Court of Appeals of Illinois, Fifth District, Fifth Division
As Corrected May 23, 2014.
[Copyrighted Material Omitted]
Appeal from the Circuit Court of St. Clair County. No. 12-MR-417. Honorable Andrew J. Gleeson, Judge, presiding.
In an action arising from petitioner's attempt to obtain the identities of subscribers to respondent's Internet services who allegedly used those services to gain unauthorized access to petitioner's protected computer system, which distributed adult entertainment to fee-paying members of the system, the trial court erred in granting petitioner's request, pursuant to Supreme Court Rule 224, for discovery before filing suit, since the petition failed to allege sufficient facts to support a cause of action against the persons the petition sought to identify, and, further, the trial court erred in denying the petition of the " John Doe" subscribers, who were identified only by an Internet Protocol address, seeking a rule to show cause and sanctions against petitioner, especially when the underlying question in the matter was whether petitioner intended to state a cause of action against the subscribers or was actually seeking to harass or extort the subscribers without forming a reasonable basis for believing that they were culpable parties; therefore, the trial court was directed on remand to dismiss the petition for discovery before suit and to conduct an evidentiary hearing on the petition for a rule to show cause.
For Appellants: Thomas V. Leverso, Law Offices of Thomas V. Leverso, South Barrington, IL; Laura K. Beasley, Joley, Nussbaumer, Oliver & Beasley, P.C., Belleville, IL; Erin K. Russell, The Russell Firm, Chicago, IL.
For Appellee: Paul A. Duffy, Duffy Law Group/Prenda Law, Chicago, IL; Andrew G. Toennies, Lashly & Baer, P.C., St. Louis, MO.
JUSTICE SPOMER delivered the judgment of the court, with opinion. Presiding Justice Welch and Justice Chapman concurred in the judgment and opinion.
Stephen L. Spomer Judge.
[¶1] The movants, 20 " John Does" (the Doe appellants) who are identified by an Internet Protocol address (IP address), appeal the February 21, 2013, order of the circuit court of St. Clair County, which: (1) granted the motion of the petitioner, Guava LLC (Guava), to strike the Doe appellants' petition for rule to show cause and notice requiring the attendance of certain representatives of Guava at a hearing on the petition pursuant to Illinois Supreme Court Rule 237(b) (eff. July 1, 2005); and (2) denied the Doe appellants' objection to the disclosure of their personal information by the respondent, Comcast Cable Communications, LLC (Comcast), as required by the circuit court in its December 12, 2012, order granting Guava's petition for discovery before suit to identify responsible persons (petition for discovery before suit) pursuant to Illinois Supreme Court Rule 224 (eff. May 30, 2008). In addition, the Doe appellants appeal the February 22, 2013, order of the circuit court of St. Clair County, which gave Comcast seven days to disclose the Doe appellants' personal information to Guava.
[¶2] The Doe appellants make the following arguments for reversal of the circuit court's orders: (1) that the circuit court lacked both subject matter and personal jurisdiction over the claims and parties, (2) that Guava's petition for discovery before suit failed to state facts that would entitle it to discovery of the Doe appellants' identities pursuant to Rule 224, and (3) that the Doe appellants' petition for a rule to show cause should have proceeded to an evidentiary hearing requiring the presence of the representatives of Guava listed in the Doe appellants' Rule 237(b) notice.
[¶3] Guava did not file a timely appellee's brief with this court, and on January 10, 2014, this court denied Guava's motion to file its brief instanter. On February 18, 2014, the Doe appellants filed a motion for attorney fees in this court, arguing that this court should award attorney fees to the Doe appellants based on Guava's vexatious, frivolous, and dilatory conduct in this case, pursuant to Illinois Supreme Court Rules 137 (eff. Jan. 4, 2013), 375 (eff. Feb. 1, 1994), and 366(a)(3)-(5) (eff. Feb. 1, 1994). This court entered an order taking the motion for attorney fees with the case. On April 3, 2014, Guava filed a motion to strike the Doe appellants' motion for attorney fees and to dismiss the appeal, stating that it never received the motion for attorney fees. In response, the Doe appellants filed signed certified mail return receipts indicating Guava counsel's did receive the
motion. We hereby deny Guava's motion to strike and to dismiss the appeal.
[¶4] After considering the Doe appellants' appeal and motion for attorney fees on their merits, pursuant to the guidance of the Illinois Supreme Court in First Capitol Mortgage Corp. v. Talandis Construction Corp., 63 Ill.2d 128, 131-32, 345 N.E.2d 493 (1976), we reverse the orders of the circuit court and remand with directions that the circuit court dismiss Guava's petition for discovery before suit, proceed to an evidentiary hearing on the Doe appellants' petition for a rule to show cause, and compel the attendance of the persons named in the Doe appellants' Rule 237 notice to appear. Because we find that the circuit court is the proper arbiter of the Doe appellants' allegations of frivolous pleading, fraud, identity theft, and extortion, we deny the Doe appellants' motion for attorney fees pursuant to Illinois Supreme Court Rules 137, 375, and 366(a)(3)-(5). However, we note that because the Doe appellants are the prevailing party in this appeal, they may petition for their costs on appeal pursuant to Illinois Supreme Court Rule 374 (eff. Feb. 1, 1994). In addition, attorney fees on appeal can be sought in the circuit court after the hearing on the petition for a rule to show cause.
[¶6] 1. The Petition for Discovery Before Suit
[¶7] On November 20, 2012, Guava filed a petition for discovery before suit pursuant to Illinois Supreme Court Rule 224 (eff. May 30, 2008), naming Comcast as a respondent. According to the petition for discovery before suit, Guava is " a limited liability company that operates protected computer systems, including computer systems accessible in St. Clair County," and these computer systems distribute third-party adult entertainment content and generate revenue by requiring third parties to pay a fee for accessing their distribution systems. Members are assigned a username and password in order to access the distribution system. The petition for discovery before suit alleged that Comcast is an Internet Service Provider (ISP) that provides Internet services to certain subscribers (the Does), whom the petition seeks to identify " so that [Guava] may file an action for computer fraud and abuse and computer tampering against them." With regard to venue, the petition for discovery before suit alleged that venue is proper " because at least one of the Doe [d]efendants resides in St. Clair County" and because " Comcast transacts business in St. Clair County."
[¶8] Attached to the petition for discovery before suit as " Exhibit A" is a list of approximately 300 IP addresses, which the petition defines as " a unique number that is assigned to Internet users by an ISP at a given date and time." According to the petition for discovery before suit, these IP addresses were identified by Guava via computer security software to be associated with individuals who used stolen usernames and passwords to gain unauthorized access to Guava's protected computer systems. Once the IP addresses were ascertained, Guava used a publicly available reverse-lookup database on the Internet to determine that Comcast was the ISP that issued the 300 IP addresses set forth in " Exhibit A." The petition for discovery before suit requested an order requiring Comcast to disclose personal identifying information of all of the Comcast subscribers associated with these 300 IP addresses. In the petition, Guava states that the alleged facts support a claim against the Does under the federal Computer Fraud and Abuse Act (18 U.S.C. § 1030(g) (2012)), as well as a claim under section 16D-3(c)
of the Illinois Computer Crime Prevention Law (720 ILCS 5/16D-3(c) (West 2010) (now 720 ILCS 5/17-51(c) (West 2012))).
[¶9] 2. The Verification
[¶10] Guava attached a verification to the petition for discovery before suit, pursuant to section 1-109 of the Illinois Code of Civil Procedure (735 ILCS 5/1-109 (West 2012)). The signature line of the verification stated that the verification was signed by an " Alan Mony-Declarant." The notary stamp stated that the verification was subscribed and sworn to on November 20, 2012, the date the petition was filed, before Joshua James Marschall, a notary public in the state of Minnesota whose commission was to expire on January 31, 2013. There were no markings on the verification to indicate it had been faxed, and the font was different than that of the petition. The relationship of " Alan Mony-Declarant" to Guava was not stated in the petition or in the verification.
[¶11] 3. Comcast's Motion to Dismiss
[¶12] On December 10, 2012, Comcast filed a motion to dismiss, stating that Guava sought to discover the identities of persons who did not reside in St. Clair County. Accordingly, Comcast argued that the circuit court would not have personal jurisdiction over the individuals, nor would the circuit court be a proper venue for an action against them. In support of its argument, Comcast attached a printout showing the customer cities and counties for the IP addresses listed in the petition for discovery before suit. The printout shows that the IP addresses were associated with counties such as Will, Cook, Du Page, Winnebago, McHenry, Lake, Sangamon, Macon, McLean, and De Kalb. Comcast further argued that even if one or more of the individuals could be connected to St. Clair County, joinder in one suit in St. Clair County would be impermissible under Illinois law, such that discovery of all of them in one petition for discovery before suit would be improper. However, Comcast did not argue that it was not a resident of St. Clair County or that it does not transact business there.
[¶13] The motion to dismiss also noted that Guava did not plead that it is incorporated in Illinois, does any business in Illinois, or is a registered foreign corporation entitled to bring claims and lawsuits in Illinois courts. Accordingly, Comcast argued that Guava did not have standing to bring this action for discovery before suit. In addition to its objections to Guava's standing to sue in Illinois, personal jurisdiction, and venue, Comcast argued that the petition for discovery should be dismissed because the petition fails to state causes of action that could be brought against any defendant Guava seeks to identify.
[¶14] Comcast's motion to dismiss outlined Guava and its counsel's history of filing similar lawsuits throughout the country, seeking the issuance of subpoenas to ISPs requesting that they identify subscribers or customers to whom certain IP addresses were assigned at the time of the alleged hacking activity. Comcast quoted a judge from the federal court for the Central District of California, who explained, in an unpublished order, the litigation tactics that have been used in such suits take the form of actions for copyright infringement in the federal courts. MCGIP, LLC v. Does 1-149, 2011 WL 4352110 (N.D. Cal. Sept. 16, 2011). According
to the California court, in these cases, a plaintiff sues anywhere from a few to thousands of Doe defendants for copyright infringement in one action and seeks leave to take early discovery.
[WL] at *4 n.5. Once the plaintiff obtains the identities of the IP subscribers through early discovery, it serves the subscribers with a settlement demand. Id. The subscribers, often embarrassed about the prospect of being named in a suit involving pornographic movies, settle. Id. Comcast argued that Guava did not intend to institute an action against the Does, and thus, instituted this action for an improper purpose.
[¶15] 4. The Circuit Court's Initial Order
[¶16] On December 12, 2012, the circuit court entered an order denying Comcast's motion to dismiss and granting Guava's petition for discovery before suit. The order did not address Comcast's arguments regarding personal jurisdiction, venue, standing, or the insufficiency of the causes of actions that Guava claimed to have against the Does. The order required Comcast to provide all of the Does with copies of the petition and order by December 26, 2012. Any Doe seeking to file an objection or a motion to quash, dismiss, or sever was required by the order to do so by filing such a pleading with the clerk of the circuit court by January 25, 2013. Except as to those subscribers who filed such a pleading by that date, Comcast was ordered to provide Guava, by January 30, 2013, with the name, address, phone number, email address, and Media Access Control (MAC) address for each of the Does to whom Comcast assigned an IP address as set forth in Exhibit A of the petition. Comcast was ordered to withhold the identifying information for any objecting Doe, pending resolution by the circuit court of the objections. All objections were set for hearing on February 13, 2013.
[¶17] 5. The Doe Objections and Petition for Rule to Show Cause
[¶18] Forty-five Does filed objections to the circuit court's order that their personal information be disclosed to Guava. On January 14, 2013, one of the Does, identified by IP address number 220.127.116.11, filed a " Petition For Rule to Show Cause Why Petitioner Guava, LLC a/k/a Lightspeed Media, Its Officers and Directors, Declarant Alan Moay, Steve Jones, Paul A. Duffy and/or Kevin T. Hoerner Should Not Be Held in Contempt of Court And ...