LOS ANGELES — Chicago attorney John Steele, who through his law firm has sued thousands for downloading porn through file-sharing networks and now sees himself at center of accusations over attorney misconduct, says he shouldn't be sanctioned by a federal judge in Los Angeles.
Steele told XBIZ on Wednesday that while he can't discuss details of his 5th Amendment invocation to the court two weeks ago, he and his law firm, Prenda Law, have done no wrong.
"Obviously I disagree with some of the bizarre claims of criminal conduct thrown around by people without any proof," Steele said. "I can say that I never even heard of the case in front of Judge [Otis] Wright until two months ago, and have never appeared in a California case in my life."
Prenda Law and numerous affiliated attorneys nationwide have filed thousands of porn file-sharing suits during the past few years, with some describing the enterprise as mass copyright trolling.
But the practice of scooping up thousands upon thousands of John Doe defendants for porn piracy litigation may be coming to an end as U.S. District Judge Otis Wright weighs his next step against Steele and Prenda Law.
Prenda Law isn't the only law firm to sue defendants fingered by Internet service provider's under threat of subpoena, but it may be the most notorious. Steele, according to a Los Angeles Times article published today, has bragged about the huge value of porn-piracy litigation and told Forbes that he has collected as much as $15 million settling such suits.
Today, a San Francisco law firm filed court papers on Steele's behalf, responding to Wright's order to show cause why sanctions should not be levied.
The plaintiffs, Wright said, bet that "because of embarrassment, many Does will send back a nuisance-value check to the plaintiff. The cost to the plaintiff: a single filing fee, a bit of discovery, and stamps. The rewards: potentially hundreds of thousands of dollars."
Prenda's method of operation, according to testimony, was typical of copyright trolls: Obtain IP addresses, send out letters accusing defendants of piracy while mentioning a $150,000 statutory penalties and then offering lower figures, sometimes in the low thousands, to make them go away.
Last week, the court invited Steele to testify in response to an order to show cause over a case involving plaintiff Ingenuity 13 LLC.
But when Steele showed up, he relied on his Fifth Amendment privilege against compelled testimony, and later said that the court indicated it would draw reasonable inferences against him.
"However, the reasonable inferences the court may draw against Steele are limited, based on the lack of evidence against Steele before this court," Steele attorneys said in a response to the court. "Moreover, because of the criminal nature of these proceedings, where the court has raised and clearly made up its mind against Steele on questions of fraud and has threatened incarceration, Steele’s invocation of the 5th Amendment may not be used to formulate presumptions against him."
Morgan Pietz, a Manhattan Beach, Calif., attorney who represents several defendants in the Prenda lawsuits told the Times that "it's unprecedented for a plaintiff's lawyer to invoke the 5th when asked to explain the conduct of his litigation."
According to Pietz, Prenda Law's strategy began to unravel in Wright's court after he submitted evidence that two production companies the firm supposedly represented as clients, Ingenuity 13 and AF Holdings, were shell companies Prenda lawyers set up on the West Indies island of Nevis.
Pietz noted to the court that the Prenda attorneys therefore concealed their direct interest in lawsuits they ostensibly brought on clients' behalf, which violates court rules.
Wright hasn't said what he'll do about Steele or Prenda Law, but his options could include asking federal prosecutors to probe the firm, referring lawyers to various state bars for discipline, even disbarment, and imposing monetary sanctions.
At a hearing last week, Wright delivered a warning to Steele on what might be next: "This court's focus has now shifted dramatically from the area of protecting intellectual property rights to attorney misconduct. If you say answering these kinds of questions would incriminate him, I'm inclined to take you at your word."
Steele on Wednesday admitted that the court proceedings are "unusual" and that he's hoping Wright, or a higher court, will see it his way.
" I am very confident that once the facts are reviewed by Judge Wright, or the 9th U.S. Circuit Court of Appeals if necessary, this latest effort funded by the Electronic Frontier Foundation to stop anti-piracy litigation will fail," he told XBIZ.
