Bribery, gay porn, and copyright trolls: The rise and fall of lawyer Marc Randazza

Source: Arstechnica

While Dunlap shared some documents from the arbitration with Ars, he didn’t share documents related to Randazza’s Xvideos work due to ongoing legal proceedings. However, Dunlap said that those documents show Randazza took a $35,000 retainer from Xvideos—and continued to bill that company every month. While advising Liberty not to sue Xvideos, Randazza had been working for the company.

For his part, Randazza doesn’t deny working for Xvideos. But he claims the work wasn’t a conflict, despite the language in his contract promising to “taper down” outside work.

"[Liberty's] Corbin Fisher contemplated and encouraged Mr. Randazza to maintain an outside legal practice," Randazza wrote in his arbitration claim. "Randazza was under no obligation to clear any other representation with Gibson or Corbin Fisher, and in many circumstances did not... Nevertheless, Randazza never entered into representation where a conflict was present, and if any conflict were to appear, resolved it by discharging the other client."

Randazza concluded that his "tenure at Corbin Fisher was, by all metrics, a resounding success."

Where Randazza saw success and an understanding he'd work elsewhere, Liberty saw serious betrayal.

Pursuing “thieving little shits”

The lawsuit against Xvideos never materialized; instead, Randazza developed an alternative strategy to go after individual Internet pirates. His plan was initially met with skepticism at Liberty but was ultimately embraced.

"We trusted him to develop a plan to pursue infringers, and he came up with these plans to go after individual torrenters," Dunlap said. "Well, it didn't take much research to know, none of that ended well for MPAA and RIAA. But he was adamant that it was sound legal theory. Despite objections, we allowed him to proceed."

It turned out to be a bad move, Dunlap said, with the expense of the lawsuits wiping out any possible profits. "It was a mess," he said. "We made absolutely nothing off that. He went and hired his friends as local counsel."

Mass-copyright lawsuits were—and are—a controversial business, but Randazza told the press that he was doing them the right way. He offered an “amnesty” program, promising that downloaders who paid $1,000 to Corbin Fisher wouldn't be sued.

While the litigation itself was a bust, Dunlap recalled the amnesty being fairly effective. He doesn't remember the number of people that paid, but he estimated it in "the dozens." The numbers were high enough that Randazza wanted to proceed to a second round, one where the amnesty cost would rise.

This didn't happen. Instead, Liberty's campaign against pirates came under heavy fire. Longtime critics of “copyright trolls” were joined by some gay bloggers and writers, all claiming Corbin Fisher was using extortionate tactics against a vulnerable population.

"When these firms’ lawyers come hunting for people illicitly sharing porn movies, inevitably they will turn up the names and addresses of gay kids still living a closeted life under their parents’ roof," the blog Queerty wrote in a 2011 post. Soon after, the blog featured posts by a gay man who said he was terrified of being outed by Corbin Fisher lawsuits.

"It blind-sided us," said Dunlap. "We discussed what do we do if someone reaches out and says—'I'm not of age. The reason I torrent stuff is because I can't get it legally.' We had a policy that if someone reached out directly, we'd drop it. But it was a valid concern."

Randazza was less forgiving in his own response to Queerty. "Liberty Media produces straight content, too," he wrote. "So any thieving little shit who gets caught can very easily lie to his parents that he was looking at straight porn."

In response, Queerty pointed out an obvious fact: in any copyright lawsuit, Liberty would have to cite exactly what content was being infringed.

Randazza's "response was harsh, and callous, and rude," Dunlap said. "It was typical him. And it was a mess."

In the company's view, the PR damage from the "thieving little shits" comment was serious. Randazza was told not to make any more public statements about the anti-piracy campaign. Later that year, it fizzled out.

Dunlap said that, in hindsight, the campaign was "not the right approach." He came to believe that the whole thing had been devised by Randazza since the "legitimate targets" were off-limits. "Going after a torrenter made no sense," Dunlap said, "but it helped justify his salary and keep him busy."

For his part, Randazza said the campaign was simply him carrying out Liberty's orders. In his arbitration claim, he suggests he didn't care for the job, writing that "Mr. Gibson redefined Mr. Randazza's position as one focused on 'trolling' for copyright infringement settlements."

A troll-slayer's bounty

Randazza's role in defending the Corbin Fisher mass-copyright lawsuits was a surprise to copyright law observers, in large part because he was making a name for himself by defending bloggers against one of the most well-known "copyright trolls," a veritable lawsuit factory called Righthaven.

Righthaven burst onto the scene in 2010 with a surprising plan to save newspapers from declining revenues. The company, led by Las Vegas attorney Steve Gibson (no relation to Liberty CEO Jason Gibson), acquired copyrights from big papers in Las Vegas and Denver and then sued small bloggers who reproduced the content on their sites.

Randazza defended several of those bloggers pro bono with Liberty’s blessing and support.

"We felt if we help out with free speech cases, help the little guy, it could offset negative PR and be a good gesture," Dunlap said. "We're all believers in the First Amendment—we produce adult content."

In the interviews he gave about Righthaven, Randazza didn't often mention that he was general counsel at Liberty, but the work was done in Liberty Media's office, just down the hall from Dunlap and Gibson. All the while, Randazza’s website continued to show Randazza Legal Group as a law firm, even though it wasn’t registered with the state of Nevada as such. Corbin Fisher was listed as only one of many clients.

"We thought that was a paperwork kind of thing—housekeeping," said Dunlap. "[Randazza] said it would shield us from certain kinds of liabilities."

Righthaven collapsed when a judge found that its copyright assignments were invalid. The company ultimately paid Randazza $55,000 in legal fees, which he kept. In the later arbitration, Liberty said that since he was doing pro bono work as an employee, that cash should have gone to the company. But Randazza argued that the work was done “100 percent by my law firm" and that he was justified in keeping the money. The arbitrator disagreed, ordering the money to be paid back to Corbin Fisher and finding that Randazza was "unjustly enriched" by his "ostensibly pro bono representation" in the Righthaven cases.

“At least used BMW money”

The multi-year arbitration that revealed all the information above ended this summer. It was disastrous for Randazza. The arbiter ultimately found (PDF) that Randazza "secretly negotiated" a $75,000 bribe that did not result in payment, Randazza did unauthorized outside work, and he wrongly kept that $55,000 payment from Righthaven. The arbiter ordered Randazza to pay his former employer more than $600,000. Now, Randazza also faces state bar complaints in Nevada and Florida accusing him of unethical behavior, which could threaten his ability to practice law in those states.

The whole dispute seems to have ended so poorly for Randazza that it’s easy to forget he was the party who began it. When Randazza filed a claim shortly after he departed from the company in 2012, Liberty had actually offered him money to settle it.

"He wanted to run us into the ground," Dunlap said. "At one point, we offered him money, over $200,000 just to go away. We didn't feel like he was entitled to it, but we knew he was an attorney and could make things unpleasant."

Randazza didn't fare much better on his "hostile workplace" claims. In addition to the porn shoot in his office, Randazza claimed that CEO Jason Gibson and another Liberty exec engaged in oral sex in the back of his car while Randazza was driving back from a company party, greatly upsetting him.

"Don't jizz on my briefs," wrote Randazza .

Dunlap said the car sex never happened. As for the sex in Randazza's office, that was run-of-the-mill hijinks at the porn studio—and he said Randazza was aware of it.

"It was standard practice for us to use most any space in the office to film scenes," said Dunlap. "He was told about it. In fact he offered up his home and office, just to mix up the scenery."

"Don't jizz on my briefs," wrote Randazza in a series of texts about the shoot that came out during the arbitration. The arbiter called it a "crude possible sexual/legal 'double entendre,'" while Dunlap pointed to such joking as proof that Randazza approved.

The arbiter didn't directly address whether the sex claims were true, but he did rule that any sexual allegations "had nothing whatsoever to do with any decision… to terminate Mr. Randazza's employment."

The final matter was the settlement from Oron, the cyberlocker site that agreed to pay Liberty $650,000—and that inadvertently tipped Gibson off to Randazza's side work. It wasn't the first time Randazza had asked for extra payments in exchange for not suing. In an e-mail chain that Dunlap showed to Ars, regarding an earlier lawsuit against a site called TNAFlix, Randazza was adamant about how much he'd need to be paid to ensure no more lawsuits would be filed.

"I think that there needs to be a little gravy for me," Randazza wrote in an e-mail to the attorney for TNAFlix, who would later represent Oron as well. "And it has to be more than the $5K you were talking about before. I'm looking at the cost of at least a new Carrera in retainer deposits after circulating around the adult expo this week. I'm gonna want at least used BMW money."

In a follow-up e-mail, Randazza continued to push fees. "I spoke to my partner, who was adamant that we should earn $100K if we're to never be able to sue FF Magnat, Bochenko, Novafile.com, oron.com, etc. forever and ever," he wrote. "I got him to go with $75K. But for that, we'll provide some really great value—including a jurisdiction derailing plan that you'll drool over. What do you think?"

At one point, Randazza said the $75,000 was to be released to a trust "for a settlement with me personally." He explained, "It's not a retainer for services, but rather a settlement. That might work."

The TNAFlix $75,000 was never paid, but the demand resurfaced in the Oron litigation. This time, the $75,000 eventually appeared on the invoice seen by Gibson, though that too was never paid. Indeed, Randazza said, it was never meant to be paid.

In court papers, Randazza said the negotiations for the $75,000 were "a bluff, to increase available settlement funds" and that there was no proof "he intended to consummate such a negotiation."

But the arbiter characterized the money as a "bribe."

"Defendants in my copyright cases frequently ask if they can hire me once the case is over," Randazza told Ars. "I jokingly refer to that as, 'They want to bribe me to never sue them again.' They [Liberty] knowingly took it out of context."

"His decision is such a one-sided screed… that it cannot be taken as a reliable evaluation of Mr. Randazza's work or his character."