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Well, well. Some Prenda supporters (shockingly, they exist) in our comments have been arguing that Judge Otis Wright’s order against Team Prenda is the sign of a rogue judge who will get overturned. Of course, similar actions underway in other district courts suggest otherwise. On top of that, it would appear that the 9th Circuit appeals court doesn’t seem too concerned about Judge Wright’s order on a first pass either. Late last week, Paul Hansmeier, one of the key Prenda players, asked the appeals court to delay the requirement to pay sanctions so that he could get a proper appeal together. Of course, perhaps rather than putting together 30 pages protesting about the sanctions, Hansmeier should have been putting together a real appeal (or, as it turns out, reading how to file a stay pending appeal). The filing is certainly amusing. He whines about the lack of due process and the possible “reputational injury” this might cause.
Morgan Pietz, the lawyer who has been opposing Prenda in this matter (and, obviously, who would receive the bulk of the attorney’s fees ordered), filed a very short and to the point brief saying he was actually fine with a stay on the payment, pending appeal, of course, but he wanted Hansmeier to first post a bond to show that the payment could be made. He also noted that he would have been happy to make this concession to Hansmeier if Hansmeier had just contacted him to let him know he was filing the brief requesting the stay. That’s actually kind of a key point. Judges generally want the various lawyers to talk to each other about what’s happening before surprise briefs are filed like this — and so pointing out that Hansmeier filed a 30 page brief asking for the stay without even letting Pietz know about it probably won’t be looked at too kindly by the court. As Pietz points out, there is very real concern about whether or not Prenda will ever actually pay up if they don’t put up a bond.
The need for a substantial bond to secure payment of costs and fees from
Prenda is not an idle request. Prenda Law, Inc. and its associated lawyers are an
organization that is rapidly falling apart. They have dismissed the vast majority of
their pending court cases across the country—cases which are their sole source of
revenue. Meanwhile, as the days go by, they are increasingly being hit with new
motions and orders to show cause for sanctions in various courts where they have
tried, with mixed success, to escape from the consequences of their actions. Further,
the lawyers and the entities involved here are likely the subject of potential criminal
investigations, including an IRS investigation, flowing from the court’s formal
referrals in the sanctions order below. In short, there may not be any solvent persons
around to collect from for much longer. Further, as will be detailed in briefing on
the merits, the lawyers’ interests in these cases (as well as their assets, one
presumes) are hidden behind a web of Nevis LLC’s and mysterious offshore trusts.
These are all complicated factual issues, with which the district court is already
familiar, which is why the district court should set the amount and terms of the bond
Pietz also points out that the “reputational harm” argument is silly, because everyone already knows about it.
Either way, the Appeals Court wasted little time in saying “no,” mainly because Paul Hansmeier, who presents himself as an accomplished lawyer, appears not to know the first thing about filing a stay pending appeal.
Appellant’s emergency motion for a stay of the district court’s May 6, 2013
sanctions order is denied without prejudice to renewal, if necessary, upon the filing
and disposition of such request in the district court. See Fed. R. App. P. 8(a)(1).
The rule in question says that if you’re going to ask for such a stay, you have to first ask in the district court, rather than going straight to the appeals court. I would imagine that if Hansmeier had talked to Pietz, Pietz might have made that point as well. The deadline to pay up is tomorrow, though now it seems like Hansmeier may need to go ask Judge Wright for a stay in the matter if he wants to avoid having to pay up.
Of course, that’s not the only trouble Hansmeier is facing from the 9th Circuit, who now appears rather aware of Hansmeier’s reputation. You may recall that Hansmeier has also been involved in the sketchy practice of protesting class action settlements in the hopes of getting paid off to go away (in one letter he directly asked for $30,000 to go away). The appeal of one of those class action settlement battles is happening in this very same 9th Circuit, and Hansmeier had applied to be admitted in the 9th Circuit, where he cannot currently practice. As pointed out by Popehat, the court has taken notice of Judge Wright’s order and told Hansmeier that he needs to clear up that before it will admit him. As Ken White noted:
In other words: no, Paul, you can’t have admission to the Ninth Circuit until this is cleared up, and we won’t let you represent a client before us in the interim.
Actions have consequences.
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