Today, the Fifth Circuit Court of Appeals affirmed a district court order imposing sanctions on Evan Stone, attorney for adult film producer Mick Haig Productions, who improperly issued subpoenas without leave of court to ISPs seeking the identities of anonymous subscribers in a mass end-user copyright infringement case.
The Mick Haig lawsuit was hardly unique, with Stone attempting to, in the words of the Court of Appeals, "repeat his strategy of suing anonymous internet users for allegedly downloading pornography illegally, using the powers of the court to find their identity, then shaming or intimidating them into settling for thousands of dollars -- a tactic that he has employed all across the state and that has been replicated by others across the country." EFF has been a leader in opposing such "copyright troll" cases and will continue to fight against them. These lawsuits are fraught with legal deficiencies that short-cut the privacy and due process rights of Internet users in the name of generating settlement income for plaintiffs instead of actually vindicating valid claims through the proper use of the legal process. What was new in the Mick Haig case was what district court Judge David Godbey described as Stone's "staggering chutzpah": Stone issuing subpoenas on his own without court permission, even though the court appointed EFF and Public Citizen to brief him on the relevant legal questions and even though Stone continued to argue that he should be able to proceed, all the while obtaining subscriber information from ISPs and (apparently) sending threat letters to subscribers directly.
In today's ruling, the Court of Appeals held that Stone had waived all of his various (meritless) arguments such as that he could have issued a different kind of subpoena to obtain the subscriber information, that sanctions couldn't be issued under the specific Federal Rules cited by the district court, and that EFF and Public Citizen lacked standing to bring a sanctions motion. Moreover, the Court held that "no miscarriage of justice will result from the sanctions imposed as a result of Stone’s flagrant violation of the Federal Rules of Civil Procedure and the district court’s orders."
Lifting the temporary stay that it had earlier granted during the pendency of the appeal, the Court of Appeals affirmed the sanctions award ordered by the district court. In addition to paying a $10,000 sanction to the court, the sanctions award ordered that:
1) Stone shall serve a copy of this Order on each ISP implicated and to every person or entity with whom he communicated for any purpose in these proceedings.
2) Stone shall file a copy of this Order in every currently-ongoing proceeding in which he represents a party, pending in any court in the United States, federal or state.
3) Stone shall disclose to the Court whether he received funds, either personally or on behalf of Mick Haig, and whether Mick Haig received funds for any reason from any person or entity associated with these proceedings, regardless of that person’s status as a Doe Defendant or not, (excepting any fees or expenses paid by Mick Haig to Stone).
4) Stone shall pay the Ad Litems’ attorneys’ fees and expenses reasonably incurred in bringing the motion for sanctions [in the amount of $22,040].
Also lifted is a stay on a subsequent contempt sanctions order -- imposed by Judge Godbey when Stone failed to comply with the initial sanctions order -- ordering Stone to pay $500 into the court registry per day "for each day he delays compliance with the Sanctions Order."
Stone's behavior was indeed some of the most flagrant ever seen in this space, a difficult feat with the bar already set so low given the standard intimidation and shame tactics used in many of these cases. Hopefully, the Fifth Circuit's order will help deter at least some of the most extreme abuses used by copyright troll litigants.
Once again, from Judge Godbey's initial sanctions opinion:
To summarize the staggering chutzpah involved in this case: Stone asked the Court to authorize sending subpoenas to the ISPs. The Court said “not yet.” Stone sent the subpoenas anyway. The Court appointed [EFF and Public Citizen] to argue whether Stone could send the subpoenas. Stone argued that the Court should allow him to – even though he had already done so – and eventually dismissed the case ostensibly because the Court was taking too long to make a decision. All the while, Stone was receiving identifying information and communicating with some Does, likely about settlement. The Court rarely has encountered a more textbook example of conduct deserving of sanctions.