Whether sanctions against Evan Stone were appropriate.

Someone asked me to comment on Judge Godbey’s order in the Mick Haig Productions, e.K., v. Does 1-670 (Case No. 3:10-cv-1900-N) in the US District Court for the Northern District of Texas sanctioning Evan Stone $10,000 for sending subpoenas to ISPs before getting permission from the court.

As eloquently quoted on EFF.org’s Deeplinks Blog,

“To summarize the staggering chutzpah involved in this case: Stone asked the Court to authorize sending subpoenas to the ISPs. The Court said “not yet.” Stone sent the subpoenas anyway. The Court appointed the Ad Litems to argue whether Stone could send the subpoenas. Stone argued that the Court should allow him to – even though he had already done so – and eventually dismissed the case ostensibly because the Court was taking too long to make a decision. All the while, Stone was receiving identifying information and communicating with some Does, likely about settlement. The Court rarely has encountered a more textbook example of conduct deserving of sanctions.” (Order, p.12)

I actually heard about this from other plaintiff attorneys as it was happening, and I am not surprised that it happened. One thing that a plaintiff attorney needs to be when suing thousands of defendants each in dozens of cases is ORGANIZED. Not only do they need to keep track of the various hearings and deadlines (this isn’t so complicated to do) to keep up the appearance that they actually intend to move forward in their cases, but remember most of these so-called “copyright trolls” are concurrently running a huge marketing campaign — the main goal of their entire marketing scheme — trying to scare people into settling for thousands of dollars under the threat of “naming” them as a defendant in their lawsuit (or in a follow-up lawsuit in the defendant’s home court).

So the judge essentially said “no” (or, “not yet”), Stone went ahead anyway and sent the subpoenas, and then apparently sent settlement letters to the Does as the ISPs complied with the subpoenas. Really in my opinion this sounds like mindless disorganization rather than malice. This is what happens when an attorney tries to sue too many people at the same time; they simply get sloppy. As we know, many of these plaintiff attorney firms are merely “a guy in a room,” and Evan Stone has been reported as being “a guy in two rooms, one empty, one full of files.” (See Dallas Observer’s Evan Stone’s Battle Against Porn Pirates article, 4/21/2011). Am I surprised he slipped up? Not really. Was this really an intentional act? Maybe.

Now as far as the sanctions goes, I am unimpressed by the $10,000 sanction amount. This seems like pennies to an attorney who is bringing in $2,500 per settlement at what he claims is a 45% settlement rate. (see Order, footnote 7) Ten thousand dollars is merely the equivalent of FOUR settlements. With the hundreds of letters that went out, even if he is lying about the settlement rate, don’t you think he made at MANY TIMES that amount? Think about it. There is nothing punitive about this order.

Assume Evan Stone merely sent out 100 letters and had only a 20% success rate at $2,500 per settlement. This alone amounts to $50,000. The Mick Haig Productions case had *670* defendants. In short, while $10,000 may be a lot to a starving attorney, my opinion is that the sanctions wouldn’t even cover the IRS’ federal income taxes Mick Haig Productions would pay on the settlements they received from this misstep.

So again, I must shrug my shoulders. This was going to happen eventually to someone. It makes sense that it happened to Evan Stone. The other plaintiff attorneys don’t even like him, and they try to distinguish themselves from him. Maybe next time this happens, the sanctions will be $100,000 rather than $10,000. As far as I am concerned, $10,000 will not serve to be any deterrence at all. Not to Evan Stone; not to any of the other plaintiff attorneys who are laughing at him now as we speak.