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.


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  • This comment has been flagged by the community. Click here to show it
     
    identicon
    Dilbert, May 8th, 2013 @ 8:36pm

    How about...

    How about you apply this same logic to breaking down Kim DotCom's brazen network of companies and jurisdictions?

     

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    •  
      identicon
      Anonymous Coward, May 8th, 2013 @ 8:46pm

      Re: How about...

      The wonderful thing about free speech is everyone may spend their own resources to research and publish their own opinions about topics that interest them.

      On the other hand, some people feel entitled to leech off the hard work of others, by stealing the time, money, and influence of others, by insisting that other people are obligated to speak free of charge what you're too much of a cheap bastard to pay for your own blog to say.

       

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    •  
      icon
      That One Guy (profile), May 8th, 2013 @ 9:39pm

      Re: How about...

      As the AC said, want it done, do it yourself.

      After all, if it's so brazen, shouldn't take you too much effort to find all the relevant evidence, though considering the DoJ seems to have a bit of trouble doing just that without bending, breaking or outright making up new laws, might take you a bit more work than it at first seems.

       

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    •  
      identicon
      Anonymous Anonymous Coward, May 8th, 2013 @ 10:13pm

      Re: How about...

      In all of the discussion about Megaupload and Kim Dotcom, I do not remember any of that being about shell companies. There may be come, but it seems that veil was penetrated.

      The jurisdictions issue is one for the US DOJ, not Kim Dotcom. I seriously doubt that he had the foresight to plan his empire around what the DOJ might make up, and they have been really creative. (I wonder if we should award them some Internets for creativity as well, though they might break the bank for the negative balance for actually implementing the strategy)?

       

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      icon
      apauld (profile), May 8th, 2013 @ 10:59pm

      Re: How about...

      so 'whore with no name,' it interesting that your new nic is that of a cartoon that is understood to be a tool that keeps American workers blinded by reality.

      So why don't you write an essay about Kim Dotcom's brazen network?

      Then the intelligent people could easily pick it apart and show that even with a nickname change you are still a *fn* idiot.

       

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    •  
      icon
      That Anonymous Coward (profile), May 8th, 2013 @ 11:42pm

      Re: How about...

      I just have to ask...

      Are you fucking developmentally disabled?

      I try very hard to not feed trolls, but the only comparison that could be made between Prenda and MegaUpload would be the abuse of the legal process caused by contrition to monied interests who buy the law they want at the expense of the most important stakeholder in both systems.... the public.

       

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        identicon
        horse with no name, May 9th, 2013 @ 3:20am

        Re: Re: How about...

        It is another case where the two are exactly the same.

        What Prenda has been doing and Mega had been doing was basically abusing the law for profit, attempting to hide their activities behind various corporate fronts. Kim went one step further and spread it over different countries, where Prenda just did it over different states.

        The question stands: Why not look as closely at Kim's legal dodge tactics? Why print only fairly favorable posts about him, when his methods are about the same as Prenda.

         

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          identicon
          Anonymous Coward, May 9th, 2013 @ 3:41am

          Re: Re: Re: How about...

          So Mega's experiments to find ways for creators to make money while encouraging people to pay for service are the same as demanding money with menaces?

           

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          That One Guy (profile), May 9th, 2013 @ 3:46am

          Re: Re: Re: How about...

          Besides the laughable attempt to paint the two as even slightly similar, something struck me: are you actually to admitting that Prenda may actually be in the wrong here, or was that just a slip of the finger, and you're still maintaining that they are innocent and just had a judge with a vendetta against them?

           

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          identicon
          Anonymous Coward, May 9th, 2013 @ 5:53am

          Re: Re: Re: How about...

          "The question stands: Why not look as closely at Kim's legal dodge tactics? Why print only fairly favorable posts about him, when his methods are about the same as Prenda."

          There have been posts about dodgy legal tactics, boy.
          Except all the unethical, immoral, and downright illegal actions have been by the DoJ and RIAA.
          Interesting how you ignore that aspect, boy.

           

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          •  
            icon
            art guerrilla (profile), May 9th, 2013 @ 6:45am

            Re: Re: Re: Re: How about...

            tee hee
            i know its wrong of me, but i can't help but chuckle when this a non mouse calls the usual suspect 'boy'...
            fits...
            doesn't he remind you of the pedantic asshole in grade school who would insist they had a 'legal' right to punch air in front of your face as long as they never actually touched you ? ? ?
            (of course, 'legally' they were wrong, but still insisted on mythical rights and inane loopholes that 'allowed' them to be obnoxious assholes without repurcussion...)

            thanks, a non mouse, keep on putting 'boy' in his place...

            art guerrilla
            aka ann archy
            eof

             

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          identicon
          Anonymous Coward, May 9th, 2013 @ 7:13am

          Re: Re: Re: How about...

          It's Techdirt. Pirates get a free pass (they can do no wrong!) while anyone pro-copyright gets put under the microscope. But, yeah, Mike's not pro-piracy and he's totally an evidence-based guy.

           

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        •  
          identicon
          Anonymous Coward, May 9th, 2013 @ 7:22am

          Re: Re: Re: How about...

          When Dotcom starts suing grandmas based on IP addresses you let us know.

           

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        •  
          identicon
          Anonymous Coward, May 9th, 2013 @ 8:31am

          Re: Re: Re: How about...

          The key difference is that what Prenda was doing is clearly illegal, whereas MegaUpload did absolutely nothing illegal within the jurisdictions it operated in.

          I'm sorry that the issue of what's legal and illegal is irrelevant to you.

           

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          apauld (profile), May 9th, 2013 @ 12:08pm

          Re: Re: Re: How about...

          "What Prenda has been doing and Mega had been doing was basically abusing the law for profit, attempting to hide their activities behind various corporate fronts."

          While I disagree with you that Mega DotCom is abusing the law for profit; I do agree with you that Prenda has been doing that. Doesn't really fit into your comment the Judge Wright "will be lucky to keep his job when this is all over." I find your lack of cognitive thinking skills to be hilarious.

           

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          identicon
          Anonymous Coward, Dec 8th, 2013 @ 8:38pm

          Re: Re: Re: How about...

          Nice attempt trying to samefag. You're not a horse with no name. You're "dilbert".

           

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  •  
    identicon
    Anonymous Anonymous Coward, May 8th, 2013 @ 9:34pm

    Creativity Win

    +2 Internets for Steel,Hansmeier, Duffy's creativity.

    -10,000,000 Internets for implementing that creativity

     

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    Baron von Robber, May 8th, 2013 @ 9:40pm

    A statue doesn't seem fitting.

    Perhaps a shrine to Judge Wright. I will be first to sacrifice a Prenda lawyer.

     

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    Anonymous Coward, May 8th, 2013 @ 9:51pm

    Fortune favors the bold... or so the saying goes. It is interesting how that worked out though.

    "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."

    .... this has all the makings of a great movie/comic/novel plot....

     

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    identicon
    Anonymous Anonymous Coward, May 8th, 2013 @ 9:58pm

    System Check, If....then

    "It would be good if there were a better way to flag these kinds of abuses earlier in the process"

    Seems fairly simple, include a copy of the articles of incorporation with the filing. Whether anyone checks them out is another matter. Initially however, if CEO=BLANK then don't continue the case. Responsible parties...step up! (ya, I know, like right, ha ha ha).

    So far as the statue, Judge Wright, deserves the kudos. Whether the statue gets built or not, the Internet Archive will preserve the moment. He will still have bragging rights, whether those are codified in law or not. And he deserves them.

     

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      Violated (profile), May 8th, 2013 @ 11:04pm

      Re: System Check, If....then

      It would be good to do something nice for Federal Judge Otis Wright where he has done a good job in this case and he can always choose himself what he wants made.

      He of course got involved when this Alan Cooper signature fraud started to become clear. He wanted to see how deep that rabbit hole went where he did uncover a lot of what went on and who played what role. Setting RICO and IRS investigations on them is going to put Prenda and their shell companies under the microscope for years ahead which could well end in criminal charges and punishment.

      Judge Wright does seem an Internet friendly Judge who is knowledgeable on the social matters at hand where even his recent rulings can be used against the US 6-strikes scheme.

      The law view in recent years has been skewed by pro-copyright propaganda so we should certainly welcome and promote a Judge who stands up and says this is what the law actually says and his conclusions were very damning so far as to put BT sharing as a system that cannot be litigated in Court except in the case of very high data that is quite unlikely.

      Just think what would happen if a 6-strikes appeal was taken to Court in L.A and Judge Wright got to handle that case when could not the whole scheme face destruction? So we should make Judge Wright happy where the EFF should guide such an appeal to his door.

      This is the Copyright War and that is a battle we should fight to the benefit of millions.

       

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    Tom Anderson, May 8th, 2013 @ 11:26pm

    The FBI is pretty lazy. They have access to these dockets and could be doing massive data crunching to get red flags and identify crooked lawyers.

     

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    zem, May 8th, 2013 @ 11:51pm

    Getting away with it.

    It has been going on long enough for them to have squirreled away a substantial amount of money.

    The law may be catching up with them, but unless they actually do hard time, they will be getting away with it.The law doesn't have the means, let alone, the will, to chase all the money.

    Or as an alternative I propose we contact Sean Penn and see if we can setup a new export industry for Haiti. Prenda voodoo dolls.

     

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      Who Cares (profile), May 9th, 2013 @ 12:13am

      Re: Getting away with it.

      That is where the IRS criminal investigations division (CID) comes into play.
      When people compared them to the Romulans after judge Wrights order someone commented aptly that Romulans have a better grasp of due process.
      When the CID is involved you are presumed guilty until you can prove your innocence. You better be able to show you crossed all the Ts and dotted all the Is and show that the remaining errors are innocent mistakes easily corrected or they'll stuff you in a cell while you try to figure out how to get the money for the fine they handed out.

       

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        That Anonymous Coward (profile), May 9th, 2013 @ 1:47am

        Re: Re: Getting away with it.

        I thought a better comparison was made between CID and the Borg.
        We are going to take all of your stuff and make it ours until further notice.

         

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        art guerrilla (profile), May 9th, 2013 @ 6:55am

        Re: Re: Getting away with it.

        o'course, the other thing about the eye are ess (and doj), is that -according to recent articles here and elsewhere- they can snoop virtually all your communications without any warrants, etc...

        i imagine if you opened up the pandora's box of all the emails of the principals involved, that might uncover a lot of dirty deeds done dirt cheap...

        ...*AND* they are porn industry droids, don't tell me some eye are ess kreeps aren't slavering over 'investigating' *that* shit...

        ('uh, well, yes, we had to actually look at all the pornos that were being pirated...' multiple times, i bet... probably had to take them home to work overtime...)

        art guerrilla
        aka ann archy
        eof

         

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    That Anonymous Coward (profile), May 9th, 2013 @ 12:08am

    So Mike I has question...

    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.


    Of those extreme claims, how many were actually wrong?

    I posited that Duffy might be dead and replaced with a mannequin that one time, and was shown to be wrong... I'm merely human and can make mistakes. :D

    I have a real reason behind asking this, and I wonder if the reason they were able to function so well for so long was because the behavior was so outlandish it was hard to believe, or was it the wrong poster children sounding the alarm? Or a combination thereof.

     

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    Nigel (profile), May 9th, 2013 @ 12:56am

    link to the porn please

    I like to encourage intruders. And no, I am not kidding.

    Nigel

     

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    Anonymous Coward, May 9th, 2013 @ 1:50am

    Remember, kids. If you don't let John Steele sue grandmothers for porn they didn't download, then Kim Dotcom and the terrorists win. True story.

     

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      That Anonymous Coward (profile), May 9th, 2013 @ 3:05am

      Re:

      no no he dropped her from the case after the media was sniffing around and then found the "right" person to threaten...
      Of course this was all based on his $250,000 system for finding infringers, that was incapable of errors... like pointing at a Grandmother and demanding payment until she called it extortion to the media...

       

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    Anonymous Coward, May 9th, 2013 @ 1:55am

    it isn't the abuses that are hard to catch. it depends on who is committing that abuse and who they are (supposedly) doing it for. in other words, if an ordinary person were trying something like this, they would be banged up in a heartbeat

     

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    nospacesorspecialcharacters (profile), May 9th, 2013 @ 2:07am

    I think Prenda is being misjudged

    It's obvious that they're really grey-hat US court hackers exposing weaknesses in the system.

    We should be applauding them and insisting on the US government to patch up their legal system so it is no longer vulnerable to these types of attacks!

     

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    rasz, May 9th, 2013 @ 4:19am

    And people laugh when I say easiest and cheapest way to make such lawsuit go away is to hire a hitman and whack the lawyer. Prenda would stop existing after 3 hits.

     

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    Anonymous Coward, May 9th, 2013 @ 4:31am

    "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. "

    Anyone lawyer dumb enough to believe this level of trite is stupid beyond belief.

    Any judge that believes this is too incompetent to be a judge lacking knowledge of human endeavors to such a degree as to be truly beyond the level of sufficiently incompetent to by criminally liable and mentally in-stable to be considered criminally insane.

     

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      btr1701, May 9th, 2013 @ 7:12am

      Re:

      > Anyone lawyer dumb enough to believe this level of
      > trite is stupid beyond belief.

      The word 'trite' doesn't mean what you apparently think it dies.

       

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    L3Nix (profile), May 9th, 2013 @ 6:12am

    working together

    Wasn't there an issue with the defense attorneys working with Prenda as well? If so, what's the chances of them getting caught?

     

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    artp (profile), May 9th, 2013 @ 8:25am

    A deeper problem

    Wright did a fantastic job. Congrats to him. I wish there were more judges who did this.

    ---
    But -
    The judiciary - and the attorneys - have way too much power. And the actual PEOPLE in the court - plaintiffs, defendants and witnesses - have far too little.

    Having been in courtrooms as plaintiff, defendant and witness, I can tell you that nobody gets to say what they want unless the judges and/or attorneys allow them to say it.

    Plaintiffs and defendants need to be able to tell their story no matter who gets upset about it.

    Attorneys need to be forced to tell the truth, with evidence to back up what they say. No more story-telling. Wrigth did that in this case.

    ---
    When the judges runs into a case where there is ambiguity in the law, they need to send it back to Congress for resolution instead of solving it themselves. Until Congress is forced to be accountable to someone, they will continue to crank out more coral reef instead of building bridges.

     

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