KLINEDINST PC 201 West Broapway, Sutte 600 SAN DIEGO, CALIFORNIA 92101

Case 2:112-cv-08333-ODW-JC Document 120 Filed 04/18/13 Pagelof9 Page ID #:2812

—

Heather L. Rosing, Bar No. 183986 David M. Majchrzak, Bar No. 220860

2 || Philip W. Vineyard, Bar No. 233628 KLINEDINST PC 3 || 501 West Broadway, Suite ‘ied San Diego, California 9210 4 || (619) 23 -8131/FAX (619) 38. 8707 hrosing@klinedinstlaw.com 5 || dmajchrzak@klinedinstlaw.com pvineyar iinedinstiaw.com 6 Sey ae UEEY A for | 7 || PAUL GELA VAN DEN HEMEL, and PRENDA LAW, INC. 8 ; UNITED STATES DISTRICT COURT ” CENTRAL DISTRICT OF CALIFORNIA 11 | | INGENUITY 13 LLC, Case No. 2:12-cv-8333-ODW(JCx) 12 Plaintiff, PAUL DUFFY, ANGELA VAN DEN 13 HEMEL, AND PRENDA LAW, INC.’S V. RESPONSE TO PUTATIVE JOHN DOE'S 14 ~ REPLY TO BRIEFS JOHN DOE, ID Defendant. Judge: Hon. Otis D. Wright, I 16 Magistrate Judge: Hon. Jacqueline Chooljian i? Courtroom: 11 Date: April 2, 2013 18 Time: 10:00 A.M. 19 Complaint Filed: es 27, 2012 Trial Date: None set 20 2] I. pp) INTRODUCTION 23 The reply of Morgan Pietz' is improper for a number of reasons. Some have

24 || been articulated in the opposition to its filing and will not be repeated here. Others 25 || concern the vast evidentiary issues raised by his assault on John Steele, and will be

26 || left for Steele to respond to. But in relation to Paul Duffy, Angela Van Den Hemel,

28 (vich i is nominally filed on behalf of an unidentified fictitiously named

defendant PAUL tee foeree ba papas » AND os ad INC.’S

ON CLIN x ,

Case 2112-cv-08333-ODW-JC Document120 Filed 04/18/13 Page 2of9 Page ID #:2813

KLINEDINST PC

501 West BRoabway, Sutte 600 SAN DIEGO, CALIFORNIA 92101

CoC OU FF NO NH HB WH

Land

nn SF W NY |§ COD CO MH I HD wT

Nh —]

and Prenda Law, Inc., the reply inappropriately suggests (1) that they “waited” too long to present documentary evidence when, in reality, they did so at the first opportunity afforded them, (2) that they should be sanctioned for an outside firm’s investigation techniques that even Pietz’s expert could not say either fell below the standard of care or led to inaccurate conclusions, (3) that Pietz should somehow be entitled to recover attorney fees from Duffy, Van Den Hemel, and/or Prenda, even though no such motion is pending against them, and he has been voluntarily serving as a biased prosecutor in proceedings initiated not by him, but rather by the court, after all actions had been dismissed, and (4) that the court may draw inferences within sanctions proceedings from a non-party’s invocation of the Fifth Amendment. Il. | |

DUFFY, VAN DEN HEMEL, AND PRENDA HAD NO REASONABLE OPPORTUNITY TO SUBMIT DOCUMENTARY EVIDENCE TO THE

COURT BEFORE THEIR APRIL 8, 2013 BRIEF

Pietz devotes a portion of his brief to complaining that he did not receive a

copy of Brent Berry’s declaration before April 8, 2013. But his complaint fails to answer two important questions. Why does it matter to his client? And what reasonable opportunity did Duffy, Van Den Hemel, and Prenda have to present it earlier?

As discussed in detail in earlier briefing, no assignment is at issue in the one Ingenuity 13 case involved in this proceeding in which Pietz represented someone. And that one action was dismissed on January 28, 2013. Thus, there would not be any reason for any communications between Pietz and Duffy, Van Den Hemel, and/or Prenda regarding Alan Cooper’s comments or Berry’s comments about the

a4 2 recent decline in Cooper’s mental state.

* Pietz also questions how Cooper could have signed assignments in the past when he is now suffering from mental problems that may impact his ability to testify ae | RESPONSE TO PUTATIVE JOHN DOE'S REPLY TO BRIEFS BY PRENDA, INC., PAUL DUFFY. PAUL HANSMEIER, AND JOHN STEELE

Case 2]12-cv-08333-ODW-JC Document 120 Filed 04/18/13 Page 3of9 Page ID #:2814

KLINEDINST PC

501 West Broapway, Suite 600 SAN DIEGO, CALIFORNIA 92101

Co ODO DB NO OO Be WY LPO

Provera —)

Pietz also inquires why these documents were not presented in relation to Brett Gibbs’s order to show cause hearing on March 11, 2013 or at the order to show cause hearing against Duffy, Van Den Hemel, Prenda, and several others on April 2, 2013. The answer is clearly and unambiguously reflected in the record. Duffy, Van Den Hemel, and Prenda were not parties to the March 11, 2013 proceedings. They were requested to appear as witnesses and were never called to testify.

And once the court ordered Duffy, Van Den Hemel, and Prenda to show cause why they should not be sanctioned (on March 14), it did not provide them an opportunity to submit advance briefs as it did with Gibbs. (ECF nos. 48 and 57; cf. ECF 86.) At the April 2, 2013 hearing, Heather Rosing, specially appearing for Duffy, Van Den Hemel, and Prenda, informed both Pietz and the court that she had documents to submit as evidence and legal arguments to make and could either present them there or through a brief. Without objection from Pietz, the court declined to hear from Rosing and elected to receive the arguments and evidence through a brief. The court informed all attending, “We are done here.” Apr. 2, 2013 Rep. Tr., 13:6-9. Thus, their April 8 brief—submitted pursuant to the court’s verbal approval given on April 2—was the first opportunity Duffy, Van Den Hemel, and Prenda had to submit any argument or documentary evidence.

As an aside, Pietz likewise snipes again at the physical filing of Duffy and Van Den Hemel’s ex parte application by suggesting that the court’s website is insufficient authority to provide guidance regarding the rules for filing. Rep., p. 2, fn. 2. But Pietz fails to cite any rule that contradicts this court’s own guidelines that unambiguously mandate a non-party to make its first filing via paper. Similarly, he fails to offer any theories regarding how electronic filing may be done, given that

this court’s computer system requires that all electronic filings be associated with

accurately. But the declaration of Brent Berry makes clear that there has been a change in Cooper’s personality over time. Thus, his present capacity does not necessarily reflect his past. a RESPONSE TO PUTATIVE JOHN DOE'S REPLY TO BRIEFS BY PRENDA, INC., PAUL DUFFY. PAUL HANSMEIER, AND JOHN STEELE

KLINEDINST PC 501 West Broadway, SuITe 600 SAN DIEGO, CALIFORNIA 92101

Case 2]12-cv-08333-ODW-JC Document120 Filed 04/18/13 Page 4of9 Page ID #:2815

—

parties who have already filed in the action, thereby precluding non-parties from filing their first documents electronically. III. SCHOEN’S DECLARATION FAILS TO SHOW THAT THE PRE- LITIGATION INVESTIGATION WAS INACCURATE, LET ALONE FELL BELOW THE STANDARD OF CARE

The significance in Schoen’s declaration can be summarized in one clause.

“TT ]he declarations omit information that [Schoen] believe[s] [are] material to a

determination of whether that method is reasonably accurate.” Decl. of Schoen, p.

2:13-14. In other words, even a purported expert, let alone this court, cannot reach

a ee —"

the conclusion that Peter Hansmeier’s techniques were flawed.

12 And Schoen takes that even one step further by stating that he “doles] not 13 || mean to suggest that Mr. Hansmeier is unable to gather or did not gather relevant 14 || information to support Plaintiff's allegations.” Decl. of Schoen, p. 3:10-11. That 15 || begs the question, if a third party expert cannot reach a conclusion that the

16 || investigation was insufficient, how could attorneys be imputed with knowledge 17 || that their outside expert’s methodology was so flawed that they could not

18 || reasonably rely on his results? And how could that knowledge rise to the level of 19 || culpability necessary to justify sanctions against the attorneys?

20 Schoen further opines that the nature of BitTorrent technology is to allow 21 || downloads of data out of sequence. Decl. of Schoen, § 10. Schoen suggests that, as 22 || aresult, an incomplete download may contain numerous gaps that disorient the

23 |) human viewer. /d. at § 11. But whether the download is appealing or presented as

* Schoen coyly declares that he “ha[s] heard that some BitTorrent clients could be 25 || set to prioritize downloading the beginning of the file before other parts...” to enable viewing of an incomplete file (Decl. of Schoen, § 19), but a Google search 26 || for the BitTorrent user manual provides the simple instruction an infringer can use to set such a priority. That command is “bt.prio_first_last_piece” and can be found at http://www. bittorrent.com/help/manual/appendixa0212. The manual even states 2g || it will increase the chances that a file can be previewed before download completion. -4- RESPONSE TO PUTATIVE JOHN DOE'S REPLY TO BRIEFS BY PRENDA, INC., PAUL DUFFY. PAUL HANSMEIER, AND JOHN STEELE

KLINEDINST PC 501 West BroaDway, SuITE 600 SAN DIEGO, CALIFORNIA 92101

Case 2)12-cv-08333-ODW-JC Document120 Filed 04/18/13 Page5of9 Page ID #:2816

; P

originally intended is not the standard for determining whether a copyright was

2 || infringed upon. Rather, as explained more completely in Duffy’s, Van Den

3 || Hemel’s, and Prenda’s response to the order to show cause, even a de minimis

4 || unauthorized copying of a protected work—-even when integrated with new,

5 || original work—may constitute infringement. See Newton v. Diamond, 388 F.3d

6 || 1189, 1190-1195 (9th Cir. 2003).

7 Because there is no evidence that the outside contractor investigated

8 || improperly or a legal bar to bringing claims based upon infringing even a small

9 || portion of copyrighted work, Duffy, Van Den Hemel, and Prenda should not be 10 || sanctioned for Gibbs’s decisions to name particular Doe defendants.” 11 IV. 12 THE COURT MAY NOT ISSUE SANCTIONS AGAINST DUFFY, VAN 13 DEN HEMEL, OR PRENDA THAT REQUIRE A PAYMENT TO PIETZ 14 DUE TO THE LACK OF NOTICE AND THE NATURE OF THE 15 PROCEEDINGS 16 Pietz’s reply represents the first time Duffy, Van Den Hemel, and/or Prenda 17 || have received any notice that he is seeking to recover fees against them.’ But such 18 || argument is inappropriate because, as a matter of law, Pietz cannot recover his fees 19 || against these responding parties. 20 If the court initiates Rule 11 proceedings, as it did so here, it may not award 21 || attorney fees and expenses to the other parties. Such awards are authorized only to 22 || the “movant” on a “motion.” Fed. R. Civ. P. 11(c)(4); Nuwesra v. Merrill Lynch, 23 || Fenner & Smith, Inc., 174 F.3d 87, 94-95 (2d Cir. 1999). Moreover, Rule 11 24 || provides that the “court must not impose a monetary sanction on its own, unless it 25 || issued the show-cause ores under Rule 11(c)(3) before voluntary dismissal ....” 26 07 * And, again, no defendant was named in the case in which Pietz has appeared.

> They were served with a supplemental declaration in support of Pietz’s attempts

28 || to recover fees against Gibbs. |

_5- RESPONSE TO PUTATIVE JOHN DOE'S REPLY TO BRIEFS BY PRENDA, INC., PAUL DUFFY. PAUL HANSMEIER, AND JOHN STEELE

KLINEDINST PC

501 West BRoapway, Surte 600 SAN DieGO, CALIFORNIA 92101

Case 2(12-cv-08333-ODW-JC Document120 Filed 04/18/13 Page6of9 Page ID #:2817

Fed. R. Civ. P. 11 (c)(5)(B); see also Gonzales v. Texaco Inc., 344 Fed. Appx. 304, 309 (9th Cir. Cal. 2009). Because the case was dismissed on January 28, 2013, no monetary sanctions of any nature would be appropriate here.

Even if the court could order Duffy, Van Den Hemel, or Prenda to pay fees, it would still be improper. As set forth in more detail in Duffy’s, Van Den Hemel’s, and Prenda’s April 8 response and April 11 objection, Pietz 1s an improper, biased, and voluntary prosecutor. Importantly, he seeks fees not related to representation of a client (as typically would be the case in a Rule 11

proceeding), but for his post-dismissal role as a sanctions prosecutor.

CSC Ob WDA INH OH Se YH LO

—,

Pietz suggests that he is representing the subscriber. Rep., pp. 9:22-10:4.

11 || However, his position during these proceedings demonstrates an irreconcilable

12 || conflict of positions. On the one hand, Pietz claims that Ingenuity 13 could not

13 || identify the ISP subscriber using the information it obtained. And Pietz has

14 || likewise claimed that AF Holdings and/or Ingenuity 13 have jumped to erroneous 15 |} conclusions regarding who the properly named defendants would be based on

16 || profiles of household members after subscribers were identified—suggesting that it 17 || was improper to name a teenage male as the defendant when the subscriber was an 18 || elderly woman.

19 But here, Pietz claims that he represents that subscriber, who may or may

20 || not have become the defendant. Ingenuity 13 did not name any defendant or even 21 || identify a subscriber for the court in the one case at issue that Pietz was defending. 22 || So, it would seem impossible for Pietz to identify who that subscriber would be— 23 || unless the data that Ingenuity 13 collected was, in fact, sufficient to identify the

24 || subscriber. And, even if Pietz could have identified the subscriber using Ingenuity 25 || 13’s data, his representation of that individual would constitute speculation as to

26 || who the actual defendant was or should be—something Pietz has repeatedly argued 27 || 1S improper.

28 Without identifying the name of the individual(s) who he claims to represent a6

RESPONSE TO PUTATIVE JOHN DOE'S REPLY TO BRIEFS BY PRENDA, INC., PAUL DUFFY. PAUL HANSMEIER, AND JOHN STEELE

KLINEDINST PC 501 West Broapway, SuITeE 600 SAN DieEGO, CALIFORNIA 92101

Case 2:(12-cv-08333-ODW-JC Document 120 Filed 04/18/13 Page 7 of9 Page ID #:2818

—

(person’s names are not confidential and, therefore, not protected by privilege), Pietz has, in essence, engaged in a smoke and mirrors act. It seems clear that he 1s either acting on his own or on behalf of Electronic Frontier Foundation (“EFF”’) (see https://www.eff.org/issues/file-sharing/subpoena-defense), who also employs — Pietz’s expert, Seth Schoen (Decl. of Schoen, 4 1).° The overriding mission of EFF has been to shield the internet from effective regulation—‘‘defending it from the intrusion of territorial government.” Jack L. Goldsmith & Tim Wu, Who Controls the Internet?: Illusions of a Borderless World 18 (2006). This mission is opposed

to any effective enforcement of intellectual property rights. Purporting to speak on

Oo OU DA ND OH HBP WD WN

behalf of “cyberspace,” a co-founder of EFF (who presently serves on its board of

jot eet et

directors) has warned the “Governments of the Industrial World” that “[y]our legal

concepts of property, expression, identity, movement, and context do not apply to

us.” John Perry Barlow, A Declaration of the Independence of Cyberspace (Feb. 8,

S GW

1996), available at https://projects.eff.org/~barlow/Declaration-Final.html (as of April 17, 2013).

16 Panel counsel for such an organization is clearly not disinterested in

17 || prosecuting sanctions against attorneys working to enforce copyrights. It would be 18 |) patently unfair to impose sanctions Duffy, Van Den Hemel, and/or Prenda to

19 || finance a crusade not only antagonistic to them, but to the law.

20 V.

21 || PIETZ’S FIFTH AMENDMENT AUTHORITIES ARE INAPPLICABLE TO 22 | THESE CRIMINAL PROCEEDINGS

23 Pietz has failed to rebut the legal authorities provided by Duffy, Van Den

24 || Hemel, and Prenda dictating that the court may not make negative inferences from

25 || the the invocation of the Fifth Amendment during these criminal proceedings.

27 || ° In the event the court is equivocating on awarding fees in any manner related to this action, it should address the question of who is actually funding Pietz’s _ 2g || extensive work, Electronic Frontier Foundation or a subscriber that Pietz claims cannot be identified. aos | RESPONSE TO PUTATIVE JOHN DOE'S REPLY TO BRIEFS BY PRENDA, INC., PAUL DUFFY. PAUL HANSMEIER, AND JOHN STEELE

KLINEDINST PC 501 West BrRoapway, SuITeE 600

Case 2]12-cv-08333-ODW-JC Document 120 Filed 04/18/13 Page 8of9 Page ID #:2819

Indeed, Pietz has failed to provide any authority that supports any argument that these proceedings are something other than criminal proceedings. Ignoring this threshold issue, Pietz jumps to and relies upon a long string of cases (ECF 117, 7:12-28) that hold a party to civil litigation may not invoke the Fifth Amendment in efforts to avoid answering questions material to the issues in the case, without facing negative implications regarding the substantive issues in that litigation.

Here, Fifth Amendment rights were asserted by non-parties to the litigation and not in the context of the dispute, but rather, in the context of a sanctions

proceeding. Pietz fails to cite any authorities concluding that negative implications

may be drawn from invocation of Fifth Amendment rights in the context of

11 |} sanctions hearings. But that is not the worst of his failures.

2 Pietz also relies on a transcript from a conference held in a settled class 13 |} action in the Southern District of New York in which the presiding judge states,

14 |) without authority and with no indication that criminal sanctions were to be levied

SAN DIEGO, CALIFORNIA 92101

15 || by the court, that a negative inference could be had against class counsel whom the 16 |} court suspected had criminal exposure related to unpaid settlement moneys from 17 || the underlying case.’ See ECF 117, 8:3-14 (citing In re: Bisys Securities Litigation, l8 || S.D.N.Y. No. 12-cv-3840, ECF No. 182, 4/20/2009 (Rakoff, J.) [Rep. Tr., 4:23-25; 19 || 5:1-8]). There are many reasons why Bisys and the transcript arising from it have 20 || no precedential value, but the simplest is because Bisys is a settled case. See

21 || Georgia-Pacific Corp. v. United States, 1979 U.S. Ct. Cl. Lexis 961 at 128, fn. 63 22 || (Ct. of Claims 1979) (“[a] settled case has no precedential value.”) (citing Pitcairn 23 || v. United States, 212 Ct. Cl. 168, 195 (Ct. of Claims 1976)). Indeed, Pietz has a

24 || history of citing to non-precedential authority. °

26 || ’ It should be noted that nowhere in the transcript did the attorney accused of _ misconduct personally and expressly invoke the Fifth Amendment, although his 27 || counsel at the conference raised the potential of invocation. Tr. of Hr’g., at 4:23- 25; 5:1-8 ® See ECF 1 17, 10:15-21 (citing to In re Avon Townhomes Venture, 2012 Bankr. 20 RESPONSE TO PUTATIVE JOHN DOE'S REPLY TO BRIEFS BY PRENDA, INC., PAUL DUFFY. PAUL HANSMEIER, AND JOHN STEELE

KLINEDINST PC 501 West BROADWAY, SUITE 600 SAN DieGo, CALIFORNIA 92101

Case 2{|12-cv-08333-ODW-JC Document 120 Filed 04/18/13 Page 9of9 Page ID #:2820

poeoovwent

Pietz has failed to present a single legal authority stating that the court may make negative inferences concerning either (1) the invocation of the Fifth Amendment by persons ordered to appear at a criminal proceeding or (2) the invocation of the Fifth Amendment by persons who had not even appeared as counsel of record in the underlying civil proceedings that spawned the later criminal proceedings. Absent those authorities, Pietz’s arguments concerning potential inferences from invocation of the Fifth Amendment simply amount to nothing.

VI. CONCLUSION

11 For the reasons set forth above and in their response to the order to show

renee

12 || cause, Paul Duffy, Angela Van Den Hemel, and/or Prenda Law, Inc. should not be 13 || sanctioned. In the event that the court disagrees and issues sanctions against one or 14 |} more of them, it should not issue sanctions that would result in a payment of any 15 || fees to Morgan Pietz, his firm, or his special interest group sponsor, Electronic

16 || Frontier Foundation.

18 Klinedinst PC

19 KE ee

20 || DATED: April 17, 2013 By: 20

21 ‘Heather L. Rosing David M. Majchrzak

22 Philip W. Vineyard Specially appearing for

23 Paul Duffy, Angela Van Den Hemel, and Prenda Law, Inc.

15517876v1

28 |) LEXIS 1410 (B.A.P. 9th Cir. 2012)).

G RESPONSE TO PUTATIVE JOHN DOE'S REPLY TO BRIEFS BY PRENDA, INC., PAUL DUFFY. PAUL HANSMEIER, AND JOHN STEELE