Disney Enterprises, Inc. et al v. Hotfile Corp. et al

Filing 417

NOTICE by Anton Titov of Filing the PUBLICLY FILED REDACTED Version of the Reply Memorandum Filed In Support of Mr. Titov's Motion for Summary Judgment (Attachments: # 1 Exhibit A)(Munn, Janet)

EXHIBIT A

PUBLIC VERSION
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO.: 11-CIV-20427-WILLIAMS/TURNOFF
DISNEY ENTERPRISES, INC.,
TWENTIETH CENTURY FOX FILM
CORPORATION, UNIVERSAL CITY
STUDIOS PRODUCTIONS LLLP,
COLUMBIA PICTURES INDUSTRIES,
INC., and WARNER BROS.
ENTERTAINMENT INC.,
Plaintiffs,
v.
HOTFILE CORP., ANTON TITOV, and
DOES 1-10,
Defendants.
____________________________________/
HOTFILE CORP.,
Counterclaimant,
v.
WARNER BROS. ENTERTAINMENT INC.,
Counter-Defendant.
____________________________________/
REPLY MEMORANDUM IN SUPPORT OF DEFENDANT ANTON
TITOV’S MOTION FOR SUMMARY JUDGMENT

26501\2988338.9

CASE NO.: ll-CIV-20427-WILLIAMS/TURNOFF

FILED UNDER SEAL

CITATION LEGEND
1.

"PSUF" shall refer to specific paragraph numbers of Plaintiffs' Statement of

Uncontroverted Facts.
2.

"DSUF" shall refer to specific paragraph numbers of Statement of Undisputed

Material Facts In Support of Motion of Defendants Hotfile Corporation for Partial Summary
Judgment Based on the Digital Millennium Copyright Act Safe Harbor.
3.

"TSUF" shall refer to specific paragraph numbers of Statement of Undisputed

Material Facts In Support of Motion of Anton Titov's Motion for Summary Judgment.
4.

"DRSF" shall refer to specific paragraph numbers of the Statement of Facts of

Defendants Hotfile Corporation and Anton Titov In Opposition to Plaintiffs' Statement of
Uncontroverted Facts and Defendants' Statement of Additional Material Facts.
5.

"Foster Dec!''' shall refer to the declaration of Dr. Ian Foster in support of

Plaintiffs' Motion for Summary Judgment Against Defendants Hotfile Corp. and Anton Titov,
dated February 17,2012.
6.

"Yeh Dec!''' shall refer to the declaration of Jennifer V. Yeh in support of

Plaintiffs' Motion for Summary Judgment Against Defendants Hotfile Corp. and Anton Titov,
dated February 17,2012.
7.

"Titov Dec!''' shall refer to the declaration of Anton Titov in support of

Defendants' Motion for Summary Judgment.
8.

"Titov Opp. Decl." shall refer to the declaration of Anton Titov in support of

Defendants' Opposition to Plaintiffs' Motion for Summary Judgment.
9.

"Leibnitz Dec!." shall refer to the declaration of Andrew Leibnitz in support of

Defendants' Opposition to Plaintiffs' Motion for Summary Judgment.
10.

"Gupta Dec!''' shall refer to the declaration of Deepak Gupta in support of

Defendants' Motion for Summary Judgment.
11.

"Schoenberg Dec!''' shall refer to the declaration of Anthony Schoenberg in

support of Anton Titov's Motion for Summary Judgment.
12.

"Levy Dec!." shall refer to the declaration of Dr. Daniel S. Levy in support of

Defendant's Opposition to Plaintiffs' Motion for Summary Judgment.
13.

"Cromarty Dec!." shall refer to the declaration of Dr. Andrew Cromarty in

support of Defendant's Opposition to Plaintiffs' Motion for Summary Judgment.

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14.

CASE NO.: 11-CIV-20427-WILLIAMS/TURNOFF

"Boyle Dec!." shall refer to the declaration of Dr. James Boyle in support of

Defendant's Opposition to Plaintiffs' Motion for Summary Judgment.
15.

"Leibnitz Ex. _," shall refer to exhibits attached to the Leibnitz Declaration.

16.

"Yeh Ex. _," shall refer to exhibits attached to the Yeh Declaration.

17.

"Gupta Ex. _," shall refer to exhibits attached to the Gupta Declaration.

18.

"Schoenberg Ex. _," shall refer to exhibits attached to the Schoenberg

Declaration.
19.

"Boyle Ex. _," shall refer to exhibits attached to the Boyle Declaration.

20.

"Thamkul Dec!." shall refer to the declaration of Janel Thamkul in support of

Defendants' Opposition to Plaintiffs' Motion for Summary Judgment.
21.

"Thamkul Ex. --," shall refer to exhibits attached to the Thamkul Declaration.

22.

"Titov Reply Dec!." shall refer to the declaration of Anton Titov in support of

Defendants' Reply in support of their Motion for Partial Summary Judgment.
23.

"DMSJ" shall refer to the Motion of Defendants Hotfile Corporation for Partial

Summary Judgment Based on the Digital Millennium Copyright Act Safe Harbor.
24.

"DOPMSJ" shall refer to Defendants' Opposition to Plaintiffs' Motion for

Summary Judgment Against Defendants Hotfile Corp. and Anton Titov.
25.

"PODMSJ" shall refer to Plaintiffs' Opposition to the Motion of Defendants

Hotfile Corporation for Partial Summary Judgment Based on the Digital Millennium Copyright
Act Safe Harbor.
26.

"PMSJ" shall refer to Plaintiffs' Motion for Summary Judgment Against

Defendants Hotfile Corp. and Anton Titov.
27.

"PCFDMSJ" shall refer to Plaintiffs' Counterstatement of Material Facts in

Opposition to Defendants' Motion for Partial Summary Judgment Based on the Digital
Millennium Copyright Act Safe Harbor.
28.

"TMSJ" shall refer to Defendant Anton Titov's Motion for Summary Judgment.

29.

"POTMSJ" shall refer to Plaintiffs' Opposition to Defendant Anton Titov's

Motion for Summary Judgment.
30.

PCFTMSJ" shall refer to Plaintiffs' Counterstatement of Material Facts In

Opposition to Anton Titov's Motion for Summary Judgment.

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CASE NO.: 11-CIV-20427-WILLIAMS/TURNOFF
TABLE OF CONTENTS
Page

I.

INTRODUCTION ............................................................................................................. 1

II.

UNDISPUTED FACTS WARRANT SUMMARY JUDGMENT FOR MR.
TITOV ................................................................................................................................ 1

III.

PLAINTIFFS SEEK TO ALTER THE "GUIDING SPIRIT" STANDARD .................... 2

IV.

PLAINTIFFS STRAW-MAN ARGUMENTS ABOUT THE DMCA LACK
MERIT ............................................................................................................................... 4

V.

PLAINTIFFS' FACTUAL "DISPUTES" ARE UNSUPPORTED ................................... 5

VI.

MR. TITOV IS NOT SUBJECT TO THE COURT'S JURISDICTION ......................... 9

VII.

CONCLUSION ................................................................................................................ 10

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TABLE OF AUTHORITIES
Page

FEDERAL CASES
Arista Records LLC v. Lime Grp LLC,
784 F. Supp. 2d 398 (S.D.N.Y. 2011) ......................................................................................... 3
Arista Records LLC v. Usenet.com, Inc.,
633 F. Supp. 2d 124 (S.D.N.Y. 2009) ......................................................................................... 3
Capitol Records, Inc. v. MP3Tunes, LLe,
2011 WL 5104616 (S.D.N.Y. Oct. 25,2011) ............................................................................. 4
Chane I, Inc. v. Italian Activewear of Fla., Inc.,
931 F.2d 1472 (11th Cir. 1991) .............................................................................................. 1,2
Columbia Pictures Industries, Inc. v. Fung,
2009 WL 6355911 (C.D. Cal. Dec. 21, 2009) ............................................................................ 3
Columbia Pictures, Inc. v. Redd Horne,
749 F.2d 154 (3d Cir. 1984) ....................................................................................................... 3
ComprehenSive Care Corp. v. Katzman,
2011 WL 2960916 (M.D.Fla. July 21, 2011) ............................................................................. 2
CoStar Grp. Inc. v. LoopNet,
164 F. Supp. 2d 688 (D. Md. 2001) ............................................................................................ 4
Ellison v. Robertson,
357 F.3d 1072 (9th Cir. 2004) .................................................................................................... 5
Escude Cruz v. Ortho Pharmaceutical Corp.,
619 F.2d 902 (1st Cir. 1980) ....................................................................................................... 7
Foreign Imp. Prod. and Public Inc. v. Grupo Industries Hotelero S.A.,
2008 WL 4724495 (S.D. Fla. 2008) ........................................................................................... 3
Frietsch v. Refco, Inc.,
56 F.3d 825 (7th Cir. 1995) ...................................................................................................... 10
Giotis v. Apollo of the Ozarks, Inc.,
800 F.2d 660 (7th Cir. 1986) .................................................................................................... 10
Gulf USA Corp. v. Federal Ins. Co.,
259 F.3d 1049 (9th Cir. 2001) .................................................................................................... 2
Hendrickson v. eBay, Inc.,
165 F. Supp. 2d 1082 (C.D. Cal. 2009) ...................................................................................... 4
Johnson & Johnson Consumer Cos., Inc. v. Aini,
540 F. Supp. 2d 374 (E.D.N.Y. 2008) ........................................................................................ 4
Logicom Inclusive, Inc. v. WP. Stewart & Co.,
2004 WL 1781009 (S.D.N.Y. Aug. 10,2004) ............................................................................ 4
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TABLE OF AUTHORITIES
(continued)

Page

Kyeame v. Buchheit,
2011 WL 4949220 (M.D. Pa. Oct. 18, 2011) ............................................................................. 2
Microsoft Corp. v. Md. Micro.com, Inc.,
2003 WL 21805213 (D. Md. July 15,2003) ............................................................................... 4
Morley Music Co v. Cont 'I Inc.,
777 F. Supp. 1579 (S.D. Fla. 1991) .................................................................................... 1,2,4
Neder v. United States,
527 U.S. 1 (1999) .................................................................................................................... 4, 7
Netbula, LLC v. Chordiant Software, Inc.,
2009 WL 750201 (N.D. Cal. March 20, 2009) ........................................................................... 5
Pardazi v. Cullman Med. Cir.,
896 F. 3d 1313 (11 th Cir. 1990) ................................................................................................. 9
Perfect 10 v. Amazon. com, Inc.,
508 F.3d 1146 (9th Cir. 2007) ................................................................................................... 5
Pickwick Music Corp. v. Record Prods, Inc.,
292 F. Supp. 39 (S.D.N.Y. 1968) ............................................................................................... 4
Slip-N-Slide Records, Inc. v. TVT Records, LLC,
2007 WL 473273 (S.D. Fla. Feb. 8, 2007) ................................................................................. 4
US. Media Corp., Inc. v. Edde Entm 't, Inc.,
1996 WL 520901 (S.D.N.Y. Sept. 12, 1996) .............................................................................. 3
UMG Recordings, Inc. v. Shelter Capital Partners LLC,
667 F.3d 1022 (9th Cir. 2011) ................................................................................................ 4, 5
Viacom International Inc. v. YouTube, Inc.,
718 F. Supp. 2d 514 (S.D.N.Y. 2010 .......................................................................................... 4
Vondriska v. Cugno,
2010 WL 395628 (1Ith Cir. Feb. 4, 2010) ................................................................................. 2
Warner Bros.-Seven Arts, Inc. v. Kalantzakis,
326 F. Supp. 80 (S.D. Tex. 1971) ............................................................................................... 4
Woynar v. Chitwood,
2012 WL 442986 (M.D. Fla. Feb. 10,2012) .............................................................................. 2

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TABLE OF AUTHORITIES
(continued)
Page

FEDERAL STATUTES

17 U.S. C. § 512 ............................................................................................................................... 4

FEDERAL RULES AND REGULATIONS

Federal Rules of Civil Procedure 26 ............................................................................................. 10

STATE RULES AND REGULATIONS

Local Rule 16.1 ............................................................................................................................. 10

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CASE NO.: ll-CIV-20427-WILLIAMS/TURNOFF

FILED UNDER SEAL
I.

INTRODUCTION
The Studios' (or "Plaintiffs") case against Mr. Titov is a house of cards that has

collapsed. Initially, it was based in the Complaint on factual allegations that the Studios claimed
proved Mr. Titov was "the guiding spirit behind and central figure in Hotfile Corp.' s infringing
activities." D.E. # 1 ~ 63. Those allegations have now been proven false. TMSJ ILA; TSUF 5,
6, 10, II. Recognizing this failure of proof, in their summary judgment motion the Studios
dropped those allegations in favor of a new theory that Mr. Titov is liable because "[t]he
operations of the Hotfile website are directed by two other entities [Hotfile Ltd. and Lemuria]
" PMSJ at 35 and 36. However, those non-parties merely
provide payment and web-hosting services to Hotfile, hardly the type of evidence that proves
as the Studios must - that Mr. Titov is the "guiding spirit," "dominant influence," or has "the
capacity to control the acts" of Hotfile. See Chanel, Inc. v. Italian Activewear of Fla., Inc., 931
F.2d 1472, 1478 n. 8 (l1th Cir. 1991); Morley Music Co v. Cant 'lIne., 777 F. Supp. 1579, 1580,
1580 (S.D. Fla. 1991). Finally, in their opposition to this motion, the Studios advance yet
another theory, this time claiming that Mr. Titov is actually one of.'guiding spirits" of
Hotfile and that the Studios would have sued the other. "guiding spirits" if not for
"procedural challenges." POTMSJ LA. This theory, like those that preceded it, fails to support
a claim against Mr. Titov as a matter of law.

II.

UNDISPUTED FACTS WARRANT SUMMARY JUDGMENT FOR MR. TITOV
Plaintiffs do not dispute the following facts: Hotfile evolved out of a business

partnership between Hotfile's other shareholders that did not involve Mr. Titov, PCFTMSJ 1;
Mr. Titov does not have, and has never had, any ownership interest in that other business
partnership,_, which provides the personnel who work on Hotfile's operations,
PCFTMSJ 2; start-up capital for Hotfile was provided by Hotfile's other shareholders, not by Mr.
Titov, PCFTMSJ 3; Mr. Titov did not come up with the idea to create Hotfile, PCFTMSJ 4; Mr.
Titov is a minority and the smallest shareholder of Hotfile, PCFTMSJ 5; Mr. Titov did not
design the Affiliate program's payment criteria, PCFTMSJ 8; and Mr. Titov did not pay Hotfile's
uploading users, PCFTMSJ 12.1 Each of these undisputed facts is material and directly contrary
to the notion that Mr. Titov was the "moving, active, conscious force who caused" the alleged
1 Plaintiffs also do not dispute Facts 14 and IS related to the question of personal jurisdiction,
which is discussed at pp. 9-10, infra.

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CASE NO. ll-CIV-20427-WILLIAMSITURNOFF

infringement in this case or that he has a "dominant influence" on and has "the capacity to
control the acts" of Hotfile. See Chanel, Inc., 931 F.2d at 1478 n. 8; Morley Music Co., 777 F.
Supp. at 1580. These facts warrant summary judgment for Mr. Titov. 2

III.

PLAINTIFFS SEEK TO ALTER THE "GUIDING SPIRIT" STANDARD
Having found no support for these alleged facts, the Studios now claim for the first time

that the company actually h a _ "guiding spirits" - Mr. Titov and the othe. Hotfile
shareholders. POTMSJ at 5. This new argument - never before asserted- is a transparent
attempt to explain away the Studios' obvious failure of proof with respect to Mr. Titov. 3
The Studios' altered strategy has forced them to try to advocate for a change in the
applicable legal standard. A year ago, in opposing defendants' motion to dismiss, Plaintiffs
represented to the Court that there are two standards for personal liability and that the first
requires personal participation akin to being a guiding spirit: "Under the first, 'the officer to be
held personally liable must have some direct, personal participation in the tort, as where the
defendant was the 'guiding spirit' behind the wrongful conduct... or the 'central figure' in the
Plaintiffs improperly ask the Court to exclude deposition testimony of Messrs.
_
on grounds that such testimony is hearsay. PCFTMSJ 6. This objection cOlltr2tdlC
long-settled law permitting the use of deposition testimony on summary judgment. See, e.g.,
Vondriska v. Cugno, 368 Fed. Appx. 7, 2010 WL 395628, *9 (l1th Cir. Feb. 4, 2010); Woynar v.
Chitwood, No. 6:10-cv-1458-0rl-28GJK, 2012 WL 442986, at *1 (M.D. Fla. Feb. 10,2012);
Comprehensive Care Corp. v. Katzman, No. 8:10-CV-942-T-27TGW, 20ll WL 2960916, at
*4 (M.D.F1a. July 21, 2011); Gulf USA Corp. v. Federal Ins. Co., 259 F.3d 1049, 1056 (9th Cir.
2001). In any
even if Rule 32
on summary judgment, it would be no prohibition
here, as Messrs.
live outside of the U.S. in Sofia, Bulgaria, thus their
potential absence at
speculative) would not be "procured" by Mr. Titov.
See Kyeame v. Buchheit, No.1 :07-cv-1239, 2011 WL 4949220, at *2 (M.D. Pa. Oct. 18,2011)
("'[p]rocured' for purposes of Rule 32(a)(4)(B) means that 'a party has collusively instigated or
induced a witness to remove ... herself from being amenable to testifY at trial; if a witness
"resides outside of the United States, and [offering party] did not deliberately arrange her
absence," the offering party has not "procured" the witness' absence).
3 In response to the obvious question - why didn't you name the other. putative "guiding
spirits" as defendants - the Studios assert that "procedural challenges" and potential disruption
of the schedule pr~ so. POTMSJ at 5. The Studios, however, have
known of Messrs. _ _ since nearly the outset of the case, as they were
disclosed in Hotfile's initial disclosures and in response to the Studios' initial set of
interrogatories, which were served on the very first day on which discovery could be served.
Thamkul Ex. 8 at 3, Ex. 9. Moreover, the Studios appeared before this Court just two months
see,ki'r19 to extend the case schedule. The Studios'
is not credible.
2

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CASE NO. 11-CIV-20427-WILLIAMS/TURNOFF

challenged corporate activity. '" D.E. # 52 at 18. Now, Plaintiffs would change the first test to
require only that defendant "personally participates in the activity." POTMSJ at 1. This
truncated standard is not the law and, if adopted, would open up liability to any corporate
employee who "participates" in whatever "activity" is challenged by the Plaintiff. They even go
so far as to claim that Titov's role as "head technologist" is by itself enough to "establish Titov's
personal liability." Id. at 7. This would expose every technical employee in any internet
company to potential liability.
While it may be possible for there to be more than one "guiding spirit," the Studios' three
supposedly "comparable" cases - and the only cases the Studios rely on that involve secondary
liability claims in the internet context - each involved claims against one individual defendant
who - unlike Mr. Titov -dominated an entity. Arista Records LLC v. Lime Orp LLC, 784 F.
Supp. 2d 398, 438 (SD.N.Y. 2011) (defendant was the CEO and sole director of the defendant
company, "ran" the company, was the "ultimate decisionmaker" of the company, had to approve
"any major strategic and design decision," had "veto" power and "conceived of' the business);

Arista Records LLC v. Usenet.com, Inc., 633 F. Supp. 2d 124, 158 (S.D.N.Y. 2009) (holding
individual defendant personally liable where he was sole shareholder and director of internet
business, had a "ubiquitous role" in the company's activities, was responsible for the "overall
strategic vision" of the company, and ultimately had no employees); Columbia Pictures Indus.,

Inc. v. Fung, No. CV 06-5578 SVW (JCX), 2009 WL 6355911, at *2 (C.D. Cal. Dec. 21, 2009)
("Fung") (holding defendant liable where he ran websites essentially by himself).4 The other
cases on which Plaintiffs rely are all inapposite as the defendants in those cases were themselves
the direct infringers. See Foreign Imp. Prod and Pub. Inc. v. Orupo Indus. Hotelero S.A., No.
07-22066-CIV, 2008 WL 4724495, *7 (S.D. Fla. 2008) (defendants posted infringing material on
website advertising their nightclub); Us. Media Corp., Inc. v. Edde Entm 't, Inc., No. 94 Civ.
4849 (MBM) (MHMD), 1996 WL 520901, *5 (S.D.N.Y. Sept. 12, 1996); (executive officer
personally selected the infringing films); Columbia Pictures, Inc. v. Redd Horne, 749 F.2d 154
(3d Cir. 1984) (defendant responsible for "selection, distribution and sale" of the infringing

As Defendants have argued elsewhere, these cases are, in fact, not comparable to Hotfile for a
whole host of reasons, as they all involved defendants who ran peer-to-peer websites with no
purpose other than to facilitate the downloading of infringing material and which took no steps
whatsoever to combat infringement. See DOPMSJ at V.B.3. Hotfile is the polar opposite of
such companies. (ld.)
4

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material); Pickwick Music Corp. v. Record Prods. Inc., 292 F. Supp. 39 (S.D.N.Y. 1968)
(defendants recorded, pressed and sold album containing infringing songs).5
IV.

PLAINTIFFS STRAW-MAN ARGUMENTS ABOUT THE DMCA LACK MERIT
Plaintiffs try to erect a straw-man by claiming that Mr. Titov "applies the wrong law"

because he includes a discussion of cases applying the DMCA. POTMSJ at 14. This is simply
not true. Mr. Titov's motion discusses and applies the common law of vicarious liability.6 See
TMSJ at 13-16. As noted above, that analysis requires proof that the individual has "a dominant
influence in a corporation" and "the capacity to control the acts of that corporation .... " Morley

5 See also Microsoft Corp. v. Md Micro.com, Inc., No. Civ. JFM-01-3797, 2003 WL 21805213,
at *4 (D. Md. July 15,2003) (one defendant personally sold counterfeit product to undercover
investigator and other defendant ran "day to day" counterfeit operations); Johnson & Johnson
Consumer Cos., Inc. v. Aini, 540 F. Supp. 2d 374 (E.D.N.Y. 2008) (one defendant was president,
shareholder and only full time employee of one direct infringer, another defendant was the
"eminence behind" the both direct infringers, and the third defendant was the buyer of
counterfeit goods); Logicom Inclusive, Inc. v. WP. Stewart & Co., No. 04 Civ. 0604(CSH) 2004
WL 1781009, *18 (S.D.N.Y. Aug. 10,2004) (defendants directed contractor to make
unauthorized derivative works of plaintiffs' software program). In Warner Bros.-Seven Arts, Inc.
v. Kalantzakis, 326 F. Supp. 80, 82 (S.D. Tex. 1971), the defendant was not the direct infringer,
but that case is distinguishable as the defendant - in contrast to Mr. Titov - owned 85% of the
company, controlled the daily activities of the company, and "utilized [the company] for his
personal benefit." Another case on which Plaintiffs rely, SUp-N -Slide Records, Inc. v. TVT
Records, LLC, No. 05-21113-CIV-TORRES, 2007 WL 473273 (S.D. Fla. Feb. 8,2007), contains
no discussion or analysis of the facts other than to say that the defendants' roles are a question
for jury. Id. at *II. Thus, it does not help Plaintiffs.
6 Mr. Titov referred to DMCA cases for illustrative purposes because the DMCA provides the
backdrop to this case - indeed, it is the subject of cross-motions for summary judgment that are
currently pending. Thus, that discussion was entirely appropriate. Plaintiffs are correct - and
Mr. Titov does not assert otherwise - that the cases to address 17 U.S.c. § 512(c)(l)(B) have
held that it imposes a higher standard than the common law vicarious liability standard. See
UMG Recordings, Inc. v. Shelter Capital Partners LLC, 667 F3d 1022, 1043-1045 (9th Cir.
2011); Viacom Int'IInc. v. You Tube, Inc., 718 F. Supp. 2d 514,527 (S.D.N.Y. 2010; Capitol
Records, Inc. v. MP3Tunes, LLC, No. 07 Civ. 9931 (WHP), 2011 WL 5104616, at *14 (S.D.N.Y.
Oct. 25, 2011); Hendrickson v. eBay, Inc., 165 F. Supp. 2d 1082, 1093 (C.D. Cal. 2009; CoStar
Grp.lnc. v. LoopNet, 164 F. Supp. 2d 688, 704 (D. Md. 2001). Indeed, there is now nearunanimity of opinion from the courts on this point, which stands to reason since a different
interpretation would be nonsensical and contrary to the intent of the DMCA. See UMG
Recordings, Inc., 667 F3d at 1043-1045. While Plaintiffs turn around and claim that they "do
not agree" with these cases, Plaintiffs do not cite a single case addressing the DMCA to support
their disagreement but instead rely on a case interpreting mail and wire fraud statutes. See
POTMSJ at 17, n. 7 (citing to Neder v. United States, 527 U.S. 1 (1999».

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Music Co., 777 F. Supp. at 1582. The evidence as to Mr. Titov does not come close to satisfying

this standard. TMS] at 13-17; DOPMS] at 34-40.
In fact, it is Plaintiffs who cite inapplicable law. Plaintiffs cite cases addressing whether
a service provider is vicariously liable for infringements by users of its systems rather than cases
addressing whether an individual officer is vicariously liable for the acts of the service provider.
(See Opp. at 15-16.) And the Studios do not even get that law right. Where

as here - a web

host cannot practicably determine what on their systems is infringing, the "practical ability"
element of vicarious liability is lacking.7 See Perfect 10 v. Amazon. com, Inc., 508 F.3d 1146,
1173 (9th Cir. 2007). See also DOPMS] at 32-34.
Plaintiffs' "financial benefit" argument also lacks merit. Plaintiffs claim that Mr. Titov
"benefitted financially as a consequence of Hotfile's infringement" because he has an ownership
interest in Hotfile. POTMS] at 14. This is inadequate as a matter oflaw. See Netbula, LLC v.
Chordiant Software, Inc., No. C 08-00019 ]W, 2009 WL 750201, at *2-3 (N.D. Cal. March 20,

2009). Furthermore, the evidence has not borne out the Studios' oft-repeated but inaccurate
refrain that Hotfile is "used overwhelmingly for infringement."g POTMS] at 15; DRSF 16.d.
The evidence shows that Hotfile is used predominantly for storage, the most popular files on
Hotfile are not infringing, and users convert to Premium accounts at a higher rate when
downloading noninfringing works. DRSF 24, 28, 30, 32. As the evidence falls far short of
establishing the requisite financial benefit (including its causation requirement) with respect to
Hotfile -it is all the more inadequate as to Mr. Titov. See, e.g., Ellison v. Robertson, 357 F.3d
1072,1079 (9th Cir. 2004). See also UMG, 667 F.3d at 1046-1047 (affirming dismissal of
secondary infringement claims against investors who did not have controlling shares).

V.

PLAINTIFFS' FACTUAL "DISPUTES" ARE UNSUPPORTED
Having concocted a new theory of liability based on a misstated legal standard, the

Plaintiffs then go on to engage in a wholesale revision of the factual record. Plaintiffs seem to
believe that if they list enough "facts" and repeat words such as "rampant," "notorious" and

7 Plaintiffs' try to distinguish Amazon because it concerned "third party websites," but this is a
false distinction. POTMS] at 17 n. 6. The question of "control" here and in Amazon relates to
materials uploaded to the internet by third parties. The absence of "control" in both cases is clear.
8 Nor does the evidence support the claim - immaterial in any event - that "users have confirmed
that they bought premium subscriptions specifically to download copyright infringing content."
See DRSF 16.e-e.iii.

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"overwhelming," the Court will deny Mr. Titov's motion. But a close look at the evidence
reveals that the Studios' purported "disputes" with Mr. Titov's material facts are either based on
gross distortions of the factual record or are simply immaterial (or both). Specifically:

Mr. Titov did not make the decision to implement the Affiliate program (TSUF 7).
Plaintiffs ignore the key evidence on this issue. As they amnn,

.11·
Mr. Titov has not implemented technical features to frustrate copyright owner
enforcement efforts (TSUF 9.) Plaintiffs do not dispute that Hotfile "accommodates and does
not interfere with standard technical measures." PCFDMSJ 24. Plaintiffs do not dispute that
Hotfile implemented hash-blocking, SRAs and digital fingerprinting. TSUF 9; DSUF II; DRSF
34. They instead base their "dispute" on the timing of Hotfile's adoption of these measures and
on Hotfile's recordkeeping. These are specious arguments, as defendants have explained. DRSF
2, 9.a.iv., 16.j.i.-.iv. Moreover, the evidence does not tie Mr. Titov to these issues beyond vague
assertions that he "knew" how Hotfile's system operated. PCFTMSJ 9; DRSF 22.f.1.
Plaintiffs also assert that Mr. Titov is personally liable because he " w r o t e _ of
the source code ... that controls the Hotfile site." POTMSJ at 8. This is an exaggeration and
immaterial in any event. While Mr. Titov wrote some of the source code for Hotfile's storage
and delivery technology, the testimony cited by the Studios states that the percentage is between
and is smaller when you take into account code that Mr. Titov developed prior to

If this were sufficient to create personal liability, then every employee in a company's
accounting department would presumably be liable for the company's acts.

9

6

FILED UNDER SEAL

CASE NO. II-CIV-20427-WILLIAMS/TURNOFF

Hotfile's conception. DRSF 22a.i. The Studios neglect to mention that Mr. Titov did not
participate in the design of the Hotfile website. TSUF II; DRSF 22.a.i, 22a.i. In any event, if
writing source code were enough to make one a "guiding spirit," thousands of engineers at
technology companies would be personally liable for the acts of their employers. This is this is
not the law. See Escude Cruz v. Ortho Pharm. Corp., 619 F.2d 902, 907 (1st Cir. 1980)
("[MJerely being an officer or agent of a corporation does not render one personally liable for a
tortious act of the corporation.").
Mr. Titov did not control Hotfile (TSUF 10.) Plaintiffs' make a futile attempt to
dispute this because Hotfile's. shareholders sometimes make decisions "by consensus."
POTMSJ at 8. Consensus-based decision making contradicts the claim that Mr. Titov is the
"moving, active, conscious force" or "dominant influence" at Hotfile. In any event, the Studios
ignore the other key facts discussed elsewhere that prove Mr. Titov's limited control as well as
his nominal responsibility for the Affiliate program. See TSUF 2, 5, 6, 7, 8, 10, 11. Beyond that,
Plaintiffs' rely on irrelevant evidence and tortured readings of isolated emails. 10
Mr. Titov is not responsible for day-to-day operations of Hotfile; his area of
responsibility is technological matters (TSUF 11.) Plaintiffs seek to "dispute" this fact by
discussing Lemuria and Hotfile Ltd., neither of which supports Plaintiffs' position. In their
Complaint, Plaintiffs asserted as a basis for holding Mr. Titov personally liable that he was
responsible for "[f]ounding Lemuria 'after Hotfile's previous online service provider [WebazillaJ
received a subpoena concerning Hotfile's infringements.''' Compl.

~

45. This, like many other

insinuations in the Complaint, has been proven false by discovery. TSUF 13. Thus, in their

For example, Mr. Titov (like the other shareholders) has a power of attorney for Hotfile, which
is a formality that allows the shareholders to act on the company's behalf. If that were enough to
to untold numbers of
create "guiding spirit" liability, it would improperly expand
individuals at small
who have similar "''''''P,'O
10

argument ignlon~s
, do not have formal job titles, which is not
unusual for a small start-up. Nothing suggests that this email was a reflection ofMr. Titov's
actual role at Hotfile. Plaintiffs seek to draw
unwarranted conclusions based on the fact
no
actual role is more limited than
Plaintiffs' claim. TSUF 5, 6, 10, II.
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FILED UNDER SEAL

CASE NO. II-CIV-20427-WILLIAMSITURNOFF

summary judgment motion, Plaintiffs changed their story, asserting that Mr. Titov formed

21.c.iii.; Titov Opp. Dec!. Ex. D.
Now, Plaintiffs have revised their theory yet again, switching course to claim that "the
reasons for initially founding [Lemuria] are immaterial: because such complaints from copyright
owners now go to Lemuria, rather than a third party, Lemuria (i.e., Titov) ensures that Hotfile's
Internet service, which is essential to its operation, will not be jeopardized by complaints about
copyright infringement." POTMSJ at 10. This theory is equally off base. The evidence shows
that Hotfile's internet service was never jeopardized by complaints - the only thing that
jeopardized it was Webazilla's performance. TSUF 13; DRSF 21.c.iii.; Titov Opp. Dec!. Ex. D.
And even if that were not the case, Plaintiffs' fail to articulate how this could possibly make Mr.
Titov a "guiding spirit" or dominant influence" at Hotfile. lI
Plaintiffs' other arguments about Lemuria similarly lack merit. Plaintiffs insinuate
impropriety by claiming that Lemuria and Hotfile have

Titov Opp. Dec!. Ex. C.
Plaintiffs further argue that "Lemuria's services do not end with webhosting. It is Lemuria (i.e.,
Titov)
POTMSJ at 10. These are precisely the types of services that any web-host (e.g., Amazon)
provides. Titov Opp. Dec!.

'1 58.

In Plaintiffs' view, Webazilla a n d _ would

presumably also be Hotfile's "guiding spirits." Plaintiffs also seek to make an issue of the fact
that Lemuria

This discussion of Lemuria applies equally to Plaintiffs' failed attempt to dispute Mr. Titov's
undisputed fact 13 ("The termination ofWebazilla and founding of Lemuria were unrelated to
Webazilla receiving a subpoena.")
II

8

FILED UNDER SEAL
12

CASE NO. 11-CIV-20427-WILLlAMS/TURNOFF
This does not transform Mr. Titov in to the "guiding spirit" or "dominant

influence" at Hotfile.

VI.

-

MR. TITOV IS NOT SUBJECT TO THE COURT'S JURISDICTION
Plaintiffs do not deny that Mr. Titov, a Russian citizen living in Bulgaria, lacks sufficient

contacts with Florida to subject him to the Court's jurisdiction. Instead they rely solely on a
procedural technicality-arguing that, despite having raised the defense in his first filing with
this Court (as well as in his answer and in many other filings), Mr. Titov was required also to
raise his defense in the Rule 12 motion. While Mr. Titov acknowledges Rule 12(h)(l) and the
authorities cited by Plaintiffs (e.g. Pardazi v. Cullman Med. Or., 896 F. 3d 1313, 1317 (11 th Cir.
1990)) suggesting that Mr. Titov waived the defense, he notes that, unlike the defendant in

Pardazi, he had already reserved that jurisdictional challenge in three earlier filings before

decisions about whether or not to tenninate users, how to handle copyright owner
complaints, and how to hide Hotfile's support for copyright infringement" based on exactly one
email. POTMSJ at 6. That email shows that when asked what to do, Mr. Titov instructed a •
•
employee to terminate a user identified as a repeat infringer - i.e., an entirely appropriate
response. This does not establish personal liability or
of
kind. The other emails
Plaintiffs
on do not renaotel

9

FILED UNDER SEAL

CASE NO. ll-CIV-20427-WILLIAMS/TURNOFF

omitting it from the Rule 12 motion. I4 Plaintiffs were undeniably aware that Mr. Titov
continued to contest jurisdiction after the Rule 12 motion, and his answer left no doubt that he
was continuing to assert the jurisdictional defense. IS Twice, in April 2011 and just a few months
ago in connection with the January 2012 mediation, at Mr. Titov's insistence Plaintiffs agreed
not to attempt to serve him with process while he visited this country for settlement discussions.
Thamkul Ex. 10 (agreeing not "to use their presence on US soil to serve them with process or
otherwise to prejudice them (much like we did when meeting Titov in Florida for our settlement
conference"); and Yeh Ex. 131 (agreeing not to serve Mr. Titov during the January 9 mediation).
Mr. Titov again timely raised the affirmative defense at the first available opportunity in
his summary judgment motion. At the Court's direction, he was required to combine all
available defenses in one motion to be filed only after discovery closed. Under these
circumstances, the Court may justifiably find that Plaintiffs have waived any waiver argument.

See Frietsch v. Refco, Inc., 56 FJd 825,830 (7th Cir. 1995) (finding a waiver of a Rule 12(h)(I)
waiver where Plaintiff had not raised the waiver before asserting it in a motion for
reconsideration); Giotis v. Apollo of the Ozarks, Inc., 800 F .2d 660, 663-64 (7th Cir. 1986)
(finding that "a party can waive a waiver of the defense of personal jurisdiction"). Plaintiffs
have known continuously of Mr. Titov's intent to assert a defense of personal jurisdiction. When
he set out the affirmative defense in his answer, Plaintiffs could have and should have moved to
strike the defense under Rule 12(f). Yet they waited. They first asserted a waiver argument
under Rule 12(h)(I) almost a year after Mr. Titov filed the Rule 12 motion in March 2011.

VII.

CONCLUSION
The facts show Mr. Titov is not the guiding spirit behind Hotfile. The law cannot support

his personal liability. The Court should grant Mr. Titov's motion for summary judgment.

14 See, e.g., Affidavit of Anton Titov, D.E. # 30-1 ("I am appearing in this case specially and 1
reserve my rights at this point to object to personal jurisdiction,"); Defendants' Memorandum of
Law in Opposition to Plaintiffs' "Emergency" Motion For Order Preserving Evidence and
Expediting Discovery," D.E. # 30, p. 1, fn.! ("Defendants reserve ... personal jurisdiction");
Agreed Motion and Memorandum of Law of Defendants Hotfile Corp. and Anton Titov For
Enlargement of Time to Serve Responses to Plaintiffs' Complaint and For a Date By Which The
Parties Shall Conduct the Federal Rule of Civil Procedure 26(f) and Local Rule 16.1 Conference,
D.E. # 32 ("Defendants reserve ... personal jurisdiction").
IS See Answer, Affirmative Defenses, and Defenses of Defendant Anton Titov to Plaintiffs'
Complaint, D.E. # 122, ~7l ("Titov is not subject to personal jurisdiction in this Court ... ")

10

FILED UNDER SEAL
DATED: March 19,2012

CASE NO. 11-CIV-20427-WILLIAMS/TURNOFF
Respectfully submitted,

~~L6f}.~
l~ .

Murm, Esq. Fla. BarNo. 501281
Ifmail: [e-mail]
RASCO KLOCK
283 Catalonia Avenue, Suite 200
Coral Gables, FI33134
Telephone: [phone]
Telecopy: 305.476.7lO2

And

.~

lllC})Jt1l11/y~

oderick M. Thompson, Esq. (admitted pro hac vice)
Email: [e-mail]
Andrew Leibnitz, Esq. (admitted pro hac vice)
Email: [e-mail]
Anthony P. Schoenberg, Esq. (admitted pro hac vice)
Email: [e-mail]
Deepak Gupta, Esq. (admitted pro hac vice)
Email: [e-mail]
Janel Thamkul, Esq. (admitted pro hac vice)
Email: [e-mail]
FARELLA BRAUN + MARTEL LLP
235 Montgomery St.
San Francisco, CA 94104
Telephone: [phone]
Telecopy: 415.954.4480

alentin Gurvits, Esq. (admitted '0 hac vice)
Email: [e-mail]
BOSTON LAW GROUP
825 Beacon Street, Suite 20
Newton Center, MA 02459
Telephone: [phone]
Telecopy: 617.928.1802

Counsel for Defendants Hotflle Corporation
and Anton Titov

11

CASE NO. ll-CIV-20427-WILLIAMS/TURNOFF

FILED UNDER SEAL

CERTIFICATE OF SERVICE
I hereby certify that on March 19, 2012, a true and correct copy of the foregoing
document, was filed conventionally under seal and served on all counsel of record identified
below via e-mail and via FedEx.
Karen R. Thorland, Esq. (admitted pro hac vice)
Senior Content Protection Counsel
Email: Karen [e-mail]
Motion Picture Association of America, Inc.
15301 Ventura Boulevard, Building E
Sherman Oaks, CA 91403-5885
Telephone: [phone]

Karen L. Stetson, Esq., Fla. Bar No.: 742937
ORA Y-ROBINSON, P.A.
Email: [e-mail]
1221 Brickell Avenue
Snite 1600
Miami, FL 33131
Telephone: [phone]
Telecopy: 305.416.6887
Steven B. Fabrizio, Esq. (admitted pro hac vice)
Email: [e-mail]
Duane C. Pozza, Esq. (admitted pro hac vice)
Email: [e-mail]
Luke C. Platzer, Esq. (admitted pro hac vice)
Email: [e-mail]
JENNER AND BLOCK, LLP
1099 New York Avenue, N.W.
Suite 900
Washington, DC 20001
Telephone: [phone]
Telecopy: 202.639.6066

By~Q.~
Jane T. Murm

12