Eiser's Amended Response to Righthaven's Motion to Dismiss (Righthaven LLC v. Dana Eiser

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UNITED STATES DISTRICT COURT DISTRICT OF SOUTH CAROLINA

CHARLESTON DIVISION

Righthaven LLC,

Plaintiff,

v. Dana Eiser,

Defendant.

Civil Action No. 2:10-CV-3075-RMG-JDA

DEFENDANT’S A M E ND E D

R ESPO NSE TO PLAINTIFF’S M O T I O N T O DISM ISS

C E R T A IN C O UN T E R C L A I MS

I . IN T R O DU C T I O N

Plaintiff initiated this action with its Complaint, Dkt. #1, on December 2, 2010.

Defendant answered and counterclaimed pro se on January 18, 2011. Dkt. #7. Plaintiff failed to

file a reply or move to dismiss within the time limits of Rule 12(a), FED.R.CIV.P., and went into

technical default in mid-February—around the time Defendant retained counsel. Counsel elected

not to pursue the default but instead to file an Amended Answer and Counterclaims (“First

Amended Answer”) as of right under Rule 15(a)(1), FED.R.CIV.P. Dkt. #22.

Plaintiff timely responded, filing a motion to dismiss. Dkt. #23.1 Around this time,

Plaintiff also sought to amend its Complaint to remove an improper demand for website

surrender. Dkt. #30. Plaintiff’s motion was unopposed and was granted. Dkt. #33. As a result, it

was clear Defendant would have to file a second amended answer and counterclaim, so

Plaintiff’s motion to dismiss was moot. Defendant therefore did not file a substantive response to

the motion to dismiss, but noted its mootness given the procedural posture. Dkt. #28.

1 Plaintiff’s aggression in the motion to dismiss is almost unbelievable. For example, Plaintiff asks the Court to strike the answer and counterclaim entirely (and to hold Defendant in default) because the First Amended Answer was untimely filed. Dkt. #23 at 1. This claim was entirely without merit—the reason Defendant was able to file an amended pleading as of right was that Plaintiff was in default, a default Defendant did not pursue.

2:10-cv-03075-RMG -JDA Date Filed 07/11/11 Entry Number 62 Page 1 of 34

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Two days after the Court granted Plaintiff’s motion to amend, instead of filing an

amended complaint as directed, Plaintiff bizarrely pressed for a ruling on its now-moot motion to

dismiss. Dkt. #34. Proving that no good deed goes unpunished, despite Defendant’s decision to

not pursue a default against Plaintiff, Plaintiff went so far as to argue that Defendant’s plan to

file a new answer and counterclaim in response to Plaintiff’s new complaint was “tantamount to

a concession that the current Counterclaims should be dismissed.” Id. at 2.

Defendant replied that this procedure was exactly what the Federal Rules of Civil

Procedure required under Rule 15(a)(3), and that if Plaintiff wanted to seek dismissal, it would

have to wait until Defendant had actually filed counterclaims. The Court agreed with Defendant,

holding a ruling on the motion to dismiss in abeyance until an answer had been filed. Dkt. #35.

Defendant filed her Second Amended Answer and Counterclaims (“Second Amended

Answer”) on June 23, 2011. Dkt. #53. The Second Amended Answer is a far different and far

more comprehensive document than its predecessor, such that the long-ago filed motion to

dismiss is partly inapplicable to it. However, Plaintiff did not file a reply or a new motion to

dismiss within the time limits prescribed by Rule 15(a)(3), so Defendant concludes that Plaintiff

intends to rely solely on the previously-filed motion to dismiss, Dkt. #23.

Accordingly, it would appear Defendant is now on the clock for a substantive response to

the previously-filed motion to dismiss, Dkt. #23. Such response is respectfully submitted for

consideration by this Honorable Court:


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T A B L E O F C O N T E N TS

Table of Authorities .......................................................................................................................3

I . Introduction ...........................................................................................................................1

I I . Analysis ..................................................................................................................................5

A. General Considerations .................................................................................................5

B. What is—and is not—at issue ........................................................................................8

C. Removed Counterclaims: Declaratory Judgment, Barratry, and No Good Faith Basis .....................................................................................................................9

D. Abuse of Process ..........................................................................................................12

i. ULTERIOR PURPOSE .............................................................................................12

ii. WILLFUL ACT IN THE USE OF PROCESS NOT PROPER IN THE REGULAR CONDUCT OF THE PROCEEDING ............................................................................16

iii. EVIDENCE OF RIGHTHAVEN’S ACTIONS IN OTHER CASES ....................................21

iv. OTHER CONSIDERATIONS .....................................................................................22

E. Unfair Trade Practices ................................................................................................23

i. LOSS OF MONEY OR PROPERTY ............................................................................24

ii. UNFAIR OR DECEPTIVE METHOD, ACT, OR PRACTICE ..........................................27

iii. CONSTITUTIONAL ACTUAL MALICE .....................................................................30

iv. PUBLIC INTEREST .................................................................................................30

F. Civil Conspiracy ..........................................................................................................32

I I I . Conclusion ...........................................................................................................................33


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T A B L E O F A U T H O RI T I ES

Enactments

Local Civil Rule 7.05 .....................................................................................................................26

Rule 11, FED.R.CIV.P .....................................................................................................................17

Rule 12, FED.R.CIV.P ............................................................................................................. passim

Rule 15, FED.R.CIV.P ................................................................................................................... 1-2

Rule 403, FED.R.EVID ....................................................................................................................22

Rule 404, FED.R.EVID .............................................................................................................. 21-22

Federal Cases

Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) ..................................................................................5, 22

Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) ....................................................................5

State Cases

Austin v. Stokes-Craven Holding Corp., 691 S.E.2d 135 (S.C. 2010) ..........................................33

deBondt v. Carlton Motorcars, Inc., 536 S.E.2d 399 (S.C. Ct. App. 2000) ..................................25

Food Lion, Inc. v. United Food & Commercial Workers Int’l Union, 567 S.E.2d 251 (S.C. Ct. App. 2002)...........................................................................................23

Huggins v. Winn-Dixie Greenville, Inc., 153 S.E.2d 693 (S.C. 1967) .................................... 12-13

Jeffries v. Phillips, 451 S.E.2d 23 (S.C. Ct. App. 1994) ................................................................31

Mull v. Ridgeland Realty, LLC, 693 S.E.2d 27 (S.C. Ct. App. 2010) ..........................................26

Roddey v. NationsWaste, Inc., 05-UP-472 (S.C. Ct. App. filed July 28, 2005) ............................26

Swicegood v. Lott, 665 S.E.2d 211 (S.C. Ct. App. 2008) .......................................................13, 16

Technical Computer Services, Inc. v. Buckley, 844 P.2d 1249 (Colo. Ct. App. 1992) ............................................................................................................................... 25-26

Todd v. S. Carolina Farm Bureau Mut. Ins. Co., 278 S.E.2d 607 (S.C. 1981) ..............................33


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I I . A N A L YSIS

A . General Considerations

This case is an unusual one. Under Defendant’s theory of the case, Righthaven is a

nationwide extortion operation that operates by lying to the federal judiciary and to its targets,

falsely claiming ownership of copyrights so as to leverage settlement payments out of those

targets. Many of the methods it uses to accomplish the leveraging are independently illegal in

and of themselves.

While a 12(b)(6) motion only looks to the sufficiency of the allegations and not to their

truth, it cannot escape notice that Defendant’s theory of the case isn’t mere conjecture, an

educated guess, or even a solid inference based on circumstantial evidence. Given the

developments of recent weeks in other Righthaven cases, Defendant’s theory is an inevitable

conclusion drawn from indisputable facts. Many of these facts appear in judicial orders and

many of the rest are established by Righthaven’s own documents. In large measure, the factual

allegations appearing in the Second Amended Answer are no longer allegations but are now

established facts of this case.

Righthaven’s motion to dismiss makes two types of arguments against the counterclaims.

First, Righthaven makes the now-standard Twombly-Iqbal argument, but that is off the table

given Defendant’s factually-expansive Second Amended Answer. The second type of argument

is in the nature of an affirmative defense: “Even if we did it, you can’t sue us for it.” Before

plunging into the nitty-gritty of elements of causes of action, Plaintiff’s argument deserves

consideration in light of basic principles of tort law.

Tort law is often defined as what it isn’t, i.e. a claim for damages not premised on a

contract. But it is far more than that. The law of tort presumes that people living together in a


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civil society owe each other a duty to not harm one another. And just as equity will not suffer a

wrong to be without a remedy, so too does tort law adapt to cover new situations where creative

would-be tortfeasors try to rely on technicalities to avoid liability.

That is precisely what Righthaven aims for in this case and others. Righthaven is well

aware of the natural judicial tendency to give litigants a wide berth based on their litigation

conduct. In fact, Righthaven has relied on that wide berth to do things that are absolutely

unfathomable to ethical members of the Bar.2 This claim is not intended to be pejorative or

uncivil, it is simply the natural and proper conclusion to be drawn from the established facts of

this case, and it is highly relevant in the context of a 12(b)(6) motion directed at state-law

counterclaims which are partly based on wrongful litigation conduct.

This is not puffery, and counsel for the Defendant genuinely fear offending the Court

with accusations of this nature. Lawyers rarely accuse one another of improper litigation

conduct, and rightly so—most lawyers don’t engage in it. But just as Righthaven exploits judicial

grace, so too does it exploit judicial skepticism that comes with accusations of this type. But

undersigned counsel can find no way to sugarcoat the truth of what Righthaven does without

Righthaven turning it around as argument in support of dismissal.

There are innumerable reported cases in every jurisdiction where a court goes through a

formulaic recitation of the ways a litigant can be held liable for litigation conduct before finding,

on those facts, no liability. There is a night-and-day difference between those cases and this one.

Here, Righthaven has violated multiple criminal statutes and ethics rules, lied to courts,

committed perjury, made all manner of frivolous arguments, used baseless threats of sanctions—

and actual sanctions motions—to intimidate opposing parties, and intentionally and recklessly

2 As Defendant has noted in other contexts, no criticism of Righthaven’s current counsel, Edward Bertele, is intended.


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disregarded practically every principle that in any way prohibits or restrains improper conduct in

litigation.

As just one brief example from this very case, consider the following representation

Righthaven’s prior counsel made in the motion to dismiss. This was written in March, before

Righthaven’s client agreements had been made public over their strenuous objections:3

[B]ecause Righthaven is a party to the case and asserts an interest in the copyright at issue, Righthaven cannot be assisting another in prosecuting a suit. Righthaven simply is bringing a suit on its own behalf to enforce its rights in its copyright.

Dkt. #23-1 at 16 (emphasis in original).

Consider this in light of the just-released MediaNews Group agreement, a “Copyright

Alliance Agreement” providing that MediaNews Group has “engage[d]” Righthaven to “take an

Infringement Action against relevant Infringers” and return 50% of the net recovery to

MediaNews Group. See Dkt. 61-1 at 14 (defining engagement); at 9 § 1 (“take an Infringement

Action. . .”); and at 6 § 7 (50% contingency provision).

There is no room for euphemism here. Righthaven’s representation to this Court is a

bald-faced lie. Righthaven had been hired by MediaNews Group to file copyright cases on

contingency while simultaneously telling this Court—and others—that “Righthaven cannot be

assisting another in prosecuting a suit. Righthaven simply is bringing a suit on its own behalf to

enforce its rights in its copyright.” And as to the added emphasis on “another,” well, res ipsa

loquitur.

Righthaven is a litigant thoroughly unbound by the slightest duty of candor to the

tribunal. Righthaven has pursued this strategy of dishonesty before this Court just as it has in

3 The Stephens Media agreement, Dkt. #60-1, was unsealed in mid-April; the MediaNews Group agreement, Dkt #61-1,was released this past Friday, July 8th.


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Nevada and Colorado. In one sense all such lies are equal, but as Orwell would say, some are

more equal than others.

Righthaven is not a business owner sued vicariously, lying to avoid a back-breaking

verdict that will keep his kids from going to college. Righthaven is not a criminal defendant

desperate to avoid a lengthy prison term over an uncontrollable drug addiction. Righthaven is not

an embarrassed spouse committing perjury to hide adultery. Those lies are at least

understandable, though by no means acceptable.

But Righthaven’s lies aren’t for self-protection—their sole purpose is to separate other

people from their money. The lies worked for a while, but now the jig is up. And for all

Righthaven’s claims of a new and innovative business model, the reality is that Righthaven is

just a gang of con artists, and bad ones at that.

This brand of fraudulent, intentional misconduct usually opens the door to liability on

quite a few different theories, and the Second Amended Answer asserts a large number of them.

However, the motion to dismiss is applicable only to three: abuse of process, unfair trade

practices, and civil conspiracy. The reasons the motion should be denied are presented as

follows. Defendant also respectfully submits that there are far more facts pled in the Second

Amended Answer than are analyzed below. Defendant has chosen to focus on the matters below

because they can be presented with the most clarity.

B . What is—and is not—at issue.

Plaintiff’s motion to dismiss, also captioned as a motion to strike, seeks three different

remedies: a dismissal of six counterclaims under Rule 12(b)(6), a striking of one of those same

counterclaims under Rule 12(f), and a dismissal or striking of the First Amended Answer, Dkt.

#22, as untimely under Rule 15(a)(2).


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The last remedy, to dismiss or strike the First Amended Answer as untimely, is now

entirely moot. As described above, Plaintiff sought leave to amend its complaint, leave was

granted, and Defendant timely filed a Second Amended Answer. While Defendant was obviously

not untimely with the First Amended Answer, that train left the station when Plaintiff obtained

leave to amend the complaint, giving Defendant the right to file a new answer and counterclaim.

Further, with regard to the six counterclaims in the First Amended Answer, only three

appear in the Second Amended Answer. The claims for barratry and no good faith basis do not

appear, and while a declaratory judgment counterclaim does appear, it is on an entirely different

subject. The foregoing portions of the motion to dismiss must be denied as moot.

C . Removed Counterclaims: Declaratory Judgment, Barratry, and No Good F aith Basis

In the First Amended Answer, Defendant sought a declaratory judgment that she had not

infringed Righthaven’s copyright. Dkt. #22 at 4, ¶ 20 (“Defendant is entitled to a declaration that

Defendant has not infringed Plaintiff’s copyright”). Despite Plaintiff’s protestations, this was a

perfectly legitimate tactical move, because Plaintiff’s copyright infringement claim could be

subject to an adjudication not involving the merits, i.e. a 12(b)(6) dismissal. Concerned that

Plaintiff would simply beef up its complaint and try again—in hindsight, a very valid concern

given Plaintiff’s recent litigation conduct—Defendant sought a declaration that she had not

infringed the copyright.

Eiser’s original strategy was based upon an identical defense strategy in Righthaven v.

Democratic Underground. Righthaven strenuously objected to the counterclaim in that case too,

but the court overruled the objection:

Righthaven and Stephens Media have attempted to create a cottage industry of filing copyright claims, making large claims for damages and then settling claims for pennies on the dollar, with defendants who do not want to incur the costs of defending the lawsuits, are now offended when someone has turned the tables on


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them and insisting on a judgment in their favor rather than a simple dismissal of the lawsuit.

Order of 4-15-2011, Righthaven v. Democratic Underground, 2:10-cv-01356-RLH-GWF (D.

Nev.) (HUNT, J.).

But quite a bit has changed in the Righthaven saga since Eiser elected to pursue that

strategy. The First Amended Answer was filed on February 25, 2011. As described in

Defendant’s 12(b)(1) motion to dismiss, Dkt. #60, it was not until mid-April that the true, sham

nature of Righthaven’s assignments was revealed. And only last month were these assignments

emphatically rejected by judges in the District of Nevada, just days before Defendant filed the

Second Amended Answer.

With all of this, Eiser’s main defense strategy has changed from “I didn’t do it”—still a

great backup plan—to “Righthaven doesn’t have standing.” The reason for this is simple: it does

Eiser no good to prove in an action against Righthaven that she didn’t infringe, because

Righthaven isn’t the true copyright holder and never will be. Further, the effect of such a

judgment out of this action on the true copyright holder, MediaNews Group Inc., is ambiguous at

best.4

Eiser has no interest in needlessly complicating this matter, and in fact has carefully

couched her Rule 12(b)(1) dismissal motion to isolate the standing issue for adjudication and, if

4 If Defendant obtained a declaratory judgment of noninfringement on the merits in this action, nothing stops MediaNews Group from filing a copyright infringement action of its own against Defendant’s organization, the Lowcountry 9/12 Group, or the individual who actually posted the Rosen Letter. If MediaNews Group sued Defendant Eiser, Eiser would argue that it would be inequitable to have to defend this allegation against MediaNews Group’s agent and then again against MediaNews Group, and Eiser would hopefully prevail, but it would not be a certainty. However, that sort of estoppel argument would be much harder to make if MediaNews Group did not file against Eiser and only sued the nonprofit or the person who actually posted the Rosen Letter. Judicial estoppel arguments are at their nadir when there is complete non-mutuality, i.e. when the new plaintiff and new defendant are totally different parties from the original plaintiff and original defendant.


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successful, permanently resolve the infringement issue in this case. Therefore, Eiser elected not

to pursue a counterclaim for a declaratory judgment of noninfringement in the Second Amended

Answer. Eiser certainly intends to defend herself against the copyright claim if she is

unsuccessful on her 12(b)(1) claim, but no longer seeks a declaratory judgment of

noninfringement even if she obtains a procedural victory over Righthaven.5

Rather, the new declaratory judgment action seeks a declaration that Righthaven’s

business model is illegal. Dkt. #53 at 60, ¶ 529 (“Defendant Eiser respectfully requests the Court

declare that Righthaven’s business model is illegal, at least in South Carolina.”). It is true that the

next paragraph asks the Court to declare any other matter related to the pleadings and within its

discretion, but Defendant’s intent with this language was to leave the Court the discretion to find

facts and make legal conclusions relating to Righthaven’s business operations. Including each

and every reason why Righthaven’s business model is illegal in the declaratory judgment cause

of action would have made a 119 page pleading into a 219 page pleading, something Defendant

sought to avoid. Now, to clarify matters, Defendant stipulates that it does not seek a declaratory

judgment as to noninfringement against Righthaven in its Second Amended Answer.

Accordingly, Defendant submits that the argument in Plaintiff’s motion to dismiss

regarding the original declaratory judgment counterclaim is simply not applicable to the new

declaratory judgment counterclaim. In addition, the counterclaims for barratry and no good faith

5 Accord Order of June 22, 2011, Righthaven v. Barham, 2:10-cv-02150-RLH-PAL (D.Nev.) (HUNT, J.), docketed in this Court as Dkt. #60-7. In that case, Judge Hunt found Righthaven lacked standing because it was not the true owner of the copyright. See generally Dkt. #60-7. Judge Hunt granted Righthaven’s motion to dismiss a declaratory judgment counterclaim of noninfringement, finding it moot given that Righthaven was not the true owner of the copyright. Id. at 3 (“As Righthaven does not hold the . . . copyright, Barham lacks standing to assert his claim against Righthaven just as Righthaven lacks standing to assert its purported claim.”).


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basis have been entirely removed. These portions of the motion to dismiss must therefore be

denied as moot.

D . Abuse of Process

Unlike the declaratory judgment claim, the new abuse of process claim is similar to the

original, though it reflects a beefed-up factual basis given the intervening revelations from the

District of Nevada. See Dkt. #22 at 4 (original abuse of process claim); Dkt. #53 at 79 (new

abuse of process claim). The elements of abuse of process in South Carolina are: (1) an ulterior

purpose and (2) a willful act in the use of the process not proper in the regular conduct of the

proceeding. Huggins v. Winn-Dixie Greenville, Inc., 153 S.E.2d 693, 694 (S.C. 1967).

Righthaven’s attack is premised on claims that Defendant has not alleged either of the two

elements and that Defendant cannot use factual material from other Righthaven cases in support

of its allegations. Righthaven’s claims are incorrect.

i. ULTERIOR PURPOSE

Righthaven’s ulterior purpose is as obvious as it is obviously pled:

695. Righthaven does not file lawsuits with the intent of seeking the just resolution of legitimate or arguably legitimate claims before a court. 696. Righthaven’s purpose, instead, is to scare victims with legal process into paying settlements Righthaven is not entitled to. 697. Righthaven’s ulterior purpose, therefore, is to gain funds through settlements of claims it has no right to compromise nor had any right to file suit over in the first place.

Second Amended Answer, Dkt. #53 at 80.

Righthaven is arguably collaterally estopped from even denying this. In Righthaven v.

Hill, Judge Kane found that Righthaven seeks to use the courts as “mere[] tools for encouraging

and exacting settlements from defendants cowed by the potential costs of litigation and liability.”

Order at 2, Dkt. #16, Righthaven v. Hill, 1:11-cv-211-JLK (D.Colo). When coupled with the fact


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that Righthaven does not own the copyrights it sues over, the ulterior purpose is obvious.

Righthaven files suits seeking relief it is not legally entitled to for the sole purpose of extracting

nuisance-value settlements. If that is not an ulterior purpose, it is hard to see what could be.

The South Carolina Supreme Court appears to have first addressed the tort of abuse of

process in Huggins. After stating the elements, the Huggins court gave a very detailed analysis of

the improper purpose element:

The improper purpose usually takes the form of coercion to obtain a collateral advantage, not properly involved in the proceeding itself, such as the surrender of property or the payment of money, by the use of the process as a threat or club.

Id. at 694 (quoting Prosser, Handbook of the Law of Torts, 2d ed. at 668-69).

Plaintiff rests much of its argument on the statement that “there is no liability where the

defendant has done nothing more than carry out the process to its authorized conclusions, even

though with bad intentions.” Motion to Dismiss, Dkt. #23-1 at 10. But in Swicegood v. Lott, 665

S.E.2d 211 (S.C. Ct. App. 2008), the South Carolina Court of Appeals plainly rejected similar

reliance on that same sentence from another case, calling it an “isolated statement.” Id. at 214.

The Swicegood court went on: “this statement should not be interpreted to mean that no liability

may ever arise where the process is carried to its authorized conclusion.” Id.

The easiest way to think about the elements of abuse of process is to consider (1) why the

plaintiff brought the litigation and (2) what the plaintiff did once the litigation was brought. If a

defendant alleges a hidden motive, the first element is satisfied. If a defendant alleges

wrongdoing in the litigation related to the hidden motive, the second element is satisfied.

Consider Righthaven’s claimed motive: to vindicate rights—Righthaven’s rights—under the

Copyright Act and to recover damages because of the “irreparable harm” that Righthaven

suffered and would continue to suffer. Dkt. #23-1 at 10-11; Dkt. #36 at 5, ¶¶ 33-34.


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But this was nothing but a giant subterfuge. Righthaven was not asserting its rights under

the Copyright Act—it didn’t have any. And the “irreparable harm” was suffered (if at all) by

MediaNews Group, not Righthaven. When Defendant originally made those claims in her First

Amended Answer, they were conclusions based on circumstantial evidence. Now, they are

directly proved by Righthaven and MediaNews Group’s own agreement, the MediaNews Group

Copyright Alliance Agreement:

Despite any Copyright Assignment, Publisher shall retain (and is hereby granted by Righthaven) an exclusive license to Exploit the Publisher Assigned Copyrights for any lawful purpose whatsoever and Righthaven shall have no right or license to Exploit or participate in the receipt of royalties from the Exploitation of the Publisher Assigned Copyrights[.]

Dkt. #61-1 at 9-10 § 6. Righthaven alleged in the Complaint that Eiser had infringed four of

Righthaven’s exclusive rights under the Copyright Act. Dkt. #1 at 4 ¶¶ 27-30. Yet because of a

secret agreement, Righthaven had not a single exclusive right to infringe.

The elements of abuse or process require a showing of “ulterior purpose.” The dictionary

defines “ulterior” as “being beyond what is seen or avowed; intentionally kept concealed.” If

words have meaning, what Righthaven did in this case is an archetypal example of an “ulterior

purpose.” Righthaven came to this Court pretending to be the legitimate copyright holder,

claiming it had been “irreparably harmed” (Dkt. #36 at 5, ¶¶ 33-34), while at all times acting as a

secret proxy for the actual copyright holder who was the real party in interest. Righthaven’s true

relationship with MediaNews Group was most definitely “beyond what is seen or avowed” and

was, without a doubt, “intentionally kept concealed.”

And the concealment didn’t stop after the Complaint was filed, but has continued right up

through the present. For example, as cited above, Righthaven stated in the very motion to dismiss

to which Defendant is responding:


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[B]ecause Righthaven is a party to the case and asserts an interest in the copyright at issue, Righthaven cannot be assisting another in prosecuting a suit. Righthaven simply is bringing a suit on its own behalf to enforce its rights in its copyright.

Dkt. #23-1 at 16 (emphasis in original). That was filed on March 11. Righthaven had another

chance to come clean when it filed its Amended Complaint on April 7. Not only did Righthaven

continue to hide the true nature of its “ownership,” Righthaven’s former counsel actually added

the following allegation, one that does not appear in the original complaint:

Righthaven obtained ownership of the copyright in and to the Work through a valid and enforceable assignment from the original owner of the rights in and to the Work (the “Assignment”). The Assignment granted Righthaven full ownership in and to the copyright to the Work, as well as specifically assigning any and all rights to seek redress for past, present, and future infringements, both accrued and unaccrued, in and to the Work.

Amended Complaint, Dkt. #36 at 2, ¶ 10 (emphasis added; notably appearing in the

“Jurisdiction” section).

As the old saying goes, one lie begets another. To whatever extent Righthaven might

claim that the unadorned ownership claim in the original complaint was a mistake or somehow

excusable, to cover up that falsehood Righthaven’s counsel told far more comprehensive lies,

leaving no doubt whatsoever of the ulterior purpose of the litigation. And as of this filing,

Righthaven still has made no effort to correct these facts before the Court, and in fact has done

nothing at all in this action in two months.

A brief comparison with Defendant’s conduct might be worthwhile. Undersigned

counsel inaccurately represented in the First Amended Answer that Eiser had posted the Rosen

Letter on the Internet. Eiser was not able to find counsel until she had already filed a pro se

answer and counterclaim, and after retention, the deadline for filing amended pleadings was

rapidly closing. Undersigned counsel had very limited time to consult with Eiser prior to filing

the First Amended Answer and, quite frankly, misunderstood Eiser’s explanations that she had


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not posted the material. Having no good faith basis to deny the alleged posting, counsel admitted

it in the First Amended Answer, despite its damaging nature.

Later conversations with Eiser revealed the truth of the matter and counsel’s mistake.

Counsel communicated to Righthaven that Eiser actually didn’t display the Rosen Letter, and

that fact appeared in the Joint 26(f) Report, Dkt. #38-1 at 2 (“Eiser denies Righthaven’s claims of

infringement and denies that Eiser displayed the Work in question.”). And when Eiser’s Second

Amended Answer was filed, the matter was corrected there too and an explanation provided.

Dkt. #53 at 7-8, ¶¶ 55-60 (correcting earlier misstatement).

That is candor to the Court. Counsel had no good faith basis to deny an extremely

damaging fact, and so admitted it. Upon discovering the error, the truth was communicated to the

opposing party and subsequently corrected in the record of this Court with explanation.

Meanwhile, Righthaven not only makes misrepresentations that are favorable to its position, it

tries to cover them up with outright lies. Defendant doesn’t just present allegations of an ulterior

purpose; Defendant submits indisputable proof.

ii. WILLFUL ACT IN THE USE OF PROCESS NOT PROPER IN ii.

THE REGULAR CONDUCT OF THE PROCEEDING

As the Swicegood court explained, “The ‘willful act’ element of the abuse of process tort

has been interpreted . . . to consist of three different components: (1) an act that is either willful

or overt; (2) in the use of the process; (3) that is ultimately reprehensible because it is either (a)

unauthorized or (b) aimed at an illegitimate collateral objective.” Id. at 215. There is no question

that Defendant has properly alleged willful or overt acts. The entire counterclaim rests on

allegations of intentional conduct.


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The second component is likewise alleged. Defendant submits that every part of every

pleading, motion, etc. where Righthaven holds itself out as the true copyright owner or denies the

true nature of its relationship with MediaNews Group is a “use of process” under consideration

here. Further, the illegal website demand is a crystal clear example of a use of process. Finally,

coupled with this improper process were Righthaven’s demands for payment from Defendant—

$15,000—before undersigned counsel made clear Dana Eiser would not simply roll over and pay

up. The second component is definitely present.

The third component requires a showing that the process is unauthorized or aimed at an

illegitimate collateral objective. The counterclaim alleges a variety of ways this is so. For one, it

is the product of the unauthorized practice of law in South Carolina, as discussed in the

Defendant’s Rule 12(b)(1) motion. For another, the claims made in Righthaven’s pleadings are,

in many cases, shameless lies. That too would seem to constitute unauthorized process.

But perhaps the most offensive example is the illegal website demand. In this case,

Righthaven only removed the website demand after defense counsel sent a sanctions-

consultation motion pursuant to Rule 11(c)(2), FED.R.CIV.P,6 despite having conceded in Nevada

litigation that the Copyright Act does not authorize such relief. In fact, as discussed in

Defendant’s 12(b)(1) motion, an attorney for Righthaven in Nevada made that concession the

very same day the original complaint in this action was filed, but the original complaint in this

action nonetheless contained the improper demand.

6 Undersigned counsel in no way wishes to run afoul of the prohibition in Rule 11(c)(2) that indicates that a motion for sanctions must not be filed or be presented to the court if the challenged matter is withdrawn or appropriately corrected. Id. Counsel is not presenting a motion for sanctions to the Court based on the website demand. But the fact that the website demand was included in the original complaint in this action is of independent legal significance vis-à-vis various counterclaims and defenses, including abuse of process. The fact that it was later removed does not alleviate Plaintiff’s liability on abuse of process.


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Moreover, the reason for the website demand is worth considering. Many Righthaven

victims are retired or otherwise on fixed incomes, and even many who are not are nonetheless

essentially judgment proof. Further, Righthaven isn’t at all equipped to actually execute

judgments. As a result of these two factors, a $3,000 cashier’s check is worth far more to

Righthaven than a $150,000 default judgment.

And if there is one thing most lawyers can attest to, it’s that a judgment-proof defendant

typically realizes they are judgment proof and is simply unimpressed by threats of large

monetary judgments. As the saying goes, you can’t get blood out of a turnip, and the turnip is

ordinarily well aware of that fact. So Righthaven had to find some leverage that would pry

money out of the hands of ordinarily judgment-proof defendants. The website seizure demand

was born as a result.

The purpose of the website demand was to give Righthaven a tool with which it could tell

its targets: “Hey, if you don’t have any money, fine, we’ll just go get a court to give us control of

your website.” Even a defendant otherwise immune from execution of a judgment is going to

take notice of that threat. And Righthaven exploited that to leverage defendants into paying up,

holding the website for ransom until the “settlement” check cleared.

This is not just abuse of process, it is outright extortion. And it is not just an

“unauthorized act” under the general principle that a complaint can’t demand relief without a

good faith basis simply to obtain leverage. When it relates to a website, such a demand offends

the public policy of the United States as clearly expressed in the Anti-Cybersquatting Protection

Act.

And looking back on the history of Righthaven, it becomes clear that the website demand

was made for another impermissible reason as well. The website demand appears in the earliest


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Righthaven complaints,7 back when Righthaven only operated in Nevada, which was most of

2010. At the outset, Righthaven obviously wondered—and worried—if it could win personal

jurisdiction fights against non-Nevada defendants. And while Righthaven eventually did win the

personal jurisdiction arguments, it was entirely possible at the time that some defendants might

simply ignore the complaint and hope to fight full-faith-and-credit enforcement of the default

judgment on due process grounds in the more favorable local venue.

But the website demand changed the dynamic. A defendant convinced that Righthaven’s

money judgment would be unenforceable back home wouldn’t be able to argue “due process” to

its domain registrar. A Florida judge could ignore a Nevada judgment and refuse to enforce it,

but a defendant could reasonably expect GoDaddy would comply with an otherwise-proper

judgment ordering it to do something. From a purely tactical standpoint, the website demand was

a great idea and provided great leverage—it just had the small problem of being completely

illegal. It is hard to see how a use of process could be any more unauthorized or more obviously

aimed at an illegitimate collateral objective.

One final point deserves consideration on the website issue. Righthaven’s complaints

don’t seek a court order directing the defendant to transfer control of the domain. Instead, they

seek a court order directly binding the domain registrar. Original Complaint, Dkt. #1 at 5 ¶ 3

(“Direct GoDaddy.com, Inc., and any successor domain name registrar for the Domain, to lock

the Domain and transfer control of the Domain to Righthaven”). But the domain registrars have

never been made parties in any Righthaven suit, a necessity for a judge to order them to do

something.

7 In fact, Defendant is informed and believes the website seizure demand appears in every original Righthaven complaint, many of which are still pending.


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It is a fundamental concept of American law that a judicial order does not bind someone

the court lacks personal jurisdiction over except in very rare circumstances not present here. And

it likewise goes without saying that GoDaddy is an indispensible party with regard to a

complaint that seeks an order telling GoDaddy to do something. For the longest time,

undersigned counsel just thought that Righthaven must not understand those concepts, and the

failure to name GoDaddy as a party was just a mistake.

In hindsight the reason is perfectly clear why Righthaven made such an obvious pleading

mistake, even apart from the fact that the demanded relief was illegal. Righthaven never actually

cared to get an order commanding GoDaddy or whoever to turn over a domain. If Righthaven

had actually sought that relief, GoDaddy would be named in the complaints, just as lienholders

are named in real property cases. Righthaven’s CEO Steve Gibson has claimed the federal

judiciary recognizes how smart Righthaven’s lawyers are, how one of them is a Harvard

professor, etc.8 Yet simultaneously Righthaven expects the courts to believe its attorneys are too

stupid to know that the orders they seek against domain registrars are completely ineffective

because the registrars aren’t parties. It doesn’t make sense.

But that line of thinking presupposes Righthaven actually ever intended to obtain the

relief it sought. In truth, Righthaven never had the slightest intention of actually getting a

website-seizure order. The last thing Righthaven wanted to do was pick a fight with GoDaddy, a

major company with plenty of lawyers at its disposal—and plenty of money to pay them—who

would not take kindly to Righthaven’s attempts to illegally adversely possess its customers’

websites. GoDaddy buys Super Bowl ads by the bushel. Had Righthaven picked a fight with

8 Gibson: “I think part of what’s happening here is that the federal judges recognize that, you know, Righthaven has hired some of the top lawyers across the country: copyright lawyers, Harvard law professors[.]” See Gibson Interview at 7:51, available at www.lasvegassun. com/videos/2011/jun/22/5268/.


http://www.lasvegassun.com/videos/2011/jun/22/5268/

http://www.lasvegassun.com/videos/2011/jun/22/5268/

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GoDaddy—much less all the other registrars named in its complaints—Righthaven would not

have survived infancy.

So we are left with a plaintiff secretly operating as a proxy for a third party, filing

lawsuits over damages to property it does not own, and including demands in its complaints that

are illegal and that it has no intention of actually pursuing simply to obtain improper leverage

over its targets. Not only is that abuse of process, it is a textbook-worthy example of it.

iii. EVIDENCE OF RIGHTHAVEN’S ACTIONS IN OTHER CASES

Righthaven’s argument that its actions in other cases cannot support an abuse of process

claim is absolutely wrong. Obviously Defendant can’t recover damages for Righthaven’s wrongs

in other cases, but those wrongs can certainly be used to show motive, intent, and a common

plan. The exceptions to Rule 404(b), FED.R.EVID., could not have a clearer application than in a

case like this, because motive and intent form an element of the tort of abuse of process. And

Righthaven’s 275 lawsuits are clearly proper similar-transaction evidence. Righthaven’s

complaints are practically identical as are its agreements with its clients. Compare Stephens

Media SAA, Dkt. #60-1 with MediaNews Group CAA, Dkt #61-1. Further, Righthaven’s tactics

are the same in all of its cases.

Righthaven’s argument on this point confuses pleading sufficiency with evidentiary

admissibility. The point of Defendant bringing up Righthaven’s conduct in other cases is to say

“Look what they did to other people; they’re doing it to me too.” Evidence of that nature runs the

gamut from wholly inadmissible in some types of cases (e.g., evidence the defendant in a wreck

case was a habitually bad driver) to proof of an element of a claim in others (like in unfair trade

practices claims, as described infra).


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But whether such evidence is ultimately admissible is not the issue. Despite its

admissibility on the 404(b) analysis, some similar transaction evidence might fall prey to Rule

403. But so what? The question at the 12(b)(6) stage is whether Defendant has provided the

Court with enough facts to take her claim out of the realm of mere hypothesis, to nudge the claim

across the line from conceivable to plausible. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950-51 (2009).

Whether the facts asserted are based on ultimately admissible evidence or are even provable at

all simply isn’t relevant at the 12(b)(6) stage.

Righthaven’s conduct in other cases most certainly makes Eiser’s abuse of process claim

more plausible. Since the true nature of Righthaven’s copyright assignments started to be known

in April, Righthaven has lost every single time a judge has ruled on the legitimacy of an

assignment. And they would have lost before that too if the ulterior purpose had been revealed.

It’s fair to say that Righthaven’s conduct in other cases doesn’t just make Eiser’s abuse of

process claim more plausible. It makes it practically irrebuttable.

iv. OTHER CONSIDERATIONS

Courts have, for centuries, identified the elements of claims and defenses, giving a

granularity to the law to provide certainty and fairness. South Carolina courts have done that

with abuse of process, identifying two elements, three components the second element, and two

parts of the third component.

But at a fundamental level, the term “abuse of process” is not some abstract name. It isn’t

“Tort #37.” Abuse of process, at its core, is just that—using the judicial system for something

other than the remediation of injustice. The sole limitation to the tort—and a sensible one—is

that a plaintiff can have the worst motives in the world, but as long as he files a legitimate suit

and litigates it properly, his bad motives alone aren’t actionable.


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But a hidden purpose coupled with litigation impropriety mandates a finding of liability

on the tort of abuse of process:

The gist of the tort is misusing, or misapplying process justified in itself for an end other than that which it was designed to accomplish. The purpose itself, though ulterior, need not be illegitimate; rather, the abuse occurs when the purpose is accomplished by using the process in a manner in which it was not intended to be used.

Food Lion, Inc. v. United Food & Commercial Workers Int’l Union, 567 S.E.2d 251, 253 (S.C.

Ct. App. 2002) (citations and quotations omitted).

Righthaven’s modus operandi is exactly what is described in the Food Lion case.

Righthaven’s ultimate purpose is to obtain negotiated settlements for copyright infringement for

the true owners of the copyrights. That purpose is ulterior, or at least it was before Righthaven’s

client agreements were made public in the past couple months. Righthaven claims what it does is

legitimate (even though it isn’t), but that is not relevant to abuse of process. What matters here is

that the purpose was hidden, the litigation conduct was wrongful, and the wrongful conduct was

done to achieve negotiation leverage so that Righthaven could accomplish its hidden purpose. If

that is not abuse of process, the tort is a dead letter.

E . Unfair Trade Practices

Plaintiff next attacks Defendant’s claim under the South Carolina Unfair Trade Practices

Act (“UTPA”), making four arguments: (1) that Defendant has not alleged a loss of money or

property; (2) that Defendant has not alleged an “unfair or deceptive method, act, or practice”; (3)

that UTPA requires a showing of constitutional actual malice; and (4) that Defendant has not

sufficiently alleged a “public interest” to state an UTPA claim. Each of these arguments will be

considered in turn.


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i. LOSS OF MONEY OR PROPERTY

Though other damages appear elsewhere in the counterclaim and are incorporated into

the UTPA claim so far as they are applicable, three specific losses of money or property are

specifically pled in the UTPA claim: (1) lost business opportunities—specifically, a lost job

opportunity; (2) costs incurred in defending this action pro se; and (3) costs and fees incurred in

hiring counsel.

As to the lost job, Defendant was substantially certain to have obtained a job that would

have substantially increased her income. As a result of Plaintiff’s conduct, Defendant is advised

she will be denied the job due to the stringent nature of the background checks involved. Upon

request, Defendant will of course submit more detailed evidence to the Court on this issue.9 The

lost job opportunity qualifies as an ascertainable loss of money under UTPA. Lost profits of any

type are an “ascertainable loss of money” in unfair trade practices claims, and lost wages are no

different than any other type of lost profit.

The second element is comprised of the costs she incurred while defending this action pro

se. This includes actual costs, such as copying, mailing, etc. It does not include compensation for

the time she spent dealing with the matter—only out-of-pocket expenses. Out-of-pocket costs are

certainly an ascertainable loss of money. Actual causation is present, in that but for Plaintiff’s

conduct, Defendant would never have spent the money. And proximate causation is present: it is

absolutely foreseeable that someone targeted by a lawsuit will have to spend money on paper,

stamps, etc. while defending the suit.

Turning to the attorney’s fees, the general rule at common law is that attorney’s fees are

only recoverable pursuant to a statute or contract. But an exception to that rule is where

9 The job relates to the U.S. government and Defendant submits that there is likely a governmental interest in keeping certain information about it under seal.


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attorney’s fees are spent defending wrongful litigation. At common law, the “wrongful

litigation” causes of action allow those attorney’s fees to be recovered as damages.

The UTPA is an enhancement and extension of common law remedies available for the

wrongful conduct within its reach.10 The UTPA claim asserted by Defendant is generally in the

nature of a common law wrongful litigation claim,11 like abuse of process or malicious

prosecution claim. And with abuse of process and malicious prosecution, attorney’s fees spent

defending the wrongful litigation are recoverable as damages at common law:

[A] claimant in a malicious prosecution or abuse of process action can recover attorney fees incurred in defending against the prior wrongful litigation; however, under the general rule, he or she cannot recover attorney fees incurred in bringing the malicious prosecution or abuse of process action itself. Logically, the same rule should apply if the abuse of process claim is brought as a counterclaim to wrongful litigation rather than as a later separate action. Accordingly, under the general rule, although Buckley could recover attorney fees attributable to his defense against TCSI’s wrongful litigation, he is not entitled to recover attorney fees attributable to the prosecution of his abuse of process claim.

Technical Computer Services, Inc. v. Buckley, 844 P.2d 1249, 1256 (Colo. Ct. App. 1992)

(citations omitted).

The clear parallel is that where an UTPA claim is based on wrongful litigation, attorney’s

fees spent in defense of the wrongful litigation are likewise recoverable as damages. Otherwise,

UTPA contracts the common law remedy, contrary to its purpose. There appears to be only one

10 “[UTPA] should not be construed to increase a plaintiff’s burden of proving liability since its purpose is to give additional protection to victims of unfair trade practices, not to make a case harder to prove than it would be under common law principles.” deBondt v. Carlton Motorcars, Inc., 536 S.E.2d 399, 407 (S.C. Ct. App. 2000). 11 That being said, even if all of Plaintiff’s litigation conduct were excluded, Defendant could still state an unfair trade practices claim on other aspects of Plaintiff’s conduct.


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South Carolina appellate case discussing this, Roddey v. NationsWaste, Inc., 05-UP-472 (S.C.

Ct. App. filed July 28, 2005).12

The Roddey opinion features an UTPA plaintiff seeking relief against a party that had

brought an unfounded lawsuit against him. Id. at Law and Discussion, § 1. But, in sharp contrast

to this case, that wrongful lawsuit was quickly dismissed before Roddey obtained an attorney

and he therefore incurred no legal fees. Id. The court makes clear that if Roddey had incurred

legal expenses in defending the unfounded lawsuit, they would have satisfied UTPA’s

“ascertainable loss” requirement. Id.

Based on Roddey and Technical Computer Services, supra, it is quite clear that legal

expenses are an “ascertainable loss of money” where an UTPA claim is based on wrongful

litigation. A question arises as to how this fits in with UTPA’s statutory award of attorney’s fees.

In Mull v. Ridgeland Realty, LLC, 693 S.E.2d 27 (S.C. Ct. App. 2010), the court encountered an

similar question in a different context, and held that recoverable damages under UTPA are

subject to trebling, whereas attorney’s fees awarded by statute that arise from the prosecution of

the UTPA claim are not subject to trebling.

Under Mull, Roddey, and Technical Computer Services, the correct approach is this:

Determine the total amount of reasonable attorney’s fees incurred. Divide that total between fees

attributable to defense and fees attributable to prosecution of counterclaims. The fees attributable

to defense constitute an ascertainable loss of money, are recoverable as damages, and are subject

12 Undersigned counsel is unaware of any prohibition on the citation of unpublished authority in this Court, and it would seem to be authorized by Local Civil Rule 7.05(A)(4) (form and content of memoranda). That being said, counsel only cites unpublished cases when no published case establishes the proposition. If the Court should determine unpublished authority is impermissible, counsel will immediately prepare a edited version of this brief and remove the citation.


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to trebling. The fees attributable to prosecution of counterclaims do not constitute an

ascertainable loss of money, are recoverable under statute, and are not subject to trebling.

The central point is this: Because Defendant has incurred attorney’s fees attributable to

the defense of Plaintiff’s wrongful litigation, that figure constitutes an ascertainable loss of

money per UTPA.

ii. UNFAIR OR DECEPTIVE METHOD, ACT, OR PRACTICE

Righthaven denies Defendant has alleged any unfair or deceptive practices. First,

consider what Righthaven is. It is not a law firm but a business engaged in collections. But a key

difference between Righthaven and a regular collections agency is that Righthaven doesn’t

collect legitimate, sum-certain, contractually-agreed upon debts. Righthaven leverages

settlements out of its targets with deceit, in many cases where the target would have practically

no exposure even if the true copyright owner brought the claim.

Righthaven’s business tactics are identical to those employed by hard-nosed debt

collectors who will say or do just about anything to get a target to pay up. A business operating

in that fashion is clearly within the reach of the Unfair Trade Practices Act. What follows are just

a few of Righthaven’s unfair and deceptive practices; many others are described at length

throughout the Second Amended Answer.

Righthaven lies about being the true owner of the copyright, and does so to induce its

targets into paying money in “settlement” of claims. To pull off the trick, Righthaven has two

versions of copyright assignments, one fake and one real. The fake version purports to give

Righthaven all right, title, and interest in the relevant copyright. This version is made for public

consumption—and for production in litigation—so as to fool judges, targets, and the general

public. See Stephens Media fake assignment, Dkt. #60-1 at 17; MediaNews Group fake


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assignment, Dkt #61-1 at 14. Even worse, these fake assignments are notarized, despite there

being no requirement in the Copyright Act or any other law for notarization. The purpose of the

notarization is to falsely imply validity, and as the assignments are produced with knowledge

they will later be submitted to a court, the signatories commit perjury.

While the fake assignments purport to give all right, title, and interest in the copyright—

all the while bearing a fancy notary seal—the real assignments are master agreements intended to

be kept secret. Both of the original master agreements presently available, the Stephens Media

SAA and the MediaNews Group CAA, operate to entirely take back the rights purportedly

assigned by the fake assignments. See Stephens Media SAA, Dkt. #60-1 at 5, § 7.2; MediaNews

Group CAA, Dkt. #61-1 at 9-10, § 6. Notably, though unsurprisingly, the real assignments do not

bear jurats for notarization, demonstrating that the notarization of the fake assignments is truly

just for show. Not only is this a deception, it is a very ingenious one.13

Armed with fake ownership documents, Righthaven files a fraudulent copyright

application. Righthaven’s clients could register the copyright themselves then execute the

assignment, but Righthaven prefers the reverse so that the Copyright Office documents,

including the registration, bear Righthaven’s name. As with the notarization, this is to give even

more of a veneer of legitimacy to its lies about copyright ownership by creating realistic looking

documents that hide the true nature of the transaction. This is exactly what Judge Hunt referred

to in Democratic Underground when he criticized Righthaven for misleading the Nevada judges

13 And had Stephens Media not disclosed the SAA in discovery in Righthaven v. Democratic Underground, the documents might never have come to light. Righthaven clearly intended to never turn them over, and because civil litigants can’t execute search warrants, the agreements would never have been known to the judiciary or the general public. That plan was foiled because Stephens Media’s attorneys in the Democratic Underground action were apparently not willing to engage in discovery abuse, though clearly Righthaven was willing to and did in a variety of cases.


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about the true nature of the Righthaven transactions so as to obtain favorable rulings. The rulings

Judge Hunt was referring to were rulings obtained by Righthaven’s production to the courts of

the fake assignments and fraudulently obtained copyright registrations.

Righthaven and its clients work on other fronts to build a public perception that

Righthaven was the legitimate copyright owner. Multiple stories in favorable media outlets,

some even owned by Righthaven’s clients, were put out to create a general public perception that

Righthaven was the true copyright owner. And yet Righthaven wasn’t.

Righthaven files lawsuits without warning or any type of pre-suit negotiation. The

lawsuits are often poorly researched and contain a variety of errors. The no-warning nature of the

suit is carefully calculated by Righthaven to maximize duress on its targets so as to more

effectively leverage settlement dollars out of them. Righthaven’s complaints include a legally

unsupportable demand for the target’s website, and the analysis on that issue provided above is

equally relevant in the unfair trade practice context.

Specifically as to The Denver Post, the website hosting the material that Righthaven sues

over, www.denverpost.com, actively encourages users to share its content, providing lots of

software tools to enable sharing, over 300 different kinds. The only restriction suggested on the

website is that the shared material may not be used for commercial purposes. This statement

appears at the bottom of every page: “This material may not be published, broadcast, rewritten,

or redistributed for any commercial purpose.”

Now consider a zoo that has tigers and elephants. There is a sign in front of the tiger

exhibit, “Don’t Feed the Tigers.” There is no such sign in front of the elephant pen. A reasonable

person would absolutely conclude that feeding the elephants is acceptable. The Denver Post has

a sign that says “Don’t Share Content Commercially.” But there is no such sign about


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noncommercial sharing. A reasonable person would come to exactly the same conclusion about

noncommercial sharing as he or she would about feeding the elephants at the zoo.

In addition, consider that Sara Glines, a vice president of MediaNews Group, told the

New York Times that MediaNews Group reviews and controls Righthaven’s activities and does

not allow it to sue over noncommercial uses. And yet Righthaven sued Defendant Eiser over a

noncommercial use.

A company cannot lead its customers to believe that they are allowed to do something,

tell the New York Times that they will not be sued if they do it, and maintain suit over that very

thing that they claim to allow. Much like the above analysis regarding abuse of process, if that is

not an unfair trade practice, it is hard to see what could be. And as Righthaven is a willing joint

venturer with MediaNews Group in this lawsuit and all others relating to The Denver Post’s

material, Righthaven is jointly and severally liable right along with MediaNews Group for its

participation in this scheme.

iii. CONSTITUTIONAL ACTUAL MALICE

Righthaven next suggests that Defendant attempts to sue for defamation via an unfair

trade practices claim. To the extent that was true with regard to the First Amended Answer, it is

no longer true with regard to the Second Amended Answer. Plaintiff’s claims regarding

constitutional actual malice are therefore moot.

iv. PUBLIC INTEREST

Righthaven next claims that there is no public interest at issue in its international

litigation campaign. This argument isn’t just frivolous, it’s downright fraudulent. Righthaven has

sued approximately 500 defendants from all over—and outside—the country. Righthaven started

off in Nevada and has filed 217 lawsuits there. Righthaven then expanded into South Carolina


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and Colorado, filing the instant action here and 57 suits in Colorado. If suing 500 defendants

from all across the world doesn’t affect the public interest, it is hard to see what could.

Righthaven’s motion mocks Defendant’s allegation in the First Amended Answer that

Righthaven has “brought more than 239 claims for copyright infringement throughout the

country, and will undoubtedly be filing many more. Motion to Dismiss, Dkt. #23 at 14 (citing

First Amended Answer, Dkt. #22 at 5, ¶ 25). But Defendant was absolutely right. Righthaven did

continue filing lawsuits—36 more—and only stopped when the Nevada and Colorado District

Courts made clear that Righthaven had some explaining to do.

Righthaven’s argument to the contrary is that Defendant cannot show an impact on the

public interest because Righthaven has filed only one lawsuit in South Carolina. Plaintiff cites

Jeffries v. Phillips, 451 S.E.2d 23 (S.C. Ct. App. 1994) in support. But what Plaintiff fails to tell

the Court is that the Jeffries case—along with a variety of other South Carolina authority—

establishes that the public interest is affected where a potential for repetition is shown. Id. at 23.

In fact, as the Jeffries court explains, the way to show a potential for repetition is to submit

evidence of similar transactions—the very thing Righthaven criticizes Defendant for with respect

to the abuse of process claim.

Defendant Eiser can do far better than a showing of potential for repetition. She can show

actual repetition: 274 examples of it. That these examples did not occur within the territorial

boundaries of South Carolina is totally irrelevant. Righthaven is an international operation, suing

people wherever they may be. Righthaven has sued defendants all throughout the United States

and even Canadians and British subjects. Righthaven does not at all discriminate based on state-

of-residence or even country-of-residence. Righthaven targets people everywhere, from Canada

and England to Georgia and North Carolina. See Righthaven v. Toronto Star Newspapers, Ltd.,


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1:11-cv-0051-JLK (D. Colo); Righthaven v. Newman, 2:10-cv-01762-JCM-PAL (D.Nev.)

(English defendant) Righthaven v. Sumner, 1:11-cv-00222-JLK (D. Colo.) (Georgia defendant);

Righthaven v. Hill, 1:11-cv-00211-JLK (D. Colo) (North Carolina defendant).

It is true that Righthaven and its clients have not filed any further suits in South Carolina.

But not because they don’t want to—they’re afraid to. As best Defendant can tell, her First

Amended Answer contained the very first counterclaim for money damages lodged against

Righthaven in any lawsuit in the country. Prior Righthaven cases involved counterclaims seeking

declaratory judgments of noninfringement, but this case appears to be the first in the entire

country where a defendant fought back with counterclaims for money damages.

Righthaven’s subsequent avoidance of South Carolina has nothing whatsoever to do with

a lack of intent to continue suing South Carolinians. It’s because Righthaven and its allies see

serious exposure on Defendant Eiser’s counterclaims—as they should. Since Eiser’s

counterclaims were filed, other Righthaven targets have filed similar claims. And what is now

known about Righthaven has validated everything Eiser alleged in her First Amended Answer.

Had Defendant Eiser paid up and shut up as Righthaven expected her to, the District of

South Carolina would now be inundated with Righthaven cases just as Nevada and Colorado are.

And if Righthaven somehow prevails in this action, that is precisely what will happen next. Not

only is there a potential for repetition—if Righthaven wins this case, there is a certainty of it. For

Righthaven to claim otherwise is shockingly dishonest, even for Righthaven.

F . Civil Conspiracy

Plaintiff complains that the original civil conspiracy claim pled in the First Amended

Answer was factually insufficient, though tellingly concedes: “Eiser does not have a sufficient

basis for bringing this claim at this point.” Motion to Dismiss, Dkt. #23-1 at 17 (emphasis


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added). Fortunately, in the time between the First Amended Answer and the Second Amended

Answer, Defendant was able to put together a rock-solid factual basis for her claims and, at the

request of Plaintiff, name most if not all of Plaintiff’s co-conspirators too. Id. (criticizing “Eiser’s

failure to identify any alleged co-conspirators of Righthaven”).

I I I . C O N C L USI O N

Unsurprisingly, the law provides quite a few remedies and theories of recovery for

victims of egregious, intentional, coordinated misconduct. Those that Defendant could assert in

good faith are put forward in her Second Amended Answer. They run the gamut from claims that

are clearly available on these facts to claims that are admittedly novel in this context, but such is

the nature of compulsory counterclaims. And based on material already in the record from other

courts and Righthaven’s own documents, Defendant is likely already entitled to summary

judgment as to liability on several of her counterclaims.

The abuse of process and unfair trade practices claims Righthaven attacks in its motion

are not just supported by allegations in the counterclaim—they are amply supported by facts in

evidence already before the Court. And if Plaintiff somehow managed to get all of Defendant’s

other causes of action dismissed, Defendant’s civil conspiracy claim would then be before the

Court and would be ripe for summary judgment on the same facts.14

14 As required when a civil conspiracy claim relies on the same basic facts as other causes of action in a complaint, Defendant’s civil conspiracy claim is pled strictly as an alternate means of recovery in case Defendant’s other theories as to a particular element of damages fail for some reason. “Where the particular acts charged as a conspiracy are the same as those relied on as the tortious act or actionable wrong, plaintiff cannot recover damages for such act or wrong, and recover likewise on the conspiracy to do the act or wrong.” Todd v. S. Carolina Farm Bureau Mut. Ins. Co., 278 S.E.2d 607, 611 (S.C. 1981) (citing 15A C.J.S. Conspiracy § 33 at 718). Therefore, it is not necessary for all other causes of action to be dismissed before civil conspiracy is ripe. If all other theories as to a specific element of damages fail, civil conspiracy allows recovery of that element of damages if conspiracy is proved. Id.; cf. Austin v. Stokes-Craven Holding Corp., 691 S.E.2d 135, 153 (S.C. 2010) (discussing election of remedies).


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For the foregoing reasons, Plaintiff’s motion to dismiss must be denied.

Respectfully submitted,

s/J. Todd Kincannon s/Bill Connor J. TODD KINCANNON, ID #10057 BILL CONNOR, ID #9783 THE KINCANNON FIRM HORGER AND CONNOR LLC 1329 Richland Street 160 Centre Street Columbia, South Carolina 29201 Orangeburg, South Carolina 29115 Office: 877.992.6878 Office: 803.531.1700 Fax: 888.704.2010 Fax: 803.531.0160 Email: [email protected] Email: [email protected] s/Thad T. Viers THAD T. VIERS, ID #10509 COASTAL LAW LLC 1104 Oak Street Myrtle Beach, South Carolina 29578 Office: 843.488.5000 Fax: 843.488.3701 Email: [email protected] July 11, 2011 Attorneys for Defendant


Eiser's Amended Response to Righthaven's Motion to Dismiss (Righthaven LLC v. Dana Eiser

Documents

default defendant

time defendant

longago filed motion

clear defendant

plaintiffs motion

new motion

n c o u n t e r c

e o f c o n t e n ts