Judge rules Righthaven lacks standing to sue, threatens sanctions over misrepresentations

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A federal judge in Las Vegas today issued a potentially devastating ruling against copyright enforcer Righthaven LLC, finding it doesn't have standing to sue over Las Vegas Review-Journal stories, that it has misled the court and threatening to impose sanctions against Righthaven.

Because he found Righthaven doesn't have standing to sue, Chief U.S. District Judge for Nevada Roger Hunt dismissed Righthaven's copyright infringement lawsuit against the Democratic Underground.

But he's allowing the Democratic Underground to continue its counterclaim against Stephens Media LLC, owner of the Review-Journal. That could be expensive for Stephens Media as the Democratic Underground attorneys from the Electronic Frontier Foundation are asking to be awarded attorney's fees.

"The court believes that Righthaven has made multiple inaccurate and likely dishonest statements to the court," Hunt wrote in his ruling, citing specifically Righthaven's failure to disclose Stephens Media as an interested party in the litigation as Stephens Media clearly had an interest in the outcome of the copyright lawsuits.

"Accordingly, the court orders Righthaven to show cause, in writing, no later than two weeks from the date of this order, why it should not be sanctioned for this flagrant misrepresentation to the court," Hunt wrote in his ruling.

As for Righthaven's lack of standing to sue over Review-Journal content, Hunt wrote the recently unsealed lawsuit contract between Righthaven and Stephens Media -- called the Strategic Alliance Agreement (SAA) -- clearly leaves Stephens Media in control of the copyrights and gives Righthaven only the right to sue.

In order to file lawsuits, copyright plaintiffs have to have actual control of the copyrights, not just the right to sue, Hunt found.

"Because the SAA (lawsuit contract) prevents Righthaven from obtaining any of the exclusive rights necessary to maintain standing in a copyright infringement action, the court finds that Righthaven lacks standing in this case," Hunt's ruling said.

If adopted by the other federal judges hearing Righthaven lawsuits in Nevada, Colorado and South Carolina, Hunt's ruling could shut down Righthaven's lawsuit campaign -- though it can always appeal or amend its lawsuit contracts with the newspapers. Righthaven has filed 274 lawsuits over Review-Journal and Denver Post material since March 2010, though many of those suits have been settled.

A request for comment was placed with Righthaven.

"To Righthaven and Stephens Media, the court has issued a stinging rebuke. The court even ordered Righthaven to show cause why it should not be sanctioned for `flagrant misrepresentations' to the court in concealing from the court that Stephens Media stood to recover 50 percent of any recovery in these lawsuits. But for those desiring to resist the bullying of claims brought by pseudo-claimants of copyright interests, the ruling today represents a decisive, and potentially far reaching, victory," said one of the Democratic Underground's attorneys, Laurence Pulgram of the law firm Fenwick & West LLP in San Francisco, who works with the Electronic Frontier Foundation.

Hunt’s ruling today came in a 2010 Righthaven lawsuit against the Democratic Underground, operator of a big political website.

This became one of Righthaven’s most-regretted lawsuits as a message-board poster had posted just four paragraphs of a 34-paragraph Review-Journal story about then-U.S. Senate candidate Sharron Angle. By crediting the Review-Journal and linking to the R-J story, this was essentially an invitation for Democratic Underground readers to click on the link and go to the R-J website.

And later fair-use rulings against Righthaven in two more cases virtually guaranteed the post on the Democratic Underground site was protected by the fair use doctrine of copyright law.

In their counterclaim, attorneys for the Electronic Frontier Foundation (EFF), a digital free speech group based in San Francisco, hit Righthaven and Stephens Media with allegations of barratry (the alleged improper incitement of litigation); and champerty (an allegedly improper relationship between one funding and one pursuing a lawsuit).

The EFF also accused Righthaven of "fraud upon the Copyright Office."

"We are pleased that the court saw through Righthaven's sham assignment of the copyright and dismissed its improper claim. Today's decision shows that Righthaven's copyright litigation business model is fatally flawed. We look forward to litigating the claim against Stephens Media, and showing that Democratic Underground did not infringe Stephens Media's copyright with a five sentence excerpt of a news article,’’ said Kurt Opsahl, an attorney for the EFF.

Las Vegas and San Diego attorney Marc John Randazza, who is litigating against Righthaven in Nevada and Colorado, praised Hunt’s ruling.

"It does not get much more clear or damning than this. It seems to me that Judge Hunt not only squashed Righthaven in this particular case, but has essentially ended all Righthaven's cases in Nevada. We have felt all along that Righthaven was being less than forthcoming. It seems that with the excellent work put forth by the EFF, the judges are starting to see it too,’’ he said.

Eric Goldman, an intellectual property law expert and Righthaven critic, noted Hunt was harsh in his criticism of Righthaven.

While Righthaven and Stephens Media have said their no-warning lawsuits were necessary to deter rampant online infringements of newspaper material, critics said the suits were bullying and unnecessary as simple take-down requests would be just as effective.

"This is another stinging defeat for Righthaven. The judge emphatically rejects both Righthaven's substantive arguments about the assignment as well as Righthaven's procedural conduct," Goldman said.

Goldman noted Hunt indicated that Righthaven can't amend the existing contract defect covering the existing litigation.

"This could lead to dismissal of all of the pending Review-Journal litigation and, depending on the exact wording of the MediaNews contract, possibly the Denver Post litigation as well," said Goldman, associate professor at California's Santa Clara University School of Law and director of its High Tech Law Institute.

"If Righthaven can't get this opinion reversed on appeal and other courts defer to this opinion (which I think is likely), Righthaven may be back at square one with its entire business," Goldman said.

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  1. Chunky says:

    Probably the best news he's heard today!

    Best of luck to all the other defendants who are fighting back!

    That's what Chunky thinks!

  2. Judge nails the final nail in Righthaven's coffin. The only question now is how much Stephens Media and News Group will pay for this mess they have caused.

  3. Finally someone saw through Righthaven's lies. This is a victory to all the small guys and businesses that stood their ground and knew that justice would prevail.

  4. Man, this is going to open a can of worms. How does this affect cases that have already settled?

    It appears that this ruling applied to only a single case, but can it be used as precedent for the others still pending? I would think that if Judge Kane in Colorado issues a similar ruling on all the cases he has that it would be more effective as one.

    One thing I am happy to see about this ruling, it was by Hunt and not Mahan. I still think Mahan used horrible logic in his "fair use" ruling and that it won't stand. Hunt seems much better reasoned.

    This is a very good thing. I much prefer to see Righthaven nailed on legal grounds instead of having judges make shaky/bad decisions on "fair use" to bring them down. Copyright law (and law in general) is much better served this way.

  5. boftx

    Yeah I agree with that one case but I would like to see judges rule on some of these fair use points because fair use is still on very hazy legal ground and some definitive rulings could have clarified for people what is permissible and what is not.

    As far as those who have settled I think they now have even more ability to challenge the settlements. I think many will, however so many settled because they did not have money to fight. Hopefully these rulings will inspire more lawyers to take on these cases. With the prospect of getting money from Righthaven as well as Stephens Media and News Media Group it may be more enticing for lawyers to take them on.

  6. With sanctions a possibility hopefully this will get the Nevada bar as well as the Nevada State Atty General to take notice. Righthaven should not just be looked at civilly but criminally as well.

  7. If this ruling stands I think it handed Eiser a hands-down win in her suit, not to mention opening Righthaven up to a criminal complaint in S.C. since barratry is still a recognized offense there.

    I'd put the over/under at 60 days for how long RH continues to exist.

    What is ironic is that if they had structured this as an independent contractor relationship it might have stood up.

  8. boftx

    Yes the entire thing was so underhanded that it offended the courts it offended everyone's sense of justice except for people like Sgt Rock and Sherman Frederick who now have to justify why they supported such a corrupt organization.

  9. I, of course, like this ruling. But still have a question for all commenters, and no one to date seems to want to answer: Is there anyone commenting who has been a defendant? And, aside from Sarge, who I believe is an attorney, is anyone here an attorney?

  10. I just finished reading the full ruling (thanks for posting that, Steve!) Judge Hunt actually uses the "my little friend" line from Sherman in his reasoning!

    I strongly urge everyone to read the full ruling, I love how Hunt addresses the language in the SAA, particularly how SM "retains" rights. Furthermore, Judge Hunt and his clerks deserve great respect for writing a document that clearly states the issues and logic behind the ruling in a manner that is so easy to understand.

  11. This was NEVER about "protecting" anything...

    This was a SCAM right out of the chute.
    How anyone could have thought this was gonna fly, I do not know.
    ESPECIALLY the stunt with the TSA photo...that was a flat-out CON.

    Can you just hear our Laurel & Hardy team of Frederick & Gibson...
    "Well, this is a fine mess you've gotten us into, Shermy"!!!

  12. I read the ruling in its entirety also and it is amazing how Judge Hunt absolutely destroys all of Righthaven's arguments. This was very well written and will be a hallmark case for all Righthaven cases going forward. It also opens the door wide open to hold Stephens Media ultimately responsible for this. Once Righthaven is gone It will be Stephens Media holding the bag for this.

    Stephens Media created Righthaven for the purpose of distancing themselves and protecting themselves from liability but they are going to find it did not and they will end up losing far more than any "infringements" of their content ever could. Same goes for News Media group who will also be unable to escape from this. As media organizations they have severely breached the public trust and now they will reap the whirlwind.

  13. Botfx: "How does this affect cases that have already settled?" It doesn't. Defendants, however, do have the right to litigate. As for the "final nail..." Remember what Yogi Berra said, "It ain't over 'til it's over."
    BushDepression: "They should put these Righthaven punks in jail!" Nah, that'd just cost everyone more money. I don't know if there's a way to derive damages from this, but if there is, I'd sure like my dough back and see some fines levied.
    All: It really isn't over yet. My understanding is that it's going to be tough for Righthaven to pull back or withdraw suits from the Federal Court. By the same token, my understanding is that the Courts are probably going to have to make a ruling on every case in order for them to "end."

  14. Wonderful news. Regarding the already settled lawsuits, there should be reason enough now for those defendants to file to vacate those settlements.

  15. GMAG for once I agree with you, and I for one as a blogger and a forum owner am celebrating this decision.

    I hope that Righthaven and all of their attorneys enjoy jail time for perjury.

  16. Could this be the end of the RJ? Hope not because it will bring the Sun down with it.... But then again, maybe Vegas would have a truly objective newspaper take their places....

  17. dave202: I can't imagine that this would be the end of the RJ for several reasons: I would guess that, even if Stephens has no insurance for this matter (which would be remarkable), the paper would be sold and the liabilities negotiated out. Beyond that, given Stephens' wealth, the company would probably have little trouble writing a check for the losses. As to "bring[ing] the Sun down with it," while I'm not certain what the "Joint Publishing Agreement" says in that even, however, I'm sure that the Sun would continue online, which is clearly where this industry is going...and I'd pay for it online, by the way. The days of print editions are shortening, at least for smaller papers, perhaps not ending in my lifetime, but certainly down the road. I find that rather exciting, as for readers, stories can be updated in a heartbeat. On the other hand, it's somewhat analogous to wire service reporting, a return to the past of sorts.

  18. I agree with Mr. Stern that it would be unlikely that this can affect the RJ directly as it is Stephens Media that is the entity that has the SAA with Righthaven.

    It is also inconceivable that the Sun has not considered its options should the RJ cease publication. The Sun has consistently striven (and might I say succeeded) to be at the forefront of online news publication.

  19. Sarge: Y'know, I've been upfront here and I can't discuss my settled case, nor can I discuss, reasonably, whether or not the Judge [erred] in his ruling. Whether or not you choose to believe me, and notwithstanding my long tenure in the news business, I was unaware of my alleged violation at the time I was served. I can tell you that both Frederick and Mitchell had been on my email list for years and were fully aware that the stories posted on www.asternglance.com from the RJ were only ones in which I participated significantly. I considered myself somewhat of a "partner" with the reporters.

    Now, I've heard that you're an attorney and defer to you in matters of the law, which as an attorney you know are almost always debatable. What you aren't is a reporter, or in the news business. And, yes, I am extraordinarily pleased that the trend of newspapers is online. It's clear you've not read my blog. If you have, then you would know that there's not a single piece that comes close to violating "fair use" at this point. And, yes, I am "sooo happy" that the trend is to online. It's the smart way to go. The news business has to evolve with technology. And, as I said, I'm happy to pay for the online service, which I do in a couple of cases.

    What I'm not happy about is that you remain in the shadows and refuse to engage in any sort of reasonable colloquy. You seem simply to be a dogmatic idealogue in this matter. The RJ has financial problems as do most newspapers, especially in markets of this size. It needs to evolve. It has many good reporters and good stories. Wouldn't you like to be able to read updated pieces as news breaks, rather than just have something that was printed the night before, which is generally outdated before it hits your doorstep?

  20. hermit: I stand corrected, as I only recalled a very early story that was relatively brief.

    wtk2: As for Sarge, what I find most interesting is that he's unwilling to consider, at least as far as I have read, any position other than his own. There's no true engagement in his discussion, just pounding away with accusations, absolutes and his interpretation of the law without any consideration of the value of, oh, possibly "take down" notices, or any other views. Also, I commend your use of "legally dubious," as it isn't over yet.

    It's interesting to have a discussion here, but also interesting to see folks who are so angry that they have nowhere to go intellectually in their discussions. It reminds of Washington today, as opposed to what seems like 100 years ago when I'd see Mansfield and Dirksen in the Senate Cloak Room working out a compromise for the nation, as opposed to self-aggrandizement and re-election.

    Just the thoughts of an old Liberal from New York City.

  21. wtk2: Notwithstanding that I do make comments on stories (though I am apparently banned from the RJ, where I've never made a comment, or at least don't recall making one), I'm not in favor of this sort of colloquy. It effectively allows folks to say just about anything, within the bounds of propriety, but frequently not factually correct.

    Commenters are, it seems to me, getting the visibility, and all too often anonymously. As an old news guy, I like the idea of letters to the editor, as there's a high degree of cache to them. But then again, this is a new world, eh? I do think, however, that full, real names should have to be used. After all, if you're going to comment, you should be proud and supportive of what you say (this is not directed at you, by the way, just a general thought). I discuss this on my blog.

    Having said all that, I hope others reading Steve Green's piece here are reading other stories in the Sun -- It's a fine newspaper with fine reporters, reporting and editors.

  22. There has been speculation that the user "SgtRock" and "jfnance32" are the same person and that he might be a real estate attorney.

    After reading the comment by SgtRock at 12:11AM I would have to discount the last part of that speculation.

  23. Kudos to Judge Hunt for seeing through this sham, you would have to have rocks for brains to not realize this was nothing more then a quick grab for easy money. Hopefully the legal system will make an example out of Righthaven and their partners in crime.

  24. That's exactly what I anticipated from Sarge, notwithstanding that I have several times publicly, as well as on my blog, explained what occurred, following the settlement and without qualification or excuse. Resorting to insinuation and insult, while remaining anonymous, well, you be the judge, so to speak. It would be easy to discuss his post line by line, but I'd prefer to discuss with him personally. Again, Sarge, you know phone number, or we can meet for drink. There then, ends any further colloquy with this fellow (or woman).

  25. scandalrag, et al (including Steve Green): With a bit of smile I say attorneys just have to get rid words like "Barrartry and Champerty." More importantly, I think a good news story would be what these suits are costing the public, if anything. Of course, the better story will be the cost to Stephens Media in terms of legal fees to say nothing of the rest of the now named defendants, thought that would be more than a bit of a challenge for any reporter to get.

    Frankly, I think, as I've said before, Stephens probably could have been successful sending out "take down" notices, as do many papers. In fact, there's a pretty interesting academic paper on the financial impact of this sort of thing: https://commons.georgetown.edu/blogs/cop....

  26. "Why do papers have to send take down notices to morons who don't have any ethics to know that copying and pasting somebody else's work is wrong?" - SgtRock

    Unless the alleged infringement is blatant (as it was in a couple of cases I saw) it gives the copyright owner a much better position later on if it is ignored, and can also give a heads-up to legitimate "fair use" grounds if the take-down notice is challenged.

    Maybe there is no legal requirement to send a take-down notice other than as spelled out by Title 17, but it makes good sense to do so. Even before the SAA and its terms came to light, most people, including the bench, were deeply offended by what was seen as a blind man firing a shotgun first and only later asking what he hit. I have little doubt that was why Judge Mahan ruled as he did, bad as it was. With any luck his ruling is now moot and won't be used as precedent.

    And there is this: it is better to retain the moral high ground whenever possible in an action in equity. That's just plain common sense, which still counts.

  27. I am more than happy to debate ethics, but not blindly, with those who chose not to reveal their true names.That would be un-Aristotelian. Moreover, as most who have followed the Righthaven matter know, I extensively discussed my litigation on my blog and how it occurred. I also commented on it in the media. If anyone would like to discuss it me personally, as I've said in the past, please feel free to give me a call and we can get together.

  28. boftx: "it is better to retain the moral high ground whenever possible in an action in equity. That's just plain common sense, which still counts."I think that's important. However, I find it hard to be dissuaded that at a time when the newspaper industry is suffering, to say the least, that the RJ saw this as a revenue stream, and the timing, I'm sure management there agreed, was perfect as, really, who knew? There were and remain copyright violations all over the Internet. And, many still aren't aware they're violating the laws, simply because of history...too much there to get into.

    The newspaper industry is clearly seeking new ways to generate revenues. The WSJ has had a paid site for years. In fact, in "The War at The Wall Street Journal," the story of Murdoch's acqusition, Murdoch wanted to do away with the online subscriptions until he was told there were nearly 200,000 paid. The NYT has gone the same way (I've got both). The Sun has made subtle, but reader convenient changes in its site.

    All of this to say that this industry has to get that creative, that compelling to survive and grow. Am I willing to pay for the Sun and RJ online? Sure. Given some of the colloquy here, newspapers ought to charge to post a comment...

    Am I "angry" that I was sued? At first, yes. At second, not entirely. Perhaps I should have known better, having been in that business for so long. However, when Glance started, and I first posted articles from the RJ in which I or my clients had participated, I spoke with Mitchell and Frederick -- that was years ago, 2007 or earlier -- both said that's just fine as long as credit was given.

    When I was sued, I called Frederick, who didn't return the call. Then Mitchell, who said "I don't know anything about it." I thought that was odd, as Green wrote that I was one the better sources for the RJ. Now, by the way, exclusives that I happen upon, either from clients or others, go first to the Sun. And, I've heard from reporters there that sourcing has become a bit more of a challenge because of these actions.

    After the suit, I spoke with reporters I know at major papers, none of whom could imagine this was going on. Once the NY Times, LA Times or Wall Street Journal takes this sort of mass action, I'll believe there's a negative impact on newspaper revenues. To date, I've seen no data to that effect.

    Beyond that, if the RJ is so concerned about this issue, why doesn't it have a notice on every web page that it will litigate any copyright violation, or otherwise take action to help prevent it.

  29. Steve,

    I agree completely with you that this was meant to be a revenue stream for SM. In fact, when the SAA was first unsealed I speculated that the primary purpose I could see for it was to (1) allow SM to show revenue without any expense attached, and (2) allow RH to collect what would otherwise be a contingency fee not allowed under other circumstances. Based upon what I read in the SAA I called it an exercise in creative accounting.

    There was absolutely no need to transfer ownership of a copyright unless it was intended to out-source the expense of litigation.

    As to SgtRock's statement that sending a take-down notice has risks, that is just plain ludicrous. If the take-down notice could result in the sender being sued if no infringement was present, then how much more so would a suit be subject to counter-actions if filed against someone who was not infringing? (And I think Judge Hunt has answered that question by allowing the counterclaim against SM to proceed.)

  30. "If you send an invalid take-down notice then you can be sued by the recipient."

    a real lawyer could manage to send a legit take-down notice. of course given Righthaven's approach to law that'd probably be asking to much.

    damn, from all appearances there is very little competence in that group -- I mean look at the DU action to begin with --- clearly fair use. But like someone said, the blind man with the shotgun ain't to keen a shot.

    oh well.