Righthaven defendant threatens to seek settlement refunds

By Steve Green

Sunday, Feb. 27, 2011 | 2:51 p.m.

A South Carolina woman sued by Las Vegas copyright enforcer Righthaven LLC escalated her counter-attack on Sunday, arguing Righthaven should refund hundreds of thousands of dollars it has obtained in dozens of lawsuit settlements worldwide since May.

Attorneys for the woman, Dana Eiser, based their refund claim on charges that Righthaven in its lawsuits regularly threatens to seize the website domain names of defendants -- and that this demand is improper and is used to coerce defendants into settling.

Eiser also released emails in which an attorney for Righthaven gave Eiser the opportunity to settle by paying Righthaven $15,000. Eiser's attorneys rejected this demand and instead gave Righthaven the chance to settle by paying Eiser $250,000.

No settlement was reached, Eiser's attorneys hit Righthaven with a counterclaim on Friday and on Sunday her attorneys sent Righthaven a "consultation" motion for sanctions that included the threat that Righthaven either drop its domain-name seizure demand against Eiser, or Eiser's attorneys would file the motion for sanctions with the Charleston, S.C., federal court.

Righthaven is the copyright enforcement partner of the Las Vegas Review-Journal and the Denver Post. Since March 2010, it has filed at least 239 lawsuits against website operators and message-board posters in the United States, Canada and Europe charging material from those newspapers was posted online without authorization. Righthaven has also obtained copyrights to two porn movies, but as of late last week hadn't sued anyone over those films.

The suits over Review-Journal and Denver Post material lately have demanded statutory damages of $150,000 apiece and have attracted attention in media and legal circles since they're a departure from the usual newspaper industry practice of requesting that infringing material be taken down and/or be replaced with links. Righthaven has insisted these takedown requests have been ineffective in deterring rampant online infringement of newspaper material.

Since May, about 110 of Righthaven's suits have been settled or closed under generally undisclosed terms. The only publicly-disclosed settlements involved two cases and were for $2,185 and $5,000. Based on the volume of settlements, it's likely Righthaven has generated hundreds of thousands of dollars in settlements.

The other lawsuits are being litigated, are in the settlement stage, involve defendants who haven't been served or involve defendants who were served and then defaulted by not answering the lawsuits.

Eiser, of Summerville, S.C., was sued after a Denver Post column, "A letter to the Tea Partyers," was posted on her nonprofit website.

The column at issue can be read for free on the Denver Post website.

In their counterclaim, four attorneys for Eiser said the post on her site was protected by the fair use doctrine and the First Amendment, among other things. They said the Denver Post had offered online tools to link, share and email the column to more than 330 websites and social media outlets including Facebook, Myspace, Digg and Google Buzz.

The counterclaim accused Righthaven of violating South Carolina's Unfair Trade Practices Act by suing Eiser, charging Righthaven had committed unfair and deceptive acts by wrongly branding Eiser as a copyright infringer.

In a "consultation" motion for sanctions sent to Righthaven on Sunday, Eiser's attorneys challenged Righthaven's standard lawsuit demand that the domain name registrar for Eiser's website "lock the domain and transfer control of the domain to Righthaven."

Eiser's attorneys said there's no provision in the Copyright Act for such a domain name transfer.

Righthaven in another case has already conceded this, but insists its demands are proper as a matter of equity.

"If Congress had intended to authorize website seizures as remedies for copyright infringement, the law would reflect that intention. It does not," Sunday's motion said.

"Righthaven’s sole reason for demanding control of defendants' websites is for leverage in settlement negotiations. Righthaven’s business model depends upon leveraging monetary settlements from defendants unable to afford the cost of defending the lawsuit or unwilling to risk the uncertainty of litigation even given the frivolous nature of Righthaven’s claims," Eiser's motion says. "The vast majority of Righthaven’s targets are pro se (not represented by attorneys) and unaware that Righthaven’s demand for website surrender is improper and wholly unsupported by law.

"Righthaven’s reason for advancing this demand is to take advantage of the legal ignorance of unrepresented individuals so as to aid the Righthaven business model of leveraging cost-of-defense settlements in frivolous lawsuits," the filing said.

Eiser's attorneys threatened to ask the court, as a sanction, to:

• Require Righthaven to amend all its pending lawsuits to delete or waive the domain name seizure demand

• And, "That Righthaven refund all settlement funds received from defendants in copyright infringement cases where the improper website-surrender demand appeared in the complaint and was not removed, dismissed or stricken prior to settlement."

Eiser also released emails between Righthaven's attorneys and one of her attorneys.

These show Eiser's attorneys intend to depose executives at Righthaven; Review-Journal owner Stephens Media LLC, whose parent company has invested in Righthaven; the Denver Post and its parent MediaNews Group, which says it's the second-largest media company in the United States; and WEHCO Media Inc., an Arkansas-based newspaper chain that owns the Arkansas Democrat-Gazette in Little Rock and the Chattanooga Times Free Press in Tennessee, among other papers

WEHCO has an alliance in Arkansas with Stephens Media. Last year, WEHCO announced it was working with Righthaven, but through late last week Righthaven had not filed any lawsuits over WEHCO material.

Deposition subjects in the Eiser case include Las Vegas attorney Steven Gibson, co-owner of Righthaven and a member of the Detroit-based law firm Dickinson Wright PLLC; and William Dean Singleton, chairman of the board of directors of The Associated Press and chairman and CEO of MediaNews Group.

Under a plan announced last month, Singleton plans to step down as MediaNews CEO and become its executive chairman.

Righthaven has not yet responded to Eiser's counterclaim or her "consultation" motion for sanctions.

***

E-mails released by Dana Eiser:

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From: Ikenna Odunze (Righthaven attorney)

Sent: Friday, February 25, 2011 1:00 PM

To: Todd Kincannon (Eiser attorney)

Cc: Anne Pieroni; Steven Ganim (Righthaven attorneys)

Subject: RE: CONFIDENTIAL: Righthaven v. Eiser; 2:10-cv-3075-RMG

The following correspondence is sent pursuant to FRE 408 and all other applicable law/rules protecting the confidentiality and inadmissibility settlement discussions/correspondence. This correspondence is sent FOR SETTLEMENT PURPOSES ONLY.

Dear Mr. Kincannon et al:

1. I am in house counsel for Righthaven and will work with attorney Anne Pieroni, attorney Steve Ganim and our local counsel on this matter. Righthaven Attorney, Anne Pieroni forwarded me your email correspondence hereunder which email references an interest by you, "in negotiating a resolution". Could you kindly apprise me of a conducive time to contact you telephonically concerning resolution or if you prefer we can continue to communicate by email;

2. I must apprise you that Righthaven will not dismiss the action, unless there is proper basis, grounds and authority for a dismissal (which is there is not) or if the Parties come to a negotiated compromise;

3. Kindly convey to the Defendant(s) that you represent in this matter, that Righthaven makes an offer to compromise and fully settle this matter for $15,000.00 to be paid in two payments over a two (2) month period, first payment within five days of the effective date in a finalized agreement, drafts to be completed/finalized within one week from acceptance by the Defendant(s) of this offer, confidentiality of agreement, an agreement to no longer infringe and standard Righthaven terms & conditions to apply. THIS OFFER IS OPEN UNTIL 5:00 pm. Standard Pacific Time today Friday February 25, 2011.

4. Please also kindly convey to the Defendant(s) that you represent in this matter, as alluded, that Righthaven is willing to engage in reasonable settlement negotiations.

Warmest regards,

Ikenna-Phillip Odunze

In House Attorney

Righthaven llc

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From: Todd Kincannon

Sent: Friday, February 25, 2011 7:43 PM

To: Ikenna Odunze

Cc: Jared Libet, Thad Viers, Bill Connor (Eiser co-counsel); Edward Fenno, Anne Pieroni; Steven Ganim

Mr. Odunze:

Given the absurdly frivolous nature of your claims, it is our preference that communications be in writing. I have communicated your demand to Dana Eiser, who has rejected it. By the way, it is unnecessary to use "all caps" in text you send me by email. I am quite capable of reading and comprehending English text written using standard capitalization. I would also note that while your settlement demand is potentially inadmissible evidence under the Federal Rules of Evidence in certain contexts, it is in no way confidential.

It amazes me that you have engaged in these communications without even copying your local counsel on the email chain. I have added him to this response as a matter of courtesy, and also because I believe he would be wise to put his firm’s insurance carrier on notice of the potential for claims we are likely to assert against him as a result of his participation in this matter.

At this point, I am authorized to make a counter-demand on Righthaven LLC for full and final settlement of this matter. Upon the receipt of $250,000 in certified funds and the execution of a satisfactory mutual release, we will not pursue our counterclaims against Righthaven, its members, its business partners, or its attorneys or other agents. In recognition of the generous amount of time you provided us to consider your settlement demand, please be advised our demand will remain open until 11:30 p.m. tonight, Eastern Time, approximately five hours from now.

As I briefly mentioned above, I would also recommend that Righthaven LLC, its members, you, Ms. Pieroni, Mr. Ganim, Mr. Fenno (Righthaven's local South Carolina counsel Edward Fenno), and the Fenno Law Firm, LLC put any applicable insurance carriers on notice of the potential for third party claims and claims for sanctions arising from the matters associated with this lawsuit. It should not be too difficult to discern our litigating position from the Amended Answer and Counterclaim you all will shortly receive.

Welcome to South Carolina litigation, and let me be the first to say good luck. You all are definitely going to need it.

Todd Kincannon