Month: October 2016

Prenda and Paul Duffy Required to Pay Punitive Damages

There have been many stories concerning Prenda and Paul Duffy (now deceased). Prenda began as a law firm that would sue defendants who, it claimed, downloaded pornographic movies without paying for them. Eventually, Prenda, Duffy, and his colleagues stirred up a Hornet’s nest of bad publicity and strong opposition. Defendants claimed that Prenda was a scam.

Prenda and Duffy were sanctioned by several federal district courts for false pleadings and efforts to mislead judges. Prenda appealed and lost all the appeals. This particular case, Duffy v. Godfread, 13 cv 01569  was handled by Judge Darrah of the Northern District of Illinois. The original complaint was filed by Duffy and Prenda and was for defamation. The factual allegations made by Prenda quickly unraveled and the defendants moved for sanctions. Judge Darrah ordered sanctions.

Judge Darrah’s sanction orders were affirmed by the Seventh Circuit. On remand Judge Darrah entered judgment in favor of the Defendants and ordered Duffy and Prenda to pay (a) sanctions of $11,758.20; (b) actual damages of $162,448.74 and (c) punitive damages of $500,000.

Edward X. Clinton, Jr.

Defendant’s Change of Lawyers Insufficient Basis to Avoid Rule 37 Sanctions

The defendant, Infinite Classic, failed to attend a deposition or participate in discovery. The plaintiff moved for Rule 37 sanctions. The Defendant argued that it changed lawyers so it should not be sanctioned. The court found that the change in lawyers was no excuse.

The Infinite Defendants object to the Magistrate Judge’s award of $5,000 for their failure to appear at depositions and $5,000 for their failure to timely participate in written discovery (Dkt. # 99 ¶¶ 21-24), arguing that the award is not supported by evidence, and that the failure to attend the depositions or timely respond to discovery was excusable. (Id. ¶¶ 24, 26-36.) Specifically, the Infinite Defendants argue that they retained new counsel on July 10, 2015, and that “[s]even days from the date August 14, 2015 Order [sic] entered for the production of additional documents responding to the discovery was not sufficient time for [new counsel] to meet [deadlines] while catching up with this complicated action reviewing previous pleadings, grasping factual backgrounds and engaging factual/legal [sic] analysis.” (Id. ¶ 30.)

This excuse is insufficient. Counsel for the Infinite Defendants had been counsel of record for nearly a month when the Motion to Compel was filed; counsel received notice of the Motion, yet entirely failed to request an extension of time or otherwise respond to the Motion to Compel, and also failed to respond to the Motion to Enforce the Court’s Order. (Dkts. ## 65 & 66, receipts of service.) Further, Counsel did not object to the Court’s Orders compelling the Infinite Defendants to participate in written discovery or to comply with previous orders. (Dkts. ## 67, 68.) Likewise, counsel did not object to the notices of deposition. This utter failure to respond, viewed alongside the Infinite Defendants’ historical failure to timely respond or otherwise abide by previous orders of this Court, amounts to willful disregard of the Court’s authority and the judicial process in general. The Magistrate Judge correctly found that imposition of attorney’s fees, “one of the least severe sanctions,” under the Court’s Rule 37(b) sanctioning authority, was appropriate for the discovery-related failures documented here. Cooper Tire, 685 F.3d at 488.

The excuse appears to be particularly weak in federal court where all orders are served by email and published on the federal PACER. Anyone can find out the status of a case given ten or fifteen minutes of time. If the lawyers could not get the defendant to comply with discovery, they should have filed a motion for an extension as soon as possible.

Edward X. Clinton, Jr.

Source: JANE ENVY, LLC v. INFINITE CLASSIC INC., Dist. Court, WD Texas 2016 – Google Scholar