Metro Media Entm't, LLC v. Steinruck

• Decision Date: 14 December 2012
• Docket Number: Civil Action No. DKC 12–0347.
• Parties: METRO MEDIA ENTERTAINMENT, LLC v. Richard STEINRUCK.
• Court: U.S. District Court — District of Maryland

912 F.Supp.2d 344

METRO MEDIA ENTERTAINMENT, LLC

v.Richard STEINRUCK.

Civil Action No. DKC 12–0347.

United States District Court, D. Maryland.

Dec. 14, 2012.

Mike Meier, The Copyright Law Group PLLC, Fairfax, VA, for Metro Media Entertainment, LLC.

Robert T. Hall, Hall and Sethi PLC, Reston, VA, John C. Lowe, John C. Lowe P.C., Bethesda, MD, for Richard Steinruck.

MEMORANDUM OPINION

DEBORAH K. CHASANOW, District Judge.

Presently pending and ready for resolution in this copyright infringement action are motions to dismiss counterclaim and for sanctions filed by Plaintiff Metro Media Entertainment, LLC. (ECF No. 29). The issues are fully briefed and the court now rules pursuant to Local Rule 105.6, no hearing being deemed necessary. For the reasons that follow, the motion to dismiss will be granted and the motion for sanctions will be denied.

I. Background

Plaintiff Metro Media Entertainment, LLC, commenced this action on February 6, 2012, by filing a complaint against forty-seven Doe defendants alleged to have infringed Plaintiff's copyright in a pornographicfilm by downloading and/or uploading the video over the Internet via a file-sharing protocol known as BitTorrent. As set forth in a spate of recent opinions in this court and others across the country, this technology functions as follows:

BitTorrent facilitates the sharing of large amounts of data across “Peer–to–Peer” networks on the [I]nternet. To begin, an initial user decides to share a file (known as a “seed”) with a torrent network. Other users (known as “peers”) within the network then connect to the seed file for downloading. Each peer downloads one piece of the seed file at a time. As a piece of the seed file is downloaded, it is typically made available to other peers to download. In other words, every downloader is also an uploader. Thus, as the process continues, peers may receive pieces of the seed file from those who have already downloaded that piece and not necessarily from the initial seeder. This system of multiple pieces of data coming from various peers is called a “swarm.” With respect to any particular swarm, an alphanumeric representation (known as a “hash”) of the shared file remains the same. A hash is essentially a “forensic digital fingerprint” that identifies a particular copy of a shared file.

Third Degree Films, Inc. v. Does 1–108, No. DKC 11–3007, 2012 WL 1514807, at *1 (D.Md. Apr. 27, 2012) (internal footnotes and citations omitted).

Through this process, each of the “peers” participating in a given “swarm” exposes his or her Internet Protocol address (“IP address”) to the outside world. The owners of copyrights in films such as My Baby Got Back! # 44—the subject of the instant case—retain the services of law firms or investigators, such as the Copyright Enforcement Group, LLC—the firm retained by the instant plaintiff—to monitor and record the information revealed by the infringers. Typically, a lawsuit is then filed against all swarm participants believed to be located within the jurisdiction of a given court, along with a request for early discovery in which the plaintiff seeks to serve subpoenas on Internet Service Providers (“ISPs”) associated with the alleged infringers in order to learn the identity of subscribers.¹ Once this information is obtained, an offer of settlement invariably follows in which the plaintiff advises the subscriber of the infringing IP address that he or she may avoid the specter of having his or her name publicly associated with the unauthorized downloading of pornography by promptly remitting a substantial payment to counsel for the plaintiff.

Recognizing the practical difficulties presented by joining so many defendants in a single lawsuit, as well as “the risk of extortionate settlement, especially when joinder is being used to that end,” Third Degree Films, 2012 WL 1514807, at *4 (citing SBO Pictures, Inc. v. Does 1–3036, No. 11–4220 SC, 2011 WL 6002620, at *4 (N.D.Cal. Nov. 30, 2011)), courts in this district have severed the defendants in these cases and dismissed without prejudice all except Doe 1. Moreover, with respect to the remaining defendants, this court directed that future filings containing identifying information be made under seal. Thus, in theory, the risk of extortionate settlement was substantially abated, as the remaining defendants, who might have otherwise felt compelled to settle in order to avoid embarrassment or reputational harm, were free to appear to defend the suits without having to reveal their identities, at least initially.

So it was, in the instant case, that the court issued a sua sponte order on May 7, 2012, severing the forty-seven defendants named in the complaint and dismissing all except Doe 1, further directing that “all documents filed in this action that contain Doe 1's identifying information shall be filed under seal.” (ECF No. 17, at 2). Days later, Plaintiff's counsel transmitted a settlement offer to the sole remaining defendant, advising, in part:

Discovery was authorized by the United States federal district court in the above-identified case relating to the identities of the subscribers whose [I]nternet accounts were allegedly used to download from and/or make available on the Internet unauthorized copies of [ My Baby Got Back! # 44 ] in violation of the U.S. Copyright Act (17 U.S.C. §§ 101 et seq.) You were identified as one of those subscribers.

(ECF No. 23–3). After observing that 17 U.S.C. § 504(c) authorizes statutory damages of up to $150,000 for a willful violation, Plaintiff's counsel stated, “[o]n behalf of Plaintiff, we will formally name you as a defendant (i.e., as an alleged infringer of Plaintiff's copyright in [ My Baby Got Back! # 44 ] ),” unless a proposed “settlement offer” of $3,500.00 was promptly remitted. ( Id.).

Doe 1, by counsel, responded by filing an answer and counterclaim in which he publicly revealed his identity as Defendant Richard Steinruck. (ECF No. 23). After emphatically denying any involvement with the downloading or uploading of Plaintiff's film, Defendant alleges in his counterclaim that Plaintiff is taking advantage of “an opportunity to reap undeserved and illegal rewards and to convert [its] copyrighted materials into a cash generating resource ... by extorting money from those who have done no illegal act, but who cannot risk the opprobrium of being falsely accused of illegally downloading pornography.” ( Id. at ¶ 37). According to Defendant, “[t]he key allegations [contained in the complaint and request for early discovery] used to convince the [c]ourt to authorize the issuance of the subpoena [to Defendant's ISP] were false and Plaintiff misled the [c]ourt in order to further its scheme.” ( Id. at ¶ 41). Defendant characterizes Plaintiff's subsequent settlement offer as an “extortive shakedown letter,” which “effectively threatened that unless Mr. Steinruck paid Plaintiff the money demanded ... [Plaintiff] would make public the identity of John Doe 1—Mr. Steinruck—as a downloader, copier, and distributor of pornography by litigating the [c]omplaint.” ( Id. at ¶ 45). In Defendant's view, these “actions ... constitute[ ] abuse of process under Maryland state law, as well as abuse of process under federal law[,] ... [and] may also constitute contempt of this [c]ourt, for using [ ] [c]ourt process to attempt to accomplish an illegal purpose.” ( Id. at ¶ 48 (internal citation omitted)).²

In light of Defendant's self-disclosure, the court issued an order directing “[a]ny interested party ... to show cause by August 8, 2012, why Doe 1's identifying information should remain sealed or redacted from public view.” (ECF No. 24). In response, Mr. Steinruck “acknowledge[d] that by filing his Answer and Counterclaim disclosing his identity he has waived confidentiality and sealing of any documents in this case.” (ECF No. 27).

Plaintiff responded to the counterclaim by filing the pending motion to dismiss, pursuant to Fed.R.Civ.P. 12(b)(6), and seeking sanctions related to the filing of a frivolous complaint, pursuant to 28 U.S.C. § 1927. (ECF No. 29). Defendant has opposed both motions (ECF No. 31), and Plaintiff has filed papers in reply (ECF No. 32).

II. Motion to DismissA. Standard of Review

A motion pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of the complaint. Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir.2006). A complaint need only satisfy the standard of Rule 8(a), which requires a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). “Rule 8(a)(2) still requires a ‘showing,’ rather than a blanket assertion, of entitlement to relief.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 n. 3, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). That showing must consist of more than “a formulaic recitation of the elements of a cause of action” or “naked assertion [s] devoid of further factual enhancement.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal citations omitted).

At this stage, the court must consider all well-pleaded allegations in a complaint as true, Albright v. Oliver, 510 U.S. 266, 268, 114 S.Ct. 807, 127 L.Ed.2d 114 (1994), and must construe all factual allegations in the light most favorable to the plaintiff, see Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir.1999) (citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir.1993)). The court need not, however, accept unsupported legal allegations. Revene v. Charles Cnty. Commis., 882 F.2d 870, 873 (4th Cir.1989). Nor must it agree with legal conclusions couched as factual allegations, Iqbal, 556 U.S. at 678, 129 S.Ct. 1937, or conclusory factual allegations devoid of any reference to actual events, United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir.1979); see also Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir.2009). “[W]here the well-pleaded facts do not...