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:12-cv-08333- -ODW-Jt JE Document 218-2 Filed 07/1/48) Page 1of100 Page ID
2:12-cv-08333-ODW-JC Document 48° Fled 02/07/13 Page Qof1i Page ID #:608
ee Fraud on the Court
Upon review of papers filed by attorney Morgan E. Pietz, the Court perceives that Plaintiff may have defrauded the Court. (ECF No. 23.)* At the center of this issue is the identity of a person named Alan Cooper and the validity of the underlying copyright assignments.” If it is true that Alan Cooper’s identity was misappropriated and the underlying copyright assignments were improperly executed using his identity, then Plaintiff faces a few problems.
First, with an invalid assignment, Plaintiff has no standing in these cases. Second, by bringing these cases, Plaintiff's conduct can be considered vexatious, as these cases were filed for a facially improper purpose. And third, the Court will not idle while Plaintiff defrauds this institution.
D. Conclusion
Accordingly, the Court hereby ORDERS Brett L. Gibbs, TO SHOW CAUSE why he should not be sanctioned for the following:
e In AF Holdings LLC v. Doe, No. 2:12-cv-6636-ODW(JCx) (C.D. Cal. filed Aug. 1, 2012), violating the Court’s October 19, 2012 Order instructing AF Holdings to cease its discovery efforts based on information obtained through any earlier-issued subpoenas;
e In AF Holdings LLC v. Doe, No. 2:12-cv-6669-ODW(JCx) (C.D. Cal. filed Aug. 2, 2012), violating the Court’s October 19, 2012 Order instructing AF Holdings to cease its discovery efforts based on information obtained through any earlier-issued subpoenas;
///
* Although the papers revealing this possible fraud were filed in Ingenuity 13 LLC v. Doe, No. 2:12- cv-8333-ODW(JCx) (C.D. Cal. filed Sept. 27, 2012), this fraud, if true, was likely committed by Plaintiff in each of its cases before this Court.
° For example, in AF Holdings LLC v. Doe, No. 2:12-cv-6669-ODW(JCx) (C.D. Cal. filed Aug. 2, 2012), Plaintiff filed a copyright assignment signed by Alan Cooper on behalf of Plaintiffs. (ECF No. 16-1.)
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Case 2:12-cv-08333- “ODAC iii 218- 2 Filed O7/1 1 pet Page 2 of 100 Page ID 4009 Cas@ 2:12-cv-08333- ODW- JC Document 48 Filed 02/07/13 Pane 10 of 11 Page ID #:609
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e In Ingenuity 13 LLC v. Doe, No. 2:12-cv-6662-ODW(JCx) (C.D. Cal. filed Aug. 2, 2012), violating Rule 11(b)(2) by:
o alleging copyright infringement based on a snapshot of Internet activity, without conducting a reasonable inquiry; or,
o alleging that Benjamin Wagar is the infringer, without conducting a reasonable inquiry;
e In Ingenuity 13 LLC v. Doe, No. 2:12-cv-6668-ODW(JCx) (C.D. Cal. filed Aug. 2, 2012), violating Rule 11(b)(2) by:
o alleging copyright infringement based on a snapshot of Internet activity, without conducting a reasonable inquiry; or,
o alleging that Mayon Denton is the infringer, without conducting a reasonable inquiry;
e In Ingenuity 13 LLC v. Doe, No. 2:12-cv-8333-ODW(JCx) (C.D. Cal. filed Sept. 27, 2012), perpetrating fraud on the Court by misappropriating the identity of Alan Cooper and filing lawsuits based on an invalid copyright assignment.
This order to show cause is scheduled for hearing on March 11, 2013, at 1:30 p.m., to provide Mr. Gibbs the opportunity to justify his conduct. Based on the unusual circumstances of this case, the Court invites Morgan E. Pietz to present evidence concerning the conduct outlined in this order. The Court declines to sanction Plaintiffs AF Holdings LLC and Ingenuity 13 LLC at this time for two reasons: (1) Mr. Gibbs appears to be closely related to or have a fiduciary interest in Plaintiffs; and; (2) it is likely Plaintiffs are devoid of assets.
If Mr. Gibbs or Mr. Pietz so desire, they each may file by February 19, 2013, a brief discussing this matter. The Court will also welcome the appearance of Alan Cooper—to either confirm or refute the fraud allegations.
Based on the evidence presented at the March 11, 2013 hearing, the Court will consider whether sanctions are appropriate, and if so, determine the proper
Case 2:12-cv-08333- a Document 218-2 Filed ome Page 3 of 100 Page ID
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punishment. This may include a monetary fine, incarceration, or other sanctions sufficient to deter future misconduct. Failure by Mr. Gibbs to appear will result in the automatic imposition of sanctions along with the immediate issuance of a bench warrant for contempt.
IT IS SO ORDERED.
February 7, 2012
UNITED STATES D ISTRICT JUDGE
Sg eT EE
Case 2:12-cv-08333-ODW"3C. Document 218-2 Filed 07/11/43, Page 5 of 100 Page ID ad #:4012 ef , |
Exhibit D
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a, #4013 i CORPILLC - File Detail Report
www
Jesse WHITE
SECRETARY OF STATE CORPORATION FILE DETAIL REPORT
File Number 68212189
r ingerporetion Date ik (Derneevel
| Age nt Street | Address
perenne savoir
| Agent City
Annual Report Filing | Date
Return to the Search Screen Purchase Certificate of Good Standing
(One Certificate per Transaction)
BACK TO CY BERDRIVELLINOIS.COM HOME PAGE
www.ilsos.g owcorporatellc/C orporateLIcC ontroller
WwW
Saeco nO ERED ENS OME
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#:4014
, Page 7 of 100 Page ID
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Exhibit E
Case 2:12-cv-08333-0D
MIC Document 218-2. Filed ee | #4016. \
Maa
, Rage 8. 9 of 100 Faget ID
STATE OF MINNESOTA — igsrRteT COURT
_ COUNTY OF HENNEPIN oe ‘FOURTH JUDICIAL DISTRICT | in COE eS S oo a oe : : Plaintiff, : Ee Sedge: Honorable Ann Leslie Alton — Save | ee
- John Lawrence Steele, Prenda Law Inc., AFooe Holdings, LLC, Ingenuity]3, LLC,
_ Defendants.
x AFFIDAVIT OF PAUL DUFFY IN SUPPORT OF DEFENDANT PRENDA LAW, INC. °S RESPONSE TO PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT |
| L Paul t Day, declare as follows:
es ue . -T am the sole principal, shareholder, officer, and director of Defendant Prenda S Law, Ine. I am fale the registered agent for Defendant Prenda Law, Inc. - 2. _ Plaintiff s principal place of business is 161 N. Clark St., Suite 3200, Chicago IL.
: 60601, vinich | is also the address of the registered agent.
- 3. For the entire time up to and including when Plaintiff asserts that he mailed the
summons and complaint to Plaintiff's principal place of business, | maintained @ an office at
ne Plaintiff's principal place of business and regularly worked there on a daily basis from Monday
shrug Pray.
4. As such, a reasonably diligent attempt to personally serve me at Defendant's
principal place of business would have been successful.
>: ] am not aware of a single stem by any person to serve me with any paper at
- 161 N. Clark Street, Suite 3200, Chee, Minos.
hatin baat lalate
Case 2:12-cv-08333-ODW=J¢
Document 218-2. Filed 07/11/1 est Ce = Y
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6. The practice of the receptionist at RO N. Clark Street, Suite 3200 in n Chicago, Tlinois i is to notify me by emnail: whenever a visitor asks for me. ‘| routinely receive such ee
mails for those asking to see me. I did not receive a message fiom the receptionist at Suite 3200
& that a visitor ‘whom if did not ‘know had asked to see me, from the time Plaintiff filed the
as Complaint in in this action through the time te purports to have sent t the Complaint to me by mail.
ad ae am unaware of any attempt by any peree to ) personally serve me with the
: Complaint or pany paper in this actin at any. time.
e a at declare under penalty of perjury that the foregoing i is true and correct based on
S “myo own m personal knowledge, except for those matters stated on information and belief, and those
ae matters I believe to be true. If called upon to testify, I can and will competently ys as 5 set :
: os forth above. | _ DATED: May 14, 2013 By:
3 "ORFICHIE SEIT " 9. ANDRIANNA D FLORES NOTARY PUBLIC, STATE OF ILLINOIS
ey ioe , , Slade Tio
», Page 10 of 100 Page. ID
Case 2:12-cv-08333-OD
Document 218-2 Filed 07/11/14 #:4018
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Exhibit F
Case 2:12-cv-08333-ODWé¢
24
25
y Document 218-2 Filed 07/11/13=,Page 13 of 100 ed #:4020 a
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,
eae lla ese en See Ea
REPORTER'S TRANSCRIPT OF PROCEEDINGS LOS ANGELES, CALIFORNIA
MONDAY, MARCH 11, 2013
KATIE E. THIBODEAUX, CSR 9858 U.S. Official Court Reporter 312 North Spring Street, #436 Los Angeles, California 90012
Page ID
Case 2:12-cv-08333-ODWsJ€ Document
24
25
#:4021
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
SPECIALLY APPEARING:
KLINEDINST LAW OFFICES BY: HEATHER ROSING 501 W. Broadway
Suite 600
San Diego, CA 92101
218-2 Filed O7/1 1/139
Page ID
Case 2:12-cv-08333-ODWe3¢
#:4022
INDEX
Document 218-2 Filed ia co ia a 15 of 100 Page ID
WITNESS NAME PAGE Alan Cooper Direct Examination by the Court 21 Direct Examination by Mr. Pietz 26 Cross-Examination by Mr. Brodsky 34 Bart Huffman Direct Examination by Mr. Pietz 39 Benjamin Fox Direct Examination by Mr. Pietz 45 Jessie Nason Direct Examination by Mr. Pietz 52 Brad Gibbs Direct Examination by Mr. Waxler 73 Cross-Examination by Mr. Pietz 105 EXHIBIT LD. IN EVID. 1 36 37 2 36 ot 3,4,5 36 6,7 43 44 8 50 50 9 56 10 67 67 11 68 68 12 73 73 13 107 107 14 108 108 15,16,17,18 110 110
Case 2:12-cv-08333-ODW¢3€ Document 218-2 Filed Oe Ney ane 16 of 100 Page ID
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\ #:4023
LOS ANGELES, CALIFORNIA; MONDAY, MARCH 11, 2013
1:38 P.M.
THE CLERK: Calling Item No. 4, CV 12-8333-ODW,
CV 12-6662, ODW, CV 12-6668, Ingenuity 13 LLC versus John Doe, additionally, CV 12-6636 ODW, CV 12-6669, AF Holdings LLC versus John Doe.
Counsel, please state your appearances.
MR. WAXLER: Andrew Waxler, your Honor, and Barry Brodsky for Mr. Gibbs who is present in the courtroom. Thank you.
THE COURT: Good afternoon, counsel.
MR. PIETZ: Good afternoon, your Honor. Morgan Pietz, P-I-E-T-Z, for the putative John Doe defendant in 12-CV-8333.
MR. RANALLO: Nicholas Ranallo, co-counsel for the same Doe.
THE COURT: All right. Gentlemen, thank you.
All right. We are here in response to an OSC set by this court as to why sanctions should not be imposed for various violations including Rule 11 and Local Rule 83-3.
I have received from Mr. Waxler on behalf of
24
25
Document 218-2 Filed O7/11/1pePage 17 of 100 Page ID #:4024 ad
Mr. Gibbs his response, supplemental response, a number of documents. Spent the weekend reading a depo which was perhaps the most informative thing I have read in this litigation so far primarily because of what you didn't want revealed. So, in any event, I have extended an offer to all of the principles concerned to offer them an opportunity to explain. It is my understanding that they have declined
that invitation. Therefore --
MS. ROSING: Your Honor?
THE COURT: And you are?
MS. ROSING: If I may approach.
THE COURT: Please.
MS. ROSING: My name is Heather Rosing, and I filed an ex parte application with this court.
THE COURT: When?
MS. ROSING: Friday?
THE COURT: When?
MS. ROSING: It was filed I believe at 3:54 p.m.?
THE COURT: Guaranteed for the court to actually see it; right? Was it electronically filed?
MS. ROSING: The local rule says we're not allowed --
THE COURT: Answer my question. Was it
electronically filed?
5 oC AER
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MS. ROSING: No. Because we are not allowed to, your Honor.
THE COURT: Okay. So what you did is you took it downstairs to the intake window?
MS. ROSING: Yes, your Honor?
THE COURT: Late Friday afternoon addressing a matter that is set for hearing on Monday morning?
MS. ROSING: My clients received notice of this on Thursday, your Honor. We received notice on Thursday?
THE COURT: I am just asking you a question. You can answer it "yes" or "no".
MS. ROSING: I'm sorry. Could you repeat the question.
THE COURT: What is -- why are you here?
MS. ROSING: Again, my name is Heather Rosing with the Klinedinst PC law firm. I am specially appearing for four of those people that received this notice on Thursday, Angela Van Den Hemel, a sauces at Prenda law --
THE COURT: Is this the long way of saying they are not going to be here?
MS. ROSING: I'm sorry. I was just telling you
who I represent, your Honor?
r
THE COURT: Are they here?
MS. ROSING: No, your Honor.
Case 2:12-cv-08333-ODW¢ Document 218-2 Filed 07/11/LjemPage 19 of 100
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THE COURT: Have a seat. MS. ROSING: May I just finish? THE COURT: Have a seat.
Bottom line is the court is going to end up drawing its own inferences from the information it actually has. An opportunity to be heard is all that is required. If you don't wish to exercise that, fine.
There was so much obstruction during the course of this deposition that it is obvious that someone has an awful lot to hide. This has actually raised far more questions of fraud than the court originally had, but we will get to that later.
Initially, I have got a number of questions regarding some of the filings that have been made with the court.
I guess, Mr. Waxler, I guess you will be the one that is addressing some of these things. One of my questions is this. Why is it that in every single one of these cases there is a form attached to the complaint that asks for whether or not there are any related cases. I have got a partial list of all of these cases that have been filed in the Central District. None of them have indicated that there are any related cases.
Could you tell me why?
MR. WAXLER: Well, your Honor, the downloads are
Page ID
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done by separate infringers, and the plaintiffs, yes, obviously, were a lot the same, and I believe that the decision had been made that it didn't require the related case filings to be made.
THE COURT: Okay.
MR. WAXLER: Perhaps that was in error, your Honor, as we sit here today.
THE COURT: Let me ask a question then. Let's just say on one date, that date being July 2nd of 2012, four lawsuits were filed by AF Holdings LLC versus John Doe all seeking a remedy for the infringement of the same movie Popular Demand.
Now, can you tell me how on earth these aren't related?
MR. WAXLER: Well, they are obviously related in the sense that --
THE COURT: That is what I thought, too. And that is what this entire list is. Okay. They are all related, but that box was always checked no. And then we are going to get to something separate in a minute, and that is the issue of who has an interest, a financial interest in the outcome of these cases. We will look at this shortly.
There is the issue of the court having vacated
and quashed the subpoenas that were served on various
Case 2:12-cv-08333-ODWesy Document 218-2 Filed 07/11/1
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ISP's, and, then, of course, I have gotten other responses to the OSC saying, well, we didn't know that that meant we couldn't do other forms of discovery. And, by the way, we sent out a copy of the court's order to the various ISP's letting them know that the court had withdrawn those orders and surely that is not the conduct of someone who was trying to disobey the court's order. And I had to agree. Sounded reasonable.
' Have you all seen the declaration of Sean Moriarty from Verizon?
MR. WAXLER: Your Honor, we saw it this morning, yes. |
THE COURT: Okay. Good.
And what say you because he responds directly to Mr. Gibbs' assertion that the ISP's were given notice not to respond to the subpoenas. He says this didn't happen, that they didn't receive notice.
MR. WAXLER: May I respond to that, your Honor?
THE COURT: Sure.
MR. WAXLER: Mr. Gibbs -- Prenda Law is one of the, is one of the e-mail addresses that received a copy of your ectdber 19th, 2012 order. As does Mr. Gibbs. Mr. Gibbs had a conversation with Mr. Hansmeier and told him that he thought that this order should be served on
the ISP's. Mr. Hansmeier advised Mr. Gibbs that that
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10
would be done. Mr. Hansmeier aver advised Mr. Gibbs that his request had been taken care of.
Now, if you read page, Paragraph 4 at Line 18 and 19 of the declaration, all it says is based on the Verizon records, it does not appear that Verizon received from AF Holdings or its counsel a copy of the order. It does not say they did not. And Verizon, like these other ISP's, has a history of, as I understand it, eliminating its records from their systems soon after, like within 30 days. CT Corporation receives the subpoenas. That was who was supposed to be served, and they have a history of not keeping them in their records for very long.
THE COURT: So they eliminate their documents pretty much the way Mr. Gibbs eliminates the original signed application from Alan Cooper?
MR. WAXLER: Mr. Gibbs never had the original signed verification from Mr. Cooper. Mr. Gibbs was told by Prenda Law that they had it. So Mr. Gibbs was never in possession of that document, and Mr. Gibbs did not lose that document, your Honor.
THE COURT: One other thing you didn't really make clear, was it only that document or was the entire file lost?
MR. WAXLER: I don't know the answer to that.
THE COURT: Okay. So here is the deal. So what
Case 2:12-cv-08333-ODWAJ€@ Document 218-2 Filed 07/11/1 3
24
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#:4030
Li we have got, we have got CT Systems destroying the order and the cover letter or transmittal of that order to Verizon; right? But they have got everything else. They have got all the other letters and the subpoena and all that sort of thing. So the only thing they have gotten rid of it just the order quashing the subpoena; right?
MR. WAXLER: No, your Honor. CT Corporation is the agent fe service of process.
THE COURT: I know who they are.
MR. WAXLER: CT Corporation may have received that, and I am just saying their history is they don't keep records for very long of having received subpoenas or service of those. The other documents which are attached to this declaration -- I believe since it was given to me about an hour, actually 15 minutes ago out there; I saw part of it online -- are documents that were exchanged between Verizon directly and others. So they weren't going through CT Corporation. So that is the difference, your Honor.
THE COURT: You are saying, then, that the notice
to Verizon that that subpoena had been quashed by the
court went to CT and not to Verizon?
MR. WAXLER: That is their agent for service of process. That is who they served. That is who
Mr. Gibbs, when he talked to Mr. Hansmeier, said please
Case 2:12-cv-08333-ODWJe Document 218-2 Filed 07/11/13—Page 24 of 100 Page ID
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serve this order on them, and that is what Mr. Gibbs understands was done.
THE COURT: Okay. Was the order served in the same way that the subpoena was served?
MR. WAXLER: That would be — understanding. I mean, it was served on CT Corporation. That is how the subpoena was served on CT Corporation.
THE COURT: So the subpoena and all the various letters, et cetera, that emanated from Prenda Law to Verizon were served on CT Systems; right?
MR. WAXLER: No. As I understand it, your Honor,
the e-mails that may appear here were exchanged between
Verizon directly, once they got the subpoena, and members
of Prenda Law. The only thing that would have gone through CT Corporation was the service of the original subpoena and a copy of the order.
THE COURT: All right. I am only going by the declaration of Mr. Moriarty. This is under tab, Exhibit A. The letter, Prenda Law, see that, September 5th? It says via hand delivery.
MR. WAXLER: I see that.
THE COURT: All right. Enclosed please find a subpoena and attachment. So I am assuming that the subpoena was also hand delivered. It doesn't say to
whom. Is this to CT?
12
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MR. WAXLER: That is our understanding, your Honor.
THE COURT: So what we have is a situation or at least you are guessing, you are guessing that everything seeking information from Verizon arrived intact, but the order withdrawing or gquashing that subpoena somehow got misplaced.
MR. WAXLER: There is no evidence before this court that Verizon did not receive that subpoena, that order from this court. I can tell you that Mr. Gibbs' intent was that that order be served so that they did receive it. And it was always his understanding until he saw the declarations in the filings by Mr. Pietz that some of the ISP's did not receive a copy of that order.
THE COURT: It is also my understanding that I guess a paralegal in the employ of one of these law firms began following up with these Internet service providers inquiring as to why certain information had not been provided pursuant to those subpoenas.
MR. WAXLER: And Mr. Gibbs read that for the first time when the declarations were submitted in connection with this OSC and was very surprised by it because he understood, as he does today, that the order by this court was served on CT Corporation and then would have
been transmitted to Verizon.
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THE COURT: Okay. All right. There is a number of things, Mr. Waxler, which you state in your papers that I wanted to ask you about. In more than one place, you indicate that Ingenuity 13 LLC and AF Holdings, et cetera, have assets which consist of without limitation their intellectual property rights in some of these films. What other assets?
MR. WAXLER: AF Holdings and Ingenuity -- AF Holdings, at least, received the assignment. So they have those property rights, and the companies would have obviously the right to, or rather the settlement funds that were paid on some of these matters would have been property of those companies.
But as I understand it from Mr. Hansmeier's deposition which I, too, aes over. the weekend, that the trust accounts of some of the lawyers were holding those settlement funds. Whether those settlement funds ever made it to AF Holdings or Ingenuity 13, all I can do, your Honor, is rely on what Mr. Hansmeier says because we have no independent knowledge of it and nor does Mr. Gibbs. Mr. Gibbs did not receive those funds. Those funds were sent to Prenda Law.
THE COURT: So you are telling me what you know is what you gleaned from this this weekend pretty much as
the court did; right?
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15 1 MR. WAXLER: Well, I mean, Mr. Gibbs may have more 2 knowledge than specifically what Mr. Hansmeier said. 3 THE COURT: Oh. Mr. Hansmeier has no knowledge of
4 anything. So I just want to know if you got what the
5 court got which is the only entities which apparently
6 make any claim whatsoever to these settlement funds are 7 the law firms. There appears to be no effort whatsoever 8 of transmitting any of these funds to the so-called
(9 clients, Ingenuity 13 and AF Holdings, who don't file
10 income taxes anywhere because as Mr. Hansmeier says they 11 have no income.
12 Is that what you got? That is what I got.
13 MR. WAXLER: JI thought that Mr. Hansmeier said
14 they didn't file income taxes because they were not 15 required in where they were domiciled, but you may be
16 right and I may be wrong.
17 THE COURT: No. He quite clearly said they have 18 not filed income taxes anywhere. 19 MR. WAXLER: I understand that. I just thought it
20 was a different reason for not filing them.
21 THE COURT: Well, probably because they don't do 22 anything, do they?
23 MR. WAXLER: Well, they in hearing from Mr -- in 24 reading from what Mr. Hansmeier says, they obviously own
25 valid copyrights, and those entities retain law firms
Case Sern enero ey Document 218-2 Filed 07/11/1;
24
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#:4035
like Prenda Law, apparently, to file actions such as the
ones that are at issue today.
THE COURT: They retain firms? Seriously?
You can hardly keep a straight face, can you?
MR. WAXLER: No, your Honor.
THE COURT: These entities were basically created
by these lawyers; right? They have no business. have no employees. They have no function really. are not even really a shell, are they?
MR. WAXLER: I don't know, your Honor.
THE COURT: The law firms are basically
They
They
prosecuting these actions on their own behalf, aren't
they?
MR. WAXLER: Mr. Gibbs never had any client contact with those clients. Mr. Gibbs received information from Mr. Hansmeier and Mr. Steele, and individuals advised Mr. Gibbs that they had talked clients.
THE COURT: Hansmeier and Steele, are those individuals to whom you refer in your papers to as senior partners in the law firm.
MR. WAXLER: Yes, they are.
THE COURT: I have another question. Does
those
to the
the
the
Mr. Gibbs have an indemnity or hold harmless agreement
from these senior partners? Or is he out there on
his
»Page 28 of 100 Page ID
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Sau
own?
MR. WAXLER: He has no hold harmless agreement from these partners that I am aware of.
THE COURT: Okay. All right.
MR. WAXLER: He was an of counsel, W -- 1099, independent contractor for Prenda Law.
THE COURT: All right. Now, the court is coming to the conclusion, and this is why it has been wonderful to have someone here to disabuse me of the notion that all of these lawsuits are being prosecuted on behalf of the lawyers, that all of the settlement funds inure solely to the benefit of the lawyers because not dime one has been transmitted to AF Holdings or to Ingenuity 13:3
Now, if there is information to rebut that, I would love to hear it. But, otherwise, that is what I am stuck with. So now I am wondering why is it that no disclosure has been made in this court and probably in none of the federal courts that the lawyers have a pecuniary interest in the outcome of these cases?
MR. WAXLER: I don't believe that that is what Mr. Gibbs understands the case to be. The fact that the settlement funds were not transmitted as of yet to those entities doesn't mean those settlement funds aren't being
held in trust for those entities. Mr. Gibbs has no
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information whatsoever, your Honor, to understand anything different than what I just described.
MR. BRODSKY: Your Honor, may I interject one point?
THE COURT: Sure. Your name again?
MR. BRODSKY: Barry Brodsky.
THE COURT: All right. Go ahead, sir.
MR. BRODSKY: My understanding and it is only from reading the same deposition transcript was that those funds remained in the trust accounts of the various law firms that were representing the companies to defray future expenses.
THE COURT: And what were those expenses other than filing fees?
MR. BRODSKY: I would assume they would be filing fees, investigative fees, you know, basically that.
THE COURT: To -- okay.
MR. BRODSKY: But that is just my reading of the deposition.
THE COURT: Okay. And after that is done, then what?
MR. BRODSKY: Apparently -- well, we don't know where that trail ends, whether that trail has Sided, But we do know this. We know that none of those funds
reached Mr. Gibbs.
18
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THE COURT: And we also know none of those funds reached Ingenuity 13 and AF Holdings.
MR. BRODSKY: Apparently, from Mr. Hansmeier's testimony, that is correct.
THE COURT: Who was the corporate designee, the 30(b) (6) designee for AF Holdings; right?
MR. BRODSKY: Yes.
THE COURT: And none of those funds ever reached AF Holdings.
MR. BRODSKY: According to him, that's correct.
THE COURT: All these lawsuits settled on behalf of AF Holdings; right? But they reside in the law firm's trust account.
MR. BRODSKY: Some obviously were settled, yes.
THE COURT: You know what was really interesting, a lawsuit handled by law firm A, the settlement funds then are transmitted to law firm B's trust account, law firm B being controlled by Mr. Steele. JI don’t know. I just find these things curious.
All right. Any other light to be shed on some of the court's concerns with respect to this foolishness here because ~-- by the way, is there a Mr. Cooper here?
MR. PIETZ: Your Honor, Mr. Cooper is in attendance today, and I believe prepared to confirm that
these documents are founded on forgeries.
re EN NIN
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#:4039 Y 20 iL THE COURT: Is there an Alan Cooper in the Zz courtroom? Don't be shy. Come forward, sir. 3 (The witness was sworn.) 4 THE CLERK: Thank you. Have a seat. 5 THE COURT: By the way, while we are on the
6 subject, is there a Mark Lutz in the courtroom as well? 7 Is either Hansmeier in the courtroom?
8 MS. ROSING: Your Honor, I am the attorney
9 specially appearing for them and if I could finish my
10 request?
11 THE COURT: I just want to know if they are here.
\ 12 MS. ROSING: They are not physically here, your
13 Honor?
14 THE COURT: Thank you. Good.
15 MR. PIETZ: Your Honor, my understanding was that 16 Ms. Rosing was representing one of the Hansmeiers. Is 17 that different, or are you also representing Peter
18 Hansmeier?
19 MS. ROSING: I did-not have an opportunity to say, 20 but I do not represent Peter Hansmeier.
21 THE COURT: I didn't think you would be. The
22 technician? I didn't think you would be.
es MR. WAXLER: Your Honor, while those individuals 24 are not present, my understanding is they are available
25 by phone.
SS ET een eer er ee crnanenaeeeEpeae TENT ERROR ees NN TNE LOI URE EUR I USN ERE
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THE COURT: Is that right. Okay. I may take them
up on that. Maybe. Anyway.
DIRECT EXAMINATION
BY THE COURT:
Q Mr. Cooper, your name is Alan Cooper?
A Yes, sir.
Q And where do you reside, sir?
A. Isle, Minnesota.
Q Isle, Minnesota. Do you have any connection -- let
me just ask you specifically, do you have any connection
with Mr. Gibbs?
A No, sir. Q Ever met Mr. Gibbs before? A No. Q What about Paul Hansmeier, any connection with him? A No Q Ever meet him before? A No. ~ Q What about John Steele? A Yes. Q What was your connection with Mr. Steele? A I was a caretaker for a piece of property that he
had in Northern Minnesota.
Q And when was this?
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#:4041 ae 22 A I think from 2006 till last August. Q You worked for him from 2006 until August of 2012? A No, I did not work for him. I was a caretaker for
his piece of property. He had two houses. I lived in
one and then took care of everything else there.
Q Okay. And he paid you?
A No.
Q Who paid you?
A There was no pay. It was I lived in the one house,
and I took care of everything on the property for free.
Q Or in exchange for a place to live? A Yes. Q All right. So you didn't have to pay for your
housing; correct? A Correct. Q So in exchange for housing on the property, you
took care of his property?
A Yes.
Q And this was a deal you ceupnasuea with Mr. Steele? A Yes.
Q All right.
A It is in a lease agreement that we have.
Q All right. I guess you have been advised. Matter
of fact, I have seen a letter written by an attorney who
apparently is acting on your behalf where you have become
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23 concerned that your name is being used as a corporate representative of some West Indian entities that you know nothing about; is that true?
A Yes. That's correct.
Q I want you to explain. I want you to elaborate. What is it that you have heard?
A That my name is being signed and forged and used for whatever these offices or myself personally scams that they have going on.
Q Did you ever have a discussion with Mr. Steele about these concerns of yours?
A He had, on one of his trips up to the cabin, all he had said was if anybody contacts you about any of my law
firm or anything that has to do with me, don't answer and
call me. Q Had he ever given you any advance notice that he was contemplating embarking on -- let me back up. Do you
know what his legal specialty was, say, back in 2006?
What kind of law was he practicing?
A When I had first met him, he was still in law school. QO In law school. All right. And, then, what area of
practice did he go into if you know? A He had originally said divorce, family law.
Q Family law. All right. Did he ever indicate to
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you that he was contemplating embarking on a different
specialty in the law?
A Yes. Q And best as you can recall, what was this new specialty? A Internet porn buyers. I don't know exactly how to
word it for you. Q Oh. Internet porn piracy sounds pretty good. All right.
Do you recall anything he said about that? A As far as? Q Anything about this new venture, this new method of practicing law. A I tried not to talk to him very much, but what he had -- what he had said on one of his trips was his goal
was $10,000 a day, to have a mailing of these letters.
Q What letters?
A To people that illegally downloaded on the Internet.
Q Did he explain what these letters would say and who
these letters would be sent to?
A I am not very Internet savvy myself, so it would be whoever downloaded something that they werente paying for or illegal. I don't know exactly how this works. That
he would just send out a letter stating that if they
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25 didn't send a check for a certain amount, that he would make it public to these people's family and friends what they were looking at.
Q I see. Okay. Is that all you can remember him saying about this new venture?
A At this time. Yes.
Q All right. Now, let's put this in context. He basically told you that if you started getting any inquiry, that you were to, what, call him or direct the callers to him?
A To contact personally, personally contact him.
Q Okay. Now, back up. If you received any calls or
inquiries regarding what?
A He said anything that seemed out of place. Q And you took that to mean what? A I took that to mean the very next day I went and
talked to my father-in-law which is a retired sheriff and talked to him, and he said until anybody contacts you, he
goes we have nothing to go to the court system with.
Q And did that change?
A I never heard anything from anybody.
Q All right. So no one ever contacted you?
A No.
Q And so what is it that made you go off and hire
Mr. Paul Godfread?
st SAEED nee oe ener
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26 1 A I had received a text asking if this was my 2 signature on a particular document, and I said no. And
3 that is when I was given a number to call an attorney to 4 make sure that this didn't come back towards me. 5 Q All right. I am going to assume that that copy of
6 that document is probably in court; right?
7 MR. PIETZ: Referring now to the copyright
8 assignment agreement, your Honor?
9 THE COURT: Right.
10 MR. PIETZ: Correct, your Honor.
11 THE COURT: Okay. Let me turn this over to you,
12 sir. Go ahead.
13 MR. PIETZ: Okay. Thank you, your Honor.
14 If it please the court, I have some documents 15 which I can show on the monitor including to Mr. Cooper. 16 I just want to make sure we have both the copyright
17 assignments.
18 MR. PIETZ: Are the monitors arrayed so that the
19 court can see them?
20 THE COURT: Yes. The court has its own. We got
Zi that before the sequester.
22 MR. PIETZ: All right.
Zo DIRECT EXAMINATION 24 BY MR. PIETZ:
25 Q Mr. Cooper, my name is attorney Morgan Pietz.
ANNA TAM I RM TL TT ES ee
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Ld Thank you for coming here today.
Did anyone ever ask you to become a corporate
representative of AF Holdings LLC?
A No.
Q Did anybody ever ask you to become a corporate representative of Ingenuity 13 LLC?
A No.
Q Mr. Cooper, now, I would like to show you some documents, and Mr. Ranallo I believe just passed out copies of the first. So what we have here is a complaint.
It is one of the consolidated cases presently before the court. For the record, it is Civil Action No. 212 CV 6636, an action filed here in the Central District of California.
Mr. Cooper, have you ever seen this complaint
before? A No. Q I am going to skip now to the last page of this
complaint or actually it is not quite the last page. It is the last page of the main document, or, sorry, it is actually Exhibit B to the complaint. Here is the first page of Exhibit B, now, Mr. Cooper.
It says copyright assignment agreement on the
top, and then I will note for the record that the
sci calaiiialaiicaiieaas
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28 copyright at issue is Popular Demand which it states in the first paragraph. Moving down to the second page of the agreement, Mr. Cooper, you will note that there is a signature on the right where it says Alan Cooper.
Is that your signature, sir?
A No. That is not.
Q You are quite sure about that?
A Yes. I use a middle initial.
Q Mr. Cooper, I would like to show you a similar
document which has appeared in a different case. What we have here is a copyright assignment agreement. This is for a different AF Holdings copyright styled Sexual Obsession which it lists in the first paragraph. For the record, this is Northern District of California No. 12 CV 2048.
Mr. Cooper, I am going to turn now to the second page of this copyright assignment agreement, or I guess it would be the third page. There is a signature there on the right that says Alan Cooper.
Is that your signature, sir? A No, it is not. Q Did anybody ever ask you to become a corporate representative or otherwise involved with a company called AF Films LLC?
A No.
SENSES SMEG AURA IAEA eo Nees RCA RSO RUE
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Ni! #:4048 Nal 29 Q And you are quite sure that is not your signature? A Very sure it is not mine. 6) Mr. Cooper, I would like to show you now another
document, and I will note for the record that this is a verified petition to perpetuate testimony filed in the Eastern District of California, 12 CV 8333, have you ever seen this document before, Mr. Cooper, prior to within the last couple of days?
A No.
MR. WAXLER: Your Honor, I would like to object to that question.
THE COURT: Object to the question as to whether or not he has seen the document?
MR. WAXLER: Well, this inquiry is beyond the scope of the OSC. The OSC is about four cases that was filed in the Central District of California. Now, we have heard about a Northern District case and Eastern District case that he is being questioned about which we did not address in our papers, and it is not what this OSC is about.
THE COURT: Well, it has become about it. It has become about fraudulent filings in federal court.
MR. PIETZ: I would add, your Honor, that it all goes toa pattern and practice.
Q Mr. Cooper, looking now at the verified petition, I
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am going to skip to the last page. You will note that it is signed by Mr. Gibbs. On this page which reads at the top notarized verification, there is a slash S, type-printed signature that says Alan Cooper, and it says Alan Cooper, Manager of Ingenuity 13 LLC.
Did you ever sign a notarized verification for
this document? A No, I did not. Q Did you ever give anyone permission to sign your name for you on this document? A No.
MR. PIETZ: Mr. Ran, would you pass out Exhibit 53. I will note for the record that I am moving now to what has been previously filed with this court as Exhibit S which is the declaration of Nicholas Ranallo in opposition to a motion to shorten time filed in the Northern District of California. And I am going to move now to an exhibit to this motion.
It is actually the second to last page in that filing, Exhibit S, and what we are looking at isa business entity detail for an entity called VPR, Inc. from the Minnesota Secretary of State website.
Q Mr. Cooper, you will note there that under officers, it says Alan Cooper and it lists an address of
4532 East Villa Teresa Drive, Phoenix, Arizona, 85032.
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Mr. Cooper, have you ever been to Arizona?
A No, I haven't.
Q So that is not your residence, is it?
A No.
Q Do you have any knowledge of that address whatsoever?
A No, I do not.
Q Did anybody ever ask you to be the president of VPR, Inc.?
A No.
Q Did anybody ask you to be any other role in
connection with that company?
A No.
Q Mr. Cooper, I am going to move now to what has been previously identified in the record as Exhibit T. What we have here is a notissues.com registration.
Mr. Cooper, did you ever register an Internet domain name called notissues.com or perhaps it is pronounced notissues.com?
A «= No, I did not.
Q I am going to zoom in now. Mr. Cooper, I will note that on the second page it says registrant Alan Cooper, and it lists that same Phoenix address that we mentioned a moment ago. Am I correct in presuming that there where
it says administrative contact, and it lists the e-mail
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32 1 address, johnsteele@gmail.com. Am I correct in assuming 2 that johnsteele@gmail.com is not your e-mail address, 3 Mr. Cooper? 4 A No, it is not. 5 Q Mr. Cooper, after you hired attorney Paul Godfread, 6 and he let the other side know that he was going to be 7 representing you in actions in Minnesota, did you hear i 8 from John Steele? 9 A Yes. He called me twice and left two voicemails
10 and sent me two texts.
11 Q So this was after Mr. Godfread let Prenda know that 12 he was your attorney; isn't that correct?
13 A Yes.
14 Q How many times in a row did Mr. Steele call you
5 when that happened?
16 A I think five or six times right in a row.
17 Q And that was, more or less, to your understanding, 18 was that more or less immediately after your attorney
19 Paul Godfread let the other side know that he was going
20 to be representing you?
ak A Yes. It was right after Paul let him know.
22 Q Within a matter of minutes, would you say, sir? 23 A Yes.
24 Q Have you heard from Mr. Steele recently,
25 Mr. Cooper?
Case 2:12-cv-08333-ODWAJC Document 218-2 Filed 07/11/13sPage 45 of 100 Page ID — #:4052 ae
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1 A He had left two other voicemails on my phone and
2 two other texts within the last couple of weeks, I think 3 it was.
4 QO And, more recently than that, have you heard from 5 him again?
6 A Yes. Yeah. There was a two week spell between
7 them that he had called me twice.
8 Q And, Mr. Cooper -- pardon me, I didn't mean to
9 interrupt you. Go ahead, sir.
10 A He left four voicemails altogether and four text 11 messages.
12 Q And, Mr. Cooper, my understanding is that you
13 brought copies of these voicemails to potentially play 14 for the court; is that correct, sir?
15 A Yes.
16 Q If the court will indulge me a moment, I will play 17 those into the microphone for the record.
18 THE COURT: Okay.
19 MR. PIETZ: If it is okay with the court, I would 20 like to ask Mr. Stoltz to assist me with this. He is the 21 brains of the operation. on the technology here. 22 Apologize, your Honor. We are starting from 23 the beginning. 24 (Audio recording played.)
25 Q BY MR. PIETZ: Mr. Cooper, have you spoken with John
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Steele enough times to recognize his voice? A Oh, yeah. That is his voice. That is him. Q So that was Mr. Steele on those recordings that we just heard a moment ago? A Yes. Q The three lawsuits that Mr. Steele was referring to, do you think he means the three defamation cases recently filed against you and your attorney, Paul Godfread by John Steele, Paul Duffy and Prenda Law in Florida, the Northern District of Illinois and the Central District of Illinois? Do you think that is what he was talking about? A Yes. Q Mr. Cooper, I, for my part, don't have anything further. Perhaps the court does, but, before I step down, I would like to thank you for coming here today?
THE COURT: Thank you, counsel.
MR. BRODSKY: Very briefly, your Honor. Thank
you.
CROSS-EXAMINATION
BY MR. BRODSKY:
Q Mr. Cooper, you have never met Mr. Gibbs; is that correct? A Yes.
San eon ee oR erp RE
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#:4054 ae 35 Q And you have never spoken to him as well; is that correct? A No, I have not. Q And you have exchanged no correspondence with him
whatsoever; is that correct?
A That is correct.
Q Do you know a gentleman by the name of Grant Berry, B-E-R-R-Y?
A Yes, I do.
Q Who is Mr. Berry?
A He is the one that introduced me to John when I was
selling my house.
Q And what type of relationship if any do you have with Mr. Berry?
A He was the realtor for -- he was a realtor that I had for selling my house.
Q And did you ever tell or ask Mr. Steele in
Mr. Berry's presence how is my porn company doing?
A No, I have not. Q You sure about that?
A Yes. | “MR. BRODSKY: Thank you, your Honor. Nothing further. THE COURT: All right. Same questions that he
asked with respect to -- what about Mr. Paul Duffy, do
PRS ES ESSIEN EEA SURRR ARR
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36 1 you know him? 2 THE WITNESS: No, I do not. 3 THE COURT: Ever heard of him? 4 THE WITNESS: Through these things that are going
5 on, yes.
6 THE COURT: All right.
7 THE WITNESS: That way only.
8 THE COURT: All right. Anyone else?
9 MR. PIETZ: Your Honor, just very briefly, as a
10 technical matter, I would like to ask that the documents
11. I went through with Mr. Cooper be admitted into evidence. 12 That was the copyright assignment with Popular 13 Demand. I would ask that that be admitted into evidence
14 as Exhibit 1. The copyright assignment agreement for
15 sexual obsession, I would ask that that be admitted as
16 Exhibit 2. The verified petition in the Eastern District 17 of California matter previously identified in this action
18 as Exhibit L, I would ask that it be admitted now as
19 trial Exhibit 3. The declaration from Mr. Ranallo which 20 has the printout for VPR, Inc. previously filed here as 21 Exhibit S, I would ask that be admitted as’ trial Exhibit 22 4. And the notissues.com registration previously
23 identified here as Exhibit T, I would ask be admitted as 24 trial Exhibit 5.
ZS THE COURT: Any objection?
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MR. BRODSKY: Yes, your Honor. As to Exhibits 3, 4 and 5, we would object on the ground of relevance.
THE COURT: Sustained. All right. Everything else comes in. What about the audio? Is there a transcript of the audio?
MR. PIETZ: Your Honor, we can prepare it.
THE COURT: Would you. Thank you.
MR. PIETZ: We would be happy to, and we will lodge it with the court, your Honor.
THE COURT: Thank you. Okay. That will be received as well.
All right.
Anything, gentlemen? Nothing.
You may step down, sir. Appreciate you coming.
MR. PIETZ: Your Honor, at this time, I think it might be helpful for me to suggest a few other things that I am prepared to discuss today for the court. We have heard from Mr. Cooper.
What I might propose now is turning to Mr. Gibbs. Mr. Gibbs has noted in his declaration or attempted to characterize himself as merely a, quote,
independent contract attorney for Prenda Law. I am
prepared to present evidence today showing that, in fact,
Mr. Gibbs is really what amounts to a de facto chief
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operating officer of-Prenda Law. And I have a number of documents and exhibits I am prepared to go through with Mr. Gibbs on that account.
In addition, I am prepared to show through cross-examination of Mr. Gibbs that his investigation in these cases was objectively unreasonable. Although I was not able to contact Mr. Larguire(phonetic) or Mr. Denton, a former client of mine in a previous case who was previously named by Mr. Gibbs as a result of what I view as a shoddy online investigation is here to testify that the main fact that Mr. Gibbs relied upon in that case turned out to be completely incorrect.
Fourth, your Honor or I should said say third, there are representatives here today from both AT&T and Verizon who can conform that the court's discovery orders were unambiguously violated in this case.
Fifth, and, finally, your Honor, if the court is inclined to hear it, I am prepared to explain my understanding of how Prenda is organized and present evidence showing that the court does indeed have personal jurisdiction over Mr. Steele, Mr. Duffy, Mr. Paul Hansmeier and Ms. Angela Van Den Hemel.
THE COURT: Let's begin with the ISP's. MR. PIETZ: Very well, I would ask now that
Mr. Huffman come forward. Is he here?
38
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39 1 (The witness was sworn.) 2 THE CLERK: “Bias have a seat. 3 Please state your full and true name for the 4 record, and spell your last name? 5 THE WITNESS: My name is Bart Huffman,
6 H-U-F-F-M-A-N. 7 THE COURT: One second.
8 THE CLERK: Counsel, I think we are going to first
' 9 have our 2:30 matter. I think it will be a little 10 shorter. So I am going to call the next matter and then iL we will have you guys come back.
12 (Recess from 2:30 to 2:31 p.m.)
: 13 THE COURT: Okay. Sorry for the interruption.
14 Let's go back on the record in the AF Holdings, Ingenuity
15 13 LLC.
16 All right. Go ahead, counsel. : 17 MR. PIETZ: Thank you, your Honor.
18
19 DIRECT EXAMINATION
20 BY MR. PIETZ:
21 Q Mr. Huffman, what is your job, sir? 22 A I am an attorney.
23 Q With what firm?
24 A Lock Lorde.
25 Q And do you represent AT&T in that capacity, sir?
ER CERAM TRE EA LEE TC PE ET ENE
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40 A Yes, I do. ie) And how long have you been -- how long have you been representing AT&T, sir? A I have been. representing AT&T for about six or seven years, I suppose. @) And do you have personal familiarity with matters before AT&T that involve the Prenda law firm? A I do. Q So on a day-to-day basis over the past few years, have you handled Prenda matters for AT&T? A A number of them. Q Very well. You prepared a declaration which I submitted with the court in this matter; isn't that correct, sir? A That is correct. Q And that declaration was based on an investigation performed by your client, ATST; is that correct? A Well, that declaration recounts a series of events where Angela Van Den Hemel who has contacted us on a regular basis to follow-up on subpoenas contacted us with respect to the subpoenas in the case that was consolidated with others in this proceeding. And as we looked into it, we discovered that the case had been stayed as far as discovery goes.
Q So you are familiar, then, with this court's
Pe een Oe ee Se IN Ne ET CERT, TTT eNO Te Ped OTT TS! SR a Tee Ye Ree MO SE Bim ey ONS, TERRE weg hee oe aera ae ee ae ee An MESA RYT OSA HOSOI MANETTE,
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October 19th, 2013 discovery order vacating the subpoenas in the AF Holdings cases now before this court? A Yes. Q And as far as AT&T is aware, did Prenda in fact stop seeking subpoena returns on the cases consolidated before this court after October 19th, 2013?
MR. WAXLER: Calls for speculation.
THE WITNESS: I am not aware that they did. AT&T did not, to my knowledge, receive any notice of the order and furthermore Ms. Van Den Hemel, I think I am saying her name right, contacted us seeking to follow-up and obtain information presumably with respect to the subpoenas in that case. And we received, I should add, we received, I and my firm receive the information pretty much directly as it comes in from CT Corporation so with respect to these type of subpoenas. Q BY MR. PIETZ: So with respect to these type of subpoenas, then, the receipt or non receipt by AT&T would come into your office; is that correct? A Typically, it would.
MR. WAXLER: Calls for speculation.
THE COURT: Hang on. What is your objection?
MR. WAXLER: Calls for speculation, your Honor.
This witness is being asked to say whether
AT&T received something, and I think that is speculative
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for him to be able to testify as to whether AT&T might have received it or not. THE COURT: I understood it to be how mail is handled in his office, but let's walk through it again. MR. PIETZ: Very well. Q So did your office receive a copy of the
October 19th, 2013 order vacating the subpoenas in this
case? A Not independently. When we looked on Pacer as we -- we routinely do with respect to production requests
and the like, we found the order.
Q So your office was not served by Prenda or anybody affiliated with Prenda with this court's October 19th discovery order?
A That is correct.
Q And did you investigate with your client, AT&T, as to whether or not AT&T received a copy of the court's October 19th order?
A I did not specifically ask them that, no.
Q And were you contacted only the once by Angela
Van Den Hemel regarding the court's October 19th order in this action?
A No. She contacted my paralegal twice and my paralegal would routinely refer those type of inquiries
to me.
Case 2:12-cv-08333-ODW-JC Document
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Q So she actually asked twice for subpoena returns to be made after the October 19th discovery order?
A That's correct. And when I looked at the Pacer records and saw the order, I then responded to
Ms. Van Den Hemel saying that the discovery had been stayed and we of course would not be producing discovery in the case at that time.
MR. PIETZ: I would ask that the declaration of Bart Huffman be admitted as evidence in this hearing. I think we are on Exhibit 6.
THE COURT: Okay.
THE WITNESS: And would you also want to have the declaration of my paralegal admitted as well?
MR. PIETZ: Yes. I would ask as well that that be admitted as Exhibit 7. It is the next filing on the docket.
THE WITNESS: Camille Kerr.
Q BY MR. PIETZ:Could you spell her name for the record. A Certainly. C-A-M-I-L-L-E, K-E-R-R.
THE COURT: All right. Any objection, gentlemen?
MR. BRODSKY: Is she going to be testifying, your Honor?
THE COURT: I have no idea.
MR. BRODSKY: Object on the ground of hearsay.
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THE COURT: Is she here?
Q BY MR. PIETZ: Mr. Huffman, is Ms. Kerr here today?
A Ms. Kerr is not here today. I can testify though that I oversaw and reviewed all of the items stated in her declaration, and they are part of our regularly kept records and they are consistent with our files, were overseen by me at every single step and reviewed and they are, in fact, true and correct.
Q So you are personally familiar with the facts in Ms. Kerr's declaration?
A I am, and I reviewed it in detail.
THE COURT: What is the substance or the subject matter?
THE WITNESS: Ms. Kerr submitted a separate declaration simply because she was the addressee on the e-mails from Ms. Van Den Hemel.
THE COURT: All right. And her declaration attests to?
THE WITNESS: Her declaration attests to the truth and authenticity of the e-mails that I attached thereto.
THE COURT: That is all?
THE WITNESS: That is all.
THE COURT: All right. I will permit it. Okay.
Gentlemen?
MR. BRODSKY: No questions, your Honor.
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THE COURT: All right. Sir, you may step down. Thank you.
THE WITNESS: Thank you, your Honor.
THE COURT: I do have one question.
Ms. Van Den Hemel, when you advised her that you had heared from Pacer of the court's order quashing those subpoenas, did she sound surprised?
THE WITNESS: She never responded at all.
THE COURT: All right. Thank you.
MR. PIETZ: Your Honor, also in attendance today is an attorney for Verizon, Mr. Benjamin Fox. If it please the court, I would suggest we offer him.
THE COURT: Yes. Please.
(The witness was sworn.)
THE CLERK: Please have a seat. And please state your full and true name for the record and spell your last name.
THE WITNESS: Benjamin Fox, F-O-X.
DIRECT EXAMINATION BY MR. PIETZ: Q Mr. Fox, what is your occupation, sir? A I am a partner at Morrison and Foerster here in Los Angeles. I ama lawyer.
Q And do you represent Verizon in that capacity?
SHAAN NAAR AI
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A I do.
Q And how long have you represented Verizon in that capacity?
A I can't tell you the date. I know that the first
matter was the Eastern District of California Rule 27 proceeding filed by ficnmey 13, and that is the case that you had a copyright assignment for that you showed earlier this afternoon.
Q So you appeared on behalf of Verizon in that Rule 27 petition action in the Eastern District of California; is that correct?
A Correct.
Q And I believe that was in 2011. Since then, have you had occasion to deal with litigation matters involving the Prenda law firm?
A Yes.
Q So you have handled those issues for Verizon on a
. day-to-day basis in the past two years?
A Yes. Many of them.
Q Very well. You prepared and submitted, filed, I should say, a declaration with the court earlier today; isn't that correct, sir?
A I prepared for Verizon and obtained a signature from Mr. Sean Moriarty who is a Verizon representative in
Arlington, Virginia. Yes.
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47 Q So you are familiar with the facts that were averred in the declaration filed with the court today? A Yes, I am. Q And did you investigate whether the facts are correct prior to filing the document here today? A I did. Q And can you explain to me the substance of the declaration with respect to whether or not Verizon received a copy of the court's October 19th discovery order? A Sure. Verizon has been the recipient of I think literally hundreds of subpoenas from the Prenda firm, and Verizon is a party in a DC Circuit appeal where AF Holdings was the plaintiff based on one of the copyright assignments that bears the name of Mr. Cooper. Verizon is very focused on what has been happening in these cases and has been paying close attention to it.
So if Verizon had received the October 19 order from this court, Verizon would have known that, and I would have received it as well. My e-mail doesn't have any record of it. I have searched. I know that Verizon has now searched. Is there some theoretical possibility that maybe it was sent to someone at Verizon and not forwarded to the correct people? Possible. But having
not seen anything from Mr. Gibbs that suggests it was
MMO MTT OT TT EE
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48 dL. sent, you know, my conclusion is that it was not sent to 2 Verizon. 3 Q So, then, in terms of the usual channels, the 4 custom and practice, the way subpoenas would normally 5 come in from Verizon, did you check all of these means of
6 receiving subpoena information?
7 A I checked. | 8 MR. WAXLER: Calls for speculation, your Honor. | 9 MR. PIETZ: Let me rephrase. | 10 THE COURT: What is your objection? | il MR. WAXLER: Calls for speculation. He is asking
| | 12 this witness to speculate about what Verizon's policies | 13 are in receiving subpoenas.
14 THE COURT: I thought you were talking about
15 Morrison and Foerster's policy.
16 MR. PIETZ: That's right. I will rephrase and
17 make it more clear, your Honor. Let me rephrase.
18 Q So did you personally check Morrison and
19 Foerster's, the way that Morrison and Foerster would
20 normally receive information about a subpoena? Did you 21 check and make sure that no notice was received of the 22 October 19th discovery order?
23 A Yes. I made a reasonable search, and I looked
24 wherever that I thought was appropriate to look.
25 Q And you communicated with your client that you —--
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49 well, let me back up.
The gentleman who executed the declaration that was filed with the court today, what was his name, again, sir?
A Sean Moriarty.
Q And is that somebody you normally communicate with these type of matters.
A Yes.
Q And you spoke with Mr. Moriarty, and can you explain, did you have him investigate, from Verizon's
end, whether notice was received?
A The Verizon team investigated. Yes.
Q Including Mr. Moriarty?
A Yes.
Q Very well. And so, then, to the best of your
knowledge, based on both his investigation and a eevaen of Morrison and Foerster's own records, Verizon did not receive a copy of the October 19th discovery order; isn't that correct?
MR. WAXLER: Your Honor, it is basically taking hearsay. Calls for speculation. He is asking the witness what Verizon did. Verizon has given a declaration that says it does not appear.
THE COURT: Overruled.
THE WITNESS: Correct.
SASSOON TANASE RAD ANC
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50 : ae © BY MR. PIETZ: I would ask, then, that the 2 declaration submitted by Mr. Moriarty with the court 3 earlier today be admitted into evidence as Exhibit 7.
4 Sorry. Pardon. Exhibit 8.
5 THE COURT: It will be admitted.
6 All right. Mr. Brodsky, do you wish to
7 inguire?
8 MR. BRODSKY: I do not, your Honor. I have no
9 questions.
10 THE COURT: Sir, you may step down. 11 THE WITNESS: Thank you. 12 THE COURT: All right. Now, I would also like to
13 hear from your former client?
14 MR. PIETZ: Very well. Mr. Nason, are you in
15 attendance today?
16 (The witness was sworn.)
17 MR. WAXLER: Your Honor, I would object to this 18 line of questioning please.
Lo THE COURT: He hasn't asked any questions yet.
20 MR. WAXLER: I know that, but this witness has no 21 relevant testimony to this subject matter. He is not a
22 party to any of the four cases at issue in this osc. It
23 is not even a federal court case that he was a defendant
24 in, your Honor. He has no relevant testimony that he
25 could state in connection with this OSC.
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THE COURT: Maybe yes. Maybe no. If we are talking about a pattern and practice, and from what I have seen, this is a cookie-cutter litigation. Sometimes the only thing that I see changed on the complaints are the ISP's addresses and the name of the film, but, in all other respects, they seem to be all the same even the declaration from the technical expert as to what he did in order to identify the infringer. It is the same document. 5 I hear your point. If I don't find it to be relevant, I will discard it.
MR. WAXLER: Your Honor, just for the record, Mr. Gibbs' declaration does go through exactly the different things that he did in order to determine whether in the two cases that you cited in the OSC whether he was able to locate the infringer and who that was. And there is nothing cookie cutter about that effort that he put in his declaration.
THE COURT: All right. Thank you.
Go ahead.
THE CLERK: Please state your full and true name for the record and spell your last name.
THE WITNESS: Jessie Nason. That is N like Nancy, A-S-~-O-N.
THE COURT: Go ahead, counsel.
Is that one S or two?
AMAIA MLADEN RTE TIEN TERNS ISVS ani RA Me ISA ESESSSS e
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52 THE WITNESS: One S. THE COURT: All right.
THE WITNESS: Well, two in Jessie. Sorry.
DIRECT EXAMINATION
BY MR. PIETZ:
Q Mr. Nason, have you heard the name Brent Gibbs before?
A Yes.
Q And in what context, sir?
A He was the lawyer who brought the case against me,
Lightspeed Media versus my name. Q And where was that -- and I represented you in that case, did I not, sir? A Correct. Q And was that in the Los Angeles Superior Court filed in 2012? A Yes. Q I will note for the record that the case is Lightspeed Media Corporation versus Jessie Nason, Los Angeles Superior Court No. NC057950.
MR. WAXLER: Your Honor, I would like to object again. This case is not even a copyright case. It was a case where the individual here was alleged to --
THE COURT: Where are you from?
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MR. WAXLER: I am from Los Angeles, your Honor.
THE COURT: There are no speaking objections in Los Angeles.
MR. WAXLER: I'm sorry, your Honor.
THE COURT: Okay. What is this case about?
MR. PIETZ: Your Honor, if I might speak to that very briefly. What we have seen from Prenda Law is a slightly different twist in some of their cases on copyright litigation, and what it is is essentially an attempt to address a copyright infringement case in state law clothing, well, state law and the Computer Fraud and Abuse Act.
So the causes of action at issue in the
Lightspeed case was a computer fraud and abuse act claim which essentially alleges that downloading and distributing content, and the content is nebulously specified in the complaint amounts to Computer Fraud and Abuse Act violations. And then there were a variety of related claims all of which were preempted by the Copyright Act for conversion, unjust enrichment and the like. But, really, what it was, and, in fact, and I can speak to this longer although perhaps it is getting off on a tangent, in reality what happened, was at some point somebody probably hacked into a password protected
website, but, then, Prenda started logging IP addresses
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54 and suing people in CFAA claims even though really the gravamen of the case was the use of BitTorrent. So it is similar, but, in any event, the issue in Mr. Nason's case that I think is relevant here is the same, and that specifically what was the investigation that was performed prior to naming Mr. Nason as the defendant in the case, and it is fairly bread and butter.
THE COURT: Okay. Go ahead. Q Mr. ron are you familiar with the reason that Mr. Gibbs stated that he had named you as a defendant? A Yes.
MR. WAXLER: Calls for speculation.
THE COURT: He said stated. You did say stated; right?
MR. PIETZ: Yes, your Honor.
THE COURT: All right. Overruled. Q BY MR. PIETZ: So, in any event, what was that reason, Mr. Nason. AC I believed it to be that he supposed I lived by
myself in my apartment, and so he considered me a single
male.
Q And, Mr. Nason, is that correct? Do you live alone?
A No, I do not.
Q And who do you live with, Mr. Nason?
Case 2:12-cv-08333-ODW-.
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#:4074 55 A My wife of nine years. Q And have you lived with her for the past nine years? A Correct. Q So, at any point, you know, save perhaps for a
vacation, consistently for the past nine years, you have always lived with your wife; is that correct? A That's correct.
MR. PIETZ: That is essentially all I need from Mr. Nason, your Honor. I might have some questions about Mr. Gibbs, or perhaps now I could show the court the section of the transcript from the hearing in the Nason matter where Mr. Gibbs, when pressed by the court as to how it is and why it is he justified having named Mr. Nason as a defendant, Mr. Gibbs specifically stated, well, because we determined that he lived alone. It is just incorrect. And, indeed, the court denied my motion on that basis even though it turned out to be incorrect.
MR. BRODSKY: Your Honor, for the record, may we move to strike the testimony on the ground that it is irrelevant and beyond the scope of the court's OSC.
THE COURT: You may step down, sir. Thank you.
THE WITNESS: Thank you.
MR. PIETZ: I am looking now for the specific
section of the transcript.
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THE COURT: Don't worry about it.
MR. PIETZ: All right. I can find it afterwards. Thank you, your Honor.
THE COURT: All right. Let's now switch to the jurisdictional issue.
MR. PIETZ: Oh, you know what, your Honor, I have here the actual original copy of the transcript which perhaps I will lodge with the court and move to mark as Exhibit 9, I believe we are on. |
THE COURT: Okay.
MR. PIETZ: And, Mr. Ranallo, if you can find the pin cite, we will go ahead and add it.
May I approach to give this to the clerk, your Honor?
MR. WAXLER: We would object to the inclusion of
that transcript as an exhibit.
THE COURT: I will take a look at it. We will
see. Where was this? Was this in Torrance? MR. PIETZ: Yes, it was, your Honor. Judge Vicencia. THE COURT: Small world. My old court reporter. Okay.
MR. PIETZ: I am just looking now for the diagram
which I think will assist in explaining all of this.
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We seem to be a bit off kilter there, don't
we. Interesting. MR. WAXLER: MR. PIETZ:
Well, in any event -- What exhibit is this?
Yes. Marked as -- I will tell you in
just a moment. Double H, previously on the record.
In any event, perhaps less useful than I hoped
it would be, but I Tt: THE COURT:
electronic source?
MR. PIETZ: Honor.
THE COURT: laptop?
MR. PIETZ: Honor.
THE COURT:
MR. PIETZ:
THE COURT: it?
MR. PIETZ:
document. It will
THE COURT:
MR. PIETZ:
can look for that.
can at least talk the court through What is your source? I mean,
This is a demonstrative exhibit, your I know that. What are you using,
It is Trial Pad on my iPad, your
It is on your iPad?
Yes, sir.
And you can't do anything to adjust We do have a color paper copy of the take just a moment to pull it.
Okay. Go ahead.
In any event, Mr. Ranallo, perhaps you
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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, so, then, 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.
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MR. WAXLER: My client hasn't in this case.
MR. PIETZ: Your Honor, to explain what it is, what I thought I might do is to give a very brief overview of the organization, and, then, I thought I would go through some specific documents about Mr. Steele and a couple of arguments. So this is really argument, essentially, a couple of exhibits that go to Mr. Steele's connection to the California as well as a couple of points about Mr. Paul Hansmeier and Mr. Duffy.
THE COURT: Okay.
MR. PIETZ: So, in any event, this is a chart that was essentially prepared. This was prepared by my office essentially as a tool to aid in the understanding of how
Prenda Law appears to have evolved over the past few
years.
Essentially, it started out here with Steele Hansmeier, and John Steele -- I know that is a little hard to see -- John Steele, Paul Hansmeier and Brett
Gibbs. Mr. Steele and Mr. Hansmeier were the named partners in the firm, and Mr. Gibbs was the of counsel originally. When they first started out, circa 2011 --
THE COURT: I am going to have to stop you. How do you know that Mr. Gibbs was of counsel with Steele and Hansmeier?
MR. PIETZ: Your Honor, I can point to the
59
OMA TM AAT TTT ENTS ASSN SS SSNS
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60 1 specific exhibit, but there are pleadings of which the 2 court can take judicial notice where he is listed on the 3 pleadings as of counsel to Steele Hansmeier. 4 THE COURT: You are aware of the fact that S Mr. Hansmeier doesn't know what capacity Mr. Gibbs was 6 working at his law firm? 7 MR. PIETZ: Correct, your Honor. So, in any 8 event, let me put it this way. Mr. Gibbs filed documents 9 in federal court indicating on the caption that he was of 10 counsel to Steele Hansmeier. ae THE COURT: Okay. 12 MR. PIETZ: Now, I believe I can also speak to 13 this if the court is so inclined that Mr. Lutz was 14 holding himself out to the world as a paralegal at that sakD time, working, according to Mr. Paul Hansmeier, solely 16 for Mr. Steele. At this time, most of the lawsuits with 17 a few exceptions filed by Prenda around 2011 were on
18 behalf of a porno production, pardon me, adult
19 entertainment production company that actually people
20 have heard of before. And that is this list of clients
21 here.
22 What happened is that sometime in 2012, the 23 Steele Hansmeier firm was disbanded or become Prenda, 24 sold its client book to Prenda Law. We are not entirely
25 sure exactly the nature of the transaction, but, in any
cae Ser ee Re RT Dee Rm ONTO
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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 argument,
and we have had her going at light speed for an
hour~and-a-half. Right. So I am going to take a break,
Se nn een ROEM m HME N NMSA
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#:4081 - 62 1 and we can all take a break. How about 10 minutes. 2 Okay. 3 MR. PIETZ: Very good. Thank you, your Honor. 4 (Recess from 2:58 to 3:09.) 5 THE COURT: All right. Mr. Pietz. | 6 MR. PIETZ: Thank you. I will attempt to keep
7 this section very brief, and then we will move on to some
8 documentary evidence. This is just a summary.
9 So, as I was saying, sometime around 2012, 10 there was a bit of a shift in the Prenda business AL strategy. Mr. Hansmeier -- so what happened is these 12 companies, AF Holdings, LLC, Ingenuity 13 LLC and then 13 there is a couple of other companies which are the ones 14 in the CFAA cases. That is Arte de Oaxaca LLC and Guava LS LLC. And the CFAA cases have primarily been filed in 16 state court and have indeed tried to use -- certain 17 states have presuit discovery procedures that are more
18 lenient than Federal Rule of Civil Procedure 27. So it
19 is sort of a newer twist is these state court CFAA cases
20 and Arte de Oaxaca.
21 But, in any event, according to Mr. Hansmeier 22 in his deposition, these essentially shell company
23 plaintiffs are owned by a mystery trust. Mr. Hansmeier,
24 as 30(b) (6) deponent -- well, anyway, I won't go into
25 that. The court read it. According to Mr. Gibbs’
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L special counsel, though, on the same day, February 19th, 2 there is conflicting testimony essentially saying that
3 Livewire Holdings LLC is actually the current holder of
4 AF Holdings and Ingenuity 13.
5 So, in any event, these are the parent
6 companies, some mystery trust and Livewire Holdings LLC. 7 There is documents, you know, I had this sort of set
8 aside to potentially go through with Mr. Gibbs, but I can 9 also just show the documents, show what I have. In any 10 event, there is documents showing Mr. Gibbs as in-house 11 counsel for Livewire Holdings.
12 There are various other connections between
13 Livewire Holdings and the attorneys we see over here.
14 Mr. Dugas is a local counsel who has worked at both LS Prenda and Alpha Law which I can show through his
16 LinkedIn profiles, obviously, not central to the case.
17 Mr. Dugas' wife has been identified on LinkedIn as
18 in-house counsel for Livewire Holdings.
19 In addition, what I will talk about now is the 20 way that we see the lawyers. Mr. Hansmeier has been both 21 30BC deponent for AF and as its counsel. In any event, 22 what seemed to happen is that at some point these cases 23 filed on behalf of Ingenuity, AF Holdings, Arte de Oaxaca 24 and Guava LLC are cases where what appears to have
25 happened is the lawyers essentially took assignment of
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64 1 the underlying intellectual property rights in these 2 mysterious shell companies. One recurring theme here is 3 the way that when we are seeing the straw men, there is 4 always a connection to John Steele. So, for example, in 5 the VPR International, we see John Steele is the 6 attorney. We see Alan Cooper listed on the corporate 7 registration. The address listed for VPR International, 8 the 4532 East Villa Teresa Drive. My understanding based 9 on documents that have been submitted with the court is 10 that is an address that comes up for John Steele's sister 11 and a gentleman named Anthony Saltmarsh, in addition, of 12 course, to being the address listed for Mr. Cooper. 13 So on various federal court filings in the
14 Northern District of California, all of which are
15 attached as exhibits to the deposition that was lodged
16 with the court which the court read over the weékend,
17 when pressed to identify the person at AF Holdings who
18 would be made available for an early neutral settlement 19 evaluation conference, there are various court filings
20 listing the owner of AF Holdings as somebody named Salt 21 Marsh, two words.
22 So, in any event, what seems to perhaps be the 23 case is that this Anthony Saltmarsh lived at this address 24 with John Steele's sister which was essentially used as a
25 front for various entities involved in Prenda activities.
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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. And I thought I might start with Mr. Steele. So I have some documents which go to that, and I will switch 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
ask the court to take judicial notice of the fact that in
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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 ioe 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
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67 1 in utd remnis. And the answer, and here we see a copy of iz the subpoena, pardon me, authenticated by Mr. Stone. 3 This fie the letter that the ISP normally sends out, and, 4 here, we see a copy of the subpoena itself. And this is be) in the same action. | 6 Then, we see, there, that this subpoena which 7 again was signed by John Steele in a California action
8 requesting information of a John Doe defendant in the
9 State of California. So, essentially, I would ask that
10 this declaration of Michael Stone be admitted into 11 evidence as Exhibit, I believe, we are on 9.
12 Is that correct, Madam Clerk?
13 THE CLERK: 10.
14 MR. PIETZ: Pardon me. 10. I am one behind. 15 THE COURT: All right. Any objection?
16 MR. WAXLER: Your Honor, I just question the
17 relevancy of it as to Mr. Gibbs. Again, it is not one of 18 the cases that you put in your OSC.
19 THE COURT: It will be admitted.
20 MR. PIETZ: Similar document that I will move onto 21 next. What we have here is a declaration which was filed 22 on the docket in a case in the Northern District of
23 California by a man named Samuel Teitelbaum. It is
24 Northern District of California No. 311 CV 5628. And we
25 can see here that it is pending in the Northern District
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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 ne 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
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these cases was done at the direction
od
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 is
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
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1 identified him as essentially running a law firm in 2 California which by the way is not qualified to do
3 business in California, and I checked with the state bar
4 and it is not registered as a law firm here.
5 But in any event --
6 THE COURT: You talking about Prenda now?
7 MR. PIETZ: Talking about Prenda. Yes, sir. 8 In any event, I apologize. I don't have
9 documents to back that up, but I can provide them. But, 10 in any event, I think that with respect to Mr. Steele 11 when you take Mr. Gibbs' declaration and add it together 12 with a subpoena signed by Mr. Steele. And, pardon me, I 13 will note one other thing about the declaration of 14 Michael Stone. In addition to authenticating the
15 documents, he also included some back and forth, some 16 meet and confer correspondence he had with Mr. Steele. 17 So, essentially, Mr. Stone noticed the fact
18 that Mr. Steele was not licensed in California and that
19 he had signed the subpoena and wrote to Mr. Gibbs saying 20 this subpoena is invalid. And what happened is that
21 Mr. Steele wrote back directly without cc'ing Mr. Gibbs
22 and essentially shrugged off the concerns about the
23 subpoena being signed by an attorney who doesn't have a
24 license in California.
25 So, in any event, I think that with respect to
Sa ern Nene ee ONNIE
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71 1 Mr. Steele, when you add together the subpoena issued 2 into the state of California, a demand letter issued 3 under the state of California as well as Mr. Gibbs' 4 testimony, it is pretty clear that the court has personal 5 jurisdiction. 6 I don't have a tremendous number of additional A exhibits on this topic. However, I do have quite a few 8 with respect to what I view as Mr. Gibbs' central role in
9 the Prenda law organization.
10 MR. BRODSKY: Your Honor, may I make one comment? 11 THE COURT: You can make more than that. Thank | 12 you. : 13 Yes. Go ahead.
14 MR. BRODSKY: We are not taking a position at the
15 present time on the jurisdictional issues that the court 16 is deciding, but there were statements made about my 17 client that I believe mischaracterize the evidence that
18 has been put forward.
19 THE COURT: Okay. Listen, let me just sort of 20 tell you the way we are going to proceed here. At this 21 point, you will have the floor. All right. I can't
. 22 imagine you are going to raise too much in opposition to 23 the jurisdictional issue. Otherwise, he is in. So you 24 go right ahead.
25 Now, a number of things -- I am just going to
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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
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1 declaration as Exhibit 13 -- oh. Pardon me. " Stone and 2 Teitelbaum have already been admitted so just the
3 affidavit of John Steele. I would ask that that be
4 admitted as Exhibit 12.
5 THE COURT: I think that's right. Are we up to
6 12? Okay. All right.
f THE CLERK: If you could state your full and true
8 name for the record and spell your last name.
9 THE WITNESS: Sure. Brad Gibbs, G-I-B-B-S. 10 11 DIRECT EXAMINATION
12 BY MR. WAXLER:
is Q Mr. Gibbs, who is your present employer? 14 A I am not currently employed. 15 Q You became employed -- I'm sorry. You became an of
16 counsel, 1099 independent contractor for Steele
17 Hansmeier; correct?-
18 A Yes.
19 Q Was Steele Hansmeier an existing law firm at the 20 time that occurred?
21 A I believe they had been existing for a number of
22 months at that point. 23 Q What were you told your role would be at Steele 24 Hansmeier?
25 A Basically, California counsel for Steele Hansmeier
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1 in bringing lawsuits on behalf of their clients.
2 Q Were you paid as an employee?
3 A No.
4 Q Did you share in Steele Hansmeier profits?
io, A No.
6 Q Were you on the management of Steele Hansmeier?
7 A No.
8 Q And who did you aacestene wees the decision makers
9 of Steele Hansmeier?
10 A John Steele and Paul Hansmeier.
11 Q When you were an of counsel to Steele Hansmeier,
12 who supervised you?
13 A John Steele and Paul Hansmeier. i4 9 Did you have periodic meetings while at Steele
15 Hansmeier to discuss cases?
16 A Yes, we did. le, Q And were those weekly meetings? 18 A Yes. Sometimes they would be sending the schedule,
19 but, yes, mostly weekly meetings.
20 Q Who participated in those meetings?
21 A John and Paul would call me, and they would hold a 22 weekly meeting.
23 Q And were these by phone or in person?
24 A These were by phone.
25 THE COURT: Were they ever in person.
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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?
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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
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77 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
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78 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
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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 untrue?
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?
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1 A These guys are Paul Hansmeier and John Steele.
2 Q In connection with Ingenuity 13 cases did you file 3 notices of interested parties?
4 A That is correct. Yes.
i) Q And were you ever advised that the information --
6 how did you obtain the information for those notices?
7 A Well, I just, I would ask them, you know, are there 8 any other people that I should be noticing on this
9 document that I am filing with the court.
10 Q Who is them in your response? 11 A That would be Paul Hansmeier and John Steele. 12 Q Were you told not to do that again. Instead of
13 saying them, were you told by Paul Hansmeier, John Steel 14 that the information you included in those notice of
15 interested parties was correct?
16 A So they actually told me, I was instructed to fill 17 those documents out like I did.
18 Q There was a question raised by the court this
19 morning about the failure to have filed notices of
20 related cases. My question is did you consider filing
21 notices of related cases when you filed the actions in 22 the Central District of California?
23 A Yes, we did.
24 Q And could you please describe for the court what
25 your thought process was as a result of, in not filing
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81 these notices? A So we had filed -- 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
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Ingenuity 13 versus Does 1 through many, that that
joinder was improper; correct?
THE WITNESS: Some cases. Some cases it was not
improper.
Some judges felt differently.
THE COURT: All right. But if it involved
different movies, downloads, different times, different
people, different places, different ISP addresses, they
said you need to file separate lawsuits; right?
THE WITNESS: Some of them were the same clients,
same videos.
THE COURT: Okay. But even then?
THE WITNESS: Yes.
THE COURT: Even then, you had to file separate
lawsuits?
THE WITNESS: Yes. We were pointing that
direction even there was a footnote in one of the courts’
opinions saying basically that we were trying to get
around the filing fee, and that is what they thought so
we should file individual cases from there on out.
THE COURT: Of course, you were, but that is not
where we are going here. Now, that deals with joinder in
one lawsuit and consolidating really separate and
complete causes of action, different parties in a single
lawsuit.
Now, what we are talking about here is with
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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
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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 Beoistee 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 right. 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, did 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.
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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
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86 Honor? I only handle one kind of business?
THE COURT: Yes.
THE WITNESS: Can you explain your question? You mean in terms of just being plaintiff's lawyer?
THE COURT: Plaintiff's lawyer for copyright infringement for the adult film industry.
THE WITNESS: Well, no, actually. So originally when I was working for Steele Hansmeier, I was also working for an arbitrator. So I had other business, but it was just a 1099 worker at the same time. I was helping him out with his cases, and so when Prenda law came around, we basically, I said, look, you guys are trying to put a lot of work on my plate essentially, and I am kind of split here. And they said, well, we would like to basically have you work solely for Prenda Law, this is being Paul Hansmeier and John Steele. And so I wrapped up my arrangement with the arbitrator, and I became exclusive doing stuff for Prenda Law at that point.
THE COURT: Listen, last January, this past January, a few weeks ago, I guess you started withdrawing as counsel of record.
THE WITNESS: That is correct, yes.
THE COURT: All right. And you just testified
that you are no longer employed by Prenda?
i tas
ee
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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, —
THE COURT: So why did you leave?
THE WITNESS: Well, there is multiple reasons for it. Personal reasons, I am getting married soon. SolI ° 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
MAMMA TANARIS SARA A ee a SSMS RS ASASASS NSS
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parents. I just didn't see, and I was getting a lot of negative exposure that, you know, I just didn't want Seagoae 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
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