Team Prenda Ordered To Pay Yet Another $64k In Yet Another Case

Legal Issues

from the it's-adding-up dept

The bill for Team Prenda to pay out to opposing attorneys keeps getting bigger. Over in Minnesota in Guava LLC v. Merkel, a case that had fallen off the radar for many, the judge has ordered Guava, local lawyer Michael Dugas and Paul Hansmeier’s Alpha Law Firm to cough up $63,367.02 in attorneys’ fees. If you don’t recall, Spencer Merkel, the defendant in this case dropped quite a bombshell in this case back in January, in which he revealed that he had agreed to take a dive for Prenda. As his declaration noted:

Michael offered me a settlement deal. The deal consisted of the following parts:

a. I would agree to be sued.

b. Prenda would ask for, and I would provide, a copy of the bit-torrent log from my computer. The excuse for gathering this log is that it would corroborate the IP address evidence that they had already gathered through the use of Prenda’s sottware.

c. Prenda would, upon receipt of the information, dismiss the case against me.

4. In discussion of the settlement, Michael stated that he did not know of any pro bono attorneys in Oregon, but could provide the name of an attorney who might take my case in Minnesota. Because I cannot afford to pay an attorney, I agreed to be sued in the state of Minnesota. I then retained my attorney, Trina Morrison, based on the information provided to me by Prenda Law.

In that same filing, he also notes that while he was making this deal all of the communication was from “Prenda” law, and he was surprised when it was Hansmeier’s Alpha Law Firm that actually sued.

It would appear that the judge in this case, Tanya Bransford, has a pretty good understanding of the scam being pulled as well, because she also says anyone associated with these firms are no longer allowed to file these kinds of cases without first posting a $10,000 bond:

Plaintiff Guava LLC, Michael K. Dugas, Esq., Alpha Law Firm LLC and any of their agents, officers, directors, employees, representatives, affiliates, and successors, are hereby enjoined from filing any future civil action against the John Does or the ISPs, without first posting a bond with the Court in the amount of $10,000, or such other amount as the Court deems appropriate, and without first obtaining a certificate of authority from the Minnesota Secretary of State.

This is just the basic order in the case, though a full explanation is forthcoming. I imagine it will be a worthwhile read.

Filed Under: michael dugas, paul hansmeier, spencer merkel
Companies: alpha law firm, guava llc, prenda, prenda law

Team Prenda May Be In Even More Trouble In Reopened Case

Legal Issues

from the and-out-come-the-tricks dept

It would appear that more and more courts are coming to the full realization of the kinds of tricks it appears Team Prenda has been pulling over the past few years, and that means that the troubles for Team Prenda may be quickly adding up. The latest is that an old AF Holdings case in Minnesota, which had been voluntarily dismissed all the way back in October, was magically reopened back in June, as we discussed at the time. One of the interesting things we noted, was that the magistrate judge handling the case, Franklin Noel, demanded info on any settlements that Team Prenda received.

We hadn’t checked in since then, but Team Prenda has been scrambling since then — and a hearing is happening today — on the matter. The local attorney who had handled the original case, Michael Dugas, tried to get out of it, and hand the case over to Paul Hansmeier, with Dugas claiming that he “no longer represents” AF Holdings, but Noel wasn’t going to hear that. After all, he’s investigating possible fraud from the time when Dugas was on the case. So, Noel sent a simple shut up and show up response to Dugas denying his request with no explanation very quickly.

Paul Duffy also raised various objections and then tried to delay the hearing — but Noel more or less rejected that, pointing out that Duffy in his various roles seems confused about what’s going on here and what role he’s supposed to be playing. That is, Duffy raised objections “pro se” — basically as an individual representing himself — but Noel points out that Duffy isn’t actually a party to the lawsuit, Prenda Law is, and a company can’t represent itself pro se. Here’s Noel:

Paul Duffy filed a pro se objection to the order scheduling the case-management conferences. But the Court did not order Duffy to appear. Although Duffy purports to be “the sole principle [sic] of Prenda Law, Inc.,” he has not entered an appearance on behalf of the corporation. A corporation cannot appear pro se; it must be represented by counsel…. Duffy is an attorney, but he has not been admitted to practice before this Court. He has not sought to be admitted pro hac vice or by special permission of the court…

Given all this, he completely dumps Duffy’s pro se objections, striking them from the record, orders Duffy to show up anyway (by phone) as a representative of Prenda, and (of course) denies the attempt to postpone things.

And, finally, on Friday, Paul Hansmeier sent a letter rather than a formal filing to Judge Noel (officially coming from Hansmeier’s sketchy class action lawsuit objection operation, “Class Justice”), flat-out whining about a letter that another lawyer had sent to the judge, highlighting many of Team Prenda’s more questionable activities. There’s a funny part in which Hansmeier — who Judge Wright and others have clearly noted were part of the Team Prenda efforts — complains that “Prenda” is entirely different and it’s unfair to lump them together.

However, he does note that (as per the original order), the judge has been given all of the settlement communications between the various John Does — and even suggests that the court should unseal them to show that the “‘shakedown’ narrative is a canard.” And says that other courts “would benefit from learning how disingenuous the ‘shakedown’ narrative truly is.” Of course, he doesn’t mention anything about Alan Cooper or who actually signed the documents. And since that’s a big part of this…. Either way, we’ll see if Judge Noel agrees with Hansmeier soon — but his actions to date certainly suggest that he’s seen enough to recognize that something very, very questionable happened via his court.

Filed Under: alan cooper, franklin noel, john steele, paul duffy, paul godfried, paul hansmeier
Companies: af holdings, prenda, prenda law

More Sanctions Issued Against Team Prenda

Legal Issues

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

Bad News Is Contagious For Prenda

Legal Issues

from the for-the-weekend dept

Well, might as well leave some folks for the weekend with some more bad news for Prenda as covered by Joe Mullin at Ars Technica. Yesterday there was another hearing in the case in Northern California, in the case where Judge Edward Chen appears to be a few steps behind Judge Otis Wright in understanding what Prenda is up to, but is catching up fast. This is the Navasca case, and Paul Duffy is so busy dealing with the collapse (and potential further problems) with Prenda that he apparently forgot the hearing was on at all. When the court reached him by phone, he was apparently confused, saying he thought the hearing had been cancelled. But the key point was that the Judge clearly is realizing that Prenda/Duffy are making claims that don’t make much sense.

“Frankly I don’t see why fees should not be awarded here, given the findings obtained in this court as well as other courts, including Judge Wright’s,” he said. “This case proceeded without proof of standing. There were also questions about identifying Mr. Navasca as an infringer without sufficient investigation. Other assertions, like improper spoliation, were never proven or supported. Then there’s the whole question of motivation. There’s a serious question raised about the whole business model here… [about whether] this is a business model to generate income through coerced settlements. If there’s a case that warrants fee shifting, this certainly seems to be one of them.”

Duffy tried to talk his way out of all of this, insisting (yet again) that Navasca “engaged in spoliation of evidence” — a claim that’s been tried by Team Prenda multiple times and failed — in large part because it’s silly. Navasca had a registry cleaner, CCleaner, installed on his computer, since well before the whole Prenda thing, and the app serves to keep a computer running efficiently and keep it from getting bogged down. Beyond having the app, there’s no evidence that it was used to delete any form of evidence. The court has already rejected it, but Duffy couldn’t let it go. But that’s a pretty weak thread to hang from.

When asked about a variety of other things, Duffy did the usual “deny, deny, deny” move. In particular, Chen pointed out the whole lack of standing given the likelihood of Alan Cooper’s signature being forged:

“Here AF [Holdings] didn’t even prove standing,” said Chen. The judge was referring to the disputed copyright assignment at the root of the case. It was signed by Alan Cooper, a former property caretaker for John Steele, the man pointed to as a key Prenda player. Cooper later denied having signed the papers.

“That’s very much in dispute,” said Duffy. “It’s a ‘he said, he said’ about the individual who signed AF Holdings’ [assignment]. The individual did not challenge the signature until Mr. Steele ejected him from his property, then all of a sudden repudiated his signature. There is a factual issue about whether the person who signed it actually signed it. We believe he did.”

“I’ve not seen a case yet where AF Holdings has been able to prove to any court’s satisfaction that this was not a case of either identity theft or forgery or something of that nature,” said Chen. “I know you dispute this on behalf of your client. Is there a case where you have prevailed on this issue?”

“There’s not a case where we have not prevailed,” insisted Duffy,

When in doubt, go for the double negatives, I guess… Anyway, there’s a lot more at that link. Duffy also tried to attack the credibility of Delvan Neville, the computer expert who presented incredibly compelling testimony that John Steele or someone closely associated with him was uploading the files Prenda was suing over themselves. As the judge pointed out, however, Duffy failed to actually file anything in any case that factually disputes Neville’s statements. All he did was whine about Neville as a person and his credentials. The judge appears to find the lack of any such factual filings noteworthy.

“You take on his declaration… you argue about it. You say his opinions are worthless, et cetera, et cetera, purely conjectural, they don’t make logical or economic sense. [But] I don’t see any factual matter submitted. You had a full two weeks to respond.

We eagerly await Judge Chen’s ruling.

Of course, there was also another Prenda hearing today down in Arizona, where Judge G. Murray Snow has also been expressing quite a bit of skepticism. There, Prenda red shirt Steve Goodhue filed “answers” to some of the questions Snow asked, which we’ve embedded below, but as of this writing no other details of the hearing have come about. I’m sure we’ll find something out in the next week or so…

Meanwhile, back in St. Clair County, Illinois, where Prenda had focused a bunch of their state court actions, Charter Communications is now asking the judge to award it $5,000 from Team Prenda to pay for the costs of having to deal with Prenda’s invalid subpoenas in one of the LW Systems (another shell) cases.

Charter attorney Robert Sprague of Belleville wrote in a motion July 11 that the company has asked for reimbursement from plaintiff attorney Paul Duffy of Chicago after Gleeson ruled June 6 that the subpoena was invalid, but that its requests have been ignored.

Sprague’s motion also claims that Duffy has not provided notice that customer information Charter inadvertently provided due to the invalid Jan. 31 subpoena has been destroyed.

“Charter customer information, including name and address information, is ordinarily confidential and subject to the protection under the Cable Act,” the motion states. “Customer information cannot be produced absent a valid court order requiring Charter to provide it.

It may be slow, but it seems like the world may finally start to be closing in on Prenda…

Filed Under: edward chen, g. murray snow, john steele, otis wright, paul duffy, steve goodhue
Companies: af holdings, ingenuity 13, lw systems, prenda, prenda law

Judge Wright Denies John Steele's Motion, Says Any Problem Is Steele's Own Fault, Directs Him To Legal Clinic

Failures

from the oh,-and-more-sanctions-on-the-way dept

Well, this hardly comes as a surprise, but after John Steele tried, via multiple motions and a disastrous in court appearance, to argue that his own due process rights had been violated because opposing attorneys Morgan Pietz and Nick Ranallo had not properly “served him” (and, further to have those lawyers sanctioned for such “fraud”), Judge Wright has denied the motion. The full filing is, once again, worth reading. He points out that this second motion doesn’t offer anything new from the earlier motion, and explains why Steele failed, by any definition under the law, to meet the requirements for such a motion. But, that’s only the warmup to Wright verbally benchslapping Steele for his ridiculous conduct once again. First, in response to the Fifth Amendment claims from Steele, Wright is direct and to the point:

Steele’s instant Motion for Reconsideration fails on every front. First, he does not assert a proper legal basis for reconsideration. Steele cites no law in his Motion. And during the hearing, Steele claimed that his basis for reconsideration was his Fifth Amendment right to due process. Exactly how this translates to a legal basis for reconsideration is anyone’s guess. Steele’s Motion offers nothing new for the Court to consider—he uses it only as a vehicle to rehash his earlier-rejected arguments.

As for the basic claims that Pietz and Ranallo somehow failed to serve Steele, Wright points out that, even if Steele was not properly served, it was solely as a result of his own mistakes.

Second, assuming this is a proper motion for reconsideration, the Court finds that any failure by Pietz and Ranallo to serve papers to Steele was caused by Steele’s own incompetence. On May 16, 2013, Steele filed his Request for Approval of Substitution of Attorney, where he requested to represent himself in place of his attorney Thomas Mazzucco. (ECF No. 143.) But in the Request and the accompanying forms, Steele entered his address incorrectly—not once, but four times. And because the Clerk of Court entered on the docket Steele’s address as shown, it is very likely that correspondence sent via mail since May 16, 2013, never reached Steele. Nevertheless, it is Steele’s duty to ensure that the Court has his proper address. See L.R. 41-6 (authorizing the Court to dismiss an action for a pro se party’s failure to update his address with the Court). And Steele has a duty to provide the Court with not only his current address, but also his telephone number, fax number, and email address. See id.; L.R. 83-2.7. Steele cannot skirt this duty merely because he is in pro se—the Local Rules apply whether a party is represented by an attorney or in pro se. L.R. 1-3 (“Persons appearing pro se are bound by these rules, and any reference in these rules to ‘attorney’ or ‘counsel’ applies to parties pro se unless the context requires otherwise.”).

You may remember that, during the hearing, Judge Wright pulled up that Request for Approval of Substitution of Attorney and asked Steele about it — leading to what multiple people present noted was an extremely uncomfortably long silence. That silence, of course, was likely Steele’s brain coming to terms with the fact that he’d painted himself into a total corner.

Furthermore, Wright points out that contrary to Steele’s suggestion that he had no idea what was going on in the case and had not even looked at the document — a highly unbelievable claim in the first place — the actual evidence, including Steele’s own statements, showed the exact opposite.

Fourth, although Steele seems to contend that this lack of service prejudiced him, because he was nonetheless involved in the motions filed by his cohorts through his joint and several liability for the Court-ordered sanctions, evidence suggests that Steele had actual knowledge despite any failure by Pietz and Ranallo to properly serve him. Pietz presents an email chain suggesting that Steele was centrally involved in the entire supersedeas bond issue, with Steele commenting, “Philip [Vineyard], Great motion.” (Pietz Decl., Ex. 2.) Moreover, Steele’s intimate knowledge of the case docket—in sufficient detail to point out the documents that have not been served— further suggests that he had actual knowledge of the papers filed by Pietz and Ranallo. (See e.g., ECF No. 197, at 2.) This raises the question how Steele was able to do this given his assertions at the hearing that he did not log onto CM/ECF or otherwise see the case docket.

Oops. It looks like, as expected, Steele’s inability to stop himself from trying to talk his way out of his situation has meant that he’s been caught out by his own words again.

Judge Wright also notes that it’s also clear that Steele is still working closely with the rest of Team Prenda, despite denials. This was rather obvious from the fact that Steele, both Hansmeiers and Lutz all filed motions making the same argument on the same day — including the formatting, footers and other bits of the filings being identical. In the courtroom, Wright had asked about this, leading Steele to try to tapdance around it, and then get angry and yell at the judge (leading to the quick end of the hearing).

Finally, the Court notes that the Prenda parties (John Steele, Paul Duffy, Paul Hansmeier, Peter Hansmeier, Mark Lutz, AF Holdings LLC, Ingenuity 13 LLC, and Prenda Law, Inc.) continue to act in concert. Philip Vineyard’s email chain, addressed to a number of these Prenda parties, confirms this. Also, the similarities in the substance, formatting, footers, and service list of the three Notices to the Court, filed by Mark Lutz, Paul Hansmeier, and Peter Hansmeier, in relation to Steele’s instant Motion further indicate that at least the four of them are in cahoots. (ECF Nos. 201– 204.) The concurrent filing of their papers are another indication of their relatedness. Even without these indicia, the Court has already determined that the Prenda parties have a history of conspiring together—there is nothing to suggest that they have stopped.

The end result is not just a dismissal, but Judge Wright declaring the motion “meritless and frivolous” and then says that because it was frivolous, Pietz and Ranallo can seek Rule 11 sanctions against Steele for making them go through the whole process of dealing with those motions (including having to hire a lawyer of their own to defend against the accusations of fraud on their part).

And, as a final kick in the pants, Judge Wright adds this little kicker to the end of the order:

Steele is advised that the Federal Pro Se Clinic is located in the United States Courthouse at 312 N. Spring Street, Room G-19, Main Street Floor, Los Angeles, California 90012. The clinic is open on Mondays, Wednesdays, and Fridays between the hours of 9:30 a.m. to 12:00 p.m. and 2:00 p.m. to 4:00 p.m. The Federal Pro Se Clinic offers free, on-site information and guidance to individuals who are representing themselves in federal civil actions. Steele is encouraged to visit the clinic for advice concerning his case.

Of course, in most cases, a pro se party is a non-lawyer, so it might be reasonable to direct them to a clinic to learn a bit about the judicial process. In a situation like this, where Steele is (amazingly, I know) an actual bar-certified lawyer (though not in California) suggesting he visit the Federal Pro Se Clinic for “advice concerning his case” is about the nicest ways possible for Judge Wright to John Steele “you are a really, really, really bad lawyer.”

Oh, and that wasn’t the final piece of business for Judge Wright on the Prenda matter either. There was also the issue of the bond for the money they already owe in sanctions. Wright responded to Paul Duffy’s request for an order allowing a cashier’s check, rather than a bond (apparently, they’re having trouble getting a bond), by noting no such order is necessary, but also pointing out that Team Prenda — as per usual, waited until the last minute, and did not pay on time, and thus, extra sanctions have been added:

The Court recognizes the difficulties that the Prenda parties are encountering in trying to obtain a bond. Nonetheless, the Prenda parties have missed their July 15, 2013 deadline, which the Court previously extended. Prenda’s characteristic last-minute scramble once again falls short. Having fallen short, they once again seek relief. But none will be given.

The Court hereby sanctions each of the following persons or entities $500 per day, per person or entity, retroactive to July 16, 2013: John Steele, Paul Duffy, Paul Hansmeier, Ingenuity 13 LLC, AF Holdings LLC, and Prenda Law, Inc. This sanction must be paid to the Clerk of Court at the same time the cashier’s check is deposited. Thus, if the Prenda parties deposit the cashier’s check on Friday, July 19, 2013, then they must also pay a sanction of $12,000 to the Clerk of Court. If they deposit the check on Monday, July 22, 2013, the sanction rises to $21,000.

It feels like there needs to be a “Judge Wright is not impressed” meme…

Filed Under: due process, john steele, morgan pietz, nicholas ranallo, otis wright, pro se, sanctions
Companies: af holdings, prenda, prenda law

Team Prenda Keeps Trying To Convince Judges That The Lawyers Who Exposed Them Are The Real Scammers

Legal Issues

from the nice-try,-guys dept

We’ve discussed in the past how Team Prenda loves to use the “I know you are, but what am I” defense, in which they accuse opposing counsel of doing all sorts of nefarious things to game the legal system — something that they themselves have been accused of by multiple judges. In the past few days, two more examples popped up. The same day that John Steele was getting reamed by Judge Otis Wright, Steele submitted his latest “reply” to opposing attorneys Morgan Pietz and Nick Ranallo, arguing in vehement language that those two need to be sanctioned. Not surprisingly, Judge Wright didn’t bother with that one at all, because it’s ludicrous. The focus of the hearing made it clear that Steele’s attempts to pretend that Pietz and Ranallo are concocting some sort of fraud is not convincing anyone. Still, it’s hilarious:

The extent of the fraud that has been committed on this Court by Respondents [Pietz and Ranallo] is slowly, but steadily, emerging. The first category of fraud–failing to serve any of the pro se persons with any of the papers they have submitted over the course of this entire proceeding–has been definitively established by the papers before the Court; Pietz and Ranallo do not dispute they engaged in this fraud.

It goes on and on. Of course, it’s almost all entirely bogus. Pietz and Ranallo do dispute that they engaged in fraud, because they didn’t. They explained, quite clearly, that Steele clearly had knowledge of what was going on, and then proceeded to do a variety of things — including deleting his email account — to claim that he was not being served and was somehow unaware of the proceedings.

Meanwhile, in the Navasca case in Northern California — where a similar set of events appears to be playing out for Team Prenda, as judge Edward Chen seems to be recognizing what Team Prenda is trying to pull — Paul Duffy has filed a similar attack on Pietz and Ranallo, once again trying to argue that it’s those pesky lawyers who should be sanctioned. This is the case where, as we’d mentioned, Brett Gibbs filed a deposition to show that Mark Lutz was lying about the claim that Gibbs sent him documents, which Lutz signed as “Salt Marsh” (if you don’t know what this is about, click the link to dig into the details).

Duffy is arguing that this is all some scam by Pietz and Ranallo to pay off Gibbs to lie to get Team Prenda in trouble.

There are however, two aspects of Defendant’s Motion that are highly troubling and suggest that if any sanctions are appropriate they should be imposed upon Defendant’s counsel [Pietz and Ranallo]. First, counsel has produced a declaration of former Plaintiff attorney Brett Gibbs (the “Gibbs Affidavit”) that Defendant’s counsel appears to have procured through a quid pro quo, in which Defendant’s co-counsel would assist Gibbs financially in the matter under appeal from the Central District of California before Judge Wright in exchange for Gibbs’ agreement to provide the Declaration. Leaving aside for now the many ethical infirmities arising from an attorney who offers a declaration against his own client, disclosing privileged communications and confidences, for his own personal gain, Defendant’s counsel knows, or should know, that statements in the Gibbs Declaration are, at a minimum, directly contrary to Gibbs’ sworn statements in other proceedings. Defendant’s counsel fails to notify the Court of that fact. Defendant’s counsel has also failed to inform the Court that, the Monday after Gibbs dated his Declaration, he and his co-counsel in the Central District filed in the Central District of California a motion seeking to relieve Gibbs of the obligation for a sanction in the amount of approximately $101,650 for which he was jointly and severally liable. (A true and correct copy of that as Exhibit “A” hereto and made a part hereof). The only purpose of counsels’ otherwise-inexplicable stipulation in the Central District is that they agreed to file it with that Court in exchange for a declaration that suits their interests in this matter. Indirect payment for testimony, and counsel’s failure to point out that Gibbs’ current declaration directly contradicts his prior statements, is conduct that the Court should sanction, at minimum, by denying the Motion in its entirety.

Duffy also goes on to attack the EFF, as if a court — in Northern California, no less — is unfamiliar with the EFF or thinks of it as some sort of “vigilante group” as Duffy claims. I realize that Duffy is from Chicago, and perhaps isn’t that aware of the EFF or its reputation, but pretending they’re some crazy vigilantes just makes you look silly. Even folks who disagree with the EFF, for the most part, recognize the group’s reputation and legal prowess. And, I’d imagine that goes doubly for judges in Northern California, EFF’s home turf.

Defendant’s Motion is a dizzying accretion of conspiracy theories, invective and inadmissible evidence that betrays a motive on the part of his counsel other than representation of the Defendant. Indeed, Plaintiff is informed that Defendant’s counsel is a panel attorney for the Electronic Frontier Foundation (“EFF”), an anti-copyright vigilante group whose panel attorneys have filed dozens upon dozens of similar filings throughout the country. The EFF panel attorneys have taken to attaching mass numbers of filings and transcripts of other court proceedings as exhibits to their filings, apparently in an attempt to lend the appearance of legal and factual gravitas otherwise missing from their arguments.

The motion goes on to suggest, strongly, that Pietz and Ranallo (a) effectively “paid off” Gibbs and (b) tried to pressure Duffy/Prenda into a settlement by claiming that it would file Gibbs’ deposition claiming Lutz lied if they didn’t. According to Duffy, this was a form of professional misconduct in trying to “induce a settlement.”

Oh yeah, in the middle of all that, he also tosses in a bit claiming that Gibbs’ deposition — which shows that Duffy’s client flat out lied to the court — is “not credible.” The “proof”? Gibbs, in the deposition, claimed that he believed Salt Marsh was a person, yet in Paul Hansmeier’s now infamous deposition in this same case, Gibbs represented Hansmeier, where Hansmeier denied that Salt Marsh was a person. Of course, this ignores the timing of all this. The “Salt Marsh” signature came well before that deposition. To get around this, Duffy claims that it’s somehow incredible that Gibbs believed Salt Marsh was a person — though, anyone who’s been following this case knows that’s not incredible at all. Hansmeier and Steele insisted to him that Salt Marsh was a person, according to Gibbs, and (as has since come out), Steele’s sister’s boyfriend was named Anthony Saltmarsh. So, why is it so crazy? Duffy then tries to claim that if Gibbs had (a) believed that Salt Marsh was a person back when the ADR was submitted, and then (b) heard Hansmeier claim otherwise months later, then Gibbs “had an obligation to do something” to “correct any misunderstanding.” Of course, Duffy is now using pretzel logic, suggesting that Gibbs had a duty to sabotage his own side (at the time) by publicly stating that he had filed falsified documents. Yeah, that’s not going to happen.

Basically, Duffy’s filing shows just how obnoxious Team Prenda is. From all of the information and details from Judge Wright’s order, it appears that Steele, Hansmeier and (to a lesser extent, Duffy) had Brett Gibbs handle all the dirty work, insisting that various things were legit, when it turns out they weren’t. Now that it’s come out that things weren’t legit, Steele, Hansmeier and Duffy are effectively blaming Gibbs for taking their word on the documents it seems likely they falsified. Talk about chutzpah. “Your honor, we didn’t commit fraud on the court, but if we did, the real blame should go towards the guy we used to commit the fraud, for not telling the court about the fraud he was a part of.” Yes, that appears to be the basic argument.

These guys really are quite incredible.

Filed Under: brett gibbs, edward chen, john steele, morgan pietz, nicholas ranallo, otis wright, paul duffy, salt marsh
Companies: prenda, prenda law

Prediction: Eventual Appeal In Key Prenda Case Will Be One Worth Reading

Legal Issues

from the just-saying... dept

Joe Mullin has the details of the latest in a long line of setbacks for John Steele and Prenda Law, in which the Ninth Circuit appeals court has rejected Team Prenda’s attempt to reduce the bond amount that they need to put up, consolidated the various appeals, and set a briefing schedule for later this year. The ruling is short and sweet and basically is an indication that the appeals court isn’t interested in Prenda’s usual game of trying anything and everything to create a distraction. But, what caught my attention, and which I hadn’t realized before, is that it appears that the three judge panel handling the appeal is headed up by Judge Alex Kozinski (see update below) — perhaps one of the most well known and entertaining judges on the bench today. We’ve written about Kozinski many times before — and while I don’t always agree with Kozinski (to be fair: I very often do agree with him), he is almost certainly the most entertaining, both when speaking live and in his rulings. And, equally as important, he’s one judge who really does seem to make sure he really understands what’s going on, beyond the superficial level that we’ve seen elsewhere. Given that, the Kozinski-fanboy in me is already anticipating the turns of phrase that Kozinski will spin in any eventual ruling involving Prenda… District court judge Otis Wright’s original ruling against Team Prenda was impressive, as many folks have acknowledged, but there’s an opportunity here for Judge Kozinski to produce a sequel that will be a delight. Update: Bah, procedural error on my part. This is the motions panel, not the merits panel, meaning that we don’t yet know which three judge panel will handle the actual case. Let’s just hope that Kozinski is on it, though…

Filed Under: alex kozinski, bond, john steele, ninth circuit, otis wright
Companies: prenda, prenda law

John Steele Shows Up In Judge Wright's Court; Bet He Wishes He Hadn't

Legal Issues

from the so-you-made-it? dept

While John Steele insisted he only “just” found out about the hearing in Judge Wright’s courtroom today, and insisted that it would be nearly impossible to make it, with Judge Wright quickly rejecting Steele’s request, it appears that Steele somehow found a way to get to the courtroom on time this morning. And, while I’m sure that not showing up would have been a really bad decision, that doesn’t mean that being present was a particularly enjoyable experience. Adam Steinbaugh was in the courtroom and has a detailed writeup of the continually no-nonsense Judge Wright’s latest opportunity to respond verbally and in-person to John Steele’s nonsense.

If you don’t recall, the specific hearing was in response to Steele’s motion for sanctions against Morgan Pietz for supposedly violating Steele’s due process rights in “not serving” him the documents in the case since Steele began representing himself (“pro se”). As pretty much everyone who has been following the case has noted, the idea that Steele was not actually aware of the filings is pretty close to nil, and the decision to play more “playing dumb” games in front of Judge Wright — who has made it abundantly clear that he is not impressed with John Steele’s games — is looking increasingly bad.

Steele appears to be betting heavily that arguing that his due process rights were violated is his best chance to somehow emerge from the deep pile of trouble that he’s in. He’s going to have a rather difficult time making that case, though, he must (at the very least) have to know that Judge Wright was going to shred him to pieces today — and then hope he can make some progress in the inevitable appeal. That’s still going to be a long shot, and I imagine that Judge Wright is going to do everything possible to make it abundantly clear to the judges handling the appeal just how ridiculous Steele’s claim is — starting with the details of today’s hearing.

Judge Wright walked in promptly at the scheduled time. The first thing he noted is that Steele and other Prenda affiliates had kept submitting last-minute documents to the court, as late as this morning. Paul Hansmeier, for instance, had filed a motion to appear by telephone—“for what, I don’t know,” mused Wright, as Hansmeier’s motion was not the subject of the hearing.

He didn’t like all the new filings, either. Among them were thick complaints from Mark Lutz and John Steele, to the California State Bar concerning former Prenda lawyer Brett Gibbs. “Why do I care?” snapped Wright. “You assumed I needed more paper?”

Defense lawyer Pietz was working with Gibbs, said Steele. Therefore, Gibbs’ misdoings were part of a “pattern of fraud” by Pietz. Wright tossed it aside: the hearing today was about Steele’s knowledge of particular filings, he said.

You get the feeling that Wright long ago had more than enough of Steele’s bullshit, and Steele either doesn’t realize that or simply can’t stop. From there, the focus was on Steele’s claims that he was unaware of what was happening in the case. Wright came prepared to have Steele explain how he could have possibly not known what was happening in the case — including with suggestions that Steele was now actively trying to set things up so he could claim he was not being served.

Then the court’s flat-screen monitors popped up with a copy of Steele’s substitution of attorney form. Had Steele ever seen this document, Wright demanded to know?

Steele sat for an awkwardly long period of time staring at the monitor before answering. “I’m sure I did at some point,” he said. Wright asked if the address was correct, and Steele said that it was not.  The incorrect address was listed twice on the form, said Wright—and it was never corrected.

Next method of contact? Steele’s e-mail address, which was sending bounce-backs to lawyers who tried to contact him. Steele said that he shut it down because of “spam and hacking and attempts to mess up not only my e-mail but websites.” At some point, he “literally could not open” his e-mail account, he said. He had used an auto-responder to tell people about his alternative address until June, he said.

Wright asked Steele if he had another e-mail address. “I have an old one,” Steele responded.  “Were you planning on letting anyone else in on it?” Wright asked, noting that the court’s Local Rules require litigants to provide an e-mail address if they have one.

Steele tried to flip the story over to his “due process” claims, and Judge Wright shut him down sarcastically. Steinbaugh’s recounting is worth reading so head on over to get all the details of that part of the exchange. It includes Wright telling Steele it’s “laughable” that Steele is claiming that opposing attorney Pietz is the one who has shown a “pattern of fraud.” Either way, Steele’s insistence that his due process rights are being violated, and that he knows he has to go through this process just to get to the appeal become quite clear:

Steele also had trouble identifying any legal authority for the motion to reconsider. He kept invoking the Fifth Amendment, saying that alone was the authority.

“How? You got this from the Fifth Amendment? This is absurd,” retorted Wright. “Last time I let you assert [the Fifth Amendment], and let you go right back to the airport!”

“That’s a different Fifth Amendment right,” responded Steele. The court’s actions here amount to an illegal “taking,” which wasn’t right. “My rights… I get them no matter what,” he said. His June motion had not been argued or heard, he said, as it was denied “within minutes.”

“You’re getting all the due process you can stand!” said Wright. Steele’s arguments had been made—by Steele. Steele, growing audibly and visibly frustrated, replied, “If Your Honor doesn’t care, [then] this is an appellate issue.”

Judge Wright also is well aware that it appears that Steele has been working closely with the rest of Team Prenda on all of these efforts, and called Steele out on that:

Wright had only a few more questions. “Who typed your papers?” he asked. Steele sheepishly responded: “I typed part of it,” and some was typed by others.

“I couldn’t help but notice [that] Peter Hansmeier’s notice, Paul Hansmeier’s notice, Mark Lutz’ notice, and your motion… all followed the exact same format,” said Wright. They even had the same footer. “They’re almost indistinguishable. No way they were not typed by the same person.”

“It’s called cutting and pasting!” Steele bellowed.

“Raise your voice again and I’m going to introduce you to the United States Marshals,” said Wright. “Get out.” Wright stood and walked off the bench.

It’s not too difficult to guess how this is going to end up, and, like so many things that John Steele seems to do in court these days, it seems fairly likely that his plan is going to backfire in a big bad way. While Steele seems to be betting on a happier outcome at the appellate level — and, is possibly even baiting Judge Wright to try to use the emotional and sarcastic responses in his own favor on appeal — there’s so much overwhelming evidence piling up against Steele, that it would be somewhat amazing if the appeals court doesn’t end up with the same conclusion as Judge Wright concerning which parties are involved in questionable behaviors here.

Filed Under: john steele, morgan pietz, otis wright, pattern of fraud, sanctions
Companies: af holdings, prenda, prenda law

Team Prenda Gets Even More Ridiculous: Mark Lutz Files Bar Complaint Against Brett Gibbs

Legal Issues

from the this-won't-end-well dept

Team Prenda has a history of doing the classic troll move: accuse the other side of doing what you’re actually doing. Just recently, we’ve seen various members of Team Prenda — John Steele, Mark Lutz, Paul Hansmeier and Peter Hansmeier — accuse the lawyers who helped expose their practices (Morgan Pietz and Nick Ranallo) of being worthy of sanctions when it was actually Team Prenda itself who is facing significant sanctions. This sort of “I know you are, but what am I” tactic appears to be a popular one with Team Prenda. When Brett Gibbs was a member of Team Prenda, he engaged in exactly that, trying to get Judge Wright thrown off the case for bias, while also claiming that Pietz deserved sanctions, and even claiming that there was no proof Pietz really represented anyone.

Of course, now that Brett Gibbs has switched sides, and has been willing to provide depositions about how Team Prenda is lying, it appears that he’s now the latest target. There were some rumors yesterday that Mark Lutz had filed a bar complaint against Gibbs, but now it’s been confirmed in a filing by John Steele in the case before Judge Wright (we’ll have more about today’s hearing in that case in a bit).

As you may recall, in a different case in Northern California, Team Prenda had been ordered to produce the actual signature of “Salt Marsh” as was signed to a court filing. Mark Lutz then claimed that Gibbs regularly sent him “certifications to sign on behalf of AF Holdings” and he signed them Salt Marsh, as that was the name of the trust that owned AF Holdings. Gibbs responded by pointing out that none of this was true, and he never even knew Lutz was even affiliated with these companies until months later. In other words, Gibbs very clearly said that Lutz was lying to the court.

So, now, we see the response: Lutz has filed a bar complaint in California against Gibbs, claiming that Gibbs is the one who’s lying.

My name is Mark Lutz and I am the manager of a company, AF Holdings, LLC, (“AF”) that until July 3, 2013, was represented by Mr. Gibbs. The thrust of this complaint is that AF’s attorney, Mr. Gibbs, is actively assisting AF’s adversaries in exchange for his own personal financial gain.

By the way, I’d suggest you compare the language Lutz used in his filing for sanctions against Pietz and Ranallo, with the bar complaint against Gibbs. It’s a guess, but I find it unlikely these two were written by the same individual.

That said, the bar complaint is particularly ridiculous. The more you read, the more ridiculous it gets.

In February, 2013, Judge Wright issued an order to show cause solely against Mr. Gibbs with respect to a case where he was representing AF. (Exhibit G) Mr. Gibbs did not inform me of this hearing. I later learned that at the hearing, Mr. Gibbs repeatedly lied to the Court, making such claims as he was “essentially a secretary” and that other attorneys that I had never spoken to about that case were AF’s attorneys. (Exhibit H) As a side note, I would like to inform the California bar that Mr. Gibbs has filed and supervised hundreds of cases on behalf of AF all across the country. Mr. Gibbs was the only attorney I EVER spoke with about the case before Judge Wright. After the March 11, 2013, hearing, Judge Wright issued another order to show cause and scheduled a hearing for it on April 2, 2013 (Exhibit I) Because of Mr. Gibbs’ testimony at the March 11 hearing, AF was now a defendant in the new order to show cause. In other words, my own attorney transformed an OSC against him into an OSC against my company based on complete lies to the judge.

The complaint goes on and on about how Gibbs was doing all this stuff without ever contacting Lutz. Of course, given Gibbs’ clear testimony that he had no idea Lutz was even associated with these companies until later, that would make a lot of sense, wouldn’t it? Similarly, given Lutz’s close connections to John Steele, the idea that he hadn’t spoken to Steele (who Gibbs has noted was directing much of the litigation effort) is particularly difficult to believe.

I’m certainly not as familiar with how the bar complaint process goes, but one hopes that the California state bar will at least take the time to read through the rulings in the various cases, including Judge Wright’s ruling against Prenda, in order to understand who is credible here and who is not.

Filed Under: bar complaint, brett gibbs, california sate bar, john steele, mark lutz, otis wright, paul hansmeier
Companies: af holdings, prenda, prenda law

Prenda Fails To Pay Filing Fee For Appeal, Now Owes $9,425 In Legal Fees

Failures

from the so-many-appeals-to-keep-track-of... dept

While the “big” Prenda appeal is in the central district of California, back in May, we noted that a ruling in the northern district had also said Prenda needed to pay legal fees to Nick Ranallo, in the amount of $9,425. Paul Duffy quickly appealed, but never paid the $455 fee for an appeal. He was warned a few weeks back that he needed to pay up, and still didn’t, so the court has now dumped the appeal and locked in the $9,425 fee that Prenda is required to pay. Of course, if they’re not even going to pay the $455 for the appeal, I’d imagine that it’s going to be nearly impossible to get the $9,425. As we already know, Duffy has claimed that Prenda is winding down its operations… even as a nearly identical operation, with the same basic participants, but called the Anti-Piracy Law Group, sprung up in its place. How long until someone connects those two, and says that the attorneys fees owed can come from the latter as well?

Filed Under: appeals, attorney fees, fees, nicholas ranallo, paul duffy
Companies: af holdings, prenda, prenda law