OAKLAND, Calif. — GLBT Ltd. so far has racked up $23,000 in fines by not complying with a federal judge's order to hand over to a receiver a trio of gay tube sites involved in a copyright infringement case.
But there could be a simple reason why its operators won't hand over the sites and accept the court-ordered, $1,000-a-day fines — the revenue gained operating them is just too good.
GLBT Ltd. operators Steven and David Compton have been raking in at least $195,000 a month operating JerkYourTube, GayForIt and ItsAllGay, according to recently divulged information in a court brief.
The revenue figure was revealed in the Comptons' responses to interrogatories.
The Comptons, both U.K. residents, and their company GLBT Ltd. are accused of pirating and posting scores of videos from Channel One Releasing, Corbin Fisher and Titan Media, according to the long-running $29 million suit.
In the past three months, the case has gained traction while also taking a number of odd twists and turns.
In August, the three gay studios received an injunction to stop GLBT Ltd. from dispersing its assets. GLBT Ltd. also was ordered to hand over the domains to a receivership pending resolution of the suit.
Later, the gay adult studios filed a motion for sanctions against GLBT Ltd., claiming the defendants had destroyed evidence relevant to the case.
In the past two months, however, the case has taken a strange course: GLBT Ltd. fired its legal defense — Oceanside, Calif., attorney Jonathan Capp — and has not responded to orders from the court, including one to turn over the tube sites to a receiver. At the same time, the U.K.-based company also introduced its new .eu sites.
Attorneys for the gay adult studio plaintiffs now say that the "defendants recognized it was time to jump from the sinking ship" by moving their assets — JerkYourTube, GayForIt and ItsAllGay — out of the U.S. The three tube site properties now sport .eu domain extensions, with the three .com sites redirecting to them.
As a result, plaintiffs attorneys are calling GLBT Ltd.'s defense a "charade," seeking sanctions against attorney Capp, as well as having a judge rule that he is jointly liable for an earlier award for plaintiffs attorneys fees.
"Defendants understood that even if they could hide other assets from plaintiffs, they could lose control over the registrations for the domain names from which they were operating the infringing websites," the studios' counsel said. "Thus, it made sense to hire a lawyer to stay just engaged enough to prevent default for as long as they could.
"Even if Capp had not been aware of defendants long-term strategy of delaying entry of default in order to continue collecting more than $195,000 a month in revenue, he certainly understood what was happening when they depleted and then abandoned their U.S. assets in the form of .com domain registrations and then fired him without engaging replacement counsel."
But last week, U.S. District Judge Maxine Chesney denied in part sanctions against Capp, which would have held him jointly liable for the attorneys fees in the ongoing case. Chesney, however, ordered that the request be referred to a magistrate judge for further consideration.
Corbin Fisher counsel Marc Randazza declined comment to XBIZ on the latest wrinkles in the case, but he has previously said that the Comptons think they are "beyond the reach of the courts" in the U.S.
Capp, who still acts as the Comptons attorney in the eyes of the court, did not respond for comment.
