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Majors return to court over Grande’s $46.8 million damages bill

By | Published on Friday 25 August 2023

The major record companies have urged an American court not to approve proposals by internet service provider Grande Communications regarding a bond it is posting while it appeals a copyright ruling that ordered it to pay the labels $46.8 million.

Grande – which rebranded as Astound Broadband last year – is one of the American ISPs that was sued by the music industry for not doing enough to combat copyright infringement and infringers of its networks.

After a court sided with the record companies and ruled that Grande could be held liable for its users’ infringement, the ISP was ordered to pay $46.8 million in damages.

Somewhat unsurprisingly, Grande is appealing that ruling. But should it hand over the damages in the meantime? The labels demanded that the ISP at the very least post a bond equivalent to the damages while the appeals process goes through the motions, to be certain that the cash will be available to pay the damages if the appeal fails.

Grande tried to argue against such a thing, claiming that its parent company had lots of money so the labels were guaranteed payment if the appeal goes in favour of the music companies. Meanwhile, posting a bond would mean considerable extra expense for the net firm. However, last month the courts said a bond must still be posted.

The labels are now taking issue with how Grande is planning to post the bond. They have two issues. First, when and how they will get the $46.8 million if Grande loses its appeal. And second, concerning interest also due on the damages.

Under Grande’s current bond posting proposal, the labels said in a legal filing this week, the surety – ie the entity that will take responsibility for the ISP’s debt – “will become liable only if Grande first fails to pay the judgment”.

They then stated: “Imposing such a condition precedent on the surety’s liability both fails to protect plaintiffs’ security interest in their judgment and is impermissibly vague about when the surety will become liable”.

“Grande’s bond should instead state clearly that the surety is immediately liable for the judgment if Grande does not prevail on appeal”, they insisted, “but that such liability is obviated if Grande satisfies the judgment itself”.

And as for the interest issue, the legal filing simply said: “The amount of Grande’s bond does not account for post-judgment interest”.

So, with all that in mind, the music companies would like the court to reject Grande’s current proposal.