Going Where No Law Firm Has Gone Before …

Going Where No Law Firm Has Gone Before …
June 26, 2013

David L. Applegate

David Applegate is a Chicago-based trial lawyer and partner at the law firm of Williams Montgomery... (read full bio)

As pornographers entice viewers with alluring images online, then sue downloaders for infringing on their copyrights, a federal judge in Los Angeles has taken a stand. Like former U.S. Supreme Court Justice Potter Stewart, who knew pornography when he saw it, U.S. District Judge Otis Wright of the Central District of California knows a lawsuit model he doesn’t like when he sees one.

In response to what he views as abusive litigation, Wright has referred four attorneys associated with Chicago firm Prenda Law Inc.--identified as John Steele, Paul Hansmeier, Paul Duffy, and Brett Gibbs--to their respective governing bars for “suffering from a form of moral turpitude unbecoming of an officer of the court.” (Two of the attorneys, Duffy and Gibbs, reportedly also have been referred to the Central District of California’s Standing Committee on Discipline.) Wright has also threatened to refer others connected with what he characterizes as a “fraud” to federal prosecutors.

The plaintiffs’ business model in some such cases has been similar to that of Ms. Doe/Collins above, although it doesn’t involve user content and is in most cases perfectly legal. The owner of copyrights to illegally downloaded Internet content files a “John Doe” lawsuit (there’s that name again), then issues subpoenas to Internet service providers to identify the individuals who have visited that Internet address. In exchange for not adding the individuals’ names to the lawsuit as defendants, the copyright holders’  attorneys then typically try to obtain quick settlements designed to stun but not kill.

In the case of infringers who have illegally downloaded pornographic videos, the pornographers’ attorneys often obtain settlements just below the cost of a minimal defense from individuals who would rather not have their names associated with the names of the videos they have downloaded. And enough small settlements can add up to large millions of dollars in the aggregate, according to Forbes.com.

Where the plaintiffs’ attorneys went awry in Wright’s eyes in this case was in setting up their own companies with no assets other than copyrights to pornographic films and no owners or officers other than the attorneys who also owned and controlled the law firm, then holding out one of the attorneys’ sometime-groundskeeper, a Minnesota resident named Alan Cooper, as a principal of the companies, Ingenuity 13 LLC and A.F. Holdings LLC.

Apparently a “Star Trek” fan, Wright wrote that although the plaintiffs “boldly probe the outskirts of law, the only enterprise they resemble is RICO [the Racketeer Influenced and Corrupt Organizations Act]” and that “[T]he federal agency eleven decks up”--referring to the U.S. Attorney’s Office--“is familiar with their prime directive and will gladly refit them for their next voyage.”

In related litigation, Cooper is reportedly currently suing Prenda Law, A.F. Holdings, and Ingenuity 13 in Minnesota for deceptive trade practices and, yep, invasion of privacy, while Duffy and Prenda Law have sued Cooper for libel in the Circuit Court of Cook County, Illinois.

Sources include: Kashmir Hill, “How Porn Copyright Lawyer John Steele Has Made a ‘Few Million Dollars’ Pursuing (Sometimes Innocent) ‘Porn Pirates’,” October 15, 2012 and Amanda Bronstad, “Judge Lashes Out at ‘Fraud’ in Porn Infringement Claims,” The National Law Journal, 05-09-2013

David L. Applegate

David Applegate is a Chicago-based trial lawyer and partner at the law firm of Williams Montgomery... (read full bio)