Lawyers sparring over Righthaven copyright lawsuit issues

With litigants in the Righthaven newspaper copyright infringement lawsuit campaign waiting for key rulings on Righthaven’s standing to sue, attorneys continue pounding away at each other on that and other issues.

Las Vegas-based Righthaven LLC is the copyright enforcement partner of the Las Vegas Review-Journal and the Denver Post. It has filed 274 lawsuits over alleged online infringements of material from those newspapers since March 2010, attracting national attention in part because of its policy of suing before trying to resolve infringement issues out of court. Two suits have been thrown out on fair-use grounds and Righthaven is appealing both rulings.

Thirty-five Righthaven suits in Colorado over a Denver Post photo are on hold while the judge handling all of those cases reviews the standing issue while several of the Nevada federal judges hearing Righthaven cases are also considering arguments for and against dismissal focused on the standing issue.

In Nevada, Righthaven insists it has the right to sue over alleged infringements based on copyrights it obtains from Review-Journal owner Stephens Media LLC.

Attorneys for Righthaven defendant the Democratic Underground, who convinced a judge to unseal the Stephens Media/Righthaven lawsuit contract, argued again in their latest court filings last week that this contract provides for sham copyright assignments.

The Democratic Underground case involves a message-board user posting there the first four paragraphs of a 34-paragraph Review-Journal story about politician Sharron Angle, with full credit to the Review-Journal and a link back to the R-J website.

Fair use rulings in the Righthaven litigation would likely find this wasn’t an infringement, but Righthaven can’t simply drop the lawsuit because the Democratic Underground is countersuing and is demanding Righthaven and Stephens Media pay its legal fees. Those fees are likely substantial by now, with the case docket growing to 109 entries since Aug. 10.

Democratic Underground attorneys continue to say Righthaven lacks standing to sue since Stephens Media decides who Righthaven can sue and since Stephens Media maintains control of the copyrights as exclusive licensee of the copyrighted material.

Case law has confirmed that Congress, in writing and amending the Copyright Act, prohibited entities from obtaining copyrights for the sole purpose of filing lawsuits, the Democratic Underground attorneys say.

Even recent amendments to the lawsuit contract didn’t correct this problem, Democratic Underground attorneys with the San Francisco-based nonprofit online freedom group the Electronic Frontier Foundation (EFF) wrote in their filing.

"Even under the amendment, Stephens Media continues to dictate whether any lawsuit can be filed by its agent, Righthaven; whether to reclaim the copyright at any time it wishes (for a nominal payment of $10) and whether Righthaven can enter any other license (for use of copyrighted material) – which Righthaven has no demonstrated intention to do, and which the amendment allows Stephens Media to veto," the EFF attorneys wrote in a filing Friday.

They wrote that the lawsuit contract, "revealed Righthaven’s relationship with Stephens Media to be what was always suspected: an illegitimate attempt to vest an entity with nothing more than the right to prosecute actions for copyright infringement."

Attorneys for Righthaven, however, fired back in another case on the same issue that recent challenges to its right to sue are "just the latest in a series of such attacks lodged against Righthaven and its perceived business model that first originated as speculative, conspiratorial theories in the boundless realm of cyberspace and that have since been reflected in court filings."

"Righthaven trusts that its compliance with controlling legal authority unquestionably establishes its standing to maintain this action and that it will ultimately prevail before the court," its attorneys wrote in their filing.

It’s unknown when the Nevada judges hearing the Righthaven cases will rule on the standing issue. One of the judges, U.S. District Judge James Mahan, has scheduled a hearing on the issue for next month.

EFF attorneys for the Democratic Underground, in the meantime, have been pressing for more information on the origins of Righthaven.

The company is half owned by Las Vegas attorney Steven Gibson and half owned by SI Content Monitor, which in turn is owned by members of the family of Arkansas investment banking billionaire Warren Stephens.

The Stephens family also owns the Stephens Media newspaper chain including the Review-Journal.

Attorneys for Stephens Media, in arguing against having to produce extensive records sought by the Democratic Underground, argued in court papers last week that the Democratic Underground is not entitled to any communications concerning the formation of Righthaven or creation of the lawsuit contract, called the Strategic Alliance Agreement.

That information is irrelevant to the lawsuit and the Democratic Underground’s counterclaim against Stephens Media and is not calculated to lead to the discovery of admissible evidence, Stephens Media attorneys said.

They added the information sought is part of a "fishing expedition" and is aimed at furthering the Democratic Underground’s public relations campaign against Stephens Media and Righthaven.

Records show the Democratic Underground has been seeking communications between Stephens Media and Righthaven and Jackson Farrow, general counsel for Stephens Capital Partners LLC in Little Rock, Ark.; and between Stephens Media and Righthaven and Warren Stephens.

The Democratic Underground has also asked Righthaven to provide communications between it and several Stephens Media executives including former Review-Journal publisher Sherman Frederick; Stephens Media CEO Michael Ferguson, current R-J Publisher Bob Brown and Stephens Media General Counsel Mark Hinueber.

Democratic Underground attorneys say they’re entitled to the information they’re seeking about Righthaven, Stephens Media and SI Content Monitor (owned by Stephens family members), as "Stephens Media, by its affiliate SI Content Monitor, appears to control Righthaven."

"A core issue in this action, and the hundreds of others filed by Righthaven, is whether or not the purported assignment to Righthaven is a sham and champertous. Democratic Underground believes that Righthaven was created as a tool to bring lawsuits on Stephens Media’s behalf, without Stephens Media taking responsibility for them. Defendants assert that Stephens Media intentionally designed the relationship with Righthaven to skirt the copyright laws and create a patina of legitimacy for Righthaven, while providing nothing of value to Righthaven other than the right to sue people," the EFF attorneys said in an April court filing.

A magistrate judge has set a hearing for next week on this discovery dispute.

Attorneys in another case, in the meantime, are fighting Righthaven over what attorney’s fees, if any, Righthaven should be required to pay.

The case involves defendants Michael Leon of Fitchburg, Wisc., and Denise Nichols of Wheat Ridge, Colo., who were sued by Righthaven in Las Vegas over allegations material from both the Review-Journal and the Denver Post was posted on the veteranstoday.com website.

After a series of errors, the suit was dismissed against Leon because he was not served in time and it was dropped against Nichols after she was served with the wrong version of the suit.

Nichols’ case also attracted attention because she’s a retired military nurse with health problems and she complained some Righthaven lawsuits were showing disrespect to veterans while the case against her was further endangering her health.

Nichols has now filed papers demanding Righthaven pay her $1,500 in attorney’s fees. In her request she cited the unsealing of the Stephens Media/Righthaven lawsuit contract, which critics say undermines Righthaven’s right to sue, though it’s unknown if that would apply in her case since the Denver Post is not part of Stephens Media.

She also cited a ruling in which U.S. District Judge Roger Hunt threw out Righthaven’s standard lawsuit demand that defendants forfeit their website domain names, which has been widely criticized as a tool to coerce defendants into settling.

Righthaven is balking at paying Nichols’ legal costs, saying it dismissed her case with prejudice, meaning it can’t sue her again over her alleged infringement. Righthaven also acknowledged her "extensive prior military service to the United States of America" and "her apparent medical condition."

An attorney for Leon, in the meantime, continues to insist Righthaven pay his firm’s fees.

The attorney, J. Malcolm DeVoy IV of Randazza Legal Group, suggested in his latest filing that given his pro bono, or free, representation for Leon, that the court award his firm fees for its work and that half of the award go to the Electronic Frontier Foundation and/or the Citizen Media Law Project at Harvard University.

"These organizations provide invaluable resources to defendants not only in these Righthaven cases, but many others like them, which rest at the legally complex intersection of the Internet, intellectual property and free speech," DeVoy wrote in his filing Saturday.

Righthaven hasn’t yet responded to this proposal, but in the past it said it was "shocked" by DeVoy’s fee and cost request of $3,815.

With DeVoy only representing Leon for hearing preparation and a 45-minute hearing, most of his fee request of 13.8 hours covers time trying unsuccessfully to negotiate the fee with Righthaven and then drafting a court motion for the fee.

"As an organization that has been characterized as a lawsuit mill that profits off of quick settlements, Righthaven’s opposition is unsurprising, as the payment of attorney’s fees throws a sizeable wrench into the workings of the Righthaven lawsuit machine. Nevertheless, Righthaven’s calculations about the firm’s willingness to seek fees were wrong, and now Righthaven must pay," DeVoy added in his motion.

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  1. "Righthaven hasn't yet responded to this proposal, but in the past it said it was "shocked" by DeVoy's fee and cost request of $3,815."

    That fee sounds very reasonable given that Righthaven is willing to settle for about $6,000 that we know of. That presupposes that RH thinks the cost of defending a suit would be more than that.

    And now, thanks to the amended agreement with Stephens Media, Righthaven has basically said that they are asking for up to $150k in statutory damages for a property that is valued at only $1/yr in license fee revenue.

    Righthaven has stepped into a tar pit of their own making.