In recent years, adult entertainment outfit Malibu Media has often been described as a copyright-trolling operation.
The company, known for its popular “X-Art” brand, has gone after thousands of alleged file-sharers in U.S. courts, collecting millions of dollars in settlements.
Accused Subscriber Fight Back
Most Internet subscribers who are accused of piracy don’t put up a fight but occasionally one does. They include Mr. W.M. who filed a counterclaim and demanded that Malibu should back up its claim with the digital evidence that led to their accusation.
Despite a court order, this evidence never came in. This frustrated the court, the accused subscriber, and even Malibu’s own attorney, who withdrew from the case last year because her client failed to comply.
In the months that followed little progress was made and, earlier this year, U.S. District Court Judge Thomas M. Durkin handed a win to Mr. W.M. The court ordered Malibu to pay $48,656.73 in costs and attorneys’ fees.
Malibu Didn’t Pay Up
In most cases, an order like this would end things but, in this instance, the matter is far from resolved. As it turns out, Malibu Media has failed to pay up. On top of that, it actively diverted funds that should have been used to pay these fees.
Over the past months, Mr. W.M.’s legal team hired Joseph Stewart, an experienced collection attorney, to try to get what they’re owed. They went as far as obtaining a restraining order that required Malibu Media and its payment processor Epoch.com to restrain the “X-Art.com Proceeds.” That order also applied to ZO Digital, a company operated by the husband of Malibu’s boss, Colette Pelissier, which collected these payments.
The legal team also obtained information from Epoch.com which showed that plenty of X-Art.com revenue was still coming in. However, after the passing of several months, the fees had yet to be paid.
This prompted Mr. W.M.’s attorney, Joseph Stewart, to request a turnover order and other declaratory relief, to increase the pressure and make sure that the appropriate payments are made. This week, District Court Judge Thomas M. Durkin signed off on this request.
The court order highlights that in roughly six months of this year, X-Art.com generated well over $100,000 in proceeds.
“Epoch’s books and records indicate that between February 17, 2021, when this court entered its judgment, and August 14, 2021, when it was served with the restraining order, Epoch paid ZO Digital a total of $125,397.07 (net of fees and charges) from the X-Art.com Proceeds.”
Judge Durkin orders Epoch to make sure that the money is not paid to Malibu, but to Mr. W.M.’s law firm, until the fees are paid off.
The order further confirms that ZO Digital failed to obey the court’s order that required it to produce documents and restrain funds. To ensure that the company follows orders going forward, Judge Durkin issued a conditional judgment in the amount of $51,333.
Court Slams Malibu
As expected, the order is also very critical of Malibu Media and its designated representative Colette Pelissier. The company obstructed the legal process on several occasions, despite having sufficient financial means to pay.
“Rather than pay, Malibu Media chose to not cooperate in the captioned supplemental proceedings by producing no documents, twice failing to appear for a debtor examination, and a third time failing to appear despite the court ordering Pelissier to do so or face arrest,” Judge Durkin writes.
“Malibu Media deliberately failed on multiple occasions to disclose documents related to the Epoch merchant account for X-Art.com and documents showing that it was diverting X-Art.com Proceeds to ZO Digital. Malibu Media has thus hindered, delayed, and interfered with these proceedings.”
Conditional Arrest Order
Since Pelissier failed to appear before a court without a proper reason, Judge Durkin signed a conditional body attachment order. This effectively means that she will be arrested if she fails to obey.
“The court orders the issuance of a body attachment order for the arrest of Colette Pelissier, but suspends that order for 14 days, until the next court status date of October 22, 2021, at 10:00 a.m.”
In this upcoming hearing, the court will check if ZO Digital has complied with the asset restaining order. If that’s not the case, a warrant for the arrest of Malibu Media’s CEO will follow.
The above suggests that Malibu Media has only made matters worse in recent months and the end is not yet in sight. The company, which has its corporate status suspended, also risks having to pay additional fees as a result, the court clarified.
A copy of Judge Durkin’s order and injunction is available here (pdf)