Former Righthaven CEO Fights Back; Claims As The Manager Of The Manager Of Righthaven He's Still In Power

from the popcorn dept

We recently wrote about how the receiver for Righthaven’s assets, Lara Pearson, was surprised to learn that Righthaven founder and former CEO Steve Gibson had gone out and hired lawyers in an attempt to continue the appeals court cases concerning some of its district court losses on key issues. Given that Righthaven had gone into receivership, and Pearson had effectively taken control while auctioning off what few assets there were, this was a problem. Pearson made it clear to Gibson that he no longer had anything to do with Righthaven, alerted both the lawyers he had hired and the court of what Gibson had done, and hoped that Gibson would go away. No such luck: he’s now filed an “objection to the receiver’s notification terminating” his job. You can see the whole thing below.

He makes a few points. First, he again reiterates that Righthaven’s key lawyer in many of these lawsuits, Shawn Mangano, had simply stopped responding to him back in February. He seems to want to blame the mess he’s in on that. Separately, he argues that the receiver did not have the right to take over the company, and that she did not follow specific court rules. Also, he appears to be trying to reclaim ownership of Righthaven, though the argument is complex:

Even if the Receiver’s termination of me as CEO was somehow within her authority and done within the parameters of permitted procedure, the Receiver’s position that that somehow divests me of authority would be wrong. A limited liability company is ultimately governed by its members and the members have chosen Net Sortie Systems, LLC (“Net Sortie”) as its statutory manager. I am the manager of Net Sortie. While the manager manages the CEO, in the absence of a CEO, the manager would assume management of all affairs of Righthaven…

He seems particularly upset that Pearson went out and hired another lawyer — one who fought against Righthaven — to help deal with the ongoing appeal, which likely means an effort to get the case closed as quickly and simply as possible. Gibson claims that it’s his right to make such hires, despite the dismissal from his job that appears to indicate otherwise. He also keeps suggesting that there’s a public interest in having the case heard at the appeals court — and insists that (the old) Righthaven would succeed on appeal and get a litany of district court rulings against it overturned.

The filing is also chock full of snide remarks directed at Marc Randazza, with Gibson suggesting that the fact that blogs and others in the press have been mocking him is all because of Randazza — and that the press’ interest in this case is somehow unfair to him. Gibson really does seem taken aback at the fact that no one seems to be on his side any more. His own lawyer won’t returns his calls. His job at Righthaven has been stripped away. He’s being investigated for all this. So you can understand why he’s lashing out and going legal, but this can’t end well for him.

Rather, it appears that the Receiver is following the agenda of Mr. Randazza who apparently has a very serious concern that the Ninth Circuit will rule in Righthaven’s favor and unravel, finally, his vigorous press campaign, his personal attacks and any right to legal fees he currently enjoys. Unlike Mr. Randazza, Righthaven generally has made a conscious decision to not litigate matters in the press, to not engage in personal attacks either before the courts or otherwise and to address the legal arguments in a clinical fashion.

Independently, as addressed more fully, infra, I remain the manager of the manager of Righthaven and I should have the right to hire or terminate Righthaven counsel.

In other words, this saga is simply not over yet.

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Companies: righthaven

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Comments on “Former Righthaven CEO Fights Back; Claims As The Manager Of The Manager Of Righthaven He's Still In Power”

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57 Comments
Nom du Clavier (profile) says:

Re: Jealous

I wonder what Steve Gibson the computer scientist thinks about all this. Will we see Gibson vs. Gibson, a defamation suit?

More seriously: The theory that as manager of the manager of the company he’d have power to hire/fire would constitute a big loophole in receivership proceedings, if left standing. We that allowed, he could hire himself for 1 hour at an hourly rate of $whateverisleft.

Anonymous Coward says:

I’m thinking Gibson should hire Carreon as Righthaven’s lawyer. I think the two of them would make a great pair.

Perhaps we should also try to get Jack Thompson in there and have the Three Stooges all under the same roof together! Just imagine the slapstick lawsuit comedy the three of them could produce together!

Anonymous Coward says:

Re: Re: Re: And where is Righthaven getting the money to hire a laywer?

Could be a friend that owes him a favor. Who knows? I think it’s a little strange that the receiver is so against this appeal being argued before the Ninth. Judge Pro ruled that he didn’t have subject matter jurisdiction, and then proceeded to rule on the merits. The argument that the merits were intertwined with the standing issue made no sense. Nor did the judge’s fair use analysis. Let’s just get the Ninth to look at this whole thing so we can finally get some answers. I understand why Randazza is fighting tooth and nail to make sure no appellate court scrutinizes Pro’s ruling, but frankly I’m surprised the receiver is so against it. Even though she stands to lose her position as receiver if the Ninth sides with Righthaven, that’s what’s best for Righthaven. Seems like the risk/reward favors letting Righthaven prosecute this appeal. The worst that could happen would be a loss, with attorneys’ fees being awarded to Hoehn for the cost of the appeal. Best case scenario, Righthaven gets a victory on the standing issue and the fair use issue. If the Ninth says Righthaven has standing after all, then that’s a game changer. I really have to wonder if the receiver actually has Righthaven’s best interests in mind. The fact that she hired someone who used to represent one of the Righthaven defendants to represent Righthaven, I think, shows questionable judgment. It’s a mess, that’s for sure.

Scote (profile) says:

Re: Re: Re:2 And where is Righthaven getting the money to hire a laywer?

“I understand why Randazza is fighting tooth and nail to make sure no appellate court scrutinizes Pro’s ruling, but frankly I’m surprised the receiver is so against it. “

No, I’d say you are trying to exaggerate why. Randazza fights this because having to argue the same things over and over costs his client money that he’ll never be able to collect from Gibson, who refuses to pay fines and judgements, but somehow has the money for a lawyer.

The receiver is doing the right thing. She was supposed to have been given all the Righthaven assets to settle legal judgements. Now Gibson, who, IMO, clearly was hiding assets, is apparently giving money to an attorney to continue the cases, money that he legally owes to those with outstanding judgements against him.

Anonymous Coward says:

Re: Re: Re:3 And where is Righthaven getting the money to hire a laywer?

You sound like the receiver. When she ran to the court to complain about Gibson’s hiring an attorney to pick up the appeal, she said that Gibson must be hiding money. And then in a footnote she hedged. There’s no evidence that Gibson is hiding assets, and given how much he probably values his license I can’t imagine that that’s happening. Sounds unbelievable to me.

I was looking at the order appointing her receiver (she was recommended by Randazza et al., of course), and I see that her receivership was limited to just the IP: “it is hereby ORDERED that Ms. Lara Pearson is appointed Receiver of Plaintiff Righthaven LLC?s intellectual property.” http://ia700408.us.archive.org/32/items/gov.uscourts.nvd.78697/gov.uscourts.nvd.78697.62.10.pdf

How could she think her mandate lets her fire officers too? I don’t get it.

Let’s see: Friends with Randazza, hires one of Righthaven’s foes to represent Righthaven, exceeds her mandate to receive IP, won’t let Randazza’s precious appeal happen (we know how much he wants both the lack of standing and the fair use rulings to go without scrutiny), “fires” Gibson, Pro’s silly rulings, etc. You guys all tend to lay the blame on Gibson et al., but clearly there’s a lot of other funny business going on here too. The fact that the receiver, one chosen by Randazza, is trying so desperately to stop this appeal, that can only hurt Randazza’s client, is really quite fantastical. Railroading comes to mind.

Anonymous Coward says:

Re: Re: Re:5 And where is Righthaven getting the money to hire a laywer?

Just a law student who is trying to see this thing from both sides. No agenda other than to seek out the truth. I try my best not to work backwards. Instead of siding with whatever argument is worst for Righthaven, I’m trying to understand who’s right. I think the courts to address the issue so far have misapplied Silvers, and I’d love to have the Ninth look the standing argument over. Like it or not, the standing issue and the fair use issue are both important copyright issues. This case is important, and it should be heard. Yes, Gibson is a dirtbag. I get that. But I think he’s actually got the better argument.

Anonymous Coward says:

Re: Re: Re:6 And where is Righthaven getting the money to hire a laywer?

Just a law student

Well, now I understand the whole “lawyer not getting paid” justification from earlier…

Anyway, good luck with that whole truth/law idea you’ve got going. I know there are good lawyers out there, its just hard to pick ’em out sometimes.

Anonymous Coward says:

Re: Re: Re:7 And where is Righthaven getting the money to hire a laywer?

We don’t know whether he’s getting paid or not. What I think we do know, though, is that Righthaven isn’t paying him. I don’t really see how it matters, and it seems like a ploy to get people to take their eye off the ball. If the court didn’t have subject matter jurisdiction, then it shouldn’t have reached the issue of fair use. Without jurisdiction, there is no case or controversy, and the opinion is advisory. How the receiver thinks this appeal will hurt Righthaven boggles the mind. If the Ninth agrees that Righthaven doesn’t have standing, it’ll vacate the fair use ruling. That’s a partial victory for Righthaven. If the Ninth, on the other hand, agrees with Righthaven that they do have standing, then that’s obviously a huge victory for Righthaven that affects almost all of their other cases. The fair use ruling would then be struck down on the merits–or even affirmed. It doesn’t matter. Either way, Righthaven can only win. If she’s looking out for Righthaven’s interests, then why do her decisions strike me as being better for Hoehn and Randazza–the opposition? But yeah, let’s hypothesize about Gibson committing perjury and fraud, anything but look at the things that we actually have evidence of.

Jeremy2020 (profile) says:

Re: Re: Re:8 And where is Righthaven getting the money to hire a laywer?

I think you should review the history of righthaven and the multiple ruling against them.

I notice you ignored the question I asked. Can you point to any case that was in righthaven’s favor?

That is why it is at the point it is now. You can’t keep a bankrupt company open to just keep bringing bogus lawsuits.

MrWilson says:

Re: Re: Re:4 And where is Righthaven getting the money to hire a laywer?

Wouldn’t the intellectual property include the trademark on the name and its uses? Would filing appeals on behalf of the company constitute a violation of the trademark on Righthaven since Gibson doesn’t have the permission of the Receiver to use the name for any purpose? It seems like if Gibson uses the name, he’s committing fraud because he’s representing that he has a right to use Righthaven’s IP.

Anonymous Coward says:

Re: Re: Re:5 And where is Righthaven getting the money to hire a laywer?

Good question. You’re confusing trade name and trademark. The name of the company is Righthaven LLC. That is the name of the business entity that was created by the articles of organization. The trademark is RIGHTHAVEN for “Searching and retrieving information, sites, and other resources available on computer networks for others.” He’s using the legal name of the company to prosecute the company’s legal rights. He’s not using the trademark in commerce. He’s using the name of business entity to identify that entity. Even if Righthaven doesn’t own the mark, they can still identify their company by name. It would only be trademark infringement if they actually provided services using the RIGHTHAVEN mark.

alanbleiweiss (profile) says:

Re: Re: Re:3 And where is Righthaven getting the money to hire a laywer?

come off it. I forgive you as a law student for not comprehending sound fiscal responsibility. So let me help you out. It’s her ethical and fiduciary responsibility to curtail any expenditures wherever possible, so that she, on behalf of Righthaven, can fulfill as much of their legally obligated debt as possible.

The fact that you don’t grasp that notion speaks volumes of why so many lawyers go off half-baked with complete disregard for fiduciary considerations and only seek to put another feather in their cap, and get a big slice of the perceived potential pie should they actually win.

Anonymous Coward says:

Re: Re: Re:4 And where is Righthaven getting the money to hire a laywer?

I don’t see how curtailing expenditures is within her mandate. I went back and reread the motion to appoint her as receiver, as well as her report to the court. There seems to be a huge misunderstanding on her part as to what her role is. Randazza’s motion to appoint her as a receiver makes clear that it’s for the limited, ad hoc purpose of selling Righthaven’s IP to partially satisfy Hoehn’s judgment. She seems to think that once she is appointed the receiver for a limited purpose, then, despite the limited purpose, she has the full range of equitable powers that receivers potentially could have. She points out that receivers CAN have almost unlimited powers–and this is true–however, in this case, it is clear that her particular receivership is quite limited. Just because a receiver can have really broad powers, I don’t see why she assumes that she has these broad powers when her receivership is explicitly limited to the IP (and arguably to some tangible assets that were mentioned in the motion but not mentioned in the order). She is clearly, IMO, far exceeding her limited mandate. That, plus the fact that Randazza hand-selected her, looks really, really fishy. But, for whatever reason, Righthaven and Randazza don’t actually get sufficiently criticized or scrutinized on Techdirt.

alanbleiweiss (profile) says:

Re: Re: Re:5 Let me avoid the Carreon Effect

well I need to state that I stand corrected, if your reading is accurate, since I did NOT take such time to thoroughly read through the motion and her report. And that should teach me a lesson lest I become subject to the Carreon Effect due to my overzealousness in berating others on this site. 🙂

Anonymous Coward says:

Re: Re: Re:6 Let me avoid the Carreon Effect

No worries. The whole thing is really quite fascinating.

The motion to appoint Pearson as receiver is here: http://ia600408.us.archive.org/32/items/gov.uscourts.nvd.78697/gov.uscourts.nvd.78697.62.0.pdf It makes clear that the receivership is about assigning and selling Righthaven’s IP.

The proposed order making her receiver is here: http://ia600408.us.archive.org/32/items/gov.uscourts.nvd.78697/gov.uscourts.nvd.78697.62.10.pdf It says: “[I]t is hereby ORDERED that Ms. Lara Pearson is appointed Receiver of Plaintiff Righthaven LLC?s intellectual property.”

Judge Pro adopts the proposed order here: http://ia600408.us.archive.org/32/items/gov.uscourts.nvd.78697/gov.uscourts.nvd.78697.66.0.pdf

The receiver’s report, wherein she makes clear that she thinks she has almost unlimited powers to terminate officers, repudiate contracts, etc. is here: http://ia600408.us.archive.org/32/items/gov.uscourts.nvd.78697/gov.uscourts.nvd.78697.92.0.pdf

I’m stupefied. If a judge appointed me to be receiver of an LLC’s IP, I wouldn’t then think that I could completely take over all the company’s affairs, even going so far as to threaten to sue the CEO on behalf of the company. It’s really quite remarkable.

alanbleiweiss (profile) says:

Re: Re: Re:7 Let me avoid the Carreon Effect

Wow. I just read the motion. I agree – it ONLY discusses (repeatedly throughout) the intellectual property and “other intangible assets” and does an extensive job of detailing exactly what that refers to.

So leave it to another attorney (the receiver) to pull her own twist of logic…

floored.

Anonymous Coward says:

Re: Re: Re:8 Let me avoid the Carreon Effect

Could the thing look any sketchier? Randazza chooses Pearson to be receiver, for a very limited purpose that Randazza details at length in the motion. Once in place, Pearson decides that she has almost unlimited power to take over all of the LLC’s affairs. She decides that Righthaven won’t be pursuing the appeal against the client of Randazza, the person who chose her for the job. WTF? I cannot imagine that Judge Pro will allow this to continue. My prediction, Pro shitcans Pearson. She went too far. And while I don’t know if there actually is any impropriety going on here, I certainly think that it looks that way. I have noticed in the past that Randazza is *very* aggressive, let’s just say that. Perhaps a truly neutral receiver needs to be appointed, or better yet, since the IP auctions are done, Pearson’s receivership should be over anyway. The whole thing looks really, really fishy though, that’s for sure.

Anonymous Coward says:

Re: Re: Re:7 Let me avoid the Carreon Effect

Judge Pro adopts the proposed order here: http://ia600408.us.archive.org/32/items/gov.uscourts.nvd.78697/gov.uscourts.nvd.78697.66.0.pdf

I think I was a bit wrong there. Looking it over again, I see that the judge granted the motion. He didn’t adopt the proposed order. Said Judge Pro: “IT IS THEREFORE ORDERED that Defendant?s Motion to Appoint Receiver and Compel Assignment of Intellectual Property (Doc. #62) is hereby GRANTED.”

The first sentence of the motion makes clear that the receivership is limited: “Defendant Wayne Hoehn (?Hoehn?), through his attorneys, brings this motion seeking this Court to order the appointment of a receiver to which Plaintiff Righthaven LLC (?Righthaven?) shall assign all of its intellectual property and other intangible property, which the receiver shall auction in order to partially satisfy Hoehn?s judgment and writ of execution entered against Righthaven. (Docs. # 44, 59).”

So the receivership is explicitly for the purpose of having Righthaven assign the rights to the receiver, and then the receiver is to auction them off to get some money for Hoehn (which I surmise actually goes to Randazza’s crew). Nothing about having plenary power to take over the company, fire Gibson, hire lawyers, etc.

The funny thing is, Pearson is now saying that she just assumed that Gibson and wife were fired as of the moment she was appointed receiver. But this cannot be. The sentence quoted shows that she should have been expecting Gibson to transfer the property to her. How could she expect Gibson to effect the transfers if she considered him to have already been fired as CEO? That makes no sense, and appears to be some post hoc rationalizing. She couldn’t possibly have thought that the man who had just been fired would thereafter transfer the rights to her.

ChimpObama McBinLadenBurton says:

Re: Re: In the Theme of Naming these kinds of Actions........

Jesus.

ChimpObama’s (Formerly ChimpBush) Second Law:

“At the moment an online discussion has a contributor mention the name “Kirk”, the probability of a followup comment mentioning the word “Enterprise” approaches 1.”

COMBB

Anonymous Coward says:

Re: In the Theme of Naming these kinds of Actions........

Pretty sure this is the Carreon Effect. Bit of a slap in the face to Gibson; he was tilting at windmills way before Carreon was.
Maybe if he’d donated $10 to a charity and then sued them for taking his money, we’d be calling it the “Gibson Effect”…

alanbleiweiss (profile) says:

Re: Re: In the Theme of Naming these kinds of Actions........

Yeah it’s the Carreon Effect, as we so aptly coined that phrase right here on Techdirt. Had the Gibson whack-a-mole issue reared its ugly head to the degree it’s currently exposed before Carreon came onto the scene, it would be the Gibson Effect. Timing is everything especially when talking precedent.

Even though Carreon really stole the Carreon Effect concept from Barbra Streisand. And he should be held liable for that as well.

Minimum Wage Shill says:

Re: Guidance

im the one that gave steve gibson all that guidance. i told him if he wanted to be a good ip extremist he should

a: not show up to court

b: make ridiculous claims

c; lose in every district possible

d; blame the legal system for your failures

e; blame the press

f; blame everyone else for your own failures.

so far he seems to have followed my advice pretty well. how did i do, is there any other piece of advice i should give?

too bad he’s losing like crazy though, our stupid legal system needs to be nicer to all the ip extremist shills.

Loki says:

So they can’t take his company, because the company’s “members” (that would be him) have chosen a “company” (also him) to run the company in his place?

Damn, wouldn’t that be sweet – what? no you can’t fire me, I’ve hired someone – myself – to do my job in my place.

He just singlehandedly solved the unemployment problem in this country.

Violated (profile) says:

Silliness

He seems to be leaving this a bit late when the company’s assets have already largely been sold off including their domain name. I don’t even quite see the point of why he would want RightHaven back instead of just letting it die and to start over.

All I see is him saying “You can’t do this to my company because… because… [silent sobbing]” I would expect the court to end this one quickly when he is being rather silly.

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