Quote of the Day - Use your enemy's hand to catch a snake.
Citations have been in UMG Recordings, Inc. v. Sinnott (subscription required to view), and Ellison v. AOL, just to name two.
The premise of the Fonavisa v. Cherry Auction case was that swap meet owners were knowingly allowing vendors to sell unauthorized copies of Fonavisa's music. Fonavisa had conducted several sting operations and purchased copies of the unauthorized music from vendors at the swap meet.
Fonavisa next requested the swap meet owners to terminate their relationship with the offending vendors. Cherry Auction elected not to, and we sued and won. It wasn't much of a stretch for the Ninth Circuit Court of Appeals to then decide that Napster, the online music file swapping service, was doing the same thing. Now, Napster operates legally, paying royalties on the songs that are swapped/purchased.
The Fonavisa case has gone much further than we originally anticipated.