New Judge to Handle Cyber Ninjas Contempt of Court, Daily Fines

A new judge will hear the case that resulted in daily fines against a company that was hired to audit votes cast in Arizona’s most populous county, according to court documents filed Wednesday.

Maricopa County Superior Court consolidated two lawsuits hanging over Cyber Ninjas Inc., the company hired by the Arizona Senate to review nearly 2.1 million ballots cast in the 2020 presidential election. It remains subject to a $50,000-a-day fine for defying a previous court order to turn over records about its work.

Jack Wilenchik, the attorney for Cyber Ninjas Inc., last week asked the Maricopa County Superior Court to replace Judge John Hannah, who imposed the fine starting Jan. 7, accusing him of bias for donating to Democratic causes, among other allegations.

The consolidation is separate from that motion, and the court on Wednesday didn’t mention the company’s accusations. It said it can consolidate cases when there is a common legal question.

In one lawsuit, Hannah found the company in contempt for failing to turn over public records and ordered the daily fine. In the second lawsuit, Judge Michael Kemp ordered CEO Doug Logan to appear for a deposition by Jan. 27 or risk sanctions and a civil arrest warrant.

At issue in both cases are documents detailing how the company audited President Joe Biden’s 2020 win in the county. Both lawsuits have succeeded in arguing that the requested records are public, and both are stalled because of Cyber Ninjas’ refusal to turn them over, the court said in its explanation of consolidation.

The fine and contempt finding remain in effect, according to Maricopa County Superior Court Spokesman Tim Tait. A status conference is set for Jan. 25 before Kemp.

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Cyber Ninjas representatives did not respond to requests for comment Wednesday. The company had not paid any sanctions as of close of business Tuesday, according to the Superior Court.

Photographer: Courtney Pedroza/Getty Images

Contractors working for Cyber Ninjas examine and recount Maricopa County, Ariz., ballots from the 2020 general election at Veterans Memorial Coliseum in Phoenix last May.

The Arizona Republic and the nonprofit American Oversight both sued the Arizona Senate for public records related to the audit that was criticized by elections experts as partisan and unreliable. Cyber Ninjas is included in the litigation as an agent of the Senate that has sole custody of some of the documents.

The requested records could shed light on how the audit was funded, how that money was spent, and other aspects of the review. The Senate awarded a $150,000 contract to Cyber Ninjas to complete the work, but outside groups contributed at least $5.7 million more, the company reported in July.

The Senate argues that some requested records are protected from release by legislative privilege, because they contain confidential information, or because releasing them would be against “the best interests of the state,” according to court documents.

Meanwhile, Wilenchik had asked Hannah to let him withdraw from the case because there’s no one to pay him. All Cyber Ninjas employees were let go on Jan. 2, and the company is liquidating assets to pay debts, Logan said in text messages to Senate President Karen Fann (R).

Compliance Options

Open questions include the court’s next move if Cyber Ninjas doesn’t turn over the documents. The company has argued that it’s a private entity not subject to public records laws and that it doesn’t have the resources to comply.

The court has several options, including piercing Cyber Ninjas’ “corporate veil” to put the responsibility on individuals, said Dan Barr, attorney for the First Amendment Coalition of Arizona.

The fine in The Arizona Republic’s case is a meaningful sanction “based on a history of defiance,” said David Bodney, lead counsel for the plaintiffs. The plaintiffs are prepared to “continue to take steps to secure the records and enforce the public’s right to know,” he said.

The court also can direct law enforcement to seize assets or execute a search warrant, said Gregg Leslie, executive director of the First Amendment Clinic at the Arizona State University Sandra Day O’Connor College of Law.

“You just never know what remedy a court is going to choose,” Leslie said.

Wilenchik wrote in a December letter that the Senate still owes Cyber Ninjas $100,000 and that the court can’t compel the company to work for free.

Fann, in a Jan. 10 letter to Cyber Ninjas, said that the Senate would pay to review and produce documents itself if the company provided records that could be relevant. Cyber Ninjas and its subcontractors are obligated to keep and produce the records based on court rulings, she wrote.

The cases are American Oversight v. Fann, Ariz. Super. Ct., No. CV2021-008265, order 1/18/22 and Phoenix Newspapers, Inc. v. Arizona State Senate, Ariz. Super. Ct., No. LC2021-000180, consolidation 1/19/22.

To contact the reporter on this story: Brenna Goth in Phoenix at bgoth@bloomberglaw.com

To contact the editor responsible for this story: Tina May at tmay@bloomberglaw.com