Tru Filth bittorrent lawsuit trashed for out-of-state defendants.

As we wrote just four days ago, Ira Siegel’s On the Cheap, LLC dba Tru Filth, LLC v. Does 1-5011 case (Case No. 3:10-cv-04472-BZ) in the US District Court for the Northern District of California has been ripped apart.  So, congratulations to the Cashman Law Firm, PLLC clients who have been severed and dismissed from the case!

Who is left in this case?  John Doe Defendants who live in the Northern District of California.  All others have been dismissed.  Now to everyone’s surprise, the judge wrote nothing about Siegel’s non-compliance with his demand to see how much his client has made on eliciting settlement payments from John Doe Defendants.  Instead, he focused on the bland arguments of jurisdiction and joinder, essentially telling Ira Siegel that he cannot sue out-of-state defendants in his court if they have not availed themselves to the jurisdiction of the California court.

One thing that I found interesting — and this might be quite boring to everyone else — Judge Zimmerman took the personal jurisdiction argument one step further than I have ever seen in any of these cases when he essentially said, “do not sue Californians WHO DO NOT LIVE IN MY DISTRICT in my district!”.  In his order, the judge told Siegel that he could have spent just a few more dollars to file THREE additional lawsuits in each of California’s federal courts — so that each of the Californian Does were sued in their home district rather than forcing them to defend a lawsuit potentially several hours away.  This delineates a new rule when suing John Doe defendants in a California court — namely that defendants need to be sued not only in a court which has personal jurisdiction over each of the defendants, but that  defendants need to be sued in the PROPER DISTRICT in which they live so that they will not be hauled into a court several hours away.  Here, the judge referred to “principals of fundamental fairness,” a concept each of us learned in law school.

Then the judge moved on to practical humor.  Simply put, how in the world would 5,000 defendants be able to show up for a hearing, (e.g., a FRCP 26(f) pretrial conference or a FRCP 16(b) case management conference) when the largest room in the courthouse only holds 200 people?!?

Last, but not least, the judge finally acknowledged (at the bottom of p.8) that when a $19.95 porn film is produced not for commercial gain, but for purposes of generating litigation and settlements, it no longer falls under the Constitutional protections of “useful arts,” but it amounts to merely a massive collection scheme.  This was never the intent of the copyright laws (…and thus…?).  I’ll leave it to you to finish the thought.

I have attached a copy of the dismissal letter below for your viewing pleasure. To those of you who have been dismissed who are not our clients, please allow me to congratulate you on your victory.

[scribd id=64117780 key=key-lgycf4ribjnhtkof19g mode=list]

Ira Siegel’s “On the Cheap” case expected to be ripped apart.

There is a lot to say about Ira Siegel’s On the Cheap, LLC dba Tru Filth, LLC v. Does 1-5011 case (Case No. 3:10-cv-04472-BZ) in the US District Court for the Northern District of California.

Ira Siegel appears to have been involved in enforcing copyright laws against internet users for some time now — his picture can be found among the other plaintiff attorneys in the various bittorrent cases (here). If you look him up online, you’ll probably read about DMCA notices he has sent to various internet users over the years saying, “we see you have downloaded XYZ video. Pay us $900 or else we might sue you.” This is what he has been up to while other copyright attorneys [perhaps unbeknownst to him] (such as John Steele, Nicholas Kurtz of Dunalp Grubb & Weaver, etc.) started suing people asking for $2,900 [these days, they are asking for amounts around $3,400].

I suppose the problem for Ira is that he did come late to filing these bittorrent cases, and by the time he started suing people in the California courts, attorneys such as John Steele, Gill Sperlein and others have already come and gone, and judges were already aware of these cases, and the problems inherent in them. Thus, as a result, it only makes sense that he is getting the brunt of the judges’ hostile inquiries (precipitated by the previous severed and dismissed cases). In my opinion it is no surprise that Siegel is facing various dismissals of his cases coupled with orders to show cause, along with the usual inquiries as to how he could possibly sue various Does in one lawsuit when they have absolutely nothing to do with one another.

To make all of Siegel’s cases more difficult for him (e.g., Evasive Angles, New Sensations, Patrick Collins, etc.), we are thankful that the EFF has interfered in this case to instigate a dismissal. On 8/18, EFF filed an amicus brief asking the court to take judicial notice of (and thus, to adhere to) all of the cases that have been dismissed because plaintiffs sued John Doe Defendants in the wrong courts.

That being said, even before EFF got involved, Judge Bernard Zimmerman already sensed there was something terribly wrong with these bittorrent cases and on 6/24/2011, he issued an “Order to Show Cause” why this case should not be dismissed. Siegel responded, but apparently he was not convinced. Then, on 8/24/2011, Judge Zimmerman held a hearing on his order where Stewart Keller brilliantly live-tweeted (see his twitter feed which was re-posted here). As a result of the hearing, the judge asked Siegel some pretty specific questions and ordered him to answer questions regarding his tactics (including settlement data) which would have been a first in uncovering the activities taken by these bittorrent plaintiff attorneys.

In the meantime, Sophisticated Jane Doe (a former defendant in one of Gill Sperlein’s Io Group, Inc. cases) did a write-up on Ira Siegel which caught his attention (see here).  To everyone’s surprise, instead of submitting the required response on 8/30/2011 as the judge ordered, Siegel missed his deadline.

Today, 9/1/2011, I saw that he filed a response in which did not answer the judge’s pointed questions. Instead, he focused his response on attacking Sophisticated Jane Doe’s articles, and his response as a whole made no attempt to comply with the judge’s order and the content he was instructed to disclose. In addition, Siegel (perhaps correctly) applied the Federal Rules of Evidence (“F.R.E.”) § 408 to shield the court from learning how much he has collected thus far in settlements (remember, for a time, he was asking for $1,900; in his current settlement demand / “scare” letters, he is asking for $2,500). [As a mere side note, the one thing that Siegel might have missed is that even though he is correct that even though F.R.E. § 408 prohibits settlement negotiations from being admitted as evidence, most attorneys know that whenever evidence is prohibited from being admitted as evidence for one reason, that same information may be admitted into evidence for another reason.]

The question I keep asking myself is 1) was the late submission of a reply a purposeful attempt by Ira Siegel to give Judge Zimmerman a pretext to dismiss the case on grounds such as failing to properly respond? And, 2) would Siegel be willing to throw this case and risk it being dismissed in order to shield from the court how much money his client has made from settlements?

In sum, there is a lot that is going on in these cases, and some days it feels more like drama, deception, and posturing rather than discussing the case on its merits. Judge Zimmerman appears to be trying to remedy this.  While we will now wait and see if and how Judge Zimmerman responds to what he will no doubt see as blatant disregard to his order, I expect that Siegel’s latest move will result in a dismissal of his case. Perhaps it will even create some ripples in his other cases as well.

What to do about these smaller Doe bittorrent cases?

The bittorrent cases are speeding up, both in number of cases filed, and in the issues relating to the cases. Judges are smartening up to what is going on, and I am seeing the smaller “Does 1-23” cases ripped to shreds in the courts. But, because they are so small, the activities in each case are falling below the radar.

These smaller cases are now filed in the multiple courts across the country — the correct courts — with the John Doe Defendants often living in the states in which they are sued. Thus, there are no more motion to quash issues, and there are no more “wrong jurisdiction” arguments.

However, while NEARLY ALL the smaller lawsuits still have “improper joinder” issues (meaning, suing Does together in the same lawsuit who did not participate in the same swarm; thus, they did not take part in the same transaction at the same time), THE CASES ARE SIMPLY NOT GOING TO TRIAL and thus defendants are not getting the chance to contest improper joinder.

The problem with these smaller cases is that 1) the settlement amounts are elevated, and 2) the risk of being named as a defendant goes through the roof because all that is required to name defendants in these smaller cases is that the plaintiff merely needs to amend the complaint against a particular Doe (thus the case will change from Patrick Collins, Inc. v. Does 1-30 to Patrick Collins v. “Elliot Hendel” and Does 1-29 [this name is merely fictitious]), and then someone comes knocking at Elliot’s home and serves him a copy of the complaint. At that point if he has not already done so [and he should have hired an attorney immediately upon having notice from his ISP that he was one of the Does in this case], he has to hire an attorney to respond within 20 days with his answer and his counterclaims, or he will default (which means the court can enter a default judgment against him for the full $150,000).

However, the BIG SECRET is that for the most part, these defendants do NOT get named as defendants, and they remain anonymous as far as what is visible from the court’s eyes. Instead, the plaintiff attorneys scare the b’jeebies out of them and cause them in some cases to sign [in many cases] an “I’m guilty, I’m sorry, I’ll never do it again” settlement agreement. The end result is that they end up paying significantly more than they would have if they merely called an attorney and had that attorney negotiate on their behalf. To make matters worse, defendants do not realize that there are really three-tiers of settlement prices (not two) — 1) the plaintiff attorney’s asking price (the “pay us $X by this date or else we’ll name you as a defendant in this case” amount), 2) defendant-negotiated price, and 3) attorney-negotiated price.

When the defendant tries to negotiate his settlement on his own, the likelihood is that he will probably say something incriminating about his case. (For example, not knowing the case law, he may say, “it wasn’t me; it was probably my son — he uses the internet all the time; I keep telling him not to watch that porn,” or “I let my neighbor / son / guest / roommate use my internet,” or “I didn’t realize it was illegal to download — I thought it was only illegal to upload!” etc.) The result is that the plaintiff says, “thank you for telling me you are guilty; the offer is now off the table and I will see you in court <click>,” only to call back shortly afterwards and, in the graces of his heart, he will offer a new settlement amount which is nearly double the asking price of the original settlement amount.

It is not only important to have an attorney negotiate your settlement amount 1) because he can, and 2) he won’t incriminate you while you would likely incriminate yourself, but also, the attorney knows the case law [which is not so obvious], and he knows what to put into a settlement agreement so that the settling defendant does not later get sued for the same claim, attorney fees, etc. It kills me to see so many people turn around and try to settle on their own without reading what they are agreeing to. What burns me more is when attorneys don’t read the contracts they have their clients agree to.

…In short, the plaintiff attorney mops up the floor with the defendants, and many of the defendants (if not most of them) turn over and lay dead while they capitulate and settle their cases. Had they lawyered-up, they would have known how to protect themselves. Better yet, their lawyer would have stepped in their shoes and the plaintiff attorneys would not have even been allowed to contact the defendants in the first place. No letters, no scare tactics; no threats.

Everything being said, one thing that most don’t even bother to find out is who exactly their plaintiff attorneys are. In more cases than not, the plaintiff attorney is merely a guy in a room with a laptop and a phone. Sometimes there is a second lawyer guy in the room making phone calls scaring the defendants into settling — a two-man show. …Do you really think this one or two-man show actually has the ability to sue more than just a few defendants, and if you defendants lawyered-up, do you think the plaintiff attorneys would have the time to name each and every one of you? AND if they named each and every one of you (which is literally impossible because to serve each one of you with service of process would be nearly impossible to track and there are bound to be significant errors), do you think they would have time to respond to each and every one our discovery requests?

As your attorney, when I defend you, I have a duty to properly protect your interests. That means that us attorneys must establish evidence that calls into question their so-called experts’ methods in collecting IP addresses (see here for just a taste). We need to call into question their methods of suing multiple Does in one lawsuit. We need to fight them procedurally with motions to dismiss, motions for summary judgement, and in some cases, motions for sanctions.

Do you think that the one-man show attorney and their underlying plaintiff (too often, the porn production company) can handle the hours of deposition time that EACH OF YOU DEFENDANT would be entitled to? What about their so-called experts? Do you think they have the time to answer all our in-person depositions for each defendant? What about our interrogatories? What about our other discovery motions? Do you really think the one-man show — the attorney guy in the room with a laptop — has the time to spend going after each one of you when he can instead go after the unrepresented defendants who roll over and settle their cases?

To make these cases merely insulting, these plaintiff attorneys have been hiring no-name local-counsel attorneys to file their cases on their behalf (no disrespect to any of them; I understand they are doing it solely so that they can make a commission off of those who settle). As far as I understand, the local counsel often know absolutely NOTHING about these cases, but they talk a big game and then sheepishly refer you to someone else — an “in-house” negotiator, or the attorney behind the curtain — so that they can “close” the deal for them and scare you into settling. If you actually had us attorneys defend your cases rather than merely have us settle them, do you really think the BIG-8 ATTORNEYS (listed below) would have the time and the patience to babysit these local counsel when they ask for assistance after we file our own motions for discovery?

Thus, a client in these smaller Does 1-20 (or 1-50, or 1-80) cases does not need to settle, especially if they do not live in the jurisdiction in which they are sued. This is true regardless of whether the plaintiff attorney is Dunlap Grubb & Weaver (Nicholas Kurtz or Ellis Bennett), Steele Hansmeier (John Steele or Mark Lutz), Gill Sperlein, Ira Siegel, Keith Lipscomb, or even Marc Randazza.

We do know how to defend these smaller cases.

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