Much as I love Ars, Popehat has done the bulk of the reporting on Prenda Law for years. Their take on today's ruling:
This order is catastrophic to Prenda and its attorneys. It will be filed in every case in which they are fighting sanctions across the nation, and cannot help but have a galvanizing effect on those proceedings. The U.S. Attorney's Office will very likely launch a grand jury investigation, and the IRS CID will assist. Federal grand jury investigations are very slow, but represent experienced practitioners bringing almost unlimited resources to bear against their targets. State bars and federal bars will launch their own investigations. Prenda Law's principals will face dangerous, expensive, relentless attacks from all sides, and it is entirely possible they will face criminal charges if the feds agree with Judge Wright's conclusions.
Can they appeal? Certainly. That, too, will be protracted and expensive. An appeal filed this week might be briefed in October 2013 and heard by the Ninth Circuit in, say, May 2014. The other courts won't wait to rule on sanctions, and state and federal bars likely won't delay. The U.S. Attorney's Office and IRS CID certainly won't. They may take many months, or even years, but they grind. Oh, do they grind.
Judge Wright's order, with its Star Trek references, shows imagination. But all the imagination in the galaxy couldn't produce a much worse result for Prenda, Steele, Hansmeier, Duffy, and Gibbs.
If they are smart, they're talking to their lawyers about flipping on each other right now.
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