Monday, April 29, 2013

ISP Sent You A Letter? Don't Freak Out!

Don't let copyright infringement letter scare youIn Seattle, like elsewhere, there are hundreds of people getting letters from their ISP right now saying that a federal lawsuit is pending and their personal information will be handed over to the plaintiff unless they "move to quash." Usually when I get these letters the caller is in a minor state of shock at receiving such a thing. Most didn't do what they are accused of doing, but the prospect of a federal lawsuit against them is scary.

There's a word for what happens next:  Catastrophizing.

It is an irrational fear that when something bad happens to you, the worst possible outcome is the only possible outcome. It happens to everyone to some degree.

But haven't you heard: Our worst fears and greatest hopes are seldom realized? It's true. Read this, and calm down.

There are two basic questions that I get from everyone who calls. I get them so frequently that I thought it would be easier to just post my canned answers here to try and pre-inform everyone who calls. What should I do? What will it cost? Here are the things you need to think about.

What Should I Do?

Everyone wants to know what they should do. The problem is most people think there is one best answer to this question.

There is not.

What you should do depends on lots and lots of things. Here are the criteria I usually try to go over with my new clients when answering those questions.

Do you need (or just want) to stay anonymous?

I point out that there is a difference between needing to stay anonymous, and just wanting to stay anonymous. A big difference.

I have clients who actually have a very good reason to try and keep their name out of a federal lawsuit. Public officials generally don't want their names involved in federal lawsuits. People with security clearances tend to need to keep their names out of public filings. People with state licenses that require reporting litigation need to avoid lawsuits.

But if you just think it would be better if the plaintiff didn't know who you are, then you probably don't need to stay anonymous. You just want to stay anonymous.

If you decide you need to stay anonymous, then you basically have only two options: move to quash the subpoena or settle the case. Those are your only two real options. And the only one that guarantees you keep your name out of the public filings is to settle. If you don't even want the plaintiff to know who you are, then you will need to use a neutral third party, like a lawyer, to negotiate a settlement. If you don't care if the plaintiff knows who you are, but you just don't want your name in public filings, then you could probably negotiate your own settlement.

As for a motion to quash, I'm not a big fan. The main reason is because the law is generally not on your side. Most judges will not grant them, so it frequently becomes a waste of money. That said, a motion to quash is an effective way to delay proceedings and to educate the judge about the case. But on balance, I don't recommend them.

Did you do it?

I won't ask you this question; only you know the truth. But if you did what you are accused of doing, then think about your real options.  Are you going to deny doing it in the hopes that the whole thing just fades away? Think again. Federal lawsuits are no joke. The truth will likely come out sooner or later. If you did it, seriously consider settling for the best deal you can get.

But if you didn't do it, then you should seriously consider fighting. If you didn't do it, then why should you pay anything? It's difficult to imagine why you should give your hard-earned money to a copyright plaintiff for no reason other than because you got a letter accusing you of something you didn't do. Understand this is the copyright troll business model: Accuse everyone; settle with anyone; drop the rest.

If you didn't do it, you have many options. In fact, you have all the options in the world. Just answer the complaint and deny any wrongdoing. Move to quash if you want. Settle. You can really do anything you want with almost no fear that your course will come back to haunt you.

So if you didn't do it, I highly, highly recommend you consider fighting. If you truly didn't do it, you have very little to lose by fighting. If you didn't do it, you should just answer the complaint and demand that the plaintiff drop you from the case.

Do you have the time, energy, and money to fight?

As a practical matter, if you don't have any money, any energy for a fight, or no time to devote to this, then those facts may dictate your choice. If you don't have any money to pay a settlement, then you can't really settle. If you don't have any money to pay for a motion to quash, then that isn't an option either. If you just don't have any time to dedicate to trying to win this lawsuit, then that also matters.

Bottom line, your options depend on what you can devote to your case. The fact that you have been sued doesn't magically put money in your pocket or time in your day. So if you really have absolutely no resources to devote to this case, then I'm not exactly sure what to tell you except that the plaintiff doesn't want to fight a battle that will ultimately put nothing in their pockets.

How Much Will It Cost?

How much will it cost? Well, how long is a rope?

There is no way I can tell you in advance how much it will cost. The cost is out of my control. You've been sued. Getting un-sued is a tricky thing.

That said, here are some general guidelines. First, do you want to stay anonymous or not? If you don't want your identity to be disclosed to anyone, including the plaintiff, then expect to pay more. Trying to stay anonymous is the most expensive of all your options. The reason is because staying anonymous requires the greatest number of court filings. The more documents you have to file, the greater the expense. Expect your legal fees to be greatest if you want to keep your identity a secret.

If you don't care about staying anonymous, then did you do it? If so, then consider settling out of court. Often settling is the cheapest option in the long run. Fighting a case in the hope that the plaintiff just won't be able to prove its case is a dangerous gamble. That said, the plaintiff must prove its case, and more often than not in these cases, the plaintiff has no desire to actually prove it.

But the real kicker is that the copyright laws provide for fee-shifting. What that means is if you are forced (or just decide) to stand on principle and fight your case, then at the end of the fight you should be able to push your legal fees back on the plaintiff. That means that the plaintiff may ultimately have to pay your legal fees for suing you.

So before you start catastrophizing, let me dispel some of your anxiety:

Are you going to jail? NO!

Are you going to lose your house? NO!

Are you going to lose your job? NO!

Will there be a huge default judgment against you? Well, as long as you are a reader of this blog, NO!

Will this cost you a huge amount of money? Depending on your definition of huge money, probably not.

Will this be free?  Probably not.

Will this situation be a pain in the butt until it's over? Probably, yes.

Is it fair that you have to deal with this even though you didn't do anything wrong? Life is not fair.

So all this said, if you find yourself in this situation, I recommend that you consider using this experience to learn about the legal system. Silver linings.

But above all, Keep Calm and Carry On. It will be over soon enough.

Thursday, April 18, 2013

Lessons learned: How Not To Get a Default

I and others have repeatedly written about how dangerous it is to let a default judgment get taken against you and how easy it is to avoid them. We can all learn an awful lot from the things people do even without the assistance of a lawyer. So I'm calling this article "Lessons Learned: How Not To Get A Default." Hopefully someone will learn something useful from those that have gone before them.

Let me discuss a couple of examples.

Alexander James Butler

Mr. Butler received a letter from his ISP (Comcast) informing him that Voltage Pictures was accusing him of illegally downloading "Maximum Conviction," and that unless he filed a motion to quash, his ISP would give up his personal information. Mr. Butler apparently did not download the movie, so he wanted the subpoena quashed to protect his personal information. So what did Mr. Butler do? He mailed a letter to the Court asking that the subpoena be quashed. Here's a copy of the letter.

What Mr. Butler Did Right

Kudos to Mr. Butler for taking the initiative to respond directly to the allegations that he did something wrong. If Mr. Butler didn't do it, then he shouldn't have anything to worry about. When most people receive these letters, they do nothing because they are paralyzed with fear that they will get hit with a $150,000 default judgment. They just bury their heads in the sand and hope this will go away by itself. Well it won't. It will only get worse unless you address it head on.

The lesson here? If you didn't do it, don't be afraid to say so. Don't hide in fear that something bad might happen to you and ignore the problem until something bad does in fact happen to you.

What Mr. Butler Did Wrong

What Mr. Butler did wrong is that he undermined the relief he was asking for. In other words, Mr. Butler was trying to get the Court to prevent his personal information from being disclosed to the world. The problem is, he included all the information he wanted to keep secret in his letter.

The lesson here? If you don't want anyone to know who you are, don't mail the Court a letter with all the information you want kept secret. Everything you mail to the Court gets filed as a public document; anything you say will be disclosed to the world. This is the so-called rule against ex parte communication with the Court. One side is not allowed to tell the Court anything that the other side doesn't hear. No secret chats with the judge. It's just a rule. I kind of like that rule.

G.R. Valleau

Ms. Valleau received a letter from her ISP (CenturyLink) informing her that Voltage Pictures was accusing her of illegally downloading "Maximum Conviction," and that unless she filed a motion to quash, her ISP would give up her personal information. Apparently Ms. Valleau did not download the movie, but her son did. So what did Ms. Valleau do? She mailed a letter to the Court denying that she downloaded the movie, admitting that her son did, and offered to pay $13 (the cost of a copy of the movie). Here's a copy of her letter.

What Ms. Valleau Did Right

She mailed a letter to the Court denying that she did what she is accused of. She even offered to pay the fair market value of the movie. That's a stand-up decent offer in my book. And for her effort, she has avoided even the possibility of a default being entered against her.  Good for her.

What Ms. Valleau Did Wrong

Well, there's no other way to really say it: She threw her son under the bus. Seriously? Where's that maternal instinct?

I'm kidding.

Not really.

Although Ms. Valleau has effectively foreclosed the possibility of a default judgment against her, she has now admitted that her son did it. That's a pretty difficult thing to overcome. What do you hear in every cop show you've ever watched on TV?
Anything you say can and will be used against you.

You better believe it!

Now that Ms. Valleau has admitted to everyone, including the Court, that her son did exactly what he is accused of (and even tried to hide it with a "blocker") what is her son going to do? What is his defense now?

I'm not saying anyone should lie. In fact, I'm saying that you should not lie. But still, don't volunteer damaging information for no reason. If you didn't do it, say you didn't do it. But if you know who did, then at least wait until they ask you.

Bottom Line? Don't Get A Default!

Neither one of these Does will now get a default. Why? Because both of them have simply informed the Court that they didn't do what they are accused of doing. Neither of them used a lawyer, although both of them would have benefited from one. But the bottom line is, it's too easy to avoid a default judgment.

You can really do it as easily as scribbling out a note that says "I didn't do this" and mailing it to the Court. If you ever doubted me, just look up. There are two examples of people who did exactly that.

So if you made it to here in this article, now you don't have any excuse for getting a default in your case if it happens.

That said, please also learn from the mistakes made by those who have gone before you.

Wednesday, April 3, 2013

Copyright Troll Cases Come To Seattle

I mentioned before that the copyright troll cases have arrived in Seattle. Until recently, we had been fairly well isolated from all the craziness. But all good things must end; and end they have.

I've been getting quite a few calls about the latest cases filed by R&D Film 1 and Zembezia Film. All of these cases have been filed by the same local plaintiff's lawyer, Richard Symmes. He earlier filed a ton of cases on behalf of a plaintiff named "Kintop Pictures" which were all promptly dismissed before anything substantive even happened. But Mr. Symmes is back, with a vengeance. Below is a list of several of the filings that have been made just in the last couple of months. It's official; the plague is here.

If you have gotten a letter from your ISP regarding a copyright case filed by either R&D Film or Zembezia in Seattle, I would recommend that you get in touch with me. I have several of these cases right now, and I am attempting to pull together a united defense to simplify and minimize the cost.

A listing of most of the cases that have been filed here in the last few months:
2:12-cv-02159 Kintop Pictures v. Does 1-26 filed 12/12/12 closed 01/01/13
2:12-cv-02161 Kintop Pictures v. Does 1-37 filed 12/12/12 closed 01/02/13
2:12-cv-02162 Kintop Pictures v. Does 1-78 filed 12/12/12 closed 01/01/13
2:12-cv-02163 Kintop Pictures v. Does 1-40 filed 12/12/12 closed 01/02/13
2:12-cv-02164 Kintop Pictures v. Does 1-79 filed 12/12/12 closed 01/01/13
2:12-cv-02165 Kintop Pictures v. Does 1-70 filed 12/12/12 closed 01/01/13
2:13-cv-00007 Canal Street Films, Inc. v. Does 1-104 filed 01/03/13
2:13-cv-00050 R & D Film 1, LLC v. Does 1-46 filed 01/08/13
2:13-cv-00051 R & D Film 1, LLC v. Does 1-45 filed 01/08/13
2:13-cv-00052 R & D Film 1, LLC v. Does 1-41 filed 01/08/13
2:13-cv-00053 R & D Film 1 LLC v. Does 1-22 filed 01/08/13
2:13-cv-00054 R & D Film 1 LLC v. Does 1-51 filed 01/08/13
2:13-cv-00055 R & D Film 1 LLC v. Does 1-50 filed 01/08/13
2:13-cv-00056 R & D Film 1 LLC v. Does 1-44 filed 01/08/13
2:13-cv-00057 R & D Film 1 LLC v. Does 1-16 filed 01/08/13
2:13-cv-00063 Flypaper Distribution, LLC v. Does 1-19 filed 01/09/13
2:13-cv-00194 Private Lenders Group, Inc. v. Does 1-59 filed 01/31/13
2:13-cv-00228 D3 Productions, LLC v. Does filed 02/08/13
2:13-cv-00255 Riding Films, Inc. v. Does 1-35 filed 02/12/13
2:13-cv-00256 Riding Films, Inc. v. Does 1-12 filed 02/12/13
2:13-cv-00277 Riding Films Inc v. Does 1-44 filed 02/13/13
2:13-cv-00278 Riding Films Inc v. Does 1-44 filed 02/13/13
2:13-cv-00287 Riding Films Inc v. Does 1-65 filed 02/14/13
2:13-cv-00288 Riding Films Inc v. Does 1-65 filed 02/14/13
2:13-cv-00289 Riding Films Inc v. Does 1-64 filed 02/14/13
2:13-cv-00307 Zembezia Film (Pty.) Ltd. v. Does 1-47 filed 02/18/13
2:13-cv-00308 Zembezia Film (Pty.) Ltd. v. Does 1-66 filed 02/18/13
2:13-cv-00309 Zembezia Film (Pty) Ltd v. Does 1-66 filed 02/18/13
2:13-cv-00310 Zembezia Film (Pty.) Ltd. v. Does 1-66 filed 02/18/13
2:13-cv-00311 Zembezia Film (Pty.) Ltd. v. Does 1-66 filed 02/18/13
2:13-cv-00312 Zembezia Film (Pty.) Ltd. v. Does 1-70 filed 02/18/13
2:13-cv-00313 Zembezia Film (Pty) Ltd v. Does 1-48 filed 02/18/13
2:13-cv-00314 Zembezia Film (Pty.) Ltd. v. Does 1-58 filed 02/18/13
2:13-cv-00315 Zembezia Film (Pty) Ltd v. Does 1-51 filed 02/18/13
2:13-cv-00316 Zembezia Film (Pty) Ltd v. Does 1-51 filed 02/18/13
2:13-cv-00317 Zembezia Film (Pty) Ltd v. Does 1-18 filed 02/18/13
2:13-cv-00318 Zembezia Film (Pty) Ltd v. Does 1-57 filed 02/18/13
2:13-cv-00319 Zembezia Film (Pty) Ltd v. Does 1-47 filed 02/18/13
2:13-cv-00328 The Ledge Distribution, LLC v. Does 1-43 filed 02/20/13
2:13-cv-00329 The Ledge Distribution, LLC v. Does 1-44 filed 02/20/13
2:13-cv-00330 The Ledge Distribution, LLC v. Does 1-71 filed 02/20/13
2:13-cv-00455 Voltage Pictures, LLC v. Does 1-18 filed 03/13/13
2:13-cv-00456 Voltage Pictures, LLC v. Does 1-78 filed 03/13/13
2:13-cv-00457 Voltage Pictures, LLC v. Does 1-78 filed 03/13/13
2:13-cv-00458 Voltage Pictures, LLC v. Does 1-22 filed 03/13/13
2:13-cv-00459 Voltage Pictures, LLC v. Does 1-40 filed 03/13/13
2:13-cv-00460 Voltage Pictures, LLC v. Does 1-52 filed 03/13/13
2:13-cv-00461 Voltage Pictures, LLC v. Does 1-78 filed 03/13/13
2:13-cv-00462 Voltage Pictures, LLC v. Does 1-18 filed 03/13/13
2:13-cv-00507 Elf-Man, LLC v. Does 1-152 filed 03/20/13

Tuesday, April 2, 2013

You Have The Right To Remain Silent

Any lawyer who has done any number of jury trials has heard a judge give this instruction:

If you wake up in the morning and see that the sidewalk is wet, you may find from that fact that it rained during the night. However, other evidence, such as a turned on garden hose, may explain the presence of water on the sidewalk.

That is the common example of so-called circumstantial evidence as opposed to direct evidence. In other words, direct evidence is direct proof of something. Circumstantial evidence is when you don't have direct evidence of a particular fact, but you can draw a reasonable conclusion about that fact from other direct evidence.

Why am I explaining this? Well, it's because of what happened at today's Prenda Law show-cause hearing and several of the comments and questions that I've read since.

Apparently all the Prenda Law lawyers showed up today in response to Judge Wright's latest order to show cause. Amazing. But when Judge Wright started asking questions, every one of those lawyers invoked their Fifth Amendment rights. Wow.

So let's consider what really happened. Judge Wright accused the Prenda lawyers of basically defrauding the Court by pretending not to be the real party in interest. In other words, Judge Wright wanted to know if Ingenuity 13 and AF Holdings was really just John Steele and Paul Hansmeier. If so, then John Steele and Paul Hansmeier basically lied to the Court by failing to just tell the truth.

Why is that a problem? Well, a couple of reasons.

First, you can't lie to the Court. Do I need to say anything more about that?

Second, lawyers cannot buy lawsuits. In other words, to maintain the integrity of the profession, a lawyer cannot pay a plaintiff for the right to be that plaintiff's lawyer. That is why almost all the states require that a client remain primarily responsible for the costs of litigation even if the lawyer advances them. This general rule is sometimes described as a prohibition against a lawyer being both the plaintiff and the lawyer. There is just supposed to be a difference between the lawyer and the client. It just makes sense.

Judge Wright has basically indicated that everything he's seen, including Hansmeier's deposition transcript, leads to the conclusion that Steele and company aren't just the lawyers, they are in fact the client itself. In other words, the facts suggest that Ingenuity 13 and AF Holdings aren't just represented by John Steele and Paul Hansmeier, they are owned by them.

And here is where it gets a little interesting. Judge Wright called today's hearing to try and get to the bottom of it. Judge Wright just wanted to know the truth: Do John Steele and Paul Hansmeier really own AF Holdings and Ingenuity 13 (and possibly other such companies). So when those lawyers invoked their Fifth Amendment rights, they basically said "we can't answer your questions because we might go to jail if we do."

Oh wow.

But wait, is it really that bad? Is invoking the Fifth really close to an admisison of guilt? Well, in a word, yes. It is. In this case, it is.

Let's step back a second and examine why. The Fifth Amendment stems from a criminal defendant's right to remain silent. The prosecutor in a criminal case cannot force a defendant to take the stand and testify at trial. We've all seen this on TV.

Invoking the so-called "right against self incrimination" just means that you can't force someone to either perjure himself under oath or admit to criminal conduct. In this country, you just can't do that. Basically, the Fifth Amendment allows you to decline to make any statements under oath that could be used to put you in jail. That's it in a nutshell.

So today, in Judge Wright's courtroom, Prenda's lawyers basically said that answering the Court's questions could put them in jail. So they didn't answer any.

Now ordinarily the Fifth cannot be used as evidence of criminal guilt. Many, many years ago, it could. But not now. Not for about the last two hundred years. That's because a crime must be proven beyond a reasonable doubt. In other words, we don't send people to jail unless there is no reasonable conclusion but that the defendant committed a crime. As a matter of public policy, we don't want to send people to jail for no reason other than because they refused to answer some questions. Criticize it if you want, but that's the rule. Personally, I like that rule.

But these copyright troll cases are civil cases not criminal cases. In criminal cases, people go to jail. People get executed. In civil cases, people pay money--that's it.

So now I'll try to bring this all back together.

Many of the comments I've read sort of misunderstand the import of Prenda's lawyers taking the Fifth. I've read many comments to the point that since the lawyers didn't testify, there isn't really any direct evidence that they in fact are the owners of Ingenuity 13 and AF Holdings. Prenda's own lawyer actually made that exact statement during today's hearing. And that's actually true, there isn't.

But this isn't a criminal case. This is a civil proceeding.

Judge Wright isn't a criminal prosecutor trying to throw Prenda's lawyers in jail for committing a crime. Judge Wright is just exercising his inherent authority to govern proceedings in his own courtroom. Judge Wright doesn't need anything proven beyond a reasonable doubt. All Judge Wright needs is someone to show that it is more likely than not that Steele and Hansmeier are the real party in interest. If so, Judge Wright has undeniable power to sanction the shit out of those lawyers.

In other words, Judge Wright doesn't need anything but evidence that it is more likely than not that Steele and company are the real party in interest. And in this case (unlike a criminal trial) circumstantial evidence is enough.

So consider some of the circumstantial evidence:
When AF Holdings put forward a "representative" for a 30(b)(6) deposition (Google it), Paul Hansmeier showed up.
When AF Holdings was ordered to produce an actual representative at a hearing in Florida, Mark Lutz showed up. Mark Lutz is Steele's former paralegal.
No one has ever seen any real person associated with Ingenuity 13 or AF Holdings other than the lawyers.
Practically all the names for everyone associated with Ingenuity 13 and AF Holdings (other than the lawyers) appear to be fictitious names.
The lawyers never transfer any money out of their own bank accounts.
And finally, when asked to explain all this, the lawyers took the Fifth.

So in sum, Judge Wright told Prenda's lawyers that all the circumstantial evidence suggests that the clients are really the lawyers. Judge Wright gave those lawyers a chance to explain themselves. They took the Fifth.

Now Judge Wright has to make a decision about whether to sanction Prenda's lawyers or not. The question is not whether to throw those guys in jail, but just whether to fine them a whole bunch of money.

As I see it, there is plenty of evidence upon which the judge could reasonably conclude that Prenda's lawyers violated their duty of candor toward the tribunal.

Enough to throw them in jail? Maybe not.

Enough to fine the shit out of them? Absolutely.

In other words, Judge Wright woke up this morning, saw the grass was wet, and invited Prenda's lawyers to produce a garden hose. Instead, they took the Fifth. Expect bad, bad things to rain down on Prenda.


Max Kennerly over at The Beasley Firm, LLC wrote another excellent article on this topic from a different perspective.