This post is about two new appeals in Malibu Media cases. I’ll get to them further below, yet I want to begin with a story I covered earlier, which could have ended differently, had it started today.
Malibu Media v Pelizzo
The first time a bittorent defendant appealed a district court ruling was in 2013. In Malibu Media v Leo Pelizzo (FLSD 12-cv-22768), Malibu’s counsel Keith Lipscomb pursued an innocent immigrant even after his innocence was established beyond any doubt. While Judge Patricia Seitz accepted the magistrate’s recommendation to award attorney’s fees pursuant to 28 U.S.C. § 1927 (the fees accrued after it became clear that the defendant had nothing to do with torrenting X-Art’s porn), she denied the 17 U.S.C. § 505 fees (which would cover the entire lifespan of the case), because she found that the four Fogerty factors were in favor of Lipscomb/Malibu, i.e. that the troll didn’t bring the lawsuit in bad faith (it was “objectively reasonable”).
In August 2014 Pelizzo (via his attorney Francisco Ferreiro) appealed the decision, but lost: the Court of Appeals for the Eleventh Circuit affirmed the lower court ruling and declined to hear the case de novo.
Petitioning SCOTUS was not fruitful either — the certification was denied.
This certiorari denial didn’t stop the defendant, and on 01/27/2015 Ferreiro asked SCOTUS to reconsider, arguing that the fee-shifting issues at hand were similar to the issues in Kirtsaeng v Wiley and Sons, Inc., a case that the Supreme Court accepted for review in 2015.
I don’t know the fate of the reconsideration motion, but yesterday SCOTUS ruled on Kirtsaeng, and while not groundbreaking, it was a good ruling. There are many articles and explainers out there, so I leave the analysis to professionals. What’s important for our purpose is that the “objective reasonableness” of a lawsuit is no longer a bright line rule that bars the winning defendant from recovering attorney’s fees:
While the Second Circuit properly calls for district courts to give “substantial weight” to the reasonableness of a losing party’s litigating positions, its language at times suggests that a finding of reasonableness raises a presumption against granting fees, and that goes too far in cabining the district court’s analysis. Because the District Court thus may not have understood the full scope of its discretion, it should have the opportunity to reconsider Kirtsaeng’s fee application. On remand, the District Court should continue to give substantial weight to the reasonableness of Wiley’s position but also take into account all other relevant factors.
It is quite plausible that Pelizzo would get his § 505 fees if this decision was made three years ago rather than yesterday. Also, I’m cautiously optimistic that the Kirtsaeng ruling significantly increases the likelihood of recovering attorney’s fees by the defendants if the appeals discussed below turn out to be successful.
Today in Kirtsaeng, the Supreme Court confirmed that attorney's fees awards can be proper against copyright trolls. pic.twitter.com/AsC4zK5wFj
— Booth Sweet LLP (@BoothSweet) June 16, 2016
It is also worth noting another relevant recent SCOTUS decision: in CRST Van Expedited, Inc. v Equal Employment Opportunity Commission. While this dispute is not a copyright case, the ruling clarifies the definition of the “prevailing party,” and thus indirectly addresses the attorney’s fees issue ¹. On 5/19/2016 the Supreme Court held that “a favorable ruling on the merits is not a necessary predicate to find that a defendant has prevailed.” While none of 5000+ Malibu Media lawsuits was ever resolved on the merits (and likely never will), there are many cases where defendants nonetheless prevailed, albeit procedurally, and both cases discussed below will benefit from the ruling in CRST (as a matter of fact, this authority is mentioned in the case I discuss next).
Now, back to the main subject of this story — the new appeals.
Malibu Media v Roldan
In September 2014, X-Art’s co-owner Colette Pellissier-Field lied to an Indiana newspaper reporter:
“We don’t want to ruin someone’s life,” Field asserted. “I do not want to cause anyone financial hardship.”
Unless there are unusual circumstances involved, she said, she does not want students or members of the military to be sued for illegal downloads. She said she also understands some people might not know they’re breaking the law.
Contrary to this assertion, Malibu Media did exactly that — sued a student. Moreover, relying on flawed data, they sued a wrong person. The residence, to which the IP address in question belonged, was his father’s, while Roberto lived miles away during the times of the alleged infringement.
Despite the overwhelming proof of innocence and repeated pleas to dismiss the case, the troll dragged Roberto through the mud for more than a year, and even tried to accuse his attorney Cynthia Conlin of multiplying proceedings in order to inflate her billable hours (the Chutzpah of the pot calling the kettle black).
There is more to that: Lipscomb was cornered with irrefutable evidence, and everyone expected Roberto to be dismissed and compensated for expenses and unnecessarily damaged reputation. Instead, the sleazy lawyer managed to add Roberto’s father as a defendant and subsequently dismissed Roberto from the complaint without prejudice, hence avoided paying attorney’s fees. I don’t know if Roberto’s father was the one who indeed torrented X-Art’s smut: the case against Angel Roldan was settled shortly after the substitution. But it does not matter! When both parties agreed that Roberto Roldan could not have committed the alleged infringement, the court should have granted Roberto’s motion for summary judgement and awarded attorney’s fees.
It is mind-boggling that the court allowed this salto-mortale. This blatant injustice needed to be corrected, so an appeal was expected. On 5/31/2016 the defendant did appeal the district’s court orders — a first step on the road of recovery of what the troll undeniably owes to the young man and his attorney.
Malibu Media v [John Doe]
In Malibu Media v [John Doe] (OHSD 14-cv-00821), a competent defense by Booth Sweet caused the troll to cowardly cut and run, i.e. after plaintiff’s walk-away offer was rejected by the defendant, Malibu moved to dismiss the case without prejudice — to avoid paying loser’s fees. To our astonishment, Magistrate Judge Terence P. Kemp allowed it, ignoring well-documented and well-presented evidence of plaintiff’s discovery shenanigans. The order reads like the judge was annoyed by aggressiveness of the defense and simply wanted this case out of the docket — damn the merits.
On 06/12/2016 [John Doe] filed his notice of appeal. Defendant’s brief is due on 8/3/2016, and I will definitely blog about it then (if the mediation scheduled on 7/18/2016 doesn’t resolve the dispute).
Malibu Media v. Roldan: Malibu responded to the opening brief on 7/19/2016, and on 8/26/2016 the defendant replied. I think that Conlin’s arguments are much stronger than Kennedy’s, but I admit that I’m biased: I’m sick and tired of same BS the troll keeps repeating over and over again without any shame. You know what I mean, just read the opening paragraph: “Malibu became the first Plaintiff to ever try a BitTorrent copyright infringement case.” So, I leave it here: read both briefs and make your own conclusions.
One significant detail: although neither party requested it, on 10/3/2016 the circuit court has determined that oral argument would be necessary and wants both counsel to come to Atlanta. No date is set yet.
Malibu Media v. [John Doe]: the defendant keeps requesting new deadlines (the latest: appellant brief is due 10/28/2016; appellee brief is due 11/28/2016). The reason is that Jason Sweet wants the district court to supplement the record with the statements of proceedings: i.e., to put in writing what happened during two phone conferences: the 10/26/2015 discovery conference (motion; exhibits A, B, C), and 4/16/2015 pretrial conference (motion). Malibu objected on 9/24/2016, and the defendant replied on 9/26/2016.
Given that Sweet’s pleadings are usually of a high value (and also entertaining), I will likely write a separate post when the appellate brief is finally filed.
Yesterday Malibu Media substituted Emilie Kennedy with local attorneys in two remaining appeals (both post-argument):
- Malibu Media v [John Doe] (CA6) : O’Toole, McLaughlin, Dooley & Pecora
- Malibu Media v Roldan (CA11) : Dion J. Cassata
I don’t know if Pillar Law and Kennedy were fired for good or just from handling appeals. The wording in the Florida motion suggests the former:
IT IS HEREBY STIPULATED by and between the undersigned attorneys and with consent of Plaintiff-Appellee MALIBU MEDIA, LLC (hereinafter, “Malibu Media” or “Plaintiff”) that Emilie Kennedy, Esq. and the law firm of Pillar Law Group, have been terminated as counsel for Malibu Media, and thus shall be relieved from any further responsibility in this matter, and that Cassata Law, P.A. is hereby substituted as counsel for Malibu Media, and shall represent it all further proceedings before this tribunal.
- Appellate brief filed in a Malibu Media case after the troll cuts and runs to avoid compensating wrongly accused
¹ This authority was first cited in Malibu Media v Jesse Raleigh (MIWD 13-cv-00360), a case recently dismissed by the judge for failure to substitute the attorney — a situation apparently controlled by the ruling in CRST. The motion for attorney’s fees in Raleigh is currently pending.