Critics say adult film companies are not litigating -- they're extorting
By Danny Jacobs
The Daily Record Newswire
BALTIMORE, MD — “John Doe 1” received the letter on behalf of Metro Media Entertainment LLC in May 2012. He, along with 46 other John Does, was being accused of violating federal copyright laws by illegally downloading a film.
A pornographic film.
“We will formally name you as a defendant,” the letter warned. “However, in the interest of resolving this matter without further court litigation, we are hereby proposing a settlement to you.”
The deal: Pay $3,500, and the case would go away.
Or, don’t pay. Stand accused in court of downloading pornography, and risk your reputation, your job, maybe your marriage and certainly the thousands of dollars in legal fees that entails.
“These companies know they are suing people who would rather pay the settlement than go to court, even if they are innocent,” said John C. Lowe, a Bethesda lawyer.
One of those innocent people, according to Lowe, is his client, Richard Steinruck, also known as “John Doe 1.” Steinruck took the unusual step of agreeing to out himself as a defendant. Then, he filed a counterclaim against Rhode Island-based Metro Media, seeking in part the cost of the litigation.
“While the Complaint is ostensibly about protection of the Plaintiff’s copyright to one specific film, this litigation is just one of a series of actions brought by this Plaintiff and other Plaintiffs similarly situated extorting money by claiming copyright protection for pornographic films,” the counterclaim states.
A federal judge in Greenbelt last month granted Metro Media’s motion to voluntarily dismiss the case with prejudice and denied Steinruck’s motion for summary judgment.
As a result, Steinruck cannot be sued again by Metro Media — but he cannot recover the attorney’s fees he requested.
Lowe already has an appeal pending to the 4th U.S. Circuit Court of Appeals in another, similar case where attorneys’ fees were denied.
“When you sue 200 people in a lawsuit and say, ‘Pay $3,500 and this will go away,’ that’s not litigation,” Lowe said. “That’s extortion.”
Ira M. Siegel, the Beverly Hills, Calif.-based lawyer for Metro Media, said he does not comment on pending litigation.
Burgeoning claims
Of the more than 3,800 copyright infringement lawsuits filed in federal courts in 2013, almost half were against John Does, and more than three-quarters of the John Doe lawsuits involved pornography, according to a study by Matthew Sag, a professor at Loyola University Chicago School of Law.
These so-called multi-defendant John Doe suits have accounted for 46 percent of copyright lawsuits filed in U.S. District Courts in the first quarter of this year, according to Sag’s research.
The U.S. District Court in Maryland has been home to 320 pornography-related John Doe copyright lawsuits since 2010, fourth-most in the country, according to the research.
One adult-film company, Malibu Media LLC, has filed 274 of the federal lawsuits in Maryland during that time period. The company accounted for one-third of the copyright litigation filed nationwide between May 2013 and May 2014, according to The New Yorker.
In some cases, the plaintiffs name thousands of John Doe defendants. That’s led some critics to refer to the plaintiff companies as copyright “trolls” who are more interested in making a profit from litigation than in protecting intellectual property.
But James B. Astrachan, an intellectual property lawyer with Astrachan Gunst Thomas P.C. in Baltimore, said the term “troll” does not have an objective meaning to him.
“If I have a copyright and you are violating it, you are violating my rights,” he said. “Just because the subject matter is off-color, does that make me a troll?”
Astrachan has filed four or five copyright infringement cases alleging illegal downloads of the Academy Award-winning “The Hurt Locker,” each with five or fewer defendants, he said.
“There really wasn’t much to contend,” he said. “They were losing lots and lots of video sales to [illegal] downloads.”
Mitch Stoltz, a staff attorney with the nonprofit Electronic Frontier Foundation, also agrees pornographic movies are and should be protected by copyright law. But Stoltz criticizes what he calls a “business model” by some film companies allowing them to make more money through litigation than selling their films. Under federal law, a copyright holder can collect up to $150,000 per violation.
“In any case of copyright law, no matter what subject, there has to be due process, there has to be an investigation before you go to court,” Stoltz said. “It should not be that simply by asking for it, [the film companies] get thousands of dollars unless they prove that much harm.”
Suing the router
Lowe, Steinruck’s attorney, has been practicing law for 45 years — 25 as a civil rights lawyer in Charlottesville, Virginia. He is not in favor of pornographic movies but acknowledges they are protected under copyright law.
“I’m in favor of people not being bullies,” he said.
Lowe has represented around 20 clients accused of illegally downloading pornography in the last five years. His first came about when a couple approached his brother with a problem: their daughter, at the time a graduate student in Virginia, was being sued for downloading pornography in Washington, D.C., hundreds of miles away from her campus.
“I took the case because it irritates me,” Lowe said.
That first case was dismissed, as others have been since. In some instances, where his clients may indeed have downloaded movies, he tries to negotiate a settlement the “client can live with.”
Then there are a few clients like Steinruck, Metro Media’s “John Doe 1,” whom Lowe calls “absolutely innocent.”
All the defendants in Metro Media’s lawsuits were identified only by their Internet Protocol address. After suit was filed, Metro Media subpoenaed Internet service providers to obtain the name, address and email address associated with each IP address.
The problem, according to Lowe, is that the person associated with the IP address might not be the person who downloaded the movie.
“They’ve never done anything wrong other than having an Internet router,” he said. “I have not seen a single case when [the plaintiffs] have evidence against the person accused of downloading, only the Internet subscriber.”
Common area
An IT expert hired by Lowe said in an affidavit he was able to use “an ordinary laptop” 200 feet from Steinruck’s home and connect to the Internet using Steinruck’s router. John Doe No. 7, in a motion to quash Metro Media’s subpoena, said his Internet connection was maintained in a common area of his building, meaning someone else could have downloaded the movie.
U.S. Chief District Court Judge Deborah K. Chasanow, in a May 2012 order, ruled Metro Media could not bring suit against all 47 defendants at once and dismissed John Does 2 through 47, leaving only John Doe 1. Steinruck was officially named as a defendant when he filed his counterclaim two months later.
In August 2013, Metro Media offered to drop the case in exchange for both parties paying for their own cost of litigation. Steinruck refused and, three months later, filed a motion for summary judgment, seeking attorney’s fees and costs.
“The baseless pursuit of Richard Steinruck without any evidence actually tying Richard Steinruck to any of the acts alleged against him put Mr. Steinruck and his attorney to great expense of time and money,” the motion states.
Less than three weeks later, a lawyer for Metro Media filed a motion to voluntarily dismiss the case. The motion states “sufficient evidence exists” to prove that Steinruck, or perhaps a family member, downloaded the movie.
“While Plaintiff believes that a jury should find that Defendant is liable for copyright infringement, Plaintiff has determined that the cost of going forward may not justify the damages that might be awarded, or that any damages would be recoverable,” the motion states.
Lowe, on behalf of Steinruck, objected to the voluntary dismissal, accusing Metro Media of seeking a “free pass” after pursuing litigation without a “scintilla” of evidence against his client.
But Chasanow, in a ruling last month, said while Metro Media did not have conclusive proof against Steinruck, the case was plausible.
“Although the strength of Plaintiff’s evidence … is debatable, there is no indication that Plaintiff acted improperly or in bad faith by initiating and pursuing this suit against Richard Steinruck,” Chasanow wrote.
The judge also acknowledged that while Metro Media was “relatively inactive” in the case, it did offer to settle with Steinruck, and that a dismissal with prejudice served Steinruck’s interest by ensuring no future claims could be filed against him.
Stoltz said challenges such as Steinruck’s are “statistically rare” but becoming more common. Judges are raising evidentiary requirements for plaintiffs filing multi-defendant John Doe lawsuits, he said, including IP-address geolocation to show the defendants are in the court’s jurisdiction.
“The cracks are starting to show,” he said of the lawsuits. “The weaknesses in the cases are starting to show.”
Lowe is holding off, for now, on an appeal of Chasanow’s ruling in Steinruck’s case. He filed his brief last month in the 4th Circuit case, Patrick Collins Inc. v. David Osburn, No. 14-1498. A response from the film company is due at the end of this month; like Metro Media Entertainment, it is represented by Siegel. A hearing date has not been scheduled.
Meanwhile, Lowe also plans to continue representing clients like Steinruck.
“I really want to take one of these cases to trial,” he said. “We could really open a can of worms.”
