Case ae ed lo Documen 24 25 i #:3908 ee MR. BRODSKY: Your Honor, may I inquire of the court for a moment? THE COURT: Sure. MR. BRODSKY: I am not quite sure what the relevance of this is, the foundation for it or exactly what counsel is doing. It just seems to be his own statement of his investigation. THE COURT: Do you know the general subject that we are going to discuss now? MR. BRODSKY: I believe so, your Honor. THE COURT: Okay. That is what I think it is, and hopefully it will help him. Now, when it gets down to the source of this material and the accuracy of this material, I hope I will be hearing from you gentlemen. I. don't have the independent knowledge of this one way or the other. Thank God for the adversarial process. MR. WAXLER: Your Honor, oe, hee, should Mr. Pietz be on the stand if he is going to give essentially testimony about this exhibit? THE COURT: I don't make a habit of placing lawyers under oath, but this case may change that. I figure officers of the court will not knowingly make misrepresentations to the court, will they. MR. WAXLER: No, they won't. THE COURT: Until this case. t 218-1 Filed 07/11/18», Page 1 of 100 Page ID 58 Case 2:12-cv-08333-ODW-Jc Document 218-1 Filed 07/11/43") Page 2 of 100 Page ID #:3909 59 1 MR. WAXLER: My client hasn't in this case. 2 MR. PIETZ: Your Honor, to explain what it is, 3 what I thought I might do is to give a very brief 4 overview of the organization, and, then, I thought I is, would go through some specific documents about Mr. Steele 6 and a couple of arguments. So this is really argument, 7 essentially, a couple of exhibits that go to Mr. Steele's 8 connection to the California as well as a couple of 9 points about Mr. Paul Hansmeier and Mr. Duffy. 10 THE COURT: Okay. 11 MR. PIETZ: So, in any event, this is a chart that 12 was essentially prepared. This was prepared by my office 13 essentially as a tool to aid in the understanding of how 14 Prenda Law appears to have evolved over the past few 15 years. 16 Essentially, it started out here with Steele 17 Hansmeier, and John Steele -- I know that is a little 18 hard to see -- John Steele, Paul Hansmeier and Brett 19 Gibbs. Mr. steals and Mr. Hansmeier were the named 20 partners in the firm, and Mr. Gibbs was the of counsel ZA, originally. When they first started out, circa 2011 -- 22 THE COURT: I am going to have to stop you. How 23 do you know that Mr. Gibbs was of counsel with Steele and 24 Hansmeier? 25 MR. PIETZ: Your Honor, I can point to the HNRNP TE RU ETE SEE ET NE TPE Case 2:12-cv-08333-ODW*3C Document 218-1 Filed 07/11/13), 24 25 Page 3 of 100 Page ID a #:3910 60 specific exhibit, but there are pleadings of which the court can take judicial notice where he is listed on the pleadings as of counsel to Steele Hansmeier. THE COURT: You are aware of the fact that Mr. Hansmeier doesn't know what capacity Mr. Gibbs was working at his law firm? MR. PIETZ: Correct, your Honor. So, in any event, let me put it this way. Mr. Gibbs filed documents in federal court indicating on the caption that he was of counsel to Steele Hansmeier. THE COURT: Okay. MR. PIETZ: Now, I believe I can also speak to this if the court is so inclined that Mr. Lutz was holding himself out to the world as a paralegal at that time, working, according to Mr. Paul Hansmeier, solely for Mr. Steele. .At this time, most of the lawsuits with a few exceptions filed by Prenda around 2011 were on behalf of a porno production, pardon me, adult entertainment production company that actually people have heard of before. And that is this list of clients here. What happened is that sometime in 2012, the Steele Hansmeier firm was disbanded or become Prenda, sold its client book to Prenda Law. We are not entirely sure exactly the nature of the transaction, but, in any Case 2:12-cv-08333-OD ¥v-IC Document 218-1 Filed 07/11/18», Page 4 of 100 Page ID ed #:3911 oe” 61 event, at that point, Paul Duffy became involved as the nominal figurehead of the Prenda Law enterprise. However, there are indications that Mr. Steele and Mr. Hansmeier remain involved and Mr. Gibbs has declared that he essentially continued on as of counsel handling the same cases only now on behalf of Prenda Law, Inc. rather than Steele Hansmeier LLC. At the same time that Steele Hansmeier became Prenda, sometime around, then, in 2012, I am not exactly sure, Mr. Hansmeier started up his own shingle in Minnesota, the virtual office called the Alpha Law Firm LLC. So, essentially, Mr. Hansmeier sometimes files pleadings in federal court that list his affiliation as Alpha Law Firm LLC, but, by the same token, Mr. Gibbs has identified Mr. Paul Hansmeier as being the person from whom he took direction at Prenda. And, indeed, the court may recall from the deposition transcript read over the weekend that Mr. Hansmeier testified that, indeed, his clients deposited their trust account funds into the Prenda Law Firm account rather than to the Alpha Law Firm account. THE COURT: Stop. I hate to interrupt you. But she means more to me than this Seourient, and we have had her going at light speed for an hour-and-a-half. Right. So I am going to take a break, Case 2:12-cv-08333-ODWJC Document 218-1 Filed 07/11/18 Page 5 of 100 24 25 Ss #:3912 =, and we can all take a break. How about 10 minutes. Okay. MR. PIETZ: Very good. Thank you, your Honor. (Recess from 2:58 to 3:09.) THE COURT: Alli right. Mr. Pietz. MR. PIETZ: Thank you. I will attempt to keep this section very brief, and then we will move on to some documentary evidence. This is just a summary. So, as I was saying, sometime around 2012, there was a bit of a shift in the Prenda business strategy. Mr. Hansmeier -- so what happened is these companies, AF Holdings, LLC, Ingenuity 13 LLC and then there is a couple of other companies which are the ones in the CFAA cases. That is Arte de Oaxaca LLC and Guava LLC. And the CFAA cases have primarily been filed in state court and have indeed tried to use -- certain states have presuit discovery procedures that are more lenient than Federal Rule of Civil Procedure 27. So it is sort of a newer twist is these state court CFAA cases and Arte de Oaxaca. But, in any event, according to Mr. Hansmeier in his deposition, these essentially shell company plaintiffs are owned by a mystery trust. Mr. Hansmeier, as 30(b) (6) deponent -- well, anyway, I won't go into that. The court read it. According to Mr. Gibbs' Page ID 62 laden li ld Case 2:12-cv-08333-ODW=JC Document 218-1 Filed ie Page 6 of 100 Page ID og i 24 25 ae #:3913 63 special counsel, though, on the same day, February 19th, there is conflicting testimony essentially saying that Livewire Holdings LLC is actually the current holder of AF Holdings and Ingenuity 13. So, in any event, these are the parent companies, some mystery trust and Livewire Holdings LLC. There is documents, you know, I had this sort of set aside to potentially go through with Mr. Gibbs, but I can also just show the documents, show what I have. In any event, there is documents showing Mr. Gibbs as in-house counsel for Livewire Holdings. There are various other connections between Livewire Holdings and the attorneys we see over here. Mr. Dugas is a local counsel who has worked at both Prenda and Alpha Law which I can show through his LinkedIn profiles, obviously, not central to the case. Mr. Dugas' wife has been identified on LinkedIn as in-house counsel for Livewire Holdings. In addition, what I will talk about now is the way that we see the lawyers. Mr. Hansmeier has been both 30BC deponent for AF and as its counsel. In any event, what seemed to happen is that at some point these cases filed on behalf of Ingenuity, AF Holdings, Arte de Oaxaca and Guava LLC are cases where what appears to have happened is the lawyers essentially took assignment of Case 2:12-cv-08333-ODW*JC Document 218-1 Filed 07/11/18, Page 7 of 100 Page ID nd #:3914 ed 24 25 64 the underlying intellectual property rights in these mysterious shell companies. One recurring theme here is the way that when we are seeing the straw men, there is always a connection to John Steele. So, for example, in the VPR International, we see John Steele is the attorney. We see Alan Cooper listed on the corporate registration. The address listed for VPR International, the 4532 East Villa Teresa Drive. My understanding based on documents that have been submitted with the court is that is an address that comes up for John Steele's sister and a gentleman named Anthony Saltmarsh, in addition, of course, to being the address listed for Mr. Cooper. So on various federal court filings in the Northern District of California, all of which are attached as exhibits to the deposition that was lodged with the court which the court read over the weekend, when pressed to identify the person at AF Holdings who would be made available for an early neutral settlement evaluation conference, there are various court filings listing the owner of AF Holdings as somebody named Salt Marsh, two words. So, in any event, what seems to perhaps be the case is that this Anthony Saltmarsh lived at this address with John Steele's sister which was essentially used as a front for various entities involved in Prenda activities. Suanvalniceianhiaaisiensina NOON AANRN ANTM ANN SAIN NE A SERS IS SABRES SS REISS AAS ESESSSESSESSSISSS AUS SSSA Case 2:12-cv-08333-OD 24 25 WeJC Document 218-1 Filed 07/11/1 ae #3915 ‘ I don't want to spend too much time on just the overview. What I thought I might do is shift instead to taking the nonappearing folks individually. AndlI thought I might start with Mr. Steele. So I have some documents which go to that, and I will suiteh back now to -- okay. There we go. So I will note that in the declaration submitted to the court by Mr. Steele on Friday, he claims that he resides in the State of Florida. I will point out that when Mr. Steele was under threat of sanction in the state of Florida, he declared to the court there that he resided in the State of Nevada and only visited the State of Florida. Sol have here the affidavit of John Steele that he filed, and you can see the file stamp on the top. It is Middle District of Florida, Case No. 812 CV 1685 that was filed on December 20th, 2012. And, in Paragraph 2, Mr. Steele swore to the court that my legal residence is Las Vegas, Nevada, and I also spend one to two weeks a month in Miami, Florida. So my understanding must be then that sometime between last December and now Mr. Steele has decided that his residence is not Nevada but rather Florida. In any event, and before moving on, I would 65 ask the court to take judicial notice of the fact that in ° Case 2:12-cv-08333-ODW*JC Document 218-1 Filed 07/11/43), Page 9 of 100 Page ID #:3916 the -- that this affidavit which was filed in the public record in the Middle District of Florida that Mr. Steele states that he spends one to two weeks a month in Miami, Florida. Mr. Ranallo can pass out copies of the affidavit to everybody. So, in any event, let's look at some other documents about Mr. Steele. And what I would start with, I believe, is a declaration here, and I will ask Mr. Ranallo again to pass this out for the court, the. declaration of Michael B. Stone, and what this declaration is, the declaration itself is essentially just authenticating the document, but the document at issue is a collection of pleadings in a Northern District of California action in which it was a case filed on behalf of a Prenda client. Well, this I think was an actual company that people have heard of in an earlier case, but in any event, here, we see the pleading. So the declaration authenticates it, and then Exhibit 1 is a copy of the complaint which as we can see was filed in the United States District Court for the Northern District of California, and it is Civil Action No. 511 CV 3648. Well, in any event, the interesting thing about this complaint is who signed the subpoena that was directed in this case at a John Doe defendant who resided 66 Case 2:12-cv-08333-ODWe3C Document 218-1 Filed 07/11/ \ , e 24 25 “, Page 10 of 100 Nai #:3917 in California. And the answer, and here we see a copy of the subpoena, pardon me, authenticated by Mr. Stone. This is the letter that the ISP normally sends out, and, here, we see a copy of the subpoena itself. And this is in the same action. Then, we see, there, that this subpoena which again was signed by John Steele in a California action requesting information of a John Doe defendant in the State of California. So, essentially, I would ask that this declaration of Michael Stone be admitted into evidence as Exhibit, I believe, we are on 9. Is that correct, Madam Clerk? THE CLERK: 10. MR. PIETZ: Pardon me. 10. I am one behind. THE COURT: All right. Any objection? MR. WAXLER: Your Honor, I just question the relevancy of it as to Mr. Gibbs. Again, it is not one of the cases that you put in your OSC. THE COURT: It will be admitted. MR. PIETZ: Similar document that I will move onto next. What we have here is a declaration which was filed on the docket in a case in the Northern District of California by a man named Samuel Teitelbaum. It is Northern District of California No. 311 CV 5628. And we can see here that it is pending in the Northern District Page ID 67 Case 2:12-cv-08333-ODWJC Document 218-1 Filed 07/11/13», Page 11 of 100 24 25 os #:3918 of California. In this declaration, Mr. Teitelbaum explains that he received a letter directed to him in California from Prenda Law and that the letter which was mailed to him in California which is there is a copy of it right here. It is on Steele Hansmeier letterhead, and if we go to the last page, we see that the letter, mailed into the State of California in a case pending in the Northern District of California, is signed by John Steele, attorney and counselor at law. So, in any event, I would ask that this be admitted into evidence as Exhibit 11, and these both go to showing that Mr. Steele has indeed reached into the State of California in terms of his actions in BitTorrent copyright litigation cases. THE COURT: All right. Will be received. MR. PIETZ: So what I will do now, I think that the other facts that I had already pointed out about the other gentlemen who are not here today, so I mean Paul Hansmeier and Paul Duffy, I pointed out in my opposition to the objections which was filed on Friday, but, in general, I would argue the jurisdictional issue as follows. What we have from Mr. Gibbs is a declaration saying that anything that was potentially improper in Page ID 68 Case 2:12-cv-08333-ODW3IC Document 218-1 Filed 07/11/43» i #3919 L? these cases was done at the direction of his superiors at the Prenda law firm. He identifies those people as John Steele and Paul Hansmeier. Interestingly enough, Mr. Duffy isn't on the list or perhaps maybe not as much. Mr. Duffy has his California bar license in the state of California and has substituted in in Mr. Gibbs' place in a variety of actions in the Northern District of California. Mr. Hansmeier, in addition to being identified by Mr. Gibbs as essentially running a law firm doing business in California, flew to California apparently of his own free will to appear as the corporate 30(b) (6) deponent of AF Holdings LLC. So we have Mr. Hansmeier reaching into the state of California, attending a deposition in California in a Northern District of California case, representing essentially that the same plaintiff that is at issue here, AF Holdings LLC. So at least with respect to Mr. Duffy who has his bar license here and Mr. Hansmeier who flew here as a 30(b) (6) deponent and has been identified, I think it + fairly clear that probably both general and specific jurisdiction exists. Mr. Steele has perhaps been a little more careful about trying to keep his fingerprints off here, but I would remind the court that Mr. Gibbs has Page 12 of 100 Page ID 69 AAA AINA AS saineneeaieieinaneieneunmeeamneammemmnentn Case 2:12-cv-08333-OD 24 25 ith a i Document 218-1 Filed 07/11/1 #:3920 identified him as essentially running a law firm in California which by the way is not qualified to do business in California, and I checked with the state bar and it is not registered as a law firm here. But in any event -- THE COURT: You talking about Prenda now? MR. PIETZ: Talking about Prenda. Yes, sir. In any event, I apologize. I don't have documents to back that up, but I can provide them. But, in any event, I think that with respect to Mr. Steele when you take Mr. Gibbs' declaration and add it together with a subpoena signed by Mr. Steele. And, pardon me, I will note one other thing about the declaration of Michael Stone. In addition to authenticating the documents, he also included some back and forth, some meet and confer correspondence he had with Mr. Steele. So, essentially, Mr. Stone noticed the fact that Mr. Steele was not licensed in California and that he had signed the subpoena and wrote to Mr. Gibbs saying this subpoena is invalid. And what happened is that Mr. Steele wrote back directly without cc'ing Mr. Gibbs and essentially shrugged off the concerns about the subpoena being signed by an attorney who doesn't have a license in California. So, in any event, I think that with respect to 70 OER REARI ITS Case ial 5 5 Document 218-1 Filed 07/11/13» Page 14 0f 100 Page ID o : 24 25 #:3921 —, 71 Mr. Steele, when you add together the subpoena issued into the state of California, a demand letter issued under the state of California as well as Mr. Gibbs' cee nee, it is pretty clear that the court has personal jurisdiction. I don't have a tremendous number of additional exhibits on this topic. However, I do have quite a few with respect to what I view as Mr. Gibbs' central role in the Prenda law organization. MR. BRODSKY: Your Honor, may I make one comment? THE COURT: You can make more than that. Thank you. Yes. Go ahead. MR. BRODSKY: We are not taking a position at the present time on the jurisdictional issues that the court is deciding, but there were statements made about my client that I believe mischaracterize the evidence that has been put forward. THE COURT: Okay. Listen, let me just sort of tell you the way we are going to proceed here. At this point, you will have the floor. All right. I can't imagine you are going to raise too much in opposition to the jurisdictional issue. Otherwise, he is in. So you go right ahead. Now, a number of things -- I am just going to Case 2:12-cv-08333-ODWesC Document 218-1 Filed 07/11/ < 24 25 Page 15 of 100 Page ID Nev #:3922 72 give you some of my thinking. A number of things were stated in your papers. Some of them caused me some concern because they were inaccurate. For example, you make the argument that certain people were identified as infringers because there was no way, for example, that someone else could have been piggy-backing off of their modem because of the size of the lot, where the house is situated on the lot, the proximity or lack of proximity of other residences around, et cetera. Your representation of these homes and the neighborhoods and juxtaposition of other houses around them was simply not accurate. Not in the least bit. And I found that troublesome when you are asking me, then, to accept all of your our arguments. So I just want to throw that out there to let you know some of my thinking. MR. WAXLER: Our turn, your Honor? THE COURT: I don't care who. It is this side. MR. WAXLER: We will call Mr. Gibbs to the stand, your Honor. THE COURT: All right. (The witness was sworn.) MR. PIETZ: Your Honor, before we move onto Mr. Gibbs, may I request that we admit into evidence the affidavit of John Steele as Exhibit 12, the Michael Stone Se nee eC OC nnn eA A Case 2:12-cv-08333-ODW=IC Document 218-1 Filed 07/11/18, 24 25 Page 16 of 100 all #:3923 j declaration as Exhibit 13 -- oh. Pardon me. Stone and Teitelbaum have already been admitted so just the affidavit of John Steele. I would ask that that be admitted as Exhibit 12. THE COURT: I think that's right. Are we up to 12? Okay. All right. THE CLERK: If you could state your full and true name for the record and spell your last name. THE WITNESS: Sure. Brad Gibbs, G-I-B-B-S. DIRECT EXAMINATION BY MR. WAXLER: Q Mr. Gibbs, who is your present employer? A I am not currently employed. Q You became employed -- I'm sorry. You became an of counsel, 1099 independent contractor for Steele Hansmeier; correct? A Yes. Q Was Steele Hansmeier an existing law firm at the time that occurred? A I believe they had been existing for a number of months at that point. Q What were you told your role would be at Steele Hansmeier? A Basically, California counsel for Steele Hansmeier Page ID 73 settee NERO Case 2:12-cv-08333-OD 24 25 feJC Document 218-1 Filed 07/11/18»,Page 17 of 100 Page ID Nel! #:3924 ww 74 in bringing lawsuits on behalf of their clients. Q Were you paid as an employee? A No. Q Did you share in Steele Hansmeier profits? A No. Q Were you on the management of Steele Hansmeier? A No. Q And who did you understand were the decision makers of Steele Hansmeier? A John Steele and Paul Hansmeier. Q When you were an of counsel to Steele Hansmeier, who supervised you? A John Steele and Paul Hansmeier. Q Did you have periodic meetings while at Steele Hansmeier to discuss cases? A Yes, we did. Q And were those weekly meetings? A Yes. Sometimes they would be sending the schedule, but, yes, mostly weekly meetings. Q Who participated in those meetings? A John and Paul would call me, and they would hold a weekly meeting. Q And were these by phone or in person? A These were by phone. THE COURT: Were they ever in person. Case 2:12-cv-08333-OD 24 25 veIC Document 218-1 Filed 07/11/18 Page 18 of 100 Page ID Nes? #:3925 Na 75 THE WITNESS: I went sometimes and met them, and then we had meetings, yes, in person at that point, but this was only a couple of times. THE COURT: This is out of California? THE WITNESS: Yes. Well, I have met with Paul Hansmeier in California prior to this deposition, but the other, everything was out of California. Q BY MR. WAXLER: When -- were any cases that you filed while at -- while of counsel to Steele Hansmeier, were any of those cases settled? A Yes. Q And did the checks, the settlement checks come to you? A No. Q Did you have a client trust account in any account in which you had an interest at all as a signatory? A No. Actually, I don't even have a client trust account. Q So the checks were sent to Steele Hansmeier's trust account? A I don't know. I would assume they were. They weren't sent to me. They were sent to Steele Hansmeier. Q And how did you learn that Prenda law was going to substitute in or take over the cases from Steele Hansmeier? NATTA RARER TANNA AE ROSTER ERE ASSESS Case 2:12-cv-08333-OD ie 24 25 RT ee Pe eT EL I Te Se ee rg 4: ia aacieae initia aerated Document 218-1 Filed 07/11/13, Page 19 of 100 Page ID #:3926 ay 76 A Basically, I heard of the name Prenda Law. They told me that Prenda Law was now taking over the business. Steele Hansmeier was no longer going to exist at that point. Q And who is they in that answer? A That would be John Steele and Paul Hansmeier. Q Were you on the management committee at all of Prenda Law? A No. Q Were you partner at Prenda Law? A No. Q What was your affiliation with Prenda Law? A The same as it was for Steele Hansmeier which would be of counsel, California counsel essentially for Prenda Law Q So you were compensated with a 1099? A Yes. That is correct. Q And did that ever change over the course of the time which you were counsel to Prenda Law? A In terms of what? Q In terms of your relationship with that firm? A No. I would only say that they, John and Paul, had asked me to help the other counsel in different states, basically, like, give them advice in doing their own cases in different states. That was the only change 24 25 Document 218-1 Filed 07/11/1; »,Page 20 of 100 #:3927 really. Other than that, I was just California counsel. Q While of counsel to Prenda Law, did you ever receive any settlement.checks? A Myself personally, no. : Q Did you have a client trust account at Prenda Law that you somehow administered or controlled? A No. Q And were you supervised at Prenda Law? A Yes, I was. Q Who were you supervised by? A Paul Hansmeier and John Steele. Q Were you supervised by Paul Duffy? A No. Q And when you say supervised, could you just describe what you mean by that? How did they supervise you? A Sure. You know, they essentially were the ones that would initiate cases. By that, I mean, they would tell me they wanted to file certain cases in California, for instance, and they would instruct me to go ahead and file those. And they would give me the authority to do so. I would be told what cases we are looking at and how many cases we are talking about, and then I would file the cases. And they would give me general guidelines on Page ID 77 Case 2:12-cv-08333-OD 24 25 = #:3928 ee, what to do and sometimes the cases would be settled by John as was pointed out earlier, and sometimes they gave me certain parameters which I could settle the case myself. Q Did you ever talk to anybody that you understood to be the client, AF Holdings? | A No. The communications were solely through Paul Hansmeier and John Steele. Q Did you ever talk to anybody who said they were affiliated with Ingenuity 13? . A Well, I mean, aside from Mark Lutz who is the CEO of Ingenuity 13, but aside from that, no. All my communications were straight through Paul Hansmeier and John Steele. Q Did Mr. Lutz ever give you direction on the handling of any of these cases directly? A No. Actually, I only found out about that connection, I would say, after the cases in the Central District were filed, about him being the CEO. I didn't know that before. Q And the cases that were filed in the Central District were dismissed; correct? A That is correct. Q And whose decision was it to dismiss those cases? A Ultimately, it was John Steele and Paul Hansmeier's CE RAN TN aA MRT IS ARIA ORT JC Document 218-1 Filed 07/11/14=,Page 21 of 100 Page ID Case 2:12-cv-08333-ODW=IC Document 218-1 Filed 07/11/¥ 24 25 Page 22 of 100 Page ID #:3929 79 decisions. We had talked about it. As counsel of record here, I just kind of broke down like a cost benefit analysis of those cases. And they said, basically, go ahead and dismiss them because -- they said go ahead and dismiss them. Q When the cases were filed, did you have a discussion with anybody about whether notice of interested parties should be filed? A I did. Yeah. Q And who did you have discussions with? A Mostly Paul Hansmeier. Yes. Mostly Paul Hansmeier but sometimes John Steele, I guess. I don't know. It was a while ago I guess. Q Did you file those notices of interested parties? A Yes. Q What did they say in connection with AF Holdings. A They said there was no other interested parties. Q Do you have any personal knowledge of that statement as -uneuee A No, I did not. No. I still don't. I mean, in terms of I know there is other things involved in terms of the trust and stuff like that, but in terms of other people involved, I was only taking direction from these guys in terms of these types of filings. Q And these guys are? ener ee ENA RSH TT Case 2:12-cv-08333-ODW 24 25 #:3930 S 80 A These guys are Paul Hansmeier and John Steele. Q In connection with Ingenuity 13 cases did you file notices of interested parties? A That is correct. Yes. Q And were you ever advised that the information -- how did you obtain the information for those notices? A Well, I just, I would ask them, you know, are there any other people that I should be noticing on this document that I am filing with the court. Q Who is them in your response? A That would be Paul Hansmeier and John Steele. Q Were you told not to do that again. Instead of saying them, were you told by Paul Hansmeier, John Steel that the information you included in those notice of interested parties was correct? A So they actually told me, I was instructed to fill those documents out like I did. Q There was a question raised by the court this morning about the failure to have filed notices of related cases. My question is did you consider filing notices of related cases when you filed the actions in the Central District of California? A Yes, we did. Q And could you please describe for the court what your thought process was as a result of, in not filing Document 218-1 Filed 07/11/18%,Page 23 of 100 Page ID Case 2:12-cv-08333-OD 24 25 Document 218-1 Filed 07/11/13, Page 24 of 100 Page ID #:3931 VW 81 these notices? A So we nea eaaes -- well, I filed on behalf of Steele Hansmeier, then Prenda Law, a number of cases in the Northern District of California, and those were cases with multiple people in them. And what the court in the Northern District of California concluded, almost every court, at that point, after filing multiple cases was that joinder was not valid and that they basically told us in no uncertain terms that these cases weren't related. Therefore, that informed my belief in terms of whether we wanted to relate these cases or not. They said these cases, essentially, through their orders and through live hearings, that these cases aren't related, they should be brought as individual actions. So it was just a decision to bring those individual actions and not relate the cases based on that. Q And your experience in Northern California, that predated the filings of the Central District actions that we are here to discuss today? A Yes. I don't even know if I was admitted into the Central District at that point. THE COURT: Let me jump in a second. You were told in the Northern District of California that when you filed a lawsuit on behalf of either AF Holdings or Case 2:12-cv-08333-OD Document 218-1 Filed 07/11/18",Page 25 of 100 Page ID #:3932 =, 82 1 Ingenuity 13 versus Does 1 through many, that that 2 joinder was improper; correct? 3 THE WITNESS: Some cases. Some cases it was not 4 improper. Some judges felt differently. 5 THE COURT: All right. But if it involved 6 different movies, downloads, different times, different 7 people, different places, different ISP addresses, they 8 said you need to file separate lawsuits; right? 9 THE WITNESS: Some of them were the same clients, 10 same videos. 11 THE COURT: Okay. But even then? 12 THE WITNESS: Yes. 13 THE COURT: Even then, you had to file separate 14 lawsuits? 15 THE WITNESS: Yes. We were pointing that 16 direction even there was a footnote in one of the courts’ 17 opinions saying basically that we were trying to get 18 around the filing fee, and that is what they thought so 19 we should file individual cases from there on out. 20 THE COURT: Of course, you were, but that is not 21 where we are going here. Now, that deals with joinder in 22 one lawsuit and consolidating really separate and 23 complete causes of action, different parties in a single 24 lawsuit. 25 Now, what we are talking about here is with Case 2:12-cv-08333-ODW23C Document 218-1 Filed O71 Page 26 of 100 Page ID 24 25 ed #:3933 om respect to your notice of related case. THE WITNESS: I understand. THE COURT: You do because I can hear it now. I can hear you going it is compound, all the stuff that you do. Do you realize -- no. Did you equate the instructions you got from the court regarding improper consolidation of a lot of cases, a lot of claims into a single complaint, did you somehow conflate that with the issue of related cases, notices of related cases? And you know what that is for, here; right? THE WITNESS: I understand. THE COURT: You understand why we are looking for that. THE WITNESS: I understand. THE COURT: Tell me what your understanding is as to why the court is interested in knowing whether or not there are related cases. THE WITNESS: Because if they are similar cases, my belief is the court wants to know about those so the court can handle it so that there are uniform decisions essentially that are held from the same court. THE COURT: Excellent. A completely different objective -- right -- than consolidating a lot of different lawsuits in one complaint; right? Completely Case 2:12-cv-08333-ODV¥ 24 25 “JC Document 218-1 Filed 07/11/18~»,Page 27 of 100 X sini #:3934 wr different. This is judicial economy. THE WITNESS: I understand. Yes. I understand what you are saying. In terms of that it was just the decision that was made, and perhaps it was the wrong decision, but, you know, the decision was made. THE COURT: Okay. Don't do that. Decision that was made. Who made that decision? THE WITNESS: It was a discussion amongst myself, Paul Hansmeier and John Steele and, probably, mostly, Paul Hansmeier. I don't even know if Steele was involved in that discussion or not, and that is just what we decided to do. THE COURT: All Heke, The law firm that you were working for -- and I guess initially we are talking Steele Hansmeier or the other way around. THE WITNESS: It was Steele Hansmeier. THE COURT: Okay. Did that firm have, in its California office, aoa it have a client trust account? THE WITNESS: In California. THE COURT: Yes. THE WITNESS: Well, I was working of counsel to them. So, no, I never had my own client trust account. The funds were always going through the law firm. THE COURT: Were you operating out of your home? THE WITNESS: Yes, I was originally. Page ID 84 Case 2:12-cv-08333-OD 24 25 "Page 28 of 100 Page ID 85 THE COURT: Did at any time you ever have a business office even if it was a suite any place? THE WITNESS: Not for Steele Hansmeier. THE COURT: What about Prenda? THE WITNESS: Prenda Law, yes. They wanted me to get an office. So I got an office, and I actually moved twice. THE COURT: At that time, did you have a client trust account? THE WITNESS: No, your Honor. THE COURT: Was it your understanding that in California that you were required to have a client trust account? THE WITNESS: My belief was that considering I was working as of counsel to the Prenda Law, and Prenda Law had the trust account, that was my understanding of how the money was dealt with. I didn't ever -~ they never saw my bank account. I was paid like by Prenda Law as an attorney, of counsel attorney, 1099. And so my understanding was that they had a trust account. And, therefore, you know, the people that were working with them did not need trust accounts themselves. THE COURT: Okay. All right. And you only handle one kind of business; right? THE WITNESS: What do you mean by that, your nnn mies RHA RST EH LTT RANA TANASE ISS Case 2:12-cv-08333-OD Document 218-1 Filed 07/11/ » Page 29 of 100 Page ID #:3936 86 1 Honor? I only handle one kind of business? | 2 THE COURT: Yes. 3 THE WITNESS: Can you explain your question? You 4 mean in terms of just being plaintiff's lawyer? 5 THE COURT: Plaintiff's lawyer for copyright 6 infringement for the adult film industry. 7 THE WITNESS: Well, no, actually. So originally 8 when I was working for Steele Hansmeier, I was also 9 working for an arbitrator. So I had other business, but 10 it was just a 1099 worker at the same time. I was 11 helping him out with his cases, and so when Prenda law 12 came around, we basically, I said, look, you guys are 13 trying to put a lot of work on my plate essentially, and 14 I am kind of split here. And they said, well, we would 15 like to basically have you work solely for Prenda Law, 16 this is being Paul Hansmeier and John Steele. And sol 17 wrapped up my arrangement with the Avbiernbor, and I 18 became exclusive doing stuff for Prenda Law at that 19 point. 20 THE COURT: Listen, last January, this past 21 January, a few weeks ago, I guess you started withdrawing 22 as counsel of record. Z3 THE WITNESS: That is correct, yes. 24 THE COURT: All right. And you just testified 25 that you are no longer employed by Prenda? senses os OS NDT TEETER Case 2:12-cv-08333-OD 24 25 Document 218-1 Filed 07/11/ #:3937 : THE WITNESS: That is correct. I am. no longer employed by Prenda or any other corporation or LLC that is involved in these cases. I have moved on. I am going to work again for the arbitrator and find some other work essentially. You know, so that is where I am right now. Actually, I was working for Livewire for two months, but there was actually a couple of things that happened in terms of I never even got paid for my two months there. THE COURT: Two months where? THE WITNESS: Two months at Livewire. THE COURT: You did get paid by Prenda though; right? THE WITNESS: Before that, yes. During 2012, yes. THE COURT: So why did you leave? THE WITNESS: Well, there is multiple reasons for it. Personal reasons, I am getting married soon. Sol wanted to focus on that, but, you know, to be honest with you -- THE COURT: That would be good. THE WITNESS: Yeah. No. I am looking forward to it. And to be honest with you, these types of things raising up themselves, I just didn’t want to be affiliated with it anymore. It wasn't worth it. I was getting a lot of harassment. My family was receiving e-mails and correspondence from people, my fiance, my 87 Case 2:12-cv-08333-ODW3C Document 218-1 Filed 07/11/18», Page 31 of 100 24 25 Oo #:3938 te parents. I just didn't see, and I was getting a lot of negative exposure that, you know, I just didn't want anymore ultimately. And, then, also, I didn't really get along with one of the people that managed me. So I, you know, I decided to go ahead and exit and told them about that, and, yeah, and that is the situation essentially. THE COURT: Okay. Q BY MR. WAXLER: Just to complete your employment” picture because there was perhaps some gaps. You learned sometime in late 2012 that Prenda Law was no longer going to be your, I will just say the word employer but you weren't going to be of counsel to Prenda Law anymore; correct? A That is correct. Q And how were you informed of that? A I was told I would say middle December or so. There was a brainstorming issue about -- they were, John Steele and Paul Hansmeier were brainstorming about whether they wanted basically to start their own company, I guess. And the company was Livewire, turned out to be Livewire. And that Livewire would essentially buy AF Holdings and Ingenuity 13 and Guava. And so I was informed that as of January 1, you know, Livewire extends you this offer, and basically Page ID 88 Case 2:12-cv-08333-ODW*3C Document 218-1 Filed 07/11/ | ™,Page 32 of 100 Page ID hao #:3939 ; 89 1 if you don't accept this offer, then, you know, we are 2 going to part ways. So the offer was to be in house 3 counsel for Livewire, and so I was hired W2 employee for 4 this company which is a holding company of copyrights. 5 Q And you understood that one of the subsidiaries of 6 that company included AF Holdings; correct? 7 A That was my understanding, yeah. | 8 Q When did you come to a different understanding? 9 A Oh. Well, during the deposition, I came to a 10 different understanding because obviously the deposition ta. was said what was said, and I asked Paul Hansmeier about 12 that. , i 1 t | ' | 13 Q And what we are talking about here is | 14 Mr. Hansmeier's testimony that there was a trust that | 15 owned AF -- | 16 A That is correct. | a7 Q And before that testimony, you heard that | 18 testimony, you understood as of January 1, that Livewire ' 19 would own -- i 20 A Yes. 21 Q Livewire would own AF Holdings? 22 A That is correct. 23 Q And that is why in at least one of the pleadings 24 you put that you are in house counsel for AF Holdings 25 because that was a company that was owned by Livewire; 24 25 Case ccc Se! 4 Document 218-1 Filed ls ta 33 of 100 Page ID a” ‘ey #:3940 correct? A I was specifically told to sign as in house counsel for AF Holdings by Paul Hansmeier in that case. I was actually because of Mark Lutz' position as CEO, I was trying to get his signature for that document, but Paul Hansmeier said, no, you are in house counsel for Livewire thereby in house écuuest for AF Holdings, you sign it on behalf of the client. Q Is one of the other reasons you decided to leave Livewire is because you learned that the stamp was being used for your signature? A Yes. Certain letters were sent out without my knowledge. I never authorized them, never approved them. When I questioned John about them, he was, like, basically said, this is your role. This is what you have to do. You have to send these letters out, and I said I don't feel comfortable, these aren't even my cases, essentially. And, you know, I actually e-mailed Mark Lutz about that, and he said you got to talk with John and Paul about this. THE COURT: I'm sorry. What kind of letters are we talking about? Is that the settlement letters? THE WITNESS: Settlement letters. They had been using -- they originally said they were going to do a stamp for me for certain things, but I thought they were SANA NAAR EARNER IOAN ESO DAT Case 2:12-cv-08333-ODW"JC Document 218-1 Filed 07/11/46 Page 34 of 100 Page ID 24 25 = #3941 91 only for my cases. And, you know, later, I found out that stamp might have been used for cases that I never even participated in or seen the letters before they went out. THE COURT: Let me make sure I understand now. Livewire eventually became the parent of AF Holings and Ingenuity 13 LLC? THE WITNESS: That was my understanding. I was told that, yeah. And that is why I was hired and a lot of people were hired in terms of working as W2 employees for Livewire. So it was the company that was a holdings company that would do litigation as well as distribution. That is what they told me. THE COURT: And you were a W2 employee? THE WITNESS: That's correct. And I still have not been paid for that position. Q BY MR. WAXLER: That was for a period of two months; correct? A That's correct. And I gave him my notice early February essentially. THE COURT: Where was Livewire's offices? THE WITNESS: Livewire has an address of Washington DC address, but, obviously, I don't know i Le has an office to be honest with you. It is just a matter of, kind of a cloud type office. It might be a situation Case 2:12-cv-08333-ODW"5C Document 218-1 Filed 07/11/12 ‘ Page 35 of 100 ww #:3942 where -- I am just speculating right now. THE COURT: You have never visited Washington DC offices? THE WITNESS: No. I believe it is just a PO box over there. That is just a mailing address for them. THE COURT: Did that form letter requesting payment of the settlement sums, did that letter change to reflect that payment now should be sent to Livewire at the Washington DC address? THE WITNESS: Absolutely. It wasn't sent to me or anything like that. It was sent to that mailbox, and then I believe it would be sent back to somebody at some point somewhere. But that is the kind of issues that I started having, and along with a lot of other different issues. So I just decided to -- I asked them if I could go ahead and substitute out with Paul Duffy who had a license in California. I talked to Paul Duffy about that, he said sure, and then I proceeded to do that. THE COURT: All right. So you substituted out. Now, how long were you general counsel for Livewire? THE WITNESS: Two months basically. I mean, I guess you could say, I think the official documents were signed. It never actually specified that I was in house counsel, but that is what I was told. The documents were just general employment documents, but that was from I Page ID 92 SARS AEROSTAR ALE RTA EA EUR AONE ESA AERIS ESAS SSS TEASE ESS ee Case eee Document 218-1 Filed 07/11/1, EASON SANA RANTS Page 36 of 100 Page ID oe #:3943 93 think January 7th iy That's when I signed the documents. 10) BY MR. WAXLER: You were not general counsel. You were in house counsel; right? A In house counsel. Sorry. Q You have never held the position of general counsel, have you? A No. THE COURT: Did you know about any other employees there? THE WITNESS: Yes. THE COURT: Was there a bookkeeper or an accountant? THE WITNESS: Yes. THE COURT: Do you know whether -- well, okay. Thank you. MEMBER OF THE AUDIENCE: Your Honor? THE COURT: You are? MEMBER OF THE AUDIENCE: Jason (inaudible). I represent Godfread and Cooper in some of the defamation cases. THE COURT: You represent Godfread? MEMBER OF THE AUDIENCE: Yes. THE COURT: So back in Minnesota, lawyers have lawyers? 24 25 Document 218-1 Filed 07/11/18», Page 37 of 100 Page ID #:3944 a 94 MEMBER OF THE AUDIENCE: I am from Massachusetts. THE COURT: And how can I help you? MEMBER OF THE AUDIENCE: I had a conversation with Mr. Gibbs probably back in October regarding AF Holdings where he told me that he was national counsel for AF Holdings and that any settlement negotiations were to be made through him. And the local counsel for that case confirmed that he was the one who told me to contact Mr. Gibbs. THE COURT: Have you come to understand as have I that every representation made by a lawyer associated with Prenda is not necessarily true? MEMBER OF THE AUDIENCE: I have known that for three years. THE COURT: Okay. Good. So you aren't shocked, are you? MEMBER OF THE AUDIENCE: No. THE COURT: Nor am I, but thank you. MEMBER OF THE AUDIENCE: You are welcome. Q BY MR. WAXLER: Mr. Gibbs, you know you are under penalty of perjury testifying here today? A That is correct. 0) Have you ever made a representation to a court in the Central District of California or any other court that you know is untrue? 1ST SE REPS eee Case 2:12-cv-08333-ODWe3C Document 218-1 Filed 07/11/1@, Page 38 of 100 Page ID all oo 24 25 #:3945 = 95 A No. THE COURT: Well, that isn't exactly accurate, is it? You have caused documents to be filed with, let's just be kind and say falsified signatures. THE WITNESS: Your Honor, I had no idea that these were allegations -- THE COURT: That is "yes" or "no". THE WITNESS: Your Honor, I think it is still an open question. THE COURT: Oh. No. It is. not an open guestion. We have had the individual testify under oath. Those were not his signatures on these documents. THE WITNESS: And that is the first time I have heard in terms of him saying out loud that he absolutely did not sign those papers, those exact papers. He said before he was not associated with the companies, but that is the first time I heard him say he did not sign those exact papers. THE COURT: Are you saying that you have had prior conversations with him where he either admitted or tacitly admitted tink he signed? THE WITNESS: No, your Honor. I haven't had any conversations with Mr. Cooper. THE COURT: That was my thought. I thought that you had never met the man. Case 2:12-cv-08333-ODW=JC Document 218-1 Filed O7/1 1/18 Page 39 of 100 Page ID — esl 24 25 #:3946 96 THE WITNESS: No. I never met the man. He never met me, and I have never talked with him. THE COURT: And you were acting on the representation of John Steele that -- THE WITNESS: And Paul Hansmeier. THE COURT: -- that they actually had the signatures, the authentic signature of the real Alan Cooper? THE WITNESS: Yes. I was told that. And I investigated that in terms of, you know, what is going on here when the first Alan Cooper issue arose, and I was told that there was no issue, that he -- that he did sign the document. And so I also did a little bit of research and found out that the assignor, even if the assignor is invalid, it still is a valid document. So combining those two things, I still believed -- I don't think I filed a case after that. It was just a matter of kind of addressing with these guys, and they were my sole information for this type of thing. THE COURT: Okay. You also indicated that you had on file the original or notarized signature of Alan Cooper, but you really don't, do you? THE WITNESS: No. No. TI never said I had on file. No. Prenda law or Steele Hansmeier had it on file. They told me they had it on file, and that is I AAS NASA NETRA, ™,Page 40 of 100 Page ID Case 2:12-cv-08333-ODW=J€ Document 218-1 Filed 07/11/1; al #:3947 ‘ 97 1 believe what was in the declaration. So I said, okay, 2 you know, do we have this notarized copy, do you guys 3 have it over there? I don't think I ever saw it, Dut 4 they told me, yes, we have copies of this, it is here, 5 and you can go ahead and file that based on our 6 representation to you. 7 THE COURT: Do you feel like you have been duped 8 by Hansmeier and Steele? 9 THE WITNESS: In away, yes. 10 THE COURT: Okay. This has been very 11 enlightening. 12 Q BY MR. WAXLER: Mr. Gibbs -- I just have a few more 13 your Honor. Mr. Gibbs, have you ever been a 30(b) (6) 14 witness for AF Holdings? 15 A No. 16 Q Have you ever been a 30(b) (6) witness for Ingenuity 17 13? 18 A No. 19 Q Have you ever received client funds in any of your 20 capacities as counsel affiliated with Steele Hansmeier or 21 Prenda Law? 22 A No. 23 Q The court expressed some disappointment in the 24 manner in which you described how you determined the 25 location of the houses that sat on the lots, and the Case 2:12-cv-08333-ODW3C Document 218-1 Filed 07/11/18», Page 41 of 100 aa , #:3948 Nad router, the ability for the router to pick up people who were not authorized to pick up that signal. And let me ask you some questions about that. A Sure. Q It is your understanding that when wireless routers are used and they determine what the distance is where they would be able to pick up a signal, that those determinations are made where there is an open field and not placed in the middle of a structure? A Yeah. I have read some reports on that and that the projections are basically favorable to them because there is no obstacles in the middle, there is nothing like walls or fences or bushes or trees which have a great effect on wireless signals. Q Tell me how you described the Denton residence and what facts you had to support your description of the Denton residence? THE COURT: Which city? Is this Santa Maria or West Covina? THE WITNESS: I believe it is the second one. MR. WAXLER: I will find it, your Honor. MR. PIETZ: Your Honor, I might suggest we look at Exhibit II which is the picture, the geographical Google maps picture of the two residences. THE COURT: That is why I wanted to know. I mean, Page ID 98 ETAL LAA STS ANARA RRNA AE SINT AIEEE ASTRA Case al aici, 1s Document 218-1 Filed 07/11/1, 24 25 .8,Page 42 of 100 Page ID #:3949 Nia 99 I went to Google Earth as well, and I just want to know which one we are talking about because in West Covina, you made some representations of fact that you cannot possibly know to be true. THE WITNESS: Well, your Honor, based on my personal knowledge of wireless networks, I believed they were true. THE COURT: I am talking about of the residence itself. It is a gated community. I'm sorry. I didn't mean to interrupt you. MR. WAXLER: I am happy to address that, your Honor. Q Mr. Gibbs, the map that you have seen that was offered by Mr. Gibbs and Mr. Pietz -- and I apologize if I am butchering your name, by the way -- MR. PIETZ: Pietz. MR. WAXLER: Pietz. Q That is not the type of map that you saw; correct? A No, that is not. Q Please describe the map that you looked at when you made the representations in the filings that we have done in this courthouse. A It was a map that you could go down the street, it is actually focused on the house, not on an overview like that, but it is on, basically, there is like a street anne ne ee SN OnE ETERS ON Case ia ieeedaks Si Document 218-1 Filed 07/11/18», Page 43 of 100 Page ID 24 25 #:3950 of 100 view. on Google that allows you to, like, look around the house essentially. Kind of. It is limited to a certain extent though. Q What did you see when you looked at that map? A IT saw a house that I believed it was likely not something that wifi could have broadcasted out to neighbors. Q Did you see a gate? A I did see a gate. Q Did you see several structures? A I did. Q Did you see bushes and shrubs and trees around, between the house structure and the street where someone might be driving by? A I did. Actually, the aerial view, I think, is even covering the house if I remember correctly. So, yeah, it is -- I mean, in terms of trees, there is a lot of trees there. Q And it is your understanding that the wireless signal doesn't just fly over these trees, does it? A No. Actually, I mean, there is just certain things that -- I mean, I think everyone kind of knows when they go into certain people's houses and say, hey, I want to use the wifi connection, there are certain rooms in the house that don't get, even in the same house that don't Case 2:12-cv-08333-ODWae Document 218-1 Filed 07/11/13, Page 44 of 100 eae oF 24 25 #:3951 get the wifi connection. So, yes, walls, trees, these things definitely have a dramatic effect. Sometimes, concrete wall, for instance, sometimes it just altogether stops something. That is my understanding of it. Q Was your description of the residence in West Covina when you signed your declaration and submitted these papers and we submitted these papers on your behalf accurate to the best of your knowledge. A Yes, it was. It was based on my personal knowledge. Yes. Q And do you still believe it is accurate despite the very different map that was submitted to the court? A That is correct. I believe that map might be -- I don't even know where the yards come, or I don't know how that works. Q Would the same be true for the residence in Santa Maria? A It was the same analysis essentially. It was just part of the full analysis, but yeah. Q In other words, there were walls, there were buildings, there were shrubs, all of which would block the signal and reduce by a great extent the range of the wireless network? A Yes. That was my impression from them, the street maps from Google. Page ID 101 Case 2:12-cv-08333-ODW-JC Document 218-1 Filed 07/11/18», Page 45 of 100 Page ID bal #:3952 Nail 102 1 MR. WAXLER: May I have one moment, your Honor? 2 THE COURT: Certainly. 3 Q BY MR. WAXLER: Mr. Gibbs, did you knowingly violate 4 the discovery orders from this court? 5 A No. 6 Q Did you cause to be served on the ISP providers the 7 October 19, 2012 discovery order by this court? 8 A Yes. I mean, at least, I thought I did. I had 9 requested it. 10 Q And it was your understanding that that was done? 11 A It was my understanding. I confirmed it 12 afterwards, and they said it was taken care of. 13 Q And the first time you learned that an ISP may not 14 have received a copy of that order was when? 15 A I believe it was in the response by the ISP, AT&T 16 possibly. ‘Va MR. WAXLER: I have nothing further, your Honor. 18 Thank you. 19 THE COURT: Okay. Thank you. But you started 20 getting responses from some of the Internet service 21 providers, didn't you? 22 THE WITNESS: I didn't get the responses. 23 THE COURT: All right. You filed a status report 24 with the court? 25 THE WITNESS: Yes. Case 2:12-cv-08333-ODW-IC Document 218-1 Filed 07/11/18" Page 46 of 100 Page ID cl #:3953 No? 103 1 THE COURT: Right? 2 THE WITNESS: Yes. 3 THE COURT: And at the time you filed that status 4 report, there had been no returns on those subpoenas; ies right? 6 THE WITNESS: Yes. 7 THE COURT: Then about a week later -- 8 THE WITNESS: Well, sorry, let me qualify my 9 answer. There were -- at that point, there was nothing 10 in the computers that showed there was any returns on the 11 subpoenas. 12 THE COURT: Okay. That changed a few days later. 13 THE WITNESS: It changed, I think, on the 7th. 14 Yes. 15 THE COURT: And, of course, you updated that 16 status report, you advised the court, then -- right -- 17 that suddenly, for whatever reason, people are now 18 starting to send you information on your subscribers; 19 right? You updated your filing, didn't you? 20 Actually, no, you didn't. 21 THE WITNESS: I didn't, your Honor, but if I can 22 explain why. 23 THE COURT: Yes. 24 THE WITNESS: Okay. So I did some investigation 25 on that, and what I was told, and, again, I don't handle Case ae ileal Gy Document 218-1 Filed 07/11/1, 24 25 m, Page 47 of 100 Page ID ed #:3954 104 the subpoenas. These are handled out of the Chicago and Minnesota offices. I was told that these things are usually delivered and that either hand-delivered or I believe mailed but most likely they are just a few blocks away. Like CT Corporation is just a few blocks away, that CT Corporation would send, mail back the information. I didn't realize that that information was faxed back by Verizon. I never knew that. And I did some investigation on it. And I, also, I talked to Paul Duffy, and the exact date of the court's order in that case, there had been -- he had had some eye surgery and he also had some trauma related to it. So what he said was he wasn't picking up his mail as frequently during that time period. So I thought that the information had been received essentially iy through his mailbox at that point but hadn't been input in the computer until later. So that was my understanding. That was my understanding of what had happened. Q BY MR. WAXLER: Do you now regret not advising the court when you learned on November 7th that Prenda Law had received information in response to those subpoenas and that there was information in the status report that was not correct? Case 2:12-cv-08333-ODW-JC Document 218-1 Filed 07/11/18")Page 48 of 100 Page ID #:3955 105 1 A | Absolutely. Absolutely. 2 MR. WAXLER: Thank you, your Honor. 3 THE COURT: Mr. Pietz. 4 5 CROSS-EXAMINATION 6 BY MR. PIETZ: 7 Q Mr. Gibbs, I would ask you to refer to the binder 8 that is there with you to Exhibit EE which is the 9 substitution of counsel that was filed apparently with 10 your CM/ECF account listing you as in house counsel for Abe AF Holdings. 12 A Yes, I am familiar with that document. 13 Q 3s Mr. Gibbs, just to clarify, then, your testimony 14 is that when you filed that document, that was an 15 accurate representation -- correct -- that you were at 16 that moment in house counsel for AF Holding? 17 A When I filed that document, I believed I was. What 18 I was told afterwards and after the deposition was that 19 that merger or that acquisition hadn't happened therefore 20 it was still owned by the trust. So I, essentially, Zu had been told to go ahead and file as in house counsel, 22 but, for some reason, Livewire didn't own AF Holdings at 23. that time. 24 Q So can you just pin down for me exactly when it was 25 that your capacity as in house counsel for AF Holdings Case sie ceececieediid Sr 2 Document 218-1 Filed 07/11/18™ Page 49 of 100 #:3956 begun and exactly when it terminated? A Well, my understanding was that -- my understanding when I was told that I was in house counsel for Livewire that I was therefore in house counsel for AF Holdings and the other companies as well, Ingenuity and Guava. And only did I find out later when I was exiting and I was already leaving all these cases essentially, only then, I found out that they had not actually acquired -- Livewire had not acquired AF Holdings according to Mr. Hansmeier. Q Mr. Gibbs, have you ever authorized anyone else to use your CM/ECF password? A I don't -- I might have. I don't know. Q Who? A An individual by the name of Carl. He worked for me, or he worked with me, I guess you would say. He actually worked for Prenda Law. Q How about John Steele? A No. I don't think so. Not to my knowledge. I am not saying -- in terms of authority, I did not, no. Q How about Paul Hansmeier, did you ever authorize him to use your CM/ECF password? A I don't believe so. I mean, I know he had my -- he had access to my passwords at one point, so he might have, yeah. Page ID 106 2 Case 2:12-cv-08333-ODW5C Document 218-1 Filed 07/11/18», Page 50 of 100 Page ID 24 25 Ly #:3957 Nol 107 re) What was your business telephone number while you worked for Prenda Law? A It was (415)325-5900. Q And what was your business e-mail address when you worked for Prenda Law? A It was blgibbs@wefightpiracy.com. QO Have you ever instructed Prenda local counsel to file pleadings using your business e-mail and business telephone number on the pleadings even though it was their name and physical address? A So, yes, my name is on -- my e-mail address and my number and my phone number is on certain cases in other states. I was instructed to do so like that by Paul Hansmeier. And, essentially, the way that was explained to me was that I would essentially forward all of the communications to the outside counsel. Yeah. So. MR. PIETZ: Before we move on any farther, I would ask that Exhibit EE be admitted into evidence as Exhibit TS Q Mr. Gibbs, I have some copies of a few different complaints, one that was filed by a local counsel in Nebraska and three complaints filed by local counsel in Florida all of which list the name of the local counsel, a mailing address in those respective states and an e-mail address, blgibbs@wefightpiracy.com and your 415 Case 2:12-cv-08333-ODW:J€ Document 218-1 Filed 07/11/13™)Page 51 of 100 bell #:3958 al 24 25 telephone number, is that consistent with your understanding of what the normal practice was at Prenda that your business e-mail and phone would be on pleadings all around the country? MR. WAXLER: Objection. Irrelevant, your Honor. THE COURT: Overruled. THE WITNESS: That was what I was instructed to do by Prenda, yeah, was to do that because I was essentially helping those guys out on their cases. It was their case, but, yes. 6) BY MR. PIETZ:I would ask Mr. Ranallo to pass out No. 2 which is the declaration of Matt Catlett, an attorney in Nebraska, and he is authenticating the service copy of the complaint filed in Nebraska listing Mr. Gibbs. I would ask that that be admitted into evidence as Exhibit 14. Similarly, Mr. Ranallo, if you weed be so kind as to pass out 3, 4 and 5 which are the complaint in Sunlust v. Nguyen, First Time Video. Here is Sunlust v. Nguyen. That is Middle District, Florida. We also have First Time Videos v. Paul Uphold and Openmind Solutions v. Barry Wolfson. MR. WAXLER: Your Honor, I would object to the introduction of those exhibits. THE COURT: Right. We don't need this. We have Page ID 108 Case 2:12-cv-08333-ODW«£ 24 25 ‘JE Document 218-1 Filed 07/11/13-sPage 52 of 100 Page ID al #:3959 or 109 basically got his testimony. MR. PIETZ: Fair enough. THE COURT: And we have got the testimony on the reason why, but I got to tell you, that doesn't sound reasonable to me that you would be inviting telephone calls, litigation in Florida on a case that you know nothing about. How do you field these calls? THE WITNESS: No, sir. I would pass the messages on to the other attorneys. THE COURT: Back to Florida? THE WITNESS: Yes. I would pass the messages on to them because, essentially, it was just easy for them at that point. I was like their secretary essentially, and that is the way that Prenda wanted to do it. THE COURT: Why? THE WITNESS: I don't know. I mean, they changed the practice at some point where people were putting their own e-mails, their own numbers, but I don't know why that was the way it was structured originally. And I don't know. I mean, I don't know who had access to my e-mail either. So I don't know, like, I have no idea if I was sent something or if someone else read it. Q BY MR. PIETZ: Did John Steele have access to your e-mail? Case 2:12-cv-08333-ODWs@ Document 218-1 Filed 07/11/13=,Page 53 of 100 L/ #:3960 a A He did. I don't know if he did throughout, but he did. Q Would he routinely respond to e-mail inquiries at 24 25 the blgibbs@wefightpiracy.com e-mail address? A T never knew it because he didn't CC me on them, or he didn't let me know he was doing them. But I believe he did. QO Did Paul Hansmeier have access to that e-mail address? A I think he had access. I have no idea whether he used it or not. Q How about Mr. Duffy, Paul Duffy, did he have access to that e-mail account? A I don't think so. Q Mr. Gibbs, earlier, you testified that some things were sent out with your signature stamped on there that didn't have your approval. I would like to refer now -- actually, before I venture any farther afield, I would ask that the court take judicial notice of the complaints I have just identified as Exhibits, I think, 15, 16 and ATs In any event, moving on, now, to what has been previously. identified in this action as Exhibit X, ask that it be admitted now as Exhibit 18. Essentially, I would just like to ask you a Page ID 110 EAMES AED SHANTI TLC AN ESET EET AGISHT aE re nn en one ESR HET Ten yANe eM OF OTaBETIN ONE. Case 2:12-cv-08333-ODW€ Document 218-1 Filed eileen 54 of 100 Page ID 24 25 ua # : 39 6 1 Nag 111 question to confirm. A sure. Q Is this the kind of letter you are talking about? This was a demand letter sent in the Guava, St. Clair County, Illinois case. I note that it is dated -- what is the date on it? January 30th. And it is, essentially, a, you know, a demand letter. And then I will go to the last page there. It has a pleading in. there. So, in any event, on the last page of the letter itself, there is a stamped aieeaewes what appears to be a stamped signature that says Brett Gibbs. Is it your testimony that this letter was sent out without your authorization? A That is my testimony. Q You had no knowledge whatsoever that this letter was being sent out? A No. Not with my name on it. I don't even remember -- no one ever told me about this before I found out. I actually found out through an opposing counsel that contacted me and wrote me a letter saying, basically, you know, you have nothing on my client, and you communicate through me. So I was kind of confused, but I eventually saw the letter, and it had my stamped signature on it. QO Mr. Gibbs -- I will represent to the court that Case 2:12-cv-08333-ODW£JE Document 218-1 Filed 07/11/13” aa #:3962 rd 112 1 this letter has been sent to over 300 Internet users 2 across the country. Have you done anything to correct 3 the fact that this letter went out with your signature on 4 it without your authorization? I note that it wee filed 5 in late January. 6 A Yeah. I actually talked with Mark Lutz, and Mark 7 said, I said, Mark, do not send any of these letters out 8 anymore that are, you know, please contact me and let me 9 know what is happening before you send out these letters. 10 And the response from Mr. Lutz was I don't control those il types of things, you have to talk with Paul and John. 12 Q Fair enough. Mr. Gibbs, have you ever hired local 13 counsel for Prenda Law? 14 A Actually, the hiring, no, because the hiring 15 process was done by John Steele. 16 Q Are you familiar with an attorney in Florida named 17 Matthew Wasinger? 18 A Yes. Yes. 19 Q Are you aware of the fact that Mr. Wasinger 20 testified under oath in federal court in Florida at the 21 Sunlust hearing that you hired him and that, as far as he 22 understood, you were a principal of Prenda law? Are you 23 aware of that, Mr. Gibbs? 24 MR. WAXLER: Objection, your Honor. It is 25 irrelevant. It is also hearsay. Case 2:12-cv-08333-ODWAse Document 218-1 Filed Ty 56 of 100 / #:3963 =, i MR. PIETZ: I am asking Mr. Gibbs if he is aware 2 Of 2. 2 THE COURT: Sustained. I have got the picture. 4 Okay. And I appreciate it. Thank you. 5 MR. PIETZ: I will move along, your Honor. 6 THE COURT: Okay. To what? Give me a blueprint. 7 MR. PIETZ: Fair enough, your Honor. I will 8 explain the broad strokes of the categories I have, and 9 whatever the court is interested in, we will move to 10 that. 11 In addition to a few more things about 12 Mr. Gibbs hiring, firing and even threatening local 13 counsel, I have evidence on him being delegated 14 independent authority to settle cases which he actually 15 concluded. Contrary to Mr. Gibbs' assertion which is a 16 little confusing in light of the fact that he says I 17 spoke to Mark Lutz, in any event, with respect to his 18 assertion that he never had any direct client contact, I 19 have a number of documents which actually show -- some of 20 which are Mr. Gibbs' own prior words showing that, in 21 fact, at least according to him, he was communicating 22 back and forth with the client, whatever that means, and 23 my theory is that that may mean John Steele. 24 But in any event, beyond the direct client 25 interaction, you know, I could ask Mr. Gibbs about his Page ID 113 Di cae aaa carne Case 2:12-cv-08333-ODW<# 24 25 See ee ep Sear a OTH ENOTES NM ENP EESGOME Document 218-1 Filed O7/11/1gesPage 57 of 100 Page ID Na #:3964 investigation in the case, about the petition, but those are the broad strokes, your Honor. If the court has got the picture, I don't need to necessarily get into all the documents. THE the client client has client is. Honor. MR. THE MR. THE MR. THE COURT: I do have the picture, and I know who is. We have talked about the client, and the been running everything. Yeah, I know who the PIETZ: Very good. COURT: Okay. Thank you. Gentlemen. Mr. Brodsky, you look bored. BRODSKY: I am not bored, your Honor. COURT: All right. WAXLER: We have no further questions, your COURT: All right. Unless anyone has anything else in terms of evidence to offer, the matter will stand submitted. All right. THE THE Thank you, sir. You may step down? WITNESS: Thank you, your Honor. COURT: Good luck to you. All right. How. about this, I will leave this up to counsel, if you wish. If you would like to sum up your position, you may do so at this time. It is not 114 Case 2:12-cv-08333-ODWAJC Document 218-1 Filed 07/11/18Page 58 of 100 Page ID Na Saga? 24 25 #:3965 ee L5 necessary. I am just making that offer. MR. WAXLER: Thank you, your Honor for giving us the opportunity to clear Mr. Gibbs' name, and what I would like to ada to the declarations that he has submitted and the papers that we have submitted is that Mr. Gibbs did not intend to disrespect this court or disobey any orders of this court. Mr. Gibbs had no knowledge that perhaps others may have knowingly or unknowingly disregarded some orders of this court in “terms of the service of the knowledge of the October 17th order. The order itself, you know, did not require service on the ISP's, but that was what Mr. Gibbs wanted to do. And that is the undisputed testimony here today that that is what he wanted to do was to have those ISP's notified of that. And he took no action whatsoever, your Honor, to do discovery, formal discovery of those ISP's or ask the ISP's to follow-up on the information provided. So Mr. Gibbs stands before you, your Honor, he is I think we could say humbled by this experience, and I think he is regretful that he has perhaps been put ina position where the court at least in the original OSC made comments suggesting that he was a culpable party here. And he is not, your Honor. And I hope you see it sh ec HSER RTA Case 2:12-cv-08333-ODWJ€ Document 218-1 Filed 07/11/13Page 59 of 100 Page ID VS #:3966 WW 116 1 that way too. 2 And I thank you very much for your time. 3 Appreciate the opportunity you have given us to clear his 4 name. 5 THE COURT: Thank you, counsel. 6 Anything from this side? You don't have to. 7 MR. PIETZ: I will keep it very brief, your Honor. 8 I can appreciate that there may be more 9 parties, other people who are more culpable than 10 Mr. Gibbs with respect to what has occurred in these 11 cases. However, I think the assertion that Mr. Gibbs is 12 merely an independent contract attorney is simply not 13 credible. I would just simply leave it at this, there is 14 ample evidence showing that Mr. Gibbs was been involved “15 since day one or at least very shortly thereafter ona 16 key level exercising operational control over this 17 litigation on a national basis. 18 So while I am sympathetic that perhaps toa 19 certain extent, maybe there are other people more 20 culpable, I will just leave it that certainly there is VAR ample evidence showing that Mr. Gibbs indeed played a key 22 role in all of this. 23 Thank .you, your Honor. 24 THE COURT: Okay. I just have one question, 25 gentlemen. Asa licensed attorney in this state, eT O SARE Case 2:12-cv-08333-ODW¢ Noa” #:3967 No particularly when it is only your name on the pleadings, don't you think you have some responsibility to assure the accuracy of those pleadings? Or is it permissible simply to go they told me to do so or the senior partner said they that Alan Alan it is okay, it may not have sounded right to me, but said it was okay. Could you do that really? MR. WAXLER: Your Honor, I am going to suggest that is not what happened on a key issue. THE COURT: Okay. MR. WAXLER: On a key issue, the issue involving Cooper, there was not one shred of information that Cooper wasn't Alan Cooper until Mr. Gottfried's letter in November of 2012 at which point Mr. Gibbs immediately questioned whether this was accurate or not. And the most important thing is that Mr. Gibbs filed no further pleadings after that time which purported to rely on Mr. its so me. Mr. Cooper being the assignee of AF Holdings. And so Gibbs reacted to the notion. He investigated and he did nothing further on He was assured that Alan Cooper was Alan Cooper, but he -- he did something other than said somebody told And on the other issues, your Honor, these were not examples of him relying on anybody else to do things that were improper. He was doing discovery. He was doing investigations. They were supervising him, but he was Document 218-1 Filed 07/11/13™Page 60 of 100 Page ID Case 2:12-cv-08333-ODW/JG Document 218-1 Filed 07/11/18" Page 61 of 100 Page ID aol #:3968 4 118 1 acting like a California lawyer doing what he thought in 2 his best judgment should be done as a California lawyer 3 in these cases. 4 THE COURT: All right. 5 MR. WAXLER: Thank you. 6 THE COURT: Thank you, counsel. 7 All right. Again, the matter stands 8 submitted. We are adjourned. 9 MR. WAXLER: Thank you, your Honor. 10 MR. PIETZ: Thank you, your Honor. 1A. (Proceedings concluded. } Case ieee dak Document 218-1 Filed 07/11/13~™,.Page 62 of 100 Page ID 24 25 = #:3969 O CERTIFICATE I hereby certify that pursuant to Section 753, Title 28, United States Code, the foregoing is a true and correct transcript of the stenographically reported proceedings held in the above-entitled matter and that the transcript page format is in conformance with the regulations of the Judicial Conference of the United States. Date: March 17, 2013 /s/ Katie Thibodeaux, CSR No. 9858, RPR, CRR Case 2:12-cv-08333-ODWJ€ Document 218-1 Filed 07/11/13 ed #:3970 ee Exhibit I NLA ERNE Seo A AEN? Case Oo oOo NY DA UA FSF BW WN fot oO :12-cv-08333-ODWIC Document 218-1 Filed 07/11/18™Page 64 of 100 Page ID in 2:12-cv-08333-ODW-JC Document‘s¢? 9 hed 03/14/13 Page 1of3 Page ID #:2133 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA INGENUITY 13 LLC, Case Nos. 2:12-cv-8333-ODW(JCx) Plaintiff, ORDER Vv. JOHN DOE, Defendant. The Court has received the Ex Parte Application filed on behalf of John Steele, Paul Hansmeier, Paul Duffy, and Angela Van Den Hemel, requesting the Court to withdraw its March 5, 2013 Order requiring their attendance on March 11, 2013. Based on the papers filed and the evidence presented during the March 11, 2013 hearing, the Court concludes there is at least specific jurisdiction over these persons because of their pecuniary interest and active, albeit clandestine participation in these cases. Not only does the Ex Parte Application lack merit, its eleventh-hour filing exemplifies gamesmanship. Accordingly, the Ex Parte Application is DENIED. The March 11, 2013 hearing raised questions concerning acts performed by other persons related to Prenda Law, Inc., Steele Hansmeier PLLC, Livewire Holdings LLC, AF Holdings LLC, Ingenuity 13 LLC, and 6881 Forensics, LLC. The evidence presented suggests these persons may be culpable for the sanctionable conduct explained in the Court’s February 7, 2013 Order to Show Cause, which the Court previously attributed to Brett Gibbs only. Further, it appears that these persons, and Case 1 oo wo HN Dn A Ff W LY a Oo NN HB vA FP WHO NO KH O&O :12-cv-08333- ODWely Document 218-1 Filed al 3 65 of 100 Page ID #:3972 2:12-cv-08333- opwic Document 86 Filed 03/14/13 Page 2o0f3 Page ID #:2134 their related entities, may have defrauded the Court through their acts and representations in these cases. Thus, the Court amends its February 7, 2013 Order to Show Cause (ECF No. 48) to include sanctions against the persons and entities in subparagraphs a~m below: a) b) c) d) e) f) g) h) i) j)) k) 1) m) John Steele, of Steele Hansmeier PLLC, Prenda Law, Inc., and/or Livewire Holdings LLC; Paul Hansmeier, of Steele Hansmeier PLLC and/or Livewire Holdings LLC; Paul Duffy, of Prenda Law, Inc.; Angela Van Den Hemel, of Prenda Law, Inc.; Mark Lutz, of Prenda Law, Inc., AF Holdings LLC and/or Ingenuity 13 LLC; Alan Cooper, of AF Holdings LLC; Peter Hansemeier, of 6881 Forensics, LLC; Prenda Law, Inc.; Livewire Holdings LLC; Steele Hansmeier PLLC; AF Holdings LLC; Ingenuity 13 LLC; and 6881 Forensics, LLC. These persons and entities ace ORDERED to appear on March 29, 2013, at 10:30 a.m., TO SHOW CAUSE for the following: 1) 2) Why they should not be sanctioned for their participation, direction, and execution of the acts described in the Court’s February 7, 2013 Order to Show Cause; Why they should not be sanctioned for failing to notify the Court of all parties that have a financial interest in the outcome of litigation; Se a Case 2;12-cv-08333- “ODWESY Document 218-1 Filed O7/LLgmyPage 66 of 100 Page ID #:3973 Case 2:12-cv-08333- opw- JC Document 86 Filed 03/14/13 Page 30f3 Page ID #:2135 a 3) | Why they should not be sanctioned for defrauding the Court by misrepresenting the nature and relationship of the individuals and entities in subparagraphs a—m above; 4) Why John Steele and Paul Hansmeier should not be sanctioned for failing to make a pro hac vice appearance before the Court, given their involvement as “senior attorneys” in the cases; and 5) Why the individuals in subparagraphs a-g above should not be sanctioned for contravening the Court’s March 5, 2013 Order (ECF No. 66) and failing to appear on March 11, 2013. Oo Oo YI DH A FH WW WN 10 Gibbs is ORDERED to serve a copy of this order on the persons and entities in 11 || subparagraphs a—m above by March 15, 2013, and must file proofs of service with the 12 | Court by March 18, 2013. Gibbs is further ORDERED to appear on March 29, 2013, 13 | at 10:30 a.m. 14 No other parties are required to appear on March 29, 2013. If so desired, 15 || Morgan E. Pietz and Nicholas R. Ranallo may appear on behalf of Defendant Doe. 16 Should the persons and entities in subparagraphs a~m above not appear on 17 || March 29, 2013, the Court is prepared to draw reasonable inferences concerning their 18 | conduct in the cases before the Court, including any inferences derived from their 19 | failure to appear. Failure to comply with this order will result in the imposition of 20 | sanctions. 21 IT IS SO ORDERED. vy March 14, 2013 UNITED STATES D ISTRICT JUDGE HEE TE OR EC TT TART Case 2:12-cv-08333-ODWAG Document 218-1 Filed 07/11/13, age 67 of 100 Page ID a #:3974 a Exhibit J : Case 2:12-cv-08333-ODW,3€ Document 218-1 Filed 07/11/1gePage 68 of 100 Page ID . & q a #:3975 () il UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA — WESTERN DIVISION HONORABLE OTIS D. WRIGHT UNITED STATES DISTRICT JUDGE PRESIDING Ingenuity 13 LLC, PLAINTIFF, vs. NO. CV 12-8333 ODW John Doe, et al., DEFENDANT, REPORTER'S TRANSCRIPT OF PROCEEDINGS LOS ANGELES, CALIFORNIA TUESDAY, APRIL 2, 2013 KATIE E. THIBODEAUX, CSR 9858 U.S. Official Court Reporter 312 North Spring Street, #436 Los Angeles, California 90012 UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA Case 2:12-cv-08333-ODWJ€ Document 218-1 Filed 07/11/13—™Page 69 of 100 Page ID % Sw #:3976 . APPEARANCES OF COUNSEL: FOR RESPONDENT GIBBS: WAXLER CARNER BRODSKY LLP BY: ANDREW J. WAXLER -and- BARRY BRODSKY 1960 E. Grand Avenue Suite 1210 El Segundo, CA 90245 FOR DEFENDANT: THE PIETZ LAW FIRM BY: MORGAN E. PIETZ 3770 Highland Avenue Suite 206 Manhattan Beach, CA 90266 —and- NICHOLAS RANALLO LAW OFFICES BY: NICHOLAS R. RANALLO 371 Dogwood Way Boulder Creek, CA 95006 FOR RESPONDENTS DUFFY, VAN DEN HEMEL & PRENDA LAW: KLINEDINST LAW OFFICES BY: HEATHER ROSING -and- PHILIP W. VINEYARD III -~and- DAVID M. MAJCHRZAK 501 W. Broadway Suite 600 San Diego, CA 92101 _ UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA Case 2:12-cv-08333-ODWJG Document 218-1 Filed 07/11/13™Page 70 of 100 Page ID WV #:3977 i) APPEARANCES: (Cont'd) FOR RESPONDENT HANSMETER: BAKER, KEENER & NAHRA LLP BY: PHILLIP A. BAKER -and- DANIEL PATRICK LEONARD 633 West Fifth Street Fifty-fourth Floor Los Angeles, CA 90071 FOR RESPONDENT STEELE: MURPHY, PEARSON, BRADLEY & FEENEY BY: THOMAS P. MAZZUCCO —-and- TIMOTHY J. HALLORAN 88 Kearny Street Tenth Floor San Francisco, CA 94108 UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA Case 2:12-cv-08333-ODWE Document 218-1 Filed imei <: Gea 710f100 Page ID ou #:3978 X } , ia 1 LOS ANGELES, CALIFORNIA; TUESDAY, APRIL 2, 2013 6 THE CLERK: Calling Item No. 1, CR 12-8333, ODW, 7 Ingenuity 13, LLC, versus John Doe, et al. 8 Counsel, please state your appearances. 9 MR. PIETZ: Morgan Pietz, P-I-E-T-Z, for the 10 putative John Doe defendant in 12-CV-8333. 11 MR. RANALLO: And Nicholas Ranallo for the same 12 13 THE COURT: Morning, counsel. 14 MR. WAXLER: Andrew Waxler and Barry Brodsky, both 15 for Brett Gibbs who is here today. 16 THE COURT: By the way, thank you for your L7 submittal with respect to your efforts to effect service. 18 Thank you. 19 MR. BAKER: Phil Baker and Dan Leonard specially 20 appearing for Paul Hansmeier. 21 MR. LEONARD: Morning, your Honor. 22 MR. BAKER: And he is present today. 23 THE COURT: Where? 24 MR. BAKER: Mr. Hansmeier, will you stand up. 25 THE COURT: Front row. UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA RASS ALAS SBR oR SSCA SSSI SSE Case 2:12-cv-08333-ODWAE Document 218-1 Filed 07/11/1 gmPage 72 0f100 Page ID = #:3979 Wy MR. HALLORAN: Morning your Honor. My name is Tim Halloran, Thomas Mazzacco on behalf of John Steele who is also present. THE COURT: Mr. Steele. MR. STEELE: Yes. MS. ROSING: Morning, your Honor. Heather Rosing with Klinedinst PC with my colleagues Phil Vineyard and Dave Majchrzak appearing on behalf of Paul Duffy, Angela Van Den Hemel and Prenda Law, and Mr. Duffy and Ms. Van Den Hemel are in the audience today. THE COURT: Thank you. Ts that it? MR. BAKER: Your Honor? THE COURT: Yes. MR. BAKER: There are other individuals pursuant to your order here. They are not represented. THE COURT: Mark Lutz? MR. BAKER: Yes, he is present. MR. LUTZ: Yes. THE COURT: Mr. Lutz, welcome, sir. Did Alan -- well, do we have an Alan Cooper? Any Alan Cooper? (No response.) THE COURT: All right. Peter Hansmeier? MR. HANSMETER: Yes, your Honor. THE COURT: Good morning, sir. 5 ere UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA Case 2:12-cv-08333-ODWéJG Document 218-1 Filed 07/11/13" — #:3980 \ B™Page 73 of 100 Page ID MR. HANSMEIER: Morning. THE COURT: Any representatives of any other representatives of Prenda Law, Livewire Holdings, AF Holdings other than Mr. Lutz, Ingenuity 13 other than Mr. Lutz and 6881 Forensics, LLC. MS. ROSING: Mr. Duffy is appearing on behalf of Prenda Law, your Honor. THE COURT: All right. Here is my interest, and we can proceed in any way that seems to make sense. I am pleasantly surprised that we have everyone here. Otherwise, I was going to be forced to draw reasonable inferences from the facts as I know them. It should be clear by now that this court's focus has now shifted dramatically from the area of protecting intellectual property rights to attorney misconduct such misconduct which I think brings discredit to the profession. That is much more of a concern now to this court than what this litigation initially was about. Mr. Steele -- well, let me do it this way. I have questions of Mr. Steele. Mr. Steele can choose to answer those questions or not. The same applies for Mr. Duffy and Mr. Hansmeier. Now, as the attorneys, how do you all propose we proceed? MR. BAKER: May I take the podium, your Honor? UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA % Case 2:12-cv-08333-ODWde Document 218-1 Filed 07/11/13™Page 74 0f 100 Page ID WY #:3981 ar ii 7 THE COURT: Well, actually, we don't have one, but we do have a lecturn and you are free to use it. MR. MAZZUCCO: Thomas Mazzucco on behalf of Mr. Steele. Your Honor, in light of some of the information that was in the transcript of March 11th, 2013 in this courtroom and some of the concerns that this court has mentioned, at this point in time, if Mr. Steele is called to testify, he is going to exercise his Fifth Amendment privilege against forced testimony. And we state for two reasons, one, there were serious allegations made by the court and others of not just attorney misconduct but the word fraud was used several times in the transcript. THE COURT: Should have been. MR. MAZZUCCO: The next step is there is also an issue involving attorney-client privilege. If Mr. Steele was to testify, that privilege belongs to the client. THE COURT: Which client might that be? MR. MAZZUCCO: That would be several of his clients. Mr. Halloran is going to handle that part of the argument, but that is a two pronged argument, your Honor. THE COURT: Are you talking about AF Holdings, Ingenuity 13, those clients? UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA Case 2:12-cv-08333-OD Se Document 218-1 Filed 07/11/13™)Page 75 of 100 Page ID WS #:3982 = oe a MR. MAZZUCCO: Yes. THE COURT: And you think there is a difference between those clients and Mr. Steele? MR. MAZZUCCO: I think there is, your Honor, yes. THE COURT: From what I know about this case, there is no difference at all, but that is why I am glad Mr. Steele is here. Maybe he can clarify some of those things, but if you say answering those kinds of questions would incriminate him, I'll take you at your word. MR. MAZZUCCO: No, your Honor. I'm not saying they are going to incriminate him. I said it is his Fifth Amendment privilege against forced testimony. There was language on the record from March 11th where this court made some accusatory statements about fraud upon the court, things that were in the transcript. THE COURT: Yes. MR. MAZZUCCO: You leave my client with no alternative but. THE COURT: To rebut those statements. MR. MAZZUCCO: He can rebut those statements in the proper venue, your Honor. This is an order to show cause in front of this court. THE COURT: Let's cut to the.chase. I am really not interested in -- I want to know if some of my conjecture is accurate. The only way I can find out is UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA 9 to have the principles here and answer those questions. Now, if you say he will not answer those questions, then I will draw whatever inferences I think are reasonable from the facts as I know them. This is an opportunity for him to protect himself, to defend and protect himself. It is up to him. So you are saying he doesn't want to answer any questions, fine. I am not going to go through the charade of asking the questions and have him assert the Fifth. MR. MAZZUCCO: Your Honor, he is not going to respond to your questions. THE COURT: All right. Fine. What about Mr. Hansmeier? What is his position, the same? MR. BAKER: The exact same, your Honor. THE COURT: All right. You may be seated. Mr. Duffy. MS. ROSING: Your Honor, Mr. Duffy and Ms. Van Den Hemel will also be taking the fifth amendment. Though, in response to your desire for additional information, I do have approximately 25 minutes of argument, and I do have some exhibits that are judicially noticeable. THE COURT: On what? Relevant to what? MS. ROSING: To the seven issues pending before UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA this court. THE COURT: Give me the Cliff Note version. Just give me a summary, what it is that you would like to -- MS. ROSING: Well, your Honor, what I would like to argue because my clients are entitled to a reasonable opportunity to be heard, we weren't allowed -- THE COURT: Excuse me. They are giving up that right to be heard. Now, what have you got to say that is under oath? MS. ROSING: Well, your Honor, my arguments are legal arguments. THE COURT: I know. I am looking for facts. I really am. I am not a looking for legal arguments. MS. ROSING: Well, your Honor -- THE COURT: Can you tell me, for example, who directs the litigation here in California? Who makes the | decision as to whether or not cases are dismissed or settled for how much money? Can you tell me that? MS. ROSING: Your Honor, I can't testify. THE COURT: "Yes" or "no", please. Because we need to move through this. Can you tell me that? MS. ROSING: I personally cannot tell you that, your Honor. THE COURT: All right. Do you know whether or not there is another Alan Cooper other than the one that was UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA Case 2:12-cv-08333-ODWIC Document 218-1 Filed 07/11/ aka” ; = #:3985 here at the last hearing? MS. ROSING: I am not aware of another Alan Cooper, your Honor. THE COURT: All right. Good. What happens to the ‘settlement money? MS. ROSING: Your Honor, obviously, I represent Mr. Duffy and Ms. Van Den Hemel. I don't have personal knowledge of any of this. THE COURT: Why weren't notices of related cases filed? Who made the decision to hide from the court the fact that all of these cases were related. MS. ROSING: I do have a judicially noticeable document on that, your Honor, where the Northern District declined to relate the cases. THE COURT: That is a different thing. That is sense iaat tas them. MS. ROSING: It is actually an order declining to relate them. THE COURT: Same plaintiff, same film, same causes of action, and they are not related? Excuse me? Okay. Tell me this. Who made the decision not to disclose to the court the fact that the law firms have a financial interest in the outcome of this litigation? MS. ROSING: Your Honor, there is no evidence ™,Page 78 of 100 Page ID iis UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA Case 2:12-cv-08333-ODW5C Document 218-1 Filed 07/11/12, Page 79 of 100 Page ID a #:3986 ‘au 12 before this court at all that the law firm or any, well, certainly, my clients, Paul Duffy or Angela Van Den Hemel, have any financial interest in the outcome of this litigation. THE COURT: Excuse me. Did you read Hansmeier's deposition? MS. ROSING: Yes, I did, your Honor. THE COURT: And then you make the statement you just made? MS. ROSING: Your Honor, there is no evidence that Mr. Duffy or Ms. Van Den Hemel who is a W2 paralegal at Prenda Law -- THE COURT: I understand that. MS. ROSING: And I would be happy -- THE COURT: Wait a minute. The money goes to Prenda Law's trust account; right? MS. ROSING: Your Honor, I have no personal knowledge, and I can't testify. But I do have an argument I would like to present to your Honor. THE COURT: Relative to what? To anything I just MS. ROSING: Well, your Honor, it is a legal argument with some objections and some judicially noticeable documents. THE COURT: Relative to what? UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA Case 2:12-cv-08333-ODW23C Document 218-1 Filed 07/11/18», Page 80 of 100 Page ID Naa” # 39 8 7 13 Naa MS. ROSING: Well, the seven issues before the court, the Alan Cooper issue, the discovery order issue, the Wagar investigation, the Denton investigation, Form CV30, the relationships, and March 11, the things that are noticed in this court's OSC. But, your Honor, we would be happy to submit this in a brief if that would be more -- | THE COURT: Good. Do that. Thank you. We are done. (Proceedings concluded. ) UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA Case 2:12-cv-08333-ODWIC Document 218-1 Filed 07/11/18», Page 81 of 100 Page ID a WY #:3988 CERTIFICATE I hereby certify that pursuant to Section 753, Title 28, United States Code, the foregoing is a true and correct transcript of the stenographically reported proceedings held in the above-entitled matter and that the transcript page format is in conformance with the regulations of the Judicial Conference of the United States. Date: April 5, 2013 /s/ Katie Thibodeaux, CSR No. 9858, RPR, CRR UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA ARRAN ALL TAR STARTS MRR TARR SSE BS SORES ESRS PSE IPEASASSESSSN COMMERCE ANAT ATRNTSIM Case 2:12-cv-08333-ODWedC Document 218-1 Filed 07/11/18», Page 82 of 100 Page ID Nai” #:3989 er | Exhibit B~ 2:12-cv-8333-ODW (JCx) iNKT GDRRTES Case acc ay Document oes _Filed 07/11/18», Page 83 of 100 Page ID Nae” +: 990 fe a ea Office of the Chief Trial Counsel/intake The State Bar of California 4149 South Hill Street Los Angeles, California 90015 Dear Sirs, My name is John Steele and | am filing this bar complaint against a California attorney named Brett Gibbs (“Attorney Gibbs’). | understand his bar number to be 951000, | am an attorney myself and am licensed solely in the state of Illinois. This is the first bar complaint | have ever filed, and | do not take this action lightly. Background Attorney Gibbs was a senior attorney at a law firm named Prenda Law, Inc. (‘Prenda”) until sometime earlier this year. Attorney Gibbs represented a number of Prenda’s clients, including AF Holdings LLC ("AFH") and ingenuity 13 LLC (“113”). | have attached an affidavit from the manager of those two entities, Mark Lutz, who was the person in charge of both AFH and 113 (Exhibit A). That affidavit makes clear that Attorney Gibbs was the only attorney for AFH and !13 throughout the entire state of California during the relevant time period. It is my understanding that Attorney Gibbs directly handled hundreds of cases in California and supervised hundreds of cases outside of California that were handled by local counsels. | have attached an email AFH sent to me showing Attorney Gibbs directing local counsel in Georgia. (Exhibit B). Apparently, in several cases, Attorney Gibbs filed pleadings that were patently hostile to the sitting judge in the matter, most notably Judge Otis T. Wright, Il of the U.S. District Court for the Central District of California (case 2:12-cv-8333- SVW(PJWx). On February 7, 2013, Judge Wright issued an Order to Show Cause against Attorney Gibbs for his conduct in that matter (Exhibit C). Relevant facts regarding my involvement « | have never represented any individual or company in any case in the State of California in my entire life. | have never filed a single pleading, memorandum, or other document with any court in the State of California prior to March 2013 (a search on ECF will confirm this). | have never appeared in any court in California prior to April 2013. To the best of my recollection, | have not even stepped foot in the state of California as an adult, except for two days in 2012 (vacation) and two days in April 2013 (discussed below). « | have never filed a pro hac vice application to appear in a California case. In my entire legal career, | have appeared a total of two times outside the state of lilinois. Once in Minnesota, Case 27-CV-12-17079, and once in Washington DC, Case 12-0048 (BAH). Case 2:12-cv-08333-ODW*3C Document 218-1 Neca 3 #:3991 * {have never had an ownership interest in Prenda Law Inc. | have attached a screenshot from the Illinois Secretary of State (Exhibit D) and an affidavit from the actual owner of Prenda (Exhibit E). | do not have an ownership interest in any other law firm. 1 live in Florida, where | am not licensed to practice law and do not practice law. | do not have any law clients, a law firm website, a law firm phone number, a trust account, or any other indices of practicing law. * | have never had an ownership interest in AF Holdings LLC or Ingenuity 13, and have attached an affidavit from the actual person who controls both entities attesting to that fact (Exhibit A). - | want to make it clear that | never read, prepared, reviewed, modified, discussed, or was in any way involved withthe. pleadings filed by Attorney Gibbs in the Judge Wright matter. My first knowledge of the case was when a third party told me sometime in February 2013 that Attorney Gibbs was in trouble for insulting a judge in California... .--.,. -- March 11, 2013, Hearing | was stunned upon reading the transcript of the March OSC hearing (“Exhibit F"). Attorney Gibbs told Judge Wright that me and a Minnesota attorney named Paul Hansmeier supervised him in all of his cases and that he was essentially a “secretary” for Mr. Hansmeier and myself. This is a complete and unequivocal lie. There is no other way to describe it. At the time Attorney Gibbs lied to Judge Wright, | had absolutely no relationship to that case. Also, the court docket is clear that Attorney Gibbs was the only counsel for AFH and 113 in the case before Judge Wright. Attorney Gibbs was the only person to sign pleadings in the case or appear at hearings in front of Judge Wright regarding AFH from the beginning of the case until it was dismissed. Furthermore, AF Holdings, through its manager, makes it clear that it only had one attorney and that his name was Brett Gibbs. But the most damning evidence as to Attorney Gibbs’ true role is his own words. | have attached a few emails that Attorney Gibbs sent to various attorneys he supervised: ¢ “Please note that my information is everywhere that it can legally be. This is because we are trying to drive all of the phone calls to me, so we don’t have to burden local counsel with settlement discussions" (May 19, 2012 email to Minnesota counsel) * “Attached are .pdf documents for a new case to file in Illinois, Western District. . . All you will need to do is draft the civil cover sheet, and file these. . . (Email to Paul Duffy instructing him to file a complaint, corporate disclosure documents and other papers Attorney Gibbs had prepared.) * “fl talked with the Unauthorized Practice of Law Department in Florida. _. | can still participate in these cases if | have reasonable expectation of being allowed to be admitted in pro-hac if |.were to apply .. . feel Filed oni Page 84 of 100 Page ID ar aia vite INDUS LOANS RAREST NASIR NNT NAMED SIENA LRP TLECAT RDNA SOOPER ESDEAS SINE SESNSNSSSEERISSSSSS SSSI Case 2:12-cv-08333-ODWe3C Document 218-1 Fi a é iled 07 J iw #3992 es 85 of 100 Page ID a free to tell Syfert to contact me for settlement negotiations on the [redacted] and [redacted] clients. (Email to a Florida focal counsel on August 28, 2012) + “While we are drafting the Responses, we need to make sure you are available tomorrow to file them.” (Email to Florida local counsel). * “Good sign . . . educating the judicial system, one judge at a time. Though, how arrogant is this judge? “No, your honor, we are not the idiots here . . . itis clearly you and your staff without with [sic] requisite mental facilities” (October 25, 2012 email). (Exhibit G) 1 would submit that when ! actually did practice law, none of my secretaries made comments like those of Attorney Gibbs. in addition, the attached affidavit from Jacques Nazaire makes clear that Attorney Gibbs was his supervising attorney. Attorney Nazaire stated, “On the occasion when | needed to speak with a representative for AF Holdings, LLC, my point of contact was Brett Gibbs, who | understood to be the lead counsel for all the AF Holdings cases nationwide.” He further stated, “I have spoken infrequently to Mr. John Steele over the past years.” As of the filing of this complaint, | have been able to reach out to three other attorneys who were also counsels of record for AF Holdings and Ingenuity 13 in various states. Based on their statements to me, |.believe they would corroborate Attorney Nazaire’s affidavit. | would certainly provide additional information on this issue if your office desires. April 2, 2013 Hearing .. Based on Attorney Gibbs’ perjury to Judge Wright, the court issued an OSC against me and other people that also had nothing to do with this case. { was ordered to appear in front of Judge Wright on April 2, 2013. Obviously, as an officer of the court, | complied with the Judge’s order and flew to L.A at great personal expense. Since | had absolutely no idea what the case was about, and based on advice of counsel, | invoked my 5th Amendment right not to testify. Although this may seem strange, | simply had no idea of what was going on in the case. As 1 stated earlier, prior to preparing for my April 2, 2013 appearance in front of Judge Wright, | had not read a single document in the case. The OSC hearing involving me, Pail Hansmeier, AFH, 113, Prenda Law, Paul Duffy, and two paralegals lasted a total of 12 minutes and no evidence whatsoever was submitted. No testimony was taken, and no witnesses were sworn in. | have attached the transcript (Exhibit H). On May 6, 2013 Judge Wright issued an order based solely on Attorney Gibbs perjurous statements made at the March hearing that | did not attend (Exhibit |). 1 appealed the sanctions order to the Ninth Circuit for the reasons stated above (Exhibit J). ; Case 2:12-cv-08333-ODWSC Document 218-1 Filed 07/11/12», Page 86 of 100 Page ID #:3993 ia To the best of my knowledge, there has never been any evidence introduced in any court in this country to show | had any ownership interest in Prenda, AFH, or 113. That is because | do not have, and have never had, any ownership interest in any of those entities. Attorney Gibbs knows | have no involvement in his case in front of Judge Wright. He is simply trying to escape responsibility for his own inappropriate behavior in cases throughout the state of California. Further misconduct by Attorney Gibbs To add insult to injury, Attorney Gibbs, failed to timely send me the pleadings he filed in the Judge Wright case after April 2, 2013, as required by local rules. Attorney Gibbs is licensed in the U.S. District for the Central District of California. According to L.R. 5-3.1.1: Documents presented to the Clerk for filing or lodging in paper format pursuant to L.R. 5-4.2 must be served in accordance with F.R.Civ.P. 5. All documents served under this L.R. 5-3.1.1 must be accompanied by a proof of service in the form required. L.R. 5-3.17.2. (Emphasis added). F.R.Civ.P 5 makes it clear that Attorney Gibbs was required to serve me with the pleadings he filed with the court According to the U.S. District for the Central District of California’s application for admission, prior to being admitted: “Applicants must certify that they are familiar with this Court’s Local Civil and Criminal Rufes, and with the Federal Rules of Civil Procedure, Criminal Procedure, and Evidence. (Emphasis added) (Exhibit |). | am appearing pro se in the Judge Wright matter and do not have an ECF account. Further, | have not consented to any alternative forms of service. Attorney Gibbs failure to serve me (and other pro se parties in the Judge Wright case) was not an accident or a one time mistake. He never timely served me with any of his filings. And there is a very good reason for why he purposely violated L.R. 5-3.1.1 and F.R.Civ.P 5: He knew if | had an opportunity to object to his pleadings, he would have had a more difficult time lying to Judge Wright. Attorney Gibbs, who now works with the opposing counsel in the case against his own client AFH, obtained leave from an ex parte order from Judge Wright ordering me (and others) to pay an additional $135,000 bond if | want to continue appealing the April order. (Exhibit J). 1 would note that | finally received all the pleadings in the case in a package postmarked July 2, 2013, 9 days ago. | still have the physical package with the postmark on it. Case cee el 15): Document 218-1 Filed 07/11/18», Page 87 of 100 Page ID #:3994 Lae Naa? Conclusion Attorney Gibbs acted inappropriately in a case in front of Judge Wright and fited pleadings that insulted the court. When he was forced to answer for his misconduct, he lied and blamed others who had no relation to the case. Then to avoid having to pay the sanctions award in that case, he teamed up with the opposing counsels (Mr. Pietz and Mr. Ranallo) to file joint pleadings with them against his own client and others such as myself who have nothing to do with Mr. Gibbs’ conduct in California. lam fully prepared to submit an affidavit regarding the above claims, or provide any additional information your office requests of me regarding this matter. | have already expended countless hours defending myself from the repercussions. of Attorney Gibbs outrageous lies. As your office can see from Judge Wright's order of May 6, 2013, the court referred me to the IRS CID, the US Attorney's office, the Illinois State Bar, and the Central District of California for investigation. | am not worried about these investigations, as | did nothing wrong. But the very fact that | face disbarment from the Central District of California when | have never even applied for admission is surreal. Attorney Gibbs’ false statements, which he cannot substantiate with any evidence whatsoever, have ruined my reputation and caused mea great deal of harm. | was forced to contribute to a $100,000 bond in order to appeal the sanctions order entered by Judge Wright. | believe that once your office begins an investigation into the allegations raised in this complaint, it will be very disturbed by what Attorney Gibbs has done not only to me. and other attorneys, but to his own current (and former) clients. What really frustrates me about Attorney Gibbs behavior was that he hurt more than just the attorneys like myself who had nothing to do with his case. He also inflicted large financial burdens and difficulties on low-level paralegals and administrative staff when he lied to Judge Wright-and claimed that they were also responsible for his own unethical behavior. Finally, | would ask the attorney reviewing this matter to imagine yourself sitting in your home, three time zones away from a case you had never heard of in front of a judge you had never heard of in a state where you had never practiced law. All of a sudden, you are ordered to appear to discuss a case you have no relation to. Then you have to post a combined $235,000 bond to appeal the resulting sanctions order. And there is no actual evidence against you. Nothing but self-serving testimony from an ethically challenged California attorney looking to escape his conduct. Jolin Steele | 414 Lincoln Road Suite 400 Miami Beach, FL 33139 (708) 689-8131 Case einai! Document 218-1 ‘ Page 88 of 100 Page ID #:399 ; Filed 07/11/13~ 5 Nal Exhibit A i iti Case 2:12-cv-08333- el Document 218-1 Filed 07/11/18», Page 89 of 100 Page ID #:3996 X& cor AFFIDAVIT OF MARK LUTZ 1, Mark Lutz, declare under penalty of perjury as true and correct: 1. | am over eighteen years of age and am competent to testify as to the . matters set forth herein. 2. | am the manager of both AF Holdings LLC (“AF”) and Ingenuity13 LLC (“Ingenuity”). 3. | have never met or heard of anyone named Salt Marsh. No individual by that name has ever been involved with AF or Ingenuity. 4. Neither John Steele, Paul Hansmeier, or Paul Duffy, has ever had any ownership interest in, or control whatsoever of AF or Ingenuity. 5. | filed a bar complaint against Brett Gibbs on July 10, 2013 due to his misconduct regarding his representation of AF Holdings LLC in hundreds of cases across the country, including case number 2:12-cv-08333-ODW- JC in front of Judge Wright. 6. Brett Gibbs is the only attorney that AF or Ingenuity ever retained to perform legal work related to case 2:12-cv-08333-ODW-JC in front of Judge Wright. Mr. Gibbs was the only attorney that discussed that case with me. John Steele has never represented Ingenuity or AF in any case in any case in the state of California. 7. | have read the bar complaint being filed by John Steele against Mr. Gibbs and have no objections to the information about me, AF, or Ingenuity 13 that is being used in that complaint. In fact, most of the facts in his complaint | am personally aware of and believe happened as described in Mr. Steele’s complaint against Mr. Gibbs. i. Zt glohis Mark Lutz State of Florida County of Miami Dade The foyagoing instrument was acknowledged before me this 10* day of July, 2013 by Mark Lutz J produced, Florida Drivbr License as identification. Name a EESSDS _ PIRES Seay 1 2015 - BY Peer Asse. Ca § Case 2:12-cv-08333-ODVWSe Document 218-1 Sao #:399 Filed 07/11/18», Page 90 of 100 Page ID ord 7 Exhibit B Case ait! is a Document 218-1 Filed ele | Page 91 of 100 Page ID ol #:3998 =) > From: Jacques Nazaire > Date: Fri, Jan 18, 2013 at 12:43 PM > Subject: Re: Letters to Send Out ASAP > To: Brett Gibbs > > > Here it is. Let me know if you need anything else. Thanks. > > > -Jacques > > On Fri, Jan 18, 2013 at 1:24 PM, Brett Gibbs wrote: — > > Jacques: >> > > Yes, we can email you a copy of each letter that we plan to send out prior > >to sending. We will send you a copy of all of the letters we intend to > > send out (in bulk) and then check to see if you have any issue in sending > > those out. If you do not respond that you have any issues, we will send > > those out the next day. >> > > ALSO -- we have a hacker version of the letter (attached) that we would > > like to send out. Please review/edit and send back your approved version > > of that as well. >> > > Thanks, >> > > Brett >> >> P > > On Fri, Jan 18, 2013 at 9:53 AM, Jacques Nazaire < > > nazaire.jjacques@gmail.com> wrote: >> > >> Good Afternoon Brett: > >> > >> Attached please find the generic letter. I toned it down a bit. I don't > >> want the Bar to accuse me of taking unfair advantage of potential > >> litigants. If your staff has the time, please have someone email me a copy > >> of each letter before sending them out. Thank you. >>> > >> -Jacques Case 2:12-cv-08333-ODW:3C Document 218-1 Filed 07/11/13», Page 92 of 100 Page ID LS #:3999 ae Exhibit C Case 2:12-cv-08333- dea “aC Document aie 1 Filed a ac Page 93 of 100 Page ID 4000 Case 2:12-cv-08333- opwic Document 48 Filed 02/07/13 Page 1 of 1 Page ID #:600 poomd UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA Oo Oe NI DN UH SP W NH INGENUITY 13 LLC, Case Nos. 2:12-cv-8333-ODW(JCx) Plaintiff, ORDER TO SHOW CAUSE RE v. SANCTIONS FOR RULE 11 AND LOCAL RULE 83-3 VIOLATIONS JOHN DOE, a ed No FS © — Ww Defendant. — The Court hereby orders Brett L. Gibbs, attorney of record for AF Holdings LLC and Ingenuity 13 LLC, to appear on March 11, 2013, at 1:30 p.m., to justify his violations of Federal Rule of Civil Procedure 11 and Local Rule 83-3 discussed | — oe SI DH AN herein.' A. Legal Standard The Court has a duty to supervise the conduct of attorneys appearing before it. Erickson v. Newmar Corp., 87 F.3d 298, 301 (9th Cir. 1996). The power to punish contempt and to coerce compliance with issued orders is based on statutes and the Court’s inherent authority. Int’l] Union, United Mine Workers of Am. v. Bagwell, 512 NO NO NY NY NY KH Ke BR WwW NO —§|§ CO OO C&C ' The violations discussed herein were committed in the following related cases: AF Holdings LLC v. Doe, No. 2:12-cv-6636-ODW(JCx) (C.D. Cal. filed Aug. 1, 2012); AF Holdings LLC v. Doe, No. 2:12-cv-6669-ODW(JCx) (C.D. Cal. filed Aug. 2, 2012); Ingenuity 13 LLC v. Doe, No. 2:12-cv- 6662-ODW(JCx) (C.D. Cal. filed Aug. 2, 2012); Ingenuity 13 LLC v. Doe, No. 2:12-cv-6668- ODW(JCx) (C.D. Cal. filed Aug. 2, 2012); Ingenuity 13 LLC v. Doe, No. 2:12-cv-8333-ODW(JCx) (C.D. Cal. filed Sept. 27, 2012). To facilitate this matter, Mr. Gibbs will be given the opportunity to address these violations together in one hearing rather than in several separate hearings. NH NY NY WN ao “sD UN HEISE SETS ESCHER AAR EAE aN Case 2:12-cv-08333- ODV) ae Document 218-1 Filed les er 94 of 100 Page ID #:4001 } Cas 2:12-cv-08333- ODW- JC Document 48 Filed 02/07/13 page 2of11 Page ID #:601 — U.S. 821, 831 (1994). And though this power must be exercised with restraint, the Court has wide latitude in fashioning appropriate sanctions to fit the conduct. See Roadway Express, Inc. v. Piper, 447 U.S. 752, 764-65 (1980). B. Rule 11(b)(3) Violations By presenting a pleading to the Court, an attorney certifies that—after conducting a reasonable inquiry—the factual contentions in the pleading have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery. Fed. R. oO Oo IN DN AH BP WY NY Civ. P. 11(b)(3). This precomplaint duty to find supporting facts is “not satisfied by 10 | rumor or hunch.” Bankers Trust Co. v. Old Republic Ins. Co., 959 F.2d 677, 683 (7th 11 |} Cir. 1992). The reasonableness of this inquiry is based on an objective standard, and 12 || subjective good faith provides no safe harbor. Golden Eagle Distrib. Corp. v. 13 || Burroughs Corp., 801 F.2d 1531, 1538 (9th Cir. 1986); F.D.LC. v. Calhoun, 34 F.3d 14 | 1291, 1296 (5th Cir. 1994); Knipe v. Skinner, 19 F.3d 72, 75 (2d Cir. 1994). The 15 || Court wields the discretion to impose sanctions designed to “deter repetition of the 16 | conduct or comparable conduct by others similarly situated.” Fed R. Civ. P 11(c)(4). 17 In Ingenuity 13 LLC v. Doe, No. 2:12-cv-6662-ODW(JCx) (C.D. Cal. filed 18 || Aug. 2, 2012), the Court ordered Plaintiff on December 20, 2012, to show cause why 19 || it failed to timely serve the Defendant or, if the Defendant has already been served, to 20 || submit the proof of service. (ECF No. 12.) In response, Plaintiff noted that the delay 21 || was because it waited to receive a response from the subscriber of the IP address 22 || associated with the alleged act of infringement. (ECF No. 14.) Plaintiff further noted: 23 || “Though the subscriber, David Wagar, remained silent, Plaintiff's investigation of his 24 || household: established that Benjamin Wagar was the likely infringer of Plaintiff's 25 || copyright.” (ECF No. 14, at 2.) Based on this investigation, Plaintiff filed an 26 | Amended Complaint, substituting Benjamin Wagar for John Doe. (ECF No. 13.) 27 Plaintiff's Amended Complaint alleges the following in connection with 28 | Benjamin Wagar: Case 2:12-cv-08333- pela oS Document ee 1 Filed ileal 36 | Page 95 of 100 Page ID 4002 Case 2:12-cv-08333- sans Document 48 Filed 02/07/13 Page 3ofi11 Page ID #:602 Co Oe NN DH OA Ff WY NH ry OA Fe Wo NO —-| © 16 e “Defendant Benjamin Wagar (‘Defendant’) knowingly and illegally reproduced and distributed Plaintiff's copyrighted Video by acting in concert with others via the BitTorrent file sharing protocol and, upon information and belief, continues to do the same.” (AC 4 1); e “Defendant is an individual who, upon information and belief, is over the age of eighteen and resides in this District.” (AC § 4); e “Defendant was assigned the Internet Protocol (‘IP’) address of 96.248.225.171 on 2012-06-28 at 07:19:47 (UTC).” (AC 4 4); e “Defendant, using IP address 96.248.225.171, without Plaintiff's authorization or license, intentionally downloaded a torrent file particular to Plaintiffs Video, purposefully loaded that torrent file into his BitTorrent client—in this case, Azureus 4.7.0.2—entered a BitTorrent swarm particular to Plaintiff's Video, and reproduced and distributed the Video to numerous third parties.” (AC § 22); e “Plaintiff's investigators detected Defendant’s illegal download on 2012- 06-28 at 07:19:47 (UTC). However, this is a [sic] simply a snapshot observation of when the IP address was observed in the BitTorrent swarm; the conduct took itself [sic] place before and after this date and time.” (AC § 23); e “The unique hash value in this case is identified as F016490BD8E60E184EC5B7052CEBIFAS70A4AF 11.” (AC { 24.) In a different case, Ingenuity 13 LLC v. Doe, No. 2:12-cv-6668-ODW(JCx) (C.D. Cal. filed Aug. 2, 2012), Plaintiff essentially makes the same response to the Court’s December 20, 2012 Order To Show Cause (ECF No. 12): “Though the subscriber, Marvin Denton, remained silent, Plaintiff's investigation of his household established that Mayon Denton was the likely infringer of Plaintiff's copyright.” (ECF No. 13, at 2.) And based on this information, Plaintiff filed an Amended Complaint (ECF No. 16), similar in all respects to the one filed against Benjamin Case 2°12-cv-08333- belek a Document 218-1 Filed Or Ley Page 96 of 100 Page ID Cas #:4003 2:12-cv-08333- ODW- JC Document 48 Filed 02/07/13 Page 4ofi1 Page ID #:603 Wagar in Ingenuity 13 LLC v. Doe, No. 2:12-cv-6662-ODW(JCx) (C.D. Cal. filed Aug. 2, 2012), with the following technical exceptions: e “Defendant was assigned the Internet Protocol (‘IP’) address of 75.128.55.44 on 2012-07-04 at 07:51:30 (UTC).” (AC ¥ 4); e “Defendant . . . purposefully loaded that torrent file into his BitTorrent client—in this case, uTorrent 3.1.3....” (AC § 22); e “The unique hash value in this case is _ identified as 0D47A7A035591 BOBA4FASCB86AFE986885FS5E18E.” (AC { 24.) Upon review of these allegations, the Court finds two glaring problems that Plaintiff's technical cloak fails to mask. Both of these are obvious to an objective observer having a working understanding of the underlying technology. i. Lack of reasonable investigation of copyright infringement activity The first problem is how Plaintiff concluded that the Defendants actually downloaded the entire copyrighted video, when all Plaintiff has as evidence is a “snapshot observation.” (AC § 23.) This snapshot allegedly shows that the Defendants were downloading the copyrighted work—at least at that moment in time. But downloading a large file like a video takes time; and depending on a user’s Internet-connection speed, it may take a long time. In fact, it may take so long that the user may have terminated the download. The user may have also terminated the download for other reasons. To allege copyright infringement based on an IP snapshot is akin to alleging theft based on a single surveillance camera shot: a photo of a child reaching for candy from a display does not automatically mean he stole it. No Court would allow a lawsuit to be filed based on that amount of evidence. What is more, downloading data via the Bittorrent protocol is not like stealing candy. Stealing a piece of a chocolate bar, however small, is still theft; but copying an encrypted, unusable piece of a video file via the Bittorrent protocol may not be copyright infringement. In the former case, some chocolate was taken; in the latter case, an encrypted, unusable chunk of zeroes and ones. And as part of its prima facie peach Co OF NI DN HH FF WH NH :12-cv-08333- aah! Sg Document 218-1 Filed O7/1 Ley Page 97 of 100 Page ID #:4004 2:12-cv-08333- opw. “JC Document 48 Filed 02/07/13 Bie 5of11 Page ID #:604 copyright claim, Plaintiff must show that Defendants copied the copyrighted work. Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991). If a download was not completed, Plaintiff's lawsuit may be deemed frivolous. In this case, Plaintiff's reliance on snapshot evidence to establish its copyright infringement claims is misplaced. A reasonable investigation should include evidence showing that Defendants downloaded the entire copyrighted work—or at least a usable portion of a copyrighted work. Plaintiff has none of this—no evidence that Defendants completed their download, and no evidence that what they downloaded is a substantially similar copy of the copyrighted work. Thus, Plaintiffs attorney violated Rule 11(b)(3) for filing a pleading that lacks factual foundation. 2. Lack of reasonable investigation of actual infringer’s identity The second problem is more troublesome. Here, Plaintiff concluded that Benjamin Wagar is the person who illegally downloaded the copyrighted video. But Plaintiff fails to allege facts in the Amended Complaint to show how Benjamin Wagar is the infringer, other than noting his IP address, the name of his Bittorrent client, and the alleged time of download.” Plaintiff's December 27, 2012 Response to the Court’s Order to Show Cause re Lack of Service sheds some light: Though the subscriber, David Wagar, remained silent, Plaintiff's investigation of his household established that Benjamin Wagar was the likely infringer of Plaintiff's copyright. As such, Plaintiff mailed its Amended Complaint to the Court naming Benjamin Wagar as the Defendant in this action. (ECF No. 14, at 2.) The disconnect is how Plaintiff arrived at this conclusion—that the actual infringer is a member of the subscriber’s household (and not the subscriber himself or anyone else)—when all it had was an IP address, the name of the Bittorrent client used, the alleged time of download, and an unresponsive subscriber. ? This analysis similarly applies in Ingenuity 13 LLC v. Doe, No. 2:12-cv-6668-ODW(JCx) (C.D. Cal. filed Aug. 2, 2012), where Plaintiff fails to allege sufficient facts to show how Mayon Denton is the infringer. a >12-cv-08333-OD Z 4005 2:12-cv-08333- ODW- JC Document 48 Filed 02/07/13 Page 6 of 11 Page ID #:605 h “JC Document ree 1 Filed ies 3 Page 98 of 100 Page ID Plaintiff's December 27, 2012 Discovery Status Report gives additional insight into Plaintiff's deductive process: In. cases where the subscriber remains silent, Plaintiff conducts investigations to determine the likelihood that the subscriber, or someone in his or her household, was the actual infringer. .. . For example, if the - subscriber is 75 years old, or the subscriber is female, it is statistically quite unlikely that the subscriber was the infringer. In such cases, Plaintiff performs an investigation into the subscriber’s household to determine if there is a likely infringer of Plaintiff's copyright. Plaintiff bases its choices regarding whom to name as the infringer on factual analysis. (ECF No. 15, at 24.) The Court interprets this to mean: if the subscriber is 75 years old or female, then Plaintiff looks to see if there is a pubescent male in the house; and if so, he is named as the defendant. Plaintiff's “factual analysis” cannot be characterized as anything more than a hunch. Other than invoking undocumented statistics, Plaintiff provides nothing to indicate that Benjamin Wagar is the infringer. While it is plausible that Benjamin Wagar is the infringer, Plaintiff's deduction falls short of the reasonableness standard required by Rule 11. For instance, Plaintiff cannot show that Benjamin is the infringer instead of someone else, such as: David Wagar; other members of the household; family guests; or, the next door neighbor who may be leeching from the Wagars’ Internet access. Thus, Plaintiff acted recklessly by naming Benjamin Wagar as the infringer based on its haphazard and incomplete investigation. Further, the Court is not convinced that there is no solution to the problem of identifying the actual infringer. Here, since Plaintiff has the identity of the subscriber, Plaintiff can find the subscriber’s home address and determine (by driving up and scanning the airwaves) whether the subscriber, (1) has Wi-Fi, and (2) has password- protected his Wi-Fi access, thereby reducing the likelihood that an unauthorized user outside the subscriber’s home is the infringer. In addition, since Plaintiff is tracking a Co fe YN NHN A SP WY NO NO po NO HN HN HN HN BO HNO wR Rm me me et et oOo DY DH A FP WD NY KH DO WBN BD UH BR WY NY YK CS *12-cv-08333-OD (aC Document ri 1 Filed mS Page 99 of 100 Page ID ‘ 4006 2:12-cv-08333- oDw- JC Document 48 Filed 02/07/13 Page 7of11 Page ID #:606 number of related copyrighted videos, Plaintiff can compile its tracking data to determine whether other copyrighted videos were downloaded under the same IP address. This may suggest that the infringer is likely a resident of the subscriber’s home and not a guest. And an old-fashioned stakeout may be in order: the presence of persons within the subscriber’s home may be correlated with tracking data—the determination of who would have been in the subscriber’s home when the download was initiated may assist in discovering the actual infringer. Such an investigation may not be perfect, but it narrows down the possible infringers and is better than the Plaintiff's current investigation, which the Court finds involves nothing more than blindly picking a male resident from a subscriber’s home. But this type of investigation requires time and effort, something that would destroy Plaintiffs business model. The Court has previously expressed concern that in pornographic copyright infringement lawsuits like these, the economics of the situation makes it highly likely for the accused to immediately pay a settlement demand. Even for the innocent, a four-digit settlement makes economic sense over fighting the lawsuit in court—not to mention the benefits of preventing public disclosure (by being named in a lawsuit) of allegedly downloading pornographic videos. And copyright lawsuits brought by private parties for damages are different than criminal investigations of cybercrimes, which sometimes require identification of an individual through an IP address. In these criminal investigations, a court has some guarantee from law enforcement that they will bring a case only when they actually have a case and have confidently identified a suspect. In civil lawsuits, no such guarantees are given. So, when viewed with a court’s duty to serve the public interest, a plaintiff cannot be given free rein to sue anyone they wish—the plaintiff has to actually show facts supporting its allegations. | pit /// CELINE Ee Tae oo ee PTH ENT Neer Tee Pe ne OS TT A ee ee PTT ET Se LTE SE TL EE EP ON Se Oe eS AT TER ee EE eS ee Dee ee Se Case 2:12-cv-08333- ODWAs Document 218-1 Filed ie 2 my age 100 of 100 Page ID / #:4007 Cast 2:12-cv-08333- ne JC Document 48 Filed 02/07/13 Page 8 of 11 Page ID #:607 C. Local Rule 83-3 Violations Under Local Rule 83-3, the Court possesses the power to sanction attorney _— misconduct, including: disposing of the matter; referring the matter to the Standing Committee on Discipline; or taking “any action the Court deems appropriate.” L.R. 83-3.1. This includes the power to fine and imprison for contempt of the Court’s authority, for: (1) misbehavior of any person in its presence or so near thereto as to obstruct the administration of justice; (2) misbehavior of any of its officers in their official transactions; or, (3) disobedience or resistance to its lawful writ, process, oOo Oo ND UH FP WY NY order, rule, decree, or command. 18 U.S.C. § 401. 10 The Court is concerned with three instances of attorney misconduct. The first 11 || and second instances are related and concern violating the Court’s discovery order. 12 | The third instance concerns possible fraud upon the Court. 13 1. Failure to comply with the Court’s discovery order | 14 In AF Holdings LLC v. Doe, No. 2:12-cv-6636-ODW(JCx) (C.D. Cal. filed | . 15 | Aug. 1, 2012) and AF Holdings LLC v. Doe, No. 2:12-cv-6669-ODW(JCx) (C.D. Cal. | 16 || filed Aug. 2, 2012), the Court ordered Plaintiff to “cease its discovery efforts relating 17|| to or based on information obtained through any abovementioned Rule 45 18 || subpoenas.” (ECF No. 13, at 1; ECF No. 10, at 1.) Further, Plaintiff was required to 19 || name all persons that were identified through any Rule 45 subpoenas. (Id.) 20 Plaintiff responded on November 1, 2012, and indicated that it did not obtain 21 || any information about the subscribers in both of these cases. (ECF No. 10, at 6-7, 22 | 10.)° But in response to the Court’s subsequent Orders to Show Cause, Plaintiff not 23 || only named the subscribers, but recounted its efforts to contact the subscriber and find 24 | additional information. (ECF No. 15; ECF No. 18.) 25 This conduct contravenes the Court’s order to cease discovery. Plaintiff has 26 || provided no justification why it ignored the Court’s order. > This response was filed in AF Holdings LLC v. Doe, No. 2:12-cv-5709-ODW(JCx) (C.D. Cal. filed 28 || July 2, 2012). i ee i ti