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Appeals Court delivers rare win for Hansmeier

Exactly one month after Paul Hansmeier agreed to an indefinite suspension of his law license — and hot on the heels of the enactment of a new law aimed at curtailing the sorts of disability access lawsuits that are Hansmeier’s specialty — the Minnesota Court of Appeals handed the embattled attorney a rare victory.

In an unpublished decision on Monday, the three-judge panel upheld Hennepin County District Court Judge Charles Porter’s $25,862 attorney fee award in a successful Americans with Disabilities Act claim against a south Minneapolis bar, the Chatterbox Pub, and its landlord, Tyrone Sharpe. The suit alleged that disabled persons were denied access to the restaurant because of a gap between the restaurant’s patio and the sidewalk.

Carol Hooten

Carol Hooten

“We conclude that the district court properly considered ‘all relevant circumstances’ in making its attorney fee award,” wrote Judge Carol Hooten. The court declined to knock down the award, noting that Porter had already slashed Hansmeier’s original request — $77,000 — by two-thirds.

Although Hansmeier has sued over 100 businesses over ADA-related claims since 2013, the Chatterbox suit is the only one to go to trial. The others are still pending or have been resolved via motion practice or settlement.

In a telephone interview, Hansmeier said the appeals court’s decision underscores the need for businesses “to take ADA compliance seriously.”

“In this case, they threw everything but the kitchen sink at us and their entire defense strategy failed,” he added. “Prior to this decision, I think there may have been some uncertainty with litigants about the interpretation of the law and how the law applies. I think this decision goes quite a long way to clearing those concerns up and frankly affirms pretty much everything the district court did.”

Charles Porter

Charles Porter

Michael Frasier, an attorney and board member of the Twin Cities Metro Independent Business Alliance, said the appeals court’s opinion reflects its deference to the trial court’s role as a fact finder.

“The issues on appeal were relatively narrow. For the most part, it was a challenge to fact finding and credibility determinations, which are always hard to win on appeal,” said Frasier, a partner at Rubric Legal LLC in Minneapolis.

Frasier was part of the successful push at the Capitol this year to amend the Minnesota Human Rights Act in hopes of curbing the wave of “abusive, drive-by lawsuits” which Hansmeier has been filing by the score since 2013. However, Frasier said he doubts the new law would have made much of a difference in the Chatterbox suit.

“It’s a relatively unique case where there was conflicting testimony over the status of the barrier at the time of the trial,” opined Frasier, who called the court’s decision “a tough loss” for the business.

St. Paul attorney Susan Minsberg, who represented the Chatterbox and Sharpe, called the opinion “incredibly disappointing” and said both the trial court and appeals court failed to take into account important considerations.

Minsberg said she did not know yet whether she will seek further review from the Supreme Court.

In a 36-page brief, Minsberg argued strenuously that the alleged ADA violation at the Chatterbox — a small gap between the sidewalk and the threshold to the bar’s patio — was fixed prior to the trial, so Hansmeier’s client, Eric Wong, should never have been declared the prevailing party and, consequently, Hansmeier shouldn’t get attorney fees.

Even prior to the leveling of the sidewalk (via a process known as sand-jacking), wheelchair users like Wong were still able to patronize the Chatterbox “without a problem,” according to Minsberg.

In her brief, Minsberg also argued that Hansmeier should have been required to disclose his fee arrangement with Wong, whom he has represented in at least 28 other cases. She also faulted Porter for not taking into account Hansmeier’s reputation when evaluating Hansmeier’s “grossly excessive and suspicious” fee application.

In a memorandum last year, Porter brushed that concern aside, holding that there was “no direct evidence of alleged similar misconduct in this case” and noting that sanctions imposed against Hansmeier by a federal judge “remain unresolved pending appeal.”

Since then, the blows to Hansmeier’s reputation have mounted at a brisk clip.

Two federal appellate courts have tossed appeals from Hansmeier and his former partner, John Steele, seeking to overturn sanctions orders the pair racked up in connection with a lucrative “porno trolling” scheme likened by many critics to legalized extortion.

Before the collapse of the now notorious Prenda Law Firm, according to court documents and published reports, Hansmeier and Steele raked in millions of dollars in quick settlements by threatening to sue hundreds of internet users for viewing copyright-protected pornography

“When last we considered John Steele and Paul Hansmeier’s challenges to contempt sanctions imposed on them, we gave them some friendly advice: stop digging,” wrote 7th Circuit Judge Diane Wood in a decision last month. “Apparently they did not realize that we meant what we said. Hoping to avoid paying additional sanctions, they dissembled to the district court and engaged in discovery shenanigans.”

In a separate ruling last month, the 9th Circuit court similarly rebuffed an appeal of a different sanctions order, holding that Hansmeier and Steele “engaged in abusive litigation, fraud on courts across the country, and willful violation of court orders” and “lied to other courts about their ability to pay sanctions.”

In March, Hansmeier was sued by a U.S. Trustee for allegedly concealing his assets and lying in the course of bankruptcy proceedings.

On July 1, Hansmeier, who previously vowed to fight a disciplinary petition from the Office of Lawyers Professional Responsibility, stipulated to the indefinite suspension of his law license, with no right to reinstatement for four years.

The Supreme Court has yet to act on the proposed discipline and, since entering the stipulation, it has been business as usual for Hansmeier, who filed nine new ADA suits in U.S. District Court last month.

So who will litigate those claims when Hansmeier loses his license?

“Someone is taking over my practice so they’ll be substituting in on virtually all my cases. I plan to remain active in the area of disability rights enforcement but just not in a legal capacity,” Hansmeier told Minnesota Lawyer.

The website for Hansmeier’s firm, Class Justice, PLLC, was down this week. However, the firm’s phone tree now includes a listing for attorney Padraigin Browne, Hansmeier’s wife. Does that mean she be taking over his cases?

Hansmeier declined to answer that question directly, saying only: “I’m going to allow the attorney to make their own announcement when they want to. I’m not going to steal their thunder.”

Hansmeier’s imminent suspension also comes amid rumors that he is the subject of a criminal probe. According to Ken White, a criminal defense attorney and former federal prosecutor, two sources confirmed that they received letters from the FBI “inquiring about their experiencing with Prenda and seeking information about Prenda’s activities.”

“The letter — which I have reviewed — has been sent out on a large scale to attorneys who have represented targets of Prenda’s litigation,” White wrote in a May 25 post on the legal blog, Popehat.

“Based on my 21 years in the federal criminal justice system, I believe the letter reflects an active, determined investigation in its later stages,” White added. “The letter represents an abandonment of operational security and confidentiality; it suggests the FBI no longer sees a need for stealth. That, in turn, suggests that the FBI believes it’s already developed the evidence it needs to prove the substance of its case (that Team Prenda committed wire and/or mail fraud) and is just identifying as many victims as possible for potential witnesses and to establish the amount of damages. Bear in mind that under the federal sentencing guidelines, the more money wrongdoers made, the more time they’re facing.”

Asked about White’s claims, Hansmeier professed to know nothing.

“I have no idea what the FBI is doing,” Hansmeier said. “I know a couple of judges have made referrals so it wouldn’t surprise me if they’re doing something. If you want to know what the FBI is doing, you better call and ask because they don’t keep me in the loop.”

Per agency policy, an FBI spokesman said he couldn’t comment on the matter.

About Mike Mosedale

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