UNITED STATES DISTRICT COURTDISTRICT OF MINNESOTAAF Hodlings, LLC,Civil Nos. 12-1445 (JNE/FLN) 12-1446 (JNE/FLN)Plaintiff, 12-1447 (JNE/FLN) 12-1448 (JNE/FLN) 12-1449 (JNE/FLN)v.
ORDER
John Doe(s),Defendant(s). ___________________________________________________ Paul Hansmeier for Plaintiff Paul Godfread for Third Party Witness Alan Cooper
1
____________________________________________________ On September 30, 2013 the undersigned Magistrate Judge held an evidentiary hearing to investigate whether or not this Court was a victim of fraud. This order sets forth the Court’s findingsof fact based on the testimony elicited at the hearing and related papers. In short, the Courtconcludes that AF Holdings used fraudulent copyright-assignment agreements, attached to eachcomplaint in all five of the instant cases, in order to expedite discovery and leverage settlementagreements. The remedy for this fraudulent conduct is set forth in this order. This order also addresses Alan Cooper’s motion to intervene (ECF No. 44), AF Holdings’ motion to supplement the record (ECF No. 53) and AF Holdings’ motion to disqualify theundersigned Magistrate Judge (ECF No. 59). For the reasons set forth below, Cooper’s motion tointervene is
DENIED as moot
, AF Holdings’ motion to supplement the record is
GRANTED
, and
1
Alan Cooper was employed by John Steele as a caretaker for his cabin in northernMinnesota from 2006-2012.
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AF Holdings’ motion to disqualify the undersigned is
DENIED
.
I. PROCEDURAL HISTORY
In these five cases, AF Holdings—through its attorney Michael K. Dugas—attached acopyright-assignment agreement to each complaint. Each agreement was purportedly signed by AlanCooper on behalf of AF Holdings.
2
AF Holdings requested the extraordinary relief of expedited discovery in these cases on the basis that it was necessary to identify the individuals associated withthe IP addresses through which their copyrighted material was allegedly accessed unlawfully. ECF No. 4.
3
That motion was granted, under specific conditions. ECF No. 10. Among the conditionsimposed was a requirement that AF Holdings use any information disclosed in response to itssubpoena solely for the purpose of protecting its rights as set forth in the complaint. It was also acondition of the Court’s order that AF Holdings file under seal a copy of (1) any writtencommunication between AF Holdings and the John Doe(s) or (2) a transcript of any oralcommunication between AF Holdings and the John Doe(s). Between August 31, 2012 and February 26, 2013, all five cases were voluntarily dismissed.
4
The Court later learned, from sealed filings made pursuant to the Court’s August 3, 2012 order (ECF
2
The agreement attached as Exhibit B to the complaint in 12-cv-1445 and 12-cv-1448is for a copyrighted work called “Sexual Obsession” and the agreement attached asExhibit B to the complaint in 12-cv-1446, 12-cv-1447 and 12-cv-1449 is for acopyrighted work called “Popular Demand.”
3
Unless otherwise noted, all ECF citations in this order refer to the docket in case12-cv-1445.
4
The five cases were voluntarily dismissed on the following dates:12-cv-1445 on November 19, 2012; 12-cv-1446 on October 25, 2012; 12-cv-1447 on October 24,2012; 12-cv-1448 on August 31, 2012; and 12-cv-1449 on February 26, 2013.2
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No. 10), that four of the five cases settled for amounts ranging from $3,500.00 to $6,000.00.
5
On November 29, 2012, Alan Cooper—through a letter from his lawyer—sought leave from this Courtto file a motion to intervene regarding the alleged improper use of his name and signature by AFHoldings, LLC and Ingenuity 13, LLC. ECF No. 18 for 12-cv-1449. The Court expressly took noaction on that request. ECF No. 19 for 12-cv-1449. Several months later, this Court became aware of an order entered by Judge Otis Wright IIof the U.S. District Court in the Central District of California in a case called
Ingenuity 13, LLC v. John Doe
, 2013 U.S. Dist. LEXIS 64564, at *6-7 (C.D. Cal. May 6, 2013).
6
Like the five cases before this Court, the case before Judge Wright was a copyright infringement lawsuit in which the plaintiff— Ingenuity 13, LLC—attached a copyright-assignment agreement that purported to besigned by Alan Cooper. Judge Wright found that AF Holdings and Ingenuity 13 were off shoreentities formed at some point in 2010 and that they have no assets other than several copyrights to pornographic movies.
Id.
at 6.
7
Judge Wright also found that, through willing local counsel, the principals advanced a litigation strategy that involved monitoring BitTorrent download activity of their copyrighted material, recording associated IP addresses, filing suit in federal court and then
5
Settlementagreementswerereachedinallcasesexcept12-cv-1446.Incases12-cv-1445,12-cv-1447 and 12-cv-1448, settlement monies were to be paid to Prenda Law,Inc. In case 12-cv-1449, the settlement monies were to be paid to AF Holdings, LLC.
6
Judge Wright’s order includes a chart of relationships that he found between theattorneys and entities involved.
Ingenuity 13, LLC.
, LEXIS 64564 at *13.
7
Evidence from another case provides more information on the potential relationship between these entities and John Steele.
SeeFirst Time Videos, LLC. v. Paul Oppold
,Case No. 12-cv-01493, ECF No. 37, Attachments 1-29 (a forensic analysis suggestsSteele himself may have uploaded the copyrighted works to BitTorrent). 3
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