The United States Supreme Court has vacated a $46.8 million piracy liability verdict against Grande Communications, a Texas-based internet service provider, in a ruling that fundamentally reshapes how copyright holders can pursue ISPs whose subscribers illegally download music and movies. The decision, handed down on June 19, 2025, doesn’t just affect one regional broadband company. It threatens to dismantle a legal strategy the recording industry has spent over a decade constructing.
The case — Warner Bros. Records Inc. v. Grande Communications Networks LLC — centered on whether an ISP can be held vicariously liable for the copyright infringement of its subscribers simply because it didn’t terminate their accounts after receiving thousands of infringement notices. The Supreme Court, in a unanimous opinion authored by Justice Sonia Sotomayor, said no. Not under the legal theory the music labels advanced.
That theory is now in ruins.
A Decade of Legal Architecture, Dismantled
To understand why this ruling matters so much, you have to understand what the recording industry built. Starting in the mid-2010s, major labels and their enforcement arm, the Recording Industry Association of America (RIAA), shifted strategy. Rather than suing individual file-sharers — a public relations disaster that generated sympathy for grandmothers and college students dragged into federal court — they began targeting ISPs. The logic was straightforward: ISPs profit from subscribers who use their connections to pirate content. If an ISP knows piracy is happening on its network and does nothing, it should share the blame. And the bill.
The legal vehicle was vicarious copyright infringement, a doctrine that holds a party liable when it has the right and ability to supervise infringing activity and a direct financial interest in that activity. Labels argued that ISPs had both: they could disconnect repeat infringers but chose not to, and they profited from those subscribers’ monthly fees.
This approach produced spectacular results at trial. In the Grande case, a jury in the Western District of Texas found the ISP liable for vicarious infringement tied to more than 1,400 copyrighted works and awarded $46.8 million in statutory damages — roughly $33,000 per work. The Fifth Circuit Court of Appeals affirmed in 2024, as reported by TorrentFreak. Similar theories produced a $1 billion verdict against Cox Communications in a Virginia case brought by a group of record labels, though that amount was later reduced.
The pattern was clear. And lucrative.
But the Supreme Court has now pulled the foundation out from under it. Justice Sotomayor’s opinion held that the labels failed to establish the “direct financial interest” prong of vicarious liability. The mere fact that Grande collected monthly subscription fees from users who also happened to pirate music was insufficient. The Court required a showing that the infringing activity itself was a “draw” — that subscribers signed up or stayed with Grande specifically because the ISP let them pirate content without consequence.
The labels offered no such evidence. They showed that Grande received infringement notices from Rightscorp, a now-notorious anti-piracy enforcement firm, and largely ignored them. They showed Grande didn’t have an effective repeat infringer policy. But they didn’t prove that any subscriber chose Grande because it was a haven for pirates. The Court found this distinction dispositive.
“An ISP’s general revenue from subscriptions, without more, does not constitute a direct financial interest in the specific infringing activity of its users,” Sotomayor wrote, according to TorrentFreak‘s reporting on the opinion. The standard requires something closer to the classic vicarious liability scenario: a dance hall operator who profits specifically from a band playing copyrighted songs, or a flea market operator whose vendors sell counterfeit goods that draw customers to the market.
An ISP selling general internet access doesn’t fit that mold.
What This Means for Cox, Charter, and Every Other ISP Under Fire
The immediate practical consequences are significant. Grande’s $46.8 million verdict is gone. The case has been remanded to the Fifth Circuit with instructions to vacate the judgment. But the ripple effects extend far beyond one Texas ISP.
Cox Communications has been fighting its own massive copyright liability case for years. A jury in the Eastern District of Virginia initially hit Cox with a $1 billion verdict in 2019, later reduced to $800 million on appeal. The Fourth Circuit had found Cox liable on a theory of willful contributory infringement rather than vicarious liability, but vicarious liability arguments have been intertwined in that litigation as well. Cox has petitioned the Supreme Court for review, and the Grande decision will almost certainly influence how the Court handles that petition. Sony Music Entertainment and other labels involved in the Cox litigation are now operating in a significantly weakened legal position, at least on the vicarious liability front.
Charter Communications, too, faces a pending lawsuit from music publishers alleging similar theories. The Grande ruling won’t immunize ISPs from all secondary copyright liability — contributory infringement, which requires knowledge of infringement and material contribution to it, remains a viable theory. But it removes the most financially devastating argument the labels had: that ISPs are vicariously liable for every act of piracy on their networks simply because they collect subscription fees.
That’s not a small thing. Vicarious liability carried strict liability characteristics that made it easier for plaintiffs to win at trial. Contributory infringement requires a more demanding showing of knowledge and active participation.
The ISP industry responded with barely contained enthusiasm. NCTA – The Internet & Television Association, the cable industry’s primary lobbying group, had filed an amicus brief supporting Grande. So had a coalition of smaller ISPs and digital rights organizations including the Electronic Frontier Foundation. Their argument was straightforward: holding ISPs vicariously liable for subscriber piracy would force providers to become copyright police, monitoring user activity and terminating accounts based on unverified allegations from third-party enforcement firms like Rightscorp.
Rightscorp itself deserves scrutiny here. The company’s business model depended on flooding ISPs with automated infringement notices, then pressuring those ISPs to forward settlement demands to subscribers or face secondary liability. Rightscorp’s notices were generated through monitoring of BitTorrent swarms, and their accuracy was frequently questioned. The company filed for bankruptcy in 2023, but the legal infrastructure it helped build lived on — until now.
The recording industry, for its part, faces a strategic reckoning. The RIAA did not immediately comment on the ruling. But the major labels — Universal Music Group, Sony Music Entertainment, and Warner Music Group — have invested heavily in ISP liability litigation as a deterrent strategy. The theory was that ISPs, facing potential billion-dollar judgments, would voluntarily implement aggressive repeat infringer policies, cutting off subscribers who were repeatedly flagged for piracy. Several ISPs did exactly that. The Grande ruling weakens the incentive structure that drove those voluntary measures.
Music industry attorneys will now pivot more aggressively to contributory infringement theories. But those cases are harder to win. They require showing that the ISP had specific knowledge of infringement — not just generalized awareness that some subscribers pirate — and that it materially contributed to that infringement in some meaningful way beyond simply providing internet access. Courts have been divided on where that line falls.
The Bigger Picture: Safe Harbors, Section 512, and What Comes Next
The Grande decision also intersects with ongoing debates about the Digital Millennium Copyright Act’s safe harbor provisions under Section 512. That statute provides ISPs with immunity from monetary damages for subscriber infringement, but only if they adopt and reasonably implement a policy for terminating repeat infringers. Grande lost its safe harbor protection at trial because the court found it didn’t have an adequate repeat infringer policy. The Supreme Court didn’t address the safe harbor question directly — it decided the case on the narrower vicarious liability issue. But the interplay between safe harbor eligibility and secondary liability theories will continue to generate litigation.
And the timing matters. Congress has shown periodic interest in updating copyright law for the streaming era, and the Copyright Office has published studies questioning whether Section 512’s framework still works as intended. The Grande ruling may reduce industry pressure for legislative reform — if ISPs can’t be held vicariously liable, the urgency of rewriting safe harbor rules diminishes from the labels’ perspective. Or it may increase that pressure, as copyright holders seek legislative solutions to replace the judicial ones the Supreme Court just foreclosed.
For now, the practical reality is this: ISPs have significantly more breathing room. They still need repeat infringer policies to maintain DMCA safe harbor protection. They can still face contributory infringement claims if they actively facilitate piracy with specific knowledge. But the era of billion-dollar vicarious liability verdicts against broadband providers — verdicts premised on the simple fact that pirates pay monthly internet bills — appears to be over.
The music industry built a formidable litigation machine over the past decade. The Supreme Court just took away its most powerful weapon.
WebProNews is an iEntry Publication