United States District Court, N.D. Illinois
April 12, 2004.
The opinion of the court was delivered by: PHILIP REINHARD, District Judge
(Reserved for use by the Court)
MEMORANDUM OPINION AND ORDER
Plaintiff, Fatwallet, Inc., filed a four-count complaint against
defendants, Best Buy Enterprises Services, Inc. (Best Buy), Kohl's
Department Stores, Inc., and Target Corporation, seeking declaratory
relief related to the alleged unconstitutionality of certain provisions
of Tile II of the Digital Millenium Copyright Act (DMCA) (17 U.S.C. § 512).
All three defendants have moved to dismiss pursuant to Fed.R. Civ. P.
12(b(1), contending that plaintiff, as an internet service provider
(ISP), has no standing under either Article III of the Constitution or
the Declaratory Judgment Act (28 U.S.C. § 2201). Both sides have
submitted evidentiary materials relevant to the motions to dismiss.
In a constitutional sense, standing involves whether a plaintiff has
made out a case or controversy between himself and the defendant for
purposes of Article III. Discovery House. Inc. y. Consolidated City of
Indianapolis, 319 F.3d 277, 279 (7th Cir. 2003). Put another way, it
involves whether the plaintiff has alleged such a personal stake in the
outcome of the controversy as to warrant its invocation of federal
jurisdiction and to justify exercise of the federal court's remedial
power on its behalf. Discovery House, Inc., 319 F.3d at 279. The purpose
of requiring a plaintiff to present an actual case or controversy such
that it has a personal stake in the outcome is to assure the concrete
adversity which sharpens the presentation of issues necessary for the
proper resolution of constitutional questions. Perry v. Sheahan,
222 F.3d 309, 313 (7th Cir. 2000). To ensure that personal stake, a
plaintiff seeking to invoke federal court jurisdiction must demonstrate:
(1) an injury that is concrete, particularized, and actual or imminent
rather than conjectural or hypothetical; (2) a causal connection between
the injury and the challenged conduct such that the injury may be fairly
traceable to that conduct; and (3) a likelihood that the injury will be
redressed by a favorable decision. Perry, 222 F.3d at 313. The past
exposure to illegal conduct does not in itself show a present case or
controversy regarding injunctive relief if unaccompanied by any
continuing present adverse effects. Perry, 222 F.3d at 313.
In addition to the constitutional limitation on standing, courts also
impose prudential limitations on the class of plaintiffs who may invoke
federal jurisdiction such as the general rule that a plaintiff must
assert his own rights and not those of a third party. Massey v. Helman,
196 F.3d 727, 739 (7th Cir. 1999). There is a rare exception for
third-party standing when the plaintiff can show a significant personal
interest in the outcome of the case to satisfy Article III. Massey, 196
F.3d at 739. When a party seeks standing to advance the constitutional
rights of another, it must show that it has suffered an injury in fact
and that it is the proper proponent of the particular legal right
asserted. Massey, 196 F.3d at 739.
The case or controversy requirement of Article III applies equally to
declaratory judgment actions. Highsmith v. Chrysler Credit Corp.,
18 F.3d 434, 436-37 (7th Cir. 1994). Thus, to demonstrate standing for a
declaratory judgment, the plaintiff must allege he sustained, or is in
immediate danger of sustaining, a direct injury as a result of the
defendant's conduct. Highsmith, 18 F.3d at 437. Further, where a
declaratory judgment plaintiff files a complaint in anticipation of
litigation by the defendant, a case or controversy exists if the threat
of litigation is real and immediate. Norfolk Southern Railway Co. v.
Guthrie, 233 F.3d 532, 534 (7th Cir. 2000).
Keeping these various principles in mind in this case, the issue of
plaintiff's standing revolves around the take-down notice and safe harbor
provisions of the DMCA. Section 512(c)(1)(C) provides immunity from
monetary and injunctive relief to an ISP such as plaintiff if, upon
notification as set forth in section 512(c)(3) (which was undisputedly
given here) the ISP "responds expeditiously to remove, or disable access
to, the material that is claimed to be infringing or to be the subject of
infringing activity." Put simply, if the ISP responds to a take-down
notice by removing the claimed offending material, then it cannot be sued
for copyright infringement related to those postings.
Nothing in the DMCA, on the other hand, creates liability for the ISP
beyond that which already exists under copyright law generally. An ISP
suffers no adverse consequences under the DMCA for its failure to abide
by the notice. It is free to thumb its nose at the notice and it will
suffer no penalty nor increased risk of copyright liability.
Thus, plaintiff was in no worse a position regarding potential
copyright liability for the postings of its subscribers whether it
responded to the notice or not or for that matter even if the DMCA did
not exist at all. In other words, the DMCA only inures to the benefit of
plaintiff and visits no negative consequences upon it.
Because of the unique nature of the DMCA notice provisions and how they
apply to an ISP, plaintiff cannot claim it suffered any injury or harm
from the invocation of the notice provisions by defendant. It was free to
ignore the notice and no harm would befall it that did not already exist
irrespective of the DMCA.
That being said, if in fact an ISP chooses to respond to the notice by
taking down the challenged material, it then triggers the safe harbor
provision and is insulated from potential liability for copyright
infringement. Put another way, the only implication of the notice
provisions of the DMCA is a positive one. Plaintiff has failed to
identify any harm it has suffered as a result of its choosing to respond
to the take-down notice and has therefore not shown it has standing under
Article III or the Declaratory Judgment Act.
As for plaintiff's standing to press any claims on behalf of the
third-party posters themselves, the lack of an actual injury by plaintiff
defeats standing in that regard as well. Additionally, there is nothing
that prevents the posters themselves from bringing a suit to challenge
the DMCA as they are the ones potentially harmed by having there
materials removed pursuant to the notice provisions of the DMCA. While
they may have some interest in maintaining their anonymity, plaintiff has
no standing to prosecute that interest either.
Finally, as to Best Buy, plaintiff also lacks standing related to the
subpoena sent to it as it is undisputed that Best Buy never attempted to
enforce the subpoena. Further, Best Buy has asserted to this court that
it has no intention of doing so. The subpoena in this case lacks
efficacy, and has caused no harm to plaintiff or its subscribers. Even if
Best Buy had sought enforcement of the subpoena (and further assuming it
was even valid, see Fed.R.Civ.P. 45(b)), it is difficult to see the harm
that would befall plaintiff as opposed to its subscribers. Certainly the
subscribers themselves would be in a position to challenge the subpoena.
The subscribers interest in maintaining their anonymity does not invoke
standing to a third-party such as an ISP to challenge the subpoena when
the ISP has not suffered an injury of its own. While another federal
trial court has ruled otherwise, see Recording Industry Association of
America v. Verizon Internet Services, Inc., 275 F. Supp.2d 244, 257-58
(D.D.C. 2003), rev'd on other grounds, 351 F.3d 1229 (D.C. Cir. 2003),
that decision is distinguishable as there the subpoena was served, the
ISP refused to comply, and there was a motion to compel. To the extent
the court held that the ISP had standing to press the claims of the
anonymous posters, this court respectively disagrees.
For the foregoing reasons, the court grants the motions to dismiss of
all defendants and dismisses this cause in its entirety.
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