Prenda Law: Let The Other Shoes Hit The Floor
All of my coverage of the Prenda Law saga is collected here.
Last week I described how Prenda Law principals John Steele, Paul Hansmeier, and Paul Duffy asserted their Fifth Amendment right against self-incrimination rather than answer a federal judge's questions about Prenda Law's litigation campaign. I predicted that attorneys defending against Prenda Law cases would begin to use that assertion against Prenda. Behold: they have.
Georgia On Their Mind
We begin in in the Northern District of Georgia, where AF Holdings LLC brought suit against a Mr. Patel. AF Holdings' local counsel voluntarily dismissed the case on March 18 as part of Prenda's wave of dismissals. Too late, too late. Mr. Patel has filed a motion for sanctions. Since AF Holdings had already dismissed, Patel was forced to rely — as I explained — on the court's inherent powers.
Patel's Motion is a blockbuster. It weaves together information and documents from cases across the country to present its argument against Prenda law and its lawyers. The exhibits to the Motion are here: Exhibit A, Exhibit B, Exhibit C, Exhibit D, Exhibit E, Exhibit F, Exhibit G, Exhibit H, Exhibit I, Exhibit J, Exhibit K, Exhibit L, Exhibit M, Exhibit N,
Exhibit O, and Exhibit P. Among the most notable exhibits are transcripts. Exhibit C is the transcript of the utterly bizarre Florida hearing involving John Steele and Mark Lutz; Exhibit F is a transcript of the jaw-dropping March 11, 2013 hearing before Judge Wright at which Alan Cooper and Brett Gibbs testified, and Exhibit G is a transcript of the April 2 hearing at which Prenda's representatives took the Fifth. These are, on their own, very powerful, for reasons I have discussed before.
But that's not all. Patel has also submitted documents illuminating the conduct and seemingly inconsistent statements of various Prenda Law attorneys. Patel shows a pleading electronically "signed" by "Salt Marsh," one of the elusive figures behind Prenda Law's purported clients — it was also purportedly e-signed by Brett Gibbs. Patel shows that in January 2012, John Steele's attorneys wrote to the Florida State Bar on his behalf representing that "Mr. Steele is actually a client of Prenda — Mr. Steele maintains an ownership interest in some of Prenda's larger clients." It's difficult to reconcile this admission with Mr. Steele's assertion at the April 2 hearing that the attorney-client privilege would prevent him from answering questions about Prenda Law's clients. There's also a rather hilarious quote from a March 15, 2013 email on behalf of Prenda. The Motion doesn't make it clear whether this email was sent by Prenda local counsel or a Prenda principal:
I understand that there is an insane liberal group which is flying around Mr. Alan Cooper for its own benefit. This group is akin to "Anonymous". It doesn't believe in copyright laws. It does believe that computer hacking should be legal. I'm not certain if these southern courts (unlike liberal San Francisco Courts) will hold the same beliefs that this crazy "its ok to hack websites" group holds.
Bear in mind that assertion about the Electronic Frontier Foundation was uttered four days after Alan Cooper testified that his name had been misappropriated by Prenda and that John Steele had left him threatening voice mail messages when he complained. Whoever sent that email either isn't following what is going on, or believes he can bluff it out. Good luck with that.
Patel's motion is well worth reading for anyone interested in an exposition of the growing evidence concerning Prenda Law.
Annoyed In Illinois
Prenda's troubles don't end in Georgia.
In Illinois, Prenda — using its putative client "Lightspeed Media Corporation" — filed state law claims. One defendant — a Mr. Smith — removed the case to federal court in the Southern District of Illinois. Prenda recently began to retreat in that case — Paul Hansmeier and John Steele moved to withdraw, leaving Paul Duffy holding the bag. Duffy, in turn, dismissed the case during the great strategic repositioning of March 2013. Once again, they were too late.
Smith has filed a motion seeking attorney fees as a sanction. The exhibits to the motion are here: Exhibit A, Exhibit B, Exhibit C, Exhibit D, Exhibit E, Exhibit F, and the Forbes article attached as an unlettered exhibit.
Smith is represented, in part, by Jason E. Sweet of Booth Sweet LLP, who also represents Alan Cooper and Paul Godfread in the defamation litigation Prenda recklessly brought against them. Sweet was responsible for what I called a Perry Mason moment during the March 11 hearing; he stood up from the gallery to tell Judge Wright that Brett Gibbs had, in fact, represented himself as "national counsel" for Prenda. Sweet knows the case and knows Prenda, which shows. The Smith motion is a helpful addition to the Patel motion: it focuses more on Prenda's methods of identifying defendants, it attacks Prenda's state law theories, and then it piles on with Prenda's recent misfortunes in courts across the country. A representative sample of the latter:
Steele, Hansmeier and Duffy have orchestrated a nationwide campaign through Prenda Law and other related entities that several courts have found extends beyond vexatious litigation into fraud on the court. For one example that beggars description, Duffy, a prinicpal of Prenda Law, wrote a letter to the court disclaiming any role in representing the plaintiff, a Prenda Law client, though Prenda Law’s local counsel admitted having been retained to represent the plaintiff by Prenda Law principal Brett Gibbs. Hr’g Tr., Sunlust Pictures, LLC v. Nguyen, No. 12-cv-1685, pp. 10-12 (M.D. Fl. Nov. 27, 2012) (Exhibit D hereto). Mark Lutz, formerly a Prenda Law paralegal, represented himself as the plaintiff’s “corporate representative,” but conceded that he had no knowledge of the corporate officers and was paid on a contract basis to make courtroom appearances as a corporate representative for Prenda Law plaintiffs, including Hard Drive Productions and Guava LLC. Id. pp. 13-17 (misidentifying Mr. Lutz as “John Lutz”). The Sunlust Court dismissed the case from the bench “for failure to appear at this hearing, for failure to present a lawful agent, for attempted fraud on the Court by offering up a person who has no authority to act on behalf of the corporation as its corporate representative.” Id. p. 20. Steele, who happened to be present at the hearing, represented to the Court, “I don’t represent Sunlust or anybody anymore. I no longer actively practice law. … I do appear occasionally at hearings on an ad hoc basis, but I do not have any current clients.” Id. p. 19. (At the time, Steele was listed as lead counsel in this action.)
Here's the dilemma of Prenda Law's principals: they can't both take the Fifth and fully respond to motions like these. They can't assert good faith and explain seeming inconsistencies without submitting declarations. If they want to continue to refuse to answer questions, they can only respond with legal arguments and bland generalities.
Paul Duffy has just tried that in San Francisco. In response to a racous motion for fees in an AF Holdings case in the Northern District of California, Paul Duffy has responded with a dry and academic argument about the circumstances in which the Copyright Act permits a court to award fees to a defendant. Duffy's response is not badly written, and doesn't seem to be wrong on the law, but it's not at all the response you'd expect from a lawyer being accused of what amounts to a nationwide criminal enterprise. It's like someone said "Ken, I have it on good authority that you routinely molest squirrels in a public park near your house," and I responded "your accusation is without merit because that park is private."
Paul Duffy, and Prenda Law, might get lucky, and courts might summarily ignore or deny the sanctions and fees motions. But if any judge seeks to make an inquiry even a fraction as involved as Judge Wright has, then Prenda Law and its principals will find themselves choosing between warding off sanctions and maintaining their prudent silence.
This is only the beginning. Stay tuned.
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