Monday, May 01, 2017

Blacklock’s Back in Court on May 2, 2017 – How Long will this Litany of Litigation Last?

On Tuesday, May 2, 2017, the Blacklock’s case is back in Court at 9:30 AM in Room 702 at 90 Sparks St. in Ottawa for a case management hearing, where lengthy motion, cross motion and response records and oral submissions will be considered by Prothonotary Tabib. There will likely be a host of counsel representing Blacklock’s and many of the 11 Government of Canada departments and agencies that Blacklock’s has sued. Canadian taxpayers are no doubt going to pay a lot to monitor and participate, even passively, in this “litany of litigation” even while the Attorney General of Canada (“AGC”) takes the lead for the Government. The departments and agencies that have retained counsel other than the AGC are generally using large law firms.

It will be recalled that Blacklock’s badly lost its first test case against Finance Canada in a judgment dated November 10, 2016 that was not appealed. Then, on December 21, 2017 Justice Barnes awarded the Government $65,000 in costs, which was conceivably much less than might have awarded in all the circumstances. Blacklock’s has appealed this award, even though appeals of cost awards are very rarely successful.  In his reasons for the costs award, the learned Judge’ commented that:
[7] …I also reject the Plaintiff's argument that this case raised "strong public interest considerations". Rather, this case was about the Plaintiff's attempt to recover disproportionate damages without any apparent consideration to the legal merits of the claim or to the costs that it imposed on the taxpayers of Canada.
[8] Any reporter with the barest understanding of copyright law could not have reasonably concluded that the Department's limited use of the subject news articles represented a copyright infringement. Indeed, the fair dealing protection afforded by section 29 of the Copyright Act, RSC, 1985, c C-42, is so obviously applicable to the acknowledged facts of this case that the litigation should never have been commenced let alone carried to trial.
(highlight and emphasis added)

This could suggest that future losses by Blacklock’s could result in even higher costs awards against it.

In a nutshell, Blacklock’s wants to go forward with one particular case against the Attorney General of Canada (“AGC”), namely that against Health Canada and one against one of the non-AG Government of Canada agencies, i.e. Bank of Canada, Canadian Transportation Agency of the Library of Parliament. It’s rather unusual for a plaintiff to file and then seek to stay almost all of its own cases – but virtually everything about this litigation has been unusual. Here are Part 1, Part 2 and Part 3 of Blacklock’s Motion Record dated March 21, 2017.

The Government and the other agencies and departments want to ahead with one of the actions on a summary judgment basis because it is said to be indistinguishable on the facts from the previous Finance case, which Blacklock’s lost badly and did not appeal. More interestingly, The Government Respondents want to get a preliminary determination on two threshold questions which potentially affect and, indeed, could effectively bring to an end all the cases, namely:
  •            Whether Blacklock’s even has standing to sue, in light of chain of title and retroactive assignment issues involving the articles alleged to have been infringed
  •       Whether Blacklock’s’ can expect to recover sufficient actual or statutory minimum damages, should it so elect, in an amount sufficient to justify any of this “litany of litigation”.  As I have previously pointed out, there is a limit of $5,000 on statutory minimum damages where the activity is for “non-commercial purposes”. I have also previously mentioned the cautionary tale of Catherine Leuthold, who had hoped to collect $22 million from the CBC, but recovered only $19,200 and was ordered to pay about $80,000 in costs.

Here is the Cross Motion Record of the AGC dated April 4, 2017. Finally, here is Blacklock’s Response to the AGC’s Cross Motion dated April 18, 2018.

An interesting sidebar has begun to emerge prominently from this mass of material and concerns two individuals, namely Nick Fillmore and Mark Taliano. I have previously posted the pleadings in Blacklock’s Ontario Superior Court case against them. See the Statement of Claim against Fillmore and Taliano here  and the Statement of Defence here. The AGC included in its Motion Record dated April 4, 2017 a short Affidavit from Mr. Nick Fillmore (highlight added) in which he explains why he and Mr. Taliano, as individuals, agreed on December 16, 2016 to pay Blacklock’s a total of $21,750 within 60 days. He also noted that they had incurred legal and mediation fees of about $8,000.

This was apparently included and referred to by the AGC to make the point, inter alia, that “The Court has found that Blacklock’s claims disproportionate damages, and that other institutions have settled for business reasons”. The AGC notes  that “a community organization made up of volunteer retirees  was forced to settle because its members could not afford to pay the substantial legal fees required to defend themselves against Blacklock’s” and suggests that that the Court should “strive for proportional procedures that will achieve a just result”.

Interestingly, about a week after the AGC’s motion record was served, Blacklock’s published on April 11, 2017 one of its few unlocked articles entitled $22K Copyright Settlement By Canadian Facebook Bloggers. It begins by stating that:
A bootleg news aggregator has settled a $21,750 copyright claim after republishing articles on a Facebook blog, the largest known settlement of its kind in Canada. The defendants’ lawyer was Professor David Fewer, director of the University of Ottawa’s Canadian Internet Policy & Public Interest Clinic. [CIPPIC]
Blacklock’s Reporter in 2015 sued the blog operators for $20,000 as well as punitive damages and costs for republishing dozens of password-protected articles. In an unusual settlement, the aggregator One Big Campaign paid $21,750, volunteered a public apology and waived all confidentiality of settlement terms.

Actually, as I noted earlier  when first mentioning this particular lawsuit, Mr. Fewer was acting “not in his capacity as Director of CIPPIC, but rather in his personal capacity”. Blacklock’s also labels Mr. Fewer as “a copyright adviser to the Department of Justice”, which I understand not to be the case.  

It’s interesting that Fillmore and Taliano were not represented by CIPPIC itself, and therefore had to pay Mr. Fewer’s legal bill. Mr. Fillmore states in his affidavit that “we feared that, even if we won, our expenses might run as high as $40,000 or $50,000”. This suggests that they were expecting a very much higher legal bill at the end of the day, even if they won. Presumably, if CIPPIC had represented them, they would not have had to pay their own legal costs. CIPPIC’s mission is stated to be:
CIPPIC has a dual mission:
·         to fill voids in public policy debates on technology law issues, ensure balance in policy and law-making processes, and provide legal assistance to under-represented organizations and individuals on matters involving the intersection of law and technology; and
·         to provide a high quality and rewarding clinical legal education experience to students of law.
(highlight added)

Inexplicably, Blacklock’s seems to focus attention in its article on Mr. Fewer, and even includes an enlarged picture of his signature at the top of the article.

Blacklock’s also suggests that Fillmore and Taliano “rejected a $5,000 settlement offer from Blacklock’s”, which is apparently contradicted by Mr. Fillmore’s affidavit – upon which Blacklock’s has chosen not to cross-examine. Indeed, Mr. Filmore swears that he and Mr. Taliano offered to pay $5,000, which Blacklock’s “declined”. Blacklock’s makes a number of other contentious assertions in the article, and fails to note that its assertions have not been tested in Court. In its response dated April 18, 2017, Blacklock’s is attempting to put a lot of additional evidence concerning Messrs. Fillmore and Taliano on the record through an assistant’s affidavit, and, as noted, has chosen not to cross-examine Mr. Fillmore.

Without in any way commenting on the substance of the Fillmore and Taliano settlement, there are some aspects to this situation that would clearly seem to invite interest. In any event, the AGC and Blacklock’s have both pushed this issue into the limelight.

The amount of the settlement, $21,750, is more than the amount sought in the lawsuit, which in the case was $20,000 (forget about the demand for “punitive” damages). We do not necessarily know all that happened in this case. The Ontario Superior Court, unlike the Federal Court, does not provide an online docket, which usually gives some idea of what it happening in a case. I have asked Mr. Fewer to call me about this case, but he has not done so. In any event, he would presumably by constrained to some extent by solicitor-client privilege.

The settlement comes after Blacklock’s resounding loss in the Federal Court on November 10, 2016 and after the appeal period had passed. Not only was there a very favourable and detailed ruling in place from a very experienced Judge. The Government had left a legacy of applicable case law and material on the public record that was available to any other litigants.

Settlements of litigation are usually confidential. However, in this instance, it appears that Fillmore and Taliano felt compelled to not only let Blacklock’s exploit their unhappy result in public but, indeed, to agree to publicly apologize. Their Facebook page now appears to be dead in the water. On December 20, 2016, the Facebook page “Campaign to Build One Big Campaign’ posted an apology and a notice that “This site is now closed”. Ironically, the “unusually trenchant costs award” against Blacklock’s in Federal Court came out the very next day.

I have no idea what the merits or lack thereof of the lawsuit against Fillmore and Taliano may have been and will not speculate because nothing has been proven in Court. Second-guessing in this case about the lawsuit or the settlement could be inappropriate and inaccurate, and I am not doing so.  Messrs. Fillmore and Taliano had experienced counsel. However, it is worth recalling that, if the activity involved was for “non-commercial purposes”, the maximum amount of statutory minimum damages would arguably have been $5,000 – unless Blacklock’s could have somehow proven more in actual damages, which would have been extremely unlikely. Nonetheless, according to Fillmore’s affidavit which has not been cross-examined upon, he and Taliano – for whatever reason – felt “seriously intimidated” and settled for more than four times this amount.

What is interesting about this Fillmore and Taliano sidebar is the apparently disproportionate and defensive attention given to it by Blacklock’s. Perhaps more will become apparent on May 2, 2017.

Overall, this case has elicited much attention. On the one hand, Blacklock’s is arguably attempting overall to build a business model based, in effect, on a legally non-existent ability to control the “right to read” and to make this a test case for the future of journalism, even though Blacklock’s cannot readily be compared to the Globe and Mail, the Toronto Star, the New York Times of The Economist or any other readily apparent established and successful journalism model. Perhaps its closet analog is the Hill Times, which is a very successful Ottawa family owned publication with a much friendlier business model that has operated with great success for almost three decades.  A much-valued feature of its business model includes the ability to buy a single story issue in electronic form for $5.00. This is in sharp contrast to Blacklock’s business model. To the best of my knowledge, the Hill Times has never sued anyone. Indeed, the Hill Times business model seem to depend on quality, value and the very considerable goodwill of its customers, which would seem to be very similar to the same Ottawa government and NGO base that Blacklock’s is so busy suing.

Justice Barnes’ stern words in his costs award should be recalled:
[9]    I am also troubled by Plaintiff’s attempt to claim an excessive amount of damages beginning with its demand for compensation completely divorced from the Department’s limited use of the two articles. In no circumstances would Blacklock’s losses have exceeded the cost of individual subscriptions by the six officials who read the articles; yet Blacklock’s demanded a license fee equivalent to its bulk subscription rate of over $17,000.00.  This practice appears to be consistent with Blacklock’s usual approach which is to hunt down, by Access to Information requests, alleged infringers and then demand compensation based on an unwarranted and self-serving assertion of indiscriminate and wide-spread infringement. The record discloses that in several instances government departments acquiesced for business reasons and paid the full amounts demanded. In this instance the Department appropriately took a hard line and succeeded in its defence.
(highlight added)


PS - May 2, 2017

Case management conference adjourned to May 12, 2017. Court looking for solution on consent in #Blacklock’s unique "litany of litigation".


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