Another judge doubtful of Righthaven’s standing to sue

A federal judge suggested Friday he’ll dismiss another Righthaven LLC copyright infringement lawsuit because of the company’s lack of standing to sue over Las Vegas Review-Journal material.

Robert C. Jones, chief United States judge for Nevada, didn’t appear to be persuaded by a Righthaven attorney’s arguments during a hearing that its lawsuit against website operator NewsBlaze LLC should be allowed to proceed. NewsBlaze.com, based in Folsom, Calif., is a news aggregation site.

The suit against NewsBlaze was among 275 no-warning lawsuits that Las Vegas-based Righthaven has filed since March 2010 over R-J and Denver Post material.

Four other Nevada judges have already dismissed Righthaven lawsuits over R-J material because, despite Righthaven’s claims of ownership, its lawsuit contract with the R-J left the newspaper in control of the material Righthaven was suing over.

That’s not allowed under copyright case law that requires plaintiffs in infringement lawsuits to have exclusive rights to the material they sue over, the other Nevada judges ruled previously.

Defense attorneys say the rationale for this is that copyrights have a special place in the law and shouldn’t be bartered for profit-driven lawsuits. They say copyrights are used to both protect creative works like news stories and to encourage freedom of speech.

A fifth federal judge in Denver has similarly ruled Righthaven lacked standing to sue over a Denver Post photo there and on Thursday a magistrate judge in South Carolina threatened to dismiss Righthaven’s lone suit there over a Denver Post column for the same reason.

Friday’s hearing was the first time Jones has weighed in on the Righthaven lawsuits and the judge appeared to be familiar with dismissals of Righthaven lawsuits by fellow Nevada federal Judges Roger Hunt and Kent Dawson.

Shawn Mangano, an outside attorney representing Righthaven, on Friday insisted Righthaven has standing to sue under its twice-amended lawsuit contract with the R-J, with each of the amendments beefing up Righthaven’s ownership claims.

“We’ve alleged ownership and that the copyright has been infringed,” Mangano said.

Mangano urged Jones not to dismiss the case and noted Righthaven is appealing some of the earlier dismissals.

“For purposes of federal jurisdiction, we’ve stated a colorable claim. It’s not a frivolous claim,” Mangano said.

But Jones said Righthaven was “collaterally estopped” — or barred from trying to re-litigate the standing issue that was decided in the prior court rulings against it.

“You’ve been ruled against. The nature of the right that you possess is simply to bring suit, per findings on facts and per pleadings as a matter of law,’” Jones said.

“The issue is whether Righthaven even has a protectable interest (in the copyright). When all you have is the right to sue, you don’t have a protectable interest under the copyright law,” Jones said.

Mangano said that under Righthaven’s copyright assignments, Righthaven obtained ownership of R-J content and then licensed back to the R-J the right to exploit that material while keeping for itself the right to sue for accrued, present and future infringements.

But Jones said, “It just doesn’t ring true.”

“You never exploited any of these articles. The only thing you were created for was to pursue litigation for copyright infringements,” Jones said.

Mangano said there’s no requirement that a copyright holder exploit the copyrights for uses other than lawsuits and pointed to patent law as providing precedent for companies to buy copyrights and sue over infringements of those copyrights.

Jones was quick to point out that patent law is different than copyright law and, when it comes to copyright law, “We have a 9th Circuit (Court of Appeals) decision that says if you only transfer the right to sue, you have no protectable interest.”

“You have all these issues before the 9th Circuit Court of Appeals, why shouldn’t I allow you to add this to your list of appeals?” Jones asked, adding he planned to follow the lead of Dawson in his forthcoming ruling in the NewsBlaze case.

Dawson and U.S. District Judge James Mahan have rejected attempts by Righthaven to amend its suits to assert claims under the R-J lawsuit contract amendments of May 9 and July 27, with the judges ruling such attempts amount to impermissible amendments of the facts to manufacture standing.

Attorney J. Malcolm DeVoy IV of Randazza Legal Group in Las Vegas, representing NewsBlaze, urged Jones to dismiss the lawsuit with prejudice — meaning Righthaven could not sue over the same alleged infringement again and NewsBlaze could petition the court to recover its legal fees.

DeVoy told Jones that Righthaven’s lawsuit contract amendments with the R-J are “ineffectual” and that it still lacks standing to sue.

Jones’ suggestion he plans to dismiss the lawsuit appears to leave Righthaven hanging its hopes for a revival of its right to sue on two other Nevada judges who haven’t yet ruled on the issue: Gloria Navarro and Larry Hicks.

Jones, during the hearing, told the attorneys he was curious whether Righthaven was related to Stephens Media LLC, owner of the R-J.

“Are they a totally separate entity? Are they under (joint) control; are they sister entities?” Jones asked.

Mangano said they are separate entities.

In its active counterclaim against Stephens Media in another Righthaven case, the Democratic Underground has charged Righthaven is a Stephens Media front company that files frivolous lawsuits based on sham copyright assignments with the intent of shaking down defendants into settling.

Stephens Media, however, has said the Righthaven lawsuits are fighting a parasitic business model in which newspaper content is regularly stolen by online copyright infringers.

Court records show the family of billionaire Arkansas investment banker Warren Stephens owns half of Righthaven. The Stephens family also owns Stephens Media LLC. Las Vegas attorney Steven Gibson owns the other half of Righthaven.

Separately, Mangano said after the hearing that he planned to contact the 9th U.S. Circuit Court of Appeals for clarification of its ruling Wednesday refusing to stay proceedings in one of Righthaven’s appeals — this one over whether it must pay Randazza Legal Group’s $34,045 in fees for representing prevailing defendant Wayne Hoehn.

The court on Wednesday rejected an “urgent motion” by Righthaven, but the court didn’t specify whether that applied to Righthaven’s request that Randazza stop its collection activities or that Righthaven be excused from having to post a bond to guarantee payment of Hoehn’s fees should Righthaven lose the appeal.

Randazza Legal Group’s reading of the ruling is that it applied to both Righthaven requests, but Mangano said he wants clarification.

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  1. Chunky says:

    More good news for all good people and all good lawyers!

    The sooner we rid our judicial world of the Righthavens and Gibsons the better off we'll be!

    That's what Chunky thinks!

  2. I find it somewhat curious that Righthaven hasn't filed a suit that depends only upon the restated SAA against a new defendant. It makes perfect sense that judges have held that RH can't try to alter standing with it in existing cases, but a new one should be able to stand alone and determine the question in light of the current SAA.

    Why haven't they done that?

  3. Here is the text of 28 U.S. Code Section 1927:

    "Any attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct. "

    Now, let's take a case in which an attorney brings a motion in the alternative, asking the Court to do either A or B. The Court denies the motion. That denies both.

    In asking for clarification the attorney could be found to be unreasonably and vexatiously to have multiplied the proceedings and be required to pay the expenses incurred by the other side.
    Whether the Court will do this I do not know, but it has the legal power under the statute and Rules to do so. And with the history of this litigation, it would likely not be an abuse of discretion to do so.

    .