It's time for an update on the exploits of Prenda Law, that team of crooked, bumbling copyright trolls that's been stomped by judges nationwide.
Today, the United States Court of Appeals for the Ninth Circuit heard oral argument in a Prenda case. Prenda's principals have appealed Judge Wright's catastrophic May 2013 sanctions order against them. It was worth the long wait for court-watchers — though probably not for Prenda.
Judge Wright faced complex problems: given that Prenda had dismissed its copyright-trolling case, what sort of sanctions power did he retain, and what sort of due process did he have to extend to the Prendarasts to invoke that power? On appeal, Team Prenda argues that Judge Wright's sanctions and attorney fees award exceeded his power because (1) Team Prenda's inviduals — like John Steele and Paul Hansmeier — were not properly before the court, and (2) Judge Wright effectively levied criminal sanctions, triggering procedural rights that he did not extend to Team Prenda. John Doe — the defendant who triggered this whole escapade, successfully represented by Morgan Pietz — argued that the bizarre and extreme facts supported all of Judge Wright's order under applicable law.
It's foolish to bet on specific outcomes based on oral argument. But that's the kind of fool I am. I predict that the Ninth Circuit will uphold part of Judge Wright's sanctions order — the part that represents a civil sanction — and send the case back to the trial court for a more complete hearing on criminal sanctions.
That's not good for Prenda.
Prenda's attorney Daniel Voelker did what an attorney is supposed to do: he stood up and argued, defiant of the odds. But defiance isn't enough. He needed to address the problems with his case directly, and he didn't.
The beginning was not auspicious — Judge Tallman immediately quizzed him on why mail sent to his clients always bounced back, a long-time issue as Team Prenda evaded service of process. Voelker said he didn't know, a statement that would become a common refrain for him. His approach, rather reasonably, was to avoid discussions of the facts of Prenda's misconduct and attempt to focus the court on procedural issues. But Judges Pregerson, Tallman, and Nguyen weren't having any of it. They wanted him to talk about facts — to explain why he believed Judge Wright didn't have sufficient evidence to decide that Steele and Hansmeier and Duffy ran Prenda and were therefore subject to sanction. Voelker chose to evade these questions.
Evading a judge's questions doesn't work. Here it just antagonized the judges, who started drilling down deeper into the astounding record below. "You keep wanting to skip to the end," said Judge Tallman. "I'm trying to ask about facts." On another occasion Judge Tallman said "you're not helping yourself by bobbing and weaving." All three judges displayed an unusually detailed grasp of the facts of this voluminous case, and peppered Voelker with inquiries he evaded or couldn't answer. Judge Pregerson — who began the day by announcing it was the 70th anniversary of his battle wound on Okinawa — was relentless. "Explain to me how this operation works. This operation. From the beginning. How they made their money," he demanded. When Voelker demurred Pregerson snapped "you don't know anything, do you?" Voelker weaved, and argued that his clients' invocation of their Fifth Amendment rights was wrongfully held against them. "They should have asserted the Fifth Amendment because they were engaged in extortion," Pregerson shot back.
Voelker didn't give up. He explained he wanted the court to send the case back to the trial court and, if not dismiss it, give his clients the full criminal contempt hearing they were entitled to. The judges were openly incredulous of this strategy. "You want us to send this back for criminal contempt proceedings?" asked Judge Tallman, with the air of a parent asking a toddler whether he really wants to hurl himself down the stairs. "Do you understand that the maximum penalty for contempt is life imprisonment?" I lost a little urine at this point. "I'm amazed that you're asking for this to be sent back for a criminal proceeding given the findings here and across the country," said Judge Nguyen. But Voelker was undaunted — yes, he said, that's what his clients want.
I hesitate to armchair-quarterback a lawyer in a tough position. But Voelker's damn-the-facts approach didn't work. It did whatever the opposite of working is. When Judge Tallman asked Voelker about the forged Cooper document, and Voelker was vague and equivocal, Judge Tallman was angry. "Oh come on!" he said, and later: "Was this document delivered by the tooth fairy?" Judge Pregerson was blunter. He called Prenda "sordid" and a "crooked extortion operation," and said that it "used our court system for illegal purposes, to extort money." He wasn't any kinder to Voelker individually. "This is going to be written about for years and years, and you're going to be part of the story." Pregerson demanded whether Voelker would be "involved" in any criminal proceeding. "Not necessarily Your Honor," said Voelker, which is not the way I would have gone with that. Pregerson followed with perhaps the most devastating line I've ever heard used against a lawyer:
Pregerson: And you're a great lawyer.
Voelker: I appreciate you saying that, Your Honor.
Pregerson: I mean, it says so, right there on your web site.
A battered but unbowed Voelker took his seat, and Morgan Pietz arose to defend Judge Wright's sanction order. The judges were far more cordial and their tone was cooperative, as if they were trying to work with Pietz to find a way to uphold the sanctions order. They did have some tough questions for him on the distinction between criminal and civil sanctions. Pietz shrewdly agreed that it would be fine for the court to uphold the civil component of the sanctions and remand to the trial court for a full criminal contempt proceeding.
Voelker rose again for rebuttal. He dealt with the hostility more effectively this time: when Judge Pregerson suggested that Judge Wright "smelled a rat," Voelker correctly pointed out that we don't sanction people based on smell, but on evidence offered through a correct procedure. But then he lapsed into his habit of vagueness and fact-evading. When he complained that Judge Wright had denied his clients the opportunity to present evidence, Judge Tallman asked him what evidence they would have presented, and how it could have made a difference. He had no answer.
"We hear your position," Judge Tallman said in question, signalling that they didn't agree with it.
I have never seen an oral argument go so badly for an advocate. The judges were immersed in the details of the record and plainly convinced that Prenda was a criminal operation that merited some sort of sanction. They clearly viewed the case not in isolation, but as part of a series of cases involving Prenda across the country — most of which are turning out very badly for Prenda. It seemed clear that they believed that Judge Wright had the power to impose some sort of sanctions, and that the record supported his doing so.
However, they seemed somewhat skeptical about the extent of Judge Wright's sanctions, given the way he conducted the sanctions hearings. My best guess is that the court will write a blistering opinion laying out Prenda's misconduct, affirm a significant portion of the sanctions, and then send the case back for a full criminal contempt hearing. It's hard to imagine how that helps Prenda. Nobody who has heard Steele or Hansmeier or Duffy testify has ever believed them — to the contrary, judges had specifically disbelieved them. They've never been able to offer a credible explanation for their conduct. They've dodged answering many questions that will now be inescapable. Their prospects in a criminal contempt proceeding are very poor — and would come in the wake of an appellate opinion further crushing their reputations.
Frankly, Prenda's core argument — that Judge Wright imposed criminal contempt penalties without extending criminal contempt procedural protections — is not a bad one. It's wouldn't be an injustice for Prenda to prevail on that, particularly if it hurled them from the frying pan of the Ninth Circuit back into the furious cleansing fire of a criminal contempt proceeding. Such a proceeding would make it substantially more likely that members of Team Prenda will go to prison — either as a criminal contempt sanction, or because the criminal contempt proceeding produces evidence that makes it easier to prosecute them separately.
Patrick and I livetweeted the argument; you can find the tweets in a Storified version here.
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