Defense lawyer shows Steele’s links to Prenda Law
He also calls the situation a "Mexican standoff" and says sanctions are warranted.
That line between Steele and Prenda is one that Pietz hopes he has now drawn in indelible ink. A few days after asking permission to file this evidence, Pietz has now shown his cards. See Pietz's memo (PDF), declaration (PDF), and exhibits (PDF).
Prenda Law has filed dozens of lawsuits against John Doe defendants and threatened lawsuits against thousands more in its attempts to get its targets to pay settlement fees for downloading pornographic files. Now the lawyers behind the organization are being reprimanded by a federal judge who's more interested in attorney misconduct than Prenda's allegations of piracy.
In proceedings defending him to the Florida bar, John Steele's own lawyer was eager to show that Steele wasn't actually practicing law in that state. He clarified that Steele "maintains an ownership interest in several of Prenda's larger clients." And in a lawsuit brought by Prenda shell AF Holdings, the lawyer representing AF Holdings, Jacques Nazaire, confirmed during an e-mail exchange that Steele "has an interest in AF." Nazaire made that statement in the course of disparaging Alan Cooper as a "disgruntled employee" who was being paid by Steele. (Cooper has said his identity was stolen in order to put him in charge of Prenda shells like AF Holdings.)
Pietz filed the evidence along with a stinging motion rebutting the argument that there are no grounds for sanctions from Prenda, Steele, and Hansmeier. There are ample grounds, suggests Pietz—from perjury about Steele's ownership, to the changing story about Steele's housekeeper Alan Cooper, to the silence of all the principal actors who have invoked their Fifth Amendment rights.
After establishing his evidence related to Steele's ownership of AF Holdings, Pietz argues that Steele's comrade-in-arms at Prenda, Paul Hansmeier, "almost certainly perjured himself" during his February deposition. He didn't disclose that Steele is an owner of AF Holdings. Steele's ownership may also be against the law, although the situation there is murky. In his own brief, Pietz notes that trends in the legal industry tend to allow more direct financial involvement by attorneys, including "the loosening of contingent fee rules and allowance of third-party lawsuit financing." But Prenda's arrangement is "much more unsettling" and may violate laws against "maintenance" still on the books in Illinois and "barratry" in California.
Prenda debacle is a “Mexican standoff” and sanctions are justified
Duffy, Hansmeier, and Steele—whom Pietz now refers to as simply "Prenda Senior Management"—refused to answer any questions. Their "total silence" meant Pietz's John Doe client wasn't able to question them about defenses relevant to his case. "This case has devolved into a Mexican standoff of finger-pointing and hiding behind the Fifth Amendment, with the result being that both the Court and the Does are left wanting for answers on all relevant questions," writes Pietz. The Prenda silence means the court can draw "adverse inferences"—that is, the judge should assume the worst. He continues:Prenda is still in the position of using the Fifth Amendment both as a shield and as sword. Prenda may have put the sword down temporarily by dismissing the complaint without prejudice, but given the time and expense the putative Doe defendant in 12-cv- 8333 has already incurred in defending this case and exposing Prenda’s bad faith conduct, allowing Prenda to stonewall now, but potentially re-file later, hardly seems fair.As for the testimony from Steele acquaintance Brent Berry that disparages Alan Cooper, saying Cooper was essentially off his rocker? Pietz urges the court to give that little, if any, attention. "The whole document is inadmissible hearsay, full of double hearsay, and the Court would be justified in not considering it at all." The Berry testimony has seriously "credibility problems." Berry's declarations were signed just before closing sale on Steele's property, a sale that "would have yielded Berry a substantial commission."
Even if Berry's "outrageous (and shameful) character assassination of Mr. Cooper" is true, it doesn't change the fact that the Prenda-connected lawyers here—Duffy, Steele, and Hansmeier—control the shell companies through the use of straw men.
Between solid documents pointing to John Steele and the damning silence of Prenda's apparent founders, Pietz hopes to have enough evidence to shut this particular porn-trolling operation down for good.
Defamation cases under fire as well
Prenda was attacked on multiple fronts yesterday. One of the firm's last-ditch efforts to save itself was a defamation suit filed last month against Alan Cooper (reminder: Steele's former housekeeper who claims his identity was stolen), his lawyer Paul Godfread, and anonymous commenters on anti-troll blogs."Plaintiff’s defamation claims ring as hollow as its principals’ collective heads and should be dismissed," wrote a lawyer for Godfread and Cooper in two motions filed yesterday in separate Illinois courts. The motions lay out the basic Prenda business model for the judge:
Prenda Law, Inc. is a law firm whose attorneys, John Steele, Paul Duffy, and Paul Hansmeier,The suit goes on to run down the intimidation tactics allegedly used against Godfread and Cooper. The motion references Minnesota's anti-SLAPP law, which is meant to punish lawsuits that are attacks on speech.
have developed a lucrative practice monetizing copyright infringement allegations of pornographic
films...
The firm is an active player in this arena and has filed numerous lawsuits, in multiple forms, under multiple aliases... The fundamental element, however, has remained the same: pay a “settlement” to make the accusations go away, or face the embarrassment and expense required to prove your innocence.
As the Popehat blog noted, the anti-SLAPP motion could compel Prenda principals Duffy and Hansmeier to come forward with some evidence that they've actually been hurt if they want to proceed. That puts Prenda's "senior management" in a catch-22 regarding the defamation suits. They can either keep pleading the Fifth, which means these suits are likely toast, or they can start talking about how their business really works. That option would be to justify their questionable defamation claims, many of which involve anonymous invective posted on two anti-troll blogs that have become important sources of information about copyright trolls.
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