One of the Righthaven LLC copyright lawsuits turned out to be a money loser for the Las Vegas company after a series of errors, culminating Tuesday in an award of legal fees for one of the defendants.
U.S. District Judge Gloria Navarro on Tuesday ordered Righthaven to pay attorneys for former defendant Michael Leon $3,815. Leon was named in one of the 274 lawsuits Righthaven has filed since March 2010 over alleged infringements of material from the Las Vegas Review-Journal and the Denver Post.
Leon, a veterans advocate in Fitchburg, Wisc., and an organization called MedBillz in San Diego were sued in September over allegations a Las Vegas Review-Journal story was posted on the veteranstoday.com website.
Before he was served, Righthaven filed an amended complaint in November also naming Denver-area retired military nurse Denise Nichols as a defendant. She was accused of posting a Denver Post column on the website.
One problem with this amended complaint is that it was titled "United States District Court – Southern District of California,’’ even though it was filed in Nevada. The amended suit went on to say, "The United States District Court for the Southern District of California is an appropriate venue’’ for the suit.
Problems for Righthaven continued in the case when Nichols was served with the first version of the suit not naming her as a defendant.
Amidst confusion over who was served with what, Navarro eventually dismissed the suit against Leon because he was not served in time, and Righthaven dropped the suit against Nichols after settlement talks with her failed.
Navarro noted in her fee ruling Tuesday that on April 20, when she dismissed the suit against Leon, the parties stipulated the dismissal would be without prejudice but with an award of attorney’s fees.
Since the dismissal was without prejudice, Righthaven can sue Leon again.
But since April 20, two other judges have ruled Righthaven lacks standing to sue over Las Vegas Review-Journal material under Righthaven’s lawsuit contract with R-J owner Stephens Media LLC. That would appear to make another suit against Leon unlikely unless Righthaven can somehow salvage its standing to sue.
Since attorney J. Malcolm DeVoy IV of Randazza Legal Group represented Leon for just the 45-minute April 20 hearing, the bulk of his $3,815 fee award for 13.8 hours of work was for time spent unsuccessfully negotiating the fee issue with Righthaven and then drafting and filing the motion for fees.
"Plaintiff (Righthaven) opposes any attorney’s fees being awarded to Mr. DeVoy or Randazza Legal Group because it was plaintiff counsel’s understanding that any award of attorney’s fees would be directed to a charitable organization since Mr. DeVoy was representing defendant Leon on a pro bono (free) basis,’’ Navarro wrote in her order.
"The court finds that it would be appropriate to award attorney’s fees to the law firm in light of the pro bono representation of defendant Leon,’’ Navarro wrote, citing case law that denying attorney’s fees would discourage pro bono representation.
Navarro has yet to rule on Nichols’ motion that she be reimbursed for her $1,500-$1,600 in legal fees. Nichols says the no-warning Righthaven lawsuit has worsened her health problems, but Righthaven calls her fee request a demand for "blood money’’ as it dropped the suit against her with prejudice, meaning she can’t be sued again.
Righthaven observer Eric Goldman at the Santa Clara University School of Law in California noted that because Righthaven had previously agreed to pay some fees in the Leon case, potentially to a charity, Navarro's ruling "doesn't represent a judicial condemnation of Righthaven's practices."
"Nevertheless, Righthaven's failure to properly serve Leon is yet another costly but avoidable litigation error made by Righthaven. I don't know if it's their staff turnover, general incompetence or something else, but Righthaven has made a surprisingly high number of unforced errors for a company whose sole business is litigation," said Goldman, associate professor and director of the university's High Tech Law Institute.
"There are several Righthaven defendants' motions for fee shifts under copyright's fee-shifting statutes. There are also some pending sanction motions against Righthaven that could further require Righthaven to pay the defendants. This case's relatively small award of attorneys' fees won't break Righthaven's bank, but I think it symbolically represents that Righthaven's profitability has crested. Going forward, I predict Righthaven's cash meter will start running in reverse with some frequency as judges make Righthaven write checks to its defendants. How many of those checks will Righthaven write until it acknowledges that it has no chance of profitability?" Goldman asked.
The fee ruling was one of four legal headaches that emerged Tuesday that Righthaven will have to deal with.
On top of Randazza Legal Group’s application for $34,000 in fees for successfully representing Righthaven defendant Wayne Hoehn, attorneys for South Carolina Righthaven defendant Dana Eiser filed a new motion for dismissal in federal court there asking that they, too, be awarded attorney’s fees should they prevail.
Also Tuesday, one of Eiser’s attorneys, Todd Kincannon, and his group, Citizens Against Litigation Abuse Inc., were allowed to participate as a friend of the court in a second pivotal Righthaven case in Las Vegas.
U.S. District Judge Roger Hunt allowed Kincannon’s group to file a brief in the Democratic Underground case – a key lawsuit in which Hunt first found Righthaven lacks standing to sue and then threatened Righthaven with sanctions. A hearing on potential sanctions in that case is now set for July 14.
U.S. District Judge James Mahan earlier ruled Kincannon’s organization could participate in the high-profile Pahrump Life case.
In both cases, Kincannon and Citizens Against Litigation Abuse will be arguing that Righthaven – by seeking lawsuit assignments and sharing lawsuit revenue with its media partners -- has been practicing law without a license. Righthaven has not yet responded to these assertions.