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TekSavvy Gets a Shocker from Voltage: Non-Party May Bear Some Costs Associated with Discovery

The decision of Justice Annis in Voltage Pictures LLC v. John Doe and Jane Doe reaffirms that there is no rule that an innocent party must be made whole or fully indemnified if subject to a motion for a ­Norwich-type order. A Norwich Order permits a party to litigation to have discovery of a non-party in order to determine the identity of unknown defendants, but the non-party is normally limited to its costs incurred in the motion and in complying with the order. TekSavvy was a non-party to the litigation in Voltage Pictures and sought costs that it incurred prior to the Norwich order obtained by Voltage.

Briefly, Prothonotary Aalto’s Norwich order issued after a motion brought by Voltage Pictures LLC. Voltage is a film production company that commenced an action against unidentified “Doe” defendants alleging that they had engaged in illegal file sharing of the movie “The Hurt Locker” over the internet. Voltage originally identified 4500 defendants by their IP addresses and approached TekSavvy to obtain the names and addresses of the individuals associated with the IP addresses. TekSavvy asked Voltage to obtain a court order, but otherwise said it would not opposed Voltage’s motion to compel TekSavvy to provide the contact information.

Prior to the motion before Prothonotary Aalto, TekSavvy notified its customers of Voltage’s motion by email and by creating an online portal for subscribers to confirm that they had been notified. After doing so, TekSavvy received a high volume of inquiries which required it to make system upgrades to its network, and caused it to incur additional customer service expenses.

When Voltage’s motion finally proceeded before Prothonotary Aalto, TekSavvy took no position on the motion. Prothonotary Aalto ordered Voltage to pay TekSavvy “all reasonable legal costs, administrative costs and disbursements incurred by TekSavvy” in abiding by his order. The scope of this order was disputed by the parties and referred to Prothonotary Aronovitch who held that the order of Prothonotary Aalto was intended to reimburse TekSavvy for its costs incurred in abiding by the Order, but not for costs incurred to respond to customer inquiries after the notifications, technical costs incurred as a result of the customer responses, and costs incurred to create the new online portal.

On appeal before Justice Annis, TekSavvy argued that Prothonotary Aronovitch took too narrow a view of Prothonotary Aalto’s Norwich order, and that TekSavvy should be reimbursed for the expenses that resulted from notifying customers of the pending motion by Voltage. Justice Annis disagreed with TekSavvy’s submissions and found that Prothonotary Aronovitch’s interpretation of the Order of Prothonotary Aalto was reasonable in the circumstances. Justice Annis stated:

[58] I conclude that Prothonotary Aronovitch did not err in finding that the general principle enunciated in the jurisprudence on Norwich motions is that the administrative costs and disbursements should be limited to those incurred in abiding with the order, unless special circumstances arise which would not apply here. I similarly conclude that Prothonotary Aronovitch did not err in finding that TekSavvy had no reasonable basis to give notice of the pending motion to its subscribers. TekSavvy therefore has no reasonable basis to claim any of the costs that directly or indirectly flowed from providing the notices.

The decision of Justice Annis is available here.