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Judge grants defendants' motion for sanctions in Prenda defamation suit

By Bethany Krajelis | Jan 23, 2014

The now-dissolved Prenda Law firm and its attorney are facing more sanctions after a federal judge in Chicago approved the request from the defendants in a defamation suit.

U.S. District Judge John Darrah at a brief status hearing today granted the motion for sanctions that defendants Paul Godfread and Alan Cooper filed this past fall against Prenda and Paul Duffy, who served as the firm’s sole officer before it dissolved and now serves as its attorney in the matter.

Following his verbal ruling on the sanctions motion, Darrah asked the defendants’ attorney, Erin Russell, to submit a list of itemized fees to the court by Feb. 6, presumably to help him come up with a dollar figure to attach to his decision.

Duffy did not attend today’s hearing in person, but did participate via telephone. After Darrah announced his decision, he told Duffy he could file a response to Russell’s submission, to which Duffy responded, “I would like to, your honor.”

Darrah gave Duffy until Feb. 20 to respond, set a Feb. 27 deadline for Russell to reply and scheduled a June 12 status hearing in the case. He also denied Duffy's motion seeking leave to file a surreply to the defendants’ reply in support of their motion for sanctions.

Godfread, a Minnesota attorney, and his client, Cooper, also of Minnesota, as well as 10 potential John Doe defendants, were sued by Prenda and Duffy last year in a pair of defamation suits brought in the circuit courts of Cook and St. Clair counties.

The lawsuits accuse them of making false and defamatory statements in a separate lawsuit and on various websites. The defendants, however, claim they were sued in retaliation for filing an identity theft suit in Minnesota against Prenda and its principals.

The identity theft suit stems from Cooper’s allegation that his name was used as an officer or director of AF Holdings without his knowledge or consent.

AF Holdings is one of Prenda’s clients that a few federal judges have dubbed as a shell corporation, created by the plaintiffs’ attorneys in order to file hundreds of copyright infringement and computer hacking cases across the nation.

Some of the attorneys representing the John Does in these suits, which only identify them by their Internet Protocol (IP) addresses, accuse Prenda of engaging in a scheme that attempts to extort settlements out of defendants by threatening to name them in a lawsuit over illegally downloaded pornography.

Besides Duffy, John Steele and Paul Hansmeier of the now-dissolved Steele Hansmeier firm in Chicago are considered to be key players behind Prenda.

Courts in California, Illinois and Minnesota have sanctioned Prenda and some of its associated attorneys. It appears that most, if not all, of the sanction orders have been appealed.

The defamation suits that Duffy and Prenda brought against Godfread and Cooper were eventually removed to their respective federal courts and consolidated this past summer in Chicago’s federal court before Darrah.

At an August hearing, Darrah asked Russell if she would like to file a Rule 11 petition, which allows courts to impose sanctions on attorneys, law firms and parties if it is determined they made misrepresentations to the court

Russell, who is representing the defendants along with Massachusetts attorney Jason Sweet, said after that hearing, “When a judge invites a party to file a Rule 11 petition, it seems like the court believes misrepresentations have been made.”

In September, Russell and Sweet filed a motion for sanctions, in which they accused Prenda and Duffy of “lying to court officials, presenting false documents … and at all times following a course of action from which any reasonably prudent attorney would run.”

“They have been brazen in their willingness to test the Court’s tolerance for this conduct, as well as Defendants’ determination to bring that conduct to light before the Court,” the defendants’ motion for sanctions stated.

In response, Duffy wrote in a September filing that the defendants' motion seeking sanctions against him and Prenda "is a quagmire, short on substance and made up almost entirely of invective, pejoratives, and ad hominem attacks."

He also asked Darrah in his response to award Prenda Law the costs and fees it has spent on defending itself against the defendants’ sanctions motion, which Duffy calculated as $16,294.43 at the time.

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