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Louisiana State Univ.

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Tuesday, May 4, 2010

Second Circuit Affirms Refusal To Quash Subpoena In Music Downloading Case

The Second Circuit has affirmed a lower court's refusal to quash a subpoena served on an ISP to disclose the identities of anonymous users alleged to be downloading music in violation of a plaintiff's copyrights. The case is Arista v. Doe 3, 09-0905-cv.


Pursuant to Fed. R. Civ. P. 72, Doe 3 objected to the magistrate judge's denial of the motion to quash, and sought "de novo review," "reversing" and "overruling" that order. As a threshold procedural matter, Doe 3 argued that the motion to quash had been referred to the magistrate judge "without the consent of either party, and without an actual order of referral from the District Judge" ....He also argued that the motion should not have been referred to a magistrate judge for decision because "[t]he motion, while styled as one to quash a subpoena, actually challenged the legal sufficiency of the complaint in the nature of a motion under F.R.Civ.P. 12(b)(6). As such it is dispositive" because "the motion to quash would for practical purposes be determinative of the outcome of the present litigation . . . ." (Doe 3's Objections to Magistrate Judge's Memorandum Decision and Order at 1, 2). Doe 3 argued that the magistrate judge thus lacked jurisdiction to decide the motion to quash and that Doe 3 was entitled to have the district judge review the magistrate judge's decision de novo. As to substance, Doe 3 contended, to the extent pertinent to this appeal, that the magistrate judge's order erred in "its conclusion that the complaint states a legally cognizable claim, and that 'making available' music files is automatically copyright infringement." ...


In a Decision and Order dated March 5, 2009 ("Arista II"), District Judge Suddaby rejected Doe 3's objections. The court first rejected Doe 3's contention that his motion--which had requested the quashing of the subpoena or the severance of the claims against the various defendants--was a dispositive motion. ... The court rejected the proposition that the motion to quash was in essence a motion to dismiss under Rule 12(b) (6) and hence was a dispositive motion,  noting that that Rule, by its terms, confers the right to move for dismissal for failure to state a claim on "'a party.'" .... The defendants, not having been served with process, were "not yet 'parties'" and thus could "not properly move for dismissal for failure to state a claim. "...Given that the motion to quash or sever was a nondispositive motion, the court implicitly rejected Doe 3's contention that the magistrate judge lacked authority to rule on it.

Further, because the motion to quash or sever was a nondispositive motion, the district judge concluded that the proper standard for reviewing the magistrate judge's order was "clear error, not de novo. " ...The court found no clear error in the magistrate judge's order. It also determined that it would reach the same conclusion "even [upon] de novo review."...

This appeal followed. The order is appealable under the collateral order doctrine, as the subpoena at issue "'is directed against a third party who is unlikely to risk being held in contempt to vindicate someone else's rights.'" .... On motion of Doe 3, this Court stayed SUNYA's compliance with the subpoena with respect to information pertaining to Doe 3 pending resolution of the appeal.

...

On appeal, Doe 3 principally argues that the Complaint does not state a claim sufficient to overcome his First Amendment privilege of anonymity. He also pursues his contentions that his motion to quash was improperly referred to the magistrate judge and that the district court thus erred by not reviewing the magistrate judge's decision de novo. We find no merit in Doe 3's contentions.

...


The district court may designate a magistrate judge to hear and decide a pretrial matter that is "not dispositive of a party's claim or defense." ...Like most discovery requests directed to opposing parties, subpoenas to nonparties are designed to elicit information. A motion to quash a subpoena in an action seeking relief other than production of the subpoenaed information is not normally a dispositive motion.

As to a nondispositive matter, "[t]he district judge in the case must consider timely objections and modify or set aside any part of the [magistrate judge's] order that is clearly erroneous or is contrary to law." ...As to a dispositive matter, any part of the magistrate judge's recommendation that has been properly objected to must be reviewed by the district judge de novo. ...

In the present case, the Doe defendants' motion to quash plaintiffs' subpoena to SUNYA was not a dispositive motion. Although Doe 3 contends to the contrary, arguing that the magistrate judge "necessarily had to decide whether the complaint stated a claim or not" ... that argument ignores, inter alia, all factors other than the viability of the Complaint. Applying the five-factor Sony Music test, the magistrate judge could have granted the motion to quash despite the sufficiency of the Complaint if it had found, for example, that the subpoena was unduly broad or that plaintiffs had easy access to the Doe defendants' identities through other means. Quashing the subpoena on such a basis plainly would not have ended the action.

In addition, Doe 3's contention that the motion to quash was the equivalent of a motion to dismiss for failure to state a claim ignores arguments he made to the magistrate judge. He argued that in order to overcome the qualified privilege, a plaintiff must produce evidence supporting each element of its claim "[i]n addition to establishing that its action can withstand a motion to dismiss for failure to state a claim." (Does' Amended Memorandum at 12 (internal quotation marks omitted) (emphasis in Memorandum).)

Finally, even if Doe 3 were correct in characterizing the motion to quash as a dispositive matter, the only consequence would have been that review by the district judge should have been de novo. Given that the district judge stated that he would conclude that the motion should be denied even if he reviewed the matter de novo, Doe 3's procedural contention provides no basis for reversal.

...


A district court's ruling on a motion to quash a subpoena is reviewable for abuse of discretion. ...A court abuses its discretion when its decision rests on an error of law or on a clearly erroneous factual finding,... "or [when] its decision-- though not necessarily the product of a legal error or a clearly erroneous factual finding--cannot be located within the range of permissible decisions.... We see no abuse of discretion in the refusal to quash the subpoena in the present case.

The fundamental copyright principles are clear. The owner of a copyright has the exclusive right to--or to license others to--reproduce, perform publicly, display publicly, prepare derivative works of, and distribute copies of, his copyrighted work. ...To establish infringement of copyright, "two elements must be proven: (1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original. " ...

Further, " [a] 1 though ' [t]he Copyright Act does not expressly render anyone liable for infringement committed by another,'" ... it is well established, based on "the common-law doctrine that one who knowingly participates or furthers a tortious act is jointly and severally liable with the prime tortfeasor," that "one who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be held liable as a 'contributory' infringer," ... The knowledge standard is an objective one; contributory infringement liability is imposed on persons who "know or have reason to know" of the direct infringement, ...Such "liability exists if the defendant engages in 'personal conduct that encourages or assists the infringement,'" .... The "'resolution of the issue . . . depends upon a determination of the function that [the alleged infringer] plays in the total [reproduction] process.'"  ...


The relevant First Amendment principles are also well established. The Supreme Court has recognized that the First Amendment provides protection for anonymous speech. ... In the context of political speech, the Supreme Court has recognized that " [a] nonymity is a shield from the tyranny of the majority," ... The Court has also recognized that the Internet is a valuable forum for the exchange of ideas. ...To the extent that anonymity is protected by the First Amendment, a court should quash or modify a subpoena designed to breach anonymity.

...


The First Amendment does not, however, provide a license for copyright infringement. ...Thus, to the extent that anonymity is used to mask copyright infringement or to facilitate such infringement by other persons, it is unprotected by the First Amendment.


As indicated in Part I. A. above, the legal standard applied by the district court in the present case in denying the moving Doe defendants' motion to quash plaintiffs' subpoena to SUNYA was the standard adopted by the court  in Sony Music, 326 F.Supp.2d 556. In Sony Music, after discussing the above principles, as well as several cases that had dealt with the tension between First Amendment rights and copyright rights, then-District Judge Chin concluded that in the analysis of whether the qualified privilege requires that the subpoena be quashed, the principal factors include

(1) [the] concrete[ness of the plaintiff's] showing of a prima facie claim of actionable harm, . . . (2) [the] specificity of the discovery request, . . . (3) the absence of alternative means to obtain the subpoenaed information, . . . (4) [the] need for the subpoenaed information to advance the claim, . . . and (5) the [objecting] party's expectation of privacy.

...

We agree that this constitutes an appropriate general standard for determining whether a motion to quash, to preserve the objecting party's anonymity, should be granted.

On this appeal, Doe 3 does not contend that the Sony Music standard used by the district court here was an erroneous legal standard. Although he asserts that "downloading, distributing, or making music available constitutes protected First Amendment speech"

...


Nor does Doe 3 articulate any challenge to the court's evaluation of most of the five factors of the Sony Music standard, i.e., the specificity of the information request, the plaintiffs' need for and the limited availability of the information requested, and the anonymous person's expectation of privacy. Rather, Doe 3 contends that the court should have found that plaintiffs did not make a "particularized showing" (Doe 3 brief on appeal at 20) sufficient to overcome his qualified privilege. In support of his position, Doe 3 contends that the Supreme Court's recent decisions in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007) ("Twombly"), and Ashcroft v. Iqbal, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) ("Iabal"), imposed "heightened pleading standards" (e.g., Doe 3 brief on appeal at 18, 28-29) such that plaintiffs were required

to present specific evidence, including a declaration on personal knowledge from the person who examined the files available for download from each defendant's computer, listened to the files, verified that they were copyrighted songs, determined that the copyrights were registered (and to which plaintiffs), and determined what songs a particular defendant downloaded

(id. at 28). Neither Doe 3's reliance on Twombly/Iqbal nor his contention that plaintiffs' allegations are insufficiently specific has merit.

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