Judge: Righthaven masquerading as a company

A judge today fined newspaper copyright lawsuit filer Righthaven LLC of Las Vegas $5,000 for misleading a federal court about its lawsuits.

A Righthaven attorney, Shawn Mangano, said after a hearing before U.S. District Judge Roger Hunt that the firm may appeal the sanction and that its lawsuits will continue.

Hunt said Righthaven deliberately failed to disclose the owner of the Las Vegas Review-Journal shares in Righthaven’s lawsuit revenue. But, without explanation, Hunt didn’t sanction any of the Righthaven attorneys that may have been responsible for the misrepresentation.

Mangano said he and two former Righthaven in-house attorneys, Joseph Chu and J. Charles Coons, made an honest mistake by failing to disclose the interest of Stephens Media LLC in Righthaven’s lawsuits over R-J material.

But Hunt noted it was Righthaven’s CEO, Las Vegas attorney Steven Gibson, who drew up the lawsuit contract between Righthaven and Stephens Media. Defense attorneys have said it was Gibson who signed off on some of the false disclosures and that Gibson is behind the entire Righthaven litigation campaign.

Besides the $5,000, Hunt ordered Righthaven to disclose its original lawsuit contract with Stephens Media in active lawsuits over R-J material. He also ordered that a transcript of today’s hearing, in which he made several negative comments about Righthaven’s conduct, be posted on Righthaven court dockets.

The sanctions could have been more severe, such as disqualification of attorneys. But even with the light sanction, Mangano said Righthaven is considering appealing because Hunt based the sanction on grounds that Righthaven wasn’t given a chance to respond to.

Besides suing over alleged online infringements of material from the R-J, Righthaven sues over Denver Post material. Including a new suit filed Wednesday, it has filed 275 lawsuits since March 2010.

Righthaven has seen three federal judges in Nevada dismiss some of its suits based on its lack of standing — and additional judges in Nevada and Colorado are threatening to do the same.

But Righthaven, with a second amendment to its lawsuit contract with Stephens Media, insists it has solid standing to sue over R-J material.

Hunt dismissed Righthaven’s lawsuit against the Democratic Underground June 14 because of the standing issue and at that time threatened sanctions, saying Righthaven had made “multiple inaccurate and likely dishonest statements to the court.”

Hunt elaborated today. Interestingly, he started out by saying Righthaven — a corporation not licensed to practice law — has been acting like a law firm.

“In the court’s view, the arrangement between Righthaven and Stephens Media is nothing more, nor less, than a law firm — which incidentally I don’t think is licensed to practice law in this state — with a contingent fee agreement masquerading as a company.”

That may bolster the claims of South Carolina attorney Todd Kincannon, who has been litigating against Righthaven and claims it has unlawfully been practicing law.

Hunt went on to say he didn’t buy Righthaven’s arguments that the failure to disclose Stephens Media as an interested party in its lawsuits over R-J material was an oversight.

“The court finds those representations are not true and that they are intentional,” Hunt said.

Laurence Pulgram, a San Francisco attorney representing the Democratic Underground in the case in which the sanction was ordered, said the judge’s condemnation of Righthaven’s deliberate misrepresentations was significant.

As word spreads among attorneys of the sanction, it may increase the chance that defendants that settled with Righthaven may reopen their cases — or separately sue it — on the theory that settlements were made based on facts misrepresented by Righthaven.

And Kurt Opsahl, an attorney for the Electronic Frontier Foundation in San Francisco also representing the Democratic Underground, said the foundation is likely to contest Righthaven’s claims that under the latest amendment to its lawsuit contract it has the right to sue.

Although copyright holders like newspapers and movie and record producers use copyrights for informational and entertainment purposes, “You can’t transfer the bare right to sue,” Opsahl said.

The Democratic Underground’s counterclaim against Stephens Media will continue while Righthaven’s next big test will likely be when U.S. District Judge James Mahan holds a hearing later this month on whether to dismiss another Righthaven lawsuit on the standing issue.



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Discussion 8 comments

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  1. Let the games begin.

    How long can Righthaven last with judgments against them to pay attorney fee's, now court fines are starting.

    Their income can not be more then their costs at this point. Bad business model all the way around.

    Do they have money stashed away for their BK filing? ;-)

  2. Oh, I so wished he had punished the lawyers. Maybe the state bar will take care of that issue.

  3. Righthaven LLC fined $5,000 for misleading the court about its lawsuits. Attorneys for Righthaven were not personally punished by Judge Hunt. [Steve Green]

    Righthaven likely does not realize this, but once you have been sanctioned for misrepresentations, Rule 11 violations and state bar sanctions often follow, especially for this now-infamous lawsuit mill. Every motion can now can refer to this ruling by Judge Hunt.

    An I/P attorney when I was first served as a defendant by Righthaven in March, told me: Never lie in federal court. Everything you - on paper or vocally - better be the whole truth, or you will be tainted forever in the District.

    Mangano and Gibson are too foolish and arrogant to realize this truism.

  4. The $5000 is the easy part. Righthaven has now been found to have lied to a Federal Court. Now the Nevada State Bar will have to get involved and perhaps even the Nevada Attorney General.

  5. If Righthaven is indeed found to be a law firm then Gibson can hit with further sanctions for having non-attorneys with an ownership interest in the firm.

    Judge Hunt is starting to peel back the layers so that we might finally get an answer to why Gibson feels a transfer of copyright ownership is needed. That action is the at the heart of Righthaven's problems right now. (Not that there aren't others even if the transfer wasn't present.)

  6. Ken,

    Who we do know in Neveda to sanction Gibson and Mangano?

    Can a non-lawyer do it?

  7. Stevie & Shermie...

    You both have your fists FULL of fresh M-80's...
    Each of you have just had one of them fire up.
    You DO realize what happens next, correct?
    (& yes, it's TOO LATE to drop them now.)
    The dangers of playing with fire...

  8. "A Righthaven attorney, Shawn Mangano, said after a hearing before U.S. District Judge Roger Hunt that the firm may appeal the sanction and that its lawsuits will continue."

    Well Mr. Mangano? WE ARE WAITING TO BE SERVED. You filed against us on May 5...what is taking so long?? We imagine you will want to actually dismiss that action and file an entirely new action and complaint first so that you can argue your latest sham agreement with Stepehens Media applies. We shall wait patiently for the opportunity to fight you tooth and nail. We hope the untold hours you will have to spend in litigation with us will seem worth it considering our intention to file every appropriate motion, response and counterclaim reasonable to an aggressive and determined defense. Our first expected motion, to dismiss on various grounds, has been waiting in final draft for weeks.

    The Law Med Blog