When a troll gets trolled by a troll, do we all win or lose? Malibu Media, a porn company known for suing illegal downloaders, is suing its former law firm for ditching it mid-litigation in some of its copyright infringement lawsuits and withholding settlement funds.
Five years ago in late 2011, a firm by the name of LIPSCOMB, EISENBERG & BAKER, PL (we’ll call them “LEB”), led by their fearless leader MICHAEL K. LIPSCOMB (he goes by KEITH on his website, but let’s call him “Lipscomb”), approached an adult film company named Malibu Media and offered their services as general counsel and lead litigation with respect to Malibu’s copyrights. Great, that doesn’t seem too terrible right? Well, things were all well and good until LEB started hunting down people who may have downloaded movies online. LEB would send out cease and desist letters and file lawsuits against random people downloading (or potentially not downloading) porn via torrents. Most people felt shamed because their personal porn viewing habits might go public and coughed up money to settle the disputes.
One thing, according to a new lawsuit, Lipscomb never had Malibu sign any sort of retainer agreement or any other documentation stating how LEB would be paid for their legal “services.” Fast forward to September 2015, Lipscomb sees the cash flow from the settlements dwindling (because I’m sure people just started throwing cease and desist letters in the garbage). He contacts Malibu and informs them that because of the operation cost of the copyright enforcement program that he has going for Malibu, that LEB wanted to “accrue money” for about 4-6 months to keep the program afloat. In laymen’s terms, he politely asked them if he could not give his client money for a few months. Oh, and there was no written agreement documenting this plan either, at least he’s consistent. So then it started. LEB stopped giving Malibu their cut for enforcing Malibu’s own copyrights. Five months go by and LEB had provided Malibu with next to nothing regarding the money they’ve hoarded. Malibu then hires Pillar Law Group, APLC (“Pillar” from now on). Pillar contacts Lipscomb who indicates that “Malibu is winding its copyright campaign down because it is no longer profitable.” Yeah, you heard that right.
I will spare the nitty gritty in between, but it took Lipscomb until April 2016 to send Malibu a proposed agreement. The agreement indicated that LEB would be “winding down” Malibu’s copyright enforcement program. From April 15-17 2016, LEB provided Malibu with bank statements for November 2015 through to March 2016. This is all the documentation that was provided in regard to the money that was withheld. The final uppercut to be thrown by Lipscomb came in the “New Malibu Deal,” which was sent to Malibu on April 17, and no it was not drafted by FDR (ha…). The New Malibu Deal indicated that LEB would withdraw as counsel from all pending cases where they were representing Malibu. Pillar indicated that this would cause Malibu significant losses. Lipscomb doesn’t seem to care. Well he’s going to, because now Malibu is suing him and LEB for Professional Negligence, Breach of Fiduciary Duty, Accounting, and Violation of Business & Professions Code § § 17200 et seq. Essentially, Malibu wants their money, and they want Lipscomb to pay for flat leaving them in all of their pending cases, however unsavory the cases may be. The battle of the troll porn company versus the troll law firm has commenced.
Author, Martin Passante, is a rising second year student at Brooklyn Law School, where he specializes in intellectual property and entertainment law. Marty plays rugby, video games, and loves binging YouTube videos. When he’s not busy at work for Morrison/Lee, you can find him on Twitter @passantePROse.