Arista Networks, Inc. v. Cisco Systems Inc., No. 5:2016cv00923 - Document 324 (N.D. Cal. 2018)

Court Description: ORDER DENYING 278 DEFENDANT'S PETITION FOR § 1292(b) CERTIFICATION FOR INTERLOCUTORY REVIEW. Signed by Judge Beth Labson Freeman on 6/8/2018. (blflc4S, COURT STAFF) (Filed on 6/8/2018)
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1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 ARISTA NETWORKS, INC., Plaintiff, 8 v. 9 10 CISCO SYSTEMS INC., 11 United States District Court Northern District of California Case No. 16-cv-00923-BLF Defendant. ORDER DENYING DEFENDANT’S PETITION FOR § 1292(b) CERTIFICATION FOR INTERLOCUTORY REVIEW [Re: ECF 278] 12 Before the Court is Defendant Cisco Systems Inc.’s (“Cisco”) petition for certification for 13 14 interlocutory review of the Court’s Order Denying Plaintiff’s Motion for Partial Summary 15 Judgment and Granting in Part and Denying in Part Defendant’s Motion for Summary Judgment 16 (“Order,” ECF 269). Pet., ECF 278. Plaintiff Arista Networks Inc. (“Arista”) opposes the 17 petition. Opp’n, ECF 282. Pursuant to Civil Local Rule 7-1(b), the Court finds Cisco’s petition to 18 be suitable for submission without oral argument and hereby VACATES the hearing scheduled for 19 September 20, 2018. For the same reason, Cisco’s request to schedule oral argument if necessary 20 on June 14, 2018 is DENIED. Having considered the briefing, as well as the governing law, the 21 Court finds that Cisco has not made a sufficient showing to warrant certification for interlocutory 22 review of the Order. Cisco’s petition is therefore DENIED. 23 I. 24 LEGAL STANDARD A district court may certify an order for interlocutory review “only in exceptional 25 situations in which allowing an interlocutory appeal would avoid protracted and expensive 26 litigation.” In re Cement Antitrust Litig., 673 F.2d 1020, 1026 (9th Cir. 1982). For a court to 27 grant interlocutory review of an order not otherwise appealable, the party seeking such review has 28 the burden of showing three things: (1) there is a controlling question of law upon which (2) there 1 is a substantial ground for difference of opinion, and (3) the immediate appeal of which will 2 materially advance the ultimate termination of the litigation. See 28 U.S.C. §1292(b). The 3 purpose of this statute is to provide “immediate appeal of interlocutory orders deemed pivotal and 4 debatable.” Swint v. Chambers Cnty. Comm’n, 514 U.S. 35, 46 (1995). Requests under § 1292(b) 5 are to be granted sparingly. See James v. Price Stern Sloan Inc., 283 F.3d 1064, 1068 n.6 (9th Cir. 6 2002). 7 II. Cisco seeks to certify the Order for interlocutory review by the Ninth Circuit under 28 8 9 DISCUSSION U.S.C. § 1292(b) based on the following issues: 10 1. Whether protection from antitrust liability under NoerrPennington extends to all truthful public statements incidental to a non-sham litigation, including statements about the bases for the litigation, and is not limited solely to communications directed to the settlement or prosecution of the litigation (the Noerr-Pennington issue”). United States District Court Northern District of California 11 12 13 2. Whether protection from antitrust liability under Harcourt Brace,1 which presumes that public statements about a rival have de minimis effect on competition, extends beyond statements that expressly disparage the rival (the “Harcourt Brace issue”). 14 15 16 Pet. 5. Cisco asserts that each question involves a controlling question of law as to which there is 17 a substantial ground for difference of opinion and that an immediate appeal may materially 18 advance the ultimate termination of the litigation. See generally Pet. 19 A. 20 i. 21 22 23 The Noerr-Pennington Issue Controlling Question of Law Cisco argues that whether the Noerr-Pennington doctrine protects Cisco’s communications turns on a “controlling question of law” because resolution of that question would “materially affect the outcome of [this] litigation” and the issue does not “turn on complicated or disputed 24 facts.” Pet. 7. Cisco also contends that the issue presents important precedential value. Id. Arista 25 counters that Cisco fails to show that the Noerr-Pennington issue is a pure question of law rather 26 27 1 28 Am. Prof’l Testing Serv., Inc. v. Harcourt Brace Jovanovich Legal & Prof’l Pub’ns, Inc., 108 F.3d 1147 (9th Cir. 1997). 2 1 2 than “this Court’s application of the law to the facts before it.” Opp’n 3. The Court disagrees with Cisco’s arguments. As Arista responds, Cisco’s contention that 3 the issue’s resolution on appeal could materially affect the outcome of this litigation is not enough. 4 A “mixed question of law and fact or the application of law to a particular set of facts” is not 5 appropriate for interlocutory review. Johnson v. Serenity Transportation, Inc., No. 15-CV-02004- 6 JSC, 2017 WL 3168491, at *1 (N.D. Cal. July 26, 2017) (citation omitted). 7 In this case, the Court applied the law of this circuit as articulated in Sosa. Order 20–22 8 (citing Sosa v. DIRECTV, Inc,. 437 F.3d 923, 935 (9th Cir. 2006) (“[C]ommunications between 9 private parties are sufficiently within the protection of the Petition Clause to trigger the Noerr– Pennington doctrine, so long as they are sufficiently related to petitioning activity.”)). The Court 11 United States District Court Northern District of California 10 found that Cisco’s communications at issue were not incidental to the prosecution of Cisco’s CLI 12 lawsuit unlike the pre-suit demand letters in Sosa. Id. Contrary to Cisco’s contention that the 13 Court reached a legal conclusion by making a “qualitative distinction” without any in-depth 14 exploration of the record (Pet. 8), the Court explicitly listed Cisco’s communications that Arista 15 relies on to allege the purported “open early, closed late” scheme and applied Sosa’s holding to the 16 facts of the case. Order 18–19, 21–22. In this regard, the Court found that “Cisco’s 17 communications at issue in this case had little relevance to Cisco’s ability to pursue its CLI 18 lawsuit” and concluded that “a reasonable jury could find that Cisco raised the specter of the CLI 19 lawsuit to persuade customers to abandon Cisco’s competitors.” Id. at 22. In other words, the 20 Court did not reach a purely legal conclusion detached from the record but instead applied Sosa’s 21 holding to the facts . 22 Cisco asserts that the Court’s decision “necessarily turns on the legal question of what 23 ‘incidental to the prosecution’ means.” Reply 2, ECF 307 (emphasis in original). But the fact that 24 the Court’s determination of whether Cisco’s communications were “incidental” involves a legal 25 question does not mean that the Order ruled on a purely legal question. As explained above, the 26 Court applied the law to a particular set of facts in this case. As Arista points out, to cast the 27 Court’s decision as a pure question of law, Cisco must contend that “any statement made by a 28 company that has filed a lawsuit should be deemed ‘incidental’ to litigation . . . as a matter of law, 3 1 no matter how tenuously related to litigation, as long as it is not demonstrably false.” Opp’n 5 2 (emphasis added). But that contention contradicts the Ninth Circuit’s “sufficiently related to 3 petitioning activity” standard set forth in Sosa and thus provides no basis for an interlocutory 4 appeal. 5 Cisco further argues that even if the question depended on the “application of the law to 6 the facts,” that is no reason to foreclose an interlocutory review. Reply 2. According to Cisco, the 7 Ninth Circuit and other courts have held that the application of law to accepted facts warrants 8 § 1292(b) certification. Id. (citing Steering Comm. v. United States, 6 F.3d 572, 575–76 (9th Cir. 9 1993); In re Text Messaging Antitrust Litig., 630 F.3d 622, 625–27 (7th Cir. 2010)). However, the cases cited by Cisco involved unique circumstances. In Steering Committee, the court held that 11 United States District Court Northern District of California 10 interlocutory review of liability determinations of a “multidistrict, multiparty case of the sort at 12 hand” is appealable because such a review served the congressional purposes underlying § 13 1292(b). 6 F.3d at 575 (citation omitted). Moreover, the court did identify a pure legal question 14 in that case. Id. In re Text Messaging involved a situation where the Seventh Circuit was asked to 15 interpret and apply the pleading standard set forth in Twombly to a set of factual allegations “taken 16 as true.” 630 F.3d at 625. The situations in Steering Committee and In re Text Messaging are not 17 implicated here. Unlike those cases, the Court does not find this case to be an “exceptional 18 circumstance[] that justif[ies] a departure from the basic policy of postponing appellate review 19 until after the entry of a final judgment.” In re Cement Antitrust Litig., 673 F.2d at 1026. 20 21 Accordingly, Cisco has not met its burden to satisfy the first requirement of § 1292(b). ii. Substantial Ground for Difference of Opinion 22 Cisco claims that a substantial ground for difference of opinion exists as to the Noerr- 23 Pennington issue. Pet. 10. “To determine if a ‘substantial ground for difference of opinion’ 24 exists under § 1292(b), courts must examine to what extent the controlling law is unclear.” Couch 25 v. Telescope Inc., 611 F.3d 629, 633 (9th Cir. 2010). A substantial ground for difference of 26 opinion may be found where “the circuits are in dispute on the question and the court of appeals of 27 the circuit has not spoken on the point, if complicated questions arise under foreign law, or if 28 novel and difficult questions of first impression are presented.” Id. 4 1 To be sure, cases from other circuits have reached conclusions that are favorable to Cisco’s 2 position. However, the mere fact that other courts have taken a different approach does not 3 demonstrate a substantial difference of opinion under the meaning of § 1292(b). Couch, 611 F.3d 4 at 633 (“[J]ust because counsel contends that one precedent rather than another is controlling does 5 not mean there is such a substantial difference of opinion [that] support[s] an interlocutory 6 appeal.”). 7 Moreover, as Arista argues, the Ninth Circuit in Sosa articulated that communications are 8 protected so long as they are “sufficiently related to petitioning activity.” Sosa, 437 F.3d at 935. 9 Courts within this circuit have applied Sosa since it was issued in 2006. Thus, the Court agrees with Arista’s argument that the Ninth Circuit has addressed the issue raised by Cisco. Moreover, 11 United States District Court Northern District of California 10 even assuming that the Ninth Circuit has not addressed the precise question Cisco seeks to certify, 12 that fact would be insufficient to support an existence of a “substantial ground for difference of 13 opinion.” See Couch, 611 F.3d at 633 (“[J]ust because a court is the first to rule on a particular 14 question . . . does not mean there is such a substantial difference of opinion.”). Understandably, 15 Cisco disagrees with the Court’s ruling. However, it would be imprudent for a court to throw up 16 its hands and permit interlocutory review whenever the Noerr-Pennington doctrine is implicated 17 and the moving party disagrees. See, e.g., Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Ready 18 Pac Foods, Inc., 2011 WL 1059284 (C.D. Cal. Mar. 18, 2011) (“[I]n ruling on motions to certify 19 pursuant to 28 U.S.C. § 1292(b), ‘a party’s strong disagreement with the Court’s ruling is not 20 sufficient for there to be a substantial ground for difference of opinion.’”). 21 22 iii. Material Advance of the Ultimate Termination of the Litigation Cisco argues that reversal on the Noerr-Pennington issue on interlocutory appeal would 23 terminate the entire case. Pet. 13. Cisco also asserts that a quicker resolution of the issue on 24 appeal would aid settlement. Id. Arista counters that delaying trial in favor of a lengthy appeal 25 process will not “advance” termination of the litigation. Opp’n 8. Furthermore, Arista argues that 26 an impending trial is more likely to promote settlement. Id. at 9. In response, Cisco states that the 27 supposed delay in trial is unfounded because Cisco has not requested the Court to stay the case 28 and it continues to prepare for trial. Reply 4. 5 The Court is a bit bewildered by Cisco’s argument. On one hand, Cisco emphasizes that 1 2 an interlocutory appeal would be a more efficient use of resources than an expensive trial (Pet. 3 13), but on the other hand, it argues that Arista’s concern on delaying the trial (which in Arista’s 4 view prolongs the resolution of the case) is baseless because Cisco has not requested a stay of the 5 trial (Reply 4). Thus, it is unclear whether Cisco intends to seek a stay if the Court grants the 6 instant petition. In any case, a reversal of the Court’s Order may terminate the litigation in this forum, but 7 8 this by itself is not enough to merit interlocutory review. See, e.g., Environmental Protection Info. 9 Cntr. v. Pac. Lumber Co., 2004 WL 838160, at *3 (denying a motion to certify, stating that “[e]very denial of a dispositive motion may result in reversal at the appellate court, which may, in 11 United States District Court Northern District of California 10 turn, conclude the case outright”) (emphasis in original). Moreover, given the complex dispute 12 between the parties, the Court is unconvinced that an interlocutory appeal of the Order will 13 materially advance the termination of this litigation as opposed to proceeding with trial. The 14 Court therefore finds that Cisco has failed to show that the third §1292(b) requirement is satisfied. 15 B. 16 The Harcourt Brace Issue i. Controlling Question of Law Cisco contends that whether its communications and purported “FUD tactics”2 are subject 17 18 to Harcourt Brace is a pure question of law. Pet. 14. Arista counters that Cisco is disagreeing 19 with how the Court applied Harcourt Brace to the facts. Opp’n 5. The Court concludes that Cisco has not shown that its Harcourt Brace issue turns on a 20 21 “controlling question of law.” In the Order, the Court found that there is a genuine issue of 22 material fact on whether Cisco’s statements constituted a reversal of the purported open-CLI 23 policy and whether Cisco’s sales tactics amounted to exclusionary conduct. Order 23–25. Cisco 24 appears to attempt to flout the Court’s factual finding by arguing that the Ninth Circuit would need 25 to rule only whether Harcourt Brace applies to all statements announcing a lawsuit regardless of 26 whether they “disparage” a rival. Pet. 14. Cisco further assumes that Arista lacks evidence to 27 28 2 FUD is an acronym for “fear, uncertainty and doubt.” 6 1 survive the Harcourt Brace standard. See id.; Reply 4. But even if the Ninth Circuit were to 2 expand Harcourt Brace’s standard (and perhaps in a modified form), the result would not 3 necessarily resolve the issue due to underlying disputed facts and the evidence in the record. For 4 this reason, the Court is unpersuaded that the Harcourt Brace issue is a “controlling question of 5 law.” See In re Cement Antitrust Litig., 673 F.2d at 1026 (holding that a “controlling” question of 6 law is one that may “materially affect the eventual outcome of the litigation.”) 7 8 9 ii. Substantial Ground for Difference of Opinion Cisco argues that a substantial ground for difference of opinion exists as to the Harcourt Brace issue. Pet. 15. Its main argument is that “[r]easonable jurists could disagree on how to resolve this issue.” Id. In support, Cisco discusses Harcourt Brace and argues that nowhere does 11 United States District Court Northern District of California 10 that case hold that “it is limited to ‘disparaging’ speech, nor has any Court held that Harcourt 12 Brace must be limited to disparagement.” Pet. 15. In addition, Cisco asserts that its purported 13 FUD tactics are “more properly analyzed under the law of deceptive marketing” and thus must be 14 subject to the Harcourt Brace test even if FUD-related statements are not disparaging. Id. at 16 15 (citing Eisai, Inc. v. Sanofi Aventis U.S., LLC, 821 F.3d 394, 407 n.40 (3d Cir. 2016) (emphasis 16 added)). 17 Here, Cisco is merely strongly disagreeing with the Court’s ruling. But “in ruling on 18 motions to certify pursuant to 28 U.S.C. § 1292(b), a party’s strong disagreement with the Court’s 19 ruling is not sufficient for there to be a substantial ground for difference of opinion.” Nat’l Union 20 Fire, 2011 WL 1059284, at *4 (internal quotation marks omitted). As such, Cisco’s contention 21 that reasonable jurists could disagree and that one out-of-circuit case suggests a different result is 22 insufficient to show a substantial ground for difference of opinion. Cf. Couch, 611 F.3d at 633 23 (“[J]ust because counsel contends that one precedent rather than another is controlling does not 24 mean there is such a substantial difference of opinion [that] support[s] an interlocutory appeal.”). 25 Accordingly, the Court finds that Cisco has failed its burden to meet the second requirement of § 26 1292(b) as to the Harcourt Brace issue. 27 28 iii. Material Advance of the Ultimate Termination of the Litigation The parties raise the same arguments discussed in relation to the Noerr-Pennington issue. 7 1 For the same reasons explained above, the Court finds that Cisco has failed to satisfy the third 2 §1292(b) requirement as to the Harcourt Brace issue. 3 III. 4 CONCLUSION Interlocutory review is appropriate in extraordinary cases, “not simply where issues are 5 hard or questions are somewhat new.” Pacific Lumber, 2004 WL 838160, at *6 (citing Coopers & 6 Lyband v. Livesay, 437 U.S. 463, 474 (1978)). Cisco has not met its burden to show that such 7 review would be appropriate here, and the Court DENIES its petition. 8 IT IS SO ORDERED. 9 10 United States District Court Northern District of California 11 12 Dated: June 8, 2018 ______________________________________ BETH LABSON FREEMAN United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8