MPAA Helped Police Seize 'Pirated' DVDs That Were Actually Fully Authorized

from the expect-more-like-this dept

Tue, Nov 1st 2011 8:32am — Mike Masnick

Here's a story that touches on a few different issues of importance around these parts. We'll get to the details of the legal ruling in a bit, but the background is really the key part. At the beginning of 2009, a company in Valencia, California, called L&M Optical Disc West, received an order from an authorized partner of the producers of the film Milk to manufacture the DVDs of the film. They began doing exactly that. On February 2nd, as part of a supposedly unrelated police raid, police saw those DVDs and found them "suspicious." They rang up the MPAA who sent over an "investigator," who falsely declared that the DVDs were unauthorized, leading the police to seize them (though, oddly, allowing the private investigation firm to hold them) and to declare to the press that they had found "pirated" DVDs of Milk. This happened despite multiple attempts by L&M staff to explain that they had a legitimate order, even offering to show the "investigator" the details of the order.

The following day, L&M provided the police with all of the evidence that they were authorized to make those DVDs, and the police sergeant told L&M's owner that the DVDs could not be released because they were "pirated." From there, a bunch of press stories followed, with the police repeatedly telling the press that L&M was being investigated for such "piracy," even after the MPAA and the police realized that the DVDs were, in fact, authorized. Months later, however, the press was still quoting the police as saying that L&M was "under investigation" for "piracy."

Because of all of this, L&M claims that customers canceled jobs with L&M and past customers chose to find new partners. It also meant that other vendors who used to send "overflow" work to L&M no longer did so. It effectively dried up much of L&M's business.

If this all seems pretty horrifying, think of how much worse this kind of situation may be about to get. First off, just a few weeks ago, we noted that Governor Jerry Brown in California passed a law that would let law enforcement do more of these kinds of raids but they no longer need a warrant to do so. Yes, despite this massive failure on such a raid, the government now has even more authority to do these kinds of raids, and the MPAA can continue to get away with providing bogus information and effectively killing businesses.

Take it one step further: this is the reason why so many of us are so worried about the new E-PARASITE bill. The MPAA and other copyright holders have a dreadful history and reputation for being inaccurate when it comes to accusing others of infringement. Yet, under E-PARASITE, they get to kill sites dead, without any recourse, before anyone even looks to see if the copyright holder's claim is legit. Doesn't that seem the least bit problematic?

Now, as for the actual case at hand, for which you can read the full decision (pdf and embedded below), it involved the court tossing out a lawsuit by L&M against the MPAA over all of this, using California's anti-SLAPP laws. We're big fans of California's anti-SLAPP laws, and while we find the MPAA's conduct in this situation reprehensible, the ruling actually makes sense. The comments that were the most problematic to L&M in the newspaper reports were not, in fact, made by the MPAA but by the police. If anyone is responsible, it should be the police who made them.

L&M tries to place liability on the MPAA by claiming that the police and the MPAA had a "joint venture" going in these raids, but that isn't supported by the facts. This raid wasn't done at the request of the MPAA, and originally had nothing to do with copyright at all. So, we agree that blaming the MPAA for the comments in the press is improper, as it's misapplied third party liability. Of course, there does seem to be a bit of irony in the fact that the MPAA appears to be working overtime to increase third party liability by undermining the kinds of safe harbors that protect a party from being blamed for the speech of others. However, it's no surprise at all that the MPAA is -- yet again -- too clueless to recognize how its actions undermine its own legal protections elsewhere.

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Filed Under: 1st amendment, 4th amendment, anti-slapp, defamation, dvds, e-parasite, infringement
Companies: l&m optical disc west, mpaa

45 Comments

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Anonymous Coward, 1 Nov 2011 @ 8:50am

What a great way to get rid of a competitor. Im sure that this could work out. Anonymously refer the police to a legit manufacturing house and watch the police state work.
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Ninja (profile), 1 Nov 2011 @ 8:55am

SOPA supporters will say it's just one example gone bad, SOPA couldn't actually have too much collateral damage ;)

But you see, it's interesting. SOPA tramples with the very 3rd-party liability laws that saved MAFIAA in this case. I say fine irony we got here.
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Anonymous Coward, 1 Nov 2011 @ 9:09am

This country is really heading downhill quickly.2012 could very well spell the Apocalypse for USA as we know it now.I am very angry and am waiting for a major action on Washington.Then it is time to put my dog into a kennel and make my way South to DC.When I see millions saying to go there we should all go there and protest/demand this BS to stop.We do not want Censorship and we will not put uip with it for a moment.
Also I would hope that many hacking/defacing of websites go on every day by millions of folk.Completely bring down their websites.Sit in the main streets of Washington with millions and force it to stop to a standstill.
Take away our freedom and it will not be long till violence starts happening.No one in this country wants to live in a place like Russia.
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out_of_the_blue, 1 Nov 2011 @ 9:19am

@AC #1: Yot, that's exactly a technique that monopolies use.
Believe it or not, I had the same reaction before reading your post. Excellent mechanism for getting rid of rivals. Doesn't necessarily have anything to do with Mike's mania, could just be old-fashioned framing of a rival. After all, recently manager of a pizza parlor down south burned down a rival place just to get more traffic to his store! People are insane when money is involved; that needs to be recognized and guarded against constantly.

The solution here is strong anti-trust that prevents corporations from getting too large, period. You /cannot/ trust corporations to ANY degree, but can ensure enough around to attack each other, and that they're not in cahoots. -- Yes, that includes the MPAA needs to be taken down QUITE a bit.
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Anonymous Coward, 1 Nov 2011 @ 9:20am

This seems a thing impossible given that the AC all over the latest E-PARASITE article was telling us that pirated content is sooooo obviously pirated and it was really a black and white issue. It couldn't possibly be that he was lying or misrepresenting the issue could it?
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PaulT (profile), 1 Nov 2011 @ 9:24am

Re:
"pirated content is sooooo obviously pirated and it was really a black and white issue"

Take the safe route and assume he's a moron. Nobody who claims such a thing knows what the hell they're talking about.
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Anonymous Coward, 1 Nov 2011 @ 9:28am

Re:
I was just thinking how ripe such a scheme was for shakedowns. "Hey! Make sure to pay us your 'protection money' or we'll have the police show up at your door, confiscate all your goods, seize all your domains, and cut you off from all payment processors!"

Courts? What are those?
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Chronno S. Trigger (profile), 1 Nov 2011 @ 9:37am

Re: @AC #1: Yot, that's exactly a technique that monopolies use.
You're right, it may be good old-fashioned framing. But this is still an argument against these unconstitutional laws.

The MPAA is, in this case, an independent party (unrelated to the potential framing) that made a mistake (common for them). A mistake that was resolved with further investigation by the police. With the e-parasite law, further investigation isn't required. Initial investigation isn't required. Once they were accused, that's it.

So the MPAA, or whatever, claims something is in violation, files the proper paperwork, and ends it. The company is blackballed, can't make money, and has no clear (if any) recourse.

I agree with you on the anti-trust part, but that's not going to fix the overwhelming problems that we have today. The trusts have created too many problems, we need to fix those as well as go trust busting.
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quickbrownfox, 1 Nov 2011 @ 9:43am

Moonbeam strikes again. No wonder California has a reputation for being among the most misgoverned states in the nation.
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Anonymous Coward, 1 Nov 2011 @ 9:55am

Whats the point of working in the movie/tv industry if your employer sends the cops after you?

I can see it now, the momentous signing of the MPAA are Parasites law, the tv/movie industry begins a crashing decline,replaced by technologically superior video games and indie video. Its a matter of time really. The price of tickets are going up and the attendance is going down. Less attendance means less pop culture impact, which feeds into this looming irrelevancy that the MPAA is attempting to hasten.

Just like CD's gave way to MP3's, DVD's to streaming, Movie/TV will give way to video games and indie.
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Anonymous Coward, 1 Nov 2011 @ 10:10am

If you make a false statement to the police, you have committed a crime. Yet the police can make false statements and nothing can be done about it, now that's a crime.
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DCX2, 1 Nov 2011 @ 10:11am

Why is the MPAA not at fault?
Who said that the DVDs were pirated, again?

Whoever said that was wrong. They should bear some culpability for wrongly accusing L&M of piracy.
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jackwagon (profile), 1 Nov 2011 @ 10:15am

Re:
I hope you're right, but something tells me they'll find a way to legislate these endeavors into the ground too.
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Anonymous Coward, 1 Nov 2011 @ 10:16am

I wonder how many DVD manufacturers are in southern California and elsewhere? Once L&M's travails become widely known, it is likely that the film industry will have trouble finding anyone to make their DVDs. After all, if the fear of confiscation and legal expense becomes more costly than any contract from a film studio, the studios will either provide more money or offer legal protection from the MPAA in order to their their DVDs out. Either way, DVDs will get more expensive for the rest of us.
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anonymous, 1 Nov 2011 @ 10:31am

really, it's irrelevant who was to blame for this fiasco. L&M had done nothing wrong but had their business decimated through no fault of their own. someone should be made to pay, although i doubt if the business will ever truly recover. once the new bills become law, i wonder how many businesses that are put into the same position it's gonna take before the morons in government realise the size of the hole they have blown into their own feet. the effect to the economy is going to be, hopefully, catastrophic. but if that's what it takes to get these idiots to see sense, then so be it!
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iamtheky (profile), 1 Nov 2011 @ 10:48am

on the positive side
They now have a court opinion that there is reason for fault, and that the police are liable. Their next much larger lawsuit against the city should get them paid. Especially if it goes before the same judge.
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Anonymous Coward, 1 Nov 2011 @ 10:57am

Re:
Already there for me. I enjoy my games and enjoy giving 'Big Content' the finger.

*takes my money and spends it where it's deserved*
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Anonymous Coward, 1 Nov 2011 @ 10:58am

How is the MPAA not culpable here? The police suspected them to be pirated and called in an MPAA investigator who confirmed they were pirated in spite of all the evidence that they were not. The police were just stating what the voice of the MPAA said. Hence the MPAA is at fault and should be held responsible. There is no third party liability here at all. If the MPAA investigator had read the documentation and told the police they made a mistake, L&M would not have been dragged through the mud. Just another judge in the pocket of Big Content.
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Anonymous Coward, 1 Nov 2011 @ 11:27am

Re:
it's irrelevant who was to blame for this fiasco [...] someone should be made to pay

Someone already *did* pay - L&M.

Just like you said, their business was decimated - so they are paying.

Logically, you would want to know who is to blame so that the responsible party can pay... but if blame is irrelevant and yet "someone" must pay, then it really doesn't matter who that "someone" is.

Unless you'd like to correct your first sentence?
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Digitari, 1 Nov 2011 @ 11:27am

RE "you're a witch"
does ANYONE see the similarity to the "AA's and the Salem witch trials?? ANYONE????????????
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btr1701 (profile), 1 Nov 2011 @ 11:30am

Re:
> L&M had done nothing wrong but had their
> business decimated through no fault of their own.

Sounds like they lost a helluva lot more than 10% of their business. They were a lot more than just decimated.
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Overcast (profile), 1 Nov 2011 @ 11:57am

Moral of the story: Do NO business with the MPAA or RIAA.
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Thomas (profile), 1 Nov 2011 @ 12:16pm

Just shows..
that the local police and the DOJ have become corporate tools, far more interested in dirty money than enforcing the law.
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Jeffrey Nonken (profile), 1 Nov 2011 @ 12:38pm

Nothing to hide, nothing to fear.
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Anonymous Coward, 1 Nov 2011 @ 1:20pm

Yet, under E-PARASITE, they get to kill sites dead, without any recourse, before anyone even looks to see if the copyright holder's claim is legit. Doesn't that seem the least bit problematic?

More lies FUDboy? You know full well that a site that receives an infringement claim can file a counterclaim and that automatically bounces the matter to a federal judge. You're entitled to your own opinion Masnick, but not your own facts. On the other hand, your deliberate lies make for great examples to illustrate the depths to which the opponents will sink to be able to continue to steal content.
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lucidrenegade (profile), 1 Nov 2011 @ 1:20pm

Re: @AC #1: Yot, that's exactly a technique that monopolies use.
/Could/ /not/ /resist/ /taking/ /a/ /cheap/ /shot/ /at/ /Mike/ /,/ /could/ /you/ /?/ /Jackass/
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Jay (profile), 1 Nov 2011 @ 1:28pm

Re:
More lies FUDboy? You know full well that a site that receives an infringement claim can file a counterclaim and that automatically bounces the matter to a federal judge

Meanwhile, the defendant also has to deal with Visa, Mastercard, and other businesses pulling away while the details are sorted out. All because of an accusation of infringement that might be baseless.
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Anonymous Coward, 1 Nov 2011 @ 1:29pm

Re: Re:
Yeah, I tend to disagree that they had done nOthing wrong. They employed more than 50 potentially illegal aliens who were using falsified identification. It's hard to believe that L&M had no knowledge whatsoever of their status when there are that many. If they were abiding my that part of the law, then the police wouldn't have showed up at their door, leading to the discovery of the "pirated DVDs.". Some of those businesses that stopped doing business with L&M may have done so based on their employment of potential illegal aliens alone. But that doesn't excuse the MPAA's outlandish claims in light of the evidence, which was the final shovel of dirt on L&M's grave.
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The eejit (profile), 1 Nov 2011 @ 1:36pm

Re:
OH, hi, Defamer!

(read that in a turretgun's voice from Portal)
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That Anonymous Coward (profile), 1 Nov 2011 @ 2:01pm

Re: Re: Re:
potentially illegal aliens... so they were brown to boil your point down.
While your thinking they should be screwed out of business over this, I'd like you to remember to close all the farms, meat packers, and lawn services. Oh and arrest some Congressmen and others because they have hired illegals as well.

There is not a magic tattoo on someones forehead that when exposed to a special light says they are legal. They took the information and submitted it like they are supposed to, they run a business why is immigration status checking their job... don't we pay taxes for that sort of thing?

And while your happy L&M is gone why is Hormell or any of the other major plants where they have conducted these sweeps out of business? They often go out of their way to hire illegals so they can pay less, but they are still in business.

If your all for the law make sure you apply it evenly.

kthks
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PaulT (profile), 1 Nov 2011 @ 3:53pm

Re:
So, no actual proof or refutation of the claims in the article? Just name calling and bare assertions?

"You're entitled to your own opinion Masnick, but not your own facts."

It's amazing how many of the "attacks" you make are equally applicable to yourself...
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Loki, 1 Nov 2011 @ 3:59pm

Re:
And while you are filing your counterclaim, ICE has locked you out of your website. VISA, Mastercard and Paypal have locked you out of processing payments. Meanwhile you have to incur added legal fees (you will unlikely be able to recoup even if you do get your business back). Maybe the large corps can survive this sort of assault, but for most small businesses these days, it is effectively a death sentence.
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Kill em all, 1 Nov 2011 @ 4:02pm

Kill em all
Kill em all and let the MPAA sort em out. What a freaking joke and police+MPAA = Nazi state.
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Travis, 1 Nov 2011 @ 4:33pm

A mistake was obviously made here...
...Though I don't know if it was the judge's or L&M's lawyer's. The police's statements were made based off of knowingly false accusations made by the MPAA through their investigator. If this was not argued in court, then L&M needs to report their lawyers. If it was argued, then the judge made a mistake. Either way, the police department is still culpable because L&M provided evidence that they were legit and were ignored.
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Anonymous Coward, 1 Nov 2011 @ 5:32pm

Re:
>Whats the point of working in the movie/tv industry if your employer sends the cops after you?

Forgive me if this is off-topic, but it amuses me to parallel this to a school scenario:

"Why didn't you do your homework, Perkins?"
"'Cause you might send the cops after me, Sir..."
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That Anonymous Coward (profile), 1 Nov 2011 @ 5:46pm

Re:
because it was an investigator who most likely is a contractor to MPAA but not a direct employee.

The investigator and the police need to be targeted in this suit. The Police have made false statements about the piracy they claimed was happening. They handed evidence in the case to a 3rd party who is NOT part of their department, so the only possible outcome there would have been mistrial because they bungled handling the evidence.

While the MPAA are idiots and several other choice words, they did not directly act in this situation. With any luck the lawsuit against the police would have a twofold benefit, it would clear their name (but I am guessing they are just screwed now) and it would make the police very shy of dealing with the MPAA or its investigators in the future as they are not professionals or trustworthy.
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Mike Masnick (profile), 1 Nov 2011 @ 6:08pm

Re:
More lies FUDboy? You know full well that a site that receives an infringement claim can file a counterclaim and that automatically bounces the matter to a federal judge.

They can file a counterclaim, but the ad providers and payment processors have EVERY incentive to just cut the site off, and have NO requirement to EVER turn them back on.

We've already seen this. Under the DMCA, recipients of takedowns don't HAVE to takedown the content, but they almost universally do, just to avoid any liability. Guess what happens under SOPA? They'll cut off these sites. Especially if they receive more than one notification? Even if legit, why take on that liability?

The problem with you folks who wrote the bill is you have no real world experience. You have no clue how this industry works, and you seek to break it. You seek to turn the internet into TV, because that's all you know.
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BeeAitch (profile), 1 Nov 2011 @ 7:30pm

Re: RE "you're a witch"
Do you mean hold them underwater (deprive them of air (money))? If they do not drown then they're a witch (infringer)? If they do drown (die) then they're innocent?

Nope, definitely no similarity here. /sarc
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BeeAitch (profile), 1 Nov 2011 @ 7:34pm

Re:
I refer you to Digitari's comment above, and my reply.

Salem Witch Trials in the modern day.
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btr1701 (profile), 2 Nov 2011 @ 11:06am

Re: Re: Re: Re:
> potentially illegal aliens... so they were
> brown to boil your point down.

Please don't start with that bullshit.

The idea that we have to stop enforcing a law once the majority of its violators are other than white is beyond idiotic.
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btr1701 (profile), 2 Nov 2011 @ 11:24am

Re: Re: Re: Re:
> There is not a magic tattoo on someones
> forehead that when exposed to a special
> light says they are legal

No, but there is a cheap non-magical way for employers to check every new hire's legal status, but our lovely California governor just vetoed a bill that would require its use.

He claimed he did it because he didn't want to 'overburden businesses in California', yet E-Verify pales in comparison to all the *other* regulatory burdens that California puts on businesses in the state. California is the most regulated business environment in the state, but requiring E-Verify was a bridge too far for Jerry Brown?

Who actually buys the crap that this guy is shoveling? He vetoed it as a sop to all the Latino voters, those who vote legally and illegally, that he needs to keep his power base. He basically sent a message that he has no interest in doing anything to stop the relentless flow of illegals into California.

> they run a business why is immigration
> status checking their job

The same reason it's their job to comply with every other local, state, and federal law.

"Those meat-packers run a business. Why is complying with FDA health standards their job?"

Please...

> They often go out of their way to hire illegals
> so they can pay less, but they are still in
> business.

The management of such companies should be in prison.
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Prof Allen, 2 Nov 2011 @ 1:10pm

IBM falsely accused me of Piracy
I'll never forget one time when I was a student at the University of Texas at Arlington (UTA.) I did an on-campus interview with IBM. This was sometime in the late 1990's. The female conducting the interview asked me if I paid for my operating system, and I told them no, that a buddy burned a copy of Slackware 3.4 for me. (It's weird that I still remember the version number, but I can describe the black skirt and top the chick conducting the interview was wearing - this is seared into my memory.) I offered to boot my IBM ThinkPad 500 and demonstrate it, especially some of my hand-written networking drivers...but I was cut off. She started screaming at me that I was a pirate because I didn't pay money for my operating system. I was literally (physically) thrown out. One of my text books was destroyed, but the ThinkPad 500 survived. It was a tough little sucker. I am boycotting IBM to this day. IBM's use of Linux in their web platform is unacceptable, given their previous stance on Linux.

A random note about the laptop...it was a 486SLC2-50, with 4MB of RAM that I upgraded to 12MB, and a 2.5" IDE hard disk...maybe a 70MB, 120MB, or 170MB...I forget. That little thing's screen was dim under fluorescent lights, but it let me hack code for years. It managed battery ejection through software, so it could hang up an a white screen and refuse to let me eject the battery. I'd have to let it run for a day or so until it ran down totally, then recharge it to eject the battery. If I started recharging it too soon, it would still be hung and would not eject the battery.
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Gene Cavanaugh (profile), 2 Nov 2011 @ 4:11pm

"They rang up the MPAA who sent over an "investigator," who falsely declared that the DVDs were unauthorized, leading the police to seize them"

"The comments that were the most problematic to L&M in the newspaper reports were not, in fact, made by the MPAA but by the police. If anyone is responsible, it should be the police who made them."

So, the police made comments BASED on what the MPAA told them, but the MPAA is not responsible?

Try to make a little sense - this doesn't.
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jjray, 7 Nov 2011 @ 6:53am

this stinks
>>allowing the private investigation firm to hold them
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harold, 6 Jul 2012 @ 6:50am

Personally i don't think L & M issue pirated copies, however, theres must be a cause for concern
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