Strike 3 Lawsuits
Many litigants file a small number of lawsuits, each seeking a large amount of money. This is because lawsuits are expensive to litigate. But some litigants launch a large number of similar lawsuits, often seeking smaller amounts of money. At least one law review article has called these serial litigants “trolls” because they do not actually intend to litigate their cases. They intend to procure settlements because they know that it will be more expensive for defendants to settle than to fight. One serial litigant is a company called Strike 3 Holdings.
Why should you read this post about Strike 3 Litigation?
Strike 3 sued you and you want to find some basic information about its lawsuits.
You find litigation concerning pornography to be stimulating, even though the actual issues are pretty dry legal matters.
You want to become a serial litigant yourself and want to learn from the experience of others.
Image credit: https://en.wikipedia.org/wiki/Pornography#/media/File:Peep_Show_by_David_Shankbone.jpg
What is Strike 3 and What Does It Do?
Strike 3 Holdings is a company that possesses copyrights to pornographic films. It uses a third-party vendor to detect when people illegally download the films to which it has a copyright. When the vendor tells it that someone downloaded its films, it sues the internet service providers to demand that they reveal the identity of the person who uses the IP address used to download the films. Once it learns the user’s identity, it sues the person, pursuant to the Digital Millennium Copyright Act, seeking money for the illegal theft of its property. Pursuant to that law, it may seek $25,000 for each illegal download.
In my review of Strike 3 lawsuits, I have seen none proceed to trial. The vast majority that I see settle, which means that Strike 3’s business appears to me to be twofold: First, getting random people to send it money to settle its lawsuits. And second, generally discouraging people from illegally downloading its films.
How The Lawsuits Generally Work
The first step in the lawsuit involves Strike 3’s investigation to learn who is downloading its films. Its third party vendor may tell it the IP addresses used to download its films, but Strike 3 can’t sue an IP address, it needs a flesh and blood person (or, failing that, a business entity) to sue. To find one, it usually goes to court to get permission to serve a subpoena on the internet service provider associated with the IP address. The court may require the internet service provider to notify the user that his or her identity is about to be revealed and provide it an opportunity to oppose the application.
Once the application is granted, Strike 3 then learns who the user is and starts a new lawsuit to sue them. This involves filing a complaint and serving a summons. Many courts allow the defendants in these cases to proceed under a pseudonym and not use their real names because the subject matter of the cases are embarrassing. At this point, many litigants negotiate a settlement, prompting Strike 3 to drop the lawsuit. Some move to dismiss and, if they lose, take discovery and move for summary judgment. I could not find any examples of a Strike 3 case proceeding to trial.
Strike 3 does not usually file these lawsuits one at a time; it may file dozens at once. And it does so repeatedly throughout the year in multiple different courts.
Lessons From These Lawsuits
It’s a scary thing to get sued! And it’s even scarier to get sued for something that many people find mortifying. But these lawsuits settle and, from what I can tell, people move on with their lives. So my first lesson is that these lawsuits are not the end of the world. And while complaints often demand very large sums of money, litigants often settle for far less than they initially demand.
Second, defendants can win these lawsuits. One did it in Washington State and the federal appeals court affirmed his victory. And a law professor and an attorney wrote an article proposing a strategy for defending against such a case.
Third, Strike 3 does pretty well in many of these cases. In one prominent case, it lost at the trial court but then an appeals court reinstated the case. As a result, settling may be a good idea to avoid a substantial risk that court challenges are unsuccessful.