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Af Holdings LLC v. Does 1 -- 1

August 6, 2012

AF HOLDINGS LLC, PLAINTIFF,
v.
DOES 1 -- 1,058, DEFENDANTS.



The opinion of the court was delivered by: Judge Beryl A. Howell

MEMORANDUM OPINION

As in numerous other cases pending in this and other jurisdictions across the country, this case involves a copyright owner's effort to protect a copyrighted work from unknown individuals, who are allegedly illegally copying and distributing the work on the Internet. Plaintiff AF Holdings LLC ("AF Holdings") alleges that 1,058 unknown individuals used a peer-to-peer file-sharing application, called BitTorrent, on their computers to download and distribute the plaintiff's movie, Popular Demand. See generally Compl., ECF No. 1. In support of the Complaint, the plaintiff listed the Internet Protocol ("IP") addresses assigned to the computers allegedly engaged in the unauthorized copying and distribution of the plaintiff's copyrighted movie. Compl., Ex. A. ("Listed IP Addresses"). Upon authorization from the Court, pursuant to Rule 26(d)(1) of the Federal Rules of Civil Procedure, to seek discovery prior to a conference of the parties otherwise required by Rule 26(f), the plaintiff issued subpoenas to Internet Service Providers ("ISPs") to obtain limited identifying information about the ISPs' customers whose computers were assigned the Listed IP Addresses. Pending before the Court are two motions: the plaintiff's motion to compel ISP Comcast Cable Communications, LLC ("Comcast") to comply with the plaintiff's subpoena, and a motion to quash the plaintiff's subpoenas filed by four other ISPs: Bright House Networks, LLC; Cox Communications, Inc.; SBC Internet Services, Inc., d/b/a AT&T Internet Services; and Verizon Online, LLC (collectively "Movant ISPs"). All of the ISPs argue that the plaintiff's subpoenas should be quashed because the plaintiff's Complaint is procedurally defective. The Court disagrees. Consequently, the plaintiff's motion to compel Comcast to comply with the plaintiff's subpoena is GRANTED, and the Movant ISPs' motion to quash the plaintiff's subpoenas is DENIED. The Movant ISPs further request, in the event the Court requires compliance with the plaintiff's subpoenas, that the Court certify an immediate appeal of the order denying the Movant ISPs' Motion to Quash. This request is GRANTED.

I.BACKGROUND

On January 11, 2012, plaintiff AF Holdings filed a complaint against 1,058 unknown individuals who allegedly used a file-sharing protocol called BitTorrent to infringe illegally the plaintiff's copyright in the motion picture Popular Demand. Compl. ¶¶ 3, 5. These unknown customers are identified only by the IP addresses assigned by the ISPs to their computers. See id. ¶ 11. In order to identify these unknown individuals -- a prerequisite to determining whether to name them as defendants and proceed with a lawsuit against them -- the plaintiff moved for leave to issue subpoenas to ISPs to obtain limited identifying information for the customers associated with the Listed IP Addresses. Mot. for Leave to Take Discovery Prior to Rule 26(f) Conference, ECF No. 4. The Court granted this motion, authorizing the plaintiff to obtain "limited information sufficient to identify only the putative Defendants listed in Exhibit A to the Complaint," which included the "name, current and permanent address, telephone number, e-mail address, and Media Access Control (MAC) Address" associated with each Listed IP Address. Order Granting Pl.'s Mot. Leave to take Expedited Discovery, ECF No. 5at 1. The Court's Order further directed the ISPs to provide their customers with a Court-directed notice prior to releasing the affected customers' personal information to the plaintiff. Id. at 2, App. A. Despite the Court's January 30, 2012 Order authorizing the plaintiff to issue subpoenas to ISPs, Comcast refuses to produce the requested information "[w]ithout a valid court order that recognizes that [the Court] will ultimately have jurisdiction over the unnamed subscribers, [and] whether they may be properly joined."*fn1 Pl.'s Mot. Compel Comcast, ECF No. 7, Ex. B, Comcast Objection Letter dated February 16, 2012, at 3. Comcast's refusal to comply with the subpoena prompted the plaintiff to file a motion to compel, pursuant to Federal Rule of Civil Procedure 45(c)(2)(B)(i), seeking an order directing Comcast to comply with the plaintiff's subpoena for identifying information for the customers using the 400 Listed IP Addresses serviced by Comcast. Pl.'s Mot. Compel Comcast, ECF No. 7.

Subsequently, the Movant ISPs filed a joint motion to quash the subpoenas directed to them pursuant to the January 30, 2012 Order. Movant ISPs' Mot. Quash, ECF No. 8. The Movant ISPs assert that the plaintiff's subpoenas should be quashed, pursuant to Federal Rule of Civil Procedure 45(c)(3)(A)(iv), because they impose an "undue burden" upon them. See Mem. Supp. Movant ISPs' Mot. Quash, ECF No. 8, at 4-5. Specifically, the Movant ISPs argue that the "John Does" associated with the Listed IP Addresses are improperly joined in one lawsuit and that "[p]ersonal jurisdiction and venue do not exist in this district over the vast majority of the targeted Does." Id. at 1-2. Thus, because the plaintiff's "underlying action is procedurally defective or Defendants are not subject to suit here," the Movant ISPs argue that "any burden put upon a third-party to identify Defendants is an undue burden." Id. at 4.

The Movant ISPs recognize that this Court previously denied motions to quash filed by ISPs in other cases involving allegations of illegal infringement of copyrighted works by unknown individuals using a BitTorrent protocol. See Call of the Wild Movie, LLC v. DOES 1-1,062, 770 F. Supp. 2d 332 (D.D.C. 2011) (consolidated opinion denying motions to quash and modify subpoenas that were issued in Call of the Wild Movie, LLC v. Does 1-1,062, No. 10-cv-455; Maverick Entertainment Group, Inc. v. Does 1-4,350, No. 10-cv-569; and Donkeyball Movie, LLC v. Does 1-171, No. 10-cv-1520). In those cases, this Court explained that considerations of personal jurisdiction and joinder are premature when discovery is sought before the plaintiff has named a defendant and the discovery is targeted to identify unknown individuals associated with the IP addresses for computers, which were used to engage in allegedly illegal infringing activity. In the event of a consistent ruling in the instant case, the Movant ISPs further request "an order certifying the significant and recurring issues presented here for appeal pursuant to 28 U.S.C. § 1292(b), so that litigants, the ISPs, and the courts may move closer to uniform treatment and disposition" of similar copyright infringement cases. Mem. Supp. Movant ISPs' Mot. Quash, ECF No. 8, at 2.

Following the filing of the plaintiff's motion to compel and the Movant ISPs' motion to quash, the Electronic Frontier Foundation, American Civil Liberties Union Foundation, and American Civil Liberties Union of the Nation's Capital were permitted to file a brief as amici curiae in support of the Movant ISPs' motion to quash. Minute Order dated Mar. 15, 2012; Mot. Leave to File Brief as Amici Curiae, ECF No. 17. Like the Movant ISPs and Comcast, amici argue that the plaintiff's instant lawsuit is procedurally defective because the Court most likely lacks personal jurisdiction over a majority of the individuals associated with the Listed IP Addresses, and because the "John Does" associated with the Listed IP Addresses are improperly joined in one action. See generally Brief of Amici Curiae, ECF No. 24. These defects, according to amici, require the Court to quash the plaintiff's subpoenas. As an alternative, amici join in the Movant ISPs' request that the Court "certify an immediate appeal." Id. at 2.

Upon consideration of the arguments presented at the motions hearing held on April 27, 2012, the legal memoranda submitted in support and in opposition to the pending motions, the associated exhibits and declarations, as well as the applicable law, the Court concludes that the ISPs' objections to the plaintiff's subpoenas have no merit. As explained in previous decisions issued by this Court, consideration of personal jurisdiction and joinder of unknown individuals, who are not yet named defendants in this case, is premature and, indeed, inappropriate. In circumstances where the plaintiff knows only the IP addresses associated with computers being used allegedly to infringe its copyright, the plaintiff is entitled to a period of discovery to obtain information to identify the ISPs' customers who may be using those computers in order to determine whether to name those individuals as defendants. The plaintiff's subpoenas do not impose an undue burden upon the ISPs, and, consequently, the ISPs must produce the information requested by the plaintiff. The plaintiff's motion to compel Comcast to comply with the plaintiff's subpoena is therefore GRANTED and the Movant ISPs' motion to quash is DENIED.

That said, the Court recognizes that other Judges on this Court have reached different conclusions with respect to the legal questions posed by the ISPs, and that the resolution of these legal questions materially affects resolution of this case. Accordingly, pursuant to 28 U.S.C. § 1292(b), the Court certifies the Order accompanying this Memorandum Opinion for immediate interlocutory appeal.

II.STANDARD OF REVIEW

The Federal Rules of Civil Procedure provide a broad scope for discovery in civil actions, permitting a party to obtain discovery "regarding any non-privileged matter that is relevant to any party's claim or defense," which matter expressly includes "the identity and location of persons who know of any discoverable matter." FED. R. CIV. P. 26(b)(1). Further, for good cause, the court is authorized to order discovery of any matter relevant to the subject matter of the action that "appears reasonably calculated to lead to the discovery of admissible evidence." Id. The scope of discovery under Rule 26 permits a party to obtain "discoverable matter" relevant to its claims, irrespective of the location of such evidence. Id. Indeed, issues regarding the location and possession of the sought-after "discoverable matter" is only pertinent to ascertain the appropriate mechanism a party must use to obtain it. See FED. R. CIV. P. 34 (a)-(b) (delineating procedure to produce or inspect, inter alia, documentary or electronically stored information, or tangible items from a party); FED. R. CIV. P. 34(c) (stating that a non-party may be compelled to produce documents and tangible things pursuant to Rule 45); FED. R. CIV. P. 45(a)(2) (delineating the appropriate court from which to obtain a subpoena); FED. R. CIV. P. 45 (b)(2)

(delineating the procedure by which to serve a subpoena outside the district in which the underlying lawsuit is located). The Court must, however, limit discovery if, inter alia, "the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues." FED. R. CIV. P. 26(b)(2)(C)(iii).

If the sought-after "discoverable matter" is in the custody of a non-party, the party seeking discovery may obtain a subpoena for the evidence pursuant to Federal Rule of Civil Procedure 45. FED. R. CIV. P. 34(c). The same broad scope of discovery set out in Rule 26 applies to the discovery that may be sought pursuant to Rule 45. See Watts v. S.E.C., 482 F.3d 501, 507 (D.C. Cir. 2007); Advisory Committee Note on 1946 Amendments to FED. R. CIV. P. 45 ("The added last sentence of amended [Rule 45](d)(1) properly gives the subpoena for documents or tangible things the same scope as provided in Rule 26(b)."). The Court must quash a subpoena issued to a non-party, however, if the subpoena subjects the non-party to an undue burden or expense. FED. R. CIV. P. 45(c). The individual or entity seeking relief from subpoena compliance bears the burden of demonstrating that a subpoena should be modified or quashed. See Linder v. Dep't of Def., 133 F.3d 17, 24 (D.C. Cir. 1998); In re Micron Tech., Inc. Sec. Litig., 264 F.R.D. 7, 9 (D.D.C. 2010). Limiting discovery and quashing subpoenas, however, "goes against courts' general preference for a broad scope of discovery." N. Carolina Right to Life, Inc. v. Leake, 231 F.R.D. 49, 51 (D.D.C. 2005) (citations omitted).

When evaluating whether the burden of subpoena compliance is "undue," the court balances the burden on the recipient of the subpoena, the relevance of the information sought to the claims or defenses at issue in the lawsuit, the scope or breadth of the discovery request, and the party's need for the information. See id.; Linder, 133 F.3d at 24 ("Whether a burdensome subpoena is reasonable must be determined according to the facts of the case, such as the party's need for the documents and the nature and importance of the litigation.") (citation and internal quotation marks omitted). The "undue burden" test also requires the court to be "generally sensitive to the costs imposed on third-parties." In re Micron Tech., 264 F.R.D. at 9 (citation and internal quotation marks omitted).

III.DISCUSSION

The plaintiff's motion to compel Comcast to comply with the plaintiff's subpoena and the Movant ISPs' motion to quash the plaintiff's subpoenas raise identical legal issues. Both Comcast and the Movant ISPs, in addition to amici, urge the Court to revisit its previous rulings that considerations of personal jurisdiction and joinder do not operate to block compliance with subpoenas by copyright owners seeking limited identifying information for unknown individuals associated with IP addresses for computers allegedly being used for infringing activity. As explained below, the Court reaffirms its previous decision that the legal issues of personal jurisdiction and joinder of unknown persons who may be, but are not yet, named as defendants, are not ripe for consideration. The ISPs' reliance on these possible defenses as a shield to forestall the plaintiff from obtaining discovery about the customers using the Listed IP Addresses serviced by the ISPs is unavailing. If any of these unknown individuals are named as defendants, they may respond by asserting any of the defenses available pursuant to Federal Rule of Civil Procedure 12(b). At this procedural juncture, however, these defenses are purely speculative. The ISPs' customers, who are unknown to the plaintiff and not named as defendants in this action, have no obligation to appear, respond, or defend themselves against any of the plaintiff's allegations. The Court also concludes that any defense of improper venue is also premature for consideration and does not excuse subpoena compliance.

Prior to discussing the issues of venue and personal jurisdiction, the Court briefly reviews two preliminary matters: the context in which the ISPs make their argument that "any burden" placed upon them to identify their customers, who are allegedly infringing the plaintiff's copyright, is undue; and the plaintiff's claim that the ISPs lack standing to contest subpoena compliance on the grounds asserted.

A. STATUTORY BACKGROUND

Nearly twenty years prior to the instant lawsuit, in 1993, President Clinton established the Information Infrastructure Task Force ("IITF") in response to the rise and growing prominence of the Internet. In an effort to better understand the Internet's effect on the economy and existing legal structures, the Task Force formed a working group chaired by the Assistant Secretary of Commerce and Commissioner of Patents and Trademarks to examine the Internet's implications for intellectual property rights and recommend appropriate changes to U.S. intellectual property law and policy. See Bruce A. Lehman, THE REPORT OF THE WORKING GROUP ON INTELLECTUAL

PROPERTY RIGHTS, INTELLECTUAL PROPERTY AND THE NATIONAL INFORMATION INFRASTRUCTURE ("White Paper") 2 (Sept. 1995). Even at that time, when the Internet was considered an emerging technology, the liability of ISPs for infringement occurring on the Internet arose as a critical issue. The potential exposure under then-existing copyright law of ISPs for infringing activity by their customers was cited as potentially chilling the robust growth of the Internet. See id. at 115-16. The working group established by the IITF counseled against limiting the liability of ISPs, arguing that these service providers should not be encouraged to remain ignorant of the use of their services for illegal infringing activity by their customers. See id. at 122. Indeed, in a September 1995 White Paper, the working group asserted that it would be "at best -- premature to reduce the liability of any type of [such] service providers," cautioning that "[i]t would be unfair -- and set a dangerous precedent -- to allow one class or distributors to self-determine their liability by refusing to take responsibility. This would encourage intentional and willful ignorance." Id.

Three years following issuance of the IITF working group's White Paper, in 1998 Congress enacted the Digital Millennium Copyright Act ("DMCA"), which was intended to foster the development of electronic commerce and communication and bring U.S. copyright law into the digital age. See S. REP. NO. 105-190, at 1-9 (1998); 144 CONG. REC. S12, 376 (Oct. 12, 1998). The DMCA reflected a carefully balanced compromise between those who believed that ISPs should be exposed to potential liability for infringement occurring through use of their services, and those who believed such liability would stifle the growth of the Internet.*fn2 The DMCA resolved this legal and policy dispute by limiting the liability of ISPs for infringing activity occurring over their networks, while providing mechanisms for copyright owners to protect their copyrighted works with assistance from ISPs when specific evidence of infringing activity was identified. See Cong. Rec. S11, 890 (Oct. 8, 1998) (DMCA co-sponsor Senator Patrick Leahy stating that Title II of the DMCA "is intended to preserve incentives for online service providers and copyright owners to cooperate to detect and address copyright infringements that occur in the digital networked environment."); H.R. Rep. No. 105-796, Comm. on Conf., 72 (1998); see also ALS Scan, Inc. v. RemarQ Cmtys., Inc., 239 F.3d 619, 625 (4th Cir. 2001) ("The DMCA was enacted both to preserve copyright enforcement on the Internet and to provide immunity to service providers from copyright infringement liability for 'passive,' 'automatic' actions in which a service provider's system engages through a technological process initiated by another without the knowledge of the service provider.").

Title II of the DMCA, captioned the "Online Copyright Infringement Liability Limitation Act," created "safe harbors" to protect qualifying ISPs from monetary damages for direct, vicarious, and contributory liability associated with the infringing activity of their customers. These liability limitations were counter-balanced in the DMCA by, inter alia, a provision authorizing a copyright owner to obtain subpoenas from federal courts directing ISPs to disclose the identity of their customers allegedly engaging in infringing activity. Specifically, section 512(h) of the DMCA provided that, upon meeting certain conditions,*fn3 "[a] copyright owner or a person authorized to act on the owner's behalf may request the clerk of any United States district court to issue a subpoena to a service provider for identification of an alleged infringer in accordance with this subsection." 17 U.S.C. § 512(h)(1). The ISP was required, upon receipt of a DMCA subpoena, to disclose "expeditiously . . . the information required by the subpoena, notwithstanding any other provision of law and regardless of whether the service provider responds to the notification." Id. § 512(h)(5).

This DMCA subpoena provision set forth in section 512(h) was an important "self-help" tool for copyright owners to obtain from the ISPs limited information about the ISPs' customers about whom the copyright owner had a good-faith belief predicated on specific information were using the ISPs' services to engage in infringing activity. As the text of the statute made clear, a copyright owner could obtain subpoenas from the clerk of any district court, irrespective of the potential location of the alleged infringers, and irrespective of the venue of the copyright owner's possible lawsuit against those persons illegally distributing its protected work. The statute provided guidance that "unless otherwise provided, the court should look to the provisions of the Federal Rules of Civil Procedure governing the issuance, service, and enforcement of a subpoena duces tecum." Id. § 512(h)(6).

The DMCA subpoena provision subsequently came under judicial scrutiny. In Recording Industry Association of America, Inc. v. Verizon Internet Services, Inc., 351 F.3d 1229 (D.C. Cir. 2003), and In re Charter Communications, Inc., Subpoena Enforcement Matter, 393 F.3d 771 (8th Cir. 2005), the D.C. Circuit and the Eighth Circuit concluded that section 512(h) "does not allow a copyright owner to request a subpoena for an ISP which merely acts as a conduit for data transferred between two internet users." In re Charter, 393 F.3d at 776; see also Verizon, 351 F.3d at 1231. Instead, the Circuit Courts construed the statute to permit use of the subpoena authority only when "an ISP [is] engaged in storing on its servers material that is infringing or the subject of infringing activity." Verizon, 351 F.3d at 1233. According to the D.C. Circuit's and Eighth Circuit's interpretations of section 512(h), copyright holders attempting to identify persons infringing their copyrights using peer-to-peer file sharing programs -- such as BitTorrent in the instant case -- could not utilize the subpoena provision created in the DMCA to obtain identifying information from ISPs. See Verizon, 351 F.3d 1229 (vacating district court's order enforcing subpoenas issued to ISP for the names of two customers allegedly using a peer-to-peer file-sharing program to illegally copy and distribute copyrighted material); In re Charter, 393 F.3d 771 (vacating district court's order denying motion to quash subpoena issued to ISP for the names of customers allegedly using a peer-to-peer filesharing program to illegally copy and distribute copyrighted material).*fn4

Judge Diana Murphy noted in her dissent in In re Charter that the D.C. Circuit and Eighth Circuit decisions limiting the scope of section 512(h)'s subpoena provision "ha[d] wide-reaching ramifications, because as a practical matter, copyright owners cannot deter unlawful peer-to-peer file transfers unless they can learn the identities of persons engaged in that activity." Id. at 775 n.3 (Murphy, J., dissenting). After these decisions, "copyright holders [were] left to file John Doe lawsuits to protect themselves from infringement by subscribers of conduit ISPs . . . , instead of availing themselves of the mechanism Congress provided in the DMCA . . . ." Id. at 782 (Murphy, J., dissenting). Judge Murphy specifically commented on the unraveling of the compromises struck in the DMCA, explaining that "ISPs were only shielded from monetary and injunctive liability in exchange for their assistance in identifying subscribers who engage in acts of piracy over their networks and in removing or disabling access of infringers to protected works when technically possible," and that limiting the scope of section 512(h)'s subpoena provision "denies copyright holders the ability to obtain identification of those subscribers who purloin protected materials through § 512(a) conduit ISPs. This interpretation also shields conduit ISPs from liability without requiring their assistance in protecting copyrights." Id. In short, after Verizon and In re Charter, ISPs faced fewer statutory responsibilities to aid in the identification of alleged copyright infringers and combat infringement occurring through the use of their services, yet continued to enjoy the shield from liability under the remaining provisions of the DMCA.

Following Verizon and In re Charter, as Judge Murphy noted, the only mechanism for copyright owners, such as the plaintiff in the instant case, to obtain identifying information for the unknown persons, who are allegedly illegally downloading and distributing a copyrighted work using a peer-to-peer file sharing program, is to initiate a so-called "John Doe" lawsuit. The plaintiff must next obtain permission from the court for pre-litigation discovery, then issue subpoenas to the ISPs for the needed identifying information for the customers assigned the IP addresses for the computers being used to engage in the allegedly infringing activity.

While the ISPs assert that they are burdened by the number of pending copyright infringement actions and associated requests for identifying information for their customers, the plaintiff aptly states that "[w]ithout a large and growing problem of copyright infringement, there could not be an increasing level of copyright infringement litigation."*fn5 Pl.'s Mem. in Response to Amici Brief, ECF No. 27, at 2. Indeed, the plaintiff contends, without refutation by the ISPs, that infringement occurring on the Internet through peer-to-peer file-sharing technology has risen exponentially, and the instant lawsuit is an attempt by the plaintiff to "salvage the value of its copyright." Compl. ΒΆ 8; see also Pl.'s Response to Amici Brief, at 2 (citing Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 928-29 (2005) (referencing the increased use of file-sharing software to illegally download copyrighted works)). The plaintiff, however, cannot salvage the value of its copyright without assistance from the ISPs because there is no way for the plaintiff to identify the unknown individuals referenced in the Complaint without responses to the subpoenas by the ISPs. Now, fourteen years after the DMCA ...


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