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Chowdhury. Doc 30. Exhibit A

Chowdhury. Doc 30. Exhibit A

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Published by simality
A copy of the latest Report and Recommendations doc from the Navasca case.
A copy of the latest Report and Recommendations doc from the Navasca case.

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Published by: simality on Sep 23, 2013
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09/23/2013

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EXHIBIT A
Case 1:12-cv-12105-JLT Document 30-1 Filed 09/23/13 Page 1 of 19
 
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 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIAEUREKA DIVISIONAF HOLDINGS LLC,Plaintiff,v.JOE NAVASCA,Defendants.Case No.12-cv-02396-EMC (NJV)
REPORT AND RECOMMENDATIONON
DEFENDANT’
S MOTION FOR SANCTIONS
Re: Dkt. No. 93
The district court referred defendant Joe Navasca‟s motion for sanctions against attorneys
John Steele and Paul Hansmeier to the undersigned for a report and recommendation. Doc. No.96. Based on the papers filed in this matter, the arguments of the parties, and the evidence produced at the hearing, and for the reasons set forth below, the court recommends denying
 Navasca‟s motion for sanctions
and issuing an order to show cause why the judgment for 
attorneys‟ fees and costs should not be amended to add Steele and Hansmeier as debtors
.
BACKGROUND
Plaintiff AF Holdings LLC (“
AF
”)
is an entity that purports to own the copyrights tovarious adult films. Some of these adult films have been uploaded to BitTorrent, a file-sharingsite, and then reposted and/or downloaded by others. AF has filed hundreds of copyrightinfringement lawsuits against thousands of John Does whom (AF alleges) illegally downloaded itscopyrighted property. Judge Wright, who presided over one of these infringement actions in theCentral District of California, made the following findings of fact:1. Steele, H
ansmeier, and Duffy (“Principals”) are attorneys
with shattered law practices. Seeking easy money, they conspired tooperate this enterprise and formed the AF Holdings and Ingenuity
Case3:12-cv-02396-EMC Document116 Filed09/16/13 Page1 of 18
Case 1:12-cv-12105-JLT Document 30-1 Filed 09/23/13 Page 2 of 19
 
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13 entities (among other fungible entities) for the sole purpose of litigating copyright infringement lawsuits. They created the entitiesto shield the Principals from potential liability and to give anappearance of legitimacy.2. AF Holdings and Ingenuity 13 have no assets other thanseveral copyrights to pornographic movies. There are no officialowners or officers for these two offshore entities, but the Principalsare the de facto owners and officers.4. . . . . Most defendants settled with the Principals, resulting in proceeds of millions of dollars due to the numerosity of defendants.These settlement funds re
sided in the Principals‟
accounts and not inaccounts belonging to AF Holdings or Ingenuity 13. No taxes have been paid on this income.5. For defendants that refused to settle, the Principals engagedin vexati
ous litigation designed to coerce settlement…
 6. The Principals have shown little desire to proceed in theselawsuits when faced with a determined defendant. Instead of litigating, they dismiss the case. When pressed for discovery, thePrincipals offer only disinformation
 – 
even to the Court . . .8. The Principals maintained full control over the entirecopyright-litigation operation. The Principals dictated the strategy toemploy in each case, ordered their hired lawyers and witnesses to provide disinformation about the cases and the nature of their operation, and possessed all financial interests in the outcome of each case.9. The Principals stole the identity of Alan Cooper . . . ThePrincipals fraudulently signed the copyright assignment for 
Popular Demand
using Alan Cooper's signature without his authorization,holding him out to be an officer of AF Holdings. Alan Cooper is notan officer of AF Holdings and has no affiliation with Plaintiffs other than his employment as a groundskeeper for Steele. There is noother person named Alan Cooper related to AF Holdings or Ingenuity 13.11. Plaintiffs have demonstrated their willingness to deceive not just this Court, but other courts where they have appeared.
Plaintiffs‟ representations about the
ir operations, relationships, andfinancial interests have varied from feigned ignorance tomisstatements to outright lies. . .
 Ingenuity 13 v. Doe
, 2013 U.S. Dist. LEXIS 64564 at *2-3 (C.D. Cal. May 6, 2013)
(“
 Ingenuity13
”)
. As discussed further below,
the undersigned adopts Judge Wright‟s findings.
See infra
at10-12.AF filed the case at bar, asserting
it was the “exclusive holder of the relevant rights withrespect to” an adult video title
 
(the “Video”)
,
after receiving the rights
 
to this Video pursuant to
Case3:12-cv-02396-EMC Document116 Filed09/16/13 Page2 of 18
Case 1:12-cv-12105-JLT Document 30-1 Filed 09/23/13 Page 3 of 19

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