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Duffy seeks dismissal of defendants' amended counterclaim in Prenda Law defamation suit

By Bethany Krajelis | Oct 29, 2013

Chicago attorney Paul Duffy has asked a federal judge to dismiss an amended counterclaim brought by the defendants in a defamation suit he brought earlier this year.

Duffy, the former sole officer of the now-dissolved Prenda Law firm, filed the motion today in Chicago’s federal court, asserting that the counterclaim should be dismissed because the defendants “fail to articulate a single basis upon which the Court may grant them relief.”

It appears that this motion was also attached to Duffy’s Oct. 22 request for an extension of time, in which he explained he was unable to submit his motion to dismiss by an Oct. 15 deadline due to “a legal emergency situation” he encountered in another pending federal matter.

In his motion to dismiss the amended counterclaim that Minnesota attorney Paul Godfread and his client, Alan Cooper, filed last month, Duffy states that “the number of examples of name-calling, ad hominem attacks, baseless sanctions motions and utter falsehoods in their papers is breathtaking.”

“Defendants repeat pejoratives ad nauseum as if repetition is a substitute for significance,” Duffy asserts, before saying “their allegations are to a great extent implausible and baseless conspiracy theories” and “their name-calling” is “unprofessional and unworthy of a Federal litigant.”

He adds, “While it is tempting to call Defendants and their counsel out on their misrepresentations to this Court, it should be unnecessary to reach that point because their Counterclaim should be dismissed.”

The recently-filed motion stems from separate defamation suits Duffy and Prenda Law filed against Godfread and Cooper earlier this year in the circuit courts of Cook and St. Clair counties.

The suits-- which accuse the two men, as well as 10 potential John Doe defendants, of making false and defamatory statements in a Minnesota lawsuit and on various websites --were removed to their respective federal courts and eventually consolidated in Chicago’s federal court.

In their amended counterclaim, Godfread and Cooper claim that the defamation suit was brought in retaliation for an identity theft suit they brought against Prenda Law and its principals earlier this year in Minnesota.

The identity theft suit focuses on allegations that Cooper’s name had been used as an officer of director of AF Holdings, a client of Prenda Law, without his knowledge or consent.

Cooper had served as a caretaker for property owned by John Steele, a former name partner of Steele Hansmeier in Chicago. That firm, according to the defendants’ filing, was the predecessor in interest to Prenda Law, which voluntarily dissolved in July.

In their amended counterclaim, the defendants assert that “As will become apparent, the appropriation of Cooper’s identity is but one instance in Prenda’s established pattern and practice of fraud and misappropriated identities.”

The defendants’ filing identifies the “key players and agents” of this “practice of fraud” as Duffy, Steele, Steele’s former law partner Paul Hansmeier and Mark Lutz, who the defendants note has been described as a paralegal for Prenda Law, as well as the CEO and manager of AF Holdings, among others.

The defendants contend that Duffy, Steele and Hansmeier are “responsible for directing the activities of Prenda Law and AF Holdings litigation through a retinue of misappropriated identities, aliases, shell corporations, sham plaintiffs, straw defendants and local ‘of Counsel’ attorneys.”

Their amended counterclaim includes counts under Minnesota’s Anti-SLAPP statute and for invasion of privacy, civil conspiracy, defamation and abuse of process.

Duffy, however, contends that while the defendants’ recent filing is styled as a “counterclaim, the document resembles nothing other than an empty screed.”

“The Defendants, consistent with the allegations in the complaint, provided the document to various vigilante Internet ‘blog’ posters (such as those that are Doe defendants in this case) devoted to harassing those who seek to enforce copyright property rights, the day they filed it,” Duffy asserts.

He adds, “So as a diatribe it has received much exposure among pro-infringement enthusiasts and is readily available worldwide to anyone with a computer, despite the fact that it is legally infirm.”

Duffy states in his motion to dismiss that the amended counterclaim “fails on many levels.”

“Perhaps most obviously,” Duffy claims, is that Godfread “fails to allege relevant facts relating to himself” and “simply seeks to stand in the shoes of Cooper for purposes of alleging claims.”

Because “Godfread has not alleged that he has suffered cognizable damages for which Plaintiff may be liable,” Duffy asserts that “he has no logical connection to the Counterclaims, and he lacks standing to bring any claim alleged in it.”

Referring to the dismissal of the defendants’ initial counterclaim, Duffy notes that “This is Godfread’s second go-around at trying to allege a claim in this case, and he has missed both times.”

As such, Duffy contends that U.S. District Judge John Darrah, who is presiding over the matter, should dismiss the counterclaim as it pertains to Godfread with prejudice.

In regards to Cooper, Duffy asserts that his claims fail as well.

Indeed, Cooper’s complaint is based upon his claims that John Steele (who is not a party here) misappropriated the use of his signature,” Duffy states in his motion. “While Cooper may (and has) filed a claim against Steele alleging damages for that, he has not articulated a basis for how Plaintiff can be liable for Steele’s alleged conduct.”

Duffy contends that Godfread and Cooper are trying to combine 12 separate entities “into a single, fictitious entity which they seek to swap out for the actual, named Plaintiff.”

In his motion, he identifies those 12 entities as: Prenda Law; Steele Hansmeier; Steele; Paul Hansmeier; Peter Hansmeier; Alan Mooney; Alpha Law Firm; Duffy Law Group, Law Offices of Paul Duffy; Anti-Piracy Litigation Group Inc.; AF Holdings LLC; and Ingenuity 13 LLC.

“Defendants have failed to allege facts to support such a bewildering matrix of vicarious liability among all those unrelated and separate entities, much less a basis to attribute all of their alleged conduct to Plaintiff. And their attempts are nonsensical,” the motion asserts.

Duffy claims there are no allegations in the amended counterclaim over conduct that can be “directly attributable to Plaintiff” and that the defendants have failed to show why he “should be held liable for the conduct they attribute to their 12-entity construct.”

He further claims that the actions the defendants are trying to attribute to him “are not a valid basis for any claim because they were statements or actions taken in connection with lawsuits pending in Federal courts, and there is no basis for liability on those grounds.”

To bolster his argument, Duffy points to the litigation privilege, which he says “bars claims against attorneys, and their clients, arising from actions taken in connection with initiation and prosecution of a lawsuit."

In regards to the defendants’ claim under the Minnesota’s Anti-SLAPP statute, Duffy contends that the statements at issue do not fall under the statue because they “bear no relationship, whatsoever, with any attempt to procure a favorable government result.”

He also contends that the defendants’ invasion of privacy claim, which focuses on the alleged misappropriation of Cooper’s name, fails because the allegations are attributed to Steele, who is not party to the suit, and not him.

In addition, Duffy claims that the defendants’ defamation count in their amended counterclaim fails because the litigation immunity doctrine provides privilege for claims made in court filings and proceedings.

As far as the defendants’ abuse of process claim, Duffy argues that while it alleges he brought the defamation suit in retaliation for the identity theft suit, “there is not a single factual allegation showing that Plaintiff’s purpose is other than what is stated in the Complaint: to stop Defendants from defaming him and to pay him damages.”

An Oct. 25 docket entry in the case shows that the defendants have until Nov. 19 to respond to the motion to dismiss their counterclaim and that Duffy has to reply by Dec. 6. It also shows that a Feb. 5 status hearing has been reset to Feb. 26.

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