Justice Department Practicing Mix-And-Match, Sleight-Of-Hand Law In Seizure Case

from the pay-no-attention-to-that-law-behind-the-curtain dept

We've obviously been following with great interest the Federal Government's arguments for why it's allowed to seize domains under the "Operation In Our Sites" banner. The "main event" in the legality of such seizures, for now, is the fight between the Justice Department and the Spanish company Puerto 80, who runs the site Rojadirecta. As you may recall, Homeland Security's ICE division seized two Rojadirecta domain names back in January, despite the fact that the company had been declared perfectly legal in its home country. The Justice Department then did everything it could to stall any of the owners of seized sites from protesting the seizures, often threatening the site owners that if they filed a protest, then criminal charges would be filed against the sites (and, yes, in case you hadn't realized it, that means that all of the sites were seized without any charges being filed).

Homeland Security and the Justice Department are well aware that site owners are challenging the legality of the seizure of five of the domains, but so far only Puerto 80/Rojadirecta has officially gone to court to demand the return of its domains. Almost immediately after Puerto 80 petitioned the court to get its domain back, the Justice Department (as per its threats) officially filed charges against the site. Earlier this month (after stalling once again and getting the court to grant it a delay), the Justice Department finally filed its response to the petition by Puerto 80, which we thought was incredibly weak. Basically, the US Attorneys argued that stifling speech isn't considered "substantial harm" in their eyes, which is a pretty stunning interpretation of the First Amendment.

Puerto 80's lawyers wasted almost no time at all in replying to the Justice Department, and you can read their full filing below. It's absolutely worth reading because it so completely rips to shreds the government's arguments here. I want to go through a few of the key points from the filing, but wanted to call out one huge hole in the government's argument, which is briefly mentioned in Puerto 80's filing, but which appears to be a key point in the overall argument (and which has also been discussed in our comments): the government has completely failed to show any evidence of criminal copyright infringement. Since it can't do that (because it's not clear that any happened), it simply tries to conflate multiple separate parties to pretend there's criminal copyright infringement.

The argument is a little complex, so I'll try to lay it out simply:
  1. For criminal copyright infringement to have occurred, the government has to show that copyright infringement occurred with certain key factors described in Section 506 of US copyright code. The key factors: it has to be willful, it has to be "for purposes of commercial advantage or private financial gain," it has to involve reproduction or distribution of works valued over $1,000 or it has to be on works that are "being prepared" for commercial distribution, but which haven't been released yet (basically leaks). The last factor doesn't apply to Rojadirecta as far as I can tell, because it's accused of streaming sports events that are being shown on TV, meaning that it's not leaking them before they're available.
  2. The "willful" part is going to be difficult to show. The government claims that Puerto 80 was well aware that it was receiving complaints from copyright holders. But, as the law itself states, simply showing evidence of infringement is not sufficient to make it willful. Even worse, of course, are the two rulings in Spain that Rojadirecta was legal. Now, supporters of the seizures love to point out that this is US copyright law we're dealing with, and Spanish copyright law means nothing. That's true for the overall charges... but for proving "willfulness," it's still a big issue that puts a major dent in the US's case.
  3. But, the much, much bigger problem for the government is in those other factors. It knows that Rojadirecta did not reproduce or distribute any works itself. It merely has users who link to such works. Thus, it's pretty clear that there's no direct infringement -- a point that the government effectively concedes in its filing against the petition. So, instead, it seems to be hanging its hat on the claim of contributory infringement. Since there is no contributory criminal copyright infringement in the law, the Justice Department is trying to claim that it still works under an aiding and abetting theory.
  4. There are serious problems for the government in making that stick. Here's the biggest one: just what crime is the government accusing Puerto 80 of aiding and abetting? For there to be aiding and abetting there needs to be criminal copyright infringement done by someone else "aided and abetted" by Rojadirecta. So, here's the problem. Who is that "someone else" that Rojadirecta aided and abetted? The Justice Department will claim that its Rojadirecta's users. But go back up to step 1 above. It's unlikely that any of Rojadirecta's users actually meet the criteria ("for purposes of commercial advantage or private financial gain") necessary to make their use criminal. Their use may still be infringing, but not criminally infringing. Thus, there is no evidence of a crime committed by someone else that Rojadirecta could have aided and abetted. Certainly, the government doesn't show any such evidence.
  5. Basically, the government seems to be conflating two separate parties to try to create criminal copyright infringement out of thin air. That is, it may get Rojadirecta on the first factor, but can't on the second factor. It might be able to get some users on the second factor, but can't on the first factor. So, basically, the government simply doesn't have the goods to prove criminal copyright infringement, and instead is trying to wave its hands in the air really quickly, in hopes that the court doesn't notice this. It seems to think that if it talks about the users' potential civil infringement and quickly switches to Rojadirecta making money from providing a service, it can pretend it's met the factors for criminal infringement... even though it hasn't.
In fact, as part of that hand-waving to distract the court, it seems that the Justice Department is either so incompetent or so desperate that it cited a case that didn't actually say what they claimed it said. Instead, it falsely claimed one case said something when the quote was actually from another case... whose facts were totally different:
The government does not address those arguments or the authority Puerto 80 cites, and instead makes the remarkable suggestion that Puerto 80's failure to "stop an infringing copy from being distributed worldwide constitutes substantial participation in" distribution of copyrighted material. See Opp'n at 21. That is not the law. In fact, it is not the law according to the authority to which the government attributes it—the quote, purportedly from Cubby, Inc. v. CompuServe, Inc., 776 F. Supp. 135, 141 (S.D.N.Y. 1991), is not found in Cubby. Rather, it comes from Religious Tech'y Ctr. v. Netcom On-Line Communication Svcs Inc., 907 F. Supp. 1361, 1374 (N.D. Cal. 1995), in which the court found that a material issue of fact existed on the question of whether an online bulletin board system operator was contributorily liable for distributing material which was hosted on its server. The government makes no attempt to explain how the facts of Netcom align with the instant facts, and, indeed, they do not. But Puerto 80 need not belabor the point, because it is irrelevant. That is because even if Puerto 80 could be held liable for contributory infringement, such liability would not support criminal charges.
Nice work, Justice Department... citing the wrong case. Whether you believe it's incompetence or deception, it looks bad either way.

On top of that, the government plays up the whole aiding and abetting claim in its response to the petition, but as Puerto 80 points out in the latest filing: the government's actual charges in its forfeiture case against Puerto 80 don't include aiding and abetting because forfeiture is not allowed for aiding and abetting:
... the domain names were not seized based on an allegation of aiding and abetting, and the government chose not to bring those charges in its forfetiyre complaint. Even if it had, those charges would not support forfeiture of the domain names because the forfeiture statute does not permit seizure based on those crimes. See 18 U.S.C. § 2323 (permitting seizure based on alleged violations of specific statutes, of which 18 U.S.C. §§ 2 and 371 are not among).
In other words... the government really seems to be trying to completely remake the law here, pretending it says all sorts of stuff it does not. And in order to do that, it basically keeps conflating different parties and switching back and forth in a sort of legalistic sleight of hand. One hopes the courts are not fooled by these rather deceitful tactics.

Now, the government has argued that most of these arguments belong in the fight over the forfeiture, rather than in this petition to return the domain, but again, Puerto 80 points out that this makes no sense, and is the whole reason why the concept of "prior restraint" is an issue. The government isn't supposed to be able to stifle speech and then say "we'll figure it all out at trial later...." Thus, Puerto 80 argues, the only proper thing to do is to return the domains, and then get on to the meat of the problems of the government's entire rationale for the seizures and forfeiture attempts.

The big question now is whether or not the courts are confused by the government's hand-waving, distractions and false citations. Or if it recognizes the underlying problems with the government's entire case. Hopefully, we'll find out soon.

Filed Under: aiding and abetting, copyright, domain seizures, ice, infringement, justice department
Companies: puerto 80, rojadirecta

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  1. identicon
    HothMonster, 20 Jul 2011 @ 12:20pm

    Re: Re:

    He is just saying that the owners and operators of the site dont have to be guilty, or proven guilty for the seizures to be valid they only have to show that the site was used for such actions. Which to my understanding is true.

    While the government has filed suit against Puerto 80(after they tried to reverse the seizure) the seizure is against the property. But as you say Puerto is the most likely candidate for the criminal infringement because it will be hard to prove anyone else profited from the sites infringement.

    "Now, we can't actually prove that a crime was committed, so we'd like you to find the Defendant guilty based on our handwaving and innuendo"

    They do have to prove that a crime was committed because of the site but it doesn't matter who committed the crime. There is no defendant per se just Peurto 80 speaking on behalf of the property.

    For instance if you used my house to sell drugs regularly they could seize it. They would only have to prove the house was used for the criminal act not that either you or I was guilty of drug trafficking.

    The actual trial against Puerto 80 is an entirely separate thing.

    IANAL but based on a few hours research into seizure statutes and case law this is my understanding, albeit probably poorly worded.

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