Problems pile up for Righthaven with new ruling

Legal problems are snowballing for Las Vegas copyright lawsuit filer Righthaven LLC, with a judge on Wednesday entering yet another judgment against the firm.

In Righthaven’s 2010 lawsuit against the Democratic Underground political website, U.S. District Judge Roger Hunt in Las Vegas granted a motion by the Democratic Underground that final judgment be entered against Righthaven.

For several reasons, the Democratic Underground suit was the most significant case in Righthaven’s lawsuit spree involving 275 suits filed during the past two years.

Righthaven filed no-warning lawsuits in three states over alleged online infringements of material from the Las Vegas Review-Journal and the Denver Post — but the company is now moribund after a series of legal defeats in which judges found it lacked standing to sue or that defendants were protected by fair use in using material from the papers.

It was the Democratic Underground case where Righthaven was first found to lack standing to sue.

Despite Righthaven’s claims it owned the material it was suing over, Democratic Underground attorneys at and affiliated with the Electronic Frontier Foundation (EFF) in San Francisco unearthed Righthaven’s lawsuit contract with the Review-Journal that showed Righthaven had obtained only the right to sue over the material and didn’t really own it.

This caused Hunt in June to dismiss Righthaven from its own lawsuit as copyright plaintiffs have to own more than the right to sue.

The judge also fined Righthaven $5,000 in the Democratic Underground case for misleading the court about its lawsuits and suggested Righthaven had been practicing law without a license.

Later, in a Democratic Underground counterclaim against Stephens Media LLC, owner of the Review-Journal, Stephens Media didn’t contest a finding that the Democratic Underground was protected by the fair use doctrine in the incident that prompted the Righthaven lawsuit.

That was a Democratic Underground website user’s post of just the first four paragraphs of a 34-paragraph R-J story.

The counterclaim said Righthaven’s lawsuit was based on a sham copyright assignment from Stephens Media to Righthaven. The family of Arkansas investment banking billionaire Warren Stephens owns both Stephens Media and half of Righthaven.

Significantly, Hunt found Wednesday that his ruling from June dismissing Righthaven from its own lawsuit for lack of standing “was a dismissal on the merits” and Righthaven’s dismissal from the suit was with prejudice.

In asking Hunt to enter judgment against Righthaven with prejudice, Democratic Underground attorneys wrote in a court filing, “Righthaven lost because it did not own any of the exclusive (copyright) rights.”

“Ownership is a required element of the merits of the copyright claim. Ownership is also intertwined with the issue of standing to sue on that copyright, because, without ownership, Righthaven cannot have the injury in fact necessary for standing,” their legal brief said.

It’s unclear why Hunt’s order granting judgment against Righthaven was delayed. The Democratic Underground asked for the order in October; Righthaven didn’t oppose it.

Nevertheless, Wednesday’s order was a setback for Righthaven, which has been arguing that judges finding it lacked standing aren’t ruling on the underlying copyright claims and can’t award defendants their attorney’s fees.

Righthaven even appealed one of Hunt’s rulings preventing it from participating again in its own lawsuit, but Righthaven then missed the deadline to file the opening brief in that appeal with the 9th U.S. Circuit Court of Appeals.

The language in Hunt’s order Wednesday means the Democratic Underground can petition the court for an award of its attorney’s fees, which are likely to run into the hundreds of thousands of dollars, given that the case was extensively litigated.

Despite claims of poverty by Righthaven, an attorney for the Democratic Underground said Wednesday that the group plans to seek recovery of the legal fees racked up in beating back the Righthaven lawsuit.

“Given the circumstances of the case, we believe that such a motion should be granted,” said Kurt Opsahl, an EFF attorney in San Francisco.

In another Righthaven suit that Righthaven lost against former federal prosecutor Thomas DiBiase, Opsahl has been trying to get Righthaven to turn over its financial records so the EFF can see if it has any assets to cover DiBiase’s $119,488 judgment against Righthaven for his legal fees.

When Righthaven failed to comply with a court order to turn over the records, it was given until March 16 to show cause why it should not be held in contempt of court and sanctioned.

Opsahl is hoping the court requires Righthaven CEO and Las Vegas attorney Steven Gibson to pay any sanctions, as previous efforts to get Righthaven to comply with court orders haven’t been fruitful.

“Hopefully the court’s order to show cause on contempt will provide the right incentive for Righthaven and its CEO Steven Gibson to start obeying court orders,” Opsahl said Wednesday.

Wednesday’s order by Hunt is just the latest in a series of setbacks Righthaven has sustained in recent days.

Since Thursday, two Nevada judges have dismissed 12 of its lawsuits because of lack of standing. Righthaven missed a deadline to file a key brief in the 10th Circuit Court of Appeals in Denver, and a judge in Nevada stripped the company of any interest it has in its 278 federal copyright registrations and its trademark.

Gibson and Shawn Mangano, Righthaven’s outside attorney in Las Vegas, haven’t responded to requests for comment on these problems this week.

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