Tenenbaum: Court dismisses counterclaims against labels; defers ruling on constitutionality of statutory damages; permits fair use defense to proceed

They say the best defense is a good offense. If so, today Judge Nancy Gertner took away Joel Tenenbaum's best defense, granting the record label plaintiffs' motion to dismiss his abuse of process counterclaims, and refusing to allow him to add the RIAA as a counterclaim-defendant:

Judge Nancy Gertner: Electronic ORDER entered granting [670] Motion to Dismiss Counterclaims Asserted By Defendant Joel Tenenbaum by All Plaintiffs; denying [693] Motion to Add the Recording Industry Association of America (RIAA) as a Party to Defendant's Amended Counterclaim by Joel Tenenbaum. "The Plaintiffs Motion to Dismiss Counterclaims [#670] is GRANTED. Defendants Motion to Join the RIAA [#693] is DENIED as moot. The Supreme Court has held that no federal cause of action for abuse of process exists. Wheeldin v. Wheeler, 373 U.S. 647, 652 (1963); see also Berisic v. Winckelman, 2003 WL 21714930, at *2 (S.D.N.Y. 2003); Voors v. National Women's Health Org., Inc., 611 F.Supp. 203, 207 (D.C. Ind. 1985) (refusing to find a federal question even where defendants alleged that the court process abused was the federal court process). Even if this Court were to decide that Wheeldin were inapposite based on its facts, it still would reject the Defendant's federal abuse of process claim for the very same reason that his state abuse of process claim fails. Any abuse of process necessarily involves an attempt to coerce a defendant into surrendering some collateral benefit through court process. It "consists of using process to accomplish some ulterior purpose for which it was not designed or intended, or which [i]s not the legitimate purpose of the particular process employed." Davidson v. Cao, 211 F.Supp.2d 264, 287 (D. Mass. 2002) (citations omitted). In this quality, abuse of process resembles extortion. See Restatement (Second) of Torts s. 682. Yet the Defendant has identified no such ulterior motive or purpose here. Settlements driven by large potential damages and costly lawyers' fees are not the equivalent of extortion -- they are the calculus faced by almost every civil defendant. Even if the Court views file-sharing lawsuits as unwise and the statutory penalties a remarkably poor policy judgment, the objectives sought by this suit are well within those contemplated by Congress and the Copyright Act, 17 U.S.C. s. 101 et seq. The Plaintiffs seek to recover damages for copyright infringement expressly authorized by statute, and to deter others' infringing activities -- a purpose that both Congress and the Supreme Court have credited in this very context. See H.R. Rep. No. 106-216, at 3 (1999); Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 940 (2005) (approving contributory liability for copyright infringement occurring on file-sharing networks, based on "evidence of infringement on a gigantic scale"). The Defendant's allegation that the Plaintiffs, through these lawsuits, seek to "close the Net" amounts to little more than a claim that they have sought to broadly deter the unauthorized online distribution of copyrighted sound files. Put simply, the effort to deter an activity prohibited by Congress -- by attempting to enforce precisely the rights created by Congress -- does not constitute an abuse of process. See Vahlsing v. Commercial Union Ins. Co., Inc., 928 F.2d 486, 490 (1st Cir. 1991) ("[w]hen process is employed for the purpose for which the law intends its use, no abuse of process occurs."). The Defendant appears to believe that this lawsuit constitutes an "abuse of process" because it is part of a wider campaign targeting file-sharing activities, one which has swept up large numbers of young people accused of downloading and distributing copyrighted works, many of whom cannot afford counsel. The Court has expressed its views on the Plaintiffs' litigation campaign before. But abuse of process, as the cause of action is defined, does not turn on the identity of the defendants, their ability to hire an attorney, nor their inclination to settle the claims against them. Congress has handed the Plaintiffs a massive hammer to combat copyright infringement, and they have chosen to use it. That choice, whether wise or unwise, does not amount to an abuse of process." (Gaudet, Jennifer)

Translated into plain English, Judge Gertner is saying: "I don't like that the labels are filing these lawsuits, but they're entirely within their rights to do so. So, Professor Nesson, go complain to Congress -- not me."

While Tenenbaum has failed in his effort to go on the offense, Judge Gertner has permitted some of his defenses, no matter how far-fetched, to live to see another day. First, Judge Gertner has permitted Tenenbaum to amend his answer to assert a fair use defense:

The late addition of the fair use defense is more troubling to the Court, however it believes that this amendment will not significantly prejudice the Plaintiffs nor substantially delay trial, see Fed.R.Civ.P. 15(a) (permitting amendments "when justice so requires"), and that fair use is more appropriately resolved on a factual record as most courts have done, rather than through the futility analysis applied under Fed.R.Civ.P. 12(b)(6). See, e.g., BMG Music v. Gonzalez, 430 F.3d 888 (7th Cir. 2005) (appeal from summary judgment); UMG Recordings, Inc. v. MP3.com, Inc., 92 F.Supp.2d 349 (S.D.N.Y. 2000) (partial motion for summary judgment); E. Gluck Corp. v. Rothenhaus, 585 F.Supp.2d 505, 514-15 (S.D.N.Y. 2008) ("[A]lthough affirmative defenses may be raised in a motion to dismiss, defenses such as the fair use doctrine involve a more detailed analysis of the facts at issue and are best resolved by summary judgment or adjudication at trial.") (citation omitted)). As a practical matter, the Court believes that any new discovery required by this defense is limited and, accordingly, the parties will face strict deadlines in relation to any discovery sought. After reviewing the parties' scheduling proposals, the Court shall issue a Revised Scheduling Order in keeping with this ruling." (Gaudet, Jennifer)

To be clear, Judge Gertner is not saying that the fair use defense has any chance of carrying the day. She is merely saying that she will permit Tenenbaum to pursue it for the moment, while, I believe, signaling with her citations that it is unlikely to survive a motion for summary adjudication by the plaintiffs.

Also, on Tenenbaum's motion to dismiss the plaintiffs' claim for statutory damages as unconstitutionally excessive, Judge Gertner declined to rule at this time, deferring a more definitive decision unless and until a jury actually renders a verdict for plaintiffs and awards statutory damages. I think this was the right result under the doctrine of constitutional avoidance. In so ruling, Judge Gertner did reject several of Tenenbaum's more far-fetched arguments, including that "the Copyright Act...represents an unconstitutional delegation where it grants private parties the ability to enforce copyright laws through civil suits" and that the Act's statutory damages provisions apply only to commercial infringers: "there is simply no sound textual basis in Section 504(c) for the construction that the Defendant proposes."

Lastly, Tenenbaum muses at length about fair use, and pleads poverty rather than the rules of civil procedure, as he opposes the labels' motion to strike his experts.

All in all, not a good day for Tenenbaum.