Guardaley | X-Art

Yet another lawfirm sues its former client Malibu Media

A notorious porn copyright troll XArt/Malibu Media used multiple lawfirms to extort money from alleged pirates over the last decade. First it was Lipscomb Eisenberg and Baker (now “Lipscomb Partners“), then Pillar Law, and, until recently, Lomnitzer Law Firm P.A., which ceased the representation in August 2019. The two former relationships ended scandalously: Lipscomb and Malibu sued each other in 2016 and there is now an ongoing dispute between Colette Pelissier (X-Art’s owner) and Pillar. Also, X-Art is being sued by an investor.

Now Lomnitzer Law has followed suit and sued Malibu for breach of contract demanding $280,058.32 plus interest (The Lomnitzer Law Firm, P.A. v. Malibu Media, LLC, FLSD 20-cv-80027-RKA):

Beginning at a date presently unknown, Malibu instructed attorneys in various jurisdictions that were representing Malibu in the nationwide litigation that was being coordinated by the Firm to by-pass the Firm and to remit settlement monies from such litigation other than to the Firm while still expecting the Firm to pay court filing fees, process server fees, etc., all incurred for and on behalf of and for the benefit of Malibu.

There are no good guys here: Lorri Lomnitzer should have known that the Malibu Media legal campaign was highly unethical. When vermin eat each other, decent people win.

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Published on: Author: SJD
Prenda

The end of Prenda saga: John Steele sentenced to 5 years

Less than a month after his partner Paul Hansmeier was sentenced to 14 years in prison, the loudest (and therefore the most hated) porn copyright troll John Lawrence Steele learned his fate: almost three times less prison time than his co-conspirator. Why such difference? Cooperation. Claims of remorse. Competent representation.

Star Tribune’s Dan Browning has been covering Prenda-related news for years: unsurprisingly he attended today’s sentencing and was first to report on what took place in the courtroom. I was not there so I have nothing to add.

I don’t feel like celebrating the fact that people (even villains) go to prison. However, Steele and Hansmeier harmed many and damaged respect for the courts, so deterrence is necessary.

If I were the judge, I’d pay more attention to restitution: ordering Steele and Hansmeier to jointly pay their victims $1.5 million while the amount of loot was two to four times bigger looks inadequate to me.

This sentence concludes the Prenda saga. When Hansmeier eventually loses his appeal, I will mention it. Otherwise, that’s it.

Cheers to everyone who helped to bring down the most arrogant copyright trolling operation: you know who you are.

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Published on: Author: SJD
Prenda

Prenda’s Hansmeier sentenced to 14 years, ordered to pay 1.5 million to victims

In summary, Hansmeier was greedy, arrogant, devious, mendacious, and consistently positioned other people to be damaged by his conduct, even as he enjoyed the proceeds of the scheme he orchestrated. Even now, Hansmeier continues to accept responsibility only in conditional terms, hoping to convince the appeals court that his shocking abuse of his position of trust as a Minnesota attorney, and an officer of its courts, was somehow legal.
Position on Sentencing Memorandum by USA as to Paul R Hansmeier
Paul HansmeierPaul Hansmeier

Paul Hansmeier, who pleaded guilty to two counts of the indictment a year ago, has been sentenced to 14 years (+2 years of supervised release) by Judge Ericksen today (the government recommended 12.5 years). Also, the judge set the restitution amount to 1.5 million. He has to report on July 9.

His partner in crime John Steele pleaded guilty two years ago and has been cooperating with the government since. His sentencing is set to 7/9/2019, and the government recommended prison term of 8-10 years for him.

While Steele has been in the mea culpa mode since the indictment, Hansmeier was defiant, and he still is: just two weeks ago he filed a motion to remain free during his planned appeal, in which he still insists that he didn’t do anything wrong. The government replied on Wednesday arguing that prison is a more appropriate venue for Hansmeier to watch his appellate loss. The judge denied Hansmeier’s motion today.

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Published on: Author: SJD
Guardaley | X-Art

Former Malibu Media attorney Paul Nicoletti found guilty on four counts of bank fraud

NicolettiFormer attorney Paul Nicoletti

Today, after deliberating for about 1.5 hours, a Detroit jury found a former porn copyright troll Paul Nicoletti (X-Art / Malibu Media) guilty on four counts of bank fraud. This prosecution was not related to Nicoletti’s porn trolling activity, although these events were not surprising: copyright trolling attracts all kinds of shady people.

Nicoletti was indicted in June 2015. After that, in what appears to be attempts to game the system, he managed to secure a delay after delay: I lost the count of judge’s orders to postpone trial and how many public defenders Nicoletti fired to buy more time.

I covered the indictment and subsequent events until I stopped about a year ago. If you are curious, you can fill the gaps by looking at the docket: you’ll find some interesting documents there (e.g., this one).

In this case the proverbial wheels of justice have been grinding particularly slow.

The sentencing was set to 9/24/2019.
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Published on: Author: SJD
Prenda

Government asks Prenda’s victims to come forward: restitution is possible

Yesterday U.S. Attorney’s Office (District of Minnesota) issued the following statement:

Information For Victims Of USA v. Hansmeier, Et Al. Copyright Fraud Scheme

In the case of United States v. Hansmeier, et al., defendants PAUL R. HANSMEIER and JOHN L. STEELE will be sentenced on June 4, 2019, before Judge Joan N. Ericksen in U.S. District Court in Minneapolis, Minnesota. HANSMEIER and STEELE were charged and convicted of orchestrating a multi-million dollar fraud scheme in which they obtained payments from victims to settle sham pornography film copyright infringement lawsuits. At the sentencing hearing, the Court may, but is not required to, order HANSMEIER and STEELE to pay restitution to the victims of their scheme.

If you believe that you are a victim of this scheme, and actually paid money to the entities involved in the case (including, but not limited to, Steele Hansmeier Law, Prenda Law, Alpha Law, Anti-Piracy Group, AF Holdings, Ingenuity 13, Guava LLC, Livewire, LW Systems), please visit https://hansmeier.usaocrimevictims.org/ to obtain information about how to make a claim for restitution in this case. Victim information will not be disclosed to the public.

The case is captioned United States v. Hansmeier, et al., Criminal No. 16-cr-00334 (JNE).

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Published on: Author: SJD
Guardaley | Voltage

For the first time a circuit court rules that IP address is not enough to pursue alleged bittorent pirates

When targeting internet users en masse, bittorent copyright trolls don’t bother to diligently investigate who they are suing. The trolls rely solely on an IP address for which unlicensed German “investigators” recorded a wink-long piece of a movie purportedly uploaded by that IP address to a swarm. After an ISP sells out its customer to the troll, a shakedown ritual starts — the ritual that generally results in either settlement or default judgement. Sometimes, when a victim puts up a fight, the troll “cuts and runs”: dismisses a lawsuit without prejudice in a hope to avoid compensating a wrongly accused.

Trolls don’t bother to make sure that the owner of the IP address in question — a person who pays the Internet bill — is an infringer. Such investigation is not needed because the majority of judges don’t pay much attention to screaming deficiencies of the complaints and jollily rubberstamp subpoenas and motions for default judgment.

Once in a while a district judge rules that IP address is not equal a person, and hence the plaintiff does not meet the plausibility standard set by Ashcroft v. Iqbal. Such rulings, while eagerly reported by tech media, so far have been a drop in the ocean and did not deter copyright trolls from continuing to abuse the judicial system.

Today the US Court of Appeals for the Ninth Circuit added its significant weight, and this weight can finally tip the scales of the bittorent litigation:

In this copyright action, we consider whether a bare allegation that a defendant is the registered subscriber of an Internet Protocol (“IP”) address associated with infringing activity is sufficient to state a claim for direct or contributory infringement. We conclude that it is not.

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Published on: Author: SJD
Strike 3 Holdings

Magistrate judge finds that defendant’s privacy interest trumps copyright troll’s need to unmask an alleged infringer, denies ex-parte discovery

The recent explosion of copyright trolling lawsuits (particularly filed by a new aggressive porn troll Strike 3 Holdings¹) was possible in part because courts routinely rubberstamp ex-parte discovery requests. It does not matter that foundations of such requests are flimsy at best, illegal at worst. Since there is no meaningful opposition at the subpoena stage, judges don’t bother looking into the validity of the trolls’ claims and take false statements and fake declarations for granted. As a result, requests to unmask alleged file-sharers are almost always granted.

Yet once in a while there is a judge who denies a discovery motion. The reasons vary: it can be a doubt of geolocation accuracy, finding that a plaintiff has no intention to litigate, concerns about abuse of process, or suspicious declarations, which a real estate agent from suburban Chicago signs by the truckload.

On 4/24/2018 Magistrate Judge Franklin Noel denied a discovery motion in Strike 3 Holdings v John Doe (MND 18-cv-00768) for yet another reason. Namely, he concluded that a defendants’ privacy interests trump copyright trolls’ need to learn the defendant’s identity:

Plaintiff’s ex parte motion illustrates an ongoing conflict between the Digital Millennium Copyright Act (DMCA), 17 U.S.C. § 512, the Communications Act, 47 U.S.C. § 551, and Federal Rule of Civil Procedure 45. At the heart of this conflict is whet her a copyright owner can use the federal judiciary to discover evidence about a potential, alleged infringer when the infringer’s actual identity is unknown.

You already guessed which statute Judge Noel thinks should prevail:

This Court concludes that the conflict between the statutes, DMCA and the Communications Act, compels it to deny Plaintiff’s instant ex parte motion. As the Eighth Circuit reasoned in In Re Charter Communications, when it held that DMCA did not authorize the subpoena the district court had issued, “it is the province of Congress, not the courts, to decide whether to rewrite DMCA ‘in order to make it fit a new and unforseen internet architecture.’” 393 F.3d at 777 (quoting Verizon, 351 F.3d at 1238).

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Published on: Author: SJD
Guardaley | Voltage

In devastating detail, defense attorney documents years of copyright trolls’ fraud on the federal judiciary

 

The document filed yesterday in two bittorent copyright cases – Strike 3 Holdings LCC v John Doe (WAWD 17-cv-01731) and Venice PI LLC v David Meinert et al (WAWD 17-cv-01403) – eliminates any remaining doubt that the current massive bittorent litigation campaign (steered by the German “anti-piracy” company Guardaley) differs from the infamous Prenda Law scam. This document shows that in tens of thousands of lawsuits (and more are being filed as we speak) federal courts allowed ex-parte discovery of alleged copyright infringers’ identities relying on declarations full of misinterpretations and outright fraud.

To understand the significance of this document, let’s briefly revisit the history of its inception.

Federal Judge questions legitimacy of copyright trolling lawsuits

On 11/3/2017 Federal Judge Thomas Zilly (WAWD) discovered that

In two different cases, Nos. C17-990 TSZ and C17-1075, plaintiff [Venice PI, LLC] sued the same, now deceased, defendant, namely Wilbur Miller. Mr. Miller’s widow submitted a declaration indicating that, for about five years prior to his death at the age of 91, Mr. Miller suffered from dementia and was both mentally and physically incapable of operating a computer.

This discovery was disturbing enough to question the legitimacy of the copyright trolls’ detection methods, as well as plaintiff attorneys’ predatory litigation tactics. In each of the 12 Venice cases assigned to him, the judge issued an order to show cause, directing the troll to

[…] file an offer of proof [that] shall be supported by the declaration of an expert in the field, setting forth such expert’s qualifications, and shall address the following issues:

(i) whether and, if so, how an IP address can be either “spoofed” to or faked by a BitTorrent tracker, and what is the likelihood (quantified if possible) that each defendant’s IP address was a false positive;

(ii) whether and, if so, how plaintiff can prove that the material allegedly tracked to each defendant’s IP address was a “playable” and actionable segment of the copyrighted work at issue; and

(iii) what evidence, if any, can plaintiff currently present, beyond mere association with an IP address, that each defendant engaged in the alleged copyright infringement.

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Published on: Author: SJD
Guardaley | Voltage

Federal judge: Fathers and Daughters Nevada LLC has no standing to sue for Bittorent copyright infringement

 

The ink was barely dry on a recent Judge Zilly’s devastating order when another federal judge, Michael Simon, delivered a serious blow to the German-based copyright shakedown operation by finding that one of Guardaley’s shell companies – Fathers and Daughters Nevada LLC (F&D) – does not have standing to sue.

In a last week’s order WAWD Judge Zilly questioned the legality of copyright trolling operations, and, among other plaintiff’s shenanigans, called out the troll’s shell game:

In every case now before the Court, plaintiff has filed a corporate disclosure form indicating that it is owned by Lost Dog Productions, LLC, which is owned by Voltage Productions, LLC. […] A search of the California Secretary of State’s online database, however, reveals no registered entity with the name “Lost Dog” or “Lost Dog Productions.” Moreover, although “Voltage Pictures, LLC” is registered with the California Secretary of State, and has the same address as Venice PI, LLC, the parent company named in plaintiff’s corporate disclosure form, “Voltage Productions, LLC,” cannot be found in the California Secretary of State’s online database and does not appear to exist.

Today, a federal judge from the neighboring Oregon – Honorable Michael H. Simon – didn’t question the legal status of F&D and connected entities (which include Voltage). However, he granted the defendant’s motion for summary judgement (Fathers and Daughters Nevada LLC v Lingfu Zhang, ORD 16-cv-01443). In that motion, filed on 9/27/2017, the defendant’s attorney David Madden asserted that F&D didn’t possess exclusive rights to sue for copyright infringement, as required by the Copyright Act. Today the judge agreed:

“Under the Copyright Act, only the ‘legal or beneficial owner of an exclusive right under a copyright’ has standing to sue for infringement of that right.” Righthaven LLC v. Hoehn, 716 F.3d 1166, 1169 (9th Cir. 2013) (quoting 17 U.S.C. § 501(b)).

[FN1] Section 501(b) states: “The legal or beneficial owner of an exclusive right under a copyright is entitled . . . to institute an action for any infringement of that particular right committed while he or she is the owner of it.”

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Published on: Author: SJD
Guardaley | X-Art

Under penalty of perjury: Copyright troll Malibu Media gets caught serving up falsified attorney’s fees declarations

Richard Nixon is a no good, lying bastard. He can lie out of both sides of his mouth at the same time, and if he ever caught himself telling the truth, he’d lie just to keep his hand in.
Harry Truman

It is fairly common knowledge to those who defend against Malibu Media copyright trolling lawsuits that there is a large percentage of lawsuit targets that cannot afford legal representation. Accordingly, a large portion of these lawsuits result in default judgements, where the defendant gets served, neglects to respond to the lawsuit, and Malibu Media is pro forma granted a judgement that includes money “damages,” injunctive relief to delete the porn from the defendant’s computer, and attorney’s fees. These default judgements are made on motion and are supported by an attorney’s unsworn declaration UNDER PENALTY OF PERJURY that the hourly records supporting the request for fees are true (see 28 U.S.Code § 1746).

Except they are not.

That is at least what Magistrate Judge Charles B. Day found in his Report and Recommendation dated January 5, 2018 in Malibu Media v John Doe (MDD 15-cv-03185).

HUH?

What piqued the judge’s interest is that Malibu Media’s local counsel Jon A. Hoppe’s Declaration, dated April 21, 2017 (sealed), requesting attorney’s fees in the sum of $1,182.00 is identical to one that was submitted in another Malibu Media lawsuit in another state by another Malibu Media local attorney:

Plaintiff seeks attorney’s fees of $1,182.00 and costs in the amount of $450.00, for a total request of $1,632.00. In Malibu Media, LLC v. Cowham, Plaintiff also requested attorney’s fees in the amount of $1,182.00. Equally, in Malibu Media, LLC v. Doe, Civ. No. CCB-15-1700, 2016 WL 245235, at *3 (D. Md. Jan. 21, 2016), Chief Judge Blake granted Plaintiff’s request for attorney’s fees plus costs of $1,632.00. Although these cases were brought in different states and had different attorneys of record, the charts included in the supporting declarations for fees were identical.

Consequently, the judge ordered a hearing so that Hoppe could explain this remarkable coincidence and produce documentation to support the request for fees.
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Published on: Author: Raul