After Cox ruling, record labels offer to walk away from Grande piracy case – but clash with ISP over $4m in bond costs
The three major record labels — Universal, Sony and Warner — have told the US Fifth Circuit Court of Appeals that they will not continue pursuing the substance of their piracy case against internet provider Grande Communications, following the Supreme Court's ruling in Cox v. Sony Music. That March ruling held that ISPs cannot be held liable for their users' infringement unless they actively induced it, a standard the labels concede they cannot meet against Grande, effectively ending a case that has run since 2017.
What remains unresolved is who pays the costs, particularly around USD $4 million in bond premiums Grande says it incurred while appealing a $46.8 million damages award handed down by an Austin jury in 2022 for infringement of 1,403 recordings. The labels want each side to bear its own costs and have proposed the court vacate the judgment and remand the case, while Grande wants judgment entered in its favour along with recovery of its appeal costs and attorneys' fees, and disputes that the labels have properly challenged its $4 million bond figure.
- Labels drop piracy case against ISP Grande after Cox v. Sony ruling
- Dispute now centres on who pays roughly $4m in bond costs
- Case dates to 2017; $46.8m damages award had already been under appeal
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
The record labels voluntarily abandoned their case following a Supreme Court ruling that fundamentally changed the legal standard for ISP liability. They should not be financially penalised for a change in law rather than a weakness in their original claim—changing the legal landscape mid-litigation is not their responsibility. Under established principles, when circumstances shift dramatically due to judicial developments beyond either party's control, each side typically bears its own losses. The labels' willingness to withdraw entirely demonstrates good faith acceptance of the Court's new standard and should not be treated as retroactive admission that their case was unfounded.
The case against
Grande Communications was forced to defend against a $46.8 million damages claim that required posting a $4 million appeals bond. This substantial financial burden was imposed by the labels' aggressive litigation strategy based on a legal theory the Supreme Court has now confirmed was invalid. Fairness demands Grande recover these costs as real economic harm caused by the labels' pursuit of a legally deficient claim. The labels should not escape financial responsibility simply because law shifted; Grande should not bear the cost of a legal development it did not cause and that the Supreme Court determined favours its position entirely.