An important note here, is that if you don't have a lawyer, people can threaten to sue you for anything. In this case, he had no lawyer, he had no legal counsel at all.
Granted, part of his legal counsel would be to determine whether or not what he was doing was legal or not. Obviously, he didn't want to test that out in front of a judge (who could blame him?), or against the RIAA's well paid lawyers.
But if you are going to build a business, even on what you believe is on firm legal grounds... you should have a legal team ready to back you up. Anyone can threaten you with anything in the US due to how tort law works. Only if you are willing to have your cases tested in actual courts will you have any protection at all.
Granted, part of his legal counsel would be to determine whether or not what he was doing was legal or not. Obviously, he didn't want to test that out in front of a judge (who could blame him?), or against the RIAA's well paid lawyers.
But if you are going to build a business, even on what you believe is on firm legal grounds... you should have a legal team ready to back you up. Anyone can threaten you with anything in the US due to how tort law works. Only if you are willing to have your cases tested in actual courts will you have any protection at all.