UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA ) ) )

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1 0 0 ROBBINS GELLER RUDMAN & DOWD LLP JOHN J. STOIA, JR. () RACHEL L. JENSEN () PHONG L. TRAN (0) West Broadway, Suite 00 San Diego, CA 0 Telephone: /-0 /- (fax) johns@rgrdlaw.com rachelj@rgrdlaw.com ptran@rgrdlaw.com Class Counsel In re GROUPON MARKETING AND SALES PRACTICES LITIGATION UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA ) ) ) No. :-md-0-dms-rbb PLAINTIFFS MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO OBJECTOR PADRAIGIN BROWNE S MOTION FOR ATTORNEY S FEES AND COSTS AND FOR SERVICE AWARD DATE: February, 0 TIME: :0 p.m. CTRM: A JUDGE: Hon. Dana M. Sabraw _

2 0 0 TABLE OF CONTENTS Page I. INTRODUCTION... II. RELEVANT FACTUAL BACKGROUND... A. Hansmeier s Well-Documented Pattern of Deceit and Abuse of the Judicial Process.... Ingenuity v. Doe LLC, Case No. :-cv--odw (C.D. Cal. May, 0).... Lightspeed Media Corp. v. Duffy, F.d (th Cir. 0) ( Lightspeed I ).... Lightspeed Media Corp., v. Smith, No. :-cv-- DRH-SCW (S.D. Ill. June, 0) ( Lightspeed II ).... The Minnesota Bar Proceedings... B. Hansmeier s Bankruptcy Proceedings... 0 C. Hansmeier s Involvement in This Case... III. ARGUMENT... A. Hansmeier Has Failed to Demonstrate that He Is an Attorney in Good Standing to Practice Before This Court... B. Hansmeier Was Barred from the Ninth Circuit Proceedings and Cannot Seek Attorneys Fees in This Case... C. Hansmeier Did Not Provide a Substantial Benefit to the Settlement Class... D. Hansmeier Has Failed to Provide Any Evidentiary Support for His Fee Demand... 0 E. Hansmeier s Fee Demand Is Improper... F. Hansmeier Lacks Standing to Bring a Claim for Attorneys Fees and Costs Under the Federal Bankruptcy Code... G. Padraigin Browne Is Not Entitled to a Service Award... IV. CONCLUSION... _ -i- :-md-0-dms-rbb

3 0 0 CASES TABLE OF AUTHORITIES Page Ah Quin v. Cnty. of Kauai DOT, F.d (th Cir. 0)..., Dennis v. Kellogg Co., No. 0cv, L(WMC), 0 U.S. Dist. LEXIS 0 (S.D. Cal. Jan., 0)... Estate of Spirtos v. One San Bernardino Cty. Superior Ct. Case, F.d (th Cir. 00)..., Fraley v. Facebook, No. C - RS, 0 U.S. Dist. LEXIS (N.D. Cal. Feb., 0)... Fraley v. Batman, No. -, 0 U.S. App. LEXIS (th Cir. Jan., 0)..., Guava LLC v. Merkel, No. -CV--0, 0 Minn. Dist. LEXIS (Minn. Dist. Ct. Aug., 0)...,,, In re Bluetooth Headset Products Liability Litig., F.d (th Cir. 0)... In re Moore, 0 B.R. (Bankr. C.D. Cal. 0)... In re Prudential Ins. Co. of Am. Sales Practices Litig., F. Supp. d (D.N.J. 00)..., 0 Ingenuity LLC v. Doe, No. :-cv--odw(jcx), slip op. (C.D. Cal. May, 0)... passim Lightspeed Media Corp. v. Duffy, F.d (th Cir. 0)... passim Lightspeed Media Corp. v. Smith, No. :-cv--drh-scw, slip op. (S.D. Ill. June, 0)...,, _ -ii- :-md-0-dms-rbb

4 0 0 Page Payless Wholesale Distribs., Inc. v. Alberto Culver (P.R.) Inc., F.d 0 (st Cir. )... Ramirez v. Manpower, Inc., No. -cv-00-blf, 0 U.S. Dist. LEXIS (N.D. Cal. July 0, 0)... Reynolds v. Benefit Nat l Bank, F.d (th Cir. 00)... Rodriguez v. Disner, F.d (th Cir. 0)..., Rose v. Bank of Am. Corp., No. :-cv-00-ejd, 0 U.S. Dist. LEXIS 0 (N.D. Cal. May, 0)... Shames v. Hertz Corp., No. 0-CV--MMA(WMC), 0 U.S. Dist. LEXIS (S.D. Cal. Oct., 0)..., Shaw. Toshiba Am. Info. Sys., Inc., F. Supp. d (E.D. Tex. 000)... Smith v. Arthur Andersen LLP, F.d (th Cir. 00)... Vizcaino v. Microsoft Corp., 0 F.d 0 (th Cir. 00)...,,, STATUTES, RULES AND REGULATIONS U.S.C....,... U.S.C.... _ - iii - :-md-0-dms-rbb

5 0 0 Page Federal Rules of Civil Procedure Rule... Local Rules Rule.... Rule.(c)... Rule.(c)()...,,, Rule.(d)... _ -iv - :-md-0-dms-rbb

6 0 0 Plaintiffs respectfully submit this opposition to the motion for attorney s fees and costs and service award submitted by objector Padraigin Browne ( Browne ) and her counsel (and husband), Paul Hansmeier ( Hansmeier ). I. INTRODUCTION Paul Hansmeier has built a lucrative career out of misleading courts around the country, using deception and outright fraud to exploit the legal system for his own personal gain. Hansmeier is one of the masterminds of the so-called porno trolling collective, a notorious enterprise through which he and others created offshore, shell corporations from which they purchased copyrights to pornographic movies, and then sued thousands of unwitting internet users for downloading such content. For a while, Hansmeier and his cohorts (including Brett Gibbs who previously appeared in this case on behalf of Browne in 0) were very successful in implementing this scheme, reaping millions of dollars from individuals who agreed to settle for a few thousand dollars, rather than challenge the dubious merits of these cases and having their names associated with illegally downloading porn. Id. at. Courts ultimately caught on to what Hansmeier and his partners were doing and recognized that they were abusing the legal system to extort settlements. In Ingenuity LLC v. John Doe, Judge Wright of the Central District of California found that Hansmeier and his partners were engaging in a fraudulent scheme centered around the filing of vexatious litigation designed to coerce settlement. Id. at. According to Judge Wright, Hansmeier and his partners demonstrated [a] willingness to deceive not just this Court, but other courts where they have appeared. Id. at. This deception involved representations [made by Hansmeier, Gibbs and others] about their operations, relationships, and financial interests [which] have varied from feigned See Declaration of Phong L. Tran ( Tran Decl. ), Ex. A, Ingenuity LLC v. Doe, No. :-cv--odw(jcx), slip op. at - (C.D. Cal. May, 0). _ -- :-md-0-dms-rbb

7 0 0 ignorance to misstatements to outright lies. Id. Based on the various acts of fraud and deceit perpetrated by Hansmeier and his partners, Judge Wright imposed a significant monetary sanction and reported Hansmeier and his partners to various federal and state bars, the United States Attorney s Office, the Internal Revenue Service, and the Central District of California Standing Committee on Discipline. Id. This was just the beginning of the firestorm Hansmeier would face. Following Judge Wright s order of sanctions in Ingenuity, a number of other courts have imposed sanctions on Hansmeier, or held him in contempt for various acts of misconduct, abuse of process, and outright lying to the court. See, e.g., Lightspeed Media Corp. v. Duffy, F.d, (th Cir. 0) (holding Hansmeier in contempt for presenting halftruths at the show-cause hearing, showing clear disrespect for the court ); Tran Decl., Ex. B, Lightspeed Media Corp. v. Smith, No. :-cv--drh-scw, slip op. (S.D. Ill. June, 0) (assessing sanctions of $,.00 against Hansmeier, in addition to original sanction award of $,00.00); Tran Decl., Ex. C, Petition for Disciplinary Action (referencing Guava LLC v. Merkel, No. -CV--0, 0 Minn. Dist. LEXIS (Minn. Dist. Ct. Aug., 0)) (imposing $,.00 in sanctions against Hansmeier s Alpha Law Firm for bad faith litigation). All told, Hansmeier has been ordered to pay hundreds of thousands of dollars in sanctions and contempt awards. On October, 0, the Minnesota Office of Lawyer s Professional Responsibility filed a Petition for Disciplinary Action ( Petition ) seeking Hansmeier s disbarment in Minnesota, where he is admitted to practice. Tran Decl., Ex. C. The Petition describes Hansmeier s pattern of misconduct in four separate cases (although there are others) and lists a multitude of professional violations, including making false and misleading statements to the court, committing fraud on the court, engaging in bad faith litigation, improperly transferring funds to avoid paying judgments (including $0,000 to his wife and objector here, Padraigin Browne), failing to pay sanctions and Unless otherwise noted, citations are omitted and emphasis is added, here and throughout. _ -- :-md-0-dms-rbb

8 0 0 attorneys fees assessed against him, and disregarding court orders. Id. The Petition points out that Hansmeier committed many of these egregious acts while practicing in California district courts, in direct violation of the California Rules of Professional Conduct. See Tran Decl., Ex. C (Petition), 0,. In moving the Court for an award of attorneys fees and costs in this case, Hansmeier does not disclose these sordid facts. Nor does Hansmeier mention that prior to the appellate proceedings in this case, the Ninth Circuit ordered his application for admission be held in abeyance pending the outcome of his referral to the Minnesota State Bar and the Central District of California Standing Committee on Discipline. See Appellate Dkt. No. (Order) at. The Ninth Circuit specifically ordered Hansmeier to withdraw from the case and obtain new counsel for Browne. As a result, Hansmeier did not and could not participate in the Ninth Circuit proceedings, and thus has no legitimate claim to fees in this case. Hansmeier s only contribution to this case was a brief, telephonic appearance at the final approval hearing for the 0 Settlement. He did not file Browne s written objection, or the reply brief submitted on her behalf. The negligible amount of work by Hansmeier, prior to being rejected by the Ninth Circuit, does not warrant the award of any fees, much less the exorbitant amount he now seeks. Notably, Hansmeier fails to provide any evidence whatsoever to support his claim for fees and costs, highlighting the dubious and arbitrary nature of the request. The Court should also deny Hansmeier s motion because he cannot even demonstrate that he is qualified to appear and practice law in this District. See Local Rule.(c)(). In light of the Petition for his disbarment and his long record of sanctionable conduct in California and elsewhere, Hansmeier has not and cannot establish good standing or good moral character to warrant his admission into this District and practice before this Honorable Court. Furthermore, Hansmeier s motion should be denied because he cannot demonstrate that Browne s objection resulted in an actual increase or enhancement to _ - - :-md-0-dms-rbb

9 0 0 the settlement fund, as mandated by the Ninth Circuit. Here, the value of the Settlement ($. million) did not change from the previous settlement; thus, Hansmeier cannot take any credit for increasing or enhancing the relief to the Class. Because the settlement amount remains unchanged, Hansmeier has no basis to seek attorneys fees here. See Vizcaino v. Microsoft Corp., 0 F.d 0, 0 (th Cir. 00) (objectors were not entitled to fees because they did not increase the fund ). Even leaving aside the lack of merit of his motion, Hansmeier has no standing to request fees because his bankruptcy has been converted to a Chapter liquidation, due to his fraud on the various courts and creditors. Under federal bankruptcy laws, the Chapter bankruptcy trustee (not the debtor) has the exclusive authority to bring a legal claim. See U.S.C. ; see also Estate of Spirtos v. One San Bernardino Cty. Superior Ct. Case, F.d, (th Cir. 00). Hansmeier, as a Chapter debtor, is not the proper party to bring a claim for any fees and costs here. Finally, Browne s request for a service award should be denied for one of the many reasons that Hansmeier is not entitled to recover attorneys fees: Browne cannot demonstrate her efforts actually increased or substantially enhanced the settlement. Moreover, the $,00 service award that she seeks is completely out of line with the requested awards of $00 to the Class Representatives, who have put considerably more time and effort into this litigation. Browne s request should be denied. For these reasons, Plaintiffs respectfully request that the Court deny Browne and Hansmeier s motion of fees and costs and service award. II. RELEVANT FACTUAL BACKGROUND A. Hansmeier s Well-Documented Pattern of Deceit and Abuse of the Judicial Process The lurid details of Hansmeier s fraudulent legal practice read like a John Grisham novel and unfortunately are too extensive to fully unpack in the limited pages of this brief. Plaintiffs merely scratch the surface by highlighting recent proceedings in which Hansmeier has been sanctioned or disciplined for deceiving courts and _ -- :-md-0-dms-rbb

10 0 0 engaging in other misconduct, which alone are more than sufficient to deny his right to appear before and practice in this Court. See Civil Local Rule.(c)().. Ingenuity v. Doe LLC, Case No. :-cv--odw (C.D. Cal. May, 0) The Ingenuity case involved extended sanction proceedings, including an Order to Show Cause during which Hansmeier and others invoked their Fifth Amendment privilege and refused to testify. Tran Decl., Ex. A, Ingenuity, slip op at & n.. In that case, Judge Wright found that Hansmeier and his partners were members of a porno-trolling collective, which operated like a criminal RICO enterprise ( only enterprise they resemble is RICO ). Id. at, 0. Judge Wright went to great lengths to describe how their enterprise operated and the manner in which Hansmeier and his partners abused the legal system and committed fraud to extort quick settlements: Plaintiffs [Hansmeier and his partners] have outmaneuvered the legal system. They ve discovered the nexus of antiquated copyright laws, paralyzing social stigma, and unaffordable defense costs. And they exploit this anomaly by accusing individuals of illegally downloading a single pornographic video. Then they offer to settle for a sum calculated to be just below the cost of a bare-bones defense. For these individuals, resistance is futile; most reluctantly pay rather than have their names associated with illegally downloading porn. So now, copyright laws originally designed to compensate starving artists allow, starving attorneys in this electronic-media era to plunder the citizenry. * * * This nationwide strategy was highly successful because of statutory copyright damages, the pornographic subject matter, and the high cost of litigation. Most defendants settled with the Principals, resulting in proceeds of millions of dollars due to the numerosity of defendants. These settlement funds resided in the Principals accounts and not in accounts belonging to AF Holdings or Ingenuity. No taxes have been paid on this income. For defendants that refused to settle, the Principals engaged in vexatious litigation designed to coerce settlement. These lawsuits were filed using boilerplate complaints based on a modicum of evidence, calculated to maximize settlement profits by minimizing costs and effort. Id. at -,. AF Holdings an offshore, West Indies company, is owned by Hansmeier. See Tran Decl., Ex. D (Trustee Motion) at. _ - - :-md-0-dms-rbb

11 0 0 Judge Wright found that in operating the enterprise, Hansmeier and his partners demonstrated their willingness to deceive not just this Court, but other courts where they have appeared. Id. at. Judge Wright noted that Hansmeier and the other principals of the enterprise went as far as committing fraud on the court by stealing the identity of Alan Cooper (a groundskeeper employed by one of the principals), fraudulently holding Cooper out as an officer of a shell company holding copyrights, and forging his signature on a copyright assignment for the purpose of pursuing litigation. Based on these and other acts of brazen misconduct and relentless fraud, Judge Wright imposed sanctions of more than $,000 on Hansmeier. Id.at 0. In addition to imposing sanctions, the court held that Hansmeier and his partners suffer from a form of moral turpitude unbecoming of an officer of the court, and referred them to their respective state and federal bars, the United States Attorney for the Central District of California, the Criminal Investigation Division of the Internal Revenue Service, the Central District of California Standing Committee on Discipline, and all judges before whom the attorneys have pending cases. See id. at 0-.. Lightspeed Media Corp. v. Duffy, F.d (th Cir. 0) ( Lightspeed I ) In Lightspeed I, the Seventh Circuit considered the appeals brought by Hansmeier and his partners of a district court order imposing monetary sanctions, and subsequent order holding them in contempt for failure to pay those sanctions. Hansmeier and his partners were sanctioned after defendants challenged their frivolous copyright claims, causing them to withdraw from the case. Finding that the litigation smacked of bullying pretense, the district court ordered Hansmeier and his partners to pay attorneys fees and costs to the defendants. See id., F.d at 0. After Hansmeier and his partners failed to timely pay the sanctions, the district court held them in Alan Cooper ultimately sued Hansmeier s partner John Steele, Hansmeier s firm Prenda Law, AF Holdings (offshore company) and others for identity theft in Minnesota State Court. The court found that Cooper was entitled to a judgment against Prenda Law in the amount of $,000 as damages for humiliation, as well as $0,000 in punitive damages. Tran Decl., Ex. O. _ - - :-md-0-dms-rbb

12 0 0 contempt, noting that [t]he magnitude of harm was significant, particularly as the underlying case was baseless and a misuse of courts. Id. at. The court also found that Hansmeier and his partners had made misrepresentations and presented halftruths at the show-cause hearing, showing clear disrespect for the court. Id. The Seventh Circuit affirmed both orders, finding that the district court acted within its discretion in imposing sanctions and holding them in contempt. Id.. Lightspeed Media Corp., v. Smith, No. :-cv-- DRH-SCW (S.D. Ill. June, 0) ( Lightspeed II ) Lightspeed II involved separate contempt proceedings that arose after Hansmeier made representations to the district court that he was unable to pay the sanctions imposed against him. To avoid the judgment, Hansmeier claimed he was insolvent and filed a memorandum with the court, attesting that the sanctions posed a crippling financial liability on him. Tran Decl., Ex. B, Lightspeed II, slip op. at. That lie was eventually exposed. The parties seeking to recover the sanction award presented evidence that Hansmeier had transferred close to $00,000 to a company called Monyet LLC, of which Hansmeier was the sole member, manager and signatory of the accounts. Id. at. During a debtor s exam, Hansmeier testified that Monyet was set up as a vehicle to fund a trust (the Mill Trust) for his son, purportedly for estate planning purposes. Id. However, as discussed infra, the U.S. Trustee of Hansmeier s bankruptcy successfully moved in December 0 to have Hansmeier s bankruptcy converted to a Chapter liquidation due, in large part, to a Mill Trust he created in 0 (of which his then girlfriend and now wife Browne was trustee) which held Monyet to hide and conceal cash from creditors. Tran Decl., Ex. D (Trustee Motion) at. The U.S. Trustee discovered that funds in Monyet went through a Scottrade account secretly funded by Hansmeier. Id. at -. $0,000 was secretly used by Hansmeier for his personal expenditures, including payment of appellate bonds and attorneys fees, a loan to the President of a South Miami Beach company disguised as a payment of Attorney Fees to purchase property, and approximately $,000 in _ - - :-md-0-dms-rbb

13 0 0 loans to his Class Justice LLC law firm. Further, Hansmeier transferred $0,000 to Browne. See id. at -. Judge Herndon of the Southern District of Illinois found that the newly discovered evidence of these expenditures demonstrated Hansmeier had access to the Monyet funds, both before and after he claimed insolvency. Tran Decl., Ex. B, Lightspeed II, slip op. at. Judge Herndon subsequently held Hansmeier in contempt, finding that he had made contemptuous statements about his purported insolvency. The court then assessed sanctions in the amount of $, against Hansmeier, in addition to the $,00 in original sanctions. Id. at,.. The Minnesota Bar Proceedings On October, 0, the Minnesota Office of Lawyers Professional Responsibility filed a Petition seeking Hansmeier s disbarment. The -page Petition describes in painstaking detail Hansmeier s pattern of misconduct in four separate cases, including in Ingenuity and Lightspeed described herein. Tran Decl., Ex. C. Count Guava v. Merkel The first count of the Petition concerns Hansmeier s role in bringing a frivolous copyright lawsuit against Spencer Merkel for allegedly downloading a pornographic movie. Id. at. Merkel claimed he was set up as a sham defendant so that Hansmeier could obtain the contact information of other individuals during discovery (so Hansmeier could sue them later). Id. at. After the case was dismissed, a Minnesota state court imposed $, in sanctions against Hansmeier s Alpha Law Firm for bad faith litigation. Id. at. To avoid paying the judgment, Hansmeier transferred assets from Alpha Law to Monyet (the sham entity described above). Id. at -. The Petition describes how Hansmeier made $0,000 in wire transfers to pay his personal expenditures, including payments to insurance companies for bonds on appeal of attorneys fees, payments to the lawyers defending him, $0,000 in transfers to Browne, and $,000 to his law firm Class Justice, PLLC. Id. at -; Tran Decl., Ex. D (Trustee Motion) at -. The Guava court found Hansmeier was acting as alter ego of Alpha Law and held him liable for sanctions. Tran Decl., Ex. C at. _ - - :-md-0-dms-rbb

14 0 0 Based on this misconduct, the Minnesota Office of Lawyers Professional Responsibility found that Hansmeier violated the Minnesota Rules of Professional Conduct through false and misleading statements to the court, bad faith litigation, improperly transferring funds to avoid paying judgments in the action, and failing to pay attorneys fees assessed against him. Id. at 0-. Count Lightspeed Media Corp. v. Smith (Lightspeed II) The second count of the Petition recounts Hansmeier s misconduct in Lightspeed II, described above. Id. at. The Petition focuses on Hansmeier s attempts to distance himself from the Prenda law firm (now dissolved) the law firm of record that brought the frivolous copyright lawsuit. Id. at -. After the lawsuit was dismissed, the court ordered the Prenda attorneys to pay fees and costs, but Hansmeier tried to avoid the assessment by claiming that his appearance in the case was through his other law firm, the Alpha law firm, not the Prenda law firm. Id. at -. The court rejected Hansmeier s testimony, finding that it was contradicted by the statements of other witnesses who confirmed Hansmeier s affiliation with Prenda, and his own statements confirming he was of counsel to Prenda. Id. Based on Hansmeier s misconduct in Lightspeed II, the Minnesota Office of Lawyers Professional Responsibility found that he had violated the Illinois Rules of Professional Conduct through the frivolous lawsuit, false and misleading statements regarding his involvement with Prenda, failing to pay attorneys fees assessed against him, and making false statements with his respect to his inability to pay sanctions. Id. Count - Ingenuity LLC v. Doe The third count of the Petition concerns Hansmeier s conduct in the Ingenuity case before Judge Wright in the Central District of California, described above. Id. at. The Minnesota Office of Lawyers Professional Responsibility substantially adopted the reasoning of Judge Wright in Ingenuity and found that Hansmeier violated the California Rules of Professional Conduct by bringing an action without merit and failing to appear at a hearing ordered by the court. Id. at. _ - - :-md-0-dms-rbb

15 0 0 Count AF Holdings, LLC v. Navasca The fourth count in the Petition concerns AF Holdings, LLC v. Navasca, in which attorneys from the Prenda law firm filed a frivolous copyright lawsuit on behalf of an offshore company controlled by Hansmeier, which was later dismissed after defendants put up a fight. Id. at. After the dismissal, Judge Chen of the Northern District of California assessed fees and costs against Prenda s client, AF Holdings (of which Alan Cooper was a straw owner and others affiliated with Hansmeier). Id. at 0-. Following the same modus operandi as in Lightspeed, Hansmeier testified that he was not employed by Prenda, nor had any formal affiliation with the firm, which as noted were blatant lies. Id. at -0. Based on Hansmeier s misconduct in AF Holdings, LLC, the Minnesota Office of Lawyers Professional Responsibility found he violated the California Rules of Professional Conduct through a frivolous lawsuit, false and misleading testimony and fraud on the court. Id. at. In light of this pattern of egregious misconduct, the Minnesota Office of Lawyers Professional Responsibility recommended Hansmeier s disbarment. Id. B. Hansmeier s Bankruptcy Proceedings On July, 0, Hansmeier filed a petition for Chapter bankruptcy just days before he had to respond to sanctions. Hansmeier filed bankruptcy to evade judicial process and avoid payment of the sanctions and assessments. See Tran Decl., Ex. E, Bkr. Hrg. Tr. at :-: ( The timing of the filing of the Petition is a clear indication that the Debtor was attempting to avoid disclosure of the financial information as required by the June th order to show cause. ). On December, 0, U.S. Bankruptcy Judge Sanberg converted Hansmeier s Chapter petition for bankruptcy to a Chapter liquidation, based on Hansmeier s demonstrated prepetition and post-petition bad faith. Id. at 0:-. A review of Hansmeier s Chapter petition, the U.S. Trustees Motion to Convert to Chapter Liquidation, and Judge Sanberg s resulting order reveals these facts: _ -0 - :-md-0-dms-rbb

16 0 0 Hansmeier s bankruptcy petition was filed in bad faith. Tran Decl., Ex. E, Bkr. Hrg. Tr. at :-0. Hansmeier was the owner of multiple offshore companies in Nevis, West Indies, which were created to buy copyright and patent claims in order to thereafter file frivolous lawsuits. See Tran Decl., Ex. F, Schedule H, Petition of Bankruptcy; see also Tran Decl., Ex. D (Trustee Motion) at. Hansmeier made over $0,000 in fraudulent conveyances. Tran Decl., Ex. E, Bkr. Hrg. Tr. at. Of the $0,000 in fraudulent conveyance: () $0,000 went to his wife Padraigin Browne, the objector and movant here (id., Ex. D (Trustee Motion) at -); () $,000 went to his current law firm, Class Justice (id. at -); and () payments were made through a trust and Delaware LLC Monyet and Browne was the trustee and the trust was the sole owner of Monyet (id. at ). Hansmeier s attorney also thinks he is a bad actor. Tran Decl., Ex. E, Bkr. Hrg. Tr. at :- ( I know he is a bad actor at this point. ). The Bankruptcy Court s conversion of Hansmeier s petition to a Chapter liquidation, and the Petition of Disbarment may well mark the final chapters of the short career of a dishonest lawyer who lacks good moral character. C. Hansmeier s Involvement in This Case Hansmeier s involvement in this case, while fleeting, is another example of his devious machinations. Hansmeier s wife and objector, Padraigin Browne, was initially represented by Brett Gibbs, one of Hansmeier s known cohorts in his porn copyright trolling scheme. See Dkt. No.. Gibbs indicated in his notice of appearance that he was solo practitioner from Mill Valley, California. Id. On July, 0, Gibbs filed an objection on Browne s behalf to the Proposed 0 Settlement Agreement. Dkt. No.. Gibbs also filed on Browne behalf the reply to settling parties response to objections to settlement approval and motion for attorneys fees on August, 0. Dkt. No.. Hansmeier was not involved in any of these filings. On September, 0, Hansmeier entered an appearance on behalf of Browne (Dkt. No. ) through Alpha Law Firm, the firm sanctioned in Guava LLC v. Merkel, among others. See Tran Decl, Ex. C, Petition for Disciplinary Action (imposing $,.00 in sanctions against Hansmeier s Alpha Law Firm for bringing bad faith _ -- :-md-0-dms-rbb

17 0 0 litigation). After sanctions were imposed in Guava, Hansmeier transferred assets from Alpha Law to Monyet LLC, the sham entity described above. See supra at -. Through the Alpha Law Firm, Hansmeier appeared telephonically at the final approval hearing in this matter on September, 0. Dkt. No.. Hansmeier s telephonic appearance marked the last time he appeared before the Court, until now. After the Proposed 0 Settlement Agreement was approved by this Court, Gibbs, again appearing as a solo practitioner, filed a notice of appeal on Browne s behalf. Dkt. No. 0. However, on April, 0, Hansmeier formally substituted in for Gibbs, this time through a new firm, Class Action Justice Institute, LLC (Appellate Dkt. No. ), not Alpha Law, which had been dissolved. See Ex. F, Ch. Petition Statement of Financial Affairs. Notably, Hansmeier also filed a notice of appearance before the Ninth Circuit the same day. Hansmeier lied in the notice of appearance, indicating he was replacing Gibbs, who according to Hansmeier, was a member of Hansmeier s firm and had been reassigned within the firm. Id. The Ninth Circuit declined to admit Hansmeier. See Appellate Dkt. No.. In its May, 0 Order, the Ninth Circuit ordered that Hansmeier s application for admission be held in abeyance pending the outcome of his referral to the Minnesota State Bar and the Central District of California Standing Committee on Discipline in Ingenuity LLC v. Doe, No. :-cv--odw(jcx) (C.D. Cal. May, 0) (Order Imposing Sanctions). Id. at. Further, the Ninth Circuit ordered Hansmeier to withdraw from this case and directed him to advise Browne to seek new counsel. Id. The Ninth Circuit held that the [f]ailure timely to comply with this order may result in sanctions. Id. On May, 0, Nathan Wersal replaced Hansmeier. Wersal had only been admitted to practice before the New York Bar days earlier. See Tran Decl.,, Ex. G. Although Wersal would only receive his Minnesota Bar license a year later, he was now appearing on behalf of Hansmeier s firm, Class Action Justice Institute. Wersal also happened to be Hansmeier s client in Wersal v. Living Social. Tran Decl., Ex. H _ -- :-md-0-dms-rbb

18 0 0 (a case which was dismissed with prejudice). After the substitution, Hansmeier supposedly had no further involvement in the case as required by the Ninth Circuit s order. See Appellate Dkt. No.. On February, 0, shortly after the oral argument, Wersal withdrew from representing Browne. Appellate Dkt. Nos., 0. In his notice of withdrawal, Wersal indicated that Browne had consented to the withdrawal and would represent herself. Appellate Dkt. No. - at. The Ninth Circuit authorized the withdrawal on February, 0. Appellate Dkt. No. 0. Hansmeier was not heard from for more than two-and-a-half years, until he contacted Class Counsel and counsel for Defendants via on January, 0, demanding fees and costs, as well as $,00 for Padraigin Browne. Tran Decl., Ex. I. After the Parties refused to respond to his attempt to extort fees, Hansmeier brought his motion on January, 0. Dkt No.. Hansmeier reappeared in this case on behalf of a new firm, Class Justice, and not his previous firm, Class Action Justice Institute, which he has since dissolved. See Ex. F, Ch. Petition Statement of Financial Affairs. III. ARGUMENT A. Hansmeier Has Failed to Demonstrate that He Is an Attorney in Good Standing to Practice Before This Court As a threshold matter, Hansmeier s motion should be denied because he cannot demonstrate that he is qualified to practice law in this District and this Court. Given his widely-documented history of engaging in sanctionable and contemptible conduct, Hansmeier simply cannot establish that he is an attorney in good standing and of good moral character that would qualify him to practice before this Court. The requirements of admission for lawyers who are not licensed in California are set forth in Local Rule.(c)(). Under the Local Rule, an attorney seeking pro hac vice admission must demonstrate that he or she is a member in good standing of, and eligible to practice before, the bar of any United States court or of the highest court of any state [and] who is of good moral character. In its Order Setting Initial _ - - :-md-0-dms-rbb

19 0 0 Conference, dated June, 0, the Court confirmed that attorneys must be admitted to practice and in good standing in a United States District Court to be admitted pro hac vice in this litigation. Dkt. No. at. In addition, Local Rule. imposes an additional requirement on attorneys seeking to practice in this District to promptly notify the court of any change in status in another jurisdiction which would make the attorney ineligible for membership in the bar of this court under Civil Local Rule..c, or ineligible to practice in this court under Civil Local Rule..c. Local Rule.(d). The Local Rules therefore impose an affirmative obligation on attorneys to promptly report any change of status which would cause them to lose their good standing to practice before this Court. See id. Here, Hansmeier has failed to satisfy the reporting requirements set forth in Local Rule.(c)() & (d). Hansmeier, who has the burden of demonstrating that he is an attorney in good standing in Minnesota and in those courts where he is admitted, has failed to advise this Court of his Minnesota disbarment proceedings, as well as the numerous orders imposing sanctions and holding him in contempt, including those before Judges Wright and Chen. The Petition of disbarment and various sanction orders go to the heart of whether Hansmeier is an attorney in good standing and whether he possesses good moral character. For instance, the Petition lays out a compelling case for disbarment and highlights Hansmeier s flagrant misconduct in four different cases. This includes serious acts of fraud and deceit, false and misleading statements to the court, fraud on the court, bad faith litigation, improper transfer of funds to avoid paying judgments, failure to pay sanctions and attorneys fees assessed against him, and disregard for court orders. Importantly, the Petition points out that Hansmeier committed many of these egregious acts in California district courts in violation of the California Rules of Professional Conduct. See Tran Decl., Ex. C, Petition; id., Ex. A, Ingenuity. Judge Wright s order in Ingenuity also calls into question Hansmeier s standing to practice and moral character. Judge Wright was so outraged by the moral turpitude (id.) of Hansmeier and his partners that he reported their conduct to various _ -- :-md-0-dms-rbb

20 0 0 state and federal bars and government authorities, in addition to sanctioning them. The Lightspeed decisions further highlight Hansmeier s misuse of the courts (Lightspeed I, F.d at ) and his willingness to deceive courts. In Lightspeed II, Judge Herndon found that Hansmeier had essentially lied to the court about his purported insolvency, when the evidence demonstrated that he was concealing funds in an entity, which he falsely claimed was set for estate planning purposes. Based on Hansmeier s contemptuous statements, the court ordered Hansmeier to pay sanctions of $,, in addition to the $,00 in sanctions imposed for filing the frivolous lawsuit in the first place. Tran Decl., Ex. B, Lightspeed II, slip op. at,. Finally, just over a month ago, Bankruptcy Judge Sanberg ordered Hansmeier s Chapter bankruptcy petition be converted to a Chapter liquidation, because of Hansmeier s fraud upon the Court and creditors. Judge Sanberg went through a detailed analysis of Hansmeier s bad acts in other courts and the findings of Judges Wright, Murphy, Herndon, and Bransford. Ultimately, the Court converted Hansmeier s petition to a Chapter liquidation, finding in part: The timing of the filing of the Petition is a clear indication that the debtor was attempting to avoid disclosure of the financial information as required by the June th Order to Show Cause. The debtor has continued his pattern and practice of being untruthful with the Courts in this bankruptcy case. * * * Here the debtor has a pattern and practice of dishonesty with the Courts, both pre-petition with other Courts and post-petition with this Court. * * * The misleading information on the schedules, the statement of financial affairs, Chapter plan, timing of the case being the filing (sic), coupled with debtor s pre-petition actions and omissions before various courts across the country indicate that this case was designed for one purpose only, to thwart the collection efforts of creditors. Tran Decl., Ex. E, Bkr. Hrg. Tr. at 0-; see also id., Ex. J. _ - - :-md-0-dms-rbb

21 0 0 Given Hansmeier s gross pattern of misconduct, he cannot be considered an attorney of good standing, nor does he possess the good moral character required for admission to practice in this District and Court. As such, his motion should be denied. B. Hansmeier Was Barred from the Ninth Circuit Proceedings and Cannot Seek Attorneys Fees in This Case Hansmeier s fee request should also denied because he necessarily had no involvement whatsoever in the Ninth Circuit proceedings due to the Ninth Circuit s directive. See Dkt. No. - at -. He boldly claims responsibility for Browne s successful appeal before the Ninth Circuit, even though the Ninth Circuit ordered him to withdraw, and he had no part in filing Browne s objection, her briefs, or the Ninth Circuit argument. Hansmeier s only documented effort was his brief telephonic appearance at the final approval hearing on September, 0, during which he spoke for a few minutes. Dkt. No. ; Tran Decl., Ex. K, Final Approval Hrg. Tr. at :-:. Hansmeier should be estopped from claiming any fees based on the Ninth Circuit s directive. In fact, the Ninth Circuit ordered his application for admission be held in abeyance pending the outcome of his referral to the Minnesota State Bar and the Central District of California Standing Committee on Discipline, based on his referral to the Minnesota State Bar and other authorities for his misconduct in the Ingenuity case. Appellate Dkt. No. at. And it specifically ordered Hansmeier to withdraw from the case and advise Browne to seek new counsel. Id. By now attempting to reappear in this case, Hansmeier tries to circumvent the Ninth Circuit s order to withdraw from this case and cease representing Browne. Id. Not only does Hansmeier have no entitlement to fees, but his motion tempts fate as to the Ninth Circuit s warning that failure to comply with its Order may result in sanctions. Id. C. Hansmeier Did Not Provide a Substantial Benefit to the Settlement Class Hansmeier s motion should also be rejected because he cannot demonstrate that Browne s objection resulted in an increase or enhancement to the value of the Settlement. _ - - :-md-0-dms-rbb

22 0 0 Under the common fund doctrine, objectors may only seek attorneys fees if their efforts led to an actual increase of the fund, or otherwise substantially enhanced the benefits of the class members. Vizcaino, 0 F.d at 0-; see also Fraley v. Facebook, No. C - RS, 0 U.S. Dist. LEXIS (N.D. Cal. Feb., 0) ( Fraley I ) (aff d Fraley v. Batman, No. -, 0 U.S. App. LEXIS (th Cir. Jan., 0) ( Fraley II )). Objectors may not recover fees for merely effectuating minor procedural changes in the settlement (Vizcaino, 0 F.d at 0), or if their efforts were minimal or duplicative of other objectors. See Fraley II, 0 U.S. App. LEXIS, at * (affirming denial of objector fees where objector s efforts were de minimis ). Even in Rodriguez v. Disner, F.d, (th Cir. 0), the case principally cited by Hansmeier, the Ninth Circuit made it clear that objector fees are only appropriate if the objections result in an increase to the common fund. In this case, Hansmeier demands that he be paid for two reasons: () the removal of the cy pres provisions from the Proposed 0 Settlement Agreement (Dkt. No. - at -); and () the Ninth Circuit s decision to vacate the Proposed 0 Settlement Agreement and the Parties subsequent elimination of the Second Settlement Fund. Id. at. Setting aside the lack of substantive work by Hansmeier, he cannot establish that either modifications resulted in an increase to the settlement fund, or conferred a substantial benefit to the Class. See Vizcaino, 0 F.d at 0-. Indeed, notwithstanding the Ninth Circuit proceedings and the new, proposed Settlement, the value of the settlement remains $. million. The amount of Plaintiffs attorneys fees and costs request also remains unchanged at $. million, despite the fact that their fees and expenses have substantially increased. See Dkt. No. 0- (Pltfs Motion for Attorneys Fees and Costs). Given that the value of settlement remains the same, Hansmeier wildly overstates the degree of the benefit attributable to Browne s contribution as an The district court s determination as to the propriety of an objector fee award is entitled to broad deference and will be reviewed under the abuse of discretion standard. See Fraley II, 0 U.S. App. LEXIS, at *. _ - - :-md-0-dms-rbb

23 0 0 objector. Dkt. No. - at. The record demonstrates that Browne s contribution to the proceedings was negligible. First, the Ninth Circuit placed no real importance on Browne s effort to remove the cy pres provision from the Proposed 0 Settlement Agreement. In fact, the Ninth Circuit found that the removal of the cy pres provision was a de minimis and negligible modification that did not require the sending of a new notice, or holding another fairness hearing. See Appellate Dkt. No. - at -. The removal of cy pres was no more than a minor procedural change[] that does not warrant the award of objector fees. See Vizcaino, 0 F.d at 0. Second, Hansmeier overstates Browne s contribution in bringing about the 0 Ninth Circuit Ruling, and the efforts by the Parties that led to the proposed 0 Settlement. Hansmeier contends that the Ninth Circuit relied exclusively on Browne s argument on appeal and found no evidence in the record that the original settlement provided any benefit to the class, particularly in light of the problematic Settlement Fund. Dkt. No. - at ; see also, Tran Decl., Ex L (Appellate Dkt. No. -, Opening Brief) at (arguing that Second Settlement Fund delivered no value to class members ); Ex M (Appellate Dkt. No., Reply Brief) at (arguing that Second Settlement Fund is not a benefit to the class ). The Ninth Circuit, however, made no such ruling. Contrary to Hansmeier s misleading assertion, the Ninth Circuit held that with respect to the Proposed 0 Settlement Agreement, the settlement relief as a whole, including the changes to Groupon s business practices, undoubtedly yields value to the class, the company and to the public. Appellate Dkt. No. - at Hansmeier relies on two non-binding, out-of-circuit cases in support for his claim for objector attorneys fees. See Dkt. No. - at (citing In re Prudential Ins. Co. of Am. Sales Practices Litig., F. Supp. d (D.N.J. 00)); id. at (citing Shaw. Toshiba Am. Info. Sys., Inc., F. Supp. d, (E.D. Tex. 000)). These cases are readily distinguishable. In both Prudential (in which Class Counsel herein was lead counsel) and Shaw, the parties agreed that the objectors raised material objections that added value to the settlement, or otherwise benefitted the settlement class. See Prudential, F. Supp. d at ( The parties agreed, or in some cases the Objectors asserted and lead counsel did not dispute, that there were several ways the Objectors added value to the settlement. ); Shaw, F. Supp. d at (objection was accepted by and agreed to by the parties ). That is not the case here, where Plaintiffs vigorously disagree with the materiality of Browne s objection and dispute that it benefitted the Class in any way. _ - - :-md-0-dms-rbb

24 0 0. Also, the Ninth Circuit did not find that the 0 Proposed Settlement Agreement was illusory as Hansmeier claims (Dkt. No. - at ); rather, the Ninth Circuit declined to take a position on the fairness of the Second Settlement Fund and remanded the case to this Court to make additional factual findings. Appellate Dkt. No. - at -. Hansmeier s claim that the Ninth Circuit accepted Browne s argument whole cloth is misleading and belied by the record. Because the Ninth Circuit did not rest its decision on Browne s argument that the relief under the previous settlement was illusory or provided no Class benefit, her contribution to the overall settlement proceedings was insignificant and deserves no fee reward. Additionally, Hansmeier cannot demonstrate that Browne s objection raised a particular novel or unique argument warranting the payment of a fee. As noted by Judge Posner of the Seventh Circuit, [a] compelling ground for denying the objectors a fee... is that other lawyers at the hearing, notably counsel for [an intervening party] had vigorously objected to [the same issue]; the objectors added nothing. Reynolds v. Benefit Nat l Bank, F.d, (th Cir. 00); Rodriguez, F.d at - (holding it is not error to deny fees to objectors whose work is duplicative, or who merely echo each other s arguments and confer no unique benefit to the class ). In this case, there were other objectors who raised similar arguments challenging the cy pres provision and the Secondary Settlement Fund. See Ex. K (Final Approval Hrg. Tr.) at : (Objector Frank argues that Second Settlement Fund is not a class benefit ); see also id. (Final Approval Hrg. Tr.) at :- (Objector Pridham argues against cy pres provision); see also Tran Decl., Ex. N (th Cir. Hrg. Tr.) at. Indeed, Browne s argument on appeal was largely duplicative of Objector Sean Hull, who raised a similar challenge to the Secondary Settlement Fund. See Ninth Circuit Transcript at (arguing that settlement was structured to create illusion of relief ). Clearly, the issues that Hansmeier now attempts to take credit for were hardly novel or unique, and warrant no recompense. Moreover, Hansmeier cannot take any credit for the subsequent efforts by the _ - - :-md-0-dms-rbb

25 0 0 Parties that led to the new, proposed Settlement. As set forth in the Joint Motion for Final Approval, the proposed Settlement was achieved after the Parties engaged in renewed, arm s-length settlement negotiations that were informed not only by the Ninth Circuit s ruling, but the passage of time since the 0 Proposed Settlement Agreement. Dkt. No. 0- (Joint Motion for Final Approval) at ; Tran Decl.,. In negotiating the new Settlement, the Parties were cognizant of the fact that many of Groupon s merchant partners were no longer in business, and therefore it no longer made sense to require Class Members to go back to the original Merchant and try to redeem a specific Voucher, as was the case under the original settlement approved in 0. See Tran Decl.,. In light of the passage of time, the Parties structured the new Settlement to eliminate that requirement and allow Class Members to directly submit claims for Groupon Credits. Id. Browne s efforts had no bearing on bringing about this modification. Based on the foregoing, Hansmeier cannot demonstrate that Browne s objection resulted in an increase or enhancement to the Settlement Amount, and therefore his motion should be denied. D. Hansmeier Has Failed to Provide Any Evidentiary Support for His Fee Demand For his purported contribution, Hansmeier contends that he is entitled to 0% of the fees and costs awarded to Class Counsel, but offers no persuasive legal or factual support to justify the reasonableness of that percentage recovery. Dkt. No. - at -. He fails to articulate how he arrived at the 0% figure and does not explain how that percentage relates to the purported benefit he claims was achieved by the objection. His fee demand is arbitrary and an affront to the Parties who actually negotiated the Settlement, particularly considering his non-existent work. In support of his 0% fee demand, Hansmeier relies exclusively on the out-of- Circuit decision In re Prudential Ins., F. Supp. d at, in which class counsel agreed not to oppose the objector s fee application. Again, there is no such agreement here, and the record demonstrates that the objection did not lead to an increase or substantial enhancement to the Settlement Amount. _ -0 - :-md-0-dms-rbb

26 0 0 Highlighting the total lack of support for his fee claim, Hansmeier failed to submit a declaration or any other evidence confirming the hours that were spent on the objection, the details and nature of the work performed in connection with objection, and his hourly billing rate. See Rose v. Bank of Am. Corp., No. :-cv-00-ejd, 0 U.S. Dist. LEXIS 0, at * (N.D. Cal. May, 0). Nor does he provide any evidence whatsoever to support his claim for costs. Without Hansmeier s lodestar and cost information, there is no way for the Court to assess the reasonableness of his fee demand, which on its face appears excessive and arbitrary. Id. Indeed, the Court has no basis to ascertain whether the fee sought by Hansmeier is commensurate to the actual work he provided, and whether the fee is proportional to the purported benefit to the Class. See In re Bluetooth Headset Products Liability Litig., F.d, (th Cir. 0). Hansmeier s failure to submit evidentiary support is particularly troubling, given his demonstrated pattern of moral turpitude and history of making false and misleading statements during judicial proceedings. His failure to substantiate his fee claim warrants denial of the motion. E. Hansmeier s Fee Demand Is Improper The Court should also be wary of Hansmeier s motion because it was preceded by an improper extortion demand. Prior to filing his motion, Hansmeier ed Class Counsel and Counsel for Defendants and demanded the payment of attorneys fees and a service award for Browne, in exchange for resolving this matter without further litigation. See Tran Decl., Ex. I. The Parties did not respond to this threat, and Hansmeier subsequently filed his motion. This is not the first time Hansmeier has attempted to extort fees from the parties in a class action settlement. In Shames v. Hertz Corp., No. 0-CV-- MMA(WMC), 0 U.S. Dist. LEXIS, at *-* (S.D. Cal. Oct., 0). Judge Anello admonished Hansmeier for similar behavior. In that case, Hansmeier s cohort, Brett Gibbs, filed an objection to a class action settlement, purportedly on behalf of Hansmeier s father, Gordon Hansmeier. Prior to the filing of the objection, _ -- :-md-0-dms-rbb