timothy black – Techdirt (original) (raw)

from the pay-attention-now dept

With all the talk about Prenda and its copyright trolling practices, it’s long been clear that the real king of copyright trolling in the US is Malibu Media — better known as xArt — and its legal team led by Keith Lipscomb (and we’ll leave aside the fact that behind the scenes, it appears to be using the same German “international men of mystery” that other copyright trolls, like Voltage Pictures have been using). Either way, Lipscomb’s shakedown campaign accounts for an astounding percentage of copyright lawsuits filed in the US these days. And, given some of the stories that have come out in these lawsuits, it’s kind of astounding that the company has not received the “Prenda treatment” from any federal judges.

That may be about to change. Federal district court judge Timothy Black appears to have had enough of Malibu Media and its copyright trolling practices. In two separate cases this week, Judge Black issued “orders to show cause” (more or less judicial language for “I think you’ve done something really bad and here’s your last chance to show me otherwise) that go beyond the usual level of “Hey, it appears you’ve been acting naughty” to a full blown recitation of all of Malibu Media’s questionable practices.

Both orders (first one and here’s the second) ostensibly focus on a common problem with Malibu Media’s lawsuits: the failure to actually serve the defendants (when your main focus is just on getting identifying info to shake down people with threats that get them to settle, actually following official procedure required for an actual lawsuit falls by the wayside). And Malibu Media/Lipscomb/flunkies are notorious at screwing this up. In this case, Judge Black had already issued multiple orders to show cause over the issue. You can read about all the missed deadlines in the full filing, but Judge Black sees the problems here.

The much delayed filing of the summons return simultaneously forced the Court to unnecessarily expend judicial resources in the issuance of an Order to Show Cause and hindered the ability of the Court to manage its docket. With respect to the filing of an answer or other matters dependent on the date of service of process, the Court?s ability to actively manage its docket is entirely dependent on counsel filing a summons return within a reasonable amount of time.

But that’s just the preamble. From there, Judge Black makes it clear he’s well read up on all of Malibu Media’s infamous shenanigans in gaming the judicial system for profit.

The Court does not view Malibu Media?s conduct in this action in isolation. Rather, the Court views it as part of an unmistakable pattern that has emerged in other actions before this Court and in context of observations made by multiple other federal judges in cases involving Malibu Media.

This Court has observed the conduct of Malibu Media and its counsel of record in over 60 cases filed in this District in the past twelve months. This is not the first case in which Malibu Media has filed a summons return well after the date of service. Counsel appears to have made a misrepresentation in seeking an extension of time to complete service in two cases. The Court also issued an order to show cause after counsel publicly filed a defendant?s name in direct violation of two orders unambiguously ordering counsel to file that information under seal.

We wrote about that public filing a few months ago. But that’s not all that the judge has been watching. He’s also well aware of the notorious “Exhibit C,” where Malibu Media would file an “exhibit” of other movies that it believed the defendant may also have downloaded illegally — even though it was not the copyright holder on those films. The titles were often very embarrassing, suggesting that the entire purpose of Exhibit C was to embarrass someone into settling so the list would not be associated with their name in court documents.

Judge Black also calls out the “swarm joinder” issue that was popular in early lawsuits — whereby copyright trolls like Malibu (and others) tried to lump hundreds or thousands of individuals together in a single lawsuit, arguing it was proper to “join” them all since they participated in the same infringement. As Black notes, that misuse of the court system really only set the stage for a bunch of other questionable practices. It seems clear that Judge Black is well aware of the game being played, and even refers to it as copyright trolling:

Malibu Media asserts that it is necessary to invoke the Court?s subpoena power to ?propound discovery in advance of a Rule 26(f) conference.? …. However, not a single one of these 60 cases has ever progressed to a Rule 26(f) conference. In fact, most cases are voluntarily dismissed by Malibu Media pursuant to Rule 41(a)(1)(A)(i) without obtaining a summons, but presumably after Malibu Media has used the third-party subpoena to obtain a settlement. The name of the IP subscriber is never provided to the Court in these voluntarily dismissed cases. This makes it impossible for this Court or any other court to determine, for example, if a later action should be dismissed with prejudice under Rule 41(a)(1)(B). In the few cases in which a defendant has appeared with counsel, counsel have raised numerous allegations of impropriety and abusive litigation tactics. The Court is not blind to the reality that these allegations likely substantially underrepresent the amount of misconduct that goes unreported by defendants who simply pay Malibu Media?s settlement demand rather than face the prospect of expensive and extensive litigation regarding their purported interest in pornography.

The Court is aware that Malibu Media, through separate local counsel, has filed thousands of similar cases in federal courts across the country. A copyright troll has been defined as ?an owner of a valid copyright who brings an infringement action not to be made whole, but rather as a primary or supplemental revenue stream.? …. Under this definition, Malibu Media certainly qualifies. However, Malibu Media generally responds to this allegation by pointing to comments of the trial judge in the so-called bellwether trial as unassailable proof that its intentions and tactics differ from other entities that bring copyright infringement actions related to pornographic movies.

Oh right. The Bellwether trial. That case had all sorts of problems, including a lying defendant who tried to destroy evidence. Unfortunately, it did not do what it was initially intended to do: actually test some of Malibu Media’s really questionable legal arguments. Judge Black quickly notes that the “bellwether” trial doesn’t matter. Malibu Media is up to some really questionable judicial gaming. He walks through all of the abuses, from misjoinder to Exhibit C — and even notes that despite being benchslapped over Exhibit C, Malibu Media just “evolved this practice”:

Notwithstanding Malibu Media?s contention that it ?instructed counsel nationwide to never file Exhibit C with a complaint again,? … this Court has borne witness to the fact that Malibu Media has simply evolved this practice rather than eradicate it. In an Order issued in a separate case on October 6, 2014, this Court sua sponte noted a continued vestige of Exhibit C in several paragraphs of Malibu Media?s complaint…. Instead of attaching Exhibit C, Malibu Media adapted its practice and now made an explicit reference to a document with ?additional evidence? that the defendant had distributed a large number of third-party files through BitTorrent…. Malibu Media disingenuously offered to produce this document to the Court with the seemingly off-handed remark that ?many of the titles to the third party works may also be relevant to proving Defendant is the infringer because they correlate to the Defendant?s hobbies, profession, or other interests.? … Citing the two Wisconsin district court cases that imposed sanctions for attaching Exhibit C, the Court struck the offending paragraphs from the complaint and ordered Malibu Media to file a conforming amended complaint forthwith…. Two months later, Malibu Media voluntarily dismissed the action without filing an amended complaint.

In discussing what to do about this, Black notes that, ordinarily, it’s wrong to just dismiss a case to discipline “an errant attorney” since that would be unfair to the parties the lawyer represents. However, he notes that in this case, it’s different. The sheer number of cases and the fact that Malibu/Lipscomb’s games continue suggest that this is not just a bad lawyer not fairly representing the interests of a client. Oh, and it’s clear Black knows that this is all being run through Lipscomb, rather than the random lawyers who actually turn up for local cases:

Here, and in the dozens of other actions before the Court, there is ample evidence that Malibu Media or its ?outside general counsel,? rather than its local counsel of record selects the litigation strategy and tactics. 12 Accordingly, the general principle that ?directly sanctioning the delinquent lawyer rather than an innocent client? may not apply here….

Still, Judge Black is incredibly patient. Despite the earlier orders to show cause, he once again gives Malibu a chance to explain itself. Though in the second of the two orders, Judge Black also lays out the possibility of “Rule 11 sanctions” against the lawyers for flat out lying to the court and failing to correct the record on it — though again (perhaps surprisingly) suggests that the conduct to date is not enough to get there.

Here, the record indicates that on February 10, 2015, Malibu Media?s counsel represented that service had not yet occurred. (Doc. 10 at 2). However, it is clear that Defendant was served on January 26, 2015. (Doc. 12). Counsel made no attempt to correct this statement until after the Court issued an Order to Show Cause regarding the apparent failure to complete service of process.

It may be frustrating to those who are watching these cases that even this is not enough to bring down Rule 11 sanctions, but Judge Black has made it clear that he’s watching — and you can bet that other judges across the country may start to take notice as well. And assuming Malibu Media can’t resist continuing to push things even further, the record of misconduct will be that much longer and more detailed.

Filed Under: copyright troll, copyright trolling, exhibit c, extortion, keith lipscomb, order to show cause, shakedown, timothy black
Companies: malibu media, xart

from the not-a-good-move dept

We’ve talked a lot about massive copyright trolling operation, Malibu Media (which is also known for providing porn under the name xArt). In some other cases, it’s been revealed that Malibu Media is one of many operations that appear to be little more than a copyright delivery system for a series of German companies that are behind the scenes of almost every major copyright trolling operation these days. The company is also somewhat infamous for its shady practices and the way in which it files many questionable lawsuits — including the use of “Exhibit C” — totally unrelated films that it claims the accused also downloaded illegally, but over which Malibu Media has no copyright claims. That exhibit clearly served only to try to pressure individuals into settling, so there wouldn’t be a public court document insinuating a list of embarrassing films had been downloaded.

Its latest move seems to go seriously over the line in yet another effort to try to force defendants to pay up and settle. In this case, involving a “John Doe” defendant, the court had been clear that any documents involving the name of the defendant needed to be filed under seal. That came after the court had rejected the defendant’s attempt to have the whole subpoena thrown out, but was clearly on to Malibu Media’s usual tricks pressuring people into settling. As summarized in a new filing from Booth Sweet (the lawyers for the defendant), the court had been abundantly clear that Malibu Media was not to publicly name the defendant:

Here, the Order was sent by the Court to the Plaintiff. The Court’s language could not have been more clear.

> ?If the summons and its return disclose the Defenan[d]t?s name and identifying information, Defendant shall file the same under seal.?

[….]

Nor was the intent of the Court?s Order lost upon the Plaintiff. In its motion to file its summons and return of service, Plaintiff specifically noted:

> ?To comply with the Court?s Protective Order [CM/ECF 20], Plaintiff seeks leave of Court to file its proposed summons and affidavit of service under seal.?

[….]

In approving the Plaintiff?s request to file its summons and return of service under seal, the Court once again took pains to establish

> the following procedure to balance Defendant’s privacy interests with the presumption of open judicial proceedings. Simultaneously with filing its proposed summons under seal, Plaintiff shall also file a Reference List and an amended complaint. The Reference List, which shall be filed under seal, must contain Defendant’s name and any other identifying information that Plaintiff deems necessary to the prosecution of its case, as well as an appropriate identifier that uniquely corresponds to each item listed. See Fed. R. Civ. P. 5.2(g). The amended complaint and all subsequent filings shall be publicly filed and must refer to Defendant only as John Doe and use the identifier provided in the Reference List for other identifying information….

So what do you think happened? Well, first, as has happened in many other Malibu Media cases, the company and its trolling lawyers failed to serve the defendant, so Booth Sweet filed for a motion to dismiss. In response… Malibu Media filed another filing (a “summons and reference list”) that was not redacted and not under seal. And did so at a time that made it difficult to fix in a timely manner:

On March 13, 2015, Plaintiff, in violation of the Court?s repeated Orders, filed an unredacted summons and reference list with John Doe?s name and address plainly visible. See Docs. 24 & 25. By choosing to file these documents at 8:00 PM on a Friday evening, Plaintiff intentionally chose a time when it would be difficult to correct, and the embarrassment alone might cause John Doe to seek a non-trial disposition just to end the matter. More so, the documents are dated March 12, 2015, further compounding the inference that Plaintiff intentionally waited until Friday evening to file them.

Furthermore, Booth Sweet notes that Malibu Media pulled this same damn trick in multiple other cases as well, including another one done late on a Friday evening:

Malibu Media v. John Does 1-14, No. 12-cv-0764-BAH, ECF No. 35 (D.D.C. 2012)

Plaintiff filed an un-redacted first amended complaint and summons, both identifying the John Doe there by name, in express contravention of the Court?s protective order. Before a sanctions motion was filed, the matter was dismissed due to Plaintiff?s failure to timely serve the complaint.

Malibu Media v. John Does 1-14, No. 12-cv-2084, ECF #37 (E.D. Pa. Nov. 1, 2012)

Plaintiff filed un-redacted notices ?in the other cases affected by the October 3 Order, naming all the Doe defendants? on a Friday evening. Id. at n.1. Malibu Media v. John Does 1- 14, No. 12-cv-263, ECF #48 (N.D. Ind. Dec. 14, 2012) Plaintiff?s motion to strike un-redacted complaint it filed in violation of court order, blaming error on paralegal.

In fact, Booth Sweet notes that not only does the unredacted filing late on a Friday seem questionable, the entire filing is questionable as it is entirely inappropriate here:

Plaintiff?s deadline to serve the Defendant was February 28. To date, no extension to effectuate service has been granted?which begs the question why these documents were even filed in the first place. These documents are neither necessary at this point in the litigation nor relevant to opposing Defendant?s pending motion to dismiss. However, they are essential to a Plaintiff, who unable to obtain a quick settlement, is all to happy to act out of spite.

It really is incredible how frequently we see this kind of gamesmanship in copyright trolling cases. I guess when you look on the federal judicial system as a system worth gaming for extortionate payouts from individuals, it shouldn’t be that surprising that the lawyers would also look to game other aspects of the system as well.

The judge in the case, Judge Timothy Black, has wasted little time in ordering Malibu Media’s lawyer, Yousef Faroniya, to explain why he shouldn’t be sanctioned for clearly disobeying the court’s orders:

Defendant moves the Court to order Plaintiff and its counsel to show cause why they should not be sanctioned or held in contempt for publicly filing Defendant’s name and address in contravention of two Court orders directing Plaintiff to file this information under seal. For the reasons set forth in Defendant’s motion, the Court finds that Defendant has established a prima facie case that Plaintiff and its counsel “violated a definite and specific order of the court requiring him to perform or refrain from performing a particular act or acts with knowledge of the court’s order.” … Accordingly, Plaintiff and its attorney Yousef Faroniya are ORDERED to show cause in writing by March 20, 2015 at 5:00 p.m. why they should not be sanctioned or held in contempt for publicly filing Defendant’s name and address in violation of the Court’s Orders dated January 21, 2015 and February 26, 2015. Defendant may file a response by March 24, 2015 at 5:00 p.m. The Court will set this matter for a hearing, if appropriate, after receipt of the written responses. The Clerk is DIRECTED to withhold issuance of the summons until this matter is resolved.

And, in a footnote, the judge makes it clear that Faroniya “shall specifically address Defendant’s allegation that substantially similar conduct has occurred in other cases involving Plaintiff.”

Given how frequently we see this kind of gamesmanship, it’s still somewhat amazing that Malibu Media and its lawyers haven’t yet collapsed into a Prenda- or Righthaven-style mess.

Filed Under: anonymous, copyright troll, timothy black, under seal, yousef faroniya
Companies: malibu media, xart