Prenda Law: Am I My Brother's Keeper?

Our coverage of the Prenda Law saga is collected here.

You know, if I got my brother involved in an enterprise that culminated in a furious federal judge demanding that he fly across the country to show cause why he shouldn't be sanctioned, I think I'd step up and represent my brother, or ask my attorney to represent my brother, or hire a separate attorney for my brother.

But then, I'm an only child; there may be nuances to this sibling relationship thing I don't grasp.

You may recall that when United States District Judge Otis D. Wright II ordered Prenda Law participants to appear in his Court for the March 11, 2013 hearing, one of the people he ordered to appear is Peter Hansmeier, brother of Paul Hansmeier. Judge Wright probably ordered Peter Hansmeier to appear because the Doe defendants allege that he, through a company called 6881 Forensics LLC, had been paid for "forensic" work related to Prenda Law's litigation activities.

You may also recall that John Steele, Paul Hansmeier, and Paul Duffy hired attorneys to appear for them and their paralegal and to file a request to excuse them from appearance on March 11. Those attorneys didn't appear for Peter Hansmeier. As far as we knew, nobody appeared for Peter Hansmeier.

Today we learn that back on March 8, 2013 — the Friday before the March 11 hearing, and the same day that Paul Hansmeier, Paul Duffy, and John Steele filed their unsuccessful ex parte application — Peter Hansmeier attempted to file a pro se ex parte application to relieve him from showing up on March 11, 2013. The application is here, and his supporting declaration is here. The clerk of the court only filed it to PACER today. Judge Wright rejected it back on March 12, 2013 because it didn't include proof that Peter Hansmeier gave notice to the other parties that he was making the application — a necessary element of an ex parte application (that is, a motion to the court filed outside the normal motion schedule required by local rules).

There are a few notable things about Peter Hansmeier's ex parte application.

First, Peter Hansmeier says he doesn't want to show up because he is not a party, could only be a witness, and has "no dog in this fight." Yet Hansmeier shrewdly captions his application as being from Peter Hansmeier of Livewire Holdings LLC — one of the Prenda Law plaintiff entities, which has also been ordered to appear, and which Judge Wright clearly suspects is connected to fraud on the court.


Second, Peter Hansmeier says in his one-page declaration that he lives and works in Minnesota and intends to continue to do so. Yet his declaration, like his ex parte application, is captioned Peter Hansmeier, pro se, of Livewire Holdings LLC at its Washington, D.C. address.

Peter Hansmeier's ex parte application has some law-talk in it; it's been worked upon by someone who is either a lawyer or an informed amateur. But making the "I have nothing to do with this mess and I live in Minnesota" assertion on a pleading captioned with Livewire Holdings LLC in Washington D.C. is a blunder of epic proportions. Moreover that blunder probably could have resulted in the document not being filed at all — someone appearing pro se can't appear for an entity in court, and the caption makes it somewhat ambiguous whether Peter Hansmeier is intending to appear pro se just for himself or also in some capacity for the entity Livewire Holdings LLC.

Maybe if someone had referred Peter to a competent lawyer, or even hired one for him, he might have avoided such a blunder. Instead, it appears that the lawyers who got him into this mess — including his own brother — let him appear pro se and effectively incriminate himself.

That's some cold shit, yo.

Edited to add: Commenter Robert points out something I missed — the "Peter Hansmeier" ex parte is just a cut-and-paste of arguments from the ex parte application filed by John Steele, Paul Hansmeier, and Paul Duffy. Yet someone still managed to stick the "Livewire Holdings LLC" into the caption. Ooops.

Edited again to add: "How about no."

Prenda Law: A Brief Interlude About Being A Judge

All of our coverage of Prenda Law is collected here.

There was a time when I thought that someday I might like to be a judge — that at some point, after the kids are educated or incarcerated or off following a band or whatever, it would be rewarding to wrap up my career with some time on the bench.

I think it's safe to say that ship has sailed. Best thing for me, really. If I were a judge I couldn't say what's on my mind. I couldn't have any fun.

At least most of the time.

Last week Fight Copyright Trolls broke a story about Prenda Law attorneys Paul Hansmeier and Brett Gibbs being involved in some questionable class-action-objector shenanigans. Techdirt and Ars Technica followed up on the story. I really don't have anything of substance to add — read the Fight Copyright Trolls post, it's instructive — but the story reveals that being a judge does, in fact, allow for very occasional moments of fun.

The case was Shames et al v. Hertz Corporation et al, a class action pending in federal court in San Diego in 2007. The parties reached a proposed settlement. On the last day for objections to the settlement, Paul Hansmeier — purportedly representing his father — wrote to the attorney for the class and said, in effect, that unless the class paid him $30,000, he'd object to the settlement:

I will extend to you an offer to settle this matter with my client for $30,000.00 if the settlement terms are reached by 5:00 PM CST on Monday, Oct. 1, 2012. If you reject this settlement and the objection is filed, the offer to o settle is revoked and will not be extended at the pre-filing settlement amount.

Govern yourself accordingly.

Note Hansmeier's parting line there. What is it about pompous scumbags and that line? Does it speak to some inadequacy deep inside them?

Class counsel appropriately told Hansmeier to go piss up a rope and threatened him with sanctions. All wounded innocence, Hansmeier filed an ex parte application seeking to intervene in the case and to have class counsel removed. United States District Judge Michael M. Anello's order denying that request is as satisfying a judicial smackdown as you are ever likely to see. It made me guffaw and bounce in my seat. It included a sharp reference to Hansmeier's puffery: "On Monday, October 1, 2012, governing himself according to the undertone and implications of Objector’s counsel’s letter, class counsel responded . . . ." And then came the hammer:

In reviewing the letters between Objector’s counsel and class counsel, the only “bold and improper” conduct the Court can identify is [Hansmeier's] attempt to extract $30,000, from class counsel in exchange for Objector not filing objections that [Hansmeier] suggested could derail approval of the class settlement and award of attorneys’ fees.

That's going to leave a mark.

So, as you can see, judges can occasionally have some fun. But I think I'll stay a lawyer, and a blogger.

And Paul Hansmeier? Well, in a recent interview with a hometown paper, he expressed hope that representing family members in class action matters would eventually lead to a broader client base:

“Now, I would hope … that as time goes on that I expand the circle, that I gain some credibility and some experience and a reputation for successfully prosecuting these style of cases.”

Do let us know how that goes for you, Paul.

Alan Cooper Strikes Back, Files Counterclaim Against Prenda Law and Paul Duffy

Prior coverage of Prenda Law is collected here.

Can things get worse for Prenda Law even before the next hearing before Judge Wright?

Yes. Yes they can.

Prenda Law's three censorious defamation suits inspired me to start writing about their shenanigans. Though John Steele dismissed the one he filed in his own name in Florida, two cases remain in federal court in Illinois: one filed by Prenda Law in the Southern District of Illinois, and one filed by Paul Duffy in the Northern District of Illinois. Jordan Rushie posted them here.

As you may recall, among others Prenda's defamation lawsuits target Alan Cooper — nominally an executive of Prenda's clients, but according to him, a victim of identity theft — and Cooper's lawyer, Paul Godfread. Though the suits are very vague, they seem to attack Cooper and Godfread for asserting (both in public and in court) that Prenda has stolen Cooper's identity.

Yesterday, March 21, Cooper and Godfread struck back. They filed answers and counterclaims in both Illinois federal suits.

[Read more…]

Prenda Law: Brett Gibbs Confronts a Philosophical Conundrum

My prior coverage of the Prenda Law saga is here. It's reaching the point where I'm going to have to do some kind of index.

You may recall that on March 14, 2013, Judge Wright issued a new Order to Show Cause directed to Prenda Law's principals and putative clients, and ordered Brett Gibbs to serve it. Prenda-watchers recognized some of the dilemmas this presented: how does one serve "Alan Cooper of AF Holdings?" How would Gibbs serve the alleged client entities? How would he make contact with his former supervisors Paul Duffy, Paul Hansmeier, and John Steele?

Because Mr. Gibbs is now represented by competent and sensible counsel, the answer is: thoroughly and professionally. Mr. Gibbs' attorney Andrew Waxler filed a declaration today documenting his efforts to serve the Prenda Law cast of characters as Judge Wright ordered.

A few notes:

1. You may recall that an attorney appeared on March 11, 2013 representing Duffy, Steele, Hansmeier, and their paralegal. Waxler asked that attorney to accept service on their behalf. She said she was "unable to accept service." Normally, if you were trying to avoid a federal judge's wrath, you'd be a little more cooperative than that. The refusal suggests to me that (1) they are trying to preserve their frankly specious lack-of-personal-jurisdiction argument, and/or (2) Steele, Hansmeier, Duffy, and the paralegal aren't cooperating with their counsel. You can stand on ceremony and insist on formal service, but all I can say is if Judge Wright were that mad at me, I'd want the proof of service to reflect that I happily accepted service to make things easier.

2. How do you serve "Alan Cooper" without making any concessions about "Alan Cooper"? Delicately:

Service on "Alan Cooper, of A F Holdings L L C . " The only "Alan Cooper" that we are aware of appeared in Court on March 11t h . I understand that he claims that he is not affiliated with A F Holdings. We further understand that Mr. Steele may contend otherwise. In any event, since we know of no other Alan Cooper than the person that appeared in Court, I reached an agreement with his attorney, Paul Godfread, that I can serve "Alan Cooper" via email only care of Mr. Godfread's email address, Pursuant to that agreement, we served Mr. Cooper c/o Mr. Godfread on March 15t h . Mr. Godfread did acknowledge receipt of the email when he wrote back with the following remarks: "Please note that I do not represent Alan Cooper of A F Holdings. I only represent Alan Cooper of Isle, M N . I do not accept service on behalf of Alan Cooper of A F Holdings. I not agree to accept service on behalf of Alan Cooper of A F Holdings. Please also note that the most recent order specifically does not order my client, Alan Cooper of Isle, M N to appear."

Note that (a) Gibbs, at least, understands that John Steele is insisting that Alan Cooper was voluntarily involved in this, (b) Cooper maintains that he isn't, and (3) Cooper's attorney reads the order (not unreasonably) as not requiring him to return, but only requiring the presence of whatever Alan Cooper admits to heading AF Holdings, if such a person exists.

3. Of Paul Duffy, Paul Hansmeier, Peter Hansmeier, Mark Lutz, John Steele, Angela Van Der Hemel, and all of the entities, only Paul Hansmeier and Van Der Hemel made any response to the service, and then only to confirm which addresses worked. Multiple formerly used email addresses failed.

We'll see what the Prenda Law principals do in response to this. April 2, 2013 looms.

Prenda Law Continues To Dismiss Lawsuits

My prior coverage of the Prenda Law saga is here.

Friday I reported that Prenda Law had dismissed multiple cases in the Northern District of Illinois — including one in which they had already secured a default against the defendant.

Today I can report dismissals in three other districts. On Thursday, AF Holdings, LLC dismissed a case in Northern District of Georgia. Today — Sunday — AF Holdings LLC dismissed cases in the Eastern District of Michigan and the Western District of Michigan. (The beauty of the CM/ECF system used by federal courts is that you can file documents around the clock.)

The "Notice of Allegations" that Paul Duffy filed in Illinois wasn't filed in any of these cases. Different counsel represented AF Holdings in Georgia and Michigan.

Some Prenda Law cases brought on behalf of AF Holdings and Ingenuity 13 remain open. I'm watching them and will report any changes.

Prenda Law Tries To Close The Barn Door After The Horse Has Lawyered Up

My prior coverage of the Prenda Law saga is here.

Yesterday, March 14, as Judge Wright was busy issuing a new Order to Show Cause directing Prenda Law clients and affiliated attorneys to appear before him, Prenda Law was busy too.

More specifically, Prenda Law — through Paul Duffy, one of the lawyers Judge Wright has ordered to appear — was busy dismissing cases and filing a "Notice of Allegations" informing other courts of what is going on. Sort of.

A tipster told me that Mr. Duffy had a busy day yesterday. PACER showed it's true. More specifically, Mr. Duffy filed voluntary dismissals of multiple AF Holdings LLC cases in the Northern District of Illinois — here and here and here (in which he stipulated to dismiss the case with prejudice, meaning it can't be re-filed) and here. In one of those cases he filed the notice of dismissal even though AF Holdings had already secured a default against the defendant, leaving nothing but proving damages. I haven't yet counted all the cases in which Duffy filed dismissals yesterday.

In each of those cases — and in a case in the Northern District of California — Duffy also filed a substantially identical document styled a "Notice of Allegations." Here's what they all say:

Plaintiff hereby notifies the Court of allegations of forgery that were made during a hearing in a matter pending before the U.S. District Court for the Central District of California. Ingenuity13 LLC v. John Doe, No. 2:12-cv-08333-OWD-JC (C.D. Cal. Mar. 11, 2013). On March 11, 2013, an individual by the name of Alan Cooper alleged that his signature was forged on two separate agreements assigning the rights of various copyrighted works to Plaintiff, including the assignment at issue in this matter. (See, ECF No. 1-2 at 2.) Plaintiff categorically denies Mr. Cooper’s allegations, which arise nearly two years after certain of the alleged conduct occurred. Mr. Cooper has a pecuniary interest in his allegations by virtue of a lawsuit he filed against Plaintiff. Cooper v. Steele, et al., No. 27-CV-13-3463 (Minn. Dist. Ct., Hennepin Cty., 2013).

Even if Mr. Cooper’s allegations were true—and they are not—Plaintiff’s assignments, including the assignment at issue in the instant action, remain valid. The formal requirements of a copyright assignment are “quite simple”: a writing signed by the assignor. 17 U.S.C. § 204; Effects Associates, Inc. v. Cohen, 908 F.2d 555, 557 (9th Cir. 1990) (“The rule is really quite Case: 1:12-cv-03567 Document simple: If the copyright holder agrees to transfer ownership to another party, that party must get the copyright holder to sign a piece of paper saying so. It doesn't have to be the Magna Charta; a one-line pro forma statement will do.”); see also Order, AF Holdings LLC v. Does 1-96, No. 11-cv-3335-JSC (N.D. Cal. Nov. 22, 2011), ECF No. 29 at 5 n.1 (“The written copyright assignment recites that it is between the original copyright owner, Heartbreaker Films, and Plaintiff here, AF Holdings, LLC. . . . As the law requires only that the assignment be signed by the assignor and not the assignee, this inconsistency does not prevent a prima facie showing of copyright ownership.”) (internal citations omitted).

Mr. Cooper’s allegations relate to the assignee, not the assignor. The assignment at issue in this action satisfies the Copyright Act’s formal requirements. It is a writing signed by the assignor. Plaintiff’s rights in the copyrighted work in this action were transferred when the assignor executed the assignment.
Plaintiff is treating Mr. Cooper’s allegations with utmost seriousness and is investigating their substance. Because Mr. Cooper’s allegations relate to the assignment agreement at issue in the instant litigation, Plaintiff respectfully brings the matter to the Court’s attention.

Broken down, here's what Duffy is saying: (1) Cooper's claim is untrue, (2) but we're treating the claim seriously and investigating it, (3) but even if it were true, it doesn't matter, because an assignment only needs a valid signature from the person giving the property, not the person receiving the property.

Many things could be said about that argument. Among them: the first two points are oddly at war with each other, particularly when uttered in such proximity. If AF Holdings knows the allegation is not true, then what precisely is AF Holdings carefully investigating? Doesn't AF Holdings already know whether or not Mr. Cooper consented to be an officer for it and executed documents for it? What is there to investigate, exactly?

Duffy's third point is about a doctrine that lawyers — including, for instance, prosecutors and defense lawyers — call materiality. Most civil or criminal laws prohibiting false statements only extend to material false statements — that is, statements that are the sort that could make a difference in the issue at hand. Duffy seems to be previewing Prenda Law's defense by suggesting that even if Cooper's identify was misappropriated and his signature forged on assignments, that false statement was not material because a copyright assignment only needs a valid signature from the guy giving the copyright, not the guy receiving it.

There are a number of problems with that argument. Among them: Judge Wright is not only interested in whether Prenda Law made fraudulent representations about who received the assignments. Judge Wright is investigating — and has ordered Prenda Law to explain — whether Prenda Law made fraudulent representations about the true owners of plaintiff entities like AF Holdings. Whether Alan Cooper is a real officer or not is unquestionably material to that. Judge Wright has specifically ordered them to explain:

2) Why they should not be sanctioned for failing to notify the Court of all parties that have a financial interest in the outcome of litigation;

3) Why they should not be sanctioned for defrauding the Court by misrepresenting the nature and relationship of the individuals and entities in subparagraphs a–m above [of the March 14, 2013 Order];

Prenda Law's apparent theory of materiality may be apt in analyzing whether the copyright assignments are valid. But it may not be apt in determining whether any misstatements were material for purposes of civil or criminal fraud allegations directed at the ownership and management of Prenda Law's clients. For instance, as I've discussed before, for purposes of charging defendants with false statements to the government, materiality is defined very broadly to include the sorts of statements that have the capacity to influence the government, whether or not the government is actually misled.

All that said, aside from questions about the exact language of the "Notice of Allegations," Paul Duffy is very likely doing the right thing legally and ethically by dismissing the cases and informing courts of the allegations against Prenda Law. In doing so he is reducing the risk that he will be accused of continuing any alleged fraud on the court after the March 11, 2013 hearing.

With respect to what has already happened, though — my friends, that die is cast, the Rubicon crossed, the ram has touched the wall.

Another Day of Reckoning Scheduled For Prenda Law

My prior coverage of the Prenda Law saga is here.

Shortly before noon on Thursday, March 14 — three days after a dramatic hearing at which he expressed grave concerns about the operations of Prenda Law — United States District Judge Otis D. Wright II has issued a new Order to Show Cause directing principals of Prenda Law to appear before him, this time on March 29, 2013 at 10:30 a.m. [Edit: As is noted below, this has been moved to April 2, 2013 at 10:00 a.m.]

The order is here.

Here's what the order does, and the significance of its terms.

First, the judge retroactively denies the Prenda principals' ex parte request that he lift his order requiring them to appear. Judge Wright concludes — absolutely correctly based on the evidence, I submit — that he has jurisdiction over them. He also blasts them for their last-minute filing evading the March 11 appearance:

The Court has received the Ex Parte Application filed on behalf of John Steele,
Paul Hansmeier, Paul Duffy, and Angela Van Den Hemel, requesting the Court to withdraw its March 5, 2013 Order requiring their attendance on March 11, 2013.

Based on the papers filed and the evidence presented during the March 11, 2013 hearing, the Court concludes there is at least specific jurisdiction over these persons because of their pecuniary interest and active, albeit clandestine participation in these cases. Not only does the Ex Parte Application lack merit, its eleventh-hour filing exemplifies gamesmanship. Accordingly, the Ex Parte Application is

Specific jurisdiction means jurisdiction over a particular case (like this one), as contrasted with general jurisdiction, which means jurisdiction in any case anyone might care to bring. In other words, Judge Wright is suggesting that their actions in this case subject them to personal jurisdiction in connection with this case. Note the "albeit clandestine" line, a reference to Judge Wright's conclusion — supported by evidence in the record — that Prenda Law principals are concealing their financial interest in the putative clients acting as plaintiffs in their cases.

Next, Judge Wright gives a taste of what he has concluded:

The March 11, 2013 hearing raised questions concerning acts performed by other persons related to Prenda Law, Inc., Steele Hansmeier PLLC, Livewire Holdings LLC, AF Holdings LLC, Ingenuity 13 LLC, and 6881 Forensics, LLC. The evidence presented suggests these persons may be culpable for the sanctionable conduct explained in the Court’s February 7, 2013 Order to Show Cause, which the Court previously attributed to Brett Gibbs only. Further, it appears that these persons, and their related entities, may have defrauded the Court through their acts and representations in these cases.

Next, Judge Wright announces what he is ordering:

Thus, the Court amends its February 7, 2013 Order to Show Cause (ECF No. 48) to include sanctions against the persons and entities in subparagraphs a–m below:

a) John Steele, of Steele Hansmeier PLLC, Prenda Law, Inc., and/or Livewire Holdings LLC;

b) Paul Hansmeier, of Steele Hansmeier PLLC and/or Livewire Holdings LLC;

c) Paul Duffy, of Prenda Law, Inc.;

d) Angela Van Den Hemel, of Prenda Law, Inc.;

e) Mark Lutz, of Prenda Law, Inc., AF Holdings LLC and/or Ingenuity 13 LLC;

f) Alan Cooper, of AF Holdings LLC;

g) Peter Hansemeier, of 6881 Forensics, LLC;

h) Prenda Law, Inc.;

i) Livewire Holdings LLC;

j) Steele Hansmeier PLLC;

k) AF Holdings LLC;

l) Ingenuity 13 LLC; and

m) 6881 Forensics, LLC.
These persons and entities are ORDERED to appear on March 29, 2013, at 10:30 a.m., TO SHOW CAUSE for the following:

1) Why they should not be sanctioned for their participation, direction, and execution of the acts described in the Court’s February 7, 2013 Order to Show Cause;

2) Why they should not be sanctioned for failing to notify the Court of all parties that have a financial interest in the outcome of litigation;

3) Why they should not be sanctioned for defrauding the Court by misrepresenting the nature and relationship of the individuals and entities in subparagraphs a–m above;

4) Why John Steele and Paul Hansmeier should not be sanctioned for failing to make a pro hac vice appearance before the Court, given their involvement as “senior attorneys” in the cases; and

5) Why the individuals in subparagraphs a–g above should not be sanctioned for contravening the Court’s March 5, 2013 Order (ECF No. 66) and failing to appear on March 11, 2013.

Judge Wright is demanding, in other words, that all the individuals and entities associated with Prenda Law show up and explain why they shouldn't be sanctioned for the full range of conduct he has been investigating: allegations that they filed lawsuits without adequate investigation of the identity of the John Doe defendants, allegations that they participated in fraud by using Alan Cooper's name as a fraudulent head of a shell company, allegations that they hid the true owners of the putative plaintiffs, allegations that they failed to appear as the true lawyers in the cases instead of using local counsel, and their failure to appear as ordered on March 11, 2013.

And if they don't?

Should the persons and entities in subparagraphs a–m above not appear on March 29, 2013, the Court is prepared to draw reasonable inferences concerning their conduct in the cases before the Court, including any inferences derived from their failure to appear. Failure to comply with this order will result in the imposition of sanctions.

The individuals named in the order are in a bind. On the one hand, an angry and motivated federal judge is considering sanctioning them. On the other hand, the same judge is accusing them of a broad scheme to defraud the court. I respectfully suggest that they should only submit to questioning about their conduct after a very serious discussion with competent attorneys about their constitutional rights.

Edited To Add: Judge Wright has moved the new hearing to April 2, 2013 at 10:00 a.m. The order appears to be a mere scheduling issue, not anything of substance.

Prenda Vileness: Transcripts of John Steele's Voicemails To Alan Cooper

My past coverage of the Prenda Law saga is here.

In my description of the March 11 hearing regarding the Prenda Law saga before Judge Wright, I mentioned that one of the most dramatic moments was when attorney Morgan Pietz played voicemails that John Steele left for Alan Cooper immediately after Steele learned that Cooper was suing for misappropriation of his identity. I said that the voicemails made me feel sympathy for Mr. Cooper and revulsion for Mr. Steele, and that they suggested that Mr. Steele was attempting to threaten and menace Mr. Cooper to deter him from discussing the use of his name.

Today Mr. Pietz, as promised, has filed a transcript of the voicemails. Here it is. Review it, and draw your own conclusions.

A couple of highlights:



Brett Gibbs Gets His Day In Court — But Prenda Law Is The Star

My past coverage of the Prenda Law saga is here.

There are few things more terrifying to a lawyer than a furious federal judge.

Today I saw one of those things.

It was a federal judge who was furious, intimately familiar with the case, and consummately prepared for the hearing.

Today United States District Court Judge Otis D. Wright II made it explicitly, abundantly, frighteningly clear that he believes the principals of Prenda Law have engaged in misconduct — and that he means to get to the bottom of it.

It was one of the most remarkable hearings I have ever witnessed.

The Scene

Today was the hearing on Judge Wright's Order to Show Cause, directing former Prenda Law "Of Counsel" Brett Gibbs to show cause why he — or others associated with Prenda Law — should not be sanctioned. (I previously wrote about the circumstances leading up to that order.) The hallway outside Judge Wright's courtroom was crowded half an hour before the hearing — crowded with lawyers, press, past defendants targeted by Prenda, Electronic Frontier Foundation representatives, and various interested citizens. I didn't know Mr. Gibbs by sight, nor his lawyers, but I guessed when they rounded the corner, looked at the crowd, and assumed facial expressions I'd summarize as aw, this has 'long day' written all over it.

Eventually I counted 42 spectators in the courtroom, not counting lawyers for people present.

Judge Wright Minces No Words

Judge Wright took the bench, grim and stentorian and bow-tied, and immediately commenced to take absolutely no shit from anybody. "I spent the whole weekend reading a deposition," he said, referring to the astounding deposition of Prenda principal Paul Hansmeier. "It is perhaps the most informative thing I have read in this affair so far." There was a collective intake of breath from the onlookers, who guessed that was not a good thing for Prenda Law. They were right. "There was so much obstruction in this deposition that it's obvious that someone has an awful lot to hide," Judge Wright commented later.

Wright began by establishing who was present. To his visible irritation — if not surprise — John Steele and Paul Hansmeier and Paul Duffy and their paralegal Angela Van Den Hemel were not present. Heather Rosing, their attorney who had filed a last-minute application seeking to excuse their presence, was there, but Judge Wright was not having any of her. She said her clients were "not physically here" — implying they were here in spirit, of which I have no doubt. Judge Wright angrily pointed out that she had filed her application late Friday afternoon, very much the last minute. She began to protest that her clients had only been served last Thursday, but he cut her off and directed her to take a seat. She did not participate further in the hearing except to note that her clients were available by phone. Judge Wright did not take the opportunity to give them a call. He noted that he had "extended an offer" for them to attend (a rather gentle description of his order) and that an "opportunity to explain themselves" was all that he was required to give them. I, for one, took this to mean that he would make rulings about their involvement without further input from them.

What followed was three hours of witnesses and legal arguments. I will deal with them thematically rather than chronologically.

The Real Alan Cooper Stands Up And Reveals Threats

One of the most interesting live witnesses was Alan Cooper — the actual Alan Cooper, who has accused Prenda attorney John Steele of stealing his identity to use as the figurehead executive of Prenda's various "clients." Cooper is a tall, rangy man, dressed modestly today in jeans and a t-shirt, looking a bit like a gray-haired Jim Caviezel. He took the stand at Judge Wright's bidding, and clearly nervous and out of place in the magisterial federal courtroom, told his story. He explained that he took care of two houses Steele owns, and Steele let him stay in one as payment. He knew Steele when Steele was in law school; later he knew Steele to aspire to be a divorce attorney, and then later something else. "Something in . . . internet porn piracy?" Cooper said hesitantly. "Internet porn piracy sounds pretty good," quoth Judge Wright. (In interacting with Cooper, Judge Wright became kindly, but with his anger writhing visibly just below the surface.) Cooper said that Steele bragged of wanting to make "$10,000 a day" by "sending letters to downloaders." Cooper himself is "not very internet savvy" and couldn't say more about the plan.

Eventually, Cooper said, Steele told him words to the effect that if anyone called him about Steele's law firm or anything "out of place," Cooper should call Steele. But Cooper was clear: he never signed anything as an executive for any of Prenda's clients, was never asked to be a representative of any of the Prenda Law client entities, and never agreed to do so. Shown signatures purporting to be his, he disclaimed them. "I use a middle initial," he said, and these signatures did not. He also disclaimed even seeing lawsuits filed using his signature or assignments of copyright bearing his signature in multiple cases. Cooper said that the address Prenda Law used for him wasn't his, and that the email address Prenda Law used for him definitely wasn't his. He also wasn't familiar with web sites registered using his name. "No tissues dot com — or perhaps that's pronounced not issues dot com," said Mr. Pietz, getting the best laugh of the day.

Gibbs' attorney Andrew Waxler tried gamely to object to some of this evidence on the grounds that some of the cases mentioned weren't listed in Judge Wright's OSC. "It's about fraudulent practice in federal court" said Judge Wright in the sort of eerily level tone that makes a lawyer wish the judge were yelling again instead.

The most dramatic part of Cooper's testimony — and perhaps the most dramatic moment in the hearing — came when Cooper described what happened when his lawyer Paul Godfread notified Prenda Law that he was suing for the misappropriation of his identity. Within minutes, he said, John Steele began to call him. Steele called many times, and over the course of weeks sent texts and left several voice mail messages. Mr. Pietz played the messages for the court.

In each message, Steele began by telling Cooper that Steele understands that Paul Godfread is only representing Cooper in Cooper's lawsuit, not in Steele's and Prenda's and Duffy's lawsuits against Cooper. It's evident that Steele was saying that in an attempt to justify why he would be directly calling a represented party, which lawyers are prohibited from doing by the disciplinary rules of every jurisdiction. (Moreover, it's not clear that it's true). (Edited to add: In the comments, Erik points out that Steele was representing himself in his own defamation suit, and would probably characterize this as a party contacting a party rather than an attorney contacting a represented party. The problem with that argument is that Steele also mentioned the other two lawsuits in the messages.) In the calls, Steele talked with escalating intensity about how Cooper was now facing lawsuits, that Cooper needed to call Steele to talk about being deposed and responding to discovery, how things were going to "get ugly" now, and how things were now "complicated." On hearing the voice messages, I thought there was only one reasonable interpretation: John Steele was trying to menace and intimidate Alan Cooper to get him to back off from talking about John Steele's use of his name. By the end of the calls, there was a stunned silence in the courtroom, and I suspected that many spectators were sharing with me a deep sympathy for Mr. Cooper and an abiding sense of revulsion for John Steele. Judge Wright rather clearly felt mercy towards Mr. Cooper as well, some of which bled into pointed comments to Brett Gibbs' legal team. "You turn it from the O-F-F position to the O-N position" he said rather sharply when Gibbs' counsel asked how to turn the monitor on their table on.

By the way, someone told me that the Electronic Frontier Foundation may be picking up Mr. Cooper's expenses for flying to Los Angeles. Good for them if that's true.

AT&T and Verizon Say They Didn't Get The Order

Judge Wright also permitted testimony from attorneys for AT&T and Verizon. You may recall that one of Judge Wright's concerns — to use the mild term — was the allegation that though he had ordered a stay on discovery in the Prenda Law cases before him and ordered Prenda Law to send his order to the ISPs, Prenda Law did not do so and in fact collected consumer data from the ISPs after Judge Wright's order. Today Verizon filed a declaration directly contradicting Brett Gibbs' assertion that they had been called off. On the stand, attorneys for Verizon and AT&T asserted that their clients never received Judge Wright's order from Prenda Law, and AT&T's lawyer said that Prenda Law paralegal Angela Van Den Hemel continued to contact AT&T seeking the status of the pending subpoenas. It was only after AT&T itself discovered Judge Wright's order on PACER and responded to her that discovery was stayed that she subsided.

Brett Gibbs' attorneys pointed out — rather reasonably — that the ISP's attorneys couldn't say of their own knowledge what their clients did or didn't receive, and suggested that ISPs are known for destroying such documents too quickly. (On this point Judge Wright pointed out that it seemed that Verizon had maintained everything else except the purported notification from Prenda Law, and characterized Gibbs' argument as "they eliminate their documents pretty much the way Mr. Gibbs eliminates original documents," which was perhaps not the response Gibbs was hoping for.)

On this point, Gibbs' attorneys represented — and Gibbs testified — that the other attorneys of Prenda Law were responsible for handling all subpoena-related correspondence, that Gibbs reported Judge Wright's decision to John Steele and Paul Hansmeier, and that they told Gibbs that they would take care of it, and later claimed they had. But Judge Wright made Gibbs admit that Gibbs found out that the ISPs had produced documents to Prenda Law after Judge Wright's order, and never updated the court about that or amended his prior status report to the court. To put it mildly, Judge Wright was not happy about that.

Client, Client, Who's The Client?

It was clear from the beginning of the hearing that Judge Wright viewed Prenda Law's clients as shams — as mere instruments of the lawyers involved. "The only entities getting funds are law firms," said Judge Wright. There was "no effort to transmit those funds to the entities," which got "not dime one," and the entities had not filed income tax returns, because they had no income. Wright also pronounced it "very interesting" that Hansmeier's declaration suggested that settlement funds were being moved from one firm's client trust account to another. He demanded of Waxler: "Is that what you get? That's what I get." Waxler responded that Gibbs had no personal knowledge of such things, and suggested that Hansmeier's deposition showed he was the one with knowledge. "Mr. Hansmeier has no knowledge of anything," Judge Wright scoffed, rather accurately depicting Mr. Hansmeier's know-nothing stance at his deposition. There was a nervous titter — one of many — in the courtroom.

Waxler suggested that Prenda Law retains the funds to pay litigation expenses for things like forensics. "Like Hansmeier's brother?" Judge Wright shot back, referring to payments to Hansmeier's brother who acted as a computer forensic expert. Waxler later suggested that the funds are used to retain law firms. "They retain firms? Seriously? You can barely keep a straight face!" retorted Judge Wright. Judge Wright concluded that the law firms "basically prosecuted on their own behalf."

All of that is important, by the way, because it goes to the disclosures that litigants must make in filing a federal case. Adam Steinbaugh has a good description of the federal rules requiring lawyers to disclose the parties with an interest in the lawsuits they file or defend. Judge Wright's comments strongly suggested that he believed that Prenda Law's principals were the only beneficiaries of these lawsuits, and that by concealing their interest, they were violating applicable federal rules. Under tough questioning from Judge Wright, Gibbs' attorneys said that Gibbs made no such disclosures because he was aware of no such hidden interests — he relied entirely on Hansmeier and Steele for client information.

No Crying in Baseball, No Speaking Objections In Los Angeles

Mr. Pietz called a former client, Jessie Nason, who briefly testified that Brett Gibbs sued him in state court on various harebrained substitute-for-copyright state law claims, and that Gibbs had represented to a state court that he was able to identify Nason as a downloader because he lived alone. Nason noted indignantly that he doesn't live alone, he lives with his wife, and therefore it wasn't right to assume that he was the downloader. Dude, I don't think you've thought this plan all the way through. This testimony fell largely flat — Judge Wright had already clearly formed an opinion that Mr. Gibbs' investigation of the identity of downloaders was insufficient, and Nason's testimony didn't seem to accomplish anything. When one of Gibbs' attorneys objected, at length, Judge Wright rather sternly told him that there are no speaking objections in Los Angeles (meaning you say "objection, irrelevant," and then sit down — you don't speechify). Damn straight.

Brett Gibbs' Terrible, Horrible, No Good, Very Bad Day

Eventually Gibbs' lawyers called him to the stand. He's a tall, thin, dark-haired young man with a serious expression. He looked appropriately unhappy. I felt bad for him. "Let me be honest with you," he stuttered at one point. "That would be good" said Judge Wright, deadpan.

Gibbs explained that he was hired as an independent contractor — not an employee — by Steele & Hansmeier, and later by Prenda Law. He took all his direction from Hansmeier and Steele — which cases to file, what to do with them, etc. Later, when Judge Wright began to question Prenda Law's approach, he and Hansmeier and Steele together made a "cost benefit analysis" and decided to pull out of cases in this district. I'm sure. Later in January 2013, he said, Hansmeier offered him a job as "in house counsel" at Livewire LLC. This made him, Hansmeier told him, in house counsel of AF Holdings as well, because Livewire LLC owned AF Holdings.

On this point there was a rustling in the audience, where many people remembered that in February 2013 Hansmeier testified in San Francisco that a mysterious "undefined beneficiary trust" owned AF Holdings, not Livewire. Gibbs nervously explained that he was informed that the trust had sold AF Holdings to Livewire, but then learned at the time of the deposition that the transaction had not happened yet, hence Hansmeier's testimony. I'm not sure what that made Gibbs between January and February, but that's neither here not there.

Gibbs explained that he learned that Prenda Law, without his permission or knowledge, was sending out many letters with his signature stamp demanding settlements in cases across the nation. Ever optimistic, he asked Mark Lutz to stop it — but Lutz unsurprisingly responded that this was a matter for Steele. Gibbs smartened up and quit, substituting out of all California cases and letting Paul Duffy of Prenda Law substitute in.

Quitting under those circumstances sounds reasonable. Yet Judge Wright was aghast that Gibbs knowingly allowed Prenda Law to use his phone number and email address on Prenda Law cases filed in other states across the country by other lawyers. Gibbs explained he was tasked to help those other lawyers, and that he would forward messages to them. "That doesn't sound sensible to me," said Wright, rather understating it.

Judge Wright also questioned Gibbs rather harshly on how he identified downloaders, suggesting that he found Gibbs' methodology (which included looking at maps to determine how far wifi signals from houses might reach) to be entirely insufficient. Judge Wright was looking at different maps. In fact he revealed that he looked up things on Google Earth himself — a comment that bought him much geek cred in the courtroom. (Pietz had more, by virtue of using an iPad mini to display his exhibits on the monitors, which I regarded as simply showing off.)

I found Gibbs believable as a young attorney out of his depth who fell in with the wrong crowd and made bad choices. But Judge Wright was clearly not entirely satisfied. He quizzed Gibbs on why he didn't file notice of related cases informing the court that the various Prenda Law cases were related. Gibbs responded that courts in San Francisco had said that in Prenda Law cases up there, Prenda improperly joined multiple defendants in the same case even though they should be separate. That, Judge Wright points out, confuses the question of joinder of parties in one case with the question of whether cases are related, as every attorney in the room (save Gibbs') nodded. Ultimately, on this point as on others, Gibbs said that Steele and Hansmeier made the decision.

We're All Perry Mason In Here

In real life, people in the audience in court proceedings do not spring up to make dramatic revelations, because that gets you arrested. Today, it happened. Just after Gibbs testified that he had only limited responsibility for AF Holdings, an attorney in the audience stood and asked to be heard. I cringed, waiting for the kill. But Judge Wright asked him who he was and what he wanted. He identified himself as an attorney for Paul Godfread, who in turn is Alan Cooper's attorney. Gibbs, he said, spoke with him in November 2012 and represented himself as "national counsel" for AF Holdings, one of the Prenda Law clients. Wright shook his head. "Have you noticed," he said in rhetorical tones, "that every representation made by a lawyer with Prenda Law is not true." The lawyer sat back down again. Some might say that didn't bode well for Prenda.

The Road Ahead

Ultimately Judge Wright took the matter under submission, meaning he will rule in writing. "Good luck to you," he said to Gibbs as he stepped down, eliciting more nervous chuckles.

Brett Gibbs is in trouble. I buy him as a dupe here. Indeed, he admitted that "maybe" he felt duped. Yet though he pointed to Hansmeier and Steele as the decision-makers in this travesty, and disclaimed any knowledge of wrongdoing, he and his attorneys seemed oddly reluctant to throw Steele and Hansmeier all the way under the bus. It's more like he handed them a bus schedule and gave them a gentle shove in that general direction. Gibbs continued to argue that it wasn't clear until Cooper's testimony today that the Cooper signatures weren't genuine, a position that drew guffaws in the courtroom and an incredulous expression from Judge Wright. He and his attorneys seemed to want to suspend judgment about whether Prenda committed any misconduct at all — a tactical error at this point, I think, and harmful to their credibility. The judge interrupted their closing arguing by asking pointedly whether a lawyer — even if he is supervised by people out of state — has an obligation to investigate facts himself. Ultimately, Judge Wright did not sound inclined to accept Gibbs' innocent stance.

Wright did not say, explicitly, what he would do about Steele, Hansmeier, Duffy, or the rest of the Prenda Law team. But when Pietz began laboriously to explain the basis for jurisdiction over each of them, Wright cut him short, suggesting that he found the evidence clear. (So, for the record, did I, given the evidence of Steele's contacts with California, Steele's and Hansmeier's supervision of Gibbs in California, and Duffy's substitution into cases in California and membership in the California bar. Their lack-of-jurisdiction argument is borderline frivolous.) I suspect, based on his comments, that Judge Wright will not let the consequences of this situation rest entirely on Gibbs' shoulders. What could he do? He could probably sanction the Prenda Law parties under his inherent authority based on their supervision of Gibbs. But I suspect Judge Wright will go further than that, with criminal referrals and messages to various state bars. There could also be further orders to show cause, or even bench warrants. Judge Wright didn't seem inclined to give them warning. But every indication is that they are in real legal peril.

There's been a lot of anticipation of today's hearing. The hearing lived up to it. It was a disastrous day for Prenda Law.

I'll analyze Judge Wright's order when he issues it.

My thanks to Mike Masnick at Techdirt for letting me cross-post this there.

Edited to add: Megan Geuss from Ars Technica was there too, and has a writeup.

Prenda Law Attorneys Ask Judge Wright To Lift Order Requiring Them To Appear Monday

And now, the latest in the Prenda Law saga.

Recall that Judge Wright has ordered attorneys associated with Prenda Law to appear in his court on Monday, March 11. I've been watching all week for some response from them. This afternoon I saw that attorney Morgan Pietz — who represents the John Doe defendant in the case in which Judge Wright has been issuing orders — filed an opposition to an ex parte application for relief filed by lawyers (and subjects of Judge Wright's order) John Steele, Paul Hansmeier, and Paul Duffy, as well as paralegal Angela Van Den Hemel. Yet the application didn't itself appear on PACER.

(An ex parte application is a motion that is not filed on a regular schedule — which, in federal court in Los Angeles, is 28 days before the designated hearing. Rather, it's filed on an urgent basis, without a hearing date specified, outside the normal scheduling rules.)

Mr. Pietz's opposition brief is here. Fortunately, Pietz provided context by attaching the Steele/Hansmeier/Duffy ex parte application as an exhibit. Here it is. Pietz suggests that the ex parte application may not be online yet because they filed it manually at the clerk's office rather than by e-filing it on the electronic filing system, which automatically and immediately places it on PACER. That's probably right, though it may not be for sinister reasons — as non-parties appearing for the first time in the case, Steele, Duffy, and Hansmeier may not have been able to e-file the document in the case.

In short, Steele, Hansmeier, and Duffy say that Judge Wright should lift his order because (1) Judge Wright lacks personal jurisdiction over them because they are in different states, aren't parties to this case, and aren't attorneys of record in this case; (2) they didn't get adequate notice of the order, they are busy, they have limited resources, and traveling on short notice is difficult. They ask, at a minimum, that the judge reschedule the hearing. Considering they have had several days to put a brief together, I find this motion rather half-hearted and meager, particularly given the gravity of the situation and what they are trying to accomplish. If this is all they could pull together, I am surprised they didn't file it sooner, like Wednesday.

In opposition, Mr. Pietz points out that (1) John Steele has sent letters like this one into California demanding settlement for copyright claims; (2) Paul Hansmeier appeared in San Francisco as the designated representative of AF Holdings, and (3) Duffy is a member of the California State Bar and was counsel of record in AF Holdings cases in San Francisco. I think Mr. Pietz very clearly has the better of this argument. Brett Gibbs has offered sworn testimony that his activities were directed by Steele and Hansmeier and that Duffy was the principal of Prenda Law — together with the admissions in Hansmeier's deposition, that's more than enough to show activities directed to California establishing jurisdiction over them. The question of whether they had enough time to prepare to appear is the sort of thing that's in the broad discretion of the court — though, if I were making that argument, I sure as hell wouldn't have waited until Friday afternoon to make it, when it looks like gamesmanship.

I'll keep an eye out for orders or further filings. I wouldn't be surprised if Judge Wright rejected the jurisdiction argument but gives them an extension.

By the way, I stand by what I said in my prediction about what stance the Prenda Lawyers might take. The evidence clearly shows that Steele, Hansmeier, and Duffy have directed Prenda Law litigation activities in California. A federal judge has ordered them to appear here and explain those activities. By responding with a jurisdictional argument now, they have utterly eviscerated their credibility and the credibility of their enterprise permanently in every court in the United States of America.