Huh? I don't get it.
Couldn't they have done this within the law? If they legally obtained the copyright, and used a torrent application to find out who wanted it, what's illegal about that? It's not that your torrent application goes looking for just anything, you'd have to tell it to download some nasty '70s german scheisse porno.
If they would have done this part different, and disclosed their financial interests, would it be the same situation?
"They would then file copyright lawsuits to obtain personal information about those downloaded their hardcore flicks using subpoenas obtained from courts without any disclosure of their financial interest in the lawsuits."
Let's say I'm the owner/copyright holder of the XXX-rated title "bambi and the teenager covered in maple syrup". I've found out the information about a couple of people who want to download this piece of filth without paying me. We want to settle "out of court for an undisclosed sum". Isn't this the same?