Andersen v. Atlantic Recording Corporation, et al.

Court grants in part and denies in part defendant record companies’ motion for leave to file a motion for summary judgment in plaintiff’s action against record companies for, inter alia, abuse of legal process and negligence, relating to record companies’ alleged conduct after they filed a copyright infringement action against plaintiff.

Several record companies filed a copyright infringement action against Tanya Andersen (Andersen I). Andersen filed counterclaims for (1) electronic trespass; (2) computer fraud and abuse; (3) invasion of privacy; (4) abuse of legal process; (5) fraud and negligent misrepresentation; (6) outrage; (7) deceptive business practices; and (8) violations of Oregon’s Racketeer Influenced and Corrupt Organizations Act (ORICO). While that action was pending, Andersen filed a separate action (Andersen II) against the record companies as well as MediaSentry and Settlement Support Center (SSC) for (1) negligence; (2) fraud and negligent misrepresentation; (3) violations of ORICO; (4) violations of the federal Racketeering Influenced Corrupt Organization Act (RICO); (5) abuse of legal process; (6) malicious prosecution; (7) outrage and intentional infliction of emotional distress; (8) violation of the Computer Fraud and Abuse Act; (9) trespass to chattels; (10) invasion of privacy; (11) libel and slander; (12) deceptive business practices; and (13) misuse of copyright laws based on the same facts as her counterclaims in Andersen I. A month later, Andersen filed an amended complaint in Andersen II as a class action. After the court granted the record companies’ motion to dismiss the claims in Andersen II several times with leave for Andersen to amend her complaint, and after Andersen amended her complaint several times, the court in this ruling denied Andersen’s opposition to dismissal of the defendants MediaSentry and SSC and dismissed the claims against these defendants with prejudice, and denied Andersen’s motion for leave to file an amended motion for class certification. The court also granted in part and denied in part the defendant record companies’ motion for leave to file a motion for summary judgment as to Andersen’s remaining claims of abuse of legal process (relating to the defendants’ alleged conduct after filing Andersen I) and negligence.

Regarding the claim for abuse of legal process, the court stated that Andersen, in her Fourth Amended Complaint, alleged that the record company defendants continued with Andersen I not for purposes of protecting or vindicating the copyrights purportedly at issue, but instead for the primary unlawful purpose of intimidating Andersen and the general public in order to maintain and preserve as long as possible their monopolistic control over the world’s market for the distribution of sound recordings. According to the court, the record companies contended that Andersen cannot adduce any facts “beyond unsupported accusations” to establish the elements of her claim for abuse of legal process. The record company defendants alleged, among other things, that there is “no objective proof” in the record to establish that they should have pursued another internet user known as “Gotenkito” for the alleged illegal downloading because the record reflects Verizon provided the defendants with three separate confirmations that the Internet address in question belonged to Andersen.

The court held that Andersen likely pled and adduced sufficient evidence to establish a genuine issue of material fact exists as to her contentions that (1) Gotenkito might have been the person who actually downloaded the copyrighted materials, and, therefore, the record company defendants should have investigated the individual with that username on MySpace, and (2) the record company defendants did not do so in order to secure an unjustified settlement from Andersen. The court stated “it would be futile for Record Company Defendants to be granted leave to file a motion for summary judgment as to this claim. Accordingly, in the exercise of its discretion and inherent power to manage its docket, the Court declines to allow Record Company Defendants to file summary judgment as to Andersen’s claim for abuse of legal process.”

The court granted the defendants’ motion for leave to file a motion for summary judgment regarding Andersen’s negligence claim. According to the court, Andersen claimed that the record company defendants were negligent when they (1) “prosecut[ed] baseless sham litigation against Plaintiff” and (2) failed to “properly investigate the true identity of ‘Gotenkito’ after his true identity was known to them.” The record company defendants argued that Andersen’s emotional harm is not compensable under Oregon law and that Andersen did not establish that the record company defendants owed her a special duty of care as required by Oregon negligence law. The court agreed with the defendants, holding that emotional harm for negligence is not compensable under Oregon law and that Andersen failed to establish a special relationship existed between her and the defendants that created a heightened duty of care on the part of the defendants and liability for Andersen’s economic losses.