Another Hammer Drops On Prenda Law
All of Popehat's Prenda coverage is collected here.
Last month I used up all the ones and zeroes in order to describe the trouble Prenda Law and the Prendateers are in across America. Could it get worse? Of course it could get worse. Today it did.
As you may recall, United States Magistrate Judge Franklin L. Noel reopened several closed Prenda cases in the United States District Court for the District of Minnesota to explore whether Prenda had committed fraud at the court. After a hearing that will render Thanksgiving dinners at the Steele household forever awkward, Team Prenda attempted to disqualify Magistrate Judge Noel based on extravagant accusations of bias. You know, because that worked out so well for them with Judge Wright.
Today Magistrate Judge Noel dropped another hammer on Team Prenda. Unlike Judge Wright, he didn't dress up his order with Star Trek references. Team Prenda probably wishes he had.
The order is here. It's ugly for Team Prenda. After reciting the procedural history — and noting the growing array of judges that have sanctioned Team Prenda — Judge Noel made factual findings:
- He "expressly disbelieves [John] Steele’s testimony" that Steele heard Alan Cooper give Mark Lutz permission to sign Cooper's name to copyright assignments.
- He found that even though he had ordered Team Prenda to produce someone who could testify directly that the copyright assignments were valid — that is, whoever signed them — that they "failed to produce an officer who was capable of testifying to the authenticity of each copyright assignment agreement." He noted "the recent pattern of Lutz failing to appear when he is scheduled to testify under oath."
- He described Alan Cooper's testimony — that Cooper never gave anyone permission to sign his name, and that Cooper didn't know his name was being used – and concluded that he "finds Cooper’s testimony credible."
This will be extremely difficult for Prenda to attack. A judge's evaluation of the credibility of witnesses at a hearing is entitled to great deference on any appeal.
From there, Magistrate Judge Noel made conclusions of law:
The copyright-assignment agreements attached as Exhibit B to each complaint in each of these five cases are not what they purport to be. Alan Cooper denies signing either agreement and also denies giving anyone else the authority to sign them on his behalf. AF Holdings failed to produce any credible evidence that the assignments were authentic. The Court has been the victim of a fraud perpetrated by AF Holdings, LLC. The Court concludes that the appropriate remedy for this fraud is to require AF Holdings to return all of the settlement money it received from all of the Defendants in these cases, and to pay all costs and fees (including attorneys’ fees) incurred by the Defendants. After all settlement payments are returned and other fees are paid, all five cases should be dismissed on the merits, with prejudice. [emphasis added]
Echoing Judge Wright, Magistrate Judge Noel left the rest up to other authorities:
The Court further concludes that, once all of the ill-gotten gains are fully disgorged from AF Holdings, it would not be a wise use of the Court’s limited resources to sua sponte attempt to fully untangle the relationship between Hansmeier, Steele, Duffy, Dugas, Lutz and Prenda Law, on the one hand—and the Plaintiff, AF Holdings, LLC., on the other. Such investigation can more effectively be conducted by federal and state law enforcement at the direction of the United States Attorney, the Minnesota Attorney General and the Boards of Professional Responsibility in the jurisdictions where the attorneys involved in this apparent scheme are licensed to practice law.
The judge also denied Mr. Cooper's motion to intervene in the case (as his decision rendered it moot) and denied as meritless the motion to disqualify him.
Savor this, from the ending summary of action ordered:
3. The Clerk of Court shall send a copy of this order to the following individuals and entities for the purpose of further investigation:
A. The United States Attorney’s Office for the District of Minnesota. ATTN: John R. Marti, Acting United States Attorney. Address: U.S. Courthouse, 300 S. 4th St., Suite 600, Minneapolis, MN 55415.
B. The Minnesota Attorney General’s Office. ATTN: Lori Swanson, Attorney General. Address: 1400 Bremer Tower, 445 Minnesota St., St. Paul, MN 55101.
C. The Minnesota Lawyers Professional Responsibility Board, Office of Lawyers Professional Responsibility. Address: 1500 Landmark Towers, 345 St. Peter St., St. Paul 55102.
D. The Attorney Registration and Disciplinary Commission of the Supreme Court of Illinois. Address: 130 E. Randolph Dr., Ste. 1500, Chicago, IL 60601-6219.
The wheels turn slowly, friends, but make no mistake, the wheels turn. The wheels are grinding down Team Prenda, and doing so faster and faster every month. With two different federal judges referring the matter to state bars and the U.S. Attorney's office, the probability of bar investigations and federal grand jury investigations approaches certainty.
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