Voltage’s choice of defendant made ‘difference’ in class action failure: expert

The movie studio that has for years sought to sue alleged copyright infringers in Canada has been denied by the Federal Court the ability to sue thousands of Canadians at once, in a case that one expert said may have rested on who the plaintiffs chose as the lead defendant. Voltage Pictures LLC has for years been bringing to court IP addresses they allegedly found to have been linked to the illegal act of downloading their movies for free. They have been successful in compelling third-party internet service providers (ISPs) to disclose the identities, but the studio ultimately sought to bring roughly 55,000 individuals into a class of defendants -- known as a reverse class action -- to be more conveniently sued, saving time, money and judicial resources. On Wednesday, the Federal Court rejected arguments made by Voltage, and a number of other movie studios, to certify a rare reverse class action lawsuit, arguing in part that the plaintiff didn’t bring forward the identity of two or more direct infringers. While the plaintiffs named three proposed class representatives, including landlord Robert Salna, the judge ruled that two of them were not internet account subscribers at the time of the infringement, which would have disqualified them from being in the class. That left only landlord Salna, whose internet is shared amongst his tenants and denied being a direct infringer in the first place. That means he could possibly have fallen within the proposed class of “authorizing infringers,” the court found. “An Authorizing Infringer cannot be willfully blind as to use of their internet account,” the court ruled in denying that part of certification test. The class of authorizing infringers would’ve been a much more difficult case to prove, Barry Sookman, an intellectual property lawyer at McCarthy Tetrault, said in a phone interview. “The defendant they had, really and truly, did make a difference in the disposition of the case,” “It made a difference to be able to prove whether there was a cause of action against this person, and also it would’ve been a much more difficult type of case to say that there are many more people in that class.” Sookman said he was “surprised” that this would be the test case that would be brought for certification “because it’s one thing to make a claim against an individual, who is a class member of others who are actually engaging in making available files. If an individual simply is an account holder like but didn’t engage in file-sharing, the argument that would have to be made was that he’s liable because he authorized his tenant to engage in file-sharing or he had a duty to monitor, and there are no Canadian cases that say there’s a duty to monitor.” “Certainly some of the findings may have gone the other way if it had been against a different defendant and if the evidence had been better evidence,” Sookman added. Being able to show a cause of action and whether everyone in the proposed class shared common situations were among a number of hurdles Voltage failed to clear, the decision said. The decision relied substantially on evidence presented by the Canadian Internet Policy and Public Interest Clinic (CIPPIC) -- which, as intervenor, argued in documents filed in the case that IP addresses don’t necessarily link to individuals -- to come to its decision. Among the court’s other questions to answer for the certification test were whether there was: a reasonable cause of action, an identifiable class of two or more people, common questions of fact with the class members, and whether a class proceeding is the prefered method. The court eventually found Voltage didn’t satisfy any of those tests. “A class proceeding is not the preferable procedure because Voltage’s application predominantly raises individual issues within the proposed class,” the judge ultimately concluded, adding the alleged infringers would have been unwitting uploaders -- or offerers -- of the copyrighted works when they engaged in downloading but did “not consciously decide or act so as to offer a file for download or advertise that it is available for download.” James Plotkin, a lawyer for CazaSaikaley, who’s defended clients in these matters, said the decision, “subject to appeals, is a major victory for Canadian internet subscribers and an equally major setback for the movie studios seeking to engage in mass copyright litigation. “The Court dismissed the motion decisively, effectively finding that the Applicants failed to meet any of the required criteria for class certification under the Federal Courts Rules,” he said in an email. Ken Clark, counsel to Voltage, declined to comment when asked if his client would appeal. But Sookman said the case is “not precedential in terms of whether file-sharing is illegal or not. Nobody should misread the case. It’s pretty clear that peer-to-peer file-sharing using Bittorrent would be an infringing act in Canada. “It does make it more difficult to start these kinds of class actions, but that doesn’t mean there isn’t another procedure,” Sookman added. He said the court noted that one option that Voltage had but didn’t use was to bring identified defendants together and try them as a group. Sookman said one other approach companies like Voltage can take is to go after the websites that enable file sharing, not the customers. Another, more structured and effective way, Sookman added, is a regime that would block these kinds of websites to prevent access. That regime was proposed by some of the country’s largest internet service providers and has been a proposal in front of a government-appointed panel studying the country’s communications laws. The Federal Court is currently reviewing a case in which the large internet service providers are seeking to block the websites of an allegedly infringing IPTV provider. In September, the Supreme Court of Canada ruled that Rogers Communications Inc. was owed a “reasonable” costs for retrieving accurate information attached to an IP address. In that decision, the nation’s highest court also determined the difficulty in proving whether an IP address necessarily linked to an individual, which is a similar concern raised by the Federal Court on Wednesday. Drawing on previous case law and the SCC decision last year, the judge found the “nexus between an IP address and the person responsible for copyright infringement is highly technical and difficult to assess without a consideration of the merits of individual liability issues.” The issue was complicated because Salna was a landlord. Similar arguments about the lack of hard evidence necessarily linking an IP address with an individual have been successful on numerous occasions in United States’ courts. But Sookman said it is possible to link IP addresses and individuals, “it just wasn’t done here.” On Thursday, University of Ottawa law professor Michael Geist said in a blog post on his website that, “the complete rejection is a huge win for Internet users and appropriate balance in copyright with implications that extend beyond this case to other file sharing lawsuits in Canada. “The Voltage lawsuits may continue, but the court has thrown considerable doubt over the legal soundness of its claims.” Voltage argued the reverse class action mechanism would minimize the barriers to enforcing its copyright, noting that Canada’s copyright regime caps the damages against non-commercial infringers at $5,000. While Voltage has had cases in Canadian courts since at least 2011, the Los Angeles-based movie studio first brought the reverse class action application in 2016. Last year, The Wire Report found that movie studios linked to Voltage settled with Canadians for total amounts that exceeded $200,000. — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Voltage’s choice of defendant made ‘difference’ in class action failure: expert

Broadcast | November 14, 2019

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Voltage’s choice of defendant made ‘difference’ in class action failure: expert

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