P2P Lawyers Eye State Laws in Deterring RIAA Cases

A Fla. defendant is using local and Cal. law to tarnish the RIAA’s litigation strategy. In UMG v. Del Cid in U.S. Dist. Court, Tampa, June 1 counterclaims accuse major labels of hiring “unlicensed private investigators” -- MediaSentry - - who “invade” others’ computers “in violation of various state laws.” After getting ISP account holder data on “the elderly, disabled, technologically clueless and other elderly victims,” the labels drop suits, instead demanding settlements in a “campaign of extortion,” the filing said. That violates not only federal computer privacy law but Fla. law on deceptive practices, unlicensed investigators and “unlawful consumer debt” collection, and Cal. extortion law, they claim. P2P defense lawyer Ray Beckerman, who runs the Recording Industry vs. the People blog, told us it was the first instance he had seen of multiple states’ laws invoked in a P2P response, and also the first under the Cal. extortion statute.

Michael Wasylik, lawyer for defendant Suzy Del Cid, stressed the Cal. extortion claim wasn’t made under the state’s RICO statute, intended for criminal enterprises, but its civil extortion statute. The RIAA previously has cited court dismissals of state RICO counterclaims in P2P cases (WID Oct 4/05 p6). Wasylik said that statute saw use successfully by danceman Michael Flatley to sue a woman who threatened to accuse him of rape unless he paid her off. There’s no obvious reason why Cal. civil extortion law shouldn’t apply to Cal. corporations that interact with out- of-state defendants, he added. Universal Music Group is the only major label with a corporate hq in Cal.

The first defendant to cite state RICO laws in counterclaims recently won her case with RIAA. The group filed to dismiss with prejudice -- meaning the case can’t be brought again -- in Atlantic v. Andersen in U.S. Dist. Court, Portland, Ore., although Tanya Andersen’s counterclaims and request for attorney’s fees still are pending. The defense probably will amend to add more claims, including negligence in investigation, perhaps seeking relief from MediaSentry, which fingered Andersen as the file-sharer, lawyer Lory Lybeck said. Ore.’s RICO statute has “character of conduct” provisions broader than under federal law, he said. Going after RIAA for using an unlicensed investigator is “uncharted territory,” Lybeck said: “I've never had to sue a private investigator before.”

Investigator licensing is a “completely new twist that I haven’t researched yet, but it looks really promising,” Cal. P2P lawyer Merl Ledford said. He first heard of the tactic from a former Electronic Frontier Foundation lawyer he declined to identify. Ledford recently drew national attention from peers for his sternly-worded letter to RIAA lawyers threatening legal action for “malicious prosecution,” after which RIAA dropped Sony v. Merchant but refiled against Doe defendants, seeking discovery from ex-defendant Barry Merchant (WID April 11 p3).

Under Cal. law, a lawyer who files an action without probable cause after a factual investigation can be sued for malicious prosecution, as can the client, Ledford said. The firm behind much of the RIAA litigation, Denver-based Holmes Roberts & Owen (HRO), could be held liable for relying on MediaSentry investigations in Cal. cases, as MediaSentry isn’t licensed in the state, he said. In the Merchant case, “based on what I'm looking at now, they didn’t” have probable cause to sue Barry Merchant. If the theory holds, HRO could lose $6-25 million yearly earned representing RIAA, discouraging competitors from taking “meritless shakedown cases,” Ledford said. RIAA declined to comment; MediaSentry couldn’t be reached for comment.