Attorneys seek to examine Righthaven CEO about company finances
7 November 2011
Attorneys trying to collect $63,720 in fees from Righthaven LLC stepped up the pressure Sunday, asking a court to require that Righthaven’s CEO and his wife be ordered to appear for an examination about the company’s finances.
The U.S. District Court in Las Vegas last week ordered the U.S. Marshals Service to seize the $63,720 in assets after Righthaven couldn’t – or wouldn’t – pay attorneys for Wayne Hoehn after a judge dismissed a Righthaven copyright infringement lawsuit against Hoehn and then ordered Righthaven to pay his legal fees.
The suit against Hoehn was one of 275 filed since March 2010 by Righthaven, which lately has been hurt by unfavorable court rulings finding it lacked standing to sue over Las Vegas Review-Journal and Denver Post material.
Hoehn’s attorneys at Randazza Legal Group of Las Vegas, in a Sunday U.S. District Court filing, said that in order to assist the Marshals Service in locating Righthaven assets, they want copies of Righthaven’s financial records and a judgment debtor’s examination of Righthaven CEO Steven Gibson, a Las Vegas attorney; and a woman they say is his spouse, Raisha Y. "Drizzle" Gibson, identified as Righthaven’s chief administrative officer.
The Randazza attorneys said in their filing that "in order to fully recover Righthaven’s assets, Hoehn must first apprehend where they have gone, as Righthaven’s counsel has stated that Righthaven is nearing bankruptcy."
"Both Raisha and Steven Gibson will likely have direct knowledge of information regarding suspected fraudulent transfers of funds from Righthaven to third parties, including themselves, effected in order to evade payment of the lawful judgment rendered by this honorable court," Hoehn’s attorneys said.
They’ve previously charged that in paying Steven Gibson a salary and in paying outside attorneys to file frivolous motions seeking to delay payments to prevailing Righthaven defendants, Righthaven has "fraudulently transferred" money belonging to Hoehn.
A request for comment was placed with Righthaven.
The Randazza attorneys Sunday asked that the judgment debtor examination by supervised by a magistrate judge, presumably U.S. Magistrate Judge Robert Johnston in Las Vegas, who is assigned to the Hoehn case.
They said the examination should be supervised by the judge as opposed to being conducted in private because of Righthaven’s conduct in other cases in which they said defendants had difficulty prying information from Righthaven and its counsel.
"This conduct is not isolated to Righthaven, but appears endemic to the litigation strategy of Steven Gibson, its CEO. In March of 2011, Gibson was held jointly and severally liable within this district for sanctions in excess of $6,000, stemming from misconduct during a deposition," the Randazza filing said.
In that case – a securities fraud case unrelated to Righthaven – Gibson’s client didn’t answer several questions and opposing attorneys asked that Johnston require the client to appear for another deposition.
Johnston called Gibson’s objection to one of the questions posed to his client, a plaintiff in the deposition, "absolutely bogus" and "frivolous."
During an April 2010 hearing, Johnston ordered that the deposition continue at the federal courthouse under his direct supervision – a departure from the usual practice of depositions being conducted outside of the presence of a judge.
Gibson and another attorney, J. Scott Burris, later asked that Johnston’s order be vacated as it was "clearly erroneous."
They said in a court filing that their client, Dr. Mark B. Kabins, had been hit with "inartful deposition questions" targeted toward "legal conclusions, legal analysis and attorney/client communications for which Dr. Kabins testified that he had consulted with counsel, or would need to consult with counsel, regarding such questions."
But U.S. District Judge Gloria Navarro later upheld Johnston’s order in which he assumed control of the deposition, finding that at the deposition, "From the beginning, it was clear that Mr. Gibson was prepared to be combative."
Johnston ultimately ordered Kabins and his legal team to pay the defendants their $6,000 in attorney’s fees and costs in the deposition dispute.
"The court specifically finds that plaintiff’s failure to cooperate in the taking of the deposition, including numerous inappropriate objections, was not substantially justified and that no other circumstances make an award of expenses unjust. These awarded expenses are to be paid by the plaintiff and plaintiff’s attorneys jointly and severally as tactics employed by the plaintiff’s counsel were not reasonably justified," Johnston wrote in his order.
"It is no idle speculation that such conduct, between Gibson and his wife would be guaranteed in a wasteful private deposition where sensitive financial information about the company for which they both worked was at stake, culminating in a seizure of its assets," the Randazza attorneys wrote in Sunday’s filing in Hoehn’s Righthaven case.
"The examination before a magistrate will create a clear public record of Righthaven’s financial condition for Hoehn to act upon in seizing assets through the U.S. Marshals. Moreover, the media attention Righthaven’s litigation campaign has received makes the plaintiff’s precarious financial condition a matter of public interest, as the technology and media communities have great interest in knowing what became of settlement funds earned by the ‘Nation’s Pre-Eminent Copyright Enforcer’ (as Righthaven calls itself)," their filing said.
The Randazza attorneys were likely alerted to the Kabins’ discovery dispute by Las Vegas attorney Chad Bowers, who is involved in the securities fraud case on the opposite side of Gibson and also represents Righthaven defendants.
If Johnston supervises the proposed debtor’s examination of Righthaven with Steven Gibson and Raisha Gibson, it won’t be his first encounter with Righthaven.
Last year, Johnston questioned Steven Gibson about the legal costs Righthaven expected a defendant to pay in one of Righthaven’s early lawsuits – a notorious case against Boston cat blogger Allegra Wong.
Now, if Hoehn’s attorneys have their way, it will be the other way around.
That is, Mr. Gibson will be answering questions about money Righthaven owes Hoehn for his legal fees.
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