The John Minor Wisdom U.S. Court of Appeals Building. Photo Credit: Timothy Holdiness
The hunted has become the hunter in UMG v. Grande, where the ISP is urging an appeals court to issue a definitive decision in and award it costs from the nearly decade-long legal battle.
Both Grande (which has been operating as Astound for some time) and the major label plaintiffs recently described their positions – and how they believe the case should proceed post-Cox – in letters to the Fifth Circuit Court of Appeals.
Under the original schedule, the high-stakes dispute, having kicked off back in 2017, was to receive a fresh trial on damages next month; a jury had previously awarded the majors nearly $47 million over Grande’s alleged failure to address subscribers’ repeat infringement.
But as many know, the Supreme Court’s unanimous Cox v. Sony Music decision significantly narrowed the scope of contributory liability – and directly impacted a number of ongoing copyright confrontations with ISPs.
That includes UMG v. Grande, which in April saw the Supreme Court vacate the existing judgment and remand to “the Fifth Circuit for further consideration in light of” Cox v. Sony. And with the district court awaiting “further instructions from the Fifth Circuit,” the initially mentioned costs have taken center stage at the appeals level.
In one corner, Grande in its letter reiterated the current definition of secondary liability and urged the appeals court to therefore enter judgment in its favor as opposed to remanding to the district court.
“On remand, the Labels cannot argue that they proved (or could prove) that Grande induced or encouraged the infringement at issue,” Grande’s legal team wrote. “That is because the Labels never pursued that theory below or on appeal. Instead, the Labels always claimed that they needed to prove only that Grande ‘materially contributed’ to its customers’ infringing acts, by providing them with internet service.”
And with the inducement argument allegedly off the table, then, there’s “‘no clear benefit’” to kicking the case down to the district court when it comes to the litigation itself. On the other hand, however, Grande is seeking appeal costs – it goes without saying that the marathon process didn’t come cheap – and urging the Fifth Circuit to remand for the “recovery of costs and attorneys’ fees at the district court level.”
In the opposite corner, it probably won’t come as a surprise that the push isn’t sitting right with the majors, which “do not intend to litigate the merits of this case further in light of the new standard” but remain adamant that the parties “should walk away from this dispute bearing their own costs.”
Long story short, this means the best course is purportedly vacating and remanding to the district court – a course that “is not only proper as a matter of law, but also the most equitable outcome, as it would require the Parties to bear their own appellate costs,” according to the labels.
Alternatively, each side should bear its own costs, remand determination aside, or the district court should iron out the specifics, they said in different words. A key hang-up can be found in “disputed bond costs” on the above-noted $46.8 million verdict; “Grande has represented to counsel that it has incurred roughly $4 million in bond premium costs,” but the plaintiffs “dispute the reasonableness” of the figure.
Time will tell which argument resonates with the Fifth Circuit, but the disagreement is a good reminder of Cox v. Sony’s sweeping impact on copyright complaints against ISPs as well as a variety of others.
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