Claim Against My Corporation

[ihtfp71]

I have a slightly different situation from other postings here. The infringement email came into my personal email but was addressed to the corporation that I own. The infringing posting was on the corporate web site. The domain name of my personal email is the same domain name as the corporate web site.

First, I heard from Picrights in Canada. They wanted $150, which I would have given them except that I was concerned that I would only encourage more claims. I did communicate with them via email, and I challenged them to prove that they existed as a legal entity, to which they did not respond. (I suspect they didn't know how.) So I decided to ignore the whole thing since I couldn't evaluate the risks from settling, and I had a difficult time imagining that a Canadian firm was going to sue me in the US for small change.

Second, months went by and then I heard from Higbee, who wanted $1,000. I have ignored (not even opened) emails and ignored voice mails. I considered this to be more serious but nevertheless they were going to have to travel a long distance from California to sue me.

Third, completely independently, this corporation no longer has any business nor expects any business, and I had already decided to dissolve it at the end of this year. This just gives me an extra reason to do so.

Fourth, in theory, the corporate liability protection should be sufficient, but then again any determined attorney would attempt to pierce the corporate veil and expose personal liability - and might succeed. Not every single i has been dotted or every t crossed in the lifetime of the corporation.

Finally, there is a sister corporation to the one being dissolved which has a similar name. I'm going to pull down the original web site with the dissolution of the corporation, but some of the material on it is planned to re-appear on the sister's new web site, albeit in a different form and with no unlicensed images except those of my own creation.

That's the background. I have read many of the other postings on this web site, but I've seen none that comment on settling resulting in new claims once they've discovered that you will pay. Is this not of concern or has it simply not happened (yet)?

Any comments on the corporate versus personal liability? I've considered simply faxing them the dissolution papers, but decided that any communication would not be wise. Let them figure it out. If they actually did sue me as president of the corporation I could probably craft a sufficient pro se motion to dismiss as the corporation no long exists, and I am no longer an officer of the corporation. If that didn't work, I could let them secure a judgment against the corporation which doesn't exist and no longer has a bank account. On the other hand, if they were to actually travel here to sue me, they would probably be back for a new filing against me personally which I would have to defend. I'm sure that it is unlikely but not impossible.

Or I could tell them I'm in my 70s and living on social security - which is true but not the whole story as they could quickly discover on LinkedIn.

Mostly, I'm just sharing my situation for others, though I'm happy to take any comments anyone would care to make.

[Matthew Chan]

Ok, I will bite the apple and make a few comments.

I have a slightly different situation from other postings here. The infringement email came into my personal email but was addressed to the corporation that I own. The infringing posting was on the corporate web site. The domain name of my personal email is the same domain name as the corporate web site.

This happens all the time. They will email almost anyone with a notice in the hopes that it will find its way to the intended target or person of authority. It is common because incorrect recipients will typically forward such messages to whomever they believe should receive it.

First, I heard from Picrights in Canada. They wanted $150, which I would have given them except that I was concerned that I would only encourage more claims. I did communicate with them via email, and I challenged them to prove that they existed as a legal entity, to which they did not respond. (I suspect they didn't know how.) So I decided to ignore the whole thing since I couldn't evaluate the risks from settling, and I had a difficult time imagining that a Canadian firm was going to sue me in the US for small change.

They probably didn't do it because it was, to them, a "dumb question" and wasn't worth their effort to respond.

Second, months went by and then I heard from Higbee, who wanted $1,000. I have ignored (not even opened) emails and ignored voice mails. I considered this to be more serious but nevertheless they were going to have to travel a long distance from California to sue me.

Being outside of California is one less obstacle Higbee has to deal with. They won't have to engage outside counsel but that doesn't necessarily mean they have to "travel" to you. They simply incur the expense and inconvenience to hire an "out of state" lawyer.

Third, completely independently, this corporation no longer has any business nor expects any business, and I had already decided to dissolve it at the end of this year. This just gives me an extra reason to do so.

You didn't ask here but I would like to add that my non-lawyer opinion is that the best and safest way to dissolve a corporation is to simply stop paying the annual fees and most states will execute on an administrative dissolution. No signatures or statements necessary. NO muss, no fuss.

Fourth, in theory, the corporate liability protection should be sufficient, but then again any determined attorney would attempt to pierce the corporate veil and expose personal liability - and might succeed. Not every single i has been dotted or every t crossed in the lifetime of the corporation.

My non-lawyer opinion is the default is you have corporate liability protection. Someone has to ACTIVELY do the work, incur the expense and costs of piercing the corporate veil. Lots of talk about piercing the corporate veil but in a practical sense against very small parties with relatively little assets, not worth it. And even if you do have personal assets, they can't touch retirement accounts and perhaps certain forms of retirement income. Also, scattered bank accounts dilutes the effort too. Lawyers don't like to work for free or work so hard with so little payoff. So, my view is there is theory and there is practicality.

Finally, there is a sister corporation to the one being dissolved which has a similar name. I'm going to pull down the original web site with the dissolution of the corporation, but some of the material on it is planned to re-appear on the sister's new web site, albeit in a different form and with no unlicensed images except those of my own creation.

I wouldn't worry too much about it. Unless someone believes you are some whale or have a personal axe to grind with you, I cannot see anyone going to such lengths over this matter.

That's the background. I have read many of the other postings on this web site, but I've seen none that comment on settling resulting in new claims once they've discovered that you will pay. Is this not of concern or has it simply not happened (yet)?

I am going to say outright there is a weird paranoia that settling one case that will spawn others. That is generally a false notion. If that is happening, I have not heard of it in 10 years.  Yes, we do a lot of name-calling of those parties who pursue excessively high settlement amounts but I have not heard or seen of any legitimate complaints where you settle one and it automatically spawns other demands from the same parties. I have to explain to people that there are people who get MULTIPLE extortion letters but they generally come from different copyright owners or enforcement agencies altogether. And it happens because some website owners have MULTIPLE infringing images that belonged to different owners. It has nothing to do with settling one case spawning another one. It happens because some website owners have too many infringing images which increases the likelihood of more demand letters!  So, let's get this straight once and for all.

The decision to settle any particular case is subject to individual scrutiny and evaluation but to adopt a conspiracy mindset about this has never been remotely substantiated by anyone I am connected to through ELI.

Any comments on the corporate versus personal liability? I've considered simply faxing them the dissolution papers, but decided that any communication would not be wise. Let them figure it out. If they actually did sue me as president of the corporation I could probably craft a sufficient pro se motion to dismiss as the corporation no long exists, and I am no longer an officer of the corporation. If that didn't work, I could let them secure a judgment against the corporation which doesn't exist and no longer has a bank account. On the other hand, if they were to actually travel here to sue me, they would probably be back for a new filing against me personally which I would have to defend. I'm sure that it is unlikely but not impossible.

You are overthinking this. Why do you think they would sue you over anyone else? Statistically speaking, outside of some extenuating circumstances, less than 1% of these types of infringements ever result in a lawsuit. And even it there was a lawsuit, I would say 90% get settled out.

Or I could tell them I'm in my 70s and living on social security - which is true but not the whole story as they could quickly discover on LinkedIn.

You can't have it both ways. If you want to go dark, then fine. There are pros and cons. If you want to selectively reveal facts that serve you, that is fine too. There are pros and cons. I tend to lean towards a strategic response and providing a narrative with facts that serve you.

Mostly, I'm just sharing my situation for others, though I'm happy to take any comments anyone would care to make.

[ihtfp71]

Matthew - thank you for your sensible point of view and your willingness to take a few minutes. Hopefully your comments will also be helpful to others.