Trolls that live in skyscrapers, not under a bridge

March 11, 2013 8:54 PM

"Copyright Trolling" is a term used (by opponents of the practice) to describe copyright holders filing subpoenas to residential ISPs for the identities matched to IP addresses linked to content piracy. In this case, the piracy is often via BitTorrent networks, where peers can see each other's public IP addresses. Rather than filing suit after obtaining these identities, the content copyright holders attempt to extract settlements on the order of $2,000-3,000 from named ISP subscribers to avoid going to court. That's their plan anyway. The recent (and ongoing) story of Prenda Law demonstrates how turning the threat of copyright infringement lawsuits into a moneymaking venture (allegedly with a lawyer as both plaintiff -- through a shell company -- and counsel) can go very wrong for the "trolls"...

In recent years, porn producers have used the practice (previously seen with Oscar-winner The Hurt Locker) to attempt to recoup money they feel they have lost out on because of illegal file-sharing, and have teamed up with lawyers specializing in anti-piracy like John Steele of Prenda Law. Sites like FightCopyrightTrolls and DieTrollDie have sprung up to document these cases and expose what they feel to be unethical tactics by copyright holders and their counsel. Opponents allege blackmail by producers and their lawyers: that alleged pirates are forced into paying settlements to keep their names from being linked to a pornography lawsuit in court, regardless of guilt. (Even Steele admits -- to Forbes Magazine, no less -- that their target often isn't the infringer.) There are often allegations of threats to inform family and friends of the charges directly. This trend has even reached Metafilter.

A notable recent case is that of Prenda Law, representing Ingenuity 13, a LLC based in St. Kitts. It started out normally enough (as these cases go) in September 2012: Ingenuity 13 issued subpoenas, and the John Doe defendant moved for a stay of the subpoena. In a related motion, however, John Doe's lawyer, Morgan Pietz, alleged multi-case fraud (PDF) by Prenda, including identity theft, undisclosed financial interest, and other lies by the Prenda firm and its attorneys. Pietz further questioned whether any subpoenas should be granted solely based on an IP address. (This is a common argument among defendants in these cases.)

In response, Prenda moved for sanctions against Pietz, and on March 4th, filed three separate libel lawsuits against Alan Cooper (the victim of alleged identity theft), FightCopyrightTrolls and DieTrollDie, and a host of John Doe anonymous commenters on these sites. The motion for sanctions was summarily dismissed by US District Judge Otis Wright. The three libel suits were moved to federal court, and one of the has already been voluntarily dismissed by Steele (PDF). (The original John Doe infringement lawsuit was voluntarily dismissed by Prenda in January; the notice (PDF) contained a contention that arguing these cases before Wright is futile.)

On March 5th, Judge Wright ordered (PDF) seven people linked to Prenda to appear before him in person on March 11th to sort the whole thing out, or face sanctions and/or bench warrants.

In the meantime, on March 6th, one of Prenda's lawyers, Paul Hansmeier, gave a deposition on behalf of AF Holdings. Pietz's theory of AF Holdings being a shell company owned by lawyers to hold copyrights and subpoena, extract settlements from, and sue infringers is specifically not denied in Hansmeier's deposition. (As Judge Wright said later, "There was so much obstruction in this deposition that it's obvious that someone has an awful lot to hide.")

At the hearing today, four summoned Prenda attorneys failed to appear, including Steele, claiming lack of jurisdiction. Alan Cooper was one of the summoned parties that did show; he reported that he was little more than Steele's house-sitter, and had no connections to AF Holdings. He also played voicemails containing implicit threats, and offers of a settlement, from John Steele. Two parties that weren't in Wright's summons, Verizon and AT&T, did arrive to testify that they never received notice of a judge's canceling Prenda's subpoenas, as was required. (AT&T found the orders through PACER.) Gibbs did appear, but his testimony seemed to be more damaging to Steele and co than if he hadn't.

“The client has been running everything here,” Wright said pointedly. “And I know who the client is,” he added, implying it was John Steele. Wright then dismissed Gibbs from the stand.

“Thank you, Your Honor,” Gibbs said as he stepped down.

“Good luck to you,” Wright responded.

posted by supercres (57 comments total)

This post needs an org chart or something.
posted by ryanrs at 9:22 PM on March 11 [18 favorites]

After getting it all down I realized it's not as complicated as it seems at first (though there is a rabbit-hole of related cases). Check out the TechDirt "sort the whole thing out" link.
posted by supercres at 9:26 PM on March 11 [2 favorites]

This is awesome. I feel the urge to send some kind of nerdy swooning fanmail to Judge Wright.
posted by Joh at 9:31 PM on March 11 [5 favorites]

This post needs an org chart or something.

Basically, Prenda Law appears to be engaging in egregious copyright trolling, buying the rights to internet porn, then suing people who download said porn through a group of sham LLCs, all apparently directed by Prenda Law itself, and not any actual "client" other than the lawyers filing the suits. As you can imagine, this likely violates scores of ethics rules.

Judge Wright has taken special interest in unraveling this whole sordid scheme, and ordered the Prenda lawyers to appear in California. Their response today was essentially, "you can't make us", even though one of them is in fact a member of the California Bar. This was probably the worst possible move imaginable, and judicial fury is about to reign down.
posted by T.D. Strange at 9:34 PM on March 11 [40 favorites]

I can't wait to see how this plays out
posted by rebent at 9:42 PM on March 11 [1 favorite]

This is awesome and highly entertaining to read.
posted by pombe at 9:52 PM on March 11

T.D. Strange: "Their response today was essentially, "you can't make us", even though one of them is in fact a member of the California Bar. This was probably the worst possible move imaginable, and judicial fury is about to reign down."

I'm constantly amazed at how bad (some) lawyers are at making good legal decisions. Is this a bit like medical doctors believing they themselves can't get sick?
posted by Joakim Ziegler at 9:53 PM on March 11 [3 favorites]

So delicious! Copyright trolls abuse the spirit of the courts to shake down alleged infringers, a victim fights back and untangles a whole nest of unethical and possibly illegal behavior on the part of the copyright trolls. Schadenfreude is the best flavoring.

This story reminds me a bit of the subprime mortgage foreclosure fiasco, where banks started foreclosing on mortgages without bothering with the legal niceties of documenting the foreclosure. In some abstract sense the banks were probably correct; the folks hadn't paid their mortgages. But the procedures exist for a reason and if you don't follow them, you should suffer the consequences. I have no doubt that a bunch of the folks threatened by Prenda Law did in fact download an unauthorized copy of some smutty video. But that doesn't make it OK for the law firm to abuse the law themselves. Defrauding the court, indeed.
posted by Nelson at 9:57 PM on March 11 [3 favorites]

I'm constantly amazed at how bad (some) lawyers are at making good legal decisions. Is this a bit like medical doctors believing they themselves can't get sick?

In my experience, it's just that many lawyers are just rather stupid and bad at their jobs.
posted by His thoughts were red thoughts at 9:57 PM on March 11 [11 favorites]

Oh man, I've been following this train wreck too. The "At the hearing today" link is wonderful reading.

These trolls have gone after hundreds of thousands of people in the last few years (Not just Prenda, there are a couple other operations run by smarter people). The operation is to go to a friendly court with a list of between 1 and 10,000 IP addresses you allege are infringing. Get discovery to compel ISPs to turn over John Doe information. Harass John Does with threatening phone calls (robocalls) and letters demanding a few thousand dollars. In these communications note that a court case sure is expensive and it would be public record that John P Smith of Ogden Utah is being sued for pirating interracial gay porn. Some reasonably large percentage of the people will pay the money whether guilty or not.

This is key: They have never actually fought anyone in court, though another federal judge, Baylson, is making another troll, Lipscomb, participate in a 'bellweather' trial to get to the actual merits of the cases. This case does not seem to be going as badly for the trolls as Lipscomb seems not to be as negligent and crazy as Paul Hansmeier and Co.

When one court wises up, they start filing in a new jurisdiction. It's simple and evil enough that it has been pretty lucrative. Whenever they get too much judicial scrutiny, they just dismiss the cases.

What's amazing is given the simplicity of the scam, how they managed to fuck it up so badly. They had a perfectly serviceable extortion model (one that is still working for other trolls). But Prenda got in trouble by both being greedy (asking for too much money from each victim, causing more to fight back) and by resorting to ridiculously illegal behavior like identity theft, lying on court documents, and worse lying stupidly on court documents.

Amusing facts:
Peter Hansmeier, brother of Paul Hansmeier is their computer forensics guy. He gets $6000 a month for reading off a list of peer IP addresses from his bit torrent software. He has no qualifications of any sort, he lacks the Private Investigator license that many states would require for his work to admissible. Of course, that hasn't mattered by traditionally Prenda has dropped any cases where it looked like that might come up in court.

In three years Prenda went through 4 names. Steel Hansmeier -> Prenda Law -> Alpha Law -> Anti-Piracy Law Group. With each step Steele and Hansmeier have tried to add additional layers to keep their names out of it.

There was for a few weeks an outfit even more criminal than Steel and Co. The Internet Copyright Law Enforcement Agency was demanding "$495 by a certain date, or you “will be fingerprinted, photographed, and held in jail until you are arraigned in court.” They swiftly realized they were well into truly criminal territory and within a few weeks their website read that they were ceasing operations "Please disregard any notices from us and please don't send us any payments."
posted by pseudonick at 9:59 PM on March 11 [25 favorites]

I wouldn't be surprised if they were also participating in the infringement itself, though admittedly I have no proof. Why bother waiting for someone else to post your smut to a torrent site?
posted by ODiV at 9:59 PM on March 11 [2 favorites]

I'm constantly amazed at how bad (some) lawyers are at making good legal decisions. Is this a bit like medical doctors believing they themselves can't get sick?

In the order compelling them to come to the hearing, Wright implied he had half a mind to throw them in jail and would issue a bench warrant if they failed to appear. If the choice is between making a specious argument and a couple months in chokey, begging off was probably the wiser course.
posted by Diablevert at 10:02 PM on March 11

Although one reason Prenda might have sunk to identity theft and a copyright holder shell game is that real porn companies were getting harder to fund.

One of Prenda's earlier clients, Paul Pilcher's Hard Drive Productions was suing a few tens of thousands of people. Prenda made a move to start actually naming some Does in lawsuits, which didn't work all that well. They probably got some settlements, but it also motivated some Does to fight back hard. There were two countersuits that Hard Drive Productions had to settle. The terms of settlement were not revealed, but it was pretty clearly a loss for Prenda.

All these actions gave Hard Drive Productions a much higher profile, which might not have been advantageous as the business of pornography is illegal in the state in which they operate. There were some noises from the state AG about being unhappy and not all that much later one of Hard Drive Productions employees was arrested for soliciting a minor for prostitution.

So it might have been difficulty getting real clients, but it might have been simple greed. I don't think any numbers have come out, but Prenda was keeping most of the money anyway, maybe they realized they could keep it all by running their copyright shell game out of St. Kitts and Nevis.
posted by pseudonick at 10:14 PM on March 11

So the take-away is that if someone leaves their WiFi open when not using it... it could have been anyone who downloaded that those episodes of Game of Thrones from torrent from the Pirate Bay.
posted by Pirate-Bartender-Zombie-Monkey at 10:20 PM on March 11

> it could have been anyone who downloaded that those episodes of Game of Thrones from torrent from the Pirate Bay.
posted by Pirate-Bartender-Zombie-Monkey

Yeah, but when the same pirating IP address is also tracked doing Google searches for Banana-Brain daiquiris, you're starting to look like a pretty good suspect.
posted by benito.strauss at 10:56 PM on March 11 [12 favorites]

THANK YOU

I got subpeonaed on this and I knew it was a fuckin scam. I will have to read your links, but I get the feeling my subpeona got cancelled.

and I'm 100% sure I never downloaded anything involved with this nonsense
posted by ninjew at 11:31 PM on March 11 [2 favorites]

This is a heartening story in a lot of ways, but it's still a shame that this outcome is so dependent on the will of the judiciary to pursue and unravel this. If Judge Wright hadn't been willing to go after Prenda Law, none of this would have come about. I guess this is just a broader systematic complaint about a justice system that relies too much on judicial initiative for justice; it's doesn't feel very much like "equal justice," when you have to get the attention of a sympathetic judge to get it…
posted by LMGM at 12:36 AM on March 12 [4 favorites]

The whole idea of basically extorting money out of schmucks too embarrassed to have their name linked to a court case involving a bunch of porn films reminded me of Frank Abagnale (subject of Spielberg's Catch Me If You Can) talking about the best scam he'd come across:

The most creative case that [Abagnale] discussed was a scam by two brothers who needed a summer job. They registered a DBA (doing business as -- a legal alias), then sent out advertisements: Get the 10 best nude videos for $49.95 -- a $200 value! Anyone who wrote in received back a letter saying that they were sold out so their $49.95 was being refunded.

If anyone cashed the check, they would have received their refund. The checks were good. But nobody cashed them. Why? The DBA was printed in big red ink at the top of the check: "Child Porn Videos". I guess that the buyers were too embarrassed to cash the check.

The postmaster general wanted to get them on mail fraud, but it seems that the brothers had actually mailed out one set of videos. Thus, not a fraud. And the checks were good, and the DBA was real and done legally. The brothers just played on the embarrassment factor, and correctly assumed that nobody would cash the checks. The brothers got off free.

I mean, as a low-level scam by two bored college kids, it's pretty funny. As a business model from a bunch of shady lawyers, it's just boring old extortion. And that's aside from any dodginess about who they go after.
posted by Len at 12:53 AM on March 12 [11 favorites]

The whole idea of basically extorting money out of schmucks too embarrassed to have their name linked to a court case involving a bunch of porn films reminded me of Frank Abagnale

Oddly enough, my first thought was this scene from Lock, Stock, And Two Smoking Barrels (NSFW).
posted by Jughead at 1:35 AM on March 12 [2 favorites]

Here is some additional coverage from the Minnesota Litigator blog (several of the lawyers associated with Prenda are connected to Minnesota.) Also, an article from the Minneapolis Star Tribune, which found yet another person who had been listed as an organizer of various sham corporate entities without his knowledge or permission.
posted by Area Man at 4:07 AM on March 12 [1 favorite]

hu•bris
/ˈ(h)yo͞obris/
Noun
1. Excessive pride or self-confidence.
2. (in Greek tragedy) Excessive pride toward or defiance of the gods, leading to nemesis.
Synonyms: arrogance - hauteur - haughtiness - pride - insolence
See also: Prenda Law
posted by Thorzdad at 4:28 AM on March 12 [2 favorites]

The whole thing reminds me of a Roald Dahl short story from the 80's. A couple scammers target high profile dead rich guys in the obits and send invoices to the grieving widows. Each is for some pretty awful-sounding porn. The widows always pay up because a) they're embarrassed and b) they can't really be sure their husbands weren't into that stuff. I won't spoil the ending for you...
posted by web-goddess at 4:45 AM on March 12 [4 favorites]

I can't believe I forgot to include this. One of the parties subpoenaed in the defamation lawsuit was Automattic, owners of Wordpress.com, where FCT and DTD are hosted. Their response is amazing.
posted by supercres at 5:02 AM on March 12 [3 favorites]

Thanks for the Minnesota link. Nice that they mention that Steele comes from UMN. It is a lovely sort of scam working on pure shame and shamelessness in equal turns.
posted by jadepearl at 5:49 AM on March 12

Who is Alan Cooper?
posted by markkraft at 5:55 AM on March 12 [1 favorite]

I'm kinda starting to think, with the proliferation of these types of abuses, that in fact the core premise of the modern US legal system is to screw random people for random reasons in order to enrich lawyers, and that any other consequence of having a legal system is purely coincidental.
posted by aramaic at 6:08 AM on March 12 [4 favorites]

Aramaic, you may appreciate Fred Rodell's Woe Onto You Lawyers. Rodell was a Professor at Yale Law and wrote the piece in 1939. It is a classic attack on the U.S. legal system and outsized role that lawyers play in the U.S. In another article, Rodell called the legal profession a "high-class racket."
posted by Area Man at 6:39 AM on March 12 [2 favorites]

The Popehat writeup today at techdirt was pretty amazing.
posted by gemmy at 7:17 AM on March 12 [2 favorites]

Also, it's being attempted in Canada. But they went after an independent rather than major ISP, Teksavvy, who were having none of it.
posted by juiceCake at 8:15 AM on March 12 [1 favorite]

What's interesting to me is that this whole brouhaha is predicated on the fact that these guys were running a shell company at the same time as they were sending out these extortion letters (from a law firm that represented said shell company). Obviously it doesn't look like their intent was ever to represent a "real" client, but if they had, would this even be noticed? While I think this is a fascinating case, the issue seems to be more about shell corps and identity theft rather than the ethics of sending "shakedown" letters on behalf of a client (which I think is an issue that needs to be addressed).
posted by antonymous at 9:37 AM on March 12

I think the Coen brothers are overdue to make a black comedy involving sex, greed, and human stupidity.
posted by CBrachyrhynchos at 9:38 AM on March 12

Obviously it doesn't look like their intent was ever to represent a "real" client, but if they had, would this even be noticed?

I don't know if it even would have been noticed if they didn't call Alan Cooper the CEO of AF Holdings. Check out Pietz's specific motion for a point-by-point account of what Prenda allegedly did wrong.

Someone upthread mentioned Baylson's bellwether trial in Eastern District of PA. I think that will have a much bigger impact on the practice as a whole than this fiasco. This is just a story of how dumb people can get when huge amounts of money are, for all intents, there for the taking.
posted by supercres at 10:35 AM on March 12

I'm saving that Popehat write-up for later. I love real-life detail-diving narratives like that.
posted by benito.strauss at 11:31 AM on March 12

Another firsthand account of the hearing.
posted by supercres at 1:28 PM on March 12

T.D. Strange: Judge Wright has taken special interest in unraveling this whole sordid scheme, and ordered the Prenda lawyers to appear in California. Their response today was essentially, "you can't make us", even though one of them is in fact a member of the California Bar. This was probably the worst possible move imaginable, and judicial fury is about to reign down.

You have NO IDEA how happy that would make me.

OK, you probably do. Popcorn?
posted by IAmBroom at 2:12 PM on March 12 [1 favorite]

His thoughts were red thoughts: Is this a bit like medical doctors believing they themselves can't get sick?

In my experience, it's just that many lawyers are just rather stupid and bad at their jobs.

I don't consider that far off the problem with many doctors getting sick.
posted by IAmBroom at 2:49 PM on March 12

In these communications note that a court case sure is expensive and it would be public record that John P Smith of Ogden Utah is being sued for pirating interracial gay porn. Some reasonably large percentage of the people will pay the money whether guilty or not.

Wait, isn't this quite literally the setup of the whole "ass ticklers dildos" scene in lock stock and two smoking barrels?

Life imitating art, i guess.
posted by emptythought at 4:14 PM on March 12

I visited Wright's courtrooom with a law school class last year. He is a no-nonsense Judge. This must have been pretty amazing in person.
posted by snuffleupagus at 6:55 AM on March 13 [1 favorite]

This post needs an org chart or something.

Here is the org chart.

posted by snuffleupagus at 7:27 AM on March 13

Look at the page source info for http://www.prendalawfirm.com/

I didn't bother to enable scripts, but George checked it in various browsers and got the same message.

Evidently, that's all it is. Text.

Oh, and GREAT POST, by the way, and awesome comments. This is one to watch.
posted by Xoebe at 8:13 AM on March 13 [1 favorite]

Transcripts of Steele's voicemails to Alan Cooper.

Remember, Cooper was supposedly the CEO of the company that Steele was representing in court. Naturally, Cooper didn't know anything about that; of course his actionable mistake in Steele's eyes was telling people that he didn't know anything about it.
posted by supercres at 2:00 PM on March 13

Update: Wright has ordered another hearing for March 29th. For real this time, guys.
posted by supercres at 1:10 PM on March 14 [2 favorites]

Can someone explain to me why the whole identity theft part of this? Why bother?
posted by bq at 1:29 PM on March 16

Read the article. One of these lawyers misappropriated his Minnesota property caretaker's identity for use as the ostensible manager of sham offshore companies these lawyers created to act as their own clients in order to file these suits. They needed to put someone else's name to the suits as their client, in essence.
posted by snuffleupagus at 2:27 PM on March 16

I've read it. I don't understand why they need a client. Can't they be their own clients?
posted by bq at 5:56 PM on March 16

That would reinforce one of many defendants' main points in motions to quash subpoenas: that this exercise is purely for a quick profit, and plaintiffs have no interest in actually litigating these cases. If they have no interest in litigating, then the lawsuits (namely, the subpoenas) are fraud on the court-- they're using the legal system only to extract information on ISP subscribers.
posted by supercres at 5:16 AM on March 18 [1 favorite]

Just saw that this Twitter account is apparently creating cartoons revolving around this whole ordeal, and they're kinda funny.
posted by antonymous at 11:49 AM on March 18

Lawyer Suggests That Prenda Law May Have Only 'Released' Movies It Sued Over As A Honeypot For Lawsuits
posted by homunculus at 1:48 PM on March 22

I went to the Prenda hearing. VERY SHORT. Everyone on the spot was going to take the fifth so Wright cut it short. Pretty dramatic.
posted by snuffleupagus at 10:44 AM on April 2

Popehat has a story up about today's hearing.
posted by zempf at 1:43 PM on April 2 [6 favorites]

I was just coming in to post the Popehat link. Amazing. I really hope folks are still checking in on this thread.
posted by supercres at 2:29 PM on April 2

Jumping back a bit:

I've read it. I don't understand why they need a client. Can't they be their own clients?

Technically yes. It's a bad idea because counsel has certain roles and immunities (as long as they follow procedure and stay within ethical bounds), while the plaintiffs are ultimately on the hook for the case. Prenda's strategy is playing a game of legal "not me" like a Family Circus strip. "We're representing our client to the best of our ability, but the clients (AF Holdings, Sunlust LLC, etc.) are calling the shots."

The courts then say, "Exactly who is your client?"

Prenda produces Lutz, who completely botches the job, and a bunch of documents naming Cooper, who sues Prenda for identity theft.

As the latest linked article explains, "who is your client?" isn't a question you can plead the fifth on. It's not a question of criminal guilt, it's a question of fundamental procedure. The judge must determine if the plaintiff actually can file the suit in his or her court. Wright's questions were directly pertinent to that.

Prenda's stonewalling on the fifth is quite possibly the legal equivalent of flipping over the chess board here. Wright closed the hearing after 15 minutes because there's nothing more to hear at this point. The plaintiff probably doesn't exist as a valid legal entity, and its lawyers are not even pretending anymore to act in anything other than their own interests. Prenda's refusal to answer basic questions about their claimed plaintiffs is now on the record. That case is dead, and Wright can exercise the discretion to suggest criminal, tax, and/or ethics investigation of Steele and Co.
posted by CBrachyrhynchos at 5:31 PM on April 2

This is amazing. I'm checking Pope Hat regularly for updates, he's really bringing this case to life for me.
posted by flibbertigibbet at 8:42 AM on April 3

I found a nice article on the implications of pleading the fifth in a civil case (it's recent and includes commentary on the Prenda situation). I'm glad to see sustained interest in this - as the oft-truncated quote by Louis Brandeis goes: "Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman."
posted by antonymous at 10:09 AM on April 3 [1 favorite]

Another Popehat update: while we wait for Judge Wright to respond to last week's events, the nationwide piling on has begun.
posted by snuffleupagus at 10:25 PM on April 8 [1 favorite]

And another on Prenda's late attempts to close the barn door.
posted by snuffleupagus at 7:14 AM on April 9

But even if Berry's claims about Cooper are true, they don't exonerate Prenda or its principals. If the claims about Cooper are true, it means that Prenda principals, rather than stealing an identity to serve as the principal of a front company, used a mentally ill caretaker as the putative executive of a front company.

Prenda: He's not a victim, he's a patsy! (I personally loathe this argument.)
posted by CBrachyrhynchos at 7:43 AM on April 9