Federal judge stays discovery in Prenda Law's libel suit; Targets raise SLAPP Act as one reason for dismissal

 

A federal judge has granted a pair of defendants’ motion to stay discovery in a libel lawsuit that stems from the Internet-based conduct of anonymous individuals.

In an order entered late last week, U.S. Magistrate Judge Stephen Williams granted the April 24 stay request filed by Minnesota attorney Paul Godfread and his client, Alan Cooper, pending the resolution of their motions to dismiss.

One of their motions alleges that their home state’s Anti-SLAPP Act requires dismissal and they also filed a motion to dismiss or transfer based on improper venue.

Anti-SLAPP acts, which have been adopted in some form by several states, aim to prevent Strategic Lawsuits Against Public Participation or those intended to censor or intimidate members of the public from filing suits.

In February, the Chicago firm of Prenda Law, Inc. filed a complaint in St. Clair County Circuit Court against Godfread, Cooper and “John Doe” defendants. It was amended later that month to include the Alpha Law Firm in Minnesota as a plaintiff.

Godfread and Cooper removed the case to federal court in March. The two firms earlier this month filed a motion to remand the suit back to state court, saying that the addition of the Minnesota law firm as a plaintiff left Illinois’ federal court without jurisdiction over the matter.

The complaint asserts that the defendants “belong to a community of Internet ‘commentators’ fearful of being identified and have falsely accused Plaintiff of, among other things, criminal offenses; want of integrity in the discharge of employment; lack of ability in its profession; and the commission of fornication and adultery.”

Using anonymous pseudonyms, the firms claim that the defendants have libeled them with the intention of harming their business, client relationships and public reputation. They contend their representation of clients in copyright infringement and computer hacking cases “appears to have prompted … the false and libelous statements.”

In their motion to stay discovery, Godfread and Cooper claim that Prenda Law’s attorneys Paul Duffy, John Steele and Paul Hansmeier “have developed a lucrative practice monetizing allegations of copyright infringement of pornographic films.”

Cooper asserts that from 2006 to 2012, he served as a caretaker for Steele’s Minnesota property and that Steele “on several occasions, discussed with Cooper his plans and early successes in carrying out a massive, nationwide copyright enforcement litigation strategy.”

“It was during one of these conversations,” the suit states, “Steele told Cooper that if he was ever contacted regarding ‘any of my law[s] or anything that has to do with me, don’t answer and call me.’”

Sometime after that conversation, Cooper claims he “became aware that his name was being used as an officer of AF Holdings and Ingenuity 13—clients of Prenda Law.”

In an attempt to clear his name, Cooper hired Godfread in November 2012 to find out if the Alan Cooper listed as the CEO of the two companies was him or someone else who just happened to have the same name.

“What followed was two months of evasive and uncooperative behavior on the Plaintiffs’ part,” the motion to stay asserts. “In the end, Cooper was left with no choice to file the suit to resolve the issue.”

He filed a lawsuit in January in Minnesota against Steele, Prenda Law, AF Holdings and Ingenuity 13, which the motion alleges spurred Prenda Law to file the instant suit in Illinois.

Godfread and Cooper on April 6 filed a motion to dismiss under Minnesota’s Anti-SLAPP Act, which they assert provides them immunity for liability.

“Defendants believe that they are likely to prevail on such motions because Prenda’s claims against defendants fail as a matter of law,” the motion states.

It further argues that, “Prenda’s claims against Defendants, including the filing of a duplicative lawsuit against Defendants on behalf of … Duffy filed in Cook County, Illinois, but removed to the Northern District of Illinois by Defendants, constitute violations of the Minnesota Anti-SLAPP Act.”

The defendants argue in their motion that staying discovery in the case would “avoid discovery disputes and burdens that will likely prove unnecessary upon the determination of” the defendants motions to dismiss or transfer.

As a result of the court’s order granting the stay request, Williams entered a separate order continuing a recent scheduling and discovery conference until May 15. He also ordered the parties to submit a joint report no later than May 8.

Chicago attorney Erin Kathryn Russell and Massachusetts attorney Jason Sweet represent Godfread and Cooper. Duffy represents represents his firm,  Prenda Law.

In a separate matter also dealing with anonymous Internet conduct, Duffy’s firm is representing LW Systems LLC in a St. Clair County lawsuit against Christopher Hubbard.

LW Systems claims Hubbard installed malware on its computers, allowing him unauthorized access to content. It also claims that Hubbard “belongs to a community of individuals who have agreed to assist one another in gaining unauthorized access to computers and then share with one another the information stored on those systems.”

Less than two weeks after the LW Systems case was filed, Chief Judge John Baricevic signed an agreed order which has allowed LW Systems to subpoena the names, addresses, phone numbers, email addresses and Media Access Control addresses from more than 300 ISPs of their subscribers who have Internet Protocol (IP) addresses listed in the subpoena.

A hearing over motions to quash or vacate the subpoenas in that case has been set for June.