Andersen v. Atlantic Recording Corporation et al

Filing 14

Andersen v. Atlantic Recording Corporation et al

Doc. 14 Att. 4

Page 1

LEXSEE 2006 US DIST LEXIS 20214
Interscope Records, et al., Plaintiffs, vs. Lindsey Duty, Defendant.

No.05-CV-3744-PHX-FJM

UNITED STATES DISTRCT COURT FOR THE DISTRICT OF ARZONA
20(j6 U.S. nist. LEXIS 20214; 79 U.S.p.Q.2n (BNA) 1043
14, 2006, Decided
Owen LLP, Denver, CO; Nadia A Sarkis, Holme Roberts
McDonald Yetwin & Lacy,

April

NOTICE: (*1) NOTFORPUBLICATION

COUNSEL: For Interscope Records, a Californa general partership, Plaintiff: James C Ruh, Holme Roberts
& Owen LLP, Denver, CO; Nadia A Sarkis, Holme Rob-

& Owen, Denver, CO; Ira M Schwart, DeConcėn Phoenix, AZ.

For Sony BMG Music Entertinent, a Delaware general Partership~ Capitol Records Inc., a Delaware corporation, Arsta Records LLC, a Delaware limited liabilty company, Counter Defendants: Ira M Schwart, DeConcw McDonald Vetw & Lacy, Phoenix, AZ.

erts & Owen, Denver, CO; Riiy Kendall Hards, Susan

Moon 0, Fennemore Craig PC, Phoeni, AZ; Ira M
Schwar, DeConcinė McDonald Yetwn &

Lacy, Phoe-

nėx, AZ.

For Sony, BMG Music Entertainent, a Delaware general partership, Arsta Records LLC, a Delaware limted

JUGES: Frededck J. Marone, United States Distrct
Judge.

liabilty company, Plaintiffs: Ray Kendall Hams, Susan

Moon 0, Fennemore Craig PC, Phoenėx, AZ; Ira M Schwart, DeConcėn McDonald Yetwn & Lacy, Phoenėx, AZ.
For Warner Bros. Records, Inc., a Delaware corporation,

OPINION BY: Frededck J. Martone

OPINON
, ORDER

Capitol Records Inc., a Delaware corporation, Virgin

Records Amedca, Inc., a calüorna corporation, Elekta
Entertainent Group Inc., a Delaware corporation, UMG

I
Developments in internet-based technology, including the use of online peer-to-peer networks, have dra-

Recordings Inc., a Delaware corporation, Plaintiffs:

James C Rub, Holme Roberts & Owen LLP, Denver,
CO; Ray Kendall Hams, Susan Moon 0, Fennemore

matically increased the speed and ease with which informtion can be shared worldwide. These networks

Craig PC, Phoenix, AZ; Ira M Schwart, DeConcw
McDonald Yetwin & Lacy, Phoenix, AZ.

have been substantially used for the rapid transfer of copyrghted works, leading to (*3) "ingement on a
gigantic scale," Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 125 S. Ct. 2764, 2782, 162

For Lindsey Duty, Defendant: Sheila Made Heidmler, Macheledt Bales & Heidmller LLP, Mesa, AZ.
For UMG Recordings Inį., a Delaware corporation, (*2) Warner Bros. Records, Inc., a Delaware corporation, Virgin Records Amedca, Inc., a calüorna corporation,
Elekta Entertainent Group Inc., a Delaware corpora~

L. Ed. 2d 781 (2005), and creatig a flur of federal
litigation. Here, plaitiffs-various recording companies ("the Recording Companies")-allege that Lindsay Duty
("Duty") used a peer-to-peer network called Kazaa to

tion, Counter Defendants: James C Riih, Holme Roberts & Owen LLP, Denver, CO; Ira M Schwart, DeConcini McDonald Vetw & Lacy, Phoenix, AZ.

downoad and distrbute copyrghted music in violation of federal law. Duty counterclaims, seekig a declaratory judgment that she did not violate the copyrght laws, and raising state common law tort claims for invasion of pd-

For Interscope Records, a Californa general partership~ Counter Defendant: 'James C Ruh, Holme Roberts &

vacy and abuse of legal process. The cour has before it Duty's motion to dismiss (doc. 8), the Recording Companies' amended opposition (doc. 20), and Duty's reply
(doc. 22); the Recording Companies' motion to dismis_s

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2006 U.S. Dist. LEXIS 20214, *; 79 U.s.P.Q.2D (BNA) 1043

counterclaim (doc. 21), Duty's opposition (doc. 24); and the Recording Companies' reply (doc. 26); and the Re-

1 "A copy of any written instrent which is an

cording Companies' motion to disregard Duty's affdavit, or in the alternative, to treat her reply brief as a motion
for sumry judgment (doc. 25) and Duty's response
(doc. 30).

exhbit to a pleading is a part thereof for all purposes." Fed. R. Giv. P. 10(c). Accordingly, we consider exhibits A and B herein.
(*6) In context, however, the relevance of the two

exhbits is clear. Duty is alleged to have ilegally used
Kazaa to downoad and distrbute varous copyrghted
works. Therefore" based upon the complaint alone, it is

II
Duty moves to dismiss the Recording Companes' copyrght infngement claim pursuant to Rule 12(b)(6),
Fed. R. Civ. P. (*4) ,contending that A) the Recording

clear to the court that exhbit B is an alleged representation of Duty's Kazaa share folder, and tht exhbit A is a

list of some songs that the Recording Companies claim

Companies failed to satisfy the pleading requirement in
Rule 8(a)(2), Fed. R. Civ. P., and B) the Recording

were ilegally downoaded or distributed by Duty through her Kazaa share folder. Moreover, it is clear
from Duty's motion to dismiss that she thoroughly understands the claim against her. Therefore, the complaint

Companies provide no evidence of dissemination. Duty

also moves to dismiss the claim pursuant to Rule 12(b)(7), Fed. R. Civ. P., for the failure to join an indispensable part. We disagree with all thee contentions,
and accordingly deny Duty's motion to dismiss (doc. 8).

A

satisfies the liberal notice pleading standard of Rule 8(a). To the extent that there remains confusion with regard to the exact date or time of the incidences of alleged infringement, that can be clarified durg discovery. 2
2 Moreover, we conclude below that the mere filing of a copyrghted work in a peer-to-peer

Pursuant to Rule 8(a)(2), a plaintiff need only set
fort "a short and plain statement of the claim showing

that the pleader is entitled to relief." "Such a statement must simply give the defendant fair notice of what the plaintiffs claim is and the grounds upon which it rests."
Swierkiewicz v. Sorema N.A., 534 U.s. 506, 512, J22 S. Ct. 992, 998, 152 L. Ed. ,2d 1 (2002) (quotation omitted).

network share folder may constitute distrbution
and therefore inngement. Therefore, the exis-

tence of any of the Recording Companies copyrighted recordings in Duty's share fie as repre-

sented in exhbit B to the complaint may constitute copyrght infrgement. Therefore, additional

"The liberal notice pleading of Rule 8(a) is the starng point of a simplified pleading system, which was adopted to focus litigation on the merits of a claim." Id. (citation omitted).

date or time inormtion may not be necessar to
the Recording Companies' claim.

(*7) B
Duty also argues that "Plaintiffs' allegation that De-

The essential elements of a copyrght infgement
claim are A) plaintiffs ownership of a valid copyright

and (*5) B) defendant's unauthoried copyig of con-

stituent elements of the work that are original. See Feist Publ'ns, Inc. v. Rural Tel. Servo Co., 499 U.S. 340, 361, 111 S. Ct. 1282, 1296, 113 L. Ed. 2d 358 (1991) (citation omitted). The Recording Companies allege that they own
the copyrghts to various songs, and that "Defendant,
without the permssion or consent of

fendant merely made recordings available for distrbution to others fails to state' a copyrght claim" because "there is no liabilty for infrging upon the rėght ōf distrbution uness copies of copyrghted works were actu-

Plaintiffs, has used,

ally disseminated to members .of the public. Duty's Memorandum in Support of her Motion to Dismiss at 3 (emphasis in orėgial). We disagree.
Pursuant to 17 U.S.c. § 106(3), the Owners of a

and contiues to use, an online media distrbution system

to downoad the Copyrghted, Recordings, to distrbute,
the Copyrghted Recordings to the public, and/or to make

the Copyrghted Recordings available for distrbution to others." Complaint at 3.

Attached to the complaint are exhbits A and B. i

The complaint is clear that exhbit A is a list of recordings which are copyrghted by the Recording Companes, and that some of the recordings on exhbit B are
copyrghted by the Recordig Companies. The complaint

faus, however, to explicitly identify the relevance of the two exhbits to ths copyrght infingement action.

copyrght have the "exclusive right()" to "distrbute copies or phonorecords of the copyrghted work to the public by sale or other transfer of ownership, or by rental, lease, or lending." "Distrbute" is not defined under the Copyrėght Act, but the rėght of distribution is synonymous with the right of publication, Ford Motor Co. v. Summit Motor Prod., Inc., 930 F.2d 277,299 (3d Gir. 1991), and "publication" is defined under the Copyrght Act. "Publication" is defined to include "the offering to distrbute copies or phonorecords to a group of persons for purposes of fuer distrbution, public pedormnce, or public display." 17 U.S.c. § 101 (*8) (emphasis added).

Moreover, the Cour of Appeals has stated that "Napster
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2006 U.S. Dist. LEXIS 20214, *; 79 U.S.P.Q.2D (BNA) 1043

(a peer-to-peer fie sharėg company) users who upload file names to the search index for others to copy violate

invasion of privacy in accessing her computer fies and
C) publically identifyig her as a fie-sharer; and D)

plaintiffs' distrbution rights." A & M Records, Inc. v.

Napster, Inc., 239 F.3d 1004, 1014 (9th Cir. 2001). Therefore, the mere presence of copyrghted sound recordings in Duty's share fie may constitute copyright infrgement. Accordingly, Duty's motion to dismiss for failure to state a claim upon which relief can be granted
is denied (doc. 8).3

claiming that the Recording Companies are liable for the abuse of legal process. The Recording Companies move to dismiss each cause of action.

A

3 To be clear, we do not conclude that the mere

presence of copyrghted sound recordigs in
Duty's share fie constitutes copyrght infngement. We have an incomplete understandig of
the Kazaa technology at ths stage, and the ulti-

The Recording Companies sole claim is that Duty commtted copyrght inngement. Duty counterclaims, seeking a declaratory judgment that she did not commt copyrght infrgement. The issue of copyrght infingement wil be decided by ths cour regardless of the declaratory judgment claim uness the pares stipulate to settement, or the Recording Companes move to voluntarėly withdraw their pursuant to Rule 41

complaint and the cour so orders
(a)(2), Fed. R. Civ. P. Therefore,

mate issue of liability is more appropriately considered on a motion for summary judgment where

the pares will have an opportty to fully explain the Kazaa technology, and the means by
which a fie can be made available for public downoad on Kazaa.

(*11) Duty's claim for a declaratory judgment is redundant and unecessary, and the Recording Companies

motion to dismiss it is granted (doc. 21).
B

(*9) C
Duty also argues that the alleged infrngement

would not have been possible without the use of Kazaa,
and therefore the owner of Kazaa, Sharmn Networks,

Duty claim that the Recording Companies are liable for the tort of intrsion upon seclusion. A person is liable for that tort if he "intentionally intrdes, physically or otherwise, upon the solitude or seclusion of another or his prėvate affairs or concerns . . . if the intrsion would
be highly offensive to a reasonable person." Hart v.

Ltd. ("Sharm"), is a necessary and indispensable part
to ths suit. We disagree. The Recording Companies may

have a viable claim against Sharn for direct, contrbutory or vicarėous infrngement. See Metro-Goldwyn-

Mayer Studios Inc., 125 S. Ct. at 2776. Furermore,

followig this action, Duty may have a viable claim
against Sharmn for contrbution. However, the possibil.
ity of related thd-part liabilty does not preclude us

Seven Resorts Inc., 190 Ariz. 272, 279, 947 P.2d 846, 853 (Ct. App. 1997) (citing Restatement (Second) of Torts § 652B (1977)). Therefore, a defendant is liable "only when he has intrded into a private place, or has otherwise invaded a prėvate seclusion that the plaintiff has thrown about his person or affairs." ld. (citig Restatement § 652B cmt. c).

from according complete relief among those already
named as pares, nor does it represent sufficient harm to either Sharmn or Duty to requie joinder. Fed. R. Civ. P. 19(a); see Temple v. Synthes Corp., Ltd., 498 U.S. 5, 7-8, 111 S. Ct. 315, 316,112 L. Ed. 2d 263 (1990) (holding

Duty alleges that the Recording Companes commtted ths tort by "inva(ding) (her) alleged computer."

Counterclaim at 7. More specifically, it appears that Duty claim that the Recording CompalÛes commtted
ths tort by accessing her Kazaa share folder, which is

that joint torteasors are not necessary partes).
Duty argues that to the extent copyright infrge-

reproduced as exhbit (*12) B to the complaint. The

ment took place, it was not caused byher because Kazaa has an automatic upload featue which causes any user to

unowingly distrbute computer fies over the internet. (* 10) To the extent this is tre, it might be a valid deSharman a necessary part. Therefore, Duty's motion to
dismiss for the failure to join an indispensable par is

fense. However, for the reasons stated, it does not make
denied (doc. 8).

Recording Companies argue that Duty fails to state a claim upon which relief can be grnted because the informtion in the share fie is public, and therefore, there is no seclusion. Duty does not dispute this fact; she merely argues that she did not put the sound recordigs in the share fie. She argues that Kazaa did so automatically. However, whether Duty or Kazaa acted, it is undisputed that the share fie is publically available, and

il
Duty counterclaims A) seekig a declaratory judg-

therefore Duty cannot show tht the Recordig Companies intrded upon her prėvate affairs. Accordingly, the

Recording Companes' motion to dismiss Duty's intrsion upon seclusion claim is granted (doc. 21).

ment that she did not commt copyrght infrngement; B) claiming that the Recording Companies are liable for the

C

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2006 U.S. Dist. LEXIS 20214, *; 79 U.S.P.Q.2D (BNA) 1043

Duty claim that the Recording Companies are liable
for the tort of false light for public

ally disclosing that

Duty is a file-sharer by filing ths lawsuit. The Recording Companies move to dismiss ths claim arguing that they are protected by the Noerr-Pennington doctre. The Recording Companies appear to be correct, but we need
not fuher. consider the substance of their argument be-

the Recording Companies' goal in brėging these actions is to scare would-be inngers into complying with federal law, and thereby prevent the networks that allegedly facilitate the alleged infrngement from doing so. It may be an abuse of the legal process for a collection of large
corporate entities to use their substantial financial and

cause Duty failed to respond to it and, pursuant to LRCiv

intellectual capacities to prey upon less capable individuals and unfairly pressure them into settlement. However,
while Duty sets fort general allegations with regard

7.2(i), we perceive the failure to respond as consent to the granting (*13) of the motion with regard to this issue. Accordingly, the Recording Companies' motion to dismiss Duty's false light claim is granted (doc. 21).

(*15) to the Recording Companies' overall strategy, she
sets fort no allegations with regard to such heavy-

handed tactics in ths litigation. Therefore, the Recording

D

Companies' motion to dismiss Duty's abuse of process claim is granted (doc. 21).
IV
The Recording Companies move to disregard Duty's

Duty claims that the Recording Companies are liable for the state law tort of abuse of the legal process, which is defined as "a wilful act in the use of judicial process. . . for an ulterėor purose not proper in the regular conduct of proceedings." Crackel v. Allstate Ins. Co., 208 Ariz. 252, 257, 92 P.3d 882, 887 (Ct. App. 2004). To succeed on the claim, "a plaintiff must show tht the defendant's improper purose was the prėmary motivation for its actious, not merely an incidental motivation." Id. at 259, 92 P.3d at 889. Moreover,

affdavit attached to her reply brief, or in the alternative to convert Duty's reply brief to a motion for sumary judgment. When considerėg a motion to dismiss under Rule 12(b)(6), we accept the plaintiffs factual allegations
as tre. Anderson v. Clow, 89 F.3d 1399, 1403 (9th Cir. 1996). Accordingly, Duty's contradictory assertons of

for abuse of process to occur there must

be use of the process for an imediate
purose other than that for which it was designed and intended. The usual case of

fact in her affdavit are irelevant to the analysis. Moreover, it would be inapproprėate to convert Duty's reply into a motion for sumry judgment because the partes
have not had an opportty to conduct discovery and

flesh out the factual issues that are necessary to the in-

abuse of process is one of some form of extorton, using the process to put pressure upon the other to compel him to pay a different debt or to take some other action or refrain from it.

frgement claim. Furhermore, the facts set fort in the
affdavit would have no effect on our resolution of

Duty's

motion to dismiss pursuant to Rule 12(b)(7). Accordingly, we grant the Recording Companies' motion to disregard Duty's affdavit (doc. 25).

Restatement § 682 cmt. b.

(*16) Y IT IS ORDERED DENYING Duty's motion to .
dismiss (doc. 8).

Here, Duty' claim that this is one case in thousands where the Recording Companies (*14) are suing individual users of peer-to-peer networks such as Kazaa in
an effort to frighten users away from the networks,

IT IS FURTHER ORDERED GRATING the
Recording Companies' motion to dismiss the counterclaims (doc. 21).

thereby puttng the networks out of business. This might be tre. In fact, the Recording Companies state in their
brėefings that "they face a' massive problem of digital Internet" and accordingly they have "suspiracy over the.

IT IS FUTHER ORDERED GRATING the
Recording Companies' motion to disregard Duty's affdavit (doc. 25).

tained and continue to sustain devastatig financial
losses." Recording Companies' Amended Opposition at

For clarity, only the Recording Companies' copyrėght infrgement claims remain.
DATED ths 14th day of April, 2006.
Frederėck 1. Marone

2. It is not, however, an abuse of the legal process to
organe a large-scale legal assault on small-scale cOPYc

rėght ingers that together cause devastatig financial
losses. Moreover, it is not an abuse of

the legal process if

United States District Judge

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Case 2:03-cv-05757-WJM-RJH Document 22

Filed 09/30/2004 Page 1 of 6

UNITED STATES DISTRICT COURT
DISTRICT OF NBWJBRSEY

It
WILLIAM J. MARTINI JUDOE

MARTIN LUTHER KING JR. FEDERAL ĄĄLOG. & u.s. COURTHOUSE
SO WALNU

STREIi, P.O. BOX 419

NEWARK NS 07JOI-0419

[phone]

September 30, 2004

LETTER OPINION

VIA REGULAR MAIL
Michele Scimeca
P.O.

Box 339

Hibernia, NJ 97842

(Pro Se DefendantlCounterclaimant)
Karen A. Confoy, Esq.
Stems &Weinroth, P.C. ,

50 West State St., Suite 1400 Trenton, NJ Ō8607-1298
(Attorney for

Plaintif Sony Music Entertainment Inc., UMG Recordings, Inc., and

Motown Record Company. L.P.)
Re: Sony Music Entertainment Inc. v. Scimeca

Docket No.: 2:03-cv-OS757 (WJM)
Dear Litigants:

This matter comes before the Court on Plaintiffs' Motion to Dismiss Defendant's Civil Procedure 12(b)(6). Defendant Michele Scimeca has fied an opposition and Plaintiffs have filed a reply. For the reasons set forth below, Plaintiffs' motion to dismiss is GRANTED and the Counterclaim Complaint is DISMISSED
Counterclaim Pursuant toFederal Rule of

WITH PREJUDICE.
BACKGROUND
The underlying action is a copyrght infrngement action brought by Plaintiffs alleging copied and distributed copyrghted works of music without Plaintiffs'

that Defendant ilegally

pennission. The action was administratively tenninated on July 13, 2004

due to banptcy

proceedings and then reopened August 23, 2004. Plaintiffs now seek to dismiss Defendant's
counterclaim originally filed on or about February 5~ 2004.

Defendant's counterclaim alleges that Plaintiffs, through the Recording Industr Association of America, have violated the Racketeer Influenced and Corrpt Organizations

L

Case 2:03-cv-05757-WJM-RJH Document 22 Filed 09/30/2004 Page 2 of 6

("RICO"), 18 V.S.C. §§ 1961-68 (2000) by carrng out a pattern of enterprise racketeering and extortion. (See Counterclaim Complaint at p.4) The Counterclaim Complaint does not specify RICO Defendant bases her claim, but the allegations in the Counterclaim under which section of
Complaint suggest that the RICO claim is being brought under 18 V.S.C. § 1962(c), which
makes it unlawful to conduct an enterprise through a pattern of V.S.C. § 1962(d), which makes it unlawful to conspire to violate any provision of

racketeering activities, and 18 the RICO

statute. In support ofthe RICO counterclaim, Defendant alleges that Plaintiffs committed

common laW fraud and violated the federal cnminal extortion statute (18 V.S.C. § 1951), the federal mail fraud statute (18 U.s.C. § 1341), and the federal bank fraud statute (18 V.S.C. § i 344(d)). See Counterclaim Complaint at ppoS-6.

The RICO enterprise allegedly began in July 2002 with the service of subpoenas upon various internet providers seeking to obtain information about the identities of alleged copyrght
infrngers. (Id.) The Plaintiff record companies then allegedly furthered the enterprise by

initiating hundreds of lawsuits, which were commenced by the service of summonses and the infrngement action. (Id. at pp.4-5.) These letters allegedly stated: "Your liabilty for infrngement under the Copyrght Act is clear. . .. You violated the record company plaintiffs' copyrghts and are liabl( e J for damages as a result." (Id. at pp.5~) The letters went on to state that the damages for to $150,000 per violation. (Id.) the alleged infringement could range from $750
complaiiltsaccompanied by letters discussing and prompting a settlement of

Defendant alleges that the letters fraudulently represented clear liability in an effort to obtain settlement funds and were a scare tactic that caused a "vast amount of settlements from individuals who feared fighting such a large institution and feel victim to these actions and felt forced to provide fuds to settle these action instead of fighting the institution." (ld. at pp.5-6.) Defendant "great emotional and financial harm and damage" 'These letters also allegedly caused
varous bank accounts. (ld. atp.6.) Defendant alleges on behalf of other similarly situated persons also that
and caused Defendant, as well as others similarly situated, to withdraw funds out of

Plaintiffs' conduct caused personal and financial damages. (Id.)
Plaintiffs now move this Court to dismiss Defendant's Counterclaim with prejudice, arguing the RlCO counterclaim should be dismissed because the Defendant (1) has not alleged a predicate act under RICO; (2) lacks standing to assert a RICO claim to the extent that her claims are based on personal injury; and (3) has not properly pled a RICO violation. In addition, Plaintiffs argue that Defendant (4) has not pled her alleged fraud claims with particularity, as required by Rule 9(b). Finally, Plaintiffs argue that the Defendant (5) lacks standing to assert claims on behalf of other, unnamed persons.

ANALYSIS
i. Standard of Review

Civil Procedure 12(b)(6) all In deciding a motion to dismiss under Federal Rule of allegations in the complaint must be taken as true and viewed inthe light most favorable to the plaintiff. See Warth v. Seldin, 422 U.S. 490, 501 (1975); Trump Hotels & Casino Resorts, Inc.,
2

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Case 2:03-cv-05757-WJM-RJH Document 22

Filed 09/30/2004 Page 3 of 6

v. Mirage Resorts Inc., 140 F.3d 478,483 (3d Cir. 1998); Robb v: Philadelphia, 733 F.2d286, complaint for failure to state a claim if, after viewing 290 (3d Cir. 1984). A court may dismiss a

in the complaint in the light most favorable to the plaintiff, it appears beyond doubt that no relief could be granted "under any set of facts which could prove consistent with the allegations." Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Zynn v. O'Donnell, 688 F.2d 940,941 (3d Cir. 1982).
the allegations

II. Defendant's Motion To Dismiss The Complaint Is Granted
A. Defendant Has Not Identifed Any Predicate Act In Support Of Her

RICO

Counterclaim
RICO provides a private civil action to recover treble damages for injuries resulting from
a defendant's "racketeering activities" in violation of RICO's substantive

provisions. 18 UoS.C.

§ 1964(c). The RICO statute makes it unlawful to, among other things, conduct an through a pattern of racketeering activities or to conspire

enterprise

to do the same. Id. § 1962(c), (d). To successfully allege a violation, a plaintiffmust allege "(1) conduct (2) of an enterprise (3) racketeering activity" as well as an injury resulting from the conduct through a pattern (4) of constitųting a violation. Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985). "Racketeering activity" means one ofthe various predicate acts identified in the statute, including acts "indictable" under the federal mail and wire fraud statutes. 18 V.S.C. § 1961(1).
In this case, Defendant has not identified any valid predicate act under RICO in support her counterclaim. Defendant bases her counterclaim on the mailng of summonses and accompanied by settlement demand letters whichÐefendant complaints by Plaintiffs' counsel alleges fraudulently represented clear liability. (See Counterclaim Complaint atp.4). Tlûs is precisely the kind of attorney conduct to which the courts previously have refused to attach RICO liability. In Morin v. Trpin, 711 F. Supp. 97 (S.D.N.Y. 1989), for example, a trial court stated letter sent by attorney-defendants to plaintiffs demanding payment on notes which the that a unenforceable could not constitute a RICO predicate act because defendants allegedly knčw to be fraud statute would chil an attorney's efforts and mail letters in issue to the "(s)ubjecting the pending litigation." Id. at 101-02, 105-06. duty to represent his or her client in the course of The cour observed that the "legitimate acts of attorneys on behalf of clients canot form the basis of a RICO claim. to Id. at 105. Similarly, in Paul S. Mullng & Assocs., Inc. v. Bassett. 632 F. Supp. 532 (D. DeL. 1986), a trial court declined to conclude that the mailng of a letter by action based on that position stating defendant's legal position and demanding certain counsel constituted a RICO predicate act, finding "absurd plaintiffs' apparent suggestion that a lawyer's
of act in posting a letter which states a client's legal position in a dispute can constitute mail

fraud.

If such were the situation, every dispute in which the paries' counsel exchanged letters could give rise to RICO litigation:' Ąd. at 540. Based on the reasoning in Morin and Bassett, the Court concludes that the settlement letters described in the Counterclaim Complaint cannot constitute a RICO predicate act. Thus, Defendant's § i 962(c) and § 1962(d) counterclaims must fail. See
Lightning Lube, Inc. v. Witeo Corp., 4 F.3d 1153, 1192 (3d Cir. 1993) ("Any claim

under section

1962( d) based on conspiracy to violate the other subsections of section 1962 necessarily must fail ifthe substantive claims are themselves deficient.").

3

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Case 2:03-cv-05757-WJM~RJH Document 22

Filed 09/30/2004 Page 4 of 6

The Court notes also that Defendant appears to base her RICO counterclaim solely on the mailing ofthe allegedly fraudulent settlement letter. However, to the extent that Defendant bases her RICO counterclaim on Plaintiffs' filing of allegedly frvolous lawsuits or threats to fie allegedly frvolous lawsuits, this form of conduct also is not properly the basis of a RICO action.
See, e.g., Deckv. Engineered Laminates, 349 F.3d 1253, 1258 (10th Cir. 2003) ("We recognize

that litigation can induce fear in a defendant; and it would be fair, at least in other contexts, to characterize as 'wrongful' the fiing ofa groundless lawsuit, paricularly when the plaintiff resorts to fraudulent evidence. But we join a multitude of other courts in holding that meritless
litigation is not

extortion under § 195 i'''); Vemco, Inc. v. Camardella, 23 F.3d 129, 134 (6th Cir.

1994) ("A threat of litigation if a party fails to fulfill even a fraudulent contract, moreover, does not constitute extortion."); is. Joseph Co., Inc. v. J. Lauritzen A/S, 751 F.2d 265, 266-67 (8th Cir. 1984) (holding that threats to sue, although characterized as extortion in plaintiffs racketeering under RICO because tlueats to bring complaint, do not constitute predicate acts of even groundless civil actions do not involve force or violence); G-I Holdings, Inc. v. Baron &
Budd, 179 F. Supp.2d 233,259 (S.D.N.Y. 2001) (''Tlueats of

litigation, and even theats of

meritless litigation or the actual pursuit of such litigation, have been held not to constitute acts of extortion. ")
Although the Cour's determination that Plaintiffs' alleged conduct does not

constitute a

predicate act under RICO alone is suffcient to resolve this motion to dismiss, the Court addresses the other deficiencies in Defendant's counterclaim.
B. The 18 V.S,C. § 1951 Allegation Underlying Defendant's RICO Counterclaim Must Be Dismissed

The Hobbs Act states that "rw)hoever in any way or degree obstructs, delays, or affects
commerce or the movement of any aricle or commodity in commerce, by robbery 'or extortion or

attempts or conspires so to do . . . shall be fined under this title or imprisoned not more than twenty years, or both." 18 V.S.C. § 1951. An obvious element of extortion is an extortionate demand, i.e. a demand by the extortioner that the victim pay thč extortioner a valuable the victim's propert. United States v.Inigo, 925 F.2d 641,651 (3d consideration for return of
Cir. 1991). For conspiracy convictions, there must be (1) some evidence of the conspirators and (2) knowledge on behalf the specific unlawful purpose charged in the of each of

an agreement among

the conspirators that the agreement "had indictment." See United States v. Terselich, 885

F.2d 1094, 1097 (3d Cir. 1989).
The Court concludes that Plaintiffs did not commit extortion or conspire to commit and complaints accompanied by letters discussing and

extortion by mailng summonses prompting a settlement of

the infrngement action. As stated in Morin, "legitimate acts of attorneys on behalf of clients cannQt form the basis of a RICO claim" on the theory that they 105. Norcan the threat to fie an allegedly frvolous mail fraud. 711 F.Supp.at constitute lawsuit form the basis of a RICO claim on the theory that the threat constitutes extortion. Id. at 106. For these reasons, the Court concludes that mailng summonses and complaints accompanied by letters discussing and prompting a settlement of the infringement action cannot constitute extortion. Therefore, Defendant's § 1951 allegations must be dismissed.

4
E)('HĄĄä.;J~ U lė'Ģ r,!\,nr'. U (nĄĄ-'2""~ \ i,::W =""=-,,,,,Jl.-"' j"'i,,\\"~,~r~onl=,.-.i.4il= I

Case 2:03-cv-05757-WJM-RJH Document 22

Filed 09/30/2004 Page 5 of 6

C. The 18 U.S.C. § 1341, 18 V.S.C. § 1344(d), And Common Law Fraud

Counterclaims Underlying Defendant's RICO Counterclaim Must Be Dismissed

Where, as here, a litigant relies on allegations of fraud as a basis for a RICO violation, the
allegations of fraud must comply with Federal Rule of Civil Procedure 9(b). Lum v. Bank of Am.,

361 F.3d 217, 223 (3d Cir. 2003). Under Federal Rule of Civil Procedure 9(b), the circumstances constituting fraud must be pleaded with particularity, though fraudulent intent may RICO fraud allegations, Plaintiffs may satisfy this be generally alleged. In the context of requirement by pleading the "date, place or time" ofthe fraud, or through "alternative means of
injecting precision and some measure of F.3d at 224. In addition, Plaintiff substantiation into their allegations of must identify why the alleged fraudulent fraud." Lum,

361

statements were

fraudulent. See U.S. Fire Ins. Co. v. United Limousine Servo Inc., 303 F. Supp.2d 432, 443-44
(S.D.N.Y.2004). Put another way, the ''who, what, when and where details of

the alleged fraud"

are required. Bonavitacola Elec. Contractor, Inc. v. Boro Developers, Inc., No. 03-1713, 2003

WL 23155074, at *3 (3d Cir. Oct. 30,2003).
In this case, Defendant's 1344(d)), and common law fraud in support of

mail fraud (18 V.S.C. § 1341), bank fraud (18 V.S.C. §

her RICO counterclaim faIlto meet Rule 9(b)'s pleading requirement because Defendant has made no attempt to specify why the settlement letters issued by Plaintiffs' counsel were fraudulent other than to allege conclusorily that the settlement letters "fraudulently represented clear liabilty" and that "the U.S. mail was used as an
instrument of the initial fraud, conspiracy to commitfraud, and in the continuation of

this fraud

and fear inducing (See Counterclaim Complaint at p.6). These allegations are, therefore, dismissed.
D. To The Extent That Defendant Seeks To Assert Counterclaims On Behalf Of
Other Third

Parties, Those Claims Are Dismissed

Defendant appears to assert claims on behalf ofurmamed persons who were allegedly threatened by Plaintiffs i litigation demand letters and who ā1legedly "felt forced to provide funds , to settle these actions." (See Counterclaim Complaint at p.5.) However, Plaintiffs correctly point out that Defendant has no standing to bring these claim on behalf of these third persons.
See Moose Lodge No. 107 v. Irvin, 407 U.S. 163, 166 (1972) (stating

that a claimant "has

standing to seek redress for injury done to him (or her J, but may not seek redress for injuries done to others").

5

r:VH!'~IT C 0' ,r'%,- 5'" O"~" J ~.., i:' ~Ö ĢuJiĄ/f-;ii;~~b=,""~,, '~.=

Case 2:03-cv-05757-WJM-RJH Document 22 Filed 09/30/2004 Page 6 of 6
CONCLUSION
For the foregoing, Plaintiffs' Motion to Dismiss Defendant's Counterclaim is GRATED and Defendant's Counterclaim Complaint is DISMISSED WITH PREJUDICE. An appropriate Order accompanies this Letter Opinion.

cc: The Honorable Ronald J. Hedges, U.S.MJ.

6

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r- .!

Page 1

LEXSEE 2007 US DIST LEXIS 35824

ATLANTIC RECORDING CORPORATION, ET AL. VS. DIAE HESLEP

CIVL ACTION NO.4:06-CV-132-Y
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, FORT WORTH DIVISION

2007 U.S. nist. LEXIS 35824
Decided May 16, 2007, Filed

May 16, 2007,

COUNSEL: (*1) For Atlantic Recording Corporation, a Delaware corporation, Virgin Records Amerėca Inc, a Californa corporation, UMG Recordings Inc, a Delaware corporation, Sony HMO Music Entertainment, a Delaware gmeral partership, Arsta Records LLC, a Delaware limited liabilty company, Interscope Records, a Californa general parership, Plaintiffs: Stacy R Obenhaus, LEAD ATTORNY, Lisa L Honey, Gardere Wyne Sewell - Dallas, Dallas, TX.; David Tonini,
Timothy M Reynolds, Holme Roberts & Owen - Denver,
Denver, CO.

own or control exclusive rėghts to certain copyrghted sound recordigs. Plaintiffs contend that since the early 1990s, they have faced a massive and exponentially expanding problem with digital piracy of their copyrghted
materėal over the internet.

It is now well-known that there are numerous pro-

wil provide access to online networks (referred to as
"peer-to-peer" or "P2P" networks) that lin millons of

grams that anyone can install onto one's computer that

users' computers simultaneously toa common peer-topeer network throughout the world and' allow a person to

For Diane Heslep, Defendant: Thomas E Kimble, LEAD Thomas E Kimble, ArliigATTORNEY, Law Offce of ton, TX.

access, acquire (downoad), and distrbute (upload), ilegally, bilions of copyrghted sound recordings, movies,
LTD., et al., 545 U.S.

JUGES: TERRY R. MEANS, UNITED STATES DISTRCT JUGE.
OPINON BY: TERRY R. MEANS

and softare. See MGM Studios, Inc., et al. v. Grokster, 2764, 162 L. Ed. 2d 913, 125 S. Ct. 781 (2005); A&M Reįords, Inc., et al. v. Napster, Inc., et

al., 239 F.3d 1004 (9th Cir. 2001). Plaintiffs assert that
as a result of the rėse of these peer-to-peer networks, they
have sustained and continue to sustain enormous fman-

ciallosses.

OPINON

To combat this online piracy, Plaintiffs employ the
MediaSentr (*3) Managed Servces unt ("MediaSen-

ORDER DENYG MOTION FOR RULE 11
SANCTIONS

The Cour has before it defendant Diane Heslep's motion requestig' that the Cour impose sanctions on Plaintiffs' attorney, Stacy Obenhaus, and the lawfin
Gardere Wyne Sewell LLP, under Federal Rule a/Civil
Procedure 11. After review, the Cour fmds Heslep's

try") of Safenet, Incorporated, though the Recording Industr Association of America. MediaSentr is one of the prėcipal providers of online anti-piracy, services , worldwide, and it specializes in the abilty to detect the
unauthoried distrbution of copyrghted materėals over

the internet. MediaSentr searches the numerous peer-to-

peer networks to identify individuals ilegally acquirg
, and distrbutig Plaintiffs' copyrighted sound recordings.

motion to be frivolous and concludes that it should be DENID (doc. # 31).
i. Factual Background
Stacy Obenhaus is an attorney with the Iawfii

Becomig a user of a peer-to-peer network is relatively easy. One need only downoad from anyone of ' hundreds of web sites on the internet and intall onto his
computer the peer-to-peer softare-osuch as the program

Gardere (*2) Wyne Sewell LLP. Collectively, they represent Plaintiffs, who are recording companies that

Kazaa, which is the program alleged to have been used
in this case. Once installed, the user to-peer network and is able to search

can access the peer-

the net"Qlfo,l)lll",_

r~_.V!\.~9WWfj =v,_",=="'.l4.Ą~;~-.=-i-OF I i, . .ŋ,' =rlirk)~ 8 f n f! ""E j li

-

Page 2

2007 U.S. Dist. LEXIS 35824, *

fie, including copyrighted sound recordings that have

been converted to a digital fie. The user can download that copyrighted sound fie, for free, and' later transfer
that fie to a compact disk or digital music player. Also,

which serves as an internet service provider ("ISP") allowing access by its subscribers to the internet.
Attched as Exhbit B to Plaintiffs' complaint are a serėes of the above-described screen shots taken by MediaSentr in ths case. The screen shots show approxi-

once that fie has been downloaded onto the user's com-

puter, it is also available to other users (*4) on the peerto-peer network to access and downoad onto their, respective computers. Users of the peer-to-peer softare

mately 850 digital sound fies located on this user's
shared directory. (pIs.' Am. CompI. Ex. B.) The user's name on the network was "mke~KaZaA." (Id.) Many of
the sound fies contained on the user's shared directory

and networks downoad the copyrghted sound recordings into what is called a "shared directory" onto

their computer. As long as the user tus on the sharėg featue of the peer-o-peer program, any user on the peer-

were recordings by very famous and well known artsts. Plaintiffs' own copyrghts on some of them. (Id.) The
screen shots also show that at the tie ths user was

to-peer network wil have access to that user's shared
directory and all of

the fies stored in that directory.

logged onto the network, the user's shared directory was

available to some 2.5 millon other users. (Jd.) The
screen shots also

MediaSentr combs these peer-to-peer networks for individuals infrnging on Plaintiffs' copyrghts and gathers evidence of their unawful activity. MediaSentr searches for Plaintiffs' copyrighted sound recordings over the network, views the fies that a user has in his shared directory, obtains the internet protocol ("IP") address and screen name of that user, and downloads a

establish that the millons of users on

the network at that time were sharg more than one bil-

lion fies. (Id.) Thus, while on the network, the user "mke~KaZaA" had access to more than a billon fies
shared by more than 2.5 millon users and the more than

, 2.5 millon users on the network would have access to all of "mke~KaZaA's" fies on her shared directory. i

sampling of the copyrghted recordings contained on that
user's shared directory. In

doing so, MediaSentr uses

the very program employed by the alleged inging
user.

MediaSentr captues a list of all of the files a par-

i Although, as wiIl be discussed below, fuer investigation by Plaintiffs revealed their belief that the user "mke~KaZaA" was Diane Heslep, at that time, the user mke~KaZaA was anonymous.

ticular user possesses in his shared diectory by taking
what are called "screen shots" of

the user's shared directory. Screen shots are actual pictues (*5) of the screens that MediaSentr and other users on the network view
when accessing the user's shared directory.' In other words, these screen shots are actual pictues of all of the

(*7) The screen shots also revealed that one of the files contained on user "mke~KaZaA's" shared directory

fies available for downoading from the user's shared
directory.

was "Diane.kpI." (Id. at 3.) The "kpl" at the end of the fie identifies that fie as a Kazaa playlist fie. One of the functions of the Kazaa program is to enable the user to create Kazaa playlist fies that are lists of the audio fies

contained on the user's shaed directory that can be
played using Kazaa's audio player program. This Kazaa playlist also allows other users on the network to downoad the specific fies contained on that playlist from the user's shared directory. When creating this playlist, the user is free to assign it any name he chooses.
With this informtion, Plaintiffs fied a "John Doe"

Once MediaSentr has a list of all of the fies contained on a user's shared directory, it searches the list for

Plaintiffs' copyrghted recordings. If the list includes
some of Plaintiffs' copyrghted recordings, MediaSentr

wil downoad a sampling of those recordings from the
user's shared directory on the user's computer. By the conclusion of its investigation of anyone user, MediaSentr will have gathered evidence of the copyrighted

complaint in the Federal District Cour for the Eastern Distrct of Virgina. See Motown Record Company L.P.
v. Does 1-95, No. 1:05-cv-071 (E.D.Va. 2005); (PIs.' App. to Resp. to Mot. for Sanctions at 9-16.) Plaintiffs obtained a subpoena under Federal Rule of Civil Procedure 45 and served that subpoena on AOL in ordį:r to
lear the identity of the person at IP address
172.143.120.109 on January 6,2005, at 17: (*8) 42:34

sound recordings possessed on the user's shared directory on his computer, the metadata for each digital fie, screen
shots of the user's shared directory on his computer, the

user name of the alleged infrnger, the user's IP address,

and the date and tie of the aIleged ingement.
In ths case, MediaSentr observed an individual

logged onto a peer-to-peer network though the Kazaa
program on Januar 6, 2005, at i 7:42:34 eastern standard
time ("EST") using IP address 172.143.120.109. The IP

(EST). In response, AOL identified the user as Diane
Heslep of 609 Kelly Terrace, Arlington, Texas 76010.

(PIs.' App. to Resp. to Mot. for Sanctions at 28.)
After learnng of

address (*6) was assigned to America Online ("AOL"),

Heslep's identity, Plaintiffs sent her

a notice of their intent to sue her for copyrght infrge'i~'~.',_,'\.Vu~-'.o..: i ~"~ ~ij~. tĄc',J "...';Ą61(, 'C~ r~ d"Îi Ob'l"C , O' "Ą~~'_.~ F iE'r' i''''"" ,, ßt ~ .,.,.vd ,,~_..,-J "~"'. =~

Page 3

2007 U.S. Dist. LEXIS 35824, *

ment. (Id. at 109.) The notice contained a copy of the

to downoad the copyrghted recordings,
to distrbute the copyrghted recordings to the public, and/or to make the copyrghted
recordings available for distrbution to

orėgial complaint in ths case, inormed Heslep of Plaintiffs' allegation of her copyrght inngement, and offered to settle ths case. (Id.)

After attempting unsuccessfully to reach settlement
Plaintiffs fied their copyrght-infrgement actio~

others. In doing so, (Heslep) has violated

Plaintiffs' exclusive rėghts of reproduction
and

against Heslep under 17 u.s.e. § 101, et seq., on February 17, 2006. Shortly thereafter, Heslep offered her computer ~ard drve to Plaintiffs for inspection to support her
asserton that she was not engaged in any ongoing in-

distrbution. (Heslep's) actions consti-

tute infingement of Plaintiffs' copyrghts and exclusive rights under copyright.

frgement of Plaintiffs' copyrghts. In a demand letter
sent to Plaintiffs on June 19, 2006, from Heslep's attor-

(PIs.' Am. Compl. at 3.) After receiving the amended
complaint, Heslep responded by claimg she was at

ney, Heslep offered to allow Plaintiffs to inspect her hard drve and to work out a suitable protection order for the evidence uncovered through the inspection. (Id. at 33.) The letter also' demanded that Plaintiffs remove their allegation (*9) of Heslep's ongoing infngement in their
orėginal complaint. (Ąd. at 37.) The

work at 5:42 p.m. (EST) on January 6, 2005, and that she
has no idea whose computer was in use at the tie in

question. (PIs.' App. to Resp. to Mot. for Sanctions at 59-

66.) (*11) She also claimed that her AOL account was
and is used by secondary users, though she has never

(Ąd. at 37-38.) ,

letter theatened Rule 11 sanctions if Plaintiffs did not amend their complaint.
An inspection of Heslep's hard drve did not occur,

identified these secondary users. (Id.)

however, because she demanded term unacceptable to

In response, Plaintiffs' national counsel sent a letter to Heslep's counsel detailng the evidence they possessed of her alleged infngement and inviting her to provide

Plaintiffs. Among her many demands, Heslep insisted upon a payment of $ 10,000 and dismissal of all claim if the inspection showed that she was not curently engaged
in copyright infgement. (Id. at 42-45.) Plaintiffs would
not agree to those term because even if an inspection of

any informtion regarding her claim of secondar users
her AOL account. (/d. at 70-72.) Heslep's counsel left a voicemail with Plaíitiffs' national counsel statig he of

re~sed to communcate with them because he regarded
this as a Rule 11 issue and advised that he would only

~es.lep:s computer e~ta~lished that she was not curently

communicate through Plaintiffs' local counel Obenhaus
and the lawfin Gardere Wyne Sewell LLP. (Ąd. at 73.)
Thereafter, Heslep fied a declaration claiming that

infrging on Plaintiffs copyrights, their complaint also
alleged that she had so infrged in the

past.
the subscrėber to

Aftr learng of Heslep's objections, Plaintiffs' contacted AOL to verify that Heslep was

Plaintiffs' amended complaint falsely alleges shč infrged on Plaintiffs' copyrght using the Kazaa program

the IP address 172.143.120.109 used on January 6,2005, at 17:42:34 (EST). (Id. at 58.) AOL again confined its Heslep. identification of
According to Plaintiffs, in an

at 5:42 p.m. (EST) on January 6, 2005. (Heslep DecL. of
Aprėl 15,2006 at P 2.) Notably absent in made under penalty of

her declaration

perjur, however, is any denial of

Plaintiffs' allegation that she infrged on Plaitiffs'
copyrghts "on other occasious on or before Januar 6
2005, and contiuously through January 6, 2005." (*12j

effort to avoid unecHeslep's ongo-

essary litigation, they fied an amended complaint on
July 14, 2006, removing the allegation of

(PIs.' Am. Compl. at 3.)(Emphasis added.); (Heslep Decl.

ing and continued infrgement. In their amended (*10)

complaint, Plaintiffs alleged that

on January 6, 2005, at approximtely 5:42 p.m., (Heslep), without the permssion or consent of Plaintiffs, used an online media distrbution system to distrbute the copyrghted recordings to the public and/or to make the copyrighted recordings available for distrbution to others, and that, on other occasions on or be-

of Aprė115, 2006 at 1-2.) Heslep's attorney also advised Plaintiffs' attorney that AOL had confined that Heslep's screen name was not in use at 5:42 p.rn (EST) on January 6,2005. (Def.'s Mot. for Sanctions at 2.)

Again and in response, Plaintiffs requested Heslep produce any evidence to support her claim that AOL
confined that her screen name was not in use at the tie

in question, and requested informtion on any secondary

users who have access to her AOL account. Instead,
Heslep provided emails she received from AOL. In those emails, AOL advised Heslep that its

fore January 6, 2005, and contiuously
though January 6, 2005, (Heslep), without the permssion or cousent of Plaintiffs

records indicate that the screen name
"gocwbys8" was online using IP address
172.143.120.109 from 15:38:59 to

used an online media distrbution syste~

'. ,,H 'l'=P. " í "JJf:'Ą.:,Ąc0 ".;" 1 , 'ō";' 't I"' r:--':"'","";Ą~"'""""c..==~ U E'"v,..1""'ii,=:,."-==: '" ,c", 'c~ 3 OF' b ~

Page 4

2007 U.S. Dist. LEXIS 35824, *

21:17:30 (EST) on January 6,2005 . . . . Since the screen name "gocwbys8" is a

screen name on the AOL account of your client, Ms. Diane Heslep, we identified
her in the April 19, 2005, subpoena re-

Calhoun, et al., 34 F.3d 1291,1296 (5th Gir. 1994). And "the standard under which an attorney is measured is an objective, not subjective, standard of reasonableness under the circumstances." Whitehead, 332 F.3d at 802 (internal quotations and citations omitted).
B. Discussion

sponse (referrg to Plaitiffs' Rule 45
subpoena).

though AOL gave Heslep permssion to tu over those

(pIs.' App. to Resp. to Mot. for Sanctions at 90.) Al-

_emails to Plaintiffs in early August 2006, she did not disclose them until October 21, (*13) after she fied her
motion for sanctions on October 5.

To start with, Plaintiffs have pellucidly explained the extensive investigation that was conducted before fiing suit against Heslep for copyrght ingement. Plaintiffs retained the services of a thd-part investigator whose investigation revealed that a user had logged onto a peer-to-peer network using the Kazaa program

and made available for distribution, from that user's
shared directory on that user's computer, more than 850 music fies. Screen shots of the user's shared directory
(*15) revealed a Kazaa-playlist fie called "Diane.kpl,"

II. Anlysis
A. Standard

and verėfied that many of Plaintiffs' copyrghted re-

The Federal Rules of Civil Procedure are designed
"to secure the just, speedy, and inexpensive determa-

cordings were being freely distrbuted to millions of
other users on the network by ths user.. MediaSentr's

tion of every action." FED.R. CIV.P. 1. Rule 11 champions these goals and in pertnent part provides,

investigation identified the IP address used to access the internet, and it was later traced to an AOL account con-

By presenting to the cour (whether by
signig, filing, submittng, or later advo-

trolled by Heslep. Based on that informtion, the Cour concludes that Plaintiffs' attorneys reasonably believed that Heslep was responsible or at least shared responsi-

!

catig) a pleadig, wrtten motion, or

bilty for the infrgement of their clients'. copyrghts
though the use of

other paper, an attorney or unepresented
par is certfyig that to the best of the

her AOL account.

person's knowledge, informtion and belief, formed after an inquir reasonable

The Cour rejects Heslep's characteriation of ths
lawsuit, and many others like it, as "predatory." (Def.'s Mot. for Sanctions at 3.) Plaintiffs' attorneys brought this
i r i.

under the circumtances,--

(1) it is not being presented for any improper purose, such as to harass or to
cause unnecessar delay or needless in-

lawsuit not for the puroses of harassment or to extort Heslep as she contends, but, rather, to protect their clients' copyrghts from ingement and to help their clients deter futue infgement. The evidence uncovered

crease in the cost oflitigation;
(2) the claim, defenses, and other le-

from MediaSentr's investigation shows tht Plaintiffs'

allegation of Heslep's alleged copyrght iningement
gal contentions therein are warranted by existing law. . .;
(3) the allegations and other factual
have evidentiary support and wil

likely have more evi-

dentiary support though fuher investigation and (*16) discovery.

contentions have evidentiar support or, if

specifically so identified, are likely to have evidentiary support after a reasonable opportty for fuer investigation

For now, our governent has chosen to leave the enforcement of copyrghts, for the most part, in the hands

of the copyrght holder. See 17 US.c. § 101, et seq. Plaintüfs face a formdable task in trng to police the
internet in an effort to reduce or put a stop to the online

or discovery; . . . .

piracy of their copyrghts. Takig aggressive action, as
Plaintiffs have, to defend their copyrghts is certainly not sanctionable conduct under Rule 11. The right to come to
cour to protect one's propert rėghts has been recognized

FED.R.CIV.P. 11(b) (*14) . Each obligation under Rule 11 must be satisfied; violation of any justifies sanctions. See Whitehead, et al. v. Food Max of Mississippi, Inc., et
al., 332 F.3d 796, 802 (5th Cir. 2003). In assessing

in this countr since its birh.
Furhermore, as detailed above, Plaintiffs went to considerable effort to work with Heslep to determne her
tre culpabilty in this case. Plaintiffs have tred to coop-

whether an attorney has met his obligations under Rule

11, ths Circuit applies "the 'snapshot' rule, measUlng the
attorney's conduct as of the tie of the signig." FDIC v.

erate with Heslep and examie her computer hard drve,
. 11 r '",. .;.' ,. '" ',''''' ! j ;;-" l" ~m_

E. Hlß_=.~~o~ '."....'..."'.'."~. 'i .ri"'- Ą X .1 '"r' i- '.'~ ,'\.,,\L,,~.,,~.~"d'

Page 5

2007 U.S. Dist. LEXIS 35824, *

but she has made unreasonable demads. Plaintiffs have repeatedly asked Heslep for informtion regarding the her AOL account, but she has alleged secondary users of provided none. And Plaintiffs have repeatedly asked to
view her evidence to support her defensive claims, but

though she alleges there are secondar users who have

access to her AOL account, she has refued to provide any informtion to Plaintiffs regarding these secondary users--possibly assisting those secondary users in escaping liabilty and obstrcting Plaintiffs' abilty to enforce
their copyrghts.

she has failed to disclose. Time and again, Heslep has
railed to back up her assertons with any substance, leading (* 1 7) any reasonable person to suspect that her de-

Second, Heslep's claim that AOL confumed that she
was not online at 17:42:34 (EST) on January 6,2005, is simply false. AOL confumed twice for Plaintiffs that a '

fensive claims are without merit.
In her motion, Heslep argues that Plaintiffs' attor-

screen name in Heslep's AOL account was online at the
date and tie in question. And the emails Heslep pro-

neys should be sanctioned because she has established
that she was at work at the exact date and time the

amended complaint alleges she was online infnging on Plaintiffs' copyrghts, that AOL has confumed that she was not herself online at the specifc date and time in
question, and that AOL could not identify the specific
computer in use at the date and time in question. The

vided to Plaintiffs confum that screen name "gocwbys8" was onlne at that time and is a screen name registered to Heslep's AOL account.

Whle that does not conclusively prove that Heslep herself accessed the internet through AOL at the date and

evidence suggests that these assertons are disingenuous,

, and they certainy do not support sanctioning Plaintiffs' attorneys.

time in question, neither does it prove that she did not. What it does show is that AOL has not confumed that Heslep herself was not online on the date and time in
question.

First, whether Heslep was at work: at the exact date and time alleged in the amended complaint is a red herrig. Plaintiffs' amended complaint does not allege that
infrgement of their copyrghts happened at Ą:xactIy

Thd, for the same reasons just discussed above,
whether AOL can or cannot confum what specific com-

i 7:42:34 (EST) on January 6, 2005. Instead, it alleges that at 17:42:34 (EST) on January 6, 2005, "and. . . on other occasions on or before January 6, 2005, and contiuously though January 6, 2005, . . ." Heslep inged

puter was on the internet on the date and time in question (*20) does not establish that Plaintiffs' attorneys committed sanctionable conduct under Rule 11. The evidence

strongly suggests that infgement of Plaintiffs' copyrights took place through the use of Heslep's AOL ac-

on Plaintiffs' copyrghts. (pIs.' Am. CompI. at
3.)(Emphasis added.) Furer, the evidence she provided

count. "It is not necessary that an investigation into the
facts be carred to the point of absolute certainty."

to Plaintiffs (*18) from AOL establishes that her AOL
account was online for approximtely six hours from

Kraemer v. Grant County, et al., 892 F.2d 686, 689 (7th Gir. 1989). The investigation need only be reasonable
under the circumtances. Thomas v. Capital Sec.

3:38 p.m. (EST) until 9:17 p.m. (EST). Whle Heslep
may have been at work at 5:42 p.m. (EST), as she claims, she has not claimed to stil have been at work at 9: 17
p.m. (EST).

Servs.,

836 F.2d 866, 875 (5th Cir. 1988). Under these circumstances, where the piracy takes place secretly and

anonymously over the internet, and with the perpetrator
not readily or easily identifiable, the investigation was

Moreover, the evidence shows that alleged infrgement of Plaintiffs' copyrights occured using her AOL account. Even if Heslep herself was not online on

more than reasonable. Moreover, the conduct of Plaintüfs' attorneys in attemptig to resolve ths dispute with Heslep has also been more than reasonable.
Finally, the Cour concludes that

Januar 6 acquirg and distributig Plaintiffs' copyrėghted recordings, it's reasonable to infer that someone
she knew and gave permssion to use her AOL account

sanctions are ap-

was. Thus, it is reasonable to infer that Heslep may be
guilty of contrbutory infrgement. See Grokster, 545

propriate in this case, but not against Plaintiffs' attorneys. Rather, the Cour concludes that sanctious are appropriate against Heslep's attorney, Thomas Kimble. Among
~e . ~any prohibitions contained in Rule 11, is one 'pro-

U.s. at 930. Although the copyrght act does not expressly provide for liabilty for iningement commtted
by another, "doctrines of secondar liability (have)
emerged from common-law priciples and are well established in the law." Ąd. Essentially, these doctres at-

hibiting an attorney from fiing (*21) a motion for the
puroses of harassment

and unecessarėly increasing the

cost oflitigation. FED.R.CIV.P. 11(b); see also Browne v. NASD, Inc., No. 3:05-CV-2469-G, 2006 U.S. Dist.
LEXI~ 90657 at *28 (N.D.

tach liabilty upon anyone who is an aider and abetter of

Tex. 2006)(Fish, C.J.)(statig

copyrght infrgement. See Id. The evidence certainy
may have contributorėly infrnged on Plaintiffs' copyrights. (*19)
reasonably implies that Heslep, if not directly,

the fihng of a motion for sanctions is itself subject to the

requirements of Rule 11 and may lead to sanctions). Kimble's frvolous motion for sanctions clearly does
both. The Cour also notes that it has already sanctioned

This is fuher buttessed by the fact that to date, aI-

EXHISiTc-=..=.p iP,"~)J: į; ('l.: ,~=_ F ĄJ .'. -_..i"'~_~=""=.7=...-,_.Ą-if

Page 6

2007 U.S. Dist. LEXIS 35824, *

Kimble fur opposing discovery wireasoiiably, in bad faith, and in violation of Dondi Properties Corp. v.
Commerce Sav. & Loan Asso., 121 PR.D. 284 (ND.

II. Conclusion

Tex.

For the foregoing reasons, Heslep's motion for sanc-

1988).

tions is DENIED. It is fuher ORDERED that Kimble, personally, pay Plaintiffs' reasonable costs, including
attorney's fees, incured in defending against his client's baseless motion for sanctions. See Browne, 2006 U.S.

The Cour does not take motions for sanctions
lightly. Such motions, upon mere fii,g, can damage an
attorney's reputation, immediately call upon that attorney

to defend his integrty, and can place a chillng effect on the Cour's bar, preventing its members from representing their clients with vigor and creative advocacy, or
from seekig to persuade the Cour to move, the law in a

Dist. LEXIS 90657 at *28 ("The Cour may award to the person who prevails on a motion under Rule 11 . . . reasonable expenses, including attorney's fees, incured in

presentig or opposing the motion. "). Plaintiffs shall
have foureen days from the date of this order to subnút

new direction. Such motions, when frvolously filed, will

not only har the attorney that is its target, but may (*22) har the Cour as well by affectig the quality of
the advocacy before it. For ths reason, frvolous motions
for sanctions that harass the opposing part's attorney,

affdavits in support of such costs and tees, after which time Kimble shall have seven days to fie any objections to the reasonableness of the costs and fees claimed by Plaintiffs.
SIGNED May 16, 2007.
TERRY R. MEANS

chill that attorney's zealous representation of his client, and needlessly increase the cost of litigation cannot go unpunished. Accordingly, the Cour concludes that sanctions are appropriate against Kimble.

UNITED STATES (*23) DISTRICT ruGE

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