Higbee client's lawsuit/ Failed settlement over confidentiality clause

[Matthew Chan]

This interesting nugget was submitted to me by an interested and informed ELI Forum reader.

It is regarding one of Higbee's photographer clients, Aaron C. Reed. Reportedly, a "reasonable" $1,000 settlement was turned down because the Defendant did not like/agree with the confidentiality clause.

https://oregonintellectualproperty.com/2017/09/01/photographer-files-copyright-lawsuit-after-settlement-negotiations-break-down-over-confidentiality-clause/

From the lawsuit complaint itself:

Plaintiff attempted to amicably settle the matter with Defendants after informing them of their infringing use. However, after the parties agreed on a settlement amount, Defendants’ counsel rejected a proposed settlement agreement that contained a standard confidentiality clause as a material term because Defendants’ counsel did not wish to be personally bound by confidentiality ostensibly on account of an article that Defendants’ counsel intended to submit to California Lawyer magazine. Defendant’s counsel apparently believed that amicable settlement was not prudent, as these types of cases “need more exposure.”

Below is an exhibit of an alleged email that shows that Higbee will settle for far less than the obnoxious $5,000 quoted in letters I often see. Higbee's lawyer, Naomi Sarega, purportedly wrote the email below which seems to indicated she wants to keep the defendant quiet regarding the settlement amount and not complain to anyone about the plaintiff/photographer, Aaron Reed.

From: Naomi Sarega <[email protected]>
To: dwtbrown <[email protected]>
Cc: Evan McMurtrey <[email protected]>; Ali Hassanzadeh <[email protected]>
Sent: Thu, Aug 17, 2017 4:41 pm

Subject: Re: Proposed change to Release Rejected- 504000

Hi David,

My name is Naomi Sarega, I am an attorney with the Copyright Division at the Law Firm of
Higbee & Associates. It is our standard practice to include a confidentiality clause in our release
agreements to protect all parties involved. While Mr. Reed is more than happy for the public to
know that he is serious about enforcing his copyright, the only reason your client would be
opposed to a confidentiality agreement would be if he has plans to discuss the matter (potentially
including negative information about Mr. Reed). At this point, for a $1,000 settlement on a
registered image used on a website that lists multi-million dollar homes, the confidentiality clause
is non-negotiable. If you would like to provide me with a valid reason as to why your client is
concerned about the confidentiality clause, I’d be more than happy to discuss it with my client.
Please let me know if you would like to discuss this further.

Thank you,
Naomi

Naomi Sarega
Supervising Attorney
Copyright Division
Law Firm of Higbee & Associates (http://www.higbeeassociates.com)
1504 Brookhollow Dr., Suite 112, Santa Ana, CA 92705
Phone: (800) 716-1245

This electronic mail message and any attachment is confidential and may also contain privileged attorney client
information or work product. If you are not the intended recipient, or the person responsible to deliver it to
the intended recipient, you may not use, disseminate, distribute or copy this communication. If you have
received the message in error, please immediately notify us by reply electronic mail or by telephone and delete this original message. Thank you very much.

===================

Defendant lawyer's purported email response. It is a very unusual response.


On Aug 18, 2017, at 9:42 AM, [email protected] wrote:

Hello Naomi,

I am confused. If your client has no concerns regarding publicity, what could be said "negatively"
about him for "enforcing his copyright?"

My client is only moderately interested in publicizing these types of cases and the business model
behind them. Me, much more so, as I believe this matter needs some attention. I am being and
have been completely transparent in all my actions on this and related matters as I know that
actions taken today in this type of matter often end up being scrutinized later, under harsher
lights.

I have settled a few of these cases, and I am familiar with the criteria used by Federal Court
Judges in deciding attorney fees. I also know how the perception of these cases is evolving in
the public mindset, legislatively, and judicially.

I am writing an article for submission to California Lawyer magazine, in collaboration with the my
summer intern (who is also Staff Editor at his law school's law review) , and we have nothing to
hide. I do not know if it will be accepted by any publication, but if you would like to have input, I
would be pleased to hear your thoughts. I have found that few cases need more exposure, but
some do. I believe that these cases are of that type.

You might also look up a couple of the consumer websites I have started. If you are curious I can
give you the website addresses. One was featured on The Today Show a few months ago. I am
proud to have been involved in defending a number of cases in Los Angeles County a few years
ago where some attorneys in Los Angeles County were using the American with Disabilities Act
to pursue small businesses and obtain a number of settlements against intimidated business
owners by over representing their exposure under the ADA, and using the threat of Attorney fees
to leverage an onerous settlement. Every few years a case or cases come up to which I react
strongly.

My client's website which you refer to used the image for a few months, on a scroll of many
photos where it would appear for a few seconds, on a website where the MOST people who ever
visited in one month was 115. Not a typo, 115 visitors was the most in any month. In fact,
because of the timing of the scroll, very few of the people likely even saw the image. It was the
eighth in a number of images which would appear briefly and then fade to another image. The
price of the homes listed, as you know, is not a factor used in determining the Statutory damages
under 17 USC 504. Further, listing expensive homes does not equal a huge income. My client
wishes that were so, as do most real estate brokers and agents.

If you want confidentiality, I am obliged, in my client's interests to offer a mutual release for no
monies. My client is being pursued by other attorneys in similar matters regarding the same
website, and I make this offer in his interests, putting my own and the public interest beneath
his. My client would also give up his rights under California Civil Code Section 17200, and any
other remedies. You are, of course, welcome to simply cash the check for $1000, the agreed
amount.

Thank You,
David Brown

======================

Higbee thinks they are doing a good thing here filing on behalf of client, Aaron Reed. But this lawsuit "outs" the name of a few Higbee lawyers and the exhibit emails support my assessment about Higbee's operations that the $5,000+ settlement amounts are absolute bullshit. It is routine and systematic lying by the Higbee operation in my view. Higbee is willing to settle for a $1,000 and call it a day.

The lawsuit appears to be trying to throw lawyer, David Brown, under the bus by hitting the defendant. It appears that a $1,000 check was sent but that was not good enough for Reed or Higbee.  This is a situation where Higbee seems to be a real stickler to keep people quiet. They appear to get a $1,000 check but it seems Reed/Higbee is forcing the issue. I think there will be unintended consequences for both sides.

I suspect I know why Reed/Higbee wants confidentiality. So people won't know that settlement amounts can be very low.  But it seems the defendants were willing to pay the $1,000. Are the Higbee team trying to make the Defendant's lawyer, Brown, "look bad" here because Brown wanted to tell a story publicly? That seems to be a swipe at him. Is Reed/Higbee filing the lawsuit in a pre-emptive effort anticipating negative publicity Brown might generate by telling his client's story?

I think there is more to the story that is not being told here.

[icepick]

That's good info. I'm a little confused/surprised with the defense attorney using an AOL email address. It just looks off, might not be practicing much.

[Matthew Chan]

I am surprised when ANYONE uses an AOL email address.  It looks really bad and outdated for sure.

That's good info. I'm a little confused/surprised with the defense attorney using an AOL email address. It just looks off, might not be practicing much.

[icepick]

Another interesting fact is it was filed in Oregon where the defendant was. The Plaintiff appears to live in Washington state. Still closer to the courthouse than Youngson is. I'd love to hear more from this Attorney on his dealings with the Higbee outfit.

I'm not an expert, but I think the defendant can shield himself from the attorneys fees and costs with an offer of settlement that is equal to or more than any judgment plaintiff wins. That would force Higbee to decide if they want to go out on that limb and pay those costs + court time over a confidentiality clause.

And I laughed that Higbee demanded a jury trial in the petition, I would think defendants would make out better with a jury in Higbee cases than he would.

[icepick]

Everything Higbee does just seems so amateur hour. That petition is written mostly to scare the defendant.

First, if he is serious in copyright litigation he knows statutory damages are per work, not per infringement. He messes that up in the petition, probably on purpose to see if the defendant knows the rules to strike it.

Second, #26 and #27 are not appropriate parts of a petition and those plus the email exhibits should be stricken and force him to re-file.

[icepick]

Found another suit he recently filed for the same photographer. The interesting thing here is defendant removed the image from the page it was on, but it was still on the server so Higbee is going to push for willful infringement based on that. So delete the images from your server also.

https://www.unitedstatescourts.org/federal/ord/133130/

This is purely a guess, but if he can get $1,500 settlements for paying $400 filing fee + at most an hour drafting time I guess he still makes enough to keep going.

[clist]

This is a situation where Higbee seems to be a real stickler to keep people quiet. They appear to get a $1,000 check but it seems Reed/Higbee is forcing the issue. I think there will be unintended consequences for both sides.

I suspect I know why Reed/Higbee wants confidentiality. So people won't know that settlement amounts can be very low.  But it seems the defendants were willing to pay the $1,000...

Boom.

It will be interesting to see how this plays out.

For the plaintiff, this may just be a win on paper...

[clist]

That's good info. I'm a little confused/surprised with the defense attorney using an AOL email address. It just looks off, might not be practicing much.

Friend of the family perhaps? 

[Matthew Chan]

I always tell people to remove the image from the server. But layman users sometimes think that removing the image from the page is the same thing and later learn the hard way, it isn't.

And regarding the 1-hour drafting time for the complaint, you are being too generous here given it is generally a Word template they have on file.

Found another suit he recently filed for the same photographer. The interesting thing here is defendant removed the image from the page it was on, but it was still on the server so Higbee is going to push for willful infringement based on that. So delete the images from your server also.

https://www.unitedstatescourts.org/federal/ord/133130/

This is purely a guess, but if he can get $1,500 settlements for paying $400 filing fee + at most an hour drafting time I guess he still makes enough to keep going.

[Matthew Chan]

Icepick,

Good stuff you are posting and sharing. Thank you.

And I have it on pretty good authority that federal judges HATE these kinds of small-fry lawsuits and there is a fair amount of pressure to make it go away (settle the damn thing). It makes the plaintiff and the lawyer look petty.

This is why I generally tell victims that they should put IN WRITING an at least one offer to settle and keep that letter on file even if the settlement amount is smaller. It takes away the argument that the defendant didn't try and helps make the case that the plaintiff is being too greedy.

Another interesting fact is it was filed in Oregon where the defendant was. The Plaintiff appears to live in Washington state. Still closer to the courthouse than Youngson is. I'd love to hear more from this Attorney on his dealings with the Higbee outfit.

I'm not an expert, but I think the defendant can shield himself from the attorneys fees and costs with an offer of settlement that is equal to or more than any judgment plaintiff wins. That would force Higbee to decide if they want to go out on that limb and pay those costs + court time over a confidentiality clause.

And I laughed that Higbee demanded a jury trial in the petition, I would think defendants would make out better with a jury in Higbee cases than he would.

[Matthew Chan]

That is why Higbee and others of their ilk submit "template/draft lawsuits" as part of their collection process. To mentally "stimulate" a victims heart bpm.

Everything Higbee does just seems so amateur hour. That petition is written mostly to scare the defendant.

First, if he is serious in copyright litigation he knows statutory damages are per work, not per infringement. He messes that up in the petition, probably on purpose to see if the defendant knows the rules to strike it.

Second, #26 and #27 are not appropriate parts of a petition and those plus the email exhibits should be stricken and force him to re-file.

[Matthew Chan]

I got curious about the lawyer who signed off on the Oregon lawsuit (Naomi Sarega). Naomi is apparently a "supervising attorney". My guess is she supervises her "clerks" (the ones who come dangerously close to practicing law on behalf of Higbee's firm).

https://www.higbeeassociates.com/about/attorneys/naomi-sarega/

The Higbee & Associates website certainly posts LARGE photos of their lawyers!

As I suspected, Naomi is on the "youngish" side as most of the lawyers in the copyright extortion business seem to be.

It seems to me all victims of Higbee and associates need to be collecting all the emails and correspondence of these clerks. There might be some enterprising lawyer in the ELI community who may want to read them over to see if the clerks are "practicing law".

[icepick]

Your comment jogged my memory when I was looking up some of his other filings they were getting encouraged to have the Magistrate hear the case over the sitting judge.

Icepick,

Good stuff you are posting and sharing. Thank you.

And I have it on pretty good authority that federal judges HATE these kinds of small-fry lawsuits and there is a fair amount of pressure to make it go away (settle the damn thing). It makes the plaintiff and the lawyer look petty.

This is why I generally tell victims that they should put IN WRITING an at least one offer to settle and keep that letter on file even if the settlement amount is smaller. It takes away the argument that the defendant didn't try and helps make the case that the plaintiff is being too greedy.

Another interesting fact is it was filed in Oregon where the defendant was. The Plaintiff appears to live in Washington state. Still closer to the courthouse than Youngson is. I'd love to hear more from this Attorney on his dealings with the Higbee outfit.

I'm not an expert, but I think the defendant can shield himself from the attorneys fees and costs with an offer of settlement that is equal to or more than any judgment plaintiff wins. That would force Higbee to decide if they want to go out on that limb and pay those costs + court time over a confidentiality clause.

And I laughed that Higbee demanded a jury trial in the petition, I would think defendants would make out better with a jury in Higbee cases than he would.

[Matthew Chan]

Naomi (the bimbo) filed a dumb case which I think will come back to embarrass her at the federal court level.

Any lawyer should know that remedies are generally financial. Naomi/Reed negotiated an alleged agreed $1,000 for settlement.

But now, the federal court judge and his staff are going to see that the most important part (financial agreement) was turned down because some no-name defendant didn't want to sign a confidentiality agreement.

Everything about this lawsuit seems to scream to the federal judge "Why are you wasting your money and the court's time with this dumb case?" I am willing to bet that there is going to be a lot of pressure by the court for Naomi to take the damn $1,000 that was agreed upon.

I can hear her whining "But they wouldn't sign the confidentiality agreement!"

The judge might reply, "And yet you have made this entire matter more public than if you took the $1,000"

She might say, "Well, we can't let OTHER victims know we are willing to take $1,000 when we send out $5,000 letters.

Judge might eye-roll and say, "Then why did you file this dumb lawsuit and submit into public record with exhibits of your settlement emails?"

She might say, "David Brown said he might write articles about us and the business we are in."

And on and on....

What a dumb case Naomi gets to have her name on. The client Aaron Reed  (the Himbo) stupidly agreed to the lawsuit instead of quietly taking the $1,000. You have a dumb client who listened to a dumb lawyer to file a dumb lawsuit.

Your comment jogged my memory when I was looking up some of his other filings they were getting encouraged to have the Magistrate hear the case over the sitting judge.

[Robert Krausankas (BuddhaPi)]

The Higbee & Associates website certainly posts LARGE photos of their lawyers!

Egos on parade.. Naomi thinks shes model material too..

https://pbs.twimg.com/profile_images/755244758/l_685d175318689233f579d353461a0409.jpg