Christopher P. Fiore , Fiore & Barber LLC , Harleysville, PA, Michael Keith Lipscomb , Lipscomb Eisenberg & Baker PL, Miami, FL, for Plaintiff .
Leonard J. French , The Law Offices of Leonard J. French , Bethlehem, PA, Ronald A. Smith , Ronald A. Smith and Associates , A. Jordan Rushie , Mulvihill & Rushie LLC , Philadelphia, PA, for Defendants .
MEMORANDUM—REPORT ON BELLWETHER TRIAL
BAYLSON , District Judge .
After determining a “Bellwether” Trial would be the best way to achieve a resolution of numerous copyright infringement complaints filed in this district by Plaintiff Malibu Media, LLC ( “ Malibu ” ) , expedited pretrial proceedings resulted in a non-jury trial on June 10, 2013 . Malibu, a producer of adult cinemas, alleged Defendants had downloaded its movies using a type of software known as “BitTorrent” without paying a licensing fee, and were therefore liable for damages for copyright infringement.
The proceedings resulted in admissions of liability by the three Defendants remaining in the case , and either settlements or determination of damages by the Court . The Court will also award attorneys' fees and costs against one of the three Defendants .
Because of significant interest in these cases , I have prepared this report of the proceedings, which may be of value to other judges in this and other districts who have numerous cases involving similar allegations. In doing so, I emphasize that Malibu is not what has been referred to in the media and legal publications, and in the internet blogosphere, as a “copyright troll” —i.e., a non-producer who merely has acquired the right to bring lawsuits against alleged infringers. 1 Rather, Malibu is an actual producer of adult films and owns valid copyrights, registered with the United States Copyright Office , in its works. 2
This report will be, purposely, factual and “plain vanilla” in its tone. My purpose is not to criticize any party or counsel , but rather to report on the pleadings, discovery, and case management aspects, and what management devices I employed to bring the matter to a relatively speedy and fair conclusion.
Initial FilingsThree complaints originally filed by Malibu in April 2012 , naming a total of 52 defendants denominated as “John Does,” were assigned to my calendar. Malibu promptly filed a Motion for Leave to serve third party subpoenas on internet service providers ( “ISPs” ) , 3 in order to determine the actual names and addresses of the John Doe Defendants . ( ECF 4 ) . In support of its motion, Malibu asserted that it had valid internet protocol ( “IP” ) address for each infringing party . Malibu documented an extensive and expensive investigation, as a result of which it was able to obtain internet addresses for the individuals who it asserted had illegally copied its movies. Malibu alleged this information was sufficient to support its selection of the John Doe Defendants . A hearing was held on May 14, 2012 . ( ECF 7 ) . The Court 's resolution, in an Order dated May 18, 2012 , was to grant the motion to serve the subpoenas in part. ( ECF 8 ) . 4 Specifically, Plaintiffs were afforded the opportunity to serve the ISPs with Rule 45 subpoenas, commanding each ISP to provide Plaintiff with the true names and addresses of the Doe Defendants to whom the IP addresses were assigned. Plaintiffs also were directed to attach a Court –Directed Notice to the Rule 45 subpoenas and to instruct the ISPs to distribute copies of the Notice to each Doe Defendant , informing them that they shall have 21 days to file motions to quash or vacate the subpoenas. ( Id. ) .
Several of the six John Doe Defendants identified as subscribers by the ISPs filed Motions to Dismiss the Complaint and/or to Quash the Subpoenas , asserting that there wasn't sufficient evidence to require the ISPs to reveal their identities. ( ECF 9 ) . One motion was later withdrawn, leaving five pending before the Court . Those five motions essentially sought three types of relief:
1. Quashing the subpoenas to the ISPs on the grounds that Malibu did not have sufficient facts on which to have third party subpoenas issued.
2. That the joinder of multiple John Doe Defendants in one Complaint was not proper and that the defendants who had been served should be severed from other defendants .
3. That the allegations of the Complaint were not only untrue, but very embarrassing (because they dealt with downloading pornographic movies) , and therefore the John Doe Defendants should be allowed to proceed anonymously.
On August 16, 2012 , Chief Judge Joyner, realizing that a large number of these cases had been filed in this District and were assigned to different judges, issued an Order directing that all of the Malibu cases filed in this District were referred to me “for monitoring and coordination of the following issues: severance of defendants , the statute of limitations, discovery, scheduling of arbitration hearings, civil negotiations and trial dates.” ( ECF 12 ) . However , Chief Judge Joyner also ordered that any cases subject to his August 16 Order remain on the calendar of the judge to whom it was assigned pending further order. A number of my colleagues have consulted me from time to time, and I advised them that I had scheduled a Bellwether trial to take place after discovery and expert opinions. I recommended that they stay their cases , pending the trial.
A hearing was held on September 18, 2012 to review the status of the case and determine what issues were important for pretrial discovery, so that the case could proceed to a resolution. In a Memorandum dated October 3, 2012 , I reviewed the proceedings up to that point and determined that the best, if not the only, way to advance the litigation would be to designate the five individuals with outstanding Motions to Quash the Subpoenas or Dismiss the Complaint as Defendants as to whom a Bellwether trial would proceed. 5 ( ECF 21 & 22 ) . I concluded that Malibu had expended considerable effort and expense to determine the IP addresses of the infringing parties , and the technology employed by its consultants—both of whom were located in Germany and who testified at the trial of June 10, 2013 —was valid. ( Memorandum , at 6–14 ) (ECF 21) . I ordered that the ISPs comply with the Rule 45 subpoenas and tender the identifying information of the five Doe Defendants with outstanding motions before the Court to Plaintiff . In turn, I ordered Plaintiff to effectuate service of the Complaints on those five Defendants within 10 days. ( ECF 22 ) . I stayed the litigation as to the remaining defendants in the three cases . ( Id. ) . 6
Service was eventually effectuated on the five Doe Defendants . ( See, e.g. , ECF 30 in Civil Action 12–2078) (relating that service of process was made on the individual named as John Doe 16 on October 20, 2012 ) .
On November 2, 2012 , Malibu filed an Amended Complaint. ( ECF 34 ) .
One of the owners of Malibu, Colette Field , filed an affidavit on December 5, 2012 asserting personal knowledge that Malibu was the copyright owner of the movies as to which the illegal downloading/copyright infringement had taken place. ( ECF 43 ) . This affidavit, in combination with the affidavit that had been filed documenting the technology employed by Malibu to determine the internet addresses, supplied the Court with a solid factual basis upon which to conclude there was “plausibility” to Malibu's infringement claims and to deny the Motions to Dismiss that had been filed by the Doe Defendants . ( ECF 55 ) . I also rejected Defendants ' arguments that all members of a BitTorrent “swarm” were indispensable parties under Rule 19 . ( Id. ) .
After counsel met to discuss discovery, and filed a Rule 26 (f) Report ( ECF 37 ) , a Rule 16 conference was held on November 28, 2012 , which resulted in a detailed Scheduling Order leading up to the Bellwether trial. ( ECF 40 ) . On December 28, 2012 , the Court issued an order compelling discovery against Defendants because they had not answered Malibu's discovery requests . ( ECF 54 ) . After a number of depositions had taken place, the Court set deadlines for Rule 37 motions to prevent delay in resolving discovery disputes. There were a few conferences with counsel to resolve such discovery disputes. Most of these were held by telephone and a record was made, through the Court 's digital audio recording system.
When Defendants answered the Amended Complaint, they pled affirmative defenses and counterclaims that principally alleged abuse of process by Plaintiff in making untrue and unjustified allegations. ( See, e.g. , ECF 34, 58, 59 ) . On March 6, 2013 , I issued an extensive Order and Memorandum denying Malibu's Motions to Strike the Affirmative Defenses and granting its Motions to Dismiss the Counterclaims, but without prejudice and with leave to amend. ( ECF 103 and 117 ) . By this point, one of the five Defendants ( John Doe 6) had been voluntarily dismissed ( ECF 82 ) , and by the time of trial, an additional Defendant ( John Doe 14) was as well ( ECF 113 ) . This left three John Doe Defendants for trial— John Doe 1, John Doe 13, and John Doe 16—only one of whom, John Doe 16, filed an Amended Counterclaim. ( ECF 109 ) .
Joinder and SeveranceAs noted above, when the three cases assigned to me were filed, there were multiple defendants in each case. Plaintiff , when faced with a motion to sever , asserted that the defendants were properly joined in a single complaint as members of a “swarm,” a term of art relating to the functioning of the BitTorrent software. According to testimony at trial, the BitTorrent software works automatically, joining together multiple internet subscribers (the “swarm” ) who are seeking to download the same movie at the same time. These individuals do not know each other. The software sends different “bits” of the same movie to different users and when the overall download .