Guardaley | Voltage
Magistrate judge to copyright troll: you may cut and run if you want, but first compensate defendant
Copyright trolls always try to preemptively dismiss a fighting defendant – a to-go tactic to avoid exposing trolls’ numerous frauds in discovery. When a defendant in a copyright infringement lawsuit is dismissed without prejudice, he or she is not considered the prevailing party, and §505 fees are not awarded. Thus, defense attorneys usually concentrate on arguing that the court should dismiss the case with prejudice instead. Such an approach is rarely successful.
However, Rule 41(a), which governs voluntary dismissals, includes the following clause (emphasized):
(2) By Court Order; Effect. Except as provided in Rule 41(a)(1), an action may be dismissed at the plaintiff’s request only by court order, on terms that the court considers proper. If a defendant has pleaded a counterclaim before being served with the plaintiff’s motion to dismiss, the action may be dismissed over the defendant’s objection only if the counterclaim can remain pending for independent adjudication. […]
The defense bar seemingly never tried to explore this avenue. Until now.
A Portland attorney Lake Perriguey was assigned as pro bono counsel for the defendant in ME2 Productions, Inc. et al v. Sheldon (ORD 17-cv-00158). After a short answer and a one-paragraph counterclaim (which was meant to prevent the troll from easily killing the case without a court order), the defense demanded extensive discovery, which apparently scared off the troll, and (surprise!) Crowell asked the court to
be allowed to cut-and-run dismiss the case.
The defendant responded (emphasis is mine)¹:
Defendant does not oppose Plaintiffs’ Motion to Dismiss without prejudice. However, Plaintiffs’ Motion to Dismiss is silent as to whether the court should award costs and attorney fees. Consistent with rulings in district courts throughout the circuits, Defendant requests that the court condition the dismissal on the payment of Defendant’s costs and attorney fees, and require that any future litigation Plaintiffs might bring against Defendant alleging copyright infringement of Plaintiffs’ titles alleged in their Amended Complaint be brought in this court. Further, if Plaintiffs file another lawsuit asserting the same or similar claims against Defendants based on the facts of this case and dismiss that action, such dismissal should operate as an adjudication on the merits under Rule 41(a)(1)(B).
In my experience, this is the first time such a tactic was employed by a bittorent defendant. And it worked: after some back-and-forth (Crowell persisted, and the defendant sur-replied), Judge Beckerman sided with the defendant on the fees question (she recommended denying the other two conditions):
[…] Plaintiffs moved to dismiss early in the case, prior to discovery, which is generally favored. However, the timing of Plaintiffs’ voluntary dismissal here (just after Sheldon requested far-reaching discovery at the Rule 16 conference) supports Sheldon’s argument that Plaintiffs file these copyright infringement cases only to achieve a quick settlement without any meaningful litigation. That approach, especially when coupled with a voluntary dismissal when the quick settlement does not materialize, supports an award of costs and fees incurred to defend the action prior to the voluntarily dismissal. To find otherwise would allow plaintiffs to file hundreds of these copyright infringement actions, force subscribers and alleged infringers to incur defense costs and fees, and then dismiss any actions that do not result in a quick settlement, without any consequences to the plaintiffs. This Court cannot support that outcome.
The balance of the relevant factors leads to this Court’s conclusion that the district judge should condition the voluntary dismissal of this case on Plaintiffs’ payment of Sheldon’s reasonable costs and attorney’s fees.
This is not the first time Beckerman has levelled the bittorent litigation playing filed, reducing the unfair advantage of troll lawyers over vulnerable people. I expect a fierce opposition from Crowell, maybe even an appeal, but at the end of the day he will lose.
On 10/28/2017 the defense prepared motions for fees ($10,800.00) and costs ($358.10); and on 11/8/2017 the judge made the following docket entry, indicating that Crowell paid in full:
Finding as Moot Defendant’s Motion for Attorney Fees 46 ; Finding as Moot Defendant’s Bill of Costs 48 , as the parties reported by e-mail (11/8/2017) that they had resolved the attorney fee issue. Ordered on 11/13/2017 by Magistrate Judge Stacie F. Beckerman
¹ Don’t miss the exhibits – declarations of Donna Violette (owner/landlord), Patrick Sheldon (defendant), and Lake Perriguey (counsel).
6 responses to ‘Magistrate judge to copyright troll: you may cut and run if you want, but first compensate defendant’
Crowell initially tried to extort the landlord, Donna Violette, who had multiple tenants (one was later named as the defendant). Here is from her sworn declaration (emphasis added):
Mrs. Violette, you misspelled John Steele’s name.
This illustrates a perfect example why venue is critical not only in bittorrent defense, but also generally in intellectual property litigation.
And yet Crowell keeps returning to the woodshed.
Carl Crowell paid the attorney fee. The case was dismissed.
Thanks, I updated the post.