Righthaven Still Trying To Avoid Paying Any Legal Fees Of Those It Illegally Sued

from the of-course dept

Last we heard about Righthaven, district court judge Philip Pro had given it a tiny bit of breathing room, giving the company 30 days extra to come up with the bond to prove that it could pay the attorneys fees ordered (a little over $34,000) in the Hoehn case. While Hoehn’s lawyers (Randazza Group) had sought immediate payment earlier, Judge Pro said that Righthaven could wait out the appeal… if it could post bond. Folks in our comments pointed out that it was unlikely that Righthaven would post the necessary bond… and, indeed, it has filed an “emergency” request with the court, trying to avoid posting the bond. In the filing, Righthaven lawyer Shawn Mangano explains that no one seems willing to post a bond unless Righthaven forks over the entire amount due. In other words, no one believes that Righthaven has any shot of winning this case or of remaining solvent for very long.

Righthaven has attempted to secure a bond as required by the district court to stay the Judgment pending appeal. To date, Righthaven has been unable to secure a bond. The terms required by the bonding companies that Righthaven?s counsel has investigated and/or contacted are an impediment to meeting the district court?s stay requirement. The bonding companies are requiring what amounts to a full cash bond. In sum, the bonding companies ask for full cash payment, certain forms of collateral held by the company or irrevocable letters of credit be posted to obtain a bond in the amount requested. To date, Righthaven has been unable to satisfactorily meet these requirements in a manner acceptable to a bonding company. Due to the pending appeals and the stay of certain active litigation matters, Righthaven?s operating capital is being utilized to service its monthly operating expenses. As such, it is presently unable to allocate more than $34,000 toward the bond required by the district court to stay the Judgment pending appeal.

The Randazza Legal Group wasted little time in responding and pointing out the interesting choice of language by Righthaven. It’s not that Righthaven says it can’t pay, but it seems to suggest it would prefer to use that money towards appeals. Randazza compares Righthaven to the title character in Herman Melville’s Bartleby the Scrivener:

In Herman Melville?s classic, Bartleby the Scrivener, an attorney finds frustration with his scrivener, Bartleby. Any time Bartleby is directed to perform a task, he replies with the classic refrain: ?I would prefer not to.? Initially infuriated, but beguiled by Bartleby?s charmingly passive insolence, the narrator tolerates Bartleby?s masterfully eccentric defiance, but eventually fires him. Once fired, Bartleby?s behavior becomes stranger, and he refuses to leave the premises of his employer, who finds Bartleby?s stubbornness to be an immoveable object. Bartleby?s defiance, as effective as it is, eventually leads to his undoing. Bartleby?s preference leads to his imprisonment and starvation, as he finally encounters both men and forces of nature who are unmoved by his antics.

They go on to point out that Righthaven brought this upon itself — proactively suing hundreds. The filing notes that Righthaven has been losing consistently and has not won anything since the details of its arrangement with the two newspaper partners it had became public.

The time has come for Righthaven?s shenanigans to end. Righthaven picked this fight. Righthaven, created and operated by an attorney, should have known better. Righthaven could have changed course at any time. Righthaven preferred not to. The consequence for Righthaven?s actions is now at its door, and whether it would prefer to or not, the law requires it to comply. Preferring not to comply with a lawfully issued court order is no emergency, and Righthaven should be compelled to answer for its transgressions. Even Bartleby, charming as he was, eventually suffered the inevitable consequences of his irrational intransigence. Righthaven must as well.

The filing calls into question Righthaven’s claim that it cannot put forth $34,000, noting that it’s either lying, or isn’t going to be able to pay for the appeals it has filed. The suggestion is that Righthaven is trying to use up its remaining funds to avoid paying anyone else:

Righthaven has provided no statement of its operating expenses, and it appears that Righthaven?s sole expenses are paying its CEO, who hatched and profited from this illegal scheme, and paying its attorneys in order to file frivolous motions and avoid paying lawful judgments. It is clear that Righthaven?s plan is to consume its remaining capital by transferring money to those who least deserve it, exhausting its funds until it is in a state of bankruptcy. The courts, thus far, have been unwittingly complicit in this scheme by their failure to take a definitive and stand against the ongoing fraudulent transfers. It must stop here.

Righthaven?s mass litigation model now descends upon the Court of Appeals, and it has brought no fewer than five appeals before this Court ? all of which are currently pending. Beyond this case, Righthaven is also the appellant in Realty One Group, Incorporated, Case No. 11-15714 (9th Cir., filed Mar. 24, 2011); Jama, Case No. 11-16358 (9th Cir., filed June 2, 2011); DiBiase, Case No. 11-16776 (9th Cir., filed July 22, 2011); and DU, Case No. 11-17210 (9th Cir., filed Sept. 19, 2011). Righthaven also appealed a loss to the Tenth Circuit. Wolf, Case No. 11-1469 (10th Cir., filed Oct. 11, 2011). Six appeals pending, yet Righthaven claims that being required to post a mere $34,045.50 bond is an ?emergency.? Righthaven mocks the definition of the word and mocks this court by bringing this frivolous motion.

Furthermore, the filing notes that Righthaven (in typical fashion) has failed to file the opening brief of its first appeal, even thought it was due nearly a month ago:

The propriety of Righthaven?s appeals is in serious doubt. Righthaven?s opening brief in its first appeal, Realty One Group, Inc., Case No. 11-15714, was due to this Court on September 19, 2011 and has yet to be filed. This appeal appears to be another stall tactic for Righthaven to deny the defendant in that case, and the First Amendment principles its fair use victory embraces, any finality. This leaves two possibilities explaining Righthaven?s financial condition: Either it has $34,000 that it can use to post a bond and it prefers not to, or it is absolutely broke and pursuing its appeals in bad faith, in order to deny prevailing defendants finality ? and extract a settlement from them still.

This is like watching a train wreck in excruciatingly slow motion.

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Companies: righthaven

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Comments on “Righthaven Still Trying To Avoid Paying Any Legal Fees Of Those It Illegally Sued”

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28 Comments
Anonymous Coward says:

Trading While Insolvent

Here in Australia, continuing to trade while insolvent is illegal. As soon as a legal entity (company, individual, etc.) cannot pay its debts when they fall due, then that entity is insolvent. Once the entity has been declared insolvent by a court, then things get nasty fast. Police arrive, people are ordered out of premises. A receiver is appointed by the court. The former controllers of the entity become powerless bystanders.

Corrections are invited, from more knowledgeable posters, regarding the description of the Australian system. What happens in USA?

TheStupidOne says:

Re: Re: Trading While Insolvent

Similar in USA (Second hand knowledge being passed on here) … If a person declares bankruptcy all payments they have made in the previous 30 days are seized and reallocated by the court. I forget the legal term, but if a payment was made to anyone close to the person declaring bankruptcy in the previous year, that payment is seized.

A bankruptcy lawyer told me one way to royally screw an associate or relative I didn’t like was to give them a bunch of money (that I’d be losing when declaring bankruptcy anyway), wait a few months until they spend the money, file bankruptcy and laugh as the courts seize their assets to recover the money.

fb39ca4 (profile) says:

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.?..,-?:::::::::::::::::::|::::::::::::|::”,:::::::::::: :”-‘:::: : : : : :|: : :::::::|::|FUCK U RIGHTHAVEN IMMA TREX!!!

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A Guy (profile) says:

I wouldn’t be surprised if Right Haven operates week to week or month to month by cash infusions from Stephens Media and they are currently trying to figure out of it is more legally advantageous to quickly declare bankruptcy or pay up to avoid having a court ordered trustee see the full details of the arrangement.

That’s just my guess, but it sounds like them.

Brendan (profile) says:

Second paragraph of 4th quote mangled

What currently reads:

Righthaven?s mass litigation model now descends upon the Court of which are currently pending. Beyond this case, … Righthaven mocks the definition of the word and mocks this court by bringing this frivolous motion. Appeals, and it has brought no fewer than five appeals before this Court ? all of

Should read:

Righthaven?s mass litigation model now descends upon the Court of Appeals, and it has brought no fewer than five appeals before this Court ? all of which are currently pending. Beyond this case, … Righthaven mocks the definition of the word and mocks this court by bringing this frivolous motion.

Anonymous Coward says:

Am I understanding this correctly.

Righthaven are required to post a bond for $34,045.50
and they are saying they cannot do so because they can only spare $34,000 right now.
So effectively they are saying they cannot come up with an extra $45.50?

I don’t know much about judges, but if I was one I think that if that were their argument a few people would be spending a week in jail for contempt.

Paul Keating (profile) says:

DUH

I have practiced law since 1983 and started out as a litigator. It has always been the case that the bonding companies require 100% LIQUID assets to back up the bond, PLUS the bond fee (usually another5%). This is no different from the local bank when they want collateral for a loan. However, because the bonding companies have no ability to control the outcome of the appeal.

I simply cannot believe that they are or were so naive as to not have thought this out. I believe the response should be (a) disclose your financials (I suspect they would be very interesting ala the original license agreement they tried so long to hide) or (b) drop the appeal.

DogBreath says:

(Subliminal Man) reads the Righthaven statment...

Righthaven has attempted to secure a bond as required by the district court to stay the Judgment pending appeal (buying stall time for eventual collapse of this house of cards). To date, Righthaven has been unable to secure a bond (failure evidently IS an option). The terms required by the bonding companies that Righthaven?s counsel has investigated and/or contacted are an impediment to meeting the district court?s stay requirement (not even our own mothers would loan us the money). The bonding companies are requiring what amounts to a full cash bond (they don’t believe we have a chance in hell of winning). In sum, the bonding companies ask for full cash payment, certain forms of collateral held by the company or irrevocable letters of credit be posted to obtain a bond in the amount requested (we don’t think we have a chance in hell either). To date, Righthaven has been unable to satisfactorily meet these requirements in a manner acceptable to a bonding company (they wouldn’t take the shiny “lucky” penny we found on the sidewalk). Due to the pending appeals and the stay of certain active litigation matters, Righthaven?s operating capital is being utilized to service its monthly operating expenses (the Cayman Islands bank accounts are being loaded up with all monetary assets as we speak). As such, it is presently unable to allocate more than $34,000 toward the bond required by the district court to stay the Judgment pending appeal (see previous subliminal statement for further clarification).

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