Prenda Law Is Under Withering Fire From All Sides
All of my coverage of the Prenda Law saga is collected here.
The Prenda Law crew has been up to shenanigans for many months, and Ars Technica and Techdirt and Die Troll Die and Fight Copyright Trolls were all doing great work covering them long before I took notice. I was preoccupied by crucial legal issues like Bigfoot and ponies and thus-and-such until Prenda Law blundered into my core area of interest: bogus defamation suits calculated to silence critics.
My first post about Prenda explained how Prenda Law and its principals Paul Duffy and John Steele filed three defamation suits in three federal districts against Alan Cooper (the man who accuses Prenda of stealing his identity as a front man for fake plaintiff entities), Paul Godfread (Cooper's lawyer), and various unnamed John Does. I also reported when Alan Cooper seized the initiative and filed counterclaims against Prenda Law and Paul Duffy. Steele shrewdly dismissed his defamation suit in Florida before Cooper could counterclaim.
Today there were updates in the defamation cases — anti-SLAPP motions filed by Godfread and Coooper. In addition, Morgan Pietz — whose defense of John Doe defendants has led to Prenda's downfall — filed his promised supplemental brief before Judge Wright. Meanwhile, in Florida and Arizona and San Francisco, attorneys nip at Prenda's heels.
April is the cruelest month for Prenda. You might want to grab a sandwich; there's a lot going on, and this will take a while.
Hail Federal Court, Paul Duffy Salutes You
There's a great line in the book A Game of Thrones in one of the Catelyn chapters. The mercilessly competent sellsword Bronn, with skills born of hard circumstance and need rather than privilege, is acting as Tyrion's champion in a trial in the Aerie. It's increasingly clear that he badly outmatches the Arynn champion, Ser Vardis Eagen. Eagen is battered and doomed. The deluded Lysa Arynn calls out for Eagen to finish Bronn, as if Eagen had just been playing. "And it must be said of Ser Vardis Eagen," Martin writes, "that he was true to his lady's command, even to the last." Eagen redoubles his effort and does his best, until he is bloodily dispatched.
It must be said of Mr. Paul Duffy that he is doing his best.
He's trapped and bloodied now. He's invoked his Fifth Amendment rights rather than answer questions posed by Judge Wright in Los Angeles about Prenda Law's conduct. If he wants to maintain his silence, he has to rely on legal arguments rather than offering his own testimony live or by declaration. He's pointed the finger at Brett Gibbs to defend himself, but Gibbs is starting to lash out at the people who have thrown him under the bus. Duffy's confederates Steele and Hansmeier aren't talking. Other past and current local counsel are probably smart enough to see how Prenda Law treated Gibbs; Duffy can't rely on them for support. In San Francisco, in a case in which Duffy is battling a demand for attorney fees based on Prenda Law's alleged misdeeds, a federal judge has ordered him to appear personally this week. So it's not shaping up to be his best year ever.
But he's a scrapper, our Mr. Duffy. In Illinois, where he and Prenda Law sued Alan Cooper and Paul Godfread, he's attacked their counterclaims. He's filed motions to dismiss those counterclaims in the Southern District of Illinois case brought in Prenda's name and the Northern District of Illinois case brought in his own name. In his nearly identical motions — one brought pro se on his own behalf, one on behalf of Prenda Law — Duffy argues that the counterclaims are without merit because they complain about actions by John Steele and Paul Hansmeier and others, and Prenda and Duffy are not liable for their actions. This argument is not likely to be successful in the long term; at worst, Cooper can amend his counterclaims to allege more specific facts suggesting that Prenda Law, Duffy, Steele, and Hansmeier have been acting in concert. Moreover, Duffy — in defiance of Rule 11, which requires attorneys only to make claims which have a good-faith basis — lets fly with this whopper:
In a completely unrelated proceeding, one of the two named Defendants, Alan Cooper, in January 2013 filed a complaint against several entities, including Plaintiff, alleging among other things the misuse of Defendant’s name; that action is pending in State court in Hennepin County, Minnesota (the “Minnesota Suit”).
Yeah, sure, Cooper's suit is "completely unrelated" — except that (1) it involves the same parties, (2) it concerns Prenda's operations, (3) it accuses Prenda of stealing Cooper's identity, which Prenda's and Duffy's complaints suggest is a defamatory statement, (4) John Steele used all three suits to threaten and intimidate Cooper as soon as Cooper filed his complaint, and (5) Prenda's and Duffy's complaints specifically identify the Cooper complaint as one of the forms of defamation they are suing over. This is not just a lie to a federal court. It's not even a plausible lie. It's a stupid, ineffectual, desperate lie.
Duffy also filed a motion to remand Prenda Law's claim — that is, to send it back to Illinois state court. I could explain federal jurisdiction until we hate each other, but let me be brief: federal courts can take cases that allege federal claims (say, a copyright claim) or diversity cases. A diversity case is when the plaintiffs and defendants are from different states. Duffy's argument in Prenda's Motion to Remand, with Exhibit A, Exhibit B, and Exhibit C, is that Cooper and Godfread improperly removed Prenda Law's complaint to federal court because just before they did Prenda Law amended its complaint to add its new incarnation, "Alpha Law Firm," as a plaintiff, and Alpha Law Firm is a Minnesota resident, and therefore there is not "diversity" between plaintiffs and defendants. There are some problems with this argument, which Duffy will no doubt discover when Cooper and Godfread file their opposition to the motion. But here's the curious thing: the amended complaint adding Alpha Law Firm — listed above as Attachment A — doesn't seem to identify any defamatory statements made about Alpha Law firm. It only talks about statements made about Prenda and its attorneys. This suggests that Prenda Law may have added Alpha Law as a sham plaintiff simply in an effort to prevent diversity and evade federal court. A federal judge might have questions about that — which, at this point, Paul Duffy won't be able to answer, because he's taking the Fifth. Even if he wins, the case just goes back to state court, where he'll still be hamstrung by taking the Fifth.
Paul Duffy's doing his very best. It's not going to be good enough.
Prenda, Meet SLAPP. SLAPP, Meet Prenda.
Alan Cooper's counterclaims showed that he will be relying on Minnesota's anti-SLAPP statute. In my post, I speculated about why he would do so when he's in Illinois, which has its own statute. Today he and Mr. Godfread filed anti-SLAPP motions explaining the matter even to a dummy like me.
I'll start by explaining a bit about anti-SLAPP statutes. A "SLAPP" is a Strategic Lawsuit Against Public Participation — that is, a lawsuit designed to chill speech. An anti-SLAPP statute is a law that permits a defendant to file a special motion to dismiss a SLAPP suit, and often to recover fees. Some, but not all, states have anti-SLAPP statutes of varying quality. I've explained at length how they work, but let me sum up.
Despite what TV suggests, a defendant generally can't easily get rid of a civil case before trial on the grounds the plaintiff has no evidence. A motion to dismiss — or "demurrer" — is an opportunity to ask whether, if everything in the complaint is true, the plaintiff has a legal claim. But that motion doesn't and can't inquire whether the plaintiff has evidence. Much later in the case after expensive and intrusive discovery, the defendant can file a motion for summary judgment, which asks if there is any evidence at all, however little, supporting the plaintiff's claim. But you can't just show up in court saying "they'll never be able to prove this." That's why litigation can be so ruinous even if the plaintiff doesn't really have a case.
An anti-SLAPP motion empowers a defendant who has been sued for speech to force the plaintiff to produce evidence showing they might ultimately win. It's an exception to the general rule, a special tool that makes the plaintiff show immediately that they have both a factual and legal basis for their claims. If the statute is drafted right (a long post all by itself), it's an effective bullwark against bogus attacks on speech. The statutes work in two steps. In step one the defendant has to prove that the complaint is targeted at protected speech (for instance, by showing that the speech complained of was on a public issue, or in a public proceeding), and in step two the burden shifts to the plaintiff to present evidence to prove that they can prevail — that they have evidence sufficient to show that the speech they are attacking is not protected by law and that it wronged them.
Cooper and Godfread filed anti-SLAPP motions in the Northern District of Illinois case brought by Paul Duffy and the Southern District of Illinois case brought by Prenda Law. They are supported by Exhibit A, Exhibit B, Exhibit C, Exhibit D. Exhibit E, Exhibit F, Exhibit G, Exhibit H, Exhibit I, Exhibit J, and Exhibit K. They begin with a swift and ugly depiction of the Prenda Law team's threats against Cooper and Godfread in retaliation for Cooper's complaint about his identity being stolen.
Cooper and Godfread rely on the Minnesota anti-SLAPP statute. How can they do that when they are in federal court in Illinois? They make an argument that I didn't anticipate — they argue that under a complex choice-of-law analysis, Minnesota's law applies because the complaints allege actions and injury in Minnesota. I could summarize the applicable law, but then we'd hate each other again. Under step one of the anti-SLAPP analysis, Cooper and Godfread argue that whatever causes of action Duffy and Prenda Law have alleged, they are ultimately complaining about speech, triggering the anti-SLAPP statute's protections. For the second point, they argue that Duffy and Prenda cannot possibly carry their burden of proving that they can win. Cooper and Godfread point out that Duffy's and Prenda's complaints are at least partially directed at Cooper's lawsuit, but lawsuits are absolutely privileged from defamation actions. They also assert that the rest of the allegations are speculation — that Prenda and Duffy will not be able to prove that Cooper or Godfread had anything to do with the internet comments made about Prenda and the various Prendarasts.
Frankly the second part of the argument was not as broad as I would expect. Prenda's and Duffy's complaints are problematical because most of the words they cite as defamation are actually mere insults or statements of opinion, neither of which can be a basis for a defamation action. Normally you'd expect Cooper and Godfread to argue that the plaintiffs can't prevail for those additional reasons. But here's the beauty of this situation for Cooper and Godfread — the anti-SLAPP statute forces Duffy and Prenda to come forward with actual evidence establishing that they might win. To do that, they have to come forward with evidence that the statements that they are complaining about are false. But those statements are about exactly the things that Steele and Hansmeier and Duffy took the Fifth rather than address. Duffy and Prenda can't carry their burden unless they reverse the decision to take the Fifth. Ultimately, Cooper's and Godfread's narrower argument is elegant and well-suited to the circumstances. It's not always the right strategy to make every possible argument.
The anti-SLAPP motions will either force Duffy to abandon his right to remain silent or make only perfunctory responses to the motions.
Meanwhile, In Los Angeles . . . .
Just because Illinois is heating up, did you think we forgot Prenda Law here in Los Angeles? No.
After the belated positions filed by John Steele and Paul Hansmeier and Paul Duffy, Morgan Pietz sought leave to reply. Duffy, Hansmeier, and Steele objected angrily, if not wisely. Judge Wright granted leave, and today Pietz filed his supplement. The brief is here, Pietz' declaration is here, the declaration of his technical expert is here, and the exhibits are here.
Pietz can be excused for sounding a bit triumphant after the attorneys opposing him took the Fifth rather than address the questions he raised. He leads by pointing out that although John Steele claims there is no evidence that he has any ownership interest in Prenda Law's clients, Steele's own attorneys previously told the Florida State Bar the opposite — and a Prenda law local counsel also said that Steele had an interest in AF Holdings. Pietz attacks the credibility of Brent Berry, the real estate agent who claimed that Alan Cooper was in on the scheme and is violent and mentally ill. Pietz points out that Berry is Steele's agent and just sold a house for him in February. Pietz also points out that Berry signed the declaration in February, but Prenda law oddly withheld it until after the hearings before Judge Wright. Finally, Pietz echoes what everyone has been saying — Berry's testimony might suggest that Cooper knew his name was being used, but if accepted it proves that Cooper was a mere shill for the Prenda Law attorneys who actually controlled the plaintiff entities. Pietz also offers rebuttals to the Prenda lawyers' other arguments — he argues that Judge Wright's powers allow him to award attorney fees as sanctions based on the record before him, and he offers the declaration of a technical expert to rebut Prenda's arguments that its investigation of downloaders was reasonable and sufficient.
What remains? Judge Wright could issue an order any day. The Prenda Law attorneys may seek leave to attack Pietz' filing. They'd better hurry.
And So On, Across The Nation
The word of Prenda is spreading. As I said, in San Francisco a federal judge has ordered Paul Duffy to appear personally in response to arguments about Prenda Law's conduct. In another San Francisco case the defendant is reporting Prenda Law's invocation of the Fifth in support of their motion for fees and describing Prenda as having "fled the scene." In Florida a defendant is withdrawing his sanctions motion against Brett Gibbs while flipping Gibbs against Steele and Hansmeier. In Arizona a defendant is updating a judge on the Prendateers' invocation of their right against self-incrimination.
Prenda Law, as a viable entity, is dead, and its lawyers are in grave jeopardy. The wheels grind slowly. But they grind. They grind.
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