Commentary: Righthaven, Stephens Media filings leave plenty for judge to ponder

Ninety-eight. That’s the number of Righthaven LLC copyright infringement lawsuits in which Righthaven CEO Steven Gibson was one of the attorneys of record for his own company.

That information wasn’t reflected in Wednesday’s Righthaven court filing in which Las Vegas-based Righthaven said it and its attorneys – current and former – shouldn’t be sanctioned for failing to disclose Las Vegas Review-Journal owner Stephens Media LLC is an interested party in its suits over R-J material.

It’s common knowledge Stephens Media as well as Denver Post owner MediaNews Group assigned copyrights to Righthaven so it could file 274 infringement lawsuits since March 2010. What’s at issue now is whether Righthaven should be punished for failing to initially disclose Stephens Media would share in its lawsuit revenue.

Wednesday’s Righthaven court filing identified by name just three attorneys who, as Righthaven put it, either didn’t "fully comprehended" the language in the disclosure rule requiring disclosure of parties with “direct, pecuniary interest” in lawsuits; or didn’t "fully appreciate" the need to name Stephens Media as an interested party.

Those attorneys are current Righthaven outside counsel Shawn Mangano and former in-house attorneys J. Charles Coons and Joseph Chu.

Mangano in the filing named Coons and Chu as the attorneys prosecuting a Righthaven suit against the Democratic Underground before Mangano joined the case – but didn’t mention Gibson was one of the Righthaven attorneys who filed the lawsuit on Aug. 10, 2010.

And Gibson, of course, conceived the entire Righthaven litigation campaign.

Other former attorneys who represented Righthaven in lawsuits over Review-Journal material and who are not mentioned in Wednesday’s filing are:

--Jodi Donetta Lowry, who works with Gibson at the Las Vegas office of the Detroit law firm Dickinson Wright PLLC

--Anne Pieroni. Lately, she’s been working for the Las Vegas law firm Phillips, Spallas & Angstadt LLP.

--Ikenna K. Odunze. State Bar of Nevada records show he’s now with the Las Vegas law firm Jimmerson Hansen.

(Steven Ganim, currently another Righthaven attorney, is an attorney of record only in Colorado cases over Denver Post material. Righthaven has not been threatened with sanctions in Colorado).

This information is likely already well known to Roger Hunt, chief federal judge in Nevada, who issued the sanctions threat June 14 for what he called a "flagrant misrepresentation."

As Hunt put it June 14, "Frankly, if receiving 50 percent of litigation proceeds minus costs does not create a pecuniary interest under Local Rule 7.1-1, the court isn’t sure what would."

On top of that, Hunt’s assistants likely already have deduced the following from court records:

--In at least one Righthaven case, there was no certificate of interested parties filed.

--In at least one other, the certificate was filed only after a magistrate judge reminded Righthaven to do so.

Chu’s whereabouts are unknown.

Coons declined comment Thursday on Mangano’s assertions and about Righthaven, but did say, "I am not following the Righthaven saga very closely, by choice. I am grateful that phase of my career is behind me."

Coons is now with a Las Vegas law firm called Cooper Coons Ltd. A profile of him in the June issue of Nevada Business magazine for its "Legal Elite" report didn’t mention his affiliation with Righthaven, where his title was assistant general counsel.

This situation may leave Hunt weighing three alternative theories:

--One is that enforcement of the disclosure rule in unrelated cases in Nevada hasn’t resulted in sanctions, making it difficult to single Righthaven out.

For instance, Gibson, Lowry and a third Dickinson Wright attorney represent Florida company Stevo Design Inc. in a Las Vegas trademark lawsuit filed Feb. 24.

After no certificate of interested parties was filed by March 9, Magistrate Judge George Foley Jr. ordered the plaintiff to file one, and threatened sanctions if the certificate wasn’t filed in 10 days. Actually, this was a fairly routine reminder with the sanctions threatened as part of the legal boilerplate.

Lowry immediately filed the certificate, and that ended the issue of the tardy certificate in that case.

-- A second theory is that, as Mangano argued, there was no willful failure to disclose Stephens Media as an interested party.

-- A third theory, which would potentially be devastating to Righthaven, is that the failure to disclose Stephens Media was deliberate because such a disclosure would have undermined Righthaven’s lawsuit claims that it solely owned the copyrights at issue.

This potential linkage between Righthaven’s copyright ownership claims and its lawsuit disclosures is something Hunt has already commented on.

"The undersigned is well aware that Righthaven led the district judges of this district to believe that it was the true owner of the copyright in the relevant news articles. Righthaven did not disclose the true nature of the transaction by disclosing the SAA or Stephens Media’s pecuniary interests," Hunt wrote in his June 14 order dropping Righthaven’s lawsuit against the Democratic Underground.

The "transaction" Hunt referred to involved copyright assignments from Stephens Media to Righthaven for lawsuit purposes under their Strategic Alliance Agreement.

This potential linkage between Righthaven’s copyright claims and its disclosures was pointed out in March by attorneys for the Electronic Frontier Foundation and the San Francisco law firm Fenwick & West LLP, representing the Democratic Underground.

In a March 9 filing, here’s what they wrote about the newly-discovered Strategic Alliance Agreement:

"Righthaven has been conveyed no rights in the work (story) at issue other than the right to sue for infringement, a fact that renders the assignment to Righthaven invalid; Stephens Media is the real party in interest, engaging Righthaven as its agent to prosecute this action; Stephens Media retains the right to sue Democratic Underground under the agreement and Righthaven has been granted no rights to exploit the work in question, and thus, for the purpose of fair use analysis, can suffer no harm from the use of the (story) excerpt by Democratic Underground."

"Defendants also note that the litigation proceeds due Stephens Media pursuant to this agreement provide the company with a direct, pecuniary interest in the outcome of this case, and therefore Stephens Media should have been listed in Righthaven’s Certificate of Interested Parties."

There’s also plenty of reason to believe this issue was well thought out by Stephens Media and Righthaven well before Hunt issued his show cause order on June 14.

"Righthaven has been very consistent with this court when disclosing the certificate of interested parties in all of its cases," Stephens Media attorneys wrote in a Jan. 7 court filing. "Stephens Media has never been identified or disclosed as a party who has a direct pecuniary interest in the outcome of any Righthaven case. And for good reason, Stephens Media is not an owner, member or investor in Righthaven."

In fact, Righthaven is half owned by Gibson and half owned by investors who are part of the family of Arkansas investment banking billionaire Warren Stephens. He and his family also own Stephens Media.

In the same Jan. 7 filing, Stephens Media General Counsel Mark Hinueber wrote: "Stephens Media LLC is neither an owner, member or investor in Righthaven LLC nor holds any pecuniary interest in the company itself."

Judge Hunt, again, is likely well aware of the Stephens Media filings and likely has been contemplating the definition of "any pecuniary interest."

For the rest of us, the Merriam-Webster’s Dictionary of Law says "pecuniary" is simply an adjective meaning "consisting of, measured in, or relating to money."

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  1. The Nevada Bar is going to have to sort through all of this. This whole sordid mess gives the legal profession a black eye and if they can't police themselves, who will? I'm left wondering if Dickinson-Wright assumes any liability for the actions of their attorneys, including Gibson, involved in this mess.

  2. It is said that sharks won't attack or eat attorneys out of professional courtesy, but the sharks might make an exception for Gibson if they could stomach the taste.

  3. I would have to have second thoughts about using an attorney that does not know to file the proper paperwork or how to fill out that paperwork.

    You would think that most any attorney would know someone receiving 50% of the money is an "interested party".

    This is game playing plain and simple. Time for all involved to pay the price for abusing our legal system and costing us taxpayers a great deal of money in the process.

  4. At this point I have to think Judge Hunt is going to put most, if not all, of the responsibility on Gibson.

    The OSC was directed at Righthaven. As CEO, one would think that Gibson personifies Righthaven, especially given that Gibson is an attorney and member of the Nevada bar.

    Mangano's filing must have been at the instruction, and approval, of Gibson. Given that the filing neglects to include Gibson as one of the attorneys responsible for failing to mention Stephen Media's interest I think that Hunt is not likely to buy the "innocent incompetence" defense that Mangano has presented. I think this only adds more evidence that Righthaven (Gibson) deliberately tries to skirt the edge of the letter (and trample the spirit) of the law.

    Gibson's arrogance goes beyond even my own (and that's saying something, ask my boss.)

    The are two questions at this point. One, how hard Hunt will come down on Gibson? Two, will the state bar take action against Gibson?

  5. I don't know if any of you have read Kincannon's amicus brief (Steve reported on it yesterday) but he actually explores the very distinct possibility that there could be no client attorney privilege between Righthaven and SM --- and as such everything (phone records, emails, meetings, etc) would be discoverable.think about that for a second --- you know that had to make a few butts pucker in town.

    I don't think any of those monkeys ever dreamed it'd blow up this big this fast. I don't see how there will ever be a profit.