The Court hereby orders Brett L. Gibbs, attorney of record for AF Holdings LLC and Ingenuity 13 LLC, to appear on March 11, 2013, at 1:30 p.m., to justify his violations of Federal Rule of Civil Procedure 11 and Local Rule 83-3 discussed herein.

That’s how Judge Otis Wright starts his “Order to show cause re sanctions for rule 11 and local rule 83-3 violations.” Not that it was totally unexpected, but the language of this order is something that will definitely make Brett Gibbs (and other Prenda’s racketeers) take an urgent trip home to change their underwear.

Judge Wright starts his order with enumerating various Gibbs’s abuses, then proceeds with an angry tirade, condemning trolls’ “business model,” specifically the weakness of the “evidence” that is used to harass their victims with the purpose of extorting settlements from their targets (including many innocents):

To allege copyright infringement based on an IP snapshot is akin to alleging theft based on a single surveillance camera shot: a photo of a child reaching for candy from a display does not automatically mean he stole it. No Court would allow a lawsuit to be filed based on that amount of evidence. What is more, downloading data via the Bittorrent protocol is not like stealing candy. Stealing a piece of a chocolate bar, however small, is still theft; but copying an encrypted, unusable piece of a video file via the Bittorrent protocol may not be copyright infringement. In the former case, some chocolate was taken; in the latter case, an encrypted, unusable chunk of zeroes and ones. And as part of its prima facie copyright claim, Plaintiff must show that Defendants copied the copyrighted work. Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991). If a download was not completed, Plaintiff’s lawsuit may be deemed frivolous. […] The Court has previously expressed concern that in pornographic copyright infringement lawsuits like these, the economics of the situation makes it highly likely for the accused to immediately pay a settlement demand. Even for the innocent, a four-digit settlement makes economic sense over fighting the lawsuit in court—not to mention the benefits of preventing public disclosure (by being named in a lawsuit) of allegedly downloading pornographic videos.

The judge demands that Gibbs addresses two allegations during the appearance on March 11:

Failure to comply with the Court’s discovery order.

Fraud on the Court.

The latter allegation is related to the Alan Cooper saga that we have been diligently covering over the last 3 months. Definitely, Judge Wright has no slightest intention to let this issue go away, no matter how hard Gibbs tried him by multiple temper tantrums, attempts to remove the judge, and childish urge to simply run away from the tough questions:

If Mr. Gibbs or Mr. Pietz so desire, they each may file by February 19, 2013, a brief discussing this matter. The Court will also welcome the appearance of Alan Cooper—to either confirm or refute the fraud allegations.

Moreover, the decision not to sanction “plaintiffs” suggests that Wright believes that the alleged identity theft is not a mere conspiracy theory; he is seemingly convinced that Prenda made up AF Holdings and Ingenuity 13, and therefore Gibbs and his bosses have actual financial interest in the numerous lawsuits. Failure to disclose such interest is a fraud by itself:

The Court declines to sanction Plaintiffs AF Holdings LLC and Ingenuity 13 LLC at this time for two reasons: (1) Mr. Gibbs appears to be closely related to or have a fiduciary interest in Plaintiffs; and; (2) it is likely Plaintiffs are devoid of assets.

But the most damning language that I mentioned above is in the last paragraph: when a judge says “imprisonment” and “bench warrant for contempt” in an order to show cause, it is hard to underestimate the seriousness of the situation Gibbs dug himself in (emphasis is mine):

Based on the evidence presented at the March 11, 2013 hearing, the Court will consider whether sanctions are appropriate, and if so, determine the proper punishment. This may include a monetary fine, incarceration, or other sanctions sufficient to deter future misconduct. Failure by Mr. Gibbs to appear will result in the automatic imposition of sanctions along with the immediate issuance of a bench warrant for contempt.

Wow. Like the previous powerful ruling by the same judge, this order will definitely send tsunami waves across the US federal districts.

Related

A great analysis of this order by Rob Cashman: New Law in California District Courts as to what constitutes “Copyright Infringement.”

Followups

Coverage