Qui Tam Claims – Copyright Trolls Take Notice – 3:12-cv-01006 (Seth Abrahams)

So what is the hell is Qui Tam in relation to the porn copyright troll law suits?

This is the next step in the destruction of the copyright troll business model. First off for those of you new to this, please understand the efforts of the copyright trolls are not based on protecting their clients and recouping lost sales rightfully entitled to them. That is just the sad rationalization that issues from their mouths. This is plain and simply a business model to use the court to extract as much money in settlements from Doe defendants and hopefully never have to litigate the issue on its merits.  Once you understand this, then the how Qui Tam relates becomes easier to grasp.

Here is what the Legal Information Institute (LII), Cornell University, says about a Qui Tam Action.

In a qui tam action, a private party called a relator brings an action on the government’s behalf. The government, not the relator, is considered the real plaintiff. If the government succeeds, the relator receives a share of the award. Also called a popular action.

For example, the federal False Claims Act authorizes qui tam actions against parties who have defrauded the federal government. 31 U.S.C. § 3279 et seq. If successful, a relator in a False Claims Act qui tam action may receive up to 30% of the government’s award. 

The use of a Qui Tam action has likely been in the works for a while, but just recently was brought out in the open by Attorney Steven Yuen, in the Seth Abrahams v. Hard Drive Productions LLC (Prenda Law), case, #3:12-cv-01006.  Link to my previous Abrahams post.    At a 21 Sep 12, hearing, HDP/Prenda gave up its stupid argument that the two case dismissals on their part against Mr. Abrahams did not constitute a final judgement in favor of Mr. Abrahams.  At this point the court decided to raise the issue of subject matter jurisdiction.  Both parties were not ready to discuss the matter and the court gave Mr. Abrahams until 28 Sep 12, to file a brief on their view.  HDP/Prenda Law was given until 5 Oct 12, to respond to the brief.  I look forward to reading their response and only hope it is better than their initial response on how the two case dismissal rule applied to Mr. Abrahams.

On 28 Sep 12, Mr. Yuen filed a brief in which he requested the court not address the subject matter jurisdiction for the Qui Tam claim at this time.   Abrahams supplemental brief

Likewise here, to promote judicial economy, and to preserve the parties’ resources, this court should exercise restraint, and not address subject matter jurisdiction. This is because Hard Drive already stipulated that the two dismissal rule applies. Thus, the court can enter judgment now in Mr. Abrahams’s favor without the court and the parties spending additional resources on his federal qui tam claim which is not easily resolved and more difficult to decide. (See Hal Roach Studios, Inc. v. Richard Feiner and Co., Inc. (9th Cir. 1990) 896 F.2d 1542, 1550, citation omitted.)

Mr. Abrahams tells the court that even if it decides to address the issue of subject matter jurisdiction, he should be allowed to amend his complaint to state the jurisdictional basis of the claim.

According to Mr. Abrahams/Yuen, HDP/Prenda Law made a false claims against the US government when it submitted its initial case against 118 John Doe defendants (Case Archive 4:11-cv-01567). The false claim is based on HDP/Prenda Law only paying a $350 filing fee when 118 separate cases should have been filed and the US government received appropriate payment – $350 X 118 = $43,300. This is covered under 31 USC § 3729 – False claims, section (a)(1)(G):

(G) knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government,

So what is the penalty for 117 violation of this statute?

is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note; Public Law 104-410 [FN1]), plus 3 times the amount of damages which the Government sustains because of the act of that person.

For the mass defendant case Mr. Abrahams was initially under, there were 118 defendants. HDP/Prenda Law paid one fee, so I will use 117 incidents of false claims.

  • 117 X $5,000 (Minimum) = $585,000
  • 117 X $10,000 (Maximum) = $1,170,000
  • Lost fees of $350 X 117 = $40,950 X 3 = $122,850
  • Approximate range – $707,850 – $1,292,850 (plus adjustments for inflation)

Please refer to 31 USC § 3730 – Civil actions for false claims, for full details on how much of these penalties Mr. Abrahams could receive, but the maximum is 30%, plus costs and reasonable attorney fees.

As you can see this clearly fits the copyright troll business model of minimum filing fees (knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government,) and maximum settlements from the defendants.

Well, such a claim against HDP/Prenda Law is going to send shock-waves through the copyright trolls. The best option for HDP/Prenda Law is going to try to get the claim dismissed early by any means necessary. If they don’t have to address the issue, it is business as usual. If they are forced to address the issue, they will have to show that they had good reason for the mass defendant cases. This means truly showing that all of the defendants were jointly and severally liable, as well as all belonging in this jurisdiction. This will require their technical monitoring personnel (6881 Forensics LLC – Peter Hansmeier) to come out from under the rock and face the music. Details on the monitoring of the BitTorrent swarms, the qualification/certifications of personnel involved, and how easy it is to truly find which defendants are under the courts jurisdiction will come out. So even if the Qui Tam claim is shot down (I highly doubt this), details on the weaknesses of the BitTorrent monitoring will be exposed.

This will be an interesting test case and I’m sure I will have more to post on it in the future. What will be truly fun to watch is when the first Qui Tam cases are filed in New York and other location where the courts have already started to sever all defendants except for Doe #1.

Well John, you may be the “BitTorrent Bull,” but I foresee a little operation waiting for you and the other animals out there.  Short Podcast on this.

DieTrollDie 🙂

“Some ships are designed to sink… others require our attention.”

About DieTrollDie

I'm one of the many 'John Does' (200,000+ & growing in the US) who Copyright Trolls have threatened with a civil law suit unless they are paid off. What is a Copyright Troll? Check out the Electronic Frontier Foundation link - http://www.eff.org/issues/copyright-trolls
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31 Responses to Qui Tam Claims – Copyright Trolls Take Notice – 3:12-cv-01006 (Seth Abrahams)

  1. D'oh! says:

    HOLY COW!! (pun intended) That’s an amazing case–I hope Abrahams is as pissed off as he seems and really carries this out. I need to go buy some more popcorn!

  2. Anonymous says:

    Wait, didn’t Steele drop by a few months ago to tell us we should ask Mr. Abrahams how he likes being dragged into federal court if we didn’t believe Prenda was serious about individual suits? John was also professional enough to drop some personal insults directed as Mr. Abrahams. Considering how this has turned out, one might be inclined to concluded that Steele was a clueless idiot and completely full of shit.

    What’s going to make this one more interesting, and we see the strategic value for Yuen, is that the original mass-Doe case Hard Drive Productions vs. Does 1-118 was a case where the work was not registered until eight months after the alleged infringements took place. I’m surprised this wasn’t mentioned in the Qui Tam claim, but perhaps this aspect of the fraud is not directly relevant to the Qui Tam itself, but will be useful in establishing the fraud. To be sure, the fact that HDP’s requests for statutory damages were all fraudulent due to the lack of registration should be a very powerful argument that joining 118 defendants in a case based on fraudulent claims was a direct attempt to avoid obligations to pay the government. I mean if even one case against one Doe asking for statutory damages was fraudulent, bundling 118 together to save all those filing fees sure sounds like an attempt to defraud the government. I’m sure Mr. Yuen has not overlooked this possibility though, as Abrahams’ complaint went into extensive detail about HDP’s shenanigans regarding the registration, so this is probably just not the right time or place to get into it.

    Very, very interesting to see how this has evolved. I have never even heard of Qui Tam before this so I don’t think anyone guessed where Yuen was going when he took up Wong and Abrahams’ cases. We all thought if there was a master plan beyond just getting HDP’s claims against his two defendants dismissed, it would be an eventual class-action.

    This is very exciting. And remember kids, it could become even more exciting as there were 117 other Does in the originating mass-Doe suit and with HDP’s registration fail leaving them all off the hook for statutory damages and reinforcing the argument that HDP’s case was fraud, fraud, fraud, this may be only 1/118 of the iceberg. Brett Langdon Gibbs had several CA cases where the registration was not made until after the alleged infringements, I didn’t keep track of the case names and numbers but a while back when I was curious about just how bad Brett fucked up I was easily able to find three cases where they didn’t have registration, so there are plenty more opportunities for enterprising lawyers where this came from.

  3. Anonymous says:

    Wait, didn’t Steele drop by a few months ago to tell us we should ask Mr. Abrahams how he likes being dragged into federal court if we didn’t believe Prenda was serious about individual suits? John was also professional enough to drop some personal insults directed as Mr. Abrahams. Considering how this has turned out, one might be inclined to concluded that Steele was a clueless idiot and completely full of shit.

    What’s going to make this one more interesting, and we see the strategic value for Yuen, is that the original mass-Doe case Hard Drive Productions vs. Does 1-118 was a case where the work was not registered until eight months after the alleged infringements took place. I’m surprised this wasn’t mentioned in the Qui Tam claim, but perhaps this aspect of the fraud is not directly relevant to the Qui Tam itself, but will be useful in establishing the fraud. To be sure, the fact that HDP’s requests for statutory damages were all fraudulent due to the lack of registration should be a very powerful argument that joining 118 defendants in a case based on fraudulent claims was a direct attempt to avoid obligations to pay the government. I mean if even one case against one Doe asking for statutory damages was fraudulent, bundling 118 together to save all those filing fees sure sounds like an attempt to defraud the government. I’m sure Mr. Yuen has not overlooked this possibility though, as Abrahams’ complaint went into extensive detail about HDP’s shenanigans regarding the registration, so this is probably just not the right time or place to get into it.

    Very, very interesting to see how this has evolved. I have never even heard of Qui Tam before this so I don’t think anyone guessed where Yuen was going when he took up Wong and Abrahams’ cases. We all thought if there was a master plan beyond just getting HDP’s claims against his two defendants dismissed, it would be an eventual class-action.

    This is very exciting. And remember kids, it could become even more exciting as there were 117 other Does in the originating mass-Doe suit and with HDP’s registration fail leaving them all off the hook for statutory damages and reinforcing the argument that HDP’s case was fraud, fraud, fraud, this may be only 1/118 of the iceberg. Brett Langdon Gibbs had several CA cases where the registration was not made until after the alleged infringements, I didn’t keep track of the case names and numbers but a while back when I was curious about just how bad Brett fucked up I was easily able to find three cases where they didn’t have registration, so there plenty of additional opportunities for enterprising lawyers where this came from.

  4. Subscribe says:

    Subscribe

    • Anonymous says:

      FYI for subscribers, this site has RSS feeds for articles and comments, which makes it easy to keep up with everything without even having to visit the site much less sort through every article to find new comments. Same deal over at SJD’s.

      • SJD says:

        Thanks for reminding. it’s no surprise that I follow every comment from DTD’s and Cashman’s blogs. I put together some tips about following/searching: hope it helps.

        Won’t speak for DTD, but “subscribe” comments are OK with me. Sometimes I eventually delete them, which does not affect the subscription — a small bug/feature. Whatever works for Does to stay informed is good for me. Knowledge is the most powerful weapon in the war against trolls.

  5. Anonymous says:

    Wow, this is wild. Just floating this idea is going to get lawyers to come out of the woodwork and take cases on contingency, hoping to get a piece of this action.

    If John wasn’t BSing again about signing up a big adult content producer and starting filings on their behalf on Monday, that is only going to make things worse for him and his clients. Pissants like Paul Pilcher probably don’t have deep enough pockets to pay off one of these claims (although their insurance might…), but you put someone with deep pockets on the wrong end of one of these claims? Sharks will be circling.

    • Anonymous says:

      Sorry for spamming posts. This is obviously speculative, but the more I speculate the more I love it.

      One can imagine Doe-defenders spamming these lawsuits the same way the Trolls have spammed mass-Doe cases. If this gets traction, *every* mass-Doe suit, at least in jurisdictions that have rejected joinder in massively-geographically-distributed-mass-Doe suits, is an opportunity for one of these claims. We could see counter-trolling firms spring up just as trolling firms have, to bring these claims and just push for and extract settlements from Troll plaintiffs, or even better, if these claims are indeed solid, go all the way for summary judgement or trial and the big bucks.

      Pandora’s Box. It’s open.

  6. sharp as a marble says:

    on the one hand the trolls have been getting a *bit better about the jurisdictional issues that’s why there are soo many cases with less than 20 defendants. (that and the forum shopping) but even still because these are federal, in theory they could do a qui tam claim against say malibu media for the over 10,000 does they have avoided paying filing fees on. this would be freaking crazy it would be close to $100 million just for that company, i guarantee that malibu does not have those kinds of assets. the possibilities make me literally giddy, i cannot wait to see how this plays out. hell just the dc cases from nu image will bankrupt that crappy ass “production company” in theory one should be able to bring these claims up anywhere, not necessarily in the dc court system, does can forum shop for them selves lol.

    also imagine lightspeed’s cases. Do they have to be federal cases to go about saying they defrauded the government?

    • Anonymous says:

      It doesn’t matter how much better they get or how clean their current cases are. At least until the statute of limitations on the Qui Tam claim runs out, what’s done is done and if they broke the law someone can bring suit. The definition is too much legalese for my non-lawyer ass to comprehend, but it is bare-minimum three years up to ten depending on a set of conditions, but sounds like it is at least six years here.

      If this turns out to be a viable claim against the trolls, and that’s obviously a pretty big if, there is already enough of a backlog of misbehavior to keep Doe-defenders busy for years and bankrupt every troll plaintiff that was filing cases a year ago and many who are starting today. Lightspeed, Hard Drive Productions, MCGIP, Millennium TGA, Ingenuity 13, Third Degree Films, Patrick Collins, First Time Videos, Baseprotect, Pacific Century, Digital Sin, Celestial, AF Holdings, Boy Racer, West Coast Productions, On The Cheap, everything filed by DGW. I’m sure I’m missing more than a few, but you get the idea.

      Cases where they didn’t have copyright registration should be particularly lucrative as the entire basis of the claims in those complaints were BS, aside from using joinder to rip off the government.

      Randazza’s outfit Liberty Media is a bigger conglomerate, they have deeper pockets than a lot of Steel and Lipscomb’s clients, so someone might want a piece of them.

      Evan Stone? He was doing these for Hustler. Deep pockets! Also some anime distributors that may be better capitalized than the Arizona home-based business crowd.

      And what about Kathryn Bigelow’s production company? I’ll bet they can afford to pay reparations for their trolling activities.

      Fun, fun fun!

      • that anonymous coward says:

        Stone dropped all of the Hustler cases when Larry fired him, and Stone had some not so nice words for the porn industry as a whole at that time.
        Liberty Media Holdings should not be confused with the other Liberty Media that owns cable stations.
        One that didn’t make your list is Raw Films LTD. which hold no US copyrights and if IIRC could only have gotten actual damages… maybe if that.

  7. Raul says:

    DTD,
    Richter Scale Magnitude possible 9.9. Just WOW, great news and the possibilities… .

  8. Anonymous says:

    I wonder how much Steve Jones is going to be able to get for Lightspeed Media Corporation with this hanging over his head… He’ll be lucky if he can pay someone $1 million to take it away with the amount of liability he may be exposing a new owner to, or find his ass in really deep shit if he doesn’t disclose the risk to a potential buyer, especially now that people are posting about the possibility on the Internet.

  9. TROLLS-R-A-DISEASE says:

    QUI TAM EVER F*ING ONE OF THE SUITS IN EVERY JURISDICTION POSSIBLE………..it looks like we finally have these scumbags!

    I don’t know what it takes to file Qui Tam, but a full on assault on the trolls in a only small handful of cases should be enough to put an immediate end to their new extortion filing activities. Then we can all look forward to going back to the rest of the extortion cases and cleaning up, both financially and morally. These f-ing trolls deserve nothing but the worst rot-in-hell treatment we can all wish upon them.

    Maybe a notice or two to the major insurance carriers of these disgusting bottom feeders would also help……bring a little unwanted attention (by the trolls anyway) to the pending huge losses the insurance carriers are about to be held liable for. The troll tactics leave these deep pocket insurance carriers possibly on the hook for tens or hundreds of millions…..tell me those carriers are going to be happy to continue to carry these f-ing trolls insurance policies.

  10. The Tod says:

    Johnny, maybe filing those single doe cases………not such a good idea.

    • Anonymous says:

      Yep, Abrahams was in Brett Langdon Gibbs first batch of single-Doe CA cases (I believe among HDP’s first five) as was Wong.

      Every time I see them file more, I get giddy. It’s just going to get worse and worse.

  11. Guest says:

    >First off for those of you new to this, please understand the efforts of the copyright trolls are not based on protecting their clients and recouping lost sales rightfully entitled to them.

    Anyone who’s been following copyright-based cases would, and should know as a matter of fact that “protecting clients and recouping lost sales” has never, ever been the aim of seeking settlement, back when the RIAA began years of shitstorms. The Pirate Bay case? Confirmed by the IFPI that the fines will be used to pay for more enforcement efforts. The RIAA settlement letters? Not a dime has gone to the artists. Blank media levies? Same story. Performance rights organisations? Can’t even maintain a proper list of what artists they cover and only end up paying the top 10% anyway, yet they’ll collect from any venue that might have music just in case.

    I’m not defending the abolishing of copyright or illegitimate downloads. However, it’s a point that bears repeating to the troll apologists that believe that artists or pornographers are somehow enriched by all these shakedowns. Artists are NEVER, repeat NEVER, going to see any money from these initiatives. To claim otherwise is contrary to enforcers’ modus operandi over the last decade.

    • that anonymous coward says:

      And this could help explain why the public are so disgusted with copyright, leading to more people ignoring it. It is outdated and is being used as a crutch by industries who want their old business model kept alive at any cost.

  12. steven says:

    Yuen has spent 100’s of hours trying to fight the good guys, in multiple cases, and has as many dollar bills as his clients have girlfriends. Keep wasting your time Yuen. It was hilarious watching your face when you got your entire case kicked out with $0 after 6 months of work. I knew the first day you filed your silliness that you would not be allowed to proceed. I figured, why not let you spend 6 months wasting your time. After all, you might learn some law, or at least get your partnership back.

    Yuen, if you want to waste 6 months at a time to get $0 you can do that as long as you want. Never one to criticize another person’s business plan.

    I know one little Troll that didn’t walk with $0 in that case BTW . . . .

    • DieTrollDie says:

      Well well John Steele. Is that you? Back to tell us that we are all doomed. Back in MN I see. Say “HI” to Peter Hansmeier for us. Time and common sense is on our side. Little by little we make gains and more powerful people come to our side. You ego will be the death of you and your empire.

      DTD 🙂

      Author : steven (IP: 75.72.88.156 , c-75-72-88-156.hsd1.mn.comcast.net)
      E-mail : yuen@needsanewjob.com
      URL : http://yuen

      Network
      NetRange 75.72.0.0 – 75.72.255.255
      CIDR 75.72.0.0/16
      Name MINNESOTA-12
      Handle NET-75-72-0-0-1
      Parent CCCH-3-34 (NET-75-64-0-0-1)
      Net Type Reassigned
      Origin AS
      Customer Comcast Cable Communications Holdings, Inc (C02610778)
      Registration Date 2010-10-18
      Last Updated 2010-10-18
      Comments
      RESTful Link http://whois.arin.net/rest/net/NET-75-72-0-0-1

      • that anonymous coward says:

        Should we let Comcast know he is using their network? I mean don’t that have the right to refuse service? It would be hysterical to see Comcast blackball him.

    • Guest says:

      [citation needed]

    • Anonymous says:

      Be careful when you drink John, you’re not talking about confidential settlement terms are you? I would hate for Yuen to read this and come after you for contempt or yet another civil suit.

      It’s not about money, it’s about you proving twice in a row that you are a pussy, too scared to take the cases you start to trial. How do you expect anyone here to take you seriously when you settle and run, then show up and talk tough like failing and losing and looking weak and being a coward is all part of your master plan?

      And don’t think we don’t see your pattern, you stop in to Troll whenever something really rubs your insecurities the wrong way. This Qui Tam theory must be making the Master Troll sad!

      Boo!

    • Anonymous says:

      Wow John, it must suck for your ego that you finally started naming people and still nobody is impressed.

    • Irritated Troll Hater says:

      Alright!!!!!! John has returned. What up you Douche! Why you talking junk about Yuen when he is kicking the shit out of HDP? Have you been drinking again?? Awww, poor John needs some liquid courage to talk to us.

      You know, by reading the douche’s comment, if you substitute Steele for Yuen, it describes Steele 100%.

      You are right John, you do know one little troll that IS walking away with $0 from that case, and he is associated with you. Actually, all the trolls you know are walking away with $0.

      Unfortunately, the douche won’t be reading this. He made his hit and run. F’n pussy.

      Down with all Trolls

  13. Raul says:

    Reminds me of Hitler’s rantings before the Fall of Berlin. Does NV have some decommissioned Cold War bunkers for sale on the cheap?

    • Sol says:

      LOL, good one. Yes either Hitler or Baghdad Bob. Hell, chicken Little may not be so far off either!

    • Porno Doe says:

      It has been posted before but here it goes again!

      Never gets old!

      We should start calling him Comical Steele!

      STEELE You scare nobody… and for your young bull Ruggiero, we have a little surprise waiting for him! Please keep naming!

      MAKE SURE YOU SERVE THEM ALL

  14. asphinctersayswhat says:

    here is the thing, from what i understand ANYONE can bring a qui tam case as long as they have evidence of governmental fraud. it does not have to be a doe, it can be some chump who is homeless and is hoping to win the lottery. if i had no assets i would find a lawyer and file one of these rightnow.

  15. Pingback: DieTrollDie.com Is Two Years Old | DieTrollDie

  16. SDBud says:

    Maybe it’s time for the victims of Patent trolls to take a law lesson, and consider Qui Tam themselves.

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