2:38pm PT by Ashley Cullins
VidAngel Found in Contempt for Delay in Removing Disputed Films
VidAngel has lost another round in its fight with Disney, 20th Century Fox and Warner Bros., and this one will cost it $10,000.
The family-friendly streaming site was found in contempt for failing to immediately comply with a preliminary injunction that required it to remove content owned by the studios. U.S. District Court Judge Andre Birotte Jr. made the order on Dec. 12, but VidAngel didn't comply until Dec. 29 after Birotte denied its request to stay the injunction.
The legal fight began in June, when the studios sued VidAngel for what they say is blatant copyright infringement. The site allows customers to "buy" a movie for $20, set filters to remove offending content like violence or nudity, watch it and then "sell back" the film to the company for a $19 credit — leaving customers having paid only $1 to stream it.
VidAngel attorney David Quinto on Friday told Birotte that the studios' only reason for seeking a contempt finding was to "color VidAngel as a bad actor" in the court of public opinion. Birotte replied, "I think VidAngel might have done a good job of it itself."
The conversation leading up to the decision remarkably resembled Abbott and Costello's "Who's on First" — a circular exchange between Birotte and Quinto that, ultimately, never reached a satisfactory conclusion for either party.
A short recap: Birotte would ask if VidAngel failed to comply with his order, noting that it appears obvious the company did such. Quinto would then reply that VidAngel made it clear it would comply after Birotte ruled on its motion to stay — and would note that VidAngel is currently in compliance, as it shut down operations entirely mere hours after that decision. That prompted the judge to remind Quinto that compliance came weeks after his initial order and to ask him to share any legal precedent that allows such a delay. Quinto said it's not so much legal precedent as it is a common industry practice, and the delay was to avoid collateral consequences to the business not imagined by the order. Birotte then asked if Quinto believes VidAngel was in compliance, and so on.
Ultimately this led to a semi-admission of noncompliance by VidAngel's attorney. "Our bad, your honor," said Quinto.
Disney's attorney, Kelly Klaus, told the court that VidAngel took a gamble to see if it could get away with continuing operations during a lucrative holiday season. "I've never seen a party flout an injunction in this way," said Klaus, adding that he's not aware of any industry custom that allows a party to ignore an injunction while a motion for a stay is pending.
During a brief rebuttal, Quinto took his semi-admission a step further, saying, "It would have been possible to comply immediately."
After taking a recess to look over case files and do some research, Birotte said he had "no other option but to make a finding of civil contempt" — noting that VidAngel, in essence, admitted it did not comply from Dec. 12 through Dec. 29. He also awarded attorneys' fees in the amount of $10,231.20 to Disney's legal team for the work it did in connection with this decision.
VidAngel CEO Neal Harmon issued a statement Friday following the hearing. "As our customers know, we have been shut down for some time, and we obviously disagree with Judge Birotte’s decision today and other decisions across all dimensions of this case," said Harmon. "However, we respect the process and look forward to presenting our case to the 9th Circuit. Because we are confident that Congress intended for movie filtering to be legal without permission from Hollywood, we believe that ultimately we will be victorious, and remain prepared to go all the way to the Supreme Court."