From Law360

Ruling against a porn studio that has filed thousands of copyright lawsuits over the past three years, a New Jersey federal magistrate on Thursday became the latest judge to sharply criticize the company’s mass litigation tactics.

For more on this story go to: https://www.law360.com/articles/1213323/judge-won-t-let-litigious-porn-co-unmask-downloaders

Related story:

A firm that invested in the business of suing thousands for copyright infringement says it hasn’t seen a penny

From Hollywood Reporter

(See a clarification regarding this article at the bottom.)

Malibu Media didn’t invent the art of filing mass litigation with the hopes of shaming porn aficionados into settlements, but in the past few years, the studio’s lawsuits against thousands of individuals have become notorious. Now, the husband-and-wife team behind the operation may be facing a reckoning from a new suit that alleges their racket has generated over $26.5 million with not a penny to show their financiers.

The complaint, filed Monday in Los Angeles Superior Court, targets Colette Pelissier and Brigham Feld, responsible for such films as My Neighbor’s Wife and Perfect Threesomes. At Malibu Media, the duo run runs X-Art, but that’s not what makes them so infamous in legal circles. Instead, it’s the countless lawsuits filed since 2012 against anonymous “John Does” using BitTorrent to download pornography. In the years since Malibu Media became nearly synonymous with copyright trolling, courts have been flooded with hard questions about due process. And the company has faced its fair share of legal troubles along the way.

Now Malibu Media is on the defensive due to a complaint filed by Genova Capital and Warmblood Inc., both run by Joshua Hunter and Robert Cook.

According to the legal action, Pelissier and Feld’s “high-end lifestyle has begun to outstrip their business income.”

Genova says it first extended $2.5 million in loans to the duo in 2016 to assist them in fending off an ownership dispute over a real estate property in Malibu. Later, Warmblood invested $400,000 in Malibu Media.

“On information and belief, in late 2018, Malibu Media was in need of a capital infusion to continue its Copyright Enforcement Efforts,” states the complaint. “Pelissier sought financial help.”

Pursuant to the agreement, according to the suit, Malibu Media got consulting services in the form of financial forecasting and budgeting and gave up 50 percent of its net recovery from the mass copyright litigation, as well as a 50 percent interest in the copyrights to the adult films.

In 2018 alone, continues the complaint, Malibu Media’s litigation stampede generated over $2.8 million.

But the plaintiffs say they haven’t seen any of the money and can’t get an accounting. They further allege, “On information and belief, Defendants are shuttling assets and interests out of Malibu Media and into more obscure entities, including the shell entity holding companies: Click Here, Colette Holdings, Colette Properties, Colette Production, Inc., Colette Productions LLC, and/or Zo Digital.” 

The lawsuit reports that there are now efforts underway to foreclose on promissory notes. This action raises breach-of-contract claims with monetary damages demanded.

Neither Pelissier nor Feld could be reached for comment.

Update 8/14 1 pm PST: Pelissier and Feld have filed their own complaint in Los Angeles against Edgar Sargsyan, an attorney they blame for allegedly failing to turn over nearly $2.4 million in funds from the copyright litigation.

CLARIFICATION: THR accessed the Genova Capital complaint (see here) on August 12, 2019, through the Los Angeles Superior Court’s Media Access Portal (“MAP”). The portal was established by the Superior Court in 2018, in response to a federal district court’s order recognizing that a “qualified First Amendment right of timely access to [civil] complaints attaches when new complaints are received by a court,” regardless of when the court processes the complaints. To guarantee that timely right of access to newly filed complaints, the Superior Court decided to “allow access through MAP to civil data and documents, including complaints of unlimited jurisdiction that have been received from a litigant but not yet processed.” After the Genova Capital complaint was electronically filed with the Superior Court and the Court made it available to the media through MAP, the complaint subsequently disappeared from the portal. Court representatives wouldn’t address the reason for the complaint’s disappearance and counsel for Genova Capital didn’t respond to a request about the status of the dispute.

For more on this story go to: https://www.hollywoodreporter.com/thr-esq/malibu-media-litigious-porn-studio-sued-allegedly-cheating-financiers-1231192