Jennifer Barker picked up her telephone in May 2012 to find, on the other end of the line, a woman who said her name was Stephanie Hansen. Hansen was calling to settle a lawsuit against Barker—all over the illicit downloading of pornography via BitTorrent back in December 2011.

Barker had heard nothing about any lawsuit; indeed, she said that she had never downloaded pornography from the 'Net and had no idea what this "BitTorrent" even was. Hansen nevertheless wanted a payment; if none was forthcoming, Barker might well find herself facing up to $150,000 in damages under US copyright law. And her name might be publicly linked with pornography.

Barker refused to pay, so Hansen called back, allegedly leaving multiple voicemails and even calling Barker at work. Barker, fed up, believed she was being extorted. She went out and found a local Kentucky lawyer, Kenneth Henry of Louisville, and together they devised a legal strategy to fight back.

Yesterday, Henry filed a federal lawsuit on Barker's behalf in Louisville, targeting five pornographers who seek to "extort money from individuals they claim have downloaded pornography from the Internet." The suit further seeks class action status on behalf of "individuals throughout the United States who have been subjected to the unlawful extortion attempts of the Defendants herein." Henry estimates that this class exceeds 200,000 people.

Systematic "trolling"

Henry lays out for the judge how the current round of file-sharing lawsuits proceeds:

The pornography purveyors utilize a technique known as trolling whereby individuals hired by the various pornography purveyors search for Internet protocol (IP) addresses associated with the use of file sharing software such as BitTorrent. Once the IP addresses have been harvested, the various pornography purveyors file suit naming defendants as John Doe. They then seek to have mass subpoenas issued for the Internet providers associated with the harvested IP addresses in order to obtain the name and address of the owner of the IP address on the date it was harvested. Recently, the pornography purveyors have begun using the court system of the state of Florida to file true bill of discovery lawsuits in which they seek only to extract the names and addresses of the individuals associated with the various IP addresses. Once they obtain contact information, the pornography purveyors begin to shakedown these individuals by telephone. The tactics of the pornography purveyors clearly indicate that they are not convinced that the individuals they accuse of downloading pornography from the Internet have actually done so. This is true because they often shake the individuals down for $1,000-$5,000. The pornography purveyors know that this amount of money is less than the cost of defense would be if suit were filed. They also know that individuals such as the Plaintiff in this matter are embarrassed to have their names associated with pornography, and therefore, are susceptible to being shaken down... In effect, the pornography purveyors have developed a new business model using the court system to extort money from individuals who are merely identified by IP address and with no proof whatsoever that they downloaded copyrighted materials from the Internet.

And, in what has become an increasingly common proceeding in Internet cases, Henry makes quite a bit of the fact that an IP address does not identify individuals, but machines.

Often these targets of the pornography industry have had their IP address "spoofed," a process whereby an IP address is forged and made to appear to be an IP address other than the actual IP address of the person using the Internet. Others have been the victims of a compromised home network that has been used by others unbeknownst to the owner of the network. Furthermore, even if the IP address has been correctly identified, the mere fact of ownership of the IP address does not in any way indicate that the owner participated in an unlawful download of copyrighted material.

It's a pretty decent overview of the process we've seen for the last two years, but the key question is whether any of it is actually "fraud" or "extortion"?

"That can't be unlawful"

To see how this will likely play out, consider the case of Uwe Boll, the German filmmaker behind the film Far Cry. Boll hired the US Copyright Group (really a group of Virginia attorneys) to sue downloaders of his film. One of the eventual targets of this process, Dmitrity Shirokov, in 2010 sued the US Copyright Group and Boll's company for racketeering, fraud, and unjust enrichment over their attempt to get him to pay up. Shirokov, like Barker, has sought class action status for his case.

Eighteen months into the litigation, the two sides are still arguing hard, and nothing like a trial is in sight. (A judge recently allowed several of the fraud charges to remain, but threw out several others). At a status hearing a few months back, the two sides made the same basic arguments we're likely to hear in Barker's case.

A lawyer representing US Copyright Group made clear that the lawyers concede no wrongdoing at all. Indeed, Shirokov never suffered any harm, since he never paid them any money nor had any lawsuit filed against him. He should, said the lawyer, have no standing to sue just because he got a letter he didn't like:

The big picture here is that the plaintiff [Shirokov] got the settlement demand letter. It was sent to him by my clients, who are attorneys acting on behalf of their client. He didn't settle the case. He didn't pay an attorney to defend the case. In fact, he was never served with process in the case. He was never brought into court. And essentially he's saying that because I got a demand letter that I didn't think stated a valid claim against me, I get to sue the attorneys and their clients for fraud, extortion, RICO violations, money hadn't received, unjust enrichment. Just a myriad of claims.

But Jason Sweet, representing Shirokov, contended that his client had been harmed simply by getting such a letter and by seeking legal advice about it. That costs money. Besides, the entire litigation scheme, said Sweet, was designed to go after people while making it hard for them to mount a defense:

This case is not about getting justice. This case is not about going into open court to seek a hearing for your claims. In this case, they did everything they could to prevent that. They kept forestalling serving any defendants so they could further the time to collect payments. They have abandoned claims, effectively, against almost the entire class... They aren't going after people, and, in fact, in the handful of cases that they have gone after people one on one, they can't get a settlement and they can't get a default judgment. They simply sit on the case and do nothing. And so in case after case, cases filed early last year, there's been no action after the defendants answered a complaint. So they're not moving forward. The business model they've got is to avoid moving forward.

But the lawyers and filmmakers behind these cases insist that there's nothing nefarious about what they're doing; even if particular demand letters are incorrect, there's nothing generally improper with sending them. Such letters are staples of the legal profession; what would lawyers do without them? As for not bringing every single "Doe" case they file to trial, they note that it is generally preferable to come to a settlement than to file a lawsuit. As one lawyer for the defendants put it:

[Plaintiffs] weave all sorts of nefarious facts in and suggest that there's no intent to move forward with the litigation, and so on and so forth, but the litigation is often used simply as a tool to negotiate a reasonable settlement. That can't, in and of itself, be unlawful. The precedent that we could set there could be equally confusing, I suppose, because once you file a lawsuit, you're then obligated to take it to trial? And do you face the possibility of a counterclaim saying well, this is just a scheme. This is what you guys do. This is a—you know, lots of companies have to sue a lot for debt collection, any number of things. This kind of theory really would not fly in the ordinary practice of law.

The lawyers have a hard time seeing why receiving letters that demand you pay money or risk a major federal lawsuit should cause such commotion; after all, as Boll's lawyer put it, "A demand of $1,500 is certainly not unreasonable. So the letter itself, compared to demand letters that I get every day, appears to me to be, frankly, benign."

But the real innovation in this entire business model has been the way it threatened to drag so many non-lawyers into federal court, potentially facing astronomical statutory damages. The letters aren't going to lawyers; they aren't going to companies with lawyers; they're going by the tens of thousands to ordinary people, many of whom are baffled and angry by the demands being made. For those people, a choice to pay $1,500 to some voice on the end of a telephone call or to pay $1,500 for legal advice instead isn't "benign" at all.