Openmind Solutions, Inc. v. Does 1-2925

Filing 31

Transcript of MOTIONS HEARING held on 4/11/2011, before Judge G. Patrick Murphy. Court Reporter Molly Clayton, Telephone number 618.482.9226. NOTICE: The parties have seven (7) business days to file with the Court a Notice of Intent to Request Redaction of this transcript. If no such Notice is filed, the transcript will be made remotely electronically available to the public without redaction after 90 calendar days. This policy is located on our website at Transcript may be viewed at the court public terminal or purchased through the Court Reporter before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER. Redaction Request due 5/10/2011. Redacted Transcript Deadline set for 5/20/2011. Release of Transcript Restriction set for 7/18/2011. (mnc)

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Case 3:11-cv-00092-GPM -SCW Document 31 Filed 04/19/11 Page 1 of 19 Pg. 1 1 2 3 4 5 6 7 8 IN THE DISTRICT OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF ILLINOIS _________________________________ ) OpenMind Solutions, Inc., ) ) Plaintiff(s), ) ) vs. ) Case No. 11-92-GPM ) DOES 1-2925, Individually, and ) as Representatives of a class, ) ) ) Defendant(s). __________________________________) 9 10 MOTIONS HEARING 11 12 13 14 BE IT REMEMBERED AND CERTIFIED that heretofore on 4/11/2011, the same being one of the regular judicial days in and for the United States District Court for the Southern District of Illinois, Honorable G. Patrick Murphy, United States District Judge, presiding, the following proceedings were recorded by mechanical stenography; transcript produced by computer. 15 16 17 18 APPEARANCES: FOR PLAINTIFF: John L. Steele of Steele Hansmeier PLLC, 161 North Clark Street, Suite 4700 Chicago, IL 60601 and JoDee Favre of Favre Law Office, LLC, 5005 West Main Street, Belleville, IL 62226 19 20 FOR ELECTRONIC FRONTIER FOUNDATION AMICUS: Julie P. Samuels of Electronic Frontier Foundation, 454 Shotwell St, san Francisco, CA 34110 21 22 23 24 25 REPORTED BY: Molly N. Clayton, RPR, Official Reporter for United States District Court, SDIL, 750 Missouri Ave., East St. Louis, Illinois 62201, (618)482-9226, Case 3:11-cv-00092-GPM -SCW Document 31 Filed 04/19/11 Page 2 of 19 Pg. 2 1 INDEX OF WITNESS EXAMINATION DX 2 3 CX R-DX R-CX No witness testimony. 4 INDEX OF EXHIBITS 5 6 EXHIBIT 7 No exhibits identified or received. DESCRIPTION Id'D 8 9 MISCELLANEOUS INDEX 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PAGE No miscellaneous index entries. Rcv'd Case 3:11-cv-00092-GPM -SCW Document 31 Filed 04/19/11 Page 3 of 19 Pg. 3 1 COURTROOM DEPUTY: Openmind Solutions, Inc. versus 2 Doe, Case No. 11-92-GPM, is called for a hearing on all pending 3 motions. 4 Will the parties identify themselves for the record. 5 MR. STEELE: 6 John Steele, S-T-E-E-L-E, on behalf of the plaintiff Openmind Solutions. 7 THE COURT: Mr. Steele, good afternoon. 8 MR. STEELE: 9 MS. FAVRE: JoDee Favre for the plaintiff. 10 THE COURT: JoDee, good to see you again. 11 MS. SAMUELS: Good afternoon, Judge. Julie Samuels, S-A-M-U-E-L-S, on behalf 12 of the Electronic Frontier Foundation, which has filed as 13 amicus curiae. THE COURT: 14 15 16 I think you're the amici I let in the case. The reason I wanted to talk to everyone today about 17 this case is, as you know, the Seventh Circuit has taken a much 18 different approach to class litigation than most of the other 19 circuits have. 20 case here. 21 a John Doe but either we don't know what their name is -- it 22 appears often in the prisoner litigation and it goes something 23 like this: 24 was a member of The Crush -- that's the SWAT team -- he and 25 some other fella, who had a black mustache, grabbed me and And you have got your case, you have got your Ordinarily when you sue John Doe, we know there is He was six, eight, he had on an orange jumpsuit, he Case 3:11-cv-00092-GPM -SCW Document 31 Filed 04/19/11 Page 4 of 19 Pg. 4 1 swung me against the bars of the jail cell. 2 tell you about them now. 3 4 5 6 7 8 that and we use John Doe. Now, about all you know about your potential class is that you know some IP addresses. MR. STEELE: Well, we know the exact IP address that was assigned to them at a certain segment in time by their ISP. THE COURT: 10 MR. STEELE: 12 But I don't know their name. Or we have a child who was assaulted or something like 9 11 That's all I can Right. And of course, the ISP has the record of exactly who that is at that time. THE COURT: So... That tells you who the computer is or who 13 registered. Now, the problem you've got, of course, is -- you 14 have thought about it is the issue of commonality. 15 telling someone, I can't recall precisely the demographics but 16 the largest subscribers to legal pornography are teenage boys 17 and diabetic men over 50. 18 MS. FAVRE: Is that a fact? 19 THE COURT: I think that's right. And I was 20 21 The last I read in one of the blurbs. Now, there is going to be a lot of mothers and fathers 22 who it's going to show up -- of course it's going to be their 23 kids on the computer, which is what happened in that regard to 24 the downloading of music, whatever the kids use to download 25 music, right, and not pay for it with these file sharing Case 3:11-cv-00092-GPM -SCW Document 31 Filed 04/19/11 Page 5 of 19 Pg. 5 1 things. 2 So I have a few questions for you and then I'm going 3 to let you address the issue. 4 here yet. But in a class -- you have the class of defendants? 5 MR. STEELE: 6 THE COURT: 7 8 I'm not going to toss you out of Yes. How would you go about describing your class? MR. STEELE: Well, right now our initial description 9 of the class is the people that were observed downloading or 10 uploading this content at a particular time from our client's 11 content, people that had accounts in which they've -- when they 12 first signed up signed an agreement not to do that exact thing 13 with their ISPs and against any third parties. 14 And you know, as we have in our complaint, we list 15 out -- we're not alleging that they've violated any rule 16 because I think that's -- or violated the law just yet because 17 that is a matter of a fact for the courts to determine after 18 class certification. 19 classes, it would be people that have engaged in this conduct. 20 And then we're going to later on determine -- obviously after 21 class certification, when we get to the evidentiary phases, you 22 know, did they have a license for that content. 23 for instance, someone had taken using BitTorrent -- which is 24 almost exclusively used to steal content, I think that's pretty 25 common knowledge based on the studies we have. But as far as who the prospective, if any Because if, But they also Case 3:11-cv-00092-GPM -SCW Document 31 Filed 04/19/11 Page 6 of 19 Pg. 6 1 happen to have an account with our client and so I just felt 2 like downloading it this way. 3 a scenario. 4 copyright infringement. 5 later. 6 I'm just trying to come up with Then they would not obviously have committed THE COURT: So that's the question that would come Aren't you really putting the cart before 7 the horse? 8 did it -- but what would you do about Mrs. Jones' 51-year-old 9 diabetic husband, who when she is not around, gets on her 10 11 Certainly if you can say this person on this time computer and watches pornography? MR. STEELE: Well, we're not claiming that every 12 single person who happened to own that account is going to be 13 the person that's eventually part of the class. 14 do our discovery investigation. 15 that they, you know, were or not the ones, that they, for 16 instance, the husband, then that would be the person -- 17 THE COURT: That's why we I mean if a person can show They don't have to show anything. And therein lies the rub. You've 18 sued them. What you described 19 really is a case where we are going to have to try every one of 20 these cases one at a time. 21 help us in this case, in a case like this. 22 you have a class of defendants, because what you have done is 23 really you have filed a case -- and certainly on an individual 24 case you could file a case against, say Mrs. Brown is licensed 25 and you could do a little investigation and see that she lives And the class device really doesn't Particularly where Case 3:11-cv-00092-GPM -SCW Document 31 Filed 04/19/11 Page 7 of 19 Pg. 7 1 by herself. 2 this for these reasons and she downloaded our software. 3 may be able to say then -- raise the defense, well, that my 4 teenage kid was here and I certainly never authorized him to do 5 this, correct? 6 7 And say, well, on information and belief I think She So how does the class device as you see it work in this situation? MR. STEELE: 8 Well, first just to separate and briefly 9 respond to that question, I mean we're still saying that the 10 person who has an account that's promised, you know, in our 11 agreement with the ISPs and whatnot against third parties not 12 to do that, they're still vicariously liable. 13 Internet -THE COURT: 14 15 Who says they're vicariously liable? In other words -- 16 17 If you set up an MR. STEELE: Well, we are alleging that they're liable. THE COURT: 18 You can't allege a legal theory. You have 19 to say is there some law that would say that? 20 is this a statutory claim that you are asserting or a contract 21 claim. 22 MR. STEELE: In other words, Well, no, we're asserting under a 23 copyright infringement and everybody in the process. So it's, 24 you know, just like the getaway driver drives a car, they're 25 just as responsible. So if someone opens up an account, they Case 3:11-cv-00092-GPM -SCW Document 31 Filed 04/19/11 Page 8 of 19 Pg. 8 1 can't say, hey, that's not my problem, it was my husband. 2 Well, no, it's your problem because you were part of the 3 infringing activity. 4 THE COURT: Everyone, everything -There is no such thing as negligent 5 infringement, though, under the copyright. 6 copyrighted material or whatever it may be and, without my 7 authority or without my knowledge, someone illegally makes a 8 copy of that and even sells it, I'm not strictly liable for 9 that. 10 MR. STEELE: No. If I have some But what we're saying is that you 11 are liable because you -- it's not about negligence, it is 12 about when you create an account, you have to click on a box 13 and you have to say certain things like I won't allow this to 14 happen. 15 this account. 16 know, just leave a loaded handgun running around and say, well, 17 I knew what would happen in East St. Louis, I knew what would 18 happen, but you know what, I don't care, whatever. 19 I'm taking a proactive guarantee, that's why you get And when you thus break it -- you can't, you I mean but to step back and answer your larger 20 question that I didn't get to and that is about the class 21 action, you know, framework. 22 THE COURT: 23 24 25 You know, this the -- Who would be the class rep in such a case as this for the -MR. STEELE: Well, in defendant class actions, the rep is appointed, is chosen. You know, we suggest one, our rep. Case 3:11-cv-00092-GPM -SCW Document 31 Filed 04/19/11 Page 9 of 19 Pg. 9 1 The Judge has to, you know, obviously determine if that's 2 appropriate class representative based on various factors. 3 in defendant class actions, although much less common than 4 plaintiff class actions, have certainly gone on for the last 5 150 years. THE COURT: 6 I understand that. And I'm just saying what 7 would be looking for in an adequate class rep in a case like 8 this? 9 MR. STEELE: Well, first of all, it would be someone 10 who would wish to, you know, be aggressively fighting and 11 addressing this issues raised in court -- 12 THE COURT: Someone who is in a situation, for 13 instance, where they would have a defense and say, well, my 14 husband did it without my consent, or knowledge or my teenage 15 son did it without my consent, or my teenage son's friends did 16 it without my consent or knowledge. 17 defendants uniformly across the class? 18 MR. STEELE: And then they assert these It's possible but we don't have that 19 occurring nearly as much as in -- I've personally dealt with a 20 lot of, you know, defendants in these kind of actions. 21 most part I hear, yeah, I did it, I want to settle or -- 22 especially after the release is there, they are like, well, you 23 know, I had to make a decision whether to a hire an attorney, 24 you know, this or that. 25 get releases for any other activity they may have done with our For the And they want to make sure that they Case 3:11-cv-00092-GPM -SCW Document 31 Filed 04/19/11 Page 10 of 19 Pg. 10 1 other clients and so on. 2 But the issue with the class action process is, you 3 know, this is to designed for cases -- and I'm not preaching to 4 your Honor, I know you are aware of Rule 23 and how it works 5 and all. 6 litigation because the infringer is not committing a massive 7 tort against a particular person. 8 asbestos litigation where, you know, asbestos, if they would 9 like to sue individually, sure, they may have no money and they But this is a very perfect vessel for this type of It's kind of like, you know, 10 may not be able to, oh, well. The cost of litigation to our 11 client, who is getting their stuff ripped off is prohibitive if 12 they were to sue 3,000 people individually. 13 room -- well, every advocate in this room I think knows that. 14 And which is why and they're essentially not being allowed to 15 include in class action would essentially be a total victory 16 for the infringers. 17 THE COURT: Everyone in this So the idea is that -In this circuit that's routinely what 18 happens where someone -- we're told that, you know, you are 19 going to have to prove this as individual reliance. 20 that JoDee could write us a quick law review article on that 21 very problem in these cases where they say, you know, it sounds 22 pretty actionable except how do you prove that each individual 23 plaintiff in this case relied upon the fraudulent statements -- 24 MR. STEELE: 25 THE COURT: I'll bet Sure. -- of the defendant. And they say, well, Case 3:11-cv-00092-GPM -SCW Document 31 Filed 04/19/11 Page 11 of 19 Pg. 11 1 you can't. MR. STEELE: 2 But we are almost putting the cart before 3 the horse a little bit because all we are doing now is getting 4 the discovery of these people. 5 certification. 6 prove our case. 7 people are specifically but yet you are expected to put on your 8 case. We're not dealing with class We're not dealing with how are we going to And to say, well, you don't know yet who these That's not where we are at. 9 I would respectfully suggest that all we're asking for 10 here is to get the information, which is very time sensitive. 11 Most of these ISPs they drop these people's names within months 12 or certainly within six months or eight months depending on how 13 big they are. 14 What we know is someone's name and address, that's all we know. 15 We are not asking for bank account records or anything truly 16 private. 17 parties. So we need go and find who these people are now. This is stuff they have already told to third THE COURT: 18 But when you do that, though, there's a 19 very powerful presumption in the federal system that if you 20 invoke the federal courts, if you are here, it's presumably 21 open. 22 records, or someone's recipe for Coca-Cola, or how to make a 23 bomb, all this becomes public information. 24 25 So unless you are talking about the -- someone's medical MR. STEELE: So... Well, the subpoena responses that we get we take great effort -- for instance, our firm knows, for Case 3:11-cv-00092-GPM -SCW Document 31 Filed 04/19/11 Page 12 of 19 Pg. 12 1 instance, a name and address and so on. 2 know who they are. 3 anyone. 4 you know, let's discuss this case. 5 Our own clients don't We don't share this information with We simply first reach out and say, look, would you -- But here's the important thing: We're just asking for 6 these people's basic, non-private information. Stuff that they 7 have told ISP, so they told third parties who they are. 8 know all this information about them. 9 person at this ISP did this, this, this and this. And we We say we know this We just need 10 to know from the ISP who that was. 11 fishing expedition, we are not saying: 12 people that you think were doing this at this time. 13 saying this specific person we need information. 14 And we're not going on a Comcast, name all the We are Now, if we don't have -- if we can't prove get our -- 15 they're class certified or we can't prove the facts that we 16 allege -- and essentially this is, you know, what we are here 17 on, it's not worded as a motion to dismiss but essentially, for 18 all intents and purposes, what should be treated as such. 19 mean we have to have some benefit of our complaint being 20 treated as our allegations are true. 21 prove, at least I would respectfully suggest -- 22 THE COURT: I I mean we don't have to You don't have to prove your case yet. 23 The problem you have got is in almost every other instance you 24 have a defendant and then you get to do discovery. 25 are wanting to do discovery to find a defendant. Here you Case 3:11-cv-00092-GPM -SCW Document 31 Filed 04/19/11 Page 13 of 19 Pg. 13 1 MR. STEELE: Well, we already know the defendant. And 2 like you were mentioning I think in the beginning about the 3 description of the John Doe cases where you had a 6'1" and so 4 on -- 5 6 7 THE COURT: If you know defendant, why is it that you wish to do discovery to find out who the defendant is? MR. STEELE: Well, we know -- like the person that you 8 cited, he didn't know their name. But he knew all this 9 describing information about him; 6'1", orange whatever. 10 we know a lot of description information too. 11 one person and it's that person who has the account. 12 Well, what we are asking for is this -- 13 THE COURT: 14 MR. STEELE: 15 THE COURT: 17 MR. STEELE: And so Why haven't you sued that person? How could we -- we don't know where to send the complaint to. 16 And it only fits We don't have their address. But you know the person. We know all the descriptive information 18 about them as far as, you know, their IP address at this exact 19 time that they were using. 20 information because they've given all their information, 21 personal information, like name, address, and e-mail address 22 to, you know, their ISP. 23 type of technology that police officers use in going after 24 pedophiles. 25 isn't the first time this has ever been used where agents use And that's an amazing piece of The ISP -- and this is the same exact I mean this is not kind of crazy -- you know, this Case 3:11-cv-00092-GPM -SCW Document 31 Filed 04/19/11 Page 14 of 19 Pg. 14 1 software and say, okay, we just watched this guy, this IP 2 address, send out and receive this bad information, let's find 3 out who that is because we have got to go punish them. 4 that's essentially what we're doing here. THE COURT: 5 All right. And Now, for the amici, I'll let 6 you intervene in this case because this is such -- ordinarily 7 the trial court would approve and we don't fool with amici but 8 if you can at least have a purported class of those persons who 9 you know not, I don't see how I could make things any worse by 10 letting an amici come and speak. 11 12 13 14 15 So who are you and what is your real point in all this? MS. SAMUELS: Sure. Well, your Honor, thank you for letting us speak. I am a staff attorney at the Electronic Frontier 16 Foundation, which is a nonprofit organization in San Francisco. 17 We do all kinds of digital civil liberties case work. 18 we've been involved in many cases sort of like this but without 19 the class action piece, these mass copyright litigations that 20 have been taking place all over the country. 21 And In fact, just in the past couple weeks a bunch of 22 defendants have been severed based on improper joinder in the 23 Northern District in a similar type -- 24 THE COURT: 25 MS. SAMUELS: Northern District of what? Of Illinois. I'm sorry. In Illinois. Case 3:11-cv-00092-GPM -SCW Document 31 Filed 04/19/11 Page 15 of 19 Pg. 15 1 2 THE COURT: You had named defendants who had been joined but allegedly -MS. SAMUELS: 3 No, it was styled as a similar complaint 4 against hundred or thousands of anonymous Doe defendants, but 5 without the class action vehicle, just as a joinder case. 6 And there's been a trend across the country -- and 7 we've gotten involved in many of these cases as amici at this 8 level or this point in the litigation. THE COURT: 9 10 What is your foundation's real concern? What is the problem? MS. SAMUELS: 11 Our biggest concern is we're worried 12 about the due process implications to these individuals. 13 That's frankly the kind of stuff we worry about. THE COURT: 14 By the way, can either one of you -- is my 15 understanding of the demographics correct, have you studied 16 that? 17 MR. STEELE: 18 MS. FAVRE: No, but... 19 THE COURT: You have or haven't? 20 MR. STEELE: I haven't studded the demographics. 21 MS. FAVRE: But I did want to interject something, No. 22 John's had a lot of these cases, a lot of these Doe defendants. 23 And I realize we had that problem immediately in this case 24 where the mother wrote the letter. 25 overall -- But it hasn't been an Case 3:11-cv-00092-GPM -SCW Document 31 Filed 04/19/11 Page 16 of 19 Pg. 16 1 THE COURT: Right. 2 MS. FAVRE: -- issue. It hasn't. And I mean they 3 have had thousands of these Doe defendants. 4 from experience, you know, if you look at his track record of 5 how this happens when he actually gets the subpoena out there, 6 he gets a very good response. 7 saying it wasn't me. 8 MS. SAMUELS: 9 MR. STEELE: So I don't think He doesn't get a lot of people If I may -If I could address -- if you are worried 10 about due process, you can continue but I can address the 11 procedure. 12 MS. SAMUELS: 13 THE COURT: Can I just -- Due process is something we are generalist 14 about here. Like tomorrow we will try a prisoner case. 15 know, last week we'll try -- we'll have class questions. 16 we don't even purport to be experts in all facets of life, but 17 we are generally familiar with the concept of due process 18 because that's, after all, we're an Article 3 court and the 19 Fourteenth Amendment and the Fifth Amendment is not new to us. 20 So I can understand all that. 21 MS. SAMUELS: 22 THE COURT: And If I can -- I'm sorry. Here's what I'm going to give both of you 23 a chance to do: 24 first of all read the Seventh Circuit precedent. 25 judge. Okay. You I want -- and you can weigh in on this, but I am a trial Our Seventh Circuit has written a lot on the Case 3:11-cv-00092-GPM -SCW Document 31 Filed 04/19/11 Page 17 of 19 Pg. 17 1 subject of class litigation. 2 thing. 3 Commonality is a very, very big You have both got two weeks to weigh in on how it's 4 feasible and helpful to proceed with this case under Rule 23. 5 I'll read it carefully. 6 read that. Now, nobody is doing anything until I But I want to read it first. 7 MS. SAMUELS: 8 question about some logistics. 9 10 I do know that even after you stayed discovery, some discovery had gone out and some names of -MR. STEELE: 11 12 Your Honor, if I may ask just a quick Absolutely not true, your Honor -- and I don't mean to interrupt. 13 MS. SAMUELS: I'm sorry, I don't mean inappropriately 14 but stuff had probably issued and maybe you had gotten those 15 names. 16 THE COURT: I just said nothing is going to happen for 17 14 days, until I get your briefs. 18 we are going to proceed. 19 Now, as you know, no one almost ever, ever goes behind 20 my orders. 21 people will. 22 And then I will tell you how And it just never happens. And I don't ever expect It just doesn't happen around here. MS. SAMUELS: I'm sorry, I didn't mean to interfere 23 that Mr. Steele was going behind your orders. I was simply 24 saying that I think there's, you know, in the day-to-day 25 business, subpoenas had gone out before that -- that order Case 3:11-cv-00092-GPM -SCW Document 31 Filed 04/19/11 Page 18 of 19 Pg. 18 1 because they were permitted. 2 moved maybe before that order. 3 record, but I didn't mean to infer -- 4 5 THE COURT: And you know, stuff has been So I just wanted to clarify the If it happens we will take a look at it. But he is not in a position to make his initial disclosures. 6 MS. SAMUELS: 7 THE COURT: Sure. There are a number of things here that 8 this type of litigation -- you might say it -- I don't want to 9 say it unnecessarily complicates things. 10 little out of joint. 11 Everything is just a make my ruling. 12 But I want to read everything and then I Now, the only thing I ask is both of you both, besides 13 you as an amici, you are here, read the Seventh Circuit 14 precedent. 15 context of what you are asking the Court to do. 16 will read it. 17 You, too, John. Read it and then place it in the And then I Now, if the Court were of a mind to certify this 18 class, it is going to Chicago immediately. 19 you or ordering you to do anything that you wouldn't -- you are 20 not going to have to do anyway. 21 So I'm not asking And the questions that their honors on the Court of 22 Appeal are going to ask you are going to be much more 23 challenging and difficult than questions I've put here today. 24 25 So I will read what you have in 14 days and we will get back here. Case 3:11-cv-00092-GPM -SCW Document 31 Filed 04/19/11 Page 19 of 19 Pg. 19 1 Everybody have a good day. 2 This court is in recess. 3 MR. STEELE: 4 MS. SAMUELS: Thank you. Thank you. 5 -oOo- 6 REPORTER'S CERTIFICATE 7 I, Molly N. Clayton, RPR, Official Court Reporter for the U.S. District Court, Southern District of Illinois, do hereby certify that I reported with mechanical stenography the proceedings contained in pages 1 - 19; and that the same is a full, true, correct and complete transcript from the record of proceedings in the above-entitled matter. 8 9 10 DATED this 19th day of April, 2011. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 `ÉÄÄç VÄtçàÉÇ ____________________________________ Digitally signed by Molly Clayton DN: cn=Molly Clayton, o=USDC/SDIL, ou=Court Reporter,, c=US Date: 2011.04.19 13:55:32 -05'00'

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