Of all the dishonest, dissembling lawyers at large in our country, one must tip one’s hat to the “porno-trolling” bullies who once operated as Prenda Law.
Remember Prenda? Its scheme was to collect Internet addresses of computers that might have been used to download pornographic movies for free. Then the firm contacted owners of those Internet accounts, accusing them of piracy and offering to make the case go away for a few thousand dollars, or to go public with a lawsuit. Prenda’s expectation was that many people, terrified of being identified publicly as porn fiends, would simply pay up.
The Prenda saga is uplifting, in its way. While it shows what mischief bad, dishonest lawyers can get up to when they put their minds to it, the story also shows the limits of sleazy behavior.
We gave [Prenda] some friendly advice: stop digging. Apparently they did not realize that we meant what we said.
During a federal appeals court hearing in May, Judge Harry Pregerson called this “an ingenious, crooked, extortionate operation.” Pregerson was 91 then, so we can assume he knew extortion when he saw it. Another judge called the Prenda lawyers a “porno-trolling collective.”
The Prenda lawyers — John Steele, Paul Hansmeier and Paul Duffy — were riding high until they ran into a buzzsaw in the hands of Los Angeles Federal Judge Otis D. Wright, who started lowering the boom on them. Judges in courts nationwide, where Prenda had plied its trade, followed suit. Hansmeier was driven into bankruptcy and has agreed to give up his law license for at least four years. Duffy died (curiously, on the very day of an adverse court ruling). Steele is still practicing law in Chicago, but judges’ tempers are getting short.
The latest are three judges of the 7th Circuit U.S. Appeals Court in Chicago, who were asked to rule on contempt sanctions imposed on the trio by a lower court. This week they became the latest to throw the book at the Prenda gang. (H/T to Joe Mullin of Ars Technica, who has stuck to these characters like glue.)
Observing that the court already had ruled once against the lawyers, Chief Judge Diane Wood, writing for a unanimous panel, wrote that the first time around “we gave them some friendly advice: stop digging. Apparently they did not realize that we meant what we said.” Instead, she wrote, they lied to the lower court and “engaged in discovery shenanigans.” They upheld most of the sanctions and sent one contempt sanction against Steele back to the lower court, where the smart money says it may be refashioned, but probably not eliminated. We tried to reach Hansmeier, who did not answer at the numbers we tried, and Steele, who hasn’t responded to a phone message.
The shenanigans Wood mentioned would be farcical if they hadn’t wasted so many people’s time. They began with a court-ordered sanction of $260,000 against the attorneys, who claimed they had no money or assets to pay it. Lawyers for defendants who had sued the Prenda trio to stop their bullying, and who were due legal fees, went trawling among their bank accounts with subpoenas.
At one point, Duffy sent JPMorgan a copy of his motion to quash the subpoenas, somehow failing to mention that the motion had been denied. Steele and Hansmeier withdrew a total of more than $680,000 from their bank accounts while claiming they were essentially broke. Steele’s approach, Wood wrote, “has little but chutzpah—a quality that Steele and his compatriots have long demonstrated— going for it.” She called it an “entire pattern of vexatious and obstructive conduct” that makes the sanctions “easy to justify.”
Audacity on Prenda’s scale can be hard to stamp out, but the latest appellate ruling hints that the endgame is nigh. The activities of Steele and Hansmeier are now so well-known and transparent that no judges are fooled any more. The shame is that they carried on so long and cost so many innocent people so much before they were stopped.
10:58 a.m.: This post has been updated with details of the court ruling against Steele.