Some accused of music downloading turn to bankruptcy

Eddie Nicholson, a school bus driver, has made ends meet in recent years by serving as a disc jockey at parties. He calls the business Fast Eddie's Karaoke & DJ Show.

He got some ominous financial news in June, when a sheriff's deputy delivered a summons to Nicholson's trailer home in Marion, Ill. BMG, a music industry giant, was suing him in federal court for downloading music over the Internet. Representing BMG was Bryan Cave LLP, a large law firm based in St. Louis.

Nicholson turned to attorney Bradley Olson, a solo practitioner in Carterville, Ill. Olson filed a bankruptcy case on Nicholson's behalf two weeks later, a move that automatically blocked BMG's suit.

Then Olson asked a bankruptcy judge to bar BMG from collecting the $5,435 claim. BMG filed no response, and on Sept. 8, Judge Kenneth Meyers dismissed the case in U.S. Bankruptcy Court in East St. Louis.

This is the latest, and perhaps grittiest, phase of the music industry's campaign to stamp out what it says is an epidemic of illegal copying of recorded music over the Internet. The Recording Industry Association of America has announced waves of lawsuits against alleged copyright violators. But once the cases hit the courts, music industry attorneys sometimes run into tough battles.

Still, the recording industry group suggests it is winning the war. Since September last year, music companies have sued 4,679 alleged music downloaders, according to the Washington-based association. So far, 1,024 people have settled their cases, it said.

In St. Louis, BMG, Sony and other music giants have sued 603 alleged downloaders.

The broad effect of the campaign has been to dissuade consumers from downloading music illegally, the industry association says. Instead, recorded CD sales are rising after a four-year decline, and legitimate online music sites are thriving, it says.

Nicholson said he considers the industry's tactics unfair. He said he had nothing to do with downloading music, as a neighborhood child had downloaded the music for Nicholson's daughter.

BMG's suit showed that the big company had concluded Nicholson was guilty without even talking to him, he said. BMG sent him a letter threatening to make him pay as much as $350,000, he said.

The experience has left him bitter and angry, he said. "This is not the land of the free any more. It's the land of - how much can you pay?"

He said he bought all of the CDs for his business legally, but now he's been forced to hire a lawyer, file for bankruptcy and make payments to work out his bankruptcy plan.

Consumers aren't the only ones who have resisted the lawsuits. The industry also has clashed repeatedly with someone its own size - Charter Communications Inc., a cable television and Internet service provider based in Town and Country.

Last year, the recording industry group issued subpoenas seeking identifying information on about 200 Charter customers. The association knew them only by the Internet Protocol numbers that identified their computers on the Internet. The subpoenas were used to put names and addresses with those numbers.

The association issued the subpoenas to Charter under the federal Digital Millennium Copyright Act. Charter resisted, saying the subpoenas violated its customers' privacy. The dispute is pending in the 8th U.S. Circuit Court of Appeals.

After another federal appeals court ruled in December that such subpoenas were illegal, the industry changed its strategy. Individual companies began filing suits against "John Doe" defendants identified only by the Internet Protocol number. Under federal court Rule 45, the filing of the suits first legitimized the use of subpoenas.

Charter has had little choice but to comply. Its senior vice president and associate general counsel, Tom Hearity, said, "Where we have grounds to oppose a Rule 45 subpoena, we will do so, but that generally isn't the case." Hearity said Charter tells targeted customers first.

With identifying information now flowing, the music companies have filed suits against 334 named defendants nationwide since May, according to the industry association. Those include just six in the court's eastern Missouri district, and one in Southern Illinois.

Nicholson, the defendant in court at East St. Louis, is not the only one to file for bankruptcy. Victoria Summers, a car dealership employee who lives in Cape Girardeau, Mo., was sued July 20 by Sony Music Entertainment Inc. and other music companies. They claim she downloaded music, or made it available for downloading by others, in violation of the copyrights.

On Aug. 12, Summers filed for bankruptcy. She reported earning $1,887 per month, noting she is divorced and has two children. The filing led to an automatic stay of the lawsuit.

Summers could not be reached for comment. Her attorney, Benjamin Lewis, declined comment.

Not all defendants turn to bankruptcy. Mark Kelly, of Chesterfield, has not responded to a lawsuit BMG and other companies filed against him July 20. In a telephone interview, Kelly said, "It's a situation where I didn't even know this was going on, and my children were involved in it, and I can't figure how the kids were doing what they did."

He said his children were 15 and 17 years old at the time of the suspected activity. He referred other questions to a lawyer, who could not be reached.

On Sept. 20, attorneys for BMG and the other music companies filed a motion seeking a default judgment for damages, noting that Kelly had failed to respond. They are seeking $7,500.

A judge has yet to rule on the request for damages.