Because AF's counsel has now substantially complied with the Court's order, the Court sees no basis to continue deferring a final judgment.

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 Brett Gibbs appears to have withdrawn from these cases.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.

The need for a substantial bond to secure payment of costs and fees from Prenda is not an idle request. Prenda Law, Inc. and its associated lawyers are an organization that is rapidly falling apart. They have dismissed the vast majority of their pending court cases across the country—cases which are their sole source of revenue. Meanwhile, as the days go by, they are increasingly being hit with new motions and orders to show cause for sanctions in various courts where they have tried, with mixed success, to escape from the consequences of their actions. Further, the lawyers and the entities involved here are likely the subject of potential criminal investigations, including an IRS investigation, flowing from the court’s formal referrals in the sanctions order below. In short, there may not be any solvent persons around to collect from for much longer. Further, as will be detailed in briefing on the merits, the lawyers’ interests in these cases (as well as their assets, one presumes) are hidden behind a web of Nevis LLC’s and mysterious offshore trusts. These are all complicated factual issues, with which the district court is already familiar, which is why the district court should set the amount and terms of the bond

Appellant's emergency motion for a stay of the district court’s May 6, 2013 sanctions order is denied without prejudice to renewal, if necessary, upon the filing and disposition of such request in the district court. See Fed. R. App. P. 8(a)(1).

In other words: no, Paul, you can't have admission to the Ninth Circuit until this is cleared up, and we won't let you represent a client before us in the interim.

Actions have consequences.

As of this date, no responsive memorandum has been filed. LRCiv 7.2(i) provides in part “if the opposing party does not serve and file the required answering memorandum, ...such noncompliance may be deemed a consent to the denial or granting of the motion and the Court may dispose of the motion summarily.” Pursuant to this rule, the Court deems Plaintiff's failure to serve and file the required answering memorandum a consent to the granting of Defendant-Movant's Motion to Quash the Subpoena to Wild West Domains Seeking Identity Information.

Then they offer to settle—for a sum calculated to be just below the cost of a bare-bones defense

This punitive portion is calculated to be just below the cost of an effective appeal.

Steele, Hansmeier, and Duffy (“Principals”) are attorneys with shattered law practices. Seeking easy money, they conspired to operate this enterprise and formed the AF Holdings and Ingenuity 13 entities (among other fungible entities) for the sole purpose of litigating copyright-infringement lawsuits. They created these entities to shield the Principals from potential liability and to give an appearance of legitimacy.

AF Holdings and Ingenuity 13 have no assets other than several copyrights to pornographic movies. There are no official owners or officers for these two offshore entities, but the Principals are the de facto owners and officers.

The Principals started their copyright-enforcement crusade in about 2010, through Prenda Law, which was also owned and controlled by the Principals. Their litigation strategy consisted of monitoring BitTorrent download activity of their copyrighted pornographic movies, recording IP addresses of the computers downloading the movies, filing suit in federal court to subpoena Internet Service Providers (“ISPs”) for the identity of the subscribers to these IP addresses, and sending cease-and-desist letters to the subscribers, offering to settle each copyright infringement claim for about $4,000.

This nationwide strategy was highly successful because of statutory copyright damages, the pornographic subject matter, and the high cost of litigation. Most defendants settled with the Principals, resulting in proceeds of millions of dollars due to the numerosity of defendants. These settlement funds resided in the Principals’ accounts and not in accounts belonging to AF Holdings or Ingenuity 13. No taxes have been paid on this income.

For defendants that refused to settle, the Principals engaged in vexatious litigation designed to coerce settlement. These lawsuits were filed using boilerplate complaints based on a modicum of evidence, calculated to maximize settlement profits by minimizing costs and effort.

The Principals have shown little desire to proceed in these lawsuits when faced with a determined defendant. Instead of litigating, they dismiss the case. When pressed for discovery, the Principals offer only disinformation—even to the Court.

The Principals have hired willing attorneys, like Gibbs, to prosecute these cases. Though Gibbs is culpable for his own conduct before the Court, the Principals directed his actions. In some instances, Gibbs operated within narrow parameters given to him by the Principals, whom he called “senior attorneys.”

The Principals maintained full control over the entire copyright-litigation operation. The Principals dictated the strategy to employ in each case, ordered their hired lawyers and witnesses to provide disinformation about the cases and the nature of their operation, and possessed all financial interests in the outcome of each case.

The Principals stole the identity of Alan Cooper (of 2170 Highway 47 North, Isle, MN 56342). The Principals fraudulently signed the copyright assignment for “Popular Demand” using Alan Cooper’s signature without his authorization, holding him out to be an officer of AF Holdings. Alan Cooper is not an officer of AF Holdings and has no affiliation with Plaintiffs other than his employment as a groundskeeper for Steele. There is no other person named Alan Cooper related to AF Holdings or Ingenuity 13.

The Principals ordered Gibbs to commit the following acts before this Court: file copyright-infringement complaints based on a single snapshot of Internet activity; name individuals as defendants based on a statistical guess; and assert a copyright assignment with a fraudulent signature. The Principals also instructed Gibbs to prosecute these lawsuits only if they remained profitable; and to dismiss them otherwise.

Plaintiffs have demonstrated their willingness to deceive not just this Court, but other courts where they have appeared. Plaintiffs’ representations about their operations, relationships, and financial interests have varied from feigned ignorance to misstatements to outright lies. But this deception was calculated so that the Court would grant Plaintiffs’ early-discovery requests, thereby allowing Plaintiffs to identify defendants and exact settlement proceeds from them. With these granted requests, Plaintiffs borrow the authority of the Court to pressure settlement.

Gibbs’s statement is a blatant lie. His statement resembles other statements given by Plaintiffs in this and their other cases: statements that sound reasonable but lack truth. Thus, the Court concludes that Gibbs, even in the face of sanctions, continued to make factual misrepresentions to the Court.

• They have to pay the defendant's legal fees of $40,659.86, which he then doubles "as a punitive measure" to $81,319.72, noting "This punitive multiplier is justified by Plaintiffs’ brazen misconduct and relentless fraud."
• He notes that "The Principals, AF Holdings, Ingenuity 13, Prenda Law, and Gibbs are liable for this sum jointly and severally, and shall pay this sum within 14 days of this order." Basically, all of them together are responsible for figuring out how to pay the money. As defined earlier, Steele, Hansmeier and Duffy are "the Principals" though I wouldn't put it past the three of them to claim that they are non-parties to all of this and thus not responsible for the payment.
• The bigger issue: referring the conduct of Steele, Hansmeier, Duffy and Gibbs to various state and federal bars. As Wright notes: "there is little doubt that that Steele, Hansmeier, Duffy, Gibbs suffer from a form of moral turpitude unbecoming of an officer of the court." That won't look good on a resume.
• The even bigger issue: alerting the feds of possible racketeering violations:

  though Plaintiffs boldly probe the outskirts of law, the only enterprise they resemble is RICO. The federal agency eleven decks up is familiar with their prime directive and will gladly refit them for their next voyage. The Court will refer this matter to the United States Attorney for the Central District of California. The will also refer this matter to the Criminal Investigation Division of the Internal Revenue Service and will notify all judges before whom these attorneys have pending cases. For the sake of completeness, the Court requests Pietz to assist by filing a report, within 14 days, containing contact information for: (1) every bar (state and federal) where these attorneys are admitted to practice; and (2) every judge before whom these attorneys have pending cases.

• And, finally, a smaller issue: Duffy and Gibbs, who are admitted to practice in California are referred to the "Standing Committee on Discipline." That's a relatively minor point given all of the above.

All of Ken's coverage of the Prenda Law saga is collected here.

When it comes to getting angry in federal court, perhaps I should not throw the first stone. After all, just a few days ago a federal judge was moved to tell me "Mr. White, calm down, you aren't arguing to a jury." [The result was nonetheless quite satisfactory, thank you.] And I rely upon partners and associates to tone my written work down. (A memorable example: "The SEC's proposed jury instructions find no support in the law or the facts of the case" is acceptable, "The jury instructions are not a vehicle for the SEC's attorneys to work out their self-esteem issues" is not.)

Nevertheless, I will offer this advice: don't file angry.

Attorney Jacques Nazaire, local counsel for Prenda Law putative client AF Holdings, has done just that down in Georgia. The result is not pretty.

I previously wrote about how Mr. Patel, a defendant in an AF Holdings case in federal court in Georgia, sought sanctions in response to AF Holdings' dismissal of the case. Jacques Nazaire has filed a very angry response and cross-motion for sanctions, together with Exhibit A, Exhibit B, and Exhibit C. As we shall see, one of those is an extremely ill-considered declaration from mysterious Prenda Law figure Mark Lutz.

Many of Mr. Nazaire's arguments are now familiar: he says that there's nothing wrong with undisclosed attorney interests in plaintiff entities so long as the judge is not presented with a conflict of interest, and he repeats the now-familiar argument that it doesn't really matter if Alan Cooper's signature was forged on a copyright assignment.

But he also makes some interesting new arguments.

Underpants Gnome Logic

If I may briefly summarize a key component of Mr. Nazaire's argument:

1. We had a highly meritorious case against Mr. Patel.
2. Moreover, he defaulted, and that default should have stuck.
3. Plus he's made admissions that show he's liable.
4. ???
5. So we've dismissed the case with prejudice, and there's nothing to see here, other than to note how strong our case was.

Well okay then.

How Dare You Say I'm Brett Gibbs' Lackey!

Amongst other things, Mr. Nazaire is very irritated at the suggestion that he was taking orders from Prenda Law figure Brett Gibbs, and wants you to know that he is his own man, exercising his own judgment:

From what has been put forth, Brett Gibbs is a fairly new attorney much like Defendant’s counsel. The undersigned, on the other hand, has over 16 years experience practicing law, has settled over millions of dollars worth of cases, including state and federal cases and has also served in Afghanistan as a Foreign Claims Commissioner, settling foreign claims in a war zone.

The undersigned would not assign Brett Gibbs to negotiate a left turn with his vehicle, let alone a settlement on behalf of a client, regardless of whether the case was venued in Georgia, California or Afghanistan. While Gibbs may be a pleasant young man, to assert that Plaintiff’s attorney takes orders from Brett Gibbs is absurd and laughable.

I'm sure Mr. Nazaire is very highly qualified. After all, as Fight Copyright Trolls points out, only a highly-qualified lawyer would advertise on Craigslist to make court appearances at $125 a pop. Craigslist is widely respected as the best place to find an experienced litigator, a gently-used futon, or someone to dress up like Herman Goering and poop on you.

That aside, Mr. Nazaire's argument that he's not taking orders from anybody is an odd strategic choice under these circumstances. I appreciate his choice not to blame problems on Brett Gibbs. I appreciate the creativity of pulling Brett Gibbs out from under the bus in order to tell him that he sucks. But I'm not sure about the full-throated "I'm in charge but there's nothing to see here" approach by a local counsel at this point, once Prenda Law's principals have taken the Fifth. Has Mr. Nazaire truly slaked his thirst with the Prenda Kool-Aid? Or is he very politely sparing Mssrs. Steele, Hansmeier, and Duffy the bother of throwing him under a bus, as they have rather unconvincingly done to Brett Gibbs? How very collegial.

EFFFFFFFF! From Hell's Heart I Stab At Thee!

Mr. Nazaire, like many Prendateers, is very upset with the Electronic Frontier Foundation. He accuses Mr. Patel's lawyer of being associated with EFF, which he describes like it's some kind of terrorist group:

One other important fact for the Court to consider is Chintella’s role as a panel attorney for the Electronic Frontier Foundation (“EFF”). (See https://www.eff.org/issues/file-sharing/subpoena-defense). The overriding mission of the EFF has been to shield the Internet from effective regulation—“defending it from the intrusion of territorial government.” Jack L. Goldsmith & Tim Wu, Who Controls the Internet?: Illusions of a Borderless World 18 (2006). This mission relies on undermining effective enforcement of intellectual property rights. Purporting to speak on behalf of “cyberspace,” a co-founder of EFF (who presently serves on its board of directors) has warned the “Governments of the Industrial World” that “[y]our legal concepts of property, expression, identity, movement, and context do not apply to us.” John Perry Barlow, A Declaration of the Independence of Cyberspace (Feb. 8, 1996), available at https://projects.eff.org/~barlow/Declaration-Final.html (as of April 17, 2013).

The EFF is a left wing organization which has some of the same goals as the anti-government group “Anonymous” as well as the terrorist group “Wikileaks”.

It is amusing, in a dark way, that Prenda Law and its local counsel continue to portray themselves as the righteous defenders of intellectual property rights. Were that so, you might find support for them amongst attorneys and organizations in the business of bittorrent litigation and other pursuits of online pirates. You won't. At most, you'll find consternation that the Prenda Law enterprise has inflicted a grave wound upon the credibility of online piracy litigation across the United States.

Mr. Nazaire further accuses the EFF of witness tampering — excuse me, witness "tempering" — because he hears they paid for Alan Cooper's travel to and from Los Angeles. He demands:

4) An order requiring Defendant’s counsel, who is a member of the Electronic Frontier Foundation (EFF) to disclose the total amount of monetary benefits received by Alan Cooper from the EFF and its members, agents, colleagues and followers. Should the case not be dismissed, an order scheduling a hearing into possible witness tempering [sic] by the EFF.

Mr. Nazaire explains:

Additionally, it is reported on the internet that Mitch Stoltz, a staff attorney with the EFF has stated that EFF took care of Cooper’s travel arrangements to testify in a California case. As such, any statements made by Mr. Cooper should be suspect. There is no evidence to suggest that Mr. Cooper has worked an honest day in his life. Rather, it appears that Mr. Cooper has spent his lifetime depending on the kindness of others. Logic dictates that the more Mr. Cooper testifies against those opposed to the EFF, the longer he is allowed to travel from state to state.

There are several things you should note about this argument.

First, notice the alacrity with which Mr. Nazaire traipses from "Mr. Patel's claims are speculation not supported by evidence" to "it is reported on the internet."

Second, remember the context. Alan Cooper didn't travel to Los Angeles for kicks. He didn't travel as a voluntary witness to support allies. He went because United States District Judge Otis D. Wright II ordered him to appear. There seems to be no dispute that he's a man of modest means. His testimony made it clear that he finds the whole experience confounding and terrifying. The evidence suggests he was repeatedly threatened with legal ruin by the slick, entirely vile John Steele. Plus, despite Mr. Nazaire's insinuation, there is no indication he's gone anywhere else to testify, let alone been paid by the EFF to do so. Under the circumstances, the EFF funding an involuntary witnesses' travel — an involuntary witness who may be the victim of identity fraud — is a mitzvah. I leave it to reader to assess the relative character of the EFF for doing it and Mr. Nazaire for attacking it.

Third, consider where Mr. Nazaire's comments leave us with respect to Prenda Law's position on Alan Cooper: even if you take everything they say at face value (a prospect that exhausts the world's bounteous supply of drooling credulity), it means that AF Holdings chose, as an officer or representative to sign its crucial legal documents, a man who has not "worked an honest day in his life" and is mentally ill and dangerous. Nevertheless, they would have you believe, you should accept AF Holdings as a legitimate enterprise and the lawyers conducting litigation on its behalf as trustworthy. How appealing does that sound to you?

I Did It For The Lutz

Responding to accusations that AF Holdings is a front for Prenda Lawyers, Mr. Nazaire supplies an undated affidavit from Prenda Law paralegal Mark Lutz. Mr. Lutz swears that a trust called "Salt Marsh" owns AF Holdings, and that the beneficiaries of "Salt Marsh" are Mr. Lutz's hypothetical and yet-unborn future children. (Damn you, Prenda, for making me refresh my memory of the horror that is the Rule Against Perpetuities!)

You may recall that Paul Hansmeier — offered by Prenda Law as AF Holdings' witness most knowledgeable about its origins and ownership — was unable to explain the nature or beneficiaries of the trust.

Let's sum up, then, what we know about Mark Lutz, and by extension AF Holdings. Mr. Lutz has been identified as a former paralegal for Steele & Hansmeier, a predecessor to Prenda Law. He showed up in court as a "corporate representative" of another Prenda Law entity, Sunlust, resulting in this thoroughly embarrassing exchange:

THE COURT: Mr. Lutz, you're under oath, you have to give truthful answers or you face penalties of perjury. Do you understand that?
MR. LUTZ: Yes.
THE COURT: What is your position with Sunlust?
MR. LUTZ: I'm a representative of them.
THE COURT: What does that mean?
MR. LUTZ: Corporate representative.
THE COURT: What does that mean?
MR. LUTZ: They asked me to appear on various matters throughout the country.
THE COURT: Are you an officer of the company?
MR. LUTZ: I'm not, no.
THE COURT: Are you authorized to bind the company to any legal contracts?
MR. LUTZ: I am not.
THE COURT: Are you salaried?
MR. LUTZ: No, 1099.
THE COURT: So you are a 1099 contracted entity and you just go around and sit in a Court and represent yourself to be the corporate representative of the company?
MR. LUTZ: Yes.
THE COURT: Mr. Torres, did you know this was Mr. Lutz's position, a paid corporate representative?
MR. TORRES: No, Your Honor, I did not.
THE COURT: Who is the president of Sunlust?
MR. LUTZ: I'm unaware.
THE COURT: Who is the vice president?
MR. LUTZ: I'm unaware
THE COURT: Who is the secretary?
MR. LUTZ: I have no idea.
THE COURT: Who owns Sunlust?
MR. LUTZ: I do not know.
THE COURT: Who signs your checks?
MR. LUTZ: I believe somebody in the accounting department.
THE COURT: What is their name?
MR. LUTZ: To be honest with you, I can't read the signature.
THE COURT: Where is the accounting department located?
MR. LUTZ: I'm sorry?
THE COURT: Where is the accounting department located?
MR. LUTZ: I've received checks from California.
THE COURT: How much are you paid monthly to be the corporate representative?
MR. LUTZ: Again, it depends on my appearances, the number of appearances that I do.
THE COURT: How much were you paid last month?
MR. LUTZ: Approximately $1,000.

Moreover, Paul Hansmeier — acting as AF Holdings' most knowledgeable person (not, it would seem, a particularly high bar) testified that Lutz is the CEO or "manager" of AF Holdings, but is not paid anything for that position, and despite being AF Holdings' sole employee, has arranged for Alan Cooper (whom Prenda Law now says is a crazy violent ne'er do well) to sign copyright assignments on behalf of AF Holdings, because Mark Lutz is a busy man:

Well, it would be speculation as
to why AF Holdings took one action or another. I would
say that, for example, you know, Mr. Lutz is an
individual. There are a certain number hours in a day
and for him to accomplish everything he's going to
accomplish in any given day, or for anyone in any
capacity in any business, you rely on third parties to
aid you to accomplish various tasks.

Meanwhile, Mark Lutz — who showed up at a hearing before Judge Wright without counsel, and apparently showed up as a corporate representative in a court in Florida dressed like he was going shrimping afterwards — may or may not have children in the future, and if he does, those children will be the beneficiaries of the trust that owns AF Holdings, which, we are assured, is a perfectly legitimate business conducting good-faith copyright litigation to protect its interests in movies. Those movies, by the way, have never yielded any money except through litigation, and that litigation has only yielded money to the Prenda Law lawyers and their related "experts."

Nonetheless, Mr. Nazaire will have you believe, it is outrageous and sanctionable for Mr. Patel to seek sanctions and ask the Georgia federal court to conclude an inquiry into whether Prenda Law and AF Holdings have concealed the true ownership of AF Holdings.

Gentle readers: draw your own conclusions.

Sure, What The Hell, Let's Bring In Booking Photo Extortion Too

Showing the sharp wit and unerring eye for palatable arguments that characterizes his entire brief, Mr. Nazaire also launches a personal attack on Mr. Patel's lawyer Blair Chintella. In a salvo that I'm sure the judge will find pertinent and not at all gratuitous, Mr. Nazaire asserts that Mr. Chintella is pursuing his own interests rather than the interests of his client, and asserts that Mr. Chintella has an unreasoning grudge against John Steele (the same John Steele Mr. Nazaire suggests is entirely irrelevant to this case):

Mr. Chintella perhaps believes that Mr. Steele has spread Chintella’s mug shot, from a 2011 DUI arrest, across the Internet. However, Mr. Chintella’s mug shot was circulated by infamous websites that post mug shots from public arrest records and demand monetary payment for their removal (www.bustedmugshots.com and www.justmugshots.com). Nevertheless, Plaintiff believes that Chintella’s acrimony towards Steele is important context for the Court to consider when reviewing Defendant’s motion, which seeks, inter alia, substantial relief against Steele, even though Steele is not a party or attorney involved in this case. Plaintiff’s attorney has a copy of the mugshot and can provide the same to the Court if so requested.

Truly Mr. Nazaire's distaste for "extortion" is touching.

Mr. Chintella may be mildly and temporarily embarrassed that a 2011 DUI arrest has been emphasized in a pleading in federal court. I suspect, however, that transitory and mild embarrassment will pale compared to the impact Mr. Nazaire's connection to this matter will have on his reputation. Potential local counsel for Prenda Law or the Prendateers, take note.

Paul Duffy has a problem. He's counsel of record for AF Holdings, to the extent that AF Holdings even is a client separate and distinct from Prenda Law. But in between the time he filed the motion for voluntary dismissal and now, the April 2 hearing in Los Angeles happened where he (among other Prenda Law people) plead the Fifth Amendment in refusing to answer questions about AF Holdings. This act put him in a bind: if he opened up his mouth in San Francisco to talk about AF Holdings it could inculpate him in its affairs. You can't assert the Fifth Amendment in some contexts and waive it in others, that's not the way it works. Anything he says about AF Holdings in some proceedings can and will be used against him in others.

On the other hand, as counsel to a purportedly separate and distinct client, he can't just blow off the hearing, even if that might be the best option for saving his own skin. AF Holdings, whoever it is, is staring down the barrel of a judgment on the order of tens of thousands of dollars against it. If it were truly a separate client it should be able to count on him to try to prevent such a judgment. Note: this doesn't mean the client could expect him to prevail, but it could expect him to at least give it the ol' college try. That meant that he couldn't just not show up (which apparently was what he did — or, er, didn't do — at a hearing yesterday in Illinois). He couldn't just withdraw as counsel, either, because that generally requires the court's permission once a lawsuit is underway in order to make sure a client isn't being left high and dry (see, for example, the earlier motion to substitute Duffy for Gibbs, which they needed the court to approve). Nor could he choose to just not argue, or purposefully argue badly, without abrogating his ethical duties to the client. But it was unclear what he could argue that wouldn't further implicate him in the misdealings of the Prenda Law enterprise.

In any case, as Judge Chen honed in on later in the hearing, usually a plaintiff is happy for there to be spoliation problems. "Normally if you argue spoliation, you win the case!" It seemed very strange, he observed, to give up because you are claiming spoliation (and, he asked later, if it really were such a problem, why did you wait to withdraw the case and not do so as soon as you learned of it?).

All of my coverage of the Prenda Law saga is collected here.

Last week I described how Prenda Law principals John Steele, Paul Hansmeier, and Paul Duffy asserted their Fifth Amendment right against self-incrimination rather than answer a federal judge's questions about Prenda Law's litigation campaign. I predicted that attorneys defending against Prenda Law cases would begin to use that assertion against Prenda. Behold: they have.

Georgia On Their Mind

We begin in in the Northern District of Georgia, where AF Holdings LLC brought suit against a Mr. Patel. AF Holdings' local counsel voluntarily dismissed the case on March 18 as part of Prenda's wave of dismissals. Too late, too late. Mr. Patel has filed a motion for sanctions. Since AF Holdings had already dismissed, Patel was forced to rely — as I explained — on the court's inherent powers.

Patel's Motion is a blockbuster. It weaves together information and documents from cases across the country to present its argument against Prenda law and its lawyers. The exhibits to the Motion are here: Exhibit A, Exhibit B, Exhibit C, Exhibit D, Exhibit E, Exhibit F, Exhibit G, Exhibit H, Exhibit I, Exhibit J, Exhibit K, Exhibit L, Exhibit M, Exhibit N, Exhibit O, and Exhibit P. Among the most notable exhibits are transcripts. Exhibit C is the transcript of the utterly bizarre Florida hearing involving John Steele and Mark Lutz; Exhibit F is a transcript of the jaw-dropping March 11, 2013 hearing before Judge Wright at which Alan Cooper and Brett Gibbs testified, and Exhibit G is a transcript of the April 2 hearing at which Prenda's representatives took the Fifth. These are, on their own, very powerful, for reasons I have discussed before.

But that's not all. Patel has also submitted documents illuminating the conduct and seemingly inconsistent statements of various Prenda Law attorneys. Patel shows a pleading electronically "signed" by "Salt Marsh," one of the elusive figures behind Prenda Law's purported clients — it was also purportedly e-signed by Brett Gibbs. Patel shows that in January 2012, John Steele's attorneys wrote to the Florida State Bar on his behalf representing that "Mr. Steele is actually a client of Prenda — Mr. Steele maintains an ownership interest in some of Prenda's larger clients." It's difficult to reconcile this admission with Mr. Steele's assertion at the April 2 hearing that the attorney-client privilege would prevent him from answering questions about Prenda Law's clients. There's also a rather hilarious quote from a March 15, 2013 email on behalf of Prenda. The Motion doesn't make it clear whether this email was sent by Prenda local counsel or a Prenda principal:

I understand that there is an insane liberal group which is flying around Mr. Alan Cooper for its own benefit. This group is akin to "Anonymous". It doesn't believe in copyright laws. It does believe that computer hacking should be legal. I'm not certain if these southern courts (unlike liberal San Francisco Courts) will hold the same beliefs that this crazy "its ok to hack websites" group holds.

Bear in mind that assertion about the Electronic Frontier Foundation was uttered four days after Alan Cooper testified that his name had been misappropriated by Prenda and that John Steele had left him threatening voice mail messages when he complained. Whoever sent that email either isn't following what is going on, or believes he can bluff it out. Good luck with that.

Patel's motion is well worth reading for anyone interested in an exposition of the growing evidence concerning Prenda Law.

Annoyed In Illinois

Prenda's troubles don't end in Georgia.

In Illinois, Prenda — using its putative client "Lightspeed Media Corporation" — filed state law claims. One defendant — a Mr. Smith — removed the case to federal court in the Southern District of Illinois. Prenda recently began to retreat in that case — Paul Hansmeier and John Steele moved to withdraw, leaving Paul Duffy holding the bag. Duffy, in turn, dismissed the case during the great strategic repositioning of March 2013. Once again, they were too late.

Smith has filed a motion seeking attorney fees as a sanction. The exhibits to the motion are here: Exhibit A, Exhibit B, Exhibit C, Exhibit D, Exhibit E, Exhibit F, and the Forbes article attached as an unlettered exhibit.

Smith is represented, in part, by Jason E. Sweet of Booth Sweet LLP, who also represents Alan Cooper and Paul Godfread in the defamation litigation Prenda recklessly brought against them. Sweet was responsible for what I called a Perry Mason moment during the March 11 hearing; he stood up from the gallery to tell Judge Wright that Brett Gibbs had, in fact, represented himself as "national counsel" for Prenda. Sweet knows the case and knows Prenda, which shows. The Smith motion is a helpful addition to the Patel motion: it focuses more on Prenda's methods of identifying defendants, it attacks Prenda's state law theories, and then it piles on with Prenda's recent misfortunes in courts across the country. A representative sample of the latter:

Steele, Hansmeier and Duffy have orchestrated a nationwide campaign through Prenda Law and other related entities that several courts have found extends beyond vexatious litigation into fraud on the court. For one example that beggars description, Duffy, a prinicpal of Prenda Law, wrote a letter to the court disclaiming any role in representing the plaintiff, a Prenda Law client, though Prenda Law’s local counsel admitted having been retained to represent the plaintiff by Prenda Law principal Brett Gibbs. Hr’g Tr., Sunlust Pictures, LLC v. Nguyen, No. 12-cv-1685, pp. 10-12 (M.D. Fl. Nov. 27, 2012) (Exhibit D hereto). Mark Lutz, formerly a Prenda Law paralegal, represented himself as the plaintiff’s “corporate representative,” but conceded that he had no knowledge of the corporate officers and was paid on a contract basis to make courtroom appearances as a corporate representative for Prenda Law plaintiffs, including Hard Drive Productions and Guava LLC. Id. pp. 13-17 (misidentifying Mr. Lutz as “John Lutz”). The Sunlust Court dismissed the case from the bench “for failure to appear at this hearing, for failure to present a lawful agent, for attempted fraud on the Court by offering up a person who has no authority to act on behalf of the corporation as its corporate representative.” Id. p. 20. Steele, who happened to be present at the hearing, represented to the Court, “I don’t represent Sunlust or anybody anymore. I no longer actively practice law. … I do appear occasionally at hearings on an ad hoc basis, but I do not have any current clients.” Id. p. 19. (At the time, Steele was listed as lead counsel in this action.)

Ouch.

Prenda's Dilemma

Here's the dilemma of Prenda Law's principals: they can't both take the Fifth and fully respond to motions like these. They can't assert good faith and explain seeming inconsistencies without submitting declarations. If they want to continue to refuse to answer questions, they can only respond with legal arguments and bland generalities.

Paul Duffy has just tried that in San Francisco. In response to a raucous motion for fees in an AF Holdings case in the Northern District of California, Paul Duffy has responded with a dry and academic argument about the circumstances in which the Copyright Act permits a court to award fees to a defendant. Duffy's response is not badly written, and doesn't seem to be wrong on the law, but it's not at all the response you'd expect from a lawyer being accused of what amounts to a nationwide criminal enterprise. It's like someone said "Ken, I have it on good authority that you routinely molest squirrels in a public park near your house," and I responded "your accusation is without merit because that park is private."

Paul Duffy, and Prenda Law, might get lucky, and courts might summarily ignore or deny the sanctions and fees motions. But if any judge seeks to make an inquiry even a fraction as involved as Judge Wright has, then Prenda Law and its principals will find themselves choosing between warding off sanctions and maintaining their prudent silence.

This is only the beginning. Stay tuned.

THE COURT: Can you tell me, for example, who directs the litigation here in California? Who makes the decision as to whether or not cases are dismissed or settled for how much money? Can you tell me that?

MS. ROSING: Your Honor, I can't testify.

THE COURT: "Yes" or "no", please. Because we need to move through this. Can you tell me that?

MS. ROSING: I personally cannot tell you that, your Honor.

THE COURT: All right. Do you know whether or not there is another Alan Cooper other than the one that was here at the last hearing?

MS. ROSING: I am not aware of another Alan Cooper, your Honor.

THE COURT: All right. Good. What happens to the settlement money?

MS. ROSING: Your Honor, obviously, I represent Mr. Duffy and Ms. Van Den Hemel. I don't have personal knowledge of any of this.

THE COURT: Why weren't notices of related cases filed? Who made the decision to hide from the court the fact that all of these cases were related.

MS. ROSING: I do have a judicially noticeable document on that, your Honor, where the Northern District declined to relate the cases.

THE COURT: That is a different thing. That is consolidating them.

MS. ROSING: It is actually an order declining to relate them.

THE COURT: Same plaintiff, same film, same causes of action, and they are not related? Excuse me? Okay. Tell me this. Who made the decision not to disclose to the court the fact that the law firms have a financial interest in the outcome of this litigation?

MS. ROSING: Your Honor, there is no evidence before this court at all that the law firm or any, well, certainly, my clients, Paul Duffy or Angela Van Den Hemel, have any financial interest in the outcome of this litigation.

THE COURT: Excuse me. Did you read Hansmeier's deposition?

MS. ROSING: Yes, I did, your Honor.

THE COURT: And then you make the statement you just made?

You know, if I got my brother involved in an enterprise that culminated in a furious federal judge demanding that he fly across the country to show cause why he shouldn't be sanctioned, I think I'd step up and represent my brother, or ask my attorney to represent my brother, or hire a separate attorney for my brother.

Maybe if someone had referred Peter to a competent lawyer, or even hired one for him, he might have avoided such a blunder. Instead, it appears that the lawyers who got him into this mess — including his own brother — let him appear pro se and effectively incriminate himself.

That's some cold shit, yo.

This letter is to advise you that an objection will be filed to your proposed settlement. I am enclosing a draft of the objection to be filed, which you have previously had an opportunity to review. This (or a similar version) will be filed if you do not attempt to resolve this matter. We find that settlements like this are likely to be rejected following our participation, as was the result today in In re Groupon, No. 11-md- 02238 (S.D. Cal.) (Dkt. No. 97).

I will extend to you an offer to settle this matter with my client for $30,000.00 if the settlement terms are reached by 5:00 PM CST on Monday, Oct. 1, 2012. If you reject this settlement and the objection is filed, the offer to o settle is revoked and will not be extended at the pre-filing settlement amount.

Govern yourself accordingly.

In our view, if you present this objection, it is clear that it will have been presented for an “improper purpose” under Fed R. Civ. P. Rule 11(b)(1). Our view is further informed by the fact that the practice of contacting class counsel with draft objections and inviting them to “discuss them” (i.e. resolve them by making an unjustified payment to the objectors’ lawyers) in advance of filing in the hope of gaining an unjustified payment beyond any legitimate class member’s claim appears from the Record in Groupon to be a pattern of conduct.

Please be advised that we consider this conduct to be improper and sanctionable under 28 U.S.C.A. § 1927 and Rule 11.

Further, having reviewed the “Underlying Motion,” it is apparent that it is without merit and would not succeed even it were allowed to proceed. It appears a significant disconnect exists between Objector’s perception of the events that transpired in the days leading to the objection deadline, the nature of his counsel’s involvement and conduct, and the nature and purpose of class counsel’s response. In reviewing the letters between Objector’s counsel and class counsel, the only “bold and improper” conduct the Court can identify is Objector’s counsel’s attempt to extract $30,000, from class counsel in exchange for Objector not filing objections that Objector’s counsel suggested could derail approval of the class settlement and award of attorneys’ fees. Objector now wishes to use his own counsel’s questionable conduct and class counsel’s measured response–which Objector recharacterizes in a strained attempt to ascribe misconduct and ill will to class counsel–as a springboard to attack the class counsel’s motivation and mightily strains to manufacture violations of rights related to “certain actions by co-Lead Counsel for the class and their implications regarding notice and due process of law.” Even if the Court were to allow the eventual filing of the “Underlying Motion” and consider Objector’s request to remove Mr. Stewart as class counsel, the Court would find no basis to do so. Nor would the Court find it necessary or justified to appoint “ad litem counsel to protect absent class members from the sort of behavior [i.e., Mr. Stewart’s behavior] described herein.” Further still, even if such a need existed, the Court certainly would not appoint Objector’s counsel as co-lead class counsel based on the sort of behavior the letters exhibit.

I asked them for Mr. Gibb's e-mail address. Strangely, the individuals seemed startled by this request and immediately (in a somewhat panicked way) replied that they didn't need the objection sent after all.

This reaction raised suspicions and led me to inquire if the "Brett Gibbs Law Offices" even existed, and whether these individuals worked with Mr. Gibbs at all. The individuals then abruptly--and without explanation--hung up the phone.

After the phone call ended, my firm researched Mr. Gibbs, his practice, and the facts relating to the phone call. We determined that "Brett Gibbs Law Offices" does not appear to exist as a legal entity, that the associates who contacted me regarding Brown's objection did not work at "Brett Gibbs Law Offices," and that the phone number the individuals called from is a number used by Prenda Law--a firm at which Mr. Gibbs is "Of Counsel"--to contact defendants that are the target of Prenda Law's mass copyright infringement lawsuits brought on behalf of pornography studios. Based on the information available, we believed that the men who called were actually associates of Mr. Gibb's at Prenda Law and had been instructed to misrepresent their affiliation.

My prior coverage of the Prenda Law saga is here.

Yesterday, March 14, as Judge Wright was busy issuing a new Order to Show Cause directing Prenda Law clients and affiliated attorneys to appear before him, Prenda Law was busy too.

More specifically, Prenda Law — through Paul Duffy, one of the lawyers Judge Wright has ordered to appear — was busy dismissing cases and filing a "Notice of Allegations" informing other courts of what is going on. Sort of.

A tipster told me that Mr. Duffy had a busy day yesterday. PACER showed it's true. More specifically, Mr. Duffy filed voluntary dismissals of multiple AF Holdings LLC cases in the Northern District of Illinois — here and here and here (in which he stipulated to dismiss the case with prejudice, meaning it can't be re-filed) and here. In one of those cases he filed the notice of dismissal even though AF Holdings had already secured a default against the defendant, leaving nothing but proving damages. I haven't yet counted all the cases in which Duffy filed dismissals yesterday.

In each of those cases — and in a case in the Northern District of California — Duffy also filed a substantially identical document styled a "Notice of Allegations." Here's what they all say:

Plaintiff hereby notifies the Court of allegations of forgery that were made during a hearing in a matter pending before the U.S. District Court for the Central District of California. Ingenuity13 LLC v. John Doe, No. 2:12-cv-08333-OWD-JC (C.D. Cal. Mar. 11, 2013). On March 11, 2013, an individual by the name of Alan Cooper alleged that his signature was forged on two separate agreements assigning the rights of various copyrighted works to Plaintiff, including the assignment at issue in this matter. (See, ECF No. 1-2 at 2.) Plaintiff categorically denies Mr. Cooper’s allegations, which arise nearly two years after certain of the alleged conduct occurred. Mr. Cooper has a pecuniary interest in his allegations by virtue of a lawsuit he filed against Plaintiff. Cooper v. Steele, et al., No. 27-CV-13-3463 (Minn. Dist. Ct., Hennepin Cty., 2013).

Even if Mr. Cooper’s allegations were true—and they are not—Plaintiff’s assignments, including the assignment at issue in the instant action, remain valid. The formal requirements of a copyright assignment are “quite simple”: a writing signed by the assignor. 17 U.S.C. § 204; Effects Associates, Inc. v. Cohen, 908 F.2d 555, 557 (9th Cir. 1990) (“The rule is really quite Case: 1:12-cv-03567 Document simple: If the copyright holder agrees to transfer ownership to another party, that party must get the copyright holder to sign a piece of paper saying so. It doesn't have to be the Magna Charta; a one-line pro forma statement will do.”); see also Order, AF Holdings LLC v. Does 1-96, No. 11-cv-3335-JSC (N.D. Cal. Nov. 22, 2011), ECF No. 29 at 5 n.1 (“The written copyright assignment recites that it is between the original copyright owner, Heartbreaker Films, and Plaintiff here, AF Holdings, LLC. . . . As the law requires only that the assignment be signed by the assignor and not the assignee, this inconsistency does not prevent a prima facie showing of copyright ownership.”) (internal citations omitted).

Mr. Cooper’s allegations relate to the assignee, not the assignor. The assignment at issue in this action satisfies the Copyright Act’s formal requirements. It is a writing signed by the assignor. Plaintiff’s rights in the copyrighted work in this action were transferred when the assignor executed the assignment.
Plaintiff is treating Mr. Cooper’s allegations with utmost seriousness and is investigating their substance. Because Mr. Cooper’s allegations relate to the assignment agreement at issue in the instant litigation, Plaintiff respectfully brings the matter to the Court’s attention.

Broken down, here's what Duffy is saying: (1) Cooper's claim is untrue, (2) but we're treating the claim seriously and investigating it, (3) but even if it were true, it doesn't matter, because an assignment only needs a valid signature from the person giving the property, not the person receiving the property.

Many things could be said about that argument. Among them: the first two points are oddly at war with each other, particularly when uttered in such proximity. If AF Holdings knows the allegation is not true, then what precisely is AF Holdings carefully investigating? Doesn't AF Holdings already know whether or not Mr. Cooper consented to be an officer for it and executed documents for it? What is there to investigate, exactly?

Duffy's third point is about a doctrine that lawyers — including, for instance, prosecutors and defense lawyers — call materiality. Most civil or criminal laws prohibiting false statements only extend to material false statements — that is, statements that are the sort that could make a difference in the issue at hand. Duffy seems to be previewing Prenda Law's defense by suggesting that even if Cooper's identify was misappropriated and his signature forged on assignments, that false statement was not material because a copyright assignment only needs a valid signature from the guy giving the copyright, not the guy receiving it.

There are a number of problems with that argument. Among them: Judge Wright is not only interested in whether Prenda Law made fraudulent representations about who received the assignments. Judge Wright is investigating — and has ordered Prenda Law to explain — whether Prenda Law made fraudulent representations about the true owners of plaintiff entities like AF Holdings. Whether Alan Cooper is a real officer or not is unquestionably material to that. Judge Wright has specifically ordered them to explain:

2) Why they should not be sanctioned for failing to notify the Court of all parties that have a financial interest in the outcome of litigation;

3) Why they should not be sanctioned for defrauding the Court by misrepresenting the nature and relationship of the individuals and entities in subparagraphs a–m above [of the March 14, 2013 Order];

Prenda Law's apparent theory of materiality may be apt in analyzing whether the copyright assignments are valid. But it may not be apt in determining whether any misstatements were material for purposes of civil or criminal fraud allegations directed at the ownership and management of Prenda Law's clients. For instance, as I've discussed before, for purposes of charging defendants with false statements to the government, materiality is defined very broadly to include the sorts of statements that have the capacity to influence the government, whether or not the government is actually misled.

All that said, aside from questions about the exact language of the "Notice of Allegations," Paul Duffy is very likely doing the right thing legally and ethically by dismissing the cases and informing courts of the allegations against Prenda Law. In doing so he is reducing the risk that he will be accused of continuing any alleged fraud on the court after the March 11, 2013 hearing.

With respect to what has already happened, though — my friends, that die is cast, the Rubicon crossed, the ram has touched the wall.

Not only does the Ex Parte Application lack merit, its eleventh-hour filing exemplifies gamesmanship. Accordingly, the Ex Parte Application is DENIED.

a) John Steele, of Steele Hansmeier PLLC, Prenda Law, Inc., and/or Livewire Holdings LLC;
b) Paul Hansmeier, of Steele Hansmeier PLLC and/or Livewire Holdings LLC;
c) Paul Duffy, of Prenda Law, Inc.;
d) Angela Van Den Hemel, of Prenda Law, Inc.;
e) Mark Lutz, of Prenda Law, Inc., AF Holdings LLC and/or Ingenuity 13 LLC;
f) Alan Cooper, of AF Holdings LLC;
g) Peter Hansemeier, of 6881 Forensics, LLC;
h) Prenda Law, Inc.;
i) Livewire Holdings LLC;
j) Steele Hansmeier PLLC;
k) AF Holdings LLC;
l) Ingenuity 13 LLC; and
m) 6881 Forensics, LLC.

These persons and entities are ORDERED to appear on March 29, 2013, at 10:30 a.m., TO SHOW CAUSE for the following:

1) Why they should not be sanctioned for their participation, direction, and execution of the acts described in the Court’s February 7, 2013 Order to Show Cause;

2) Why they should not be sanctioned for failing to notify the Court of all parties that have a financial interest in the outcome of litigation;

3) Why they should not be sanctioned for defrauding the Court by misrepresenting the nature and relationship of the individuals and entities in subparagraphs a–m above;

4) Why John Steele and Paul Hansmeier should not be sanctioned for failing to make a pro hac vice appearance before the Court, given their involvement as “senior attorneys” in the cases; and

5) Why the individuals in subparagraphs a–g above should not be sanctioned for contravening the Court’s March 5, 2013 Order (ECF No. 66) and failing to appear on March 11, 2013.

Should the persons and entities in subparagraphs a–m above not appear on March 29, 2013, the Court is prepared to draw reasonable inferences concerning their conduct in the cases before the Court, including any inferences derived from their failure to appear. Failure to comply with this order will result in the imposition of sanctions.

Allan Mooney, a Minnesotan who has brokered the sale of Internet-based businesses, said he introduced his friend Paul Hansmeier to some contacts in the porn industry. But he denied knowing that he was listed as the “sole organizer” of MCGIP LLC, a plaintiff in at least 20 lawsuits filed by Steele Hansmeier or contract attorneys.

Mooney also has been listed in court filings — with his name misspelled — as an agent for an entity called Guava LLC, which is registered in the Federation of St. Kitts and Nevis in the West Indies. Guava has been the plaintiff in 21 federal lawsuits since October, including six in Minnesota.

“That would be news to me,” Mooney said. “I’m not involved in any of that type of stuff. I’m more or less a personal trainer.”

Even where the court seeks to adjudicate issues between parties, it must have personal jurisdiction over them. Here, Steele, Hansmeier, Duffy, and Van Den Hemel are not parties and have not otherwise participated in this litigation. As such, the public policy behind the need to determine personal jurisdiction is arguably at an elevated level because, as individuals, they effectively have "no dog in this fight."

On March 5, 2013, this court issued an order that eight individuals would have to appear before this court on March 11, 2013. But this court lacks jurisdiction to order those individuals to appear in that they reside outside California, are not parties to this litigation, have not appeared in this action, and do not represent parties to this action.

Moreover, although some of these individuals may have received notice as the court ordered, others did not because those charged with providing notice simply lacked the information necessary to do so. And, even those that were served have not received reasonable notice of the nature of the proceedings they are being ordered to appear in or what is expected of them besides their physical presence.

Further, they have not received a reasonable amount of notice to accommodate cross-country travel or information regarding who will pay for such travel. Based on these factors, the court should withdraw its order for John Steele, Paul Hansmeier, Paul Duffy, and Angela Van Den Hemel to appear on Monday, March 11, 2013 at 1:30 P.M.

Here, because they are not parties in this action, Steele, Hansmeier, Duffy, and Van Den Hemel can be nothing more than witnesses. California Code of Civil Procedure section 1989 provides that "a witness . . . is not obliged to attend as a witness before any court, judge, justice or any other officer, unless the witness Is a resident within the state at the time of service." None of these individuals named in the court's March 5, 2013 reside in California... Thus, the court lacks jurisdiction to order them to appear.

Although counsel submitting this application has been unable to identify any authority addressing the notice requirements to witnesses ordered to appear at such hearings, logic dictates that such individuals should at least be similarly accommodated with reasonable notice. Here, the court's March 5, 2013 order that notice be provided by March 7, 2013 to attend a March 11, 2013 hearing with no further information is fundamentally unreasonable.

Finally, witnesses are entitled not only to receive payment for their attendance, but also for travel expenses.... But, the court's order not only fails to provide who will compensate Steele, Hansmeier, Duffy, and Van Den Hemel for their time and these expenses, but that they will be compensated at all. Given the considerable expense of traveling such distances (including consideration of the fact that one of the witnesses likely has limited means given her employment as a paralegal), especially on such short notice when many common carriers may not have seats available, this is a significant issue.

John Steele has frequently sent demand letters into the State of California, seeking to pressure Internet users into settling copyright infringement claims. An example of only one such letter (undersigned counsel knows there are many more) accompanies this opposition as Exhibit 1 to the Declaration of Nicholas Ranallo. Further, Mr. Steele has not been shy about conducting media interviews, with California publications, about his California cases. See http://www.sfgate.com/business/article/Lawsuit-says-grandma-illegallydownloaded-porn-2354720.php. Accordingly, both general and specific jurisdiction exists over John Steele.

It appears that the Application may have been manually filed in order to create a purposeful lag time (of the motion getting from the filing window to chambers) on what is supposed to otherwise be an emergency motion. It is unclear why undersigned counsel found himself in possession of a copy of the moving papers prior to the Court. Further, the original amount of time was reasonable.

Q. And who is AF Holdings -- who are AF Holdings' employees?
A. AF Holdings' sole employee is Mark Lutz.
Q. When was Mark Lutz hired?
A. He was hired very shortly after the incorporation, within a day or two, so May 2011.
Q. And does AF Holdings maintain employment records that would reflect Mr. Lutz' employment?
A. Could you specifically describe some of these employment records.
Q. A W2 for example.
A. It does not maintain a W2 for Mr. Lutz.
MR. PIETZ: How about a 1099?
THE WITNESS: It does not maintain a 1099 for Mr. Lutz.
MR. PIETZ: What can kind of records does it maintain for Mr. Lutz?
THE WITNESS: I guess -- which topic is this again so I can refresh my recollection?
MR. PIETZ: I'm not going to answer that, but it's on the list.
MR. GIBBS: Objection. It's not on the list.
MR. PIETZ: I disagree. You can go ahead and answer.
MR. GIBBS: Which one is it? I disagree.
MR. PIETZ: It's not our job to tell you.

I guess what I can say on behalf of AF Holdings is that I do not review any documents that would fall within the category of documentary support. Does that mean they have them, perhaps. Perhaps they don't have them. It wasn't one of the noticed topics. I inquired of Mr. Lutz as to who the employees of AF Holdings were and Mr. Lutz said that he was the sole employee.

Q. To be more specific. Could you elaborate on the terms of Mr. Lutz's employment with AF Holdings?
A. He is the -- well, he's essentially the CEO of AF Holdings.
Q. How much is he paid?
A. He does not receive a salary for duties as CEO.
Q. Does he receive a salary for any other role that he fills at AF Holdings?
A. He does not receive a salary from AF Holdings.

My testimony was that I don't know what the exact name of the trust is. If the name of the trust is Salt Marsh, then Salt Marsh is the owner. If the name of the trust is not Salt Marsh, then --

Q. But your testimony as AF Holdings corporate representative who has been subpoenaed to appear and testify on the noticed topics, which include as No. 6, AF Holdings' corporate structure, your testimony is that as the corporate representative for AF Holdings, you do not know the name of the trust that owns AF Holdings?

THE WITNESS: Yes. My testimony is that in preparing for this deposition, I did not expect the name of the trust to fall within the scope of this. I did not review the history of the name of the trust.

Well, I can say as an attorney I have no concern over how the proceeds are handled.

THE WITNESS: Yes, that's correct. The purpose of the litigation isn't to generate money for AF Holdings. The purpose of the litigation is to generate a deterrent effect in stealing its copyrighted works.

Q. Who is Alan Cooper?

A. Alan Cooper is an individual who was designated as a corporate representative of AF Holdings, LLC. The circumstances that led to Mr. Cooper's designation as a corporate representative to acknowledge the copyright assignment agreement on behalf of AF Holdings, LLC, is that Mark Lutz -- we're backing up a little bit. AF Holdings makes use of corporate representatives, the reason for that is that obviously you guys know that there's a lot of people out there who don't like what we're doing, specifically to people who have infringed on works and want to retaliate against people who are enforcing copyrights.

AF Holdings makes use of corporate representatives to help prevent the -- I guess the officer, Mark Lutz, himself, from being targeted by these individuals. The manner in which Mr. Cooper was designated as a corporate representative was Marks Lutz asked attorney John Steele to arrange for a corporate representative to acknowledge the assignment agreement on behalf of AF Holdings. Mr. Steele did so and returned the assignment agreement to AF Holdings bearing the signature of Mr. Alan Cooper.

When this whole -- I guess the first time we heard about any form of controversy with respect to -- the first time AF Holdings heard about any form controversy with respect to the assignment agreement was when an attorney named Paul Godfread, G-O-D-F-R-E-A-D, contacted AF Holdings and said that -- I can't remember the exact text of the e-mail, but something to the effect of he's representing someone named Alan Cooper and they're concerned that Alan Cooper is being held out as AF Holdings CEO.

And so when that occurred, we -- or AF Holdings and Mark Lutz specifically, he asked, you know, what is the exposure of AF Holdings here and there were two specific concerns. One specific concern was the issue of fraud. Namely, that if AF Holdings is distributing agreements that have someone's signature on it, but he didn't sign it or somehow his identity was coopted, then obviously that's something that AF Holdings would have to -- once it became aware of that issue -- stop doing -- shut it down and make sure it didn't happen anymore, because obviously there's no reason to distribute an assignment or any agreement bearing someone's signature if there was a forgery or some sort of fraudulent action involved in that sense.

And so to address that issue AF Holdings -- well, spoke to Mr. Steele -- Mark Lutz spoke to Mr. Steele and said, Well, I understand that there's an issue with this Alan Cooper and asked Mr. Steele point-blank, Is the signature a forgery. Mr. Steele said the signature is not forgery. And he asked him, Is the -- is this signature authentic. Mr. Steele says, yes, the signature is authentic. Based on Mr. Steele's representation, we have no reason to believe from what Mr. Steele said, at least, that the signature is a forgery or there's some sort fraud going on with respect to the signature.

If you're talking about the guy who's in Minnesota and was John Steele's former caretaker, all I can say is that AF Holdings -- the only person who knows who this Alan Cooper is is John Steele and we asked Mr. Steele, is this the same guy, is this not the same guy, is there another Alan Cooper and Mr. Steele declined to respond on the basis that Mr. Cooper has sued Mr. Steele and they're actively involved in litigation.

Q. I believe you testified a moment ago that throughout the entire duration of AF Holdings, the only employee or officer -- the person wearing all of the hats was Mark Lutz.
A. Uh-huh.
Q. Based on this document that appears to be incorrect because isn't Mr. Gibbs now in-house counsel for AF Holdings?
A. No. I think it's -- I don't know why it's here. I don't think it's --
Q. So Mr. Gibbs is not in-house counsel for AF Holdings?
A. That's correct.
MR. PIETZ: Well, shoot. I'm just going to ask you, Mr. Gibbs. Did you prepare and sign this document?
MR. GIBBS: It's not my deposition. I'm not quite sure why I would be answering questions.
MR. PIETZ: Well, there's an E-file document here with your signature on it that says you're in-house for AF Holdings. I thought I'd give you the opportunity as a courtesy to clarify for the record.
MR. GIBBS: Okay.
MR. PIETZ: You're not going to address it?
MR. GIBBS: I don't think I need to address it.

Q. So returning to these corporate representatives. Have there been any other corporate representatives other than Alan Cooper, Mark Lutz for AF Holdings?
A. I can think one of other corporate representative.
Q. And who is that?
A. And that would Anthony Saltmarsh.
Q. Where does Mr. Saltmarsh reside?
A. I don't know where Mr. Saltmarsh resides.
Q. Was Mr. Saltmarsh ever compensated for acting as a corporate representative for AF Holdings?
A. Not that I'm aware of.
Q. Exhibit 101 and 102. Those are both the ADRs that are signed by Salt Marsh. I believe you testified you thought that that might be of the name the trust that owns AF Holdings. Could that be a misspelling of Anthony Saltmarsh?
A. The only thing I can say about these documents is that if you wanted me to come prepared to testify about them, you may have included them as exhibits to the notice or supplement the notice with the documents. You're asking me is it possible that Salt Marsh as spelled on here is a misspelling of the name Anthony Saltmarsh?
Q. Perhaps an alias would be a better word for it.
A. Or an alias for Salt Marsh. I'm a bit skeptical of that theory because it says AF Holdings owner and Anthony Saltmarsh is not an owner of AF Holdings.

Well, I know from reading the blog sites that you two participate in that I shouldn't believe everything I read on the Internet.

Q. Do you know anybody by the name of Alan Moay, M-O-A-Y?
A. Do I personally know anybody by the name of Alan Moay? I'd have to check my contact list and anyone I've ever talked to in my entire life, but sitting here right now, do I know anybody named Alan Moay, no, I do not.
Q. Do you know anyone who is a principal or an officer or a corporate representative of Guava, LLC, with a first name of Alan?
A. Do I know anyone, principal or an officer --
Q. Or a corporate representative.
A. I'd to have check my records as to who does what at Guava, LLC. I couldn't tell you that answer for most of my clients.
Q. Do you know anybody by the name of Alan Mony, M-O-N-Y?
A. Again, I'd have to check my records to see who I've corresponded with in the past.
Q. Do you know anybody by the name of Alan Mooney, M-O-O-N-E-Y?
A. I have represented an Alan Mooney before, yes.

Q. Is that Mark Lutz?
A. Well, if I don't recognize the voice that's on the voice mail, I can't make an identification of who it is.
Q. How many times would you say you have spoken to Mr. Mark Lutz in the course of your life?
A. Too many to count.
Q. How many times would you say you've had phone calls with Mark Lutz?
A. I can't answer the question, but several times.
Q. Several or lots?
A. I would say several to mean many times.
Q. And you're telling me that you can't definitively say that the voice we just heard is Mark Lutz?
Q. Who might it be if it's not Mr. Lutz?
A. I guess anyone in the world.

I've been a lawyer for almost 19 years now. I've practiced in federal court that entire time. Here's what's very strange to me about Gibbs' opposition to the ex parte application, and about Gibbs' sanctions motion: they conspicuously avoid direct engagement with the most incendiary accusations Pietz makes. It's one thing to argue that Pietz' evidence is insufficient, or that other courts have failed to act based on them. It's quite another to evade the question of who "Alan Cooper" really is. I find it very difficult to imagine a scenario in which an experienced litigator would have a good reason to avoid confronting such a serious charge of fraud head on by saying, for instance, "the Alan Cooper who is a principal in Ingenuity 13 LLC is a real person who is resident of the State of X, living at Y, and has no relation to the Alan Cooper who has made scurrilous allegations against Prenda Law. Here is a declaration from the Alan Cooper who is a principal of Ingenuity 13 LLC, and here are reasons why the other Alan Cooper has a grudge against Prenda Law and is lying." It is very difficult to imagine an innocent scenario explaining why Prenda Law would not offer such a response if it could.

3. Some of the individuals named could assert that exigent circumstances or medical conditions prevent them from attending, or could ask for an extension to allow them to retain counsel and get their new counsel of up to speed.

4. Some of the individuals named could show up and answer Judge Wright's questions.

Judge Wright could certainly issue monetary sanctions against, at a minimum, Mr. Gibbs. The question of what other attorneys he could sanction under Rule 11 and his own inherent authority depends on a tedious discussion too long for this post; suffice it to say that he might conclude that he can sanction supervisory attorneys with Prenda Law.

Judge Wright's terrifying comment aside, his ability to jail people before him for contempt is quite limited when they have not been charged with a crime by the executive. That, too, is a discussion too complex for this post. But Judge Wright might well refer the case to the U.S. Attorney's Office for criminal prosecution if he concludes that criminal contempt or fraud has occurred. Such referrals tend to get immediate and intense attention. Moreover, if Judge Wright finds misconduct, he could refer the matter to various state bars.

First, there was Alan Cooper. Mr. Gibbs has no real explanation for the Alan Cooper situation, other than to disclaim responsibility and deflect blame for the apparent fraud, etc., to his supposed “supervising” attorneys at Prenda Law, Inc. Unfortunately for Mr. Gibbs, it is his name on the pleadings and "counsel can no longer avoid the sting of Rule 11 sanctions by operating under the guise of a pure heart and empty head." Smith v. Ricks, 31 F.3d 1478, 1488 (9th Cir. 1994). Hopefully, Mr. Cooper himself can address theses issues at the March 11 hearing.

Now, there is also "Allan Mooney" a/k/a "Alan Mooney" a/k/a "Alan Mony." Newly discovered facts suggest that Alan Cooper may not be the only person who has had his identity misappropriated by Prenda in connection with its shell companies. Although some details are still hazy, suffice it to say that undersigned counsel (and many others) would very much like to question the real "Allan Mooney" on the record, under oath. Similarly, there is widespread interest in a subpoena to obtain testimony and records from the Minnesota bank that employs the notary who supposedly notarized Mr. Mooney's signature on legal pleadings filed in other jurisdictions. Then, of course, there is also Anthony "Salt Marsh" Saltmarsh. In short, "Alan Cooper" was not a mistake; there appears to be a pattern.

Another pattern with Prenda is that all of the persons involved constantly change hats; who is acting in what capacity seems to fluctuate to suit whatever the instant legal predicament happens to be. Inconsistencies include:

Mr. Gibbs is counsel of record for AF Holdings, LLC (e.g., C.D. Cal. No. 2:12-cv-5709, ECF No. 1) (7/2/12); Mr. Gibbs is "in house counsel" for AF Holdings (N.D. Cal. No. 3:12-cv-4221, ECF No. 22, p. 2) (1/30/13)3; Mr. Gibbs is not in house counsel to AF Holdings, and has never been anything other than AF Holdings’ "independent contract attorney" (ECF No. 49, p. 3) (2/19/13).

John Steele is "of counsel" to Prenda (Exhibit D) (4/20/12); John Steele is "not an attorney with any law firm" when questioned by Judge Scriven (Exhibit N, p. 135)(11/27/12); John Steele is back to being "of counsel" to Prenda in the St. Clair County Guava case (Supp'l. Dec. 15 (ECF No. 53)) (2/13/13).

AF Holdings copyright assignment is executed by Alan Cooper (e.g., C.D. Cal. No. 2:12-cv-5709, ECF No. 1) (12/20/2011); "Salt Marsh" is the "AF Holdings Owner" (Exhibit R) (7/20/12); AF Holdings is owned by a mystery trust, and never had any other members or employees other than its manager Mark Lutz (ECF No. 52, p. 28) (2/19/13, 11:00 a.m.); AF Holdings is owned by Livewire Holdings, LLC (ECF No. 49, fn. 1) (2/19/13, 6:00 p.m.).

Guava, LLC files a petition supposedly verified by client "Alan Mony" (ECF No. 51-1) (11/20/12); Prenda confirms "Alan Mony" is the client's name (Exhibit FF, p. 5) (2/12/13); Prenda files new verification, now spelling the purported client's name as "Alan Mooney" (Exhibit GG) (2/21/13); however, the real name of the "client" (who may or may not have agreed to lend his name to Prenda's efforts) is probably "Allan Mooney" (ECF No. 52, pp. 15–16).

The names and contact information of the “senior members of the law firm that employed Mr. Gibbs in an ‘of counsel’ relationship.” (Gibbs Resp. 2.);

The names and contact information of the persons who make “strategic decisions . . . whether to file actions, who to sue, and whether to make a certain settlement demand or accept an offer of settlement.” (Gibbs Resp. 2.);

The names and contact information of the “owners of these copyrights.” (Gibbs Resp. 2.) If these owners are business entities, then provide in addition the names and contact information of the principals of these entities.

The names and contact information of the principals of AF Holdings LLC and Ingenuity 13 LLC.

THE COURT: Mr. Lutz, you're under oath, you have to give truthful answers or you face penalties of perjury. Do you understand that?
MR. LUTZ: Yes.
THE COURT: What is your position with Sunlust?
MR. LUTZ: I'm a representative of them.
THE COURT: What does that mean?
MR. LUTZ: Corporate representative.
THE COURT: What does that mean?
MR. LUTZ: They asked me to appear on various matters throughout the country.
THE COURT: Are you an officer of the company?
MR. LUTZ: I'm not, no.
THE COURT: Are you authorized to bind the company to any legal contracts?
MR. LUTZ: I am not.
THE COURT: Are you salaried?
MR. LUTZ: No, 1099.
THE COURT: So you are a 1099 contracted entity and you just go around and sit in a Court and represent yourself to be the corporate representative of the company?
MR. LUTZ: Yes.
THE COURT: Mr. Torres, did you know this was Mr. Lutz's position, a paid corporate representative?
MR. TORRES: No, Your Honor, I did not.
THE COURT: Who is the president of Sunlust?
MR. LUTZ: I'm unaware.
THE COURT: Who is the vice president?
MR. LUTZ: I'm unaware
THE COURT: Who is the secretary?
MR. LUTZ: I have no idea.
THE COURT: Who owns Sunlust?
MR. LUTZ: I do not know.
THE COURT: Who signs your checks?
MR. LUTZ: I believe somebody in the accounting department.
THE COURT: What is their name?
MR. LUTZ: To be honest with you, I can't read the signature.
THE COURT: Where is the accounting department located?
MR. LUTZ: I'm sorry?
THE COURT: Where is the accounting department located?
MR. LUTZ: I've received checks from California.