Alleged Copyright Troll Sues Critics

March 4, 2013

By Jay Wolman

In a page out of Rakofsky vs. The Internet, it appears that one of the law firms and attorney groups frequently criticized as representing copyright trolls, Paul Duffy, John Steele, and Prenda Law, has gone on the offense against its critics.

More details here:

http://phillylawblog.wordpress.com/2013/03/03/prenda-law-john-steele-and-paul-duffy-file-suit-against-alan-cooper-his-lawyer-paul-goodfread-and-anonymous-john-does/

Here:
http://fightcopyrighttrolls.com/2013/03/04/copyright-trolls-prenda-law-paul-duffy-and-john-steele-commence-three-lawsuits-v-paul-godfread-alan-cooper-and-our-community/

and here:
http://www.techdirt.com/articles/20130303/23353022182/prenda-law-sues-critics-defamation.shtml

copies of the complaints are linked by Jordan Rushie (1st Link). I have not read the entirety of the complaints, but I believe I saw quite a few protected statements that cannot form the basis of liability. Unclear what motivated the suits, but I have a feeling the Plaintiffs will come to regret them.

Editor’s note, the views in this post are those of Mr. Wolman. No other Satyriconistas have taken a public position on this dispute.


Sunshine is the best disinfectant – the Steubenville Rape Case

December 20, 2012

The mainstream media has noticed that something is amiss in Steubenville, Ohio. (Rape Case Unfolds on Web and Splits City).

And Jezebel gives credit where it is due — to a blogger who refused to let the story die. (We Wouldn’t Know About the Steubenville Rape Case If It Wasn’t for the Blogger Who ‘Complicated’ Things).

I won’t comment beyond my earlier post on the case, because I have been brought in to help defend the blogger.


Metabolic Research v. Ferrell – Nevada Needs a Revised Anti-SLAPP Statute, but the 9th Circuit Gives us some Daylight

June 20, 2012

As a lawyer licensed in five states (MA, FL, CA, AZ, and NV) and who practices free speech law nationwide, I am in a position to comment on the relative merits of various states’ views on First Amendment principles. Among the many states where I have worked on cases, Flori-duh is the worst. Hands down.

It has no anti-SLAPP law to speak of. Its state legislation intended to deter frivolous litigation, Fla. Stat. 57.105, looks great on the books but is a “paper tiger.” While the statute was amended in 2002 to give it some real teeth, the state judiciary generally does not apply it. As a result, Flori-duh is a hotbed of frivolous SLAPP litigation. Why not? No downside to filing a garbage SLAPP suit. No prevailing party fees. No quick dismissal. No sanctions really available. What does a would-be SLAPPer or his attorney have to lose? Nothing.

If Nevada does not update its anemic anti-SLAPP law, it bears the risk of becoming the Florida of the West — at least with respect to frivolous SLAPP litigation. That risk is laid bare for all to see in the recent case of Metabolic Research v. Ferrell, despite the fact that the 9th Circuit seems to have tossed in a prescription to cure some of the symptoms of the Nevada Anti-SLAPP statute’s lack of a fully developed spine.

What Happened?

On October 20, 2009, Scott J. Ferrell, an attorney practicing law in Orange County California, sent “demand letters” to Metabolic Research, Inc. (“Metabolic”), at its address in Las Vegas, Nevada, and to General Nutrition Centers, Inc. (“GNC”), at its address in Pittsburgh, Pennsylvania. The demand letters purported to notify the recipients that they had violated California Civil Code §§ 1750-1756, the California Consumer Legal Remedies Act (“CLRA”), by falsely advertising the properties and potential benefits of a product named Stemulite, which they marketed as a natural fitness supplement. Ferrell represented that he was acting on behalf of Michael Campos, Thomas Hess, and Sarah Jordan, all of whom he alleged purchased Stemulite in California, in reliance on the supposed false advertising, and had not received the purported benefits. (Op. at 7027)

Ferrell demanded that Metabolic and GNC “cease their false advertising of Stemulite” (Op. at 7027), identify purchasers of the substance, provide refunds to them all, disgorge profits from Stemulite sales, and implement a corrective advertising campaign. A failure to do so would be met with a lawsuit.

Metabolic did not cave. Instead, they filed a lawsuit for extortion against Ferrell and the putative class he claimed to represent. The suit also included claims for “conspiracy to engage in racketeering, civil extortion, tortious interference with contract, and tortious interference with prospective economic relations, i.e., interfering with the agreement between Metabolic and GNC. Metabolic sought declaratory relief and punitive damages.” (Op. at 7028). Ferrell sought to have the case dismissed under the Nevada Anti-SLAPP statute, Nev. Rev. Stat. § 41.660. However, the motion was doubly-useless.

The Law

Judge Mahan of the District of Nevada found that Nevada’s Anti-SLAPP statute only covers communications made “directly to a governmental agency.” That seems to be a bit narrow of a reading of the statute, which is reproduced below:

NRS 41.660  Attorney General or chief legal officer of political subdivision may defend or provide support to person sued for engaging in right to petition; special counsel; filing special motion to dismiss; stay of discovery; adjudication upon merits.
     1.  If an action is brought against a person based upon a good faith communication in furtherance of the right to petition:
     (a) The person against whom the action is brought may file a special motion to dismiss; and
     (b) The Attorney General or the chief legal officer or attorney of a political subdivision of this State may defend or otherwise support the person against whom the action is brought. If the Attorney General or the chief legal officer or attorney of a political subdivision has a conflict of interest in, or is otherwise disqualified from, defending or otherwise supporting the person, the Attorney General or the chief legal officer or attorney of a political subdivision may employ special counsel to defend or otherwise support the person.
     2.  A special motion to dismiss must be filed within 60 days after service of the complaint, which period may be extended by the court for good cause shown.
     3.  If a special motion to dismiss is filed pursuant to subsection 2, the court shall:
     (a) Treat the motion as a motion for summary judgment;
     (b) Stay discovery pending:
           (1) A ruling by the court on the motion; and
           (2) The disposition of any appeal from the ruling on the motion; and
     (c) Rule on the motion within 30 days after the motion is filed.
     4.  If the court dismisses the action pursuant to a special motion to dismiss filed pursuant to subsection 2, the dismissal operates as an adjudication upon the merits.
     (Added to NRS by 1993, 2848; A 1997, 1365, 2593)

The Statute itself is (I think) already too textually narrow, in that it could be interpreted to protect the right to petition, and not the right to free speech (like California, Oregon, Texas, Washington, and the District of Columbia’s Anti-SLAPP statutes). However, it seems that Judge Mahan trimmed it even more by reading a restriction into the statute that is just not there.

The action was brought against Ferrell based upon a “good faith communication in furtherance of the right to petition.” I see nothing in the plain language of the statute that says your “right to petition” is only activated if you are speaking directly to a government official. Mr. Ferrell felt the same way, so he appealed to the 9th Circuit, which showed us yet another grave weakness in the Nevada Anti-SLAPP statute — it does not provide for an interlocutory appeal.

The 9th Circuit compared California’s Anti-SLAPP statute to Oregon’s by looking at a pair of 9th Circuit decisions. In Englert v. MacDonell, 551 F.3d 1099, 1106-07 (9th Cir. 2009), the 9th Circuit denied an appeal of an anti-SLAPP motion as a collateral order, because denials of a motion to strike under Oregon’s Anti-SLAPP statute were not immediately appealable. The Oregon statute only provided from immunity from liability in a SLAPP. It did not provide for immunity from suit. (Oregon has since fixed this defect in its statute). On the other hand, the 9th recognized in Batzel v. Smith, 333 F.3d 1018, 1025 (9th Cir. 2003) denials of Anti-SLAPP motions under California’s statute are immediately appealable.

In Batzel, we held that the denial of a motion to strike brought pursuant to California’s anti-SLAPP statute satisfied the collateral order doctrine because the purpose of the California law was to provide citizens with a substantive immunity from suit. 333 F.3d at 1025-26. In reaching this conclusion, the court relied upon the fact that California’s law provided for immediate appeal in state court and legislative history demonstrating that “lawmakers wanted to protect speakers from the trial itself rather than merely from liability.” Id. at 1025.

In contrast, Englert held that Oregon’s failure to provide for an immediate appeal at that time indicated its legislature’s belief that the normal appeal process was adequate to vindicate the anti-SLAPP right, which it in turn described as “a right to have the legal sufficiency of the evidence underlying the complaint reviewed by a nisi prius judge before a defendant is required to undergo the burden and expense of a trial.” 551 F.3d at 1105. The Englert court explained that “[i]t would simply be anomalous to permit an appeal from an order denying a motion to strike when Oregon was satisfied that the values underlying the remedy could be sufficiently protected by a trial judge’s initial review of the motion, followed by appellate review only after a final judgment in favor of the plaintiff.” Id. at 1105-06.

(Op. at 7033)

While discussing the differences between the two kinds of SLAPP statutes, the 9th Circuit hinted that Mahan’s decision might have been flawed, while shoring up the position that it was improper to review the appeal at this time.

We turn first to the major distinguishing feature between the Oregon and California laws—the right to an immediate appeal in state court—and find that Nevada’s antiSLAPP statute is more like Oregon’s at the time we decided Englert. In Nevada, “where no statutory authority to appeal is granted, no right exists.” Taylor Constr. Co. v. Hilton Hotels Corp., 678 P.2d 1152, 1153 (Nev. 1984). Nevada’s antiSLAPP statute does not expressly provide for an immediate right to appeal. It does state, however, that a court shall stay discovery pending “the disposition of any appeal from the ruling on the [special motion to dismiss].” Nev. Rev. Stat. § 41.660(3)(b)(2). We are unpersuaded that the statute’s generalized reference to an appeal implicitly, or otherwise, confers an immediate right to appeal. Nevada based its antiSLAPP statute on California’s law, and the legislature could have mirrored California’s unequivocal language concerning an immediate right to appeal had it intended to furnish one. See John, 219 P.3d at 1281 (“Nevada’s anti-SLAPP statute was enacted in 1993, shortly after California adopted its statute, and both statutes are similar in purpose and language.”). (Op. at 7034-35)

The Legal Satyricon previously noted another case that cited John and held that the Nevada and California statutes should be read similarly, at least in substance. This lends further credence to the argument that the District Court did read NRS 41.660 too narrowly. But, unfortunately for Mr. Ferrell, the Metabolic Research case is not about the substance of the statutes, but how they function procedurally.

Further persuading us that the Nevada legislature did not intend for its anti-SLAPP law to function as an immunity from suit is the statute’s definition of the anti-SLAPP right. Nevada’s law provides that “[a] person who engages in a good faith communication in furtherance of the right to petition is immune from civil liability for claims based upon the communication.” Nev. Rev. Stat. § 41.650 (emphasis added). We must presume the legislature selected its words with purpose, and immunity from “civil liability” is unquestionably different than immunity from “suit” or “trial.” Liberal, 632 F.3d at 1074 (“A denial of summary judgment is immediately appealable when the immunity is an immunity from suit, but not when it is a mere defense to liability.”). (Op. at 7036

The Court then went on to list the ways that Ferrell, and other similarly-situated defendants, might find justice. The 9th noted that despite the fact that Ferrell couldn’t appeal at this point, he still had a potential award of fees and costs later on. This might be true, but it is a small comfort if he can’t afford to litigate the matter for that long. The 9th then reminded us of the existence of Rule 11, the laughable sanctions mechanism in the Federal Rules. Rule 11 sanctions against even the most outrageous filings are slightly more common than rainbow sherbet flying out of a unicorn’s ass.

The 9th then threw in some very interesting dicta, in which it seemed to lay out an instruction manual for litigants (at least in Federal Court) who seek review of lower court decisions, when an Anti-SLAPP statute fails to provide a right to an interlocutory appeal.

First, a litigant in federal court may ask the district court to certify and the court of appeals to accept an interlocutory appeal pursuant to 28 U.S.C. § 1292(b) as involving controlling questions of law the resolution of which will speed the termination of the litigation. Secondly, in truly extraordinary cases, a writ of mandamus is available. 28 U.S.C. § 1651(a) (the All Writs Act codifying the common law writ of mandamus); Cheney v. U.S. Dist. Court for the Dist. of Columbia, 542 U.S. 367, 377 (2004). We have had recourse to the writ of mandamus to protect first amendment rights where we feared that the Mohawk decision foreclosed collateral order appeals. See Perry v. Schwarzenegger, 591 F.3d 1147, 1154-56 (9th Cir. 2010). Ferrell did not seek to avail himself of 28 U.S.C. § 1292(b), nor did he seek mandamus in this Court. We, therefore, express no opinion on how we might have decided such an appeal or application had one been brought. We conclude that an immediate appeal is not necessary to protect the rights in Nevada Revised Statute § 41.660. (Op. at 7037-38).

We should thank the 9th Circuit for this, because it seems to be almost inviting federal litigants to use these alternative mechanisms to get true Anti-SLAPP protection, even if the Nevada legislature neglects to fortify the statute. Of course, this is of little comfort to a Nevada SLAPP victim if the plaintiff doesn’t provide an opportunity to remove the matter to federal court.


Iowa bar faces discrimination claim over bar-dancing policy

April 30, 2012

By J. DeVoy

An admittedly portly University of Iowa undergrad, Jordan Ramos, is accusing a local nightclub for refusing to let her dance on the bar.  Simultaneously, if she had danced on the bar, fallen and been injured – she would almost certainly have sued the bar anyway.  Either way, it is a frivolous claim.  And, hopefully, a victory for the establishment, the Union Bar, on a motion to dismiss in either circumstance.

Jordan Ramos was denied the opportunity to stand atop a bar platform and dance for onlookers.  In Las Vegas, nightclubs hire go-go dancers for this specific purpose.  In Iowa City, the bars apparently take what they can get and even allow walk-ons.  Ramos was denied the opportunity to scale the bar and dance atop it in March.  When she returned to the bar in April, she once again was denied access to a dancing platform:

“[A bouncer] said, ‘You’re not pretty enough and you’re pregnant.’ I said, ‘I can tell you with 100 percent certainty that I am not pregnant.’ He then looked at my stomach and said, ‘You obviously are.’ They knew I was not pregnant; it was there way of calling me fat without having to actually say it,” Ramos said. (source)

Surely no woman inside a nightclub has ever lied; nor has pregnancy ever been the subject of untruth.

I do wonder if Ramos and any lawyer pursuing the claim will be sanctioned by a court if it is filed.  The story raises a serious question as to whether she knows she had no claim against the bar:

Ramos approached the Human Rights Commission in Iowa City, but the organization told her they could not do an investigation because size discrimination is not illegal by law, Ramos said. (source)

If Ramos tells her attorney about the commission’s finding and he/she was aware of it at the time of filing suit, there’s a good argument for sanctions against Ramos and even her attorney.  Even if filed pro se, Ramos’ action will force the bar to mount a defense and research why weight discrimination by a private company (even one offering a place of public accommodation) is not unlawful in Iowa – a few thousand dollars that can and should stay in the venue’s hands.

Who emboldened Ramos to do this stupid shit?  Certainly not a lawyer, who like the Human Rights Commission would have done some research and seen that Iowa law does not outlaw size discrimination.  No, it was a social work professor – someone who, true to the maxim, could not do social work, and thus opted to teach it instead:

A social work professor at the University of Iowa told Ramos to return to the bar.

“She told my friends and I to go back and see if the same thing happens and to try to get them to say aloud ‘I am not allowing you up because of your size,’” Ramos said. (source)

Sorry, dipshit; being “othered” is not a cause of action.  This subthread to the story is another vignette justifying my intense dislike for social workers along with teachers as the scylla and charybdis of useless public sector jobs, leading hundreds of millions of dollars in public funds to a useless demise.

Every few years one of these disputes arise, and yet “face policies” persist.  There are several reasons for this, the first being that state laws cannot reasonably adapt to subjective categories of discrimination such as “size” the way they can to objective standards like race, national origin and religion – making it difficult, if not impossible, to outlaw these other forms of discrimination.  Additionally, they work.  Why do people wait for hours and pay hundreds of dollars to get into Marquee, XS or Haze?  Is it because they’re letting John and Jane Q Public in the door with flip-flops, unflattering clothing and an unseemly gait? Hint: No.  Keeping out average people is a way to maintain exclusivity and charge supracompetitive prices for an utterly forgettable experience, converting admission to the venue into intangible social capital.

Unfortunately, the outcome of drunken people dancing on elevated surfaces normally is injury.  While the bar may or may not be liable for the injuries dancers suffer from their activities, it’s easier to avoid litigation that will cost far more than this motion to dismiss to find out the contours of this responsibility.  There are a number of facts that point in both directions, such as bouncers regulating who may or may not dance, as well as the provision of flat surfaces amenable to dancing (and the accepted practice of patrons doing so).  While an imperfect policy, the bouncers did what they could: Screening for people who appeared to have the litheness and balance to dance without causing themselves injury.

Under California law, the venue’s actions arguably would be expressive conduct – the setting, enforcement and expression of a policy put in place for patron safety and bar profitability under Cal. Code of Civil Procedure § 425.16.  A suit based on Ramos’ claims could face dismissal under California’s anti-SLAPP statute, and leave the aggrieved student to pay the bar’s legal fees – as she should.  Iowa, however, has no anti-SLAPP statute at all.

As for Ms. Ramos, perhaps she should go to the gym before the courthouse.  The world is not a nice place, and not every ugly duckling matures into a graceful swan.  I do not complain about “discrimination” at the hands of bodybuilding competitions because I’d be laughed off the stage in spite of the time I spend in the gym.  Her disappointment in life – and I believe there will be lots of it, given her seemingly hypersensitive leap to litigation in this instance – is not actionable.

EDIT: Re-reading the articles, I see there is no claim that a lawsuit has been filed, no reference to a case, and no docket number provided.  Apparently there is no active litigation.  So – why is this news?


Nevada: want in on the tech bubble 2.0? Get a better anti-SLAPP statute.

April 13, 2012

By J. DeVoy

Earlier this week, Facebook announced its $1B acquisition of hipster staple Instagram.  Everywhere you look, social media companies based on seemingly fragile social momentum are receiving gigantic valuations and making initial public offerings.  Zynga has $8.8 billion in market capitalization – it’s best known for FarmVille, brogrammers and abusing trademark law.  Groupon has lost more money than many firms will ever see, yet IPO’ed, reifying billions of dollars of wealth for shareholders.

Yet California does not have a monopoly on tech.  In fact, California is absurdly expensive.  Nevada, in contrast, is dirt cheap.  And, based on the success of firms like SirsiDynix and Adobe in Utah – seriously, Utah – it’s clear that Silicon Valley does not have a stranglehold on programming and tech manpower.  For all but the most elite developers, young workers will go where the work is – and even then, they will pursue the most challenging opportunities.

But this raises the question of why, exactly all of these wildly successful social media companies started in California.  What is it about California?  What is so profoundly different about the state that gives it a monopoly over these companies?

Maybe it’s one of the country’s best, oldest and most litigated anti-SLAPP statutes?

I know how much we like to wax poetic about the importance of 47 U.S.C. § 230 on this blog, and write about how liberating compliance with the DMCA is.  But the reality is that if some unethical shithead wants to try to grab some cash from your pocket, he/she can and will sue you on utterly frivolous grounds – and if it happens in a state without a good anti-SLAPP statute, and especially a hellhole like Florida or New York, you’re going to just have to grin and eat the costs of proving, for the eightieth time, that the Roommates.com case and its § 230-vitiating FHA violations are in fact an extreme outlier.

That is, unless you live in a state like California with a kick-ass anti-SLAPP statute.  Among others, I would include Washington, Oregon and Texas on the list of states with a good anti-SLAPP statute.  I think, too, that Nevada can and  should be one of these states.

There’s some really good stuff in Nevada’s anti-SLAPP statute.  In October 2011, I wrote about the following provision, which gives a slight testosterone injection to California’s fee-shifting regime:

 Reasonable attorneys’ fees are awarded independent of the Court’s discretion, and the prevailing anti-SLAPP movant has his own cause of action for compensatory damages, punitive damages, and attorney’s fees.  (source)

However, this is all meaningless if it applies only to expression made to a governmental entity.  If this statute is going to have teeth and apply to social networking services that are wrongly sued for third parties’ postings on them, the range of protected expression must be drawn more broadly.  California and Texas provide some good examples of how to define this.

While Zynga, Groupon, Facebook, Google and many others that have yet to publicly reveal their wealth are Delaware Corporations, they all do business in California – and are protected by Cal. Code of Civil Procedure 425.16.  Broad First Amendment protections.  Mandatory fee shifting for a successful motion.  Washington and Seattle-based Avvo Inc. are shaping up to be a similar success story, and a longer post about their recent anti-SLAPP victory is forthcoming.

An anti-SLAPP statute is not the cure-all for Nevada’s drive to diversify its economy, attract new businesses and encourage diversification.  California’s (and specifically the bay area’s) success in social media is attributable to numerous covariants including an entrenched, educated and highly skilled workforce, fed by CalTech, Stanford and UC Berkeley.  Silicon Valley is also host to a surfeit of venture capital and private equity firms; needless to say Las Vegas is not.  However, flying from Las Vegas to SFO is at most a proposition of $200 and… 90 minutes?  possibly less?  This is hardly a barrier to innovation and financing.

The cynic in anyone who understands markets is that the latest tech bubble (perhaps more accurately, the social bubble) is exactly that – an inflated payout for the investors in these services.  But good for them – they got paid, and you’re reading this blog.  Who’s the idiot now?  Regardless of how absurdly overvalued some of these services seem and doubtless are, billions of dollars in paper wealth are being created – and Nevada can capture some of it by making a small but important change to an existing law.  Making Nevada a hospitable place for social media ventures will create or attract jobs to Nevada, especially economically battered and casino-reliant Southern Nevada, and enrich those companies’ employees.  Like the Canadians in the South Park episode “Canada on Strike,” Nevadans must stand up and scream at their representatives: Give us Internet money!

As a tourism mecca, Las Vegas knows a lot about getting the world’s ultra-wealthy to leave a lot of their money here.  By providing sufficient protections to new media businesses, the same dynamic can play out with the rich investing in new businesses, rather than a blackjack table.

(I have nothing against blackjack.)


Is Nevada’s Anti-SLAPP statute as weak as it seems?

March 2, 2012

Generally, Nevada’s Anti-SLAPP seems like a pansy-ass statute without much teeth. But some recent applications of NRS 41.635-70 give the Nevada version almost as much of a bite as California’s—the state regarded as having the best Anti-SLAPP statute in the country.

Last year, Clark County Court Judge Gloria Sturman dismissed a lawsuit against local real estate investors on behalf of collection agencies, applying NRS 41.660. The Defendant investors argued that the lawsuit was a SLAPP suit intended to gather information about a larger group of investors the collection agencies regularly did business with. Judge Sturman agreed, concluding that the plaintiffs failed to meet their to show the defendants had engaged in wrong-doing, and that the defendants’ communications with the Nevada Financial Institutions Division regarding the plaintiffs’ practices were “good faith communications in furtherance of the right to petition.”

What is most important, however, is the case that Judge Sturman’s order cites to. A few years ago, the Nevada Supreme Court had a very important case for NV’s Anti-SLAPP statutes: John v. Douglas County School Disctrict, 219 P.3d 1276 (2009). The appellant in the case was a school security officer who first faced suspension for unprofessional conduct and sexual harassment. The appellant filed a discrimination lawsuit against the school district respondent. About a year later, the school district found out that the appellant had improperly obtained confidential student records and, following an investigation, terminated him. The school district then filed a special motion to dismiss under NV’s anti-SLAPP statute. The Nevada Supreme Court upheld the district court’s dismissal, finding that the school district’s inquiry into the appellant’s record was appropriate.

The caselaw the Nevada Supreme Court turned to for its reasoning is what gives NV’s Anti-SLAPP a bit more kick. The Court states, “Nevada’s anti-SLAPP statute was enacted in 1993, shortly after California adopted its statute, and both statutes are similar in purpose and language,” and later, “When determining whether Nevada’s anti-SLAPP statute falls within this category, we consider California caselaw because California’s anti-SLAPP statute is similar in purpose and language to Nevada’s anti-SLAPP statute.”

The Court then goes on to draw parallels to California Anti-SLAPP cases, continuing to state that California’s statute is “similar in purpose and language.” California’s statute is by far the most protective in the country, so the parallels are promising for NV’s statute, which on its face seems rather weak.

Effectively, the case could help Nevada’s Anti-SLAPP law to evolve to be just as powerful as California’s— maybe it’s not such a pansy-ass statute after all.


Crystal Cox

October 28, 2011

This post has been updated: Here.