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TorrentSpy was taken to court by the Motion Picture Association of America.
A judge made a default ruling in favour of the MPAA after she said the site's operators had tampered with evidence.
The site had ignored an order to retain server logs and the unique online addresses of computers which traded files using the BitTorrent program.
The ruling could have personal privacy implications because the information TorrentSpy had been told to retain was held in Random Access Memory of computers.
Defendants Justin Bunnell, Forrest Parker, Wes Parker and Valence Media originally had argued that its servers were located in the Netherlands and so were protected by Dutch law from having to turn over server logs.
'Obstreperous' conduct
The judge then asked for information from the Ram in their computers but the defendants failed in their attempt to argue the data was temporary and therefore could not be retained.
The defendants' conduct was "obstreperous," Judge Florence-Marie Cooper wrote in her decision.
"They have engaged in widespread and systematic efforts to destroy evidence and have provided false testimony under oath in a effort to hide evidence of such destruction.
"A substantial number of items of evidence have been destroyed," she wrote. "Defendants were on notice that this information would be of importance in this case."
TorrentSpy's lawyer Ira Rothken said his clients had concerns about protecting users' privacy.
TorrentSpy is expected to appeal Judge Cooper's decision.
A ruling on damages will happen at a later date.
The MPAA, which filed the case against TorrentSpy in February 2006, welcomed the ruling.
"The court's decision... sends a potent message to future defendants that this egregious behaviour will not be tolerated by the judicial system," John Malcolm, the MPAA's executive vice president and director of worldwide anti-piracy operations, said in a statement.
"The sole purpose of TorrentSpy and sites like it is to facilitate and promote the unlawful dissemination of copyrighted content. TorrentSpy is a one-stop shop for copyright infringement."Murky world Epic battle Delays, delays
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