In an opinion yesterday, Judge Preska refused to certify as a class action a case alleging price fixing in the digital music industry. Among other reasons, she found that widespread pirating would raise “unclean hand” defenses that could not be determined on a classwide basis:
Defendants note that two of the Proposed Class Representatives admitted in their depositions to pirating Digital Music and that a third refused to produce documents that might expose his participation in illegal downloading. [A defense expert] also cites evidence of widespread illegal downloading of Defendants’ music during the class period, indicating that between 2004 and 2009 approximately 30 billion songs were illegally downloaded on file-sharing networks and that only 37% of music acquired by U.S. consumers in 2009 was legally purchased . . . .
[I]f the alleged price fixing inflated the prices for Digital Music such that Plaintiffs responded by illegally obtaining songs for free, the Court would necessarily have to conduct an individualized inquiry into evidence of illegal downloading by the proposed class members in order to determine whether such an offset is necessary for each individual plaintiff. Because Plaintiffs propose nine separate damages classes with millions of potential members, this individualized inquiry would quickly overwhelm questions common to the class."