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When this story first popped up a few weeks ago they said that the people filing the lawsuits got a lot of support from various ISPs who gave the information over to the company. I am assuming that your ISP could see anything you do and any site you visit unless you know how spoof and do a lot of fancy things to hide your tracks (which most people don't).
I'm guessing they based their suits off of those records and took the ones that gave them the most solid info. When the story first hit they said the number of suits could reach as high a 50,000 and they ended up with only 10% of that so I would guess they have pretty solid evidence against these people.
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