Judge Slaps More Fines on Prenda Attys, AF Holdings, Ingenuity

LOS ANGELES—The Prenda Law collaborators—John Steele, Paul Hansmeier, Brett Gibbs and Paul Duffy—are fast running out of road. Yesterday, after being earlier rebuffed by the Ninth Circuit Court of Appeals after filing an emergency appeal in a last minute bid to head off impending sanctions, the lawyers were slapped with additional monetary penalties by Judge Otis Wright on top of the original sanctions he originally levied against the four last month.

The additional penalty applies to the principals as well as Prenda clients AF Holdings and Ingenuity 13, supposed adult companies that Wright has inferred are actually owned by the Prenda Law principals. The actual ownership of these entities was one element of the questions asked by Wright during the Ingenuity case that the Prenda lawyers declined to answer in court, deciding instead to plead the Fifth.

In his Tuesday order, Judge Wright once again expressed barely concealed disdain for what he calls Prenda’s latest attempt “to remedy a problem of their own making.” Referring to the failed emergency application, which was kicked back to him by the Circuit for having been filed in the wrong court, he wrote, “Not only was this application improperly filed; but once again, Prenda resorted to an eleventh-hour plea for relief.”

He added, “Under the Court’s order, Prenda, along with John Steele, Paul Hansmeier, Paul Duffy, Brett Gibbs, AF Holdings LLC, and Ingenuity 13 LLC, were required to pay by May 20, 2013, an attorney’s-fee award of $81,319.72. By filing this application, it appears no such payment was made.

“Instead,” he continued, “an emergency motion was filed with the Ninth Circuit to stay enforcement of the order. That motion was promptly denied. (ECF No. 150.) Prenda now seeks to remedy a problem of their own making. By refusing to pay, or at least refusing to post a supersede as bond, Prenda (and the other parties) cannot establish that it ‘is without fault in creating the crisis that requires ex parte relief, or that the crisis occurred as a result of excusable neglect.’ (Mission Power Eng’g Co. v. Cont’l Casualty Co.) Prenda’s application is therefore DENIED

“Further,” concluded Judge Wright, “Steele, Hansmeier, Duffy, Gibbs, AF Holdings, Ingenuity 13, and Prenda are hereby ORDERED TO SHOW CAUSE why they have contravened the Court’s order to pay the attorney’s-fee award. The Court hereby imposes a penalty of $1,000 per day, per person or entity, until this attorney’s-fee award is paid or a bond for the same amount is posted. This penalty shall be paid to the Clerk of Court on the same day the attorney’s-fee award is paid or the bond is posted. This penalty must be paid unless it is evident that the award was paid or the bond was posted on or before May 20, 2013. Failure to comply will result in additional sanctions.”

The judge did add, however, “Upon motion and posting of a supersede as bond, the Court will stay execution of the attorney’s-fee award.”

It remains to be seen if even these new sanctions have their assumed effect of tempering the activities of the Prenda principals. As Ars Technica noted yesterday, “Even as the sanctions move forward, Paul Duffy's name has been showing up on new batches of threat letters regarding porn downloading.”

As far as the sanctioned entities go, paying out daily amounts rather than taking them in via settlements with alleged infringers is obviously not what the Prenda lawyers intended.

Judge Wright’s order can be read in its entirety here.