The law firm whose attorneys were sanctioned by a federal judge for fraudulently filing dozens of copyright infringement cases against people accused of downloading pornographic films has voluntarily dissolved after posting more than $237,000 in bonds in the case.
U.S. District Judge Otis Wright on May 6 sanctioned four lawyers associated with Chicago’s Prenda Law Inc., concluding that they “suffer from a form of moral turpitude unbecoming of an officer of the court.” He referred the attorneys to licensing authorities for possible misconduct and to federal prosecutors for possible criminal violations of the U.S. Racketeer Influenced and Corrupt Organizations Act.
The lawyers, arguing they were denied due process rights at the sanctions hearing, immediately appealed Wright’s order to the U.S. Court of Appeals for the Ninth Circuit. They also have filed numerous motions to stall payment on the sanctions—originally nearly $84,000.
On May 23, one of the sanctioned attorneys, Paul Duffy, filing on behalf of Prenda Law, posted a $101,000 bond pending the firm’s appeal. But Morgan Pietz, the attorney representing a John Doe defendant in the case, argued that the bond should be increased to $237,583 given “the high likelihood that some or all of the Prenda parties will seek bankruptcy protection before their various appeals are concluded.” Wright granted that request, ordering the firm’s lawyers to post another $136,000 bond by July 15.
Duffy posted that bond on July 23; three days later, Prenda Law voluntarily dissolved, according to the Illinois Secretary of State’s Web site. Duffy did not return a call for comment.
Pietz, of The Pietz Law Firm in Manhattan Beach, Calif., declined to comment about Prenda Law’s dissolution. As to the bond being posted, he said: “I don’t have the money in hand, but it’s almost as good.”
The Ninth Circuit, which has consolidated eight appeals of Wright’s order, has scheduled a single opening brief to be due on November 19.
Meanwhile, the sanctioned lawyers have turned against each other in court. John Steele, who lives in Miami Beach, Fla., has lodged a complaint with the State Bar of California against former colleague Brett Gibbs, who represented Prenda Law client Ingenuity 13 LLC in the case before Wright.
Gibbs, an attorney in Mill Valley, Calif., sought to distance himself from his Prenda Law colleagues once sanctions became imminent. On May 29, he was granted a request to withdraw from his representation of Ingenuity 13. Wright also relieved Gibbs from contributing to Prenda Law’s bond payments given his financial condition, though sanctions against him remain in place. In court documents, Gibbs claims he has less than $500 in a bank account and ongoing medical expenses related to having been diagnosed with brain cancer in 2009.
In his bar complaint, filed with the court July 11, Steele claims that Gibbs, who originally was the only Prenda Law attorney facing sanctions, lied about his involvement in the case by pointing the finger at him and another sanctioned Prenda Law attorney, Paul Hansmeier.
“Attorney Gibbs acted inappropriately in a case in front of Judge Wright and filed pleadings that insulted the court,” he wrote. “When he was forced to answer for his misconduct, he lied and blamed others who had no relation to the case.”
Gibbs did not return a call for comment; Steele and Hansmeier could not be reached.
Steele also moved for $100,000 in sanctions against Pietz and Nicholas Ranallo, of the Ranallo Law Office in Boulder Creek, Calif., another attorney representing a John Doe defendant in the case, alleging they had filed “scores of papers” in the case without serving him or any of the other Prenda Law attorneys, who all are pro se.
“The attempt by attorneys Pietz and Ranallo to systematically deny pro se persons their right to be heard is a critical due process violation that the Court must swiftly address,” he wrote on June 21. Their “brazen misconduct,” he added, required Wright to vacate the additional bond payments and refer Pietz and Ranallo to the U.S. District Court for the Central District of California’s disciplinary committee.
Wright denied that request, but Steele moved for reconsideration, citing a newly discovered email in which Pietz admitted he failed to serve the Prenda Law attorneys with papers.
On July 18, Wright denied Steele’s reconsideration motion, concluding that Steele bore the blame for having not been served.
“The court said not only had he given the wrong address when he appeared pro se, but the rules require that he also give a fax number, a phone number, an email address — and he didn’t give any of that,” said Lawrence Heller, of Heller & Edwards in Beverly Hills, Calif., who was retained by Pietz and Ranallo to oppose Steele’s motion.
Wright also found that the Prenda Law attorneys continued to work “in concert” with one another. “Even without these indicia, the Court has already determined that the Prenda parties have a history of conspiring together—there is nothing to suggest that they have stopped,” he wrote.
He then directed Ranallo and Pietz to move for sanctions against Steele for having filed a frivolous motion. Instead, they reached an agreement in which Steele paid their $5,400 in fees, according to court records.
But Wright added sanctions of $500 to each of the Prenda Law attorneys for each day their bond payment had been delayed.
Contact Amanda Bronstad at email@example.com.