UMG Recordings, Inc. et al v. Veoh Networks, Inc. et al, No. 2:2007cv05744 - Document 238 (C.D. Cal. 2008)
Court Description: NOTICE OF MOTION AND MOTION to Sever And Stay Or, In the Alternative, For a Status Conference filed by Defendants Shelter Capital Partners LLC, Shelter Venture Fund LP. Motion set for hearing on 12/22/2008 at 10:00 AM before Judge A. Howard Matz. (Attachments: # 1 Declaration of Robert Badal in Support of Investor Defendants Motion to Sever and Stay, # 2 Exhibit to Declaration of Robert Badal in Support of Investor Defendants' Motion to Sever and Stay, # 3 Proposed Order Granting Investor Defendants' Motion to Sever and Stay Or, In The Alternative, For A Status Conference)(Badal, Robert)
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UMG Recordings, Inc. et al v. Veoh Networks, Inc. et al Doc. 238 1 Robert G. Badal (Bar No. 81313) 2 Robert.Badal@WilmerHale.com WILMER CUTLER PICKERING HALE AND DORR LLP 3 350 South Grand Avenue, Suite 2100 4 Los Angeles, CA 90071 Telephone: +1 (213) 443-5300 5 Facsimile: +1 (213) 443-5400 6 7 8 9 10 11 Annette L. Hurst (Bar No. 148738) ahurst@orrick.com ORRICK HERRINGTON & SUTCLIFFE LLP 405 Howard Street San Francisco, CA 94105 Telephone: +1 (415) 773-5700 Facsimile: +1 (415) 773-5759 Attorneys for Defendants 12 SHELTER CAPITAL PARTNERS, LLC and 13 SHELTER VENTURE FUND, L.P. 14 [OTHER COUNSEL LISTED ON SIGNATURE PAGES] 15 UNITED STATES DISTRICT COURT 16 CENTRAL DISTRICT OF CALIFORNIA 17 WESTERN DIVISION 18 19 UMG RECORDINGS INC. et al., Plaintiffs, 20 21 v. 22 23 Case No. CV07-5744 AHM (AJWx) INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR, IN THE ALTERNATIVE. FOR A STATUS CONFERENCE VEOH NETWORKS, INC. et al., [Fed. R. Civ. P. 21 and 42(b)] Defendants. 24 26 Date: Time: Trial Date: 27 The Honorable A. Howard Matz 25 December 22, 2008 10:00 a.m. April 21, 2009 28 INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR, IN THE ALTERNATIVE, FOR A STATUS CONFERENCE CV07-5744 AHM (AJWX) US1DOCS 6908185v1 Dockets.Justia.com 1 TABLE OF CONTENTS 2 Page 3 4 NOTICE OF MOTION AND MOTION ..................................................................... 1 5 MEMORANDUM OF POINTS AND AUTHORITIES ............................................. 1 6 7 INTRODUCTION AND SUMMARY OF ARGUMENT ........................................... 1 STATEMENT OF FACTS............................................................................................ 3 8 9 I. 10 II. PROCEDURAL BACKGROUND......................................................................3 OVERVIEW OF THE FAC ................................................................................ 8 11 ARGUMENT ................................................................................................................ 9 12 I. 13 14 15 THE COURT SHOULD GRANT THIS MOTION TO SEVER THE CLAIMS AGAINST INVESTOR DEFENDANTS AND TO STAY THE SEVERED ACTION UNTIL THE MAIN ACTION BETWEEN PLAINTIFFS AND VEOH HAS BEEN RESOLVED ........................................................................9 A. THE COURT HAS BROAD DISCRETION TO SEVER THE CLAIMS AGAINST INVESTOR DEFENDANTS AND STAY THE SEVERED ACTION PENDING RESOLUTION OF MAIN ACTION BETWEEN PLAINTIFFS AND VEOH ......................................................................9 B. THERE ARE COMPELLING REASONS HERE TO GRANT A SEVERANCE AND STAY …..………………………………..……...12 16 17 18 19 20 21 1. THE INVESTOR DEFENDANTS WILL BE SEVERELY PREJUDICED WITHOUT SEVERANCE.....................................12 22 2. THE ISSUES SOUGHT TO BE TRIED SEPARATELY ARE MATERIALLY DIFFERENT ........................................................13 23 3. 24 25 C. 26 SEVERANCE AND A STAY OF THE SEVERED ACTION PROMOTES CONVENIENCE, EXPEDITION OF THIS ACTION, AND JUDICIAL ECONOMY.......................................14 GRANTING SEVERANCE AND A STAY OF THE SEVERED ACTION WILL NOT PREJUDICE OR HARM PLAINTIFFS............15 27 28 i INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 D. 2 SEVERANCE IS THE RIGHT APPROACH BECAUSE VEOH SHOULD NOT BE PREJUDICED BY PLAINTIFFS’ DELAYING TACTICS ................................................................................................15 3 4 5 6 7 II. IN THE ALTERNATIVE, THE COURT SHOULD ORDER AN IMMEDIATE STATUS CONFERENCE BETWEEN PLAINITFFS AND THE INVESTOR DEFENDANTS TO DISCUSS THE SCHEDULE AS IT APPLIES TO PLAINTIFFS’ CLAIMS AGAINST THE INVESTOR DEFENDANTS .................................................................................................16 CONCLUSION…………………………………………….………………………..17 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ii INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 TABLE OF AUTHORITIES 2 Page CASES 3 4 Butler v. Judge of U.S.D.C. for N.D of Cal., 116 F.2 1013(9th Cir. 1941)........................................................................................ 11 5 CMAX, Inc. v. Hall, 300 F.2d 265 (9th Cir. 1962)................................................................................... 2, 11 6 7 eBay, Inc. v. MercExchange LLC, 547 U.S. 388, 126 S.Ct. 1837, 164 L.E.2d 641 (2006) ............................................... 15 8 Equal Rights Center v. Equity Residential, 483 F.Supp.2d 480 (D.Md. 2007) ..................................................................... 1, 10, 13 9 10 Figueroa v. Gates, 207 F.Supp.2d 1085 (C.D.Cal. 2002).......................................................................... 14 11 In re High Fructose Corn Syrup Antitrust Litigation, 293 F. Supp.2d 854 (C.D I11. 2003)........................................................................... 10 12 13 Landis v. N. Am. Co. , 299 U.S. 248, 57 S.Ct. 163, 81 L.Ed. 153 (1963) ....................................................... 11 14 Mediterranean Enters., Inc. v. Ssangyong Corp., 15 708 F.2 1458 (9th Cir. 1983)....................................................................................... 11 16 Rodin Properties-Shore Mall, N.V. v. Cushman & Wakefield of Pennsylvania, Inc., 49 F.Supp.2d 709 (D.N.J. 1999) ......................................................................... 1, 9, 10 17 THK America, Inc. v. NSK Co., 18 151 F.R.D. 625 (N.D. I11. 1993) ............................................................................ 2, 10 19 U.S. v. IBM, 60 F.R.D. 654 (S.D.N.Y 1973) ................................................................................... 10 20 Wynn v. NBC,, 21 234 F.Supp.2d 1067(C.D. Cal. 2002)...................................................................... 9, 10 22 STATUTES 23 24 Federal Rule Civil Procedure 21 ............................................................................... 1, 9, 10 Federal Rule Civil Procedure 42(b)........................................................................... 1, 9, 10 25 26 27 28 iii INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 NOTICE OF MOTION AND MOTION 2 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE THAT on December 22, 20081 at 10:00 a.m., or 3 4 as soon thereafter as the matter may be heard, in the above-entitled Court located at 5 255 East Temple Street, Los Angeles, California, Defendants Shelter Capital 6 Partners, LLC, Shelter Venture Fund, L.P., Spark Capital, LLC, Spark Capital, L.P. 7 and The Tornante Company, LLC (the “Investor Defendants”), by and through their 8 counsel of record, will and hereby do move pursuant to Federal Rules of Civil 9 Procedure 21 and 42(b) to sever and stay the action as to Investor Defendants until 10 the action against Defendant Veoh Networks, Inc. has been resolved or, in the 11 alternative, for the Court to schedule a status conference between Investor 12 Defendants and Plaintiffs UMG Recordings, Inc., Universal Music Corp., Songs of 13 Universal, Inc., Universal-Polygram International Publishing, Inc., Rondor Music 14 International, Inc., Universal Music-MGB NA LLC, Universal Music-Z Tunes LLC, 15 and Universal Music-MBG Music Publishing Ltd. (collectively, “Plaintiffs”). 16 This Motion is made following the conference of counsel pursuant to Local 17 Rule 7-3, which took place on November 21, 24, and 25. (See Declaration of Robert 18 G. Badal ¶¶ 15-19& Exs. M-Q.) 19 This Motion is based on this Notice of Motion and Motion, the Memorandum 20 of Points and Authorities following herein, the Declaration of Robert G. Badal (filed 21 herewith), the Declaration of Anjuli McReynolds in Support of Plaintiffs’ Motion for 22 Leave to Amend (previously filed at Docket # 62), the Declaration of Jennifer 23 Golinveaux in Support of Veoh’s Opposition to the Motion for Leave to Amend 24 (previously filed at Docket # 64), the Declaration of Annette L. Hurst in Support of 25 1 Investors Defendants intend to file an ex parte application requesting an order shortening time to hear the Motion. In light of the Thanksgiving holidays, Investor 27 Defendants are providing Plaintiffs with a courtesy copy of the ex parte papers on November 26, 2008, but will wait to file the papers until Monday, December 1, 28 1 2, 2008. making any response due Tuesday, December 26 INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 Ex Parte Application by Investor Defendants to Continue Hearing and Briefing 2 Schedule of Plaintiffs’ Motion for Summary Judgment (previously filed at Docket # 3 135), the Declaration of Annette L. Hurst in Support of Investor Defendants’ Motion 4 to Dismiss the FAC (previously filed at Docket # 176), the Declaration of Sean 5 Sullivan in Support of Investor Defendants’ Motion to Dismiss First Amended 6 Complaint (previously filed at Docket # 177), the Declaration of Rebecca Lawlor 7 Calkins in Support of Veoh’s Ex Parte Application for an Order Compelling 8 Plaintiffs’ Compliance with Prior Court Order to Provide Supplemental Responses 9 and Production of Documents (previously filed at Docket # 189-2), the Declaration of 10 Brian Ledahl in Support of UMG’s Ex Parte Application for Order Requiring Veoh 11 to Retain Evidence (previously filed at Docket # 196), and all other papers and 12 pleadings on file in this action and such additional evidence and argument as may be 13 offered prior to or at the time of hearing. 14 15 November 26, 2008 Respectfully submitted, 16 WILMER CUTLER HALE PICKERING & DORR LLP 17 18 ORRICK HERRINGTON & SUTCLIFFE LLP 19 20 By /s/ Robert G. Badal ROBERT G. BADAL 21 22 Attorneys for Defendants SHELTER CAPITAL PARTNERS, LLC and SHELTER VENTURE FUND, L.P. 23 24 25 26 27 28 2 INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 November 26, 2008 2 Respectfully submitted, KULIK, GOTTESMAN, MOUTON & SIEGEL, LLP 3 4 5 By /s/ Alisa S. Edelson GLEN L. KULIK ALISA S. EDELSON 6 7 Attorneys for Defendant THE TORNANTE COMPANY LLC 8 9 10 November 26, 2008 11 Respectfully submitted, WILMER CUTLER HALE PICKERING AND DORR LLP 12 13 14 By /s/ Maria Vento MARIA VENTO 15 Attorneys for Defendants SPARK CAPITAL PARTNERS, LLC AND SPARK CAPITAL, L.P. 16 17 18 19 20 21 22 23 24 25 26 27 28 3 INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 MEMORANDUM OF POINTS AND AUTHORITIES 2 INTRODUCTION AND SUMMARY OF ARGUMENT 3 Pursuant to Federal Rules of Civil Procedure 21 and 42(b), this Court should 4 sever the claims of the First Amended Complaint (“FAC”) as they relate to the 5 Investor Defendants and stay the resulting action until the action between Plaintiffs 6 and Defendant Veoh Networks, Inc. (“Veoh”) has been resolved. Severance and a 7 stay are both necessary and appropriate because Plaintiffs waited more than a year to 8 add Defendants Shelter Capital Partners, LLC, Shelter Venture Fund, L.P., Spark 9 Capital, LLC, Spark Capital, L.P. and The Tornante Company, LLC (“Investor 10 Defendants”) to this lawsuit, and since adding the Investor Defendants to the case 11 Plaintiffs have refused to provide them with copies of discovery – both discovery 12 served prior to and subsequent to the filing of the FAC – and have refused the 13 Investor Defendants’ requests to meet and confer to establish a deposition and 14 discovery schedule which takes into account the procedural status of this case as it 15 relates to the Investor Defendants. In particular, the close of fact discovery deadline 16 is rapidly approaching and based upon the current schedule it is likely that – under 17 the current schedule – fact discovery will end before the time has come for Investor 18 Defendants to answer the Complaint, before they can assert and perfect their 19 affirmative defenses, before they have received and had the opportunity to review the 20 discovery served thus far, and before they have had a meaningful opportunity to take 21 additional discovery. 22 While there are no specific factors that must be considered when determining 23 whether to grant a motion to sever, courts frequently look to what prejudice will 24 result to the moving party if the motion is denied, whether the issues to be tried are 25 materially different, whether severance will promote convenience, expedition of the 26 action and judicial economy, and what prejudice will result to the non-moving party 27 if the motion is granted. See Equal Rights Center v. Equity Residential, 483 Mall, N.V. v. Cushman & 28 F.Supp.2d 482, 489 (D.Md. 2007); Rodin Properties-Shore 1 INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 Wakefield of Pennsylvania, Inc., 49 F.Supp.2d 709 (D.N.J. 1999); THK America, Inc. 2 v. NSK Co., 151 F.R.D. 625, 632 (N.D. Ill. 1993). The Ninth Circuit has confirmed 3 that similar factors are to be considered in determining whether to grant a stay. See 4 CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962 (factors considered in granting 5 a stay are (a) the potential harm that may result from granting a stay; (b) the hardship 6 and inequity to the moving party if the stay is denied; and (c) the conservation of 7 judicial resources by granting the stay (i.e., to avoid duplicative litigation).) 8 Each of these factors counsels in favor of severance and stay of the severed 9 action. In particular, in light of the rapidly approaching close of fact discovery 10 deadline, the pending motion to dismiss, and Plaintiffs’ inexplicable refusal to 11 include the Investor Defendants in discovery and engage in any meaningful meet and 12 confer regarding that ongoing discovery, severe prejudice will result to the Investor 13 Defendants if the motion to sever and stay is not granted. Moreover, the issues to be 14 tried separately are materially different insofar as the Investor Defendants cannot be 15 liable for indirect infringement unless and until Plaintiffs first prove that Veoh or its 16 users have directly infringed. Likewise, severance and a stay will promote 17 convenience, expedition, and judicial economy, as it will result in the threshold 18 claims against Veoh being tried first. The Investor Defendants understand that 19 Plaintiffs and Veoh are apparently prepared to meet the deadlines set by the Court 20 when they were the only parties in the case, and thus, there is no reason to take that 21 Plaintiffs/Veoh action off its present track. If Veoh is successful in its defense, then 22 there will be no need for discovery or a trial regarding Plaintiffs claims against the 23 Investor Defendants. If Veoh is not successful, then the parties can proceed to 24 address the separate issues that are raised by the claims and defenses arising from 25 Plaintiffs’ claims against the Investor Defendants. Plaintiffs will not be prejudiced 26 by severance and a stay, as severance and a stay will result in the case proceeding in 27 a more efficient manner, preserving both the parties’ resources and the Court’s 28 resources. 2 INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 STATEMENT OF FACTS 2 I. PROCEDURAL BACKGROUND. 3 On September 4, 2007, Plaintiffs filed this action against Defendant Veoh 4 Networks, Inc. (“Veoh”) for direct copyright infringement, contributory copyright 5 infringement, vicarious copyright infringement, and inducement of copyright 6 infringement. (Complaint (Docket # 1) (“Compl.”).) Plaintiffs alleged Veoh 7 infringed their copyrighted works by making such works available through Veoh’s 8 website and software for streaming and downloading. (Compl. ¶¶ 2-4.) 9 The initial complaint also alleged that Veoh’s investors, including Shelter 10 Capital LLC, Spark Capital LLC, and The Tornante Company, LLC, benefited from 11 Veoh’s infringing activities. (Id. ¶ 14.) Implying that more facts would be required 12 to assert claims against the investors, Plaintiffs purported to reserve their right to add 13 as defendants Veoh’s investors “once the full nature and extent of their contribution 14 to, and facilitation of, the infringing conduct taking place on Veoh is known.” (Id.) 15 Approximately six weeks after the initial complaint was filed, Plaintiffs sent a letter 16 to each of the Investor Defendants informing them of this lawsuit and their asserted 17 potential liability. (Declaration of Anjuli McReynolds in Support of Motion for 18 Leave to Amend ¶ 2 & Ex. 1 (Docket # 62) (“McReynolds Decl.”).) Four months 19 later in February 2008, Plaintiffs served wide-ranging document subpoenas upon the 20 Investor Defendants. (Id. ¶ 3 & Ex. 2; see Declaration of Sean Sullivan in Support of 21 Investor Defendants’ Motion to Dismiss First Amended Complaint (“FAC”) (Docket 22 # 177) (“Sullivan Decl.”) ¶ 2 & Ex. A.) Each of the Investor Defendants served a 23 timely response to the subpoenas in early April 2008. (Declaration of Jennifer 24 Golinveaux in support of Veoh’s Opposition to the Motion for Leave to Amend, Ex. 25 B (Docket # 64) (“Golinveaux Decl.”).) 26 In March 2008, Plaintiffs represented to the Court in the Joint Rule 16(b) 27 Report, and at the Scheduling Conference, that Plaintiffs may seek to amend the through discovery. (McReynolds 28 Complaint depending upon facts they developed 3 INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 Decl. ¶¶ 4, 5 & Ex. 3 at 75, Ex. 4 at 92.) On March 25, 2008, the Court scheduled 2 trial for April 12, 2009 and the discovery cut-off date for January 12, 2009. (Order 3 Setting Case Schedule (Docket #41).) Of course, the Investor Defendants were not 4 involved in the preparation of the Joint Report or the Scheduling Conference. 5 After the Investor Defendants produced non-confidential documents, and 6 further agreed to produce confidential documents pursuant to the entry of a protective 7 order, Plaintiffs sent letters on May 13, 2008 to each of the Investor Defendants 8 stating that Plaintiffs may seek to add them as defendants with or without additional 9 significant discovery. (Golinveaux Decl. ¶¶ 3, 4 & Exs. B, C.) 10 Within days of the Court’s entry of the Interim Protective Order on May 20, 11 2008 (Docket # 43), several of the Investor Defendants made substantial productions 12 of confidential documents responsive to the subpoenas. (Golinveaux Decl. ¶ 7.) 13 Other Investor Defendants had offered to make further productions, but Plaintiffs did 14 not bother to take them up on it. (See Sullivan Decl. ¶¶ 10-13.) With a fast 15 approaching deadline to amend, Plaintiffs began serving non-party deposition 16 subpoenas. (Golinveaux Decl. ¶ 8.) When Investor Defendants’ counsel attempted 17 to work with Plaintiffs’ counsel to schedule depositions prior to the deadline to 18 amend, Plaintiffs voluntarily withdrew the deposition notices and did not take a 19 single deposition. (Id. ¶ 9; Sullivan Decl. ¶¶ 10-13.) On the last day set by the Court 20 to amend the complaint, Plaintiffs filed their motion for leave to amend to add the 21 Investor Defendants. (McReynolds Decl. ¶5; Docket # 54.) The Court subsequently 22 granted Plaintiffs’ motion for leave to amend, and Plaintiffs filed their FAC on 23 August 26, 2008 alleging claims for contributory infringement of copyright, vicarious 24 infringement of copyright, and inducing copyright infringement against the Investor 25 Defendants (FAC Counts II-IV). 26 In early September 2008, Investor Defendants filed notices of appearance 27 requesting that copies of pleadings, papers and other documents served by any party 28 in this action also be served on each Investor 4 Defendant. (Notices of Appearances INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 filed on September 4, 8, and 9, 2008 (Docket # 115, 119, 122).) The Investor 2 Defendants promptly notified Plaintiffs on September 5, 2008 of their intent to file a 3 motion to dismiss the FAC’s claims (Counts II-IV) against them. (Declaration of 4 Annette L. Hurst in Support of Investor Defendants’ Motion to Dismiss the FAC, ¶ 2 5 & Ex. A (Docket # 176).) As part of a meet and confer, Plaintiffs requested that 6 Investor Defendants delay filing the motion to dismiss so that the briefing would not 7 overlap with Plaintiffs’ briefing on their motion for summary judgment, which was 8 scheduled for hearing on October 20, 2008. (Declaration of Annette L. Hurst in 9 Support of Ex Parte Application by Investor Defendants to Continue Hearing and 10 Briefing Schedule of Plaintiffs’ Motion for Summary Judgment, ¶ 4 (Docket # 135).) 11 Shortly thereafter, on September 15, 2008, Investor Defendants and Plaintiffs entered 12 into a stipulation extending the time for Investor Defendants to respond to the FAC 13 up to and including October 16, 2008. (Id.) Thus, as agreed, Investor Defendants 14 filed their motion to dismiss the FAC (Docket # 174) on October 16, 2008 with a 15 hearing date of November 10, 2008. The Court took the motion under submission 16 prior to the calendared hearing date and has not yet ruled on it. In the meantime, on October 14, 2008, without consulting or formally serving 17 18 Investor Defendants with proper and reasonable notice, Plaintiffs notified Defendants 19 by letter that they would be taking the deposition of third party Time Warner in New 20 York on October 28, 2008. (Declaration of Robert Badal filed concurrently herewith 21 (“Badal Decl.”) ¶ 2 & Ex. A.) This letter was the first indication that Investor 22 Defendants received that Plaintiffs had engaged in any further discovery following 2 23 the filing of the FAC . On October 23, 2008, Investor Defendants indicated their 24 2 Although Investor Defendants took the position deposition discovery should be stayed until the Court ruled on the motion to dismiss, Investor Defendants also 26 requested that if the parties disagreed and intended to proceed with depositions than 27 they should provide the Investor Defendants with copies of existing discovery and a reasonable time to review such materials so that they could prepare for and 28 5 (Badal Decl. Exs. B, D, H.) meaningfully participate in any depositions. 25 INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 objection to the deposition going forward in light of the fact that they had not been 2 provided with adequate notice of the deposition, consulted as to the date scheduled, 3 or provided copies of any of the discovery produced by Time Warner, Plaintiffs or 4 Veoh. (Id.) Investor Defendants also requested Plaintiffs and Veoh to promptly 5 provide Investor Defendants with copies of all discovery served to date including 6 copies of discovery requests, responses, deposition transcripts, document 7 productions, and third party discovery (including the documents produced by Time 8 Warner). With just a few exceptions, none of this discovery had been previously 9 provided to Investor Defendants. Thus, to the extent discovery was to be ongoing, 10 the Investor Defendants needed this material so that they could review it and be 11 prepared to participate in depositions, as necessary. (Id. ¶ 3 & Ex. B.) Plaintiffs 12 refused these requests and also demanded Investor Defendants “provide authority for 13 [their] position that defendants are entitled to demand such materials while 14 contending that they are not proper parties to this case.” (Id. ¶ 4 & Ex. C.) 15 On October 29, 2008, the Investor Defendants again requested Plaintiffs to 16 provide copies of discovery materials. (Id. ¶ 5 & Ex. D.) Investor Defendants also 17 requested that Plaintiffs coordinate with the Investor Defendants in an effort to put 18 together a meaningful deposition and discovery schedule that would account for the 19 fact that the Investor Defendants had been added as parties so late in the case, i.e., a 20 schedule that would provide them with an opportunity to review existing discovery 21 so that they could meaningfully participate in discovery going forward. (Id.) 22 Plaintiffs refused these requests and incorrectly stated that Investor Defendants had 23 been served with all discovery since they had “appeared” in the case. (Id. ¶ 6 & Ex. 24 E.) On November 7 and 17, 2008, Investor Defendants renewed their requests for 25 Plaintiffs’ discovery materials and a meeting with Plaintiffs to fashion a reasonable 26 deposition and discovery schedule. (Id. ¶¶ 7, 9 & Exs. F, H.) In response to the 27 November 7 request, Plaintiffs stated they disagreed that Investor Defendants were to explain their rationale at a later 28 entitled to copies of such discovery and promised 6 INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 date. (Id. ¶ 8 & Ex. G.) On November 10, 2008, Veoh notified Investor Defendants 2 that all of its written discovery had been produced to the Investor Defendants and 3 documents would be forthcoming. (Id. ¶ 10 & Ex. I.) Plaintiffs apparently 4 misunderstood Veoh’s production to include Plaintiffs’ documents and informed 5 Investor Defendants on November 19, 2008 that Plaintiffs no longer had to comply 6 with Investor Defendants’ request for copies of discovery as they were produced by 7 Veoh. (Id. ¶ 11 & Ex. J.) Plaintiffs did not address or even reference Investor 8 Defendants’ prior requests for an agreed upon deposition and discovery schedule. 9 Later that same day, Investor Defendants informed Plaintiffs of their mistake (Veoh 10 had only produced its discovery) and continued to insist that Plaintiffs provide the 11 Investor Defendants with copies of the discovery materials as repeatedly requested. 12 (Id. ¶¶ 12, 13 & Exs. K, L.) For the fourth time in approximately three weeks, 13 Investor Defendants requested that Plaintiffs meet and coordinate a deposition and 14 discovery schedule that could realistically reflect their late addition as parties to the 15 case. (Id. ¶ 13 & Ex. L.) And, for the fourth time, Plaintiffs ignored that request. (Id. 16 ¶ 14.) To date and even before Investor Defendants were named in this action, 17 18 significant discovery had taken place without the Investor Defendants. For example, 3 19 Plaintiffs have taken at least one deposition, and produced more than 1.4 million 4 20 pages of documents. In addition, on September 30, 2008, well after the date 21 3 The deposition of Joseph Papa, Veoh’s Vice President, Engineering, and a Rule 30(b)(6) deposition, was taken by Plaintiffs on July 10, 2008. (Declaration of Brian 23 Ledahl in Support of UMG’s Ex Parte Application for Order Requiring Veoh to 24 Retain Evidence (Docket # 196), ¶ 5 & Ex. E (filed under seal on or about October 27, 2008).) 22 25 4 (Declaration of Rebecca Lawlor Calkins in Support of Veoh’s Ex Parte Application for an Order Compelling Plaintiffs’ Compliance with Prior Court Order to Provide 27 Supplemental Responses and Production of Documents (“Calkins Decl.”) (Docket # 189-2), ¶¶ 2 (UMG has produced 1.4 million pages), 3 (UMG produced an additional 28 7 1008 pages on September 30, 2008).) 26 INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 Investor Defendants filed their notices of appearance and executed a stipulation to be 2 bound by the protective order in this action, Plaintiffs produced additional documents 3 without serving copies on Investor Defendants. (Notices of Appearances filed on 4 September 4, 8, and 9, 2008 (Docket # 115, 119, 122); Stipulation for Protective 5 Order filed on September 10, 2008 (Docket # 125); Order Granted said Stipulation 6 entered on September 30, 2008 (Docket # 151); Calkins Decl., ¶ 3; Badal Decl. ¶ 14.) Despite repeated requests, Plaintiffs have failed to provide the Investor 7 8 Defendants with copies of discovery and documents previously produced by them in 9 this action, including Plaintiffs’ own documents and written discovery, and third 10 party discovery including that of Time Warner. (Badal Decl. ¶ 14.) Finally, 11 Plaintiffs have refused Investor Defendants’ four requests to meet and confer to 12 coordinate a deposition and discovery schedule that could account for Plaintiffs 13 adding them to the litigation well after the original schedule in the case was 14 established and so close to the close of fact discovery. (Id.) 15 II. OVERVIEW OF THE FAC 16 The FAC (Counts II-IV) contains claims for contributory infringement of 17 copyright, vicarious infringement of copyright, and inducement of copyright 18 infringement against the Investor Defendants. Paragraphs 4, 5, 16, and 30-32 in the 19 FAC are the only allegations that are specifically directed to the Investor Defendants. 20 These allegations are based on three principal allegations: (1) that these defendants 21 invested in Veoh, (2) that they each obtained the right to designate a person who sat 22 on Veoh’s Board of Directors, and (3) that these Board members collectively 23 exercised their statutorily vested power to manage the affairs of Veoh. (FAC ¶¶ 4, 5, 24 16, 30-32.) 25 Specifically, Plaintiffs allege the Veoh Board of Directors—including 26 designees of Shelter, Spark and Tornante—are alleged to have hired executives, and 27 set company and product direction acting in their roles as board members of Veoh. 28 (Id. ¶¶ 30-32.) Particular product decisions 8 the Veoh Board is alleged to have made INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 include the scope of content to be displayed and whether technical measures would 2 be used to prevent or limit infringing content. (Id. ¶¶ 16, 30-32.) Finally, the Veoh 3 board members are alleged to have held board meetings at one of Investor 4 Defendant’s offices. (Id.) The only distinction made amongst the Investor 5 Defendants was one of timing. Shelter Capital was the first to invest in and obtain 6 the right to designate a board member in 2005, Spark and Tornante are alleged to 7 have followed in 2006. (Id. ¶¶ 30-32.) Notably, Plaintiffs allege Veoh or its users not the Investor Defendants 8 9 purportedly committed direct copyright infringement. (FAC, Count I). That is, if 10 Veoh does not infringe, then the Investor Defendants cannot, as a matter of law, be 11 found liable. Thus, a determination of direct infringement by Veoh is, at a minimum, 12 a predicate for any potential liability of the Investor Defendants. If Plaintiffs are 13 unsuccessful in their action against Veoh, the claims against the Investor Defendants 14 will never be tried. ARGUMENT 15 16 I. THE COURT SHOULD GRANT THIS MOTION TO SEVER THE 17 CLAIMS AGAINST INVESTOR DEFENDANTS AND TO STAY THE 18 SEVERED ACTION UNTIL THE MAIN ACTION BETWEEN 19 PLAINTIFFS AND VEOH HAS BEEN RESOLVED. 20 A. The Court Has Broad Discretion to Sever the Claims against 21 Investor Defendants and Stay the Severed Action Pending 22 Resolution of The Main Action between Plaintiffs and Veoh 23 This Court has broad discretion to sever the claims against Investor Defendants 24 under either Federal Rule of Civil Procedure 21 or 42(b). Wynn v. NBC, 234 25 F.Supp.2d 1067, 1088 (C.D. Cal. 2002) (in granting the motion to sever, the court 26 stated “even if Plaintiffs could somehow meet the minimum legal requirements for 27 joinder, this Court would then exercise its discretion under Rule 20(b), Rule 21 and Mall, N.V. v. Cushman & 28 Rule 42(b) to sever”); see also Rodin Properties-Shore 9 INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 Wakefield of Pennsylvania, Inc., 49 F.Supp.2d 709, 720-21 (D.N.J. 1999). Rule 21 2 permits the court to “sever any claim against a party.” Rule 42(b) permits separate 3 trials of issues or claims “[f]or convenience, to avoid prejudice, or to expedite and 4 economize.” 5 Under Rule 21, the court is not required to determine severance under a 6 particular factor or set of factors. See Rodin Properties-Shore Mall, N.V. v. Cushman 7 & Wakefield of Pennsylvania, Inc., 49 F.Supp.2d 709 (D.N.J. 1999) (stating the court 8 has broad discretion “[w]ith regard to the decision whether to sever a claim, the court 9 is not required to consider anything in particular in reaching its conclusion.”). 10 Factors courts have considered, however, include (1) whether the issues sought to be 11 tried separately are significantly different from one another; (2) whether different 12 witnesses and different documentary proof will be required; (3) whether the party 13 opposing severance will be prejudiced if the claims are severed; (4) whether the party 14 requesting severance will be prejudiced if the claims are not severed; (5) whether the 15 settlement of claims or judicial economy will be facilitated; and (6) whether jury 16 confusion would be prevented if severance is granted. Equal Rights Center v. Equity 17 Residential, 483 F.Supp.2d 482, 489 (D.Md. 2007) (citations omitted); In re High 18 Fructose Corn Syrup Antitrust Litigation, 293 F.Supp.2d 854, 862 (C.D. Ill. 2003); 19 Wynn, 234 F.Supp.2d at 1088. 20 In making a determination to sever pursuant to Rule 42(b), courts will consider 21 similar factors including “(1) convenience; (2) prejudice; (3) expedition; (4) 22 economy; (5) whether the issues sought to be tried separately are significantly 23 different; (6) whether they are triable by jury or the court; (7) whether the discovery 24 has been directed to a single trial of all issues; (8) whether the evidence required for 25 each issue is substantially different; (9) whether one party would gain some unfair 26 advantage from separate trials; (10) whether a single trial of all issues would create 27 the potential for jury bias or confusion; and (11) whether bifurcation would enhance THK America, Inc. v. NSK Co., 28 or reduce the possibility of a pretrial settlement.” 10 INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 151 F.R.D. 625, 632 (N.D. Ill. 1993). However, a court need only find existence of 2 one of the factors enumerated in Rule 42(b) to order a party or claim severed. U.S. v. 3 IBM, 60 F.R.D. 654, 665 (S.D.N.Y. 1973). Finally, the Court also has broad discretion to stay the severed action pending 4 5 the resolution of the main action between Plaintiffs and Veoh. As the United States 6 Supreme Court explained in Landis, federal courts have “the power to stay 7 proceedings is incidental to the power inherent in every court to control the 8 disposition of the causes on its docket with economy of time and effort for itself, for 9 counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254, 57 S.Ct. 163, 81 10 L.Ed. 153 (1936) (recognizing identical parties and issues are not required to grant 11 stay). 12 Furthermore, the Ninth Circuit has emphatically adopted this rule. Butler v. 13 Judge of U.S.D.C. for N.D. of Cal., 116 F.2d 1013, 1016 (9th Cir. 1941) (granting 14 stay where earlier filed action was pending); CMAX, Inc. v. Hall, 300 F.2d 265, 268 15 (9th Cir. 1962) (granting stay); Mediterranean Enters., Inc. v. Ssangyong Corp., 708 16 F.2d 1458, 1465 (9th Cir. 1983) (granting stay) (further stating “‘[t]his rule applies 17 whether the separate proceedings are judicial, administrative, or arbitral in character, 18 and does not require that the issues in such proceedings are necessarily controlling of 19 the action before the court’”) (citation omitted). In CMAX, the Ninth Circuit 20 enumerated several factors to determine whether a stay should be granted. These 21 factors consist of (a) the potential harm that may result from granting a stay, (b) the 22 hardship and inequity to the moving party if the stay is denied, and (c) the 23 conservation of judicial resources by granting the stay (i.e. to avoid duplicative 24 litigation). Id. at 268 (citation omitted). 25 The factors that warrant the severance and a stay overlap. As discussed below, 26 such factors overwhelmingly support Investor Defendants’ motion to be severed from 27 this action and to have the severed action stayed pending resolution of Plaintiffs’ 28 claims against Veoh. 11 INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 B. There Are Compelling Reasons Here To Grant A Severance And 2 Stay. 3 1. Severance. 4 5 The Investor Defendants Will Be Severely Prejudiced Without As set out in the previously filed Motion to Dismiss, the claims against the 6 Investor Defendants cannot be sustained as they find no support in law or fact. If the 7 Court grants the motion to dismiss, then this Motion is moot. On the other hand, if 8 the motion to dismiss is denied, Investor Defendants will be greatly prejudiced if they 9 are forced to proceed on the same pace and in the same action as the main claims 10 against Veoh. The Investor Defendants have not even answered yet and have not yet 11 had the opportunity to consider the scope of affirmative defenses they may wish to 12 present (some of which will undoubtedly differ from those of Veoh), or the scope of 13 any counterclaims that they may wish to pursue. Moreover, on the current schedule, 14 the Investor Defendants will have less than one month to conduct and complete their 15 own discovery before the January 12, 2009 discovery cut-off deadline. And, that is 16 assuming that Plaintiffs immediately provide the Investor Defendants with existing 17 discovery, something they have thus far refused to do, arguing that the Investor 18 Defendants are not “entitled to demand such materials [i.e. copies of existing 19 discovery] while contending that they are not proper parties to this case.” (Badal 20 Decl. ¶ 4 & Ex. C.) 21 In particular, as discussed in great detail above, Plaintiffs have completely 22 refused to cooperate since they sought to add Investor Defendants at the last possible 23 moment by filing the FAC more than one year after commencing this action. There 24 were only two months between the time of the noticed hearing date on the Investor 25 Defendants' Motion to Dismiss of November 10, 2008 and the discovery cut-off date 26 of January 12, 2009. Despite this truncated schedule, Plaintiffs repeatedly refused to 27 provide Investor Defendants with discovery materials—including Plaintiffs’ 1.4 28 million pages of documents, Plaintiffs’ written 12 discovery and responses, and third INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 party discovery responses and documents – while, nonetheless, insisting that the 2 deposition discovery should continue unabated. 3 As a result, Plaintiffs have prevented Investor Defendants from preparing and 4 meaningfully participating in discovery in this action (set to close in less than two 5 months) as well as preparing for trial set to commence April 21, 2009. Moreover, 6 even assuming that the Investor Defendants could meaningfully participate in 7 discovery without the existing discovery materials (which they cannot), Plaintiffs 8 have further thwarted their efforts to participate in this case by refusing each of the 9 Investor Defendants’ four requests to meet and confer regarding a deposition 10 schedule. The Investor Defendants will have no time remaining to pursue 11 independent discovery matters relating to new affirmative defenses or counterclaims. 12 Thus, the Investor Defendants will be greatly and severely prejudiced if this motion 13 is denied, as, even if Plaintiffs provide this discovery tomorrow and finally agree to 14 meet and confer as to a deposition schedule, the Investor Defendants will have little 15 or no time to review the discovery produced thus far, conduct their own discovery, 16 and prepare for trial. Moreover, under the existing schedule, the time to answer may 17 not even come due until after the close of fact discovery. Such a result strongly 18 compels severance and a stay where “a paramount consideration here is the 19 avoidance of prejudice to defendants and the assurance to them of a fair 20 adjudication.” Equal Rights Center, 483 F.Supp.2d at 489. 2. 21 Different. 22 23 The Issues Sought to be Tried Separately Are Materially Under the above authorities, a court may sever the instant claims against 24 Investor Defendants on the ground they are materially different from the claims 25 asserted against Veoh. As discussed in the Statement of Facts Section II, supra, 26 Plaintiffs allege direct copyright infringement (FAC Count I) against Veoh but not 27 against any of the Investor Defendants. Instead, Plaintiffs have only alleged and inducement of copyright 28 contributory infringement, vicarious infringement, 13 INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 infringement against Investor Defendants (FAC Counts II-IV). Before the claims 2 against Investor Defendants can be decided, Veoh must first be found liable for direct 3 infringement. Moreover, involving the claims against the Investor Defendants in the 4 same trial will require additional witnesses, exhibits and evidence that may not be 5 necessary, if no direct infringement claim against Veoh is sustained. The Investor 6 Defendants may well choose to present affirmative defenses, such as a misuse 7 defense, that are not currently being prosecuted by Veoh. Accordingly, the issues of 8 whether Investor Defendants can be found liable for Counts II-IV are sufficiently 9 substantively and procedurally different from the direct infringement claim against 10 Veoh to warrant severance and a stay. 3. 11 Severance and a Stay of the Severed Action Promotes 12 Convenience, Expedition of this Action, and Judicial Economy. 13 Severance and a stay of the severed action as to the Investor Defendants will 14 promote convenience, expedition and judicial economy for several reasons. First, 15 trial against the Investor Defendants may be avoided altogether if Veoh is found not 16 to have committed direct infringement. See Figueroa v. Gates, 207 F.Supp.2d 1085, 17 1101-01 (C.D. Cal. 2002). Second, separate trials and a stay as to the Investor 18 Defendants will also allow the underlying action between Plaintiffs and Veoh to 19 proceed on the schedule that was created when they were the only parties to the case. 20 Third, Plaintiffs will save time and expense in first litigating its claims against Veoh 21 instead of the three additional defendants. Finally, although the Investor Defendants 22 have not yet answered the complaint, it is clear that they will have defenses available 23 to them that would be different in kind from those that may be available to Veoh. 24 These defenses, and the discovery related to them, would result in a more protracted 25 proceeding than the one between Plaintiffs and Veoh alone. 26 27 28 14 INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 C. Prejudice Or Harm Plaintiffs. 2 3 Granting Severance And A Stay Of The Severed Action Will Not Severance, and a corresponding stay of the severed action, will not prejudice or 4 harm Plaintiffs. Of course, it is the Investor Defendants' view that the claims should 5 be dismissed with prejudice immediately due to fatal legal defects as set out in the 6 Motion to Dismiss—not the kind of prejudice cognizable in a motion such as this. 7 But if the claims are not dismissed, there is no apparent reason why severance and a 8 stay would prejudice Plaintiffs' legal position as to the claims against the Investor 9 Defendants. To the contrary, a severance and stay will allow Plaintiffs to prosecute 10 their claims in an orderly and efficient manner. Indeed, Plaintiffs may save resources 11 by pursuing the parties seriatim. If Veoh prevails, the result will obviate the need for 12 Plaintiffs to try their case against Investor Defendants altogether, since no direct 13 infringement would have been established, and will save them the expense and time 14 of the additional discovery necessitated by the claims against the Investor 15 Defendants. If Plaintiffs prevail against Veoh, Plaintiffs will still have every 16 opportunity to take discovery regarding and to try their claims against the Investor 17 Defendants. 18 Nor will Plaintiffs be harmed by delay. The Investor Defendants do not 19 operate the allegedly infringing service, so the claims against the Investors Defendant 20 are directed to money damages. Although irreparable harm could not be presumed in 21 any event (see eBay, Inc. v. MercExchange, LLC, 547 U.S. 388, 392-93, 126 S.Ct. 22 1837, 164 L.E.2d 641(2006)), a delay in trying the claims against the Investors 23 clearly will not run afoul of any copyright interests. 24 D. Prejudiced by Plaintiffs’ Delay Tactics. 25 26 Severance Is The Right Approach Because Veoh Should Not Be Finally, Veoh will not be prejudiced by severance and a stay. To the contrary, 27 the Investor Defendants understand from their meet and confer efforts with Veoh that is preferable to an extension of the 28 Veoh supports this motion, and believes it15 INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 schedule as it applies to all parties. Severance and a stay as to the Investor 2 Defendants is the only approach that balances the interests of all parties. The 3 Investor Defendants will then have the time necessary to assert their defenses and 4 counterclaims, participate in discovery and prepare for trial. Veoh and Plaintiffs will 5 then be able to continue on their currently negotiated schedule, ensuring that Veoh is 6 not penalized by Plaintiffs' decision to add the Investor Defendants late in this action 7 and their willful failure to cooperate with the Investor Defendants in discovery. 8 Thus, severance is the right approach. 9 II. IN THE ALTERNATIVE, THE COURT SHOULD ORDER AN 10 IMMEDIATE STATUS CONFERENCE BETWEEN PLAINTIFFS AND 11 THE INVESTOR DEFENDANTS TO DISCUSS THE SCHEDULE AS IT 12 APPLIES TO PLAINTIFFS’ CLAIMS AGAINST THE INVESTOR 13 DEFENDANTS. 14 If the Court denies the Investor Defendants’ motion to sever and stay or 15 concludes it needs to hear further from parties about the status of the case, Investor 16 Defendants request the Court then schedule a status conference, at its earliest 5 17 convenience, between the Investor Defendants and Plaintiffs to discuss an 18 alternative schedule for discovery as it pertains to the Plaintiffs’ claims against the 19 Investor Defendants and their defenses thereto. As discussed herein, such a status 20 conference is necessary in light of the fact the Investor Defendants were added as 21 parties in the case at a late date, the fact discovery deadline is fast approaching and 22 Plaintiffs have refused to provide the Investor Defendants with copies of discovery it 23 served both prior to and after the FAC was filed. Plaintiffs have also refused to meet 24 5 Plaintiffs informed Investor Defendants that they would be willing to discuss the possibility of a status conference. (Badal Decl. ¶¶ 18, 19 & Exs. P, Q.) As Plaintiffs’ 26 counsel has indicated that he could not begin this discussion before December 1, 27 2008 and the fact discovery deadline is fast approaching, Investor Defendants believed it most efficient to seek this alternative relief now, in case the parties are 28 unable to reach an agreement as to a status16conference. 25 INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 and confer with the Investor Defendants as to a deposition and discovery schedule. 2 Indeed, Plaintiffs have suggested that the Investor Defendants are not “entitled to 3 demand such materials [copies of discovery] while contending that they are not 4 proper parties to this case [i.e. their motion to dismiss is pending].” (Badal Decl. ¶ 4 5 & Ex. C.) Moreover, under the current schedule, the close of fact discovery will 6 likely come and go before the Investor Defendants are required to answer the FAC 7 and assert any affirmative defenses and counterclaims. In light of the foregoing, the 8 Investor Defendants request a status conference to discuss the schedule as it pertains 9 to the Plaintiffs claims against them and their defenses thereto. In light of the rapidly 10 impending close of fact discovery deadline, the Investor Defendants ask the Court to 11 schedule the status conference as soon as practicable. 12 CONCLUSION 13 Investor Defendants respectfully request this Court grant their motion to sever 14 the claims against Investor Defendants and stay the severed action until the 15 underlying action between Plaintiffs and Veoh has been resolved. Alternatively, 16 Investor Defendants respectfully request this Court schedule a status conference 17 between Investor Defendants and Plaintiffs. 18 19 November 26, 2008 Respectfully submitted, 20 21 WILMER CUTLER HALE PICKERING & DORR LLP 22 ORRICK HERRINGTON & SUTCLIFFE LLP 23 24 By /s/ Robert G. Badal ROBERT G. BADAL 25 Attorneys for Defendants SHELTER CAPITAL PARTNERS, LLC and SHELTER VENTURE FUND, L.P. 26 27 28 17 INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX) 1 November 26, 2008 2 Respectfully submitted, KULIK, GOTTESMAN, MOUTON & SIEGEL, LLP 3 4 5 By /s/ Alisa S. Edelson GLEN L. KULIK ALISA S. EDELSON 6 7 Attorneys for Defendant THE TORNANTE COMPANY LLC 8 9 10 11 November 26, 2008 Respectfully submitted, WILMER CUTLER HALE PICKERING AND DORR LLP 12 13 14 By /s/ Maria Vento MARIA VENTO 15 16 Attorneys for Defendants SPARK CAPITAL PARTNERS, LLC AND SPARK CAPITAL, L.P. 17 18 19 20 21 22 23 24 25 26 27 28 18 INVESTOR DEFENDANTS’ MOTION TO SEVER AND STAY OR , IN THE ALTERNATIVE, FOR A STATUS CONFERNCE US1DOCS 6908185V1 CV07-5744 AHM (AJWX)
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