Legal Issues

by Tim Cushing


Filed Under:
copyright trolling, extortion, lawsuit

Companies:
rightscorp



Rightscorp Facing Another Lawsuit For Harassing Alleged Infringers

from the Omnishambles:-est.-2013 dept

Rightscorp -- another company with designs on revolutionizing the pursuit of infringers -- has a murky past, a very troubled present, and almost no future. For the second time in three months, it's facing a lawsuit over its shakedown tactics. Rightscorp tries to present itself as the good guy of the anti-piracy world, "allowing" alleged infringers to buy their way back into the company's good graces for the low, low price of $20 per accusation. It seems like quite a bargain when coupled with the company's Standard Threat Letter, which never fails to mention the $150,000 statutory limit when addressing potential shakedown victims.

So far, its efforts have met with limited success. (Putting it kindly.) Its stock price -- which occasionally threatened to top the gilded $1/share limit now hovers at around $0.09/share.

Its perky press releases can't hide the fact that a trickling revenue stream backed by shady tactics is never going to make millionaires of its shareholders.

The lawsuit filed last November accuses Rightscorp of violating damn near everything under the sun in its quest to spin alleged infringers into gold.
The complaint seeks class damages against Rightscorp for violations of the Telephone Consumer Protection Act, the Fair Debt Collection Practices Act, California’s Rosenthal Act, and Abuse of Process. The complaint alleges unlawful robo-calls, as well as other unfair debt collection practices, and that Rightscorp has abused the legal process by issuing DMCA Section 512(h) subpoenas that it knew were objectively baseless.
If someone can take Rightscorp down for its shakedown tactics, it's probably Morgan Pietz, who is armed with a wealth of practical Prenda experience. This latest suit doesn't have Pietz, but it does have another list of accusations, most of which revolve around Rightscorp's seeming indifference to federal laws governing telecommunications.

First, in the rundown of the events leading to this class action lawsuit, attorney Sergei Lemberg points to the fact that Rightscorp's questionable tactics can be traced back to information obtained with an equally questionable subpoena. (Internal citations omitted.)
The legality of Rightscorp’s subpoenas is highly questionable. Under 17 U.S.C. § 512(h), a subpoena may not be issued to an ISP which does not store information on its system but rather acts as a mere “conduit” for electronic communications. Rightscorp willfully disregards this requirement, issuing such subpoenas to conduit ISPs and storage ISPs alike. In In re Subpoena Issued to Grande Commc’ns Networks LLC, 1:14-mc-00848, Doc. No. 1 (W.D. Tex. Sept. 5, 2014), the plaintiffs moved to quash a subpoena issued by Rightscorp to its internet service provider. Rather than defend its subpoena’s legality, Rightscorp packed up its bags and withdrew its subpoena the very next day. The case was dismissed in result.
From there, the filing moves on to what Rightscorp did with its questionably-obtained subscriber data, including the deployment of unsolicited phone calls, text messages and threatening emails. Here's one email one plaintiff received.
Dear Melissa Brown,

Attached is the evidence of 26 copyright infringements that have occurred as a direct result of a file sharing program operating under your internet connection: [REDACTED]. I have also included all 26 e-mail notifications that were automatically sent to your internet service provider regarding federal law being broken under their services. Any further questions or concerns you may contact my direct line at (310) 405- 0102. I do ask that you refrain from derogatory language when speaking with a DMCA Agents, as the transactions are kept on file.

Thank you for your cooperation,
Marina
The last sentence of this email stands out, as it could add to the numerous legal woes currently being faced by Rightscorp. As was pointed out by one of Fight Copyright Troll's Twitter followers, this wording suggests Rightscorp records and stores all incoming calls in apparent violation of California law.
California is a so-called two-party state, and the recording of a phone conversation without consent may result in penalties.
That point isn't mentioned in the lawsuit, but plenty of other violations are. The complaint notes that Rightcorp also sent unsolicited text messages to the plaintiff's phone as well as used a robodialer to make repeated calls. Considering the only loophole for unsolicited communications under the Telephone Consumer Protection Act pertains to "emergency purposes," it would appear that its use of both (text messages are considered "calls" by the FCC) run afoul of federal law.

Despite being told to cease its calls, emails and text messages, Rightscorp persisted. Now, it's being accused of "wilfully violating" the TCPA in its pursuit of the two plaintiffs.

While debt collectors are allowed to call debtors to pursue collections, they have to adhere to many rules, including how many calls may be placed a day and between what hours. Unless consent is obtained, they cannot send text messages or use other forms of communications (like email).

Rightscorp isn't a debt collector, although I'm sure it feels its business model is closely related. In reality, Rightscorp's business is more closely aligned with telemarketers, which any person can opt out of receiving calls from in perpetuity. (Telemarketers are also not allowed to send unsolicited text messages.) Rightscorp is, in essence, selling $20 settlements to any alleged infringer it can obtain contact data for. Its "offers" are backed by no legal authority. It would take an actual lawsuit to pursue infringement allegations and that has never been part of Rightscorp's plans.

If it chose to handle its business honestly (by suing alleged infringers), it would have no need to harass the accused via phone calls, emails and text messages. (It would, in fact, have several reasons not to contact potential defendants.) But since suing doesn't figure into the revenue stream, Rightscorp is reduced to pitching tiny "settlements" (in quotes because settling doesn't prevent an infringer from being sued by the rightsholders themselves) to the gullible or easily-intimidated.

Hopefully, this lawsuit (and its previous one) will take the last few pennies out of its falling stock price and force it to return to whatever it was that it was doing when it was d/b/a Stevia Agritech Corp. or Kids Only Market Inc. There are much better ways to pursue alleged infringers (like: not at all!) than abusing or skirting every law on the books that relates to the chosen "business model." At this point, Rightscorp's tactics appear to be every bit as toxic as its stock price.

Reader Comments

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  • icon
    That One Guy (profile), 23 Feb 2015 @ 2:36pm

    Bending or flat out breaking the laws to go after accused infringers...

    You know, I'd have a lot more sympathy with those involved with fighting piracy, if they didn't, almost every time, resort to questionable or flat out illegal means to do so, and didn't utilize tools and methods that without fail barely bother real pirates, while only affecting legal, paying customers, or those that aren't even involved.

    reply to this | link to this | view in chronology ]

  • icon
    orbitalinsertion (profile), 23 Feb 2015 @ 2:46pm

    Hilarious.

    Formerly=Stevia Agritech Corp. until 7-2013
    Formerly=Kids Only Market Inc. until 5-2012


    Another one of those business entities in search of an actual business. Good luck, have fun with that!

    reply to this | link to this | view in chronology ]

  • identicon
    UniKyrn, 23 Feb 2015 @ 3:36pm

    Has somebody created a form letter to send back to them, explaining that they've been caught violating federal law, but for a $20 payment (per violation) you'll consider not suing them? :)

    reply to this | link to this | view in chronology ]

    • icon
      That Anonymous Coward (profile), 23 Feb 2015 @ 3:51pm

      Re:

      public statement by them, IIRC (I sometimes am confused), was that they felt that the court was wrong in its ruling about the subpoenas they are abusing and so they didn't have to listen until SCOTUS ruled on it.

      So they avail themselves of the legal system, but only when it benefits them... otherwise it is to be ignored. And this is why they are being sued.

      reply to this | link to this | view in chronology ]

  • identicon
    Scote, 23 Feb 2015 @ 4:42pm

    No indemnification????

    So, if the "settlements" don't prevent the ISP account holder from being sued by rights holders, the what good are they? That sounds more like *fraud*. "Here, pay us money so we'll stop calling you, and in return, we'll give you nothing."

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 23 Feb 2015 @ 4:47pm

    antidirt's best and brightest.

    reply to this | link to this | view in chronology ]

  • identicon
    don cox, 23 Feb 2015 @ 9:26pm

    Rightscorp

    Why not a crowd funded campaign to buy all the stock and shut them down?

    reply to this | link to this | view in chronology ]

  • identicon
    Anun Eh Muse, 25 Feb 2015 @ 9:27am

    "I do ask that you refrain from derogatory language when speaking with a DMCA Agents"

    That jumped out at me for a different reason.

    A "DMCA Agent"?????

    That gives an immediate impression the individual would be speaking with some form of Law Enforcement Officer - like the FBI, CIA, Police, etc. rather than a Lawyer/entity in a Civil situation.

    A reasonable Jury may find that statement to be reflective that RightsCorp are in breach of the Laws surrounding the impersonation of peace/police officers.

    reply to this | link to this | view in chronology ]


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