CO Doe# 7 Answers A Malibu Media Complaint & Drops A Bomb, 1:12-cv-00409

Well Colorado may turn out to be a new fire storm for the Copyright Trolls.  Thank you CO Doe for giving me heads-up on this development.  On 20 Aug 12, Doe #7, represented by John A. Arsenault (WESSELS & ARSENAULT, L.L.C.), filed an answer to Plaintiff’s complaint.  The case is Malibu Media LLC v. John Does 1-27, # 1:12-cv-00409, opened on 15 Feb 12.  I don’t think Troll Kotzker was expecting this move and is now locked into the case against Doe #7.  Def_Ans_complaint_00409(CO)  RFC Express   Complaint_00409(CO)

In the answer, Doe#7 denies all allegations of copyright infringement, states 10 defenses, and makes counterclaims against Plaintiff.

It is the Sixth Defense (Barring of Statutory Damages and Attorneys Fees – Page 8) that is really interesting.

72.  Plaintiff’s claim for statutory damages is barred by the U.S. Constitution. Amongst other rights, the fifth amendment right to due process bars Plaintiff’s claim. As the Supreme Court has held, due process will prohibit an award of statutory damages meeting or exceeding a proportion of ten times or more actual damages. See State Farm Mutual Automobile Insurance Co., v. Campbell, 528 U.S. 408, 123 S. Ct. 1513, 1524 (2003); see also Parker v. Time Warner Entertainment Co., 331 F.3d 13,22 (2nd Cir. 2003); In Re Napster, Inc., 2005 WL 1287611, 377 F. Supp. 2d 796, 77 U.S.P.Q.2d 1833, (N.D. Cal. 2005). In fact, an award of statutory damages at four times actual damages “might be close to the line of constitutional impropriety.” Id. If all of Plaintiff’s settlements for infringement of the work in question are added together, the damages likely exceed beyond the statutory maximum allowed by the copyright statute.

73.  Pursuant to applicable law concerning whether statutory damages are constitutional and to what extent, Plaintiff’s recovery, if any, must necessarily have a reasonable relationship to the Plaintiff’s alleged actual damages caused by the alleged infringement.

Mr. Arsenault tells the court that the US Supreme Court has limited Statutory damages to 10 times the actual damages.  As X-Art is a monthly subscription site, let’s go with 10 times the monthly access fees of $19.99; or $199.90.  OK, I’m feeling a bit generous; lets calculate the maximum statutory damages for the year subscription fee of $99.95; or $999.50.  Now I know Plaintiff and Troll Kotzker will say the real actual damages are far greater, as the movie was shared with so many people.  If that is the case, they only need to show how many people each one of the defendants shared the movie with.  I’m sure there highly capable forensic experts could easily do that.

Make sure you note all the other defenses and tell me what you think.

Counterclaims (Starts on Page 10)

Mr. Arsenault drops the bomb and doesn’t mince words on what he thinks of the Copyright troll business model.  He even cites a US News and World report I gave an interview to.  😉  Mr. Arsenault takes 5 pages to detail the general Copyright troll business model.  Here is just a sample.

9.  This business model is further complicated by the fact that the adult entertainment company’s attorney is paid a portion of any settlements received, establishing a potentially champertous relationship that can be easily abused without an incentive for further scrutiny of data provided by the forensics investigators.

10.  To further improve the likelihood that the targets will settle, it is Defendant’s belief that Plaintiffs actively draw infringers to their films, and do so by uploading an archive containing a plurality of films to the internet for unsuspecting potential Defendants to access.  This digital file often contains multiple registered works which Plaintiffs use to seek additional damages from Doe Defendants.

Mr. Arsenault makes the following claims against Plaintiff.

  • Declaration of No Infringement of Copyright

30.  Malibu Media, L.L.C., L.L.C. has incorrectly asserted in its claim that Defendant Doe has willfully infringed its copyright in the work via alleged downloading using Bit Torrent.

  • Abuse of Process

37.  Plaintiff’s goal in these lawsuits appears to be quickly settling with a large number of subscribers as potential Defendants as a revenue generating model, and then pursuing parties who fail to settle by either continued harassment, a default judgment, or an action against a Plaintiff based on questionable allegations of unlawful access to a pornographic work.

Mr. Arsenault asks the court to  awarded reasonable attorneys’ fees, sanctions, costs, and other such awards (according to Federal and State laws); as well as holding Plaintiff liable for punitive and exemplary damages awarded to the maximum extent under law.

I foresee Plaintiff trying to settle this one as quickly and quietly as possible.  It will take some time, as Kotzker and his master will try to feel out how serious Mr. Arsenault/Doe #7 are.  If Doe #7 has the stomach to push this, Plaintiff may be paying him a hefty settlement.  The only way Troll Kotzker has a chance is if they have some good insider information showing Doe #7 was the actual infringer.  As they didn’t even bother to name him as an individual, I think they are “up #$%! creek.” 😉  Have fun with this one boys!

DieTrollDie 🙂

About DieTrollDie

I'm one of the many 'John Does' (200,000+ & growing in the US) who Copyright Trolls have threatened with a civil law suit unless they are paid off. What is a Copyright Troll? Check out the Electronic Frontier Foundation link - http://www.eff.org/issues/copyright-trolls
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14 Responses to CO Doe# 7 Answers A Malibu Media Complaint & Drops A Bomb, 1:12-cv-00409

  1. Subscribe says:

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    About time we start gettin some fighters! Love how they’re rolling in. Too bad it took a couple years and a quarter million victims but the trolling twilight is sure looking beautiful!

  2. skruuball says:

    Very nice. I will look forward to seeing how this one shakes out.

  3. Raul says:

    More good news out of CO!
    M.J. Hegarty deserves some responsibility for this development. He has not, to my knowledge, granted a single motion to quash or sever or issue a protective order. His reasoning is that the motion violates Rule 11 (if filed by an anonymous Doe) or premature (if filed by a represented Doe). It is almost as if he enjoys watching these horrible lawsuits progress untouched despite a very clear indication from his superior, Judge Martinez, that severance is warranted in these lawsuits. With this counter suit and that of Fantalis, hopefully Hegarty will rethink his approach.

  4. that anonymous coward says:

    Many of the Judges in these cases seem to have a bias, and it is not hard to see why they do.
    You have the puritanical view of pornography being dirty and wrong.
    You have the media parroting the bogus figures of imaginary losses of billions.
    You have them point to the gaffer and sound guy who are being ripped off, except they were paid for their time they do not get a cut from each sale.
    You have the IP is our greatest asset statement.
    You have the view that at best is the internet is a series of tubes filled with scammers and evil people.
    You have them unwilling to question IP address identification, believing it to be as definitive as DNA.
    We know many trolls scan their lists to try and remove IP’s and names that might touch on someone who will cause them no end of grief, Judges, police, etc.
    This is the High Court/Low Court treatment, copyright holders are gods to be revered and obeyed.

  5. Subscribe says:

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  6. Raul says:

    On 9-10 Kotzker filed a motion to strike and a motion to dismiss.

  7. omillais says:

    The unsupported speculation about lawyers getting kickbacks and plaintiffs posting content as honeypots surely will be ignored, but I’m mainly concerned about the claim that statutory damages must not be too different from actual damages. State Farm v. Campbell was a punitive damages case, not statutory, and the distinction is crucial, as noted in the Tenenbaum and Thomas-Rasset music file-sharing cases (in those circuits, Gore guideposts don’t apply to statutory damages, Williams does, and in Williams, the Supreme Court said statutory damages are not to be compared to actual damages). The other citations don’t help, either: the relevant part of Parker v. Time Warner Entertainment was about statutory damages intended for individuals but awarded to a class; I don’t see how it applies. Napster…377 didn’t broach damages; it had more to do with whether making-available is distribution (the court wasn’t convinced it is).

    • patentsnotcopyrights says:

      http://papers.ssrn.com/sol3/papers.cfm?abstract_id=660601

      Gore applies a roadmap for the punitive effect of statutory damages awards. Damages are awarded by juries after trial, so BMW v. Gore is also relevant here given that they would be the parties making the award if liability is proven if taken to trial. The court would have to consider those factors when assessing the extent of the award (if it gets that far). State Farm is a reaffirming of the rules for determining whether a damage award is grossly excessive (statutory damages or not). Finally, a finding of willfulness in copyright litigation is to some extent a punitive award for an actor’s bad intent. Given JK is going to likely ask for $150,000 per work, Parker also appears to apply.

    • patentsnotcopyrights says:

      A couple of more citations that can be raised in support of the limited damages award argument are as follows:

      Smith v. NBC Universal, 2008 WL 612696 *2 (S.D.N.Y. Feb. 28, 2008)
      Copyright owners are entitled to one award of statutory damages against multiple infringers where they act in concert and are therefore jointly and severally liable.

      The key here being that Arsenault needs to request and have provided evidence of all the previous settlements in that case and bring that up as an argument against a high damages award (again if it gets that far).

      Fitzgerald Pub. Co. v. Baylor Pub. Co., 807 F.2d 1110, 1117 (2d. Cir. 1986)
      Sec. 504(c)(1) relies on the common law to define joint and several liability. Those principles do not depend on whether the defendants engaged in the same act or exhibited the same level of willfulness.

      My guess is that he will file a motion to dismiss soon. He probably is asking for discovery and will be stonewalled based on the agreements being confidential. I wonder if a motion to compel will be forthcoming after the RFP is not provided by Kotzker.

  8. Pingback: Copyright trolls: “We don’t care if you did it or not, we just want your money!” « Fight Copyright Trolls

  9. Pingback: What To Do If You Are Served By A Copyright Troll | DieTrollDie

  10. Mark E says:

    Mr. Arsenault represented me in a John Doe claim made by Malibu Media in 2013. He did a great job and I want to pass on my highest recommendation. He worked for a fair fee, negotiated a settlement before my name was released, and was overall very pleasant to work with. The whole system isn’t fair, but if you are in Colorado and hit by a John Doe suit, John Arsenault is a great option.

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