se 2:12-cv-08333-ODW-JC Document 23-1 Morgan E. Pietz (SBN 260629) THE PIETZ LAW FIRM 3770 Highland Ave., Ste. 206 Manhattan Beach, CA 90266 mpietz@pietzlawfirm.com Telephone: (310) 424-5557 Facsimile: (310) 546-5301 Attorney for Putative John Doe in 2:12-cv-08333-DMG-PJW UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA INGENUITY 13, LLC, a Limited Liability Company Organized Under the Laws of the Federation of Saint Kitts and Nevis, Filed 12/18/12 Page 1of19 Page ID #:224 Case Number(s): 2:12-cv-08333-DMG-PJ Assigned to: Judge Dolly M. Gee Referred to: Magistrate Judge Patrick J. Plaintiff, Walsh ™s MEMORANDUM IN SUPPORT OF PUTATIVE JOHN DOE’S EX PARTE JON EOE, APPLICATION FOR LEAVE TO TA EARLY DISCOVERY AND FOR A Defendant. FURTHER STAY OF THE SUBPOENA RETURN DATE ae MEMORANDUM IN SUPPORT OF PUTATIVE JOHN DOE’S EX PARTE APPLICATION FOR LEAVE TO TAKE EARLY DISCOVERY AND FOR A FURTHER STAY OF THE SUBPOENA RETURN DATE Case 2:12-cv-08333-ODW-JC Document 23-1 Filed 12/18/12 Page 2of19 Page ID #:225 1 TABLE OF CONTENTS 2 : TEA BUS Or OI gi hese ce psrncep css cease ch orcas pea eos esac og a eposereseeaones sees ii ; DABBLE OP AL AOR TES co ssadeahscsivoussianbansnecaspeouneintsstaipaleaincanipnanenteaiudeaasgateuae mae: ili MEMORANDUM OF POINTS AND AUTHORITIES ........ cee ceecceeceseeseeeeeeeeeeeereeereeeneenees 1 5 (ayy. Wintec ction Bind SWAY 55 oases cocersensits react netretSecaeptenerenninseneonesescpanbicheesintecuece 1 ° (a) Factual Background Regarding Alan Cooper, Ingenuity 13, and AF Holdings.. 4 q UU) AUD aT cs steep ces avec castetensispaneeiocany Sacasxasee eran ciesieetiiseutsai eat poeeeoeeielasnront 8 8 (c) The Requested Early Discovery is Relevant to the Issue of Plaintiff’s Standing to Sue for Copyright Infringement and is Also Relevant to Uncovering a 9 Possible Fraud on the Court and/or Undisclosed Financial Interests in the Case 8 10 (d) Prejudice to the Plaintiff Can be Easily Avoided .............cccceccceceseeeteeeeneeeenees 11 - (e) Need for the Requested Discovery Outweighs the Minimal Prejudice to Plaintiff 11 7 (f) Need for Ex Parte Relief to Preserve the Ability of Movant to File a Meaningful B AY Fe) oT aiy (8 © 11 ( This signature is found the last page of the attachment to Allan Cooper’s sworn affidavit, which is a copy of his lease with John Steele, a copy of which is filed herewith as Appendix 2. ° This signature is found on the last page of Exhibit B to the complaint, which is the copyright assignment agreement for the copyright at issue in the above-referenced action, a copy of which is filed herewith as Appendix 5. ois MEMORANDUM IN SUPPORT OF PUTATIVE JOHN DOE’S EX PARTE APPLICATION FOR LEAVE TO TAKE EARLY DISCOVERY AND FOR A FURTHER STAY OF THE SUBPOENA RETURN DATE ase 2:12-cv-08333-ODW-JC Document 23-1 Filed 12/18/12 Page 12o0f19 Page ID #:235 (b) Applicable Law As correctly noted by the plaintiff in its own brief seeking early discovery, “Courts within the Ninth Circuit use a balancing test to decide whether motions for expedited discovery should be granted. Semitool, Inc. v. Tokyo Electron Am., Inc., 208 F.R.D. 273 (N.D. Cal. 2002) (granting expedited discovery under a “balance of hardships” analysis). Under the balancing test standard, a request for expedited discovery should be granted where a moving party can show that its need for expedited discovery outweighs the prejudice to the responding party. /d. at 276 (“Good cause may be found where the need for expedited discovery, in consideration of the administration of justice, outweighs the prejudice to the responding party.”); see also Texas Guaranteed Student Loan Corp. v. Deepinder Dhindsa, 2010 U.S. Dist. LEXIS 65753, No. 10-00335 (E.D. Cal. 2010).” ECF No. 8, p. 3, 10/8/12. (c) The Requested Early Discovery is Relevant to the Issue of Plaintiff’s Standing to Sue for Copyright Infringement and is Also Relevant to Uncovering a Possible Fraud on the Court and/or Undisclosed Financial Interests in the Case Moreover, “The use of a forged document in defense of a lawsuit prejudices both the opposing party and the judicial system itself. . .A court may use its inherent powers to preserve the integrity of the judicial process and prevent the perpetration of fraud on the court.” Forsberg v. Pefanis, 261 F.R.D. 694, 702 (N.D. Ga. 2009); citing Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 246, 64 S. Ct. 997, 88 L. Ed. 1250, 1944 Dec. Comm'r Pat. 675 (1944). As the Ninth Circuit has explained, “It is well settled that dismissal is warranted where. . .a party has engaged deliberately in deceptive practices that undermine the integrity of judicial proceedings: ‘courts have inherent power to dismiss an action when a party has willfully deceived the court and engaged in conduct utterly inconsistent with the orderly administration of justice.”” Anheuser-Busch, Inc. v. Natural Beverage Distribs., 69 F.3d 337, 348 (9th Cir. Cal. 1995); quoting Wyle v. R.J. Reynolds Indus., Inc., 709 F.2d 585, 589 (9th Cir. 1983) (upholding dismissal of complaint pursuant to court's inherent -8- MEMORANDUM IN SUPPORT OF PUTATIVE JOHN DOE’S EX PARTE APPLICATION FOR LEAVE TO TAKE EARLY DISCOVERY AND FOR A FURTHER STAY OF THE SUBPOENA RETURN DATE ase 2:12-cv-08333-ODW-JC Document 23-1 Filed 12/18/12 Page 130f19 Page ID #:236 power where plaintiff's denials of material fact were knowingly false); see also Combs v. Rockwell Int'l Corp., 927 F.2d 486 (9th Cir. 1991) (affirming dismissal under the court's inherent power as appropriate sanction for falsifying a deposition), cert. denied, 502 U.S. 859, 116 L. Ed. 2d 138, 112 S. Ct. 176 (1991). If there are indeed forged documents in the copyright chain of title, then there are obvious standing problems with respect to AF Holdings and Ingenuity 13’s ability to sue for copyright infringement. Standing is a particularly important concern in lawsuits like this because it was on the rocky issue of copyright standing that Righthaven copyright troll cases foundered.’ E.g., Righthaven, LLC v. Democractic Underground, LLC, 791 F. Supp. 2d 968, 973 (D. Nev. 2011)(Case No. 10-cv-1356-RLH-GWF, ECF No. 116, 6/14/11) (dismissing copyright infringement claims brought by “copyright troll” company taking assignment to copyrights for lack of standing due to technical problems with the assignment documentation); see also, generally, S. Balganesh, “The Uneasy Case Against Copyright Trolls,” 86 S. CAL. L. REV (forthcoming May 2013), p *28° (discussing how the Righthaven court applied Silvers v. Sony Pictures Entertainment, Inc., 402 F.3d 881 (9th Cir. 2005), which prohibits bare assignment of a mere right to sue, and noting that “As a functional matter then, Si/vers operates as copyright law’s rule against both the assignment of actionable copyright claims and champertous” lawsuits). ’ The Righthaven actions, which began in 2010, were the first in the modern era were a company was purpose-built to take assignment to copyrights and then go into business as a professional copyright infringement plaintiff. After Judge Hunt of the District of Nevada learned that there was a problem with Righthaven’s assignment documents, the result was that all of Righthaven’s many infringement lawsuits were eventually dismissed, Righthaven was liquidated, and its copyrights sold at auction to pay the attorneys fees of the defendants who Righthaven had sued. * An abstract to and copy of this forthcoming law review article is available here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2150716 ” “Champerty — 1. An agreement between an officious intermeddler in a lawsuit and a litigant by which the intermeddler helps pursue the litigant’s claim as consideration for receiving part of any judgment proceeds; specif. an agreement to divide litigation proceeds between the owner of the litigated claim and a party unrelated to the lawsuit who supports or helps enforce the claim. . .2 -9- MEMORANDUM IN SUPPORT OF PUTATIVE JOHN DOE’S EX PARTE APPLICATION FOR LEAVE TO TAKE EARLY DISCOVERY AND FOR A FURTHER STAY OF THE SUBPOENA RETURN DATE 27 28 ase 2:12-cv-08333-ODW-JC Document 23-1 Filed 12/18/12 Page 140f19 Page ID #:237 Further, beyond standing, the requested discovery on Alan Cooper is also highly relevant to determining whether there are undisclosed parties with a pecuniary interest in the outcome of the litigation, and to potential improper fee splitting. What seems increasingly likely is that Minnesota Alan Cooper’s identity was misappropriated, without his knowledge or consent, in a fraudulent attempt to hide the fact that Prenda Law, Inc. and/or John Steele are the real parties in interest behind AF Holdings and Ingeunity 13. The fact that these two shell entities were organized in St. Kitts and Nevis, a notorious privacy haven, which has strict laws guarding against the recording or disclosure of corporate ownership information,'” lends further support to this theory. Moreover, the hearing transcript from Prenda’s Sunlust case in Florida suggests that there is a pattern here: when Courts pry as to who is really behind Prenda’s lawsuits, Prenda and/or John Steele attempt to defraud the court. Appendix 3. In Sun/ust, when Prenda was ordered to produce a client principal at a hearing, the person who showed up was a current close associate of John Steele—Steele’s former paralegal, Mark Lutz—despite the fact that, as the Court determined through questioning, Mr. Lutz had no authority and knew nothing about the plaintiff entity. From defrauding a Court with respect to producing a purported agent who lacks authority, it is not then a far leap to imagine that the same thing occurred with respect to Alan Cooper. That is, Prenda and/or John Steele simply chose another person Mr. Steele knew (and whose signature they had a copy of), namely Alan Cooper of Minnesota, and attempted to hold this person out in federal court filings as the principal of AF Holdings and Ingenuity 13 (only without telling Mr. Cooper about it). In short, there appears to be a possible pattern of Prenda Law, Inc. and/or John Steele seeking to defraud Hist. A writ available to the party who is the target of a champertous action.” Black’s Law Dictionary, Eighth Ed., p. 246. '°