Team Prenda Has A Very Bad Day In Court… And You Can Watch It All

from the make-sure-to-bring-lots-of-popcorn dept

It has been almost exactly two years since Judge Otis Wright released his blistering opinion of Prenda Law and the guys behind it, John Steele, Paul Hansmeier and Paul Duffy (“Team Prenda”). There have been various fights here and there since then, but the specific appeal in that case was finally heard yesterday and you can (and should) watch the whole damn thing (which runs almost exactly an hour and a half — though if you’re short on time, you can skip the Morgan Pietz part, and just focus on the first and last parts involving Team Prenda’s lawyer, Daniel Voelker).

If you follow a lot of appellate case or Supreme Court cases, you should know that it’s generally not a good idea to read too much into any particular line of questioning, or even to assume which way judges are leaning. In this case, however, it would be nothing short of shocking if Team Prenda comes out of this story “winning” — though, in an astounding bit of what appears to be cluelessness, Voelker said that Team Prenda would be perfectly happy having part of the case sent back to the lower court for criminal contempt sanctions. The three-judge panel seemed so shocked by this, that they asked him if he was sure, and one judge, Judge Tallman, pointed out:

“Do you understand that the maximum penalty for contempt is life imprisonment?”

In short, Team Prenda’s own lawyer not only seemed completely unprepared and out of his depth in the hearing, he ended up arguing that rather than just pay $250,000, his clients would prefer to face criminal charges with the chance of life in prison (though, admittedly, such a sentence would be highly unlikely). From all indications, all three judges seem prepared to give Team Prenda what their lawyer appeared to be claiming they wanted.

There were many guffaw-worthy moments throughout the arguments, including Judge Tallman asking about the infamous Alan Cooper forgery, and Voelker playing really dumb, leading Tallman to ask if the “tooth fairy” made the document appear. Judge Tallman also repeatedly pointed out, in disbelief, that Voelker could assert that his clients had no idea how the document got forged when Cooper was Steele’s “gardener” (actually housekeeper, but close enough).

All three of the judges seemed well aware of what Team Prenda was up to and how nefarious copyright trolling is. Judge Pregerson, who is 91 years old, talked about how his clerks explained to him how BitTorrent works, and then pretty clearly detailed how Team Prenda (and other copyright trolls) abuse the court system to “extort” settlements from end users. He concludes his description by saying, “Now that is just an ingenious… crooked, extortionate operation.” Later he said, “They used our court system for illegal purposes — to extort money.” At least one of the other judges, Judge Nguyen referred to copyright trolling as “extortion” as well. The judges didn’t refer to Prenda as a company or a law firm, but rather an “operation.” It was a complete bloodbath. The judges also seemed well aware of other Prenda proceedings elsewhere in the country as well.

Basically, the judges seemed not just aware of, but very convinced by the evidence against Prenda’s copyright trolling practices. Much of the opening part of the arguments consisted of the judges asking Voelker about those facts — and Voelker dodging every one of those questions or responding that he didn’t know, and then going back to procedural questions. The three-judge panel all found this completely unconvincing, and even where they were willing to grant potential procedural problems (mainly with the punitive sanctions on top of attorneys’ fees), noted that if they rejected those, at the very least they were likely to (as mentioned above) just send the case back for criminal proceedings, which almost certainly would leave Team Prenda even worse off. Voelker’s standard response: “They want their day in court.” It sounds like they might get it.

There were two other really amazing tidbits, both from Judge Pregerson. First, right after describing the whole copyright trolling mess and (as noted above) calling it a “crooked, extortionate operation,” he noted how historic this case was and how badly it was going to reflect on Voelker, even suggesting that Voelker may be implicated directly as well:

Pregerson: This is going to be written about for years and years, and you’re probably going to be part of the story. They all will be. I don’t know where this is going to end up. If they really want to have a trial on this… are you sure they want that?
Voelker: Absolutely your honor! They want a trial…
Pregerson: Is that what you want?
Voelker: Your honor, what I want is irrelevant. I’m just an appellate attorney. I’m not…
Pregerson: Well, you may be involved in this.
Voelker: I’m sorry your honor?
Pregerson: You may be involved!
Voelker: I don’t believe so, your honor, with all due respect. I’m just the attorney.

And then that leads into this astounding bit of courtroom drama:

Pregerson: And you’re a great lawyer.
Voelker: I really appreciate that.
Pregerson: That’s what your ad says when you go on the internet, right? I wonder how many “super lawyers” there are in this country?
Voelker: There are a lot of them.
Pregerson: There are a lot of them. And a lot of them is BS too.

Ouch. It appears that Pregerson wasn’t joking around either. From Voelker’s website:

Either way, I can’t see how the hearing could have gone much worse for Prenda.

If you want another recap from someone who knows a hell of a lot more about how epically bad this went for Prenda, check out Popehat’s take, which includes this:

I have never seen an oral argument go so badly for an advocate. The judges were immersed in the details of the record and plainly convinced that Prenda was a criminal operation that merited some sort of sanction. They clearly viewed the case not in isolation, but as part of a series of cases involving Prenda across the country ? most of which are turning out very badly for Prenda. It seemed clear that they believed that Judge Wright had the power to impose some sort of sanctions, and that the record supported his doing so.

I know that many of the Prenda watchers among our readers here keep wondering how it is that Team Prenda is not yet in jail. There are a lot of reasons for that, frankly, but their appeal in the 9th Circuit may actually lead them much closer to being in jail, in part because their own lawyer effectively said that’s what they wanted.

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Companies: af holdings, ingenuity 13, prenda, prenda law, steele hansmeier

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Comments on “Team Prenda Has A Very Bad Day In Court… And You Can Watch It All”

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Ninja (profile) says:

Re: Re: Re:

Maybe a small time in jail yes but the punishment has to fit the crime. You can’t lump them with more violent criminals so some jail time, community service and financial compensation for the victims should suffice. It would be the same as awarding thousands of dollars for a single song against a student. I think we are better than that, no?

Anonymous Coward says:

Re: Re: Re: (NInja @1209)

Valid point: a sentence of life in prison would likely get appealed as ‘cruel and unusual punishment’; such appeal likely would be upheld and remanded for resentencing.

However: why is there no talk about asset forfeiture for the defendants? After all they “extorted” money from their victims, so why do they get to keep such monies?

Mason Wheeler (profile) says:

Re: Re: Re: Re:

I think we are better than that, no?

As a lifelong proud geek, I’d have to file this one under “with great power comes great responsibility.”

What our hypothetical student did brought no harm to anyone, but what these people have done takes the legal system and perverts it, potentially bringing life-destroying harm upon their victims. Judge Pregerson understands this; he’s as outraged about how “They used our court system for illegal purposes — to extort money” as all of us have been for the last few years now.

So yes, I certainly believe in making the punishment fit the crime. You fraudulently ruin people’s lives: let your life be ruined in return!

Dreddsnik says:

Re: Re:

I’m not shocked. Going to Jail is cheaper for them and I’m pretty sure they won’t sit in the general pop. I’m really not sure of how the law works in instances like these, but I think that with a criminal conviction a civil remedy is no longer available. Someone please correct me if I’m mistaken.

Anonymous Coward says:

“Voelker’s standard response: “They want their day in court.” It sounds like they might get it.”

Don’t hold your breath. It would be of no surprise that should the case be referred back for criminal proceedings that Team Prenda will then do everything they can legal or illegal to avoid having to face any court trial against them. You watch.

Mason Wheeler (profile) says:

Re: Re:

You watch.

Yes, I think that’s the whole point. We want to watch this. Everything they’ve been doing since the beginning makes them look like the worst type of shysters, who think they’re a whole lot smarter than they actually are, and we want to watch everything they’ve done come crumbling in on them.

I’ll bring the popcorn.

Jack says:

Re: Re:

There is a world of difference between not showing up for a civil sanctions hearing with their normal shenanigans and attempting to dodge a criminal sanctions hearing…

The key difference is that if you don’t show up for one of those, the US Marshals hunt you down and drag your sorry ass there in cuffs. Care to venture which one?

Oblate (profile) says:

Team Prenda’s own lawyer not only seemed completely unprepared and out of his depth in the hearing, he ended up arguing that rather than just pay $250,000, his clients would prefer to face criminal charges with the chance of life in prison (though, admittedly, such a sentence would be highly unlikely).

Or possibly, having dealt with them for more than 5 minutes, he would prefer they face the criminal charges with the chance of life in prison.

Dan (profile) says:

Re: Is the lawyer "sandbagging"?

“Incompetent defense” won’t help them in the least in a civil case (which this still is)–they chose their attorney, and they’re stuck with his performance. It is, in theory, an issue with a criminal case, but it’s hardly ever applied (which is just one of the things that made the Rakofsky case so noteworthy).

Jack says:

Re: Is the lawyer "sandbagging"?

One possibility is they HAD to appeal, even if it was frivolous, to avoid paying the $81k judgement and mounting penalties. Even though they had to get a $250k bond, if they got good terms on it (meaning little collateral or cash out) and were planning on defrauding the bond company – they could get away with the bond company taking the hit and them running off.

Judge Wright was super angry and adding massive penalties for not paying – maybe they thought their odds with the bond company was better than their odds with Wright. They are likely right about that too considering they have other outstanding judgements they never even began to pay.

The most baffling thing is saying they want a criminal contempt hearing – that could end up SO bad for them and Judge Wright would likely be the one conducting it. They tried to disqualify him once and failed – I doubt anyone with seriously consider taking the case away from Judge Wright at this point if it is remanded.

Christenson says:

Quick Sidebar Call to Pietz' office

Recall that Pietz, asked if he knew about any sort of criminal investigation, replied “not directly”. I read that as only knowing what is going on by hearsay or in confidence.

So I’m betting one of the judges calls up Pietz, asking: “So what have you heard about the investigations???”

Call me…Cassandra

(What, no snakes????)(grin)

Anonymous Coward says:

Slow moving

When it comes to things like this the law moves slowly. It seems like it is a glacier. The thing about glaciers is that anything it front of them is eventually moved and as it moved it is broken up; first into rocks, then pebbles, then sand. Eventually it is deposited at the bottom of some backwater where it is only noticed by a bottom feeder looking for a meal.

DB (profile) says:

Voelker (Prenda’s attorney for the appeal) did a good job with a tough case.

He “didn’t know” much about the cases or companies involved, avoiding any discussion about the facts. Except for the details that helped his clients. He let mistaken assumptions stand rather than correct them (Hansmeier was deposed, not Lutz) rather than reveal he knew anything.

He asked for the world (vacating the judgement), with a compromise of a remand while vacating the sanction. Even offering a remand with criminal contempt on the table, while distancing himself from that request. (“They want their day in court”… “What my clients want, what I want is immaterial”).

Jack says:

Re: Re: Re:

I would imagine he is sitting in a bar in Florida right now, like most other days, getting shitfaced and trying to forget all about how hard John Steele fucked him straight in his ass, his cars being repossessed, his house being foreclosed on, and contemplating how he can hold onto his little remaining money long enough to drink it away and promptly vomit all over himself.

Or at least I hope so.

James Burkhardt (profile) says:

Re: Question: too new

They ar a copyright troll, who ‘discovered’ the DMCA administrative subpoena, and went to town. Until they got challenged in multiple courts accross the counrty at the same time. Then the supposed copyright holder was discovered to be the grounds keeper of one of the principles of prenda law, and he knew nothing about it. Then when the lawyers were discovered by the courts to not actually know much about the cases, they started throwing their lawyers under the bus, saying the lawyers were the real perpitrators….it just devolved from there and ended with several 6 figure judgements against prenda law. But my summary really doesn’t explain the issues well. You’d need to read the articles to really understand all the ways they tried to game and manipluate the legal system.

andy says:

Re: Question: too new

Preda a company sent threatening letters to people who downloaded a movie they uploaded and stated they owned the copyright to by forging a signature. Someone decided enough is enough and sued them. Suddenly all those people threatening decided they had nothing to do with the business even though the persons signature forged was one of their housekeepers.

many appeared in court and refused to testify , saying they had nothing to do with Preda and do not know who does have anything to do with them, when asked to provide details about the case, like where the money is, they claimed the 5th and refused to testify, all but a lawyer who was supposedly only involved in the litigation and knew nothing of the day to day running of the business.

Simply a few lawyers got together tried a scam and when caught out are trying to use legal loopholes and twists and turns to get out of anyone taking responsibility for their actions.

Simple really, i hope the judges do not get bogged down with all of these he said she said and just use the evidence before them to ensure they do not get back the $250 000 they had to pay which they now want back, hopefully they will be forced to pay more or appear before a criminal court on charges of forgery and falsifying evidence, which could mean serious jail time.

That One Guy (profile) says:

Re: Question: too new

Copyright extortion, showing massive hubris and flat out lying in court on countless occasions, forging someone’s name on legal documents, then when caught on that claiming that they did no such thing, and when called on that shifted to ‘well it doesn’t matter’, claiming that they just cannot afford the fines levied against them, only for one of them to have it exposed that he was renovating one of his houses with an outdoor pool at the time… really the list goes on, and it’s filled with insanity from top to bottom.

Anonymous Coward says:

Re: Question: too new

Remember the scene in the Jim Carrey movie “Liar, Liar”, where the cop pulls Our Hero over? A bit like that.

1) Is/was a copyright troll (sends letters demanding a settlement, cost of which would be less than even a nominal defense) over Bittorrent downloads of smut…
2) … who conned courts into approving wholesale “tell me who these people are” (from IP address to account owner) demands of ISPs.
3) … and in at least one case made fraudulent assertions of “hacking” in order to demand the IP addresses.
When called upon it by someone who actually brought them to court, it was found…
3) … that the copyrights were being held by shell corporations
4) … with no ‘real’ officers
5) … except a paralegal (? “Mark Lutz”) whose name got used as owner for the shell corporations
6) … and that they’d forged the name of a groundskeeper (Alan Cooper) one of them had employed on the corporation documents.
7) … and that they themselves had seeded the ‘torrents that people had used.

Their suits started collapsing under the weight of scrutiny (and fraud charges from Cooper). When things started unraveling…
8) … Lutz failed to show up to be deposed about the corporations,
9) … the lawyers (Duffy, Hansmeier, Steele) declared they “knew nothing” about as convincingly as Sgt Schultz,
10) … said lawyers hid their gains by Creative Account Management and then plead poverty in the face of awards against them
11) … ignored emails and then claimed ‘lack of service’ to those self same email addresses
12) … and had one of their local counsels (rent-a-lawyers, credentialed to serve in a district) – who they were trying to throw under the bus – turn on them, bringing to light some telling financial documents.
13) … and when finally compelled to appear and answer very pointed questions, they plead the fifth.

They’ve pretty much been smacked down in every court they’ve appeared before.

These are the highlights as I remember them. I am sure I’ve got some details wrong here, so please correct me as you see them.

John Fenderson (profile) says:

Super Lawyer not so super

I was fascinated by that Super Lawyer thing. The (R) indicates that it’s a service of some sort, and one with an incredibly lame name. And it is! Here’s Bad Laywer’s commentary about them:

Of all these sorts of promo publications, Super Lawyers is the biggest bunch of BULLSHIT I’m familiar with in my business. If this is something you’re into, you get a bunch of your friends to nominate you and voila, you are a “super lawyer.” When I first saw this publication–I don’t know, maybe ten years ago?–I was curious. Within a couple of months, a young lawyer that I got a first job for and who I knew to be inexperienced, not a litigator, and just acquiring skills was on the cover of this publication. My reaction, was complete cynicism. Oh, there is one other element, how, ethically, can lawyers promote themselves as “super lawyers,” when the disciplinary rules prohibit self-aggrandizing statements in advertisements? Then again how do lawyers get away with the garbage that passes for theri Yellow Page listings and television commercials? Let’s face it I’m getting old and cranky.

That Anonymous Coward (profile) says:

I do hope that they go back for criminal proceedings, because there then is a chance the victims of the crimes these lovely people committed might be made whole.

They defrauded the courts, and that has the courts all concerned… yet the fact their playbook included threats of actions not supported by the law to sway people into paying them off to go the hell away never made much difference.

We have lawyers today making threats about talking to the neighbors to work around protective orders that put their ability to trash the name of defendants on a short leash. These cases are a money machine, powered by misery and extortion and seeing Pretenda walking away with millions and maybe a slap on the wrists was not a deterrent. Steps taken to curb the abuses lead to larger abuses where the slap on the wrist they get for doing it doesn’t offset the amount of cash they pull in.

Broken law is broken, the rules have been broken, it is well past time that this actually gets fixed. Peoples lives are turned upside down in the pursuit of cash not the pursuit of actually stopping infringers. They don’t want to make it stop, because its a huge revenue stream assisted by the courts who seem ambivalent at best to the idea that maybe a lawyer might stretch the truth to get paid.

So in 3 years when Pretenda finally gets a day in court, and 2 years after that when all of the foot dragging is done, we might finally see them punished for their crimes… pity it takes that long to turn a lawyers life upside down when regular people are lucky to have mere months.

Anonymous Coward says:

Voelker’s plan of attack seems to be saying “Look, if you had just let my clients get the desired results they wanted, we wouldn’t be here today! I don’t care if what they did might have been illegal; you would never have got to that point if Wright had just let Lutz lie to the court like he’s always done! Wright was wrong, and I’m not going to budge from this until you tell me I’m right!”

It’s like watching an ant arguing with an elephant, telling the elephant that he shouldn’t be allowed to crush the ant if he puts his foot on the ant.

Anonymous Coward says:

Anybody else just love the old guy in the middle?

Seriously, I was listening to this, and hearing him praise it all as an ‘ingenious, clever extortion operation’, and then harken back to a case he handled in 73… I cracked into a huge smile and just laughed.

I know the thought is immature, but all I could hear was ‘Now listen here whippersnapper… back in my day we had some REAL extortion! You ever hear of it? Now you boys came close, but lemme tell you this doozie.’

Paul Alan Levy (profile) says:

Where the blame lies

We all love to hate Prenda Law, but I am not so sure it is right to demonize the lawyer who is representing it on appeal.

I watched the oral argument video, and I have to say that I do not share the view expressed here about the quality of Prenda Law’s appellate counsel or, indeed, the optimism expressed here about the outcome of the appeal. To be sure, Morgan Pietz was by far the more engaging of the two appellate lawyers, and he displayed far more willingness to dig into the relevant precedents and argue about them, but Voelker may well have had the winning argument, and I thought some of the panel were treating him unfairly, even bullying him, out of frustration at his clients.

Voelker’s argument was that once the judge threatened jail time as a consequence of the sanctions hearing, it became a proceeding for criminal contempt, to which procedural due process requirements applied, and furthermore than when the judge (according to Voelker) precluded Prenda from putting on any evidence because its principals were invoking their Fifth Amendment privilege, he irrevocably tainted the proceeding. At that point, his argument is that judge couldn’t pull it back and save the proceeding by imposing civil sanctions based on the fact that the defendants asserted their Fifth Amendment privilege in the criminal proceeding (because invocation of the Fifth can be used against the lawyers in a civil proceeding). And he said, what my clients want is their day in court with proper procedures.

I have not read the briefs or the precedents on which he relied to make my own assessment of whether he has a good argument on that. But on listening to the argument of the Doe’s lawyer, and to the rebuttal argument, it seemed tome quite possible that the sanctions would be overturned, at least in substantial part and maybe entirely, on procedural grounds.

And considering that the argument was based entirely on procedure, it seemed to me entirely fair that Voelker refused to let the judges draw him into a discussion of the facts of the case. It’s not the strong point of the appeal (since factual determinations are reviewed for clear error), and anyway the facts stink to high heaven. So in this regard, Voelker’s approach may well have been the best one for his client.

Now, was the client’s choice wise? Maybe, maybe not. When you are representing parties in an appeal from the imposition of contempt sanctions, based on the argument that the contempt was criminal not civil you have to advise them to consider whether they want to take the risk of being prosecuted (I am currently handling such an appeal, although I think MY client is a bit more sympathetic than Prenda). But berating the appellant’s lawyer about the choice his clients made strikes me as unfair to the lawyer.

Beyond that, I found myself offended by the panel’s bullying of Voelker for representing his clients in a criminal appeal. The panel suggested that Voelker might have personally involved in the trial court shenanigans – was there any evidence in the record for that? Judge Pregerson (and Mike, too) made fun of the fact that Voelker’s web site cites his inclusion in the bullshit list of Superlawyers (of course, so does Morgan Pietz’s web site: But why is that relevant at oral argument? Judge Pregerson went on about the fact that Alexander Hamilton was born in St. Kitts, asking a series of questions to see whether Voelker knew Hamilton was born there. So what?

Over the years, representing clients taking unpopular positions, I have been bullied at appellate oral argument by judges who know you can’t sass them right back, and it sucks. I have also seen opposing lawyers bullied by appellate judges and I cringe when that happens. We might hate Prenda Law, but unless there is reason to hold its lawyer responsible for its bad conduct, we should concentrate our fire where it belongs.

Anonymous Coward says:

Re: Where the blame lies

“The panel suggested that Voelker might have personally involved in the trial court shenanigans”

Not necessarily, but to paint Voelker as someone completely unrelated to the Prenda gang isn’t quite accurate. As SJD already pointed out, Voelker and Duffy go kinda way back.

And as for having stories written about him, it’s already happened. In the Bloomberg article on Prenda Voelker was the one who shed some light about the gang’s shared history.

If this was about guilt by association, Heather Rosing (the lawyer who passed on the message that Steele and gang were pleading the 5th) would have gotten the same shitstorm Voelker did. Voelker is getting what he’s getting because he’s not nearly as sympathetic.

James Burkhardt (profile) says:

Re: Where the blame lies

I have not read the briefs or the precedents on which he relied to make my own assessment of whether he has a good argument on that. But on listening to the argument of the Doe’s lawyer, and to the rebuttal argument, it seemed tome quite possible that the sanctions would be overturned, at least in substantial part and maybe entirely, on procedural grounds.

And considering that the argument was based entirely on procedure, it seemed to me entirely fair that Voelker refused to let the judges draw him into a discussion of the facts of the case. It’s not the strong point of the appeal (since factual determinations are reviewed for clear error), and anyway the facts stink to high heaven. So in this regard, Voelker’s approach may well have been the best one for his client.

I have followed this case closely, and read the transcripts of the infamous contempt hearing and the sanctions order. I have not reviewed them recently but–

At the hearing, the first thing stated by any of Prenda’s lawyers was that they were taking the 5th. Please remember that this is the second time they had been ordered to appear, and they refused the first time. In the span of the session, the lawyers never once attempted to bring evidence to their behalf, even after Judge Wright told them that this was the venue for Prenda to defend itself, insisting that what they wanted to address were procedural issues. That is, rather then provide evidence and testimony about questions that have been raging across the country to counter multiple claims of fraud and failing to adhere to court orders issued by Judge Wright, they chose to insist that, procedurally, they could not be held accountable. So Judge Wright told the lawyer to make her legal arguments in a briefing and ended the session.

That likely leads to the judges questioning of facts, as the defense refused to produce evidence in the original trial, so its a little strange to insist they were denied the ability to produce evidence. Procedural games are Prenda’s playground, and given the fact that they have been repeatedly smacked down for those games, I can see how the judges weren’t going to take that in this case.

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