Opinion
Case No. C13-0560RSL
08-07-2013
THE THOMPSONS FILM, LLC, Plaintiff, v. DOES 1 - 194, Defendants.
ORDER LIFTING STAY AND
EXTENDING SERVICE DEADLINE
This action was filed on March 28, 2013. Each of the Doe defendants is identified only by an IP address linked to the on-line sharing of the movie "The Thompsons." Plaintiff asserts direct, contributory, and indirect copyright infringement claims against each Doe defendant. The Court granted plaintiff's motion to initiate early discovery from internet service providers in order to obtain information sufficient to identify the owner of each IP address.
On May 9, 2013, the Court issued an order to show cause acknowledging concerns regarding the propriety of joinder and the possibility that plaintiff was using the judicial authority of the United States to wrest improvident settlements from pro se litigants under threat of huge statutory penalties. The Court stayed the above-captioned matter and required plaintiff to provide copies of all written communications with the owners of the IP addresses and summaries of all oral communications with those individuals. In addition, the Court ordered plaintiff to show cause why the case should not be dismissed for improper joinder and/or pursuant to the Court's inherent authority to control its docket. On May 31, 2013, Doe 51 filed a "Motion to Sever & Dismiss and/or Issue a Protective Order" (Dkt. # 27) related to the joinder issue. Having reviewed plaintiff's response to the order to show cause and the motion to sever, the Court finds as follows:
A. Joinder
Federal Rule of Civil Procedure 20(a)(2) imposes two specific requirements for the permissive joinder of defendants. First, the right to relief against defendants must arise out of "the same transaction, occurrence, or series of transactions or occurrences." Fed. R. Civ. P. 20(a)(2)(A). Second, there must be some question of law or fact common to all defendants. Fed. R. Civ. P. 20(a)(2)(B). Taking the well-pled factual allegations of the complaint as true and considering the declarations of plaintiff's investigator, the Court finds that these requirements are easily met. Plaintiff's investigator found that a user of the IP addresses identified in this action possessed a pirated copy of "The Thompsons," that each copy was a reproduction of the same original, and that plaintiff's investigator downloaded a portion of the pirated copy from each defendant. The Court finds that defendants' knowing participation in an on-line media distribution swarm, the purpose of which was to distribute copies of a single original and which actually resulted in such distribution, is a series of transactions or occurrences that justifies joinder under Rule 20(a)(2)(A). The Court declines to require allegations or evidence that each defendant directly exchanged data with every other defendant. Such a requirement would ignore the realities of how the BitTorrent system works, including its planned anonymity and universal donor aspects. Neither the language of the Rule nor the policies behind it suggest that direct contact between participants in a group is necessary to justify joinder.
The Court further finds that litigating this case will involve common questions of fact and/or law regarding the existence of a swarm, the alleged downloads, plaintiff's ownership of the copyright, and the elements of infringement. The fact that persons associated with the IP addresses may have individual defenses to plaintiff's claims does not change the fact that there will be some common questions of law or fact: not all of the legal and factual issues must be identical as to all defendants. Patrick Collins, Inc. v. Does 1-21, 282 F.R.D. 161, 168 (E.D. Mich. 2012).
Although the specific requirements of Rule 20 are met, the Court must also determine whether permissive joinder will "comport with the principles of fundamental fairness." Coleman v. Quaker Oats Co., 232 F.3d 1271, 1296 (9th Cir. 2000). Factors relevant to this determination include the possible prejudice to any party, delay caused by joinder, the motives for joinder, the closeness of the relationship between the joined parties, notice to the parties, and the effect of joinder on jurisdictional issues. Desert Empire Bank v. Ins. Co. of N. Am., 623 F.2d 1371, 1375 (9th Cir. 1980). In the Ninth Circuit, "[w]e start with the premise that Rule 20 . . . is to be construed liberally in order to promote trial convenience and to expedite the final determination of disputes, thereby preventing multiple lawsuits." League to Save Lake Tahoe v. Tahoe Reg'l Planning Agency, 558 F.2d 914, 916-17 (9th Cir. 1977).
Jointly litigating the facts related to the swarm plaintiff has identified and the legal issues related to infringement is more efficient for plaintiff and the Court than litigating 194 suits involving only one IP address each. In addition, the nature of the swarm and the BitTorrent protocol, with its many pieces and multiple sources, suggests that joint litigation may be necessary for plaintiff to substantiate its theory that defendants acted in concert to download copyrighted material, even if the segment downloaded from a particular defendant, considered alone, might not constitute copyright infringement. Defendants, on the other hand, gain no appreciable advantage through individual litigation: in either case, defendants will be able to offer individual defenses to the allegations. Nor does there appear to be any significant risk of liability by association. Jointly litigating these claims also allows defendants, many of whom will undoubtedly proceed pro se, to pool resources, rely on arguments raised by other defendants, and/or benefit from the participation of retained counsel. The only potential advantage to severance appears to be the hope that plaintiff will give up its claims, no matter how meritorious, in the face of mounting costs. If, as the Court is willing to assume at this stage in the proceeding, plaintiff's allegations are true and its copyright has been infringed, such a result is neither just nor fair.
Contra Voltage Pictures, LLC v. Does 1-12, No. 2:13-292-AA, 2013 WL 1900597 (D. Or. May 4, 2013) (finding availability of statutory damages and potential that unintentional infringers could be prejudiced by being sued along with original seeder and/or serial infringers precludes joinder).
The Court further finds that there is no indication that joinder will impact the Court's subject matter jurisdiction and that defendants' alleged participation in a knowing and intentional file-sharing scheme constitutes interrelated acts justifying joint litigation even if defendants remained unaware of the identity of their fellow BitTorrent users.
The Court is, however, concerned about the impact that joinder has had on the handling of similar litigation pending in this district and how that handling reflects on plaintiff's motives for amassing the group of defendants in this case. To be clear, the Court finds that joinder under Rule 20 for purposes of prosecuting copyright infringement claims against members of a swarm in a single lawsuit can be appropriate. If, upon receipt of identifying information regarding the individuals associated with the IP addresses at issue, plaintiff timely affects service and actually prosecutes this case, the goals of efficiency, justice, and expeditious resolution of the dispute will be served. If, however, service is not affected and the pendency of this action is simply used as a cudgel, mass joinder will cause delay and raise all sorts of potential for abuse, as discussed more fully below.
In the circumstances of this litigation, the Court finds that joint litigation against numerous participants in a single swarm satisfies the specific requirements of Rule 20(a)(2) but that the joinder may ultimately create a procedural imbalance which, left unchecked, would not comport with the principles of fundamental fairness.
B. Lack of Service
Pursuant to Fed. R. Civ. P. 4(m), "[i]f a defendant is not served within 120 days after the complaint is filed, the court - on motion or on its own after notice to the plaintiff - must dismiss the action without prejudice against that defendant or order that service be made within a specified time." The time for service has now passed, but plaintiff had more than two months left on the service clock when the above-captioned matter was stayed. There is reason to doubt whether timely service would have been affected in the absence of the stay, however. Even when plaintiff learned the identity of persons associated with the IP addresses at issue in this case, it delayed service in favor of pursuing discovery and settlement negotiations.
The packet sent to individuals who contacted counsel included a demand letter, a copy of the complaint, and two copies of the waiver of service of summons form. There is, however, no indication that plaintiff included a prepaid means of returning the form as required by Fed. R. Civ. P. 4(d)(1)(C). Nor were any proofs of actual service filed as required by Fed. R. Civ. P. 4(l).
As subscribers became aware of the lawsuit, they predictably began contacting plaintiff's counsel in order to obtain information. Counsel apparently collected identifying information and sent a demand letter, a sheet of "Frequently Asked Questions," a copy of the complaint, and a waiver of service of summons form. Plaintiff has not provided a copy of its Release & Settlement Agreement - presumably because negotiations did not proceed to that point before the stay was entered - but the information available to the Court raises concerns regarding overreaching and procedural unfairness.
Plaintiff's demand letter and FAQ sheet paint a dire portrait of the recipient's situation. Plaintiff emphasizes the risk of huge damage awards (nine mentions of statutory penalties and/or judgments of $150,000 or more) and the possibility of an attorney's fee award (at least eight references, including a warning that fees "can be thousands; tens of thousands if the matter proceeds to trial"). Plaintiff also warns that additional claims for spoliation could be filed against the recipient, that being named in the lawsuit increases the risk that other copyright holders will take an interest in the recipient's activities, and even that failure to settle could ultimately result in the loss of the recipient's house if he or she is unable to pay the judgment amount. Plaintiff demands a sizeable settlement amount, which is available for only two weeks before it jumps even higher. Plaintiff's advice regarding the association of counsel (the court will not appoint counsel in a civil suit), the validity of possible defenses (failure to password protect and/or monitor the use of your internet connection generates liability), and the bankruptcy code (this type of debt would likely be nondischargeable) is suspect. Finally, plaintiff invites the recipient to provide access to his or her computer or other evidence proving that he or she did not download "The Thompsons."
The $1,500,000 damage award touted in the FAQs was a default judgment entered when defendant failed to appear. Contrary to plaintiff's supposition, there is no indication that the court considered the viral nature of the BitTorrent protocol when it granted plaintiff's unopposed demand for statutory damages.
When plaintiff sought permission to conduct discovery in this case, it represented the discovery as both limited and efficacious: by subpoenaing subscriber identification information from the ISPs, plaintiff would be able to pursue this lawsuit and protect its copyrights. It turns out, however, that identifying the account holder may tell us very little about who actually downloaded "The Thompsons" using that IP address. As one court noted, "it is no more likely that the subscriber to an IP address carried out a particular computer function . . . than to say an individual who pays the telephone bill made a specific telephone call." In re BitTorrent Adult Film Copyright Infringement Cases, 2012 WL 1570765, at *3 (E.D.N.Y. May 1, 2012). In fact, it is less likely. Home wireless networks are ubiquitous, meaning that a single IP address can simultaneously support multiple computer devices throughout the home and, if not secured, additional devices operated by neighbors or passersby. Thus, the risk of false positives is very real. Digital Sin, Inc. v. Does 1-176, 279 F.R.D. 239, 243 (S.D.N.Y. 2012). It is not clear that plaintiff could, consistent with its obligations under Fed. R. Civ. P. 11, make factual contentions regarding an internet subscriber's infringing activities based solely on the fact that he or she pays the internet bill. Plaintiff seems to be aware of this problem and has refrained from identifying the Doe defendants more specifically even after it learns the name of the subscriber. Plaintiff does not, however, take the appropriate step of returning to the Court to seek permission to conduct additional discovery. Rather, plaintiff demands that the subscriber prove he or she did not download "The Thompsons." Therein lies the rub. Plaintiff has effectively obtained access to unrepresented individuals and parleyed that access into open-ended and unlimited discovery, despite the very narrow discovery order entered by the Court.
In this context, the 120-day service deadline is the only thing that limits plaintiff's unsanctioned discovery expedition. If plaintiff feels it has enough information to satisfy its Rule 11 requirements by simply identifying the subscriber associated with an IP address, it should serve the complaint and initiate litigation subject to the limitations imposed by the rules of civil procedure. If, on the other hand, plaintiff would have trouble justifying a factual contention that the internet subscriber must, by virtue of that fact, be the downloader, it could seek an extension of the service deadline, explaining why it was unable to obtain the information in a timely manner and identifying steps to be taken that would allow litigation to begin. If those steps include additional discovery, further permission of the Court would be necessary.
In short, plaintiff must actually prosecute the claims it has asserted. Instead, plaintiff's litigation strategy seems to be to use the pendency of this action to create a period of time in which it can scare subscribers into settlement as the only means of avoiding both litigation costs and harsh statutory penalties. The communications disclosed to the Court show that plaintiff makes every effort to educate subscribers regarding the statutory penalties he or she faces. Coupled with the clear implication that evidence of IP address ownership is legally sufficient to establish copyright infringement and the demand that the subscriber prove his or her innocence, it is not surprising that subscribers - whether guilty or not - may choose to settle. While the risk of improvident settlements and overreaching cannot be eradicated, the Court will enforce not only the procedural rules that favor plaintiff, but also those that protect defendants. Absent extraordinary and unforeseeable circumstances, the service deadline in this case will be strictly enforced in order to reduce the risk of overreaching.
C. Protective Order
Doe 51 objects to the subpoena issued to his ISP, arguing that the information sought is not likely to lead to the discovery of the person who used his IP address to download "The Thompsons" and that the disclosure of his contact information will cause him annoyance, embarrassment, oppression, and undue burden/expense. Although there is no guarantee that the subscriber associated with a certain IP address was the person who downloaded the movie, discovery regarding the subscriber's identity is plainly relevant under the Federal Rules of Civil Procedure. In some instances, the subscriber is, in fact, the one who infringed plaintiff's copyright. At the very least, the subscriber is likely to have information regarding the users of the IP address that would lead to the discovery of the actual infringer. Doe 51's relevance related objections to the subpoena (Dkt. # 27 at 14-19) are overruled.
Nor has Doe 51 established that the disclosure of his name, address, email address, and Media Access Control address would cause embarrassment or undue burden in the circumstances presented here. "The Thompsons" is a horror thriller: being identified in a lawsuit involving the film is not socially damaging in the same way that being associated with a pornographic film would be. To the extent that plaintiff's litigation strategy poses a risk of overreaching or oppression, the Court will require plaintiff to timely investigate and prosecute the claims asserted within the confines of the litigation. Precluding discovery of identifying information altogether would prevent copyright holders from enforcing their rights in the BitTorrent context, no matter how meritorious the claim or how blatant or widespread the infringement. While the Court is cognizant of the need to balance the various interests at issue in this litigation, a prohibition on early discovery, no matter how targeted and innocuous, tilts the balance too far in the favor of the putative defendants.
For all of the foregoing reasons, Doe 51's motion to sever or dismiss and request for a protective order (Dkt. # 27) is DENIED. The stay of the above-captioned case is hereby lifted and plaintiff may again pursue identifying information regarding the Doe defendants from the ISPs pursuant to the Court's prior discovery order. Plaintiff shall have eighty days from the date of this Order to complete discovery and affect service. Failure to file proof of service on or before the eightieth day will result in the dismissal of plaintiff's claims as to each unserved defendant.
Doe 128's request for oral argument (Dkt. # 31) is DENIED.
__________________________
Robert S. Lasnik
United States District Judge