Voltage Pictures, which previously engaged in a lengthy court battle to require Canadian ISPs to disclose the names of alleged file sharers, has adopted a new legal strategy. This week, the company filed an unusual application in federal court, seeking certification of a reverse class action against an unknown number of alleged uploaders of five movies using BitTorrent (The Cobbler, Pay the Ghost, Good Kill, Fathers and Daughters, and American Heist). The use of reverse class actions is very rare in Canada (only a few have been reported). There were attempts to use the mechanism in copyright claims in the U.S. several years ago without success.
The Voltage filing seeks certification of the class, a declaration that each member of the class has infringed its copyright, an injunction stopping further infringement, damages, and costs of the legal proceedings. Voltage names as its representative respondent John Doe (linked to a Rogers IP address). It admits that it does not know the names or identifies of any members of its proposed class, but seeks to group anyone in Canada who infringed the copyright on one of the five movies. Voltage does not say how many people it has identified as infringing its copyright. It urges the court to issue an order to stop the infringement and to assess damages to be paid by each person.
The case raises many questions, most notably whether a reverse class action can be used an effective technique to target copyright infringement. Class actions typically involve a representative plaintiff who represents many others who have suffered the same harms from the actions of the defendant. Reverse class actions feature a single plaintiff (Voltage) and multiple defendants (the alleged file sharers). The most comprehensive examination of reverse class actions in Canada I could find comes from Ian Leach, who notes that while the strategy has rarely been used, there have been a few such cases in Ontario (the federal court rules have similar provisions).
There are several barriers to starting a reverse class action. In 2013, an Oregon court dismissed a similar Voltage lawsuit, concluding that the company “was unfairly using the court’s subpoena power in a “reverse class-action suit” to save on legal expenses and possibly to intimidate defendants into paying thousands of dollars for viewing a movie that can be bought or rented for less than $10.” Another reverse class action was tossed in U.S. federal court in Illinois in 2011, with the judge expressing concern that the case was little more than a “fishing expedition.” A New York Law School Review note comprehensively canvasses the issue from a U.S. perspective, arguing that the cases cannot be certified under U.S. law and that they raise significant issues of fairness.
One of the biggest concerns involves questions of representation for the defendant class. Before certification, the court will want assurance that the interests of the defendants will be fairly represented. But who will represent those interests? Who will pay for the legal counsel? Unlike a plaintiff-led class action, where lawyers are often willing to invest in the case, there is no payoff at the end of this case and finding someone to represent the class will be a challenge when the only named representative is John Doe #1. If the representation issue is addressed, there will be additional concerns related to commonality (there may be a common copyright claim, but the defences may differ) and identification of the scope of the class, which appears to be indefinite.
Beyond the certification challenges, one of the primary barriers to reverse class actions is that defendants have the option of opting out of the class. This suggests that even if certified, any and all defendants will have the right to opt-out. In other words, after going through the process of trying to meet the requirements for class proceedings, all the defendants will be permitted to simply walk away.
Opting-out will pose its own sets of challenges as defendants will presumably want to have their anonymity safeguarded if they choose to opt-out. Voltage may be counting on the possibility of self-identification as a deterrence against opting out, but the court could establish a mechanism to allow for full exercise of the right to opt-out without being forced to disclose personal identity. The privacy issue related to the identification of the individuals is a separate matter that has its own process under Canadian law.
Class action experts may be able to shed more light on the issues related to a reverse class action, but at first glance this Voltage lawsuit is a puzzling strategy that should face stiff opposition from courts concerned with procedural fairness and appropriate representation of the interests of all class members.