Rearden LLC et al v. The Walt Disney Company et al, No. 4:2017cv04006 - Document 584 (N.D. Cal. 2023)
Court Description: ORDER GRANTING-IN-PART AND DENYING-IN-PART DEFENDANT'S MOTION IN LIMINE NO. 1 by Judge Jon S. Tigar granting in part and denying in part 488 Motion in Limine.(mll, COURT STAFF) (Filed on 11/7/2023)
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 REARDEN LLC, et al., 7 Plaintiffs, 8 v. 9 THE WALT DISNEY COMPANY, et al., 10 Defendants. 11 United States District Court Northern District of California Case No. 17-cv-04006-JST ORDER GRANTING-IN-PART AND DENYING-IN-PART DEFENDANT'S MOTION IN LIMINE NO. 1 Re: ECF No. 487 12 13 Before the Court is Defendants The Walt Disney Company; Walt Disney Motion Pictures 14 Group, Inc.; Walt Disney Pictures; Buena Vista Home Entertainment, Inc.; Marvel Studios LLC; 15 Mandeville Films, Inc.; Infinity Productions LLC; and Assembled Productions II LLC’s 16 (collectively, “Disney”) Motion in Limine No. 1. Disney seeks an order precluding Plaintiffs 17 Rearden LLC and MOVA LLC (collectively, “Rearden”) from introducing evidence of or 18 argument regarding the trial court’s preliminary injunction order and statement of decision or the 19 Ninth Circuit affirmance of the Court’s judgment. See Shenzhenshi Haitiecheng Sci. and Tech. 20 Co., LTD. v. Rearden LLC, Case No. 4:15-cv-00797-JST; Shenzhenshi Haitiecheng Sci. & Tech. 21 Co. v. Rearden, LLC, 823 F. App’x 455, 457 (9th Cir. 2020) (collectively “SHST Documents”). 22 The Court will grant the motion in part and deny it in part. 23 I. DISCUSSION 24 A. SHST Statement of Decision and Ninth Circuit Affirmance 25 Disney first objects that the SHST Documents are hearsay. “A prior judgment is . . . 26 hearsay to the extent that it is offered to prove the truth of the matters asserted in the judgment. A 27 prior judgment is not hearsay, however, to the extent that it is offered as legally operative verbal 28 conduct that determined the rights and duties of the parties.” United States v. Boulware, 384 F.3d 1 794, 806 (9th Cir. 2004).1 Moreover, even if the documents were hearsay, the Court would still 2 find them admissible because they affected an interest in property by declaring Rearden the owner 3 the MOVA Contour assets. Thus, they are admissible pursuant to Rule 803(14)2 as records of 4 documents affecting property, and Rule 803(15) as statements in documents affecting an interest 5 in property. See Boulware, 384 F.3d at 807. For these reasons, Disney’s hearsay objection is 6 overruled. However, that does not end the Court’s inquiry as to whether the SHST Documents are United States District Court Northern District of California 7 8 admissible. That is because “even where evidence is relevant and admissible, the court may 9 nonetheless exclude it when ‘its probative value is substantially outweighed by a danger of one or 10 more of the following: unfair prejudice, confusing the issues, misleading the jury, undue delay, 11 wasting time, or needlessly presenting cumulative evidence.’” Wesco Ins. Co. v. Smart Indus. 12 Corp., 469 F. Supp. 3d 1003, 1008 (D. Nev. 2020) (quoting Fed. R. Evid. 403). On that question, the parties cite competing authority. Rearden asks the Court to follow 13 14 Boulware, supra, and allow the evidence to be admitted, and Disney argues that the Court should 15 follow the Ninth Circuit’s later decision in Engquist v. Oregon Dept. of Agriculture, 478 F.3d 985 16 (9th Cir. 2007). In Boulware, the defendant Boulware appealed a conviction of tax fraud on the grounds 17 18 that the district court had improperly excluded from evidence the judgment in a prior case 19 involving Boulware’s company, HIE, and his girlfriend, Lee. 384 F.3d at 801-03. In that case, 20 HIE had prevailed against Lee as to the ownership of certain assets that HIE had transferred to 21 Lee, with the jury and judge finding that the assets were not gifts to Lee but rather property of HIE 22 to be held in trust by Lee. Id. at 802. Boulware argued, and the Ninth Circuit ultimately agreed, 23 that the prior judgment was relevant to the question of whether the assets Boulware transferred 24 were his personal assets or those of HIE (and therefore not taxable to him personally). The Ninth 25 26 27 28 The Boulware court also noted that “a previous judgment is admissible under Rule 803(14) to show the ownership of assets.” Id. Ultimately, however, it found that because the judgment was was being offered for “a nonhearsay purpose, [the court saw] no need to resort to the hearsay exception set forth in Rule 803(14).” Id. 1 2 All references are to the Federal Rules of Evidence unless otherwise stated. 2 1 Circuit found that the fact “[t]hat he pursued a successful litigation against Lee to force her to 2 return the monies to HIE has some tendency to make it more likely that he gave the monies to her 3 to hold in trust” and “[a]t a minimum, the state court’s finding that HIE owned the money in 1997 4 was relevant to show that HIE had owned the money all along and to rebut the government’s 5 suggestions that Boulware had concocted the whole ‘Lee as trustee’ story to defend himself in the 6 criminal prosecution.” Id. at 805, 808. As to prejudice, the Boulware court found that “[a]ny 7 danger that the jury would have given undue weight to the state court judgment could have been 8 dealt with by a cautionary instruction.” Id. at 808. United States District Court Northern District of California 9 In Engquist, by contrast, the Ninth Circuit found the district court’s exclusion of a prior 10 verdict was not an abuse of discretion. There, the plaintiff Engquist had filed an employment 11 discrimination claim against her prior employer and sought to admit into evidence a prior verdict 12 obtained by another employee, Corristan, against the same employer for employment 13 discrimination. Engquist, 478 F.3d at 1008-09. The court found that while the prior verdict had 14 some probative value as to the defendant having “some tendency for discriminatory behavior,” this 15 relevance was outweighed by the risk of prejudice. Id. at 1009. The Engquist court worried there 16 was a substantial risk that the “jury would import the whole verdict of liability from the prior 17 proceeding.” Id. at 1010. The court also discounted the probative value of the prior verdict, given 18 that all the evidence and testimony from the prior lawsuit had already been admitted, and so the 19 only question was whether the additional probative value of the prior verdict outweighed the 20 substantial risk of prejudice—which it did not. Id. 21 The Court finds that Boulware is the more analogous case. In Boulware, the prior verdict 22 finding that the assets transferred to Lee were not a gift and in fact owned by HIE was directly 23 probative as to the question of whether those assets were the property of Boulware personally or of 24 HIE, while the probative value of the prior judgment in Engquist was only that the defendant may 25 have “some tendency for discriminatory behavior.” Compare Boulware, 384 F.3d at 805, with 26 Engquist, 478 F.3d at 1009. Thus, the primary motivation to admit the prior judgment as 27 materially probative evidence was much weaker in Engquist. As in Boulware, the fact that 28 Rearden “pursued a successful litigation against [SHST] to force [it] to return the [MOVA 3 United States District Court Northern District of California 1 Contour assets] to [Rearden] has some tendency to make it more likely” that it owned the MOVA 2 Contour assets. Boulware, 384 F.3d at 805. 3 The Court does find persuasive one particular point from Engquist, which is that court’s 4 finding that the probative value of the prior judgment itself was minimal in light of the fact that 5 “testimony and evidence from the Corristan trial, including Corristan’s own testimony, was 6 presented to the jury in [the Engquist] case.” Engquist, 478 F.3d at 1010. Here too, the relevant 7 testimony and evidence from the SHST litigation can be presented to the jury, either through live 8 testimony or through designations of prior testimony. Also, admitting the language of the trial 9 court’s statement of decision and the Ninth Circuit’s memorandum disposition might confuse the 10 jury. Finally, both documents contain analyses of the facts and judgments about the weight of the 11 evidence. If presented with these documents, the jury may be tempted to adopt the trial court or 12 the Ninth Circuit’s view of the facts instead of coming to their own conclusions. Weighing these considerations, the Court concludes that admitting the fact of the SHST 13 14 statement of decision, including its ultimate conclusion regarding ownership, and the fact of the 15 Ninth Circuit’s affirmance—but not the actual documents themselves—strikes the right balance. 16 The parties shall meet and confer on how to present that information to the jury—by stipulation, 17 instruction, or otherwise—and notify the Court when they either have reached agreement or 18 impasse. 19 B. 20 The Court grants Disney’s motion to exclude the credibility determinations from the SHST 21 SHST Credibility Determinations litigation as unopposed. 22 C. SHST Preliminary Injunction Order 23 Disney moves to exclude the text of the trial court’s preliminary injunction order in the 24 SHST litigation pursuant to Rules 402 and 403. ECF No. 488 at 6.3 Rearden responds that the 25 preliminary injunction order is admissible to prove that “Disney was on notice that the 26 SHST/VGH ownership claims [in the MOVA Assets] were not reliable.” ECF No. 509 at 5. 27 28 3 The parties agree that the fact the court issued a preliminary injunction is admissible. Id.; ECF No. ECF No. 509 at 5–6. 4 1 Specifically, Rearden argues that merely informing the jury of the fact a preliminary injunction 2 issued “leaves out the VGH and SHST ‘badges of fraud’ findings that cast doubt on their 3 ownership claims.” Following summary judgment, the only remaining claim in this case is vicarious liability United States District Court Northern District of California 4 5 for copyright infringement. ECF No. 555. “A defendant is vicariously liable for copyright 6 infringement (1) by profiting from direct infringement while (2) declining to exercise a right to 7 stop or limit it.” Kevin Barry Fine Art Assocs. v. Ken Gangbar Studio, Inc., 391 F. Supp. 3d 959, 8 968–69 (N.D. Cal. 2019) (citations and quotation omitted). “The second prong, which the Ninth 9 Circuit refers to as the ‘control’ element, requires that the defendant ‘ha[d] both a legal right to 10 stop or limit the directly infringing conduct, as well as the practical ability to do so.’” Id. at 969 11 (quoting Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1173 (9th Cir. 2007)). The preliminary injunction order did not discuss these elements. It also did not discuss, 12 13 much less determine, the question of Rearden’s ownership. It addressed only Rearden’s likelihood 14 of showing a fraudulent transfer and the balance of harms. Placing the language of the 15 preliminary injunction order before the jury risks jury confusion and the undue consumption of 16 time. The Court will therefore adopt Disney’s suggestion that it inform the jury of the fact that, in 17 the same SHST litigation identified above, the court issued a preliminary injunction on June 17, 18 2016, ordering DD3 to stop using MOVA. 19 CONCLUSION 20 For the foregoing reasons, the Court will (1) admit the fact of the SHST statement of 21 decision, including its ultimate conclusion regarding ownership, and the fact of the Ninth Circuit’s 22 affirmance, but not the documents themselves; (2) exclude the credibility determinations from the 23 SHST litigation; and (3) inform the jury of the fact that the court in the SHST lawsuit issued a 24 /// 25 /// 26 /// 27 /// 28 /// 5 1 preliminary injunction on June 17, 2016, ordering DD3 to stop using MOVA, but exclude the 2 actual order. 3 4 5 6 IT IS SO ORDERED. Dated: November 7, 2023 ______________________________________ JON S. TIGAR United States District Judge 7 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6
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