Class Action Lawsuit Abuse

I have received more than a few notices of being a member of a class in a class action lawsuit where it appeared "our" lawyers received far more than us "injured" parties, and so I am glad to see this 8/25/17 New York Daily News article:

A U.S. appeals court on Friday threw out a class-action settlement intended to resolve claims that the Subway sandwich chain deceived customers by selling “Footlong” subs that were less than a foot long.

The 7th U.S. Circuit Court of Appeals in Chicago called the settlement “utterly worthless,” and said the customers’ lawyers were not entitled to attorney’s fees for convincing Subway it was better to make the case go away than fight.

“A class action that seeks only worthless benefits for the class and yields only fees for class counsel is no better than a racket and should be dismissed out of hand,” Circuit Judge Diane Sykes wrote for a three-judge panel. “That’s an apt description of this case.”

There Are Examples of Judicial Misconduct That Just Amaze Me

Instapundit links to a discussion of what happened when a judge was hearing a child custody dispute case, while having sex with the mother in his chambers, and, surprisingly enough, ruling against the father.  Can the father sue the judge?  The 6th Circuit Court of Appeals rules no, that the judge enjoys judicial immunity for his actions.

This really does seem an area where Congress, if it had any integrity, would take action. There are clearly situations where a judge should not enjoy immunity for his actions.

More Evidence That Copyright Trolls Should Lose a Finger For Every Sanction Issued By A Court

From September 11, 2013 TechDirt:

A few months back, people realized that one of Malibu Media's tactics was to send a now infamous "Exhibit C" court filing to the subscribers they were accusing of infringing on their copyrights. The problem? The movies in Exhibit C -- which tended to be hard core porn films -- had no connectionto Malibu Media. They didn't hold the copyright on them at all, and certainly had no standing to sue over them. Basically, Malibu would file this list of other movies the person may or may not have been sharing, with really offensive names, knowing that if the names became public it would likely be quite embarrassing for the recipients of the threat letters. It seemed pretty clear that the idea was to intimidate people into paying up.

The article goes on to explain that the EFF filed an amicus brief on this, and the court sanctioned Malibu Media for what is essentially a "settle out of court or we'll embarrass you more" tactic.  While I don't have much sympathy for people who are genuinely engaged in copyright violation, and even less for those watching some of the movies listed in these filings, those are still well up from lawyers who rely on intimidation to get quick settlements for copyrights that they do not even own.

The Digital Millennium Copyright Act needs serious reform -- serious enough that lawyers engaged in tactics like these (and Righthaven) should have to worry about jail time, not just fines.

9th Circuit Panel Sounds Skeptical of Righthaven's Claims

February 6, 2013 Ars Technica reports on the oral arguments before the 9th Circuit Court of Appeals:

[Righthaven attorney] Syverson tried to argue that the deal between Stevens Media, the parent company of the Las Vegas Review-Journal, involved an actual copyright transfer. "Righthaven and Stevens Media were well aware of the Silvers case, and attempted to comply," said Syverson early on in his argument.

"It looks like form over substance," said one of the judges on the three-judge panel. "It seems like an attempt that's too cute by half to get around Silvers."

Another judge noted that Stevens could take back any of the rights at any time, meaning any "transfer" of copyright wasn't very meaningful. Righthaven couldn't really have licensed the copyrights, or published the articles it had the rights to, since Stevens Media could have reclaimed those rights at any time.

While one can't be 100 percent sure of the result of a case based on judges' comments, the questions in this case were very critical of Righthaven. It would be a real shocker if Righthaven was found to have standing to sue.

The panel was skeptical of the "we can copy the whole article and still be fair use" position that the district court held in Righthaven v. Hoehn, and I confess that I share that skepticism, but it is still the case that news articles are intrinsically worth very little, and since the Las Vegas Review-Journal articles in question were not behind a paywall of any sort, and are of essentially no economic value individually, there is a good case that the actual damages to the copyright owner (which was not Righthaven) were measured in pennies.  The DMCA's $75,000 per violation statutory penalties were not intended for nearly worthless pieces of news, but for music and video recordings, which are actually quite valuable.

In any case, since Righthaven did not own the copyrights that it falsely claimed that it owned when demanding $75,000 from defendants, the fair use argument is irrelevant.  Righthaven lacked standing to file the suit.

The Case For Copyright Reform...

Either that, or unlimited hunting tags for lawyers.  I don't normally have much positive to say about Gary North, but here is a very funny column about copyright and lawyers:

I want to write an article on an article that Bill Gross wrote. 

Mr. Gross runs the world's largest bond investing fund. He is famous in the investment community. Recently, he wrote a very important article. It had a catchy title. I would like to share it with you. Unfortunately, I am not allowed to. At the end of the article, in bold face type, we read this:

No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Pacific Investment Management Company LLC, 840 Newport Center Drive, Newport Beach, CA 92660, 800-387-4626. ©2013, PIMCO.

I would provide a link to this important article, but I have not cleared this with Mr. Gross.

I find it fascinating that Mr. Gross takes time every month out of his busy schedule, which involves managing several billion dollars' worth of clients' money. He does this in order to be read. Then he places a major restriction on anyone actually telling others about what he has written.

I picked up the phone and called an old friend of mine. I would tell you his name, but he is a lawyer specializing in copyright. He will not allow me to mention his name unless I get written permission. He refuses to give it. I therefore will give only his initials: CF. That stands for Copyright Fairy.

This is not a verbatim transcript. I am not allowed to quote him verbatim. This is my version of what he said.

Go ahead: read it in full.  It's pretty funny, and painfully truthful.

One Million Dollars a Month To Lawyers

There are times that it is apparent that the greed of some lawyers knows no bounds.  This Reuters article about Jefferson County, Alabama's bankruptcy proceedings just enrages me:

(Reuters) - Alabama's Jefferson County wants a federal judge to take a second look at a June 29 ruling favoring Wall Street creditors in order to clarify how the cash-strapped local government can pay $1 million a month in fees to its bankruptcy lawyers.

The county, which last November initiated the biggest U.S. municipal bankruptcy, said Judge Thomas Bennett's ruling clearly barred setting aside county revenues in reserve funds for estimated professional fees but did not forbid using the revenues for paying lawyers for completed work.

How many lawyers do they have working on this, that their professional fees come to one million dollars a month?  Even at $300/hour, that's 3333 hours worked in a month.  Even ten hour days, six days a week, means that there are more than 55 lawyers working on this.

You know the joke about the lawyer who shows up in Heaven, and St. Peter meets him at the pearly gates with a brass band playing.  The lawyer says, "I can't be the first lawyer to show up here."

St. Peter says, "No, but it isn't often that someone 200 years old arrives."

"I'm not 200 year old.  How did you figure that?"

"We added up all the hours you've billed."

Righthaven Receiver Fires CEO Steve Gibson

I love it!  Vegas Inc. reports that the court-appointed receiver has fired Steve Gibson and his wife Raisha "Drizzle" Gibson.  In addition:

In the latest development, Pearson filed a report with U.S. District Judge Philip Pro in Las Vegas on Monday saying:

• "Instead of satisfying Righthaven’s substantial judgments, Gibson apparently has elected to allocate Righthaven funds that have been concealed from me to pursue appeals over rights that Righthaven no longer owns and has done so in a manner that further imperils what is left of Righthaven’s assets with additional attorneys' fees awards and sanctions."

And a malpractice suit is apparently being contemplated for Gibson's actions!  There is something positively Shakespearean about this whole sordid story: Gibson's greed (thinking that there were "millions, if not billions" of dollars of copyright infringements that he was going to monetize); claiming to own copyrights that they did not own in order to file shakedown suits; now he is fired, and is probably going to spend the next several years fighting legal battles over his actions.  Hubris: there are consequences.

I had some hopes at one time that there might be a lawsuit against Righthaven's backers for the money that they extorted out of myself and hundreds of others based on, it turns out, their false claim that they owned the copyrights for which they were filing suit.  But it does not seem to be likely to happen.

Pot. Kettle. Black.

Steve Green at Vegas inc. reports on the latest signs of a break with reality from Steve Gibson of Righthaven:

The CEO of copyright lawsuit filer Righthaven LLC is complaining that he's the victim of ''unconscionable'' ambush tactics by opposing attorneys in one of several lawsuits filed by the company.

Steven Gibson, who is facing a fine of $500 per day over Righthaven's failure to turn over financial information in the case, says the attorneys are unfairly trying to pin the blame on him for not producing the data. He claims the responsibility lies not with him or the company but with an attorney who has represented Righthaven, Shawn Mangano.

This is the guy who filed lawsuits without warning demanding $75,000 (later $150,000) for copyright infringements that likely would have resulted in, at most, $200 penalties under the copyright law--but relied on the fact that defendants could not afford to spend $30,000 or more to defend themselves--and he is complaining about "unconscionable" tactics?  And now he is blaming an employee for the failure of Righthaven to turn over documents related to Gibson and his wife's personal finances?

If there is anyone who is an argument for jail time for litigation abuse, it is Steve Gibson.  But he does seem to be trying to rewrite the old definition of chutzpah: the man convicted of murdering his parents who throws himself on the mercy of the court because he's an orphan.

Stephens Media Gets Stuck With the Bill

Righthaven is pretty much out of business, and clearly out of money.  But Judge Hunt has found that Stephens Media (part-owner of Righthaven) can be held liable for the legal fees of its victims.  From Steve Green at Vegas Inc.:

After entering judgment against Righthaven, Hunt issued the declaratory judgment on Friday. That was after Stephens Media did not contest a finding of fair use for the Democratic Underground. 

This is very interesting.  A lawyer that I know has been waiting for the chance to sue Stephens Media for what Righthaven did, in falsely claiming to own the copyrights.  This is going to hurt.

Righthaven Stripped Of Something It Doesn't Have

This is a very confusing situation.  It turned out that Righthaven did not actually own the copyrights that were the basis of the lawsuits it filed against hundreds of people (me included) demanding $75,000 or $150,000.  Now, a federal judge has ordered them to...well, I don't know what this means.  From Steven Green at Vegas Inc.:

A federal judge in Las Vegas on Monday stripped Righthaven of whatever interests it has in its 278 federal copyright registrations as well as its trademark.

Judge Philip Pro ordered that the copyrights and trademarks be transferred to a court-appointed receiver so they can be auctioned to cover some of Righthaven’s debts.

Even better: Righthaven was ordered to show up for a "bodily attachment motion" on Monday to sign over whatever interests they supposedly own in those copyrights--and Righthaven did not show up for the hearing, so Judge Pro decided that they were in default on this.  That guy Steve Gibson who runs (or ran) Righthaven--one heck of an attorney!  I look forward to seeing Gibson and Stephens Media put over the legal equivalent of a slow fire for this mess.

You Could Make an Entire Semester Legal Ethics Class From Righthaven

Steven Green at Las Vegas Inc. is keeping up on Righthaven's latest shenanigans.  All the things that Steve Gibson, CEO of Righthaven has done, would fill an entire semester of a class on ethics for lawyers--and generally of the "don't do this" form.  I don't mean failing to file the right papers by February 22 for its 10th Circuit Court of Appeals case, but something a bit more serious.  Federal Judge Hunt fined Righthaven $5000 for misleading the court about the nature of the suits, but the fine was apparently never paid:

“A sanction payable only by Righthaven would not be an effective form of coercion,” Opsahl wrote in his court filing. “Righthaven already owes Mr. DiBiase over $120,000, but has refused to pay a single penny. Righthaven has already been sanctioned $5,000 by Judge Roger Hunt. As with this court’s other judgments and orders, Righthaven ignored Judge Hunt’s sanctions order.”

Opsahl wrote in his declaration that his review of the Righthaven bank statement shows it had more than enough money on Aug. 11 to pay the $5,000 sanction — but instead made a $4,475 payment to an entity called Stephens Investments Holdings.

This seems like a rather serious problem--a court ordered fine doesn't get paid, but a payment of similar size does.  And who is Stephens Investments Holdings?   There is a billionaire named Warren Stephens who owns the Las Vegas Review-Journal and half of Righthaven.  Might this be an attempt to hide assets in preparation for bankruptcy?

I confess that the slowness of the courts to punish Steve Gibson for his behavior utterly mystifies me.  What allows this guy to get away with these stunts as long as he does?

UPDATE: Welcome, Instapundit readers.  Feel free to hit the top of the blog to keep yourself informed and entertained.

Righthaven's Business License Expires...Again

Copyright troll Righthaven is again in trouble.  From the ever-useful Steve Green at Vegas Inc.:

Righthaven LLC’s financial position appears to have deteriorated further: For the second year in a row, the Las Vegas company's state business license has expired and now it’s listed in default....The development indicates the copyright infringement lawsuit filer either can’t or won’t come up with the $200 needed to reactivate the license.

Since Righthaven isn't filing suits anymore, it may not matter.  But I wonder if this will impair their ability to pursue their appeal of their many losing cases to the 9th Circuit.  I can at least hope.

Proof That Nothing A Lawyer Does Interferes With Finding Employment

I mentioned a few days ago Righthaven complaining about "scorched earth" enforcement tactics--which is right up there with Hitler whining about genocidal racism--but now I see that Righthaven CEO Steve Gibson is back to working for someone else--a law firm called Dickinson Wright.  As a comment over at TechDirt points out:

Who on earth would hire Steve Gibson after the entire Righthaven debacle, the frivolous emergency appeals, the apparent constant contempt of court, the missed deadlines, the abandonment of cases in process, and the sanctions against Righthaven? 

It seems to me that just hiring Gibson to work for you is defacto malpractice.

Perhaps Gibson has a really winning personality?  Or Dickinson Wright couldn't get Darth Vader to come to work for them, so they had to settle for second best?

Nevada Bar Association Opens Inquiry Into Conduct of Righthaven Lawyers

The pigs are flying!  Steve Green at Vegas Inc. reports that the Nevada Bar Association, responding to complaints from victims of early Righthaven suits, and apparently to the NBA's own concerns, is requesting information from three of the attorneys involved in the early suits:

The State Bar, which regulates attorneys, has since as early as the Fall of 2010 received complaints from unidentified parties about Righthaven and has been watching Righthaven’s litigation campaign work its way through the courts.

The Bar this week opened grievance files concerning Gibson, an attorney, and former Righthaven attorneys Jodi Donetta Lowry and J. Charles Coons. The attorneys have been asked to respond to the grievance issues by Jan. 31.

I never bothered to file a complaint with the NBA because I understood that they were primarily in the business of protecting crooked lawyers, but perhaps it is worth filing a complaint.

Scorched Earth Tactics

Steve Green at January 10, 2012 Vegas Inc. reports that Righthaven is whining:

In the latest round of legal wrangling, Righthaven filed motions in federal court in Las Vegas on Monday complaining about what it called the “scorched earth judgment enforcement efforts” of Righthaven defendant Wayne Hoehn and his attorneys.

Next, Hitler will start complaining about aggressive warfare by the Russians.  If there is anyone who qualifies for the phrase "scorched earth ... enforcement efforts," it is Righthaven.  I look forward to the day when Righthaven's CEO Steve Gibson is found personally liable for Righthaven's filing of complaints based on a fraudulent claim of owning the copyrights to various news stories.  I look forward to seeing Gibson personally bankrupted, and ideally, sent to prison for fraud.

As a number of people have pointed out over the last few months, you could teach an entire semester class on legal ethics just from the autopsy on Righthaven's practices.

Stop SOPA

As Ars Technica points out:

Views on copyright law have never broken down cleanly along ideological or partisan lines, but many of the key supporters for the Stop Online Piracy Act have come from the political right. The legislation is sponsored by Rep. Lamar Smith (R-TX) and it enjoys support from right-leaning, corporate-funded organizations like the Chamber of Commerce and Americans for Tax Reform.

But a growing number of right-leaning individuals and organizations have come out against SOPA. Last Wednesday, the Heritage Foundation, one of the nation's largest and most influential conservative think tanks,published an article by senior research fellow James Gattuso warning about the "unintended consequences" of SOPA. And on Thursday, he was joined in opposing SOPA by Erick Erickson, editor of the popular conservative blog RedState.

 And that includes me as well.  I agree with Gattuso's careful statement of the problem with SOPA:

SOPA would undercut other policy goals as well. The requirement that search engines omit links to rogue sites undercuts the role of search firms as trusted intermediaries in conveying information to users. There are, of course, other circumstances where search engines already omit information and links—for instance, Google routinely screens out child pornography from its search results. But there has never been a government mandate that information be withheld from search results. Imposing such a mandate would represent the first step down a classic slippery slope of government interference that has no clear stopping point.

Arguably, the limits placed on search engines as well as other third parties under SOPA would also violate constitutional protections of freedom of speech.[5] But even if not barred legally, any such restrictions should be imposed only after the most careful consideration, only when absolutely necessary, and even then, to the smallest degree possible.

 As Gattuso points out, some of the most dangerous aspects of SOPA, which would allow scum like Righthaven to shut down websites without even going before a judge, have been scrapped.  But what remains in the law remains overreaching.

Righthaven's Website Has Been Reassigned

Righthaven is about finished off.  Their domain name has been taken away, and handed off to a court appointed receiver be auctioned off to pay for the legal fees of defendants who could afford to fight them.

Righthaven Executed

Well, I actually mean that an order of execution against their bank account was performed by the U.S. Marshals.  From the ever useful Steve Green at Vegas Inc.:

The U.S. Marshals Service has made some progress in seizing the assets of copyright company Righthaven LLC, disclosing Thursday it has served a writ of execution on a Las Vegas bank branch.

A court filing said a writ of execution of a judgment against Righthaven was served Tuesday at a Bank of Nevada branch and that the writ says "seize all assets in the Righthaven LLC operating account and any other bank accounts belonging to Righthaven LLC." The bank branch's operations manager was served with the writ.

Alas, it was only $1000, and Righthaven continues to operate.   Righthaven's CEO has been ordered to appear at a judgment debtor's hearing, where he will be required to testify under oath where their assets are located.  (Answers such as, "in our secret, offshore account" and "it all just disappeared" are likely to get some serious consequences, so we can hope Gibson is as arrogant in that hearing as he has been all along.)\

Gibson is dragging this thing out as long as he can--I sure hope that the final result is his personal bankruptcy, jail time for contempt, and perhaps some prison time for fraudulent transfer of assets in anticipation of bankruptcy.

Righthaven's Number Is Up

From Ars Technica:

Looks like it's time to turn out the lights on Righthaven. The US Marshal for the District of Nevada has just been authorized by a federal court to use "reasonable force" to seize $63,720.80 in cash and/or assets from the Las Vegas copyright troll after Righthaven failed to pay a court judgment from August 15.

Tomorrow will be a day for dancing.

9th Circuit Rejects Righthaven's Emergency Stay Appeal

Righthaven requested the 9th Circuit Court of Appeals issue an emergency stay on an attempt by its creditors to execute judgment for the money Righthaven owes them.  This was probably Righthaven's last chance to avoid being forced into bankruptcy.  According to Steven Green at Vegas Inc., the emergency stay motion was denied.

My guess is that the next steps will be:

1. Righthaven files for bankruptcy.

2. Righthaven ceases to pursue its appeals because of this.

3. The lawyers representing the various injured parties attempt to pierce the corporate veil of liability to force CEO Steve Gibson to disgorge any assets that he has.

4. Lawyers representing the various parties who settled out of court based on Righthaven's false claim to own Las Vegas Journal-Review copyrights sue Gibson and Stephens Media for not only return of the settlements, but also legal fees, and emotional damages caused by having to defend themselves from these suits based on false claims of copyright ownership.  I look forward to seeing Steve Gibson wearing a barrel, holding a sign up begging for money.