In re Subpoena Issued to Birch Commc'ns, Inc.

• Decision Date: 05 May 2015
• Docket Number: 1:14-cv-3904-WSD
• Court: U.S. District Court — Northern District of Georgia
• Parties: IN RE SUBPOENA ISSUED TO BIRCH COMMUNICATIONS, INC. f/k/a CBeyond Communications, LLC

IN RE SUBPOENA ISSUED TO BIRCH COMMUNICATIONS, INC.

f/k/a CBeyond Communications, LLC

1:14-cv-3904-WSD

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION

May 5, 2015

OPINION AND ORDER

This matter is before the Court on Rightscorp, Inc.'s ("Rightscorp") Objections [19] to Magistrate Judge Janet F. King's January 16, 2015, Order [18].¹ In her January 16th Order, Magistrate Judge King granted CBeyond Communications, LLC's ("CBeyond")² Motion to Quash [1] a subpoena issued by Rightscorp, but denied CBeyond's request for sanctions, contained in its Motion to Quash. Also before the Court is CBeyond's Second Motion for Sanctions [21], contained in its Response to Rightscorp's Objections.

I. BACKGROUND

Rightscorp is a "representative of various copyright owners . . . on matters involving the infringement of their copyrighted sound recordings." (Mot. to Quash [1] at 2) (quoting Rightscorp Decl. at ¶ 1).

CBeyond is a regional Internet Service Provider ("ISP") that provides internet access to its customers. (Id.).

On September 19, 2014, Rightscorp obtained from the United States District Court for the Central District of California a subpoena (the "Subpoena"), pursuant to the Digital Millennium Copyright Act ("DMCA"), 17 U.S.C. § 512.³ The Subpoena seeks the "name, address, telephone number, and email address sufficient to identify the alleged infringers of copyrighted sound recordings identified by [Internet Protocol ("IP")] addresses in the notices attached to . . . th[e] Subpoena." ([1.1] at 2). The notices attached to the Subpoena detail 1,326 separate instances of alleged copyright infringement by CBeyond customers using 71 unique IP addresses.⁴

On October 17, 2014, CBeyond filed its Motion to Quash [1]. CBeyond argues, among others, that Section 512(h) authorizes issuance of a subpoena only to an ISP that performs a storage function, and because CBeyond does not store or host the allegedly infringing materials referenced in the Subpoena, the Subpoena is not valid.⁵ CBeyond also seeks to recover its attorney's fees and costs incurred in defending against the Subpoena.

On January 16, 2015, Magistrate Judge King issued her Order granting CBeyond's Motion to Quash. Magistrate Judge King found that Section 512(h)(2) requires a copyright owner to submit, with its request for subpoena, a copy of a notice containing information required under Section 512(c)(3)(A); that Section 512(c)(3)(A)(iii) requires that the copyright holder identify the allegedly infringing material to be removed "and information reasonably sufficient to permit the service provider to locate the material;" and that a copyright owner cannot comply with this requirement regarding conduit ISPs, like CBeyond, that merely allow for transfer of information between its users, because there are no infringing materialsmaintained by those types of ISPs. Magistrate Judge King thus concluded that the Subpoena was not authorized under Section 512(h). Magistrate Judge King also declined to award sanctions against Rightscorp, concluding that issuance of a subpoena to a conduit ISP under Section 512(h) was an issue of first impression in our Circuit, and that Rightscorp's interpretation of Section 512(h), "although not persuasive, is not frivolous, and . . . Rightscorp's issuance of the subpoena [was not] unreasonable." (Order at 9-10).

On January 30, 2015, Rightscorp filed its Appeal of Magistrate Judge King's January 16th Order.

On February 12, 2015, CBeyond filed its Response and again moved for sanctions against Rightscorp.

II. DISCUSSION

A. Standard of Review

The parties dispute whether the Motion to Quash is a dispositive motion and thus whether Magistrate Judge King had the authority to decide it. Rightscorp contends that the Court should construe the January 16th Order as a Report and Recommendation ("R&R"), subject to a de novo review of Rightscorp's objections. CBeyond argues that, because a motion to quash is not listed as a matter excepted from a magistrate judge's authority, Magistrate Judge King'sOrder should be reviewed under the "clearly erroneous or contrary to law" standard.

Under 28 U.S.C. § 636(b)(1)(A), a magistrate judge has the authority to hear and determine any nondispositive pretrial matter, and "the court may reconsider any pretrial matter [within the jurisdiction of the magistrate judge] where it has been shown that the magistrate judge's order is clearly erroneous or contrary to law." 28 U.S.C. § 636(b)(1)(A); see also Fed. R. Civ. P. 72(a) (district judge "must consider timely objections and modify or set aside any part of the [magistrate judge's] order [on a nondispositive pretrial matter] that is clearly erroneous or is contrary to law").

Section 636(b)(1)(A) excludes from a magistrate judge's authority "a motion for injunctive relief, for judgment on the pleadings, for summary judgment . . . to dismiss for failure to state a claim upon which relief can be granted, and to involuntarily dismiss an action." 28 U.S.C. § 636(b)(1)(A). For these dispositive motions, a magistrate judge may issue propose findings and recommendations, which the court may accept, reject, or modify. 28 U.S.C. § 636(b)(1)(B). A district judge "shall made a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." 28 U.S.C. § 636(b)(1).

The Court concludes that CBeyond's Motion to Quash is a dispositive motion. Although typically "a motion to enforce [or quash] a subpoena in a civil action would be a routine matter which a magistrate judge could dispose of as a nondispositive motion," here, the Subpoena is "not part of a larger case before the court," and a decision on the Motion to Quash will end the proceeding in this Court. Cf. NLRB v. Frazier, 966 F.2d 812, 817 (3rd Cir. 1992) (motion filed in district court to enforce subpoena issued by NLRB in administrative proceeding was dispositive; district court filing was independent proceeding, decision on motion would effectively end litigation in district court, and thus motion to enforce agency subpoena was more like a motion to dismiss).

The Subpoena in this action arose from alleged copyright infringement that is not yet—and may never become—the subject of an action pending in any court. Rightscorp obtained the Subpoena pursuant to 17 U.S.C. § 512(h), the purpose of which is "to obtain the identity of an alleged infringer . . . [to] be used for the purpose of protecting rights under this title," including filing a complaint against the alleged infringer. See 17 U.S.C. § 512(h)(2)(C). "[T]he question of whether or not to enforce the [S]ubpoena is the only matter before the [C]ourt" and "[o]nce the [C]ourt grants or quashes the [S]ubpoena, it determines with finality the duties of the parties." See Frazier, 966 F.2d at 817-818. The Court concludes thatCBeyond's Motion to Quash is a dispositive motion. Cf. id.; In re Oral Testimony of a Witness Subpoenaed Pursuant to Civil Investigative Demand No. 98-19, 182 F.R.D. 196 (E.D. Va. 1998) (because motion to enforce civil investigative demand subpoena was a dispositive motion, district court construed magistrate judge's order enforcing subpoena as a report and recommendation subject to de novo review); NLRB v. Durham School Servs., L.P., 2014 WL 7662293, at *5 (N.D. Fla. Oct. 10, 2014) (finding motion to enforce administrative subpoena dispositive and issuing R&R stating, "[w]hile a motion to enforce a subpoena arising as part of a discovery dispute in a civil action might ordinarily be handled by a magistrate judge as a nondispositive matter, a proceeding [to enforce an administrative subpoena] does not occur during the discovery process of a civil case at large. Rather, this enforcement proceeding is in essence a civil action unto itself.").⁶

Having found that the Motion to Quash is a dispositive motion, the Court construes Magistrate Judge King's January 16th Order as a Report andRecommendation. In view of Rightscorp's objections, the Court conducts a de novo review of the record. See 28 U.S.C. § 636(b)(1).

B. Motion to Quash the Subpoena

1. Framework of the DMCA

17 U.S.C. § 512(h) permits a copyright owner, or its agent, to "request the clerk of any United States district court to issue a subpoena to [an ISP] for identification of an alleged infringer." 17 U.S.C. § 512(h)(1). A request for issuance of a subpoena must include, among others, a "copy of a notification described in subsection (c)(3)(A)." 17 U.S.C. § 512(h)(2)(A).⁷ Section 512(c)(3)(A) requires that the notification include:

(iii) Identification of the material that is claimed to be infringing or to be the subject of infringing activity and that is to be removed or access to which is to be disabled, and information reasonably sufficient to permit the service provider to locate the material.

17 U.S.C. § 512(c)(3)(A)(iii). "If the notification filed satisfies the provisions of subsection (c)(3)(A), the proposed subpoena is in proper form, and the accompanying declaration is properly executed, the clerk shall expeditiously issue and sign the proposed subpoena and return it to the requester for delivery to the[ISP]." 17 U.S.C. § 512(h)(4) (emphasis added). "Upon receipt of the issued subpoena, either accompanying or subsequent to the receipt of a notification described in subsection (c)(3)(A), the service provider shall expeditiously disclose to the copyright owner or person authorized by the copyright owner the information required by the subpoena . . . ." 17 U.S.C. § 512(h)(5) (emphasis added). A notification that satisfies Section 512(c)(3)(A) is thus a mandatory part of the subpoena request and a condition precedent to issuance of, and compliance with, a subpoena under Section 512(h). See 17 U.S.C. § 512(h)(2), (4)-(5).

The notification provision of Section 512(c)(3)(A) is in one of the DCMA's "safe harbor" provisions, protecting ISPs from liability for copyright infringement if certain conditions...