Attorneys: Righthaven’s latest action amounts to fraud

Attorneys fighting Las Vegas copyright lawsuit filer Righthaven LLC say its latest effort to revive its litigation campaign should be rejected as a scheme to “revitalize Righthaven’s fraud on the court.”

Since March 2010, Righthaven has filed 275 lawsuits over alleged online infringements of Las Vegas Review-Journal and Denver Post material.

Its lawsuit campaign slowed this summer after three judges dismissed suits over Righthaven’s lack of standing — and since last year the firm has been hit with three fair use losses.

Righthaven’s problems with standing to sue arose after its lawsuit contract with the R-J’s owner, Stephens Media LLC, was unsealed this spring.

Defense attorneys said the contract plainly didn’t give Righthaven standing to sue and charged that Righthaven had perpetrated a fraud on the court by falsely claiming it owned the copyrights it was suing over.

That’s because Stephens Media maintained control of the copyrights at issue even after assigning them to Righthaven for lawsuit purposes. Copyright case law prohibits assigning the bare right to sue, judges wrote in their dismissal orders.

The lawsuit dismissals for lack of standing came even after Righthaven and Stephens Media amended the lawsuit contract to beef up Righthaven’s standing to sue.

In Righthaven’s latest defeat on the standing issue last week, U.S. District Judge Kent Dawson in Las Vegas found Righthaven couldn’t this spring and summer amend the facts in a 2010 lawsuit against Dean Mostofi to manufacture standing.

The day Dawson dismissed that suit, July 13, Righthaven simply filed a new suit over the same alleged infringement against Mostofi. Only this time, Righthaven says its standing to sue is bullet-proof as it has obtained complete control of the copyright at issue with the latest amendments to the Stephens Media lawsuit contract, called the Strategic Alliance Agreement (SAA).

That contention is false, attorneys in another case involving the Pahrump Life blog charged in a new court filing this week.

“The restated SAA seeks to perpetuate, in fact, to revitalize Righthaven’s fraud by denying its victims the dismissals of Righthaven’s claims that they deserve,” said the filing by attorneys including Laurence Pulgram.

Pulgram represents Democratic Underground, a Righthaven defendant that is a friend of the court in the Pahrump Life case.

His filing was co-signed by two more friends of the court in Pahrump Life: Jason Schultz, a copyright expert at the University of California-Berkeley’s Boalt Hall Law School who has appeared against Righthaven in other cases; and Citizens Against Litigation Abuse, a South Carolina group that’s been agitating against Righthaven.

In their filing, the friends of the court asked U.S. District Judge James Mahan to look at Righthaven’s history of using copyrights only for lawsuits.

“It would make a mockery of this court’s process to adopt the pretense that Righthaven now is suddenly in the business of owning and licensing exclusive rights in copyrights, rather than merely suing on them, when it has done, and is empowered to do, nothing else,” the filing said.

The friends of the court also charged Righthaven has been involved in champerty, which they called “an illegal practice under Nevada law.”

“Righthaven’s most recent ‘Restated SAA’ could not change the inherently unlawful nature of its relationship with Stephens Media, in either of two respects. First, this court has already held that it was Righthaven’s intent not to receive any rights other than the right to share in the proceeds of another’s legal claims,” the filing said. “Second, as persuasively argued by amicus (friend of the court) Citizens against Litigation Abuse, Righthaven’s scheme constitutes the unlawful, unauthorized practice of law.

“Enough is enough. This case should be dismissed now without leave to amend, and with direction that no further lawsuits shall be filed by Righthaven based on its SAA with Stephens Media,” the filing said.

Mahan has previously been critical of Righthaven’s no-warning lawsuits, and he dismissed an earlier case against the Center for Intercultural Organizing in Portland, Ore., on fair use grounds.

In the Pahrump Life case — involving an R-J story about a private prison allegedly posted on the Pahrump Life website — Mahan has set a July 27 hearing on his order to show cause why the case should not be dismissed on the standing issue, as well as on Righthaven’s request for permission to amend its lawsuit to include the updated language from its latest amendments to the SAA.

“In order to avoid the needless additional expenditure of time and judicial resources that would result from a dismissal and re-filing of Righthaven’s lawsuit, the court should grant Righthaven leave to amend its complaint,” Righthaven said in its request.

The July 27 hearing will give Righthaven a chance to respond to the growing chorus of complaints that it has been practicing law without a license.

That charge gained some credibility on July 14, when U.S. District Judge Roger Hunt said: “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, but a law firm with a contingent fee agreement masquerading as a company that’s a party.”

That comment was made just before Hunt fined Righthaven $5,000 for covering up the fact that Stephens Media is an interested party in the litigation as it shares in Righthaven’s lawsuit revenue.

In other Righthaven developments this week:

• Citizens Against Litigation Abuse (CALA) asked for permission to appear as a friend of the court in Righthaven’s lone active case in Colorado, where U.S. District Judge John Kane is deciding whether Righthaven has standing to sue over Denver Post material under its lawsuit contract with that newspaper’s owner. Some 33 open Righthaven cases in Colorado are on hold until that decision is made.

If it’s allowed to participate in that case, CALA would submit a brief charging that Righthaven’s copyright assignments for lawsuits are actually impermissible contingency fee legal representation agreements. They’re impermissible, CALA says, because Righthaven is not licensed to practice law.

• Righthaven appealed to the 9th U.S. Circuit Court of Appeals judges’ orders dismissing two of its lawsuits.

In both cases, attorneys for the prevailing defendants have asked judges to order Righthaven to pay their legal fees.

The appeals are likely to increase the legal costs for everyone involved.

These lawsuits were against Thomas DiBiase ($119,457 in fees and costs requested) and Wayne Hoehn ($34,000 requested).

• U.S. District Judge Howard McKibben in Reno dismissed a Righthaven lawsuit against a “Ben Jones” in Flagstaff, Ariz., after Righthaven served the wrong Ben Jones with the lawsuit — and failed to show it had served the correct Ben Jones with the suit.

In its lawsuit filed in June 2010, Righthaven said Jones was the administrative and technical contact for the website, where it claimed an R-J story and a column were posted without authorization.


Previous Discussion:

Discussion 11 comments

Only trusted comments are displayed on this page. Untrusted comments have expired from this story.

  1. This is what happens when Las Vegas journalistic ethics are dictated by an Arkansas publishing empire's quest for profit.

  2. Makes you wonder why the Nevada Attorney General has not gotten involved in this. We need to start calling the Nevada AG to start an investigation on Righthaven.

  3. This is the supreme irony: "In order to avoid the needless additional expenditure of time and judicial resources that would result from a dismissal and re-filing of Righthaven's lawsuit, the court should grant Righthaven leave to amend its complaint," Righthaven said in its request.

    I do not believe for a moment that federal judges will be amused.

    One result of this latest attempt to amend is the implicit admission that the former complaints were defective and fraudulant.

    Who wrote the latest request? Mangano?

  4. Ken,

    Nevada Attorney General Catherine Cortez Masto

  5. "Makes you wonder why the Nevada Attorney General has not gotten involved in this. We need to start calling the Nevada AG to start an investigation on Righthaven." First, Copyright is a Federal matter; second, I think this is a State Bar issue, not an AG issue; and third, I don't believe Righthaven litigations are in any State court.

  6. Just when you think that Righthaven is in the deepest hole they can dig they run out and buy a bigger shovel. ;-)

    At some point the courts are going to need to put a stop to this nonsense. Not only is it costing the defendants but they are costing the taxpayers a great deal of money with cases that keep going nowhere.

  7. You know who this reflects poorly on the MOST...

    Sherman R. Frederick.

    It is appalling that a so-called "newspaperman" would stoop to the depths of skulduggery that Shermie has, ostensibly in the name of "protecting copyrights".
    It's HIS BABY. Or, "little friend".
    The fact that Righthaven, and it's band of weaselly wascals led by Steven Gibson, are involved in this ongoing, blatently disingenuous attempt to EXTORT MONEY from mostly reasonable, honest people, is ALL ON SHERMAN.
    The fact of the matter is that Sherman R. Frederick set the CON up, put it in motion, and there would BE NO RIGHTHAVEN without Sherman's "mastermind" plan to separate people from their money via this EXTORTION PLOT.
    Is this thinly veiled CON Shermie's plan to capitalize his fledgling little media startup, "Battleborn Media, LLC"???

    Interesting website:

  8. Murrayburns

    I would say contact the US Attorney General Eric Holder but I wouldn't hold my breath on him doing anything but it is a good Idea to contact the local Federal Attorney on this matter. Nevada Attorney General has jurisdiction on the State Level and there are potentially many state laws that have been broken.

  9. Considering that the suit being referred to was dismissed without prejudice, and the restated SAA may establish standing, Righthaven might have a valid case this time, especially if the alleged infringement is still present. If it has been taken down then it might be a different story, but still possible.

    On paper, it looks like Stephens Media did in fact turn over full ownership of the copyright without any ability to buy it back for a minimum of five years as well as no influence on what RH can do with it, including litigation targets or tactics.

    That's not to say there might not be some verbal agreements in play.

    At this point I think defense attorneys will need to attack from the champertry angle since the recovery-splitting clause is still present. And of course they can argue that RH is a law firm practicing without a license, which raises issues about the ownership of RH with the Nevada Bar for Gibson.

    As always, going to be interesting watching this case play out.

  10. boftx

    I still don't believe the new SAA will sway the judges, infact it may work against them because they have admitted the weaknesses in the earlier SAA. As for the new agreement creating standing I think Righthaven is going to have a tough time convincing a judge that Righthaven has full ownership since SM still earns the royalties and retains all rights to the works in practice no matter what the paper and ink might say. SM is still Righthaven's puppet masters.

  11. Boftx,

    ... May establish standing?

    "It would make a mockery of this court's process to adopt the pretense that Righthaven now is suddenly in the business of owning and licensing exclusive rights in copyrights, rather than merely suing on them, when it has done, and is empowered to do, nothing else," the filing said.

    So contra the filing, you now believe Righthaven is the exclusive holder of the copyright?

    Over here in the Madison, Wisconsin area, there are some bridges for sale, if you are interested.