Judge Hits Pirate IPTV Defendant With $71.1k Contempt of Court Order

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In July 2022, Canada-based IPTV provider SmoothStreams was shut down by a coalition of companies including Bell Media, Rogers, and the Hollywood-based studios of MPA-Canada. After two defendants failed to comply with the strict terms of a search and seizure order, both faced contempt proceedings. The first has just concluded with a judge ordering the defendant to immediately pay the plaintiffs over US$71,100, before the main copyright case has even started.

smoothstreamsIn July 2022, popular IPTV service provider SmoothStreams suddenly went offline in somewhat unusual circumstances.

In the weeks that followed, evidence emerged that the Canada-based service had been targeted after Bell Media, Rogers Media, Disney, Paramount, Columbia, and Warner Bros. filed a copyright infringement complaint at Canada’s Federal Court.

On July 14, 2022, after obtaining an injunction and an Anton Piller order, which authorized the plaintiffs to search and seize evidence from premises linked to the defendants, dozens of receivers, encoders, and rows of servers were seized from three locations.

Other aspects of the Anton Piller order, which granted the plaintiffs extraordinary powers and threatened serious consequences for any non-compliant defendant, faced considerable resistance.

SmoothStreams before being dismantledsmoothstreams-server2

Among other things, the alleged operators of SmoothStreams, Marshall Macciacchera and Antonio Macciacchera (son and father respectively), were required to disclose specific technical and financial information about the service’s operations. Marshall failed to fully comply with the order; Antonio simply refused to read it.

From the beginning, Antonio denied any involvement in the SmoothStreams operation, a position he maintains today.

Contempt of Court

While both defendants faced contempt of court proceedings, Antonio’s case progressed more quickly than his co-defendant’s.

An order issued by Associate Judge Benoit Duchesne on July 21, 2022, concerned ten charges pertaining to alleged breaches of the Anton Piller order issued by Justice Rochester on June 28, 2022. Chief Justice Paul S. Crampton subsequently found that Antonio was in contempt of four of the ten charges in that order. The final six all faced issues.

In respect of five charges, Chief Justice Crampton found that while the plaintiffs had previously tendered evidence in the proceeding before Justice Rochester, no evidence was presented in this particular hearing to connect Antonio to any of the technical and financial information listed in Judge Duchesne’s order.

The final charge also failed after no evidence was produced to show that Antonio concealed anything described in Justice Rochester’s interim order.

While logic suggests that four charges must be better than ten, contempt of court can be expensive, especially since this proceeding relates to an amount to be awarded to the plaintiffs, with the Court to impose additional penalties later.

Bell, Rogers, and Hollywood Studios Demand Big Money

As detailed in an order handed down by Chief Justice Crampton on Friday, the plaintiffs demanded an immediate payment of CAD$121,124.74 (US$90,440), comprised of $100,038.55 (US$74,695) in legal fees (100% of those incurred), HST (sales tax) of CAD$8,670 (US$6,473), and disbursements of CAD$12,416.19 (US$9,270).

Antonio’s legal team proposed a much lower amount of CAD$10,000 (US$7,466) in total, arguing that the amount was appropriate in light of the six failed charges and any subsequent amount to be imposed by the Court.

In his order, Chief Justice Crampton notes that Antonio continues to insist he had no role in SmoothStreams. Nevertheless, the plaintiffs and the Court still had to “come to grips with a complex record” and an allegedly illegal business Justice Lafrenière previously described as “highly sophisticated” and “lucrative.”

While agreeing that the plaintiffs’ failure to present evidence amounted to a “misstep” weighing in favor of a reduced award, a pro rata 60% reduction would not be appropriate since persistent refusals to cooperate “completely frustrated” the execution of the order.

“Flagrantly Disobeyed” and “Defied the Court”

smoothstreams-server“[B]y steadfastly refusing to permit the Independent Supervising Solicitor (ISS) […] to enter his home and execute the Rochester Interim Order, Antonio flagrantly disobeyed that Order and defied the Court.

“He also completely frustrated an important purpose of that Order, which was to prevent the circumvention of the Court’s processes by pre-empting the destruction or removal of evidence, or the shifting of funds beyond the Court’s reach,” Chief Justice Crampton’s order reads.

“In these circumstances, he ought not to be able to indirectly and fully benefit from the fact that his blatant defiance of the Rochester Interim Order entirely prevented [the ISS] from establishing the nexus between Antonio and the six charges.”

After weighing the factors for and against, including that Antonio “deliberately deprived the plaintiffs of the element of surprise,” the Judge found that a 25% reduction would be appropriate.

“The public interest in fostering compliance with court orders provides a strong rationale for the ‘customary practice in contempt cases to impose costs on a solicitor-client basis’. This consideration weighs in favor of awarding the Plaintiffs their full costs, less the adjustments discussed above.”

As per Chief Justice Crampton’s order (in Canadian dollars) handed down on December 15, 2023:

The Defendant Antonio Macciacchera shall pay to the Plaintiffs, forthwith, lump sum costs of $94,906.19, comprising reasonable legal fees of $73,000, plus HST of $6,326.67 on those legal fees, plus reasonable disbursements of $12,416.19.

Conversion: Lump sum US$70,863, legal fees US$54,506, HST US$4,723, disbursements US$12,416


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