Digital Music Antitrust Lawsuit Plaintiffs Must Provide Illegal Download Info

On Monday, a New York federal judge ordered the proposed Class representatives in a digital download antitrust class action lawsuit against Sony BMG Music Entertainment, Universal Music Group and other music distributers to provide evidence related to their own unauthorized downloads of digital music.

“At the very least, illegal downloading may be relevant to defenses under the laws of several states as well as potential offsetting of damages,” U.S. District Judge Loretta A. Preska wrote in her August 11 order. “Accordingly, the remaining proposed class representatives shall make productions of illegal downloading evidence as previously ordered.”

Judge Preska is overseeing the multidistrict litigation In re: Digital Music Antitrust Litigation, which accuses a number of music companies of conspiring to inflate the prices of digital music downloads for more than a decade. The digital music download class action lawsuit alleges the companies’ anticompetitive actions have allowed them to drastically inflate the price of compact discs, effectively discouraging consumers from purchasing them.

Judge Preska’s order was issued in response to the defendants’ letter requesting the disclosure of any unauthorized downloads by the proposed Class representatives. The defendants argued that this disclosure was important to litigating the class action lawsuit under the “unclean hands” doctrine, which can provide a legal defense to unjust enrichment claims if a party is found to have acted in bad faith. The defendants argue that any illegal downloading on the part of the Class representatives could potentially offset damages.

“Applying that principle here means that Plaintiffs’ damages should be offset by the amounts they would have paid for songs they illegally downloaded purportedly because such music was too expensive,” Sony’s attorneys argued.

In ordering the plaintiffs to disclose information about unauthorized music downloads, the judge rejected the plaintiffs’ argument that the “unclean hands” defense should be stricken because they were not seeking Class certification on their unjust enrichment claim. The plaintiffs had also argued that the doctrine is not a defense to antitrust cases and should not be applied to the digital music download class action lawsuit.

Judge Preska’s order was handed down five months after the plaintiffs sought certification of the digital music download class action lawsuit. “To the extent that Defendants feel the need to depose any of the remaining proposed class representatives on this issue, Defendants’ counsel shall confer with Plaintiffs’ counsel and report any disagreement to Court,” the judge wrote.

The plaintiffs are represented by Craig Essenmacher and Merrick S. Rayle of Lovell Stewart Helebian Jacobson LLP and Alexandra S. Bernay of Robbins Geller Rudman & Dowd LLP.

The Sony, UMG Digital Music Download Class Action Lawsuit is In re: Digital Music Antitrust Litigation, 1:06-md-01780-LAP, in the U.S. District Court for the Southern District of New York.