Settlement Reached In Class Action Lawsuit Against Rightscorp For Robocalls

from the well,-it's-something dept

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.

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

Rightscorp Wins Anti-SLAPP Claim Against Guy Who Sued After Being Bullied With Robocalls

from the well-there-goes-that-idea dept

Back in November, we noted a class action lawsuit filed against Righstcorp in California, arguing that its process of shaking people down with robocalls violated various laws. In the first amended complaint, the plaintiff, John Blaha, focused on two issues: (1) that the robocalls violated the Telephone Consumer Protection Act and (2) that the use of DMCA 512(h) subpoenas were an "abuse of process." As we discussed, every few years, copyright trolls think they've rediscovered 512(h) and think they've found a magic key that lets them send subpoenas to ISPs, identifying people to shake down, without first filing a lawsuit. Of course, over a decade ago, a court soundly rejected that argument in a case the RIAA filed against Verizon, pointing out that if the RIAA wanted to find out names from Verizon it had to file a lawsuit first.

In response to this, Rightscorp (and Warner Bros., a Rightscorp client) tried to get the abuse of process claims tossed, by arguing they violated the First Amendment, and were subject to California's anti-SLAPP law. Now, as you know, I'm a huge supporter of anti-SLAPP laws, and California's is pretty good. But it seemed like a huge stretch to argue that the class action lawsuit was an attempt to stifle Rightscorp's free speech rights. Unfortunately, the court disagrees, and says that the abuse of process claim should get tossed thanks to the anti-SLAPP law.

The court points out that the subpoena is clearly protected under the anti-SLAPP statute, and thus, there's the question of whether the lawsuit is likely to prevail. It notes that, for an abuse of process case, the plaintiff needs to show an "ulterior motive" and that the actions were committed willfully "in the use of the process not proper in the regular conduct of the proceedings." Unfortunately, the court doesn't see either as being the case. It notes no "ulterior motive" by Rightscorp:

The first fatal deficiency in Plaintiff’s abuse of process claim is that Plaintiff raises no ulterior motive in Defendants’ use of the subpoenas. Whether or not § 512(h) subpoenas should validly be issued under the circumstances in which Defendants sought them, there is no allegation and no evidence that Defendants sought to do anything other than what their subpoena requests indicated – identify potential copyright infringers for the purpose of pursuing Defendants’ rights under the Copyright Act. Plaintiff’s extensive discussion of the elements of abuse of process... can be summarized as a view that seeking and obtaining some form of court order that should not have been issued is sufficient to satisfy both elements of the abuse of process tort. But, despite extensive rhetoric, Plaintiff provides no authority for this view and the most relevant authority is against it.... Again, the only “ulterior motive” identified by Plaintiffs is the motive disclosed on the face of the subpoena requests.... A disclosed motive is, by definition, not ulterior.

The issue here is basically this: those of us who follow copyright trolling know perfectly well that these subpoenas have an "ulterior motive," which is to shake down a large number of people for money. The problem, though, is that the court sees the specific aspects of the subpoena -- identifying a potential infringer -- as well within the proper bounds of going after them for copyright infringement. Whether or not the motive is an "ulterior" one seems to depend on if you view the overall process to be "filing a lawsuit against an alleged infringer" (as the court does) or "shaking down as many people as possible, with no intention of ever really going to court" (as people who follow copyright trolls know is the actual situation). And, while it's true that the first step in both processes is basically the same, this case is arguing that there's an ulterior motive in the eventual plan, but the court is basically saying that doesn't really matter at this point.

The court also claims that Rightscorp's subpoenas are protected by litigation privilege -- which is another concept that (like anti-SLAPP laws) tends to be a good thing for free speech -- which says that no tort can arise from statements made during litigation. But here's the problem with that: this isn't really litigation. Rightscorp isn't suing people. It's just using the court system to get contact info and then launching the robocalls. Still, the court argues that since the 512(h) subpoenas are communications via a court, litigation privilege covers it. While the complaint points to the later shakedown letters, the court (rightly) notes that those letters are not part of the 512(h) subpoena, and thus are not part of the "abuse of process" claim.

The entirety of Plaintiff’s claim is based on communications by Defendants to various courts in order to acquire subpoenas. Plaintiff’s opposition misses the point by focusing on the later communications made by Defendants to the now-identified potential infringers. But these communications are not the basis of the abuse of process claim; the complaint is clear that the abuse of process is alleged to have occurred when Defendants obtained (and served)4 the subpoenas knowing that the subpoenas were improper under the law.

The case is far from over, and I still have some problems with the way the court ruled here, but if I have to be wrong, at least I'm wrong in a way that says California's anti-SLAPP law is strong.

Filed Under: 512(h), anti-slapp, california, dmca, john blaha, subpoena
Companies: rightscorp