Righthaven receiver moves to fire CEO Steven Gibson

The Righthaven LLC copyright infringement litigation took a bizarre turn Monday when Righthaven's court-appointed receiver moved to fire Righthaven CEO Steven Gibson.

The receiver, Lake Tahoe-area attorney Lara Pearson, filed papers in federal court in Las Vegas saying Gibson has been taking actions to harm the company, that she is terminating him and that she plans to have Righthaven sue him for malpractice.

Gibson didn't say Monday if he would formally contest Pearson’s actions, but he made it clear he opposes them.

"I do not think it appropriate to litigate this matter in the press, but you can note that there is certainly disagreement," said Gibson, a Las Vegas attorney.

Las Vegas-based Righthaven is a partnership between Gibson and an affiliate of Stephens Media LLC, owner of the Las Vegas Review-Journal.

In 2010 and 2011, it filed 275 no-warning lawsuits against bloggers, message-board posters and website owners around North America and Europe.

The suits alleged the defendants had, without authorization, copied and re-posted material online from the R-J and the Denver Post.

Righthaven's lawsuits stopped last year after federal judges ruled it lacked standing to sue because of flawed or ineffective copyright assignments it had obtained from the newspapers for lawsuit purposes.

In some cases, Righthaven lost on fair use grounds.

After its legal setbacks, Righthaven essentially shut down except to pursue appeals of some of its court setbacks.

Righthaven hasn’t disclosed how it's managing to pay an outside attorney for pursuing its appeals while at the same time it's been telling creditors it lacks cash to pay them. It’s believed its ongoing legal expenses have been funded by capital infusions from one or both of its owners.

Defendants who had defeated Righthaven in court won more than $318,000 in attorney’s fees judgments against the company.

Saying it couldn’t pay these judgments or other debts, Righthaven saw a federal judge seize its assets and turn them over to Pearson, who was appointed receiver last year.

The assets included Righthaven's website, trademark and the copyrights it used for lawsuits. So far, just the website and trademark have been sold for the benefit of creditors for a total of $4,325.

No one bid for the copyrights at an auction amid questions about their value, if any, given rulings by judges that the copyrights were invalid for lawsuit purposes.

In the latest development, Pearson filed a report with U.S. District Judge Philip Pro in Las Vegas on Monday saying:

• "Instead of satisfying Righthaven’s substantial judgments, Gibson apparently has elected to allocate Righthaven funds that have been concealed from me to pursue appeals over rights that Righthaven no longer owns and has done so in a manner that further imperils what is left of Righthaven’s assets with additional attorneys' fees awards and sanctions."

• That on Monday, she formally notified Gibson and his wife, Raisha "Drizzle" Gibson, chief operating officer of Righthaven, that they had been terminated "from any position with Righthaven."

• That on Monday she ordered Righthaven's new counsel for appeals purposes, attorney Erik Syverson of the law firm Miller Barondess LLP in Los Angeles, to cease all work for Righthaven.

• She also told told Miller Barondess to report to her how much money from Righthaven is in its trust account "so that I may order any such fund transferred to me for disbursement.''

Her actions, if upheld, could prevent Gibson from pursuing Righthaven's appeals.

Pursuing appeals, however, is a bad idea for Righthaven, Pearson said in her court brief.

That’s because the appeals potentially subject the company to additional attorney’s fee awards against it should the appeals fail, which is likely, Pearson said.

"It is for this reason that I have also ordered that the appeals be terminated immediately, so as to stem additional losses to the receivership estate," Pearson wrote in her filing.

In a letter to Gibson, Pearson said she has placed him on notice that the company she claims to control, Righthaven, "will be taking legal action against you for your ultra vires acts (acts he lacked authority to take) as well as for claims of legal malpractice, which led the company to its current state."

Pearson, in her court filing, asked Pro to ratify her actions. The judge hasn’t yet indicated when or if he’ll act on the request.

''The receiver's job is to take control of a mismanaged organization, to make sure that it isn't looted before legitimate creditors get paid,'' said Marc Randazza, a Las Vegas attorney who has represented Righthaven defendants in multiple cases – including the case that resulted in Pearson being appointed as receiver.

''It is good to see Ms. Pearson doing that. This is why the court appointed her to run Righthaven's affairs,'' he said. ''I'm really looking forward to Righthaven v. Gibson. I won't be counsel in it, but I'll have a comfy chair and a nice drink in my hand as I enjoy the spectacle.''

The bad blood between Righthaven and the attorneys suing it relate to claims by defense attorneys that Righthaven employed abusive litigation tactics in its lawsuits and that the suits threatened defendants' free speech rights. Righthaven and Stephens Media, however, say the suits were needed to deter rampant online copyright infringment involving newspaper industry material.

Legal

Share

Previous Discussion:

Discussion 5 comments

Only trusted comments are displayed on this page. Untrusted comments have expired from this story.

  1. "legal malpractice" Seems to me that is something the State Bar would have some interest in.

  2. Chunky says:

    This story just gets better and better every time it's reported.

    We can only hope that Mr. Gibson will eventually stand in judgement and be held accountable.

    That's what Chunky thinks!

  3. Hey, Shermy...

    Your little friend (the nasty little bugger) has turned out to be lower than a snake in the grass...
    but I do believe that his assorted sordid machinations have plum worn down the patience of Lady Justice...

    "In a letter to Gibson, Pearson said she has placed him on notice that the company she claims to control, Righthaven, "will be taking legal action against you for your ultra vires acts (acts he lacked authority to take) as well as for claims of legal malpractice, which led the company to its current state."

    Whew!!!
    With friends like that, Sherman...
    Hey, who IS paying for all this???

  4. Chunky has it right: this just gets more interesting -- and more important -- with each twist and turn. I guess that the Courts will decide whether the Receiver's malpractice claim against Mr. Gibson is barred by NRS 11.207 and, if it is not, then we might get treated to an interesting round of finger pointing between Mr. Gibson and Stephens Media.

    Keep up the good work, Steve.

  5. and the two parties who look like bigger idiots with each move in this mess? The Nevada Bar and Sherman Frederick.

    The Bar looks like an empty host who does nothing but collect dues for the benefit of those who run it. I mean if what Gibson and his lackies have done doesn't rise to the level of professional misconduct to then nothing will.

    And of course the empty headed former publisher who really, really believed he was all that and a bag of chips when he announced his "little friend". The BEST part is that he's still over on the RJ pontificating as though he's without error.

    Oh well --- glad this step was taken and that hopefully it's the final death blow to this horrid and greedy insult to the "justice" system.