Appeal court revives reverse class-action suit by Voltage Pictures LLC

A federal appeal court judge has revived a proposed reverse class-action suit by movie studio Voltage Pictures LLC looking to sue thousands of alleged Canadian copyright infringers in one go. In a Wednesday decision, Federal Court of Appeal Justice Donald J. Rennie allowed the appeal, setting aside a 2019 decision from the federal court by saying the previous judge was wrong to find that it shouldn’t be certified. The court originally decided another strategy such as the joinder of multiple individual actions would be preferable. However, Rennie found that if the federal court judge’s decision was able to stand, Voltage and others dealing with similar circumstances, “would, in many cases, be without any remedy for violation of their copyright,” and determined the certification motion should go back to the Federal Court for consideration. Voltage and a number of other movie studios had for years been bringing to court IP addresses they claimed were found to have been linked to illegal downloading of their movies for free. Voltage was successful in compelling third-party internet service providers (ISPs) to disclose alleged infringers’ identities, but the studios ultimately sought to bring roughly 55,000 individuals into a class of defendants — known as a reverse class action — to be more conveniently sued, saving time, money and judicial resources. The federal court rejected the studios’ arguments in November 2019 to certify the reverse class action, arguing that the plaintiffs didn’t bring forward the identity of two or more direct infringers. “The novelty of the proposed class action is not, contrary to what the Federal Court held, a reason to deny an application to certify the proceeding,” Rennie wrote in his decision Wednesday. “The proposed class proceeding may ultimately flounder, for reasons which I will identify, but the judge erred in presuming that to be the case at so early a stage. The law must be allowed to evolve.” While Rennie said he understands that the proposed respondents -- which include lead defendant to the Voltage action, by Robert Salna, James Rose and Loridana Cerilli -- have raised concerns over whether or not there are reasons a class action suit would be legally and administratively viable in this case, it was “premature, however, to presume that they would materialize and be fatal to the certification application.” He said decertification would always have remained an option. Salna is a landlord who provided internet access to tenants of his property. He identified tenants Rose and Cerilli and claimed they were the ones infringing on the rules, though they denied it and said they did not know if Salna’s internet connection had been compromised by other users including family members, guests, or internet hackers. The federal court eventually determined Salna was not a suitable representative respondent as it decided not to certify the action. At the same time, the court awarded Salna costs and refused to release $75,000 posted as security for costs by Voltage. In Dec. 2019 the class of defendants filed an appeal against part of the decision by the Federal Court to withhold legal fees they say are owed to them after the movie studio lost its case. Rennie said he found that the court had erred in its refusal to release $75,000 the movie studio put into a court trust before the certification motion was heard. “However, in light of my conclusion that Voltage has succeeded on this appeal, this error is of no consequence. As the certification motion is being returned to the Federal Court, the question of security for costs will follow the outcome of the decision of the Federal Court on that motion.” Rennie therefore, said he would allow the appeal of the costs award and set aside the order. “The question of costs of the certification motion and whether the order for security should be discharged remain in the full discretion of the Federal Court judge assigned to hear the continuation of the proceeding. I would make no order for costs in this court,” he said. -- Reporting by Hannah Daley at hdaley@thewirereport.ca and editing by Jenna Cocullo at jcocullo@thewirereport.ca

Appeal court revives reverse class-action suit by Voltage Pictures LLC

Broadcast | September 9, 2021

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Appeal court revives reverse class-action suit by Voltage Pictures LLC

Broadcast | September 9, 2021

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