Patrick Achache

Recently I stumbled upon an interesting presentation created by someone named Gerephil Molina from Cebu, Philippines. This presentation describes the inside operations of an infamous German copyright troll Guardaley (and its various facades, for example, IPP international — Lipscomb/Malibu Media’s “engine,” or the subject of this post — Anti-Piracy Management Company)¹.

You can watch this Anti-Piracy Management Company Presentation on the Prezi site (Flash-based) [The original presentation was hastily removed on 4/21/2014 — scroll down to see update], or read the pdf embedded below: I spent a couple of hours creating this document in a premonition that Prezi’s material will be removed — once visitors from Karlsruhe show up in my blog’s log. Content wise, it should be exactly the same as the original presentation (sans graphics, which is meaningless anyway).

This presentation does not look like a final product; and I’m still not sure who the target is. It looks more like an operations manual for the BPO Cebu office, yet the trolling technology description is definitely obtained from the original source — Guardaley. I have a feeling that it was not intended for public eyes.

There is a little doubt that one of Guardaley’s key players, Patrick Achache is behind this particular Guardaley’s incarnation (Anti-Piracy Management Company — APMC). Another Guardley-connected name that appears in this playbook is Daniel Macek (p. 35), an “expert” in some US cases, in particular, a potentially fraudulent Elf-Man LLC, v. Lamberson (the other “expert” in this case is Michael Patzer, who played his small role in the Bellwether vaudeville nearly a year ago).

I put quotation marks around “expert” not only because of my “biased opinion”: as we see in the presentation (p. 35 — emphasis is mine), I’m not the only one who questions this expertise:

paragraph 2 in regards to software consultant (i.e., he can talk about software issues), & we’re hoping the judge won’t question his qualifications too much.

I will not go over the statements and bullet points: they speak for themselves. The overall air is rather dry, business-like, cynical, which is not surprising: it’s a business based on exploiting the letter of the law, with little, if any, thought about the irreparable harm to thousands of families. Similar to how the military-industrial complex monetizes war, cartels like Guardaley monetize infringement, but in reality both thrive on suffering of others.

The stated goal of “ending the infringement” is laughable: no sane businessman wants the source of income to dry out.

I hope that defense lawyers (“bad guys,” according to the trolls, p. 5) will find some points that can be used in the ongoing fight against the copyright trolling plague.

Update

04/21/2014

The original Prezi presentation was deleted around the time this post was published. Fortunately, yesterday I not only preserved the textual part (embedded above), but grabbed the video of presentation itself. Because of YouTube clip length restrictions, I broke it to four pieces.

Update 2

04/21/2014

I was digging through my archives and found this 2+ years old document, a “business proposal” by the same entity, Anti-Piracy Management Company:

The metadata reveals that the author of this champertious proposal is Josh Partridge. A quick search leads to his LinkedIn page, where he clearly states that Anti-Piracy Management Company is Guardaley:

Since this man is in the US (San Diego), does the idea of depositing him sound crazy? I hope not.

Also, don’t miss DieTrollDie’s update on the same topic: we are untangling the cobweb slowly but surely.

Media coverage

• TorrentFreak: Accused Pirate Slams Bittorent Tracking Outfit in Court by Ernesto.
• Techdirt: International Men Of Mystery: How Discredited German ‘Anti-Piracy’ Company May Secretly Be Behind Malibu Media’s Copyright Trollery by Mike Masnick.

Followup

• Defense: Unlicensed German investigator Guardaley is steering US copyright trolling operations
• Elf Man v. Lamberson: presented with the evidence of wrongdoing, plaintiff attempts to run away

¹ You can read more about the tangled web of German shell companies in Morgan Pietz’s recent motion he filed with the Maryland court.

It is heartwarming to observe that what we have been talking about for years finds its way to court dockets. Defense attorneys articulate this long overdue fact much better than me, a non-native English speaker and a layperson. I am talking about the elephant in the room — one of the biggest lies that have been keeping US courts under the spell over the recent years: a fable that poor piracy victims hire attorneys and forensic experts to “legitimately” go after Bittorent users in order to deter piracy and compensate for the perceived losses.

The reality is the exact opposite: a recently leaked Gurdaley’s presentation does not leave any room for doubt. Disgraced German outfit Guardaley, presenting itself via multiple shells as a mere “forensic expert,” is in fact a very well organized business of monetizing illegal file-sharing: it recruits attorneys and plaintiffs, and actually steers the industrial-scale litigation campaign.

Many compare this business model to Mafia’s, and indeed there are obvious parallels: any Mafia parasitizes on illegal activity, whether it is prostitution, illicit drug usage, or, as in our case, online copyright infringement; any Mafia invests in, or at very least, protects the said activity; any Mafia keeps low profile, obfuscating the facts about the bosses: those on the surface (plaintiffs) are usually the least relevant.

There is a few copyright Bittorent infringement cases, in which defense tries to get to the bottom of the murky pool, which is the relationship between German “investigators,” troll lawyers and formal plaintiffs:

• In Malibu Media v. John Doe (NDIL 13-cv-06312) Jonathan Phillips is trying to untangle the troll web after Malibu Media’s counsel admitted on the record that Tobias Fieser, Guardaley’s “expert” and an assumed witness, works on contingency, i.e. has a direct interest in the outcome of the cases he has been providing declarations for.
• In Elf-Man LLC v. Lamberson (WAED 13-cv-00395) Christopher Lynch has been digging the Guardaley rabbit hole for a while, and he uncovered a plethora of inconsistencies and outright lies.
• In three identical cases Malibu Media, LLC v John Doe (MDD 14-cv-0223, 14-cv-0257 and 14-cv-0263), Morgan Pietz built probably the most comprehensive dossier against the enterprise. This titanic work was based in part on others’ efforts, including the two cases above. I also dare to say that my, DieTrollDie’s, Raul’s, and many others’ involvement contributed to the future demise of the said enterprise.

I wrote about the latter case(s) twice:

• 4/14/2014: Defendant makes a powerful move against copyright troll Malibu Media in Maryland
• 5/18/2014: Battle with copyright troll Malibu Media is raging on in Maryland

On 5/31/2014 Morgan Pietz filed yet another bunker buster motion, this time a “reply on merits,” a must read to any defense attorney fighting against copyright trolls, not only Malibu Media: the same foreign power is behind the majority of the US Bittorent lawsuits, whether it is XArt, Voltage Pictures’ multiple shells, Copyright Defenders, and so on.

What is champerty?

Pietz begins with labeling the Malibu/Lipscomb/Guardaley troll operation as champerty:

Malibu’s position is that “[p]aying a service provider to record a computer transaction” is not grounds to exclude evidence or dismiss a case. But that is not a fair description of what appears to be going on in these cases. Rather, here, the “service provider,” is in the business of recording computer transactions, and, together with plaintiff’s lawyers, they solicit clients to stir up litigation, in exchange for a piece of the settlement action, in contravention of Maryland’s strong public policy against champerty.

[...]

The computer network traffic Guardaley/IPP/Excipio is in the business of monitoring, on a massive scale, is only inherently valuable to the extent that it could serve as the basis for copyright infringement lawsuits for statutory damages. Malibu again admits that the lawyers, not the “client,” choose who to sue in these cases.

[...]

In short, these circumstances suggest that when it comes to this “systematically opportunistic” new business model of using the federal court’s subpoena power, the threat of high statutory damages, and the stigma associated with pornography to leverage infringement settlements, the tail is wagging the dog.

The legal definition of champerty is

Legal arrangement in which an entity which is not a party to a lawsuit, finances and/or otherwise pursues a litigant’s claim in exchange for receiving a portion of the judgment award.

I.e., this is seemingly exactly what is going on in the 2,000 Malibu Media cases around the country.

Although third-party litigation funding is perceived differently in different states/circuits, at least some states, like Ohio or Maine have explicit laws against champerty (a hint to defense attorneys who will be fighting Malibu in Ohio). Recent decision by the New York Supreme court made it clear that champerty is not tolerated in the Empire State either. Even if there are no explicit laws against third-party lawsuit funding, I doubt that any court finds such a business model ethically sound: courts are state-funded, i.e. champertors that use the court system as an indispensable part of their business plan are essentially thieves who, in addition to money shaken down from Does, also pocket my and your taxes.

In his reply, Pietz thoroughly debunks arguments presented by Lipscomb/Hoppe in their opposition. He pays special attention to lame attempts at brushing off extensive evidence of the shell game:

Confronted with suggestions that the key witness, being paid on contingency, is merely a front for the discredited German company Guardaley, Malibu argues that since Guardaley also continued to exist as a separate entity, it would be wrong to consider IPP to be merely a front for Guardaley. Of course, there is absolutely no reason that Guardaley cannot continue to exist on paper, and even in practice, while at the same time clandestinely orchestrating everything done by its subsidiary or affiliate IPP. Notably, Malibu does not actually go so far as to deny any of the facts linking IPP to Guardaley.

The fact that Lipscomb stonewalls all the discovery efforts and slithers around uncomfortable questions was also brought to the light:

[...]If the payment arrangements Malibu’s counsel made with IPP were all above board, why has Malibu spent the last six months fighting tooth and nail all attempts by defendants to inquire into these arrangements? If there was and still is nothing to hide, why not fully explain how the German computer guys are compensated, and who they really work for, in the opposition to this motion? Such questions are routine for any expert who actually plans to testify. The fact that it was an “oral” contingency agreement suggests counsel knew the arrangement was suspect, and that the decision to omit mention of the contingent fee compensation paid to the declarants in the ex parte papers filed across the country seeking leave to issue subpoenas was knowing and intentional.[...]

There are many more nuances I have not explicitly noted, so please read the document:

• Reply Declaration of Morgan Pietz
• Exhibits AA to EE to the Reply Declaration

Morgan mentions, but does not attach in full (referencing only the ArsTechnica/Wired article), a damning email from Guardaley (leaked by Anonymous who hacked infamous UK troll Andrew Crossley’s email as a part of the Operation Payback). In this email a Guardaley employee Terence Tsang admits that creating shell companies (IPP International, Logistep, Baseprotect, Excipio, Anti-Piracy Management Company… you name it) is this troll’s MO:

Conclusion

In the last section of the reply Morgan Pietz argues that the appropriate remedy to the instant champertous lawsuits is dismissal:

If what appears to be true so far is confirmed on the factual record here in Maryland, namely that what Malibu calls the “suit formation” process for Movant’s case occurred during the term of the oral contingency agreement Malibu had in place with IPP, then IPP, Fieser, Patzer, and everyone else connected to IPP should be per se excluded, and the case should be dismissed with prejudice because there is no foundation for any of it.

I’d take it farther. Although it is beyond the lawsuits in question, it is obvious that if “what appears to be true so far is confirmed,” a huge floodgate of class action lawsuits will be open. Lipscomb oinks here and there: “We are not Prenda! Malibu Media is a real plaintiff!” Well, that’s what you’ve said. Unlike with Prenda, it will be far easier to go after the “real plaintiff’s” assets. I don’t think that Brigham and Colette Fields contemplated this grim possibility when they agreed for a small cut for “doing nothing — just collecting the checks.”

Update

6/5/2014

Yesterday Lipscomb/Hoppe filed an opposition to Pietz’s reply. What can I say? “Weak” is an overstatement: all it discusses is procedural gimmicks aimed at striking defense’s evidence as hearsay, the evidence that is orders of magnitude more believable than the “facts” used to harass thousands of purported file-sharers and wrestle them into paying up.

Some lies are simply impossible to say with a straight face, yet the trolls manage to do it:

Lipscomb and the gang are scared. I can feel it.

Read Anon E. Mous’s nice analysis of this piece of panic in the comment section below.

I refer the readers to DieTrollDie’s reporting on this case for the full history. Below is a very short recap: this case was so eventful that I would keep writing this post for days if I covered every detail.

Short history

Maureen VanderMay

Mr. Lamberson was sued by a one-copyright shell Elf-Man LLC, initially as one of 29 anonymous Doe defendants. Every defendant was named in the amended complaint after Charter communications coughed up their customers’ information to plaintiff’s lawyer Maureen VanderMay.

Mr. Lamberson was lucky to hire attorney Christopher Lynch, who started methodically dismantling the bluff — plaintiff’s “evidence.” There were many eyebrow-raising discoveries made over the last months worthy of a detective story. A very questionable copyright assignment invoked the memories of Righthaven. Ostensive German experts Daniel Macek and Michael Patzer (many remember him from the Bellwether farce) happened to “work” for a bogus (and delinquent) South Dakota corporation registered by a con artist — a disbarred California attorney. And so on.

The most damning recent finding was a leaked presentation of the real force behind this lawsuit — a foreign “Anti-Piracy Management Company” (infamous and disgraced Guadraley in disguise). This presentation described the troll’s kitchen in all its cynical and inhumane efficiency. The revelation made it possible to connect many dots and explained many things we knew, but couldn’t put our finger on it.

Recent events

After the revelations, this lawsuit was on the collision course with the ground. On June 3, 2014 plaintiff’s attorney, Maureen VanderMay, asked the judge for a permission to be removed from the case:

Issues have arisen between Plaintiff’s representatives and counsel, the nature of which make it impossible for counsel to both continue with representation and comply with the governing rules of professional conduct.

We can only wish to learn the details of these “issues.”

Yesterday Mr. Lynch filed a motion to compel discovery, namely, to provide the relevant correspondence between the plaintiff and APMC/Guardaley. The defense claims that this correspondence is not privileged. And even if it was privileged, VanderMay waived this privilege by failing to timely object to the discovery request — she sent her objections too late. Read the motion about her attempts at weaseling out after being caught lying about the date of the service.

Declaration of Christopher Lynch and exhibits are must-read too: especially emails in the Ex. B:

David A. Lowe

These events did not reflect well on the troll, and Elf-Man, via attorney David A. Lowe, specially hired for the occasion, filed a motion to dismiss this case with prejudice; in other words, a disgraceful attempt to cut and run:

The dismissal of Plaintiff’s claim and its express statement that it will not enforce the asserted copyrights against Defendant divorces the Court of jurisdiction over Plaintiff’s counterclaims. No objection by Defendant can enable the Court to retain jurisdiction because there is no case or actual controversy and no present basis for subject matter jurisdiction. Consequently, the action in its entirety must be dismissed.

Yeah, right: I used that gun to rob you, now I tossed this gun and promise not to use it again. Therefore, no objection can enable the prosecutor to retain the charges. No more controversy here: am I free to go, officer?

The ball is now in the defense’s court: will or won’t Lamberson stipulate to the dismissal? The plaintiff cannot unilaterally walk away because the defendant both answered and counterclaimed. I’m pretty sure that the court won’t dismiss the case if the defense disagrees (the argument about the court suddenly losing the subject matter jurisdiction is hogwash). I won’t blame Mr. Lamberson if he decides to accept a large reward in exchange for closing the case: he and his attorney already did a titanic job of dismantling the international extortion machine.

Malibu Media

Colette Field, M. Keith Lipscomb,
Michael Patzer

So, what about our favorite troll: Keith Lipscomb/XArt/Malibu Media? After Morgan Pietz connected the dots in his mighty work in Maryland, it is clear that all the US trolls that have the German connection are essentially the tentacles of the same beast — Guardaley. Lipscomb continues (as recently as on 6/10/2014) referring to Michel Patzer as a witness in imaginary future trials, as if it was not shown that one of the two Elf-Man’s “experts,” a German national Mr. Patzer, was involved in a fraud:

At trial, Malibu will call Mr. Patzer to testify that the PCAPs and MySQL log files contain evidence that proves that an infringement was committed by a person using Defendant’s IP Address. Malibu will not use Mr. Fieser for this purpose because he will not be able to establish the chain of custody to the PCAP. To explain, Mr. Patzer, not Mr. Fieser, restores the PCAPs saved onto the WORM tape drives and makes forensically sound copies of them for use at trial. Thus, only Mr. Patzer can testify to the chain of custody.

So, while witnessing the grimace of fear on one of the Guardaley’s heads is heartwarming, I’m pretty sure that another one — Mr. Lipscomb — is not at ease these days either: the comeuppance is around the corner.

It is not a question whether we will witness a Prenda-like downfall of the German-connected trolls, the only questions are 1) when, and 2) how much harm upon the people the scammers will be able to inflict before they are shut down for good.

Media Coverage

• Techdirt: Once Again, As Details Of Questionable Copyright Trolling Practices Come To Light, Troll Desperately Tries To Run Away by Mike Masnick.
• The Spokesman-Review: Media company drops Internet piracy lawsuit against Spokane Valley man by Tom Sowa.

Update

• 6/16/2014: Judge Rice let VandedrMay go.

Followup

• Elf-Man v. Lamberson: defendant agrees to let plaintiff go… for $100,000

A bit less than a month ago I covered a German-linked copyright trolls’ panic — an attempt to cut and run after the defense presented a damning evidence of champerty and fraud in Elf Man v. Lamberson (WAED 13-cv-00395). As predicted, the defendant wasn’t amused by the prospect of letting the plaintiff dismiss the case and call it quits without certain conditions (namely, paying $100,000 for the trouble):

[...] Mr. Lamberson requests the court condition the dismissal on payment in advance of $100,000 pul $154.50 in allowable costs for the deposition costs charged for the Fed. R. Civ. P. 30(b)(6) deposition of Elf-Man, LLC which was noted and held, but which neither Elf-Man, LLC, nor its counsel attended.

On 7/3/2014 the defendant’s attorney Chris Lynch filed 5 (!) documents:

• 64. Defendant’s Reply Memorandum in Support of his Motion to Compel
• 65. Declaration of J. Christopher Lynch in Support of Defendant’s Reply Memorandum in Support of his Motion to Compel
• 67. Memorandum regarding Plaintiff’s Motion to Dismiss
• 68. Declaration of J. Christopher Lynch in Support of Defendant’s Memorandum Regarding Motion to Dismiss
• 69. Declaration of Ryan Lamberson

Embrace for a thorough and intriguing read. Some interesting points:

• The defendant asserts that the copyright certificate is incomplete: a critical second page with signatures is missing (probably stolen by the ghost of Alan Cooper). Notwithstanding, the plaintiff continues to cherish its entitlement to statutory damages.
• Guardaley and its shells (APMC, IPP International, Crystal Bay Corporation… you name it) are undeniably the real party of interest, yet this fact was not disclosed in this case as required by law.
• No admissible evidence of the defendant’s wrongdoing exists: despite the statement by German “experts,” no one actually “observed defendant infringing” at all. All these wannabe investigators have is a half-second piece of the movie allegedly shared by the defendant’s IP address.
• While the estranged Elf-Man’s attorney Maureen VanderMay, despite the overwhelming evidence of the contrary, still claims that she sent documents to the defense before the deadline, Chris Lynch discovered that she blamed USPS in the past. Facepalm.
• The transcript of the APMC Prezi presentation is filed as an exhibit, the most cynical parts are quoted. For example,
  

  “APMC stays in the background where they are invisible, but we are the center (i.e. ‘we make things happen.’)”

  “We bring the clients to the law firms. We manage their legal strategy.”

There is much more in these documents, including well-described links between the parts of this German-centered racketeering organization (yes, including Lipscomb/Malibu Media/X-Art):

3. Anti-Piracy Management Company, LLC (“AMPC”) is incorporated in California, but using the address of 400 Capitol Mall, 11th Floor, Sacramento, CA 98514. That address belongs to the Weintraub Genshlea Chediak law firm. I called the Weintraub law firm to inquire about APMC and the Sacramento address. I was informed that the Weintraub law firm occupies the entire 11th floor of that building. The law firm receptionist had no contact information or forwarding information for APMC.

4. The Weintraub law firm has been a plaintiff’s attorney in other BitTorrent cases, including Camelot Distribution Group v. Does 1-5856 (not a typo), in the Central District of California, Case No. 11-cv-01949. That matter used Tobias Fieser as its witness wherein Mr. Fieser declared, ECF No. 22-1, that he was the “Technical Administrator of IPP International UG.”

5. Mr. Fieser also testified in the Eastern District of Pennsylvania in 2013 in Case No. 2:12-cv-02078-MMB, ECF No. 205, where he testified beginning at page 91 about his responsibilities at IPP in Germany. At page 97, Mr. Fieser was asked:

Q: Did anyone else at IPP, Limited verify that the movies were copies of Malibu Media’s works prior to filing the lawsuits?

A: Yes, Dan Macek also verified the movies.

Remember that Daniel Macek is explicitly mentioned in the “Devil’s cookbook” (p. 36).

I’m sure that these findings will be discussed in the oncoming hearing in Maryland. The storm is coming.

Forget the “contingency fee agreement,” the fraud is deeper than it appears

The most important piece of the new information in Chris Lynch’s filings is sealed and heavily redacted (Exhibit B), yet the following description is more than enough (emphasis is mine):

The explanation did include an April, 2012, agreement between APMC and Vision Films that Ms. VanderMay said was part of the explanation. That agreement is filed under seal and is designated as Exhibit B to Mr. Lynch’s Declaration. Lynch Decl. at ¶ 8. Page 7 of that agreement includes redacted portions, but does otherwise indicate that any recoveries from APMC’s enforcement campaign would be allocated first to APMC’s costs, and then “the remaining monies shall be distributed as follows: (a) The appointed Attorney’s and litigation [REDACTED IN ORIGINAL], (b) The appointed forensic IT expert costs [REDACTED IN ORIGINAL], (c) The RIGHTS OWNER shall receive [REDACTED IN ORIGINAL].” In other words, it appears that APMC as the investigator and financier of the litigation has a direct and contingent stake in it.

So this is the moment of truth: this is the answer to the question why Malibu Media and other Guardaley-affiliated trolls have been stonewalling discovery aimed at untangling the web of relationships between the Germans, their lawyers and plaintiffs. When the “oral contingency fee agreement” was inadvertently mentioned in an answer to interrogatories, it was bad enough, but the reality is even more shocking: the German “investigators” are not being paid on contingency; it is them who pay lawyers and plaintiffs a fraction of the settlement proceeds. Just think about it: all this copyright law abuse, fraud, misery, ruined families and careers, bankruptcies — this grim theater is run by a foreign racket with the help from greedy puppets — American lawyers.

I used the word “fraud” deliberately. In thousands of frivolous cases that have been plaguing this country for years, not a single time a real party of interest — Guardaley — was disclosed. This gross deception won’t stay hidden from the US judges for long.

Related: Redefinition of “Chutzpah”: the troll moves for default judgments

David A. Lowe

Make sure to read the latest DieTrollDie’s post on this topic: DTD analyses plaintiff’s questionable motion for default judgments against seven defendants in the Lamberson’s parent case (Elf-Man LLC v. Does, WAED 13-cv-00115), including the unbelievable two separate claims against a single married couple. Well, if Elf-Man’s new attorney Mr. David A. Lowe appeared on the case in this astonishingly douchy and sloppy way while even Mrs. VasderMay bailed out from the Bittorent cases citing ethical concerns, it doesn’t require a Ph.D. to deduce Mr. Lowe’s moral and professional qualities.

US Federal Judge
Thomas Rice

A very eventful case Elf-Man v. Lamberson (WAED 13-cv-00395) is coming to its conclusion (See the extensive coverage of this case by DieTrollDie). Because of the defense counsel’s titanic investigative effort (which resulted in overwhelming evidence of ongoing brazen fraud upon the US courts by a German extortion concern Guardaley), plaintiff’s counsel Maureen VanderMay resigned citing “ethical concerns,” and finally the trolls attempted to cut and run — dismissed the entire case with prejudice — to avoid potentially devastating scrutiny.

When Judge Thomas Rice approved the dismissal, he hinted that the defense might request attorney fees.

In July Lamberson filed three post-dismissal motions: for attorney fees and costs (asking around $200,000) and two motions for sanctions: pursuant to 28 U.S.C. § 1927 and Fed. R. Civ. P. 11.

Those motions prompted a flurry of opposition, including the declarations by Lipscomb’s discredited expert Patrick Paige and two German nationals (purportedly real people): unlicensed, uneducated “investigators” Michael Patzer and Daniel Macek. The only person whose declaration was missing was Guardley’s own “Alan Cooper” — an invented “expert” Darren Griffin of a non-existing Crystal Bay Corporation: this time the Germans seemingly didn’t dare to forge a signature as they did on numerous occasions in 2013.

We expected a lot from the judge’s ruling on these motions: as time passed, we hoped that he had been preparing an Otis Wright-like smackdown, but alas, I had rather mixed feelings reading the October 31 order.

Sanctions

I start with bad news: both motions for sanctions were denied, mostly on procedural grounds: applicability of certain sanctions to certain documents (“section 1927 sanctions are unavailable for complaints”), timing and clarity of defendant’s accusations in frivolousness, etc. The judge’s analysis of requested sanctions starts on p. 11 and, while it clearly communicates his hesitancy to sanction the plaintiff’s attorneys, it nonetheless reads like an instruction to future defendants, namely what they should do in order to keep ethically handicapped attorneys accountable.

Darren Griffin

The judge absolutely ignores the accusations of champerty, forgery, fraud… He apparently doesn’t want to deal with this dirt. Maybe he is right in his own way: it is up to DOJ to investigate the racketeering enterprise, yet we know that a concerned judge has a tremendous power of nudging such investigation, which otherwise is prone to death by prioritization. Alas, not this judge, not this time.

Attorney’s Fees

This part is good news. While the amount of fees is yet to be determined (the judge found that “other than to recite the total hours expended, counsel has not provided a sufficiently detailed justification for the hours claimed,” giving defense counsel Chris Lynch a chance to submit an itemized claim), we know that the copyright law is seriously skewed towards the rights holder, and to win a fee award is anything but easy even if a defendant prevails and even in the post-Fogerty world. This unfairness is one of the pillars of the widespread abuse of judicial system by copyright trolls.

Here, Judge Rice analyses the following factors:

In determining whether fees should be awarded, courts may consider a nonexclusive list of factors, including degree of success obtained, frivolousness, motivation, objective unreasonableness (both in the factual and legal components of the case), the need in particular circumstances to advance considerations of compensation and deterrence, and whether the chilling effect of attorney fees may be too great or impose an inequitable burden on an impecunious party. [...]

…and he finds that the fees must be awarded to the defendant:

First, Plaintiff dismissed all its claims against Mr. Lamberson; thus, Defendant is the prevailing party. Moreover, Defendant’s success was unqualified, as the dismissal against him was with prejudice.

Second, from this record, the Court has no basis from which to determine that Plaintiff’s claims were frivolous. The case was dismissed short of trial, so all the evidence is not before the Court.

(Well, this is the reason why trolls flourish: they fight with tooth and nail to avoid trials, so their “evidence” won’t be cross-examined in front of a jury.)

Third, Defendant contends the case against him was baseless, but the Court notes that Plaintiff has obtained stipulated relief against others on virtually the same allegations as Plaintiff asserted against Defendant.

(No, judge. “Stipulated relief” by no means proves defendant’s guilt or that the case is not baseless: the predatory lawsuits like this are calculated to extract settlement amounts slightly less than the cost of mounting a viable defense, hence even innocents settle.)

Fourth, whether Plaintiff’s claims were therefore unreasonable is likewise not determinable from this record. Plaintiff requested damages of $30,000—the full amount of statutory damages available under the Copyright Act for Lamberson’s alleged infringement. In the end, Plaintiff received nothing from Mr. Lamberson, and now nothing more can be said.

As a final point, I can’t agree more with the following:

Finally, awarding fees to Defendant will not have a chilling effect on Plaintiff’s other copyright claims. Plaintiff can pursue its valid and well-founded copyright claims with vigor, seeking both damages and fees where warranted. But Plaintiff cannot exact a pound of flesh simply by making defendants caught in its wide net expend attorney fees to defend themselves, perhaps unjustifiably. This factor weighs in favor of an award of attorney fees.

I feel that the previous paragraph will be widely quoted and I hope this somewhat toothless order will however make troll’s racket harder and costlier. And of course I hope that Lynch and Lamberson will win substantially more than a symbolic sum.

US Federal Judge
Thomas Rice

On 10/31/2014 Washington Eastern District Judge Thomas Rice decided not to sanction copyright trolls Maureen VanderMay, David Lowe and Carl Crowell in Elf-Man v. Lamberson (WAED 13-cv-00395), yet he granted the defendant’s attorney fees (the amount is yet to be determined). On the same day Judge Rice ruled on the motions for default judgments in two APMC-driven cases: Elf-Man, LLC v. Does 1-29 (WAED 13-cv-00115 — the case Lamberson was spawned from) and a very similar copyright shakedown case The Thompson Film, LLV v. Does 1-35 (WAED 13-cv-00126):

• Elf-Man order
• Thompson order

In these two cases the plaintiff requested $30,000 from each of the 11 defendants who failed to answer to the complaints. This would result in $330,000 — a 14x return on the $23,700 investment ($700 in filing fees plus $23,012.57 attorney fees as costs, as determined by the judge).

This request was not granted: while the judge couldn’t simply deny default judgments as the defendants were properly served, he awarded just the allowed minimum to the trolls: $750 per defendant (plus $2,250 in attorney fees).

Similar to the Lamberson ruling, these two orders are both bad news and good news. I’m utterly disappointed by the judge’s unwillingness to address the stink of abuse these lawsuits exude: in the first order (embedded below) trolls’ dances around the truth were taken for granted, and Lamberson’s attorney’s well-pled accusations were brushed off. Even the fact that Ms. VanderMay defrauded the court by filing a forged declaration of Darren Griffin was not mentioned at all.

At the same time, these orders addressed the issue I’ve been bringing up for three years — that insanely high statutory damages run afoul of the Eighth Amendment to the US Constitution. To the best of my knowledge, this is the first time a federal judge brings this topic in a mass Bittorent case¹.

This Court finds an award of $30,000 for each defendant would be an excessive punishment considering the seriousness of each Defendant’s conduct and the sum of money at issue. Although Plaintiff contends the minimal revenue lost from each Defendant’s single transaction does not account for the extent of damages, this Court is unpersuaded that the remote damages — “downstream revenue” and destroyed plans for a sequel due, in part, to piracy — justify an award of $30,000 per defendant, even in light of the statute’s goal of deterrence. Instead, this Court finds Plaintiff has not made a showing justifying damages in excess of the statutory minimum. Accordingly, the Court, within its “wide latitude” of discretion, grants Plaintiff the minimum statutory award of $750 against D. & B. Barnett, jointly and severally and $750 against each remaining defaulted Defendant in the case.

In the footnote, Judge Rice further explains:

In Austin v. United States, the Supreme Court held that the Excessive Fines Clause of the Eighth Amendment applies in civil, not just criminal, proceedings. Austin v. United States, 509 U.S. 602 (1993). As the Court explained, the purpose of the Eighth Amendment is to limit the government’s power to punish, and “civil sanctions that cannot fairly be said solely to serve a remedial purpose, but rather can only be explained as also serving either retributive or deterrent purposes, is punishment, as we have come to understand the term.” Id. at 607-09 (applying the amendment to civil forfeiture proceedings). Undoubtedly, the statutory damages imposed for violation of copyright infringement are intended to serve a deterrent purpose, see e.g., Nintendo of Am., Inc. v. Dragon Pac. Intern, 40 F.3d 1007, 1011 (9th Cir. 1994) (recognizing the punitive and deterrent effect of the Copyright Act’s statutory damages), and thus can properly be characterized as punishment.²

Proportionality of punishment is the cornerstone of any civilized society. I can’t imagine anyone to disagree with this statement. I want to look into the eyes of an individual that claims that sharing a $20 movie warrants a fine that may result in abandoning college education or losing a house.

And yet the travesty continues.

I’m saddened and tired of observing a huge moral blind spot this country developed regarding the insanity (and unconstitutionality!) of civil fines in copyright cases. The astronomical numbers currently serve the sole purpose of threatening alleged infringers in order to wrestle them into paying a ransom. The law, created in pre-digital age to combat large-scale commercial infringement, was perverted by greedy crooks with opaque eyes. Unless the statutory damages are not abolished or at very least drastically reduced for non-commercial infringement, the international troll Mafia will continue destroying people’s lives.

¹ In Sony v. Tenenbaum, Judge Nancy Gertner in 2010 cut a jury’s damage award against the defendant from $675,000 to $67,500, saying it was “unconstitutionally excessive” and “wholly out-of-proportion,” but this decision was later reversed by the First Circuit, and the Supreme Court declined to hear an appeal.

² Furthermore, the judge compares Kafkaesque civil fines with the criminal copyright infringement liability, and this comparison (again, to the best of my knowledge) is unprecedented in a Bittorent case ruling:

As a comparator, if one of the named Defendants was found criminally liable under 17 U.S.C. § 506 for the same act of infringement, i.e., infringement in an amount less than $2,000, the U.S. Sentencing Guidelines recommend a fine between $1,000 and $10,000. USSG §§ 2B5.3, 5E1.2. Further, if that Defendant were to plead guilty with contrition, the fine would be reduced to a range between $500 and $5,000. Id § 5E1.2

So, today we have this long anticipated decision, and it is good:

[…]IT IS HEREBY ORDERED:

1. Defendant’s Motion for Attorneys’ Fees (ECF No. 175) is GRANTED
in part and DENIED in part. Defendant is awarded attorney fees in the amount
of $100,961. […]

While the defendant asked for $200K, his demands were cut in half: a reduction of fees is traditional in this game, so I hope that the defense is satisfied with the outcome. There is a funny part: even after the judge awarded the fees in principle and his final decision addressing the exact amount was pending, the plaintiff offered to compensate the defendant in the amount of… $5,000.

US Federal Judge
Thomas Rice

Judge Thomas Rice recently made headlines with his statement that high statutory rates in this type of cases may run afoul of the Eight Amendment to the US Constitution. Alas, the judge stopped short of addressing the well-documented allegations of massive fraud upon the US courts by this and similar plaintiffs — Judge Rice simply ignored the evidence provided by the defense over the course of the litigation. This evidence resulted from the defendant’s attorney Chris Lynch enormous research of the “German trail.” This case has been closed, but Lynch’s findings don’t disappear with the case closure, and we will continue analyzing and investigating the international copyright shakedown Mafia and will report on new discoveries.

While this is a big victory over the law abusers, I regret to note that the predatory practice continues unabated: troll David Lowe (one of the plaintiff’s attorneys) still files fraudulent lawsuits in the State of Washington, and his brothers-in-scams in other states are busy extorting citizenry. I hope not for long. If the evidence substantiating one particular fraud — fake declarations and forged signatures filed in nearly 200 cases nationwide — reaches its critical mass and attracts interest of the FBI, we will see a downfall bigger than Prenda’s.

Congratulations to Ryan Lamberson, whose innocence was vindicated, and to his attorney Chris Lynch, whose titanic efforts and superb skills made it possible!

Media coverage

• Techdirt: Judge Awards $100k In Attorney’s Fees Over Copyright Trolling, But Downplays Fraud Aspects
• TorrentFreak: Falsely Accused “Pirate” wins $101,000 in Attorney Fees

Last week DieTrollDie published a letter from a Spokane attorney Christopher Lynch to a Guardaley’s copyright troll David Lowe. In that letter Mr. Lynch indicated that his client wouldn’t cave in to troll’s evidence-free demands and was prepared to fight and win. Surprisingly or not, the troll backed off and dropped the defendant (LHF Productions v Doe 1 et al, WAWD 16-cv-01017). This story was picked up by the tech media (TorrentFreak, Techdirt). So, given the coverage, I won’t elaborate on the obvious — that the trolls are cry-bullies, who tend to run away once they smell the trouble of a competent defense. However, I want to dig a bit deeper into one of the reasons behind the troll’s hasty retreat. Particularly, I’d like to elaborate on a mind-boggling fraud that the Guardaley network committed upon the US federal courts in 2012-13, an FBI-probe-worthy fraud that outdid the infamous Prenda’s forgery:

We will also seek discovery of the relationship of Messrs. Macek and Arheidt to the fictitious “Darren M. Griffin.” […]

We have a spreadsheet of over 600 federal cases where parties related to your client’s foreign representatives filed a declaration of “Darren M. Griffin.” Most of these declarations are verbatim copies of the 21 paragraph Macek and Arheidt declarations filed by your firm claiming the witness was “retained as a consultant” by Maverickeye or Crystal Bay Corporation “in its technical department.” Most of the 600+ Griffin declarations do not state any education or work experience sufficient to admit the typed-up charts of alleged infringement. But, interestingly, the 42 “Darren M. Griffin” declarations filed in the WD WA claim “Darren M. Griffin” has “a degree in computer science.” This is at odds with the APMC playbook I discovered where the apparent goal is to downplay the declarant’s credentials “hoping the judge won’t question his qualifications too much.” It was bold of your client’s foreign representatives to tell the Judges of our Western District of Washington in 42 declarations that a fictitious declarant has a college degree – just like it was bold to tell Judge Rice that “Darren M. Griffin” is a former investigator for Crystal Bay Corporation. If we go forward, we will expect cooperation on discovery of how LHF witnesses Messrs. Arheidt and Macek are connected to “Darren M. Griffin” and to Crystal Bay Corporation.

Where in the world is Darren Griffin?

Darren Griffin

There are piles of evidence suggesting that Darren Griffin¹, a purported “expert” that signed more than 500 declarations, does not exist. I have no idea why the trolls decided to fool the judges on such a massive scale, jeopardizing their otherwise smooth extortion machine, but it is what it is: 30 federal district courts were most likely brazenly defrauded.

Those who follow copyright trolling cases know that it was Chris Lynch who first suspected that Darren Griffin is not a real person (Elf-Man v. Lamberson, WAED 13-cv-00395). This suspicion was reaffirmed when the troll, instead of simply supplying Darren Griffin in flesh, attempted to cut and run by dismissing the case. Fortunately, the defendant was compensated for his troubles: the court awarded $100K in fees. Unfortunately, the Griffin fraud was swept under the judicial carpet at that time.

Later, an Iowa defendant in Killer Joe Nevada v. Leaverton (IAND 13-cv-04036, appealed to CA8) also questioned Griffin’s existence. The accusations prompted a tap dance by one of the troll network coordinators — Keith Vogt (scroll down to read the emails): he did not contest the fact that Griffin was a fiction. Instead, he tried to imply that there was no “ethical concern,” since at the time of the filing the he did not know that Griffin was not a real person.

Even though the defendant technically won (the case was dismissed with prejudice), unlike in Lamberson the court denied attorney’s fees, and the Eighth Circuit affirmed this denial. And the Griffin fraud was swept under the rug. Again.

Although it is depressing that both the architects and the implementers of such an obvious massive fraud have not been held accountable, I hope that more defendants will press for discovery in the future, and maybe some judge will refer the crooks to the FBI/DOJ, like Judge Wright did, when he sent the Prenda train on the collision course with the wheels of justice.

Guardaley’s secretive operations aimed at shaking down hard-working Americans by abusing the court system has been always a deep rabbit hole to travel. If I start following the other leads provided by Mr. Lynch (conflicting declarations, non-existent evidence, legality of unlicensed investigations, etc.), I risk not to finish this post. That does not mean that I won’t explore other wrongdoings in the future. However, for today, I leave it here. I have reasons to believe that in building a criminal case against Prenda, the alphabet agencies extensively used my humble work as a reference, so I hope that this post will be equally useful.

One important note: while the racket’s senior players (Keith Vogt, Carl Crowell, Michael Hierl, Richard Fee et al) are undoubtedly aware of the Griffin situation, I’m sure that many of the attorneys listed below simply submitted whatever was sent to them by the troll masters. While it does not excuse those attorney’s lack of candor and the duty to verify what they file with the courts, their actions don’t raise to the level of a deliberate fraud.

The list of cases with forged declarations and attorneys who filed them

• ALSD: 1:13-cv-00306. Attorney: James Hunter Adams
• AZD: 2:13-cv-00595, 2:13-cv-00597, 2:13-cv-00299. Attorney: Michael E. Gerity
• COD: 1:12-cv-00671, 1:13-cv-01778, 1:13-cv-00686, 1:13-cv-01292, 1:13-cv-01309, 1:13-cv-01340, 1:13-cv-00688, 1:13-cv-02911, 1:13-cv-02921, 1:13-cv-02974, 1:13-cv-02984, 1:13-cv-02998, 1:13-cv-03026, 1:13-cv-03056, 1:13-cv-03071, 1:13-cv-03079, 1:13-cv-03100, 1:13-cv-03203, 1:13-cv-02200, 1:13-cv-02214, 1:13-cv-02312, 1:13cv-2341, 1:13-cv-02380, 1:13-cv-02627, 1:13-cv-02635, 1:13-cv-02645, 1:13-cv-00413, 1:13-cv-00414, 1:13-cv-00431, 1:13-cv-00432, 1:13-cv-00433, 1:13-cv-01343, 1:13-cv-01461, 1:13-cv-01476, 1:13-cv-01630, 1:13-cv-01691, 1:13-cv-02950, 1:13-cv-03197, 1:13-cv-00687, 1:13-cv-00900, 1:13-cv-00902, 1:13-cv-00903, 1:13-cv-01121, 1:13-cv-01122, 1:13-cv-01123, 1:13-cv-00339, 1:13-cv-00342, 1:13-cv-00377, 1:13-cv-00378, 1:13-cv-00392, 1:13-cv-00395, 1:13-cv-00396. Attorneys: Scott Kannady, David J. Stephenson
• DED: 1:13-cv-00487, 1:13-cv-00488, 1:13-cv-00489, 1:13-cv-00677, 1:13-cv-00679, 1:13-cv-00680, 1:13-cv-00681, 1:13-cv-00682, 1:13-cv-01223, 1:12-cv-01746, 1:13-cv-00091, 1:13-cv-00092. Attorney: Stamatious Stamoulis
• FLMD: 8:13-cv-00905, 8:13-cv-00906, 6:13-cv-00595, 6:13-cv-00594, 2:13-cv-00279, 8:13-cv-01154, 8:13-cv-01155, 8:13-cv-01156, 2:13-cv-00331, 2:13-cv-00332, 8:12-cv-02436, 8:12-cv-02435, 8:13-cv-02209, 8:13-cv-02210, 8:13-cv-02211, 8:13-cv-02212, 8:13-cv-02213, 6:13-cv-01343, 6:13-cv-01344, 6:13-cv-01345, 6:13-cv-01346, 6:13-cv-01347, 6:13-cv-01348, 5:13-cv-00425, 2:13-cv-00643, 8:13-cv-01103, 8:13-cv-01104, 8:13-cv-00872, 8:13-cv-00873, 8:13-cv-00874, 6:13-cv-00567, 6:13-cv-00568, 6:13-cv-00569, 5:13-cv-00172. Attorneys: Catherine Yant, Richard Fee
• GAND: 1:13-cv-00882, 1:13-cv-00883, 1:13-cv-00886, 1:13-cv-00888, 1:13-cv-00890, 1:13-cv-01076, 1:13-cv-01078, 1:13-cv-01082, 1:13-cv-01086, 1:13-cv-01087, 1:13-cv-01088, 1:13-cv-01098, 1:13-cv-01100, 1:13-cv-01101, 1:13-cv-01102, 1:13-cv-01103, 1:13-cv-01450, 1:13-cv-01492, 1:13-cv-01508, 1:13-cv-01511, 1:13-cv-01513, 1:13-cv-01514, 1:13-cv-01515, 1:13-cv-01516, 1:13-cv-01517, 1:13-cv-01525, 1:13-cv-01527, 1:13-cv-01529, 1:13-cv-00892, 1:13-cv-00893, 1:13-cv-00894, 1:13-cv-00895, 1:13-cv-00896, 1:13-cv-00897. Attorney: Alan Kan
• GASD: 4:13-cv-00038, 4:13-cv-00015, 4:12-cv-00281, 4:12-cv-00282, 4:12-cv-00283, 4:12-cv-00284, 4:13-cv-00018, 4:13-cv-00020, 4:13-cv-00037, 4:13-cv-00038, 4:13-cv-00016. Attorney: Nathan C. Belzer
• IAND: 5:13-cv-04036, 2:13-cv-01018, 2:13-cv-01019, 2:13-cv-01020, 3:13-cv-00060, 4:13-cv-00192, 3:13-cv-00060. Attorney: Jay R. Hamilton
• IASD:3:13-cv-00077, 3:13-cv-00074. Attorney: Jay R. Hamilton
• ILCD: 4:13-cv-04041, 4:13-cv-04042, 2:13-cv-02100, 3:13-cv-03124, 3:13-cv-03125, 3:13-cv-03127, 4:13-cv-04081, 13-cv-04081. Attorney: Keith A. Vogt
• ILND: 1:13-cv-04710, 1:13-cv-04711, 1:13-cv-04712, 1:13-cv-04714, 13-cv-02368, 1:13-cv-03884, 1:13-cv-02362, 1:13-cv-04293, 1:13-cv-04901, 1:12-cv-05810, 1:12-cv-05817, 1:12-cv-05821, 1:12-cv-05822, 1:12-cv-05823, 1:12-cv-05825, 1:12-cv-05827, 1:12-cv-05828, 1:12-cv-09036, 1:12-cv-09039, 1:12-cv-09041, 1:12-cv-09043, 1:12-cv-09043, 1:13-cv-02364, 1:13-cv-03823, 1:13-cv-03824, 1:13-cv-03825, 1:13-cv-03826, 1:13-cv-03827, 1:13-cv-03828, 1:13-cv-03829, 1:13-cv-03833, 1:13-cv-03834, 1:13-cv-03837, 1:13-cv-03839, 1:13-cv-03840, 1:13-cv-03841, 1:13-cv-03842, 1:13-cv-03844, 1:13-cv-03845, 1:13-cv-06646, 1:13-cv-06650, 1:13-cv-06654, 1:13-cv-06657, 1:13-cv-06660, 1:13-cv-06663, 1:13-cv-06667, 1:13-cv-06671, 1:13-cv-06727, 1:13-cv-06728, 1:13-cv-06729, 1:13-cv-06770, 1:13-cv-67729, 1:13-cv-06965, 1:13-cv-07074, 1:13-cv-02368, 1:13-cv-00064, 1:13-cv-00065, 1:13-cv-00066, 1:13-cv-00067, 1:13-cv-00068, 1:13-cv-00071, 1:13-cv-01321, 1:13-cv-01323, 1:13-cv-01724, 1:13-cv-01741, 1:13-cv-01742, 1:13-cv-01743, 1:13-cv-01744, 1:13-cv-01745, 1:13-cv-01746, 1:13-cv-01747, 1:13-cv-01748, 1:13-cv-01749. Attorneys: Keith A. Vogt, Michael A. Hierl
• INND: 2:13-cv-00320, 2:13-cv-00459, 2:13-cv-00460, 2:13-cv-00461, 2:13-cv-00462, 2:13-cv-00463, 2:13-cv-00464, 2:13-cv-00465, 2:13-cv-00466, 2:13-cv-00467, 2:13-cv-00468, 2:13-cv-00469, 2:13-cv-00470, 2:13-cv-00471, 2:13-cv-00472, 2:13-cv-00473, 2:13-cv-00474, 2:13-cv-00475, 2:13-cv-00476, 1:13-cv-00296. Attorney: Keith A. Vogt
• INSD: 1:13-cv-01629. Attorney: Keith A. Vogt
• LAED: 2:13-cv-05310, 2:13-cv-05006, 2:13-cv-05320, 2:13-cv-03064. Attorney: Alexa Stabler-Adams
• LAND: 5:13-cv-04059. Attorney: Alexa Stabler-Adams
• LASD: 3:13-cv-00060, 4:13-cv-00271. Attorney: Alexa Stabler-Adams
• MIED: 2:13-cv-14322. Attorney: Paul Nicoletti
• MND: 0:13-cv-01727, 0:13-cv-02779. Attorneys: Keith A. Vogt, Mark Anfinson
• MOED: 13-cv-00577, 4:12-cv-02020, 4:13-cv-00388, 4:13-cv-00576, 4:13-cv-00832, 4:12-cv-02022, 4:13-cv-00285, 4:12-cv-01741, 4:12-cv-01742, 4:12-cv-01743, 4:12-cv-01754, 4:13-cv-00430, 4:12-cv-02019, 4:13-cv-00020, 4:13-cv-00290. Attorney: Nelson Nolte, Joel R. Samuels, Joann M. Swartz
• NJD: 1:12-cv-06539, 1:12-cv-06611, 1:12-cv-06633, 1:13-cv-00482, 1:13-cv-00483, 1:13-cv-00484, 1:13-cv-00485, 1:13-cv-00486, 1:13-cv-00487, 1:12-cv-06885. Attorney: Stamatious Stamoulis
• OHND 1:13-cv-00800, 1:13-cv-00801, 1:13-cv-00802, 1:13-cv-00803, 1:13-cv-00804, 1:13-cv-00805, 1:13-cv-00806, 1:13-cv-00807, 1:13-cv-00808, 1:13-cv-00461, 1:13-cv-00727, 1:13-cv-01037, 1:13-cv-01038, 1:13-cv-01039, 1:13-cv-01040, 1:13-cv-01041, 1:13-cv-00459, 1:13-cv-00396, 1:13-cv-00397, 1:13-cv-00460, 1:12-cv-02822, 1:12-cv-02832, 1:12-cv-02895, 1:12-cv-02919, 1:12-cv-02920, 1:12-cv-02929, 1:12-cv-02951, 1:12-cv-02812, 1:12-cv-02820, 1:12-cv-02831, 1:13-cv-00595, 1:12-cv-02812, 1:12-cv-02820, 1:12-cv-02831, 1:12-cv-02894, 1:13-cv-00463, 1:13-cv-00464, 1:13-cv-00465. Attorneys: Yousef Faroniya, Butler, Douglas Riddell
• OHSD: 2:13-cv-00040, 2:13-cv-00042, 2:13-cv-00389, 2:13-cv-00390, 2:13-cv-00391, 2:13-cv-00392, 2:13-cv-00393, 2:13-cv-00394, 2:13-cv-00395, 2:13-cv-00396, 2:13-cv-00849, 2:13-cv-00194, 2:13-cv-00439, 2:13-cv-00440, 2:13-cv-00441, 2:13-cv-00442, 2:13-cv-00848, 2:13-cv-00182, 2:13-cv-00183, 2:13-cv-00839, 2:13-cv-00193, 2:12-cv-01112, 2:12-cv-01113, 2:12-cv-01115, 2:12-cv-01116, 2:12-cv-01117, 2:12-cv-01120, 2:12-cv-01136, 2:12-cv-01137, 2:12-cv-01138, 2:12-cv-01139, 2:13-cv-00043, 2:13-cv-00044, 2:13-cv-00045, 2:13-cv-00046, 2:13-cv-00252, 2:12-cv-01090, 2:12-cv-01102, 2:12-cv-01110, 2:12-cv-01111, 2:13-cv-00525, 2:13-cv-00534, 2:13-cv-00535, 2:13-cv-00536, 2:13-cv-00539, 2:13-cv-00540, 2:13-cv-00688, 2:13-cv-00690, 2:13-cv-00691, 2:13-cv-00842, 2:13-cv-00843, 13-cv-02368, 3:13-cv-00855, 3:13-cv-00856, 3:13-cv-00857, 3:13-cv-00858, 2:12-cv-01090, 2:12-cv-01102, 2:12-cv-01111, 2:12-cv-01112, 2:13-cv-00196, 2:13-cv-00197, 2:13-cv-00198, 2:13-cv-00201, 2:13-cv-00202, 2:13-cv-00203, Attorneys: Leon Bass, David Butler, Douglas Riddell
• TNED: 3:13-cv-00129, 3:13-cv-00075, 3:13-cv-00076, 3:13-cv-00077, 3:12-cv-00602, 3:12-cv-00603, 3:12-cv-00597, 3:13-cv-00184, 3:13-cv-00185, 3:13-cv-00186, 3:13-cv-00187, 3:13-cv-00217, 3:13-cv-00218, 3:13-cv-00219, 3:13-cv-00220, 3:13-cv-00221, 3:13-cv-00222, 3:13-cv-00223, 3:13-cv-00224, 3:13-cv-00225, 3:13-cv-00226, 3:13-cv-00227, 3:13-cv-00228, 3:13-cv-00037, 3:13-cv-00263, 3:13-cv-00262, 3:12-cv-00601, 3:13-cv-00599, 3:13-cv-00251, 3:13-cv-00252, 3:13-cv-00253, 3:13-cv-00254, 3:13-cv-00255, 3:13-cv-00256, 3:13-cv-00257, 3:13-cv-00258, 3:13-cv-00259, 3:13-cv-00260, 3:13-cv-00261, 3:12-cv-00642, 3:12-cv-00643, 3:12-cv-00644, 3:13-cv-00128, 3:13-cv-00058, 3:13-cv-00043. Attorney: Van R. Irion
• TNMD: 3:13-132, 3:12-cv-01124, 3:13-cv-00159, 3:12-cv-01123, 3:12-cv-01247, 3:13-cv-00132, 3:13-cv-00133, 3:13-cv-00134, 3:13-cv-00135, 3:13-cv-00136. Attorney: Klinton W. Alexander
• TNWD: 2:13-cv-02528, 2:13-cv-02529, 2:13-cv-02530, 2:13-cv-02531, 2:13-cv-02532, 2:13-cv-02550, 2:13-cv-02551, 2:13-cv-02552, 2:13-cv-02553. Attorney: Van R. Irion
• TXND: 3:13-cv-03927. Attorney: Keith A. Vogt
• TXSD: 4:13-cv-03082. Attorney: Keith A. Vogt
• WAWD: 2:13-cv-00228, 2:13-cv-00063, 13-cv-00328, 2:13-cv-00194, 2:13-cv-00255, 2:13-cv-00256, 2:13-cv-00277, 2:13-cv-00278, 2:13-cv-00287, 2:13-cv-00288, 2:13-cv-00289, 2:13-cv-00455, 2:13-cv-00457, 2:13-cv-00458, 2:13-cv-00459, 2:13-cv-00460, 2:13-cv-00461, 2:13-cv-00462, 2:13-cv-00307, 2:13-cv-00308, 2:13-cv-00309, 2:13-cv-00310, 2:13-cv-00311, 2:13-cv-00312, 2:13-cv-00313, 2:13-cv-00314, 2:13-cv-00315, 2:13-cv-00316, 2:13-cv-00317, 2:13-cv-00318, 2:13-cv-00319, 2:13-cv-00050, 2:13-cv-00051, 2:13-cv-00052, 2:13-cv-00053, 2:13-cv-00054, 2:13-cv-00055, 2:13-cv-00056, 2:13-cv-00057, 2:13-cv-00456. Attorney: Richard J. Symmes
• WIED: 2:13-cv-00666, 2:13-cv-00667, 2:13-cv-00539, 2:13-cv-00554, 2:13-cv-01022, 13-cv-01022. Attorney: Keith A. Vogt
• WIWD: 3:13-cv-00275, 3:13-cv-00276, 3:13-cv-00279, 3:13-cv-00280, 3:13-cv-00277, 3:13-cv-00295, 3:13-cv-00296, 3:13-cv-00297, 3:13-cv-00298, 3:13-cv-00299, 3:13-cv-00300, 3:13-cv-00281, 3:13-cv-00282, 3:13-cv-00283, 3:13-cv-00634. Attorney: Keith A. Vogt

The list of plaintiffs

• Battle Force LLC (2)
• Bicycle Peddler LLC (7)
• BKGTH Productions LLC (8)
• Bleiberg Entertainment LLC (5)
• Breaking Glass Pictures LLC (34)
• D3 Productions LLC (3)
• Dead Season LLC (2)
• Dimentional Dead Productions LLC (2)
• Dragon Quest Productions LLC (2)
• Elf-Man LLC (8)
• Flypaper Distribution LLC (1)
• Georgia Film Fund Four LLC (19)
• Killer Joe Nevada LLC (50)
• Ledge Distribution LLC (3)
• Lynn Peak Productions Inc (11)
• Maxcon Productions Inc (2)
• NGN Prima Productions Inc (1)
• Night of the Templar LLC (6)
• Osiris Entertainment LLC (1)
• Pounds Pictures Inc (2)
• Power of Few LLC (11)
• Private Lenders Group Inc (6)
• R&D Film 1 LLC (62)
• Riding Films Inc (17)
• RynoRyder Productions Inc. (3)
• Safety Point Productions LLC (8)
• Sibling The Movie LLC (4)
• SoJo Productions Incorporated (1)
• TCYK LLC (128)
• Thompsons Film LLC (7)
• TriCoast Smitty LLC (1)
• Vision Films Inc. (17)
• Voltage Pictures LLC (81)
• Zambezia Film Ltd (44)

How many differences can you spot?

Followup

• Copyright troll David Lowe drops three defendants after defense attorney threatens to expose fraud

¹ Maybe it is a mere coincidence, maybe not: it pays to remind that “Griffin” was the surname of Herbert Wells’s Invisible Man.

Michael Hierl

Today one of the defendants in Clear Skies Nevada v Does 1-30 (ILND 15-cv-06708) filed a third-party class action complaint against the plaintiff (CSN), two copyright troll attorneys from a Chicago mid-sized lawfirm “Hughes Socol Piers Resnick & Dym, Ltd.” – Michael Hierl and Mark Cisek – and two Guardaley’s “experts”: a fictional character Darren Griffin and a German national Daniel Macek:

[…] Plaintiff uses German corporations and/or German nationals, claiming they possess “expert qualifications” they do not, so as to complicate and discourage depositions and discovery. […]

The complaint is kind of emotional: the defendant’s attorney Lisa Clay tells a gruesome story of her client – a 62-year-old African-American lady of very modest means (“She lacked the financial means to obtain proper medical treatment for her symptoms”) and two ethically challenged attorneys, who harassed her for months, trying to extort a couple of thousand dollars from her, threatening with a possibility of insane maximum statutory damages ($150,000) – all without sufficient evidence:

Hierl and Cisek, with the knowledge and consent of co-conspirators CSN and German John Doe [Griffin/Macek], and more importantly, with the knowledge that evidence provided by German John Doe is insufficient to meet evidentiary standards, filed suit against 360 anonymous Does in seven cases filed on June 29, 2015 and eight cases filed on July 31, 2015.

Mark Cisek

In the beginning, the defendant understandably thought that she was a target of a scam, failed to respond to the allegations¹, and default was entered against her. This default was later set aside, and the Answer was filed yesterday.

Accusations presented in this complaint are hardly new to the readers of this blog. The defendant alleges a conspiracy to improperly prosecute copyright infringement (including theft by deception, deceptive practices, barratry, and maintenance). The defendant claims that the Germans seeded the allegedly infringed film Good Kill – a kind of an allegation that resulted in a criminal indictment against copyright trolls John Steele and Paul Hansmeier.

Upon information and belief, CSN, German John Doe(s), or one of his/her/their agents seeded a copy of Good Kill after copyright protection was requested, but before the movie was released in American theaters. The date on CSN’s Certificate of Registration is February 27, 2015. The first date of alleged infringement on an exhibit is April 4, 2015, at least a month before the movie was released in theaters.

Upon information and belief, CSN and its co-conspirators intentionally released Good Kill into the bit torrent environment knowing, authorizing and inviting its copying and distribution.

Interestingly, the complaint hints that the trolls purported to drop the claims exactly because of the Prenda indictment:

On or about December 19, 2016, several days after indictments of Paul Hansmeier and John Steele had been announced, Hierl approached the undersigned about settlement. Attorney Clay reminded Attorney Hierl that her clients had no money. Hierl suggested, “[m]aybe we can work something out for those who don’t steal with impunity.” (Clay Declaration, ¶ 8)

Michael Hierl is one of the most odious figures in the Guardaley racket, believed to be a senior member of the gang. His name can be found on a couple of copyright registrations of the movies used in the shakedown. The firm Hughes Socol Piers Resnick & Dym has been in the business of extorting Illinois residents since 2012, and it is tainted by the Griffin fraud: dozens of forged declarations were filed with the ILND court by its attorneys Michel Hierl, Todd Pankhurst, and Karyn Bass Ehler (who left the firm two years ago). This firm filed 451 shakedown cases, all against multiple defendants, robbing Illinois residents of millions, a lion share of which was transferred to a foreign cartel.

The complaint features many exhibits (see the docket), including my 2014 story about Gurdaley’s “Devil’s cookbook” – a leaked presentation describing the mechanics of the international bittorent racket. Also, I’m happy to learn from the complaint that Ms. Clay has been in touch with one of the most knowledgeable bittorent defense attorneys, Chris Lynch of Spokane, Washington: just recently I wrote about his promise to expose fraud, which resulted in a hasty dismissal of his clients.

A class action lawsuit is a complex and uphill battle. In the history of copyright trolling we witnessed only a few: Dmitry Shirokov v DGW, which was somewhat successful, Jennifer Barker v Patrick Collins et. al. (which was not). Last year Rightscorp agreed to settle for $450,000 in another bittorent-related class action. That’s all I’m aware of.

Watching how the Northern Illinois District has been allowing the slow chronic trolling disease to linger, I grew skeptical about a possibility of any improvement anytime soon. However, I still hope that this action will be successful, because it’s about time: as I recently wrote, “[Steele & Hansmeier’s indictment] resurrects my hopes that this judicial plague is curable.” Needless to say, I will be closely watching this case and report on developments.

Coverage

• TorrentFreak: ‘Copyright Trolls’ Hit With Class Action Lawsuit For Theft by Deception

Update

1/11/2017

Yesterday the defendant decided to voluntarily dismiss her third-party class action complaint, as well as and counterclaims.

At a status [hearing] on January 4, 2017, Judge Kendall advised the parties that she does not believe the counterclaim or third-party complaint arise from the infringement case, and suggested to both parties that they “determine whether [there is] an appropriately filed third party complaint.”

[…]

The undersigned does not wish to waste the time and resources of the court and counsel with fruitless motion practice. Rather, the undersigned represents that she prefers to invest those resources into meeting the deadlines set by Judge Kendall at the January 4, 2017 status.

It was not a surprise, given the judge’s annoyance at being dragged into an “international conspiracy dispute,” and possibly procedurally deficient approach that the defendant chose to attack the crooks. Uphill battles are noble, but when the chances of winning are slim, it is wise to step back and regroup.

Although disappointing, this defendant’s decision doesn’t mean that the complaint claims are ivalid, and I hope that this (or a different) defendant initiate another, legally sound, class action against the shakedown artists in the foreseeable future.

In any case, the complaint attracted a lot of public attention to the ongoing abuse, which is always good. Especially in the post-Prenda-indictment era.

¹ The complaint states that “[…] internet research suggested that Hierl was a troll attorney, and based on advice on various blogs and websites, the Hancocks decided to ignore the letters.” Frankly, I’m not aware of major “blogs and websites” that would give such an ill advice. Maybe there are some (Reddit?), however, both this blog and DieTrollDie’s never advised to ignore court papers.

Chief Judge Ricardo S. Martinez

WAWD Chief Judge Ricardo Martinez knows what’s going on in his district with a flurry of copyright infringement Bittorent lawsuits steered by foreign criminals and unscrupulous US attorneys. Well, maybe the judge does not know the exact details of the racket, but he obviously smells rampant abuse.

Today Judge Martinez ruled on the motions for default judgment against 28 defendants in five cases, awarding minimum statutory damages ($750) per case, $550 in attorney’s fees per defendant, and various per-defendant costs (in the $90-150 range):

• LHF Production v Does 1-9 (WAWD 16-cv-01175) – 6 defaulted defendants
• LHF Production v Doe 1, et. al. (WAWD 16-cv-00731) – 8 defaulted defendants
• LHF Production v Doe 1, et. al. (WAWD 16-cv-00864) – 7 defaulted defendants
• LHF Production v Doe 1, et. al. (WAWD 16-cv-01017) – 3 defaulted defendants
• LHF Production v Doe 1, et. al. (WAWD 16-cv-00551) – 4 defaulted defendants

The copyright troll attorney (David “He said Griffin!” Lowe) asked for $2,500 in damages along with $2,605.50 in attorney’s fees – per defendant. He didn’t get what he wanted by a large margin.

Statutory damages

Judge Martinez wasn’t impressed by an overboard demand:

LHF argues that a statutory damage award of $2,500 per defendant should be awarded. The Court is not persuaded. Statutory damages are not intended to serve as a windfall to plaintiffs, and enhanced statutory damages are not warranted where plaintiffs do not even try to demonstrate actual damages. Additionally, the Court notes that LHF has not shown that any of the Defendants is responsible for the “seed” file that provided LHF’s copyrighted work on the BitTorrent network, and LHF has not presented evidence that Defendants profited from the infringement.

So, the judge awarded the very minimum ($750), which becomes increasingly common these days. However, there is something new that I never saw in the past (emphasis is mine):

[…] Because the named Defendants in this action were alleged to have conspired with one another to infringe the same digital copy of LHF’s motion picture, the Court will award the sum of $750 for Defendants’ infringement of the same digital copy of London Has Fallen. Each of the Defendants is jointly and severally liable for this amount.

You read it correctly: the judge ruled that each case’s minimum statutory award should be split among the defaulting defendants, which effectively yields $94-$250 per person.

Indeed, if the troll lumps together multiple Does to pay a single filing fee, and he justifies this conduct by claiming that the defendants were a part of a single transaction, he should accept the consequences: the award will also be “a single transaction.”

The fun continues: Lowe filed 96 pages of exhibits to explain his demand of higher compensation. Particularly, exhibits C and D feature DieTrollDie’s and Raul’s tweets, which mocked a $750 judgement in a different Guardaley’s case:

Super Lawyer David A. Lowe obtains a whopping $750 (c) infringement award for his client, #DallasBuyersClub + fees. https://t.co/v1sgyg8o6Q

— Raul (@Raul15340965) November 4, 2015

WAWD judge awards Min damages ($750) to #Copyright Troll Dallas Buyers Club against 19 Defendants (Defaults) – https://t.co/ildbmH0YxO

— DieTrollDie (@DieTrollDie) August 9, 2016

Lowe disingenuously and falsely implied that both DTD and Raul advocated ignoring federal lawsuits:

13. Attached as Exhibit C is a true and accurate copy of a November 4, 2015 social media Tweet posted by a known BitTorrent advocate belittling the Court’s award of $750 minimum statutory damages in Dallas Buyers Club, LLC v. Madsen […]

14. Attached as Exhibit D is a true and accurate copy of an August 9, 2016 social media Tweet posted by a known BitTorrent advocate belittling the Court’s awards on the same day of $750 minimum statutory damages against 19 defaulted defendants in Dallas Buyers Club cases. The post further encourages defendants to take default judgments rather than appear or otherwise resolve the case.

Not surprisingly, the judge didn’t buy this hilariously moronic argument:

LHF also cites to tweets which appear to mock statutory minimum awards in other BitTorrent cases. […]. The Court is not persuaded that viewpoints of individuals not named as defendants in this matter should be attributed to Defendants. LHF has presented no evidence that Defendants in this case will not be dissuaded from infringing in the future. Many barriers to accessing and understanding the legal system exist, and the Court refuses, absent evidence to the contrary, to adopt the position advocated by LHF. The Court “is [thus] not persuaded that a higher award is appropriate simply because certain members of the BitTorrent community are not impressed by a $750 award against someone they do not know.” […]

Attorney’s fees

Our glee doesn’t end here. The judge essentially called bullshit Lowe’s claim that he spent 5.4 hours per defendant:

While there is nothing wrong with LHF’s filing of several infringement claims, it is wrong for LHF’s counsel to file identical complaints and motions with the Court and then expect the Court to believe that it spent hundreds of hours preparing those same complaints and motions.

[…]

There is nothing unique, or complex, about engaging in what can only be described as “the essence of form pleading,” and the Court will not condone unreasonable attorneys’ fees requests.

Instead of awarding the unreasonable number of hours requested by LHF, the Court will award Mr. Lowe one (1) hour, at an hourly rate of $300, to compensate his firm for the time he worked on each named Defendant, and one (1) hour, at an hourly rate of $250, to compensate his firm for the time his associate attorney worked on each named Defendant. The Court will not award any of the time attributed to Mr. Lowe’s legal assistant; review of the declarations submitted indicate that Mr. Lowe’s legal assistant performed purely administrative tasks in this matter.

Non-porn bittorent lawsuits are not profitable if each case is filed against a single defendant. Lipscomb tried to do it, and it was a total loss. So, if courts around the country severed all the defendant but one (and I hope that recent severance rulings in Georgia and Maryland become a solid trend), single-movie, non-porn Bittorent copyright trolling would become unprofitable. Reducing profit in multi-Doe lawsuits, like it happened in the cases discussed in this post, is a fatal blow to the troll as well – from an opposite direction.

Sensing that the mass lawsuit gravy train is slowing down, one of the lead Guardley’s troll attorneys, Carl Crowell, already came up with a new idea of robbing US citizens cheaply, but it is another post’s topic…

Half a year ago I wrote:

Copyright troll lawyers are a highly motivated and somewhat resourceful bunch, yet their ranks are small compared to the sheer number of citizens those attorneys have been shaking down for years. While most defendants pay the ransom, many chose to fight back, and with every new pushback fresh defense attorneys bring new ideas, and some of those ideas are statistically destined to success.

A new, successful defense strategy was demonstrated yesterday by a Chicago attorney Susan Malter, who represented one of the Does in LHF Productions v John Does 1-26 (ILND 16-cv-09324). After the defense filed a motion to dismiss and 26(b) motion for leave to take discovery prior to rule 26(f) conference, the plaintiff voluntarily dismissed the entire case¹. On the same day.

Michael Hierl

This Guardaley-driven lawsuit targeted alleged downloaders of one of the worst movies of 2016 – London Has Fallen. It was filed on 9/28/2016 by one of the most prolific copyright trolls – Michael Hierl of Hughes Socol Piers Resnick & Dym, Ltd. This medium-sized law firm is responsible for hundreds and hundreds of frivolous bittorent lawsuits, many of which relied on forged declarations of a fictitious “expert” Darren Griffin. According to Ms. Malter, these lawsuits disproportionally targeted low income victims.

One of such victims contacted Chicago Volunteer Legal Services – an organization, whose stated mission is to “coordinate, support and promote the voluntary pro bono legal representation of the Chicago area’s poor and working poor,” and this non-profit subsequently contacted Ms. Malter, who first filed a motion to proceed anonymously (granted on 4/24), and then the motion to dismiss/discovery:

As its title suggests, this is a two-part motion. The first part asked the court to dismiss the complaint for failure to state a claim. The accompanying memorandum, embedded at the bottom of the post, eloquently reiterated mostly known defenses: that an IP address is not equal to a person, that the plaintiff didn’t sufficiently plead the copying of the entire work, etc.

However, the other part of the motion is something new: the defendant demanded that the troll would disclose the identities of the other 25 defendants:

Plaintiff has an unfair advantage of information during ongoing settlement talks due to the third-party discovery data that was obtained from Comcast.

[…]

Rule 1 of the Federal Rules of Civil Procedure states that the Rules should be construed, administered, and employed to secure a just, speedy, and inexpensive determination of every action. The ability of Defendant to consult with co-defendants would remove the unjust discrepancy in information between the parties during settlement.

It looks like particularly this request was the reason behind the same-day voluntary dismissal.

The fact that copyright trolls often drop defendants who fight back is nothing new, and it is relatively easy to invent a plausible explanation that fits judges’ credulity framework in a case of a single dismissal. However, dropping the entire case over a simple, non-burdening discovery demand (which any legitimate plaintiff litigating a meritorious case wouldn’t even think about opposing) is fishy, to put it mildly. A logical explanation of such conduct is that Mr. Hierl and his German co-conspirators are scammers on a quest for low-hanging fruit.

As if it was news.

If such a motion were granted, the other defendants would be empowered to share defense strategies and likely learn from each other that few of them (if any) downloaded this excuse of a film. The troll wouldn’t want such collaboration to happen.

The takeaway from this hasty dismissal is simple: any defendant in a mass bittorent lawsuit should file a similar motion and, if the defendant is of modest means, he/she should contact the CVLS (I hope organizations that secure a competent pro bono representation exist in other states). An added bonus is that such a volunteer attorney would lack the incentive to push her client to settle.

¹ Six defendants were dismissed with prejudice, which means that they surely settled. Thus, despite the dismissal, this case appeared to be windfall-profitable.

Remember Elf-Man v. Lamberson (WAED 13-cv-00395) — a bittorent copyright infringement case that resulted in the troll (Guardaley) paying $100K attorney’s fees to an innocent defendant? It was an encouraging victory, a proof that a fighting victim can prevail over the secretive network of foreign “investors” and unethical attorneys who, as Judge Otis Wright aptly put it, have been “plundering the citizenry” for almost a decade.

In addition to giving hope to victims, this case lifted a cover of mystery from the trolls’ operations. Because of the defendant’s attorney Christopher Lynch’s diligent work, the public learned some of the trolls’ secrets (for example, the Griffin fraud, which is still waiting for a deserved attention from the alphabet agencies).

While almost three years passed since the judgment, it looks like this case still hides a ticking bomb or two – in the form of sealed exhibits – and has a potential of damaging the copyright trolling industry.

On 10/31/2017 the Center for Justice – a Spokane nonprofit organization “dedicated to access to justice, government accountability, and judicial transparency” – filed the motions to intervene and to unseal six exhibits:

In short, several of the documents filed under seal may expose how film companies, investigators and lawyers have coordinated an illegal settlement factory, sending threatening and deceptive letters to hundreds of targets, and seeking quick settlements priced just low enough that it is less expensive for the defendant to pay rather than to defend the claim.

The relevant documents:

• ECF 114: Center for justice’s motion to intervene for the limited purpose of challenging the sealing of court records (embedded above)
• ECF 115: Declaration of Richard K. Eichstaedt in support of center for justice’s motion to intervene (Mr. Eichstaedt is the Executive Director of the Center for Justice)
• ECF 116: Intervenor center for justice’s motion to unseal exhibits
• ECF 117: Declaration of Richard K. Eichstaedt in support of intervenor’s motion to unseal exhibits
• ECF 118: Defendant’s memorandum of support of the center for justice’s motion to intervene
• ECF 119: Defendant’s memorandum of support of the center for justice’s motion to unseal exhibits
• ECF 120: Declaration of J. Christopher Lynch regarding ECF Nos. 114 and 116: this declaration is embedded below; it outlines the history of the case and names the exhibits sought to be unsealed (and explains why):

It is too early to speculate when and if the exhibits in question will be made public. I hope they will, and if so, the new evidence of the trolls’ illegal conduct will help thousands of defendants, and maybe even facilitate a counter-attack against the trolls by means of a class action.

Coverage

• TorrentFreak: Center For Justice Wants Court to Unveil Copyright Trolling Secrets

Updates

11/22/2017

Yesterday both Center for Justice and Christopher Lynch filed their oppositions to the trolls’ last minute requests for a delay:

[…] Given Elf-Man’s role in what appears to be fraud on the U.S. District Court system, Elf-Man should not receive any equity, such as its requested extension of time.

Elf-Man’s Motion, ECF No. 121, and its former counsel’s Motion, ECF No. 122, are filed late in violation of the Local Rules. Elf-Man has unclean hands and this Court should not grant its late motion filings. Mr. Lamberson respectfully requests that these Motions be denied.

• ECF 123: Reply in support of center for justice’s motions to intervene and unseal records
• ECF 124: Defendant’s memorandum in opposition to ECF Nos. 121 & 122
• ECF 125: Declaration of J. Christopher lynch regarding memorandum in opposition to ECF Nos. 121 & 122

2/8/2018

On 2/5/18, Judge Rice granted the stipulated motion to unseal, except 40-1, which was instead redacted and filed as 132-1.

The unsealed documents are:

• ECF 40-1 132-1: Sales agency agreement
• ECF 40-2: Vision Films appointment letter
• ECF 44: The original plaintiff’s attorney Ms. VanderMay’s narrative of the relationship of Mr. Macek to Elf-Man
• ECF 52: Ms. VanderMay’s response to criticism of the Macek explanation
• ECF 66: Vision Films/APMC contract
• ECF 85: The long list of other works the defendant allegedly downloaded (in multiple languages)

I doubt that the unsealing is the intervenor’s end goal: I’m intrigued and waiting for the next steps.

It is fairly common knowledge to those who defend against Malibu Media copyright trolling lawsuits that there is a large percentage of lawsuit targets that cannot afford legal representation. Accordingly, a large portion of these lawsuits result in default judgements, where the defendant gets served, neglects to respond to the lawsuit, and Malibu Media is pro forma granted a judgement that includes money “damages,” injunctive relief to delete the porn from the defendant’s computer, and attorney’s fees. These default judgements are made on motion and are supported by an attorney’s unsworn declaration UNDER PENALTY OF PERJURY that the hourly records supporting the request for fees are true (see 28 U.S.Code § 1746).

Except they are not.

That is at least what Magistrate Judge Charles B. Day found in his Report and Recommendation dated January 5, 2018 in Malibu Media v John Doe (MDD 15-cv-03185).

HUH?

Magistrate Judge
Charles B. Day

What piqued the judge’s interest is that Malibu Media’s local counsel Jon A. Hoppe’s Declaration, dated April 21, 2017 (sealed), requesting attorney’s fees in the sum of $1,182.00 is identical to one that was submitted in another Malibu Media lawsuit in another state by another Malibu Media local attorney:

Plaintiff seeks attorney’s fees of $1,182.00 and costs in the amount of $450.00, for a total request of $1,632.00. In Malibu Media, LLC v. Cowham, Plaintiff also requested attorney’s fees in the amount of $1,182.00. Equally, in Malibu Media, LLC v. Doe, Civ. No. CCB-15-1700, 2016 WL 245235, at *3 (D. Md. Jan. 21, 2016), Chief Judge Blake granted Plaintiff’s request for attorney’s fees plus costs of $1,632.00. Although these cases were brought in different states and had different attorneys of record, the charts included in the supporting declarations for fees were identical.

Consequently, the judge ordered a hearing so that Hoppe could explain this remarkable coincidence and produce documentation to support the request for fees.

THE DOG ATE MY TIME RECORDS

Regrettably, Hoppe was unable to produce the documentation at the hearing because it was his business practice to throw away those records:

At the Hearing, Counsel made clear that the majority of his practice consists of the litigation services he provides to Malibu Media. R. at 10:11:55. Counsel informed the Court that his method for tracking his billable hours consists of recording his time and tasks in a physical notebook/calendar. When preparing a declaration for attorney’s fees, he refers to this calendar and the docket entries of the case. R. at 10:19:51, 10:46:28. Counsel asserted that for his work on all Malibu Media cases, he maintains his calendar until he submits a declaration in support of fees. He then disposes of his calendar on a quarterly basis. It is this practice which prevents the production of Counsel’s time records for the Court’s review. R. at 10:26:04. Counsel advises that he does not send invoices to Malibu Media for services rendered.

Undeterred, the judge asked Hoppe to produce his “calendar” for another, currently pending, Malibu Media lawsuit. Upon inspection of those records, the judge called bullshit:

Counsel’s purported practice of aligning his time records to the docket entries seems haphazard at best. Said practice does not align with the filings in the present case, nor does it align with the docket entries for the case in which time records have been preserved. At the end of the day, I have no confidence in believing that Counsel has followed this practice when preparing fee petitions for Plaintiff.

TURNS OUT HOPPE DID NOT PERFORM THE MAJORITY OF THE WORK

During the hearing Hoppe finally admitted that it is an unsupervised paralegal hired by Malibu Media’s general counsel that performed approximately 80% of the legal work at issue in this case:

The final component of Plaintiff’s request for fees relates to services provided by a paralegal. Counsel produced an Amended Declaration with the resume of Alejandra Albuerne attached. ECF No. 35-1. This resume indicates that Ms. Albuerne is a resident and paralegal in the state of Florida. Id. Counsel indicated that Ms. Albuerne is one of a network of paralegals across the country which Plaintiff’s general counsel supplies to litigation counsel for the prosecution of Malibu Media cases. R. at 10:09:19. Additionally, Counsel indicated that while he met Ms. Albuerne once, she has never performed services for him in the state of Maryland. R. at 10:12:32. Finally, Ms. Albuerne’s resume indicates that she has worked as a paralegal since 2009, being employed by Lipscomb, Eisenberg & Baker, PL and later by Pillar Law Group, APLC/Malibu Media, LLC.2 ECF No. 35-1. Counsel indicated that both of these legal teams have previously served as general counsel for Plaintiff ¹.

Insofar as Hoppe did not really know the paralegal (let alone supervise her), he could not produce her contemporaneous time records, so the judge rejected her portion of the fees request:

The fees for services provided by Ms. Albuerne accounts for almost 80 percent of the total hours billed. ECF No. 29-5, at 2. Counsel stated that in preparing Counsel’s Declaration, he had no direct supervision over Ms. Albuerne’s work performed, and no way of knowing the record-keeping methodology that Ms. Albuerne employed. R. at 10:56:03. Counsel has not provided the Court with any contemporaneous time records to support the vast majority of the hours claimed by her. Accordingly, I find the request for fees generated by Ms. Albuerne to be unsupported.

WHAT THE HELL?

Next the judge pointed out that at least 14 different Malibu Media lawsuits in different states (and involving different local counsel) contain the same Declaration, UNDER PENALTY OF PERJURY, requesting the same $1,182.00 in attorney’s fees. In something of an understatement, the judge found this discovery “troubling” (emphasis supplied):

The Court is aware of at least 14 cases over the course of four years, ranging across seven states where Plaintiff is represented by eight different attorneys. In each instance, counsel presented identical charts in support of a request for attorney’s fees following the entry of default. Only the dates of each task have been changed. See Attachment A. The Court finds troubling that each and every case in Attachment A reflects identical requests, identical hours billed, identical tasks of each attorney, identical tasks of the paralegal, and identical number of emails reviewed. There are even identical “catch-all” provisions requesting fees for blocks of unspecified activities labeled as “case management” and “case tracking.” These categories typically represent the singular bulk of each fee request. There is only one plausible explanation for this multi-state event. General counsel is dictating the fees to be charged and the tasks to be recorded in each declaration seeking an award of fees. While billing judgment and/or flat fee billing may be acceptable, it should not be presented by way of a declaration under oath as if the time records are the result of a more typical and contemporaneous time keeping method.

HOPPE IS A MERE PUPPET FOR MALIBU MEDIA’S RACKET

Near the end of the hearing Hoppe confessed that he signs off on whatever Malibu Media’s general counsel tells him to submit to the court (emphasis supplied):

Near the end of the Hearing, Counsel stated that it is actually Malibu Media’s general counsel that prepares and sends the declarations in support of attorney’s fees to local counsel for approval. R. at 11:06–11:09. It appears local counsel is merely “signing off” on fee petitions at the direction of general counsel and not based upon reliable business practices. While Counsel claims that all of his declarations are based on, and supported by, his “calendar” entries, nothing in his statements elucidates the discrepancies in the time-keeping records submitted in this and the other cases found.

Not only has Malibu Media’s general counsel failed to appear as an attorney of record in any of the 615 lawsuits filed by Malibu Media in Maryland but (emphasis supplied):

General counsel is actively preparing court filings, such as the declarations of local counsel in Maryland and beyond. R. at 11:08-11:16. The Court is concerned that Counsel is simply a conduit for legal work prepared by others who are not members of the bar of this Court or licensed to practice in Maryland.

CONCLUSION: YES, MALIBU MEDIA IS A COPYRIGHT TROLL

In conclusion the judge noted that while Malibu Media has yet to get caught filing fraudulent lawsuits, the business practices uncovered in this lawsuit unquestionably make the label “copyright troll” an apt one for Malibu Media (emphasis supplied):

Plaintiff Malibu Media, LLC, for the last four years has initiated thousands of lawsuits against alleged copyright infringers nationwide. While no court has found that Plaintiff has filed a fraudulent suit, many courts have questioned whether Plaintiff is a “copyright troll,” initiating suits against infringers as a profit-making scheme rather than as a deterrent, as legislators intended. See Malibu Media, LLC v. Doe, No. 15 Civ. 4369 (AKH), 2015 WL 4092417, at *2 (S.D.N.Y. July 6, 2015) (“copyright trolls,” roughly defined as plaintiffs who are ‘more focused on the business of litigation than on selling a product or service or licensing their [copyrights] to third parties to sell a product or service.’). In the present case before this Court, that question is exacerbated by the presence of questionable business practices.

Accordingly, the judge recommended that the requested attorney’s fees in this case should be denied. Magistrate Judge Day’s Report and Recommendation still has to be approved by presiding Judge Theodore D. Chuang. Who knows? Perhaps Judge Chuang will find these “questionable business practices” warrant referral to the appropriate authorities. What is particularly galling about this practice of serving up fraudulent attorney Declarations is that Malibu Media got caught doing the exact thing in New Jersey in 2016, and yet they continue the shenanigans. Arrogant, stupid, greedy or all three? You be the judge.

¹ Currently the Malibu Media shakedown is handled by The Lomnitzer Law Firm from Boca Raton, FL.

The ink was barely dry on a recent Judge Zilly’s devastating order when another federal judge, Michael Simon, delivered a serious blow to the German-based copyright shakedown operation by finding that one of Guardaley’s shell companies – Fathers and Daughters Nevada LLC (F&D) – does not have standing to sue.

In a last week’s order WAWD Judge Zilly questioned the legality of copyright trolling operations, and, among other plaintiff’s shenanigans, called out the troll’s shell game:

In every case now before the Court, plaintiff has filed a corporate disclosure form indicating that it is owned by Lost Dog Productions, LLC, which is owned by Voltage Productions, LLC. […] A search of the California Secretary of State’s online database, however, reveals no registered entity with the name “Lost Dog” or “Lost Dog Productions.” Moreover, although “Voltage Pictures, LLC” is registered with the California Secretary of State, and has the same address as Venice PI, LLC, the parent company named in plaintiff’s corporate disclosure form, “Voltage Productions, LLC,” cannot be found in the California Secretary of State’s online database and does not appear to exist.

US Federal Judge
Michael H. Simon

Today, a federal judge from the neighboring Oregon – Honorable Michael H. Simon – didn’t question the legal status of F&D and connected entities (which include Voltage). However, he granted the defendant’s motion for summary judgement (Fathers and Daughters Nevada LLC v Lingfu Zhang, ORD 16-cv-01443). In that motion, filed on 9/27/2017, the defendant’s attorney David Madden asserted that F&D didn’t possess exclusive rights to sue for copyright infringement, as required by the Copyright Act. Today the judge agreed:

“Under the Copyright Act, only the ‘legal or beneficial owner of an exclusive right under a copyright’ has standing to sue for infringement of that right.” Righthaven LLC v. Hoehn, 716 F.3d 1166, 1169 (9th Cir. 2013) (quoting 17 U.S.C. § 501(b)).

[FN1] Section 501(b) states: “The legal or beneficial owner of an exclusive right under a copyright is entitled . . . to institute an action for any infringement of that particular right committed while he or she is the owner of it.”

On 10/26/2017, plaintiff’s attorney Carl Crowell objected to defendant’s MSJ, but his arguments didn’t persuade Judge Simon.

Since neither the movie licensing scheme nor the law at issue is trivial, I won’t analyze the judge’s arguments, leaving it to professionals (I’m sure this ruling will be discussed in the copyright circles).

One thing worth mentioning though is that the troll apparently tried to deceive (surprise!) both the defendant and the court by creating certain agreements/addendums after the lawsuit was conceived (pp 8 & 15).

I hope that the defense bar will rush to leverage this order and dig deeper into the agreements between film makers and shell companies that formally appear in the court documents as plaintiffs. It is hard to believe that the licensing scheme involving F&D is unique.

And as for F&D, Guardaley filed 24 cases in 8 districts on behalf of this particular plaintiff: all but one is closed, and I didn’t have time to look how many ended up in default judgements or settlements. In my opinion, a class action lawsuit to reclaim money extorted from fraudulently sued citizens is more than warranted.

Coverage

• TorrentFreak: Judge Tells Movie Company That it Can’t Sue Alleged BitTorrent Pirate
• Techdirt: Now Another Judge Smacks Around A Guardaley Shell Company Acting As A Copyright Troll

Related

• Good Man Productions: a zombie troll plaintiff

Update

4/18/2016

On 1/26/2018 Carl Crowell withdrew from the case; he was replaced by Johnathan E. Mansfield and Megan A. Vaniman of Harris|Bricken. The new attorneys moved for reconsideration on 2/14. The defendant opposed on 2/27.

Today Judge Simon denied Plaintiff’s motion, so his ruling – that Fathers and Daughters Nevada does not have standing to sue – stays.

To understand the significance of this document, let’s briefly revisit the history of its inception.

Federal Judge questions legitimacy of copyright trolling lawsuits

On 11/3/2017 Federal Judge Thomas Zilly (WAWD) discovered that

In two different cases, Nos. C17-990 TSZ and C17-1075, plaintiff [Venice PI, LLC] sued the same, now deceased, defendant, namely Wilbur Miller. Mr. Miller’s widow submitted a declaration indicating that, for about five years prior to his death at the age of 91, Mr. Miller suffered from dementia and was both mentally and physically incapable of operating a computer.

This discovery was disturbing enough to question the legitimacy of the copyright trolls’ detection methods, as well as plaintiff attorneys’ predatory litigation tactics. In each of the 12 Venice cases assigned to him, the judge issued an order to show cause, directing the troll to

[…] file an offer of proof [that] shall be supported by the declaration of an expert in the field, setting forth such expert’s qualifications, and shall address the following issues:

(i) whether and, if so, how an IP address can be either “spoofed” to or faked by a BitTorrent tracker, and what is the likelihood (quantified if possible) that each defendant’s IP address was a false positive;

(ii) whether and, if so, how plaintiff can prove that the material allegedly tracked to each defendant’s IP address was a “playable” and actionable segment of the copyrighted work at issue; and

(iii) what evidence, if any, can plaintiff currently present, beyond mere association with an IP address, that each defendant engaged in the alleged copyright infringement.

The troll’s attorney David Lowe responded with the following declarations:

• ECF 29: Expert report by Benjamin Perino (Guardaley’s owner) (+Exhibit). Note that another Guardaley employee – Michael Patzer – made an identical claim that (paragraph 9 from an OHSD case declaration) he wrote the software that has the same functionality that Perino says he wrote (paragraph 15 of ECF 29)
• ECF 30: Declaration of Michael Wickstrom (Voltage Pictures)

The judge issues the second order

The judge, however, wasn’t satisfied by the response. Particularly, he questioned the legality of the surveillance conducted by unlicensed German individuals of questionable qualifications.

In addition, Judge Zilly discovered the allegations of one particularly egregious fraud perpetuated by the same German “investigators”: the network of troll attorneys across the US filed more than 500 declarations “signed” by a fictitious person Darren Griffin of a fake company Crystal Bay Corporation. Those declarations were successfully used to obtain court subpoenas to subsequently pressure defendants to settle out of court (“essentially an extortion scheme” according to CACD Judge Otis Wright).

Finally, the judge became aware of a troubling pattern: as I documented on this blog (here, here, here, and here), Lowe dismissed more than a dozen of defendants who retained attorney Christopher Lynch – after Mr. Lynch sent a letter threatening to fight back and conduct discovery, which would inevitably shed a light on plaintiffs’ and their attorneys’ contemptible conduct.

On 1/8/2018 Judge Zilly issued another, a much stronger-worded, order to show cause, which hinted that the declarant Daniel Arheidt “might be committing a crime by engaging in unlicensed surveillance of Washington citizens” and asked why “claims […] should not be dismissed with prejudice (and any funds [the plaintiff] has received in settlement should not be disgorged)”.

Cornered troll is hissing and showing teeth

On 2/5/2018 Lowe responded with another bunch of declarations:

• ECF 34: Declaration of Stephen Bunting, a forensic guy (+Exhibit)
• ECF 35: Declaration of Michael Wickstrom of Voltage Pictures, addressing the Guardaley shell game / Hollywood accounting (+Exhibit)
• ECF 36: Declaration of David Hricik, a law professor from the Mercer Law School, who addresses Zilly’s allegations of Lowe’s unethical conduct, and also opines on my blog – without reading a single post¹ (+Exhibit)
• ECF 37: Declaration of Daniel Arheidt, who, while working for Guardaley and living in Karlsruhe, never met his “colleague” Daniel Susac, who is also from Karlsruhe and is/was working for Guardaley
• ECF 38: Declaration of David Lowe, who tap-dances around the Griffin fraud issue, trying to create an impression that the fact that Griffin never existed is just a conspiracy theory (+Exhibit)
• ECF 39: Declaration of the Guardaley’s owner Ben Perino, who argues that his magic box is incapable of producing false positives

The overall response’s tone was more nervous than the last time. To maintain the air of legitimacy in front of a skeptical judge, Lowe made some misinterpretations (for example, he claimed that he has “no personal knowledge about Crystal Bay, and never worked with that entity”). In addition, Lowe’s response contained a threat directed at Mr. Lynch and myself:

Plaintiff is concerned that, insofar as the basis for the show case order may be found in websites and letters that are not part of the record in this case, and which are not under oath and cannot be squarely confronted in this response, that its Due Process rights may be violated. While Plaintiff believes it can fully satisfy the Court with the present submission, in the event the Court finds support in any of the materials cited in its Order (such as the letter of Christopher Lynch, or content on a website), Plaintiff requests the opportunity to conduct discovery into such assertions in order to defend itself. Specifically, Plaintiff and its counsel request the opportunity for third party discovery of the purveyors of the cited online sources, as well as Mr. Lynch, whose unsubstantiated letter containing accusations in the Collins case appear to form the basis for much of the Court’s criticisms. If any remedy is to be imposed that in any way relies on these sources, Plaintiff’s due process rights surely demand that it be given the opportunity to know and confront its accusers in this regard, and to thereby prove that none of them have any evidence (let alone reliable, credible, and admissible evidence) to support their assertions.

This request to conduct a fishing expedition is nothing more than an attempt to intimidate critics. Prenda tried this tactic in 2013, and you all know how it ended.

The declaration

While I decided ignore this threat, Mr. Lynch didn’t take it lightly and authored a response – the declaration that addressed Lowe’s false statements and bogus accusations in devastating detail.

To date, this is the most meticulous collection of discrepancies, misstatements and outright lies in copyright trolls’ declarations. Mr. Lynch began collecting and organizing the evidence of troll’s wrongdoing since he got involved in a (successful) defense of a copyright troll victim (Elf-Man v Lamberson, WAED 13-cv-00395) and has never stopped doing this work.

It would be unproductive to summarize this already condensed document. Neither do I need to explain its significance to those who read both Judge Zilly’s orders to show cause. The only comment I wish to make is that I hope that one day this declaration becomes an exhibit to an indictment.

Read it, share it, and – if you a defense attorney – file it in your cases.

Coverage

• Leonard French: Fake Experts?! Defense Atty uncovers False Declarations in File Sharing Cases (video)

¹ It looks like Mr. Hricik was so offended by the blog’s title that he didn’t read any posts. According to the log, the only page he visited was About (besides the main page): he scrolled down, found my semi-serious Public Domain Notice, cut the phrase “copying is not theft” out of context and declared that it is “worrisome” (FN1 of Hricik Declaration).

Trolls don’t bother to make sure that the owner of the IP address in question — a person who pays the Internet bill — is an infringer. Such investigation is not needed because the majority of judges don’t pay much attention to screaming deficiencies of the complaints and jollily rubberstamp subpoenas and motions for default judgment.

Once in a while a district judge rules that IP address is not equal a person, and hence the plaintiff does not meet the plausibility standard set by Ashcroft v. Iqbal. Such rulings, while eagerly reported by tech media, so far have been a drop in the ocean and did not deter copyright trolls from continuing to abuse the judicial system.

Today the US Court of Appeals for the Ninth Circuit added its significant weight, and this weight can finally tip the scales of the bittorent litigation:

In this copyright action, we consider whether a bare allegation that a defendant is the registered subscriber of an Internet Protocol (“IP”) address associated with infringing activity is sufficient to state a claim for direct or contributory infringement. We conclude that it is not.

The case on appeal is one of a myriad non-porn cases — Cobbler Nevada v Gonzales (ORD 15-cv-00866) — filed by Carl Crowell on behalf of a shell company, a nominal plaintiff created solely to facilitate the shakedown, and most likely this plaintiff doesn’t even have a standing to sue.

The defendant (represented by David Madden) is an owner of a foster care home, who ran an open wi-fi. A lawyer who has a lint of dignity would drop such a defendant at once, but Crowell didn’t.

After tracing infringement of its copyrights to a particular IP address, Cobbler Nevada, LLC filed suit against the John Doe IP address for direct and contributory copyright infringement. Cobbler Nevada soon discovered that the IP address was registered to Thomas Gonzales, who operated an adult foster care home. Cobbler Nevada then amended its complaint to name Gonzales as the sole defendant, alleging that he directly infringed by copying and distributing copyrighted works himself or, in the alternative, contributed to another’s infringement by failing to secure his internet connection.

The district court rightly ruled in favor of the defendant and awarded 17 K in attorney’s fees:

The district court properly dismissed Cobbler Nevada’s claims. The direct infringement claim fails because Gonzales’s status as the registered subscriber of an infringing IP address, standing alone, does not create a reasonable inference that he is also the infringer. Because multiple devices and individuals may be able to connect via an IP address, simply identifying the IP subscriber solves only part of the puzzle. A plaintiff must allege something more to create a reasonable inference that a subscriber is also an infringer. Nor can Cobbler Nevada succeed on a contributory infringement theory because, without allegations of intentional encouragement or inducement of infringement, an individual’s failure to take affirmative steps to police his internet connection is insufficient to state a claim.

After drinking a cocktail of greed and Chutzpah, the plaintiff decided to appeal. And lost: today the Court of Appeals affirmed the lower court’s decision in a devastating order.

I expect this ruling to have a significant impact. To the troll, a low standard set by the district courts is vital: the necessity to investigate putative defendants would drive the costs up and eventually would make the racket unprofitable.

All of a sudden a motion to quash stands a very good chance of success. Thanks @CarlCrowell !

— Raul (@Raul15340965) August 27, 2018

Coverage

• TorrentFreak: IP Address is Not Enough to Identify Pirate, US Court of Appeals Rules
• The Register: Cobbler feels the shoe-leather: An IP address is still not a human
• Techdirt: Important Appeals Court Ruling States Clearly That Merely Having An IP Address Is Insufficient For Infringement Claims
• Rob Cashman: Why the US Court of Appeals’ ruling that “an IP address is not enough to identify a defendant” will not deter the copyright trolls