State Bar of Nevada Investigates Attorneys

First appeared in Vegas Inc.

Copyright lawsuit filer Righthaven LLC of Las Vegas was hit with a new problem Thursday when the State Bar of Nevada said it’s launching formal proceedings to deal with grievances involving Righthaven CEO Steven Gibson and two former Righthaven attorneys.

The State Bar, which regulates attorneys, has since as early as the Fall of 2010 received complaints from unidentified parties about Righthaven and has been watching Righthaven’s litigation campaign work its way through the courts.

The Bar this week opened grievance files concerning Gibson, an attorney, and former Righthaven attorneys Jodi Donetta Lowry and J. Charles Coons. The attorneys have been asked to respond to the grievance issues by Jan. 31.

Gibson and Lowry now work for the Las Vegas office of the Detroit law firm Dickinson Wright PLLC. Coons is with a Las Vegas firm called Cooper Coons Ltd.

Phil Pattee, assistant Bar counsel, said the agency couldn’t disclose the nature of the grievances against the attorneys or whether they relate to complaints from outside parties or the Bar’s own review of the Righthaven cases or both. But he confirmed the grievances relate to the attorneys’ work for Righthaven.

“We’ll be asking them about Righthaven,” he said.

This week’s development may answer a question Righthaven observers have been asking for months: whether any of its attorneys would be formally questioned about charges by a federal judge that the company made “inaccurate and likely dishonest” statements to the court as it pursued its copyright infringement lawsuits.

Observers also have asked whether anyone individually would be penalized after the company was fined $5,000 for violating local federal court rules requiring disclosure of all parties with a financial interest in its lawsuits, as well as charges Righthaven ran a shakedown operation in which defendants were coerced into settling by what critics called Righthaven’s false lawsuit claims of copyright ownership and the authority to seize defendants’ website domain names.

On top of that, the federal judge in Las Vegas who fined Righthaven and suggested it made misrepresentations, Roger Hunt, has also commented that it appears Righthaven, as a company, has been engaged in the unauthorized practice of law.

The attorneys named in the grievance files were all involved in some of Righthaven’s early cases in which Righthaven failed to disclose that Stephens Media LLC, owner of the Las Vegas Review-Journal, received a cut of lawsuit revenue.

Righthaven is half owned by the same Arkansas investors who own Stephens Media.

Righthaven operated by obtaining copyright assignments from Stephens Media as well as the owner of the Denver Post.

Righthaven used the copyrights to file 275 no-warning lawsuits since March 2010, claiming websites and website users infringed on copyrights by posting material from those newspapers without authorization.

After initially winning what are believed to be hundreds of thousands of dollars in lawsuit settlements, Righthaven is now in financial distress after judges ruled it lacked standing to sue because of flawed copyright assignments and that some defendants were protected by fair use.

Judges have awarded defendants $216,335 in legal fees after they defeated Righthaven in court, and a defendant collecting on his judgment convinced a judge to appoint a receiver, who has auctioned Righthaven’s website and is trying to seize its copyrights for auction.

Despite the complaints about Righthaven and its attorneys, the three attorneys named Thursday will likely dispute any allegations of wrongdoing. Righthaven and Stephens Media have argued the lawsuits were necessary to crack down on rampant online infringement of news content, and Righthaven is appealing key court rulings against it.  A Hackensack Family Lawyer is happy not to be involved.

“I will be responding to the informational requests of the Bar and believe that after such responses and clarifications, the matter will be properly addressed. Miss Lowry indicates her concurrence,” Gibson said Thursday.

Coons couldn’t immediately be reached for comment.

Creating grievance files does not suggest the Office of Bar Counsel at the State Bar has filed complaints against the attorneys. Rather, it means the office has determined there is sufficient information to warrant a review of the matter by a screening panel of the Bar’s Southern Nevada Disciplinary Board.

The opening of the files sets in motion a process in which the Office of Bar Counsel will present the cases to the screening panel.

The panel has several options, including dismissing the matter, issuing a “letter of caution” or issuing a “letter of reprimand.”

If the screening panel believes the conduct in question potentially may merit more severe professional discipline, it refers the matter to a formal hearing, after which the State Bar prepares a complaint and the attorney is required to file an answer.

Potential penalties at that stage range as high as the panel recommending to the Nevada Supreme Court that an attorney receive a public reprimand, suspension or disbarment. The Supreme Court then decides what to do.