RCN Urges Judge to Toss the Major Labels’ ‘Last’ Piracy Liability Lawsuit

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Internet service provider RCN has asked a New Jersey federal court to reconsider a six-year-old ruling and dismiss the major record labels' piracy liability lawsuit. RCN argues that the Supreme Court's decision in Cox v. Sony wiped out the legal basis for the claims. With "repeat infringer" cases against other ISPs already dropped, RCN says it is the last major label lawsuit of its kind still alive.

For years, the major record labels and movie studios waged a campaign to hold US internet providers responsible for pirating subscribers.

Alleging contributory and vicarious infringement, rightsholders argued that ISPs which failed to disconnect repeat infringers should pay for the consequences.

This theory fell apart in March, when the Supreme Court reversed a billion-dollar verdict against Cox Communications. The court held that an Internet provider is not liable for contributory infringement simply because it keeps serving subscribers it knows have been flagged for piracy.

RCN now wants the New Jersey federal court to apply this precedent and end a case that has been running since 2019.

No Inducement, No Claim

In a motion for reconsideration filed yesterday, RCN argues that Supreme Court’s Cox ruling destroyed the legal foundation of the labels’ amended complaint.

An ISP is no longer contributorily liable simply for selling internet access while knowing that some subscribers will use it to infringe. Failing to cut the connections of those subscribers off does not establish intent either.

After Cox, liability now requires proof that the provider actively encouraged infringement through specific acts, or that its service has no substantial non-infringing uses. Neither applies here, RCN argues, noting that the case is “virtually identical” to the Cox lawsuit.

Virtually identical

The labels’ second claim, vicarious infringement, should also be dismissed according to RCN, as it requires proof the ISP profited directly from the piracy itself. The Fourth Circuit ruled in Cox that monthly subscription fees do not count, and the Supreme Court declined to hear the labels’ appeal on that point.

RCN argues that subscribers pay the same price whether they pirate music or browse social media, so the fees are not a “direct financial benefit” from infringement.

The ‘Last’ Case Standing

RCN stresses that the other repeat infringer cases against ISPs have already been dismissed.

“[I]n the wake of Cox, the Labels and other rightsholders dismissed every other secondary copyright infringement case against an ISP—including the movie industry’s virtually identical lawsuit against RCN. The same should have happened here,” they write.

As reported earlier, the labels dropped their cases against Verizon and Altice within weeks of the Cox ruling. The film companies behind titles including The Hitman’s Wife’s Bodyguard dismissed a near-identical lawsuit against RCN with prejudice, and a parallel case against WideOpenWest ended a month later.

The precedent reached RCN’s sister ISP Grande Communications too. Both providers now operate under the Astound Broadband brand. Formally, the labels’ case against Grande is not over yet, however, as Grande still prefers to have a formal win on the books.

By RCN’s account, every other secondary infringement case against a US internet provider is now over, with its own case being the exception.

A Four-Year Standoff

So why is this lawsuit still pending in court after seven years?

According to RCN, the labels never meant to go to trial. The company argues that the case was filed in 2019 as leverage in settlement talks with Grande. After that, it remained pending due to a dispute over internal DMCA records.

In May 2022, Magistrate Judge Tonianne J. Bongiovanni stayed all fact depositions until document discovery was resolved. The stay has not lifted since, despite at least 20 discovery letter briefs. RCN believes the labels are holding on for a reason.

“Instead, it seems that the Labels view the ongoing privilege dispute as a form of leverage. In other words, the Labels seem to believe that RCN might be willing to pay money to avoid a resolution of that issue,” RCN tells the court.

The labels have yet to respond to the motion. RCN asks the court to vacate its 2020 order, dismiss the amended complaint with prejudice, and has requested oral argument.

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A copy of RCN’s motion for reconsideration and supporting memorandum, filed at the U.S. District Court for the District of New Jersey, are available here (pdf) and here (pdf).