Bad Day For Prenda Continues: Judge Rejects Stay, Adds $1k Per Day For Each Day They Don't Pay Up

from the couldn't-happen-to-a-nicer-bunch-of-people dept

Prenda's not having a very good day (or month, for that matter). We noted yesterday that Paul Hansmeier had asked the appeals court to put a stay on the attorney's fees awarded by Judge Otis Wright in California. The court rejected the request, partly on procedural grounds, noting that you have to put in the request at the district court first, not jumping the gun and going straight to the appeals court. Soon after that, the lawyer representing many of Team Prenda, Heather Rosing, filed for a stay in the district court, claiming that Prenda was "deprived of due process."

Judge Wright made quick work of this, noting the filing irregularity, and the pattern of seeking "eleventh-hour pleas for relief," and then rejected the request, and added a $1,000 per day penalty for every day that they fail to put up a bond in the amount owed. Oh yeah, also he asks them to explain to the court why they didn't pay up as ordered. Might as well include the full text here:
Prenda Law, Inc., through its attorneys at Klinedinst PC, filed a notice of appeal to the Ninth Circuit. (ECF No. 157.) Oddly, to this notice of appeal, Prenda attached an ex parte application seeking a stay of enforcement of the Court’s May 6, 2013 Order Issuing Sanctions. (ECF No. 157-1.) Not only was this application improperly filed; but once again, Prenda resorted to an eleventh-hour plea for relief.

Even assuming this application was properly filed, the Court finds no basis to grant Prenda’s request. Under the Court’s order, Prenda, along with John Steele, Paul Hansmeier, Paul Duffy, Brett Gibbs, AF Holdings LLC, and Ingenuity 13 LLC, were required to pay by May 20, 2013, an attorney’s-fee award of $81,319.72. By filing this application, it appears no such payment was made.

Instead, an emergency motion was filed with the Ninth Circuit to stay enforcement of the order. That motion was promptly denied. (ECF No. 150.) Prenda now seeks to remedy a problem of their own making. By refusing to pay, or at least refusing to post a supersedeas bond, Prenda (and the other parties) cannot establish that it “is without fault in creating the crisis that requires ex parte relief, or that the crisis occurred as a result of excusable neglect.” Mission Power Eng’g Co. v. Cont’l Casualty Co., 883 F. Supp. 488, 492 (C.D. Cal. 1995). Prenda’s application is therefore DENIED.

Further, Steele, Hansmeier, Duffy, Gibbs, AF Holdings, Ingenuity 13, and Prenda are hereby ORDERED TO SHOW CAUSE why they have contravened the Court’s order to pay the attorney’s-fee award. The Court hereby imposes a penalty of $1,000 per day, per person or entity,1 until this attorney’s-fee award is paid or a bond for the same amount is posted. This penalty shall be paid to the Clerk of Court on the same day the attorney’s-fee award is paid or the bond is posted. This penalty must be paid unless it is evident that the award was paid or the bond was posted on or before May 20, 2013. Failure to comply will result in additional sanctions.

Upon motion and posting of a supersedeas bond, the Court will stay execution of the attorney’s-fee award. Fed. R. Civ. P. 62(d).

Finally, as a housekeeping matter, the Court requests Brett Gibbs to file requests for withdrawal of attorney in this and the related cases. Brett Gibbs appears to have withdrawn from these cases. (OSC Hr’g Tr. 87:1–8, Mar. 11, 2013 (“I am no longer employed by Prenda or any other corporation or LLC that is involved in these cases.”).) Given the circumstances and the relationship between Gibbs and his clients, the Court will approve his requests for withdrawal.

IT IS SO ORDERED.
And so it is. Perhaps, rather than spending so much time talking to the press, John Steele should have been counting his pennies to pay up.


Reader Comments (rss)

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    Anon E. Mous (profile), May 21st, 2013 @ 4:10pm

    LOL I didn't think that Judge Wright was going to issue a stay. The fact that they tried to get Judge Wright removed off this case, then they tried to dismiss the case before him, then fought to avoid having to appear before Judge Wright with a litany of excuses, then tried to end run an appeal in Judge Wrights's court room with a straight Appeal to the 9th Circuit Court, and then calling Judge Wright out in their filings to the 9th Circuit Court....I cant imagine why it didn't go well.

    But I do love the fact that Judge Wright tacked on that 1k a day penalty per entity, wonderful sense of righteousness this no nonsense judge has.

    I wonder how long the Prenda gang will try to avoid paying this, I honestly don't see them escaping even if they plead poverty I still see them being liable for the sanction order and the fines and penalties within it.

    They better crank up the Professional class action objectors program and start the shakedowns - er - I mean objection notices, there going to need the cash!

    But those couldn't happen to a bunch of better people, congrats John et all !

     

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    Average_bLUe, May 21st, 2013 @ 4:10pm

    The downward spiral begins...

     

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    Anon E. Mous (profile), May 21st, 2013 @ 4:15pm

    Oh btw Steele, I know your a little hard up for cash since your not practising law, and had to trade in you matte grey BMW for that 77 LeCar, but I was thinking you could always apply at Wal-Mart.

    If you think that's a little beneath you, consider ordering Kevin Trudeau's book called free money. Just need your credit card. You'll like Kevin, you and he have a LOT in common.

     

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      Gothenem (profile), May 21st, 2013 @ 6:18pm

      Re:

      I think that he is beneath Wal-Mart. In fact, Wal-Mart would take one look at him and say "Nope. This guy is not what we are looking for. He does not meet our standards."

       

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    sophisticatedjanedoe (profile), May 21st, 2013 @ 4:18pm

    Today is a bumpy day. This order can easily make one's day if not for the mixed feelings regarding the Cooper v. Prenda default hearing, and another event: today Judge Chen, who could become a second Wright, issued a strange order, which indicated that he bought Lutz's bullshit. I don't know what to think about it.. trying to be optimistic, I hope that his reasoning was something like "I have other stuff to do, and since there is a criminal investigation going on, let's not duplicate the efforts."

     

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      Anon E. Mous (profile), May 21st, 2013 @ 4:32pm

      Re:

      Hi SJD I would suffice a guess that Judge Chen thought their was a chance of probability to Lutz's story in reference to the Salt Marsh Signature fiasco.

      I do think you are right though that Judge Chen may have decided not to move forward with any penalties due to the fact that Judge Wright has already started the proverbial hammer starting it's fall on Team Prenda.

      That being said I don't know if Team Prenda will escape unscathed from Judge Chen. I would think Judge Chen is smart enough to know that something smells with this, but I believe he was looking at it from the potential of their being an appeal.

      It could be construed as an honest mistake from a CEO who is not too smart (Paging Mark Lutz)I think Judge Chen would rather let them skate on this one, knowing full well they are in serious trouble elsewhere in the state and all over the country.

      While they may have escaped this one, I think we all know the noose is becoming a lot tighter

       

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    Anon E. Mous (profile), May 21st, 2013 @ 4:21pm

    " Further, Steele, Hansmeier, Duffy, Gibbs, AF Holdings, Ingenuity 13, and Prenda are hereby ORDERED TO SHOW CAUSE why they have contravened the Court’s order to pay the attorney’s-fee award. The Court hereby imposes a penalty of $1,000 per day, per person or entity,1 until this attorney’s-fee award is paid or a bond for the same amount is posted. This penalty shall be paid to the Clerk of Court on the same day the attorney’s-fee award is paid or the bond is posted. This penalty must be paid unless it is evident that the award was paid or the bond was posted on or before May 20, 2013. Failure to comply will result in additional sanctions. "

    Judge Wright really ought to consider wearing a cape to court. I don't throw around the word Hero very often, but this man is one of mine. Awesome!

     

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    AG Wright, May 21st, 2013 @ 4:25pm

    The story that just keeps on giving

    Law students should study this as an example of how to really piss off a bunch of judges.
    Everything on what not to do in one series of decisions.

     

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    • This comment has been flagged by the community. Click here to show it
       
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      horse with no name, May 21st, 2013 @ 5:42pm

      Re: The story that just keeps on giving

      They didn't piss off a bunch of judges. They have one judge who is trying to bully from the bench and make an example, by being investigator, judge, and jury all in one. That's never a good thing.

      Adding more money per day on top makes the judge look even more vindictive, never good.

       

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        sophisticatedjanedoe (profile), May 21st, 2013 @ 6:07pm

        Re: Re: The story that just keeps on giving

        John Steele agrees. Right after the April 2 hearing he told to his mates off the record that the judge was immature.. like teenager... 14 years old.

        Don't ask me how I know.

         

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          JackOfShadows (profile), May 22nd, 2013 @ 12:15am

          Re: Re: Re: The story that just keeps on giving

          Let me guess... wearing bunny slippers and living in his parents basement?

           

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            That Anonymous Coward (profile), May 22nd, 2013 @ 6:25pm

            Re: Re: Re: Re: The story that just keeps on giving

            nope, but I'm willing to bet he is currently trying to remember where he was and with whom when he said those stupid things.

             

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        identicon
        Anonymous Coward, May 21st, 2013 @ 6:11pm

        Re: Re: The story that just keeps on giving

        So what's Judge Ann Alton to you? Chopped liver?

        John Steele was the one who wanted to brag about making millions per day, and chose to drag his feet on revealing information, then publicly whine that the judge hates copyright. You do the math. Vindictive judges for vindictively uncooperative plaintiffs.

         

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        steell (profile), May 21st, 2013 @ 6:15pm

        Re: Re: The story that just keeps on giving

        BS, I can think of at least four judges, plus possibly the appeals court. And I bet there are more.
        By the way, the Prenda team forced those actions on the judge.

         

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        Baldaur Regis (profile), May 21st, 2013 @ 6:38pm

        Re: Re: The story that just keeps on giving

        The story you're trying to sell - that events exist without context, that judges should be uninformed and ignorant of related events pertinent to the matters before them - has been a key strategy of every IP troller. They rely on the fact that judges are as hard pressed to keep up with current events as everyone else. Working in perfect darkness, where they alone control the dialog, is the trollers' Platonic ideal.

        Prenda's operations have become so noisome they have been thrust into daylight. It is not "just one judge" now. So what would you call more than one judge? A bunch of judges? A posse of judges? A banc of judges? To Prenda & Co., I imagine they are simply called: trouble.

         

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        Anonymous Coward, May 21st, 2013 @ 6:55pm

        Re: Re: The story that just keeps on giving

        They didn't piss off a bunch of judges. They have one judge
        So you've forgotten Florida, Minnesota and last week's appeals court already? If your memory is that bad it's no wonder you're doing so poorly, John. One of the first things about telling lies is that you need to remember who you told what to, otherwise you end up - well, you end up where you are right now.
        who is trying to bully
        You keep using that word. I do not think it means what you think it means.
        being investigator, judge, and jury all in one.
        Yeah, just keep telling yourself that. Maybe one day you'll believe it.

         

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        apauld (profile), May 21st, 2013 @ 7:40pm

        Re: Re: The story that just keeps on giving

        You really are f@&%ing stupid. But okay, keep being an idiot, don't learn how wrong you are, oh, and step out in front of that moving train...

         

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        Anonymous Coward, May 21st, 2013 @ 8:02pm

        Re: Re: The story that just keeps on giving

        You know, you really should change your alias here. For someone defending these assholes, horse with no shame is much more fitting.

         

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        Anonymous Coward, May 21st, 2013 @ 8:59pm

        Re: Re: The story that just keeps on giving

        I would seriously hope you'd attempt to learn the law properly, especially after the last article.

        In a civil trial with no jury, the judge is judge and jury. And when it comes to admitting evidence, he is also investigator...a judge is in charge of reviewing all evidence. If he simply accepts documents and testimony with no overview, he is failing at his job.

        The extra money penalty is punishment for 1) completely and utterly failing to follow proper channels for such things, and 2) to enforce the deadline.

        Yet again, if Prenda chose to follow proper legal procedure they might have received a stay. If they posted bond at the deadline, there would be no additional fines. But they failed to do both, despite what proper procedure and basic common sense should tell them.

         

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        Anonymous Coward, May 21st, 2013 @ 9:09pm

        Re: Re: The story that just keeps on giving

        Thank you for sharing your ignorance of what judges actually do.

         

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        Anonymous Coward, May 21st, 2013 @ 9:50pm

        Re: Re: The story that just keeps on giving

        It is a judge's job to know when lawyers are in contempt of court and deserve to be sanctioned - this was not about copyright, this was about unethical, fraudulent behavior before the court, by a bunch of crooked lawyers who were abusing the court process as a business scheme.

         

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        Anonymous Coward, May 21st, 2013 @ 11:13pm

        Re: Re: The story that just keeps on giving

        Violating the rights of others will always entail your rights being revoked if you're the one doing committing the violation.

         

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        DannyB (profile), May 22nd, 2013 @ 7:12am

        Re: Re: The story that just keeps on giving

        It just so is unfair that judges are so biased against perpetrating multiple simultaneous frauds upon the court while using the court as a tool in an extortion shakedown.

        This bias on the part of the judges is brazenly obvious.

        This bias is unfair to the plaintiff/lawyers (who are one and the same party although separated by a tangled web of paper shell companies). This bias prevents the plaintiff from pursuing the much needed mailing list of identities for sending out threatening extortion letters.

         

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        btr1701 (profile), May 22nd, 2013 @ 11:51am

        Re: Re: The story that just keeps on giving

        > They have one judge who is trying to bully
        > from the bench and make an example, by being
        > investigator, judge, and jury all in one.

        And yet nothing Wright cited here is false.

        Prenda did file an 11th-hour appeal with the wrong court.

        They did create the crisis for which they're now seeking relief.

        The judge was perfectly correct to deny their motion and sanction them for non-compliance.

         

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    Matthew Cline (profile), May 21st, 2013 @ 4:31pm

    IT IS SO ORDERED.
    Make it so, Number One.

     

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    radarmonkey (profile), May 21st, 2013 @ 4:44pm

    >>$1k/day

    The Court hereby imposes a penalty of $1,000 per day, per person or entity...
    So, that means for the four (4) persons (e.g., Steele, Hansmeier, Duffy, & Gibbs), and three (3) entities (e.g., AF Holdings, Ingenuity 13, and Prenda), that are specifically called out at the beginning of the same paragraph, that's $7,000 per day they are on the hook for! WOW!

     

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      apauld (profile), May 21st, 2013 @ 5:14pm

      Re: >>$1k/day

      except he also seems to be releasing Gibbs from all this nonsense, so I have to wonder what is Gibbs responsibility now?

       

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        radarmonkey (profile), May 21st, 2013 @ 5:46pm

        Re: Re: >>$1k/day

        I would venture to guess it's just the judge saying 'submit your motion to be released as counsel of record' .... but he's still on the hook for all the sanctions, as are everyone else.

         

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        Anonymous Coward, May 21st, 2013 @ 6:15pm

        Re: Re: >>$1k/day

        Gibbs is still on the hook. What Judge Wright is doing is, as he says, a bit of housekeeping. Gibbs is apparently still on file as one of Prenda's attorneys in this case, despite apparently no longer being one of their attorneys. Wright was asking for him to formally file for withdrawing from the case as it's lawyer to straighten out that bit of oddness.

         

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    kenichi tanaka (profile), May 21st, 2013 @ 4:51pm

    Without commenting on Prenda's legal matters, every attorney knows that it is required to go through the process of appealing any decision handed down by any judge. They cannot jump or skip through the appeals process.

    This is a lesson that they should have paid attention in regards to the fight over Obamacare. Even though attorneys are aware that certain courts will refuse to grant their motions, they are still required, by law, to go through the long and very drawn out appeals process.

    Instead, Prenda tried to skip several hoops by going straight to the appeals court which slapped down their obvious subterfuge. Now, they have to pay an additional $1,000 per day fine past the date they were supposed to pay that judgment that Judge Otis Wright handed down.

     

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    Ken, May 21st, 2013 @ 5:11pm

    how do i law?

    Paul Hansmeier filed a joinder in Prenda's motion after Judge Wright had already denied it. They really are the A team.

     

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      DannyB (profile), May 22nd, 2013 @ 7:06am

      Re: how do i law?

      Paul must have wanted to be sure he was included in any additional sanctions that might be issued for failure to pay the previous sanction.

       

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    Susan, May 21st, 2013 @ 5:39pm

    Gibbs is specifically named as owing the penalty.

     

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    Anonymous Coward, May 21st, 2013 @ 5:47pm

    This is some of the best news I've read on Techdirt eva! :)

     

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    Anonymouse, May 21st, 2013 @ 5:58pm

    GIbbs

    I am wondering if Gibbs may not become a "friend of the court" or a witness against Preda in future legal wranglings. I would not be surprised as Steele seems to be trying to blame him for everything and his only option really is to come clean and admit everything in the hope of just losing his license to practice law.

    I just hope he has paperwork that can be used to prove that the court has been lied to and that Steele and Hammershite are and have been lying to the court. If he can identify where all the money went i am sure the court will be able to seize most of it if this is not resolved soon. Saying that i wonder if they have all transferred ownership of their assets to their wives and other business partners.

    If i was anyone they knew i would be telling them to keep me out of it all and to stay away from me until this is all resolved. I am sorry but when they have already thrown friends under the buss i would not be taking a chance that i was going to be next.

    That is unless they gave me a few million to look after for them, then i would be transferring it and moving out of the country to retire in some place they could not find me.

     

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      Anon E. Mous (profile), May 21st, 2013 @ 6:52pm

      Re: GIbbs

      Gibbs knows he is still in deep doo, he has a compliant before the state bar where a federal Judge has referred to a pattern of conduct unbecoming basically.

      Now on top if that Gibbs (who is supposedly out of work, but I still think he is working for Prenda) has this portion of 81k plus 1k a day that it is late.

      Gibbs had already turned over an affadavits in the Florida Sunlust vs Nyugen case where he basically singled out John "Teflon John" Steele & Paul Duffy as the senior Prenda partners giving Gibbs his instructions on almost every aspect of the case.

      Gibbs in my estimation is the first Person I see State & Federal Prosecutors going to for a deal after they get a grand jury indictment for RICO.

      Really what options does Gibbs have left? Prenda is throwing him under the bus, and basically saying he is incompetent and they had no idea that he was mis-handling this case and the courts directives.

      Gibbs job prospects are pretty well shot. Who is going to hire someone that was associated with Prenda and John Steele after everything that has come down through the courts and has been reported in the media.

      I see Gibbs being the first one to fold and give up everyone else, especially Teflon John. You have to remember that Gibbs will be lucky if he has a licence to chase ambulances when this is said and done.

      John still has his licence (miracle that is mind you) even though it may be inactive (Teflon John is supposedly retired but I think that may have been a forced retirement, but I highly doubt he is retired, I just think he practices under the radar ~nudge nudge wink wink~)

      I predict if the feds can bring down a RICO indictment there are going to be people scurrying for cover and striking a deal and I see Gibbs first up to save his ass and to extract a little revenge on Steele et all for hanging him out to dry.

      Time will tell of course this is just my opinion, but hey even I am entitled to dream!

       

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    sophisticatedjanedoe (profile), May 21st, 2013 @ 6:09pm

    Hey, John Steele, where is the promised "a lot of egg on people's faces"???

     

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      Anon E. Mous (profile), May 21st, 2013 @ 6:57pm

      Re:

      Probably has the eggs packed up for that move to a non extradition country.

      Don't you worry John I am sure is sitting with his Barbie doll in the basement that has SJD scribbled on a post-it-note attached to it and sticking pins into it for revenge.

      John takes criticism well and always respects everyones opinion and has nothing but highest moral regard for the law...

       

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      That Anonymous Coward (profile), May 21st, 2013 @ 11:04pm

      Re:

      Hey now thats unkind...
      He might be subhuman scum, but he's still a people...

      :D

       

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    sorrykb (profile), May 21st, 2013 @ 6:31pm

    "But your honor, it's not FAIR! We gave the $81K to our boss Alan Cooper and he PROMISED to turn it in!"

     

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    Anonymous Coward, May 21st, 2013 @ 8:40pm

    In The Steele Residence...

    "Hi honey. How was your day?"

    "Mpph. Another day, another Order To Show Cause. Did you pack up those suitcases yet?"

    "I'm trying, but those porno dollars are so...sticky."

     

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    Anonymous Coward, May 21st, 2013 @ 8:43pm

    In The Wright Residence...

    "Hi honey, I'm home! What's for dinner?"

    "Oh, we're still working on that big can of whup-ass you opened up earlier, you handsome man you."

     

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    sharp as a marble, May 21st, 2013 @ 10:09pm

    more than one judge?

    don't forget the judge in the harris case in AZ ( http://dietrolldie.com/2013/05/14/mr-harris-pro-se-doe-rejoins-the-fight-af-holdings-llc-v-harris-21 2-cv-02144-az/ ) who's answer to show cause order is due in 3 days, that case could easily become another wright case.

     

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      That Anonymous Coward (profile), May 21st, 2013 @ 11:05pm

      Re: more than one judge?

      hola sharp...

      I do hope that the Judge in the Harris case finds Mr. Harris's outrage appropriate for the situation and overlooks some of the more colorful wording.

       

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    Yet Another Anonymous Coward, May 21st, 2013 @ 10:20pm

    Is it time for Celine Dion to start singing yet?

     

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      DannyB (profile), May 22nd, 2013 @ 7:00am

      Re:

      That is unconstitutionally cruel and unusual punishment, even as an enhanced interrogation technique.

      Therefore the court ORDERS that we be allowed the relief of listening to crying screaming children on Mondays, nails being dragged across chalk boards on Wednesdays and sounds of people vomiting on Fridays.

       

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    Anonymous Coward, May 21st, 2013 @ 11:18pm

    Does the US not have Debt Sheriffs?

    For reference, a Debt Sheriff is permitted to break in to commercial premises and have the powers of full seizure to possess items in order to settle a debt.

    They might be useful with this hive of scum and villainy.

     

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      ltlw0lf (profile), May 22nd, 2013 @ 9:02am

      Re:

      Does the US not have Debt Sheriffs?

      Kinda, we have debt collectors, bounty hunters and repossessors, But they are usually commercial entities with no law enforcement powers and very strict rules on what they can do (which they often break.) The Sheriff or Marshall is usually responsible for seeing that the orders of the court are enforced.

      They might be useful with this hive of scum and villainy.

      Considering the characters above, this would be like a Chronicles of Riddick moment where you use one evil to take out another evil. I wouldn't wish debt collectors, bounty hunters, or repossessors on anyone...talk about a hive of scum and villainy.

       

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    DannyB (profile), May 22nd, 2013 @ 6:57am

    A plan for Prenda

    If Prenda could just get fifteen victims to send them $7,500 in extortion money, they could pay the sanction and still have enough left over to flee jurisdiction.

     

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      That Anonymous Coward (profile), May 22nd, 2013 @ 6:27pm

      Re: A plan for Prenda

      Which would explain why letters dated the same date as the order, and hastily scanned crooked, were sent out from a firm that the state had already closed down...

       

      reply to this | link to this | view in chronology ]

  •  
    icon
    DannyB (profile), May 22nd, 2013 @ 7:23am

    It is actually $7000 per day

    In feetnote 1 on page 2 of the order, judge Wright makes it clear who the $1000/per day/per individual applies to.

    1 That is, Steele, Hansmeier, Duffy, Gibbs, AF Holdings, Ingenuity 13, and Prenda.

     

    reply to this | link to this | view in chronology ]


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