Why Prenda Has Been Able To Proceed For Years: The Whole Setup Was Too Brazen
from the people-didn't-believe-it dept
Nate Anderson, over at Ars Technica, has a good post discussing why Prenda has been able to continue its questionable legal practices for years, despite the fact that judges had been calling John Steele out years ago for this same activity. The real answer is in just how brazen Steele and his partners (mainly Paul Hansmeier and Paul Duffy) seem to have been in pursuing copyright trolling shakedowns. As we had discussed elsewhere, they had figured out ways to go after IP addresses by piling on legal loophole after legal loophole, often via state laws. Anderson has a summary that covers some of the efforts:
You could see just how devoted Steele and his partners were to their new business model, though, because even these kinds of warning shots didn’t deter them. Steele’s initial operation, which became Prenda Law in November 2011, continued to iterate. It filed cases in other Illinois federal districts downstate. It filed in Illinois state courts, jiggering the charges to match the venue (copyright infringement of this kind is a federal issue). It filed in Florida, attempting to use an arcane procedure called a “true bill of discovery” to obtain IP addresses. It filed in California. It tried out “reverse class actions” suits against alleged downloaders. It formed a company in Las Vegas (hiring a “CEO” named Mark Lutz) and set up trusts located offshore (in Nevis) in order to own porn copyrights. No pesky PR department or tentative CEO could hold up Prenda’s litigation pain train if the law firm could simply ditch the client and go into business for itself.
Anderson further notes that they were never really stopped because these layers upon layers of tricks made it difficult to tease out what was really going on, and judges are happy to clear their dockets (something Team Prenda used to their advantage by quickly dismissing cases any time judges seemed to catch on to different elements):
How could the scheme go on for so long even as federal judges complained about fraud, as “John Doe” defendants complained repeatedly that they had no idea what the cases were about, and as critics complained about the injustice of the entire business model? The answer is that federal judges aren’t generally investigators. Prenda had gone to great lengths to obscure what was really going on, who was doing what, and where the money went. Judges want to clear cases off their dockets and in rare cases will entertain sanctions motions, but to unravel something as complex as Prenda’s behavior required a real investigation. Yet without more details, actual criminal investigators had very little to go on; most of the judicial complaints dealt with behavior in court, not public crimes.
So Prenda could essentially turn the entire US judiciary into a laboratory for incrementally refining its porn trolling techniques, testing venues, judges, corporate structures, collection procedures, and legal arguments, looking for perfection. And what it arrived at in the end had a certain devious logic to it. Even Otis Wright, the federal judge in Los Angeles who brought down Prenda’s principals and referred them all for criminal and tax prosecution this week, had to concede the conceptual beauty of the system.
I think it actually goes even further than that. It’s that most judges assume, quite reasonably, that the lawyers appearing before them are not piling upon layers of tricks to try to obscure what may just be criminal activity. Lawyers are given the benefit of the doubt that, while they may sometimes push the boundaries in advocating for a client, they are generally being honest with the court about what’s happening. I think it was the sheer audacity of the overall effort by Team Prenda, that goes so incredibly far into loopholes upon loopholes, that most people — especially judges — wouldn’t even think what was happening was possible. It’s so far outside the reality they deal with. Lawyers may go a little overboard in court, but setting up a structure like this, which Judge Wright clearly believes is a direct fraud on the court, with a possible side dish of racketeering, is unbelievable.
I know that I was certainly skeptical of some of the more extreme claims about Steele and Prenda from early on — and was even hesitant to write about some of the wilder assertions made on some anti-troll blogs. However, as more and more evidence started to come out concerning Steele and the others named in this case, it was hard to deny that something massive was going on, and various courts were finally starting to catch on to the fact that these weren’t just over aggressive bad lawyers taking on dodgy cases, but rather something much bigger.
And while some other judges started down this path first, Judge Wright does deserve kudos for focusing in and really digging out a bunch of details pretty quickly once all of this started to become clear to him. Some joker has set up an IndieGogo campaign to erect a statute in honor of Judge Wright for this ruling. I think that goes a bit far, but the fact that he was willing to pursue this, where other judges just scolded Team Prenda and let them go, definitely deserves some recognition.
Still, all of this leaves open the fact that there is something of a bug in the legal system. These kinds of abuses are not easy to catch. It would be good if there were a better way to flag these kinds of abuses earlier in the process, before they can go as far as John Steele and Prenda appear to have been able to take these efforts.