Cyber Ninjas found in contempt of court, hit with $50K in daily fines for not releasing public records

Cyber Ninjas CEO and audit leader Doug Logan testifies at the Senate hearing on the progress of the election audit in Maricopa County at the Arizona Senate in Phoenix on July 15, 2021.
Ryan Randazzo
Arizona Republic

The firm hired by the Arizona Senate to conduct a review of the Maricopa County election was found in contempt of court Thursday and ordered to pay sanctions of $50,000 a day until it turns over public records from the review to The Arizona Republic.

The Republic sued Cyber Ninjas and the Senate in June for records and, after months of litigation, asked for sanctions against the company of $1,000 a day. Maricopa Superior Court Judge John Hannah ruled that the company's noncompliance was worth 50 times that amount.

During a contentious two-hour hearing, Hannah found Cyber Ninjas in contempt of his order from Aug. 24 ordering the company to turn over emails, text messages and other documents sought by The Republic.

“It is lucidly clear on this record that Cyber Ninjas has disregarded that order,” Hannah said. "I don’t think I have to find Cyber Ninjas is not acting in good faith. All I have to do is find they are not complying, and their noncompliance is not based on good faith and reasonable interpretation of the order. I think the variety of creative positions Cyber Ninjas has taken to avoid compliance with this order speaks for itself."

Hannah said the sanctions needed to be high enough to incentivize the company to comply with the order, and they are “intended to be coercive, but not punitive.”

But he also said he wanted to "put Cyber Ninjas on notice" and if the company still doesn't comply, he would issue orders directly against the individuals responsible for providing the records.

"Our goal here is not to get sanctions, it is to get documents," The Republic's attorney Craig Hoffman said at the hearing.

The ruling came three days after the Arizona Court of Appeals awarded The Republic more than $31,000 in legal fees to be paid by Cyber Ninjas following Cyber Ninjas' failed appeal of the lower court decision.

Cyber Ninjas' lawyer Jack Wilenchik tried to remove himself as the firm's attorney at Thursday's hearing, telling the judge he has not been paid, but Hannah would not allow it.

Wilenchik also said Doug Logan is now the "former" CEO of Cyber Ninjas and the company has laid off its workers.

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Hannah said that "adds to the body of facts suggesting here that there is an intention to leave the Cyber Ninjas entity as an empty piñata for all of us to swing at."

When he issued his order, he reiterated that point.

"The court is not going to accept the assertion that Cyber Ninjas is an empty shell and that nobody is responsible for seeing that it complies," Hannah said.

Wilenchik got emotional in his pleas to be released from the case.

"I'm trying to work here and make a living," Wilenchik said.

But Hannah said the stakes of the case were too high to release him without a replacement.

"I do not believe I’ve had a more important case in the 16 years I’ve been on the bench," Hannah said.

Wilenchik also asked to be excused from a similar case filed by the left-leaning watchdog group American Oversight, which also sued the Senate for records from the election review.

Cyber Ninjas was made a party to that case, but like Hannah, the judge in that case, Michael Kemp, denied Wilenchik's request on Thursday, forcing him to continue working on that litigation as well.

"The Court will not consider granting a withdrawal until, at a minimum, the public records have been turned over to the Senate Defendants and CEO Doug Logan has been deposed," Kemp wrote in a Thursday decision.

Much like Hannah, Kemp said it wouldn't cost the law firm much of anything to comply with the orders to turn over records.

"There are no significant legal services necessary for counsel to oversee the transfer of public records to the Senate defendants and be present for the deposition of Doug Logan," Kemp wrote.

Judge to attorney: 'You are trolling me'

Cyber Ninjas had two out-of-state lawyers in Thursday's hearing who plan to represent the company and are looking for a local replacement to Wilenchik.

Wilenchik said it was "in limbo" whether Cyber Ninjas would file for bankruptcy.

"There's nobody to pay me," he pleaded with Hannah, before accusing the judge of being biased against him. "That's just not the way the world of lawyers works, OK. I need to make a living."

Then in an awkward exchange, Wilenchik accused the judge of smiling while Wilenchik complained about the decision.

“I’m smiling because I’m thinking of the accusations against me that you made in the motion to recuse me for cause that you did not appeal," Hannah said. "Where you said I’m biased against conservatives and on information and belief a Democrat. I smile every time I think about it because I’m not a Democrat.”

Wilenchik continued to question Hannah's decisions throughout the hearing, contending the judge's August ruling didn't actually order Cyber Ninjas to turn over records, so therefore the company couldn't be held in contempt.

When Hannah announced his decision Thursday to hold Cyber Ninjas in contempt for not obeying the order, Wilenchik asked him "What order are you referring to?"

Hannah paused.

"Mr. Wilenchik you’re, you really, you are trolling me, and it’s getting very close to direct contempt," Hannah said.

Wilenchik asked the Arizona Supreme Court on Thursday to halt Hannah's orders, but the court denied his motion.

Just a day prior, the Supreme Court denied a motion to review from Cyber Ninjas. The Supreme court on Thursday said in its denial that Cyber Ninjas could seek relief at the Arizona Court of Appeals.

What records were released so far

The Senate has turned over thousands of records from the audit in response to requests through the Arizona Public Records Law but continues to fight to withhold some documents under legislative privilege.

Cyber Ninjas has turned some records over to the Senate, but it remains unclear how many documents the company still has related to the audit that are subject to court orders.

At one point in the months-long case, the company suggested it might have 60,000 responsive documents.

Arizona Senate President Karen Fann, R-Prescott, who was in charge of the election review, wrote to Cyber Ninjas in September after the Supreme Court declined to intervene, and asked the company to turn over its records.

Cyber Ninjas previously suggested to the court that the plaintiffs should pay the federal rate for producing public records and that it would cost $65,000 to $70,000 to get the company to provide the records.

Hannah said that expense was not allowed under Arizona's Public Records Law and that furthermore, the company's suggestion of such a cost indicates there are many more records to provide that are subject to the records law.

He said the company could turn the records over to the Senate with little effort or cost and allow the Senate to determine what gets released to the public.

Reach reporter Ryan Randazzo at or 602-444-4331. Follow him on Twitter @UtilityReporter.

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