More Sanctions Issued Against Team Prenda

from the get-those-appeals-warmed-up dept

Late last week we noted that Judge Edward Chen was becoming as suspicious of Team Prenda as Judge Wright, and so it didn't take long for Judge Chen to add to the pile of sanctions against the key players, this time ordering another $22,531.93 in legal fees to Joe Navasca. Judge Chen's order is short and to the point, making the case that the lawsuit itself was "frivolous and objectively unreasonable" on a variety of fronts:
  • The forged signature of Alan Cooper: "the signature by Alan Cooper appears to have been a forgery, as Judge Wright concluded in his recent sanctions order." Chen notes that Prenda/AF Holdings denies this, but points out that their only argument against all of this is "sheer speculation.'
  • The claim against Navasca "was not based on an adequate factual investigation." Chen points out how ridiculous it is that Prenda claimed Navasca was the likely culprit because he worked in tech support, noting "one does not need to be tech savvy in order to download information from a computer."
  • "AF filed an emergency motion to compel... even though, at the time it filed the motion, Mr. Navasca's discovery responses were not even due yet."
  • Judge Chen notes that Prenda/AF Holdings argued that the reason it tried to dismiss the case and get out of it was because of the Court's "undertaking ruling" against it, but if that were true, you'd think they would have asked the court to reconsider. Yet, as Chen notes: "AF filed an emergency motion to compel, see Docket No. 38 (motion), even though, at the time it filed the motion, Mr. Navasca's discovery responses were not even due yet."
  • The whole argument about how Navasca spoliated evidence using CCleaner was a complete joke. Noting that Prenda "has offered no real support for this claim." And, worse, even though Prenda lawyers had been told by a judge to investigate "the purpose and effective of CCleaner" they, of course, did "not appear to have done anything" along those lines.
  • The real kicker. Judge Chen notes the real reason that Prenda sought to dismiss the case: the absolutely devastating deposition of Paul Hansmeier in this Navasca case is what pushed Judge Wright over the edge in the central district of California, after Hansmeier put on a ridiculous performance and more or less cemented the clear point that Prenda was up to no good.
Given all that, it's not difficult for Judge Chen to add to the growing line of monetary sanctions against Team Prenda:
AF's motivation to bring suit is problematic given its apparent lack of standing. Furthermore, even if AF did have standing, the fact that someone may have illegally downloaded the copyrighted work does not justify AF's decision to sue Mr. Navasca specifically. As discussed above, the factual investigation done by AF prior to identifying Mr. Navasca as the alleged infringer was inadequate. Furthermore, as indicated by the findings made by Judge Wright in his case, AF does not appear to have been motivated to file suit in order to protect the copyrighted work at issue. Rather, AF's business model was to sue people for downloading pornography in order to coerce settlements.

For the above reasons alone, the "motivation" factor weighs strongly in favor of Mr. Navasca, and against AF. However, one final consideration has been offered by Mr. Navasca, which raises even more concern on the part of the Court with respect to AF's motivation. More specifically, Mr. Navasca has offered evidence – the Neville declarations – which indicate that persons affiliated with AF used the alias "sharkmp4" to post links on the Pirate Bay website to many of the copyrighted works in order to induce users to download the works so that they could then be sued for copyright infringement. This evidence corroborates Judge Wright's finding that the motivation for this and similar suits is to sue and coerce settlement.
As for Prenda swearing up and down that the Neville declaration is wrong, Judge Chen isn't buying it. If Neville is wrong, he points out, you'd think that Prenda would present some counter-evidence. But they don't, other than to try to attack Neville's reputation.
The Court acknowledges that AF has in its brief attacked the Neville declarations as unreliable on various grounds – for example, because the opinions contained therein are offered by an individual who has not been qualified as an expert; because the original declaration was secured by an attorney of purportedly questionable ethics; because the methodology employed is problematic; and because the opinions are qualified (e.g., finding it probable or likely that persons affiliated with AF were responsible). But notably, what AF has not done is offer any counterevidence such as a declaration from Mr. Steele in which he denies that he is "sharkmp4" or other evidence that AF did not take steps to induce users to download the subject works. This evidence could easily have been offered by AF as a part of its opposition brief. AF's failure to submit any factual denial under oath is telling.
The end result:
the Court grants Mr. Navasca's motion for fees and costs and awards fees in the amount of $19,420.38 and costs in the amount of $3,111.55. The total award is $22,531.93.
This is slightly lower than Navasca asked for. The court cut 5% off the amount requested, because of the possibility of some slight overlap with the work done by Navasca's lawyers, Nick Ranallo and Morgan Pietz, on other similar Prenda cases. Still, the bill for Team Prenda keeps rising.

Filed Under: edward chen, joe navasca, john steele, morgan pietz, nick ranallo, otis wright, paul duffy, paul hansmeier
Companies: af holdings, prenda, prenda law

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  1. icon
    Anon E. Mous (profile), 22 Jul 2013 @ 5:12pm

    Judge Chen I believe has always had the notion that AF holdings and Prenda were operated by the same people ever since the Salt Marsh ADR signature fiasco.

    Judge Chen despite letting Prenda go about that Salt Marsh ADR signature knew Prenda was playing games with him in regards to that issue.

    When the case came back before him with some of the updated information from Judge Wright's order and the information from Ranallo, Judge Chen knew he had more than sufficient grounds to take Prenda to task.

    With Judge Wright's order and Judge Chen's sanctions, there are going to be a lot of other defence filings in other Prenda cases around the U.S. as more fact of what Prenda is really doing in regards to their so called litigation of copyright enforcement.

    This should be interesting for the Georgia case and the Arizona case, as those Judges have put forth questions to Prenda's craigslist hired attorneys about who is behind some of those entities and the litigation.

    It seems Mark Lutz who made the rise from John Steele's paralegal to AF Holdings CEO and Owner for no financial compensation at all seems to be a fugitive from the law in a couple of states.

    You should definitely read the article about it at FCT

    Judge Chen's ruling will know doubt be interesting to a Grand Jury in a RICO investigation and will be another tool for the IRS Criminal Division investigation.

    Then you have Gibbs who has nothing to lose by being a witness in a federal RICO investigation after Steele's fragile ego got butt hurt when Gibbs wouldn't take the fall for Team Prenda, Gibbs may be looking to help investigators from the IRS and Federal Prosecutors to save himself and his law license.

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