could make the principles of the law firm personally liable for any charges without the protection of a corporate entity.

They appear to have hired attorney Daniel Voelker for the sole purpose of disputing the $200K+ in sanctions awarded against them because Judge Wright implicated them in a lawsuit which they tried their darnedest to keep at an arms length through the use of legal structures, funneling money into offshore entities, using the paralegal as the “fall guy,” and through the use of local attorneys. But rather than arguing against the sanctions award on the merits of whether it was proper to award the sanctions, they appear to have been offended by the implication of having broken criminal law in what Judge Pregerson called “an ingenious extortion fraud [scheme].” Thus, they instructed attorney Voelker to request that the court REMAND (meaning, return to the lower courts as a “do over”) the case to the U.S. District Court so that they can properly defend the insinuation that they committed one or more crimes while running what was — at the time — the most successful copyright trolling extortion scheme in existence.

ITEM 2) Attorney Daniel Voelker appeared to be woefully unprepared for the hearing. When asked about the details of the various copyright troll lawsuits filed by Prenda Law Inc. / Steele Hansmeier PLLC / Steele Law Firm, PLLC, he was unaware of anything other than what was the subject of the appealed case. This was surprising to the judges, it was surprising to me, and I am sure it was surprising to the hundreds of “fans” who were watching the hearing live and streamed over the internet. How could this attorney not be aware of the hundreds of other filings that his client took part in?!?

I also want to point out that YET AGAIN, STEELE, HANSMEIER, AND MARK LUTZ THE PARALEGAL WERE NOTORIOUSLY ABSENT FROM THE PROCEEDINGS.

ITEM 3) Simplifying the discussions of damage multipliers and other damages issues that were discussed, the jist of what the judges needed to decide were 1) whether to uphold the sanctions award against Prenda Law and company, and 2) whether to remand the case so that the questions of criminal conduct could be hashed out.

IN MY OPINION, again, this whole Prenda Law fiasco is a circus. John Steele and his buddies have been “gaming” the system since they began, and even when their whole scheme came tumbling down around them, they turned to lying, cheating, and misdirection in order to get around the rules.

Nothing will right the wrongs that were inflicted on tens of thousands of internet users except seeing each of these attorneys disbarred and jailed for criminal conduct. Yet I cannot see this happening because notorious criminals today too often go uncharged. Judges too often find the “lazy” alternative of slapping an attorney with sanctions, and then not following up on their order when the attorney weasels their way out of paying those sanctions. This is a sign of a corrupt system, and as much as I have faith in the law, I do not have faith that the judges will inflict stern judgement (“fire and brimstone”) against a bunch of lawyers who look more like a**clowns in the courtroom.

Thus, it is my best guess that the sanctions will not only be upheld, but they will be strengthened and perhaps multiplied. However, as for the criminal prosecution of the clowns who perpetrated this grand heist of an extortion scheme, their activities will go unpunished. Maybe they’ll lose their law licenses (noting that in part, this has partially happened to some of them). Maybe they’ll be held personally liable without the shielding of the corporate entities they tried to use to hide their involvement in these cases. Maybe one or more of them will need to continue to hide their money indefinitely and file for bankruptcy. Maybe one or more of them will need to move out of the country and live out their days on a beach somewhere.

I don’t see orange jumpsuits in anyone’s future here. Not in today’s lawless society.

 

USEFUL ARTICLES ON YESTERDAY’S HEARING:

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Malibu Media, LLC has been filing lawsuits across the U.S. with a fervor with one change — most of them appear to be “Single John Doe” lawsuits against defendants whom they believe have deep pockets.

In other words, it appears that Malibu is looking at the geolocation data of the various IP addresses of the so-called downloaders, and they are going after defendants who live in towns which have high value residential homes. I know this because based on the individuals who call our office, a disproportionate number of them have commented that they have multi-million dollar estates, and they were wondering whether it was ethical to target high value individuals in their copyright infringement lawsuits.

To make matters worse, Malibu Media, LLC appears to have incentivized their local counsel with financial rewards for bringing in higher settlements. In the olden days, I could have called one of their contacts directly, and within a few phone calls, I knew what kind of settlement a defendant could get based on how many “titles” or alleged instances of infringement they were accused of downloading. From there, the client and I would decide whether it made more financial sense to fight the case by waiting to be named and filing an answer in court, or whether it made more financial sense to settle the case. Malibu has complicated this process in order to provide the appearance of legitimacy for the courts. Now, they are having their local counsel negotiate the settlements themselves. This would be okay, but it is my experience that local counsel are asking for higher numbers than I know Malibu would have settled for just a few months ago. “The old settlement numbers you used to have with Malibu are no longer in effect,” one local counsel told me as she pushed for higher numbers. “We are doing this ourselves now.”

To make matters worse, when Malibu Media, LLC identifies a downloader by his IP address, they track that IP address and monitor that defendant to see what other bittorrent files that defendant is downloading (wiretap?). They continue to monitor that defendant downloading non-Malibu Media titles such as “The Walking Dead,” “Homeland,” “Breaking Bad,” often creating a list multiple pages long of “other” infringing activities that defendant has taken part in. Their logic is that because a particular defendant downloaded those other titles, he is a “serial downloader” and thus it is more likely that he downloaded their titles as well. A number of us attorneys have explained to their local counsels’ deaf ears that just because a particular IP address downloaded a number of bittorrent titles does not mean that the accused defendant is that downloader. However, even the best attorney’s understanding of the law can be clouded when money influences that attorney’s understanding of it.

On a positive note, in just a few weeks, we have seen judges rule that the “other” BitTorrent activity listed in their complaints [for works not owned by Malibu Media] is inadmissible under the Federal Rules of Evidence (“FRE”), specifically Rule 404 on “Character Evidence.” The reason for this is because “Evidence of a person’s character or character trait is not admissible to prove that on a particular occasion the person acted in accordance with the character or trait.” In other words, proving that a particular defendant is a “serial downloader” is not admissible to prove that on a particular date and time, that defendant downloaded Malibu Media’s copyrighted titles. Shame on Malibu attorneys for not knowing this.

Further, judges have ruled that introducing evidence of “other” downloads is not relevant and is actually prejudicial to the defendant, and thus that so-called evidence is not admissible to prove that the defendant downloaded Malibu Media, LLC’s titles. As one example, Judge Stephen Crocker has frozen all of Malibu Media, LLC’s cases in the Western District of Wisconsin for this very purpose (link).

In sum, messing up on the Federal Rules of Evidence and doing so on each of their “Single Doe” upper-class cases was a big mistake which they might not be able to undo.  And also on a positive note, because they have filed so many “Single Doe” cases across the country, judges across the U.S. are looking deeper into their tactics and their evidence of infringement.  See @Ddragon229’s article on the FCT website, “Winds of change begin to blow on Malibu Media” for details on the character evidence issue.

Despite this, Malibu Media, LLC continues to file lawsuits across the U.S. in alarming numbers, and in each case, they continue to file this prejudicial information of “other” downloads as their “Exhibit C” in each case. A snippet of cases filed in just the last few weeks is pasted below:

Cases filed by Chris Fiore in the Pennsylvania Eastern District:
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02858)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02859)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02867)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02868)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02854-JP)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02855-MMB)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02856-JD)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02857-SD)
Malibu Media LLC v. John Doe (Case No.2:13-cv-02863-PD)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02864-HB)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02765-MSG)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02766-MSG)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02767-WY)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02768-PD
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02769-RB)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02770-CMR)

Cases filed by Mary Schulz of Schulz Law PC in the Illinois Northern District:
Malibu Media LLC v. John Doe (Case No. 1:13-cv-03726)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-03699)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-03700)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-03703)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-03704)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-03705)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-03706)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-03707)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-03710)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-03711)

Cased filed by Paul J. Nicoletti of Nicoletti & Associates PLLC inn the Michigan Eastern District:
Malibu Media LLC v. John Doe subscriber assigned IP address 71.238.205.92 (Case No. 4:13-cv-12231-MAG-MAR)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.42.185.159 (Case No. 2:13-cv-12210-RHC-MJH)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.43.4.96 (Case No. 2:13-cv-12213-SFC-DRG)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.43.84.236 (Case No. 2:13-cv-12214-AJT-MKM)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.60.140.87 (Case No. 2:13-cv-12216-PDB-RSW)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.62.41.133 (Case No. 2:13-cv-12217-VAR-RSW)
Malibu Media LLC v. John Doe subscriber assigned IP address 69.14.181.108 (Case No. 2:13-cv-12218-NGE-DRG)
Malibu Media LLC v. John Doe subscriber assigned IP address 69.246.89.172 (Case No. 2:13-cv-12220-AJT-DRG)
Malibu Media LLC v. John Doe subscriber assigned IP address 67.149.158.6 (Case No. 2:13-cv-12197-GAD-PJK)
Malibu Media LLC v. John Doe subscriber assigned IP address 67.149.89.224 (Case No. 2:13-cv-12198-PDB-MKM)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.40.123.7 (Case No. 2:13-cv-12200-GER-MKM)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.40.46.12 (Case No. 2:13-cv-12201-DPH-DRG)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.43.35.2 (Case No. 2:13-cv-12202-PDB-DRG)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.41.170.197 (Case No. 2:13-cv-12204-GAD-RSW)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.41.19.221 (Case No. 2:13-cv-12206-DPH-LJM)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.41.86.4 (Case No. 2:13-cv-12208-MOB-RSW)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.42.172.154 (Case No. 2:13-cv-12209-SJM-MKM)

Cases filed by Paul J. Nicoletti of Nicoletti & Associates PLLC in the Indiana Northern District:
Malibu Media LLC v. John Doe 12 (Case No. 1:13-cv-00166-PPS-RBC)
Malibu Media LLC v. John Doe 5 (Case No. 1:13-cv-00164-PPS-RBC)
Malibu Media LLC v. John Doe 9 (Case No. 1:13-cv-00165-PPS-RBC)

PERSONAL NOTE: Even with all these cases, I have only listed 46 cases having 46 defendants. With the hundreds of filings, it becomes impossible to track and report on each case. The more I look at each of these cases, the more I feel as if they have succeeded in preventing attorneys like myself from tracking and reporting on each of their hundreds of cases. Obviously I am still here, and I am still reporting on these cases. My list of cases to track has just gotten a bit larger.

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houstonlawy3r:

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.

Originally posted on Fight Copyright Trolls:

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

Media coverage

View original 428 more words

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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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Malibu Media, LLC has been one of the worst offenders in these copyright trolling cases. Instead of waiting for a full download to be complete, it has been reported to me that IMMEDIATELY UPON CLICKING ON THE BITTORRENT LINK (or in other words, as soon as an internet user “joins” the bittorrent swarm, EVEN IF NOT A BYTE OF DATA HAS BEEN DOWNLOADED), ***WHAM!*** Downloaders are tagged and are sued for copyright infringement.

To make matters worse, Malbu Media, LLC is known to sue based on what is called a “Siterip” (essentially meaning that someone ripped a large set of videos from their http://www.x-art.com paid website, and posted a huge number of them into one bittorrent file). We won’t ask 1) if they’ve known about the Siterips, why they have not filed DMCA takedown notices for those Siterips, and 2) whether they were involved in the “leaking” of the various siterips (in my opinion, it is too convenient to have “Siterip #1… Siterip #2… Sitrip #12…”). In sum, clicking on the wrong torrent file link with Malibu Media, LLC as your plaintiff production company can get you sued for 25+ titles, or “hits” as they like to call them.

Now what makes these cases particularly offensive is that unlike the traditional copyright trolls who will only ask for $3,400 and settle for whatever they can get, Malibu Media, LLC will likely ask for at least a $10,000 settlement from each defendant. You see this by looking at the case names below that there appears to be only ONE defendant in each case. The reason for this is that their attorneys will tell the defendant that he’s the only one in the case, and that they’ll amend the complaint, “name” him as a defendant, and serve him with process if he doesn’t settle.

While I am against the concept of suing downloaders for the piracy of a film, I want to note that filing ONE LAWSUIT FOR ONE DEFENDANT is the proper way to do these lawsuits (and the courts will be much more forgiving based on the many filing fees paid to the court, especially since the court will not need to deal with rote procedural issues that have plagued these cases since their inception [e.g., improper jurisdiction, improper joinder]). In sum, in a case such as this one, a defendant must answer for himself the simple questions of 1) can I fight this (the answer is likely yes considering the “snapshot” methods in which they track the IP addresses relating to the downloads, along with the likely-present issues of late copyright filing dates), and 2) how would I like to proceed based on what I know about their evidence against me (based on my own network router setup and/or downloading habits)? X-art films have a very specific style and theme to them, and they attract a very specific genre of married men, one step up from those who enjoy classy soft porn. On top of this, the Keith Lipscomb IP enforcement company representing Malibu Media, LLC as their client does research on most defendants (note their mention below as “Dr. John Doe” in one of their cases to signal to the defendant that they know he has financial resources to pay a large settlement). For these reasons, it is often a simple question of EVIDENCE in determining whether to move forward with what is usually a very good defense, or whether to use that evidence we gather in your favor while attempting to negotiate a deeply discounted settlement on your behalf.

Up front, the local counsel you will read about below — Mary Schultz, Paul Nicoletti, Jon Hoppe, Leemore Kushner, Jason Kotzker, and Patrick Cerillo — are merely paid to file and fight these cases according to the instruction of Keith Lipscomb. They are merely cogs in Lipscomb’s IP enforcement machine, and in my opinion, there is no reason for anyone to be talking to them since they likely do not have authority to do anything but gather evidence, argue the cases and move them forward.

MARCH 2013 – 19 NEW CASES

Illinois Central District Court
Mary Katherine Schulz of Schulz Law Firm, PC

Malibu Media LLC v. John Doe (Case No. 1:13-cv-01096)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-01099)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-01100)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-01101)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-01102)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02058)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02059)

Wisconsin Eastern District Court
Mary Katherine Schulz of Schulz Law Firm, PC

Malibu Media LLC v. John Doe (Case No. 2:13-cv-00226)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-00236)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-00238)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-00239)

Indiana Northern District Court
Paul Nicoletti of Nicoletti & Associates PLLC

Malibu Media LLC v. Joe Doe (Case No. 2:13-cv-00085)
Malibu Media LLC v. John Doe (Case No. 3:13-cv-00162)
Malibu Media LLC v. John Doe (Case No. 3:13-cv-00163)
Malibu Media LLC v. John Doe (Case No. 3:13-cv-00164)
Malibu Media LLC v. John Doe (Case No. 3:13-cv-00165)

District Of Columbia District Court
Jon A. Hoppe of Maddox Hoppe Hoofnagle & Hafey LLC

Malibu Media LLC v. John Doe (Case No. 1:13-cv-00268)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-00269)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-00270)

FEBRUARY 2013 – 103 NEW CASES

New Jersey District Court
Patrick J. Cerillo – Attorney at Law

Malibu Media LLC v. John Doe (Case No. 2:13-cv-01179)
Malibu Media, LLC v. John Doe subscriber assigned IP address 68.32.191.163 (Case No. 2:13-cv-01176)
Malibu Media, LLC v. John Doe subscriber assigned IP address 69.142.2.132 (Case No. 2:13-cv-01178)
Malibu Media, LLC v. John Doe (Case No. 2:13-cv-01180)
Malibu Media, LLC v. John Doe (Case No. 2:13-cv-00214)
Malibu Media LLC v. John Doe (Case No. 3:13-cv-01159)
Malibu Media, LLC v. John Doe subscriber assigned IP address 108.35.11.132 (Case No. 2:13-cv-01104)
Malibu Media, LLC v. John Doe subscriber assigned IP address 173.70.130.138 ( 2:13-cv-01106)
Malibu Media, LLC v. John Doe (Case No. 2:13-cv-01105)
Malibu Media, LLC v. John Doe (Case No. 2:13-cv-00971)
Malibu Media, LLC v. John Doe subscriber assigned IP address 173.54.255.28 (Case No. 2:13-cv-00972)
Malibu Media, LLC v. John Doe (Case No. 2:13-cv-00973)

Wisconsin Eastern District Court
Mary Katherine Schulz of Schulz Law Firm, PC

Malibu Media LLC v. John Doe (Case No. 2:13-cv-00217)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-00213)

California Southern District Court
Leemore L Kushner of Kushner Law Group

Malibu Media, LLC v. John Doe (Case No. 3:13-cv-00433)
Malibu Media, LLC v. John Doe (Case No. 3:13-cv-00434)
Malibu Media, LLC v. John Doe (Case No. 3:13-cv-00435)
Malibu Media, LLC v. John Doe (Case No. 3:13-cv-00436)
Malibu Media, LLC v. John Doe (Case No. 3:13-cv-00437)
Malibu Media, LLC v. John Doe (Case No. 3:13-cv-00438)
Malibu Media, LLC v. John Doe (Case No. 3:13-cv-00440)
Malibu Media, LLC v. John Doe (Case No. 3:13-cv-00442)
Malibu Media, LLC v. John Doe (Case No. 3:13-cv-00443)

Florida Middle District Court
M. Keith Lipscomb (a.k.a. Michael K. Lipscomb) of Lipscomb Eisenberg & Baker PL

Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00467)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00468)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00469)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00470)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00471)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00472)

Florida Southern District Court
M. Keith Lipscomb (a.k.a. Michael K. Lipscomb) of Lipscomb Eisenberg & Baker PL

Malibu Media, LLC v. John Doe (Case No. 9:13-cv-80178)

Colorado District Court
Jason Aaron Kotzker of Kotzker Law Group

Malibu Media, LLC v. John Doe subscriber assigned IP address 97.121.170.141 (Case No. 1:13-cv-00428)
Malibu Media, LLC v. John Doe subscriber assigned IP address 69.29.143.104 (Case No. 1:13-cv-00424)
Malibu Media, LLC v. John Doe subscriber assigned IP address 71.218.22.157 (Case No. 1:13-cv-00426)
Malibu Media, LLC v. John Doe subscriber assigned IP address 75.171.198.44 (Case No. 1:13-cv-00427)
Malibu Media, LLC v. John Doe subscriber assigned IP address 97.121.170.141 (Case No. 1:13-cv-00428)
Malibu Media, LLC v. John Doe subscriber assigned IP address 69.29.143.104 (Case No. 1:13-cv-00424)
Malibu Media, LLC v. John Doe subscriber assigned IP address 63.225.246.31 (Case No. 1:13-cv-00423)
Malibu Media, LLC v. John Doe subscriber assigned IP address 71.212.197.251 (Case No. 1:13-cv-00425)
Malibu Media, LLC v. John Doe subscriber assigned IP address 71.218.22.157 (Case No. 1:13-cv-00426)
Malibu Media, LLC v. John Doe subscriber assigned IP address 75.171.198.44 (Case No. 1:13-cv-00427)

Maryland District Court
Jon A. Hoppe of Maddox Hoppe Hoofnagle & Hafey LLC

Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00352)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00353)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00354)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00356)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00357)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00358)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00359)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00363)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00366)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00350)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00351)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00355)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00360)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00361)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00362)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00364)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00365)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00506)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00507)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00508)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00509)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00510)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00511)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00517)
Malibu Media, LLC v. John Doe (Case No. 8:13-cv-00518)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00512)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00513)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00514)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00515)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00516)

Illinois Central District Court
Mary Katherine Schulz of Schulz Law Firm, PC

Malibu Media, LLC v. John Doe (Case No. 1:13-cv-01072)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-01073)
Malibu Media, LLC v. John Doe (Case No. 2:13-cv-02043)

Illinois Northern District Court
Mary Katherine Schulz of Schulz Law Firm, PC

Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00863)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00878)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00880)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00883)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00884)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00885)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00888)
Malibu Media, LLC v. Dr John Doe (Case No. 1:13-cv-00891)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00913)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00915)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00934)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00935)

Michigan Western District Court
Paul Nicoletti of Nicoletti & Associates PLLC

Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00158)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00162)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00163)

Indiana Southern District Court
Paul Nicoletti of Nicoletti & Associates PLLC

Malibu Media LLC v. John Doe (Case No. 1:13-cv-00201)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00203)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00204)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00206)

Indiana Northern District Court
Paul Nicoletti of Nicoletti & Associates PLLC

Malibu Media, LLC v. John Doe (Case No. 2:13-cv-00055)
Malibu Media LLC v. John Doe (Case No. 3:13-cv-00071)
Malibu Media LLC v. John Doe (Case No. 3:13-cv-00072)

Colorado District Court
Jason A. Kotzker of Kotzker Law Group
Malibu Media, LLC v. John Doe subscriber assigned IP address 174.51.234.104 (Case No. 1:13-cv-00307)
Malibu Media, LLC v. John Doe subscriber assigned IP address 174.51.250.8 (Case No. 1:13-cv-00308)
Malibu Media, LLC v. John Doe subscriber assigned IP address 24.8.161.234 (Case No. 1:13-cv-00309)
Malibu Media, LLC v. John Doe subscriber assigned IP address 24.8.34.85 (Case No. 1:13-cv-00310)
Malibu Media, LLC v. John Doe (Case No. 1:13-cv-00311)
Malibu Media, LLC v. John Doe subscriber assigned IP address 67.176.40.151 (Case No. 1:13-cv-00316)
Malibu Media, LLC v. John Doe subscriber assigned IP address 75.71.30.155 (Case No. 1:13-cv-00317)
Malibu Media, LLC v. John Doe subscriber assigned IP address 98.245.154.142(Case No. 1:13-cv-00318)

P.S. – For those of us who follow these cases as enthusiasts, did you notice that there was no mention of Chris Fiore in this long list of cases? Perhaps he still has his hands full with the bellwether case.

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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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