Prenda Law Counsel Blasted Again, Ordered to Pay $261K

Nov 29, 2013 1:30 PM PST

CHICAGO — Prenda Law was handed another stinging order when a federal judge ruled that the porn piracy law firm must pay opposing defendants $261,000 in attorneys fees within two weeks

With Wednesday's order, Prenda Law counsel also got their fourth tongue-lashing from a federal judge over tactics used to round up porn piracy defendants and make them pay for allegations of copyright infringement.

This latest lashing involved a lawsuit by Lightspeed Media Corp. against Anthony Smith, an alleged ringleader of a hacking gang that was said to have obtained stolen passwords to break into about 40 Lightspeed porn sites.

Lightspeed counsel, Prenda Law, later made additional claims against corporate executives at AT&T and Comcast Cable Communications aided, abetted and conspired with the hacker to steal its content because they refused to comply with subpoenas and turn over subscriber data based on IP addresses.

Prenda Law counsel — John Steele, Paul Duffy and Paul Hansmeier —asked the court for injunctive relief, preventing AT&T and Comcast from participating in the alleged "criminal enterprise."

The firm, in fact, added the telecommunications executives as defendants in the suit, seeking $200,000 from all of the defendants, as well as punitive awards.

But in March, without notice, Duffy filed with the court that Lightspeed intended to drop the suit.

The motion spurred defendants into action with requests for reimbursement of attorneys fees because the suit was based on "frivolous claims."

On Wednesday, U.S. District Judge G. Patrick Murphy gave the defendants just what they asked for, agreeing with defendants that the complaint was legally  meritless  from  the  outset,  and  counsel should have known that  it  was.

Murphy handed $261,000 to the defendants after Prenda Law counsel pleaded for a reconsideration of an earlier order granting fees and costs.

Murphy ordered Lightspeed's attorneys to pay Smith $72,000, AT&T $120,000 and Comcast $69,000.

Murphy, like two other federal jurists, threw the book at the three Prenda lawyers in his opinion, saying that "Hansmeier skirted the court’s direct questions, Steele made feigned protestations, and both flat-out lied about their association with Prenda Law Inc. in the face of documentary evidence on the record in this case, and their sworn declarations in other cases."

"The court ... finds that  Duffy, Hansmeier and Steele exhibited a  serious and studied disregard for the orderly process of justice," Murphy wrote. "These men have shown a relentless willingness to lie to the court on paper and in person, despite being on notice that they were facing sanctions  in this court,  being sanctioned by other courts, and being referred to state and federal bars, the U.S. Attorney in at least two  districts, one state attorney general and the IRS."

Murphy noted in his ruling that he took judicial notice that several other federal courts found Duffy, Steele and Hansmeier to be in cahoots in a ploy to find as many porn piracy defendants as possible and coerce them into settlements.

"Most notably, Judge Otis Wright in the Central District of California found that Steele, Hansmeier, and Duffy were starving attorneys with shattered law practices who conspired to use copyright laws to plunder the citizenry,” Murphy said. Wright, is his ruling, ordered that Prenda Law pay $81,000 in sanctions.

Earlier this month, a magistrate judge ordered Prenda Law and porn copyright holder AF Holding to reimburse five defendants for settlements they paid, plus attorney's fees and costs.

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