Category: Uncategorized

A Prenda Law Update

I have not written about Prenda Law in some time as the Prenda Law Firm has lost numerous cases in the Seventh and Ninth Circuits and is subject to several sanctions judgments. The Illinois Attorney Registration and Disciplinary Commission has filed a complaint against John Steele. (Apparently there was a prior version of the complaint that named Paul Duffy as a defendant, but Duffy passed away last month). Given that Prenda, Duffy and Steele lost case after case in federal court, it is unlikely that the disciplinary case will result in a good outcome for Steele.

Edward X. Clinton, Jr.

Source: BEFORE THE HEARING BOARD

The Anti-Plaintiff Pending Amendments to the Federal Rules of Civil Procedure and the Pro-Defendant Composition of the Federal Rulemaking Committees by Patricia W. Hatamyar Moore :: SSRN

The Anti-Plaintiff Pending Amendments to the Federal Rules of Civil Procedure and the Pro-Defendant Composition of the Federal Rulemaking Committees by Patricia W. Hatamyar Moore :: SSRN.

This abstract of this article argues that amendments to the Federal Rules of Civil Procedure are the result of a biased and pro-defendant process.

The abstract states:

In the classical David-and-Goliath lawsuit brought by an individual person against an institutional defendant, the pending amendments to the Federal Rules of Civil Procedure hurt David and help Goliath more than any previous round of amendments. The amendments represent corporate defendants’ victory in the thirty-year war to limit the scope of discovery by enshrining “proportionality” as part of the definition of, rather than a limitation on, the scope of discovery. The amendments will also make it more difficult for plaintiffs to obtain an adverse inference jury instruction or other sanctions for a defendant’s intentional loss of electronic evidence. For no good reason, the amendments will reduce the length of time within which plaintiffs must effectuate service of process, thereby gifting defendants with a corresponding reduction in the statute of limitations. In addition, the amendments wipe out thirty-six official forms, on the thin excuse that the Advisory Committee wants to “get out of the forms business”; in fact, many interpret the move as a tacit agreement with the heightened pleading standard imposed on plaintiffs by the Supreme Court in Twombly and Iqbal. 

The amendments’ mostly anti-plaintiff effect is evidenced by a stark split in the public reaction, with plaintiffs’ lawyers almost unanimously against most of the amendments and defendants’ lawyers almost unanimously in favor. But the Advisory Committee was astoundingly indifferent to the polarized public reaction to the proposed amendments. One Advisory Committee member dismissed the stories told at the public hearings by plaintiffs’ lawyers about their need for discovery as “Queen-For-A-Day issues,” a reference to a 50-year-old daytime television show in which women tearfully told their real-life sob stories to vie for prizes.

Remarkably, in evaluating the need for these amendments, the Committee did not rely on very much case law, any government caseload statistics, or any of the ninety-four district court reports on “cost and delay” mandated by the Civil Justice Reform Act of 1990. Instead, the Committee commissioned a mound of so-called “empirical studies” which consisted mostly of flawed opinion surveys of self-selected attorneys. The one methodologically sound study, conducted by the Federal Judicial Center, found that discovery worked well and at modest cost in most federal cases. The Committee either ignored or mischaracterized the FJC’s study.

Given the makeup of the Advisory Committee and the Standing Committee, none of this is surprising. The members of both committees are all appointed by Chief Justice John Roberts, and except for a few tokens, they are ideologically predisposed to think like Federalist Society members, demographically predisposed to think like elite white males, and/or experientially predisposed to think like corporate defense lawyers. There is no explicit constitutional, statutory, or rules authority for the Chief Justice’s unbridled appointment power. The Article concludes by forecasting the passage of a default “requester pays discovery costs” rule that is sought by defense interests, unless the mechanism for appointment of federal rules committee members is changed.

If you don’t disclose it or produce it, you can’t use it.

Bryntesen v. CAMP AUTOMOTIVE, INC., Dist. Court, D. Idaho 2015 – Google Scholar.

There is an old saying in the legal world that “if you don’t produce it, you can’t use it at trial.” Here, the plaintiffs filed suit apparently against a company that sold or leased them an RV. There was a dispute about payment and, at some point, the plaintiffs were arrested by the police.  Plaintiffs failed to disclose in discovery videos of the arrest.

The court sanctioned the plaintiffs under Rule 37, and also awarded them legal fees and costs for brining the motion. Instead, the court held that the plaintiffs could not use the videos in their case because they deprived the defense of the opportunity of asking questions about the videos in discovery.

The pertinent quote is this one:

“Plaintiffs only produced the videos after Sheree Bryntesen acknowledged their existence during her deposition. And only after disclosing the videos of the incident, did Plaintiffs’ counsel “investigate whether any other media files had also been inadvertently omitted from previous disclosure and discovery responses.” Plf. Br., at p. 5, Dkt. 76. “It was then that Plaintiffs’ counsel discovered that the video of the telephone conversation between Casey Bryntesen and Scott Grumbly had not yet been disclosed or produced.” Id.

Mistakes and oversights happen, but the number of mistakes and oversights here are troubling. Especially where the disclosure was not ultimately made until after the vast majority of the depositions occurred — depriving defense counsel of the opportunity to ask most witnesses, particularly the officers involved in the arrest, about the videos. Plaintiffs failed to timely disclose the videos as required by Rule 26(a) and (e). And, under these circumstances, the Court finds that the late disclosure was not substantially justified or harmless — as is necessary to avoid Rule 37 sanctions. Repeated oversights are not substantial justification, and defense counsel’s inability to question witnesses about the videos during their depositions is surely not harmless….

Here, the proper sanction is to preclude Plaintiffs from using the videos on a motion, at a hearing, or at trial. Defendants may still use the videos. However, if they do so, the Court will then allow Plaintiffs to use them as well — Defendants can make that choice.”

In, sum an excellent opinion discussing the rationale for the preclusion of evidence.

Edward X. Clinton, Jr.

www.clintonlaw.net

Adventures In Diversity Jurisdiction – Court Denies Motion to Remand On The Basis of Fraudulent Joinder

CHARLA G. ALDOUS, PC v. Lugo, Dist. Court, ND Texas 2014 – Google Scholar.

This is a frequently litigated issue in federal court – whether a defendant’s citizenship should be discounted for purposes of diversity jurisdiction.

Defendants often want to remove a case from the state court to the federal court. All defendants must join in the removal petition. Here the defendants alleged that there was complete diversity of citizenship, in that the plaintiff and defendants were citizens of different states.

Plaintiff moved to remand the case on the ground that one of the defendants had the same citizenship as the plaintiff. Defendants argued that that defendant was fraudulently joined to defeat diversity jurisdiction.

The court lays out the legal framework as follows:

“Unless Congress expressly provides otherwise, a defendant may remove a state court civil action to a federal district court if the district court has original jurisdiction over the action. 28 U.S.C. § 1441(a). A federal court has original jurisdiction over civil actions in which there is diversity of citizenship between the parties and the amount in controversy exceeds $75,000 exclusive of interest and costs. 28 U.S.C. § 1332(a). Otherwise stated, the statute requires complete diversity of citizenship; that is, a district court cannot exercise subject matter jurisdiction if any plaintiff shares the same citizenship as any defendant. See Corfield v. Dallas Glen Hills LP, 355 F.3d 853, 857 (5th Cir. 2003)(citing Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806)). In considering citizenship, however, the court considers only the citizenship of real and substantial parties to the litigation; it does not take into account nominal or formal parties that have no real interest in the litigation. Navarro Sav. Ass’n v. Lee, 446 U.S. 458, 460-61 (1980). The citizenship of a party that is improperly joined must be disregarded in determining whether diversity of citizenship exists. Johnson v. Heublein, 227 F.3d 236, 240 (5th Cir. 2000).”

After careful analysis the court determined that the nondiverse defendant, Teresa Lugo, was improperly joined because the statute of limitations had run as to any claims against her. The court explained: “Defendants have convinced the court that Lugo would prevail on the statute of limitations defense; therefore, there is no reasonable basis for the court to predict that Plaintiffs might be able to recover against Lugo on their claim of negligent misrepresentation. Accordingly, the court holds that Lugo was improperly joined to defeat diversity jurisdiction.”

This is a classic case of fraudulent joinder of a defendant to defeat diversity jurisdiction.

D.C. Circuit Administers More Punishment To Prenda Law and Paul Duffy

The case is captioned, AF Holdings, LLC v. Does 1-1058, Cox Communications, Inc., 12-7135.

This is another case where Duffy, on behalf of AF Holdings, “sued and then sought discovery regarding more than a thousand unknown individuals who it claimed had illegally shared a copyrighted pornographic film.” Cox Communications appealed from an order granting AF Holdings motion to proceed with discovery. AF Holdings sued over 1000 defendants alleging that they had improperly downloaded a copyrighted pornographic film. AF Holdings then served subpoenas on five internet providers, seeking information about the John Doe clients who were sued. The internet service providers refused to produce documents, on the ground that the subpoena would subject them to an “undue burden” because AF Holdings did not establish that the court would have personal jurisdiction over the defendants. Very few of the over 1000 defendants resided in the District of Columbia. 

The D.C. Circuit reversed the district court’s order granting leave to serve the subpoenas on the internet service providers. The court stated “we think it quite obvious that AF Holdings could not possibly have had a good faith belief that it could successfully sue the overwhelming majority of the 1058 John Doe defendants in this district.” By seeking to enforce broad subpoenas on individuals who did not reside in the district, AF Holdings “clearly abused the discovery process.” at 12.

The court then held that most of the defendants (those who did not live in the district) were improperly joined in the case. The court then reversed the district court’s order granting AF Holdings the right to proceed with discovery. The court held that the subpoenas should have been quashed because very few of the defendants resided in the district and because the vast majority of the defendants were improperly joined in the lawsuit. 

The court then remanded the case to district court with a suggestion that the court consider awarding sanctions for Prenda’s use of an allegedly forged copyright assignment. 

The first paragraph of the opinion illustrates how hostile the federal courts have become to Prenda. “Generally speaking, our federal judicial system and the procedural rules that govern it work well, allowing parties to resolve their disputes with one another fairly and efficiently. But sometimes individuals seek to manipulate judicial procedures to serve their own improper ends. This case calls upon us to evaluate–and put a stop to– one litigant’s attempt to do just that.”

Prenda, in my opinion, can no longer move forward with any cases against anyone. It has been destroyed by the federal courts. However, the destruction of Prenda will not stop others from bringing copyright actions against those who wrongfully download movies. It is naive to think that the copyright trolls are gone for good. Soon they will reemerge with more carefully thought out lawsuits against more plausible defendants. Just this past two weeks, the owners of the movie, Dallas Buyer’s Club have initiated numerous lawsuits in the Northern District of Illinois against those who allegedly wrongfully downloaded the movie. Only time will tell if the plaintiffs in that case are correct.

Edward X. Clinton, Jr.

Illinois Court Rejects Invasion of Privacy Claim Against Johnson & Bell

This case is captioned Merdelin Johnson v. Johnson and Bell, Ltd., and Target Corporation, Robert Burke and Jennifer Rose, 2014 IL. App (1st) 122677.

Johnson filed a personal injury lawsuit against Target corporation. Later she found that Target and its lawyers had attached documents to the final pretrial order that included her “social security number, date of birth, financial information, medical information and references to ‘G.J.’, a minor. She filed a sanctions motion in the federal case on the basis that Target had filed the documents in the public federal computer filing system and that Target had violated the Court’s rules that personal information be redacted from filed pleadings. The federal court denied the request for sanctions but required Target to redact the documents containing the personal information.  Plaintiff filed a similar motion before the Seventh Circuit, which was also granted.

After the federal litigation had concluded, Johnson filed a complaint against Target and the lawyers for invasion of privacy and other torts. The defendants moved to dismiss. The trial court dismissed the complaint pursuant to Section 2-619 of the Illinois Code of Civil Procedure on the basis of the absolute litigation privilege, res judicata and collateral estoppel. 

The Appellate Court affirmed on the basis of the absolute litigation privilege. That privilege holds that “An attorney is absolutely privileged to publish defamatory matter concerning another in communications preliminary to a proposed judicial proceeding, or in the institution of, or during the course and as a part of, a judicial proceeding in which he proceeds as counsel, if he has some relation to the proceeding. The Appellate Court found that the absolute privilege applies to invasion of privacy lawsuits as well. Furthermore, the Appellate Court agreed that the absolute litigation privilege applied also to the other causes of action, such as negligent infliction of emotional distress.

The Appellate Court also noted that “there is no civil cause of action for misconduct in prior litigation.” ¶19 (quoting Harris Trust and Savings Bank v. Phillips, 154 Ill. App. 3d 574, 585 (1987). In other words, the plaintiff was required to litigate this issue in the federal case, not in another lawsuit.  The opinion distinguishes Kurczaba v. Pollock, 318 Ill. App. 3d 686 (2000), which held that the absolute litigation privilege did not apply where a party to litigation sent the complaint to third parties not involved in the litigation.

In sum, this case reminds us that federal sanctions litigation belongs in federal court and should not be relitigated in the state courts.

Edward X. Clinton, Jr.

www.clintonlaw.net 

Prenda Law Is Sanctioned Again – This Time By Judge Darrah

Yesterday, Judge Darrah released an opinion sanctioning Paul Duffy and Prenda Law, Inc.  Duffy and Prenda Law are well-known for filing actions against individuals (mostly men) alleging that those individuals violated copyright law by downloading pornographic movies without paying for them. A search of Prenda Law or Paul Duffy on Pacer will yield hundreds of similar lawsuits against John Doe defendants.

According to its critics, Prenda files a case and then solicits settlements from the individual defendants. The defendants, so it is claimed, are reluctant to have their names disclosed in public. They settle with Prenda, often for significant sums of money.

During the last twelve months, Prenda Law and its lawyer, Paul Duffy, have become targets of sanctions motions in various federal courts.

The latest sanction order was written by Judge Darrah in the case captioned Prenda Law, Inc. v. Paul Godfread, Alan Cooper and John Does 1-10. The case began as a defamation lawsuit filed by Prenda Law against Godfread, an attorney, and Cooper, allegedly one of his clients. In the lawsuit Prenda claimed that the men had defamed Prenda by making anonymous posts on the internet.  The case began in the Circuit Court of St. Clair County, Illinois. Godfread and Cooper removed the case to the Southern District of Illinois on the basis of diversity jurisdiction.

Duffy then filed a motion to remand alleging that an amended complaint had been filed in the State court in which Alpha Law Firm, LLC, a Minnesota company, became the plaintiff instead of Prenda. However, the amended complaint was never filed in federal court. The defendants argued that the addition of Alpha was bogus – that Alpha Law was really a sham party designed to defeat diversity jurisdiction.

Shortly thereafter, the case was transferred from the Southern District of Illinois to the Northern District of Illinois on the ground that another “virtually identical” case was pending in that district.  Judge Herndon of the Southern District of Illinois denied the motion to remand on the grounds that (a) Prenda did not obtain leave to file the Amended Complaint before it filed the Amended Complaint in the State court(Illinois law requires that a party obtain leave to amend a complaint once the other party has been served – filing an amended complaint without leave is prohibited); and (b) Prenda had allegedly lied to the clerk of the court (in the State court) that leave to amend was not necessary as no one had been served with the original complaint.

Upon transfer to the Northern District of Illinois, the case was assigned to Judge Darrah. Duffy and Prenda filed another motion to remand asserting the same arguments that had been rejected by Judge Herndon. A hearing on the motion was held and then Prenda filed a motion to withdraw the Renewed Motion to Remand.

Judge Darrah sanctioned Prenda and Paul Duffy on two grounds: (a) a violation of Section 1927 and (b) Rule 11.

Judge Darrah found that Prenda and Duffy violated Section 1927 by refiling the motion to remand after it had been rejected. Further, he found that Prenda had violated Illinois law by filing the amended complaint in the state court and that Prenda had falsely claimed to the clerk of that court that leave to amend was not necessary because no one had been served with the complaint. Judge Darrah also found that Duffy misrepresented the holding of the Southern District of Illinois.  Sanctions were warranted because Duffy and Prenda had, in bad faith, multiplied the proceedings and had continued to advocate a motion to remand that was no longer tenable. Judge Darrah also rejected Prenda’s claim that it was entitled to the safe harbor contained in Rule 11(c)(2), which gives a party 21 days to withdraw a challenged paper or pleading. The court held that the safe harbor did not apply because the motion had already been rejected by Judge Herndon in the Southern District of Illinois.

Comment: the Defendants went to a great deal of work to trace the steps taken by Prenda Law to obtain a remand of the case to state court. They were intelligent enough to obtain an affidavit of the clerk of the court of St. Clair county. That affidavit was the strongest piece of evidence that Prenda and its lawyers were not being truthful with either the federal or state court. The moral of the story here is an old one – never lie to any court personnel or judges. Once the lie is uncovered, your reputation is seriously damaged. The two federal judges, both well respected judges, clearly believed that Prenda was playing some sort of game to manufacture a remand of the case. In my opinion, Judge Darrah acted correctly in imposing sanctions for Prenda’s behavior.

Disclaimer: obviously Prenda law disputes the claims that it acted in bad faith and that it violated Rule 11. It may well seek appellate review of Judge Darrah’s order.

Fifth Circuit Allows Rule 60 Motion To Vacate Voluntary Dismissal

Music v. Church, Court of Appeals, 5th Circuit 2013 – Google Scholar.

The Fifth Circuit, with one dissent, has allowed a plaintiff to vacate a Rule 41 voluntary dismissal by using a Rule 60 motion to vacate.

Rule 41(a) allows a plaintiff to dismiss a lawsuit without prejudice. Here the plaintiffs used Rule 41(a) to accomplish that objective.

Plaintiff then brought a Rule 60 motion to vacate the judgement.

The Defendant argued that a Rule 41(a) voluntary dismissal is not a judgment, so it cannot be vacated. The Fifth Circuit held that a Rule 41(a) voluntary dismissal is a judgment and that Rule 60 can be used to vacate it. In so ruling, the Fifth Circuit joined the Fourth, Sixth and Seventh Circuits.

There does not appear to be a split in the circuits.

This procedure could be useful if the case is voluntarily dismissed pursuant to a settlement and one party does not abide by the terms of the settlement.

Edward X. Clinton, Jr.

Arthur Miller Article June 2013

Arthur Miller has written a new article, published in the NYU Law Journal titled, Simplified Pleading, Meaningful Days In Court, and Trials On the Merits: Reflections on the Deformation of Federal Procedure.

The article discusses the lengthy transformation of the federal courts from trial-oriented to paperwork-oriented. Miller discusses the increased focus on pleading and summary judgment. He also discusses the structures put in place to settle cases by the federal courts, designed to get rid of cases on the docket and to reduce the workload of the courts.

Miller believes that these changes have harmed plaintiffs by narrowing the law and restricting precedent. In my view, he is correct. Far more cases are dismissed or settled than go to trial. Both litigants and judges are often afraid of trials. Settlement also allows judges to avoid making hard decisions. They can’t be criticized for a settlement. They can be criticized for a decision made at a trial to admit hearsay or to reject a document as not a business record.

Edward X. Clinton, Jr.
http://www.clintonlaw.net

Edward X. Clinton, Jr.

Allegations of Grand Conspiracy Net $25,000 Sanctions Award

Erwin v. Russ, Court of Appeals, 5th Circuit 2012 – Google Scholar.

This case alleged an improbable vast conspiracy against many defendants. The district court granted the defendants $25,000 sanctions. The Fifth Circuit affirmed.

“By finding that every claim should be dismissed, identifying the multitude of superfluous defendants, and pointing to the filing of this suit in multiple district courts, the district court justified its imposition of sanctions. The Plaintiffs and their attorney opened themselves up to the possibility that they would be forced to pay attorney’s fees and sanctions by filing frivolous claims against parties only tangentially related to the alleged conspiracy. The district court did not abuse its discretion in awarding $25,000 in fees and sanctions.”

Edward X. Clinton, Jr.

www.clintonlaw.net