Alan Cooper Strikes Back, Files Counterclaim Against Prenda Law and Paul Duffy
Prior coverage of Prenda Law is collected here.
Can things get worse for Prenda Law even before the next hearing before Judge Wright?
Yes. Yes they can.
Prenda Law's three censorious defamation suits inspired me to start writing about their shenanigans. Though John Steele dismissed the one he filed in his own name in Florida, two cases remain in federal court in Illinois: one filed by Prenda Law in the Southern District of Illinois, and one filed by Paul Duffy in the Northern District of Illinois. Jordan Rushie posted them here.
As you may recall, among others Prenda's defamation lawsuits target Alan Cooper — nominally an executive of Prenda's clients, but according to him, a victim of identity theft — and Cooper's lawyer, Paul Godfread. Though the suits are very vague, they seem to attack Cooper and Godfread for asserting (both in public and in court) that Prenda has stolen Cooper's identity.
Yesterday, March 21, Cooper and Godfread struck back. They filed answers and counterclaims in both Illinois federal suits.
Here are some things to notice about the answers and counterclaims.
Federal Practice Requires Specificity: In most states, you can file an answer that just says, in so many words, "y'all is full of shit." In federal court you have to file an answer that admits or denies each and every allegation in the complaint specifically. The answer portions of the answers and counterclaims do so.
Affirmative Defenses: Affirmative defenses are legal defenses asserted in the answer to give the court and the plaintiff notice that the defense will be asserting them. Usually they are formulaic, and it's sadly common practice just to cut and paste every defense you ever heard of to preserve it, whether or not it has any connection to the case at hand. Cooper's and Goodfread's affirmative defenses are fairly tight, and are focused on their allegations about Prenda's actions. For example:
Tenth Affirmative Defense
10. Plaintiff is involved in copyright litigation in numerous jurisdictions nationwide on behalf of plaintiffs AF Holdings, LLC and Ingenuity 13, LLC. In these cases, Plaintiff has filed or caused to be filed documents identifying “Alan Cooper” as CEO of AF Holdings and Ingenuity 13. Defendant Cooper denies having ever been CEO of either entity, and denies signing any documents, and specifically any copyright assignment documents, on behalf of them. Defendant Cooper filed suit against Plaintiff, Paul Duffy, John Steele and Paul Hansmeier for misappropriating his identity. See Minnesota Complaint. This case was filed in response to Defendant Cooper’s lawsuit against Plaintiff in Minnesota.
Who Are Cooper and Godfread Suing, Anyway? My main criticism of the counterclaims is that they are rather vague as to who is suing whom. Ideally each counterclaim would say something like "By Defendant and Counterclaimant Alan Cooper Against Prenda Law, Paul, Duffy, John Steele, and Paul Hansmeier." But they don't. The result is confusing. The fact section of the counterclaims refer to "plaintiff," which seems to be a reference to Alan Cooper, but the text of some of the counterclaims themselves suggest that Paul Godfread is a counterclaimant as well. Moreover, clearly Duffy is a counterdefendant in the counterclaim in his case and Prenda law is a counterdefendant in the counterclaim in its case, but past that it's a bit hard to piece together. The counterclaims talk about the various individuals and entities and assert that they are alter egos of each other (a legal argument meaning that one can be held liable for the actions of the other), but they are coy about who they are suing. The counterclaims would benefit from clarification.
The SLAPP Issue: In both cases, the first counterclaim seeks a declaration that Cooper's and Godfread's conduct is protected by Minnesota's anti-SLAPP statute. This is odd. It took me a while — bear in mind I'm not the sharpest knife in the drawer — but I think I have worked out what is going on. It's wonky. Skip this section if it's going to make you doze off.
First, a reminder: anti-SLAPP statutes allow a defendant to file a special motion to dismiss a lawsuit that attacks protected speech. Here is my discussion of how they work and why they convey rights that defendants don't normally have.
Second, a qualification: at least until we pass a national anti-SLAPP law, anti-SLAPP statutes are state statutes. Their application is limited, in tedious and complicated ways, in federal court. The short version is this: a federal court will usually apply the anti-SLAPP law of the state in which it sits, but only to state law claims before it. So: if I sue someone on federal and state claims in federal court in California, the federal court will apply California's anti-SLAPP statute to the state claims but not the federal claims. (There are other dreary restrictions on application of anti-SLAPP laws in federal court too involved to describe here.)
Third, a strategic note: these two defamation suits are in federal court in Illinois. Illinois has a reasonably robust anti-SLAPP statute which should apply to the state law claims in Prenda's and Duffy's lawsuits. Normally you'd bring that motion rather than answering the complaint. So: why haven't Cooper and Godfread brought a motion under that statute? I don't know. I have no inside information. I have only hypotheses. One hypothesis: rather than getting the defamation cases dismissed, they want to use the discovery process in federal court in Illinois (rather than the process in Cooper's state case in Minnesota) to dig into Prenda Law and its principals. That might be a good strategy because (1) federal courts are less tolerant of evasion and misbehavior in discovery, and (2) federal courts will likely take more note of Judge Wright's proceedings and compel discovery accordingly. So: perhaps Cooper and Godfread are still planning to file an Illinois-law anti-SLAPP motion — though it would be oddly timed — but my educated guess is that they are going to use the Illinois cases to conduct a rubber-glove investigation of Prenda.
Fourth, a qualification: as I said, the counterclaims' first claim for declaratory relief confused me at first. Federal courts apply the anti-SLAPP statute of the state where they sit, not some other state. Moreover, anti-SLAPP laws are a procedural vehicle for dismissing a case, not the basis for a claim. So why are Cooper and Godfread seeking declaratory relief under the Minnesota anti-SLAPP statute, rather than moving under the Illinois statute?
Lawful conduct or speech that is genuinely aimed in whole or in part at procuring favorable government action is immune from liability, unless the conduct or speech constitutes a tort or a violation of a person's constitutional rights.
So. I think Cooper's and Godfread's theory is that their conduct in Minnesota is, under Minnesota law, immune from suit, not just subject procedurally to an anti-SLAPP motion. Clever. Very clever. And in federal court in Illinois, a declaratory relief claim is probably the right way to raise that.
Of course, since I practice in California and in the Ninth Circuit, I could easily be missing some nuance of Illinois, Minnesota, or Seventh Circuit law. Edited to add: And, as Nicholas suggests in the comments, filing an answer forecloses Prenda and Duffy from filing a dismissal without prejudice — that means they can't get out without court permission now, as Prenda has been doing in cases across the country.
The Discreet Charm of Paul Hansmeier: The most amusing moment in the counterclaims is when Cooper and Godfread describe a threatening letter Paul Hansmeier sent Godfread shortly after Godfread filed Cooper's lawsuit alleging that Prenda Law had stolen his identity. Here it is in all its glory.
Dear Mr. Godfread:
My firm has been retained by Livewire Holdings LLC to pursue claims in the U.S. District Court for the District of Minnesota against you and your coconspirators arising from defamation, civil conspiracy and related acts. The alleged acts occurred in e-mail communications and blog posts describing my client as a criminal enterprise. As you know, such statements constitute defamation per se and are, quite frankly, wildly inappropriate. Less-egregious claims have resulted in multi-million dollar judgments, as I trust this one will. The facts of the underlying case are essentially a law school exam hypothetical of every possible variation of libel. Perhaps you can forward my client's complaint to your former professors at William Mitchell. My client is well-aware that you are a major contributor to these blog sites.
The purpose of this e-mail is to inform you of impending litigation so that you preserve all relevant evidence in your possession including, but not limited to, communications between yourself and David Camaratto, Morgan Pietz, Nicholas Ranallo and any other individuals associated directly or indirectly with the sites fightcopyrighttrolls and dietrolldie. Further, any and all other evidence that might
be relevant to this matter must, of course, be preserved.
I suspect that you aligned yourself with these defamatory efforts as a marketing strategy. I don't know if these efforts paid off, but I can assure you that making baseless accusations of criminal conduct is not a wise move for a licensed attorney. All of that being said, my client knows that you didn't work alone in these wrongful efforts. If you think we are missing out on more serious actors in your enterprise my client would be willing to consider decreasing your liability in exchange for information about these individuals. Of course, that interest will disappear if someone else comes forward first. Think it over and let me know. If you're willing to take the fall for whole group then you are decidedly a "true believer."
Welcome to the big leagues.
There are a few things I'd like for you to notice about this letter. First, note that Paul Hansmeier is a pioneer, a sort of Marie Curie of douchebaggery: in "Welcome to the big leagues," he has discovered a close-off even more insufferable than "govern yourself accordingly."
Second: please take note of the dog that did not bark in the night. That is, note what the letter does not say. Consider the context. Godfread, on behalf of Cooper, is telling courts that Prenda Law has stolen Cooper's identity, and has filed a lawsuit on that basis. What would you expect in response, if Prenda Law had an answer for that? If I were representing Prenda Law, and had an answer, there is no doubt in my mind I would articulate it. I would say, "As you and Mr. Cooper know, and witnesses will attest, Mr. Cooper was a willing participant in AF Holdings LLC and fully consented to being an officer." Or I might say "You have recklessly and without adequate basis suggested that your client is the Alan Cooper who is an officer of AF Holdings, when even the briefest inquiry would show that AF Holdings is led by the distinguished Alan Cooper of Nevis and St. Kitts." I would say something articulating why Cooper's and Godfread's assertions are false. As I so often say, vagueness in legal threats is the hallmark of thuggery. But Hansmeier says nothing of the sort. He has only adolescent puffed-up threats and insults. What do you think that signifies?
Prenda Law faces reckoning in Los Angeles. That should have been their focus for some time. Once proceedings before Judge Wright started to heat up, they could have dismissed the two Illinois cases, as John Steele dismissed the Florida cases. They didn't. They may learn, to their regret, that they have committed the jurisprudential equivalent of opening a second front in Russia just before winter. Their winter.
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