Ken White blogs at Popehat. He's a litigator and criminal defense attorney at Brown White & Newhouse LLP in Los Angeles. His views are his alone, not those of his firm.
All of my coverage of Prenda Law is collected here.
Today the Prenda Law enterprise encountered an extinction-level event. Faced with a federal
judge's demand that they explain their litigation conduct, Prenda Law's attorney principals -- and
one paralegal -- invoked their right to remain silent under the Fifth Amendment to the United
States Constitution. As a matter of individual prudence, that may have been the right decision.
But for the nationwide Prenda Law enterprise, under whatever name or guise or glamour, it
Hail, Hail, The Gang's All Here
The crowd gathered early outside of the courtroom of United States District Judge Otis D.
Wright II. As before, the spectators included journalists, former Prenda defendants and
their lawyers, law clerks and externs, interested citizens, and Electronic Frontier Foundation
activists. The little crowd went awkward-party-foul silent when a team of lawyers and nervous-
looking men in suits filed into the courtroom. Some of us glanced at the chart that attorney Morgan
to see if we could match faces. We soon saw that we could. Bets regarding
who would show up in response to Judge Wright's Order to
were won and lost with some good-natured cursing.
A swarm of attorneys quickly checked in with the court clerk and took their places. On one side,
attorneys Morgan Pietz
calm. They had boxes of materials they wouldn't need, and notes they wouldn't have to consult.
On the other side of the room, eight attorneys prepared to answer Judge Wright's questions,
mostly for naught. In the gallery, Brett Gibbs -- unhappy witness at the last hearing before Judge Wright
-- sat looking sallow and grim. Paul and
Peter, the Hansmeier brothers, sat together, looking ridiculously young and out-of-place. Paul
Hansmeier's face was beefy-red. John Steele looked conspicuously slick and immaculate in an
impeccable suit, like a corporate executive in a bad Robocop sequel. Paul Duffy, Mark Lutz, and
Angela Van Den Hemel stared straight ahead.
Not With A Whimper, But A Bang
At a few minutes past the hour the door to chambers slammed open and Judge Wright marched
out and took the bench. Before he sat he strode back and forth once behind his chair, surveying
the gallery and running his tongue over his teeth. Then he sat, and called the case. Attorneys
announced their appearances -- Brett Gibbs, Paul Hansmeier, John Steele, Paul Duffy, Angela
Van Den Hemel, and Prenda Law all had counsel, but Peter Hansmeier and Mark Lutz did not.
When Paul Hansmeier's attorney announced Mr. Hansmeier was present, Judge Wright asked
where he was. Paul Hansmeier stood. "Front row
," ordered Judge Wright, stabbing
a finger at the first row of benches behind Hansmeier's attorney. John Steele received the same
treatment, and sat next to Hansmeier. One of the attorneys pointed out that Peter Hansmeier
and Mark Lutz were present but not represented. "Welcome, sir," Judge Wright said to Peter
Hansmeier, not entirely convincingly. "Is there an Alan Cooper -- any
present?" asked Judge Wright, referring to allegations that
Prenda Law had stolen the identity of a Minnesota caretaker to serve as an officer of dummy
No such person was present.
Judge Wright wasted no time. He announced that he was "pleasantly surprised" that the people
he had summoned had arrived. "It should be clear this court's focus has shifted dramatically
from litigation of intellectual property rights to attorney misconduct -- such misconduct as brings
discredit to the profession," he began sternly. "I have questions for those present -- including
Mr. Steele. Mr. Steele can choose to answer those questions, or not."
Steele's attorney rose and said, in light of the "concerns" that
Judge Wright had raised at the March 11 hearing
, and "serious allegations" made by Judge
Wright, Mr. Steele would be invoking his Fifth Amendment right to decline to answer questions.
I expected a murmur in the courtroom, but there was a silence like after a thunderclap. "The
word fraud was used," said Steele's lawyer. "It should have been
," shot back Judge
Wright. Steele's lawyer gamely continued, saying that Steele was also precluded from answering
by the attorney-client privilege. "You think there is a difference between these clients and Mr.
Steele?" demanded Judge Wright, referring to allegations that the Prenda Law plaintiffs were
mere dummy entities concealing attorney interests in the cases. Steele's lawyer said there was a real difference,
but Judge Wright was clearly unconvinced. He made it clear, though, that Steele didn't have to
answer questions. "He doesn't have to answer if he thinks it may incriminate him," said Judge
Wright. "I'm not saying that the answers would incriminate him," protested Steele's lawyer, thus
muddying the question of whether his client was entitled to take the Fifth, "but you leave my
client with no choice."
Judge Wright grew steadily and visibly more outraged. "I want to know if some of my
conjecture is accurate -- and the only way to know is to have the principals here and ask them
questions. This is an opportunity for them to protect themselves," he said. But Steele's lawyer
confirmed his client would exercise his right to remain silent. Attorneys for Paul Hansmeier,
Paul Duffy, and Angela Van Den Hemel confirmed their clients, too, would invoke their rights to
remain silent. Judge Wright did not -- unless I missed it -- confirm whether Peter Hansmeier or
Mark Lutz would answer questions.
An Opportunity To Be Heard
Heather Rosing, appearing for Paul Duffy, Angela Van Den Hemel, and Prenda Law, rose and
asked Judge Wright for an opportunity to present "about a half hour" of argument on the points
in his Order to Show Cause. Look: when you are a lawyer, representing a client, you have to
You have to hold your ground even in the face of a furious federal judge.
When a judge is yelling at you, however unsettling it is, you have to hold fast and remember you
are there to represent the interests of your client against the terrible power of the court. Heather
Rosing stood up
, and has my admiration, whatever I think of her clients.
Judge Wright was uninterested in hearing legal argument,
as opposed to testimony
or evidence. "My clients have a right to a reasonable opportunity to be heard," Ms. Rosing
protested. "Excuse me?
" thundered Judge Wright, probably thinking -- not
unreasonably -- that Ms. Rosing's clients could have filed briefs in advance to address any
legal arguments they had, and that Ms. Rosing's clients have been evading questions for
months. Judge Wright began to count off the questions he wanted answered. "I'm looking for
," he said. He wanted to know who directs Prenda Law's litigation efforts,
who makes its decisions, whether there is another Alan Cooper, and what happens with the
money Prenda Law makes from settlements. Ms. Rosing answered (wisely, and properly) that
she could not personally testify to those things. Why, Judge Wright demanded, did Prenda
Law conceal its attorneys' financial interest in the cases? "There's no evidence that they have
an interest," Ms. Rosing protested. "Excuse me?
" Judge Wright
boomed even louder. Were there windows, they would have rattled. "Have you read Paul
Hansmeier's deposition?" he demanded, referring to the bizarre deposition in which Paul Hansmeier failed to explain Prenda Law's
shadowy owners or flow of funds.
"I have," Ms. Rosing said, but stood her ground.
Ms. Rosing suggested that she might file a brief addressing her arguments. "Do so," said Judge
Wright acidly. "We're done," he said abruptly, and stormed off the bench. The whole hearing
took about fifteen minutes.
Death Comes For Prenda Law
The significance of today's hearing cannot be overstated.
Yesterday I wrote about the tools Judge Wright had
at his disposal to sanction or otherwise punish Prenda Law's principals.
It appears to me he
likely won't invoke his contempt power, but the other remedies -- his inherent sanctions power,
and referrals to state bars and to the U.S. Attorney's Office for criminal investigation -- remain
available. I expect a detailed written order.
By invoking their Fifth Amendment rights, Prenda Law principals John Steele, Paul Hansmeier,
Paul Duffy, and paralegal Angela Van Den Hemel have avoided incriminating themselves. In
light of the evidence adduced -- evidence that Prenda Law may have created sham entities to
conceal its lawyers' interest in litigation, and may have misled courts across the country -- that
was very likely the smart thing to do. I might have advised it myself if I were representing them.
With respect to their individual exposure to potential criminal consequences, it stops things from
getting worse, which is often an attorney's first task.
I'm a criminal defense attorney. I cherish and support the Fifth Amendment. Its invocation here
was completely lawful. But its invocation will have catastrophic consequences for the Prenda
Law enterprise, which cannot possibly continue. When they appeared today, John Steele, Paul
Hansmeier, and Paul Duffy were not merely individuals facing the overwhelming power of the
state. They were also officers of the court and, according to the testimony of Brett Gibbs, the
very attorneys who directed nationwide litigation for the Prenda Law enterprise. Judge Wright
ordered them to answer for the conduct of that enterprise in his court, as he had the right and
power to do. Their invocation of their Fifth Amendment rights in the face of that order is utterly
unprecedented in my experience as a lawyer. In effect, the responsible lawyers for a law firm
conducting litigation before a court have refused to explain that litigation to the court on the
grounds that doing so could expose them to criminal prosecution.
However well grounded in the individual rights of Steele, Hansmeier, and Duffy, the invocation eviscerates their credibility as lawyers and the credibility of Prenda Law as an enterprise in every court across the country. I expect that defense attorneys will file notice of if in every state and federal case Prenda Law has brought, through whatever guise or cutout. The message will be stark: the attorneys directing this litigation just took the Fifth rather than answer another judge's questions about their conduct in this litigation campaign.
I expect federal and state judges across the country will take notice and begin their own inquiries. Moreover, Prenda's lawyers may face adverse consequences from the invocation in Alan Cooper's counterclaim against them.
A defendant's exercise of the right to remain silent can't be used against him or her in a criminal case, but it often can in a civil case.
Some inquiries will come quite quickly. In the Northern District of California, where Prenda Law's Paul Duffy is fighting Morgan Pietz's demand for attorney fees in a case Prenda Law tried to dismiss, Paul Duffy has asked to appear by telephone,
but Judge Edward Chen has rejected the request and ordered Duffy to appear in person on April 18, 2013.
Duffy will once again have to decide whether to assert his Fifth Amendment rights. Moreover, he likely now has an irreconcilable conflict with his putative client. He may seek to withdraw before April 18.
The consequences for the individuals behind Prenda Law may arrive slowly -- particularly by the
standards of Twitter and anxious blogs. But they will come -- and they may come from many
directions at once.
Prenda Law may still be standing. But it's dead.