Court dismisses counterclaims, but allows defendant to assert fair use defense, in SONY BMG Music v. Tenenbaum

In SONY BMG Music Entertainment v. Tenenbaum, the Court has (a) dismissed all of defendant's proposed counterclaims, and (b) allowed defendant to assert a fair use defense.

The Court indicated that a subsequent order would be forthcoming amending the discovery schedule to allow for discovery on the fair use issues.

The Court's orders are as follows:

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)

Judge Nancy Gertner: Electronic ORDER entered denying [686] Motion to Amend; granting [806] Motion to Amend. "The Defendants Second Motion to Amend Answer and Counterclaims [#686] is DENIED as moot. The Defendants Third Motion to Amend Answer and Counterclaims [#806] is GRANTED. For the purpose of this Order, the amended abuse of process counterclaims are allowed as a clarification of the Defendant's earlier pro se filing, which presented similar claims, reframed with the benefit of counsel. However, the matter is largely one of form, in light of the Court's contemporaneous Order granting Plaintiffs' Motion to Dismiss Counterclaims [670]. 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)

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