In my previous post, speculating on why Lipscomb/X-Art have been fighting nail and tooth to dodge the discovery, I mentioned Lipscomb’s admission that Bittorent “forensic expert” IPP International is paid “pursuant to oral contingency fee agreement.” I mocked the “oral” part, which does not pass the smell test: give me a single example when an attorney “orally” agrees with a critical entity in a case involving millions of dollars. I did not corroborate the “contingency” piece. Today a defense attorney Jonathan Phillips filed a motion to bar testimony of IPP and for an order requiring Malibu to show cause why it and its counsel should not be sanctioned. And “contingency” is at the heart of this motion:

Malibu Media, LLC (hereinafter “Malibu”) makes use of a contingent-fee witness who unlawfully engages in private detective operations in the State of Illinois. The blatant ethical violations by Malibu’s counsel in allowing such behavior are compounded by the likely violation of the Federal Antigratuity Statute by counsel or Malibu. For these reason, IPP should not be allowed to offer any testimony in this case. Further, Malibu should be ordered to show cause why Malibu and Attorney Schulz should not be sanctioned for the abusive litigation tactics that resulted in the vexatious multiplication of these proceedings.

Phillips sites a vast case law on the issue, yet even without diving into the depths of Legalese, any layman can understand the simple and intuitive basis of the issue: incentivizing a witness by offering a percentage cut of the shakedown proceeds is unethical to say the least:

To begin with, it is a violation of federal law, punishable by imprisonment, to offer to pay for testimony. 18 U.S.C. §201(c)(2). If done “corruptly,” there is also a violation of §201(b)(3) of the same statute. Such testimony is patently against public policy. Hamilton v. General Motors Corp., 490 F.2d at 228-229. To allow such testimony into this tribunal would be manifestly unjust. At this time, it is not known whether Attorney Schulz, Malibu, or some other unidentified third-party is paying for the testimony, but it remains unethical and illegal. For this reason, the testimony should be barred.

American Bar Association’s Rules of Professional Conduct also unambiguously prohibit this type of behavior:

A lawyer shall not […] falsify evidence, counsel or assist a witness to testify falsely, or offer an inducement to a witness that is prohibited by law;

In addition, Phillips argues that IPP evidence is also inadmissible because the very status (or lack thereof) of IPP (as a licensed detective agency) runs afoul of the Illinois 225 ILCS 447/5-10 statute:

(a) It is unlawful for a person to act as or provide the functions of a private detective, private security contractor, private alarm contractor, fingerprint vendor, or locksmith or to advertise or to assume to act as any one of these, or to use these or any other title implying that the person is engaged in any of these activities unless licensed as such by the Department […].

Finally, the defendant alleges that “The entirety of this litigation is abusive,” and “regardless of merit, all activities in this case are sanctionable as harassment.”

Undeniably, these alleged blatant violations of ethics, law, and common sense hygiene warrant sanctions. And sanctions are requested:

[…]JOHN DOE subscriber assigned to IP Address 24.14.81.195 respectfully requests that this Honorable Court: A. Issue an Order barring any and all testimony and evidence from IPP International U.G., aka IPP Limited, or any of its employees, agents, contractors, or owners, in these proceedings; B. Issue an Order requiring Malibu Media, LLC to show cause why it, and its counsel, Attorney Schulz, should not be sanctioned for their respective activities and behavior; C. If such sanctions are awarded, issue an Order requiring Malibu Media, LLC or Attorney Schulz to pay the costs, including attorney’s fees and expenses, for all unreasonably and vexatiously multiplied proceedings, to wit, the entirety of the case after early discovery; and D. Any other relief this Court deems equitable and just at this time.

Exhibits:

Exhibit A: Plaintiff’s Responses to Defendant’s First Set of Interrogatories.

Exhibit B: Plaintiff’s Fed. R. Civ. P. 26(a) Disclosures.

Defense attorneys mostly abandoned motions to quash subpoenas because those motions were rarely granted. Maybe this new approach will breath a new life into the MTQ practice: in my opinion, ex-parte discovery based on information obtained unethically (or even illegally) should be quashed easily.

Update

01/15/2014, by Raul

Phillips has made a very similar move in INSD (Malibu Media, LLC v. Tashiro, 1:13-cv-00205) with a motion in limine to bar the testimony of IPP and a motion to impose sanctions on Lipscomb”s local troll, Paul Nicolletti, noting that: