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A federal judge in Nevada has set a July 14 hearing date to rule on whether so-called “copyright troll” company Righthaven LLC and its in-house lawyers should be sanctioned for misleading the court. And in an odd twist, the defendant being sued by that company has stepped forward to argue on behalf of two in-house lawyers. The case involves a copyright suit brought by Righthaven against David Allen and his political website, Democratic Underground, after a site user posted part of an article from the Las Vegas Review-Journal newspaper. Court documents indicate that the newspaper’s owner, Stephens Media, hired attorney Steven Gibson to set up Righthaven, then assigned to Righthaven the right to sue websites that used articles from the newspaper. Under an agreement, Stephens Media would receive 50 percent of any recovery, and would retain its ownership of the copyrights. Judge Roger Hunt ordered the hearing for Righthaven to show cause why it shouldn’t be sanctioned because Gibson and his legal staff didn’t tell the court about Stephens Media’s financial interest in this or several hundred other similar cases it has filed. Gibson dropped out of the case and turned it over to outside counsel Shawn Mangano. Mangano, a private practitioner in Las Vegas, referred questions to Gibson, who didn’t return messages. In a TV interview, Gibson called the show cause flap “a minor technical issue.” Mangano argued in a court filing that Righthaven’s two former in-house counsel—assistant GC J. Charles Coons and attorney Joseph Chu—were inexperienced and unintentionally misled the court. Coons and Chu signed a court-required certificate of interested parties that didn’t include Stephens Media. But a memo filed by the website late last week argues that Gibson, Righthaven’s CEO, should be held responsible and not the two in-house counsel who worked for him. The memo argues, “Righthaven tries to lay the blame solely on two of its former in-house counsel, even though Righthaven’s CEO Steven Gibson, who negotiated and signed the Strategic Alliance Agreement, was counsel of record when the certification was filed.” It adds: “Moreover, as CEO of Righthaven and its senior lawyer, Mr. Gibson was the supervisor of both Mr. Coons and Mr. Chu …[and] was responsible for ensuring that the lawyers he supervised conformed to the Rules of Professional Conduct, including the duty of candor to the court.” The memo says the “breach of that duty, in this case and hundreds of others, was inexcusable.” The memo also raises the question of whether Coons and Chu were even aware of the financial details of the deal that Gibson signed with Stephens Media. The memo was signed by Kurt Opsahl, senior staff attorney at the Electronic Frontier Foundation, which joined the website’s defense team led by Laurence Pulgram of Fenwick & West. EFF is a non-profit advocacy group for civil rights. Besides blaming the two in-house counsel, Mangano also has argued that the Stephens Media interest was “indirect” and not a direct one required to be reported. He also said the court had authority to sanction an attorney but not the company. The website’s memo disputes both those claims. “Righthaven’s failure to fully disclose its relationship with Stephens Media has prolonged this litigation and hundreds of other cases, placed unnecessary burdens on the court and the defendants, and tarnished the integrity of the justice system,” the memo concludes. See also: “In-House Counsel Caught in the Crosshairs of Righthaven Litigation,” CorpCounsel.com, July 2011.

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