Settlement Reached In Class Action Lawsuit Against Rightscorp For Robocalls

from the well,-it's-something dept

Wed, Jan 13th 2016 11:35am — Mike Masnick

In late 2014, we wrote about a class action lawsuit filed against copyright trolling operation Rightscorp, which argued two things: (1) that the company's robocalling people's mobile phones accusing them of copyright infringement violated the Telephone Consumer Protection Act (TCPA), because you're not allowed to robocall mobile numbers, and that (2) the use of questionable DMCA 512(h) subpoenas to discover accounts associated with IP addresses was "abuse of process." Rightscorp and co-defendant Warner Bros. got that second claim tossed for violating California's anti-SLAPP law.

However, the robocalling/TCPA claim remained, and after bringing in a third party to help the two sides negotiate, it appears that they've reached a settlement agreement that has been presented to the judge for approval. According to the proposed settlement, the defendants will have to cough up $450,000, and members of the class (i.e., those who received Rightscorp robocalls to their mobile phones) can claim up to $100 each from the pool of money. Perhaps more interesting is that, so long as those class members sign an "Affidavit of Non-Infringement," then Righscorp promises not to pursue them for any copyright infringement claims. Apparently, this actually applies to members of the class who don't even make a claim for any money.

Defendants will contribute $450,000 to the Settlement Fund. Each Qualified Class member who timely submits a claim may receive a payment of up to $100.00 subject to the following condition. The Settlement Agreement provides that Defendants will release any and all alleged claims or counterclaims for copyright infringement against Settlement Class Members who timely execute an Affidavit of Non-Infringement. The value of the total infringement releases is estimated to fall between $94.8 million and $19 billion in total statutory damages.

That last number is a bunch of hogwash. It's just using the ridiculous statutory damages numbers to put a value on the promises to drop any copyright claims, but since Rightscorp never actually sues anyone, the statutory damages are meaningless. The idea behind it, though, is to show why the amount is lower than what the TCPA prescribes for violations of robocalling rules. Either way, this at least gets a bunch of folks out of Rightscorp's crosshairs. Rightscorp also promises to prevent future such robocalling, which may somewhat limit its ability to keep up its trolling operation.

It's not clear who exactly is paying the $450,000. Even though Righscorp is the real culprit, the much bigger pocketed Warner Bros. Entertainment and BMG are both defendants as well, so it wouldn't surprise me to discover that the actual money comes from them. However, maybe it will make them think twice about associating with trolling lowlifes like Rightscorp. This isn't final yet, as the court still needs to approve it -- but courts generally approve these kinds of settlements just to get the cases off the docket. So unless someone raises serious issues with it, it's likely to come to pass.

Rightssettle (PDF)Rightssettle (Text)

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Filed Under: class action, copyright trolling, john blaha, robocalls, settlement, tcpa
Companies: bmg, righstcorp, warner bros.

12 Comments

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Anonymous Anonymous Coward, 13 Jan 2016 @ 11:52am

PR firms prefer spin
My patented Spinner Predictor™ says the spin from this will be that M people got paid from the fund and N people signed the affidavit therefore M x N = P-million people (yes that is times not plus, Hollywood only accounts the Hollywood way) admitted to infringing and got away scott free. See how much money we lost because those P-million people didn't answer our robocalls and admit to our accusations without proof?
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That Anonymous Coward (profile), 13 Jan 2016 @ 12:12pm

If you were a stock holder and your board just walked away from 19 Billion wouldn't you be staging a revolt against them?

If you had such faith in your claims, why walk away from $19 Billion dollars?

Or, like just about anything in copyright trolling cases, you trot out a giant number to make your terms seem more palatable.

The real pity is the law spells out penalties for doing what they did, and they get to claim they did nothing wrong (despite the clear evidence they did) and pay less than the penalty the law shows.

For a company that is losing $3 or is it $4 for each dollar they take in, one can only hope that this settlement puts the final nail in the crappy penny stock.
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mcinsand, 13 Jan 2016 @ 12:17pm

good call
>>If you had such faith in your claims, why walk away from
>>$19 Billion dollars?

If the board is either shafting the stockholders or making false statements publicly about how they handle the company's assets. This should be a sound basis for either a serious stockholders meeting or an SEC investigation.
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Anonymous Anonymous Coward, 13 Jan 2016 @ 12:23pm

Re: good call
You mean the way the SEC investigates Wall Street fraud and the banks that steal from their customers? Yes, that is what we expect.
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David, 13 Jan 2016 @ 12:33pm

Cute trick, something similar tried before
Some Australian company submitted refund check with some name like "Anal Gay Perversions" or something like it - many of the checks were uncashed...

The Affidavit is a similar ploy here, I feel.
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Anonymous Coward, 13 Jan 2016 @ 12:34pm

Should be rejected by the class members
And re-submitted as a bunch of people under a new class.
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Mike Masnick (profile), 13 Jan 2016 @ 1:27pm

Re: Cute trick, something similar tried before
Some Australian company submitted refund check with some name like "Anal Gay Perversions" or something like it - many of the checks were uncashed...

That's from a movie. "Lock, Stock and Two Smoking Barrels"

https://www.youtube.com/watch?v=a06E2mfcuz8

Not sure the same trick would work here...
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Roger Strong (profile), 13 Jan 2016 @ 1:48pm

Re: Re: Cute trick, something similar tried before
I think the movie got it from the internet meme. It was already floating around the internet by March 1998, and the movie was released in August 1998.
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Anonymous Coward, 13 Jan 2016 @ 2:18pm

Lawyer fees
I count $785,000 in total payments here. $450,000 to the settlement fund (from which the costs of notifying class members will also be paid), $5,000 to the primary plaintiff, and $330,000 to the attorneys. That's 42% of the award going to the lawyers. Seems like a lot.

But wait. There are 2059 estimated class members, and they can only get $100 each. So the payments to class members are really only $205,900 if that estimate is correct ($210,900 if you add the primary plaintiff), and they estimate costs of only $25,000. If you use these numbers and assume the balance won't actually be paid to anyone, 58% of the award is going to the lawyers, and only about 37% going to the members.

Of course, the lawyers argue that the infringement releases are worth "between $94.8 million and $19 billion", making their fees seem totally reasonable. But the payments and releases are only available to those who sign the affidavit of noninfringment. How much is it worth to have someone agree to not sue you, if you haven't done anything wrong? Wouldn't that at least depend on the details of each person's case?
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That Anonymous Coward (profile), 13 Jan 2016 @ 2:41pm

Anyone else very curious what the "Affidavit of Non-Infringement" actually says?

IIRC (I've been wrong once) RightsCorp enjoyed the low ball settlement offer only to discover after you clicked through a buncha stuff admitting your a pirate that they were now seeking the $30 per track on the album.
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Anonymous Coward, 13 Jan 2016 @ 5:02pm

Re: Cute trick, something similar tried before
Sounds like something Comcast would do.
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Robert Beckman (profile), 13 Jan 2016 @ 6:50pm

Re: Lawyer fees
These fees seem reasonable to me.

Lawyers normally take 1/3 on contingency, and an increase if I goes to trial is common.

For a class action, where the entire point is that it's not worth it for individual members to sue, a disproportionately higher percentage is reasonable, as it makes it more likely that the public benefit of the lawsuit happens at all.
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