service – Techdirt (original) (raw)

How Do You Sue A DAO?

from the who-do-you-sue? dept

Decentralized Autonomous Organizations (DAOs) are one of the most fascinating things to emerge from the crypto space. While everyone was going crazy over NFTs, almost all of the more interesting things were happening in the DAO space. DAOs are something of an experiment in being able to form new kinds of organizations quickly in non-traditional ways. It’s not a corporation. It’s a much more amorphous digital setup to bring together a group of people to work towards a common goal, often (but not always) involving some tokenization and voting power.

Of course, as with any such thing, some very silly things may happen by people confused about how things work. But, there are many (less high profile) DAOs that are showing how these vehicles can be useful in bringing a group of interested people together to accomplish something.

But, then, of course, there are the legal questions. A few weeks ago the Commodity Futures Trading Commission (CFTC) filed a lawsuit against Ooki DAO. In theory, the Ooki DAO was decided to allow members to make leveraged trades on digital assets. The lawsuit alleges that the Ooki DAO violated commodity trading laws, as well as failing to abide by know your customer (KYC) laws for financial products. But… that’s left open a big question: just how exactly does one sue an amorphous blob of people who have come together for this purpose?

And, for starters, how does one serve a lawsuit on a DAO?

The CFTC asked the court to accept a somewhat unique form of service: posting the lawsuit to a “help chat bot” on the Ooki DAO website, and then posting a copy to Ooki DAO’s public forums.

By choosing to organize itself as a DAO, the Ooki DAO has structured its business in a way that has erected significant obstacles to traditional service of process. The Ooki DAO has no headquarters or physical office location; no mailing address; does not appear to be registered in any jurisdiction; and does not have a listed president, secretary, treasurer, or agent appointed to accept service….

Instead, it is a completely decentralized unincorporated association of anonymous individual Ooki Token holders who have voted those tokens to participate in the business of operating the Ooki Protocol. The Ooki DAO offers a website to access the Ooki Protocol (ooki.com). Through that website, users may submit comments or requests for assistance through a Help Chat Box linked through the website. Separately, the website links to an Online Forum for Ooki Token holders to discuss and vote on Ooki DAO governance issues (forum.ooki.com)….

[….]

In addition, on the same date it filed the Complaint, the Commission provided copies of the summons, complaint, and additional related papers to the Ooki DAO via the Ooki DAO’s Help Chat Box (through a submission with attachments via the Help Chat Box); and further provided notice of the action via the Ooki DAO’s Online Forum (which does not permit the posting of attachments). In addition, the day after serving the summons, complaint, and certain additional related papers, the Commission served additional related papers on the Ooki DAO via the Help Chat Box, with contemporaneous notice of such service via the Online Forum. In these communications, the Commission requested that the Ooki DAO contact counsel for the Commission to discuss the litigation, including service of process.

As of the filing of this motion, the Ooki DAO has not responded to the request to contact counsel for the Commission

While the Ooki DAO did not respond to the CFTC’s request to contact the Commission… it did start discussing all this on its forums, as laid out in a further filing by the CFTC.

Shortly after filing the Motion for Alternative Service, the Commission discovered that, approximately contemporaneous with or shortly after the Commission filed the Motion for Alternative Service, a post appeared in the Ooki DAO’s Online Forum (forum.ooki.com) titled “Future of Ooki DAO” and discussing the Commission’s litigation against the Ooki DAO…. This demonstrates clear awareness by the Ooki DAO and its members of the Commission’s action. Thus, in the Commission’s view, this is relevant to the Court’s consideration of whether to grant the Motion for Alternative Service because it demonstrates the Ooki DAO’s actual notice of the action. The Commission thus requests that the Court consider this additional fact when deciding the Motion for Alternative Service.

And thus, the court okays service by… help bot.

The Motions are GRANTED and the Court orders that service of process on the Ooki DAO may be made in this action by providing a copy of the summons and complaint through the Ooki DAO’s Help Chat Box, with contemporaneous notice by posting in the Ooki DAO’s Online Forum

As the Politico article linked above notes, there are a variety of other legal questions around this case, but get ready for a lot of similar questions cropping up. One thing I will note is that, while it’s great to see experimentation, people really need to recognize that just because you’re experimenting with new forms of organizations, it doesn’t mean you get to just ignore the law. That’s not how any of this works.

Filed Under: cftc, dao, daos, service
Companies: ooki dao

Cable Lobbyists Try To Scuttle State Inquiries Into Shitty Broadband Service, Slow Speeds

from the do-not-pass-go,-do-not-collect-$200 dept

Wed, Jun 21st 2017 03:12am - Karl Bode

Whether it’s rolling back already agreed upon merger conditions, killing net neutrality, or eliminating broadband privacy protections, giant ISP lobbyists are having a field day under the Trump administration, slowly but surely stripping away oversight of one of the least competitive — and most anti-competitive — sectors in American industry. We’ve noted repeatedly that as giant cable providers like Comcast nab an ever larger monopoly over next-gen broadband services, the end result of this myopic pursuit will be even higher rates — and even worse customer service — for everyone.

But there’s a problem in this quest to create a new, golden era of telecom sector monopoly dysfunction: individual states.

In the wake of the attack on the FCC privacy rules, more than a dozen states have rushed to enact new privacy protections for consumers, requiring that ISPs are very clear about what data they’re collecting and who they’re selling it to. And in the wake of federal apathy to consumer complaints about some of the worst customer service in any industry, individual states have also started pushing back, as evidenced by New York Attorney General Eric Schneiderman’s lawsuit against Charter Communications for advertising speeds company execs knew they couldn’t deliver.

Ironically, cable lobbyists (and the politicians, sock puppets, think tankers and policy wonks paid to love them) have quickly rushed to defend “states’ rights!” when it comes to giant ISPs’ ability to write protectionist state laws that hamper broadband competition. But now that several states are actually passing legislation that might help consumers, the broadband industry and current FCC have launched a concerted effort to keep states from meddling in their attempts to build utterly-unaccountable media, advertising, broadband and television conglomerates.

Case in point: the FCC is already making noise about their plans to somehow prevent states from passing consumer broadband privacy laws. And last week, cable industry lobbyists began petitioning the FCC in the hopes of making it much more difficult for states to investigate claims of substandard broadband service and speeds, allowing them to hide behind the “up to” marketing language most of us are familiar with:

“NCTA-The Internet & Television Association and USTelecom, lobby groups for the cable and telecom industries, last month petitioned the Federal Communications Commission for a declaratory ruling that would help ISPs defend themselves against state-level investigations. The FCC should declare that advertisements of speeds “up to” a certain level of megabits per second are consistent with federal law as long as ISPs meet their disclosure obligations under the net neutrality rules, the groups said. There should be a national standard enforced by the FCC instead of a state-by-state “patchwork of inconsistent requirements,” they argue.

While there are valid concerns that individual state requirements could make life more complicated for large ISPs, ignored by the NCTA is the fact that their efforts to gut meaningful federal oversight of telecom providers is the primary reason that’s happening in the first place. And a bipartisan filing by 34 state attorneys general (pdf) points out that this effort has nothing to do with wanting to avoid “inconsistent requirements,” and everything to do with wanting to dodge accountability for poor service on both the state and federal level:

“[I]t appears that the petition is really seeking to alter disclosure obligations under state law, including state consumer protection laws? prohibitions on false and misleading statements and material omissions in consumer-facing advertisements,” they wrote. “Such a ruling would plainly exceed the scope of the Commission?s authority granted by Congress, and would be improper.” There is also “no factual basis” to determine that ISPs’ speed disclosures meet the FCC’s “just and reasonable” standard, they argued. “The request is plainly seeking a factual finding, despite the complete lack of any factual record to support such a conclusion,” they wrote.”

It’s worth reiterating: when states have come under fire for letting ISP lobbyists directly write horrible protectionist legislation that hamstrings local community rights and hinders broadband competition, cable lobbyists are quick to rush to the defense of state rights. When those states actually try to hold these same broadband providers accountable for substandard service courtesy of a lack of competition, it’s suddenly all a bridge too far. Meanwhile, those that still believe that blindly deregulating the telecom market will somehow magically make Comcast behave, are in for a nasty surprise over the next decade.

Again, deregulation can help competitive markets thrive. But the telecom sector, as we’ve long illustrated, is neither competitive nor that simple. In fact, earlier efforts to blindly deregulate an uncompetitive, utterly-dysfunctional, taxpayer-subsidized broadband industry is the precise reason most of you are currently stuck on hold with Comcast in the first place. And the sooner we collectively realize that giving some of the least ethical companies in America carte blanche doesn’t magically result in connectivity Utopia, the sooner the quest for cheaper, better, and more broadly-available broadband will be fulfilled.

Filed Under: broadband, cable, customer service, fcc, investigations, service, state's rights, states
Companies: ncta

New York AG Sues Charter For Slow Broadband Speeds, Says Company 'Ripping Off' Users With Substandard Service

from the the-George-Carlin-definition-of-customer-service dept

Wed, Feb 1st 2017 12:33pm - Karl Bode

For some time now, New York Attorney General Eric T. Schneiderman has been taking broadband companies to task for advertising broadband speeds they consistently fail to deliver. Last year, Schneiderman’s office brought in Tim Wu, Columbia professor and the man who coined the term net neutrality, to help dig into the data. With Wu as the AG’s “senior lawyer and special adviser,” Schneiderman sent letters to NYC area broadband incumbents Verizon, Cablevision and Time Warner Cable — questioning whether they actually deliver the speeds they advertise.

This morning, Schneiderman made his findings clear via a lawsuit against Charter Communications, which accuses the cable giant of “defrauding” millions of customers by advertising broadband speeds it’s incapable of delivering. According to the AG’s compiled data and full complaint (pdf), Charter routinely and consistently advertised “fast, reliable connections” that were anything but:

“The suit alleges that subscribers? wired internet speeds for the premium plan (100, 200, and 300 Mbps) were up to 70 percent slower than promised; WiFi speeds were even slower, with some subscribers getting speeds that were more than 80 percent slower than what they had paid for. As alleged in the complaint, Spectrum-TWC charged New Yorkers as much as $109.99 per month for premium plans could not achieve speeds promised in their slower plans.

The complaint also alleges that Charter (now branded as Spectrum) and Time Warner Cable (recently acquired in Charter’s recent $79 billion megamerger) knew full well they were shortchanging customers and lagging in necessary upgrades, and they just didn’t give much of a damn:

“The AG?s investigation also found that Spectrum-TWC executives knew that the company?s hardware and network were incapable of achieving the speeds promised to subscribers, but nevertheless continued to make false representations about speed and reliability. The investigation further revealed that while Spectrum-TWC earned billions of dollars in profits from selling its high-margin Internet service to millions of New York subscribers, it repeatedly declined to make capital investments necessary to improve its network or provide subscribers with the necessary hardware.”

It’s worth noting that government data fairly consistently shows that ISPs usually deliver advertised speeds. Back in 2011, the FCC began recruiting volunteers who use custom-firmware embedded routers to provide real-world broadband connection performance data. Initially, the FCC found that many ISPs didn’t deliver advertised speeds. But as the agency increasingly named and shamed the worst offenders, many ISPs began over-provisioning their broadband tiers — effectively giving users more bandwidth than was advertised. The program was a relative success, but it’s not likely to be continued under the new, more industry cozy FCC.

That said, the volume of traffic generated by New York City residents requires a little extra effort; effort that tends to not materialize when companies face limited competition. In New York, Charter acquired Time Warner Cable, whose biggest competitor was Verizon — a company that has little to no interest in even being in the fixed-line broadband market, and has taken repeated heat from New York City officials for failing to uniformly upgrade the company’s fiber network (taking subsidies and tax breaks then failing to do much with them has been Verizon’s MO for a generation).

To be clear, Schneiderman drawing attention to Charter’s failure is generally a good thing. That said, failures to track how subsidies are spent, failures to hold ISPs accountable for failed promises, the relentless thirst for consolidation, and the negative repercussions of blindly approving telecom megamergers — are all ignored by most regulators (and Schneiderman) pretty much on a weekly basis. So when someone like this comes sweeping in late in the game to protect consumers, you should probably ask why they aren’t doing more, more consistently, to protect telecom customers before the bill arrives.

With the priority in the telecom sector being megamergers, buying protectionist state laws and extracting ever-more money for the same relatively dismal service, it’s not particularly surprising that the companies offer poor service at high prices, with some of the worst customer service in any industry in America. And with a Trump-era FCC preparing to let these companies dictate telecom policy for the forseeable future, and Wall Street gushing over the idea of a possible Verizon-Charter supermerger, you’d have to use some pretty creative mathematics to suggest this scenario gets better anytime soon, belated NY AG lawsuit or not.

Filed Under: advertised speeds, broadband, eric schneiderman, ny, service
Companies: charter

Thou Shall Not Browse: Comcast Refuses Service Call To Chicago Church Out Of Fear

from the holy-shit dept

Our Facebook, who art on the internet, mashup be thy name. My question’s one, will Comcast come, to our church as connectivity has ended? Give us this day, at least one technician, and forgive us our addresses, as we forgive those whose customer service sucks. And leave us not without our Netflix, but deliver us from downtime, amen.

This, I propose, might need to be adopted as a modernized propitiation by at least one church on Chicago’s South Side, and offered to the regulation-creating internet lord, Comcast. That’s because, as reported by a rather well-known preacher here in my beloved city, Comcast refused to send a service technician to work on a service issue because the neighborhood was way too scary.

On Wednesday, Father Michael Pfleger said that Comcast will not come out and fix the Internet connection at St. Sabina Church because of the neighborhood violence in Englewood. Classes in the St. Sabina computer lab were disrupted in the morning, not by violence outside, but by Internet problems that made doing anything online slow or impossible. The director called Comcast and set up a repair appointment for the afternoon only to have it canceled five minutes later.

“They told me due to the violence in the area, the increased violence in the area, that they were not dispatching any technicians into the area,” said Phil Hunter, who’s the Director of the St. Sabina Community Employment Center.

Now, Father Pfleger is a notorious figure here in Chicago, and nationally, for being quite vocal on racial issues, to the point that he can occasionally come off as being ridiculous. Case in point was his insistence that Hillary Clinton freaked out about Barack Obama running against her because she thought she shouldn’t have to compete with a black person (whatever you think about Clinton, Pfleger doesn’t have mind-reading powers such as this). But we can leave his reputation aside for the moment, because Comcast didn’t deny the accusation. Instead, Comcast insisted that it was cancelling all kinds of appointments in the area due to safety issues. Think about that: Comcast is happy to collect money from internet service customers, but not service them. In a city, mind you, that is carved up by ISPs for exclusive areas to such a degree that it’s almost funny.

So, how frightened of the violence was Comcast? Well, this ought to give you some idea.

So, either Chicago’s violence problem was suddenly solved in a matter of hours, or Comcast cares more about PR than it does the safety of its technicians, which it had invoked only hours previous as to why it wouldn’t come. It’s frankly difficult to think of a worse tack Comcast could have chosen to follow: refuse service calls due to safety, get smacked with backlash, ignore safety concerns and do the service call. As Father Pfleger rightly points out, not everyone in the neighborhood is a preacher with a platform.

But that’s Comcast for you. They’re only answering your prayers for internet service that you’re paying for if you’ve got those media indulgences, I guess…

Filed Under: broadband, chicago, repairs, service, violence
Companies: comcast

from the frozen dept

In the continuing global legal fight over Megaupload, the company apparently is asking the Hong Kong high court to set aside the restraining order on the company’s assets that was put in place over two years ago, following a request from the US Justice Department. Megaupload was always legally based in Hong Kong, even if the company itself was based in New Zealand. Megaupload appears to be claiming that the Hong Kong Justice Department did not properly follow the law in going along with the US DOJ’s request. The main issue, which has been debated back in the US, is that, technically, the DOJ cannot serve Megaupload (the company) since it has no US employees or presence. The DOJ can go after foreign individuals, but when it comes to foreign companies, the law is pretty explicit that they can’t. While the DOJ is actively seeking to change that law, it doesn’t change the basic problem with the original request.

Megaupload is pointing out that the US DOJ’s request to the HK DOJ depended on Megaupload being served the criminal summons. But since that hasn’t been satisfied, it argues the HK DOJ has no basis for restraining Megaupload’s assets:

The order was granted on the basis of an ex parte application by the HK DOJ made at the request of the US DOJ. The grounds for discharge of the order is the failure by the HK DOJ—acting on the basis of information provided by the US DOJ—to fully and frankly disclose in that ex parte application serious legal issues relating to the US DOJ’s inability to serve Megaupload with a criminal summons in accordance with United States federal law. Among other things, the US DOJ failed to explain how it intended to comply with the service of process requirements imposed by the Federal Rules of Criminal Procedure, which, as argued in Megaupload’s application, are an essential prerequisite to initiating any criminal proceedings against Megaupload and cannot be satisfied for a corporation that has no physical presence or subsidiaries in the United States. Megaupload has submitted those filings with its application to the High Court.

Megaupload claims it’s seeking to free the assets in order to attempt to regain control over the leased servers from Carpathia, which the DOJ has been hoping would be destroyed (leading to the destruction of evidence in a criminal case, at the DOJ’s urging). While the issue of serving Megaupload is something of a technical snafu, it’s one in a rather long line of sloppy lawyering by the DOJ throughout this case.

Filed Under: criminal charges, doj, frozen assets, hkdoj, hong kong, service
Companies: megaupload

John Steele Keeps Playing Games With Judge Wright

from the probably-not-a-good-idea dept

When your credibility is already in serious question in a courtroom situation, in part because of a long series of games you played with the court, where the court has made it clear that it believes those games were intended to fraudulently deceive the court, anyone with a few brain cells would recognize that it’s probably best not to continue playing games with that court. But, then there’s John Steele. Steele appears to be unable to resist trying to play more games with Judge Wright’s court. The latest is that, back on Tuesday July 2nd, Judge Wright had scheduled a hearing for Friday July 12th in the Prenda case. John Steele has continued to pretend that he is unaware of filings in the case — a somewhat unbelievable stance and which, if true, would only suggest that Steele himself failed to abide by court rules that require him to provide an updated email address, which would be an acceptable means of service. The rules are pretty clear:

However, Steele filed a motion on July 8th, claiming that he had only just heard about the hearing on July 12th, saying it was delivered by mail, and claiming that it would be impossible for him to attend the hearing in person.

On July 2, 2013, the Court issued a notice (ECF No. 200) scheduling a hearing for July 12, 2013, on the undersigned’s motion for reconsideration. The undersigned resides in Florida and just received notice on July 8, 2013 via U.S. Mail. The undersigned has a previously scheduled family matter that prohibits his in-person attendance at the July 12, 2013 hearing. Further, nine days’ notice–over the Fourth of July holiday weekend, in particular–is a prohibitively narrow window of time for to receive notice of a hearing via U.S. Mail, and schedule travel arrangements to appear cross-country. Finally, attending a hearing in California is an extremely expensive proposition as it requires plane fare, a hotel room and other incidental expenses.

Of course, as noted above, the court’s rules have already made it clear that electronic notification is sufficient here, and Steele therefore should have received notice on the 2nd, not the 8th, and if he did not, it would be his own fault for not having the correct information in the system (and, honestly, does anyone actually believe that Steele is not paying attention to the details of this case, when he’s been shown to pay very close attention in the past?).

Separately, the “oh it’s so expensive” excuse is somewhat amusing, considering this is the same Steele who has claimed to have made millions from copyright trolling, and bragged to his critics about how he’s about to go buy an expensive luxury sports car (with list prices around $100,000) with all the money he’s making. That was just a few months ago. Seems fairly incredible to plead poverty months later…

It shouldn’t be that surprising, then, to see that Judge Wright denied Steele’s request very quickly, while also noting that Steele appears to have lied in his motion. In the original motion, Steele claimed that a Court clerk told him that he “would have to file a motion if he wished to participate in the hearing telephonically.” However, in the denial of the request, Wright notes: “Mr. Steele was advised by telephone on July 8, 2013 by the clerk, that his request for a telephonic appearance regarding his motion set July 12th is denied, and did NOT advise him to file such motion as stated in his motion.”

So after already being told such a request was denied, Steele files the motion claiming that the clerk told him to file a motion, which the clerk did not. Did Steele not think that the clerk would talk to Judge Wright? So, what are the odds that Steele actually shows up on Friday?

Filed Under: ecf, john steele, otis wright, pacer, service
Companies: prenda, prenda law

Bad Lawyer Tricks, By John Steele

from the not-a-good-idea dept

Last week, we wrote about a bunch of the members of Team Prenda submitting separate filings with Judge Otis Wright, who has been the most vocal in calling them out for their questionable legal shenanigans, trying (once again) to go on the offense and accuse their accusers. John Steele, Paul Hansmeier, Peter Hansmeier and Mark Lutz all filed motions claiming that the lawyers representing the John Doe defendant in the case, Morgan Pietz and Nick Ranallo, had failed to serve each of them with updated filings concerning the case. Incredibly, they tried to suggest that it was Pietz and Ranallo who were acting fraudulently and should be sanctioned. It’s the classic John Steele move of “I know you are, but what am I” any time anyone calls him on his activities.

Pietz and Ranallo, having now been ridiculously accused of fraudulent activity, have hired another lawyer, Lawrence Heller, to represent them on this silly tangent, and Heller submitted quite a response, focused on John Steele’s motion. The filings from the other three are dismissed in a footnote:

Mark Lutz, Paul Hansmeier and Peter Hansmeier have filed what they call “Notices to the Court,” which are unsworn pleadings which attempt to evidence that they have not received certain pleadings since going pro se. Among numerous other defects, these “Notices” are neither verified, nor sworn under penalty of perjury and, to the extent they have any evidentiary value at all, should be struck or at least wholly ignored.

But the arguments against Steele’s filing are much more serious. As you may recall, this was actually Steele’s second attempt at making this argument, with the first one getting rejected by Judge Wright in less than an hour. The claims that Steele and the others were somehow taken by surprise by the filings in this case and were unaware of them are hard to support, and Heller makes that point excessively clear. First, Heller points out that Steele’s claim that Pietz and Ranallo had submitted “scores of papers” without serving him, and that those papers were “requests for relief” was entirely bogus. Steele was represented by counsel for quite some time, and after he went pro se (representing himself) Pietz and Ranallo had only filed two documents, both merely opposing specific motions from Team Prenda.

Furthermore, Heller points out that the only one actually violating the court’s rules are the members of Team Prenda who failed to properly notify a change in contact information, leading to the lack of direct service. Most seriously, Heller says that the email “evidence” that Steele submitted with his filing, which he claims is “proof” that Pietz knew he wasn’t serving Steele, has been doctored. And, finally, Heller points out that this all just seems par for the course for Team Prenda in playing word games rather than facing up to the fact that they’re in deep trouble:

Although already sanctioned by this court, it is clear that neither Steele nor his contingent have learned their lesson. As frivolous as Steele’s motion is, Pietz and Ranallo were compelled to retain outside counsel to defend it. Pietz and Ranallo should be compensated for having to respond to this baseless motion through the court’s issuance, on its own initiatve, of an OSC re: Sanctions or, alternatively, through the court’s setting of a hearing date for Pietz and Ranallo to have their Rule 11 sanctions motion heard…

It must be said: finally, enough is enough!

As for Steele’s “evidence,” Heller points out, as is clear from the email itself, that rather than an admission of a failure on the part of Pietz, Pietz’s email is actually an attempt to stop Steele from avoiding service, by noting that Pietz is happy to send Steele copies of the filing, by whatever means are most appropriate — and that this wouldn’t have been an issue if Steele had properly kept everyone informed of his correct contact information, as is clearly required by the court. Separately, they point out that plenty of evidence, including some submitted by Steele himself has clearly established what his email address is, which is also where Pietz sent copies of the filings that Steele claims were never given to him.

Moreover, Steele himself has submitted evidence to this Court definitively establishing that he maintains at least the email address: johnlsteele@gmail.com. Specifically, in his “Amended” Motion For Reconsideration (ECF No. 205, pp. 6-7), Steele for, the first time attaches as Exhibit 1 the email which be omitted from the original Motion for Reconsideration (ECF No. 201), and which he swears, under penalty of perjury, that he received at the said email address. Steele’s submission of the June 23rd email confirms that he does in fact have an email account he has used recently, and that he is therefore in violation of L.R. 41-6 and L.R. 83-2.4, for failing to provide that email address to the Court and to all parties. Similarly, Steele’s Illinois ARDC page lists a phone number; so he has one of those too, which he has also neglected to provide to the Court or the parties. There can be little doubt that he also has a fax number he failed to disclose. In View of Steele’s violations of the local rule designed to facilitate service of process, the instant motion is clearly brought in bad faith.

And then we get to the funny stuff. The email “evidence” that Steele submitted to the court was an email that Pietz sent, but when he sent it, it bounced back, saying that there was no such email address. That leads to one of two possibilities, neither of which look good for Steele:

In view of Mr. Steele’s sworn assertion that he actually did receive the June 23rd email from Pietz, it is thus surprising that the email in question, which was sent to immediately bounced back to sender from that address. (See Pietz Dec’l., Exhibit 1). In light of the bounce-back, there are only two possibilities: either Steele has somehow configured his Gmail account to automatically respond with false “Delivery to the following recipient failed permanently” messages to all emails he receives, even though he actually does receive the messages; or (ii) as seems more probable, Steele did not receive the June 23rd email directly, but rather it was forwarded to him by one of his cronies who was also included on Pietz’s email chain. A close look at the top of Steele’s Exhibit A shows partial text remnants. Moreover, the email is of an abnormally small size. Both of these facts strongly suggest that a header has been cutoff at the top of the email to conceal how it was received. It seems apparent that Steele has purposefully omitted an email header, which would presumably show one of his co-conspirators forwarding the June 23rd message from Pietz to whatever new email address Steele is using nowadays.

Since Steele’s motion, as well as his sworn affidavit, tacitly rely upon the premise that he has not been in close contact with Paul Hansmeier, Paul Duffy, and counsel for Prenda Law, Inc., about the bond issue since going pro se, one can certainly understand why he may have been tempted to cut out the header showing him communicating with these people. In other words, in what would seem to be a truly staggering–and foolish–bit of chutzpah, Steele appears to have once again tried to slip a doctored document past this Court in the hopes of getting his way.

Further, given that the johnlsteele@gmail.com email address was used by “someone” to register certain Internet domain names to “Alan Cooper” at a Phoenix residence where Steele’s sister lived with Anthony Saltmarsh, there can be little question as to why Steele might have been tempted to discontinue using that account. Using that email address potentially links Steele to criminal identity theft activity. However, thanks to his recent filing. Mr. Steele has now sworn under penalty of perjury, that he has recently received email sent to johnlsteele@gmail.com even though that may be perjury.

You get the feeling that John Steele is stupendously bad at chess, while simultaneously believing that he could beat Kasparov and Deep Blue in concurrent matches. The more he talks, each time believing he’s found the magic “out,” the deeper he seems to dig his own hole. This is a different kind of digging than, say, a Charles Carreon, who would just keep fighting. Steele acts as if he really thinks that he has the whole system beat, when the reality is each time he tries to “beat” the system, he’s just piling up another potential problem for himself.

For example, there’s also more evidence that Steele is making claims to the court that are not just bogus, but where Steele’s own actions show that they are bogus:

However, through what may have been an inadvertent slip-up, there is compelling evidence that Steele was actually aware, or should have been aware of ECF No. 175 (Pietz’s opposition to Duffy’s motion to approve the initial bond) since at least June 14, 2013. On May 23, 2013, Paul Duffy filed his motion to have the bond he posted on behalf of all Prenda parties other than Gibbs approved by this Court (ECF No. 171). On June 3, 2013, Pietz filed a response asking that the bond be conditionally approved, subject to certain conditions, and subject to the posting ofan additional bond (ECF No. 175). It is this document, ECF No. 175, from early June, which Steele would later say he was denied an opportunity to respond to. On June 6, 2013, the Court entered the proposed order submitted with the response, conditionally approving the bond, as requested by Pietz (ECF No. 176). On June I 1, 2013, Prenda Law, Inc. through associate Philip Vineyard of the Kleindinst Firm, announced by email to all parties (including to johnlsteele@gmail.com) that they would be appealing the Court’s order on the bond (i.e., appealing ECF No. 176) and filing an emergency motion seeking relief from the Ninth Circuit on that issue. (Pietz Dec’l., Exhibit B.)

By itself, the email from Philip Vineyard to Steele et al. Would have been sufficient to put Steele on notice of the fact that proceedings were underway in the District Court on the bond issue. See id. at pp. 1-2. The fact that Prenda was appealing the issue would also have put Steele on notice that the bond proceedings had not gone as his similarly situated counterparts may have hoped. However, that is not all that happens on the email thread.

On June 14, 2013, at 9:54 AM, Mr. Vineyard circulated to all parties what he styled a “pre-executed version of Prenda Law’s emergency motion to the Ninth Circuit” on the bond issue. Id. at. p. 11

About a half hour later, at 10:20 AM, John Steele wrote back to Mr. Vineyard, copying Pietz, saying,

> “Philip, > Great motion. On page 5, I want to take issue with the bottom of the page, right before footnote 23. No one that I am aware of (on our side) stated that Prenda or anyone else had a policy of demanding a settlement amount just low enough to avoid legal action. This is something the bad guys always claim.” Id. at 14.

Vineyard then wrote back a few minutes later saying “Thanks, John. I shall amend the motion to reflect this.” Both the “pre-execution” version Vineyard circulated, which Steele apparently reviewed and provided guidance on, as well as the final version ultimately filed with the Ninth Circuit, extensively discuss Pietz’s opposition to Duffy’s motion to the approve the bond (ECF No. 175). Clearly, Steele reviewed Vineyards motion on June 14, 2013, and Vineyard’s motion discusses at length the opposition (i.e., ECF No. 175) to which Steele states he was denied an opportunity to respond because he was unaware of it. There can be no question that Steele had every opportunity to respond to Pietz’s opposition, despite his false claims, which form the basis of his motion, to the contrary.

Further, Steele has known that there would be a dispute about the amount and conditions of the bond since at least May 20, 2013. See ECF No. 175-2, pp. 1-5 (meet and confer email from Pietz to Prenda parties, including to johnlsteele@gmail.com, which was ignored by all of them, except for some nonsensical ramblings from Mr. Duffy).

In view of all this evidence, it seems that Steele was just about as “shocked” about the bond issue before this Court as Captain Renault was to find that gambling was going on at Rick’s Cafe Americain.

Here’s a basic tip: if you’re going to claim to a court that you have no idea certain documents are being filed, probably don’t (a) use the same email address that the very same documents were mailed to and (b) don’t send the counsel you’re accusing of not informing you of documents filed in the very case in question — that you insist you’re not paying attention to — email evidence that you’re not only very much paying attention, but actively involved in the drafting, review and approval of filings in the case.

In a footnote, the filing also notes that this is more evidence that Steele has a leading role in Team Prenda’s legal strategy, despite his claims to have absolutely nothing to do with any of it:

This obviously begs the question of why counsel for Prenda Law, Inc., whose “sole principal” is supposedly Paul Duffy is taking their marching orders from Steele, a party with which Prenda likely has a conflict (particularly in view of Hansmeier’s deposition testimony that obtaining the Alan Cooper signatures was all Steele’s doing).

This case just gets more and more and more entertaining.

Filed Under: john steele, morgan pietz, nicholas ranallo, notifications, otis wright, service
Companies: af holdings, prenda, prenda law

Megaupload Points Out That The DOJ Has Contradicted Itself Concerning Legality Of Serving Megaupload

from the oops dept

Earlier this month, we pointed out that the Justice Department had asked the federal courts to amend the federal rules concerning issuing a summons on a corporation. As the filing made clear, they were concerned about being able to serve criminal complaints on foreign companies with no US presence, since the law clearly says that you need to send a summons to “the organization’s last known address within the district or to its principal place of business elsewhere in the United States.” If they can’t do that, they don’t meet the qualifications of the summons.

We thought it was noteworthy that the DOJ was looking to change that rule and wrote about it. It appears that the lawyers for Megaupload have noticed this same point… and quickly realized that this filing pretty clearly contradicted the DOJ’s own statements in the Megaupload case, where they insisted that the existing rules did not get in the way of serving Megaupload. Megaupload is using that to renew its request to have the indictment dismissed.

Back in January, it seems, the DOJ told the court that there was no issue at all with the fact that Megaupload had no US address. As Megaupload summarizes in its filing:

Among other things, the Government argued that, even if the individuals are never extradited to the United States, the Government can simply ignore Rule 4’s requirement that the summons be mailed to Megaupload’s “last known address within the district or to its principal place of business elsewhere in the United States” and instead mail it to an alternate destination. (See Dkt. 159 at 3-4 (suggesting that the Government could mail the summons to the Commonwealth of Virginia’s State Corporation Commission; or to the warehouse of third party vendor Carpathia Hosting; or to other third parties).) Previously, the Government had even suggested that Rule 4’s mailing requirement is merely hortatory, and that “[s]ervice of process in the corporate context . . . is complete upon delivering the summons to an officer or agent” of the corporation. (Dkt. 117 at 9-10.)

But that’s clearly contradicted by the DOJ’s own statement to the courts in the request for the rules change — which were filed before the DOJ’s request to the courts.

The Government’s letter is directly relevant to the Court’s consideration of Megaupload’s pending motion to dismiss without prejudice, as it contradicts the Government’s repeated contention that it can validly serve Megaupload—a wholly foreign entity that has never had an office in the United States—without regard for Rule 4’s mailing requirement. To the contrary, the Government explicitly acknowledges in the letter that it has a “duty” under the current Rule to mail a copy of the summons to a corporate defendant’s last known address within the district or to its principal place of business elsewhere in the United States. (See Exhibit 1 at 2.) Moreover, by seeking to have the mailing requirement eliminated, the Government implicitly admits it cannot validly serve Megaupload consistent with Rule 4 as currently written. Finally, contrary to the Government’s contentions before this Court that Rule 4’s existing provisions are mere accidents of drafting, the Government is acknowledging to the Advisory Committee that they are in fact well considered products of “the environment that influenced the original drafters of the Federal Rules of Criminal Procedure,” albeit an environment that the Government believes “no longer exists,” given what it calls the “new reality” of “federal criminal practice.” (Id. at 2- 3.) To the extent that the Government would urge this Court to work the same substantive modification of Rule 4 that it is urging upon the Advisory Committee, this Court should be forthrightly advised in the premises as to the nature of the Government’s request and the reasoning behind it.

The Government’s letter to the Advisory Committee thus confirms what Megaupload has argued all along—that the Government indicted Megaupload, branded it a criminal, froze every penny of its assets, took its servers offline, and inflicted a corporate death penalty, notwithstanding the fact that the Government had no prospect of serving the company in accordance with current law, yet to be amended. Megaupload should not be made to bear the burdens of criminal limbo while the Government seeks to rewrite the Federal Rules to suit its purposes.

Those darn pesky rules.

Filed Under: doj, kim dotcom, service
Companies: megaupload

from the and-you-thought-you-were-awkward-in-public-already dept

Well, this should be fun. A bill (a very short one) has been introduced into the Texas state legislature that would grant various entities the right to serve people legal papers via their social media accounts. This is more of an add on than an actual bill, giving process servers, etc. the choice (should a judge allow it) to bring you the glad tidings of a legal summons, divorce proceedings, paycheck garnishment and the like through various social media services.

Here’s the pertinent legal wording in all its brief glory.

Sec.A17.031. SUBSTITUTED SERVICE THROUGH SOCIAL MEDIA WEBSITE. (a) If substituted service of citation is authorized under the Texas Rules of Civil Procedure, the court may prescribe as a method of service under those rules an electronic communication sent to the defendant through a social media website if the court finds that:

(1) the defendant maintains a social media page on that website;

(2) the profile on the social media page is the profile of the defendant;

(3) the defendant regularly accesses the social media page account; and

(4) the defendant could reasonably be expected to receive actual notice if the electronic communication were sent to the defendant’s account.

Now, I can understand the frustration of those in the paper-serving business. If someone truly doesn’t want bad news delivered to them, they can simply not answer the phone, pick up the mail and otherwise make themselves unavailable. Most people, however, can’t seem to stay away from Facebook and other social media networks for very long, though, making this avenue extra tempting. In fact, a judge in Australia made an exception to allow a lawyer to serve notice of foreclosure via Facebook back in 2008, after the foreclosees failed to show up in court.

The problem with this sort of activity is that it becomes a very public act. There are a variety of ways to contact people discreetly via social media, but those methods can be just as easily ignored as anything IRL.

For instance, my Facebook account receives quite a few messages from people I don’t know or follow. I check this inbox roughly once every NEVER. If someone were to send me a notice I needed to respond to within X amount of time or face the dire consequences (I don’t know — hacked to death by cleaver-wielding members of the Sheriff’s department?), I would blissfully slip right past the deadline and be cleaved to death once the time had expired. In order to actually be noticed, those serving legal notices might need to “befriend” those they’re serving, something that seems unlikely. (You have a friend request from Lower Brule County Sheriff’s Department. Accept?)

The easier option would be to just splatter the news all over your personal page, which is viewable by (at the minimum) your Friends list. If you’re like everybody, you’d probably rather not have everyone you’ve Facebook-friended know that you’re seriously delinquent on your child support payments or that your car has just been repossessed.

Likewise with Twitter. If both parties don’t follow each other, they can’t utilize direct messages, the behind-the-scenes Twitter option. This basically means that those serving papers will be left to publicly @you, something that’s viewable by everyone on Twitter.

Now, those pushing for this can argue that the very process of serving papers is rarely private. After all, your neighbors can see the sheriff’s car in your driveway. If you’ve been particularly troublesome to get ahold of, a person may find someone hurling papers in their general direction at their workplace, in the airport, while walking down the street, at their kid’s ballgame… pretty much anywhere.

Having someone Tweet “YOU’VE BEEN SERVED” with a link to a PDF isn’t that much different than having papers shoved into your hands at a crowded mall. The main difference (which may be key) is that the document will be immediate, public knowledge, unlike a fistful of paper shoved into your reluctant hands.

Now, if this bill does become law (and that’s a very big IF), one would hope that these judges would be extremely reluctant to grant servers the right to hurl papers all over the internet. The potential for abuse is enormous, especially considering the IRL option is much more strenuous than firing off tweets and Facebook posts from the comfort of an air-conditioned office. Sure, I’d love to see more deadbeat dads get served for non-payment of child support and other miscreants receive their legal comeuppance, but I’d much rather see this process handled with a bit more propriety than these public venues would allow.

Filed Under: legal service, service, social networks, texas

from the not-over-yet dept

The Charles Carreon saga continues, though it seems to be drawing to a close, with just some monetary issues to clear up. When we last left Carreon, he’d just been served by lawyer Cathy Gellis, who tracked him down in court, after he went through all manners of evasion to avoid being served… while still trying to get the blogger who was mocking him fired. If you don’t recall, this case began soon after the whole legal dispute with Matthew Inman of the online comic The Oatmeal — when Carreon also threatened a parodist blogger who was mocking Carreon. Carreon’s threats were pretty direct, and promised to wait until all the attention had died down and to then sue. In response, the blogger filed for declaratory judgment that said he had not broken the law. While Carreon had dropped his lawsuit against Inman, he couldn’t get out of this one, even as he tried his damnest to avoid being served.

After finally getting served, Carreon offered to “settle” the case, admitting that the blogger hadn’t done anything wrong — basically giving the blogger everything he wanted:

The court shall enter a declaration declaring that:

1. Plaintiff’s domain name “charles-carreon.com,” plaintiff’s use of the domain name, and plaintiff’s current manner of using his web site, do not violate defendant’s rights;

2. Plaintiff’s use of the domain name “charles-carreon.com,” in its current manner of use, is fair use and protected under the First Amendment, and does not infringe on defendant’s mark;

3. Defendant is not entitled to an injunction against plaintiff using the domain name “charles-carreon.com” or operating the Web site located at the URL “www.charles-carreon.com;” and

4. Plaintiff shall take a total money judgment inclusive of costs in the amount of $725, being the sum of the filing fee and service costs claimed.

The blogger in question then accepted the offer — but there remained one final point of dispute. That 725fee.Thelawyersrepresentingtheblogger,GellisandPaulLevy,havepointedoutthatCarreon’sownactionsinavoidingserviceactuallyresultedinsignificantlymorecoststhattheybore,andthey’dnowlikeCarreontopayuptothetuneof725 fee. The lawyers representing the blogger, Gellis and Paul Levy, have pointed out that Carreon’s own actions in avoiding service actually resulted in significantly more costs that they bore, and they’d now like Carreon to pay up to the tune of 725fee.Thelawyersrepresentingtheblogger,GellisandPaulLevy,havepointedoutthatCarreon’sownactionsinavoidingserviceactuallyresultedinsignificantlymorecoststhattheybore,andthey’dnowlikeCarreontopayuptothetuneof4,664.45. Basically, Carreon’s own mess resulted in higher costs, and he’s now trying to dodge this, just like he dodged service of the lawsuit.

He argues, basically, that since he made this settlement offer and the blogger has accepted the basic terms, everything is done, no more questions can be asked. In other words, in his mind “case closed, nothing to see, move on.” Except that misrepresents the reality of the situation. As Levy and Gellis explain in their response, noting that the fees covered in the agreed settlement only covers Rule 4(d)(2)(A) fees (fees associated with service) and not Rule 4(d)(2)(B) fees (attorneys’ fees). They point out that even the case that Carreon cites to make his case involved a settlement that explicitly called out attorneys’ fees, wherease Carreon’s own settlement offer only discussed costs, not attorneys fees, and the two are clearly treated separately and differently under Rule 4.

In Carreon’s motion to avoid having to pay, he also pulls the “but I’m really, really sorry” card, combined with the “and people were so mean to me!” card. Levy and Gellis rip this to shreds:

Defendant’s opposition is accompanied by an affidavit in which he apologizes to the Court for imposing the need for proceedings connected with service by refusing to waive service. At the same time apologetic and defiant (such as where he declines to concede that plaintiff actually and properly sought waiver of service), Mr. Carreon suggests that he has suffered enough, that he has been vilified on the Internet and subjected to “a brutal onslaught,” and that the pursuit of this litigation reflect “exaggerated dedication.” This affidavit does not provide any valid basis for denying plaintiff’s claim for attorney fees.

It may well be that, in retrospect, defendant Carreon regrets his conduct; certainly the private email he cites in his affidavit was beyond the pale. Still, it is understandable that his own conduct provoked some public criticism. First, he sent a demand letter to Matthew Inman on behalf of a client claiming defamation, even though the client had no valid grounds to complain. Then, when Inman made fun of Mr. Carreon by starting a fund-raising campaign to raise the demanded amount as a donation to charity—and after that fundraising effort went viral—Mr. Carreon brought a frivolous lawsuit against Inman, against the ISP that hosted the fund-raising campaign, and against the American Cancer Society and National Wildlife Federation, the charities to whom Inman had promised to send the public’s donations. This is the conduct that prompted the outpouring of negative commentary to which defendant’s affidavit vaguely refer. And when plaintiff Recouvreur started an anonymous, satirical web site to comment about the controversy, Mr. Carreon threatened to sue both plaintiff and the company through which plaintiff had registered his domain name.

Although Public Citizen agreed to take this case because the litigation that Mr. Carreon was threatening related to several legal issues in which Public Citizen is interested, it hoped to avoid the need for litigation. Having supported Mr. Carreon’s position in a recent case with an amicus brief, it hoped to avoid the need to litigate by reasoning with Mr. Carreon privately. Before any papers were filed, Mr. Levy telephoned Mr. Carreon to discuss the legal issues, calling his attention to the legal reasons why Mr. Carreon’s claims could not possibly succeed, and then followed up the phone call with an enumeration of cases. It was in response to this effort to avoid litigation that Mr. Carreon responded with the strong threat to litigate, to string out litigation, to seek high levels of monetary relief, to delay filing suit for years, in the hope that Public Citizen would no longer be interested in representing Mr. Recouvreur by then, and to file in a jurisdiction that had not yet adopted the legal principles followed in the Ninth Circuit. In light of the fact that Mr. Carreon had already filed his frivolous suit against Inman, which was still pending (it was dismissed shortly after this action was filed, but not before forcing those defendants to incur substantial attorney fees), plaintiff and his counsel took Mr. Carreon’s threats seriously, and accordingly filed this action for a declaratory judgment of non-infringement. Mr. Carreon’s evasion of service, and his refusal to pay the expenses of service until this motion was filed, were simply a continuation of the pattern of abusing judicial process that created the need for this litigation in the first place.

As an officer of the Court, Mr. Carreon should have known better when he began his course of abusive conduct. Although Mr. Carreon now expresses regret that he chose not to execute a waiver of service, nor to “expose [him]self to service,” nor to pay the service expenses when requested, and that this pattern of conduct subjected the Court to motion proceedings in connection with plaintiff’s service efforts, such apologies do not excuse the extra work that his conduct needlessly imposed on plaintiff and his counsel. Plaintiff’s counsel tried to avoid the need to effect service, not only mailing waiver of service forms but also expressly informing Mr. Carreon, by email, that a waiver of service form was coming in the mail…. Counsel also tried to avoid the need to file this motion, by calling Mr. Carreon to meet and confer and discussing with Mr. Carreon the law that requires payment of service expenses. Mr. Carreon refused, first making spurious arguments,… and then resorting to bluster, this time threatening to sue plaintiff’s counsel for not acquiescing in his demands.

There’s also an amusing bit in which Carreon argues that the method that Levy used to declare a reasonable hourly rate for his fees was rejected by a court. Levy, in response, points out that this is true… but that the ruling in question rejected the rates for being too low, and then points out that the rates requested are, bizarrely, “well-supported by Mr. Carreon’s own authority.” Charles Carreon making the mistake of opening his own mouth too much strikes yet again, even at this stage of the game. Also, amusing, Levy points out that some of the reason why he’s claiming 6.7 hours of his time is because (again) Carreon himself “made clear his intention to litigate each and every possible issue; hence the motion anticipated many possible arguments, including issues to which Mr. Carreon had alluded in explaining why he was not willing to stipulate to any award of expense for service.”

In other words: the Carreon Effect is still going on. Even in almost completely capitulating to the key aspects of the case, Carreon can’t help but dig his own hole deeper.

Filed Under: attorney's fees, carreon effect, charles carreon, service