Doppel Bock – Antonelli Article AND Judge Chen Order To Show Cause (3:12-cv-02396), 16 Oct 13

DBock1My goodness things are crazy around here.  I’m going to try to blend two topics into this post.  I thought the title of “Doppel Bock” is good, as it is a strong German style beer that packs a kick.

Antonelli Article

The first topic is a well written piece by Attorney Jeffrey Antonelli, titled “Torrent Wars: Copyright trolls, legitimate IP rights, and the need for new rules vetting evidence and to amend the Copyright Act.”   Torrent_Wars__Copyright_trolls__legitimate_IP_rights__and_the_need_for_new_rules_vetting_evidence_and_to_amend_t

The article was posted to Illinois State Bar Association

The article gives a good overview of BitTorrent Copyright Trolling, how it works, why it has been successful, and what changes need to be made in the courts and with the Copyright Act.  The areas I really liked was “The Need For A Court Screening Process” and “The Need To Amend The Copyright Act.”

Court Screening

Attorney Antonelli suggests some sort of screening process be employed by the court to ensure these cases are bought about based on real evidence.  He uses the Maryland District Court as an example in dealing with the validity of Malibu Media claims.

Maryland has appointed Professor William Hubbard, a member of the faculty at the University of Baltimore School of Law, who teaches copyright and intellectual property law, to serve as a Master in the Malibu cases. When a copyright lawsuit is filed by Malibu Media, procedures are followed to, inter alia, a) allow the Master to obtain information from the ISP, b) allow the Subscriber to provide the Master with information to enable the Master to make a preliminary recommendation whether a plausible claim for copyright infringement may be brought against the Subscriber, and c) for the Master to makes a recommendation that a factual basis exists, or does not exist, for Malibu to assert a plausible claim for relief against a Subscriber for copyright infringement.

Changes to the Copyright Act

Attorney Antonelli suggests that changes to the Copyright Act are needed to be made to differentiate between “For-Profit” infringement and “Non-Profiteering” infringement.  He suggests non-profiteering copyright infringement by an individual (for private viewing or listening, etc.) be subject to a greatly reduced monetary fine.

In order to present the potential for a proportional remedy for non-profiteering copyright infringement by a consumer, the writer suggests amending the Copyright Act to a maximum of $5,000 statutory damages where willfulness is demonstrated, and $500 if willfulness is not demonstrated.

This would of course be in addition to attorney’s costs and fees, and the burden of proof would still be the responsibility of the Plaintiff.  I also believe this would be a great way to reduce a good amount of frivolous copyright infringement cases, while still allowing the more serious offenders to be fined – within reason.  The across-the-board maximum $150K statutory damages amount is excessive and is being abused by various Plaintiffs.  I think we may have some time to wait before any changes to the Copyright Act are made.  In the mean-time hopefully more judges will see the abuses that are happening and take matters into their own hands.

Prenda Happenings / Judge Chen Order

The second part concerns a wonderful Order to Show Cause for John Steele and Paul Hansmeier.  Today (16 Oct 13), Judge Edward Chen issued the following Order in AF Holdings LLC v. Joe Navasca, 3:12-cv-02396:  Order Adopting Report And Recommendation Granting Defendant’s Motion For Sanction.   Doc_120_Chen_Order_02396(CA)    Archive Docket

It is a bit of a long read (but good).  In the Order, the Judge addresses the motion from Mr. Navasca to hold John Steele and Paul Hansmeier jointly and severally liable for the amount of $22,531.93.  This is the amount that the court awarded Mr. Navasca against AF Holdings LLC, for attorneys fees and costs.   Doc100_Fees_02396(CA)   This motion was filed to prevent John Steele and Paul Hansmeier from simply claiming they were never part of Prenda Law or AF Holdings LLC and thus the fees/costs award does not apply to them.

Judge Chen goes into sufficient detail in his analysis to show that the Prenda Law/AF Holdings operations are suspect, fraudulent, and were conducted in nothing less than bad faith (My Opinion).  He refutes and rejects all of their objections and places the blame for the outcome squarely on their shoulders.  The judge goes on to address Mr. Navasca’s objections and the main problem he sees is that Magistrate Judge Vadas only suggested John Steele and Paul Hansmeier be deems the “Alter Ego” of AF Holding LLC, for the purpose of amending the judgment debtor under California law.  So then Judge Chen issues the following order.

Accordingly, the Court hereby orders AF, Mr. Steele, and Mr. Hansmeier to show cause as to why the judgment should not be amended to add Mr. Steele and Mr. Hansmeier as debtors for the attorney fee award. The Court further orders Mr. Steele and Mr. Hansmeier to show cause as to why sanctions against them should not be issued pursuant to the Court’s inherent authority (with the issue of personal jurisdiction being addressed by the order to show cause).

A response to this order to show cause shall be filed within two weeks from the date of this order.

A reply to the response shall be filed within three weeks of the date of this order

While the parties and Mr. Steele and Mr. Hansmeier may submit declarations in support of their respective papers, the Court hereby forewarns all persons or entities involved that such declarations (or affidavits) will be given little to no weight because the Court shall be conducting an evidentiary hearing on the order to show cause on Thursday November 21, 2013. Thus, any testimony in a declaration (or affidavit) that a party or nonparty deems important, significant, or critical must be presented at the evidentiary hearing by a live witness, subject to cross-examination.

So it is going to be interesting to see what response the dynamic duo comes up for this one.  Some people do not think Steele or Hansmeier will have the gall (or stupidity) to show up and subject themselves to cross-examination.  The judge has clearly laid it out that no excuses will be accepted.  This is going to be another fun one to be at – I’m so envious of those of you who will be in attendance.  Note: To those who will attend – Bring spare cell phone batteries – Please.    😉

DietrollDie 🙂

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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5 Responses to Doppel Bock – Antonelli Article AND Judge Chen Order To Show Cause (3:12-cv-02396), 16 Oct 13

  1. DonaldB says:

    This OSC hearing might be interesting.

    But my expectation is that it will be quite short.

    I can’t see Steele or Hansmeier being willing to get on the stand and be cross-examined. It’s not an open-ended hearing, but there are still many revealing questions that can be framed as relevant to the ownership and control of AF Holdings and Prenda. And what could they say, beyond a naked assertion that they aren’t officers of AF Holdings, that would help avoid being on the hook for the costs.

    If they aren’t going to testify, there is no obvious benefit to attending in person. Except, perhaps, not irritating the judge. But showing and not testifying won’t avoid that.

    Perhaps they will write a brief once again refuting personal jurisdiction, but that appears to have already been decided.

  2. @donaldB: So, what’s new?? This is a repeat of the Minnesota hearing, except for the judge letting the good side know it has to serve S&H personally to definitively establish personal jurisdiction.

    • DieTrollDie says:

      Not exactly. The MN hearing was to determine if the court had been a victim of “Fraud” by Plaintiff/Prenda Law. IMO the MN hearing prepared this judge for what Prenda Law likes to try and do when cornered.

      This OSC hearing is to allow John Steele and Paul Hansmeier the chance to explain why they should not be jointly and severally liable for the approx. $23K attorneys fees/costs that was already awarded to Mr. Navasca. The main point of this hearing will be that Steele/Hansmeier are in fact the “Alter Ego” of AF Holding LLC. The issuance of this show cause order establishes the personal jurisdiction over Steele & Hansmeier.

      The judge could very easily have told Mr. Navasca to try again. He didn’t and instead (on his own) ordered Tweedledum & Tweedledee to explain to the court why they should not be held liable for the $23K. The court also wants them to tell him why he should not sanction them pursuant to the Court’s inherent authority.

      The court then makes is very clear (bolded entire paragraph) that he is not going accept their standard clownish behavior and filings. The funny part was telling Prenda that he wants a “live
      witness, subject to cross-examination,” for a 21 Nov 13, hearing, on any information they provide (party or non-party) in their response to the OSC.

      This is like one of those poker games on TV where the you can see one side making a mistake and they cannot stop themselves. The best they could probably do is go “Mark Lutz” and disappear.

      DTD 🙂

      • DonaldB says:

        I read the order slightly differently.

        Any *testimony* has to be provided by a witness subject to cross-examination. Other evidence and legal arguments may still be submitted in writing.

        Steele and Hansmeier might be able to dig up a new legal theory or authority as to why they aren’t subject to the personal jurisdiction of this court. They may submit bank records, a contract that documents the sale of Steele and Hansmeier cases to Prenda, etc. Prenda can submit documents showing the independent establishment of Prenda. AF Holdings can submit documents that record the establishment and control of AF Holdings, etc. None of these would require a personal appearance.

        Steele and Hansmeier can actually still submit declarations and other testimony, but they have already been warned that it will be given little consideration. (I was about to say ignored, but it would probably be read and passed around for the amusement value.)

        This is much different than the recent MN hearing. There the only issue open was the validity of the document, especially the signature put forth by AF Holdings. The questions couldn’t go beyond that immediate issue. (Although I’m a little surprised that the judge didn’t flat out ask Steele if he signed. Or even box him in a little by asking if he was present when the document was signed.)

        In the upcoming OSC hearing the judge will be free to ask wider questions. Almost certainly about Steele’s direction of Gibbs. Perhaps even about interactions with the putative client, to the extent it doesn’t infringe on attorney-client privilege.

  3. Maybe not a strict repeat, but definitely parallel in many important ways…court is mad at S&H (OK, different issues, but still!), a summons to them with no innocent answers or responses,

    Which of the two tacks they take on the fateful day is only worth arguing about with a beer in everyone’s hand! Me, I vote for (as not TOO unlikely) a note from the US Marshall’s service about custody arrangements.

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