Review-Journal owner facing $774,000 fee demand in Righthaven case
11 April 2012
Attorneys say the owner of the Las Vegas Review-Journal should be required to pay $774,683 in legal fees for what critics call a failed ''shakedown'' copyright infringement lawsuit that threatened the free speech rights of a political website.
The attorneys represent the Democratic Underground, a website that defeated Righthaven LLC, the R-J’s copyright enforcement partner, in one of Righthaven’s copyright infringement lawsuits.
If attorneys for the Democratic Underground have their way, the family of Arkansas investment banking billionaire Warren Stephens will be paying their fees for two reasons:
• They say the Stephens company that owns the R-J, Stephens Media LLC, used Righthaven as a tool to prosecute a frivolous copyright lawsuit against the Democratic Underground.
• Even after the Stephens family invested in Righthaven, Righthaven apparently is now broke and can’t or won’t pay creditors’ claims. That would leave Stephens Media on the hook for all of the fees in the Democratic Underground case under the theory it and Righthaven are jointly and severally liable.
"Righthaven and Stephens Media had an improper motivation in the pursuit of this lawsuit and their litigation campaign more generally. They sought to shake down website operators and bloggers for nuisance-value settlements with threats of seizure of their domain name and huge statutory damage awards, regardless of whether those defendants’ uses of the works at issue were actually infringing,'' said a filing Tuesday in federal court in Las Vegas seeking recovery of legal fees by Democratic Underground attorneys. ''As to deterrence, an award of fees is necessary to dissuade these parties and others from any similar scheme of shakedown lawsuits threatening staggering statutory damage awards and seizure of websites. Righthaven and Stephens Media pursued these claims such that numerous instances of legitimate fair use, like that here, would necessarily be dragged into their litigation machine."
The attorneys said the lawsuit at issue, in backfiring on Righthaven and Stephens Media by resulting in legal defeats against them, set precedents in larger copyright case law.
Last month, the lawsuit was named the U.S. Copyright Case of the Year by the international publication Managing Intellectual Property.
U.S. District Judge Roger Hunt hasn't indicated when he'll rule on the fee request. Righthaven and Stephens Media have not yet responded to the request, but in the past Stephens Media attorneys have said the Righthaven lawsuits were needed to crack down on a ''parasitic'' business model in which newspaper content is regularly stolen by copyright infringers.
Las Vegas-based Righthaven is the copyright enforcement partner of the R-J and formerly of the Denver Post.
It obtained copyrights from those papers, and then, beginning in March 2010, filed 275 infringement lawsuits based on those copyright assignments.
Righthaven never won a case on the merits, as judges eventually ruled the company either lacked standing to sue under its copyright assignments or that defendants were protected by the concept of fair use in posting material from the papers on websites without authorization.
Righthaven’s most disastrous lawsuit was against the Democratic Underground, a big political website in Washington, D.C.
Righthaven, in a suit filed by its CEO Steven Gibson and two other staff attorneys, hit the site with an infringement lawsuit on Aug. 10, 2010, after website user ''pampango'' posted on the site the first four paragraphs of a 34-paragraph R-J story about then-U.S. Senate candidate Sharron Angle.
The post credited the information to the R-J and linked to the R-J website — a circumstance many newspapers would welcome, as it would boost visitor traffic to their site.
Righthaven, however, claimed in the no-warning lawsuit this was copyright infringement. The company demanded $75,000 in damages and forfeiture of the Democratic Underground website domain name to Righthaven.
David Allen, a Democratic Underground LLC principal, said in a court declaration that the first he heard there was a lawsuit or any concern about the ''pampango'' post was when he was contacted for comment about the lawsuit by the Las Vegas Sun.
''Before this lawsuit, neither the Las Vegas Review-Journal nor Righthaven ever notified me or — to my knowledge — anyone else at Democratic Underground about the allegedly infringing post,'' Allen said in his court declaration.
(While Righthaven is regularly criticized for the no-warning nature of its lawsuits, the company pointed out in the suits that the defendants it sued also hadn’t bother to call or email the R-J and the Denver Post to seek permission to use their material).
Rather than settle for a few thousand dollars, as many Righthaven defendants did, Allen hired legal counsel.
He and the Democratic Underground eventually were represented by the Electronic Frontier Foundation, a digital rights group in San Francisco, as well as one of the top copyright litigators in the nation, attorney Laurence Pulgram at the firm Fenwick & West LLP in San Francisco.
In their motion Tuesday to be reimbursed for fees, Pulgram and EFF attorney Kurt Opsahl said they and other attorneys put in ''well over 1,000 hours fighting Righthaven and Stephens Media at virtually every step.''
Through their work, which included a counterclaim dragging Stephens Media into the case, it was revealed for the first time in the Righthaven lawsuits that Righthaven lacked standing to sue because the R-J and the Denver Post retained control of the material Righthaven was suing over.
Defense attorneys say that’s not allowed under copyright law, which requires plaintiffs in infringement lawsuits to be the actual owners. Righthaven is a company, not a law firm, though Hunt has noted it acted much like a law firm with arrangements in which its newspaper partners received a cut of lawsuit revenue.
Attorneys fighting Righthaven also participated in decisions in which Righthaven was fined $5,000 for misleading the federal judges in Las Vegas about the nature of its lawsuits; in which the Democratic Underground post at issue was protected by the fair use doctrine of copyright law and in which Righthaven’s standard website seizure demand in its lawsuits was thrown out since it’s not authorized by the federal Copyright Act.
Because of multiple fair use defeats sustained by Righthaven, its lawsuits have been criticized as not just abusive and frivolous, but as threats to free speech.
''This approach to copyright litigation has a serious potential, and likely the specific aim, to chill legitimate speech in the form of fair uses of copyrighted works, and courts have recognized that it should be deterred for precisely this reason,'' the Democratic Underground attorneys wrote in Tuesday’s filing. ''Speech was chilled in this very case, as Democratic Underground took down the excerpt immediately upon receiving notice, rather than face even a small risk of the disabling remedies being threatened.''
Tuesday’s fee request comes as the EFF waits for word in another case on whether Righthaven and Gibson should be fined after Righthaven failed to turn over records so the EFF could see if it has assets it could seize to cover its fees.
In all, judges have already ordered Righthaven to pay $186,680 in fees to parties that prevailed against Righthaven in its lawsuits.
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