Fight for control of Righthaven escalates
Who really controls Righthaven LLC and is Las Vegas attorney Steven Gibson still its CEO?
Those are questions a federal appeals court may soon address after an attorney for the original Righthaven on Thursday questioned assertions that Gibson had been fired as its CEO.
This is yet another convoluted legal situation involving the Las Vegas-based copyright lawsuit filer, which beginning in 2010 teamed up with the Las Vegas Review-Journal and the Denver Post to file 275 infringement suits against websites, bloggers and message-board posters.
After Righthaven’s lawsuit campaign ended amid courtroom defeats for the company, a federal judge last year appointed a receiver to take over and auction its assets for the benefit of creditors.
Judge Philip Pro on March 13 then transferred Righthaven’s intellectual and intangible property like its copyrights to the receiver. That was after creditors obtained writs for U.S. Marshals to seize Righthaven’s cash and property, but they came away mostly empty handed.
The receiver, Northern Nevada attorney Lara Pearson, then last week moved to fire Gibson.
She also ordered Erik Syverson, a Los Angeles attorney representing the original Righthaven, to stop acting on behalf of Righthaven.
Finally, she hired Las Vegas attorney Allen Lichtenstein to represent her as she claims to now control Righthaven, aka the new Righthaven.
Despite Pearson’s directive to Syverson that ''all future actions taken with respect to Righthaven require my approval,'' Syverson filed correspondence with the 9th U.S. Circuit Court of Appeals in San Francisco on Thursday on behalf of the original Righthaven.
Those papers appear to challenge Pearson’s authority over Righthaven.
Syverson’s filing refers to Gibson as ''Righthaven’s CEO'' and says that Pearson’s hiring of Lichtenstein was ''going beyond the scope'' of a report she had made June 25 to Pro about her activities.
Syverson told the appeals court this is a ''dispute between the receiver and Righthaven’s management'' and that part of the dispute is over Pearson ''asserting that she had complete authority over Righthaven (and) that the CEO was retroactively terminated as of her appointment as a receiver.''
The attorney indicated in the correspondence he'll stand by, awaiting for some guidance from the court as to how to proceed.
It’s unclear whether the 9th Circuit, or Pro, or both will resolve the dispute over who’s in charge of Righthaven.
At stake is whether Righthaven can continue with an appeal of its legal setbacks even as it no longer owns any copyrights and as it claims to have no funds to pay creditors — including defendants who prevailed in the Righthaven lawsuits against them and won $318,000 in attorney’s fee judgments against Righthaven.
Gibson, in his own court filing this week, said no Righthaven assets are being used to pay Syverson to pursue the appeal at issue.
But he didn’t say who is funding the appeal or how much money has been spent on that and other appeals.
Gibson said in his filing that a win for Righthaven in its appeals could erase the attorney’s fee judgments against it — but Pearson says the appeals only subject the company to more liability for additional fees incurred by defense attorneys during the appeals process.
Pearson, should she prevail in the dispute, has threatened to sue Gibson for malpractice as she’s blaming him for the company’s apparent insolvency.
At issue in the appeal Syverson is pursuing is whether Righthaven had standing to sue Kentucky message board poster Wayne Hoehn, who without authorization placed a Las Vegas Review-Journal editorial on a sports betting website’s message board.
Also at issue is whether Hoehn was protected by the fair use doctrine of copyright law in his use of the entire editorial.
The fair use issue in the Hoehn case has been closely scrutinized in the media and legal worlds, with the U.S. book and music industries participating in the appeal to assist Righthaven.
They not only want to protect their content from infringers, but agree with Righthaven that Pro shouldn’t have issued a ruling on fair use after determining Righthaven lacked standing to sue Hoehn. In their view, the case was over when the standing decision was made.
Among Righthaven’s 275 lawsuits filed in 2010 and 2011, judges found in Hoehn’s case and one other case that defendants were protected by fair use in re-posting entire R-J stories or editorials on their websites without authorization.
Righthaven also lost on fair use grounds with a lawsuit involving an entire R-J story against the Center for Intercultural Organizing in Portland, Ore.
In their fair use rulings, which have First Amendment implications, judges said the defendants' use of the R-J content didn't affect the market for that content since Righthaven used copyrights for the material only for lawsuit purposes.
In a June 7 court filing, the Center for Intercultural Organizing said Righthaven no longer has standing to pursue its appeal in that case since its copyrights have been seized and turned over to Pearson.
Besides the fair use issues, Righthaven and Gibson have been arguing — so far unsuccessfully — that when judges found Righthaven lacked standing to sue, they weren’t ruling on the underlying copyright claims and shouldn’t have awarded defendants their attorney’s fees.