voltage pictures order of dismissal

7/30/2019 Voltage Pictures Order of Dismissal

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IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF OREGON

VOLTAGE PICTURES, LLC,P l a i n t i f f ,

v.DOES 1-198, DOES 1-12, DOES 1-34DOES 1-371

Defendants .

AIKEN, Chie f Judge:

Nos. 6:13-cv-290-AA, 2:13-292-AA, 1:13-293-AA,3:13-295-AA

ORDER

P l a i n t i f f Voltage Pi c t u re s i n s t i t u t e d t h ese ac t i o n s onFebruary 19, 2013, a s s e r t i n g c opy r i gh t in f r ingement ag a i n s t a l a rgenumber of users o f var ious Bi tTo rren t c l i e n t s , i d e n t i f i e d only byt h e i r i n t e r n e t p ro to co l (IP) ad d res ses . P l a i n t i f f a l l eg esdefendants c o l l e c t i v e l y i n t e rco n n ec t ed to i l l e g a l l y copy and

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Case 3:13-cv-00295-AA Document 78 Filed 05/04/13 Page 1 of 12 Page ID#: 672


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d i s t r i bu t e p l a i n t i f f ' s motion p ic tu re . On February 22, 2013, thecour t g ran ted p l a i n t i f f ' s motion to expedi te discovery so t ha tp l a i n t i f f could subpoena the var ious i n t e rn e t se rv ice providers(ISP) fo r the i d e n t i t y of th e a l leged i n f r ingers , and provided 45days to name th e Doe defendants or seek an extens ion.

On A p r i l 10, 2014, because p l a i n t i f f fa i l ed to amend or seekan extens ion to amend the complaints , the cour t ordered p l a i n t i f fto show cause why the complaints should not be dismissed . Thecour t , having reviewed p l a i n t i f f ' s response , f inds good cause hasbeen shown fo r t h a t f a i l u r e . However, the cour t a lso orderedp l a i n t i f f to show cause why the var ious Doe defendants in theac t ions should not be severed fo r improper j o inde r . The cour t nowhas the b e n e f i t of p l a i n t i f f ' s response to t h a t i ssue as wel l asbr ie f ing from some Doe defendants on the i ssue of j o inde r . Inaddi t ion , the cour t has reviewed the arguments made beforeMagis t ra te Judge Coffin by p l a i n t i f f ' s counsel in s imi l a r ac t ionsinvo lv ing Elf-Man, LLC aga ins t 107 Doe defendan ts . After reviewingthe record and p l a i n t i f f ' s respons ive mater ia l s , the cour t f indst ha t the Doe defendants have been improper ly jo ined and should besevered in favor of the f i l i ng of indiv idua l ac t ions aga ins t eachDoe defendant .

A Bi tTorren t c l i e n t al lows a group of users , through a t o r r e n tf i l e and t racker , to share smal l pieces o f a l a r g e r f i l e withnumerous othe r users to eventua l ly download the whole f i l e to each

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ind iv idua l user . Technica l ly , no user shares th e whole f i l e withany o t h e r i nd iv idua l user (unless one user i s an o r ig in a l up loaderand only one o t h e r p ee r i s in th e swarm) In these cases ,p l a i n t i f f a s se r t s t h a t th e Doe defendan t s copied and publ i shed thefi lm Maximum conv ic t ion v ia Bi tTorren t .

The cour t agrees t h a t t echno log ica l advances have re su l t ed inanonymous and s t ea l thy t o o l s fo r conduct ing copyr igh t i n f r ingementon a l a rge sca le . The co u r t fu r t h e r agrees pee r - to -pee r shar ingt echno log ies , such as Bi t T o r ren t , have a s e r i o u s impact on th ep r o f i t a b i l i t y of th e commercial product ion o f f i lms and music.But, th e need to d i sco v e r copyr igh t i n f r i n g e r s , who conduct t h e i rac t i v i t i e s r e l a t i ve ly anonymously, through pee r - to -pee r networks ,must be balanced aga ins t th e r i g h t s of Doe defendan t s who share nomore of a connect ion than merely committ ing th e same type of a c t inthe same type of manner . While these a re indeed th e type o f casesin which discovery , p re - s e rv i c e , i s meri ted , the use of a reversec la s s ac t ion i s not . This i s espec ia l ly t rue given thep ro l i f e r a t i o n of the use of the cour t s ' subpoena powers to t r o l lfo r quick and easy se t t l ement s .

As prev ious ly noted , th e manner in which p l a i n t i f f i s pursuingthe Doe defendan t s has r esu l ted in $213,850 sav ings in f i l i ng feesalone. 1 While these cos t s are s u b s t an t i a l , th e amounts sought from

1As of the da te the ac t ions were i n s t i t u t e d .2013, t h a t sav ings would be $244,400.3 - ORDER

As of May 1,



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each i nd iv idua l defendant i s $30,000 and, as noted below, could beinc reased to as much as $150,000. Even if the cos t s assoc i a t edwith piecemeal l i t i ga t i on could j u s t i f y jo inder ln these cases , thes t a t u t o ry damages sought o f f - s e t t ha t expense.

Under Federa l Rule of Civ i l Procedure 20, j o inder i s proper i f(1) p l a i n t i f f ' s claims a r i s e out of the same t r ansac t ions andoccur rences and (2) some ques t ion of law or f ac t common to a l l thedefendants wi l l a r i s e in th e ac t ion . See Fed. R. Civ. P. 20(a) ;Deser t Empire Bank v. Insurance Co. of N. Am., 623 F.2d 1371, 1375(9th Ci r . 1980). Even if these requirements are met, a d i s t r i c tcour t must examine whether permiss ive j o inder would "comport withthe pr inc ip l e s of fundamental f a i rness" or would r e s u l t inpre judice to e i t he r s ide . Deser t Bank, 623 F.2d a t 1375.

Many judges have determined t ha t th e t a c t i c of suing a l a rgeswath of use rs assoc i a t ed with IP addresses u t i l i z ed in theBi tTor ren t cases , improper ly jo ins dozens of de fendants in to as ing l e ac t i on , i.e., swarm j o inder . See, e . g . , Dig i t a l Sins , Inc .v. John Does 1-245, 2012 WL 1744838 @ *2 (S.D.N.Y. May 15, 2012)(not ing severa l cour t s have a l ready determined j o inder i simproper) ; But See AF Holdings LLC v. Does 1-1 ,058, 286 F.R.D. 39,55-56 (D.D.C.2012) (swarm j o inder theory i s permis s ib l e ) .

The number of cour t s hold ing t ha t swarm j o inder i s notappropr ia te i s growing. See Malibu Media, LLC v. John Does 1-54,2012 WL 3030302 @ *2 (D.Colo. Ju ly 25, 2012) ( co l l ec t ing cases ) ;

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see a lso Raw Films, Inc . v. Does 1-32, 2011 WL 6840590 @ *2( N D Ga . Dec . 2 9 , 2 011 ) (The swarm j o inde r theory "has beencons idered by various d i s t r i c t cour t s , the major i ty o f which haver e jec ted it."). More recen t ly , Judge James Gwin of the UnitedSta t e s D is t r i c t Court for the Northern D i s t r i c t o f Ohio took itupon himsel f to sua sponte sever th e Doe defendants in a Bi tTorren tcase--when he denied exped i ted d i scovery to discover the i d e n t i t i e sof the i nd iv idua l Doe de fendan t s - - in favor o f i nd iv idua l f i l i ngs .Safe ty Point Products , LLC v. Does, 2013 WL 1367078 (N.D.Ohio A p r i l4, 2013) .

P l a i n t i f f must a l l ege f ac t s t h a t permit the cour t to a t l e a s ti n fe r some ac tua l , concer ted exchange of data between the Doedefendan ts . Malibu Media, LLC v . John Does 1-54, 2012 WL 3030302a t *2. Here the a l l eg a t i o n s demonst ra te p a r t i c i p a t i o n in thea l l eged "co l lec t ive" a c t iv i t y o f shar ing on dates ranging from:November 19, 2012 to February 7, 2013; November 7, 2012 to February6, 2013; November 18, 2012 to January 13, 2013; and November 7,2012 to February 13, 2013. In add i t ion , th e various users u t i l i z e dd i f fe r ing ISPs in c i t i e s a l l over the Sta t e o f Oregon. There i s noa l lega t ion t h a t the users assoc ia t ed with each IP address l e f tt h e i r bi tTor ren t c l i e n t s open con t inua l ly downloading and uploadingth e pro tec t ed work over these months- long per iods of t ime. Indeed,it s t r e t ch es c r ed u l i t y to sugges t as much. The compla ints merelysuggests t h a t the Doe defendants committed the same type of

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vio la t ion ln the same way. While there may be the same type oft r ansac t ion or occurrence in p l a i n t i f f s ' infr ingement claims andce r t a in ly ques t ions of law common to a l l defendant s , the varyingt ime per iods , as well as a myriad of i s sues t ha t may ind iv idua l lyimpact defendant s , a t a minimum, suggest a lack of fundamentalfa i rness when jo in ing a l l defendants in to a s ing le ac t ion .

For ins tance , the var ious BitTorrent cases in th i s d i s t r i c thave already demonstrated some IP address are dynamic, some routersassoc ia ted with the IP address are unsecured, more than one usershares an account associa ted with an IP address , some Bi tTor rentc l i en t s are configured in such a manner so as to only allowdownloading and prevent uploading, and some IP addresses areassocia ted with i n s t i t u t i o n a l accounts such as bus inesses orschools with a la rge amount of use rs . Not only can suchdif ferences among defendants crea te di f fe r ing defenses to thea l l ega t ions , they can crea te conf l ic t s between defendants such t ha tjo inder would be unfa i r ly pre judic ia l .

Moreover, the process i s s ta r ted genera l ly by one person whobreaks the encryp t ion on the copyrighted mater ia l and begins theshar ing process . The culpabi l i ty associa ted with such a Bi tTor rentuser , assuming t ha t p l a i n t i f f ' s methods of detect ing i n f r ingersencompasses th i s l ike ly o r i g i n a l uploader , i s fa r grea te r thananother who may inadver ten t ly jo in ln the process unaware of theprotec ted na ture of the f i l e s downloaded. Again, there i s unfa i r

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pre judice t h a t w i l l r e s u l t by lumping such divergent defendantstoge ther in a s ing le ac t ion .

Even the pleadings by p l a i n t i f f suggest a p re j u d i c i a ld i f fe rence among defendants wherein it sugges t s in the complaintst h a t

On informat ion and be l i e f , many defendants have paidmoney to f a c i l i t a t e or permi t increased access to contentwhich has been made ava i lab le without au thor iza t ion .To inc rease the value of the adver t i s ing and sometimessubsc r ip t ion access sold by t o r r e n t s i t e s , many work toexpand the pool of ava i lab le t i t l e s and speed ofdownloads ava i lab le through inc reas ing th e number ofmember peers and thus th e des i rab i l i t y of t h e i r c l i e n t sand networks . To accomplish t h i s they reward par t i c ipan t swho con t r ibu te by giving them f a s t e r download speeds,g r ea t e r access , or o the r benef i t s .A s i g n i f i c a n t element of the Bi tTorrent model i s t h a tthose who pa r t i c ipa t e and download movies not only shareand upload movies with o the rs , but par t i c ipan t s a re of tenrewarded through var ious means based on th e volume andava i l ab i l i t y of content par t i c ipan t s in tu rn provide th enetwork. In sum, t he re i s a feedback incent ive fo rp a r t i c i p a n t s as they obta in not only the b en e f i t of t he i rp i ra t ed copy of a movie, but they obta in o ther benef i t sby i nc rea s ing the ava i l ab i l i t y of p i ra t ed content too the rs .As such t he re are a growing number of users t h a tpa r t i c ipa t e in peer - to -peer networks and rece ive persona lgain o r compensation in t h a t th e networks they use rewardthose who provide l a rge numbers o f f i l e s fo r upload too the rs . On in fo rmat ion and be l i e f , many defendants havebeen compensated fo r t he i r p a r t i c i p a t i o n in expanding th eava i l ab i l i t y 6f p i ra t ed content to o thers throughBitTorrent networks, inc luding p l a i n t i f f ' s movie.Another growing element of the Bi tTorrent model i s t h a tusers a re able to a t t ach adver t i s ing to the f i l e s theyupload through var ious means al lowing them to genera terevenue through the propagat ion of the t i t l e s they make

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ava i lab le to o ther s . While it may or may not be t ha t anyof the defendants in t h i s case are persona l ly andd i r e c t ly genera t ing revenue from such conduct , t he re i sa high l i ke l ihood t h a t the defendants are fu r the r ing suche f fo r t s as they download and then re -pub l i sh p i ra t edcon ten t t h a t has been p i ra t ed and used to provideadver t i s ing to t h i rd pa r t i e s .The use of Bi tTorren t does more than cause harm throughthe t h e f t of i n t e l l e c t u a l proper ty . The Bi tTor ren td i s t r i b u t i o n i s a model of bus iness t h a t p r o f i t s fromt h e f t through sa les and adver t i s ing and a system ofrewards and compensation to the p a r t i c i p a n t s , each ofwhom con t r ibu te s to and fu r the r s the en t e r p r i s e .

~ ' Proposed Second Amended Complaint , 6:13-cv-293-AA (a t tachedto #16) a t pp. 6-7. Thus, it i s apparen t t h a t p l a i n t i f f seeks toplace a l l users with th e same degree of cu lpab i l i ty regardless ofi n t en t , degree of shar ing o r p r o f i t . For ins tance , thegrandparen ts whose young grandchi ld used t he i r computer to downloadwhat looks l i ke an en te r ta in ing Christmas movie, to h is innocentmind, through t he i r IP address , are the same as an organ iza t ioni n t e n t i o n a l l y decrypt ing and dupl i ca t ing DVDs en masse whileplan t ing s t e a l t h v i r a l adver t i s ing , or more nefar ious Trojanhorses , in to the upload st ream. By being lumped t oge the r , the Doedefendant who may have a l eg i t imate defense to th e a l l eged lyin f r ing ing a c t iv i t y i s severe ly pre jud iced .

Indeed, while p l a i n t i f f earnes t ly cla ims to be defendingaga ins t the plague of pee r - to -pee r copyr igh t in f r ingement andp r o t ec t the hardworking men and women who produce movies r i g h t todown to the gaf fe r and gr ip , appears to be employing a somewhat

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underhanded bus iness model o f i t s own to r a i s e p r o f i t s fo r what maybe a l e s s than p ro f i t a b l e , unpopular movies . The cour t has asample demand l e t t e r p l a i n t i f f s ' counsel has been ~ e n d i n g to thepersons assoc ia t ed with th e IP address upon t h e i r discovery . Inth e l e t t e r , t h r e a t s regard ing severe p u n i t i v e damages a re made2long with th e no t so sub t l e impl ica t ion t h a t l i a b i l i t y lS aforegone conclus ion :

you have been i d e n t i f i e d as th e party responsible fo r the[IP] address used to i l l e ga l l y copy or share our c l i e n t ' scopyr igh t motion p ic tu re th rough ... Bi tTorren t . Thisl e t t e r i s a cour tesy before we are required to t ake moreformal l eg a l ac t ion which would involve adding you asnamed defendant to th e l awsu i tCopyr ight in f r ingement i s very s e r i o u s problem fo rt h e en t e r t a in men t i ndus t ry [and our] c l i e n t t akes th eenforcement o f i t s copyr igh t se r ious ly and wi l l use a l ll ega l means ava i lab le to protec t i t s r ights .The law ... al lows th e copyr igh t owner to recoverattorney f ees , and seek damages o f up to $150,000 perwork . . . . While it i s too l a t e to undue the i l l e g a l f i l esharing you have already done, we have prepared an o f f e rto enable our c l i e n t to recoup th e damages incur red byyour ac t ions and defray the cos t s of p reven t ing t h i s typeof a c t iv i t y in the fu tu re ....In exchange fo r a comprehensive re l ea se of a l l l e g a lcla ims which wi l l enable you to avoid becoming a nameddefendant in the l awsu i t , our f irm i s au thor ized toaccep t th e sum o f Seven Thousand Five Hundred Dollars($7,500) as f u l l s e t t l emen t fo r i t s c la ims . This o f f e rwi l l expire in two weeks. T h erea f t e r , if our c l i e n tchooses to s e t t l e , th e demand sha l l be Ten ThousandDol lars ($10,000) and th i s amount wi l l continue toincrease as l i t i ga t i on expenses accrue.

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[ I ] f you do not comply with the above reques t we intendto name you as a defendant to the l awsu i t and proceedaga ins t you e i the r ind iv idua l ly in a severed s u i t if youreques t , or j o in t l y ... we l eave the e l ec t i o n of how toproceed up to you, though we note cos t s and fees to severand proceed aga ins t you ind iv idual ly in a separate su i tare notable and we wi l l demand tha t a l l such cos t s andf ees be added to any se t t l ement .I f forced to proceed aga ins t you, our c l i e n t rese rves ther i g h t to r ecover the maximum amount of damages, cos t s anda t to rney fees ... which i s $30,000 and up to $150,000 ... .In l i gh t o f the known fac t s o f th i s case we have no doubtth i s infr ingement was in t en t iona l .

Exhibi t B a t tached to Answer and Cross Complaint (#2) in VoltagePic tu re s , LLC v. Does 1-321, 3:13-cv-295-AA a t pp. 1-2 (emphasisadded) .

The l e t t e r goes on to make t h r e a t s aga ins t a t tempts to de le tef i l e s with asse r t ions t h a t p l a i n t i f f ' s exper t s w i l l f ind it anywayand the cos ts assoc ia ted with t h a t w i l l also be added to theassessment .

Accordingly , p l a i n t i f f ' s t a c t i c in these Bi tTorrent casesappears to not seek to l i t i g a t e aga ins t a l l the Doe defendan ts , butto u t i l i z e the c our t ' s subpoena powers to dra s t i c a l l y reducel i t i g a t i o n cos ts and obta in , in e f f e c t , $7,500 fo r i t s produc twhich, in the case of Maximum Convict ion, can be obtained fo r $9.99on Amazon fo r the Blu-Ray/DVD combo or $3.99 fo r a d i g i t a l r e n t a l .

The co u r t wi l l fol low the major i ty o f other cour t s indec l in ing to condone t h i s p r ac t i c e of en masse j o inde r inBi tTorren t cases and orders a l l Does beyond Doe one severed and

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dismissed from the cases . While the ease with which movies can becopied and disseminated in th e d i g i t a l age no doubt has ade le te r ious e f f e c t on th e paying market fo r such en te r t a inment ,j u s t as a mass of p l a i n t i f f s harmed through sepa ra t e , but s imi la rac ts of one defendant must genera l ly seek redress ind iv idua l ly , soshould a p l a i n t i f f seek redress ind iv idua l ly aga ins t a mass ofdefendants who use s imi la r t ac t i c s to harm a p l a i n t i f f . Eventhough it makes a good dea l of sense to s t a r t these cases i n i t i a l l yby jo in ing a l l Does so t h a t the process of d iscovering them can beeconomized, 2 it has now become apparen t t ha t p la in t i f f s ' counselseeks to abuse the prQcess and use scare t ac t i c s and p a in t a l l Doeusers , regardless of degree of cu lpab i l i ty in th e same l i g h t . Thisprac t ice does not "comport with the p r in c ip l e s of fundamentalfa i rness . "

P ar t i c ip a t i o n in a spec i f i c swarm i s too imprecise a fac to r ,absent add i t iona l in fo rmat ion r e l a t i n g to the a l leged copyr igh tin f r ingement , to support j o inde r under Rule 20(a) . Moreover, ther e s u l t i s l og i s t i ca l l y unmanageable cases invo lv ing unique defensesin addi t ion to fundamental unfa i rness . Accordingly, the cour tquashes a l l outs tanding subpoenas and dismisses a l l Doe defendantsbeyond the f i r s t Doe in each case . P l a i n t i f f sh a l l have 10 days to

2I , however, note t h a t even t h i s j u s t i f i ca t i on i s mutedbecause it i s not c lea r if the account holders of a given IPaddress i s the ac tua l i n f r i n g e r . Moreover, mere p a r t i c i p a t i o n ina given swarm may not r e s u l t in a f u l l download.

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submi t amended compla in t s . Al l o t h e r pending m ot ions a re denied asmoot.

CONCLUSIONFor th e reasons s t a t ed above, Doe defendants a re orde red

severed and di smissed in t h ese cases beyond Doe #1 in each case .A ll outs tand ing subpoenas a re quashed and a l l o t h e r pending motionsa re denied as moot.

DATED t h i s ~ day of May, 2013.U a ~ C l , ~Ann AikenUnited Sta t e s D i s t r i c t Judge

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voltage pictures order of dismissal

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