Defense attorney: events in LW Systems case 'struck me as unusual'

Trying to predict what Prenda Law is going to do next “could drive someone nuts” and “is not a productive use of my time,” one defense attorney said this week.

California attorney Morgan Pietz represents dozens of John Does in computer hacking suits across the nation, including the recently-dismissed St. Clair County case of LW Systems v. Christopher Hubbard.

The LW Systems case is one of several similar suits in which Paul Duffy and other attorneys at Prenda Law in Chicago represent plaintiffs who accuse named defendants, as well as co-conspirators referred to as John Does, of hacking into computer systems that host and deliver content to adult Web site operators.

“What occurred in this case struck me as unusual,” Pietz said Wednesday.

Last week, Circuit Judge Andrew Gleeson dismissed the LW Systems suit with prejudice. A stipulation of the dismissal shows that the parties agreed “to pay their own court costs and legal fees, pursuant to the parties’ amicable resolution of the case.”

Pietz said one of the things that struck him as odd in the LW Systems case was that the plaintiff filed an amended complaint just days before it dismissed the matter.

“I’m not sure what the real story is. Probably only the plaintiffs could tell us,” he said. “I don’t speculate on why they do what they do, but I will say the claims in the original and the amended complaint are ridiculous.”

Chicago attorney Adam Urbanczyk, who represents Hubbard, said last week that the dismissal was “a welcomed development,” but like Pietz, couldn’t say for sure why exactly LW Systems decided to drop the suit.

He speculated that it’s possible the plaintiff dismissed the matter after some of the subpoenas it served on several Internet Service Providers (ISPs) were deemed invalid. The subpoenas sought personal information associated with certain Internet Protocol (IP) addresses.

“I think in the face of that, they weren’t able to obtain the information they needed to proceed against” Hubbard, Urbanczyk said last week, noting that the plaintiff also may have chosen to dismiss the suit in an effort to avoid providing outstanding discovery.

Some of the ISPs asked the court to investigate possible collusion between the plaintiff and defendant when they sought to quash the subpoenas. It does not appear that anything ever came out of that request.

Shortly after the suit was filed in January, Chief Judge John Baricevic signed an agreed discovery order that let LW Systems subpoena personal information associated with certain IP addresses from 325 ISPs.

Several of the ISPs filed motions to quash the subpoenas, saying the lawsuit was brought in an attempt to extract settlements from the owners of IP addresses through the threat of litigation and public humiliation.

Gleeson in June granted the joint third party motion to quash the subpoenas, which he deemed invalid as they were issued out of Cook County and not St. Clair County, and gave LW Systems 14 days to amend its complaint.

Pietz said Prenda Law “and its related entities” had hundreds of suits pending across the nation, but started dismissing some of the ones they brought in federal courts earlier this year.

The dismissal of its federal suits, Pietz said, may have occurred after Prenda Law “starting seeing sanction handwriting on the wall.”

In May, U.S. District Judge Otis Wright II ordered Prenda Law attorneys to pay about $81,300 in sanctions to defense attorneys in a suit in California that made claims similar to the ones in the LW Systems case. That figure eventually jumped to about $237,000.

Wright determined that Duffy, as well as John Steele and Paul Hansmeier of Steele Hansmeier in Chicago and Brett Gibbs of San Francisco, engaged in “brazen misconduct and relentless fraud” and created business entities for the sole purpose of bringing these suits.

Pietz, who represents some of the John Does in the California case, said “after a bit of kicking and screaming,” Prenda Law ultimately paid up. He said this case is under appeal and that he “will be focusing on the appeal here very shortly.”

The sanctions in that case and others, as well as the possibility that the firm’s litigation tactics have earned them a bad reputation in the legal community, may have spurred Prenda Law to file their clients’ suits to state courts, as opposed to federal courts, Pietz said.

“What plaintiffs have done in a very cunning fashion is to try to dress up copyright infringement claims in clothes to try to make use of the state courts,” he said.

While it appears the plaintiffs are using this strategy to “engineer a way to stay out of federal court,” Pietz said the problem is that federal court is the exclusive jurisdiction for copyright infringement claims.

Pietz said Prenda Law managed to get some of its federal suits dismissed, but “are now stuck in a few” either because their dismissal request was denied or because the defendants have already filed answers or motions.

“They tried to dismiss all the federal cases they could and then switched to filing state court cases,” he said. “Now, those cases hit some roadblocks. Prenda’s next move remains to be seen.”