UMG's Requirement That It Post Bond Is 'Punitive,' Says Grande in Motion for Waiver
Requiring Grande Communications Networks to post a bond pending its appeal of a copyright infringement lawsuit is a “punitive measure that would serve only to enrich the company that issues the bond,” said its reply (docket 1:17-cv-00365) Wednesday in support of its motion to stay executive of judgment and for a bond waiver in U.S. District Court for Western Texas in Austin.
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Grande is seeking to vacate a Nov. 3 jury verdict awarding Universal Music Group and other music labels $46.8 million in damages for Grande’s willful contributory infringement of 1,403 copyrighted works. In May, U.S. District Judge David Ezra for Western Texas in Austin denied Grande’s Feb. 27 renewed motion for judgment as a matter of law or a new trial in its effort to vacate the November jury verdict (see 2305120027). On June 9, Grande filed an amended notice of appeal seeking review from the 5th U.S. Circuit Court of Appeals (see 2306120002).
In its Wednesday reply in support of its motion for stay and the bond waiver, Grande said it presented a “sworn declaration” with evidence showing it can draw on a $455 million revolving line of credit through at least 2025 to satisfy the judgment. “That is more than enough to show that it would be a waste of money to require Grande to spend $4 million per year on a bond,” it said.
In April, plaintiffs cross-moved for a writ of execution (see 2304260036) requiring Grande to satisfy the judgment and their costs after Grande sought a waiver of a bond the music labels said it was obligated to post in the amount of the judgment, while it sought to stay execution of the judgment pending appeal. Grande requested additional time to post bond, which plaintiffs called "meritless," saying the request was the internet service provider's "latest effort to complicate the supersedeas bond process and delay its obligation to obtain a bond like any other defendant who loses at trial.” The music labels requested an additional $13 million in March for attorneys’ fees of $5.2 million, plus $7.4 million in prejudgment interest and about $200,000 in expert costs on the jury’s verdict that Grande’s copyright infringement was “willful.”
Wednesday, Grande said it's willing to provide biannual updates to the court and plaintiffs about the funds available through the revolving line of credit to show the court a supersedeas bond “remains unnecessary while the appeal is pending.”
During the trial, plaintiffs’ portrayed Grande as “extremely profitable” during the relevant time period, Grande said. Though the damages period ended in 2018, plaintiffs “convinced the Court to allow them to present additional evidence” about Grande’s profitability from 1019-2022, when its gross margin grew from $175 million-$200 million. Grande is now part of the Astound collective of broadband operators, the sixth-largest U.S. ISP, giving plaintiffs no “concrete reason to doubt Grande’s current or future ability to satisfy” the nearly $50 million judgment, it said.
Plaintiffs don’t show a bond is necessary to protect them from loss or hardship, said the reply. Plaintiffs didn’t attempt to prove the amount of any actual loss due to the copyright infringement at issue, with the verdict instead being comprised “solely of statutory damages,” it said.
Grande requests a hearing at which Grande/Astound Chief Financial Officer John Feehan would answer questions about its request for an instant motion, said the filing. The court should grant Grande’s motion and stay the execution of final judgment without bond “until all appeals have been exhausted,” it said.