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Case 1:15-cv-03701-AJN Document 58 Filed 06/03/15 Page 1 of 11

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

Arista Records, LLC, et al.,

Plaintiffs,

-v-

Vita Tkach, et al.,

Defendants.

ALISON J. NATHAN, District Judge:

USDCSDNY
DOCUJVILVf
ELEClROT'iiICALLY FILED.
DOC#:
DATE FlLEii~·Ju1ro 3 2015

15-CV-3701 (AJN)

MEMORANDUM

&ORDER

On May 13, 2015, a Judge of this Court sitting in Part 1 entered a temporary restraining

order ("TRO") against Defendants Vita Tkach and Does 1-10 (d/b/a Grooveshark.io and

Grooveshark.pw). Dkt. No. 18. On May 22, 2015, Plaintiffs filed with this Court a

"supplemental order and order to show cause requiring third party CloudFlare, Inc. to comply

with the pending temporary restraining order." Dkt. No. 35. As detailed in this Court's May 27,

2015 Order, the Court held a conference with Plaintiffs and CloudFlare on May 26, 2015 and set

a briefing schedule for Plaintiffs' motion for a supplemental order, which was to "determine

whether CloudFlare is bound by the existing TRO and whether it will be bound by any

forthcoming preliminary injunction against the Defendants, if one is entered." Dkt. No. 40 at 2.

On June 1, 2015, the Court entered that preliminary injunction against the Defendants. Dkt. No.

53. Therefore, as a practical matter, the present motion is to determine whether CloudFlare was

bound by the TRO and now is bound by the existing preliminary injunction (the terms of which

are substantially identical to the TRO). CloudFlare has taken the position that the TRO did not

apply to it largely because of the "passive" nature of its services. As described in greater detail

below, the Court disagrees.

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I.

BACKGROUND

On May 5, 2015, the Court entered a Stipulation, Consent Judgment, and Permanent

Injunction against Escape Media Group, Inc. ("Escape"), which operated the website

www.grooveshark.com ("Grooveshark"). See Dkt. No. 108 in Capitol Records, LLC v. Escape

Media Grp., Inc., No. 12 Civ. 6646 (AJN)(SN) (S.D.N.Y. May 5, 2015). 1 Similarly, on May 1,

2015, in a separate action, Judge Griesa entered a Stipulation, Consent Judgment, and Permanent

Injunction against Escape and its founders. See Dkt. No. 107 in Arista Music v. Escape Media

Grp., Inc., No. 11 Civ. 8407 (TPG) (S.D.N.Y. May 1, 2015). 2 As part of this latter settlement,

among other things, Escape conveyed to PlaintiffUMG Recordings, Inc. ownership of its

federally registered trademarks relating to the Grooveshark service. Id.

A.

The Temporary Restraining Order

Shortly after the consent judgments were entered, a "copycat" version of Grooveshark

appeared on the internet, which led Plaintiffs to file the present action on May 12, 2015 against

Defendants Vita Tkach and Does 1-10 who are allegedly operating the copycat version of

Grooveshark. Comp!.~~ 7-9. That same day, Plaintiffs obtained from the Part 1 Judge of this

Court a TRO against Defendants "and any persons acting in concert or participation with them or

third parties providing services used in connection with Defendants' operations" from, among

other things, "[ u ]sing, linking to, transferring, selling, exercising control over, or otherwise

owning the domain names grooveshark.io or grooveshark. pw or any other domain name that

incorporates, in whole or in part, any of Grooveshark Marks" and from "[ d]irectly or secondarily

infringing Plaintiffs' copyrighted sound recordings via the [Defendants' service] or any

variations thereof." Dkt. No. 18.

Plaintiffs explain that they were then drawn into what they describe as a technological

globetrotting game of"whack-a-mole" in an effort to enforce the TRO. On May 13, 2015,

1 The Court had earlier found Escape liable for copyright infringement based on its operation of

Grooveshark. Capitol Records, LLC v. Escape Media Grp., Inc., No. l 2-CV-6646 (AJN), 2015 U.S. Dist. LEXIS
38007 (S.D.N.Y. Mar 5, 2015).

2 Judge Griesa also found Escape and its founders liable for copyright infringement in the separate action.
UMG Recording v. Escape Media Grp., Inc., No. 11 Civ. 8407, 2014 U.S. Dist. LEXIS 137491 (S.D.N.Y. Sept. 29,
2014).

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Plaintiffs served the TRO on Defendants and Namecheap, Inc., a California-based domain name

registrar through which Defendants had registered "grooveshark.io" (.io is the country-code

domain reserved for the British Indian Ocean Territory) and "grooveshark.pw" (.pw is the

country-code domain reserved for the Republic of Palau). Pls.' Br. 3 (citing Doroshow Deel.

~~ 3-4). Namecheap, Inc. complied with the TRO, which effectively disabled the ".io" and

".pw" Grooveshark domain names. Pls.' Br. 3 (citing Suppl. McDevitt Deel.~ 3). Defendants

then registered "grooveshark.vc" (.vc is the country-code domain reserved for Saint Vincent and

the Grenadines) through Dynadot, which was subsequently served with the TRO. Pls.' Br. 3

(citing Doroshow Deel.~ 5). After Dynadot complied with the TRO, the "groveshark.vc"

domain name was disabled. Pls.' Br. 3 (citing Suppl. McDevitt Deel. ~ 4 ). Defendants then

registered a "grooveshark.li" domain name (Ji is the country-code domain reserved for the

principality of Liechtenstein). Pls.' Br. 3-4 (citing Suppl. McDevitt Deel. ~ 5). The domain

name registrar through which Defendants registered the .li domain is located in Switzerland. Id.

At roughly this point, Plaintiffs opted for a different tactic and served the TRO on CloudFlare.

B.

CloudFlare, Inc.'s Services

CloudFlare is an internet service provider that provides authoritative domain name

system servers for its customers as a means of providing content delivery network and reverse(cid:173)

proxy services. Opp'n Br. 3-4. CloudFlare explained that an "authoritative domain name

server" is a "computer on the Internet that is designated by the domain name owner to report the

correct IP address for that domain, which information is then propagated to other DNS servers

worldwide as it is needed." Opp'n Br. 3 (citing Guomundsson Deel~~ 11-13). In laymen's

terms, this appears to mean that when someone types a domain name such as "grooveshark.li"

into a web browser, the Defendants have engaged CloudFlare to convert the domain name into

the IP address for the website associated with that domain name so that the user can connect to

the website they are trying to reach. Without CloudFlare, a user could still get to

"grooveshark.li" if the user had the actual IP address for the website associated with that domain

name; alternatively, Defendants could obtain CloudFlare's authoritative domain name system

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server from another third-party service provider comparable to CloudFlare or Defendants could

provide that same service on their own. Guomundsson Deel.~~ 15, 19-20; Foster Deel.~ 5.

CloudFlare also "optimizes the delivery of customers' websites from the customers' origin server

to visitors' browsers. This gives visitors to a customer's website faster page load times and

better performance, while blocking threats and abusive bots and crawlers from attacking the

websites." Opp'n Br. 3 (citing Guomundsson Deel.~~ 9, 16).

On May 2, 2015, a user opened a free account at CloudFlare and configured the domain

names grooveshark.pw and grooveshark.io to use CloudFlare's services. Opp'n Br. 4 (citing

Paine Deel~ 7). On May 13, 2015, an anonymous user using a different email address and

server IP address opened a new free account and configured the domain name grooveshark.vc to

use CloudFlare's services. Id.

On May 14, 2015, Plaintiffs served a copy of the TRO on CloudFlare and requested that

it cease providing support to the Grooveshark sites. Doroshow Deel.~ 6; Opp'n Br. 4.

CloudFlare confirmed receipt of the TRO, but stated that it did not construe the TRO as applying

to it, insisting that Plaintiffs seek an order from this Court requiring CloudFlare's compliance.

Id. Then, on May 15, 2015, an anonymous user opened yet another free account at CloudFlare

and configured the domain name grooveshark.li to use CloudFlare's services; this anonymous

user used another email address and server IP address that were not the same as either of the ones
used earlier. Opp'n Br. 5 (citing Paine Deel. iJ 7).

C.

The Motion for Contempt/Clarification

As explained in the Court's May 27, 2015 Order, on May 22, 2015, Plaintiffs filed an ex

parte "Proposed Supplemental Order to Show Cause" requesting a court order requiring third(cid:173)

party CloudFlare, Inc. to comply with the existing TRO. Dkt. No. 40. After a conference was

held on May 26, 2015, the Court clarified that it would construe Plaintiffs' request as an

expedited contempt motion for violation of the existing TRO or, alternatively, an expedited

motion for clarification of the existing TRO. Dkt. No. 40 at 2. The Court set a briefing schedule

and provided the parties with an opportunity to request an evidentiary hearing, Dkt. No. 40 at 2,

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which they declined, Dkt. No. 48. Therefore, factual findings contained herein are based on the

parties' written submissions, which were fully submitted today-June 3, 2015. Both sides

requested an expedited process and this Court is issuing this Order on an expedited basis.

II.

DISCUSSION

Plaintiffs contend that CloudFlare is in active concert or participation with (i.e., aiding

and abetting) the Defendants because it (1) owns and operates the authoritative name server for

grooveshark.li (and the other Grooveshark sites) and (2) optimizes the performance of

grooveshark.li (and the other Grooveshark sites), making them faster and more resistant to

malicious attack. Although there is no genuine factual dispute regarding the services CloudFlare

provides to the Grooveshark sites, CloudFlare contends that it should not be bound by the

injunction because its service is "passive" and not necessary for the operation of the Grooveshark

sites.

CloudFlare rests its legal argument on the longstanding principal that a court "cannot

lawfully enjoin the world at large, no matter how broadly it words its decree." Alemite Mfg.

Corp. v. Sta.ff, 42 F.2d 832, 832 (2d Cir. 1930) (Hand, J.). The problem for CloudFlare is the

equally venerable proposition that "a person who knowingly assists a defendant in violating an

injunction subjects himself to civil as well as criminal proceedings for contempt." Id.; see also

l lA Charles A. Wright, et al., Federal Practice and Procedure § 2956 at 394 (3d ed. 2013)

(explaining that Alemite "clearly does not grant immunity to someone who knowingly aids,

abets, assists, or acts in concert with a person who has been enjoined from violating the

injunction"). Federal Rule of Civil Procedure 65 expressly incorporates this countervailing

proposition in that every TRO or injunction binds not only the parties and their agents but also

"other persons who are in active concert or participation with them." Fed. R. Civ. P. 65(d)(2).

CloudFlare makes two primary arguments in opposition. First, it takes the position that it

is not in such "active concert or participation" with Defendants because its "systems have

passively and automatically served the domain names at issue." Opp'n Br. 9. It further argues

that it need not comply with the TRO because, even if it complies, the Plaintiffs will not

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accomplish their ultimate goal: "Even if CloudFlare-and every company in the world that

provides similar services-took proactive steps to identify and block the Defendants, the website

would remain up and running at its current domain name." Opp'n Br. 1. The Court finds neither

argument persuasive.

A.

CloudFlare's Passivity Argument

Turning to CloudFlare's passivity argument first, the Court notes that there is a surprising

dearth of authority addressing the meaning of Rule 65 's "active concert or participation"

language in the context of internet service providers such as CloudFlare. The authority

CloudFlare relies on either does not support the point for which it is offered or is factually

inapposite. See Opp'n Br. 6-10. And the Court itself was unable to find on-point authority

beyond the two cases discussed below. Therefore, the Court must rely on more general

applications of Rule 65, which have noted that "active concert or participation" exists if the third

party "aided and abetted" the party subject to the injunction. This requires "show[ing] that the

non-party had actual knowledge of the judicial decree and violated it, and that the challenged

action was taken for the benefit of, or to assist, a paiiy subject to the decree." Adcor Indus. v.

Bevcorp, LLC, 411 F. Supp. 2d 778, 794 (N.D. Ohio 2005) (citing Microsystems Software, Inc. v.

Scandinavia Online AB, 226 F.3d 35, 43 (1st Cir. 2000); Additive Controls & Measurement Sys.,

Inc. v. Flowdata, Inc., 154 F.3d 1345, 1353 (Fed. Cir. 1998)); see also Lindlandv. U.S.

Wrestling Ass 'n, 227 F.3d 1000, 1006 (7th Cir. 2000) ("The 'active concert or participation'

clause is designed to prevent what may well have happened here: the addressee of an injunction,

eager to avoid its obligations, persuades a friendly third party to take steps that frustrate the

injunction's effectiveness." (citing Reich v. Sea Sprite Boat Co., 50 F.3d 413 (7th Cir. 1995)).

There is no real dispute that CloudFlare had knowledge of the TRO at least as of May 14,

2015 and that it subsequently permitted an anonymous user to establish a free account that

configured the domain name grooveshark.li to use CloudFlare's services. CloudFlare's

authoritative domain name server translates grooveshark.li as entered in a search browser into the

correct IP address associated with that site, thus allowing the user to connect to the site.

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Connecting internet users to grooveshark.li in this manner benefits Defendants and quite

fundamentally assists them in violating the injunction because, without it, users would not be

able to connect to Defendants' site unless they knew the specific IP address for the site. Beyond

the authoritative domain name server, CloudFlare also provides additional services that it

describes as improving the performance of the grooveshark.li site. Opp'n Br. 3.

As noted, there is limited authority addressing services such as CloudFlare's, but the few

courts that have addressed comparable technological services have similarly held that they fall

within an injunction's reach if those services are knowingly used to facilitate injunction

violations. See, e.g., The North Face Apparel Corp. v. Fujian Sharing Imp. & Exp. Ltd Co., No.

10 Civ. 1630 (AKH), slip op. 4-6 (S.D.N.Y. June 24, 2011) ("Public Interest Registry, for

example, cannot continue to make the connections that enable customers attracted to defendants'

websites to access those websites."); South Cent. Bell Tel. Co. v. Constant, Inc., 304 F. Supp.

732, 736 (D.La. 1969) ("As soon as South Central Bell was apprised of the fact that the

subscriber, Constant, was, by use of South Central Bell's equipment, violating the injunction

imposed by this Court, it had a duty not to act in any way in concert with Constant to effectuate

or perpetuate the violation. South Central Bell had the means to prevent its equipment from

being used to violate the injunction, and its failure to do so would, at the very least, have

amounted to a passive participation in the violation."). Indeed, at least one district court has

included CloudFlare within the reach of an injunction aimed at an infringing website: "[A ]11

website hosting, website optimization, and any other company or person that provides website

services for the MFN domains, including without limitation, CloudFlare, Inc., shall within 24

hours of receipt of this Order, cease all website services made in connection with the MFN

domains." Dish Network LLC v. Dillion, No. 12cvl57 BTM (NLS), 2012 U.S. Dist. LEXIS

13277, at *14 (S.D. Cal. Feb. 3, 2012).

In opposition, CloudFlare relies heavily on Blockowicz v. Williams, 630 F.3d 563 (7th

Cir. 2010), which involved a third-party website that refused to remove allegedly defamatory

content posted by enjoined defendants. But that case, which applied an abuse of discretion

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standard of review to a district court's refusal to enforce an injunction against third parties, is

distinguishable from the facts here. To begin with, the Blockowicz court emphasized that the

only act of the third-party service provider, "entering into a contract with the defendants,

occurred long before the injunction was issued." Id. But CloudFlare acknowledges that it

permitted an anonymous user to register a "grooveshark" domain name to use its services after it

had received notice of the TRO. The Blockowicz court also highlighted the fact that the third(cid:173)

party service provider merely continued to host the defamatory content on its website as it had

done prior to the issuance of the injunction. In contrast, CloudFlare's authoritative domain name

server connects users to the new Grooveshark site by translating a user's browser entry into the

IP address for the site, and it also ensures faster load times and optimal performance for the site,

both of which are far from the passive hosting of content at issue in Blockowicz.

CloudFlare's passivity argument also implies that it should not be bound by the

injunction because it is not motivated by a desire to help Defendants violate the injunction;

rather, CloudFlare contends it is merely providing the same service to Defendants that it would

provide to anyone else. But the Second Circuit has "held that a court's inquiry into the fact of

aiding and abetting is 'directed to the actuality of concert or participation, without regard to the

motives that prompt the concert or participation."' Eli Lilly & Co. v. Gottstein, 617 F.3d 186,

193 (2d Cir. 2010) (quoting N. Y. State Nat 'l Org. for Women v. Terry, 96 l F.2d 390, 397 (2d Cir.

1992), vacated on other grounds sub nom., Pearson v. Planned Parenthood Margaret Sanger

Clinic (Manhattan), 507 U.S. 901 (1993)). Thus, CloudFlare's motivations are not at issue.

B.

CloudFlare's Futility Argument

CloudFlare's second, or "futility," argument is equally unpersuasive. In essence,

CloudFlare contends that Plaintiffs will obtain a short-lived victory if it complies with the

temporary restraining order because another third-party service provider could provide the same

service or Defendants could provide that service on their own. In other words, even if

CloudFlare complied with the injunction, this would not "necessarily" shut down grooveshark.li

or other various incarnations of Grooveshark that Defendants might set up. But just because

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another third party could aid and abet the Defendants in violating the injunction does not mean

that CloudFlare is not doing so. Similarly, the Court is unaware of any principle requiring

Plaintiffs to show that Defendants' site would be inaccessible but for CloudFlare's services; they

need only show that CloudFlare is in active concert or participation with Defendants.

CloudFlare also suggests that it would not be able to comply with the injunction because

it "has no way of identifying accounts opened by the Defendants, other than their alleged use of

domains containing the name 'grooveshark."' Opp'n Br. 12 (emphasis added). But as Plaintiffs

note, "[t]he word 'grooveshark' is a highly-distinctive registered trademark, owned by Plaintiff

UMG, and preventing CloudFlare from 'linking to' any domain name that includes the

'grooveshark' word mark is precisely what the TRO requires (among other things), regardless of

which top-level domain (e.g., .Ii, .io, .pw, .vc., etc.) is used." Reply Br. 8-9. Thus, far from

being unable to comply, CloudFlare acknowledges that it can identify customers using domain

names containing the name "grooveshark."

Finally, CloudFlare suggests that the TRO could potentially enjoin any service provider

that is remotely connected to the new Grooveshark site(s). The Court does not share this concern

in light of the wording of the TRO, which is sufficiently narrow in scope that "the party enjoined

[is] able to ascertain from the four corners of the order precisely what acts" are forbidden,

Sanders v. Air Line Pilots Association, 473 F.2d 244, 247 (2d Cir. 1972). While there may be

more attenuated services that indirectly support Defendants' sites, the Court is addressing the

facts before it, which involve a service that is directly engaged in facilitating access to

Defendants' sites with knowledge of the specific infringing names of those sites. In this respect,

CloudFlare seems quite similar to a domain name registrar, which both parties appear to agree is

covered by the injunction.

In sum the Court concludes that CloudFlare is in active conce1i or participation with the

Defendants based on the following facts: (1) CloudFlare admittedly owns and operates the

authoritative domain name server for the new Grooveshark sites, which connects users entering

the Grooveshark domain names into a web browser to the specific IP address associated with that

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site; (2) CloudFlare provides other services designed to improve the performance of the new

Grooveshark sites; and (3) CloudFlare began providing its services to grooveshark.li after it

acknowledged receipt of the TRO. Furthermore, for the purpose of determining whether

CloudFlare is in active concert or participation with the Defendants, it is not determinative that

CloudFlare's services are automated, that CloudFlare lacks a specific desire or motivation to help

the Defendants violate the injunction, or that the Grooveshark sites would continue to exist even

without CloudFlare's assistance. The Court thus hereby concludes and clarifies that CloudFlare

was bound by the TRO and is now bound by the existing preliminary injunction.

C.

Attorney's Fees

Plaintiffs made only a passing request for attorney's fees in their opening brief and did

not press their case for attorney's fees in their reply brief despite the fact that CloudFlare offered

arguments against an award of attorney fees in its opposition. Thus, it appears that Plaintiffs

have abandoned their halfhearted request for attorney's fees. See, e.g., Adams v. NY State Educ.

Dep 't, 752 F. Supp. 2d 420, 452 n.32 (S.D.N.Y. 2010) (Peck, M.J.) (collecting cases); In re

Compact Disc Minimum Advertised Price Antitrust Litig., 456 F Supp. 2d 131, 152 (D. Me.

2006) ("A party's failure to oppose specific arguments in a motion to dismiss results in waiver of

those issues."). Even if not abandoned, Plaintiffs failed to establish a willful violation necessary

to support an award of attorney's fees and CloudFlare advanced a colorable, good-faith basis for

believing that it was not covered by the injunction. Therefore, the Comi will not award

attorney's fees. See, e.g., GMA Accessories, Inc. v. Eminent, Inc., No. 07 Civ. 3219 (LTS)(DF),

2008 U.S. Dist. LEXIS 55107, at *34-35 (S.D.N.Y. May 29, 2008) ("Most courts in this Circuit

strictly adhere to the general principle that, for attorneys fees and costs to be awarded on a

contempt motion, the contemnor's conduct must have been willful. But if the Court does find

that the defendant's violation was willful it should then award attorneys' fees and costs unless

there are persuasive grounds to deny them." (citations and internal quotation marks omitted)).

Going forward, however, CloudFlare is now aware that it is bound by the injunction so any

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future failure to comply might expose it to a contempt finding that could result in the award of

attorney's fees or other consequences.

III.

CONCLUSION

For the reasons stated above, the Court concludes and clarifies that third-party service

provider CloudFlare, Inc. was bound by the TRO and is bound by the existing preliminary

injunction in this case.

SO ORDERED.

Dated: June --1_, 2015

New York, New York

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