Strike 3 Holdings, LLC v. Doe

Citation: 337 F. Supp. 3d 246Docket: 1:18-CV-00571 EAW

Court: District Court, W.D. New York; November 25, 2018; Federal District Court

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Plaintiff Strike 3 Holdings, LLC initiated legal action against defendant John Doe, associated with IP address 69.204.6.161, on May 17, 2018, claiming copyright infringement under the U.S. Copyright Act due to the unauthorized downloading and distribution of its adult films. The defendant filed a motion to quash a subpoena aimed at their Internet Service Provider (ISP) and sought to vacate a Protective Order issued by the Court. Additionally, the defendant requested anonymity in the litigation if the motion to quash was denied. The Court also reviewed Plaintiff's motion for an extension of time to serve the defendant. The Court denied the defendant's motion to quash and vacate, granted partial anonymity, and approved Plaintiff's request for an extension of time. 

The background includes that Plaintiff operates subscription websites for viewing its films and sells licenses and DVDs. It alleges that its works have been illegally downloaded via the BitTorrent network, a system for sharing large files. An investigator identified the defendant's IP address through geolocation technology, but the defendant's identity remains unknown. After the Court permitted the subpoena to the ISP on August 28, 2018, the defendant responded by filing motions on October 9, 2018, following notification from the ISP.

A motion to quash a subpoena under Rule 45 requires the court to invalidate or modify the subpoena if it seeks privileged information without exception, or if it imposes an undue burden. The burden of proof lies with the movant to demonstrate that the subpoena is overly broad, duplicative, or burdensome. Factors to consider include the plaintiff's evidence of actionable harm, the specificity of the discovery request, the availability of alternative information, the necessity of the information for the claim, and the objecting party's privacy expectations. Courts have discretion in determining the reasonableness of subpoenas.

For a motion to vacate an order under Rule 60, the party must show extraordinary circumstances not covered by clauses (1) to (5) of Rule 60(b). The petitioner in this case did not demonstrate such circumstances, and Rule 60(b) does not apply to interlocutory orders.

Regarding standing, even though the subpoena is directed at a third party, the defendant has standing to move to quash based on a privacy interest. The court found that the defendant's privacy interest grants them standing, as parties typically lack standing to challenge subpoenas directed at nonparties unless protecting a personal privilege or right. If a motion to quash involves a nonparty subpoena, the privilege claimed must be personal to the movant.

Peer-to-peer file copying networks used for downloading, distributing, or sharing sound recordings are recognized as speech protected by the First Amendment. Relevant case law includes Sony Music Entm't Inc. v. Does 1-40, which affirms this protection. There is also a limited First Amendment privacy interest in anonymous internet usage, as noted in Malibu Media, LLC v. John Does 1-11. Courts recognize that while individuals can challenge subpoenas to protect their anonymity, this does not grant a blanket immunity from copyright infringement claims. 

When evaluating a motion to quash a subpoena on the grounds of undue burden, courts consider factors such as relevance, the requesting party's need for the information, the breadth of the request, and the burden imposed on the recipient. The burden of compliance falls on the third-party ISP, not on the defendant, who argues that the subpoena imposes an undue burden due to the plaintiff's history of exploiting litigation. However, the court found these concerns irrelevant to the undue burden analysis, emphasizing that the actual burden of production lies with the ISP. Consequently, the defendant has standing to seek to protect their anonymity but the motion to quash based on undue burden is not supported by the court.

The subpoena issued to the Defendant does not require any action or production, meaning the Defendant cannot claim it imposes an undue burden, leading the Court to deny the motion to quash based on that argument. Regarding the copyright infringement claim, the Defendant seeks reconsideration of the Court's previous ruling under Rule 60(b)(6) but is informed that Rule 60(b) only applies to final orders, not interlocutory ones such as discovery orders. The Court's prior order allowing a third-party subpoena was considered interlocutory and therefore outside the scope of Rule 60(b). Even if reconsideration were possible, the Court finds the Defendant's arguments unconvincing. The Defendant contends that some copyrights are pending, creating uncertainty in the Second Circuit about the validity of infringement claims based on pending copyrights. However, the Plaintiff has since received registration certificates for all relevant works, satisfying the requirement for copyright registration necessary for filing an infringement claim. The Defendant's reliance on an unreported Southern District of New York case is deemed misplaced, as that case involved a lack of copyright registration details, unlike the current Complaint, which includes specific registration numbers and allows for verification through the Copyright Office's website. Thus, the Complaint adequately states a claim for copyright infringement.

Defendant argues that pornography is not categorically protected by copyright law, suggesting that Plaintiff's materials could be obscene and thus invalid. A certificate of copyright registration serves as prima facie evidence of copyright ownership, which the alleged infringer may contest. The burden of proof lies with the party challenging the copyright's validity. If a video is deemed obscene, it may lose eligibility for copyright protection. While courts are divided on whether obscenity affects copyright infringement claims, the Court notes that the Defendant has not provided evidence to support the claim of obscenity regarding the Works in question. Consequently, the Court denies Defendant's motion based on the failure to state a claim.

Regarding the advancement of Plaintiff's claim, Defendant requests to quash a third-party subpoena, arguing that the information sought will not assist Plaintiff. However, the Court finds the information necessary for Plaintiff to identify and serve Defendant, which is crucial for litigation to proceed. The need for this information is a significant factor in determining whether to grant a motion to quash. Without the identities and addresses of Doe defendants, Plaintiff cannot serve process, and thus the subpoena is upheld to facilitate the advancement of Plaintiff's claim.

Defendant claims that obtaining identifying information is irrelevant to Plaintiff's case, asserting that they did not reside at the involved address during the alleged copyright infringement and that an IP address alone may not reliably identify infringers. However, a general denial of liability is insufficient grounds to quash a subpoena. Legal precedents indicate that the existence of potential defenses does not impact the validity of a subpoena for discovery purposes. 

Defendant also argues that the lawsuit represents an improper circumvention of the Digital Millennium Copyright Act (DMCA), which allows for subpoenas to identify infringers. The court rejects this assertion, clarifying that while the Second Circuit has not ruled on the issue, other circuits have determined that the DMCA does not prevent copyright owners from seeking subpoenas from ISPs serving merely as conduits for data transfer. Even if the DMCA were applicable, it does not prohibit subpoenas issued through other legal mechanisms, such as Rule 45. 

Furthermore, the Defendant's reliance on an unreported opinion from a Minnesota magistrate judge is deemed misplaced, as that ruling overlooked exceptions within the Communications Act allowing for such disclosures under court orders. The majority of relevant case law supports granting subpoenas to third parties under these circumstances, indicating that the cited opinion holds little weight in broader judicial practice.

In Strike 3 Holdings, LLC v. Doe, the court upheld the permissibility of serving a third-party subpoena under Rule 26(d)(1), following the framework established in Arista Records. The court found no merit in the defendant's claim that the subpoena constituted an improper circumvention of the DMCA, despite the defendant's characterization of the litigation as an early instance of "copyright troll" tactics aimed at exploiting judicial resources. The court noted that while many of the plaintiff's cases end in voluntary dismissal after obtaining permission to serve subpoenas, the plaintiff had demonstrated a willingness to litigate by filing amended complaints in some cases. The defendant's allegations of abusive practices, such as using identifying information for leverage or filing multiple lawsuits to evade fees, were unsupported by evidence. Consequently, the court denied the defendant's motion to quash the subpoena.

Regarding the defendant's request for anonymity in litigation, the court partially granted the request, allowing the defendant to be identified only as "John Doe subscriber assigned IP address 69.204.6.161" in public filings. The defendant cited Patrick Collins, Inc. v. Doe 1 to support the need for anonymity, referencing a precedent where a court offered additional privacy protections due to a plaintiff's abusive litigation tactics. The court indicated that it would follow similar procedures as in prior cases, maintaining the defendant's privacy while allowing for the necessary legal processes to continue.

The Court determines that heightened anonymity procedures are unnecessary in this case based on the current record. Even with such measures, Defendant's anonymity would not be fully protected, as necessary information for service would be disclosed during status conferences. There is no evidence suggesting that Plaintiff has engaged in abusive litigation tactics similar to those in the Patrick Collins case; in fact, Plaintiff has shown respect for Defendant's privacy by agreeing to allow Defendant to proceed pseudonymously as "John Doe" instead of by initials. Consequently, the Protective Order is amended to require that Defendant be referred to as "John Doe subscriber assigned IP address 69.204.6.161" in public filings. All other protections from the original Protective Order remain intact, including the confidentiality of information disclosed under the subpoena.

Plaintiff's request for an extension of time to serve the Complaint is granted due to good cause under Fed. R. Civ. P. 4(m). The extension is justified because Plaintiff has been unable to identify Defendant pending a response from the ISP, as allowed by the Protective Order. Therefore, Plaintiff must serve the Complaint by January 9, 2019. The Court denies Defendant's Motion to Quash and partially grants Defendant's request to proceed anonymously, amending the Protective Order accordingly.

Some Second Circuit courts have been influenced by concerns regarding improper litigation tactics when considering requests for leave to serve third-party subpoenas. In cases such as *Patrick Collins, Inc. v. Doe*, the court denied such requests, noting that the plaintiff's reliance on the defendant's IP address alone was inadequate for identifying the defendant and that the plaintiff had employed improper strategies to leverage personal information for settlement. Similarly, in *Malibu Media, LLC v. Doe*, the court denied the plaintiff's request partly due to insufficient evidence from the IP address and the plaintiff's history of attempting to embarrass defendants. In contrast, the current Court has already granted the plaintiff leave to serve a third-party subpoena, finding no evidence of abusive tactics by the plaintiff. Additionally, the Court has issued a Protective Order aimed at reducing the risk of the plaintiff misusing the information obtained. This aligns with the findings in *Malibu No. 15-cv-3147*, where the court determined that the plaintiff could serve a subpoena and had already issued a protective measure. The Court has reiterated compliance with the statute's requirements in its Protective Order.