Fox Television Stations, Inc. v. Filmon X LLC

• Decision Date: 12 September 2013
• Docket Number: Civil Action No. 13–758 (RMC).
• Citation: 968 F.Supp.2d 134
• Parties: FOX TELEVISION STATIONS, INC., et al., Plaintiffs, v. FILMON X LLC, et al., Defendants.
• Court: U.S. District Court — District of Columbia

968 F.Supp.2d 134

FOX TELEVISION STATIONS, INC., et al., Plaintiffs,

v.FILMON X LLC, et al., Defendants.

Civil Action No. 13–758 (RMC).

United States District Court, District of Columbia.

Sept. 12, 2013.

Paul March Smith, Jenner & Block LLP, Murad Hussain, Robert Alan Garrett, Arnold & Porter LLP, Washington, DC, Amy M. Gallegos, Julie Ann Shepard, Richard L. Stone, Jenner & Block LLP, James Spencer Blackburn, John Charles Ulin, Arnold & Porter, LLP, Los Angeles, CA, for Plaintiffs.

Jaime W. Marquart, Ryan G. Baker, Baker Marquart LLP, Los Angeles, CA, Kerry J. Davidson, Law Office of Kerry J. Davidson, Silver Spring, MD, for Defendants.

MEMORANDUM OPINION

ROSEMARY M. COLLYER, District Judge.

Plaintiffs, a group that includes over-the-air television broadcasters and programmers,sued Defendants, entities that operate an online service called FilmOn X, for violating their public performance rights for copyrighted television programs. On September 5, 2013, the Court granted Plaintiffs' motion for a preliminary injunction, concluding that Plaintiffs are likely to succeed on their copyright infringement claim and that all the preliminary injunction factors favor Plaintiffs. SeeOp. [Dkt. 33], 966 F.Supp.2d 30, 2013 WL 4763414 (D.D.C.2013) , Prelim. Inj. [Dkt. 34]. The Preliminary Injunction provided that it would become effective immediately upon the posting of a $250,000 bond, Prelim. Inj. ¶ 5, and that FilmOn X must certify compliance, under oath, “[w]ithin three court days of the effective date of [the] Preliminary Injunction,” id. ¶ 6. For the reasons stated in the Opinion, the Court found that 17 U.S.C. § 502(b) required the Preliminary Injunction to have nationwide effect, but the Court omitted the geographic area of the Second Circuit from the coverage of the Injunction to avoid conflict with that court's decision in WNET, Thirteen v. Aereo, Inc. (Aereo II), 712 F.3d 676 (2d Cir.2013). Plaintiffs posted the required bond on September 9, 2013, meaning that FilmOn X must certify compliance with the Preliminary Injunction no later than today, September 12, 2013.

On September 11, FilmOn X filed two emergency motions: an Emergency Motion to Stay the Injunction Pending Appeal and/or to Modify the Injunction, Dkt. 36; and an Emergency Motion for Reconsideration of the Geographic Scope of the Preliminary Injunction and Bond Amount, Dkt. 37. Plaintiffs oppose FilmOn X's motions. See Opp. Mot. Stay [Dkt. 39]; Opp. Mot. Recons. [Dkt. 40].

FilmOn X seeks the following relief: ¹

• A stay of the Preliminary Injunction, in its entirety, pending FilmOn X's appeal to the D.C. Circuit. Mem. Supp. Mot. Stay at 3–11.

• A stay of the Preliminary Injunction in all circuits except for the D.C. Circuit. Id. at 11 n. 6.

• Modification of the Preliminary Injunction so that it covers only the D.C. Circuit. Id. at 11–13; Mem. Supp. Mot. Recons. at 3–8.

• An increase in the bond amount to $250,000 for each circuit in which FilmOn X is enjoined— i.e., $2, 750, 000 for eleven circuits—or an otherwise substantial increase. Mem. Supp. Mot. Recons. at 8–9.

The Court addresses FilmOn X's arguments in two groups: (1) its request for a stay and (2) its request for reconsideration. As discussed below, the Court concludes that the public benefit is not harmed by issuance of the Preliminary Injunction. While the Injunction remains in place, FilmOn X's innovative technology can be used by the public, via computer or mobile device, to access material that is properly licensed from copyright holders. The conduct prohibited by the Preliminary Injunction is uncompensated infringement of those holders' exclusive right to public performance of their works, and the public interest is not harmed by requiring FilmOn X to cease infringement. FilmOn X's emergency motions will be denied in all respects.

I. STAY

A. Legal Standard

Federal Rule of Civil Procedure 62(c) authorizes courts to stay an injunction pending appeal. To determine whether to grant the stay, the Court must weigh the same four factors it considers when determining whether to grant an injunction: “(1) the likelihood that the party seeking the stay will prevail on the merits of the appeal; (2) the likelihood that the moving party will be irreparably harmed absent a stay; (3) the prospect that others will be harmed if the court grants the stay; and (4) the public interest in granting the stay.” Cuomo v. NRC, 772 F.2d 972, 974 (D.C.Cir.1985) (citing WMATA v. Holiday Tours, Inc., 559 F.2d 841, 843 (D.C.Cir.1977)).

B. Analysis

Because the factors bearing on a stay pending appeal are the same factors the Court evaluated in granting Plaintiffs' motion for a preliminary injunction, the parties' arguments are mostly the same as those set forth in the Court's Opinion. FilmOn X's argument that the injunction should be stayed pending appeal derives from its basic legal position in this case: that “FilmOn X's system merely enables consumers to personally make and privately view performances from individual copies, at the consumer's convenience,” and thus FilmOn X does not infringe Plaintiffs' public performance rights in their copyrighted material. Mem. Supp. Mot. Stay at 5. Because the conflict between (1) the Second Circuit's Aereo II decision and (2) BarryDriller² and this Court's ruling presents important legal questions that need resolution, FilmOn X asserts that this Court should stay the Preliminary Injunction pending appellate review. Moreover, FilmOn X asserts that it will suffer “grave irreparable harm” if the Injunction is not stayed because “[t]he preliminary injunction does not apply to Aereo or other companies who provide similar remote DVR-like capabilities to consumers,” allowing those companies to seize market share at FilmOn X's expense. Id. at 7–8. Finally, according to FilmOn X, “there is a strong public demand for the technological services offered by FilmOn X,” so the public interest will be served by a stay. Id. at 10–11.

Plaintiffs respond that “[t]he mere existence of two non-controlling, widely-criticized cases supporting FilmOn X [ Cablevision and Aereo II ] does not create a strong likelihood that the D.C. Circuit will reverse the injunction.” Opp. Mot. Stay at 4. Plaintiffs also assert that the Court should reject FilmOn X's claim that it will suffer harm based on Aereo not being enjoined, emphasizing that “FilmOn X's argument boils down to the plea that it should be allowed to continue to infringe because there is another infringing service in operation (Aereo) with which FilmOn X competes.” Id. at 5.

FilmOn X's arguments are not persuasive. The Court weighed the relevant factors—likelihood of success on the merits, possibility of irreparable harm, balance of the harm, and the public interest—in its Opinion and concluded that all four considerations favor Plaintiffs. SeeOp., 966 F.Supp.2d at 44–51. That conclusion remains in equal force now. Most importantly, Plaintiffs are likely to succeed on the merits of their claim because the Copyright Act and, in particular, the Transmit Clause are clear: “FilmOn X transmits (i.e., communicates from mini-antenna through servers over the Internet to a user) the performance (i.e., an original over-the-air broadcast of a work copyrighted by one of the Plaintiffs) to members of the public (i.e., any person who accesses the FilmOn X service through its website or application) who receive the performance in separate places and at different times (i.e., at home at their computers or on their mobile devices).” Op., 966 F.Supp.2d at 46–47. In reaching its conclusion, this Court joined BarryDriller in respectfully disagreeing with the Aereo II court's reading of the Transmit Clause as myopically focused on the nature of the transmission, not whether the work was publicly performed. The only change FilmOn X has identified is that Aereo, its competitor, is not enjoined. But this argument is backwards: FilmOn X claims that the Preliminary Injunction has created irreparable harm because FilmOn X will not be able to keep pace with a similar service that also appears to infringe Plaintiffs' copyrights. FilmOn X, not Aereo, is the defendant in this case; the Court has already concluded that, at least at the preliminary injunction stage, the balance of irreparable harms and the public interest favor an injunction.

FilmOn X has not shown “either a high probability of success and some injury, or vice versa,” as would support a stay of the Preliminary Injunction—in its entirety or even with respect to areas outside the D.C. Circuit—pending appeal. Cuomo, 772 F.2d at 974. FilmOn X's motion to stay will be denied.

II. RECONSIDERATION

A. Legal Standard

Viewing the preliminary injunction as an interlocutory ruling, FilmOn X argues that the Rule 54(b) “as justice requires” standard applies to its motion for reconsideration. Mem. Supp. Mot. Recons. at 2–3 (citing, inter alia, Cobell v. Norton, 355 F.Supp.2d 531, 539 (D.D.C.2005)). Rule 54(b) applies to “any order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties.” Plaintiffs respond that the heightened standard of Rule 59(e) for reconsideration of final judgments—not the “as justice requires” standard of Rule 54(b)—applies to preliminary injunctive orders that can be appealed under 28 U.S.C. § 1292(a)(1). See Opp. Mot. Recons. at 2–3.

The question is slightly more complex than either party recognizes. In determining whether to treat a motion for reconsideration of a preliminary injunction as a motion to modify the injunction pursuant to Rule 62(c) or as a motion for reconsideration pursuant to Rule 59(e), courts “look beyond the motion's caption to its substance” and “compare the circumstances existing on ... the date of entry of the order granting the preliminary injunction, with the circumstances existing when the motion to modify was made.” Favia v. Ind. Univ. of Pa., 7 F.3d 332, 337 (3d Cir.1993).³...