Twitter Successfully Quashes Sketchy Copyright Subpoena Over Billionaire’s Critic On Twitter

Copyright

from the call-me-anonymity-protection-bags dept

You may recall that, last fall, we wrote about a truly bizarre legal fight, in which a little-followed pseudonymous Twitter account @CallMeMoneyBags had tweeted out some images of a woman, suggesting a few times that the woman was the mistress of billionaire Brian Sheth. The account put out lots of tweets generally mocking people in the private equity space, including Sheth. Sometime after the tweets including those photos, Twitter received a DMCA subpoena from a company called Bayside Advisory, which had basically no presence online, claiming it held the copyrights in those photos and demanding identifying information on Money Bags.

The most obvious assumption was that Bayside was connected to Sheth and this was a way of finding out who this anonymous critic was. Twitter stepped in to the case to seek to quash the subpoena, noting that this did appear to be an attack on the right to anonymity — and also noting that this was an obvious fair use of the images. Bayside insists that it’s not connected at all to Sheth, but there’s a lot that’s sketchy about the organization (more on that shortly). The magistrate judge in the case first said that it couldn’t determine the fair use issue without hearing from Money Bags, and ordered Twitter to alert the user to show up in court. The Money Bags account appears to have been totally abandoned from about the date of the original subpoena, and it’s unclear if Twitter was able to contact the user, but the user didn’t show up in court at all, leading the court to order Twitter to reveal the information to Bayside.

Twitter, correctly, asked the court to reconsider, and the issue was handed over to district court judge Vince Chhabria, who held a hearing last month (which I viewed). It became clear quite quickly that Chhabria fully understood the issues at play here: he kept demanding that Bayside’s lawyer explain how any of this made sense, and even tried to find out if Bayside was abusing judicial process for the sake of harassing a critic of Sheth’s. Indeed, at one point, the judge demanded that Bayside’s lawyer explain who he spoke to at Bayside, and the lawyer tried not to answer before first only giving a last name, and then finally revealing a full name (Bert Kauffman).

Also, on the fair use side of things, Chhabria wasn’t putting up with any of Bayside’s nonsense. At one point, the lawyer for Bayside argued that they were in the active business of licensing photos (a questionable argument, as the company only registered these photos and a few others as the first registrations it had ever done, just before issuing the subpoena), but the judge made the lawyer call up Bayside’s website during the hearing to point out that there is no contact information at all, and no apparent way to reach the company for licensing.

Also, during the hearing, Judge Chhabria repeatedly suggested that maybe he should hold an evidentiary hearing to find out more about who is actually behind Bayside. He made it clear he was going to quash the subpoena, and at one point asked Bayside’s lawyer if he wanted to further supplement the record to argue why it wasn’t fair use — knowing that this might also open up further investigation into who was behind Bayside — and Bayside’s lawyer flat out said he’d prefer the subpoena be quashed to having to defend who was behind Bayside.

Anyway, it took about a month, but Judge Chhabria has, in fact, quashed the subpoena. He lays out a concise summary of the case, and then notes:

Bayside’s reading of the DMCA raises serious constitutional concerns. After all, it is not enough to say that a speaker could assert their right to anonymity after their identity has been revealed; at that point, the damage will have been done. Fortunately, the statute does not compel (or permit) this result. Section 512(h) provides that “the procedure for issuance and delivery of the subpoena, and the remedies for noncompliance with the subpoena, shall be governed to the greatest extent practicable by those provisions of the Federal Rules of Civil Procedure governing the issuance, service, and enforcement of a subpoena duces tecum.” § 512(h)(6). This provision incorporates Federal Rule 45, under which a court must “quash or modify” a subpoena that “requires disclosure of privileged or other protected matter.” Fed. R. Civ. P. 45(d)(3)(A)(iii). A recipient of a DMCA subpoena may therefore move to quash on the basis that the subpoena would require disclosure of material protected by the First Amendment. See, e.g., Signature Management Team, LLC v. Automattic, Inc., 941 F. Supp. 2d 1145, 1152–53 (N.D. Cal. 2013); In re Verizon Internet Services, Inc., 257 F. Supp. 2d 244, 263–64 (D.D.C. 2003), rev’d on other grounds, Recording Industry Association of America, Inc. v. Verizon Internet Services, Inc., 351 F.3d 1229 (D.C. Cir. 2003). The fact that the DMCA allows a potential copyright infringement victim to issue a subpoena to a service provider without first filing a lawsuit says nothing about whether courts should consider the interests of anonymous speakers in the same way they would in other situations.

On the fair use side, he’s also not impressed by Bayside’s arguments:

Bayside next argues that, to the extent MoneyBags has any First Amendment interest in this case, it is wholly accounted for through copyright’s fair use analysis, which allows the public to use copyrighted works in certain circumstances without facing liability. As Bayside notes, while the First Amendment does not protect copyright infringement, “copyright law contains built-in First Amendment accommodations.” Eldred v. Ashcroft, 537 U.S. 186, 219–20 (2003). This has led some courts to eschew interest balancing in cases seeking to deanonymize alleged copyright infringers. See In re DMCA Subpoena to Reddit, Inc., 441 F. Supp. 3d 875, 882 (N.D. Cal. 2020) (noting that applying the two-step approach in the context of a copyright dispute would be “problematic” because “[t]he doctrine of fair use provides everything needed to balance the competing interests of the First Amendment and the copyright laws”). But while it may be true that the fair use analysis wholly encompasses free expression concerns in some cases, that is not true in all cases—and it is not true in a case like this. That is because it is possible for a speaker’s interest in anonymity to extend beyond the alleged infringement.

Consider a hypothetical not far afield from these facts. An anonymous blogger writes hundreds of blog posts criticizing a powerful political figure, Mr. X. In one post, the blogger includes a copyrighted image owned by Mr. X. If Mr. X were to sue for copyright infringement, the court would need to consider the interests on both sides—even if the blog post did not constitute fair use. The blogger’s interest in anonymity (with respect to Mr. X) may be so great as to outweigh Mr. X’s interest in enforcing his copyright.

Exactly.

Chhabria also notes that, contrary to the argument made by the magistrate judge (and Bayside), Money Bags’ decision not to show up in court doesn’t take away Money Bags’ 1st Amendment rights:

Finally, Bayside argues that MoneyBags’s absence dooms Twitter’s motion. But although MoneyBags’s presence would be helpful, it is not necessary. There are many reasons why an anonymous speaker may fail to participate in litigation over their right to remain anonymous. In some cases, it may be difficult (or impossible) to contact the speaker or confirm they received notice of the dispute. Even where a speaker is alerted to the case, hiring a lawyer to move to quash a subpoena or litigate a copyright claim can be very expensive. The speaker may opt to stop speaking, rather than assert their right to do so anonymously. Indeed, there is some evidence that this is what happened here: MoneyBags has not tweeted since Twitter was ordered to notify him of this dispute.

The Ninth Circuit has accordingly recognized that internet platforms can assert the First Amendment rights of their users, based on the close relationship between the platform and its users and the “genuine obstacles” users face in asserting their rights to anonymity. In re Grand Jury Subpoena, No. 16-03-217, 875 F.3d 1179, 1183 n.2 (9th Cir. 2017). As a platform that permits anonymous posting, Twitter risks losing users if people learn that the company discloses users’ identities to anyone who asks. Moreover, Twitter’s interest in this dispute aligns with that of MoneyBags; both have an interest in protecting MoneyBags’s ability to speak his mind on Twitter without facing retaliation. Finally, there are genuine obstacles to MoneyBags’s participation, given the expense of litigation and the lack of a contrasting economic incentive in this suit. Cf. Powers v. Ohio, 499 U.S. 400, 415 (1991) (“[T]here exist considerable practical barriers to suits by the excluded juror because of the small financial stake involved and the economic burdens of litigation.”). To be sure, MoneyBags may be better equipped to articulate his interest in maintaining anonymity in this context, but his failure to appear does not prevent the Court from considering First Amendment interests when adjudicating the motion, as it would do in a more typical case.

The court then does a fair use four factors analysis, finding strongly in favor for fair use. On purpose and character? Easily fair use.

The use here—tweets by an unverified Twitter account with a small following that only garnered a handful of likes, retweets, or comments—is not commercial, a fact that “tips the scales in favor of fair use.” Google LLC v. Oracle America, Inc., 141 S. Ct. 1183, 1204 (2021). What’s more, the use is transformative. Considered on their own, the copyrighted photos may have aesthetic value. But MoneyBags was not using the photos for their artistry. Rather, by placing the pictures in the context of comments about Sheth, MoneyBags gave the photos a new meaning—an expression of the author’s apparent distaste for the lifestyle and moral compass of one-percenters. This transformation fits squarely within Section 107’s examples of fair use, particularly “criticism” and “comment.”

The second factor, on the nature of the work, could go either way according to the court. The ruling notes the fact that the photos were published long before they were registered weighs in favor of fair use, and that many of the photos were regular social media style photos, and not artistic, also weighs in favor — but the fact that some of the photos are “somewhat more artistic” could potentially weight against fair use.

The amount used is also seen as neutral since, while the entire photos are used, “in the context of a photograph” that “is not meaningfully divisible” it’s determined to be neutral.

But the fourth factor, which is often the most important, on the impact of the marketplace is what really dooms Bayside’s claims.

Bayside offers that it is a “communications and strategic advisory firm” that “licenses photographs for commercial exploitation.” But beyond this vague explanation of its business model, Bayside nowhere explains what the potential market for these licenses is, let alone how that market could be impacted by tweets like MoneyBags’s. Further, Bayside’s explanation of its business is hard to accept at face value given the suspicious circumstances surrounding this motion (more on that later). And Bayside declined an opportunity (offered at the hearing) to supplement the record with actual evidence of market harm. This factor therefore weighs in favor of fair use.

From there, though, Judge Chhabria notes that even if Bayside had made a prima facie case for copyright infringement (which it did not, due to the fair use analysis), he still would have quashed the subpoena based on 1st Amendment concerns, the general sketchiness around Bayside, and the caginess of the company’s lawyer during the hearing.

Considering “the nature of the speech” at issue, there is no question that significant First Amendment interests are at stake. In re Anonymous Online Speakers, 661 F.3d 1168, 1177 (9th Cir. 2011). The six tweets flagged by Bayside are best interpreted as vaguely satirical commentary criticizing the opulent lifestyle of wealthy investors generally (and Brian Sheth, specifically). For example, one tweet reads: “Good morning from Mrs. Brian Sheth #2. Life is good when you’re a 44-year old private equity billionaire.” The tweet accuses Brian Sheth of having a mistress and links his infidelity to the broader class of “private equity billionaires,” suggesting that wealth (or working in private equity) corrupts. Unmasking MoneyBags thus risks exposing him to “economic or official retaliation” by Sheth or his associates. McIntyre v. Ohio Elections Commission, 514 U.S. 334, 341–42 (1995). And MoneyBags’s interest in anonymity is heightened further by his other tweets, which discuss issues of political importance such as sexual harassment, tax enforcement, and corporate regulations.

This is where the mystery surrounding Bayside makes a difference. If the Court were assured that Bayside had no connection to Brian Sheth, a limited disclosure subject to a protective order could perhaps be appropriate. But the circumstances of this subpoena are suspicious. As far as the Court can tell, Bayside was not formed until the month that the tweets about Sheth were posted on Twitter. It appears that Bayside had never registered any copyrights until the registration of these six photographs, which happened after the tweets were posted. And there appears to be no information publicly available about Bayside’s principals, staff, physical location, formation, or purposes.

Rather than explaining these puzzling facts, Bayside’s counsel simply filed a declaration stating that “Bayside is not and has not ever been owned or controlled by Brian Sheth.” The declaration also notes that Brian Sheth does not own, and has not ever owned, “any interest in the copyrights to the Photographs.”5 Even setting aside the fact that this declaration came from counsel, rather than a party with personal knowledge of its veracity, it raises more questions than it answers. Is Bayside owned or controlled by someone associated with Brian Sheth? Was Bayside formed in response to these tweets? How did Bayside come to acquire these copyrights, and from whom? When pressed at the hearing, Bayside’s counsel, Lawrence Hadley, would not (or could not) expand on these vague assertions.

The court then includes the bit of the hearing that caught my attention as well, when the lawyer was asked to say who he interacted with at Bayside:

Mr. Hadley: I can say that—that the subject of the tweets has no ownership interest in Bayside. This is all set forth in an affidavit.

. . .

The Court: . . . [D]oes the subject of the tweets—Mr. Sheth, does he know anybody who is connected [to] Bayside?

Mr. Hadley: I don’t know. I don’t know who the person is, and I don’t know who they know.

The Court: Okay. Who—can you name a person who is connected to this company called Bayside? Can you name—can you give me some names of people who operate or work for Bayside?

Mr. Hadley: My client contact is a person named Mr. Kaufman

The court concludes that this is all very, very sketchy.

Of course, even a weighty First Amendment interest may give way in the face of a strong interest on the other side. But here too, the Court is left scratching its head. It is not clear what Bayside has to gain from pursuing a copyright action against MoneyBags. Injunctive relief is unavailable, as Twitter has already taken the photos down. Because Bayside registered the copyrights after the alleged infringement, it appears as though Bayside could recover only limited damages that are unlikely to cover the considerable expense of pursuing its copyright claims and no attorney fees. See 17 U.S.C. § 412. And as discussed in the preceding section, Bayside has offered no information on the market harm it could conceivably have suffered as a result of the postings. All Bayside has offered in support of its identity are a few vague descriptions of its services—claiming it is a “communications and strategic advisory firm” that “licenses photographs for commercial exploitation.” A visit to Bayside’s website (which the Court conducted with Bayside’s counsel present during the hearing) revealed a shell of a site with no information about Bayside, what it does, who owns the company, who works for the company, or how any customer could license the photographs the company allegedly owns. See Bayside Advisory LLC, https://baysideadvisory.com [https://perma.cc/26DU-3NNT] (captured May 16, 2022).

Given all the unknowns, at oral argument the Court offered Bayside an opportunity to supplement the record with an evidentiary hearing or additional documentation. Bayside declined, stating that it preferred the motion to be adjudicated on the current record. There would perhaps be some benefit in insisting on an evidentiary hearing to explore the circumstances behind this subpoena—to explore whether Bayside and its counsel are abusing the judicial process in an effort to discover MoneyBags’s identity for reasons having nothing to do with copyright law. Perhaps that hearing could even result in an award of attorney’s fees for Twitter. But Twitter stated that it too prefers not to have an evidentiary hearing. Accordingly, the record will stand, and the people connected to this mysterious company will succeed in preserving their own anonymity. But Bayside’s choice not to supplement the record makes it quite easy to balance MoneyBags’s interest in preserving his anonymity against Bayside’s alleged interest in protecting its apparent copyrights. On this record, even if Bayside had made a prima facie showing of copyright infringement, the Court would quash the subpoena in a heartbeat.

So whoever is actually behind Bayside remains a mystery. But, thankfully, so too is whoever is behind Money Bags.

Now, the question is whether or not whoever is behind Bayside wants to push their luck, and appeal to the 9th Circuit…

Filed Under: 1st amendment, 512h, anonymity, brian sheth, callmemoneybags, copyright, criticism, dmca, free speech, lawrence hadley, supboenas
Companies: twitter