Now that my bittorrent case is dead… What to do about the settlement letters?!?

A majority of the calls into our office these past few days have essentially been, “I was dismissed from XYZ case, but the plaintiff has started sending me scare letters telling me that I must settle by a certain date or else they are going to sue me again in my home state. I see they have started suing people in smaller numbers in different states. Can they really take me to court?!? Will they take me to trial if I don’t settle?!? What should I do?!? Should I settle?!?

Up front, almost every knowledgeable plaintiff copyright “troll” attorney has shifted from suing thousands of defendants in one lawsuit to suing smaller numbers of defendants in smaller lawsuits (e.g., v. Does 1-23, v. Does 1-56, etc.) in many cases in the defendants’ home states. However, the filing of the lawsuits themselves — even against smaller groups of Does or against individuals — do not suggest that the plaintiff attorneys have any intention of moving against those particular Does. Over the past year, a number of plaintiff attorneys have sued individuals, but the lawsuits then just sit there for months at a time.

I have a strong suspicion that the follow-up lawsuits are merely second chances for the plaintiff attorneys to prove that they “are serious” about moving forward against formerly dismissed defendants. I would be unimpressed if people got named, sued, and served, and then another one of their settlement “scare” letters arrived at the repeat defendant’s home stating, “We’re ready to move against you today if you would like. However, if you would like to settle, we’re willing to extend an olive branch of $X thousand dollars,” (that amount being significantly higher than the $3,500-$4,500 they are currently trying to extort from defendants.)

The reason it is so easy for them to name and serve a defendant is because plaintiff attorneys know that the burden to hire an attorney and to file an answer within 20 days falls on the accused defendant, and if he misses this deadline, he defaults in his case and the plaintiff automatically wins. Once the default happens (e.g., by not hiring an attorney and timely filing an answer), this becomes yet one more opportunity for the plaintiff to write a “you defaulted on your case; pay us $X thousand dollars or else we will file a default judgement against you where we might get a $30,000 judgement, or possibly even a $150,000 judgement against you.”

As for whether the plaintiffs have the manpower or the resources to take their cases to trial, my opinion is that [with few exceptions,] they probably do NOT have the resources to do so. Copyright infringement lawsuits are expensive to defend, and they are just as expensive to prosecute. Remember, the burden here is on the plaintiff to prove guilt, not on the Doe Defendant to prove he didn’t do it. The MPAA and the RIAA tried taking defendants to trial a few years back and you see how ineffective that strategy was (they have since abandoned the business model of suing downloaders, [as their former multi-million dollar judgements have been recently reduced to pennies on the dollar]).

Then, the next question is whether Dunlap Grubb & Weaver, PLLC (now sending letters as another law firm, *how deceptive*) with Ellis Bennett, Nicholas Kurtz, and the other attorneys has the manpower to bring these cases to trial, I believe the answer is no. I have no doubt they might sue people individually. I have no doubt they might spend the few thousand dollars to hire a digital forensics expert to take a mirror image of the accused downloaders’ hard drives, and even to do a few depositions on the defendants themselves. However, beyond that — beyond a summary judgement motion where the plaintiff would ask the court to find the defendants guilty or not guilty as a matter of law based on the evidence gathered by the forensics team and by the depositions — I doubt they have the manpower or resources to move forward to trial, and I would be the first to hop on a plane and watch the case firsthand with popcorn in my hands if they did.

Now as for whether you should settle. Up front, each defendant’s risk tolerance of being named and sued is different, and the effects of being sued differ based on each defendant’s financial situation and whether they are set up to be protected from such a loss. People with assets which are unprotected should obviously take being sued more seriously than someone without assets, or than someone who’s assets are properly shielded (e.g., either through umbrella liability insurance, various asset protection strategies, or through the use of corporate entities or trusts). That being said, let’s chat about the risk of being sued.

In short, there is a website — http://www.rfcexpress.com which lists all the cases which are filed in each of the federal courts across the US. You can easily do a search for Copyright cases in your particular court, or in any or all federal courts. The best search is to list either the plaintiff’s name, e.g., “West Coast Productions”, “Hard Drive Productions”, or “Liberty Media Holdings”, or you can see the newer lawsuits filed against various does by doing a search for “Does 1-” which brings up most of the bittorrent cases.

Then there is the question of can they even sue you? The answer is yes, but the analysis should not be one of fear or “maybe they will, maybe they won’t,” but a cold, calculated analysis of RISK. Most federal courts require that an out-of-state attorney hire local counsel before filing suit against defendants. Thus, if you look in your state and you do not see any lawsuits from your plaintiff (or your plaintiff attorney), then chances are they do not have local counsel yet in your state and the risk of being sued is low, and the need to settle is also correspondingly low. That being said, if you see that your plaintiff attorneys have sued defendants in your state (or if you see that their office is physically in your state), then that means that they can sue you themselves and they do not need local counsel, or that they have likely hired local counsel in your state — in either case, the risk of being sued skyrockets, and the need to settle also becomes quite high. As to whether to wait to be sued and then settle, or to settle proactively, you know that you have a better chance of negotiating if you do not have a lawsuit with a deadline looming like a gun at your forehead. Thus, if you are going to settle, it is best to settle proactively and before you get sued. If you wait until after you are sued, 1) there may be no settlement then, or 2) there may be a ridiculously high settlement after they sue you.

Lastly, should you run off and settle your case on your own? Bad idea. It is better to have an attorney negotiate your settlement because 1) they could probably get a better deal than you because of increased negotiating power from other clients or a former relationship from past negotiations, 2) your attorney will not identify you during the negotiation process and thus your settlement negotiations are anonymous, 3) your attorney will not incriminate you with their discussions while you might, and 4) your attorney has the power to negotiate the settlement agreement to properly protect your interests whereas a defendant calling the plaintiff will probably be railroaded and will probably be told to either “take the contract as it is or leave it,” — not to mention that without an attorney, you do not know the clauses that need to be in the contract to protect your interests, e.g., from being sued later for attorney fees and costs. Last, but not least, it goes without saying that as soon as your attorney tells the plaintiff attorney that they are representing you, the plaintiff attorneys are NO LONGER ALLOWED TO CONTACT YOU, AND ALL COMMUNICATIONS MUST GO THROUGH YOUR ATTORNEY. Thus, no more settlement solicitation calls, no more midnight voicemails, no more scare letters, no more threats, and no more harassment. Everything goes through your attorney’s office.

In sum, these plaintiff attorneys will no doubt try to push the envelope and sue individuals and/or smaller groups, and as potential defendants, settling should not immediately be your first inclination. There are factors to consider, and there are terms to negotiate if you do decide to settle. Missing the step of negotiating your settlement can get you sued for something you thought you settled, or can get you hit with fees and costs you did not realize you agreed to in the contract. Caveat emptor. Beware and vigilantly protect your interests when settling, or do not settle in the first place. And for G-d’s sake, do not visit the plaintiff’s website and log on to see your settlement, and then not settle. You must assume they are tracking you. If you are going to settle anyway, the last thing you want to sign is a boilerplate settlement agreement which has every term in their favor and none in yours. Be cautious.

13 thoughts on “Now that my bittorrent case is dead… What to do about the settlement letters?!?”

  1. I note that they are still going after “does”. At this point they probably have hundreds if not thousands of IP subscribers identified by name. Why so few named suits?

    I think it just proves what the game here is. Try to squeeze/extort more settlements, not go to trial.

  2. Excellent article, Rob. I get a lot of similar questions and now I have a link to send the askers to 🙂

    As for visiting plaintiff’s sites, the risk is overstated in my opinion. Most likely you have a dynamic IP address and in order to unmask you, plaintiffs would subpoena your ISP, but on what basis? The only risk if you leave not in a major metropolitan area, and can be matched, but visiting their sites don’t prove anything, maybe (in most cases wrongly) indicate that you are an easy target.

    Saying that, it is always better to be safe than sorry, so I suggest using Tor bundle – it just a Firefox browser preconfigured to connect via Tor – no need to learn anything. If you have an urge to say something nasty to a troll (and I can’t blame you, this urge is very hard to resist :), using Tor is quintessential.

    One of more elaborate troll collection sites is claimvendor.com run by G. Sperlein. This site has it all: terms that you are prohibited from linking to that site (I just violated this clause, but did I agree in the first place?), scary FAQ with examples how individuals and small groups are being sued (half of these cases are already collapsed as we speak) and a quick way to pay with PayPal or credit card in exchange to a questionable release statement.

    1. SJD, the risk in clicking on the plaintiff’s payment site (and maybe I didn’t explain this well) is not that they might log your IP address, but that the link you click on may be a unique URL which immediately tells the plaintiff that you viewed their contract and/or their settlement site. -Rob

  3. One issue I did not have a chance to discuss is the preservation of “evidence” demanded by trolls in their scary letters.

    “You are obliged to preserve any and all evidence that may reasonably be relevant to this matter, do not delete or erase any files from your computer(s) or reformat/scrub your hard drive(s)”

    This demand is ridiculous. While scrubbing your hard drive may cause problems if a discovery occurs, not deleting any files is simply impossible in a normal operation. Maybe not all attorneys would agree with me, but I would continuing to use your computer(s) as if nothing happened. If you don’t specifically try to destroy evidence, I don’t think that you can be charged with spoliation. In a normal operation you or software on your computers deletes thousands of files a day. Clear browser cache, and myriad of temporary files is deleted. If you don’t install Windows updates you are at risk of virus attack, and installing an update (surprise!) also involves erasing files.

    I think that threatening with this type of discovery is just another tool of fear, that may happen once or twice in an attempt to scare others, but no more. It is not unheard that a person has half a dozens of computers/laptops and many external drives. The forensic analysis can cost plaintiff thousands of dollars easily. With presence of easy prey (a fresh pack of uninformed Does) they can extort new settlements with virtually no cost, it is just stupid to pursue a costly discovery that most likely will yield nothing – the alleged download happened long time ago, sometimes more than a year, and don’t overestimate the magic of forensic experts. I don’t say that it is impossible to find traces of the file in question, it is just the risk of not finding anything is prohibitively high.

    One thing I don’t know and I hope to get an answer to. Do forensic analysts have a right to report unrelated files that may be potentially illegal? I suspect this is the most serious scare factor of this type of discovery. He who is without a potentially illegal file on your computer among you, let him be the first to throw a keyboard at her.

    1. I get that question all the time — I didn’t download the accused file, but I do have unlicensed software on my computer. Will the forensic expert try to access that information and report me or use it against me? The answer (and this is a logical answer, not based on what they’ve done — remember, very few if any of their cases [for this plaintiff] have gone this far) is that the forensic expert can look for anything. You can ask the court to limit the scope of the forensic analysis if you have concerns about the analyst accessing content outside the scope of the discovery. I have, however, seen depositions that go along with these forensic analyses where the plaintiff attorney (specifically, your favorite plaintiff attorney) pointedly asks whether the defendant has downloaded anything illegally, whether they have used bittorrent for ANY purpose, etc. Then, once nothing is found on the computer, they still ask for a settlement claiming spoliation even if there is none.

      As far as your duty to preserve evidence — and this differs based on where you are sued — the general rule is that if you have the infringing file on your desktop at the time you receive notice you are being sued, LEAVE IT THERE. Do not delete it. If it has already been deleted, you are under an obligation to no longer FORMAT or WIPE your hard drive. If you did any of these before having knowledge that you are implicated in a suit (e.g., deleting the file, formatting your drive, or wiping your drive), then you cannot be held liable for violating a duty to preserve evidence BEFORE you were under a duty to preserve it. Otherwise, I see nothing wrong with using your computer regularly after being sued. There is no reason to freeze your computer in a block of ice as soon as you are sued. Then again, if you want to be 100% sure you are okay, purchase full-drive mirroring software and put your entire drive on a few DVDs or BlueRay discs (or mirror it in its entirety to an external drive).

  4. I know someone who keeps getting those settlement letters threatening to sue locally, long after the Plaintiff dismissed the case in the DC court which is on the other side of the country.

    QUESTION: how long can they keep sending letters threatening to sue locally?

    Is there a statute of Limitation from when the alleged copyrighted download happened. I thought I read it was TWO years for IP cases, is that true? Is it Two years from the Download or Two Years from the date they got a Name.
    The alleged download according to the Plaintiffs data will be Two Users in Jan 2012

  5. I actually understand that the statute of limitations is THREE YEARS from the alleged date of infringement. They can keep sending the letters indefinitely if they would like, even past the SOL expiration. -Rob

  6. Robert, I’ve been looking at recently filed Doe cases and noticed that Patrick Collins and K-Beech have filed cases against single Does. (K-Beech today 9/26 in North Carolina). Do you think they are actually going to try to start bringing these to trial or what kind of settlement do you think they are after?

    1. I have seen no indication that they have interest in bringing these to trial, however, if you would like, I can talk to you about what they are looking for, and how I can be of assistance. -Rob

  7. It looks like there are a number of “named” suits for various DGW cases being filed in the Georgia Northern District. What do you think that is all about?

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