Cobbler Nevada, LLC v. Anonymous Users of Popcorn Time
Filing
56
OPINION and ORDER - For the reasons stated, Plaintiff's motion for attorney fees 51 is DENIED, and Plaintiff's Bill of Costs 53 is GRANTED. Costs are awarded in the amount of $190.20. IT IS SO ORDERED. DATED this 10th day of August, 2016, by United States Magistrate Judge Stacie F. Beckerman. (peg)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
COBBLER NEVADA, LLC,
Plaintiff,
Case No. 3:15-cv-01550-SB
OPINION AND
ORDER
v.
ANONYMOUS USERS OF POPCORN
TIME: DOES 1-11,
Defendants.
BECKERMAN, Magistrate Judge.
Plaintiff Cobbler Nevada, LLC (“Plaintiff”), filed this action against eleven anonymous users
of Popcorn Time software, alleging a claim for copyright infringement under the Copyright Act, 17
U.S.C. §§ 101 et seq. The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1331 and
1338. For the reasons that follow, the Court grants Plaintiff’s Bill of Costs (ECF No. 53), and denies
Plaintiff’s motion for attorney fees (ECF No. 51).
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Page 1 - OPINION AND ORDER
BACKGROUND
Since 2014, Plaintiff’s counsel has filed approximately 300 cases in the United States District
Court for the District of Oregon, alleging that Doe defendants, initially identified only by their
Internet Protocol (“IP”) addresses, violated the Copyright Act by downloading movies on the Internet
using the “BitTorrent” protocol.1 BitTorrent is a peer-to-peer file sharing protocol used to distribute
data over the Internet.
In most of these BitTorrent copyright cases, the plaintiff is an out-of-state limited liability
company (“LLC”), that owns the copyright for the movie for which the LLC is named. For example,
in this case, Cobbler Nevada LLC is a Nevada LLC that owns the copyright for the 2015 movie, The
Cobbler, starring Adam Sandler. (Compl. ¶¶ 4, 6, ECF 1.) A Pacer search indicates that Cobbler
Nevada LLC has now filed 67 cases alleging copyright infringement in the District of Oregon, in
addition to at least 165 cases in other districts.
On August 16, 2015, Plaintiff filed its complaint in this case, naming eleven anonymous
users of Popcorn Time software as Doe defendants, identified only by their IP address, and alleging
that each defendant violated the Copyright Act by downloading The Cobbler using Popcorn Time
software. Popcorn Time is a software program that facilitates the exchange of movies over the
Internet, using the BitTorrent peer-to-peer file sharing protocol. According to Plaintiff, “Popcorn
Time promotes itself and is distributed in a manner that invites the most causal of Internet users to
1
Early cases filed by Plaintiff’s counsel joined many defendants in a single complaint. See,
e.g., Voltage Pictures, LLC v. Does 1-371, No. 3:13-cv-00295-AA (filed Feb. 19, 2013) (naming 371
Doe defendants). This district has since prohibited swarm joinder in BitTorrent copyright litigation.
See Standing Order 2016-8.
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enter the world of online theft and piracy with its ease of use and friendly logos.” (Mot. to Expedite
3 (ECF No. 6 ).)
Soon after filing its complaint, Plaintiff filed a motion for ex parte discovery, in an attempt
to ascertain the identity of the Doe defendants. (ECF 6.) Specifically, Plaintiff asked the Court for
permission to subpoena records from Internet Service Provider Comcast, to identify the subscriber
of each IP address. (ECF 6.) The Court granted plaintiff’s motion. (ECF 7.)
Over the next two months, Plaintiff filed joint motions with Doe Defendants No. 4, 5, 8, 9,
and 10, to approve consent judgments, and the Court approved and entered those consent judgments.
Each consent judgment referenced a separate settlement agreement Plaintiff had reached with the
Doe defendant, but did not reveal the terms of the settlement agreements. Two of the defendants who
agreed to consent judgments were not represented by counsel. See, e.g., ECF No. 15 (Doe No. 8),
ECF No. 24 (Doe No. 4).2 Plaintiff moved to dismiss Doe Defendants 2 and 11.
As to the Doe defendants who did not settle immediately ( Does 1, 3, 6, and 7), Plaintiff filed
a motion requesting that the Court authorize a Fed. R. Civ. P. (“Rule”) 45 deposition of each IP
address subscriber. (ECF 32.) The Court granted Plaintiff’s motion. (ECF 33.) Plaintiff later
dismissed Doe Defendants 3, 6, and 7, noting that Plaintiff was unable to identify a likely defendant
with sufficient particularity to permit Plaintiff to proceed. (ECF Nos. 35-37.)
Doe No. 1 (the only remaining defendant, and referred to herein as “Defendant”) declined
to answer Plaintiff’s questions at the Rule 45 deposition, or produce any documents responsive to
2
The district has since established a panel of lawyers who volunteer to provide up to three
hours of pro bono legal advice to subscribers and defendants in these actions. See Standing Order
2016-7.
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the Rule 45 subpoena, asserting his rights under the self-incrimination clause of the Oregon
Constitution and the Fifth Amendment of the United States Constitution. (ECF 44.) Nevertheless,
Doe No. 1 agreed to a stipulated consent judgment, which this Court entered on February 17, 2016.
(ECF 50.)
In the consent judgment, the parties agreed to an award of statutory damages in the
(mandatory minimum) amount of $750, and also agreed that the Court should award “reasonable
costs and fees” under 17 U.S.C. § 505 and Rule 54. (ECF 50 at 2.) On February 28, 2016, Plaintiff
filed its fee application, seeking $4,706.60 in fees, and $190.20 in costs. (ECF 51, 53.) Defendant
responded to the motion, asking the Court to reduce or deny the requested fee award, in part, because
to award attorney fees in this case would result in the “court . . . enforc[ing] [Plaintiff’s] legal
extortion of Defendant (and other similarly situated persons).” (ECF 54 at 7.)
DISCUSSION
A.
Plaintiff’s Bill of Costs
Plaintiff seeks a $190.20 cost award, including the $70 it incurred to subpoena Comcast, $45
to reimburse Defendant for appearing at the Rule 45 deposition, and $75.20 for the deposition
transcript. Defendant does not oppose the request. The Court has reviewed Plaintiff’s cost bill and
finds that the requested costs are appropriate to award. See 28 U.S.C. § 1920 (authorizing taxation
of costs).
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Page 4 - OPINION AND ORDER
B.
Plaintiff’s Motion for Attorney Fees
1.
Attorney Fee Awards in Copyright Cases are Discretionary.
The Copyright Act provides, in relevant part:
In any civil action under this title, a court in its discretion may allow the recovery of
full costs by or against any party other than the United States or an officer thereof.
Except as otherwise provided by this title, the court may also award a reasonable
attorney’s fee to the prevailing party as part of the costs.
17 U.S.C. § 505 (emphasis added). The Supreme Court has held that a district court may exercise
its discretion to grant, or deny, attorney fees to a prevailing party in a copyright case. See Fogerty
v. Fantasy, Inc., 510 U.S. 517, 534 (1994) (“[A]ttorney’s fees are to be awarded to prevailing parties
only as a matter of the court’s discretion.”); see also McCulloch v. Albert E. Price, Inc., 823 F.2d
316, 323 (9th Cir. 1987) (“[W]e do not believe Congress intended that the prevailing plaintiff should
be awarded attorney’s fees in every case.”); Columbia Pictures Television, Inc. v. Krypton Broad.
of Birmingham, Inc., 259 F.3d 1186, 1197 (9th Cir. 2001) (affirming denial of plaintiff’s motion for
attorney fees); Buck v. Bilkie, 63 F.2d 447, 447 (9th Cir. 1933) (same). Indeed, the Supreme Court
recently reiterated, in a unanimous decision, that Ҥ 505 grants courts wide latitude to award
attorney’s fees based on a totality of circumstances in a case.” Kirtsaeng v. John Wiley & Sons, Inc.,
— U.S. —, 136 S. Ct. 1979, 1985 (2016). The Supreme Court emphasized that “§ 505 confers broad
discretion on district courts and, in deciding whether to fee-shift, they must take into account a range
of considerations beyond the reasonableness of litigating positions[.]” Kirtsaeng, 136 S. Ct. at 1988.
The Supreme Court has identified “several nonexclusive factors to guide courts’ discretion,”
including “frivolousness, motivation, objective unreasonableness (both in the factual and in the legal
components of the case) and the need in particular circumstances to advance considerations of
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compensation and deterrence.” Fogerty, 510 U.S. at 534 n.19 (citation and quotation marks omitted);
see also Petrella v. Metro-Goldwyn-Mayer, Inc., 695 F.3d 946, 957 (9th Cir. 2012) (affirming denial
of motion for attorney fees in copyright case, and noting that district courts should consider, “‘among
other things: the degree of success obtained on the claim; frivolousness; motivation; objective
reasonableness of factual and legal arguments; and need for compensation and deterrence’”) (citation
omitted), rev’d on other grounds, — U.S. —, 134 S. Ct. 1962 (2014). In Kirtsaeng, the Supreme
Court noted that a court may also consider the need to “deter . . . overaggressive assertions of
copyright claims[.]” 136 S. Ct. at 1989.
The Ninth Circuit has held that “[t]he most important factor in determining whether to award
fees under the Copyright Act, is whether an award will further the purposes of the Act,” Mattel, Inc.
v. MGA Entm’t, 705 F.3d 1108, 1111 (9th Cir. 2013), and that the primary purpose of the Copyright
Act is to “encourage the production of original literary, artistic, and musical expression for the good
of the public.” SOFA Entm’t, Inc. v. Dodger Prods., Inc., 709 F.3d 1273, 1280 (9th Cir. 2013). See
also Fogerty, 510 U.S. at 527 (“[C]opyright law ultimately serves the purpose of enriching the
general public through access to creative works[.]”).
Recently, another court in this district denied a motion for attorney fees in a similar
BitTorrent copyright case, in part because “[l]itigation conduct that needlessly increases the expense
of resolving copyright disputes neither encourages innovation nor appropriately rewards an author’s
creation.” See Countryman Nevada, LLC v. Doe-73.164.181.226, — F. Supp. 3d —, No. 3:15-cv433-SI, 2016 WL 3437598, at *8 (D. Or. June 17, 2016) (“[U]nder the totality of the circumstances
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presented, the Court exercises its discretion to deny Plaintiff any attorney’s fees, notwithstanding the
fact that Plaintiff has prevailed on the merits of its copyright claim.”).
2.
The Court’s Discretion Applied.
In light of the totality of circumstances, the Court concludes that fee shifting is inappropriate
in this case.
While a copyright holder’s action against an individual BitTorrent copyright infringer is not
frivolous under the Copyright Act, the degree of success in each of these BitTorrent copyright cases
is minimal, in two respects. First, the $750 statutory damage award Defendant has agreed to pay is
low in relation to the amount of attorney fees Plaintiff has accrued ($4,706.60), to achieve that result.
See Milton H. Greene Archives, Inc. v. Julien’s Auction House LLC, 345 F. App’x 244, 249 (9th Cir.
2009) (noting that limited success, such as nominal damages, may support the denial of an attorney
fee award, and observing that “an award of attorneys’ fees that is ten times the amount recovered in
damages seems unreasonable under the circumstances”). Second, Plaintiff acknowledges that its
movie, The Cobbler, has been illegally downloaded over 10,000 times in Oregon alone. (Compl. ¶
11.) Although this case resulted in an injunction against one infringer, that result is de minimis in
relation to the serious online piracy problem Plaintiff seeks to combat. On balance, the degree of
success Plaintiff has achieved as the prevailing party in this litigation does not warrant requiring
Defendant to fund in toto Plaintiff’s enforcement of its copyright.
In addition to the degree of success obtained, the court may also consider the need for
deterrence as a relevant factor in making a fee award determination. Fogerty, 510 U.S. at 534 n.19.
For downloading a single movie, the Court is already requiring Defendant to pay $750 in statutory
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damages, as well as $190.20 to reimburse Plaintiff for its costs, for a total financial penalty of almost
$1,000. As this Court has noted in other cases, a financial penalty of that magnitude is sufficient to
deter Defendant, as well as others, from illegally downloading movies in the future. See, e.g., Glacier
Films (USA), Inc. v. Gallatin, No. 3:15–cv–01632–SB, 2016 WL 3148401, at *3 (D. Or. May 12,
2016) (“[C]ommon sense supports a conclusion that a $750 financial penalty for illegal downloading
one movie is more than sufficiently punitive to deter others from illegally downloading free movies
on the BitTorrent network. With knowledge that it will now cost $750 to watch a single movie on
the BitTorrent network, consumers should be motivated instead to spend a few dollars to rent the
same movie legally.”). In light of the substantial damage award already imposed, an attorney fee
award is not necessary to deter further infringement, nor is a fee award necessary to encourage
Plaintiff to continue to protect its rights, where Plaintiff has been vigilant to date and clearly has the
resources to police its copyright. See Grateful Dead Prod. v. Come ‘N’ Get It, No. 88 CIV. 4471
(MEL), 1994 WL 116052, at *1 (S.D.N.Y. Mar. 25, 1994) (denying prevailing plaintiffs’ application
for attorney fees, noting that “substantial damages have already been assessed against the defendants
[a small retail store and its owner]” and an award is not “required to encourage the plaintiffs to
protect their rights” where “[t]hey have been understandably vigilant in that cause and have the
resources to police their copyrights”); cf. Fogerty, 510 U.S. at 1028 (rejecting comparison of fee
shifting under the Civil Rights Act involving impecunious plaintiffs to fee shifting under the
Copyright Act, because “‘[e]ntities which sue for copyright infringement as plaintiffs can run the
gamut from corporate behemoths to starving artists; the same is true of prospective copyright
infringement defendants’”) (citation omitted).
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The Supreme Court and the Ninth Circuit have also recognized that a district court should
award attorney fees only if doing so will further the purposes of the Copyright Act. In these
BitTorrent copyright cases, the threat of fee-shifting has emboldened Plaintiff’s counsel to demand
thousands of dollars to settle a claim, even where the infringing defendant admits early in the case
that they illegally downloaded the movie. See, e.g., Countryman Nevada, LLC, 2016 WL 3437598,
at *2 (noting that plaintiff demanded $8,500 to settle the case after the defendant acknowledged
liability early in the case); Cobbler Nevada, LLC v. Reardon, No. 3:15-cv-01077-ST, 2015 WL
9239773, at *2 (D. Or. Dec. 16, 2015) (noting that unrepresented defendant agreed to consent
judgment in the amount of $8,500); see also Malibu Media, LLC v. Doe IP Address 66.108.67.10,
No. 15 Civ. 4369 (AKH), 2015 WL 4092417, at *2 (S.D.N.Y. July 6, 2015) (“Recent empirical
studies show that the field of copyright litigation is increasingly being overtaken by ‘copyright
trolls,’ roughly defined as plaintiffs who are ‘more focused on the business of litigation than on
selling a product or service or licensing their [copyrights] to third parties to sell a product or service.
The paradigmatic troll plays a numbers game in which it targets hundreds or thousands of
defendants, seeking quick settlements priced just low enough that it is less expensive for the
defendant to pay the troll rather than defend the claim.’”) (citation omitted). In several of these
BitTorrent copyright cases, defendants have agreed to pay the plaintiff’s settlement demands without
the benefit of counsel, see, e.g., Reardon, 2015 WL 9239773, at *2, and in almost every case, the
settlement agreements are confidential and not subject to court approval.3
3
In some cases, Plaintiff has pursued particularly vulnerable individuals. See, e.g., Cobbler
Nevada, LLC v. Gonzales, No. 3:15-cv–00866-SB (targeting an adult group foster care home);
Cobbler Nevada, LLC v. Snapp, No. 3:15-cv-01768-SB (targeting a woman living on Social Security
disability benefits).
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The Copyright Act, as it is being enforced in these BitTorrent cases, has created results
inconsistent with the goals of the Act. When an individual who has illegally downloaded a movie
is contacted by Plaintiff’s counsel, and faces the threat of a statutory damage award that could
theoretically reach $150,000 (see 17 U.S.C. § 504(c)(2)), as well as the threat of a substantial
attorney fee award, the resulting bargaining process is unequal, and unfair. For this Court to award
Plaintiff its attorney fees in this case would only contribute to the continued overaggressive assertion
and negotiation of these Copyright Act claims. See Kirtsaeng, 136 S. Ct. at 1989 (noting that a court
should consider the need to “deter . . . overaggressive assertions of copyright claims”). As another
court recently noted in a similar BitTorrent case, a federal court should make its tools available only
with careful scrutiny, to avoid the potential for abuse:
There is no doubt that online piracy of digital media is a major problem today.
Ordinarily, the ‘federal court system provides litigants with some of the finest tools
available to assist in resolving disputes.’ Those tools can empower copyright-owners
to enforce their rights, but they are also capable of being used as instruments of abuse.
Where abuse is likely, as it is here, courts should not make those tools available
without careful scrutiny.
Malibu Media, LLC, 2015 WL 4092417, at *6 (citation omitted). This Court has already provided
many of its tools to facilitate Plaintiff’s enforcement of its copyright, including allowing ex parte
discovery to identify the alleged infringers. However, exercising the Court’s discretion to require
Defendant to pay thousands of dollars in attorney fees, for illegally downloading a single movie,
would render an inequitable outcome that is inconsistent with the policies served by the Copyright
Act. See Fogerty, 510 U.S. at 524 (“[T]he policies served by the Copyright Act are more complex,
more measured, than simply maximizing the number of meritorious suits for copyright
infringement.”); Warner Bros Inc. v. Dae Rim Trading, Inc., 877 F.2d 1120, 1127 (2d Cir. 1989) (“In
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the district court’s discretion, fees need not be awarded if the award would not vindicate underlying
statutory policies or it would be inequitable.”) (citations omitted).
For these reasons, under the totality of the circumstances presented, the Court exercises its
discretion to deny Plaintiff’s motion for attorney fees.
CONCLUSION
For the reasons stated, Plaintiff’s motion for attorney fees (ECF No. 51) is DENIED, and
Plaintiff’s Bill of Costs (ECF No.53) is GRANTED. Costs are awarded in the amount of $190.20.
IT IS SO ORDERED.
DATED this 10th day of August, 2016.
____________________________
STACIE F. BECKERMAN
United States Magistrate Judge
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