Piracy ‘Extortion': Courts Cracking Down on Lawyers Targeting Porn Downloaders

Piracy 'Extortion': Courts Cracking Down on Lawyers Targeting Porn Downloaders

The most successful strategy to get consumers to pay up for viewing pirated films appears to be falling apart

The most successful strategy to get consumers to pay up for viewing pirated films appears to be falling apart.

Courts are starting to look askance at lawyers’ efforts to seize on downloaders of porn rather than Hollywood films and use the threat of public embarrassment to extract quick payments.

In courtrooms around the country, major internet service providers, consumer groups and some judges are raising questions about the legal tactics of lawyers who uncover the names of consumers whose accounts were allegedly used to view pirated films, then demand payments of up to $4,000 not to file lawsuits.

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The suits — made payable to the lawyers, not the content creators — are “not about stopping copyright theft, or stopping piracy,” Mitchell L. Stoltz, an attorney for the Electronic Frontier Foundation told TheWrap. “They are about making a quick buck.”

In the most significant court action so far, a Los Angeles federal court judge this month imposed sanctions on lawyers from a firm called Prenda Law, accusing them of fraud.

Prenda claimed to be pursuing 45 local piracy cases on behalf of owners of sexually explicit films, but the court believed the company’s “clients” were actually either employees or acquaintances of Prenda lawyers.

The judge, questioning whether Prenda was a “copyright troll,” fined the lawyers and asked both the IRS and the U.S. attorney to examine whether Prenda engaged in fraud.

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Nationwide, Prenda has filed cases targeting thousands of downloads of pornographic films around the country. It has been identified in court papers as being the Chicago law firm of Steele Hansemeier, though a principal of the law firm has denied involvement.

Neither officials of the law firm or a lawyer for some of the lawyers identified as being with the firm returned a request for comment.

The pirating suits face other court challenges, as well. In Washington, D.C., major internet service providers have asked an appellate court to bar plaintiff's lawyers from using a single nationwide lawsuit to obtain identities of consumers who viewed pirated films.

The ISPs contend that requests to reveal identities need to be pursued locally. A favorable decision in the case would dramatically drive up the cost of pursuing piracy cases. 

Ironically, the lawyers’ move into the anti-piracy game has come at a time when movie studios and record labels and their industry groups have avoided targeting consumers in favor of on stopping file-sharing sites.

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Aside from creating bad publicity – which the music industry learned the hard way – targeting consumers is difficult and expensive to pursue.

Determining whether a film title was “viewed” or just “accessed” on a file server and by whom, especially on a shared computer, can be difficult, and most federal courts have taken the view that illegal downloaders need to be sued within the jurisdiction of their own federal courts, requiring infringement suits to be pursued in multiple venues.

Also, the amount of payments would in most cases be negligible. “It is simply not economically viable to properly prosecute the illegal download of a single copyrighted video,” the judge in the Los Angeles case wrote in his court ruling earlier this month.

Tell that to lawyers like Prenda.

“The salacious nature of the content is a huge factor,” Morgan E. Pietz, a Los Angeles lawyer, who has fought against some of the piracy cases, told TheWrap. “It gives the plaintiff huge leverage. ‘Pay up front or the entire Internet is going to know.’ It is clothed in near legality of the court room, but it seems like extortion.”

In an interview with Forbes last year, one of Prenda’s lawyers said the firm generated “more than a few million” dollars in income from its cases. 

The problem is that internet service providers and consumer groups contend that many of those payments came from consumers who didn’t even view pirated movies but who won’t fight because they fear being publicly humiliated or the high costs of fighting the accusations in court.

In an appellate court suit filed in Washington, D.C., in December, Cox Communications, Fox Brighthouse Networks, Verizon Online, Comcast and AT&T, described what has been taking place.

“The cases typically involve pornographic films and follow ‘a common arc,’” the companies said. “A plaintiff sues anywhere from a few to thousands of [John] Doe defendants for copyright infringement in one action. The plaintiff seeks leave to take early discovery. Once the plaintiff obtains the identities of the IP subscribers through early discovery, it serves the subscribers with a settlement demand. The subscribers, often embarrassed about the prospect of being named in a suit involving pornographic movies, settle.”

A Friend of the Court brief filed in the case this month by EFF, the American Civil Liberties Union, Public Citizen and Public Knowledge said all the porn cases rely on fear of embarrassment.

“Imagine a home internet subscriber receives a letter in the mail. His internet account was observed ‘illegally downloading’ a pornographic movie. The letter explains that a copyright lawsuit has been filed in a court far from his home, and [he] will be named and potentially liable for up to $150,000 unless he settles the case for $3,000,” said the groups’ brief.  

The subscriber may not even have downloaded any pornographic film – someone else may have been using his computer, or it may have been a shared computer. “Still, defending a lawsuit would cost far more. The law firm is leaving increasingly threatening messages, and being publicly accused of downloading pornography may cost him a job, friends, and relationships.”

In the Washington case, the ISPs are trying to overturn a ruling that would allow Prenda in behalf of AF Holdings to obtain account information on 1,058 customers around the country who allegedly viewed a porn movie called “Popular Demand.”

The ISPs and consumer groups contend the lower court should have limited disclosure to any customers located in the Washington area. In allowing nationwide disclosure from a single lawsuit, they said the ruling could promote further abuse of the legal system.

“For the price of a single filing fee, plaintiffs and their attorneys can collect tens or hundreds of thousands of dollars from frightened Does who are unwilling or unable to fight back,” the consumer groups said in their brief.

In the Los Angeles case, Prenda’s attempt to learn the identify of a single consumer who illegally downloaded a porn movie called, “A Peak Behind the Scenes at the Show” quickly turned into a probe into whether suing attorneys engaged in legal misconduct after Pietz raised questions about the veracity of the “clients” named by Prenda attorneys in 45 similar Los Angeles piracy suits.

District Court Judge Otis D. Wright II on May 6 accused lawyers of gaming the legal system as part of a “porno-trolling collective” and questioned whether they engaged in fraud. Wright’s ruling accused the lawyers of claiming copyrights for a pornographic film that they didn’t really demonstrate they owned, offering a forged document as proof and forming a venture to pursue payments for the lawyers own benefit, rather than for any clients.

“Copyright laws originally designed to compensate starving artists allow starving attorneys in this electronic-media era to plunder the citizenry,” he wrote in a damning ruling fining lawyers nearly $82,319.

He asked both the IRS and the U.S. Attorney to investigate the attorneys for fraud.