Apr 7, 2014 5:30 PM PDT    Text size: 

CHICAGO — The 7th U.S. Circuit Court of Appeals today heard the appeal of an order that levied $261,000 in sanctions against the attorneys who filed a copyright infringement case on behalf of Lightspeed Media Corp.

A majority of the three-judge panel of the 7th Circuit — Judges Diane Wood, Michael S. Kanne and Diane Sykes — appeared skeptical of Prenda Law's argument in its appeal.  

Prenda Law, prolific in exacting payments from consumer porn piracy defendants in the past four years, appealed a lower court judge's order that ruled the firm's attorneys, John Steele, Paul Hansmeier and Paul Duffy, filed a meritless case against defendant Anthony Smith.

The case against Smith alleged that he was the ringleader of a hacking gang that was said to have obtained stolen passwords to break into about 40 Lightspeed Media porn sites.

At the behest of Lightspeed Media, Prenda Law made additional claims against corporate executives at AT&T and Comcast Cable Communications that they aided, abetted and conspired with the hacker to steal its content because they refused to comply with subpoenas and turn over subscriber data based on IP addresses.

The firm later added the telecommunications executives as defendants in the suit, seeking $200,000 from all of the defendants, as well as punitive awards.

But after Duffy filed a motion for voluntary dismissal, telling the court that Lightspeed Media intended to drop the suit.

The motion spurred defendants into action with requests for reimbursement of attorneys fees because the suit was based on "frivolous claims," which the lower court later affirmed. Lightspeed Media's attorneys were ordered to pay Smith $72,000, AT&T $120,000 and Comcast $69,000.

At Monday's hearing at the 7th Circuit, attorney Daniel Voelker — representing Steele, Hansmeier and Duffy — was asked to describe the relationship between the three firms that have lodged claims against porn piracy defendents — Prenda Law, Alpha Law and Steele Hansmeier.

"I can't your honor. I don't know, I don't know what it is today; I don't know what it was a year ago," Voelker told the panel. "So I wouldn't want to even begin to tell you because I just don't know."

Sykes, one of the 7th Circuit panelists, responded: "That's shocking. There is a lot of shell game activity here."  

The 7th Circuit did not say when they would rule on the appeal. An audio recording of today's hearing is available here.