Google LLC v. Dmitry Starovikov

Background

Google LLC brought this lawsuit against Dmitry Starovikov, Alexander Filippov, and Does 1–15, alleging that the defendants operated the Glupteba botnet. Google alleged that the botnet used infected computers to collect personal data and carry out criminal activity. The court issued a temporary restraining order allowing Google to disrupt the botnet, later converted that order into a preliminary injunction, and initially entered a default after the defendants did not respond.

The court later vacated the default so the parties could conduct targeted discovery. During discovery, the defendants stated that they worked for Valtron as software engineers, but later disclosed that they had left Valtron and had returned their work laptops. The court found that the defendants and their attorney, Igor B. Litvak, nevertheless continued to suggest that relevant devices or information might be available, resisted producing discovery, and failed to participate in discovery in good faith.

The parties’ settlement discussions also included an offer by the defendants to provide private keys associated with the Glupteba botnet’s Bitcoin accounts and to agree not to engage in the alleged criminal activity. In exchange, they demanded that Google not report them to law enforcement, payment of $1 million per defendant, and $110,000 in attorney’s fees. The court viewed this demand, together with the defendants’ other conduct, as an attempt to use the litigation and their alleged access to the botnet for financial gain.

Earlier sanctions order

In an order dated November 15, the court entered default judgments against Starovikov and Filippov and imposed monetary sanctions against them and Litvak. The sanctions were based on what the court described as a willful campaign to resist discovery and mislead the court. The court determined that lesser sanctions would not be sufficient and that the default likely would not have been vacated if the defendants had honestly disclosed their willingness or ability to participate in discovery.

Motion for reconsideration

The defendants and Litvak moved to reconsider the November 15 order. Reconsideration is an extraordinary remedy generally available only for an intervening change in controlling law, newly available evidence, clear error, or manifest injustice. The court stated that the motion could not be used to relitigate issues already decided.

The court rejected the defendants’ argument that they had made only one employment misrepresentation. It concluded that later statements about their relationship with Valtron and their work status would have led Google to believe that they were still employed there. The court also rejected the explanations for the settlement demand, reasoning that the defendants could not simultaneously claim that the private keys were available only through a settlement and that their offer to provide them was not conditioned on payment.

The court further rejected Litvak’s arguments that he had not misrepresented the defendants’ ability to participate in discovery and had not acted in bad faith. The court pointed to his handling of the defendants’ employment status, the proposed device exchange, statements about the defendants’ business activities, and participation in the settlement demand. It also concluded that Litvak had received sufficient opportunities to explain his evidence-preservation efforts and that a hearing was unnecessary.

Ruling and effect

The court denied the defendants’ and Litvak’s November 28, 2022 motion for reconsideration. The earlier default judgments and monetary sanctions therefore remained in place. The court stated that the sanctions were intended to compensate Google for harm caused by the misconduct and were payable to Google rather than to the court. It directed that the parties have an opportunity to resolve the amount of sanctions through settlement discussions, with further briefing available if necessary.