Prenda Law: Prenda, Duffy, And Van Den Hemel Respond to Judge Wright

All of my coverage of the Prenda Law saga is collected here.

Two Prenda posts in a day may seem gratuitous. But I go where PACER leads me.

Late today Heather Rosing — currently counsel for the entity Prenda Law, Prenda principal Paul Duffy, and paralegal Angela Van Den Hemel — filed a brief in response to Judge Wright's latest Order to Show Cause. You may recall that Judge Wright told her she could do so at the April 2, 2013 hearing.

In this post I will review the arguments in the brief and discuss their significance for the fortunes of Prenda Law and its principals. Let me begin with this: Rosing has filed the best brief I have seen from Penda's side during this whole wretched story. Briefs by Prenda's own lawyers responding to accusations of misconduct have been smug, angry, evasive, and self-righteous. Rosing's brief is professional. It makes colorable arguments, and supports them with authority where there is authority to be had. There's no perfect way to tell an angry federal judge he lacks jurisdiction; she strikes a tone that's firm but respectful. It's well written, well organized, and as comprehensive as prudence permits. This is good work.

But what does it say?

The brief is here. It attaches declarations from Raymond Rogers (who assigned the copyrights to AF Holdings), Joshua Chin (who offers expert testimony about Prenda's identification of downloaders), and Brent Berry (who makes alarming claims about Alan Cooper, discussed below). The brief also attaches a Request for Judicial Notice (a legal device asking a court to consider indisputable evidence, like the existence of documents previously filed in court) and Exhibit 1, Exhibit 2, Exhibit 3, Exhibit 4, and Exhibit 5.

I'll review the arguments by subject matter. Rosing divides them — as she should — according to the subjects specified in Judge Wright's Order to Show Cause.

The Fifth Amendment: Rosing acknowledges, as she must, that Duffy and Van Den Hemel invoked the Fifth Amendment and declined to answer questions at the April 2, 2013 hearing. She also notes that while Prenda Law does not enjoy Fifth Amendment rights, Duffy could not be compelled to answer on behalf of Prenda if he invoked. Then Rosing makes a creative argument: in the face of a clear doctrine that courts may consider a litigant's invocation of the Fifth in civil cases, she argues that because Judge Wright threatened imprisonment as a possible consequence, the proceeding was effectively criminal, and therefore her clients' invocation can't be held against them. As a defense attorney I admire the moxie of the argument. But Judge Wright can render it moot by avoiding any use of his contempt power and confining his sanctions to civil ones.

Limits On the Court's Sanctions Authority: Next Rosing reviews the limits of Judge Wright's power under Rule 11, his inherent power, and federal statute, as I discussed here. Rosing points out that Judge Wright has limited power over people and entities that did not appear before him or direct or supervise attorneys before him. This argument is strong as to Van Den Hemel, somewhat weaker as to Duffy (particularly if Judge Wright takes notice of Duffy's nationwide participation in Prenda Law matters), and weakest as to Prenda Law itself.

Critique of the March 11 Hearing: Next Rosing attacks what she sees as defects in the March 11 hearing before Judge Wright. She complains that Morgan Pietz, counsel for the John Doe in one of the cases, was an "improper prosecutor" — but this is only pertinent if Judge Wright was required to treat the hearing as a criminal contempt proceeding triggering the right to an independent prosecutor; otherwise there's no requirement that Pietz be neutral. She complains that Judge Wright considered improper unsworn testimony from Jason Sweet, who spoke up from the gallery in what I called a Perry Mason moment. But that's irrelevant unless Judge Wright relies on what Mr. Sweet said during that brief exchange. She asserts that Judge Wright considered inadmissible evidence, and that she was not permitted to object to it. Leaving aside the analysis of the merits of her objections, the argument is only relevant to the extent Judge Wright considers the evidence in question, and it's not clear he will. She complains that Judge Wright considered evidence outside of the five cases before him and the scope of his pending Order to Show Cause. This argument is weak; the other evidence was pertinent as proof of Prenda Law's overall conduct and as evidence of knowledge and intent of its principals.

Attack on Alan Cooper: With respect to Judge Wright's suggestion that Prenda Law might have forged Alan Cooper's signature on assignments of copyright, Rosing offers multiple arguments. She repeats the standard Prenda Law argument that any misrepresentation is not meaningful because it's undisputed that the companies that assigned copyrights to Prenda Law's clients signed the assignments even if Alan Cooper didn't. In a hint of the Resevoir-Dogs-level bloodletting to come, she implies that the evidence only supports John Steele knowing about any forgery, not Prenda Law or Duffy or Van Den Hemel. She argues that upon learning of Cooper's testimony Duffy immediately filed the "Notice of Allegations" I described before and dismissed pending cases. That, she asserts, shows his good faith.

But those are mundane arguments. Rosing also launches a surprising attack on Alan Cooper himself. She offers the declaration of Brent Berry, an acquaintance of Cooper and Steele, who claims that Cooper knew of his putative position with AF Holdings and asked Cooper "how's my porn company doing?" Berry also claims that Cooper is mentally ill and threatened him, and attaches many disturbing text messages purportedly from Cooper. This, Rosing argues, shows that Cooper's testimony that his identity has been stolen cannot be trusted.

At this point I see no reason to place any trust in claims made by Prenda witnesses. But even if Berry's claims about Cooper are true, they don't exonerate Prenda or its principals. If the claims about Cooper are true, it means that Prenda principals, rather than stealing an identity to serve as the principal of a front company, used a mentally ill caretaker as the putative executive of a front company. "How's my porn company doing?" is not the question of an involved and genuine executive; it's the question of someone used as a front. Berry's declaration is entirely consistent with the theory that Prenda Law was using entities to conceal the financial stake of its lawyers.

The Violation of Judge Wright's Discovery Order: Judge Wright ordered Prenda Law to explain whether it violated his discovery orders when, as evidence demonstrated, it continued to gather the identities of downloaders after Judge Wright ordered a halt to discovery. Here Rosing points the finger at Steele and Hansmeier, pointing out that Brett Gibbs said he reported Judge Wright's order to them, not to Duffy or Van Den Hemel. That argument is somewhat persuasive, at least as to Van Den Hemel. Rosing also argues that because Gibbs, Steele, and Hansmeier are only "of counsel" to Prenda Law, Prenda Law is not responsible for their conduct. That argument is considerably less persuasive given the evidence that Prenda supervised cases across the country.

Investigation Into the Identity of Downloaders: From early in the case, Judge Wright has ruled that Prenda Law's methods of associating downloads to particular individuals through IP matches is unsound. He ordered the litigants to show cause why they shouldn't be sanctioned for initiating cases based on IP matches. Here Rosing devotes a substantial portion of the brief to what amounts to a defense of the entire litigation model, not just to Prenda Law, Duffy, and Van Den Hemel. I will let others critique the defense. Suffice it to say that even if Judge Wright is correct that the IP match is not an adequate basis for a John Doe suit or for discovery into the identity of IP subscribers, the law here is unsettled enough that I think the case for sanctions on this basis is not very strong. Rosing makes a good case that, at least, pursuing discovery or bringing John Doe actions is not objectively unreasonable enough to warrant sanctions. This is dry stuff; the only particularly entertaining part is when she cites the Kinsey report for the proposition that it's reasonable to assume that, given a family using an IP address, the porn downloader is the adolescent male.

Financial Interests: Judge Wright suggested that litigants may be sanctioned for concealing the financial interest of the lawyers in the putative Prenda Law clients. Rosing first argues that there is no evidence that Duffy or Van Den Hemel had any interest themselves or were aware of any interest held by Steele or Hansmeier. Note, here, more cracks in the unity of Prenda Law figures — there's no omerta with this crew. I think that's a difficult argument to make about Duffy in light of the evidence of his involvement in Prenda's nationwide cases, but it's a perfectly persuasive argument as to Van Den Hemel. Next, Rosing tries a rather bold materiality argument certain to agitate Judge Wright. She argues that the only purpose of the disclosure of financial interests is to let judges know when they must recuse themselves, and since Judge Wright didn't recuse himself when he formed the suspicion that the Prenda Law principals have financial interests in their clients, there must be no basis for recusal, and therefore the concealment (if any) is irrelevant. Now there's an in-your-face argument. It's too cute, I think: the definition of materiality is broader than Rosing seems to imagine. There's a perfectly good reason courts and litigants would want to know if attorneys are the owners and concealed principals of their clients — it makes them potential witnesses in the case, which carries its own complications for the lawyers, parties, and court. This is the one argument in Rosing's brief I would not have made under any circumstances.

The Related Case Issue: Judge Wright asserts that Prenda Law should have filed notices of related cases in the Central District of California because the cases involved the same plaintiffs, same attorneys, and same issues. That's certainly arguable. But is failure to do so sanctionable? Rosing attaches an exhibit showing that the Northern District of California declined to treat cases as related under the same circumstances. That suggests that Prenda Law had a colorable basis for not filing a related case notice in Los Angeles. Rosing is right on this narrow issue, I think. (Brett Gibbs, in testifying about this on March 11, was unclear — he suggested that the issue in the Northern District was consolidation, which is something different.)

Failure to Appear: Finally, Rosing argues that Judge Wright should not sanction Van Den Hemel and Duffy for failing to appear at the March 11 hearing. She repeats arguments from her unsuccessful ex parte application: she asserts that Judge Wright lacks jurisdiction over them, and that they received inadequate notice. She also argues that because they made themselves available by phone they should not be penalized for failing to appear in person. Given the evidence before Judge Wright in the form of Prenda's nationwide litigation, the Hansmeier deposition, and Brett Gibbs' testimony, I think the jurisdiction argument is terrible as to Prenda Law, weak as to Duffy, and only so-so as to Van Den Hemel, who was connected to Prenda Law activities reaching into California. The notice issue is not particularly persuasive either — it strains credulity past the breaking point to assert that the entire Prenda team wasn't intimately familiar with what was going on before Judge Wright. As for the argument that it was enough to be available by telephone — well, it's a mitigating factor, but I don't expect it to be persuasive to Judge Wright.

What can we take away from the brief Rosing filed on behalf of Prenda Law, Duffy, and Van Den Hemel?

First, it's clear Rosing is competent and will continue to deliver good representation to them, and is carefully making a record. Their invocation of the Fifth suggests they are, at least, smart enough to take her advice. Second, it's clear that the Prenda Law team no longer presents a unified front. Duffy and Van Den Hemel are now clearly adverse to Steele and Hansmeier. That's no surprise. Third, it's clear that Judge Wright does not have an easy task before him. His powers, as I've discussed before, are limited, and if he wants to make any sanctions stick (as opposed to handing the matter off to state bars or criminal authorities), he's going to have to be careful about making a record.

Stay tuned.

Last 5 posts by Ken White


  1. says

    Duffy and Van Den Hemel are now clearly adverse to Steele and Hansmeier.

    My hypothesis: Since Duffy is obviously a facade, it is possible that he had an agreement with Steele that if things get sour, he will be given a life vest. Duffy is definitely in a better situation that S & H, and he has enough evidence to sink those two if they foolishly decide to take Duffy with them to the bottom.

    The fact that Prenda is now broken into adverse factions is delicious.

  2. Jim Tyre says

    Rosing's use of the Brent Berry Declaration is interesting at a few levels.

    First, it's clearly an out of court statement offered to prove the truth of the matter stated therein, and thus hearsay. Rosing takes others to task for being fast and loose with the rules of evidence, but she doesn't follow them if doing so isn't in her best interest.

    But of more interest is that it's dated February 15, almost a month before the March 11 hearing. Gibbs' attorneys surely knew of it. At that hearing, Brodsky asked the following of Cooper:

    ,blockquote>Q And did you ever tell or ask Mr. Steele in
    18 Mr. Berry's presence how is my porn company doing?
    19 A No, I have not.
    20 Q You sure about that?
    21 A Yes.

    But Brodsky did not introduce the Berry declaration either to prove the truth or to attempt to impeach Cooper. Rosing was at that hearing, but never asked if she could examine Cooper.

  3. Basil Forthrightly says

    The Berry declaration clearly describes Steele using Cooper to operate a "front". The only way Prenda/Duffy benefit from that is if they can divorce themselves from Steele; otherwise, they're party to the scam. This "we partnered with a liar, oops" might work to mitigate (but not eliminate) generic business liability. However, their real problem is that AS ATTORNIES they have a far greater responsibility to know their client and verify the facts of their case.

    Rosing might have succeeded throwing some FUD on the issues being considered for sanction, but it opens a sinkhole beneath the Prenda enterprise.

  4. says

    I was underwhelmed by Rosing's performance in the courtroom, with attempts to state that she had a legal argument to make without just starting the damn argument. But that's easy for me to say from the peanut gallery, since I'm not a practicing attorney and probably couldn't do any better, particularly in front of an unhappy judge.

    The brief, however, more than makes up for that.

    A couple of notes:

    1) With regard to the Fifth Amendment argument, Wright's wording was very precise: "Now, if you say he will not answer those questions, then I will draw whatever inferences I think are reasonable from the facts as I know them." He was not suggesting that he would fault the invocation. Rather, he said that absent further testimony from the Prenda folks, he would have to rely on the facts as he knew them. But at least she's making her clients' position clear.

    2) Completely agree re: Cooper. But the brief seems to ignore the other purportedly purloined personalities, which would seem to establish a pattern and practice on the part of whoever was running this gambit to use people as fronts for these shell entities. To that end, her arguments regarding the certificate of interest are misplaced.

    3) The "of counsel" argument is strange. As I understand it, Rosing seems to be arguing that they were called "of counsel", but lacked the close, ongoing relationship typical of "of counsel" relationships, and therefore Prenda shouldn't be responsible for them, or something. The way I see it, if you hold your attorneys out as "of counsel" — or even as associates — you're responsible for their conduct in that capacity. Full stop. Plus, the California case she cites regarding "of counsel" involved disqualification motions — whether the relationship between counsel would be so close that of course they would be privy to client confidences. That has nothing to do with the legal and ethical responsibility to supervise and be responsible for the conduct of subordinate counsel and non-attorney employees.

  5. Matthew Cline says

    Regarding Alan Cooper and Brent Berry:

    1) When did Berry make that statement? The "how's my porn company doing" thing is referenced in the March 11 transcript, so he made it sometime before then.

    2) I find it interesting that they haven't gotten an affidavit from Steele saying "Yeah, I got my house caretaker to be the AF corporate representative". You think he'd be happy to make such an affidavit… y'know, if was actually true.

    3) Why is it only now that someone involved on the Prenda side of things has said why Alan Cooper is wrong. They've had a while to say either "Cooper the caretaker is the the same person as Cooper the corporate representative" or "Cooper the caretaker is different than Cooper the representative", so why wait so long to get specific?

    3b) Why are they still not explicitly saying "Cooper the caretaker is the the same person as Cooper the corporate representative"? The brief says "Such statements suggest that, contrary to his testimony, Cooper had some knowledge of and involvement with AF Holdings", but nothing more. Is it that, absent a statement from Steele, that Steele is the only one who knows how the Cooper signature got onto the paperwork, so Berry's statement is the only clue they have as to the identity of the real Cooper?

  6. says

    In regards to Joshua Chin's expert testimony other than some specific wording that should instead state "can observe the approximate percentile size" [emphasis to be inserted] at para16(b) it is quite well presented. EXCEPT for paragraphs 17, 18, and 20 which are basically unmitigated non-authenticated nor in any way reliable hearsay which Mr Chin should know better than to place within a testimony of this nature.

  7. Delvan Neville says

    A few issues. Section 16 misses that the SHA! hash used for a torrent describes a collection of files, not a single file, though most of the hashes Prenda had listed in their examples were for torrents that had only a single file (and, strangely, no *.nfo or *.txt describing the contents of the video, about half of the videos were not named such that you would know they were the same as the protected work). And while a member, by default, would be a distributor and receiver of the files in the torrent, this is not obligatory behavior, and one may monitor the swarm while neither up- nor downloading the files in the torrent.

    The download-status-awareness is only for those participants that send a bitfield during the handshake process with the monitor or send BT_HAVE updates to the monitor. This is true for many, but not all members in the Prenda swarms I've examined.

  8. Delvan Neville says

    That should be SHA1, not SHA!. Though "sha-BANG!" is a much cooler name for that hash.

  9. Perfect Stranger says

    I have no schooling in law…but I am immensely enjoying the commentary and explanations to each move in the courtroom.

    Do I understand correctly, that at this point:

    (1), the Prenda Law and related company lawsuit factories are pretty much knackered ?

    (2) this is now damage control at a personal (or individual) level ?

  10. Matthew Cline says

    Can pleading the Fifth be used against a lawyer in bar proceedings? That is, could it count against them if there were hearings to get them disbarred?

  11. says

    @Delvan Neville – I will now for ever more think Sha-BANG whenever I use SHA1 especially if using Blowfish as well *bazinga!* :)

    I wasn't aware (or had investigated) the Prenda examples had only one file without description. Well that leads into a whole new area of probabilities that maybe some non-standard (as much as you can call what the standard is within the torrent community) seeding has been undertaken at the original upload of the torrent file itself which though in itself isn't a bright red flag by itself is a nice piece of the damning puzzle I wasn't aware of.

  12. DonaldB says

    I don't see this indicating that the Prenda crew is falling apart, each trying to save their own skin. Quite the opposite.

    First, we still don't know much about Prenda. Angela vDH is merely an employee, who is only doing what she is told. Nothing at all to do with the case, and the court shouldn't have personal jurisdiction over her.

    Steele, according to his Florida statement, is unemployed. He has no current relationship to Prenda. He'll sometimes show up in a courtroom, apparently having gone into the wrong door by mistake and just around staying to listen.

    Lutz used to a paralegal or bill collector for someone, but he is now just a 1099 contractor for an unrelated company. Perhaps it's based on Nevada, but he can't really read the signature on his checks.

    Paul H. is a curious case. He is currently holding himself out as Prenda's client, not one of the partners or employees (despite much evidence to the contrary). He has something to do with the shell companies such as AF Holdings. He's been designated the Person Most Knowledgeable for a deposition. But he's not an officer, doesn't know who is, doesn't know about the company finances, isn't paid by them, etc. He does know the name of the clerk in the tax dodge little country that filed the paperwork, but doesn't know who told her to do so.

    That leave Duffy. Perhaps he has heard of Prenda. But he's not saying. And one has identified him as directing anyone to do anything.

    So, as best I can tell, we still haven't identified anyone that has much of anything to do with the current case.

    Oh, except for Gibbs. He masterminded the nationwide filings. It was his email address used for contact information. And his name stamp used on many letters and filings. He forgot to tell anyone about the quashed subpoena. And misunderstood when he was told that it had been handled.

    And still no one knows where the checks were sent, where the money was held, and who has it now. And no one sees a legal obligation to reveal that information.

  13. Austin says

    1) Any insight as to why she didn't file a brief with the court prior to the April 2 hearing? Seems to this layperson many of these arguments could've easily been made after the March 11 hearing.
    2) It's pleasing to see your praise for (or at least appreciation of) Ms. Rosing both in your write-up of the April 2 hearing and this article. It doesn't surprise me in the least you would appreciate well-made opposing arguments, but after the repeated hilarity of the Carreons/CrazyProSes/Goofuses vs Randazzas/Levys/Gallants it's a nice change of pace.
    3) Two Prenda posts on the same day just validates what would otherwise be an obsessive checking of my RSS feed looking for another Prenda story; so thanks for that!

  14. Delvan Neville says

    Huh, so is Livewire Holdings LLC one of the client companies or one of the lawfirms? Because 0:12-cv-02681-RHK-JJG lists Michael Dugas, Livewire Holdings LLC as the attorney representing the plantiff Quad Int'l., Inc. Document 1-2 (the civil coversheet) lists him as Michael Dugas, Alpha Law Firm, LLC.

    Interestingly, one of the seeders I saw for the hash that case was based on (for Siri – Knock my socks off) geolocates on to within 20 miles of the florida address they list for Quad Int'l…

  15. ozzlander says

    i posted earlier but i think it got snaged as spam so reposting:

    did anybody else notice the very similar slang and misspellings used in the text messages by both parties. I don't want to say the same person wrote both sides of the conversation but the misspellings make it seem that way epically using shi instead of she constantly by both parties is odd.

  16. OneIsOneAndOneIsFree says

    You mention breaks amongst the various people at Prenda.

    Who exactly is Heather Rosing representing? I remember it being mentioned that Paul Hansemeier and Steele had their own attorneys at the last hearing but it sounds like Heather Rosing if the one spearheading the defense efforts. If the Prenda Law team all start tearing into each other whose interests is she supposed to prioritize?

  17. DonaldB says just posted a document describing Undefined Beneficiary Trusts AKA Purpose Trusts.

    These are trusts that are pretty much unique to Nevis. They are considered invalid elsewhere.

    Basically they are trusts which don't specify a beneficiary, but rather a purpose. Errrmmm, a Purpose.

    They are used as tax dodges, to hide the true control of a company or to make an entity judgement proof. In this case, probably all three.

    Since there is no specified beneficiary, no one has to report having control of the offshore account, or that they will be getting funds from it. Or anything about the trust.

    Since any distributions of funds isn't going to a specific person, but rather to fulfill a 'Purpose', it's a way to hide money from a judgement. Imagine the 'Purpose' is "to fund Prenda or its successors to pursue copyright shakedowns". If Prenda gets a judgement against it, it can just dissolve. The trust isn't an asset, it need not be listed as such, and it won't pay out money for the judgement because it's not the Purpose. But when Duffy et al set up shop elsewhere, the trust will resume sending money.

    This points out why they won't turn on each other: if they keep quiet, they'll be paid from the money in the trust. There isn't anything the U.S. courts can do. They probably can't even find the trust's purpose, account balance or payouts.

  18. Nicholas Weaver says

    Delvan Neville: Actually looking at the IP of the seeder might be interesting. Is it a residential or non-residential source? Non-residential seeders are of particular interest, especially if long-duration.

  19. Jordan says

    @Delvan Neville, @G Thompson : a sha-bang is "#!", and is a magic number used to begin scripts in *nix environments.

    On-topic: Guys, the phrase is "head in the sand", not "head up your ass". The former is for when you're hiding and hoping that a Federal judge will just go away, the latter is for….screw it, in this case they mean the same thing.

    "This isn't the same Alan Cooper" -> "No we won't produce Alan Cooper" -> "It is the same Alan Cooper, but he's crazy"? Riiiight.

  20. Another anonymous NAL says

    Two Prenda updates today! Two! *claps hands* Squeeee!
    Okay, got that out of my system.

    Someday the whole Schroedinger's Cooper problem will get resolved.

    @DonaldB: What happens to a Nevis Purpose Trust once the IRS takes an interest, since they're "considered invalid elsewhere"? Also, didn't Steele, sometime earlier in this whole mess, state in a deposition that money had NOT been repatriated? If he did, well…oopsie.

  21. James says

    Regarding the Nevis matter . . . the IRS has no jurisdiction there. Often the IRS can demand details from the foreign government under the terms of the OECD model tax treaty (which is the basis for nearly all treaties), but the US has no treaty with Nevis so there is no information sharing obligation the US can assert.

    HOWEVER, that does not absolve US persons, legal or natural, from their disclosure requirements. If money is coming from Nevis into a US entity, be it Prenda Law's accounts or the personal bank accounts of the individuals involved, the IRS can ask lots of questions. While the IRS does not like tax haven entities (perhaps the understatement of the century) there is precious little they can do about them so long as the taxpayers dot the "i"s and cross the "t"s, and ultimately Uncle Sam can collect the tax due even if they have to wait until it becomes an estate tax matter. But, and this is a big "but", if the disclosures are not proper then all bets are off and the IRS can have a field day prosecuting the bad boys in both civil and criminal courts.

  22. Pro Hac Vice says

    Concerning the hashes, it should be simple to search for the hash and see who all is actually sharing them and identify honeypots who have remarkable interest only in Prenda porn. And possibly to establish that nobody else really cares about it. Hashes make wonderful queries, because they're long and unique and so you shouldn't get anything but pages with the torrent in question. The only rub will be if people have reuploaded it somewhere mixed with other files, changing the hash.

    > Why are they still not explicitly saying "Cooper the caretaker is the the same person as Cooper the corporate representative"? The brief says "Such statements suggest that, contrary to his testimony, Cooper had some knowledge of and involvement with AF Holdings", but nothing more.

    I think there was prior discussion about attorneys representing other attorneys in troubles like this where it was mentioned that they get in trouble if they simply parrot their clients' statements without fact-checking.

  23. Jay says

    @Jim Tyre

    The Brent Berry declaration actually isn't hearsay; it's a sworn statement.

  24. Undertheradar76 says

    It may have nothing to do with The Prendapus, but this calls to mind the recent work of the International Consortium of Investigative Journalists with a massive leak of offshore account info- Secret Files Expose Offshore's Global Impact (Huffington Post 4/4/13),

    Wouldn't it be radtastic if some familiar names were floating around in there?

    Maybe Prenda read this article on hiring nominee directors by Panama Offshore Worldwide; "it doesn't matter who the front man for your corporation is, as long as it's not you."

  25. Nicholas Weaver says

    Why are they still not explicitly saying "Cooper the caretaker is the the same person as Cooper the corporate representative"?

    I think its because "Cooper the corporate representative" requires that Cooper be competent and actually able to represent AF Holdings. Which even if the statement by Cooper's friend is true, it is clearly not the case and foolish to argue such.

    I think Duffy's attorney realizes that: Cooper is either a patsy for Steele's shell OR a forgery by Steele.

    In either case, its bad: Steele is clearly behaving badly here, possibly criminally. And either story plays bad for Steele but actually plays OK for Duffy if Duffy can convincingly pull a Sgt. Schultz defense.

    So I think this is putting in the groundwork to throw Steele under the bus in order to save Duffy's law license. Its pretty clear at this point that Wright is going to:

    a) Refer others to this (and let them do the hard lifting)


    b) Allow an award of attorneys fees and some extra perhaps for good measure.

    But, lets face it, B is chicken feed. Say $200K. But thats worst-case even, and ideally Rosing can use this to try to make sure that its Steele and Hansmeier are the ones who pay such fees. After all, its Steele who has been claiming $10K/day from this little racket. So he'd forgoe 20 days revenue. Yawn.

    Its A that is the concern: Actual criminal charges are unlikely but of concern, but bar complaints are certain at this point. Duffy's law license is probably worth $100k/year to him, which means its a couple of million in lifetime earning Duffy would lose if disbarred.

    And at this point, Duffy's best defense for the inevitable bar hearing is "I know nothing", and its a defense I (IANAL) think that might very well get Duffy off with a few months suspension. But to do that, Steele has to take a dive for it.

  26. Josh C. says

    I'm fairly bothered by the idea that the Prendanistas could be ordered to show up to defend against criminal charges, only to be told later that they're actually facing civil actions.
    Sure they're scum, and likely deserve whatever they get. But that's no reason to pervert our justice system to make sure they get it.

    Should I be okay with this? I'm ignorant, but it looks like this is becoming an inquisition, with 'charges' to be announced after the fact. Moreover, since the same proceeding has direct criminal and civil implications, shouldn't the accused be afforded the stronger of the criminal or civil rights protections, not the weaker?

  27. rand says

    So despite this filing and the arguments therein, is it still safe to assume that Prenda "may be standing" but is still dead?

    I'd hate to see all this go to waste and watch them continue pulling this crap on more people.

  28. Trebuchet says

    @Donald B:

    That leave Duffy. Perhaps he has heard of Prenda. But he's not saying. And one has identified him as directing anyone to do anything.

    According to one of Prenda's two "official" sites, Duffy is the Founding Partner of Prenda Law:

    (The other site is

    If you haven't already, be sure to visit both sites for the lulz. Lots of lovely stock photos of "our attorneys" and a really hilarious blog at the .com version.

  29. Trebuchet says

    Dang, messed up the blockquotes again. Oh well, I forgot to mention that it's absolutely LOVELY to see that the bus-throwing-under has started!

  30. Charles Buckley says

    If Cooper is legally connected to AF Holdings, couldn't he "cooperate" with the IRS and US government and give permission to share data?

    I understand why he's avoiding that. His stance is that he has nothing to do with AF Holdings. But, if he were to request this, what would Prenda Law's counterargument be to stop a full discovery? They could either argue a) he has no legal standing or b) he has legal standing, which is what they have been saying to date, in which case he has the authority to provide any documentation.

  31. Hasdrubal says

    Josh C: The Prenda people weren't called in for hearings on anything criminal, the hearings were to investigate their conduct in cases before Judge Wright. That's a civil matter, and completely within the purview of the court since the court has the responsibility to police its own rules. The fact that their behavior in those cases could lead to potential criminal prosecution is tangental to what those hearings were about and Judge Wright couldn't sanction them for anything criminal as a result of them. (Except maybe criminal contempt as a result of their actions related to the hearings, but I think even that would require a special hearing.)

    They can suffer civil penalties, but they cannot suffer any direct criminal penalties. But, if the judge found evidence of criminal conduct, he is free to refer that to a prosecutor much in the same way a health inspector can call the police if he walks into a restaurant and finds a cock fighting ring. There's a lot of really bad fallout from this, but anything criminal will receive due process. The hearings to show cause were purely civil and purely related to the business of the court in cases pending before Judge Wright.

  32. Jim Tyre says

    @Jim Tyre

    The Brent Berry declaration actually isn't hearsay; it's a sworn statement.

    Yes, it is a sworn statement. But it's still hearsay. Without getting into the billion nuances of the hearsay rule, the general rule is that any out of court statement offered to prove the truth of the matter stated is hearsay. That applies especially where the statement is that of a non-party witness.

    There are certain situations where courts will allow sworn hearsay statements, for example, on a preliminary injunction application or on a summary judgment motion. However, there is one key requirement that applies here: the declarant or the affiant must subject himself to the jurisdiction of the court in which the statement is being offered. (Jurisdiction in the specific sense of being subject to perjury proceedings, not in the more general sense of personal jurisdiction.)

    Here's Berry's affidavit appears to have been prepared for use in some other court proceeding. It says he was duly sworn, but not under what laws. It's notarized by a Minnesota notary (as to be expected). The affidavit is not self-proving that Berry was sworn either under the laws of the State of California or under the laws of the United States (meaning federal law, not the law of any of the fifty states).

    Whether it would still be hearsay if prepared specifically for use in this case and properly sworn to by Berry is hypothetical. This affidavit fails a basic requirement, and thus is hearsay on that basis alone.

  33. Ygolonac says

    Awww, I'm late to the "Who is John Galt ALan Cooper?" party.

    What's with the texts in the Berry statement, though? Did they stick the phone into a copier or something? IANAL, nor do I use cellphones (piss away all my cash elsewhere), but can't you just dump the logs either as text to a computer for printing, or email them for same?

    Of course, maaaaaaybe they *really really* don't want any poking around into that phone's logs/data, for some totally innoc… *hak* *koff* excuse me whilst I choke on my tongue there.

  34. En Passant says

    Ken wrote in OP:

    Let me begin with this: Rosing has filed the best brief I have seen from Penda's side during this whole wretched story.

    I would expect her performance to be as excellent as possible even under these circumstances. She is a member of the State Bar of California Board of Governors, and holds an SBC specialty certification in legal malpractice law.

  35. Another anonymous NAL says

    At any rate, Rosing's my latest feminist hero. She's clearly going all out to defend the clients she's agreed to defend. Her situation kinda reminds me of an old samurai koan: "Who is the better practitioner of bushido–a samurai who serves a good lord, or the samurai who serves an evil one?"

    Huh. I just quoted "Usagi Yojimbo" in an attempt to make sense of the Prenda Law proceedings. Yeah, I went there.

  36. David M. Nieporent says

    I'm a lot less moved by the Berry affidavit than you are. First, the "How's my porn company doing" is undated; Berry merely remembers it being said at one point. Second, it sounds jocular in tone. Who knows what it's a reference to? Berry doesn't even pretend he can put it in context. Third, at most it would exonerate Steele from the identity theft charge; it wouldn't exonerate Steele from the charge that Cooper is yet another straw figure designed to hide the real interest in the company. But it's also consistent with the scenario in which Steele puts Cooper's name on the paperwork without permission, Cooper finds out, Steele assures him it's no big deal, and Cooper trusts him and lets it be, other than jokingly asking about it.

    As for the "disturbing" text messages, really? There's nothing remotely like a smoking gun in there. The shooting him in the foot line is in response to a joking statement, "please don't shoot me lol." Response: I wouldn't do that; well, maybe in the foot. It's not a threat in context. So he texts like he's drunk (which he may have been). Yeah, he says he wants (presumably) psychotropic medicine. So what? Half the people in the country are on SSRIs.

  37. jbs says

    It may not matter (first/middle name perhaps), but here there's a Brent Berry vs Grant in Gibbs's hearing (Cooper is asked if he knows a Grant Berry).

  38. says


    Third, at most it would exonerate Steele from the identity theft charge; it wouldn't exonerate Steele from the charge that Cooper is yet another straw figure designed to hide the real interest in the company.

    I could have sworn I pointed that out in the next paragraph.

  39. Kevin says

    Twist: Brent Berry is actually the Keyser Soze-esque mastermind behind Prenda, and the real goal is just to raise enough money to buy himself a new iphone with an un-cracked screen.

    If only Apple had more customer-friendly warranty policies, all of this could have been avoided.

  40. JLA Girl says

    re: Brent Berry's sworn statement

    I find it interesting that in this statement John Steele is always "Mr. Steele" but Alan Cooper is "Alan." Nice little lawyerly trick of using those names to reinforce the message: Mr. Steele, he's an important man. Alan? Oh no, he's just 'crazy Alan'.

    This is why we don't use first names in court and in statements. I'm not sure how it works in the States, but up north of the border, you'll be wrist slapped by the judge for doing this. It's inappropriate unless you've got a minor or several family members with the same surname.

  41. JLA Girl says

    * I take it back. "Mr. Steele" is referred to as John a whole two times.

    {*sarcam font engaged*} That makes it all better.

  42. Austin says

    @Another anonymous NAL:

    At any rate, Rosing's my latest feminist hero. She's clearly going all out to defend the clients she's agreed to defend.

    I agree. And while that may be expected, it's rewarding both to see people recognize the effort and professionalism and to see how things unfold in the adversarial process when one side isn't Charles Carreon and/or crazy.
    While I'm sure her own sense of duty motivates her to provide appropriately zealous representation, I imagine she will reap some reward for her efforts. I'm no marketing expert, but it seems likely that Greenfield's "Do good work and people will notice" will play nicely with seemingly all coverage of Prendageddon boiling down to "Go read what Ken wrote." Even with what seems to be an established reputation, Ken's remarking in two posts on her ability to represent difficult clients certainly can't hurt.
    I'm sure she is as assertive and competent for each of her clients, but it's nice to see the circumstances align to provide the good things happening to good people doing a good job.

  43. Walt K says

    @ozzlander, from context, it appears "shi" is not a mispelling of "she" but a name, or short for a name.

  44. C. Ellis says

    This has been an awesome series of posts. Get a scriptwriter and turn it into a movie.

  45. Tim Breen says

    Since this filing is only in defense of Duffy, van Den Hemel and Prenda itself, can we expect similar filings from the attorneys of Steele et al?

  46. Josh C. says

    @Hasdrubal: That was how I understood the situation too. But then, Ken wrote "Then Rosing makes a creative argument: in the face of a clear doctrine that courts may consider a litigant's invocation of the Fifth in civil cases, she argues that because Judge Wright threatened imprisonment as a possible consequence, the proceeding was effectively criminal, and therefore her clients' invocation can't be held against them."
    I read that as a sufficiently persuasive argument that this is criminal to make it worth considering. Unfortunately, moments later he says:
    "Judge Wright can render it moot by avoiding any use of his contempt power and confining his sanctions to civil ones."
    I.e., Judge Wright can decide after the fact whether this is a civil or criminal proceeding. Whether or not that power would be abused in this case, the fact that he has that option seems inherently abusive.

  47. James II says

    To build on what James said earlier, it is quite possible that any individual with a "financial interest in, or signature or other authority over" a Nevis "purpose" trust has a reporting requirement under the FBAR rules. While generally a trust is not per se considered to be a reportable "financial interest," a U.S. person is considered to have a financial interest in any account in which the owner of record or holder of legal title is a trust in which the U.S. person either has a present beneficial interest of more than 50% or from which such person receives more than 50% of the current income.

    Further, the FBAR rules also contain an anti-avoidance rule that provides that "A United States person that causes an entity, including but not limited to a corporation, partnership, or trust, to be created for a purpose of evading this section shall have a financial interest in any bank, securities, or other financial account in a foreign country for which the entity is the owner of record or holder of legal title." See
    31 CFR § 1010.350(e)(2), (3).

    Depending on the circumstances, there are a variety of penalties, including criminal, that may be applicable for failure to comply with these rules. See 1.6038D-8T(f)(2).

    See, e.g.,

    I note, for no particular reason, that the IRS has determined that the whistleblower award provided for in IRC 7623 does not allow awards for information leading to FBAR penalties. This does not mean, however, that justice is not its own reward.

  48. Hasdrubal says

    John C: That's not how I read it. I thought Rosing's argument boiled down to something like "Judge Wright mentioned fraud, which is criminal. Because something criminal was mentioned, my clients are taking the Fifth to avoid saying anything that would be incriminating." Which would still be consistent with a civil issue that could result in information used in future criminal proceedings.

    Remember that criminal contempt was always a possibility. But criminal contempt would require further hearings, the judge couldn't just issue a conviction. Anything said at the April 2 hearing would at best lead to further inquiry that Judge Wright might not even preside over. (Does a judge who brings a criminal contempt charge adjudicate that charge?)

    So, I figured what Ken meant was that, it's a weaksauce argument and the judge can formulate his ruling so it will be eliminated as even a possible argument if they appeal.

    From the post on what Judge Wright can do:

    Moreover, invocation of the contempt power requires more due process than invocation of the sanction power. A judge may summarily invoke the contempt power summarily for direct conduct that appears immediately before him or her — as in the case of an attorney who swears at the judge in court. Otherwise, the judge invoking criminal contempt power over indirect conduct outside of court must give notice, an independent prosecutor, notice of the charges, counsel, and the right to confront witnesses. Invocation of the civil contempt power for indirect conduct outside of court requires only notice and an opportunity to be heard — though in some cases, where extremely complex factfinding is necessary, it may require procedures more like criminal contempt.

  49. Sydney says

    Wasn't Guantanamo created for exactly these type of people? Send them all there for a few years.

  50. says

    @Delvan Neville –

    Quick question: is it possible to identify the seeder if they are no longer actively in the swarm? And as follow up, is there someone who has identified some/most/all of the seeders in the myriad Prenda cases?

  51. Austin says

    @Hasdrubal: I read it the way you did. Particularly given Judge Wright's statement "I am looking for facts. I really am," it seems like there's a difference between giving someone an chance to demonstrate your current thoughts are wrong, and shouting "J'accuse!". Even if you're angry when you afford them that chance.

    On the other hand, from the same post you quoted, Ken said:

    Contempt is complicated…..Often, it's not perfectly clear whether a judge is invoking civil contempt or criminal contempt.

    I realize Ken was talking about a judge invoking contempt and not simply calling a hearing; however, on pages 9 and 13 of Rosing's filing she cites an authority that suggests (to this layperson — IANAL) that both the March 11 and April 2 hearings were unavoidably more than simply OSC hearings because Wright was pursuing the issue sua sponte. Omitting the citations, she writes:

    And those issues are particularly significant given that the court initiated the proceedings. Importantly, a sua sponte show cause order deprives a lawyer against whom it is directed of the mandatory twenty-one day “safe harbor” provision provided by the 1993 amendments to Rule 11. In such circumstances, a court is
    obliged to use extra care in imposing sanctions on offending lawyers. As such, the Advisory Committee contemplated that a sua sponte show cause order would only be used “in situations that are akin to a contempt of court.”

    It still seems to me Judge Wright was simply using the hearing to try and determine the facts. But given the way Pietz comes across in the transcript from March 11, it's easy to understand why Ms. Rosing refers to characterizes him as a "prosecutor". If Judge Wright's acting sua sponte automatically makes it "akin to a contempt" proceeding, given the large role Pietz had in structuring the questioning, it's easy to imagine Ms. Rosing thing that if it looks like a duck, and quacks like a duck, it might well be a …. something ending with or else their goose would be cooked?

  52. Austin says

    Should've been "why Ms. Rosing refers to characterizes him as" and "imagine Ms. Rosing thinking". My apologies, I'll edit more thoroughly in the future.

  53. DonaldB says

    I suspect that a Nevis trust is an insider trick. Steele or Duffy must have thought themselves "the smartest guys in the room" when they learned about it and saw the implications.

    After setting up a Defined Purpose trust, it's essentially set in motion with no further control. So you can claim that you have no financial interest in or control over it. You can make a colorable claim that the Trustee (who is well paid to follow directions but cannot deviate from the Purpose) is the sole person involved.

    Which is very close to what Paul H. said in his deposition. Even though he almost certainly knew who set it up, what the Purpose was, and how money was paid out. Like a watch with its case closed, you might be able to make a near certain guess as to what is happening, but you can claim to not know for certain.

    I'm guessing part of the cleverness is to write the original Purpose so that there is a mechanism to modify the purpose. But if you are "clever", you can write it in such as way to have a pretense that you do not really have control.

    BTW, for those that don't get the phrase "the smartest guys in the room", it means confusing lack of scruples with being clever. It's well known as the title of a book about Enron management. They thought themselves smarter than everyone else, extracting money by putting a complex facade over the acts and claiming it wasn't fraud. Pretty much like taking out three first mortgages on the same property, and using the money to buy "sure thing" stock options. Yes, you are the first one to think of that and must be the smartest guy in the room.

  54. Delvan Neville says

    @Jordan: I always spoke #! as hash-bang.

    @Nicholas Weaver: That one is a residential IP. There's a lot of interesting things that were going on, but I'm saving the good stuff for when there's a criminal prosecutor for me to chat with.

    @Duncan: If they're not in the swarm anymore, not really. You could record if the suspect IP is still listed on any trackers, which can happen if they didn't close their client gracefully, but there's software out there meant for cheating the tit-for-tat nature of bittorrent by getting false data up on the tracker about how much said IP has been sharing. Being listed as a seeder on the tracker doesn't necessarily mean that peer really is a seeder. Of course, if there are some Does out there who happened to be the person using the torrent, and the had logging turned on (and still have their logs) then there'd be an opportunity after the fact that way, yes.

    I'm the only one I know of who has publicly mentioned research the Prenda-related torrents, other than Graham Syfert. They're still only involved in civil cases, and as I understand it I (as a non-party) can't just jump into the case and start pointing fingers.

  55. James II says

    @DonaldB: I'm not so sure that the best form of karmic justice for these guys right now wouldn't be a big fat juicy IRS audit. I'm sure the agent would be happy to hear all about who does and does not control the Nevis trust right after they explain the 900 unreported $9,999 wire transfers from those Tax Haven banks. I am, of course, exaggerating to prove a point, which is that, in my experience the IRS has both the resources and the dogged determination to wreak havoc on your finances (and your life) if they think you are hiding something, regardless of how clever you think you are.

  56. Frankzzz says

    My main question from the April 2nd hearing still stands:
    when can we expect an order from Judge Wright?

  57. James says

    If the IRS really wanted to be a pain in the butt (and we know that could NEVER happen) they would go after Prenda et al AND the parties that settled without withholding the IRS' vig. How does that work? Well since there is no tax treaty with Nevis the full withholding rate on passive income send abroad applies (30%). If the settlement was for expropriation of intellectual property then the payment is in lieu of royalties and hence is passive in nature. The defendants could owe Uncle some more money!

    Even if they did withhold, to add insult to injury, when the money flow back from the trust then Prenda et al would have to pay the full US tax and would not get a credit for the withholding. The US gives a foreign tax credit for any taxes already paid, but the 30% withholding is not a foreign tax, it is a US tax, and is therefore not creditable as a number of taxpayers have found to their dismay.

  58. Kat says

    I'm refreshed by Rosing's declaration. At least someone working for Prenda and/or affiliates is able to do the job right (enough, anyway–I'm not sure about some of the things in the declaration, but at least she is trying even if what she is trying is risky), and I like that she is giving them a good defense. Even when I feel that someone really deserves to go to jail/get punished, I don't like it when all the lawyers involved are gibbering incompetents. I like to at least feel good about *some* parts of the justice system. ;)

  59. says

    So at what point will the judge turn this over to the US Attorney so that they can use the proper forensic tools on these tools?

    If they can prove that Prenda was pirating their own works, then these clowns can go to jail, don't pass Go, don't collect $200.

  60. DonaldB says

    @James II: Who should have been withholding?

    Prenda Law just forwarded the money to the client e.g. AF Holdings.

    AFHoldings is a Nevis entity. The only person involved is the Nevis-based trustee. According to Paul H's deposition, they didn't have any U.S. employees. Everyone worked gratis for the client. Except when that wasn't credible, and then they worked on a 1099 basis with the checks coming from Nevada. Area 51 I believe.

    If any withholding was skipped, it was an understandable omission of the Nevis based trustee… to notify the payer of their obligation under U.S. tax law (which the Nevis-based trustee obviously wouldn't know as well as a U.S. person).

    Don't be distracted by the lawsuit being filed in the U.S., with the payment being sent to a U.S. address.

  61. doedoh says

    While it is certainly interesting to see such a impassioned defense for what, in my opinion are scum lawyers, and fully conceding the point that every one deserves a strong defense, it is disheartening to think that (ALLEGEDLY) the funds for their defense are coming from extorted John and Jane Does. If not directly, than as a result of their practice.

    That being said, what is the possibility that Prenda gets away from this unscathed in terms of sanctions?

    And if they do avoid sanctions, referral for criminal investigation, etc., will the harm they've already done to their reputation as the previous post suggested, prevent further attempts at litigating these types of cases in the future?

  62. Delvan Neville says

    Well, since you won't be blogging about it, I went ahead and pulled it from PACER myself, his statement is here. I'll link to the exhibits in separate comments so this doesn't get caught up inside the spam filter.

  63. Delvan Neville says

    Finally, this is exhibit B which is a declaration by Mr. Gibbs from the Sunlust Pictures v. Tuan Nguyen case. I could be wrong on this, but I think this is the same case that the Abbot and Costello "which lawyer is on first" shenanigans came from.

  64. Anonymous says

    I'd also like to throw in my complements for Rosing. I say this having watched this story unfold for a long time, having nothing but contempt for everyone involved in their schemes, and wanting to see them all in lots of trouble. But I appreciate the fact that for the first time in a Prenda case someone on the plaintiff's side is actually litigating. She is a huge step up from Prenda's usual copy-and-pasted, lowest possible effort garbage, not to mention the pointless non-sequitor whining and crocodile tears we have all come to love. I also appreciate that she had some fight at both hearings, while the other Prenda people's attorneys just let themselves get steamrolled by Wright. Even defending people I despise she makes me proud of the adversarial system.

    That said, I can't help but have the simultaneous reaction that this is a bunch of pathetic, cowardly, evasive bullshit in which she basically tries to argue that her client doesn't run his own law firm. I get that the legal profession values argument over substance, and there is tremendous resistance to holding lawyers responsible for their actions, no matter how malicious or incompetent, but for the love of God! Reading this brief I would never suspect that Duffy owns and runs Prenda Law, Inc. that it is the successor firm to Steele | Hansmeier, or that Duffy and Steele where good friends from law school.

    If the allegations regarding Alan Cooper, Salt Marsh, pecuniary interests, etc. are true, even if Duffy had nothing to do with running his own law firm, and is able to demonstrate plausible deniability for the shenanigans, why in the world should we allow an officer of the court who is so negligent and incompetent to keep his law license? This guy just happens to run a law firm that happens to be defrauding federal courts on a nationwide scale, and US law is supposed to be OK with this guy practicing law?

    I'll throw out a few interesting bits, because I believe at this point, based Rosing noting Prenda's incorporation date in her brief, plus a statement in an affidavit of John Steele that talks about when Duffy "opened Prenda Law, Inc.," that they are going to be making the argument that Prenda was not in fact the same firm as Steele | Hansmeier, even though it has the same name, address, phone number, computers, lawyers and continued litigating all of their cases.

    I am curious what the actual lawyers here think of this document that Prenda filed when they took over for Steele | Hansmeier. A notice of firm name change:

    This document specifically uses the language "Plaintiff’s counsel’s law firm has changed names from 'Steele | Hansmeier PLLC' to 'Prenda Law Inc.'" My question is, does that imply, from a legal standpoint, that it was literally the same law firm and it changed names, or can a "notice of firm name change" also mean that the law firm changed, which of course would mean that the name of the plaintiff's law firm would be changing by definition?

    Then there is this affidavit of John Steele, from the Florida case before Judge Mary Scriven that produced the comedy gold transcript of Lutz failing miserably to pretend to be a corporate representative while Steele gets a few questions tossed his way (although not under oath unfortunately).

    Here Steele appears to be carefully making statements that allow him to claim that Prenda is not the same firm that was Steele Hansmeier, although I would not be surprised if they have made contradictory statements in other filings, or perhaps Steele has even publicly stated that he "sold" Steele | Hansmeier to Duffy, before he realized it might be convenient to claim otherwise. Like many of their efforts, it would not surprise me if Steele | Hansmeier and Prenda have been different firms and not depending on what was convenient, phase of the moon, etc.

    In any case, Steele's affidavit makes a great contrast to Gibbs testimony in the March 11 hearing. Here we see Steele saying more or less that he has nothing to do with the direction of Prenda's activities, just works on a few IL cases, which contradicts Gibbs testimony and may also create some trouble for Rosing as she tries to establish that Duffy does not run his own law firm.

    Steele also states that "Paul Duffy is a good friend of mine that I have known since law school." This statement buggers belief given the many years between their graduations, but if true it too interferes with Rosing's attempt to make it sound like Steele is some rogue lawyer Duffy had no suspicions about even as Steele was allowed to run his law firm into the ground.

    Obviously, Steele's credibility is nonexistent. However, the constantly conflicting claims create more and more questions, while Rosing's clients' unwillingness to answer questions, even as they dodge responsibility for all the nasty stuff we have questions about, isn't helping. Trying to use creative legal obfuscation instead of stating facts to set the record straight is awfully transparent and only makes her clients (at least Duffy and Prenda) look more suspicious. Wright has already said he sees through it, but I guess attorneys can't help themselves (and it is their job).

    If they are going to play the game that Prenda law is not the same firm as Steele | Hansmeier, it's too bad Gibbs was not asked more detailed questions about the "change of ownership" when they had him on the stand. Gibbs was questioned about his entire tenure at Steele Law Firm, PLLC.->Steele | Hansmeier, PLLC->Prenda Law, Inc. and never made any distinctions, it was all as if he were working for the same firm, and he does say "They told me Prenda Law was now taking over the business" which seems to imply at least a merger or something, rather than the immaculate conception later implied by Steele and Rosing when it became convenient. I also raises tons of questions about Duffy's motivation for buying Steele | Hansmeier, or their caseload, or whatever, what he was actually doing so that he managed to be asleep at the wheel when things turned out this badly, etc., etc.

    I wouldn't expect Gibbs to be privy to the details of the transaction, but the information we have certainly makes it difficult to draw a real distinction between these two entities, so if Rosing is trying to set up an argument that Duffy bought the caseload sight unseen and was shocked (shocked!) when he finally realized his good friend that he really has nothing to do with (and who doesn't really work at his firm) had tricked him… Well… I guess it'll be fun to see prosecutors and the IRS sort that one out.

  65. says

    @Delvan. Yes, exactly: Gibbs's declaration was one of four filed in response to the accusations that Sunlust's Weber's initial affidavit was not genuine (to put it mildly.)

  66. Delvan Neville says

    Page 1 lines 12-18 tries to argue that it isn't relevant whether fraud upon the court is reasonable, only whether it is contemptuous. IANAL, but that sounds like contempt to me. Both before and after that section, a similar argument to Ms. Rosing's is presented: since fraud is criminal, the 5th amendment exercise shouldn't be held against Mr. Hansmeier.

    Does Erdman v. Stevens apply here (yet)? That's for disbarment hearings by a bar's own court; this is a federal court, Paul Hansmeier isn't a Defendant (yet).

    Honestly, I rather hope their arguments that these were hearings for criminal conduct backfires on them, by ensuring Judge Wright will pass this along to a criminal prosecutor, as Prenda et al. and their lawyers keep pointing to this ordeal as a being criminal in nature. If you show up in a civil court but then claim your actions should be treated as being in criminal court, you'll no doubt get your wish, right? (Especially when you brought it to the civil court as a plantiff, and leave for a criminal case as a defendant. How often does that happen, honestly?) Its like they've already resigned themselves to criminal prosecution, and are just trying to minimize or avoid picking up any sanctions before they get there.

  67. Anonymous says

    Perhaps they know something we don't.

    Could there have been grand jury subpoenas for evidence from Prenda and their bros? I don't know what the timeframe would be but it doesn't necessarily have to be a result of Wright's investigation. They royally pissed off Judge Mary Scriven in Florida, had a case dismissed for attempted fraud on the court, and she had some very unkind things to say about Steele and Lutz in a hearing transcript. That was at the end of November and the judge has not ruled on a motion for sanctions, despite being obviously unimpressed with their behavior.

    For PR and now legally strategic reasons, they probably wouldn't be the ones to advertise the fact if that were happening in the background.

    I always thought there might be a reason for the deafening silence and delay from Judge Scriven's court…

  68. That Anonymous Coward says

    The Chin declaration is pretty funny.

    Wolverine lost 20 million due to piracy, except those numbers are self reported with little evidence to support them. These number come from an industry that still claims the original Star Wars films have no recouped, despite the huge amount of money they have earned.

    The system as described, which means he hasn't seen the actual system. As described the OSX operating system was secure against viruses, and then it feel. We all have perfect "systems" in place and sometimes we short cut on things because we get the same result more often than not.

    Estimated costs of piracy vs actual costs. This is a court of law not a place where conjecture is to be used.

    Wireless signals can be blocked by stuff, people use passwords. Except we've seen actual images that do not match the narrative and hacking wifi isn't exactly something that requires a supercomputer to do.

    Finding out who owned it would violate CFAA. Except for sniffing the available information to determine the name offered by the device offering the connection which then could be used to locate the owner of a specific signal. Except the "investigations" done to date have been verify there is someone with a penis in the home, send the threat and try to get them to implicate someone else if they insist it wasn't them, then send letter D that demands payment for negligence.

    They were not forthcoming with evidence… well let me threaten you with $150,000 in fines and lets see how many questions of mine your willing to answer. Note you missed the letters in other cases where the computers of the accused were offered up for examination to prove their innocence and they declined to look while still demanding payments.

    His lay comprehension of understanding is material to the matter at hand. He is making claims that do not accurately reflect reality. If he lacks understanding of the topic how can he speak authoritatively to a court?

    Yes ISPs are not required by law to hand over information to any idiot who demands it, in fact it would violate the law and the contracts to behave in such a manner. But go ahead and try to color it as the ISPs are shirking a duty they owe.

    You have all of these shiny metals and associations, can you locate Mr. H listed as a member of any of those? The declaration he is an "expert" seems to lack anything to substantiate those claims on his part.

    "the participant by default immediately becomes both a receiver and a distributor of the file being traded." Doctrine of unclean hands, you participated in an event making it worse to improve your case.

    Incomplete files can be played by VLC… how incomplete of a file?

    University kids can do stuff, how many universities were a party to this case? The average university offers much more speed than a home connection.

    ISPs that furnish hardware often send the cheapest electronics that are out of date, consumers often obtain their own devices which might not ship protected. ISPs also charge higher fees for devices offering wifi and many consumers will take the cheapest device to get connected and then route it out via their own equipment.

    500,000 movies a DAY! Except how many does just this 1 copyright holder own?

    Game of Thrones!!! Is not niche porn even on a good day. Game of Thrones can be purchased, where are Prenda's things available?

    Your company works out of a PO box on a flashy website without much detail about how you operate.
    Your basing your findings on statements that are given by people accused of fraud upon the court, not actual examination of the systems. Yes your honor I conclude based on what this other person claimed the tree totally jumped out in front of the car.

    Smoke and mirrors with a shiny package.
    But then this isn't my first rodeo and I'm not being paid to prop up some claims.

  69. says

    I haven't read the entire brief, but i dont think it matters. Judge Wright came in to the hearing demanding one thing only: fact tstimony/defense against the assumptions that he had already made. He was absolutely clear about the findings of fact that he intended to make. And he gave them a full and fair opportunity to answer the court's concerns.

    He doesn't have to consider the post-hoc brief. But I think in his opinion and order he'll at least address itbut discount it. And then, state the findings of fact – such as finding the attorneys, Prenda, and the plaintiff LLC are one and the same (which also just happens to resolve any questions of personal jurisdiction – not that I think there are problems). Then hammer them, but do it using the discretion he has bith as a Judge and as provided for under the Rules etc. They'll appeal and he knows it, but so long as the order is based upon findings of fact made by him and on decisions that are discretionary, the odds of being overturned on appeal are slim to none. Appellate courts almost never overturn findings of fact or exercises of discretion by trial judges. Especially when it comes to matters of discipline/fraud on the court.

    No, I know I dont have a crystal ball but I've seen similar things before, and with a coservative former marine pissed off federal judge I wouldn't want to be sitting where they are.

  70. davnel says

    When reading about cases such as Prenda's and Righthaven's, I keep coming back to the same question. Why are attorneys allowed to act in the manner they are acting? Why are they allowed to make false declarations, commit perjury, and just plain defraud the courts? I thought attorneys, because they are court officers, and because they basically dispense the law, were held to higher standards than the "joe sixpacks" of the world. Why are they allowed to get away with this crap? You and I both know that if I tried even 10% of the stuff they are doing, I would end up in jail so fast it would take a week for my ass to catch up with the rest of me. Why aren't they in jail?

  71. Matthew Cline says

    @Charles Buckley:

    If Cooper is legally connected to AF Holdings, couldn't he "cooperate" with the IRS and US government and give permission to share data?

    IANAL, but as far as I can tell the sort of corporate representative Cooper is supposed to be is delegated the power to make certain types of legally binding agreements for the corporation. In this case it would seem that he has (allegedly) been delegated the power to sign copyright transfer contracts, meaning he hasn't been delegated the power to hand over corporate records.

  72. MouseTheLuckyDog says

    Sounds to me like the Prenda people are engaged in a rear guard action.
    Specifically they are making arguments to buy time, so they can milk a few more people and transfer their funds to some overseas country with no extradiction, so they can run there and live the rest of their lives in luxury.

  73. says

    @davnel re: your question for Ken….

    I don't have a crystal ball and can't see into the mind of Judge Wright. However, what you are seeing is an overall pattern and practice across the US and many many different courts. Most of the judges haven't seen any indications of the underlying behavior and even if they did, it's only a small piece. In this case, a vigorous defense and an active, intelligent judge smelled something wrong and is working to pull the pieces together. But these things take time – even though a sitting (federal) judge has a lot of discretion, they all want to handle these things by 1) making sure that they find out all they can about the underlying problems and 2) carefully putting together a record and opinion that not only captures all of the bad behavior that they can point to but also creates the best possible grounds for whatever action (sanction) they decide is appropriate. As I noted in an earlier post, whatever Judge Wright does will almost without doubt be appealed, and he knows it.

    Also, there is the fact that we are a self-regulating body of professionals. Judges were once lawyers, and understand how hard it can be representing some clients. We generally get the benefit of the doubt, in part because of collegiality but also to protect the public. If every lawyer who had a shady client was called on the carpet by the court or had the actions of its client imputed to the lawyer, it would be almost impossible to get a lawyer to take a difficult case. Which is where legal representation is most needed.

    That assumption that the bad behavior is by the client is exactly what happened here – until Judge Wright began to see the evidence that the lawyers WERE the client behaving badly.

    Finally, you also have to understand that any judge is going to be incredulous that lawyers would do these things. The reasons? First, there's the above assumption that the lawyer is just doing a job and is protecting the interests of a client, and (very importantly under our system of law) giving them effective representation and access to the courts for resolution of their legal disputes / enforcement of their legal rights. Second, a judge would be incredulous and would point the finger at the attorneys only at the last because this behavior – besides the monetary and other sanctions that will probably occur – is professional suicide. This is how a group of people lose their licenses to practice law. Imagine spending seven years in higher education, spending many tens of thousands of dollars to pass even your first bar exam, and placing your entire professional self worth into that one little card that says you can practice law. No bar admission, no career and no job. It's just insane to put that at risk. In this case, of course, they all were sure they could get away with this and perhaps didn't even see the problems with their own behavior. But either way, I just can't imagine risking my bar admission in this manner. It's simply unthinkable. Once such behavior becomes known, however, god help you……

  74. Earle says

    Duncan Byers, thanks for providing that context. It really helps me understand how and why judges and the bar can seem so accommodating of bad behavior.

  75. AlphaCentauri says

    It occurred to me — now we have three Alan Coopers — the one that is signing documents for AF Holdings, the one who testified in court in March, and the one who sends disturbing text messages to Brent Berry asking his to intervene on his behalf with his physician to get him to write scripts.

    Interestingly, the types of drugs that would be prescribed to someone for scary erratic behavior don't have all that much value to drug abusers on the street. On the other hand, they are often extremely expensive medications that have a lot of value to unethical pharmacists who buy them from patients and resell them.

    If I was working in the Minnesota department of medical assistance, I would be pulling the records of claims for scripts for Alan Cooper at Steele's address, as well as the records of any other people, real or imaginary, using that address, to look for evidence of doctor-shopping. If I was with the Minnesota attorney general's office, I would look at the pharmacy where he gets fills scripts to see if the number of pills supposedly dispensed exceeds the number they can document purchasing from their wholesaler.

    I put nothing past these people's sense of brazen entitlement.

  76. That Anonymous Coward says

    @AlphaCentauri – Alan Cooper hunting made my head hurt when I tried it.
    I found one who had been renting out a place in Nevis.
    I found one who works in the UK helping people setup offshore tax shelters in places like Nevis.

    So many Coopers, so little time…

  77. AlphaCentauri says

    The medical/pharmacy information would not be available to us, but if he's used a third party payer for these scripts he's talking about, then there exists someone with a reason to be very concerned if there has been fraud going on. There appears to be precedent for this Alan Cooper's name being used fraudulently. His prescription insurer ought to give it a look. A human can often spot obvious fraud that won't show up with computer edits, and that can lead to fraud on a larger scale involving pharmacists/physicians as well.