Prenda lawyer has a history of unusual class action clients
Judge has labeled Paul Hansmeier's class action tactics as "bold and improper."
While his copyright trolling business is on the ropes, Hansmeier has plowed ahead in another area of his practice: class action law. The tactics he has employed in his class action cases will be familiar to those who are familiar with Hansmeier's copyright litigation. In both sets of cases, Hansmeier has acted on behalf of friends, family, and business associates, not strangers. And in both instances, opponents have accused him of using the threat of burdensome litigation to extract nuisance settlements from his adversaries.
"Wholly beyond the pale"
When the parties to a class action settlement reach an agreement, members of the class have the option to object to the settlement. And if those objections are overruled, the objecting member can appeal the settlement. The lengthy appeals process can tie up the settlement money for years. So a new cottage industry of "professional objectors" has emerged. They threaten to tie up settlement money in years of litigation, hoping that the plaintiff's attorney will buy them off.The blog Fight Copyright Trolls discovered that Hansmeier appears to have gotten into the professional objecting game. In one case, the Hertz rental car company had been fighting a class action lawsuit since 2007. A settlement was reached, and in October 2012 Paul Hansmeier objected to the settlement on behalf of his father Gordon Hansmeier. Then he sent a letter to the plaintiff's lawyer, Dennis Stewart.
"This letter is to advise you that an objection will be filed to your proposed settlement," Hansmeier wrote, enclosing a copy of his objection. "I will extend to you an offer to settle this matter with my client for $30,000.00."
Stewart was not intimidated. "If you present this objection, it is clear that it will have been presented for an 'improper purpose'"—that is, as an effort to extort money from Stewart. And Stewart represented other injured plaintiff, not the defendant. "Please be advised that we consider this conduct to be improper and sanctionable," Stewart wrote.
"The idea that you would respond to a demand letter which you requested by threatening sanctions is unconscionable and wholly beyond the pale," Hansmeier responded. He accused Stewart of "hardball tactics designed to intimidate my client." In a court filing, he described Stewart's threats as a "bold and improper tactic."
But when Hansmeier actually filed his objections, the judge's ruling was scathing. "The only 'bold and improper' conduct the Court can identify is Objector’s counsel’s attempt to extract $30,000, from class counsel in exchange for Objector not filing objections," he wrote. "It should have been evident to any reasonable attorney that class counsel would not acquiesce given the tone and nature of Objector’s counsel’s demand."
He ruled that Hansmeier's objections were "without merit and would not succeed even it were allowed to proceed."
Friends and family
The Minneapolis Star Tribune, Hansmeier's hometown paper, has been covering Hansmeier's legal antics. Confronted by the paper for a Saturday story, Hansmeier acknowledged that most of the clients in his class action cases were friends and family. This is not unlike Prenda's copyright lawsuits, which were almost always filed on behalf of shell companies represented by a handful of individuals with close links to Prenda.In addition to his father, Hansmeier has also objected to two class actions settlements on behalf of his wife, one involving a lawsuit against Groupon, the other a lawsuit against Netflix. The Star Tribune reported that in October, Hansmeier filed a class action lawsuit against "several online travel companies and major hotel chains on behalf of his friend Allan Mooney, a 34-year-old personal trainer." That lawsuit was short-lived; Hansmeier dismissed it the following week.
“You generally start with people that are in your, shall we say, inner circle or whatever,” Hansmeier told the Star Tribune. “Now, I would hope that as time goes on that I expand the circle, that I gain some credibility and some experience and a reputation for successfully prosecuting these style of cases.”
Hansmeier also filed a class action lawsuit against Living Social on behalf of his law clerk, Nathan Wersal. Evidently, Wersal is upset that his LivingSocial vouchers expired before he had a chance to use them. But LivingSocial's lawyers have argued the case should be dismissed, arguing that the original purchase price on the coupons never expired. That case is ongoing.
In February, Hansmeier filed another case on behalf of Mooney. This one alleged that food sold by Frito-Lay and marketed as "all natural" actually contain genetically modified organisms. The defendants said that Hansmeier's lawsuit is a "copycat" lawsuit similar to 11 other cases that have been filed in the last 18 months.
There's nothing illegal about filing lawsuits on behalf of friends, family, and business associates. But repeatedly filing lawsuits on behalf of a few plaintiffs with personal ties to him suggests that Hansmeier may be struggling to sell his legal services to the general public. Perhaps his pattern of regularly changing the name of his law firm—since 2010 he has been associated with Steele Hansmeier, Prenda Law, Alpha Law Firm, and now the Class Action Justice Institute—has made it difficult to attract more clients.
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