Amended Charges, Answer, In Copyright Troll Bar Case
The Illinois Administrator has filed an amended complaint against John Steele in connection with the much-reported “copyright troll” litigation.
Ars Technica reported on related criminal charges last December
The indictment explains how the defendants “used sham entities to obtain copyrights to pornographic movies—some of which they filmed themselves—and then uploaded those movies to file-sharing websites in order to lure people to download the movies.”
Prenda Law sued hundreds of people for copyright infringement, accusing them of illegally downloading pornographic movies. In 2013, US District Judge Otis Wright sanctioned the firm in a Los Angeles case, along with Steele and Hansmeier personally, saying they had perpetrated a fraud on the court. Wright also referred the case to criminal investigators.
Wright’s damning order set off a domino effect, with Prenda and its affiliated lawyers facing a long series of judicial sanctions and fee orders in courts around the country. Steele and Hansmeier fought many of the sanctions, but earlier this year, panels of appellate judges at both the 7th Circuit and 9th Circuit ruled against them and said they must pay for hundreds of thousands of dollars in attorneys’ fees to defense lawyers who fought their claims.
State Bar investigators took action as well, filing complaints that ended this year with both lawyers having their licenses to practice law suspended. Hansmeier, who built a new legal practice suing small businesses over violations of the Americans With Disabilities Act, filed for bankruptcy last year.
NBC news also had a story.
The 76-page answer filed on Steele’s behalf by counsel denies or disclaims involvement with many of the factual averments.
Steele is admitted in Illinois; Hansmeyer in Minnesota. The apparent strategy here is to point the finger of blame away from Steele to others.
I faced a similar problem in a D.C. bar discipline case involving two attorneys – William J, Chadwick and James D. Hutchinson. Both were admitted in D.C. Chadwick also was admitted in California. Together the two had agreed to tell a false story to the SEC to cover up profits made from inside information.
Prior to my time, Bar Counsel filed charges against both attorneys.
Chadwick retained a prominent attorney – future Bar President and Deputy Attorney General Jamie Gorelick, who successfully (and over Bar Counsel’s objection) moved to stay the proceedings against him while the case against Hutchinson moved forward and California proceeded against him.
I took over the Hutchinson case after a hearing committee report had been filed. I moved to vacate the Chadwick stay as the proceedings in California had stalled (to put it mildly) and it became apparent that the strategy was for each to paint the other as the primary bad actor. The board declined to revisit the earlier ruling.
The Hutchinson case eventually became a highly-significant en banc decision on disciplinary sanctions. California finally acted in Chadwick and D.C. imposed reciprocal discipline.
A close examination of the District of Columbia and California disposition will reveal that the strategy worked like a charm.
Of course, if Steele and Hansmeyer are both convicted, the pointing of fingers will not affect the dispositions. (Mike Frisch)