After II Movie, LLC v. Grande Commc'ns Networks, LLC

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AFTER II MOVIE, LLC, ET AL., Plaintiff v. GRANDE COMMUNICATIONS NETWORKS, LLC, Defendant

No. 1:21-CV-709-RP

United States District Court, W.D. Texas

January 31, 2023

DUSTIN M. HOWELL, UNITED STATES MAGISTRATE JUDGE

REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

TO THE HONORABLE ROBERT PITMAN, UNITED STATES DISTRICT JUDGE

Before the Court is Defendant Grande Communications Networks LLC's Motion to Dismiss Plaintiffs' Second Amended Complaint, Dkt. 46, and all related briefing. After reviewing these filings and the relevant case law, the undersigned issues the following report and recommendation.

I. BACKGROUND

Plaintiffs After II Movie, LLC, et al., purport to own the copyrights to certain motion pictures, primarily direct-to-video movies such as “Mechanic: Resurrection,” “Extremely Wicked, Shockingly Vile and Evil,” and “Boyka: Undisputed IV.” Dkt. 45, at ¶¶ 9-28, Dkt 45-1. Defendant Grande is an internet service provider headquartered in Texas. Plaintiffs seek to hold Grande secondarily liable for acts allegedly committed by subscribers of Grande's internet service. Specifically, Plaintiffs claim that Grande is secondarily liable for copyright infringement because it did not terminate the internet access of subscribers that Plaintiffs' agent, Maverickeye UG, accused of sharing copyrighted content over the internet. In addition, Plaintiffs claim that Grande's subscribers violated the Digital Millennium Copyright Act, and seek to hold Grande secondarily liable for these alleged DMCA violations.

Plaintiffs allege they engaged Maverickeye, a third party based in Germany, to monitor BitTorrent activity for infringement of their copyrighted works. Dkt. 45, at ¶ 72. Plaintiffs allege that Maverickeye would then send “Notices of infringements”-emails-to Grande regarding instances of copyright infringement by Grande's subscribers. Id., at ¶ 102. Plaintiffs assert that Grande failed to take action after these notifications and allowed pirating of their copyrighted works via use of BitTorrent. Grande moves to dismiss Plaintiffs' claims of contributory copyright infringement, DMCA claim, and request for injunctive relief asserting Plaintiffs have failed to state a claim upon which relief may be granted.

II. LEGAL STANDARD

Pursuant to Rule 12(b)(6), a court may dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). In deciding a 12(b)(6) motion, a “court accepts ‘all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.'” In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (quoting Martin K. Eby Constr. Co. v. Dall. Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004)). “To survive a Rule 12(b)(6) motion to dismiss, a complaint ‘does not need detailed factual allegations,' but must provide the plaintiff's grounds for entitlement to relief-including factual allegations that when assumed to be true ‘raise a right to relief above the speculative level.'” Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). That is, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570).

A claim has facial plausibility “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “The tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. A court ruling on a 12(b)(6) motion may rely on the complaint, its proper attachments, “documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.” Dorsey v. Portfolio Equities, Inc., 540 F.3d 333, 338 (5th Cir. 2008) (citations and internal quotation marks omitted). A court may also consider documents that a defendant attaches to a motion to dismiss “if they are referred to in the plaintiff's complaint and are central to her claim.” Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th Cir. 2004). But because the court reviews only the well-pleaded facts in the complaint, it may not consider new factual allegations made outside the complaint. Dorsey, 540 F.3d at 338. “[A] motion to dismiss under 12(b)(6) ‘is viewed with disfavor and is rarely granted.'” Turner v. Pleasant, 663 F.3d 770, 775 (5th Cir. 2011) (quoting Harrington v. State Farm Fire & Cas. Co., 563 F.3d 141, 147 (5th Cir. 2009)).

III. DISCUSSION

A. Contributory Copyright Infringement Claim

Grande argues that Defendants cannot state a claim for contributory copyright infringement. “A party is liable for contributory infringement when it, with knowledge of the infringing activity, induces, causes or materially contributes to infringing conduct of another.” Alcatel USA, Inc. v. DGI Techs., Inc., 166 F.3d 772, 790 (5th Cir. 1999).

1. Direct infringement

Grande first argues that Plaintiffs cannot plead a claim for secondary copyright infringement because they have failed to identify instances of actual direct infringement. There cannot be secondary infringement without direct infringement. Phoenix Entm't Partners LLC v. Boyte, 247 F.Supp.3d 791, 799 (S.D. Tex. 2017). Grande asserts that Plaintiffs fail to identify direct infringement because Plaintiffs identify the alleged direct infringers by IP address only, and there are no facts in the pleading supporting that the alleged infringing activity at that address was performed by a Grande subscriber. Grande argues that an IP address merely identifies an internet connection and not a person. Dkt. 46, at 9. Accordingly, Grande asserts Plaintiffs' allegations fail as conclusory. Fernandez-Montes v. Allied Pilots Ass'n, 987 F.2d 278, 284 (5th Cir. 1993) (stating “conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss”). Grande asserts that Plaintiffs' pleadings merely support that someone using the IP addresses uploaded or downloaded infringing content.

Grande relies on Cobbler Nevada v. Gonzalez, 901 F.3d 1142, 1145 (9th Cir. 2018), in support of its argument. In that case, the plaintiff alleged that someone at an IP address traced to a particular home had made several downloads of a movie, in violation of Cobbler Nevada's copyright. After identifying that Gonzalez, the owner of the home, was the subscriber of the relevant internet account, Cobbler Nevada contacted him and learned that the account belonged to “an adult care home,” and the wifi network there “was accessible to both residents and visitors.” Id. Cobbler Nevada ultimately sued Gonzalez for copyright infringement, alleging that as the subscriber of the internet service, he was liable as a direct infringer, and alternatively, he was liable as a contributory infringer for failing to take steps to stop the infringement once he became aware of it.

The trial court dismissed the contributory infringement claim on a 12(b)(6) motion, and the Ninth Circuit affirmed. The panel rejected the argument that Gonzalez could be contributorily liable for infringement based solely on the allegations that he was the subscriber of the internet service, that he was aware of the infringement, and failed to take action. The court stated, “simply establishing an account does not mean the subscriber is even accessing the internet, and multiple devices can access the internet under the same IP address.” Id. at 1146-47. Because of the potential that multiple individuals and multiple devices can connect via a single IP address, the court found that “a plaintiff must allege something more to create a reasonable inference that a subscriber is also an infringer.” Id. at 1145; see also Cobbler Nevada, LLC v. Gonzales, No. 3:15-CV-866, 2016 WL 3392368, at *1, * 3 (D. Or. June 8, 2016) (“While it is possible that the subscriber is also the person who downloaded the movie, it is also possible that a family member, a resident of the household, or an unknown person engaged in the infringing conduct.”); Malibu Media LLC v. Duncan, No. 4:19-CV-2314, 2020 WL 567105, at *4-6 (S.D. Tex. Feb. 4, 2020) (granting the defendant's motion to dismiss because identifying an allegedly infringing IP address alone is insufficient to state a claim for copyright infringement-even when the registered subscriber associated with the IP address is named as a defendant) (collecting cases); see also PTG Nevada, LLC v. Chan, No. 1:16-CV-1621, 2017 WL 168188, at *2 (N.D. Ill. Jan. 17, 2017) (“Due to the risk of ‘false positives,' an allegation that an IP address is registered to an individual is not sufficient in and of itself to support a claim that the individual is guilty of infringement.”). Grande argues that Plaintiffs have failed to plead the “something more” required to support direct infringement, and therefore have not adequately pleaded a contributory copyright infringement claim.

Plaintiffs respond that the caselaw does not state that for contributory infringement to occur, the direct infringer does not have to be the subscriber. Additionally, Plaintiffs argue that Cobbler Nevada does not apply to secondary liability suits against internet service providers like Grande where “enforcement against direct infringers is both impractical and improbable.” Dkt. 47, at 6 (citing MGM Studios Inc. v. Grokster, Ltd., 545 U.S. 913 929-30 (2005); Sony Music Entm't v. Cox Commc'ns, Inc., 426 F.Supp.3d 217, 235 (E.D. Va. 2019); UMG...