June 25, 2017

Takedown 2.0: The Trouble with Broad TROs Targeting Non-Party Online Intermediaries

On August 14, a federal district court in Oregon issued an ex parte temporary restraining order (TRO) in a civil copyright infringement case, ABS-CBN v. Ashby. The defendants in the case are accused of operating several “pirate websites” that infringe the plaintiffs’ copyrights in broadcast television programs. In addition to ordering the defendants to stop engaging in infringing conduct, the court ordered unspecified “Internet search engines, Web hosts, domain-name registrars, and domain name registries or their administrators [to] cease facilitating access to any or all domain names and websites through which Defendants engage in the [infringement] of Plaintiffs’ copyrighted works.” The court ordered the domain name registrars that had originally registered the defendants’ domain names to transfer the registrations for the pendency of the litigation to a new registrar chosen by the plaintiffs. It then ordered the new, as-yet-unidentified registrar to divert traffic from the defendants’ sites to a location displaying legal documents from the case. None of the online intermediaries targeted by the order is a named party in the case, and none was represented in court before the TRO issued.

A little over a week before the Oregon court issued its TRO, a federal district court in California issued a TRO in another “pirate website” case involving sites streaming and distributing pre-release copies of “The Expendables 3.” The California court’s order to stop providing services to the defendants was directed broadly to “persons and entities providing any services to or in connection with the domain names <limetorrents.com>, <billionuploads.com>, <hulkfile.eu>, <played.to>, <swankshare.com> and/or <dotsemper.com> or the websites to which any of those domain names resolve.” In addition to domain name registrars and hosting services, the California court’s order swept in “[a]ll banks, savings and loan associations, payment processors or other financial institutions, payment providers, third party processors and advertising service providers of Defendants.” Again, none of the online intermediaries targeted in the order is a named party in the case and none was represented in court before the TRO issued.

The reach of these orders is breathtaking, particularly in light of the non-party status of the targeted intermediaries. Generally speaking, a court has no authority to issue an order to a non-party over which or whom it has not acquired personal jurisdiction. This default rule is protective of due process and prevents non-parties from having their rights adjudicated to their prejudice when they’re not present to be heard. Under Rule 65 of the Federal Rules of Civil Procedure, a “[court] order binds only the following who receive actual notice of it by personal service or otherwise: (A) the parties; (B) the parties’ officers, agents, servants, employees, and attorneys; and (C) other persons who are in active concert or participation with anyone described in…(A) or (B).” There is, simply stated, a requirement of privity or close relationship between the actual parties to the case and any non-parties over which or whom the court seeks to extend its injunctive power.

The requisite Rule 65 relationship is far from self-evidently present in either of the cases cited above with respect to any of the targeted intermediaries. The Oregon court did not even characterize the targeted third-party intermediaries as being “in active concert or participation” with the defendants. It simply ordered them to act upon notice of the injunction. The California court expressly characterized the domain name and hosting intermediaries as being included among the persons or entities “in active concert or participation with [the defendants].” It did not, however, so characterize the range of third-party intermediaries providing payment-related services for the defendants’ websites. Just as the Oregon court did with all of the intermediaries affected by its order, the California court simply ordered the payment intermediaries to act upon receiving notice of the injunction.

Under federal case law, a non-party is said to be “in active concert or participation” if that non-party is “legally identified with [the] defendant, or, at least, deemed to have aided and abetted [the] defendant in the enjoined conduct.” That means “acting in collusion with, or as the alter ego of, an enjoined party.” It strikes me as a real stretch to argue that the search engines, web hosts, domain name registrars, and payment processors targeted in these cases have the kind of close relationship with the defendants that is necessary to justify extending an injunction against the defendants to them. Judges in these cases should really be taking a more searching and disciplined approach to the Rule 65 standard. Due process is not well served when courts issue sweeping ex parte orders that purport to bind unknown (and potentially large) numbers of strangers to the litigation over which they’re presiding.

Comments

  1. There are situations where a registrar could be said to be colluding with a malefactor (e.g. the registration of presentation-equivalent variants of corporate domains for phishing purposes, or the bulk registration of nonces for botnet C&C), but someone running a copyright-infringement scheme doesn’t seem to be one of them. Media reports suggest that some judges will issue pretty much anything as long as there’s no one available in court to oppose it.

  2. Nathan T. says:

    I agree, this is a troubling trend. And it is so because our highly paid representatives have been pushed to create unequal balance between copyrights and property rights. To the point that all arguments over infringement are about theft and loss of income. Thus, it creates the scenarios where people who stand to profit from the “claims” of infringement are great enough that no infringement need occur; yet the laws are do damning that judges feel they HAVE TO DO SOMETHING which results in completely unfair judgement contrary to law.

    Further, it creates politicians that also proclaim they HAVE TO DO SOMETHING (yes I am talking about Sen. Hatch who is in bed with these people) in violation of the U.S. Constitution.

    The solution to the problem is to get both the courts and legislatures to focus on the U.S. Constitution. The PURPOSE of copyright laws. Which have NOTHING to do with money at all.

    If I make a copy of a movie and give it to a friend, the movie industry will say I “stole” the income from the sale of that movie. A $30 theft, is “petty” and would in most jurisdictions I would be fined up to $100 or $200; and may be required to pay restitution but no jail nor prison time.

    Yet our laws are, such a “petty theft” of a movie could be fined up to $150,000 AND up to 5 years in prison. No wonder judges feel they HAVE TO DO SOMETHING. Such a “petty theft” is worse than most felonies, so lets send a message to everyone even who was not a party to such infringement that they better not allow anyone they know to infringe either.

    Now, I do not see copyright infringement as theft at all but rather an infringement upon someone’s rights, and I believe it SHOULD be higher penalty than “petty theft.” But, within proportion to actual damages. And, in the case of a single movie copied and sold/given, no actual damages occurred if that individual would not have purchased the movie in the first place. Thus, restitution should be applied only equal to the copy. In the case of shared copies; where damage would not be able to be tracked, a reasonable fine and restitution should be in place. Perhaps not exceeding $1,000 and certainly only to the point of ability for the infringer to pay [elsewise we have gone back to the idea of debtors prisons]. But, NOT for the purpose of financial gains of the litigants, but rather for the purpose of upholding the law’s purpose. If the litigants know they won’t get that much money from litigating; they are NOT going to be trolls, and will only litigate the most damaging infringements.

    What is that PURPOSE of copyright laws in the U.S.? NOT for the wealthy to get more wealthy, not for the trolls to get wealthy either, and especially not for the lawyers to get wealthy. It is simply for promoting science and useful arts. Our laws are currently contradictory to that; and that is why judges don’t care about following proper court proceedings, because they are pushed by our laws that are contradictory to their purpose, they are pushed to uphold laws that are designed only for the wealthy to make more wealth without regard to progressing science nor arts

    • > And it is so because our highly paid representatives have been pushed to
      > create unequal balance between copyrights and property rights.

      Although it is undoubtedly true that copyright is currently out-of-whack/touch, I find little connection with the stated problem. It seems to me that the actual underlying cause here is “future shock” hitting the judicial branch. Clarke’s third law states that “Any sufficiently advanced technology is indistinguishable from magic”, and in this context, “sufficiently advanced” merely means “sufficiently advanced compared to the technical understanding of the presiding judge”. The overreach stems from a combination of an honest urge to enforce the law (which I agree is currently disfunctional) with the impression that modern technology is a magic wand which can be effortlessly commanded to “set things right”.

      I’m sure that exactly the same judges, when presiding over a stalking case and deciding to restrain the stalker from approaching closer than a given distance to the domicile of the his victim, would never consider ordering “all forms of transportation, public or private, to abstain from transporting the stalker to any location within the stated forbidden zone or zones”. Why? Because these same judges _do_ understand the limitations of public and private transportation…

      • “Because these same judges _do_ understand the limitations of public and private transportation…”

        Yes, I think I can agree with you there; or at least accept your premise. Such crazy rulings may be made by judges who simply do not understand technology and perceive that one could work some magic and the technology would set things right, and thus give into whatever so called magic the prosecutors or litigants claim will do just that–such as a request to put a stop to all transactions from all parties, etc.

        The presumption then, that given a scenario in which the judges do understand limitations they may rule more narrowly could perhaps be a testable hypothesis? Are the records of the two judges discussed in the article open to review to be able to see if they did or did not pass down a judgement of similar nature where they better understood the limitations in the case?

        If your premise of “future shock” is more correct than my premise that both the courts and the legislatures are being influenced by money [in effect my rant above was working from that premise] then, what we need is better defense attorneys to demonstrate why the technology is not so magical after all, and is quite limited.

        I can’t say that I would blame the judges for believing in magic when apparently the entire so called Intellectual Property industry tends to proclaim such magic exists via DRM and similar schemes. And coincidentally I do recall that what brought me to this blog initially many years ago was discussions on the non-magical powers of DRM, and how useless DRM really is in fighting copyright infringement. But, that hasn’t stopped many from still using it.

        Why do I believe believe money influences both legislatures and judges? In short; one of the court cases close to my heart was ruled in favor of big business. It either had to be have been bought and paid for; or some extremely incompetent defense attorneys were working on the case. The case was a slam dunk obviously fair use under the law. Yet, shortly after the ruling by the judge against the defendant, a well known and seasoned senator accepted $70,000 from the MPAA and subsequently co-sponsered a bill that definitely and explicitly removed that very same fair use from the law; but only in the case of movies, no other copyrighted works got that special exemption from fair use. Follow the trail of money, and well, its pretty obvious what happened.

        As you references Clarke’s third law, I want to reference Occam’s razor, in essence the assumption that the influence of money was the cause; is far more simplistic than an assumption of utter incompetence among elite professionals–at least for that one court case; and so I do tend continue with that premise on other cases; but I will agree your premise could be more correct in the above scenarios.

  3. We have seen a similar distortion of the rules in BitTorrent litigation. Courts would routinely issue ex parte orders “requiring” ISPs to give notice, monitor the docket for motions by subscribers, and produce information, when all that is provided for under the Rules is an order permitting the plaintiff to issue subpoeanas to ISPs pursuant to Rule 45 (admittedly, the Cable Communications Act states that an order is necessary, but all ISPs are not subject to that Act and in any event the need for an order permitting the discovery does not justify an injunction purporting to require it). The additional provisions, as you say, are an impermissible, mandatory injunction. As others have commented, this stems from judges who may not fully understand the technology and copyright laws and procedural rules that certainly were not designed to accomodate copyright infringement on the Internet.

  4. Regarding big money influencing the laws: There is a pretty compelling case to be made for that hypothesis, but I frankly think it’s a mixture of both.

    The judiciary believes (with good reason) that their only job is to verify if the *letter* of the law is adhered to. However, there is no entity that checks if the laws are effective at accomplishing their stated goals, nor is there any entity that checks if laws are throwing the balance of power out of whack in favor of the rich and well-connected. If there were, a lot of odd things could be corrected – but as is, they can’t be.

    I’d suggest you watch Lawrence’ Lessig’s “The Republic” talk if you do not believe big money is corrupting US politics. He makes a pretty compelling case.

    https://www.ted.com/talks/lawrence_lessig_we_the_people_and_the_republic_we_must_reclaim

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