Federal judge: Copyright troll attorneys hiding something

A Minnesota lawyer and several associates await the wrath of a federal judge in Los Angeles after they defied his order to appear before him Monday to explain their practice of using the court system against people they suspect of downloading pornographic videos on the Internet.

Several defense attorneys have accused Minneapolis lawyer Paul Hansmeier, his former University of Minnesota law school classmate John L. Steele and others associated with them of using sham offshore companies as plaintiffs in the lawsuits.

U.S. District Judge Otis D. Wright called Monday's hearing so Hansmeier and his associates could tell their side of the story — but indicated that they could face severe sanctions if he didn't like their response.

In a motion filed late Friday, they argued that Wright lacks authority over them because a Californian handled the cases in that state. They also said they didn't have time to make travel arrangements and shouldn't have to pay for the trip.

Wright fumed when they failed to show, according to defense attorneys and reporters who packed the courtroom.

Defense attorney Morgan Pietz of Manhattan Beach, Calif., said the judge started the hearing by announcing he'd spent the weekend reading the transcript of Pietz's seven-hour deposition of Hansmeier. "There was so much obstruction in this deposition that it's obvious that someone has an awful lot to hide," Wright said, according to a legal blog called Popehat.com, which is following the controversy.

Heather Rosing, a legal malpractice specialist, appeared on behalf of Steele, Hansmeier and Chicago attorney Paul Duffy. Rosing said her clients were prepared to comment by phone. But Wright declined the offer and told her to sit down.

The judge said if her clients didn't want to appear, then he would conclude that his suspicions were accurate, "that this was a fraud on the federal courts," said Jason Sweet, a Massachusetts attorney who was present.

Hansmeier, Steele and Duffy did not respond to messages seeking comment.

The suits that sparked the controversy involve a practice known as copyright trolling, in which plaintiffs capture the Internet addresses of computers and routers used to download videos. They file lawsuits in an effort to compel Internet service providers to identify the subscribers, then send the subscribers letters demanding settlements of a few thousand dollars, noting that a violation carries potential fines of $150,000. Facing exposure and potentially expensive litigation, many subscribers pay up.

Hansmeier and Steele formed a partnership to pursue such cases and built a national reputation before selling their practice to Duffy's firm, Prenda Law, in late 2011.

Some judges, including Wright, have dismissed copyright trolling cases, ruling that the plaintiffs must show that the Internet subscriber actually did the downloading. Steele said that leaves copyright holders in a Catch-22 position and that most judges have allowed his clients to subpoena Internet service providers for the information.

Among those Wright summoned Monday was Alan Cooper of Isle, Minn., who took care of Steele's cabin in rural Aitkin County. Cooper alleged in a lawsuit in Hennepin County that Steele had used his name without his knowledge or permission as a business figurehead. Nick Ranallo, a University of Minnesota graduate who practices law in California, said Cooper was shown copyright assignments, but Cooper had denied signing them.

Brett Gibbs, an attorney who has filed dozens of copyright lawsuits in California, testified that he took directions from Steele and Hansmeier and that he had never met Cooper.

After nearly three hours of testimony, Wright took the matter under advisement, indicating he would issue an order later.

Dan Browning • 612-673-4493