As 2011 concluded, problems with unpaid bills continued to pile up for copyright lawsuit filer Righthaven LLC of Las Vegas.
Records Saturday showed Righthaven has been sued by its own process server and also faces a request by defense attorneys that it be found in contempt of court.
Righthaven is the copyright enforcement partner of the Las Vegas Review-Journal and formerly of the Denver Post.
Righthaven is half owned by the family of billionaire Arkansas investment banker Warren Stephens, who owns the Las Vegas Review-Journal through his Stephens Media LLC company.
While Stephens continues to invest in the newspaper industry, his family’s half-owned Righthaven copyright protection company has been floundering.
After filing 275 no-warning lawsuits since March 2010 alleging online copyright infringements of material from the Review-Journal and the Post, which provided copyrights to Righthaven for lawsuit purposes, Righthaven has suffered a series of defeats in court.
Judges found Righthaven lacked standing to sue as the newspapers maintained control of the material at issue, or the defendants were protected by fair use, or both.
These losses have prompted judges to order Righthaven to pay $216,355 in prevailing defendants’ legal fees.
Righthaven can’t – or won’t – pay the fees. It’s appealing the legal setbacks as well as the fee awards.
Righthaven’s failure to pay the fees of prevailing defendant Wayne Hoehn led to Hoehn gaining a court order requiring Righthaven to turn its copyrights, trademark and website domain name over to a receiver so they could be auctioned.
Righthaven didn’t turn these assets over to the receiver, but the receiver seized the righthaven.com domain name anyway and is auctioning it.
U.S. Magistrate Judge Robert Johnston in Las Vegas, in the meantime, on Dec. 12 ordered Righthaven CEO Steven Gibson and his wife Raisha "Drizzle" Gibson to appear in court on Jan. 5 for a judgment debtor examination.
Johnston also ordered that by Thursday – a week before the examination – Righthaven turn over to Hoehn’s attorneys information about Righthaven assets that may be used to satisfy Hoehn’s judgment and documentation about Righthaven’s "purchases, transfers of funds or other dissipation of assets" in recent months.
"Should Righthaven fail or refuse to cause Steven Gibson and/or Raisha Gibson to appear at the examination herein scheduled, or to produce documents referred to above, this court may adjudicate Righthaven guilty of civil contempt of its orders,” Johnston’s order said.
On Friday, Hoehn’s attorneys filed a motion in court asking that Righthaven be held in contempt for failing to produce the required financial information by Thursday’s deadline.
"Righthaven has refused to produce these documents, to discuss their production or to even acknowledge that the court ordered the plaintiff to produce these documents," said the filing by attorneys at Randazza Legal Group of Las Vegas. "All evidence shows that Righthaven has disregarded the court’s order."
"It is impossible to reasonably believe that Righthaven will take any action – and especially one adverse to its interests – unless forced to do so. It is time for Righthaven to be forced," the Randazza filing said.
A message for comment was placed with Righthaven.
Evidence continued to mount, in the meantime, that even if Righthaven agreed to pay defendants’ legal fees it would be unable to do so because of its own financial problems and the apparent unwillingness of its investors to pump more money into the company.
As previously reported, Righthaven’s lone outside attorney in South Carolina has asked to withdraw from a Righthaven case there because of lack of payment from Righthaven.
Also as previously reported, Gibson’s company that owns the other half of Righthaven – Net Sortie Systems LLC – remains in “default” status with the Nevada Secretary of State after apparently failing to file its annual renewal paperwork and fees. Its state business license expired Nov. 30.
Also, this weekend it came to light that Righthaven had been sued in September in Las Vegas by Legal Wings Inc., which has provided service of process and potentially other services for Righthaven.
The suit, filed in Las Vegas Township Justice Court, demands $5,670 from Righthaven – apparently for unpaid bills, though a copy of the complaint wasn’t immediately available.
Records indicate Righthaven hasn’t yet answered that lawsuit.
This is at least the second lawsuit to be filed against Righthaven outside of the federal court system, where Righthaven filed its copyright lawsuits.
An earlier lawsuit pending against Gibson, Stephens Media, the Denver Post, Righthaven and others in Charleston County, S.C., court – as well as a threatened class-action suit against Righthaven – seeks to pierce the corporate veil "and impose personal liability" on Righthaven’s owners.
Piercing the corporate veil may be crucial for creditors struggling to get paid by Righthaven, as it’s often noted that Righthaven is a limited liability company owned by two other limited liability companies: one owned by Gibson and the other by the Stephens family.
The South Carolina lawsuit, which was amended Dec. 19 with added and deleted parties, says it “relates to a nationwide lawsuit syndication scam run by Righthaven, a Las Vegas company whose sole business is filing lawsuits despite the fact that it is not a law firm, has suffered no damages from the allegations in any of its complaints and does not have the right to file the actions it files.”
That suit was filed by attorneys for Dana Eiser and her Tea Party group in South Carolina. Eiser was sued by Righthaven in December 2010 and her case is still pending.
Righthaven and Stephens Media, however, have said the Righthaven lawsuits were needed to deter rampant online infringement of newspaper content.
Eiser has denied she posted a Denver Post column on the website of her Tea Party group Lowcountry 9/12, which prompted the Righthaven lawsuit.
And, like other defendants, Eiser is arguing Righthaven lacks standing to sue her and that the post was protected by the fair use doctrine of copyright law. The column at issue was by Denver Post columnist Mike Rosen and was called “A Letter to the Tea Partyers.”
Given the nonprofit nature of the Tea Party group's website, Righthaven-created case law suggests the South Carolina's group's use of the Post column would be protected by fair use.